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3,551.7 | What is the sum of Home equity in 2011 and Operating lease obligations for Total? (in million) | existing short-term and long-term commitments and plans, and also to provide adequate financial flexibility to take advantage of potential strategic business opportunities should they arise within the next year. However, there can be no assurance of the cost or availability of future borrowings, if any, under our commercial paper program, in the debt markets or our credit facilities. At December 31, 2016 and 2015, our pension plans were $20.1 billion and $17.9 billion underfunded as measured under GAAP. On an Employee Retirement Income Security Act (ERISA) basis our plans are more than 100% funded at December 31, 2016 with minimal required contributions in 2017. We expect to make contributions to our plans of approximately $0.5 billion in 2017. We may be required to make higher contributions to our pension plans in future years. At December 31, 2016, we were in compliance with the covenants for our debt and credit facilities. The most restrictive covenants include a limitation on mortgage debt and sale and leaseback transactions as a percentage of consolidated net tangible assets (as defined in the credit agreements), and a limitation on consolidated debt as a percentage of total capital (as defined). When considering debt covenants, we continue to have substantial borrowing capacity. Contractual Obligations The following table summarizes our known obligations to make future payments pursuant to certain contracts as of December 31, 2016, and the estimated timing thereof.
<table><tr><td>(Dollars in millions)</td><td>Total</td><td>Lessthan 1year</td><td>1-3years</td><td>3-5years</td><td>After 5years</td></tr><tr><td>Long-term debt (including current portion)</td><td>$9,945</td><td>$327</td><td>$1,911</td><td>$1,840</td><td>$5,867</td></tr><tr><td>Interest on debt<sup>-1</sup></td><td>5,656</td><td>459</td><td>872</td><td>691</td><td>3,634</td></tr><tr><td>Pension and other postretirement cash requirements</td><td>15,476</td><td>779</td><td>3,412</td><td>3,969</td><td>7,316</td></tr><tr><td>Capital lease obligations</td><td>144</td><td>60</td><td>64</td><td>13</td><td>7</td></tr><tr><td>Operating lease obligations</td><td>1,494</td><td>239</td><td>400</td><td>235</td><td>620</td></tr><tr><td>Purchase obligations not recorded on the Consolidated Statements of Financial Position</td><td>107,564</td><td>38,458</td><td>31,381</td><td>20,478</td><td>17,247</td></tr><tr><td>Purchase obligations recorded on the Consolidated Statements of Financial Position</td><td>17,415</td><td>16,652</td><td>746</td><td>3</td><td>14</td></tr><tr><td>Total contractual obligations<sup>-2</sup></td><td>$157,694</td><td>$56,974</td><td>$38,786</td><td>$27,229</td><td>$34,705</td></tr></table>
(1) Includes interest on variable rate debt calculated based on interest rates at December 31, 2016. Variable rate debt was 3% of our total debt at December 31, 2016. (2) Excludes income tax matters. As of December 31, 2016, our net liability for income taxes payable, including uncertain tax positions of $1,557 million, was $1,169 million. For further discussion of income taxes, see Note 4 to our Consolidated Financial Statements. We are not able to reasonably estimate the timing of future cash flows related to uncertain tax positions. Pension and Other Postretirement Benefits Pension cash requirements are based on an estimate of our minimum funding requirements, pursuant to ERISA regulations, although we may make additional discretionary contributions. Estimates of other postretirement benefits are based on both our estimated future benefit payments and the estimated contributions to plans that are funded through trusts. Purchase Obligations Purchase obligations represent contractual agreements to purchase goods or services that are legally binding; specify a fixed, minimum or range of quantities; specify a fixed, minimum, variable, or indexed price provision; and specify approximate timing of the transaction. Purchase obligations include amounts recorded as well as amounts that are not recorded on the Consolidated Statements of Financial Position. 2007: The gain from asset sales relates to the sale of the Corporation’s interests in the Scott and Telford fields in the United Kingdom North Sea. The charge for asset impairments relates to two mature fields also in the United Kingdom North Sea. The estimated production imbalance settlements represent a charge for adjustments to prior meter readings at two offshore fields, which are recorded as a reduction of sales and other operating revenues.2006: The gains from asset sales relate to the sale of certain United States oil and gas producing properties located in the Permian Basin in Texas and New Mexico and onshore Gulf Coast. The accrued office closing cost relates to vacated leased office space in the United Kingdom. The related expenses are reflected principally in general and administrative expenses. The income tax adjustment represents a one-time adjustment to the Corporation’s deferred tax liability resulting from an increase in the supplementary tax on petroleum operations in the United Kingdom from 10% to 20%. The Corporation’s future Exploration and Production earnings may be impacted by external factors, such as political risk, volatility in the selling prices of crude oil and natural gas, reserve and production changes, industry cost inflation, exploration expenses, the effects of weather and changes in foreign exchange and income tax rates. Marketing and Refining Earnings from Marketing and Refining activities amounted to $277 million in 2008, $300 million in 2007 and $394 million in 2006. After considering the liquidation of LIFO inventories reflected in the table on page 21 and discussed below, the earnings were $277 million, $276 million and $394 million, respectively. Refining: Refining earnings, which consist of the Corporation’s share of HOVENSA’s results, Port Reading earnings, interest income on a note receivable from PDVSA and results of other miscellaneous operating activities, were $73 million in 2008, $193 million in 2007, and $240 million in 2006. The Corporation’s share of HOVENSA’s net income was $27 million ($44 million before income taxes) in 2008, $108 million ($176 million before income taxes) in 2007 and $124 million ($201 million before income taxes) in 2006. The lower earnings in 2008 and 2007, compared with the respective prior years, were principally due to lower refining margins. The 2008 utilization rate for the fluid catalytic cracking unit at HOVENSA reflects lower utilization due to weak refining margins, planned and unplanned maintenance of certain units, and a refinery wide shut down for Hurricane Omar. In 2007, the coker unit at HOVENSAwas shutdown for approximately 30 days for a scheduled turnaround. Certain related processing units were also included in this turnaround. In 2006, the fluid catalytic cracking unit at HOVENSA was shutdown for approximately 22 days of unscheduled maintenance. Cash distributions received by the Corporation from HOVENSA were $50 million in 2008, $300 million in 2007 and $400 million in 2006. Pre-tax interest income on the PDVSA note was $4 million, $9 million and $15 million in 2008, 2007 and 2006, respectively. Interest income is reflected in other income in the income statement. At December 31, 2008, the remaining balance of the PDVSA note was $15 million, which was fully repaid in February 2009. Port Reading and other after-tax refining earnings were $43 million in 2008, $79 million in 2007 and $107 million in 2006, also reflecting lower refining margins. The following table summarizes refinery utilization rates:
<table><tr><td></td><td colspan="2" rowspan="2" Refinery Capacity (Thousands of barrels per day)></td><td colspan="3"> Refinery Utilization</td></tr><tr><td></td><td> 2008</td><td> 2007</td><td> 2006</td></tr><tr><td>HOVENSA</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Crude</td><td>500</td><td></td><td> 88.2%</td><td>90.8%</td><td>89.7%</td></tr><tr><td>Fluid catalytic cracker</td><td>150</td><td></td><td> 72.7%</td><td>87.1%</td><td>84.3%</td></tr><tr><td>Coker</td><td>58</td><td></td><td> 92.4%</td><td>83.4%</td><td>84.3%</td></tr><tr><td>Port Reading</td><td>70</td><td>*</td><td> 90.7%</td><td>93.2%</td><td>97.4%</td></tr></table>
* Refinery utilization in 2007 and 2006 is based on capacity of 65 thousand barrels per day Lending Activities People’s United Financial conducts its lending activities principally through its Commercial Banking and Retail and Business Banking operating segments. People’s United Financial’s lending activities consist of originating loans secured by commercial and residential properties, and extending secured and unsecured loans to commercial and consumer customers. Total loans increased $2.65 billion in 2013 compared to 2012 and increased $1.35 billion in 2012 compared to 2011. People’s United Financial acquired loans with fair values of $1.87 billion in 2011 and $3.49 billion in 2010. Loans acquired in connection with business combinations beginning in 2010 are referred to as ‘acquired’ loans as a result of the manner in which they are accounted for (see further discussion under ‘Acquired Loans’ in Note 1 to the Consolidated Financial Statements). All other loans are referred to as ‘originated’ loans. At December 31, 2013 and 2012, the carrying amount of the acquired loan portfolio totaled $1.53 billion and $2.24 billion, respectively. The following table summarizes the loan portfolio before deducting the allowance for loan losses:
<table><tr><td>As of December 31 (in millions)</td><td>2013</td><td>2012</td><td>2011</td><td>2010</td><td>2009</td></tr><tr><td>Commercial Banking:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial real estate -1</td><td>$8,921.6</td><td>$7,294.2</td><td>$7,172.2</td><td>$7,306.3</td><td>$5,399.4</td></tr><tr><td>Commercial and industrial -1</td><td>6,302.1</td><td>6,047.7</td><td>5,352.6</td><td>3,095.6</td><td>2,805.7</td></tr><tr><td>Equipment financing</td><td>2,593.1</td><td>2,352.3</td><td>2,014.2</td><td>2,095.4</td><td>1,236.8</td></tr><tr><td>Total Commercial Banking</td><td>17,816.8</td><td>15,694.2</td><td>14,539.0</td><td>12,497.3</td><td>9,441.9</td></tr><tr><td>Retail:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Adjustable-rate</td><td>3,895.3</td><td>3,335.2</td><td>2,947.7</td><td>2,117.9</td><td>2,230.2</td></tr><tr><td>Fixed-rate</td><td>521.3</td><td>550.9</td><td>680.7</td><td>529.6</td><td>182.4</td></tr><tr><td>Total residential mortgage</td><td>4,416.6</td><td>3,886.1</td><td>3,628.4</td><td>2,647.5</td><td>2,412.6</td></tr><tr><td>Consumer:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Home equity</td><td>2,084.6</td><td>2,051.5</td><td>2,057.7</td><td>1,976.8</td><td>1,986.3</td></tr><tr><td>Other consumer</td><td>72.3</td><td>104.8</td><td>159.7</td><td>201.1</td><td>258.7</td></tr><tr><td>Total consumer</td><td>2,156.9</td><td>2,156.3</td><td>2,217.4</td><td>2,177.9</td><td>2,245.0</td></tr><tr><td>Total Retail</td><td>6,573.5</td><td>6,042.4</td><td>5,845.8</td><td>4,825.4</td><td>4,657.6</td></tr><tr><td>Total loans</td><td>$24,390.3</td><td>$21,736.6</td><td>$20,384.8</td><td>$17,322.7</td><td>$14,099.5</td></tr></table>
(1) Following the Company’s 2010 acquisitions and core system conversion, the Company undertook a portfolio review to ensure consistent classification of commercial loans in an effort to align policy across the Company’s expanded franchise and better conform to industry practice for such loans. As a result, approximately $875 million of loans secured, in part, by owner-occupied commercial properties were reclassified from commercial real estate loans to commercial and industrial loans as of March 31, 2011. The primary collateral for these loans generally consists of the borrower’s general business assets (i. e. non-real estate collateral) and the loans were underwritten principally on the basis of the adequacy of business cash flows. This reclassification is being applied prospectively as it was deemed impracticable to do so for prior periods due to the fact that the underlying loan information is no longer available as it previously resided on legacy loan systems that are no longer utilized or supported following the Company’s core system conversion. shipment volumes. Plywood prices increased from 2006, providing a partial offset to the lower prices realized for OSB. – The contribution from engineered I-joists and engineered solid section declined $180 million – about 50 percent from lower price realizations and 50 percent from reduced shipment volumes. – The contribution from sales of other building products declined approximately $40 million primarily as a result of reduced shipment volumes due to the decline in demand. ?The net effect of legal settlements adversely affected the segment by $483 million.2007 included $21 million of charges for legal settlements.2006 included income of $462 million, including: – $344 million of income from refunds of countervailing and anti-dumping deposits relating to the softwood lumber dispute between the U. S. and Canada, – $95 million of income from a reversal of the reserve for alder antitrust litigation and – $23 million of income from a reduction in the reserve for hardboard siding claims. ?Charges resulting from the closure or sale of various manufacturing facilities and distribution locations. ?Gains on the sale of operations declined by $51 million as 2006 included the sale of the North American composite panel operations and 2007 had no comparable activity. These decreases were partially offset by lower raw material, manufacturing, and selling and general administrative costs, which increased the contribution to earnings by approximately $290 million. OUR OUTLOOK The segment recognized a fourth-quarter loss of $960 million, which included $761 million of charges for asset impairments, closures and restructuring activities. The operating results reflected significantly lower prices for lumber and oriented strand board and reduced sales volumes as a result of the continued decline in the housing market. We expect challenging housing market conditions to continue into the first quarter 2009 and expect first-quarter results for the segment to be comparable to the fourth quarter of 2008, excluding asset impairment, closure and restructuring charges. CELLULOSE FIBERS HOW WE DID IN 2008 We report sales volume and annual production data for our Cellulose Fibers business segment in Our Business/What We Do/Cellulose Fibers. Here is a comparison of net sales and revenues and contribution to earnings for the last three years: Net Sales and Revenues and Contribution to Earnings for Cellulose Fibers |
2,009 | As As the chart 0 shows,the value of the Asset- backed securities at December 31,which year ranks first? | A detailed reconciliation of available for sale, trading securities and equity investments measured at fair value on a recurring basis using Level 3 inputs for the year ended December 31, 2009 follows.
<table><tr><td> Level 3 Instruments OnlyIn millions</td><td>Residential mortgage- backed agency</td><td>Residential mortgage- backed non-agency</td><td>Commercial mortgage- backed non-agency</td><td>Asset- backed</td><td>State and municipal</td><td>Other debt</td><td>Corporate stocks and other</td><td>Total available forsale securities</td></tr><tr><td>December 31, 2008</td><td></td><td>$3,304</td><td>$337</td><td>$833</td><td>$271</td><td>$34</td><td>$58</td><td>$4,837</td></tr><tr><td>National City acquisition</td><td>$7</td><td>899</td><td></td><td>59</td><td>50</td><td>48</td><td></td><td>1,063</td></tr><tr><td>January 1, 2009</td><td>7</td><td>4,203</td><td>337</td><td>892</td><td>321</td><td>82</td><td>58</td><td>5,900</td></tr><tr><td>Total realized/unrealized gains or losses:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Included in earnings (**)</td><td></td><td>-444</td><td>-6</td><td>-104</td><td></td><td>-9</td><td></td><td>-563</td></tr><tr><td>Included in other comprehensive income</td><td>-2</td><td>616</td><td>627</td><td>-22</td><td>-2</td><td>4</td><td>-6</td><td>1,215</td></tr><tr><td>Purchases, issuances, and settlements, net</td><td></td><td>-713</td><td>-253</td><td>-37</td><td>-23</td><td>-19</td><td>-5</td><td>-1,050</td></tr><tr><td>Transfers into Level 3, net</td><td></td><td>4,640</td><td>-699</td><td>525</td><td>-30</td><td>-5</td><td></td><td>4,431</td></tr><tr><td>December 31, 2009</td><td>$5</td><td>$8,302</td><td>$6</td><td>$1,254</td><td>$266</td><td>$53</td><td>$47</td><td>$9,933</td></tr><tr><td>(**) Amounts attributable to unrealized gains or losses related to available for salesecurities held at December 31, 2009:</td><td></td><td>$-444</td><td>$-6</td><td>$-104</td><td></td><td>$-9</td><td></td><td>$-563</td></tr></table>
(**) Amounts attributable to unrealized gains or losses related to available for sale securities held at
<table><tr><td> Level 3 Instruments OnlyIn millions</td><td>Trading securities debt</td><td>Trading securities equity</td><td>Equity investments - direct</td><td>Equity investments - indirect</td></tr><tr><td>December 31, 2008</td><td>$56</td><td>$17</td><td>$322</td><td>$249</td></tr><tr><td>National City acquisition</td><td>26</td><td>6</td><td>287</td><td>323</td></tr><tr><td>January 1, 2009</td><td>82</td><td>23</td><td>609</td><td>572</td></tr><tr><td>Total realized/unrealized gains or losses:</td><td></td><td></td><td></td><td></td></tr><tr><td>Included in earnings (**)</td><td>-3</td><td>1</td><td>-24</td><td>-20</td></tr><tr><td>Purchases, issuances, and settlements, net</td><td>8</td><td>-20</td><td>10</td><td>41</td></tr><tr><td>Transfers into Level 3, net</td><td>2</td><td>-4</td><td></td><td></td></tr><tr><td>December 31, 2009</td><td>$89</td><td>$—</td><td>$595</td><td>$593</td></tr><tr><td>(**) Amounts attributable to unrealized gains or losses related to trading securitiesand equity investments held at December 31, 2009:</td><td></td><td></td><td>$-33</td><td>$-19</td></tr></table>
Interest income earned from trading securities totaled $61 million for 2009, $116 million for 2008 and $116 million for 2007. These amounts are included in other interest income on the Consolidated Income Statement. Nonrecurring Fair Value Changes We may be required to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of lower-of-cost-or-fair value accounting or write-downs of individual assets due to impairment. The amounts below for nonaccrual loans and loans held for sale represent the carrying value of loans for which adjustments are primarily based on the appraised value of collateral or based on an observable market price, which often results in significant management assumptions and input with respect to the determination of fair value. The fair value determination of the equity investment resulting in an impairment loss included below was based on observable market data for other comparable entities as adjusted for internal assumptions and unobservable inputs. The amounts below for commercial servicing rights reflect a recovery of a certain strata during 2009 while no strata were impaired at December 31, 2009 and two strata were impaired at December 31, 2008. The fair value of commercial mortgage servicing rights is estimated by using an internal valuation model. The model calculates the present value of estimated future net servicing cash flows considering estimates of servicing revenue and costs, discount rates and prepayment speeds. Annually, this model is subject to an internal review process to validate controls and model results. As of December 31, 2009 and 2008, we had a liability for uncertain tax positions excluding interest and penalties of $227 million and $257 million, respectively. A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows: Changes in Unrecognized Tax Benefits
<table><tr><td>In millions</td><td>2009</td><td>2008</td><td>2007</td></tr><tr><td>Balance of gross unrecognized tax benefits at January 1</td><td>$257</td><td>$57</td><td>$49</td></tr><tr><td>Increases:</td><td></td><td></td><td></td></tr><tr><td>Positions taken during a prior period</td><td>22</td><td>203(a)</td><td>52(b)</td></tr><tr><td>Positions taken during the current period</td><td>26</td><td></td><td>1</td></tr><tr><td>Decreases:</td><td></td><td></td><td></td></tr><tr><td>Positions taken during a prior period</td><td>-39</td><td>-3</td><td>-2</td></tr><tr><td>Settlements with taxing authorities</td><td>-34</td><td></td><td>-39</td></tr><tr><td>Reductions resulting from lapse of statute of limitations</td><td>-5</td><td></td><td>-4</td></tr><tr><td>Balance of gross unrecognized tax benefits at December 31</td><td>$227</td><td>$257</td><td>$57</td></tr></table>
(a) Includes $202 million acquired from National City. (b) Includes $42 million acquired from Mercantile.
<table><tr><td>December 31, 2009 – In millions</td><td> 2009</td></tr><tr><td>Unrecognized tax benefits related to:</td><td></td></tr><tr><td>Acquired companies within measurement period:</td><td></td></tr><tr><td>Permanent differences</td><td>$5</td></tr><tr><td>Other:</td><td></td></tr><tr><td>Temporary differences</td><td>37</td></tr><tr><td>Permanent differences</td><td>185</td></tr><tr><td>Total</td><td>$227</td></tr></table>
Any changes in the amounts of unrecognized tax benefits related to temporary differences would result in a reclassification to deferred tax liability; any changes in the amounts of unrecognized tax benefits related to other permanent differences (per above table) would result in an adjustment to income tax expense and therefore our effective tax rate. The unrecognized tax benefits related to other permanent items above that if recognized would affect the effective tax rate is $162 million. This is less than the total 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 $44 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 (IRS) and we have resolved all disputed matters through the IRS appeals division. The IRS is currently examining the 2004 through 2006 consolidated federal income tax returns of The PNC Financial Services Group, Inc. and subsidiaries and we expect that examination to conclude, with all adjustments being agreed to, in the first half of 2010. We expect the IRS to begin its examination of our 2007 and 2008 consolidated federal income tax returns during 2010. The consolidated federal income tax returns of National City through 2004 have been audited by the IRS and we have resolved all matters through the IRS Appeals division. The formal closing agreement is not yet executed. The IRS has completed field examination of the 2005 through 2007 consolidated federal income tax returns of National City and unresolved issues will be appealed. We expect the 2008 federal income tax return to begin being audited later in 2010. California, Delaware, District of Columbia, Florida, Illinois, Indiana, Maryland, Missouri, New Jersey, New York, and New York City are principally where we were subject to state and local income tax. Audits currently in process for these states include: California (2003-2005), Illinois (2004-2007), Indiana (2004-2007), Missouri (2003-2005), New York (2001- 2006), and New York City (2005-2007). In the ordinary course of business we are routinely subject to audit by the taxing authorities of states and at any given time a number of audits will be in process. The years remaining open under the statute of limitations for assessing income taxes is 2006 or 2007 and later for most state and local jurisdictions. Our policy is to classify interest and penalties associated with income taxes as income tax expense. For 2009, we had net recoveries of $24 million of gross interest and penalties reducing income tax expense. The total accrued interest and penalties at December 31, 2009 and December 31, 2008 was $144 million and $164 million, respectively. 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 must 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, or insurance policies (the Financial Assurance Instruments), or trust deposits, which are included in restricted cash and marketable securities and other assets in our consolidated balance sheets. 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 require a third-party engineering specialist to determine the estimated capping, closure and post-closure 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 must 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 2014, although the mix of financial assurance instruments may change. These financial instruments are issued in the normal course of business and are not considered indebtedness. Because we currently have no liability for the 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, 2013, 2012 and 2011 is calculated as follows (in millions of dollars): |
-0.99467 | What's the current growth rate of Purchase of minerals in-place? (in %) | APACHE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company recognizes over the requisite service period the fair value cost determined at the grant date based on numerous assumptions, including an estimate of the likelihood that Apache’s stock price will achieve these thresholds and the expected forfeiture rate. If a price target is not met before the end of the stated achievement period, any unamortized expense must be immediately recognized. Since the $162 interim price target of the 2008 Share Appreciation Program was not met prior to the stated achievement period, on December 31, 2010, Apache recognized $27 million of unamortized expense and $14 million of unamortized capital costs. The Company will recognize total expense and capitalized costs for the 2008 Share Appreciation Program of approximately $188 million through 2014. As of March 2011, the Company had recognized $79 million of total expense and capitalized costs for the 2005 Share Appreciation Program and had no unamortized costs remaining. A summary of the amounts recognized as expense and capitalized costs for each plan are detailed in the table below:
<table><tr><td></td><td colspan="3"> For the Year Ended December 31,</td></tr><tr><td></td><td> 2011</td><td> 2010</td><td> 2009</td></tr><tr><td></td><td colspan="3"> (In millions)</td></tr><tr><td> 2008 Share Appreciation Program</td><td></td><td></td><td></td></tr><tr><td>Compensation expense</td><td>$8</td><td>$49</td><td>$23</td></tr><tr><td>Compensation expense, net of tax</td><td>5</td><td>31</td><td>15</td></tr><tr><td>Capitalized costs</td><td>5</td><td>27</td><td>13</td></tr><tr><td> 2005 Share Appreciation Plan</td><td></td><td></td><td></td></tr><tr><td>Compensation expense</td><td>$1</td><td>$6</td><td>$6</td></tr><tr><td>Compensation expense, net of tax</td><td>1</td><td>4</td><td>4</td></tr><tr><td>Capitalized costs</td><td>1</td><td>3</td><td>3</td></tr></table>
Preferred Stock The Company has 10,000,000 shares of no par preferred stock authorized, of which 25,000 shares have been designated as Series A Junior Participating Preferred Stock (the Series A Preferred Stock) and 1.265 million shares as 6.00-percent Mandatory Convertible Preferred Stock, Series D (the Series D Preferred Stock). The Company redeemed the 100,000 outstanding shares of its 5.68 percent Series B Cumulative Preferred Stock (the Series B Preferred Stock) on December 30, 2009. Series A Preferred Stock In December 1995, the Company declared a dividend of one right (a Right) for each 2.31 shares (adjusted for subsequent stock dividends and a two-for-one stock split) of Apache common stock outstanding on January 31, 1996. Each full Right entitles the registered holder to purchase from the Company one ten-thousandth (1/10,000) of a share of Series A Preferred Stock at a price of $100 per one ten-thousandth of a share, subject to adjustment. The Rights are exercisable 10 calendar days following a public announcement that certain persons or groups have acquired 20 percent or more of the outstanding shares of Apache common stock or 10 business days following commencement of an offer for 30 percent or more of the outstanding shares of Apache’s outstanding common stock (flip in event); each Right will become exercisable for shares of Apache’s common stock at 50 percent of the then-market price of the common stock. If a 20-percent shareholder of Apache acquires Apache, by merger or otherwise, in a transaction where Apache does not survive or in which Apache’s common stock is changed or exchanged (flip over event), the Rights become exercisable for shares of the common stock of the Company acquiring Apache at 50 percent of the then-market price for Apache common stock. Any Rights that are or were beneficially owned by a person who has acquired 20 percent or more of the outstanding shares of Apache common stock and who engages in certain transactions or realizes the benefits of Shareholder Information Stock Data
<table><tr><td></td><td colspan="2"> Price Range</td><td colspan="2"> Dividends per Share</td></tr><tr><td></td><td> High</td><td> Low</td><td> Declared</td><td> Paid</td></tr><tr><td>2011</td><td></td><td></td><td></td><td></td></tr><tr><td>First Quarter</td><td>$132.50</td><td>$110.29</td><td>$0.15</td><td>$0.15</td></tr><tr><td>Second Quarter</td><td>134.13</td><td>114.94</td><td>0.15</td><td>0.15</td></tr><tr><td>Third Quarter</td><td>129.26</td><td>80.05</td><td>0.15</td><td>0.15</td></tr><tr><td>Fourth Quarter</td><td>105.64</td><td>73.04</td><td>0.15</td><td>0.15</td></tr><tr><td>2010</td><td></td><td></td><td></td><td></td></tr><tr><td>First Quarter</td><td>$108.92</td><td>$95.15</td><td>$0.15</td><td>$0.15</td></tr><tr><td>Second Quarter</td><td>111.00</td><td>83.55</td><td>0.15</td><td>0.15</td></tr><tr><td>Third Quarter</td><td>99.09</td><td>81.94</td><td>0.15</td><td>0.15</td></tr><tr><td>Fourth Quarter</td><td>120.80</td><td>96.51</td><td>0.15</td><td>0.15</td></tr></table>
The Company has paid cash dividends on its common stock for 47 consecutive years through December 31, 2011. Future dividend payments will depend upon the Company’s level of earnings, financial requirements and other relevant factors. Apache common stock is listed on the New York and Chicago stock exchanges and the NASDAQ National Market (symbol APA). At December 31, 2011, the Company’s shares of common stock outstanding were held by approximately 5,600 shareholders of record and 444,000 beneficial owners. Also listed on the New York Stock Exchange are: ? Apache Depositary Shares (symbol APA/PD), each representing a 1/20th interest in Apache’s 6% Mandatory Convertible Preferred Stock, Series D ? Apache Finance Canada’s 7.75% notes, due 2029 (symbol APA/29) Corporate Offices One Post Oak Central 2000 Post Oak Boulevard Suite 100 Houston, Texas 77056-4400 (713) 296-6000 Independent Public Accountants Ernst & Young LLP Five Houston Center 1401 McKinney Street, Suite 1200 Houston, Texas 77010-2007 Stock Transfer Agent and Registrar Wells Fargo Bank, N. A. Attn: Shareowner Services P. O. Box 64854 South St. Paul, Minnesota 55164-0854 (651) 450-4064 or (800) 468-9716 Communications concerning the transfer of shares, lost certificates, dividend checks, duplicate mailings, or change of address should be directed to the stock transfer agent. Shareholders can access account information on the web site: www. shareowneronline. com Dividend Reinvestment Plan Shareholders of record may invest their dividends automatically in additional shares of Apache common stock at the market price. Participants may also invest up to an additional $25,000 in Apache shares each quarter through this service. All bank service fees and brokerage commissions on purchases are paid by Apache. A prospectus describing the terms of the Plan and an authorization form may be obtained from the Company’s stock transfer agent, Wells Fargo Bank, N. A. Direct Registration Shareholders of record may hold their shares of Apache common stock in book-entry form. This eliminates costs related to safekeeping or replacing paper stock certificates. In addition, shareholders of record may request electronic movement of book-entry shares between your account with the Company’s stock transfer agent and your broker. Stock certificates may be converted to book-entry shares at any time. Questions regarding this service may be directed to the Company’s stock transfer agent, Wells Fargo Bank, N. A. Annual Meeting Apache will hold its annual meeting of shareholders on Thursday, May 24, 2012, at 10:00 a. m. in the Ballroom, Hilton Houston Post Oak, 2001 Post Oak Boulevard, Houston, Texas. Apache plans to web cast the annual meeting live; connect through the Apache web site: www. apachecorp. com Stock Held in “Street Name” The Company maintains a direct mailing list to ensure that shareholders with stock held in brokerage accounts receive information on a timely basis. Shareholders wanting to be added to this list should direct their requests to Apache’s Public and International Affairs Department, 2000 Post Oak Boulevard, Suite 100, Houston, Texas, 77056-4400, by calling (713) 296-6157 or by registering on Apache’s web site: www. apachecorp. com Form 10-K Request Shareholders and other persons interested in obtaining, without cost, a copy of the Company’s Form 10-K filed with the Securities and Exchange Commission may do so by writing to Cheri L. Peper, Corporate Secretary, 2000 Post Oak Boulevard, Suite 100, Houston, Texas, 77056-4400. Investor Relations Shareholders, brokers, securities analysts, or portfolio managers seeking information about the Company are welcome to contact Patrick Cassidy, Investor Relations Director, at (713) 296-6100. Members of the news media and others seeking information about the Company should contact Apache’s Public and International Affairs Department at (713) 296-7276. Web site: www. apachecorp. com APACHE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures. The reserve data in the following tables only represent estimates and should not be construed as being exact.
<table><tr><td></td><td colspan="7">Crude Oil and Condensate (Thousands of barrels)</td></tr><tr><td></td><td>United States</td><td>Canada</td><td>Egypt-1</td><td>Australia</td><td>North Sea</td><td>Argentina</td><td>Total-1</td></tr><tr><td> Proved developed reserves:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>December 31, 2010</td><td>422,737</td><td>90,292</td><td>109,657</td><td>48,072</td><td>115,705</td><td>16,583</td><td>803,046</td></tr><tr><td>December 31, 2011</td><td>428,251</td><td>81,846</td><td>105,840</td><td>35,725</td><td>136,990</td><td>16,001</td><td>804,653</td></tr><tr><td>December 31, 2012</td><td>474,837</td><td>79,695</td><td>106,746</td><td>29,053</td><td>119,635</td><td>15,845</td><td>825,811</td></tr><tr><td>December 31, 2013</td><td>457,981</td><td>80,526</td><td>119,242</td><td>22,524</td><td>100,327</td><td>14,195</td><td>794,795</td></tr><tr><td> Proved undeveloped reserves:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>December 31, 2010</td><td>214,117</td><td>56,855</td><td>17,470</td><td>18,064</td><td>38,663</td><td>4,062</td><td>349,231</td></tr><tr><td>December 31, 2011</td><td>205,763</td><td>59,746</td><td>22,195</td><td>32,220</td><td>32,415</td><td>4,585</td><td>356,924</td></tr><tr><td>December 31, 2012</td><td>203,068</td><td>70,650</td><td>17,288</td><td>34,808</td><td>28,019</td><td>2,981</td><td>356,814</td></tr><tr><td>December 31, 2013</td><td>195,835</td><td>56,366</td><td>16,302</td><td>36,703</td><td>29,253</td><td>2,231</td><td>336,690</td></tr><tr><td> Total proved reserves:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance December 31, 2010</td><td>636,855</td><td>147,146</td><td>127,127</td><td>66,136</td><td>154,368</td><td>20,645</td><td>1,152,277</td></tr><tr><td>Extensions, discoveries and other additions</td><td>45,676</td><td>16,712</td><td>45,021</td><td>15,762</td><td>332</td><td>3,230</td><td>126,733</td></tr><tr><td>Purchase of minerals in-place</td><td>5,097</td><td>705</td><td>—</td><td>—</td><td>34,612</td><td>—</td><td>40,414</td></tr><tr><td>Revisions of previous estimates</td><td>-8,904</td><td>-17,117</td><td>-6,185</td><td>—</td><td>—</td><td>215</td><td>-31,991</td></tr><tr><td>Production</td><td>-43,587</td><td>-5,202</td><td>-37,928</td><td>-13,953</td><td>-19,907</td><td>-3,503</td><td>-124,080</td></tr><tr><td>Sale of properties</td><td>-1,123</td><td>-653</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-1,776</td></tr><tr><td>Balance December 31, 2011</td><td>634,014</td><td>141,591</td><td>128,035</td><td>67,945</td><td>169,405</td><td>20,587</td><td>1,161,577</td></tr><tr><td>Extensions, discoveries and other additions</td><td>84,656</td><td>18,935</td><td>36,188</td><td>6,277</td><td>346</td><td>1,133</td><td>147,535</td></tr><tr><td>Purchase of minerals in-place</td><td>15,942</td><td>188</td><td>—</td><td>276</td><td>2,143</td><td>—</td><td>18,549</td></tr><tr><td>Revisions of previous estimates</td><td>-7,474</td><td>-4,577</td><td>-3,678</td><td>-66</td><td>-928</td><td>671</td><td>-16,052</td></tr><tr><td>Production</td><td>-49,089</td><td>-5,792</td><td>-36,511</td><td>-10,571</td><td>-23,312</td><td>-3,565</td><td>-128,840</td></tr><tr><td>Sale of properties</td><td>-144</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-144</td></tr><tr><td>Balance December 31, 2012</td><td>677,905</td><td>150,345</td><td>124,034</td><td>63,861</td><td>147,654</td><td>18,826</td><td>1,182,625</td></tr><tr><td>Extensions, discoveries and other additions</td><td>133,227</td><td>10,177</td><td>43,738</td><td>2,539</td><td>1,543</td><td>998</td><td>192,222</td></tr><tr><td>Purchase of minerals in-place</td><td>85</td><td>—</td><td>5</td><td>—</td><td>3,623</td><td>—</td><td>3,713</td></tr><tr><td>Revisions of previous estimates</td><td>1,683</td><td>-531</td><td>457</td><td>-118</td><td>18</td><td>24</td><td>1,533</td></tr><tr><td>Production</td><td>-53,621</td><td>-6,469</td><td>-32,690</td><td>-7,055</td><td>-23,258</td><td>-3,422</td><td>-126,515</td></tr><tr><td>Sale of properties</td><td>-105,463</td><td>-16,630</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-122,093</td></tr><tr><td>Balance December 31, 2013</td><td>653,816</td><td>136,892</td><td>135,544</td><td>59,227</td><td>129,580</td><td>16,426</td><td>1,131,485</td></tr></table>
(1) 2013 includes proved reserves of 45 MMbbls as of December 31, 2013 attributable to a noncontrolling interest in Egypt. until the hedged transaction is recognized in earnings. Changes in the fair value of the derivatives that are attributable to the ineffective portion of the hedges, or of derivatives that are not considered to be highly effective hedges, if any, are immediately recognized in earnings. The aggregate notional amount of our outstanding foreign currency hedges at December 31, 2012 and 2011 was $1.3 billion and $1.7 billion. The aggregate notional amount of our outstanding interest rate swaps at December 31, 2012 and 2011 was $503 million and $450 million. Derivative instruments did not have a material impact on net earnings and comprehensive income during 2012, 2011, and 2010. Substantially all of our derivatives are designated for hedge accounting. See Note 15 for more information on the fair value measurements related to our derivative instruments. Stock-based compensation – Compensation cost related to all share-based payments including stock options and restricted stock units is measured at the grant date based on the estimated fair value of the award. We generally recognize the compensation cost ratably over a three-year vesting period. Income taxes – We periodically assess our tax filing exposures related to periods that are open to examination. Based on the latest available information, we evaluate our tax positions to determine whether the position will more likely than not be sustained upon examination by the Internal Revenue Service (IRS). If we cannot reach a more-likely-than-not determination, no benefit is recorded. If we determine that the tax position is more likely than not to be sustained, we record the largest amount of benefit that is more likely than not to be realized when the tax position is settled. We record interest and penalties related to income taxes as a component of income tax expense on our Statements of Earnings. Interest and penalties are not material. Accumulated other comprehensive loss – Changes in the balance of accumulated other comprehensive loss, net of income taxes, consisted of the following (in millions): |
2,008 | As As the chart 3 shows,which year is the value of Total revenues for Regulated Natural Gas the highest? | 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 |
-0.96554 | what is the annualized return for the investment in the allegion plc during 2013-2017? | Performance Graph The annual changes for the period shown December 1, 2013 (when our ordinary shares began trading) to December 31, 2017 in the graph on this page are based on the assumption that $100 had been invested in Allegion plc ordinary shares, the Standard & Poor’s 500 Stock Index ("S&P 500") and the Standard & Poor's 400 Capital Goods Index ("S&P 400 Capital Goods") on December 1, 2013, and that all quarterly dividends were reinvested. The total cumulative dollar returns shown on the graph represent the value that such investments would have had on December 31, 2017.
<table><tr><td></td><td>December 1, 2013</td><td>December 31, 2013</td><td>December 31, 2014</td><td>December 31, 2015</td><td>December 31, 2016</td><td>December 31, 2017</td></tr><tr><td>Allegion plc</td><td>100.00</td><td>102.20</td><td>129.03</td><td>154.37</td><td>150.97</td><td>189.19</td></tr><tr><td>S&P 500</td><td>100.00</td><td>102.53</td><td>116.57</td><td>118.18</td><td>132.31</td><td>161.20</td></tr><tr><td>S&P 400 Capital Goods</td><td>100.00</td><td>104.58</td><td>104.84</td><td>99.07</td><td>130.70</td><td>162.97</td></tr></table>
associated with foreign exchange remeasurement on assets that were transferred under the new structure in Gibraltar Life and will be recognized in earnings over time as these assets mature or are sold. See “—Results of Operations by Segment—International Insurance Division” above. These gains were partially offset by OTTI of $97 million. Net gains on sales and maturities of fixed maturity securities of $736 million in 2014 were primarily due to sales and maturities of U. S. dollar-denominated securities within our International Insurance segment. These gains were partially offset by OTTI of $36 million. See below for information regarding the OTTI of fixed maturity securities in 2015 and 2014. Net realized gains on equity securities were $4 million and $81 million for the years ended 2015 and 2014, respectively, primarily driven by gains on sales within our International Insurance segment. These gains were partially offset by OTTI of $111 million and $26 million for the years ended 2015 and 2014, respectively. See below for additional information regarding the OTTI of equity securities in 2015 and 2014. Net realized gains on commercial mortgage and other loans for the year ended 2015 were $36 million, primarily driven by servicing revenue of $31 million in our Asset Management business and a net decrease in the allowance for losses of $5 million. Net realized gains on commercial mortgage and other loans were $79 million for the year ended 2014 were primarily driven by a net decrease in the allowance for losses of $65 million, including the impact of assumption updates. For additional information regarding our commercial mortgage and other allowance for losses, see “—General Account Investments—Commercial Mortgage and Other Loans—Commercial Mortgage and Other Loan Quality” below. Net realized gains on derivatives were $1,775 million in 2015, compared to net realized losses of $445 million in 2014. The net gains in 2015 primarily reflect $995 million of gains on product related embedded derivatives and related hedge positions mainly associated with certain variable annuity contracts, $326 million of gains on interest rate derivatives used to manage duration as interest rates decreased, $345 million of gains on foreign currency derivatives used to hedge foreign denominated investments as the U. S. dollar strengthened against various currencies, and $159 million of gains primarily representing fees earned on fee-based synthetic guaranteed investment contracts (“GICs”) which are accounted for as derivatives. The net derivative losses in 2014 primarily reflect net losses of $2,627 million on product related embedded derivatives and related hedge positions mainly associated with certain variable annuity contracts. Also, contributing were net losses of $500 million on foreign currency derivatives used to hedge portfolio assets in our Japan business, primarily due to the weakening of the Japanese yen against the U. S. dollar and other currencies. These losses were partially offset by gains of $1,502 million on interest rate derivatives used to manage duration as long-term interest rates decreased, $869 million gains on other foreign currency derivatives primarily associated with hedges of portfolio assets in our U. S. business and hedges of future income of non-U. S. businesses (predominantly in Japan) as the U. S. dollar strengthened against various currencies, and $166 million gains of fees earned on fee-based synthetic GICs. Net realized losses within other investments were $54 million in 2015 primarily driven by OTTI of $121 million on investments in limited partnerships, partially offset by gains of $40 million, on sales of real estate. Net realized gains on other investments were $7 million in 2014 and included net gains of $28 million, primarily from our Asset Management and International Insurance segments, partially offset by OTTI of $21 million on real estate and joint ventures and partnership investments. Related adjustments include the portions of “Realized investment gains (losses), net” that are included in adjusted operating income and the portions of “Other income” and “Net investment income” that are excluded from adjusted operating income. These adjustments are made to arrive at “Realized investment gains (losses), net, and related adjustments” which are excluded from adjusted operating income. Results for 2015 include net negative related adjustments of $934 million driven by settlements on interest rate and currency derivatives. Results for 2014 included net negative related adjustments of $4,063 million driven by the impact of foreign currency exchange rate movements on certain non-yen denominated assets and liabilities within our Japan insurance operations and by settlements on interest rate and currency derivatives. We implemented a structure in Gibraltar Life, effective for financial reporting beginning in the first quarter of 2015, which has minimized volatility in reported U. S. GAAP earnings arising from foreign currency remeasurement. For additional information, see “—Results of Operations by Segment—International Insurance Division” above. Charges that relate to “Realized investment gains (losses), net” are also excluded from adjusted operating income, and may be reflected as net charges or net benefits. Results for 2015 include net related charges of $679 million, compared to net related charges of $542 million in 2014. Both periods’ results were driven by the impact of derivative activity on the amortization of DAC and other costs and certain policyholder reserves. For additional information, see Note 22 to the Consolidated Financial Statements. During 2015, we recorded OTTI of $329 million in earnings, compared to $83 million in 2014. The following tables set forth, for the periods indicated, the composition of OTTI recorded in earnings attributable to the PFI excluding the Closed Block division by asset type, and for fixed maturity securities, by reason.
<table><tr><td></td><td colspan="2">Year Ended December 31,</td></tr><tr><td></td><td>2015</td><td>2014</td></tr><tr><td></td><td colspan="2">(in millions)</td></tr><tr><td>OTTI recorded in earnings—PFI excluding Closed Block Division-1</td><td></td><td></td></tr><tr><td>Public fixed maturity securities</td><td>$31</td><td>$22</td></tr><tr><td>Private fixed maturity securities</td><td>66</td><td>14</td></tr><tr><td>Total fixed maturity securities</td><td>97</td><td>36</td></tr><tr><td>Equity securities</td><td>111</td><td>26</td></tr><tr><td>Other invested assets-2</td><td>121</td><td>21</td></tr><tr><td>Total</td><td>$329</td><td>$83</td></tr></table>
(1) Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment. (2) Includes OTTI relating to investments in joint ventures and partnerships and real estate investments. Fixed Maturity Securities and Unrealized Gains and Losses by Industry Category The following table sets forth the composition of the portion of our fixed maturity securities portfolio by industry category attributable to PFI excluding the Closed Block division as of the dates indicated and the associated gross unrealized gains (losses).
<table><tr><td></td><td colspan="4">December 31, 2015</td><td colspan="4">December 31, 2014</td></tr><tr><td>Industry-1</td><td>AmortizedCost</td><td>GrossUnrealizedGains-2</td><td>GrossUnrealizedLosses-2</td><td>FairValue</td><td>AmortizedCost</td><td>GrossUnrealizedGains-2</td><td>GrossUnrealizedLosses-2</td><td>FairValue</td></tr><tr><td></td><td colspan="8">(in millions)</td></tr><tr><td>Corporate securities:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Finance</td><td>$21,505</td><td>$1,385</td><td>$224</td><td>$22,666</td><td>$20,569</td><td>$1,984</td><td>$55</td><td>$22,498</td></tr><tr><td>Consumer non-cyclical</td><td>20,732</td><td>2,073</td><td>408</td><td>22,397</td><td>20,956</td><td>2,822</td><td>141</td><td>23,637</td></tr><tr><td>Utility</td><td>17,369</td><td>1,423</td><td>393</td><td>18,399</td><td>16,144</td><td>2,149</td><td>82</td><td>18,211</td></tr><tr><td>Capital goods</td><td>10,503</td><td>978</td><td>241</td><td>11,240</td><td>10,170</td><td>1,348</td><td>67</td><td>11,451</td></tr><tr><td>Consumer cyclical</td><td>9,223</td><td>846</td><td>146</td><td>9,923</td><td>9,447</td><td>1,129</td><td>37</td><td>10,539</td></tr><tr><td>Foreign agencies</td><td>5,222</td><td>1,086</td><td>67</td><td>6,241</td><td>5,186</td><td>1,227</td><td>38</td><td>6,375</td></tr><tr><td>Energy</td><td>10,793</td><td>674</td><td>855</td><td>10,612</td><td>11,395</td><td>1,135</td><td>275</td><td>12,255</td></tr><tr><td>Communications</td><td>6,294</td><td>690</td><td>200</td><td>6,784</td><td>6,465</td><td>1,021</td><td>41</td><td>7,445</td></tr><tr><td>Basic industry</td><td>5,658</td><td>404</td><td>321</td><td>5,741</td><td>6,003</td><td>640</td><td>71</td><td>6,572</td></tr><tr><td>Transportation</td><td>6,536</td><td>605</td><td>105</td><td>7,036</td><td>5,718</td><td>769</td><td>18</td><td>6,469</td></tr><tr><td>Technology</td><td>3,459</td><td>278</td><td>72</td><td>3,665</td><td>3,474</td><td>389</td><td>30</td><td>3,833</td></tr><tr><td>Industrial other</td><td>3,547</td><td>245</td><td>73</td><td>3,719</td><td>2,746</td><td>333</td><td>21</td><td>3,058</td></tr><tr><td>Total corporate securities</td><td>120,841</td><td>10,687</td><td>3,105</td><td>128,423</td><td>118,273</td><td>14,946</td><td>876</td><td>132,343</td></tr><tr><td>Foreign government-3</td><td>72,265</td><td>12,167</td><td>131</td><td>84,301</td><td>70,327</td><td>11,286</td><td>111</td><td>81,502</td></tr><tr><td>Residential mortgage-backed</td><td>4,861</td><td>353</td><td>6</td><td>5,208</td><td>5,747</td><td>466</td><td>4</td><td>6,209</td></tr><tr><td>Asset-backed securities-4</td><td>6,873</td><td>195</td><td>69</td><td>6,999</td><td>7,094</td><td>292</td><td>78</td><td>7,308</td></tr><tr><td>Commercial mortgage-backed</td><td>7,300</td><td>160</td><td>37</td><td>7,423</td><td>9,688</td><td>344</td><td>24</td><td>10,008</td></tr><tr><td>U.S. Government</td><td>11,479</td><td>2,900</td><td>11</td><td>14,368</td><td>11,493</td><td>3,468</td><td>5</td><td>14,956</td></tr><tr><td>State & Municipal-5</td><td>7,661</td><td>675</td><td>39</td><td>8,297</td><td>5,163</td><td>693</td><td>3</td><td>5,853</td></tr><tr><td>Total-6</td><td>$231,280</td><td>$27,137</td><td>$3,398</td><td>$255,019</td><td>$227,785</td><td>$31,495</td><td>$1,101</td><td>$258,179</td></tr></table>
(1) Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings. (2) Includes $316 million of gross unrealized gains and $0 million of gross unrealized losses as of December 31, 2015, compared to $328 million of gross unrealized gains and $1 million of gross unrealized losses as of December 31, 2014, on securities classified as held-to-maturity. (3) As of both December 31, 2015 and 2014, based on amortized cost, 76% represent Japanese government bonds held by our Japanese insurance operations, with no other individual country representing more than 10% of the balance. (4) Includes securities collateralized by sub-prime mortgages. See “—Asset-Backed Securities” below. (5) Includes securities related to the Build America Bonds program. (6) Excluded from the table above are securities held outside the general account in other entities and operations. For additional information regarding investments held outside the general account, see “—Invested Assets of Other Entities and Operations” below. Also excluded from the table above are fixed maturity securities classified as trading. See “—Trading Account Assets Supporting Insurance Liabilities” and “—Other Trading Account Assets” for additional information. The decrease in net unrealized gains from December 31, 2014 to December 31, 2015, was primarily due to a net decrease in fair value driven by an increase in interest rates in the U. S. and credit spread widening. As of December 31, 2015, PFI excluding the Closed Block division had direct and indirect energy and related exposure with a market value of approximately $13.4 billion, and a net unrealized loss of approximately $0.2 billion, which is reflected in AOCI. The exposure was primarily through public and private corporate securities, 87% of which are investment grade, and also included trading assets, equity securities and private equity investments. OTTI related to investments in the energy sector were $79 million for the year ended December 31, 2015, and we could be exposed to future valuation declines or impairments if energy prices remain at current or lower levels for an extended period of time. |
-0.01054 | what is the growth rate of net sales from 2014 to 2015? | As of December 31, 2017, we had $1.238 billion of gross unrecognized tax benefits, of which a net $1.150 billion, if recognized, would affect our effective tax rate. As of December 31, 2016, we had $1.095 billion of gross unrecognized tax benefits, of which a net $1.006 billion, if recognized, would affect our effective tax rate. As of December 31, 2015, we had $1.056 billion of gross unrecognized tax benefits, of which a net $900 million, if recognized, would affect our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
<table><tr><td></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>(in millions)</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Beginning Balance</td><td>$1,095</td><td>$1,056</td><td>$1,047</td></tr><tr><td>Additions based on positions related to the current year</td><td>134</td><td>47</td><td>32</td></tr><tr><td>Additions based on positions related to prior years</td><td>16</td><td>14</td><td>38</td></tr><tr><td>Reductions for tax positions of prior years</td><td>-3</td><td>-17</td><td>-36</td></tr><tr><td>Settlements with taxing authorities</td><td>-2</td><td>-3</td><td>-18</td></tr><tr><td>Statute of limitation expirations</td><td>-2</td><td>-2</td><td>-7</td></tr><tr><td>Ending Balance</td><td>$1,238</td><td>$1,095</td><td>$1,056</td></tr></table>
We are subject to U. S. Federal income tax as well as income tax of multiple state and foreign jurisdictions. We have concluded all U. S. federal income tax matters through 2000, all foreign income tax matters through 2002 and substantially all material state and local income tax matters through 2005. We have received Notices of Deficiency from the Internal Revenue Service (IRS) reflecting proposed audit adjustments for Guidant Corporation for its 2001 through 2006 tax years and Boston Scientific Corporation for its 2006 and 2007 tax years. The total incremental tax liability asserted by the IRS for the applicable periods is $1.162 billion plus interest. The primary issue in dispute for all years is the transfer pricing associated with the technology license agreements between domestic and foreign subsidiaries of Guidant. In addition, the IRS has proposed adjustments in connection with the financial terms of our Transaction Agreement with Abbott Laboratories pertaining to the sale of Guidant's vascular intervention business to Abbott Laboratories in April 2006. During 2014, we received a Revenue Agent Report from the IRS reflecting significant proposed audit adjustments to our 2008, 2009 and 2010 tax years based upon the same transfer pricing methodologies that the IRS applied to our 2001 through 2007 tax years. We do not agree with the transfer pricing methodologies applied by the IRS or its resulting assessment. We have filed petitions with the U. S. Tax Court contesting the Notices of Deficiency for the 2001 through 2007 tax years in challenge and submitted a letter to the IRS Office of Appeals protesting the Revenue Agent Report for the 2008 through 2010 tax years and requesting an administrative appeal hearing. The issues in dispute were scheduled to be heard in U. S. Tax Court in July 2016. On July 19, 2016, we entered into a Stipulation of Settled Issues with the IRS intended to resolve all of the aforementioned transfer pricing issues, as well as the issues related to our transaction with Abbott Laboratories, for the 2001 through 2007 tax years. The Stipulation of Settled Issues is contingent upon the IRS Office of Appeals applying the same basis of settlement to all transfer pricing issues for the Company’s 2008, 2009 and 2010 tax years as well as review by the United States Congress Joint Committee on Taxation. In October 2016, we reached an agreement in principle with IRS Office of Appeals as to the resolution of transfer pricing issues in 2008, 2009 and 2010 tax years, subject to additional calculations of tax as well as documentation to memorialize our agreement. In the event that the conditions in the Stipulation of Settled Items are satisfied, we expect to make net tax payments of approximately $275 million, plus interest through the date of payment with respect to the settled issues. If finalized, payments related to the resolution are expected in the next six months. We believe that our income tax reserves associated with these matters are adequate as of December 31, 2017 and we do not expect to recognize any additional charges related to resolution of this controversy. However, the final resolution of these issues is contingent and if the Stipulation of Settled Issues is not finalized, it could have a material impact on our financial condition, results of operations, or cash flows. We recognize interest and penalties related to income taxes as a component of income tax expense. We had $655 million accrued for gross interest and penalties as of December 31, 2017 and $572 million as of December 31, 2016. The increase in gross interest and penalties of $83 million was recognized in our consolidated statements of operations. We recognized net tax expense related to interest and penalties of $154 million in 2017, $46 million in 2016 and $37 million in 2015. The increase in our net tax expense related to interest and penalties as of December 31, 2017, as compared to December 31, 2016, is primarily attributable to remeasuring the future tax benefit of our accrued interest as a result of the TCJA. segment includes AWE and our share of earnings for our investment in ULA, which provides expendable launch services to the U. S. Government. Space Systems’ operating results included the following (in millions):
<table><tr><td></td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Net sales</td><td>$9,409</td><td>$9,105</td><td>$9,202</td></tr><tr><td>Operating profit</td><td>1,289</td><td>1,171</td><td>1,187</td></tr><tr><td>Operating margin</td><td>13.7%</td><td>12.9%</td><td>12.9%</td></tr><tr><td>Backlog atyear-end</td><td>$18,900</td><td>$17,400</td><td>$20,300</td></tr></table>
2016 compared to 2015 Space Systems’ net sales in 2016 increased $304 million, or 3%, compared to 2015. The increase was attributable to net sales of approximately $410 million from AWE following the consolidation of this business in the third quarter of 2016; and approximately $150 million for commercial space transportation programs due to increased launch-related activities; and approximately $70 million of higher net sales for various programs (primarily Fleet Ballistic Missiles) due to increased volume. These increases were partially offset by a decrease in net sales of approximately $340 million for government satellite programs due to decreased volume (primarily SBIRS and MUOS) and the wind-down or completion of mission solutions programs. Space Systems’ operating profit in 2016 increased $118 million, or 10%, compared to 2015. The increase was primarily attributable to a non-cash, pre-tax gain of approximately $127 million related to the consolidation of AWE; and approximately $80 million of increased equity earnings from joint ventures (primarily ULA). These increases were partially offset by a decrease of approximately $105 million for government satellite programs due to lower risk retirements (primarily SBIRS, MUOS and mission solutions programs) and decreased volume. Adjustments not related to volume, including net profit booking rate adjustments, were approximately $185 million lower in 2016 compared to 2015.2015 compared to 2014 Space Systems’ net sales in 2015 decreased $97 million, or 1%, compared to 2014. The decrease was attributable to approximately $335 million lower net sales for government satellite programs due to decreased volume (primarily AEHF) and the wind-down or completion of mission solutions programs; and approximately $55 million for strategic missile and defense systems due to lower volume. These decreases were partially offset by higher net sales of approximately $235 million for businesses acquired in 2014; and approximately $75 million for the Orion program due to increased volume. Space Systems’ operating profit in 2015 decreased $16 million, or 1%, compared to 2014. Operating profit increased approximately $85 million for government satellite programs due primarily to increased risk retirements. This increase was offset by lower operating profit of approximately $65 million for commercial satellite programs due to performance matters on certain programs; and approximately $35 million due to decreased equity earnings in joint ventures. Adjustments not related to volume, including net profit booking rate adjustments and other matters, were approximately $105 million higher in 2015 compared to 2014. Equity earnings Total equity earnings recognized by Space Systems (primarily ULA) represented approximately $325 million, $245 million and $280 million, or 25%, 21% and 24% of this business segment’s operating profit during 2016, 2015 and 2014. Backlog Backlog increased in 2016 compared to 2015 primarily due to the addition of AWE’s backlog. Backlog decreased in 2015 compared to 2014 primarily due to lower orders for government satellite programs and the Orion program and higher sales on the Orion program. Trends We expect Space Systems’ 2017 net sales to decrease in the mid-single digit percentage range as compared to 2016, driven by program lifecycles on government satellite programs, partially offset by the recognition of AWE net sales for a full year in 2017 versus a partial year in 2016 following the consolidation of AWE in the third quarter of 2016. Operating profit (2) The following table shows the amounts of other venture capital investments held by the following consolidated funds and amounts attributable to SVBFG for each fund at December 31, 2014 , 2013 and 2012 :
<table><tr><td></td><td colspan="6">December 31,</td></tr><tr><td></td><td colspan="2">2014</td><td colspan="2">2013</td><td colspan="2">2012</td></tr><tr><td>(Dollars in thousands)</td><td>Carrying value(as reported)</td><td>Amount attributableto SVBFG</td><td>Carrying value(as reported)</td><td>Amount attributableto SVBFG</td><td>Carrying value(as reported)</td><td>Amount attributableto SVBFG</td></tr><tr><td>Silicon Valley BancVentures, LP</td><td>$3,291</td><td>$352</td><td>$6,564</td><td>$702</td><td>$43,493</td><td>$4,652</td></tr><tr><td>SVB Capital Partners II, LP</td><td>20,481</td><td>1,040</td><td>22,684</td><td>1,152</td><td>79,761</td><td>4,051</td></tr><tr><td>Capital Partners III, LP</td><td>41,055</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>SVB Capital Shanghai Yangpu Venture Capital Fund</td><td>6,377</td><td>431</td><td>3,591</td><td>243</td><td>3,837</td><td>259</td></tr><tr><td>Total other venture capital investments</td><td>$71,204</td><td>$1,823</td><td>$32,839</td><td>$2,097</td><td>$127,091</td><td>$8,962</td></tr></table>
(3) Investments classified as other securities (fair value accounting) represent direct equity investments in public companies held by our consolidated funds. At December 31, 2014 , the amount primarily includes total unrealized gains of $75 million in one public company, FireEye. The extent to which any unrealized gains (or losses) will become realized is subject to a variety of factors, including, among other things, changes in prevailing market prices and the timing of any sales or distribution of securities and may also be constrained by lock-up agreements. None of the FireEye related investments currently are subject to a lock-up agreement. Loans The following table details the composition of the loan portfolio, net of unearned income, as of the five most recent year-ends:
<table><tr><td></td><td colspan="5">December 31,</td></tr><tr><td>(Dollars in thousands)</td><td>2014</td><td>2013</td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Commercial loans:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Software and internet -1</td><td>$4,954,676</td><td>$4,102,636</td><td>$3,261,489</td><td>$2,492,849</td><td>$1,820,680</td></tr><tr><td>Hardware -1</td><td>1,131,006</td><td>1,213,032</td><td>1,118,370</td><td>952,303</td><td>641,052</td></tr><tr><td>Private equity/venture capital</td><td>4,582,906</td><td>2,386,054</td><td>1,732,699</td><td>1,117,419</td><td>1,036,201</td></tr><tr><td>Life science & healthcare -1</td><td>1,289,904</td><td>1,170,220</td><td>1,066,199</td><td>863,737</td><td>575,944</td></tr><tr><td>Premium wine</td><td>187,568</td><td>149,841</td><td>143,511</td><td>130,245</td><td>144,972</td></tr><tr><td>Other -1</td><td>234,551</td><td>288,904</td><td>315,453</td><td>342,147</td><td>375,928</td></tr><tr><td>Total commercial loans</td><td>12,380,611</td><td>9,310,687</td><td>7,637,721</td><td>5,898,700</td><td>4,594,777</td></tr><tr><td>Real estate secured loans:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Premium wine -2</td><td>606,753</td><td>514,993</td><td>413,513</td><td>345,988</td><td>312,255</td></tr><tr><td>Consumer loans -3</td><td>1,118,115</td><td>873,255</td><td>685,300</td><td>534,001</td><td>361,704</td></tr><tr><td>Other</td><td>39,651</td><td>30,743</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total real estate secured loans</td><td>1,764,519</td><td>1,418,991</td><td>1,098,813</td><td>879,989</td><td>673,959</td></tr><tr><td>Construction loans -4</td><td>78,626</td><td>76,997</td><td>65,742</td><td>30,256</td><td>60,178</td></tr><tr><td>Consumer loans</td><td>160,520</td><td>99,711</td><td>144,657</td><td>161,137</td><td>192,823</td></tr><tr><td>Total loans, net of unearned income -5(6)</td><td>$14,384,276</td><td>$10,906,386</td><td>$8,946,933</td><td>$6,970,082</td><td>$5,521,737</td></tr></table>
(1) Because of the diverse nature of energy and resource innovation products and services, for our loan-related reporting purposes, ERI-related loans are reported under our hardware, software and internet, life science & healthcare and other commercial loan categories, as applicable. (2) Included in our premium wine portfolio are gross construction loans of $112 million , $112 million , $148 million , $111 million and $119 million at December 31, 2014 , 2013 , 2012 , 2011 and 2010 , respectively. (3) Consumer loans secured by real estate at December 31, 2014 , 2013 , 2012 , 2011 and 2010 were comprised of the following: |
0.1129 | what is the percentage increase in rsus from 2009 to 2010? | material impact on the service cost and interest cost components of net periodic benefit costs for a 1% change in the assumed health care trend rate. For most of the participants in the U. S. plan, Aon’s liability for future plan cost increases for pre-65 and Medical Supplement plan coverage is limited to 5% per annum. Because of this cap, net employer trend rates for these plans are effectively limited to 5% per year in the future. During 2007, Aon recognized a plan amendment which phases out post-65 retiree coverage in its U. S. plan over the next three years. The impact of this amendment on net periodic benefit cost is being recognized over the average remaining service life of the employees.14. Stock Compensation Plans The following table summarizes stock-based compensation expense recognized in continuing operations in the Consolidated Statements of Income in Compensation and benefits (in millions):
<table><tr><td>Years ended December 31</td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>RSUs</td><td>$138</td><td>$124</td><td>$132</td></tr><tr><td>Performance plans</td><td>62</td><td>60</td><td>67</td></tr><tr><td>Stock options</td><td>17</td><td>21</td><td>24</td></tr><tr><td>Employee stock purchase plans</td><td>4</td><td>4</td><td>3</td></tr><tr><td>Total stock-based compensation expense</td><td>221</td><td>209</td><td>226</td></tr><tr><td>Tax benefit</td><td>75</td><td>68</td><td>82</td></tr><tr><td>Stock-based compensation expense, net of tax</td><td>$146</td><td>$141</td><td>$144</td></tr></table>
During 2009, the Company converted its stock administration system to a new service provider. In connection with this conversion, a reconciliation of the methodologies and estimates utilized was performed, which resulted in a $12 million reduction of expense for the year ended December 31, 2009. Stock Awards Stock awards, in the form of RSUs, are granted to certain employees and consist of both performance-based and service-based RSUs. Service-based awards generally vest between three and ten years from the date of grant. The fair value of service-based awards is based upon the market value of the underlying common stock at the date of grant. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all unvested awards. Compensation expense associated with stock awards is recognized over the service period. Dividend equivalents are paid on certain service-based RSUs, based on the initial grant amount. Performance-based RSUs have been granted to certain employees. Vesting of these awards is contingent upon meeting various individual, divisional or company-wide performance conditions, including revenue generation or growth in revenue, pretax income or earnings per share over a one- to five-year period. The performance conditions are not considered in the determination of the grant date fair value for these awards. The fair value of performance-based awards is based upon the market price of the underlying common stock at the date of grant. Compensation expense is recognized over the performance period, and in certain cases an additional vesting period, based on management’s estimate of the number of units expected to vest. Compensation expense is adjusted to reflect the actual number of shares paid out at the end of the programs. The actual payout of shares under these performancebased plans may range from 0-200% of the number of units granted, based on the plan. Dividend equivalents are generally not paid on the performance-based RSUs. During 2010, the Company granted approximately 1.6 million shares in connection with the completion of the 2007 Leadership Performance Plan (‘‘LPP’’) cycle and 84,000 shares related to other performance plans. During 2010, 2009 and 2008, the Company granted approximately 3.5 million, The 0.3% revenue decline in fiscal 2011 was due primarily to a comparable store sales decline of 3.0%, partially offset by the impact of net new stores opened during fiscal 2011. The components of the net revenue decrease in the Domestic segment in fiscal 2011 were as follows:
<table><tr><td>Comparable store sales impact</td><td>-2.9%</td></tr><tr><td>Non-comparable sales channels<sup>-1</sup></td><td>-0.1%</td></tr><tr><td>Net new stores</td><td>2.7%</td></tr><tr><td>Total revenue decrease</td><td>-0.3%</td></tr></table>
(1) Non-comparable sales channels reflects the impact from revenue we earn from sales channels not included within our comparable store sales calculation. The following table presents the Domestic segment’s revenue mix percentages and comparable store sales percentage changes by revenue category in fiscal 2011 and 2010:
<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 26, 2011</td><td>February 27, 2010</td><td>February 26, 2011</td><td>February 27, 2010</td></tr><tr><td>Consumer electronics</td><td>37%</td><td>39%</td><td>-6.3%</td><td>1.1%</td></tr><tr><td>Home office</td><td>37%</td><td>34%</td><td>3.6%</td><td>12.8%</td></tr><tr><td>Entertainment</td><td>14%</td><td>16%</td><td>-13.3%</td><td>-13.2%</td></tr><tr><td>Appliances</td><td>5%</td><td>4%</td><td>7.0%</td><td>-4.2%</td></tr><tr><td>Services</td><td>6%</td><td>6%</td><td>0.5%</td><td>-1.1%</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>-3.0%</td><td>1.7%</td></tr></table>
The products having the largest impact on our comparable store sales decline in fiscal 2011 were entertainment hardware and software (which includes video gaming hardware and software, CDs and DVDs) and televisions. Comparable store sales gains in mobile phones, mobile computing (consisting of notebook computers, netbooks and tablets) partially offset these declines. Revenue from our Domestic segment’s online operations increased 13% in fiscal 2011 and is incorporated in the table above. The 6.3% comparable store sales decline in the consumer electronics revenue category was driven primarily by a decrease in the sales of televisions and cameras and camcorders, partially offset by strong sales from our expanded assortment of e-Readers. The 3.6% comparable store sales gain in the home office revenue category was primarily the result of increased sales of mobile phones due to the continued growth of Best Buy Mobile, as well as gains in the sales of mobile computing. The 13.3% comparable store sales decline in the entertainment revenue category was mainly the result of declining sales in video gaming hardware and software, partially caused by industry-wide softness combined with a decline in our market share, as well as the continued decline in the sales of DVDs and CDs as consumers shift to digital content. The 7.0% comparable store sales gain in the appliances revenue category was due to an increase in unit sales with relatively flat average selling prices, with particular strength in kitchen and small appliances. The 0.5% comparable store sales gain in the services revenue category was due primarily to a gain in the sales of computer services, partially offset by a decline in the sales of repair and home theater installation services, due in part to the decrease in television sales noted above. Despite a modest decline in revenue, our Domestic segment experienced gross profit growth in fiscal 2011 of $324 million, or 3.6%, compared to fiscal 2010, due to rate improvements. The 0.9% of revenue increase in the gross profit rate was due to favorable rate and mix impacts of 0.7% of revenue and 0.2% of revenue, respectively, and resulted primarily from the following factors collectively: ? increased sales of higher-margin mobile phones as a result of the growth in Best Buy Mobile; The following table presents the International 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 -1</td><td colspan="2">Comparable Store Sales Summary Year Ended -2</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>20%</td><td>26%</td><td>-12.0%</td><td>-0.9%</td></tr><tr><td>Home office</td><td>53%</td><td>45%</td><td>-0.8%</td><td>-2.7%</td></tr><tr><td>Entertainment</td><td>7%</td><td>9%</td><td>-12.4%</td><td>3.3%</td></tr><tr><td>Appliances</td><td>8%</td><td>10%</td><td>7.3%</td><td>-2.2%</td></tr><tr><td>Services</td><td>12%</td><td>10%</td><td>6.2%</td><td>3.1%</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>-3.7%</td><td>-0.9%</td></tr></table>
(1) The International segment’s revenue mix changed beginning in the third quarter of fiscal 2009 due to our acquisition of Best Buy Europe, whose business primarily relates to the sale of mobile phones and voice and data service plans, which are included in our home office revenue category. In addition, Best Buy Europe offers mobile phone insurance and other mobile and fixed-line telecommunication services, which are included in our services revenue category. As a result, the International segment’s home office and services revenue categories grew in fiscal 2010, resulting in a lower mix percentage for the segment’s consumer electronics, entertainment and appliances revenue categories. (2) The comparable store sales figures for the fiscal year ended February 27, 2010, included six months of Best Buy Europe’s comparable store sales. However, comparable store sales for the fiscal year ended February 28, 2009, did not include Best Buy Europe as the third quarter of fiscal 2010 was the first period in which Best Buy Europe was included in our comparable store sales calculation. The products having the largest impact on our International segment’s comparable store sales decline in fiscal 2010 were flat-panel televisions, video gaming and digital cameras and camcorders. Weaker sales of these products were partially offset by comparable store sales gains in appliances, notebook computers and services. Our International segment’s comparable store sales improved sequentially each quarter of fiscal 2010 amidst improving global economic conditions and temporary government stimulus programs in China. The 12.0% comparable store sales decline in the consumer electronics revenue category resulted primarily from declines in the sales of flat-panel televisions, digital cameras and camcorders, and navigation products. The 0.8% comparable store sales decline in the home office revenue category resulted primarily from comparable store sales declines in computer monitors and accessories, partially offset by gains in the sales of notebook computers and mobile phones. The 12.4% comparable store sales decline in the entertainment revenue category reflected a decrease in the sales of video gaming hardware and software and continued decreases in sales of DVDs and CDs. The 7.3% comparable store sales gain in the appliances revenue category resulted from increases in the sales of major appliances and small electrics, notably within our Canada and China operations where promotions and temporary government stimulus programs in China helped to fuel stronger sales. The 6.2% comparable store sales gain in the services revenue category was due primarily to an increase in revenue from our product repair business. Our International segment experienced gross profit growth of $755 million in fiscal 2010, or 31.7%, driven predominantly by the acquisition of Best Buy Europe. The acquisition impact of Best Buy Europe of 1.4% of revenue was the principal driver behind the International segment’s 1.4% of revenue gross profit rate increase for fiscal 2010, with an additional 0.2% of revenue increase from gross profit rate improvements in Europe due primarily to negotiation of more favorable vendor terms across the European business in the second half of fiscal 2010. An increase in Canada’s gross profit rate also contributed a 0.1% of revenue increase. Offsetting these increases to the International segment’s gross profit rate was a 0.3% of revenue decrease from China due primarily to heavier promotions and clearances. Our liquidity is also affected by restricted cash balances that are pledged as collateral or restricted to use for vendor payables, general liability insurance, workers’ compensation insurance and customer warranty and insurance programs. Restricted cash and cash equivalents, which are included in other current assets, were $488 million and $482 million at February 26, 2011, and February 27, 2010, respectively. Capital Expenditures A component of our long-term strategy is our capital expenditure program. This program includes, among other things, investments in new stores, store remodeling, store relocations and expansions, new distribution facilities and information technology enhancements. During fiscal 2011, we invested $744 million in property and equipment, including opening 147 new stores, expanding and remodeling certain stores, and upgrading our information technology systems and capabilities. The 21.0% increase in our capital expenditures compared to the prior fiscal year was due primarily to increased spending on information technology and additional store-related projects. The following table presents our capital expenditures for each of the past three fiscal years ($ in millions): |
181,745 | What is the sum of the Portland, OR in the sections where San Francisco is positive? (in thousand) | Part I Item 1 Entergy Corporation, Domestic utility companies, and System Energy 113 Entergy Louisiana holds non-exclusive franchises to provide electric service in approximately 116 incorporated Louisiana municipalities. Most of these franchises have 25-year terms, although six of these municipalities have granted 60-year franchises. Entergy Louisiana also supplies electric service in approximately 353 unincorporated communities, all of which are located in Louisiana parishes in which it holds non-exclusive franchises. Entergy Mississippi has received from the MPSC certificates of public convenience and necessity to provide electric service to areas within 45 counties, including a number of municipalities, in western Mississippi. Under Mississippi statutory law, such certificates are exclusive. Entergy Mississippi may continue to serve in such municipalities upon payment of a statutory franchise fee, regardless of whether an original municipal franchise is still in existence. Entergy New Orleans provides electric and gas service in the City of New Orleans pursuant to city ordinances (except electric service in Algiers, which is provided by Entergy Louisiana). These ordinances contain a continuing option for the City of New Orleans to purchase Entergy New Orleans' electric and gas utility properties. The business of System Energy is limited to wholesale power sales. It has no distribution franchises. Property and Other Generation Resources Generating Stations The total capability of the generating stations owned and leased by the domestic utility companies and System Energy as of December 31, 2004, is indicated below:
<table><tr><td></td><td>Owned and Leased Capability MW-1</td></tr><tr><td>Company</td><td>Total</td><td>Gas/Oil</td><td>Nuclear</td><td>Coal</td><td>Hydro</td></tr><tr><td>Entergy Arkansas</td><td>4,709</td><td>1,613</td><td>1,837</td><td>1,189</td><td>70</td></tr><tr><td>Entergy Gulf States</td><td>6,485</td><td>4,890</td><td>968</td><td>627</td><td>-</td></tr><tr><td>Entergy Louisiana</td><td>5,363</td><td>4,276</td><td>1,087</td><td>-</td><td>-</td></tr><tr><td>Entergy Mississippi</td><td>2,898</td><td>2,490</td><td>-</td><td>408</td><td>-</td></tr><tr><td>Entergy New Orleans</td><td>915</td><td>915</td><td>-</td><td>-</td><td>-</td></tr><tr><td>System Energy</td><td>1,143</td><td>-</td><td>1,143</td><td>-</td><td>-</td></tr><tr><td>Total</td><td>21,513</td><td>14,184</td><td>5,035</td><td>2,224</td><td>70</td></tr></table>
(1) "Owned and Leased Capability" is the dependable load carrying capability as demonstrated under actual operating conditions based on the primary fuel (assuming no curtailments) that each station was designed to utilize. Entergy's load and capacity projections are reviewed periodically to assess the need and timing for additional generating capacity and interconnections. These reviews consider existing and projected demand, the availability and price of power, the location of new loads, and economy. Peak load in the U. S. Utility service territory is typically around 21,000 MW, with minimum load typically around 9,000 MW. Allowing for an adequate reserve margin, Entergy has been short approximately 3,000 MW during the summer peak load period. In addition to its net short position at summer peak, Entergy considers its generation in three categories: (1) baseload (e. g. coal and nuclear); (2) load-following (e. g. combined cycle gas-fired); and (3) peaking. The relative supply and demand for these categories of generation vary by region of the Entergy System. For example, the north end of its system has more baseload coal and nuclear generation than regional demand requires, but is short load-following or intermediate generation. In the south end of the Entergy system, load would be more effectively served if gasfired intermediate resources already in place were supplemented with additional solid fuel baseload generation. REIT ownership requirements; however, the restrictions may have the effect of preventing a change of control, which does not threaten REIT status. These restrictions include a provision that generally limits ownership by any person of more than 9.9% of the value of our outstanding equity stock, unless our board of directors exempts the person from such ownership limitation, provided that any such exemption shall not allow the person to exceed 13% of the value of our outstanding equity stock. These provisions may have the effect of delaying, deferring or preventing someone from taking control of us, even though a change of control might involve a premium price for our stockholders or might otherwise be in our stockholders’ best interests. Item 1B. UNRESOLVED STAFF COMMENTS None. Item 2. PROPERTIES At December 31, 2007, our apartment portfolio included 234 communities located in 30 markets, with a total of 65,867 completed apartment homes. We own approximately 50,300 square feet of office space in Richmond, Virginia, and we lease approximately 15,500 square feet of office space in Highlands Ranch, Colorado, for our corporate headquarters. The table below sets forth a summary of our real estate portfolio by geographic market at December 31, 2007. SUMMARY OF REAL ESTATE PORTFOLIO BY GEOGRAPHIC MARKET AT DECEMBER 31, 2007
<table><tr><td></td><td> Number of Apartment Communities</td><td> Number of Apartment Homes</td><td>Percentage of Carrying Value</td><td> Carrying Value (In thousands)</td><td> Encumbrances (In thousands)</td><td> Cost per Home</td><td>Average Physical Occupancy</td><td> Average Home Size (Square Feet)</td></tr><tr><td> WESTERN REGION</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Orange Co., CA</td><td>13</td><td>4,067</td><td>11.7%</td><td>$696,332</td><td>$146,319</td><td>$171,215</td><td>94.9%</td><td>821</td></tr><tr><td>San Francisco, CA</td><td>9</td><td>1,896</td><td>5.7%</td><td>339,664</td><td>—</td><td>179,148</td><td>96.3%</td><td>791</td></tr><tr><td>Los Angeles, CA</td><td>7</td><td>1,380</td><td>4.7%</td><td>278,375</td><td>89,574</td><td>201,721</td><td>92.9%</td><td>940</td></tr><tr><td>San Diego, CA</td><td>5</td><td>1,123</td><td>2.8%</td><td>166,900</td><td>39,847</td><td>148,620</td><td>94.1%</td><td>797</td></tr><tr><td>Inland Empire, CA</td><td>3</td><td>1,074</td><td>2.5%</td><td>147,351</td><td>—</td><td>137,198</td><td>92.2%</td><td>886</td></tr><tr><td>Seattle, WA</td><td>7</td><td>1,270</td><td>2.5%</td><td>147,268</td><td>68,920</td><td>115,959</td><td>95.7%</td><td>871</td></tr><tr><td>Monterey Peninsula, CA</td><td>7</td><td>1,565</td><td>2.5%</td><td>146,325</td><td>—</td><td>93,498</td><td>93.5%</td><td>724</td></tr><tr><td>Portland, OR</td><td>5</td><td>1,365</td><td>1.5%</td><td>91,537</td><td>20,891</td><td>67,060</td><td>95.2%</td><td>887</td></tr><tr><td>Sacramento, CA</td><td>2</td><td>914</td><td>1.1%</td><td>65,466</td><td>48,167</td><td>71,626</td><td>92.1%</td><td>820</td></tr><tr><td> MID-ATLANTIC REGION</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Metropolitan DC</td><td>10</td><td>3,138</td><td>7.3%</td><td>432,905</td><td>90,563</td><td>137,956</td><td>89.1%</td><td>928</td></tr><tr><td>Raleigh, NC</td><td>11</td><td>3,663</td><td>3.9%</td><td>234,849</td><td>56,862</td><td>64,114</td><td>93.8%</td><td>957</td></tr><tr><td>Richmond, VA</td><td>9</td><td>2,636</td><td>3.3%</td><td>195,943</td><td>40,715</td><td>74,333</td><td>90.5%</td><td>968</td></tr><tr><td>Baltimore, MD</td><td>10</td><td>2,119</td><td>3.2%</td><td>188,347</td><td>—</td><td>88,885</td><td>93.2%</td><td>924</td></tr><tr><td>Wilmington, NC</td><td>6</td><td>1,868</td><td>1.8%</td><td>107,439</td><td>—</td><td>57,516</td><td>94.0%</td><td>952</td></tr><tr><td>Charlotte, NC</td><td>6</td><td>1,226</td><td>1.5%</td><td>91,768</td><td>—</td><td>74,852</td><td>94.5%</td><td>990</td></tr><tr><td>Norfolk, VA</td><td>6</td><td>1,438</td><td>1.3%</td><td>77,089</td><td>28,388</td><td>53,608</td><td>94.5%</td><td>1,016</td></tr><tr><td>Other Mid-Atlantic</td><td>13</td><td>2,817</td><td>2.6%</td><td>152,308</td><td>—</td><td>54,067</td><td>94.2%</td><td>922</td></tr><tr><td> SOUTHEASTERN REGION</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Tampa, FL</td><td>12</td><td>4,106</td><td>5.0%</td><td>294,845</td><td>51,994</td><td>71,808</td><td>88.4%</td><td>977</td></tr><tr><td>Orlando, FL</td><td>12</td><td>3,476</td><td>4.1%</td><td>244,373</td><td>84,098</td><td>70,303</td><td>90.0%</td><td>955</td></tr><tr><td>Nashville, TN</td><td>10</td><td>2,966</td><td>3.4%</td><td>204,382</td><td>78,814</td><td>68,908</td><td>93.2%</td><td>918</td></tr><tr><td>Jacksonville, FL</td><td>5</td><td>1,857</td><td>2.5%</td><td>149,131</td><td>16,011</td><td>80,307</td><td>93.0%</td><td>913</td></tr><tr><td>Other Florida</td><td>8</td><td>2,400</td><td>2.8%</td><td>169,006</td><td>—</td><td>70,419</td><td>89.4%</td><td>917</td></tr><tr><td>Other Southeastern</td><td>7</td><td>1,752</td><td>1.4%</td><td>82,046</td><td>—</td><td>46,830</td><td>94.7%</td><td>819</td></tr></table>
PART II Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES UDR, Inc. : Common Stock UDR, Inc. ’s common stock has been listed on the New York Stock Exchange (“NYSE”) under the symbol “UDR” since May 7, 1990. The following tables set forth the quarterly high and low sale prices per common share reported on the NYSE for each quarter of the last two fiscal years. Distribution information for common stock reflects distributions declared per share for each calendar quarter and paid at the end of the following month.
<table><tr><td></td><td colspan="3">2017</td><td colspan="3">2016</td></tr><tr><td></td><td>High</td><td>Low</td><td>Distributions Declared</td><td>High</td><td>Low</td><td>Distributions Declared</td></tr><tr><td>Quarter ended March 31,</td><td>$36.50</td><td>$34.48</td><td>$0.310</td><td>$38.53</td><td>$33.15</td><td>$0.295</td></tr><tr><td>Quarter ended June 30,</td><td>$40.49</td><td>$35.97</td><td>$0.310</td><td>$38.56</td><td>$33.42</td><td>$0.295</td></tr><tr><td>Quarter ended September 30,</td><td>$39.79</td><td>$37.75</td><td>$0.310</td><td>$37.63</td><td>$34.20</td><td>$0.295</td></tr><tr><td>Quarter ended December 31,</td><td>$40.05</td><td>$37.68</td><td>$0.310</td><td>$36.48</td><td>$33.11</td><td>$0.295</td></tr></table>
On February 16, 2018, the closing sale price of our common stock was $34.61 per share on the NYSE, and there were 3,639 holders of record of the 268,160,029 outstanding shares of our common stock. We have determined that, for federal income tax purposes, approximately 83% of the distributions for 2017 represented ordinary income, 1% represented qualified ordinary income, 11% represented long-term capital gain, and 5% represented unrecaptured section 1250 gain. UDR pays regular quarterly distributions to holders of its common stock. Future distributions will be at the discretion of our Board of Directors and will depend on our actual funds from operations, financial condition and capital requirements, the annual distribution requirements under the REIT provisions of the Code, and other factors. Series E Preferred Stock The Series E Cumulative Convertible Preferred Stock (“Series E”) has no stated par value and a liquidation preference of $16.61 per share. Subject to certain adjustments and conditions, each share of the Series E is convertible at any time and from time to time at the holder’s option into 1.083 shares of our common stock. The holders of the Series E are entitled to vote on an as-converted basis as a single class in combination with the holders of common stock at any meeting of our stockholders for the election of directors or for any other purpose on which the holders of common stock are entitled to vote. The Series E has no stated maturity and is not subject to any sinking fund or any mandatory redemption. In connection with a special dividend (declared on November 5, 2008), the Company reserved for issuance upon conversion of the Series E additional shares of common stock to which a holder of the Series E would have received if the holder had converted the Series E immediately prior to the record date for this special dividend. Distributions declared on the Series E for the years ended December 31, 2017 and 2016 were $1.33 per share or $0.3322 per quarter. The Series E is not listed on any exchange. At December 31, 2017, a total of 2,780,994 shares of the Series E were outstanding. Series F Preferred Stock We are authorized to issue up to 20,000,000 shares of our Series F Preferred Stock (“Series F”). The Series F may be purchased by holders of our Operating Partnership Units, or OP Units, described below under “Operating Partnership Units,” at a purchase price of $0.0001 per share. OP unitholders are entitled to subscribe for and purchase one share of the Series F for each OP Unit held. In connection with the acquisition of properties from Home OP and the formation of the DownREIT Partnership in October 2015, we issued 13,988,313 Series F shares at $0.0001 per share to former limited partners of the Home OP, which had the right to subscribe for one share of Series F for each DownREIT Unit issued in connection with the acquisitions. For the years ended December 31, 2017 and 2016, we recognized income/(loss) from unconsolidated entities of $(19.3) million and $(37.4) million, respectively. The decrease in loss from unconsolidated entities as compared to the prior year was primarily attributable to a reduction in depreciation and amortization at the DownREIT Partnership as a result of fully depreciated assets. Interest Expense For the year ended December 31, 2018, interest expense decreased by 24.8% or $7.5 million as compared to 2017, which was primarily due to lower debt balances as a result of the prepayment of debt during the year ended December 31, 2018 and higher prepayment penalties incurred during the year ended December 31, 2017. Gain/(Loss) on Sale of Real Estate Owned During the year ended December 31, 2018, the Operating Partnership recognized total gains of $75.5 million on the sale of an operating community in Orange County, California with a total of 264 apartment homes and a commercial office building in Fairfax, Virginia. During the year ended December 31, 2017, the Operating Partnership sold two operating communities in Orange County, California and Carlsbad, California with a total of 218 apartment homes, resulting in a gain of $41.3 million. During the year ended December 31, 2016, the Operating Partnership sold two operating communities in Baltimore, Maryland with a total of 276 apartment homes, resulting in a gain of $33.2 million. Inflation We believe that the direct effects of inflation on our operations have been immaterial. While the impact of inflation primarily impacts our results of operations as a result of wage pressures and increases in utilities and material costs, the majority of our apartment leases have initial terms of 12 months or less, which generally enables us to compensate for any inflationary effects by increasing rental rates on our apartment homes. Although an extreme escalation in costs could have a negative impact on our residents and their ability to absorb rent increases, we do not believe this has had a material impact on our results for the year ended December 31, 2018. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that are material. Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2018 (dollars in thousands): |
-1 | What's the difference of Distribution fees in GAAP between 2010 and 2009? (in millions) | Amortization of Intangibles
<table><tr><td></td><td></td><td></td><td></td><td colspan="4">Change</td></tr><tr><td></td><td colspan="3">Fiscal Year</td><td colspan="2">2016 over 2015</td><td colspan="2">2015 over 2014</td></tr><tr><td></td><td>2016</td><td>2015</td><td>2014</td><td>$ Change</td><td>% Change</td><td>$ Change</td><td>% Change</td></tr><tr><td>Amortization expenses</td><td>$70,123</td><td>$88,318</td><td>$26,020</td><td>$-18,195</td><td>-21%</td><td>$62,298</td><td>239%</td></tr><tr><td>Amortization expenses as a % of revenue</td><td>2.0%</td><td>2.6%</td><td>0.9%</td><td></td><td></td><td></td><td></td></tr></table>
Amortization expenses decreased in fiscal 2016 as compared to fiscal 2015 as a result of certain intangible assets becoming fully amortized during fiscal 2015. Amortization expenses increased in fiscal 2015 as compared to fiscal 2014 as a result of acquired amortizable intangible assets from the Hittite Acquisition. These intangible assets are being amortized on a straight-line basis over their estimated useful lives. Special Charges We monitor global macroeconomic conditions on an ongoing basis, and continue to assess opportunities for improved operational effectiveness and efficiency and better alignment of expenses with revenues. As a result of these assessments, we have undertaken various restructuring actions over the past several years. The expense reductions relating to ongoing actions are described below. During fiscal 2016, we recorded a special charge of approximately $13.7 million for severance and fringe benefit costs in accordance with the Company's ongoing benefit plan for 123 manufacturing, engineering and SMG&A employees. As of October 29, 2016, we still employed 44 of the 123 employees included in these cost reduction actions. These employees must continue to be employed by the Company until their employment is terminated in order to receive the severance benefit. We expect this action will result in estimated annual cost savings of approximately $12.3 million once fully implemented. During fiscal 2014, we recorded special charges of approximately $37.3 million. These special charges included $37.9 million for severance and fringe benefit costs in accordance with our ongoing benefit plan or statutory requirements at foreign locations for 341 manufacturing, engineering and SMG&A employees; $0.5 million for lease obligations costs for facilities that we ceased using during the fourth quarter of fiscal 2014; and $0.4 million for the impairment of assets that have no future use located at closed facilities. We reversed approximately $1.4 million of our severance accrual related to charges taken in fiscal 2013, primarily due to severance costs being lower than our estimates. We terminated the employment of all employees associated with this action. This action resulted in annual cost savings of approximately $46.2 million. We expect that annual cost savings resulting from these actions will be used to make additional investments in products that we expect will drive revenue growth in the future. Other Operating Expense During fiscal 2015, we converted the benefits provided to participants in our Irish defined benefits pension plan to benefits provided under our Irish defined contribution plan. Retired pension plan participants received an annuity. As a result, in fiscal 2015 we recorded settlement charges, legal, accounting and other professional fees totaling $223.7 million to settle all existing and future Irish pension plan liabilities. The following table presents the results of operations of our Protection segment:
<table><tr><td> </td><td colspan="6">Years Ended December 31,</td><td></td><td></td></tr><tr><td> </td><td colspan="3">2010 </td><td colspan="3">2009 </td><td></td><td></td></tr><tr><td> </td><td>GAAP </td><td>Less: Adjustments-1 </td><td>Operating </td><td>GAAP </td><td>Less: Adjustments-1 </td><td>Operating </td><td colspan="2">Operating Change</td></tr><tr><td> </td><td colspan="8">(in millions, except percentages)</td></tr><tr><td> Revenues</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Management and financial advice fees</td><td>$54</td><td>$—</td><td>$54</td><td>$47</td><td>$—</td><td>$47</td><td>$7</td><td>15%</td></tr><tr><td>Distribution fees</td><td>96</td><td>—</td><td>96</td><td>97</td><td>—</td><td>97</td><td>-1</td><td>-1</td></tr><tr><td>Net investment income</td><td>429</td><td>1</td><td>428</td><td>422</td><td>27</td><td>395</td><td>33</td><td>8</td></tr><tr><td>Premiums</td><td>1,055</td><td>—</td><td>1,055</td><td>1,020</td><td>—</td><td>1,020</td><td>35</td><td>3</td></tr><tr><td>Other revenues</td><td>422</td><td>—</td><td>422</td><td>386</td><td>—</td><td>386</td><td>36</td><td>9</td></tr><tr><td>Total revenues</td><td>2,056</td><td>1</td><td>2,055</td><td>1,972</td><td>27</td><td>1,945</td><td>110</td><td>6</td></tr><tr><td>Banking and deposit interest expense</td><td>1</td><td>—</td><td>1</td><td>1</td><td>—</td><td>1</td><td>—</td><td>—</td></tr><tr><td>Total net revenues</td><td>2,055</td><td>1</td><td>2,054</td><td>1,971</td><td>27</td><td>1,944</td><td>110</td><td>6</td></tr><tr><td> Expenses</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Distribution expenses</td><td>32</td><td>—</td><td>32</td><td>22</td><td>—</td><td>22</td><td>10</td><td>45</td></tr><tr><td>Interest credited to fixed accounts</td><td>147</td><td>—</td><td>147</td><td>144</td><td>—</td><td>144</td><td>3</td><td>2</td></tr><tr><td>Benefits, claims, losses and settlement expenses</td><td>1,066</td><td>—</td><td>1,066</td><td>924</td><td>—</td><td>924</td><td>142</td><td>15</td></tr><tr><td>Amortization of deferred acquisition costs</td><td>183</td><td>—</td><td>183</td><td>159</td><td>—</td><td>159</td><td>24</td><td>15</td></tr><tr><td>General and administrative expense</td><td>223</td><td>—</td><td>223</td><td>226</td><td>—</td><td>226</td><td>-3</td><td>-1</td></tr><tr><td>Total expenses</td><td>1,651</td><td>—</td><td>1,651</td><td>1,475</td><td>—</td><td>1,475</td><td>176</td><td>12</td></tr><tr><td>Pretax income</td><td>$404</td><td>$1</td><td>$403</td><td>$496</td><td>$27</td><td>$469</td><td>$-66</td><td>-14%</td></tr></table>
(1) Adjustments include net realized gains or losses. Our Protection segment pretax income was $404 million for the year ended December 31, 2010, a decrease of $92 million, or 19%, from $496 million for the prior year. Our Protection segment pretax operating income, which excludes net realized gains or losses, was $403 million for the year ended December 31, 2010, a decrease of $66 million, or 14%, from $469 million for the prior year. Net Revenues Net revenues increased $84 million, or 4%, to $2.1 billion for the year ended December 31, 2010 compared to $2.0 billion for the prior year. Operating net revenues, which exclude net realized gains or losses, increased $110 million, or 6%, to $2.1 billion for the year ended December 31, 2010 compared to $1.9 billion for the prior year primarily due to the impact of updating valuation assumptions and model changes and an increase in net investment income and premiums. Management and financial advice fees increased $7 million, or 15%, to $54 million for the year ended December 31, 2010 compared to $47 million for the prior year primarily due to higher management fees from VUL separate account growth due to market appreciation. Net investment income increased $7 million, or 2%, to $429 million for the year ended December 31, 2010 compared to $422 million for the prior year. Operating net investment income, which excludes net realized gains or losses, increased $33 million, or 8%, to $428 million for the year ended December 31, 2010 compared to $395 million for the prior year primarily due to higher investment yields and increased general account assets. Premiums increased $35 million, or 3%, to $1.1 billion for the year ended December 31, 2010 compared to $1.0 billion for the prior year due to growth in Auto and Home premiums driven by higher volumes. Auto and Home policy counts increased 9% period-over-period. Other revenues increased $36 million, or 9%, to $422 million for the year ended December 31, 2010 compared to $386 million for the prior year primarily due to updating valuation assumptions and model changes. Other revenues in 2010 included a charge of $20 million from updating valuation assumptions and model changes compared to a charge of $65 million in the prior year. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization. General Dynamics is organized into four business groups: Aerospace, which produces Gulfstream aircraft, provides aircraft services and performs aircraft completions for other original equipment manufacturers (OEMs); Combat Systems, which designs and manufactures combat vehicles, weapons systems and munitions; Marine Systems, which designs, constructs and repairs surface ships and submarines; and Information Systems and Technology, which provides communications and information technology products and services. Our primary customer is the U. S. government. We also do significant business with international governments and a diverse base of corporate and individual buyers of business aircraft. Basis of Consolidation and Classification. The Consolidated Financial Statements include the accounts of General Dynamics Corporation and our wholly-owned and majority-owned subsidiaries. We eliminate all inter-company balances and transactions in the Consolidated Financial Statements. Consistent with defense industry practice, we classify assets and liabilities related to long-term production contracts as current, even though some of these amounts may not be realized within one year. In addition, some prior-year amounts have been reclassified among financial statement accounts to conform to the current-year presentation. Use of Estimates. The nature of our business requires that we make a number of estimates and assumptions in accordance with U. S. generally accepted accounting principles (GAAP). These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and currently available information and on various other assumptions that we believe are reasonable under the circumstances. Actual results could differ from these estimates. Revenue Recognition. We account for revenues and earnings using the percentage-of-completion method. Under this method, contract costs and revenues are recognized as the work progresses, either as the products are produced or as services are rendered. We estimate the profit on a contract as the difference between the total estimated revenue and costs to complete a contract and recognize that profit over the life of the contract. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the loss in the quarter it is identified. We generally measure progress toward completion on contracts in our defense business based on the proportion of costs incurred to date relative to total estimated costs at completion. For our contracts for the manufacture of business-jet aircraft, we record revenue at two contractual milestones: when green aircraft are delivered to, and accepted by, the customer and when the customer accepts final delivery of the fully outfitted aircraft. We review and update our contract estimates regularly. We recognize changes in estimated profit on contracts under the reallocation method. Under the reallocation method, the impact of a revision in estimate is recognized prospectively over the remaining contract term. The net increase in our operating earnings (and on a per-share basis) from the favorable impact of revisions in contract estimates totaled $350 ($0.60) in 2010, $356 ($0.63) in 2011 and $180 ($0.33) in 2012. Other than revisions on the T-AKE combat-logistics ship and Specialist Vehicle programs of $53 and ($32), respectively, no revisions on any one contract were material in 2012. Discontinued Operations. In 2011, we recognized losses from the settlement of an environmental matter associated with a former operation of the company and our estimate of continued legal costs associated with the A-12 litigation as a result of the U. S. Supreme Court’s decision that extended the expected timeline associated with the litigation. Net cash used by discontinued operations in 2011 consists primarily of cash associated with the environmental settlement and A-12 litigation costs. See Note N to the Consolidated Financial Statements for further discussion of the A-12 litigation. Research and Development Expenses. Research and development (R&D) expenses consisted of the following:
<table><tr><td>Year Ended December 31</td><td>2010</td><td>2011</td><td>2012</td></tr><tr><td>Company-sponsored R&D, including product developmentcosts</td><td>$325</td><td>$372</td><td>$374</td></tr><tr><td>Bid and proposal costs</td><td>183</td><td>173</td><td>170</td></tr><tr><td>Total company-sponsored R&D</td><td>508</td><td>545</td><td>544</td></tr><tr><td>Customer-sponsored R&D</td><td>696</td><td>994</td><td>1,063</td></tr><tr><td>Total R&D</td><td>$1,204</td><td>$1,539</td><td>$1,607</td></tr></table>
R&D expenses are included in operating costs and expenses in the Consolidated Statements of Earnings (Loss) in the period in which they are incurred. Customer-sponsored R&D expenses are charged directly to the related contract. The Aerospace group has cost-sharing arrangements with some of its suppliers that enhance the group’s internal development capabilities and offset a portion of the financial cost associated with the group’s |
0.10662 | In the year with largest amount of Payments, what's the increasing rate of Marketplaces? | Summary of Cost of Net Revenues The following table summarizes changes in cost of net revenues:
<table><tr><td></td><td colspan="3">Year Ended December 31,</td><td colspan="2">Change from 2008 to 2009</td><td colspan="2">Change from 2009 to 2010</td></tr><tr><td></td><td>2008</td><td>2009</td><td>2010</td><td>in Dollars</td><td>in %</td><td>in Dollars</td><td>in %</td></tr><tr><td></td><td colspan="7">(In thousands, except percentages)</td></tr><tr><td>Cost of net revenues:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Marketplaces</td><td>$907,121</td><td>$968,266</td><td>$1,071,499</td><td>$61,145</td><td>7%</td><td>$103,233</td><td>11%</td></tr><tr><td>As a percentage of total Marketplaces net revenues</td><td>16.2%</td><td>18.2%</td><td>18.7%</td><td></td><td></td><td></td><td></td></tr><tr><td>Payments</td><td>1,036,746</td><td>1,220,619</td><td>1,493,168</td><td>183,873</td><td>18%</td><td>272,549</td><td>22%</td></tr><tr><td>As a percentage of total Payments net revenues</td><td>43.1%</td><td>43.7%</td><td>43.5%</td><td></td><td></td><td></td><td></td></tr><tr><td>Communications</td><td>284,202</td><td>290,877</td><td>—</td><td>6,675</td><td>2%</td><td>-290,877</td><td>—</td></tr><tr><td>As a percentage of total Communications net revenues</td><td>51.6%</td><td>46.9%</td><td>—</td><td></td><td></td><td></td><td></td></tr><tr><td>Total cost of net revenues</td><td>$2,228,069</td><td>$2,479,762</td><td>$2,564,667</td><td>$251,693</td><td>11%</td><td>$84,905</td><td>3%</td></tr><tr><td>As a percentage of net revenues</td><td>26.1%</td><td>28.4%</td><td>28.0%</td><td></td><td></td><td></td><td></td></tr></table>
Cost of Net Revenues Cost of net revenues consists primarily of costs associated with payment processing, customer support and site operations and Skype telecommunications (through November 2009). Significant components of these costs include bank transaction fees, credit card interchange and assessment fees, interest expense on indebtedness incurred to finance the purchase of consumer loans receivable by Bill Me Later, employee compensation, contractor costs, facilities costs, depreciation of equipment and amortization expense. Marketplaces Marketplaces cost of net revenues increased $103.2 million, or 11%, in 2010 compared to 2009. The increase during 2010 was due primarily to the inclusion of a full year of costs attributable to Gmarket and increased site operation costs. Marketplaces cost of net revenues as a percentage of Marketplaces net revenues increased slightly in 2010 compared to 2009 due primarily to the addition of Gmarket, the settlement of a lawsuit and the establishment of a reserve related to certain indirect tax positions (recorded as a reduction in revenue). Marketplaces cost of net revenues increased $61.1 million, or 7%, in 2009 compared to 2008. The increase during 2009 was due primarily to the inclusion of costs attributable to Gmarket and Den Bl? Avis and BilBasen, partially offset by a decrease in customer support and site operations costs associated with our restructuring activities. Marketplaces cost of net revenues increased as a percentage of Marketplaces net revenues during 2009 compared to 2008 due primarily to the impact of foreign currency movements on revenues, pricing initiatives (which are recorded as a reduction in revenue) and faster growth in our lower margin Marketplaces businesses. Payments Payments cost of net revenues increased $272.5 million, or 22%, in 2010 compared to 2009. The increase in cost of net revenues was primarily due to the impact from our growth in net TPV. Payments cost of net revenues as a percentage of Payments net revenues decreased slightly in 2010 compared to 2009 due primarily to improved leverage of our customer support infrastructure and existing site operations. expect that these credit rating agencies will continue to monitor developments in our planned separation of PayPal, including the capital structure for each company after separation, which could result in additional downgrades. Our borrowing costs depend, in part, on our credit ratings and because downgrades would likely increase our borrowing costs we disclose these ratings to enhance the understanding of the effects of our ratings on our costs of funds. In addition, to assist PayPal in our planned separation we are currently working with credit rating agencies to obtain separate credit ratings for PayPal and we believe that immediately following separation both eBay and PayPal will be rated investment grade. Commitments and Contingencies As of December 31, 2014 , approximately $20.2 billion of unused credit was available to PayPal Credit accountholders. While this amount represents the total unused credit available, we have not experienced, and do not anticipate, that all of our PayPal Credit accountholders will access their entire available credit at any given point in time. In addition, the individual lines of credit that make up this unused credit are subject to periodic review and termination by the chartered financial institutions that are the issuer of PayPal Credit products based on, among other things, account usage and customer creditworthiness. When a consumer makes a purchase using a PayPal Credit products, the chartered financial institution extends credit to the consumer, funds the extension of credit at the point of sale and advances funds to the merchant. We subsequently purchase the consumer receivables related to the consumer loans and as result of that purchase, bear the risk of loss in the event of loan defaults. However, we subsequently sell a participation interest in the entire pool of consumer loans to the chartered financial institution that extended the consumer loans. Although the chartered financial institution continues to own the customer accounts, we own and bear the risk of loss on the related consumer receivables, less the participation interest held by the chartered financial institution, and PayPal is responsible for all servicing functions related to the customer account balances. As of December 31, 2014 , the total outstanding principal balance of this pool of consumer loans was $3.7 billion , of which the chartered financial institution owns a participation interest of $163 million , or 4.4% of the total outstanding balance of consumer receivables at that date. We have certain fixed contractual obligations and commitments that include future estimated payments for general operating purposes. Changes in our business needs, contractual cancellation provisions, fluctuating interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of these payments. The following table summarizes our fixed contractual obligations and commitments:
<table><tr><td>Payments Due During the Year Ending December 31,</td><td>Debt</td><td>Leases</td><td>Purchase Obligations</td><td>Total</td></tr><tr><td></td><td colspan="4">(In millions)</td></tr><tr><td>2015</td><td>1,026</td><td>113</td><td>275</td><td>1,414</td></tr><tr><td>2016</td><td>164</td><td>96</td><td>58</td><td>318</td></tr><tr><td>2017</td><td>1,613</td><td>83</td><td>55</td><td>1,751</td></tr><tr><td>2018</td><td>148</td><td>63</td><td>43</td><td>254</td></tr><tr><td>2019</td><td>1,697</td><td>42</td><td>7</td><td>1,746</td></tr><tr><td>Thereafter</td><td>4,708</td><td>52</td><td>3</td><td>4,763</td></tr><tr><td></td><td>9,356</td><td>449</td><td>441</td><td>10,246</td></tr></table>
The significant assumptions used in our determination of amounts presented in the above table are as follows: ? Debt amounts include the principal and interest amounts of the respective debt instruments. For additional details related to our debt, please see “Note 10 – Debt” to the consolidated financial statements included in this report. This table does not reflect any amounts payable under our $3 billion revolving credit facility or $2 billion commercial paper program, for which no borrowings were outstanding as of December 31, 2014 . ? Lease amounts include minimum rental payments under our non-cancelable operating leases for office facilities, fulfillment centers, as well as computer and office equipment that we utilize under lease arrangements. The amounts presented are consistent with contractual terms and are not expected to differ significantly from actual results under our existing leases, unless a substantial change in our headcount needs requires us to expand our occupied space or exit an office facility early. MARATHON OIL CORPORATION Notes to Consolidated Financial Statements equivalent to the Exchangeable Shares at the acquisition date as discussed below. Additional shares of voting preferred stock will be issued as necessary to adjust the number of votes to account for changes in the exchange ratio. Preferred shares – In connection with the acquisition of Western discussed in Note 6, the Board of Directors authorized a class of voting preferred stock consisting of 6 million shares. Upon completion of the acquisition, we issued 5 million shares of this voting preferred stock to a trustee, who holds the shares for the benefit of the holders of the Exchangeable Shares discussed above. Each share of voting preferred stock is entitled to one vote on all matters submitted to the holders of Marathon common stock. Each holder of Exchangeable Shares may direct the trustee to vote the number of shares of voting preferred stock equal to the number of shares of Marathon common stock issuable upon the exchange of the Exchangeable Shares held by that holder. In no event will the aggregate number of votes entitled to be cast by the trustee with respect to the outstanding shares of voting preferred stock exceed the number of votes entitled to be cast with respect to the outstanding Exchangeable Shares. Except as otherwise provided in our restated certificate of incorporation or by applicable law, the common stock and the voting preferred stock will vote together as a single class in the election of directors of Marathon and on all other matters submitted to a vote of stockholders of Marathon generally. The voting preferred stock will have no other voting rights except as required by law. Other than dividends payable solely in shares of voting preferred stock, no dividend or other distribution, will be paid or payable to the holder of the voting preferred stock. In the event of any liquidation, dissolution or winding up of Marathon, the holder of shares of the voting preferred stock will not be entitled to receive any assets of Marathon available for distribution to its stockholders. The voting preferred stock is not convertible into any other class or series of the capital stock of Marathon or into cash, property or other rights, and may not be redeemed.25. Leases We lease a wide variety of facilities and equipment under operating leases, including land and building space, office equipment, production facilities and transportation equipment. Most long-term leases include renewal options and, in certain leases, purchase options. Future minimum commitments for capital lease obligations (including sale-leasebacks accounted for as financings) and for operating lease obligations having initial or remaining noncancelable lease terms in excess of one year are as follows:
<table><tr><td><i>(In millions)</i></td><td>Capital Lease Obligations (a)</td><td>Operating Lease Obligations</td></tr><tr><td>2010</td><td>$46</td><td>$165</td></tr><tr><td>2011</td><td>45</td><td>140</td></tr><tr><td>2012</td><td>58</td><td>121</td></tr><tr><td>2013</td><td>44</td><td>102</td></tr><tr><td>2014</td><td>44</td><td>84</td></tr><tr><td>Later years</td><td>466</td><td>313</td></tr><tr><td>Sublease rentals</td><td>-</td><td>-16</td></tr><tr><td>Total minimum lease payments</td><td>$703</td><td>$909</td></tr><tr><td>Less imputed interest costs</td><td>-257</td><td></td></tr><tr><td>Present value of net minimum lease payments</td><td>$446</td><td></td></tr></table>
(a) Capital lease obligations include $164 million related to assets under construction as of December 31, 2009. These leases are currently reported in long-term debt based on percentage of construction completed at $36 million. In connection with past sales of various plants and operations, we assigned and the purchasers assumed certain leases of major equipment used in the divested plants and operations of United States Steel. In the event of a default by any of the purchasers, United States Steel has assumed these obligations; however, we remain primarily obligated for payments under these leases. Minimum lease payments under these operating lease obligations of $16 million have been included above and an equal amount has been reported as sublease rentals. |
194 | what was the total intrinsic value of options exercised during 2007 , 2006 and 2005 in millions? | Tobacco-Related Cases Set for Trial: As of January 29, 2018, three Engle progeny cases are set for trial through March 31, 2018. There are no other individual smoking and health cases against PM USA set for trial during this period. Cases against other companies in the tobacco industry may be scheduled for trial during this period. Trial dates are subject to change. Trial Results: Since January 1999, excluding the Engle progeny cases (separately discussed below), verdicts have been returned in 63 smoking and health, “Lights/Ultra Lights” and health care cost recovery cases in which PM USA was a defendant. Verdicts in favor of PM USA and other defendants were returned in 42 of the 63 cases. These 42 cases were tried in Alaska (1), California (7), Connecticut (1), Florida (10), Louisiana (1), Massachusetts (2), Mississippi (1), Missouri (4), New Hampshire (1), New Jersey (1), New York (5), Ohio (2), Pennsylvania (1), Rhode Island (1), Tennessee (2) and West Virginia (2). A motion for a new trial was granted in one of the cases in Florida and in the case in Alaska. In the Alaska case (Hunter), the trial court withdrew its order for a new trial upon PM USA’s motion for reconsideration. In December 2015, the Alaska Supreme Court reversed the trial court decision and remanded the case with directions for the trial court to reassess whether to grant a new trial. In March 2016, the trial court granted a new trial and PM USA filed a petition for review of that order with the Alaska Supreme Court, which the court denied in July 2016. The retrial began in October 2016. In November 2016, the court declared a mistrial after the jury failed to reach a verdict. The plaintiff subsequently moved for a new trial, which is scheduled to begin April 9, 2018. See Types and Number of Cases above for a discussion of the trial results in In re: Tobacco Litigation (West Virginia consolidated cases). Of the 21 non-Engle progeny cases in which verdicts were returned in favor of plaintiffs, 18 have reached final resolution. As of January 29, 2018, 116 state and federal Engle progeny cases involving PM USA have resulted in verdicts since the Florida Supreme Court’s Engle decision as follows: 61 verdicts were returned in favor of plaintiffs; 45 verdicts were returned in favor of PM USA. Eight verdicts that were initially returned in favor of plaintiff were reversed post-trial or on appeal and remain pending and two verdicts in favor of PM USA were reversed for a new trial. See Smoking and Health Litigation - Engle Progeny Trial Court Results below for a discussion of these verdicts. Judgments Paid and Provisions for Tobacco and Health Litigation Items (Including Engle Progeny Litigation): After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation, since October 2004, PM USA has paid in the aggregate judgments and settlements (including related costs and fees) totaling approximately $490 million and interest totaling approximately $184 million as of December 31, 2017. These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $99 million, interest totaling approximately $22 million and payment of approximately $43 million in connection with the Federal Engle Agreement, discussed below. The changes in Altria Group, Inc. ’s accrued liability for tobacco and health litigation items, including related interest costs, for the periods specified below are as follows:
<table><tr><td>(in millions)</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Accrued liability for tobacco and health litigation items at beginning of year</td><td>$47</td><td>$132</td><td>$39</td></tr><tr><td>Pre-tax charges for:</td><td></td><td></td><td></td></tr><tr><td>Tobacco and health judgments</td><td>72</td><td>21</td><td>84</td></tr><tr><td>Related interest costs</td><td>8</td><td>7</td><td>23</td></tr><tr><td>Agreement to resolve federalEngleprogeny cases</td><td>—</td><td>—</td><td>43</td></tr><tr><td>Agreement to resolveAspinallincluding relatedinterest costs</td><td>—</td><td>32</td><td>—</td></tr><tr><td>Agreement to resolveMiner</td><td>—</td><td>45</td><td>—</td></tr><tr><td>Payments</td><td>-21</td><td>-190</td><td>-57</td></tr><tr><td>Accrued liability for tobacco and health litigation items atend of year</td><td>$106</td><td>$47</td><td>$132</td></tr></table>
The accrued liability for tobacco and health litigation items, including related interest costs, was included in liabilities on Altria Group, Inc. ’s consolidated balance sheets. Pre-tax charges for tobacco and health judgments, the agreement to resolve federal Engle progeny cases and the agreements to resolve the Aspinall and Miner “lights” class action cases (excluding related interest costs of approximately $10 million in Aspinall) were included in marketing, administration and research costs on Altria Group, Inc. ’s consolidated statements of earnings. Pre-tax charges for related interest costs were included in interest and other debt expense, net on Altria Group, Inc. ’s consolidated statements of earnings. Security for Judgments: To obtain stays of judgments pending current appeals, as of December 31, 2017, PM USA has posted various forms of security totaling approximately $61 million, the majority of which has been collateralized with cash deposits that are included in assets on the consolidated balance sheet. Information about stock options at December 31, 2007 follows:
<table><tr><td></td><td>Options Outstanding</td><td>Options Exercisable(a)</td></tr><tr><td>December 31, 2007Shares in thousandsRange of exercise prices</td><td>Shares</td><td>Weighted- averageexercise price</td><td>Weighted-average remaining contractual life (in years)</td><td>Shares</td><td>Weighted-averageexercise price</td></tr><tr><td>$37.43 – $46.99</td><td>1,444</td><td>$43.05</td><td>4.0</td><td>1,444</td><td>$43.05</td></tr><tr><td>47.00 – 56.99</td><td>3,634</td><td>53.43</td><td>5.4</td><td>3,022</td><td>53.40</td></tr><tr><td>57.00 – 66.99</td><td>3,255</td><td>60.32</td><td>5.2</td><td>2,569</td><td>58.96</td></tr><tr><td>67.00 – 76.23</td><td>5,993</td><td>73.03</td><td>5.5</td><td>3,461</td><td>73.45</td></tr><tr><td>Total</td><td>14,326</td><td>$62.15</td><td>5.3</td><td>10,496</td><td>$59.95</td></tr></table>
(a) The weighted-average remaining contractual life was approximately 4.2 years. At December 31, 2007, there were approximately 13,788,000 options in total that were vested and are expected to vest. The weighted-average exercise price of such options was $62.07 per share, the weighted-average remaining contractual life was approximately 5.2 years, and the aggregate intrinsic value at December 31, 2007 was approximately $92 million. Stock options granted in 2005 include options for 30,000 shares that were granted to non-employee directors that year. No such options were granted in 2006 or 2007. Awards granted to non-employee directors in 2007 include 20,944 deferred stock units awarded under the Outside Directors Deferred Stock Unit Plan. A deferred stock unit is a phantom share of our common stock, which requires liability accounting treatment under SFAS 123R until such awards are paid to the participants as cash. As there are no vestings or service requirements on these awards, total compensation expense is recognized in full on all awarded units on the date of grant. The weighted-average grant-date fair value of options granted in 2007, 2006 and 2005 was $11.37, $10.75 and $9.83 per option, respectively. To determine stock-based compensation expense under SFAS 123R, the grant-date fair value is applied to the options granted with a reduction made for estimated forfeitures. At December 31, 2006 and 2005 options for 10,743,000 and 13,582,000 shares of common stock, respectively, were exercisable at a weighted-average price of $58.38 and $56.58, respectively. The total intrinsic value of options exercised during 2007, 2006 and 2005 was $52 million, $111 million and $31 million, respectively. At December 31, 2007 the aggregate intrinsic value of all options outstanding and exercisable was $94 million and $87 million, respectively. Cash received from option exercises under all Incentive Plans for 2007, 2006 and 2005 was approximately $111 million, $233 million and $98 million, respectively. The actual tax benefit realized for tax deduction purposes from option exercises under all Incentive Plans for 2007, 2006 and 2005 was approximately $39 million, $82 million and $34 million, respectively. There were no options granted in excess of market value in 2007, 2006 or 2005. Shares of common stock available during the next year for the granting of options and other awards under the Incentive Plans were 40,116,726 at December 31, 2007. Total shares of PNC common stock authorized for future issuance under equity compensation plans totaled 41,787,400 shares at December 31, 2007, which includes shares available for issuance under the Incentive Plans, the Employee Stock Purchase Plan as described below, and a director plan. During 2007, we issued approximately 2.1 million shares from treasury stock in connection with stock option exercise activity. As with past exercise activity, we intend to utilize treasury stock for future stock option exercises. As discussed in Note 1 Accounting Policies, we adopted the fair value recognition provisions of SFAS 123 prospectively to all employee awards including stock options granted, modified or settled after January 1, 2003. As permitted under SFAS 123, we recognized compensation expense for stock options on a straight-line basis over the pro rata vesting period. Total compensation expense recognized related to PNC stock options in 2007 was $29 million compared with $31 million in 2006 and $29 million in 2005. PRO FORMA EFFECTS A table is included in Note 1 Accounting Policies that sets forth pro forma net income and basic and diluted earnings per share as if compensation expense had been recognized under SFAS 123 and 123R, as amended, for stock options for 2005. For purposes of computing stock option expense and 2005 pro forma results, we estimated the fair value of stock options using the Black-Scholes option pricing model. The model requires the use of numerous assumptions, many of which are very subjective. Therefore, the 2005 pro forma results are estimates of results of operations as if compensation expense had been recognized for all stock-based compensation awards and are not indicative of the impact on future periods. See Note 1 Accounting Policies and Note 3 Asset Quality in the Notes To Consolidated Financial Statements in Item 8 of this Report for further information on certain key asset quality indicators that we use to evaluate our portfolios and establish the allowances. Table 23: Allowance for Loan and Lease Losses
<table><tr><td>Dollars in millions</td><td>2017</td><td>2016</td></tr><tr><td>January 1</td><td>$2,589</td><td>$2,727</td></tr><tr><td>Total net charge-offs</td><td>-457</td><td>-543</td></tr><tr><td>Provision for credit losses</td><td>441</td><td>433</td></tr><tr><td>Net decrease / (increase) in allowance forunfunded loan commitments andletters of credit</td><td>4</td><td>-40</td></tr><tr><td>Other</td><td>34</td><td>12</td></tr><tr><td>December 31</td><td>$2,611</td><td>$2,589</td></tr><tr><td>Net charge-offs to average loans (for theyear ended)</td><td>.21%</td><td>.26%</td></tr><tr><td>Allowance for loan and lease losses tototal loans</td><td>1.18%</td><td>1.23%</td></tr><tr><td>Commercial lending net charge-offs</td><td>$-105</td><td>$-185</td></tr><tr><td>Consumer lending net charge-offs</td><td>-352</td><td>-358</td></tr><tr><td>Total net charge-offs</td><td>$-457</td><td>$-543</td></tr><tr><td>Net charge-offs to average loans (for theyear ended)</td><td></td><td></td></tr><tr><td>Commercial lending</td><td>.07%</td><td>.14%</td></tr><tr><td>Consumer lending</td><td>.49%</td><td>.50%</td></tr></table>
At December 31, 2017, total ALLL to total nonperforming loans was 140%. The comparable amount for December 31, 2016 was 121%. These ratios are 102% and 89%, respectively, when excluding the $.7 billion of ALLL at both December 31, 2017 and December 31, 2016 allocated to consumer loans and lines of credit not secured by residential real estate and purchased impaired loans. We have excluded these amounts from ALLL in these ratios as these asset classes are not included in nonperforming loans. See Table 18 within this Credit Risk Management section for additional information. The ALLL balance increases or decreases across periods in relation to fluctuating risk factors, including asset quality trends, net charge-offs and changes in aggregate portfolio balances. During 2017, overall credit quality remained stable, which resulted in an essentially flat ALLL balance as of December 31, 2017 compared to December 31, 2016. The following table summarizes our loan charge-offs and recoveries. Table 24: Loan Charge-Offs and Recoveries
<table><tr><td>Year ended December 31Dollars in millions</td><td>Gross Charge-offs</td><td>Recoveries</td><td>Net Charge-offs / (Recoveries)</td><td>Percent of Average Loans</td></tr><tr><td>2017</td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial</td><td>$186</td><td>$81</td><td>$105</td><td>.10%</td></tr><tr><td>Commercial realestate</td><td>24</td><td>28</td><td>-4</td><td>-.01%</td></tr><tr><td>Equipmentlease financing</td><td>11</td><td>7</td><td>4</td><td>.05%</td></tr><tr><td>Home equity</td><td>123</td><td>91</td><td>32</td><td>.11%</td></tr><tr><td>Residential realestate</td><td>9</td><td>18</td><td>-9</td><td>-.06%</td></tr><tr><td>Credit card</td><td>182</td><td>21</td><td>161</td><td>3.06%</td></tr><tr><td>Other consumer</td><td>251</td><td>83</td><td>168</td><td>.77%</td></tr><tr><td>Total</td><td>$786</td><td>$329</td><td>$457</td><td>.21%</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial</td><td>$332</td><td>$117</td><td>$215</td><td>.21%</td></tr><tr><td>Commercial realestate</td><td>26</td><td>51</td><td>-25</td><td>-.09%</td></tr><tr><td>Equipment leasefinancing</td><td>5</td><td>10</td><td>-5</td><td>-.07%</td></tr><tr><td>Home equity</td><td>143</td><td>84</td><td>59</td><td>.19%</td></tr><tr><td>Residential realestate</td><td>14</td><td>9</td><td>5</td><td>.03%</td></tr><tr><td>Credit card</td><td>161</td><td>19</td><td>142</td><td>2.90%</td></tr><tr><td>Other consumer</td><td>205</td><td>53</td><td>152</td><td>.70%</td></tr><tr><td>Total</td><td>$886</td><td>$343</td><td>$543</td><td>.26%</td></tr></table>
See Note 1 Accounting Policies and Note 4 Allowance for Loan and Lease Losses in the Notes To Consolidated Financial Statements in Item 8 of this Report for additional information on the ALLL. |
5,353.092713 | What will Pass-through securities be like in 2009 if it develops with the same increasing rate as current? (in million) | Subscription Cost of subscription revenue consists of third-party royalties and expenses related to operating our network infrastructure, including depreciation expenses and operating lease payments associated with computer equipment, data center costs, salaries and related expenses of network operations, implementation, account management and technical support personnel, amortization of intangible assets and allocated overhead. We enter into contracts with third-parties for the use of their data center facilities and our data center costs largely consist of the amounts we pay to these third parties for rack space, power and similar items. Cost of subscription revenue increased due to the following:
<table><tr><td></td><td>% Change2014-2013</td><td>% Change2013-2012</td></tr><tr><td>Data center cost</td><td>10%</td><td>11%</td></tr><tr><td>Compensation cost and related benefits associated with headcount</td><td>4</td><td>5</td></tr><tr><td>Depreciation expense</td><td>3</td><td>3</td></tr><tr><td>Royalty cost</td><td>3</td><td>4</td></tr><tr><td>Amortization of purchased intangibles</td><td>—</td><td>4</td></tr><tr><td>Various individually insignificant items</td><td>1</td><td>—</td></tr><tr><td>Total change</td><td>21%</td><td>27%</td></tr></table>
Cost of subscription revenue increased during fiscal 2014 as compared to fiscal 2013 primarily due to data center costs, compensation cost and related benefits, deprecation expense, and royalty cost. Data center costs increased as compared with the year-ago period primarily due to higher transaction volumes in our Adobe Marketing Cloud and Creative Cloud services. Compensation cost and related benefits increased as compared to the year-ago period primarily due to additional headcount in fiscal 2014, including from our acquisition of Neolane in the third quarter of fiscal 2013. Depreciation expense increased as compared to the year-ago period primarily due to higher capital expenditures in recent periods as we continue to invest in our network and data center infrastructure to support the growth of our business. Royalty cost increased primarily due to increases in subscriptions and downloads of our SaaS offerings. Cost of subscription revenue increased during fiscal 2013 as compared to fiscal 2012 primarily due to increased hosted server costs and amortization of purchased intangibles. Hosted server costs increased primarily due to increases in data center costs related to higher transaction volumes in our Adobe Marketing Cloud and Creative Cloud services, depreciation expense from higher capital expenditures in prior years and compensation and related benefits driven by additional headcount. Amortization of purchased intangibles increased primarily due to increased amortization of intangible assets purchased associated with our acquisitions of Behance and Neolane in fiscal 2013. Services and Support Cost of services and support revenue is primarily comprised of employee-related costs and associated costs incurred to provide consulting services, training and product support. Cost of services and support revenue increased during fiscal 2014 as compared to fiscal 2013 primarily due to increases in compensation and related benefits driven by additional headcount and third-party fees related to training and consulting services provided to our customers. Cost of services and support revenue increased during fiscal 2013 as compared to fiscal 2012 primarily due to increases in third-party fees related to training and consulting services provided to our customers and compensation and related benefits driven by additional headcount, including headcount from our acquisition of Neolane in fiscal 2013. with the disposition of real estate property and other investment transactions. The Company’s recorded liabilities were $6 million at both December 31, 2008 and 2007 for indemnities, guarantees and commitments. In connection with synthetically created investment transactions, the Company writes credit default swap obligations that generally require payment of principal outstanding due in exchange for the referenced credit obligation. If a credit event, as defined by the contract, occurs the Company’s maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $1.9 billion at December 31, 2008. However, the Company believes that any actual future losses will be significantly lower than this amount. Additionally, the Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. As of December 31, 2008, the Company would have paid $37 million to terminate all of these contracts. Other Commitments MetLife Insurance Company of Connecticut is a member of the Federal Home Loan Bank of Boston (the “FHLB of Boston”) and holds $70 million of common stock of the FHLB of Boston at both December 31, 2008 and 2007, which is included in equity securities. MICC has also entered into funding agreements with the FHLB of Boston whereby MICC has issued such funding agreements in exchange for cash and for which the FHLB of Boston has been granted a blanket lien on certain MICC assets, including residential mortgage-backed securities, to collateralize MICC’s obligations under the funding agreements. MICC maintains control over these pledged assets, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by MICC, the FHLB of Boston’s recovery on the collateral is limited to the amount of MICC’s liability to the FHLB of Boston. The amount of the Company’s liability for funding agreements with the FHLB of Boston was $526 million and $726 million at December 31, 2008 and 2007, respectively, which is included in policyholder account balances. In addition, at December 31, 2008, MICC had advances of $300 million from the FHLB of Boston with original maturities of less than one year and therefore, such advances are included in short-term debt. These advances and the advances on these funding agreements are collateralized by mortgage-backed securities with estimated fair values of $1.3 billion and $901 million at December 31, 2008 and 2007, respectively. Metropolitan Life Insurance Company is a member of the FHLB of NY and holds $830 million and $339 million of common stock of the FHLB of NY at December 31, 2008 and 2007, respectively, which is included in equity securities. MLIC has also entered into funding agreements with the FHLB of NY whereby MLIC has issued such funding agreements in exchange for cash and for which the FHLB of NY has been granted a lien on certain MLIC assets, including residential mortgage-backed securities to collateralize MLIC’s obligations under the funding agreements. MLIC maintains control over these pledged assets, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by MLIC, the FHLB of NY’s recovery on the collateral is limited to the amount of MLIC’s liability to the FHLB of NY. The amount of the Company’s liability for funding agreements with the FHLB of NY was $15.2 billion and $4.6 billion at December 31, 2008 and 2007, respectively, which is included in policyholder account balances. The advances on these agreements are collateralized by mortgage-backed securities with estimated fair values of $17.8 billion and $4.8 billion at December 31, 2008 and 2007, respectively. MetLife Bank is a member of the FHLB of NY and holds $89 million and $64 million of common stock of the FHLB of NY at December 31, 2008 and 2007, respectively, which is included in equity securities. MetLife Bank has also entered into repurchase agreements with the FHLB of NY whereby MetLife Bank has issued repurchase agreements in exchange for cash and for which the FHLB of NY has been granted a blanket lien on MetLife Bank’s residential mortgages and mortgage-backed securities to collateralize MetLife Bank’s obligations under the repurchase agreements. MetLife Bank maintains control over these pledged assets, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. The repurchase agreements and the related security agreement represented by this blanket lien provide that upon any event of default by MetLife Bank, the FHLB of NY’s recovery is limited to the amount of MetLife Bank’s liability under the outstanding repurchase agreements. The amount of the Company’s liability for repurchase agreements with the FHLB of NY was $1.8 billion and $1.2 billion at December 31, 2008 and 2007, respectively, which is included in long-term debt and short-term debt depending on the original tenor of the advance. The advances on these repurchase agreements are collateralized by residential mortgagebacked securities and residential mortgage loans with estimated fair values of $3.1 billion and $1.3 billion at December 31, 2008 and 2007, respectively. Collateral for Securities Lending The Company has non-cash collateral for securities lending on deposit from customers, which cannot be sold or repledged, and which has not been recorded on its consolidated balance sheets. The amount of this collateral was $279 million and $40 million at December 31, 2008 and 2007, respectively. Goodwill Goodwill is the excess of cost over the estimated fair value of net assets acquired. Goodwill is not amortized but is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test. Impairment testing is performed using the fair value approach, which requires the use of estimates and judgment, at the “reporting unit” level. A reporting unit is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. Information regarding changes in goodwill is as follows:
<table><tr><td></td><td colspan="3"> December 31,</td></tr><tr><td></td><td>2008</td><td> 2007</td><td> 2006</td></tr><tr><td></td><td colspan="3"> (In millions)</td></tr><tr><td>Balance at beginning of the period,</td><td>$4,814</td><td>$4,801</td><td>$4,701</td></tr><tr><td>Acquisitions -1</td><td>256</td><td>2</td><td>93</td></tr><tr><td>Other, net -2</td><td>-62</td><td>11</td><td>7</td></tr><tr><td>Balance at the end of the period</td><td>$5,008</td><td>$4,814</td><td>$4,801</td></tr></table>
The Subsidiaries recognized no other postretirement benefit expense in 2008 as compared to $8 million in 2007 and $58 million in 2006. The major components of net periodic other postretirement benefit plan cost described above were as follows:
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td></td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td></td><td colspan="3">(In millions)</td></tr><tr><td>Service cost</td><td>$21</td><td>$27</td><td>$35</td></tr><tr><td>Interest cost</td><td>103</td><td>103</td><td>116</td></tr><tr><td>Expected return on plan assets</td><td>-86</td><td>-86</td><td>-79</td></tr><tr><td>Amortization of net actuarial (gains) losses</td><td>-1</td><td>—</td><td>22</td></tr><tr><td>Amortization of prior service cost (credit)</td><td>-37</td><td>-36</td><td>-36</td></tr><tr><td>Net periodic benefit cost</td><td>$—</td><td>$8</td><td>$58</td></tr></table>
The decrease in benefit cost from 2006 to 2007 primarily resulted from a change in the Medicare integration methodology for certain retirees. The decrease in benefit cost from 2007 to 2008 was due to primarily to increases in the discount rate and better than expected medical trend experience. For 2009 postretirement benefit expense, we anticipate an increase of approximately $25 million due to poor plan asset performance as a result of the economic downturn of the financial markets. The expected increase in expense can be attributed to lower expected return on assets and increased amortization of net actuarial losses. The estimated net actuarial losses and prior service credit for the other postretirement benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next year are less than $10 million and ($36) million, respectively. The weighted average discount rate used to calculate the net periodic postretirement cost was 6.65%, 6.00% and 5.82% for the years ended December 31, 2008, 2007 and 2006, respectively. The weighted average expected rate of return on plan assets used to calculate the net other postretirement benefit plan cost for the years ended December 31, 2008, 2007 and 2006 was 7.33%, 7.47% and 7.42%, respectively. The expected rate of return on plan assets is based on anticipated performance of the various asset sectors in which the plan invests, weighted by target allocation percentages. Anticipated future performance is based on long-term historical returns of the plan assets by sector, adjusted for the Subsidiaries’ longterm expectations on the performance of the markets. While the precise expected return derived using this approach will fluctuate from year to year, the Subsidiaries’ policy is to hold this long-term assumption constant as long as it remains within reasonable tolerance from the derived rate. Based on the December 31, 2008 asset balances, a 25 basis point increase (decrease) in the expected rate of return on plan assets would result in a decrease (increase) in net periodic benefit cost of $3 million for the other postretirement benefit plans. Funding and Cash Flows of Pension and Other Postretirement Benefit Plan Obligations Pension Plan Obligations It is the Subsidiaries’ practice to make contributions to the qualified pension plans to comply with minimum funding requirements of ERISA, as amended. In accordance with such practice, no contributions were required for the years ended December 31, 2008 or 2007. No contributions will be required for 2009. The Subsidiaries made a discretionary contribution of $300 million to the qualified pension plans during the year ended December 31, 2008. During the year ended December 31, 2007, the Subsidiaries did not make any discretionary contributions to the qualified pension plans. The Subsidiaries expect to make additional discretionary contributions of $150 million in 2009. Benefit payments due under the non-qualified pension plans are funded from the Subsidiaries’ general assets as they become due under the provision of the plans. These payments totaled $43 million and $48 million for the years ended December 31, 2008 and 2007, respectively. These benefit payments are expected to be at approximately the same level in 2009. Gross pension benefit payments for the next ten years, which reflect expected future service as appropriate, are expected to be as follows:
<table><tr><td></td><td> Pension Benefits (In millions)</td></tr><tr><td>2009</td><td>$384</td></tr><tr><td>2010</td><td>$398</td></tr><tr><td>2011</td><td>$408</td></tr><tr><td>2012</td><td>$424</td></tr><tr><td>2013</td><td>$437</td></tr><tr><td>2014-2018</td><td>$2,416</td></tr></table>
Other Postretirement Benefit Plan Obligations Other postretirement benefits represent a non-vested, non-guaranteed obligation of the Subsidiaries and current regulations do not require specific funding levels for these benefits. While the Subsidiaries have partially funded such plans in advance, it has been the Subsidiaries’ practice to primarily use their general assets, net of participants’ contributions, to pay postretirement medical claims as they come due in lieu of utilizing plan assets. Total payments equaled $149 million and $173 million for the years ended December 31, 2008 and 2007, respectively. The Subsidiaries’ expect to make contributions of $120 million, net of participants’ contributions, towards the other postretirement plan obligations in 2009. As noted previously, the Subsidiaries expect to receive subsidies under the Prescription Drug Act to partially offset such payments. Corporate Fixed Maturity Securities. The table below shows the major industry types that comprise the corporate fixed maturity holdings at:
<table><tr><td></td><td colspan="4"> December 31,</td></tr><tr><td></td><td colspan="2">2008</td><td colspan="2"> 2007</td></tr><tr><td></td><td> Estimated </td><td>% of</td><td> Estimated </td><td> % of </td></tr><tr><td></td><td> Fair Value</td><td>Total</td><td> Fair Value</td><td> Total</td></tr><tr><td></td><td colspan="4"> (In millions)</td></tr><tr><td>Foreign -1</td><td>$29,679</td><td>32.0%</td><td>$37,166</td><td>33.4%</td></tr><tr><td>Finance</td><td>14,996</td><td>16.1</td><td>20,639</td><td>18.6</td></tr><tr><td>Industrial</td><td>13,324</td><td>14.3</td><td>15,838</td><td>14.3</td></tr><tr><td>Consumer</td><td>13,122</td><td>14.1</td><td>15,793</td><td>14.2</td></tr><tr><td>Utility</td><td>12,434</td><td>13.4</td><td>13,206</td><td>11.9</td></tr><tr><td>Communications</td><td>5,714</td><td>6.1</td><td>7,679</td><td>6.9</td></tr><tr><td>Other</td><td>3,713</td><td>4.0</td><td>764</td><td>0.7</td></tr><tr><td>Total</td><td>$92,982</td><td>100.0%</td><td>$111,085</td><td>100.0%</td></tr></table>
(1) Includes U. S. dollar-denominated debt obligations of foreign obligors, and other fixed maturity foreign investments. The Company maintains a diversified corporate fixed maturity portfolio across industries and issuers. The portfolio does not have exposure to any single issuer in excess of 1% of the total invested assets of the portfolio. At December 31, 2008 and 2007, the Company’s combined holdings in the ten issuers to which it had the greatest exposure totaled $8.4 billion and $7.8 billion, respectively, the total of these ten issuers being less than 3% of the Company’s total invested assets at such dates. The exposure to the largest single issuer of corporate fixed maturity securities held at December 31, 2008 and 2007 was $1.5 billion and $1.2 billion, respectively. The Company has hedged all of its material exposure to foreign currency risk in its corporate fixed maturity portfolio. In the Company’s international insurance operations, both its assets and liabilities are generally denominated in local currencies. Structured Securities. The following table shows the types of structured securities the Company held at:
<table><tr><td></td><td colspan="4"> December 31,</td></tr><tr><td></td><td colspan="2">2008</td><td colspan="2"> 2007</td></tr><tr><td></td><td> Estimated </td><td>% of</td><td> Estimated </td><td> % of </td></tr><tr><td></td><td> Fair Value</td><td>Total</td><td> Fair Value</td><td> Total</td></tr><tr><td></td><td></td><td colspan="2"> (In millions)</td><td></td></tr><tr><td>Residential mortgage-backed securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Collateralized mortgage obligations</td><td>$26,025</td><td>44.0%</td><td>$36,303</td><td>44.0%</td></tr><tr><td>Pass-through securities</td><td>10,003</td><td>16.8</td><td>18,692</td><td>22.6</td></tr><tr><td>Total residential mortgage-backed securities</td><td>36,028</td><td>60.8</td><td>54,995</td><td>66.6</td></tr><tr><td>Commercial mortgage-backed securities</td><td>12,644</td><td>21.4</td><td>16,993</td><td>20.6</td></tr><tr><td>Asset-backed securities</td><td>10,523</td><td>17.8</td><td>10,572</td><td>12.8</td></tr><tr><td>Total</td><td>$59,195</td><td>100.0%</td><td>$82,560</td><td>100.0%</td></tr></table>
Collateralized mortgage obligations are a type of mortgage-backed security that creates separate pools or tranches of pass-through cash flows for different classes of bondholders with varying maturities. Pass-through mortgage-backed securities are a type of assetbacked security that is secured by a mortgage or collection of mortgages. The monthly mortgage payments from homeowners pass from the originating bank through an intermediary, such as a government agency or investment bank, which collects the payments, and for fee, remits or passes these payments through to the holders of the pass-through securities. Residential Mortgage-Backed Securities. At December 31, 2008, the exposures in the Company’s residential mortgage-backed securities portfolio consist of agency, prime, and alternative residential mortgage loans (“Alt-A”) securities of 68%, 23%, and 9% of the total holdings, respectively. At December 31, 2008 and 2007, $33.3 billion and $54.7 billion, respectively, or 92% and 99% respectively, of the residential mortgage-backed securities were rated Aaa/AAA by Moody’s, S&P or Fitch. The majority of the agency residential mortgagebacked securities are guaranteed or otherwise supported by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Government National Mortgage Association. Prime residential mortgage lending includes the origination of residential mortgage loans to the most credit-worthy customers with high quality credit profiles. Alt-A residential mortgage loans are a classification of mortgage loans where the risk profile of the borrower falls between prime and sub-prime. At December 31, 2008 and 2007, the Company’s Alt-A residential mortgage-backed securities exposure was $3.4 billion and $6.3 billion, respectively, with an unrealized loss of $1,963 million and $139 million, respectively. At December 31, 2008 and December 31, 2007, $2.1 billion and $6.3 billion, respectively, or 63% and 99%, respectively, of the Company’s Alt-A residential mortgage-backed securities were rated Aa/AA or better by Moody’s, S&P or Fitch; At December 31, 2008 the Company’s Alt-A holdings are distributed as follows: 23% 2007 vintage year, 25% 2006 vintage year; and 52% in the 2005 and prior vintage years. Vintage year refers to the year of origination and not to the year of purchase. In December 2008, certain Alt-A residential mortgage-backed securities experienced ratings downgrades from investment grade to below investment grade, contributing to the decrease year over year cited above in those securities rated Aa/AA or better. In January 2009 Moody’s revised its loss projections for Alt-A residential mortgage-backed securities, and the Company anticipates that Moody’s will be downgrading virtually all 2006 and 2007 vintage year Alt-A securities to below investment grade, which will increase the percentage of our Alt-A residential mortgage-backed securities portfolio that will be rated below investment grade. Our analysis suggests that Moody’s is applying essentially |
-0.99467 | What's the current growth rate of Purchase of minerals in-place? | APACHE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company recognizes over the requisite service period the fair value cost determined at the grant date based on numerous assumptions, including an estimate of the likelihood that Apache’s stock price will achieve these thresholds and the expected forfeiture rate. If a price target is not met before the end of the stated achievement period, any unamortized expense must be immediately recognized. Since the $162 interim price target of the 2008 Share Appreciation Program was not met prior to the stated achievement period, on December 31, 2010, Apache recognized $27 million of unamortized expense and $14 million of unamortized capital costs. The Company will recognize total expense and capitalized costs for the 2008 Share Appreciation Program of approximately $188 million through 2014. As of March 2011, the Company had recognized $79 million of total expense and capitalized costs for the 2005 Share Appreciation Program and had no unamortized costs remaining. A summary of the amounts recognized as expense and capitalized costs for each plan are detailed in the table below:
<table><tr><td></td><td colspan="3"> For the Year Ended December 31,</td></tr><tr><td></td><td> 2011</td><td> 2010</td><td> 2009</td></tr><tr><td></td><td colspan="3"> (In millions)</td></tr><tr><td> 2008 Share Appreciation Program</td><td></td><td></td><td></td></tr><tr><td>Compensation expense</td><td>$8</td><td>$49</td><td>$23</td></tr><tr><td>Compensation expense, net of tax</td><td>5</td><td>31</td><td>15</td></tr><tr><td>Capitalized costs</td><td>5</td><td>27</td><td>13</td></tr><tr><td> 2005 Share Appreciation Plan</td><td></td><td></td><td></td></tr><tr><td>Compensation expense</td><td>$1</td><td>$6</td><td>$6</td></tr><tr><td>Compensation expense, net of tax</td><td>1</td><td>4</td><td>4</td></tr><tr><td>Capitalized costs</td><td>1</td><td>3</td><td>3</td></tr></table>
Preferred Stock The Company has 10,000,000 shares of no par preferred stock authorized, of which 25,000 shares have been designated as Series A Junior Participating Preferred Stock (the Series A Preferred Stock) and 1.265 million shares as 6.00-percent Mandatory Convertible Preferred Stock, Series D (the Series D Preferred Stock). The Company redeemed the 100,000 outstanding shares of its 5.68 percent Series B Cumulative Preferred Stock (the Series B Preferred Stock) on December 30, 2009. Series A Preferred Stock In December 1995, the Company declared a dividend of one right (a Right) for each 2.31 shares (adjusted for subsequent stock dividends and a two-for-one stock split) of Apache common stock outstanding on January 31, 1996. Each full Right entitles the registered holder to purchase from the Company one ten-thousandth (1/10,000) of a share of Series A Preferred Stock at a price of $100 per one ten-thousandth of a share, subject to adjustment. The Rights are exercisable 10 calendar days following a public announcement that certain persons or groups have acquired 20 percent or more of the outstanding shares of Apache common stock or 10 business days following commencement of an offer for 30 percent or more of the outstanding shares of Apache’s outstanding common stock (flip in event); each Right will become exercisable for shares of Apache’s common stock at 50 percent of the then-market price of the common stock. If a 20-percent shareholder of Apache acquires Apache, by merger or otherwise, in a transaction where Apache does not survive or in which Apache’s common stock is changed or exchanged (flip over event), the Rights become exercisable for shares of the common stock of the Company acquiring Apache at 50 percent of the then-market price for Apache common stock. Any Rights that are or were beneficially owned by a person who has acquired 20 percent or more of the outstanding shares of Apache common stock and who engages in certain transactions or realizes the benefits of Shareholder Information Stock Data
<table><tr><td></td><td colspan="2"> Price Range</td><td colspan="2"> Dividends per Share</td></tr><tr><td></td><td> High</td><td> Low</td><td> Declared</td><td> Paid</td></tr><tr><td>2011</td><td></td><td></td><td></td><td></td></tr><tr><td>First Quarter</td><td>$132.50</td><td>$110.29</td><td>$0.15</td><td>$0.15</td></tr><tr><td>Second Quarter</td><td>134.13</td><td>114.94</td><td>0.15</td><td>0.15</td></tr><tr><td>Third Quarter</td><td>129.26</td><td>80.05</td><td>0.15</td><td>0.15</td></tr><tr><td>Fourth Quarter</td><td>105.64</td><td>73.04</td><td>0.15</td><td>0.15</td></tr><tr><td>2010</td><td></td><td></td><td></td><td></td></tr><tr><td>First Quarter</td><td>$108.92</td><td>$95.15</td><td>$0.15</td><td>$0.15</td></tr><tr><td>Second Quarter</td><td>111.00</td><td>83.55</td><td>0.15</td><td>0.15</td></tr><tr><td>Third Quarter</td><td>99.09</td><td>81.94</td><td>0.15</td><td>0.15</td></tr><tr><td>Fourth Quarter</td><td>120.80</td><td>96.51</td><td>0.15</td><td>0.15</td></tr></table>
The Company has paid cash dividends on its common stock for 47 consecutive years through December 31, 2011. Future dividend payments will depend upon the Company’s level of earnings, financial requirements and other relevant factors. Apache common stock is listed on the New York and Chicago stock exchanges and the NASDAQ National Market (symbol APA). At December 31, 2011, the Company’s shares of common stock outstanding were held by approximately 5,600 shareholders of record and 444,000 beneficial owners. Also listed on the New York Stock Exchange are: ? Apache Depositary Shares (symbol APA/PD), each representing a 1/20th interest in Apache’s 6% Mandatory Convertible Preferred Stock, Series D ? Apache Finance Canada’s 7.75% notes, due 2029 (symbol APA/29) Corporate Offices One Post Oak Central 2000 Post Oak Boulevard Suite 100 Houston, Texas 77056-4400 (713) 296-6000 Independent Public Accountants Ernst & Young LLP Five Houston Center 1401 McKinney Street, Suite 1200 Houston, Texas 77010-2007 Stock Transfer Agent and Registrar Wells Fargo Bank, N. A. Attn: Shareowner Services P. O. Box 64854 South St. Paul, Minnesota 55164-0854 (651) 450-4064 or (800) 468-9716 Communications concerning the transfer of shares, lost certificates, dividend checks, duplicate mailings, or change of address should be directed to the stock transfer agent. Shareholders can access account information on the web site: www. shareowneronline. com Dividend Reinvestment Plan Shareholders of record may invest their dividends automatically in additional shares of Apache common stock at the market price. Participants may also invest up to an additional $25,000 in Apache shares each quarter through this service. All bank service fees and brokerage commissions on purchases are paid by Apache. A prospectus describing the terms of the Plan and an authorization form may be obtained from the Company’s stock transfer agent, Wells Fargo Bank, N. A. Direct Registration Shareholders of record may hold their shares of Apache common stock in book-entry form. This eliminates costs related to safekeeping or replacing paper stock certificates. In addition, shareholders of record may request electronic movement of book-entry shares between your account with the Company’s stock transfer agent and your broker. Stock certificates may be converted to book-entry shares at any time. Questions regarding this service may be directed to the Company’s stock transfer agent, Wells Fargo Bank, N. A. Annual Meeting Apache will hold its annual meeting of shareholders on Thursday, May 24, 2012, at 10:00 a. m. in the Ballroom, Hilton Houston Post Oak, 2001 Post Oak Boulevard, Houston, Texas. Apache plans to web cast the annual meeting live; connect through the Apache web site: www. apachecorp. com Stock Held in “Street Name” The Company maintains a direct mailing list to ensure that shareholders with stock held in brokerage accounts receive information on a timely basis. Shareholders wanting to be added to this list should direct their requests to Apache’s Public and International Affairs Department, 2000 Post Oak Boulevard, Suite 100, Houston, Texas, 77056-4400, by calling (713) 296-6157 or by registering on Apache’s web site: www. apachecorp. com Form 10-K Request Shareholders and other persons interested in obtaining, without cost, a copy of the Company’s Form 10-K filed with the Securities and Exchange Commission may do so by writing to Cheri L. Peper, Corporate Secretary, 2000 Post Oak Boulevard, Suite 100, Houston, Texas, 77056-4400. Investor Relations Shareholders, brokers, securities analysts, or portfolio managers seeking information about the Company are welcome to contact Patrick Cassidy, Investor Relations Director, at (713) 296-6100. Members of the news media and others seeking information about the Company should contact Apache’s Public and International Affairs Department at (713) 296-7276. Web site: www. apachecorp. com APACHE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production and timing of development expenditures. The reserve data in the following tables only represent estimates and should not be construed as being exact.
<table><tr><td></td><td colspan="7">Crude Oil and Condensate (Thousands of barrels)</td></tr><tr><td></td><td>United States</td><td>Canada</td><td>Egypt-1</td><td>Australia</td><td>North Sea</td><td>Argentina</td><td>Total-1</td></tr><tr><td> Proved developed reserves:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>December 31, 2010</td><td>422,737</td><td>90,292</td><td>109,657</td><td>48,072</td><td>115,705</td><td>16,583</td><td>803,046</td></tr><tr><td>December 31, 2011</td><td>428,251</td><td>81,846</td><td>105,840</td><td>35,725</td><td>136,990</td><td>16,001</td><td>804,653</td></tr><tr><td>December 31, 2012</td><td>474,837</td><td>79,695</td><td>106,746</td><td>29,053</td><td>119,635</td><td>15,845</td><td>825,811</td></tr><tr><td>December 31, 2013</td><td>457,981</td><td>80,526</td><td>119,242</td><td>22,524</td><td>100,327</td><td>14,195</td><td>794,795</td></tr><tr><td> Proved undeveloped reserves:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>December 31, 2010</td><td>214,117</td><td>56,855</td><td>17,470</td><td>18,064</td><td>38,663</td><td>4,062</td><td>349,231</td></tr><tr><td>December 31, 2011</td><td>205,763</td><td>59,746</td><td>22,195</td><td>32,220</td><td>32,415</td><td>4,585</td><td>356,924</td></tr><tr><td>December 31, 2012</td><td>203,068</td><td>70,650</td><td>17,288</td><td>34,808</td><td>28,019</td><td>2,981</td><td>356,814</td></tr><tr><td>December 31, 2013</td><td>195,835</td><td>56,366</td><td>16,302</td><td>36,703</td><td>29,253</td><td>2,231</td><td>336,690</td></tr><tr><td> Total proved reserves:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance December 31, 2010</td><td>636,855</td><td>147,146</td><td>127,127</td><td>66,136</td><td>154,368</td><td>20,645</td><td>1,152,277</td></tr><tr><td>Extensions, discoveries and other additions</td><td>45,676</td><td>16,712</td><td>45,021</td><td>15,762</td><td>332</td><td>3,230</td><td>126,733</td></tr><tr><td>Purchase of minerals in-place</td><td>5,097</td><td>705</td><td>—</td><td>—</td><td>34,612</td><td>—</td><td>40,414</td></tr><tr><td>Revisions of previous estimates</td><td>-8,904</td><td>-17,117</td><td>-6,185</td><td>—</td><td>—</td><td>215</td><td>-31,991</td></tr><tr><td>Production</td><td>-43,587</td><td>-5,202</td><td>-37,928</td><td>-13,953</td><td>-19,907</td><td>-3,503</td><td>-124,080</td></tr><tr><td>Sale of properties</td><td>-1,123</td><td>-653</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-1,776</td></tr><tr><td>Balance December 31, 2011</td><td>634,014</td><td>141,591</td><td>128,035</td><td>67,945</td><td>169,405</td><td>20,587</td><td>1,161,577</td></tr><tr><td>Extensions, discoveries and other additions</td><td>84,656</td><td>18,935</td><td>36,188</td><td>6,277</td><td>346</td><td>1,133</td><td>147,535</td></tr><tr><td>Purchase of minerals in-place</td><td>15,942</td><td>188</td><td>—</td><td>276</td><td>2,143</td><td>—</td><td>18,549</td></tr><tr><td>Revisions of previous estimates</td><td>-7,474</td><td>-4,577</td><td>-3,678</td><td>-66</td><td>-928</td><td>671</td><td>-16,052</td></tr><tr><td>Production</td><td>-49,089</td><td>-5,792</td><td>-36,511</td><td>-10,571</td><td>-23,312</td><td>-3,565</td><td>-128,840</td></tr><tr><td>Sale of properties</td><td>-144</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-144</td></tr><tr><td>Balance December 31, 2012</td><td>677,905</td><td>150,345</td><td>124,034</td><td>63,861</td><td>147,654</td><td>18,826</td><td>1,182,625</td></tr><tr><td>Extensions, discoveries and other additions</td><td>133,227</td><td>10,177</td><td>43,738</td><td>2,539</td><td>1,543</td><td>998</td><td>192,222</td></tr><tr><td>Purchase of minerals in-place</td><td>85</td><td>—</td><td>5</td><td>—</td><td>3,623</td><td>—</td><td>3,713</td></tr><tr><td>Revisions of previous estimates</td><td>1,683</td><td>-531</td><td>457</td><td>-118</td><td>18</td><td>24</td><td>1,533</td></tr><tr><td>Production</td><td>-53,621</td><td>-6,469</td><td>-32,690</td><td>-7,055</td><td>-23,258</td><td>-3,422</td><td>-126,515</td></tr><tr><td>Sale of properties</td><td>-105,463</td><td>-16,630</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-122,093</td></tr><tr><td>Balance December 31, 2013</td><td>653,816</td><td>136,892</td><td>135,544</td><td>59,227</td><td>129,580</td><td>16,426</td><td>1,131,485</td></tr></table>
(1) 2013 includes proved reserves of 45 MMbbls as of December 31, 2013 attributable to a noncontrolling interest in Egypt. until the hedged transaction is recognized in earnings. Changes in the fair value of the derivatives that are attributable to the ineffective portion of the hedges, or of derivatives that are not considered to be highly effective hedges, if any, are immediately recognized in earnings. The aggregate notional amount of our outstanding foreign currency hedges at December 31, 2012 and 2011 was $1.3 billion and $1.7 billion. The aggregate notional amount of our outstanding interest rate swaps at December 31, 2012 and 2011 was $503 million and $450 million. Derivative instruments did not have a material impact on net earnings and comprehensive income during 2012, 2011, and 2010. Substantially all of our derivatives are designated for hedge accounting. See Note 15 for more information on the fair value measurements related to our derivative instruments. Stock-based compensation – Compensation cost related to all share-based payments including stock options and restricted stock units is measured at the grant date based on the estimated fair value of the award. We generally recognize the compensation cost ratably over a three-year vesting period. Income taxes – We periodically assess our tax filing exposures related to periods that are open to examination. Based on the latest available information, we evaluate our tax positions to determine whether the position will more likely than not be sustained upon examination by the Internal Revenue Service (IRS). If we cannot reach a more-likely-than-not determination, no benefit is recorded. If we determine that the tax position is more likely than not to be sustained, we record the largest amount of benefit that is more likely than not to be realized when the tax position is settled. We record interest and penalties related to income taxes as a component of income tax expense on our Statements of Earnings. Interest and penalties are not material. Accumulated other comprehensive loss – Changes in the balance of accumulated other comprehensive loss, net of income taxes, consisted of the following (in millions): |
0.85002 | What is the proportion of all Unaffiliated customers that are greater than 2000 to the total amount of Unaffiliated customers, in 2010? (in %) | <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). |
2 | Between Total Coal and Nuclear Sales (MW) and Total Forward Hedged Revenues,how many elements in 2018 are lower than the previous year? | THE HERSHEY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) The 2006 charges (credits) relating to previous business realignment initiatives which began in 2003 and 2001 resulted from the finalization of the sale of certain properties, adjustments to liabilities which had previously been recorded, and the impact of the settlement of litigation in connection with the 2003 business realignment initiatives. Liabilities Associated with Business Realignment Initiatives The liability balance as of December 31, 2008 relating to the 2007 business realignment initiatives was $31.0 million for employee separation costs to be paid primarily in 2009. The liability balance as of December 31, 2007 was $68.4 million, primarily related to employee separation costs. Charges for employee separation and contract termination costs of $12.9 million were recorded in 2008. During 2008 and 2007, we made payments against the liabilities recorded for the 2007 business realignment initiatives of $46.9 million and $13.2 million, respectively, principally related to employee separation and project administration. The liability balance as of December 31, 2008 was reduced by $3.4 million as a result of foreign currency translation adjustments.4. COMMITMENTS AND CONTINGENCIES We enter into certain obligations for the purchase of raw materials. These obligations are primarily in the form of forward contracts for the purchase of raw materials from third-party brokers and dealers. These contracts minimize the effect of future price fluctuations by fixing the price of part or all of these purchase obligations. Total obligations for each year consisted of fixed price contracts for the purchase of commodities and unpriced contracts that were valued using market prices as of December 31, 2008. The cost of commodities associated with the unpriced contracts is variable as market prices change over future periods. We mitigate the variability of these costs to the extent that we have entered into commodities futures and options contracts to hedge our costs for those periods. Increases or decreases in market prices are offset by gains or losses on commodities futures contracts. Taking delivery of and making payments for the specific commodities for use in the manufacture of finished goods satisfies our obligations under the forward purchase contracts. For each of the three years in the period ended December 31, 2008, we satisfied these obligations by taking delivery of and making payment for the specific commodities. As of December 31, 2008, we had entered into purchase agreements with various suppliers. Subject to meeting our Company’s quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2008:
<table><tr><td> Obligations</td><td> 2009</td><td> 2010</td><td> 2011</td><td> 2012</td></tr><tr><td> In millions of dollars</td><td></td><td></td><td></td><td></td></tr><tr><td>Purchase obligations</td><td>$1,103.4</td><td>$492.4</td><td>$122.1</td><td>$84.9</td></tr></table>
We have commitments under various operating leases. Future minimum payments under non-cancelable operating leases with a remaining term in excess of one year were as follows as of December 31, 2008:
<table><tr><td> Lease Commitments</td><td> 2009</td><td> 2010</td><td> 2011</td><td> 2012</td><td> 2013</td><td> Thereafter</td></tr><tr><td> In millions of dollars</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Future minimum rental payments</td><td>$14.9</td><td>$11.2</td><td>$8.9</td><td>$8.0</td><td>$4.3</td><td>$13.9</td></tr></table>
Our Company has a number of facilities that contain varying amounts of asbestos in certain locations within the facilities. Our asbestos management program is compliant with current applicable regulations. Current regulations require that we handle or dispose of this type of asbestos in a special manner if such facilities undergo major renovations or are demolished. We believe we do not have sufficient information to estimate the Commercial Operations Overview NRG seeks to maximize profitability and manage cash flow volatility through the marketing, trading and sale of energy, capacity and ancillary services into spot, intermediate and long-term markets and through the active management and trading of emissions allowances, fuel supplies and transportation-related services. The Company's principal objectives are the realization of the full market value of its asset base, including the capture of its extrinsic value, the management and mitigation of commodity market risk and the reduction of cash flow volatility over time. NRG enters into power sales and hedging arrangements via a wide range of products and contracts, including PPAs, fuel supply contracts, capacity auctions, natural gas derivative instruments and other financial instruments. In addition, because changes in power prices in the markets where NRG operates are generally correlated to changes in natural gas prices, NRG uses hedging strategies that may include power and natural gas forward sales contracts to manage the commodity price risk primarily associated with the Company's coal and nuclear generation assets. The objective of these hedging strategies is to stabilize the cash flow generated by NRG's portfolio of assets. NRG also trades electric power, natural gas and related commodity and financial products, including forwards, futures, options and swaps, through its ownership of BETM, which is also an energy management service provider for primarily thirdparty generating assets. Certain other NRG entities trade to a lesser extent, utilizing similar products as well as oil and weather products. The Company seeks to generate profits from volatility in the price of electricity, capacity, fuels and transmission congestion by buying and selling contracts in wholesale markets under guidelines approved by the Company's risk management committee. Coal and Nuclear Operations The following table summarizes NRG's U. S. coal and nuclear capacity and the corresponding revenues and average natural gas prices and positions resulting from coal and nuclear hedge agreements extending beyond December 31, 2015, and through 2019 for the Company's Gulf Coast region:
<table><tr><td>Gulf Coast</td><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>AnnualAverage for2016-2019</td></tr><tr><td></td><td colspan="5">(Dollars in millions unless otherwise stated)</td></tr><tr><td>Net Coal and Nuclear Capacity (MW)<sup>(a)</sup></td><td>6,290</td><td>6,290</td><td>6,290</td><td>6,290</td><td>6,290</td></tr><tr><td>Forecasted Coal and Nuclear Capacity (MW)<sup>(b)</sup></td><td>4,843</td><td>4,850</td><td>4,692</td><td>4,881</td><td>4,817</td></tr><tr><td>Total Coal and Nuclear Sales (MW)<sup>(c)</sup></td><td>5,108</td><td>2,017</td><td>1,171</td><td>1,018</td><td>2,329</td></tr><tr><td>Percentage Coal and Nuclear Capacity Sold Forward<sup>(d)</sup></td><td>105%</td><td>42%</td><td>25%</td><td>21%</td><td>48%</td></tr><tr><td>Total Forward Hedged Revenues<sup>(e)</sup></td><td>$1,876</td><td>$716</td><td>$470</td><td>$446</td><td></td></tr><tr><td>Weighted Average Hedged Price ($ per MWh)<sup>(e)</sup></td><td>$41.80</td><td>$40.54</td><td>$45.84</td><td>$50.05</td><td></td></tr><tr><td>Average Equivalent Natural Gas Price ($ per MMBtu)<sup>(e)</sup></td><td>$3.51</td><td>$3.66</td><td>$4.12</td><td>$4.43</td><td></td></tr><tr><td>Gas Price Sensitivity Up $0.50/MMBtu on Coal and Nuclear Units</td><td>$-37</td><td>$139</td><td>$172</td><td>$190</td><td></td></tr><tr><td>Gas Price Sensitivity Down $0.50/MMBtu on Coal and Nuclear Units</td><td>$24</td><td>$-141</td><td>$-157</td><td>$-171</td><td></td></tr><tr><td>Heat Rate Sensitivity Up 1 MMBtu/MWh on Coal and Nuclear Units</td><td>$15</td><td>$86</td><td>$83</td><td>$97</td><td></td></tr><tr><td>Heat Rate Sensitivity Down 1 MMBtu/MWh on Coal and Nuclear Units</td><td>$-2</td><td>$-77</td><td>$-74</td><td>$-86</td><td></td></tr></table>
(a) Net coal and nuclear capacity represents nominal summer net MW capacity of power generated as adjusted for the Company's ownership position excluding capacity from inactive/mothballed units, see Item 2 - Properties for units scheduled to be deactivated. (b) Forecasted generation dispatch output (MWh) based on forward price curves as of December 31, 2015, which is then divided by number of hours in a given year to arrive at MW capacity. The dispatch takes into account planned and unplanned outage assumptions. (c) Includes amounts under power sales contracts and natural gas hedges. The forward natural gas quantities are reflected in equivalent MWh based on forward market implied heat rate as of December 31, 2015, and then combined with power sales to arrive at equivalent MWh hedged which is then divided by number of hours in a given year to arrive at MW hedged. The coal and nuclear sales include swaps and delta of options sold which is subject to change. For detailed information on the Company's hedging methodology through use of derivative instruments, see discussion in Item 15 - Note 5, Accounting for Derivative Instruments and Hedging Activities, to the Consolidated Financial Statements. Includes inter-segment sales from the Company's wholesale power generation business to the retail business. (d) Percentage hedged is based on total coal and nuclear sales as described in (c) above divided by the forecasted coal and nuclear capacity. (e) Represents U. S. coal and nuclear sales, including energy revenue and demand charges. Interest Expense – Interest expense increased in 2014 versus 2013 due to an increased weightedaverage debt level of $10.8 billion in 2014 from $9.6 billion in 2013, which more than offset the impact of the lower effective interest rate of 5.3% in 2014 versus 5.7% in 2013. Interest expense decreased in 2013 versus 2012 due to a lower effective interest rate of 5.7% in 2013 versus 6.0% in 2012. The increase in the weighted-average debt level to $9.6 billion in 2013 from $9.1 billion in 2012 partially offset the impact of the lower effective interest rate. Income Taxes – Higher pre-tax income increased income taxes in 2014 compared to 2013. Our effective tax rate for 2014 was 37.9% compared to 37.7% in 2013. Higher pre-tax income increased income taxes in 2013 compared to 2012. Our effective tax rate for 2013 was 37.7% compared to 37.6% in 2012. OTHER OPERATING/PERFORMANCE AND FINANCIAL STATISTICS We report a number of key performance measures weekly to the Association of American Railroads (AAR). We provide this data on our website at www. up. com/investor/aar-stb_reports/index. htm. Operating/Performance Statistics Railroad performance measures are included in the table below:
<table><tr><td></td><td><i>2014</i></td><td><i>2013</i></td><td><i>2012</i></td><td><i>% Change</i> <i>2014 v 2013</i></td><td><i>% Change</i><i>2013 v 2012</i></td></tr><tr><td>Average train speed (miles per hour)</td><td>24.0</td><td>26.0</td><td>26.5</td><td>-8%</td><td>-2%</td></tr><tr><td>Average terminal dwell time (hours)</td><td>30.3</td><td>27.1</td><td>26.2</td><td>12 %</td><td>3 %</td></tr><tr><td>Gross ton-miles (billions)</td><td>1,014.9</td><td>949.1</td><td>959.3</td><td>7 %</td><td>-1%</td></tr><tr><td>Revenue ton-miles (billions)</td><td>549.6</td><td>514.3</td><td>521.1</td><td>7 %</td><td>-1%</td></tr><tr><td>Operating ratio</td><td>63.5</td><td>66.1</td><td>67.8</td><td>-2.6pts</td><td>-1.7pts</td></tr><tr><td>Employees (average)</td><td>47,201</td><td>46,445</td><td>45,928</td><td>2 %</td><td>1 %</td></tr></table>
Average Train Speed – Average train speed is calculated by dividing train miles by hours operated on our main lines between terminals. Average train speed, as reported to the Association of American Railroads, decreased 8% in 2014 versus 2013. The decline was driven by a 7% volume increase, a major infrastructure project in Fort Worth, Texas and inclement weather, including flooding in the Midwest in the second quarter and severe weather conditions in the first quarter that impacted all major U. S. and Canadian railroads. Average train speed decreased 2% in 2013 versus 2012. The decline was driven by severe weather conditions and shifts of traffic to sections of our network with higher utilization. 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 12% in 2014 compared to 2013, caused by higher volumes and inclement weather. Average terminal dwell time increased 3% in 2013 compared to 2012, primarily due to growth of manifest traffic which requires more time in terminals for switching cars and building trains. 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 ton-miles, revenue ton-miles and carloadings all increased 7% in 2014 compared to 2013. Gross ton-miles and revenue ton-miles declined 1% in 2013 compared to 2012 and carloads remained relatively flat driven by declines in coal and agricultural products offset by growth in chemical, autos and industrial products. Changes in commodity mix drove the year-over-year variances between gross tonmiles, revenue ton-miles and carloads. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in millions):
<table><tr><td></td><td colspan="3">For the Years Ended December 31,</td></tr><tr><td></td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Balance at January 1</td><td>$649.3</td><td>$591.9</td><td>$321.7</td></tr><tr><td>Increases related to business combinations</td><td>70.2</td><td>70.2</td><td>247.6</td></tr><tr><td>Increases related to prior periods</td><td>172.8</td><td>36.7</td><td>1.3</td></tr><tr><td>Decreases related to prior periods</td><td>-262.2</td><td>-94.7</td><td>-</td></tr><tr><td>Increases related to current period</td><td>24.8</td><td>53.0</td><td>25.7</td></tr><tr><td>Decreases related to settlements with taxingauthorities</td><td>-21.7</td><td>-3.2</td><td>-1.4</td></tr><tr><td>Decreases related to lapse of statute of limitations</td><td>-6.4</td><td>-4.6</td><td>-3.0</td></tr><tr><td>Balance at December 31</td><td>$626.8</td><td>$649.3</td><td>$591.9</td></tr><tr><td>Amounts impacting effective tax rate, if recognizedbalance at December 31</td><td>$499.6</td><td>$511.5</td><td>$443.7</td></tr></table>
We recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense. During 2017, we released interest and penalties of $38.3 million, and as of December 31, 2017, had a recognized liability for interest and penalties of $75.7 million, which included an increase of $3.0 million from December 31, 2016 related to business combinations. During 2016, we accrued interest and penalties of $19.3 million, and as of December 31, 2016, had recognized a liability for interest and penalties of $110.8 million, which included an $8.6 million increase from December 31, 2015 related to the Biomet merger. During 2015, we accrued interest and penalties of $4.8 million, and as of December 31, 2015, had recognized a liability for interest and penalties of $82.9 million, which included an increase of $29.8 million from December 31, 2014 related to the Biomet merger. We operate on a global basis and are subject to numerous and complex tax laws and regulations. Additionally, tax laws have and continue to undergo rapid changes in both application and interpretation by various countries, including state aid interpretations and the Organization for Economic Cooperation and Development led initiatives. Our income tax filings are subject to examinations by taxing authorities throughout the world. Income tax audits may require an extended period of time to reach resolution and may result in significant income tax adjustments when interpretation of tax laws or allocation of company profits is disputed. Although ultimate timing is uncertain, the net amount of tax liability for unrecognized tax benefits may change within the next twelve months due to changes in audit status, expiration of statutes of limitations, settlements of tax assessments and other events. Management’s best estimate of such change is within the range of a $115 million decrease to a $25 million increase. Our U. S. Federal income tax returns have been audited through 2009 and are currently under audit for years 2010- 2015. The IRS has proposed adjustments for years 2005-2012, reallocating profits between certain of our U. S. and foreign subsidiaries. We have disputed these adjustments and intend to continue to vigorously defend our positions. For years 2005- 2007, we have filed a petition with the U. S. Tax Court. For years 2008-2009, we are pursuing resolution through the IRS Administrative Appeals Process. State income tax returns are generally subject to examination for a period of 3 to 5 years after filing of the respective return. The state impact of any federal changes generally remains subject to examination by various states for a period of up to one year after formal notification to the states. We have various state income tax return positions in the process of examination, administrative appeals or litigation. In other major jurisdictions, open years are generally 2009 or later.16. Capital Stock and Earnings per Share We are authorized to issue 250.0 million shares of preferred stock, none of which were issued or outstanding as of December 31, 2017. The numerator for both basic and diluted earnings per share is net earnings available to common stockholders. The denominator for basic earnings per share is the weighted average number of common shares outstanding during the period. The denominator for diluted earnings per share is weighted average shares outstanding adjusted for the effect of dilutive stock options and other equity awards. The following is a reconciliation of weighted average shares for the basic and diluted share computations (in millions): |
9,172 | What's the total value of all elements that are in the range of 1000 and 3000 for Fair of Total? | Commercial Paper and Revolving Credit Facility The table below details the Company’s short-term debt programs and the applicable balances outstanding
<table><tr><td></td><td> Effective</td><td> Expiration</td><td colspan="2"> Maximum Available As of December 31,</td><td colspan="4"> Outstanding As of December 31,</td></tr><tr><td> Description</td><td> Date</td><td> Date</td><td> 2011</td><td> 2010</td><td colspan="2"> 2011</td><td colspan="2"> 2010</td></tr><tr><td> Commercial Paper</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>The Hartford</td><td>11/10/86</td><td>N/A</td><td>$2,000</td><td>$2,000</td><td></td><td>$—</td><td></td><td>$—</td></tr><tr><td> Revolving Credit Facility</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>5-year revolving credit facility [1]</td><td>8/9/07</td><td>8/9/12</td><td>1,900</td><td>1,900</td><td></td><td>—</td><td></td><td>—</td></tr><tr><td> Total Commercial Paper and RevolvingCredit Facility</td><td></td><td></td><td>$3,900</td><td>$3,900</td><td> $</td><td> —</td><td> $</td><td>—</td></tr></table>
[1] Terminated in January 2012, see discussion that follows. While The Hartford’s maximum borrowings available under its commercial paper program are $2.0 billion, the Company is dependent upon market conditions to access short-term financing through the issuance of commercial paper to investors. As of December 31, 2011, the Company has no commercial paper outstanding. In January 2012, the Company entered into a senior unsecured revolving credit facility (the “Credit Facility”) that provides for borrowing capacity up to $1.75 billion (which is available in U. S. dollars, and in Euro, Sterling, Canadian dollars and Japanese Yen) through January 6, 2016 and terminated its $1.9 billion unsecured revolving credit facility due August 9, 2012. As of December 31, 2011, the Company was in compliance with all financial covenants under the terminated credit facility. Of the total availability under the Credit Facility, up to $250 is available to support letters of credit issued on behalf of the Company or subsidiaries of the Company. Under the Credit Facility, the Company must maintain a minimum level of consolidated net worth of $16 billion. The minimum level of consolidated net worth, as defined, will be adjusted in the first quarter of 2012 upon the adoption of a new DAC accounting standard, see Note 1 of the Notes to Consolidated Financial Statements, by the lesser of approximately $1.0 billion, after-tax representing 70% of the adoption-related estimated DAC charge, or $1.7 billion. The definition of consolidated net worth under the terms of the credit facility excludes AOCI and includes the Company’s outstanding junior subordinated debentures and perpetual preferred securities, net of discount. In addition, the Company’s maximum ratio of consolidated total debt to consolidated total capitalization is 35%, and the ratio of consolidated total debt of subsidiaries to consolidated total capitalization is limited to 10%. The Company will certify compliance with the financial covenants for the syndicate of participating financial institutions on a quarterly basis. The Hartford’s Japan operations also maintain two lines of credit in support of operations. Both lines of credit are in the amount of $65, or ￥5 billion, and individually have expiration dates of September 30, 2012 and January 3, 2013. Derivative Commitments Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings of the individual legal entity that entered into the derivative agreement as set by nationally recognized statistical rating agencies. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and in certain instances demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement. The settlement amount is determined by netting the derivative positions transacted under each agreement. If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of December 31, 2011, is $725. Of this $725 the legal entities have posted collateral of $716 in the normal course of business. Based on derivative market values as of December 31, 2011, a downgrade of one level below the current financial strength ratings by either Moody’s or S&P could require approximately an additional $37 to be posted as collateral. Based on derivative market values as of December 31, 2011, a downgrade by either Moody’s or S&P of two levels below the legal entities’ current financial strength ratings could require approximately an additional $48 of assets to be posted as collateral. These collateral amounts could change as derivative market values change, as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated. The nature of the collateral that we would post, if required, would be primarily in the form of U. S. Treasury bills and U. S. Treasury notes. The aggregate notional amount of derivative relationships that could be subject to immediate termination in the event of rating agency downgrades to either BBB+ or Baa1 as of December 31, 2011 was $14.5 billion with a corresponding fair value of $418. The notional and fair value amounts include a customized GMWB derivative with a notional amount of $4.2 billion and a fair value of $207, for which the Company has a contractual right to make a collateral payment in the amount of approximately $45 to prevent its termination. This customized GMWB derivative contains an early termination trigger such that if the unsecured, unsubordinated debt of the counterparty’s related party guarantor is downgraded two levels or more below the current ratings by Moody’s and one or more levels by S&P, the counterparty could terminate all transactions under the applicable International Swaps and Derivatives Association Master Agreement. As of December 31, 2011, the gross fair value of the affected derivative contracts is $223, which would approximate the settlement value. THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Investments and Derivative Instruments (continued) Security Unrealized Loss Aging The following tables present the Company’s unrealized loss aging for AFS securities by type and length of time the security was in a continuous unrealized loss position.
<table><tr><td></td><td colspan="9">December 31, 2011</td></tr><tr><td></td><td colspan="3">Less Than 12 Months</td><td colspan="3">12 Months or More</td><td colspan="3">Total</td></tr><tr><td></td><td> Amortized</td><td> Fair</td><td>Unrealized</td><td> Amortized</td><td> Fair</td><td>Unrealized</td><td> Amortized</td><td> Fair</td><td>Unrealized</td></tr><tr><td></td><td> Cost</td><td> Value</td><td>Losses</td><td> Cost</td><td> Value</td><td>Losses</td><td> Cost</td><td> Value</td><td>Losses</td></tr><tr><td>ABS</td><td>$629</td><td>$594</td><td>$-35</td><td>$1,169</td><td>$872</td><td>$-297</td><td>$1,798</td><td>$1,466</td><td>$-332</td></tr><tr><td>CDOs</td><td>81</td><td>59</td><td>-22</td><td>2,709</td><td>2,383</td><td>-326</td><td>2,790</td><td>2,442</td><td>-348</td></tr><tr><td>CMBS</td><td>1,297</td><td>1,194</td><td>-103</td><td>2,144</td><td>1,735</td><td>-409</td><td>3,441</td><td>2,929</td><td>-512</td></tr><tr><td>Corporate [1]</td><td>4,388</td><td>4,219</td><td>-169</td><td>3,268</td><td>2,627</td><td>-570</td><td>7,656</td><td>6,846</td><td>-739</td></tr><tr><td>Foreign govt./govt. agencies</td><td>218</td><td>212</td><td>-6</td><td>51</td><td>47</td><td>-4</td><td>269</td><td>259</td><td>-10</td></tr><tr><td>Municipal</td><td>299</td><td>294</td><td>-5</td><td>627</td><td>560</td><td>-67</td><td>926</td><td>854</td><td>-72</td></tr><tr><td>RMBS</td><td>415</td><td>330</td><td>-85</td><td>1,206</td><td>835</td><td>-371</td><td>1,621</td><td>1,165</td><td>-456</td></tr><tr><td>U.S. Treasuries</td><td>343</td><td>341</td><td>-2</td><td>—</td><td>—</td><td>—</td><td>343</td><td>341</td><td>-2</td></tr><tr><td> Total fixed maturities</td><td>7,670</td><td>7,243</td><td>-427</td><td>11,174</td><td>9,059</td><td>-2,044</td><td>18,844</td><td>16,302</td><td>-2,471</td></tr><tr><td>Equity securities</td><td>167</td><td>138</td><td>-29</td><td>439</td><td>265</td><td>-174</td><td>606</td><td>403</td><td>-203</td></tr><tr><td> Total securities in an unrealized loss</td><td>$7,837</td><td>$7,381</td><td>$-456</td><td>$11,613</td><td>$9,324</td><td>$-2,218</td><td>$19,450</td><td>$16,705</td><td>$-2,674</td></tr></table>
December 31, 2010
<table><tr><td></td><td colspan="9">December 31, 2010</td></tr><tr><td></td><td colspan="3">Less Than 12 Months</td><td colspan="3">12 Months or More</td><td colspan="3">Total</td></tr><tr><td></td><td> Amortized</td><td> Fair</td><td>Unrealized</td><td> Amortized</td><td> Fair</td><td>Unrealized</td><td> Amortized</td><td> Fair</td><td>Unrealized</td></tr><tr><td></td><td> Cost</td><td> Value</td><td>Losses</td><td> Cost</td><td> Value</td><td>Losses</td><td> Cost</td><td> Value</td><td>Losses</td></tr><tr><td>ABS</td><td>$302</td><td>$290</td><td>$-12</td><td>$1,410</td><td>$1,026</td><td>$-384</td><td>$1,712</td><td>$1,316</td><td>$-396</td></tr><tr><td>CDOs</td><td>321</td><td>293</td><td>-28</td><td>2,724</td><td>2,274</td><td>-450</td><td>3,045</td><td>2,567</td><td>-478</td></tr><tr><td>CMBS</td><td>556</td><td>530</td><td>-26</td><td>3,962</td><td>3,373</td><td>-589</td><td>4,518</td><td>3,903</td><td>-615</td></tr><tr><td>Corporate</td><td>5,533</td><td>5,329</td><td>-199</td><td>4,017</td><td>3,435</td><td>-548</td><td>9,550</td><td>8,764</td><td>-747</td></tr><tr><td>Foreign govt./govt. agencies</td><td>356</td><td>349</td><td>-7</td><td>78</td><td>68</td><td>-10</td><td>434</td><td>417</td><td>-17</td></tr><tr><td>Municipal</td><td>7,485</td><td>7,173</td><td>-312</td><td>1,046</td><td>863</td><td>-183</td><td>8,531</td><td>8,036</td><td>-495</td></tr><tr><td>RMBS</td><td>1,744</td><td>1,702</td><td>-42</td><td>1,567</td><td>1,147</td><td>-420</td><td>3,311</td><td>2,849</td><td>-462</td></tr><tr><td>U.S. Treasuries</td><td>2,436</td><td>2,321</td><td>-115</td><td>158</td><td>119</td><td>-39</td><td>2,594</td><td>2,440</td><td>-154</td></tr><tr><td> Total fixed maturities</td><td>18,733</td><td>17,987</td><td>-741</td><td>14,962</td><td>12,305</td><td>-2,623</td><td>33,695</td><td>30,292</td><td>-3,364</td></tr><tr><td>Equity securities</td><td>53</td><td>52</td><td>-1</td><td>637</td><td>506</td><td>-131</td><td>690</td><td>558</td><td>-132</td></tr><tr><td> Total securities in an unrealized loss</td><td>$18,786</td><td>$18,039</td><td>$-742</td><td>$15,599</td><td>$12,811</td><td>$-2,754</td><td>$34,385</td><td>$30,850</td><td>$-3,496</td></tr></table>
[1] Unrealized losses exclude the change in fair value of bifurcated embedded derivative features of certain securities. Subsequent changes in fair value are recorded in net realized capital gains (losses). As of December 31, 2011, AFS securities in an unrealized loss position, comprised of 2,549 securities, primarily related to corporate securities within the financial services sector, CMBS, and RMBS which have experienced significant price deterioration. As of December 31, 2011, 75% of these securities were depressed less than 20% of cost or amortized cost. The decline in unrealized losses during 2011 was primarily attributable to a decline in interest rates, partially offset by credit spread widening. Most of the securities depressed for twelve months or more relate to structured securities with exposure to commercial and residential real estate, as well as certain floating rate corporate securities or those securities with greater than 10 years to maturity, concentrated in the financial services sector. Current market spreads continue to be significantly wider for structured securities with exposure to commercial and residential real estate, as compared to spreads at the security’s respective purchase date, largely due to the economic and market uncertainties regarding future performance of commercial and residential real estate. In addition, the majority of securities have a floating-rate coupon referenced to a market index where rates have declined substantially. The Company neither has an intention to sell nor does it expect to be required to sell the securities outlined above. THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) F-40 5. Investments and Derivative Instruments (continued) Variable Interest Entities The Company is involved with various special purpose entities and other entities that are deemed to be VIEs primarily as a collateral manager and as an investor through normal investment activities, as well as a means of accessing capital. A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Consolidated Financial Statements. Consolidated VIEs The following table presents the carrying value of assets and liabilities, and the maximum exposure to loss relating to the VIEs for which the Company is the primary beneficiary. Creditors have no recourse against the Company in the event of default by these VIEs nor does the Company have any implied or unfunded commitments to these VIEs. The Company’s financial or other support provided to these VIEs is limited to its investment management services and original investment.
<table><tr><td></td><td colspan="3"> December 31, 2011</td><td colspan="3"> December 31, 2010</td></tr><tr><td></td><td> Total Assets</td><td> Total Liabilities [1]</td><td> Maximum Exposure to Loss [2]</td><td> Total Assets</td><td> Total Liabilities [1]</td><td> Maximum Exposure to Loss [2]</td></tr><tr><td>CDOs [3]</td><td>$491</td><td>$471</td><td>$29</td><td>$729</td><td>$393</td><td>$289</td></tr><tr><td>Limited partnerships</td><td>7</td><td>—</td><td>7</td><td>14</td><td>1</td><td>13</td></tr><tr><td> Total</td><td>$498</td><td>$471</td><td>$36</td><td>$743</td><td>$394</td><td>$302</td></tr></table>
[1] Included in other liabilities in the Company’s Consolidated Balance Sheets. [2] The maximum exposure to loss represents the maximum loss amount that the Company could recognize as a reduction in net investment income or as a realized capital loss and is the cost basis of the Company’s investment. [3] Total assets included in fixed maturities, AFS, and fixed maturities, FVO, in the Company’s Consolidated Balance Sheets. CDOs represent structured investment vehicles for which the Company has a controlling financial interest as it provides collateral management services, earns a fee for those services and also holds investments in the securities issued by these vehicles. Limited partnerships represent one hedge fund for which the Company holds a majority interest in the fund as an investment. Non-Consolidated VIEs The Company holds a significant variable interest for one VIE for which it is not the primary beneficiary and, therefore, was not consolidated on the Company’s Consolidated Balance Sheets. This VIE represents a contingent capital facility (“facility”) that has been held by the Company since February 2007 for which the Company has no implied or unfunded commitments. Assets and liabilities recorded for the facility were $28 as of December 31, 2011 and $32 as of December 31, 2010. Additionally, the Company has a maximum exposure to loss of $3 as of December 31, 2011 and $4 as of December 31, 2010, which represents the issuance costs that were incurred to establish the facility. The Company does not have a controlling financial interest as it does not manage the assets of the facility nor does it have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the facility, as the asset manager has significant variable interest in the vehicle. The Company’s financial or other support provided to the facility is limited to providing ongoing support to cover the facility’s operating expenses. For further information on the facility, see Note 14. In addition, the Company, through normal investment activities, makes passive investments in structured securities issued by VIEs for which the Company is not the manager which are included in ABS, CDOs, CMBS and RMBS in the Available-for-Sale Securities table and fixed maturities, FVO, in the Company’s Consolidated Balance Sheets. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits and the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment. In reporting environmental results, the Company classifies its gross exposure into Direct, Assumed Reinsurance, and London Market. The following table displays gross environmental reserves and other statistics by category as of December 31, 2011. Summary of Environmental Reserves As of December 31, 2011
<table><tr><td></td><td>Total Reserves</td></tr><tr><td>Gross [1] [2]</td><td></td></tr><tr><td>Direct</td><td>$271</td></tr><tr><td>Assumed Reinsurance</td><td>39</td></tr><tr><td>London Market</td><td>57</td></tr><tr><td>Total</td><td>367</td></tr><tr><td>Ceded</td><td>-47</td></tr><tr><td>Net</td><td>$320</td></tr></table>
[1] The one year gross paid amount for total environmental claims is $58, resulting in a one year gross survival ratio of 6.4. [2] The three year average gross paid amount for total environmental claims is $58, resulting in a three year gross survival ratio of 6.4. During the second quarters of 2011, 2010 and 2009, the Company completed its annual ground-up asbestos reserve evaluations. As part of these evaluations, the Company reviewed all of its open direct domestic insurance accounts exposed to asbestos liability, as well as assumed reinsurance accounts and its London Market exposures for both direct insurance and assumed reinsurance. Based on this evaluation, the Company strengthened its net asbestos reserves by $290 in second quarter 2011. During 2011, for certain direct policyholders, the Company experienced increases in claim frequency, severity and expense which were driven by mesothelioma claims, particularly against certain smaller, more peripheral insureds. The Company also experienced unfavorable development on its assumed reinsurance accounts driven largely by the same factors experienced by the direct policyholders. During 2010 and 2009, for certain direct policyholders, the Company experienced increases in claim severity and expense. Increases in severity and expense were driven by litigation in certain jurisdictions and, to a lesser extent, development on primarily peripheral accounts. The Company also experienced unfavorable development on its assumed reinsurance accounts driven largely by the same factors experienced by the direct policyholders. The net effect of these changes in 2010 and 2009 resulted in $169 and $138 increases in net asbestos reserves, respectively. The Company currently expects to continue to perform an evaluation of its asbestos liabilities annually. The Company divides its gross asbestos exposures into Direct, Assumed Reinsurance and London Market. The Company further divides its direct asbestos exposures into the following categories: Major Asbestos Defendants (the “Top 70” accounts in Tillinghast’s published Tiers 1 and 2 and Wellington accounts), which are subdivided further as: Structured Settlements, Wellington, Other Major Asbestos Defendants, Accounts with Future Expected Exposures greater than $2.5, Accounts with Future Expected Exposures less than $2.5, and Unallocated. ? Structured Settlements are those accounts where the Company has reached an agreement with the insured as to the amount and timing of the claim payments to be made to the insured. ? The Wellington subcategory includes insureds that entered into the “Wellington Agreement” dated June 19, 1985. The Wellington Agreement provided terms and conditions for how the signatory asbestos producers would access their coverage from the signatory insurers. ? The Other Major Asbestos Defendants subcategory represents insureds included in Tiers 1 and 2, as defined by Tillinghast that are not Wellington signatories and have not entered into structured settlements with The Hartford. The Tier 1 and 2 classifications are meant to capture the insureds for which there is expected to be significant exposure to asbestos claims. ? Accounts with future expected exposures greater or less than $2.5 include accounts that are not major asbestos defendants. ? The Unallocated category includes an estimate of the reserves necessary for asbestos claims related to direct insureds that have not previously tendered asbestos claims to the Company and exposures related to liability claims that may not be subject to an aggregate limit under the applicable policies. An account may move between categories from one evaluation to the next. For example, an account with future expected exposure of greater than $2.5 in one evaluation may be reevaluated due to changing conditions and recategorized as less than $2.5 in a subsequent evaluation or vice versa. |
0 | Does Net earnings in As Reported keeps increasing each year between 2013 and 2014 ? | 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 |
59,028.8 | What is the sum of Noninterest income in 2010 and Interest payments-7 of Thereafter for Payments due by? (in million) | Table 7 Five Year Summary of Selected Financial Data
<table><tr><td>Table 7</td><td>Five Year Summary of Selected Financial Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">(In millions, except per share information)</td><td>2011</td><td>2010</td><td>2009</td><td>2008</td><td>2007</td></tr><tr><td colspan="2">Income statement</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">Net interest income</td><td>$44,616</td><td>$51,523</td><td>$47,109</td><td>$45,360</td><td>$34,441</td></tr><tr><td colspan="2">Noninterest income</td><td>48,838</td><td>58,697</td><td>72,534</td><td>27,422</td><td>32,392</td></tr><tr><td colspan="2">Total revenue, net of interest expense</td><td>93,454</td><td>110,220</td><td>119,643</td><td>72,782</td><td>66,833</td></tr><tr><td colspan="2">Provision for credit losses</td><td>13,410</td><td>28,435</td><td>48,570</td><td>26,825</td><td>8,385</td></tr><tr><td colspan="2">Goodwill impairment</td><td>3,184</td><td>12,400</td><td>—</td><td>—</td><td>—</td></tr><tr><td colspan="2">Merger and restructuring charges</td><td>638</td><td>1,820</td><td>2,721</td><td>935</td><td>410</td></tr><tr><td colspan="2">All other noninterest expense<sup>-1</sup></td><td>76,452</td><td>68,888</td><td>63,992</td><td>40,594</td><td>37,114</td></tr><tr><td colspan="2">Income (loss) before income taxes</td><td>-230</td><td>-1,323</td><td>4,360</td><td>4,428</td><td>20,924</td></tr><tr><td colspan="2">Income tax expense (benefit)</td><td>-1,676</td><td>915</td><td>-1,916</td><td>420</td><td>5,942</td></tr><tr><td colspan="2">Net income (loss)</td><td>1,446</td><td>-2,238</td><td>6,276</td><td>4,008</td><td>14,982</td></tr><tr><td colspan="2">Net income (loss) applicable to common shareholders</td><td>85</td><td>-3,595</td><td>-2,204</td><td>2,556</td><td>14,800</td></tr><tr><td colspan="2">Average common shares issued and outstanding</td><td>10,143</td><td>9,790</td><td>7,729</td><td>4,592</td><td>4,424</td></tr><tr><td colspan="2">Average diluted common shares issued and outstanding<sup>-2</sup></td><td>10,255</td><td>9,790</td><td>7,729</td><td>4,596</td><td>4,463</td></tr><tr><td colspan="2">Performance ratios</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">Return on average assets</td><td>0.06%</td><td>n/m</td><td>0.26%</td><td>0.22%</td><td>0.94%</td></tr><tr><td colspan="2">Return on average common shareholders’ equity</td><td>0.04</td><td>n/m</td><td>n/m</td><td>1.80</td><td>11.08</td></tr><tr><td colspan="2">Return on average tangible common shareholders’ equity<sup>-3</sup></td><td>0.06</td><td>n/m</td><td>n/m</td><td>4.72</td><td>26.19</td></tr><tr><td colspan="2">Return on average tangible shareholders’ equity<sup>-3</sup></td><td>0.96</td><td>n/m</td><td>4.18</td><td>5.19</td><td>25.13</td></tr><tr><td colspan="2">Total ending equity to total ending assets</td><td>10.81</td><td>10.08%</td><td>10.38</td><td>9.74</td><td>8.56</td></tr><tr><td colspan="2">Total average equity to total average assets</td><td>9.98</td><td>9.56</td><td>10.01</td><td>8.94</td><td>8.53</td></tr><tr><td colspan="2">Dividend payout</td><td>n/m</td><td>n/m</td><td>n/m</td><td>n/m</td><td>72.26</td></tr><tr><td colspan="2">Per common share data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">Earnings (loss)</td><td>$0.01</td><td>$-0.37</td><td>$-0.29</td><td>$0.54</td><td>$3.32</td></tr><tr><td colspan="2">Diluted earnings (loss)<sup>(2)</sup></td><td>0.01</td><td>-0.37</td><td>-0.29</td><td>0.54</td><td>3.29</td></tr><tr><td colspan="2">Dividends paid</td><td>0.04</td><td>0.04</td><td>0.04</td><td>2.24</td><td>2.40</td></tr><tr><td colspan="2">Book value</td><td>20.09</td><td>20.99</td><td>21.48</td><td>27.77</td><td>32.09</td></tr><tr><td colspan="2">Tangible book value<sup>-3</sup></td><td>12.95</td><td>12.98</td><td>11.94</td><td>10.11</td><td>12.71</td></tr><tr><td colspan="2">Market price per share of common stock</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">Closing</td><td>$5.56</td><td>$13.34</td><td>$15.06</td><td>$14.08</td><td>$41.26</td></tr><tr><td colspan="2">High closing</td><td>15.25</td><td>19.48</td><td>18.59</td><td>45.03</td><td>54.05</td></tr><tr><td colspan="2">Low closing</td><td>4.99</td><td>10.95</td><td>3.14</td><td>11.25</td><td>41.10</td></tr><tr><td colspan="2">Market capitalization</td><td>$58,580</td><td>$134,536</td><td>$130,273</td><td>$70,645</td><td>$183,107</td></tr><tr><td colspan="2">Average balance sheet</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">Total loans and leases</td><td>$938,096</td><td>$958,331</td><td>$948,805</td><td>$910,871</td><td>$776,154</td></tr><tr><td colspan="2">Total assets</td><td>2,296,322</td><td>2,439,606</td><td>2,443,068</td><td>1,843,985</td><td>1,602,073</td></tr><tr><td colspan="2">Total deposits</td><td>1,035,802</td><td>988,586</td><td>980,966</td><td>831,157</td><td>717,182</td></tr><tr><td colspan="2">Long-term debt</td><td>421,229</td><td>490,497</td><td>446,634</td><td>231,235</td><td>169,855</td></tr><tr><td colspan="2">Common shareholders’ equity</td><td>211,709</td><td>212,686</td><td>182,288</td><td>141,638</td><td>133,555</td></tr><tr><td colspan="2">Total shareholders’ equity</td><td>229,095</td><td>233,235</td><td>244,645</td><td>164,831</td><td>136,662</td></tr><tr><td colspan="2">Asset quality<sup>-4</sup></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">Allowance for credit losses<sup>-5</sup></td><td>$34,497</td><td>$43,073</td><td>$38,687</td><td>$23,492</td><td>$12,106</td></tr><tr><td colspan="2">Nonperforming loans, leases and foreclosed properties<sup>-6</sup></td><td>27,708</td><td>32,664</td><td>35,747</td><td>18,212</td><td>5,948</td></tr><tr><td colspan="2">Allowance for loan and lease losses as a percentage of total loans and leases outstanding<sup>-6</sup></td><td>3.68%</td><td>4.47%</td><td>4.16%</td><td>2.49%</td><td>1.33%</td></tr><tr><td colspan="2">Allowance for loan and lease losses as a percentage of total nonperforming loans and leases<sup>-6</sup></td><td>135</td><td>136</td><td>111</td><td>141</td><td>207</td></tr><tr><td colspan="2">Allowance for loan and lease losses as a percentage of total nonperforming loans and leasesexcluding the PCI loan portfolio<sup>-6</sup></td><td>101</td><td>116</td><td>99</td><td>136</td><td>n/a</td></tr><tr><td colspan="2">Amounts included in allowance that are excluded from nonperforming loans<sup>-7</sup></td><td>$17,490</td><td>$22,908</td><td>$17,690</td><td>$11,679</td><td>$6,520</td></tr><tr><td colspan="2">Allowances as a percentage of total nonperforming loans and leases excluding the amountsincluded in the allowance that are excluded from nonperforming loans<sup>-7</sup></td><td>65%</td><td>62%</td><td>58%</td><td>70%</td><td>91%</td></tr><tr><td colspan="2">Net charge-offs</td><td>$20,833</td><td>$34,334</td><td>$33,688</td><td>$16,231</td><td>$6,480</td></tr><tr><td colspan="2">Net charge-offs as a percentage of average loans and leases outstanding<sup>-6</sup></td><td>2.24%</td><td>3.60%</td><td>3.58%</td><td>1.79%</td><td>0.84%</td></tr><tr><td colspan="2">Nonperforming loans and leases as a percentage of total loans and leases outstanding<sup>-6</sup></td><td>2.74</td><td>3.27</td><td>3.75</td><td>1.77</td><td>0.64</td></tr><tr><td colspan="2">Nonperforming loans, leases and foreclosed properties as a percentage of total loans, leasesand foreclosed properties<sup>-6</sup></td><td>3.01</td><td>3.48</td><td>3.98</td><td>1.96</td><td>0.68</td></tr><tr><td colspan="2">Ratio of the allowance for loan and lease losses at December 31 to net charge-offs</td><td>1.62</td><td>1.22</td><td>1.10</td><td>1.42</td><td>1.79</td></tr><tr><td colspan="2">Capital ratios (year end)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">Risk-based capital:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="2">Tier 1 common</td><td>9.86%</td><td>8.60%</td><td>7.81%</td><td>4.80%</td><td>4.93%</td></tr><tr><td colspan="2">Tier 1</td><td>12.40</td><td>11.24</td><td>10.40</td><td>9.15</td><td>6.87</td></tr><tr><td colspan="2">Total</td><td>16.75</td><td>15.77</td><td>14.66</td><td>13.00</td><td>11.02</td></tr><tr><td colspan="2">Tier 1 leverage</td><td>7.53</td><td>7.21</td><td>6.88</td><td>6.44</td><td>5.04</td></tr><tr><td colspan="2">Tangible equity<sup>-3</sup></td><td>7.54</td><td>6.75</td><td>6.40</td><td>5.11</td><td>3.73</td></tr><tr><td colspan="2">Tangible common equity<sup>-3</sup></td><td>6.64</td><td>5.99</td><td>5.56</td><td>2.93</td><td>3.46</td></tr></table>
(1) Excludes merger and restructuring charges and goodwill impairment charges. (2) Due to a net loss applicable to common shareholders for 2010 and 2009, the impact of antidilutive equity instruments was excluded from diluted earnings (loss) per share and average diluted common shares. (3) Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. Other companies may define or calculate these measures differently. For additional information on these ratios and corresponding reconciliations to GAAP financial measures, see Supplemental Financial Data on page 32 and Table XV. (4) For more information on the impact of the PCI loan portfolio on asset quality, see Consumer Portfolio Credit Risk Management on page 75 and Commercial Portfolio Credit Risk Management on page 88. (5) Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments. (6) Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions on nonperforming loans, leases and foreclosed properties, see Nonperforming Consumer Loans and Foreclosed Properties Activity on page 86 and corresponding Table 36 and Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 94 and corresponding Table 45. (7) Amounts included in allowance that are excluded from nonperforming loans primarily include amounts allocated to Card Services portfolios, PCI loans and the non-U. S. credit card portfolio in All Other. n/m = not meaningful n/a = not applicable During the twelve months ended December 31, 2017, 2016 and 2015, we paid cash dividends to Equifax shareholders of $187.4 million, $157.6 million and $137.8 million, respectively, at $1.56 per share for 2017, $1.32 per share for 2016 and $1.16 per share for 2015. We anticipate continuing the payment of quarterly cash dividends. The actual amount of such dividends is subject to declaration by our Board of Directors and will depend upon future earnings, results of operations, capital requirements, our financial condition and other relevant factors. There can be no assurance that the Company will continue to pay quarterly cash dividends at current levels or at all. Contractual Obligations and Commercial Commitments The following table summarizes our significant contractual obligations and commitments as of December 31, 2017. The table excludes commitments that are contingent based on events or factors uncertain at this time. Some of the excluded commitments are discussed below the footnotes to the table.
<table><tr><td></td><td colspan="5">Payments due by</td></tr><tr><td></td><td>Total</td><td>Less than 1 year</td><td>1 to 3 years</td><td>3 to 5 years</td><td>Thereafter</td></tr><tr><td></td><td colspan="5">(In millions)</td></tr><tr><td>Debt (including capitalized lease obligation)(1)</td><td>$2,715.3</td><td>$965.3</td><td>$100.0</td><td>$1,000.0</td><td>$650.0</td></tr><tr><td>Operating leases-2</td><td>150.0</td><td>27.3</td><td>38.9</td><td>28.6</td><td>55.2</td></tr><tr><td>Data processing, outsourcing agreements and other purchase obligations-3</td><td>157.1</td><td>85.4</td><td>41.3</td><td>14.0</td><td>16.4</td></tr><tr><td>Other long-term liabilities-4 (5)</td><td>143.2</td><td>9.1</td><td>18.1</td><td>18.9</td><td>97.1</td></tr><tr><td>Product liability related to cybersecurity incident-6</td><td>27.1</td><td>27.1</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Interest payments-7</td><td>647.3</td><td>75.4</td><td>131.2</td><td>108.9</td><td>331.8</td></tr><tr><td></td><td>$3,840.0</td><td>$1,189.6</td><td>$329.5</td><td>$1,170.4</td><td>$1,150.5</td></tr></table>
(1) The amounts are gross of unamortized discounts totaling $11.0 million at December 31, 2017. Total debt on our Consolidated Balance Sheets is net of the unamortized discounts and fair value adjustments. There were no fair value adjustments to our debt at December 31, 2017. (2) Our operating lease obligations principally involve office space and equipment, which include the ground lease associated with our headquarters building that expires in 2048. (3) These agreements primarily represent our minimum contractual obligations for services that we outsource associated with our computer data processing operations and related functions, and certain administrative functions. These agreements expire between 2018 and 2022. (4) These long-term liabilities primarily relate to obligations associated with certain pension, postretirement and other compensation-related plans, some of which are discounted in accordance with U. S. generally accepted accounting principles, or GAAP. We made certain assumptions about the timing of such future payments. In the table above, we have not included amounts related to future pension plan obligations, as such required funding amounts beyond 2018 have not been deemed necessary due to our current expectations regarding future plan asset performance. (5) This table excludes $38.0 million of unrecognized tax benefits, including interest and penalties, as we cannot make a reasonably reliable estimate of the period of cash settlement with the respective taxing authorities. (6) As a result of the cybersecurity incident, we offered free credit file monitoring and identity theft protection to all U. S. consumers. We have recorded the expenses necessary to provide this service to those who signed up by the January 31, 2018 deadline. The amount above represents the remaining obligation associated with these expenses. (7) For future interest payments on variable-rate debt, which are generally based on a specified margin plus a base rate (LIBOR) or on CP, the Revolver and Term Loan rates for investment grade issuers, we used the variable rate in effect at December 31, 2017 to calculate these payments. Our variable rate debt at December 31, 2017, consisted of CP, the Entergy Corporation and Subsidiaries Notes to Financial Statements equitable discretion and not require refunds for the 20-month period from September 13, 2001 - May 2, 2003. Because the ruling on refunds relied on findings in the interruptible load proceeding, which is discussed in a separate section below, the FERC concluded that the refund ruling will be held in abeyance pending the outcome of the rehearing requests in that proceeding. On the second issue, the FERC reversed its prior decision and ordered that the prospective bandwidth remedy begin on June 1, 2005 (the date of its initial order in the proceeding) rather than January 1, 2006, as it had previously ordered. Pursuant to the October 2011 order, Entergy was required to calculate the additional bandwidth payments for the period June - December 2005 utilizing the bandwidth formula tariff prescribed by the FERC that was filed in a December 2006 compliance filing and accepted by the FERC in an April 2007 order. As is the case with bandwidth remedy payments, these payments and receipts will ultimately be paid by Utility operating company customers to other Utility operating company customers. In December 2011, Entergy filed with the FERC its compliance filing that provides the payments and receipts among the Utility operating companies pursuant to the FERC’s October 2011 order. The filing shows the following payments/receipts among the Utility operating companies:
<table><tr><td></td><td>Payments(Receipts) (In Millions)</td></tr><tr><td>Entergy Arkansas</td><td>$156</td></tr><tr><td>Entergy Gulf States Louisiana</td><td>-$75</td></tr><tr><td>Entergy Louisiana</td><td>$—</td></tr><tr><td>Entergy Mississippi</td><td>-$33</td></tr><tr><td>Entergy New Orleans</td><td>-$5</td></tr><tr><td>Entergy Texas</td><td>-$43</td></tr></table>
Entergy Arkansas made its payment in January 2012. In February 2012, Entergy Arkansas filed for an interim adjustment to its production cost allocation rider requesting that the $156 million payment be collected from customers over the 22-month period from March 2012 through December 2013. In March 2012 the APSC issued an order stating that the payment can be recovered from retail customers through the production cost allocation rider, subject to refund. The LPSC and the APSC have requested rehearing of the FERC’s October 2011 order. In December 2013 the LPSC filed a petition for a writ of mandamus at the United States Court of Appeals for the D. C. Circuit. In its petition, the LPSC requested that the D. C. Circuit issue an order compelling the FERC to issue a final order on pending rehearing requests. In its response to the LPSC petition, the FERC committed to rule on the pending rehearing request before the end of February. In January 2014 the D. C. Circuit denied the LPSC's petition. The APSC, the LPSC, the PUCT, and other parties intervened in the December 2011 compliance filing proceeding, and the APSC and the LPSC also filed protests. Calendar Year 2013 Production Costs The liabilities and assets for the preliminary estimate of the payments and receipts required to implement the FERC’s remedy based on calendar year 2013 production costs were recorded in December 2013, based on certain year-to-date information. The preliminary estimate was recorded based on the following estimate of the payments/receipts among the Utility operating companies for 2014. competition are rent charged, attractiveness of location, the quality of the property and breadth and quality of services provided. Our success depends upon, among other factors, trends of the national, regional and local economies, 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. We may incur costs to comply with environmental laws. Our operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment, including air and water quality, hazardous or toxic substances and health and safety. Under some environmental laws, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property. The owner or operator may also be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties because of the contamination. These laws often impose liability without regard to whether the owner or operator knew of the release of the substances or caused the release. The presence of contamination or the failure to remediate contamination may impair our ability to sell or lease real estate or to borrow using the real estate as collateral. Other laws and regulations govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containing materials in the event of damage, demolition, renovation or remodeling and also govern emissions of and exposure to asbestos fibers in the air. The maintenance and removal of lead paint and certain electrical equipment containing polychlorinated biphenyls (PCBs) and underground storage tanks are also regulated by federal and state laws. We are also subject to risks associated with human exposure to chemical or biological contaminants such as molds, pollens, viruses and bacteria which, above certain levels, can be alleged to be connected to allergic or other health effects and symptoms in susceptible individuals. We could incur fines for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances or tanks or related claims arising out of environmental contamination or human exposure at or from our properties. Each of our properties has been subjected to varying degrees of environmental assessment. The environmental assessments did not, as of this date, reveal any environmental condition material to our business. However, identification of new compliance concerns or undiscovered areas of contamination, changes in the extent or known scope of contamination, discovery of additional sites, human exposure to the contamination or changes in cleanup or compliance requirements could result in significant costs to us. Some of our potential losses may not be covered by insurance. We carry commercial liability and all risk property insurance ((i) fire, (ii) flood, (iii) extended coverage, (iv) “acts of terrorism” as defined in the Terrorism Risk Insurance Extension Act of 2005, which expires in 2007 and (v) rental loss insurance) with respect to our assets. Below is a summary of the current all risk property insurance and terrorism risk insurance in effect through September 2007 for each of the following business segments: |
0.03642 | In the year with larger amount for Europe, what's the increasing rate of the amount for Asia-Pacific ? | Aeronautics Our Aeronautics business segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Aeronautics’ major programs include the F-35 Lightning II Joint Strike Fighter, C-130 Hercules, F-16 Fighting Falcon, C-5M Super Galaxy and F-22 Raptor. Aeronautics’ operating results included the following (in millions):
<table><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Net sales</td><td>$15,570</td><td>$14,920</td><td>$14,123</td></tr><tr><td>Operating profit</td><td>1,681</td><td>1,649</td><td>1,612</td></tr><tr><td>Operating margins</td><td>10.8%</td><td>11.1%</td><td>11.4%</td></tr><tr><td>Backlog at year-end</td><td>$31,800</td><td>$27,600</td><td>$28,000</td></tr></table>
2015 compared to 2014 Aeronautics’ net sales in 2015 increased $650 million, or 4%, compared to 2014. The increase was attributable to higher net sales of approximately $1.4 billion for F-35 production contracts due to increased volume on aircraft production and sustainment activities; and approximately $150 million for the C-5 program due to increased deliveries (nine aircraft delivered in 2015 compared to seven delivered in 2014). The increases were partially offset by lower net sales of approximately $350 million for the C-130 program due to fewer aircraft deliveries (21 aircraft delivered in 2015, compared to 24 delivered in 2014), lower sustainment activities and aircraft contract mix; approximately $200 million due to decreased volume and lower risk retirements on various programs; approximately $195 million for the F-16 program due to fewer deliveries (11 aircraft delivered in 2015, compared to 17 delivered in 2014); and approximately $190 million for the F-22 program as a result of decreased sustainment activities. Aeronautics’ operating profit in 2015 increased $32 million, or 2%, compared to 2014. Operating profit increased by approximately $240 million for F-35 production contracts due to increased volume and risk retirements; and approximately $40 million for the C-5 program due to increased risk retirements. These increases were offset by lower operating profit of approximately $90 million for the F-22 program due to lower risk retirements; approximately $70 million for the C-130 program as a result of the reasons stated above for lower net sales; and approximately $80 million due to decreased volume and risk retirements on various programs. Adjustments not related to volume, including net profit booking rate adjustments and other matters, were approximately $100 million higher in 2015 compared to 2014.2014 compared to 2013 Aeronautics’ net sales increased $797 million, or 6%, in 2014 as compared to 2013. The increase was primarily attributable to higher net sales of approximately $790 million for F-35 production contracts due to increased volume and sustainment activities; about $55 million for the F-16 program due to increased deliveries (17 aircraft delivered in 2014 compared to 13 delivered in 2013) partially offset by contract mix; and approximately $45 million for the F-22 program due to increased risk retirements. The increases were partially offset by lower net sales of approximately $55 million for the F-35 development contract due to decreased volume, partially offset by the absence in 2014 of the downward revision to the profit booking rate that occurred in 2013; and about $40 million for the C-130 program due to fewer deliveries (24 aircraft delivered in 2014 compared to 25 delivered in 2013) and decreased sustainment activities, partially offset by contract mix. Aeronautics’ operating profit increased $37 million, or 2%, in 2014 as compared to 2013. The increase was primarily attributable to higher operating profit of approximately $85 million for the F-35 development contract due to the absence in 2014 of the downward revision to the profit booking rate that occurred in 2013; about $75 million for the F-22 program due to increased risk retirements; approximately $50 million for the C-130 program due to increased risk retirements and contract mix, partially offset by fewer deliveries; and about $25 million for the C-5 program due to the absence in 2014 of the downward revisions to the profit booking rate that occurred in 2013. The increases were partially offset by lower operating profit of approximately $130 million for the F-16 program due to decreased risk retirements, partially offset by increased deliveries; and about $70 million for sustainment activities due to decreased risk retirements and volume. Operating profit was comparable for F-35 production contracts as higher volume was offset by lower risk retirements. Adjustments not related to volume, including net profit booking rate adjustments and other matters, were approximately $105 million lower for 2014 compared to 2013. The completion of the Transactions contemplated by the Business Combination Agreement will have a material effect on our future results of operations and financial position. Our Business Omnicom, a strategic holding company, was formed in 1986 by the merger of several leading advertising, marketing and corporate communications companies. We are a leading global advertising, marketing and corporate communications company and we operate in a highly competitive industry. The proliferation of media channels, including the rapid development and integration of interactive technologies and mediums, has fragmented consumer audiences targeted by our clients. These developments make it more complex for marketers to reach their target audiences in a cost-effective way, causing them to turn to marketing service providers such as Omnicom for a customized mix of advertising and marketing communications services designed to make the best use of their total marketing expenditures. Our agencies operate in all major markets around the world and provide a comprehensive range of services, which we group into four fundamental disciplines: advertising, customer relationship management, or CRM, public relations and specialty communications. The services included in these disciplines are:
<table><tr><td>advertising</td><td>investor relations</td></tr><tr><td>brand consultancy</td><td>marketing research</td></tr><tr><td>corporate social responsibility consulting</td><td>media planning and buying</td></tr><tr><td>crisis communications</td><td>mobile marketing</td></tr><tr><td>custom publishing</td><td>multi-cultural marketing</td></tr><tr><td>data analytics</td><td>non-profit marketing</td></tr><tr><td>database management</td><td>organizational communications</td></tr><tr><td>direct marketing</td><td>package design</td></tr><tr><td>entertainment marketing</td><td>product placement</td></tr><tr><td>environmental design</td><td>promotional marketing</td></tr><tr><td>experiential marketing</td><td>public affairs</td></tr><tr><td>field marketing</td><td>public relations</td></tr><tr><td>financial/corporate business-to-business advertising</td><td>reputation consulting</td></tr><tr><td>graphic arts</td><td>retail marketing</td></tr><tr><td>healthcare communications</td><td>search engine marketing</td></tr><tr><td>instore design</td><td>social media marketing</td></tr><tr><td>interactive marketing</td><td>sports and event marketing</td></tr></table>
Although the medium used to reach a client’s target audience may differ across each of these disciplines, we develop and deliver the marketing message in a similar way by providing client-specific consulting services. Our business model was built and continues to evolve around our clients. While our agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients. The fundamental premise of our business is to deliver our services and allocate our resources based on the specific requirements of our clients. As clients increase their demands for marketing effectiveness and efficiency, they have tended to consolidate their business with larger, multi-disciplinary agencies or integrated groups of agencies. Accordingly, our business model demands that multiple agencies within Omnicom collaborate in formal and informal virtual networks that cut across internal organizational structures to execute against our clients’ specific marketing requirements. We believe that this organizational philosophy, and our ability to execute it, differentiates us from our competitors. Our agency networks and our virtual networks provide us with the ability to integrate services across all disciplines and geographies. This means that the delivery of our services can, and does, take place across agencies, networks and geographic regions simultaneously. Further, we believe that our virtual network strategy facilitates better integration of services required by the demands of the marketplace for advertising and marketing communications services. Our over-arching business strategy is to continue to use our virtual networks to grow our business relationships with our clients. The various components of our business and material factors that affected us in 2013 are discussed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or MD&A, of this The impact of changes in foreign exchange rates increased revenue 0.6%, or $85.1 million, primarily resulting from the strengthening of the Euro and British Pound, against the U. S. Dollar, partially offset by the weakening of the Brazilian Real, Russian Ruble and Australian Dollar against the U. S. Dollar. The components of revenue change in the United States (“Domestic”) and the remainder of the world (“International”) were (in millions):
<table><tr><td></td><td colspan="2">Total</td><td colspan="2">Domestic</td><td colspan="2">International</td></tr><tr><td></td><td>$</td><td>%</td><td>$</td><td>%</td><td>$</td><td>%</td></tr><tr><td>December 31, 2017</td><td>$15,273.6</td><td></td><td>$8,196.9</td><td></td><td>$7,076.7</td><td></td></tr><tr><td>Components of revenue change:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Foreign exchange rate impact</td><td>85.1</td><td>0.6%</td><td>—</td><td>—%</td><td>85.1</td><td>1.2%</td></tr><tr><td>Acquisition revenue, net of disposition revenue</td><td>-326.6</td><td>-2.1%</td><td>-108.7</td><td>-1.3%</td><td>-217.9</td><td>-3.1%</td></tr><tr><td>Organic growth</td><td>404.2</td><td>2.6%</td><td>58.0</td><td>0.7%</td><td>346.2</td><td>4.9%</td></tr><tr><td>Impact of adoption of ASC 606</td><td>-146.1</td><td>-1.0%</td><td>-146.4</td><td>-1.8%</td><td>0.3</td><td>—%</td></tr><tr><td>December 31, 2018</td><td>$15,290.2</td><td>0.1%</td><td>$7,999.8</td><td>-2.4%</td><td>$7,290.4</td><td>3.0%</td></tr></table>
The components and percentages are calculated as follows: ? The foreign exchange impact is calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue (in this case $15,205.1 million for the Total column). The foreign exchange impact is the difference between the current period revenue in U. S. Dollars and the current period constant currency revenue ($15,290.2 million less $15,205.1 million for the Total column). ? Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date and the comparable prior period revenue and the positive or negative growth after the acquisition is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of dispositions through the disposition date. The acquisition revenue and disposition revenue amounts are netted in the table. ? Organic growth is calculated by subtracting the foreign exchange rate impact, and the acquisition revenue, net of disposition revenue components from total revenue growth, excluding the impact of the adoption of ASC 606. ? The impact of the adoption of ASC 606 is discussed above in the “Accounting Changes” section. ? The percentage change is calculated by dividing the individual component amount by the prior period revenue base of that component ($15,273.6 million for the Total column). Changes in the value of foreign currencies against the U. S. Dollar affect our results of operations and financial position. For the most part, because the revenue and expense of our foreign operations are both denominated in the same local currency, the economic impact on operating margin is minimized. Assuming exchange rates at February 11, 2019 remain unchanged, we estimate the impact of changes in foreign exchange rates to reduce revenue in the first half of 2019 by approximately 2.5% to 3% and 1.5% for the full year. Revenue and organic growth, expressed as a percentage and excluding the impact of ASC 606, in our principal regional markets were (in millions):
<table><tr><td></td><td>2018</td><td>2017</td><td>$ Change</td><td>% Organic Growth</td></tr><tr><td>Americas:</td><td></td><td></td><td></td><td></td></tr><tr><td>North America</td><td>$8,442.5</td><td>$8,686.0</td><td>$-243.5</td><td>0.4%</td></tr><tr><td>Latin America</td><td>457.5</td><td>494.8</td><td>-37.3</td><td>2.0%</td></tr><tr><td>EMEA:</td><td></td><td></td><td></td><td></td></tr><tr><td>Europe</td><td>4,375.4</td><td>4,127.9</td><td>247.5</td><td>5.7%</td></tr><tr><td>Middle East and Africa</td><td>304.4</td><td>314.6</td><td>-10.2</td><td>-2.9%</td></tr><tr><td>Asia-Pacific</td><td>1,710.4</td><td>1,650.3</td><td>60.1</td><td>7.9%</td></tr><tr><td></td><td>$15,290.2</td><td>$15,273.6</td><td>$16.6</td><td>2.6%</td></tr></table>
OMNICOM GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 9. Equity Method Investments Income from our equity method investments was $8.9 million, $3.5 million and $5.4 million in 2018, 2017 and 2016, respectively. Our proportionate share in their net assets at December 31, 2018 and 2017 was $42.9 million and $40.7 million, respectively. Our equity method investments are not material to our results of operations or financial position; therefore, summarized financial information is not required to be presented.10. Share-Based Compensation Plans Share-based incentive awards are granted to employees under the 2013 Incentive Award Plan, or the 2013 Plan, which is administered by the Compensation Committee of the Board of Directors, or Compensation Committee. Awards include stock options, restricted stock and other stock awards. The maximum number of shares of common stock that can be granted under the 2013 Plan is 33 million shares plus any shares awarded under the 2013 Plan and any prior plan that have been forfeited or have expired. Stock option awards reduce the number of shares available for grant on a one-for-one basis and all other awards reduce the number of shares available for grant by 3.5 shares for each share awarded. The terms of each award and the exercise date are determined by the Compensation Committee. The 2013 Plan does not permit the holder of an award to elect cash settlement under any circumstances. At December 31, 2018, there were 26,731,624 shares available for grant under the 2013 Plan. If all shares available for grant were for awards other than stock options, shares available for grant would be 7,637,607. Share-based compensation expense was $70.5 million, $80.2 million and $93.4 million in 2018, 2017 and 2016, respectively. At December 31, 2018, unamortized share-based compensation that will be expensed over the next five years is $160.7 million. We record a deferred tax asset for the share-based compensation expense recognized for financial reporting purposes that has not been deducted on our income tax return. Beginning in 2017, excess tax benefits and deficiencies related to share-based compensation are recorded as compensation expense in results of operations upon vesting of restricted stock awards or exercise of stock options. Excess tax benefits and deficiencies represent the difference between the actual compensation deduction for tax purposes, which is calculated as the difference between the grant date price of the award and the price of our common stock on the vesting or exercise date. In 2018 and 2017 we recognized excess tax benefits of $7.4 million and $20.8 million, respectively. Stock Options The exercise price of stock option awards cannot be less than 100% of the market price of our common stock on the grant date. The 2017 option awards vest 100% three years from grant date and have a maximum contractual life of six years. All prior option awards have a maximum contractual life of 10 years. Stock option activity for the three years ended December 31, 2018 was: |
1,191,046 | What's the sum of all Shares that are positive in 2017? | 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. |
9,263.22076 | What will Goodwill reach in 2019 if it continues to grow at its current rate? (in million) | that these costs would be recovered from customers with no material adverse effect on its results of operations, financial position, or liquidity. Ameren’s and Ameren Missouri’s earnings could benefit from increased investment to comply with environmental regulations if those investments are reflected and recovered on a timely basis in customer rates. ‰ The Ameren Companies have multiyear credit agreements that cumulatively provide $2.1 billion of credit through December 2022, subject to a 364-day repayment term for Ameren Missouri and Ameren Illinois, with the option to seek incremental commitments to increase the cumulative credit provided to $2.5 billion. See Note 4 – Short-term Debt and Liquidity under Part II, Item 8, of this report for additional information regarding the Credit Agreements. Ameren, Ameren Missouri, and Ameren Illinois believe that their liquidity is adequate given their expected operating cash flows, capital expenditures, and related financing plans. However, there can be no assurance that significant changes in economic conditions, disruptions in the capital and credit markets, or other unforeseen events will not materially affect their ability to execute their expected operating, capital, or financing plans. ‰ Federal income tax legislation enacted under the TCJA will continue to have significant impacts on our results of operations, financial position, liquidity, and financial metrics. The TCJA, among other things, reduced the federal statutory corporate income tax rate from 35% to 21%, effective January 1, 2018. Customer rates were reduced to reflect the lower income tax rate, without a corresponding reduction in income tax payments because of our use of net operating losses and tax credit carryforwards until about 2020. Customer rates were also reduced to reflect the return of excess deferred taxes. The result of these customer rate reductions is a decrease in operating cash flows in the near term. Over time, the decrease in operating cash flows will be offset as temporary differences between book and taxable income reverse, and by increased customer rates due to higher rate base amounts resulting from lower accumulated deferred income tax liabilities. ‰ Ameren Missouri expects a decrease in operating cash flows of approximately $100 million in 2019 compared with 2018, as a result of the TCJA. Over time, the decrease in operating cash flows will be offset as temporary differences between book and taxable income reverse, and by increased customer rates due to higher rate base amounts, once approved by the MoPSC, resulting from lower accumulated deferred income tax liabilities. ‰ The following table presents the net regulatory liabilities associated with excess deferred taxes as of December 31, 2018, and the related amortization periods:
<table><tr><td>Amortization Period</td><td>Ameren Missouri</td><td>Ameren Illinois</td><td>ATXI</td><td>Total</td></tr><tr><td>30–60 years</td><td>$947</td><td>$796</td><td>$84</td><td>$1,827</td></tr><tr><td>7–10 years</td><td>524</td><td>-4</td><td>2</td><td>522</td></tr><tr><td>Total</td><td>$1,471</td><td>$792</td><td>$86</td><td>$2,349</td></tr></table>
‰ In 2018, our rate-regulated businesses began to amortize excess deferred taxes. Ameren Illinois and ATXI’s 2018 income tax expense reflect a full year of amortization, while Ameren Missouri’s 2018 income tax expense reflects five months of amortization related to its electric business, in accordance with a MoPSC order received in July 2018. The amortization of such balances related to Ameren Missouri’s gas business started in January 2019, in accordance with a MoPSC order received in December 2018. These amortizations reduce our income tax expense and effective tax rates. Due to formula ratemaking, Ameren Illinois Electric Distribution and Ameren Transmission have an offsetting reduction in revenue from customers, with no overall impact on earnings. Ameren Missouri and Ameren Illinois Natural Gas 2019 interim period earnings may be affected by timing differences between income tax expense and revenue reductions based on their revenue patterns; however, no material impact to year-over-year earnings is expected. ‰ As of December 31, 2018, Ameren had $91 million in tax benefits from federal and state net operating loss carryforwards and $127 million in federal and state income tax credit carryforwards. These carryforwards are expected to largely offset income tax obligations in 2019. Ameren does not expect to make material federal or state income tax payments over the next five years based on planned capital expenditures and related income tax credits. Consistent with the tax allocation agreement between Ameren (parent) and its subsidiaries, Ameren Missouri expects to make material income tax payments to Ameren (parent) in 2019 and 2020 and immaterial payments in 2021 through 2023 based on planned capital expenditures and related income tax credits, while Ameren Illinois expects to make material income tax payments to Ameren (parent) in 2020 through 2023. ‰ Ameren expects its cash used for currently planned capital expenditures and dividends to exceed cash provided by operating activities over the next several years. To fund a portion of these cash requirements, beginning in the first quarter of 2018, Ameren began using newly issued shares, rather than market-purchased shares, to satisfy requirements under its DRPlus and employee benefit plans and expects to continue to do so over the next five years. Ameren also plans to issue incremental common equity to fund a portion of Ameren Missouri’s wind generation investments. Ameren, Ameren Missouri, and Ameren Illinois expect their respective equity to total capitalization levels over the period ending December 2023 to remain in-line with their respective equity to total capitalization levels as of December 31, 2018. Ameren Missouri Table 44: Allowance for Loan and Lease Losses
<table><tr><td>Dollars in millions</td><td>2012</td><td>2011</td></tr><tr><td>January 1</td><td>$4,347</td><td>$4,887</td></tr><tr><td>Total net charge-offs</td><td>-1,289</td><td>-1,639</td></tr><tr><td>Provision for credit losses</td><td>987</td><td>1,152</td></tr><tr><td>Net change in allowance for unfunded loan commitments and letters of credit</td><td>-10</td><td>-52</td></tr><tr><td>Other</td><td>1</td><td>-1</td></tr><tr><td>December 31</td><td>$4,036</td><td>$4,347</td></tr><tr><td>Net charge-offs to average loans (for the year ended)</td><td>.73%</td><td>1.08%</td></tr><tr><td>Allowance for loan and lease losses to total loans</td><td>2.17</td><td>2.73</td></tr><tr><td>Commercial lending net charge-offs</td><td>$-359</td><td>$-712</td></tr><tr><td>Consumer lending net charge-offs</td><td>-930</td><td>-927</td></tr><tr><td>Total net charge-offs</td><td>$-1,289</td><td>$-1,639</td></tr><tr><td>Net charge-offs to average loans (for the year ended)</td><td></td><td></td></tr><tr><td>Commercial lending</td><td>.35%</td><td>.86%</td></tr><tr><td>Consumer lending</td><td>1.24</td><td>1.33</td></tr></table>
As further described in the Consolidated Income Statement Review section of this Item 7, the provision for credit losses totaled $1.0 billion for 2012 compared to $1.2 billion for 2011. For 2012, the provision for commercial lending credit losses declined by $39 million or 22% from 2011. Similarly, the provision for consumer lending credit losses decreased $126 million or 13% from 2011. At December 31, 2012, total ALLL to total nonperforming loans was 124%. The comparable amount for December 31, 2011 was 122%. These ratios are 79% and 84%, respectively, when excluding the $1.5 billion and $1.4 billion, respectively, of allowance at December 31, 2012 and December 31, 2011 allocated to consumer loans and lines of credit not secured by residential real estate and purchased impaired loans. We have excluded consumer loans and lines of credit not secured by real estate as they are charged off after 120 to 180 days past due and not placed on nonperforming status. Additionally, we have excluded purchased impaired loans as they are considered performing regardless of their delinquency status as interest is accreted based on our estimate of expected cash flows and additional allowance is recorded when these cash flows are below recorded investment. See Table 33: Nonperforming Assets By Type within this Credit Risk Management section for additional information. The ALLL balance increases or decreases across periods in relation to fluctuating risk factors, including asset quality trends, charge-offs and changes in aggregate portfolio balances. During 2012, improving asset quality trends, including, but not limited to, delinquency status, improving economic conditions, realization of previously estimated losses through charge-offs and overall portfolio growth, combined to result in reducing the estimated credit losses within the portfolio. As a result, the ALLL balance declined $311 million, or 7%, to $4.0 billion during the year ended December 31, 2012. See Note 7 Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit and Note 6 Purchased Loans in the Notes To Consolidated Financial Statements in Item 8 of this Report regarding changes in the ALLL and in the allowance for unfunded loan commitments and letters of credit. CREDIT DEFAULT SWAPS From a credit risk management perspective, we use credit default swaps (CDS) as a tool to manage risk concentrations in the credit portfolio. That risk management could come from protection purchased or sold in the form of single name or index products. When we buy loss protection by purchasing a CDS, we pay a fee to the seller, or CDS counterparty, in return for the right to receive a payment if a specified credit event occurs for a particular obligor or reference entity. When we sell protection, we receive a CDS premium from the buyer in return for PNC’s obligation to pay the buyer if a specified credit event occurs for a particular obligor or reference entity. We evaluate the counterparty credit worthiness for all our CDS activities. Counterparty creditworthiness is approved based on a review of credit quality in accordance with our traditional credit quality standards and credit policies. The credit risk of our counterparties is monitored in the normal course of business. In addition, all counterparty credit lines are subject to collateral thresholds and exposures above these thresholds are secured. CDSs are included in the “Derivatives not designated as hedging instruments under GAAP” section of Table 54: Financial Derivatives Summary in the Financial Derivatives section of this Risk Management discussion.
<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>2018</td><td>2017</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Balance Sheet Highlights</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets</td><td>$382,315</td><td>$380,768</td><td>$366,380</td><td>$358,493</td><td>$345,072</td></tr><tr><td>Loans</td><td>$226,245</td><td>$220,458</td><td>$210,833</td><td>$206,696</td><td>$204,817</td></tr><tr><td>Allowance for loan and lease losses</td><td>$2,629</td><td>$2,611</td><td>$2,589</td><td>$2,727</td><td>$3,331</td></tr><tr><td>Interest-earning deposits with banks (a)</td><td>$10,893</td><td>$28,595</td><td>$25,711</td><td>$30,546</td><td>$31,779</td></tr><tr><td>Investment securities</td><td>$82,701</td><td>$76,131</td><td>$75,947</td><td>$70,528</td><td>$55,823</td></tr><tr><td>Loans held for sale</td><td>$994</td><td>$2,655</td><td>$2,504</td><td>$1,540</td><td>$2,262</td></tr><tr><td>Equity investments (b)</td><td>$12,894</td><td>$11,392</td><td>$10,728</td><td>$10,587</td><td>$10,728</td></tr><tr><td>Mortgage servicing rights</td><td>$1,983</td><td>$1,832</td><td>$1,758</td><td>$1,589</td><td>$1,351</td></tr><tr><td>Goodwill</td><td>$9,218</td><td>$9,173</td><td>$9,103</td><td>$9,103</td><td>$9,103</td></tr><tr><td>Other assets</td><td>$34,408</td><td>$27,894</td><td>$27,506</td><td>$26,566</td><td>$28,180</td></tr><tr><td>Noninterest-bearing deposits</td><td>$73,960</td><td>$79,864</td><td>$80,230</td><td>$79,435</td><td>$73,479</td></tr><tr><td>Interest-bearing deposits</td><td>$193,879</td><td>$185,189</td><td>$176,934</td><td>$169,567</td><td>$158,755</td></tr><tr><td>Total deposits</td><td>$267,839</td><td>$265,053</td><td>$257,164</td><td>$249,002</td><td>$232,234</td></tr><tr><td>Borrowed funds (c)</td><td>$57,419</td><td>$59,088</td><td>$52,706</td><td>$54,532</td><td>$56,768</td></tr><tr><td>Total shareholders’ equity</td><td>$47,728</td><td>$47,513</td><td>$45,699</td><td>$44,710</td><td>$44,551</td></tr><tr><td>Common shareholders’ equity</td><td>$43,742</td><td>$43,530</td><td>$41,723</td><td>$41,258</td><td>$40,605</td></tr><tr><td>Accumulated other comprehensive income (loss)</td><td>$-725</td><td>$-148</td><td>$-265</td><td>$130</td><td>$503</td></tr><tr><td>Period-end common shares outstanding (millions)</td><td>457</td><td>473</td><td>485</td><td>504</td><td>523</td></tr><tr><td>Loans to deposits</td><td>84%</td><td>83%</td><td>82%</td><td>83%</td><td>88%</td></tr><tr><td>Client Assets(billions)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discretionary client assets under management</td><td>$148</td><td>$151</td><td>$137</td><td>$134</td><td>$135</td></tr><tr><td>Nondiscretionary client assets under administration</td><td>124</td><td>131</td><td>120</td><td>119</td><td>123</td></tr><tr><td>Total client assets under administration</td><td>272</td><td>282</td><td>257</td><td>253</td><td>258</td></tr><tr><td>Brokerage account client assets</td><td>47</td><td>49</td><td>44</td><td>43</td><td>43</td></tr><tr><td>Total</td><td>$319</td><td>$331</td><td>$301</td><td>$296</td><td>$301</td></tr><tr><td>Capital Ratios (d) (e)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basel III (f)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common equity Tier 1</td><td>9.6%</td><td>9.8%</td><td>10.0%</td><td>10.0%</td><td>10.0%</td></tr><tr><td>Tier 1 risk-based</td><td>10.8%</td><td>N/A</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Total capital risk-based</td><td>13.0%</td><td>N/A</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Transitional Basel III</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common equity Tier I</td><td>N/A</td><td>10.4%</td><td>10.6%</td><td>10.6%</td><td>10.9%</td></tr><tr><td>Tier 1 risk-based capital</td><td>N/A</td><td>11.6%</td><td>12.0%</td><td>12.0%</td><td>12.6%</td></tr><tr><td>Other Selected Ratios</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Dividend payout</td><td>31.5%</td><td>24.7%</td><td>29.0%</td><td>27.0%</td><td>25.3%</td></tr><tr><td>Common shareholders’ equity to total assets</td><td>11.4%</td><td>11.4%</td><td>11.4%</td><td>11.5%</td><td>11.8%</td></tr><tr><td>Average common shareholders’ equity to average assets</td><td>11.3%</td><td>11.3%</td><td>11.5%</td><td>11.5%</td><td>12.1%</td></tr><tr><td>Selected Statistics</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employees</td><td>53,063</td><td>52,906</td><td>52,006</td><td>52,513</td><td>53,587</td></tr><tr><td>Retail Banking branches</td><td>2,372</td><td>2,459</td><td>2,520</td><td>2,616</td><td>2,697</td></tr><tr><td>ATMs</td><td>9,162</td><td>9,051</td><td>9,024</td><td>8,956</td><td>8,605</td></tr></table>
(a) Includes balances held with the Federal Reserve Bank of Cleveland of $10.5 billion, $28.3 billion, $25.1 billion, $30.0 billion and $31.4 billion as of December 31, 2018, 2017, 2016, 2015 and 2014, respectively. (b) Includes our equity interest in BlackRock. On January 1, 2018, $.6 billion of trading and available for sale securities, primarily money market funds, were reclassified to Equity investments in accordance with the adoption of Accounting Standards Update (ASU) 2016-01. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in Item 8 of this Report for additional detail on this adoption. (c) Includes long-term borrowings of $37.4 billion, $43.1 billion, $38.3 billion, $43.6 billion and $41.5 billion for 2018, 2017, 2016, 2015 and 2014, respectively. Borrowings which mature more than one year after December 31, 2018 are considered to be long-term. (d) See capital ratios discussion in the Supervision and Regulation section of Item 1 and in the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report for additional discussion on these capital ratios. Additional information on the 2014-2016 fully phased-in ratios and Transitional Basel III ratios is included in the Statistical Information (Unaudited) section in Item 8 of this Report. (e) All ratios are calculated using the regulatory capital methodology applicable to PNC during each period presented, except for the prior period Basel III Common equity Tier 1 ratios, which are fully phased-in Basel III ratios and are presented as pro forma estimates. Ratios for all periods were calculated based on the standardized approach. (f) The 2018 Basel III ratios for Common equity Tier 1 capital and Tier 1 risk-based capital reflect the full phase-in of all Basel III adjustments to these metrics applicable to PNC. The 2018 Basel III Total risk-based capital ratio includes $80 million of nonqualifying trust preferred capital securities that are subject to a phase-out period that runs through 2021. |
141,000 | What was the total amount of Square Feet-1 /Apartment Units excluding those Square Feet-1 /Apartment Units greater than 100000 for Square Feet-1 /Apartment Units? | 4) Includes $3.1 million and $8.0 million of insurance recoveries in 2004 and 2003, respectively, attributable to rental income lost at Santana Row as a result of the August 2002 fire. Insurance recoveries received in 2005 were insignificant. Excluding these items, funds from operations in 2004 and 2003 would have been $156.0 million and $140.5 million, respectively.5) The SEC has stated that EBITDA is a non-GAAP measure as calculated in the table below. Adjusted EBITDA is a non-GAAP measure that means net income or loss plus interest expense, income taxes, depreciation and amortization, impairment provisions, and nonrecurring expenses. Adjusted EBITDA is presented because we believe that it provides useful information to investors regarding our ability to service debt and because it approximates a key covenant in material notes. Adjusted EBITDA should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. Adjusted EBITDA as presented may not be comparable to other similarly titled measures used by other REITs. The reconciliation of Adjusted EBITDA to net income for the periods presented is as follows:
<table><tr><td></td><td>2005</td><td>2004</td><td>2003</td><td>2002</td><td>2001</td></tr><tr><td></td><td colspan="5">(In thousands)</td></tr><tr><td>Net income</td><td>$114,612</td><td>$84,156</td><td>$94,497</td><td>$55,287</td><td>$68,756</td></tr><tr><td>Depreciation and amortization</td><td>91,503</td><td>90,438</td><td>75,503</td><td>64,529</td><td>59,914</td></tr><tr><td>Interest expense</td><td>88,566</td><td>85,058</td><td>75,232</td><td>65,058</td><td>69,313</td></tr><tr><td>Other interest income</td><td>-2,216</td><td>-1,509</td><td>-1,276</td><td>-1,386</td><td>-2,662</td></tr><tr><td>EBITDA</td><td>292,465</td><td>258,143</td><td>243,956</td><td>183,488</td><td>195,321</td></tr><tr><td>Gain loss on sale of real estate</td><td>-30,748</td><td>-14,052</td><td>-20,053</td><td>-19,101</td><td>-9,185</td></tr><tr><td>Loss on abandoned developmentsheld for sale</td><td>—</td><td>—</td><td>—</td><td>9,647</td><td>—</td></tr><tr><td>Adjusted EBITDA</td><td>$261,717</td><td>$244,091</td><td>$223,903</td><td>$174,034</td><td>$186,136</td></tr></table>
6) Fixed charges consist of interest on borrowed funds (including capitalized interest), amortization of debt discount and expense and the portion of rent expense representing an interest factor. Preferred share dividends consist of dividends paid on our outstanding Series A preferred shares and Series B preferred shares. Our Series A preferred shares were redeemed in full in June 2003. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing in “Item 8. Financial Statements and Supplementary Data” of this report. Overview We are an equity real estate investment trust specializing in the ownership, management, development and redevelopment of retail and mixed-use properties. As of December 31, 2005, we owned or had a majority interest in 103 community and neighborhood shopping centers and mixed-use properties comprising approximately 17.6 million square feet. Our properties are located primarily in densely populated and affluent communities in strategic metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, as well as in California, and one apartment complex in Maryland. In total, the 103 commercial properties were 96.3% leased at December 31, 2005. A joint venture in which we own a 30% interest owned four neighborhood shopping centers totaling approximately 0.5 million square feet as of December 31, 2005. In total, the joint venture properties in which we own an interest were 97.4% leased at December 31, 2005. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 38 consecutive years. (4) Includes $3.1 million and $8.0 million of insurance recoveries in 2004 and 2003, respectively, attributable to rental income lost at Santana Row as a result of the August 2002 fire. Insurance recoveries received in 2005 were insignificant. Excluding these items, funds from operations available for common shareholders in 2004 and 2003 would have been $145.6 million and $123.3 million, respectively. (5) The SEC has stated that EBITDA is a non-GAAP measure as calculated in the table below. Adjusted EBITDA is a non-GAAP measure that means net income or loss plus net interest expense, income taxes, depreciation and amortization, gain or loss on sale of real estate and impairments of real estate if any. Adjusted EBITDA is presented because we believe that it provides useful information to investors regarding our ability to service debt and because it approximates a key covenant in material notes. Adjusted EBITDA should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. Adjusted EBITDA as presented may not be comparable to other similarly titled measures used by other REITs. The reconciliation of Adjusted EBITDA to net income for the periods presented is as follows:
<table><tr><td></td><td>2006</td><td>2005</td><td>2004</td><td>2003</td><td>2002</td></tr><tr><td></td><td colspan="5">(In thousands)</td></tr><tr><td>Net income</td><td>$118,712</td><td>$114,612</td><td>$84,156</td><td>$94,497</td><td>$55,287</td></tr><tr><td>Depreciation and amortization</td><td>97,879</td><td>91,503</td><td>90,438</td><td>75,503</td><td>64,529</td></tr><tr><td>Interest expense</td><td>102,808</td><td>88,566</td><td>85,058</td><td>75,232</td><td>65,058</td></tr><tr><td>Other interest income</td><td>-2,616</td><td>-2,216</td><td>-1,509</td><td>-1,276</td><td>-1,386</td></tr><tr><td>EBITDA</td><td>316,783</td><td>292,465</td><td>258,143</td><td>243,956</td><td>183,488</td></tr><tr><td>Gain on sale of real estate</td><td>-23,956</td><td>-30,748</td><td>-14,052</td><td>-20,053</td><td>-19,101</td></tr><tr><td>Loss on abandoned developmentsheld for sale</td><td>—</td><td>—</td><td>—</td><td>—</td><td>9,647</td></tr><tr><td>Adjusted EBITDA</td><td>$292,827</td><td>$261,717</td><td>$244,091</td><td>$223,903</td><td>$174,034</td></tr></table>
(6) Fixed charges consist of interest on borrowed funds (including capitalized interest), amortization of debt discount and expense and the portion of rent expense representing an interest factor. Preferred share dividends consist of dividends paid on preferred shares and preferred stock redemption costs. Our Series A preferred shares were redeemed in full in June 2003 and our Series B preferred shares were redeemed in full in November 2006. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing in “Item 8. Financial Statements and Supplementary Data” of this report. Overview We are an equity real estate investment trust specializing in the ownership, management, development and redevelopment of high quality retail and mixed-use properties. As of December 31, 2006, we owned or had a majority interest in 111 community and neighborhood shopping centers and mixed-use properties comprising approximately 18.8 million square feet. Our properties are located primarily in densely populated and affluent communities in strategic metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, as well as in California. In total, these 111 commercial properties were 96.5% leased at December 31, 2006. A joint venture in which we own a 30% interest owned four neighborhood shopping centers totaling approximately 0.7 million square feet as of December 31, 2006. In total, the joint venture properties in which we own an interest were 98.7% leased at December 31, 2006. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 39 consecutive years.
<table><tr><td> Property, City, State, Zip Code</td><td> Year Completed</td><td> Year Acquired</td><td> Square Feet-1 /Apartment Units</td><td> Average Rent Per Square Foot</td><td> Percentage Leased-2</td><td> Principal Tenant(s)</td></tr><tr><td>Mount Vernon/South Valley/7770 Richmond HwyAlexandria, VA 22306-3(6)(12)</td><td>1966-1974</td><td>2003/2006</td><td>565,000</td><td>$15.32</td><td>95%</td><td>Shoppers Food WarehouseBed, Bath & BeyondMichaelsHome DepotTJ MaxxGold’s Gym</td></tr><tr><td>Old Keene MillSpringfield, VA 22152</td><td>1968</td><td>1976</td><td>92,000</td><td>$33.35</td><td>97%</td><td>Whole FoodsWalgreens</td></tr><tr><td>Pan AmFairfax, VA 22031</td><td>1979</td><td>1993</td><td>227,000</td><td>$18.41</td><td>100%</td><td>MichaelsMicroCenterSafeway</td></tr><tr><td>Pentagon RowArlington, VA 22202-12</td><td>2001-2002</td><td>1998/2010</td><td>296,000</td><td>$33.69</td><td>99%</td><td>Harris TeeterBed,Bath & BeyondBally Total FitnessDSW</td></tr><tr><td>Pike 7 PlazaVienna, VA 22180-6</td><td>1968</td><td>1997</td><td>164,000</td><td>$38.11</td><td>100%</td><td>DSWStaplesTJ Maxx</td></tr><tr><td>Shoppers’ WorldCharlottesville, VA 22091-12</td><td>1975-2001</td><td>2007</td><td>169,000</td><td>$11.92</td><td>94%</td><td>Whole FoodsStaples</td></tr><tr><td>Shops at Willow LawnRichmond, VA 23230</td><td>1957</td><td>1983</td><td>480,000</td><td>$16.02</td><td>88%</td><td>KrogerOld NavyRoss Dress For LessStaples</td></tr><tr><td>Tower Shopping CenterSpringfield, VA 22150</td><td>1960</td><td>1998</td><td>112,000</td><td>$24.04</td><td>91%</td><td>Talbots</td></tr><tr><td>Tyson’s StationFalls Church, VA 22043-12</td><td>1954</td><td>1978</td><td>49,000</td><td>$39.43</td><td>100%</td><td>Trader Joe’s</td></tr><tr><td>Village at ShirlingtonArlington, VA 22206-7</td><td>1940, 2006-2009</td><td>1995</td><td>255,000</td><td>$33.22</td><td>98%</td><td>AMC LoewsCarlyle Grand CaféHarrisTeeter</td></tr><tr><td> Total All Regions—Retail-14</td><td></td><td></td><td> 18,286,000</td><td> $22.77</td><td> 94%</td><td></td></tr><tr><td> Total All Regions—Residential</td><td></td><td></td><td> 903 units</td><td></td><td> 95%</td><td></td></tr></table>
(1) Represents the physical square footage of the commercial portion of the property, which may differ from the gross leasable square footage used to express percentage leased. Some of our properties include office space which is included in this square footage but is not material in total. (2) Retail percentage leased is expressed as a percentage of rentable commercial square feet occupied or subject to a lease under which rent is currently payable and includes square feet covered by leases for stores not yet opened. Residential percentage leased is expressed as a percentage of units occupied or subject to a lease. (3) All or a portion of this property is owned pursuant to a ground lease. (4) We own the controlling interest in this center. (5) We own a 90% general and limited partnership interests in these buildings. (6) We own this property in a “downREIT” partnership, of which a wholly owned subsidiary of the Trust is the sole general partner, with third party partners holding operating partnership units. (7) All or a portion of this property is subject to a capital lease obligation. (8) We own a 64.1% membership interest in this property. (9) 50% of the ownership of this property is in a “downREIT” partnership, of which a wholly owned subsidiary of the Trust is the sole general partner, with third party partners holding operating partnership units. (10) Properties acquired through the Taurus Newbury Street JV II Limited Partnership or a joint venture arrangement with affiliates of a discretionary fund created and advised by ING Clarion Partners. (11) The Trust controls Melville Mall through a 20 year master lease and secondary financing to the owner. Because the Trust controls the activities that most significantly impact this property and retains substantially all of the economic benefit and risk associated with it, we consolidate this property and its operations. Item 2. Properties We employ a variety of assets in the management and operation of our rail business. Our rail network covers 23 states in the western two-thirds of the U. S. |
0.62946 | what is the money pool activity use of operating cash flows as a percentage of receivables from the money pool in 2003? | System Energy Resources, Inc. Management's Financial Discussion and Analysis 269 Operating Activities Cash flow from operations increased by $232.1 million in 2004 primarily due to income tax refunds of $70.6 million in 2004 compared to income tax payments of $230.9 million in 2003. The increase was partially offset by money pool activity, as discussed below. In 2003, the domestic utility companies and System Energy filed, with the IRS, a change in tax accounting method notification for their respective calculations of cost of goods sold. The adjustment implemented a simplified method of allocation of overhead to the production of electricity, which is provided under the IRS capitalization regulations. The cumulative adjustment placing these companies on the new methodology resulted in a $430 million deduction for System Energy on Entergy's 2003 income tax return. There was no cash benefit from the method change in 2003. In 2004 System Energy realized $144 million in cash tax benefit from the method change. This tax accounting method change is an issue across the utility industry and will likely be challenged by the IRS on audit. Cash flow from operations decreased by $124.8 million in 2003 primarily due to the following: ? an increase in federal income taxes paid of $74.0 million in 2003 compared to 2002; ? the cessation of the Entergy Mississippi GGART. System Energy collected $21.7 million in 2003 and $40.8 million in 2002 from Entergy Mississippi in conjunction with the GGART, which provided for the acceleration of Entergy Mississippi's Grand Gulf purchased power obligation. The MPSC authorized cessation of the GGART effective July 1, 2003. See Note 2 to the domestic utility companies and System Energy financial statements for further discussion of the GGART; and ? money pool activity, as discussed below. System Energy's receivables from the money pool were as follows as of December 31 for each of the following years:
<table><tr><td>2004</td><td>2003</td><td>2002</td><td>2001</td></tr><tr><td>(In Thousands)</td></tr><tr><td>$61,592</td><td>$19,064</td><td>$7,046</td><td>$13,853</td></tr></table>
Money pool activity used $42.5 million of System Energy's operating cash flows in 2004, used $12.0 million in 2003, and provided $6.8 million in 2002. See Note 4 to the domestic utility companies and System Energy financial statements for a description of the money pool. Investing Activities Net cash used for investing activities was practically unchanged in 2004 compared to 2003 primarily because an increase in construction expenditures caused by a reclassification of inventory items to capital was significantly offset by the maturity of $6.5 million of other temporary investments that had been made in 2003, which provided cash in 2004. The increase of $16.2 million in net cash used in investing activities in 2003 was primarily due to the following: ? the maturity in 2002 of $22.4 million of other temporary investments that had been made in 2001, which provided cash in 2002; ? an increase in decommissioning trust contributions and realized change in trust assets of $8.2 million in 2003 compared to 2002; and ? other temporary investments of $6.5 million made in 2003. Partially offsetting the increases in net cash used in investing activities was a decrease in construction expenditures of $22.1 million in 2003 compared to 2002 primarily due to the power uprate project in 2002. Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis 25 proposed in the Initial Decision are arbitrary and are so complex that they would be difficult to implement; the Initial Decision improperly rejected Entergy's resource planning remedy; the Initial Decision erroneously determined that the full costs of the Vidalia project should be included in Entergy Louisiana's production costs for purposes of calculating relative production costs; and the Initial Decision erroneously adopted a new method of calculating reserve sharing costs rather than the current method. If the FERC grants the relief requested by the LPSC in the proceeding, the relief may result in a material increase in the total production costs the FERC allocates to companies whose costs currently are projected to be less than the Entergy System average, and a material decrease in the total production costs the FERC allocates to companies whose costs currently are projected to exceed that average. If the FERC adopts the ALJ's Initial Decision, the amount of production costs that would be reallocated among the domestic utility companies would be determined through consideration of each domestic utility company's relative total production cost expressed as a percentage of Entergy System average total production cost. The ALJ's Initial Decision would reallocate production costs of the domestic utility companies whose percent of Entergy System average production cost are outside an upper or lower bandwidth. This would be accomplished by payments from domestic utility companies whose production costs are below Entergy System average production cost to domestic utility companies whose production costs are above Entergy System average production cost. An assessment of the potential effects of the ALJ's Initial Decision requires assumptions regarding the future total production cost of each domestic utility company, which assumptions include the mix of solid fuel and gas-fired generation available to each company and the costs of natural gas and purchased power. Entergy Louisiana and Entergy Gulf States are more dependent upon gas-fired generation than Entergy Arkansas, Entergy Mississippi, or Entergy New Orleans. Of these, Entergy Arkansas is the least dependent upon gas-fired generation. Therefore, increases in natural gas prices likely will increase the amount by which Entergy Arkansas' total production costs are below the average production costs of the domestic utility companies. Considerable uncertainty exists regarding future gas prices. Annual average Henry Hub gas prices have varied significantly over recent years, ranging from $1.72/mmBtu to $5.85/mmBtu for the 1995-2004 period, and averaging $3.43/mmBtu during the ten-year period 1995-2004 and $4.58/mmBtu during the five-year period 2000-2004. Recent market conditions have resulted in gas prices that have averaged $5.85/mmBtu for the twelve months ended December 2004. Based upon analyses considering the effect on future production costs if the FERC adopts the ALJ's Initial Decision, the following potential annual production cost reallocations among the domestic utility companies could result assuming annual average gas prices range from $6.39/mmBtu in 2005 declining to $4.97/mmBtu by 2009:
<table><tr><td></td><td>Range of Annual Paymentsor (Receipts)</td><td>Average AnnualPayments or (Receipts)for 2005-2009 Period</td></tr><tr><td></td><td>(In Millions)</td><td>(In Millions)</td></tr><tr><td>Entergy Arkansas</td><td>$154 to $281</td><td>$215</td></tr><tr><td>Entergy Gulf States</td><td>-$130 to ($15)</td><td>-$63</td></tr><tr><td>Entergy Louisiana</td><td>-$199 to ($98)</td><td>-$141</td></tr><tr><td>Entergy Mississippi</td><td>-$16 to $8</td><td>$1</td></tr><tr><td>Entergy New Orleans</td><td>-$17 to ($5)</td><td>-$12</td></tr></table>
Management believes that any changes in the allocation of production costs resulting from a FERC decision and related retail proceedings should result in similar rate changes for retail customers. The timing of recovery of these costs in rates could be the subject of additional proceedings at the APSC and elsewhere, however, and a delay in full recovery of any increased allocation of production costs could result in additional financing requirements. Although the outcome and timing of the FERC, APSC, and other proceedings cannot be predicted at this time, Entergy does not believe that the ultimate resolution of these proceedings will have a material effect on its financial condition or results of operation. In February 2004, the APSC issued an "Order of Investigation," in which it discusses the negative effect that implementation of the FERC ALJ's Initial Decision would have on Entergy Arkansas' customers. The APSC order establishes an investigation into whether Entergy Arkansas' continued participation in the System Agreement Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis 30 whether other procedural steps are necessary. The FERC has not yet ruled on the Emergency Interim Request for Rehearing submitted by Entergy. Entergy believes that it has complied with the provisions of its open access transmission tariff, including the provisions addressing the implementation of the AFC methodology; however, the ultimate scope of this proceeding cannot be predicted at this time. A hearing in the AFC proceeding is currently scheduled to commence in August 2005. Federal Legislation Federal legislation intended to facilitate wholesale competition in the electric power industry has been seriously considered by the United States Congress for the past several years. In the last Congress, both the House and Senate passed separate versions of comprehensive energy legislation, negotiated a conference package, and fell two votes short of bringing the conferenced bill up for a vote in the Senate. The bill contained electricity provisions that would, among other things, allow for participant funding of transmission interconnections and upgrades, repeal PUHCA, repeal or modify PURPA, enact a mechanism for establishing enforceable reliability standards, provide the FERC with new authority over utility mergers and acquisitions, and codify the FERC's authority over market- based rates. It is expected that the United States House and Senate will again craft and consider energy legislation in the 109th Congress. Market and Credit Risks Market risk is the risk of changes in the value of commodity and financial instruments, or in future operating results or cash flows, in response to changing market conditions. Entergy is exposed to the following significant market risks: ? The commodity price risk associated with Entergy's Non-Utility Nuclear and Energy Commodity Services segments. ? The foreign currency exchange rate risk associated with certain of Entergy's contractual obligations. ? The interest rate and equity price risk associated with Entergy's investments in decommissioning trust funds. Entergy is also exposed to credit risk. Credit risk is the risk of loss from nonperformance by suppliers, customers, or financial counterparties to a contract or agreement. Where it is a significant consideration, counterparty credit risk is addressed in the discussions that follow. Commodity Price Risk Power Generation The sale of electricity from the power generation plants owned by Entergy's Non-Utility Nuclear business and Energy Commodity Services, unless otherwise contracted, is subject to the fluctuation of market power prices. Entergy's Non-Utility Nuclear business has entered into PPAs and other contracts to sell the power produced by its power plants at prices established in the PPAs. Entergy continues to pursue opportunities to extend the existing PPAs and to enter into new PPAs with other parties. Following is a summary of the amount of the Non-Utility Nuclear business' output that is currently sold forward under physical or financial contracts at fixed prices:
<table><tr><td></td><td> 2005</td><td> 2006</td><td> 2007</td><td> 2008</td><td> 2009</td></tr><tr><td> Non-Utility Nuclear:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Percent of planned generation sold forward:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Unit-contingent</td><td>36%</td><td>20%</td><td>17%</td><td>1%</td><td>0%</td></tr><tr><td>Unit-contingent with availability guarantees</td><td>54%</td><td>52%</td><td>38%</td><td>25%</td><td>0%</td></tr><tr><td>Firm liquidated damages</td><td>4%</td><td>4%</td><td>2%</td><td>0%</td><td>0%</td></tr><tr><td>Total</td><td>94%</td><td>76%</td><td>57%</td><td>26%</td><td>0%</td></tr><tr><td>Planned generation (TWh)</td><td>34</td><td>35</td><td>34</td><td>34</td><td>35</td></tr><tr><td>Average contracted price per MWh</td><td>$39</td><td>$41</td><td>$42</td><td>$44</td><td>N/A</td></tr></table>
Entergy Corporation Notes to Consolidated Financial Statements 82 Upon implementation of SFAS 143 in 2003, assets and liabilities increased $1.1 billion for the U. S. Utility segment as a result of recording the asset retirement obligations at their fair values of $1.1 billion as determined under SFAS 143, increasing utility plant by $287 million, reducing accumulated depreciation by $361 million, and recording the related regulatory assets of $422 million. The implementation of SFAS 143 for the portion of River Bend not subject to cost-based ratemaking decreased earnings by $21 million net-of-tax as a result of a one-time cumulative effect of accounting change. In accordance with ratemaking treatment and as required by SFAS 71, the depreciation provisions for the domestic utility companies and System Energy include a component for removal costs that are not asset retirement obligations under SFAS 143. In accordance with regulatory accounting principles, Entergy has recorded a regulatory asset for certain of its domestic utility companies and System Energy of $86.9 million as of December 31, 2004 and $72.4 million as of December 31, 2003 to reflect an estimate of incurred but uncollected removal costs previously recorded as a component of accumulated depreciation. The decommissioning and retirement cost liability for certain of the domestic utility companies and System Energy includes a regulatory liability of $34.6 million as of December 31, 2004 and $26.8 million as of December 31, 2003 representing an estimate of collected but not yet incurred removal costs. For the Non-Utility Nuclear business, the implementation of SFAS 143 resulted in a decrease in liabilities of $595 million due to reductions in decommissioning liabilities, a decrease in assets of $340 million, including a decrease in electric plant in service of $315 million, and an increase in earnings in 2003 of $155 million net-of-tax as a result of a one-time cumulative effect of accounting change. The cumulative decommissioning liabilities and expenses recorded in 2004 by Entergy were as follows: |
3.77667 | What's the average of U.S. Plans in 2016 for Pension? | Private equity fund investments included above are not redeemable, because distributions from the funds will be received when underlying investments of the funds are liquidated. Private equity funds are generally expected to have 10-year lives at their inception, but these lives may be extended at the fund manager’s discretion, typically in one or two-year increments. At December 31, 2018, assuming average original expected lives of 10 years for the funds, 14 percent of the total fair value using net asset value per share (or its equivalent) presented above would have expected remaining lives of three years or less, 43 percent between four and six years and 43 percent between seven and 10 years. The hedge fund investments included above, which are carried at fair value, are generally redeemable monthly (35 percent), quarterly (32 percent), semi-annually (9 percent) and annually (24 percent), with redemption notices ranging from one day to 180 days. At December 31, 2018, investments representing approximately 51 percent of the total fair value of these hedge fund investments had partial contractual redemption restrictions. These partial redemption restrictions are generally related to one or more investments held in the hedge funds that the fund manager deemed to be illiquid. The majority of these contractual restrictions, which may have been put in place at the fund’s inception or thereafter, have pre-defined end dates. The majority of these restrictions are generally expected to be lifted by the end of 2019. FAIR VALUE OPTION Under the fair value option, we may elect to measure at fair value financial assets and financial liabilities that are not otherwise required to be carried at fair value. Subsequent changes in fair value for designated items are reported in earnings. We elect the fair value option for certain hybrid securities given the complexity of bifurcating the economic components associated with the embedded derivatives. For additional information related to embedded derivatives refer to Note 11 herein. Additionally, we elect the fair value option for certain alternative investments when such investments are eligible for this election. We believe this measurement basis is consistent with the applicable accounting guidance used by the respective investment company funds themselves. For additional information on securities and other invested assets for which we have elected the fair value option refer to Note 6 herein. The following table presents the gains or losses recorded related to the eligible instruments for which we elected the fair value option:
<table><tr><td> Years Ended December 31,</td><td colspan="3">Gain (Loss)</td></tr><tr><td><i>(in millions)</i></td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td> Assets:</td><td></td><td></td><td></td></tr><tr><td>Bond and equity securities</td><td>$343</td><td>$1,646</td><td>$447</td></tr><tr><td>Alternative investments<sup>(a)</sup></td><td>213</td><td>509</td><td>28</td></tr><tr><td>Other, including Short-term investments</td><td>-</td><td>1</td><td>-</td></tr><tr><td> Liabilities:</td><td></td><td></td><td></td></tr><tr><td>Long-term debt<sup>(b)</sup></td><td>-1</td><td>-49</td><td>-9</td></tr><tr><td>Other liabilities</td><td>-</td><td>-2</td><td>-</td></tr><tr><td> Total gain</td><td>$555</td><td>$2,105</td><td>$466</td></tr></table>
(a) Includes certain hedge funds, private equity funds and other investment partnerships. (b) Includes GIAs, notes, bonds and mortgages payable. Interest income and dividend income on assets measured under the fair value option are recognized and included in Net investment income in the Consolidated Statements of Income with the exception of activity within AIG’s Other Operations category, which is included in Other income. Interest expense on liabilities measured under the fair value option is reported in Other Income in the Consolidated Statements of Income. For additional information about our policies for recognition, measurement, and disclosure of interest and dividend income see Note 6 herein. 8. Reinsurance In the ordinary course of business, our insurance companies may use both treaty and facultative reinsurance to minimize their net loss exposure to any single catastrophic loss event or to an accumulation of losses from a number of smaller events or to provide greater diversification of our businesses. In addition, our general insurance subsidiaries assume reinsurance from other insurance companies. We determine the portion of the incurred but not reported (IBNR) loss that will be recoverable under our reinsurance contracts by reference to the terms of the reinsurance protection purchased. This determination is necessarily based on the estimate of IBNR and accordingly, is subject to the same uncertainties as the estimate of IBNR. Reinsurance assets include the balances due from reinsurance and insurance companies under the terms of our reinsurance agreements for paid and unpaid losses and loss adjustment expenses incurred, ceded unearned premiums and ceded future policy benefits for life and accident and health insurance contracts and benefits paid and unpaid. Amounts related to paid and unpaid losses and benefits and loss expenses with respect to these reinsurance agreements are substantially collateralized. We remain liable to the extent that our reinsurers do not meet their obligation under the reinsurance contracts, and as such, we regularly evaluate the financial condition of our reinsurers and monitor concentration of our credit risk. The estimation of the allowance for doubtful accounts requires judgment for which key inputs typically include historical trends regarding uncollectible balances, disputes and credit events as well as specific reviews of balances in dispute or subject to credit impairment. The allowance for doubtful accounts on reinsurance assets was $140 million and $187 million at December 31, 2018 and 2017, respectively. Changes in the allowance for doubtful accounts on reinsurance assets are reflected in Policyholder benefits and losses incurred within the Consolidated Statements of Income. The following table provides supplemental information for loss and benefit reserves, gross and net of ceded reinsurance:
<table><tr><td> At December 31,</td><td rowspan="2">2018 As Reported</td><td></td><td rowspan="2">2017 As Reported</td><td></td></tr><tr><td><i>(in millions)</i></td><td>Net of Reinsurance</td><td>Net of Reinsurance</td></tr><tr><td>Liability for unpaid losses and loss adjustment expenses</td><td>$-83,639</td><td>$-51,949</td><td>$-78,393</td><td>$-51,685</td></tr><tr><td>Future policy benefits for life and accident and health insurance contracts</td><td>-44,935</td><td>-43,936</td><td>-45,432</td><td>-44,457</td></tr><tr><td>Reserve for unearned premiums</td><td>-19,248</td><td>-16,300</td><td>-19,030</td><td>-15,890</td></tr><tr><td>Reinsurance assets<sup>(a)</sup></td><td>35,637</td><td></td><td>30,823</td><td></td></tr></table>
(a) Represents gross reinsurance assets, excluding allowances and reinsurance recoverable on paid losses. SHORT-DURATION REINSURANCE Short-duration reinsurance is effected under reinsurance treaties and by negotiation on individual risks. Certain of these reinsurance arrangements consist of excess of loss contracts that protect us against losses above stipulated amounts. Ceded premiums are considered prepaid reinsurance premiums and are recognized as a reduction of premiums earned over the contract period in proportion to the protection received. Amounts recoverable from reinsurers on short-duration contracts are estimated in a manner consistent with the claims liabilities associated with the reinsurance and presented as a component of Reinsurance assets. Reinsurance premiums for assumed business are estimated based on information received from brokers, ceding companies and reinsurers. Any subsequent differences arising on such estimates are recorded in the periods in which they are determined. Assumed reinsurance premiums are earned primarily on a pro-rata basis over the terms of the reinsurance contracts and the portion of premiums relating to the unexpired terms of coverage is included in the reserve for unearned premiums. Reinsurance premiums for assumed business are estimated based on information received from brokers, ceding companies and reinsureds. Any subsequent differences arising on such estimates are recorded in the periods in which they are determined. For both ceded and assumed reinsurance, risk transfer requirements must be met for reinsurance accounting to apply. If risk transfer requirements are not met, the contract is accounted for as a deposit, resulting in the recognition of cash flows under the contract through a deposit asset or liability and not as revenue or expense. To meet risk transfer requirements, a reinsurance contract must include both insurance risk, consisting of both underwriting and timing risk, and a reasonable possibility of a significant loss for the assuming entity. Similar risk transfer criteria are used to determine whether directly written insurance contracts should be accounted for as insurance or as a deposit. The following table presents the weighted average assumptions used to determine the net periodic benefit costs:
<table><tr><td></td><td colspan="2">Pension</td><td colspan="2">Postretirement</td><td></td></tr><tr><td> </td><td>U.S. Plans</td><td>Non-U.S. Plans *</td><td>U.S. Plans</td><td>Non-U.S. Plans<sup>*</sup></td><td></td></tr><tr><td> For the Year Ended December 31, 2018</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rate</td><td>3.61%</td><td>1.60%</td><td>3.53%</td><td> 3.59</td><td> %</td></tr><tr><td>Rate of compensation increase</td><td>N/A</td><td>2.27%</td><td>N/A</td><td> 3.00</td><td> %</td></tr><tr><td>Expected return on assets</td><td>6.75%</td><td>2.78%</td><td>N/A</td><td> N/A</td><td> </td></tr><tr><td> For the Year Ended December 31, 2017</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rate</td><td>4.15%</td><td>1.50%</td><td>4.01%</td><td>3.95%</td><td></td></tr><tr><td>Rate of compensation increase</td><td>N/A</td><td>2.50%</td><td>N/A</td><td>3.38%</td><td></td></tr><tr><td>Expected return on assets</td><td>7.00%</td><td>2.92%</td><td>N/A</td><td>N/A</td><td></td></tr><tr><td> For the Year Ended December 31, 2016</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rate</td><td>4.33%</td><td>2.17%</td><td>4.21%</td><td>4.09%</td><td></td></tr><tr><td>Rate of compensation increase</td><td>N/A%</td><td>2.64%</td><td>N/A</td><td>3.43%</td><td></td></tr><tr><td>Expected return on assets</td><td>7.00%</td><td>3.28%</td><td>N/A</td><td>N/A</td><td></td></tr></table>
* The non-U. S. plans reflect those assumptions that were most appropriate for the local economic environments of the subsidiaries providing such benefits. Discount Rate Methodology The projected benefit cash flows under the U. S. AIG Retirement Plan were discounted using the spot rates derived from the Mercer U. S. Pension Discount Yield Curve at December 31, 2018 and 2017, which resulted in a single discount rate that would produce the same liability at the respective measurement dates. The discount rates were 4.22 percent at December 31, 2018 and 3.61 percent at December 31, 2017. The methodology was consistently applied for the respective years in determining the discount rates for the other U. S. pension plans. In general, the discount rates for the non-U. S. plans were developed using a similar methodology to the U. S. AIG Retirement plan, by using country-specific Mercer Yield Curves. The projected benefit obligation for AIG’s Japan pension plans represents approximately 52 percent and 50 percent of the total projected benefit obligations for our non-U. S. pension plans at December 31, 2018 and 2017, respectively. The weighted average discount rate of 0.72 percent and 0.66 percent at December 31, 2018 and 2017, respectively, was selected by reference to the Mercer Yield Curve for Japan. Plan Assets The investment strategy with respect to assets relating to our U. S. and non-U. S. pension plans is designed to achieve investment returns that will provide for the benefit obligations of the plans over the long term, limit the risk of short-term funding shortfalls and maintain liquidity sufficient to address cash needs. Accordingly, the asset allocation strategy is designed to maximize the investment rate of return while managing various risk factors, including, but not limited to, volatility relative to the benefit obligations, liquidity, diversification and concentration, and incorporates the risk/return profile applicable to each asset class. There were no shares of AIG Common Stock included in the U. S. and non-U. S. pension plans assets at December 31, 2018 or 2017. Financial Assurance We must 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, or insurance policies (Financial Assurance Instruments), or trust deposits, which are included in restricted cash and marketable securities and other assets in our consolidated balance sheets. 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 require a third-party engineering specialist to determine the estimated capping, closure and post-closure 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 must 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 2016, although the mix of Financial Assurance Instruments may change. These Financial Assurance Instruments are issued in the normal course of business and are not considered indebtedness. Because we currently have no liability for the Financial Assurance Instruments, they are not reflected in our consolidated balance sheets; however, we record capping, closure and post-closure liabilities and insurance liabilities as they are incurred. Off-Balance Sheet Arrangements We have no off-balance sheet debt or similar obligations, other than operating leases and financial assurances, which are not classified as debt. We have no transactions or obligations with related parties that are not disclosed, consolidated into or reflected in our reported financial position or results of operations. We have not guaranteed 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. The following table calculates our free cash flow for the years ended December 31, 2015, 2014 and 2013 (in millions of dollars):
<table><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Cash provided by operating activities</td><td>$1,679.7</td><td>$1,529.8</td><td>$1,548.2</td></tr><tr><td>Purchases of property and equipment</td><td>-945.6</td><td>-862.5</td><td>-880.8</td></tr><tr><td>Proceeds from sales of property and equipment</td><td>21.2</td><td>35.7</td><td>23.9</td></tr><tr><td>Free cash flow</td><td>$755.3</td><td>$703.0</td><td>$691.3</td></tr></table>
For a discussion of the changes in the components of free cash flow, see our discussion regarding Cash Flows Provided By Operating Activities and Cash Flows Used In Investing Activities contained elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
0.06238 | What is the percentage of Net occupancy in relation to the total in 2005? (in %) | Investment tax credits have been deferred by the regulated utility subsidiaries and are being amortized to income over the average estimated service lives of the related assets. The Company recognizes accrued interest and penalties related to tax positions as a component of income tax expense and accounts for sales tax collected from customers and remitted to taxing authorities on a net basis. See Note 14—Income Taxes for additional information. Allowance for Funds Used During Construction AFUDC is a non-cash credit to income with a corresponding charge to utility plant that represents the cost of borrowed funds or a return on equity funds devoted to plant under construction. The regulated utility subsidiaries record AFUDC to the extent permitted by the PUCs. The portion of AFUDC attributable to borrowed funds is shown as a reduction of Interest, net on the Consolidated Statements of Operations. Any portion of AFUDC attributable to equity funds would be included in Other, net on the Consolidated Statements of Operations. AFUDC is provided in the following table for the years ended December 31:
<table><tr><td></td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Allowance for other funds used during construction</td><td>$24</td><td>$19</td><td>$15</td></tr><tr><td>Allowance for borrowed funds used during construction</td><td>13</td><td>8</td><td>6</td></tr></table>
Environmental Costs The Company’s water and wastewater operations and the operations of its Market-Based Businesses are subject to U. S. federal, state, local and foreign requirements relating to environmental protection, and as such, the Company periodically becomes subject to environmental claims in the normal course of business. Environmental expenditures that relate to current operations or provide a future benefit are expensed or capitalized as appropriate. Remediation costs that relate to an existing condition caused by past operations are accrued, on an undiscounted basis, when it is probable that these costs will be incurred and can be reasonably estimated. A conservation agreement entered into by a subsidiary of the Company with the National Oceanic and Atmospheric Administration in 2010 and amended in 2017 required the subsidiary to, among other provisions, implement certain measures to protect the steelhead trout and its habitat in the Carmel River watershed in the State of California. The subsidiary agreed to pay $1 million annually commencing in 2010 with the final payment being made in 2021. Remediation costs accrued amounted to $4 million and $6 million as of December 31, 2018 and 2017, respectively. Derivative Financial Instruments The Company uses derivative financial instruments for purposes of hedging exposures to fluctuations in interest rates. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments. All derivatives are recognized on the balance sheet at fair value. On the date the derivative contract is entered into, the Company may designate the derivative as a hedge of the fair value of a recognized asset or liability (fair-value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). Changes in the fair value of a fair-value hedge, along with the gain or loss on the underlying hedged item, are recorded in current-period earnings. The gains and losses on the effective portion of cash-flow hedges are recorded in other comprehensive income, until earnings are affected by the variability of cash flows. Any ineffective portion of designated cash-flow hedges is recognized in current-period earnings. Revenue
<table><tr><td></td><td colspan="4">Year Ended</td><td colspan="4">Year Ended</td></tr><tr><td></td><td>January 25,2015</td><td>January 26,2014</td><td>$Change</td><td>%Change</td><td>January 26,2014</td><td>January 27,2013</td><td>$Change</td><td>%Change</td></tr><tr><td></td><td colspan="4">(In millions)</td><td colspan="4">(In millions)</td></tr><tr><td>GPU</td><td>$3,838.9</td><td>$3,468.1</td><td>$370.8</td><td>11%</td><td>$3,468.1</td><td>$3,251.7</td><td>$216.4</td><td>7%</td></tr><tr><td>Tegra Processor</td><td>578.6</td><td>398.0</td><td>180.6</td><td>45%</td><td>398.0</td><td>764.4</td><td>-366.4</td><td>-48%</td></tr><tr><td>All Other</td><td>264.0</td><td>264.0</td><td>—</td><td>—%</td><td>264.0</td><td>264.0</td><td>—</td><td>—%</td></tr><tr><td>Total</td><td>$4,681.5</td><td>$4,130.1</td><td>$551.4</td><td>13%</td><td>$4,130.1</td><td>$4,280.1</td><td>$-150.0</td><td>-4%</td></tr></table>
Revenue was $4.68 billion, $4.13 billion and $4.28 billion for fiscal years 2015, 2014 and 2013, respectively. A discussion of our revenue results for each of our reporting segments and the All Other category is as follows: GPU Business. GPU business revenue increased by 11% in fiscal year 2015 compared to fiscal year 2014. This increase was due primarily to higher revenue from GeForce GTX GPUs and associated memory for gaming, reflecting a combination of continued strength in PC gaming and increased sales of our Maxwell-based GPU products. Revenue from Tesla for accelerated datacenter computing increased due to large project wins with cloud service providers and revenue from our NVIDIA GRID virtualization products also increased as this platform gained momentum. Revenue from GPU products for mainstream PC OEMs declined compared to last year. GPU business revenue increased by 7% in fiscal year 2014 compared to fiscal year 2013. This increase was largely attributable to strength in our high-end GeForce GTX GPUs driven by gaming market segment demand. The GPU business also benefited from higher sales of Tesla accelerated datacenter computing and Quadro enterprise products in fiscal year 2014. Offsetting these growth areas were declines in the overall market for mainstream desktop PCs and notebooks, which contributed to lower unit volumes of our mainstream GeForce GPUs. Tegra Processor Business. Tegra Processor business revenue increased by 45% in fiscal year 2015 compared to fiscal year 2014. This increase was driven by higher sales of Tegra products serving automotive infotainment systems, smartphones and tablet devices, and the onset of SHIELD tablet sales in fiscal year 2015. Tegra Processor business revenue decreased by 48% in fiscal year 2014 compared to fiscal year 2013. This decrease was primarily due to lower sales of our previous generation Tegra 3-based products for smartphones and tablet devices. Additionally, sales of our embedded products for entertainment devices and revenue from license fees related to game consoles also decreased during fiscal year 2014. These decreases were partially offset by increased sales of Tegra 4-based products for smartphones and tablet devices, as well as for automotive infotainment systems. All Other. License revenue from the patent cross licensing arrangement we entered into with Intel in January 2011 was flat at $264.0 million for fiscal years 2015, 2014 and 2013. Concentration of Revenue Revenue from sales to customers outside of the United States and Other Americas accounted for 75% of total revenue for both fiscal years 2015 and 2014, and 74% of total revenue for fiscal year 2013. Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if the revenue is attributable to end customers in a different location. Total intangible asset amortization expense in 2017, 2016 and 2015 was $145,128, $108,019 and $109,887, respectively. Estimated intangible asset amortization expense for the five years ending June 30, 2018 through 2022 is $219,238, $209,047, $200,242, $191,520 and $155,482, respectively. Intangible assets are evaluated for impairment whenever events or circumstances indicate that the undiscounted net cash flows to be generated by their use over their expected useful lives and eventual disposition may be less than their net carrying value. No such events occurred in 2017, 2016 or 2015.8. Financing Arrangements The Company has a line of credit totaling $2,000,000 through a multi-currency revolving credit agreement with a group of banks, $1,465,800 of which was available at June 30, 2017. The credit agreement expires in October 2021; however, the Company has the right to request a one-year extension of the expiration date on an annual basis, which request may result in changes to the current terms and conditions of the credit agreement. Advances from the credit agreement can be used for general corporate purposes, including acquisitions, and for the refinancing of existing indebtedness. The credit agreement requires the payment of an annual facility fee, the amount of which may increase in the event the Company's credit ratings are lowered. Although a lowering of the Company's credit ratings would likely increase the cost of future debt, it would not limit the Company's ability to use the credit agreement nor would it accelerate the repayment of any outstanding borrowings. The Company is currently authorized to sell up to $2,000,000 of short-term commercial paper notes. At June 30, 2017, $534,200 of commercial paper notes were outstanding and $303,700 commercial paper notes were outstanding at June 30, 2016. In addition to commercial paper notes, notes payable includes short-term lines of credit and borrowings from foreign banks. At June 30, 2017, the Company had $62,946 in lines of credit from various foreign banks, none of which had amounts outstanding at June 30, 2017 or at June 30, 2016. Most of these agreements are renewed annually. The weighted-average interest rate on notes payable during both 2017 and 2016 was 0.3 percent. The Company's foreign locations in the ordinary course of business may enter into financial guarantees through financial institutions which enable customers to be reimbursed in the event of nonperformance by the Company. The Company's credit agreements and indentures governing certain debt agreements contain various covenants, the violation of which would limit or preclude the use of the applicable agreements for future borrowings, or might accelerate the maturity of the related outstanding borrowings covered by the applicable agreements. Based on the Company's rating level at June 30, 2017, the most restrictive financial covenant provides that the ratio of debt to debt-shareholders' equity cannot exceed 0.60 to 1.0. As of June 30, 2017, the Company's debt to debt-shareholders' equity ratio was 0.529 to 1.0. The Company is in compliance with all covenants.9. Debt
<table><tr><td>June 30,</td><td>2017</td><td>2016</td></tr><tr><td>Domestic:</td><td></td><td></td></tr><tr><td>Fixed rate medium-term notes, 3.30% to 6.55%, due 2018-2045</td><td>$2,675,000</td><td>$2,675,000</td></tr><tr><td>Senior Notes, 3.25% to 4.10%, due 2027 - 2047</td><td>1,300,000</td><td>—</td></tr><tr><td>Term loan, Libor plus 100 bps, due 2020</td><td>493,750</td><td>—</td></tr><tr><td>Foreign:</td><td></td><td></td></tr><tr><td>Euro Senior Notes, 1.125%, due 2025</td><td>799,890</td><td>—</td></tr><tr><td>Euro Term loan, Libor plus 150 bps, due 2022</td><td>114,270</td><td>—</td></tr><tr><td>Japanese Yen credit facility, JPY Libor plus 55 bps, due 2017</td><td>—</td><td>58,140</td></tr><tr><td>Other long-term debt</td><td>433</td><td>—</td></tr><tr><td>Deferred debt issuance costs</td><td>-47,183</td><td>-22,596</td></tr><tr><td>Total long-term debt</td><td>5,336,160</td><td>2,710,544</td></tr><tr><td>Less: Long-term debt payable within one year</td><td>474,265</td><td>58,087</td></tr><tr><td>Long-term debt, net</td><td>$4,861,895</td><td>$2,652,457</td></tr></table>
The following table presents the detail of noninterest expense and the percent change, year over year:
<table><tr><td> </td><td colspan="5"> Year Ended December 31,</td></tr><tr><td> </td><td> 2005</td><td> 2004</td><td> % Change 2005/2004</td><td> 2003</td><td> % Change 2004/2003</td></tr><tr><td> </td><td colspan="5"> (Dollars in thousands)</td></tr><tr><td>Compensation and benefits</td><td>$163,590</td><td>$153,897</td><td>6.3%</td><td>$121,653</td><td>26.5%</td></tr><tr><td>Professional services</td><td>28,729</td><td>17,068</td><td>68.3</td><td>13,677</td><td>24.8</td></tr><tr><td>Net occupancy</td><td>16,210</td><td>18,134</td><td>-10.6</td><td>17,638</td><td>2.8</td></tr><tr><td>Furniture and equipment</td><td>12,824</td><td>12,403</td><td>3.4</td><td>11,289</td><td>9.9</td></tr><tr><td>Business development and travel</td><td>10,647</td><td>9,718</td><td>9.6</td><td>8,692</td><td>11.8</td></tr><tr><td>Correspondent bank fees</td><td>5,530</td><td>5,340</td><td>3.6</td><td>4,343</td><td>23.0</td></tr><tr><td>Data processing services</td><td>4,105</td><td>3,647</td><td>12.6</td><td>4,288</td><td>-14.9</td></tr><tr><td>Telephone</td><td>3,703</td><td>3,367</td><td>10.0</td><td>3,187</td><td>5.6</td></tr><tr><td>Postage and supplies</td><td>3,075</td><td>3,255</td><td>-5.5</td><td>2,601</td><td>25.1</td></tr><tr><td>Tax credit fund amortization</td><td>2,388</td><td>2,480</td><td>-3.7</td><td>2,704</td><td>-8.3</td></tr><tr><td>Impairment of goodwill</td><td>—</td><td>1,910</td><td>-100.0</td><td>63,000</td><td>-97.0</td></tr><tr><td>Provision for unfunded credit commitments</td><td>927</td><td>1,549</td><td>-45.4</td><td>2,504</td><td>-38.1</td></tr><tr><td>Trust preferred securities distributions</td><td>—</td><td>—</td><td>—</td><td>1,595</td><td>-100.0</td></tr><tr><td>Other</td><td>8,132</td><td>9,062</td><td>-9.4</td><td>7,725</td><td>17.3</td></tr><tr><td>Total noninterest expense</td><td>$259,860</td><td>$241,830</td><td>7.5%</td><td>$264,896</td><td>-8.7%</td></tr></table>
2005 Compared to 2004—Increases in Professional Services and Compensation and Benefits Expense The increase in compensation and benefits expense of $9.7 million was partly due to an increase in salaries and wages expense of $4.2 million, or 5.2%, to $85.0 million for 2005, compared to $80.9 million for 2004. The increase in salaries and wages is largely attributable to an increase in average full-time equivalent (FTE) personnel and higher rates of employee salaries and wages. Average FTE personnel increased by 31 to 1,029 in 2005 from 998 in 2004. Equity-based compensation increased by $3.6 million, or 105.1%, to $7.1 million for 2005, compared to $3.5 million for 2004. This increase reflects our increased use of restricted stock and restricted stock units, in lieu of stock options, as components of our employee compensation structure, as we transition our equity-based compensation programs. Professional service expense totaled $28.7 million for 2005, an increase of $11.7 million as compared to $17.1 million for 2004. The primary components of this net increase were associated with the commitment of resources to amend and restate our Form 10-K for the year ended December 31, 2004, the commitment of resources to document, enhance and audit internal controls to accomplish and adhere to the provisions of the Sarbanes-Oxley Act of 2002 and the independent audit of our internal controls, and expenses associated with certain Information Technology (“IT”) development projects. We expect our IT development project costs to increase in 2006. Net occupancy expense decreased between 2005 and 2004. We renegotiated the lease related to our corporate headquarters facility in Santa Clara, California, The term of the new corporate headquarters lease began retroactively on August 1, 2004, and will end on September 30, 2014, unless terminated on an earlier date. Based on the new lease terms, our corporate headquarters lease expense is lower than under our previous lease arrangement.2004 Compared to 2003—Decrease in Impairment of Goodwill, Increases in Compensation and Benefits and Professional Services Expense The increase in compensation and benefits expense of $32.2 million was primarily due to an increase in incentive compensation expense of $17.5 million, or 108.1 %, to $33.7 million during 2004, compared to $16.2 million during 2003. Incentive compensation at SVB Alliant increased $6.9 million and was driven by |
1.9975 | what is the yearly interest income generated by the collateralized credit facility provided to the real estate company for the execution of its property acquisitions program , in million cad? | 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. |
2 | How many Amount for Credit Card (a) exceed the average of Amount for Credit Card (a) in 2012? | HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Corporate Investments
<table><tr><td></td><td colspan="3">For the fiscal years ended October 31,</td></tr><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td></td><td colspan="3">Dollars in millions</td></tr><tr><td>Net revenue</td><td>$507</td><td>$543</td><td>$553</td></tr><tr><td>Loss from operations</td><td>$-108</td><td>$-91</td><td>$-91</td></tr><tr><td>Loss from operations as a % of net revenue</td><td>-21.3%</td><td>-16.8%</td><td>-16.5%</td></tr></table>
Fiscal 2019 compared with Fiscal 2018 Corporate Investments net revenue decreased by $36 million, or 6.6% (decreased 4.4% on a constant currency bases), in fiscal 2019 as compared to fiscal 2018. The decrease in Corporate Investments net revenue was due to lower services revenue from the Communications and Media Solutions (‘‘CMS’’) business and unfavorable currency fluctuations. Corporate Investments loss from operations as a percentage of net revenue increased 4.5 percentage points in fiscal 2019 as compared to fiscal 2018, due primarily to higher R&D expenses from Hewlett Packard Labs and a legal settlement expense in the CMS business, partially offset by a higher gross margin from the CMS business. Fiscal 2018 compared with Fiscal 2017 Corporate Investments net revenue decreased by $10 million, or 1.8% (decreased 4.0% on a constant currency bases), in fiscal 2018 as compared to fiscal 2017. The decrease in Corporate Investments net revenue, was due to lower services revenue from the CMS business. Corporate Investments loss from operations as a percentage of net revenue increased 0.3 percentage points in fiscal 2018 as compared to fiscal 2017, due primarily to the net revenue decline and a lower gross margin partially offset by lower R&D expenses from Hewlett Packard Labs, lower field selling costs and administrative expense from the CMS business. We use cash generated by operations as our primary source of liquidity. We believe that internally generated cash flows will be generally sufficient to support our operating businesses, capital expenditures, product development initiatives, acquisition and disposal activities including legal settlements, restructuring activities, transformation costs, indemnifications, maturing debt, interest payments, income tax payments, in addition to any future investments and any future share repurchases, and future stockholder dividend payments. We expect to supplement this short-term liquidity, if necessary, by accessing the capital markets, issuing commercial paper, and borrowing under credit facilities made available by various domestic and foreign financial institutions. However, our access to capital markets may be constrained and our cost of borrowing may increase under certain business, market and economic conditions. Our liquidity is subject to various risks including the risks identified in the section entitled ‘‘Risk Factors’’ in Item 1A and market risks identified in the section entitled ‘‘Quantitative and Qualitative Disclosures about Market Risk’’ in Item 7A, each of which is incorporated herein by reference. Our cash balances are held in numerous locations throughout the world, with a substantial amount held outside of the U. S. We utilize a variety of planning and financing strategies in an effort to ensure that our worldwide cash is available when and where it is needed. Our cash position is strong and we expect that our cash balances, anticipated cash flow generated from operations and access to capital markets will be sufficient to cover our expected near-term cash outlays. CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – A summary of our borrowings and known or estimated contractual obligations as of April 30, 2018, and the timing and effect that such commitments are expected to have on our liquidity and capital requirements in future periods is as follows:
<table><tr><td></td><td>Total</td><td>Less Than1 Year</td><td>1 - 3 Years</td><td>4 - 5 Years</td><td>After 5 Years</td></tr><tr><td>Long-term debt (including future interest payments)</td><td>$1,841,887</td><td>$72,688</td><td>$781,969</td><td>$591,292</td><td>$395,938</td></tr><tr><td>Contingent acquisition payments</td><td>12,060</td><td>6,979</td><td>5,081</td><td>—</td><td>—</td></tr><tr><td>Capital lease obligations</td><td>5,628</td><td>1,026</td><td>2,197</td><td>2,405</td><td>—</td></tr><tr><td>Operating leases</td><td>820,905</td><td>230,163</td><td>401,809</td><td>155,120</td><td>33,813</td></tr><tr><td>One-time transition tax liability</td><td>17,721</td><td>2,448</td><td>4,053</td><td>3,795</td><td>7,425</td></tr><tr><td>Guaranty on Refund Advance loans</td><td>1,571</td><td>1,571</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total contractual cash obligations</td><td>$2,699,772</td><td>$314,875</td><td>$1,195,109</td><td>$752,612</td><td>$437,176</td></tr></table>
The table above does not reflect unrecognized tax benefits of approximately $186 million due to the high degree of uncertainty regarding the future cash flows associated with these amounts. In connection with our agreement with BofI, we are required to purchase a 90% participation interest, at par, in all EAs originated by our lending partner. During fiscal year 2018, we decided to permanently close approximately 400 tax offices after this year's tax season and, as a result, wrote off $7.4 million in related leasehold improvements, furniture and signage. In conjunction with these office closures, we expect to incur $15 million to $20 million of expense in fiscal year 2019 as we exit the related operating leases. See discussion of contractual obligations and commitments in Item 8, within the notes to the consolidated financial statements. REGULATORY ENVIRONMENT – The federal government, various state, local, provincial and foreign governments, and some self-regulatory organizations have enacted statutes and ordinances, or adopted rules and regulations, regulating aspects of our business. These aspects include, but are not limited to, commercial income tax return preparers, income tax courses, the electronic filing of income tax returns, the offering of RTs, privacy, consumer protection, franchising, sales methods and banking. We determine the applicability of such statutes, ordinances, rules and regulations (collectively, Laws) and work to comply with those Laws that are applicable to us or our services or products. On November 17, 2017, the CFPB officially published the Payday Rule. Certain limited provisions of the Payday Rule became effective on January 16, 2018, but most provisions do not become effective until August 19, 2019. However, on January 16, 2018, the CFPB stated its intention to engage in a rulemaking process so that the CFPB may reconsider the Payday Rule, and industry groups have filed lawsuits challenging the rule. Given these developments, we are unsure whether, and in what form, the Payday Rule will go into effect. Depending on the outcome of the rulemaking process and litigation, which may include the Payday Rule becoming effective in its current form, the Payday Rule may have a material adverse impact on the EA product, our business, and our consolidated financial position, results of operations, and cash flows. We will continue to analyze the potential impact on the Company as the CFPB’s rulemaking process progresses. On October 5, 2016, the CFPB released the Prepaid Card Rule. The Prepaid Card Rule was scheduled to take effect on April 1, 2018, with certain provisions phased in over time following that date. However, on January 25, 2018, the CFPB amended the Prepaid Card Rule and extended the general effective date until April 1, 2019. Once effective, the Prepaid Card Rule will apply to the Emerald Card. The Prepaid Card Rule, among other things: (i) requires consumer disclosures to be made prior to acquiring a prepaid account; (ii) requires periodic statements or online access to specified account information; and (iii) requires online posting of the Cardholder Agreement and submission of new and revised Cardholder Agreements to the CFPB. We do not expect that the Prepaid Card Rule will have a material adverse effect on our business or our consolidated financial position, results of operations, and cash flows. From time to time in the ordinary course of business, we receive inquiries from governmental and self-regulatory agencies regarding the applicability of Laws to our services and products. In response to past inquiries, we have Table 70: Credit Card and Other Consumer Loan Classes Asset Quality Indicators
<table><tr><td></td><td colspan="2">Credit Card (a)</td><td colspan="2">Other Consumer (b)</td></tr><tr><td>Dollars in millions</td><td>Amount</td><td>% of Total Loans Using FICO Credit Metric</td><td>Amount</td><td>% of Total Loans Using FICO Credit Metric</td></tr><tr><td> December 31, 2012</td><td></td><td></td><td></td><td></td></tr><tr><td>FICO score greater than 719</td><td>$2,247</td><td>52%</td><td>$7,006</td><td>60%</td></tr><tr><td>650 to 719</td><td>1,169</td><td>27</td><td>2,896</td><td>25</td></tr><tr><td>620 to 649</td><td>188</td><td>5</td><td>459</td><td>4</td></tr><tr><td>Less than 620</td><td>271</td><td>6</td><td>602</td><td>5</td></tr><tr><td>No FICO score available or required (c)</td><td>428</td><td>10</td><td>741</td><td>6</td></tr><tr><td>Total loans using FICO credit metric</td><td>4,303</td><td>100%</td><td>11,704</td><td>100%</td></tr><tr><td>Consumer loans using other internal credit metrics (b)</td><td></td><td></td><td>9,747</td><td></td></tr><tr><td>Total loan balance</td><td>$4,303</td><td></td><td>$21,451</td><td></td></tr><tr><td>Weighted-average updated FICO score (d)</td><td></td><td>726</td><td></td><td>739</td></tr><tr><td>December 31, 2011</td><td></td><td></td><td></td><td></td></tr><tr><td>FICO score greater than 719</td><td>$2,016</td><td>51%</td><td>$5,556</td><td>61%</td></tr><tr><td>650 to 719</td><td>1,100</td><td>28</td><td>2,125</td><td>23</td></tr><tr><td>620 to 649</td><td>184</td><td>5</td><td>370</td><td>4</td></tr><tr><td>Less than 620</td><td>284</td><td>7</td><td>548</td><td>6</td></tr><tr><td>No FICO score available or required (c)</td><td>392</td><td>9</td><td>574</td><td>6</td></tr><tr><td>Total loans using FICO credit metric</td><td>3,976</td><td>100%</td><td>9,173</td><td>100%</td></tr><tr><td>Consumer loans using other internal credit metrics (b)</td><td></td><td></td><td>9,993</td><td></td></tr><tr><td>Total loan balance</td><td>$3,976</td><td></td><td>$19,166</td><td></td></tr><tr><td>Weighted-average updated FICO score (d)</td><td></td><td>723</td><td></td><td>739</td></tr></table>
(a) At December 31, 2012, we had $36 million of credit card loans that are higher risk (i. e. , loans with both updated FICO scores less than 660 and in late stage (90+ days) delinquency status). The majority of the December 31, 2012 balance related to higher risk credit card loans is geographically distributed throughout the following areas: Ohio 18%, Pennsylvania 14%, Michigan 12%, Illinois 8%, Indiana 6%, Florida 6%, New Jersey 5%, Kentucky 4%, and North Carolina 4%. All other states, none of which comprise more than 3%, make up the remainder of the balance. At December 31, 2011, we had $49 million of credit card loans that are higher risk. The majority of the December 31, 2011 balance related to higher risk credit card loans is geographically distributed throughout the following areas: Ohio 20%, Michigan 14%, Pennsylvania 13%, Illinois 7%, Indiana 7%, Florida 6% and Kentucky 5%. All other states, none of which comprise more than 4%, make up the remainder of the balance. (b) Other consumer loans for which updated FICO scores are used as an asset quality indicator include nongovernment guaranteed or insured education loans, automobile loans and other secured and unsecured lines and loans. Other consumer loans (or leases) for which other internal credit metrics are used as an asset quality indicator include primarily government guaranteed or insured education loans, as well as consumer loans to high net worth individuals and pools of auto loans (and leases) financed for PNC clients via securitization facilities. Other internal credit metrics may include delinquency status, geography, loan to value, asset concentrations, loss coverage multiples, net loss rates or other factors as well as servicer quality reviews associated with the securitizations or other factors. (c) Credit card loans and other consumer loans with no FICO score available or required refers to new accounts issued to borrowers with limited credit history, accounts for which we cannot obtain an updated FICO (e. g. , recent profile changes), cards issued with a business name, and/or cards secured by collateral. Management proactively assesses the risk and size of this loan portfolio and, when necessary, takes actions to mitigate the credit risk. (d) Weighted-average updated FICO score excludes accounts with no FICO score available or required. DEVON ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Debt maturities as of December 31, 2013, excluding premiums and discounts, are as follows (in millions):
<table><tr><td>2014</td><td>$4,067</td></tr><tr><td>2015</td><td>—</td></tr><tr><td>2016</td><td>500</td></tr><tr><td>2017</td><td>750</td></tr><tr><td>2018</td><td>125</td></tr><tr><td>2019 and thereafter</td><td>6,600</td></tr><tr><td>Total</td><td>$12,042</td></tr></table>
Credit Lines Devon has a $3.0 billion syndicated, unsecured revolving line of credit (the “Senior Credit Facility”) that matures on October 24, 2018. However, prior to the maturity date, Devon has the option to extend the maturity for up to one additional one-year period, subject to the approval of the lenders. Amounts borrowed under the Senior Credit Facility may, at the election of Devon, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. However, Devon may elect to borrow at the prime rate. The Senior Credit Facility currently provides for an annual facility fee of $3.8 million that is payable quarterly in arrears. As of December 31, 2013, there were no borrowings under the Senior Credit Facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon’s ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65 percent. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in the accompanying financial statements. Also, total capitalization is adjusted to add back noncash financial write-downs such as full cost ceiling impairments or goodwill impairments. As of December 31, 2013, Devon was in compliance with this covenant with a debt-tocapitalization ratio of 25.7 percent. Commercial Paper Devon has access to $3.0 billion of short-term credit under its commercial paper program. Commercial paper debt generally has a maturity of between 1 and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. The interest rate is generally based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found in the commercial paper market. As of December 31, 2013, Devon’s weighted average borrowing rate on its commercial paper borrowings was 0.30 percent. Other Debentures and Notes Following are descriptions of the various other debentures and notes outstanding at December 31, 2013, as listed in the table presented at the beginning of this note. GeoSouthern Debt In December 2013, in conjunction with the planned GeoSouthern acquisition, Devon issued $2.25 billion aggregate principal amount of fixed and floating rate senior notes resulting in cash proceeds of approximately Results of Operations – Capital Markets The following table presents consolidated financial information for the Capital Markets segment for the years indicated:
<table><tr><td></td><td colspan="5">Year Ended</td></tr><tr><td></td><td>September 30, 2007</td><td>% Incr. (Decr.)</td><td>September 30, 2006</td><td>% Incr. (Decr.)</td><td>September 30, 2005</td></tr><tr><td></td><td colspan="5">($ in 000's)</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Institutional Sales Commissions:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equity</td><td>$ 210,343</td><td>-3%</td><td>$ 217,840</td><td>13%</td><td>$ 193,001</td></tr><tr><td>Fixed Income</td><td>44,454</td><td>6%</td><td>41,830</td><td>-37%</td><td>66,431</td></tr><tr><td>Underwriting Fees</td><td>93,712</td><td>11%</td><td>84,303</td><td>8%</td><td>77,900</td></tr><tr><td>Mergers & Acquisitions Fees</td><td>59,929</td><td>34%</td><td>44,693</td><td>5%</td><td>42,576</td></tr><tr><td>Private Placement Fees</td><td>2,262</td><td>-3%</td><td>2,334</td><td>-56%</td><td>5,338</td></tr><tr><td>Trading Profits</td><td>9,262</td><td>-58%</td><td>21,876</td><td>15%</td><td>19,089</td></tr><tr><td>Raymond James Tax Credit Funds</td><td>35,123</td><td>11%</td><td>31,710</td><td>19%</td><td>26,630</td></tr><tr><td>Interest</td><td>46,772</td><td>29%</td><td>36,311</td><td>74%</td><td>20,847</td></tr><tr><td>Other</td><td>4,641</td><td>-29%</td><td>6,522</td><td>95%</td><td>3,339</td></tr><tr><td>Total Revenue</td><td>506,498</td><td>4%</td><td>487,419</td><td>7%</td><td>455,151</td></tr><tr><td>Interest Expense</td><td>56,841</td><td>23%</td><td>46,126</td><td>133%</td><td>19,838</td></tr><tr><td>Net Revenues</td><td>449,657</td><td>2%</td><td>441,293</td><td>1%</td><td>435,313</td></tr><tr><td>Non-Interest Expenses</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Sales Commissions</td><td>98,903</td><td>2%</td><td>96,649</td><td>-3%</td><td>99,223</td></tr><tr><td>Admin & Incentive Comp and Benefit Costs</td><td>204,512</td><td>2%</td><td>200,453</td><td>2%</td><td>197,170</td></tr><tr><td>Communications and Information Processing</td><td>32,366</td><td>20%</td><td>27,084</td><td>13%</td><td>24,071</td></tr><tr><td>Occupancy and Equipment</td><td>13,196</td><td>9%</td><td>12,073</td><td>-4%</td><td>12,563</td></tr><tr><td>Business Development</td><td>23,468</td><td>6%</td><td>22,177</td><td>17%</td><td>18,995</td></tr><tr><td>Clearance and Other</td><td>23,054</td><td>16%</td><td>19,907</td><td>38%</td><td>14,395</td></tr><tr><td>Total Non-Interest Expense</td><td>395,499</td><td>5%</td><td>378,343</td><td>3%</td><td>366,417</td></tr><tr><td>Income Before Taxes and Minority Interest</td><td>54,158</td><td>-14%</td><td>62,950</td><td>-9%</td><td>68,896</td></tr><tr><td>Minority Interest</td><td>-14,808</td><td></td><td>-15,271</td><td></td><td>-8,437</td></tr><tr><td>Pre-tax Earnings</td><td>$ 68,966</td><td>-12%</td><td>$ 78,221</td><td>1%</td><td>$ 77,333</td></tr></table>
Year ended September 30, 2007 Compared with the Year ended September 30, 2006 – Capital Markets The Capital Markets segment pre-tax earnings declined 12% despite a 2% increase in net revenues. Commission revenue was down slightly, the net of a decline in equity commissions related to the decline in commissions generated by underwriting transactions, and an increase in fixed income commissions, a result of the increased volatility. Commissions generated by underwriting transactions reached a record $41 million in the prior year and were only $22 million in the current year. The increase in underwriting fees included increases of $3 million at RJA, despite a decline in the number of deals from 97 to 78, and $3 million at RJ Ltd. on 30 deals versus 29 in the prior year. Merger and acquisition fees were up $15 million, reaching an all time record level of $60 million for the year. During fiscal 2007, RJA closed 15 individual merger and acquisition transactions with fees in excess of $1 million. Trading profits were down 58% from the prior year, reflecting a particularly difficult fixed income trading environment during the fourth quarter. As credit issues drove fixed income product values down there was a flight to quality and the firm’s economic hedges (short positions in US Treasuries) contributed additional losses. Meanwhile, there were also increased losses in equity customer facilitations and OTC market making. Raymond James Tax Credit Fund (“RJTCF”) revenues increased 11% as they invested $375 million for institutional investors versus $277 million in the prior year. Interest revenue increased related to higher average fixed income inventory levels. Expenses were generally in line with revenue growth with two exceptions. Communications and information processing increased predominantly due to increased costs associated with market information systems and software development costs. Other expense reflects a shift to the use of electronic and other non-exchange clearing methods and includes transaction related underwriting expenses incurred by RJTCF. Year ended September 30, 2006 Compared with the Year ended September 30, 2005 – Capital Markets The Capital Markets segment’s revenues and pre-tax profits increased just slightly from the prior year’s record results. Commission revenues in the segment were flat, as a 37% decline in fixed income commissions was offset by the 13% increase in institutional equity commissions, the latter continuing to be fueled by an active new issue market. RJA equity market conditions remained strong, allowing RJA to complete 97 managed or co-managed domestic underwritings, just one short of the record 98 underwritings completed in fiscal 2005. RJ Ltd. completed a record 29 managed or co-managed underwritings, up nine from fiscal 2005. Merger and acquisition fees increased modestly from the prior year's record level, offsetting the decline in private placement fees. Equity Capital Market's most active strategic business units in fiscal 2006 were Energy, Technology, Financial Services and Real Estate. increased taxes, licenses and fees by $25 million. These factors combined to result in a 0.5 point negative impact on the Personal segment’s 2005 underwriting expense ratio. In 2004, the 1.2 increase in the underwriting expense ratio over 2003 reflected the impact of the same investments described above. |
4.64711 | In the years with lowest amount of Operating lease obligations in table 1, what's the increasing rate of Pension and other postretirement cash requirements in table 1? | Revenues N&SS revenues decreased 1% in 2008 and 2% in 2007. The decrease of $137 million in 2008 is primarily due to decreased revenues in FCS, Proprietary and satellite programs partially offset by increased revenues in the SBInet program. The decrease of $292 million in 2007 was primarily due to the exclusion of government Delta volume, now a component of our equity investment in ULA and lower FCS volume, partially offset by increased volume on SBInet and several satellite programs. Delta launch and new-build satellite deliveries were as follows:
<table><tr><td>Years ended December 31,</td><td> 2008</td><td>2007</td><td>2006</td></tr><tr><td>Delta II Commercial</td><td> 2</td><td>3</td><td></td></tr><tr><td>Delta II Government</td><td></td><td></td><td>2</td></tr><tr><td>Delta IV Government</td><td></td><td></td><td>3</td></tr><tr><td>Satellites</td><td> 1</td><td>4</td><td>4</td></tr></table>
Delta government launches are excluded from our deliveries after December 1, 2006 due to the formation of ULA. Operating Earnings N&SS operating earnings increased by $171 million in 2008 was primarily due to increased earnings from our investment in ULA. The decrease in 2007 was due to lower earnings on FCS and several satellite programs. These decreases were partially offset by higher award fees on GMD and a $44 million gain on sale of a property in Anaheim. N&SS operating earnings include equity earnings of $73 million, $85 million and $71 million from the United Space Alliance joint venture in 2008, 2007, and 2006, respectively and equity earnings of $105 million, a loss of $11 million and equity earnings of $5 million from the ULA joint venture in 2008, 2007 and 2006, respectively. The ULA equity earnings and loss amounts are net of the basis difference amortization. Research and Development The N&SS research and development funding remains focused on the development of communications, command and control, computers, intelligence, surveillance and reconnaissance systems (C4ISR); communications and command and control (C3) capabilities that support a network-enabled architecture approach for our various government customers. We are investing in communications capabilities to enable connectivity between existing air/ground platforms, increase communications availability and bandwidth through more robust space systems, and leverage innovative communications concepts. Key programs in this area include JTRS, FCS, Global Positioning System, Tracking and Data Relay Satellite, Ares 1 Crew Launch Vehicle and GMD. Investments were also made to support concepts that may lead to the development of next-generation space intelligence systems. Along with increased funding to support these areas of architecture and network-enabled capabilities development, we also maintained our investment levels in global missile defense and advanced missile defense concepts and technologies. Backlog N&SS total backlog decreased by 12% in 2008 compared with 2007 primarily due to revenues recognized on multi-year orders received in prior years on FCS, GMD and C3 programs, partially offset by an increase in the International Space Station program. Total backlog decreased by 7% in 2007 compared with 2006 due to revenues recognized on FCS and Proprietary programs, partially offset by an increase in Space Exploration programs. Additional Considerations Items which could have a future impact on N&SS operations include the following: United Launch Alliance On December 1, 2006, we completed the transaction with Lockheed Martin Corporation (Lockheed) to create a 50/50 joint venture named United Launch Alliance L. L. C. (ULA). ULA combines the production, engineering, test and launch operations associated with U. S. government launches of Boeing Delta and Lockheed Atlas rockets. In connection with the transaction, billion of unused borrowing on revolving credit line agreements. We anticipate that these credit lines will primarily serve as backup liquidity to support our general corporate borrowing needs. Financing commitments totaled $18.1 billion and $15.9 billion as of December 31, 2012 and 2011. We anticipate that we will not be required to fund a significant portion of our financing commitments as we continue to work with third party financiers to provide alternative financing to customers. Historically, we have not been required to fund significant amounts of outstanding commitments. However, there can be no assurances that we will not be required to fund greater amounts than historically required. In the event we require additional funding to support strategic business opportunities, our commercial aircraft financing commitments, unfavorable resolution of litigation or other loss contingencies, or other business requirements, we expect to meet increased funding requirements by issuing commercial paper or term debt. We believe our ability to access external capital resources should be sufficient to satisfy existing short-term and long-term commitments and plans, and also to provide adequate financial flexibility to take advantage of potential strategic business opportunities should they arise within the next year. However, there can be no assurance of the cost or availability of future borrowings, if any, under our commercial paper program, in the debt markets or our credit facilities. At December 31, 2012 and 2011, our pension plans were $19.7 billion and $16.6 billion underfunded as measured under GAAP. On an ERISA basis our plans are more than 100% funded at December 31, 2012 with minimal required contributions in 2013. We expect to make discretionary contributions to our plans of approximately $1.5 billion in 2013. We may be required to make higher contributions to our pension plans in future years. As of December 31, 2012, we were in compliance with the covenants for our debt and credit facilities. The most restrictive covenants include a limitation on mortgage debt and sale and leaseback transactions as a percentage of consolidated net tangible assets (as defined in the credit agreements), and a limitation on consolidated debt as a percentage of total capital (as defined). When considering debt covenants, we continue to have substantial borrowing capacity. Contractual Obligations The following table summarizes our known obligations to make future payments pursuant to certain contracts as of December 31, 2012, and the estimated timing thereof.
<table><tr><td>(Dollars in millions)</td><td>Total</td><td>Lessthan 1year</td><td>1-3years</td><td>3-5years</td><td>After 5years</td></tr><tr><td>Long-term debt (including current portion)</td><td>$10,251</td><td>$1,340</td><td>$2,147</td><td>$1,095</td><td>$5,669</td></tr><tr><td>Interest on debt<sup>-1</sup></td><td>6,177</td><td>510</td><td>864</td><td>749</td><td>4,054</td></tr><tr><td>Pension and other postretirement cash requirements</td><td>25,558</td><td>579</td><td>1,244</td><td>7,025</td><td>16,710</td></tr><tr><td>Capital lease obligations</td><td>184</td><td>102</td><td>78</td><td>4</td><td></td></tr><tr><td>Operating lease obligations</td><td>1,405</td><td>218</td><td>334</td><td>209</td><td>644</td></tr><tr><td>Purchase obligations not recorded on the Consolidated Statements of Financial Position</td><td>118,002</td><td>44,472</td><td>41,838</td><td>18,956</td><td>12,736</td></tr><tr><td>Purchase obligations recorded on the Consolidated Statements of Financial Position</td><td>15,981</td><td>14,664</td><td>1,307</td><td>1</td><td>9</td></tr><tr><td>Total contractual obligations</td><td>$177,558</td><td>$61,885</td><td>$47,812</td><td>$28,039</td><td>$39,822</td></tr></table>
(1) Includes interest on variable rate debt calculated based on interest rates at December 31, 2012. Variable rate debt was less than 1% of our total debt at December 31, 2012. Industry Competitiveness The commercial jet airplane market and the airline industry remain extremely competitive. Market liberalization in Europe, the Middle East and Asia is enabling low-cost airlines to continue gaining market share. These airlines are increasing the pressure on airfares. This results in continued cost pressures for all airlines and price pressure on our products. Major productivity gains are essential to ensure a favorable market position at acceptable profit margins. Continued access to global markets remains vital to our ability to fully realize our sales potential and longterm investment returns. Approximately 91% of Commercial Airplanes’ total backlog, in dollar terms, is with non-U. S. airlines. We face aggressive international competitors who are intent on increasing their market share. They offer competitive products and have access to most of the same customers and suppliers. With government support,Airbus has historically invested heavily to create a family of products to compete with ours. Regional jet makers Embraer and Bombardier continue to develop and market larger and increasingly more capable airplanes, including Embraer’s E-195 in the regional jet market and Bombardier’s C Series in the 100-150 seat transcontinental market. Additionally, other competitors from Russia, China and Japan are developing commercial jet aircraft. Some of these competitors have historically enjoyed access to governmentprovided financial support, including “launch aid,” which greatly reduces the cost and commercial risks associated with airplane development activities. This has enabled the development of airplanes without commercial viability; others to be brought to market more quickly than otherwise possible; and many offered for sale below market-based prices. Many competitors have continued to make improvements in efficiency, which may result in funding product development, gaining market share and improving earnings. This market environment has resulted in intense pressures on pricing and other competitive factors, and we expect these pressures to continue or intensify in the coming years. We are focused on improving our products and services and continuing our cost-reduction efforts, which enhances our ability to compete. We are also focused on taking actions to ensure that Boeing is not harmed by unfair subsidization of competitors. Results of Operations
<table><tr><td>Years ended December 31,</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Revenues</td><td>$56,729</td><td>$58,012</td><td>$59,399</td></tr><tr><td>% of total company revenues</td><td>61%</td><td>61%</td><td>62%</td></tr><tr><td>Earnings from operations</td><td>$5,432</td><td>$1,995</td><td>$4,284</td></tr><tr><td>Operating margins</td><td>9.6%</td><td>3.4%</td><td>7.2%</td></tr><tr><td>Research and development</td><td>$2,247</td><td>$3,706</td><td>$2,311</td></tr></table>
Revenues Commercial Airplanes revenues decreased by $1,283 million or 2% in 2017 compared with 2016 due to delivery mix, with fewer twin aisle deliveries more than offsetting the impact of higher single aisle deliveries. Commercial Airplanes revenues decreased by $1,387 million or 2% in 2016 compared with 2015 primarily due to fewer deliveries. Through February 25, 2016, we repurchased approximately $415.0 million of shares of our common stock, which includes the $250.0 million of shares that we repurchased from certain selling stockholders on February 10, 2016. In order to achieve operational synergies, we expect cash outlays related to our integration plans to be approximately $290.0 million in 2016. These cash outlays are necessary to achieve our integration goals of net annual pre-tax operating profit synergies of $350.0 million by the end of the third year post-Closing Date. Also as discussed in Note 20 to our consolidated financial statements, as of December 31, 2015, a short-term liability of $50.0 million and long-term liability of $264.6 million related to Durom Cup product liability claims was recorded on our consolidated balance sheet. We expect to continue paying these claims over the next few years. We expect to be reimbursed a portion of these payments for product liability claims from insurance carriers. As of December 31, 2015, we have received a portion of the insurance proceeds we estimate we will recover. We have a long-term receivable of $95.3 million remaining for future expected reimbursements from our insurance carriers. We also had a short-term liability of $33.4 million related to Biomet metal-on-metal hip implant claims. At December 31, 2015, we had ten tranches of senior notes outstanding as follows (dollars in millions): |
319 | The total amount of which section ranks first for Years Ended December 31, for Credit loss impairments? (in million) | Shares of common stock issued, in treasury, and outstanding were (in thousands of shares):
<table><tr><td></td><td>Shares Issued</td><td>Treasury Shares</td><td>Shares Outstanding</td></tr><tr><td>Balance at December 29, 2013</td><td>376,832</td><td>—</td><td>376,832</td></tr><tr><td>Exercise of stock options, issuance of other stock awards, and other</td><td>178</td><td>—</td><td>178</td></tr><tr><td>Balance at December 28, 2014</td><td>377,010</td><td>—</td><td>377,010</td></tr><tr><td>Exercise of warrants</td><td>20,480</td><td>—</td><td>20,480</td></tr><tr><td>Issuance of common stock to Sponsors</td><td>221,666</td><td>—</td><td>221,666</td></tr><tr><td>Acquisition of Kraft Foods Group, Inc.</td><td>592,898</td><td>—</td><td>592,898</td></tr><tr><td>Exercise of stock options, issuance of other stock awards, and other</td><td>2,338</td><td>-413</td><td>1,925</td></tr><tr><td>Balance at January 3, 2016</td><td>1,214,392</td><td>-413</td><td>1,213,979</td></tr><tr><td>Exercise of stock options, issuance of other stock awards, and other</td><td>4,555</td><td>-2,058</td><td>2,497</td></tr><tr><td>Balance at December 31, 2016</td><td>1,218,947</td><td>-2,471</td><td>1,216,476</td></tr></table>
Note 13. Financing Arrangements We routinely enter into accounts receivable securitization and factoring programs . We account for transfers of receivables pursuant to these programs as a sale and remove them from our consolidated balance sheet. At December 31, 2016 , our most significant program in place was the U. S. securitization program, which was amended in May 2016 and originally entered into in October of 2015. Under the program, we are entitled to receive cash consideration of up to $800 million (which we elected to reduce to $500 million , effective February 21, 2017) and a receivable for the remainder of the purchase price (the “Deferred Purchase Price”). This securitization program utilizes a bankruptcyremote special-purpose entity (“SPE”). The SPE is wholly-owned by a subsidiary of Kraft Heinz and its sole business consists of the purchase or acceptance, through capital contributions of receivables and related assets, from a Kraft Heinz subsidiary and subsequent transfer of such receivables and related assets to a bank. Although the SPE is included in our consolidated financial statements, it is a separate legal entity with separate creditors who will be entitled, upon its liquidation, to be satisfied out of the SPE's assets prior to any assets or value in the SPE becoming available to Kraft Heinz or its subsidiaries. The assets of the SPE are not available to pay creditors of Kraft Heinz or its subsidiaries. This program expires in May 2017. In addition to the U. S. securitization program, we have accounts receivable factoring programs denominated in Australian dollars, New Zealand dollars, British pound sterling, euros, and Japanese yen. Under these programs, we generally receive cash consideration up to a certain limit and a receivable for the Deferred Purchase Price. There is no Deferred Purchase Price associated with the Japanese yen contract. Related to these programs, our aggregate cash consideration limit, after applying applicable hold-backs, was $245 million U. S. dollars at December 31, 2016. Generally, each of these programs automatically renews annually until terminated by either party. The cash consideration and carrying amount of receivables removed from the consolidated balance sheets in connection with the above programs were $904 million at December 31, 2016 and $267 million at January 3, 2016 . The fair value of the Deferred Purchase Price for the programs was $129 million at December 31, 2016 and $583 million at January 3, 2016 . The Deferred Purchase Price is included in sold receivables on the consolidated balance sheets and had a carrying value which approximated its fair value at December 31, 2016 and January 3, 2016 . The proceeds from these sales are recognized on the consolidated statements of cash flows as a component of operating activities. We act as servicer for these arrangements and have not recorded any servicing assets or liabilities for these arrangements as of December 31, 2016 and January 3, 2016 because they were not material to the financial statements. PRUDENTIAL FINANCIAL, INC. Notes to Consolidated Financial Statements The following table sets forth a rollforward of pre-tax amounts remaining in OCI related to fixed maturity securities with credit loss impairments recognized in earnings, for the periods indicated:
<table><tr><td></td><td colspan="2">Years Ended December 31,</td></tr><tr><td></td><td>2018</td><td>2017</td></tr><tr><td></td><td colspan="2">(in millions)</td></tr><tr><td>Credit loss impairments:</td><td></td><td></td></tr><tr><td>Balance, beginning of period</td><td>$319</td><td>$359</td></tr><tr><td>New credit loss impairments</td><td>1</td><td>10</td></tr><tr><td>Additional credit loss impairments on securities previously impaired</td><td>0</td><td>11</td></tr><tr><td>Increases due to the passage of time on previously recorded credit losses</td><td>10</td><td>15</td></tr><tr><td>Reductions for securities which matured, paid down, prepaid or were sold during the period</td><td>-162</td><td>-58</td></tr><tr><td>Reductions for securities impaired to fair value during the period-1</td><td>-24</td><td>-13</td></tr><tr><td>Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected</td><td>-4</td><td>-5</td></tr><tr><td>Balance, end of period</td><td>$140</td><td>$319</td></tr></table>
(1) Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost. Assets Supporting Experience-Rated Contractholder Liabilities The following table sets forth the composition of “Assets supporting experience-rated contractholder liabilities,” as of the dates indicated:
<table><tr><td></td><td colspan="2">December 31, 2018</td><td colspan="2">December 31, 2017</td></tr><tr><td></td><td>AmortizedCost or Cost</td><td>FairValue</td><td>AmortizedCost or Cost</td><td>FairValue</td></tr><tr><td></td><td colspan="4">(in millions)</td></tr><tr><td>Short-term investments and cash equivalents</td><td>$215</td><td>$215</td><td>$245</td><td>$245</td></tr><tr><td>Fixed maturities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Corporate securities</td><td>13,258</td><td>13,119</td><td>13,816</td><td>14,073</td></tr><tr><td>Commercial mortgage-backed securities</td><td>2,346</td><td>2,324</td><td>2,294</td><td>2,311</td></tr><tr><td>Residential mortgage-backed securities-1</td><td>828</td><td>811</td><td>961</td><td>966</td></tr><tr><td>Asset-backed securities-2</td><td>1,649</td><td>1,665</td><td>1,363</td><td>1,392</td></tr><tr><td>Foreign government bonds</td><td>1,087</td><td>1,083</td><td>1,050</td><td>1,057</td></tr><tr><td>U.S. government authorities and agencies and obligations of U.S. states</td><td>538</td><td>577</td><td>357</td><td>410</td></tr><tr><td>Total fixed maturities-3</td><td>19,706</td><td>19,579</td><td>19,841</td><td>20,209</td></tr><tr><td>Equity securities</td><td>1,378</td><td>1,460</td><td>1,278</td><td>1,643</td></tr><tr><td>Total assets supporting experience-rated contractholder liabilities-4</td><td>$21,299</td><td>$21,254</td><td>$21,364</td><td>$22,097</td></tr></table>
(1) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. (2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types. Includes collateralized loan obligations at fair value of $1,028 million and $943 million as of December 31, 2018 and 2017, respectively, all of which were rated AAA. (3) As a percentage of amortized cost, 93% and 92% of the portfolio was considered high or highest quality based on NAIC or equivalent ratings, as of December 31, 2018 and 2017, respectively. (4) As a percentage of amortized cost, 78% and 80% of the portfolio consisted of public securities as of December 31, 2018 and 2017, respectively. The net change in unrealized gains (losses) from assets supporting experience-rated contractholder liabilities still held at period end, recorded within “Other income (loss),” was $(778) million, $300 million and $75 million during the years ended December 31, 2018, 2017 and 2016, respectively. Equity Securities The net change in unrealized gains (losses) from equity securities, still held at period end, recorded within “Other income (loss),” was $(1,157) million during the year ended December 31, 2018. The net change in unrealized gains (losses) from equity securities, still held at period end, recorded within “Other comprehensive income (loss),” was $(494) million and $760 million during the years ended December 31, 2017 and 2016, respectively. Benefits and expenses increased $735 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses increased $709 million primarily driven by an increase in policyholders’ benefits, including the change in policy reserves, related to the increase in premiums discussed above. Account Values Account values are a significant driver of our operating results, and are primarily driven by net additions (withdrawals) and the impact of market changes. The income we earn on most of our fee-based products varies with the level of fee-based account values, since many policy fees are determined by these values. The investment income and interest we credit to policyholders on our spread-based products varies with the level of general account values. To a lesser extent, changes in account values impact our pattern of amortization of DAC and VOBA and general and administrative expenses. The following table shows the changes in the account values and net additions (withdrawals) of Retirement segment products for the periods indicated. Net additions (withdrawals) are plan sales and participant deposits or additions, as applicable, minus plan and participant withdrawals and benefits. Account values include both internally- and externallymanaged client balances as the total balances drive revenue for the Retirement segment. For more information on internally-managed balances, see “—PGIM. ” |
0 | Does Interest-earning deposits with banks (a) keeps increasing each year between 2018 and 2017? | that these costs would be recovered from customers with no material adverse effect on its results of operations, financial position, or liquidity. Ameren’s and Ameren Missouri’s earnings could benefit from increased investment to comply with environmental regulations if those investments are reflected and recovered on a timely basis in customer rates. ‰ The Ameren Companies have multiyear credit agreements that cumulatively provide $2.1 billion of credit through December 2022, subject to a 364-day repayment term for Ameren Missouri and Ameren Illinois, with the option to seek incremental commitments to increase the cumulative credit provided to $2.5 billion. See Note 4 – Short-term Debt and Liquidity under Part II, Item 8, of this report for additional information regarding the Credit Agreements. Ameren, Ameren Missouri, and Ameren Illinois believe that their liquidity is adequate given their expected operating cash flows, capital expenditures, and related financing plans. However, there can be no assurance that significant changes in economic conditions, disruptions in the capital and credit markets, or other unforeseen events will not materially affect their ability to execute their expected operating, capital, or financing plans. ‰ Federal income tax legislation enacted under the TCJA will continue to have significant impacts on our results of operations, financial position, liquidity, and financial metrics. The TCJA, among other things, reduced the federal statutory corporate income tax rate from 35% to 21%, effective January 1, 2018. Customer rates were reduced to reflect the lower income tax rate, without a corresponding reduction in income tax payments because of our use of net operating losses and tax credit carryforwards until about 2020. Customer rates were also reduced to reflect the return of excess deferred taxes. The result of these customer rate reductions is a decrease in operating cash flows in the near term. Over time, the decrease in operating cash flows will be offset as temporary differences between book and taxable income reverse, and by increased customer rates due to higher rate base amounts resulting from lower accumulated deferred income tax liabilities. ‰ Ameren Missouri expects a decrease in operating cash flows of approximately $100 million in 2019 compared with 2018, as a result of the TCJA. Over time, the decrease in operating cash flows will be offset as temporary differences between book and taxable income reverse, and by increased customer rates due to higher rate base amounts, once approved by the MoPSC, resulting from lower accumulated deferred income tax liabilities. ‰ The following table presents the net regulatory liabilities associated with excess deferred taxes as of December 31, 2018, and the related amortization periods:
<table><tr><td>Amortization Period</td><td>Ameren Missouri</td><td>Ameren Illinois</td><td>ATXI</td><td>Total</td></tr><tr><td>30–60 years</td><td>$947</td><td>$796</td><td>$84</td><td>$1,827</td></tr><tr><td>7–10 years</td><td>524</td><td>-4</td><td>2</td><td>522</td></tr><tr><td>Total</td><td>$1,471</td><td>$792</td><td>$86</td><td>$2,349</td></tr></table>
‰ In 2018, our rate-regulated businesses began to amortize excess deferred taxes. Ameren Illinois and ATXI’s 2018 income tax expense reflect a full year of amortization, while Ameren Missouri’s 2018 income tax expense reflects five months of amortization related to its electric business, in accordance with a MoPSC order received in July 2018. The amortization of such balances related to Ameren Missouri’s gas business started in January 2019, in accordance with a MoPSC order received in December 2018. These amortizations reduce our income tax expense and effective tax rates. Due to formula ratemaking, Ameren Illinois Electric Distribution and Ameren Transmission have an offsetting reduction in revenue from customers, with no overall impact on earnings. Ameren Missouri and Ameren Illinois Natural Gas 2019 interim period earnings may be affected by timing differences between income tax expense and revenue reductions based on their revenue patterns; however, no material impact to year-over-year earnings is expected. ‰ As of December 31, 2018, Ameren had $91 million in tax benefits from federal and state net operating loss carryforwards and $127 million in federal and state income tax credit carryforwards. These carryforwards are expected to largely offset income tax obligations in 2019. Ameren does not expect to make material federal or state income tax payments over the next five years based on planned capital expenditures and related income tax credits. Consistent with the tax allocation agreement between Ameren (parent) and its subsidiaries, Ameren Missouri expects to make material income tax payments to Ameren (parent) in 2019 and 2020 and immaterial payments in 2021 through 2023 based on planned capital expenditures and related income tax credits, while Ameren Illinois expects to make material income tax payments to Ameren (parent) in 2020 through 2023. ‰ Ameren expects its cash used for currently planned capital expenditures and dividends to exceed cash provided by operating activities over the next several years. To fund a portion of these cash requirements, beginning in the first quarter of 2018, Ameren began using newly issued shares, rather than market-purchased shares, to satisfy requirements under its DRPlus and employee benefit plans and expects to continue to do so over the next five years. Ameren also plans to issue incremental common equity to fund a portion of Ameren Missouri’s wind generation investments. Ameren, Ameren Missouri, and Ameren Illinois expect their respective equity to total capitalization levels over the period ending December 2023 to remain in-line with their respective equity to total capitalization levels as of December 31, 2018. Ameren Missouri Table 44: Allowance for Loan and Lease Losses
<table><tr><td>Dollars in millions</td><td>2012</td><td>2011</td></tr><tr><td>January 1</td><td>$4,347</td><td>$4,887</td></tr><tr><td>Total net charge-offs</td><td>-1,289</td><td>-1,639</td></tr><tr><td>Provision for credit losses</td><td>987</td><td>1,152</td></tr><tr><td>Net change in allowance for unfunded loan commitments and letters of credit</td><td>-10</td><td>-52</td></tr><tr><td>Other</td><td>1</td><td>-1</td></tr><tr><td>December 31</td><td>$4,036</td><td>$4,347</td></tr><tr><td>Net charge-offs to average loans (for the year ended)</td><td>.73%</td><td>1.08%</td></tr><tr><td>Allowance for loan and lease losses to total loans</td><td>2.17</td><td>2.73</td></tr><tr><td>Commercial lending net charge-offs</td><td>$-359</td><td>$-712</td></tr><tr><td>Consumer lending net charge-offs</td><td>-930</td><td>-927</td></tr><tr><td>Total net charge-offs</td><td>$-1,289</td><td>$-1,639</td></tr><tr><td>Net charge-offs to average loans (for the year ended)</td><td></td><td></td></tr><tr><td>Commercial lending</td><td>.35%</td><td>.86%</td></tr><tr><td>Consumer lending</td><td>1.24</td><td>1.33</td></tr></table>
As further described in the Consolidated Income Statement Review section of this Item 7, the provision for credit losses totaled $1.0 billion for 2012 compared to $1.2 billion for 2011. For 2012, the provision for commercial lending credit losses declined by $39 million or 22% from 2011. Similarly, the provision for consumer lending credit losses decreased $126 million or 13% from 2011. At December 31, 2012, total ALLL to total nonperforming loans was 124%. The comparable amount for December 31, 2011 was 122%. These ratios are 79% and 84%, respectively, when excluding the $1.5 billion and $1.4 billion, respectively, of allowance at December 31, 2012 and December 31, 2011 allocated to consumer loans and lines of credit not secured by residential real estate and purchased impaired loans. We have excluded consumer loans and lines of credit not secured by real estate as they are charged off after 120 to 180 days past due and not placed on nonperforming status. Additionally, we have excluded purchased impaired loans as they are considered performing regardless of their delinquency status as interest is accreted based on our estimate of expected cash flows and additional allowance is recorded when these cash flows are below recorded investment. See Table 33: Nonperforming Assets By Type within this Credit Risk Management section for additional information. The ALLL balance increases or decreases across periods in relation to fluctuating risk factors, including asset quality trends, charge-offs and changes in aggregate portfolio balances. During 2012, improving asset quality trends, including, but not limited to, delinquency status, improving economic conditions, realization of previously estimated losses through charge-offs and overall portfolio growth, combined to result in reducing the estimated credit losses within the portfolio. As a result, the ALLL balance declined $311 million, or 7%, to $4.0 billion during the year ended December 31, 2012. See Note 7 Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit and Note 6 Purchased Loans in the Notes To Consolidated Financial Statements in Item 8 of this Report regarding changes in the ALLL and in the allowance for unfunded loan commitments and letters of credit. CREDIT DEFAULT SWAPS From a credit risk management perspective, we use credit default swaps (CDS) as a tool to manage risk concentrations in the credit portfolio. That risk management could come from protection purchased or sold in the form of single name or index products. When we buy loss protection by purchasing a CDS, we pay a fee to the seller, or CDS counterparty, in return for the right to receive a payment if a specified credit event occurs for a particular obligor or reference entity. When we sell protection, we receive a CDS premium from the buyer in return for PNC’s obligation to pay the buyer if a specified credit event occurs for a particular obligor or reference entity. We evaluate the counterparty credit worthiness for all our CDS activities. Counterparty creditworthiness is approved based on a review of credit quality in accordance with our traditional credit quality standards and credit policies. The credit risk of our counterparties is monitored in the normal course of business. In addition, all counterparty credit lines are subject to collateral thresholds and exposures above these thresholds are secured. CDSs are included in the “Derivatives not designated as hedging instruments under GAAP” section of Table 54: Financial Derivatives Summary in the Financial Derivatives section of this Risk Management discussion.
<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>2018</td><td>2017</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Balance Sheet Highlights</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets</td><td>$382,315</td><td>$380,768</td><td>$366,380</td><td>$358,493</td><td>$345,072</td></tr><tr><td>Loans</td><td>$226,245</td><td>$220,458</td><td>$210,833</td><td>$206,696</td><td>$204,817</td></tr><tr><td>Allowance for loan and lease losses</td><td>$2,629</td><td>$2,611</td><td>$2,589</td><td>$2,727</td><td>$3,331</td></tr><tr><td>Interest-earning deposits with banks (a)</td><td>$10,893</td><td>$28,595</td><td>$25,711</td><td>$30,546</td><td>$31,779</td></tr><tr><td>Investment securities</td><td>$82,701</td><td>$76,131</td><td>$75,947</td><td>$70,528</td><td>$55,823</td></tr><tr><td>Loans held for sale</td><td>$994</td><td>$2,655</td><td>$2,504</td><td>$1,540</td><td>$2,262</td></tr><tr><td>Equity investments (b)</td><td>$12,894</td><td>$11,392</td><td>$10,728</td><td>$10,587</td><td>$10,728</td></tr><tr><td>Mortgage servicing rights</td><td>$1,983</td><td>$1,832</td><td>$1,758</td><td>$1,589</td><td>$1,351</td></tr><tr><td>Goodwill</td><td>$9,218</td><td>$9,173</td><td>$9,103</td><td>$9,103</td><td>$9,103</td></tr><tr><td>Other assets</td><td>$34,408</td><td>$27,894</td><td>$27,506</td><td>$26,566</td><td>$28,180</td></tr><tr><td>Noninterest-bearing deposits</td><td>$73,960</td><td>$79,864</td><td>$80,230</td><td>$79,435</td><td>$73,479</td></tr><tr><td>Interest-bearing deposits</td><td>$193,879</td><td>$185,189</td><td>$176,934</td><td>$169,567</td><td>$158,755</td></tr><tr><td>Total deposits</td><td>$267,839</td><td>$265,053</td><td>$257,164</td><td>$249,002</td><td>$232,234</td></tr><tr><td>Borrowed funds (c)</td><td>$57,419</td><td>$59,088</td><td>$52,706</td><td>$54,532</td><td>$56,768</td></tr><tr><td>Total shareholders’ equity</td><td>$47,728</td><td>$47,513</td><td>$45,699</td><td>$44,710</td><td>$44,551</td></tr><tr><td>Common shareholders’ equity</td><td>$43,742</td><td>$43,530</td><td>$41,723</td><td>$41,258</td><td>$40,605</td></tr><tr><td>Accumulated other comprehensive income (loss)</td><td>$-725</td><td>$-148</td><td>$-265</td><td>$130</td><td>$503</td></tr><tr><td>Period-end common shares outstanding (millions)</td><td>457</td><td>473</td><td>485</td><td>504</td><td>523</td></tr><tr><td>Loans to deposits</td><td>84%</td><td>83%</td><td>82%</td><td>83%</td><td>88%</td></tr><tr><td>Client Assets(billions)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discretionary client assets under management</td><td>$148</td><td>$151</td><td>$137</td><td>$134</td><td>$135</td></tr><tr><td>Nondiscretionary client assets under administration</td><td>124</td><td>131</td><td>120</td><td>119</td><td>123</td></tr><tr><td>Total client assets under administration</td><td>272</td><td>282</td><td>257</td><td>253</td><td>258</td></tr><tr><td>Brokerage account client assets</td><td>47</td><td>49</td><td>44</td><td>43</td><td>43</td></tr><tr><td>Total</td><td>$319</td><td>$331</td><td>$301</td><td>$296</td><td>$301</td></tr><tr><td>Capital Ratios (d) (e)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basel III (f)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common equity Tier 1</td><td>9.6%</td><td>9.8%</td><td>10.0%</td><td>10.0%</td><td>10.0%</td></tr><tr><td>Tier 1 risk-based</td><td>10.8%</td><td>N/A</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Total capital risk-based</td><td>13.0%</td><td>N/A</td><td>N/A</td><td>N/A</td><td>N/A</td></tr><tr><td>Transitional Basel III</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common equity Tier I</td><td>N/A</td><td>10.4%</td><td>10.6%</td><td>10.6%</td><td>10.9%</td></tr><tr><td>Tier 1 risk-based capital</td><td>N/A</td><td>11.6%</td><td>12.0%</td><td>12.0%</td><td>12.6%</td></tr><tr><td>Other Selected Ratios</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Dividend payout</td><td>31.5%</td><td>24.7%</td><td>29.0%</td><td>27.0%</td><td>25.3%</td></tr><tr><td>Common shareholders’ equity to total assets</td><td>11.4%</td><td>11.4%</td><td>11.4%</td><td>11.5%</td><td>11.8%</td></tr><tr><td>Average common shareholders’ equity to average assets</td><td>11.3%</td><td>11.3%</td><td>11.5%</td><td>11.5%</td><td>12.1%</td></tr><tr><td>Selected Statistics</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employees</td><td>53,063</td><td>52,906</td><td>52,006</td><td>52,513</td><td>53,587</td></tr><tr><td>Retail Banking branches</td><td>2,372</td><td>2,459</td><td>2,520</td><td>2,616</td><td>2,697</td></tr><tr><td>ATMs</td><td>9,162</td><td>9,051</td><td>9,024</td><td>8,956</td><td>8,605</td></tr></table>
(a) Includes balances held with the Federal Reserve Bank of Cleveland of $10.5 billion, $28.3 billion, $25.1 billion, $30.0 billion and $31.4 billion as of December 31, 2018, 2017, 2016, 2015 and 2014, respectively. (b) Includes our equity interest in BlackRock. On January 1, 2018, $.6 billion of trading and available for sale securities, primarily money market funds, were reclassified to Equity investments in accordance with the adoption of Accounting Standards Update (ASU) 2016-01. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in Item 8 of this Report for additional detail on this adoption. (c) Includes long-term borrowings of $37.4 billion, $43.1 billion, $38.3 billion, $43.6 billion and $41.5 billion for 2018, 2017, 2016, 2015 and 2014, respectively. Borrowings which mature more than one year after December 31, 2018 are considered to be long-term. (d) See capital ratios discussion in the Supervision and Regulation section of Item 1 and in the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report for additional discussion on these capital ratios. Additional information on the 2014-2016 fully phased-in ratios and Transitional Basel III ratios is included in the Statistical Information (Unaudited) section in Item 8 of this Report. (e) All ratios are calculated using the regulatory capital methodology applicable to PNC during each period presented, except for the prior period Basel III Common equity Tier 1 ratios, which are fully phased-in Basel III ratios and are presented as pro forma estimates. Ratios for all periods were calculated based on the standardized approach. (f) The 2018 Basel III ratios for Common equity Tier 1 capital and Tier 1 risk-based capital reflect the full phase-in of all Basel III adjustments to these metrics applicable to PNC. The 2018 Basel III Total risk-based capital ratio includes $80 million of nonqualifying trust preferred capital securities that are subject to a phase-out period that runs through 2021. |
7.4 | in millions , how much compensation expense was attributable to directors in the years ended december 31 , 2015 through 2017? | In 2017, the company granted 440,076 shares of restricted Class A common stock and 7,568 shares of restricted stock units. Restricted common stock and restricted stock units generally have a vesting period of two to four years. The fair value related to these grants was $58.7 million, which is recognized as compensation expense on an accelerated basis over the vesting period. Dividends are accrued on restricted Class A common stock and restricted stock units and are paid once the restricted stock vests. In 2017, the company also granted 203,298 performance shares. The fair value related to these grants was $25.3 million, which is recognized as compensation expense on an accelerated and straight-lined basis over the vesting period. The vesting of these shares is contingent on meeting stated performance or market conditions. The following table summarizes restricted stock, restricted stock units, and performance shares activity for 2017:
<table><tr><td></td><td>Number of Shares</td><td>WeightedAverageGrant DateFair Value</td></tr><tr><td>Outstanding at December 31, 2016</td><td>1,820,578</td><td>$98</td></tr><tr><td>Granted</td><td>650,942</td><td>129</td></tr><tr><td>Vested</td><td>-510,590</td><td>87</td></tr><tr><td>Cancelled</td><td>-401,699</td><td>95</td></tr><tr><td>Outstanding at December 31, 2017</td><td>1,559,231</td><td>116</td></tr></table>
The total fair value of restricted stock, restricted stock units, and performance shares that vested during 2017, 2016 and 2015 was $66.0 million, $59.8 million and $43.3 million, respectively. Under the ESPP, eligible employees may acquire shares of Class A common stock using after-tax payroll deductions made during consecutive offering periods of approximately six months in duration. Shares are purchased at the end of each offering period at a price of 90% of the closing price of the Class A common stock as reported on the NASDAQ Global Select Market. Compensation expense is recognized on the dates of purchase for the discount from the closing price. In 2017, 2016 and 2015, a total of 19,936, 19,858 and 19,756 shares, respectively, of Class A common stock were issued to participating employees. These shares are subject to a six-month holding period. Annual expense of $0.3 million for the purchase discount was recognized in 2017, and $0.2 million was recognized in both 2016 and 2015. Non-executive directors receive an annual award of Class A common stock with a value equal to $100,000. Non-executive directors may also elect to receive some or all of the cash portion of their annual stipend, up to $60,000, in shares of stock based on the closing price at the date of distribution. As a result, 19,736 shares, 26,439 shares and 25,853 shares of Class A common stock were issued to non-executive directors during 2017, 2016 and 2015, respectively. These shares are not subject to any vesting restrictions. Expense of $2.5 million, $2.4 million and $2.5 million related to these stock-based payments was recognized for the years ended December 31, 2017, 2016 and 2015, respectively. Income Taxes The Company utilizes the asset and liability approach defined in SFAS No.109, “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement amounts and the tax bases of assets and liabilities. Earnings per Share (“EPS”) Basic EPS is calculated by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is similar to basic EPS, but adjusts for the effect of the potential issuance of common shares by application of the treasury stock method. Reclassifications Certain revisions and reclassifications have been made to the consolidated financial statements of the prior years to conform to the current year presentation. As a result, Financial Service Fees revenue and Investment Advisory Fees expense increased by approximately $12.8 million and $11.2 million, respectively, for the years ended September 30, 2006 and 2005. These revisions did not impact the Company’s net income for the years ended September 30, 2006 and 2005. The Company also reclassified certain amounts from cash to segregated assets and reverse repurchase agreements on its 2006 and 2005 Consolidated Statements of Financial Condition and related cash flow activity on its 2006 and 2005 Consolidated Statements of Cash Flows. For fiscal year 2006, $176.8 million was reclassified from cash to segregated assets and $72.5 million was reclassified from cash to securities purchased under agreements to resell. For fiscal year 2005, $146.4 million was reclassified from cash to segregated assets and $137.3 million was reclassified from cash to securities purchased under agreements to resell. These revisions did not impact the Company’s net income for the years ended September 30, 2006 and 2005. In the quarter ended September 30, 2007, a new segment was established: Proprietary Capital. The components of this segment were previously included in the Asset Management and Other segments. Reclassifications have been made in the segment disclosure for previous years to conform to this presentation. Additional information is provided in Note 22 below. NOTE 2 – TRADING INSTRUMENTS AND TRADING INSTRUMENTS SOLD BUT NOT YET PURCHASED:
<table><tr><td></td><td colspan="2">September 30, 2007</td><td colspan="2">September 30, 2006</td></tr><tr><td></td><td>Trading Instruments</td><td>Instruments Sold but Not Yet Purchased</td><td>Trading Instruments</td><td>Instruments Sold but Not Yet Purchased</td></tr><tr><td></td><td colspan="4">(in 000's)</td></tr><tr><td>Marketable:</td><td></td><td></td><td></td><td></td></tr><tr><td>Municipal Obligations</td><td>$ 200,024</td><td>$ 54</td><td>$ 192,028</td><td>$ 5</td></tr><tr><td>Corporate Obligations</td><td>56,069</td><td>952</td><td>134,431</td><td>968</td></tr><tr><td>Government Obligations</td><td>83,322</td><td>45,275</td><td>37,793</td><td>31,636</td></tr><tr><td>Agencies</td><td>47,123</td><td>60,829</td><td>68,380</td><td>34,023</td></tr><tr><td>Total Debt Securities</td><td>386,538</td><td>107,110</td><td>432,632</td><td>66,632</td></tr><tr><td>Derivative Contracts</td><td>30,603</td><td>8,445</td><td>20,904</td><td>8,309</td></tr><tr><td>Equity Securities</td><td>46,913</td><td>34,174</td><td>29,532</td><td>19,068</td></tr><tr><td>Other Securities</td><td>3,707</td><td>-</td><td>2,703</td><td>-</td></tr><tr><td>Total</td><td>$ 467,761</td><td>$ 149,729</td><td>$ 485,771</td><td>$ 94,009</td></tr></table>
Mortgage backed securities of $48.9 million and $77.1 million at September 30, 2007 and September 30, 2006, respectively, are included in Corporate Obligations and Agencies in the table above. Mortgage backed securities sold but not yet purchased of $60.8 million and $34 million at September 30, 2007 and September 30, 2006, respectively, are included in Agencies in the table above. Net unrealized (losses) gains related to open trading positions at September 30, 2007, September 30, 2006, and September 30, 2005 were $(726,000), $4,387,000, and $(1,257,000), respectively. NOTE 3 - AVAILABLE FOR SALE SECURITIES: Available for sale securities are comprised primarily of CMOs, mortgage related debt, and certain equity securities of the Company's non-broker-dealer subsidiaries, principally RJBank. There were proceeds from the sale of available for sale securities of $81,000 for the year ended September 30, 2007, $252,000 for the year ended September 30, 2006 and $9,250,000 for the year ended September 30, 2005. The realized gains and losses related to the sale of available for sale securities were immaterial to the consolidated financial statements for all years presented. NOTE 15 - CAPITAL TRANSACTIONS: The following table presents information on a monthly basis for purchases of the Company’s stock for the quarter ended September 30, 2007:
<table><tr><td>Period</td><td>Number of Shares Purchased -1</td><td>Average Price Per Share</td></tr><tr><td>July 1, 2007 – July 31, 2007</td><td>-</td><td>$ -</td></tr><tr><td>August 1, 2007 – August 31, 2007</td><td>-</td><td>-</td></tr><tr><td>September 1, 2007 – September 30, 2007</td><td>1,548</td><td>33.64</td></tr><tr><td>Total</td><td>1,548</td><td>$33.64</td></tr></table>
(1) The Company does not have a formal stock repurchase plan. Shares are repurchased at the discretion of management pursuant to prior authorization from the Board of Directors. On May 20, 2004, the Board of Directors authorized purchases of up to $75 million. Since that date 461,500 shares have been repurchased for a total of $9.6 million, leaving $65.4 million available to repurchase shares. Historically the Company has considered such purchases when the price of its stock approaches 1.5 times book value or when employees surrender shares as payment for option exercises. The decision to repurchase shares is subject to cash availability and other factors. During 2007 and 2006, 69,986 and 189,664 shares were repurchased at an average price of $31.54 and $28.97, respectively. During the three months ended December 31, 2006, 42,618 shares were purchased for the trust fund that was established and funded to acquire Company common stock in the open market to be used to settle restricted stock units granted as a retention vehicle for certain employees of the Company’s wholly owned Canadian subsidiary (see Note 17 below for more information on this trust fund). With the exception of the shares purchased through this trust fund, the Company only purchased shares during the balance of the year that were surrendered by employees as a payment for option exercises. NOTE 16 - OTHER COMPREHENSIVE INCOME: The activity in other comprehensive income and related tax effects are as follows:
<table><tr><td></td><td>September 30, 2007</td><td>September 30, 2006</td><td>September 30, 2005</td></tr><tr><td></td><td colspan="3">(in 000's)</td></tr><tr><td>Net Unrealized (Loss) Gain on Available for Sale Securities, Net of</td><td></td><td></td><td></td></tr><tr><td>Tax Effect Of -$1,217 in 2007, $129 in 2006, and $51 in 2005</td><td>$ -2,150</td><td>$ 217</td><td>$ 79</td></tr><tr><td>Net Unrealized Gain on Interest Rate Swaps Accounted for as Cash Flow</td><td></td><td></td><td></td></tr><tr><td>Hedges, Net of Tax Effect of $0 in 2007, $28 in 2006, and</td><td></td><td></td><td></td></tr><tr><td>$566 in 2005</td><td>-</td><td>44</td><td>882</td></tr><tr><td>Net Change in Currency Translations, Net of Tax Effect of $11,463 in</td><td></td><td></td><td></td></tr><tr><td>2007, $1,312 in 2006, and $3,078 in 2005</td><td>20,246</td><td>2,202</td><td>4,796</td></tr><tr><td>Other Comprehensive Income</td><td>$ 18,096</td><td>$ 2,463</td><td>$ 5,757</td></tr></table>
The components of accumulated other comprehensive income, net of income taxes:
<table><tr><td></td><td>September 30, 2007</td><td>September 30, 2006</td></tr><tr><td></td><td colspan="2">(in 000's)</td></tr><tr><td>Net Unrealized (Loss) Gain on Securities Available for Sale, Net of Tax Effect of ($998) in 2007</td><td></td><td></td></tr><tr><td>and $245 in 2006</td><td>$ -1,747</td><td>$ 403</td></tr><tr><td>Net Currency Translations, Net of Tax Effect of $18,593 in 2007 and $7,285 in 2006</td><td>31,938</td><td>11,692</td></tr><tr><td>Accumulated Other Comprehensive Income</td><td>$ 30,191</td><td>$ 12,095</td></tr></table>
NOTE 17 - EMPLOYEE BENEFIT PLANS: The Company's profit sharing plan and employee stock ownership plan provide certain death, disability or retirement benefits for all employees who meet certain service requirements. The plans are noncontributory. Contributions by the Company, if any, are determined annually by the Company’s Board of Directors on a discretionary basis and are recognized as compensation cost throughout the year. Benefits become fully vested after seven years of qualified service. All shares owned by the ESOP are included in earnings per share calculations. Cash dividends paid to the ESOP are reflected as a reduction of RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES Management's Discussion and Analysis 41 periods where equity markets improve, assets under administration and client activity generally increase, thereby having a favorable impact on net revenues. We also earn certain servicing fees, such as omnibus and education and marketing support (“EMS”) fees from mutual fund and annuity companies whose products we distribute, and from banks to which we sweep client cash in the RJBDP. Such fees are included in “Account and service fees. ” Servicing fees earned by mutual fund and annuity companies are generally based on the level of assets or number of positions in such programs. Fees earned from our RJBDP are generally based on client cash balances in the program, as well as the level of short-term interest rates relative to interest paid to clients on balances in the RJBDP. Net interest revenue in the PCG segment is generated by interest earnings on margin loans provided to clients and on cash segregated pursuant to regulations, less interest paid on client cash balances. Higher client cash balances generally lead to increased interest income, depending on spreads realized in our client interest program. For more information on client cash balances, see our previous discussion of interest-earning assets and interest-bearing liabilities in the Net interest analysis section of this MD&A. For an overview of our PCG segment operations, refer to the information presented in Item 1 “Business” of this Form 10-K. Operating results
<table><tr><td></td><td colspan="3">Year ended September 30,</td><td colspan="2">% change</td></tr><tr><td>$ in thousands</td><td>2018</td><td>2017</td><td>2016</td><td>2018 vs. 2017</td><td>2017 vs. 2016</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Securities commissions and fees:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Fee-based accounts</td><td>$2,540,336</td><td>$2,040,839</td><td>$1,589,124</td><td>24%</td><td>28%</td></tr><tr><td>Mutual funds</td><td>641,603</td><td>646,614</td><td>631,102</td><td>-1%</td><td>2%</td></tr><tr><td>Insurance and annuity products</td><td>413,591</td><td>385,493</td><td>377,329</td><td>7%</td><td>2%</td></tr><tr><td>Equity products</td><td>325,514</td><td>303,015</td><td>240,855</td><td>7%</td><td>26%</td></tr><tr><td>Fixed income products</td><td>112,509</td><td>118,062</td><td>95,908</td><td>-5%</td><td>23%</td></tr><tr><td>New issue sales credits</td><td>47,200</td><td>72,281</td><td>44,088</td><td>-35%</td><td>64%</td></tr><tr><td>Subtotal securities commissions and fees</td><td>4,080,753</td><td>3,566,304</td><td>2,978,406</td><td>14%</td><td>20%</td></tr><tr><td>Interest income</td><td>193,105</td><td>152,711</td><td>107,281</td><td>26%</td><td>42%</td></tr><tr><td>Account and service fees:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Mutual fund and annuity service fees</td><td>331,543</td><td>290,661</td><td>255,405</td><td>14%</td><td>14%</td></tr><tr><td>RJBDP fees - third-party banks</td><td>262,424</td><td>202,049</td><td>92,315</td><td>30%</td><td>119%</td></tr><tr><td>Affiliate deposit account servicing fees from RJ Bank</td><td>91,720</td><td>67,981</td><td>43,145</td><td>35%</td><td>58%</td></tr><tr><td>Client account and service fees</td><td>95,794</td><td>98,500</td><td>95,010</td><td>-3%</td><td>4%</td></tr><tr><td>Client transaction fees and other</td><td>22,658</td><td>25,103</td><td>23,156</td><td>-10%</td><td>8%</td></tr><tr><td>Subtotal account and service fees</td><td>804,139</td><td>684,294</td><td>509,031</td><td>18%</td><td>34%</td></tr><tr><td>Other</td><td>42,834</td><td>34,279</td><td>32,000</td><td>25%</td><td>7%</td></tr><tr><td>Total revenues</td><td>5,120,831</td><td>4,437,588</td><td>3,626,718</td><td>15%</td><td>22%</td></tr><tr><td>Interest expense</td><td>-27,801</td><td>-15,955</td><td>-10,239</td><td>74%</td><td>56%</td></tr><tr><td>Net revenues</td><td>5,093,030</td><td>4,421,633</td><td>3,616,479</td><td>15%</td><td>22%</td></tr><tr><td>Non-interest expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Sales commissions</td><td>3,050,539</td><td>2,653,287</td><td>2,193,099</td><td>15%</td><td>21%</td></tr><tr><td>Admin & incentive compensation and benefit costs</td><td>835,662</td><td>713,043</td><td>595,541</td><td>17%</td><td>20%</td></tr><tr><td>Communications and information processing</td><td>234,300</td><td>193,902</td><td>166,507</td><td>21%</td><td>16%</td></tr><tr><td>Occupancy and equipment costs</td><td>154,020</td><td>146,394</td><td>125,555</td><td>5%</td><td>17%</td></tr><tr><td>Business development</td><td>115,056</td><td>98,138</td><td>88,535</td><td>17%</td><td>11%</td></tr><tr><td>Jay Peak matter</td><td>—</td><td>130,000</td><td>20,000</td><td>-100%</td><td>550%</td></tr><tr><td>Other</td><td>127,359</td><td>113,919</td><td>86,678</td><td>12%</td><td>31%</td></tr><tr><td>Total non-interest expenses</td><td>4,516,936</td><td>4,048,683</td><td>3,275,915</td><td>12%</td><td>24%</td></tr><tr><td>Pre-tax income</td><td>$576,094</td><td>$372,950</td><td>$340,564</td><td>54%</td><td>10%</td></tr></table> |
0.13174 | what was the percentage change in non-cash stock-based compensation expense from 2012 to 2013? | Note 11 – Stock-Based Compensation During 2014, 2013 and 2012, we recorded non-cash stock-based compensation expense totaling $164 million, $189 million and $167 million, which is included as a component of other unallocated, net on our Statements of Earnings. The net impact to earnings for the respective years was $107 million, $122 million and $108 million. As of December 31, 2014, we had $91 million of unrecognized compensation cost related to nonvested awards, which is expected to be recognized over a weighted average period of 1.6 years. We received cash from the exercise of stock options totaling $308 million, $827 million and $440 million during 2014, 2013 and 2012. In addition, our income tax liabilities for 2014, 2013 and 2012 were reduced by $215 million, $158 million, $96 million due to recognized tax benefits on stock-based compensation arrangements. Stock-Based Compensation Plans Under plans approved by our stockholders, we are authorized to grant key employees stock-based incentive awards, including options to purchase common stock, stock appreciation rights, restricted stock units (RSUs), performance stock units (PSUs) or other stock units. The exercise price of options to purchase common stock may not be less than the fair market value of our stock on the date of grant. No award of stock options may become fully vested prior to the third anniversary of the grant and no portion of a stock option grant may become vested in less than one year. The minimum vesting period for restricted stock or stock units payable in stock is three years. Award agreements may provide for shorter or pro-rated vesting periods or vesting following termination of employment in the case of death, disability, divestiture, retirement, change of control or layoff. The maximum term of a stock option or any other award is 10 years. At December 31, 2014, inclusive of the shares reserved for outstanding stock options, RSUs and PSUs, we had 19 million shares reserved for issuance under the plans. At December 31, 2014, 7.8 million of the shares reserved for issuance remained available for grant under our stock-based compensation plans. We issue new shares upon the exercise of stock options or when restrictions on RSUs and PSUs have been satisfied. RSUs The following table summarizes activity related to nonvested RSUs during 2014:
<table><tr><td></td><td>Number of RSUs (In thousands)</td><td>Weighted Average Grant-Date Fair Value PerShare</td></tr><tr><td>Nonvested at December 31, 2011</td><td>4,302</td><td>$ 78.25</td></tr><tr><td>Granted</td><td>1,987</td><td>81.93</td></tr><tr><td>Vested</td><td>-1,299</td><td>80.64</td></tr><tr><td>Forfeited</td><td>-168</td><td>79.03</td></tr><tr><td>Nonvested at December 31, 2012</td><td>4,822</td><td>$ 79.10</td></tr><tr><td>Granted</td><td>1,356</td><td>89.24</td></tr><tr><td>Vested</td><td>-2,093</td><td>79.26</td></tr><tr><td>Forfeited</td><td>-226</td><td>81.74</td></tr><tr><td>Nonvested at December 31, 2013</td><td>3,859</td><td>$ 82.42</td></tr><tr><td>Granted</td><td>745</td><td>146.85</td></tr><tr><td>Vested</td><td>-2,194</td><td>87.66</td></tr><tr><td>Forfeited</td><td>-84</td><td>91.11</td></tr><tr><td>Nonvested at December 31, 2014</td><td>2,326</td><td>$ 97.80</td></tr></table>
RSUs are valued based on the fair value of our common stock on the date of grant. Employees who are granted RSUs receive the right to receive shares of stock after completion of the vesting period; however, the shares are not issued and the employees cannot sell or transfer shares prior to vesting and have no voting rights until the RSUs vest, generally three years from the date of the award. Employees who are granted RSUs receive dividend-equivalent cash payments only upon vesting. For these RSU awards, the grant-date fair value is equal to the closing market price of our common stock on the date of grant less a discount to reflect the delay in payment of dividend-equivalent cash payments. We recognize the grant-date fair value of RSUs, less estimated forfeitures, as compensation expense ratably over the requisite service period, which beginning with the RSUs granted in 2013 is shorter than the vesting period if the employee is retirement eligible on the date of grant or will become retirement eligible before the end of the vesting period. ITEM 6 SELECTED FINANCIAL DATA The following table summarizes certain selected consolidated financial data for, and as of the end of, each of the fiscal years in the five-year period ended June 30, 2009. The data set forth below should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements and related Notes included elsewhere in this Report. The consolidated statements of operations data for the years ended June 30, 2009, 2008 and 2007 and the balance sheet data as of June 30, 2009 and 2008 are derived from our audited consolidated financial statements included elsewhere in this Report. The consolidated statements of operations data for the years ended June 30, 2006 and 2005 and the balance sheet data as of June 30, 2007, 2006 and 2005 are derived from our audited consolidated financial statements not included herein. Historical results are not necessarily indicative of the results to be expected in the future, and the results for the years presented should not be considered indicative of our future results of operations.
<table><tr><td> Consolidated Statement of Income Data:</td><td colspan="5">Years Ended June 30</td></tr><tr><td> (In thousands, except per share data)</td><td>2009</td><td>2008</td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td>Net revenues</td><td>$920,735</td><td>$835,397</td><td>$716,332</td><td>$606,996</td><td>$425,505</td></tr><tr><td>Cost of sales</td><td>366,933</td><td>338,544</td><td>272,140</td><td>230,101</td><td>150,645</td></tr><tr><td>Product recall expenses</td><td>-</td><td>3,103</td><td>59,700</td><td>-</td><td>-</td></tr><tr><td>Gross profit</td><td>553,802</td><td>493,750</td><td>384,492</td><td>376,895</td><td>274,860</td></tr><tr><td>Selling, general and administrative expenses</td><td>289,875</td><td>278,087</td><td>237,326</td><td>200,168</td><td>135,703</td></tr><tr><td>Research and development expenses</td><td>63,056</td><td>60,524</td><td>50,106</td><td>37,216</td><td>30,014</td></tr><tr><td>Donations to research foundations</td><td>3,500</td><td>2,000</td><td>-</td><td>760</td><td>500</td></tr><tr><td>In-process research and development charge</td><td>-</td><td>-</td><td>-</td><td>-</td><td>5,268</td></tr><tr><td>Amortization of acquired intangible assets</td><td>7,060</td><td>7,791</td><td>6,897</td><td>6,327</td><td>870</td></tr><tr><td>Restructuring expenses</td><td>-</td><td>2,378</td><td>-</td><td>1,124</td><td>5,152</td></tr><tr><td>Total operating expenses</td><td>363,491</td><td>350,780</td><td>294,329</td><td>245,595</td><td>177,507</td></tr><tr><td>Income from operations</td><td>190,311</td><td>142,970</td><td>90,163</td><td>131,300</td><td>97,353</td></tr><tr><td>Other income (expenses):</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest income (expense), net</td><td>10,205</td><td>10,058</td><td>6,477</td><td>1,320</td><td>-808</td></tr><tr><td>Other, net</td><td>1,168</td><td>4,827</td><td>1,333</td><td>774</td><td>81</td></tr><tr><td>Total other income (expenses)</td><td>11,373</td><td>14,885</td><td>7,810</td><td>2,094</td><td>-727</td></tr><tr><td>Income before income taxes</td><td>201,684</td><td>157,855</td><td>97,973</td><td>133,394</td><td>96,626</td></tr><tr><td>Income taxes</td><td>-55,236</td><td>-47,552</td><td>-31,671</td><td>-45,183</td><td>-31,841</td></tr><tr><td>Net income</td><td>$146,448</td><td>$110,303</td><td>$66,302</td><td>$88,211</td><td>$64,785</td></tr><tr><td>Basic earnings per share</td><td>$1.94</td><td>$1.43</td><td>$0.86</td><td>$1.22</td><td>$0.94</td></tr><tr><td>Diluted earnings per share</td><td>$1.90</td><td>$1.40</td><td>$0.85</td><td>$1.16</td><td>$0.91</td></tr><tr><td>Weighted average:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic shares outstanding</td><td>75,629</td><td>77,378</td><td>76,709</td><td>72,307</td><td>68,643</td></tr><tr><td>Diluted shares outstanding</td><td>77,113</td><td>78,712</td><td>78,253</td><td>77,162</td><td>74,942</td></tr></table>
The results of our international operations are affected by changes in exchange rates between currencies. Changes in exchange rates may negatively affect our consolidated net revenue and gross profit margins from international operations. We are exposed to the risk that the dollar value equivalent of anticipated cash flows would be adversely affected by changes in foreign currency exchange rates. We manage this risk through foreign currency option contracts. Stock-Based Compensation Costs We have granted stock options to personnel, including officers and directors, under our 2006 Incentive Award Plan, as amended (the “2006 Plan”). These options have expiration dates of seven years from the date of grant and vest over four years. We granted these options with the exercise price equal to the market value as determined at the date of grant. We have also offered to our personnel, including officers and directors, the right to purchase shares of our common stock at a discount under our employee stock purchase plan (“ESPP”). As of July 1, 2005, we adopted SFAS 123(R) using the modified prospective method, which requires measurement of compensation expense of all stock-based awards at fair value on the date of grant and recognition of compensation expense over the service period for awards expected to vest. Under this method, the provisions of SFAS 123(R) apply to all awards granted or modified after the date of adoption. In addition, the unrecognized expense of awards not yet vested at the date of adoption, determined under the original provisions of SFAS No.123 shall be recognized in net income in the periods after adoption. The fair value of stock options is determined using the Black-Scholes valuation model. Such value is recognized as expense over the service period, using the gradedattribution method for stock-based awards granted prior to July 1, 2005 and the straight-line method for stock-based awards granted after July 1, 2005. The fair value of stock options granted under our stock option plans and purchase rights granted under our ESPP is estimated on the date of the grant using the Black-Scholes option-pricing model, assuming no dividends and the following assumptions:
<table><tr><td></td><td colspan="3"> Years ended June 30</td></tr><tr><td></td><td>2009</td><td> 2008</td><td> 2007</td></tr><tr><td>Stock Options:</td><td></td><td></td><td></td></tr><tr><td>Weighted average grant date fair value</td><td>$10.58</td><td>$12.87</td><td>$14.53</td></tr><tr><td>Weighted average risk-free interest rate</td><td>1.9%</td><td>2.6-4.6%</td><td>4.3-5.1%</td></tr><tr><td>Dividend yield</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Expected option life in years</td><td>4.0-4.8</td><td>4.0-4.8</td><td>4.0-5.2</td></tr><tr><td>Volatility</td><td>27-38%</td><td>27-28%</td><td>26-30%</td></tr><tr><td>ESPP Purchase rights:</td><td></td><td></td><td></td></tr><tr><td>Weighted average risk-free interest rate</td><td>1.3%</td><td>1.7-5.0%</td><td>4.9-5.1%</td></tr><tr><td>Dividend yield</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Expected option life</td><td>6 months</td><td>6 months</td><td>6 months</td></tr><tr><td>Volatility</td><td>33-55%</td><td>23-33%</td><td>30-41%</td></tr></table>
Expected volatilities are based on a combination of historical volatilities of our stock and the implied volatilities from tradeable options of our stock corresponding to their expected term. We use a combination of the historic and implied volatilities as the additional use of the implied volatilities are more representative of our future stock price trends. The expected life represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and our historical exercise patterns. The risk-free 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. |
7,880,307 | What do all Number of shares sum up, excluding those negative ones in 2012 ? | also subject to financial covenants which require the Company to limit its consolidated total leverage ratio and to maintain a consolidated interest coverage ratio. The most restrictive covenant is the consolidated total leverage ratio which is limited to 3.5. The Company was in compliance with its debt covenants throughout the years ended December 31, 2013 and 2012. On June 6, 2013, the Company completed a public offering of $800 million aggregate principal amount of 2.050% senior unsecured notes due October 1, 2018. The notes were issued at 99.791% of their principal amount. Net proceeds of $793.5 million were used to pay off a portion of the outstanding revolver balance under the 2012 Facility. The notes bear interest at a fixed rate of 2.050% per year, payable semi-annually in arrears on April 1 and October 1 of each year, beginning October 1, 2013. Roper may redeem some or all of the notes at any time or from time to time, at 100% of their principal amount plus a make-whole premium based on a spread to U. S. Treasury securities as described in the indenture relating to the notes. On November 21, 2012, Roper completed a public offering of $400 million aggregate principal amount of 1.850% senior unsecured notes due November 15, 2017 and $500 million aggregate principal amount of 3.125% senior unsecured notes due November 15, 2022. The notes bear interest at a fixed rate of 1.850% and 3.125% per year, respectively, payable semi-annually in arrears on May 15 and November 15 of each year, beginning May 15, 2013. Roper may redeem some or all of the notes at any time or from time to time, at 100% of their principal amount plus a make-whole premium based on a spread to U. S. Treasury securities as described in the indenture relating to the notes. In September 2009, the Company completed a public offering of $500 million aggregate principal amount of 6.25% senior unsecured notes due September 2019. The notes bear interest at a fixed rate of 6.25% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning March 1, 2010. Roper may redeem some of all of these notes at any time or from time to time, at 100% of their principal amount, plus a makewhole premium based on a spread to U. S. Treasury securities. The Company’s senior notes are unsecured senior obligations of the Company and rank equally in right of payment with all of Roper’s existing and future unsecured and unsubordinated indebtedness. The notes are effectively subordinated to any of its existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness. The notes are not guaranteed by any of Roper’s subsidiaries and are effectively subordinated to all existing and future indebtedness and other liabilities of Roper’s subsidiaries. On August 15, 2013, $500 million of senior notes due 2013 matured, and were repaid using revolver borrowings from the 2012 Facility. Other debt includes $8 million of senior subordinated convertible notes due 2034. Total debt at December 31 consisted of the following (in thousands):
<table><tr><td></td><td>2013</td><td>2012</td></tr><tr><td>$1.50 billion revolving credit facility</td><td>$250,000</td><td>$100,000</td></tr><tr><td>2013 Notes*</td><td>-</td><td>505,087</td></tr><tr><td>2017 Notes</td><td>400,000</td><td>400,000</td></tr><tr><td>2018 Notes</td><td>800,000</td><td>-</td></tr><tr><td>2019 Notes</td><td>500,000</td><td>500,000</td></tr><tr><td>2022 Notes</td><td>500,000</td><td>500,000</td></tr><tr><td>Senior Subordinated Convertible Notes</td><td>8,270</td><td>11,594</td></tr><tr><td>Other</td><td>6,582</td><td>5,441</td></tr><tr><td>Total debt</td><td>2,464,852</td><td>2,022,122</td></tr><tr><td>Less current portion</td><td>11,016</td><td>519,015</td></tr><tr><td>Long-term debt</td><td>$2,453,836</td><td>$1,503,107</td></tr></table>
*Shown net of fair value swap adjustment of $5,087. represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U. S. Treasury yield curve in effect at the time of grant. The weighted-average fair value of options granted in 2013, 2012 and 2011 were calculated using the following weighted-average assumptions:
<table><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>Weighted-average fair value ($)</td><td>37.08</td><td>30.25</td><td>24.45</td></tr><tr><td>Risk-free interest rate (%)</td><td>0.86</td><td>0.77</td><td>1.91</td></tr><tr><td>Average expected option life (years)</td><td>5.19</td><td>5.24</td><td>5.34</td></tr><tr><td>Expected volatility (%)</td><td>36.09</td><td>36.51</td><td>35.27</td></tr><tr><td>Expected dividend yield (%)</td><td>0.56</td><td>0.58</td><td>0.60</td></tr></table>
The following table summarizes the Company’s activities with respect to its stock option plans for the years ended December 31, 2013 and 2012:
<table><tr><td></td><td>Number of shares</td><td>Weighted-average exercise price per share</td><td>Weighted-average contractual term</td><td>Aggregate intrinsic value</td></tr><tr><td>Outstanding at January 1, 2012</td><td>3,822,662</td><td>$ 50.44</td><td></td><td></td></tr><tr><td>Granted</td><td>538,100</td><td>95.27</td><td></td><td></td></tr><tr><td>Exercised</td><td>-1,389,069</td><td>40.46</td><td></td><td></td></tr><tr><td>Canceled</td><td>-53,498</td><td>70.01</td><td></td><td></td></tr><tr><td>Outstanding at December 31, 2012</td><td>2,918,195</td><td>63.15</td><td>6.52</td><td>$ 141,029,378</td></tr><tr><td>Granted</td><td>601,350</td><td>117.78</td><td></td><td></td></tr><tr><td>Exercised</td><td>-424,945</td><td>56.48</td><td></td><td></td></tr><tr><td>Canceled</td><td>-106,164</td><td>98.74</td><td></td><td></td></tr><tr><td>Outstanding at December 31, 2013</td><td>2,988,436</td><td>74.00</td><td>6.22</td><td>$ 193,279,214</td></tr><tr><td>Exercisable at December 31, 2013</td><td>1,859,725</td><td>$ 56.99</td><td>4.84</td><td>$ 151,929,651</td></tr></table>
The following table summarizes information for stock options outstanding at December 31, 2013:
<table><tr><td></td><td colspan="3">Outstanding options</td><td colspan="2">Exercisable options</td></tr><tr><td>Exercise price</td><td>Number</td><td>Averageexerciseprice</td><td>Average remaininglife (years)</td><td>Number</td><td>Averageexerciseprice</td></tr><tr><td>$ 14.09 - 28.17</td><td>157,638</td><td>$ 23.70</td><td>0.2</td><td>157,638</td><td>$ 23.70</td></tr><tr><td>28.17 - 42.26</td><td>126,574</td><td>41.81</td><td>5.2</td><td>126.574</td><td>41.81</td></tr><tr><td>42.27 - 56.34</td><td>1,113,058</td><td>53.79</td><td>4.4</td><td>1,113,058</td><td>53.79</td></tr><tr><td>56.35 - 70.43</td><td>96,800</td><td>67.88</td><td>7.5</td><td>45,300</td><td>66.71</td></tr><tr><td>70.44 - 84.52</td><td>453,392</td><td>74.63</td><td>7.1</td><td>278,034</td><td>75.21</td></tr><tr><td>84.53 - 98.60</td><td>419,924</td><td>94.00</td><td>8.1</td><td>130,085</td><td>93.91</td></tr><tr><td>98.61 - 112.69</td><td>48,700</td><td>103.41</td><td>8.6</td><td>9,036</td><td>103.64</td></tr><tr><td>112.70 - 126.77</td><td>547,350</td><td>117.03</td><td>9.2</td><td>-</td><td>-</td></tr><tr><td>126.78 - 140.86</td><td>25,000</td><td>131.54</td><td>9.6</td><td>-</td><td>-</td></tr><tr><td>$ 14.09 - 140.86</td><td>2,988,436</td><td>$ 74.00</td><td>6.2</td><td>1,859,725</td><td>$ 56.99</td></tr></table>
At December 31, 2013, there was $23.7 million of total unrecognized compensation expense related to nonvested options granted under the Company’s share-based payment plans. That cost is expected to be recognized over a weighted-average period of 2.0 years. The total intrinsic value of options exercised in 2013, 2012 and 2011 was $28.8 million, $86.0 million and $41.2 million, respectively. Cash received from option exercises under all plans in 2013 and 2012 was $24.0 million and $56.1 million, respectively NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): |
0.2928 | What is the percentage of Long-term debt in relation to the total for Total contractual obligations ? | Industrial Participation Agreements We have entered into various industrial participation agreements with certain customers outside of the U. S. to facilitate economic flow back and/or technology or skills transfer to their businesses or government agencies as the result of their procurement of goods and/or services from us. These commitments may be satisfied by our local operations there, placement of direct work or vendor orders for supplies, opportunities to bid on supply contracts, transfer of technology or other forms of assistance. However, in certain cases, our commitments may be satisfied through other parties (such as our vendors) who purchase supplies from our non-U. S. customers. In certain cases, penalties could be imposed if we do not meet our industrial participation commitments. During 2017, we incurred no such penalties. As of December 31, 2017, we have outstanding industrial participation agreements totaling $17.9 billion that extend through 2030. Purchase order commitments associated with industrial participation agreements are included in purchase obligations in the table above. To be eligible for such a purchase order commitment from us, a non-U. S. supplier must have sufficient capability to meet our requirements and must be competitive in cost, quality and schedule. Commercial Commitments The following table summarizes our commercial commitments outstanding as of December 31, 2017.
<table><tr><td>(Dollars in millions)</td><td>Total AmountsCommitted/MaximumAmount of Loss</td><td>Less than1 year</td><td>1-3years</td><td>4-5years</td><td>After 5years</td></tr><tr><td>Standby letters of credit and surety bonds</td><td>$3,708</td><td>$1,659</td><td>$782</td><td>$559</td><td>$708</td></tr><tr><td>Commercial aircraft financing commitments</td><td>10,221</td><td>2,047</td><td>4,372</td><td>2,256</td><td>1,546</td></tr><tr><td>Total commercial commitments</td><td>$13,929</td><td>$3,706</td><td>$5,154</td><td>$2,815</td><td>$2,254</td></tr></table>
Commercial aircraft financing commitments include commitments to provide financing related to aircraft on order, under option for deliveries or proposed as part of sales campaigns or refinancing with respect to delivered aircraft, based on estimated earliest potential funding dates. Based on historical experience, we anticipate that we will not be required to fund a significant portion of our financing commitments. However, there can be no assurances that we will not be required to fund greater amounts than historically required, particularly if the Export-Import Bank of the United States continues to be unable to, or does not, provide new financing support. See Note 11 to our Consolidated Financial Statements. Contingent Obligations We have significant contingent obligations that arise in the ordinary course of business, which include the following: Legal Various legal proceedings, claims and investigations are pending against us. Legal contingencies are discussed in Note 20 to our Consolidated Financial Statements. Environmental Remediation We are involved with various environmental remediation activities and have recorded a liability of $524 million at December 31, 2017. For additional information, see Note 11 to our Consolidated Financial Statements. Off-Balance Sheet Arrangements We are a party to certain off-balance sheet arrangements including certain guarantees. For discussion of these arrangements, see Note 12 to our Consolidated Financial Statements. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
<table><tr><td>Measurement PointDecember 31</td><td>The Priceline Group Inc.</td><td>NASDAQComposite Index</td><td>S&P 500Index</td><td>RDG InternetComposite</td></tr><tr><td>2010</td><td>100.00</td><td>100.00</td><td>100.00</td><td>100.00</td></tr><tr><td>2011</td><td>117.06</td><td>100.53</td><td>102.11</td><td>102.11</td></tr><tr><td>2012</td><td>155.27</td><td>116.92</td><td>118.45</td><td>122.23</td></tr><tr><td>2013</td><td>290.93</td><td>166.19</td><td>156.82</td><td>199.42</td></tr><tr><td>2014</td><td>285.37</td><td>188.78</td><td>178.29</td><td>195.42</td></tr><tr><td>2015</td><td>319.10</td><td>199.95</td><td>180.75</td><td>267.25</td></tr></table>
Contractual Obligations: Presented in the following table are CMS Energy’s and Consumers’ contractual obligations for each of the periods presented. The table excludes all amounts classified as current liabilities on CMS Energy’s and Consumers’ consolidated balance sheets, other than the current portion of long-term debt, capital leases, and financing obligation
<table><tr><td><i></i></td><td><i></i></td><td><i></i></td><td><i></i></td><td><i></i></td><td><i>In Millions</i></td><td><i></i></td></tr><tr><td></td><td colspan="5">Payments Due</td><td></td></tr><tr><td></td><td></td><td>Less Than</td><td>One to</td><td>Three to</td><td>More Than</td><td></td></tr><tr><td>December 31, 2013</td><td>Total</td><td>One Year</td><td>Three Years</td><td>Five Years</td><td>Five Years</td><td></td></tr><tr><td> CMS Energy, including Consumers</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Long-term debt</td><td>$7,654</td><td>$368</td><td>$1,207</td><td>$1,443</td><td>$4,636</td><td></td></tr><tr><td>Interest payments on long-term debt</td><td>3,335</td><td>364</td><td>694</td><td>573</td><td>1,704</td><td></td></tr><tr><td>Capital leases and financing obligation</td><td>159</td><td>23</td><td>43</td><td>38</td><td>55</td><td></td></tr><tr><td>Interest payments on capital leases and financing obligation</td><td>64</td><td>10</td><td>17</td><td>15</td><td>22</td><td></td></tr><tr><td>Operating leases</td><td>164</td><td>26</td><td>45</td><td>37</td><td>56</td><td></td></tr><tr><td>Asset retirement obligations</td><td>1,215</td><td>11</td><td>37</td><td>36</td><td>1,131</td><td></td></tr><tr><td>Deferred investment tax credit</td><td>40</td><td>3</td><td>6</td><td>5</td><td>26</td><td></td></tr><tr><td>Environmental liabilities</td><td>198</td><td>14</td><td>34</td><td>36</td><td>114</td><td></td></tr><tr><td>Purchase obligations1</td><td>12,068</td><td>1,879</td><td>2,015</td><td>2,007</td><td>6,167</td><td></td></tr><tr><td>Purchase obligations – related parties2</td><td>1,244</td><td>89</td><td>170</td><td>175</td><td>810</td><td></td></tr><tr><td>Total contractual obligations</td><td>$26,141</td><td>$2,787</td><td>$4,268</td><td>$4,365</td><td>$14,721</td><td></td></tr><tr><td> Consumers</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Long-term debt</td><td>$4,625</td><td>$43</td><td>$449</td><td>$848</td><td>$3,285</td><td></td></tr><tr><td>Interest payments on long-term debt</td><td>2,259</td><td>225</td><td>441</td><td>370</td><td>1,223</td><td></td></tr><tr><td>Capital leases and financing obligation</td><td>159</td><td>23</td><td>43</td><td>38</td><td>55</td><td></td></tr><tr><td>Interest payments on capital leases and financing obligation</td><td>64</td><td>10</td><td>17</td><td>15</td><td>22</td><td></td></tr><tr><td>Operating leases</td><td>164</td><td>26</td><td>45</td><td>37</td><td>56</td><td></td></tr><tr><td>Asset retirement obligations</td><td>1,214</td><td>11</td><td>37</td><td>36</td><td>1,130</td><td></td></tr><tr><td>Deferred investment tax credit</td><td>40</td><td>3</td><td>6</td><td>5</td><td>26</td><td></td></tr><tr><td>Environmental liabilities</td><td>127</td><td>8</td><td>24</td><td>28</td><td>67</td><td></td></tr><tr><td>Purchase obligations1</td><td>11,838</td><td>1,803</td><td>1,960</td><td>1,953</td><td>6,122</td><td></td></tr><tr><td>Purchase obligations – related parties2</td><td>1,244</td><td>89</td><td>170</td><td>175</td><td>810</td><td></td></tr><tr><td>Total contractual obligations</td><td>$21,734</td><td>$2,241</td><td>$3,192</td><td>$3,505</td><td>$12,796</td><td></td></tr></table>
1 Long-term contracts for purchase of commodities and related services, and construction and service agreements. The commodities and related services include natural gas and associated transportation, electricity, and coal and associated transportation.2 Long-term power purchase agreements from certain affiliates of CMS Enterprises. 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 11, Retirement Benefits. Off-Balance-Sheet Arrangements: CMS Energy, Consumers, and certain of their subsidiaries also 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 In December 2006 the Tax Relief and Health Care Act of 2006 was signed into law. The Act included a reinstatement of the federal research and experimental credit through December 31, 2007 that was retroactive to January 1, 2006. We recorded a discrete tax benefit of approximately $3.7 million for the retroactive amount related to fiscal 2006 during the twelve months ended July 31, 2007. Significant deferred tax assets and liabilities were as follows at the dates indicated:
<table><tr><td></td><td colspan="2">July 31,</td></tr><tr><td><i>(In thousands)</i></td><td> 2008</td><td>2007</td></tr><tr><td>Deferred tax assets:</td><td></td><td></td></tr><tr><td>Accruals and reserves not currently deductible</td><td>$28,178</td><td>$34,095</td></tr><tr><td>Deferred rent</td><td>13,859</td><td>21,363</td></tr><tr><td>Accrued and deferred compensation</td><td>33,954</td><td>30,397</td></tr><tr><td>Loss and tax credit carryforwards</td><td>38,782</td><td>19,448</td></tr><tr><td>Property and equipment</td><td>12,130</td><td>30,385</td></tr><tr><td>Share-based compensation</td><td>77,336</td><td>46,021</td></tr><tr><td>Other, net</td><td>21,002</td><td>22,740</td></tr><tr><td>Total deferred tax assets</td><td>225,241</td><td>204,449</td></tr><tr><td>Deferred tax liabilities:</td><td></td><td></td></tr><tr><td>Intangible assets</td><td>65,925</td><td>41,152</td></tr><tr><td>Other, net</td><td>5,095</td><td>4,022</td></tr><tr><td>Total deferred tax liabilities</td><td>71,020</td><td>45,174</td></tr><tr><td>Total net deferred tax assets</td><td>154,221</td><td>159,275</td></tr><tr><td>Valuation allowance</td><td>—</td><td>-2,527</td></tr><tr><td>Total net deferred tax assets, net of valuation allowance</td><td>$154,221</td><td>$156,748</td></tr></table>
We had provided a valuation allowance related to the benefits of certain state capital loss carryforwards and state net operating losses that we believed were unlikely to be realized. The valuation allowance decreased by $2.5 million during the twelve months ended July 31, 2008 as a result of the elimination of the deferred tax asset in connection with the sale of certain outsourced payroll assets. See Note 7. The valuation allowance decreased by $1.9 million during the twelve months ended July 31, 2007 due to utilization of $1.0 million and expired losses of $0.9 million. The components of total net deferred tax assets, net of valuation allowance, as shown on our balance sheet were as follows at the dates indicated:
<table><tr><td></td><td colspan="2"> July 31,</td></tr><tr><td><i>(In thousands)</i></td><td> 2008</td><td> 2007</td></tr><tr><td>Current deferred income taxes</td><td>$101,730</td><td>$84,682</td></tr><tr><td>Long-term deferred income taxes</td><td>52,491</td><td>72,066</td></tr><tr><td>Total net deferred tax assets, net of valuation allowance</td><td>$154,221</td><td>$156,748</td></tr></table>
We acquired Electronic Clearing House, Inc. and Homestead Technologies Inc. in fiscal 2008 and Digital Insight in fiscal 2007. See Note 6. These companies had federal net operating loss carryforwards at their respective dates of acquisition that totaled approximately $164 million. The tax effects of these federal net operating loss carryforwards and other federal tax credit carryforwards totaled approximately $66 million. We recorded the tax effects of these carryforwards as deferred tax assets at the respective dates of acquisition. These carryforwards do not result in an income tax provision benefit, but they reduce income taxes payable and cash paid for income taxes as we utilize them. At July 31, 2008, we had total federal net operating loss carryforwards of approximately $95.0 million that will expire starting in fiscal 2019. Utilization of the net operating losses is subject to annual limitation. The annual limitation may result in the expiration of net operating losses before utilization. At July 31, 2008, we had various state net operating loss and tax credit carryforwards for which we have recorded a deferred tax asset of $4.3 million. The state net operating losses will expire starting in fiscal 2013. Utilization of the net operating losses is subject to annual limitation. The annual limitation may result in the expiration of net operating losses before utilization. |
8,717,126 | What is the total amount of the Fee revenue in the year where Total revenue is greater than 13000000? | 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) |
27.31201 | what is the estimated price of hologic common stock used in the transaction for biolucent acquisition? | 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: |
254,190 | What's the greatest value of Fixed income in 2015? (in millions) | Contractual Obligations and Commercial Commitments The following table (in thousands) summarizes our contractual obligations at March 31, 2007 and the effects such obligations are expected to have on our liquidity and cash flows in future periods.
<table><tr><td></td><td>Payments Due By Fiscal Year</td></tr><tr><td>Contractual Obligations</td><td>Total</td><td>Less than 1 Year</td><td>1-3 Years</td><td>3-5 Years</td><td>More than 5 Years</td></tr><tr><td>Operating Lease Obligations</td><td>$7,669</td><td>$1,960</td><td>$3,441</td><td>$1,652</td><td>$616</td></tr><tr><td>Purchase Obligations</td><td>6,421</td><td>6,421</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total Obligations</td><td>$14,090</td><td>$8,381</td><td>$3,441</td><td>$1,652</td><td>$616</td></tr></table>
We have no long-term debt, capital leases or material commitments at March 31, 2007 other than those shown in the table above. In May 2005, we acquired all the shares of outstanding capital stock of Impella CardioSystems AG, a company headquartered in Aachen, Germany. The aggregate purchase price excluding a contingent payment in the amount of $5.6 million made on January 30, 2007 in the form of common stock, was approximately $45.1 million, which consisted of $42.2 million of our common stock, $1.6 million of cash paid to certain former shareholders of Impella, and $1.3 million of transaction costs, consisting primarily of fees paid for financial advisory and legal services. We may make additional contingent payments to Impella’s former shareholders based on additional milestone payments related to FDA approvals in the amount of up to $11.2 million. These contingent payments may be made in a combination of cash or stock under circumstances described in the purchase agreement. If any contingent payments are made, they will result in an increase to the carrying value of goodwill. We apply the disclosure provisions of FIN No.45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Guarantees of Indebtedness of Others, and Interpretation of FASB Statements No.5, 57 and 107 and Rescission of FASB Interpretation No.34 (FIN No.45) to our agreements that contain guarantee or indemnification clauses. These disclosure provisions expand those required by SFAS No.5 by requiring that guarantors disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. The following is a description of arrangements in which we are a guarantor. We enter into agreements with other companies in the ordinary course of business, typically with underwriters, contractors, clinical sites and customers that include indemnification provisions. Under these provisions we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited. We have never incurred any material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the estimated fair value of these agreements is minimal. Accordingly, we have no liabilities recorded for these agreements as of March 31, 2007. Clinical study agreements – In our clinical study agreements, we have agreed to indemnify the participating institutions against losses incurred by them for claims related to any personal injury of subjects taking part in the study to the extent they relate to use of our devices in accordance with the clinical study agreement, the protocol for the device and our instructions. The indemnification provisions contained within our clinical study agreements do not generally include limits on the claims. We have never incurred any material costs related to the indemnification provisions contained in our clinical study agreements. Product warranties—We routinely accrue for estimated future warranty costs on our product sales at the time of shipment. All of our products are subject to rigorous regulation and quality standards. While we engage in extensive product quality programs and processes, including monitoring and evaluating the quality of our component suppliers, our warranty obligations are affected by product failure rates. Our operating results could be adversely affected if the actual cost of product failures exceeds the estimated warranty provision. Patent indemnifications—In many sales transactions, we indemnify customers against possible claims of patent infringement caused by our products. The indemnifications contained within sales contracts usually do not include limits on the claims. We have never incurred any material costs to defend lawsuits or settle patent infringement claims related to sales transactions. Under the provisions of FIN No.45, intellectual property indemnifications require disclosure only. iShares iShares is the leading ETF provider in the world, with $1.3 trillion of AUM at December 31, 2016 and was the top asset gatherer globally in 20161 with record net inflows of $140.5 billion resulting in an organic growth rate of 13%. Equity net inflows of $74.9 billion were driven by flows into the Core range and into funds with U. S. and broad developed market equity exposures. Record fixed income net inflows of $59.9 billion were diversified across exposures and product lines, led by flows into the Core range, corporate and high yield bond funds. iShares multi-asset and alternatives funds contributed a combined $5.7 billion of net inflows, primarily into commodities funds. iShares represented 27% of long-term AUM at December 31, 2016 and 36% of long-term base fees for 2016. Component changes in iShares AUM for 2016 are presented below.
<table><tr><td>(in millions)</td><td>December 31,2015</td><td>Netinflows</td><td>Marketchange</td><td>FX impact</td><td>December 31,2016</td></tr><tr><td>Equity</td><td>$823,156</td><td>$74,914</td><td>$56,469</td><td>$-3,287</td><td>$951,252</td></tr><tr><td>Fixed income</td><td>254,190</td><td>59,913</td><td>3,782</td><td>-3,178</td><td>314,707</td></tr><tr><td>Multi-asset</td><td>2,730</td><td>354</td><td>61</td><td>4</td><td>3,149</td></tr><tr><td>Alternatives<sup>-1</sup></td><td>12,485</td><td>5,298</td><td>1,055</td><td>-67</td><td>18,771</td></tr><tr><td>Total</td><td>$1,092,561</td><td>$140,479</td><td>$61,367</td><td>$-6,528</td><td>$1,287,879</td></tr></table>
(1) Amounts include commodity iShares. Our broad iShares product range offers investors a precise, transparent and efficient way to tap market returns and gain access to a full range of asset classes and global markets that have been difficult for many investors to access, as well as the liquidity required to make adjustments to their exposures quickly and cost-efficiently. ? U. S. iShares AUM ended 2016 at $967.3 billion with $106.9 billion of net inflows driven by strong demand for the Core range and U. S. and broad developed market equities as well as a diverse range of fixed income products.2 In 2016, we saw increased investor focus on risk-aware, “smart beta” products, which saw $20.2 billion of net inflows. ? International iShares AUM ended 2016 at $320.5 billion with net inflows of $33.6 billion led by fixed income net inflows of $21.9 billion, diversified across high yield, emerging market and investment grade corporate bond funds.2 Our international Core ranges in Canada and Europe demonstrated solid results in their third year, raising a combined $11.6 billion in net inflows as we continue to expand our international presence among buy-and-hold investors. Institutional BlackRock’s institutional AUM is well diversified by both product and region, and we serve institutional investors on six continents in sub-categories including: pensions, endowments and foundations, official institutions, and financial institutions. Component changes in Institutional long-term AUM for 2016 are presented below.
<table><tr><td>(in millions)</td><td>December 31,2015</td><td>Net inflows (outflows)</td><td>Marketchange</td><td>FX impact</td><td>December 31,2016</td></tr><tr><td>Active:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equity</td><td>$121,442</td><td>$-7,449</td><td>$11,112</td><td>$-4,406</td><td>$120,699</td></tr><tr><td>Fixed income</td><td>514,428</td><td>10,234</td><td>20,242</td><td>-8,177</td><td>536,727</td></tr><tr><td>Multi-asset</td><td>252,041</td><td>13,322</td><td>18,516</td><td>-6,946</td><td>276,933</td></tr><tr><td>Alternatives</td><td>74,941</td><td>1,811</td><td>619</td><td>-1,756</td><td>75,615</td></tr><tr><td>Active subtotal</td><td>962,852</td><td>17,918</td><td>50,489</td><td>-21,285</td><td>1,009,974</td></tr><tr><td>Index:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equity</td><td>1,285,419</td><td>-8,612</td><td>135,997</td><td>-23,800</td><td>1,389,004</td></tr><tr><td>Fixed income</td><td>441,097</td><td>41,401</td><td>55,665</td><td>-39,488</td><td>498,675</td></tr><tr><td>Multi-asset</td><td>6,258</td><td>-82</td><td>843</td><td>-91</td><td>6,928</td></tr><tr><td>Alternatives</td><td>6,003</td><td>784</td><td>790</td><td>-503</td><td>7,074</td></tr><tr><td>Index subtotal</td><td>1,738,777</td><td>33,491</td><td>193,295</td><td>-63,882</td><td>1,901,681</td></tr><tr><td>Total</td><td>$2,701,629</td><td>$51,409</td><td>$243,784</td><td>$-85,167</td><td>$2,911,655</td></tr></table>
From an enterprise risk management perspective, management sets limits on the levels of catastrophe loss exposure the Company may underwrite. The limits are revised periodically based on a variety of factors, including but not limited to the Company’s financial resources and expected earnings and risk/reward analyses of the business being underwritten. The Company may purchase reinsurance to cover specific business written or the potential accumulation or aggregation of exposures across some or all of its operations. Reinsurance purchasing decisions consider both the potential coverage and market conditions including the pricing, terms, conditions, availability and collectability of coverage, with the aim of securing cost effective protection from financially secure counterparties. The amount of reinsurance purchased has varied over time, reflecting the Company’s view of its exposures and the cost of reinsurance. Management estimates that the projected net economic loss from its largest 100-year event in a given zone represents approximately 10% of its December 31, 2018 shareholders’ equity. Economic loss is the PML exposure, net of third party reinsurance, reduced by estimated reinstatement premiums to renew coverage and estimated income taxes. The impact of income taxes on the PML depends on the distribution of the losses by corporate entity, which is also affected by inter-affiliate reinsurance. Management also monitors and controls its largest PMLs at multiple points along the loss distribution curve, such as loss amounts at the 20, 50, 100, 250, 500 and 1,000 year return periods. This process enables management to identify and control exposure accumulations and to integrate such exposures into enterprise risk, underwriting and capital management decisions. The Company’s catastrophe loss projections, segmented by risk zones, are updated quarterly and reviewed as part of a formal risk management review process. The table below reflects the Company’s PML exposure, net of third party reinsurance at various return periods for its top three zones/perils (as ranked by the largest 1 in 100 year economic loss) based on loss projection data as of January 1, 2019, adjusted to reflect Industry Loss Warranty (ILW) purchases at the same level the Company had available during 2018.
<table><tr><td>Return Periods (in years)</td><td>1 in 20</td><td>1 in 50</td><td>1 in 100</td><td></td><td>1 in 250</td><td>1 in 500</td><td>1 in 1,000</td></tr><tr><td>Exceeding Probability</td><td colspan="2">5.0%</td><td>2.0%</td><td>1.0%</td><td>0.4%</td><td>0.2%</td><td>0.1%</td></tr><tr><td>(Dollars in millions)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Zone/ Peril</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Southeast U.S., Wind</td><td>$639</td><td>$888</td><td>$1,036</td><td></td><td>$1,315</td><td>$1,583</td><td>$2,444</td></tr><tr><td>California, Earthquake</td><td>136</td><td>470</td><td>781</td><td></td><td>1,132</td><td>1,302</td><td>1,571</td></tr><tr><td>Texas, Wind</td><td>158</td><td>467</td><td>769</td><td></td><td>1,077</td><td>1,152</td><td>1,236</td></tr></table>
The projected net economic losses, defined as PML exposures, net of third party reinsurance, reinstatement premiums and estimated income taxes, for the top three zones/perils scheduled above are as follows: |
152.5 | What's the average of Other operations and maintenance in 2018? (in million) | Rupture" in Note H to the financial statements in Item 8) ($14 million), offset in part by surcharges for assessments and fees that are collected in revenues from customers ($4 million) and lower municipal infrastructure support costs ($2 million). Depreciation and amortization increased $2 million in 2018 compared with 2017 due primarily to higher steam utility plant balances. Taxes, other than income taxes increased $14 million in 2018 compared with 2017 due primarily to higher property taxes ($13 million) and state and local taxes ($2 million), offset in part by a sales and use tax refund ($1 million). Taxes, Other Than Income Taxes At $2,156 million, taxes other than income taxes remain one of CECONY’s largest operating expenses. The principal components of, and variations in, taxes other than income taxes were:
<table><tr><td></td><td colspan="2">For the Years Ended December 31,</td><td></td></tr><tr><td>(Millions of Dollars)</td><td>2018</td><td>2017</td><td>Variation</td></tr><tr><td>Property taxes</td><td>$1,845</td><td>$1,692</td><td>$153</td></tr><tr><td>State and local taxes related to revenue receipts</td><td>330</td><td>319</td><td>11</td></tr><tr><td>Payroll taxes</td><td>69</td><td>67</td><td>2</td></tr><tr><td>Other taxes</td><td>-88</td><td>-21</td><td>-67</td></tr><tr><td>Total</td><td>$2,156(a)</td><td>$2,057(a)</td><td>$99</td></tr></table>
(a) Including sales tax on customers’ bills, total taxes other than income taxes in 2018 and 2017 were $2,628 and $2,495 million, respectively. Other Income (Deductions) Other income (deductions) decreased $6 million in 2018 compared with 2017 due primarily to an increase in non- service costs related to pension and other postretirement benefits. Net Interest Expense Net interest expense increased $66 million in 2018 compared with 2017 due primarily to higher debt balances in 2018. Income Tax Expense Income taxes decreased $359 million in 2018 compared with 2017 due primarily to lower income before income tax expense ($56 million), a decrease in the corporate federal income tax rate due to the TCJA ($250 million), a decrease in tax benefits for plant-related flow items ($9 million) and an increase in the amortization of excess deferred federal income taxes due to the TCJA ($52 million), offset in part by non-deductible business expenses ($3 million) and a decrease in bad debt write-offs ($4 million). CECONY deferred as a regulatory liability its estimated net benefits for the 2018 period under the TCJA. See “Other Regulatory Matters” in Note B to the financial statements in Item 8. O&R
<table><tr><td></td><td colspan="2">For the Year Ended December 31, 2018</td><td></td><td colspan="2">For the Year Ended December 31, 2017</td><td></td><td></td></tr><tr><td>(Millions of Dollars)</td><td>Electric</td><td>Gas</td><td>2018 Total</td><td>Electric</td><td>Gas</td><td>2017 Total</td><td>2018-2017Variation</td></tr><tr><td>Operating revenues</td><td>$642</td><td>$249</td><td>$891</td><td>$642</td><td>$232</td><td>$874</td><td>$17</td></tr><tr><td>Purchased power</td><td>208</td><td>—</td><td>208</td><td>191</td><td>—</td><td>191</td><td>17</td></tr><tr><td>Gas purchased for resale</td><td>—</td><td>86</td><td>86</td><td>—</td><td>73</td><td>73</td><td>13</td></tr><tr><td>Other operations and maintenance</td><td>233</td><td>72</td><td>305</td><td>232</td><td>64</td><td>296</td><td>9</td></tr><tr><td>Depreciation and amortization</td><td>56</td><td>21</td><td>77</td><td>51</td><td>20</td><td>71</td><td>6</td></tr><tr><td>Taxes, other than income taxes</td><td>52</td><td>31</td><td>83</td><td>53</td><td>29</td><td>82</td><td>1</td></tr><tr><td>Operating income</td><td>$93</td><td>$39</td><td>$132</td><td>$115</td><td>$46</td><td>$161</td><td>$-29</td></tr></table>
fund’s third-party administrator based upon the valuation of the underlying securities and instruments and primarily by applying a market or income valuation methodology as appropriate depending on the specific type of security or instrument held. Funds-of-funds are valued based upon the net asset values of the underlying investments in hedge funds. Private equity consists of interests in partnerships that invest in U. S. and non-U. S. debt and equity securities. Partnership interests are valued using the most recent general partner statement of fair value, updated for any subsequent partnership interest cash flows. Real estate includes commercial properties, land and timberland, and generally includes, but is not limited to, retail, office, industrial, multifamily and hotel properties. Real estate fund values are primarily reported by the fund manager and are based on valuation of the underlying investments which include inputs such as cost, discounted cash flows, independent appraisals and market based comparable data. Risk Parity Funds are defined as engineered beta exposure to a wide range of asset classes and risk premia, including equity, interest rates, credit, and commodities. Risk parity funds seek to provide high risk-adjusted returns while providing a high level of diversification relative to a traditional equity/fixed income portfolio. These funds seek to achieve this objective with the use of modest leverage applied to lower-risk, more diverse asset classes. Investments in Risk parity funds are valued using monthly reported net asset values. Also included in these funds are related derivative instruments which are generally employed as asset class substitutes for managing asset/liability mismatches, or bona fide hedging or other appropriate risk management purposes. Derivative instruments are generally valued by the investment managers or in certain instances by third-party pricing sources. The fair value measurements using significant unobservable inputs (Level 3) at December 31, 2015 were as follows: Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
<table><tr><td>In millions</td><td>Otherfixedincome</td><td>Hedgefunds</td><td>Privateequity</td><td>Realestate</td><td>Risk parity funds</td><td>Total</td></tr><tr><td>Beginning balance at December 31, 2014</td><td>$10</td><td>$867</td><td>$519</td><td>$1,101</td><td>$376</td><td>$2,873</td></tr><tr><td>Actual return on plan assets:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Relating to assets still held at the reporting date</td><td>—</td><td>27</td><td>27</td><td>41</td><td>-39</td><td>56</td></tr><tr><td>Relating to assets sold during the period</td><td>—</td><td>3</td><td>-9</td><td>27</td><td>-7</td><td>14</td></tr><tr><td>Purchases, sales and settlements</td><td>—</td><td>-3</td><td>-45</td><td>-75</td><td>10</td><td>-113</td></tr><tr><td>Transfers in and/or out of Level 3</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Ending balance at December 31, 2015</td><td>$10</td><td>$894</td><td>$492</td><td>$1,094</td><td>$340</td><td>$2,830</td></tr></table>
FUNDING AND CASH FLOWS The Company’s funding policy for the Pension Plan is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that the Company may determine to be appropriate considering the funded status of the plans, tax deductibility, cash flow generated by the Company, and other factors. The Company continually reassesses the amount and timing of any discretionary contributions. Contributions to the qualified plan totaling $750 million, $353 million and $31 million were made by the Company in 2015, 2014 and 2013, respectively. Generally, International Paper’s non-U. S. pension plans are funded using the projected benefit as a target, except in certain countries where funding of benefit plans is not required. At December 31, 2015, projected future pension benefit payments, excluding any termination benefits, were as follows:
<table><tr><td>2016</td><td>$782</td></tr><tr><td>2017</td><td>792</td></tr><tr><td>2018</td><td>803</td></tr><tr><td>2019</td><td>818</td></tr><tr><td>2020</td><td>832</td></tr><tr><td>2021 – 2025</td><td>4,365</td></tr></table>
OTHER U. S. PLANS International Paper sponsors the International Paper Company Salaried Savings Plan and the International Paper Company Hourly Savings Plan, both of which are tax-qualified defined contribution 401(k) savings plans. The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in our consolidated balance sheet (in millions):
<table><tr><td></td><td>December 31, 2017</td><td></td></tr><tr><td>Cash, cash equivalents and short-term investments</td><td>$13</td><td></td></tr><tr><td>Trade accounts receivable, less allowances</td><td>10</td><td></td></tr><tr><td>Inventories</td><td>11</td><td></td></tr><tr><td>Prepaid expenses and other assets</td><td>12</td><td></td></tr><tr><td>Other assets</td><td>7</td><td></td></tr><tr><td>Property, plant and equipment — net</td><td>85</td><td></td></tr><tr><td>Bottlers' franchise rights with indefinite lives</td><td>5</td><td></td></tr><tr><td>Goodwill</td><td>103</td><td></td></tr><tr><td>Other intangible assets</td><td>1</td><td></td></tr><tr><td>Allowance for reduction of assets held for sale</td><td>-28</td><td></td></tr><tr><td>Assets held for sale</td><td>$219</td><td><sup>1</sup></td></tr><tr><td>Accounts payable and accrued expenses</td><td>$22</td><td></td></tr><tr><td>Other liabilities</td><td>12</td><td></td></tr><tr><td>Deferred income taxes</td><td>3</td><td></td></tr><tr><td>Liabilities held for sale</td><td>$37</td><td><sup>2</sup></td></tr></table>
1 Consists of total assets relating to North America refranchising of $9 million and Latin America bottling operations of $210 million, which are included in the Bottling Investments operating segment.2 Consists of total liabilities relating to North America refranchising of $5 million and Latin America bottling operations of $32 million, which are included in the Bottling Investments operating segment. We determined that the operations included in the table above did not meet the criteria to be classified as discontinued operations under the applicable guidance. Discontinued Operations In October 2017, the Company and ABI completed the transition of ABI’s controlling interest in CCBA to the Company for $3,150 million. We plan to hold a controlling interest in CCBA temporarily. We anticipate that we will divest a portion of our ownership interest in 2019, which will result in the Company no longer having a controlling interest in CCBA. Accordingly, we have presented the financial position and results of operations of CCBA as discontinued operations in the accompanying consolidated financial statements. As CCBA met the criteria to be classified as held for sale, we were required to record their assets and liabilities at the lower of carrying value or fair value less any costs to sell and present the related assets and liabilities as separate line items in our consolidated balance sheet. During the year ended December 31, 2018, we recorded an impairment charge of $554 million, reflecting management’s view of the proceeds that are expected to be received based on revised projections of future operating results and foreign currency exchange rate fluctuations. Refer to Note 17. Upon consolidation of CCBA, we remeasured our previously held equity interests in CCBA and its South African subsidiary to fair value and recorded a gain on the remeasurement of $150 million. The fair values in our previously held equity investments in CCBA and its South African subsidiary were determined using income approaches, including discounted cash flow models (a Level 3 measurement), and the Company believes the inputs and assumptions used are consistent with those hypothetical marketplace participants would use. We recorded $1,805 million for the noncontrolling interests of CCBA. The fair value of the noncontrolling interests was determined in a manner similar to our previously held equity investments. The preliminary goodwill recorded at the time of the transaction was $4,262 million, none of which is tax deductible. This goodwill is in part due to the significant synergies that are expected from the consolidation of the bottling system in Southern and East Africa, especially within the country of South Africa. As a result, upon finalization of purchase accounting $411 million of the final goodwill balance of $4,186 million was allocated to other reporting units expected to benefit from this transaction. During 2018, the Company acquired additional bottling operations in Zambia and Botswana, which have also been included in assets held for sale — discontinued operations and liabilities held for sale — discontinued operations. Notes to Consolidated Financial Statements Note 1. Summary of Significant Accounting Policies – (Continued) accounted for under the previous accounting guidance, FTB No.85-4, where the carrying value of life settlement contracts was the cash surrender value, and revenue was recognized and included in Other revenues on the Consolidated Statements of Income when the life insurance policy underlying the life settlement contract matured. Under the previous accounting guidance, maintenance expenses were expensed as incurred and included in Other operating expenses on the Consolidated Statements of Income. CNA’s investments in life settlement contracts were $129 million and $115 million at December 31, 2008 and 2007 and are included in Other assets on the Consolidated Balance Sheets. The cash receipts and payments related to life settlement contracts are included in Cash flows from operating activities on the Consolidated Statements of Cash Flows for all periods presented. The fair value of each life insurance policy is determined as the present value of the anticipated death benefits less anticipated premium payments for that policy. These anticipated values are determined using mortality rates and policy terms that are distinct for each insured. The discount rate used reflects current risk-free rates at applicable durations and the risks associated with assessing the current medical condition of the insured, the potential volatility of mortality experience for the portfolio and longevity risk. CNA used its own experience to determine the fair value of its portfolio of life settlement contracts. The mortality experience of this portfolio of life insurance policies may vary by quarter due to its relatively small size. The following table details the values for life settlement contracts as of December 31, 2008. |
9,648 | What's the sum of elements 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): |
106 | What's the total value of all amount that are smaller than 100 in 2008? (in million) | 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 |
2,008 | When does Total calendar year effect reach the largest value? | 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. |
0.0744 | what was the percentage change in the free cash flow from 2014 to 2015 | Private equity fund investments included above are not redeemable, because distributions from the funds will be received when underlying investments of the funds are liquidated. Private equity funds are generally expected to have 10-year lives at their inception, but these lives may be extended at the fund manager’s discretion, typically in one or two-year increments. At December 31, 2018, assuming average original expected lives of 10 years for the funds, 14 percent of the total fair value using net asset value per share (or its equivalent) presented above would have expected remaining lives of three years or less, 43 percent between four and six years and 43 percent between seven and 10 years. The hedge fund investments included above, which are carried at fair value, are generally redeemable monthly (35 percent), quarterly (32 percent), semi-annually (9 percent) and annually (24 percent), with redemption notices ranging from one day to 180 days. At December 31, 2018, investments representing approximately 51 percent of the total fair value of these hedge fund investments had partial contractual redemption restrictions. These partial redemption restrictions are generally related to one or more investments held in the hedge funds that the fund manager deemed to be illiquid. The majority of these contractual restrictions, which may have been put in place at the fund’s inception or thereafter, have pre-defined end dates. The majority of these restrictions are generally expected to be lifted by the end of 2019. FAIR VALUE OPTION Under the fair value option, we may elect to measure at fair value financial assets and financial liabilities that are not otherwise required to be carried at fair value. Subsequent changes in fair value for designated items are reported in earnings. We elect the fair value option for certain hybrid securities given the complexity of bifurcating the economic components associated with the embedded derivatives. For additional information related to embedded derivatives refer to Note 11 herein. Additionally, we elect the fair value option for certain alternative investments when such investments are eligible for this election. We believe this measurement basis is consistent with the applicable accounting guidance used by the respective investment company funds themselves. For additional information on securities and other invested assets for which we have elected the fair value option refer to Note 6 herein. The following table presents the gains or losses recorded related to the eligible instruments for which we elected the fair value option:
<table><tr><td> Years Ended December 31,</td><td colspan="3">Gain (Loss)</td></tr><tr><td><i>(in millions)</i></td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td> Assets:</td><td></td><td></td><td></td></tr><tr><td>Bond and equity securities</td><td>$343</td><td>$1,646</td><td>$447</td></tr><tr><td>Alternative investments<sup>(a)</sup></td><td>213</td><td>509</td><td>28</td></tr><tr><td>Other, including Short-term investments</td><td>-</td><td>1</td><td>-</td></tr><tr><td> Liabilities:</td><td></td><td></td><td></td></tr><tr><td>Long-term debt<sup>(b)</sup></td><td>-1</td><td>-49</td><td>-9</td></tr><tr><td>Other liabilities</td><td>-</td><td>-2</td><td>-</td></tr><tr><td> Total gain</td><td>$555</td><td>$2,105</td><td>$466</td></tr></table>
(a) Includes certain hedge funds, private equity funds and other investment partnerships. (b) Includes GIAs, notes, bonds and mortgages payable. Interest income and dividend income on assets measured under the fair value option are recognized and included in Net investment income in the Consolidated Statements of Income with the exception of activity within AIG’s Other Operations category, which is included in Other income. Interest expense on liabilities measured under the fair value option is reported in Other Income in the Consolidated Statements of Income. For additional information about our policies for recognition, measurement, and disclosure of interest and dividend income see Note 6 herein. 8. Reinsurance In the ordinary course of business, our insurance companies may use both treaty and facultative reinsurance to minimize their net loss exposure to any single catastrophic loss event or to an accumulation of losses from a number of smaller events or to provide greater diversification of our businesses. In addition, our general insurance subsidiaries assume reinsurance from other insurance companies. We determine the portion of the incurred but not reported (IBNR) loss that will be recoverable under our reinsurance contracts by reference to the terms of the reinsurance protection purchased. This determination is necessarily based on the estimate of IBNR and accordingly, is subject to the same uncertainties as the estimate of IBNR. Reinsurance assets include the balances due from reinsurance and insurance companies under the terms of our reinsurance agreements for paid and unpaid losses and loss adjustment expenses incurred, ceded unearned premiums and ceded future policy benefits for life and accident and health insurance contracts and benefits paid and unpaid. Amounts related to paid and unpaid losses and benefits and loss expenses with respect to these reinsurance agreements are substantially collateralized. We remain liable to the extent that our reinsurers do not meet their obligation under the reinsurance contracts, and as such, we regularly evaluate the financial condition of our reinsurers and monitor concentration of our credit risk. The estimation of the allowance for doubtful accounts requires judgment for which key inputs typically include historical trends regarding uncollectible balances, disputes and credit events as well as specific reviews of balances in dispute or subject to credit impairment. The allowance for doubtful accounts on reinsurance assets was $140 million and $187 million at December 31, 2018 and 2017, respectively. Changes in the allowance for doubtful accounts on reinsurance assets are reflected in Policyholder benefits and losses incurred within the Consolidated Statements of Income. The following table provides supplemental information for loss and benefit reserves, gross and net of ceded reinsurance:
<table><tr><td> At December 31,</td><td rowspan="2">2018 As Reported</td><td></td><td rowspan="2">2017 As Reported</td><td></td></tr><tr><td><i>(in millions)</i></td><td>Net of Reinsurance</td><td>Net of Reinsurance</td></tr><tr><td>Liability for unpaid losses and loss adjustment expenses</td><td>$-83,639</td><td>$-51,949</td><td>$-78,393</td><td>$-51,685</td></tr><tr><td>Future policy benefits for life and accident and health insurance contracts</td><td>-44,935</td><td>-43,936</td><td>-45,432</td><td>-44,457</td></tr><tr><td>Reserve for unearned premiums</td><td>-19,248</td><td>-16,300</td><td>-19,030</td><td>-15,890</td></tr><tr><td>Reinsurance assets<sup>(a)</sup></td><td>35,637</td><td></td><td>30,823</td><td></td></tr></table>
(a) Represents gross reinsurance assets, excluding allowances and reinsurance recoverable on paid losses. SHORT-DURATION REINSURANCE Short-duration reinsurance is effected under reinsurance treaties and by negotiation on individual risks. Certain of these reinsurance arrangements consist of excess of loss contracts that protect us against losses above stipulated amounts. Ceded premiums are considered prepaid reinsurance premiums and are recognized as a reduction of premiums earned over the contract period in proportion to the protection received. Amounts recoverable from reinsurers on short-duration contracts are estimated in a manner consistent with the claims liabilities associated with the reinsurance and presented as a component of Reinsurance assets. Reinsurance premiums for assumed business are estimated based on information received from brokers, ceding companies and reinsurers. Any subsequent differences arising on such estimates are recorded in the periods in which they are determined. Assumed reinsurance premiums are earned primarily on a pro-rata basis over the terms of the reinsurance contracts and the portion of premiums relating to the unexpired terms of coverage is included in the reserve for unearned premiums. Reinsurance premiums for assumed business are estimated based on information received from brokers, ceding companies and reinsureds. Any subsequent differences arising on such estimates are recorded in the periods in which they are determined. For both ceded and assumed reinsurance, risk transfer requirements must be met for reinsurance accounting to apply. If risk transfer requirements are not met, the contract is accounted for as a deposit, resulting in the recognition of cash flows under the contract through a deposit asset or liability and not as revenue or expense. To meet risk transfer requirements, a reinsurance contract must include both insurance risk, consisting of both underwriting and timing risk, and a reasonable possibility of a significant loss for the assuming entity. Similar risk transfer criteria are used to determine whether directly written insurance contracts should be accounted for as insurance or as a deposit. The following table presents the weighted average assumptions used to determine the net periodic benefit costs:
<table><tr><td></td><td colspan="2">Pension</td><td colspan="2">Postretirement</td><td></td></tr><tr><td> </td><td>U.S. Plans</td><td>Non-U.S. Plans *</td><td>U.S. Plans</td><td>Non-U.S. Plans<sup>*</sup></td><td></td></tr><tr><td> For the Year Ended December 31, 2018</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rate</td><td>3.61%</td><td>1.60%</td><td>3.53%</td><td> 3.59</td><td> %</td></tr><tr><td>Rate of compensation increase</td><td>N/A</td><td>2.27%</td><td>N/A</td><td> 3.00</td><td> %</td></tr><tr><td>Expected return on assets</td><td>6.75%</td><td>2.78%</td><td>N/A</td><td> N/A</td><td> </td></tr><tr><td> For the Year Ended December 31, 2017</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rate</td><td>4.15%</td><td>1.50%</td><td>4.01%</td><td>3.95%</td><td></td></tr><tr><td>Rate of compensation increase</td><td>N/A</td><td>2.50%</td><td>N/A</td><td>3.38%</td><td></td></tr><tr><td>Expected return on assets</td><td>7.00%</td><td>2.92%</td><td>N/A</td><td>N/A</td><td></td></tr><tr><td> For the Year Ended December 31, 2016</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rate</td><td>4.33%</td><td>2.17%</td><td>4.21%</td><td>4.09%</td><td></td></tr><tr><td>Rate of compensation increase</td><td>N/A%</td><td>2.64%</td><td>N/A</td><td>3.43%</td><td></td></tr><tr><td>Expected return on assets</td><td>7.00%</td><td>3.28%</td><td>N/A</td><td>N/A</td><td></td></tr></table>
* The non-U. S. plans reflect those assumptions that were most appropriate for the local economic environments of the subsidiaries providing such benefits. Discount Rate Methodology The projected benefit cash flows under the U. S. AIG Retirement Plan were discounted using the spot rates derived from the Mercer U. S. Pension Discount Yield Curve at December 31, 2018 and 2017, which resulted in a single discount rate that would produce the same liability at the respective measurement dates. The discount rates were 4.22 percent at December 31, 2018 and 3.61 percent at December 31, 2017. The methodology was consistently applied for the respective years in determining the discount rates for the other U. S. pension plans. In general, the discount rates for the non-U. S. plans were developed using a similar methodology to the U. S. AIG Retirement plan, by using country-specific Mercer Yield Curves. The projected benefit obligation for AIG’s Japan pension plans represents approximately 52 percent and 50 percent of the total projected benefit obligations for our non-U. S. pension plans at December 31, 2018 and 2017, respectively. The weighted average discount rate of 0.72 percent and 0.66 percent at December 31, 2018 and 2017, respectively, was selected by reference to the Mercer Yield Curve for Japan. Plan Assets The investment strategy with respect to assets relating to our U. S. and non-U. S. pension plans is designed to achieve investment returns that will provide for the benefit obligations of the plans over the long term, limit the risk of short-term funding shortfalls and maintain liquidity sufficient to address cash needs. Accordingly, the asset allocation strategy is designed to maximize the investment rate of return while managing various risk factors, including, but not limited to, volatility relative to the benefit obligations, liquidity, diversification and concentration, and incorporates the risk/return profile applicable to each asset class. There were no shares of AIG Common Stock included in the U. S. and non-U. S. pension plans assets at December 31, 2018 or 2017. Financial Assurance We must 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, or insurance policies (Financial Assurance Instruments), or trust deposits, which are included in restricted cash and marketable securities and other assets in our consolidated balance sheets. 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 require a third-party engineering specialist to determine the estimated capping, closure and post-closure 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 must 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 2016, although the mix of Financial Assurance Instruments may change. These Financial Assurance Instruments are issued in the normal course of business and are not considered indebtedness. Because we currently have no liability for the Financial Assurance Instruments, they are not reflected in our consolidated balance sheets; however, we record capping, closure and post-closure liabilities and insurance liabilities as they are incurred. Off-Balance Sheet Arrangements We have no off-balance sheet debt or similar obligations, other than operating leases and financial assurances, which are not classified as debt. We have no transactions or obligations with related parties that are not disclosed, consolidated into or reflected in our reported financial position or results of operations. We have not guaranteed 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. The following table calculates our free cash flow for the years ended December 31, 2015, 2014 and 2013 (in millions of dollars):
<table><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Cash provided by operating activities</td><td>$1,679.7</td><td>$1,529.8</td><td>$1,548.2</td></tr><tr><td>Purchases of property and equipment</td><td>-945.6</td><td>-862.5</td><td>-880.8</td></tr><tr><td>Proceeds from sales of property and equipment</td><td>21.2</td><td>35.7</td><td>23.9</td></tr><tr><td>Free cash flow</td><td>$755.3</td><td>$703.0</td><td>$691.3</td></tr></table>
For a discussion of the changes in the components of free cash flow, see our discussion regarding Cash Flows Provided By Operating Activities and Cash Flows Used In Investing Activities contained elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
11,289 | what's the total amount of Accumulated benefit obligation CHANGE IN PLAN ASSETS of CECONY 2013, and Operating earnings of 2008 ? | (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): |
630.1 | What is the sum of Interest cost on benefit obligation of U.S. plans for Pension plans in 2016 and Operating and maintenance in 2009? (in million) | Liquidity Monitoring and Measurement Stress Testing Liquidity stress testing is performed for each of Citi’s major entities, operating subsidiaries and/or countries. Stress testing and scenario analyses are intended to quantify the potential impact of a liquidity event on the balance sheet and liquidity position, and to identify viable funding alternatives that can be utilized. These scenarios include assumptions about significant changes in key funding sources, market triggers (such as credit ratings), potential uses of funding and political and economic conditions in certain countries. These conditions include expected and stressed market conditions as well as Companyspecific events. Liquidity stress tests are conducted to ascertain potential mismatches between liquidity sources and uses over a variety of time horizons (overnight, one week, two weeks, one month, three months, one year) and over a variety of stressed conditions. Liquidity limits are set accordingly. To monitor the liquidity of an entity, these stress tests and potential mismatches are calculated with varying frequencies, with several tests performed daily. Given the range of potential stresses, Citi maintains a series of contingency funding plans on a consolidated basis and for individual entities. These plans specify a wide range of readily available actions for a variety of adverse market conditions or idiosyncratic stresses. Short-Term Liquidity Measurement: Liquidity Coverage Ratio (LCR) In addition to internal measures that Citi has developed for a 30-day stress scenario, Citi also monitors its liquidity by reference to the LCR, as calculated pursuant to the U. S. LCR rules. Generally, the LCR is designed to ensure that banks maintain an adequate level of HQLA to meet liquidity needs under an acute 30-day stress scenario. The LCR is calculated by dividing HQLA by estimated net outflows over a stressed 30-day period, with the net outflows determined by applying prescribed outflow factors to various categories of liabilities, such as deposits, unsecured and secured wholesale borrowings, unused lending commitments and derivativesrelated exposures, partially offset by inflows from assets maturing within 30 days. Banks are required to calculate an add-on to address potential maturity mismatches between contractual cash outflows and inflows within the 30-day period in determining the total amount of net outflows. The minimum LCR requirement is 100%, effective January 2017. In December 2016, the Federal Reserve Board adopted final rules which require additional disclosures relating to the LCR of large financial institutions, including Citi. Among other things, the final rules require Citi to disclose components of its average HQLA, LCR and inflows and outflows each quarter. In addition, the final rules require disclosure of Citi’s calculation of the maturity mismatch add-on as well as other qualitative disclosures. The effective date for these disclosures is April 1, 2017.
<table><tr><td>In billions of dollars</td><td>Dec. 31, 2016</td><td>Sept. 30, 2016</td><td>Dec. 31, 2015</td></tr><tr><td>HQLA</td><td>$403.7</td><td>$403.8</td><td>$389.2</td></tr><tr><td>Net outflows</td><td>332.5</td><td>335.3</td><td>344.4</td></tr><tr><td>LCR</td><td>121%</td><td>120%</td><td>113%</td></tr><tr><td>HQLA in excess of net outflows</td><td>$71.3</td><td>$68.5</td><td>$44.8</td></tr></table>
The table below sets forth the components of Citi’s LCR calculation and HQLA in excess of net outflows for the periods indicated: Note: Amounts set forth in the table above are presented on an average basis. As set forth in the table above, Citi’s LCR increased both year-over-year and sequentially. The increase year-over-year was driven by both an increase in HQLA and a reduction in net outflows. Sequentially, the increase was driven by a slight reduction in net outflows, as HQLA remained largely unchanged. Long-Term Liquidity Measurement: Net Stable Funding Ratio (NSFR) In the second quarter of 2016, the Federal Reserve Board, the FDIC and the OCC issued a proposed rule to implement the Basel III NSFR requirement. The U. S. -proposed NSFR is largely consistent with the Basel Committee’s final NSFR rules. In general, the NSFR assesses the availability of a bank’s stable funding against a required level. A bank’s available stable funding would include portions of equity, deposits and long-term debt, while its required stable funding would be based on the liquidity characteristics of its assets, derivatives and commitments. Standardized weightings would be required to be applied to the various asset and liabilities classes. The ratio of available stable funding to required stable funding would be required to be greater than 100%. While Citi believes that it is compliant with the proposed U. S. NSFR rules as of December 31, 2016, it will need to evaluate any final version of the rules, which are expected to be released during 2017. The proposed rules would require full implementation of the U. S. NSFR beginning January 1, 2018. 8. RETIREMENT BENEFITS Pension and Postretirement Plans 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 U. S. The U. S. qualified defined benefit plan was frozen effective January 1, 2008 for most employees. Accordingly, no additional compensation-based contributions have been credited to the cash balance portion of the plan for existing plan participants after 2007. However, certain employees covered 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 U. S. The Company also sponsors a number of non-contributory, nonqualified pension plans. These plans, which are unfunded, provide supplemental defined pension benefits to certain U. S. employees. With the exception of certain employees covered under the prior final pay plan formula, the benefits under these plans were frozen in prior years. The plan obligations, plan assets and periodic plan expense for the Company鈥檚 most significant pension and postretirement benefit plans (Significant Plans) are measured and disclosed quarterly, instead of annually. The Significant Plans captured approximately 90% of the Company鈥檚 global pension and postretirement plan obligations as of December 31, 2016. All other plans (All Other Plans) are measured annually with a December 31 measurement date. Net (Benefit) Expense The following table summarizes the components of net (benefit) expense recognized in the Consolidated Statement of Income for the Company鈥檚 pension and postretirement plans, for Significant Plans and All Other Plans:
<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>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><td>2016</td><td>2015</td><td>2014</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>$3</td><td>$4</td><td>$6</td><td>$154</td><td>$168</td><td>$178</td><td>$—</td><td>$—</td><td>$—</td><td>$10</td><td>$12</td><td>$15</td></tr><tr><td>Interest cost on benefit obligation</td><td>520</td><td>553</td><td>541</td><td>282</td><td>317</td><td>376</td><td>25</td><td>33</td><td>33</td><td>94</td><td>108</td><td>120</td></tr><tr><td>Expected return on plan assets</td><td>-886</td><td>-893</td><td>-878</td><td>-287</td><td>-323</td><td>-384</td><td>-9</td><td>-3</td><td>-1</td><td>-86</td><td>-105</td><td>-121</td></tr><tr><td>Amortization of unrecognized</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Prior service (benefit) cost</td><td>—</td><td>-3</td><td>-3</td><td>-1</td><td>2</td><td>1</td><td>—</td><td>—</td><td>—</td><td>-10</td><td>-11</td><td>-12</td></tr><tr><td>Net actuarial loss</td><td>160</td><td>139</td><td>105</td><td>69</td><td>73</td><td>77</td><td>-1</td><td>—</td><td>—</td><td>30</td><td>43</td><td>39</td></tr><tr><td>Curtailment loss (gain)<sup>(1)</sup></td><td>13</td><td>14</td><td>—</td><td>-2</td><td>—</td><td>14</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-1</td><td>—</td></tr><tr><td>Settlement loss (gain)<sup>(1)</sup></td><td>—</td><td>—</td><td>—</td><td>6</td><td>44</td><td>53</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Special termination benefits<sup>-1</sup></td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>9</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net qualified plans (benefit) expense</td><td>$-190</td><td>$-186</td><td>$-229</td><td>$221</td><td>$281</td><td>$324</td><td>$15</td><td>$30</td><td>$32</td><td>$38</td><td>$46</td><td>$41</td></tr><tr><td>Nonqualified plans expense</td><td>$40</td><td>$43</td><td>$45</td><td>$—</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>$-150</td><td>$-143</td><td>$-184</td><td>$221</td><td>$281</td><td>$324</td><td>$15</td><td>$30</td><td>$32</td><td>$38</td><td>$46</td><td>$41</td></tr></table>
(1) Losses and gains due to curtailment, settlement and special termination benefits relate to repositioning and divestiture actions. The estimated net actuarial loss and prior service (benefit) cost that will be amortized from Accumulated other comprehensive income (loss) into net expense in 2017 are approximately $233 million and $(2) million, respectively, for defined benefit pension plans. For postretirement plans, the estimated 2017 net actuarial loss and prior service (benefit) cost amortizations are approximately $28 million and $(9) million, respectively. Results of Operations
<table><tr><td></td><td>2009 (all amounts in millions)</td><td>2008</td><td>Increase/ (Decrease)</td><td>% change</td></tr><tr><td>Revenues from rental property -1</td><td>$786.9</td><td>$758.7</td><td>$28.2</td><td>3.7%</td></tr><tr><td>Rental property expenses: -2</td><td></td><td></td><td></td><td></td></tr><tr><td>Rent</td><td>$14.1</td><td>$13.4</td><td>$0.7</td><td>5.2%</td></tr><tr><td>Real estate taxes</td><td>112.4</td><td>98.0</td><td>14.4</td><td>14.7%</td></tr><tr><td>Operating and maintenance</td><td>110.1</td><td>104.7</td><td>5.4</td><td>5.2%</td></tr><tr><td></td><td>$236.6</td><td>$216.1</td><td>$20.5</td><td>9.5%</td></tr><tr><td>Depreciation and amortization -3</td><td>$227.7</td><td>$206.0</td><td>$21.7</td><td>10.5%</td></tr></table>
(1) Revenues from rental property increased primarily from the combined effect of (i) the acquisition of operating properties during 2008 and 2009, providing incremental revenues for the year ended December 31, 2009 of $29.3 million, as compared to the corresponding period in 2008 and (ii) the completion of certain development and redevelopment projects and tenant buyouts providing incremental revenues of approximately $7.4 million, for the year ended December 31, 2009, as compared to the corresponding period in 2008, which was partially offset by (iii) a decrease in revenues of approximately $8.5 million for the year ended December 31, 2009, as compared to the corresponding period in 2008, primarily resulting from the sale of certain properties during 2008 and 2009, and (iv) an overall occupancy decrease from the consolidated shopping center portfolio from 93.1% at December 31, 2008 to 92.2% at December 31, 2009. (2) Rental property expenses increased primarily due to (i) operating property acquisitions during 2008 and 2009, (ii) the placement of certain development properties into service, which resulted in lower capitalization of carry costs, and (iii) an increase in snow removal costs during 2009 as compared to 2008, partially offset by (iv) a decrease in insurance costs during 2009 as compared to 2008 and (v) operating property dispositions during 2008 and 2009. (3) Depreciation and amortization increased primarily due to (i) operating property acquisitions during 2008 and 2009, (ii) the placement of certain development properties into service and (iii) tenant vacates, partially offset by operating property dispositions during 2008 and 2009. Mortgage and other financing income decreased $3.3 million to $15.0 million for the year ended December 31, 2009, as compared to $18.3 million for the corresponding period in 2008. This decrease is primarily due to a decrease in interest income during 2009 resulting from the repayment of certain mortgage receivables during 2009 and 2008. Management and other fee income decreased approximately $5.2 million for the year ended December 31, 2009, as compared to the corresponding period in 2008. This decrease is primarily due to a decrease in property management fees of approximately $5.8 million for 2009, due to lower revenues attributable to lower occupancy and the sale of certain properties during 2008 and 2009, partially offset by an increase in other transaction related fees of approximately $0.6 million recognized during 2009. General and administrative expenses decreased approximately $6.1 million for the year ended December 31, 2009, as compared to the corresponding period in 2008. This decrease is primarily due to a reduction in force during 2009 as a result of implementing the Company’s core business strategy of focusing on owning and operating shopping centers and a shift away from certain non-strategic assets along with a lack of transactional activity. Interest, dividends and other investment income decreased approximately $23.0 million for the year ended December 31, 2009, as compared to the corresponding period in 2008. This decrease is primarily due to (i) a decrease in realized gains of approximately $8.2 million during 2009 resulting from the sale of certain marketable securities during the corresponding period in 2008 as compared to 2009, and (ii) a decrease in interest and dividend income of approximately $14.8 million during 2009, as compared to the corresponding period in 2008, primarily resulting from the sale of investments in marketable securities and reductions in dividends declared from certain marketable securities during 2009 and 2008. Other expense, net decreased approximately $1.3 million to $0.9 million for the year ended December 31, 2009, as compared to $2.2 million for the corresponding period in 2008. This decrease is primarily due to (i) the receipt of fewer shares of Sears Holding Corp. common stock received as partial settlement of Kmart pre-petition claims during 2008, |
1,311.9 | If Total segment develops with the same increasing rate in 2016 for Total Incurred, what will it reach in 2017 for Total Incurred? (in million) | 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>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>$1,096.0</td><td>52.9%</td><td></td><td>$-126.4</td><td>-6.1%</td><td></td><td>$969.7</td><td>46.8%</td><td></td></tr><tr><td>Catastrophes</td><td>134.1</td><td>6.5%</td><td></td><td>-35.3</td><td>-1.7%</td><td></td><td>98.8</td><td>4.8%</td><td></td></tr><tr><td>Total segment</td><td>$1,230.1</td><td>59.4%</td><td></td><td>$-161.6</td><td>-7.8%</td><td></td><td>$1,068.5</td><td>51.6%</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>$940.6</td><td>48.2%</td><td></td><td>$-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>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>$155.4</td><td>4.7</td><td>pts</td><td>$-3.3</td><td>0.2</td><td>pts</td><td>$152.2</td><td>4.9</td><td>pts</td></tr><tr><td>Catastrophes</td><td>117.4</td><td>5.6</td><td>pts</td><td>-26.1</td><td>-1.2</td><td>pts</td><td>91.2</td><td>4.4</td><td>pts</td></tr><tr><td>Total segment</td><td>$272.8</td><td>10.3</td><td>pts</td><td>$-29.4</td><td>-1.0</td><td>pts</td><td>$243.4</td><td>9.3</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>$7.3</td><td>1.2</td><td>pts</td><td>$-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 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 increased by 29.5% to $1,068.5 million in 2016 compared to $825.1 million in 2015, primarily due to an increase of $155.4 million in current year attritional losses, resulting mainly from the impact of the increase in premiums earned and the impact of the new crop reinsurance contract effective upon the sale of Heartland, and $117.4 million in current year catastrophe losses. The $126.4 million of favorable prior years attritional loss development in 2016 is primarily due to U. S property and marine business, partially offset by $47.1 million of adverse development on A&E reserves. There was also an increase in favorable development of $26.1 million on prior years’ catastrophe losses in 2016 compared to 2015. The $35.3 million of favorable development on prior years catastrophes in 2016 mainly related to the 2011 Japan earthquake ($15.5 million), the 2015 U. S. storms ($11.6 million) and the 2013 U. S. storms ($9.6 million). The $134.1 million of current year catastrophe losses in 2016 related to Hurricane Matthew ($86.2 million), the 2016 U. S. storms ($20.4 million), 2016 Tennessee wildfire ($14.7 million) and Hurricane Hermine ($13.5 million). The $16.7 million of current year catastrophe losses in 2015 were mainly due to the US storms ($16.2 million). 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 for 2015 are outlined above. 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). Segment Expenses. Commission and brokerage expenses decreased by 5.5% to $466.0 million in 2016 compared to $493.3 million in 2015. The decrease is mainly due to the impact of the new crop reinsurance contract effective upon the sale of Heartland, the impact of quota share contracts and changes in the mix of business. Segment other underwriting expenses increased to $54.1 million in 2016 from $50.1 million in 2015. The increase was primarily due to the impact of changes in the mix of business and higher compensation costs 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>2018</td><td>2017</td><td>2016</td></tr><tr><td>U.S. Reinsurance</td><td>$592.9</td><td>$354.3</td><td>$385.5</td></tr><tr><td>International</td><td>330.6</td><td>275.2</td><td>235.4</td></tr><tr><td>Bermuda</td><td>439.5</td><td>270.3</td><td>258.4</td></tr><tr><td>Total</td><td>$1,362.9</td><td>$899.8</td><td>$879.3</td></tr><tr><td>(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td></tr></table>
Investment Valuation. Our fixed income investments are classified for accounting purposes as available for sale and are carried at market value or fair value in our consolidated balance sheets. Our equity securities are all carried at fair value, as of January 1, 2018, due to the adoption of ASU 2016-01. Most securities we own are traded on national exchanges where market values are readily available. Some of our commercial mortgage-backed securities (“CMBS”) are valued using cash flow models and risk-adjusted discount rates. We hold some privately placed securities, less than 2.9% of the portfolio, that are either valued by brokers or investment advisors. In most instances, values provided by an investment advisor are supported with opinions from qualified independent third parties. In limited circumstances when broker or investment advisor prices are not available for a private placement, we will value the securities using comparable market information. At December 31, 2018 and 2017, our investment portfolio included $1,427.8 million and $1,074.6 million, respectively, of limited partnership investments whose values are reported pursuant to the equity method of accounting. We carry these investments at values provided by the managements of the limited partnerships and due to inherent reporting lags, the carrying values are based on values with “as of” dates from one month to one quarter prior to our financial statement date. At December 31, 2018, we had net unrealized losses, net of tax, of $179.4 million compared to unrealized gains, net of tax, of $50.0 million at December 31, 2017. Gains and losses from market fluctuations for investments held at market value are reflected as comprehensive income (loss) in the consolidated balance sheets. Gains and losses from market fluctuations for investments held at fair value are reflected as net realized capital gains and losses in the consolidated statements of operations and comprehensive income (loss). Market value declines for the fixed income portfolio, which are considered credit other-thantemporary impairments, are reflected in our consolidated statements of operations and comprehensive income (loss), as realized capital losses. We consider many factors when determining whether a market value decline is other-than-temporary, including: (1) we have no intent to sell and, more likely than not, will not be required to sell prior to recovery, (2) the length of time the market value has been below book value, (3) the credit strength of the issuer, (4) the issuer’s market sector, (5) the length of time to maturity and (6) for asset-backed securities, changes in prepayments, credit enhancements and underlying default rates. If management’s assessments change in the future, we may ultimately record a realized loss after management originally concluded that the decline in value was temporary. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 1 of Notes to the Consolidated Financial Statements. FINANCIAL CONDITION Cash and Invested Assets. Aggregate invested assets, including cash and short-term investments, were $18,433.1 million at December 31, 2018, a decrease of $193.5 million compared to $18,626.5 million at December 31, 2017. This decrease was primarily the result of $329.4 million in fair value remeasurements, $250.9 million of pre-tax unrealized depreciation, $216.2 million paid out in dividends to shareholders, $143.1 million due to fluctuations in foreign currencies, repurchases of 0.3 million common shares for $75.3 million and $8.1 million of other-than-temporary impairments, partially offset by $610.1 million of cash flows from operations, $102.1 million in equity adjustments of our limited partnership investments, $46.1 million of unsettled securities and $29.3 million of amortization bond premium. Our principal investment objectives are to ensure funds are available to meet our insurance and reinsurance obligations and to maximize after-tax investment income while maintaining a high quality diversified investment portfolio. Considering these objectives, we view our investment portfolio as having two components: 1) the investments needed to satisfy outstanding liabilities (our core fixed maturities portfolio) and 2) investments funded by our shareholders’ equity. VISA INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) September 30, 2013 market condition is based on the Company’s total shareholder return ranked against that of other companies that are included in the Standard & Poor’s 500 Index. The fair value of the performancebased shares, incorporating the market condition, is estimated on the grant date using a Monte Carlo simulation model. The grant-date fair value of performance-based shares in fiscal 2013, 2012 and 2011 was $164.14, $97.84 and $85.05 per share, respectively. Earned performance shares granted in fiscal 2013 and 2012 vest approximately three years from the initial grant date. Earned performance shares granted in fiscal 2011 vest in two equal installments approximately two and three years from their respective grant dates. All performance awards are subject to earlier vesting in full under certain conditions. Compensation cost for performance-based shares is initially estimated based on target performance. It is recorded net of estimated forfeitures and adjusted as appropriate throughout the performance period. At September 30, 2013, there was $15 million of total unrecognized compensation cost related to unvested performance-based shares, which is expected to be recognized over a weighted-average period of approximately 1.0 years. Note 17—Commitments and Contingencies Commitments. The Company leases certain premises and equipment throughout the world with varying expiration dates. The Company incurred total rent expense of $94 million, $89 million and $76 million in fiscal 2013, 2012 and 2011, respectively. Future minimum payments on leases, and marketing and sponsorship agreements per fiscal year, at September 30, 2013, are as follows:
<table><tr><td>(in millions)</td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td><td>Thereafter</td><td>Total</td></tr><tr><td>Operating leases</td><td>$100</td><td>$77</td><td>$43</td><td>$35</td><td>$20</td><td>$82</td><td>$357</td></tr><tr><td>Marketing and sponsorships</td><td>116</td><td>117</td><td>61</td><td>54</td><td>54</td><td>178</td><td>580</td></tr><tr><td>Total</td><td>$216</td><td>$194</td><td>$104</td><td>$89</td><td>$74</td><td>$260</td><td>$937</td></tr></table>
Select sponsorship agreements require the Company to spend certain minimum amounts for advertising and marketing promotion over the life of the contract. For commitments where the individual years of spend are not specified in the contract, the Company has estimated the timing of when these amounts will be spent. In addition to the fixed payments stated above, select sponsorship agreements require the Company to undertake marketing, promotional or other activities up to stated monetary values to support events which the Company is sponsoring. The stated monetary value of these activities typically represents the value in the marketplace, which may be significantly in excess of the actual costs incurred by the Company. Client incentives. The Company has agreements with financial institution clients and other business partners for various programs designed to build payments volume, increase Visa-branded card and product acceptance and win merchant routing transactions. These agreements, with original terms ranging from one to thirteen years, can provide card issuance and/or conversion support, volume/growth targets and marketing and program support based on specific performance requirements. These agreements are designed to encourage client business and to increase overall Visa-branded payment and transaction volume, thereby reducing per-unit transaction processing costs and increasing brand awareness for all Visa clients. Payments made that qualify for capitalization, and obligations incurred under these programs are reflected on the consolidated balance sheet. Client incentives are recognized primarily as a reduction |
0.29731 | What is the ratio of all elements that are in the range of 1000 and 3000 to the sum of elements, for Fair of Total? | Commercial Paper and Revolving Credit Facility The table below details the Company’s short-term debt programs and the applicable balances outstanding
<table><tr><td></td><td> Effective</td><td> Expiration</td><td colspan="2"> Maximum Available As of December 31,</td><td colspan="4"> Outstanding As of December 31,</td></tr><tr><td> Description</td><td> Date</td><td> Date</td><td> 2011</td><td> 2010</td><td colspan="2"> 2011</td><td colspan="2"> 2010</td></tr><tr><td> Commercial Paper</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>The Hartford</td><td>11/10/86</td><td>N/A</td><td>$2,000</td><td>$2,000</td><td></td><td>$—</td><td></td><td>$—</td></tr><tr><td> Revolving Credit Facility</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>5-year revolving credit facility [1]</td><td>8/9/07</td><td>8/9/12</td><td>1,900</td><td>1,900</td><td></td><td>—</td><td></td><td>—</td></tr><tr><td> Total Commercial Paper and RevolvingCredit Facility</td><td></td><td></td><td>$3,900</td><td>$3,900</td><td> $</td><td> —</td><td> $</td><td>—</td></tr></table>
[1] Terminated in January 2012, see discussion that follows. While The Hartford’s maximum borrowings available under its commercial paper program are $2.0 billion, the Company is dependent upon market conditions to access short-term financing through the issuance of commercial paper to investors. As of December 31, 2011, the Company has no commercial paper outstanding. In January 2012, the Company entered into a senior unsecured revolving credit facility (the “Credit Facility”) that provides for borrowing capacity up to $1.75 billion (which is available in U. S. dollars, and in Euro, Sterling, Canadian dollars and Japanese Yen) through January 6, 2016 and terminated its $1.9 billion unsecured revolving credit facility due August 9, 2012. As of December 31, 2011, the Company was in compliance with all financial covenants under the terminated credit facility. Of the total availability under the Credit Facility, up to $250 is available to support letters of credit issued on behalf of the Company or subsidiaries of the Company. Under the Credit Facility, the Company must maintain a minimum level of consolidated net worth of $16 billion. The minimum level of consolidated net worth, as defined, will be adjusted in the first quarter of 2012 upon the adoption of a new DAC accounting standard, see Note 1 of the Notes to Consolidated Financial Statements, by the lesser of approximately $1.0 billion, after-tax representing 70% of the adoption-related estimated DAC charge, or $1.7 billion. The definition of consolidated net worth under the terms of the credit facility excludes AOCI and includes the Company’s outstanding junior subordinated debentures and perpetual preferred securities, net of discount. In addition, the Company’s maximum ratio of consolidated total debt to consolidated total capitalization is 35%, and the ratio of consolidated total debt of subsidiaries to consolidated total capitalization is limited to 10%. The Company will certify compliance with the financial covenants for the syndicate of participating financial institutions on a quarterly basis. The Hartford’s Japan operations also maintain two lines of credit in support of operations. Both lines of credit are in the amount of $65, or ￥5 billion, and individually have expiration dates of September 30, 2012 and January 3, 2013. Derivative Commitments Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings of the individual legal entity that entered into the derivative agreement as set by nationally recognized statistical rating agencies. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and in certain instances demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement. The settlement amount is determined by netting the derivative positions transacted under each agreement. If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of December 31, 2011, is $725. Of this $725 the legal entities have posted collateral of $716 in the normal course of business. Based on derivative market values as of December 31, 2011, a downgrade of one level below the current financial strength ratings by either Moody’s or S&P could require approximately an additional $37 to be posted as collateral. Based on derivative market values as of December 31, 2011, a downgrade by either Moody’s or S&P of two levels below the legal entities’ current financial strength ratings could require approximately an additional $48 of assets to be posted as collateral. These collateral amounts could change as derivative market values change, as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated. The nature of the collateral that we would post, if required, would be primarily in the form of U. S. Treasury bills and U. S. Treasury notes. The aggregate notional amount of derivative relationships that could be subject to immediate termination in the event of rating agency downgrades to either BBB+ or Baa1 as of December 31, 2011 was $14.5 billion with a corresponding fair value of $418. The notional and fair value amounts include a customized GMWB derivative with a notional amount of $4.2 billion and a fair value of $207, for which the Company has a contractual right to make a collateral payment in the amount of approximately $45 to prevent its termination. This customized GMWB derivative contains an early termination trigger such that if the unsecured, unsubordinated debt of the counterparty’s related party guarantor is downgraded two levels or more below the current ratings by Moody’s and one or more levels by S&P, the counterparty could terminate all transactions under the applicable International Swaps and Derivatives Association Master Agreement. As of December 31, 2011, the gross fair value of the affected derivative contracts is $223, which would approximate the settlement value. THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Investments and Derivative Instruments (continued) Security Unrealized Loss Aging The following tables present the Company’s unrealized loss aging for AFS securities by type and length of time the security was in a continuous unrealized loss position.
<table><tr><td></td><td colspan="9">December 31, 2011</td></tr><tr><td></td><td colspan="3">Less Than 12 Months</td><td colspan="3">12 Months or More</td><td colspan="3">Total</td></tr><tr><td></td><td> Amortized</td><td> Fair</td><td>Unrealized</td><td> Amortized</td><td> Fair</td><td>Unrealized</td><td> Amortized</td><td> Fair</td><td>Unrealized</td></tr><tr><td></td><td> Cost</td><td> Value</td><td>Losses</td><td> Cost</td><td> Value</td><td>Losses</td><td> Cost</td><td> Value</td><td>Losses</td></tr><tr><td>ABS</td><td>$629</td><td>$594</td><td>$-35</td><td>$1,169</td><td>$872</td><td>$-297</td><td>$1,798</td><td>$1,466</td><td>$-332</td></tr><tr><td>CDOs</td><td>81</td><td>59</td><td>-22</td><td>2,709</td><td>2,383</td><td>-326</td><td>2,790</td><td>2,442</td><td>-348</td></tr><tr><td>CMBS</td><td>1,297</td><td>1,194</td><td>-103</td><td>2,144</td><td>1,735</td><td>-409</td><td>3,441</td><td>2,929</td><td>-512</td></tr><tr><td>Corporate [1]</td><td>4,388</td><td>4,219</td><td>-169</td><td>3,268</td><td>2,627</td><td>-570</td><td>7,656</td><td>6,846</td><td>-739</td></tr><tr><td>Foreign govt./govt. agencies</td><td>218</td><td>212</td><td>-6</td><td>51</td><td>47</td><td>-4</td><td>269</td><td>259</td><td>-10</td></tr><tr><td>Municipal</td><td>299</td><td>294</td><td>-5</td><td>627</td><td>560</td><td>-67</td><td>926</td><td>854</td><td>-72</td></tr><tr><td>RMBS</td><td>415</td><td>330</td><td>-85</td><td>1,206</td><td>835</td><td>-371</td><td>1,621</td><td>1,165</td><td>-456</td></tr><tr><td>U.S. Treasuries</td><td>343</td><td>341</td><td>-2</td><td>—</td><td>—</td><td>—</td><td>343</td><td>341</td><td>-2</td></tr><tr><td> Total fixed maturities</td><td>7,670</td><td>7,243</td><td>-427</td><td>11,174</td><td>9,059</td><td>-2,044</td><td>18,844</td><td>16,302</td><td>-2,471</td></tr><tr><td>Equity securities</td><td>167</td><td>138</td><td>-29</td><td>439</td><td>265</td><td>-174</td><td>606</td><td>403</td><td>-203</td></tr><tr><td> Total securities in an unrealized loss</td><td>$7,837</td><td>$7,381</td><td>$-456</td><td>$11,613</td><td>$9,324</td><td>$-2,218</td><td>$19,450</td><td>$16,705</td><td>$-2,674</td></tr></table>
December 31, 2010
<table><tr><td></td><td colspan="9">December 31, 2010</td></tr><tr><td></td><td colspan="3">Less Than 12 Months</td><td colspan="3">12 Months or More</td><td colspan="3">Total</td></tr><tr><td></td><td> Amortized</td><td> Fair</td><td>Unrealized</td><td> Amortized</td><td> Fair</td><td>Unrealized</td><td> Amortized</td><td> Fair</td><td>Unrealized</td></tr><tr><td></td><td> Cost</td><td> Value</td><td>Losses</td><td> Cost</td><td> Value</td><td>Losses</td><td> Cost</td><td> Value</td><td>Losses</td></tr><tr><td>ABS</td><td>$302</td><td>$290</td><td>$-12</td><td>$1,410</td><td>$1,026</td><td>$-384</td><td>$1,712</td><td>$1,316</td><td>$-396</td></tr><tr><td>CDOs</td><td>321</td><td>293</td><td>-28</td><td>2,724</td><td>2,274</td><td>-450</td><td>3,045</td><td>2,567</td><td>-478</td></tr><tr><td>CMBS</td><td>556</td><td>530</td><td>-26</td><td>3,962</td><td>3,373</td><td>-589</td><td>4,518</td><td>3,903</td><td>-615</td></tr><tr><td>Corporate</td><td>5,533</td><td>5,329</td><td>-199</td><td>4,017</td><td>3,435</td><td>-548</td><td>9,550</td><td>8,764</td><td>-747</td></tr><tr><td>Foreign govt./govt. agencies</td><td>356</td><td>349</td><td>-7</td><td>78</td><td>68</td><td>-10</td><td>434</td><td>417</td><td>-17</td></tr><tr><td>Municipal</td><td>7,485</td><td>7,173</td><td>-312</td><td>1,046</td><td>863</td><td>-183</td><td>8,531</td><td>8,036</td><td>-495</td></tr><tr><td>RMBS</td><td>1,744</td><td>1,702</td><td>-42</td><td>1,567</td><td>1,147</td><td>-420</td><td>3,311</td><td>2,849</td><td>-462</td></tr><tr><td>U.S. Treasuries</td><td>2,436</td><td>2,321</td><td>-115</td><td>158</td><td>119</td><td>-39</td><td>2,594</td><td>2,440</td><td>-154</td></tr><tr><td> Total fixed maturities</td><td>18,733</td><td>17,987</td><td>-741</td><td>14,962</td><td>12,305</td><td>-2,623</td><td>33,695</td><td>30,292</td><td>-3,364</td></tr><tr><td>Equity securities</td><td>53</td><td>52</td><td>-1</td><td>637</td><td>506</td><td>-131</td><td>690</td><td>558</td><td>-132</td></tr><tr><td> Total securities in an unrealized loss</td><td>$18,786</td><td>$18,039</td><td>$-742</td><td>$15,599</td><td>$12,811</td><td>$-2,754</td><td>$34,385</td><td>$30,850</td><td>$-3,496</td></tr></table>
[1] Unrealized losses exclude the change in fair value of bifurcated embedded derivative features of certain securities. Subsequent changes in fair value are recorded in net realized capital gains (losses). As of December 31, 2011, AFS securities in an unrealized loss position, comprised of 2,549 securities, primarily related to corporate securities within the financial services sector, CMBS, and RMBS which have experienced significant price deterioration. As of December 31, 2011, 75% of these securities were depressed less than 20% of cost or amortized cost. The decline in unrealized losses during 2011 was primarily attributable to a decline in interest rates, partially offset by credit spread widening. Most of the securities depressed for twelve months or more relate to structured securities with exposure to commercial and residential real estate, as well as certain floating rate corporate securities or those securities with greater than 10 years to maturity, concentrated in the financial services sector. Current market spreads continue to be significantly wider for structured securities with exposure to commercial and residential real estate, as compared to spreads at the security’s respective purchase date, largely due to the economic and market uncertainties regarding future performance of commercial and residential real estate. In addition, the majority of securities have a floating-rate coupon referenced to a market index where rates have declined substantially. The Company neither has an intention to sell nor does it expect to be required to sell the securities outlined above. THE HARTFORD FINANCIAL SERVICES GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) F-40 5. Investments and Derivative Instruments (continued) Variable Interest Entities The Company is involved with various special purpose entities and other entities that are deemed to be VIEs primarily as a collateral manager and as an investor through normal investment activities, as well as a means of accessing capital. A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Consolidated Financial Statements. Consolidated VIEs The following table presents the carrying value of assets and liabilities, and the maximum exposure to loss relating to the VIEs for which the Company is the primary beneficiary. Creditors have no recourse against the Company in the event of default by these VIEs nor does the Company have any implied or unfunded commitments to these VIEs. The Company’s financial or other support provided to these VIEs is limited to its investment management services and original investment.
<table><tr><td></td><td colspan="3"> December 31, 2011</td><td colspan="3"> December 31, 2010</td></tr><tr><td></td><td> Total Assets</td><td> Total Liabilities [1]</td><td> Maximum Exposure to Loss [2]</td><td> Total Assets</td><td> Total Liabilities [1]</td><td> Maximum Exposure to Loss [2]</td></tr><tr><td>CDOs [3]</td><td>$491</td><td>$471</td><td>$29</td><td>$729</td><td>$393</td><td>$289</td></tr><tr><td>Limited partnerships</td><td>7</td><td>—</td><td>7</td><td>14</td><td>1</td><td>13</td></tr><tr><td> Total</td><td>$498</td><td>$471</td><td>$36</td><td>$743</td><td>$394</td><td>$302</td></tr></table>
[1] Included in other liabilities in the Company’s Consolidated Balance Sheets. [2] The maximum exposure to loss represents the maximum loss amount that the Company could recognize as a reduction in net investment income or as a realized capital loss and is the cost basis of the Company’s investment. [3] Total assets included in fixed maturities, AFS, and fixed maturities, FVO, in the Company’s Consolidated Balance Sheets. CDOs represent structured investment vehicles for which the Company has a controlling financial interest as it provides collateral management services, earns a fee for those services and also holds investments in the securities issued by these vehicles. Limited partnerships represent one hedge fund for which the Company holds a majority interest in the fund as an investment. Non-Consolidated VIEs The Company holds a significant variable interest for one VIE for which it is not the primary beneficiary and, therefore, was not consolidated on the Company’s Consolidated Balance Sheets. This VIE represents a contingent capital facility (“facility”) that has been held by the Company since February 2007 for which the Company has no implied or unfunded commitments. Assets and liabilities recorded for the facility were $28 as of December 31, 2011 and $32 as of December 31, 2010. Additionally, the Company has a maximum exposure to loss of $3 as of December 31, 2011 and $4 as of December 31, 2010, which represents the issuance costs that were incurred to establish the facility. The Company does not have a controlling financial interest as it does not manage the assets of the facility nor does it have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the facility, as the asset manager has significant variable interest in the vehicle. The Company’s financial or other support provided to the facility is limited to providing ongoing support to cover the facility’s operating expenses. For further information on the facility, see Note 14. In addition, the Company, through normal investment activities, makes passive investments in structured securities issued by VIEs for which the Company is not the manager which are included in ABS, CDOs, CMBS and RMBS in the Available-for-Sale Securities table and fixed maturities, FVO, in the Company’s Consolidated Balance Sheets. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits and the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment. In reporting environmental results, the Company classifies its gross exposure into Direct, Assumed Reinsurance, and London Market. The following table displays gross environmental reserves and other statistics by category as of December 31, 2011. Summary of Environmental Reserves As of December 31, 2011
<table><tr><td></td><td>Total Reserves</td></tr><tr><td>Gross [1] [2]</td><td></td></tr><tr><td>Direct</td><td>$271</td></tr><tr><td>Assumed Reinsurance</td><td>39</td></tr><tr><td>London Market</td><td>57</td></tr><tr><td>Total</td><td>367</td></tr><tr><td>Ceded</td><td>-47</td></tr><tr><td>Net</td><td>$320</td></tr></table>
[1] The one year gross paid amount for total environmental claims is $58, resulting in a one year gross survival ratio of 6.4. [2] The three year average gross paid amount for total environmental claims is $58, resulting in a three year gross survival ratio of 6.4. During the second quarters of 2011, 2010 and 2009, the Company completed its annual ground-up asbestos reserve evaluations. As part of these evaluations, the Company reviewed all of its open direct domestic insurance accounts exposed to asbestos liability, as well as assumed reinsurance accounts and its London Market exposures for both direct insurance and assumed reinsurance. Based on this evaluation, the Company strengthened its net asbestos reserves by $290 in second quarter 2011. During 2011, for certain direct policyholders, the Company experienced increases in claim frequency, severity and expense which were driven by mesothelioma claims, particularly against certain smaller, more peripheral insureds. The Company also experienced unfavorable development on its assumed reinsurance accounts driven largely by the same factors experienced by the direct policyholders. During 2010 and 2009, for certain direct policyholders, the Company experienced increases in claim severity and expense. Increases in severity and expense were driven by litigation in certain jurisdictions and, to a lesser extent, development on primarily peripheral accounts. The Company also experienced unfavorable development on its assumed reinsurance accounts driven largely by the same factors experienced by the direct policyholders. The net effect of these changes in 2010 and 2009 resulted in $169 and $138 increases in net asbestos reserves, respectively. The Company currently expects to continue to perform an evaluation of its asbestos liabilities annually. The Company divides its gross asbestos exposures into Direct, Assumed Reinsurance and London Market. The Company further divides its direct asbestos exposures into the following categories: Major Asbestos Defendants (the “Top 70” accounts in Tillinghast’s published Tiers 1 and 2 and Wellington accounts), which are subdivided further as: Structured Settlements, Wellington, Other Major Asbestos Defendants, Accounts with Future Expected Exposures greater than $2.5, Accounts with Future Expected Exposures less than $2.5, and Unallocated. ? Structured Settlements are those accounts where the Company has reached an agreement with the insured as to the amount and timing of the claim payments to be made to the insured. ? The Wellington subcategory includes insureds that entered into the “Wellington Agreement” dated June 19, 1985. The Wellington Agreement provided terms and conditions for how the signatory asbestos producers would access their coverage from the signatory insurers. ? The Other Major Asbestos Defendants subcategory represents insureds included in Tiers 1 and 2, as defined by Tillinghast that are not Wellington signatories and have not entered into structured settlements with The Hartford. The Tier 1 and 2 classifications are meant to capture the insureds for which there is expected to be significant exposure to asbestos claims. ? Accounts with future expected exposures greater or less than $2.5 include accounts that are not major asbestos defendants. ? The Unallocated category includes an estimate of the reserves necessary for asbestos claims related to direct insureds that have not previously tendered asbestos claims to the Company and exposures related to liability claims that may not be subject to an aggregate limit under the applicable policies. An account may move between categories from one evaluation to the next. For example, an account with future expected exposure of greater than $2.5 in one evaluation may be reevaluated due to changing conditions and recategorized as less than $2.5 in a subsequent evaluation or vice versa. |
307.03175 | What will Short-term debt be like in 2007 if it develops with the same increasing rate as current? (in million) | Entergy Mississippi, Inc. Management's Financial Discussion and Analysis 321 The net wholesale revenue variance is primarily due to lower profit on joint account sales and reduced capacity revenue from the Municipal Energy Agency of Mississippi. Gross operating revenues, fuel and purchased power expenses, and other regulatory charges Gross operating revenues increased primarily due to an increase of $152.5 million in fuel cost recovery revenues due to higher fuel rates, partially offset by a decrease of $43 million in gross wholesale revenues due to a decrease in net generation and purchases in excess of decreased net area demand resulting in less energy available for resale sales coupled with a decrease in system agreement remedy receipts. Fuel and purchased power expenses increased primarily due to increases in the average market prices of natural gas and purchased power, partially offset by decreased demand and decreased recovery from customers of deferred fuel costs. Other regulatory charges increased primarily due to increased recovery through the Grand Gulf rider of Grand Gulf capacity costs due to higher rates and increased recovery of costs associated with the power management recovery rider. There is no material effect on net income due to quarterly adjustments to the power management recovery rider.2007 Compared to 2006 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 (credits). Following is an analysis of the change in net revenue comparing 2007 to 2006.
<table><tr><td></td><td>Amount (In Millions)</td></tr><tr><td>2006 net revenue</td><td>$466.1</td></tr><tr><td>Base revenue</td><td>7.9</td></tr><tr><td>Volume/weather</td><td>4.5</td></tr><tr><td>Transmission revenue</td><td>4.1</td></tr><tr><td>Transmission equalization</td><td>4.0</td></tr><tr><td>Reserve equalization</td><td>3.8</td></tr><tr><td>Attala costs</td><td>-10.2</td></tr><tr><td>Other</td><td>6.7</td></tr><tr><td>2007 net revenue</td><td>$486.9</td></tr></table>
The base revenue variance is primarily due to a formula rate plan increase effective July 2007. The formula rate plan filing is discussed further in "State and Local Rate Regulation" below. The volume/weather variance is primarily due to increased electricity usage primarily in the residential and commercial sectors, including the effect of more favorable weather on billed electric sales in 2007 compared to 2006. Billed electricity usage increased 214 GWh. The increase in usage was partially offset by decreased usage in the industrial sector. The transmission revenue variance is due to higher rates and the addition of new transmission customers in late 2006. The transmission equalization variance is primarily due to a revision made in 2006 of transmission equalization receipts among Entergy companies. The reserve equalization variance is primarily due to a revision in 2006 of reserve equalization payments among Entergy companies due to a FERC ruling regarding the inclusion of interruptible loads in reserve Revenues and Expenses Premiums, Fees and Other Revenues Premiums, fees and other revenues increased by $2,185 million, or 7%, to $34,739 million for the year ended December 31, 2007 from $32,554 million for the comparable 2006 period. The following table provides the change from the prior year in premiums, fees and other revenues by segment:
<table><tr><td></td><td></td><td> % of Total </td></tr><tr><td></td><td> $ Change (In millions)</td><td> $ Change</td></tr><tr><td>Institutional</td><td>$594</td><td>27%</td></tr><tr><td>Reinsurance</td><td>573</td><td>26</td></tr><tr><td>International</td><td>560</td><td>26</td></tr><tr><td>Individual</td><td>364</td><td>17</td></tr><tr><td>Auto & Home</td><td>65</td><td>3</td></tr><tr><td>Corporate & Other</td><td>29</td><td>1</td></tr><tr><td>Total change</td><td>$2,185</td><td>100%</td></tr></table>
The growth in the Institutional segment was primarily due to increases in the non-medical health & other and group life businesses. The non-medical health & other business increased primarily due to growth in the dental, disability, accidental death & dismemberment (“AD&D”) and individual disability insurance (“IDI”) businesses. Partially offsetting these increases is a decrease in the long-term care (“LTC”) business, net of a decrease resulting from a shift to deposit liability-type contracts in the current year, partially offset by growth in the business. The group life business increased primarily due to business growth in term life and increases in corporate-owned life insurance and life insurance sold to postretirement benefit plans. These increases in the non-medical health & other and group life businesses were partially offset by a decrease in the retirement & savings business. The decrease in retirement & savings was primarily due to a decrease in structured settlement and pension closeout premiums, partially offset by an increase in other products. The growth in the Reinsurance segment was primarily attributable to premiums from new facultative and automatic treaties and renewal premiums on existing blocks of business in all RGA’s operating segments. In addition, other revenues increased due to an increase in surrender charges on asset-intensive business reinsured and an increase in fees associated with financial reinsurance. The growth in the International segment was primarily due to the following factors: ? An increase in Mexico’s premiums, fees and other revenues due to higher fees and growth in its institutional and universal life businesses, a decrease in experience refunds during the first quarter of 2007 on Mexico’s institutional business, as well as the adverse impact in the prior year of an adjustment for experience refunds on Mexico’s institutional business, offset by lower fees resulting from management’s update of assumptions used to determine estimated gross profits and various one-time revenue items which benefited both the current and prior years. ? Premiums, fees and other revenues increased in Hong Kong primarily due to the acquisition of the remaining 50% interest in MetLife Fubon and the resulting consolidation of the operation as well as business growth. ? Chile’s premiums, fees and other revenues increased primarily due to higher annuity sales, higher institutional premiums from its traditional and bank distribution channels, and the decrease in the prior year resulting from management’s decision not to match aggressive pricing in the marketplace. ? South Korea’s premiums, fees and other revenues increased primarily due to higher fees from growth in its guaranteed annuity and variable universal life businesses. ? Brazil’s premiums, fees and other revenues increased due to changes in foreign currency exchange rates and business growth. ? Premiums, fees and other revenues increased in Japan due to an increase in reinsurance assumed. ? Australia’s premiums, fees and other revenues increased primarily due to growth in the institutional and reinsurance business inforce, an increase in retention levels and changes in foreign currency exchange rates. ? Argentina’s premiums, fees and other revenues increased due to higher pension contributions resulting from higher participant salaries and a higher salary threshold subject to fees and growth in bancassurance, offset by the reduction of cost of insurance fees as a result of the new pension system reform regulation. ? Taiwan’s and India’s premiums, fees and other revenues increased primarily due to business growth. These increases in premiums, fees and other revenues were partially offset by a decrease in the United Kingdom due to an unearned premium calculation refinement, partially offset by changes in foreign currency exchange rates. The growth in the Individual segment was primarily due to higher fee income from variable life and annuity and investment-type products and growth in premiums from other life products, partially offset by a decrease in immediate annuity premiums and a decline in premiums associated with the Company’s closed block business, in line with expectations. The growth in the Auto & Home segment was primarily due to an increase in premiums related to increased exposures, an increase in various voluntary and involuntary programs, and a change in estimate on auto rate refunds due to a regulatory examination, as well as an increase in other revenues primarily due to slower than anticipated claim payments in 2006. These increases were partially offset by a reduction in average earned premium per policy, and an increase in catastrophe reinsurance costs. The increase in Corporate & Other was primarily related to the resolution of an indemnification claim associated with the 2000 acquisition of General American Life Insurance Company (“GALIC”), partially offset by an adjustment of surrender values on corporateowned life insurance policies. Net Investment Income Net investment income increased by $1,924 million, or 11%, to $19,006 million for the year ended December 31, 2007 from $17,082 million for the comparable 2006 period. Management attributes $1,336 million of this increase to growth in the average asset base and $588 million to an increase in yields. The increase in net investment income from growth in the average asset base was primarily within fixed maturity securities, mortgage loans, real estate joint ventures and other limited partnership interests. The increase in net
<table><tr><td></td><td colspan="5">December 31,</td></tr><tr><td></td><td>2007</td><td>2006</td><td>2005</td><td>2004</td><td>2003</td></tr><tr><td></td><td colspan="5">(In millions)</td></tr><tr><td> Balance Sheet Data -1</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>General account assets</td><td>$398,403</td><td>$383,350</td><td>$353,776</td><td>$270,039</td><td>$251,085</td></tr><tr><td>Separate account assets</td><td>160,159</td><td>144,365</td><td>127,869</td><td>86,769</td><td>75,756</td></tr><tr><td>Total assets -2</td><td>$558,562</td><td>$527,715</td><td>$481,645</td><td>$356,808</td><td>$326,841</td></tr><tr><td>Liabilities:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Life and health policyholder liabilities -4</td><td>$278,246</td><td>$267,146</td><td>$257,258</td><td>$193,612</td><td>$177,947</td></tr><tr><td>Property and casualty policyholder liabilities -4</td><td>3,324</td><td>3,453</td><td>3,490</td><td>3,180</td><td>2,943</td></tr><tr><td>Short-term debt</td><td>667</td><td>1,449</td><td>1,414</td><td>1,445</td><td>3,642</td></tr><tr><td>Long-term debt</td><td>9,628</td><td>9,129</td><td>9,489</td><td>7,412</td><td>5,703</td></tr><tr><td>Collateral financing arrangements</td><td>5,732</td><td>850</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Junior subordinated debt securities</td><td>4,474</td><td>3,780</td><td>2,533</td><td>—</td><td>—</td></tr><tr><td>Payables for collateral under securities loaned and other transactions</td><td>44,136</td><td>45,846</td><td>34,515</td><td>28,678</td><td>27,083</td></tr><tr><td>Other</td><td>17,017</td><td>17,899</td><td>15,976</td><td>12,888</td><td>12,618</td></tr><tr><td>Separate account liabilities</td><td>160,159</td><td>144,365</td><td>127,869</td><td>86,769</td><td>75,756</td></tr><tr><td>Total liabilities -2</td><td>523,383</td><td>493,917</td><td>452,544</td><td>333,984</td><td>305,692</td></tr><tr><td>Stockholders’ Equity</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Preferred stock, at par value</td><td>1</td><td>1</td><td>1</td><td>—</td><td>—</td></tr><tr><td>Common stock, at par value</td><td>8</td><td>8</td><td>8</td><td>8</td><td>8</td></tr><tr><td>Additional paid-in capital</td><td>17,098</td><td>17,454</td><td>17,274</td><td>15,037</td><td>14,991</td></tr><tr><td>Retained earnings -5</td><td>19,884</td><td>16,574</td><td>10,865</td><td>6,608</td><td>4,193</td></tr><tr><td>Treasury stock, at cost</td><td>-2,890</td><td>-1,357</td><td>-959</td><td>-1,785</td><td>-835</td></tr><tr><td>Accumulated other comprehensive income -6</td><td>1,078</td><td>1,118</td><td>1,912</td><td>2,956</td><td>2,792</td></tr><tr><td>Total stockholders’ equity</td><td>35,179</td><td>33,798</td><td>29,101</td><td>22,824</td><td>21,149</td></tr><tr><td>Total liabilities and stockholders’ equity</td><td>$558,562</td><td>$527,715</td><td>$481,645</td><td>$356,808</td><td>$326,841</td></tr></table>
<table><tr><td></td><td colspan="5"> Years Ended December 31,</td></tr><tr><td></td><td> 2007</td><td> 2006</td><td> 2005</td><td> 2004</td><td> 2003</td></tr><tr><td> Other Data -1</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income available to common shareholders</td><td>$4,180</td><td>$6,159</td><td>$4,651</td><td>$2,758</td><td>$2,196</td></tr><tr><td>Return on common equity -7</td><td>13.0%</td><td>21.9%</td><td>18.5%</td><td>12.5%</td><td>11.4%</td></tr><tr><td>Return on common equity, excluding accumulated other comprehensive income</td><td>13.2%</td><td>22.6%</td><td>20.4%</td><td>14.4%</td><td>13.0%</td></tr><tr><td> EPS Data -1</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> Income from Continuing Operations Available to Common Shareholders Per Common Share</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$5.57</td><td>$3.85</td><td>$4.02</td><td>$3.43</td><td>$2.36</td></tr><tr><td>Diluted</td><td>$5.44</td><td>$3.81</td><td>$3.98</td><td>$3.41</td><td>$2.34</td></tr><tr><td> Income (loss) from Discontinued Operations Per Common Share</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$0.05</td><td>$4.24</td><td>$2.19</td><td>$0.35</td><td>$0.65</td></tr><tr><td>Diluted</td><td>$0.04</td><td>$4.18</td><td>$2.18</td><td>$0.35</td><td>$0.64</td></tr><tr><td> Cumulative Effect of a Change in Accounting Per Common Share -3</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$—</td><td>$—</td><td>$—</td><td>$-0.11</td><td>$-0.04</td></tr><tr><td>Diluted</td><td>$—</td><td>$—</td><td>$—</td><td>$-0.11</td><td>$-0.04</td></tr><tr><td> Net Income Available to Common Shareholders Per Common Share</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$5.62</td><td>$8.09</td><td>$6.21</td><td>$3.67</td><td>$2.97</td></tr><tr><td>Diluted</td><td>$5.48</td><td>$7.99</td><td>$6.16</td><td>$3.65</td><td>$2.94</td></tr><tr><td> Dividends Declared Per Common Share</td><td>$0.74</td><td>$0.59</td><td>$0.52</td><td>$0.46</td><td>$0.23</td></tr></table>
Years Ended December 31, @t@ (1) On July 1, 2005, the Company acquired Travelers. The 2005 selected financial data includes total revenues and total expenses of $966 million and $577 million, respectively, from the date of the acquisition. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Acquisitions and Dispositions. ” (2) Discontinued Operations: |
1.15 | what was the change in fair value of retained interests in billions as of december 2018 and december 2017? | THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements ‰ Purchased interests represent senior and subordinated interests, purchased in connection with secondary market-making activities, in securitization entities in which the firm also holds retained interests. ‰ Substantially all of the total outstanding principal amount and total retained interests relate to securitizations during 2014 and thereafter as of December 2018, and relate to securitizations during 2012 and thereafter as of December 2017. ‰ The fair value of retained interests was $3.28 billion as of December 2018 and $2.13 billion as of December 2017. In addition to the interests in the table above, the firm had other continuing involvement in the form of derivative transactions and commitments with certain nonconsolidated VIEs. The carrying value of these derivatives and commitments was a net asset of $75 million as of December 2018 and $86 million as of December 2017, and the notional amount of these derivatives and commitments was $1.09 billion as of December 2018 and $1.26 billion as of December 2017. The notional amounts of these derivatives and commitments are included in maximum exposure to loss in the nonconsolidated VIE table in Note 12. The table below presents information about the weighted average key economic assumptions used in measuring the fair value of mortgage-backed retained interests.
<table><tr><td></td><td>As of December</td></tr><tr><td><i>$ in millions</i></td><td>2018</td><td>2017</td></tr><tr><td>Fair value of retained interests</td><td>$ 3,151</td><td>$2,071</td></tr><tr><td>Weighted average life (years)</td><td>7.2</td><td>6.0</td></tr><tr><td>Constant prepayment rate</td><td>11.9%</td><td>9.4%</td></tr><tr><td>Impact of 10% adverse change</td><td>$ -27</td><td>$ -19</td></tr><tr><td>Impact of 20% adverse change</td><td>$ -53</td><td>$ -35</td></tr><tr><td>Discount rate</td><td>4.7%</td><td>4.2%</td></tr><tr><td>Impact of 10% adverse change</td><td>$ -75</td><td>$ -35</td></tr><tr><td>Impact of 20% adverse change</td><td>$ -147</td><td>$ -70</td></tr></table>
In the table above: ‰ Amounts do not reflect the benefit of other financial instruments that are held to mitigate risks inherent in these retained interests. ‰ Changes in fair value based on an adverse variation in assumptions generally cannot be extrapolated because the relationship of the change in assumptions to the change in fair value is not usually linear. ‰ The impact of a change in a particular assumption is calculated independently of changes in any other assumption. In practice, simultaneous changes in assumptions might magnify or counteract the sensitivities disclosed above. ‰ The constant prepayment rate is included only for positions for which it is a key assumption in the determination of fair value. ‰ The discount rate for retained interests that relate to U. S. government agency-issued collateralized mortgage obligations does not include any credit loss. Expected credit loss assumptions are reflected in the discount rate for the remainder of retained interests. The firm has other retained interests not reflected in the table above with a fair value of $133 million and a weighted average life of 4.2 years as of December 2018, and a fair value of $56 million and a weighted average life of 4.5 years as of December 2017. Due to the nature and fair value of certain of these retained interests, the weighted average assumptions for constant prepayment and discount rates and the related sensitivity to adverse changes are not meaningful as of both December 2018 and December 2017. The firm’s maximum exposure to adverse changes in the value of these interests is the carrying value of $133 million as of December 2018 and $56 million as of December 2017. Note 12. Variable Interest Entities A variable interest in a VIE is an investment (e. g. , debt or equity) or other interest (e. g. , derivatives or loans and lending commitments) that will absorb portions of the VIE’s expected losses and/or receive portions of the VIE’s expected residual returns. The firm’s variable interests in VIEs include senior and subordinated debt; loans and lending commitments; limited and general partnership interests; preferred and common equity; derivatives that may include foreign currency, equity and/or credit risk; guarantees; and certain of the fees the firm receives from investment funds. Certain interest rate, foreign currency and credit derivatives the firm enters into with VIEs are not variable interests because they create, rather than absorb, risk. VIEs generally finance the purchase of assets by issuing debt and equity securities that are either collateralized by or indexed to the assets held by the VIE. The debt and equity securities issued by a VIE may include tranches of varying levels of subordination. The firm’s involvement with VIEs includes securitization of financial assets, as described in Note 11, and investments in and loans to other types of VIEs, as described below. See Note 11 for further information about securitization activities, including the definition of beneficial interests. See Note 3 for the firm’s consolidation policies, including the definition of a VIE. The completion factor method is used for the months of incurred claims prior to the most recent three months because the historical percentage of claims processed for those months is at a level sufficient to produce a consistently reliable result. Conversely, for the most recent three months of incurred claims, the volume of claims processed historically is not at a level sufficient to produce a reliable result, which therefore requires us to examine historical trend patterns as the primary method of evaluation. Medical cost trends potentially are more volatile than other segments of the economy. The drivers of medical cost trends include increases in the utilization of hospital and physician services, prescription drugs, and new medical technologies, as well as the inflationary effect on the cost per unit of each of these expense components. Other external factors such as government-mandated benefits or other regulatory changes, catastrophes, and epidemics also may impact medical cost trends. Additionally, as we realign our commercial strategy, we continue to reduce the level of traditional utilization management functions such as preauthorization of services, monitoring of inpatient admissions, and requirements for physician referrals. Other internal factors such as system conversions and claims processing interruptions also may impact our ability to accurately predict estimates of historical completion factors or medical cost trends. All of these factors are considered in estimating IBNR and in estimating the per member per month claims trend for purposes of determining the reserve for the most recent three months. Each of these factors requires significant judgment by management. The completion and claims per member per month trend factors are the most significant factors impacting the IBNR estimate. The following table illustrates the sensitivity of these factors and the estimated potential impact on our operating results caused by changes in these factors based on December 31, 2003 data:
<table><tr><td colspan="2">Completion Factor (a):</td><td colspan="2">Claims Trend Factor (b):</td></tr><tr><td> (Decrease) Increase in Factor</td><td>Increase (Decrease) in Medical and Other Expenses Payable</td><td>(Decrease) Increase in Factor</td><td>Increase (Decrease) in Medical and Other Expenses Payable</td></tr><tr><td colspan="4">(dollars in thousands)</td></tr><tr><td>-3%</td><td>$136,000</td><td>-3%</td><td>$-59,000</td></tr><tr><td>-2%</td><td>$88,000</td><td>-2%</td><td>$-41,000</td></tr><tr><td>-1%</td><td>$43,000</td><td>-1%</td><td>$-22,000</td></tr><tr><td>1%</td><td>$-40,000</td><td>1%</td><td>$14,000</td></tr><tr><td>2%</td><td>$-79,000</td><td>2%</td><td>$33,000</td></tr><tr><td>3%</td><td>$-116,000</td><td>3%</td><td>$51,000</td></tr></table>
(a) Reflects estimated potential changes in medical and other expenses payable caused by changes in completion factors for incurred months prior to the most recent three months. (b) Reflects estimated potential changes in medical and other expenses payable caused by changes in annualized claims trend used for the estimation of per member per month incurred claims for the most recent three months. Most medical claims are paid within a few months of the member receiving service from a physician or other health care provider. As a result, these liabilities generally are described as having a “short-tail”, which causes less than 2% of our medical and other expenses payable as of the end of any given period to be outstanding for more than 12 months. As such, we expect that substantially all of the 2003 estimate of medical and other expenses payable will be known and paid during 2004. Our reserving practice is to consistently recognize the actuarial best point estimate within a level of confidence required by actuarial standards. Actuarial standards of practice generally require a level of confidence such that the liabilities established for IBNR have a greater probability of being adequate versus being insufficient, or such that the liabilities established for IBNR are sufficient to cover obligations under an assumption of moderately adverse conditions. Adverse conditions are situations in which the actual claims are TRICARE change orders occur when we perform services or incur costs under the directive of the federal government that were not originally specified in our contracts. Under federal regulations we are entitled to an equitable adjustment to the contract price, which results in additional premium revenues. Examples of items that have necessitated substantial change orders in recent years include congressionally legislated increases in the level of benefits for TRICARE beneficiaries and the administration of new government programs such as TRICARE for Life and TRICARE Senior Pharmacy. Like BPAs, we record revenue applicable to change orders when these amounts are determinable and the collectibility is reasonably assured. Unlike BPAs, where settlement only occurs at specified intervals, change orders may be negotiated and settled at any time throughout the year. Total TRICARE premium and ASO fee receivables were as follows at December 31, 2003 and 2002:
<table><tr><td></td><td>2003</td><td>2002</td></tr><tr><td></td><td colspan="2">(in thousands)</td></tr><tr><td>TRICARE premiums receivable:</td><td></td><td></td></tr><tr><td>Base receivable</td><td>$254,688</td><td>$190,339</td></tr><tr><td>Bid price adjustments (BPAs)</td><td>92,875</td><td>104,044</td></tr><tr><td>Change orders</td><td>7,073</td><td>1,400</td></tr><tr><td>Subtotal</td><td>354,636</td><td>295,783</td></tr><tr><td>Less: long-term portion of BPAs</td><td>-38,794</td><td>-86,471</td></tr><tr><td>Total TRICARE premiums receivable</td><td>$315,842</td><td>$209,312</td></tr><tr><td>TRICARE ASO fees receivable:</td><td></td><td></td></tr><tr><td>Base receivable</td><td>$—</td><td>$7,205</td></tr><tr><td>Change orders</td><td>11,968</td><td>56,230</td></tr><tr><td>Total TRICARE ASO fees receivable</td><td>$11,968</td><td>$63,435</td></tr></table>
Our TRICARE contracts also contain risk-sharing provisions with the federal government to minimize any losses and limit any profits in the event that medical costs for which we are at risk differ from the levels targeted in our contracts. Amounts receivable from the federal government under such risk-sharing provisions are included in the BPA receivable above, while amounts payable to the federal government under these provisions of approximately $17.3 million at December 31, 2003 are included in medical and other expenses payable in our consolidated balance sheets. Investment Securities Investment securities totaled $1,995.8 million, or 38% of total assets at December 31, 2003. Debt securities totaled $1,960.6 million, or 98% of our total investment portfolio. More than 94% of our debt securities were of investment-grade quality, with an average credit rating of AA by Standard & Poor’s at December 31, 2003. Most of the debt securities that are below investment grade are rated at the higher end (B or better) of the noninvestment grade spectrum. Our investment policy limits investments in a single issuer and requires diversification among various asset types. Duration is indicative of the relationship between changes in market value to 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 3.5 years at December 31, 2003. Based on this duration, a 1% increase in interest rates would generally decrease the fair value of our debt securities by approximately $70 million. Our investment securities are categorized as available for sale and, as a result, are stated at fair value. Fair value of publicly traded debt and equity securities are based on quoted market prices. Non-traded debt securities are priced independently by a third party vendor. Fair value of venture capital debt securities that are privately Revenue for other healthcare services is recognized on a fee-for-service basis at estimated collectible amounts at the time services are rendered. Our fees are determined in advance for each type of service performed. Investment Securities Investment securities totaled $9.8 billion, or 47.3% of total assets at December 31, 2013, and $9.8 billion, or 49% of total assets at December 31, 2012. Debt securities, detailed below, comprised this entire investment portfolio at December 31, 2013 and at December 31, 2012. The fair value of debt securities were as follows at December 31, 2013 and 2012: |
0.39024 | by what percentage did protect carrying values of excess inventories increase from 2002 to 2003? | Supplementary Information on Oil and Gas Producing Activities (Unaudited) C O N T I N U E D Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves (continued
<table><tr><td> <i>(In millions)</i> </td><td>United States</td><td>Europe</td><td>West Africa</td><td>Other Int’l.</td><td>Consolidated</td><td>Equity Investees</td><td>Total</td></tr><tr><td> December 31, 2003:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Future cash inflows</td><td>$13,331</td><td>$3,955</td><td>$4,471</td><td>$1,593</td><td>$23,350</td><td>$35</td><td>$23,385</td></tr><tr><td>Future production, transportation and administrative costs</td><td>-4,919</td><td>-1,050</td><td>-1,161</td><td>-827</td><td>-7,957</td><td>-19</td><td>-7,976</td></tr><tr><td>Future development costs</td><td>-758</td><td>-435</td><td>-175</td><td>-229</td><td>-1,597</td><td>-1</td><td>-1,598</td></tr><tr><td>Future income tax expenses</td><td>-2,612</td><td>-870</td><td>-780</td><td>-163</td><td>-4,425</td><td>-5</td><td>-4,430</td></tr><tr><td>Future net cash flows</td><td>5,042</td><td>1,600</td><td>2,355</td><td>374</td><td>9,371</td><td>10</td><td>9,381</td></tr><tr><td>10% annual discount for estimated timing of cash flows</td><td>-1,789</td><td>-301</td><td>-1,112</td><td>-168</td><td>-3,370</td><td>-2</td><td>-3,372</td></tr><tr><td>Standardized measure of discounted future net cash flows relating to proved oil and gas reserves<sup>(a)</sup></td><td>$3,253</td><td>$1,299</td><td>$1,243</td><td>$206</td><td>$6,001</td><td>$8</td><td>$6,009</td></tr><tr><td>December 31, 2002:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Future cash inflows</td><td>$12,994</td><td>$4,256</td><td>$4,136</td><td>$83</td><td>$21,469</td><td>$5,652</td><td>$27,121</td></tr><tr><td>Future production, transportation and administrative costs</td><td>-5,103</td><td>-1,218</td><td>-1,097</td><td>-30</td><td>-7,448</td><td>-1,465</td><td>-8,913</td></tr><tr><td>Future development costs</td><td>-650</td><td>-351</td><td>-324</td><td>-4</td><td>-1,329</td><td>-333</td><td>-1,662</td></tr><tr><td>Future income tax expenses</td><td>-2,440</td><td>-989</td><td>-753</td><td>-27</td><td>-4,209</td><td>-1,150</td><td>-5,359</td></tr><tr><td>Future net cash flows</td><td>4,801</td><td>1,698</td><td>1,962</td><td>22</td><td>8,483</td><td>2,704</td><td>11,187</td></tr><tr><td>10% annual discount for estimated timing of cash flows</td><td>-1,639</td><td>-444</td><td>-954</td><td>-5</td><td>-3,042</td><td>-2,212</td><td>-5,254</td></tr><tr><td>Standardized measure of discounted future net cash flows relating to proved oil and gas reserves<sup>(a)</sup></td><td>$3,162</td><td>$1,254</td><td>$1,008</td><td>$17</td><td>$5,441</td><td>$492</td><td>$5,933</td></tr><tr><td>Standardized measure of discounted future net cash flows relating to discontinued operations</td><td>$–</td><td>$–</td><td>$–</td><td>$384</td><td>$384</td><td>$–</td><td>$384</td></tr><tr><td>December 31, 2001:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Future cash inflows</td><td>$8,210</td><td>$3,601</td><td>$307</td><td>$–</td><td>$12,118</td><td>$3,456</td><td>$15,574</td></tr><tr><td>Future production, transportation and administrative costs</td><td>-2,848</td><td>-1,407</td><td>-111</td><td>–</td><td>-4,366</td><td>-1,198</td><td>-5,564</td></tr><tr><td>Future development costs</td><td>-661</td><td>-364</td><td>-40</td><td>–</td><td>-1,065</td><td>-178</td><td>-1,243</td></tr><tr><td>Future income tax expenses</td><td>-1,480</td><td>-572</td><td>-51</td><td>–</td><td>-2,103</td><td>-468</td><td>-2,571</td></tr><tr><td>Future net cash flows</td><td>3,221</td><td>1,258</td><td>105</td><td>–</td><td>4,584</td><td>1,612</td><td>6,196</td></tr><tr><td>10% annual discount for estimated timing of cash flows</td><td>-1,086</td><td>-267</td><td>-15</td><td>–</td><td>-1,368</td><td>-1,400</td><td>-2,768</td></tr><tr><td>Standardized measure of discounted future net cash flows relating to proved oil and gas reserves<sup>(a)</sup></td><td>$2,135</td><td>$991</td><td>$90</td><td>$–</td><td>$3,216</td><td>$212</td><td>$3,428</td></tr><tr><td>Standardized measure of discounted future net cash flows relating to discontinued operations</td><td>$–</td><td>$–</td><td>$–</td><td>$172</td><td>$172</td><td>$–</td><td>$172</td></tr></table>
(a) Excludes $(26) million, $(5) million and $59 million of discounted future net cash flows from the effects of hedging transactions for 2003, 2002 and 2001, respectively. Management’s Discussion and Analysis of Income and Operations Revenues for each of the last three years are summarized in the following table:
<table><tr><td> <i>(In millions)</i> </td><td>2003</td><td>2002</td><td>2001</td></tr><tr><td>E&P</td><td>$3,990</td><td>$3,711</td><td>$4,245</td></tr><tr><td>RM&T</td><td>34,514</td><td>26,399</td><td>27,247</td></tr><tr><td>OERB</td><td>3,209</td><td>2,122</td><td>2,062</td></tr><tr><td>Segment revenues</td><td>41,713</td><td>32,232</td><td>33,554</td></tr><tr><td>Elimination of intersegment revenues</td><td>-750</td><td>-937</td><td>-728</td></tr><tr><td>Elimination of sales to United States Steel</td><td>–</td><td>–</td><td>-30</td></tr><tr><td>Total revenues</td><td>$40,963</td><td>$31,295</td><td>$32,796</td></tr><tr><td>Items included in both revenues and costs and expenses:</td><td></td><td></td><td></td></tr><tr><td>Consumer excise taxes on petroleum products and merchandise</td><td>$4,285</td><td>$4,250</td><td>$4,404</td></tr><tr><td>Matching crude oil and refined product buy/sell transactions settled in cash:</td><td></td><td></td><td></td></tr><tr><td>E&P</td><td>$222</td><td>$289</td><td>$454</td></tr><tr><td>RM&T</td><td>6,936</td><td>4,191</td><td>3,797</td></tr><tr><td>Total buy/sell transactions</td><td>$7,158</td><td>$4,480</td><td>$4,251</td></tr></table>
E&P segment revenues increased by $279 million in 2003 from 2002 and decreased by $534 million in 2002 from 2001. The 2003 increase was primarily due to higher worldwide natural gas and liquid hydrocarbon prices. This increase was partially offset by lower liquid hydrocarbon and natural gas volumes. The decrease in 2002 was primarily due to lower worldwide natural gas prices and lower liquid hydrocarbon and natural gas volumes, partially offset by higher worldwide liquid hydrocarbon prices. Derivative gains (losses) totaled $(176) million in 2003, compared to $52 million in 2002 and $85 million in 2001. Derivatives included losses of $66 million in 2003, compared to gains of $18 million in 2002, related to long-term gas contracts in the United Kingdom that are accounted for as derivative instruments and marked-to-market. RM&T segment revenues increased by $8.115 billion in 2003 from 2002 and decreased by $848 million in 2002 from 2001. The 2003 increase primarily reflected higher refined product selling prices and volumes and increased matching crude oil buy/sell transaction volumes and prices. The decrease in 2002 was primarily due to lower refined product prices. OERB segment revenues increased by $1.087 billion in 2003 from 2002 and $60 million in 2002 from 2001. The increase in 2003 is a result of higher natural gas and liquid hydrocarbon prices and increased natural gas and crude oil marketing activity. The increase in 2002 reflected a favorable effect from increased natural gas and crude oil marketing activity partially offset by lower natural gas prices. Derivative gains (losses) totaled $19 million in 2003, compared to $(8) million in 2002 and $(29) million in 2001. For additional information on segment results, see discussion on income from operations on page 36. Income from equity method investments decreased by $108 million in 2003 and increased by $19 million in 2002 from 2001. The decrease in 2003 is due to a $124 million loss on the dissolution of MKM Partners L. P. , partially offset by increased earnings of other equity method investments due to higher natural gas and liquid hydrocarbons prices. For further discussion of the dissolution of MKM Partners L. P. , see Note 13 to the Consolidated Financial Statements. The increase in 2002 is primarily the result of increased earnings in other equity method investments due to higher liquid hydrocarbons prices. Net gains on disposal of assets increased by $99 million in 2003 from 2002 and $23 million in 2002 from 2001. During 2003, Marathon sold its interest in CLAM Petroleum B. V. , interests in several pipeline companies, Yates field and gathering system, SSA stores primarily in Florida, South Carolina, North Carolina and Georgia, and certain fields in the Big Horn Basin of Wyoming. Results from 2002 include the sale of various SSA stores and the sale of San Juan Basin assets. Results from 2001 include the sale of various SSA stores and various domestic producing properties. Gain (loss) on ownership change in MAP reflects the effects of contributions to MAP of certain environmental capital expenditures and leased property acquisitions funded by Marathon and Ashland. In accordance with MAP’s limited liability company agreement, in certain instances, environmental capital Cash Flows Net cash provided from operating activities (for continuing operations) totaled $2.678 billion in 2003, compared with $2.336 billion in 2002 and $2.749 billion in 2001. The increase in 2003 mainly reflects the effects of higher worldwide natural gas and liquid hydrocarbons prices and a higher refining and wholesale marketing margin. Additionally in 2003, MAP made cash contributions to its pension plans of $89 million. The decrease in 2002 mainly reflects the effects of lower refined product margins and lower prices for natural gas. Net cash provided from operating activities (for discontinued operations) totaled $83 million in 2003, compared with $69 million in 2002 and $887 million in 2001. This is primarily related to Marathon’s E&P operations in western Canada sold in 2003. Also included in 2001 is the business of United States Steel. Capital expenditures for each of the last three years are summarized in the following table:
<table><tr><td> <i>(In millions)</i> </td><td> 2003</td><td>2002</td><td>2001</td></tr><tr><td>E&P<sup>(a)</sup></td><td></td><td></td><td></td></tr><tr><td>Domestic</td><td>$342</td><td>$416</td><td>$537</td></tr><tr><td>International</td><td>629</td><td>403</td><td>294</td></tr><tr><td>Total E&P</td><td>971</td><td>819</td><td>831</td></tr><tr><td>RM&T</td><td>772</td><td>621</td><td>591</td></tr><tr><td>OERB</td><td>133</td><td>49</td><td>4</td></tr><tr><td>Corporate</td><td>16</td><td>31</td><td>107</td></tr><tr><td>Total</td><td>$1,892</td><td>$1,520</td><td>$1,533</td></tr></table>
(a) Amounts exclude the acquisitions of KMOC in 2003, the Equatorial Guinea interests in 2002 and Pennaco in 2001. Capital expenditures in 2003 totaled $1.892 billion compared with $1.520 billion and $1.533 billion in 2002 and 2001, excluding the acquisitions of KMOC in 2003, Equatorial Guinea interests in 2002 and Pennaco in 2001. The $372 million increase in 2003 mainly reflected increased spending in the RM&T segment at the Catlettsburg refinery and on the Cardinal Products Pipeline and in the E&P segment in West Africa and Norway. The increase in OERB is due to the purchase of 30% interest in two LNG tankers which Marathon previously leased and project development costs associated with Phase 3 in Equatorial Guinea. The $13 million decrease in 2002 mainly reflected decreased spending in the E&P segment offset by increased spending in the RM&T segment. The decrease in the E&P segment was primarily due to the drilling of fewer gas wells in the United States in 2002 partially offset by higher capital expenditures for completion of a pipeline in Gabon, for a pipeline construction contract in Ireland and for development expenditures in Equatorial Guinea. The increase in the RM&T segment in 2002 was attributable to increased spending on the multi-year integrated investment program at MAP’s Catlettsburg refinery and construction of the Cardinal Products Pipeline in 2002, partially offset by lower capital expenditures for SSA retail outlets and completion of the Garyville coker construction in 2001. The decrease in corporate in 2002 was primarily due to the implementation of SAP financial and operations software in 2001. Acquisitions included cash payments of $252 million in 2003 for the acquisition of KMOC, $1.160 billion in 2002 for the acquisitions of Equatorial Guinea interests and $506 million in 2001 for the acquisition of Pennaco. For further discussion of acquisitions, see Note 5 to the Consolidated Financial Statements. Cash from disposal of assets was $1.256 billion, including the disposal of discontinued operations, in 2003, compared with $146 million in 2002 and $83 million in 2001. In 2003, proceeds were primarily from the disposition of Marathon’s E&P properties in western Canada, Yates field and gathering system, interest in CLAM Petroleum B. V. , SSA stores, interest in several pipeline companies and certain fields in the Big Horn Basin of Wyoming. In 2002, proceeds were primarily from the disposition of various SSA stores and the sale of San Juan Basin assets. In 2001, proceeds were primarily from the sale of certain Canadian assets, SSA stores, and various domestic producing properties. Net cash used in financing activities totaled $888 million in 2003, compared with net cash provided of $88 million in 2002 and net cash used of $1.290 billion in 2001. The decrease was due to activity in 2002 primarily associated with financing the acquisitions of Equatorial Guinea interests of $1.160 billion. This was partially offset by the $295 million repayment of preferred securities in 2002 that became redeemable or were converted to a right to receive cash upon the Separation. In early January 2002, Marathon paid $185 million to retire the 6.75% Convertible Quarterly Income Preferred Securities and $110 million to retire the 6.50% Cumulative Convertible Preferred Stock. Additionally, distributions to the minority shareholder of MAP were $262 million in 2003, RM&T Segment Marathon’s RM&T operations primarily use derivative commodity instruments to mitigate the price risk of certain crude oil and other feedstock purchases, to protect carrying values of excess inventories, to protect margins on fixed price sales of refined products and to lock-in the price spread between refined products and crude oil. Derivative instruments are used to mitigate the price risk between the time foreign and domestic crude oil and other feedstock purchases for refinery supply are priced and when they are actually refined into salable petroleum products. In addition, natural gas options are in place to manage the price risk associated with approximately 60% of the anticipated natural gas purchases for refinery use through the first quarter of 2004 and 50% through the second quarter of 2004. Derivative commodity instruments are also used to protect the value of excess refined product, crude oil and LPG inventories. Derivatives are used to lock in margins associated with future fixed price sales of refined products to non-retail customers. Derivative commodity instruments are used to protect against decreases in the future crack spreads. Within a limited framework, derivative instruments are also used to take advantage of opportunities identified in the commodity markets. Derivative gains (losses) included in RM&T segment income for each of the last two years are summarized in the following table:
<table><tr><td><i>Strategy (In Millions)</i></td><td>2003</td><td>2002</td></tr><tr><td>Mitigate price risk</td><td>$-112</td><td>$-95</td></tr><tr><td>Protect carrying values of excess inventories</td><td>-57</td><td>-41</td></tr><tr><td>Protect margin on fixed price sales</td><td>5</td><td>11</td></tr><tr><td>Protect crack spread values</td><td>6</td><td>1</td></tr><tr><td>Trading activities</td><td>-4</td><td>–</td></tr><tr><td>Total net derivative losses</td><td>$-162</td><td>$-124</td></tr></table>
Generally, derivative losses occur when market prices increase, which are offset by gains on the underlying physical commodity transaction. Conversely, derivative gains occur when market prices decrease, which are offset by losses on the underlying physical commodity transaction. OERB Segment Marathon has used derivative instruments to convert the fixed price of a long-term gas sales contract to market prices. The underlying physical contract is for a specified annual quantity of gas and matures in 2008. Similarly, Marathon will use derivative instruments to convert shorter term (typically less than a year) fixed price contracts to market prices in its ongoing purchase for resale activity; and to hedge purchased gas injected into storage for subsequent resale. Derivative gains (losses) included in OERB segment income were $19 million, $(8) million and $(29) million for 2003, 2002 and 2001. OERB’s trading activity gains (losses) of $(7) million, $4 million and $(1) million in 2003, 2002 and 2001 are included in the aforementioned amounts. Other Commodity Risk Marathon is subject to basis risk, caused by factors that affect the relationship between commodity futures prices reflected in derivative commodity instruments and the cash market price of the underlying commodity. Natural gas transaction prices are frequently based on industry reference prices that may vary from prices experienced in local markets. For example, New York Mercantile Exchange (“NYMEX”) contracts for natural gas are priced at Louisiana’s Henry Hub, while the underlying quantities of natural gas may be produced and sold in the western United States at prices that do not move in strict correlation with NYMEX prices. To the extent that commodity price changes in one region are not reflected in other regions, derivative commodity instruments may no longer provide the expected hedge, resulting in increased exposure to basis risk. These regional price differences could yield favorable or unfavorable results. OTC transactions are being used to manage exposure to a portion of basis risk. Marathon is subject to liquidity risk, caused by timing delays in liquidating contract positions due to a potential inability to identify a counterparty willing to accept an offsetting position. Due to the large number of active participants, liquidity risk exposure is relatively low for exchange-traded transactions. |
5,724 | What is the sum of Impaired loans with an associated allowance in 2016? (in million) | Impaired Loans Impaired loans include commercial and consumer nonperforming loans and TDRs, regardless of nonperforming status. TDRs that were previously recorded at amortized cost and are now classified and accounted for as held for sale are also included. Excluded from impaired loans are nonperforming leases, loans accounted for as held for sale other than the TDRs described in the preceding sentence, loans accounted for under the fair value option, smaller balance homogeneous type loans and purchased impaired loans. We did not recognize any interest income on impaired loans that have not returned to performing status, while they were impaired during the year ended December 31, 2016 and December 31, 2015. The following table provides further detail on impaired loans individually evaluated for impairment and the associated ALLL. Certain commercial and consumer impaired loans do not have a related ALLL as the valuation of these impaired loans exceeded the recorded investment. Table 43: Impaired Loans
<table><tr><td>In millions</td><td>Unpaid Principal Balance</td><td>Recorded Investment</td><td>Associated Allowance</td><td>Average Recorded Investment (a)</td></tr><tr><td> December 31, 2016</td><td></td><td></td><td></td><td></td></tr><tr><td>Impaired loans with an associated allowance</td><td></td><td></td><td></td><td></td></tr><tr><td>Total commercial lending</td><td>$742</td><td>$477</td><td>$105</td><td>$497</td></tr><tr><td>Total consumer lending</td><td>1,237</td><td>1,185</td><td>226</td><td>1,255</td></tr><tr><td>Total impaired loans with an associated allowance</td><td>$1,979</td><td>$1,662</td><td>$331</td><td>$1,752</td></tr><tr><td>Impaired loans without an associated allowance</td><td></td><td></td><td></td><td></td></tr><tr><td>Total commercial lending</td><td>$447</td><td>$322</td><td></td><td>$365</td></tr><tr><td>Total consumer lending</td><td>982</td><td>608</td><td></td><td>604</td></tr><tr><td>Total impaired loans without an associated allowance</td><td>$1,429</td><td>$930</td><td></td><td>$969</td></tr><tr><td>Total impaired loans</td><td>$3,408</td><td>$2,592</td><td>$331</td><td>$2,721</td></tr><tr><td>December 31, 2015</td><td></td><td></td><td></td><td></td></tr><tr><td>Impaired loans with an associated allowance</td><td></td><td></td><td></td><td></td></tr><tr><td>Total commercial lending</td><td>$696</td><td>$467</td><td>$119</td><td>$503</td></tr><tr><td>Total consumer lending</td><td>1,389</td><td>1,307</td><td>276</td><td>1,474</td></tr><tr><td>Total impaired loans with an associated allowance</td><td>$2,085</td><td>$1,774</td><td>$395</td><td>$1,977</td></tr><tr><td>Impaired loans without an associated allowance</td><td></td><td></td><td></td><td></td></tr><tr><td>Total commercial lending</td><td>$407</td><td>$276</td><td></td><td>$255</td></tr><tr><td>Total consumer lending</td><td>1,000</td><td>610</td><td></td><td>512</td></tr><tr><td>Total impaired loans without an associated allowance</td><td>$1,407</td><td>$886</td><td></td><td>$767</td></tr><tr><td>Total impaired loans</td><td>$3,492</td><td>$2,660</td><td>$395</td><td>$2,744</td></tr></table>
(a) Average recorded investment is for the years ended December 31, 2016 and 2015. NOTE 4 ALLOWANCES FOR LOAN AND LEASE LOSSES We maintain the ALLL at levels that we believe to be appropriate to absorb estimated probable credit losses incurred in the portfolios as of the balance sheet date. We use the two main portfolio segments – Commercial Lending and Consumer Lending, and develop and document the ALLL under separate methodologies for each of these portfolio segments. See Note 1 Accounting Policies for a description of the accounting policies for ALLL. A rollforward of the ALLL and associated loan data follows. The expected return on plan assets is a long-term assumption established by considering historical and anticipated returns of the asset classes invested in by the pension plan and the allocation strategy currently in place among those classes. For purposes of setting and reviewing this assumption, “long term” refers to the period over which the plan’s projected benefit obligations will be disbursed. We review this assumption at each measurement date and adjust it if warranted. Our selection process references certain historical data and the current environment, but primarily utilizes qualitative judgment regarding future return expectations. We also examine the assumption used by other companies with similar pension investment strategies. Taking into account all of these factors, the expected long-term return on plan assets for determining net periodic pension cost for 2016 was 6.75%. We are reducing our expected long-term return on assets to 6.375% for determining pension cost for 2017. This decision was made after considering the views of both internal and external capital market advisors, particularly with regard to the effects of the recent economic environment on long-term prospective equity and fixed income returns. PNC’s net periodic benefit cost recognized for the plans is sensitive to the discount rate and expected long-term return on plan assets. With all other assumptions held constant, a .5% decline in the discount rate would have resulted in an immaterial increase in net periodic benefit cost for the qualified pension plan in 2016, and to be recognized in 2017. For the nonqualified pension plan and postretirement benefits, a .5% decline in the discount rate would also have resulted in an immaterial increase in net periodic benefit cost. The health care cost trend rate assumptions shown in Tables 75 and 76 relate only to the postretirement benefit plans. The effect of a one-percentage-point increase or decrease in assumed health care cost trend rates would be insignificant. Defined Contribution Plans The PNC Incentive Savings Plan (ISP) is a qualified defined contribution plan that covers all of our eligible employees. Effective January 1, 2015, newly-hired full time employees and part-time employees who became eligible to participate in the ISP after that date are automatically enrolled in the ISP with a deferral rate equal to 4% of eligible compensation in the absence of an affirmative election otherwise. Employee benefits expense related to the ISP was $.1 billion in 2016, 2015 and 2014, representing cash contributed to the ISP by PNC. The ISP is a 401(k) Plan and includes an employee stock ownership (ESOP) feature. Employee contributions are invested in a number of investment options, including pre mixed portfolios and individual core funds, available under the ISP at the direction of the employee. NOTE 12 STOCK BASED COMPENSATION PLANS We have long-term incentive award plans (Incentive Plans) that provide for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, incentive shares/performance units, restricted shares, restricted share units, other share-based awards and dollar-denominated awards to executives and, other than incentive stock options, to non-employee directors. Certain Incentive Plan awards may be paid in stock, cash or a combination of stock and cash. We typically grant a substantial portion of our stock-based compensation awards during the first quarter of each year. Total compensation expense recognized related to all sharebased payment arrangements was approximately $.2 billion during each of 2016, 2015 and 2014. The total tax benefit recognized related to compensation expense on all share-based payment arrangements was approximately $.1 billion during each of 2016, 2015 and 2014. At December 31, 2016, there was $.2 billion of unamortized share-based compensation expense related to nonvested equity compensation arrangements granted under the Incentive Plans. This unamortized cost is expected to be recognized as expense over a period of no longer than five years. Nonqualified Stock Options We did not grant any stock options in 2016, 2015 or 2014. Prior to 2014, options were granted at exercise prices not less than the market value of a share of common stock on the grant date. Generally, options become exercisable in installments after the grant date. No option can be exercised after 10 years from its grant date. Payment of the option exercise price may be in cash or by surrendering shares of common stock at market value on the exercise date. The exercise price may also be paid by using previously owned shares. The following table represents the stock option activity for 2016. Table 77: Stock Options – Rollforward (a)
<table><tr><td>Year ended December 31, 2016In millions except weighted- average data</td><td>Shares</td><td>Weighted- Average Exercise Price</td><td>Weighted- Average Remaining Contractual Life</td><td>Aggregate Intrinsic Value</td></tr><tr><td>Outstanding, January 1</td><td>5</td><td>$55.50</td><td></td><td></td></tr><tr><td>Exercised</td><td>-2</td><td>$56.43</td><td></td><td></td></tr><tr><td> Outstanding, December 31</td><td>3</td><td>$55.16</td><td>2.7 years</td><td>$181</td></tr><tr><td> Vested and exercisable, December 31</td><td>3</td><td>$55.16</td><td>2.7 years</td><td>$181</td></tr></table>
(a) Cancelled stock options during 2016 were insignificant. To determine stock-based compensation expense, the grant date fair value is applied to the options granted with a reduction for estimated forfeitures. We recognize compensation expense for stock options on a straight-line basis over the specified vesting period. PART II ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) (1) Our common stock is listed on the New York Stock Exchange and is traded under the symbol “PNC. ” At the close of business on February 16, 2017, there were 60,763 common shareholders of record. Holders of PNC common stock are entitled to receive dividends when declared by the Board of Directors out of funds legally available for this purpose. Our Board of Directors may not pay or set apart dividends on the common stock until dividends for all past dividend periods on any series of outstanding preferred stock and certain outstanding capital securities issued by the parent company have been paid or declared and set apart for payment. The Board of Directors presently intends to continue the policy of paying quarterly cash dividends. The amount of any future dividends will depend on economic and market conditions, our financial condition and operating results, and other factors, including contractual restrictions and applicable government regulations and policies (such as those relating to the ability of bank and non-bank subsidiaries to pay dividends to the parent company and regulatory capital limitations). The amount of our dividend is also currently subject to the results of the supervisory assessment of capital adequacy and capital planning processes undertaken by the Federal Reserve and our primary bank regulators as part of the Comprehensive Capital Analysis and Review (CCAR) process as described in the Supervision and Regulation section in Item 1 of this Report. The Federal Reserve has the power to prohibit us from paying dividends without its approval. For further information concerning dividend restrictions and other factors that could limit our ability to pay dividends, as well as restrictions on loans, dividends or advances from bank subsidiaries to the parent company, see the Supervision and Regulation section in Item 1, Item 1A Risk Factors, the Capital and Liquidity Management portion of the Risk Management section in Item 7, and Note 10 Borrowed Funds, Note 15 Equity and Note 18 Regulatory Matters in the Notes To Consolidated Financial Statements in Item 8 of this Report, which we include here by reference. We include here by reference additional information relating to PNC common stock under the Common Stock Prices/ Dividends Declared section in the Statistical Information (Unaudited) section of Item 8 of this Report. We include here by reference the information regarding our compensation plans under which PNC equity securities are authorized for issuance as of December 31, 2016 in the table (with introductory paragraph and notes) that appears in Item 12 of this Report. Our stock transfer agent and registrar is: Computershare Trust Company, N. A.250 Royall Street Canton, MA 02021 800-982-7652 Registered shareholders may contact this phone number regarding dividends and other shareholder services. We include here by reference the information that appears under the Common Stock Performance Graph caption at the end of this Item 5. (a)(2) None. (b) Not applicable. (c) Details of our repurchases of PNC common stock during the fourth quarter of 2016 are included in the following table: In thousands, except per share data
<table><tr><td>2016 period</td><td>Total sharespurchased (a)</td><td>Averagepricepaid pershare</td><td>Total sharespurchased aspartofpubliclyannouncedprograms (b)</td><td>Maximumnumber ofshares thatmay yet bepurchasedundertheprograms (b)</td></tr><tr><td>October 1 – 31</td><td>2,277</td><td>$91.15</td><td>2,245</td><td>61,962</td></tr><tr><td>November 1 – 30</td><td>1,243</td><td>$103.50</td><td>1,243</td><td>60,719</td></tr><tr><td>December 1 – 31</td><td>1,449</td><td>$115.65</td><td>1,449</td><td>59,270</td></tr><tr><td>Total</td><td>4,969</td><td>$101.39</td><td></td><td></td></tr></table>
(a) Includes PNC common stock purchased in connection with our various employee benefit plans generally related to forfeitures of unvested restricted stock awards and shares used to cover employee payroll tax withholding requirements. Note 11 Employee Benefit Plans and Note 12 Stock Based Compensation Plans in the Notes To Consolidated Financial Statements in Item 8 of this Report include additional information regarding our employee benefit and equity compensation plans that use PNC common stock. (b) On March 11, 2015, we announced that our Board of Directors approved the establishment of a stock repurchase program authorization in the amount of 100 million shares of PNC common stock, effective April 1, 2015. Repurchases are made in open market or privately negotiated transactions and the timing and exact amount of common stock repurchases will depend on a number of factors including, among others, market and general economic conditions, regulatory capital considerations, alternative uses of capital, the potential impact on our credit ratings, and contractual and regulatory limitations, including the results of the supervisory assessment of capital adequacy and capital planning processes undertaken by the Federal Reserve as part of the CCAR process. In June 2016, we announced share repurchase programs of up to $2.0 billion for the four quarter period beginning with the third quarter of 2016, including repurchases of up to $200 million related to employee benefit plans. In January 2017, we announced a $300 million increase in our share repurchase programs for this period. In the fourth quarter of 2016, we repurchased 4.9 million shares of common stock on the open market, with an average price of $101.47 per share and an aggregate repurchase price of $.5 billion. See the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report for more information on the share repurchase programs under the share repurchase authorization for the period July 1, 2016 through June 30, 2017 included in the 2016 capital plan accepted by the Federal Reserve. |
0.55501 | What is the ratio of all value that are in the range of 400 and 1000 to the sum of value, in 2011? | AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U. S. Acquisitions—During the year ended December 31, 2010, the Company acquired 548 towers through multiple acquisitions in the United States for an aggregate purchase price of $329.3 million and contingent consideration of approximately $4.6 million. The acquisition of these towers is consistent with the Company’s strategy to expand in selected geographic areas and have been accounted for as business combinations. The following table summarizes the preliminary allocation of the aggregate purchase consideration paid and the amounts of assets acquired and liabilities assumed based on the estimated fair value of the acquired assets and assumed liabilities at the date of acquisition (in thousands):
<table><tr><td></td><td>Purchase Price Allocation</td></tr><tr><td>Non-current assets</td><td>$442</td></tr><tr><td>Property and equipment</td><td>64,564</td></tr><tr><td>Intangible assets -1</td><td>260,898</td></tr><tr><td>Current liabilities</td><td>-360</td></tr><tr><td>Long-term liabilities</td><td>-7,802</td></tr><tr><td>Fair value of net assets acquired</td><td>$317,742</td></tr><tr><td>Goodwill -2</td><td>16,131</td></tr></table>
(1) Consists of customer relationships of approximately $205.4 million and network location intangibles of approximately $55.5 million. The customer relationships and network location intangibles are being amortized on a straight-line basis over a period of 20 years. (2) Goodwill is expected to be deductible for income tax purposes. The goodwill was allocated to the domestic rental and management segment. The allocation of the purchase price will be finalized upon completion of analyses of the fair value of the assets acquired and liabilities assumed. South Africa Acquisition—On November 4, 2010, the Company entered into a definitive agreement with Cell C (Pty) Limited to purchase up to approximately 1,400 existing towers, and up to 1,800 additional towers that either are under construction or will be constructed, for an aggregate purchase price of up to approximately $430 million. The Company anticipates closing the purchase of up to 1,400 existing towers during 2011, subject to customary closing conditions. Other Transactions Coltel Transaction—On September 3, 2010, the Company entered into a definitive agreement to purchase the exclusive use rights for towers in Colombia from Colombia Telecomunicaciones S. A. E. S. P. (“Coltel”) until 2023, when ownership of the towers will transfer to the Company at no additional cost. Pursuant to that agreement, the Company completed the purchase of exclusive use rights for 508 towers for an aggregate purchase price of $86.8 million during the year ended December 31, 2010. The Company expects to complete the purchase of the exclusive use rights for an additional 180 towers by the end of 2011, subject to customary closing conditions. The transaction has been accounted for as a capital lease, with the aggregated purchase price being allocated to property and equipment and non-current assets. Joint Venture with MTN Group—On December 6, 2010, the Company entered into a definitive agreement with MTN Group Limited (“MTN Group”) to establish a joint venture in Ghana (“TowerCo Ghana”). TowerCo Ghana, which will be managed by the Company, will be owned by a holding company of which a wholly owned American Tower subsidiary will hold a 51% share and a wholly owned MTN Group subsidiary (“MTN Ghana”) will hold a 49% share. The transaction involves the sale of up to 1,876 of MTN Ghana’s existing sites to D. R. HORTON, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) its homes constructed in these markets and of the warranty claims received in these markets as well as testing of specific homes. Through September 30, 2010, the Company has spent approximately $4.9 million to remediate these homes. While the Company will seek reimbursement for these remediation costs from various sources, it has not recorded a receivable for potential recoveries as of September 30, 2010. The Company is continuing its investigation to determine if there are additional homes with the Chinese Drywall in these markets, which if found, would likely require the Company to further increase its warranty reserve for this matter in the future. The remaining costs accrued to complete this remediation are based on the Company’s estimate of remaining repair costs. If the actual costs to remediate the homes differ from the estimated costs, the Company may revise its warranty estimate. As of September 30, 2010, the Company has been named as a defendant in several lawsuits in Louisiana and Florida pertaining to Chinese Drywall. As these actions are still in their early stages, the Company is unable to express an opinion as to the amount of damages, if any, beyond what has been reserved for repair as discussed above. Changes in the Company’s warranty liability during fiscal 2010 and 2009 were as follows:
<table><tr><td></td><td colspan="2">September 30,</td></tr><tr><td></td><td>2010</td><td>2009</td></tr><tr><td></td><td colspan="2">(In millions)</td></tr><tr><td>Warranty liability, beginning of year</td><td>$59.6</td><td>$83.4</td></tr><tr><td>Warranties issued</td><td>19.5</td><td>16.8</td></tr><tr><td>Changes in liability for pre-existing warranties</td><td>-5.0</td><td>-16.0</td></tr><tr><td>Settlements made</td><td>-27.9</td><td>-24.6</td></tr><tr><td>Warranty liability, end of year</td><td>$46.2</td><td>$59.6</td></tr></table>
Insurance and Legal Claims The Company has been named as defendant in various claims, complaints and other legal actions including construction defect claims on closed homes and other claims and lawsuits incurred in the ordinary course of business, including employment matters, personal injury claims, land development issues, contract disputes and claims related to its mortgage activities. The Company has established reserves for these contingencies, based on the expected costs of the claims. The Company’s estimates of such reserves are based on the facts and circumstances of individual pending claims and historical data and trends, including costs relative to revenues, home closings and product types, and include estimates of the costs of construction defect claims incurred but not yet reported. These reserve estimates are subject to ongoing revision as the circumstances of individual pending claims and historical data and trends change. Adjustments to estimated reserves are recorded in the accounting period in which the change in estimate occurs. The Company’s liabilities for these items were $571.3 million and $534.0 million at September 30, 2010 and 2009, respectively, and are included in homebuilding accrued expenses and other liabilities in the consolidated balance sheets. Related to the contingencies for construction defect claims and estimates of construction defect claims incurred but not yet reported, and other legal claims and lawsuits incurred in the ordinary course of business, the Company estimates and records insurance receivables for these matters under applicable insurance policies when recovery is probable. Additionally, the Company may have the ability to recover a portion of its legal expenses from its subcontractors when the Company has been named as an additional insured on their insurance policies. Estimates of the Company’s insurance receivables related to these matters totaled $251.5 million and $234.6 million at September 30, 2010 and 2009, respectively, and are included in homebuilding other assets in the consolidated balance sheets. Expenses related to these items were approximately $43.2 million, $58.3 million and $53.8 million in fiscal 2010, 2009 and 2008, respectively. Management believes that, while the outcome of such contingencies cannot be predicted with certainty, the liabilities arising from these matters will not have a material adverse effect on the Company’s consolidated The average price of our net sales orders in 2011 was $214,000, an increase of 3% from the $207,000 average in 2010. The largest percentage increases were in our Southwest and West regions and were primarily due to opening new communities and adjusting our product mix, with higher priced communities representing more of our sales. Our annual sales order cancellation rate was 27% in fiscal 2011, compared to 26% in fiscal 2010. These cancellation rates were above historical levels, reflecting the challenges in most of our homebuilding markets.
<table><tr><td></td><td colspan="9">Sales Order Backlog As of September 30,</td></tr><tr><td></td><td colspan="3">Homes in Backlog</td><td colspan="3">Value (In millions)</td><td colspan="3">Average Selling Price</td></tr><tr><td></td><td>2011</td><td>2010</td><td>%Change</td><td>2011</td><td>2010</td><td>%Change</td><td>2011</td><td>2010</td><td>%Change</td></tr><tr><td>East</td><td>606</td><td>472</td><td>28%</td><td>$147.6</td><td>$103.4</td><td>43%</td><td>$243,600</td><td>$219,100</td><td>11%</td></tr><tr><td>Midwest</td><td>288</td><td>247</td><td>17%</td><td>80.6</td><td>70.1</td><td>15%</td><td>279,900</td><td>283,800</td><td>-1%</td></tr><tr><td>Southeast</td><td>1,285</td><td>812</td><td>58%</td><td>246.9</td><td>162.5</td><td>52%</td><td>192,100</td><td>200,100</td><td>-4%</td></tr><tr><td>South Central</td><td>1,710</td><td>1,691</td><td>1%</td><td>309.5</td><td>297.3</td><td>4%</td><td>181,000</td><td>175,800</td><td>3%</td></tr><tr><td>Southwest</td><td>426</td><td>405</td><td>5%</td><td>76.6</td><td>71.9</td><td>7%</td><td>179,800</td><td>177,500</td><td>1%</td></tr><tr><td>West</td><td>539</td><td>501</td><td>8%</td><td>175.0</td><td>145.6</td><td>20%</td><td>324,700</td><td>290,600</td><td>12%</td></tr><tr><td></td><td>4,854</td><td>4,128</td><td>18%</td><td>$1,036.2</td><td>$850.8</td><td>22%</td><td>$213,500</td><td>$206,100</td><td>4%</td></tr></table>
Sales Order Backlog Our homes in backlog at September 30, 2011 increased 18% from the prior year, with significant increases in our East, Midwest and Southeast regions. The number of homes in backlog in these regions benefited from more active communities and improved third and fourth quarter sales as compared with the same periods of the prior year. Homes Closed and Home Sales Revenue
<table><tr><td></td><td colspan="9">Homes Closed and Home Sales Revenue Fiscal Year Ended September 30,</td></tr><tr><td></td><td colspan="3">Homes Closed</td><td colspan="3">Value (In millions)</td><td colspan="3">Average Selling Price</td></tr><tr><td></td><td>2011</td><td>2010</td><td>%Change</td><td>2011</td><td>2010</td><td>%Change</td><td>2011</td><td>2010</td><td>%Change</td></tr><tr><td>East</td><td>1,932</td><td>2,114</td><td>-9%</td><td>$438.4</td><td>$492.2</td><td>-11%</td><td>$226,900</td><td>$232,800</td><td>-3%</td></tr><tr><td>Midwest</td><td>964</td><td>1,187</td><td>-19%</td><td>261.5</td><td>330.9</td><td>-21%</td><td>271,300</td><td>278,800</td><td>-3%</td></tr><tr><td>Southeast</td><td>3,546</td><td>4,049</td><td>-12%</td><td>691.8</td><td>745.2</td><td>-7%</td><td>195,100</td><td>184,000</td><td>6%</td></tr><tr><td>South Central</td><td>6,150</td><td>8,046</td><td>-24%</td><td>1,080.0</td><td>1,378.8</td><td>-22%</td><td>175,600</td><td>171,400</td><td>2%</td></tr><tr><td>Southwest</td><td>1,263</td><td>1,872</td><td>-33%</td><td>234.8</td><td>329.7</td><td>-29%</td><td>185,900</td><td>176,100</td><td>6%</td></tr><tr><td>West</td><td>2,840</td><td>3,607</td><td>-21%</td><td>835.8</td><td>1,025.5</td><td>-18%</td><td>294,300</td><td>284,300</td><td>4%</td></tr><tr><td></td><td>16,695</td><td>20,875</td><td>-20%</td><td>$3,542.3</td><td>$4,302.3</td><td>-18%</td><td>$212,200</td><td>$206,100</td><td>3%</td></tr></table>
Home Sales Revenue Revenues from home sales decreased 18%, to $3,542.3 million (16,695 homes closed) in 2011 from $4,302.3 million (20,875 homes closed) in 2010. The average selling price of homes closed during 2011 was $212,200, up 3% from the $206,100 average in 2010 which reflected a change in product mix rather than broad price appreciation. During fiscal 2011, home sales revenues decreased in all of our market regions, resulting from decreases in the number of homes closed. The number of homes closed in fiscal 2011 decreased 20% due to decreases in all of our market regions. The federal homebuyer tax credit helped stimulate demand for new homes during fiscal 2010 and following its expiration we experienced a significant decline in demand for our homes that extended into fiscal 2011. D. R. HORTON, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 75 Effective August 1, 2017, the Board of Directors authorized the repurchase of up to $500 million of the Company’s debt securities effective through July 31, 2018. All of the $500 million authorization was remaining at September 30, 2017. Financial Services: The Company’s mortgage subsidiary, DHI Mortgage, has a mortgage repurchase facility that is accounted for as a secured financing. The mortgage repurchase facility provides financing and liquidity to DHI Mortgage by facilitating purchase transactions in which DHI Mortgage transfers eligible loans to the counterparties against the transfer of funds by the counterparties, thereby becoming purchased loans. DHI Mortgage then has the right and obligation to repurchase the purchased loans upon their sale to third-party purchasers in the secondary market or within specified time frames from 45 to 60 days in accordance with the terms of the mortgage repurchase facility. In February 2017, the mortgage repurchase facility was amended to increase its capacity to $600 million and extend its maturity date to February 23, 2018. The capacity of the facility increases, without requiring additional commitments, to $725 million for approximately 30 days at each quarter end and to $800 million for approximately 45 days at fiscal year end. The capacity can also be increased to $1.0 billion subject to the availability of additional commitments. As of September 30, 2017, $540.1 million of mortgage loans held for sale with a collateral value of $520.0 million were pledged under the mortgage repurchase facility. As a result of advance paydowns totaling $100.0 million, DHI Mortgage had an obligation of $420.0 million outstanding under the mortgage repurchase facility at September 30, 2017 at a 3.3% annual interest rate. The mortgage repurchase facility is not guaranteed by D. R. Horton, Inc. or any of the subsidiaries that guarantee the Company’s homebuilding debt. The facility contains financial covenants as to the mortgage subsidiary’s minimum required tangible net worth, its maximum allowable ratio of debt to tangible net worth and its minimum required liquidity. These covenants are measured and reported to the lenders monthly. At September 30, 2017, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facility. In the past, DHI Mortgage has been able to renew or extend its mortgage credit facility at a sufficient capacity and on satisfactory terms prior to its maturity and obtain temporary additional commitments through amendments to the credit facility during periods of higher than normal volumes of mortgages held for sale. The liquidity of the Company’s financial services business depends upon its continued ability to renew and extend the mortgage repurchase facility or to obtain other additional financing in sufficient capacities. NOTE E – CAPITALIZED INTEREST The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the years ended September 30, 2017, 2016 and 2015. |
0.48 | what was the percentage change in pro forma diluted earnings per common share from 2001 to 2002? | are reclassified to contributions in aid of construction. Utility plant funded by advances and contributions is excluded from the rate base. Generally, we depreciate contributed property and amortize contributions in aid of construction at the composite rate of the related property. Some of our subsidiaries do not depreciate contributed property, based on regulatory guidelines. We use our capital resources, including cash, primarily to; (i) fund operating and capital requirements; (ii) pay interest and meet debt maturities; (iii) pay dividends; (iv) fund pension and postretirement welfare obligations; and (v) fund acquisitions. We invest a significant amount of cash on regulated capital projects where we expect to earn a long-term return on investment. Additionally, we operate in rate-regulated environments in which the amount of new investment recovery may be limited, and where such recovery takes place over an extended period of time, as our recovery is subject to regulatory lag. See Item 1—Business—Operating Segments—Regulated Businesses—Economic Regulation and Rate Making Process. We expect to fund future maturities of long-term debt through a combination of external debt and, to the extent available, cash flows from operations. Since we expect our capital investments over the next few years to be greater than or equal to our cash flows from operating activities, we have no plans to reduce debt significantly. If necessary, the Company may delay certain capital investments or other funding requirements or pursue financing from other sources to preserve liquidity, if necessary. In this event, we believe we can rely upon cash flows from operations to meet our obligations and fund our minimum required capital investments for an extended period of time. Cash Flows Provided by Operating Activities Cash flows provided by operating activities primarily result from the sale of water and wastewater services and, due to the seasonality of demand, are generally greater during the third quarter of each fiscal year. Our future cash flows provided by operating activities will be affected by, among other things, economic utility regulation; infrastructure investment; inflation; compliance with environmental, health and safety standards; production costs; customer growth; declining customer usage of water; employee-related costs, including pension funding; weather and seasonality; and overall economic conditions. Cash flows provided by operating activities have been a reliable, steady source of funding, sufficient to meet operating requirements, make our dividend payments and fund a portion of our capital expenditure requirements. We expect to seek access to debt capital markets to meet the balance of our capital expenditure requirements as needed. We also have access to equity capital markets, if needed. Operating cash flows can be negatively affected by changes in our rate regulated environments or changes in our customers’ economic outlook and ability to pay for service in a timely manner. As such, our working capital needs are primarily limited to funding increases in customer accounts receivable and unbilled revenues mainly associated with revenue increases in our Regulated Businesses. We can provide no assurance that our customers’ historical payment pattern will continue in the future. We address cash timing differences through the liquidity funding mechanisms discussed above. The following table provides a summary of the major items affecting our cash flows provided by operating activities:
<table><tr><td></td><td colspan="3">For the Years Ended December 31,</td></tr><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td></td><td colspan="3">(In millions)</td></tr><tr><td>Net income</td><td>$476</td><td>$423</td><td>$369</td></tr><tr><td>Add (less):</td><td></td><td></td><td></td></tr><tr><td>Non-cash activities(a)</td><td>773</td><td>723</td><td>762</td></tr><tr><td>Changes in working capital(b)</td><td>-13</td><td>3</td><td>-137</td></tr><tr><td>Pension and postretirement benefit contributions</td><td>-57</td><td>-52</td><td>-98</td></tr><tr><td>Net cash flows provided by operating activities</td><td>$1,179</td><td>$1,097</td><td>$896</td></tr></table>
Baker Hughes, a GE company Notes to Consolidated and Combined Financial Statements
<table><tr><td>(In millions, except per share amounts)</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Net income (loss)</td><td>$-242</td><td>$334</td><td>$-631</td></tr><tr><td>Less: Net income (loss) attributable to GE O&G pre-merger</td><td>109</td><td>403</td><td>-606</td></tr><tr><td>Less: Net loss attributable to noncontrolling interests</td><td>-278</td><td>-69</td><td>-25</td></tr><tr><td>Net loss attributable to BHGE</td><td>$-73</td><td>$—</td><td>$—</td></tr><tr><td>Weighted average shares outstanding:</td><td></td><td></td><td></td></tr><tr><td>Class A basic & diluted</td><td>427</td><td></td><td></td></tr><tr><td>Net loss per share attributable to common stockholders:</td><td></td><td></td><td></td></tr><tr><td>Class A basic & diluted</td><td>$-0.17</td><td></td><td></td></tr></table>
The allocation of net loss to holders of shares of Class A common stock began following the close of the Transactions on July 3, 2017. Therefore, the earnings per share is Nil for 2016 and 2015. Please refer to "Note 2. Business Acquisition" for proforma earnings per share. As of July 3, 2017, GE, BHGE and BHGE LLC entered into an Exchange Agreement under which GE is entitled to exchange its holding in Class B common stock and units of BHGE LLC for Class A common stock on a one-forone basis (subject to adjustment in accordance with the terms of the Exchange Agreement) or, at the option of BHGE, an amount of cash equal to the aggregate value of the shares of Class A common stock that would have otherwise been received by GE in the exchange. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) attributable to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests associated with the Class B common stock (including any tax impact). For the year ended December 31, 2017, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive. For the year ended December 31, 2017, we excluded outstanding stock options and RSUs from the computation of diluted net income (loss) per share because their effect is antidilutive. Shares of our Class B common stock do not share in earnings or losses of the Company and are not considered in the calculation of basic or diluted earnings per share (EPS). As such, separate presentation of basic and diluted EPS of Class B under the two class method has not been presented. NOTE 14. FINANCIAL INSTRUMENTS RECURRING FAIR VALUE MEASUREMENTS Our assets and liabilities measured at fair value on a recurring basis consists of derivative instruments and investment securities.
<table><tr><td></td><td colspan="4">2017</td><td colspan="4">2016</td></tr><tr><td></td><td>Level 1</td><td>Level 2</td><td>Level 3</td><td>Net Balance</td><td>Level 1</td><td>Level 2</td><td>Level 3</td><td>Net Balance</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>Derivatives</td><td>$—</td><td>$150</td><td>$—</td><td>$150</td><td>$—</td><td>$318</td><td>$—</td><td>$318</td></tr><tr><td>Investment securities</td><td>81</td><td>8</td><td>304</td><td>393</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total assets</td><td>81</td><td>158</td><td>304</td><td>543</td><td>—</td><td>318</td><td>—</td><td>318</td></tr><tr><td>Liabilities</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Derivatives</td><td>—</td><td>-95</td><td>—</td><td>-95</td><td>—</td><td>-375</td><td>—</td><td>-375</td></tr><tr><td>Total liabilities</td><td>$—</td><td>$-95</td><td>$—</td><td>$-95</td><td>$—</td><td>$-375</td><td>$—</td><td>$-375</td></tr></table>
Notes to Consolidated Financial Statements (continued) disclosure of, the issuance of certain types of guarantees. The adoption of FASB Interpretation No.45 did not have a significant impact on the net income or equity of the Company. In January 2003, FASB Interpretation No.46, “Consolidation of Variable Interest Entities, an interpretation of ARB 51,” was issued. The primary objectives of this interpretation, as amended, are to provide guidance on the identification and consolidation of variable interest entities, or VIEs, which are entities for which control is achieved through means other than through voting rights. The Company has completed an analysis of this Interpretation and has determined that it does not have any VIEs.4. Acquisitions Family Health Plan, Inc. Effective January 1, 2004, the Company commenced operations in Ohio through the acquisition from Family Health Plan, Inc. of certain Medicaid-related assets for a purchase price of approximately $6,800. The cost to acquire the Medicaid-related assets will be allocated to the assets acquired and liabilities assumed according to estimated fair values. HMO Blue Texas Effective August 1, 2003, the Company acquired certain Medicaid-related contract rights of HMO Blue Texas in the San Antonio, Texas market for $1,045. The purchase price was allocated to acquired contracts, which are being amortized on a straight-line basis over a period of five years, the expected period of benefit. Group Practice Affiliates During 2003, the Company acquired a 100% ownership interest in Group Practice Affiliates, LLC, a behavioral healthcare services company (63.7% in March 2003 and 36.3% in August 2003). The consolidated financial statements include the results of operations of GPA since March 1, 2003. The Company paid $1,800 for its purchase of GPA. The cost to acquire the ownership interest has been allocated to the assets acquired and liabilities assumed according to estimated fair values and is subject to adjustment when additional information concerning asset and liability valuations are finalized. The preliminary allocation has resulted in goodwill of approximately $3,895. The goodwill is not amortized and is not deductible for tax purposes. Pro forma disclosures related to the acquisition have been excluded as immaterial. ScriptAssist In March 2003, the Company purchased contract and name rights of ScriptAssist, LLC (ScriptAssist), a medication compliance company. The purchase price of $563 was allocated to acquired contracts, which are being amortized on a straight-line basis over a period of five years, the expected period of benefit. The investor group who held membership interests in ScriptAssist included one of the Company’s executive officers. University Health Plans, Inc. On December 1, 2002, the Company purchased 80% of the outstanding capital stock of University Health Plans, Inc. (UHP) in New Jersey. In October 2003, the Company exercised its option to purchase the remaining 20% of the outstanding capital stock. Centene paid a total purchase price of $13,258. The results of operations for UHP are included in the consolidated financial statements since December 1, 2002. The acquisition of UHP resulted in identified intangible assets of $3,800, representing purchased contract rights and provider network. The intangibles are being amortized over a ten-year period. Goodwill of $7,940 is not amortized and is not deductible for tax purposes. Changes during 2003 to the preliminary purchase price allocation primarily consisted of the purchase of the remaining 20% of the outstanding stock and the recognition of intangible assets and related deferred tax liabilities. The following unaudited pro forma information presents the results of operations of Centene and subsidiaries as if the UHP acquisition described above had occurred as of January 1, 2001. These pro forma results may not necessarily reflect the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations.
<table><tr><td></td><td>2002</td><td>2001</td></tr><tr><td>Revenue</td><td>$567,048</td><td>$395,155</td></tr><tr><td>Net earnings</td><td>25,869</td><td>11,573</td></tr><tr><td>Diluted earnings per common share</td><td>1.48</td><td>1.00</td></tr></table>
Texas Universities Health Plan In June 2002, the Company purchased SCHIP contracts in three Texas service areas. The cash purchase price of $595 was recorded as purchased contract rights, which are being amortized on a straight-line basis over five years, the expected period of benefit. Bankers Reserve In March 2002, the Company acquired Bankers Reserve Life Insurance Company of Wisconsin for a cash purchase price of $3,527. The Company allocated the purchase price to net tangible and identifiable intangible assets based on their fair value. Centene allocated $479 to identifiable intangible assets, representing the value assigned to acquired licenses, which are being amortized on a straight-line basis over a M & T BANK CORPORATION AND SUBSIDIARIES Notes to Financial Statements — (Continued) delinquent or foreclosed loans from the trusts by the Company in 2006 or 2005. Certain cash flows between the Company and the trusts were as follows:
<table><tr><td></td><td colspan="2"> Year Ended December 31</td></tr><tr><td></td><td> 2006</td><td> 2005</td></tr><tr><td></td><td colspan="2"> (In thousands)</td></tr><tr><td>Principal and interest payments on retained securities</td><td>$173,207</td><td>$240,211</td></tr><tr><td>Servicing fees received</td><td>2,223</td><td>2,735</td></tr></table>
A summary of the fair values of retained subordinated interests resulting from the Company’s residential mortgage loan securitization activities follows. Although the estimated fair values of the retained subordinated interests were obtained from independent pricing sources, the Company has modeled the sensitivity of such fair values to changes in certain assumptions as summarized in the table below. These calculated sensitivities are hypothetical and actual changes in the fair value may differ significantly from the amounts presented herein. The effect of a variation in a particular assumption on the fair values is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another which may magnify or counteract the sensitivities. The changes in assumptions are presumed to be instantaneous. The hypothetical effect of adverse changes on the Company’s retained capitalized servicing assets at December 31, 2006 is included in note 7. |
2,007 | Which year is Interest rate swaps for Assets the most? | MetLife, Inc. Notes to Consolidated Financial Statements — (Continued) $4.3 billion, of which $1.6 billion is deductible for income tax purposes. Further information on goodwill is described in Note 6. See Note 5 for the VOBA acquired as part of the acquisition and Note 7 for the value of distribution agreements (“VODA”) and the value of customer relationships acquired (“VOCRA”). As part of the integration of Travelers’ operations, management approved and initiated plans to reduce approximately 1,000 domestic and international Travelers positions, which was completed in December 2006. MetLife initially recorded restructuring costs, including severance, relocation and outplacement services of Travelers’ employees, as liabilities assumed in the purchase business combination of $49 million. For the years ended December 31, 2006 and 2005, the liability for restructuring costs was reduced by $4 million and $1 million, respectively, due to a reduction in the estimate of severance benefits to be paid to Travelers employees. The restructuring costs associated with the Travelers acquisition were as follows:
<table><tr><td></td><td colspan="2">Years Ended December 31,</td></tr><tr><td></td><td>2006</td><td>2005</td></tr><tr><td></td><td colspan="2">(In millions)</td></tr><tr><td>Balance at January 1,</td><td>$28</td><td>$—</td></tr><tr><td>Acquisition</td><td>—</td><td>49</td></tr><tr><td>Cash payments</td><td>-24</td><td>-20</td></tr><tr><td>Other reductions</td><td>-4</td><td>-1</td></tr><tr><td>Balance at December 31,</td><td>$—</td><td>$28</td></tr></table>
Other Acquisitions and Dispositions On June 28, 2007, the Company acquired the remaining 50% interest in a joint venture in Hong Kong, MetLife Fubon Limited (“MetLife Fubon”), for $56 million in cash, resulting in MetLife Fubon becoming a consolidated subsidiary of the Company. The transaction was treated as a step acquisition, and at June 30, 2007, total assets and liabilities of MetLife Fubon of $839 million and $735 million, respectively, were included in the Company’s consolidated balance sheet. The Company’s investment for the initial 50% interest in MetLife Fubon was $48 million. The Company used the equity method of accounting for such investment in MetLife Fubon. The Company’s share of the joint venture’s results for the six months ended June 30, 2007, was a loss of $3 million. The fair value of the assets acquired and the liabilities assumed in the step acquisition at June 30, 2007, was $427 million and $371 million, respectively. No additional goodwill was recorded as a part of the step acquisition. As a result of this acquisition, additional VOBA and VODA of $45 million and $5 million, respectively, were recorded and both have a weighted average amortization period of 16 years. Further information on VOBA and VODA is described in Note 5 and Note 7, respectively. On June 1, 2007, the Company completed the sale of its Bermuda insurance subsidiary, MetLife International Insurance, Ltd. (“MLII”), to a third party for $33 million in cash consideration, resulting in a gain upon disposal of $3 million, net of income tax. The net assets of MLII at disposal were $27 million. A liability of $1 million was recorded with respect to a guarantee provided in connection with this disposition. Further information on guarantees is described in Note 16. On September 1, 2005, the Company completed the acquisition of CitiStreet Associates, a division of CitiStreet LLC, which is primarily involved in the distribution of annuity products and retirement plans to the education, healthcare, and not-for-profit markets, for $56 million, of which $2 million was allocated to goodwill and $54 million to other identifiable intangibles, specifically the value of customer relationships acquired, which have a weighted average amortization period of 16 years. CitiStreet Associates was integrated with MetLife Resources, a focused distribution channel of MetLife, which is dedicated to provide retirement plans and financial services to the same markets. Further information on goodwill and VOCRA is described in Note 6 and Note 7, respectively. See Note 23 for information on the disposition of the annuities and pension businesses of MetLife Insurance Limited (“MetLife Australia”), P. T. Sejahtera (“MetLife Indonesia”) and SSRM Holdings, Inc. (“SSRM”). See Note 25 for information on the Company’s acquisitions subsequent to December 31, 2007. investment income attributable to higher yields was primarily due to higher returns on fixed maturity securities, other limited partnership interests excluding hedge funds, equity securities and improved securities lending results, partially offset by lower returns on real estate joint ventures, cash, cash equivalents and short-term investments, hedge funds and mortgage loans. Management anticipates that investment income and the related yields on other limited partnership interests may decline during 2008 due to increased volatility in the equity and credit markets during 2007. Interest Margin Interest margin, which represents the difference between interest earned and interest credited to policyholder account balances increased in the Institutional and Individual segments for the year ended December 31, 2007 as compared to the prior year. Interest earned approximates net investment income on investable assets attributed to the segment with minor adjustments related to the consolidation of certain separate accounts and other minor non-policyholder elements. Interest credited is the amount attributed to insurance products, recorded in policyholder benefits and claims, and the amount credited to policyholder account balances for investment-type products, recorded in interest credited to policyholder account balances. Interest credited on insurance products reflects the current year impact of the interest rate assumptions established at issuance or acquisition. Interest credited to policyholder account balances is subject to contractual terms, including some minimum guarantees. This tends to move gradually over time to reflect market interest rate movements and may reflect actions by management to respond to competitive pressures and, therefore, generally does not introduce volatility in expense. Net Investment Gains (Losses) Net investment losses decreased by $644 million to a loss of $738 million for the year ended December 31, 2007 from a loss of $1,382 million for the comparable 2006 period. The decrease in net investment losses was primarily due to a reduction of losses on fixed maturity securities resulting principally from the 2006 portfolio repositioning in a rising interest rate environment, increased gains from asset-based foreign currency transactions due to a decline in the U. S. dollar year over year against several major currencies and increased gains on equity securities, partially offset by increased losses from the mark-to-market on derivatives and reduced gains on real estate and real estate joint ventures. Underwriting Underwriting results are generally the difference between the portion of premium and fee income intended to cover mortality, morbidity or other insurance costs, less claims incurred, and the change in insurance-related liabilities. Underwriting results are significantly influenced by mortality, morbidity or other insurance-related experience trends, as well as the reinsurance activity related to certain blocks of business. Consequently, results can fluctuate from period to period. Underwriting results, excluding catastrophes, in the Auto & Home segment were less favorable for the year ended December 31, 2007, as the combined ratio, excluding catastrophes, increased to 86.3% from 82.8% for the year ended December 31, 2006. Underwriting results were favorable in the non-medical health & other, group life and retirement & savings businesses in the Institutional segment. Underwriting results were unfavorable in the life products in the Individual segment. Other Expenses Other expenses increased by $890 million, or 8%, to $11,673 million for the year ended December 31, 2007 from $10,783 million for the comparable 2006 period. The following table provides the change from the prior year in other expenses by segment:
<table><tr><td></td><td></td><td>% of Total</td></tr><tr><td></td><td>$ Change (In millions)</td><td>$ Change</td></tr><tr><td>Individual</td><td>$512</td><td>57%</td></tr><tr><td>International</td><td>219</td><td>25</td></tr><tr><td>Institutional</td><td>124</td><td>14</td></tr><tr><td>Corporate & Other</td><td>51</td><td>6</td></tr><tr><td>Auto & Home</td><td>-15</td><td>-2</td></tr><tr><td>Reinsurance</td><td>-1</td><td>—</td></tr><tr><td>Total change</td><td>$890</td><td>100%</td></tr></table>
The Individual segment contributed to the year over year increase in other expenses primarily due to higher DAC amortization, higher expenses associated with business growth, information technology and other general expenses, the impact of revisions to certain liabilities, including pension and postretirement liabilities and policyholder liabilities in the prior year, and a write-off of a receivable in the current year. The International segment contributed to the year over year increase in other expenses primarily due to the business growth commensurate with the increase in revenues discussed above. It was driven by the following factors: ? Argentina’s other expenses increased primarily due to a liability for servicing obligations that was established as a result of pension reform, an increase in commissions on bancassurance business, an increase in retention incentives related to pension reform, and the impact of management’s update of DAC assumptions as a result of pension reform and growth, partially offset by a lower increase in liabilities due to inflation and exchange rate indexing. ? South Korea’s other expenses increased primarily due to the favorable impact in DAC amortization associated with the implementation of a more refined reserve valuation system in the prior year, additional expenses associated with growth and infrastructure initiatives, as well as business growth and higher bank insurance fees, partially offset by a decrease in DAC amortization. ? Mexico’s other expenses increased due to higher expenses related to business growth and the favorable impact in the prior year of liabilities that were reduced, offset by a decrease in DAC amortization resulting from management’s update of assumptions used to determine estimated gross profits in both the current and prior years and a decrease in liabilities based on a review of outstanding remittances. The following table provides the change in income from continuing operations by segment, excluding Travelers, and certain transactions as mentioned above:
<table><tr><td></td><td></td><td>% of Total</td></tr><tr><td></td><td>$ Change (In millions)</td><td>$ Change</td></tr><tr><td>Institutional</td><td>$-319</td><td>-140%</td></tr><tr><td>Individual</td><td>-68</td><td>-30</td></tr><tr><td>International</td><td>-33</td><td>-15</td></tr><tr><td>Corporate & Other</td><td>-25</td><td>-11</td></tr><tr><td>Auto & Home</td><td>192</td><td>85</td></tr><tr><td>Reinsurance</td><td>26</td><td>11</td></tr><tr><td>Total change, net of income tax</td><td>$-227</td><td>-100%</td></tr></table>
The Institutional segment’s income from continuing operations decreased primarily due to an increase in net investment losses, a decline in interest margins, an increase in operating expenses, which included a charge associated with costs related to the sale of certain small market recordkeeping businesses, a charge associated with non-deferrable LTC commissions expense and a charge associated with costs related to a previously announced regulatory settlement, partially offset by the impact of integration costs in the prior year and favorable underwriting results. The Individual segment’s income from continuing operations decreased as a result of an increase in net investment losses, a decline in interest margins, higher expenses and annuity benefits, as well as increases in interest credited to policyholder account balances and policyholder dividends. These decreases were partially offset by increased fee income related to the growth in separate account products, favorable underwriting results in life products, lower DAC amortization and a decrease in the closed block-related policyholder dividend obligation. Income from continuing operations in Corporate & Other decreased primarily due to higher investment losses, higher interest expense on debt, corporate support expenses, interest credited to bankholder deposits and legal-related costs, partially offset by an increase in tax benefits, an increase in net investment income, lower integration costs and an increase in other revenues. The decrease in income from continuing operations in the International segment was primarily attributable to the following factors: ? Taiwan had a decrease due to a loss recognition adjustment and a restructuring charge, partially offset by reserve refinements associated with the implementation of a new valuation system. ? Income from continuing operations decreased in Canada primarily due to the realignment of economic capital in the prior year. ? Income from continuing operations in Mexico decreased primarily due to an increase in amortization of DAC, higher operating expenses, the net impact of an adjustment to the liability for experience refunds on a block of business, a decrease in various onetime other revenue items in both periods, as well as an increase in income tax expense due to a tax benefit realized in the prior year. These decreases in Mexico were partially offset by a decrease in certain policyholder liabilities caused by a decrease in unrealized investment gains on invested assets supporting those liabilities relative to the prior year, a decrease in policyholder benefits associated with a large group policy that was not renewed by the policyholder, a benefit in the current year from the release of liabilities for pending claims that were determined to be invalid following a review, and the unfavorable impact in the prior year of contingent liabilities. ? In addition, a decrease in Brazil was primarily due to an increase in policyholder benefits and claims related to an increase in future policyholder benefit liabilities on specific blocks of business and an increase in litigation liabilities, as well as adverse claim experience in the current year. ? The home office recorded higher infrastructure expenditures in support of segment growth, as well as a contingent tax liability. This was offset by a reduction in the amount charged for economic capital. ? Results of the Company’s investment in Japan decreased primarily due to variability in the hedging program. ? In addition, expenses related to the Company’s start-up operations in Ireland reduced income from continuing operations. A valuation allowance was established against the deferred tax benefit resulting from the Ireland losses. ? Partially offsetting these decreases in income from continuing operations were increases in Chile and the United Kingdom due to continued growth of the in-force business. ? In addition, an increase occurred in Australia due to reserve strengthening on a block of business in the prior year. ? South Korea’s income from continuing operations increased due to growth in the in-force business and the implementation of a more refined reserve valuation system. ? Argentina’s income from continuing operations increased due to higher net investment income resulting from capital contributions, the release of liabilities for pending claims that were determined to be invalid following a review, the favorable impact of foreign currency exchange rates and inflation rates on certain contingent liabilities, the utilization of net operating losses for which a valuation allowance had been previously established, and an increase in the prior year period of a deferred income tax valuation allowance, as well as business growth. Changes in foreign currency exchange rates also contributed to the increase. Partially offsetting the decreases in income from continuing operations was an increase in the Auto & Home segment primarily due to a loss in the third quarter of 2005 related to Hurricane Katrina, favorable development of prior year loss reserves, improvement in noncatastrophe loss experience and a reduction in loss adjustment expenses. These increases were partially offset by higher catastrophe losses, excluding Hurricanes Katrina and Wilma, in the current year period, and decreases in net earned premiums, other revenues, and net investment income, as well as an increase in other expenses. Income from continuing operations in the Reinsurance segment increased primarily due to added business in-force from facultative and automatic treaties and renewal premiums on existing blocks of business in the U. S. and international operations, an increase in net investment income due to growth in the invested asset base and an increase in other revenues. These items were partially offset by unfavorable mortality experience, an increase in liabilities associated with Reinsurance Group of America, Incorporated’s (“RGA”) Argentine The following table presents the notional amount and current market or fair value of derivative financial instruments held at:
<table><tr><td></td><td colspan="3"> December 31, 2007</td><td colspan="3"> December 31, 2006</td></tr><tr><td></td><td> Notional </td><td colspan="2"> Current Market or Fair Value</td><td> Notional </td><td colspan="2"> Current Market or Fair Value</td></tr><tr><td></td><td> Amount</td><td> Assets</td><td> Liabilities</td><td> Amount</td><td> Assets</td><td> Liabilities</td></tr><tr><td></td><td colspan="6"> (In millions)</td></tr><tr><td>Interest rate swaps</td><td>$62,519</td><td>$785</td><td>$768</td><td>$27,148</td><td>$639</td><td>$150</td></tr><tr><td>Interest rate floors</td><td>48,937</td><td>621</td><td>—</td><td>37,437</td><td>279</td><td>—</td></tr><tr><td>Interest rate caps</td><td>45,498</td><td>50</td><td>—</td><td>26,468</td><td>125</td><td>—</td></tr><tr><td>Financial futures</td><td>10,817</td><td>89</td><td>57</td><td>8,432</td><td>64</td><td>39</td></tr><tr><td>Foreign currency swaps</td><td>21,399</td><td>1,480</td><td>1,724</td><td>19,627</td><td>986</td><td>1,174</td></tr><tr><td>Foreign currency forwards</td><td>4,185</td><td>76</td><td>16</td><td>2,934</td><td>31</td><td>27</td></tr><tr><td>Options</td><td>2,043</td><td>713</td><td>1</td><td>587</td><td>306</td><td>8</td></tr><tr><td>Financial forwards</td><td>4,600</td><td>122</td><td>2</td><td>3,800</td><td>12</td><td>40</td></tr><tr><td>Credit default swaps</td><td>6,850</td><td>58</td><td>35</td><td>6,357</td><td>5</td><td>21</td></tr><tr><td>Synthetic GICs</td><td>3,670</td><td>—</td><td>—</td><td>3,739</td><td>—</td><td>—</td></tr><tr><td>Other</td><td>250</td><td>43</td><td>—</td><td>250</td><td>56</td><td>—</td></tr><tr><td>Total</td><td>$210,768</td><td>$4,037</td><td>$2,603</td><td>$136,779</td><td>$2,503</td><td>$1,459</td></tr></table>
The above table does not include notional amounts for equity futures, equity variance swaps, and equity options. At December 31, 2007 and 2006, the Company owned 4,658 and 2,749 equity futures, respectively. Fair values of equity futures are included in financial futures in the preceding table. At December 31, 2007 and 2006, the Company owned 695,485 and 225,000 equity variance swaps, respectively. Fair values of equity variance swaps are included in financial forwards in the preceding table. At December 31, 2007 and 2006, the Company owned 77,374,937 and 74,864,483 equity options, respectively. Fair values of equity options are included in options in the preceding table. Credit Risk. The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. Generally, the current credit exposure of the Company’s derivative contracts is limited to the fair value at the reporting date. The credit exposure of the Company’s derivative transactions is represented by the fair value of contracts with a net positive fair value at the reporting date. The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Because exchange traded futures are effected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments. The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with its derivative instruments. As of December 31, 2007 and 2006, the Company was obligated to return cash collateral under its control of $833 million and $428 million, respectively. This unrestricted cash collateral is included in cash and cash equivalents and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. As of December 31, 2007 and 2006, the Company had also accepted collateral consisting of various securities with a fair market value of $678 million and $453 million, respectively, which are held in separate custodial accounts. The Company is permitted by contract to sell or repledge this collateral, but as of December 31, 2007 and 2006, none of the collateral had been sold or repledged. As of December 31, 2007 and 2006, the Company provided collateral of $162 million and $80 million, respectively, which is included in fixed maturity securities in the consolidated balance sheets. In addition, the Company has exchange traded futures, which require the pledging of collateral. As of December 31, 2007 and 2006, the Company pledged collateral of $167 million and $105 million, respectively, which is included in fixed maturity securities. The counterparties are permitted by contract to sell or repledge this collateral. Additionally, in October 2013, our board of directors declared a quarterly cash dividend of $0.40 per share of class A common stock (determined in the case of class B and C common stock, on an as-converted basis) payable on December 3, 2013, to holders of record as of November 15, 2013 of our class A, B and C common stock. Subject to legally available funds, we expect to continue paying quarterly cash dividends on our outstanding class A, B and C common stock in the future. However, the declaration and payment of future dividends is at the sole discretion of our board of directors after taking into account various factors, including, but not limited to, our financial condition, settlement indemnifications, operating results, available cash and current and anticipated cash needs. Issuer Purchases of Equity Securities The table below sets forth the information with respect to purchases of the Company’s common stock made by or on behalf of the Company during the quarter ended September 30, 2013. |
54,924 | What's the total amount of Securities available for sale, Trading securities, Spot commodities and Trading assets in Carrying Value in 2006? (in millions) | American International Group, Inc. and Subsidiaries Notes to Consolidated Financial Statements Continued 13. Fair Value of Financial Instruments Continued The carrying values and fair values of AIG’s financial instruments at December 31, 2006 and 2005 were as follows:
<table><tr><td></td><td colspan="2"> 2006</td><td colspan="2">2005</td></tr><tr><td><i>(in millions)</i></td><td>Carrying Value<sup>(a)</sup></td><td>Fair Value</td><td>Carrying Value<sup>(a)</sup></td><td>Fair Value</td></tr><tr><td>Assets:</td><td></td><td></td><td></td><td></td></tr><tr><td>Fixed maturities</td><td>$417,865</td><td>$418,582</td><td>$385,680</td><td>$386,199</td></tr><tr><td>Equity securities</td><td>30,222</td><td>30,222</td><td>23,588</td><td>23,588</td></tr><tr><td>Mortgage loans on real estate, policy and collateral loans</td><td>28,418</td><td>28,655</td><td>24,909</td><td>26,352</td></tr><tr><td>Securities available for sale</td><td>47,205</td><td>47,205</td><td>37,511</td><td>37,511</td></tr><tr><td>Trading securities</td><td>5,031</td><td>5,031</td><td>6,499</td><td>6,499</td></tr><tr><td>Spot commodities</td><td>220</td><td>220</td><td>92</td><td>96</td></tr><tr><td>Unrealized gain on swaps, options and forward transactions</td><td>19,252</td><td>19,252</td><td>18,695</td><td>18,695</td></tr><tr><td>Trading assets</td><td>2,468</td><td>2,468</td><td>1,204</td><td>1,204</td></tr><tr><td>Securities purchased under agreements to resell</td><td>33,702</td><td>33,702</td><td>14,547</td><td>14,547</td></tr><tr><td>Finance receivables, net of allowance</td><td>29,573</td><td>26,712</td><td>27,995</td><td>27,528</td></tr><tr><td>Securities lending collateral</td><td>69,306</td><td>69,306</td><td>59,471</td><td>59,471</td></tr><tr><td>Other invested assets<sup>(b)</sup></td><td>40,330</td><td>40,637</td><td>29,186</td><td>29,408</td></tr><tr><td>Short-term investments</td><td>25,249</td><td>25,249</td><td>15,342</td><td>15,342</td></tr><tr><td>Cash</td><td>1,590</td><td>1,590</td><td>1,897</td><td>1,897</td></tr><tr><td>Liabilities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Policyholders’ contract deposits</td><td>244,658</td><td>239,964</td><td>227,027</td><td>223,244</td></tr><tr><td>Borrowings under obligations of guaranteed investment agreements</td><td>20,664</td><td>20,684</td><td>20,811</td><td>22,373</td></tr><tr><td>Securities sold under agreements to repurchase</td><td>22,710</td><td>22,710</td><td>11,047</td><td>11,047</td></tr><tr><td>Trading liabilities</td><td>3,141</td><td>3,141</td><td>2,546</td><td>2,546</td></tr><tr><td>Hybrid financial instrument liabilities</td><td>8,856</td><td>8,856</td><td>—</td><td>—</td></tr><tr><td>Securities and spot commodities sold but not yet purchased</td><td>4,076</td><td>4,076</td><td>5,975</td><td>5,975</td></tr><tr><td>Unrealized loss on swaps, options and forward transactions</td><td>11,401</td><td>11,401</td><td>12,740</td><td>12,740</td></tr><tr><td>Trust deposits and deposits due to banks and other depositors</td><td>5,249</td><td>5,261</td><td>4,877</td><td>5,032</td></tr><tr><td>Commercial paper</td><td>13,029</td><td>13,029</td><td>9,208</td><td>9,208</td></tr><tr><td>Notes, bonds, loans and mortgages payable</td><td>104,690</td><td>106,494</td><td>78,439</td><td>79,518</td></tr><tr><td>Securities lending payable</td><td>70,198</td><td>70,198</td><td>60,409</td><td>60,409</td></tr></table>
(a) The carrying value of all other financial instruments approximates fair value. (b) Excludes aircraft asset investments held by non-Financial Services subsidiaries.14. Stock Compensation Plans At December 31, 2006, AIG employees could be awarded compensation pursuant to six different stock-based compensation plan arrangements: (i) AIG 1999 Stock Option Plan, as amended (1999 Plan); (ii) AIG 1996 Employee Stock Purchase Plan, as amended (1996 Plan); (iii) AIG 2002 Stock Incentive Plan, as amended (2002 Plan) under which AIG has issued time-vested restricted stock units (RSUs) and performance restricted stock units (performance RSUs); (iv) SICO’s Deferred Compensation Pro?t Participation Plans (SICO Plans); (v) AIG’s 2005-2006 Deferred Compensation Pro?t Participation Plan (AIG DCPPP) and (vi) the AIG Partners Plan. The AIG DCPPP was adopted as a replacement for the SICO Plans for the 2005-2006 period, and the AIG Partners Plan replaces the AIG DCPPP. Stock-based compensation earned under the AIG DCPPP and the AIG Partners Plan is issued as awards under the 2002 Plan. AIG currently settles share option exercises and other share awards to participants through the issuance of shares it has previously acquired and holds in its treasury account, except for share awards made by SICO, which are settled by SICO. At December 31, 2006, AIG’s non-employee directors received stock-based compensation in two forms, options granted pursuant to the 1999 Plan and grants of AIG common stock with delivery deferred until retirement from the Board, pursuant to the AIG Director Stock Plan, which was approved by the shareholders at the 2004 Annual Meeting of Shareholders. From January 1, 2003 through December 31, 2005, AIG accounted for share-based payment transactions with employees under FAS No.123, ‘‘Accounting for Stock-Based Compensation. ’’Share-based employee compensation expense from option awards was not recognized in the statement of income in prior periods. Effective January 1, 2006, AIG adopted the fair value recognition provisions of FAS 123R. FAS 123R requires that companies use a fair value method to value share-based payments and recognize the related compensation expense in net earnings. AIG adopted FAS 123R using the modi?ed prospective application method, and accordingly, ?nancial statement amounts for the prior periods presented have not been restated to re?ect the fair value method of expensing share-based compensation under FAS 123R. The modi?ed prospective application method provides for the recogni- tion of the fair value with respect to share-based compensation American International Group, Inc. , and Subsidiaries Notes to Consolidated Financial Statements — (Continued) AIG maintains a shelf registration statement in Japan, providing for the issuance of up to Japanese Yen 300 billion principal amount of senior notes, of which the equivalent of $562 million was outstanding at December 31, 2008. (iii) Junior subordinated debt: During 2007 and 2008, AIG issued an aggregate of $12.5 billion of junior subordinated debentures denominated in U. S. dollars, British Pounds and Euros in eight series of securities. In connection with each series of junior subordinated debentures, AIG entered into a Replacement Capital Covenant (RCC) for the benefit of the holders of AIG’s 6.25 percent senior notes due 2036. The RCCs provide that AIG will not repay, redeem, or purchase the applicable series of junior subordinated debentures on or before a specified date, unless AIG has received qualifying proceeds from the sale of replacement capital securities. In May 2008, AIG raised a total of approximately $20 billion through the sale of (i) 196,710,525 shares of AIG common stock in a public offering at a price per share of $38; (ii) 78.4 million Equity Units in a public offering at a price per unit of $75; and (iii) $6.9 billion in unregistered offerings of junior subordinated debentures in three series. The Equity Units and junior subordinated debentures receive hybrid equity treatment from the major rating agencies under their current policies but are recorded as long-term debt on the consolidated balance sheet. The Equity Units consist of an ownership interest in AIG junior subordinated debentures and a stock purchase contract obligating the holder of an equity unit to purchase, and obligating AIG to sell, a variable number of shares of AIG common stock on three dates in 2011 (a minimum of 128,944,480 shares and a maximum of 154,738,080 shares, subject to antidilution adjustments). AIGFP Borrowings under obligations of guaranteed investment agreements: Borrowings under obligations of GIAs, which are guaranteed by AIG, are recorded at fair value. Obligations may be called at various times prior to maturity at the option of the counterparty. Interest rates on these borrowings are primarily fixed, vary by maturity, and range up to 9.8 percent. At December 31, 2008, the fair value of securities pledged as collateral with respect to these obligations approximated $8.4 billion. AIGFP’s debt, excluding GIAs, outstanding are as follows:
<table><tr><td> At December 31, 2008</td><td></td><td> Range of </td><td rowspan="2"> U.S. Dollar Carrying Value (Dollars in millions)</td></tr><tr><td> Range of Maturities</td><td> Currency</td><td> Interest Rates</td></tr><tr><td>2009-2035</td><td>U.S. dollar</td><td>0.01-8.25%</td><td>$4,167</td></tr><tr><td>2009-2047</td><td>Euro</td><td>1.59-7.65</td><td>2,866</td></tr><tr><td>2009-2023</td><td>Japanese yen</td><td>0.01-2.50</td><td>2,205</td></tr><tr><td>2009-2015</td><td>Swiss franc</td><td>0.25-2.79</td><td>112</td></tr><tr><td>2009-2015</td><td>Australian dollar</td><td>0.01-2.65</td><td>107</td></tr><tr><td>2009-2012</td><td>Other</td><td>0.01-7.73</td><td>81</td></tr><tr><td>Total</td><td></td><td></td><td>$9,538</td></tr></table>
AIGFP economically hedges its notes and bonds. AIG guarantees all of AIGFP’s debt. Hybrid financial instrument liabilities: AIGFP’s notes and bonds include structured debt instruments whose payment terms are linked to one or more financial or other indices (such as an equity index or commodity index or another measure that is not considered to be clearly and closely related to the debt instrument). These notes contain embedded derivatives that otherwise would be required to be accounted for separately under FAS 133. Upon AIG’s early adoption of FAS 155, AIGFP elected the fair value option for these notes. The notes that are accounted for using the fair value option are reported separately under hybrid financial instrument liabilities at fair value. ITEM 7 / RESULTS OF OPERATIONS / CONSUMER INSURANCE Total net flows for Retirement decreased in 2014 compared to 2013, as higher surrenders and withdrawals in 2014, primarily in the Group Retirement and Retail Mutual Fund product lines, resulted in a significant decrease in net flows compared to 2013. Net flows for Retirement increased in 2013 compared to 2012, primarily due to the increase in premiums and deposits, partially offset by higher surrenders in Group Retirement and Retail Mutual Funds. See below for additional discussion of each product line. Premiums and Deposits and Net Flows by Product Line A discussion of the significant variances in premiums and deposits and net flows for each product line follows: Fixed Annuities deposits increased in 2014 compared to 2013 due to modest increases in interest rates and steepening of the yield curve in the first half of 2014, compared to lower rates in the prior year, particularly in the first half of 2013. The increase in Fixed Annuities deposits in 2013 compared to 2012 was due to the increase in market interest rates in the second half of 2013. Fixed Annuities net flows continued to be negative, but improved slightly in 2014 compared to 2013, and improved significantly in 2013 compared to 2012, primarily due to the increased deposits. Retirement Income Solutions premiums and deposits and net flows increased significantly in 2014 compared to 2013, and in 2013 compared to 2012, reflecting a continued high volume of variable and index annuity sales, which have benefitted from consumer demand for retirement products with guaranteed benefit features, product enhancements, expanded distribution and a more favorable competitive environment. The improvement in the surrender rate (see Surrender Rates below) was primarily due to the significant growth in account value driven by the high volume of sales, which has increased the proportion of business that is within the surrender charge period. Retail Mutual Fund deposits and net flows decreased in 2014 compared to 2013 and increased in 2013 compared to 2012. These variances were primarily driven by activity in the Focused Dividend Strategy Fund, which had record sales in 2013. In 2014, the relative performance of the fund declined, putting pressure on sales and withdrawal activity. Group Retirement net flows decreased in 2014 compared to 2013, primarily due to higher group surrender activity, as well as lower premiums and deposits. The increase in surrenders and surrender rate for 2014 compared to 2013 included large group surrenders of approximately $2.7 billion, but reserves of this product line grew in 2014 compared to 2013, and the 2014 surrender activity is not expected to have a significant impact on pre-tax operating income in 2015. The large group market has become increasingly competitive and has been impacted by the consolidation of healthcare providers and other employers in our target markets. This trend of heightened competition is expected to continue in 2015 as plan sponsors perform reviews of existing retirement plan relationships. The decrease in Group Retirement net flows in 2013 compared to 2012 was primarily a result of higher surrenders of individual participants as well as large group surrenders. Surrender Rates The following table presents reserves for annuity product lines by surrender charge category:
<table><tr><td> At December 31,</td><td rowspan="2">2014 Group Retirement Products (a)</td><td colspan="2"></td><td rowspan="2">2013 Group Retirement Products (a)</td><td colspan="2"></td></tr><tr><td><i>(in millions)</i></td><td>Fixed Annuities</td><td>Retirement Income Solutions</td><td>Fixed Annuities</td><td>Retirement Income Solutions</td></tr><tr><td>No surrender charge<sup>(b)</sup></td><td>$61,751</td><td>$34,396</td><td>$1,871</td><td>$60,962</td><td>$30,906</td><td>$2,065</td></tr><tr><td>0% - 2%</td><td>1,648</td><td>2,736</td><td>17,070</td><td>1,508</td><td>2,261</td><td>16,839</td></tr><tr><td>Greater than 2% - 4%</td><td>1,657</td><td>2,842</td><td>4,254</td><td>1,967</td><td>4,349</td><td>2,734</td></tr><tr><td>Greater than 4%</td><td>5,793</td><td>12,754</td><td>26,165</td><td>5,719</td><td>16,895</td><td>19,039</td></tr><tr><td>Non-surrenderable</td><td>770</td><td>3,464</td><td>151</td><td>315</td><td>2,758</td><td>67</td></tr><tr><td>Total reserves</td><td>$71,619</td><td>$56,192</td><td>$49,511</td><td>$70,471</td><td>$57,169</td><td>$40,744</td></tr></table>
(a) Excludes mutual fund assets under management of $14.6 billion and $15.1 billion at December 31, 2014 and 2013, respectively. (b) Group Retirement Products in this category include reserves of approximately $6.2 billion at both December 31, 2014 and 2013 that are subject to 20 percent annual withdrawal limitations. ITEM 5 | Market for Registrant?s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 AIG | 2017 Form 10-K As of December 31, 2017, approximately $2.3 billion remained under our share repurchase authorization. We did not repurchase any shares of AIG Common Stock from January 1, 2018 to February 8, 2018. Shares may be repurchased from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise (including through the purchase of warrants). Certain of our share repurchases have been and may from time to time be effected through Exchange Act Rule 10b5-1 repurchase plans. The timing of any future share repurchases will depend on market conditions, our business and strategic plans, financial condition, results of operations, liquidity and other factors. For additional information on our share purchases see Note 17 to the Consolidated Financial Statements. Common Stock Performance Graph The following Performance Graph compares the cumulative total shareholder return on AIG Common Stock for a five-year period (December 31, 2012 to December 31, 2017) with the cumulative total return of the S&P?s 500 stock index (which includes AIG), the S&P Property and Casualty Insurance Index (S&P P&C Index) and the S&P Life and Health Insurance Index (S&P L&H Index). Value of $100 Invested on December 31, 2012 (All $ as of December 31st) |
0.00699 | What is the ratio of Operating lease obligations to Total contractual obligations in 1-3 years? | Revenues N&SS revenues decreased 1% in 2008 and 2% in 2007. The decrease of $137 million in 2008 is primarily due to decreased revenues in FCS, Proprietary and satellite programs partially offset by increased revenues in the SBInet program. The decrease of $292 million in 2007 was primarily due to the exclusion of government Delta volume, now a component of our equity investment in ULA and lower FCS volume, partially offset by increased volume on SBInet and several satellite programs. Delta launch and new-build satellite deliveries were as follows:
<table><tr><td>Years ended December 31,</td><td> 2008</td><td>2007</td><td>2006</td></tr><tr><td>Delta II Commercial</td><td> 2</td><td>3</td><td></td></tr><tr><td>Delta II Government</td><td></td><td></td><td>2</td></tr><tr><td>Delta IV Government</td><td></td><td></td><td>3</td></tr><tr><td>Satellites</td><td> 1</td><td>4</td><td>4</td></tr></table>
Delta government launches are excluded from our deliveries after December 1, 2006 due to the formation of ULA. Operating Earnings N&SS operating earnings increased by $171 million in 2008 was primarily due to increased earnings from our investment in ULA. The decrease in 2007 was due to lower earnings on FCS and several satellite programs. These decreases were partially offset by higher award fees on GMD and a $44 million gain on sale of a property in Anaheim. N&SS operating earnings include equity earnings of $73 million, $85 million and $71 million from the United Space Alliance joint venture in 2008, 2007, and 2006, respectively and equity earnings of $105 million, a loss of $11 million and equity earnings of $5 million from the ULA joint venture in 2008, 2007 and 2006, respectively. The ULA equity earnings and loss amounts are net of the basis difference amortization. Research and Development The N&SS research and development funding remains focused on the development of communications, command and control, computers, intelligence, surveillance and reconnaissance systems (C4ISR); communications and command and control (C3) capabilities that support a network-enabled architecture approach for our various government customers. We are investing in communications capabilities to enable connectivity between existing air/ground platforms, increase communications availability and bandwidth through more robust space systems, and leverage innovative communications concepts. Key programs in this area include JTRS, FCS, Global Positioning System, Tracking and Data Relay Satellite, Ares 1 Crew Launch Vehicle and GMD. Investments were also made to support concepts that may lead to the development of next-generation space intelligence systems. Along with increased funding to support these areas of architecture and network-enabled capabilities development, we also maintained our investment levels in global missile defense and advanced missile defense concepts and technologies. Backlog N&SS total backlog decreased by 12% in 2008 compared with 2007 primarily due to revenues recognized on multi-year orders received in prior years on FCS, GMD and C3 programs, partially offset by an increase in the International Space Station program. Total backlog decreased by 7% in 2007 compared with 2006 due to revenues recognized on FCS and Proprietary programs, partially offset by an increase in Space Exploration programs. Additional Considerations Items which could have a future impact on N&SS operations include the following: United Launch Alliance On December 1, 2006, we completed the transaction with Lockheed Martin Corporation (Lockheed) to create a 50/50 joint venture named United Launch Alliance L. L. C. (ULA). ULA combines the production, engineering, test and launch operations associated with U. S. government launches of Boeing Delta and Lockheed Atlas rockets. In connection with the transaction, billion of unused borrowing on revolving credit line agreements. We anticipate that these credit lines will primarily serve as backup liquidity to support our general corporate borrowing needs. Financing commitments totaled $18.1 billion and $15.9 billion as of December 31, 2012 and 2011. We anticipate that we will not be required to fund a significant portion of our financing commitments as we continue to work with third party financiers to provide alternative financing to customers. Historically, we have not been required to fund significant amounts of outstanding commitments. However, there can be no assurances that we will not be required to fund greater amounts than historically required. In the event we require additional funding to support strategic business opportunities, our commercial aircraft financing commitments, unfavorable resolution of litigation or other loss contingencies, or other business requirements, we expect to meet increased funding requirements by issuing commercial paper or term debt. We believe our ability to access external capital resources should be sufficient to satisfy existing short-term and long-term commitments and plans, and also to provide adequate financial flexibility to take advantage of potential strategic business opportunities should they arise within the next year. However, there can be no assurance of the cost or availability of future borrowings, if any, under our commercial paper program, in the debt markets or our credit facilities. At December 31, 2012 and 2011, our pension plans were $19.7 billion and $16.6 billion underfunded as measured under GAAP. On an ERISA basis our plans are more than 100% funded at December 31, 2012 with minimal required contributions in 2013. We expect to make discretionary contributions to our plans of approximately $1.5 billion in 2013. We may be required to make higher contributions to our pension plans in future years. As of December 31, 2012, we were in compliance with the covenants for our debt and credit facilities. The most restrictive covenants include a limitation on mortgage debt and sale and leaseback transactions as a percentage of consolidated net tangible assets (as defined in the credit agreements), and a limitation on consolidated debt as a percentage of total capital (as defined). When considering debt covenants, we continue to have substantial borrowing capacity. Contractual Obligations The following table summarizes our known obligations to make future payments pursuant to certain contracts as of December 31, 2012, and the estimated timing thereof.
<table><tr><td>(Dollars in millions)</td><td>Total</td><td>Lessthan 1year</td><td>1-3years</td><td>3-5years</td><td>After 5years</td></tr><tr><td>Long-term debt (including current portion)</td><td>$10,251</td><td>$1,340</td><td>$2,147</td><td>$1,095</td><td>$5,669</td></tr><tr><td>Interest on debt<sup>-1</sup></td><td>6,177</td><td>510</td><td>864</td><td>749</td><td>4,054</td></tr><tr><td>Pension and other postretirement cash requirements</td><td>25,558</td><td>579</td><td>1,244</td><td>7,025</td><td>16,710</td></tr><tr><td>Capital lease obligations</td><td>184</td><td>102</td><td>78</td><td>4</td><td></td></tr><tr><td>Operating lease obligations</td><td>1,405</td><td>218</td><td>334</td><td>209</td><td>644</td></tr><tr><td>Purchase obligations not recorded on the Consolidated Statements of Financial Position</td><td>118,002</td><td>44,472</td><td>41,838</td><td>18,956</td><td>12,736</td></tr><tr><td>Purchase obligations recorded on the Consolidated Statements of Financial Position</td><td>15,981</td><td>14,664</td><td>1,307</td><td>1</td><td>9</td></tr><tr><td>Total contractual obligations</td><td>$177,558</td><td>$61,885</td><td>$47,812</td><td>$28,039</td><td>$39,822</td></tr></table>
(1) Includes interest on variable rate debt calculated based on interest rates at December 31, 2012. Variable rate debt was less than 1% of our total debt at December 31, 2012. Industry Competitiveness The commercial jet airplane market and the airline industry remain extremely competitive. Market liberalization in Europe, the Middle East and Asia is enabling low-cost airlines to continue gaining market share. These airlines are increasing the pressure on airfares. This results in continued cost pressures for all airlines and price pressure on our products. Major productivity gains are essential to ensure a favorable market position at acceptable profit margins. Continued access to global markets remains vital to our ability to fully realize our sales potential and longterm investment returns. Approximately 91% of Commercial Airplanes’ total backlog, in dollar terms, is with non-U. S. airlines. We face aggressive international competitors who are intent on increasing their market share. They offer competitive products and have access to most of the same customers and suppliers. With government support,Airbus has historically invested heavily to create a family of products to compete with ours. Regional jet makers Embraer and Bombardier continue to develop and market larger and increasingly more capable airplanes, including Embraer’s E-195 in the regional jet market and Bombardier’s C Series in the 100-150 seat transcontinental market. Additionally, other competitors from Russia, China and Japan are developing commercial jet aircraft. Some of these competitors have historically enjoyed access to governmentprovided financial support, including “launch aid,” which greatly reduces the cost and commercial risks associated with airplane development activities. This has enabled the development of airplanes without commercial viability; others to be brought to market more quickly than otherwise possible; and many offered for sale below market-based prices. Many competitors have continued to make improvements in efficiency, which may result in funding product development, gaining market share and improving earnings. This market environment has resulted in intense pressures on pricing and other competitive factors, and we expect these pressures to continue or intensify in the coming years. We are focused on improving our products and services and continuing our cost-reduction efforts, which enhances our ability to compete. We are also focused on taking actions to ensure that Boeing is not harmed by unfair subsidization of competitors. Results of Operations
<table><tr><td>Years ended December 31,</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Revenues</td><td>$56,729</td><td>$58,012</td><td>$59,399</td></tr><tr><td>% of total company revenues</td><td>61%</td><td>61%</td><td>62%</td></tr><tr><td>Earnings from operations</td><td>$5,432</td><td>$1,995</td><td>$4,284</td></tr><tr><td>Operating margins</td><td>9.6%</td><td>3.4%</td><td>7.2%</td></tr><tr><td>Research and development</td><td>$2,247</td><td>$3,706</td><td>$2,311</td></tr></table>
Revenues Commercial Airplanes revenues decreased by $1,283 million or 2% in 2017 compared with 2016 due to delivery mix, with fewer twin aisle deliveries more than offsetting the impact of higher single aisle deliveries. Commercial Airplanes revenues decreased by $1,387 million or 2% in 2016 compared with 2015 primarily due to fewer deliveries. Through February 25, 2016, we repurchased approximately $415.0 million of shares of our common stock, which includes the $250.0 million of shares that we repurchased from certain selling stockholders on February 10, 2016. In order to achieve operational synergies, we expect cash outlays related to our integration plans to be approximately $290.0 million in 2016. These cash outlays are necessary to achieve our integration goals of net annual pre-tax operating profit synergies of $350.0 million by the end of the third year post-Closing Date. Also as discussed in Note 20 to our consolidated financial statements, as of December 31, 2015, a short-term liability of $50.0 million and long-term liability of $264.6 million related to Durom Cup product liability claims was recorded on our consolidated balance sheet. We expect to continue paying these claims over the next few years. We expect to be reimbursed a portion of these payments for product liability claims from insurance carriers. As of December 31, 2015, we have received a portion of the insurance proceeds we estimate we will recover. We have a long-term receivable of $95.3 million remaining for future expected reimbursements from our insurance carriers. We also had a short-term liability of $33.4 million related to Biomet metal-on-metal hip implant claims. At December 31, 2015, we had ten tranches of senior notes outstanding as follows (dollars in millions): |
2,017 | Which year is Commercial in Gross Charge-offs the least? | Tobacco-Related Cases Set for Trial: As of January 29, 2018, three Engle progeny cases are set for trial through March 31, 2018. There are no other individual smoking and health cases against PM USA set for trial during this period. Cases against other companies in the tobacco industry may be scheduled for trial during this period. Trial dates are subject to change. Trial Results: Since January 1999, excluding the Engle progeny cases (separately discussed below), verdicts have been returned in 63 smoking and health, “Lights/Ultra Lights” and health care cost recovery cases in which PM USA was a defendant. Verdicts in favor of PM USA and other defendants were returned in 42 of the 63 cases. These 42 cases were tried in Alaska (1), California (7), Connecticut (1), Florida (10), Louisiana (1), Massachusetts (2), Mississippi (1), Missouri (4), New Hampshire (1), New Jersey (1), New York (5), Ohio (2), Pennsylvania (1), Rhode Island (1), Tennessee (2) and West Virginia (2). A motion for a new trial was granted in one of the cases in Florida and in the case in Alaska. In the Alaska case (Hunter), the trial court withdrew its order for a new trial upon PM USA’s motion for reconsideration. In December 2015, the Alaska Supreme Court reversed the trial court decision and remanded the case with directions for the trial court to reassess whether to grant a new trial. In March 2016, the trial court granted a new trial and PM USA filed a petition for review of that order with the Alaska Supreme Court, which the court denied in July 2016. The retrial began in October 2016. In November 2016, the court declared a mistrial after the jury failed to reach a verdict. The plaintiff subsequently moved for a new trial, which is scheduled to begin April 9, 2018. See Types and Number of Cases above for a discussion of the trial results in In re: Tobacco Litigation (West Virginia consolidated cases). Of the 21 non-Engle progeny cases in which verdicts were returned in favor of plaintiffs, 18 have reached final resolution. As of January 29, 2018, 116 state and federal Engle progeny cases involving PM USA have resulted in verdicts since the Florida Supreme Court’s Engle decision as follows: 61 verdicts were returned in favor of plaintiffs; 45 verdicts were returned in favor of PM USA. Eight verdicts that were initially returned in favor of plaintiff were reversed post-trial or on appeal and remain pending and two verdicts in favor of PM USA were reversed for a new trial. See Smoking and Health Litigation - Engle Progeny Trial Court Results below for a discussion of these verdicts. Judgments Paid and Provisions for Tobacco and Health Litigation Items (Including Engle Progeny Litigation): After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation, since October 2004, PM USA has paid in the aggregate judgments and settlements (including related costs and fees) totaling approximately $490 million and interest totaling approximately $184 million as of December 31, 2017. These amounts include payments for Engle progeny judgments (and related costs and fees) totaling approximately $99 million, interest totaling approximately $22 million and payment of approximately $43 million in connection with the Federal Engle Agreement, discussed below. The changes in Altria Group, Inc. ’s accrued liability for tobacco and health litigation items, including related interest costs, for the periods specified below are as follows:
<table><tr><td>(in millions)</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Accrued liability for tobacco and health litigation items at beginning of year</td><td>$47</td><td>$132</td><td>$39</td></tr><tr><td>Pre-tax charges for:</td><td></td><td></td><td></td></tr><tr><td>Tobacco and health judgments</td><td>72</td><td>21</td><td>84</td></tr><tr><td>Related interest costs</td><td>8</td><td>7</td><td>23</td></tr><tr><td>Agreement to resolve federalEngleprogeny cases</td><td>—</td><td>—</td><td>43</td></tr><tr><td>Agreement to resolveAspinallincluding relatedinterest costs</td><td>—</td><td>32</td><td>—</td></tr><tr><td>Agreement to resolveMiner</td><td>—</td><td>45</td><td>—</td></tr><tr><td>Payments</td><td>-21</td><td>-190</td><td>-57</td></tr><tr><td>Accrued liability for tobacco and health litigation items atend of year</td><td>$106</td><td>$47</td><td>$132</td></tr></table>
The accrued liability for tobacco and health litigation items, including related interest costs, was included in liabilities on Altria Group, Inc. ’s consolidated balance sheets. Pre-tax charges for tobacco and health judgments, the agreement to resolve federal Engle progeny cases and the agreements to resolve the Aspinall and Miner “lights” class action cases (excluding related interest costs of approximately $10 million in Aspinall) were included in marketing, administration and research costs on Altria Group, Inc. ’s consolidated statements of earnings. Pre-tax charges for related interest costs were included in interest and other debt expense, net on Altria Group, Inc. ’s consolidated statements of earnings. Security for Judgments: To obtain stays of judgments pending current appeals, as of December 31, 2017, PM USA has posted various forms of security totaling approximately $61 million, the majority of which has been collateralized with cash deposits that are included in assets on the consolidated balance sheet. Information about stock options at December 31, 2007 follows:
<table><tr><td></td><td>Options Outstanding</td><td>Options Exercisable(a)</td></tr><tr><td>December 31, 2007Shares in thousandsRange of exercise prices</td><td>Shares</td><td>Weighted- averageexercise price</td><td>Weighted-average remaining contractual life (in years)</td><td>Shares</td><td>Weighted-averageexercise price</td></tr><tr><td>$37.43 – $46.99</td><td>1,444</td><td>$43.05</td><td>4.0</td><td>1,444</td><td>$43.05</td></tr><tr><td>47.00 – 56.99</td><td>3,634</td><td>53.43</td><td>5.4</td><td>3,022</td><td>53.40</td></tr><tr><td>57.00 – 66.99</td><td>3,255</td><td>60.32</td><td>5.2</td><td>2,569</td><td>58.96</td></tr><tr><td>67.00 – 76.23</td><td>5,993</td><td>73.03</td><td>5.5</td><td>3,461</td><td>73.45</td></tr><tr><td>Total</td><td>14,326</td><td>$62.15</td><td>5.3</td><td>10,496</td><td>$59.95</td></tr></table>
(a) The weighted-average remaining contractual life was approximately 4.2 years. At December 31, 2007, there were approximately 13,788,000 options in total that were vested and are expected to vest. The weighted-average exercise price of such options was $62.07 per share, the weighted-average remaining contractual life was approximately 5.2 years, and the aggregate intrinsic value at December 31, 2007 was approximately $92 million. Stock options granted in 2005 include options for 30,000 shares that were granted to non-employee directors that year. No such options were granted in 2006 or 2007. Awards granted to non-employee directors in 2007 include 20,944 deferred stock units awarded under the Outside Directors Deferred Stock Unit Plan. A deferred stock unit is a phantom share of our common stock, which requires liability accounting treatment under SFAS 123R until such awards are paid to the participants as cash. As there are no vestings or service requirements on these awards, total compensation expense is recognized in full on all awarded units on the date of grant. The weighted-average grant-date fair value of options granted in 2007, 2006 and 2005 was $11.37, $10.75 and $9.83 per option, respectively. To determine stock-based compensation expense under SFAS 123R, the grant-date fair value is applied to the options granted with a reduction made for estimated forfeitures. At December 31, 2006 and 2005 options for 10,743,000 and 13,582,000 shares of common stock, respectively, were exercisable at a weighted-average price of $58.38 and $56.58, respectively. The total intrinsic value of options exercised during 2007, 2006 and 2005 was $52 million, $111 million and $31 million, respectively. At December 31, 2007 the aggregate intrinsic value of all options outstanding and exercisable was $94 million and $87 million, respectively. Cash received from option exercises under all Incentive Plans for 2007, 2006 and 2005 was approximately $111 million, $233 million and $98 million, respectively. The actual tax benefit realized for tax deduction purposes from option exercises under all Incentive Plans for 2007, 2006 and 2005 was approximately $39 million, $82 million and $34 million, respectively. There were no options granted in excess of market value in 2007, 2006 or 2005. Shares of common stock available during the next year for the granting of options and other awards under the Incentive Plans were 40,116,726 at December 31, 2007. Total shares of PNC common stock authorized for future issuance under equity compensation plans totaled 41,787,400 shares at December 31, 2007, which includes shares available for issuance under the Incentive Plans, the Employee Stock Purchase Plan as described below, and a director plan. During 2007, we issued approximately 2.1 million shares from treasury stock in connection with stock option exercise activity. As with past exercise activity, we intend to utilize treasury stock for future stock option exercises. As discussed in Note 1 Accounting Policies, we adopted the fair value recognition provisions of SFAS 123 prospectively to all employee awards including stock options granted, modified or settled after January 1, 2003. As permitted under SFAS 123, we recognized compensation expense for stock options on a straight-line basis over the pro rata vesting period. Total compensation expense recognized related to PNC stock options in 2007 was $29 million compared with $31 million in 2006 and $29 million in 2005. PRO FORMA EFFECTS A table is included in Note 1 Accounting Policies that sets forth pro forma net income and basic and diluted earnings per share as if compensation expense had been recognized under SFAS 123 and 123R, as amended, for stock options for 2005. For purposes of computing stock option expense and 2005 pro forma results, we estimated the fair value of stock options using the Black-Scholes option pricing model. The model requires the use of numerous assumptions, many of which are very subjective. Therefore, the 2005 pro forma results are estimates of results of operations as if compensation expense had been recognized for all stock-based compensation awards and are not indicative of the impact on future periods. See Note 1 Accounting Policies and Note 3 Asset Quality in the Notes To Consolidated Financial Statements in Item 8 of this Report for further information on certain key asset quality indicators that we use to evaluate our portfolios and establish the allowances. Table 23: Allowance for Loan and Lease Losses
<table><tr><td>Dollars in millions</td><td>2017</td><td>2016</td></tr><tr><td>January 1</td><td>$2,589</td><td>$2,727</td></tr><tr><td>Total net charge-offs</td><td>-457</td><td>-543</td></tr><tr><td>Provision for credit losses</td><td>441</td><td>433</td></tr><tr><td>Net decrease / (increase) in allowance forunfunded loan commitments andletters of credit</td><td>4</td><td>-40</td></tr><tr><td>Other</td><td>34</td><td>12</td></tr><tr><td>December 31</td><td>$2,611</td><td>$2,589</td></tr><tr><td>Net charge-offs to average loans (for theyear ended)</td><td>.21%</td><td>.26%</td></tr><tr><td>Allowance for loan and lease losses tototal loans</td><td>1.18%</td><td>1.23%</td></tr><tr><td>Commercial lending net charge-offs</td><td>$-105</td><td>$-185</td></tr><tr><td>Consumer lending net charge-offs</td><td>-352</td><td>-358</td></tr><tr><td>Total net charge-offs</td><td>$-457</td><td>$-543</td></tr><tr><td>Net charge-offs to average loans (for theyear ended)</td><td></td><td></td></tr><tr><td>Commercial lending</td><td>.07%</td><td>.14%</td></tr><tr><td>Consumer lending</td><td>.49%</td><td>.50%</td></tr></table>
At December 31, 2017, total ALLL to total nonperforming loans was 140%. The comparable amount for December 31, 2016 was 121%. These ratios are 102% and 89%, respectively, when excluding the $.7 billion of ALLL at both December 31, 2017 and December 31, 2016 allocated to consumer loans and lines of credit not secured by residential real estate and purchased impaired loans. We have excluded these amounts from ALLL in these ratios as these asset classes are not included in nonperforming loans. See Table 18 within this Credit Risk Management section for additional information. The ALLL balance increases or decreases across periods in relation to fluctuating risk factors, including asset quality trends, net charge-offs and changes in aggregate portfolio balances. During 2017, overall credit quality remained stable, which resulted in an essentially flat ALLL balance as of December 31, 2017 compared to December 31, 2016. The following table summarizes our loan charge-offs and recoveries. Table 24: Loan Charge-Offs and Recoveries
<table><tr><td>Year ended December 31Dollars in millions</td><td>Gross Charge-offs</td><td>Recoveries</td><td>Net Charge-offs / (Recoveries)</td><td>Percent of Average Loans</td></tr><tr><td>2017</td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial</td><td>$186</td><td>$81</td><td>$105</td><td>.10%</td></tr><tr><td>Commercial realestate</td><td>24</td><td>28</td><td>-4</td><td>-.01%</td></tr><tr><td>Equipmentlease financing</td><td>11</td><td>7</td><td>4</td><td>.05%</td></tr><tr><td>Home equity</td><td>123</td><td>91</td><td>32</td><td>.11%</td></tr><tr><td>Residential realestate</td><td>9</td><td>18</td><td>-9</td><td>-.06%</td></tr><tr><td>Credit card</td><td>182</td><td>21</td><td>161</td><td>3.06%</td></tr><tr><td>Other consumer</td><td>251</td><td>83</td><td>168</td><td>.77%</td></tr><tr><td>Total</td><td>$786</td><td>$329</td><td>$457</td><td>.21%</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial</td><td>$332</td><td>$117</td><td>$215</td><td>.21%</td></tr><tr><td>Commercial realestate</td><td>26</td><td>51</td><td>-25</td><td>-.09%</td></tr><tr><td>Equipment leasefinancing</td><td>5</td><td>10</td><td>-5</td><td>-.07%</td></tr><tr><td>Home equity</td><td>143</td><td>84</td><td>59</td><td>.19%</td></tr><tr><td>Residential realestate</td><td>14</td><td>9</td><td>5</td><td>.03%</td></tr><tr><td>Credit card</td><td>161</td><td>19</td><td>142</td><td>2.90%</td></tr><tr><td>Other consumer</td><td>205</td><td>53</td><td>152</td><td>.70%</td></tr><tr><td>Total</td><td>$886</td><td>$343</td><td>$543</td><td>.26%</td></tr></table>
See Note 1 Accounting Policies and Note 4 Allowance for Loan and Lease Losses in the Notes To Consolidated Financial Statements in Item 8 of this Report for additional information on the ALLL. |
2,215 | What's the total amount of Management and financial advice fees, Distribution fees, Net investment income and Premiums in 2012? (in million) | PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013 Net Loss Segment net loss decreased $25,510 or 25%, to $74,731 for Twelve Months 2014 compared with a net loss of $100,241 for Twelve Months 2013. The decrease is primarily due to a $20,753 one-time tax benefi t related to the conversion of the Canadian branch operations of certain U. S. subsidiaries to foreign corporate entities, a $17,068 (after-tax) change in net realized gains on investments, lower employee-related costs and impact of expense reduction initiatives. These items were partially offset by a $19,400 (after-tax) loss on an asset held for sale. Total Revenues Total revenues increased $7,189 or 10%, to $79,282 for Twelve Months 2014 compared with $72,093 for Twelve Months 2013. The increase in revenues is mainly due to an $26,258 increase in net realized gains on investments partially offset by a decrease of $17,816 in amortization of deferred gain on disposal of businesses (“amortization of deferred gain”). The reduction in the amortization of deferred gain is related to a change in estimate for the recognition of a deferred gain associated with FFG that we previously sold through reinsurance. Total Benefi ts, Losses and Expenses Total benefi ts, losses and expenses decreased $19,600 or 9%, to $201,473 in Twelve Months 2014 compared with $221,073 in Twelve Months 2013. Interest expense declined $19,340 primarily due to repayment of the 2004 Senior Notes with an aggregate principal amount of $500,000 on February 18, 2014. Included in selling, underwriting and general expenses is a $21,526 loss on an asset held for sale. Excluding this item, Twelve Months 2014 had lower selling, underwriting and general expenses compared with Twelve Months 2013 primarily due to lower employee-related costs and impact of expense reduction initiatives. Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012 Net Loss Segment net loss increased $45,183 or 82%, to $100,241 for Twelve Months 2013 compared with a net loss of $55,058 for Twelve Months 2012. The increase is primarily related to a $19,388 (after-tax) decrease in net realized gains on investments, increased employee-related and business acquisition-related expenses and additional expenses in areas targeted for growth. In addition, interest expense increased $11,329 (after-tax) due to the March 2013 issuance of senior notes with an aggregate principal amount of $700,000. Total Revenues Total revenues decreased $34,713 or 33%, to $72,093 for Twelve Months 2013 compared with $106,806 for Twelve Months 2012. The decrease in revenues is mainly due to decreased net realized gains on investments. Total Benefi ts, Losses and Expenses Total benefi ts, losses and expenses increased $50,405 or 30%, to $221,073 in Twelve Months 2013 compared with $170,668 in Twelve Months 2012. The increase is primarily due to increased employee-related and business acquisition-related expenses, additional expenses in areas targeted for growth and increased interest expense related to the March 2013 debt issuance mentioned above. In addition, policyholders benefi ts increased $5,949 attributable to increased claims payable accruals associated with discontinued businesses. Investments The Company had total investments of $14,131,452 and $14,244,015 as of December 31, 2014 and December 31, 2013, respectively. For more information on our investments see Note 5 to the Consolidated Financial Statements included elsewhere in this report. The following table shows the credit quality of our fi xed maturity securities portfolio as of the dates indicated:
<table><tr><td></td><td colspan="4"> As of</td></tr><tr><td> Fixed Maturity Securities by Credit Quality (Fair Value)</td><td colspan="2">December 31, 2014</td><td colspan="2"> December 31, 2013</td></tr><tr><td>Aaa / Aa / A</td><td>$7,314,208</td><td>65.0%</td><td>$7,214,256</td><td>63.9%</td></tr><tr><td>Baa</td><td>3,255,505</td><td>28.9%</td><td>3,316,035</td><td>29.4%</td></tr><tr><td>Ba</td><td>432,203</td><td>3.8%</td><td>523,175</td><td>4.6%</td></tr><tr><td>B and lower</td><td>261,258</td><td>2.3%</td><td>238,409</td><td>2.1%</td></tr><tr><td>Total</td><td>$11,263,174</td><td>100.0%</td><td>$11,291,875</td><td>100.0%</td></tr></table>
Annuities The following table presents the results of operations of our Annuities 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>2012</td><td>2011</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>$648</td><td>$622</td><td>$26</td><td>4%</td></tr><tr><td>Distribution fees</td><td>317</td><td>312</td><td>5</td><td>2</td></tr><tr><td>Net investment income</td><td>1,132</td><td>1,279</td><td>-147</td><td>-11</td></tr><tr><td>Premiums</td><td>118</td><td>161</td><td>-43</td><td>-27</td></tr><tr><td>Other revenues</td><td>309</td><td>256</td><td>53</td><td>21</td></tr><tr><td>Total revenues</td><td>2,524</td><td>2,630</td><td>-106</td><td>-4</td></tr><tr><td>Banking and deposit interest expense</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total net revenues</td><td>2,524</td><td>2,630</td><td>-106</td><td>-4</td></tr><tr><td>Expenses</td><td></td><td></td><td></td><td></td></tr><tr><td>Distribution expenses</td><td>395</td><td>400</td><td>-5</td><td>-1</td></tr><tr><td>Interest credited to fixed accounts</td><td>688</td><td>714</td><td>-26</td><td>-4</td></tr><tr><td>Benefits, claims, losses and settlement expenses</td><td>419</td><td>405</td><td>14</td><td>3</td></tr><tr><td>Amortization of deferred acquisition costs</td><td>229</td><td>264</td><td>-35</td><td>-13</td></tr><tr><td>Interest and debt expense</td><td>2</td><td>1</td><td>1</td><td>NM</td></tr><tr><td>General and administrative expense</td><td>224</td><td>221</td><td>3</td><td>1</td></tr><tr><td>Total expenses</td><td>1,957</td><td>2,005</td><td>-48</td><td>-2</td></tr><tr><td>Operating earnings</td><td>$567</td><td>$625</td><td>$-58</td><td>-9%</td></tr></table>
NM Not Meaningful. Our Annuities segment pretax operating income, which excludes net realized gains or losses and the market impact on variable annuity guaranteed benefits (net of hedges and the related DSIC and DAC amortization), decreased $58 million, or 9%, to $567 million for the year ended December 31, 2012 compared to $625 million for the prior year primarily due to a decline in net investment income and an unfavorable impact from unlocking and model changes, partially offset by the market impact on DAC and DSIC, lower interest credited to fixed accounts and higher fee revenues. Results for 2011 included $34 million of additional bond discount accretion investment income related to prior periods resulting from revisions to the accounting classification of certain structured securities, net of DAC and DSIC amortization. The impact of unlocking and model changes was a decrease to pretax operating income of $11 million in 2012 compared to an increase of $1 million in the prior year. The impact of unlocking and model changes for 2012 included a $43 million benefit, net of DAC and DSIC amortization, from an adjustment to the model which values the reserves related to living benefit guarantees primarily attributable to prior periods. This revision aligns the model to more accurately reflect best estimate assumptions for living benefit utilization going forward. The market impact on DAC and DSIC was a benefit of $29 million in 2012 compared to an expense of $10 million in the prior year. RiverSource variable annuity account balances increased 9% to $68.1 billion at December 31, 2012 compared to the prior year driven by market appreciation. Variable annuity net outflows of $457 million in 2012 reflected the closed book of annuities previously sold through third parties and $511 million of net inflows in the Ameriprise channel. RiverSource fixed annuity account balances declined 3% to $13.8 billion due to net outflows given the interest rate environment. Net Revenues Net revenues, which exclude net realized gains or losses, decreased $106 million, or 4%, to $2.5 billion for the year ended December 31, 2012 compared to $2.6 billion for the prior year primarily due to decreases in net investment income and premiums, partially offset by higher management fees and higher fees from variable annuity guarantees. Management and financial advice fees increased $26 million, or 4%, to $648 million for the year ended December 31, 2012 compared to $622 million for the prior year due to higher fees on variable annuities driven by higher separate account balances. Average variable annuities contract accumulation values increased $2.9 billion, or 5%, from the prior year due to market appreciation. Net investment income, which excludes net realized gains or losses, decreased $147 million, or 11%, to $1.1 billion for the year ended December 31, 2012 compared to $1.3 billion for the prior year due to a decrease in investment income on fixed maturities driven by low interest rates impacting both the variable and fixed businesses and $37 million of additional bond discount accretion investment income recognized in 2011 related to prior periods resulting from revisions to the accounting classification of certain structured securities. expects to have sufficient liquidity to finance its announced capital growth projects. ONEOK Partners believes that its available credit and cash and cash equivalents are adequate to meet liquidity requirements associated with commodity price volatility. See discussion under “Commodity Price Risk” in Part I, Item 7A, Quantitative and Qualitative Disclosures about Market Risk in our Annual Report, for information on ONEOK Partners’ hedging activities. Pension and Postretirement Benefit Plans - Information about our pension and postretirement benefits plans, including anticipated contributions, is included under Note N of the Notes to Consolidated Financial Statements in this Annual Report. During 2014, we made no contributions to our defined benefit pension plans, and $2.0 million in contributions to our postretirement benefit plans for both continuing and discontinued operations. The contributions to our postretirement benefit plans were attributable to the 2014 plan year. We expect to make $1.5 million in contributions to our defined benefit pension and postretirement plans in 2015. CASH FLOW ANALYSIS We use the indirect method to prepare our Consolidated Statements of Cash Flows. Under this method, we reconcile net income to cash flows provided by operating activities by adjusting net income for those items that impact net income but do not result in actual cash receipts or payments during the period and for operating cash items that do not impact net income. These reconciling items include depreciation and amortization, allowance for equity funds used during construction, gain or loss on sale of assets, equity earnings from investments, distributions received from unconsolidated affiliates, deferred income taxes, share-based compensation expense, other amounts, and changes in our assets and liabilities not classified as investing or financing activities. The following table sets forth the changes in cash flows by operating, investing and financing activities for the periods indicated:
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td></td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td></td><td colspan="3">(Millions of dollars)</td></tr><tr><td>Total cash provided by (used in):</td><td></td><td></td><td></td></tr><tr><td>Operating activities</td><td>$1,285.6</td><td>$1,294.8</td><td>$984.0</td></tr><tr><td>Investing activities</td><td>-2,566.2</td><td>-2,642.0</td><td>-1,814.2</td></tr><tr><td>Financing activities</td><td>1,304.5</td><td>912.9</td><td>1,339.0</td></tr><tr><td>Change in cash and cash equivalents</td><td>23.9</td><td>-434.3</td><td>508.8</td></tr><tr><td>Change in cash and cash equivalents included in discontinued operations</td><td>3.3</td><td>2.9</td><td>11.5</td></tr><tr><td>Change in cash and cash equivalents from continuing operations</td><td>27.2</td><td>-431.4</td><td>520.3</td></tr><tr><td>Cash and cash equivalents at beginning of period</td><td>145.6</td><td>577.0</td><td>56.7</td></tr><tr><td>Cash and cash equivalents at end of period</td><td>$172.8</td><td>$145.6</td><td>$577.0</td></tr></table>
Operating Cash Flows - Operating cash flows are affected by earnings from our business activities. Changes in commodity prices and demand for our services or products, whether because of general economic conditions, changes in supply, changes in demand for the end products that are made with our products or increased competition from other service providers, could affect our earnings and operating cash flows.2014 vs. 2013 - Cash flows from operating activities, before changes in operating assets and liabilities, were approximately $1,227.3 million in 2014 compared with $1,302.0 million 2013. The decrease was due primarily to 2013 operating activities including a full year of operations of our former natural gas distribution business, which was separated from ONEOK on January 31, 2014, as discussed in Note B, offset partially by higher operating income from ONEOK Partners, as discussed in “Financial Results and Operating Information. ” The changes in operating assets and liabilities increased operating cash flows by approximately $58.3 million in 2014, compared with a decrease of $7.2 million in 2013. The increase was due primarily to the collection and payment of trade receivables and payables, resulting from the timing of cash collections from customers and paid to vendors and suppliers, which vary from period to period. This change is also due to the change in NGL volumes in storage. These increases were offset partially by higher settlements of liabilities associated with the wind down of our former energy services business and higher imbalances. REPUBLIC SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Changes in the deferred tax valuation allowance for the years ended December 31, 2012, 2011 and 2010 are as follows:
<table><tr><td></td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Valuation allowance, beginning of year</td><td>$118.1</td><td>$120.1</td><td>$126.5</td></tr><tr><td>Additions charged to income</td><td>1.9</td><td>2.1</td><td>8.3</td></tr><tr><td>Usage</td><td>-3.2</td><td>-4.3</td><td>-10.4</td></tr><tr><td>Expirations of state net operating losses</td><td>-0.3</td><td>-0.3</td><td>-0.3</td></tr><tr><td>Other, net</td><td>8.3</td><td>0.5</td><td>-4.0</td></tr><tr><td>Valuation allowance, end of year</td><td>$124.8</td><td>$118.1</td><td>$120.1</td></tr></table>
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized after the initial recognition of the deferred tax asset. We also provide valuation allowances, as needed, to offset portions of deferred tax assets due to uncertainty surrounding the future realization of such deferred tax assets. We adjust the valuation allowance in the period management determines it is more likely than not that deferred tax assets will or will not be realized. We have state net operating loss carryforwards with an estimated tax effect of $130.2 million available at December 31, 2012. These state net operating loss carryforwards expire at various times between 2013 and 2032. We believe that it is more likely than not that the benefit from certain state net operating loss carryforwards will not be realized. In recognition of this risk, at December 31, 2012, we have provided a valuation allowance of $113.5 million for certain state net operating loss carryforwards. At December 31, 2012, we also have provided a valuation allowance of $11.3 million for certain other deferred tax assets. Deferred income taxes have not been provided on the undistributed earnings of our Puerto Rican subsidiaries of approximately $40 million and $39 million as of December 31, 2012 and 2011, respectively, as such earnings are considered to be permanently invested in those subsidiaries. If such earnings were to be remitted to us as dividends, we would incur approximately $14 million of federal income taxes. We made income tax payments (net of refunds received) of approximately $185 million, $173 million and $418 million for 2012, 2011 and 2010, respectively. Income taxes paid in 2012 and 2011 reflect the favorable tax depreciation provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act) that was signed into law in December 2010. The Tax Relief Act included 100% bonus depreciation for property placed in service after September 8, 2010 and through December 31, 2011 (and for certain long-term construction projects to be placed in service in 2012) and 50% bonus depreciation for property placed in service in 2012 (and for certain long-term construction projects to be placed in service in 2013). Income taxes paid in 2010 includes $111 million related to the settlement of certain tax liabilities regarding BFI risk management companies. We and our subsidiaries are subject to income tax in the U. S. and Puerto Rico, as well as income tax in multiple state jurisdictions. Our compliance with income tax rules and regulations is periodically audited by tax authorities. These authorities may challenge the positions taken in our tax filings. Thus, to provide for certain potential tax exposures, we maintain liabilities for uncertain tax positions for our estimate of the final outcome of the examinations. |
1.16129 | what is the currency exchange rate cad to usd used to convert the value of the outstanding credit facility as of december 31 , 3006? | 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. |
2,590.38 | What will GAAP of Operating Income be like in 2017 if it develops with the same increasing rate as current? | approval of the Texas Commission on Environmental Quality (TCEQ). We estimate that the pump and treat system will continue to operate until 2042. We plan to perform additional work to address other environmental obligations at the site. This additional work includes remediating, as required, impacted soils, investigating groundwater west of the former PUI facility, performing post closure care for two closed RCRA surface impoundment units, and establishing engineering controls. In 2012, we estimated the total exposure at this site to be $13. There has been no change to the estimated exposure. ASSET RETIREMENT OBLIGATIONS Our asset retirement obligations are primarily associated with Industrial Gases on-site long-term supply contracts, under which we have built a facility on land owned by the customer and are obligated to remove the facility at the end of the contract term. The retirement of assets includes the contractually required removal of a long-lived asset from service, and encompasses the sale, removal, abandonment, recycling, or disposal of the assets as required at the end of the contract terms. The timing and/or method of settlement of these obligations are conditional on a future event that may or may not be within our control. Changes to the carrying amount of our asset retirement obligations are as follows:
<table><tr><td>Balance at 30 September 2014</td><td>$94.0</td></tr><tr><td>Additional accruals</td><td>17.6</td></tr><tr><td>Liabilities settled</td><td>-3.6</td></tr><tr><td>Accretion expense</td><td>4.7</td></tr><tr><td>Currency translation adjustment</td><td>-3.3</td></tr><tr><td>Balance at 30 September 2015</td><td>$109.4</td></tr><tr><td>Additional accruals</td><td>10.4</td></tr><tr><td>Liabilities settled</td><td>-4.4</td></tr><tr><td>Accretion expense</td><td>5.4</td></tr><tr><td>Currency translation adjustment</td><td>-.9</td></tr><tr><td> Balance at 30 September 2016</td><td> $119.9</td></tr></table>
These obligations are primarily reflected in other noncurrent liabilities on the consolidated balance sheets. GUARANTEES AND WARRANTIES In April 2015, we entered into joint venture arrangements in Saudi Arabia. An equity bridge loan has been provided to the joint venture until 2020 to fund equity commitments, and we guaranteed the repayment of our 25% share of this loan. Our venture partner guaranteed repayment of their share. Our maximum exposure under the guarantee is approximately $100. As of 30 September 2016, we recorded a noncurrent liability of $94.4 for our obligation to make future equity contributions based on the equity bridge loan. Air Products has also entered into a sale of equipment contract with the joint venture to engineer, procure, and construct the industrial gas facilities that will supply gases to Saudi Aramco. We have provided bank guarantees to the joint venture of up to $311 to support our performance under the contract. Exposures under the guarantees decline over time and will be completely extinguished after completion of the project. We are party to an equity support agreement and operations guarantee related to an air separation facility constructed in Trinidad for a venture in which we own 50%. At 30 September 2016, maximum potential payments under joint and several guarantees were $29.0. Exposures under the guarantees decline over time and will be completely extinguished by 2024. During the first quarter of 2014, we sold the remaining portion of our Homecare business and entered into an operations guarantee related to obligations under certain homecare contracts assigned in connection with the transaction. Our maximum potential payment under the guarantee is ￡20 million (approximately $25 at 30 September 2016), and our exposure will be extinguished by 2020. To date, no equity contributions or payments have been made since the inception of these guarantees. The fair value of the above guarantees is not material. 2015 vs. 2014 On a GAAP basis, the effective tax rate was 24.0% and 27.1% in 2015 and 2014, respectively. The effective tax rate was higher in fiscal year 2014 primarily due to the goodwill impairment charge of $305.2, which was not deductible for tax purposes, and the Chilean tax reform enacted in September 2014 which increased income tax expense by $20.6. These impacts were partially offset by an income tax benefit of $51.6 associated with losses from transactions and a tax election in a non-U. S. subsidiary. Refer to Note 10, Goodwill, and Note 23, Income Taxes, to the consolidated financial statements for additional information. On a non-GAAP basis, the effective tax rate was 24.2% and 24.1% in 2015 and 2014, respectively. Discontinued Operations On 29 March 2016, the Board of Directors approved the Company’s exit of its Energy-from-Waste (EfW) business. As a result, efforts to start up and operate its two EfW projects located in Tees Valley, United Kingdom, have been discontinued. The decision to exit the business and stop development of the projects was based on continued difficulties encountered and the Company’s conclusion, based on testing and analysis completed during the second quarter of fiscal year 2016, that significant additional time and resources would be required to make the projects operational. In addition, the decision allows the Company to execute its strategy of focusing resources on its core Industrial Gases business. The EfW segment has been presented as a discontinued operation. Prior year EfW business segment information has been reclassified to conform to current year presentation. In fiscal 2016, our loss from discontinued operations, net of tax, of $884.2 primarily resulted from the write down of assets to their estimated net realizable value and to record a liability for plant disposition and other costs. Income tax benefits related only to one of the projects, as the other did not qualify for a local tax deduction. The loss from discontinued operations also includes land lease costs, commercial and administrative costs, and costs incurred for ongoing project exit activities. We expect additional exit costs of $50 to $100 to be recorded in future periods. In fiscal 2015, our loss from discontinued operations, net of tax, related to EfW was $6.8. This resulted from costs for land leases and commercial and administrative expenses. In fiscal 2014, our loss from discontinued operations, net of tax, was $2.9. This included a loss, net of tax, of $7.5 for the cost of EfW land leases and commercial and administrative expenses. This loss was partially offset by a gain of $3.9 for the sale of the remaining Homecare business and settlement of contingencies related to a sale of a separate portion of the business to The Linde Group in 2012. Refer to Note 4, Discontinued Operations, for additional details. Segment Analysis
<table><tr><td></td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Sales</td><td>$3,343.6</td><td>$3,693.9</td><td>$4,078.5</td></tr><tr><td>Operating income</td><td>895.2</td><td>808.4</td><td>762.6</td></tr><tr><td>Operating margin</td><td>26.8%</td><td>21.9%</td><td>18.7%</td></tr><tr><td>Equity affiliates’ income</td><td>52.7</td><td>64.6</td><td>60.9</td></tr><tr><td>Adjusted EBITDA</td><td>1,390.4</td><td>1,289.9</td><td>1,237.9</td></tr><tr><td>Adjusted EBITDA margin</td><td>41.6%</td><td>34.9%</td><td>30.4%</td></tr></table>
2016 vs. 2015 Underlying sales increased by 10% from higher volumes of 11%, partially offset by lower pricing of 1%. Volumes were higher primarily from new plants in China and higher merchant volumes across Asia. Pricing was down due to continued pricing pressure on merchant products in China and helium oversupply into Asia. Unfavorable currency impacts, primarily from the Chinese Renminbi, Korean Won, and Taiwanese Dollar decreased sales by 5%. Operating income of $449.1 increased 18%, or $68.6, primarily due to higher volumes of $66 and lower operating costs of $34, partially offset by an unfavorable currency impact of $19 and unfavorable pricing, net of energy and fuel costs, of $12. The lower operating costs were driven by our operational improvements. Operating margin increased 300 bp, due to favorable cost performance and higher volumes. Equity affiliates’ income of $57.8 increased $11.7 primarily due to favorable contract and insurance settlements, higher volumes, and improved cost performance.2015 vs. 2014 Underlying sales increased by 10% from higher volumes of 12%, partially offset by lower pricing of 2%. Volumes were higher primarily from new plants, and in particular, a large on-site project in China. Pricing was down due to continued pricing pressure on merchant products in China. Unfavorable currency impacts decreased sales by 4%. Higher energy contractual cost-pass through to customers increased sales by 1%. Operating income of $380.5 increased 23%, or $70.1, primarily due to higher volumes of $76 and lower costs of $42 resulting from restructuring and underlying productivity, partially offset by lower pricing, net of energy and fuel costs, of $35 and an unfavorable currency impact of $13. Operating margin increased 290 bp, primarily due to favorable cost performance and higher volumes, partially offset by lower pricing. Equity affiliates’ income of $46.1 increased $8.1 primarily due to higher volumes and favorable cost performance. Industrial Gases – Global
<table><tr><td></td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Sales</td><td>$498.8</td><td>$286.8</td><td>$296.0</td></tr><tr><td>Operating loss</td><td>-21.3</td><td>-51.6</td><td>-57.3</td></tr><tr><td>Adjusted EBITDA</td><td>-13.5</td><td>-35.9</td><td>-44.4</td></tr></table>
The Industrial Gases – Global segment includes sales of cryogenic and gas processing equipment for air separation and centralized global costs associated with management of all the Industrial Gases segments.2016 vs. 2015 Sales of $498.8 increased $212.0, or 74%. The increase in sales was driven by a sale of equipment contract for multiple air separation units that will serve Saudi Aramco’s Jazan oil refinery and power plant in Saudi Arabia which more than offset the decrease in small equipment and other air separation unit sales. In 2016, we recognized approximately $300 of sales related to the Jazan project. Operating loss of $21.3 decreased 59%, or $30.3, primarily from income on the Jazan project and benefits from the cost reduction actions, partially offset by lower other sale of equipment project activity and a gain associated with the cancellation of a sale of equipment contract that was recorded in the prior year.2015 vs. 2014 Sales of $286.8 decreased $9.2, or 3%, due to unfavorable currency impacts. Operating loss of $51.6 decreased 10%, or $5.7, primarily due to benefits of cost reduction actions and a gain associated with the cancellation of a sale of equipment contract, partially offset by less profitable business mix, unfavorable project costs, and bad debt expense. Materials Technologies
<table><tr><td></td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Sales</td><td>$2,019.5</td><td>$2,087.1</td><td>$2,064.6</td></tr><tr><td>Operating income</td><td>530.2</td><td>476.7</td><td>379.0</td></tr><tr><td>Operating margin</td><td>26.3%</td><td>22.8%</td><td>18.4%</td></tr><tr><td>Adjusted EBITDA</td><td>609.3</td><td>571.7</td><td>480.7</td></tr><tr><td>Adjusted EBITDA margin</td><td>30.2%</td><td>27.4%</td><td>23.3%</td></tr></table>
CONSOLIDATED RESULTS
<table><tr><td></td><td colspan="5">Continuing Operations</td></tr><tr><td></td><td>Operating Income</td><td>Operating Margin(A)</td><td>Income Tax Provision(B)</td><td>Net Income</td><td>Diluted EPS</td></tr><tr><td> 2016 GAAP</td><td>$2,106.0</td><td>22.1%</td><td>$586.5</td><td>$1,515.3</td><td>$6.94</td></tr><tr><td> 2015 GAAP</td><td>1,708.3</td><td>17.3%</td><td>418.3</td><td>1,284.7</td><td>5.91</td></tr><tr><td>Change GAAP</td><td>$397.7</td><td>480bp</td><td>$168.2</td><td>$230.6</td><td>$1.03</td></tr><tr><td>% Change GAAP</td><td>23%</td><td></td><td>40%</td><td>18%</td><td>17%</td></tr><tr><td>2016 GAAP</td><td>$2,106.0</td><td>22.1%</td><td>$586.5</td><td>$1,515.3</td><td>$6.94</td></tr><tr><td>Business separation costs<sup>(C)</sup></td><td>52.2</td><td>.5%</td><td>3.9</td><td>48.3</td><td>.22</td></tr><tr><td>Tax costs associated with businessseparation<sup>(C)</sup></td><td>—</td><td>—</td><td>-51.8</td><td>51.8</td><td>.24</td></tr><tr><td>Business restructuring and cost reduction actions</td><td>33.9</td><td>.4%</td><td>9.9</td><td>24.0</td><td>.11</td></tr><tr><td>Pension settlement loss</td><td>6.4</td><td>.1%</td><td>2.3</td><td>4.1</td><td>.02</td></tr><tr><td>Loss on extinguishment of debt<sup>(D)</sup></td><td>—</td><td>—</td><td>2.6</td><td>4.3</td><td>.02</td></tr><tr><td> 2016 Non-GAAP Measure</td><td>$2,198.5</td><td>23.1%</td><td>$553.4</td><td>$1,647.8</td><td>$7.55</td></tr><tr><td>2015 GAAP</td><td>$1,708.3</td><td>17.3%</td><td>$418.3</td><td>$1,284.7</td><td>$5.91</td></tr><tr><td>Business separation costs<sup>(C)</sup></td><td>7.5</td><td>.1%</td><td>—</td><td>7.5</td><td>.03</td></tr><tr><td>Business restructuring and cost reduction actions</td><td>207.7</td><td>2.1%</td><td>54.5</td><td>153.2</td><td>.71</td></tr><tr><td>Pension settlement loss</td><td>21.2</td><td>.2%</td><td>7.5</td><td>13.7</td><td>.06</td></tr><tr><td>Gain on previously held equity interest</td><td>-17.9</td><td>-.2%</td><td>-6.7</td><td>-11.2</td><td>-.05</td></tr><tr><td>Gain on land sales<sup>(E)</sup></td><td>-33.6</td><td>-.4%</td><td>-5.3</td><td>-28.3</td><td>-.13</td></tr><tr><td>Loss on extinguishment of debt<sup>(D)</sup></td><td>—</td><td>—</td><td>2.4</td><td>14.2</td><td>.07</td></tr><tr><td> 2015 Non-GAAP Measure</td><td>$1,893.2</td><td>19.1%</td><td>$470.7</td><td>$1,433.8</td><td>$6.60</td></tr><tr><td>Change Non-GAAP Measure</td><td>$305.3</td><td>400bp</td><td>$82.7</td><td>$214.0</td><td>$.95</td></tr><tr><td>% Change Non-GAAP Measure</td><td>16%</td><td></td><td>18%</td><td>15%</td><td>14%</td></tr><tr><td></td><td colspan="5">Continuing Operations</td></tr><tr><td></td><td>Operating Income</td><td>Operating Margin(A)</td><td>Income Tax Provision(B)</td><td>Net Income</td><td>Diluted EPS</td></tr><tr><td> 2015 GAAP</td><td>$1,708.3</td><td>17.3%</td><td>$418.3</td><td>$1,284.7</td><td>$5.91</td></tr><tr><td> 2014 GAAP</td><td>1,339.1</td><td>12.8%</td><td>369.4</td><td>994.6</td><td>4.62</td></tr><tr><td>Change GAAP</td><td>$369.2</td><td>450bp</td><td>$48.9</td><td>$290.1</td><td>$1.29</td></tr><tr><td>% Change GAAP</td><td>28%</td><td></td><td>13%</td><td>29%</td><td>28%</td></tr><tr><td>2015 GAAP</td><td>$1,708.3</td><td>17.3%</td><td>$418.3</td><td>$1,284.7</td><td>$5.91</td></tr><tr><td>Business separation costs<sup>(C)</sup></td><td>7.5</td><td>.1%</td><td>—</td><td>7.5</td><td>.03</td></tr><tr><td>Business restructuring and cost reduction actions</td><td>207.7</td><td>2.1%</td><td>54.5</td><td>153.2</td><td>.71</td></tr><tr><td>Pension settlement loss</td><td>21.2</td><td>.2%</td><td>7.5</td><td>13.7</td><td>.06</td></tr><tr><td>Gain on previously held equity interest</td><td>-17.9</td><td>-.2%</td><td>-6.7</td><td>-11.2</td><td>-.05</td></tr><tr><td>Gain on land sales<sup>(E)</sup></td><td>-33.6</td><td>-.4%</td><td>-5.3</td><td>-28.3</td><td>-.13</td></tr><tr><td>Loss on extinguishment of debt<sup>(D)</sup></td><td>—</td><td>—</td><td>2.4</td><td>14.2</td><td>.07</td></tr><tr><td> 2015 Non-GAAP Measure</td><td>$1,893.2</td><td>19.1%</td><td>$470.7</td><td>$1,433.8</td><td>$6.60</td></tr><tr><td>2014 GAAP</td><td>$1,339.1</td><td>12.8%</td><td>$369.4</td><td>$994.6</td><td>$4.62</td></tr><tr><td>Business restructuring and cost reduction actions</td><td>12.7</td><td>.1%</td><td>4.5</td><td>8.2</td><td>.04</td></tr><tr><td>Pension settlement loss</td><td>5.5</td><td>.1%</td><td>1.9</td><td>3.6</td><td>.02</td></tr><tr><td>Goodwill and intangible asset impairmentcharge<sup>(F)</sup></td><td>310.1</td><td>3.0%</td><td>1.3</td><td>275.1</td><td>1.27</td></tr><tr><td>Chilean tax rate change</td><td>—</td><td>—</td><td>-20.6</td><td>20.6</td><td>.10</td></tr><tr><td>Tax election benefit</td><td>—</td><td>—</td><td>51.6</td><td>-51.6</td><td>-.24</td></tr><tr><td> 2014 Non-GAAP Measure</td><td>$1,667.4</td><td>16.0%</td><td>$408.1</td><td>$1,250.5</td><td>$5.81</td></tr><tr><td>Change Non-GAAP Measure</td><td>$225.8</td><td>310bp</td><td>$62.6</td><td>$183.3</td><td>$.79</td></tr><tr><td>% Change Non-GAAP Measure</td><td>14%</td><td></td><td>15%</td><td>15%</td><td>14%</td></tr></table>
(A) Operating margin is calculated by dividing operating income by sales. |
2,010 | For Three Months Ended Dec 31,which year is Total stock-based compensation greater than 2400 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>$133,126</td></tr><tr><td> LCR</td><td> 127%</td><td>128%</td></tr></table>
Liquidity and Capital Resources |
85,629 | What's the sum of all element that are greater than 10000 in Mar 31, 2008 (in thousand) | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Millions, Except Per Share Amounts) Long-term debt maturing over the next five years and thereafter is as follows:
<table><tr><td>2004</td><td>$ 244.5</td></tr><tr><td>2005</td><td>$ 523.8</td></tr><tr><td>2006</td><td>$ 338.5</td></tr><tr><td>2007</td><td>$ 0.9</td></tr><tr><td>2008</td><td>$ 0.9</td></tr><tr><td>2009 and thereafter</td><td>$1,327.6</td></tr></table>
Other On March 7, 2003, Standard & Poor's Ratings Services downgraded the Company's senior secured credit rating to BB+ with negative outlook from BBB-. On May 14, 2003, Fitch Ratings downgraded the Company's senior unsecured credit rating to BB+ with negative outlook from BBB-. On May 9, 2003, Moody's Investor Services, Inc. ("Moody's") placed the Company's senior unsecured and subordinated credit ratings on review for possible downgrade from Baa3 and Ba1, respectively. As of March 12, 2004, the Company's credit ratings continued to be on review for a possible downgrade. Since July 2001, the Company has not repurchased its common stock in the open market. In October 2003, the Company received a federal tax refund of approximately $90 as a result of its carryback of its 2002 loss for US federal income tax purposes and certain capital losses, to earlier periods. Through December 2002, the Company had paid cash dividends quarterly with the most recent quarterly dividend paid in December 2002 at a rate of $0.095 per share. On a quarterly basis, the Company's Board of Directors makes determinations regarding the payment of dividends. As previously discussed, the Company's ability to declare or pay dividends is currently restricted by the terms of its Revolving Credit Facilities. The Company did not declare or pay any dividends in 2003. However, in 2004, the Company expects to pay any dividends accruing on the Series A Mandatory Convertible Preferred Stock in cash, which is expressly permitted by the Revolving Credit Facilities. See Note 14 for discussion of fair market value of the Company's long-term debt. Note 9: Equity Offering On December 16, 2003, the Company sold 25.8 million shares of common stock and issued 7.5 million shares of 3- year Series A Mandatory Convertible Preferred Stock (the "Preferred Stock"). The total net proceeds received from the concurrent offerings was approximately $693. The Preferred Stock carries a dividend yield of 5.375%. On maturity, each share of the Preferred Stock will convert, subject to adjustment, to between 3.0358 and 3.7037 shares of common stock, depending on the then-current market price of the Company's common stock, representing a conversion premium of approximately 22% over the stock offering price of $13.50 per share. Under certain circumstances, the Preferred Stock may be converted prior to maturity at the option of the holders or the Company. The common and preferred stock were issued under the Company's existing shelf registration statement. In January 2004, the Company used approximately $246 of the net proceeds from the offerings to redeem the 1.80% Convertible Subordinated Notes due 2004. The remaining proceeds will be used for general corporate purposes and to further strengthen the Company's balance sheet and financial condition. The Company will pay annual dividends on each share of the Series A Mandatory Convertible Preferred Stock in the amount of $2.6875. Dividends will be cumulative from the date of issuance and will be payable on each payment date to the extent that dividends are not restricted under the Company's credit facilities and assets are legally available to pay dividends. The first dividend payment, which was declared on February 24, 2004, will be made on March 15, 2004. financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the unaudited quarterly data. This information should be read in conjunction with our Consolidated Financial Statements and related Notes included in this Annual Report on Form 10-K. The results of operations for any quarter are not necessarily indicative of results that we may achieve for any subsequent periods.
<table><tr><td></td><td colspan="8"> Three Months Ended</td></tr><tr><td></td><td> Mar 31, 2008</td><td> Jun 30, 2008</td><td> Sep 30, 2008</td><td> Dec 31, 2008</td><td> Mar 31, 2009</td><td> Jun 30, 2009</td><td> Sep 30, 2009</td><td> Dec 31, 2009</td></tr><tr><td></td><td colspan="8"> (In thousands)</td></tr><tr><td> Revenues</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commissions</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. high-grade-1</td><td>$12,402</td><td>$12,554</td><td>$10,777</td><td>$10,814</td><td>$13,515</td><td>$13,808</td><td>$16,306</td><td>$18,928</td></tr><tr><td>Eurobond-2</td><td>4,589</td><td>5,120</td><td>4,427</td><td>4,010</td><td>4,142</td><td>4,712</td><td>5,497</td><td>5,988</td></tr><tr><td>Other-3</td><td>2,304</td><td>2,464</td><td>2,015</td><td>2,052</td><td>2,789</td><td>3,310</td><td>3,486</td><td>3,651</td></tr><tr><td>Total commissions</td><td>19,295</td><td>20,138</td><td>17,219</td><td>16,876</td><td>20,446</td><td>21,830</td><td>25,289</td><td>28,567</td></tr><tr><td>Technology products and services-4</td><td>767</td><td>2,676</td><td>2,646</td><td>2,466</td><td>2,023</td><td>2,096</td><td>2,601</td><td>3,058</td></tr><tr><td>Information and user access fees-5</td><td>1,481</td><td>1,442</td><td>1,562</td><td>1,540</td><td>1,655</td><td>1,504</td><td>1,519</td><td>1,574</td></tr><tr><td>Interest income-6</td><td>991</td><td>761</td><td>963</td><td>763</td><td>332</td><td>234</td><td>314</td><td>342</td></tr><tr><td>Other-7</td><td>405</td><td>620</td><td>291</td><td>183</td><td>176</td><td>175</td><td>286</td><td>418</td></tr><tr><td>Total revenues</td><td>22,939</td><td>25,637</td><td>22,681</td><td>21,828</td><td>24,632</td><td>25,839</td><td>30,009</td><td>33,959</td></tr><tr><td> Expenses</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employee compensation and benefits</td><td>11,018</td><td>11,576</td><td>11,173</td><td>10,043</td><td>11,442</td><td>11,917</td><td>13,127</td><td>13,788</td></tr><tr><td>Depreciation and amortization</td><td>1,780</td><td>1,816</td><td>2,494</td><td>1,789</td><td>1,791</td><td>1,679</td><td>1,654</td><td>1,666</td></tr><tr><td>Technology and communications</td><td>2,106</td><td>2,048</td><td>2,007</td><td>2,150</td><td>2,242</td><td>2,120</td><td>2,029</td><td>2,045</td></tr><tr><td>Professional and consulting fees</td><td>2,153</td><td>2,521</td><td>1,822</td><td>1,675</td><td>1,879</td><td>1,613</td><td>1,645</td><td>1,732</td></tr><tr><td>Occupancy</td><td>767</td><td>739</td><td>660</td><td>725</td><td>676</td><td>693</td><td>706</td><td>1,054</td></tr><tr><td>Marketing and advertising</td><td>684</td><td>685</td><td>708</td><td>955</td><td>645</td><td>708</td><td>651</td><td>878</td></tr><tr><td>General and administrative</td><td>1,467</td><td>1,493</td><td>1,719</td><td>1,478</td><td>1,226</td><td>1,373</td><td>1,654</td><td>1,757</td></tr><tr><td>Total expenses</td><td>19,975</td><td>20,878</td><td>20,583</td><td>18,815</td><td>19,901</td><td>20,103</td><td>21,466</td><td>22,920</td></tr><tr><td>Income before income taxes</td><td>2,964</td><td>4,759</td><td>2,098</td><td>3,013</td><td>4,731</td><td>5,736</td><td>8,543</td><td>11,039</td></tr><tr><td>Provision for income taxes</td><td>1,368</td><td>1,911</td><td>579</td><td>1,077</td><td>1,892</td><td>2,549</td><td>3,903</td><td>5,603</td></tr><tr><td>Net income</td><td>$1,596</td><td>$2,848</td><td>$1,519</td><td>$1,936</td><td>$2,839</td><td>$3,187</td><td>$4,640</td><td>$5,436</td></tr></table>
(1) Of these amounts, $1,920, $2,137, $1,928, $1,761, $1,985, $2,039, $2,276 and $2,457, respectively, were from related parties. (2) Of these amounts, $804, $873, $788, $738, $783, $933, $1,049 and $1,052, respectively, were from related parties. (3) Of these amounts, $429, $437, $378, $273, $302, $378, $363 and $486, respectively, were from related parties. (4) Of these amounts, $15, $7, $3, $8, $9, $10, $9 and $7, respectively, were from related parties. (5) Of these amounts, $53, $73, $81, $69, $61, $64, $60 and $58, respectively, were from related parties. (6) Of these amounts, $267, $209, $310, $379, $90, $58, $36 and $30, respectively, were from related parties. (7) Of these amounts, $43, $45, $45, $38, $42, $38, $37 and $35, respectively, were from related parties. Table of Contents Index to Financial Statements counterparty does not fulfill its obligation to complete a transaction. Pursuant to the terms of the securities clearing agreements between us and the independent clearing broker, the clearing broker has the right to charge us for losses resulting from a counterparty’s failure to fulfill its contractual obligations. The losses are not capped at a maximum amount and apply to all trades executed through the clearing broker. At December 31, 2011, we had not recorded any liabilities with regard to this right. In the ordinary course of business, we enter into contracts that contain a variety of representations, warranties and general indemnifications. Our maximum exposure from any claims under these arrangements is unknown, as this would involve claims that have not yet occurred. However, based on past experience, we expect the risk of loss to be remote. In October 2011, our Board of Directors authorized a share repurchase program for up to $35.0 million of our common stock. As of December 31, 2011, a total of 237,998 shares were repurchased at an aggregate cost of $6.9 million. Shares repurchased under the program will be held in treasury for future use. Through February 16, 2012, a total of 820,894 shares have been repurchased at an aggregate cost of $25.2 million. In January 2012, the Company’s Board of Directors approved a quarterly cash dividend of $0.11 per share payable on March 1, 2012 to stockholders of record as of the close of business on February 16, 2012. Any future declaration and payment of dividends will be at the sole discretion of the Company’s Board of Directors. The Board of Directors may take into account such matters as general business conditions, the Company’s financial results, capital requirements, contractual, legal, and regulatory restrictions on the payment of dividends to the Company’s stockholders or by the Company’s subsidiaries to the parent and any such other factors as the Board of Directors may deem relevant. Effects of Inflation Because the majority of our assets are liquid in nature, they are not significantly affected by inflation. However, the rate of inflation may affect our expenses, such as employee compensation, office leasing costs and communications expenses, which may not be readily recoverable in the prices of our services. To the extent inflation results in rising interest rates and has other adverse effects on the securities markets, it may adversely affect our financial position and results of operations. Contractual Obligations and Commitments As of December 31, 2011, we had the following contractual obligations and commitments:
<table><tr><td></td><td colspan="5"> Payments due by period</td></tr><tr><td></td><td> Total</td><td> Less than 1 year</td><td> 1 - 3 years</td><td> 3 - 5 years</td><td> More than 5 years</td></tr><tr><td></td><td colspan="5"> (In thousands)</td></tr><tr><td>Operating leases</td><td>$19,551</td><td>$1,805</td><td>$3,546</td><td>$4,041</td><td>$10,159</td></tr><tr><td>Capital leases</td><td>700</td><td>336</td><td>364</td><td>—</td><td>—</td></tr><tr><td>Foreign currency forward contract</td><td>28,516</td><td>28,516</td><td>—</td><td>—</td><td>—</td></tr><tr><td></td><td>$48,767</td><td>$30,657</td><td>$3,910</td><td>$4,041</td><td>$10,159</td></tr></table>
We enter into foreign currency forward contracts with a non-controlling stockholder broker-dealer client to hedge the exposure to variability in foreign currency cash flows resulting from the net investment in our U. K. subsidiary. As of December 31, 2011, the notional value of the foreign currency forward contract outstanding was $28.7 million and the gross and net fair value asset was $0.2 million. As of December 31, 2011, we had unrecognized tax benefits of $3.6 million. Due to the nature of the underlying positions, it is not currently possible to schedule the future payment obligations by period. In January 2012, our Board of Directors approved a quarterly dividend to be paid to the holders of the outstanding shares of capital stock. A cash dividend of $0.11 per share of voting and non-voting common stock outstanding will be payable on March 1, 2012 to stockholders of record as of the close of business on February 16, 2012. We expect the total amount payable to be approximately $4.2 million. The following table presents our capital spend for 2015, 2016 and 2017 organized by the type of the spending as described above:
<table><tr><td></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>Nature of Capital Spend (in thousands)</td><td>2015</td><td>2016</td><td>2017</td></tr><tr><td>Real Estate:</td><td colspan="3"></td></tr><tr><td></td><td></td><td>Investment</td><td>$151,695</td></tr><tr><td>$133,079</td><td>$139,822</td><td>Maintenance</td><td>52,826</td></tr><tr><td>63,543</td><td>77,660</td><td>Total Real Estate Capital Spend</td><td>204,521</td></tr><tr><td>196,622</td><td>217,482</td><td>Non-Real Estate:</td><td></td></tr><tr><td></td><td></td><td>Investment</td><td>46,411</td></tr><tr><td>40,509</td><td>56,297</td><td>Maintenance</td><td>23,372</td></tr><tr><td>20,642</td><td>29,721</td><td>Total Non-Real Estate Capital Spend</td><td>69,783</td></tr><tr><td>61,151</td><td>86,018</td><td>Data Center Investment and Maintenance Capital Spend</td><td>20,624</td></tr><tr><td>72,728</td><td>92,597</td><td>Innovation and Growth Investment Capital Spend</td><td>—</td></tr><tr><td>8,573</td><td>20,583</td><td>Total Capital Spend (on accrual basis)</td><td>294,928</td></tr><tr><td>339,074</td><td>416,680</td><td>Net (decrease) increase in prepaid capital expenditures</td><td>-362</td></tr><tr><td>374</td><td>1,629</td><td>Net (increase) decrease accrued capital expenditures(1)</td><td>-4,317</td></tr><tr><td>-10,845</td><td>-75,178</td><td>Total Capital Spend (on cash basis)</td><td>$290,249</td></tr></table>
Non-Real Estate: (1) The amount at December 31, 2017 includes approximately $66,800 related to a capital lease associated with our data center in Manassas, Virginia. Competition We are a global leader in the physical storage and information management services industry with operations in 53 countries as of December 31, 2017. We compete with our current and potential customers' internal storage and information management services capabilities. We compete with numerous storage and information management services providers in every geographic area where we operate. The physical storage and information management services industry is highly competitive and includes thousands of competitors in North America and around the world. We believe that competition for records and information customers is based on price, reputation and reliability, quality and security of storage, quality of service and scope and scale of technology, and we believe we generally compete effectively in these areas. We also compete with numerous data center developers, owners and operators, many of whom own properties similar to ours in some of the same metropolitan areas where our facilities are located. We believe that competition for data center customers is based on available power, security considerations, location, connectivity and rental rates, and we believe we generally compete effectively in each of these areas. Alternative Technologies We derive most of our revenues from rental fees for the storage of physical records and computer backup tapes and from storage related services. Alternative storage technologies exist, many of which require significantly less space than physical documents and tapes, and as alternative technologies are adopted, storage related services may decline as the physical records or tapes we store become less active and more archived. While storage of physical documents continues to grow, we continue to provide, primarily through partnerships, additional services such as online backup, designed to address our customers' need for efficient, cost-effective, high-quality solutions for electronic records and storage and information management. Employees As of December 31, 2017, we employed more than 8,400 employees in the United States and more than 15,600 employees outside of the United States. At December 31, 2017, approximately 700 employees were represented by unions in North America (in California, Illinois, Georgia, New Jersey and Pennsylvania and three provinces in Canada) and approximately 3,600 employees were represented by unions in Latin America (in Argentina, Brazil and Chile). We use a measurement date of December 31 for plan assets and benefit obligations. A reconciliation of the changes in the projected benefit obligation for qualified pension, nonqualified pension and postretirement benefit plans as well as the change in plan assets for the qualified pension plan follows. Table 96: Reconciliation of Changes in Projected Benefit Obligation and Change in Plan Assets
<table><tr><td></td><td colspan="2">Qualified Pension</td><td colspan="2">Nonqualified Pension</td><td colspan="2">Postretirement Benefits</td></tr><tr><td>December 31 (Measurement Date) – in millions</td><td>2015</td><td>2014</td><td>2015</td><td>2014</td><td>2015</td><td>2014</td></tr><tr><td>Accumulated benefit obligation at end of year</td><td>$4,330</td><td>$4,427</td><td>$292</td><td>$316</td><td></td><td></td></tr><tr><td>Projected benefit obligation at beginning of year</td><td>$4,499</td><td>$3,966</td><td>$322</td><td>$292</td><td>$379</td><td>$375</td></tr><tr><td>Service cost</td><td>107</td><td>103</td><td>3</td><td>3</td><td>5</td><td>5</td></tr><tr><td>Interest cost</td><td>177</td><td>187</td><td>11</td><td>12</td><td>15</td><td>16</td></tr><tr><td>Plan amendments</td><td></td><td>-7</td><td></td><td></td><td></td><td></td></tr><tr><td>Actuarial (gains)/losses and changes in assumptions</td><td>-126</td><td>504</td><td>-10</td><td>40</td><td>-9</td><td>4</td></tr><tr><td>Participant contributions</td><td></td><td></td><td></td><td></td><td>5</td><td>8</td></tr><tr><td>Federal Medicare subsidy on benefits paid</td><td></td><td></td><td></td><td></td><td>2</td><td>2</td></tr><tr><td>Benefits paid</td><td>-260</td><td>-254</td><td>-28</td><td>-25</td><td>-28</td><td>-31</td></tr><tr><td>Settlement payments</td><td></td><td></td><td></td><td></td><td>-1</td><td></td></tr><tr><td>Projected benefit obligation at end of year</td><td>$4,397</td><td>$4,499</td><td>$298</td><td>$322</td><td>$368</td><td>$379</td></tr><tr><td>Fair value of plan assets at beginning of year</td><td>$4,357</td><td>$4,252</td><td></td><td></td><td></td><td></td></tr><tr><td>Actual return on plan assets</td><td>19</td><td>359</td><td></td><td></td><td></td><td></td></tr><tr><td>Employer contribution</td><td>200</td><td></td><td>$28</td><td>$25</td><td>$222</td><td>$21</td></tr><tr><td>Participant contributions</td><td></td><td></td><td></td><td></td><td>5</td><td>8</td></tr><tr><td>Federal Medicare subsidy on benefits paid</td><td></td><td></td><td></td><td></td><td>2</td><td>2</td></tr><tr><td>Benefits paid</td><td>-260</td><td>-254</td><td>-28</td><td>-25</td><td>-28</td><td>-31</td></tr><tr><td>Settlement payments</td><td></td><td></td><td></td><td></td><td>-1</td><td></td></tr><tr><td>Fair value of plan assets at end of year</td><td>$4,316</td><td>$4,357</td><td></td><td></td><td>$200</td><td></td></tr><tr><td>Funded status</td><td>$-81</td><td>$-142</td><td>$-298</td><td>$-322</td><td>$-168</td><td>$-379</td></tr><tr><td>Amounts recognized on the consolidated balance sheet</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Noncurrent asset</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Current liability</td><td></td><td></td><td>$-27</td><td>$-31</td><td>$-2</td><td>$-25</td></tr><tr><td>Noncurrent liability</td><td>$-81</td><td>$-142</td><td>-271</td><td>-291</td><td>-166</td><td>-354</td></tr><tr><td>Net amount recognized on the consolidated balance sheet</td><td>$-81</td><td>$-142</td><td>$-298</td><td>$-322</td><td>$-168</td><td>$-379</td></tr><tr><td>Amounts recognized in accumulated other comprehensive income consist of:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Prior service cost (credit)</td><td>$-13</td><td>$-22</td><td>$1</td><td>$1</td><td>$-3</td><td>$-4</td></tr><tr><td>Net actuarial loss</td><td>794</td><td>673</td><td>71</td><td>88</td><td>22</td><td>31</td></tr><tr><td>Amount recognized in AOCI</td><td>$781</td><td>$651</td><td>$72</td><td>$89</td><td>$19</td><td>$27</td></tr></table>
At December 31, 2015, the fair value of the qualified pension plan assets was less than both the accumulated benefit obligation and the projected benefit obligation. The nonqualified pension plan is unfunded. Contributions from PNC and, in the case of the postretirement benefit plans, participant contributions cover all benefits paid under the nonqualified pension plan and postretirement benefit plans. The postretirement plan provides benefits to certain retirees that are at least actuarially equivalent to those provided by Medicare Part D and accordingly, we receive a federal subsidy as shown in Table 96. In March 2010, the Patient Protection and Affordable Care Act (PPACA) was enacted. Key aspects of the PPACA which are reflected in our consolidated financial statements include the excise tax on high-cost health plans beginning in 2018 and fees for the Transitional Reinsurance Program and the PatientCentered Outcomes Research Institute. These provisions did not have a significant effect on our postretirement medical liability or costs. The Early Retiree Reinsurance Program (ERRP) was established by the PPACA. Congress appropriated funding of $5.0 billion for this temporary ERRP to provide financial assistance to employers, unions, and state and local governments to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare, including their spouses, surviving spouses, and dependents. PNC did not receive reimbursement in 2014 related to the 2013 plan year. The ERRP terminated effective January 1, 2014. In 2011, we transferred approximately 1.3 million shares of BlackRock Series C Preferred Stock to BlackRock in connection with our obligation. In 2013, we transferred an additional .2 million shares to BlackRock. At December 31, 2015, we held approximately 1.3 million shares of BlackRock Series C Preferred Stock which were available to fund our obligation in connection with the BlackRock LTIP programs. See Note 24 Subsequent Events for information on our February 1, 2016 transfer of 0.5 million shares of the Series C Preferred Stock to BlackRock to satisfy a portion of our LTIP obligation. PNC accounts for its BlackRock Series C Preferred Stock at fair value, which offsets the impact of marking-to-market the obligation to deliver these shares to BlackRock. The fair value of the BlackRock Series C Preferred Stock is included on our Consolidated Balance Sheet in the caption Other assets. Additional information regarding the valuation of the BlackRock Series C Preferred Stock is included in Note 7 Fair Value. NOTE 14 FINANCIAL DERIVATIVES We use derivative financial instruments (derivatives) primarily to help manage exposure to interest rate, market and credit risk and reduce the effects that changes in interest rates may have on net income, the fair value of assets and liabilities, and cash flows. We also enter into derivatives with customers to facilitate their risk management activities. Derivatives represent contracts between parties that usually require little or no initial net investment and result in one party delivering cash or another type of asset to the other party based on a notional amount and an underlying as specified in the contract. Derivative transactions are often measured in terms of notional amount, but this amount is generally not exchanged and it is not recorded on the balance sheet. The notional amount is the basis to which the underlying is applied to determine required payments under the derivative contract. The underlying is a referenced interest rate (commonly LIBOR), security price, credit spread or other index. Residential and commercial real estate loan commitments associated with loans to be sold also qualify as derivative instruments. |
-0.17086 | In the year with lowest amount of Deposits with banks Average volume, what's the increasing rate of Deposits with banks Average volume? | As of December 31, 2009, approximately $6.7 billion of stock repurchases remained under Citi’s authorized repurchase programs. No material repurchases were made in 2009 or 2008. In addition, for so long as the U. S. government holds any Citigroup common stock or trust preferred securities acquired pursuant to the preferred stock exchange offers, Citigroup has agreed not to acquire, repurchase, or redeem any Citigroup equity or trust preferred securities, other than pursuant to administering its employee benefit plans or other customary exceptions, or with the consent of the U. S. government. See also “Supervision and Regulation. ” Tangible Common Equity TCE, as defined by Citigroup, represents Common equity less Goodwill and Intangible assets (other than Mortgage Servicing Rights (MSRs)) net of the related net deferred taxes. Other companies may calculate TCE in a manner different from that of Citigroup. Citi’s TCE was $118.2 billion and $31.1 billion at December 31, 2009 and 2008, respectively. The TCE ratio (TCE divided by risk-weighted assets) was 10.9% and 3.1% at December 31, 2009 and 2008, respectively. A reconciliation of Citigroup’s total stockholders’ equity to TCE follows:
<table><tr><td>In millions of dollars at year end, except ratios</td><td>2009</td><td>2008</td></tr><tr><td>Total Citigroup stockholders’ equity</td><td>$152,700</td><td>$141,630</td></tr><tr><td>Less:</td><td></td><td></td></tr><tr><td>Preferred stock</td><td>312</td><td>70,664</td></tr><tr><td>Common equity</td><td>$152,388</td><td>$70,966</td></tr><tr><td>Less:</td><td></td><td></td></tr><tr><td>Goodwill</td><td>25,392</td><td>27,132</td></tr><tr><td>Intangible assets (other than MSRs)</td><td>8,714</td><td>14,159</td></tr><tr><td>Related net deferred taxes</td><td>68</td><td>-1,382</td></tr><tr><td>Tangible common equity (TCE)</td><td>$118,214</td><td>$31,057</td></tr><tr><td>Tangible assets</td><td></td><td></td></tr><tr><td>GAAP assets</td><td>$1,856,646</td><td>$1,938,470</td></tr><tr><td>Less:</td><td></td><td></td></tr><tr><td>Goodwill</td><td>25,392</td><td>27,132</td></tr><tr><td>Intangible assets (other than MSRs)</td><td>8,714</td><td>14,159</td></tr><tr><td>Related deferred tax assets</td><td>386</td><td>1,285</td></tr><tr><td>Tangible assets (TA)</td><td>$1,822,154</td><td>$1,895,894</td></tr><tr><td>Risk-weighted assets (RWA)</td><td>$1,088,526</td><td>$996,247</td></tr><tr><td>TCE/TA ratio</td><td>6.49%</td><td>1.64%</td></tr><tr><td>TCE ratio(TCE/RWA)</td><td>10.86%</td><td>3.12%</td></tr></table>
Capital Resources of Citigroup’s Depository Institutions Citigroup’s U. S. subsidiary depository institutions are subject to risk-based capital guidelines issued by their respective primary federal bank regulatory agencies, which are similar to the guidelines of the Federal Reserve Board. To be “well capitalized” under these regulatory definitions, Citigroup’s depository institutions must have a Tier 1 Capital ratio of at least 6%, a Total Capital (Tier 1 Capital + Tier 2 Capital) ratio of at least 10%, and a Leverage ratio of at least 5%, and not be subject to a regulatory directive to meet and maintain higher capital levels. At December 31, 2009, all of Citigroup’s subsidiary depository institutions were “well capitalized” under federal bank regulatory agency definitions, including Citigroup’s primary depository institution, Citibank, N. A. , as noted in the following table: Citibank, N. A. Components of Capital and Ratios Under Regulatory Guidelines
<table><tr><td>In billions of dollars at year end</td><td>2009</td><td>2008</td></tr><tr><td>Tier 1 Capital</td><td>$96.8</td><td>$71.0</td></tr><tr><td>Total Capital (Tier 1 Capital and Tier 2 Capital)</td><td>110.6</td><td>108.4</td></tr><tr><td>Tier 1 Capital ratio</td><td>13.16%</td><td>9.94%</td></tr><tr><td>Total Capital ratio</td><td>15.03</td><td>15.18</td></tr><tr><td>Leverage ratio-1</td><td>8.31</td><td>5.82</td></tr></table>
(1) Tier 1 Capital divided by each period’s quarterly adjusted average total assets. Citibank, N. A. had a $2.8 billion net loss for 2009. In addition, during 2009, Citibank, N. A. received capital contributions from its immediate parent company, Citicorp, in the amount of $33.0 billion. Total subordinated notes issued to Citibank, N. A. ’s immediate parent company, Citicorp, included in Citibank, N. A. ’s Tier 2 Capital declined from $28.2 billion outstanding at December 31, 2008 to $4.0 billion outstanding at December 31, 2009, reflecting the redemption of $24.2 billion of subordinated notes during 2009. then-current assessment base in the quarter determined by the FDIC. If the FDIC were to adopt this approach, Citi estimates the net impact to Citibank would be approximately $900 million, based on its current assessment base. As an alternative to either of the proposals put forth by the FDIC, in commenting on the FDIC鈥檚 notice of proposed rulemaking, industry groups recommended that in lieu of any surcharge on large banks, the FDIC maintain the assessment rate framework in effect as of year-end 2015 until the reserve ratio reaches 1.35%, which would be expected to occur by year-end 2019 (and within the timeframe required under the Dodd-Frank Act). It is not certain when the FDIC鈥檚 proposal will be finalized and what the ultimate impact will be to Citi. Additional Interest Rate Details Average Balances and Interest Rates鈥擜ssets(1)(2)(3)(4)
<table><tr><td></td><td colspan="3">Average volume</td><td colspan="3">Interest revenue</td><td colspan="3">% Average rate</td></tr><tr><td>In millions of dollars, except rates</td><td>2015</td><td>2014</td><td>2013</td><td>2015</td><td>2014</td><td>2013</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Assets</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deposits with banks<sup>-5</sup></td><td>$133,790</td><td>$161,359</td><td>$144,904</td><td>$727</td><td>$959</td><td>$1,026</td><td>0.54%</td><td>0.59%</td><td>0.71%</td></tr><tr><td>Federal funds sold and securities borrowed or purchased under agreements to resell<sup>-6</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In U.S. offices</td><td>$150,359</td><td>$153,688</td><td>$158,237</td><td>$1,211</td><td>$1,034</td><td>$1,133</td><td>0.81%</td><td>0.67%</td><td>0.72%</td></tr><tr><td>In offices outside the U.S.<sup>-5</sup></td><td>84,006</td><td>101,177</td><td>109,233</td><td>1,305</td><td>1,332</td><td>1,433</td><td>1.55</td><td>1.32</td><td>1.31</td></tr><tr><td>Total</td><td>$234,365</td><td>$254,865</td><td>$267,470</td><td>$2,516</td><td>$2,366</td><td>$2,566</td><td>1.07%</td><td>0.93%</td><td>0.96%</td></tr><tr><td>Trading account assets<sup>-7(8)</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In U.S. offices</td><td>$114,639</td><td>$114,910</td><td>$126,123</td><td>$3,945</td><td>$3,472</td><td>$3,728</td><td>3.44%</td><td>3.02%</td><td>2.96%</td></tr><tr><td>In offices outside the U.S.<sup>-5</sup></td><td>103,348</td><td>119,801</td><td>127,291</td><td>2,141</td><td>2,538</td><td>2,683</td><td>2.07</td><td>2.12</td><td>2.11</td></tr><tr><td>Total</td><td>$217,987</td><td>$234,711</td><td>$253,414</td><td>$6,086</td><td>$6,010</td><td>$6,411</td><td>2.79%</td><td>2.56%</td><td>2.53%</td></tr><tr><td>Investments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In U.S. offices</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>$214,714</td><td>$188,910</td><td>$174,084</td><td>$3,812</td><td>$3,286</td><td>$2,713</td><td>1.78%</td><td>1.74%</td><td>1.56%</td></tr><tr><td>Exempt from U.S. income tax</td><td>20,034</td><td>20,386</td><td>18,075</td><td>443</td><td>626</td><td>811</td><td>2.21</td><td>3.07</td><td>4.49</td></tr><tr><td>In offices outside the U.S.<sup>-5</sup></td><td>102,376</td><td>113,163</td><td>114,122</td><td>3,071</td><td>3,627</td><td>3,761</td><td>3.00</td><td>3.21</td><td>3.30</td></tr><tr><td>Total</td><td>$337,124</td><td>$322,459</td><td>$306,281</td><td>$7,326</td><td>$7,539</td><td>$7,285</td><td>2.17%</td><td>2.34%</td><td>2.38%</td></tr><tr><td>Loans (net of unearned income)<sup>(9)</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In U.S. offices</td><td>$354,439</td><td>$361,769</td><td>$354,707</td><td>$24,558</td><td>$26,076</td><td>$25,941</td><td>6.93%</td><td>7.21%</td><td>7.31%</td></tr><tr><td>In offices outside the U.S.<sup>-5</sup></td><td>273,072</td><td>296,656</td><td>292,852</td><td>15,988</td><td>18,723</td><td>19,660</td><td>5.85</td><td>6.31</td><td>6.71</td></tr><tr><td>Total</td><td>$627,511</td><td>$658,425</td><td>$647,559</td><td>$40,546</td><td>$44,799</td><td>$45,601</td><td>6.46%</td><td>6.80%</td><td>7.04%</td></tr><tr><td>Other interest-earning assets<sup>-10</sup></td><td>$55,060</td><td>$40,375</td><td>$38,233</td><td>$1,839</td><td>$507</td><td>$602</td><td>3.34%</td><td>1.26%</td><td>1.57%</td></tr><tr><td>Total interest-earning assets</td><td>$1,605,837</td><td>$1,672,194</td><td>$1,657,861</td><td>$59,040</td><td>$62,180</td><td>$63,491</td><td>3.68%</td><td>3.72%</td><td>3.83%</td></tr><tr><td>Non-interest-earning assets<sup>-7</sup></td><td>$218,000</td><td>$224,721</td><td>$222,526</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets from discontinued operations</td><td>—</td><td>—</td><td>2,909</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$1,823,837</td><td>$1,896,915</td><td>$1,883,296</td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
Net interest revenue includes the taxable equivalent adjustments related to the tax-exempt bond portfolio (based on the U. S. federal statutory tax rate of 35%) of $487 million, $498 million and $521 million for 2015, 2014 and 2013, respectively. Interest rates and amounts include the effects of risk management activities associated with the respective asset categories. Monthly or quarterly averages have been used by certain subsidiaries where daily averages are unavailable. Detailed average volume, Interest revenue and Interest expense exclude Discontinued operations. See Note 2 to the Consolidated Financial Statements. Average rates reflect prevailing local interest rates, including inflationary effects and monetary corrections in certain countries. Average volumes of securities borrowed or purchased under agreements to resell are reported net pursuant to ASC 210-20-45. However, Interest revenue excludes the impact of ASC 210-20-45. The fair value carrying amounts of derivative contracts are reported net, pursuant to ASC 815-10-45, in Non-interest-earning assets and Other non-interest bearing liabilities. Interest expense on Trading account liabilities of ICG is reported as a reduction of Interest revenue. Interest revenue and Interest expense on cash collateral positions are reported in interest on Trading account assets and Trading account liabilities, respectively. Includes cash-basis loans. Includes brokerage receivables. During 2015, continued management actions, primarily the sale or transfer to held-for-sale of approximately $1.5 billion of delinquent residential first mortgages, including $0.9 billion in the fourth quarter largely associated with the transfer of CitiFinancial loans to held-for-sale referenced above, were the primary driver of the overall improvement in delinquencies within Citi Holdings’ residential first mortgage portfolio. Credit performance from quarter to quarter could continue to be impacted by the amount of delinquent loan sales or transfers to held-for-sale, as well as overall trends in HPI and interest rates. North America Residential First Mortgages—State Delinquency Trends The following tables set forth the six U. S. states and/or regions with the highest concentration of Citi’s residential first mortgages.
<table><tr><td>In billions of dollars</td><td>December 31, 2015</td><td>December 31, 2014</td></tr><tr><td>State<sup>-1</sup></td><td>ENR<sup>-2</sup></td><td>ENRDistribution</td><td>90+DPD%</td><td>%LTV >100%<sup>-3</sup></td><td>RefreshedFICO</td><td>ENR<sup>-2</sup></td><td>ENRDistribution</td><td>90+DPD%</td><td>%LTV >100%<sup>-3</sup></td><td>RefreshedFICO</td></tr><tr><td>CA</td><td>$19.2</td><td>37%</td><td>0.2%</td><td>1%</td><td>754</td><td>$18.9</td><td>31%</td><td>0.6%</td><td>2%</td><td>745</td></tr><tr><td>NY/NJ/CT<sup>-4</sup></td><td>12.7</td><td>25</td><td>0.8</td><td>1</td><td>751</td><td>12.2</td><td>20</td><td>1.9</td><td>2</td><td>740</td></tr><tr><td>VA/MD</td><td>2.2</td><td>4</td><td>1.2</td><td>2</td><td>719</td><td>3.0</td><td>5</td><td>3.0</td><td>8</td><td>695</td></tr><tr><td>IL<sup>-4</sup></td><td>2.2</td><td>4</td><td>1.0</td><td>3</td><td>735</td><td>2.5</td><td>4</td><td>2.5</td><td>9</td><td>713</td></tr><tr><td>FL<sup>-4</sup></td><td>2.2</td><td>4</td><td>1.1</td><td>4</td><td>723</td><td>2.8</td><td>5</td><td>3.0</td><td>14</td><td>700</td></tr><tr><td>TX</td><td>1.9</td><td>4</td><td>1.0</td><td>—</td><td>711</td><td>2.5</td><td>4</td><td>2.7</td><td>—</td><td>680</td></tr><tr><td>Other</td><td>11.0</td><td>21</td><td>1.3</td><td>2</td><td>710</td><td>18.2</td><td>30</td><td>3.3</td><td>7</td><td>677</td></tr><tr><td>Total<sup>-5</sup></td><td>$51.5</td><td>100%</td><td>0.7%</td><td>1%</td><td>738</td><td>$60.1</td><td>100%</td><td>2.1%</td><td>4%</td><td>715</td></tr></table>
Note: Totals may not sum due to rounding. (1) Certain of the states are included as part of a region based on Citi’s view of similar HPI within the region. (2) Ending net receivables. Excludes loans in Canada and Puerto Rico, loans guaranteed by U. S. government agencies, loans recorded at fair value and loans subject to long term standby commitments (LTSCs). Excludes balances for which FICO or LTV data are unavailable. (3) LTV ratios (loan balance divided by appraised value) are calculated at origination and updated by applying market price data. (4) New York, New Jersey, Connecticut, Florida and Illinois are judicial states. (5) Improvement in state trends during 2015 was primarily due to the sale or transfer to held-for-sale of residential first mortgages, including the transfer of CitiFinancial residential first mortgages to held-for-sale in the fourth quarter of 2015. Foreclosures A substantial majority of Citi’s foreclosure inventory consists of residential first mortgages. At December 31, 2015, Citi’s foreclosure inventory included approximately $0.1 billion, or 0.2%, of the total residential first mortgage portfolio, compared to $0.6 billion, or 0.9%, at December 31, 2014, based on the dollar amount of ending net receivables of loans in foreclosure inventory, excluding loans that are guaranteed by U. S. government agencies and loans subject to LTSCs. North America Consumer Mortgage Quarterly Credit Trends —Net Credit Losses and Delinquencies—Home Equity Loans Citi’s home equity loan portfolio consists of both fixed-rate home equity loans and loans extended under home equity lines of credit. Fixed-rate home equity loans are fully amortizing. Home equity lines of credit allow for amounts to be drawn for a period of time with the payment of interest only and then, at the end of the draw period, the then-outstanding amount is converted to an amortizing loan (the interest-only payment feature during the revolving period is standard for this product across the industry). After conversion, the home equity loans typically have a 20-year amortization period. As of December 31, 2015, Citi’s home equity loan portfolio of $22.8 billion consisted of $6.3 billion of fixed-rate home equity loans and $16.5 billion of loans extended under home equity lines of credit (Revolving HELOCs). |
1 | Does Net actuarial loss keeps increasing each year between 2014 and 2016? | Liquidity Monitoring and Measurement Stress Testing Liquidity stress testing is performed for each of Citi’s major entities, operating subsidiaries and/or countries. Stress testing and scenario analyses are intended to quantify the potential impact of a liquidity event on the balance sheet and liquidity position, and to identify viable funding alternatives that can be utilized. These scenarios include assumptions about significant changes in key funding sources, market triggers (such as credit ratings), potential uses of funding and political and economic conditions in certain countries. These conditions include expected and stressed market conditions as well as Companyspecific events. Liquidity stress tests are conducted to ascertain potential mismatches between liquidity sources and uses over a variety of time horizons (overnight, one week, two weeks, one month, three months, one year) and over a variety of stressed conditions. Liquidity limits are set accordingly. To monitor the liquidity of an entity, these stress tests and potential mismatches are calculated with varying frequencies, with several tests performed daily. Given the range of potential stresses, Citi maintains a series of contingency funding plans on a consolidated basis and for individual entities. These plans specify a wide range of readily available actions for a variety of adverse market conditions or idiosyncratic stresses. Short-Term Liquidity Measurement: Liquidity Coverage Ratio (LCR) In addition to internal measures that Citi has developed for a 30-day stress scenario, Citi also monitors its liquidity by reference to the LCR, as calculated pursuant to the U. S. LCR rules. Generally, the LCR is designed to ensure that banks maintain an adequate level of HQLA to meet liquidity needs under an acute 30-day stress scenario. The LCR is calculated by dividing HQLA by estimated net outflows over a stressed 30-day period, with the net outflows determined by applying prescribed outflow factors to various categories of liabilities, such as deposits, unsecured and secured wholesale borrowings, unused lending commitments and derivativesrelated exposures, partially offset by inflows from assets maturing within 30 days. Banks are required to calculate an add-on to address potential maturity mismatches between contractual cash outflows and inflows within the 30-day period in determining the total amount of net outflows. The minimum LCR requirement is 100%, effective January 2017. In December 2016, the Federal Reserve Board adopted final rules which require additional disclosures relating to the LCR of large financial institutions, including Citi. Among other things, the final rules require Citi to disclose components of its average HQLA, LCR and inflows and outflows each quarter. In addition, the final rules require disclosure of Citi’s calculation of the maturity mismatch add-on as well as other qualitative disclosures. The effective date for these disclosures is April 1, 2017.
<table><tr><td>In billions of dollars</td><td>Dec. 31, 2016</td><td>Sept. 30, 2016</td><td>Dec. 31, 2015</td></tr><tr><td>HQLA</td><td>$403.7</td><td>$403.8</td><td>$389.2</td></tr><tr><td>Net outflows</td><td>332.5</td><td>335.3</td><td>344.4</td></tr><tr><td>LCR</td><td>121%</td><td>120%</td><td>113%</td></tr><tr><td>HQLA in excess of net outflows</td><td>$71.3</td><td>$68.5</td><td>$44.8</td></tr></table>
The table below sets forth the components of Citi’s LCR calculation and HQLA in excess of net outflows for the periods indicated: Note: Amounts set forth in the table above are presented on an average basis. As set forth in the table above, Citi’s LCR increased both year-over-year and sequentially. The increase year-over-year was driven by both an increase in HQLA and a reduction in net outflows. Sequentially, the increase was driven by a slight reduction in net outflows, as HQLA remained largely unchanged. Long-Term Liquidity Measurement: Net Stable Funding Ratio (NSFR) In the second quarter of 2016, the Federal Reserve Board, the FDIC and the OCC issued a proposed rule to implement the Basel III NSFR requirement. The U. S. -proposed NSFR is largely consistent with the Basel Committee’s final NSFR rules. In general, the NSFR assesses the availability of a bank’s stable funding against a required level. A bank’s available stable funding would include portions of equity, deposits and long-term debt, while its required stable funding would be based on the liquidity characteristics of its assets, derivatives and commitments. Standardized weightings would be required to be applied to the various asset and liabilities classes. The ratio of available stable funding to required stable funding would be required to be greater than 100%. While Citi believes that it is compliant with the proposed U. S. NSFR rules as of December 31, 2016, it will need to evaluate any final version of the rules, which are expected to be released during 2017. The proposed rules would require full implementation of the U. S. NSFR beginning January 1, 2018. 8. RETIREMENT BENEFITS Pension and Postretirement Plans 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 U. S. The U. S. qualified defined benefit plan was frozen effective January 1, 2008 for most employees. Accordingly, no additional compensation-based contributions have been credited to the cash balance portion of the plan for existing plan participants after 2007. However, certain employees covered 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 U. S. The Company also sponsors a number of non-contributory, nonqualified pension plans. These plans, which are unfunded, provide supplemental defined pension benefits to certain U. S. employees. With the exception of certain employees covered under the prior final pay plan formula, the benefits under these plans were frozen in prior years. The plan obligations, plan assets and periodic plan expense for the Company鈥檚 most significant pension and postretirement benefit plans (Significant Plans) are measured and disclosed quarterly, instead of annually. The Significant Plans captured approximately 90% of the Company鈥檚 global pension and postretirement plan obligations as of December 31, 2016. All other plans (All Other Plans) are measured annually with a December 31 measurement date. Net (Benefit) Expense The following table summarizes the components of net (benefit) expense recognized in the Consolidated Statement of Income for the Company鈥檚 pension and postretirement plans, for Significant Plans and All Other Plans:
<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>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><td>2016</td><td>2015</td><td>2014</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>$3</td><td>$4</td><td>$6</td><td>$154</td><td>$168</td><td>$178</td><td>$—</td><td>$—</td><td>$—</td><td>$10</td><td>$12</td><td>$15</td></tr><tr><td>Interest cost on benefit obligation</td><td>520</td><td>553</td><td>541</td><td>282</td><td>317</td><td>376</td><td>25</td><td>33</td><td>33</td><td>94</td><td>108</td><td>120</td></tr><tr><td>Expected return on plan assets</td><td>-886</td><td>-893</td><td>-878</td><td>-287</td><td>-323</td><td>-384</td><td>-9</td><td>-3</td><td>-1</td><td>-86</td><td>-105</td><td>-121</td></tr><tr><td>Amortization of unrecognized</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Prior service (benefit) cost</td><td>—</td><td>-3</td><td>-3</td><td>-1</td><td>2</td><td>1</td><td>—</td><td>—</td><td>—</td><td>-10</td><td>-11</td><td>-12</td></tr><tr><td>Net actuarial loss</td><td>160</td><td>139</td><td>105</td><td>69</td><td>73</td><td>77</td><td>-1</td><td>—</td><td>—</td><td>30</td><td>43</td><td>39</td></tr><tr><td>Curtailment loss (gain)<sup>(1)</sup></td><td>13</td><td>14</td><td>—</td><td>-2</td><td>—</td><td>14</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-1</td><td>—</td></tr><tr><td>Settlement loss (gain)<sup>(1)</sup></td><td>—</td><td>—</td><td>—</td><td>6</td><td>44</td><td>53</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Special termination benefits<sup>-1</sup></td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>9</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net qualified plans (benefit) expense</td><td>$-190</td><td>$-186</td><td>$-229</td><td>$221</td><td>$281</td><td>$324</td><td>$15</td><td>$30</td><td>$32</td><td>$38</td><td>$46</td><td>$41</td></tr><tr><td>Nonqualified plans expense</td><td>$40</td><td>$43</td><td>$45</td><td>$—</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>$-150</td><td>$-143</td><td>$-184</td><td>$221</td><td>$281</td><td>$324</td><td>$15</td><td>$30</td><td>$32</td><td>$38</td><td>$46</td><td>$41</td></tr></table>
(1) Losses and gains due to curtailment, settlement and special termination benefits relate to repositioning and divestiture actions. The estimated net actuarial loss and prior service (benefit) cost that will be amortized from Accumulated other comprehensive income (loss) into net expense in 2017 are approximately $233 million and $(2) million, respectively, for defined benefit pension plans. For postretirement plans, the estimated 2017 net actuarial loss and prior service (benefit) cost amortizations are approximately $28 million and $(9) million, respectively. Results of Operations
<table><tr><td></td><td>2009 (all amounts in millions)</td><td>2008</td><td>Increase/ (Decrease)</td><td>% change</td></tr><tr><td>Revenues from rental property -1</td><td>$786.9</td><td>$758.7</td><td>$28.2</td><td>3.7%</td></tr><tr><td>Rental property expenses: -2</td><td></td><td></td><td></td><td></td></tr><tr><td>Rent</td><td>$14.1</td><td>$13.4</td><td>$0.7</td><td>5.2%</td></tr><tr><td>Real estate taxes</td><td>112.4</td><td>98.0</td><td>14.4</td><td>14.7%</td></tr><tr><td>Operating and maintenance</td><td>110.1</td><td>104.7</td><td>5.4</td><td>5.2%</td></tr><tr><td></td><td>$236.6</td><td>$216.1</td><td>$20.5</td><td>9.5%</td></tr><tr><td>Depreciation and amortization -3</td><td>$227.7</td><td>$206.0</td><td>$21.7</td><td>10.5%</td></tr></table>
(1) Revenues from rental property increased primarily from the combined effect of (i) the acquisition of operating properties during 2008 and 2009, providing incremental revenues for the year ended December 31, 2009 of $29.3 million, as compared to the corresponding period in 2008 and (ii) the completion of certain development and redevelopment projects and tenant buyouts providing incremental revenues of approximately $7.4 million, for the year ended December 31, 2009, as compared to the corresponding period in 2008, which was partially offset by (iii) a decrease in revenues of approximately $8.5 million for the year ended December 31, 2009, as compared to the corresponding period in 2008, primarily resulting from the sale of certain properties during 2008 and 2009, and (iv) an overall occupancy decrease from the consolidated shopping center portfolio from 93.1% at December 31, 2008 to 92.2% at December 31, 2009. (2) Rental property expenses increased primarily due to (i) operating property acquisitions during 2008 and 2009, (ii) the placement of certain development properties into service, which resulted in lower capitalization of carry costs, and (iii) an increase in snow removal costs during 2009 as compared to 2008, partially offset by (iv) a decrease in insurance costs during 2009 as compared to 2008 and (v) operating property dispositions during 2008 and 2009. (3) Depreciation and amortization increased primarily due to (i) operating property acquisitions during 2008 and 2009, (ii) the placement of certain development properties into service and (iii) tenant vacates, partially offset by operating property dispositions during 2008 and 2009. Mortgage and other financing income decreased $3.3 million to $15.0 million for the year ended December 31, 2009, as compared to $18.3 million for the corresponding period in 2008. This decrease is primarily due to a decrease in interest income during 2009 resulting from the repayment of certain mortgage receivables during 2009 and 2008. Management and other fee income decreased approximately $5.2 million for the year ended December 31, 2009, as compared to the corresponding period in 2008. This decrease is primarily due to a decrease in property management fees of approximately $5.8 million for 2009, due to lower revenues attributable to lower occupancy and the sale of certain properties during 2008 and 2009, partially offset by an increase in other transaction related fees of approximately $0.6 million recognized during 2009. General and administrative expenses decreased approximately $6.1 million for the year ended December 31, 2009, as compared to the corresponding period in 2008. This decrease is primarily due to a reduction in force during 2009 as a result of implementing the Company’s core business strategy of focusing on owning and operating shopping centers and a shift away from certain non-strategic assets along with a lack of transactional activity. Interest, dividends and other investment income decreased approximately $23.0 million for the year ended December 31, 2009, as compared to the corresponding period in 2008. This decrease is primarily due to (i) a decrease in realized gains of approximately $8.2 million during 2009 resulting from the sale of certain marketable securities during the corresponding period in 2008 as compared to 2009, and (ii) a decrease in interest and dividend income of approximately $14.8 million during 2009, as compared to the corresponding period in 2008, primarily resulting from the sale of investments in marketable securities and reductions in dividends declared from certain marketable securities during 2009 and 2008. Other expense, net decreased approximately $1.3 million to $0.9 million for the year ended December 31, 2009, as compared to $2.2 million for the corresponding period in 2008. This decrease is primarily due to (i) the receipt of fewer shares of Sears Holding Corp. common stock received as partial settlement of Kmart pre-petition claims during 2008, |
444 | What's the total amount of the Non-GAAP adjusted operating income (loss) in the years where Operating income (loss) is greater than 0? (in million) | Backlog Applied manufactures systems to meet demand represented by order backlog and customer commitments. Backlog consists of: (1) orders for which written authorizations have been accepted and assigned shipment dates are within the next 12 months, or shipment has occurred but revenue has not been recognized; and (2) contractual service revenue and maintenance fees to be earned within the next 12 months. Backlog by reportable segment as of October 27, 2013 and October 28, 2012 was as follows:
<table><tr><td></td><td>2013</td><td>2012</td><td></td><td>(In millions, except percentages)</td></tr><tr><td>Silicon Systems Group</td><td>$1,295</td><td>55%</td><td>$705</td><td>44%</td></tr><tr><td>Applied Global Services</td><td>591</td><td>25%</td><td>580</td><td>36%</td></tr><tr><td>Display</td><td>361</td><td>15%</td><td>206</td><td>13%</td></tr><tr><td>Energy and Environmental Solutions</td><td>125</td><td>5%</td><td>115</td><td>7%</td></tr><tr><td>Total</td><td>$2,372</td><td>100%</td><td>$1,606</td><td>100%</td></tr></table>
Applied’s backlog on any particular date is not necessarily indicative of actual sales for any future periods, due to the potential for customer changes in delivery schedules or cancellation of orders. Customers may delay delivery of products or cancel orders prior to shipment, subject to possible cancellation penalties. Delays in delivery schedules and/or a reduction of backlog during any particular period could have a material adverse effect on Applied’s business and results of operations. Manufacturing, Raw Materials and Supplies Applied’s manufacturing activities consist primarily of assembly, test and integration of various proprietary and commercial parts, components and subassemblies (collectively, parts) that are used to manufacture systems. Applied has implemented a distributed manufacturing model under which manufacturing and supply chain activities are conducted in various countries, including the United States, Europe, Israel, Singapore, Taiwan, and other countries in Asia, and assembly of some systems is completed at customer sites. Applied uses numerous vendors, including contract manufacturers, to supply parts and assembly services for the manufacture and support of its products. Although Applied makes reasonable efforts to assure that parts are available from multiple qualified suppliers, this is not always possible. Accordingly, some key parts may be obtained from only a single supplier or a limited group of suppliers. Applied seeks to reduce costs and to lower the risks of manufacturing and service interruptions by: (1) selecting and qualifying alternate suppliers for key parts; (2) monitoring the financial condition of key suppliers; (3) maintaining appropriate inventories of key parts; (4) qualifying new parts on a timely basis; and (5) locating certain manufacturing operations in close proximity to suppliers and customers. Research, Development and Engineering Applied’s long-term growth strategy requires continued development of new products. The Company’s significant investment in research, development and engineering (RD&E) has generally enabled it to deliver new products and technologies before the emergence of strong demand, thus allowing customers to incorporate these products into their manufacturing plans at an early stage in the technology selection cycle. Applied works closely with its global customers to design systems and processes that meet their planned technical and production requirements. Product development and engineering organizations are located primarily in the United States, as well as in Europe, Israel, Taiwan, and China. In addition, Applied outsources certain RD&E activities, some of which are performed outside the United States, primarily in India. Process support and customer demonstration laboratories are located in the United States, China, Taiwan, Europe, and Israel. Applied’s investments in RD&E for product development and engineering programs to create or improve products and technologies over the last three years were as follows: $1.3 billion (18 percent of net sales) in fiscal 2013, $1.2 billion (14 percent of net sales) in fiscal 2012, and $1.1 billion (11 percent of net sales) in fiscal 2011. Applied has spent an average of 14 percent of net sales in RD&E over the last five years. In addition to RD&E for specific product technologies, Applied maintains ongoing programs for automation control systems, materials research, and environmental control that are applicable to its products. Item 2: Properties Information concerning Applied’s principal properties at October 27, 2013 is set forth below:
<table><tr><td>Location</td><td>Type</td><td>Principal Use</td><td>SquareFootage</td><td>Ownership</td></tr><tr><td>Santa Clara, CA</td><td>Office, Plant & Warehouse</td><td>Headquarters; Marketing; Manufacturing; Distribution; Research, Development,Engineering; Customer Support</td><td>1,476,000150,000</td><td>OwnedLeased</td></tr><tr><td>Austin, TX</td><td>Office, Plant & Warehouse</td><td>Manufacturing</td><td>1,719,000145,000</td><td>OwnedLeased</td></tr><tr><td>Rehovot, Israel</td><td>Office, Plant & Warehouse</td><td>Manufacturing; Research,Development, Engineering;Customer Support</td><td>417,0005,000</td><td>OwnedLeased</td></tr><tr><td>Singapore</td><td>Office, Plant & Warehouse</td><td>Manufacturing andCustomer Support</td><td>392,00010,000</td><td>OwnedLeased</td></tr><tr><td>Gloucester, MA</td><td>Office, Plant & Warehouse</td><td>Manufacturing; Research,Development, Engineering;Customer Support</td><td>315,000131,000</td><td>OwnedLeased</td></tr><tr><td>Tainan, Taiwan</td><td>Office, Plant & Warehouse</td><td>Manufacturing andCustomer Support</td><td>320,000</td><td>Owned</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. Products in the Silicon Systems Group are manufactured in Austin, Texas; Singapore; Gloucester, Massachusetts; and Rehovot, Israel. Remanufactured equipment products in the Applied Global Services segment are produced primarily in Austin, Texas. Products in the Display segment are manufactured in Tainan, Taiwan; Santa Clara, California; and Alzenau, Germany. Products in the Energy and Environmental Solutions segment are primarily manufactured in Alzenau, Germany; Treviso, Italy; and Cheseaux, Switzerland. In addition to the above properties, Applied also owns and leases offices, plants and/or warehouse locations in 78 locations throughout the world: 18 in Europe, 21 in Japan, 15 in North America (principally the United States), 8 in China, 7 in Korea, 6 in Southeast Asia, and 3 in Taiwan. These facilities are principally used for manufacturing; research, development and engineering; and marketing, sales and/or customer support. Applied also owns a total of approximately 139 acres of buildable land in 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. Fiscal 2013 operating results reflected a recovery in demand for TV manufacturing equipment and continued demand for advanced mobile display equipment, which resulted in increased new orders, net sales, operating income and non-GAAPadjusted operating income compared to fiscal 2012. In the fourth quarter of fiscal 2013, new orders were $114 million, down 55 percent from the prior quarter, and reflected customer push-outs of orders. Net sales in the fourth quarter of fiscal 2013 were $163 million, almost flat compared to the prior quarter. Two customers accounted for approximately 50 percent of net sales for the Display segment in fiscal 2013. Fiscal 2012 operating results reflected a continued overcapacity in the large substrate LCD TV equipment industry that resulted in decreased new orders and net sales in fiscal 2012. The downturn in the LCD TV equipment industry was partially offset by increased demand for advanced mobile display equipment. Four customers accounted for 60 percent of net sales for the Display segment in fiscal 2012. Energy and Environmental Solutions Segment The Energy and Environmental Solutions segment includes products for fabricating c-Si solar PVs, as well as high throughput roll-to-roll deposition equipment for flexible electronics, packaging and other applications. This business is focused on delivering solutions to generate and conserve energy, with an emphasis on lowering the cost to produce solar power and increasing conversion efficiency. While end-demand for solar PVs has been robust over the last several years, investment levels in capital equipment remain depressed. Global solar PV production capacity exceeds anticipated demand, which has caused solar PV manufacturers to significantly reduce or delay investments in manufacturing capacity and new technology, or in some instances to cease operations. Certain significant measures for the past three fiscal years were as follows:
<table><tr><td rowspan="2"></td><td></td><td></td><td></td><td colspan="4">Change</td></tr><tr><td>2013</td><td>2012</td><td>2011</td><td colspan="2">2013 over 2012</td><td colspan="2">2012 over 2011</td></tr><tr><td></td><td colspan="7">(In millions, except percentages and ratios)</td></tr><tr><td>New orders</td><td>$166</td><td>$195</td><td>$1,684</td><td>$-29</td><td>-15%</td><td>$-1,489</td><td>-88%</td></tr><tr><td>Net sales</td><td>173</td><td>425</td><td>1,990</td><td>-252</td><td>-59%</td><td>-1,565</td><td>-79%</td></tr><tr><td>Book to bill ratio</td><td>1.0</td><td>0.5</td><td>0.8</td><td></td><td></td><td></td><td></td></tr><tr><td>Operating income (loss)</td><td>-433</td><td>-668</td><td>453</td><td>235</td><td>35%</td><td>-1,121</td><td>-247%</td></tr><tr><td>Operating margin</td><td>-250.3%</td><td>-157.2%</td><td>22.8%</td><td></td><td>-93.1 points</td><td></td><td>-180.0 points</td></tr><tr><td>Non-GAAP Adjusted Results</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Non-GAAP adjusted operating income (loss)</td><td>-115</td><td>-184</td><td>444</td><td>69</td><td>38%</td><td>-628</td><td>-141%</td></tr><tr><td>Non-GAAP adjusted operating margin</td><td>-66.5%</td><td>-43.3%</td><td>22.3%</td><td></td><td>-23.2 points</td><td></td><td>-65.6 points</td></tr></table>
Reconciliations of non-GAAP adjusted measures are presented under "Non-GAAP Adjusted Results" below. Net Operating Revenues by Operating Segment Information about our net operating revenues by operating segment as a percentage of Company net operating revenues is as follows: |
-39.5 | What's the average of Provision for credit losses and Gains on sales of debt securities of Restated in 2005? (in million) | BANK OF AMERICA CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) Consolidated Statement of Cash Flows
<table><tr><td></td><td colspan="4">Three Months Ended March 31</td></tr><tr><td></td><td colspan="2">2005</td><td colspan="2">2004</td></tr><tr><td> (Dollars in millions)</td><td>As Previously Reported</td><td>Restated</td><td>As Previously Reported</td><td>Restated</td></tr><tr><td> Operating activities</td><td></td><td></td><td></td><td></td></tr><tr><td>Net income</td><td>$4,695</td><td>$4,393</td><td>$2,681</td><td>$2,648</td></tr><tr><td>Reconciliation of net income to net cash provided by (used in) operating activities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Provision for credit losses</td><td>580</td><td>580</td><td>624</td><td>624</td></tr><tr><td>Gains on sales of debt securities</td><td>-659</td><td>-659</td><td>-495</td><td>-495</td></tr><tr><td>Depreciation and premises improvements amortization</td><td>240</td><td>240</td><td>209</td><td>209</td></tr><tr><td>Amortization of intangibles</td><td>208</td><td>208</td><td>54</td><td>54</td></tr><tr><td>Deferred income tax benefit</td><td>-85</td><td>-267</td><td>-66</td><td>-86</td></tr><tr><td>Net increase in trading and derivative instruments</td><td>-13,041</td><td>-12,697</td><td>-8,528</td><td>-7,475</td></tr><tr><td>Net (increase) decrease in other assets</td><td>4,283</td><td>4,283</td><td>-5,063</td><td>-5,063</td></tr><tr><td>Net decrease in accrued expenses and other liabilities</td><td>-4,489</td><td>-4,489</td><td>-8,252</td><td>-8,252</td></tr><tr><td>Other operating activities, net</td><td>-3,707</td><td>-3,669</td><td>3,275</td><td>2,275</td></tr><tr><td>Net cash used in operating activities</td><td>-11,975</td><td>-12,077</td><td>-15,561</td><td>-15,561</td></tr><tr><td> Investing activities</td><td></td><td></td><td></td><td></td></tr><tr><td>Net (increase) decrease in time deposits placed and other short-term investments</td><td>1,138</td><td>1,138</td><td>-510</td><td>-510</td></tr><tr><td>Net (increase) decrease in federal funds sold and securities purchased under agreements to resell</td><td>-48,036</td><td>-48,036</td><td>3,435</td><td>3,435</td></tr><tr><td>Proceeds from sales of available-for-sale securities</td><td>38,451</td><td>38,451</td><td>11,090</td><td>11,090</td></tr><tr><td>Proceeds from maturities of available-for-sale securities</td><td>10,181</td><td>10,181</td><td>1,848</td><td>1,848</td></tr><tr><td>Purchases of available-for-sale securities</td><td>-74,552</td><td>-74,552</td><td>-84,567</td><td>-84,567</td></tr><tr><td>Proceeds from maturities of held-to-maturity securities</td><td>55</td><td>55</td><td>5</td><td>5</td></tr><tr><td>Proceeds from sales of loans and leases</td><td>1,113</td><td>1,113</td><td>876</td><td>876</td></tr><tr><td>Other changes in loans and leases, net</td><td>-9,560</td><td>-9,574</td><td>-6,133</td><td>-6,133</td></tr><tr><td>Additions to mortgage servicing rights, net</td><td>-168</td><td>-168</td><td>-249</td><td>-249</td></tr><tr><td>Net purchases of premises and equipment</td><td>-254</td><td>-254</td><td>-249</td><td>-249</td></tr><tr><td>Proceeds from sales of foreclosed properties</td><td>26</td><td>26</td><td>49</td><td>49</td></tr><tr><td>Net cash paid for business acquisitions</td><td>-116</td><td>—</td><td>-15</td><td>-15</td></tr><tr><td>Other investing activities, net</td><td>-72</td><td>-72</td><td>800</td><td>800</td></tr><tr><td>Net cash used in investing activities</td><td>-81,794</td><td>-81,692</td><td>-73,620</td><td>-73,620</td></tr><tr><td> Financing activities</td><td></td><td></td><td></td><td></td></tr><tr><td>Net increase in deposits</td><td>11,417</td><td>11,417</td><td>21,479</td><td>21,479</td></tr><tr><td>Net increase in federal funds purchased and securities sold under agreements to repurchase</td><td>67,911</td><td>67,911</td><td>37,388</td><td>37,388</td></tr><tr><td>Net increase in commercial paper and other short-term borrowings</td><td>14,842</td><td>14,842</td><td>21,634</td><td>21,634</td></tr><tr><td>Proceeds from issuance of long-term debt</td><td>4,768</td><td>4,768</td><td>7,558</td><td>7,558</td></tr><tr><td>Retirement of long-term debt</td><td>-2,702</td><td>-2,702</td><td>-2,507</td><td>-2,507</td></tr><tr><td>Proceeds from issuance of common stock</td><td>1,180</td><td>1,180</td><td>1,000</td><td>1,000</td></tr><tr><td>Common stock repurchased</td><td>-1,990</td><td>-1,990</td><td>-973</td><td>-973</td></tr><tr><td>Cash dividends paid</td><td>-1,835</td><td>-1,835</td><td>-1,159</td><td>-1,159</td></tr><tr><td>Other financing activities, net</td><td>-37</td><td>-37</td><td>-23</td><td>-23</td></tr><tr><td>Net cash provided by financing activities</td><td>93,554</td><td>93,554</td><td>84,397</td><td>84,397</td></tr><tr><td>Effect of exchange rate changes on cash and cash equivalents</td><td>-23</td><td>-23</td><td>-4</td><td>-4</td></tr><tr><td>Net decrease in cash and cash equivalents</td><td>-238</td><td>-238</td><td>-4,788</td><td>-4,788</td></tr><tr><td>Cash and cash equivalents at January 1</td><td>28,936</td><td>28,936</td><td>27,084</td><td>27,084</td></tr><tr><td> Cash and cash equivalents at March 31</td><td>$28,698</td><td>$28,698</td><td>$22,296</td><td>$22,296</td></tr></table>
Danaher Corporation, originally DMG, Inc. , was organized in 1969 as a Massachusetts real estate investment trust. In 1978 it was reorganized as a Florida corporation under the name Diversified Mortgage Investors, Inc. (“DMI”) which in a second reorganization in 1980 became a subsidiary of a newly created holding company named DMG, Inc. We adopted the name Danaher in 1984 and were reincorporated as a Delaware corporation following the 1986 annual meeting of our shareholders. Operating Segments The table below describes the percentage of our total annual revenues attributable to each of our four segments over each of the last three fiscal years:
<table><tr><td></td><td colspan="3"> For the Years Ended December 31</td></tr><tr><td> Segment</td><td>2008</td><td>2007</td><td> 2006</td></tr><tr><td>Professional Instrumentation</td><td>38%</td><td>32%</td><td>31%</td></tr><tr><td>Medical Technologies</td><td>26%</td><td>27%</td><td>23%</td></tr><tr><td>Industrial Technologies</td><td>26%</td><td>29%</td><td>32%</td></tr><tr><td>Tools & Components</td><td>10%</td><td>12%</td><td>14%</td></tr></table>
Sales in 2008 by geographic destination were: North America, 50% (including 47% in the U. S. ); Europe, 31%; Asia/Australia, 14%; and other regions, 5%. For additional information regarding our segments and sales by geography, please refer to Note 17 in the Consolidated Financial Statements included in this Annual Report. PROFESSIONAL INSTRUMENTATION Businesses in our Professional Instrumentation segment offer professional and technical customers various products and services that are used to enable or enhance the performance of their work. The Professional Instrumentation segment encompasses two strategic lines of business: environmental and test and measurement. Sales for this segment in 2008 by geographic destination were: North America, 46%; Europe, 29%; Asia/Australia, 19%; and other regions, 6%. Environmental. The environmental businesses serve two main markets: water quality and retail/commercial petroleum. We entered the water quality sector in 1996 through the acquisition of American Sigma and have enhanced our geographical coverage and product and service breadth through subsequent acquisitions, including the acquisition of Dr. Lange in 1998, Hach Company in 1999, Viridor Instrumentation in 2002, Trojan Technologies Inc. in 2004 and ChemTreat, Inc. in 2007. Today, we are a worldwide leader in the water quality sector. Our water quality operations design, manufacture and market: Typical users of our analytical instruments, related consumables and associated services, and our ultraviolet disinfection systems, include professionals in municipal drinking water and wastewater treatment plants, industrial process water and wastewater treatment facilities, third-party testing laboratories and environmental field operations. Typical users of our industrial water treatment solutions include professionals in industrial plants in a wide range of industries. Customers in these industries choose suppliers based on a number of factors including the customer’s existing supplier relationships, product performance and ease of use, the comprehensiveness of the supplier’s product offering and the other factors described under “—Competition. ” Our water quality business provides products under a variety of well-known brands, including HACH, HACH/LANGE, TROJAN TECHNOLOGIES, CHEMTREAT and SEA BIRD. Manufacturing facilities are located in North America, Europe, and Asia. Sales are made through our direct sales personnel, independent representatives, independent distributors and e-commerce. HEWLETT-PACKARD COMPANY AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) revenue in fiscal 2007 was attributable mainly to unit volume growth in multifunction printers and revenue from our digital press and large format printing products. The slight increase in consumer hardware net revenue in fiscal 2007 was attributable to increased unit volumes, improved average revenue per unit performance and a mix shift from single function products to All-in-Ones, the impact of which was partially offset by the continued shift in demand to lower priced products and strategic pricing decisions. IPG earnings from operations as a percentage of net revenue increased by 0.3 percentage points in fiscal 2007 from fiscal 2006, driven by a decrease in operating expenses as a percentage of net revenue that was partially offset by a decrease in gross margin. Gross margin decreased due primarily to unfavorable hardware margins, increased costs associated with new product introductions and a change in product mix. Operating expenses as a percentage of net revenue decreased due primarily to higher prior-year research and development expenses associated with product introduction costs, coupled with higher revenue and more effective spending controls. On a constant currency basis, net revenue increased 7% in fiscal 2006 from fiscal 2005. The unfavorable currency impact was due primarily to the movement of the dollar against the euro and the yen in fiscal 2006. In fiscal 2006, the growth in printer supplies net revenue reflected higher unit volumes as a result of the continued expansion of printer hardware placements and the strong performance of color-related products. The growth in commercial hardware net revenue in fiscal 2006 was attributable mainly to unit volume growth in color laser printers and multifunction printers and, to a lesser extent, revenue from our large format printing products with the acquisition of Scitex in November 2005. Commercial and consumer hardware revenue was unfavorably impacted by the continued shift in demand to lower-priced products and strategic pricing decisions, which caused average revenue per unit to decline. IPG earnings from operations as a percentage of net revenue increased 1.3 percentage points in fiscal 2006 from fiscal 2005, which was the result primarily of an increase in gross margin and a decrease in operating expense as a percentage of net revenue. The gross margin increase was due primarily to improved margins for supplies due to product mix and a favorable portfolio mix shift from hardware to supplies, the impact of which was partially offset by unfavorable consumer hardware margins. Operating expense as a percentage of net revenue for fiscal 2006 declined, due mainly to realized savings from our cost structure initiatives coupled with increased revenue and partially offset by higher bonus accruals. HP Financial Services
<table><tr><td> </td><td colspan="3"> For the fiscal years ended October 31</td></tr><tr><td> </td><td>2007</td><td>2006</td><td> 2005</td></tr><tr><td> </td><td colspan="3"> In millions </td></tr><tr><td>Net revenue</td><td>$2,336</td><td>$2,078</td><td>$2,102</td></tr><tr><td>Earnings from operations</td><td>$155</td><td>$147</td><td>$213</td></tr><tr><td>Earnings from operations as a % of net revenue</td><td>6.6%</td><td>7.1%</td><td>10.1%</td></tr></table>
HPFS net revenue increased by 12% in fiscal 2007 from fiscal 2006. The net revenue increase was due primarily to operating lease growth and higher end-of-lease activity. The financing lease growth and increased used equipment sales, to a lesser extent, also contributed to the revenue growth. HPFS earnings from operations as a percentage of net revenue decreased by 0.5 percentage point in fiscal 2007 from fiscal 2006 due primarily to a decrease in gross margin, which was partially offset by Our calculation of free cash flow and reconciliation to “Net cash provided by operating activities” is shown in the table below (in millions), and may not be calculated the same as similarly-titled measures presented by other companies: |
0.47887 | as a result of the sales of certain non-core towers and other assets what was the percent of the change in the recorded net losses from 2007 to 2008 | 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> |
3.40615 | what was the percentage change in the gross profit from 2009 to 2010 \\n | McKESSON CORPORATION FINANCIAL REVIEW (Continued)
<table><tr><td></td><td colspan="3"> Years Ended March 31,</td><td colspan="2"> Change</td></tr><tr><td> <i>(Dollars in millions)</i> </td><td> 2012</td><td> 2011</td><td> 2010</td><td> 2012</td><td> 2011</td></tr><tr><td>Distribution Solutions</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Direct distribution & services</td><td>$85,523</td><td>$77,554</td><td>$72,210</td><td>10%</td><td>7%</td></tr><tr><td>Sales to customers’ warehouses</td><td>20,453</td><td>18,631</td><td>21,435</td><td>10</td><td>-13</td></tr><tr><td>Total U.S. pharmaceutical distribution & services</td><td>105,976</td><td>96,185</td><td>93,645</td><td>10</td><td>3</td></tr><tr><td>Canada pharmaceutical distribution & services</td><td>10,303</td><td>9,784</td><td>9,072</td><td>5</td><td>8</td></tr><tr><td>Medical-Surgical distribution & services</td><td>3,145</td><td>2,920</td><td>2,861</td><td>8</td><td>2</td></tr><tr><td>Total Distribution Solutions</td><td>119,424</td><td>108,889</td><td>105,578</td><td>10</td><td>3</td></tr><tr><td>Technology Solutions</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Services</td><td>2,594</td><td>2,483</td><td>2,439</td><td>4</td><td>2</td></tr><tr><td>Software & software systems</td><td>596</td><td>590</td><td>571</td><td>1</td><td>3</td></tr><tr><td>Hardware</td><td>120</td><td>122</td><td>114</td><td>-2</td><td>7</td></tr><tr><td>Total Technology Solutions</td><td>3,310</td><td>3,195</td><td>3,124</td><td>4</td><td>2</td></tr><tr><td>Total Revenues</td><td>$122,734</td><td>$112,084</td><td>$108,702</td><td>10</td><td>3</td></tr></table>
Revenues increased 10% to $122.7 billion in 2012 and 3% to $112.1 billion in 2011. The increase in revenues in each year primarily reflects market growth in our Distribution Solutions segment, which accounted for approximately 97% of our consolidated revenues, and our acquisition of US Oncology. Direct distribution and services revenues increased in 2012 compared to 2011 primarily due to market growth, which includes growing drug utilization and price increases, and from our acquisition of US Oncology. These increases were partially offset by price deflation associated with brand to generic drug conversions. Direct distribution and services revenues increased in 2011 compared to 2010 primarily due to market growth, the effect of a shift of revenues from sales to customers’ warehouses to direct store delivery, the lapping of which was completed in the third quarter of 2011, and due to our acquisition of US Oncology. These increases were partially offset by a decline in demand associated with the flu season and the impact of price deflation associated with brand to generic drug conversions. Sales to customers’ warehouses for 2012 increased compared to 2011 primarily due to a new customer and new business with existing customers. Sales to customers’ warehouses for 2011 decreased compared to 2010 primarily reflecting reduced revenues associated with existing customers, the effect of a shift of revenues to direct store delivery, the lapping of which was completed in the third quarter of 2011, and the impact of price deflation associated with brand to generic drug conversions. Sales to retail customers’ warehouses represent large volume sales of pharmaceuticals primarily to a limited number of large self-warehousing retail chain customers whereby we order bulk product from the manufacturer, receive and process the product through our central distribution facility and subsequently deliver the bulk product (generally in the same form as received from the manufacturer) directly to our customers’ warehouses. This distribution method is typically not marketed or sold by the Company as a stand-alone service; rather, it is offered as an additional distribution method for our large retail chain customers that have an internal self-warehousing distribution network. Sales to customers’ warehouses provide a benefit to these customers because they can utilize the Company as one source for both their direct-to-store business and their warehouse business. We generally have significantly lower gross profit margins on sales to customers’ warehouses as we pass much of the efficiency of this low cost-to-serve model on to the customer. These sales do, however, contribute to our gross profit dollars. McKESSON CORPORATION FINANCIAL NOTES (Continued) Expected benefit payments, including assumed executive lump sum payments, for our pension plans are as follows: $180 million, $64 million, $64 million, $62 million and $62 million for 2020 to 2024 and $327 million for 2025 through 2029. Expected benefit payments are based on the same assumptions used to measure the benefit obligations and include estimated future employee service. Expected contributions to be made for our pension plans are $146 million for 2020. Weighted-average assumptions used to estimate the net periodic pension expense and the actuarial present value of benefit obligations were as follows:
<table><tr><td></td><td colspan="3">U.S. Plans Years Ended March 31,</td><td colspan="3">Non-U.S. Plans Years Ended March 31,</td></tr><tr><td></td><td>2019</td><td>2018</td><td>2017</td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Net periodic pension expense</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rates</td><td>3.83%</td><td>3.55%</td><td>3.40%</td><td>2.35%</td><td>2.34%</td><td>2.72%</td></tr><tr><td>Rate of increase in compensation</td><td>N/A -1</td><td>4.00</td><td>4.00</td><td>3.13</td><td>2.72</td><td>2.76</td></tr><tr><td>Expected long-term rate of return on plan assets</td><td>5.25</td><td>6.25</td><td>6.25</td><td>3.71</td><td>4.03</td><td>4.51</td></tr><tr><td>Benefit obligation</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rates</td><td>3.65%</td><td>3.69%</td><td>3.39%</td><td>2.13%</td><td>2.35%</td><td>2.35%</td></tr><tr><td>Rate of increase in compensation</td><td>N/A -1</td><td>N/A -1</td><td>4.00</td><td>3.18</td><td>2.59</td><td>3.18</td></tr></table>
(1) This assumption is no longer needed in actuarial valuations as U. S. plans are frozen or have fixed benefits for the remaining active participants. Our defined benefit pension plan liabilities are valued using a discount rate based on a yield curve developed from a portfolio of high quality corporate bonds rated AA or better whose maturities are aligned with the expected benefit payments of our plans. For March 31, 2019, our U. S. defined benefit liabilities are valued using a weighted average discount rate of 3.65%, which represents a decrease of 4 basis points from our 2018 weighted-average discount rate of 3.69%. Our non-U. S. defined benefit pension plan liabilities are valued using a weighted-average discount rate of 2.13%, which represents a decrease of 22 basis points from our 2018 weighted average discount rate of 2.35%. Plan Assets Investment Strategy: The overall objective for U. S. pension plan assets has been to generate long-term investment returns consistent with capital preservation and prudent investment practices, with a diversification of asset types and investment strategies. Periodic adjustments were made to provide liquidity for benefit payments and to rebalance plan assets to their target allocations. In September 2018, a new investment allocation strategy was put in place to protect the funded status of the U. S. plan assets subsequent to Board approval of U. S. pension plan termination. The target allocation for U. S. plan assets at March 31, 2019 is 100% fixed income investments including cash and cash equivalents. The target allocations for U. S. plan assets at March 31, 2018 were 26% equity investments, 70% fixed income investments including cash and cash equivalents and 4% real estate. Equity investments include common stock, preferred stock, and equity commingled funds. Fixed income investments include corporate bonds, government securities, mortgage-backed securities, asset-backed securities, other directly held fixed income investments, and fixed income commingled funds. The real estate investments are in a commingled real estate fund. Year Ended December 31, 2010 Compared to Year Ended December 31, 2009 Net revenues increased $207.5 million, or 24.2%, to $1,063.9 million in 2010 from $856.4 million in 2009. Net revenues by product category are summarized below:
<table><tr><td></td><td>Year Ended December 31,</td></tr><tr><td><i>(In thousands)</i></td><td>2010</td><td>2009</td><td>$ Change</td><td>% Change</td></tr><tr><td>Apparel</td><td>$853,493</td><td>$651,779</td><td>$201,714</td><td>30.9%</td></tr><tr><td>Footwear</td><td>127,175</td><td>136,224</td><td>-9,049</td><td>-6.6</td></tr><tr><td>Accessories</td><td>43,882</td><td>35,077</td><td>8,805</td><td>25.1</td></tr><tr><td>Total net sales</td><td>1,024,550</td><td>823,080</td><td>201,470</td><td>24.5</td></tr><tr><td>License revenues</td><td>39,377</td><td>33,331</td><td>6,046</td><td>18.1</td></tr><tr><td>Total net revenues</td><td>$1,063,927</td><td>$856,411</td><td>$207,516</td><td>24.2%</td></tr></table>
Net sales increased $201.5 million, or 24.5%, to $1,024.6 million in 2010 from $823.1 million in 2009 as noted in the table above. The increase in net sales primarily reflects: ? $88.9 million, or 56.8%, increase in direct to consumer sales, which includes 19 additional stores in 2010; and ? unit growth driven by increased distribution and new offerings in multiple product categories, most significantly in our training, base layer, mountain, golf and underwear categories; partially offset by ? $9.0 million decrease in footwear sales driven primarily by a decline in running and training footwear sales. License revenues increased $6.1 million, or 18.1%, to $39.4 million in 2010 from $33.3 million in 2009. This increase in license revenues was primarily a result of increased sales by our licensees due to increased distribution and continued unit volume growth. We have developed our own headwear and bags, and beginning in 2011, these products are being sold by us rather than by one of our licensees. Gross profit increased $120.4 million to $530.5 million in 2010 from $410.1 million in 2009. Gross profit as a percentage of net revenues, or gross margin, increased 200 basis points to 49.9% in 2010 compared to 47.9% in 2009. The increase in gross margin percentage was primarily driven by the following: ? approximate 100 basis point increase driven by increased direct to consumer higher margin sales; ? approximate 50 basis point increase driven by decreased sales markdowns and returns, primarily due to improved sell-through rates at retail; and ? approximate 50 basis point increase driven primarily by liquidation sales and related inventory reserve reversals. The current year period benefited from reversals of inventory reserves established in the prior year relative to certain cleated footwear, sport specific apparel and gloves. These products have historically been more difficult to liquidate at favorable prices. Selling, general and administrative expenses increased $93.3 million to $418.2 million in 2010 from $324.9 million in 2009. As a percentage of net revenues, selling, general and administrative expenses increased to 39.3% in 2010 from 37.9% in 2009. These changes were primarily attributable to the following: ? Marketing costs increased $19.3 million to $128.2 million in 2010 from $108.9 million in 2009 primarily due to an increase in sponsorship of events and collegiate and professional teams and athletes, increased television and digital campaign costs, including media campaigns for specific customers and additional personnel costs. In addition, we incurred increased expenses for our performance incentive plan as compared to the prior year. As a percentage of net revenues, marketing costs decreased to 12.0% in 2010 from 12.7% in 2009 primarily due to decreased marketing costs for specific customers. |
31,850 | In the section with lowest amount of Net interest income, what's theamount of Net interest income and Total revenue, net of interest expense? (in millions) | Uncertain Tax Positions The following is a reconciliation of the Company's beginning and ending amount of uncertain tax positions (in millions):
<table><tr><td></td><td>2015</td><td>2014</td></tr><tr><td>Balance at January 1</td><td>$191</td><td>$164</td></tr><tr><td>Additions based on tax positions related to the current year</td><td>31</td><td>31</td></tr><tr><td>Additions for tax positions of prior years</td><td>53</td><td>10</td></tr><tr><td>Reductions for tax positions of prior years</td><td>-18</td><td>-6</td></tr><tr><td>Settlements</td><td>-32</td><td>—</td></tr><tr><td>Business combinations</td><td>—</td><td>5</td></tr><tr><td>Lapse of statute of limitations</td><td>-5</td><td>-11</td></tr><tr><td>Foreign currency translation</td><td>-2</td><td>-2</td></tr><tr><td>Balance at December 31</td><td>$218</td><td>$191</td></tr></table>
The Company's liability for uncertain tax positions as of December 31, 2015, 2014, and 2013, includes $180 million, $154 million, and $141 million, respectively, related to amounts that would impact the effective tax rate if recognized. It is possible that the amount of unrecognized tax benefits may change in the next twelve months; however, we do not expect the change to have a significant impact on our consolidated statements of income or consolidated balance sheets. These changes may be the result of settlements of ongoing audits. At this time, an estimate of the range of the reasonably possible outcomes within the twelve months cannot be made. The Company recognizes interest and penalties related to uncertain tax positions in its provision for income taxes. The Company accrued potential interest and penalties of $2 million, $4 million, and $2 million in 2015, 2014, and 2013, respectively. The Company recorded a liability for interest and penalties of $33 million, $31 million, and $27 million as of December 31, 2015, 2014, and 2013, respectively. The Company and its subsidiaries file income tax returns in their respective jurisdictions. The Company has substantially concluded all U. S. federal income tax matters for years through 2007. Material U. S. state and local income tax jurisdiction examinations have been concluded for years through 2005. The Company has concluded income tax examinations in its primary non-U. S. jurisdictions through 2005.9. Shareholders' Equity Distributable Reserves As a U. K. incorporated company, the Company is required under U. K. law to have available "distributable reserves" to make share repurchases or pay dividends to shareholders. Distributable reserves may be created through the earnings of the U. K. parent company and, amongst other methods, through a reduction in share capital approved by the English Companies Court. Distributable reserves are not linked to a U. S. GAAP reported amount (e. g. , retained earnings). As of December 31, 2015 and 2014, the Company had distributable reserves in excess of $2.1 billion and $4.0 billion, respectively. Ordinary Shares In April 2012, the Company's Board of Directors authorized a share repurchase program under which up to $5.0 billion of Class A Ordinary Shares may be repurchased ("2012 Share Repurchase Program"). In November 2014, the Company's Board of Directors authorized a new $5.0 billion share repurchase program in addition to the existing program ("2014 Share Repurchase Program" and, together, the "Repurchase Programs"). Under each program, shares may be repurchased through the open market or in privately negotiated transactions, based on prevailing market conditions, funded from available capital. During 2015, the Company repurchased 16.0 million shares at an average price per share of $97.04 for a total cost of $1.6 billion under the Repurchase Programs. During 2014, the Company repurchased 25.8 million shares at an average price per share of $87.18 for a total cost of $2.3 billion under the 2012 Share Repurchase Plan. In August 2015, the $5 billion of Class A Ordinary Shares authorized under the 2012 Share Repurchase Program was exhausted. At December 31, 2015, the remaining authorized amount for share repurchase under the 2014 Share Repurchase Program is $4.1 billion. Under the Repurchase Programs, the Company repurchased a total of 78.1 million shares for an aggregate cost of $5.9 billion. Table XIV Quarterly Supplemental Financial Data
<table><tr><td></td><td colspan="4">2016 Quarters</td><td colspan="4">2015 Quarters</td></tr><tr><td>(Dollars 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>Fully taxable-equivalent basis data<sup>-1</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest income<sup></sup></td><td>$10,526</td><td>$10,429</td><td>$10,341</td><td>$10,700</td><td>$9,911</td><td>$10,127</td><td>$9,739</td><td>$10,070</td></tr><tr><td>Total revenue, net of interest expense</td><td>20,224</td><td>21,863</td><td>21,509</td><td>21,005</td><td>19,807</td><td>21,219</td><td>21,262</td><td>21,566</td></tr><tr><td>Net interest yield</td><td>2.23%</td><td>2.23%</td><td>2.23%</td><td>2.33%</td><td>2.14%</td><td>2.19%</td><td>2.16%</td><td>2.26%</td></tr><tr><td>Efficiency ratio</td><td>65.08</td><td>61.66</td><td>62.73</td><td>70.54</td><td>70.73</td><td>65.70</td><td>65.65</td><td>73.39</td></tr></table>
(1) FTE basis is a non-GAAP financial measure. FTE basis is a performance measure used by management in operating the business that management believes provides investors with a more accurate picture of the interest margin for comparative purposes. The Corporation believes that this presentation allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices. For more information on these performance measures and ratios, see Supplemental Financial Data on page 26 and for corresponding reconciliations to GAAP financial measures, see Statistical Table XVI.
<table><tr><td>(Dollars in millions, shares in thousands)</td><td>2016</td><td>2015</td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Reconciliation of net interest income to net interest income on a fully taxable-equivalent basis</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest income</td><td>$41,096</td><td>$38,958</td><td>$40,779</td><td>$40,719</td><td>$40,135</td></tr><tr><td>Fully taxable-equivalent adjustment</td><td>900</td><td>889</td><td>851</td><td>859</td><td>901</td></tr><tr><td>Net interest income on a fully taxable-equivalent basis</td><td>$41,996</td><td>$39,847</td><td>$41,630</td><td>$41,578</td><td>$41,036</td></tr><tr><td>Reconciliation of total revenue, net of interest expense to total revenue, net of interest expense on a fully taxable-equivalent basis</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total revenue, net of interest expense</td><td>$83,701</td><td>$82,965</td><td>$85,894</td><td>$87,502</td><td>$82,798</td></tr><tr><td>Fully taxable-equivalent adjustment</td><td>900</td><td>889</td><td>851</td><td>859</td><td>901</td></tr><tr><td>Total revenue, net of interest expense on a fully taxable-equivalent basis</td><td>$84,601</td><td>$83,854</td><td>$86,745</td><td>$88,361</td><td>$83,699</td></tr><tr><td>Reconciliation of income tax expense (benefit) to income tax expense (benefit) on a fully taxable-equivalent basis</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income tax expense (benefit)</td><td>$7,247</td><td>$6,234</td><td>$2,443</td><td>$4,194</td><td>$-1,320</td></tr><tr><td>Fully taxable-equivalent adjustment</td><td>900</td><td>889</td><td>851</td><td>859</td><td>901</td></tr><tr><td>Income tax expense (benefit) on a fully taxable-equivalent basis</td><td>$8,147</td><td>$7,123</td><td>$3,294</td><td>$5,053</td><td>$-419</td></tr><tr><td>Reconciliation of average common shareholders’ equity to average tangible common shareholders’ equity</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common shareholders’ equity</td><td>$241,621</td><td>$230,173</td><td>$222,907</td><td>$218,340</td><td>$216,999</td></tr><tr><td>Goodwill</td><td>-69,750</td><td>-69,772</td><td>-69,809</td><td>-69,910</td><td>-69,974</td></tr><tr><td>Intangible assets (excluding MSRs)</td><td>-3,382</td><td>-4,201</td><td>-5,109</td><td>-6,132</td><td>-7,366</td></tr><tr><td>Related deferred tax liabilities</td><td>1,644</td><td>1,852</td><td>2,090</td><td>2,328</td><td>2,593</td></tr><tr><td>Tangible common shareholders’ equity</td><td>$170,133</td><td>$158,052</td><td>$150,079</td><td>$144,626</td><td>$142,252</td></tr><tr><td>Reconciliation of average shareholders’ equity to average tangible shareholders’ equity</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Shareholders’ equity</td><td>$266,277</td><td>$251,981</td><td>$238,317</td><td>$233,819</td><td>$235,681</td></tr><tr><td>Goodwill</td><td>-69,750</td><td>-69,772</td><td>-69,809</td><td>-69,910</td><td>-69,974</td></tr><tr><td>Intangible assets (excluding MSRs)</td><td>-3,382</td><td>-4,201</td><td>-5,109</td><td>-6,132</td><td>-7,366</td></tr><tr><td>Related deferred tax liabilities</td><td>1,644</td><td>1,852</td><td>2,090</td><td>2,328</td><td>2,593</td></tr><tr><td>Tangible shareholders’ equity</td><td>$194,789</td><td>$179,860</td><td>$165,489</td><td>$160,105</td><td>$160,934</td></tr><tr><td>Reconciliation of year-end common shareholders’ equity to year-end tangible common shareholders’ equity</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common shareholders’ equity</td><td>$241,620</td><td>$233,903</td><td>$224,167</td><td>$219,124</td><td>$218,194</td></tr><tr><td>Goodwill</td><td>-69,744</td><td>-69,761</td><td>-69,777</td><td>-69,844</td><td>-69,976</td></tr><tr><td>Intangible assets (excluding MSRs)</td><td>-2,989</td><td>-3,768</td><td>-4,612</td><td>-5,574</td><td>-6,684</td></tr><tr><td>Related deferred tax liabilities</td><td>1,545</td><td>1,716</td><td>1,960</td><td>2,166</td><td>2,428</td></tr><tr><td>Tangible common shareholders’ equity</td><td>$170,432</td><td>$162,090</td><td>$151,738</td><td>$145,872</td><td>$143,962</td></tr><tr><td>Reconciliation of year-end shareholders’ equity to year-end tangible shareholders’ equity</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Shareholders’ equity</td><td>$266,840</td><td>$256,176</td><td>$243,476</td><td>$232,475</td><td>$236,962</td></tr><tr><td>Goodwill</td><td>-69,744</td><td>-69,761</td><td>-69,777</td><td>-69,844</td><td>-69,976</td></tr><tr><td>Intangible assets (excluding MSRs)</td><td>-2,989</td><td>-3,768</td><td>-4,612</td><td>-5,574</td><td>-6,684</td></tr><tr><td>Related deferred tax liabilities</td><td>1,545</td><td>1,716</td><td>1,960</td><td>2,166</td><td>2,428</td></tr><tr><td>Tangible shareholders’ equity</td><td>$195,652</td><td>$184,363</td><td>$171,047</td><td>$159,223</td><td>$162,730</td></tr><tr><td>Reconciliation of year-end assets to year-end tangible assets</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets</td><td>$2,187,702</td><td>$2,144,287</td><td>$2,104,539</td><td>$2,102,064</td><td>$2,209,981</td></tr><tr><td>Goodwill</td><td>-69,744</td><td>-69,761</td><td>-69,777</td><td>-69,844</td><td>-69,976</td></tr><tr><td>Intangible assets (excluding MSRs)</td><td>-2,989</td><td>-3,768</td><td>-4,612</td><td>-5,574</td><td>-6,684</td></tr><tr><td>Related deferred tax liabilities</td><td>1,545</td><td>1,716</td><td>1,960</td><td>2,166</td><td>2,428</td></tr><tr><td>Tangible assets</td><td>$2,116,514</td><td>$2,072,474</td><td>$2,032,110</td><td>$2,028,812</td><td>$2,135,749</td></tr></table>
(1) Presents reconciliations of non-GAAP financial measures to GAAP financial measures. We believe the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate these measures differently. For more information on non-GAAP financial measures and ratios we use in assessing the results of the Corporation, see Supplemental Financial Data on page 26. As of December 31, 2012, we: ? owned and operated a petroleum refinery in El Dorado, Kansas, two refinery facilities located in Tulsa, Oklahoma, a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the “Navajo Refinery”), a refinery located in Cheyenne, Wyoming and a refinery in Woods Cross, Utah (the “Woods Cross Refinery”); ? owned and operated NK Asphalt Partners (“NK Asphalt”) which operates various asphalt terminals in Arizona and New Mexico; ? owned Ethanol Management Company (“EMC”), a products terminal and blending facility near Denver, Colorado, and a 50% interest in Sabine Biofuels II, LLC (“Sabine Biofuels”), a biodiesel production facility located in Port Arthur, Texas; and ? owned a 44% interest in HEP, a consolidated VIE, which includes our 2% general partner interest. HEPowns and operates logistic assets consisting of petroleum product and crude oil pipelines and terminal, tankage and loading rack facilities that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Alon USA, Inc. 's (“Alon”) refinery in Big Spring, Texas. Additionally, HEPowns a 75% interest in UNEV Pipeline, L. L. C. (“UNEV”), which owns a 12-inch refined products pipeline from Salt Lake City, Utah to Las Vegas, Nevada, together with terminal facilities in the Cedar City, Utah and North Las Vegas areas (the “UNEV Pipeline”) and a 25% interest in SLC Pipeline LLC (the “SLC Pipeline”), a 95-mile intrastate pipeline system that serves refineries in the Salt Lake City area. Our operations are currently organized into two reportable segments, Refining and HEP. The Refining segment includes the operations of our El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and NK Asphalt. The HEPsegment involves all of the operations of HEP effective March 1, 2008 (date of reconsolidation). The financial information about our segments is discussed in Note 21 “Segment Information” in the Notes to Consolidated Financial Statements. REFINERY OPERATIONS Our refinery operations serve the Mid-Continent, Southwest and Rocky Mountain regions of the United States. We own and operate five complex refineries having an aggregate crude capacity of 443,000 barrels per stream day. Each of our refineries has the complexity to convert discounted, heavy and sour crude oils into a high percentage of gasoline, diesel and other high-value refined products. For 2012, gasoline, diesel fuel, jet fuel and specialty lubricants (excluding volumes purchased for resale) represented 50%, 31%, 6% and 3%, respectively, of our total refinery sales volumes. The tables presented below and elsewhere in this discussion of our refinery operations set forth information, including non-GAAP performance measures, about our refinery operations. The cost of products and refinery gross and net operating margins do not include the effect of depreciation and amortization. Reconciliations to amounts reported under GAAP are provided under “Reconciliations to Amounts Reported Under Generally Accepted Accounting Principles” following Item 7A of Part II of this Form 10-K. |
0.0709 | In the section with lowest amount of Equity, what's the increasing rate of Total Revenue? | HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Corporate Investments
<table><tr><td></td><td colspan="3">For the fiscal years ended October 31,</td></tr><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td></td><td colspan="3">Dollars in millions</td></tr><tr><td>Net revenue</td><td>$507</td><td>$543</td><td>$553</td></tr><tr><td>Loss from operations</td><td>$-108</td><td>$-91</td><td>$-91</td></tr><tr><td>Loss from operations as a % of net revenue</td><td>-21.3%</td><td>-16.8%</td><td>-16.5%</td></tr></table>
Fiscal 2019 compared with Fiscal 2018 Corporate Investments net revenue decreased by $36 million, or 6.6% (decreased 4.4% on a constant currency bases), in fiscal 2019 as compared to fiscal 2018. The decrease in Corporate Investments net revenue was due to lower services revenue from the Communications and Media Solutions (‘‘CMS’’) business and unfavorable currency fluctuations. Corporate Investments loss from operations as a percentage of net revenue increased 4.5 percentage points in fiscal 2019 as compared to fiscal 2018, due primarily to higher R&D expenses from Hewlett Packard Labs and a legal settlement expense in the CMS business, partially offset by a higher gross margin from the CMS business. Fiscal 2018 compared with Fiscal 2017 Corporate Investments net revenue decreased by $10 million, or 1.8% (decreased 4.0% on a constant currency bases), in fiscal 2018 as compared to fiscal 2017. The decrease in Corporate Investments net revenue, was due to lower services revenue from the CMS business. Corporate Investments loss from operations as a percentage of net revenue increased 0.3 percentage points in fiscal 2018 as compared to fiscal 2017, due primarily to the net revenue decline and a lower gross margin partially offset by lower R&D expenses from Hewlett Packard Labs, lower field selling costs and administrative expense from the CMS business. We use cash generated by operations as our primary source of liquidity. We believe that internally generated cash flows will be generally sufficient to support our operating businesses, capital expenditures, product development initiatives, acquisition and disposal activities including legal settlements, restructuring activities, transformation costs, indemnifications, maturing debt, interest payments, income tax payments, in addition to any future investments and any future share repurchases, and future stockholder dividend payments. We expect to supplement this short-term liquidity, if necessary, by accessing the capital markets, issuing commercial paper, and borrowing under credit facilities made available by various domestic and foreign financial institutions. However, our access to capital markets may be constrained and our cost of borrowing may increase under certain business, market and economic conditions. Our liquidity is subject to various risks including the risks identified in the section entitled ‘‘Risk Factors’’ in Item 1A and market risks identified in the section entitled ‘‘Quantitative and Qualitative Disclosures about Market Risk’’ in Item 7A, each of which is incorporated herein by reference. Our cash balances are held in numerous locations throughout the world, with a substantial amount held outside of the U. S. We utilize a variety of planning and financing strategies in an effort to ensure that our worldwide cash is available when and where it is needed. Our cash position is strong and we expect that our cash balances, anticipated cash flow generated from operations and access to capital markets will be sufficient to cover our expected near-term cash outlays. CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – A summary of our borrowings and known or estimated contractual obligations as of April 30, 2018, and the timing and effect that such commitments are expected to have on our liquidity and capital requirements in future periods is as follows:
<table><tr><td></td><td>Total</td><td>Less Than1 Year</td><td>1 - 3 Years</td><td>4 - 5 Years</td><td>After 5 Years</td></tr><tr><td>Long-term debt (including future interest payments)</td><td>$1,841,887</td><td>$72,688</td><td>$781,969</td><td>$591,292</td><td>$395,938</td></tr><tr><td>Contingent acquisition payments</td><td>12,060</td><td>6,979</td><td>5,081</td><td>—</td><td>—</td></tr><tr><td>Capital lease obligations</td><td>5,628</td><td>1,026</td><td>2,197</td><td>2,405</td><td>—</td></tr><tr><td>Operating leases</td><td>820,905</td><td>230,163</td><td>401,809</td><td>155,120</td><td>33,813</td></tr><tr><td>One-time transition tax liability</td><td>17,721</td><td>2,448</td><td>4,053</td><td>3,795</td><td>7,425</td></tr><tr><td>Guaranty on Refund Advance loans</td><td>1,571</td><td>1,571</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total contractual cash obligations</td><td>$2,699,772</td><td>$314,875</td><td>$1,195,109</td><td>$752,612</td><td>$437,176</td></tr></table>
The table above does not reflect unrecognized tax benefits of approximately $186 million due to the high degree of uncertainty regarding the future cash flows associated with these amounts. In connection with our agreement with BofI, we are required to purchase a 90% participation interest, at par, in all EAs originated by our lending partner. During fiscal year 2018, we decided to permanently close approximately 400 tax offices after this year's tax season and, as a result, wrote off $7.4 million in related leasehold improvements, furniture and signage. In conjunction with these office closures, we expect to incur $15 million to $20 million of expense in fiscal year 2019 as we exit the related operating leases. See discussion of contractual obligations and commitments in Item 8, within the notes to the consolidated financial statements. REGULATORY ENVIRONMENT – The federal government, various state, local, provincial and foreign governments, and some self-regulatory organizations have enacted statutes and ordinances, or adopted rules and regulations, regulating aspects of our business. These aspects include, but are not limited to, commercial income tax return preparers, income tax courses, the electronic filing of income tax returns, the offering of RTs, privacy, consumer protection, franchising, sales methods and banking. We determine the applicability of such statutes, ordinances, rules and regulations (collectively, Laws) and work to comply with those Laws that are applicable to us or our services or products. On November 17, 2017, the CFPB officially published the Payday Rule. Certain limited provisions of the Payday Rule became effective on January 16, 2018, but most provisions do not become effective until August 19, 2019. However, on January 16, 2018, the CFPB stated its intention to engage in a rulemaking process so that the CFPB may reconsider the Payday Rule, and industry groups have filed lawsuits challenging the rule. Given these developments, we are unsure whether, and in what form, the Payday Rule will go into effect. Depending on the outcome of the rulemaking process and litigation, which may include the Payday Rule becoming effective in its current form, the Payday Rule may have a material adverse impact on the EA product, our business, and our consolidated financial position, results of operations, and cash flows. We will continue to analyze the potential impact on the Company as the CFPB’s rulemaking process progresses. On October 5, 2016, the CFPB released the Prepaid Card Rule. The Prepaid Card Rule was scheduled to take effect on April 1, 2018, with certain provisions phased in over time following that date. However, on January 25, 2018, the CFPB amended the Prepaid Card Rule and extended the general effective date until April 1, 2019. Once effective, the Prepaid Card Rule will apply to the Emerald Card. The Prepaid Card Rule, among other things: (i) requires consumer disclosures to be made prior to acquiring a prepaid account; (ii) requires periodic statements or online access to specified account information; and (iii) requires online posting of the Cardholder Agreement and submission of new and revised Cardholder Agreements to the CFPB. We do not expect that the Prepaid Card Rule will have a material adverse effect on our business or our consolidated financial position, results of operations, and cash flows. From time to time in the ordinary course of business, we receive inquiries from governmental and self-regulatory agencies regarding the applicability of Laws to our services and products. In response to past inquiries, we have Table 70: Credit Card and Other Consumer Loan Classes Asset Quality Indicators
<table><tr><td></td><td colspan="2">Credit Card (a)</td><td colspan="2">Other Consumer (b)</td></tr><tr><td>Dollars in millions</td><td>Amount</td><td>% of Total Loans Using FICO Credit Metric</td><td>Amount</td><td>% of Total Loans Using FICO Credit Metric</td></tr><tr><td> December 31, 2012</td><td></td><td></td><td></td><td></td></tr><tr><td>FICO score greater than 719</td><td>$2,247</td><td>52%</td><td>$7,006</td><td>60%</td></tr><tr><td>650 to 719</td><td>1,169</td><td>27</td><td>2,896</td><td>25</td></tr><tr><td>620 to 649</td><td>188</td><td>5</td><td>459</td><td>4</td></tr><tr><td>Less than 620</td><td>271</td><td>6</td><td>602</td><td>5</td></tr><tr><td>No FICO score available or required (c)</td><td>428</td><td>10</td><td>741</td><td>6</td></tr><tr><td>Total loans using FICO credit metric</td><td>4,303</td><td>100%</td><td>11,704</td><td>100%</td></tr><tr><td>Consumer loans using other internal credit metrics (b)</td><td></td><td></td><td>9,747</td><td></td></tr><tr><td>Total loan balance</td><td>$4,303</td><td></td><td>$21,451</td><td></td></tr><tr><td>Weighted-average updated FICO score (d)</td><td></td><td>726</td><td></td><td>739</td></tr><tr><td>December 31, 2011</td><td></td><td></td><td></td><td></td></tr><tr><td>FICO score greater than 719</td><td>$2,016</td><td>51%</td><td>$5,556</td><td>61%</td></tr><tr><td>650 to 719</td><td>1,100</td><td>28</td><td>2,125</td><td>23</td></tr><tr><td>620 to 649</td><td>184</td><td>5</td><td>370</td><td>4</td></tr><tr><td>Less than 620</td><td>284</td><td>7</td><td>548</td><td>6</td></tr><tr><td>No FICO score available or required (c)</td><td>392</td><td>9</td><td>574</td><td>6</td></tr><tr><td>Total loans using FICO credit metric</td><td>3,976</td><td>100%</td><td>9,173</td><td>100%</td></tr><tr><td>Consumer loans using other internal credit metrics (b)</td><td></td><td></td><td>9,993</td><td></td></tr><tr><td>Total loan balance</td><td>$3,976</td><td></td><td>$19,166</td><td></td></tr><tr><td>Weighted-average updated FICO score (d)</td><td></td><td>723</td><td></td><td>739</td></tr></table>
(a) At December 31, 2012, we had $36 million of credit card loans that are higher risk (i. e. , loans with both updated FICO scores less than 660 and in late stage (90+ days) delinquency status). The majority of the December 31, 2012 balance related to higher risk credit card loans is geographically distributed throughout the following areas: Ohio 18%, Pennsylvania 14%, Michigan 12%, Illinois 8%, Indiana 6%, Florida 6%, New Jersey 5%, Kentucky 4%, and North Carolina 4%. All other states, none of which comprise more than 3%, make up the remainder of the balance. At December 31, 2011, we had $49 million of credit card loans that are higher risk. The majority of the December 31, 2011 balance related to higher risk credit card loans is geographically distributed throughout the following areas: Ohio 20%, Michigan 14%, Pennsylvania 13%, Illinois 7%, Indiana 7%, Florida 6% and Kentucky 5%. All other states, none of which comprise more than 4%, make up the remainder of the balance. (b) Other consumer loans for which updated FICO scores are used as an asset quality indicator include nongovernment guaranteed or insured education loans, automobile loans and other secured and unsecured lines and loans. Other consumer loans (or leases) for which other internal credit metrics are used as an asset quality indicator include primarily government guaranteed or insured education loans, as well as consumer loans to high net worth individuals and pools of auto loans (and leases) financed for PNC clients via securitization facilities. Other internal credit metrics may include delinquency status, geography, loan to value, asset concentrations, loss coverage multiples, net loss rates or other factors as well as servicer quality reviews associated with the securitizations or other factors. (c) Credit card loans and other consumer loans with no FICO score available or required refers to new accounts issued to borrowers with limited credit history, accounts for which we cannot obtain an updated FICO (e. g. , recent profile changes), cards issued with a business name, and/or cards secured by collateral. Management proactively assesses the risk and size of this loan portfolio and, when necessary, takes actions to mitigate the credit risk. (d) Weighted-average updated FICO score excludes accounts with no FICO score available or required. DEVON ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Debt maturities as of December 31, 2013, excluding premiums and discounts, are as follows (in millions):
<table><tr><td>2014</td><td>$4,067</td></tr><tr><td>2015</td><td>—</td></tr><tr><td>2016</td><td>500</td></tr><tr><td>2017</td><td>750</td></tr><tr><td>2018</td><td>125</td></tr><tr><td>2019 and thereafter</td><td>6,600</td></tr><tr><td>Total</td><td>$12,042</td></tr></table>
Credit Lines Devon has a $3.0 billion syndicated, unsecured revolving line of credit (the “Senior Credit Facility”) that matures on October 24, 2018. However, prior to the maturity date, Devon has the option to extend the maturity for up to one additional one-year period, subject to the approval of the lenders. Amounts borrowed under the Senior Credit Facility may, at the election of Devon, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. However, Devon may elect to borrow at the prime rate. The Senior Credit Facility currently provides for an annual facility fee of $3.8 million that is payable quarterly in arrears. As of December 31, 2013, there were no borrowings under the Senior Credit Facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon’s ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65 percent. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in the accompanying financial statements. Also, total capitalization is adjusted to add back noncash financial write-downs such as full cost ceiling impairments or goodwill impairments. As of December 31, 2013, Devon was in compliance with this covenant with a debt-tocapitalization ratio of 25.7 percent. Commercial Paper Devon has access to $3.0 billion of short-term credit under its commercial paper program. Commercial paper debt generally has a maturity of between 1 and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. The interest rate is generally based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found in the commercial paper market. As of December 31, 2013, Devon’s weighted average borrowing rate on its commercial paper borrowings was 0.30 percent. Other Debentures and Notes Following are descriptions of the various other debentures and notes outstanding at December 31, 2013, as listed in the table presented at the beginning of this note. GeoSouthern Debt In December 2013, in conjunction with the planned GeoSouthern acquisition, Devon issued $2.25 billion aggregate principal amount of fixed and floating rate senior notes resulting in cash proceeds of approximately Results of Operations – Capital Markets The following table presents consolidated financial information for the Capital Markets segment for the years indicated:
<table><tr><td></td><td colspan="5">Year Ended</td></tr><tr><td></td><td>September 30, 2007</td><td>% Incr. (Decr.)</td><td>September 30, 2006</td><td>% Incr. (Decr.)</td><td>September 30, 2005</td></tr><tr><td></td><td colspan="5">($ in 000's)</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Institutional Sales Commissions:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equity</td><td>$ 210,343</td><td>-3%</td><td>$ 217,840</td><td>13%</td><td>$ 193,001</td></tr><tr><td>Fixed Income</td><td>44,454</td><td>6%</td><td>41,830</td><td>-37%</td><td>66,431</td></tr><tr><td>Underwriting Fees</td><td>93,712</td><td>11%</td><td>84,303</td><td>8%</td><td>77,900</td></tr><tr><td>Mergers & Acquisitions Fees</td><td>59,929</td><td>34%</td><td>44,693</td><td>5%</td><td>42,576</td></tr><tr><td>Private Placement Fees</td><td>2,262</td><td>-3%</td><td>2,334</td><td>-56%</td><td>5,338</td></tr><tr><td>Trading Profits</td><td>9,262</td><td>-58%</td><td>21,876</td><td>15%</td><td>19,089</td></tr><tr><td>Raymond James Tax Credit Funds</td><td>35,123</td><td>11%</td><td>31,710</td><td>19%</td><td>26,630</td></tr><tr><td>Interest</td><td>46,772</td><td>29%</td><td>36,311</td><td>74%</td><td>20,847</td></tr><tr><td>Other</td><td>4,641</td><td>-29%</td><td>6,522</td><td>95%</td><td>3,339</td></tr><tr><td>Total Revenue</td><td>506,498</td><td>4%</td><td>487,419</td><td>7%</td><td>455,151</td></tr><tr><td>Interest Expense</td><td>56,841</td><td>23%</td><td>46,126</td><td>133%</td><td>19,838</td></tr><tr><td>Net Revenues</td><td>449,657</td><td>2%</td><td>441,293</td><td>1%</td><td>435,313</td></tr><tr><td>Non-Interest Expenses</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Sales Commissions</td><td>98,903</td><td>2%</td><td>96,649</td><td>-3%</td><td>99,223</td></tr><tr><td>Admin & Incentive Comp and Benefit Costs</td><td>204,512</td><td>2%</td><td>200,453</td><td>2%</td><td>197,170</td></tr><tr><td>Communications and Information Processing</td><td>32,366</td><td>20%</td><td>27,084</td><td>13%</td><td>24,071</td></tr><tr><td>Occupancy and Equipment</td><td>13,196</td><td>9%</td><td>12,073</td><td>-4%</td><td>12,563</td></tr><tr><td>Business Development</td><td>23,468</td><td>6%</td><td>22,177</td><td>17%</td><td>18,995</td></tr><tr><td>Clearance and Other</td><td>23,054</td><td>16%</td><td>19,907</td><td>38%</td><td>14,395</td></tr><tr><td>Total Non-Interest Expense</td><td>395,499</td><td>5%</td><td>378,343</td><td>3%</td><td>366,417</td></tr><tr><td>Income Before Taxes and Minority Interest</td><td>54,158</td><td>-14%</td><td>62,950</td><td>-9%</td><td>68,896</td></tr><tr><td>Minority Interest</td><td>-14,808</td><td></td><td>-15,271</td><td></td><td>-8,437</td></tr><tr><td>Pre-tax Earnings</td><td>$ 68,966</td><td>-12%</td><td>$ 78,221</td><td>1%</td><td>$ 77,333</td></tr></table>
Year ended September 30, 2007 Compared with the Year ended September 30, 2006 – Capital Markets The Capital Markets segment pre-tax earnings declined 12% despite a 2% increase in net revenues. Commission revenue was down slightly, the net of a decline in equity commissions related to the decline in commissions generated by underwriting transactions, and an increase in fixed income commissions, a result of the increased volatility. Commissions generated by underwriting transactions reached a record $41 million in the prior year and were only $22 million in the current year. The increase in underwriting fees included increases of $3 million at RJA, despite a decline in the number of deals from 97 to 78, and $3 million at RJ Ltd. on 30 deals versus 29 in the prior year. Merger and acquisition fees were up $15 million, reaching an all time record level of $60 million for the year. During fiscal 2007, RJA closed 15 individual merger and acquisition transactions with fees in excess of $1 million. Trading profits were down 58% from the prior year, reflecting a particularly difficult fixed income trading environment during the fourth quarter. As credit issues drove fixed income product values down there was a flight to quality and the firm’s economic hedges (short positions in US Treasuries) contributed additional losses. Meanwhile, there were also increased losses in equity customer facilitations and OTC market making. Raymond James Tax Credit Fund (“RJTCF”) revenues increased 11% as they invested $375 million for institutional investors versus $277 million in the prior year. Interest revenue increased related to higher average fixed income inventory levels. Expenses were generally in line with revenue growth with two exceptions. Communications and information processing increased predominantly due to increased costs associated with market information systems and software development costs. Other expense reflects a shift to the use of electronic and other non-exchange clearing methods and includes transaction related underwriting expenses incurred by RJTCF. Year ended September 30, 2006 Compared with the Year ended September 30, 2005 – Capital Markets The Capital Markets segment’s revenues and pre-tax profits increased just slightly from the prior year’s record results. Commission revenues in the segment were flat, as a 37% decline in fixed income commissions was offset by the 13% increase in institutional equity commissions, the latter continuing to be fueled by an active new issue market. RJA equity market conditions remained strong, allowing RJA to complete 97 managed or co-managed domestic underwritings, just one short of the record 98 underwritings completed in fiscal 2005. RJ Ltd. completed a record 29 managed or co-managed underwritings, up nine from fiscal 2005. Merger and acquisition fees increased modestly from the prior year's record level, offsetting the decline in private placement fees. Equity Capital Market's most active strategic business units in fiscal 2006 were Energy, Technology, Financial Services and Real Estate. increased taxes, licenses and fees by $25 million. These factors combined to result in a 0.5 point negative impact on the Personal segment’s 2005 underwriting expense ratio. In 2004, the 1.2 increase in the underwriting expense ratio over 2003 reflected the impact of the same investments described above. |
0.15641 | what percent of the net change in revenue between 2006 and 2007 was due to transmission revenue? | Entergy Texas, Inc. Management's Financial Discussion and Analysis 361 Fuel and purchased power expenses increased primarily due to an increase in power purchases as a result of the purchased power agreements between Entergy Gulf States Louisiana and Entergy Texas and an increase in the average market prices of purchased power and natural gas, substantially offset by a decrease in deferred fuel expense as a result of decreased recovery from customers of fuel costs. Other regulatory charges increased primarily due to an increase of $6.9 million in the recovery of bond expenses related to the securitization bonds. The recovery became effective July 2007. See Note 5 to the financial statements for additional information regarding the securitization bonds.2007 Compared to 2006 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 2007 to 2006.
<table><tr><td></td><td>Amount (In Millions)</td></tr><tr><td>2006 net revenue</td><td>$403.3</td></tr><tr><td>Purchased power capacity</td><td>13.1</td></tr><tr><td>Securitization transition charge</td><td>9.9</td></tr><tr><td>Volume/weather</td><td>9.7</td></tr><tr><td>Transmission revenue</td><td>6.1</td></tr><tr><td>Base revenue</td><td>2.6</td></tr><tr><td>Other</td><td>-2.4</td></tr><tr><td>2007 net revenue</td><td>$442.3</td></tr></table>
The purchased power capacity variance is due to changes in the purchased power capacity costs included in the calculation in 2007 compared to 2006 used to bill generation costs between Entergy Texas and Entergy Gulf States Louisiana. The securitization transition charge variance is due to the issuance of securitization bonds. As discussed above, in June 2007, EGSRF I, a company wholly-owned and consolidated by Entergy Texas, issued securitization bonds and with the proceeds purchased from Entergy Texas the transition property, which is the right to recover from customers through a transition charge amounts sufficient to service the securitization bonds. See Note 5 to the financial statements herein for details of the securitization bond issuance. The volume/weather variance is due to increased electricity usage on billed retail sales, including the effects of more favorable weather in 2007 compared to the same period in 2006. The increase is also due to an increase in usage during the unbilled sales period. Retail electricity usage increased a total of 139 GWh in all sectors. See "Critical Accounting Estimates" below and Note 1 to the financial statements for further discussion of the accounting for unbilled revenues. The transmission revenue variance is due to an increase in rates effective June 2007 and new transmission customers in late 2006. The base revenue variance is due to the transition to competition rider that began in March 2006. Refer to Note 2 to the financial statements for further discussion of the rate increase. Gross operating revenues, fuel and purchased power expenses, and other regulatory charges Gross operating revenues decreased primarily due to a decrease of $179 million in fuel cost recovery revenues due to lower fuel rates and fuel refunds. The decrease was partially offset by the $39 million increase in net revenue described above and an increase of $44 million in wholesale revenues, including $30 million from the System Agreement cost equalization payments from Entergy Arkansas. The receipt of such payments is being Noble Energy, Inc. Notes to Consolidated Financial Statements Additional fair value disclosures about plan assets are as follows:
<table><tr><td></td><td colspan="4">Fair Value Measurements Using</td></tr><tr><td>Asset Category</td><td>Quoted Prices inActive Markets forIdentical Assets(Level 1)(1)</td><td>SignificantObservable Inputs(Level 2)(1)</td><td>SignificantUnobservable Inputs(Level 3)(1)</td><td>Total</td></tr><tr><td>(millions)</td><td></td><td></td><td></td><td></td></tr><tr><td>December 31, 2011</td><td></td><td></td><td></td><td></td></tr><tr><td>Federal Money Market Funds</td><td>$1</td><td>$-</td><td>$-</td><td>$1</td></tr><tr><td>Mutual Funds</td><td></td><td></td><td></td><td></td></tr><tr><td>Large Cap Funds</td><td>66</td><td>-</td><td>-</td><td>66</td></tr><tr><td>Mid Cap Funds</td><td>10</td><td>-</td><td>-</td><td>10</td></tr><tr><td>Blended Funds</td><td>6</td><td>-</td><td>-</td><td>6</td></tr><tr><td>Emerging Markets Funds</td><td>6</td><td>-</td><td>-</td><td>6</td></tr><tr><td>Fixed Income Funds</td><td>77</td><td>-</td><td>-</td><td>77</td></tr><tr><td>Common Collective Trust Funds</td><td></td><td></td><td></td><td></td></tr><tr><td>Large Cap Funds</td><td>-</td><td>17</td><td>-</td><td>17</td></tr><tr><td>Small Cap Funds</td><td>-</td><td>12</td><td>-</td><td>12</td></tr><tr><td>International Funds</td><td>-</td><td>24</td><td>-</td><td>24</td></tr><tr><td>Total</td><td>$166</td><td>$53</td><td>$-</td><td>$219</td></tr><tr><td>December 31, 2010</td><td></td><td></td><td></td><td></td></tr><tr><td>Federal Money Market Funds</td><td>$2</td><td>$-</td><td>$-</td><td>$2</td></tr><tr><td>Mutual Funds</td><td></td><td></td><td></td><td></td></tr><tr><td>Large Cap Funds</td><td>69</td><td>-</td><td>-</td><td>69</td></tr><tr><td>Mid Cap Funds</td><td>10</td><td>-</td><td>-</td><td>10</td></tr><tr><td>Blended Funds</td><td>6</td><td>-</td><td>-</td><td>6</td></tr><tr><td>Emerging Markets Funds</td><td>7</td><td>-</td><td>-</td><td>7</td></tr><tr><td>Fixed Income Funds</td><td>55</td><td>-</td><td>-</td><td>55</td></tr><tr><td>Common Collective Trust Funds</td><td></td><td></td><td></td><td></td></tr><tr><td>Large Cap Funds</td><td>-</td><td>16</td><td>-</td><td>16</td></tr><tr><td>Small Cap Funds</td><td>-</td><td>12</td><td>-</td><td>12</td></tr><tr><td>International Funds</td><td>-</td><td>29</td><td>-</td><td>29</td></tr><tr><td>Total</td><td>$149</td><td>$57</td><td>$-</td><td>$206</td></tr></table>
(1) See Note 1. Summary of Significant Accounting Policies - Fair Value Measurements for a description of the fair value hierarchy. Additional information about plan assets, including methods and assumptions used to estimate the fair values of plan assets, is as follows: Federal Money Market Funds Investments in federal money market funds consist of portfolios of high quality fixed income securities (such as US Treasury securities) which, generally, have maturities of less than one year. The fair value of these investments is based on quoted market prices for identical assets as of the measurement date. Mutual Funds Investments in mutual funds consist of diversified portfolios of common stocks and fixed income instruments. The common stock mutual funds are diversified by market capitalization and investment style as well as economic sector and industry. The fixed income mutual funds are diversified primarily in government bonds, mortgage backed securities, and corporate bonds, most of which are rated investment grade. The fair values of these investments are based on quoted market prices for identical assets as of the measurement date. Common Collective Trust Funds Investments in common collective trust funds consist of common stock investments in both US and non-US equity markets. Portfolios are diversified by market capitalization and investment style as well as economic sector and industry. The investments in the non-US equity markets are used to further enhance the plan’s overall equity diversification which is expected to moderate the plan’s overall risk volatility. In addition to the normal risk associated with stock market investing, investments in foreign equity markets may carry additional political, regulatory, and currency risk which is taken into account by the committee in its deliberations. The fair value of these investments is based on quoted prices for similar assets in active markets. All of the investments in common collective trust funds represent exchange-traded securities with readily observable prices. Risk Management The oil and gas business is subject to many significant risks, including operational, strategic, financial and compliance/ regulatory risks. We strive to maintain a proactive enterprise risk management (ERM) process to plan, organize, and control our activities in a manner which is intended to minimize the effects of risk on our capital, cash flows and earnings. ERM expands our process to include risks associated with accidental losses, as well as operational, strategic, financial, compliance/regulatory, and other risks. Our ERM process is designed to operate in an annual cycle, integrated with our long range plans, and supportive of our capital structure planning. Elements include, among others, cash flow at risk analysis, credit risk management, a commodity hedging program to reduce the impacts of commodity price volatility, an insurance program to protect against disruptions in our cash flows, a robust global compliance program, and government and community relations initiatives. We benchmark our program against our peers and other global organizations. See Item 1A. Risk Factors for a discussion of specific risks we face in our business. Available Information Our website address is www. nobleenergyinc. com. Available on this website under “Investors – SEC Filings,” free of charge, are our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, Forms 3, 4 and 5 filed on behalf of directors and executive officers and amendments to those reports as soon as reasonably practicable after such materials are electronically filed with or furnished to the SEC. Alternatively, you may access these reports at the SEC’s website at www. sec. gov. Also posted on our website under “About Us – Corporate Governance”, and available in print upon request made by any stockholder to the Investor Relations Department, are charters for our Audit Committee, Compensation, Benefits and Stock Option Committee, Corporate Governance and Nominating Committee, and Environment, Health and Safety Committee. Copies of the Code of Conduct and the Code of Ethics for Chief Executive and Senior Financial Officers (the Codes) are also posted on our website under the “Corporate Governance” section. Within the time period required by the SEC and the NYSE, as applicable, we will post on our website any modifications to the Codes and any waivers applicable to senior officers as defined in the applicable Code, as required by the Sarbanes-Oxley Act of 2002. Item 1A. Risk Factors Described below are certain risks that we believe are applicable to our business and the oil and gas industry in which we operate. There may be additional risks that are not presently material or known. You should carefully consider each of the following risks and all other information set forth in this Annual Report on Form 10-K. If any of the events described below occur, our business, financial condition, results of operations, cash flows, liquidity or access to the capital markets could be materially adversely affected. In addition, the current global economic and political environment intensifies many of these risks. We are currently experiencing a severe downturn in the oil and gas business cycle, and an extended or more severe downturn could have material adverse effects on our operations, our liquidity, and the price of our common stock. Our ability to operate profitably, maintain adequate liquidity, grow our business and pay dividends on our common stock depend highly upon the prices we receive for our crude oil, natural gas, and NGL production. Commodity prices are volatile. Crude oil prices, in particular, began to decline significantly in the fourth quarter 2014, declined further in 2015 and have continued to trade at a low level or decline further thus far in 2016. High and low monthly daily average prices for crude oil and high and low contract expiration prices for natural gas for the last three years and into 2016 were as follows:
<table><tr><td></td><td rowspan="2">Jan. 1 - Feb.12, 2016</td><td colspan="3">Year Ended December 31,</td></tr><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>NYMEX</td><td></td><td></td><td></td><td></td></tr><tr><td>Crude Oil - WTI (per Bbl) High<sup>(1)</sup></td><td>$31.78</td><td>$59.83</td><td>$105.15</td><td>$110.53</td></tr><tr><td>Crude Oil - WTI (per Bbl) Low<sup>(1)</sup></td><td>29.71</td><td>37.33</td><td>59.29</td><td>86.68</td></tr><tr><td>Natural Gas - HH (Per MMbtu) High</td><td>2.23</td><td>3.19</td><td>5.56</td><td>4.46</td></tr><tr><td>Natural Gas - HH (Per MMbtu) Low</td><td>2.05</td><td>2.03</td><td>3.73</td><td>3.11</td></tr><tr><td>Brent</td><td></td><td></td><td></td><td></td></tr><tr><td>Crude Oil - (per Bbl) High</td><td>32.80</td><td>64.32</td><td>111.76</td><td>118.90</td></tr><tr><td>Crude Oil - (per Bbl) Low</td><td>31.93</td><td>38.21</td><td>62.91</td><td>97.69</td></tr></table> |
-0.34454 | what is the percentage change in research and development expense from 2015 to 2016? | Table of Contents 16 Other Equity Method Investments InfraServs. We hold indirect ownership interests in several German InfraServ Groups that own and develop industrial parks and provide on-site general and administrative support to tenants. Our ownership interest in the equity investments in InfraServ affiliates are as follows:
<table><tr><td></td><td>As of December 31, 2017 (In percentages)</td></tr><tr><td>InfraServ GmbH & Co. Gendorf KG<sup>-1</sup></td><td>39</td></tr><tr><td>InfraServ GmbH & Co. Hoechst KG</td><td>32</td></tr><tr><td>InfraServ GmbH & Co. Knapsack KG<sup>-1</sup></td><td>27</td></tr></table>
(1) See Note 29 - Subsequent Events in the accompanying consolidated financial statements for further information. Research and Development Our business models leverage innovation and conduct research and development activities to develop new, and optimize existing, production technologies, as well as to develop commercially viable new products and applications. Research and development expense was $72 million, $78 million and $119 million for the years ended December 31, 2017, 2016 and 2015, respectively. We consider the amounts spent during each of the last three fiscal years on research and development activities to be sufficient to execute our current strategic initiatives. Intellectual Property We attach importance to protecting our intellectual property, including safeguarding our confidential information and through our patents, trademarks and copyrights, in order to preserve our investment in research and development, manufacturing and marketing. Patents may cover processes, equipment, products, intermediate products and product uses. We also seek to register trademarks as a means of protecting the brand names of our Company and products. Patents. In most industrial countries, patent protection exists for new substances and formulations, as well as for certain unique applications and production processes. However, we do business in regions of the world where intellectual property protection may be limited and difficult to enforce. Confidential Information. We maintain stringent information security policies and procedures wherever we do business. Such information security policies and procedures include data encryption, controls over the disclosure and safekeeping of confidential information and trade secrets, as well as employee awareness training. Trademarks. Amcel? , AOPlus? , Ateva? , Avicor? , Celanese? , Celanex? , Celcon? , CelFX? , Celstran? , Celvolit? , Clarifoil? , DurO-Set? , Ecomid? , EcoVAE? , Forflex? , Forprene? , FRIANYL? , Fortron? , GHR? , Gumfit? , GUR? , Hostaform? , Laprene? , MetaLX? , Mowilith? , MT? , NILAMID? , Nivionplast? , Nutrinova? , Nylfor? , Pibiflex? , Pibifor? , Pibiter? , Polifor? , Resyn? , Riteflex? , SlideX? , Sofprene? , Sofpur? , Sunett? , Talcoprene? , Tecnoprene? , Thermx? , TufCOR? , VAntage? , Vectra? , Vinac? , Vinamul? , VitalDose? , Zenite? and certain other branded products and services named in this document are registered or reserved trademarks or service marks owned or licensed by Celanese. The foregoing is not intended to be an exhaustive or comprehensive list of all registered or reserved trademarks and service marks owned or licensed by Celanese. Fortron? is a registered trademark of Fortron Industries LLC. Hostaform? is a registered trademark of Hoechst GmbH. Mowilith? and NILAMID? are registered trademarks of Celanese in most European countries. We monitor competitive developments and defend against infringements on our intellectual property rights. Neither Celanese nor any particular business segment is materially dependent upon any one patent, trademark, copyright or trade secret. Environmental and Other Regulation Matters pertaining to environmental and other regulations are discussed in Item 1A. Risk Factors, as well as Note 2 - Summary of Accounting Policies, Note 16 - Environmental and Note 24 - Commitments and Contingencies in the accompanying consolidated financial statements. NOTE 7 - BANK LOANS, NET: Bank client receivables are comprised of loans originated or purchased by RJ Bank and include commercial and residential real estate loans, as well as commercial and consumer loans. These receivables are collateralized by first or second mortgages on residential or other real property, by other assets of the borrower or are unsecured. The following table presents the balance and associated percentage of each major loan category in RJ Bank's portfolio, including loans receivable and loans available for sale:
<table><tr><td></td><td colspan="2">September 30, 2009</td><td colspan="2">September 30, 2008</td><td colspan="2">September 30, 2007</td><td colspan="2">September 30, 2006</td><td colspan="2">September 30, 2005</td></tr><tr><td></td><td>Balance%</td><td></td><td>Balance%</td><td></td><td>Balance%</td><td></td><td>Balance%</td><td></td><td>Balance%</td><td></td></tr><tr><td></td><td colspan="10">($ in 000’s)</td></tr><tr><td>Commercial</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loans</td><td>$ 851,657</td><td>13%</td><td>$ 725,997</td><td>10%</td><td>$ 343,783</td><td>7%</td><td>$ 272,957</td><td>12%</td><td>$ 144,254</td><td>14%</td></tr><tr><td>Real Estate</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Construction</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loans</td><td>163,951</td><td>3%</td><td>346,691</td><td>5%</td><td>123,664</td><td>3%</td><td>34,325</td><td>2%</td><td>32,563</td><td>3%</td></tr><tr><td>Commercial</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Real Estate</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loans -1</td><td>3,343,989</td><td>49%</td><td>3,528,732</td><td>49%</td><td>2,317,840</td><td>49%</td><td>653,695</td><td>28%</td><td>136,375</td><td>14%</td></tr><tr><td>Residential</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Mortgage</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loans</td><td>2,398,822</td><td>35%</td><td>2,599,567</td><td>36%</td><td>1,934,645</td><td>41%</td><td>1,322,908</td><td>58%</td><td>690,242</td><td>69%</td></tr><tr><td>Consumer</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loans</td><td>22,816</td><td>-</td><td>23,778</td><td>-</td><td>4,541</td><td>-</td><td>1,917</td><td>-</td><td>2,752</td><td>-</td></tr><tr><td>Total Loans</td><td>6,781,235</td><td>100%</td><td>7,224,765</td><td>100%</td><td>4,724,473</td><td>100%</td><td>2,285,802</td><td>100%</td><td>1,006,186</td><td>100%</td></tr><tr><td>Net Unearned</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income and</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deferred</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Expenses -2</td><td>-36,990</td><td></td><td>-41,383</td><td></td><td>-13,242</td><td></td><td>-4,276</td><td></td><td>1,688</td><td></td></tr><tr><td>Allowance for</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loan Losses</td><td>-150,272</td><td></td><td>-88,155</td><td></td><td>-47,022</td><td></td><td>-18,694</td><td></td><td>-7,593</td><td></td></tr><tr><td></td><td>-187,262</td><td></td><td>-129,538</td><td></td><td>-60,264</td><td></td><td>-22,970</td><td></td><td>-5,905</td><td></td></tr><tr><td>Loans, Net</td><td>$6,593,973</td><td></td><td>$7,095,227</td><td></td><td>$ 4,664,209</td><td></td><td>$ 2,262,832</td><td></td><td>$ 1,000,281</td><td></td></tr></table>
(1) Of this amount, $1.2 billion, $1.2 billion, $687 million, $393 million and $137 million is secured by non-owner occupied commercial real estate properties or their repayment is dependent upon the operation or sale of commercial real estate properties as of September 30, 2009, 2008, 2007, 2006 and 2005, respectively. The remainder is wholly or partially secured by real estate, the majority of which is also secured by other assets of the borrower. (2) Includes purchase premiums, purchase discounts, and net deferred origination fees and costs. At September 30, 2009 and September 30, 2008, RJ Bank had $950 million and $1.7 billion, respectively, in FHLB advances secured by a blanket lien on RJ Bank's residential mortgage loan portfolio. See Note 11 for more information regarding the FHLB advances. At September 30, 2009 and 2008, RJ Bank had $40.5 million and $524,000 in loans held for sale, respectively. RJ Bank's gain from the sale of these loans held for sale was $676,000, $364,000 and $518,000 for the years ended September 30, 2009, 2008 and 2007, respectively business conducted annually with each institution. Fixed income commissions are based on trade size and the characteristics of the specific security involved. Capital Markets Commissions For the Fiscal Years Ended:
<table><tr><td></td><td>September 30, 2009</td><td>% of Total</td><td>September 30, 2008</td><td>% of Total</td><td>September 30, 2007</td><td>% of Total</td></tr><tr><td></td><td colspan="6">($ in 000's)</td></tr><tr><td>Equity</td><td>$ 212,322</td><td>57%</td><td>$ 237,920</td><td>70%</td><td>$ 210,343</td><td>83%</td></tr><tr><td>Fixed Income</td><td>160,211</td><td>43%</td><td>99,870</td><td>30%</td><td>44,454</td><td>17%</td></tr><tr><td>Total Commissions</td><td>$ 372,533</td><td>100%</td><td>$ 337,790</td><td>100%</td><td>$ 254,797</td><td>100%</td></tr></table>
Approximately 100 domestic and overseas professionals in RJ&A's Institutional Equity Sales and Sales Trading Departments maintain relationships with over 1,190 institutional clients, principally in North America and Europe. In addition to our headquarters in St. Petersburg, Florida, RJ&A has institutional equity sales offices in New York City, Boston, Chicago, Los Angeles, San Francisco, London, Geneva, Brussels, Dusseldorf, Luxembourg and Paris. European offices also provide services to high net worth clients. RJ Ltd. has 33 institutional equity sales and trading professionals servicing predominantly Canadian institutional investors from offices in Montreal, Toronto and Vancouver. RJ&A distributes to institutional clients both taxable and tax-exempt fixed income products, primarily municipal, corporate, government agency and mortgage-backed bonds. RJ&A carries inventory positions of taxable and tax-exempt securities in both the primary and secondary markets to facilitate institutional sales activities. In addition to St. Petersburg, the Fixed Income Department maintains institutional sales and trading offices in New York City, Chicago and 20 other cities throughout the U. S. Trading Trading equity securities involves the purchase and sale of securities from/to our clients or other dealers. Profits and losses are derived from the spreads between bid and asked prices, as well as market trends for the individual securities during the period we hold them. RJ&A makes markets in approximately 680 common stocks. Similar to the equity research department, this operation serves to support both our Institutional and Private Client Group sales efforts. The RJ Ltd. Institutional and Private Client Group trading desks not only support client activity, but also take proprietary positions. RJ Ltd. also provides specialist services in approximately 160 TSX listed common stocks. RJ&A trades both taxable and tax-exempt fixed income products. The taxable and tax-exempt RJ&A fixed income traders purchase and sell corporate, municipal, government, government agency, and mortgage-backed bonds, asset backed securities, preferred stock and certificates of deposit from/to our clients or other dealers. RJ&A enters into future commitments such as forward contracts and “to be announced” securities (e. g. securities having a stated coupon and original term to maturity, although the issuer and/or the specific pool of mortgage loans is not known at the time of the transaction). Low levels of proprietary trading positions are also periodically taken by RJ&A for various purposes and are closely monitored within well defined limits. In addition, a subsidiary of RJF, RJ Capital Services Inc. , participates in the interest rate swaps market as a principal, both for economically hedging RJ&A fixed income inventory and for transactions with customers. Equity Research The domestic senior analysts in RJ&A's research department support our institutional and retail sales efforts and publish research on approximately 725 companies. This research primarily focuses on U. S. companies in specific industries including technology, telecommunications, consumer, financial services, business and industrial services, healthcare, real estate and energy. Proprietary industry studies and company-specific research reports are made available to both institutional and individual clients. RJ Ltd. has an additional 16 analysts who publish research on approximately 200 companies focused in the energy, energy services, mining, forest products, biotechnology, technology, clean technology, consumer and industrial products, REIT and income trust sectors. These analysts, combined with 12 additional analysts located in France (whose services are obtained through a joint venture there), represent our global research effort within the Capital Markets segment. The following table shows the distribution of those RJ Bank loans that mature in more than one year between fixed and adjustable interest rate loans at September 30, 2009: |
9.33333 | What's the average of Curtailments and Settlements and Special termination benefits in 2010? (in million) | Unconditional Purchase Obligations Approximately $390 of our long-term unconditional purchase obligations relate to feedstock supply for numerous HyCO (hydrogen, carbon monoxide, and syngas) facilities. The price of feedstock supply is principally related to the price of natural gas. However, long-term take-or-pay sales contracts to HyCO customers are generally matched to the term of the feedstock supply obligations and provide recovery of price increases in the feedstock supply. Due to the matching of most long-term feedstock supply obligations to customer sales contracts, we do not believe these purchase obligations would have a material effect on our financial condition or results of operations. Refer to Note 17, Commitments and Contingencies, to the consolidated financial statements for additional information on our unconditional purchase obligations. The unconditional purchase obligations also include other product supply and purchase commitments and electric power and natural gas supply purchase obligations, which are primarily pass-through contracts with our customers. In addition, purchase commitments to spend approximately $540 for additional plant and equipment are included in the unconditional purchase obligations in 2016. We also purchase materials, energy, capital equipment, supplies, and services as part of the ordinary course of business under arrangements that are not unconditional purchase obligations. The majority of such purchases are for raw materials and energy, which are obtained under requirements-type contracts at market prices. Obligation for Future Contribution to an Equity Affiliate On 19 April 2015, a joint venture between Air Products and ACWA Holding entered into a 20-year oxygen and nitrogen supply agreement to supply Saudi Aramco’s oil refinery and power plant being built in Jazan, Saudi Arabia. Air Products owns 25% of the joint venture and guarantees the repayment of its share of an equity bridge loan. In total, we expect to invest approximately $100 in this joint venture. As of 30 September 2015, we recorded a noncurrent liability of $67.5 for our obligation to make future equity contributions based on advances received by the joint venture under the loan. Income Tax Liabilities Noncurrent deferred income tax liabilities as of 30 September 2015 were $903.3. Tax liabilities related to unrecognized tax benefits as of 30 September 2015 were $97.5. These tax liabilities were excluded from the Contractual Obligations table, as it is impractical to determine a cash impact by year given that payments will vary according to changes in tax laws, tax rates, and our operating results. In addition, there are uncertainties in timing of the effective settlement of our uncertain tax positions with respective taxing authorities. Refer to Note 23, Income Taxes, to the consolidated financial statements for additional information. PENSION BENEFITS The Company sponsors defined benefit pension plans and defined contribution plans that cover a substantial portion of its worldwide employees. The principal defined benefit pension plans—the U. S. salaried pension plan and the U. K. pension plan—were closed to new participants in 2005 and were replaced with defined contribution plans. Over the long run, the shift to defined contribution plans is expected to reduce volatility of both plan expense and contributions. The fair market value of plan assets for our defined benefit pension plans as of the 30 September 2015 measurement date decreased to $3,916.4 from $4,114.6 at the end of fiscal year 2014. The projected benefit obligation for these plans was $4,787.8 and $4,738.6 at the end of the fiscal years 2015 and 2014, respectively. Refer to Note 16, Retirement Benefits, to the consolidated financial statements for comprehensive and detailed disclosures on our postretirement benefits. Pension Expense
<table><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Pension expense</td><td>$135.6</td><td>$135.9</td><td>$169.7</td></tr><tr><td>Special terminations, settlements, and curtailments (included above)</td><td>35.2</td><td>5.8</td><td>19.8</td></tr><tr><td>Weighted average discount rate</td><td>4.0%</td><td>4.6%</td><td>4.0%</td></tr><tr><td>Weighted average expected rate of return on plan assets</td><td>7.4%</td><td>7.7%</td><td>7.7%</td></tr><tr><td>Weighted average expected rate of compensation increase</td><td>3.5%</td><td>3.9%</td><td>3.8%</td></tr></table>
2010 Annual Report 83 During 2008, $254 million aggregate principal value of debt was repurchased and $241 million notional amount of interest rate swaps related to the debt repurchases was terminated. The following table summarizes the activity:
<table><tr><td> Dollars in Millions</td><td> Principal Value</td><td> Repurchase Price</td><td> Gain on Repurchase</td><td> Swap Termination Proceeds</td><td>Other, Including Basis Adjustment for Terminated Swaps</td><td> Gain/ (Loss)</td></tr><tr><td>5.875% Notes due 2036</td><td>$227</td><td>$201</td><td>$26</td><td>$32</td><td>$-3</td><td>$55</td></tr><tr><td>6.88% Debentures due 2097</td><td>13</td><td>13</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>7.15% Debentures due 2023</td><td>11</td><td>11</td><td>—</td><td>2</td><td>—</td><td>2</td></tr><tr><td>5.25% Notes due 2013</td><td>3</td><td>3</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total</td><td>$254</td><td>$228</td><td>$26</td><td>$34</td><td>$-3</td><td>$57</td></tr></table>
For further discussion of interest rate swaps see Note 24 “Financial Instruments. ” Interest payments, net of amounts related to interest rate swaps, were $178 million in 2010, $206 million in 2009 and $303 million in 2008. The principal value of long-term debt obligations was $4,749 million at December 31, 2010 of which $597 million is due in 2013, and the remaining $4,152 million is due later than 2013. The fair value of long-term debt was $5,861 million and $6,258 million at December 31, 2010 and 2009, respectively, and was estimated based upon the quoted market prices for the same or similar debt instruments. The fair value of short-term borrowings approximates the carrying value due to the short maturities of the debt instruments. A $2.0 billion five year revolving credit facility from a syndicate of lenders maturing in December 2011 is maintained. The facility is extendable with the consent of the lenders and contains customary terms and conditions, including a financial covenant whereby the ratio of consolidated net debt to consolidated capital cannot exceed 50% at the end of each quarter. The Company has been in compliance with this covenant since the inception of the facility. There were no borrowings outstanding under the facility at December 31, 2010 and 2009. At December 31, 2010, $178 million of financial guarantees were provided in the form of stand-by letters of credit and performance bonds. The stand-by letters of credit are with insurance companies in support of third-party liability programs. The performance bonds were issued to support a range of ongoing operating activities, including sale of products to hospitals and foreign ministries of health, bonds for customs, duties and value added tax and guarantees related to miscellaneous legal actions. A significant majority of the outstanding financial guarantees will expire within the year and are not expected to be funded. Note 24 FINANCIAL INSTRUMENTS Financial instruments include cash and cash equivalents, marketable securities, receivables, accounts payable, debt instruments and derivatives. Due to their short term maturity, the carrying amount of receivables and accounts payable approximate fair value. There is exposure to market risk due to changes in currency exchange rates and interest rates. As a result, certain derivative financial instruments are used when available on a cost-effective basis to hedge the underlying economic exposure. These instruments qualify as cash flow, net investment and fair value hedges upon meeting certain criteria, including effectiveness of offsetting hedged exposures. Changes in fair value of derivatives that do not qualify for hedge accounting are recognized in earnings as they occur. All financial instruments, including derivatives, are subject to counterparty credit risk which is considered as part of the overall fair value measurement. Derivative financial instruments are not used for trading purposes. Foreign currency forward contracts are used to manage cash flow exposures. The primary net foreign currency exposures hedged are the Euro, Japanese yen, Canadian dollar, British pound, Australian dollar and Mexican peso. Fixed-to-floating interest rate swaps are used as part of the interest rate risk management strategy. These swaps qualify for fair-value hedge accounting treatment. Certain net asset changes due to foreign exchange volatility are hedged through non-U. S. dollar borrowings which qualify as a net investment hedge. Derivative financial instruments present certain market and counterparty risks; however, concentration of counterparty risk is mitigated by limiting amounts with any individual counterparty and using banks worldwide with Standard & Poor's and Moody's long-term debt ratings of A or higher. In addition, only conventional derivative financial instruments are utilized. The consolidated financial statements would not be materially impacted if any counterparties failed to perform according to the terms of its agreement. Currently, collateral or any other form of securitization is not required to be furnished by the counterparties to derivative financial instruments. 2010 Annual Report 27 We continue to maximize our operating cash flows with our working capital initiatives designed to improve working capital items that are most directly affected by changes in sales volume, such as receivables, inventories and accounts payable. Those improvements are being driven by several actions including non-recourse factoring of non-US trade receivables, revised contractual payment terms with customers and vendors, enhanced collection processes and various supply chain initiatives designed to optimize inventory levels. Progress in this area is monitored each period and is a component of our annual incentive plan. The following summarizes certain working capital components expressed as a percentage of trailing twelve months’ net sales.
<table><tr><td> Dollars in Millions</td><td>December 31, 2010</td><td>% of Trailing Twelve Month Net Sales</td><td>December 31, 2009</td><td>% of Trailing Twelve Month Net Sales</td></tr><tr><td>Net trade receivables</td><td>$1,985</td><td>10.2%</td><td>$1,897</td><td>10.1%</td></tr><tr><td>Inventories</td><td>1,204</td><td>6.2%</td><td>1,413</td><td>7.5%</td></tr><tr><td>Accounts payable</td><td>-1,983</td><td>-10.2%</td><td>-1,711</td><td>-9.1%</td></tr><tr><td>Total</td><td>$1,206</td><td>6.2%</td><td>$1,599</td><td>8.5%</td></tr></table>
During 2010, changes in operating assets and liabilities aggregated to a net cash outflow of $166 million including: ? Cash outflows from receivables ($270 million) which are primarily attributed to increased sales; ? Cash outflows from other operating assets and liabilities ($248 million) primarily related to pension funding in excess of current year expense ($370 million), partially offset by increased rebate and sales returns ($238 million) primarily due to the increase in Medicaid rebates which was effective January 1, 2010 and agencies’ administrative delays in payments to managed care organizations; ? Cash inflows from accounts payables ($315 million) which are primarily attributed to the timing of vendor and alliance payments; and ? Cash inflows from inventories ($156 million) primarily related to the work down of inventory balances. In 2009, changes in operating assets and liabilities aggregated to a net cash inflow of $42 million including: ? Cash inflows from accounts payable ($472 million) primarily attributed to the timing of payments to vendors and alliances, as well as the impact of the working capital initiative discussed above; ? Cash inflows from receivables ($227 million) primarily attributed to additional factoring of non-U. S. trade receivables in Japan and Spain; ? Cash inflows from deferred income ($135 million) mainly due to the milestone payments received from Pfizer ($150 million) and AstraZeneca ($150 million), partially offset by amortization; and ? Cash outflows from other operating assets and liabilities ($932 million) primarily related to pension funding in excess of current year expense ($532 million), and a payment to Otsuka which is amortized as a reduction of net sales through the extension period ($400 million). In 2008, changes in operating assets aggregated to a net cash inflow of $117 million including: ? Cash inflows from income tax payable/receivable ($371 million) which includes the impact of the receipt of a $432 million tax refund, including interest, related to a prior year foreign tax credit carryback claim; ? Cash inflows from accounts payables ($253 million) which are primarily attributed to the timing of vendor and alliance payments; ? Cash inflows from inventory ($130 million) which is primarily attributed to the utilization of inventories which were built up in the prior year for new product launches and strategic builds for existing products launches including for new indications of Abilify; ? Cash inflows from deferred income ($61 million) which are primarily due to receipt of upfront licensing and milestone payments from alliance partners; ? Cash outflows from accounts receivables ($360 million) which are attributed to increased sales; and ? Cash outflows from other operating assets and liabilities ($338 million) which are primarily due to net litigation related payments ($190 million) attributed to the settlement of certain pricing and sales litigation accrued in prior periods; pension funding in excess of current year expense ($120 million); and increase in non-current inventory ($112 million). Investing Activities Net cash used in investing activities was $3.8 billion in 2010 including: ? Net purchases of marketable securities ($2.6 billion); ? Purchase of ZymoGenetics, Inc. ($829 million); and ? Capital expenditures ($424 million) Bristol-Myers Squibb 72 In May 2010, the Board of Directors authorized the repurchase of up to $3.0 billion of common stock. Repurchases may be made either in the open market or through private transactions, including under repurchase plans established in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The stock repurchase program does not have an expiration date but is expected to take place over the next few years. It may be suspended or discontinued at any time. During 2010, the Company repurchased 23 million shares at the average price of approximately $25.50 per share for an aggregate cost of $587 million which includes $1 million of transaction fees. Note 21 PENSION, POSTRETIREMENT AND POSTEMPLOYMENT LIABILITIES The Company and certain of its subsidiaries sponsor defined benefit pension plans, defined contribution plans and termination indemnity plans for regular full-time employees. The principal defined benefit pension plan is the Bristol-Myers Squibb Retirement Income Plan, which covers most U. S. employees and which represents approximately 70% of the consolidated pension plan assets and obligations. The funding policy is to contribute amounts to fund past service liability . Plan benefits are based primarily on the participant’s years of credited service and final average compensation. Plan assets consist principally of equity and fixed-income securities. Comprehensive medical and group life benefits are provided for substantially all U. S. retirees who elect to participate in comprehensive medical and group life plans. The medical plan is contributory. Contributions are adjusted periodically and vary by date of retirement. The life insurance plan is noncontributory. Plan assets consist principally of equity and fixed-income securities. Similar plans exist for employees in certain countries outside of the U. S. The net periodic benefit cost of defined benefit pension and postretirement benefit plans includes:
<table><tr><td></td><td colspan="3">Pension Benefits</td><td colspan="3">Other Benefits</td></tr><tr><td> Dollars in Millions</td><td>2010</td><td>2009</td><td>2008</td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Service cost — benefits earned during the year</td><td>$44</td><td>$178</td><td>$227</td><td>$6</td><td>$6</td><td>$7</td></tr><tr><td>Interest cost on projected benefit obligation</td><td>347</td><td>381</td><td>389</td><td>30</td><td>37</td><td>38</td></tr><tr><td>Expected return on plan assets</td><td>-453</td><td>-453</td><td>-469</td><td>-24</td><td>-19</td><td>-28</td></tr><tr><td>Amortization of prior service cost/(benefit)</td><td>—</td><td>4</td><td>10</td><td>-3</td><td>-3</td><td>-3</td></tr><tr><td>Amortization of net actuarial loss</td><td>95</td><td>94</td><td>98</td><td>10</td><td>10</td><td>5</td></tr><tr><td>Net periodic benefit cost</td><td>33</td><td>204</td><td>255</td><td>19</td><td>31</td><td>19</td></tr><tr><td>Curtailments</td><td>5</td><td>24</td><td>1</td><td>—</td><td>—</td><td>-2</td></tr><tr><td>Settlements</td><td>22</td><td>29</td><td>36</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Special termination benefits</td><td>1</td><td>—</td><td>14</td><td>—</td><td>—</td><td>2</td></tr><tr><td>Total net periodic benefit cost</td><td>$61</td><td>$257</td><td>$306</td><td>$19</td><td>$31</td><td>$19</td></tr><tr><td>Continuing operations</td><td>$61</td><td>$242</td><td>$256</td><td>$19</td><td>$28</td><td>$17</td></tr><tr><td>Discontinued operations</td><td>—</td><td>15</td><td>50</td><td>—</td><td>3</td><td>2</td></tr><tr><td>Total net periodic benefit cost</td><td>$61</td><td>$257</td><td>$306</td><td>$19</td><td>$31</td><td>$19</td></tr></table>
The U. S. Retirement Income Plan and several other plans were amended during June 2009. The amendments eliminate the crediting of future benefits relating to service effective December 31, 2009. Salary increases will continue to be considered for an additional five-year period in determining the benefit obligation related to prior service. The plan amendments were accounted for as a curtailment. As a result, the applicable plan assets and obligations were remeasured. The remeasurement resulted in a $455 million reduction to accumulated OCI ($295 million net of taxes) and a corresponding decrease to the unfunded status of the plan due to the curtailment, updated plan asset valuations and a change in the discount rate from 7.0% to 7.5%. A curtailment charge of $25 million was also recognized in other (income)/expense during the second quarter of 2009 for the remaining amount of unrecognized prior service cost. In addition, all participants were reclassified as inactive for benefit plan purposes and actuarial gains and losses will be amortized over the expected weighted-average remaining lives of plan participants (32 years). In connection with the plan amendment, contributions to principal defined contribution plans in the U. S. and Puerto Rico increased effective January 1, 2010. The net impact of the above actions is expected to reduce the future retiree benefit costs, although future costs will continue to be subject to market conditions and other factors including actual and expected plan asset performance, interest rate fluctuations and lump-sum benefit payments. In 2009, certain plan assets and related obligations were transferred from the U. S. Retirement Income Plan and several other plans to new plans sponsored by Mead Johnson for active Mead Johnson participants resulting in a $170 million reduction to accumulated OCI ($110 million net of taxes) in the first quarter of 2009 and a corresponding decrease to the unfunded status of the plan due to updated plan asset valuations and a change in the discount rate from 6.5% to 7.0%. |
603 | What was the total amount of assets for Assumed in 2014? (in million) | environmental regulations, and the continuing advancement of remediation technology. Taking these factors into account, Eaton has estimated the costs of remediation, which will be incurred over a period of years. The Company accrues an amount on an undiscounted basis, consistent with the estimates of these costs, when it is probable that a liability has been incurred. At December 31, 2012 and 2011, $125 and $62 was accrued for these costs. Based upon Eaton's analysis and subject to the difficulty in estimating these future costs, the Company expects that any sum it may be required to pay in connection with environmental matters is not reasonably possible to exceed the recorded liability by an amount that would have a material effect on its financial position, results of operations or cash flows. Market Risk Disclosure On a regular basis, Eaton monitors third-party depository institutions that hold its cash and short-term investments, primarily for safety of principal and secondarily for maximizing yield on those funds. The Company diversifies its cash and shortterm investments among counterparties to minimize exposure to any one of these entities. Eaton also monitors the creditworthiness of its customers and suppliers to mitigate any adverse impact. Eaton uses derivative instruments to manage exposure to volatility in raw material costs, currency and interest rates on certain debt instruments. Derivative financial instruments used by the Company are straightforward and non-leveraged. The counterparties to these instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. See Note 12 to the Consolidated Financial Statements for additional information about hedges and derivative financial instruments. Eaton’s ability to access the commercial paper market, and the related cost of these borrowings, is based on the strength of its credit rating and overall market conditions. The Company has not experienced any material limitations in its ability to access these sources of liquidity. At December 31, 2012, Eaton had $2,000 of longterm revolving credit facilities with banks in support of its commercial paper program. It has no direct borrowings outstanding under these credit facilities. Eaton’s non-United States operations also had available short-term lines of credit of approximately $2,099 at December 31, 2012. Interest rate risk can be measured by calculating the short-term earnings impact that would result from adverse changes in interest rates. This exposure results from short-term debt, which includes commercial paper at a floating interest rate, longterm debt that has been swapped to floating rates, and money market investments that have not been swapped to fixed rates. Based upon the balances of investments and floating rate debt at year end 2012, a 100 basis-point increase in short-term interest rates would have increased the Company’s net, pretax interest expense by $15. Eaton also measures interest rate risk by estimating the net amount by which the fair value of the Company’s financial liabilities would change as a result of movements in interest rates. Based on Eaton’s best estimate for a hypothetical, 100 basis point decrease in interest rates at December 31, 2012, the market value of the Company’s debt and interest rate swap portfolio, in aggregate, would increase by $779. Currency risk is the risk of economic losses due to adverse changes in exchange rates. The Company mitigates currency risk by funding some investments in certain markets through local currency financings. Non-United States dollar debt was $148 at December 31, 2012. To augment Eaton’s non-United States dollar debt portfolio, the Company also enters into forward exchange contracts and currency swaps from time to time to mitigate the risk of economic loss in its investments. At December 31, 2012, the aggregate balance of such contracts was $599. Eaton also monitors exposure to transactions denominated in currencies other than the functional currency of each country in which the Company operates, and regularly enters into forward contracts to mitigate that exposure. In the aggregate, Eaton’s portfolio of forward contracts related to such transactions was not material to its Consolidated Financial Statements. Contractual Obligations A summary of contractual obligations as of December 31, 2012 follows:
<table><tr><td></td><td>2013</td><td>2014to2015</td><td>2016to2017</td><td>After2017</td><td>Total</td></tr><tr><td>Long-term debt<sup>-1</sup></td><td>$314</td><td>$1,576</td><td>$1,812</td><td>$6,084</td><td>$9,786</td></tr><tr><td>Interest expense related to long-term debt</td><td>371</td><td>683</td><td>607</td><td>2,653</td><td>4,314</td></tr><tr><td>Reduction of interest expense from interest rate swapagreements related to long-term debt</td><td>-34</td><td>-54</td><td>-35</td><td>-69</td><td>-192</td></tr><tr><td>Operating leases</td><td>174</td><td>238</td><td>132</td><td>85</td><td>629</td></tr><tr><td>Purchase obligations</td><td>849</td><td>95</td><td>78</td><td>86</td><td>1,108</td></tr><tr><td>Other long-term obligations</td><td>309</td><td>12</td><td>13</td><td>74</td><td>408</td></tr><tr><td>Total</td><td>$1,983</td><td>$2,550</td><td>$2,607</td><td>$8,913</td><td>$16,053</td></tr></table>
(1) Long-term debt excludes deferred gains and losses on derivatives related to debt, adjustments to fair market value, and premiums and discounts on long-term debentures. Interest expense related to long-term debt is based on the fixed interest rate, or other applicable interest rate, related to the debt instrument. The reduction of interest expense due to interest rate swap agreements related to long-term debt is based on the difference in the fixed interest rate the Company receives from the swap, compared to the floating interest rate the Company pays on the swap. Purchase obligations are entered into with various vendors in the normal course of business. These amounts include commitments for purchases of raw materials, outstanding non-cancelable purchase orders, releases under blanket purchase orders and commitments under ongoing service arrangements. Other long-term obligations principally include anticipated contributions of $303 to pension plans in 2013 and $101 of deferred compensation earned under various plans for which the participants have elected to receive disbursement at a later date. The table above does not include future expected pension benefit payments or expected other postretirement benefits payments. Information related to the amounts of these future payments is described in Note 6 to the Consolidated Financial Statements. The table above also excludes the liability for unrecognized income tax benefits, since the Company cannot predict with reasonable certainty the timing of cash settlements with the respective taxing authorities. At December 31, 2012, the gross liability for unrecognized income tax benefits totaled $280 and interest and penalties were $34. Forward-Looking Statements This Annual Report to Shareholders contains forward-looking statements concerning Eaton's full year 2013 sales, the performance in 2013 of its worldwide end markets, and Eaton's 2013 growth in relation to end markets, among other matters. These statements may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to Eaton, based on current beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside Eaton’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: unanticipated changes in the markets for the Company’s business segments; unanticipated downturns in business relationships with customers or their purchases from us; the availability of credit to customers and suppliers; competitive pressures on sales and pricing; increases in the cost of material and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest; the impact of acquisitions and divestitures; unanticipated difficulties integrating acquisitions; new laws and governmental regulations; interest rate changes; tax rate changes or exposure to additional income tax liability; stock market and currency fluctuations; and unanticipated deterioration of economic and financial conditions in the United States and around the world. Eaton does not assume any obligation to update these forward-looking statements. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations – CNA Financial – (Continued) Net income increased $246 million in 2006 as compared with 2005. This increase was attributable to increases in net operating income and net realized investment gains. See the Investments section of this MD&A for further discussion of net investment income and net realized investment results. Net operating income increased $225 million in 2006 as compared with 2005. This improvement was primarily driven by an increase in net investment income, a decrease in net prior year development as discussed below and reduced catastrophe impacts in 2006. Catastrophe impacts were $1 million after tax and minority interest for the year ended December 31, 2006, as compared to $15 million after tax and minority interest for the year ended December 31, 2005. The 2005 results also included a $54 million loss, after taxes and minority interest, in the surety line of business related to a large national contractor. Further information related to the large national contractor is included in Note 22 of the Notes to Consolidated Financial Statements included under Item 8. The combined ratio improved 7.9 points in 2006 as compared with 2005. The loss ratio improved 7.9 points, due to decreased net prior year development as discussed below and improved current accident year impacts. The 2005 loss ratio was unfavorably impacted by surety losses of $110 million, before taxes and minority interest, related to a national contractor as discussed above. Partially offsetting this favorable impact was less favorable current accident year loss ratios across several other lines of business in 2006. Favorable net prior year development of $66 million was recorded in 2006, including $61 million of favorable claim and allocated claim adjustment expense reserve development and $5 million of favorable premium development. Unfavorable net prior year development of $103 million, including $173 million of unfavorable claim and allocated claim adjustment expense reserve development and $70 million of favorable premium development, was recorded in 2005. Further information on Specialty Lines Net Prior Year Development for 2006 and 2005 is included in Note 9 of the Notes to Consolidated Financial Statements included under Item 8. Life & Group Non-Core The following table summarizes the results of operations for Life & Group Non-Core.
<table><tr><td>Year Ended December 31</td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td>(In millions)</td><td></td><td></td><td></td></tr><tr><td>Net earned premiums</td><td>$618</td><td>$641</td><td>$704</td></tr><tr><td>Net investment income</td><td>622</td><td>698</td><td>593</td></tr><tr><td>Net operating loss</td><td>-141</td><td>-13</td><td>-46</td></tr><tr><td>Net realized investment losses</td><td>-33</td><td>-30</td><td>-18</td></tr><tr><td>Net loss</td><td>-174</td><td>-43</td><td>-64</td></tr></table>
2007 Compared with 2006 Net earned premiums for Life & Group Non-Core decreased $23 million in 2007 as compared with 2006. The 2007 and 2006 net earned premiums relate primarily to the group and individual long term care businesses. The net loss increased $131 million in 2007 as compared with 2006. The increase in net loss was primarily due to the after tax and minority interest loss of $96 million related to the settlement of the IGI contingency. The IGI contingency related to reinsurance arrangements with respect to personal accident insurance coverages between 1997 and 1999 which were the subject of arbitration proceedings. CNA reached an agreement in 2007 to settle the arbitration matter for a onetime payment of $250 million, which resulted in an incurred loss, net of reinsurance, of $167 million pretax. The decreased net investment income included a decline of net investment income in the trading portfolio of $82 million, a significant portion of which was offset by a corresponding decrease in the policyholders’ funds reserves supported by the trading portfolio. The trading portfolio supports our pension deposit business, which experienced a decline in net results of $29 million in 2007 compared to 2006. See the Investments section of this MD&A for further discussion of net investment income and net realized investment results. MetLife, Inc. Notes to the Consolidated Financial Statements — (Continued) 6. Reinsurance (continued) The amounts in the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows at:
<table><tr><td></td><td colspan="8">December 31,</td></tr><tr><td></td><td colspan="4">2014</td><td colspan="4">2013</td></tr><tr><td></td><td>Direct</td><td>Assumed</td><td>Ceded</td><td>TotalBalanceSheet</td><td>Direct</td><td>Assumed</td><td>Ceded</td><td>TotalBalanceSheet</td></tr><tr><td></td><td colspan="8">(In millions)</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>Premiums, reinsurance and other receivables</td><td>$6,111</td><td>$491</td><td>$15,642</td><td>$22,244</td><td>$6,248</td><td>$593</td><td>$15,018</td><td>$21,859</td></tr><tr><td>Deferred policy acquisition costs and value of business acquired</td><td>24,807</td><td>112</td><td>-477</td><td>24,442</td><td>26,954</td><td>104</td><td>-352</td><td>26,706</td></tr><tr><td>Total assets</td><td>$30,918</td><td>$603</td><td>$15,165</td><td>$46,686</td><td>$33,202</td><td>$697</td><td>$14,666</td><td>$48,565</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>Future policy benefits</td><td>$187,562</td><td>$2,024</td><td>$—</td><td>$189,586</td><td>$185,908</td><td>$2,034</td><td>$—</td><td>$187,942</td></tr><tr><td>Policyholder account balances</td><td>208,307</td><td>989</td><td>-2</td><td>209,294</td><td>211,610</td><td>1,277</td><td>-2</td><td>212,885</td></tr><tr><td>Other policy-related balances</td><td>14,131</td><td>285</td><td>6</td><td>14,422</td><td>14,838</td><td>353</td><td>23</td><td>15,214</td></tr><tr><td>Other liabilities</td><td>20,752</td><td>481</td><td>3,204</td><td>24,437</td><td>19,591</td><td>533</td><td>3,044</td><td>23,168</td></tr><tr><td>Total liabilities</td><td>$430,752</td><td>$3,779</td><td>$3,208</td><td>$437,739</td><td>$431,947</td><td>$4,197</td><td>$3,065</td><td>$439,209</td></tr></table>
Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $2.3 billion at both December 31, 2014 and 2013. The deposit liabilities on reinsurance were $35 million and $37 million at December 31, 2014 and 2013, respectively.7. Closed Block On April 7, 2000 (the “Demutualization Date”), MLIC converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving MLIC’s plan of reorganization, as amended (the “Plan of Reorganization”). On the Demutualization Date, MLIC established a closed block for the benefit of holders of certain individual life insurance policies of MLIC. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience. The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years. The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the Demutualization Date (adjusted to eliminate the impact of related amounts in AOCI) represents the estimated maximum future earnings from the closed block expected to result from operations attributed to the closed block after income taxes. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain in-force. Management believes that over time the actual cumulative earnings of the closed block will approximately equal the expected cumulative earnings due to the effect of dividend changes. If, over the period the closed block remains in Mondavi produces, markets and sells premium, super-premium and fine California wines under the Woodbridge by Robert Mondavi, Robert Mondavi Private Selection and Robert Mondavi Winery brand names. Woodbridge and Robert Mondavi Private Selection are the leading premium and super-premium wine brands by volume, respectively, in the United States. The acquisition of Robert Mondavi supports the Company’s strategy of strengthening the breadth of its portfolio across price segments to capitalize on the overall growth in the premium, super-premium and fine wine categories. The Company believes that the acquired Robert Mondavi brand names have strong brand recognition globally. The vast majority of Robert Mondavi’s sales are generated in the United States. The Company intends to leverage the Robert Mondavi brands in the United States through its selling, marketing and distribution infrastructure. The Company also intends to further expand distribution for the Robert Mondavi brands in Europe through its Constellation Europe infrastructure. The Company and Robert Mondavi have complementary businesses that share a common growth orientation and operating philosophy. The Robert Mondavi acquisition provides the Company with a greater presence in the fine wine sector within the United States and the ability to capitalize on the broader geographic distribution in strategic international markets. The Robert Mondavi acquisition supports the Company’s strategy of growth and breadth across categories and geographies, and strengthens its competitive position in its core markets. In particular, the Company believes there are growth opportunities for premium, super-premium and fine wines in the United Kingdom, United States and other wine markets. Total consideration paid in cash to the Robert Mondavi shareholders was $1,030.7 million. Additionally, the Company expects to incur direct acquisition costs of $11.2 million. The purchase price was financed with borrowings under the Company’s 2004 Credit Agreement (as defined in Note 9). In accordance with the purchase method of accounting, the acquired net assets are recorded at fair value at the date of acquisition. The purchase price was based primarily on the estimated future operating results of Robert Mondavi, including the factors described above, as well as an estimated benefit from operating cost synergies. The results of operations of the Robert Mondavi business are reported in the Constellation Wines segment and have been included in the Consolidated Statement of Income since the acquisition date. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the Robert Mondavi acquisition at the date of acquisition. The Company is in the process of obtaining third-party valuations of certain assets and liabilities, and refining its restructuring plan which is under development and will be finalized during the Company’s year ending February 28, 2006 (see Note19). Accordingly, the allocation of the purchase price is subject to refinement. Estimated fair values at December 22, 2004, are as follows: |
1.36082 | what was the ratio of the floating rate notes included in the long-term debt payments for 2013 to 2014 | 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 |
10.27 | what is the annual amortization expense related to customer relationships , in millions? | AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U. S. Acquisitions—During the year ended December 31, 2010, the Company acquired 548 towers through multiple acquisitions in the United States for an aggregate purchase price of $329.3 million and contingent consideration of approximately $4.6 million. The acquisition of these towers is consistent with the Company’s strategy to expand in selected geographic areas and have been accounted for as business combinations. The following table summarizes the preliminary allocation of the aggregate purchase consideration paid and the amounts of assets acquired and liabilities assumed based on the estimated fair value of the acquired assets and assumed liabilities at the date of acquisition (in thousands):
<table><tr><td></td><td>Purchase Price Allocation</td></tr><tr><td>Non-current assets</td><td>$442</td></tr><tr><td>Property and equipment</td><td>64,564</td></tr><tr><td>Intangible assets -1</td><td>260,898</td></tr><tr><td>Current liabilities</td><td>-360</td></tr><tr><td>Long-term liabilities</td><td>-7,802</td></tr><tr><td>Fair value of net assets acquired</td><td>$317,742</td></tr><tr><td>Goodwill -2</td><td>16,131</td></tr></table>
(1) Consists of customer relationships of approximately $205.4 million and network location intangibles of approximately $55.5 million. The customer relationships and network location intangibles are being amortized on a straight-line basis over a period of 20 years. (2) Goodwill is expected to be deductible for income tax purposes. The goodwill was allocated to the domestic rental and management segment. The allocation of the purchase price will be finalized upon completion of analyses of the fair value of the assets acquired and liabilities assumed. South Africa Acquisition—On November 4, 2010, the Company entered into a definitive agreement with Cell C (Pty) Limited to purchase up to approximately 1,400 existing towers, and up to 1,800 additional towers that either are under construction or will be constructed, for an aggregate purchase price of up to approximately $430 million. The Company anticipates closing the purchase of up to 1,400 existing towers during 2011, subject to customary closing conditions. Other Transactions Coltel Transaction—On September 3, 2010, the Company entered into a definitive agreement to purchase the exclusive use rights for towers in Colombia from Colombia Telecomunicaciones S. A. E. S. P. (“Coltel”) until 2023, when ownership of the towers will transfer to the Company at no additional cost. Pursuant to that agreement, the Company completed the purchase of exclusive use rights for 508 towers for an aggregate purchase price of $86.8 million during the year ended December 31, 2010. The Company expects to complete the purchase of the exclusive use rights for an additional 180 towers by the end of 2011, subject to customary closing conditions. The transaction has been accounted for as a capital lease, with the aggregated purchase price being allocated to property and equipment and non-current assets. Joint Venture with MTN Group—On December 6, 2010, the Company entered into a definitive agreement with MTN Group Limited (“MTN Group”) to establish a joint venture in Ghana (“TowerCo Ghana”). TowerCo Ghana, which will be managed by the Company, will be owned by a holding company of which a wholly owned American Tower subsidiary will hold a 51% share and a wholly owned MTN Group subsidiary (“MTN Ghana”) will hold a 49% share. The transaction involves the sale of up to 1,876 of MTN Ghana’s existing sites to D. R. HORTON, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) its homes constructed in these markets and of the warranty claims received in these markets as well as testing of specific homes. Through September 30, 2010, the Company has spent approximately $4.9 million to remediate these homes. While the Company will seek reimbursement for these remediation costs from various sources, it has not recorded a receivable for potential recoveries as of September 30, 2010. The Company is continuing its investigation to determine if there are additional homes with the Chinese Drywall in these markets, which if found, would likely require the Company to further increase its warranty reserve for this matter in the future. The remaining costs accrued to complete this remediation are based on the Company’s estimate of remaining repair costs. If the actual costs to remediate the homes differ from the estimated costs, the Company may revise its warranty estimate. As of September 30, 2010, the Company has been named as a defendant in several lawsuits in Louisiana and Florida pertaining to Chinese Drywall. As these actions are still in their early stages, the Company is unable to express an opinion as to the amount of damages, if any, beyond what has been reserved for repair as discussed above. Changes in the Company’s warranty liability during fiscal 2010 and 2009 were as follows:
<table><tr><td></td><td colspan="2">September 30,</td></tr><tr><td></td><td>2010</td><td>2009</td></tr><tr><td></td><td colspan="2">(In millions)</td></tr><tr><td>Warranty liability, beginning of year</td><td>$59.6</td><td>$83.4</td></tr><tr><td>Warranties issued</td><td>19.5</td><td>16.8</td></tr><tr><td>Changes in liability for pre-existing warranties</td><td>-5.0</td><td>-16.0</td></tr><tr><td>Settlements made</td><td>-27.9</td><td>-24.6</td></tr><tr><td>Warranty liability, end of year</td><td>$46.2</td><td>$59.6</td></tr></table>
Insurance and Legal Claims The Company has been named as defendant in various claims, complaints and other legal actions including construction defect claims on closed homes and other claims and lawsuits incurred in the ordinary course of business, including employment matters, personal injury claims, land development issues, contract disputes and claims related to its mortgage activities. The Company has established reserves for these contingencies, based on the expected costs of the claims. The Company’s estimates of such reserves are based on the facts and circumstances of individual pending claims and historical data and trends, including costs relative to revenues, home closings and product types, and include estimates of the costs of construction defect claims incurred but not yet reported. These reserve estimates are subject to ongoing revision as the circumstances of individual pending claims and historical data and trends change. Adjustments to estimated reserves are recorded in the accounting period in which the change in estimate occurs. The Company’s liabilities for these items were $571.3 million and $534.0 million at September 30, 2010 and 2009, respectively, and are included in homebuilding accrued expenses and other liabilities in the consolidated balance sheets. Related to the contingencies for construction defect claims and estimates of construction defect claims incurred but not yet reported, and other legal claims and lawsuits incurred in the ordinary course of business, the Company estimates and records insurance receivables for these matters under applicable insurance policies when recovery is probable. Additionally, the Company may have the ability to recover a portion of its legal expenses from its subcontractors when the Company has been named as an additional insured on their insurance policies. Estimates of the Company’s insurance receivables related to these matters totaled $251.5 million and $234.6 million at September 30, 2010 and 2009, respectively, and are included in homebuilding other assets in the consolidated balance sheets. Expenses related to these items were approximately $43.2 million, $58.3 million and $53.8 million in fiscal 2010, 2009 and 2008, respectively. Management believes that, while the outcome of such contingencies cannot be predicted with certainty, the liabilities arising from these matters will not have a material adverse effect on the Company’s consolidated The average price of our net sales orders in 2011 was $214,000, an increase of 3% from the $207,000 average in 2010. The largest percentage increases were in our Southwest and West regions and were primarily due to opening new communities and adjusting our product mix, with higher priced communities representing more of our sales. Our annual sales order cancellation rate was 27% in fiscal 2011, compared to 26% in fiscal 2010. These cancellation rates were above historical levels, reflecting the challenges in most of our homebuilding markets.
<table><tr><td></td><td colspan="9">Sales Order Backlog As of September 30,</td></tr><tr><td></td><td colspan="3">Homes in Backlog</td><td colspan="3">Value (In millions)</td><td colspan="3">Average Selling Price</td></tr><tr><td></td><td>2011</td><td>2010</td><td>%Change</td><td>2011</td><td>2010</td><td>%Change</td><td>2011</td><td>2010</td><td>%Change</td></tr><tr><td>East</td><td>606</td><td>472</td><td>28%</td><td>$147.6</td><td>$103.4</td><td>43%</td><td>$243,600</td><td>$219,100</td><td>11%</td></tr><tr><td>Midwest</td><td>288</td><td>247</td><td>17%</td><td>80.6</td><td>70.1</td><td>15%</td><td>279,900</td><td>283,800</td><td>-1%</td></tr><tr><td>Southeast</td><td>1,285</td><td>812</td><td>58%</td><td>246.9</td><td>162.5</td><td>52%</td><td>192,100</td><td>200,100</td><td>-4%</td></tr><tr><td>South Central</td><td>1,710</td><td>1,691</td><td>1%</td><td>309.5</td><td>297.3</td><td>4%</td><td>181,000</td><td>175,800</td><td>3%</td></tr><tr><td>Southwest</td><td>426</td><td>405</td><td>5%</td><td>76.6</td><td>71.9</td><td>7%</td><td>179,800</td><td>177,500</td><td>1%</td></tr><tr><td>West</td><td>539</td><td>501</td><td>8%</td><td>175.0</td><td>145.6</td><td>20%</td><td>324,700</td><td>290,600</td><td>12%</td></tr><tr><td></td><td>4,854</td><td>4,128</td><td>18%</td><td>$1,036.2</td><td>$850.8</td><td>22%</td><td>$213,500</td><td>$206,100</td><td>4%</td></tr></table>
Sales Order Backlog Our homes in backlog at September 30, 2011 increased 18% from the prior year, with significant increases in our East, Midwest and Southeast regions. The number of homes in backlog in these regions benefited from more active communities and improved third and fourth quarter sales as compared with the same periods of the prior year. Homes Closed and Home Sales Revenue
<table><tr><td></td><td colspan="9">Homes Closed and Home Sales Revenue Fiscal Year Ended September 30,</td></tr><tr><td></td><td colspan="3">Homes Closed</td><td colspan="3">Value (In millions)</td><td colspan="3">Average Selling Price</td></tr><tr><td></td><td>2011</td><td>2010</td><td>%Change</td><td>2011</td><td>2010</td><td>%Change</td><td>2011</td><td>2010</td><td>%Change</td></tr><tr><td>East</td><td>1,932</td><td>2,114</td><td>-9%</td><td>$438.4</td><td>$492.2</td><td>-11%</td><td>$226,900</td><td>$232,800</td><td>-3%</td></tr><tr><td>Midwest</td><td>964</td><td>1,187</td><td>-19%</td><td>261.5</td><td>330.9</td><td>-21%</td><td>271,300</td><td>278,800</td><td>-3%</td></tr><tr><td>Southeast</td><td>3,546</td><td>4,049</td><td>-12%</td><td>691.8</td><td>745.2</td><td>-7%</td><td>195,100</td><td>184,000</td><td>6%</td></tr><tr><td>South Central</td><td>6,150</td><td>8,046</td><td>-24%</td><td>1,080.0</td><td>1,378.8</td><td>-22%</td><td>175,600</td><td>171,400</td><td>2%</td></tr><tr><td>Southwest</td><td>1,263</td><td>1,872</td><td>-33%</td><td>234.8</td><td>329.7</td><td>-29%</td><td>185,900</td><td>176,100</td><td>6%</td></tr><tr><td>West</td><td>2,840</td><td>3,607</td><td>-21%</td><td>835.8</td><td>1,025.5</td><td>-18%</td><td>294,300</td><td>284,300</td><td>4%</td></tr><tr><td></td><td>16,695</td><td>20,875</td><td>-20%</td><td>$3,542.3</td><td>$4,302.3</td><td>-18%</td><td>$212,200</td><td>$206,100</td><td>3%</td></tr></table>
Home Sales Revenue Revenues from home sales decreased 18%, to $3,542.3 million (16,695 homes closed) in 2011 from $4,302.3 million (20,875 homes closed) in 2010. The average selling price of homes closed during 2011 was $212,200, up 3% from the $206,100 average in 2010 which reflected a change in product mix rather than broad price appreciation. During fiscal 2011, home sales revenues decreased in all of our market regions, resulting from decreases in the number of homes closed. The number of homes closed in fiscal 2011 decreased 20% due to decreases in all of our market regions. The federal homebuyer tax credit helped stimulate demand for new homes during fiscal 2010 and following its expiration we experienced a significant decline in demand for our homes that extended into fiscal 2011. D. R. HORTON, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 75 Effective August 1, 2017, the Board of Directors authorized the repurchase of up to $500 million of the Company’s debt securities effective through July 31, 2018. All of the $500 million authorization was remaining at September 30, 2017. Financial Services: The Company’s mortgage subsidiary, DHI Mortgage, has a mortgage repurchase facility that is accounted for as a secured financing. The mortgage repurchase facility provides financing and liquidity to DHI Mortgage by facilitating purchase transactions in which DHI Mortgage transfers eligible loans to the counterparties against the transfer of funds by the counterparties, thereby becoming purchased loans. DHI Mortgage then has the right and obligation to repurchase the purchased loans upon their sale to third-party purchasers in the secondary market or within specified time frames from 45 to 60 days in accordance with the terms of the mortgage repurchase facility. In February 2017, the mortgage repurchase facility was amended to increase its capacity to $600 million and extend its maturity date to February 23, 2018. The capacity of the facility increases, without requiring additional commitments, to $725 million for approximately 30 days at each quarter end and to $800 million for approximately 45 days at fiscal year end. The capacity can also be increased to $1.0 billion subject to the availability of additional commitments. As of September 30, 2017, $540.1 million of mortgage loans held for sale with a collateral value of $520.0 million were pledged under the mortgage repurchase facility. As a result of advance paydowns totaling $100.0 million, DHI Mortgage had an obligation of $420.0 million outstanding under the mortgage repurchase facility at September 30, 2017 at a 3.3% annual interest rate. The mortgage repurchase facility is not guaranteed by D. R. Horton, Inc. or any of the subsidiaries that guarantee the Company’s homebuilding debt. The facility contains financial covenants as to the mortgage subsidiary’s minimum required tangible net worth, its maximum allowable ratio of debt to tangible net worth and its minimum required liquidity. These covenants are measured and reported to the lenders monthly. At September 30, 2017, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facility. In the past, DHI Mortgage has been able to renew or extend its mortgage credit facility at a sufficient capacity and on satisfactory terms prior to its maturity and obtain temporary additional commitments through amendments to the credit facility during periods of higher than normal volumes of mortgages held for sale. The liquidity of the Company’s financial services business depends upon its continued ability to renew and extend the mortgage repurchase facility or to obtain other additional financing in sufficient capacities. NOTE E – CAPITALIZED INTEREST The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the years ended September 30, 2017, 2016 and 2015. |
-0.4644 | what was the percentage cumulative total shareholder return on disca for the five year period ended december 31 , 2018? | PROVISIONS FOR LOSSES Charge card provision for losses decreased $41 million or 6 percent in 2016 compared to 2015, and $55 million or 7 percent in 2015 compared to 2014. The decrease in 2016 was driven by lower net write-offs and improved delinquencies. The decrease in 2015 reflects a reserve release versus a reserve build in 2014, partially offset by higher write-offs. Card Member loans provision for losses increased $45 million or 4 percent in 2016 compared to 2015, and $52 million or 5 percent in 2015 compared to 2014. The increase in 2016 was primarily driven by strong momentum in our lending growth initiatives, resulting in higher loan balances, increased net write-offs in the current year and a slight increase in delinquencies, partially offset by the impact of the HFS portfolios, as the current year does not reflect the associated credit costs, as previously mentioned. The increase in 2015 primarily reflects a reserve build versus a reserve release in 2014. The reserve build in 2015 was due to a small increase in delinquency rates combined with an increase in loan balances, partially offset by lower write-offs and the impact related to transferring the HFS portfolios to Card Member loans and receivables HFS in December 2015. Other provision for losses increased $34 million or 56 percent in 2016 compared to 2015, and decreased $53 million or 46 percent in 2015 compared to 2014. The increase in 2016 was primarily driven by growth in the commercial financing portfolio resulting in higher net write-offs. The decrease in 2015 was primarily due to a merchant-related charge in the fourth quarter of 2014. TABLE 4: EXPENSES SUMMARY
<table><tr><td>Years Ended December 31,</td><td></td><td></td><td></td><td colspan="2" rowspan="2"Change 2016 vs. 2015></td><td colspan="2" rowspan="2"Change 2015 vs. 2014></td></tr><tr><td><i>(Millions, except percentages)</i></td><td> 2016</td><td>2015</td><td>2014</td></tr><tr><td>Marketing and promotion</td><td>$3,650</td><td>$3,109</td><td>$3,216</td><td>$541</td><td>17 %</td><td>$-107</td><td>-3%</td></tr><tr><td>Card Member rewards</td><td>6,793</td><td>6,996</td><td>6,931</td><td>-203</td><td>-3</td><td>65</td><td>1</td></tr><tr><td>Card Member services and other</td><td>1,133</td><td>1,018</td><td>822</td><td>115</td><td>11</td><td>196</td><td>24</td></tr><tr><td>Total marketing, promotion, rewards and Card Member services and other</td><td>11,576</td><td>11,123</td><td>10,969</td><td>453</td><td>4</td><td>154</td><td>1</td></tr><tr><td>Salaries and employee benefits</td><td>5,259</td><td>4,976</td><td>6,095</td><td>283</td><td>6</td><td>-1,119</td><td>-18</td></tr><tr><td>Other, net<sup>(a)</sup></td><td>5,162</td><td>6,793</td><td>6,089</td><td>-1,631</td><td>-24</td><td>704</td><td>12</td></tr><tr><td> Total expenses</td><td>$21,997</td><td>$22,892</td><td>$23,153</td><td>$-895</td><td>-4%</td><td>$-261</td><td>-1%</td></tr></table>
(a) Beginning December 1, 2015 through to the sale completion dates, includes the valuation allowance adjustment associated with the HFS portfolios. EXPENSES Marketing and promotion expenses increased $541 million or 17 percent in 2016 compared to 2015, and decreased $107 million or 3 percent in 2015 compared to 2014 (increasing 1 percent on an FX-adjusted basis), with higher levels of spending on growth initiatives in both periods.2 Card Member rewards expenses decreased $203 million or 3 percent in 2016 compared to 2015 and increased $65 million or 1 percent in 2015 compared to 2014. The decrease in 2016 was primarily driven by lower cobrand rewards expense of $518 million, primarily reflecting lower Costco-related expenses and a shift in volumes to cash rebate cards for which the rewards costs are classified as contra-discount revenue, partially offset by increased spending volumes across other cobrand card products. The lower cobrand rewards expense was partially offset by higher Membership Rewards expense of $315 million, primarily driven by an increase in new points earned as a result of higher spending volumes, recent enhancements to U. S. Consumer and Small Business Platinum rewards and less of a decline in the weighted average cost (WAC) per point. The increase in 2015 was primarily driven by higher cobrand rewards expense of $199 million, driven by rate impacts as a result of cobrand partnership renewal costs, partially offset by a decrease in Membership Rewards expense of $134 million. The latter was primarily driven by slower growth in the Ultimate Redemption Rate (URR) and a decline in the WAC per point assumption, including the impact of the $109 million charge in the fourth quarter of 2014 related to the Delta partnership renewal, partially offset by increased expenses related to new points earned, driven by higher spending volumes. The Membership Rewards URR for current program participants was 95 percent (rounded down) at December 31, 2016, compared to 95 percent (rounded down) at December 31, 2015, and 95 percent (rounded up) at December 31, 2014.2 Refer to footnote 1 on page 41 for details regarding foreign currency adjusted information TABLE 22: UNSECURED DEBT RATINGS
<table><tr><td> Credit Agency</td><td> American Express Entity</td><td> Short-Term Ratings</td><td> Long-Term Ratings</td><td> Outlook</td></tr><tr><td>DBRS</td><td>All rated entities</td><td>R-1 (middle)</td><td>A (high)</td><td>Stable</td></tr><tr><td>Fitch</td><td>All rated entities</td><td>F1</td><td>A</td><td>Negative</td></tr><tr><td>Moody’s</td><td>TRS and rated operating subsidiaries<sup>(a)</sup></td><td>Prime-1</td><td>A2</td><td>Stable</td></tr><tr><td>Moody’s</td><td>American Express Company</td><td>Prime-2</td><td>A3</td><td>Stable</td></tr><tr><td>S&P</td><td>TRS<sup>(a)</sup></td><td>N/A</td><td>A-</td><td>Stable</td></tr><tr><td>S&P</td><td>Other rated operating subsidiaries</td><td>A-2</td><td>A-</td><td>Stable</td></tr><tr><td>S&P</td><td>American Express Company</td><td>A-2</td><td>BBB+</td><td>Stable</td></tr></table>
(a) American Express Travel Related Services Company, Inc. Downgrades in the ratings of our unsecured debt or asset securitization program securities could result in higher funding costs, as well as higher fees related to borrowings under our unused lines of credit. Declines in credit ratings could also reduce our borrowing capacity in the unsecured debt and asset securitization capital markets. We believe our funding mix, including the proportion of U. S. retail deposits insured by the Federal Deposit Insurance Corporation (FDIC), should reduce the impact that credit rating downgrades would have on our funding capacity and costs. SHORT-TERM FUNDING PROGRAMS Short-term borrowings, such as commercial paper, are defined as any debt with an original maturity of twelve months or less, as well as interest-bearing overdrafts with banks. Our short-term funding programs are used primarily to meet working capital needs, such as managing seasonal variations in receivables balances. The amount of short-term borrowings issued in the future will depend on our funding strategy, our needs and market conditions. As of December 31, 2016, we had $3.0 billion in commercial paper outstanding and we had an average of $0.5 billion in commercial paper outstanding during 2016. Refer to Note 9 to the “Consolidated Financial Statements” for a further description of these borrowings. DEPOSIT PROGRAMS We offer deposits within our Centurion Bank and American Express Bank subsidiaries. These funds are currently insured up to $250,000 per account holder through the FDIC. Our ability to obtain deposit funding and offer competitive interest rates is dependent on the capital levels of Centurion Bank and American Express Bank. We, through American Express Bank, have a direct retail deposit program, Personal Savings from American Express, to supplement our distribution of deposit products sourced through third-party distribution channels. The direct retail program makes FDIC-insured certificates of deposit (CDs) and high-yield savings account products available directly to consumers. As of December 31, 2016 we had $53.0 billion in customer deposits. Refer to Note 8 to the “Consolidated Financial Statements” for a further description of these deposits. LONG-TERM DEBT PROGRAMS As of December 31, 2016 we had $47.0 billion in long-term debt outstanding. During 2016, we and our subsidiaries issued $3.8 billion of unsecured debt with maturities ranging from 3 to 5 years. Referto Note 9 to the “Consolidated Financial Statements” for a further description of these borrowings. Our 2016 debt issuances were as follows: TABLE 23: DEBT ISSUANCES
<table><tr><td><i>(Billions)</i></td><td> 2016</td></tr><tr><td>American Express Credit Corporation:</td><td></td></tr><tr><td>Fixed Rate Senior Notes (weighted-average coupon of 1.65%)</td><td>$3.5</td></tr><tr><td>Floating Rate Senior Notes(3-monthLIBOR plus 57 basis points onaverage)</td><td>0.3</td></tr><tr><td>Total</td><td>$3.8</td></tr></table>
ASSET SECURITIZATION PROGRAMS We periodically securitize Card Member loans and receivables arising from our card business, as the securitization market provides us with cost-effective funding. Securitization of Card Member loans and receivables is accomplished through the transfer of those assets to a trust, which in turn issues securities collateralized by the transferred assets to third-party investors. The proceeds from issuance are distributed to us, through our wholly owned subsidiaries, as consideration for the transferred assets. NOTE 3 LOANS AND ACCOUNTS RECEIVABLE The Company’s lending and charge payment card products result in the generation of Card Member loans and Card Member receivables, respectively. CARD MEMBER AND OTHER LOANS Card Member loans are recorded at the time a Card Member enters into a point-of-sale transaction with a merchant and represent revolving amounts due on lending card products, as well as amounts due from charge Card Members who utilize the Pay Over Time features on their account and elect to revolve a portion of the outstanding balance by entering into a revolving payment arrangement with the Company. These loans have a range of terms such as credit limits, interest rates, fees and payment structures, which can be revised over time based on new information about Card Members, and in accordance with applicable regulations and the respective product’s terms and conditions. Card Members holding revolving loans are typically required to make monthly payments based on pre-established amounts and the amounts that Card Members choose to revolve are subject to finance charges. Card Member loans are presented on the Consolidated Balance Sheets net of reserves for losses (refer to Note 4), and include principal and any related accrued interest and fees. The Company’s policy generally is to cease accruing interest on a Card Member loan at the time the account is written off, and establish reserves for interest that the Company believes will not be collected. Card Member loans by segment and Other loans as of December 31, 2017 and 2016 consisted of:
<table><tr><td>(Millions)</td><td>2017</td><td>2016</td></tr><tr><td>U.S. Consumer Services<sup>(a)</sup></td><td>$53,668</td><td>$48,758</td></tr><tr><td>International Consumer and Network Services</td><td>8,651</td><td>6,971</td></tr><tr><td>Global Commercial Services</td><td>11,080</td><td>9,536</td></tr><tr><td>Card Member loans</td><td>73,399</td><td>65,265</td></tr><tr><td>Less: Reserve for losses</td><td>1,706</td><td>1,223</td></tr><tr><td>Card Member loans, net</td><td>$71,693</td><td>$64,042</td></tr><tr><td>Other loans, net<sup>(b)</sup></td><td>$2,607</td><td>$1,419</td></tr></table>
(a) Includes approximately $25.7 billion and $26.1 billion of gross Card Member loans available to settle obligations of a consolidated VIE as of December 31, 2017 and 2016, respectively. (b) Other loans primarily represent personal and commercial financing products. Other loans are presented net of reserves for losses of $80 million and $42 million as of December 31, 2017 and 2016, respectively. CARD MEMBER AND OTHER RECEIVABLES Card Member receivables are also recorded at the time a Card Member enters into a point-of-sale transaction with a merchant and represent amounts due on charge card products. Each charge card transaction is authorized based on its likely economics, a Card Member’s most recent credit information and spend patterns. Additionally, global spend limits are established to limit the maximum exposure for the Company. Charge Card Members generally must pay the full amount billed each month. Card Member receivable balances are presented on the Consolidated Balance Sheets net of reserves for losses (refer to Note 4), and include principal and any related accrued fees. Card Member accounts receivable by segment and Other receivables as of December 31, 2017 and 2016 consisted of:
<table><tr><td>(Millions)</td><td>2017</td><td>2016</td></tr><tr><td>U.S. Consumer Services<sup>(a)</sup></td><td>$13,143</td><td>$12,302</td></tr><tr><td>International Consumer and Network Services</td><td>7,803</td><td>5,966</td></tr><tr><td>Global Commercial Services</td><td>33,101</td><td>29,040</td></tr><tr><td>Card Member receivables</td><td>54,047</td><td>47,308</td></tr><tr><td>Less: Reserve for losses</td><td>521</td><td>467</td></tr><tr><td>Card Member receivables, net</td><td>$53,526</td><td>$46,841</td></tr><tr><td>Other receivables, net<sup>(b)</sup></td><td>$3,163</td><td>$3,232</td></tr></table>
(a) Includes $8.9 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of both December 31, 2017 and 2016. (b) Other receivables primarily represent amounts related to (i) GNS partner banks for items such as royalty and franchise fees, (ii) certain merchants for billed discount revenue, (iii) tax-related receivables, and (iv) loyalty coalition partners for points issued, as well as program participation and servicing fees. Other receivables are presented net of reserves for losses of $31 million and $45 million as of December 31, 2017 and 2016, respectively. Stock Performance Graph The following graph sets forth the cumulative total shareholder return on our Series A common stock, Series B common stock and Series C common stock as compared with the cumulative total return of the companies listed in the Standard and Poor’s 500 Stock Index (“S&P 500 Index”) and a peer group of companies comprised of CBS Corporation Class B common stock, Scripps Network Interactive, Inc. (acquired by the Company in March 2018), Time Warner, Inc. (acquired by AT&T Inc. in June 2018), Twenty-First Century Fox, Inc. Class A common stock (News Corporation Class A Common Stock prior to June 2013), Viacom, Inc. Class B common stock and The Walt Disney Company. The graph assumes $100 originally invested on December 31, 2013 in each of our Series A common stock, Series B common stock and Series C common stock, the S&P 500 Index, and the stock of our peer group companies, including reinvestment of dividends, for the years ended December 31, 2014, 2015, 2016, 2017 and 2018. Two peer companies, Scripps Networks Interactive, Inc. and Time Warner, Inc. , were acquired in 2018. The stock performance chart shows the peer group including Scripps Networks Interactive, Inc. and Time Warner, Inc. and excluding both acquired companies for the entire five year period.
<table><tr><td></td><td>December 31,2013</td><td>December 31,2014</td><td>December 31,2015</td><td>December 31,2016</td><td>December 31,2017</td><td>December 31,2018</td></tr><tr><td>DISCA</td><td>$100.00</td><td>$74.58</td><td>$57.76</td><td>$59.34</td><td>$48.45</td><td>$53.56</td></tr><tr><td>DISCB</td><td>$100.00</td><td>$80.56</td><td>$58.82</td><td>$63.44</td><td>$53.97</td><td>$72.90</td></tr><tr><td>DISCK</td><td>$100.00</td><td>$80.42</td><td>$60.15</td><td>$63.87</td><td>$50.49</td><td>$55.04</td></tr><tr><td>S&P 500</td><td>$100.00</td><td>$111.39</td><td>$110.58</td><td>$121.13</td><td>$144.65</td><td>$135.63</td></tr><tr><td>Peer Group incl. Acquired Companies</td><td>$100.00</td><td>$116.64</td><td>$114.02</td><td>$127.96</td><td>$132.23</td><td>$105.80</td></tr><tr><td>Peer Group ex. Acquired Companies</td><td>$100.00</td><td>$113.23</td><td>$117.27</td><td>$120.58</td><td>$127.90</td><td>$141.58</td></tr></table>
Equity Compensation Plan Information Information regarding securities authorized for issuance under equity compensation plans will be set forth in our definitive Proxy Statement for our 2019 Annual Meeting of Stockholders under the caption “Securities Authorized for Issuance Under Equity Compensation Plans,” which is incorporated herein by reference. |
2,530 | In the level with largest amount of U.S. Treasuries of Fixed Income Securities, what's the sum of Fixed Income Securities? | 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: |
0.08345 | What is the growing rate of Fixed maturities in Carrying Value in table 0 in the year with the most Equity securities in Carrying Value in table 0? | American International Group, Inc. and Subsidiaries Notes to Consolidated Financial Statements Continued 13. Fair Value of Financial Instruments Continued The carrying values and fair values of AIG’s financial instruments at December 31, 2006 and 2005 were as follows:
<table><tr><td></td><td colspan="2"> 2006</td><td colspan="2">2005</td></tr><tr><td><i>(in millions)</i></td><td>Carrying Value<sup>(a)</sup></td><td>Fair Value</td><td>Carrying Value<sup>(a)</sup></td><td>Fair Value</td></tr><tr><td>Assets:</td><td></td><td></td><td></td><td></td></tr><tr><td>Fixed maturities</td><td>$417,865</td><td>$418,582</td><td>$385,680</td><td>$386,199</td></tr><tr><td>Equity securities</td><td>30,222</td><td>30,222</td><td>23,588</td><td>23,588</td></tr><tr><td>Mortgage loans on real estate, policy and collateral loans</td><td>28,418</td><td>28,655</td><td>24,909</td><td>26,352</td></tr><tr><td>Securities available for sale</td><td>47,205</td><td>47,205</td><td>37,511</td><td>37,511</td></tr><tr><td>Trading securities</td><td>5,031</td><td>5,031</td><td>6,499</td><td>6,499</td></tr><tr><td>Spot commodities</td><td>220</td><td>220</td><td>92</td><td>96</td></tr><tr><td>Unrealized gain on swaps, options and forward transactions</td><td>19,252</td><td>19,252</td><td>18,695</td><td>18,695</td></tr><tr><td>Trading assets</td><td>2,468</td><td>2,468</td><td>1,204</td><td>1,204</td></tr><tr><td>Securities purchased under agreements to resell</td><td>33,702</td><td>33,702</td><td>14,547</td><td>14,547</td></tr><tr><td>Finance receivables, net of allowance</td><td>29,573</td><td>26,712</td><td>27,995</td><td>27,528</td></tr><tr><td>Securities lending collateral</td><td>69,306</td><td>69,306</td><td>59,471</td><td>59,471</td></tr><tr><td>Other invested assets<sup>(b)</sup></td><td>40,330</td><td>40,637</td><td>29,186</td><td>29,408</td></tr><tr><td>Short-term investments</td><td>25,249</td><td>25,249</td><td>15,342</td><td>15,342</td></tr><tr><td>Cash</td><td>1,590</td><td>1,590</td><td>1,897</td><td>1,897</td></tr><tr><td>Liabilities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Policyholders’ contract deposits</td><td>244,658</td><td>239,964</td><td>227,027</td><td>223,244</td></tr><tr><td>Borrowings under obligations of guaranteed investment agreements</td><td>20,664</td><td>20,684</td><td>20,811</td><td>22,373</td></tr><tr><td>Securities sold under agreements to repurchase</td><td>22,710</td><td>22,710</td><td>11,047</td><td>11,047</td></tr><tr><td>Trading liabilities</td><td>3,141</td><td>3,141</td><td>2,546</td><td>2,546</td></tr><tr><td>Hybrid financial instrument liabilities</td><td>8,856</td><td>8,856</td><td>—</td><td>—</td></tr><tr><td>Securities and spot commodities sold but not yet purchased</td><td>4,076</td><td>4,076</td><td>5,975</td><td>5,975</td></tr><tr><td>Unrealized loss on swaps, options and forward transactions</td><td>11,401</td><td>11,401</td><td>12,740</td><td>12,740</td></tr><tr><td>Trust deposits and deposits due to banks and other depositors</td><td>5,249</td><td>5,261</td><td>4,877</td><td>5,032</td></tr><tr><td>Commercial paper</td><td>13,029</td><td>13,029</td><td>9,208</td><td>9,208</td></tr><tr><td>Notes, bonds, loans and mortgages payable</td><td>104,690</td><td>106,494</td><td>78,439</td><td>79,518</td></tr><tr><td>Securities lending payable</td><td>70,198</td><td>70,198</td><td>60,409</td><td>60,409</td></tr></table>
(a) The carrying value of all other financial instruments approximates fair value. (b) Excludes aircraft asset investments held by non-Financial Services subsidiaries.14. Stock Compensation Plans At December 31, 2006, AIG employees could be awarded compensation pursuant to six different stock-based compensation plan arrangements: (i) AIG 1999 Stock Option Plan, as amended (1999 Plan); (ii) AIG 1996 Employee Stock Purchase Plan, as amended (1996 Plan); (iii) AIG 2002 Stock Incentive Plan, as amended (2002 Plan) under which AIG has issued time-vested restricted stock units (RSUs) and performance restricted stock units (performance RSUs); (iv) SICO’s Deferred Compensation Pro?t Participation Plans (SICO Plans); (v) AIG’s 2005-2006 Deferred Compensation Pro?t Participation Plan (AIG DCPPP) and (vi) the AIG Partners Plan. The AIG DCPPP was adopted as a replacement for the SICO Plans for the 2005-2006 period, and the AIG Partners Plan replaces the AIG DCPPP. Stock-based compensation earned under the AIG DCPPP and the AIG Partners Plan is issued as awards under the 2002 Plan. AIG currently settles share option exercises and other share awards to participants through the issuance of shares it has previously acquired and holds in its treasury account, except for share awards made by SICO, which are settled by SICO. At December 31, 2006, AIG’s non-employee directors received stock-based compensation in two forms, options granted pursuant to the 1999 Plan and grants of AIG common stock with delivery deferred until retirement from the Board, pursuant to the AIG Director Stock Plan, which was approved by the shareholders at the 2004 Annual Meeting of Shareholders. From January 1, 2003 through December 31, 2005, AIG accounted for share-based payment transactions with employees under FAS No.123, ‘‘Accounting for Stock-Based Compensation. ’’Share-based employee compensation expense from option awards was not recognized in the statement of income in prior periods. Effective January 1, 2006, AIG adopted the fair value recognition provisions of FAS 123R. FAS 123R requires that companies use a fair value method to value share-based payments and recognize the related compensation expense in net earnings. AIG adopted FAS 123R using the modi?ed prospective application method, and accordingly, ?nancial statement amounts for the prior periods presented have not been restated to re?ect the fair value method of expensing share-based compensation under FAS 123R. The modi?ed prospective application method provides for the recogni- tion of the fair value with respect to share-based compensation American International Group, Inc. , and Subsidiaries Notes to Consolidated Financial Statements — (Continued) AIG maintains a shelf registration statement in Japan, providing for the issuance of up to Japanese Yen 300 billion principal amount of senior notes, of which the equivalent of $562 million was outstanding at December 31, 2008. (iii) Junior subordinated debt: During 2007 and 2008, AIG issued an aggregate of $12.5 billion of junior subordinated debentures denominated in U. S. dollars, British Pounds and Euros in eight series of securities. In connection with each series of junior subordinated debentures, AIG entered into a Replacement Capital Covenant (RCC) for the benefit of the holders of AIG’s 6.25 percent senior notes due 2036. The RCCs provide that AIG will not repay, redeem, or purchase the applicable series of junior subordinated debentures on or before a specified date, unless AIG has received qualifying proceeds from the sale of replacement capital securities. In May 2008, AIG raised a total of approximately $20 billion through the sale of (i) 196,710,525 shares of AIG common stock in a public offering at a price per share of $38; (ii) 78.4 million Equity Units in a public offering at a price per unit of $75; and (iii) $6.9 billion in unregistered offerings of junior subordinated debentures in three series. The Equity Units and junior subordinated debentures receive hybrid equity treatment from the major rating agencies under their current policies but are recorded as long-term debt on the consolidated balance sheet. The Equity Units consist of an ownership interest in AIG junior subordinated debentures and a stock purchase contract obligating the holder of an equity unit to purchase, and obligating AIG to sell, a variable number of shares of AIG common stock on three dates in 2011 (a minimum of 128,944,480 shares and a maximum of 154,738,080 shares, subject to antidilution adjustments). AIGFP Borrowings under obligations of guaranteed investment agreements: Borrowings under obligations of GIAs, which are guaranteed by AIG, are recorded at fair value. Obligations may be called at various times prior to maturity at the option of the counterparty. Interest rates on these borrowings are primarily fixed, vary by maturity, and range up to 9.8 percent. At December 31, 2008, the fair value of securities pledged as collateral with respect to these obligations approximated $8.4 billion. AIGFP’s debt, excluding GIAs, outstanding are as follows:
<table><tr><td> At December 31, 2008</td><td></td><td> Range of </td><td rowspan="2"> U.S. Dollar Carrying Value (Dollars in millions)</td></tr><tr><td> Range of Maturities</td><td> Currency</td><td> Interest Rates</td></tr><tr><td>2009-2035</td><td>U.S. dollar</td><td>0.01-8.25%</td><td>$4,167</td></tr><tr><td>2009-2047</td><td>Euro</td><td>1.59-7.65</td><td>2,866</td></tr><tr><td>2009-2023</td><td>Japanese yen</td><td>0.01-2.50</td><td>2,205</td></tr><tr><td>2009-2015</td><td>Swiss franc</td><td>0.25-2.79</td><td>112</td></tr><tr><td>2009-2015</td><td>Australian dollar</td><td>0.01-2.65</td><td>107</td></tr><tr><td>2009-2012</td><td>Other</td><td>0.01-7.73</td><td>81</td></tr><tr><td>Total</td><td></td><td></td><td>$9,538</td></tr></table>
AIGFP economically hedges its notes and bonds. AIG guarantees all of AIGFP’s debt. Hybrid financial instrument liabilities: AIGFP’s notes and bonds include structured debt instruments whose payment terms are linked to one or more financial or other indices (such as an equity index or commodity index or another measure that is not considered to be clearly and closely related to the debt instrument). These notes contain embedded derivatives that otherwise would be required to be accounted for separately under FAS 133. Upon AIG’s early adoption of FAS 155, AIGFP elected the fair value option for these notes. The notes that are accounted for using the fair value option are reported separately under hybrid financial instrument liabilities at fair value. ITEM 7 / RESULTS OF OPERATIONS / CONSUMER INSURANCE Total net flows for Retirement decreased in 2014 compared to 2013, as higher surrenders and withdrawals in 2014, primarily in the Group Retirement and Retail Mutual Fund product lines, resulted in a significant decrease in net flows compared to 2013. Net flows for Retirement increased in 2013 compared to 2012, primarily due to the increase in premiums and deposits, partially offset by higher surrenders in Group Retirement and Retail Mutual Funds. See below for additional discussion of each product line. Premiums and Deposits and Net Flows by Product Line A discussion of the significant variances in premiums and deposits and net flows for each product line follows: Fixed Annuities deposits increased in 2014 compared to 2013 due to modest increases in interest rates and steepening of the yield curve in the first half of 2014, compared to lower rates in the prior year, particularly in the first half of 2013. The increase in Fixed Annuities deposits in 2013 compared to 2012 was due to the increase in market interest rates in the second half of 2013. Fixed Annuities net flows continued to be negative, but improved slightly in 2014 compared to 2013, and improved significantly in 2013 compared to 2012, primarily due to the increased deposits. Retirement Income Solutions premiums and deposits and net flows increased significantly in 2014 compared to 2013, and in 2013 compared to 2012, reflecting a continued high volume of variable and index annuity sales, which have benefitted from consumer demand for retirement products with guaranteed benefit features, product enhancements, expanded distribution and a more favorable competitive environment. The improvement in the surrender rate (see Surrender Rates below) was primarily due to the significant growth in account value driven by the high volume of sales, which has increased the proportion of business that is within the surrender charge period. Retail Mutual Fund deposits and net flows decreased in 2014 compared to 2013 and increased in 2013 compared to 2012. These variances were primarily driven by activity in the Focused Dividend Strategy Fund, which had record sales in 2013. In 2014, the relative performance of the fund declined, putting pressure on sales and withdrawal activity. Group Retirement net flows decreased in 2014 compared to 2013, primarily due to higher group surrender activity, as well as lower premiums and deposits. The increase in surrenders and surrender rate for 2014 compared to 2013 included large group surrenders of approximately $2.7 billion, but reserves of this product line grew in 2014 compared to 2013, and the 2014 surrender activity is not expected to have a significant impact on pre-tax operating income in 2015. The large group market has become increasingly competitive and has been impacted by the consolidation of healthcare providers and other employers in our target markets. This trend of heightened competition is expected to continue in 2015 as plan sponsors perform reviews of existing retirement plan relationships. The decrease in Group Retirement net flows in 2013 compared to 2012 was primarily a result of higher surrenders of individual participants as well as large group surrenders. Surrender Rates The following table presents reserves for annuity product lines by surrender charge category:
<table><tr><td> At December 31,</td><td rowspan="2">2014 Group Retirement Products (a)</td><td colspan="2"></td><td rowspan="2">2013 Group Retirement Products (a)</td><td colspan="2"></td></tr><tr><td><i>(in millions)</i></td><td>Fixed Annuities</td><td>Retirement Income Solutions</td><td>Fixed Annuities</td><td>Retirement Income Solutions</td></tr><tr><td>No surrender charge<sup>(b)</sup></td><td>$61,751</td><td>$34,396</td><td>$1,871</td><td>$60,962</td><td>$30,906</td><td>$2,065</td></tr><tr><td>0% - 2%</td><td>1,648</td><td>2,736</td><td>17,070</td><td>1,508</td><td>2,261</td><td>16,839</td></tr><tr><td>Greater than 2% - 4%</td><td>1,657</td><td>2,842</td><td>4,254</td><td>1,967</td><td>4,349</td><td>2,734</td></tr><tr><td>Greater than 4%</td><td>5,793</td><td>12,754</td><td>26,165</td><td>5,719</td><td>16,895</td><td>19,039</td></tr><tr><td>Non-surrenderable</td><td>770</td><td>3,464</td><td>151</td><td>315</td><td>2,758</td><td>67</td></tr><tr><td>Total reserves</td><td>$71,619</td><td>$56,192</td><td>$49,511</td><td>$70,471</td><td>$57,169</td><td>$40,744</td></tr></table>
(a) Excludes mutual fund assets under management of $14.6 billion and $15.1 billion at December 31, 2014 and 2013, respectively. (b) Group Retirement Products in this category include reserves of approximately $6.2 billion at both December 31, 2014 and 2013 that are subject to 20 percent annual withdrawal limitations. ITEM 5 | Market for Registrant?s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 AIG | 2017 Form 10-K As of December 31, 2017, approximately $2.3 billion remained under our share repurchase authorization. We did not repurchase any shares of AIG Common Stock from January 1, 2018 to February 8, 2018. Shares may be repurchased from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise (including through the purchase of warrants). Certain of our share repurchases have been and may from time to time be effected through Exchange Act Rule 10b5-1 repurchase plans. The timing of any future share repurchases will depend on market conditions, our business and strategic plans, financial condition, results of operations, liquidity and other factors. For additional information on our share purchases see Note 17 to the Consolidated Financial Statements. Common Stock Performance Graph The following Performance Graph compares the cumulative total shareholder return on AIG Common Stock for a five-year period (December 31, 2012 to December 31, 2017) with the cumulative total return of the S&P?s 500 stock index (which includes AIG), the S&P Property and Casualty Insurance Index (S&P P&C Index) and the S&P Life and Health Insurance Index (S&P L&H Index). Value of $100 Invested on December 31, 2012 (All $ as of December 31st) |
158,710 | What's the total amount of the Losses on reacquired debt in the years where Contract valuation adjustments(d) is greater than 1? (in thousand) | Liquidity and Capital Resources The following table presents selected financial information and statistics for each of the last three fiscal years (dollars in millions):
<table><tr><td></td><td>2004</td><td>2003</td><td>2002</td></tr><tr><td>Cash, cash equivalents, and short-term investments</td><td>$5,464</td><td>$4,566</td><td>$4,337</td></tr><tr><td>Accounts receivable, net</td><td>$774</td><td>$766</td><td>$565</td></tr><tr><td>Inventory</td><td>$101</td><td>$56</td><td>$45</td></tr><tr><td>Working capital</td><td>$4,375</td><td>$3,530</td><td>$3,730</td></tr><tr><td>Days sales in accounts receivable (DSO) (a)</td><td>30</td><td>41</td><td>36</td></tr><tr><td>Days of supply in inventory (b)</td><td>5</td><td>4</td><td>4</td></tr><tr><td>Days payables outstanding (DPO) (c)</td><td>76</td><td>82</td><td>77</td></tr><tr><td>Annual operating cash flow</td><td>$934</td><td>$289</td><td>$89</td></tr></table>
As of September 25, 2004, the Company had $5.464 billion in cash, cash equivalents, and short-term investments, an increase of $898 million over the same balances at the end of fiscal 2003. The principal components of this increase were cash generated by operating activities of $934 million and proceeds of $427 million from the issuance of common stock under stock plans, partially offset by cash used to repay the Company’s outstanding debt of $300 million and purchases of property, plant, and equipment of $176 million. The Company’s short-term investment portfolio is primarily invested in high credit quality, liquid investments. Approximately $3.2 billion of this cash, cash equivalents, and short-term investments are held by the Company’s foreign subsidiaries and would be subject to U. S. income taxation on repatriation to the U. S. The Company is currently assessing the impact of the one-time favorable foreign dividend provisions recently enacted as part of the American Jobs Creation Act of 2004, and may decide to repatriate earnings from some of its foreign subsidiaries. The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital expenditures, stock repurchase activity, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months. Debt In February 2004, the Company retired $300 million of debt outstanding in the form of 6.5% unsecured notes. The notes were originally issued in 1994 and were sold at 99.9925% of par for an effective yield to maturity of 6.51%. The Company currently has no long-term debt obligations. Capital Expenditures The Company’s total capital expenditures were $176 million during fiscal 2004, $104 million of which were for retail store facilities and equipment related to the Company’s Retail segment and $72 million of which were primarily for corporate infrastructure, including information systems enhancements and operating facilities enhancements and expansions. The Company currently anticipates it will utilize approximately $240 million for capital expenditures during 2005, approximately $125 million of which is expected to be utilized for further expansion of the Company’s Retail segment and the remainder utilized to support normal replacement of existing capital assets and enhancements to general information technology infrastructure. approved in 2006 has been used for the regulatory presentation and all the updated parameters were used for the 2005 ARO layer for SFAS No.143 recognition.16. Regulatory Assets and Liabilities Xcel Energy’s regulated businesses prepare their Consolidated Financial Statements in accordance with the provisions of SFAS No.71, as discussed in Note 1 to the Consolidated Financial Statements. Under SFAS No.71, regulatory assets and liabilities can be created for amounts that regulators may allow to be collected, or may require to be paid back to customers in future electric and natural gas rates. Any portion of Xcel Energy’s business that is not regulated cannot use SFAS No.71 accounting. If changes in the utility industry or the business of Xcel Energy no longer allow for the application of SFAS No.71 under GAAP, Xcel Energy would be required to recognize the write-off of regulatory assets and liabilities in its statement of income. The components of unamortized regulatory assets and liabilities of continuing operations shown on the balance sheet at Dec. 31 are:
<table><tr><td> </td><td> See Note(s)</td><td> Remaining Amortization Period</td><td> 2006</td><td> 2005</td></tr><tr><td> </td><td colspan="4"> (Thousands of Dollars)</td></tr><tr><td> Regulatory Assets</td><td></td><td></td><td></td><td></td></tr><tr><td>Pension and employee benefit obligations</td><td>9</td><td>Various</td><td>$475,815</td><td>$27,234</td></tr><tr><td>AFDC recorded in plant(a)</td><td></td><td>Plant lives</td><td>179,023</td><td>170,785</td></tr><tr><td>Conservation programs(a)</td><td></td><td>Various</td><td>124,123</td><td>111,429</td></tr><tr><td></td><td></td><td>Term of related</td><td></td><td></td></tr><tr><td>Contract valuation adjustments(d)</td><td>11</td><td>contract</td><td>109,221</td><td>111,639</td></tr><tr><td>Losses on reacquired debt</td><td>1</td><td>Term of related debt</td><td>74,420</td><td>84,290</td></tr><tr><td>Net asset retirement obligations(e)</td><td>1,14</td><td>Plant lives</td><td>54,550</td><td>171,170</td></tr><tr><td>Renewable resource costs</td><td></td><td>One to two years</td><td>49,902</td><td>50,453</td></tr><tr><td>Environmental costs</td><td>14,15</td><td>Generally four to six years</td><td>35,715</td><td>33,957</td></tr><tr><td>Unrecovered natural gas costs(c)</td><td>1</td><td>One to two years</td><td>17,943</td><td>12,998</td></tr><tr><td>Private fuel storage</td><td></td><td>Five years</td><td>14,473</td><td>—</td></tr><tr><td>State commission accounting adjustments(a)</td><td></td><td>Plant lives</td><td>13,950</td><td>14,460</td></tr><tr><td>Unrecovered electric production and MISO Day 2 costs</td><td>1</td><td>To be determined in future rate proceedings</td><td>11,014</td><td>6,634</td></tr><tr><td>Nuclear decommissioning costs(b)</td><td></td><td>To be determined in future rate proceedings</td><td>9,325</td><td>8,317</td></tr><tr><td>Rate case costs</td><td>1</td><td>Various</td><td>8,689</td><td>4,549</td></tr><tr><td>Other</td><td></td><td>Various</td><td>10,982</td><td>12,092</td></tr><tr><td>Total regulatory assets</td><td></td><td></td><td>$1,189,145</td><td>$820,007</td></tr><tr><td>Regulatory Liabilities</td><td></td><td></td><td></td><td></td></tr><tr><td>Plant removal costs</td><td>1,14</td><td></td><td>$920,583</td><td>$895,653</td></tr><tr><td>Pension and employee benefit obligations</td><td>9</td><td></td><td>196,803</td><td>397,261</td></tr><tr><td>Investment tax credit deferrals</td><td></td><td></td><td>78,205</td><td>84,437</td></tr><tr><td>Deferred income tax adjustments</td><td>1</td><td></td><td>67,002</td><td>75,171</td></tr><tr><td>Contract valuation adjustments(d)</td><td>11</td><td></td><td>56,745</td><td>99,734</td></tr><tr><td>Fuel costs, refunds and other</td><td></td><td></td><td>30,032</td><td>9,137</td></tr><tr><td>Electric fuel recovery refund</td><td></td><td></td><td>10,054</td><td>—</td></tr><tr><td>Interest on income tax refunds</td><td></td><td></td><td>5,233</td><td>6,031</td></tr><tr><td>Total regulatory liabilities</td><td></td><td></td><td>$1,364,657</td><td>$1,567,424</td></tr></table>
(a) Earns a return on investment in the ratemaking process. These amounts are amortized consistent with recovery in rates. (b) These costs do not relate to NSP-Minnesota’s nuclear plants. They relate to the DOE assessments, as discussed previously in Note 15. (c) Excludes current portion expected to be returned to customers within 12 months of $17.7 million and $16.3 million for 2006 and 2005, respectively. (d) Includes the fair value of certain long-term contracts used to meet native energy requirements. (e) Includes amounts recorded for future recovery of asset retirement obligations, less amounts recovered through nuclear decommissioning accruals and gains from decommissioning investments.
<table><tr><td> </td><td colspan="6"> Options</td></tr><tr><td> </td><td> Source of Fair Value</td><td> Maturity Less Than 1 Year</td><td> Maturity 1 to 3 Years</td><td> Maturity 4 to 5 Years</td><td> Maturity Greater Than 5 Years</td><td> Total Options Fair Value</td></tr><tr><td> </td><td colspan="6"> (Thousands of Dollars)</td></tr><tr><td>NSP-Minnesota</td><td>2</td><td>$514</td><td>$—</td><td>$—</td><td>$—</td><td>$514</td></tr><tr><td>PSCo</td><td>2</td><td>3,241</td><td>—</td><td>—</td><td>—</td><td>3,241</td></tr><tr><td>NSP-Wisconsin</td><td>2</td><td>20</td><td>—</td><td>—</td><td>—</td><td>20</td></tr><tr><td>Total Options Fair Value</td><td></td><td>$3,775</td><td>$—</td><td>$—</td><td>$—</td><td>$3,775</td></tr></table>
1 — Prices actively quoted or based on actively quoted prices.2 — Prices based on models and other valuation methods. These represent the fair value of positions calculated using internal models when directly and indirectly quoted external prices or prices derived from external sources are not available. Internal models incorporate the use of options pricing and estimates of the present value of cash flows based upon underlying contractual terms. The models reflect management’s estimates, taking into account observable market prices, estimated market prices in the absence of quoted market prices, the risk-free market discount rate, volatility factors, estimated correlations of commodity prices and contractual volumes. Market price uncertainty and other risks also are factored into the model. * — SPS conducts an inconsequential amount of commodity trading. Margins from commodity trading activity are partially redistributed to SPS, NSP-Minnesota, and PSCo, pursuant to the JOA approved by the FERC. As a result of the JOA, margins received pursuant to the JOA are reflected as part of the fair values by source for the commodity trading net asset or liability balances. Normal purchases and sales transactions, as defined by SFAS No.133 and certain other long-term power purchase contracts are not included in the fair values by source tables as they are not recorded at fair value as part of commodity trading operations and are not qualifying hedges. At Dec. 31, 2006, a 10-percent increase in market prices over the next 12 months for commodity trading contracts would increase pretax income from continuing operations by approximately $0.9 million, whereas a 10-percent decrease would decrease pretax income from continuing operations by approximately $1.1 million. Xcel Energy’s short-term wholesale and commodity trading operations measure the outstanding risk exposure to price changes on transactions, contracts and obligations that have been entered into, but not closed, using an industry standard methodology known as VaR. VaR expresses the potential change in fair value on the outstanding transactions, contracts and obligations over a particular period of time, with a given confidence interval under normal market conditions. Xcel Energy utilizes the variance/covariance approach in calculating VaR. The VaR model employs a 95-percent confidence interval level based on historical price movement, lognormal price distribution assumption, delta half-gamma approach for non-linear instruments and a three-day holding period for both electricity and natural gas. VaR is calculated on a consolidated basis. The VaRs for the commodity trading operations were:
<table><tr><td> </td><td> </td><td colspan="3"> During 2006</td></tr><tr><td> </td><td> Year ended Dec. 31, 2006</td><td> Average</td><td> High</td><td> Low</td></tr><tr><td> </td><td colspan="4"> (Millions of Dollars)</td></tr><tr><td>Commodity trading(a)</td><td>$0.49</td><td>$1.32</td><td>$2.60</td><td>$0.39</td></tr></table>
(a) Comprises transactions for NSP-Minnesota, PSCo and SPS. Interest Rate Risk — Xcel Energy and its subsidiaries are subject to the risk of fluctuating interest rates in the normal course of business. Xcel Energy’s policy allows interest rate risk to be managed through the use of fixed rate debt, floating rate debt and interest rate derivatives such as swaps, caps, collars and put or call options. Xcel Energy engages in hedges of cash flow and fair value exposure. The fair value of interest rate swaps designated as cash flow hedges is initially recorded in Other Comprehensive Income. Reclassification of unrealized gains or losses on cash flow hedges of variable rate debt instruments from Other Comprehensive Income into earnings occurs as interest payments are accrued on the debt instrument, and generally offsets the change in the interest accrued on the underlying variable rate debt. Hedges of fair value exposure are entered into to hedge the fair value of debt instruments. Changes in the derivative fair values that are designated as fair value hedges are recognized in earnings as offsets to the changes in fair values of debt instruments. To test the effectiveness of such swaps, a hypothetical swap is used to mirror all the critical terms of the underlying debt and regression analysis is utilized to assess the effectiveness of the actual swap at inception and on an ongoing basis. The fair value of interest rate swaps is determined through Dividend and Other Capital-Related Restrictions — Xcel Energy depends on its subsidiaries to pay dividends. All of Xcel Energy Inc. ’s utility subsidiaries’ dividends are subject to the FERC’s jurisdiction, which prohibits the payment of dividends out of capital accounts; payment of dividends is allowed out of retained earnings only. Due to certain restrictive covenants, Xcel Energy Inc. is required to be current on particular interest payments before dividends can be paid. The most restrictive dividend limitations for NSP-Minnesota, NSP-Wisconsin and SPS are imposed by their respective state regulatory commission. PSCo’s dividends are subject to the FERC’s jurisdiction under the Federal Power Act, which prohibits the payment of dividends out of capital accounts; payment of dividends is allowed out of retained earnings only. Only NSP-Minnesota has a first mortgage indenture which places certain restrictions on the amount of cash dividends it can pay to Xcel Energy Inc. , the holder of its common stock. Even with this restriction, NSP-Minnesota could have paid more than $1.7 billion in additional cash dividends to Xcel Energy Inc. at both Dec. 31, 2016 and 2015. NSP-Minnesota’s state regulatory commissions indirectly limit the amount of dividends NSP-Minnesota can pay by requiring an equity-to-total capitalization ratio between 46.9 percent and 57.3 percent. NSP-Minnesota’s equity-to-total capitalization ratio was 52.1 percent at Dec. 31, 2016 and $1.0 billion in retained earnings was not restricted. Total capitalization for NSP-Minnesota was $10.3 billion at Dec. 31, 2016, which did not exceed the limit of $10.75 billion. NSP-Wisconsin cannot pay annual dividends in excess of approximately $53.1 million if its calendar year average equity-to-total capitalization ratio is or falls below the state commission authorized level of 52.5 percent, as calculated consistent with PSCW requirements. NSP-Wisconsin’s calendar year average equity-to-total capitalization ratio calculated on this basis was 53.6 percent at Dec. 31, 2016 and $33.6 million in retained earnings was not restricted. SPS’ state regulatory commissions indirectly limit the amount of dividends that SPS can pay Xcel Energy Inc. by requiring an equityto-total capitalization ratio (excluding short-term debt) between 45.0 percent and 55.0 percent. In addition, SPS may not pay a dividend that would cause it to lose its investment grade bond rating. SPS’ equity-to-total capitalization ratio (excluding short-term debt) was 54.1 percent at Dec. 31, 2016 and $487 million in retained earnings was not restricted. The issuance of securities by Xcel Energy Inc. generally is not subject to regulatory approval. However, utility financings and certain intra-system financings are subject to the jurisdiction of the applicable state regulatory commissions and/or the FERC. As of Dec. 31, 2016: ? PSCo has authorization to issue up to an additional $2.2 billion of long-term debt and up to $800 million of short-term debt. ? SPS has authorization to issue up to $500 million of short-term debt and SPS will file for additional long-term debt authorization. ? NSP-Wisconsin has authorization to issue up to $150 million of short-term debt and NSPW will file for additional long-term debt authorization. ? NSP-Minnesota has authorization to issue long-term securities provided the equity-to-total capitalization ratio remains between 46.9 percent and 57.3 percent and to issue short-term debt provided it does not exceed 15 percent of total capitalization. Total capitalization for NSP-Minnesota cannot exceed $10.75 billion. Xcel Energy believes these authorizations are adequate and seeks additional authorization as necessary.5. Joint Ownership of Generation, Transmission and Gas Facilities Following are the investments by Xcel Energy Inc. ’s utility subsidiaries in jointly owned generation, transmission and gas facilities and the related ownership percentages as of Dec. 31, 2016: |
0.17122 | In the year with lowest amount of Working capital, what's the increasing rate of Total assets? | Part I Item 1 Entergy Corporation, Utility operating companies, and System Energy 253 including the continued effectiveness of the Clean Energy Standards/Zero Emissions Credit program (CES/ZEC), the establishment of certain long-term agreements on acceptable terms with the Energy Research and Development Authority of the State of New York in connection with the CES/ZEC program, and NYPSC approval of the transaction on acceptable terms, Entergy refueled the FitzPatrick plant in January and February 2017. In October 2015, Entergy determined that it would close the Pilgrim plant. The decision came after management’s extensive analysis of the economics and operating life of the plant following the NRC’s decision in September 2015 to place the plant in its “multiple/repetitive degraded cornerstone column” (Column 4) of its Reactor Oversight Process Action Matrix. The Pilgrim plant is expected to cease operations on May 31, 2019, after refueling in the spring of 2017 and operating through the end of that fuel cycle. In December 2015, Entergy Wholesale Commodities closed on the sale of its 583 MW Rhode Island State Energy Center (RISEC), in Johnston, Rhode Island. The base sales price, excluding adjustments, was approximately $490 million. Entergy Wholesale Commodities purchased RISEC for $346 million in December 2011. In December 2016, Entergy announced that it reached an agreement with Consumers Energy to terminate the PPA for the Palisades plant on May 31, 2018. Pursuant to the PPA termination agreement, Consumers Energy will pay Entergy $172 million for the early termination of the PPA. The PPA termination agreement is subject to regulatory approvals. Separately, and assuming regulatory approvals are obtained for the PPA termination agreement, Entergy intends to shut down the Palisades nuclear power plant permanently on October 1, 2018, after refueling in the spring of 2017 and operating through the end of that fuel cycle. Entergy expects to enter into a new PPA with Consumers Energy under which the plant would continue to operate through October 1, 2018. In January 2017, Entergy announced that it reached a settlement with New York State to shut down Indian Point 2 by April 30, 2020 and Indian Point 3 by April 30, 2021, and resolve all New York State-initiated legal challenges to Indian Point’s operating license renewal. As part of the settlement, New York State has agreed to issue Indian Point’s water quality certification and Coastal Zone Management Act consistency certification and to withdraw its objection to license renewal before the NRC. New York State also has agreed to issue a water discharge permit, which is required regardless of whether the plant is seeking a renewed NRC license. The shutdowns are conditioned, among other things, upon such actions being taken by New York State. Even without opposition, the NRC license renewal process is expected to continue at least into 2018. With the settlement concerning Indian Point, Entergy now has announced plans for the disposition of all of the Entergy Wholesale Commodities nuclear power plants, including the sales of Vermont Yankee and FitzPatrick, and the earlier than previously expected shutdowns of Pilgrim, Palisades, Indian Point 2, and Indian Point 3. See “Entergy Wholesale Commodities Exit from the Merchant Power Business” for further discussion. Property Nuclear Generating Stations Entergy Wholesale Commodities includes the ownership of the following nuclear power plants:
<table><tr><td>Power Plant</td><td>Market</td><td>In Service Year</td><td>Acquired</td><td>Location</td><td>Capacity - Reactor Type</td><td>License Expiration Date</td></tr><tr><td>Pilgrim (a)</td><td>IS0-NE</td><td>1972</td><td>July 1999</td><td>Plymouth, MA</td><td>688 MW - Boiling Water</td><td>2032 (a)</td></tr><tr><td>FitzPatrick (b)</td><td>NYISO</td><td>1975</td><td>Nov. 2000</td><td>Oswego, NY</td><td>838 MW - Boiling Water</td><td>2034 (b)</td></tr><tr><td>Indian Point 3 (c)</td><td>NYISO</td><td>1976</td><td>Nov. 2000</td><td>Buchanan, NY</td><td>1,041 MW - Pressurized Water</td><td>2015 (c)</td></tr><tr><td>Indian Point 2 (c)</td><td>NYISO</td><td>1974</td><td>Sept. 2001</td><td>Buchanan, NY</td><td>1,028 MW - Pressurized Water</td><td>2013 (c)</td></tr><tr><td>Vermont Yankee (d)</td><td>IS0-NE</td><td>1972</td><td>July 2002</td><td>Vernon, VT</td><td>605 MW - Boiling Water</td><td>2032 (d)</td></tr><tr><td>Palisades (e)</td><td>MISO</td><td>1971</td><td>Apr. 2007</td><td>Covert, MI</td><td>811 MW - Pressurized Water</td><td>2031 (e)</td></tr></table>
<table><tr><td>Consolidated Balance Sheet Data</td><td colspan="5">At July 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>Cash, cash equivalents and investments</td><td>$1,914</td><td>$1,661</td><td>$744</td><td>$1,421</td><td>$1,622</td></tr><tr><td>Long-term investments</td><td>31</td><td>83</td><td>75</td><td>63</td><td>91</td></tr><tr><td>Working capital</td><td>1,200</td><td>1,116</td><td>258</td><td>449</td><td>1,074</td></tr><tr><td>Total assets</td><td>5,201</td><td>5,486</td><td>4,684</td><td>5,110</td><td>5,198</td></tr><tr><td>Current portion of long-term debt</td><td>—</td><td>—</td><td>—</td><td>500</td><td>—</td></tr><tr><td>Long-term debt</td><td>499</td><td>499</td><td>499</td><td>499</td><td>998</td></tr><tr><td>Other long-term obligations</td><td>203</td><td>167</td><td>166</td><td>175</td><td>143</td></tr><tr><td>Total stockholders’ equity</td><td>3,078</td><td>3,531</td><td>2,744</td><td>2,616</td><td>2,821</td></tr></table>
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) includes the following sections: ? Executive Overview that discusses at a high level our operating results and some of the trends that affect our business. ? Critical Accounting Policies and Estimates that we believe are important to understanding the assumptions and judgments underlying our financial statements. ? Results of Operations that includes a more detailed discussion of our revenue and expenses. ? Liquidity and Capital Resources which discusses key aspects of our statements of cash flows, changes in our balance sheets and our financial commitments. You should note that this MD&A discussion contains forward-looking statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements and Risk Factors” at the beginning of Item 1A for important information to consider when evaluating such statements. You should read this MD&A in conjunction with the financial statements and related notes in Item 8 of this Annual Report. In fiscal 2014 we acquired Check Inc. and in fiscal 2012 we acquired Demandforce, Inc. We have included their results of operations in our consolidated results of operations from the dates of acquisition. In fiscal 2013 we completed the sale of our Intuit Websites business and in fiscal 2014 we completed the sales of our Intuit Financial Services (IFS) and Intuit Health businesses. We accounted for all of these businesses as discontinued operations and have therefore reclassified our statements of operations for all periods presented to reflect them as such. We have also reclassified our balance sheets for all periods presented to reflect IFS as discontinued operations. The net assets of Intuit Websites and Intuit Health were not significant, so we have not reclassified our balance sheets for any period presented to reflect them as discontinued operations. Because the cash flows of our Intuit Websites, IFS, and Intuit Health discontinued operations were not material for any period presented, we have not segregated the cash flows of those businesses from continuing operations on our statements of cash flows. See “Results of Operations – Non-Operating Income and Expense – Discontinued Operations” later in this Item 7 for more information. Unless otherwise noted, the following discussion pertains to our continuing operations. Executive Overview This overview provides a high level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important in order to understand our financial results for fiscal 2014 as well as our future prospects. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Annual Report on Form 10-K. See the table later in this Note 7 for more information on the IFS operating results. The carrying amounts of the major classes of assets and liabilities of IFS at July 31, 2013 were as shown in the following table. These carrying amounts approximated fair value.
<table><tr><td>(In millions)</td><td>July 31, 2013</td></tr><tr><td>Accounts receivable</td><td>$40</td></tr><tr><td>Other current assets</td><td>4</td></tr><tr><td>Property and equipment, net</td><td>31</td></tr><tr><td>Goodwill</td><td>914</td></tr><tr><td>Purchased intangible assets, net</td><td>4</td></tr><tr><td>Other assets</td><td>6</td></tr><tr><td>Total assets</td><td>999</td></tr><tr><td>Accounts payable</td><td>15</td></tr><tr><td>Accrued compensation</td><td>21</td></tr><tr><td>Deferred revenue</td><td>3</td></tr><tr><td>Long-term obligations</td><td>9</td></tr><tr><td>Total liabilities</td><td>48</td></tr><tr><td>Net assets</td><td>$951</td></tr></table>
Intuit Health In July 2013 management having the authority to do so formally approved a plan to sell our Intuit Health business and on August 19, 2013 we completed the sale for cash consideration that was not significant. We recorded a $4 million pre-tax loss on the disposal of Intuit Health that was more than offset by a related income tax benefit of approximately $14 million, resulting in a net gain on disposal of approximately $10 million in the first quarter of fiscal 2014. The decision to sell the Intuit Health business was a result of management's desire to focus resources on its offerings for small businesses, consumers, and accounting professionals. Intuit Health was part of our former Other Businesses reportable segment. We determined that our Intuit Health business became a long-lived asset held for sale in the fourth quarter of fiscal 2013. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying value of Intuit Health at July 31, 2013 was less than the estimated fair value less cost to sell, no adjustment to the carrying value of this long-lived asset was necessary at that date. We also classified our Intuit Health business as discontinued operations in the fourth quarter of fiscal 2013 and have segregated its operating results in our statements of operations for all periods presented. See the table later in this Note for more information. We have not segregated the net assets of Intuit Health on our balance sheets for any period presented. Net assets held for sale at July 31, 2013 consisted primarily of operating assets and liabilities that were not material. Because operating cash flows from the Intuit Health business were also not material for any period presented, we have not segregated them from continuing operations on our statements of cash flows. Intuit Websites In July 2012 management having the authority to do so formally approved a plan to sell our Intuit Websites business, which was a component of our Small Business reportable segment. The decision was the result of a shift in our strategy for helping small businesses to establish an online presence. On August 10, 2012 we signed a definitive agreement to sell our Intuit Websites business and on September 17, 2012 we completed the sale for approximately $60 million in cash. We recorded a gain on disposal of approximately $32 million, net of income taxes. We determined that our Intuit Websites business became a long-lived asset held for sale in the fourth quarter of fiscal 2012. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying value of Intuit Websites at July 31, 2012 was less than the estimated fair value less cost to sell, no adjustment to the carrying value of this long-lived asset was necessary at that date. |
38,590 | What was the total amount of U.S. high-grade-1，Eurobond-2，Other-3 and Total commissions in Mar 31, 2008 (in thousand) | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Millions, Except Per Share Amounts) Long-term debt maturing over the next five years and thereafter is as follows:
<table><tr><td>2004</td><td>$ 244.5</td></tr><tr><td>2005</td><td>$ 523.8</td></tr><tr><td>2006</td><td>$ 338.5</td></tr><tr><td>2007</td><td>$ 0.9</td></tr><tr><td>2008</td><td>$ 0.9</td></tr><tr><td>2009 and thereafter</td><td>$1,327.6</td></tr></table>
Other On March 7, 2003, Standard & Poor's Ratings Services downgraded the Company's senior secured credit rating to BB+ with negative outlook from BBB-. On May 14, 2003, Fitch Ratings downgraded the Company's senior unsecured credit rating to BB+ with negative outlook from BBB-. On May 9, 2003, Moody's Investor Services, Inc. ("Moody's") placed the Company's senior unsecured and subordinated credit ratings on review for possible downgrade from Baa3 and Ba1, respectively. As of March 12, 2004, the Company's credit ratings continued to be on review for a possible downgrade. Since July 2001, the Company has not repurchased its common stock in the open market. In October 2003, the Company received a federal tax refund of approximately $90 as a result of its carryback of its 2002 loss for US federal income tax purposes and certain capital losses, to earlier periods. Through December 2002, the Company had paid cash dividends quarterly with the most recent quarterly dividend paid in December 2002 at a rate of $0.095 per share. On a quarterly basis, the Company's Board of Directors makes determinations regarding the payment of dividends. As previously discussed, the Company's ability to declare or pay dividends is currently restricted by the terms of its Revolving Credit Facilities. The Company did not declare or pay any dividends in 2003. However, in 2004, the Company expects to pay any dividends accruing on the Series A Mandatory Convertible Preferred Stock in cash, which is expressly permitted by the Revolving Credit Facilities. See Note 14 for discussion of fair market value of the Company's long-term debt. Note 9: Equity Offering On December 16, 2003, the Company sold 25.8 million shares of common stock and issued 7.5 million shares of 3- year Series A Mandatory Convertible Preferred Stock (the "Preferred Stock"). The total net proceeds received from the concurrent offerings was approximately $693. The Preferred Stock carries a dividend yield of 5.375%. On maturity, each share of the Preferred Stock will convert, subject to adjustment, to between 3.0358 and 3.7037 shares of common stock, depending on the then-current market price of the Company's common stock, representing a conversion premium of approximately 22% over the stock offering price of $13.50 per share. Under certain circumstances, the Preferred Stock may be converted prior to maturity at the option of the holders or the Company. The common and preferred stock were issued under the Company's existing shelf registration statement. In January 2004, the Company used approximately $246 of the net proceeds from the offerings to redeem the 1.80% Convertible Subordinated Notes due 2004. The remaining proceeds will be used for general corporate purposes and to further strengthen the Company's balance sheet and financial condition. The Company will pay annual dividends on each share of the Series A Mandatory Convertible Preferred Stock in the amount of $2.6875. Dividends will be cumulative from the date of issuance and will be payable on each payment date to the extent that dividends are not restricted under the Company's credit facilities and assets are legally available to pay dividends. The first dividend payment, which was declared on February 24, 2004, will be made on March 15, 2004. financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the unaudited quarterly data. This information should be read in conjunction with our Consolidated Financial Statements and related Notes included in this Annual Report on Form 10-K. The results of operations for any quarter are not necessarily indicative of results that we may achieve for any subsequent periods.
<table><tr><td></td><td colspan="8"> Three Months Ended</td></tr><tr><td></td><td> Mar 31, 2008</td><td> Jun 30, 2008</td><td> Sep 30, 2008</td><td> Dec 31, 2008</td><td> Mar 31, 2009</td><td> Jun 30, 2009</td><td> Sep 30, 2009</td><td> Dec 31, 2009</td></tr><tr><td></td><td colspan="8"> (In thousands)</td></tr><tr><td> Revenues</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commissions</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. high-grade-1</td><td>$12,402</td><td>$12,554</td><td>$10,777</td><td>$10,814</td><td>$13,515</td><td>$13,808</td><td>$16,306</td><td>$18,928</td></tr><tr><td>Eurobond-2</td><td>4,589</td><td>5,120</td><td>4,427</td><td>4,010</td><td>4,142</td><td>4,712</td><td>5,497</td><td>5,988</td></tr><tr><td>Other-3</td><td>2,304</td><td>2,464</td><td>2,015</td><td>2,052</td><td>2,789</td><td>3,310</td><td>3,486</td><td>3,651</td></tr><tr><td>Total commissions</td><td>19,295</td><td>20,138</td><td>17,219</td><td>16,876</td><td>20,446</td><td>21,830</td><td>25,289</td><td>28,567</td></tr><tr><td>Technology products and services-4</td><td>767</td><td>2,676</td><td>2,646</td><td>2,466</td><td>2,023</td><td>2,096</td><td>2,601</td><td>3,058</td></tr><tr><td>Information and user access fees-5</td><td>1,481</td><td>1,442</td><td>1,562</td><td>1,540</td><td>1,655</td><td>1,504</td><td>1,519</td><td>1,574</td></tr><tr><td>Interest income-6</td><td>991</td><td>761</td><td>963</td><td>763</td><td>332</td><td>234</td><td>314</td><td>342</td></tr><tr><td>Other-7</td><td>405</td><td>620</td><td>291</td><td>183</td><td>176</td><td>175</td><td>286</td><td>418</td></tr><tr><td>Total revenues</td><td>22,939</td><td>25,637</td><td>22,681</td><td>21,828</td><td>24,632</td><td>25,839</td><td>30,009</td><td>33,959</td></tr><tr><td> Expenses</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employee compensation and benefits</td><td>11,018</td><td>11,576</td><td>11,173</td><td>10,043</td><td>11,442</td><td>11,917</td><td>13,127</td><td>13,788</td></tr><tr><td>Depreciation and amortization</td><td>1,780</td><td>1,816</td><td>2,494</td><td>1,789</td><td>1,791</td><td>1,679</td><td>1,654</td><td>1,666</td></tr><tr><td>Technology and communications</td><td>2,106</td><td>2,048</td><td>2,007</td><td>2,150</td><td>2,242</td><td>2,120</td><td>2,029</td><td>2,045</td></tr><tr><td>Professional and consulting fees</td><td>2,153</td><td>2,521</td><td>1,822</td><td>1,675</td><td>1,879</td><td>1,613</td><td>1,645</td><td>1,732</td></tr><tr><td>Occupancy</td><td>767</td><td>739</td><td>660</td><td>725</td><td>676</td><td>693</td><td>706</td><td>1,054</td></tr><tr><td>Marketing and advertising</td><td>684</td><td>685</td><td>708</td><td>955</td><td>645</td><td>708</td><td>651</td><td>878</td></tr><tr><td>General and administrative</td><td>1,467</td><td>1,493</td><td>1,719</td><td>1,478</td><td>1,226</td><td>1,373</td><td>1,654</td><td>1,757</td></tr><tr><td>Total expenses</td><td>19,975</td><td>20,878</td><td>20,583</td><td>18,815</td><td>19,901</td><td>20,103</td><td>21,466</td><td>22,920</td></tr><tr><td>Income before income taxes</td><td>2,964</td><td>4,759</td><td>2,098</td><td>3,013</td><td>4,731</td><td>5,736</td><td>8,543</td><td>11,039</td></tr><tr><td>Provision for income taxes</td><td>1,368</td><td>1,911</td><td>579</td><td>1,077</td><td>1,892</td><td>2,549</td><td>3,903</td><td>5,603</td></tr><tr><td>Net income</td><td>$1,596</td><td>$2,848</td><td>$1,519</td><td>$1,936</td><td>$2,839</td><td>$3,187</td><td>$4,640</td><td>$5,436</td></tr></table>
(1) Of these amounts, $1,920, $2,137, $1,928, $1,761, $1,985, $2,039, $2,276 and $2,457, respectively, were from related parties. (2) Of these amounts, $804, $873, $788, $738, $783, $933, $1,049 and $1,052, respectively, were from related parties. (3) Of these amounts, $429, $437, $378, $273, $302, $378, $363 and $486, respectively, were from related parties. (4) Of these amounts, $15, $7, $3, $8, $9, $10, $9 and $7, respectively, were from related parties. (5) Of these amounts, $53, $73, $81, $69, $61, $64, $60 and $58, respectively, were from related parties. (6) Of these amounts, $267, $209, $310, $379, $90, $58, $36 and $30, respectively, were from related parties. (7) Of these amounts, $43, $45, $45, $38, $42, $38, $37 and $35, respectively, were from related parties. Table of Contents Index to Financial Statements counterparty does not fulfill its obligation to complete a transaction. Pursuant to the terms of the securities clearing agreements between us and the independent clearing broker, the clearing broker has the right to charge us for losses resulting from a counterparty’s failure to fulfill its contractual obligations. The losses are not capped at a maximum amount and apply to all trades executed through the clearing broker. At December 31, 2011, we had not recorded any liabilities with regard to this right. In the ordinary course of business, we enter into contracts that contain a variety of representations, warranties and general indemnifications. Our maximum exposure from any claims under these arrangements is unknown, as this would involve claims that have not yet occurred. However, based on past experience, we expect the risk of loss to be remote. In October 2011, our Board of Directors authorized a share repurchase program for up to $35.0 million of our common stock. As of December 31, 2011, a total of 237,998 shares were repurchased at an aggregate cost of $6.9 million. Shares repurchased under the program will be held in treasury for future use. Through February 16, 2012, a total of 820,894 shares have been repurchased at an aggregate cost of $25.2 million. In January 2012, the Company’s Board of Directors approved a quarterly cash dividend of $0.11 per share payable on March 1, 2012 to stockholders of record as of the close of business on February 16, 2012. Any future declaration and payment of dividends will be at the sole discretion of the Company’s Board of Directors. The Board of Directors may take into account such matters as general business conditions, the Company’s financial results, capital requirements, contractual, legal, and regulatory restrictions on the payment of dividends to the Company’s stockholders or by the Company’s subsidiaries to the parent and any such other factors as the Board of Directors may deem relevant. Effects of Inflation Because the majority of our assets are liquid in nature, they are not significantly affected by inflation. However, the rate of inflation may affect our expenses, such as employee compensation, office leasing costs and communications expenses, which may not be readily recoverable in the prices of our services. To the extent inflation results in rising interest rates and has other adverse effects on the securities markets, it may adversely affect our financial position and results of operations. Contractual Obligations and Commitments As of December 31, 2011, we had the following contractual obligations and commitments:
<table><tr><td></td><td colspan="5"> Payments due by period</td></tr><tr><td></td><td> Total</td><td> Less than 1 year</td><td> 1 - 3 years</td><td> 3 - 5 years</td><td> More than 5 years</td></tr><tr><td></td><td colspan="5"> (In thousands)</td></tr><tr><td>Operating leases</td><td>$19,551</td><td>$1,805</td><td>$3,546</td><td>$4,041</td><td>$10,159</td></tr><tr><td>Capital leases</td><td>700</td><td>336</td><td>364</td><td>—</td><td>—</td></tr><tr><td>Foreign currency forward contract</td><td>28,516</td><td>28,516</td><td>—</td><td>—</td><td>—</td></tr><tr><td></td><td>$48,767</td><td>$30,657</td><td>$3,910</td><td>$4,041</td><td>$10,159</td></tr></table>
We enter into foreign currency forward contracts with a non-controlling stockholder broker-dealer client to hedge the exposure to variability in foreign currency cash flows resulting from the net investment in our U. K. subsidiary. As of December 31, 2011, the notional value of the foreign currency forward contract outstanding was $28.7 million and the gross and net fair value asset was $0.2 million. As of December 31, 2011, we had unrecognized tax benefits of $3.6 million. Due to the nature of the underlying positions, it is not currently possible to schedule the future payment obligations by period. In January 2012, our Board of Directors approved a quarterly dividend to be paid to the holders of the outstanding shares of capital stock. A cash dividend of $0.11 per share of voting and non-voting common stock outstanding will be payable on March 1, 2012 to stockholders of record as of the close of business on February 16, 2012. We expect the total amount payable to be approximately $4.2 million. The following table presents our capital spend for 2015, 2016 and 2017 organized by the type of the spending as described above:
<table><tr><td></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>Nature of Capital Spend (in thousands)</td><td>2015</td><td>2016</td><td>2017</td></tr><tr><td>Real Estate:</td><td colspan="3"></td></tr><tr><td></td><td></td><td>Investment</td><td>$151,695</td></tr><tr><td>$133,079</td><td>$139,822</td><td>Maintenance</td><td>52,826</td></tr><tr><td>63,543</td><td>77,660</td><td>Total Real Estate Capital Spend</td><td>204,521</td></tr><tr><td>196,622</td><td>217,482</td><td>Non-Real Estate:</td><td></td></tr><tr><td></td><td></td><td>Investment</td><td>46,411</td></tr><tr><td>40,509</td><td>56,297</td><td>Maintenance</td><td>23,372</td></tr><tr><td>20,642</td><td>29,721</td><td>Total Non-Real Estate Capital Spend</td><td>69,783</td></tr><tr><td>61,151</td><td>86,018</td><td>Data Center Investment and Maintenance Capital Spend</td><td>20,624</td></tr><tr><td>72,728</td><td>92,597</td><td>Innovation and Growth Investment Capital Spend</td><td>—</td></tr><tr><td>8,573</td><td>20,583</td><td>Total Capital Spend (on accrual basis)</td><td>294,928</td></tr><tr><td>339,074</td><td>416,680</td><td>Net (decrease) increase in prepaid capital expenditures</td><td>-362</td></tr><tr><td>374</td><td>1,629</td><td>Net (increase) decrease accrued capital expenditures(1)</td><td>-4,317</td></tr><tr><td>-10,845</td><td>-75,178</td><td>Total Capital Spend (on cash basis)</td><td>$290,249</td></tr></table>
Non-Real Estate: (1) The amount at December 31, 2017 includes approximately $66,800 related to a capital lease associated with our data center in Manassas, Virginia. Competition We are a global leader in the physical storage and information management services industry with operations in 53 countries as of December 31, 2017. We compete with our current and potential customers' internal storage and information management services capabilities. We compete with numerous storage and information management services providers in every geographic area where we operate. The physical storage and information management services industry is highly competitive and includes thousands of competitors in North America and around the world. We believe that competition for records and information customers is based on price, reputation and reliability, quality and security of storage, quality of service and scope and scale of technology, and we believe we generally compete effectively in these areas. We also compete with numerous data center developers, owners and operators, many of whom own properties similar to ours in some of the same metropolitan areas where our facilities are located. We believe that competition for data center customers is based on available power, security considerations, location, connectivity and rental rates, and we believe we generally compete effectively in each of these areas. Alternative Technologies We derive most of our revenues from rental fees for the storage of physical records and computer backup tapes and from storage related services. Alternative storage technologies exist, many of which require significantly less space than physical documents and tapes, and as alternative technologies are adopted, storage related services may decline as the physical records or tapes we store become less active and more archived. While storage of physical documents continues to grow, we continue to provide, primarily through partnerships, additional services such as online backup, designed to address our customers' need for efficient, cost-effective, high-quality solutions for electronic records and storage and information management. Employees As of December 31, 2017, we employed more than 8,400 employees in the United States and more than 15,600 employees outside of the United States. At December 31, 2017, approximately 700 employees were represented by unions in North America (in California, Illinois, Georgia, New Jersey and Pennsylvania and three provinces in Canada) and approximately 3,600 employees were represented by unions in Latin America (in Argentina, Brazil and Chile). We use a measurement date of December 31 for plan assets and benefit obligations. A reconciliation of the changes in the projected benefit obligation for qualified pension, nonqualified pension and postretirement benefit plans as well as the change in plan assets for the qualified pension plan follows. Table 96: Reconciliation of Changes in Projected Benefit Obligation and Change in Plan Assets
<table><tr><td></td><td colspan="2">Qualified Pension</td><td colspan="2">Nonqualified Pension</td><td colspan="2">Postretirement Benefits</td></tr><tr><td>December 31 (Measurement Date) – in millions</td><td>2015</td><td>2014</td><td>2015</td><td>2014</td><td>2015</td><td>2014</td></tr><tr><td>Accumulated benefit obligation at end of year</td><td>$4,330</td><td>$4,427</td><td>$292</td><td>$316</td><td></td><td></td></tr><tr><td>Projected benefit obligation at beginning of year</td><td>$4,499</td><td>$3,966</td><td>$322</td><td>$292</td><td>$379</td><td>$375</td></tr><tr><td>Service cost</td><td>107</td><td>103</td><td>3</td><td>3</td><td>5</td><td>5</td></tr><tr><td>Interest cost</td><td>177</td><td>187</td><td>11</td><td>12</td><td>15</td><td>16</td></tr><tr><td>Plan amendments</td><td></td><td>-7</td><td></td><td></td><td></td><td></td></tr><tr><td>Actuarial (gains)/losses and changes in assumptions</td><td>-126</td><td>504</td><td>-10</td><td>40</td><td>-9</td><td>4</td></tr><tr><td>Participant contributions</td><td></td><td></td><td></td><td></td><td>5</td><td>8</td></tr><tr><td>Federal Medicare subsidy on benefits paid</td><td></td><td></td><td></td><td></td><td>2</td><td>2</td></tr><tr><td>Benefits paid</td><td>-260</td><td>-254</td><td>-28</td><td>-25</td><td>-28</td><td>-31</td></tr><tr><td>Settlement payments</td><td></td><td></td><td></td><td></td><td>-1</td><td></td></tr><tr><td>Projected benefit obligation at end of year</td><td>$4,397</td><td>$4,499</td><td>$298</td><td>$322</td><td>$368</td><td>$379</td></tr><tr><td>Fair value of plan assets at beginning of year</td><td>$4,357</td><td>$4,252</td><td></td><td></td><td></td><td></td></tr><tr><td>Actual return on plan assets</td><td>19</td><td>359</td><td></td><td></td><td></td><td></td></tr><tr><td>Employer contribution</td><td>200</td><td></td><td>$28</td><td>$25</td><td>$222</td><td>$21</td></tr><tr><td>Participant contributions</td><td></td><td></td><td></td><td></td><td>5</td><td>8</td></tr><tr><td>Federal Medicare subsidy on benefits paid</td><td></td><td></td><td></td><td></td><td>2</td><td>2</td></tr><tr><td>Benefits paid</td><td>-260</td><td>-254</td><td>-28</td><td>-25</td><td>-28</td><td>-31</td></tr><tr><td>Settlement payments</td><td></td><td></td><td></td><td></td><td>-1</td><td></td></tr><tr><td>Fair value of plan assets at end of year</td><td>$4,316</td><td>$4,357</td><td></td><td></td><td>$200</td><td></td></tr><tr><td>Funded status</td><td>$-81</td><td>$-142</td><td>$-298</td><td>$-322</td><td>$-168</td><td>$-379</td></tr><tr><td>Amounts recognized on the consolidated balance sheet</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Noncurrent asset</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Current liability</td><td></td><td></td><td>$-27</td><td>$-31</td><td>$-2</td><td>$-25</td></tr><tr><td>Noncurrent liability</td><td>$-81</td><td>$-142</td><td>-271</td><td>-291</td><td>-166</td><td>-354</td></tr><tr><td>Net amount recognized on the consolidated balance sheet</td><td>$-81</td><td>$-142</td><td>$-298</td><td>$-322</td><td>$-168</td><td>$-379</td></tr><tr><td>Amounts recognized in accumulated other comprehensive income consist of:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Prior service cost (credit)</td><td>$-13</td><td>$-22</td><td>$1</td><td>$1</td><td>$-3</td><td>$-4</td></tr><tr><td>Net actuarial loss</td><td>794</td><td>673</td><td>71</td><td>88</td><td>22</td><td>31</td></tr><tr><td>Amount recognized in AOCI</td><td>$781</td><td>$651</td><td>$72</td><td>$89</td><td>$19</td><td>$27</td></tr></table>
At December 31, 2015, the fair value of the qualified pension plan assets was less than both the accumulated benefit obligation and the projected benefit obligation. The nonqualified pension plan is unfunded. Contributions from PNC and, in the case of the postretirement benefit plans, participant contributions cover all benefits paid under the nonqualified pension plan and postretirement benefit plans. The postretirement plan provides benefits to certain retirees that are at least actuarially equivalent to those provided by Medicare Part D and accordingly, we receive a federal subsidy as shown in Table 96. In March 2010, the Patient Protection and Affordable Care Act (PPACA) was enacted. Key aspects of the PPACA which are reflected in our consolidated financial statements include the excise tax on high-cost health plans beginning in 2018 and fees for the Transitional Reinsurance Program and the PatientCentered Outcomes Research Institute. These provisions did not have a significant effect on our postretirement medical liability or costs. The Early Retiree Reinsurance Program (ERRP) was established by the PPACA. Congress appropriated funding of $5.0 billion for this temporary ERRP to provide financial assistance to employers, unions, and state and local governments to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare, including their spouses, surviving spouses, and dependents. PNC did not receive reimbursement in 2014 related to the 2013 plan year. The ERRP terminated effective January 1, 2014. In 2011, we transferred approximately 1.3 million shares of BlackRock Series C Preferred Stock to BlackRock in connection with our obligation. In 2013, we transferred an additional .2 million shares to BlackRock. At December 31, 2015, we held approximately 1.3 million shares of BlackRock Series C Preferred Stock which were available to fund our obligation in connection with the BlackRock LTIP programs. See Note 24 Subsequent Events for information on our February 1, 2016 transfer of 0.5 million shares of the Series C Preferred Stock to BlackRock to satisfy a portion of our LTIP obligation. PNC accounts for its BlackRock Series C Preferred Stock at fair value, which offsets the impact of marking-to-market the obligation to deliver these shares to BlackRock. The fair value of the BlackRock Series C Preferred Stock is included on our Consolidated Balance Sheet in the caption Other assets. Additional information regarding the valuation of the BlackRock Series C Preferred Stock is included in Note 7 Fair Value. NOTE 14 FINANCIAL DERIVATIVES We use derivative financial instruments (derivatives) primarily to help manage exposure to interest rate, market and credit risk and reduce the effects that changes in interest rates may have on net income, the fair value of assets and liabilities, and cash flows. We also enter into derivatives with customers to facilitate their risk management activities. Derivatives represent contracts between parties that usually require little or no initial net investment and result in one party delivering cash or another type of asset to the other party based on a notional amount and an underlying as specified in the contract. Derivative transactions are often measured in terms of notional amount, but this amount is generally not exchanged and it is not recorded on the balance sheet. The notional amount is the basis to which the underlying is applied to determine required payments under the derivative contract. The underlying is a referenced interest rate (commonly LIBOR), security price, credit spread or other index. Residential and commercial real estate loan commitments associated with loans to be sold also qualify as derivative instruments. |
2 | How many years does Euro sold for U.S. dollars stay higher than Japanese yen sold for U.S. dollars? | 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. |
888,182 | What is the total value of Pension and employee benefit obligations ,AFDC recorded in plant(a) ,Conservation programs(a) and Contract valuation adjustments(d) in 2006? (in thousand) | Liquidity and Capital Resources The following table presents selected financial information and statistics for each of the last three fiscal years (dollars in millions):
<table><tr><td></td><td>2004</td><td>2003</td><td>2002</td></tr><tr><td>Cash, cash equivalents, and short-term investments</td><td>$5,464</td><td>$4,566</td><td>$4,337</td></tr><tr><td>Accounts receivable, net</td><td>$774</td><td>$766</td><td>$565</td></tr><tr><td>Inventory</td><td>$101</td><td>$56</td><td>$45</td></tr><tr><td>Working capital</td><td>$4,375</td><td>$3,530</td><td>$3,730</td></tr><tr><td>Days sales in accounts receivable (DSO) (a)</td><td>30</td><td>41</td><td>36</td></tr><tr><td>Days of supply in inventory (b)</td><td>5</td><td>4</td><td>4</td></tr><tr><td>Days payables outstanding (DPO) (c)</td><td>76</td><td>82</td><td>77</td></tr><tr><td>Annual operating cash flow</td><td>$934</td><td>$289</td><td>$89</td></tr></table>
As of September 25, 2004, the Company had $5.464 billion in cash, cash equivalents, and short-term investments, an increase of $898 million over the same balances at the end of fiscal 2003. The principal components of this increase were cash generated by operating activities of $934 million and proceeds of $427 million from the issuance of common stock under stock plans, partially offset by cash used to repay the Company’s outstanding debt of $300 million and purchases of property, plant, and equipment of $176 million. The Company’s short-term investment portfolio is primarily invested in high credit quality, liquid investments. Approximately $3.2 billion of this cash, cash equivalents, and short-term investments are held by the Company’s foreign subsidiaries and would be subject to U. S. income taxation on repatriation to the U. S. The Company is currently assessing the impact of the one-time favorable foreign dividend provisions recently enacted as part of the American Jobs Creation Act of 2004, and may decide to repatriate earnings from some of its foreign subsidiaries. The Company believes its existing balances of cash, cash equivalents, and short-term investments will be sufficient to satisfy its working capital needs, capital expenditures, stock repurchase activity, outstanding commitments, and other liquidity requirements associated with its existing operations over the next 12 months. Debt In February 2004, the Company retired $300 million of debt outstanding in the form of 6.5% unsecured notes. The notes were originally issued in 1994 and were sold at 99.9925% of par for an effective yield to maturity of 6.51%. The Company currently has no long-term debt obligations. Capital Expenditures The Company’s total capital expenditures were $176 million during fiscal 2004, $104 million of which were for retail store facilities and equipment related to the Company’s Retail segment and $72 million of which were primarily for corporate infrastructure, including information systems enhancements and operating facilities enhancements and expansions. The Company currently anticipates it will utilize approximately $240 million for capital expenditures during 2005, approximately $125 million of which is expected to be utilized for further expansion of the Company’s Retail segment and the remainder utilized to support normal replacement of existing capital assets and enhancements to general information technology infrastructure. approved in 2006 has been used for the regulatory presentation and all the updated parameters were used for the 2005 ARO layer for SFAS No.143 recognition.16. Regulatory Assets and Liabilities Xcel Energy’s regulated businesses prepare their Consolidated Financial Statements in accordance with the provisions of SFAS No.71, as discussed in Note 1 to the Consolidated Financial Statements. Under SFAS No.71, regulatory assets and liabilities can be created for amounts that regulators may allow to be collected, or may require to be paid back to customers in future electric and natural gas rates. Any portion of Xcel Energy’s business that is not regulated cannot use SFAS No.71 accounting. If changes in the utility industry or the business of Xcel Energy no longer allow for the application of SFAS No.71 under GAAP, Xcel Energy would be required to recognize the write-off of regulatory assets and liabilities in its statement of income. The components of unamortized regulatory assets and liabilities of continuing operations shown on the balance sheet at Dec. 31 are:
<table><tr><td> </td><td> See Note(s)</td><td> Remaining Amortization Period</td><td> 2006</td><td> 2005</td></tr><tr><td> </td><td colspan="4"> (Thousands of Dollars)</td></tr><tr><td> Regulatory Assets</td><td></td><td></td><td></td><td></td></tr><tr><td>Pension and employee benefit obligations</td><td>9</td><td>Various</td><td>$475,815</td><td>$27,234</td></tr><tr><td>AFDC recorded in plant(a)</td><td></td><td>Plant lives</td><td>179,023</td><td>170,785</td></tr><tr><td>Conservation programs(a)</td><td></td><td>Various</td><td>124,123</td><td>111,429</td></tr><tr><td></td><td></td><td>Term of related</td><td></td><td></td></tr><tr><td>Contract valuation adjustments(d)</td><td>11</td><td>contract</td><td>109,221</td><td>111,639</td></tr><tr><td>Losses on reacquired debt</td><td>1</td><td>Term of related debt</td><td>74,420</td><td>84,290</td></tr><tr><td>Net asset retirement obligations(e)</td><td>1,14</td><td>Plant lives</td><td>54,550</td><td>171,170</td></tr><tr><td>Renewable resource costs</td><td></td><td>One to two years</td><td>49,902</td><td>50,453</td></tr><tr><td>Environmental costs</td><td>14,15</td><td>Generally four to six years</td><td>35,715</td><td>33,957</td></tr><tr><td>Unrecovered natural gas costs(c)</td><td>1</td><td>One to two years</td><td>17,943</td><td>12,998</td></tr><tr><td>Private fuel storage</td><td></td><td>Five years</td><td>14,473</td><td>—</td></tr><tr><td>State commission accounting adjustments(a)</td><td></td><td>Plant lives</td><td>13,950</td><td>14,460</td></tr><tr><td>Unrecovered electric production and MISO Day 2 costs</td><td>1</td><td>To be determined in future rate proceedings</td><td>11,014</td><td>6,634</td></tr><tr><td>Nuclear decommissioning costs(b)</td><td></td><td>To be determined in future rate proceedings</td><td>9,325</td><td>8,317</td></tr><tr><td>Rate case costs</td><td>1</td><td>Various</td><td>8,689</td><td>4,549</td></tr><tr><td>Other</td><td></td><td>Various</td><td>10,982</td><td>12,092</td></tr><tr><td>Total regulatory assets</td><td></td><td></td><td>$1,189,145</td><td>$820,007</td></tr><tr><td>Regulatory Liabilities</td><td></td><td></td><td></td><td></td></tr><tr><td>Plant removal costs</td><td>1,14</td><td></td><td>$920,583</td><td>$895,653</td></tr><tr><td>Pension and employee benefit obligations</td><td>9</td><td></td><td>196,803</td><td>397,261</td></tr><tr><td>Investment tax credit deferrals</td><td></td><td></td><td>78,205</td><td>84,437</td></tr><tr><td>Deferred income tax adjustments</td><td>1</td><td></td><td>67,002</td><td>75,171</td></tr><tr><td>Contract valuation adjustments(d)</td><td>11</td><td></td><td>56,745</td><td>99,734</td></tr><tr><td>Fuel costs, refunds and other</td><td></td><td></td><td>30,032</td><td>9,137</td></tr><tr><td>Electric fuel recovery refund</td><td></td><td></td><td>10,054</td><td>—</td></tr><tr><td>Interest on income tax refunds</td><td></td><td></td><td>5,233</td><td>6,031</td></tr><tr><td>Total regulatory liabilities</td><td></td><td></td><td>$1,364,657</td><td>$1,567,424</td></tr></table>
(a) Earns a return on investment in the ratemaking process. These amounts are amortized consistent with recovery in rates. (b) These costs do not relate to NSP-Minnesota’s nuclear plants. They relate to the DOE assessments, as discussed previously in Note 15. (c) Excludes current portion expected to be returned to customers within 12 months of $17.7 million and $16.3 million for 2006 and 2005, respectively. (d) Includes the fair value of certain long-term contracts used to meet native energy requirements. (e) Includes amounts recorded for future recovery of asset retirement obligations, less amounts recovered through nuclear decommissioning accruals and gains from decommissioning investments.
<table><tr><td> </td><td colspan="6"> Options</td></tr><tr><td> </td><td> Source of Fair Value</td><td> Maturity Less Than 1 Year</td><td> Maturity 1 to 3 Years</td><td> Maturity 4 to 5 Years</td><td> Maturity Greater Than 5 Years</td><td> Total Options Fair Value</td></tr><tr><td> </td><td colspan="6"> (Thousands of Dollars)</td></tr><tr><td>NSP-Minnesota</td><td>2</td><td>$514</td><td>$—</td><td>$—</td><td>$—</td><td>$514</td></tr><tr><td>PSCo</td><td>2</td><td>3,241</td><td>—</td><td>—</td><td>—</td><td>3,241</td></tr><tr><td>NSP-Wisconsin</td><td>2</td><td>20</td><td>—</td><td>—</td><td>—</td><td>20</td></tr><tr><td>Total Options Fair Value</td><td></td><td>$3,775</td><td>$—</td><td>$—</td><td>$—</td><td>$3,775</td></tr></table>
1 — Prices actively quoted or based on actively quoted prices.2 — Prices based on models and other valuation methods. These represent the fair value of positions calculated using internal models when directly and indirectly quoted external prices or prices derived from external sources are not available. Internal models incorporate the use of options pricing and estimates of the present value of cash flows based upon underlying contractual terms. The models reflect management’s estimates, taking into account observable market prices, estimated market prices in the absence of quoted market prices, the risk-free market discount rate, volatility factors, estimated correlations of commodity prices and contractual volumes. Market price uncertainty and other risks also are factored into the model. * — SPS conducts an inconsequential amount of commodity trading. Margins from commodity trading activity are partially redistributed to SPS, NSP-Minnesota, and PSCo, pursuant to the JOA approved by the FERC. As a result of the JOA, margins received pursuant to the JOA are reflected as part of the fair values by source for the commodity trading net asset or liability balances. Normal purchases and sales transactions, as defined by SFAS No.133 and certain other long-term power purchase contracts are not included in the fair values by source tables as they are not recorded at fair value as part of commodity trading operations and are not qualifying hedges. At Dec. 31, 2006, a 10-percent increase in market prices over the next 12 months for commodity trading contracts would increase pretax income from continuing operations by approximately $0.9 million, whereas a 10-percent decrease would decrease pretax income from continuing operations by approximately $1.1 million. Xcel Energy’s short-term wholesale and commodity trading operations measure the outstanding risk exposure to price changes on transactions, contracts and obligations that have been entered into, but not closed, using an industry standard methodology known as VaR. VaR expresses the potential change in fair value on the outstanding transactions, contracts and obligations over a particular period of time, with a given confidence interval under normal market conditions. Xcel Energy utilizes the variance/covariance approach in calculating VaR. The VaR model employs a 95-percent confidence interval level based on historical price movement, lognormal price distribution assumption, delta half-gamma approach for non-linear instruments and a three-day holding period for both electricity and natural gas. VaR is calculated on a consolidated basis. The VaRs for the commodity trading operations were:
<table><tr><td> </td><td> </td><td colspan="3"> During 2006</td></tr><tr><td> </td><td> Year ended Dec. 31, 2006</td><td> Average</td><td> High</td><td> Low</td></tr><tr><td> </td><td colspan="4"> (Millions of Dollars)</td></tr><tr><td>Commodity trading(a)</td><td>$0.49</td><td>$1.32</td><td>$2.60</td><td>$0.39</td></tr></table>
(a) Comprises transactions for NSP-Minnesota, PSCo and SPS. Interest Rate Risk — Xcel Energy and its subsidiaries are subject to the risk of fluctuating interest rates in the normal course of business. Xcel Energy’s policy allows interest rate risk to be managed through the use of fixed rate debt, floating rate debt and interest rate derivatives such as swaps, caps, collars and put or call options. Xcel Energy engages in hedges of cash flow and fair value exposure. The fair value of interest rate swaps designated as cash flow hedges is initially recorded in Other Comprehensive Income. Reclassification of unrealized gains or losses on cash flow hedges of variable rate debt instruments from Other Comprehensive Income into earnings occurs as interest payments are accrued on the debt instrument, and generally offsets the change in the interest accrued on the underlying variable rate debt. Hedges of fair value exposure are entered into to hedge the fair value of debt instruments. Changes in the derivative fair values that are designated as fair value hedges are recognized in earnings as offsets to the changes in fair values of debt instruments. To test the effectiveness of such swaps, a hypothetical swap is used to mirror all the critical terms of the underlying debt and regression analysis is utilized to assess the effectiveness of the actual swap at inception and on an ongoing basis. The fair value of interest rate swaps is determined through Dividend and Other Capital-Related Restrictions — Xcel Energy depends on its subsidiaries to pay dividends. All of Xcel Energy Inc. ’s utility subsidiaries’ dividends are subject to the FERC’s jurisdiction, which prohibits the payment of dividends out of capital accounts; payment of dividends is allowed out of retained earnings only. Due to certain restrictive covenants, Xcel Energy Inc. is required to be current on particular interest payments before dividends can be paid. The most restrictive dividend limitations for NSP-Minnesota, NSP-Wisconsin and SPS are imposed by their respective state regulatory commission. PSCo’s dividends are subject to the FERC’s jurisdiction under the Federal Power Act, which prohibits the payment of dividends out of capital accounts; payment of dividends is allowed out of retained earnings only. Only NSP-Minnesota has a first mortgage indenture which places certain restrictions on the amount of cash dividends it can pay to Xcel Energy Inc. , the holder of its common stock. Even with this restriction, NSP-Minnesota could have paid more than $1.7 billion in additional cash dividends to Xcel Energy Inc. at both Dec. 31, 2016 and 2015. NSP-Minnesota’s state regulatory commissions indirectly limit the amount of dividends NSP-Minnesota can pay by requiring an equity-to-total capitalization ratio between 46.9 percent and 57.3 percent. NSP-Minnesota’s equity-to-total capitalization ratio was 52.1 percent at Dec. 31, 2016 and $1.0 billion in retained earnings was not restricted. Total capitalization for NSP-Minnesota was $10.3 billion at Dec. 31, 2016, which did not exceed the limit of $10.75 billion. NSP-Wisconsin cannot pay annual dividends in excess of approximately $53.1 million if its calendar year average equity-to-total capitalization ratio is or falls below the state commission authorized level of 52.5 percent, as calculated consistent with PSCW requirements. NSP-Wisconsin’s calendar year average equity-to-total capitalization ratio calculated on this basis was 53.6 percent at Dec. 31, 2016 and $33.6 million in retained earnings was not restricted. SPS’ state regulatory commissions indirectly limit the amount of dividends that SPS can pay Xcel Energy Inc. by requiring an equityto-total capitalization ratio (excluding short-term debt) between 45.0 percent and 55.0 percent. In addition, SPS may not pay a dividend that would cause it to lose its investment grade bond rating. SPS’ equity-to-total capitalization ratio (excluding short-term debt) was 54.1 percent at Dec. 31, 2016 and $487 million in retained earnings was not restricted. The issuance of securities by Xcel Energy Inc. generally is not subject to regulatory approval. However, utility financings and certain intra-system financings are subject to the jurisdiction of the applicable state regulatory commissions and/or the FERC. As of Dec. 31, 2016: ? PSCo has authorization to issue up to an additional $2.2 billion of long-term debt and up to $800 million of short-term debt. ? SPS has authorization to issue up to $500 million of short-term debt and SPS will file for additional long-term debt authorization. ? NSP-Wisconsin has authorization to issue up to $150 million of short-term debt and NSPW will file for additional long-term debt authorization. ? NSP-Minnesota has authorization to issue long-term securities provided the equity-to-total capitalization ratio remains between 46.9 percent and 57.3 percent and to issue short-term debt provided it does not exceed 15 percent of total capitalization. Total capitalization for NSP-Minnesota cannot exceed $10.75 billion. Xcel Energy believes these authorizations are adequate and seeks additional authorization as necessary.5. Joint Ownership of Generation, Transmission and Gas Facilities Following are the investments by Xcel Energy Inc. ’s utility subsidiaries in jointly owned generation, transmission and gas facilities and the related ownership percentages as of Dec. 31, 2016: |
0.07944 | In the year with lowest amount of Sales Commissions, what's the increasing rate of Occupancy and Equipment? | Table of Contents Mac The following table presents Mac net sales and unit sales information for 2014, 2013 and 2012 (dollars in millions and units in thousands):
<table><tr><td></td><td> 2014</td><td> Change</td><td> 2013</td><td>Change</td><td> 2012</td></tr><tr><td>Net sales</td><td>$24,079</td><td>12%</td><td>$21,483</td><td>-7%</td><td>$23,221</td></tr><tr><td>Percentage of total net sales</td><td>13%</td><td></td><td>13%</td><td></td><td>15%</td></tr><tr><td>Unit sales</td><td>18,906</td><td>16%</td><td>16,341</td><td>-10%</td><td>18,158</td></tr></table>
The year-over-year growth in Mac net sales and unit sales for 2014 was primarily driven by increased sales of MacBook Air, MacBook Pro and Mac Pro. Mac net sales and unit sales increased in all of the Company’s operating segments. Mac ASPs decreased during 2014 compared to 2013 primarily due to price reductions on certain Mac models and a shift in mix towards Mac portable systems. Mac net sales and unit sales for 2013 were down or relatively flat in all of the Company’s operating segments. Mac ASPs increased slightly partially offsetting the impact of lower unit sales on net sales. The decline in Mac unit sales and net sales reflected the overall weakness in the market for personal computers. iTunes, Software and Services The following table presents net sales information of iTunes, Software and Services for 2014, 2013 and 2012 (dollars in millions):
<table><tr><td></td><td> 2014</td><td> Change</td><td> 2013</td><td> Change</td><td> 2012</td></tr><tr><td>iTunes, Software and Services</td><td>$18,063</td><td>13%</td><td>$16,051</td><td>25%</td><td>$12,890</td></tr><tr><td>Percentage of total net sales</td><td>10%</td><td></td><td>9%</td><td></td><td>8%</td></tr></table>
The increase in net sales of iTunes, Software and Services in 2014 compared to 2013 was primarily due to growth in net sales from the iTunes Store, AppleCare and licensing. The iTunes Store generated a total of $10.2 billion in net sales during 2014 compared to $9.3 billion during 2013. Growth in net sales from the iTunes Store was driven by increases in revenue from app sales reflecting continued growth in the installed base of iOS devices and the expanded offerings of iOS Apps and related in-App purchases. This was partially offset by a decline in sales of digital music. The increase in net sales of iTunes, Software and Services in 2013 compared to 2012 was primarily due to growth in net sales from the iTunes Store, AppleCare and licensing. The iTunes Store generated a total of $9.3 billion in net sales during 2013, a 24% increase from 2012. Growth in the iTunes Store, which includes the App Store, the Mac App Store and the iBooks Store, reflected continued growth in the installed base of iOS devices, expanded offerings of iOS Apps and related in-App purchases, and expanded offerings of iTunes digital content. Segment Operating Performance The Company manages its business primarily on a geographic basis. Accordingly, the Company determined its reportable operating segments, which are generally based on the nature and location of its customers, to be the Americas, Europe, Greater China, Japan, Rest of Asia Pacific and Retail. The Americas segment includes both North and South America. The Europe segment includes European countries, as well as India, the Middle East and Africa. The Greater China segment includes China, Hong Kong and Taiwan. The Rest of Asia Pacific segment includes Australia and Asian countries, other than those countries included in the Company’s other operating segments. The results of the Company’s geographic segments do not include results of the Retail segment. Each operating segment provides similar hardware and software products and similar services. Further information regarding the Company’s operating segments may be found in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 11, “Segment Information and Geographic Data. ” KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Noncontrolling interests also includes 138,015 convertible units issued during 2006, by the Company, which are valued at approximately $5.3 million, including a fair market value adjustment of $0.3 million, related to an interest acquired in an office building located in Albany, NY. These units are redeemable at the option of the holder after one year for cash or at the option of the Company for the Company’s common stock at a ratio of 1:1. The holder is entitled to a distribution equal to the dividend rate of the Company’s common stock. The Company is restricted from disposing of these assets, other than through a tax free transaction, until January 2017. The following table presents the change in the redemption value of the Redeemable noncontrolling interests for the year ended December 31, 2009 and December 31, 2008 (amounts in thousands):
<table><tr><td></td><td>2009</td><td>2008</td></tr><tr><td>Balance at January 1,</td><td>$115,853</td><td>$173,592</td></tr><tr><td>Unit redemptions</td><td>-14,889</td><td>-55,110</td></tr><tr><td>Fair market value amortization</td><td>-571</td><td>-2,524</td></tr><tr><td>Other</td><td>-89</td><td>-105</td></tr><tr><td>Balance at December 31,</td><td>$100,304</td><td>$115,853</td></tr></table>
16. Fair Value Disclosure of Financial Instruments: All financial instruments of the Company are reflected in the accompanying Consolidated Balance Sheets at amounts which, in management’s estimation based upon an interpretation of available market information and valuation methodologies, reasonably approximate their fair values except those listed below, for which fair values are reflected. The valuation method used to estimate fair value for fixed-rate and variable-rate debt and noncontrolling interests relating to mandatorily redeemable noncontrolling interests associated with finite-lived subsidiaries of the Company is based on discounted cash flow analyses, with assumptions that include credit spreads, loan amounts and debt maturities. The fair values for marketable securities are based on published or securities dealers’ estimated market values. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition. The following are financial instruments for which the Company’s estimate of fair value differs from the carrying amounts (in thousands):
<table><tr><td></td><td>December 31, 2009 Carrying Amounts</td><td>Estimated Fair Value</td><td>2008 Carrying Amounts</td><td>Estimated Fair Value</td></tr><tr><td>Marketable Securities</td><td>$209,593</td><td>$204,006</td><td>$258,174</td><td>$218,786</td></tr><tr><td>Notes Payable</td><td>$3,000,303</td><td>$3,099,139</td><td>$3,440,819</td><td>$2,766,187</td></tr><tr><td>Mortgages Payable</td><td>$1,388,259</td><td>$1,377,224</td><td>$847,491</td><td>$838,503</td></tr><tr><td>Construction Payable</td><td>$45,821</td><td>$44,725</td><td>$268,337</td><td>$262,485</td></tr><tr><td>Mandatorily Redeemable Noncontrolling Interests(termination dates ranging from 2019 – 2027)</td><td>$2,768</td><td>$5,256</td><td>$2,895</td><td>$5,444</td></tr></table>
The Company has certain financial instruments that must be measured under the FASB’s Fair Value Measurements and Disclosures guidance, including: available for sale securities, convertible notes and derivatives. The Company currently does not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis. As a basis for considering market participant assumptions in fair value measurements, the FASB’s Fair Value Measurements and Disclosures guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Net interest on the stock loan/borrow business decreased 38% due to decreased rates and balances despite a focus on hard-to-locate securities. Other interest revenue and expense include earnings on corporate cash and inventory balances, and interest expense on overnight borrowings, our senior notes issued in August, 2009 and the mortgage on our headquarters facility. Results of Operations - Private Client Group The following table presents consolidated financial information for our PCG segment for the years indicated:
<table><tr><td></td><td colspan="5">Year Ended</td></tr><tr><td></td><td>September 30, 2009</td><td>% Incr. (Decr.)</td><td>September 30, 2008</td><td>% Incr. (Decr.)</td><td>September 30, 2007</td></tr><tr><td></td><td colspan="5">($ in 000's)</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Securities Commissions and Fees</td><td>$ 1,262,810</td><td>-18%</td><td>$ 1,532,290</td><td>5%</td><td>$ 1,462,323</td></tr><tr><td>Interest</td><td>65,589</td><td>-72%</td><td>233,801</td><td>-28%</td><td>326,601</td></tr><tr><td>Financial Service Fees</td><td>125,038</td><td>-2%</td><td>127,304</td><td>16%</td><td>110,056</td></tr><tr><td>Other</td><td>104,025</td><td>-2%</td><td>106,380</td><td>20%</td><td>88,502</td></tr><tr><td>Total Revenues</td><td>1,557,462</td><td>-22%</td><td>1,999,775</td><td>1%</td><td>1,987,482</td></tr><tr><td>Interest Expense</td><td>14,891</td><td>-89%</td><td>141,474</td><td>-32%</td><td>208,537</td></tr><tr><td>Net Revenues</td><td>1,542,570</td><td>-17%</td><td>1,858,301</td><td>4%</td><td>1,778,945</td></tr><tr><td>Non-Interest Expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Sales Commissions</td><td>929,202</td><td>-19%</td><td>1,144,727</td><td>6%</td><td>1,082,457</td></tr><tr><td>Admin & Incentive Comp and Benefit Costs</td><td>279,666</td><td>-4%</td><td>289,937</td><td>15%</td><td>251,684</td></tr><tr><td>Communications and Information Processing</td><td>58,607</td><td>-2%</td><td>59,753</td><td>7%</td><td>55,822</td></tr><tr><td>Occupancy and Equipment</td><td>79,072</td><td>8%</td><td>73,253</td><td>18%</td><td>61,961</td></tr><tr><td>Business Development</td><td>55,488</td><td>-15%</td><td>64,992</td><td>12%</td><td>57,816</td></tr><tr><td>Clearance and Other</td><td>55,951</td><td>18%</td><td>47,369</td><td>1%</td><td>46,983</td></tr><tr><td>Total Non-Interest Expenses</td><td>1,457,986</td><td>-13%</td><td>1,680,031</td><td>8%</td><td>1,556,723</td></tr><tr><td>Income Before Taxes and Minority Interest</td><td>84,584</td><td>-53%</td><td>178,270</td><td>-20%</td><td>222,222</td></tr><tr><td>Minority Interest</td><td>-289</td><td></td><td>124</td><td></td><td>-148</td></tr><tr><td>Pre-tax Income</td><td>$ 84,873</td><td>-52%</td><td>$ 178,146</td><td>-20%</td><td>$ 222,370</td></tr><tr><td>Margin on Net Revenues</td><td>5.5%</td><td></td><td>9.6%</td><td></td><td>12.5%</td></tr></table>
Year ended September 30, 2009 Compared with the Year ended September 30, 2008 - Private Client Group PCG revenues were 22% below the prior year, reflecting the impact of the extremely challenging economic and market conditions. Commission revenue decreased $269 million, or 18%, from the prior year, with the majority of that decrease experienced by our domestic independent contractor operation. Commissions in RJ&A PCG declined only $45 million, or 9%, due to the recruitment of 219 employee financial advisors in fiscal 2009 (for a net increase of 94) and 184 in fiscal 2008 (for a net increase of 114). It generally takes newly recruited financial advisors up to two years to reach their previous production levels. Average production per employee financial advisor decreased to $417,000 in fiscal 2009, down 19% from the $515,000 attained in fiscal 2008. The recruitment of above-average producers did not overcome the negative impact that the steep market decline had on our private clients’ investing activities. RJFS and RJFSA recruited 559 independent contractor financial advisors in fiscal 2009 (for a net increase of 129). Independent contractor financial advisor average production decreased from $330,000 in fiscal 2008 to $273,000 in fiscal 2009, impacted, like RJ&A, by the challenging economic and market conditions. |
26.5 | What was the average value of the International Funds in the years where Federal Money Market Funds is positive for Total? (in million) | Entergy Texas, Inc. Management's Financial Discussion and Analysis 361 Fuel and purchased power expenses increased primarily due to an increase in power purchases as a result of the purchased power agreements between Entergy Gulf States Louisiana and Entergy Texas and an increase in the average market prices of purchased power and natural gas, substantially offset by a decrease in deferred fuel expense as a result of decreased recovery from customers of fuel costs. Other regulatory charges increased primarily due to an increase of $6.9 million in the recovery of bond expenses related to the securitization bonds. The recovery became effective July 2007. See Note 5 to the financial statements for additional information regarding the securitization bonds.2007 Compared to 2006 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 2007 to 2006.
<table><tr><td></td><td>Amount (In Millions)</td></tr><tr><td>2006 net revenue</td><td>$403.3</td></tr><tr><td>Purchased power capacity</td><td>13.1</td></tr><tr><td>Securitization transition charge</td><td>9.9</td></tr><tr><td>Volume/weather</td><td>9.7</td></tr><tr><td>Transmission revenue</td><td>6.1</td></tr><tr><td>Base revenue</td><td>2.6</td></tr><tr><td>Other</td><td>-2.4</td></tr><tr><td>2007 net revenue</td><td>$442.3</td></tr></table>
The purchased power capacity variance is due to changes in the purchased power capacity costs included in the calculation in 2007 compared to 2006 used to bill generation costs between Entergy Texas and Entergy Gulf States Louisiana. The securitization transition charge variance is due to the issuance of securitization bonds. As discussed above, in June 2007, EGSRF I, a company wholly-owned and consolidated by Entergy Texas, issued securitization bonds and with the proceeds purchased from Entergy Texas the transition property, which is the right to recover from customers through a transition charge amounts sufficient to service the securitization bonds. See Note 5 to the financial statements herein for details of the securitization bond issuance. The volume/weather variance is due to increased electricity usage on billed retail sales, including the effects of more favorable weather in 2007 compared to the same period in 2006. The increase is also due to an increase in usage during the unbilled sales period. Retail electricity usage increased a total of 139 GWh in all sectors. See "Critical Accounting Estimates" below and Note 1 to the financial statements for further discussion of the accounting for unbilled revenues. The transmission revenue variance is due to an increase in rates effective June 2007 and new transmission customers in late 2006. The base revenue variance is due to the transition to competition rider that began in March 2006. Refer to Note 2 to the financial statements for further discussion of the rate increase. Gross operating revenues, fuel and purchased power expenses, and other regulatory charges Gross operating revenues decreased primarily due to a decrease of $179 million in fuel cost recovery revenues due to lower fuel rates and fuel refunds. The decrease was partially offset by the $39 million increase in net revenue described above and an increase of $44 million in wholesale revenues, including $30 million from the System Agreement cost equalization payments from Entergy Arkansas. The receipt of such payments is being Noble Energy, Inc. Notes to Consolidated Financial Statements Additional fair value disclosures about plan assets are as follows:
<table><tr><td></td><td colspan="4">Fair Value Measurements Using</td></tr><tr><td>Asset Category</td><td>Quoted Prices inActive Markets forIdentical Assets(Level 1)(1)</td><td>SignificantObservable Inputs(Level 2)(1)</td><td>SignificantUnobservable Inputs(Level 3)(1)</td><td>Total</td></tr><tr><td>(millions)</td><td></td><td></td><td></td><td></td></tr><tr><td>December 31, 2011</td><td></td><td></td><td></td><td></td></tr><tr><td>Federal Money Market Funds</td><td>$1</td><td>$-</td><td>$-</td><td>$1</td></tr><tr><td>Mutual Funds</td><td></td><td></td><td></td><td></td></tr><tr><td>Large Cap Funds</td><td>66</td><td>-</td><td>-</td><td>66</td></tr><tr><td>Mid Cap Funds</td><td>10</td><td>-</td><td>-</td><td>10</td></tr><tr><td>Blended Funds</td><td>6</td><td>-</td><td>-</td><td>6</td></tr><tr><td>Emerging Markets Funds</td><td>6</td><td>-</td><td>-</td><td>6</td></tr><tr><td>Fixed Income Funds</td><td>77</td><td>-</td><td>-</td><td>77</td></tr><tr><td>Common Collective Trust Funds</td><td></td><td></td><td></td><td></td></tr><tr><td>Large Cap Funds</td><td>-</td><td>17</td><td>-</td><td>17</td></tr><tr><td>Small Cap Funds</td><td>-</td><td>12</td><td>-</td><td>12</td></tr><tr><td>International Funds</td><td>-</td><td>24</td><td>-</td><td>24</td></tr><tr><td>Total</td><td>$166</td><td>$53</td><td>$-</td><td>$219</td></tr><tr><td>December 31, 2010</td><td></td><td></td><td></td><td></td></tr><tr><td>Federal Money Market Funds</td><td>$2</td><td>$-</td><td>$-</td><td>$2</td></tr><tr><td>Mutual Funds</td><td></td><td></td><td></td><td></td></tr><tr><td>Large Cap Funds</td><td>69</td><td>-</td><td>-</td><td>69</td></tr><tr><td>Mid Cap Funds</td><td>10</td><td>-</td><td>-</td><td>10</td></tr><tr><td>Blended Funds</td><td>6</td><td>-</td><td>-</td><td>6</td></tr><tr><td>Emerging Markets Funds</td><td>7</td><td>-</td><td>-</td><td>7</td></tr><tr><td>Fixed Income Funds</td><td>55</td><td>-</td><td>-</td><td>55</td></tr><tr><td>Common Collective Trust Funds</td><td></td><td></td><td></td><td></td></tr><tr><td>Large Cap Funds</td><td>-</td><td>16</td><td>-</td><td>16</td></tr><tr><td>Small Cap Funds</td><td>-</td><td>12</td><td>-</td><td>12</td></tr><tr><td>International Funds</td><td>-</td><td>29</td><td>-</td><td>29</td></tr><tr><td>Total</td><td>$149</td><td>$57</td><td>$-</td><td>$206</td></tr></table>
(1) See Note 1. Summary of Significant Accounting Policies - Fair Value Measurements for a description of the fair value hierarchy. Additional information about plan assets, including methods and assumptions used to estimate the fair values of plan assets, is as follows: Federal Money Market Funds Investments in federal money market funds consist of portfolios of high quality fixed income securities (such as US Treasury securities) which, generally, have maturities of less than one year. The fair value of these investments is based on quoted market prices for identical assets as of the measurement date. Mutual Funds Investments in mutual funds consist of diversified portfolios of common stocks and fixed income instruments. The common stock mutual funds are diversified by market capitalization and investment style as well as economic sector and industry. The fixed income mutual funds are diversified primarily in government bonds, mortgage backed securities, and corporate bonds, most of which are rated investment grade. The fair values of these investments are based on quoted market prices for identical assets as of the measurement date. Common Collective Trust Funds Investments in common collective trust funds consist of common stock investments in both US and non-US equity markets. Portfolios are diversified by market capitalization and investment style as well as economic sector and industry. The investments in the non-US equity markets are used to further enhance the plan’s overall equity diversification which is expected to moderate the plan’s overall risk volatility. In addition to the normal risk associated with stock market investing, investments in foreign equity markets may carry additional political, regulatory, and currency risk which is taken into account by the committee in its deliberations. The fair value of these investments is based on quoted prices for similar assets in active markets. All of the investments in common collective trust funds represent exchange-traded securities with readily observable prices. Risk Management The oil and gas business is subject to many significant risks, including operational, strategic, financial and compliance/ regulatory risks. We strive to maintain a proactive enterprise risk management (ERM) process to plan, organize, and control our activities in a manner which is intended to minimize the effects of risk on our capital, cash flows and earnings. ERM expands our process to include risks associated with accidental losses, as well as operational, strategic, financial, compliance/regulatory, and other risks. Our ERM process is designed to operate in an annual cycle, integrated with our long range plans, and supportive of our capital structure planning. Elements include, among others, cash flow at risk analysis, credit risk management, a commodity hedging program to reduce the impacts of commodity price volatility, an insurance program to protect against disruptions in our cash flows, a robust global compliance program, and government and community relations initiatives. We benchmark our program against our peers and other global organizations. See Item 1A. Risk Factors for a discussion of specific risks we face in our business. Available Information Our website address is www. nobleenergyinc. com. Available on this website under “Investors – SEC Filings,” free of charge, are our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, Forms 3, 4 and 5 filed on behalf of directors and executive officers and amendments to those reports as soon as reasonably practicable after such materials are electronically filed with or furnished to the SEC. Alternatively, you may access these reports at the SEC’s website at www. sec. gov. Also posted on our website under “About Us – Corporate Governance”, and available in print upon request made by any stockholder to the Investor Relations Department, are charters for our Audit Committee, Compensation, Benefits and Stock Option Committee, Corporate Governance and Nominating Committee, and Environment, Health and Safety Committee. Copies of the Code of Conduct and the Code of Ethics for Chief Executive and Senior Financial Officers (the Codes) are also posted on our website under the “Corporate Governance” section. Within the time period required by the SEC and the NYSE, as applicable, we will post on our website any modifications to the Codes and any waivers applicable to senior officers as defined in the applicable Code, as required by the Sarbanes-Oxley Act of 2002. Item 1A. Risk Factors Described below are certain risks that we believe are applicable to our business and the oil and gas industry in which we operate. There may be additional risks that are not presently material or known. You should carefully consider each of the following risks and all other information set forth in this Annual Report on Form 10-K. If any of the events described below occur, our business, financial condition, results of operations, cash flows, liquidity or access to the capital markets could be materially adversely affected. In addition, the current global economic and political environment intensifies many of these risks. We are currently experiencing a severe downturn in the oil and gas business cycle, and an extended or more severe downturn could have material adverse effects on our operations, our liquidity, and the price of our common stock. Our ability to operate profitably, maintain adequate liquidity, grow our business and pay dividends on our common stock depend highly upon the prices we receive for our crude oil, natural gas, and NGL production. Commodity prices are volatile. Crude oil prices, in particular, began to decline significantly in the fourth quarter 2014, declined further in 2015 and have continued to trade at a low level or decline further thus far in 2016. High and low monthly daily average prices for crude oil and high and low contract expiration prices for natural gas for the last three years and into 2016 were as follows:
<table><tr><td></td><td rowspan="2">Jan. 1 - Feb.12, 2016</td><td colspan="3">Year Ended December 31,</td></tr><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>NYMEX</td><td></td><td></td><td></td><td></td></tr><tr><td>Crude Oil - WTI (per Bbl) High<sup>(1)</sup></td><td>$31.78</td><td>$59.83</td><td>$105.15</td><td>$110.53</td></tr><tr><td>Crude Oil - WTI (per Bbl) Low<sup>(1)</sup></td><td>29.71</td><td>37.33</td><td>59.29</td><td>86.68</td></tr><tr><td>Natural Gas - HH (Per MMbtu) High</td><td>2.23</td><td>3.19</td><td>5.56</td><td>4.46</td></tr><tr><td>Natural Gas - HH (Per MMbtu) Low</td><td>2.05</td><td>2.03</td><td>3.73</td><td>3.11</td></tr><tr><td>Brent</td><td></td><td></td><td></td><td></td></tr><tr><td>Crude Oil - (per Bbl) High</td><td>32.80</td><td>64.32</td><td>111.76</td><td>118.90</td></tr><tr><td>Crude Oil - (per Bbl) Low</td><td>31.93</td><td>38.21</td><td>62.91</td><td>97.69</td></tr></table> |
143,139.5 | What's the average of Capital leases of Carrying amount in 2003 and 2002? (in Thousand) | impairment of long-lived assets based on the projection of undiscounted cash flows whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded value of the assets, the assets are written down to their estimated fair values (see Note 5). ASSET RETIREMENT OBLIGATIONS—Effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards (‘‘SFAS’’) No.143, ‘‘Accounting for Asset Retirement Obligations. ’’ SFAS No.143 requires the Company 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 the Company 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, the Company settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The Company’s retirement obligations covered by SFAS No.143 include primarily active ash landfills, water treatment basins and the removal or dismantlement of certain plant and equipment. As of December 31, 2003 and 2002, the Company had recorded liabilities of approximately $29 million and $15 million, respectively, related to asset retirement obligations. There are no assets that are legally restricted for purposes of settling asset retirement obligations. Upon adoption of SFAS No.143, the Company recorded 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. Amounts recorded related to asset retirement obligations during the years ended December 31, 2003 were as follows (in millions):
<table><tr><td>Balance at December 31, 2002</td><td>$15</td></tr><tr><td>Additional liability recorded from cumulative effect of accounting change</td><td>13</td></tr><tr><td>Accretion expense</td><td>2</td></tr><tr><td>Change in the timing of estimated cash flows</td><td>-1</td></tr><tr><td>Balance at December 31, 2003</td><td>$29</td></tr></table>
Proforma net (loss) income and (loss) earnings per share have not been presented for the years ended December 31, 2002 and 2001 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. Had SFAS 143 been applied during all periods presented the asset retirement obligation at January 1, 2001, December 31, 2001 and December 31, 2002 would have been approximately $21 million, $23 million and $28 million, respectively. Included in other long-term liabilities is the accrual for the non-legal obligations for removal of assets in service at IPALCO amounting to $361 million and $339 million at December 31, 2003 and 2002, respectively. DEFERRED FINANCING COSTS—Financing costs are deferred and amortized over the related financing period using the effective interest method or the straight-line method when it does not differ materially from the effective interest method. Deferred financing costs are shown net of accumulated amortization of $202 million and $173 million as of December 31, 2003 and 2002, respectively. PROJECT DEVELOPMENT COSTS—The Company capitalizes the costs of developing new construction projects after achieving certain project-related milestones that indicate the project’s completion is probable. These costs represent amounts incurred for professional services, permits, options, capitalized interest, and other costs directly related to construction. These costs are transferred to construction in progress when significant construction activity commences, or expensed at the time the Company determines that development of a particular project is no longer probable (see Note 5). We review and assess operating performance using segment revenues and operating income before interest, taxes and minority interest. These performance measures include the allocation of expenses to the operating segments based on management judgment. Prior to the third quarter of 2003, we had two reportable segments: the Core Products and Foundry Services segments. Primarily as a result of the formation of FASL LLC, we reevaluated our reportable segments. Beginning in the third quarter of 2003, we changed our reportable segments to: the Computation Products segment, which includes microprocessor products for desktop and mobile PCs, servers and workstations and chipset products, and the Memory Products segment, which includes Flash memory products. We believe that separate reporting of these operating segments, given our new focus on FASL LLC as a separate operating company and its separate market brand—Spansion, provides more useful information to our stockholders. In addition to our reportable segments, we also have the All Other category that is not a reportable segment, but rather it includes other small operating segments that are neither individually nor in the aggregate greater than ten percent of our consolidated revenues or assets. This category also includes certain operating expenses and credits that are not allocated to the operating segments. Prior period segment information has been reclassified to conform to the current period presentation. However, as FASL LLC did not exist prior to June 30, 2003, the results of operations for prior periods did not include the consolidation of FASL LLC’s operations. Accordingly, the segment operating information for the Memory Products segment for the year ended December 28, 2003, is not fully comparable to the reclassified segment information for all prior periods presented. We use a 52- to 53-week fiscal year ending on the last Sunday in December. The years ended December 28, 2003, December 29, 2002, and December 30, 2001, each included 52 weeks. The following is a summary of our net sales for 2003, 2002 and 2001.
<table><tr><td></td><td> 2003</td><td> 2002</td><td> 2001</td></tr><tr><td></td><td colspan="3"> (Millions)</td></tr><tr><td>Computation Products</td><td>$1,960</td><td>$1,756</td><td>$2,466</td></tr><tr><td>Memory Products</td><td>1,419</td><td>741</td><td>1,133</td></tr><tr><td>All Other</td><td>140</td><td>200</td><td>293</td></tr><tr><td>Total</td><td>$3,519</td><td>$2,697</td><td>$3,892</td></tr></table>
Net Sales Comparison for Years Ended December 28, 2003 and December 29, 2002 Total net sales of $3,519 million in 2003 increased 30 percent compared to net sales of $2,697 million in 2002. Computation Products net sales of $1,960 million in 2003 increased 12 percent compared to net sales of $1,756 million in 2002. The increase in net sales was primarily due to a 15 percent increase in microprocessor unit shipments due primarily to increased demand from our OEM customers, partially offset by a decline of four percent in the average selling prices of our microprocessor products. Unit shipment growth was particularly strong in Latin America and China, which accounted for 77 percent of overall unit growth. Memory Products net sales of $1,419 million in 2003 increased 92 percent compared to net sales of $741 million in 2002. The increase in net sales was primarily attributable to the effect of consolidating FASL LLC’s results of operations, which include FASL LLC’s sales to Fujitsu, and increased demand for Flash memory products. Further quantification of the breakdown in the increase in net sales is not practical due to the reorganization of geographical sales territories between AMD and Fujitsu. All Other net sales of $140 million in 2003 decreased 30 percent compared to net sales of $200 million in 2002 and consisted primarily of net sales of our Personal Connectivity Solutions products. The decrease was due We recorded an income tax provision of $3 million in 2003, an income tax provision of $45 million in 2002 and an income tax benefit of $14 million in 2001. The income tax provision in 2003 primarily reflected income tax expense generated in certain foreign tax jurisdictions, offset by a benefit of a U. S. federal tax refund from a carryback claim we filed in 2003. No net tax benefit was recorded in 2003 on pre-tax losses due to continuing operating losses. Our tax provision for 2003 does not reflect an increase in our net deferred tax liability of approximately $46 million. This net deferred tax liability was recognized by the Japanese subsidiary of FASL LLC, FASL JAPAN, as tax expense in periods prior to our consolidation of FASL LLC on June 30, 2003, and therefore has not been recorded as a component of our tax expense for 2003. The 2002 income tax provision was recorded primarily for taxes due on income generated in certain state and foreign tax jurisdictions. No tax benefit was recorded in 2002 on pre-tax losses due to the establishment of a valuation allowance against the remainder of our U. S. deferred tax assets, net of U. S. deferred tax liabilities in the fourth quarter, due to the incurrence of continuing substantial operating losses in the U. S. The effective benefit rate of 15.4 percent for 2001 was less than the statutory rate because of a lower than U. S. statutory 24 percent tax benefit rate on the 2001 restructuring charges, reflecting the allocation of the charges between the U. S. and foreign lower-taxed jurisdictions, and a provision for U. S. taxes on certain previously undistributed earnings of lower-taxed foreign subsidiaries. Other Items International sales as a percent of net sales were 80 percent in 2003, compared to 73 percent in 2002 and 67 percent in 2001. During 2003, approximately 15 percent of our net sales were denominated in currencies other than the U. S. dollar, primarily the Japanese yen, as compared to one percent during 2002. The increase was primarily due to the consolidation of FASL LLC’s results of operations, which include sales by FASL LLC to Fujitsu, which are denominated in yen. Our foreign exchange risk exposure resulting from these sales is partially mitigated as a result of our yen-denominated manufacturing costs. In addition, we are subject to foreign currency risk related to our manufacturing costs in Fab 30, which are denominated in euros. We use foreign currency forward and option contracts to reduce our exposure to the euro, but future exchange rate fluctuations may cause increases or decreases to our Fab 30 manufacturing costs. The impact on our operating results from changes in foreign currency rates individually and in the aggregate has not been material, principally as a result of our foreign currency hedging activities. Comparison of Operating Income (Loss) The following is a summary of operating income (loss) for 2003, 2002 and 2001:
<table><tr><td></td><td>2003</td><td>2002</td><td>2001</td></tr><tr><td></td><td colspan="3">(Millions)</td></tr><tr><td>Computation Products</td><td>$-23</td><td>$-661</td><td>$-191</td></tr><tr><td>Memory Products</td><td>-189</td><td>-159</td><td>268</td></tr><tr><td>All Other</td><td>-21</td><td>-405</td><td>-135</td></tr><tr><td>Total</td><td>$-233</td><td>$-1,225</td><td>$-58</td></tr></table>
Computation Products operating loss of $23 million in 2003 improved by $638 million compared to $661 million in 2002. The improvement was primarily due to incremental net sales of $204 million and a decrease in both manufacturing costs of $330 million and marketing, general and administrative expenses of $39 million, which resulted primarily from our cost reduction initiatives and the 2002 Restructuring Plan. In addition, cooperative advertising and marketing expenses decreased by $55 million from 2002. Computation Products operating loss of $661 million in 2002 increased by $470 million compared to $191 million in 2001 primarily due to a decrease in net sales. The decrease was primarily due to a decline in average selling prices of 13 percent and a decline in unit sales of 16 percent for microprocessors as a result of the sustained downturn in the PC industry. The amortized cost and estimated fair value of available-for-sale marketable securities at December 28, 2003, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties. The Company does not have any available-for-sale marketable securities with maturities greater than five years from December 28, 2003.
<table><tr><td></td><td> Amortized Cost</td><td> Estimated Fair Value</td></tr><tr><td></td><td colspan="2"> (thousands)</td></tr><tr><td>Due in one year or less</td><td>$119,105</td><td>$119,191</td></tr><tr><td>Due after one year through five years</td><td>8,387</td><td>8,372</td></tr><tr><td>Total</td><td>$127,492</td><td>$127,563</td></tr></table>
The Company realized net gains from the sale of available-for-sale securities of $3.7 million and $5.3 million in 2003 and 2002, and net losses of $1.6 million in 2001. At December 28, 2003 and December 29, 2002, the Company had approximately $12 million and $13 million of investments classified as held to maturity, consisting of commercial paper and treasury notes used for long-term workers’ compensation and leasehold deposits, that are included in other assets. The fair market value of these investments approximates their cost at December 28, 2003 and December 29, 2002. The compensating balance of $218 million at December 28, 2003 represents the minimum cash balance that AMD Saxony must maintain pursuant to the terms of the Dresden Loan Agreements (see Notes 7 and 12). Included in other current assets is $22 million of restricted cash associated with the advance receipt of interest subsidies from the Federal Republic of Germany and the State of Saxony. Restrictions over the Company’s access to the restricted cash will lapse as the Company incurs qualifying interest expense on the Dresden term loans (see Notes 7 and 12) over the next four quarters. Fair Value of Other Financial Instruments. The Company estimates the fair value of its debt instruments using a discounted cash flow analysis based on estimated interest rates for similar types of currently available instruments with similar remaining maturities. The carrying amounts and estimated fair values of the Company’s debt instruments are as follows:
<table><tr><td></td><td colspan="2"> 2003</td><td colspan="2"> 2002</td></tr><tr><td></td><td> Carrying amount</td><td> Estimated Fair Value</td><td> Carrying amount</td><td> Estimated Fair Value</td></tr><tr><td></td><td colspan="4"> (Thousands)</td></tr><tr><td>Notes payable to banks</td><td>$—</td><td>$—</td><td>$913</td><td>$913</td></tr><tr><td>Long-term debt and capital leases:</td><td></td><td></td><td></td><td></td></tr><tr><td>Capital leases</td><td>245,958</td><td>244,641</td><td>40,321</td><td>37,229</td></tr><tr><td>Long-term debt (excluding capital leases)</td><td>1,846,982</td><td>1,846,982</td><td>1,599,734</td><td>1,599,734</td></tr><tr><td>Total long-term debt and capital leases</td><td>2,092,940</td><td>2,091,623</td><td>1,640,055</td><td>1,636,963</td></tr><tr><td>Less: current portion</td><td>193,266</td><td>192,725</td><td>71,348</td><td>70,192</td></tr><tr><td>Total long-term debt and capital leases, less current portion</td><td>$1,899,674</td><td>$1,898,898</td><td>$1,568,707</td><td>$1,566,771</td></tr></table>
The fair value of the Company’s accounts receivable and accounts payable approximate book value based on existing payment terms. |
-0.08333 | what is the percentage change in rent expenses for operating leases in 2010 compare to 2009? | The Company has also encountered various quality issues on its aircraft carrier construction and overhaul programs and its Virginia-class submarine construction program at its Newport News location. These primarily involve matters related to filler metal used in pipe welds identified in 2007, and issues associated with non-nuclear weld inspection and the installation of weapons handling equipment on certain submarines, and certain purchased material quality issues identified in 2009. The Company does not believe that resolution of these issues will have a material effect upon its consolidated financial position, results of operations or cash flows. Environmental Matters—The estimated cost to complete environmental remediation has been accrued where it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party (“PRP”) by the Environmental Protection Agency, or similarly designated by another environmental agency, and these costs can be estimated by management. These accruals do not include any litigation costs related to environmental matters, nor do they include amounts recorded as asset retirement obligations. To assess the potential impact on the Company’s consolidated financial statements, management estimates the range of reasonably possible remediation costs that could be incurred by the Company, taking into account currently available facts on each site as well as the current state of technology and prior experience in remediating contaminated sites. These estimates are reviewed periodically and adjusted to reflect changes in facts and technical and legal circumstances. Management estimates that as of December 31, 2011, the probable future costs for environmental remediation is $3 million, which is accrued in other current liabilities. Factors that could result in changes to the Company’s estimates include: modification of planned remedial actions, increases or decreases in the estimated time required to remediate, changes to the determination of legally responsible parties, discovery of more extensive contamination than anticipated, changes in laws and regulations affecting remediation requirements, and improvements in remediation technology. Should other PRPs not pay their allocable share of remediation costs, the Company may have to incur costs exceeding those already estimated and accrued. In addition, there are certain potential remediation sites where the costs of remediation cannot be reasonably estimated. Although management cannot predict whether new information gained as projects progress will materially affect the estimated liability accrued, management does not believe that future remediation expenditures will have a material effect on the Company’s consolidated financial position, results of operations or cash flows. Financial Arrangements—In the ordinary course of business, HII uses standby letters of credit issued by commercial banks and surety bonds issued by insurance companies principally to support the Company’s self-insured workers’ compensation plans. At December 31, 2011, there were $121 million of standby letters of credit issued but undrawn and $297 million of surety bonds outstanding related to HII. U. S. Government Claims—From time to time, the U. S. Government advises the Company of claims and penalties concerning certain potential disallowed costs. When such findings are presented, the Company and U. S. Government representatives engage in discussions to enable HII to evaluate the merits of these claims as well as to assess the amounts being claimed. The Company does not believe that the outcome of any such matters will have a material effect on its consolidated financial position, results of operations or cash flows. Collective Bargaining Agreements—The Company believes that it maintains good relations with its approximately 38,000 employees of which approximately 50% are covered by a total of 10 collective bargaining agreements. The Company expects to renegotiate renewals of each of its collective bargaining agreements between 2013 and 2015 as they approach expiration. Collective bargaining agreements generally expire after three to five years and are subject to renegotiation at that time. It is not expected that the results of these negotiations, either individually or in the aggregate, will have a material effect on the Company’s consolidated results of operations. Operating Leases—Rental expense for operating leases was $44 million in 2011, $44 million in 2010, and $48 million in 2009. These amounts are net of immaterial amounts of sublease rental income. Minimum rental commitments under longterm non-cancellable operating leases for the next five years and thereafter are:
<table><tr><td>2012</td><td>$21</td></tr><tr><td>2013</td><td>17</td></tr><tr><td>2014</td><td>15</td></tr><tr><td>2015</td><td>13</td></tr><tr><td>2016</td><td>10</td></tr><tr><td>Thereafter</td><td>48</td></tr><tr><td>Total</td><td>$124</td></tr></table>
10. GOODWILL AND OTHER PURCHASED INTANGIBLE ASSETS Goodwill HII performs impairment tests for goodwill as of November 30 of each year, or when evidence of potential impairment exists. Goodwill is tested for impairment between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company’s reporting units below their carrying value. In light of the adverse equity market conditions that began in the second quarter of 2011 and the resultant decline in industry market multiples and its market capitalization, the Company performed an interim goodwill impairment analysis as of September 30, 2011. The analysis resulted in a $290 million non-cash goodwill impairment charge recorded in the Company’s Ingalls segment in 2011. Due to the complexities involved in determining the implied fair value of the goodwill of each reporting unit, the Company initially recorded a preliminary goodwill impairment charge of $300 million in the third quarter of 2011, which represented its best estimate of the impairment amount at the time of the filing of the Company’s third quarter report. The goodwill impairment charge was later adjusted to $290 million in the fourth quarter of 2011, based on the final impairment analysis. The goodwill at these businesses has no tax basis, and, accordingly, there was no tax benefit associated with recording the impairment charge. No goodwill impairment was recognized at the Newport News segment, as the Company’s analysis indicated its fair value was in excess of its carrying value as of September 30, 2011. The Company performed its annual goodwill impairment testing as of November 30, 2011, and determined that no further impairment was necessary, as the testing indicated the fair value of each reporting unit exceeded its corresponding carrying value. Accumulated goodwill impairment losses at December 31, 2011 and 2010, were $2,780 million and $2,490 million, respectively. The accumulated goodwill impairment losses at December 31, 2011 and 2010, for Ingalls were $1,568 million and $1,278 million, respectively. The accumulated goodwill impairment losses at both December 31, 2011 and 2010, for Newport News were $1,212 million. Prior to completing the second step related to the goodwill impairment charge in 2011, HII tested its purchased intangible assets and other long-lived assets for impairment, and the carrying values of these assets were determined not to be impaired. The changes in the carrying amounts of goodwill during 2011 and 2010 were as follows:
<table><tr><td> ($ in millions)</td><td>Ingalls</td><td> Newport News</td><td>Total</td></tr><tr><td>Balance as of December 31, 2009</td><td>$488</td><td>$646</td><td>$1,134</td></tr><tr><td>Balance as of December 31, 2010</td><td>488</td><td>646</td><td>1,134</td></tr><tr><td>Goodwill impairment</td><td>-290</td><td>0</td><td>-290</td></tr><tr><td> Balance as of December 31, 2011</td><td>$198</td><td>$646</td><td>$844</td></tr></table>
Purchased Intangible Assets The following table summarizes the Company’s aggregate purchased intangible assets, all of which are contract or program related intangible assets:
<table><tr><td></td><td colspan="2">December 31</td></tr><tr><td> ($ in millions)</td><td>2011</td><td>2010</td></tr><tr><td>Gross carrying amount</td><td>$939</td><td>$939</td></tr><tr><td>Accumulated amortization</td><td>-372</td><td>-352</td></tr><tr><td>Net carrying amount</td><td>$567</td><td>$587</td></tr></table>
The Company’s purchased intangible assets other than goodwill are subject to amortization on a straight-line basis over an aggregate weighted-average period of 40 years. Remaining unamortized intangible assets consist principally of amounts pertaining to nuclear-powered aircraft carrier and submarine intangibles whose useful lives have been estimated based on the long life cycle of the related programs. Amortization expense for the years ended December 31, 2011, 2010 and 2009, was $20 million, $23 million and $30 million, respectively.
<table><tr><td></td><td colspan="4">December 31, 2017</td></tr><tr><td>($ in millions)</td><td>Total</td><td>Level 1</td><td>Level 2</td><td>Level 3</td></tr><tr><td>Plan assets subject to leveling</td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. and international equities</td><td>$1,270</td><td>$1,270</td><td>$—</td><td>$—</td></tr><tr><td>Government and agency debt securities</td><td>409</td><td>—</td><td>409</td><td>—</td></tr><tr><td>Corporate and other debt securities</td><td>1,287</td><td>—</td><td>1,287</td><td>—</td></tr><tr><td>Group annuity contract</td><td>3</td><td>—</td><td>3</td><td>—</td></tr><tr><td>Cash and cash equivalents, net</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net plan assets subject to leveling</td><td>$2,969</td><td>$1,270</td><td>$1,699</td><td>$—</td></tr><tr><td>Plan assets not subject to leveling</td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. and international equities (a)</td><td>2,012</td><td></td><td></td><td></td></tr><tr><td>Corporate and other debt securities</td><td>165</td><td></td><td></td><td></td></tr><tr><td>Real estate investments</td><td>279</td><td></td><td></td><td></td></tr><tr><td>Private partnerships</td><td>16</td><td></td><td></td><td></td></tr><tr><td>Hedge funds</td><td>281</td><td></td><td></td><td></td></tr><tr><td>Cash and cash equivalents, net (b)</td><td>115</td><td></td><td></td><td></td></tr><tr><td>Total plan assets not subject to leveling</td><td>2,868</td><td></td><td></td><td></td></tr><tr><td>Net plan assets</td><td>$5,837</td><td></td><td></td><td></td></tr></table>
(a) U. S. and international equity securities include investments in small, medium, and large capitalization stocks of public companies held in commingled trust funds. (b) Cash and cash equivalents are liquid short-term investment funds and include net receivables and payables of the trust. These funds are available for immediate use to fund daily operations, execute investment policies, and serve as a temporary investment vehicle. The master trust limits the use of derivatives through direct or separate account investments, such that the derivatives used are liquid and able to be readily valued in the market. Derivative usage in separate account structures is primarily for gaining market exposure in an unlevered manner or hedging investment risks. The fair market value of the pension master trust's derivatives through direct or separate account investments resulted in a net asset of approximately $4 million and a net liability of $1 million as of December 31, 2018 and 2017, respectively. There was no activity attributable to Level 3 retirement plan assets during the years ended December 31, 2018 and 2017.18. STOCK COMPENSATION PLANS As of December 31, 2018, HII had stock-based compensation awards outstanding under the following plans: the Huntington Ingalls Industries, Inc. 2011 Long-Term Incentive Stock Plan (the "2011 Plan") and the Huntington Ingalls Industries, Inc. 2012 Long-Term Incentive Stock Plan (the "2012 Plan"). Stock Compensation Plans On March 23, 2012, the Company's board of directors adopted the 2012 Plan, subject to stockholder approval, and the Company's stockholders approved the 2012 Plan on May 2, 2012. Award grants made on or after May 2, 2012, were made under the 2012 Plan. Award grants made prior to May 2, 2012, were made under the 2011 Plan. No future grants will be made under the 2011 Plan. |
79 | What is the sum of Other in 2005 and Bond trading securities, at fair value of Asset Management in 2008? (in million) | American International Group, Inc. and Subsidiaries Financial Services Operations AlG's Financial Services subsidiaries engage in diversified activi- ties including aircraft and equipment leasing, capital markets, consumer finance and insurance premium finance. Financial Services Results Financial Services results for 2006,2005 and 2004 were as follows:
<table><tr><td><i>(in millions)</i></td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Revenues<i><sup>(a)</sup></i>:</td><td></td><td></td><td></td></tr><tr><td>Aircraft Leasing<i><sup>(b)</sup></i></td><td>$4,143</td><td>$3,578</td><td>$3,136</td></tr><tr><td>Capital Markets<i><sup>(c)(d)</sup></i></td><td>-186</td><td>3,260</td><td>1,278</td></tr><tr><td>Consumer Finance<i><sup>(e)</sup></i></td><td>3,819</td><td>3,613</td><td>2,978</td></tr><tr><td>Other</td><td>234</td><td>74</td><td>103</td></tr><tr><td>Total</td><td>$8,010</td><td>$10,525</td><td>$7,495</td></tr><tr><td colspan="2">Operating income (loss)<i><sup>(a)</sup></i>:</td><td></td><td></td></tr><tr><td>Aircraft Leasing</td><td>$639</td><td>$679</td><td>$642</td></tr><tr><td>Capital Markets<i><sup>(d)</sup></i></td><td>-873</td><td>2,661</td><td>662</td></tr><tr><td>Consumer Finance<i><sup>(f)</sup></i></td><td>761</td><td>876</td><td>786</td></tr><tr><td>Other, includingintercompany adjustments<i><sup>(g)</sup></i></td><td>-3</td><td>60</td><td>90</td></tr><tr><td>Total</td><td>$524</td><td>$4,276</td><td>$2,180</td></tr></table>
(a) Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains and osses. For 2006,2005 and 2004, respectively, the effect was $(1.8) billion,$2.0 billion and $(122) million in both revenues and operating income for Capital Markets. These amounts result primarily from interest rate and foreign currency derivatives that are economicaly hedging available for sale securities and borrowings. For 2004, the effect was $(27) million in operating income for Aircrat Leasing. During 2006 and 2005, Aircraft Leasing derivative gains and losses were reported as part of AlG's Other category, and were not reported in Aircraft Leasing operating income. (b) Revenues are primarily aircraft lease rentals from ILFC. (cC) Revenues, shown net of interest expense of $3.2 bilion,$3.0 bilion and $2.3 bilion, in 2006,2005 and 2004, respectively, were primarily from hedged financial positions entered into in connection with counterparty transactions and the effect of hedging activities that did not quality for hedge accounting treatment under FAS 133 described n (a) above. (d) Certain transactions entered into by AIGFP generate tax credits and benefits which are included in income taxes in the consolidated statement of income. The amounts of such tax credits and benefits fod the years ended December 31,2006,2005 and 2004, respectively. are $50 million,$67 milion and $107 million. (e) Revenues are primarily fimance charges. () includes catastrophe-related losses of $62 milion recorded in the third quarter of 2005 resulting from hurricane Katrina, which were reduced by $35 milion in 2006 due to the reevaluation of the remaining estimated los ses. (g) Includes specific reserves recorded during 2006 in the amount of $42 millon related to two commercial lending trans actions. Financial Services operating income decreased in 2006 com- pared to 2005 and increased in 2005 compared to 2004, due primarily to the effect of hedging activities that did not qualify for hedge accounting under FAS 133. AIG is reinstituting hedge accounting in the first quarter of 2007 for AlGFP and later in 2007 for the balance of the Financial Services operations. Aircraft Leasing AlG's Aircraft Leasing operations represent the operations of ILFC, which generates its revenues primarily from leasing new and used commercial jet aircraft to foreign and domestic airlines. Revenues also result from the remarketing of commercial jets for ILFC's own account, and remarketing and fleet management services for airlines and financial institutions. ILFC finances its purchases of aircraft primarily through the issuance of a variety of debt instruments. The composite borrowing rates at December 31, 2006 and 2005 were 5.17 percent and 4.61 percent, respec- tively. The composite borrowing rates did not reflect the benefit of economically hedging ILFC's floating rate and foreign currency denominated debt using interest rate and foreign currency deriva tives. These derivatives are effective economic hedges; however, since hedge accounting under FAS 133 was not applied, the benefits of using derivatives to hedge these exposures were not reflected in ILFC's borrowing rates. ILFC's sources of revenue are principally from scheduled and charter airlines and companies associated with the airline indus- try. The airline industry is sensitive to changes in economic conditions and is cyclical and highly competitive. Airlines and related companies may be affected by political or economic instability, terrorist activities, changes in national policy, competi- tive pressures on certain air carriers, fuel prices and shortages, labor stoppages, insurance costs, recessions, world health issues and other political or economic events adversely affecting world or regonal trading markets. ILFC is exposed to operating loss and liquidity strain through nonperformance of aircraft lessees, through owning aircraft which it would be unable to sell or re-lease at acceptable rates at lease expiration and, in part, through committing to purchase aircraft which it would be unable to lease. ILFC’s revenues and operating income may be adversely affected by the volatile competitive environment in which its customers operate. ILFC manages the risk of nonperformance by its lessees with security deposit requirements, repossession rights, overhaul requirements and close monitoring of industry conditions through its marketing force. However, there can be no assurance that ILFC would be able to successfully manage the risks relating to the effect of possible future deterioration in the airline industry. Approximately 90 percent of ILFC’s ?eet is leased to non-U. S. carriers, and the ?eet, comprised of the most ef?cient aircraft in the airline industry, continues to be in high demand from such carriers. ILFC typically contracts to re-lease aircraft before the end of the existing lease term. For aircraft returned before the end of the lease term, ILFC has generally been able to re-lease such aircraft within two to six months of its return. As a lessor, ILFC considers an aircraft ‘‘idle’’ or ‘‘off lease’’ when the aircraft is not subject to a signed lease agreement or signed letter of intent. ILFC had one aircraft off lease at December 31, 2006, and all new aircraft scheduled for delivery through 2007 have been leased. Management formally reviews regularly, and no less frequently than quarterly, issues affecting ILFC’s ?eet, including events and circumstances that may cause impairment of aircraft values. Management evaluates aircraft in the ?eet as necessary based on American International Group, Inc. and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations Continued
<table><tr><td colspan="2"></td><td>Life Insurance &</td><td colspan="4"></td></tr><tr><td></td><td>General</td><td>Retirement</td><td>Financial</td><td>Asset</td><td colspan="2"></td></tr><tr><td><i>(in millions)</i></td><td>Insurance</td><td>Services</td><td>Services</td><td>Management</td><td>Other</td><td>Total</td></tr><tr><td>2006</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Fixed maturities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Bonds available for sale, at fair value</td><td>$67,994</td><td>$288,018</td><td>$1,357</td><td>$29,500</td><td>$—</td><td>$386,869</td></tr><tr><td>Bonds held to maturity, at amortized cost</td><td>21,437</td><td>—</td><td>—</td><td>—</td><td>—</td><td>21,437</td></tr><tr><td>Bond trading securities, at fair value</td><td>1</td><td>10,835</td><td>—</td><td>—</td><td>—</td><td>10,836</td></tr><tr><td>Equity securities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Common stocks available for sale, at fair value</td><td>4,245</td><td>8,705</td><td>—</td><td>226</td><td>80</td><td>13,256</td></tr><tr><td>Common stocks trading, at fair value</td><td>350</td><td>14,505</td><td>—</td><td>—</td><td>—</td><td>14,855</td></tr><tr><td>Preferred stocks available for sale, at fair value</td><td>1,884</td><td>650</td><td>5</td><td>—</td><td>—</td><td>2,539</td></tr><tr><td>Mortgage and other loans receivable, net of allowance</td><td>17</td><td>21,043</td><td>2,398</td><td>4,884</td><td>76</td><td>28,418</td></tr><tr><td>Financial services assets:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Flight equipment primarily under operating leases, net of accumulated depreciation</td><td>—</td><td>—</td><td>39,875</td><td>—</td><td>—</td><td>39,875</td></tr><tr><td>Securities available for sale, at fair value</td><td>—</td><td>—</td><td>47,205</td><td>—</td><td>—</td><td>47,205</td></tr><tr><td>Trading securities, at fair value</td><td>—</td><td>—</td><td>5,031</td><td>—</td><td>—</td><td>5,031</td></tr><tr><td>Spot commodities</td><td>—</td><td>—</td><td>220</td><td>—</td><td>—</td><td>220</td></tr><tr><td>Unrealized gain on swaps, options and forward transactions</td><td>—</td><td>—</td><td>19,607</td><td>—</td><td>-355</td><td>19,252</td></tr><tr><td>Trade receivables</td><td>—</td><td>—</td><td>4,317</td><td>—</td><td>—</td><td>4,317</td></tr><tr><td>Securities purchased under agreements to resell, at contract value</td><td>—</td><td>—</td><td>30,291</td><td>—</td><td>—</td><td>30,291</td></tr><tr><td>Finance receivables, net of allowance</td><td>—</td><td>—</td><td>29,573</td><td>—</td><td>—</td><td>29,573</td></tr><tr><td>Securities lending invested collateral, at fair value</td><td>5,376</td><td>50,099</td><td>76</td><td>13,755</td><td>—</td><td>69,306</td></tr><tr><td>Other invested assets</td><td>9,207</td><td>13,962</td><td>2,212</td><td>13,198</td><td>3,532</td><td>42,111</td></tr><tr><td>Short-term investments, at cost</td><td>3,281</td><td>15,192</td><td>2,807</td><td>6,198</td><td>5</td><td>27,483</td></tr><tr><td>Total investments and financial services assets as shown on the balance sheet</td><td>113,792</td><td>423,009</td><td>184,974</td><td>67,761</td><td>3,338</td><td>792,874</td></tr><tr><td>Cash</td><td>334</td><td>740</td><td>390</td><td>118</td><td>8</td><td>1,590</td></tr><tr><td>Investment income due and accrued</td><td>1,363</td><td>4,378</td><td>23</td><td>326</td><td>1</td><td>6,091</td></tr><tr><td>Real estate, net of accumulated depreciation</td><td>570</td><td>698</td><td>17</td><td>75</td><td>26</td><td>1,386</td></tr><tr><td>Total invested assets<i><sup>(a)(b)</sup></i></td><td>$116,059</td><td>$428,825</td><td>$185,404</td><td>$68,280</td><td>$3,373</td><td>$801,941</td></tr></table>
(a) Certain reclassifications and format changes have been made to prior period amounts to conform to the current period presentation. (b) At December 31, 2006, approximately 68 percent and 32 percent of invested assets were held in domestic and foreign investments, respectively. Investment Strategy AIG’s investment strategies are tailored to the speci?c business needs of each operating unit. The investment objectives are driven by the business model for each of the businesses: General Insurance, Life Insurance, Retirement Services and Asset Manage-ment’s Spread-Based Investment business. The primary objectives are in terms of preservation of capital, growth of surplus and generation of investment income to support the insurance products. At the local operating unit level, the strategies are based on considerations that include the local market, liability duration and cash ?ow characteristics, rating agency and regula- tory capital considerations, legal investment limitations, tax optimization and diversi?cation. In addition to local risk manage-ment considerations, AIG’s corporate risk management guidelines impose limitations on concentrations to promote diversi?cation by industry, asset class and geographic sector. American International Group, Inc. , and Subsidiaries resulted in a benefit to the surplus of the domestic and foreign General Insurance companies of $114 million and $859 million, respectively, and did not affect compliance with minimum regulatory capital requirements. As discussed under Item 3. Legal Proceedings, various regulators have commenced investigations into certain insurance business practices. In addition, the OTS and other regulators routinely conduct examinations of AIG and its subsidiaries, including AIG’s consumer finance operations. AIG cannot predict the ultimate effect that these investigations and examinations, or any additional regulation arising therefrom, might have on its business. Federal, state or local legislation may affect AIG’s ability to operate and expand its various financial services businesses, and changes in the current laws, regulations or interpretations thereof may have a material adverse effect on these businesses. AIG’s U. S. operations are negatively affected under guarantee fund assessment laws which exist in most states. As a result of operating in a state which has guarantee fund assessment laws, a solvent insurance company may be assessed for certain obligations arising from the insolvencies of other insurance companies which operated in that state. AIG generally records these assessments upon notice. Additionally, certain states permit at least a portion of the assessed amount to be used as a credit against a company’s future premium tax liabilities. Therefore, the ultimate net assessment cannot reasonably be estimated. The guarantee fund assessments net of credits recognized in 2008, 2007 and 2006, respectively, were $8 million, $87 million and $97 million. AIG is also required to participate in various involuntary pools (principally workers’ compensation business) which provide insurance coverage for those not able to obtain such coverage in the voluntary markets. This participation is also recorded upon notification, as these amounts cannot reasonably be estimated. A substantial portion of AIG’s General Insurance business and a majority of its Life Insurance & Retirement Services business are conducted in foreign countries. The degree of regulation and supervision in foreign jurisdictions varies. Generally, AIG, as well as the underwriting companies operating in such jurisdictions, must satisfy local regulatory requirements. Licenses issued by foreign authorities to AIG subsidiaries are subject to modification and revocation. Thus, AIG’s insurance subsidiaries could be prevented from conducting future business in certain of the jurisdictions where they currently operate. AIG’s international operations include operations in various developing nations. Both current and future foreign operations could be adversely affected by unfavorable political developments up to and including nationalization of AIG’s operations without compensation. Adverse effects resulting from any one country may affect AIG’s results of operations, liquidity and financial condition depending on the magnitude of the event and AIG’s net financial exposure at that time in that country. Foreign insurance operations are individually subject to local solvency margin requirements that require maintenance of adequate capitalization, which AIG complies with by country. In addition, certain foreign locations, notably Japan, have established regulations that can result in guarantee fund assessments. These have not had a material effect on AIG’s financial condition or results of operations. Investments Investments by Segment The following tables summarize the composition of AIG’s investments by segment:
<table><tr><td></td><td> General Insurance</td><td> Life Insurance & Retirement Services</td><td> Financial Services</td><td> Asset Management</td><td> Other</td><td> Total</td></tr><tr><td></td><td colspan="6"> (In millions)</td></tr><tr><td> At December 31, 2008</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Fixed maturity securities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Bonds available for sale, at fair value</td><td>$85,791</td><td>$262,824</td><td>$1,971</td><td>$12,284</td><td>$172</td><td>$363,042</td></tr><tr><td>Bond trading securities, at fair value</td><td>—</td><td>6,296</td><td>26,848</td><td>5</td><td>4,099</td><td>37,248</td></tr><tr><td>Securities lending invested collateral, at fair value</td><td>790</td><td>3,054</td><td>—</td><td>—</td><td>—</td><td>3,844</td></tr></table>
Business Separation Costs On 16 September 2015, the Company announced that it intends to separate its Materials Technologies business via a spin-off. During the fourth quarter, we incurred legal and other advisory fees of $7.5 ($.03 per share). Gain on Previously Held Equity Interest On 30 December 2014, we acquired our partner’s equity ownership interest in a liquefied atmospheric industrial gases production joint venture in North America for $22.6 which increased our ownership from 50% to 100%. The transaction was accounted for as a business combination, and subsequent to the acquisition, the results are consolidated within our Industrial Gases – Americas segment. The assets acquired, primarily plant and equipment, were recorded at their fair value as of the acquisition date. The acquisition date fair value of the previously held equity interest was determined using a discounted cash flow analysis under the income approach. During the first quarter of 2015, we recorded a gain of $17.9 ($11.2 after-tax, or $.05 per share) as a result of revaluing our previously held equity interest to fair value as of the acquisition date. Advisory Costs During the fourth quarter of 2013, we incurred legal and other advisory fees of $10.1 ($6.4 after-tax, or $.03 per share) in connection with our response to the rapid acquisition of a large position in shares of our common stock by Pershing Square Capital Management LLC and its affiliates. Other Income (Expense), Net Items recorded to other income (expense), net arise from transactions and events not directly related to our principal income earning activities. The detail of other income (expense), net is presented in Note 24, Supplemental Information, to the consolidated financial statements.2015 vs. 2014 Other income (expense), net of $47.3 decreased $5.5. The current year includes a gain of $33.6 ($28.3 after-tax, or $.13 per share) resulting from the sale of two parcels of land. The gain was partially offset by unfavorable foreign exchange impacts and lower gains on other sales of assets and emissions credits. No other individual items were significant in comparison to the prior year.2014 vs. 2013 Other income (expense), net of $52.8 decreased $17.4, primarily due to higher gains from the sale of a number of small assets and investments, higher government grants, and a favorable commercial contract settlement in 2013. Otherwise, no individual items were significant in comparison to 2013. |
10,687 | At December 31, 2015,what is the Gross Unrealized Gains for Total corporate securities? (in million) | Performance Graph The annual changes for the period shown December 1, 2013 (when our ordinary shares began trading) to December 31, 2017 in the graph on this page are based on the assumption that $100 had been invested in Allegion plc ordinary shares, the Standard & Poor’s 500 Stock Index ("S&P 500") and the Standard & Poor's 400 Capital Goods Index ("S&P 400 Capital Goods") on December 1, 2013, and that all quarterly dividends were reinvested. The total cumulative dollar returns shown on the graph represent the value that such investments would have had on December 31, 2017.
<table><tr><td></td><td>December 1, 2013</td><td>December 31, 2013</td><td>December 31, 2014</td><td>December 31, 2015</td><td>December 31, 2016</td><td>December 31, 2017</td></tr><tr><td>Allegion plc</td><td>100.00</td><td>102.20</td><td>129.03</td><td>154.37</td><td>150.97</td><td>189.19</td></tr><tr><td>S&P 500</td><td>100.00</td><td>102.53</td><td>116.57</td><td>118.18</td><td>132.31</td><td>161.20</td></tr><tr><td>S&P 400 Capital Goods</td><td>100.00</td><td>104.58</td><td>104.84</td><td>99.07</td><td>130.70</td><td>162.97</td></tr></table>
associated with foreign exchange remeasurement on assets that were transferred under the new structure in Gibraltar Life and will be recognized in earnings over time as these assets mature or are sold. See “—Results of Operations by Segment—International Insurance Division” above. These gains were partially offset by OTTI of $97 million. Net gains on sales and maturities of fixed maturity securities of $736 million in 2014 were primarily due to sales and maturities of U. S. dollar-denominated securities within our International Insurance segment. These gains were partially offset by OTTI of $36 million. See below for information regarding the OTTI of fixed maturity securities in 2015 and 2014. Net realized gains on equity securities were $4 million and $81 million for the years ended 2015 and 2014, respectively, primarily driven by gains on sales within our International Insurance segment. These gains were partially offset by OTTI of $111 million and $26 million for the years ended 2015 and 2014, respectively. See below for additional information regarding the OTTI of equity securities in 2015 and 2014. Net realized gains on commercial mortgage and other loans for the year ended 2015 were $36 million, primarily driven by servicing revenue of $31 million in our Asset Management business and a net decrease in the allowance for losses of $5 million. Net realized gains on commercial mortgage and other loans were $79 million for the year ended 2014 were primarily driven by a net decrease in the allowance for losses of $65 million, including the impact of assumption updates. For additional information regarding our commercial mortgage and other allowance for losses, see “—General Account Investments—Commercial Mortgage and Other Loans—Commercial Mortgage and Other Loan Quality” below. Net realized gains on derivatives were $1,775 million in 2015, compared to net realized losses of $445 million in 2014. The net gains in 2015 primarily reflect $995 million of gains on product related embedded derivatives and related hedge positions mainly associated with certain variable annuity contracts, $326 million of gains on interest rate derivatives used to manage duration as interest rates decreased, $345 million of gains on foreign currency derivatives used to hedge foreign denominated investments as the U. S. dollar strengthened against various currencies, and $159 million of gains primarily representing fees earned on fee-based synthetic guaranteed investment contracts (“GICs”) which are accounted for as derivatives. The net derivative losses in 2014 primarily reflect net losses of $2,627 million on product related embedded derivatives and related hedge positions mainly associated with certain variable annuity contracts. Also, contributing were net losses of $500 million on foreign currency derivatives used to hedge portfolio assets in our Japan business, primarily due to the weakening of the Japanese yen against the U. S. dollar and other currencies. These losses were partially offset by gains of $1,502 million on interest rate derivatives used to manage duration as long-term interest rates decreased, $869 million gains on other foreign currency derivatives primarily associated with hedges of portfolio assets in our U. S. business and hedges of future income of non-U. S. businesses (predominantly in Japan) as the U. S. dollar strengthened against various currencies, and $166 million gains of fees earned on fee-based synthetic GICs. Net realized losses within other investments were $54 million in 2015 primarily driven by OTTI of $121 million on investments in limited partnerships, partially offset by gains of $40 million, on sales of real estate. Net realized gains on other investments were $7 million in 2014 and included net gains of $28 million, primarily from our Asset Management and International Insurance segments, partially offset by OTTI of $21 million on real estate and joint ventures and partnership investments. Related adjustments include the portions of “Realized investment gains (losses), net” that are included in adjusted operating income and the portions of “Other income” and “Net investment income” that are excluded from adjusted operating income. These adjustments are made to arrive at “Realized investment gains (losses), net, and related adjustments” which are excluded from adjusted operating income. Results for 2015 include net negative related adjustments of $934 million driven by settlements on interest rate and currency derivatives. Results for 2014 included net negative related adjustments of $4,063 million driven by the impact of foreign currency exchange rate movements on certain non-yen denominated assets and liabilities within our Japan insurance operations and by settlements on interest rate and currency derivatives. We implemented a structure in Gibraltar Life, effective for financial reporting beginning in the first quarter of 2015, which has minimized volatility in reported U. S. GAAP earnings arising from foreign currency remeasurement. For additional information, see “—Results of Operations by Segment—International Insurance Division” above. Charges that relate to “Realized investment gains (losses), net” are also excluded from adjusted operating income, and may be reflected as net charges or net benefits. Results for 2015 include net related charges of $679 million, compared to net related charges of $542 million in 2014. Both periods’ results were driven by the impact of derivative activity on the amortization of DAC and other costs and certain policyholder reserves. For additional information, see Note 22 to the Consolidated Financial Statements. During 2015, we recorded OTTI of $329 million in earnings, compared to $83 million in 2014. The following tables set forth, for the periods indicated, the composition of OTTI recorded in earnings attributable to the PFI excluding the Closed Block division by asset type, and for fixed maturity securities, by reason.
<table><tr><td></td><td colspan="2">Year Ended December 31,</td></tr><tr><td></td><td>2015</td><td>2014</td></tr><tr><td></td><td colspan="2">(in millions)</td></tr><tr><td>OTTI recorded in earnings—PFI excluding Closed Block Division-1</td><td></td><td></td></tr><tr><td>Public fixed maturity securities</td><td>$31</td><td>$22</td></tr><tr><td>Private fixed maturity securities</td><td>66</td><td>14</td></tr><tr><td>Total fixed maturity securities</td><td>97</td><td>36</td></tr><tr><td>Equity securities</td><td>111</td><td>26</td></tr><tr><td>Other invested assets-2</td><td>121</td><td>21</td></tr><tr><td>Total</td><td>$329</td><td>$83</td></tr></table>
(1) Excludes the portion of OTTI recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment. (2) Includes OTTI relating to investments in joint ventures and partnerships and real estate investments. Fixed Maturity Securities and Unrealized Gains and Losses by Industry Category The following table sets forth the composition of the portion of our fixed maturity securities portfolio by industry category attributable to PFI excluding the Closed Block division as of the dates indicated and the associated gross unrealized gains (losses).
<table><tr><td></td><td colspan="4">December 31, 2015</td><td colspan="4">December 31, 2014</td></tr><tr><td>Industry-1</td><td>AmortizedCost</td><td>GrossUnrealizedGains-2</td><td>GrossUnrealizedLosses-2</td><td>FairValue</td><td>AmortizedCost</td><td>GrossUnrealizedGains-2</td><td>GrossUnrealizedLosses-2</td><td>FairValue</td></tr><tr><td></td><td colspan="8">(in millions)</td></tr><tr><td>Corporate securities:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Finance</td><td>$21,505</td><td>$1,385</td><td>$224</td><td>$22,666</td><td>$20,569</td><td>$1,984</td><td>$55</td><td>$22,498</td></tr><tr><td>Consumer non-cyclical</td><td>20,732</td><td>2,073</td><td>408</td><td>22,397</td><td>20,956</td><td>2,822</td><td>141</td><td>23,637</td></tr><tr><td>Utility</td><td>17,369</td><td>1,423</td><td>393</td><td>18,399</td><td>16,144</td><td>2,149</td><td>82</td><td>18,211</td></tr><tr><td>Capital goods</td><td>10,503</td><td>978</td><td>241</td><td>11,240</td><td>10,170</td><td>1,348</td><td>67</td><td>11,451</td></tr><tr><td>Consumer cyclical</td><td>9,223</td><td>846</td><td>146</td><td>9,923</td><td>9,447</td><td>1,129</td><td>37</td><td>10,539</td></tr><tr><td>Foreign agencies</td><td>5,222</td><td>1,086</td><td>67</td><td>6,241</td><td>5,186</td><td>1,227</td><td>38</td><td>6,375</td></tr><tr><td>Energy</td><td>10,793</td><td>674</td><td>855</td><td>10,612</td><td>11,395</td><td>1,135</td><td>275</td><td>12,255</td></tr><tr><td>Communications</td><td>6,294</td><td>690</td><td>200</td><td>6,784</td><td>6,465</td><td>1,021</td><td>41</td><td>7,445</td></tr><tr><td>Basic industry</td><td>5,658</td><td>404</td><td>321</td><td>5,741</td><td>6,003</td><td>640</td><td>71</td><td>6,572</td></tr><tr><td>Transportation</td><td>6,536</td><td>605</td><td>105</td><td>7,036</td><td>5,718</td><td>769</td><td>18</td><td>6,469</td></tr><tr><td>Technology</td><td>3,459</td><td>278</td><td>72</td><td>3,665</td><td>3,474</td><td>389</td><td>30</td><td>3,833</td></tr><tr><td>Industrial other</td><td>3,547</td><td>245</td><td>73</td><td>3,719</td><td>2,746</td><td>333</td><td>21</td><td>3,058</td></tr><tr><td>Total corporate securities</td><td>120,841</td><td>10,687</td><td>3,105</td><td>128,423</td><td>118,273</td><td>14,946</td><td>876</td><td>132,343</td></tr><tr><td>Foreign government-3</td><td>72,265</td><td>12,167</td><td>131</td><td>84,301</td><td>70,327</td><td>11,286</td><td>111</td><td>81,502</td></tr><tr><td>Residential mortgage-backed</td><td>4,861</td><td>353</td><td>6</td><td>5,208</td><td>5,747</td><td>466</td><td>4</td><td>6,209</td></tr><tr><td>Asset-backed securities-4</td><td>6,873</td><td>195</td><td>69</td><td>6,999</td><td>7,094</td><td>292</td><td>78</td><td>7,308</td></tr><tr><td>Commercial mortgage-backed</td><td>7,300</td><td>160</td><td>37</td><td>7,423</td><td>9,688</td><td>344</td><td>24</td><td>10,008</td></tr><tr><td>U.S. Government</td><td>11,479</td><td>2,900</td><td>11</td><td>14,368</td><td>11,493</td><td>3,468</td><td>5</td><td>14,956</td></tr><tr><td>State & Municipal-5</td><td>7,661</td><td>675</td><td>39</td><td>8,297</td><td>5,163</td><td>693</td><td>3</td><td>5,853</td></tr><tr><td>Total-6</td><td>$231,280</td><td>$27,137</td><td>$3,398</td><td>$255,019</td><td>$227,785</td><td>$31,495</td><td>$1,101</td><td>$258,179</td></tr></table>
(1) Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings. (2) Includes $316 million of gross unrealized gains and $0 million of gross unrealized losses as of December 31, 2015, compared to $328 million of gross unrealized gains and $1 million of gross unrealized losses as of December 31, 2014, on securities classified as held-to-maturity. (3) As of both December 31, 2015 and 2014, based on amortized cost, 76% represent Japanese government bonds held by our Japanese insurance operations, with no other individual country representing more than 10% of the balance. (4) Includes securities collateralized by sub-prime mortgages. See “—Asset-Backed Securities” below. (5) Includes securities related to the Build America Bonds program. (6) Excluded from the table above are securities held outside the general account in other entities and operations. For additional information regarding investments held outside the general account, see “—Invested Assets of Other Entities and Operations” below. Also excluded from the table above are fixed maturity securities classified as trading. See “—Trading Account Assets Supporting Insurance Liabilities” and “—Other Trading Account Assets” for additional information. The decrease in net unrealized gains from December 31, 2014 to December 31, 2015, was primarily due to a net decrease in fair value driven by an increase in interest rates in the U. S. and credit spread widening. As of December 31, 2015, PFI excluding the Closed Block division had direct and indirect energy and related exposure with a market value of approximately $13.4 billion, and a net unrealized loss of approximately $0.2 billion, which is reflected in AOCI. The exposure was primarily through public and private corporate securities, 87% of which are investment grade, and also included trading assets, equity securities and private equity investments. OTTI related to investments in the energy sector were $79 million for the year ended December 31, 2015, and we could be exposed to future valuation declines or impairments if energy prices remain at current or lower levels for an extended period of time. |
0.72368 | as of december 31 , 2015 , what was the percentage of the loans extended under home equity lines of credit in the citi 2019s home equity loan portfolio | As of December 31, 2009, approximately $6.7 billion of stock repurchases remained under Citi’s authorized repurchase programs. No material repurchases were made in 2009 or 2008. In addition, for so long as the U. S. government holds any Citigroup common stock or trust preferred securities acquired pursuant to the preferred stock exchange offers, Citigroup has agreed not to acquire, repurchase, or redeem any Citigroup equity or trust preferred securities, other than pursuant to administering its employee benefit plans or other customary exceptions, or with the consent of the U. S. government. See also “Supervision and Regulation. ” Tangible Common Equity TCE, as defined by Citigroup, represents Common equity less Goodwill and Intangible assets (other than Mortgage Servicing Rights (MSRs)) net of the related net deferred taxes. Other companies may calculate TCE in a manner different from that of Citigroup. Citi’s TCE was $118.2 billion and $31.1 billion at December 31, 2009 and 2008, respectively. The TCE ratio (TCE divided by risk-weighted assets) was 10.9% and 3.1% at December 31, 2009 and 2008, respectively. A reconciliation of Citigroup’s total stockholders’ equity to TCE follows:
<table><tr><td>In millions of dollars at year end, except ratios</td><td>2009</td><td>2008</td></tr><tr><td>Total Citigroup stockholders’ equity</td><td>$152,700</td><td>$141,630</td></tr><tr><td>Less:</td><td></td><td></td></tr><tr><td>Preferred stock</td><td>312</td><td>70,664</td></tr><tr><td>Common equity</td><td>$152,388</td><td>$70,966</td></tr><tr><td>Less:</td><td></td><td></td></tr><tr><td>Goodwill</td><td>25,392</td><td>27,132</td></tr><tr><td>Intangible assets (other than MSRs)</td><td>8,714</td><td>14,159</td></tr><tr><td>Related net deferred taxes</td><td>68</td><td>-1,382</td></tr><tr><td>Tangible common equity (TCE)</td><td>$118,214</td><td>$31,057</td></tr><tr><td>Tangible assets</td><td></td><td></td></tr><tr><td>GAAP assets</td><td>$1,856,646</td><td>$1,938,470</td></tr><tr><td>Less:</td><td></td><td></td></tr><tr><td>Goodwill</td><td>25,392</td><td>27,132</td></tr><tr><td>Intangible assets (other than MSRs)</td><td>8,714</td><td>14,159</td></tr><tr><td>Related deferred tax assets</td><td>386</td><td>1,285</td></tr><tr><td>Tangible assets (TA)</td><td>$1,822,154</td><td>$1,895,894</td></tr><tr><td>Risk-weighted assets (RWA)</td><td>$1,088,526</td><td>$996,247</td></tr><tr><td>TCE/TA ratio</td><td>6.49%</td><td>1.64%</td></tr><tr><td>TCE ratio(TCE/RWA)</td><td>10.86%</td><td>3.12%</td></tr></table>
Capital Resources of Citigroup’s Depository Institutions Citigroup’s U. S. subsidiary depository institutions are subject to risk-based capital guidelines issued by their respective primary federal bank regulatory agencies, which are similar to the guidelines of the Federal Reserve Board. To be “well capitalized” under these regulatory definitions, Citigroup’s depository institutions must have a Tier 1 Capital ratio of at least 6%, a Total Capital (Tier 1 Capital + Tier 2 Capital) ratio of at least 10%, and a Leverage ratio of at least 5%, and not be subject to a regulatory directive to meet and maintain higher capital levels. At December 31, 2009, all of Citigroup’s subsidiary depository institutions were “well capitalized” under federal bank regulatory agency definitions, including Citigroup’s primary depository institution, Citibank, N. A. , as noted in the following table: Citibank, N. A. Components of Capital and Ratios Under Regulatory Guidelines
<table><tr><td>In billions of dollars at year end</td><td>2009</td><td>2008</td></tr><tr><td>Tier 1 Capital</td><td>$96.8</td><td>$71.0</td></tr><tr><td>Total Capital (Tier 1 Capital and Tier 2 Capital)</td><td>110.6</td><td>108.4</td></tr><tr><td>Tier 1 Capital ratio</td><td>13.16%</td><td>9.94%</td></tr><tr><td>Total Capital ratio</td><td>15.03</td><td>15.18</td></tr><tr><td>Leverage ratio-1</td><td>8.31</td><td>5.82</td></tr></table>
(1) Tier 1 Capital divided by each period’s quarterly adjusted average total assets. Citibank, N. A. had a $2.8 billion net loss for 2009. In addition, during 2009, Citibank, N. A. received capital contributions from its immediate parent company, Citicorp, in the amount of $33.0 billion. Total subordinated notes issued to Citibank, N. A. ’s immediate parent company, Citicorp, included in Citibank, N. A. ’s Tier 2 Capital declined from $28.2 billion outstanding at December 31, 2008 to $4.0 billion outstanding at December 31, 2009, reflecting the redemption of $24.2 billion of subordinated notes during 2009. then-current assessment base in the quarter determined by the FDIC. If the FDIC were to adopt this approach, Citi estimates the net impact to Citibank would be approximately $900 million, based on its current assessment base. As an alternative to either of the proposals put forth by the FDIC, in commenting on the FDIC鈥檚 notice of proposed rulemaking, industry groups recommended that in lieu of any surcharge on large banks, the FDIC maintain the assessment rate framework in effect as of year-end 2015 until the reserve ratio reaches 1.35%, which would be expected to occur by year-end 2019 (and within the timeframe required under the Dodd-Frank Act). It is not certain when the FDIC鈥檚 proposal will be finalized and what the ultimate impact will be to Citi. Additional Interest Rate Details Average Balances and Interest Rates鈥擜ssets(1)(2)(3)(4)
<table><tr><td></td><td colspan="3">Average volume</td><td colspan="3">Interest revenue</td><td colspan="3">% Average rate</td></tr><tr><td>In millions of dollars, except rates</td><td>2015</td><td>2014</td><td>2013</td><td>2015</td><td>2014</td><td>2013</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Assets</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deposits with banks<sup>-5</sup></td><td>$133,790</td><td>$161,359</td><td>$144,904</td><td>$727</td><td>$959</td><td>$1,026</td><td>0.54%</td><td>0.59%</td><td>0.71%</td></tr><tr><td>Federal funds sold and securities borrowed or purchased under agreements to resell<sup>-6</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In U.S. offices</td><td>$150,359</td><td>$153,688</td><td>$158,237</td><td>$1,211</td><td>$1,034</td><td>$1,133</td><td>0.81%</td><td>0.67%</td><td>0.72%</td></tr><tr><td>In offices outside the U.S.<sup>-5</sup></td><td>84,006</td><td>101,177</td><td>109,233</td><td>1,305</td><td>1,332</td><td>1,433</td><td>1.55</td><td>1.32</td><td>1.31</td></tr><tr><td>Total</td><td>$234,365</td><td>$254,865</td><td>$267,470</td><td>$2,516</td><td>$2,366</td><td>$2,566</td><td>1.07%</td><td>0.93%</td><td>0.96%</td></tr><tr><td>Trading account assets<sup>-7(8)</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In U.S. offices</td><td>$114,639</td><td>$114,910</td><td>$126,123</td><td>$3,945</td><td>$3,472</td><td>$3,728</td><td>3.44%</td><td>3.02%</td><td>2.96%</td></tr><tr><td>In offices outside the U.S.<sup>-5</sup></td><td>103,348</td><td>119,801</td><td>127,291</td><td>2,141</td><td>2,538</td><td>2,683</td><td>2.07</td><td>2.12</td><td>2.11</td></tr><tr><td>Total</td><td>$217,987</td><td>$234,711</td><td>$253,414</td><td>$6,086</td><td>$6,010</td><td>$6,411</td><td>2.79%</td><td>2.56%</td><td>2.53%</td></tr><tr><td>Investments</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In U.S. offices</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>$214,714</td><td>$188,910</td><td>$174,084</td><td>$3,812</td><td>$3,286</td><td>$2,713</td><td>1.78%</td><td>1.74%</td><td>1.56%</td></tr><tr><td>Exempt from U.S. income tax</td><td>20,034</td><td>20,386</td><td>18,075</td><td>443</td><td>626</td><td>811</td><td>2.21</td><td>3.07</td><td>4.49</td></tr><tr><td>In offices outside the U.S.<sup>-5</sup></td><td>102,376</td><td>113,163</td><td>114,122</td><td>3,071</td><td>3,627</td><td>3,761</td><td>3.00</td><td>3.21</td><td>3.30</td></tr><tr><td>Total</td><td>$337,124</td><td>$322,459</td><td>$306,281</td><td>$7,326</td><td>$7,539</td><td>$7,285</td><td>2.17%</td><td>2.34%</td><td>2.38%</td></tr><tr><td>Loans (net of unearned income)<sup>(9)</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>In U.S. offices</td><td>$354,439</td><td>$361,769</td><td>$354,707</td><td>$24,558</td><td>$26,076</td><td>$25,941</td><td>6.93%</td><td>7.21%</td><td>7.31%</td></tr><tr><td>In offices outside the U.S.<sup>-5</sup></td><td>273,072</td><td>296,656</td><td>292,852</td><td>15,988</td><td>18,723</td><td>19,660</td><td>5.85</td><td>6.31</td><td>6.71</td></tr><tr><td>Total</td><td>$627,511</td><td>$658,425</td><td>$647,559</td><td>$40,546</td><td>$44,799</td><td>$45,601</td><td>6.46%</td><td>6.80%</td><td>7.04%</td></tr><tr><td>Other interest-earning assets<sup>-10</sup></td><td>$55,060</td><td>$40,375</td><td>$38,233</td><td>$1,839</td><td>$507</td><td>$602</td><td>3.34%</td><td>1.26%</td><td>1.57%</td></tr><tr><td>Total interest-earning assets</td><td>$1,605,837</td><td>$1,672,194</td><td>$1,657,861</td><td>$59,040</td><td>$62,180</td><td>$63,491</td><td>3.68%</td><td>3.72%</td><td>3.83%</td></tr><tr><td>Non-interest-earning assets<sup>-7</sup></td><td>$218,000</td><td>$224,721</td><td>$222,526</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets from discontinued operations</td><td>—</td><td>—</td><td>2,909</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$1,823,837</td><td>$1,896,915</td><td>$1,883,296</td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
Net interest revenue includes the taxable equivalent adjustments related to the tax-exempt bond portfolio (based on the U. S. federal statutory tax rate of 35%) of $487 million, $498 million and $521 million for 2015, 2014 and 2013, respectively. Interest rates and amounts include the effects of risk management activities associated with the respective asset categories. Monthly or quarterly averages have been used by certain subsidiaries where daily averages are unavailable. Detailed average volume, Interest revenue and Interest expense exclude Discontinued operations. See Note 2 to the Consolidated Financial Statements. Average rates reflect prevailing local interest rates, including inflationary effects and monetary corrections in certain countries. Average volumes of securities borrowed or purchased under agreements to resell are reported net pursuant to ASC 210-20-45. However, Interest revenue excludes the impact of ASC 210-20-45. The fair value carrying amounts of derivative contracts are reported net, pursuant to ASC 815-10-45, in Non-interest-earning assets and Other non-interest bearing liabilities. Interest expense on Trading account liabilities of ICG is reported as a reduction of Interest revenue. Interest revenue and Interest expense on cash collateral positions are reported in interest on Trading account assets and Trading account liabilities, respectively. Includes cash-basis loans. Includes brokerage receivables. During 2015, continued management actions, primarily the sale or transfer to held-for-sale of approximately $1.5 billion of delinquent residential first mortgages, including $0.9 billion in the fourth quarter largely associated with the transfer of CitiFinancial loans to held-for-sale referenced above, were the primary driver of the overall improvement in delinquencies within Citi Holdings’ residential first mortgage portfolio. Credit performance from quarter to quarter could continue to be impacted by the amount of delinquent loan sales or transfers to held-for-sale, as well as overall trends in HPI and interest rates. North America Residential First Mortgages—State Delinquency Trends The following tables set forth the six U. S. states and/or regions with the highest concentration of Citi’s residential first mortgages.
<table><tr><td>In billions of dollars</td><td>December 31, 2015</td><td>December 31, 2014</td></tr><tr><td>State<sup>-1</sup></td><td>ENR<sup>-2</sup></td><td>ENRDistribution</td><td>90+DPD%</td><td>%LTV >100%<sup>-3</sup></td><td>RefreshedFICO</td><td>ENR<sup>-2</sup></td><td>ENRDistribution</td><td>90+DPD%</td><td>%LTV >100%<sup>-3</sup></td><td>RefreshedFICO</td></tr><tr><td>CA</td><td>$19.2</td><td>37%</td><td>0.2%</td><td>1%</td><td>754</td><td>$18.9</td><td>31%</td><td>0.6%</td><td>2%</td><td>745</td></tr><tr><td>NY/NJ/CT<sup>-4</sup></td><td>12.7</td><td>25</td><td>0.8</td><td>1</td><td>751</td><td>12.2</td><td>20</td><td>1.9</td><td>2</td><td>740</td></tr><tr><td>VA/MD</td><td>2.2</td><td>4</td><td>1.2</td><td>2</td><td>719</td><td>3.0</td><td>5</td><td>3.0</td><td>8</td><td>695</td></tr><tr><td>IL<sup>-4</sup></td><td>2.2</td><td>4</td><td>1.0</td><td>3</td><td>735</td><td>2.5</td><td>4</td><td>2.5</td><td>9</td><td>713</td></tr><tr><td>FL<sup>-4</sup></td><td>2.2</td><td>4</td><td>1.1</td><td>4</td><td>723</td><td>2.8</td><td>5</td><td>3.0</td><td>14</td><td>700</td></tr><tr><td>TX</td><td>1.9</td><td>4</td><td>1.0</td><td>—</td><td>711</td><td>2.5</td><td>4</td><td>2.7</td><td>—</td><td>680</td></tr><tr><td>Other</td><td>11.0</td><td>21</td><td>1.3</td><td>2</td><td>710</td><td>18.2</td><td>30</td><td>3.3</td><td>7</td><td>677</td></tr><tr><td>Total<sup>-5</sup></td><td>$51.5</td><td>100%</td><td>0.7%</td><td>1%</td><td>738</td><td>$60.1</td><td>100%</td><td>2.1%</td><td>4%</td><td>715</td></tr></table>
Note: Totals may not sum due to rounding. (1) Certain of the states are included as part of a region based on Citi’s view of similar HPI within the region. (2) Ending net receivables. Excludes loans in Canada and Puerto Rico, loans guaranteed by U. S. government agencies, loans recorded at fair value and loans subject to long term standby commitments (LTSCs). Excludes balances for which FICO or LTV data are unavailable. (3) LTV ratios (loan balance divided by appraised value) are calculated at origination and updated by applying market price data. (4) New York, New Jersey, Connecticut, Florida and Illinois are judicial states. (5) Improvement in state trends during 2015 was primarily due to the sale or transfer to held-for-sale of residential first mortgages, including the transfer of CitiFinancial residential first mortgages to held-for-sale in the fourth quarter of 2015. Foreclosures A substantial majority of Citi’s foreclosure inventory consists of residential first mortgages. At December 31, 2015, Citi’s foreclosure inventory included approximately $0.1 billion, or 0.2%, of the total residential first mortgage portfolio, compared to $0.6 billion, or 0.9%, at December 31, 2014, based on the dollar amount of ending net receivables of loans in foreclosure inventory, excluding loans that are guaranteed by U. S. government agencies and loans subject to LTSCs. North America Consumer Mortgage Quarterly Credit Trends —Net Credit Losses and Delinquencies—Home Equity Loans Citi’s home equity loan portfolio consists of both fixed-rate home equity loans and loans extended under home equity lines of credit. Fixed-rate home equity loans are fully amortizing. Home equity lines of credit allow for amounts to be drawn for a period of time with the payment of interest only and then, at the end of the draw period, the then-outstanding amount is converted to an amortizing loan (the interest-only payment feature during the revolving period is standard for this product across the industry). After conversion, the home equity loans typically have a 20-year amortization period. As of December 31, 2015, Citi’s home equity loan portfolio of $22.8 billion consisted of $6.3 billion of fixed-rate home equity loans and $16.5 billion of loans extended under home equity lines of credit (Revolving HELOCs). |
1.56326 | what is the net income per common share for the year 2007? | Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005 Rental Revenue from Continuing Operations Overall, rental revenue from continuing operations increased from $602.1 million in 2005 to $743.5 million in 2006. The following table reconciles rental revenue from continuing operations by reportable segment to total reported rental revenue from continuing operations for the years ended December 31, 2006 and 2005, respectively (in thousands):
<table><tr><td> </td><td> 2006</td><td> 2005</td></tr><tr><td>Office</td><td>$534,369</td><td>$443,927</td></tr><tr><td>Industrial</td><td> 194,670</td><td>148,359</td></tr><tr><td>Other</td><td> 14,509</td><td>9,776</td></tr><tr><td>Total</td><td>$743,548</td><td>$602,062</td></tr></table>
Both of our reportable segments that comprise Rental Operations (office and industrial) are within the real estate industry; however, the same economic and industry conditions do not affect each segment in the same manner. The primary causes of the increase in rental revenue from continuing operations, with specific references to a particular segment when applicable, are summarized below: ? In 2006, we acquired 50 new properties and placed 27 development projects in service. These 2006 acquisitions and developments are the primary factor in the overall increase in rental revenue for the year ended 2006 compared to 2005 as they provided incremental revenues of $73.8 million and $9.3 million respectively. These acquisitions totaled $948.4 million on 8.6 million square feet and were 99% leased at December 31, 2006. ? Acquisitions and developments that were placed in service in 2005 provided $15.8 million and $11.2 million, respectively, of incremental revenue in 2006. ? Rental revenue includes lease termination fees. Lease termination fees relate to specific tenants who pay a fee to terminate their lease obligations before the end of the contractual lease term. Lease termination fees increased from $7.3 million in 2005 to $16.1 million in 2006. ? Our in-service occupancy increased from 92.7% at December 31, 2005, to 92.9% at December 31, 2006 and contributed to the remaining increase in rental revenue. Equity in Earnings of Unconsolidated Companies Equity in earnings represents our ownership share of net income from investments in unconsolidated companies. These joint ventures generally own and operate rental properties and develop properties. These earnings increased from $29.5 million in 2005 to $38.0 million in 2006. During 2006, our joint ventures sold 22 non-strategic buildings, with our share of the net gain recorded through equity in earnings totaling $18.8 million. During the second quarter of 2005, one of our ventures sold three buildings, with our share of the net gain recorded through equity in earnings totaling $11.1 million. Rental Expenses and Real Estate Taxes The following table reconciles rental expenses and real estate taxes by reportable segment to our total reported amounts in the statement of operations for the years ended December 31, 2006 and 2005, respectively (in thousands):
<table><tr><td> </td><td> 2006</td><td> 2005</td></tr><tr><td>Rental Expenses:</td><td></td><td></td></tr><tr><td>Office</td><td>$143,567</td><td>$119,052</td></tr><tr><td>Industrial</td><td> 21,991</td><td>18,264</td></tr><tr><td>Other</td><td> 3,519</td><td>1,557</td></tr><tr><td>Total</td><td>$169,077</td><td>$138,873</td></tr><tr><td>Real Estate Taxes:</td><td></td><td></td></tr><tr><td>Office</td><td>$55,963</td><td>$49,936</td></tr><tr><td>Industrial</td><td> 21,760</td><td>17,758</td></tr><tr><td>Other</td><td> 6,015</td><td>5,104</td></tr><tr><td>Total</td><td>$83,738</td><td>$72,798</td></tr></table>
Rental expenses and real estate taxes for 2006 have increased from 2005 by $30.2 million and $10.9 million, respectively, as the result of acquisition and development activity in 2005 and 2006 as well as from an increase in occupancy over the past two years. 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. 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 are classified as gain on sale of Service Operation properties in the Consolidated Statements of Operations. All activities and proceeds received from the development and sale of these buildings are classified in the operating activities section of the Consolidated Statements of Cash Flows. Net Income Per Common Share Basic net income per common share is computed by dividing net income available for common shareholders by the weighted average number of common shares outstanding for the period. Diluted net income per common share is computed by dividing the sum of net income available for common shareholders and the minority interest in earnings allocable to Units not owned by us, by the sum of the weighted average number of common shares outstanding and minority Units outstanding, including any dilutive potential common equivalents for the period. The following table reconciles the components of basic and diluted net income per common share (in thousands):
<table><tr><td></td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td>Basic net income available for common shareholders</td><td>$217,692</td><td>$145,095</td><td>$309,183</td></tr><tr><td>Minority interest in earnings of common unitholders</td><td>14,399</td><td>14,238</td><td>29,649</td></tr><tr><td>Diluted net income available for common shareholders</td><td>$232,091</td><td>$159,333</td><td>$338,832</td></tr><tr><td>Weighted average number of common shares outstanding</td><td>139,255</td><td>134,883</td><td>141,508</td></tr><tr><td>Weighted average partnership Units outstanding</td><td>9,204</td><td>13,186</td><td>13,551</td></tr><tr><td>Dilutive shares for stock-based compensation plans -1</td><td>1,155</td><td>1,324</td><td>818</td></tr><tr><td>Weighted average number of common shares and potential dilutive common equivalents</td><td>149,614</td><td>149,393</td><td>155,877</td></tr></table>
(1) Excludes the effect of outstanding stock options, as well as the Exchangeable Senior Notes (“Exchangeable Notes”) issued in 2006, that have an anti-dilutive effect on earnings per share for the periods presented. A joint venture partner in one of our unconsolidated companies has the option to convert a portion of its ownership in the joint venture to our common shares. The effect of this option on earnings per share was anti-dilutive for the years ended December 31, 2007, 2006 and 2005. Federal Income Taxes We have elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income to our stockholders. Management intends to continue to adhere to these requirements and to maintain our REIT status. As a REIT, we are entitled to a tax deduction for some or all of the dividends we pay to shareholders. Accordingly, we generally will not be subject to federal income taxes as long as we distribute an amount equal to or in excess of our taxable income currently to shareholders. We are also generally subject to federal income taxes on any taxable income that is not currently distributed to its shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes and may not be able to qualify as a REIT for four subsequent taxable years. schedule, excluding the leases in properties designated as held-for-sale, at December 31, 2016 (in thousands, except percentage data and number of leases):
<table><tr><td></td><td colspan="3">Total Consolidated Portfolio</td><td colspan="2">Industrial</td><td colspan="2">Medical Office</td><td colspan="2">Non-reportable</td></tr><tr><td>Year ofExpiration</td><td>SquareFeet</td><td>Ann. RentRevenue*</td><td>Number of Leases</td><td>SquareFeet</td><td>Ann. RentRevenue*</td><td>SquareFeet</td><td>Ann. Rent Revenue*</td><td>SquareFeet</td><td>Ann. RentRevenue*</td></tr><tr><td>2017</td><td>8,215</td><td>$32,966</td><td>146</td><td>8,028</td><td>$29,835</td><td>171</td><td>2,975</td><td>16</td><td>$156</td></tr><tr><td>2018</td><td>12,729</td><td>57,870</td><td>189</td><td>12,303</td><td>46,975</td><td>416</td><td>10,781</td><td>10</td><td>114</td></tr><tr><td>2019</td><td>13,858</td><td>61,293</td><td>210</td><td>13,525</td><td>53,543</td><td>319</td><td>7,581</td><td>14</td><td>169</td></tr><tr><td>2020</td><td>13,014</td><td>65,938</td><td>172</td><td>12,567</td><td>56,948</td><td>423</td><td>8,772</td><td>24</td><td>218</td></tr><tr><td>2021</td><td>13,358</td><td>61,520</td><td>186</td><td>13,042</td><td>55,293</td><td>257</td><td>5,732</td><td>59</td><td>495</td></tr><tr><td>2022</td><td>12,712</td><td>54,950</td><td>106</td><td>12,350</td><td>47,451</td><td>330</td><td>6,940</td><td>32</td><td>559</td></tr><tr><td>2023</td><td>3,557</td><td>23,923</td><td>62</td><td>3,134</td><td>16,111</td><td>415</td><td>7,725</td><td>8</td><td>87</td></tr><tr><td>2024</td><td>8,857</td><td>41,951</td><td>52</td><td>8,706</td><td>38,816</td><td>151</td><td>3,135</td><td>—</td><td>—</td></tr><tr><td>2025</td><td>8,000</td><td>35,392</td><td>37</td><td>7,788</td><td>31,508</td><td>212</td><td>3,884</td><td>—</td><td>—</td></tr><tr><td>2026</td><td>7,363</td><td>37,513</td><td>52</td><td>7,080</td><td>31,491</td><td>283</td><td>6,022</td><td>—</td><td>—</td></tr><tr><td>2027 and Thereafter</td><td>14,003</td><td>124,434</td><td>84</td><td>11,156</td><td>49,740</td><td>2,419</td><td>67,753</td><td>428</td><td>6,941</td></tr><tr><td>Total Leased</td><td>115,666</td><td>$597,750</td><td>1,296</td><td>109,679</td><td>$457,711</td><td>5,396</td><td>131,300</td><td>591</td><td>$8,739</td></tr><tr><td>Total Portfolio Square Feet</td><td>118,945</td><td></td><td></td><td>112,368</td><td></td><td>5,672</td><td></td><td>905</td><td></td></tr><tr><td>Percent Leased</td><td>97.2%</td><td></td><td></td><td>97.6%</td><td></td><td>95.1%</td><td></td><td>65.3%</td><td></td></tr></table>
* Annualized rental revenue represents average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. Annualized rental revenue excludes additional amounts paid by tenants as reimbursement for operating expenses. Information on current market rents can be difficult to obtain, is highly subjective and is often not directly f comparable between properties. As a result, we believe the increase or decrease in net efffective rent on lease renewals, as previously defined, is the most objective and meaningful relationship between rents on leases expiring in the near-term and current market rents. Acquisition Activity Our decision process in determining whether or not to acquire a target property or portfolio involves several factors, including expected rent growth, multiple yield metrics, property locations and expected demographic growth in each location, current occupancy of the target properties, tenant profile and remaining terms of the in-place leases in the target properties. We pursue both brokered and non-brokered acquisitions, and it is dif W ficult to predict which f markets and product types may present acquisition opportunities that align with our strategy. Because of the numerous factors considered in our acquisition decisions, we do not establish specific target yields for future acquisitions. Due to increased market prices and lower acquisition yields for the class and quality of assets that meet our investment criteria, we have shifted our near term focus from acquisitions to new development activities. In addition to the 14 properties acquired from the Quantico Joint VVenture, we also acquired three other properties for a total of 17 properties during the year ended December 31, 2016 and two properties during the year ended December 31, 2015. The following table summarizes the acquisition price, percent leased at time of acquisition and in-place yields by product type for these acquisitions (in thousands, except percentage data): |
2 | how many years did it take to close the pilgrim plant after after its last refueling? | Part I Item 1 Entergy Corporation, Utility operating companies, and System Energy 253 including the continued effectiveness of the Clean Energy Standards/Zero Emissions Credit program (CES/ZEC), the establishment of certain long-term agreements on acceptable terms with the Energy Research and Development Authority of the State of New York in connection with the CES/ZEC program, and NYPSC approval of the transaction on acceptable terms, Entergy refueled the FitzPatrick plant in January and February 2017. In October 2015, Entergy determined that it would close the Pilgrim plant. The decision came after management’s extensive analysis of the economics and operating life of the plant following the NRC’s decision in September 2015 to place the plant in its “multiple/repetitive degraded cornerstone column” (Column 4) of its Reactor Oversight Process Action Matrix. The Pilgrim plant is expected to cease operations on May 31, 2019, after refueling in the spring of 2017 and operating through the end of that fuel cycle. In December 2015, Entergy Wholesale Commodities closed on the sale of its 583 MW Rhode Island State Energy Center (RISEC), in Johnston, Rhode Island. The base sales price, excluding adjustments, was approximately $490 million. Entergy Wholesale Commodities purchased RISEC for $346 million in December 2011. In December 2016, Entergy announced that it reached an agreement with Consumers Energy to terminate the PPA for the Palisades plant on May 31, 2018. Pursuant to the PPA termination agreement, Consumers Energy will pay Entergy $172 million for the early termination of the PPA. The PPA termination agreement is subject to regulatory approvals. Separately, and assuming regulatory approvals are obtained for the PPA termination agreement, Entergy intends to shut down the Palisades nuclear power plant permanently on October 1, 2018, after refueling in the spring of 2017 and operating through the end of that fuel cycle. Entergy expects to enter into a new PPA with Consumers Energy under which the plant would continue to operate through October 1, 2018. In January 2017, Entergy announced that it reached a settlement with New York State to shut down Indian Point 2 by April 30, 2020 and Indian Point 3 by April 30, 2021, and resolve all New York State-initiated legal challenges to Indian Point’s operating license renewal. As part of the settlement, New York State has agreed to issue Indian Point’s water quality certification and Coastal Zone Management Act consistency certification and to withdraw its objection to license renewal before the NRC. New York State also has agreed to issue a water discharge permit, which is required regardless of whether the plant is seeking a renewed NRC license. The shutdowns are conditioned, among other things, upon such actions being taken by New York State. Even without opposition, the NRC license renewal process is expected to continue at least into 2018. With the settlement concerning Indian Point, Entergy now has announced plans for the disposition of all of the Entergy Wholesale Commodities nuclear power plants, including the sales of Vermont Yankee and FitzPatrick, and the earlier than previously expected shutdowns of Pilgrim, Palisades, Indian Point 2, and Indian Point 3. See “Entergy Wholesale Commodities Exit from the Merchant Power Business” for further discussion. Property Nuclear Generating Stations Entergy Wholesale Commodities includes the ownership of the following nuclear power plants:
<table><tr><td>Power Plant</td><td>Market</td><td>In Service Year</td><td>Acquired</td><td>Location</td><td>Capacity - Reactor Type</td><td>License Expiration Date</td></tr><tr><td>Pilgrim (a)</td><td>IS0-NE</td><td>1972</td><td>July 1999</td><td>Plymouth, MA</td><td>688 MW - Boiling Water</td><td>2032 (a)</td></tr><tr><td>FitzPatrick (b)</td><td>NYISO</td><td>1975</td><td>Nov. 2000</td><td>Oswego, NY</td><td>838 MW - Boiling Water</td><td>2034 (b)</td></tr><tr><td>Indian Point 3 (c)</td><td>NYISO</td><td>1976</td><td>Nov. 2000</td><td>Buchanan, NY</td><td>1,041 MW - Pressurized Water</td><td>2015 (c)</td></tr><tr><td>Indian Point 2 (c)</td><td>NYISO</td><td>1974</td><td>Sept. 2001</td><td>Buchanan, NY</td><td>1,028 MW - Pressurized Water</td><td>2013 (c)</td></tr><tr><td>Vermont Yankee (d)</td><td>IS0-NE</td><td>1972</td><td>July 2002</td><td>Vernon, VT</td><td>605 MW - Boiling Water</td><td>2032 (d)</td></tr><tr><td>Palisades (e)</td><td>MISO</td><td>1971</td><td>Apr. 2007</td><td>Covert, MI</td><td>811 MW - Pressurized Water</td><td>2031 (e)</td></tr></table>
<table><tr><td>Consolidated Balance Sheet Data</td><td colspan="5">At July 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>Cash, cash equivalents and investments</td><td>$1,914</td><td>$1,661</td><td>$744</td><td>$1,421</td><td>$1,622</td></tr><tr><td>Long-term investments</td><td>31</td><td>83</td><td>75</td><td>63</td><td>91</td></tr><tr><td>Working capital</td><td>1,200</td><td>1,116</td><td>258</td><td>449</td><td>1,074</td></tr><tr><td>Total assets</td><td>5,201</td><td>5,486</td><td>4,684</td><td>5,110</td><td>5,198</td></tr><tr><td>Current portion of long-term debt</td><td>—</td><td>—</td><td>—</td><td>500</td><td>—</td></tr><tr><td>Long-term debt</td><td>499</td><td>499</td><td>499</td><td>499</td><td>998</td></tr><tr><td>Other long-term obligations</td><td>203</td><td>167</td><td>166</td><td>175</td><td>143</td></tr><tr><td>Total stockholders’ equity</td><td>3,078</td><td>3,531</td><td>2,744</td><td>2,616</td><td>2,821</td></tr></table>
ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) includes the following sections: ? Executive Overview that discusses at a high level our operating results and some of the trends that affect our business. ? Critical Accounting Policies and Estimates that we believe are important to understanding the assumptions and judgments underlying our financial statements. ? Results of Operations that includes a more detailed discussion of our revenue and expenses. ? Liquidity and Capital Resources which discusses key aspects of our statements of cash flows, changes in our balance sheets and our financial commitments. You should note that this MD&A discussion contains forward-looking statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements and Risk Factors” at the beginning of Item 1A for important information to consider when evaluating such statements. You should read this MD&A in conjunction with the financial statements and related notes in Item 8 of this Annual Report. In fiscal 2014 we acquired Check Inc. and in fiscal 2012 we acquired Demandforce, Inc. We have included their results of operations in our consolidated results of operations from the dates of acquisition. In fiscal 2013 we completed the sale of our Intuit Websites business and in fiscal 2014 we completed the sales of our Intuit Financial Services (IFS) and Intuit Health businesses. We accounted for all of these businesses as discontinued operations and have therefore reclassified our statements of operations for all periods presented to reflect them as such. We have also reclassified our balance sheets for all periods presented to reflect IFS as discontinued operations. The net assets of Intuit Websites and Intuit Health were not significant, so we have not reclassified our balance sheets for any period presented to reflect them as discontinued operations. Because the cash flows of our Intuit Websites, IFS, and Intuit Health discontinued operations were not material for any period presented, we have not segregated the cash flows of those businesses from continuing operations on our statements of cash flows. See “Results of Operations – Non-Operating Income and Expense – Discontinued Operations” later in this Item 7 for more information. Unless otherwise noted, the following discussion pertains to our continuing operations. Executive Overview This overview provides a high level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important in order to understand our financial results for fiscal 2014 as well as our future prospects. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Annual Report on Form 10-K. See the table later in this Note 7 for more information on the IFS operating results. The carrying amounts of the major classes of assets and liabilities of IFS at July 31, 2013 were as shown in the following table. These carrying amounts approximated fair value.
<table><tr><td>(In millions)</td><td>July 31, 2013</td></tr><tr><td>Accounts receivable</td><td>$40</td></tr><tr><td>Other current assets</td><td>4</td></tr><tr><td>Property and equipment, net</td><td>31</td></tr><tr><td>Goodwill</td><td>914</td></tr><tr><td>Purchased intangible assets, net</td><td>4</td></tr><tr><td>Other assets</td><td>6</td></tr><tr><td>Total assets</td><td>999</td></tr><tr><td>Accounts payable</td><td>15</td></tr><tr><td>Accrued compensation</td><td>21</td></tr><tr><td>Deferred revenue</td><td>3</td></tr><tr><td>Long-term obligations</td><td>9</td></tr><tr><td>Total liabilities</td><td>48</td></tr><tr><td>Net assets</td><td>$951</td></tr></table>
Intuit Health In July 2013 management having the authority to do so formally approved a plan to sell our Intuit Health business and on August 19, 2013 we completed the sale for cash consideration that was not significant. We recorded a $4 million pre-tax loss on the disposal of Intuit Health that was more than offset by a related income tax benefit of approximately $14 million, resulting in a net gain on disposal of approximately $10 million in the first quarter of fiscal 2014. The decision to sell the Intuit Health business was a result of management's desire to focus resources on its offerings for small businesses, consumers, and accounting professionals. Intuit Health was part of our former Other Businesses reportable segment. We determined that our Intuit Health business became a long-lived asset held for sale in the fourth quarter of fiscal 2013. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying value of Intuit Health at July 31, 2013 was less than the estimated fair value less cost to sell, no adjustment to the carrying value of this long-lived asset was necessary at that date. We also classified our Intuit Health business as discontinued operations in the fourth quarter of fiscal 2013 and have segregated its operating results in our statements of operations for all periods presented. See the table later in this Note for more information. We have not segregated the net assets of Intuit Health on our balance sheets for any period presented. Net assets held for sale at July 31, 2013 consisted primarily of operating assets and liabilities that were not material. Because operating cash flows from the Intuit Health business were also not material for any period presented, we have not segregated them from continuing operations on our statements of cash flows. Intuit Websites In July 2012 management having the authority to do so formally approved a plan to sell our Intuit Websites business, which was a component of our Small Business reportable segment. The decision was the result of a shift in our strategy for helping small businesses to establish an online presence. On August 10, 2012 we signed a definitive agreement to sell our Intuit Websites business and on September 17, 2012 we completed the sale for approximately $60 million in cash. We recorded a gain on disposal of approximately $32 million, net of income taxes. We determined that our Intuit Websites business became a long-lived asset held for sale in the fourth quarter of fiscal 2012. A long-lived asset classified as held for sale is measured at the lower of its carrying amount or fair value less cost to sell. Since the carrying value of Intuit Websites at July 31, 2012 was less than the estimated fair value less cost to sell, no adjustment to the carrying value of this long-lived asset was necessary at that date. |
2,010 | When is Earnings (loss) before taxes in Total the largest? | 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: |
-29 | What's the difference of New orders between 2013 and 2012? (in million) | Backlog Applied manufactures systems to meet demand represented by order backlog and customer commitments. Backlog consists of: (1) orders for which written authorizations have been accepted and assigned shipment dates are within the next 12 months, or shipment has occurred but revenue has not been recognized; and (2) contractual service revenue and maintenance fees to be earned within the next 12 months. Backlog by reportable segment as of October 27, 2013 and October 28, 2012 was as follows:
<table><tr><td></td><td>2013</td><td>2012</td><td></td><td>(In millions, except percentages)</td></tr><tr><td>Silicon Systems Group</td><td>$1,295</td><td>55%</td><td>$705</td><td>44%</td></tr><tr><td>Applied Global Services</td><td>591</td><td>25%</td><td>580</td><td>36%</td></tr><tr><td>Display</td><td>361</td><td>15%</td><td>206</td><td>13%</td></tr><tr><td>Energy and Environmental Solutions</td><td>125</td><td>5%</td><td>115</td><td>7%</td></tr><tr><td>Total</td><td>$2,372</td><td>100%</td><td>$1,606</td><td>100%</td></tr></table>
Applied’s backlog on any particular date is not necessarily indicative of actual sales for any future periods, due to the potential for customer changes in delivery schedules or cancellation of orders. Customers may delay delivery of products or cancel orders prior to shipment, subject to possible cancellation penalties. Delays in delivery schedules and/or a reduction of backlog during any particular period could have a material adverse effect on Applied’s business and results of operations. Manufacturing, Raw Materials and Supplies Applied’s manufacturing activities consist primarily of assembly, test and integration of various proprietary and commercial parts, components and subassemblies (collectively, parts) that are used to manufacture systems. Applied has implemented a distributed manufacturing model under which manufacturing and supply chain activities are conducted in various countries, including the United States, Europe, Israel, Singapore, Taiwan, and other countries in Asia, and assembly of some systems is completed at customer sites. Applied uses numerous vendors, including contract manufacturers, to supply parts and assembly services for the manufacture and support of its products. Although Applied makes reasonable efforts to assure that parts are available from multiple qualified suppliers, this is not always possible. Accordingly, some key parts may be obtained from only a single supplier or a limited group of suppliers. Applied seeks to reduce costs and to lower the risks of manufacturing and service interruptions by: (1) selecting and qualifying alternate suppliers for key parts; (2) monitoring the financial condition of key suppliers; (3) maintaining appropriate inventories of key parts; (4) qualifying new parts on a timely basis; and (5) locating certain manufacturing operations in close proximity to suppliers and customers. Research, Development and Engineering Applied’s long-term growth strategy requires continued development of new products. The Company’s significant investment in research, development and engineering (RD&E) has generally enabled it to deliver new products and technologies before the emergence of strong demand, thus allowing customers to incorporate these products into their manufacturing plans at an early stage in the technology selection cycle. Applied works closely with its global customers to design systems and processes that meet their planned technical and production requirements. Product development and engineering organizations are located primarily in the United States, as well as in Europe, Israel, Taiwan, and China. In addition, Applied outsources certain RD&E activities, some of which are performed outside the United States, primarily in India. Process support and customer demonstration laboratories are located in the United States, China, Taiwan, Europe, and Israel. Applied’s investments in RD&E for product development and engineering programs to create or improve products and technologies over the last three years were as follows: $1.3 billion (18 percent of net sales) in fiscal 2013, $1.2 billion (14 percent of net sales) in fiscal 2012, and $1.1 billion (11 percent of net sales) in fiscal 2011. Applied has spent an average of 14 percent of net sales in RD&E over the last five years. In addition to RD&E for specific product technologies, Applied maintains ongoing programs for automation control systems, materials research, and environmental control that are applicable to its products. Item 2: Properties Information concerning Applied’s principal properties at October 27, 2013 is set forth below:
<table><tr><td>Location</td><td>Type</td><td>Principal Use</td><td>SquareFootage</td><td>Ownership</td></tr><tr><td>Santa Clara, CA</td><td>Office, Plant & Warehouse</td><td>Headquarters; Marketing; Manufacturing; Distribution; Research, Development,Engineering; Customer Support</td><td>1,476,000150,000</td><td>OwnedLeased</td></tr><tr><td>Austin, TX</td><td>Office, Plant & Warehouse</td><td>Manufacturing</td><td>1,719,000145,000</td><td>OwnedLeased</td></tr><tr><td>Rehovot, Israel</td><td>Office, Plant & Warehouse</td><td>Manufacturing; Research,Development, Engineering;Customer Support</td><td>417,0005,000</td><td>OwnedLeased</td></tr><tr><td>Singapore</td><td>Office, Plant & Warehouse</td><td>Manufacturing andCustomer Support</td><td>392,00010,000</td><td>OwnedLeased</td></tr><tr><td>Gloucester, MA</td><td>Office, Plant & Warehouse</td><td>Manufacturing; Research,Development, Engineering;Customer Support</td><td>315,000131,000</td><td>OwnedLeased</td></tr><tr><td>Tainan, Taiwan</td><td>Office, Plant & Warehouse</td><td>Manufacturing andCustomer Support</td><td>320,000</td><td>Owned</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. Products in the Silicon Systems Group are manufactured in Austin, Texas; Singapore; Gloucester, Massachusetts; and Rehovot, Israel. Remanufactured equipment products in the Applied Global Services segment are produced primarily in Austin, Texas. Products in the Display segment are manufactured in Tainan, Taiwan; Santa Clara, California; and Alzenau, Germany. Products in the Energy and Environmental Solutions segment are primarily manufactured in Alzenau, Germany; Treviso, Italy; and Cheseaux, Switzerland. In addition to the above properties, Applied also owns and leases offices, plants and/or warehouse locations in 78 locations throughout the world: 18 in Europe, 21 in Japan, 15 in North America (principally the United States), 8 in China, 7 in Korea, 6 in Southeast Asia, and 3 in Taiwan. These facilities are principally used for manufacturing; research, development and engineering; and marketing, sales and/or customer support. Applied also owns a total of approximately 139 acres of buildable land in 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. Fiscal 2013 operating results reflected a recovery in demand for TV manufacturing equipment and continued demand for advanced mobile display equipment, which resulted in increased new orders, net sales, operating income and non-GAAPadjusted operating income compared to fiscal 2012. In the fourth quarter of fiscal 2013, new orders were $114 million, down 55 percent from the prior quarter, and reflected customer push-outs of orders. Net sales in the fourth quarter of fiscal 2013 were $163 million, almost flat compared to the prior quarter. Two customers accounted for approximately 50 percent of net sales for the Display segment in fiscal 2013. Fiscal 2012 operating results reflected a continued overcapacity in the large substrate LCD TV equipment industry that resulted in decreased new orders and net sales in fiscal 2012. The downturn in the LCD TV equipment industry was partially offset by increased demand for advanced mobile display equipment. Four customers accounted for 60 percent of net sales for the Display segment in fiscal 2012. Energy and Environmental Solutions Segment The Energy and Environmental Solutions segment includes products for fabricating c-Si solar PVs, as well as high throughput roll-to-roll deposition equipment for flexible electronics, packaging and other applications. This business is focused on delivering solutions to generate and conserve energy, with an emphasis on lowering the cost to produce solar power and increasing conversion efficiency. While end-demand for solar PVs has been robust over the last several years, investment levels in capital equipment remain depressed. Global solar PV production capacity exceeds anticipated demand, which has caused solar PV manufacturers to significantly reduce or delay investments in manufacturing capacity and new technology, or in some instances to cease operations. Certain significant measures for the past three fiscal years were as follows:
<table><tr><td rowspan="2"></td><td></td><td></td><td></td><td colspan="4">Change</td></tr><tr><td>2013</td><td>2012</td><td>2011</td><td colspan="2">2013 over 2012</td><td colspan="2">2012 over 2011</td></tr><tr><td></td><td colspan="7">(In millions, except percentages and ratios)</td></tr><tr><td>New orders</td><td>$166</td><td>$195</td><td>$1,684</td><td>$-29</td><td>-15%</td><td>$-1,489</td><td>-88%</td></tr><tr><td>Net sales</td><td>173</td><td>425</td><td>1,990</td><td>-252</td><td>-59%</td><td>-1,565</td><td>-79%</td></tr><tr><td>Book to bill ratio</td><td>1.0</td><td>0.5</td><td>0.8</td><td></td><td></td><td></td><td></td></tr><tr><td>Operating income (loss)</td><td>-433</td><td>-668</td><td>453</td><td>235</td><td>35%</td><td>-1,121</td><td>-247%</td></tr><tr><td>Operating margin</td><td>-250.3%</td><td>-157.2%</td><td>22.8%</td><td></td><td>-93.1 points</td><td></td><td>-180.0 points</td></tr><tr><td>Non-GAAP Adjusted Results</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Non-GAAP adjusted operating income (loss)</td><td>-115</td><td>-184</td><td>444</td><td>69</td><td>38%</td><td>-628</td><td>-141%</td></tr><tr><td>Non-GAAP adjusted operating margin</td><td>-66.5%</td><td>-43.3%</td><td>22.3%</td><td></td><td>-23.2 points</td><td></td><td>-65.6 points</td></tr></table>
Reconciliations of non-GAAP adjusted measures are presented under "Non-GAAP Adjusted Results" below. Net Operating Revenues by Operating Segment Information about our net operating revenues by operating segment as a percentage of Company net operating revenues is as follows: |
2,008 | In what year is Net investment gains (losses) positive? | Note 2 – Earnings Per Share The weighted average number of shares outstanding used to compute earnings per common share were as follows (in millions):
<table><tr><td></td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Weighted average common shares outstanding for basic computations</td><td>284.5</td><td>287.8</td><td>299.3</td></tr><tr><td>Weighted average dilutive effect of equity awards</td><td>2.3</td><td>2.8</td><td>3.8</td></tr><tr><td>Weighted average common shares outstanding for diluted computations</td><td>286.8</td><td>290.6</td><td>303.1</td></tr></table>
We compute basic and diluted earnings per common share by dividing net earnings by the respective weighted average number of common shares outstanding for the periods presented. Our calculation of diluted earnings per common share also includes the dilutive effects for the assumed vesting of outstanding restricted stock units (RSUs), performance stock units (PSUs) and exercise of outstanding stock options based on the treasury stock method. There were no significant anti-dilutive equity awards for the years ended December 31, 2018, 2017 and 2016. Note 3 – Acquisition and Divestitures Consolidation of AWE Management Limited On August 24, 2016, we increased our ownership interest in the AWE joint venture, which operates the United Kingdom’s nuclear deterrent program, from 33% to 51%. Consequently, we began consolidating AWE and our operating results include 100% of AWE’s sales and 51% of its operating profit. Prior to increasing our ownership interest, we accounted for our investment in AWE using the equity method of accounting. Under the equity method, we recognized only 33% of AWE’s earnings or losses and no sales. Accordingly, prior to August 24, 2016, the date we obtained control, we recorded 33% of AWE’s net earnings in our operating results and subsequent to August 24, 2016, we recognized 100% of AWE’s sales and 51% of its operating profit. We accounted for this transaction as a “step acquisition” (as defined by U. S. GAAP), which requires us to consolidate and record the assets and liabilities of AWE at fair value. Accordingly, we recorded intangible assets of $243 million related to customer relationships, $32 million of net liabilities, and noncontrolling interests of $107 million. The intangible assets are being amortized over a period of eight years in accordance with the underlying pattern of economic benefit reflected by the future net cash flows. In 2016, we recognized a non-cash net gain of $104 million associated with obtaining a controlling interest in AWE, which consisted of a $127 million pretax gain recognized in the operating results of our Space business segment and $23 million of tax-related items at our corporate office. The gain represented the fair value of our 51% interest in AWE, less the carrying value of our previously held investment in AWE and deferred taxes. The gain was recorded in other income, net on our consolidated statements of earnings. The fair value of AWE (including the intangible assets), our controlling interest, and the noncontrolling interests were determined using the income approach. Divestiture of the Information Systems & Global Solutions Business On August 16, 2016, we divested our former IS&GS business, which merged with Leidos, in a Reverse Morris Trust transaction (the “Transaction”). The Transaction was completed in a multi-step process pursuant to which we initially contributed the IS&GS business to Abacus Innovations Corporation (Abacus), a wholly owned subsidiary of Lockheed Martin created to facilitate the Transaction, and the common stock of Abacus was distributed to participating Lockheed Martin stockholders through an exchange offer. Under the terms of the exchange offer, Lockheed Martin stockholders had the option to exchange shares of Lockheed Martin common stock for shares of Abacus common stock. At the conclusion of the exchange offer, all shares of Abacus common stock were exchanged for 9,369,694 shares of Lockheed Martin common stock held by Lockheed Martin stockholders that elected to participate in the exchange. The shares of Lockheed Martin common stock that were exchanged and accepted were retired, reducing the number of shares of our common stock outstanding by approximately 3%. Following the exchange offer, Abacus merged with a subsidiary of Leidos, with Abacus continuing as the surviving corporation and a wholly-owned subsidiary of Leidos. As part of the merger, each share of Abacus common stock was automatically converted into one share of Leidos common stock. We did not receive any shares of Leidos common stock as part of the Transaction and do not hold any shares of Leidos or Abacus common stock following the Transaction. Based on an opinion of outside tax counsel, subject to customary qualifications and based on factual representations, the exchange offer and merger will qualify as tax-free transactions to Lockheed Martin and its stockholders, except to the extent that cash was paid to Lockheed Martin stockholders in lieu of fractional shares. In connection with the Transaction, Abacus borrowed an aggregate principal amount of approximately $1.84 billion under term loan facilities with third party financial institutions, the proceeds of which were used to make a one-time special cash payment of $1.80 billion to Lockheed Martin and to pay associated borrowing fees and expenses. The entire special cash payment was used to repay debt, pay dividends and repurchase stock during the third and fourth quarters of 2016. The obligations under the Abacus term loan facilities were guaranteed by Leidos as part of the Transaction. In response to the economic crisis and unusual financial market events that occurred in 2008 and continued into 2009, we decided to utilize excess debt capacity. The Holding Company completed three debt issuances in 2009. The Holding Company issued $397 million of floating rate senior notes in March 2009, $1.3 billion of senior notes in May 2009, and $500 million of junior subordinated debt securities in July 2009. In February 2009, in connection with the initial settlement of the stock purchase contracts issued as part of the common equity units sold in June 2005, the Holding Company issued common stock for $1.0 billion. The proceeds from these equity and debt issuances were used for general corporate purposes and have resulted in increased investments and cash and cash equivalents held within Banking, Corporate & Other. Operating earnings available to common shareholders improved by $114 million, of which $254 million was due to MetLife Bank and its acquisitions of a residential mortgage origination and servicing business and a reverse mortgage business, both during 2008. Excluding the impact of MetLife Bank, our operating earnings available to common shareholders decreased $140 million, primarily due to lower net investment income, partially offset by the impact of a lower effective tax rate. The lower effective tax rate provided an increased benefit of $139 million from the prior year. This benefit was the result of a partial settlement of certain prior year tax audit issues and increased utilization of tax preferenced investments, which provide tax credits and deductions. Excluding a $68 million increase from MetLife Bank, net investment income decreased $283 million, which was primarily due a decrease of $287 million due to lower yields, partially offset by an increase of $4 million due to an increase in average invested assets. Consistent with the consolidated results of operations discussion above, yields were adversely impacted by the severe downturn in the global financial markets, which primarily impacted fixed maturity securities and real estate joint ventures. The increased average invested asset base was due to cash flows from debt issuances during 2009. Our investments primarily include structured finance securities, investment grade corporate fixed maturity securities, U. S. Treasury, agency and government guaranteed fixed maturity securities and mortgage loans. In addition, our investment portfolio includes the excess capital not allocated to the segments. Accordingly, it includes a higher allocation to certain other invested asset classes to provide additional diversification and opportunity for long-term yield enhancement including leveraged leases, other limited partnership interests, real estate, real estate joint ventures and equity securities. After excluding the impact of a $394 million increase from MetLife Bank, other expenses increased by $20 million. Deferred compensation costs, which are tied to equity market performance, were higher due to a significant market rebound. We also had an increase in costs associated with the implementation of our Operational Excellence initiative. These increases were partially offset by lower postemployment related costs and corporate-related expenses, specifically legal costs. Legal costs were lower largely due to the prior year commutation of asbestos policies. In addition, interest expense declined slightly as a result of rate reductions on variable rate collateral financing arrangements offset by debt issuances in 2009 and 2008. Consolidated Results of Operations Year Ended December 31, 2008 compared with the Year Ended December 31, 2007
<table><tr><td></td><td colspan="2">Years Ended December 31,</td><td></td><td></td></tr><tr><td></td><td>2008</td><td>2007</td><td>Change</td><td>% 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>Premiums</td><td>$25,914</td><td>$22,970</td><td>$2,944</td><td>12.8%</td></tr><tr><td>Universal life and investment-type product policy fees</td><td>5,381</td><td>5,238</td><td>143</td><td>2.7%</td></tr><tr><td>Net investment income</td><td>16,291</td><td>18,057</td><td>-1,766</td><td>-9.8%</td></tr><tr><td>Other revenues</td><td>1,586</td><td>1,465</td><td>121</td><td>8.3%</td></tr><tr><td>Net investment gains (losses)</td><td>1,812</td><td>-578</td><td>2,390</td><td>413.5%</td></tr><tr><td>Total revenues</td><td>50,984</td><td>47,152</td><td>3,832</td><td>8.1%</td></tr><tr><td> Expenses</td><td></td><td></td><td></td><td></td></tr><tr><td>Policyholder benefits and claims and policyholder dividends</td><td>29,188</td><td>25,506</td><td>3,682</td><td>14.4%</td></tr><tr><td>Interest credited to policyholder account balances</td><td>4,788</td><td>5,461</td><td>-673</td><td>-12.3%</td></tr><tr><td>Interest credited to bank deposits</td><td>166</td><td>200</td><td>-34</td><td>-17.0%</td></tr><tr><td>Capitalization of DAC</td><td>-3,092</td><td>-3,064</td><td>-28</td><td>-0.9%</td></tr><tr><td>Amortization of DAC and VOBA</td><td>3,489</td><td>2,250</td><td>1,239</td><td>55.1%</td></tr><tr><td>Interest expense</td><td>1,051</td><td>897</td><td>154</td><td>17.2%</td></tr><tr><td>Other expenses</td><td>10,333</td><td>10,122</td><td>211</td><td>2.1%</td></tr><tr><td>Total expenses</td><td>45,923</td><td>41,372</td><td>4,551</td><td>11.0%</td></tr><tr><td>Income before provision for income tax</td><td>5,061</td><td>5,780</td><td>-719</td><td>-12.4%</td></tr><tr><td>Provision for income tax expense (benefit)</td><td>1,580</td><td>1,675</td><td>-95</td><td>-5.7%</td></tr><tr><td>Income (loss) from continuing operations, net of income tax</td><td>3,481</td><td>4,105</td><td>-624</td><td>-15.2%</td></tr><tr><td>Income (loss) from discontinued operations, net of income tax</td><td>-203</td><td>360</td><td>-563</td><td>-156.4%</td></tr><tr><td>Net income (loss)</td><td>3,278</td><td>4,465</td><td>-1,187</td><td>-26.6%</td></tr><tr><td>Less: Net income (loss) attributable to noncontrolling interests</td><td>69</td><td>148</td><td>-79</td><td>-53.4%</td></tr><tr><td>Net income (loss) attributable to MetLife, Inc.</td><td>3,209</td><td>4,317</td><td>-1,108</td><td>-25.7%</td></tr><tr><td>Less: Preferred stock dividends</td><td>125</td><td>137</td><td>-12</td><td>-8.8%</td></tr><tr><td>Net income (loss) available to MetLife, Inc.’s common shareholders</td><td>$3,084</td><td>$4,180</td><td>$-1,096</td><td>-26.2%</td></tr></table>
policy issuance expenses and certain advertising costs. VOBA represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. For certain acquired blocks of business, the estimated fair value of the in-force contract obligations exceeded the book value of assumed in-force insurance policy liabilities, resulting in negative VOBA, which is presented separately from VOBA as an additional insurance liability included in other policy-related balances. The estimated fair value of the acquired liabilities is based on actuarially determined projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience on the purchased business may vary from these projections. The recovery of DAC and VOBA is dependent upon the future profitability of the related business. The Company will adopt new guidance regarding the accounting for DAC beginning in the first quarter of 2012 and will apply it retrospectively to all prior periods presented in its consolidated financial statements for all insurance contracts. See Note 1 of the Notes to the Consolidated Financial Statements. Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period which can result in significant fluctuations in amortization of DAC and VOBA. The Company’s practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these events and only changes the assumption when its long-term expectation changes. The effect of an increase/(decrease) by 100 basis points in the assumed future rate of return is reasonably likely to result in a decrease/(increase) in the DAC and VOBA amortization of approximately $161 million with an offset to the Company’s unearned revenue liability of approximately $26 million for this factor. The Company also periodically reviews other long-term assumptions underlying the projections of estimated gross margins and profits. These include investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, and expenses to administer business. Assumptions used in the calculation of estimated gross margins and profits which may have significantly changed are updated annually. If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross margins and profits to decrease. The Company’s most significant assumption updates resulting in a change to expected future gross margins and profits and the amortization of DAC and VOBA are due to revisions to expected future investment returns, expenses, in-force or persistency assumptions and policyholder dividends on participating traditional life contracts, variable and universal life contracts and annuity contracts. The Company expects these assumptions to be the ones most reasonably likely to cause significant changes in the future. Changes in these assumptions can be offsetting and the Company is unable to predict their movement or offsetting impact over time. At December 31, 2011, 2010 and 2009, DAC and VOBA for the Company was $28.0 billion, $27.1 billion and $19.1 billion, respectively. Amortization of DAC and VOBA associated with the variable and universal life and the annuity contracts was significantly impacted by movements in equity markets. The following chart illustrates the effect on DAC and VOBA of changing each of the respective assumptions, as well as updating estimated gross margins or profits with actual gross margins or profits during the years ended December 31, 2011, 2010 and 2009. Increases (decreases) in DAC and VOBA balances, as presented below, resulted in a corresponding decrease (increase) in amortization.
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td></td><td>2011</td><td>2010</td><td>2009</td></tr><tr><td></td><td colspan="3">(In millions)</td></tr><tr><td>Investment return</td><td>$-64</td><td>$-84</td><td>$22</td></tr><tr><td>Separate account balances</td><td>-145</td><td>23</td><td>-85</td></tr><tr><td>Net investment gain (loss)</td><td>-576</td><td>-124</td><td>712</td></tr><tr><td>Guaranteed Minimum Income Benefits</td><td>-15</td><td>84</td><td>187</td></tr><tr><td>Expense</td><td>-7</td><td>96</td><td>61</td></tr><tr><td>In-force/Persistency</td><td>-2</td><td>9</td><td>-118</td></tr><tr><td>Policyholder dividends and other</td><td>60</td><td>-203</td><td>154</td></tr><tr><td>Total</td><td>$-749</td><td>$-199</td><td>$933</td></tr></table>
The following represents significant items contributing to the changes to DAC and VOBA amortization in 2011: ‰ The decrease in equity markets during the year lowered separate account balances which led to a reduction in actual and expected future gross profits on variable universal life contracts and variable deferred annuity contracts resulting in an increase of $145 million in DAC and VOBA amortization. ‰ Changes in net investment gains (losses) resulted in the following changes in DAC and VOBA amortization: – Actual gross profits decreased as a result of an increase in liabilities associated with guarantee obligations on variable annuities, resulting in a decrease of DAC and VOBA amortization of $531 million, excluding the impact from the Company’s nonperformance risk and risk margins, which are described below. This decrease in actual gross profits was more than offset by freestanding derivative gains associated with the hedging of such guarantee obligations, which resulted in an increase in DAC and VOBA amortization of $847 million. – The widening of the Company’s nonperformance risk adjustment decreased the valuation of guarantee liabilities, increased actual gross profits and increased DAC and VOBA amortization by $260 million. This was partially offset by higher risk margins which increased the guarantee liability valuations, decreased actual gross profits and decreased DAC and VOBA amortization by $72 million. – The remainder of the impact of net investment gains (losses), which increased DAC amortization by $72 million, was primarily attributable to current period investment activities. The following represents significant items contributing to the changes to DAC and VOBA amortization in 2010: ‰ Changes in net investment gains (losses) resulted in the following changes in DAC and VOBA amortization: – Actual gross profits increased as a result of a decrease in liabilities associated with guarantee obligations on variable annuities, resulting in an increase of DAC and VOBA amortization of $197 million, excluding the impact from the Company’s nonperformance risk and risk margins, which are described below. This increase in actual gross profits was partially offset by freestanding derivative losses associated with the hedging of such guarantee obligations, which resulted in a decrease in DAC and VOBA amortization of $88 million. MetLife, Inc. Notes to the Consolidated Financial Statements — (Continued) The weighted average expected rate of return on plan assets for use in that plan’s valuation in 2012 is currently anticipated to be 7.00% for U. S. pension benefits and 6.22% for U. S. other postretirement benefits. The weighted average expected rate of return on plan assets for use in that plan’s valuation in 2012 is currently anticipated to be 2.05% for non-U. S. pension benefits and 6.54% for non-U. S. other postretirement benefits. The assumed healthcare costs trend rates used in measuring the APBO and net periodic benefit costs were as follows:
<table><tr><td></td><td colspan="2"> December 31,</td></tr><tr><td></td><td> 2011</td><td> 2010</td></tr><tr><td>Pre-and Post-Medicare eligible claims</td><td>7.3% in 2012, gradually decreasing each year until 2083 reaching the ultimate rate of 4.3%.</td><td>7.8% in 2011, gradually decreasing each year until 2083 reaching the ultimate rate of 4.4%.</td></tr></table>
Assumed healthcare costs trend rates may have a significant effect on the amounts reported for healthcare plans. A 1% change in assumed healthcare costs trend rates would have the following effects: |
85,951 | What is the sum of Capital lease obligations for payments due by period ? (in thousand) | REPUBLIC SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED approximately $32 million of federal tax payments were deferred and paid in 2009 as a result of the Allied acquisition. The following table summarizes the activity in our gross unrecognized tax benefits for the years ended December 31:
<table><tr><td></td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Balance at beginning of year</td><td>$242.2</td><td>$611.9</td><td>$23.2</td></tr><tr><td>Additions due to the Allied acquisition</td><td>-</td><td>13.3</td><td>582.9</td></tr><tr><td>Additions based on tax positions related to current year</td><td>2.8</td><td>3.9</td><td>10.6</td></tr><tr><td>Reductions for tax positions related to the current year</td><td>-</td><td>-</td><td>-5.1</td></tr><tr><td>Additions for tax positions of prior years</td><td>7.5</td><td>5.6</td><td>2.0</td></tr><tr><td>Reductions for tax positions of prior years</td><td>-7.4</td><td>-24.1</td><td>-1.3</td></tr><tr><td>Reductions for tax positions resulting from lapse of statute of limitations</td><td>-10.4</td><td>-0.5</td><td>-0.4</td></tr><tr><td>Settlements</td><td>-11.9</td><td>-367.9</td><td>-</td></tr><tr><td>Balance at end of year</td><td>$222.8</td><td>$242.2</td><td>$611.9</td></tr></table>
New accounting guidance for business combinations became effective for our 2009 financial statements. This new guidance changed the treatment of acquired uncertain tax liabilities. Under previous guidance, changes in acquired uncertain tax liabilities were recognized through goodwill. Under the new guidance, subsequent changes in acquired unrecognized tax liabilities are recognized through the income tax provision. As of December 31, 2010, $206.5 million of the $222.8 million of unrecognized tax benefits related to tax positions taken by Allied prior to the 2008 acquisition. Included in the balance at December 31, 2010 and 2009 are approximately $209.1 million and $217.6 million of unrecognized tax benefits (net of the federal benefit on state issues) that, if recognized, would affect the effective income tax rate in future periods. During 2010, the IRS concluded its examination of our 2005 and 2007 tax years. The conclusion of this examination reduced our gross unrecognized tax benefits by approximately $1.9 million. We also resolved various state matters during 2010 that, in the aggregate, reduced our gross unrecognized tax benefits by approximately $10.0 million. During 2009, we settled our outstanding tax dispute related to Allied’s risk management companies (see – Risk Management Companies) with both the Department of Justice (DOJ) and the Internal Revenue Service (IRS). This settlement reduced our gross unrecognized tax benefits by approximately $299.6 million. During 2009, we also settled with the IRS, through an accounting method change, our outstanding tax dispute related to intercompany insurance premiums paid to Allied’s captive insurance company. This settlement reduced our gross unrecognized tax benefits by approximately $62.6 million. In addition to these federal matters, we also resolved various state matters that, in the aggregate, reduced our gross unrecognized tax benefits during 2009 by approximately $5.8 million. We recognize interest and penalties as incurred within the provision for income taxes in our consolidated statements of income. Related to the unrecognized tax benefits previously noted, we accrued interest of $19.2 million during 2010 and, in total as of December 31, 2010, have recognized a liability for penalties of $1.2 million and interest of $99.9 million. During 2009, we accrued interest of $24.5 million and, in total at December 31, 2009, had recognized a liability for penalties of $1.5 million and interest of $92.3 million. During 2008, we accrued penalties of $0.2 million and interest of $5.2 million and, in total at December 31, 2008, had recognized a liability for penalties of $88.1 million and interest of $180.0 million. NONREGULATED OPERATING MARGINS The following table details the changes in nonregulated revenue and margin included in continuing operations:
<table><tr><td> (Millions of Dollars)</td><td>2005</td><td>2004</td><td>2003</td></tr><tr><td>Nonregulated and other revenue</td><td>$74</td><td>$75</td><td>$134</td></tr><tr><td>Nonregulated cost of goods sold</td><td>-25</td><td>-29</td><td>-81</td></tr><tr><td>Nonregulated margin</td><td>$49</td><td>$46</td><td>$53</td></tr></table>
2004 Comparison to 2003 Nonregulated revenue decreased in 2004, due primarily to the discontinued consolidation of an investment in an independent power-producing entity that was no longer majority owned. NON-FUEL OPERATING EXPENSES AND OTHER ITEMS Other Utility Operating and Maintenance Expenses Other operating and maintenance expenses for 2005 increased by approximately $87 million, or 5.5 percent, compared with 2004. An outage at the Monticello nuclear plant and higher outage costs at Prairie Island in 2005 increased costs by approximately $26 million. Employee benefit costs were higher in 2005, primarily due to increased pension benefits and long-term disability costs. Also contributing to the increase were higher uncollectible receivable costs, attributable in part to modifications to the bankruptcy laws, higher fuel prices and certain changes in the credit and collections process. Other operating and maintenance expenses for 2004 increased by approximately $21 million, or 1.4 percent, compared with 2003. Of the increase, $12 million was incurred to assist with the storm damage repair in Florida and was offset by increased revenue. The remaining increase of $9 million is primarily due to higher electric service reliability costs, higher information technology costs, higher plant-related costs, higher costs related to a customer billing system conversion and increased costs primarily related to compliance with the Sarbanes-Oxley Act of 2002. The higher costs were partially offset by lower employee benefit and compensation costs and lower nuclear plant outage costs
<table><tr><td> (Millions of Dollars)</td><td>2005 vs. 2004</td><td>2004 vs. 2003</td></tr><tr><td>Higher (lower) employee benefit costs</td><td>$31</td><td>$-12</td></tr><tr><td>Higher (lower) nuclear plant outage costs</td><td>26</td><td>-13</td></tr><tr><td>Higher uncollectible receivable costs</td><td>19</td><td>2</td></tr><tr><td>Higher donations to energy assistance programs</td><td>4</td><td>1</td></tr><tr><td>Higher mutual aid assistance costs</td><td>1</td><td>12</td></tr><tr><td>Higher electric service reliability costs</td><td>9</td><td>9</td></tr><tr><td>Higher (lower) information technology costs</td><td>-6</td><td>8</td></tr><tr><td>Higher (lower) plant-related costs</td><td>-7</td><td>4</td></tr><tr><td>Higher costs related to customer billing system conversion</td><td>4</td><td>4</td></tr><tr><td>Higher costs to comply with Sarbanes-Oxley Act of 2002</td><td>—</td><td>4</td></tr><tr><td>Other</td><td>6</td><td>2</td></tr><tr><td>Total operating and maintenance expense increase</td><td>$87</td><td>$21</td></tr></table>
Other Nonregulated Operating and Maintenance Expenses Other nonregulated operating and maintenance expenses decreased $16 million, or 35.4 percent, in 2005 compared with 2004, primarily due to the accrual of $18 million in 2004 for a settlement agreement related to shareholder lawsuits. Other nonregulated operating and maintenance expenses decreased $9 million, or 17.5 percent, in 2004 compared with 2003. This decrease resulted from the dissolution of Planergy International and the discontinued consolidation of an investment in an independent powerproducing entity that was no longer majority owned after the divestiture of NRG. Depreciation and Amortization Depreciation and amortization expense for 2005 increased by approximately $61 million, or 8.7 percent, compared with 2004. The changes were primarily due to the installation of new steam generators at Unit 1 of the Prairie Island nuclear plant and software system additions, both of which have relatively short depreciable lives compared with other capital additions. The Prairie Island steam generators are being depreciated over the remaining life of the plant operating license, which expires in 2013. In addition, the Minnesota Renewable Development Fund and renewable cost-recovery amortization, which is recovered in revenue as a non-fuel rider and does not have an impact on net income, increased over 2004. The increase was partially offset by the changes in useful lives and net salvage rates approved by Minnesota regulators in August 2005. Depreciation and amortization expense for 2004 decreased by $21 million, or 2.9 percent, compared with 2003. The reduction is largely due to several regulatory decisions. In 2004, as a result of a Minnesota Public Utilities Commission (MPUC) order, NSP-Minnesota modified its decommissioning expense recognition, which served to reduce decommissioning accruals by approximately $18 million in 2004 compared with 2003. In addition, effective July 1, 2003, the Colorado Public Utilities Commission (CPUC) lengthened the depreciable lives of certain electric utility plant at PSCo as a part of the general Colorado rate case, reducing annual depreciation expense by $20 million. PSCo experienced the full impact of the annual reduction in 2004, resulting in a decrease in depreciation expense of $10 million for 2004 compared with 2003. These decreases were partially offset by plant additions. Contractual Obligations and Other Commitments — Xcel Energy has contractual obligations and other commitments that will need to be funded in the future, in addition to its capital expenditure programs. The following is a summarized table of contractual obligations and other commercial commitments at Dec. 31, 2007. See additional discussion in the consolidated statements of capitalization and Notes 4, 5, and 15 to the consolidated financial statements.
<table><tr><td> </td><td colspan="5"> Payments Due by Period</td></tr><tr><td> </td><td> Total</td><td> Less than 1 Year</td><td> 1 to 3 Years</td><td> 4 to 5 Years</td><td> After 5 Years</td></tr><tr><td> </td><td colspan="5"> (Thousands of Dollars) </td></tr><tr><td>Long-term debt, principal and interest payments</td><td>$12,599,312</td><td>$1,065,530</td><td>$1,849,818</td><td>$1,760,489</td><td>$7,923,475</td></tr><tr><td>Capital lease obligations</td><td>85,951</td><td>6,139</td><td>11,794</td><td>11,139</td><td>56,879</td></tr><tr><td>Operating leases<sup>(a)</sup>,<sup>(b)</sup></td><td>1,439,346</td><td>104,557</td><td>200,000</td><td>161,743</td><td>973,046</td></tr><tr><td>Unconditional purchase obligations</td><td>12,047,364</td><td>2,448,155</td><td>3,321,234</td><td>2,247,977</td><td>4,029,998</td></tr><tr><td>Other long-term obligations — WYCO investment</td><td>121,000</td><td>108,000</td><td>13,000</td><td>—</td><td>—</td></tr><tr><td>Other long-term obligations<sup>(c)</sup></td><td>165,847</td><td>31,589</td><td>42,775</td><td>38,964</td><td>52,519</td></tr><tr><td>Payments to vendors in process</td><td>145,059</td><td>145,059</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Short-term debt</td><td>1,088,560</td><td>1,088,560</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total contractual cash obligations<sup>(d)</sup></td><td>$27,692,439</td><td>$4,997,589</td><td>$5,438,621</td><td>$4,220,312</td><td>$13,035,917</td></tr></table>
(a) Under some leases, Xcel Energy would have to sell or purchase the property that it leases if it chose to terminate before the scheduled lease expiration date. Most of Xcel Energy’s railcar, vehicle and equipment and aircraft leases have these terms. At Dec. 31, 2006, the amount that Xcel Energy would have to pay if it chose to terminate these leases was approximately $176.8 million. In addition, at the end of the equipment leases’ terms, each lease must be extended, equipment purchased for the greater of the fair value or unamortized value or equipment sold to a third party with Xcel Energy making up any deficiency between the sales price and the unamortized value. (b) Included in operating lease payments are $76.6 million, $151.7 million, $124.5 million and $916.6 million, for the less than 1 year, 1-3 years, 4-5 years and after 5 years categories, respectively, pertaining to five purchase power agreements that were accounted for as operating leases. (c) Included in other long-term obligations are tax, penalties and interest related to unrecognized tax benefits recorded according to FIN 48. (d) Xcel Energy and its subsidiaries have contracts providing for the purchase and delivery of a significant portion of its current coal, nuclear fuel and natural gas requirements. Additionally, the utility subsidiaries of Xcel Energy have entered into agreements with utilities and other energy suppliers for purchased power to meet system load and energy requirements, replace generation from company-owned units under maintenance and during outages, and meet operating reserve obligations. Certain contractual purchase obligations are adjusted based on indices. The effects of price changes are mitigated through cost-of-energy adjustment mechanisms. (e) Xcel Energy also has outstanding authority under contracts and blanket purchase orders to purchase up to approximately $1.6 billion of goods and services through the year 2050, in addition to the amounts disclosed in this table and in the forecasted capital expenditures. Xcel Energy has also executed five additional purchase power agreements that are conditional upon achievement of certain conditions, including becoming operational. Estimated payments under these conditional obligations are $52.8 million, $165.7 million, $177.9 million and $1.7 billion, respectively, for the less than 1 year, 1-3 years, 4-5 years and after 5 years categories. Common Stock Dividends — Future dividend levels will be dependent on Xcel Energy’s results of operations, financial position, cash flows and other factors, and will be evaluated by the Xcel Energy board of directors. Xcel Energy’s objective is to increase the annual dividend in the range of 2 percent to 4 percent per year. Xcel Energy’s dividend policy balances: ? Projected cash generation from utility operations; ? Projected capital investment in the utility businesses; ? A reasonable rate of return on shareholder investment; and ? The impact on Xcel Energy’s capital structure and credit ratings. In addition, there are certain statutory limitations that could affect dividend levels. Federal law places certain limits on the ability of public utilities within a holding company system to declare dividends. Specifically, under the Federal Power Act, a public utility may not pay dividends from any funds properly included in a capital account. The cash to pay dividends to Xcel Energy shareholders is primarily derived from dividends received from its utility subsidiaries. The utility subsidiaries are generally limited in the amount of dividends allowed by state regulatory commissions to be paid to the holding company. The limitation is imposed through equity ratio limitations that range from 30 percent to 60 percent. Some utility subsidiaries must comply with bond indenture covenants or restrictions under credit agreements for debt to total capitalization ratios. Results of Operations The following table summarizes the diluted EPS for Xcel Energy and subsidiaries: |
-8,285 | What is the sum of the Total expenses in the years where Other income is positive? (in million) | MARATHON OIL CORPORATION Notes to Consolidated Financial Statements Operating lease rental expense was:
<table><tr><td><i>(In millions)</i></td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td>Minimum rental<sup>(a)</sup></td><td>$245</td><td>$209</td><td>$172</td></tr><tr><td>Contingent rental</td><td>22</td><td>33</td><td>28</td></tr><tr><td>Sublease rentals</td><td>–</td><td>–</td><td>-7</td></tr><tr><td>Net rental expense</td><td>$267</td><td>$242</td><td>$193</td></tr></table>
(a) Excludes $5 million, $8 million and $9 million paid by United States Steel in 2008, 2007 and 2006 on assumed leases.27. Contingencies and Commitments We are the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Certain of these matters are discussed below. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to our consolidated financial statements. However, management believes that we will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably. Environmental matters – We are subject to federal, state, local and foreign laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for noncompliance. At December 31, 2008 and 2007, accrued liabilities for remediation totaled $111 million and $108 million. It is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties that may be imposed. Receivables for recoverable costs from certain states, under programs to assist companies in clean-up efforts related to underground storage tanks at retail marketing outlets, were $60 and $66 million at December 31, 2008 and 2007. We are a defendant, along with other refining companies, in 20 cases arising in three states alleging damages for methyl tertiary-butyl ether (“MTBE”) contamination. We have also received seven Toxic Substances Control Act notice letters involving potential claims in two states. Such notice letters are often followed by litigation. Like the cases that were settled in 2008, the remaining MTBE cases are consolidated in a multidistrict litigation in the Southern District of New York for pretrial proceedings. Nineteen of the remaining cases allege damages to water supply wells, similar to the damages claimed in the settled cases. In the other remaining case, the State of New Jersey is seeking natural resources damages allegedly resulting from contamination of groundwater by MTBE. This is the only MTBE contamination case in which we are a defendant and natural resources damages are sought. We are vigorously defending these cases. We, along with a number of other defendants, have engaged in settlement discussions related to the majority of the cases in which we are a defendant. We do not expect our share of liability, if any, for the remaining cases to significantly impact our consolidated results of operations, financial position or cash flows. A lawsuit filed in the United States District Court for the Southern District of West Virginia alleges that our Catlettsburg, Kentucky, refinery distributed contaminated gasoline to wholesalers and retailers for a period prior to August, 2003, causing permanent damage to storage tanks, dispensers and related equipment, resulting in lost profits, business disruption and personal and real property damages. Following the incident, we conducted remediation operations at affected facilities, and we deny that any permanent damages resulted from the incident. Class action certification was granted in August 2007. We have entered into a tentative settlement agreement in this case. Notice of the proposed settlement has been sent to the class members. Approval by the court after a fairness hearing is required before the settlement can be finalized. The fairness hearing is scheduled in the first quarter of 2009. The proposed settlement will not significantly impact our consolidated results of operations, financial position or cash flows. Guarantees – We have provided certain guarantees, direct and indirect, of the indebtedness of other companies. Under the terms of most of these guarantee arrangements, we would be required to perform should the guaranteed party fail to fulfill its obligations under the specified arrangements. In addition to these financial guarantees, we also have various performance guarantees related to specific agreements. Supplementary Information on Oil and Gas Producing Activities (Unaudited) CONTINUED Results of Operations for Oil and Gas Producing Activities
<table><tr><td colspan="2"><i>(In millions)</i></td><td>United States</td><td>Europe</td><td>Africa</td><td>Other Int’l</td><td>Total</td></tr><tr><td>2008</td><td>Revenues and other income:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Sales<sup>(a)</sup></td><td>$2,619</td><td>$1,283</td><td>$1,930</td><td>$–</td><td>$5,832</td></tr><tr><td></td><td>Transfers</td><td>547</td><td>1,062</td><td>1,170</td><td>–</td><td>2,779</td></tr><tr><td></td><td>Other income<sup>(b)</sup></td><td>1</td><td>254</td><td>–</td><td>–</td><td>255</td></tr><tr><td></td><td>Total revenues</td><td>3,167</td><td>2,599</td><td>3,100</td><td>–</td><td>8,866</td></tr><tr><td></td><td>Expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Production costs</td><td>-692</td><td>-319</td><td>-145</td><td>–</td><td>-1,156</td></tr><tr><td></td><td>Transportation costs</td><td>-153</td><td>-59</td><td>-36</td><td>–</td><td>-248</td></tr><tr><td></td><td>Exploration expenses</td><td>-238</td><td>-88</td><td>-47</td><td>-117</td><td>-490</td></tr><tr><td></td><td>Depreciation, depletion and amortization</td><td>-671</td><td>-512</td><td>-144</td><td>-1</td><td>-1,328</td></tr><tr><td></td><td>Administrative expenses</td><td>-49</td><td>-15</td><td>-5</td><td>-37</td><td>-106</td></tr><tr><td></td><td>Total expenses</td><td>-1,803</td><td>-993</td><td>-377</td><td>-155</td><td>-3,328</td></tr><tr><td></td><td>Other production-related income (loss)<sup>(c)</sup></td><td>-1</td><td>35</td><td>1</td><td>–</td><td>35</td></tr><tr><td></td><td>Results before income taxes</td><td>1,363</td><td>1,641</td><td>2,724</td><td>-155</td><td>5,573</td></tr><tr><td></td><td>Income tax (provision) benefit</td><td>-516</td><td>-598</td><td>-1,892</td><td>58</td><td>-2,948</td></tr><tr><td></td><td>Results of continuing operations</td><td>$847</td><td>$1,043</td><td>$832</td><td>$-97</td><td>$2,625</td></tr><tr><td>2007</td><td>Revenues and other income:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Sales<sup>(a)</sup></td><td>$2,110</td><td>$1,198</td><td>$1,380</td><td>$–</td><td>$4,688</td></tr><tr><td></td><td>Transfers</td><td>299</td><td>60</td><td>1,031</td><td>–</td><td>1,390</td></tr><tr><td></td><td>Other income<sup>(b)</sup></td><td>3</td><td>–</td><td>2</td><td>7</td><td>12</td></tr><tr><td></td><td>Total revenues</td><td>2,412</td><td>1,258</td><td>2,413</td><td>7</td><td>6,090</td></tr><tr><td></td><td>Expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Production costs</td><td>-550</td><td>-234</td><td>-164</td><td>–</td><td>-948</td></tr><tr><td></td><td>Transportation costs</td><td>-122</td><td>-39</td><td>-28</td><td>–</td><td>-189</td></tr><tr><td></td><td>Exploration expenses</td><td>-274</td><td>-23</td><td>-118</td><td>-37</td><td>-452</td></tr><tr><td></td><td>Depreciation, depletion and amortization</td><td>-486</td><td>-278</td><td>-130</td><td>–</td><td>-894</td></tr><tr><td></td><td>Administrative expenses</td><td>-56</td><td>-11</td><td>-6</td><td>-34</td><td>-107</td></tr><tr><td></td><td>Total expenses</td><td>-1,488</td><td>-585</td><td>-446</td><td>-71</td><td>-2,590</td></tr><tr><td></td><td>Other production-related income<sup>(c)</sup></td><td>–</td><td>103</td><td>6</td><td>–</td><td>109</td></tr><tr><td></td><td>Results before income taxes</td><td>924</td><td>776</td><td>1,973</td><td>-64</td><td>3,609</td></tr><tr><td></td><td>Income tax (provision) benefit</td><td>-343</td><td>-377</td><td>-1,368</td><td>24</td><td>-2,064</td></tr><tr><td></td><td>Results of continuing operations</td><td>$581</td><td>$399</td><td>$605</td><td>$-40</td><td>$1,545</td></tr><tr><td></td><td>Results of discontinued operations</td><td>$–</td><td>$–</td><td>$–</td><td>$8</td><td>$8</td></tr><tr><td>2006</td><td>Revenues and other income:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Sales<sup>(a)</sup></td><td>$2,329</td><td>$1,240</td><td>$1,300</td><td>$–</td><td>$4,869</td></tr><tr><td></td><td>Transfers</td><td>307</td><td>58</td><td>1,168</td><td>–</td><td>1,533</td></tr><tr><td></td><td>Other income<sup>(b)</sup></td><td>3</td><td>–</td><td>–</td><td>46</td><td>49</td></tr><tr><td></td><td>Total revenues</td><td>2,639</td><td>1,298</td><td>2,468</td><td>46</td><td>6,451</td></tr><tr><td></td><td>Expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td>Production costs</td><td>-512</td><td>-207</td><td>-126</td><td>–</td><td>-845</td></tr><tr><td></td><td>Transportation costs</td><td>-124</td><td>-44</td><td>-33</td><td>–</td><td>-201</td></tr><tr><td></td><td>Exploration expenses</td><td>-169</td><td>-29</td><td>-91</td><td>-73</td><td>-362</td></tr><tr><td></td><td>Depreciation, depletion and amortization</td><td>-458</td><td>-281</td><td>-127</td><td>–</td><td>-866</td></tr><tr><td></td><td>Administrative expenses</td><td>-41</td><td>-10</td><td>-6</td><td>-36</td><td>-93</td></tr><tr><td></td><td>Total expenses</td><td>-1,304</td><td>-571</td><td>-383</td><td>-109</td><td>-2,367</td></tr><tr><td></td><td>Other production-related income<sup>(c)</sup></td><td>–</td><td>73</td><td>1</td><td>–</td><td>74</td></tr><tr><td></td><td>Results before income taxes</td><td>1,335</td><td>800</td><td>2,086</td><td>-63</td><td>4,158</td></tr><tr><td></td><td>Income tax (provision) benefit</td><td>-489</td><td>-358</td><td>-1,457</td><td>4</td><td>-2,300</td></tr><tr><td></td><td>Results of continuing operations</td><td>$846</td><td>$442</td><td>$629</td><td>$-59</td><td>$1,858</td></tr><tr><td></td><td>Results of discontinued operations</td><td>$–</td><td>$–</td><td>$–</td><td>$273</td><td>$273</td></tr></table>
(a) Excludes noncash effects of changes in the fair value of certain natural gas sales contracts in the United Kingdom. (b) Includes net gain on disposal of assets. (c) Includes revenues, net of associated costs, from activities that are an integral part of our production operations which may include processing or transportation of third-party production, the purchase and subsequent resale of natural gas utilized for reservoir management and providing storage capacity. Supplementary Information on Oil and Gas Producing Activities (Unaudited) CONTINUED Summary of Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves
<table><tr><td><i>(In millions)</i></td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td>Sales and transfers of oil and gas produced, net of production, transportation and administrative costs</td><td>$-7,141</td><td>$-4,887</td><td>$-5,312</td></tr><tr><td>Net changes in prices and production, transportation and administrative costs related to future production</td><td>-18,290</td><td>12,845</td><td>-1,342</td></tr><tr><td>Extensions, discoveries and improved recovery, less related costs</td><td>663</td><td>1,816</td><td>1,290</td></tr><tr><td>Development costs incurred during the period</td><td>1,916</td><td>1,654</td><td>1,251</td></tr><tr><td>Changes in estimated future development costs</td><td>-1,584</td><td>-1,727</td><td>-527</td></tr><tr><td>Revisions of previous quantity estimates</td><td>53</td><td>290</td><td>1,319</td></tr><tr><td>Net changes in purchases and sales of minerals in place</td><td>-13</td><td>23</td><td>30</td></tr><tr><td>Accretion of discount</td><td>2,796</td><td>1,726</td><td>1,882</td></tr><tr><td>Net change in income taxes</td><td>12,805</td><td>-6,751</td><td>-660</td></tr><tr><td>Timing and other</td><td>-96</td><td>-12</td><td>-14</td></tr><tr><td>Net change for the year</td><td>-8,891</td><td>4,977</td><td>-2,083</td></tr><tr><td>Beginning of the year</td><td>13,495</td><td>8,518</td><td>10,601</td></tr><tr><td>End of year</td><td>$4,604</td><td>$13,495</td><td>$8,518</td></tr><tr><td>Net change for the year from discontinued operations</td><td>$–</td><td>$–</td><td>$-216</td></tr></table>
our refineries processed 944 mbpd of crude oil and 207 mbpd of other charge and blend stocks. The table below sets forth the location and daily crude oil refining capacity of each of our refineries as of December 31, 2008.
<table><tr><td><i>(Thousands of barrels per day)</i></td><td>2008</td></tr><tr><td>Garyville, Louisiana</td><td>256</td></tr><tr><td>Catlettsburg, Kentucky</td><td>226</td></tr><tr><td>Robinson, Illinois</td><td>204</td></tr><tr><td>Detroit, Michigan</td><td>102</td></tr><tr><td>Canton, Ohio</td><td>78</td></tr><tr><td>Texas City, Texas</td><td>76</td></tr><tr><td>St. Paul Park, Minnesota</td><td>74</td></tr><tr><td>TOTAL</td><td>1,016</td></tr></table>
Our refineries include crude oil atmospheric and vacuum distillation, fluid catalytic cracking, catalytic reforming, desulfurization and sulfur recovery units. The refineries process a wide variety of crude oils and produce numerous refined products, ranging from transportation fuels, such as reformulated gasolines, blendgrade gasolines intended for blending with fuel ethanol and ultra-low sulfur diesel fuel, to heavy fuel oil and asphalt. Additionally, we manufacture aromatics, cumene, propane, propylene, sulfur and maleic anhydride. Our refineries are integrated with each other via pipelines, terminals and barges to maximize operating efficiency. The transportation links that connect our refineries allow the movement of intermediate products between refineries to optimize operations, produce higher margin products and utilize our processing capacity efficiently. Our Garyville, Louisiana, refinery is located along the Mississippi River in southeastern Louisiana. The Garyville refinery processes heavy sour crude oil into products such as gasoline, distillates, sulfur, asphalt, propane, polymer grade propylene, isobutane and coke. In 2006, we approved an expansion of our Garyville refinery by 180 mbpd to 436 mbpd, with a currently projected cost of $3.35 billion (excluding capitalized interest). Construction commenced in early 2007 and is continuing on schedule. We estimate that, as of December 31, 2008, this project is approximately 75 percent complete. We expect to complete the expansion in late 2009. Our Catlettsburg, Kentucky, refinery is located in northeastern Kentucky on the western bank of the Big Sandy River, near the confluence with the Ohio River. The Catlettsburg refinery processes sweet and sour crude oils into products such as gasoline, asphalt, diesel, jet fuel, petrochemicals, propane, propylene and sulfur. Our Robinson, Illinois, refinery is located in the southeastern Illinois town of Robinson. The Robinson refinery processes sweet and sour crude oils into products such as multiple grades of gasoline, jet fuel, kerosene, diesel fuel, propane, propylene, sulfur and anode-grade coke. Our Detroit, Michigan, refinery is located near Interstate 75 in southwest Detroit. The Detroit refinery processes light sweet and heavy sour crude oils, including Canadian crude oils, into products such as gasoline, diesel, asphalt, slurry, propane, chemical grade propylene and sulfur. In 2007, we approved a heavy oil upgrading and expansion project at our Detroit, Michigan, refinery, with a current projected cost of $2.2 billion (excluding capitalized interest). This project will enable the refinery to process additional heavy sour crude oils, including Canadian bitumen blends, and will increase its crude oil refining capacity by about 15 percent. Construction began in the first half of 2008 and is presently expected to be complete in mid-2012. Our Canton, Ohio, refinery is located approximately 60 miles southeast of Cleveland, Ohio. The Canton refinery processes sweet and sour crude oils into products such as gasoline, diesel fuels, kerosene, propane, sulfur, asphalt, roofing flux, home heating oil and No.6 industrial fuel oil. Our Texas City, Texas, refinery is located on the Texas gulf coast approximately 30 miles south of Houston, Texas. The refinery processes sweet crude oil into products such as gasoline, propane, chemical grade propylene, slurry, sulfur and aromatics. Our St. Paul Park, Minnesota, refinery is located in St. Paul Park, a suburb of Minneapolis-St. Paul. The St. Paul Park refinery processes predominantly Canadian crude oils into products such as gasoline, diesel, jet fuel, kerosene, asphalt, propane, propylene and sulfur. a more complete explanation of our strategies to manage market risk related to commodity prices, see Quantitative and Qualitative Disclosures about Market Risk. We averaged 944 mbpd of crude oil throughput in 2008 and 1,010 mbpd in 2007. Total refinery throughputs averaged 1,151 mbpd in 2008 compared to 1,224 mbpd in 2007. Crude and total throughputs were lower in 2008 than in 2007 in part due to the effect Hurricane Gustav and Ike had on U. S. Gulf Coast operations in 2008. The following table includes certain key operating statistics for the RM&T segment for 2008 and 2007.
<table><tr><td> RM&T Operating Statistics</td><td>2008</td><td>2007</td></tr><tr><td>Refining and wholesale marketing gross margin<i>(Dollars per gallon)</i><sup>(a)</sup></td><td>$0.1166</td><td>$0.1848</td></tr><tr><td>Refined products sales volumes<i>(Thousands of barrels per day)</i></td><td>1,352</td><td>1,410</td></tr></table>
(a) Sales revenue less cost of refinery inputs (including transportation), purchased products and manufacturing expenses, including depreciation. IG segment income increased $170 million, or 129 percent in 2008 from 2007. The increase in income was primarily related to a full year of operation of the LNG production facility in Equatorial Guinea, which commenced operations in May 2007. We hold a 60 percent interest in the facility. Segment expenses increased slightly in 2008 as we continue to develop new technologies. In 2008, we spent $92 million on gas commercialization technologies, including completing construction of a gas-to-fuels demonstration plant. Such expense in 2007 was $42 million. Consolidated Results of Operations: 2007 compared to 2006 Revenues are summarized in the following table |
1,788 | What is the sum of Income taxes in 2008 and Municipal investments for LoanCommitments? (in million) | Citigroup’s repurchases are primarily from Government Sponsored Entities. The specific representations and warranties made by the Company depend on the nature of the transaction and the requirements of the buyer. Market conditions and credit-ratings agency requirements may also affect representations and warranties and the other provisions the Company may agree to in loan sales. In the event of a breach of the representations and warranties, the Company may be required to either repurchase the mortgage loans (generally at unpaid principal balance plus accrued interest) with the identified defects or indemnify (“make-whole”) the investor or insurer. The Company has recorded a repurchase reserve that is included in Other liabilities in the Consolidated Balance Sheet. In the case of a repurchase, the Company will bear any subsequent credit loss on the mortgage loans. The Company’s representations and warranties are generally not subject to stated limits in amount or time of coverage. However, contractual liability arises only when the representations and warranties are breached and generally only when a loss results from the breach. In the case of a repurchase, the loan is typically considered a creditimpaired loan and accounted for under SOP 03-3, “Accounting for Certain Loans and Debt Securities, Acquired in a Transfer” (now incorporated into ASC 310-30, Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality). These repurchases have not had a material impact on nonperforming loan statistics, because credit-impaired purchased SOP 03-3 loans are not included in nonaccrual loans. The Company estimates its exposure to losses from its obligation to repurchase previously sold loans based on the probability of repurchase or make-whole and an estimated loss given repurchase or make-whole. This estimate is calculated separately by sales vintage (i. e. , the year the loans were sold) based on a combination of historical trends and forecasted repurchases and losses considering the: (1) trends in requests by investors for loan documentation packages to be reviewed; (2) trends in recent repurchases and make-wholes; (3) historical percentage of claims made as a percentage of loan documentation package requests; (4) success rate in appealing claims; (5) inventory of unresolved claims; and (6) estimated loss given repurchase or make-whole, including the loss of principal, accrued interest, and foreclosure costs. The Company does not change its estimation methodology by counterparty, but the historical experience and trends are considered when evaluating the overall reserve. The request for loan documentation packages is an early indicator of a potential claim. During 2009, loan documentation package requests and the level of outstanding claims increased. In addition, our loss severity estimates increased during 2009 due to the impact of macroeconomic factors and recent experience. These factors contributed to a $493 million change in estimate for this reserve in 2009. As indicated above, the repurchase reserve is calculated by sales vintage. The majority of the repurchases in 2009 were from the 2006 and 2007 sales vintages, which also represent the vintages with the largest lossgiven-repurchase. An insignificant percentage of 2009 repurchases were from vintages prior to 2006, and this is expected to decrease, because those vintages are later in the credit cycle. Although early in the credit cycle, the Company has experienced improved repurchase and loss-given-repurchase statistics from the 2008 and 2009 vintages. In the case of a repurchase of a credit-impaired SOP 03-3 loan (now incorporated into ASC 310-30), the difference between the loan’s fair value and unpaid principal balance at the time of the repurchase is recorded as a utilization of the repurchase reserve. Payments to make the investor whole are also treated as utilizations and charged directly against the reserve. The provision for estimated probable losses arising from loan sales is recorded as an adjustment to the gain on sale, which is included in Other revenue in the Consolidated Statement of Income. A liability for representations and warranties is estimated when the Company sells loans and is updated quarterly. Any subsequent adjustment to the provision is recorded in Other revenue in the Consolidated Statement of Income. The activity in the repurchase reserve for the years ended December 31, 2009 and 2008 is as follows:
<table><tr><td>In millions of dollars</td><td>2009</td><td>2008</td></tr><tr><td>Balance, beginning of the year</td><td>$75</td><td>$2</td></tr><tr><td>Additions for new sales</td><td>33</td><td>23</td></tr><tr><td>Change in estimate</td><td>493</td><td>59</td></tr><tr><td>Utilizations</td><td>-119</td><td>-9</td></tr><tr><td>Balance, end of the year</td><td>$482</td><td>$75</td></tr></table>
Goodwill Goodwill represents an acquired company’s acquisition cost over the fair value of net tangible and intangible assets acquired. Goodwill is subject to annual impairment tests, whereby Goodwill is allocated to the Company’s reporting units and an impairment is deemed to exist if the carrying value of a reporting unit exceeds its estimated fair value. Furthermore, on any business dispositions, Goodwill is allocated to the business disposed of based on the ratio of the fair value of the business disposed of to the fair value of the reporting unit. Intangible Assets Intangible assets—including core deposit intangibles, present value of future profits, purchased credit card relationships, other customer relationships, and other intangible assets, but excluding MSRs—are amortized over their estimated useful lives. Intangible assets deemed to have indefinite useful lives, primarily certain asset management contracts and trade names, are not amortized and are subject to annual impairment tests. An impairment exists if the carrying value of the indefinite-lived intangible asset exceeds its fair value. For other Intangible assets subject to amortization, an impairment is recognized if the carrying amount is not recoverable and exceeds the fair value of the Intangible asset. Other Assets and Other Liabilities Other assets include, among other items, loans held-for-sale, deferred tax assets, equity-method investments, interest and fees receivable, premises and equipment, end-user derivatives in a net receivable position, repossessed assets, and other receivables. This table does not include: ? certain venture capital investments made by some of the Company’s private equity subsidiaries, as the Company accounts for these investments in accordance with the Investment Company Audit Guide; ? certain limited partnerships where the Company is the general partner and the limited partners have the right to replace the general partner or liquidate the funds; ? certain investment funds for which the Company provides investment management services and personal estate trusts for which the Company provides administrative, trustee and/or investment management services; ? VIEs structured by third parties where the Company holds securities in inventory. These investments are made on arm’s-length terms; and ? transferred assets to a VIE where the transfer did not qualify as a sale and where the Company did not have any other involvement that is deemed to be a variable interest with the VIE. These transfers are accounted for as secured borrowings by the Company. The asset balances for consolidated VIEs represent the carrying amounts of the assets consolidated by the Company. The carrying amount may represent the amortized cost or the current fair value of the assets depending on the legal form of the asset (e. g. , security or loan) and the Company’s standard accounting policies for the asset type and line of business. he asset balances for unconsolidated VIEs where the Company has significant involvement represent the most current information available to the Company. In most cases, the asset balances represent an amortized cost basis without regard to impairments in fair value, unless fair value information is readily available to the Company. For VIEs that obtain asset exposures synthetically through derivative instruments (for example, synthetic CDOs), the table includes the full original notional amount of the derivative as an asset. The maximum funded exposure represents the balance sheet carrying amount of the Company’s investment in the VIE. It reflects the initial amount of cash invested in the VIE plus any accrued interest and is adjusted for any impairments in value recognized in earnings and any cash principal payments received. The maximum exposure of unfunded positions represents the remaining undrawn committed amount, including liquidity and credit facilities provided by the Company, or the notional amount of a derivative instrument considered to be a variable interest, adjusted for any declines in fair value recognized in earnings. In certain transactions, the Company has entered into derivative instruments or other arrangements that are not considered variable interests in the VIE (e. g. , interest rate swaps, crosscurrency swaps, or where the Company is the purchaser of credit protection under a credit default swap or total return swap where the Company pays the total return on certain assets to the SPE). Receivables under such arrangements are not included in the maximum exposure amounts. Funding Commitments for Significant Unconsolidated VIEs— Liquidity Facilities and Loan Commitments The following table presents the notional amount of liquidity facilities and loan commitments that are classified as funding commitments in the SPE table as of December 31, 2009:
<table><tr><td>In millions of dollars</td><td>Liquidity Facilities</td><td>LoanCommitments</td></tr><tr><td>Citicorp</td><td></td><td></td></tr><tr><td>Citi-administered asset-backed commercial paper conduits (ABCP)</td><td>$20,486</td><td>$1,718</td></tr><tr><td>Third-party commercial paper conduits</td><td>353</td><td>—</td></tr><tr><td>Asset-based financing</td><td>—</td><td>549</td></tr><tr><td>Municipal securities tender option bond trusts (TOBs)</td><td>6,304</td><td>—</td></tr><tr><td>Municipal investments</td><td>—</td><td>18</td></tr><tr><td>Other</td><td>10</td><td>23</td></tr><tr><td>Total Citicorp</td><td>$27,153</td><td>$2,308</td></tr><tr><td>Citi Holdings</td><td></td><td></td></tr><tr><td>Citi-administered asset-backed commercial paper conduits (ABCP)</td><td>$11,978</td><td>$1,682</td></tr><tr><td>Third-party commercial paper conduits</td><td>252</td><td>—</td></tr><tr><td>Collateralized loan obligations (CLOs)</td><td>—</td><td>19</td></tr><tr><td>Asset-based financing</td><td>—</td><td>1,311</td></tr><tr><td>Municipal investments</td><td>—</td><td>386</td></tr><tr><td>Investment Funds</td><td>—</td><td>93</td></tr><tr><td>Other</td><td>—</td><td>257</td></tr><tr><td>Total CitiHoldings</td><td>$12,230</td><td>$3,748</td></tr><tr><td>Total Citigroup funding commitments</td><td>$39,383</td><td>$6,056</td></tr></table>
TRANSACTION SERVICES Transaction Services is composed of Treasury and Trade Solutions (TTS) and Securities and Fund Services (SFS). TTS provides comprehensive cash management and trade finance for corporations, financial institutions and public sector entities worldwide. SFS provides custody and funds services to investors such as insurance companies and mutual funds, clearing services to intermediaries such as broker-dealers, and depository and agency/trust services to multinational corporations and governments globally. Revenue is generated from net interest revenue on deposits in TTS and SFS, as well as trade loans and from fees for transaction processing and fees on assets under custody in SFS.
<table><tr><td>In millions of dollars</td><td>2009</td><td>2008</td><td>2007</td><td>% Change 2009 vs. 2008</td><td>% Change 2008 vs. 2007</td></tr><tr><td>Net interest revenue</td><td>$5,651</td><td>$5,485</td><td>$4,254</td><td>3%</td><td>29%</td></tr><tr><td>Non-interest revenue</td><td>4,138</td><td>4,461</td><td>3,844</td><td>-7</td><td>16</td></tr><tr><td>Total revenues, net of interest expense</td><td>$9,789</td><td>$9,946</td><td>$8,098</td><td>-2%</td><td>23%</td></tr><tr><td>Total operating expenses</td><td>4,515</td><td>5,156</td><td>4,634</td><td>-12</td><td>11</td></tr><tr><td>Provisions for credit losses and for benefits and claims</td><td>7</td><td>35</td><td>-30</td><td>-80</td><td>NM</td></tr><tr><td>Income before taxes and noncontrolling interests</td><td>$5,267</td><td>$4,755</td><td>$3,494</td><td>11%</td><td>36%</td></tr><tr><td>Income taxes</td><td>1,531</td><td>1,402</td><td>1,038</td><td>9</td><td>35</td></tr><tr><td>Income from continuing operations</td><td>3,736</td><td>3,353</td><td>2,456</td><td>11</td><td>37</td></tr><tr><td>Net income attributable to noncontrolling interests</td><td>13</td><td>31</td><td>20</td><td>-58</td><td>55</td></tr><tr><td>Net income</td><td>$3,723</td><td>$3,322</td><td>$2,436</td><td>12%</td><td>36%</td></tr><tr><td>Average assets(in billions of dollars)</td><td>$60</td><td>$71</td><td>$69</td><td>-15%</td><td>3%</td></tr><tr><td>Return on assets</td><td>6.21%</td><td>4.68%</td><td>3.53%</td><td></td><td></td></tr><tr><td>Revenues by region</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>North America</td><td>$2,526</td><td>$2,161</td><td>$1,646</td><td>17%</td><td>31%</td></tr><tr><td>EMEA</td><td>3,389</td><td>3,677</td><td>2,999</td><td>-8</td><td>23</td></tr><tr><td>Latin America</td><td>1,373</td><td>1,439</td><td>1,199</td><td>-5</td><td>20</td></tr><tr><td>Asia</td><td>2,501</td><td>2,669</td><td>2,254</td><td>-6</td><td>18</td></tr><tr><td>Total revenues</td><td>$9,789</td><td>$9,946</td><td>$8,098</td><td>-2%</td><td>23%</td></tr><tr><td>Income from continuing operations by region</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>North America</td><td>$615</td><td>$323</td><td>$209</td><td>90%</td><td>55%</td></tr><tr><td>EMEA</td><td>1,287</td><td>1,246</td><td>816</td><td>3</td><td>53</td></tr><tr><td>Latin America</td><td>604</td><td>588</td><td>463</td><td>3</td><td>27</td></tr><tr><td>Asia</td><td>1,230</td><td>1,196</td><td>968</td><td>3</td><td>24</td></tr><tr><td>Total net income from continuing operations</td><td>$3,736</td><td>$3,353</td><td>$2,456</td><td>11%</td><td>37%</td></tr><tr><td>Key indicators(in billions of dollars)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Average deposits and other customer liability balances</td><td>$303</td><td>$280</td><td>$246</td><td>8%</td><td>14%</td></tr><tr><td>EOP assets under custody(in trillions of dollars)</td><td>12.1</td><td>11.0</td><td>13.1</td><td>10</td><td>-16</td></tr></table>
2009 vs. 2008 Revenues, net of interest expense declined 2% compared to 2008 as strong growth in balances was more than offset by lower spreads driven by low interest rates globally. Average deposits and other customer liability balances grew 8%, driven by strong growth in all regions. Treasury and Trade Solutions revenues grew 7% as a result of strong growth in balances and higher trade revenues. Securities and Funds Services revenues declined 18%, attributable to reductions in asset valuations and volumes. Operating expenses declined 12%, mainly as a result of headcount reductions and successful execution of reengineering initiatives. Cost of credit declined 80%, which was primarily attributable to overall portfolio management. Net income increased 12%, leading to a record net income, with growth across all regions reflecting benefits of continued re-engineering and expense management efforts.2008 vs. 2007 Revenues, net of interest expense grew 23% driven by new business and implementations, growth in customer liability balances, increased transaction volumes and the impact of acquisitions. Average deposits and other customer liability balances grew 14% driven by success of new business growth and implementations. Treasury and Trade Solutions revenues grew 26% as a result of strong liability and fee growth as well as increased client penetration. Securities and Funds Services revenues grew 17% as a result of increased assets under custody, volumes and liability balances.2010 Outlook Transaction Services business performance will continue to be impacted in 2010 by levels of interest rates, economic activity, volatility in global capital markets, foreign exchange and market valuations globally. Levels of client activity and client cash and security flows are key factors dependent on macroeconomic conditions. Transaction Services intends to continue to invest in technology to support its global network, as well as investments to build out its investor services suite of products aimed at large, underpenetrated markets for middle and back office outsourcing among a range of investors. These and similar investments could lead to increasing operating expenses. BROKERAGE AND ASSET MANAGEMENT Brokerage and Asset Management (BAM), which constituted approximately 6% of Citi Holdings by assets as of December 31, 2009, consists of Citi’s global retail brokerage and asset management businesses. This segment was substantially affected and reduced in size in 2009 due to the divestitures of Smith Barney (to the Morgan Stanley Smith Barney joint venture (MSSB JV)) and Nikko Cordial Securities. At December 31, 2009, BAM had approximately $35 billion of assets, which included $26 billion of assets from the 49% interest in the MSSB JV ($13 billion investment and $13 billion in loans associated with the clients of the MSSB JV) and $9 billion of assets from a diverse set of asset management and insurance businesses of which approximately half will be transferred into the LATAM RCB during the first quarter of 2010, as discussed under “Citi Holdings” above. Morgan Stanley has options to purchase Citi’s remaining stake in the MSSB JV over three years starting in 2012. The 2009 results include an $11.1 billion gain ($6.7 billion after-tax) on the sale of Smith Barney. |
2,092,343 | What's the total amount of Subtotal analog signal processing without those Subtotal analog signal processing smaller than 500000, in 2014? | 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 |
321,000,000 | what was the total impairment relating to us assets? | We cannot assure you that the Gener restructuring will be completed or that the terms thereof will not be changed materially. In addition, Gener is in the process of restructuring the debt of its subsidiaries, TermoAndes S. A. (‘‘TermoAndes’’) and InterAndes, S. A. (‘‘InterAndes’’), and expects that the maturities of these obligations will be extended. Under-performing Businesses During 2003 we sold or discontinued under-performing businesses and construction projects that did not meet our investment criteria or did not provide reasonable opportunities to restructure. It is anticipated that there will be less ongoing activity related to write-offs of development or construction projects and impairment charges in the future. The businesses, which were affected in 2003, are listed below.
<table><tr><td>Project Name</td><td>Project Type</td><td>Date</td><td>Location</td><td>Impairment (in millions)</td></tr><tr><td>Ede Este -1</td><td>Operating</td><td>December 2003</td><td>Dominican Republic</td><td>$60</td></tr><tr><td>Wolf Hollow</td><td>Operating</td><td>December 2003</td><td>United States</td><td>$120</td></tr><tr><td>Granite Ridge</td><td>Operating</td><td>December 2003</td><td>United States</td><td>$201</td></tr><tr><td>Colombia I</td><td>Operating</td><td>November 2003</td><td>Colombia</td><td>$19</td></tr><tr><td>Zeg</td><td>Construction</td><td>December 2003</td><td>Poland</td><td>$23</td></tr><tr><td>Bujagali</td><td>Construction</td><td>August 2003</td><td>Uganda</td><td>$76</td></tr><tr><td>El Faro</td><td>Construction</td><td>April 2003</td><td>Honduras</td><td>$20</td></tr></table>
(1) See Note 4—Discontinued Operations. Improving Credit Quality Our de-leveraging efforts reduced parent level debt by $1.2 billion in 2003 (including the secured equity-linked loan previously issued by AES New York Funding L. L. C. ). We refinanced and paid down near-term maturities by $3.5 billion and enhanced our year-end liquidity to over $1 billion. Our average debt maturity was extended from 2009 to 2012. At the subsidiary level we continue to pursue limited recourse financing to reduce parent credit risk. These factors resulted in an overall reduced cost of capital, improved credit statistics and expanded access to credit at both AES and our subsidiaries. Liquidity at the AES parent level is an important factor for the rating agencies in determining whether the Company’s credit quality should improve. Currency and political risk tend to be biggest variables to sustaining predictable cash flow. The nature of our large contractual and concession-based cash flow from these businesses serves to mitigate these variables. In 2003, over 81% of cash distributions to the parent company were from U. S. large utilities and worldwide contract generation. On February 4, 2004, we called for redemption of $155,049,000 aggregate principal amount of outstanding 8% Senior Notes due 2008, which represents the entire outstanding principal amount of the 8% Senior Notes due 2008, and $34,174,000 aggregate principal amount of outstanding 10% secured Senior Notes due 2005. The 8% Senior Notes due 2008 and the 10% secured Senior Notes due 2005 were redeemed on March 8, 2004 at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest to the redemption date. The mandatory redemption of the 10% secured Senior Notes due 2005 was being made with a portion of our ‘‘Adjusted Free Cash Flow’’ (as defined in the indenture pursuant to which the notes were issued) for the fiscal year ended December 31, 2003 as required by the indenture and was made on a pro rata basis. On February 13, 2004 we issued $500 million of unsecured senior notes. The unsecured senior notes mature on March 1, 2014 and are callable at our option at any time at a redemption price equal to 100% of the principal amount of the unsecured senior notes plus a make-whole premium. The unsecured senior notes were issued at a price of 98.288% and pay interest semi-annually at an annual The following table presents the difference between calculated fair values, based on quoted closing prices of publicly traded shares, and our Company’s cost basis in investments in publicly traded companies accounted for under the equity method (in millions):
<table><tr><td>December 31, 2018</td><td>FairValue</td><td>CarryingValue</td><td>Difference</td></tr><tr><td>Monster Beverage Corporation</td><td>$5,026</td><td>$3,573</td><td>$1,453</td></tr><tr><td>Coca-Cola European Partners plc</td><td>4,033</td><td>3,551</td><td>482</td></tr><tr><td>Coca-Cola FEMSA, S.A.B. de C.V.</td><td>3,401</td><td>1,714</td><td>1,687</td></tr><tr><td>Coca-Cola HBC AG</td><td>2,681</td><td>1,260</td><td>1,421</td></tr><tr><td>Coca-Cola Amatil Limited</td><td>1,325</td><td>656</td><td>669</td></tr><tr><td>Coca-Cola Bottlers Japan Holdings Inc.<sup>1</sup></td><td>978</td><td>1,142</td><td>-164</td></tr><tr><td>Embotelladora Andina S.A.</td><td>497</td><td>263</td><td>234</td></tr><tr><td>Coca–Cola Consolidated, Inc.<sup>2</sup></td><td>440</td><td>138</td><td>302</td></tr><tr><td>Coca-Cola İçecek A.Ş.</td><td>299</td><td>174</td><td>125</td></tr><tr><td>Total</td><td>$18,680</td><td>$12,471</td><td>$6,209</td></tr></table>
1 The carrying value of our investment in Coca-Cola Bottlers Japan Holdings Inc. (“CCBJHI”) exceeded its fair value as of December 31, 2018. Based on the length of time and the extent to which the market value has been less than our cost basis and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value, management determined that the decline in fair value was temporary in nature. Therefore, we did not record an impairment charge.2 Formerly known as Coca-Cola Bottling Co. Consolidated. Other Assets Our Company invests in infrastructure programs with our bottlers that are directed at strengthening our bottling system and increasing unit case volume. Additionally, our Company advances payments to certain customers for distribution rights as well as to fund future marketing activities intended to generate profitable volume, and we expense such payments over the periods benefited. Payments under these programs are generally capitalized and reported in the line item prepaid expenses and other assets or other assets, as appropriate, in our consolidated balance sheet. When facts and circumstances indicate that the carrying value of these assets or asset groups may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of sales volume and the resulting gross profit and cash flows. These estimated future cash flows are consistent with those we use in our internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value. During the year ended December 31, 2017, the Company recorded an impairment charge of $19 million related to CCR’s other assets. Refer to Note 17 of Notes to Consolidated Financial Statements. Property, Plant and Equipment As of December 31, 2018, the carrying value of our property, plant and equipment, net of depreciation, was $8,232 million, or 10 percent of our total assets. Certain events or changes in circumstances may indicate that the recoverability of the carrying amount or remaining useful life of property, plant and equipment should be assessed, including, among others, the manner or length of time in which the Company intends to use the asset, a significant decrease in market value, a significant change in the business climate in a particular market, or a current period operating or cash flow loss combined with historical losses or projected future losses. When such events or changes in circumstances are present and an impairment test is performed, we estimate the future cash flows expected to result from the use of the asset or asset group and its eventual disposition. These estimated future cash flows are consistent with those we use in our internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value. We use a variety of methodologies to determine the fair value of property, plant and equipment, including appraisals and discounted cash flow models, which are consistent with the assumptions we believe a hypothetical marketplace participant would use. During the year ended December 31, 2018 and December 31, 2017, the Company recorded impairment charges of $312 million and $310 million, respectively, related to CCR’s property, plant and equipment. Refer to Note 17 of Notes to Consolidated Financial Statements. PRUDENTIAL FINANCIAL, INC. Notes to Consolidated Financial Statements (4) Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $693 million of net unrealized gains on impaired available-for-sale securities and less than $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date. (5) Excludes notes with amortized cost of $3,850 million (fair value, $4,081 million) which have been offset with the associated payables under a netting agreement.
<table><tr><td></td><td colspan="5">December 31, 2014-6</td></tr><tr><td></td><td>AmortizedCost</td><td>GrossUnrealizedGains</td><td>GrossUnrealizedLosses</td><td>FairValue</td><td>OTTIin AOCI-4</td></tr><tr><td></td><td colspan="5">(in millions)</td></tr><tr><td>Fixed maturities, available-for-sale</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. Treasury securities and obligations of U.S. government authorities and agencies</td><td>$15,807</td><td>$4,321</td><td>$5</td><td>$20,123</td><td>$0</td></tr><tr><td>Obligations of U.S. states and their political subdivisions</td><td>5,720</td><td>814</td><td>3</td><td>6,531</td><td>0</td></tr><tr><td>Foreign government bonds</td><td>69,894</td><td>11,164</td><td>117</td><td>80,941</td><td>-1</td></tr><tr><td>U.S. corporate public securities</td><td>70,960</td><td>9,642</td><td>536</td><td>80,066</td><td>-6</td></tr><tr><td>U.S. corporate private securities-1</td><td>27,767</td><td>3,082</td><td>89</td><td>30,760</td><td>0</td></tr><tr><td>Foreign corporate public securities</td><td>27,515</td><td>3,768</td><td>214</td><td>31,069</td><td>0</td></tr><tr><td>Foreign corporate private securities</td><td>17,389</td><td>1,307</td><td>215</td><td>18,481</td><td>0</td></tr><tr><td>Asset-backed securities-2</td><td>10,966</td><td>353</td><td>134</td><td>11,185</td><td>-592</td></tr><tr><td>Commercial mortgage-backed securities</td><td>13,486</td><td>430</td><td>39</td><td>13,877</td><td>-1</td></tr><tr><td>Residential mortgage-backed securities-3</td><td>5,612</td><td>448</td><td>3</td><td>6,057</td><td>-5</td></tr><tr><td>Total fixed maturities, available-for-sale-1</td><td>$265,116</td><td>$35,329</td><td>$1,355</td><td>$299,090</td><td>$-605</td></tr><tr><td>Equity securities, available-for-sale</td><td>$6,921</td><td>$3,023</td><td>$83</td><td>$9,861</td><td></td></tr></table>
December 31, 2014(6)
<table><tr><td></td><td colspan="4">December 31, 2014-6</td></tr><tr><td></td><td>AmortizedCost</td><td>GrossUnrealizedGains</td><td>GrossUnrealizedLosses</td><td>FairValue</td></tr><tr><td></td><td colspan="4">(in millions)</td></tr><tr><td>Fixed maturities, held-to-maturity</td><td></td><td></td><td></td><td></td></tr><tr><td>Foreign government bonds</td><td>$821</td><td>$184</td><td>$0</td><td>$1,005</td></tr><tr><td>Foreign corporate public securities</td><td>635</td><td>64</td><td>1</td><td>698</td></tr><tr><td>Foreign corporate private securities-5</td><td>78</td><td>4</td><td>0</td><td>82</td></tr><tr><td>Commercial mortgage-backed securities</td><td>78</td><td>7</td><td>0</td><td>85</td></tr><tr><td>Residential mortgage-backed securities-3</td><td>963</td><td>69</td><td>0</td><td>1,032</td></tr><tr><td>Total fixed maturities, held-to-maturity-5</td><td>$2,575</td><td>$328</td><td>$1</td><td>$2,902</td></tr></table>
(1) Excludes notes with amortized cost of $385 million (fair value, $385 million) which have been offset with the associated payables under a netting agreement. (2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. (3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations. (4) Represents the amount of OTTI losses in AOCI, which were not included in earnings. Amount excludes $954 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date. (5) Excludes notes with amortized cost of $3,588 million (fair value, $3,953 million) which have been offset with the associated payables under a netting agreement. (6) Prior period amounts are presented on a basis consistent with the current period presentation. The amortized cost and fair value of fixed maturities by contractual maturities at December 31, 2015, are as follows: |
Subsets and Splits