## Table 0 ##
* We have revised our financial statements at December 31, 2008 and 2007 and for the years ended December 31, 2008 and 2007 in connection with the application of authoritative guidance issued by the Financial Accounting Standards Board (FASB) to our December 2006 lease, as amended, of laboratory and office facilities in Tarrytown, New York.
The revisions, and a description of the basis for the revisions, are more fully described in Note 11 to our audited financial statements included elsewhere in this report.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a biopharmaceutical company that discovers, develops, and commercializes pharmaceutical products for the treatment of serious medical conditions.
We currently have one marketed product: ARCALYST?
(rilonacept) Injection for Subcutaneous Use, which is available for prescription in the United States for the treatment of Cryopyrin-Associated Periodic Syndromes (CAPS), including Familial Cold Auto-inflammatory Syndrome (FCAS) and Muckle-Wells Syndrome (MWS) in adults and children 12 and older.
We also have eight product candidates in clinical development, including three product candidates that are in late-stage (Phase 3) clinical development.
Our late stage programs are rilonacept, which is being developed for the prevention and treatment of gout-related flares; VEGF Trap-Eye, which is being developed in eye diseases using intraocular delivery in collaboration with Bayer HealthCare; and aflibercept (VEGF Trap), which is being developed in oncology in collaboration with sanofiaventis.
Our earlier stage clinical programs are REGN475, an antibody to Nerve Growth Factor (NGF), which is being developed for the treatment of pain; REGN88, an antibody to the interleukin-6 receptor (IL-6R), which is being developed in rheumatoid arthritis; REGN421, an antibody to Delta-like ligand-4 (Dll4), which is being developed in oncology; REGN727, an antibody to PCSK9, which is being developed for LDL cholesterol reduction; and REGN668, an antibody to the interleukin-4 receptor (IL-4R), which is being developed for certain allergic and immune conditions.
All five of our early stage clinical programs are fully human antibodies that are being developed in collaboration with sanofi-aventis.
Our preclinical research programs are in the areas of oncology and angiogenesis, ophthalmology, metabolic and related diseases, muscle diseases and disorders, inflammation and immune diseases, bone and cartilage, pain, cardiovascular diseases, and infectious diseases.
Developing and commercializing new medicines entails significant risk and expense.
Since inception we have not generated any significant sales or profits from the commercialization of ARCALYST or any of our other product candidates.
Before significant revenues from the commercialization of ARCALYST or our other product candidates can be realized, we (or our collaborators) must overcome a number of hurdles which include successfully completing research and development and obtaining regulatory approval from the FDA and regulatory authorities in other countries.
In addition, the biotechnology and pharmaceutical industries are rapidly evolving and highly competitive, and new developments may render our products and technologies uncompetitive or obsolete.
We prepare estimates of research and development costs for projects in clinical development, which include direct costs and allocations of certain costs such as indirect labor, Non-cash Compensation Expense, and manufacturing and other costs related to activities that benefit multiple projects, and, under our collaboration with Bayer HealthCare, the portion of Bayer HealthCare’s VEGF Trap-Eye development expenses that we are obligated to reimburse.
Our estimates of research and development costs for clinical development programs are shown below:
## Table 1 ##
For the reasons described above in Results of Operations for the years ended December 31, 2009 and 2008, under the caption “Research and Development Expenses”, and due to the variability in the costs necessary to develop a product and the uncertainties related to future indications to be studied, the estimated cost and scope of the projects, and our ultimate ability to obtain governmental approval for commercialization, accurate and meaningful estimates of the total cost to bring our product candidates to market are not available.
Similarly, we are currently unable to reasonably estimate if our product candidates will generate material product revenues and net cash inflows.
In the first quarter of 2008, we received FDA approval for ARCALYST?
(rilonacept) for the treatment of CAPS, a group of rare, inherited auto-inflammatory diseases.
These rare diseases affect a very small group of people.
We shipped $10.7 million of ARCALYST to our U. S.  distributors in 2008.
Selling, General, and Administrative Expenses Selling, general, and administrative expenses increased to $48.9 million in 2008 from $37.9 million in 2007.
In 2008, we incurred $5.2 million of selling expenses related to ARCALYST for the treatment of CAPS.
General and administrative expenses increased in 2008 due to (i) higher compensation expense primarily resulting from increases in administrative headcount to support our expanded research and development activities, (ii) higher recruitment and related costs associated with expanding our headcount, (iii) higher fees for professional services related to various general corporate matters, and (iv) higher administrative facility-related costs.
Cost of Goods Sold During 2008, we began recognizing revenue and cost of goods sold from net product sales of ARCALYST.
We began capitalizing inventory costs associated with commercial supplies of ARCALYST subsequent to receipt of marketing approval from the FDA in February 2008.
Costs for manufacturing supplies of ARCALYST prior to receipt of FDA approval were recognized as research and development expenses in the period that the costs were incurred.
Therefore, these costs are not being included in cost of goods sold when revenue is recognized from the sale of those supplies of ARCALYST.
Cost of goods sold in 2008 was $0.9 million and consisted primarily of royalties and other period costs related to ARCALYST commercial supplies.
Other Income and Expense Investment income decreased to $18.2 million in 2008 from $20.9 million in 2007, due primarily to lower yields on our cash and marketable securities.
In addition, in 2008 and 2007, deterioration in the credit quality of specific marketable securities in our investment portfolio subjected us to the risk of not being able to recover these securities’ carrying values.
As a result, in 2008 and 2007, we recognized charges of $2.5 million and $5.9 million, respectively, related to these securities, which we considered to be other than temporarily impaired.
In 2008, these charges were partially offset by realized gains of $1.2 million on sales of marketable securities during the year.
We prepare estimates of research and development costs for projects in clinical development, which include direct costs and allocations of certain costs such as indirect labor, Non-cash Compensation Expense, and manufacturing and other costs related to activities that benefit multiple projects, and, under our collaboration with Bayer HealthCare, the portion of Bayer HealthCare’s VEGF Trap-Eye development expenses that we are obligated to reimburse.
Our estimates of research and development costs for clinical development programs are shown below:
## Table 2 ##
For the reasons described above in Results of Operations for the years ended December 31, 2010 and 2009, under the caption “Research and Development Expenses”, and due to the variability in the costs necessary to develop a pharmaceutical product and the uncertainties related to future indications to be studied, the estimated cost and scope of the projects, and our ultimate ability to obtain governmental approval for commercialization, accurate and meaningful estimates of the total cost to bring our product candidates to market are not available.
Similarly, we are currently unable to reasonably estimate if our product candidates will generate material product revenues and net cash inflows.
In 2008, we received FDA approval for ARCALYST?
for the treatment of CAPS, a group of rare, inherited auto-inflammatory diseases that affect a very small group of people.
We currently do not expect to generate material product revenues and net cash inflows from the sale of ARCALYST?
for the treatment of CAPS.
Selling, General, and Administrative Expenses Selling, general, and administrative expenses increased to $52.9 million in 2009 from $48.9 million in 2008.
In 2009, we incurred (i) higher compensation expense, (ii) higher patent-related costs, (iii) higher facility-related costs due primarily to increases in administrative headcount, and (iv) higher patient assistance costs related to ARCALYST?.
These increases were partly offset by (i) lower marketing costs related to ARCALYST?, (ii) a decrease in administrative recruitment costs, and (iii) lower professional fees related to various corporate matters.
Cost of Goods Sold During 2008, we began recognizing revenue and cost of goods sold from net product sales of ARCALYST?.
Cost of goods sold in 2009 and 2008 was $1.7 million and $0.9 million, respectively, and consisted primarily of royalties and other period costs related to ARCALYST?
commercial supplies.
In 2009 and 2008, ARCALYST?
shipments to our customers consisted of supplies of inventory manufactured and expensed as research and development costs prior to FDA approval in 2008; therefore, the costs of these supplies were not included in costs of goods sold.
Other Income and Expense Investment income decreased to $4.5 million in 2009 from $18.2 million in 2008, due primarily to lower yields on, and lower balances of, cash and marketable securities.
In addition, in 2009 and 2008, deterioration in the credit quality of specific marketable securities in our investment portfolio subjected us to the risk of not being able to recover these securities’ carrying values.
As a result, in 2009 and 2008, we recognized charges of $0.1 million and $2.5 million, respectively, related to these securities, which we considered to be other than temporarily impaired.
In 2009 and 2008, these charges were either wholly or partly offset by realized gains of $0.2 million and $1.2 million, respectively, on sales of marketable securities during the year
CITIZENS FINANCIAL GROUP, INC.  MANAGEMENT’S DISCUSSION AND ANALYSIS 78 Loan and Lease Concentrations At December 31, 2016, we did not identify any concentration of loans and leases that exceeded 10% of total loans and leases which were not otherwise disclosed as a category of loans and leases.
For further information on how we managed concentration exposures, see Note 5 “Allowance for Credit Losses, Nonperforming Assets, and Concentrations of Credit Risk” to our audited Consolidated Financial Statements in Part II, Item 8 — Financial Statements and Supplementary Data, included in this report.
Non-Core Assets The table below presents the composition of our non-core assets:
## Table 3 ##
Non-core assets are primarily loans and leases inconsistent with our strategic priorities, generally as a result of geographic location, industry, product type or risk level and are included in Other.
Non-core assets of $2.8 billion as of December 31, 2016 increased $422 million, or 18%, from December 31, 2015.
These results were driven by a $909 million increase in total commercial non-core loans related to the transfer of a $1.2 billion lease and loan portfolio tied to legacy RBS aircraft leasing borrowers that we placed in runoff following a review of Asset Finance in third quarter 2016.
The increase in total commercial non-core loans was partially offset by a $616 million decrease in total retail non-core loans.
Retail non-core loan balances of $1.5 billion decreased $616 million, or 29%, compared to December 31, 2015.
The largest component of our retail non-core portfolio is the home equity SBO portfolio, which totaled $969 million as of December 31, 2016, compared to $1.4 billion as of December 31, 2015.
The SBO portfolio is a liquidating portfolio consisting of pools of home equity loans and lines of credit purchased between 2003 and 2007.
Although our SBO portfolio consists of loans that were initially serviced by others, we now service a portion of this portfolio internally.
SBO balances serviced externally totaled $505 million and $763 million as of December 31, 2016 and 2015, respectively.
The SBO portfolio has been closed to new purchases since the third quarter of 2007.
The SBO portfolio represented 3% of the retail real estate secured portfolio and 2% of the overall retail loan portfolio as of December 31, 2016.
The credit profile of the SBO portfolio was weaker than the core real estate portfolio, with a weighted-average refreshed FICO score of 711 and CLTV of 87% as of December 31, 2016.
The proportion of the portfolio in a second lien position was 96% with 71% of the portfolio in out-of-footprint geographies including 27% in California, Nevada, Arizona and Florida.
SBO net charge-offs of $25 million in 2016 increased $4 million from 2015 and totaled 2.17% of the SBO portfolio in 2016 compared to 1.29% in 2015, driven by balance liquidation.
Allowance for Credit Losses and Nonperforming Assets We and our banking subsidiaries, CBNA and CBPA, maintain an allowance for credit losses, consisting of an ALLL and a reserve for unfunded lending commitments.
This allowance is created through charges to income, specifically through the provision for credit loss account, and is maintained at an appropriate level adequate to absorb anticipated losses and is determined in accordance with GAAP.
For further information on our processes to determine our allowance for credit losses, see “—Critical
Tables of Contents transfer, and are often exercised prior to their contractual maturity.
We believe that lattice binomial models are more capable of incorporating the features of our stock options than closed-form models such as the Black Scholes model.
The use of a lattice binomial model requires the use of extensive actual employee exercise behavior and a number of complex assumptions including the expected volatility of our stock price over the term of the options, risk-free interest rates and expected dividends.
We amortize the fair value of options on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods.
Restricted stock units (RSUs) granted typically vest based on continued service.
We value these time-based RSUs at the date of grant using the intrinsic value method.
We amortize the fair value of time-based RSUs on a straight-line basis over the service period.
Certain RSUs granted to senior management vest based on the achievement of pre-established performance or market goals.
We estimate the fair value of performance-based RSUs at the date of grant using the intrinsic value method and the probability that the specified performance criteria will be met.
Each quarter we update our assessment of the probability that the specified performance criteria will be achieved and adjust our estimate of the fair value of the performance-based RSUs if necessary.
We amortize the fair values of performance-based RSUs over the requisite service period for each separately vesting tranche of the award.
We estimate the fair value of market-based RSUs at the date of grant using a Monte Carlo valuation methodology and amortize those fair values over the requisite service period for each separately vesting tranche of the award.
The Monte Carlo methodology that we use to estimate the fair value of market-based RSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied.
Provided that the requisite service is rendered, the total fair value of the market-based RSUs at the date of grant must be recognized as compensation expense even if the market condition is not achieved.
However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria.
All of the RSUs we grant have dividend rights that are subject to the same vesting requirements as the underlying equity awards, so we do not adjust the market price of our stock on the date of grant for dividends.
Expected Term.
The expected term of options granted represents the period of time that they are expected to be outstanding and is a derived output of the lattice binomial model.
The expected term of stock options is impacted by all of the underlying assumptions and calibration of our model.
The lattice binomial model assumes that option exercise behavior is a function of the option’s remaining vested life and the extent to which the market price of our common stock exceeds the option exercise price.
The lattice binomial model estimates the probability of exercise as a function of these two variables based on the history of exercises and cancellations on all past option grants made by us.
Expected Volatility.
We estimate the volatility of our common stock at the date of grant based on the implied volatility of one-year and two-year publicly traded options on our common stock.
Our decision to use implied volatility was based upon the availability of actively traded options on our common stock and our assessment that implied volatility is more representative of future stock price trends than historical volatility.
Risk-Free Interest Rate.
We base the risk-free interest rate that we use in our option valuation model on the implied yield in effect at the time of option grant on constant maturity U. S.  Treasury issues with equivalent remaining terms.
Dividends.
We use an annualized expected dividend yield in our option valuation model.
We paid quarterly cash dividends during all years presented and currently expect to continue to pay cash dividends in the future.
Forfeitures.
We adjust share-based compensation expense for actual forfeitures as they occur.
Prior to our adoption of ASU 2016-09 in the first quarter of fiscal 2017, we estimated forfeitures at the time of grant and revised those estimates in subsequent periods if actual forfeitures differed from those estimates.
We used historical data to estimate pre-vesting option forfeitures and recorded share-based compensation expense only for those awards that were expected to vest.

Tables referenced above, in order (Table 0 first):
<table><tr><td></td><td colspan="5">At December 31,</td></tr><tr><td></td><td>2009</td><td>2008 Revised*</td><td>2007 Revised*</td><td>2006</td><td>2005</td></tr><tr><td></td><td colspan="5">(Inthousands)</td></tr><tr><td>Balance Sheet Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash, cash equivalents, restricted cash, and marketable</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>securities (current and non-current)</td><td>$390,010</td><td>$527,461</td><td>$846,279</td><td>$522,859</td><td>$316,654</td></tr><tr><td>Total assets</td><td>741,202</td><td>724,220</td><td>957,881</td><td>585,090</td><td>423,501</td></tr><tr><td>Notes payable - current portion</td><td></td><td></td><td>200,000</td><td></td><td></td></tr><tr><td>Notes payable - long-term portion</td><td></td><td></td><td></td><td>200,000</td><td>200,000</td></tr><tr><td>Facility lease obligations</td><td>109,022</td><td>54,182</td><td>21,623</td><td></td><td></td></tr><tr><td>Stockholders’ equity</td><td>396,762</td><td>421,514</td><td>459,348</td><td>216,624</td><td>114,002</td></tr></table>
<table><tr><td></td><td colspan="2">Year endedDecember 31,</td><td rowspan="2">Increase (Decrease)</td></tr><tr><td>Project Costs</td><td>2008</td><td>2007</td></tr><tr><td>(In millions)</td><td></td><td></td><td></td></tr><tr><td>Rilonacept</td><td>$39.2</td><td>$38.1</td><td>$1.1</td></tr><tr><td>Aflibercept</td><td>32.1</td><td>33.7</td><td>-1.6</td></tr><tr><td>VEGF Trap-Eye</td><td>82.7</td><td>53.7</td><td>29.0</td></tr><tr><td>REGN88</td><td>21.4</td><td>13.6</td><td>7.8</td></tr><tr><td>Other research programs & unallocated costs</td><td>99.5</td><td>63.4</td><td>36.1</td></tr><tr><td>Total research and development expenses</td><td>$274.9</td><td>$202.5</td><td>$72.4</td></tr></table>
<table><tr><td>Project Costs</td><td>Year ended December 31,</td><td>Increase</td></tr><tr><td>(In millions)</td><td>2009</td><td>2008</td><td>(Decrease)</td></tr><tr><td>ARCALYST®</td><td>$67.7</td><td>$39.2</td><td>$28.5</td></tr><tr><td>VEGF Trap-Eye</td><td>109.8</td><td>82.7</td><td>27.1</td></tr><tr><td>Aflibercept</td><td>23.3</td><td>32.1</td><td>-8.8</td></tr><tr><td>REGN88</td><td>36.9</td><td>21.4</td><td>15.5</td></tr><tr><td>Other antibody candidates in clinical development</td><td>74.4</td><td>27.4</td><td>47.0</td></tr><tr><td>Other research programs & unallocated costs</td><td>86.7</td><td>72.1</td><td>14.6</td></tr><tr><td>Total research and development expenses</td><td>$398.8</td><td>$274.9</td><td>$123.9</td></tr></table>
<table><tr><td></td><td colspan="2">December 31,</td><td></td><td></td></tr><tr><td>(dollars in millions)</td><td>2016</td><td>2015</td><td>Change</td><td>Percent</td></tr><tr><td>Commercial</td><td>$144</td><td>$38</td><td>$106</td><td>279%</td></tr><tr><td>Commercial real estate</td><td>59</td><td>130</td><td>-71</td><td>-55</td></tr><tr><td>Leases</td><td>874</td><td>—</td><td>874</td><td>100</td></tr><tr><td>Total commercial</td><td>1,077</td><td>168</td><td>909</td><td>541</td></tr><tr><td>Residential mortgages</td><td>173</td><td>297</td><td>-124</td><td>-42</td></tr><tr><td>Home equity loans</td><td>45</td><td>69</td><td>-24</td><td>-35</td></tr><tr><td>Home equity lines of credit</td><td>50</td><td>74</td><td>-24</td><td>-32</td></tr><tr><td>Home equity loans serviced by others</td><td>750</td><td>986</td><td>-236</td><td>-24</td></tr><tr><td>Home equity lines of credit serviced by others</td><td>219</td><td>389</td><td>-170</td><td>-44</td></tr><tr><td>Student</td><td>291</td><td>329</td><td>-38</td><td>-12</td></tr><tr><td>Total retail</td><td>1,528</td><td>2,144</td><td>-616</td><td>-29</td></tr><tr><td>Total non-core loans</td><td>2,605</td><td>2,312</td><td>293</td><td>13</td></tr><tr><td>Other assets</td><td>155</td><td>26</td><td>129</td><td>496</td></tr><tr><td>Total non-core assets</td><td>$2,760</td><td>$2,338</td><td>$422</td><td>18%</td></tr></table>

Question: Does Commercial keeps increasing each year between 2015 and 2016?
Answer: yes