The vast majority of our regulated water customers are metered, which allows us to measure and bill for our customers water consumption, typically on a monthly basis.
Our wastewater customers are billed either on a fixed charge basis or based on their water consumption.
Customer usage of water is affected by weather conditions, particularly during the summer.
Our water systems generally experience higher demand in the summer due to the warmer temperatures and increased usage by customers for lawn irrigation and other outdoor uses.
Summer weather that is cooler and wetter than average generally serves to suppress customer water demand and can reduce water operating revenues and operating income.
Summer weather that is hotter and drier than average generally increases operating revenues and operating income.
However, when weather conditions are extremely dry, and even if our water supplies are sufficient to serve our customers, our systems may be affected by drought-related warnings and/or water usage restrictions imposed by governmental agencies, thereby reducing customer usage and operating revenues.
These restrictions may be imposed at a regional or state level and may affect our service areas, regardless of our readiness to meet unrestricted customer demands.
Other factors affecting our customers usage of water include conservation initiatives, such as the use of more efficient household fixtures and appliances among residential consumers; declining household sizes in the United States; and changes in the economy and credit markets which could have significant impacts on our industrial and commercial customers operational and financial performance.
Customer growth in our Regulated Businesses is driven by (i) organic population growth in our authorized service areas; (ii) adding new customers to our regulated customer base by acquiring water and/or wastewater utility systems; and (iii) the sale of water to other community water systems.
Generally, we add customers through tuck-ins of small water and/or wastewater systems, typically serving fewer than 10,000 customers, in


| RestrictedStock UnitsOutstanding(in thousands) Weighted-Average Grant-Date Fair ValuePer Share | Restricted stock units outstanding at October 31, 2015 | Units granted | Restrictions lapsed | Forfeited | Restricted stock units outstanding at October 29, 2016 |


(a) KCP&L amounts are not included in consolidated Evergy at December 31, 2017.
Tax Credit Carryforwards At December 31, 2018 and 2017, Evergy had $333.8 million and $100.0 million, respectively, of federal general business income tax credit carryforwards.
At December 31, 2018 and 2017, Westar Energy had $134.0 million and $100.0 million, respectively, of federal general business income tax credit carryforwards.
At December 31, 2018 and 2017, KCP&L had $192.8 million and $184.6 million, respectively, of federal general business income tax credit carryforwards.
The carryforwards for Evergy, Westar Energy and KCP&L relate primarily to wind


| Capital Operating | (In $ millions) | 2010 | 2011 | 2012 | 2013 | 2014 | Later years | Sublease income | Minimum lease commitments | Less amounts representing interest | Present value of net minimum lease obligations |


| (In thousands) 2015 2014 Change | Oilseeds | Corn | Milling and cocoa | Total | Balance as of January 1, 2017 | Warranty expense | Warranty claims | Balance as of December 31, 2017 | Warranty expense | Warranty claims | Balance as of December 31, 2018 |


Item 6.
Selected Financial Data The information required by Item 6 regarding the selected financial data for the five years ended Dec.  31, 2006 is included in Exhibit 99.2 filed with this Form 10-K and is incorporated herein by reference.
This information is also reported in the Eleven-Year Digest on page 72 of the Annual Report under the captions net sales, income (loss) before accounting changes, cumulative effect of accounting changes, net income (loss), earnings (loss) per common share before accounting changes, cumulative effect of accounting changes on earnings (loss) per common share, earnings (loss) per common share, earnings (loss) per common share  assuming dilution, dividends per share, total assets and long-term debt for the years 2002 through 2006.
Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations Performance in 2006 compared with 2005 Performance Overview Our sales increased 8% to $11.0 billion in 2006 compared to $10.2 billion in 2005.
Sales increased 4% due to the impact of acquisitions, 2% due to increased volumes, and 2% due to increased selling prices.
Cost of sales as a percentage of sales increased slightly to 63.7% compared to 63.5% in 2005.
Selling, general and administrative expense increased slightly as a percentage of sales to 17.9% compared to 17.4% in 2005.
These costs increased primarily due to higher expenses related to store expansions in our architectural coatings operating segment and increased advertising to promote growth in our optical products operating segment.
Other charges decreased $81 million in 2006.
Other charges in 2006 included pretax charges of $185 million for estimated environmental remediation costs at sites in New Jersey and $42 million for legal settlements offset in part by pretax earnings of $44 million for insurance recoveries related to the Marvin legal settlement and to Hurricane Rita.
Other charges in 2005 included pretax charges of $132 million related to the Marvin legal settlement net of related insurance recoveries of $18 million, $61 million for the federal glass class action antitrust legal settlement, $34 million of direct costs related to the impact of hurricanes Rita and Katrina, $27 million for an asset impairment charge in our fine chemicals operating segment and $19 million for debt refinancing costs.
Other earnings increased $30 million in 2006 due to higher equity earnings, primarily from our Asian fiber glass joint ventures, and higher royalty income.
Net income and earnings per share  assuming dilution for 2006 were $711 million and $4.27, respectively, compared to $596 million and $3.49, respectively, for 2005.
Net income in 2006 included aftertax charges of $106 million, or 64 cents a share, for estimated environmental remediation costs at sites in New Jersey and Louisiana in the third quarter; $26 million, or 15 cents a share, for legal settlements; $23 million, or 14 cents a share for business restructuring; $17 million, or 10 cents a share, to reflect the net increase in the current value of the Companys obligation relating to asbestos claims under the PPG Settlement Arrangement; and aftertax earnings of $24 million, or 14 cents a share for insurance recoveries.
Net income in 2005 included aftertax charges of $117 million, or 68 cents a share for legal settlements net of insurance; $21 million, or 12 cents a share for direct costs related to the impact of hurricanes Katrina and Rita; $17 million, or 10 cents a share, related to an asset impairment charge related to our fine chemicals operating segment; $12 million, or 7 cents a share, for debt refinancing cost; and $13 million, or 8 cents a share, to reflect the net increase in the current
Managements Discussion and Analysis value of the Companys obligation relating to asbestos claims under the PPG Settlement Arrangement.
The legal settlements net of insurance included aftertax charges of $80 million for the Marvin legal settlement, net of insurance recoveries of $11 million, and $37 million for the impact of the federal glass class action antitrust legal settlement.


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:


| 2014 2013 2012 | U.S. federal statutory rate | Increase (decrease) resulting from: | State and local income taxes, netof federal tax benefit | Uncertain tax positions | SABMiller dividend benefit | Domestic manufacturing deduction | Other | Effective tax rate |


| Year Ended December | $ in millions | Compensation and benefits | Brokerage, clearing, exchange anddistribution fees | Market development | Communications and technology | Depreciation and amortization | Occupancy | Professional fees | Other expenses | Total non-compensation expenses | Total operating expenses | Total staff at period-end | Consolidated Revenues for the Three Months Ended | 2016 | (Amounts in Millions) | March 31 | June 30 | September 30 | December 31 | $7,846.6 |


| Year Ended December 31, | (in millions) | Other-than-temporary impairment: | Total other-than-temporary impairment losses | Portions of loss recognized in other comprehensive income (before taxes) | Net securities impairment losses recognized in earnings |


The El Dorado Refinery faces competition from other Plains States and Mid-Continent refiners, but the principal competitors for the El Dorado Refinery are Gulf Coast refiners.
Our Gulf Coast competitors typically have lower production costs due to greater economies of scale; however, they incur higher refined product transportation costs, which allows the El Dorado Refinery to compete effectively in the Plains States and Rocky Mountain region with Gulf Coast refineries.
The Tulsa Refineries serve the Mid-Continent region of the United States.
Distillates and gasolines are primarily delivered from the Tulsa Refineries to market via pipelines owned and operated by Magellan.
These pipelines connect the refinery to distribution channels throughout Colorado, Oklahoma, Kansas, Missouri, Illinois, Iowa, Minnesota, Nebraska and Arkansas.
Additionally, HEP's on-site truck and rail racks facilitate access to local refined product markets.
We have an offtake agreement through November 2019 with an affiliate of Sinclair whereby Sinclair purchases 45,000 to 50,000 BPD of gasoline and distillate products at market prices from us to supply its branded and unbranded marketing network throughout the Midwest.
Upon expiration, the offtake agreement can be renewed by Sinclair for an additional five-year term.
For the year ended December 31, 2017, sales to Sinclair represented approximately 21% of the Tulsa Refineriestotal sales and 8% of our total consolidated sales.
The Tulsa Refineries principal customers for conventional gasoline include Sinclair, other refiners, convenience store chains, independent marketers and retailers.
Sinclair, truck stop operators and railroads are the primary diesel customers.
Jet fuel is sold primarily for commercial use.
The refinery's asphalt and roofing flux products are sold via truck or railcar directly from the refineries or to customers throughout the Mid-Continent region primarily to paving contractors and manufacturers of roofing products.
For the year ended December 31, 2017, sales to Shell Oil represented approximately 12% of our Mid-Continent refineries total sales and 9% of our total consolidated sales.
We have a sales agreement with an affiliate of Shell Oil under which Shell Oil purchases gasoline and diesel production of the El Dorado Refinery and Tulsa Refineries at market prices through October 2018 primarily to support its branded marketing network.


| Global Generation Portfolio(a)(In MW) | NRG Business | Generation Type | Natural gas | Coal | Oil | Nuclear | Wind | Utility Scale Solar | Distributed Solar | Total generation capacity | Capacity attributable to noncontrolling interest | Total net generation capacity |


| Year Ended December 31, | (In thousands) | Apparel | Footwear | Accessories | Total net sales | License revenues | Total net revenues |


| December 31 - in millions 2007 2006 | Deposits | Money market | Demand | Retail certificates of deposit | Savings | Other time | Time deposits in foreign offices | Total deposits | Borrowed funds | Federal funds purchased | Repurchase agreements | Federal Home Loan Bank borrowing | Bank notes and senior debt | Subordinated debt | Other | Total borrowed funds | Total |


| At December 31, PBO Exceeds Fair Value of Plan Assets ABO Exceeds Fair Value of Plan Assets | (in millions) | Projected benefit obligation | Accumulated benefit obligation | Fair value of plan assets | Years Ended December 31, | U.S. Plans | (in millions) | Components of net periodic benefit | cost: | Service cost | Interest cost | Expected return on assets | Amortization of prior service credit | Amortization of net (gain) loss | Curtailment (gain) loss | Settlement loss | Net periodic benefit cost (credit) | Total recognized in Accumulated other | comprehensive income (loss) | Total recognized in net periodic benefit | cost and other comprehensive | income (loss) | At December 31, | Asset class: | Equity securities | Fixed maturity securities | Other investments | Total |


| 2018 2017 2016 | North America | International | Worldwide |


| As of or for the year ended December 31, Exposures Net gains/(losses) reported in income during the year (b) Unrealized gains/(losses) included in other comprehensive income (pretax) during the year | (in millions) | Mortgage-backed securities: | U.S. government agencies | Residential: | Prime and Alt-A | Subprime | Non-U.S. | Commercial | Total mortgage-backed securities | U.S. government agencies(a) |


Quarterly Trends Revenue Spending by advertisers is traditionally strongest in the fourth quarter of each year.
Historically, this seasonality in advertising spending has affected our quarterly results with higher sequential advertising revenue growth from the third to the fourth quarter compared to sequential advertising revenue growth from the fourth quarter to the subsequent first quarter.
For example, our advertising revenue increased 43%, 35% and 25% between the third and fourth quarters of 2013, 2014 and 2015, respectively, while advertising revenue for the first quarter of 2014 and 2015 increased 3% and decreased 10% compared to the fourth quarter of 2013 and 2014, respectively.
Total Costs and Expenses Total costs and expenses, which include significant amounts of stock-based compensation expense, increased in every quarter presented primarily due to the continued expansion of our facilities and an increase in average employee headcount.
The increase in total costs and expenses in the fourth quarter of 2015 was the result of an increase in advertising costs as well as an increase in traffic acquisition costs as a result of the growth of sale to advertisers of our advertising products which we place on third-party publishers’ websites, applications or other offerings.
Credit Facility In October 2013, we entered into a revolving credit agreement with certain lenders which provides for a $1.0 billion revolving unsecured credit facility maturing on October 22, 2018.
Loans under the credit facility bear interest, at our option, at (i) a base rate based on the highest of the prime rate, the federal funds rate plus 0.50% and an adjusted LIBOR rate for a one-month interest period plus 1.00%, in each case plus a margin ranging from 0.00% to 0.75% or (ii) an adjusted LIBOR rate plus a margin ranging from 1.00% to 1.75%.
This margin is determined based on our total leverage ratio for the preceding four fiscal quarter period.
We are also obligated to pay other customary fees for a credit facility of this size and type, including an upfront fee and an unused commitment fee.
Our obligations under the credit facility are guaranteed by one of our wholly-owned subsidiaries.
In addition, the credit facility contains restrictions on payments including cash payment of dividends.
The revolving credit agreement was amended in September 2014 to increase the amount of indebtedness that we may incur and increase the amount of restricted payments that we may make.
This amendment to the revolving credit agreement also provides that if our total leverage ratio exceeds 2.5:1.0 and if the amount outstanding under the credit facility exceeds $500.0 million, or 50% of the amount that may be borrowed under the credit facility, the credit facility will become secured by substantially all of our and certain of our subsidiaries’ assets, subject to limited exceptions.
As of December 31, 2015, no amounts were drawn under the credit facility.
Liquidity and Capital Resources


| Year Ended December 31, | 2012 | (In thousands) | Employee: | Restricted stock and performance shares | Stock options | 7,714 | Non-employee directors: | Restricted stock | Stock options | 671 | Total stock-based compensation |


| At December 31, | (dollar amounts in millions) | Commercial:-1 | Commercial and industrial | Commercial real estate: | Construction | Commercial | Total commercial real estate | Total commercial | Consumer: | Automobile-2 | Home equity | Residential mortgage | Other consumer | Total consumer | Total loans and leases |


Cost of Sales and Service Revenues Cost of sales and service revenues, general and administrative expenses, and goodwill impairment charges were as follows:


| Outstanding Balance December 31, Stated Interest Rate December 31, | 2009 | (in millions) | Senior notes due 2010 | Senior notes due 2015 | Senior notes due 2019 | Senior notes due 2039 | Junior subordinated notes due 2066 | Floating rate revolving credit borrowings due 2013 | Floating rate revolving credit borrowings due 2014 | Floating rate revolving credit borrowings due 2014 | Municipal bond inverse floater certificates due 2021 | Total |


| Years ended December 31, | 2017 | Cost of investment: current-year acquisitions | Cost of investment: prior-year acquisitions | Less: net cash acquired | Total cost of investment | Operating payments1 | Total cash paid for acquisitions2 |


| March 31, | (Dollars in millions) | Cash and cash equivalents | Working capital | Debt, net of cash and cash equivalents | Debt to capital ratio-1 | Net debt to net capital employed-2 | Return on stockholders’ equity-3 |


| As of and for the Year Ended December 31, 2014 | (in millions) | Net interest income | Noninterest income | Total revenue | Noninterest expense | Profit before provision for credit losses | Provision for credit losses | Income before income tax expense | Income tax expense | Net income | Total Average Assets | As of December 31, | (in millions) | BALANCE SHEET DATA: | Total assets | Loans and leases-6 | Allowance for loan and lease losses | Total securities | Goodwill | Total liabilities | Total deposits-7 | Federal funds purchased and securities sold under agreements to repurchase | Other short-term borrowed funds | Long-term borrowed funds | Total stockholders' equity | As of December 31, | 2014 | OTHER BALANCE SHEET DATA: | Asset Quality Ratios | Allowance for loan and lease losses as a % of total loans and leases | Allowance for loan and lease losses as a % of nonperforming loans and leases | Nonperforming loans and leases as a % of total loans and leases | Capital ratios | Tier 1risk-basedcapital ratio-8 | Total risk-based capital ratio-9 | Tier 1 common equity ratio-10 | Tier 1 leverage ratio-11 | (In millions) | Net Cash Provided by Operating Activities | Net Cash Used for Investing Activities | Net Cash Used for Financing Activities |


The NIR-at-risk exposure to an immediate 100 bp increase in market interest rates changed from negative at December 31, 2007 to slightly positive at December 31, 2008, while the NIR-at-risk exposure to a 100 bp downward shock in rates changed from slightly positive to significantly negative.
These changes were the result of two factors.
First, the level of on-balance sheet liquid assets was increased during 2008 in response to the


| 2010 High Low | Quarter ended March 31 | Quarter ended June 30 | Quarter ended September 30 | Quarter ended December 31 | 2009 | Quarter ended March 31 | Quarter ended June 30 | Quarter ended September 30 | Quarter ended December 31 |


| 2013 2012 2011 | Test & Measurement | Environmental | Life Sciences & Diagnostics | Dental | Industrial Technologies |


| As of December 31, | 2018-5 | (In millions) | Consolidated Balance Sheet Data:-1 | Cash and cash equivalents | Short-term investments | Long-term investments | Working capital - continuing operations | Working capital - discontinued operations | Working capital total-2 | Total assets - continuing operations | Total assets - discontinued operations | Total assets | Short-term debt | Long-term debt | Total stockholders’ equity-4 |


CRIP Investment and Asset Allocation Strategies.
The primary goal of the asset allocation strategy of the Plan is to produce a total investment return which will satisfy future annual cash benefit payments to participants and minimize future contributions from the Company.
Additionally, this strategy will diversify the plan assets to minimize nonsystemic risk and provide reasonable assurance that no single security or class of security will have a disproportionate impact on the Plan.
Due to the high funded status of the Plan, the Investment Committee of the CRIP has adopted a conservative asset allocation of 50/50 in equities and fixed income.
The Investment Committee maintains an investment policy for the CRIP, which imposes certain limitations and restrictions regarding allowable types of investments.
The current investment policy imposes those restrictions on investments or transactions such as (1) Equifax common stock or securities, except as might be incidental to any pooled funds which the plan may have, (2) commodities or loans, (3) short sales and the use of margin accounts, (4) put and call options, (5) private placements, and (6) transactions which are related-party in nature as specified by the Canadian Pension Benefits Standards Act and its regulations.
consolidated results of operations, financial condition, or liquidity; however, to the extent possible, where unasserted claims are considered probable and where such claims can be reasonably estimated, we have recorded a liability.
We do not expect that any known lawsuits, claims, environmental costs, commitments, contingent liabilities, or guarantees will have a material adverse effect on our consolidated results of operations, financial condition, or liquidity after taking into account liabilities previously recorded for these matters.
Personal Injury  The cost of personal injuries to employees and others related to our activities is charged to expense based on estimates of the ultimate cost and number of incidents each year.
We use third-party actuaries to assist us in measuring the expense and liability, including unasserted claims.
Compensation for work-related accidents is governed by the Federal Employers Liability Act (FELA).
Under FELA, damages are assessed based on a finding of fault through litigation or out-of-court settlements.
Our personal injury liability activity was as follows:


| As of December | $ in millions | Net derivative liabilities under bilateral agreements | Collateral posted | Additional collateral or termination payments for a one-notch downgrade | Additional collateral or termination payments for a two-notch downgrade |


O&R Superfund The sites at which O&R has been asserted to have liability under Superfund include its manufactured gas sites, its West Nyack site, the Newark Bay site, and other Superfund sites discussed below.
There may be additional sites as to which assertions will be made that O&R has liability.
For a further discussion of claims and possible claims against O&R under Superfund, see Note G to the financial statements in Item 8 (which information is incorporated herein by reference).
Manufactured Gas Sites O&R and its predecessors formerly owned and operated manufactured gas plants at seven sites (O&R MGP Sites) in Orange County and Rockland County, New York.
Three of these sites are now owned by parties other than O&R, and have been redeveloped by them for residential, commercial or industrial uses.
The NYSDEC is requiring O&R to develop and implement remediation programs for the O&R MGP Sites including any neighboring areas to which contamination may have migrated.
Through the end of 2011, O&R has completed remedial investigations at all seven O&R MGP Sites.
O&R has completed the remediation at one of its sites and a portion of another.
O&R has received NYSDEC’s decision regarding the remedial work to be done at three other sites and the remaining portion of a site where remediation has been completed.
Remedial design is ongoing for these sites and remedial construction is planned at one of the sites in 2012.
Feasibility studies will be completed for two sites in 2012.
West Nyack Site In 1991, 1994 and 1997, O&R entered into consent orders with the NYSDEC pursuant to which O&R agreed to conduct a remedial investigation and remediate certain property it owns in West Nyack, New York at which PCBs were discovered.
Petroleum contamination related to a leaking underground storage tank was found as well.
O&R has completed all


| 2008 2007 2006 | Weighted average fair value of options granted | Expected volatility | Dividend yield | Expected life of options in years | Risk-free interest rate |


The table below reports net interest income exposures against a variety of interest rate scenarios.
Exposures are measured as a percentage change in net interest income over the next year due to either instantaneous, or gradual parallel +/- 200 basis point moves in benchmark interest rates.
The net interest income simulation analyses do not include possible future actions that management might undertake to mitigate this risk.
The current limit is an adverse change of 10% related to an instantaneous +/- 200 basis point move.
As the table illustrates, our balance sheet is asset-sensitive: net interest income would benefit from an increase in interest rates.
Exposure to a decline in interest rates is well within limit.
It should be noted that the magnitude of any possible decline in interest rates is constrained by the low absolute starting levels of rates.
While an instantaneous and severe shift in interest rates was used in this analysis, we believe that any actual shift in interest rates would likely be more gradual and would therefore have a more modest impact.


| 2003 $1,150,786 | 2004 | 2005 | 2006 | 2007 | Settlement date before December 31, | 2016 | December 31, 2015 | (millions) | Foreign currency sold | US dollars sold for sterling | Euro sold for US dollars | Japanese yen sold for US dollars | Euro sold for sterling | Total | Fair Value(i) |


| 2013 2012 2011 2010 2009 | As of December 31(dollars in millions) | Commercial Banking: | Commercial real estate | Commercial and industrial | Equipment financing | Retail: | Residential mortgage | Home equity | Other consumer | Total originated allowance for loan losses |


| Con Edison Con Edison of New York | (% of Pre-tax income) | Statutory Tax Rate | Federal | Changes in computed taxes resulting from: | State income tax | Depreciation related differences | Cost of removal | Other | Effective Tax Rate |


| In millions of dollars 2008 2007 2006 | Total revenues, net of interest expense | Income (loss) from discontinued operations | Loss on sale | Provision (benefit) for income taxes and minority interest, net of taxes | Income (loss) from discontinued operations, net of taxes | In millions of dollars | Cash flows from operating activities | Cash flows from investing activities | Cash flows from financing activities | Net cash provided by (used in) discontinued operations |


Table of Contents QUALCOMM Incorporated NOTES TO CONSOLIDATED FINANCIAL STATEMENTS suboptimal exercise factor are based on the Companys historical option cancellation and employee exercise information, respectively.
The expected life of employee stock options is a derived output of the binomial model and is impacted by all of the underlying assumptions used by the Company.
The weighted-average expected life of employee stock options granted, as derived from the binomial model, was 5.5 years, 5.6 years and 5.9 years during fiscal 2010, 2009 and 2008, respectively.
The grant-date fair values of RSUs are estimated based on the fair market values of the underlying stock on the dates of grant.
The weighted-average estimated fair values of employee RSUs granted during fiscal 2010 and 2008 were $35.61 and $54.42 per share, respectively.
No RSUs were granted in fiscal 2009.
Shares are issued on the vesting dates net of the amount of shares needed to satisfy statutory tax withholding requirements to be paid by the Company on behalf of the employees.
As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding.
Share-based compensation expense is adjusted to exclude amounts related to share-based awards that are expected to be forfeited.
The annual pre-vest forfeiture rate for stock options and RSUs granted in fiscal 2010 was estimated to be approximately 3% based on historical experience.
The effect of pre-vest forfeitures on the Companys recorded expense in fiscal 2010, 2009 and 2008 for awards granted prior to fiscal 2010 was negligible due to the predominantly monthly vesting of stock options that were granted in those periods.
Total estimated share-based compensation expense, related to all of the Companys share-based awards, was comprised as follows (in millions):


| Reporting Unit December 31, 2011 | U.S. Brokerage | Capital Markets | Retail Bank | Total goodwill | Year Ended December 31, | 2018 | Risk-free interest rate | Average expected life in years | Expected volatility | Expected dividend yield |


| Year Ended December 31, | 2011 | Gross | (thousands of acres) | Onshore US | Deepwater Gulf of Mexico | Equatorial Guinea | Suriname | Total |


| U.S. and non-U.S. plans | In millions of dollars | Postretirement expense-1 | Company contributions |


| As of December 2014  Type of Retained Interests | $ in millions | Fair value of retained interests | Weighted average life (years) | Constant prepayment rate | Impact of 10% adverse change | Impact of 20% adverse change | Discount rate | Impact of 10% adverse change | Impact of 20% adverse change | As of December 2013 Type of Retained Interests | $ in millions | Fair value of retained interests | Weighted average life (years) | Constant prepayment rate | Impact of 10% adverse change | Impact of 20% adverse change | Discount rate | Impact of 10% adverse change | Impact of 20% adverse change |


$30.6 billion for Bank of America Corporation, $11.6 billion for Bank of America, N. A.  and $9.4 billion of other debt.
In December 2017, pursuant to a private offering, the Corporation exchanged $11.0 billion of outstanding long-term debt for new fixed/floating-rate senior notes, subject to certain terms and conditions.
Based on the attributes of the exchange transactions, the newly issued securities are not considered substantially different, for accounting purposes, from the exchanged securities.
Therefore, there was no impact to the Corporations results of operations as any amounts paid to debt holders were capitalized, and the premiums or discounts on the outstanding long-term debt were carried over to the new securities and will be amortized over their contractual lives using a revised effective interest rate.


| SharesAuthorizedand Outstanding Call Price perShare as ofDecember 31, 2017 | 2017 | Entergy Arkansas Preferred Stock | Without sinking fund: | Cumulative, $100 par value: | 4.32% Series | 4.72% Series | 4.56% Series | 4.56% 1965 Series | Total without sinking fund |


| At July 31, 2018 At July 31, 2017 | (In millions) | Cash equivalents: | In cash and cash equivalents | Available-for-sale debt securities: | In investments | In funds held for customers | In long-term investments | Total available-for-sale debt securities |


Australia, China, India and Japan, was partially muted by foreign currency translation, which had a $63.9 million negative impact on total revenue during the year ended December 31, 2013 primarily driven by weakness in the Australian dollar, Japanese yen and Indian rupee when converting to U. S.  dollars during the year ended December 31, 2013 versus the year ended December 31, 2012.
Cost of services increased by $45.8 million, or 9.0%, for the year ended December 31, 2013 as compared to the year ended December 31, 2012, driven by increased commission expense resulting from higher sales transaction revenue and higher payroll-related costs due to increased headcount.
Higher salaries and related costs associated with our property, facilities and project management contracts also contributed to the increase.
Foreign currency translation had a $37.5 million positive impact on cost of services during the year ended December 31, 2013.
Cost of services as a percentage of revenue increased to 63.8% for the year ended December 31, 2013 from 62.5% for the year ended December 31, 2012, primarily attributable to a concentration of commissions among higher producing professionals during the year ended December 31, 2013.


| Year ended December 31, | 2009 | (in millions) | Operating results: | Revenues | Expenses | Adjusted operating income | Realized investment gains (losses), net, and related adjustments(1) | Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests -2 | Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures |


| 2011 % Change 2010 % Change 2009 | Revenue | Gross Profit | Gross Profit Margin |


| As of and for the Year Ended December 31, | (dollars in millions) | Net interest income | Noninterest income | Total revenue | Noninterest expense | Profit before provision for credit losses | Provision for credit losses | Income before income tax expense | Income tax expense | Net income | Loans and leases and loans held for sale (year-end) | Average Balances: | Total assets | Loans and leases and loans held for sale-1 | Deposits and deposits held for sale-2 | Interest-earning assets | Key Performance Metrics: | Net interest margin | Efficiency ratio | Average loans to average deposits ratio-3 | Return on average total tangible assets | Return on average tangible common equity-4 | Years | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 – 2019 |


Noble Energy, Inc.
Supplemental Oil and Gas Information (Unaudited) 118 Capitalized Costs Relating to Oil and Gas Producing Activities (Unaudited) Aggregate capitalized costs relating to crude oil and natural gas producing activities are as follows:


| (in millions) 2017 2016 2015 | Beginning AUM | Net inflows (outflows) | Long-term | Cash management | Advisory-1 | Total net inflows (outflows) | Acquisitions-2 | Market change | FX impact-3 | Total change | Ending AUM | (in millions) | Retail: | Equity | Fixed income | Multi-asset | Alternatives | Retail subtotal | iSharesETFs: | Equity | Fixed income | Multi-asset | Alternatives | iSharesETFs subtotal | Institutional: | Active: | Equity | Fixed income | Multi-asset | Alternatives | Active subtotal | Index: | Equity | Fixed income | Multi-asset | Alternatives | Index subtotal | Institutional subtotal | Long-term | Cash management | Advisory-4 | Total |


Oilfield Services Full-year 2011 revenue of $37.0 billion was 39% higher than 2010 primarily reflecting the acquisition of Smith on August 27, 2010 as well as the significantly improved activity, pricing and asset efficiency for Well Services Technologies in North America as the market transitioned to liquid-rich plays demanding increasing service intensity in drilling and completing horizontal wells.
Year-on-year pretax operating margin increased 75 bps to 19.8% largely due to the improved pricing and asset efficiency for Well Services Technologies in North America and the resumption of higher-margin activity in the US Gulf of Mexico.
However, the margin expansion was tempered by activity disruptions from the geopolitical unrest in North Africa and in the Middle East during the first quarter of 2011.


| Years Ended December 31, | 2010 | Estimated | Carrying | Value Prior to | Measurement | (In millions) | Mortgage loans: -1 | Held-for-investment | Held-for-sale | Mortgage loans, net | Other limited partnership interests -2 | Real estate joint ventures -3 |


| Expected Maturity Date | 2016 | Fixed-rate debt | Weighted avg. interest rate | Variable-rate debt | Weighted avg. interest rate |


| Years Ended | September 27, 2008 | Amount | Service and Other Revenues |


These products are often offered to employer groups as bundles, where the subscribers are offered various HMO and PPO options, with various employer contribution strategies as determined by the employer.
Paramount to our product strategy, we have developed a group of innovative consumer products, styled as Smart products, that we believe will be a long-term solution for employers.
We believe this new generation of products provides more (1) choices for the individual consumer, (2) transparency of provider costs, and (3) benefit designs that engage consumers in the costs and effectiveness of health care choices.
Innovative tools and technology are available to assist consumers with these decisions, including the trade-offs between higher premiums and point-of-service costs at the time consumers choose their plans, and to suggest ways in which the consumers can maximize their individual benefits at the point they use their plans.
We believe that when consumers can make informed choices about the cost and effectiveness of their health care, a sustainable long term solution for employers can be realized.
Smart products, which accounted for approximately 55% of enrollment in all of our consumer-choice plans as of December 31, 2007, are only sold to employers who use Humana as their sole health insurance carrier.
Some employers have selected other types of consumer-choice products, such as, (1) a product with a high deductible, (2) a catastrophic coverage plan, or (3) ones that offer a spending account option in conjunction with more traditional medical coverage or as a stand alone plan.
Unlike our Smart products, these products, while valuable in helping employers deal with near-term cost increases by shifting costs to employees, are not considered by us to be long-term comprehensive solutions to the employers cost dilemma, although we view them as an important interim step.
HMO Our commercial HMO products provide prepaid health insurance coverage to our members through a network of independent primary care physicians, specialty physicians, and other health care providers who
Humana Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) During 2008, we terminated all of our interest-rate swap agreements for cash consideration of $93.0 million.
We recognized a $10.4 million impairment charge as a realized investment loss associated with the termination of a swap with a subsidiary of Lehman, which subsequently filed for bankruptcy protection.13.
EMPLOYEE BENEFIT PLANS Employee Savings Plan We have defined contribution retirement and savings plans covering eligible employees.
Our contribution to these plans is based on various percentages of compensation, and in some instances, on the amount of our employees contributions to the plans.
The cost of these plans amounted to approximately $79.6 million in 2008, $69.7 million in 2007, and $56.0 million in 2006, all of which was funded currently to the extent it was deductible for federal income tax purposes.
Based on the closing stock price of $37.28 on December 31, 2008, approximately 19% of the retirement and savings plans assets were invested in our common stock representing 3% of the shares outstanding as of December 31, 2008.
Through December 31, 2006, the Company match was invested in the Humana common stock fund.
However, a participant could reinvest any funds, including the Company match in the Humana common stock fund, in any other plan investment option at any time.
Beginning January 1, 2007, the Companys cash match is invested pursuant to the participants contribution direction.
Stock-Based Compensation We have plans under which options to purchase our common stock and restricted stock awards have been granted to executive officers, directors and key employees.
The terms and vesting schedules for stock-based awards vary by type of grant.
Generally, the awards vest upon time-based conditions.
Upon exercise, stock-based compensation awards are settled with authorized but unissued company stock.
The compensation expense that has been charged against income for these plans was as follows for the years ended December 31, 2008, 2007, and 2006:


Reported within interest and other income, net in our consolidated statement of operations.
The comparability of our operating results has also been affected by the inclusion of a 53 week in Fiscal 2010, which resulted in incremental revenues of approximately $70 million and additional net income of approximately $13 million in Fiscal 2010.
The following discussion of operating results highlights, as necessary, the significant changes in operating results arising from these items and transactions.
However, unusual items or transactions may occur in any period.
Accordingly, investors and other financial statement users individually should consider the types of events and transactions that have affected operating trends.


| Average Interest Rate Amortized Cost Fair Value | Cash equivalents: | Fixed rate | Variable rate | Short-term investments: | Fixed rate |


| December 31, | 2016 | (millions, except percentages) | Total Cash-1 | Amount Available to be Borrowed Under Revolving Credit Facility-2 | Total Liquidity | Total Debt-3 | Noble Energy Share of Equity | Ratio of Debt-to-Book Capital-4 |


| (in millions of U.S. dollars) 2008 2007 | Fair value of net assets denominated in foreign currencies | Percentage of fair value of total net assets | Pre-tax impact on equity of hypothetical 10 percent strengthening of the U.S. dollar |


| Weighted- Average Exercise Price Per Share Shares TotalIntrinsic Value of Shares Average Remaining Life (Years) | Beginning of year | Options granted | Options exercised | Options canceled | End of year | Exercisable at end of year |


In 2016, Arconic also recognized discrete income tax benefits related to the release of valuation allowances on certain net deferred tax assets in Russia and Canada of $19 and $20 respectively.
After weighing all available evidence, management determined that it was more likely than not that the net income tax benefits associated with the underlying deferred tax assets would be realizable based on historic cumulative income and projected taxable income.
Arconic also recorded additional valuation allowances in Australia of $93 related to the Separation Transaction, in Spain of $163 related to a tax law change and in Luxembourg of $280 related to the Separation Transaction as well as a tax law change.
These valuation allowances fully offset current year changes in deferred tax asset balances of each respective jurisdiction, resulting in no net impact to tax expense.
The need for a valuation allowance will be reassessed on a continuous basis in future periods by each jurisdiction and, as a result, the allowances may increase or decrease based on changes in facts and circumstances.


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 $566 million at December 31, 2015.
For additional information, see Note 11 to our Consolidated Financial Statements.
Income Taxes We have $1,617 million of unrecognized tax benefits at December 31, 2015 for uncertain tax positions.
For further discussion of income taxes, see Note 4 to our Consolidated Financial Statements.
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Free Cash Flow – Cash generated by operating activities totaled $6.2 billion, reduced by $3.6 billion for cash used in investing activities and a 37% increase in dividends paid, yielding free cash flow of $1.4 billion.
Free cash flow is defined as cash provided by operating activities (adjusted for the reclassification of our receivables securitization facility), less cash used in investing activities and dividends paid.
Free cash flow is not considered a financial measure under accounting principles generally accepted in the U. S.  (GAAP) by SEC Regulation G and Item 10 of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner.
We believe free cash flow is important to management and investors in evaluating our financial performance and measures our ability to generate cash without additional external financings.
Free cash flow should be considered in addition to, rather than as a substitute for, cash provided by operating activities.
The following table reconciles cash provided by operating activities (GAAP measure) to free cash flow (non-GAAP measure):
[a] Effective January 1, 2010, a new accounting standard required us to account for receivables transferred under our receivables securitization facility as secured borrowings in our Consolidated Statements of Financial Position and as financing activities in our Consolidated Statements of Cash Flows.
The receivables securitization facility is included in our free cash flow calculation to adjust cash provided by operating activities as though our receivables securitization facility had been accounted for under the new accounting standard for all periods presented.2013 Outlook ?


| Year Ended December 31 2005 2004 2003 | Depr. &Amort. | (In millions) | CNA Financial | Lorillard | Loews Hotels | Diamond Offshore | Boardwalk Pipeline | Corporate and other | Total |


Class B Common Stock Conversions At the annual meeting of stockholders of the Company on June 7, 2007, the Companys stockholders approved amendments to the Companys certificate of incorporation designed to facilitate an accelerated, orderly conversion of Class B common stock into Class A common stock for subsequent sale.
Through conversion transactions, in amounts and at times designated by the Company, current holders of shares of Class B common stock who elect to participate will be eligible to convert their shares, on a one-for-one basis, into shares of Class A common stock for subsequent sale or transfer to public investors, within a 30 day transitory ownership period.
Holders of Class B common stock are not allowed to participate in any vote of holders of Class A common stock during this transitory ownership period.
The number of shares of Class B common stock eligible for conversion transactions is limited to an annual aggregate number of up to 10% of the total combined outstanding shares of Class A common stock and Class B common stock, based upon the total number of shares outstanding as of December 31 of the prior calendar year.
In addition, prior to May 31, 2010, a conversion transaction will not be permitted that will cause the number of shares of Class B common stock to represent less than 15% of the total number of outstanding shares of Class A common stock and Class B common stock outstanding.
During 2007, the Company implemented and completed two separate conversion programs in which 11,387 shares, of an eligible 13,400 shares, of Class B common stock were converted into an equal number of shares of Class A common stock and subsequently sold or transferred to public investors.
In February 2008, the Companys Board of Directors authorized the conversion and sale or transfer of up to 13,100 shares of Class B common stock into Class A common stock in one or more conversion programs during 2008.
In May 2008, the Company implemented and completed a conversion program in which all of the 13,100 authorized shares of Class B common stock were converted into an equal number of shares of Class A common stock and subsequently sold or transferred by participating holders of Class B common stock to public investors.
In February 2009, the Companys Board of Directors authorized the conversion and sale or transfer of up to 11,000 shares of Class B common stock into Class A common stock.
In May 2009, the Company implemented and completed a conversion program in which 10,871 shares of Class B common stock were converted into an equal number of shares of Class A common stock and subsequently sold or transferred to public investors.
Notwithstanding the conversion transactions completed during 2007, 2008 and 2009, commencing on the fourth anniversary of the IPO, each share of Class B common stock will be convertible, at the holders option, into a share of Class A common stock on a one-for-one basis.
In February 2010, the Companys Board of Directors authorized programs to facilitate conversions of shares of Class B common stock on a one-for-one


| December 31 | (Dollars in millions) | Consumer | Residential mortgage-2 | Home equity | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer-3 | Other consumer-4 | Total consumer loans excluding loans accounted for under the fair value option | Consumer loans accounted for under the fair value option-5 | Total consumer | Commercial | U.S. commercial-6 | Commercial real estate-7 | Commercial lease financing | Non-U.S. commercial | Total commercial loans excluding loans accounted for under the fair value option | Commercial loans accounted for under the fair value option-5 | Total commercial | Total loans and leases |


| Year Ended December 31, | (dollars in millions) | Service charges and fees | Card fees | Mortgage banking fees | Trust and investment services fees | Foreign exchange and trade finance fees | Capital markets fees | Bank-owned life insurance income | Securities gains, net | Other income-1 | Noninterest income | 2015 | (DOLLARS IN THOUSANDS) | Cash and cash equivalents-1 | Credit facilities and bank overdrafts-2 | Long-term debt:-3 | Senior notes — 2006 | Senior notes — 2007 | Senior notes — 2013 |


| As of December | $ in millions | Equity | Debt | Total |


| In millions of dollars December 31, 2008 December 31, 2007 | Carrying amount reported on the Consolidated Balance Sheet | Aggregate fair value in excess of unpaid principal balance | Balance on non-accrual loans or loans more than 90 days past due | Aggregate unpaid principal balance in excess of fair value for non-accrual loans or loans more than 90 days pastdue |


Property Management Expenses Property management expenses for the year ended December 31, 2015 were approximately $31.0 million, a decrease of $1.1 million from the year ended December 31, 2014.
The majority of the decrease was related to a decrease in state franchise taxes of $2.1 million, partially offset by an increase in insurance expense of $0.6 million, an increase in payroll expense of $0.3 million, and an increase in incentive expense $0.3 million.


| (In thousands) March 2019 March 2018 December 2017 | Trade | Royalty and other | Total accounts receivable | Less allowance for doubtful accounts | Accounts receivable, net |


| Years ended December 31, 2010 2009 2008 | Retail brokerage: | Americas | United Kingdom | Europe, Middle East & Africa | Asia Pacific | Total retail brokerage | Reinsurance brokerage | Total |


| Year ended December 31, 2007 Residential mortgage | (in millions, except for ratios and where | otherwise noted) | Principal securitized | Pretax gains | All cash flows during the period: | Proceeds from new securitizations | Servicing fees collected | Other cash flows received(a) | Proceeds from collections reinvestedin revolving securitizations | Purchases of previously transferredfinancial assets (or the underlyingcollateral)(b) | Cash flows received on the intereststhat continue to be held by theFirm(d) | Key assumptions used to measure retainedinterests originated during the year(rates per annum): | Prepaymentrate(e) | PPR | Weighted-average life (in years) | Expected credit losses | Discount rate |


| Year Ended December 31 % Change in | $ in millions | Sales | Operating income | Operating margin rate |


| As of December 2017 | DBRS | Short-term debt | Long-term debt | Subordinated debt | Trust preferred | Preferred stock | Ratings outlook |


The Company monitors the financial health and stability of its lenders under the revolving credit and long term debt facilities, however during any period of significant instability in the credit markets lenders could be negatively impacted in their ability to perform under these facilities.
In July 2011, in connection with the Company’s acquisition of its corporate headquarters, the Company assumed a $38.6 million nonrecourse loan secured by a mortgage on the acquired property.
The acquisition of the Company’s corporate headquarters was accounted for as a business combination, and the carrying value of the loan secured by the acquired property approximates fair value.
The assumed loan had an original term of approximately ten years with a scheduled maturity date of March 1, 2013.
The loan includes a balloon payment of $37.3 million due at maturity, and may not be prepaid.
The assumed loan is nonrecourse with the lender’s remedies for non-performance limited to action against the acquired property and certain required reserves and a cash collateral account, except for nonrecourse carve outs related to fraud, breaches of certain representations, warranties or covenants, including those related to environmental matters, and other standard carve outs for a loan of this type.
The loan requires certain minimum cash flows and financial results from the property, and if those requirements are not met, additional reserves may be required.
The assumed loan requires prior approval of the lender for certain matters related to the property, including material leases, changes to property management, transfers of any part of the property and material alterations to the property.
The loan has an interest rate of 6.73%.
In connection with the assumed loan, the Company incurred and capitalized $0.8 million in deferred financing costs.
As of December 31, 2011, the outstanding balance on the loan was $38.2 million.
In addition, in connection with the assumed loan for the acquisition of its corporate headquarters, the Company was required to set aside amounts in reserve and cash collateral accounts.
As of December 31, 2011, $2.0 million of restricted cash was included in prepaid expenses and other current assets, and the remaining $3.0 million of restricted cash was included in other long term assets.
Interest expense was $3.9 million, $2.3 million and $2.4 million for the years ended December 31, 2011, 2010 and 2009, respectively.
Interest expense includes the amortization of deferred financing costs and interest expense under the credit and long term debt facilities, as well as the assumed loan discussed above.8.
Commitments and Contingencies Obligations Under Operating Leases The Company leases warehouse space, office facilities, space for its retail stores and certain equipment under non-cancelable operating leases.
The leases expire at various dates through 2023, excluding extensions at the Company’s option, and include provisions for rental adjustments.
The table below includes executed lease agreements for factory house stores that the Company did not yet occupy as of December 31, 2011 and does not include contingent rent the company may incur at its retail stores based on future sales above a specified limit.
The following is a schedule of future minimum lease payments for non-cancelable real property operating leases as of December 31, 2011:


ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES In June 2006, the FASB issued FASB Interpretation No.48 (FIN 48), Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No.109.
 FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
This interpretation also provides guidance on classification, interest and penalties, accounting in interim periods and transition, and significantly expands income tax disclosure requirements.
It applies to all tax positions accounted for in accordance with SFAS No.109 and is effective for fiscal years beginning after December 15, 2006.  International Paper will apply the provisions of this interpretation beginning


| 2006 2005 2004 | (in millions) | Net income | Other comprehensive income (loss), net of tax: | Change in foreign currency translation adjustments | Change in net unrealized investments gains (losses)(1) | Additional minimum pension liability adjustment | Cumulative effect of accounting change | Other comprehensive loss, net of tax benefit of $264, $371, $461 | Comprehensive income | Accumulated Other Comprehensive Income (Loss) | Foreign Currency Translation Adjustments | (in millions) | Balance, December 31, 2003 | Change in component during year-2 | Balance, December 31, 2004 | Change in component during year | Balance, December 31, 2005 | Change in component during year | Impact of adoption of SFAS No. 158-3 | Balance, December 31, 2006 |


| Net tangible assets acquired as of July 13, 2006 $800 | In-process research and development | Developed technology and know how | Customer relationship | Trade name | Order Backlog | Deferred income taxes | Goodwill | Estimated Purchase Price |


| (in millions) 2003 2002 Change | Compensation expense | Occupancy expense | Technology and communications expense | Other expense | Surety settlement and litigation reserve | Merger and restructuring costs | Total noninterest expense |


Proven, or measured, reserves are those reserves for which the quantity is computed from dimensions revealed by drill data, together with other direct and measurable observations such as outcrops, trenches and quarry faces.
The grade and quality of those reserves are computed from the results of detailed sampling, and the sampling and measurement data are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established.
Probable, or indicated, reserves are those reserves for which quantity and grade and quality are computed partly from specific measurements and partly from projections based on reasonable, though not drilled, geologic evidence.
The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
Reported proven and probable reserves include only quantities that are owned in fee or under lease, and for which all appropriate zoning and permitting have been obtained.
Leases, zoning, permits, reclamation plans and other government or industry regulations often set limits on the areas, depths and lengths of time allowed for mining, stipulate setbacks and slopes that must be left in place, and designate which areas may be used for surface facilities, berms, and overburden or waste storage, among other requirements and restrictions.
Our reserve estimates take into account these factors.
Technical and economic factors also affect the estimates of reported reserves regardless of what might otherwise be considered proven or probable based on a geologic analysis.
For example, excessive overburden or weathered rock, rock quality issues, excessive mining depths, groundwater issues, overlying wetlands, endangered species habitats, and rights of way or easements may effectively limit the quantity of reserves considered proven and probable.
In addition, computations for reserves in-place are adjusted for estimates of unsaleable sizes and materials as well as pit and plant waste.
The 15.0 billion tons of estimated proven and probable aggregates reserves reported at the end of 2013 and 2012 include reserves at inactive and greenfield (undeveloped) sites.
The table below presents, by region, the tons of proven and probable aggregates reserves as of December 31, 2013 and the types of facilities operated.


Fiscal 2011 Compared to Fiscal 2010 Net Sales Net sales for Fiscal 2011 were $6,170.5 million, an increase of $245.3 million, or 4.1%, over net sales for Fiscal 2010.
This growth was primarily due to an increase in comparable store sales and sales from AAP and AI stores opened within the last year.
AAP produced sales of $5,884.9 million, an increase of $193.8 million, or 3.4%, over Fiscal 2010.
The AAP comparable store sales increase of 1.9% was driven by an increase in average sales per customer.
AI produced sales of $301.1 million, an increase of $51.6 million, or 20.7%, over Fiscal 2010.


| December 31, 2007(in millions) 2007 | Third-party | Retained interest | Total | December 31, 2007 (in billions) | Top 12 states | California | New York | Texas | Florida | Illinois | Ohio | New Jersey | Michigan | Arizona | Pennsylvania | Colorado | Indiana | All other | Total |


CRITICAL ACCOUNTING ESTIMATES Our financial results are affected by the selection and application of accounting policies and methods.
Significant accounting policies which require managements 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 managements 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 Boards (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


| Percent Change | For the years ended December 31, | In millions of dollars except per share amounts | Net Sales | Cost of Sales | Gross Profit | Gross Margin | SM&A Expense | SM&A Expense as a percent of net sales | Long-Lived and Intangible Asset Impairment Charges | Business Realignment Costs | Operating Profit | Operating Profit Margin | Interest Expense, Net | Other (Income) Expense, Net | Provision for Income Taxes | Effective Income Tax Rate | Net Income Including Noncontrolling Interest | Less: Net Loss Attributable to Noncontrolling Interest | Net Income Attributable to The Hershey Company | Net Income Per Share—Diluted | December 31, | ContractAmount | In millions of dollars | Foreign currency forward exchange contracts to purchase foreign currencies | Foreign currency forward exchange contracts to sell foreign currencies |


Entergy Corporation Notes to Consolidated Financial Statements 52 Income Taxes Entergy Corporation and the majority of its subsidiaries file a United States consolidated federal income tax return.
Income taxes are allocated to the subsidiaries in proportion to their contribution to consolidated taxable income.
SEC regulations require that no Entergy subsidiary pay more taxes than it would have paid if a separate income tax return had been filed.
In accordance with SFAS 109,
Accounting for Income Taxes,
deferred income taxes are recorded for all temporary differences between the book and tax basis of assets and liabilities, and for certain credits available for carryforward.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates in the period in which the tax or rate was enacted.
Investment tax credits are deferred and amortized based upon the average useful life of the related property, in accordance with ratemaking treatment.
Earnings per Share The following table presents Entergy's basic and diluted earnings per share (EPS) calculation included on the consolidated income statement:


| Fair Value Impact | In Millions | Interest rate instruments | Foreign currency instruments | Commodity instruments | Equity instruments | 2017 | Cost of sales | Restructuring costs | Acquisition integration-related costs | Restructuring and integration-related costs | Selling, general and administrative expenses | Restructuring costs | Acquisition transaction-related costs | Acquisition integration-related costs | Restructuring, acquisition and integration-related costs |


MORGAN STANLEY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) leasing business to its estimated fair value of approximately $2.0 billion.
In determining the charge that was recorded in the third quarter of fiscal 2005, the Company estimated the value to be realized in selling the aircraft leasing business as a whole.
The estimated value of the business was based on the appraised values of the aircraft portfolio, an evaluation of then current market conditions, recent transactions involving the sales of similar aircraft leasing businesses, a detailed assessment of the portfolio and additional valuation analyses.
On January 30, 2006, the Company announced that it had signed a definitive agreement under which it would sell its aircraft leasing business to Terra Firma, a European private equity group, for approximately $2.5 billion in cash and the assumption of liabilities.
Based on the terms of the agreement and in accordance with SFAS No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No.144”), the Company revised its estimate of the fair value (less selling costs) of the aircraft leasing business and, as a result, in the fourth quarter, reduced the pre-tax charge recorded in the third quarter of fiscal 2005 by approximately $1.1 billion.
Full year results for fiscal 2005 reflected a charge of $509 million ($316 million after-tax).
The sale was completed on March 24, 2006.
The results for discontinued operations in fiscal 2006 included a loss of $125 million ($75 million after-tax) related to the impact of the finalization of the sales proceeds and balance sheet adjustments related to the closing.
Gross revenues from the aircraft leasing business included in discontinued operations was $137 million and $417 million in fiscal 2006 and fiscal 2005, respectively.


LENNAR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) establishment of a trend and adjusts its historical information accordingly in order to develop assumptions on the projected absorption pace in the cash flow model for a community.
In order to determine the assumed sales prices included in its cash flow models, the Company analyzes the historical sales prices realized on homes it delivered in the community and other comparable communities in the geographical area as well as the sales prices included in its current backlog for such communities.
In addition, the Company considers internal and external market studies and trends, which generally include, but are not limited to, statistics on sales prices in neighboring communities and sales prices on similar products in non-neighboring communities in the geographic area where the community is located.
When analyzing its historical sales prices and corresponding market studies, the Company also places greater emphasis on more current metrics and trends such as future forecasted sales prices in neighboring communities as well as future forecasted sales prices for similar products in non-neighboring communities.
Generally, if the Company notices a variation from historical results over a span of two fiscal quarters, the Company considers such variation to be the establishment of a trend and adjusts its historical information accordingly in order to develop assumptions on the projected sales prices in the cash flow model for a community.
In order to arrive at the Company's assumed costs to build and deliver homes, the Company generally assumes a cost structure reflecting contracts currently in place with its vendors adjusted for any anticipated cost reduction initiatives or increases in cost structure.
Those costs assumed are used in the cash flow model for the Company's communities.
Since the estimates and assumptions included in the Company's cash flow models are based upon historical results and projected trends, they do not anticipate unexpected changes in market conditions or strategies that may lead the Company to incur additional impairment charges in the future.
Using all available information, the Company calculates its best estimate of projected cash flows for each community.
While many of the estimates are calculated based on historical and projected trends, all estimates are subjective and change from market to market and community to community as market and economic conditions change.
The determination of fair value also requires discounting the estimated cash flows at a rate the Company believes a market participant would determine to be commensurate with the inherent risks associated with the assets and related estimated cash flow streams.
The discount rate used in determining each asset's fair value depends on the community's projected life and development stage.
The Company generally uses a discount rate of approximately 20%, subject to the perceived risks associated with the community's cash flow streams relative to its inventory.
The Company estimates the fair value of inventory evaluated for impairment based on market conditions and assumptions made by management at the time the inventory is evaluated, which may differ materially from actual results if market conditions or assumptions change.
For example, changes in market conditions and other specific developments or changes in assumptions may cause the Company to re-evaluate its strategy regarding previously impaired inventory, as well as inventory not currently impaired but for which indicators of impairment may arise if market deterioration occurs, and certain other assets that could result in further valuation adjustments and/or additional write-offs of option deposits and pre-acquisition costs due to abandonment of those options contracts.
As ofNovember 30,2015, the Company reviewed its communities for potential indicators of impairments and identified 13 homebuilding communities with 931 homesites and a carrying value of $121.7 million as having potential indicators of impairment.
Of those communities, the Company recorded valuation adjustments of $8.1 million on 209 homesites in 5 communities with a carrying value of $19.4 million.
As of November 30, 2014, the Company reviewed its communities for potential indicators of impairments and identified 26 homebuilding communities with 1,774 homesites and a carrying value of$145.3 million as having potential indicators of impairment.
Of those communities, the Company recorded valuation adjustments of$2.9 million on 120 homesites in one community with a carrying value of $8.1 million.
The table below summarizes the most significant unobservable inputs used in the Company's discounted cash flow model to determine the fair value of its communities for which the Company recorded valuation adjustments during the years ended November 30,2015,2014 and 2013:


do so, CME invests such contributions in assets that mirror the assumed investment choices.
The balances in these plans are subject to the claims of general creditors of the exchange and totaled $38.7 million and $31.8 million at December 31, 2012 and 2011 respectively.
Although the value of the plans is recorded as an asset in marketable securities in the consolidated balance sheets, there is an equal and offsetting liability.
The investment results of these plans have no impact on net income as the investment results are recorded in equal amounts to both investment income and compensation and benefits expense.
Supplemental Savings Plan.
CME maintains a supplemental plan to provide benefits for employees who have been impacted by statutory limits under the provisions of the qualified pension and savings plan.
Employees in this plan are subject to the vesting requirements of the underlying qualified plans.
Deferred Compensation Plan.
A deferred compensation plan is maintained by CME, under which eligible officers and members of the board of directors may contribute a percentage of their compensation and defer income taxes thereon until the time of distribution.
COMEX Members’ Retirement Plan and Benefits.
COMEX maintains a retirement and benefit plan under the COMEX Members’ Recognition and Retention Plan (MRRP).
This plan provides benefits to certain members of the COMEX division based on long-term membership, and participation is limited to individuals who were COMEX division members prior to NYMEX’s acquisition of COMEX in 1994.
No new participants were permitted into the plan after the date of this acquisition.
Under the terms of the MRRP, the company is required to fund the plan with a minimum annual contribution of $0.8 million until it is fully funded.
All benefits to be paid under the MRRP are based on reasonable actuarial assumptions which are based upon the amounts that are available and are expected to be available to pay benefits.
Total contributions to the plan were $0.8 million for each of 2010 through 2012.
At December 31, 2012 and 2011, the obligation for the MRRP totaled $22.7 million and $21.6 million, respectively.
Assets with a fair value of $18.4 million and $17.7 million have been allocated to this plan at December 31, 2012 and 2011, respectively, and are included in marketable securities and cash and cash equivalents in the consolidated balance sheets.
The balances in these plans are subject to the claims of general creditors of COMEX.13.
COMMITMENTS Operating Leases.
CME Group has entered into various non-cancellable operating lease agreements, with the most significant being as follows: ?
In April 2012, the company sold two buildings in Chicago at 141 W.  Jackson and leased back a portion of the property.
The operating lease, which has an initial lease term ending on April 30, 2027, contains four consecutive renewal options for five years.  ?
In January 2011, the company entered into an operating lease for office space in London.
The initial lease term, which became effective on January 20, 2011, terminates on March 24, 2026, with an option to terminate without penalty in January 2021.  ?
In July 2008, the company renegotiated the operating lease for its headquarters at 20 South Wacker Drive in Chicago.
The lease, which has an initial term ending on November 30, 2022, contains two consecutive renewal options for seven and ten years and a contraction option which allows the company to reduce its occupied space after November 30, 2018.
In addition, the company may exercise a lease expansion option in December 2017.  ?
In August 2006, the company entered into an operating lease for additional office space in Chicago.
The initial lease term, which became effective on August 10, 2006, terminates on November 30, 2023.
The lease contains two 5-year renewal options beginning in 2023.
At December 31, 2012, future minimum payments under non-cancellable operating leases were payable as follows (in millions):


| Total Revenues Property, Plant and Equipment | Dollars in Millions | United States | Europe | Rest of the World | Other(a) | Total |


Threadneedle Equity Incentive Plan (‘‘EIP’’) Prior to 2012, certain key Threadneedle employees were eligible for awards under the EIP based on a formula tied to Threadneedle’s financial performance.
Awards under the EIP were first made in April 2009; prior awards were made under the equity participation plan (‘‘EPP’’).
The EPP and EIP awards were fully amortized as of December 31, 2015.
During the years ended December 31, 2016, 2015 and 2014, cash settlements of EPP and EIP awards were $2 million, $28 million and $28 million, respectively.


| Common Stock | Issued | (in millions) | Balance, December 31, 2015 | Common Stock issued | Common Stock acquired | Stock-based compensation programs-1 | Balance, December 31, 2016 | Common Stock issued | Common Stock acquired | Stock-based compensation programs-1 | Balance, December 31, 2017 | Common Stock issued | Common Stock acquired | Stock-based compensation programs-1 | Balance, December 31, 2018 |


The levels of inputs used to measure fair value are as follows: Level 1 - unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company Level 2 - inputs that are observable in the marketplace other than those inputs classified as Level 1 Level 3 - inputs that are unobservable in the marketplace and significant to the valuation The Company’s financial assets and liabilities measured at fair value on a recurring basis include securities available for sale and derivative financial instruments.
Securities available for sale include US corporate bonds and equity securities.
Derivative financial instruments include interest rate swaps and foreign currency forwards and swaps.
Marketable Securities.
Where possible, the Company utilizes quoted prices in active markets to measure debt and equity securities; such items are classified as Level 1 in the hierarchy and include equity securities.
When quoted market prices for identical assets are unavailable, varying valuation techniques are used.
Common inputs in valuing these assets include, among others, benchmark yields, issuer spreads and recently reported trades.
Such assets are classified as Level 2 in the hierarchy and typically include corporate bonds.
Mutual funds are valued at the net asset value per share or unit multiplied by the number of shares or units held as of the measurement date.
Derivatives.
Derivative financial instruments are valued in the market using discounted cash flow techniques.
These techniques incorporate Level 1 and Level 2 inputs such as interest rates and foreign currency exchange rates.
These market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk.
Significant inputs to the derivative valuation for interest rate swaps and foreign currency forwards and swaps are observable in the active markets and are classified as Level 2 in the hierarchy.
Assets and liabilities measured at fair value on a recurring basis are as follows


Net periodic benefit cost of the Corporations plans for 2015, 2014 and 2013 included the following components.
Components of Net Periodic Benefit Cost


The descriptions and fair value methodologies for the U. S.  and International pension plan assets are as follows: Cash and Cash Equivalents The carrying amounts of cash and cash equivalents approximate fair value due to the short-term maturity.
Equity Securities Equity securities are valued at the closing market price reported on a U. S.  or international exchange where the security is actively traded and are therefore classified as Level 1 assets.
Equity Mutual and Pooled Funds Shares of mutual funds are valued at the NAV of the fund and are classified as Level 1 assets.
Units of pooled funds are valued at the per unit NAV determined by the fund manager based on the value of the underlying traded holdings and are classified as Level 2 assets.
Corporate and Government Bonds Corporate and government bonds are classified as Level 2 assets, as they are either valued at quoted market prices from observable pricing sources at the reporting date or valued based upon comparable securities with similar yields and credit ratings.
Other Pooled Funds Other pooled funds classified as Level 2 assets are valued at the NAV of the shares held at year end, which is based on the fair value of the underlying investments.
Securities and interests classified as Level 3 assets are carried at the estimated fair value.
The estimated fair value is based on the fair value of the underlying investment values, which includes estimated bids from brokers or other third-party vendor sources that utilize expected cash flow streams and other uncorroborated data including counterparty credit quality, default risk, discount rates, and the overall capital market liquidity.
Insurance Contracts Insurance contracts are classified as Level 3 assets, as they are carried at contract value, which approximates the estimated fair value.
The estimated fair value is based on the fair value of the underlying investment of the insurance company and discount rates that require inputs with limited observability.


| Vascular North America Interventional North America Anesthesia North America Surgical North America EMEA Asia OEM All other Total | (Dollars in thousands) | Balance as of December 31, 2015 | Goodwill | Accumulated impairment losses | 266,459 | Goodwill related to acquisitions | Translation adjustment | Balance as of December 31, 2016 | Goodwill related to acquisitions | Translation and other adjustments | Balance as of December 31, 2017 | Gross Carrying Amount | 2017 | (Dollars in thousands) | Customer relationships | In-process research and development | Intellectual property | Distribution rights | Trade names | Non-compete agreements | $2,964,632 |


Minimum pension liability adjustment


| Percent Change | Year Ended December 31, | (In millions except percentages and per share data) | NET OPERATING REVENUES | Cost of goods sold | GROSS PROFIT | GROSS PROFIT MARGIN | Selling, general and administrative expenses | Other operating charges | OPERATING INCOME | OPERATING MARGIN | Interest income | Interest expense | Equity income (loss) — net | Other income (loss) — net | INCOME BEFORE INCOME TAXES | Income taxes | Effective tax rate | CONSOLIDATED NET INCOME | Less: Net income attributable to noncontrolling interests | NET INCOME ATTRIBUTABLE TO SHAREOWNERS OFTHE COCA-COLA COMPANY | BASIC NET INCOME PER SHARE1 | DILUTED NET INCOME PER SHARE1 | Year Ended December 31, | Balance at beginning of year | Net charges to costs and expenses1 | Write-offs | Other2 | Balance at end of year |


| 2017 2016 2015 | (Dollars in thousands) | Current: | Federal | State | Foreign | Deferred: | Federal | State | Foreign | $129,648 |


| As of December 31, 2008 | DISH Network Awards | Restricted | Stock | Stock Incentive Awards Outstanding | Held by DISH Network employees | Held by EchoStar employees | Total |


The retail electric price variance is primarily due to an increase in the purchased power and capacity acquisition cost recovery rider, as approved by the City Council, effective with the first billing cycle of March 2016, primarily related to the purchase of Power Block 1 of the Union Power Station.
See Note 14 to the financial statements for discussion of the Union Power Station purchase.
The net gas revenue variance is primarily due to the effect of less favorable weather on residential and commercial sales.
The volume/weather variance is primarily due to a decrease of 112 GWh, or 2%, in billed electricity usage, partially offset by the effect of favorable weather on commercial sales and a 2% increase in the average number of electric customers


| Fair Value Measurements at December 31, 2011 Using: | Description | Fixed maturities available for sale: | Bonds: | U.S. Government direct, guaranteed, and government-sponsored enterprises | States, municipalities, and political subdivisions | Foreign governments | Corporates | Collateralized debt obligations | Other asset-backed securities | Redeemable preferred stocks | Total fixed maturities | Equity securities | Total fixed maturities and equity securities | Percentage of total |


| 2012 2011 2010 | Ameren(a) | Ameren Missouri | Ameren Illinois | Merchant Generation |


| (in millions) | For the years ending December 31, | 2018 | 2019 | 2020 | 2021 | 2022 |


Premier Banking and Investments Premier Banking and Investments includes Banc of America Investments, our full-service retail brokerage business and our Premier Banking channel.
PB&I brings personalized banking and investment expertise through priority service with client-dedicated teams.
PB&I provides a high-touch client experience through a network of approximately 4,400 client advisors to our affluent customers with a personal wealth profile that includes investable assets plus a mortgage that exceeds $500,000 or at least $100,000 of investable assets.
Net Income increased $138 million, or 17 percent, primarily due to an increase in Net Interest Income.
The increase in Net Interest Income of $268 million, or 15 percent, was primarily driven by higher deposit spreads partially offset by lower average deposit balances.
Deposit spreads increased 40 bps to 2.34 percent.
Net Interest Income also benefited from higher Average Loans and Leases, mainly residential mortgages and home equity.
Noninterest Income increased $60 million, or seven percent, primarily driven by higher Investment and Brokerage Services.
Noninterest Expense increased $95 million, or eight percent, primarily due to increases in Personnel expense driven by the PB&I expansion of Client Managers and Financial Advisors and higher performance-based compensation.


| Restricted Stock Units Number of  RSUs Weighted  Average  Grant Date  Fair Value | RSUs at December 31, 2008 | Granted | Vested | Forfeited | RSUs at December 31, 2009 |


| Severance | In millions of dollars | Total Citigroup (pretax) | Original restructuring charge | Utilization | Balance at December 31, 2008 | Additional charge | Foreign exchange | Utilization | Changes in estimates | Balance at December 31, 2009 | In millions of dollars | Beginning balance | Purchases-1 | Disposals/payments received | Accretion | Builds (reductions) to the allowance | Increase to expected cash flows | FX/Other | Balance, December 31, 2009-2 |


| December 31 (dollars in millions) 2004 2003 | Buy | Euro | Canadian dollar | British pound | Hungarian forint | Mexican peso | Total | Years ended December 31 (dollars in millions) | Balance at beginning of year | Expense | Claims settled | Balance at end of year |


| December 31 | 2011 | (Dollars in millions) | Allowance for loan and lease losses | Residential mortgage | Home equity | Discontinued real estate | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer | Other consumer | Total consumer | U.S. commercial-1 | Commercial real estate | Commercial lease financing | Non-U.S. commercial | Total commercial-2 | Allowance for loan and lease losses | Reserve for unfunded lending commitments | Allowance for credit losses-3 |


| As of and for the Year Ended December 31, | (dollars in millions) | Net interest income | Noninterest income | Total revenue | Noninterest expense | Profit before provision for credit losses | Provision for credit losses | Income before income tax expense | Income tax expense | Net income | Loans and leases and loans held for sale (year-end)(1) | Average Balances: | Total assets | Loans and leases and loans held for sale-1 | Deposits and deposits held for sale | Interest-earning assets | Key Metrics: | Net interest margin | Efficiency ratio-2 | Average loans to average deposits ratio | Return on average total tangible assets-2 | Return on average tangible common equity-2 (3) |


Rent charged to operating expense was $249 million for 2015, $309 million for 2014 and $324 million for 2013.
Operating leases include office space held in excess of current requirements.
Rent expense relating to space held for growth is included in Occupancy.
 The firm records a liability, based on the fair value of the remaining lease rentals reduced by any potential or existing sublease rentals, for leases where the firm has ceased using the space and management has concluded that the firm will not derive any future economic benefits.
Costs to terminate a lease before the end of its term are recognized and measured at fair value on termination.


| Year ended December 31,(inmillions) 2007 2006 | Balance at beginning of period after valuation allowance | Cumulative effect of change in accounting principle | Fair value at beginning of period | Originations of MSRs | Purchase of MSRs | Total additions | Change in valuation due to inputs and assumptions(a) | Other changes in fair value(b) | Total change in fair value | Fair value at December 31 | Change in unrealized (losses) gains included in income related to MSRs held at December 31 |


| 2018 2017 2016 | Revenue from operations | Operating expenses: | Salaries, wages and benefits | Operating supplies and expenses | General supplies and expenses | Operating taxes and licenses | Insurance and claims | Communication and utilities | Depreciation and amortization | Purchased transportation | Building and office equipment rents | Miscellaneous expenses, net | Total operating expenses | Operating income | Interest (income) expense, net | Other expense (income), net | Income before income taxes | Provision for income taxes | Net income |


7.
Reinsurance The Company reinsures a portion of the insurance risks associated with its traditional life, DI and LTC insurance products through reinsurance agreements with unaffiliated reinsurance companies.
Reinsurance contracts do not relieve the Company from its primary obligation to policyholders.
The Company generally reinsures 90% of the death benefit liability for new term life insurance policies beginning in 2001 and new individual fixed and variable universal life insurance policies beginning in 2002.
Policies issued prior to these dates are not subject to these same reinsurance levels.
However, for IUL policies issued after September 1, 2013 and VUL policies issued after January 1, 2014, the Company generally reinsures 50% of the death benefit liability.
Similarly, the Company reinsures 50% of the death benefit and morbidity liabilities related to its universal life product with long term care benefits.
The maximum amount of life insurance risk the Company will retain is $10 million on a single life and $10 million on any flexible premium survivorship life policy; however, reinsurance agreements are in place such that retaining more than $1.5 million of insurance risk on a single life or a flexible premium survivorship life policy is very unusual.
Risk on fixed and variable universal life policies is reinsured on a yearly renewable term basis.
Risk on most term life policies starting in 2001 is reinsured on a coinsurance basis, a type of reinsurance in which the reinsurer participates proportionally in all material risks and premiums associated with a policy.
For existing LTC policies, the Company has continued ceding 50% of the risk on a coinsurance basis to subsidiaries of Genworth Financial, Inc.  (
‘‘Genworth’’) and retained the remaining risk.
For RiverSource Life of NY, this reinsurance arrangement applies for 1996 and later issues only.
Generally, the Company retains at most $5,000 per month of risk per life on DI policies sold on policy forms introduced in most states in 2007 and reinsures the remainder of the risk on a coinsurance basis with unaffiliated reinsurance companies.
The Company retains all risk for new claims on DI contracts sold on other policy forms.
The Company also retains all risk on accidental death benefit claims and substantially all risk associated with waiver of premium provisions.
At December 31, 2015 and 2014, traditional life and UL insurance in force aggregated $196.3 billion and $195.5 billion, respectively, of which $144.2 billion and $143.4 billion were reinsured at the respective year ends.
Life insurance in force is reported on a statutory basis.
The effect of reinsurance on premiums for the Company’s traditional long-duration contracts was as follows:


| December 31, | 2009 | (In millions) | Other Assets: | Premium tax offset for future undiscounted assessments | Premium tax offsets currently available for paid assessments | Receivable for reimbursement of paid assessments -1 | $67 | Other Liabilities: | Insolvency assessments |


| Amount Ratios | December 31Dollars in millions | Risk-based capital | Tier 1 | PNC | PNC Bank, N.A. | Total | PNC | PNC Bank, N.A. | Leverage | PNC | PNC Bank, N.A. |


| Year Ended December 31, 2016 Year Ended December 31, 2015 | (in millions) | Operating income | Interest income | Net income | Net income as a percentage of service revenue | Adjusted EBITDA | Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues) |


general market conditions affecting trust asset performance, future discount rates based on average yields of high quality corporate bonds and our decisions regarding certain elective provisions of the PPA.
We currently project that we will make total U. S.  and foreign benefit plan contributions in 2014 of approximately $57 million.
Actual 2014 contributions could be different from our current projections, as influenced by our decision to undertake discretionary funding of our benefit trusts versus other competing investment priorities, future changes in government requirements, trust asset performance, renewals of union contracts, or higher-than-expected health care claims cost experience.
We measure cash flow as net cash provided by operating activities reduced by expenditures for property additions.
We use this non-GAAP financial measure of cash flow to focus management and investors on the amount of cash available for debt repayment, dividend distributions, acquisition opportunities, and share repurchases.
Our cash flow metric is reconciled to the most comparable GAAP measure, as follows:


| December 31, | 2006 | Property, plant and equipment basis differences | Postretirement benefits other than pensions and postemployment benefits | Investment and other asset basis differences | Other accrued items | Net operating and capital losses | Tax credits | Undistributed earnings of subsidiaries | All other items—net | 2,414 | Valuation allowance | $1,898 |


We Have Experienced Disputes With Customers and SuppliersSuch disputes may lead to increased tensions, damaged relationships or litigation which may result in the loss of a key customer or supplier.
We have experienced certain conflicts or disputes with some of our customers and service providers.
Most of these disputes relate to the interpretation of terms in our contracts.
While we seek to resolve such conflicts amicably and have generally resolved customer and supplier disputes on commercially reasonable terms, such disputes may lead to increased tensions and damaged relationships between ourselves and these entities, some of whom are key customers or suppliers of ours.
In addition, if we are unable to resolve these differences amicably, we may be forced to litigate these disputes in order to enforce or defend our rights.
There can be no assurances as to the outcome of these disputes.
Damaged relationships or litigation with our key customers or suppliers may lead to decreased revenues (including as a result of losing a customer) or increased costs, which could have a material adverse effect on us.
Our Operations in Australia Expose Us to Changes in Foreign Currency Exchange RatesWe may suffer losses as a result of changes in such currency exchange rates.
We conduct business in the U. S.  and Australia, which exposes us to fluctuations in foreign currency exchange rates.
For the year ended December 31, 2004, approximately 7.5% of our consolidated revenues originated outside the U. S. , all of which were denominated in currencies other than U. S.  dollars, principally Australian dollars.
We have not historically engaged in significant hedging activities relating to our non-U.
S.  dollar operations, and we may suffer future losses as a result of changes in currency exchange rates.


| Approximate Number of Vehicles Approximate Average Age | Residential | Small-container Commercial | Large-container Industrial | Total |