| (dollar amounts in millions) At December 31, 2017 | One Yearor Less | Commercial and industrial | Commercial real estate—construction | Commercial real estate—commercial | Total | Variable-interest rates | Fixed-interest rates | Total | Percent of total | Years Ended(In Millions) | Net cash provided by operating activities | Net cash used for investing activities | Net cash provided by (used for) financing activities | Net increase (decrease) in cash and cash equivalents |


| Non-Accrual Loans, Excluding Loans Held for Sale Year Ended December 31, 2011 | Commercial | (In millions) | Balance at beginning of year | Additions | Net payments/other activity | Return to accrual | Charge-offs on non-accrual loans-2 | Transfers to held for sale-3 | Transfers to foreclosed properties | Sales | Balance at end of year |


Shareowner Return Performance Graph The following performance graph and related information shall not be deemed soliciting material or to be filed with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates such information by reference into such filing.
The following graph shows a five year comparison of cumulative total shareowners returns for our class B common stock, the Standard & Poors 500 Index, and the Dow Jones Transportation Average.
The comparison of the total cumulative return on investment, which is the change in the quarterly stock price plus reinvested dividends for each of the quarterly periods, assumes that $100 was invested on December 31, 2007 in the Standard & Poors 500 Index, the Dow Jones Transportation Average, and our class B common stock.


ABIOMED, INC.  AND SUBSIDIARIES Notes to Consolidated Financial Statements(Continued) Note 8.
Stock Award Plans and Stock Based Compensation Stock Option Plans The Company grants stock options and restricted stock awards to employees and others.
Virtually all outstanding stock options of the Company as of March 31, 2011 were granted with an exercise price equal to the fair market value on the date of grant.
For all options and restricted stock granted below fair market value, compensation expense is recognized ratably over the vesting period.
Outstanding stock options, if not exercised, expire 10 years from the date of grant.
The Companys 2008 Stock Incentive Plan (the Plan) authorizes the grant of a variety of equity awards to the Companys officers, directors, employees, consultants and advisers, including awards of unrestricted and restricted stock, incentive and nonqualified stock options to purchase shares of common stock, performance share awards and stock appreciation rights.
The Plan provides that options may only be granted at the current market value on the date of grant.
The maximum number of shares of the Companys common stock issuable under the Plan is equal to 5,508,688 shares, which included 308,688 shares that remained available for future awards as of August 12, 2008 under the Companys 1989 Non-Qualified Stock Option Plan for Non-Employee Directors, the 1998 Equity Incentive Plan and 2000 Stock Incentive Plan.
Each share of stock issued pursuant to a stock option or stock appreciation right counts as one share against the maximum number of shares issuable under the Plan, while each share of stock issued pursuant to any other type of award counts as 1.58 shares against the maximum number of shares issuable under the Plan for grants made on or after August 11, 2010 (and as 1.5 shares for grants made prior to that date).
At March 31, 2011, a total of 1,516,500 shares were available for future issuance under the Plan.
Total stock-based compensation recognized in the Companys consolidated statements of operations for the fiscal years ended March 31, 2011, 2010, and 2009, were as follows:


Financial disclosures required by SFAS 107 SFAS 107 requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate their fair values.
Many but not all of the financial instruments held by the Firm are recorded at fair value on the Consolidated balance sheets.
Financial instruments within the scope of SFAS 107 that are not carried at fair value on the Consolidated balance sheets are discussed below.
Additionally, certain financial instruments and all nonfinancial instruments are excluded from the scope of SFAS 107.
Accordingly, the fair value disclosures required by SFAS 107 provide only a partial estimate of the fair value of JPMorgan Chase.
For example, the Firm has developed long-term relationships with its customers through its deposit base and credit card accounts, commonly referred to as core deposit intangibles and credit card relationships.
In the opinion of management, these items, in the aggregate, add significant value to JPMorgan Chase, but their fair value is not disclosed in this Note.
Financial instruments for which fair value approximates carrying value Certain financial instruments that are not carried at fair value on the Consolidated balance sheets are carried at amounts that approximate fair value due to their short-term nature and generally negligible credit risk.
These instruments include cash and due from banks, deposits with banks, federal funds sold, securities purchased under resale agreements with short-dated maturities, securities borrowed, short-term receivables and accrued interest receivable, commercial paper, federal funds purchased, securities sold under repurchase agreements with short-dated maturities, other borrowed funds, accounts payable and accrued liabilities.
In addition, SFAS 107 requires that the fair value for deposit liabilities with no stated maturity (i. e. , demand, savings and certain money market deposits) be equal to their carrying value.
SFAS 107 does not allow for the recognition of the inherent funding value of these instruments.
follows and the judgments made in evaluating the risk factors related to its loss estimates, management believes that its current estimate of the allowance for credit losses is appropriate.
Fair value of financial instruments, MSRs and commodities inventory JPMorgan Chase carries a portion of its assets and liabilities at fair value.
The majority of such assets and liabilities are measured at fair value on a recurring basis.
Certain assets and liabilities are measured at fair value on a nonrecurring basis, including certain mortgage, home equity and other loans, where the carrying value is based on the fair value of the underlying collateral.


Closed Block In connection with the 1998 MIHC formation, Principal Life formed a Closed Block to provide reasonable assurance to policyholders included therein that, after the formation of the MIHC, assets would be available to maintain dividends in aggregate in accordance with the 1997 policy dividend scales, if the experience underlying such scales continued.
Assets of Principal Life were allocated to the Closed Block in an amount that produces cash flows which, together with anticipated revenue from policies and contracts included in the Closed Block, were expected to be sufficient to support the Closed Block policies, including, but not limited to, provisions for payment of claims, certain expenses, charges and taxes, and to provide for continuation of policy and contract dividends in aggregate in accordance with the 1997 dividend scales, if the experience underlying such scales continues, and to allow for appropriate adjustments in such scales, if such experience changes.
Due to adjustable life policies being included in the Closed Block, the Closed Block is charged with amounts necessary to properly fund for certain adjustments, such as face amount and premium increases, that are made to these policies after the Closed Block inception date.
These amounts are referred to as Funding Adjustment Charges and are treated as capital transfers from the Closed Block.
Assets allocated to the Closed Block inure solely to the benefit of the holders of policies included in the Closed Block.
Closed Block assets and liabilities are carried on the same basis as other similar assets and liabilities.
Principal Life will continue to pay guaranteed benefits under all policies, including the policies within the Closed Block, in accordance with their terms.
If the assets allocated to the Closed Block, the investment cash flows from those assets and the revenues from the policies included in the Closed Block, including investment income thereon, prove to be insufficient to pay the benefits guaranteed under the policies included in the Closed Block, Principal Life will be required to make such payments from their general funds.
No additional policies were added to the Closed Block, nor was the Closed Block affected in any other way, as a result of the demutualization.
A policyholder dividend obligation (‘‘PDO’’) is required to be established for earnings in the Closed Block that are not available to stockholders.
A model of the Closed Block was established to produce the pattern of expected earnings in the Closed Block, adjusted to eliminate the impact of related amounts in AOCI.
If actual cumulative earnings of the Closed Block are greater than the expected cumulative earnings of the Closed Block, only the expected cumulative earnings will be recognized in income with the excess recorded as a PDO.
This PDO represents undistributed accumulated earnings that will be paid to Closed Block policyholders as additional policyholder dividends unless offset by future performance of the Closed Block that is less favorable than originally expected.
If actual cumulative performance is less favorable than expected, only actual earnings will be recognized in income.
At December 31, 2010 and 2009, cumulative actual earnings have been less than cumulative expected earnings.
Additionally,


| (Dollars in millions) Ending Balance Sheet December 31, 2006 Adoption Net Gain/(Loss) Opening Balance Sheet January 1, 2007 | Impact of adopting SFAS 157 | Net derivative assets and liabilities-1 | Impact of electing the fair value option under SFAS 159 | Loans and leases-2 | Accrued expenses and other liabilities-3 | Other assets-4 | Available-for-sale debt securities-5 | Federal funds sold and securities purchased under agreements to resell-6 | Interest-bearing deposit liabilities in domestic offices-7 | Cumulative-effect adjustment, pre-tax | Tax impact | Cumulative-effect adjustment, net-of-tax, decrease to retained earnings |


| Total  (In $ millions) | 2007 | 2008 | 2009 | 2010 | 2011 | Thereafter-1 | Total |


| Year Ended December 31 2008 2009 2010 | Stock options | Restricted stock | Total stock-based compensation expense, net of tax* |


| 2005 2006-2007 2008-2009 after 2009 Total | (In Millions) | Planned construction and | capital investment -1 | Long-term debt | Capital lease payments | Operating leases | Purchase obligations -2 | Nuclear fuel lease obligations -3 |


28.
Contingencies and Commitments Marathon is the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment.
Certain of these matters are discussed below.
The ultimate resolution of these contingencies could, individually or in the aggregate, be material to Marathon’s consolidated financial statements.
However, management believes that Marathon will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably.
Environmental matters – Marathon is subject to federal, state, local and foreign laws and regulations relating to the environment.
These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites.
Penalties may be imposed for noncompliance.
At December 31, 2004 and 2003, accrued liabilities for remediation totaled $110 million and $117 million.
It is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties that may be imposed.
Receivables for recoverable costs from certain states, under programs to assist companies in cleanup efforts related to underground storage tanks at retail marketing outlets, were $65 million and $86 million at December 31, 2004 and 2003, respectively
In July, 2002, Marathon received a Notice of Enforcement from the State of Texas for alleged excess air emissions from its Yates Gas Plant and production operations on its Kloh lease.
A settlement of this matter was finalized in 2004, with Marathon and its co-owners paying a civil penalty of $74,000 and the donation of land as a Supplemental Environmental Project in lieu of a further penalty of $74,000.
Marathon is owner of a 38% interest in the facilities.
In May, 2003, Marathon received a Consolidated Compliance Order & Notice or Potential Penalty from the State of Louisiana for alleged various air permit regulatory violations.
This matter was settled for a civil penalty of $148,628 and awaits formal closure with the State.
In August of 2004, the West Virginia Department of Environmental Protection (‘‘WVDEP’’) submitted a draft consent order to MAP regarding MAP’s handling of alleged hazardous waste generated from tank cleanings in the State of West Virginia.
The proposed order seeks a civil penalty of $337,900.
MAP has met with the WVDEP and discussions are ongoing in an attempt to resolve this matter.
Item 4.
Submission of Matters to a Vote of Security Holders Not applicable.
PART II Item 5.
Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market on which the Company’s common stock is traded is the New York Stock Exchange.
The Company’s common stock is also traded on the Chicago Stock Exchange and the Pacific Exchange.
Information concerning the high and low sales prices for the common stock as reported in the consolidated transaction reporting system and the frequency and amount of dividends paid during the last two years is set forth in ‘‘Selected Quarterly Financial Data (Unaudited)’’ on page F-41.
As of January 31, 2005, there were 58,340 registered holders of Marathon common stock.
The Board of Directors intends to declare and pay dividends on Marathon common stock based on the financial condition and results of operations of Marathon Oil Corporation, although it has no obligation under Delaware law or the Restated Certificate of Incorporation to do so.
In determining its dividend policy with respect to Marathon common stock, the Board will rely on the financial statements of Marathon.
Dividends on Marathon common stock are limited to legally available funds of Marathon.


| Regulator AllowedReturn on Equity Percent ofCommon Equity Rate Base(in billions) Portion of Ameren's 2015 Operating Revenues(a) | Ameren Missouri | Electric service(b)(c) | Natural gas delivery service(d) | Ameren Illinois | Electric distribution delivery service(e) | Natural gas delivery service(f) | Electric transmission delivery service(g) | ATXI | Electric transmission delivery service(g) | Ameren Missouri | Ameren Illinois | Ameren Services | Ameren |


| ($ in millions) 2018 2017 | Receivables | Trade - net-1 | Equity affiliates | Other - net | Total | Inventories-2 | Finished products | Work in process | Raw materials | Supplies | Total | Accounts payable and accrued liabilities | Trade | Accrued payroll | Customer rebates | Other postretirement and pension benefits | Income taxes | Other | Total | December 31, 2018 | ($ in millions) | Asset Category | Equity securities: | U.S. | Large cap | Small cap | Non-U.S. | Developed and emerging markets-2 | Debt securities: | Cash and cash equivalents | Corporate-3 | U.S.-4 | Developed and emerging markets-2 | Diversified-5 | Government | U.S.-4 | Developed markets | Other-6 | Real estate, hedge funds, and other | Total assets in the fair value hierarchy | Common-collective trusts-7 | Total Investments | ($ in millions) | January 1, 2017 | Realized gains | Unrealized losses | Transfers (out)/in, net | Foreign currency losses | December 31, 2017 | Realized gains (losses) | Unrealized losses | Transfers (out)/in, net | Foreign currency loss | December 31, 2018 |


| 2008 2007 | ($ in millions) | Total risk-based capital (to risk-weighted assets): | Fifth Third Bancorp (Consolidated) | Fifth Third Bank (Ohio) | Fifth Third Bank (Michigan) | Fifth Third Bank, N.A. | Tier I capital (to risk-weighted assets): | Fifth Third Bancorp (Consolidated) | Fifth Third Bank (Ohio) | Fifth Third Bank (Michigan) | Fifth Third Bank, N.A. | Tier I leverage (to average assets): | Fifth Third Bancorp (Consolidated) | Fifth Third Bank (Ohio) | Fifth Third Bank (Michigan) | Fifth Third Bank, N.A. |


Investment Commitments.
At December 31, 2017, the Company had $298 million of various capital commitments to fund sponsored investment funds, including consolidated VIEs.
These funds include private equity funds, real assets funds, and opportunistic funds.
This amount excludes additional commitments made by consolidated funds of funds to underlying third-party funds as third-party noncontrolling interest holders have the legal obligation to fund the respective commitments of such funds of funds.
Generally, the timing of the funding of these commitments is unknown and the commitments are callable on demand at any time prior to the expiration of the commitment.
These unfunded commitments are not recorded on the consolidated statements of financial condition.
These commitments do not include potential future commitments approved by the Company that are not yet legally binding.
The Company intends to make additional capital commitments from time to time to fund additional investment products for, and with, its clients.


| Beginning of year 546 | Revisions of previous estimates | Extensions, discoveries, and other additions | Dispositions | Transfers to proved developed | End of year |


Global Reinsurance reported an increase in net premiums written in 2010, compared with 2009, primarily due to a significant new workers compensation treaty recorded during 2010 in our U. S.  operation, partially offset by generally competitive conditions across most of Global Reinsurances product lines and regions of operations.
Net premiums written increased in 2009, compared with 2008, primarily due to P&C production growth in the U. S. , Canada, and Bermuda.


| Year Ended December 31, | 2014 | Beginning balance, unrecognized tax benefits | Gross increases—tax positions in prior period | Gross decreases—tax positions in prior period | Gross increases—current-period tax positions | Decreases relating to settlements | Reductions as a result of lapse of statute of limitations | Foreign exchange movement | Ending balance, unrecognized tax benefits |


Defined Benefit Retirement Plans and Other Retiree Benefits We offer defined benefit retirement pension plans to certain employees.
These benefits relate primarily to local plans outside the U. S.  and, to a lesser extent, plans assumed in previous acquisitions covering U. S.  employees.
We also provide certain other retiree benefits, primarily health care and life insurance, for the majority of our U. S.  employees who become eligible for these benefits when they meet minimum age and service requirements.
Generally, the health care plans require cost sharing with retirees and pay a stated percentage of expenses, reduced by deductibles and other coverages.
These benefits are primarily funded by ESOP Series B shares and certain other assets contributed by the Company.
Obligation and Funded Status.
The following provides a reconciliation of benefit obligations, plan assets and funded status of these defined benefit plans:


| 2016 2017 | Net sales | Net earnings from continuing operations common stockholders | Diluted earnings per share from continuing operations |


| December 31 2017 December 31 2016 Change | Dollars in millions | Assets | Interest-earning deposits with banks | Loans held for sale | Investment securities | Loans | Allowance for loan and lease losses | Mortgage servicing rights | Goodwill | Other, net | Total assets | Liabilities | Deposits | Borrowed funds | Other | Total liabilities | Equity | Total shareholders’ equity | Noncontrolling interests | Total equity | Total liabilities and equity |


| High Low Dividends | 2007: | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | 2006: | Fourth Quarter | Third Quarter | Second Quarter | First Quarter |


| Comparable sales impact 0.5% | Non-comparable sales-1 | Total revenue increase |


| 2008 2007 2006 | Interest income | Other income (expense), net | Total other income and expense |


We classify within traditional real estate our investment in income-producing real estate, which is comprised primarily of wholly-owned real estate and, to a much lesser extent, joint ventures with interests in single property income-producing real estate.
The estimated fair value of the traditional and held-for-sale real estate investment portfolios was $13.3 billion and $12.5 billion at December 31, 2014 and 2013, respectively.
We classify within real estate joint ventures and funds, our investments in joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the operation of income-producing properties, as well as our investments in real estate private equity funds.
From time to time, we transfer investments from these joint ventures to traditional real estate after the completed property commences operations and, if we intend to retain an interest in the property.
In connection with our investment management business, in the fourth quarter of 2013, we contributed real estate investments with an estimated fair value of $1.4 billion to the MetLife Core Property Fund, our newly formed open ended core real estate fund, in return for the issuance of ownership interests in that fund.
As part of the initial closing on December 31, 2013, we redeemed 76% of our interest in this fund as new third party investors were admitted.
The MetLife Core Property Fund was consolidated as of December 31, 2013.
However, as a result of our quarterly reassessment in the first quarter of 2014, we no longer consolidate the MetLife Core Property Fund, effective March 31, 2014.
See Note 8 of the Notes to Consolidated Financial Statements for further information
We enter into market standard purchased and written credit default swap contracts.
Payout under such contracts is triggered by certain credit events experienced by the referenced entities.
For credit default swaps covering North American corporate issuers, credit events typically include bankruptcy and failure to pay on borrowed money.
For European corporate issuers, credit events typically also include involuntary restructuring.
With respect to credit default contracts on Western European sovereign debt, credit events typically include failure to pay debt obligations, repudiation, moratorium, or involuntary restructuring.
In each case, payout on a credit default swap is triggered only after the Credit Derivatives Determinations Committee of the International Swaps and Derivatives Association determines that a credit event has occurred.
Table of Contents 136 Current Environment As a global insurance company, we continue to be impacted by the changing global financial and economic environment, as well as the monetary policy of central banks around the world.
See  Industry Trends  Financial and Economic Environment.
 Measures taken by central banks, including with respect to the level of interest rates, may have an impact on the pricing levels of risk-bearing investments and may adversely impact our business operations, investment portfolio and derivatives.
The current environment continues to impact our net investment income, net investment gains (losses), net derivative gains (losses), level of unrealized gains (losses) within the various asset classes in our investment portfolio, and our level of investment in lower yielding cash equivalents, short-term investments and government securities.
See Risk Factors  Economic Environment and Capital Markets-Related Risks  We Are Exposed to Significant Global Financial and Capital Markets Risks Which May Adversely Affect Our Results of Operations, Financial Condition and Liquidity, and May Cause Our Net Investment Income to Vary from Period to Period.
 European Investments We maintain general account investments in Europe to support our insurance operations and related policyholder liabilities in these countries and certain of our non-European operations invest in Europe for diversification.
In Europe, we have proactively mitigated risk in both direct and indirect exposures by investing in a diversified portfolio of high quality investments with a focus on the higher-rated countries, including the U. K. , Germany, France, the Netherlands,


| Years Ended December 31, 2012/2011 2011/2010 | (Dollars in millions) | Gross written premiums | Net written premiums | Premiums earned | Incurred losses and LAE | Commission and brokerage | Other underwriting expenses | Underwriting gain (loss) | Point Chg | Loss ratio | Commission and brokerage ratio | Other underwriting expense ratio | Combined ratio | (Some amounts may not reconcile due to rounding.) |


REPUBLIC SERVICES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) We determine the discount rate used in the measurement of our obligations based on a model that matches the timing and amount of expected benefit payments to maturities of high quality bonds priced as of the Plan measurement date.
When that timing does not correspond to a published high-quality bond rate, our model uses an expected yield curve to determine an appropriate current discount rate.
The yields on the bonds are used to derive a discount rate for the liability.
The term of our obligation, based on the expected retirement dates of our workforce, is approximately seven years.
In developing our expected rate of return assumption, we have evaluated the actual historical performance and long-term return projections of the Plan assets, which give consideration to the asset mix and the anticipated timing of the Plan outflows.
We employ a total return investment approach whereby a mix of equity and fixed income investments are used to maximize the long-term return of Plan assets for what we consider a prudent level of risk.
The intent of this strategy is to minimize Plan expenses by outperforming Plan liabilities over the long run.
Risk tolerance is established through careful consideration of Plan liabilities, Plan funded status and our financial condition.
The investment portfolio contains a diversified blend of equity and fixed income investments.
Furthermore, equity investments are diversified across U. S.  and non-U.
S.  stocks as well as growth, value, and small and large capitalizations.
Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments.
Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset and liability studies, and quarterly investment portfolio reviews.
The following table summarizes our target asset allocation as of December 31, 2018 and the actual asset allocation as of December 31, 2018 and 2017 for our Plan:


in advisory fees was driven by the combined impact of a greater share of fees for completed transactions, and growth in industry-wide fees.
The increase in equity underwriting fees was driven by higher industry-wide issuance.
The decrease in debt underwriting fees was primarily related to lower bond underwriting fees compared with the prior year, and lower loan syndication fees on lower industry-wide fees.
Principal transactions revenue increased as the prior year included a $1.5 billion loss related to the implementation of the funding valuation adjustment (FVA) framework for over-the-counter (OTC) derivatives and structured notes.
Private equity gains increased as a result of higher net gains on sales.
These increases were partially offset by lower fixed income markets revenue in CIB, primarily driven by credit-related and rates products, as well as the impact of business simplification initiatives.
Lending- and deposit-related fees decreased compared with the prior year, reflecting the impact of business simplification initiatives and lower trade finance revenue in CIB.
Asset management, administration and commissions revenue increased compared with the prior year, reflecting higher asset management fees driven by net client inflows and higher market levels in AM and CCB.
The increase was offset partially by lower commissions and other fee revenue in CCB as a result of the exit of a non-core product in 2013.
Securities gains decreased compared with the prior year, reflecting lower repositioning activity related to the Firms investment securities portfolio.
Mortgage fees and related income decreased compared with the prior year, predominantly due to lower net production revenue driven by lower volumes due to higher mortgage interest rates, and tighter margins.
The decline in net production revenue was partially offset by a lower loss on the risk management of mortgage servicing rights (MSRs).
Card income was relatively flat compared with the prior year, but included higher net interchange income due to growth in credit and debit card sales volume, offset by higher amortization of new account origination costs.
Other income decreased from the prior year, predominantly from the absence of two significant items recorded in Corporate in 2013: gains of $1.3 billion and $493 million from sales of Visa shares and One Chase Manhattan Plaza, respectively.
Lower valuations of seed capital investments in AM and losses related to the exit of non-core portfolios in Card also contributed to the decrease.
These items were partially offset by higher auto lease income as a result of growth in auto lease volume, and a benefit from a tax settlement.
Net interest income increased slightly from the prior year, predominantly reflecting higher yields on investment securities, the impact of lower interest expense from lower rates, and higher average loan balances.
The increase was partially offset by lower yields on loans due to the run-off of higher-yielding loans and new originations of lower-yielding loans, and lower average interest-earning trading asset balances.
The Firms average interest-earning assets were $2.0 trillion, and the net interest yield on these assets, on a FTE basis, was 2.18%, a decrease of 5 basis points from the prior year.
Provision for credit losses


Investments carried at fair value through net income.
The Company has certain investments in its general account portfolios that are carried at fair value with changes in fair value reported in “Other income (loss).
” Examples include the Company’s investments in equity securities and fixed maturities designated as trading.
Consistent with the exclusion of realized investment gains (losses) with respect to other investments managed on a consistent basis, the net gains or losses on these investments are excluded from adjusted operating income.
Foreign Currency Exchange Movements.
The Company has certain assets and liabilities for which, under U. S.  GAAP, the changes in value, including those associated with changes in foreign currency exchange rates during the period, are recorded in “Other income (loss).
” To the extent the foreign currency exposure on these assets and liabilities is economically hedged or considered part of the Company’s capital funding strategies for its international subsidiaries, the change in value included in “Other income (loss)” is excluded from adjusted operating income.
The insurance liabilities are supported by investments denominated in corresponding currencies, including a significant portion designated as available-for-sale.
While these non-yen denominated assets and liabilities are economically hedged, unrealized gains (losses) on available-for-sale investments, including those arising from foreign currency exchange rate movements, are recorded in AOCI under U. S.  GAAP, while the non-yen denominated liabilities are remeasured for foreign currency exchange rate movements, with the related change in value recorded in earnings within “Other income (loss).
” Due to this non-economic volatility that has been reflected in U. S.  GAAP earnings, the change in value recorded within “Other income (loss)” is excluded from adjusted operating income.
Other Activities.
The Company excludes certain other items from adjusted operating income that are consistent with similar adjustments described above.
Charges related to realized investment gains (losses), net Charges that relate to realized investment gains (losses) are also excluded from adjusted operating income, and include the following: ?
The portion of the amortization of DAC, VOBA, unearned revenue reserves and DSI for certain products that is related to net realized investment gains (losses).  ?
Policyholder dividends and interest credited to policyholders’ account balances that relate to certain life policies that pass back certain realized investment gains (losses) to the policyholder, and reserves for future policy benefits for certain policies that are affected by net realized investment gains (losses).  ?
Market value adjustments paid or received upon a contractholder’s surrender of certain of the Company’s annuity products as these amounts mitigate the net realized investment gains or losses incurred upon the disposition of the underlying invested assets.
U. S.  Workplace Solutions Division Retirement Operating Results The following table sets forth the Retirement segment’s operating results for the periods indicated.


Other Significant Accounting Policies The following table includes a reference to additional significant accounting policies that are described in other notes to the financial statements, including the note number:


| Period Total Number of Shares Purchased [a] Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly AnnouncedPlan or Program [b] Maximum Number of Shares Remaining Under the Plan or Program [b] | Oct. 1 through Oct. 31 | Nov. 1 through Nov. 30 | Dec. 1 through Dec. 31 | Total |


| Year Ended December 31, | 2014 | (In $ millions, except percentages) | North America | Europe and Africa | Asia-Pacific | South America | Total-1 |


| In millions of dollars at December 31, 2018 Level 1 Level 2 Level 3 Grossinventory Netting-1 Netbalance | Loans | Mortgage servicing rights | Non-trading derivatives and other financial assets measured on a recurring basis | Total assets | Total as a percentage of gross assets-5 | Liabilities | Interest-bearing deposits | Federal funds purchased and securities loaned and sold under agreements to repurchase | Trading account liabilities | Securities sold, not yet purchased | Other trading liabilities | Total trading liabilities | Trading derivatives | Interest rate contracts | Foreign exchange contracts | Equity contracts | Commodity contracts | Credit derivatives | Total trading derivatives | Cash collateral received-6 | Netting agreements | Netting of cash collateral paid | Total trading derivatives | Short-term borrowings | Long-term debt | Total non-trading derivatives and other financial liabilities measured on a recurring basis | Total liabilities | Total as a percentage of gross liabilities-5 |


Ezidebit On October 10, 2014, we completed the acquisition of 100% of the outstanding stock of Ezi Holdings Pty Ltd (Â¡Â°EzidebitÂ¡Â±) for AUD302.6 million in cash ($266.0 million equivalent as of the acquisition date).
This acquisition was funded by a combination of cash on hand and borrowings on our revolving credit facility.
Ezidebit is a leading integrated payments company focused on recurring payments verticals in Australia and New Zealand.
The acquisition of Ezidebit further enhanced our existing integrated solutions offerings.
This transaction was accounted for as a business combination.
We recorded the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.
projections for acquired loans, including its estimates of lifetime principal losses.
During each of the last three years, based largely on improving economic conditions, the Companys estimates of cash flows expected to be generated by acquired loans improved, resulting in increases in the accretable yield.
In 2014, estimated cash flows expected to be generated by acquired loans increased by $98 million, or approximately 2%.
That improvement reflected a lowering of estimated principal losses by approximately $47 million, primarily due to a $41 million decrease in expected principal losses in the acquired commercial real estate portfolios, as well as interest and other recoveries.
Similarly, in 2013 the estimates of cash flows expected to be generated by acquired loans increased by approximately 3%, or $179 million.
That improvement also reflected a lowering of estimated principal losses, largely driven by a $160 million decrease in expected principal losses in the acquired commercial real estate portfolios.
In 2012, estimated cash flows expected to be generated by acquired loans increased by $178 million, or approximately 2%.
That improvement was also largely driven by a reduction of estimated principal losses, including a $132 million decrease in expected principal losses in the acquired commercial real estate portfolios.
Table 11 NONACCRETABLE BALANCE  PRINCIPAL


During the first quarter of 2006, the Company determined that the accounting requirements under SFAS No.144 for reporting the Kraft Papers business as a discontinued operation were met.
Accordingly, a $100 million pre-tax charge ($61 million after taxes) was recorded to reduce the carrying value of the net assets of this business to their estimated fair value.
During the 2006 second quarter, the Company signed a definitive agreement to sell this business for approximately $155 million in cash, subject to certain closing and post-closing adjustments, and two additional payments totaling up to $60 million payable five years from the date of closing, contingent upon business performance.
A $16 million pre-tax charge ($11 million after taxes) was recorded during the second quarter to further reduce the carrying value of the assets of the Kraft Papers business based on the terms of this definitive agreement.
The sale of this business was subsequently completed on January 2, 2007.
The tax effects of significant temporary differences representing deferred tax assets and liabilities at December 31, 2006 and 2005, were as follows:


| 2015 Quarters-1 2014 Quarters | (In millions, except per share information) | Income statement | Net interest income | Noninterest income | Total revenue, net of interest expense | Provision for credit losses | Noninterest expense | Income (loss) before income taxes | Income tax expense (benefit) | Net income (loss) | Net income (loss) applicable to common shareholders | Average common shares issued and outstanding | Average diluted common shares issued and outstanding-2 | Performance ratios | Return on average assets | Four quarter trailing return on average assets-3 | Return on average common shareholders’ equity | Return on average tangible common shareholders’ equity-4 | Return on average tangible shareholders’ equity-4 | Total ending equity to total ending assets | Total average equity to total average assets | Dividend payout | Per common share data | Earnings (loss) | Diluted earnings (loss)(2) | Dividends paid | Book value | Tangible book value-4 | Market price per share of common stock | Closing | High closing | Low closing | Market capitalization |


Impairment The following table presents net unrealized losses on securities available for sale as of December 31:


| December 31, (in millions) 2016 2015 | Interest rate | Credit derivatives | Foreign exchange | Equity | Commodity | Total, net of cash collateral | Liquid securities and other cash collateral held against derivative receivables(a) | Total, net of all collateral |


RESEARCH AND DEVELOPMENT EXPENDITURES Research expenditures that relate to the development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred.
Such costs were $189 million in 2016, $191 million in 2015 and $197 million in 2014.
The Company did not participate in any material customer sponsored research during 2016, 2015 or 2014.


| 2016 2015 | December 31, (in millions) | U.S. GAAP nettable derivative receivables | Interest rate contracts: | OTC | OTC–cleared | Exchange-traded(a) | Total interest rate contracts | Credit contracts: | OTC | OTC–cleared | Total credit contracts | Foreign exchange contracts: | OTC | OTC–cleared | Exchange-traded(a) | Total foreign exchange contracts | Equity contracts: | OTC | OTC–cleared | Exchange-traded(a) | Total equity contracts | Commodity contracts: | OTC | OTC–cleared | Exchange-traded(a) | Total commodity contracts | Derivative receivables with appropriate legal opinions | Derivative receivables where an appropriate legal opinion has not been either sought or obtained | Total derivative receivables recognized on the Consolidated balance sheets | Collateral not nettable on the Consolidated balance sheets(c)(d) | Net amounts |


| In thousands of dollars Quoted prices in active markets of identical assets (Level1) Significant other observable inputs (Level 2) Significant other unobservable inputs (Level 3) Total assets measured at fair value asof December 31, 2010 | Cash and cash equivalents | Equity securities: | U.S. all-cap(a) | U.S. large-cap(b) | U.S. small/mid-cap | International all-cap(c) | Global all-cap(d) | Domestic real estate | Fixed income securities: | U.S. government/agency | Corporate bonds(e) | Collateralized obligations(f) | International government/corporate bonds(g) | Total Investments |


| Years Ended December 31, | 2009 | (In millions) | Operating Revenues | Premiums | Universal life and investment-type product policy fees | Net investment income | Other revenues | Total operating revenues | Operating Expenses | Policyholder benefits and claims and policyholder dividends | Interest credited to policyholder account balances | Capitalization of DAC | Amortization of DAC and VOBA | Interest expense | Other expenses | Total operating expenses | Provision for income tax expense (benefit) | Operating earnings |


Future Policy Benefit Reserve.
Activity in the reserve for future policy benefits is summarized for the periods indicated:


| For the Years Ended December 31, | 2014 | (Dollars in thousands) | Contracted services | Office supplies and services | Transportation | Rents | Other | Total |


PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements The Companys liability for future policy benefits is also inclusive of liabilities for guaranteed benefits related to certain long-duration life and annuity contracts.
Liabilities for guaranteed benefits with embedded derivative features are primarily in other contract liabilities in the table above.
The remaining liabilities for guaranteed benefits are primarily reflected with the underlying contract.
See Note 11 for additional information regarding liabilities for guaranteed benefits related to certain long-duration life and annuity contracts.
Premium deficiency reserves included in Future policy benefits are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and expenses.
Premium deficiency reserves have been recorded for the group single premium annuity business, which consists of limited-payment, long-duration traditional, non-participating annuities; structured settlements; single premium immediate annuities with life contingencies; long-term care; and for certain individual health policies.
Unpaid claims and claim adjustment expenses primarily reflect the Companys estimate of future disability claim payments and expenses as well as estimates of claims incurred but not yet reported as of the balance sheet dates related to group disability products.
Unpaid claim liabilities that are discounted use interest rates ranging from 3.0% to 6.4%.


| December 31, | 2017 | (tons in thousands) | Ammonia-1 | Granular urea | UAN -32% | AN |


| Millions 2016 2015 2014 | Cash provided by operating activities | Cash used in investing activities | Dividends paid | Free cash flow |


| Years Ended December 31, 2015/2014 2014/2013 | (Dollars in millions) | Gross written premiums | Net written premiums | Premiums earned | Incurred losses and LAE | Commission and brokerage | Other underwriting expenses | Underwriting gain (loss) | Point Chg | Loss ratio | Commission and brokerage ratio | Other underwriting expense ratio | Combined ratio | (Some amounts may not reconcile due to rounding.) |


| December 31, 2018 December 31, 2017 | Level 1 | (In thousands) | Interest rate swaps |


| Closed Block Business as of December 31, 2009 | Level 1 | (in millions) | Fixed maturities, available for sale: | U.S. Treasury securities and obligations of U.S. government authorities and agencies | Obligations of U.S. states and their political subdivisions | Foreign government bonds | Corporate securities | Asset-backed securities | Commercial mortgage-backed securities | Residential mortgage-backed securities | Subtotal | Trading account assets supporting insurance liabilities | Other trading account assets: | U.S. Treasury securities and obligations of U.S. government authorities and agencies | Obligations of U.S. states and their political subdivisions | Foreign government bonds | Corporate securities | Asset-backed securities | Commercial mortgage-backed securities | Residential mortgage-backed securities | Equity securities | All other | Subtotal | Equity securities, available for sale | Commercial mortgage and other loans | Other long-term investments | Short-term investments | Cash equivalents | Other assets | Subtotal excluding separate account assets | Separate account assets-4 | Total assets | Future policy benefits | Long-term debt | Other liabilities | Total liabilities |


| Net Charge-offs/Losses Net Charge-off/Loss Ratios-1, 2 | (Dollars in millions) | Held basis | Residential mortgage | Home equity | Discontinued real estate | Credit card – domestic | Credit card – foreign | Direct/Indirect consumer | Other consumer | Total held | Supplemental managed basis data | Credit card – domestic | Credit card – foreign | Total credit card – managed |


Market Risk Management Market risk is the risk that values of assets and liabilities or revenues will be adversely affected by changes in market conditions such as market movements.
This risk is inherent in the financial instruments associated with our operations and/or activities including loans, deposits, securities, short-term borrowings, long-term debt, trading account assets and liabilities, and derivatives.
Market-sensitive assets and liabilities are generated through loans and deposits associated with our traditional banking business, customer and proprietary trading operations, ALM process, credit risk mitigation activities and mortgage banking activities.
In the event of market volatility, factors such as underlying market movements and liquidity have an impact on the results of the Corporation.
Our traditional banking loan and deposit products are nontrading positions and are reported at amortized cost for assets or the amount owed for liabilities (historical cost).
GAAP requires a historical cost view of traditional banking assets and liabilities.
However, these positions are still subject to changes in economic value based on varying market conditions, primarily changes in the levels of interest rates.
The risk of adverse changes in the economic value of our nontrading positions is managed through our ALM activities.
We have elected to fair value certain loan and deposit products in accordance with SFAS 159.
For further information on fair value of certain financial assets and liabilities, see Note 19  Fair Value Disclosures to the Consolidated Financial Statements.
Our trading positions are reported at fair value with changes currently reflected in income.
Trading positions are subject to various risk factors, which include exposures to interest rates and foreign exchange rates, as well as mortgage, equity, commodity, issuer and market liquidity risk factors.
We seek to mitigate these risk exposures by using techniques that encompass a variety of financial instruments in both the cash and derivatives markets.
The following discusses the key risk components along with respective risk mitigation techniques.
Interest Rate Risk Interest rate risk represents exposures to instruments whose values vary with the level or volatility of interest rates.
These instruments include, but are not limited to, loans, debt securities, certain trading-related assets and liabilities, deposits, borrowings and derivative instruments.
Hedging instruments used to mitigate these risks include related derivatives such as options, futures, forwards and swaps.
Foreign Exchange Risk Foreign exchange risk represents exposures to changes in the values of current holdings and future cash flows denominated in other currencies.
The types of instruments exposed to this risk include investments in foreign subsidiaries, foreign currency-denominated loans and securities, future cash flows in foreign currencies arising from foreign exchange transactions, foreign currency-denominated debt and various foreign exchange derivative instruments whose values fluctuate with changes in the level or volatility of currency exchange rates or foreign interest rates.
Hedging instruments used to mitigate this risk include foreign exchange options, currency swaps, futures, forwards and deposits.
Mortgage Risk Mortgage risk represents exposures to changes in the value of mortgagerelated instruments.
The values of these instruments are sensitive to prepayment rates, mortgage rates, agency debt ratings, default, market liquidity, other interest rates and interest rate volatility.
Our exposure to these instruments takes several forms.
First, we trade and engage in market-making activities in a variety of mortgage securities including whole loans, pass-through certificates, commercial mortgages, and collateralized mortgage obligations including CDOs using mortgages as underlying collateral.
Second, we originate a variety of mortgage-backed securities which involves the accumulation of mortgage-related loans in anticipation of eventual securitization.
Third, we may hold positions in mortgage secu-


Net Investment Hedges The effective portions of net investment hedges are recorded in other comprehensive income (“OCI”) as a part of the cumulative translation adjustment.
The ineffective portions and amounts excluded from the effectiveness testing of net investment hedges are recognized in other income/(expense), net.
Fair Value Hedges Gains and losses related to changes in fair value hedges are recognized in earnings along with a corresponding loss or gain related to the change in value of the underlying hedged item.
Non-Designated Derivatives Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates.
The Company records all derivatives in the Consolidated Balance Sheets at fair value.
The Company’s accounting treatment for these derivative instruments is based on its hedge designation.


Effective January 1, 2017, the imputed discount on EIP receivables, which was previously recognized within Interest income in our Consolidated Statements of Comprehensive Income, is recognized within Other revenues in our Consolidated Statements of Comprehensive Income.
Due to this presentation, the imputed discount on EIP receivables is included in Adjusted EBITDA.
See Note 1 - Summary of Significant Accounting Policies of Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further information.
We have applied this change retrospectively and presented the effect on the years ended December 31, 2016 and 2015, in the table below.


| Shares (in millions) Exercise Price per Share* Remaining Contractual Term*(in years) Aggregate Intrinsic Value(in millions) | Outstanding at December 30, 2006 | Granted | Exercised | Forfeited or expired | Outstanding at December 29, 2007 | Exercisable at December 29, 2007 | Operations* | (Amounts in millions) | Net sales | Cost of goods sold | Gross profit | Operating expenses | Operating earnings before financial services | Financial services revenue | Financial services expenses | Operating earnings from financial services before arbitration settlement | Arbitration settlement | Operating earnings from financial services | Operating earnings | Interest expense | Intersegment interest income (expense) – net | Other income (expense) – net | Earnings before income taxes and equity earnings | Income tax expense | Earnings before equity earnings | Financial services – net earnings attributable to Snap-on | Equity earnings, net of tax | Net earnings | Net earnings attributable to noncontrolling interests | Net earnings attributable to Snap-on |


a) Includes FHLB and FRB restricted stock.
(b) Excludes residential mortgage loans measured at fair value on a recurring basis in accordance with SFAS No.159 at December 31, 2008.
Short-term financial assets, other securities and liabilities For financial instruments with a short-term or no stated maturity, prevailing market rates and limited credit risk, carrying amounts approximate fair value.
Those financial instruments include cash and due from banks, FHLB and FRB restricted stock, other short-term investments, certain deposits (demand, interest checking, savings, money market and foreign office deposits), and federal funds purchased.
Fair values for other time deposits, certificates of deposit $100,000 and over, and other short-term borrowings were estimated using a discounted cash flow calculation that applied prevailing LIBOR/swap interest rates for the same maturities.
Held-to-maturity securities The Bancorp's held-to-maturity securities are primarily composed of instruments that provide income tax credits as the economic return on the investment.
The fair value of these instruments is estimated based on current U. S.  Treasury tax credit rates.
Loans held for sale Fair values for commercial loans held for sale were valued based on executable broker quotes when available, or on the fair value of the underlying collateral.
Based upon the timing of the transfer of the commercial loans to held for sale, current carrying values approximate fair value as of December 31, 2008.
Fair values for other consumer loans held for sale are based on contractual values upon which the loans may be sold to a third party, and approximate their carrying value as of December 31, 2008 and 2007.
Portfolio loans and leases, net Fair values were estimated by discounting future cash flows using the current market rates as similar loans would be made to borrowers for the same remaining maturities.
Long-term debt Fair value of long-term debt was based on quoted market prices, when available, or a discounted cash flow calculation using LIBOR/swap interest rates and, in some cases, a spread for new issues for borrowings of similar terms.


| Year ended December 31, | $ in millions | Equity in earnings of unconsolidated affiliates | Interest and dividend income | Interest income of consolidated investment products | Gains/(losses) of consolidated investment products, net | Interest expense | Interest expense of consolidated investment products | Other gains and losses, net | Total other income and expenses |


Entergy Louisiana’s Ninemile Point Unit 6 Self-Build Project In June 2011, Entergy Louisiana filed with the LPSC an application seeking certification that the public necessity and convenience would be served by Entergy Louisiana’s construction of a combined-cycle gas turbine generating facility (Ninemile 6) at its existing Ninemile Point electric generating station.
Ninemile 6 will be a nominally-sized 550 MW unit that is estimated to cost approximately $721 million to construct, excluding interconnection and transmission upgrades.
Entergy Gulf States Louisiana joined in the application, seeking certification of its purchase under a life-of-unit power purchase agreement of up to 35% of the capacity and energy generated by Ninemile 6.
The Ninemile 6 capacity and energy is proposed to be allocated 55% to Entergy Louisiana, 25% to Entergy Gulf States Louisiana, and 20% to Entergy New Orleans.
In February 2012 the City Council passed a resolution authorizing Entergy New Orleans to purchase 20% of the Ninemile 6 energy and capacity.
If approvals are obtained from the LPSC and other permitting agencies, Ninemile 6 construction is


| Year Ended December 31, 2016 to 2017 % Change 2015 to 2016 % Change | 2017 | (in thousands) | Research and development | Research and development as a percentage of revenue |


| (In Millions) Dec 28,2013 Dec 29,2012 | Available-for-sale investments | Cash | Equity method investments | Loans receivable | Non-marketable cost method investments | Reverse repurchase agreements | Trading assets | Total cash and investments |


| Change | 2013 | (in millions) | Medicare | Commercial and other | Military services | Allowance for doubtful accounts | Total net receivables | Reconciliation to cash flow statement: | Provision for doubtful accounts | Receivables from acquisition | Change in receivables per cash flow statement resulting in cash from operations | Years ended December 31, | 2015 | Balance at beginning of period | Change in related noncontrolling interest balance | Changes in redemption value of redeemable noncontrolling interests: | Additions | Redemptions and reclassifications | Redemption value adjustments | Balance at end of period |


| (Dollars in millions) Available-for- Sale Debt Securities Available-for- Sale Marketable Equity Securities Derivatives Employee Benefit Plans -1 Foreign Currency -2 Total | Balance, December 31, 2007 | Net change in fair value recorded in accumulated OCI-3 | Net realized losses reclassified into earnings | Balance, December 31, 2008 | Cumulative adjustment for accounting change – OTTI-4 | Net change in fair value recorded in accumulated OCI | Net realized (gains) losses reclassified into earnings | Balance, December 31, 2009 | Cumulative adjustments for accounting changes: | Consolidation of certain variable interest entities | Credit-related notes | Net change in fair value recorded in accumulated OCI | Net realized (gains) losses reclassified into earnings | Balance, December 31, 2010 |


The target awards for the other Named Executive Officers were set as follows: Joseph F.  Domino, CEO - Entergy Texas (50%); Hugh T.  McDonald, CEO - Entergy Arkansas (50%); Haley Fisackerly, CEO - Entergy Mississippi (40%); William M.  Mohl (60%), CEO - Entergy Gulf States and Entergy Louisiana; Charles L.  Rice, Jr.  (40%), CEO - Entergy New Orleans and Theodore H.  Bunting, Jr.  - Principal Accounting Officer - the Subsidiaries (60%).
The target awards for the Named Executive Officers (other than Entergy named executive officers) were set by their respective supervisors (subject to ultimate approval of Entergys Chief Executive Officer) who allocated a potential incentive pool established by the Personnel Committee among various of their direct and indirect reports.
In setting the target awards, the supervisor took into account considerations similar to those used by the Personnel Committee in setting the target awards for Entergys Named Executive Officers.
Target awards are set based on an executive officers current position and executive management level within the Entergy organization.
Executive management levels at Entergy range from Level 1 thorough Level 4.
Mr.  Denault and Mr.  Taylor hold positions in Level 2 whereas Mr.  Bunting and Mr.  Mohl hold positions in Level 3 and Mr.  Domino, Mr.  Fisackerly, Mr.  McDonald and Mr.  Rice hold positions in Level 4.
Accordingly, their respective incentive targets differ one from another based on the external market data developed by the Committees independent compensation consultant and the other factors noted above.
In December 2010, the Committee determined the Executive Incentive Plan targets to be used for purposes of establishing annual bonuses for 2011.
The Committees determination of the target levels was made after full Board review of managements 2011 financial plan for Entergy Corporation, upon recommendation of the Finance Committee, and after the Committees determination that the established targets aligned with Entergy Corporations anticipated 2011 financial performance as reflected in the financial plan.
The targets established to measure management performance against as reported results were:


| 2013 2012 2011 | CommonStock | Balance January 1 | Purchases of treasury stock-1 | Issuances-2 | Balance December 31 |


Trading Account Assets Supporting Insurance Liabilities “Trading account assets supporting insurance liabilities, at fair value” include assets that support certain products included in the retirement business we acquired from CIGNA, as well as certain products included in the International Insurance segment, which are experience rated, meaning that the investment results associated with these products will ultimately accrue to contractholders.
Realized and unrealized gains and losses for these investments are reported in “Asset management fees and other income.
” Investment income for these investments is reported in “Net investment income.
” Results for 2005 and 2004 include the recognition of $33 million and $55 million of investment losses, respectively, on “Trading account assets supporting insurance liabilities, at fair value.
” These losses primarily represent interest-rate related mark-to-market adjustments on fixed maturity securities.
Consistent with our treatment of “Realized investment gains (losses), net,” these losses, which will ultimately accrue to the contractholders, are excluded from adjusted operating income.
In addition, results for 2005 and 2004 include increases of $44 million and decreases of $1 million, respectively, in contractholder liabilities due to asset value changes in the pool of investments that support these experience-rated contracts.
These liability changes are reflected in “Interest credited to policyholders’ account balances” and are also excluded from adjusted operating income.
As prescribed by GAAP, changes in the fair value of mortgage loans, other than when associated with impairments, are not recognized in income in the current period, while the impact of these changes in mortgage loan value are reflected as a change in the liability to contractholders in the current period.
Included in the amounts above related to the change in the liability to contractholders is a decrease related to mortgage loans of $12 million in 2005 and $27 million in 2004.
There were no amounts recorded related to these items in 2003.
Retirement.
Segment results for 2015 decreased in comparison to 2014, reflecting lower net investment spread results, higher general and administrative expenses, net of capitalization, and lower fee income, partially offset by more favorable reserve impacts.
Asset Management.
Segment results for 2015 decreased in comparison to 2014, primarily reflecting higher asset management fees from growth in assets under management, which were more than offset by higher expenses, and a lower contribution from other related revenues, net of expenses.
Individual Life.
Segment results for 2015 increased in comparison to 2014, primarily reflecting favorable comparative impacts from our annual reviews and updates of assumptions and lower integration costs.
Excluding these impacts, results for 2015 decreased from the prior year, reflecting less favorable mortality experience inclusive of associated reserve updates and amortization, net of reinsurance, and a lower contribution from investment results, partially offset by growth of our universal and term life businesses.
Group Insurance.
Segment results for 2015 increased in comparison to 2014, primarily reflecting favorable comparative impacts from our annual reviews and updates of assumptions.
Excluding these items, results increased from 2014 reflecting more favorable comparative underwriting results and lower expenses, partially offset by a lower contribution from net investment spread results.
International Insurance.
Segment results for 2015 decreased in comparison to 2014, primarily from net unfavorable impacts from foreign currency exchange rates and from our annual reviews and updates of assumptions.
Excluding these items, segment results increased from the prior year, reflecting net business growth driven by higher sales, a greater contribution from net investment spread results and the absence of certain reserve refinements that occurred in 2014.
Partially offsetting these impacts were higher expenses and lower income from non-coupon investments.
Corporate and Other operations.
The results for 2015 in comparison to 2014 reflected decreased losses driven by lower operating debt interest expense, net of higher investment income from the transfer of assets related to the restructuring of the former Closed Block Business, partially offset by higher capital debt interest expense, lower pension and employee benefits income and higher levels of corporate expenses.
Closed Block division.
Closed Block division results for 2015 increased in comparison to Closed Block Business results for 2014 primarily driven by the absence of costs associated with the early redemption in 2014 of senior secured notes, which we referred to as the IHC Debt.
Excluding this impact, results decreased, reflecting a decrease in net realized investment gains, net investment income and net insurance results, partially offset by lower interest expense and a decrease in the policyholder dividend obligation.
Consolidated Results of Operations The following table summarizes net income (loss) for the periods presented.


| Year Ended December 31, | 2012 | (in thousands, except percentages and per share data) | Total revenue | Operating income | Operating profit margin | Net income | Earnings per share – diluted: | Diluted earnings per share | Weighted average shares – diluted |


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollar amounts in thousands except per share data) Note 1Significant Accounting Policies (continued) Recognition of Premium Revenue and Related Expenses: Premium income for traditional long-duration life and health insurance products is recognized when due from the policyholder.
Premiums for short-duration health contracts are recognized as revenue over the contract period in proportion to the insurance protection provided.
Premiums for universal life-type and annuity contracts are added to the policy account value, and revenues for such products are recognized as charges to the policy account value for mortality, administration, and surrenders (retrospective deposit method).
Life premium includes policy charges of $18 million, $19 million, and $21 million for the years ended December 31, 2016, 2015, and 2014, respectively.
Other premium consists of annuity policy charges in each year.
For most insurance products, the related benefits and expenses are matched with revenues by means of the provision of future policy benefits and the amortization of deferred acquisition costs in a manner which recognizes profits as they are earned over the revenue recognition period.
For limited-payment life insurance products, the profits are recognized over the contract period.
Stock-Based Compensation: Torchmark accounts for stock-based compensation by recognizing an expense in the financial statements based on the fair value method.
 The fair value method requires that a fair value be assigned to a stock option or other stock grant on its grant date and that this value be amortized over the grantees service period.
The fair value method requires the use of an option valuation model to value employee stock options.
Torchmark has elected to use the Black-Scholes valuation model for option expensing.
A summary of assumptions for options granted in each of the three years 2014 through 2016 is as follows:


| December 31, 2014-6 | AmortizedCost | (in millions) | Fixed maturities, held-to-maturity | Foreign government bonds | Foreign corporate public securities | Foreign corporate private securities-5 | Commercial mortgage-backed securities | Residential mortgage-backed securities-3 | Total fixed maturities, held-to-maturity-5 |


Item 3.
Legal Proceedings.
In March 2005, we were served with a Complaint filed on November 12, 2004 by Oleg Sokolov with the United States District Court for the District of Connecticut alleging that our HTC?
grid infringes U. S.  Patent Number 5,970,118.
The plaintiff is seeking to preliminarily and permanently enjoin us from infringing the patent, as well as damages resulting from the alleged infringement, treble damages and reasonable attorney fees, and such other and further relief as may be available.
On April 25, 2005, we filed an Answer and Counterclaims in response to the complaint in which we denied the plaintiff’s allegations and, among other things, sought declaratory relief with respect to the patent claims and damages, as well as other relief.
On October 28, 1998, the plaintiff had previously sued Lorad, asserting, among other things, that Lorad had misappropriated the plaintiff’s trade secrets relating to the HTC Grid.
This previous case was dismissed on August 28, 2000.
The dismissal was affirmed by the Appellate Court of the State of Connecticut, and the United States Supreme Court refused to grant Certiorari.
We do not believe that we infringe any valid or enforceable patents of the plaintiff.
However, while we intend to vigorously defend our interests, ongoing litigation can be costly and time consuming, and we cannot guarantee that we will prevail.


Depreciation and Amortization Year Ended December 31, 2012 Compared to Year Ended December 31, 2011.
The increase in depreciation and amortization expense was primarily a result of higher plant balances due to the addition of Constellation facilities; and capital additions and other upgrades to legacy plants.
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010.
The increase in depreciation and amortization expense was primarily a result of higher plant balances due to the acquisition of Exelon Wind, capital additions and other upgrades to existing facilities.
Higher plant balances resulted in an increase in depreciation and amortization expense of $61 million.
The remaining increase in depreciation and amortization expense was due to the impact of increases in asset retirement costs (ARC) for Generations nuclear generating facilities.
Taxes Other Than Income Year Ended December 31, 2012 Compared to Year Ended December 31, 2011.
The increase was primarily due to the addition of Constellations financial results in 2012.
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010.
The increase was primarily due to increased gross receipt taxes related to retail sales in the Mid-Atlantic region.
These gross receipt taxes are recovered in revenue, and as a result, have no impact to Generations results of operations.
Equity in Losses of Unconsolidated Affiliates Year Ended December 31, 2012 Compared to Year Ended December 31, 2011.
Equity in losses of unconsolidated affiliates in 2012 primarily reflected $172 million related to the amortization of the basis difference in CENG recorded at fair value at the merger date, partially offset by $73 million of net income generated from Exelons equity investment in CENG.
Interest Expense Year Ended December 31, 2012 Compared to Year Ended December 31, 2011.
The increase in interest expense is primarily due to the increase in long-term debt as a result of the merger.
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010.
The increase in interest expense is primarily due to debt issuances in 2010, further described in Note 11 of the Combined Notes to Consolidated Financial Statements.
The increase in long-term debt resulted in higher interest expense of approximately $27 million.


| In millions of dollars 2008 2007 2006 % Change 2008 vs. 2007 % Change 2007 vs. 2006 | Net interest revenue | Non-interest revenue | Revenues, net of interest expense | Operating expenses | Provisions for loan losses and for benefits and claims | Income (loss) before taxes and minority interest | Income taxes | Minority interest, net of taxes | Net income (loss) | Average assets(in billions of dollars) | Return on assets | Key indicators(in billions of dollars, except in branches) | Average loans | AverageConsumer Bankingloans | Average deposits (and other consumer liability balances) | Branches/offices |


2017 Compared to 2016 Owned, leased, and other revenue, net of direct expenses increased by $149 million, primarily due to $160 million of higher Legacy-Starwood owned and leased profits, partially offset by $7 million of net lower Legacy-Marriott owned and leased profits, primarily driven by lower RevPAR in Brazil and properties under renovation.2016 Compared to 2015 Owned, leased, and other revenue, net of direct expenses increased by $104 million, driven by $78 million from the Starwood Combination and the following Legacy-Marriott changes: $17 million of net stronger performance at several properties following renovations, $15 million overall favorable results across our segments, and $4 million of lower pre-opening costs, partially offset by $10 million of lower profits from properties that converted from owned to managed.


| 2007 2006 2005 | Options | Outstanding, beginning of year | Granted | Exercised | Forfeited | Outstanding, end of year | Exercisable, end of year |


10.
Commitments and Contingencies Purchase Obligations The Company enters into various purchase obligations in the ordinary course of business.
Those that are binding primarily relate to amounts owed under contractor and subcontractor agreements, orders submitted for equipment for restaurants under construction, commitment for food purchases, and corporate sponsorships.
As of December 31, 2011, total purchase obligations were $73,455.
Litigation In 2006, Maurizio Antoninetti filed suit against the Company in the U. S.  District Court for the Southern District of California, primarily claiming that the height of the serving line wall in the Companys restaurants violated the Americans with Disabilities Act, or ADA, as well as California disability laws.
On December 6, 2006, Mr.  Antoninetti filed an additional lawsuit in the same court making the same allegations on a class action basis, on behalf of himself and a purported class of disabled individuals, and a similar class action was filed by James Perkins in U. S.  District Court for the Central District of California on May 7, 2008.
In the individual Antoninetti action, the district court entered a ruling in which it found that although the Companys counter height violated the ADA, the Company provided the plaintiff with an equivalent facilitation, and awarded attorneys fees and minimal damages to the plaintiff which the Company has accrued.
The Company and the plaintiff appealed the district courts ruling to the U. S.  Court of Appeals for the Ninth Circuit, and on July 26, 2010, the appeals court entered a ruling finding that the Company violated the ADA and did not provide the plaintiff with an equivalent facilitation, and remanded the case to the district court.
The district court will now determine the damages and injunctive relief and final award of attorneys fees to which Antoninetti is entitled based on the court of appeals ruling.


| For the years ended December 31, 2017 2016 2015 | Units granted | Weighted-average fair value at date of grant | Monte Carlo simulation assumptions: | Estimated values | Dividend yields | Expected volatility |


Note 29 Off-balance sheet lending-related financial instruments and guarantees JPMorgan Chase utilizes lending-related financial instruments (e. g. , commitments and guarantees) to meet the financing needs of its customers.
The contractual amount of these financial instruments represents the maximum possible credit risk should the counterparty draw down the commitment or the Firm fulfill its obligation under the guarantee, and the counterparty were to subsequently fail to perform according to the terms of the contract.
Most of these commitments and guarantees expire without a default occurring or without being drawn.
As a result, the total contractual amount of these instruments is not, in the Firms view, representative of its actual future credit exposure or funding requirements.
Further, certain commitments, primarily related to consumer financings, are cancelable, upon notice, at the option of the Firm.
To provide for the risk of loss inherent in commercial-related contracts, an allowance for credit losses is maintained.
See Note 12 on page 100 of this Annual Report for a further discussion of the Allowance for credit losses on lending-related commitments.


Average total core deposits for the 2014 fourth quarter increased $2.9 billion, or 6%, from the year-ago quarter, of which $1.1 billion were acquired deposits.
Noninterest-bearing deposits increased $1.8 billion, or 14%.
Average interest-bearing liabilities increased $5.1 billion, or 14%, from the year-ago quarter, reflecting: x $2.9 billion, or 78%, increase in short- and long-term borrowings, primarily reflecting a cost-effective method of funding incremental LCR related securities growth.
x $1.6 billion, or 9%, increase in money market deposits, reflecting the strategic focus on customer growth and increased shareof-wallet among both consumer and commercial customers.
x $1.0 billion, or 74%, increase in brokered deposits and negotiated CDs, which were used to efficiently finance balance sheet growth while continuing to manage the overall cost of funds.
Partially offset by: x $0.9 billion, or 22%, decrease in average core certificates of deposit due to the strategic focus on changing the funding sources to no-cost demand deposits and lower-cost money market deposits.


| Units Weighted Average Grant-Date Fair Value per Unit | (In whole) | Non-vested at December 31, 2009 | Granted | Forfeited | Vested | Non-vested at December 31, 2010 |


| ($ in millions, except per share data) 2010 2009 2008 | Numerator: | Net income (loss) | Denominator: | Weighted average common shares outstanding | Effect of dilutive potential common shares: | Stock options | Restricted stock units (non-participating) | Weighted average common and dilutive potential common shares outstanding | Earnings per share – Basic | Earnings per share – Diluted |


| 2009 2008 2007 | Balance at beginning of year | Additions due to the acquisition of Allied | Additions based on tax positions related to current year | Reductions for tax positions related to the current year | Additions for tax positions of prior years | Reductions for tax positions of prior years | Reductions for tax positions resulting from lapse of statute of limitations | Settlements | Balance at end of year |


Cost of Service and Other Revenues Cost of service and other revenues primarily represents payroll and related costs associated with the Companys professional services employees, consultants, infrastructure costs and overhead allocations, including depreciation and rent and materials consumed in providing the service.
Stock-Based Compensation The Company accounts for share-based payments in accordance with ASC 718, Stock Compensation.
As such, all share-based payments to employees, including grants of stock options and restricted stock units, are recognized in the consolidated statement of operations based on their fair values as the date of grant.
Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding.
Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares and potential common shares from outstanding stock options, restricted stock units and convertible debt determined by applying the treasury stock method.
In accordance with ASC 718, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of in-the-money stock options and restricted stock units.
The Company applies the provisions of ASC 260, Earnings Per Share, Subsection 10-45-44, to determine the diluted weighted average shares outstanding as it relates to its Convertible Notes, and due to the type of debt instrument issued, the Company applies the treasury stock method and not the ifconverted method.
The dilutive impact of the Companys Convertible Notes is based on the difference between the Companys current period average stock price and the conversion price of the Convertible Notes, provided there is a premium.
Pursuant to this accounting standard, there is no dilution from the accreted principal of the Convertible Notes.


| Type of Case Number of CasesPending as ofDecember 31, 2014 Number of CasesPending as ofDecember 31, 2013 Number of CasesPending as ofDecember 31, 2012 | Individual Smoking and Health Cases-1 | Smoking and Health Class Actions and Aggregated Claims Litigation-2 | Health Care Cost Recovery Actions-3 | “Lights/Ultra Lights” Class Actions |


HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued) As a result of continued substantial operating losses and unsuccessful efforts to improve operating performance by reducing refining capacity, HOVENSA prepared an impairment analysis as of December 31, 2011, which concluded that undiscounted future cash flows would not recover the carrying value of its long-lived assets, and recorded an impairment charge and other charges related to the decision to shut down the refinery.
For 2011, the Corporation recorded a total of $1,073 million of losses from its equity investment in HOVENSA.
These pre-tax losses included $875 million ($525 million after income taxes) due to the impairment recorded by HOVENSA and other charges associated with its decision to shut down the refinery.
The Corporations share of the impairment related losses recorded by HOVENSA represented an amount equivalent to the Corporations financial support to HOVENSA at December 31, 2011, its planned future funding commitments for costs related to the refinery shutdown, and a charge of $135 million for the write-off of related assets held by the subsidiary which owns the Corporations investment in HOVENSA.
A deferred income tax benefit of $350 million, consisting primarily of U. S.  income taxes, was recorded on the Corporations share of HOVENSAs impairment and refinery shutdown related charges.
At December 31, 2011, the Corporation had a liability of $487 million for its planned funding commitments, which was fully funded in 2012.
In December 2010, the Corporation recorded an impairment charge of $300 million before income taxes ($289 million after income taxes) to reduce the carrying value of its equity investment in HOVENSA to its fair value.
The investment had been adversely affected by consecutive annual operating losses and a fourth quarter 2010 debt rating downgrade.
The Corporation performed an impairment analysis and concluded that its investment had experienced an other than temporary decline in value.
The fair value was determined based on an income approach using estimated refined petroleum product selling prices and volumes, related costs of product sold, capital and operating expenditures and a market based discount rate (a Level 3 fair value measurement).
The Corporations investment in HOVENSA is accounted for using the equity method.
In accordance with Rule 3-09 of Regulation S-X, the Corporation has filed financial statements for HOVENSA in this report on Form 10-K.  6.
Property, Plant and Equipment Property, plant and equipment at December 31 were as follows:


| Percentages of Related Revenues Fiscal Year Ended September 30, | 2011 | Gross profit — Home sales | Gross profit — Land/lot sales | Effect of inventory impairments and land option cost write-offs ontotal homebuilding gross profit | Gross profit — Total homebuilding | Selling, general and administrative expense | Interest expense | Loss on early retirement of debt, net | Other (income) | Income (loss) before income taxes |


Determination of Fair Value of Plan Assets The Plan has an established and well-documented process for determining fair values.
Fair value is based upon quoted market prices, where available.
If listed prices or quotes are not available, fair value is based upon models that primarily use, as inputs, market-based or independently sourced market parameters, including yield curves, interest rates, volatilities, equity or debt prices, foreign exchange rates and credit curves.
While the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Valuation Hierarchy The authoritative literature establishes a three-level hierarchy to prioritize the inputs used in measuring fair value.
The levels within the hierarchy are described in the table below with Level 1 having the highest priority and Level 3 having the lowest.
A financial instruments categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Following is a description of the valuation methodologies used for the investments measured at fair value.  ?
Short-term investment funds  Cash and quoted short-term instruments are valued at the closing price or the amount held on deposit by the custodian bank.
Other investments are through investment vehicles valued using the Net Asset Value (NAV) provided by the administrator of the fund.
The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding.
The NAV is a quoted price in a market that is not active and classified as Level 2.  ?
Government and agency securities  A limited number of these investments are valued at the closing price reported on the major market on which the individual securities are traded.
Where quoted prices are available in an active market, the investments are classified within Level 1 of the valuation hierarchy.
If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.
When quoted market prices for a security are not available in an active market, they are classified as Level 2.  ?
Debt instruments  A limited number of these investments are valued at the closing price reported on the major market on which the individual securities are traded.
Where quoted prices are available in an active market, the investments are classified as Level 1.
If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows and are classified as Level 2.
Level 3 debt instruments are priced based on unobservable inputs.  ?
Equity securities  Equity securities are valued at the closing price reported on the major market on which the individual securities are traded.
Substantially all common stock is classified within Level 1 of the valuation hierarchy.  ?
Commingled funds  These investment vehicles are valued using the NAV provided by the fund administrator.
The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding.
Assets in the Level 2 category have a quoted market price.


| 10/28/2012 10/27/2013 10/26/2014 10/25/2015 10/30/2016 10/29/2017 | Applied Materials | S&P 500 Index | RDG Semiconductor Composite Index |


| December 31, | 2007 | (In millions) | Embedded derivative assets | Embedded derivative liabilities |


| Pension Plans Other Postretirement | (In millions) | Long-term return on assets | Discount rate |


(v) bankruptcy, insolvency, or other similar proceedings, (vi) our inability to pay debts, (vii) judgment defaults of $15 million or more, (viii) customary ERISA and environmental defaults, (ix) actual or asserted invalidity of any material provision of the loan documentation or impairment of a portion of the collateral, (x) failure of subordinated indebtedness to be validly and sufficiently subordinated, and (xi) a change of control.
Borrowings under the Credit Agreement accrue interest at variable rates, which depend on the type (U. S.  dollar or Canadian dollar) and duration of the borrowing, plus an applicable margin rate.
The weighted-average interest rates, including the effect of interest rate swap agreements, on borrowings outstanding against our senior secured credit facility at December 31, 2010 and 2009 were 3.97% and 4.53%, respectively.
Borrowings against the senior secured credit facility totaled $590.1 million and $595.7 million at December 31, 2010 and 2009, respectively, of which $50.0 million and $7.5 million were classified as current maturities, respectively.
We also incur commitment fees on the unused portion of our revolving credit facility ranging from 0.38% to 0.50%.
As part of the consideration for business acquisitions completed during 2010, 2009 and 2008, we issued promissory notes totaling approximately $5.5 million, $1.2 million and $1.6 million, respectively.
The notes bear interest at annual rates of 2.0% to 4.0%, and interest is payable at maturity or in monthly installments.
Note 6.
Derivative Instruments and Hedging Activities We are exposed to market risks, including the effect of changes in interest rates, foreign currency exchange rates and commodity prices.
Under our current policies, we use derivatives to manage our exposure to variable interest rates on our Credit Agreement, but we do not attempt to hedge our foreign currency and commodity price risks.
We do not hold or issue derivatives for trading purposes.
At December 31, 2010, we had interest rate swap agreements in place to hedge a portion of the variable interest rate risk on our variable rate term loans, with the objective of minimizing the impact of interest rate fluctuations and stabilizing cash flows.
Beginning on the effective dates of the interest rate swap agreements, on a monthly basis through the maturity date, we have paid and will pay the fixed interest rate and have received and will receive payment at a variable rate of interest based on the London InterBank Offered Rate (LIBOR) on the notional amount.
The interest rate swap agreements qualify as cash flow hedges, and we have elected to apply hedge accounting for these swap agreements.
As a result, the effective portion of changes in the fair value of the interest rate swap agreements is recorded in Other Comprehensive Income and is reclassified to interest expense when the underlying interest payment has an impact on earnings.
The ineffective portion of changes in the fair value of the interest rate swap agreements is reported in interest expense.


| Total Capital Leases Operating Leases Sponsorship, Licensing & Other | 2010 | 2011 | 2012 | 2013 | 2014 | Thereafter | Total | For the years ended December 31, | 2009 | Dollar Amount | (In millions, except percentages) | Income (loss) before income tax expense | Federal statutory tax | State tax effect, net of federal benefit | Foreign tax effect, net of federal benefit | Non-deductible expenses and other differences | Tax exempt income | Income tax expense (benefit) |


| 2002 2001 | Entergy Arkansas | Entergy Gulf States | Entergy Louisiana | System Energy |


The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in millions):


| Years | Land improvements | Buildings and improvements | Capitalized software costs | Machinery and other equipment |


| December 31 | Commercial Utilized | (Dollars in millions) | Real estate-3 | Diversified financials | Government and public education | Retailing | Capital goods | Healthcare equipment and services | Materials | Consumer services | Banks | Individuals and trusts | Commercial services and supplies | Food, beverage and tobacco | Energy | Media | Utilities | Transportation | Insurance | Religious and social organizations | Consumer durables and apparel | Technology hardware and equipment | Software and services | Pharmaceuticals and biotechnology | Telecommunication services | Automobiles and components | Food and staples retailing | Household and personal products | Semiconductors and semiconductor equipment | Other | Total commercial credit exposure by industry | Net credit default protection purchased on total commitments-4 |


| In millions 2018 2017 2016 | Net Sales (a) | Operating Profit (Loss) |


| (in millions) 2005 2004 2003 | Revenues(a): | Aircraft Finance(b) | Capital Markets(c)(d) | Consumer Finance(e) | Other | Total | Operating income (loss)(a): | Aircraft Finance | Capital Markets(d) | Consumer Finance(f) | Other, including intercompany adjustments | Total |


Long-term product offerings include active and index strategies.
Our active strategies seek to earn attractive returns in excess of a market benchmark or performance hurdle while maintaining an appropriate risk profile.
We offer two types of active strategies: those that rely primarily on fundamental research and those that utilize primarily quantitative models to drive portfolio construction.
In contrast, index strategies seek to closely track the returns of a corresponding index, generally by investing in substantially the same underlying securities within the index or in a subset of those securities selected to approximate a similar risk and return profile of the index.
Index strategies include both our non-ETF index products and iShares ETFs.
Although many clients use both active and index strategies, the application of these strategies may differ.
For example, clients may use index products to gain exposure to a market or asset class.
In addition, institutional non-ETF index assignments tend to be very large (multi-billion dollars) and typically reflect low fee rates.
This has the potential to exaggerate the significance of net flows in institutional index products on BlackRock’s revenues and earnings.
Equity Year-end 2014 equity AUM of $2.451 trillion increased by $133.4 billion, or 6%, from the end of 2013 due to net new business of $52.4 billion and net market appreciation and foreign exchange movements of $81.0 billion.
Net inflows were driven by $59.6 billion and $17.7 billion into iShares and non-ETF index accounts, respectively.
Index inflows were offset by active net outflows of $24.9 billion, with outflows of $18.0 billion and $6.9 billion from fundamental and scientific active equity products, respectively.
BlackRock’s effective fee rates fluctuate due to changes in AUM mix.
Approximately half of BlackRock’s equity AUM is tied to international markets, including emerging markets, which tend to have higher fee rates than similar U. S.  equity strategies.
Accordingly, fluctuations in international equity markets, which do not consistently move in tandem with U. S.  markets, may have a greater impact on BlackRock’s effective equity fee rates and revenues.
Fixed Income Fixed income AUM ended 2014 at $1.394 trillion, increasing $151.5 billion, or 12%, from December 31, 2013.
The increase in AUM reflected $96.4 billion in net new business and $55.1 billion in net market appreciation and foreign exchange movements.
In 2014, net new business was diversified across fixed income offerings, with strong flows into our unconstrained, total return and high yield products.
Flagship funds in these product areas include our unconstrained Strategic Income Opportunities and Fixed Income Global Opportunities funds, with net inflows of $13.3 billion and $4.2 billion, respectively; our Total Return fund with net inflows of $2.1 billion; and our High Yield Bond fund with net inflows of $2.1 billion.
Fixed income net inflows were positive across investment styles, with iShares, non-ETF index, and active net inflows of $40.0 billion, $28.7 billion and $27.7 billion, respectively.
Multi-Asset Class BlackRock’s multi-asset class team manages a variety of balanced funds and bespoke mandates for a diversified client base that leverages our broad investment expertise in global equities, currencies, bonds and commodities, and our extensive risk management capabilities.
Investment solutions might include a combination of long-only portfolios and alternative investments as well as tactical asset allocation overlays.
Component changes in multi-asset class AUM for 2014 are presented below.


| (in millions) Maturity Amount Unamortized Discount Carrying Value Fair Value | 3.50% Notes due 2014 | 1.375% Notes due 2015 | 6.25% Notes due 2017 | 5.00% Notes due 2019 | 4.25% Notes due 2021 | 3.375% Notes due 2022 | Total Long-term Borrowings |


| ($ in millions) 2015 Change 2014 Change 2013 | Materials and production | Marketing and administrative | Research and development-1 | Restructuring costs | Other (income) expense, net | $34,097 |


| Amount (In Millions) | 2010 net revenue | Retail electric price | ANO decommissioning trust | Transmission revenue | Volume/weather | Net wholesale revenue | Capacity acquisition recovery | Other | 2011 net revenue |


| Years Ended December 31 2007 | Tangible net assets | Goodwill | Other intangibles | In-process research and development | $4,286 | Consideration, net: | Cash | Stock | $4,286 |


| Plan Category Number Of Securities To Be Issued Upon Exercise Of Outstanding Options, Warrants And Rights (a) Weighted-Average Exercise Price Of OutstandingOptions, Warrants And Rights (b) Number Of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c) | Equity compensation plans approved by security holders | Equity compensation plans not approved by security holders -1 | Total |


| For the Years Ended December 31, | (Millions of Dollars) | Operating revenues | Purchased power | Fuel | Other operations and maintenance | Depreciation and amortization | Taxes, other than income taxes | Electric operating income |


| 2017 2016 2015 2014 | $44,903 |