Item 3.
Legal Proceedings.
Discussion of legal proceedings is incorporated by reference from Part II, Item 8, Note 15, Commitments and Contingencies, of this Form 10-K and should be considered an integral part of Part I, Item 3, Legal Proceedings.
 Other environmental-related legal proceedings are discussed at Part I, Item 1(c) above, under the heading Environmental and Regulatory Considerations and is incorporated herein by reference.
Item 4.
Mine Safety Disclosures.
Not applicable.
Belgian Tax Matter Belgian Tax Matter In January 2012, the Company received a ¬23,789 assessment from the Belgian tax authority related to its year ended December 31, 2008, asserting that the Company had understated its Belgian taxable income for that year.
The Company filed a formal protest in the first quarter of 2012 refuting the Belgian tax authorityÂ¡Â¯s position.
The Belgian tax authority set aside the assessment in the third quarter of 2012 and refunded all related deposits, including interest income of ¬1,583 earned on such deposits.
However, on October 23, 2012, the Belgian tax authority notified the Company of its intent to increase the CompanyÂ¡Â¯s taxable income for the year ended December 31, 2008 under a revised theory.
On December 28, 2012, the Belgian tax authority issued assessments for the years ended December 31, 2005 and December 31, 2009, in the amounts of ¬46,135 and ¬35,567, respectively, including penalties, but excluding interest.
The Company filed a formal protest during the first quarter of 2013 relating to the new assessments.
In September 2013, the Belgian tax authority denied the CompanyÂ¡Â¯s protests, and the Company has brought these two years before the Court of First Appeal in Bruges.
In December 2013, the Belgian tax authority issued additional assessments related to the years ended December 31, 2006, 2007, and 2010, in the amounts of ¬38,817, ¬39,635, and ¬43,117, respectively, including penalties, but excluding interest.
The Company filed formal protests during the first quarter of 2014, refuting the Belgian tax authorityÂ¡Â¯s position for each of the years assessed.
In the quarter ended June 28, 2014, the Company received a formal assessment for the year ended December 31, 2008, totaling ¬30,131, against which the Company also submitted its formal protest.
All 4 additional years have been brought before the Court of First Appeal in November 2014.
In January of 2015, the Company met with the Court of First Appeal in Bruges, Belgium and agreed with the Belgium tax authorities to consolidate and argue the issues regarding the years 2005 and 2009, and apply the ruling to all of the open years (to the extent there are no additional facts/procedural arguments in the other years).
In May 2017, the statute of limitation was extended to include the calendar year 2011.
On January 27, 2016, the Court of First Appeal in Bruges, Belgium ruled in favor of the Company with respect to the calendar years ending December 31, 2005 and December 31, 2009.
On March 9, 2016, the Belgian tax authority lodged its Notification of Appeal with the Ghent Court of Appeal.
The Company disagrees with the views of the Belgian tax authority on this matter and will persist in its vigorous defense.
Nevertheless, on May 24, 2016, the tax collector representing the Belgian tax authorities imposed a lien on the CompanyÂ¡Â¯s properties in Wielsbeke (Ooigemstraat and Breestraat), Oostrozebeke (Ingelmunstersteenweg) and Desselgem (Waregemstraat) included in the Flooring ROW segment.
The purpose of the lien is to provide security for payment should the Belgian tax authority prevail on its appeal.
The lien does not interfere with the CompanyÂ¡Â¯s operations at these properties.
Note 13.
Commitments and Contingencies The Company is obligated under various operating leases for office and manufacturing space, machinery, and equipment.


| Fiscal Year | In Millions | Net gain (loss) onmark-to-marketvaluation of commodity positions | Net loss on commodity positions reclassified from unallocated corporate items to segmentoperating profit | Netmark-to-marketrevaluation of certain grain inventories | Netmark-to-marketvaluation of certain commodity positions recognized in unallocated corporate items |


| April 2, 2011 April 3, 2010 | Gross   Carrying   Amount | (millions) | Intangible assets subject to amortization: | Re-acquired licensed trademarks | Customer relationships/lists | Other | Total intangible assets subject to amortization | Intangible assets not subject to amortization: | Trademarks and brands | Total intangible assets |


| Credit Card (a) Other Consumer (b) | Dollars in millions | December 31, 2015 | FICO score greater than 719 | 650 to 719 | 620 to 649 | Less than 620 | No FICO score available or required (c) | Total loans using FICO credit metric | Consumer loans using other internal credit metrics (b) | Total loan balance | Weighted-average updated FICO score (d) | December 31, 2014 | FICO score greater than 719 | 650 to 719 | 620 to 649 | Less than 620 | No FICO score available or required (c) | Total loans using FICO credit metric | Consumer loans using other internal credit metrics (b) | Total loan balance | Weighted-average updated FICO score (d) |


| Change in Assumption (a) EstimatedIncrease to 2012PensionExpense(In millions) | .5% decrease in discount rate | .5% decrease in expected long-term return on assets | .5% increase in compensation rate |


| Number Capacity(MMBbl) | Liquids terminals | Bulk terminals | Materials Services locations | Jones Act qualified tankers |


| Years Ended December 31, | 2013 | (in millions, except per share data) | Income Statement Data: | Total net revenues | Total expenses | Income from continuing operations | Income (loss) from discontinued operations, net of tax | Net income | Less: Net income (loss) attributable to noncontrolling interests | Net income attributable to Ameriprise Financial | Earnings Per Share Attributable to Ameriprise Financial, Inc. Common Shareholders: | Basic | Income from continuing operations | Loss from discontinued operations | Net income | Diluted | Income from continuing operations | Loss from discontinued operations | Net income | Cash Dividends Declared Per Common Share |


In August 2016, the Company entered into interest rate swap agreements to hedge the cash flows with respect to $1.2 billion of the aggregate principal outstanding on the Company's variable rate senior secured notes (see
Note 10Derivative Instruments


| Year Ended December 31, | 2012 | Electric Energy Delivered(millions of kWh) | CECONY full service customers | Delivery service for retail choice customers | Delivery service to NYPA customers and others | Delivery service for municipal agencies | Total Deliveries in Franchise Area | Electric Energy Delivered($ in millions) | CECONY full service customers | Delivery service for retail choice customers | Delivery service to NYPA customers and others | Delivery service for municipal agencies | Other operating revenues | Total Deliveries in Franchise Area | Average Revenue per kWh Sold(Cents)(a) | Residential | Commercial and Industrial |


| Year Ended December 31, | 2011 | $ | ($ in thousands) | Commissions | Technology products and services | Information and user access fees | Investment income | Other | Total revenues |


| Years Ended December 31, 2017 2016 2015 | Mexico | Philippines | Bulgaria | Chile | AES Corporation | Argentina | United Kingdom | Colombia | Other | Total-1 |


x Level 3 - Level 3 inputs are pricing inputs that are generally less observable or unobservable from objective sources.
These inputs are used with internally developed methodologies to produce management's best estimate of fair value for the asset or liability.
Level 3 consists primarily of derivative power contracts used as cash flow hedges of power sales at unregulated power plants.
The values for the cash flow hedges that are recorded as derivative contract assets or liabilities are based on both observable inputs including public market prices and unobservable inputs such as model-generated prices for longer-term markets and are classified as Level 3 assets and liabilities.
The amounts reflected as the fair value of derivative assets or liabilities are based on the estimated amount that the contracts are in-the-money at the balance sheet date (treated as an asset) or out-of-the-money at the balance sheet date (treated as a liability) and would equal the estimated amount receivable from or payable to Entergy if the contracts were settled at that date.
These derivative contracts include cash flow hedges that swap fixed for floating cash flows for sales of the output from Entergy's Non-Utility Nuclear business.
The fair values are based on the mark-to-market comparison between the fixed contract prices and the floating prices determined each period from a combination of quoted forward power market prices for the period for which such curves are available, and model-generated prices using quoted forward gas market curves and estimates regarding heat rates to convert gas to power and the costs associated with the transportation of the power from the plants' bus bar to the contract's point of delivery, generally a power market hub, for the period thereafter.
The difference between the fixed price in the swap contract and these market-related prices multiplied by the volume specified in the contract and discounted at the counterparties' credit adjusted risk free rate are recorded as derivative contract assets or liabilities.
All of the $207 million net assets at December 31, 2008 are in-the-money contracts with counterparties who are currently all investment grade.


| InvestmentServicing InvestmentManagement Other Total | Years Ended December 31, | (Dollars in millions,except where otherwise noted) | Fee revenue: | Servicing fees | Management fees | Trading services | Securities finance | Processing fees and other | Total fee revenue | Net interest revenue | Gains (losses) related to investment securities, net | Total revenue | Provision for loan losses | Total expenses | Income before income tax expense | Pre-tax margin | Average assets (in billions) |


| NIR-AT-RISK Estimated Exposure to Net Interest Revenue | 2005 | (Dollars in millions) Rate Change | + 100 bps shock | – 100 bps shock | + 100 bps ramp | – 100 bps ramp |


| December 31, 2009 | Problem, potential problem, and restructured | Carrying amount | (in millions) | Three months or less | Greater than three to six months | Greater than six to nine months | Greater than nine to twelve months | Greater than twelve months | Total fixed maturities, available-for-sale |


| 2013 2014to2015 2016to2017 After2017 Total | Long-term debt-1 | Interest expense related to long-term debt | Reduction of interest expense from interest rate swapagreements related to long-term debt | Operating leases | Purchase obligations | Other long-term obligations | Total |


| Approximate Number of Vehicles Approximate Average Age | Residential | Small-container | Large-container | Total | 2017 | Salaries | Provision for doubtful accounts | Other | Total selling, general and administrative expenses |


| Year ended December 31, | 2016 | (in millions) | Operating results: | Revenues | Benefits and expenses | Adjusted operating income | Realized investment gains (losses), net, and related adjustments | Related charges | Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures |


| As of December 31, 2016 As of December 31, 2015 | (In millions) | Out-licensed patents | Developed technology | In-process research and development | Trademarks and trade names | Acquired and in-licensed rights and patents | Total intangible assets |


| Change | 2003 | (in thousands) | IBNR-1 | Unprocessed claim inventories-2 | Processed claim inventories-3 | Payable to pharmacy benefit administrator and other-4 | Total medical and other expenses payable |


Financing Activities For the year ended 2014, cash used by financing activities was $504.3 primarily attributable to cash used to pay dividends of $627.7, which was partially offset by proceeds from stock option exercises of $141.6.
Our borrowings (short- and long-term proceeds, net of repayments) were a net source of cash (issuance) of $1.1 and included $148.7 of net commercial paper and other short-term debt issuances, debt proceeds from the issuance of a


| 2003 2002 2001 | Quarter | First | Second | Third | Fourth |


| Share value and redemption price per share(b) Shares Outstanding at December 31, 2008 (in millions) Earliest redemption date Contractual rate in effect at December 31, 2008 | Cumulative Preferred Stock, SeriesE(a) | Cumulative Preferred Stock, SeriesF(a) | Cumulative Preferred Stock, SeriesG(a) | Fixed to Floating Rate NoncumulativePerpetual Preferred Stock, Series I(a) | Noncumulative Perpetual PreferredStock, Series J(a) | Fixed Rate Cumulative PerpetualPreferred Stock, Series K | Total preferred stock | Year ended December 31, | Common dividend payout ratio |


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (Amounts in Millions, Except Per Share Amounts) foreign subsidiaries and thereby postpone their remittance.
We have not provided deferred U. S.  income taxes or foreign withholding taxes on temporary differences resulting from earnings for certain foreign subsidiaries which are permanently reinvested outside the United States.
It is not practicable to determine the amount of unrecognized deferred tax liability associated with these temporary differences.
In 2006 we finalized the 1994-1996 IRS audit cycle.
We agreed to an IRS adjustment to move a tax deduction into later years.
The deferral of this deduction has not impacted our tax provision in 2006.
In addition, in 2006 the IRS completed their field audit of the years 1997 through 2002 and has proposed additionstoourtaxableincome.
Wehaveappealed anumberoftheseproposedadditions.
Further,duringthesecond quarter of 2006, the IRS commenced the audit of the 2003 and 2004 income tax returns.
In 2006, we presented the IRS with an adjustment to our taxable loss for 2004 to claim a deduction for a worthlessness loss of an acquired business which we originally claimed on our 2002 tax return but which the IRS disallowed.
We had previously received a refund of approximately $45.0 from the carryback of the 2002 loss to a previous year.
In 2006, we paid $52.7, including interest, as a result of the disallowance of this loss deduction for 2002.
This loss claim is currently being reviewed by the IRS in conjunction with their audit of the 2003-2004 income tax return.
Also in 2006, a decision was reached to carryback our loss generated in 2005 to 2003.
The taxable income in 2003 would be reduced, with the corollary effect of previously claimed foreign tax credits being displaced.
The displaced foreign tax credits will become part of our foreign tax credit carryforward, on which a full valuation allowance has been recorded.
Accordingly, we have recorded a charge to tax expense in 2006 for this item.
We have various tax years under examination by tax authorities in various countries, such as the United Kingdom, and in various states, such as New York, in which we have significant business operations.
It is not yet known whether these examinations will, in the aggregate, result in our paying additional taxes.
We have established tax reserves that we believe to be adequate in relation to the potential for additional assessments in each of the jurisdictions in which we are subject to taxation.
We regularly assess the likelihood of additional tax assessments in those jurisdictions and adjust our reserves as additional information or events require.
See Note 19 for further information.


| December 31, 2007 Percentage of Total December 31, 2006 Percentage of Total | (dollars in thousands) | IBNR | Reported claims in process | Other benefits payable | Benefits payable, excluding military services | Military services benefits payable | Total benefits payable |


| Year Ended December 31, 2014 2013 2012 | Purchases of investments | Proceeds from disposals of investments | Acquisitions of businesses, equity method investments and nonmarketable securities | Proceeds from disposals of businesses, equity method investments and nonmarketable securities | Purchases of property, plant and equipment | Proceeds from disposals of property, plant and equipment | Other investing activities | Net cash provided by (used in) investing activities |


| Year Ended December 31 2012 over 2011 2011 over 2010 | ($ in millions) | Sales and service revenues | Segment operating income (loss) | As a percentage of segment sales |


Expense relating to unvested restricted stock awards is recognized on a straight-line basis, generally over the applicable service period, and totaled $6.5 million, $9.4 million and $8.7 million for the years ended December 31, 2016, 2015 and 2014, respectively.
Unamortized cost for unvested restricted stock awards, which reflects an estimated forfeiture rate of 5.0% per year over the vesting period, totaled $6.4 million at December 31, 2016, and is expected to be recognized over the remaining weighted-average vesting period of 1.3 years.
The total fair value of restricted stock awards vested during the years ended December 31, 2016, 2015 and 2014 was $9.8 million, $9.4 million and $10.3 million, respectively.
During 2016, 2015 and 2014, employees of People’s United tendered a total of 289,992 shares, 230,459 shares and 229,635 shares of common stock, respectively, in satisfaction of their related minimum tax withholding obligations upon the vesting of restricted stock awards granted in prior periods and/or in payment of the exercise price and satisfaction of their related minimum tax withholding obligations upon the exercise of stock options granted in prior periods.
There is no limit on the number of shares that may be tendered by employees of People’s United in the future for these purposes.
Shares acquired in payment of the stock option exercise price or in satisfaction of minimum tax withholding obligations are not eligible for reissuance in connection with any subsequent grants made pursuant to equity compensation plans maintained by People’s United.
Rather, all shares acquired in this manner are retired by People’s United, resuming the status of authorized but unissued shares of People’s United’s common stock.
The total cost of shares repurchased and retired applicable to restricted stock awards during the years ended December 31, 2016, 2015 and 2014 was $3.4 million, $3.2 million and $3.0 million, respectively.
Directors’ Equity Compensation Plan The People’s United Financial, Inc.  Directors’ Equity Compensation Plan (the “Directors’ Plan”) provides for an annual award of shares of People’s United common stock with a fair value of approximately $95,000 to each non-employee director immediately following each annual meeting of shareholders.
Shares of People’s United common stock issued pursuant to the Directors’ Plan are subject to a one-year vesting period, with no post-vesting transfer restrictions.
A total of 1,192,500 shares of People’s United common stock are reserved for issuance under the Directors’ Plan.


| Years Ended December 31, | 2017 | Advice & Wealth Management | Asset Management | Annuities | Protection | Corporate & Other | Total segment operating earnings | Net realized gains (losses) | Net income (loss) attributable to CIEs | Market impact on variable annuity guaranteed benefits, net | Market impact on IUL benefits, net | Market impact of hedges on investments | Integration and restructuring charges | Pretax income per consolidated statements of operations |


| Year Ended December 31, | 2018 | Operating Data: | Rental income | Property operating income-1 | Operating income | Income from continuing operations | Gain on sale of real estate and change in control of interests, net | Net income | Net income available for common shareholders | Net cash provided by operating activities | Net cash used in investing activities | Net cash (used in) provided by financing activities | Earnings per common share, basic: | Net income available to common shareholders | Weighted average number of common shares, basic | Earnings per common share, diluted: | Net income available to common shareholders | Weighted average number of common shares, diluted | Dividends declared per common share | Other Data: | Funds from operations available to common shareholders-2 | EBITDAre-3 | Ratio of EBITDAre to combined fixed charges and preferred share dividends-3(4) |


Of the $129.8 million, $124.6 million and $137.6 million ending gross unrecognized tax benefit balance, as of April 30, 2010, 2009 and 2008, respectively, $106.8 million, $107.0 million and $119.6 million, respectively, if recognized, would impact the effective rate.
This difference results from adjusting the gross balances for such items as federal, state and foreign deferred items, interest and deductible taxes.
We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $74.5 million within the next twelve months due to anticipated settlements of audit issues and expiring statutes of limitations.
This amount is included in accrued income taxes in our consolidated balance sheet.
The remaining amount is classified as longterm and is included in other noncurrent liabilities in the consolidated balance sheet.
Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense.
The amount of gross interest and penalties accrued on uncertain tax positions during fiscal years 2010, 2009 and 2008 totaled $4.1 million, $15.4 million and $18.6 million, respectively.
The total gross interest and penalties accrued as of April 30, 2010, 2009 and 2008 totaled $39.7 million, $42.4 million and $47.5 million, respectively.
We file a consolidated federal income tax return in the U. S.  and file tax returns in various state and foreign jurisdictions.
The consolidated tax returns for the years 2006 and 2007 are currently under examination by the IRS.
The consolidated tax returns for the years 1999  2005 are at the appellate level.
Tax years prior to 1999 are closed by statute.
Historically, tax returns in various foreign and state jurisdictions are examined and settled upon completion of the examination.
The following tables display the delinquency status of our loans and our nonperforming assets at December 31, 2013 and December 31, 2012, respectively.
Table 63: Analysis of Loan Portfolio (a)


Under the TeamShare Stock Option Plan, full-time employees, excluding key executives, were granted options to purchase the Companys common stock at the market price on the date the options were granted.
The Company authorized 66 million shares for issuance under the plan.
Individual grants generally became exercisable evenly on the third, fourth, and fifth anniversary of the grant date and have a maximum term of 10 years.
Options on 35.3 million shares have been exercised under the plan as of December 31, 2005.
The fair value of the options granted during 2005, 2004 and 2003 was estimated as $5.49 per common share, $5.91 per common share and $5.15 per common share, respectively, on the date of grant using the Black-Scholes option-pricing model with the following assumptions:


| December 31, 2007 December 31, 2006 December 31, 2005 | General partner interest | Limited partner interest | Total ownership interest |


| Year Ended December 31, | 2012 | (In $ millions) | Recoveries | Legal reserve reductions | Total |


| December 31 | ($ in millions) | Senior notes due December 15, 2021, 5.000% | Senior notes due November 15, 2025, 5.000% | Senior notes due December 1, 2027, 3.483% | Mississippi economic development revenue bonds due May 1, 2024, 7.81% | Gulf opportunity zone industrial development revenue bonds due December 1, 2028, 4.55% | Less unamortized debt issuance costs | Total long-term debt |


| In millions of dollars at December 31, 2018 Level 1 Level 2 Level 3 Grossinventory Netting-1 Netbalance | Assets | Federal funds sold and securities borrowed and purchased under agreements to resell | Trading non-derivative assets | Trading mortgage-backed securities | U.S. government-sponsored agency guaranteed | Residential | Commercial | Total trading mortgage-backed securities | U.S. Treasury and federal agency securities | State and municipal | Foreign government | Corporate | Equity securities | Asset-backed securities | Other trading assets-2 | Total trading non-derivative assets | Trading derivatives | Interest rate contracts | Foreign exchange contracts | Equity contracts | Commodity contracts | Credit derivatives | Total trading derivatives | Cash collateral paid-3 | Netting agreements | Netting of cash collateral received | Total trading derivatives | Investments | Mortgage-backed securities | U.S. government-sponsored agency guaranteed | Residential | Commercial | Total investment mortgage-backed securities | U.S. Treasury and federal agency securities | State and municipal | Foreign government | Corporate | Marketable equity securities | Asset-backed securities | Other debt securities | Non-marketable equity securities-4 | Total investments |


| Year ended December 31, Provision for loan losses Provision for lending-related commitments Total provision for credit losses | (in millions) | Investment Bank | Commercial Banking | Treasury & Securities Services | Asset Management | Corporate | Total Wholesale | Retail Financial Services | Card Services – reported | Corporate | Total Consumer | Total provision for credit losses – reported | Credit Services – securitized | Total provision for credit losses – managed |


| In millions of dollars Credit valuation adjustment gain 2009 (loss) 2008 | Non-monoline counterparties | Citigroup (own) | Net non-monoline CVA | Monoline counterparties | Total CVA—derivative instruments |


| In Millions | 2017 | CMS Energy | Long-term liquid disposal and operating and maintenance costs |


REPUBLIC SERVICES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents, trade accounts receivable and derivative instruments.
We place our cash and cash equivalents with high quality financial institutions.
Such balances may be in excess of FDIC insured limits.
To manage the related credit exposure, we continually monitor the credit worthiness of the financial institutions where we have deposits.
Concentrations of credit risk with respect to trade accounts receivable are limited due to the wide variety of customers and markets in which we provide services, as well as the dispersion of our operations across many geographic areas.
We provide services to commercial, industrial, municipal and residential customers in the United States and Puerto Rico.
We perform ongoing credit evaluations of our customers, but do not require collateral to support customer receivables.
We establish an allowance for doubtful accounts based on various factors including the credit risk of specific customers, age of receivables outstanding, historical trends, economic conditions and other information.
No customer exceeded 5% of our outstanding accounts receivable balance at December 31, 2010 or 2009.
Accounts Receivable, Net of Allowance for Doubtful Accounts Accounts receivable represent receivables from customers for collection, transfer, recycling, disposal and other services.
Our receivables are recorded when billed or when the related revenue is earned, if earlier, and represent claims against third parties that will be settled in cash.
The carrying value of our receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value.
Provisions for doubtful accounts are evaluated on a monthly basis and are recorded based on our historical collection experience, the age of the receivables, specific customer information and economic conditions.
We also review outstanding balances on an account-specific basis.
In general, reserves are provided for accounts receivable in excess of ninety days old.
Past due receivable balances are written-off when our collection efforts have been unsuccessful in collecting amounts due.
The following table reflects the activity in our allowance for doubtful accounts for the years ended December 31, 2010, 2009 and 2008:


| At or for the year ended December 31 | Dollars in millions, except as noted | Balance Sheet Highlights | Assets | Loans (a) | Allowance for loan and lease losses | Interest-earning deposits with banks (b) | Investment securities | Loans held for sale (a) | Equity investments (c) | Mortgage servicing rights | Goodwill | Other assets (a) | Noninterest-bearing deposits | Interest-bearing deposits | Total deposits | Borrowed funds (a) (d) | Total shareholders’ equity | Common shareholders’ equity | Accumulated other comprehensive income (loss) | Period-end common shares outstanding (millions) | Client Investment Assets(billions) | Discretionary client assets under management | Nondiscretionary client assets under administration | Total client assets under administration (e) | Brokerage account client assets | Total | Selected Ratios | Net interest margin (f) | Noninterest income to total revenue | Efficiency | Return on | Average common shareholders’ equity (g) | Average assets (g) | Loans to deposits | Dividend payout | Transitional Basel III common equity Tier 1 capital ratio (h) (i) (j) | Transitional Basel III Tier 1 risk-based capital ratio (h) (i) (j) | Pro forma fully phased-in Basel III common equity Tier 1 capital ratio(Non-GAAP) (i) (j) (k) | Basel I Tier 1 common capital ratio (j) | Basel I Tier 1 risk-based capital ratio (j) | Common shareholders’ equity to total assets | Average common shareholders’ equity to average assets | Selected Statistics | Employees | Retail Banking branches | ATMs |


Industry Competitiveness The commercial jet airplane market and the airline industry remain extremely competitive.
Market liberalization in Europe, the Middle East and Asia is enabling low-cost airlines to continue gaining market share.
These airlines are increasing the pressure on airfares.
This results in continued cost pressures for all airlines and price pressure on our products.
Major productivity gains are essential to ensure a favorable market position at acceptable profit margins.
Continued access to global markets remains vital to our ability to fully realize our sales potential and longterm investment returns.
Approximately 91% of Commercial Airplanes total backlog, in dollar terms, is with non-U.
S.  airlines.
We face aggressive international competitors who are intent on increasing their market share.
They offer competitive products and have access to most of the same customers and suppliers.
With government support,Airbus has historically invested heavily to create a family of products to compete with ours.
Regional jet makers Embraer and Bombardier continue to develop and market larger and increasingly more capable airplanes, including Embraers E-195 in the regional jet market and Bombardiers C Series in the 100-150 seat transcontinental market.
Additionally, other competitors from Russia, China and Japan are developing commercial jet aircraft.
Some of these competitors have historically enjoyed access to governmentprovided financial support, including launch aid, which greatly reduces the cost and commercial risks associated with airplane development activities.
This has enabled the development of airplanes without commercial viability; others to be brought to market more quickly than otherwise possible; and many offered for sale below market-based prices.
Many competitors have continued to make improvements in efficiency, which may result in funding product development, gaining market share and improving earnings.
This market environment has resulted in intense pressures on pricing and other competitive factors, and we expect these pressures to continue or intensify in the coming years.
We are focused on improving our products and services and continuing our cost-reduction efforts, which enhances our ability to compete.
We are also focused on taking actions to ensure that Boeing is not harmed by unfair subsidization of competitors.


(1) These calculations assume that: (a) applicable margins remain constant; (b) all variable rate debt is priced at the one-month LIBOR rate in effect as of December 31, 2012; (c) no new hedging transactions are effected; (d) only mandatory debt repayments are made; and (e) no refinancing occurs at debt maturity.
(2) Amount includes the payment for labor claims related to FIS' former item processing and remittance operations in Brazil (see Note 3 to the Consolidated Financial Statements) and amounts due to the Brazilian venture partner.
FIS believes that its existing cash balances, cash flows from operations and borrowing programs will provide adequate sources of liquidity and capital resources to meet FIS’ expected short-term liquidity needs and its long-term needs for the operations of its business, expected capital spending for the next 12 months and the foreseeable future and the satisfaction of these obligations and commitments.
Off-Balance Sheet Arrangements FIS does not have any off-balance sheet arrangements.


All facilities are leased at December 31, 2016.
All other leased facilities with space of less than 25,000 square feet are not listed by location.
In addition to the significant facilities above, we also lease all 30 regional branches, ranging in space from approximately 2,500 to 8,000 square feet.


PNCs Tier 1 risk-based capital ratio was 9.7% at December 31, 2008 compared with 6.8% at December 31, 2007.
The increase in the ratio from December 31, 2007 included the issuance of Tier 1 eligible securities during the first half of 2008 totaling $1.3 billion, including REIT preferred, noncumulative perpetual preferred, and trust preferred securities.
The Perpetual Trust Securities and PNC Capital Trust E Trust Preferred Securities portions of the Off-Balance Sheet Arrangements and VIEs section of this Item 7 and Note 19 Shareholders Equity in Item 8 of this Report have additional information regarding these securities.
In addition, $7.6 billion of preferred stock and a common stock warrant was issued to the US Department of the Treasury under the TARP Capital Purchase Program on December 31, 2008.
Tier 1 risk-based capital further increased as a result of $5.6 billion of common stock issued in the National City acquisition and PNCs assumption of $2.6 billion of Tier 1 qualifying capital securities previously issued by National City.
These increases in capital were partially offset by the deduction of higher acquisition-related intangible assets.
The positive effect on the Tier 1 ratio of the net increase in capital was somewhat offset by an increase in riskweighted assets primarily related to acquisitions, including National City.
The leverage ratio at December 31, 2008 reflected the favorable impact on Tier 1 risk-based capital from the issuance of securities under TARP and the issuance of PNC common stock in connection with the National City acquisition, both of which occurred on December 31, 2008.
In addition, the ratio as of that date did not reflect any impact of National City on PNCs adjusted average total assets.
PNCs tangible common equity ratio was 2.9% at December 31, 2008 compared with 4.7% at December 31, 2007.
The decrease in the ratio from the prior year was the result of the decline in the value of the securities available for sale portfolio and the value of assets in our pension plan.
We expect PNCs tangible common equity ratio to be less sensitive to the impact of widening credit spreads on accumulated other comprehensive loss going forward primarily due to the composition of the securities available for sale portfolio acquired from National City and a substantially higher level of common equity in the combined company.
The access to, and cost of, funding new business initiatives including acquisitions, the ability to engage in expanded business activities, the ability to pay dividends, the level of deposit insurance costs, and the level and nature of regulatory oversight depend, in part, on a financial institutions capital strength.
At December 31, 2008 and December 31, 2007, each of our domestic bank subsidiaries was considered well capitalized based on US regulatory capital ratio requirements.
See the Supervision And Regulation section of Item 1 of this Report and Note 23 Regulatory Matters in the Notes To Consolidated Financial Statements in Item 8 of this Report for additional information.
We believe our bank subsidiaries will continue to meet these requirements in 2009.


| Pension Plans Postretirement  MedicalPlan | 2013 | (In millions) | Service cost | Interest cost | Expected return on plan assets | Amortization of unrecognized net actuarial losses | Settlement loss | Curtailment loss | Special termination benefit recognized | Net periodic benefit cost |


| 2013 2012 2011 | Industrial | Office | Medical Office | Non-reportable Rental Operations segments | Total |


| Cash Instruments at Fair Value as of December 2014 | $ in millions | Assets | Commercial paper, certificates of deposit, time deposits and other money market instruments | U.S. government and federal agency obligations | Non-U.S. government and agency obligations | Loans and securities backed by commercial real estate | Loans and securities backed by residential real estate | Bank loans and bridge loans | Corporate debt securities | State and municipal obligations | Other debt obligations | Equities and convertible debentures | Commodities | Subtotal | Investments in funds measured at NAV | Total cash instrument assets | Liabilities | U.S. government and federal agency obligations | Non-U.S. government and agency obligations | Loans and securities backed by commercial real estate | Bank loans and bridge loans | Corporate debt securities | Other debt obligations | Equities and convertible debentures | Commodities | Total cash instrument liabilities |


| (Dollars in millions) 2001-1 2000 1999-2 Change 00-01 Adjusted Change 00-01-3 | Servicing fees | Management fees | Foreign exchange trading | Processing fees and other | Total fee revenue |


Assets Supporting Experience-Rated Contractholder Liabilities For information regarding the composition of “Assets supporting experience-rated contractholder liabilities,” see Note 3 to the Consolidated Financial Statements.


From time to time, the Company is involved in legal and administrative proceedings and claims of various types.
While any litigation contains an element of uncertainty, management, in consultation with the Company’s general counsel, presently believes that the outcome of each such other proceedings or claims which are pending or known to be threatened, or all of them combined, will not have a material adverse effect on the Company.7.
Stock Option and Purchase Plans All stock options granted by the Company under the below-described plans were granted at the fair value of the underlying common stock at the date of grant.
Outstanding stock options, if not exercised, expire 10 years from the date of grant.
The 1992 Combination Stock Option Plan (the Combination Plan), as amended, was adopted in September 1992 as a combination and restatement of the Company’s then outstanding Incentive Stock Option Plan and Nonqualified Plan.
A total of 2,670,859 options were awarded from the Combination Plan during its ten-year restatement term that ended on May 1, 2002.
As of March 31, 2003, 1,286,042 of these options remain outstanding and eligible for future exercise.
These options are held by Company employees and generally become exercisable ratably over five years.
The 1998 Equity Incentive Plan, (the Equity Incentive Plan), was adopted by the Company in August 1998.
The Equity Incentive Plan provides for grants of options to key employees, directors, advisors and consultants as either incentive stock options or nonqualified stock options as determined by the Company’s Board of Directors.
A maximum of 1,000,000 shares of common stock may be awarded under this plan.
Options granted under the Equity Incentive Plan are exercisable at such times and subject to such terms as the Board of Directors may specify at the time of each stock option grant.
Options outstanding under the Equity Incentive Plan have vesting periods of 3 to 5 years from the date of grant.
The 2000 Stock Incentive Plan, (the 2000 Plan), was adopted by the Company in August 2000.
The 2000 Plan provides for grants of options to key employees, directors, advisors and consultants to the Company or its subsidiaries as either incentive or nonqualified stock options as determined by the Company’s Board of Directors.
Up to 1,400,000 shares of common stock may be awarded under the 2000 Plan and are exercisable at such times and subject to such terms as the Board of Directors may specify at the time of each stock option grant.
Options outstanding under the 2000 Plan generally vested 4 years from the date of grant.
The Company has a nonqualified stock option plan for non-employee directors (the Directors’ Plan).
The Directors’ Plan, as amended, was adopted in July 1989 and provides for grants of options to purchase shares of the Company’s common stock to non-employee Directors of the Company.
Up to 400,000 shares of common stock may be awarded under the Directors’ Plan.
Options outstanding under the Directors’ Plan have vesting periods of 1 to 5 years from the date of grant.


Including the restricted stock, performance units and TSR units described above, the total fair value of share-based awards vested during the years ended May 31, 2016, 2015 and 2014 was $17.4 million, $15.0 million and $28.7 million, respectively.
For these share-based awards, we recognized compensation expense of $28.8 million, $19.8 million and $28.2 million in the years ended May 31, 2016, 2015 and 2014, respectively.
As of May 31, 2016, there was $42.6 million of unrecognized compensation expense related to unvested share-based awards that we expect to recognize over a weighted-average period of 1.9 years.
Our share-based award plans provide for accelerated vesting under certain conditions.
Employee Stock Purchase Plan We have an employee stock purchase plan under which the sale of 4.8 million shares of our common stock has been authorized.
Employees may designate up to the lesser of $25,000 or 20% of their annual compensation for the purchase of our common stock.
The price for shares purchased under the plan is 85% of the market value on


Electric Peak Demand The electric peak demand in O&Rs service area occurs during the summer air conditioning season.
O&Rs highest service area peak demand, which occurred in 2006, was 1,617 MW.
The 2013 service area peak demand, which occurred on July 18, 2013, was 1,561 MW.
The 2013 peak demand included an estimated 702 MW for O&Rs full-service customers and 859 MW for customers participating in its electric retail access program.
The NYISO invoked demand reduction programs on July 18, 2013, as it had on peak demand days in some previous years.
Design weather for the electric system is a standard to which the actual peak demand is adjusted for evaluation and planning purposes.
Since the majority of demand reduction programs are invoked only in specific circumstances, design conditions do not include these programs potential impact.
However, the O&R forecasted peak demand at design conditions does include the impact of permanent demand reduction programs.
The company estimates that, under design weather conditions, the 2014 service area peak demand will be 1,630 MW, including an estimated 701 MW for its full-service customers and 929 MW for its electric retail access customers.
The company forecasts average annual growth of the peak electric demand in the companys service area over the next five years at design conditions to be approximately 0.9 percent per year.


Other income (expense)  net was expense of $0.4 million in 2012 and $1.0 million in 2011.
Other income (expense)  net primarily includes interest income and hedging and currency exchange rate transaction gains and losses.
See Note 16 to the Consolidated Financial Statements for information on other income (expense)  net.
Snap-ons effective income tax rate on earnings attributable to Snap-on was 32.8% in 2012 and 33.0% in 2011.
See Note 8 to the Consolidated Financial Statements for further information on income taxes.
Net earnings attributable to Snap-on in 2012 were $306.1 million or $5.20 per diluted share.
Net earnings attributable to Snap-on in 2011 of $276.3 million, or $4.71 per diluted share, included an $11.1 million after-tax gain, or $0.19 per diluted share, from the arbitration settlement with CIT.
Exit and Disposal Activities Snap-on recorded costs of $16.5 million for exit and disposal activities in 2012 as compared to $12.2 million of such costs in 2011.
See Note 7 to the Consolidated Financial Statements for information on Snap-ons exit and disposal activities.
Segment Results Snap-ons business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance.
Snap-ons reportable business segments are: (i) the Commercial & Industrial Group; (ii) the Snap-on Tools Group; (iii) the Repair Systems & Information Group; and (iv) Financial Services.
The Commercial & Industrial Group consists of business operations serving a broad range of industrial and commercial customers worldwide, primarily through direct and distributor channels.
The Snap-on Tools Group consists of business operations primarily serving automotive service technicians through the companys worldwide mobile tool distribution channel.
The Repair Systems & Information Group consists of business operations serving other professional vehicle repair customers worldwide, primarily owners and managers of independent repair shops and original equipment manufacturer (OEM) dealership service and repair shops, through direct and distributor channels.
Financial Services consists of the business operations of Snap-ons finance subsidiaries.
Snap-on evaluates the performance of its operating segments based on segment revenues, including both external and intersegment net sales, and segment operating earnings.
Snap-on accounts for intersegment sales and transfers based primarily on standard costs with reasonable mark-ups established between the segments.
Identifiable assets by segment are those assets used in the respective reportable segments operations.
Corporate assets consist of cash and cash equivalents (excluding cash held at Financial Services), deferred income taxes, pension assets and certain other assets.
All significant intersegment amounts are eliminated to arrive at Snap-ons consolidated financial results.


Stock Repurchases Our Board of Directors previously authorized stock repurchases of up to $1.0 billion of our outstanding Class A common stock through and including December 31, 2016.
On November 2, 2016, our Board of Directors extended this authorization such that we are currently authorized to repurchase up to $1.0 billion of our outstanding Class A common stock through and including December 31, 2017.
As of December 31, 2016, we may repurchase up to $1.0 billion of our Class A common stock under this program.
During the years ended December 31, 2016, 2015 and 2014, there were no repurchases of our Class A common stock.


VERTEX PHARMACEUTICALS INCORPORATED Notes to Consolidated Financial Statements (Continued) I.  Altus Investment (Continued) of the offering, held 450,000 shares of redeemable preferred stock, which are not convertible into common stock and which are redeemable for $10.00 per share plus annual dividends of $0.50 per share, which have been accruing since the redeemable preferred stock was issued in 1999, at Vertex’s option on or after December 31, 2010, or by Altus at any time.
The Company was restricted from trading Altus securities for a period of six months following the initial public offering.
When the Altus securities trading restrictions expired, the Company sold the 817,749 shares of Altus common stock for approximately $11.7 million, resulting in a realized gain of approximately $7.7 million in August 2006.
Additionally when the restrictions expired, the Company began accounting for the Altus Warrants as derivative instruments under the Financial Accounting Standards Board Statement No.
FAS 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”).
In accordance with FAS 133, in the third quarter of 2006, the Company recorded the Altus Warrants on its consolidated balance sheet at a fair market value of $19.1 million and recorded an unrealized gain on the fair market value of the Altus Warrants of $4.3 million.
In the fourth quarter of 2006 the Company sold the Altus Warrants for approximately $18.3 million, resulting in a realized loss of $0.7 million.
As a result of the Company’s sales of Altus common stock and Altus Warrrants in 2006, the Company recorded a realized gain on a sale of investment of $11.2 million.
In accordance with the Company’s policy, as outlined in Note B, “Accounting Policies,” the Company assessed its investment in Altus, which it accounts for using the cost method, and determined that there had not been any adjustments to the fair values of that investment that would require the Company to write down the investment basis of the asset, in 2005 and 2006.
The Company’s cost basis carrying value in its outstanding equity and warrants of Altus was $18.9 million at December 31, 2005.


segment includes AWE and our share of earnings for our investment in ULA, which provides expendable launch services to the U. S.  Government.
Space Systems operating results included the following (in millions):


| Successor Predecessor | YearEnded  December 31, 2010 | Automotive cost of sales | Automotive gross margin |


| 2011 2010 2009 2008 | $9,074 |


| As of February 28 | (In thousands) | Land | Land held for sale | Land held for development | Buildings | Capital leases | Leasehold improvements | Furniture, fixtures, and equipment | Construction in progress | Total property and equipment | Less accumulated depreciation and amortization | Property and equipment, net |


ANALOG DEVICES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued) of global business, there are many transactions and calculations where the ultimate tax outcome is uncertain.
Some of these uncertainties arise as a consequence of cost reimbursement arrangements among related entities.
Although the Company believes its estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different than that which is reflected in the historical income tax provisions and accruals.
Such differences could have a material impact on the Companys income tax provision and operating results in the period in which such determination is made.
On November 4, 2007 (the first day of its 2008 fiscal year), the Company adopted new accounting principles on accounting for uncertain tax positions.
These principles require companies to determine whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any benefit can be recorded in the financial statements.
An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.
There were no changes to the Companys liabilities for uncertain tax positions as a result of the adoption of these provisions.
As of October 30, 2010 and October 31, 2009, the Company had a liability of $18.4 million and $18.2 million, respectively, for gross unrealized tax benefits, all of which, if settled in the Companys favor, would lower the Companys effective tax rate in the period recorded.
In addition, as of October 30, 2010 and October 31, 2009, the Company had a liability of approximately $9.8 million and $8.0 million, respectively, for interest and penalties.
The total liability as of October 30, 2010 and October 31, 2009 of $28.3 million and $26.2 million, respectively, for uncertain tax positions is classified as non-current, and is included in other non-current liabilities, because the Company believes that the ultimate payment or settlement of these liabilities will not occur within the next twelve months.
Prior to the adoption of these provisions, these amounts were included in current income tax payable.
The Company includes interest and penalties related to unrecognized tax benefits within the provision for taxes in the condensed consolidated statements of income, and as a result, no change in classification was made upon adopting these provisions.
The condensed consolidated statements of income for fiscal years 2010, 2009 and 2008 include $1.8 million, $1.7 million and $1.3 million, respectively, of interest and penalties related to these uncertain tax positions.
Due to the complexity associated with its tax uncertainties, the Company cannot make a reasonably reliable estimate as to the period in which it expects to settle the liabilities associated with these uncertain tax positions.


Employee Benefit Plans Stock-Based Compensation During 2016, EOG maintained various stock-based compensation plans as discussed below.
EOG recognizes compensation expense on grants of stock options, SARs, restricted stock and restricted stock units, performance units and performance stock, and grants made under the EOG Resources, Inc.
Employee Stock Purchase Plan (ESPP).
Stock-based compensation expense is calculated based upon the grant date estimated fair value of the awards, net of forfeitures, based upon EOG's historical employee turnover rate.
Compensation expense is amortized over the shorter of the vesting period or the period from date of grant until the date the employee becomes eligible to retire without company approval.
Weighted average fair values and valuation assumptions used to value performance unit and performance stock grants during the years ended December 31, 2016, 2015 and 2014 were as follows:


NOTE 15 NET UNREALIZED INVESTMENT GAINS Under SFAS No.115, Accounting for Certain Investments in Debt and Equity Securities (SFAS No.115), availablefor-sale securities are recorded at market value.
Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a component of stockholders equity until realized.
The Companys investments subject to the provisions of SFAS No.115 are treated as available-forsale and, accordingly, the applicable investments have been adjusted to market value with a corresponding adjustment, net of tax, to net unrealized investment gains in accumulated other comprehensive income.
Included in accumulated other comprehensive income was an unrealized investment gain (net of deferred taxes) of $0.5 million and $0.4 million at June 30, 2006 and 2005, respectively.


z Machinery, Energy & Transportation (ME&T) operating cash flow for 2018 was about $6.3 billion, more than sufficient to cover capital expenditures and dividends.
ME&T operating cash flow for 2017 was about $5.5 billion.
Restructuring Costs In recent years, we have incurred substantial restructuring costs to achieve a flexible and competitive cost structure.
During 2018, we incurred $386 million of restructuring costs related to restructuring actions across the company.
During 2017, we incurred $1.256 billion of restructuring costs with about half related to the closure of the facility in Gosselies, Belgium, and the remainder related to other restructuring actions across the company.
Although we expect restructuring to continue as part of ongoing business activities, restructuring costs should be lower in 2019 than 2018.
Notes: z Glossary of terms included on pages 33-34; first occurrence of terms shown in bold italics.
z Information on non-GAAP financial measures is included on pages 42-43.
Recognition of finance revenue and rental revenue is suspended and the account is placed on non-accrual status when management determines that collection of future income is not probable (generally after 120 days past due).
Recognition is resumed, and previously suspended income is recognized, when the account becomes current and collection of remaining amounts is considered probable.
See Note 7 for more information.
Revenues are presented net of sales and other related taxes.3.
Stock-Based Compensation Our stock-based compensation plans primarily provide for the granting of stock options, stock-settled stock appreciation rights (SARs), restricted stock units (RSUs) and performance-based restricted stock units (PRSUs) to Officers and other key employees, as well as non-employee Directors.
Stock options permit a holder to buy Caterpillar stock at the stocks price when the option was granted.
SARs permit a holder the right to receive the value in shares of the appreciation in Caterpillar stock that occurred from the date the right was granted up to the date of exercise.
RSUs are agreements to issue shares of Caterpillar stock at the time of vesting.
PRSUs are similar to RSUs and include performance conditions in the vesting terms of the award.
Our long-standing practices and policies specify that all stockbased compensation awards are approved by the Compensation Committee (the Committee) of the Board of Directors.
The award approval process specifies the grant date, value and terms of the award.
The same terms and conditions are consistently applied to all employee grants, including Officers.
The Committee approves all individual Officer grants.
The number of stock-based compensation award units included in an individuals award is determined based on the methodology approved by the Committee.
The exercise price methodology?approved by the Committee is the closing price of the Company stock on the date of the grant.
In June of 2014, shareholders approved the Caterpillar Inc.  2014 Long-Term Incentive Plan (the Plan) under which all new stock-based compensation awards are granted.
In June of 2017, the Plan was amended and restated.
The Plan initially provided that up to 38,800,000 Common Shares would be reserved for future issuance under the Plan, subject to adjustment in certain events.
Subsequent to the shareholder approval of the amendment and restatement of the Plan, an additional 36,000,000 Common Shares became available for all awards under the Plan.
Common stock issued from Treasury stock under the plans totaled 5,590,641 for 2018, 11,139,748 for 2017 and 4,164,134 for 2016.
The total number of shares authorized for equity awards under the amended and restated Caterpillar Inc.  2014 Long-Term Incentive Plan is 74,800,000, of which 44,139,162 shares remained available for issuance as of December?31,?2018.
Stock option and RSU awards generally vest according to a threeyear graded vesting schedule.
One-third of the award will become vested on the first anniversary of the grant date, one-third of the award will become vested on the second anniversary of the grant date and one-third of the award will become vested on the third anniversary of the grant date.
PRSU awards generally have a threeyear performance period and cliff vest at the end of the period based upon achievement of performance targets established at the time of grant.
Upon separation from service, if the participant is 55 years of age or older with more than five years of service, the participant meets the criteria for a Long Service Separation.
 Award terms for awards granted in 2016 allow for immediate vesting upon separation of all outstanding options and RSUs with no requisite service period for employees who meet the criteria for a Long Service Separation.
 Compensation expense for the 2016 grant was fully recognized immediately on the grant date for these employees.
Award terms for the 2018 and 2017 grants allow for continued vesting as of each vesting date specified in the award document for employees who meet the criteria for a Long Service Separation and fulfill a requisite service period of six months.
Compensation expense for eligible employees for the 2018 and 2017 grants was recognized over the period from the grant date to the end date of the six-month requisite service period.
For employees who become eligible for a Long Service Separation subsequent to the end date of the six-month requisite service period and prior to the completion of the vesting period, compensation expense is recognized over the period from the grant date to the date eligibility is achieved.
At grant, SARs and option awards have a term life of ten years.
For awards granted prior to 2016, if the Long Service Separation criteria are met, the vested options/SARs have a life that is the lesser of ten years from the original grant date or five years from the separation date.
For awards granted in 2018, 2017, and 2016, the vested options have a life equal to ten years from the original grant date.
Prior to 2017, all outstanding PRSU awards granted to employees eligible for a Long Service Separation may vest at the end of the performance period based upon achievement of the performance target.
Compensation expense for the 2016 PRSU grant was fully recognized immediately on the grant date for these employees.
For PRSU awards granted in 2018 and 2017, only a prorated number of shares may vest at the end of the performance period based upon achievement of the performance target, with the proration based upon the number of months of continuous employment during the three-year performance period.
Employees with a Long Service Separation must also fulfill a six-month requisite service period in order to be eligible for the prorated vesting of outstanding PRSU awards granted in 2018 and 2017.
Compensation expense for the 2018 and 2017 PRSU grants is being recognized on a straight-line basis over the three-year performance period for all participants.
Accounting guidance on share-based payments requires companies to estimate the fair value of options/SARs on the date of grant using an option-pricing model.
The fair value of our option/SAR grants was estimated using a lattice-based option-pricing model.
The latticebased option-pricing model considers a range of assumptions related to volatility, risk-free interest rate and historical employee behavior.
Expected volatility was based on historical Caterpillar stock price movement and current implied volatilities from traded options on Caterpillar stock.
The risk-free interest rate was based on U. S.  Treasury security yields at the time of grant.
The weighted-average dividend yield was based on historical information.
The expected life was determined from the lattice-based model.
The latticebased model incorporated exercise and post vesting forfeiture assumptions based on analysis of historical data.
The following table provides the assumptions used in determining the fair value of the Option/SAR awards for the years ended December?31, 2018, 2017 and 2016, respectively.


| Entergy Arkansas Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy | (In Thousands) | 2016: | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | 2015: | First Quarter | Second Quarter | Third Quarter | Fourth Quarter |


The expected term is generally derived from Company experience.
However, expected terms are determined based on the simplified method as permitted under the ASC 718 Stock Compensation topic when company experience is insufficient.
The Torchmark Corporation 2011 Incentive Plan replaced all previous plans and allows for option grants for employees with a ten-year contractual term which vest over five years in addition to seven-year grants which vest over three years as permitted by the previous plans.
Director grants vest over six months.
The Company has sufficient experience with seven-year grants that vest in three years, but insufficient historical experience with five-year vesting.
Therefore, Torchmark has used the simplified method to determine the expected term for the ten-year grants with fiveyear vesting and will do so until adequate experience is developed.
Volatility and risk-free interest rates are assumed over a period of time consistent with the expected term of the option.
Volatility is measured on a historical basis.
Monthly data points are utilized to derive volatility for periods greater than three years.
Expected dividend yield is based on current dividend yield held constant over the expected term.
Once the fair value of an option has been determined, it is amortized on a straight-line basis over the employees service period for that grant (from the grant date to the date the grant is fully vested).
Expenses for restricted stock and restricted stock units are based on the grant date fair value allocated on a straight-line basis over the service period.
Performance share expense is recognized based on managements estimate of the probability of meeting the metrics identified in the performance share award agreement, assigned to each service period as these estimates develop.
Torchmark management views all stock-based compensation expense as a corporate or Parent Company expense and, therefore, presents it as such in its segment analysis (See Note 14Business Segments).
It is included in Other operating expense in the Consolidated Statements of Operations.


Alternative Sources of Liquidity In addition to the sources of liquidity discussed above, and asset-based financing as discussed below, Prudential Financial and certain subsidiaries have access to other sources of liquidity, including membership in the Federal Home Loan Banks, commercial paper programs, and a put option agreement.
The Company also maintains syndicated, unsecured committed credit facilities as an alternative source of liquidity.
In September 2016, PHJ, a wholly-owned subsidiary of Prudential Financial, entered into a ￥100 billion three-year syndicated, unsecured committed credit facility.
See Note 14 to our Consolidated Financial Statements for more information on these sources of liquidity.


The Company recorded equity earnings, net of taxes, related to Ilim of $290 million in 2018, compared with earnings of $183 million in 2017, and $199 million in 2016.
Operating results recorded in 2018 included an after-tax non-cash foreign exchange loss of $82 million, compared with an after-tax foreign exchange gain of $15 million in 2017 and an after-tax foreign exchange gain of $25 million in 2016, primarily on the remeasurement of Ilim's U. S.  dollar denominated net debt.
Ilim delivered outstanding performance in 2018, driven largely by higher price realization and strong demand.
Sales volumes for the joint venture increased year over year for shipments to China of softwood pulp and linerboard, but were offset by decreased sales of hardwood pulp to China.
Sales volumes in the Russian market increased for softwood pulp and hardwood pulp, but decreased for linerboard.
Average sales price realizations were significantly higher in 2018 for sales of softwood pulp, hardwood pulp and linerboard to China and other export markets.
Average sales price realizations in Russian markets increased year over year for all products.
Input costs were higher in 2018, primarily for wood, fuel and chemicals.
Distribution costs were negatively impacted by tariffs and inflation.
The Company received cash dividends from the joint venture of $128 million in 2018, $133 million in 2017 and $58 million in 2016.
Entering the first quarter of 2019, sales volumes are expected to be lower than in the fourth quarter of 2018, due to the seasonal slowdown in China and fewer trading days.
Based on pricing to date in the current quarter, average sales prices are expected to decrease for hardwood pulp, softwood pulp and linerboard to China.
Input costs are projected to be relatively flat, while distribution costs are expected to increase.


| Declaration Date Record Date Payment Date Dividend per Share | January 16, 2009 | October 6, 2008 | July 23, 2008 | April 23, 2008 | January 23, 2008 |


| Accumulated Other Comprehensive Income (Loss) | Foreign Currency Translation Adjustments | (in millions) | Balance, December 31, 2004 | Change in component during year | Balance, December 31, 2005 | Change in component during year | Impact of adoption of SFAS No. 158-2 | Balance, December 31, 2006 | Change in component during year | Balance, December 31, 2007 |


| 2004 2003 2002 | Net income available for common shares | Add back (deduct): | Depreciation and amortization | Share of adjustments for unconsolidated companies | Earnings from depreciated property sales | Minority interest share of add-backs | Funds From Operations |


Notes to Consolidated Financial Statements Note 11.
Income Taxes – (Continued) The federal income tax return for 2006 is subject to examination by the IRS.
In addition for 2007 and 2008, the IRS has invited the Company to participate in the Compliance Assurance Process (“CAP”), which is a voluntary program for a limited number of large corporations.
Under CAP, the IRS conducts a real-time audit and works contemporaneously with the Company to resolve any issues prior to the filing of the tax return.
The Company has agreed to participate.
The Company believes this approach should reduce tax-related uncertainties, if any.
The Company and/or its subsidiaries also file income tax returns in various state, local and foreign jurisdictions.
These returns, with few exceptions, are no longer subject to examination by the various taxing authorities before 2000.
As discussed in Note 1, the Company adopted the provisions of FIN No.48, “Accounting for Uncertainty in Income Taxes,” on January 1, 2007.
As a result of the implementation of FIN No.48, the Company recognized a decrease to beginning retained earnings on January 1, 2007 of $37 million.
The total amount of unrecognized tax benefits as of the date of adoption was approximately $70 million.
Included in the balance at January 1, 2007, were $51 million of tax positions that if recognized would affect the effective tax rate.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


(1) Primarily includes Property and Casualty Insurance, Prudential Securities Capital Markets and exchange shares previously held by Prudential Equity Group.
Financial Advisory In 2008, we classified our Financial Advisory business as a divested business, reflecting our intention to exit this business.
This business consists of our former investment in the Wachovia Securities joint venture, in addition to expenses relating to obligations and costs we retained in connection with the businesses we contributed to the joint venture, primarily for litigation and regulatory matters.
On December 31, 2009, we completed the sale of our minority joint venture interest in Wachovia Securities, which includes Wells Fargo Advisors, to Wells Fargo.
At the closing, we received $4.5 billion in cash as the purchase price of our joint venture interest and de-recognized the carrying value related to our investment in the joint venture.
Results for 2009 include the associated pre-tax gain on the sale of $2.247 billion, which is reflected in Equity in earnings of operating joint ventures, net of taxes in our Consolidated Statements of Operations.
Results for 2009 also include certain one-time costs related to the sale of the joint venture interest of $104 million, for pre-tax compensation costs and costs related to increased contributions to our charitable foundation.
For more information on our former investment in the Wachovia Securities joint venture, including the lookback option, see Note 7 to the Consolidated Financial Statements, as well as Liquidity and Capital ResourcesLiquidity and Capital Resources of SubsidiariesDomestic Insurance Subsidiaries Prudential Securities Group.
 On August 15, 2008, Wachovia announced that it had reached an agreement in principle for a global settlement of investigations concerning the underwriting, sale and subsequent auction of certain auction rate securities by subsidiaries of Wachovia Securities and had recorded an increase to legal reserves.
Our recorded share of pre-tax earnings from the joint venture for the year ended December 31, 2008 included $355 million related to the impact of this item on our share of the equity earnings of the joint venture.


| Year Ended December | $ in millions | Compensation and benefits | Brokerage, clearing, exchange anddistribution fees | Market development | Communications and technology | Depreciation and amortization | Occupancy | Professional fees | Insurance reserves1 | Other expenses2 | Total non-compensation expenses | Total operating expenses | Total staff at period-end |


The significant unobservable inputs used in amounts reported above are discounted future cash flows of the projects.
We use present value techniques based on discounting the estimated cash flows using a rate commensurate with the inherent risk associated with the assets and related estimated cash flow streams.
Discount rates applied to the estimated future cash flows of our homebuilding assets for 2010 ranged from 15 percent to 18 percent.
Discount rates applied to the estimated future cash flows of our homebuilding assets for 2009 ranged from 12 percent to 25 percent.
During 2008, we recognized $69 million of charges for the impairment of interest that previously was capitalized on Real Estate assets.
Write-off of Pre-Acquisition Costs and Abandoned Community Costs In addition to owning land and residential lots, we also have option agreements to purchase land and lots at a future date.
As of December 31, 2010, we have option agreements on approximately 63,000 residential lots.
When the economics of a project no longer support acquisition of the land or lots under option, we may elect not to move forward with the acquisition.
Option deposits and capitalized engineering and related costs associated with the assets under option may be forfeited at that time.
Charges for such forfeitures are reported as write-off of pre-acquisition costs.
Also included in 2009 are charges for abandoned community costs, which include the write-off of unamortized costs related to projects that have been closed prior to full build-out or related to model complex costs written off due to decisions to sell active communities in their current condition or to change home styles offered within a community.
Goodwill Our impairments of goodwill were primarily related to the following: ?2009 — the goodwill associated with the hardwoods and industrial wood products reporting unit.
?2008 — as a result of the collapse of financial markets in fourth quarter 2008, accompanied by accelerated deterioration of housing markets and declining demand for pulp products in emerging Asian markets, the estimated fair value of certain of our reporting units fell below the carrying value of those units.
This triggered the goodwill impairments in our Wood Products segment of $744 million and $94 million in our Cellulose Fibers segment during fourth quarter.
Impairments of Investments and Other Related Charges Impairments of investments and other related charges relate to loans and investments in unconsolidated entities.
NOTE 20: OTHER OPERATING COSTS (INCOME), NET These costs (income): ?include both recurring and occasional income and expense items and ?fluctuate from year to year.


| (in millions) 2011 2012 2013 2014 2015 Thereafter Total | Term loan | Senior notes | $500 |


| 2014 2013 2012 | Impairment of property carrying values * -1(2)(3) | Investments in other real estate investments* -4 | Marketable securities and other investments* -5 | Total Impairment charges included in operating expenses | Cumulative foreign currency translation loss included in discontinued operations -6 | Impairment of property carrying values included in discontinued operations ** | Total gross impairment charges | Noncontrolling interests | Income tax benefit included in discontinued operations | Income tax benefit | Total net impairment charges |


We enter into foreign currency forward contracts with major financial institutions with investment grade credit ratings and are exposed to credit losses in the event of non-performance by these financial institutions.
This credit risk is generally limited to the unrealized gains in the foreign currency forward contracts.
However, we monitor the credit quality of these financial institutions and consider the risk of counterparty default to be minimal.
Although we have entered into foreign currency forward contracts to minimize some of the impact of foreign currency exchange rate fluctuations on future cash flows, we cannot be assured that foreign currency exchange rate fluctuations will not have a material adverse impact on our financial condition and results of operations.
Inflation Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results.
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase with these increased costs.


| December 31 | 2015 | (In thousands) | Commitments to extend credit | Home equity lines of credit | Commercial real estate loans to be sold | Other commercial real estate | Residential real estate loans to be sold | Other residential real estate | Commercial and other | Standby letters of credit | Commercial letters of credit | Financial guarantees and indemnification contracts | Commitments to sell real estate loans |


THE GOLDMAN SACHS GROUP, INC.  AND SUBSIDIARIES Notes to Consolidated Financial Statements Allowance for Losses on Loans and Lending Commitments The firm’s allowance for loan losses is comprised of specific loan-level reserves, portfolio level reserves, and reserves on PCI loans as described below: ‰ Specific loan-level reserves are determined on loans (excluding PCI loans) that exhibit credit quality weakness and are therefore individually evaluated for impairment.
‰ Portfolio level reserves are determined on loans (excluding PCI loans) not deemed impaired by aggregating groups of loans with similar risk characteristics and estimating the probable loss inherent in the portfolio.
‰ Reserves on PCI loans are recorded when it is determined that the expected cash flows, which are reassessed on a quarterly basis, will be lower than those used to establish the current effective yield for such loans or pools of loans.
If the expected cash flows are determined to be significantly higher than those used to establish the current effective yield, such increases are initially recognized as a reduction to any previously recorded allowances for loan losses and any remaining increases are recognized as interest income prospectively over the life of the loan or pools of loans as an increase to the effective yield.
The allowance for loan losses is determined using various inputs, including industry default and loss data, current macroeconomic indicators, borrower’s capacity to meet its financial obligations, borrower’s country of risk, loan seniority and collateral type.
Management’s estimate of loan losses entails judgment about loan collectability at the reporting dates, and there are uncertainties inherent in those judgments.
While management uses the best information available to determine this estimate, future adjustments to the allowance may be necessary based on, among other things, changes in the economic environment or variances between actual results and the original assumptions used.
Loans are charged off against the allowance for loan losses when deemed to be uncollectible.
As of December 2016 and December 2015, substantially all of the firm’s loans receivable were evaluated for impairment at the portfolio level.
The firm also records an allowance for losses on lending commitments that are held for investment and accounted for on an accrual basis.
Such allowance is determined using the same methodology as the allowance for loan losses, while also taking into consideration the probability of drawdowns or funding, and is included in “Other liabilities and accrued expenses.
” As of December 2016 and December 2015, substantially all of such lending commitments were evaluated for impairment at the portfolio level.


| Operating Leases | 2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Total future minimum lease payments |


| (In millions) 2008 2007 2006 | Sales and transfers of oil and gas produced, net of production, transportation and administrative costs | Net changes in prices and production, transportation and administrative costs related to future production | Extensions, discoveries and improved recovery, less related costs | Development costs incurred during the period | Changes in estimated future development costs | Revisions of previous quantity estimates | Net changes in purchases and sales of minerals in place | Accretion of discount | Net change in income taxes | Timing and other | Net change for the year | Beginning of the year | End of year | Net change for the year from discontinued operations |


| Interest Rates | Weighted | Range | (In millions) | Senior notes | Repurchase agreements | Surplus notes | Fixed rate notes | Other notes with varying interest rates | Capital lease obligations | Total long-term debt | Total short-term debt | Total |


M&T BANK CORPORATION AND SUBSIDIARIES Notes to Financial Statements  (Continued) Other commitments and contingencies As described in note 20, in the normal course of business, various commitments and contingent liabilities are outstanding, such as loan commitments, credit guarantees and letters of credit.
The Companys pricing of such financial instruments is based largely on credit quality and relationship, probability of funding and other requirements.
Loan commitments often have fixed expiration dates and contain termination and other clauses which provide for relief from funding in the event of significant deterioration in the credit quality of the customer.
The rates and terms of the Companys loan commitments, credit guarantees and letters of credit are competitive with other financial institutions operating in markets served by the Company.
The Company believes that the carrying amounts, which are included in other liabilities, are reasonable estimates of the fair value of these financial instruments.
The Company does not believe that the estimated information presented herein is representative of the earnings power or value of the Company.
The preceding analysis, which is inherently limited in depicting fair value, also does not consider any value associated with existing customer relationships nor the ability of the Company to create value through loan origination, deposit gathering or fee generating activities.
Many of the estimates presented herein are based upon the use of highly subjective information and assumptions and, accordingly, the results may not be precise.
Management believes that fair value estimates may not be comparable between financial institutions due to the wide range of permitted valuation techniques and numerous estimates which must be made.
Furthermore, because the disclosed fair value amounts were estimated as of the balance sheet date, the amounts actually realized or paid upon maturity or settlement of the various financial instruments could be significantly different.20.
Commitments and contingencies In the normal course of business, various commitments and contingent liabilities are outstanding.
The following table presents the Companys significant commitments.
Certain of these commitments are not included in the Companys consolidated balance sheet.


| Amount (In Millions) | Plant (including nuclear fuel) | Decommissioning trust funds | Other assets | Total assets acquired | Purchased power agreement (below market) | Decommissioning liability | Other liabilities | Total liabilities assumed | Net assets acquired |


In connection with our assessment of impairment we recorded gross other-than-temporary impairment of $1.15 billion for 2009, compared to $122 million for 2008.
Of the total recorded, $227 million related to credit and was recognized in our consolidated statement of income.
The remaining $928 million related to factors other than credit, more fully discussed below, and was recognized, net of related taxes, in OCI in our consolidated statement of condition.
The $227 million was composed of $151 million associated with expected credit losses, $54 million related to managements decision to sell the impaired securities prior to their recovery in value, and $22 million related to adverse changes in the timing of expected future cash flows from the securities.
The majority of the impairment losses related to non-agency securities collateralized by mortgages, for which management concluded had experienced credit losses based on the present value of the securities expected future cash flows.
These securities are classified as asset-backed securities in the foregoing investment securities tables.
As described in note 1, management periodically reviews the fair values of investment securities to determine if other-than-temporary impairment has occurred.
This review encompasses all investment securities and includes such quantitative factors as current and expected future interest rates and the length of time that a securitys cost basis has exceeded its fair value, and includes investment securities for which we have issuerspecific concerns regardless of quantitative factors.
Gains and losses related to investment securities were as follows for the years ended December 31:


ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Item 15(a).
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
realizable.
While we have considered future taxable income in assessing the need for a valuation allowance, we could in the future be required to increase the valuation allowance to take into account additional deferred tax assets that we may be unable to realize.
An increase in the valuation allowance would have an adverse impact, which could be material, on our income tax provision and net income in the period in which we record the increase.
We recognize and measure benefits for uncertain tax positions using a two-step approach.
The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes.
For tax positions that are more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.
Significant judgment is required to evaluate uncertain tax positions.
We evaluate our uncertain tax positions on a quarterly basis.
Our evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues.
Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results.


| (millions) Global Industrial Global Institutional Global Energy Other Total | December 31, 2015 | Segment change (a) | December 31, 2015 revised | Current year business combinations (b) | Prior year business combinations (c) | Reclassifications (d) | Effect of foreign currency translation | December 31, 2016 | Current year business combinations (b) | Prior year business combinations (c) | Dispositions | Effect of foreign currency translation | December 31, 2017 |


| 2013 2012 | (In Millions) | Entergy Arkansas | Entergy Gulf States Louisiana (a) | Entergy Louisiana (a) | Entergy Mississippi | Entergy New Orleans (a) | Entergy Texas |


We have commitments under various operating leases.
Future minimum payments under non-cancelable operating leases with a remaining term in excess of one year were as follows as of December 31, 2010:


Performance Stock Units and Restricted Stock Units Under the long-term portion of the Incentive Plan, each February the Company grants selected executives and other key employees performance stock units whose vesting is contingent upon the achievement of certain performance objectives.
If at the end of the applicable three-year performance cycle targets for financial measures are met, the full number of shares is awarded to the participants.
The performance scores for 2005 grants of performance stock units can range from 0% to 250% of the targeted amounts.
Restricted stock units were awarded in 2005, 2004 and 2003 under the long-term portion of the Incentive Plan to certain executive officers and other key employees.
Restricted stock units were also awarded quarterly to non-employee directors of the Company as part of the Directors’ Compensation Plan.
The compensation amount charged against income for performance and restricted stock units was $19.9 million, $21.0 million and $6.9 million for 2005, 2004 and 2003, respectively.
The compensation cost associated with the performance stock units is recognized ratably over the three-year term based on the year-end market value of the stock, except for the 2003 grants.
An additional three-year vesting term was imposed for the 2003 grants with accelerated vesting for retirement, disability or death.
The compensation cost for the 2003 grants is being recognized over a period from three to six years based on grant date fair value.
The compensation cost associated with employee restricted stock units is recognized over a specified restriction period based on the year-end market value of the stock.
Upon adoption of SFAS No.123R in the fourth quarter of 2005, the Company elected to begin recognizing expense for employee restricted stock units granted after 2004 based on the straight-line method for the entire award.
The straight-line method for each separately vesting portion of the award had been used for prior grants.
The impact of the change was not material.
The compensation cost associated with non-employee director restricted stock units is recognized at the grant date.
Performance stock units and restricted stock units granted for potential future distribution were as follows:


(1) Includes small business commercial – domestic charge offs of $911 million and $409 million in 2007 and 2006.
Small business commercial – domestic charge offs were not material in 2005, 2004 and 2003.
(2) Includes small business commercial – domestic recoveries of $42 million and $48 million in 2007 and 2006.
Small business commercial – domestic recoveries were not material in 2005, 2004 and 2003.
(3) Ratios do not include loans measured at fair value in accordance with SFAS 159 at and for the year ended December 31, 2007.
Loans measured at fair value were $4.59 billion at December 31, 2007.
(4) In 2007, the impact of SOP 03-3 decreased net charge-offs by $75 million.
Excluding the impact of SOP 03-3, net charge-offs as a percentage of average loans and leases outstanding measured at historical cost in 2007 would have been 0.85 percent and the ratio of the allowance for loan and lease losses to net charge-offs would have been 1.77 percent at December 31, 2007.
(5) In 2006, the impact of SOP 03-3 decreased net charge-offs by $288 million.
Excluding the impact of SOP 03-3, net charge-offs as a percentage of average loans and leases outstanding measured at historical cost in 2006 would have been 0.74 percent, and the ratio of the allowance for loan and lease losses to net charge-offs would have been 1.87 percent at December 31, 2006.


| Technology CECONY O&R | Total MW, except project number | Internal-combustion engines | Photovoltaic solar | Gas turbines | Micro turbines | Fuel cells | Steam turbines | Total distribution-level distributed generation | Number of distributed generation projects |


| (In thousands) Amount | Cash | Fair value of assumed vested stock options | Acquisition-related transaction costs | Total purchase price | (In thousands) | Cash and cash equivalents | Accounts receivable | Property and equipment, net | Goodwill | Intangible assets | Other current and noncurrent assets | Deferred income taxes | Accounts payable | Accrued compensation | Deferred revenue | Other current and long-term liabilities | Total preliminary purchase price allocation |


(1) This amount represents the translation of pounds sterling into U. S.  dollars using the noon buying rate on December 31, 2008 of $1.4619 as announced by the Federal Reserve Bank of New York.
income to amounts needed to service the principal and interest due under the loan.
Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss.
For our commercial mortgage loans, our average loan-to-value ratio was 52% and 55% at December 31, 2014 and 2013, respectively, and our average debt service coverage ratio was 2.6x and 2.4x at December 31, 2014 and 2013, respectively.
The commercial mortgage loan debt service coverage ratio and loan-to-value ratio, as well as the values utilized in calculating these ratios, are updated annually, on a rolling basis, with a portion of the commercial mortgage loan portfolio updated each quarter.
For our agricultural mortgage loans, our average loan-to-value ratio was 44% and 45% at December 31, 2014 and 2013, respectively.
The values utilized in calculating the agricultural mortgage loan loan-to-value ratio are developed in connection with the ongoing review of the agricultural loan portfolio and are routinely updated.
Mortgage Loan Valuation Allowances.
Our valuation allowances are established both on a loan specific basis for those loans considered impaired where a property specific or market specific risk has been identified that could likely result in a future loss, as well as for pools of loans with similar risk characteristics where a property specific or market specific risk has not been identified, but for which we expect to incur a loss.
Accordingly, a valuation allowance is provided to absorb these estimated probable credit losses.
The determination of the amount of valuation allowances is based upon our periodic evaluation and assessment of known and inherent risks associated with our loan portfolios.
Such evaluations and assessments are based upon several factors, including our experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics.
These evaluations and assessments are revised as conditions change and new information becomes available, which can cause the valuation allowances to increase or decrease over time as such evaluations are revised.
Negative credit migration, including an actual or expected increase in the level of problem loans, will result in an increase in the valuation allowance.
Positive credit migration, including an actual or expected decrease in the level of problem loans, will result in a decrease in the valuation allowance.
See Notes 1, 8 and 10 of the Notes to the Consolidated Financial Statements for information about how valuation allowances are established and monitored, activity in and balances of the valuation allowance, and the estimated fair value of impaired mortgage loans and related impairments included within net investment gains (losses) as of and for the years ended December 31, 2014, 2013 and 2012.
Real Estate and Real Estate Joint Ventures We diversify our real estate investments by both geographic region and property type to reduce risk of concentration.
Of our real estate investments, 84% were located in the United States, with the remaining 16% located outside the United States, at December 31, 2014.
The carrying value of our real estate investments located in California, Japan and Florida were 19%, 13% and 9%, respectively, of total real estate investments at December 31, 2014.
Real estate investments by type consisted of the following at:


| Years Ended December 31, 2010/2009 2009/2008 | (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.) |


| Year Ended December 31, $ Change | 2017 | Segment operating income (loss): | Oilfield Services | Oilfield Equipment | Turbomachinery & Process Solutions | Digital Solutions | Total segment operating income (loss) | Corporate | Inventory impairment and related charges-1 | Restructuring, impairment and other | Goodwill impairment | Merger and related costs | Operating income (loss) | Other non operating income, net | Interest expense, net | Income (loss) before income taxes and equity in loss of affiliate | Equity in loss of affiliate | Provision for income taxes | Net income (loss) |


| Year Ended   December 30,   2007 Year Ended December 31, 2006 | Revenue | Net income (loss) | Net income (loss) per share, basic | Net income (loss) per share, diluted |


| Year Ended September 30, | (In millions) | Net sales | Segment income |


| ($ in millions) 2010 2009 2008 | Metal beverage packaging, Americas & Asia | Metal beverage packaging, Europe | Metal food & household products packaging, Americas | Corporate other costs | $11.0 |