environmental regulations, and the continuing advancement of remediation technology.
Taking these factors into account, Eaton has estimated the costs of remediation, which will be incurred over a period of years.
The Company accrues an amount on an undiscounted basis, consistent with the estimates of these costs, when it is probable that a liability has been incurred.
At December 31, 2012 and 2011, $125 and $62 was accrued for these costs.
Based upon Eaton's analysis and subject to the difficulty in estimating these future costs, the Company expects that any sum it may be required to pay in connection with environmental matters is not reasonably possible to exceed the recorded liability by an amount that would have a material effect on its financial position, results of operations or cash flows.
Market Risk Disclosure On a regular basis, Eaton monitors third-party depository institutions that hold its cash and short-term investments, primarily for safety of principal and secondarily for maximizing yield on those funds.
The Company diversifies its cash and shortterm investments among counterparties to minimize exposure to any one of these entities.
Eaton also monitors the creditworthiness of its customers and suppliers to mitigate any adverse impact.
Eaton uses derivative instruments to manage exposure to volatility in raw material costs, currency and interest rates on certain debt instruments.
Derivative financial instruments used by the Company are straightforward and non-leveraged.
The counterparties to these instruments are financial institutions with strong credit ratings.
Eaton maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions.
See Note 12 to the Consolidated Financial Statements for additional information about hedges and derivative financial instruments.
Eatons ability to access the commercial paper market, and the related cost of these borrowings, is based on the strength of its credit rating and overall market conditions.
The Company has not experienced any material limitations in its ability to access these sources of liquidity.
At December 31, 2012, Eaton had $2,000 of longterm revolving credit facilities with banks in support of its commercial paper program.
It has no direct borrowings outstanding under these credit facilities.
Eatons non-United States operations also had available short-term lines of credit of approximately $2,099 at December 31, 2012.
Interest rate risk can be measured by calculating the short-term earnings impact that would result from adverse changes in interest rates.
This exposure results from short-term debt, which includes commercial paper at a floating interest rate, longterm debt that has been swapped to floating rates, and money market investments that have not been swapped to fixed rates.
Based upon the balances of investments and floating rate debt at year end 2012, a 100 basis-point increase in short-term interest rates would have increased the Companys net, pretax interest expense by $15.
Eaton also measures interest rate risk by estimating the net amount by which the fair value of the Companys financial liabilities would change as a result of movements in interest rates.
Based on Eatons best estimate for a hypothetical, 100 basis point decrease in interest rates at December 31, 2012, the market value of the Companys debt and interest rate swap portfolio, in aggregate, would increase by $779.
Currency risk is the risk of economic losses due to adverse changes in exchange rates.
The Company mitigates currency risk by funding some investments in certain markets through local currency financings.
Non-United States dollar debt was $148 at December 31, 2012.
To augment Eatons non-United States dollar debt portfolio, the Company also enters into forward exchange contracts and currency swaps from time to time to mitigate the risk of economic loss in its investments.
At December 31, 2012, the aggregate balance of such contracts was $599.
Eaton also monitors exposure to transactions denominated in currencies other than the functional currency of each country in which the Company operates, and regularly enters into forward contracts to mitigate that exposure.
In the aggregate, Eatons portfolio of forward contracts related to such transactions was not material to its Consolidated Financial Statements.


Product Care 2016 compared with 2015 As reported, net sales decreased $30 million, or 2%, in 2016 compared with 2015, of which $22 million was due to negative currency impact.
On a constant dollar basis, net sales decreased $8 million, or 1%, in 2016 compared with 2015 primarily due to the following: ?
unfavorable price/mix of $29 million primarily in North America driven by targeted pricing incentives and an unfavorable product mix related to accelerated growth in e-Commerce and a shift in demand due to more innovative, resource-efficient solutions.
This was partially offset by: ?
higher unit volumes of $21 million, primarily in North America and EMEA due to ongoing strength in the e-Commerce and third party logistics markets, partially offset by rationalization and weakness in the industrial sector, as well as declines in Latin America due to the political and economic environment.2015 compared with 2014 As reported, net sales decreased $109 million, or 7%, in 2015 compared with 2014, of which $99 million was due to negative currency impact.
On a constant dollar basis, net sales decreased $10 million, or 1%, in 2015 compared with 2014 primarily due to the following: ?
lower unit volumes due to rationalization efforts in North America, Latin America and to a lesser extent, EMEA and weaknesses across the industrial sector.
This was partially offset by: ?
favorable price/mix in all regions, primarily in North America and Latin America reflecting results from our focus on maintaining pricing disciplines and an increase of sales from high-performance packaging solutions, including cushioning and packaging systems as compared to sales from general packaging solutions, and the progression of our pricing and value initiatives implemented to offset non-material inflationary costs as well as currency devaluation.


| Year Ended September 30, | 2014 | Risk free interest rate | Expected life (in years) | Expected volatility | Expected dividend yield |


| Thousands of dths Delivered Revenues in Millions | Twelve Months Ended | Description | Residential | General | Firm transportation | Total firm sales and transportation | Interruptible sales | NYPA | Generation plants | Other | Other operating revenues | Total |


| Years Ended December 31, | (Dollars in millions) | 2010 | Attritional | Catastrophes | Total segment | 2009 | Attritional | Catastrophes | Total segment | 2008 | Attritional | Catastrophes | Total segment | Variance 2010/2009 | Attritional | Catastrophes | Total segment | Variance 2009/2008 | Attritional | Catastrophes | Total segment | (Some amounts may not reconcile due to rounding.) |


Risk Monitoring and Limits The risk monitoring responsibilities, owned by the business units, include ensuring compliance with market risk limits and escalation and remediation of limit breaches.
Such activities must be reported to the ERM Market Risk team by the relevant business unit.
This monitoring approach is aligned with our overall risk limits framework.
To control our exposure to market risk, we rely on a three-tiered hierarchy of limits that the CMRO closely monitors and reports to our CRO, senior management and risk committees.
See Risk Appetite, Limits, Identification, and Measurement  Risk Limits herein for further information on our three-tiered hierarchy of limits.
Liquidity Risk Management Liquidity risk is defined as the risk that our financial condition will be adversely affected by the inability or perceived inability to meet our short-term cash, collateral or other financial obligations.
Failure to appropriately manage liquidity risk can result in insolvency, reduced operating flexibility, increased costs, reputational harm and regulatory action.
AIG and its legal entities seek to maintain sufficient liquidity during both the normal course of business and under defined liquidity stress scenarios to ensure that sufficient cash can be generated to meet the obligations as they come due.
The general operating expense ratio decreased by 0.2 points in 2015 compared to 2014, primarily due to lower employeerelated expenses partially offset by additional expense resulting from the NSM acquisition and higher technology-related expenses.2014 and 2013 Comparison The combined ratio decreased by 1.4 points in 2014 compared to 2013 reflecting decreases in the expense ratio and the loss ratio.
The accident year combined ratio, as adjusted, decreased by 0.9 points in 2014 compared 2013, primarily due to lower expense ratio which was partially offset by a higher accident year loss ratio, as adjusted.
The accident year loss ratio, as adjusted, increased by 0.2 points in 2014, compared to 2013, primarily due to higher frequency of non-severe losses, particularly in Property and Specialty businesses.
This was partially offset by an improvement in Financial lines, particularly in the U. S. , reflecting enhanced risk selection and pricing discipline.
Severe losses represented approximately 2.8 points of the accident year loss ratio, as adjusted, in both 2014 and 2013.
The acquisition ratio decreased by 0.4 points in 2014 compared to 2013, primarily due to a reduction in expenses of personnel engaged in sales support activities and lower premium taxes and guaranty fund and other assessments.
The general operating expense ratio decreased by 0.7 points in 2014 compared to 2013, primarily due to efficiencies from organizational realignment initiatives, partially offset by higher technology-related expenses and an increase in bad debt expense.
In 2013, general operating expenses benefitted from an unusually low bad debt expense.


| 2011 2010 2009 | Beginning Balance | Increases related to tax positions taken during a prior year | Decreases related to tax positions taken during a prior year | Increases related to tax positions taken during the current year | Decreases related to settlements with taxing authorities | Decreases related to expiration of statute of limitations | Ending Balance |


O&Rs gas sales and deliveries, excluding off-system sales, in 2012 compared with 2011 were


Investment Securities Investment securities totaled $1,995.8 million, or 38% of total assets at December 31, 2003.
Debt securities totaled $1,960.6 million, or 98% of our total investment portfolio.
More than 94% of our debt securities were of investment-grade quality, with an average credit rating of AA by Standard & Poors at December 31, 2003.
Most of the debt securities that are below investment grade are rated at the higher end (B or better) of the noninvestment grade spectrum.
Our investment policy limits investments in a single issuer and requires diversification among various asset types.
Duration is indicative of the relationship between changes in market value to changes in interest rates, providing a general indication of the sensitivity of the fair values of our debt securities to changes in interest rates.
However, actual market values may differ significantly from estimates based on duration.
The average duration of our debt securities was approximately 3.5 years at December 31, 2003.
Based on this duration, a 1% increase in interest rates would generally decrease the fair value of our debt securities by approximately $70 million.
Our investment securities are categorized as available for sale and, as a result, are stated at fair value.
Fair value of publicly traded debt and equity securities are based on quoted market prices.
Non-traded debt securities are priced independently by a third party vendor.
Fair value of venture capital debt securities that are privately


| 2017 2018 | Net sales | Net earnings from continuing operations common stockholders | Diluted earnings per share from continuing operations | Network Power Systems | 2016 | Net sales | Cost of sales | SG&A | Other deductions, net | Earnings (Loss) before income taxes | Income taxes | Earnings (Loss), net of tax |


| Location ApproximateSize (Sq. Ft.) Segment MajorityOwned orLeased | Hamilton, NEW ZEALAND | Calgary, Alberta, CANADA | Kwinana, AUSTRALIA | Revesby, AUSTRALIA | Yangsan, KOREA | Cisterna, ITALY | Rovigo, ITALY | Cuautitlan, MEXICO | Barueri, BRAZIL | Mullingar, IRELAND | Mosta, MALTA |


| Years Ended December 31, | 2007 | (Thousands of dollars) | General partner distributions | Incentive distributions | Total distributions from ONEOK Partners |


| December 31, 2009 | Senior Unsecured   Notes | Huntington Bancshares Incorporated | Moody’s Investor Service | Standard and Poor’s | Fitch Ratings | The Huntington National Bank | Moody’s Investor Service | Standard and Poor’s | Fitch Ratings |


| Copper (billion pounds) Gold (million ounces) Molybdenum (billion pounds) | Reserves at December 31, 2007 | Net additions/revisions | Production | Reserves at December 31, 2008 |


| 2010  Permitted w/o   Approval -1 2009 2008 | Company | (In millions) | Metropolitan Life Insurance Company | MetLife Insurance Company of Connecticut | Metropolitan Tower Life Insurance Company | Metropolitan Property and Casualty Insurance Company |


Liquidity Risk Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with its financial liabilities.
The company is exposed to liquidity risk through its $1,589.3 million in total debt.
The company actively manages liquidity risk by preparing cash flow forecasts for future periods, reviewing them regularly with senior management, maintaining a committed credit facility, scheduling significant gaps between major debt maturities and engaging external financing sources in regular dialog.


THE INTERPUBLIC GROUP OF COMPANIES, INC.  AND SUBSIDIARIES MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  (Continued) (Amounts in Millions, Except Per Share Amounts) Pension and Postretirement Benefits We use various actuarial assumptions in determining our net pension and postretirement benefit costs and obligations.
These assumptions include discount rates and expected returns on plan assets and are updated annually or more frequently with the occurrence of significant events.
Changes in the related pension and postretirement benefit costs may occur in the future due to changes in the assumptions.
The discount rate is one of the significant assumptions that impacts our net pension and postretirement costs and obligations.
The discount rates are determined at the beginning of the year based on prevailing interest rates as of the measurement date and are adjusted to match the duration of the underlying obligation.
For 2007, we plan to use weighted average discount rates of 5.68%, 4.82% and 5.75% for the domestic pension plans, foreign plans and the postretirement plan, respectively.
Changes in the discount rates are generally due to increases or decreases in long-term interest rates.
A higher discount rate will decrease our pension cost.
A 25 basis point increase or decrease in the discount rate would have decreased or increased the 2006 net pension and postretirement cost by $2.3 and $0.1, respectively.
In addition, a 25 basis point increase or decrease in the discount rate would have decreased or increased the December 31, 2006 benefit obligation by $31.4.
The expected rate of return on pension plan assets is another significant assumption that impacts our net pension cost and is determined at the beginning of the year.
Changes in the rates are due to lower or higher expected future returns based on the mix of assets held and studies performed by our external investment advisors.
For 2007, we plan to use weighted average expected rates of return of 8.16% and 7.57% for the domestic and foreign pension plans, respectively.
A lower expected rate of return will increase our net pension cost.
A 25 basis point increase or decrease in the expected return on plan assets would have decreased or increased the 2006 net pension cost by $1.1.
See Note 13 to the Consolidated Financial Statements for further information.


(a) Utility gross margin is a non-GAAP financial measure.
See explanation of utility gross margin under Evergy's Results of Operations.
KCP&L's utility gross margin decreased $107.5 million in 2018 compared to 2017 driven by: ?
a $72.4 million refund obligation for the change in the corporate income tax rate caused by the passage of the TCJA.
See Note 19 to the consolidated financial statements for additional information; ?
$72.9 million of sales taxes and franchise fees collected from KCP&L Missouri customers included in revenue in 2017, which as part of KCP&L's adoption of Accounting Standards Codification (ASC) 606, are now excluded from revenue in 2018; and ?
a $25.0 million reduction in revenue for one-time and annual bill credits as a result of conditions in the MPSC and KCC merger orders.
See Note 2 to the consolidated financial statements for additional information; partially offset by
2015 and 2014 was $1.5 billion and $1.3 billion.
The aggregate notional amount of our outstanding foreign currency hedges at December 31, 2015 and 2014 was $4.1 billion and $804 million.
Derivative instruments did not have a material impact on net earnings and comprehensive income during 2015, 2014 and 2013.
Substantially all of our derivatives are designated for hedge accounting.
See Note 16 for more information on the fair value measurements related to our derivative instruments.


(1) Other International includes the North Sea, Ecuador (at December 31, 2009 and 2008), and China.
See Note 3.
Acquisitions and Divestitures.
(2) The standardized measure of discounted future net cash flows does not include cash flows relating to anticipated future methanol sales.
(3) Production costs include oil and gas lease operating expense, production and ad valorem taxes, transportation expense and general and administrative expense supporting oil and gas operations.
PROVED RESERVES We have historically added reserves through our exploration program, development activities, and acquisition of producing properties.
(See Items 1.  and 2.  Business and Properties).
Changes in proved reserves were as follows:


STOCKHOLDERS EQUITY Preferred Stock As of December 31, 2003 the Company was authorized to issue up to 20.0 million shares of $.01 par value preferred stock.
As of December 31, 2003 and 2002 there were no preferred shares issued or outstanding.
BANK OF AMERICA CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements(Continued) The Corporation will continue to repurchase shares, from time to time, in the open market or in private transactions through the Corporations approved repurchase programs.
The Corporation expects to continue to repurchase a number of shares of common stock at least equal to any shares issued under the Corporations employee stock plans.
At December 31, 2005, the Corporation had 690,000 shares authorized and 382,450 shares, or $96 million, outstanding of Bank of America 6.75% Perpetual Preferred Stock with a stated value of $250 per share.
Ownership is held in the form of depositary shares paying dividends quarterly at an annual rate of 6.75 percent.
On or after April 15, 2006, the Corporation may redeem Bank of America 6.75% Perpetual Preferred Stock, in whole or in part, at its option, at $250 per share, plus accrued and unpaid dividends.
The Corporation also had 805,000 shares authorized and 700,000 shares, or $175 million, outstanding of Bank of America Fixed/Adjustable Rate Cumulative Preferred Stock with a stated value of $250 per share.
Ownership is held in the form of depositary shares paying dividends quarterly at an annual rate of 6.60 percent through April 1, 2006.
After April 1, 2006, the dividend rate on Fixed/Adjustable Rate Cumulative Preferred Stock will be a rate per annum equal to 0.50 percent plus the highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate, and the Thirty Year Constant Maturity Rate, as each term is defined in BACs Amended and Restated Certificate of Designations establishing the Fixed/Adjustable Rate Cumulative Preferred Stock.
The applicable rate per annum for any dividend period beginning on or after April 1, 2006 will not be less than 7.00 percent nor greater than 13.00 percent.
On or after April 1, 2006, the Corporation may redeem Bank of America Fixed/Adjustable Rate Cumulative Preferred Stock, in whole or in part, at its option, at $250 per share, plus accrued and unpaid dividends.
In addition to the preferred stock described above, the Corporation had 35,045 shares authorized and 7,739 shares, or $1 million, outstanding of the Series B Preferred Stock with a stated value of $100 per share paying dividends quarterly at an annual rate of 7.00 percent.
The Corporation may redeem the Series B Preferred Stock, in whole or in part, at its option, at $100 per share, plus accrued and unpaid dividends.
All preferred stock outstanding has preference over our common stock with respect to the payment of dividends and distribution of our assets in the event of a liquidation or dissolution.
Except in certain circumstances, the holders of preferred stock have no voting rights.


| 2006 2005 2004 | (In thousands) | SUPPLEMENTAL DISCLOSURES: | Total interest costs incurred | Interest capitalized | Interest expense | Cash paid for interest | Cash paid for income taxes | NON-CASH FINANCING TRANSACTIONS: | Mortgage loans assumed with acquisitions |


| Year ended December 31, | 2007 | (in millions) | Operating results: | Revenues | Expenses | Adjusted operating income | Equity in earnings of operating joint ventures-1 | Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures |


Included in All Other are our Equity Investments businesses and Other.
Equity Investments includes Principal Investing, Corporate Investments and Strategic Investments.
Principal Investing is comprised of a diversified portfolio of investments in privately-held and publicly-traded companies at all stages of their life cycle from start-up to buyout.
These investments are made either directly in a company or held through a fund and are accounted for at fair value.
See Note 1 of the Consolidated Financial Statements for more information on the accounting for the Principal Investing portfolio.
Corporate Investments primarily includes investments in publicly-traded equity securities and funds and are accounted for as AFS marketable equity securities.
Strategic Investments includes the Corporations strategic investments such as CCB, Grupo Financiero Santander Serfin (Santander), Banco ItaÃº and other investments.
The restricted shares of CCB and Banco ItaÃº are currently carried at cost but, as required by GAAP, will be accounted for as AFS marketable equity securities and carried at fair value with an offset to Accumulated Other Comprehensive Income (OCI) starting one year prior to the lapse of their restrictions.
See Note 5 of the Consolidated Financial Statements for more information on our strategic investments.
Our investment in Santander is accounted for under the equity method of accounting.
Income associated with Equity Investments is recorded in Equity Investment Gains and includes gains (losses) on sales of these equity investments, dividends, and valuations that primarily relate to the Principal Investing portfolio.
The following table presents the components of All Others Equity Investment Gains and a reconciliation to the total consolidated Equity Investment Gains for 2006 and 2005.
Components of Equity Investment Gains


| For the fiscal years ended June 30, | 2019 | (in millions, except %) | Revenues: | Circulation and subscription | Advertising | Other | Total Revenues | Operating expenses | Selling, general and administrative | Segment EBITDA |


ICOS Corporation On January 29, 2007, we acquired all of the outstanding common stock of ICOS Corporation (ICOS), our partner in the Lilly ICOS LLC joint venture for the manufacture and sale of Cialis for the treatment of erectile dysfunction.
The acquisition brought the full value of Cialis to us and enabled us to realize operational effi ciencies in the further development, marketing, and selling of this product.
The aggregate cash purchase price of approximately $2.3 billion was fi nanced through borrowings.
The acquisition has been accounted for as a business combination under the purchase method of accounting, resulting in goodwill of $646.7 million.
No portion of this goodwill was deductible for tax purposes.
We determined the following estimated fair values for the assets acquired and liabilities assumed as of the date of acquisition.


| Second Quarter 2012 First Quarter 2012 Fourth Quarter 2011 | (Dollars in millions) | Earning assets | Time deposits placed and other short-term investments-1 | Federal funds sold and securities borrowed or purchased under agreements to resell | Trading account assets | Debt securities-2 | Loans and leases-3: | Residential mortgage-4 | Home equity | Discontinued real estate | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer-5 | Other consumer-6 | Total consumer | U.S. commercial | Commercial real estate-7 | Commercial lease financing | Non-U.S. commercial | Total commercial | Total loans and leases | Other earning assets | Total earning assets-8 | Cash and cash equivalents-1 | Other assets, less allowance for loan and lease losses | Total assets | Interest-bearing liabilities | U.S. interest-bearing deposits: | Savings | NOW and money market deposit accounts | Consumer CDs and IRAs | Negotiable CDs, public funds and other deposits | Total U.S. interest-bearing deposits | Non-U.S. interest-bearing deposits: | Banks located in non-U.S. countries | Governments and official institutions | Time, savings and other | Total non-U.S. interest-bearing deposits | Total interest-bearing deposits | Federal funds purchased, securities loaned or sold under agreements to repurchase and other short-term borrowings | Trading account liabilities | Long-term debt | Total interest-bearing liabilities-8 | Noninterest-bearing sources: | Noninterest-bearing deposits | Other liabilities | Shareholders’ equity | Total liabilities and shareholders’ equity | Net interest spread | Impact of noninterest-bearing sources | Net interest income/yield on earning assets-1 |


| 2010 % Change 2009 % Change 2008 | Revenue | Gross Profit | Gross Profit Margin |


| Year Ended December 31, Change   in $ | 2010 | (In $ millions, except percentages) | Net sales | Net sales variance | Volume | Price | Currency | Other | Operating profit | Operating margin | Other (charges) gains, net | Earnings (loss) from continuing operations before tax | Depreciation and amortization |


| Common Stock | Issued | (in millions) | Balance, December 31, 2013 | Common Stock issued | Common Stock acquired | Stock-based compensation programs-1 | Balance, December 31, 2014 | Common Stock issued | Common Stock acquired | Stock-based compensation programs-1 | Balance, December 31, 2015 | Common Stock issued | Common Stock acquired | Stock-based compensation programs-1 | Balance, December 31, 2016 |


| 2016 2015 2014 | Net sales | Operating profit | Operating margin | Backlog atyear-end |


| Pension plans-1 Postretirement benefit plans-1 | U.S. plans-2 | In millions of dollars | Contributions made by the Company | Benefits paid directly by the Company |


| In millions of dollars 2010 2009 2008 | Total revenues, net of interest | expense-1 | Income (loss) from discontinued operations | Gain (loss) on sale | Provision (benefit) for income taxes | Income (loss) from discontinued | operations, net of taxes | In millions of dollars | Cash flows from operating activities | Cash flows from investing activities | Cash flows from financing activities | Net cash provided by | discontinued operations |


| 2015 2014 | Number of shares repurchased | Amount paid | Weighted average cost per share |


19.
SEGMENT REPORTING The U. S.  Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and Accident and Health (“A&H”) business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U. S.  The International operation writes non-U.
S.  property and casualty reinsurance through Everest Re’s branches in Canada and Singapore and through offices in Brazil, Miami and New Jersey.
The Bermuda operation provides reinsurance and insurance to worldwide property and casualty markets through brokers and directly with ceding companies from its Bermuda office and reinsurance to the United Kingdom and European markets through its UK branch and Ireland Re.
The Insurance operation writes property and casualty insurance directly and through general agents, brokers and surplus lines brokers within the U. S.  and Canada.
The Mt.
Logan Re segment represents business written for the segregated accounts of Mt.
Logan Re, which were formed on July 1, 2013.
The Mt.
Logan Re business represents a diversified set of catastrophe exposures, diversified by risk/peril and across different geographical regions globally.
These segments, with the exception of Mt.
Logan Re, are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.
Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.
The Mt.
Logan Re segment is managed independently and seeks to write a diverse portfolio of catastrophe risks for each segregated account to achieve desired risk and return criteria.
Underwriting results include earned premium less losses and loss adjustment expenses (“LAE”) incurred, commission and brokerage expenses and other underwriting expenses.
We measure our underwriting results using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.
Mt.
Logan Re’s business is sourced through operating subsidiaries of the Company; however, the activity is only reflected in the Mt.
Logan Re segment.
For other inter-affiliate reinsurance, business is generally reported within the segment in which the business was first produced, consistent with how the business is managed.
Except for Mt.
Logan Re, the Company does not maintain separate balance sheet data for its operating segments.
Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.


| Duke Energy Carolinas Duke Energy Progress Duke Energy Florida Duke Energy Ohio Duke Energy Indiana | Residential | General service | Industrial | Total retail sales | Wholesale and other sales | Total sales |


| Fiscal  2008 Fiscal  2007 Fiscal  2006 | QuickBooks | Payroll and Payments | Consumer Tax | Accounting Professionals | Financial Institutions |


| 2006 2005 2004 2003 2002 | Per share | Net income | Basic | Diluted | Cash dividends declared | Stockholders’ equity at year-end | Tangible stockholders’ equity at year-end | Dividend payout ratio |


| December 31, | 2012 | (in billions) | Assets Under Management and Administration | Advice & Wealth Management AUM | Asset Management AUM | Eliminations | Total Assets Under Management | Total Assets Under Administration | Total AUM and AUA |


| As a percentage of average corporate loans 0.12% 0.17% 0.08% 0.10% 0.08% | Allowance by type-11 | Consumer | Corporate | Total Citigroup |


| Year Ended December 31, | 2015 | Net cash provided by operating activities | Prior to adoption of ASU 2016-09 | Adjustment - adoption of ASU 2016-09 | As adjusted | Net cash (used in) provided by financing activities | Prior to adoption of ASU 2016-09 | Adjustment - adoption of ASU 2016-09 | As adjusted |


| Year Ended December 31, 2013 | SeparateAccountAssets-4 | (in millions) | Fair Value, beginning of period | Total gains (losses) (realized/unrealized): | Included in earnings: | Realized investment gains (losses), net | Interest credited to policyholders’ account balances | Net investment income | Purchases | Sales | Issuances | Settlements | Foreign currency translation | Other-1 | Transfers into Level 3-2 | Transfers out of Level 3-2 | Fair Value, end of period | Unrealized gains (losses) for assets/liabilities still held(3): | Included in earnings: | Realized investment gains (losses), net | Interest credited to policyholders’ account balances |


| Year Ended December 31, | 2011 | (dollar amounts in thousands) | Allowance for loan and lease losses, beginning of year | Acquired allowance for loan and lease losses | Loan and lease charge-offs | Commercial: | Commercial and industrial | Commercial real estate: | Construction | Commercial | Commercial real estate | Total commercial | Consumer: | Automobile | Home equity | Residential mortgage | Other consumer | Total consumer | Total charge-offs | Recoveries of loan and lease charge-offs | Commercial: | Commercial and industrial | Commercial real estate: | Construction | Commercial | Total commercial real estate | Total commercial | Consumer: | Automobile | Home equity | Residential mortgage | Other consumer | Total consumer | Total recoveries | Net loan and lease charge-offs | Provision for loan and lease losses | Economic reserve transfer | Allowance for assets sold and securitized or transferred to loans held for sale | Allowance for loan and lease losses, end of year | Allowance for unfunded loan commitments, beginning of year | Acquired allowance for unfunded loan commitments | (Reduction in) Provision for unfunded loan commitments and letters of credit losses | Economic reserve transfer | Allowance for unfunded loan commitments, end of year | Allowance for credit losses, end of year | ALLL as a % of total period end loans and leases | AULC as a % of total period end loans and leases | ACL as a % of total period end loans and leases |


| Years ended December 31, | 2016 | Balance at beginning of period | Change in related noncontrolling interest balance | Changes in redemption value of redeemable noncontrolling interests: | Additions | Redemptions and reclassifications | Redemption value adjustments | Balance at end of period |


There were no vested or issued performance-based restricted share units as of fiscal 2018, 2017, or 2016, and as such, there was no associated fair value or intrinsic value for these awards.
There were no material modifications to performance-based restricted share units in fiscal 2018, 2017, or 2016.
As of December 29, 2018, total unrecognized compensation expense related to non-vested performance-based restricted share units was approximately $1.3 million with a weighted average expense recognition period of 2.2 years.
Employee Stock Purchase Plan The ESPP provides Company employees the opportunity to purchase, through payroll deductions, shares of common stock at a 15% discount.
Pursuant to the terms of the ESPP, the Company issued 77,458, 83,155, and 69,562 shares of common stock during fiscal 2018, 2017, and 2016, respectively.
The total cost related to the ESPP, including the compensation expense calculations, was approximately $1.1 million, $1.0 million, and $1.1 million in fiscal 2018, 2017, and 2016, respectively.
There is a maximum of 16.0 million shares of common stock that are reserved under the ESPP.
At December 29, 2018, there were approximately 11.9 million remaining shares of common stock reserved for future issuance under the ESPP.


| For the Years Ended December 31 Total United States Europe (a) Africa Asia and Other (b) | (In millions) | 2010 | Sales and other operating revenues | Unaffiliated customers | Inter-company | Total revenues | Costs and expenses | Production expenses, including related taxes | Exploration expenses, including dry holes and lease impairment | General, administrative and other expenses | Depreciation, depletion and amortization | Asset impairments | Total costs and expenses | Results of operations before income taxes | Provision for income taxes | Results of operations |


| Balance, November 3, 2007 $9,889 | Additions for tax positions of 2008 | Balance, November 1, 2008 | Additions for tax positions of 2009 | Balance, October 31, 2009 | Additions for tax positions of 2010 | Balance, October 30, 2010 |


| (in millions) December31,2014 Net Inflows (Outflows) Acquisitions-1 Market Change FX Impact December 31,2015 | Equity: | Active | iShares | Non-ETF index | Equity subtotal | Fixed income: | Active | iShares | Non-ETF index | Fixed income subtotal | Multi-asset class | Alternatives: | Core | Currency and commodities | Alternatives subtotal | Long-term | Cash management | Advisory | Total AUM |


| 2007 2006 2005 | (Thousands of Dollars) | Fair value of restricted stock units vested | Intrinsic value of restricted stock units vested(a) |


INTEL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The fair value of our grants receivable is determined using a discounted cash flow model, which discounts future cash flows using an appropriate yield curve.
As of December 28, 2013, and December 29, 2012, the carrying amount of our grants receivable was classified within other current assets and other long-term assets, as applicable.
Our long-term debt recognized at amortized cost is comprised of our senior notes and our convertible debentures.
The fair value of our senior notes is determined using active market prices, and it is therefore classified as Level 1.
The fair value of our convertible long-term debt is determined using discounted cash flow models with observable market inputs, and it takes into consideration variables such as interest rate changes, comparable securities, subordination discount, and credit-rating changes, and it is therefore classified as Level 2.
The NVIDIA Corporation (NVIDIA) cross-license agreement liability in the preceding table was incurred as a result of entering into a long-term patent cross-license agreement with NVIDIA in January 2011.
We agreed to make payments to NVIDIA over six years.
As of December 28, 2013, and December 29, 2012, the carrying amount of the liability arising from the agreement was classified within other accrued liabilities and other long-term liabilities, as applicable.
The fair value is determined using a discounted cash flow model, which discounts future cash flows using our incremental borrowing rates.


| 2013 2012 | As of December 31 (in millions) | Trade name intangible | Core deposit intangible | Trust relationships | Insurance relationships | Total other acquisition-relatedintangible assets |


| December 31, | 2018 | (in billions) | Prudential Insurance | PLIC | Pruco Life | PRIAC | PALAC | Other-1 | Total future policy benefits and policyholders’ account balances-2 |


BlackRock PNC owned approximately 35 million common stock equivalent shares of BlackRock equity at December 31, 2015, accounted for under the equity method.
The primary risk measurement, similar to other equity investments, is economic capital.
The Business Segments Review section of this Item 7 includes additional information about BlackRock.
Tax Credit Investments Included in our equity investments are direct tax credit investments and equity investments held by consolidated partnerships which totaled $2.3 billion at December 31, 2015 and $2.6 billion at December 31, 2014.
These equity investment balances include unfunded commitments totaling $669 million and $717 million at December 31, 2015 and December 31, 2014, respectively.
These unfunded commitments are included in Other Liabilities on our Consolidated Balance Sheet.
Note 2 Loan Sale and Servicing Activities and Variable Interest Entities in the Notes To Consolidated Financial Statements in Item 8 of this Report has further information on Tax Credit Investments.
Private Equity The private equity portfolio is an illiquid portfolio comprised of mezzanine and equity investments that vary by industry, stage and type of investment.
Private equity investments carried at estimated fair value totaled $1.4 billion at December 31, 2015 and $1.6 billion at December 31, 2014.
As of December 31, 2015, $1.1 billion was invested directly in a variety of companies and $.3 billion was invested indirectly through various private equity funds.
Included in direct investments are investment activities of two private equity funds that are consolidated for financial reporting purposes.
The noncontrolling interests of these funds totaled $170 million as of December 31, 2015.
The interests held in indirect private equity funds are not redeemable, but PNC may receive distributions over the life of the partnership from liquidation of the underlying investments.
See Item 1 Business  Supervision and Regulation and Item 1A Risk Factors of this Report for discussion of the potential impacts of the Volcker Rule provisions of Dodd-Frank on our interests in and of private funds covered by the Volcker Rule.
In 2015, PNC invested with six other banks in Early Warning Services (EWS), a provider of fraud prevention and risk management solutions.
EWS then acquired ClearXchange, a network through which customers send and receive person-toperson payments.
Integrating these businesses will enable us to, among other things, create a secure, real-time payments network.
Our unfunded commitments related to private equity totaled $126 million at December 31, 2015 compared with $140 million at December 31, 2014.
Visa See Note 7 Fair Value, Note 20 Legal Proceedings and Note 21 Commitments and Guarantees in the Notes To Consolidated Financial Statements in Item 8 of this Report for additional information regarding the October 2007 Visa restructuring, our involvement with judgment and loss sharing agreements with Visa and certain other banks, the status of pending interchange litigation, the sales of portions of our Visa Class B common shares and the related swap agreements with the purchasers.
During 2015, we sold 2.0 million Visa Class B common shares, in addition to the 16.5 million shares sold in previous years.
We have entered into swap agreements with the purchasers of the shares as part of these sales.
See Note 7 Fair Value in the Notes To Consolidated Financial Statements in Item 8 of this Report for additional information.
At December 31, 2015, our investment in Visa Class B common shares totaled approximately 4.9 million shares and had a carrying value of $31 million.
Based on the December 31, 2015 closing price of $77.55 for the Visa Class A common shares, the fair value of our total investment was approximately $622 million at the current conversion rate.
The Visa Class B common shares that we own are transferable only under limited circumstances until they can be converted into shares of the publicly traded class of stock, which cannot happen until the settlement of all of the specified litigation.


| (Thousands of barrels per day) 2008 2007 2006 | Crude oil trunk lines | Refined products trunk lines | TOTAL |


ITEM 3.
LEGAL PROCEEDINGS Except as described below, we are not aware of any legal proceedings or claims that we believe could have, individually or taken together, a material adverse effect on our financial condition, results of operations or cash flows.
See “Legal Proceedings” section of Note 11 to the Consolidated Financial Statements for information regarding legal proceedings, which information is incorporated by reference in this Item 3.
ITEM 4.
MINE SAFETY DISCLOSURES None.
In November 2016, we issued $45 million of fixed rate term notes in two tranches to two insurance companies.
Principal payments commence in 2023 and 2028 and the notes mature in 2029 and 2034, respectively.
The notes carry interest rates of 2.87 and 3.10, respectively.
We used proceeds of the notes to pay down borrowings under our revolving credit facility.
In January 2015, we issued $75 million of fixed rate term notes to an insurance company.
Principal payments commence in 2020 and the notes mature in 2030.
The notes carry an interest rate of 3.52 percent.
We used proceeds of the notes to pay down borrowings under our revolving credit facility.
At December 31, 2016, we had available borrowing capacity of $310.8 million under this facility.
We believe that the combination of cash, available borrowing capacity and operating cash flow will provide sufficient funds to finance our existing operations for the foreseeable future.
Our total debt increased to $323.6 million at December 31, 2016 compared with $249.0 million at December 31, 2015, as our cash flows generated in the U.
S were more than offset by our share repurchase activity and our purchase of Aquasana.
As a result, our leverage, as measured by the ratio of total debt to total capitalization, was 17.6 percent at the end of 2016 compared with 14.7 percent at the end of 2015.
Our U. S.  pension plan continues to meet all funding requirements under ERISA regulations.
We were not required to make a contribution to our pension plan in 2016 but made a voluntary $30 million contribution due to escalating Pension Benefit Guaranty Corporation insurance premiums.
We forecast that we will not be required to make a contribution to the plan in 2017 and we do not plan to make any voluntary contributions in 2017.
For further information on our pension plans, see Note 10 of the Notes to Consolidated Financial Statements.
During 2016, our Board of Directors authorized the purchase of an additional 3,000,000 shares of our Common Stock.
In 2016, we repurchased 3,273,109 shares at an average price of $41.30 per share and a total cost of $135.2 million.
A total of 4,906,403 shares remained on the existing repurchase authorization at December 31, 2016.
Depending on factors such as stock price, working capital requirements and alternative investment opportunities, such as acquisitions, we expect to spend approximately $135 million on share repurchase activity in 2017 using a 10b5-1 repurchase plan.
In addition, we may opportunistically repurchase an additional $65 million of our shares in 2017.
We have paid dividends for 77 consecutive years with payments increasing each of the last 25 years.
We paid dividends of $0.48 per share in 2016 compared with $0.38 per share in 2015.
In January 2017, we increased our dividend by 17 percent and anticipate paying dividends of $0.56 per share in 2017.
Aggregate Contractual Obligations A summary of our contractual obligations as of December 31, 2016, is as follows:


| December 31, | (in millions) | Commercial | Commercial real estate | Leases | Total commercial | Residential mortgages | Home equity loans | Home equity lines of credit | Home equity loans serviced by others | Home equity lines of credit serviced by others | Automobile | Student | Credit cards | Other retail | Total retail | Total loans and leases-1 (2) |


(5) EBIT is defined as earnings (loss) before interest expense and provisions (benefits) for income taxes.
EBITDA is defined as EBIT plus depreciation and amortization.
EBIT and EBITDA do not purport to represent net earnings or net cash provided by operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as an alternative to these measurements or as indicators of the Companys performance.
The Companys definitions of EBIT and EBITDA may not be comparable with similarly-titled measures used by other companies.
EBIT and EBITDA are among the indicators used by the Companys management to measure the performance of the Companys operations and are also among the criteria upon which performance based compensation may be based.
The following is a reconciliation of net earnings (loss) to EBIT and EBITDA:


| December 31, | Subsidiaries | (In millions) | Metropolitan Life Insurance Company -1 | Metropolitan Life Insurance Company -2 | Metropolitan Life Insurance Company -2 | Total |


Our retail marketing gross margin for gasoline and distillates, which is the difference between the ultimate price paid by consumers and the cost of refined products, including secondary transportation and consumer excise taxes, also impacts RM&T segment profitability.
There are numerous factors including local competition, seasonal demand fluctuations, the available wholesale supply, the level of economic activity in our marketing areas and weather conditions that impact gasoline and distillate demand throughout the year.
Refined product demand increased for several years until 2008 when it decreased due to the combination of significant increases in retail petroleum prices, a broad slowdown in general economic activity, and the impact of increased ethanol blending into gasoline.
In 2009 refined product demand continued to decline.
For our marketing area, we estimate a gasoline demand decline of about one percent and a distillate demand decline of about 12 percent from 2008 levels.
Market demand declines for gasoline and distillates generally reduce the product margin we can realize.
We also estimate gasoline and distillate demand in our marketing area decreased about three percent in 2008 compared to 2007 levels.
The gross margin on merchandise sold at retail outlets has been historically less volatile.


| 2012 2011 | (In millions) | Crude oil and other charge stocks | Refined petroleum products and natural gas | Less: LIFO adjustment | 732 | Merchandise, materials and supplies | Total inventories |


| Pension plans | U.S. | Year ended December 31, (in millions) | Components of net periodic benefit cost | Benefits earned during the year | Interest cost on benefit obligations | Expected return on plan assets | Amortization: | Net (gain)/loss | Prior service cost/(credit) | Special termination benefits | Settlement loss | Net periodic defined benefit cost | Other defined benefit pension plans(a) | Total defined benefit plans | Total defined contribution plans | Total pension and OPEB cost included in compensation expense | Changes in plan assets and benefit obligations recognized in other comprehensive income | Net (gain)/loss arising during the year | Prior service credit arising during the year | Amortization of net loss | Amortization of prior service (cost)/credit | Settlement loss | Foreign exchange impact and other | Total recognized in other comprehensive income | Total recognized in net periodic benefit cost and other comprehensive income |


| Level 3 Instruments OnlyIn millions Trading securities debt Trading securities equity Equity investments - direct Equity investments - indirect | December 31, 2008 | National City acquisition | January 1, 2009 | Total realized/unrealized gains or losses: | Included in earnings (**) | Purchases, issuances, and settlements, net | Transfers into Level 3, net | December 31, 2009 | (**) Amounts attributable to unrealized gains or losses related to trading securitiesand equity investments held at December 31, 2009: |


We currently have 71 corrugated manufacturing operations, of which 44 are owned, including 37 combining operations, or corrugated plants, and seven sheet plants.
Four corrugated plants and 23 sheet plants are leased.
We also own one warehouse and miscellaneous other properties, including sales offices and woodlands management offices.
These sales offices and woodlands management offices generally have one to four employees and serve as administrative offices.
PCA leases the space for regional design centers and numerous other distribution centers, warehouses and facilities.
The equipment in these leased facilities is, in virtually all cases, owned by PCA, except for forklifts and other rolling stock which are generally leased.
We lease the cutting rights to approximately 88,000 acres of timberland located near our Valdosta mill (77,000 acres) and our Counce mill (11,000 acres).
On average, these cutting rights agreements have terms with approximately 11 years remaining.
Our corporate headquarters is located in Lake Forest, Illinois.
The headquarters facility is leased for the next nine years with provisions for two additional five year lease extensions.


Comparison of Five-Year Cumulative Total Return The following graph compares the cumulative total return on Citigroup’s common stock with the S&P 500 Index and the S&P Financial Index over the five-year period extending through December31, 2009.
The graph assumes that $100 was invested on December31, 2004 in Citigroup’s common stock, the S&P 500 Index and the S&P Financial Index and that all dividends were reinvested.


| Jurisdiction Tax year | United States | Mexico | New York State and City | United Kingdom | Germany | Korea | Japan | Brazil |


Foreign currency transaction gains and losses are included in other, net in our consolidated statements of operations, net of losses and gains from any related derivative financial instruments.
We recognized net foreign currency transaction losses of $21 million in 2015, $18 million in 2014, and $11 million in 2013.
Financial Instruments We recognize all derivative financial instruments in our consolidated financial statements at fair value in accordance with ASC Topic 815, Derivatives and Hedging, and we present assets and liabilities associated with our derivative financial instruments on a gross basis in our financial statements.
In accordance with Topic 815, for those derivative instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.
The accounting for changes in the fair value (i. e.  gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship.
Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses on these derivatives generally offset losses and gains on the item being hedged.
We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instruments that are designated as hedging instruments pursuant to Topic 815.
Refer to Note EFair Value Measurements for more information on our derivative instruments.


| As of December 31, 2014 (In percentages) | InfraServ GmbH & Co. Gendorf KG | InfraServ GmbH & Co. Hoechst KG | InfraServ GmbH & Co. Knapsack KG |


| December 31, | 2018 | (in millions) | Other guarantees where amount can be determined | Accrued liability for other guarantees and indemnifications |


| (In millions) Capital Lease Obligations (a) Operating Lease Obligations | 2009 | 2010 | 2011 | 2012 | 2013 | Later years | Sublease rentals | Total minimum lease payments | Less imputed interest costs | Present value of net minimum lease payments |


EQUINIX, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) In February 2011, the Company amended the Bank of America Revolving Credit Line (see Note 7) and extended the maturity date to February 2012.
The amended Bank of America Revolving Credit Line is used primarily as a letter of credit issuing facility, and to fund the Companys working capital if so needed, and is unsecured.
In February 2011, Zion RJ Participa?
?es S. A.
(the Joint Venture), a Brazilian joint-stock company controlled indirectly by the Company and Riverwood Capital L. P.  (Riverwood), entered into a share purchase agreement and other covenants (the Share Purchase Agreement) with the shareholders (the Sellers) of ALOG Data Centers do Brasil S. A.
(ALOG), ALOG and ALOGs subsidiaries, pursuant to which, subject to the satisfaction or waiver of the conditions therein, the Joint Venture will acquire approximately 90% of the outstanding capital stock of ALOG from the Sellers.
The Joint Venture will pay approximately 211,000,000 Brazilian reais in cash, or approximately $127,000,000, to acquire the ALOG capital stock, subject to certain balance sheet adjustments as provided in the Share Purchase Agreement, at the closing of the transaction (the Closing).
A portion of the purchase price will be withheld by the Joint Venture at the Closing to cover potential indemnification claims, and any balance will be paid to the Sellers by the Joint Venture two years following the Closing.
Under the terms of the Share Purchase Agreement, either the Joint Venture or the Sellers may terminate the Share Purchase Agreement if the Closing has not taken place on or before May 10, 2011.18.


| December 31, 2014 December 31, 2013 | Level 1 | (In thousands) | Interest rate swaps |


Our foreign operations are not material to our financial position or results of operations.
At December 31, 2013, we had $7.1 million of cash and short-term investments held in operations outside of the United States.
We indefinitely reinvest our earnings in operations outside the United States; however, if foreign earnings were repatriated at a future date, we would need to accrue and pay taxes.
It is not practicable to determine the amount of unrecognized deferred tax liability on these undistributed earnings because the actual tax liability, if any, is dependent on circumstances existing when the repatriation occurs.


11.
Borrowings Short-Term Borrowings The carrying value of short-term borrowings at December 31, 2012 and 2011, included $100 million under the 2012 revolving credit facility and $100 million under the 2011 revolving credit facility, respectively.2012 Revolving Credit Facility.
In March 2011, the Company entered into a five-year $3.5 billion unsecured revolving credit facility (the 2011 credit facility).
In March 2012, the 2011 credit facility was amended to extend the maturity date by one year to March 2017 and in April 2012 the amount of the aggregate commitment was increased to $3.785 billion (the 2012 credit facility).
The 2012 credit facility permits the Company to request an additional $1.0 billion of borrowing capacity, subject to lender credit approval, increasing the overall size of the 2012 credit facility to an aggregate principal amount not to exceed $4.785 billion.
Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread.
The 2012 credit facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to EBITDA, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at December 31, 2012.
The 2012 credit facility provides back-up liquidity, funds ongoing working capital for general corporate purposes and funds various investment opportunities.
At December 31, 2012, the Company had $100 million outstanding under this facility with an interest rate of 1.085% and a maturity during January 2013.
During January 2013, the Company rolled over the $100 million in borrowings at an interest rate of 1.085% and a maturity during February 2013.
During February 2013, the Company rolled over the $100 million in borrowings at an interest rate of 1.075% and a maturity during March 2013.
Commercial Paper Program.
On October 14, 2009, BlackRock established a commercial paper program (the CP Program) under which the Company could issue unsecured commercial paper notes (the CP Notes) on a private placement basis up to a maximum aggregate amount outstanding at any time of $3.0 billion.
On May 13, 2011, BlackRock increased the maximum aggregate amount that may be borrowed under the CP Program to $3.5 billion.
On May 17, 2012, BlackRock increased the maximum aggregate amount to $3.785 billion.
The CP Program is currently supported by the 2012 credit facility.
As of December 31, 2012 and December 31, 2011, BlackRock had no CP Notes outstanding.
Long-Term Borrowings The carrying value and fair value of long-term borrowings estimated using market prices at December 31, 2012 included the following:


In the first quarter of 2010, we expect higher containerboard and box prices from announced price increases, but most of the earnings benefit will not be realized until the second quarter when the price increase has been passed through to box customers.
We expect mill downtime and higher operating costs from our annual maintenance outage at Counce and our Valdosta mill outage for work related to our energy optimization project.
Much higher recycled fiber costs, higher energy costs associated with colder weather, a higher effective tax rate and higher timing-related benefit costs are also expected in the first quarter.
Considering all these items, we estimate our first quarter earnings will be lower than our fourth quarter earnings of $16 million, which excludes net income of $44 million from alternative fuel mixture tax credits and a $1 million after tax charge from asset disposals related to the energy optimization projects.
Results of Operations Year Ended December 31, 2009 Compared to Year Ended December 31, 2008 The historical results of operations of PCA for the years ended December 31, 2009 and 2008 are set forth below:


| 2012 2011 2010 | Deferred loss on the settlement of the treasury rate lock, net of tax | Deferred gain on the settlement of interest rate swap agreements entered into in connection with the Securitization, net oftax | Unrealized losses related to interest rate swap agreements, net of tax |


| Year ended December 31, (in millions) 2007 2006 2005 | Underwriting: | Equity | Debt | Total Underwriting | Advisory | Total |


| Percentage Increase (Decrease) from | 2009 | (In millions) | NOW accounts | Savings deposits | Time deposits under $100,000 | Noninterest-bearing deposits | Total |


| As of December 31, | 2018 | (in millions) | Balance Sheet Data: | Total investments excluding policy loans | Separate account assets | Total assets | Future policy benefits and policyholders’ account balances | Separate account liabilities | Short-term debt | Long-term debt | Total liabilities | Prudential Financial, Inc. equity | Noncontrolling interests | Total equity |


| Drilling, Equipment, and Purchase Obligations (in millions) Throughput Agreement Transportation and Gathering Operating Lease Obligations Total | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 and thereafter | Total | Retirement and Restoration Plans | 2008 | (in millions) | Change in benefit obligation | Benefit obligation at beginning of year | Service cost | Interest cost | Amendments | Benefits paid | Actuarial (gain) loss | Benefit obligation at end of year | Change in plan assets | Fair value of plan assets at beginning of year | Actual return on plan assets | Employer contributions | Benefits paid | Fair value of plan assets at end of year | Funded status | Funded status at end of year | Net amount recognized in consolidated balancesheets (after adoption of FAS 158) | Amounts recognized in consolidated balance sheets consist of: | Current liabilities | Noncurrent liabilities | Net amount recognized in consolidated balancesheets (after adoption of FAS 158) | Amounts not yet reflected in net periodic benefit cost and included in AOCL | Transition obligation | Prior service (cost) credit | Accumulated loss | AOCL | Cumulative employer contributions in excess of net periodic benefit cost | Net amount recognized in consolidated balance sheet (after adoption of FAS 158) |


| Fiscal year ended December 31, 2005 Fiscal year ended December 25, 2004 Year over Year | Net Sales | Outdoor/Fitness | Marine | Automotive/Mobile | Aviation | Total |


Backlog Firm backlog represents orders for products and services where no contingencies remain before we and the customer are required to perform.
Backlog does not include prospective orders where customer controlled contingencies remain, such as the customers receiving approval from their Board of Directors, shareholders or government and completing financing arrangements.
All such contingencies must be satisfied or have expired prior to recording a new firm order even if satisfying such conditions is highly certain.
Firm orders exclude options.
A number of our customers may have contractual remedies that may be implicated by program delays.
We continue to address customer claims and requests for other contractual relief as they arise.
However, once orders are included in firm backlog, orders remain in backlog until canceled or fulfilled, although the value of orders is adjusted as changes to price and schedule are agreed to with customers.
The increase in contractual backlog during 2012 was due to orders in excess of deliveries, partially reduced by cancellations of orders and changes in projected revenue escalation.
The decrease in unobligated backlog in 2012 was due to incremental funding of the existing multi-year contract for Commercial Airplanes share of the USAF contract for the KC-46A Tanker.
The increase in contractual backlog during 2011 was due to orders in excess of deliveries and changes in projected revenue escalation, partially reduced by cancellations of orders.
The increase in unobligated backlog in 2011 represents Commercial Airplanes share of the USAF contract for the KC-46A Tanker.
Backlog Total backlog is comprised of contractual backlog, which represents work we are on contract to perform for which we have received funding, and unobligated backlog, which represents work we are on contract to perform for which funding has not yet been authorized and appropriated.
BDS total backlog increased by 19% in 2012, from $60,041 million to $71,475 million, primarily due to F-15 and C-17 orders and the contract award for the Space Launch System program received in 2012.
For further details on the changes between periods, refer to the discussions of the individual segments below.


Other Stock Plans The Company has a Stock Award Plan, which allows for grants of common shares to certain key employees.
Distribution of 25% or more of each award is deferred until after retirement or involuntary termination, upon which the deferred portion of the award is distributable in five equal annual installments.
The balance of the award is distributable over five years from the grant date, subject to certain conditions.
In February 2004, this plan was terminated with respect to future grants upon the adoption of the 2004 Plan.
At September 30, 2009 and 2008, awards for 114,197 and 161,145 shares, respectively.


| Year ended December 31, | Cash Settlements: | (in millions) | Income Hedges (External)(1) | Equity Hedges: | Internal-2 | External-3 | Total Equity Hedges | Total Cash Settlements | As of December 31, | Assets (Liabilities): | (in millions) | Income Hedges (External)(4) | Equity Hedges: | Internal-2 | External-5 | Total Equity Hedges-6 | Total Assets (Liabilities) |


| December 31, | 2015 | (in millions) | Syndicated loans | Unpaid principal balance | Excess unpaid principal over fair value | Fair value | Fair value of loans more than 90 days past due | Fair value of loans in nonaccrual status | Difference between fair value and unpaid principal of loans more than 90 days past due, loans in nonaccrual status or both | Debt | Unpaid principal balance | Excess unpaid principal over fair value | Fair value |


Effective January 1, 2003, Marathon adopted the fair value recognition provisions of Statement of Financial Accounting Standards No.123 “Accounting for Stock-Based Compensation” (“SFAS No.123”).
Statement of Financial Accounting Standards No.148 “Accounting for Stock-Based Compensation – Transition and Disclosure” (“SFAS No.148”), an amendment of SFAS No.123, provides alternative methods for the transition of the accounting for stock-based compensation from the intrinsic value method to the fair value method.
Marathon has applied the fair value method to grants made, modified or settled on or after January 1, 2003.
The impact on Marathon’s 2003 net income was not materially different than under previous accounting standards.


| Weighted Average Useful Life (Years) | Purchased technology | Localization | Trademarks | Customer contracts and relationships | Other intangibles |


| December 31, | 2008 | (in millions) | 8.2% notes payable, due 2009 | 3.31% notes payable, due 2011 | 3.63% notes payable, due 2011 | 6.05% notes payable, due 2036 | 8% surplus notes payable, due 2044 | Non-recourse mortgages and notes payable | Other mortgages and notes payable | Total long-term debt | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total future maturities of the long-term debt |


Institutional active AUM ended 2017 at $1.1 trillion, reflecting $5.9 billion of net inflows.
Institutional active represented 19% of long-term AUM and 18% of long-term base fees.
Growth in AUM reflected continued strength in multi-asset products with net inflows of $19.6 billion reflecting ongoing demand for solutions offerings and the LifePath?
target-date suite.
Alternatives net inflows of $0.6 billion were led by inflows into infrastructure, hedge fund solutions and alternatives solutions offerings.
Excluding return of capital and investment of $6.0 billion, alternatives net inflows were $6.6 billion.
In addition, 2017 was another strong fundraising year for illiquid alternatives, and we raised approximately $11 billion in new commitments, which will be a source of future net inflows.
Equity and fixed income net outflows were $13.6 billion and $0.7 billion, respectively.
Institutional index AUM totaled $2.3 trillion at December 31, 2017, reflecting net inflows of $49.1 billion.
Fixed income net inflows of $87.5 billion were driven by demand for liabilitydriven investment solutions, particularly in Europe.
Equity net outflows of $34.8 billion were primarily due to low-fee regional index equity outflows as clients looked to re-allocate, re-balance or meet their cash needs.
Alternatives net outflows of $2.9 billion reflected outflows from passive currency overlays.
Institutional index represented 40% of long-term AUM at December 31, 2017 and accounted for 10% of long-term base fees for 2017.
The Companys institutional clients consist of the following: ?
Pensions, Foundations and Endowments.
BlackRock is among the worlds largest managers of pension plan assets with $2.403 trillion, or 69%, of long-term institutional AUM managed for defined benefit, defined contribution and other pension plans for corporations, governments and unions at December 31, 2017.
The market landscape continues to shift from defined benefit to defined contribution, driving strong flows in our defined contribution channel, which had $46.5 billion of long-term net inflows for the year, driven by continued demand for our LifePath target-date suite.
Defined contribution represented $887.1 billion of total pension AUM, and we remain well positioned to capitalize on the on-going evolution of the defined contribution market and demand for outcome-oriented investments.
An additional $76.4 billion, or 2%, of longterm institutional AUM was managed for other tax-exempt investors, including charities, foundations and endowments.  ?
Official Institutions.
BlackRock managed $195.3 billion, or 6%, of long-term institutional AUM for official institutions, including central banks, sovereign wealth funds, supranationals, multilateral entities and government ministries and agencies at year-end 2017.
These clients often require specialized investment advice, the use of customized benchmarks and training support.  ?
Financial and Other Institutions.
BlackRock is a top independent manager of assets for insurance companies, which accounted for $274.3 billion, or 8%, of institutional long-term AUM at year-end 2017.
Assets managed for other taxable institutions, including corporations, banks and third-party fund sponsors for which we provide sub-advisory services, totaled $506.9 billion, or 15%, of long-term institutional AUM at year-end.


| Location Approximate Square Footage | Alpharetta, Georgia | Arlington, Virginia | Jersey City, New Jersey | Charlotte, North Carolina | Menlo Park, California | Sandy, Utah | Toronto, Canada | New York, New York | Chicago, Illinois |


MFC’s operating profit for 2013 increased $175 million, or 14%, compared to 2012.
The increase was primarily attributable to higher operating profit of approximately $85 million for air and missile defense programs (THAAD and PAC-3) due to increased risk retirements and volume; about $85 million for fire control programs (Sniper?, LANTIRN?
and Apache) due to increased risk retirements and higher volume; and approximately $75 million for tactical missile programs (Hellfire and various programs) due to increased risk retirements.
The increases were partially offset by lower operating profit of about $45 million for the resolution of contractual matters in the second quarter of 2012; and approximately $15 million for various technical services programs due to lower volume partially offset by increased risk retirements.
Adjustments not related to volume, including net profit booking rate adjustments and other matters, were approximately $100 million higher for 2013 compared to 2012.2012 compared to 2011 MFC’s net sales for 2012 were comparable to 2011.
Net sales decreased approximately $130 million due to lower volume and risk retirements on various services programs, and about $60 million due to lower volume from fire control systems programs (primarily Sniper?
; LANTIRN?
; and Apache).
The decreases largely were offset by higher net sales of approximately $95 million due to higher volume from tactical missile programs (primarily Javelin and Hellfire) and approximately $80 million for air and missile defense programs (primarily PAC-3 and THAAD).
MFC’s operating profit for 2012 increased $187 million, or 17%, compared to 2011.
The increase was attributable to higher risk retirements and volume of about $95 million from tactical missile programs (primarily Javelin and Hellfire); increased risk retirements and volume of approximately $60 million for air and missile defense programs (primarily THAAD and PAC-3); and about $45 million from a resolution of contractual matters.
Partially offsetting these increases was lower risk retirements and volume on various programs, including $25 million for services programs.
Adjustments not related to volume, including net profit booking rate adjustments and other matters described above, were approximately $145 million higher for 2012 compared to 2011.
Backlog Backlog increased in 2013 compared to 2012 mainly due to higher orders on the THAAD program and lower sales volume compared to new orders on certain fire control systems programs in 2013, partially offset by lower orders on technical services programs and certain tactical missile programs.
Backlog increased in 2012 compared to 2011 mainly due to increased orders and lower sales on fire control systems programs (primarily LANTIRN?
and Sniper?)
and on various services programs, partially offset by lower orders and higher sales volume on tactical missiles programs.
Trends We expect MFC’s net sales to be flat to slightly down in 2014 compared to 2013, primarily due to a decrease in net sales on technical services programs partially offset by an increase in net sales from missiles and fire control programs.
Operating profit is expected to decrease in the high single digit percentage range, driven by a reduction in expected risk retirements in 2014.
Accordingly, operating profit margin is expected to slightly decline from 2013.


In fiscal 2008, revenues in the credit union systems and services business segment increased 14% from fiscal 2007.
All revenue components within the segment experienced growth during fiscal 2008.
License revenue generated the largest dollar growth in revenue as Episys?, our flagship core processing system aimed at larger credit unions, experienced strong sales throughout the year.
Support and service revenue, which is the largest component of total revenues for the credit union segment, experienced 34 percent growth in EFT support and 10 percent growth in in-house support.
Gross profit in this business segment increased $9,344 in fiscal 2008 compared to fiscal 2007, due primarily to the increase in license revenue, which carries the highest margins.


| December 31, 2011 December 31, 2010 | Dollars in millions | Home Equity | Temporary Modifications | Permanent Modifications | Total Home Equity | Residential Mortgages | Permanent Modifications | Non-Prime Mortgages | Permanent Modifications | Residential Construction | Permanent Modifications | Total Bank-Owned Consumer Real Estate Related Loan Modifications |


| 2013 2012 2011 | Statutory U.S. federal tax rate | State income taxes, net of federal tax benefit | Foreign earnings taxed at lower effective rates | Nondeductible acquisition costs | U.S. domestic manufacturing deduction | Impairment | Reorganization tax benefit | Net change in valuation allowance | Net change in unrecognized tax benefits | Other | Effective income tax rate |


UDR, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) DECEMBER 31, 2018


CONTINGENCIES Environmental The cost of complying with environmental laws is a fundamental and substantial cost of our business.
At December 31, 2012, we had $1.2 billion recorded in our consolidated balance sheets for environmental obligations attributed to CERCLA or analogous state programs and for estimated future costs associated with environmental obligations that are considered probable based on specific facts and circumstances.
During 2012, we incurred environmental capital expenditures and other environmental costs (including our joint venture partners' shares) of $612 million for programs to comply with applicable environmental laws and regulations that affect our operations, compared to $387 million in 2011 and $372 million in 2010.
The increase in environmental costs in 2012, compared with 2011 and 2010, primarily relates to higher expenditures for land and settlements of environmental matters (see Note 13 for further discussion).
For 2013, we expect to incur approximately $600 million of aggregate environmental capital expenditures and other environmental costs, which are part of our overall 2013 operating budget.
The timing and amount of estimated payments could change as a result of changes in regulatory requirements, changes in scope and timing of reclamation activities, the settlement of environmental matters and as actual spending occurs.
Refer to Note 13 for further information about environmental regulation, including significant environmental matters.
Asset Retirement Obligations We recognize AROs as liabilities when incurred, with the initial measurement at fair value.
These obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to income.
Reclamation costs for disturbances are recorded as an ARO in the period of disturbance.
Our cost estimates are reflected on a third-party cost basis and comply with our legal obligation to retire tangible, long-lived assets.
At December 31, 2012, we had $1.1 billion recorded in our consolidated balance sheets for AROs.
Spending
ILLUMINA, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued) Advertising Costs The Company expenses advertising costs as incurred.
Advertising costs were approximately $440,000 for 2003, $267,000 for 2002 and $57,000 for 2001.
Income Taxes A deferred income tax asset or liability is computed for the expected future impact of differences between the financial reporting and tax bases of assets and liabilities, as well as the expected future tax benefit to be derived from tax loss and credit carryforwards.
Deferred income tax expense is generally the net change during the year in the deferred income tax asset or liability.
Valuation allowances are established when realizability of deferred tax assets is uncertain.
The effect of tax rate changes is reflected in tax expense during the period in which such changes are enacted.
Foreign Currency Translation The functional currencies of the Company's wholly owned subsidiaries are their respective local currencies.
Accordingly, all balance sheet accounts of these operations are translated to U. S.  dollars using the exchange rates in effect at the balance sheet date, and revenues and expenses are translated using the average exchange rates in effect during the period.
The gains and losses from foreign currency translation of these subsidiaries' financial statements are recorded directly as a separate component of stockholders' equity under the caption 'Accumulated other comprehensive income.
 Stock-Based Compensation At December 28, 2003, the Company has three stock-based employee and non-employee director compensation plans, which are described more fully in Note 5.
As permitted by SFAS No.123, Accounting for Stock-Based Compensation, the Company accounts for common stock options granted, and restricted stock sold, to employees, founders and directors using the intrinsic value method and, thus, recognizes no compensation expense for options granted, or restricted stock sold, with exercise prices equal to or greater than the fair value of the Company's common stock on the date of the grant.
The Company has recorded deferred stock compensation related to certain stock options, and restricted stock, which were granted prior to the Company's initial public offering with exercise prices below estimated fair value (see Note 5), which is being amortized on an accelerated amortization methodology in accordance with Financial Accounting Standards Board Interpretation Number ('FIN'') 28.
Pro forma information regarding net loss is required by SFAS No.123 and has been determined as if the Company had accounted for its employee stock options and employee stock purchases under the fair value method of that statement.
The fair value for these options was estimated at the dates of grant using the fair value option pricing model (Black Scholes) with the following weighted-average assumptions for 2003, 2002 and 2001:


Income Taxes—Income tax expense and other income tax related information contained in the financial statements for periods before the spin-off are presented as if the Company filed its own tax returns on a stand-alone basis, while similar information for periods after the spin-off reflect the Company’s positions to be filed in its own tax returns in the future.
Income tax expense and other related information are based on the prevailing statutory rates for U. S.  federal income taxes and the composite state income tax rate for the Company for each period presented.
State and local income and franchise tax provisions are allocable to contracts in process and, accordingly, are included in general and administrative expenses.
Deferred income taxes are recorded when revenues and expenses are recognized in different periods for financial statement purposes than for tax return purposes.
Deferred tax asset or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect.
Determinations of the expected realizability of deferred tax assets and the need for any valuation allowances against these deferred tax assets were evaluated based upon the stand-alone tax attributes of the Company, and an $18 million valuation allowance was deemed necessary as of December 31, 2011.
No valuation allowance was deemed necessary as of December 31, 2010.
Uncertain tax positions meeting the more-likely-than-not recognition threshold, based on the merits of the position, are recognized in the financial statements.
We recognize the amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority.
If a tax position does not meet the minimum statutory threshold to avoid payment of penalties, we recognize an expense for the amount of the penalty in the period the tax position is claimed or expected to be claimed in our tax return.
Penalties, if probable and reasonably estimable, are recognized as a component of income tax expense.
We also recognize accrued interest related to uncertain tax positions in income tax expense.
The timing and amount of accrued interest is determined by the applicable tax law associated with an underpayment of income taxes.
See Note 12: Income Taxes.
Under existing GAAP, changes in accruals associated with uncertainties are recorded in earnings in the period they are determined.


| Years ended December 31, | 2018 | Stock-Settled Awards: | Awards granted | Weighted-average grant-date fair value (per award) | Total fair value of vested awards distributed | Cash-Settled Awards: | Awards granted | Weighted-average grant-date fair value (per award) | Total fair value of vested awards distributed | Performance-Based Awards: | Awards granted | Weighted-average grant-date fair value (per award) | Total fair value of vested awards distributed | Stock-Settled Awards | Awards | Non-vested as of January 1, 2018 | Granted | Vested | Forfeited | Non-vested as of December 31, 2018 | Total unrecognized compensation expense remaining | Weighted-average years expected to be recognized over |


The Company cannot reasonably estimate possible losses, if any, in excess of those for which it has accrued, because it cannot predict how many additional claims may be brought against the Company (or parties the Company has an obligation to indemnify) in the future, the allegations in such claims, the possible outcomes, or the impact of tort reform legislation that may be enacted at the State or Federal levels.
A declaratory judgment action was filed in January 2004 in the Circuit Court of Cook County, Illinois by Continental Casualty Company and related companies (CNA) against the Company and certain of its other historical general liability insurers.
CNA provided the Company with both primary and additional layer insurance, and, in conjunction with other insurers, is currently defending and indemnifying the Company in its pending asbestos-related product liability claims.
The lawsuit seeks to determine the extent of insurance coverage available to the Company including whether the available limits exhaust on a per occurrence or an aggregate basis, and to determine how the applicable coverage responsibilities should be apportioned.
On August 15, 2005, the Court issued an interim order regarding the apportionment matter.
The interim order has the effect of making insurers responsible for all defense and settlement costs pro rata to time-on-the-risk, with the pro-ration method to hold the insured harmless for periods of bankrupt or unavailable coverage.
Appeals of the interim order were denied.
However, the issue is reserved for appellate review at the end of the action.
In addition to the primary insurance available for asbestos-related claims, the Company has substantial additional layers of insurance available for potential future asbestos-related product claims.
As such, the Company continues to believe that its coverage is sufficient to meet foreseeable liabilities.
Although it is impossible to predict the outcome of pending or future claims or the impact of tort reform legislation that may be enacted at the State or Federal levels, due to the encapsulated nature of the products, the Companys experiences in aggressively defending and resolving claims in the past, and the Companys significant insurance coverage with solvent carriers as of the date of this filing, management does not believe that asbestos-related product liability claims are likely to have a material adverse effect on the Companys results of operations, cash flows or financial condition.
PART I berths at the end of 2011.
There are approximately 10 ships with an estimated 34,000 berths that are expected to be placed in service in the North American cruise market between 2012 and 2016.
Europe In Europe, cruising represents a smaller but growing sector of the vacation industry.
It has experienced a compound annual growth rate in cruise guests of approximately 9.6% from 2007 to 2011 and we believe this market has significant continued growth potential.
We estimate that Europe was served by 104 ships with approximately 100,000 berths at the beginning of 2007 and by 121 ships with approximately 155,000 berths at the end of 2011.
There are approximately 10 ships with an estimated 28,000 berths that are expected to be placed in service in the European cruise market between 2012 and 2016.
The following table details the growth in the global, North American and European cruise markets in terms of cruise guests and estimated weighted-average berths over the past five years: (1) Source: Our estimates of the number of global cruise guests, and the weighted-average supply of berths marketed globally, in North America and Europe are based on a combination of data that we obtain from various publicly available cruise industry trade information sources including Seatrade Insider and Cruise Line International Association.
In addition, our estimates incorporate our own statistical analysis utilizing the same publicly available cruise industry data as a base.
(2) Source: Cruise Line International Association based on cruise guests carried for at least two consecutive nights for years 2007 through 2010.
Year 2011 amounts represent our estimates (see number 1 above).
(3) Source: European Cruise Council for years 2007 through 2010.
Year 2011 amounts represent our estimates (see number 1 above).
othor Markets In addition to expected industry growth in North America and Europe as discussed above, we expect the Asia/Pacific region to demonstrate an even higher growth rate in the near term, although it will continue to represent a relatively small sector compared to North America and Europe.
We compete with a number of cruise lines; however.
our principal competitors are Carnival Corporation & plc, which owns, among others, Aida Cruises, Carnival Cruise Lines, Costa Cruises, Cunard Line, Holland America Line, Iberocruceros,P&O Cruises and Princess Cruises; Disney Cruise Line: MSC Cruises; Norwegian Cruise Line and Oceania Cruises.
Cruise lines compete with other vacation alternatives such as land-based resort hotels and sightseeing destinations for consum- ers' leisure time.
Demand for such activities is influ- enced by political and general economic conditions.
Companies within the vacation market are dependent on consumer discretionary spending.
OPERATING STRATEGIES Our principal operating strategies are to: Â· protect the health, safety and security of our guests and employees and protect the environment in which our vessels and organization operate.
Â· strengthen and support our human capital in orderto better serve our global guest base and grow our business.
Â· further strengthen our consumer engagement in order to enhance our revenues while continuing to expand and diversify our guest mix through interna- tional guest sourcing.
Â· manage the efficiency of our operating expenditures and ensure adequate cash and liquidity.
with the overall goal of maximizing our return on invested capital and long-term shareholder value, increase the awareness and market penetration of our brands throughout the world.
Â· strategically invest in our existing fleet through the revitalization of existing ships and the transfer of key innovations across each brand, while expanding our fleet with the new state-of-the-art cruise ships recently delivered and on order, Â· capitalize on the portability and flexibility of our ships by deploying them into those markets and itinerariesthat provide opportunities to optimize returns, while continuing our focus on existing key markets.
Â· further enhance our technological capabilities to support ongoing operations and initiatives, and Â· maintain strong relationships with travel agencies.
the principal industry distribution channel, while enhancing our consumer outreach programs.


| Years Ended December 31, | 2012 | (in millions) | Direct premiums | Reinsurance ceded | Net premiums |


| 2007 2006 | Financial Services Businesses | ASSETS | Fixed maturities: | Available for sale, at fair value | Held to maturity, at amortized cost | Trading account assets supporting insurance liabilities, at fair value | Other trading account assets, at fair value | Equity securities, available for sale, at fair value | Commercial loans | Policy loans | Securities purchased under agreements to resell | Other long-term investments | Short-term investments | Total investments | Cash and cash equivalents | Accrued investment income | Reinsurance recoverables | Deferred policy acquisition costs | Other assets | Separate account assets | TOTAL ASSETS | LIABILITIES AND ATTRIBUTED EQUITY | LIABILITIES | Future policy benefits | Policyholders’ account balances | Policyholders’ dividends | Reinsurance payables | Securities sold under agreements to repurchase | Cash collateral for loaned securities | Income taxes | Short-term debt | Long-term debt | Other liabilities | Separate account liabilities | Total liabilities | COMMITMENTS AND CONTINGENT LIABILITIES | ATTRIBUTED EQUITY | Accumulated other comprehensive income | Other attributed equity | Total attributed equity | TOTAL LIABILITIES AND ATTRIBUTED EQUITY |


| 2012 2011 | Balance at January 1 | Accruals for warranties issued during the year | Accruals related to pre-existing warranties | Settlements made (in cash or kind) during the year | Other, net (including currency translation) | Balance at December 31 |


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


Entergy Texas, Inc.  and Subsidiaries Management’s Financial Discussion and Analysis 406 State and Local Rate Regulation and Fuel-Cost Recovery The rates that Entergy Texas charges for its services significantly influence its financial position, results of operations, and liquidity.
Entergy Texas is regulated and the rates charged to its customers are determined in regulatory proceedings.
The PUCT, a governmental agency, is primarily responsible for approval of the rates charged to customers.
Filings with the PUCT 2011 Rate Case In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. ?
?The rate case also proposed a purchased power recovery rider. ?
?On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. ?
?In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. ?
?The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas’s recovery of purchased power capacity costs and Entergy Texas’s proposal to defer its MISO transition expenses. ?
?In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. ?
?A hearing was held in late-April through early-May 2012.
In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. ?
?The order included a finding that “a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital.
”?
?The order also provided for increases in depreciation rates and the annual storm reserve accrual. ?
?The order also reduced Entergy Texas’s proposed purchased power capacity costs, stating that they are not known and measurable; reduced Entergy Texas’s regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates; and reduced Entergy’s Texas’s fuel reconciliation recovery by $4


| Fiscal Years Ended March 31, | 2015 | (in $000's) | Impella product revenue | Service and other revenue | Other products | Total product revenue | Funded research and development | Total revenue |