Revenues for Gibraltar Life increased $243 million, from $2.695 billion in 2003 to $2.938 billion in 2004, including a $200 million favorable impact of currency fluctuations.
Excluding the impact of the currency fluctuations, revenues increased $43 million, from $2.888 billion in 2003 to $2.931 billion in 2004, due primarily to increased premiums from single pay contracts of $125 million for which there was a corresponding increase in policyholders’ benefits.
Sales of single pay business in 2003 consisted primarily of endowment contracts, for which premiums collected from customers are not included in reported revenues.
Excluding the effect of single pay contracts, revenue declined due to a reduction in the in force business.
Benefits and Expenses 2005 to 2004 Annual Comparison.
Benefits and expenses, as shown in the table above under “—Operating Results,” increased $860 million, from $5.425 billion in 2004 to $6.285 billion in 2005, including benefits and expenses of our Aoba Life business, and a net unfavorable impact of $52 million related to currency fluctuations.
Excluding the impact of currency fluctuations, benefits and expenses increased $808 million, from $5.448 billion in 2004 to $6.256 billion in 2005.
On the same basis, benefits and expenses of our Japanese Life Planner operation increased $608 million from 2004 to 2005, including the benefits and expenses from our Aoba Life business.
Benefits and expenses from our Korean operation increased $105 million, from $707 million in 2004 to $812 million in 2005.
The increases in benefits and expenses reflect increases in policyholders’ benefits, including changes in reserves, resulting from the aging of business in force and a greater volume of business in force, which was driven by new sales and strong persistency, as well as the contribution of the acquired Aoba Life business in Japan.
A $5 million reduction in the liability for Japanese guaranty fund assessments and a $5 million reduction in reserves due to refinements relative to recently introduced products of our Korean business during 2005 were partial offsets to the growth in benefits and expenses.
Gibraltar Life’s benefits and expenses increased $75 million, from $2.536 billion in 2004 to $2.611 billion in 2005, including an $8 million favorable impact of currency fluctuations.
Excluding the impact of the currency fluctuations, benefits and expenses increased $83 million, from $2.502 billion in 2004 to $2.585 billion in 2005, with an increase corresponding to the increased premiums from single pay contracts discussed above partially offset by expected attrition of older business and a reduction in our liability for guaranty fund assessments of approximately $10 million, together with a benefit of $9 million from refinements in reserves for a block of business during the 2005 period.
Benefits and expenses in the prior year period were reduced by $11 million from the extinguishment of a liability that was established in connection with Gibraltar Life’s reorganization in 2001.2004 to 2003 Annual Comparison.
Benefits and expenses increased $663 million, from $4.762 billion in 2003 to $5.425 billion in 2004, including an unfavorable impact of $316 million related to currency fluctuations.
Excluding the impact of currency fluctuations, benefits and expenses increased $347 million reflecting a $318 million increase in our international insurance operations other than Gibraltar Life, and a $29 million increase from Gibraltar Life.
On this same basis, benefits and expenses of our Japanese Life Planner operation increased $125 million from 2003 to 2004, but reflect lower policyholders’ benefits, including changes in reserves, in 2004 related to the single pay contracts noted above.
Benefits and expenses from our Korean operation increased $146 million from $561 million in 2003 to $707 million in 2004.
The increase in benefits and expenses in both operations, excluding the effect of the single pay contracts, reflects an increase in policyholders’ benefits, including changes in reserves, resulting from the aging of business in force and a greater volume of business in force, which was driven by new sales and continued strong persistency.
Gibraltar Life’s benefits and expenses increased $211 million, from $2.325 billion in 2003 to $2.536 billion in 2004, including an increase of $182 million related to currency fluctuations.
Excluding the impact of the currency fluctuations, benefits and expenses increased $29 million from 2003 to 2004, reflecting an increase in policyholders’ benefits, including changes in reserves associated with single pay contracts and the greater increases in policy reserves, in 2004, associated with a lower than anticipated level of surrenders.
In addition, benefits and expenses for 2003 include a $9 million benefit from decreases in our estimated liability for guaranty fund assessments for which 2004 includes only a minimal benefit.
These increases were partially offset by a lower level of policyholders’ benefits due primarily to a reduction in the in force business and the reduction in reserves related to the extinguishment of a liability established in connection with Gibraltar Life’s reorganization as well as a more favorable level of general and administrative expenses compared to 2003.


Entergy Corporation and Subsidiaries Notes to Financial Statements this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term.
The amount was a net regulatory liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.
As of December 31, 2013, System Energy had future minimum lease payments (reflecting an implicit rate of 5.13%), which are recorded as long-term debt, as follows:


| Shares (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term  (in years) Aggregate Intrinsic Value (in millions) | Nonvested at January 1, 2009 | Vested | Granted | Reinvested Dividends | Forfeited / Expired | Nonvested at December 31, 2009 | RSUs Expected to Vest |


| Balance at January 1, 2010 $25,621 | Increases in current period tax positions | Decreases in current period tax positions | Balance at December 31, 2010 | Increases in current period tax positions | Decreases in current period tax positions | Balance at December 31, 2011 | Increases in current period tax positions | Decreases in current period tax positions | Balance at December 31, 2012 |


of the Board of Directors (the Committee) establishes an overall pool of stock awards available for grant in any given year based on performance.
For stock-settled awards, the company issues new stock into the marketplace and generally does not repurchase shares in connection with the issuance of new awards.
Prior to 2006, only stock options and stock appreciation rights had been issued under the Plan.
In 2006, the company also issued restricted stock units and performance share units under the Plan.
If all options outstanding at December 31, 2006, including some options that were previously granted under an earlier plan, and all remaining options that could be granted under the Plan were exercised, the company’s common shares would increase by approximately 25 million shares.
In December 2004, the FASB issued Statement 123R, which revises Statement 123 and supersedes APB 25.
Statement 123R eliminates the alternative of using the intrinsic value method of accounting for share-based awards that was provided under APB 25.
Under APB 25, the company generally did not recognize compensation expense related to the issuance of stock options; however, compensation expense was recognized related to changes in the intrinsic value of stock appreciation rights issued under the Plan.
Statement 123R established a fair-value-based measurement of share-based awards and requires that the cost of these awards be recognized in the company’s Consolidated Financial Statements.
The cost is recognized in the Consolidated Statement of Earnings over the period from the date of grant to the date when the award is no longer contingent upon the employee providing additional service (the required service period).
For awards that vest upon retirement, the required service period does not extend beyond the date an employee is eligible for retirement, including early retirement.
For awards that continue to vest following job elimination as a result of restructuring or the closure or sale of a facility, the required service period does not extend beyond the date the position is eliminated.
These situations can result in compensation expense being recognized over a period less than the stated vesting period.
The company adopted Statement 123R as of the beginning of fiscal year 2006, using the modified prospective transition method.
Accordingly, prior period amounts have not been restated.
Prior to adoption of Statement 123R, the company defined the past year as the service period and share-based employee compensation expense was recognized in the company’s pro forma disclosures in accordance with Statement 123 as of the option grant dates.
Therefore, under the modified prospective method, no additional compensation expense will be recognized in the company’s Consolidated Statement of Earnings related to equity-classified awards issued prior to 2006, unless those awards are subsequently modified.
Share-based compensation expense (income) recognized in 2006 for all share-based awards was $28 million, which included a $6 million charge in the first quarter for the cumulative effect to revalue the liability for stock appreciation rights as of December 25, 2005, from the intrinsic value of the outstanding awards to the estimated fair value of the outstanding awards.
Total compensation expense recognized for share-based awards in 2005 and 2004 was $11 million and $9 million, respectively.
The total income tax benefit recognized in the Consolidated Statement of Earnings for share-based awards for 2006, 2005 and 2004 was $9 million, $4 million and $3 million, respectively.
Statement 123R requires the benefits of tax deductions in excess of the compensation cost recognized for share-based awards to be classified as financing cash inflows rather than operating cash inflows, on a prospective basis on the Consolidated Statement of Cash Flows.
The company realized $23 million in excess tax benefits from share-based payment arrangements in 2006, which is shown as “Excess tax benefits from share-based payment arrangements” on the Consolidated Statement of Cash Flows.
The company realized tax benefits on the exercise of stock options of $15 million in both 2005 and 2004.
These amounts are included in other operating cashflows.
As of December 31, 2006, there was approximately $31 million of total unrecognized compensation cost related to nonvested equity-classified share-based compensation arrangements granted under the Plan that is expected to be recognized over a weighted-average period of approximately 2.5 years.
In addition, as of December 31, 2006, there was approximately $1 million of unrecognized compensation related to nonvested liability-classified stock appreciation rights that are expected to vest over a weighted-average period of approximately 3.1 years.
The following table illustrates the effect on 2005 and 2004 net earnings and net earnings per share as if the company had applied the fair value recognition provisions of Statement 123 to share-based employee compensation.
For awards issued prior to 2006, the company defined the prior year as the service period for purposes of applying the fair value recognition provisions of Statement 123.
As a result, share-based employee compensation expense is reflected as of the option grant dates in the following table:


| Weighted Average Assumptions 2011 2012 2013 | Expected volatility | Risk-free interest rate | Expected dividend yield | Expected life |


| (in millions, except per share and ratio data) 2003 2002 Change | Revenue | Noninterest expense | Provision for credit losses | Net income | Net income per share – diluted | Average common equity | Return on average common equity (“ROCE”) | Tier 1 capital ratio | Total capital ratio | Tier 1 leverage ratio | Year ended December 31, | (in millions) | Treasury Services | Investor Services | Institutional Trust Services(a) | Other(a)(b) | Total Treasury & Securities Services |


| Pension Benefits December 31 Other Benefits December 31 | ($ in millions) | Change in Benefit Obligation | Benefit obligation at beginning of year | Service cost | Interest cost | Plan participants' contributions | Plan amendments | Actuarial loss (gain) | Benefits paid | Curtailments | Medicare Part D subsidy | Benefit obligation at end of year | Change in Plan Assets | Fair value of plan assets at beginning of year | Gain on plan assets | Employer contributions | Plan participants' contributions | Benefits paid | Medicare Part D subsidy | Fair value of plan assets at end of year | Funded status | Amounts Recognized in the Consolidated Statements of Financial Position: | Pension plan assets | Current liability-1 | Non-current liability-2 | Accumulated other comprehensive loss (income) (pre-tax) related to: | Prior service costs (credits) | Net actuarial loss (gain) |


Lease Operating Expenses (LOE) LOE includes several key components, such as direct operating costs, repair and maintenance, and workover costs.
Direct operating costs generally trend with commodity prices and are impacted by the type of commodity produced and the location of properties (i. e. , offshore, onshore, remote locations, etc.
).
Fluctuations in commodity prices impact operating cost elements both directly and indirectly.
They directly impact costs such as power, fuel, and chemicals, which are commodity price based.
Commodity prices also affect industry activity and demand, thus indirectly impacting the cost of items such as rig rates, labor, boats, helicopters, materials, and supplies.
Oil, which contributed more than half of our 2015 production, is inherently more expensive to produce than natural gas.
Repair and maintenance costs are typically higher on offshore properties.
During 2015, LOE decreased $384 million, or 17 percent, on an absolute dollar basis compared to 2014.
On a per-unit basis, LOE decreased $0.90, or 9 percent compared to 2014.
During 2014, LOE decreased $412 million, or 16 percent, on an absolute dollar basis compared to 2013.
On a per-unit basis, LOE decreased $0.58, or 5 percent, compared to 2013.
These reductions reflect our continued focus on cost reductions consistent with the current price environment.


LOW INCOME HOUSING TAX CREDIT PARTNERSHIPS Huntington makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit (LIHTC) pursuant to Section 42 of the Internal Revenue Code.
The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act.
The primary activities of the limited partnerships include the identification, development, and operation of multi family housing that is leased to qualifying residential tenants.
Generally, these types of investments are funded through a combination of debt and equity.
Huntington is a limited partner in each Low Income Housing Tax Credit Partnership.
A separate unrelated third party is the general partner.
Each limited partnership is managed by the general partner, who exercises full and exclusive control over the affairs of the limited partnership.
The general partner has all the rights, powers and authority granted or permitted to be granted to a general partner of a limited partnership under the Ohio Revised Uniform Limited Partnership Act.
Duties entrusted to the general partner of each limited partnership include, but are not limited to: investment in operating companies, company expenditures, investment of excess funds, borrowing funds, employment of agents, disposition of fund property, prepayment and refinancing of liabilities, votes and consents, contract authority, disbursement of funds, accounting methods, tax elections, bank accounts, insurance, litigation, cash reserve, and use of working capital reserve funds.
Except for limited rights granted to consent to certain transactions, the limited partner(s) may not participate in the operation, management, or control of the limited partnership's business, transact any business in the limited partnership's name or have any power to sign documents for or otherwise bind the limited partnership.
In addition, the general partner may only be removed by the limited partner(s) in the event the general partner fails to comply with the terms of the agreement and/or is negligent in performing its duties.
Huntington believes the general partner of each limited partnership has the power to direct the activities which most significantly affect their performance of each partnership, therefore, Huntington has determined that it is not the primary beneficiary of any LIHTC partnership.
Huntington uses the equity or effective yield method to account for its investments in these entities.
These investments are included in accrued income and other assets.
At December 31, 2013 and 2012, Huntington has commitments of $556.9 million (net of amortization: $390.6) and $532.1 million (net of amortization: $391.9), respectively, of which $412.5 million and $380.0 million, respectively, were funded.
The unfunded portion is included in accrued expenses and other liabilities.22.


| Change | 2015 | (In millions, except percentages and ratios) | New orders | Net sales | Book to bill ratio | Operating income | Operating margin | Non-GAAP Adjusted Results | Non-GAAP adjusted operating income | Non-GAAP adjusted operating margin |


ITEM 7.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows.
MD&A is organized as follows: ?
Overview.
Discussion of our business and overall analysis of financial and other highlights affecting the company in order to provide context for the remainder of MD&A.  ?
Critical Accounting Estimates.
Accounting estimates that we believe are most important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.  ?
Results of Operations.
An analysis of our financial results comparing 2013 to 2012 and comparing 2012 to 2011.  ?
Liquidity and Capital Resources.
An analysis of changes in our balance sheets and cash flows, and discussion of our financial condition and potential sources of liquidity.  ?
Fair Value of Financial Instruments.
Discussion of the methodologies used in the valuation of our financial instruments.  ?
Contractual Obligations and Off-Balance-Sheet Arrangements.
Overview of contractual obligations, contingent liabilities, commitments, and off-balance-sheet arrangements outstanding as of December 28, 2013, including expected payment schedule.
The various sections of this MD&A contain a number of forward-looking statements that involve a number of risks and uncertainties.
Words such as anticipates, expects, intends, plans, believes, seeks, estimates, continues, may, will, should, and variations of such words and similar expressions are intended to identify such forward-looking statements.
In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, uncertain events or assumptions, and other characterizations of future events or circumstances are forward-looking statements.
Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this filing and particularly in Risk Factors in Part I, Item 1A of this Form 10-K.  Our actual results may differ materially, and these forward-looking statements do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that had not been completed as of February 14, 2014.


| At December 31, | (Dollars in millions) | U.S. Reinsurance | International | Bermuda | Insurance | Total | (Some amounts may not reconcile due to rounding.) |


| Contractual Maturity Date | 2011 | (in millions) | Off-Balance Sheet Commitments: | Recourse to Prudential Insurance | Recourse limited to assets of separate accounts | Total Off-Balance Sheet Commitments | On-Balance Sheet Commitments: | Recourse to Prudential Insurance | Recourse limited to assets of separate accounts | Total On-Balance Sheet Commitments | Total Commitments |


(1) Amount represents AUM acquired in the BofA Global Capital Management transaction in April 2016.
2016 Compared with 2015 Net gains on investments of $57 million in 2016 decreased $52 million from 2015 due to lower net gains in 2016.
Net gains on investments in 2015 included a $40 million gain related to the BKCA acquisition and a $35 million unrealized gain on a private equity investment.
Interest and dividend income increased $14 million from 2015 primarily due to higher dividend income in 2016.2015 Compared with 2014 Net gains on investments of $109 million in 2015 decreased $45 million from 2014 due to lower net gains in 2015.
Net gains on investments in 2015 included a $40 million gain related to the BKCA acquisition and a $35 million unrealized gain on a private equity investment.
Net gains on investments in 2014 included the positive impact of the monetization of a nonstrategic, opportunistic private equity investment.
Interest expense decreased $28 million from 2014 primarily due to repayments of long-term borrowings in the fourth quarter of 2014.


| At December 31, 2013-1 | Years to Maturity | Credit Rating-2 | (dollars in millions) | AAA | AA | A | BBB | Investment grade | Non-investment grade | Total | Industry | (dollars in millions) | Energy | Utilities | Consumer discretionary | Healthcare | Funds, exchanges and other financial services-2 | Industrials | Information technology | Consumer staples | Materials | Real Estate | Telecommunications services | Other | Total |


2015 Asset Impairments During 2015, certain deepwater Gulf of Mexico, Eastern Mediterranean and Equatorial Guinea properties were written down to their estimated fair values using a discounted cash flow model.
The cash flow model included managements estimates of future crude oil and natural gas production, commodity prices based on forward commodity price curves or contract prices as of the date of the estimate, operating and development costs, and discount rates.
Impairment charges of $481 million resulted from reductions in the forward crude oil prices as of December 31, 2015.
In addition, we recorded approximately $47 million of impairment primarily related to revisions in expected field abandonment and other costs for deepwater Gulf of Mexico and Eastern Mediterranean properties.
During fourth quarter 2015, we executed an agreement to divest our interest in the Alon A and Alon C offshore Israel licenses, which include the Karish and Tanin fields.
As a result, these assets were written down to expected proceeds less costs to sell, resulting in a $5 million impairment.2014 Asset Impairments As a result of declining crude oil prices at the end of 2014, we recorded impairment charges of $250 million related to certain onshore US and deepwater Gulf of Mexico properties.
During 2014, South Raton in the deepwater Gulf of Mexico was shut-in due to mechanical issues; therefore, we recorded additional impairment charges of $74 million for South Raton in fourth quarter 2014.
Additionally, the asset carrying values of certain crude oil and natural gas properties in the deepwater Gulf of Mexico and offshore Israel increased when we recorded associated increases in asset retirement obligations.
We determined that the recorded carrying values of some of these assets were not recoverable from future cash flows and recorded impairment expense of $51 million.
During third quarter 2014, we reclassified certain non-core properties as assets held for sale.
The assets were written down to expected proceeds less costs to sell, resulting in a $31 million impairment.
In March 2014, the operator of the MacCulloch North Sea field notified the working interest owners that expected field abandonment costs would be higher than originally projected, and that field abandonment would occur sooner than anticipated.
As a result of this new information, we adjusted the asset retirement obligation to reflect the updated estimate of abandonment costs and timing.
We assessed the asset for impairment and determined that it was impaired.2013 Asset Impairments We recorded impairments of the Mari-B field, due to natural field decline, and certain non-core, onshore US properties upon reclassification to assets held for sale.
The Mari-B field was written down to its estimated fair value using a discounted cash flow model, as described above.
The fair values of onshore US assets held for sale were based on anticipated sales proceeds less costs to sell.
See Note 13.
Fair Value Measurements and Disclosures.


The Company’s life and annuity products all have minimum interest rate guarantees in their fixed accounts.
As of December 31, 2011, these guarantees range up to 5%.
To the extent the yield on the Company’s invested asset portfolio declines below its target spread plus the minimum guarantee, the Company’s profitability would be negatively affected.
Guarantees Owing to conditions then-prevailing in the credit markets and the isolated defaults of unaffiliated structured investment vehicles held in the portfolios of money market funds advised by its Columbia Management Investment Advisers, LLC subsidiary (the ‘‘2a-7 Funds’’), the Company closely monitored the net asset value of the 2a-7 Funds during 2008 and


| Amounts Due By Period | (dollars in millions) | Long-term Debt (including Interest) | Operating Leases | Purchase Obligations | Total |


| Years Ended December 31, | 2015 | United States - Financing Share | Retail installment and lease share of Ford retail sales (excl. Fleet) | Wholesale | Europe - Financing Share(incl. Fleet) | Retail installment and lease share of total Ford sales | Wholesale |


NOTE 16  COMMON STOCK As of June 30, 2008, the Companys authorized common stock consists of 650 million shares of Class A Common Stock, par value $.01 per share, and 240 million shares of Class B Common Stock, par value $.01 per share.
Class B Common Stock is convertible into Class A Common Stock, in whole or in part, at any time and from time to time at the option of the holder, on the basis of one share of Class A Common Stock for each share of Class B Common Stock converted.
Holders of the Companys Class A Common Stock are entitled to one vote per share and holders of the Companys Class B Common Stock are entitled to ten votes per share.
Information about the Companys common stock outstanding is as follows:


| Balances | In millions of dollars at year end | Citigroup parent company | Senior notes-1 | Subordinated notes | Junior subordinated notes relating to trust preferred securities | Other Citigroup subsidiaries | Senior notes-2 | Subordinated notes | Secured debt | Citigroup Global Markets Holdings Inc.-3 | Senior notes | Subordinated notes | Citigroup Funding Inc.-4(5) | Senior notes | Total | Senior notes | Subordinated notes | Junior subordinated notes relating to trust preferred securities | Other | Total |


| Year Ended December 31, 2017 GDV As of December 31, 2017 Cards | (in billions) | Mastercard Branded Programs1,2 | Consumer Credit | Consumer Debit and Prepaid | Commercial Credit and Debit |


| Year ended December 31 – dollars in millions 2018 2017 2016 2015 2014 | Allowance for loan and lease losses – January 1 | Gross charge-offs | Commercial | Commercial real estate | Equipment lease financing | Home equity | Residential real estate | Credit card | Other consumer (a) | Total gross charge-offs | Recoveries | Commercial | Commercial real estate | Equipment lease financing | Home equity | Residential real estate | Credit card | Other consumer (a) | Total recoveries | Net (charge-offs) | Provision for credit losses | Net decrease / (increase) in allowance for unfunded loan commitments andletters of credit | Other (b) | Allowance for loan and lease losses – December 31 | Allowance as a percentage of December 31: | Loans (b) | Nonperforming loans | As a percentage of average loans: | Net charge-offs | Provision for credit losses | Allowance for loan and lease losses (b) | Allowance as a multiple of net charge-offs | 2018 | December 31 dollars in millions | Commercial | Commercial real estate | Equipment lease financing | Home equity | Residential real estate | Credit card | Other consumer (a) | Total |


| (Dollars per barrel) 2009 2008 2007 | Chicago LLS 6-3-2-1 | U.S. Gulf Coast LLS 6-3-2-1 | Sweet/Sour differential(a) |


| Land $120,900 | Building | Acquired above-market leases | Acquired in-place leases | Assets acquired | Mortgage note payable at fair value | Acquired below-market leases | Liabilities assumed | Net assets acquired |


| Millions 2015 2014 2013 % Change 2015 v 2014 % Change 2014 v 2013 | Other income | Interest expense | Income taxes |


| December 31 | 2010 | (Dollars in millions) | Maximum loss exposure-1 | On-balance sheet assets | Trading account assets | Derivative assets | Available-for-saledebt securities | All other assets | Total | On-balance sheet liabilities | Derivative liabilities | Long-term debt | Total | Total assets of VIEs |


development phase prior to ship construction.
This crucial milestone also authorized the Navy to pursue an initial production quantity of up to eight ships under a two-lead-ship strategy.
The Congress continued its support of the program by fully funding the Navys 2006 DD(X) budget requirements.
Recognizing the long-term value of two surface-combatant builders to the Navy, the Congress stipulated that the ships be procured at two separate shipyards.
Marine Systems leads one of two industry teams competitively awarded contracts for the design and construction of the Navys Littoral Combat Ship (LCS), a key element of the Navys plan to address asymmetric maritime threats.
As part of the groups industry team, the Information Systems and Technology group is developing the ships core computing infrastructure and electronics.
The teams first high-speed LCS trimaran is now under construction at a teammates Alabama facility.
Delivery to the Navy is scheduled for October 2007.
The multi-mission LCS platform is intended for defense against terrorist swarm boats, mines and submarine threats in coastal areas.
The groups auxiliary ships support the U. S.  militarys forward presence and combat operations by delivering essential military equipment, ammunition, food, fuel, parts and supplies to U. S.  forces around the world.
In support of the Navys global logistics requirements, Marine Systems is leading the innovation of at-sea replenishment through the design and construction of the Lewis and Clark-class (T-AKE) dry cargo/ammunition ship.
The first new Navy combat-logistics ship design in almost 20 years, T-AKE is optimized for efficient cargo transfer and is the first modern Navy ship to incorporate proven commercial marine technologies, such as integrated electric-drive propulsion.
Integrated electric-drive propulsion is designed to minimize T-AKE operations and maintenance costs over an expected 40-year life.
In May, the group launched the first T-AKE, which is scheduled for delivery to the Navy in mid-2006.
The group also designs and manufactures commercial ships, including double-hull oil tankers.
The company delivered the third tanker in a fourship contract to its customer in November, and the fourth tanker is scheduled for completion in 2006.
In addition, the Marine Systems group provides ship and submarine repair and other comprehensive support services to the Navy and commercial customers in a variety of locations throughout the United States and around the globe.
Internationally, the group provides key U. S.  allies essential program management, planning and design support for submarine and surface-ship construction programs.
Net sales for the Marine Systems group were 22 percent of the companys consolidated net sales in 2005, 25 percent in 2004 and 26 percent in 2003.
Net sales by major products and services were as follows:


| Year Ended December 31, | 2007 | (in thousands) | Interest expense, net | Capitalized interest | Year Ended December 31, | 2007 | Electricity sales (in thousands) | Electricity generation expense (in thousands) | Operating income (in thousands) | Power generation (MW) | Average power price ($/Kwh) |


| Investment Groups Asset Allocation Ranges | U.S. equity securities | Non-U.S. equity securities | Debt securities | Cash | Other |


In 2002, we produced about 1.4 million tons of kraft linerboard at our mills located in Counce, Tennessee and Valdosta, Georgia.
We also produced about 0.8 million tons of semi-chemical corrugating medium at our mills located in Tomahawk, Wisconsin and Filer City, Michigan.
We currently lease the cutting rights to approximately 140,000 acres of timberland located near our Counce and Valdosta mills.
We also have supply agreements on about 600,000 of the 800,000 acres of timberland we sold during 1999 and 2000.
Our converting operations produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods.
We also produce multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations.
Finally, we are a large producer of meat boxes and wax-coated boxes for the agricultural industry.


| ($ in millions) 2008 2007 2006 | Common stock, retained income and other shareholders' equity items | Accumulated other comprehensive income | Total shareholders' equity | Debt | Total capital resources | Ratio of debt to shareholders' equity | Ratio of debt to capital resources |


Core Net Interest Income  Managed Basis We manage core net interest income  managed basis, which adjusts reported net interest income on a FTE basis for the impact of marketbased activities and certain securitizations, net of retained securities.
As discussed in the Global Markets business segment section beginning on page 47, we evaluate our market-based results and strategies on a total market-based revenue approach by combining net interest income and noninterest income for Global Markets.
We also adjust for loans that we originated and subsequently sold into credit card securitizations.
Noninterest income, rather than net interest income and provision for credit losses, is recorded for assets that have been securitized as we are compensated for servicing the securitized assets and record servicing income and gains or losses on securitizations, where appropriate.
We believe the use of this non-GAAP presentation provides additional clarity in managing our results.
An analysis of core net interest income  managed basis, core average earning assets  managed basis and core net interest yield on earning assets  managed basis, which adjust for the impact of these two non-core items from reported net interest income on a FTE basis, is shown below.
Core net interest income on a managed basis increased $2.3 billion to $52.8 billion for 2009 compared to 2008.
The increase was driven by the favorable interest rate environment and the acquisitions of Merrill Lynch and Countrywide.
These items were partially offset by the impact of deleveraging the ALM portfolio earlier in 2009, lower consumer loan levels and the adverse impact of our nonperforming loans.
For more information on our nonperforming loans, see Credit Risk Management on page 66.
On a managed basis, core average earning assets increased $130.1 billion to $1.4 trillion for 2009 compared to 2008 primarily due to the acquisitions of Merrill Lynch and Countrywide partially offset by lower loan levels and earlier deleveraging of the AFS debt securities portfolio.
Core net interest yield on a managed basis decreased 19 bps to 3.69 percent for 2009 compared to 2008, primarily due to the addition of lower yielding assets from the Merrill Lynch and Countrywide acquisitions, reduced consumer loan levels and the impact of deleveraging the ALM portfolio earlier in 2009 partially offset by the favorable interest rate environment.


| 2012 2011 Percent Increase (Decrease) | (In millions) | Mainline passenger | Regional passenger | Cargo | Other | Total operating revenues | Year Ended December 31, | 2015 | (In millions) | Operating income (loss) – GAAP | Operating special items, net -1 | Operating income (loss) excluding special items | Net income (loss) – GAAP | Operating special items, net -1 | Nonoperating special items, net -2 | Reorganization items, net -3 | Income tax special items -4 | Net income (loss) excluding special items |


Notes to Consolidated Financial Statements Sumitomo Mitsui Financial Group, Inc.  (SMFG) provides the firm with credit loss protection on certain approved loan commitments (primarily investment-grade commercial lending commitments).
The notional amount of such loan commitments was $27.51 billion and $29.24 billion as of December 2014 and December 2013, respectively.
The credit loss protection on loan commitments provided by SMFG is generally limited to 95% of the first loss the firm realizes on such commitments, up to a maximum of approximately $950 million.
In addition, subject to the satisfaction of certain conditions, upon the firm’s request, SMFG will provide protection for 70% of additional losses on such commitments, up to a maximum of $1.13 billion, of which $768 million and $870 million of protection had been provided as of December 2014 and December 2013, respectively.
The firm also uses other financial instruments to mitigate credit risks related to certain commitments not covered by SMFG.
These instruments primarily include credit default swaps that reference the same or similar underlying instrument or entity, or credit default swaps that reference a market index.
Warehouse Financing.
The firm provides financing to clients who warehouse financial assets.
These arrangements are secured by the warehoused assets, primarily consisting of corporate loans and commercial mortgage loans.
Contingent and Forward Starting Resale and Securities Borrowing Agreements/Forward Starting Repurchase and Secured Lending Agreements The firm enters into resale and securities borrowing agreements and repurchase and secured lending agreements that settle at a future date, generally within three business days.
The firm also enters into commitments to provide contingent financing to its clients and counterparties through resale agreements.
The firm’s funding of these commitments depends on the satisfaction of all contractual conditions to the resale agreement and these commitments can expire unused.
Letters of Credit The firm has commitments under letters of credit issued by various banks which the firm provides to counterparties in lieu of securities or cash to satisfy various collateral and margin deposit requirements.
Investment Commitments The firm’s investment commitments of $5.16 billion and $7.12 billion as of December 2014 and December 2013, respectively, include commitments to invest in private equity, real estate and other assets directly and through funds that the firm raises and manages.
Of these amounts, $2.87 billion and $5.48 billion as of December 2014 and December 2013, respectively, relate to commitments to invest in funds managed by the firm.
If these commitments are called, they would be funded at market value on the date of investment.
Leases The firm has contractual obligations under long-term noncancelable lease agreements, principally for office space, expiring on various dates through 2069.
Certain agreements are subject to periodic escalation provisions for increases in real estate taxes and other charges.
The table below presents future minimum rental payments, net of minimum sublease rentals.


| Issue Date Face Value  (in millions) Interest Rate Maturity Date | January 14, 2010 | January 14, 2010 | June 21, 2010 | June 21, 2010 | November 18, 2010 | November 18, 2010 |


| As of and for the Year Ended December 31, | (dollars in millions) | Reserve for Unfunded Lending Commitments—Beginning | Provision for unfunded lending commitments | Reserve for unfunded lending commitments—ending | Total Allowance for Credit Losses—Ending |


We review external data and our own historical trends for health care costs to determine the health care cost trend rate assumptions.
The Company’s U. S.  postretirement benefit plans are primarily defined dollar benefit plans that limit the effects of medical inflation because the plans have established dollar limits for determining our contributions.
As a result, the effect of a 1 percentage point change in the assumed health care cost trend rate would not be significant to the Company.


| AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2002 2001 2000 | Revenues | Operating Income | Net Income | Current Assets | Noncurrent Assets | Current Liabilities | Noncurrent Liabilities | Stockholder's Equity |


Our losses from future catastrophic events could exceed our projections.
We use projections of possible losses from future catastrophic events of varying types and magnitudes as a strategic underwriting tool.
We use these loss projections to estimate our potential catastrophe losses in certain geographic areas and decide on the placement of retrocessional coverage or other actions to limit the extent of potential losses in a given geographic area.
These loss projections are approximations, reliant on a mix of quantitative and qualitative processes, and actual losses may exceed the projections by a material amount, resulting in a material adverse effect on our financial condition and results of operations.


The above table reflects the total estimated future benefits to be paid from the plan, including both our share of the benefit cost and the participants’ share of the cost, which is funded by their contributions to the plan.
The assumptions used in calculating the estimated future benefit payments are the same as those used to measure the benefit obligation for the year ended December 31, 2009.
The information that follows shows supplemental information for our defined benefit pension plans.
Certain key summary data is shown separately for qualified and non-qualified plans.


| December 31, Credit exposure Nonperforming(c) | (in millions) | Loans retained | Loans held-for-sale | Loans at fair value | Loans – reported | Derivative receivables | Receivables from customers and other(a) | Total wholesale credit-related assets | Lending-related commitments | Total wholesale credit exposure | Credit derivatives usedin credit portfolio management activities(b) | Liquid securities and other cash collateral held against derivatives |


| Defined Benefit Pension Plans Retiree Medical and LifeInsurance Plans | 2006 | Asset category: | Equity securities | Debt securities | Other | 100% |


Item 3.
Legal Proceedings.
See Note 18, Commitments and Contingencies, in Item 8, Financial Statements and Supplementary Data.


coupons and expected maturity values of individually selected bonds.
The yield curve was developed for a universe containing the majority of U. S. -issued AA-graded corporate bonds, all of which were non callable (or callable with make-whole provisions).
Historically, for each plan, the discount rate was developed as the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments.
The expected long-term rate of return on plan assets is based on historical and projected rates of return, prior to administrative and investment management fees, for current and planned asset classes in the plans investment portfolios.
Assumed projected rates of return for each of the plans projected asset classes were selected after analyzing historical experience and future expectations of the returns and volatility of the various asset classes.
Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolio was developed, adjusted for historical and expected experience of active portfolio management results compared to the benchmark returns and for the effect of expenses paid from plan assets.
The Companys pension expense increases as the expected return on assets decreases.
Assumed health care cost trend rates have a significant effect on the amounts reported for the other postretirement benefit plans.
The health care cost trend rate is based on historical rates and expected market conditions.
A one-percentage-point change in assumed health care cost trend rates would have the following effects:


| Years ended December 31, | Cash Flow Data | Net income, adjusted to reconcile to net cash provided by operating activities1 | Net cash (used in) provided by working capital2 | Changes in other non-current assets and liabilities | Net cash provided by operating activities | Net cash used in investing activities | Net cash provided by (used in) financing activities |


| Component Changes in Multi-Asset Class AUM | (in millions) | Asset allocation and balanced | Target date/risk | Fiduciary | Multi-asset |


Unless otherwise stated, all amounts are net of income tax.
During the year ended December 31, 2009, MetLife’s income (loss) from continuing operations, net of income tax decreased $5.8 billion to a loss of $2.3 billion from income of $3.5 billion in the comparable 2008 period.
The year over year change is predominantly due to a $5.2 billion unfavorable change in net investment gains (losses) to losses of $4.6 billion, net of related adjustments, in 2009 from gains of $644 million, net of related adjustments, in 2008.
We manage our investment portfolio using disciplined Asset/Liability Management principles, focusing on cash flow and duration to support our current and future liabilities.
Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable timing and amount, while optimizing, net of income tax, risk-adjusted net investment income and risk-adjusted total return.
Our investment portfolio is heavily weighted toward fixed income investments, with over 80% of our portfolio invested in fixed maturity securities and mortgage loans.
These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration of insurance liabilities.
Other invested asset classes including, but not limited to equity securities, other limited partnership interests and real estate and real estate joint ventures provide additional diversification and opportunity for long term yield enhancement in addition to supporting the cash flow and duration objectives of our investment portfolio.
We also use derivatives as an integral part of our management of the investment portfolio to hedge certain risks, including changes in interest rates, foreign currencies, credit spreads and equity market levels.
Additional considerations for our investment portfolio include current and expected market conditions and expectations for changes within our unique mix of products and business segments.


| Years DomesticPension Plan ForeignPension Plans Domestic PostretirementBenefit Plan | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 - 2028 | Percentage Increase (Decrease) from | 2005  (Dollars in  millions) | NOW accounts | Savings deposits | Time deposits under $100,000 | Noninterest-bearing deposits | Total | Effects on Pre-tax Income Resulting from Reserves Re-estimates | (Dollars in millions) | Accident Years | 2004 and prior | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | Total calendar year effect | Canada-1 | Translation adjustment | Re-estimate of net reserve after translation adjustment | -1 | (Some amounts may not reconcile due to rounding.) |


a.
Revisions to cash flow estimates were primarily related to updated closure plans that included revised cost estimates and accelerated timing of certain closure activities.
ARO costs may increase or decrease significantly in the future as a result of changes in regulations, changes in engineering designs and technology, permit modifications or updates, changes in mine plans, inflation or other factors and as actual reclamation spending occurs.
ARO activities and expenditures generally are made over an extended period of time commencing near the end of the mine life; however, certain reclamation activities may be accelerated if legally required or if determined to be economically beneficial.
Legal requirements in New Mexico, Arizona, Colorado and other states require financial assurance to be provided for the estimated costs of reclamation and closure, including groundwater quality protection programs.
FCX has satisfied financial assurance requirements by using a variety of mechanisms, such as performance guarantees, financial capability demonstrations, trust funds, surety bonds, letters of credit and collateral.
The applicable regulations specify financial strength tests that are designed to confirm a companys or guarantors financial capability to fund estimated reclamation and closure costs.
The amount of financial assurance FCX is required to provide will vary with changes in laws, regulations and reclamation and closure requirements, and cost estimates.
At December 31, 2012, FCXs financial assurance obligations associated with these closure and reclamation costs totaled $970 million, of which $601 million was in the form of guarantees issued by FCX and financial capability demonstrations.
At December 31, 2012, FCX had trust assets totaling $161 million (included in other assets), which are legally restricted to fund a portion of its AROs for properties in New Mexico as required by New Mexico regulatory authorities.
New Mexico Environmental and Reclamation Programs.
FCXs New Mexico operations are regulated under the New Mexico Water Quality Act and regulations adopted under that act by the Water Quality Control Commission (WQCC).
The New Mexico Environment Department (NMED) has required each of these operations to submit closure plans for NMEDs approval.
The closure plans must include measures to assure meeting groundwater quality standards following the closure of discharging facilities and to abate any groundwater or surface water contamination.
In March 2009, the Tyrone operation appealed the WQCC Final Order, dated February 4, 2009, regarding location of the places of withdrawal of water, a legal criterion used to determine where groundwater quality standards must be met at FCXs New Mexico mining sites.
In December 2010, FCX's Tyrone mine entered into a settlement agreement with NMED that calls for a stay of the appeal while NMED and the WQCC complete several administrative actions, including renewal of Tyrones closure permit consistent with the terms of the settlement, review and approval of a groundwater abatement plan and adoption of alternative abatement standards, and adoption of new groundwater discharge permit rules for copper mines.
If the administrative actions are concluded consistent with the terms of the settlement agreement within the period of the stay, then Tyrone will move to dismiss the appeal.
In December 2012, Tyrone and NMED agreed to extend the period to conclude the administrative actions through December 31, 2013.
The Court of Appeals also extended the stay for another year.
Finalized closure plan requirements, including those resulting from the actions to be taken under the settlement agreement, could result in increases in closure costs for FCX's New Mexico operations.
FCXs New Mexico operations also are subject to regulation under the 1993 New Mexico Mining Act (the Mining Act) and the related rules that are administered by the Mining and Minerals Division (MMD) of the New Mexico Energy, Minerals and Natural Resources Department.
Under the Mining Act, mines are required to obtain approval of plans describing the reclamation to be performed following cessation of mining operations.
At December 31, 2012, FCX had accrued reclamation and closure


As of September 30, 2009, RJ Bank had commitments to lend $5.2 million to borrowers whose loans were classified as nonperforming


| Actual Ratio Actual Amount Minimum Ratio Minimum Capital Requirement | (Dollars in thousands) | As of December 31, 2003: | Total risk-based capital ratio | Company | Bank | Tier 1 risk-based capital ratio | Company | Bank | Tier 1 leverage ratio | Company | Bank | As of December 31, 2002: | Total risk-based capital ratio | Company | Bank | Tier 1 risk-based capital ratio | Company | Bank | Tier 1 leverage ratio | Company | Bank |


| Change | 2005 | (in thousands) | IBNR-1 | Reported claims in process-2 | Other medical expenses payable-3 | Total medical and other expenses payable | Reconciliation to cash flow statement: | Medical and other expenses payable from acquisition | Change in medical and other expenses payable in cash flow statement |


| Year Ended December 31, 2016 | PFI ExcludingClosed Block Division | Yield-1 | ($ in millions) | Fixed maturities | Trading account assets supporting insurance liabilities | Equity securities | Commercial mortgage and other loans | Policy loans | Short-term investments and cash equivalents | Other investments | Gross investment income before investment expenses | Investment expenses | Investment income after investment expenses | Investment results of other entities and operations-2 | Total investment income |


| For the Years Ended December 31, | 2018 | (Dollars in millions) | Operating revenues | Operation and maintenance | Depreciation and amortization | General taxes | (Gain) on asset dispositions and purchases | Interest, net | Other income (expenses) | Income before income taxes | Provision for income taxes | Net income attributable to common shareholders |


COMMITMENTS AND CONTINGENCIES Legal Proceedings As of December?31, 2017, the Company and the Operating Partnership were not involved in any material litigation nor, to managements knowledge, was any material litigation threatened against us or our portfolio which if adversely determined could have a material adverse impact on us.
Environmental Matters Our management believes that the properties are in compliance in all material respects with applicable Federal, state and local ordinances and regulations regarding environmental issues.
Management is not aware of any environmental liability that it believes would have a materially adverse impact on our financial position, results of operations or cash flows.
Management is unaware of any instances in which it would incur significant environmental cost if any of our properties were sold.
Employment Agreements We have entered into employment agreements with certain executives, which expire between December?2018 and February?2020.
The minimum cash-based compensation, including base salary and guaranteed bonus payments, associated with these employment agreements total $5.4?million for 2018.
In addition these employment agreements provide for deferred compensation awards based on our stock price and which were valued at $1.6?million on the grant date.
The value of these awards may change based on fluctuations in our stock price.
Insurance We maintain all-risk property and rental value coverage (including coverage regarding the perils of flood, earthquake and terrorism, excluding nuclear, biological, chemical, and radiological terrorism (NBCR)), within three property insurance programs and liability insurance.
Separate property and liability coverage may be purchased on a stand-alone basis for certain assets, such as the development of One Vanderbilt.
Additionally, our captive insurance company, Belmont Insurance Company, or Belmont, provides coverage for NBCR terrorist acts above a specified trigger, although if Belmont is required to pay a claim under our insurance policies, we would ultimately record the loss to the extent of Belmonts required payment.
However, there is no assurance that in the future we will be able to procure coverage at a reasonable cost.
Further, if we experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those


| Qualified Defined Benefit  Pension Plans Retiree Medical and Life Insurance Plans | 2015 | Change in benefit obligation | Beginning balance | Service cost | Interest cost | Benefits paid(a) | Actuarial losses (gains) | New longevity assumptions | Plan amendments and acquisitions(b) | Medicare Part D subsidy | Participants’ contributions | Ending balance | Change in plan assets | Beginning balance at fair value | Actual return on plan assets | Benefits paid(a) | Company contributions | Medicare Part D subsidy | Participants’ contributions | Ending balance at fair value | Unfunded status of the plans |


Managements Discussion and Analysis of Financial Condition and Results of Operations  (Continued) (Amounts in Millions, Except Per Share Amounts) As discussed below, we took measures in 2009 to extend our debt maturities.
From time to time we evaluate market conditions and financing alternatives for opportunities to raise additional financing or otherwise improve our liquidity profile and enhance our financial flexibility.
Our ability to access the capital markets depends on a number of factors, which include those specific to us, such as our credit rating, and those related to the capital markets, such as the amount or terms of available credit.
Should we access the capital markets, there can be no guarantee that we would be able to access new sources of liquidity on commercially reasonable terms.
Funding Requirements Our most significant funding requirements include: our operations, non-cancelable operating lease obligations, acquisitions, capital expenditures, debt service, preferred stock dividends, contributions to pension and postretirement plans and taxes.
Additionally, we may be required to make payments to minority owners if put options related to prior acquisitions are exercised.
In any twelve-month period, we maintain substantial flexibility over certain significant uses of cash, including our capital expenditures and cash used for new acquisitions.
Notable funding requirements include: ?
Debt service  The remaining $213.7 aggregate principal amount of our 2010 Notes matures on November 15, 2010.
We expect to use available cash to reduce our debt in 2010.
The remainder of our debt is primarily longterm, with maturities scheduled from 2011 to 2023.
See table below for the maturity schedule of our long-term debt.  ?
Acquisitions  During 2009 we paid approximately $66.0 of deferred payments related to acquisitions completed in previous years.
We expect to continue to evaluate strategic opportunities to grow and to increase our ownership interests in current investments, particularly in our digital and marketing services offerings, and to expand our presence in high-growth markets.  ?
Contributions to pension and postretirement plans  Our funding policy regarding our pension plan is to contribute amounts necessary to satisfy minimum pension funding requirements, plus such additional amounts as we consider appropriate to improve the plans funded status.
During 2009, we contributed $31.9 to our foreign pension plans and contributions to the domestic pension plan were negligible.
For 2010, we expect to contribute $25.2 to our foreign pension plans and $9.2 to our domestic pension plans.
A significant portion of our contributions to the foreign pension plans relate to the Interpublic Pension Plan in the U. K.  (the U. K.  Pension Plan).
Additionally, we are in the process of modifying the schedule of employer contributions for the U. K.  Pension Plan and we expect to finalize this during 2010.
As a result, we expect our contributions to our foreign pension plans to increase from current levels in 2010 and subsequent years.  ?
Preferred stock dividends  We pay regular quarterly dividends on our Series B Preferred Stock of $6.9, or $27.6 annually.
The following summarizes our estimated contractual cash obligations and commitments as of December 31, 2009 and their effect on our liquidity and cash flow in future periods.


| Years Ended December 31, | 2010 | (In millions) | Income (loss) from continuing operations, net of income tax | Less: Net investment gains (losses) | Less: Net derivative gains (losses) | Less: Adjustments to continuing operations -1 | Less: Provision for income tax (expense) benefit | Operating earnings | Less: Preferred stock dividends | Operating earnings available to common shareholders |


Recurring Fair Value Measurements In accordance with accounting principles generally accepted in the United States, certain assets and liabilities are required to be recorded at fair value on a recurring basis.
For our Company, the only assets and liabilities that are adjusted to fair value on a recurring basis are investments in equity and debt securities classified as trading or available-for-sale and derivative financial instruments.
Additionally, the Company adjusts the carrying value of certain long-term debt as a result of the Companys fair value hedging strategy.
Investments in Trading and Available-for-Sale Securities The fair values of our investments in trading and available-for-sale securities using quoted market prices from daily exchange traded markets are based on the closing price as of the balance sheet date and are classified as Level 1.
The fair values of our investments in trading and available-for-sale securities classified as Level 2 are priced using quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data.
Inputs into these valuation techniques include actual trade data, benchmark yields, broker/dealer quotes and other similar data.
These inputs are obtained from quoted market prices, independent pricing vendors or other sources.
Derivative Financial Instruments The fair values of our futures contracts are primarily determined using quoted contract prices on futures exchange markets.
The fair values of these instruments are based on the closing contract price as of the balance sheet date and are classified as Level 1.
The fair values of our derivative instruments other than futures are determined using standard valuation models.
The significant inputs used in these models are readily available in public markets, or can be derived from observable market transactions, and therefore have been classified as Level 2.
Inputs used in these standard valuation models for derivative instruments other than futures include the applicable exchange rates, forward rates, interest rates, discount rates and commodity prices.
The standard valuation model for options also uses implied volatility as an additional input.
The discount rates are based on the historical U. S.  Deposit or U. S.  Treasury rates, and the implied volatility specific to options is based on quoted rates from financial institutions.
Included in the fair value of derivative instruments is an adjustment for nonperformance risk.
The adjustment is based on current credit default swap (CDS) rates applied to each contract, by counterparty.
We use our counterpartys CDS rate when we are in an asset position and our own CDS rate when we are in a liability position.
The adjustment for nonperformance risk did not have a significant impact on the estimated fair value of our derivative instruments.


Debt and Capital 6.75% Notes In June 2008, we sold $500 million principal amount of notes due July 15, 2013 (Notes).
The Notes bear interest at a fixed rate of 6.75% per year, payable semiannually on January 15 and July 15, beginning January 15, 2009.
The interest payable on the Notes is subject to adjustment if either Moodys Investors Service, Inc.  or Standard & Poors Ratings Services downgrades to below investment grade the rating assigned to the Notes.
Net proceeds from the sale of the Notes were $496 million, after an initial issuance discount of approximately $1 million and other transaction costs.
We may redeem some or all of the Notes at any time, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to the redemption date and an applicable make-whole amount as described in the indenture relating to the Notes.
The Notes are unsecured and unsubordinated obligations and rank equally with all of our other unsecured and unsubordinated debt.
The Notes contain covenants that, among other things, limit our ability and the ability of our North American subsidiaries to incur debt secured by liens, enter into sale and lease-back transactions and, in the case of such subsidiaries, incur debt.


Contingent Obligations We have significant contingent obligations that arise in the ordinary course of business, which include the following: Legal Various legal proceedings, claims and investigations are pending against us.
Legal contingencies are discussed in Note 20 to our Consolidated Financial Statements.
Environmental Remediation We are involved with various environmental remediation activities and have recorded a liability of $524 million at December 31, 2017.
For additional information, see Note 11 to our Consolidated Financial Statements.
Off-Balance Sheet Arrangements We are a party to certain off-balance sheet arrangements including certain guarantees.
For discussion of these arrangements, see Note 12 to our Consolidated Financial Statements.


Net sales of the Retail segment grew to $1.185 billion during 2004 from $621 million and $283 million, in 2003 and 2002, respectively.
The increases in net sales during both 2004 and 2003 reflect the impact of new store openings for each fiscal year, including the opening of 21 new stores in 2004 and 25 new stores in 2003.
An increase in average revenue per store also contributed to the segments strong sales in fiscal 2004.
With an average of 76 stores open during 2004, the Retail segment achieved annualized revenue per store of approximately $15.6 million, as compared to $11.5 million in 2003 with a 54 store average and $10.2 million in 2002 with a 28 store average.
As measured by the Companys operating segment reporting, the Retail segment reported profit of $39 million during fiscal 2004 as compared to losses of $5 million and $22 million during 2003 and 2002, respectively.
This improvement is primarily attributable to the segments year-over-year increase in average quarterly revenue per store, the impact of opening new stores, and the segments year-over-year increase in net sales, which resulted in higher leverage on occupancy, depreciation and other fixed costs.
Expansion of the Retail segment has required and will continue to require a substantial investment in fixed assets and related infrastructure, operating lease commitments, personnel, and other operating expenses.
Capital expenditures associated with the Retail segment were $104 million in fiscal 2004, bringing the total capital expenditures since inception of the Retail segment to approximately $394 million.
As of September 25, 2004, the Retail segment had approximately 2,100 employees and had outstanding operating lease commitments associated with retail store space and related facilities of approximately $436 million.
The Company would incur substantial costs should it choose to terminate its Retail segment or close individual stores.
Such costs could adversely affect the Companys results of operations and financial condition.


| 2009 2008 | Acquired rights to use technology | Investments | Security and other deposits | Prepaid royalties | Deferred compensation plan assets | Restricted cash | Prepaid land lease | Prepaid rent | Other | Other assets |


| 2013 2012 | At December 31,(in millions) | Liability for unpaid claims and claims adjustment expense(a) | Future policy benefits for life and accident and health insurance contracts | Reserve for unearned premiums | Reinsurance assets(b) |


| Year Ended December 31, | 2015 | Nonqualified ordinary dividends | Qualified ordinary dividends | Return of capital | 100.0% |


| Year-over-Year Change | (dollars in millions) | Net cash provided by operating activities | Net cash used in investing activities | Net cash used in financing activities |


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


| In millions December 31 2018 December 312017 | Commitments to extend credit | Total commercial lending | Home equity lines of credit | Credit card | Other | Total commitments to extend credit | Net outstanding standby letters of credit (a) | Reinsurance agreements (b) | Standby bond purchase agreements (c) | Other commitments (d) | Total commitments to extend credit and other commitments | December 31, 2018 | Dollars in millions | Geography | California | Florida | Maryland | Virginia | Texas | Illinois | Pennsylvania | New York | Ohio | North Carolina | All other states | Total commercial real estate loans | Property Type | Multifamily | Office | Retail | Hotel/Motel | Industrial/Warehouse | Senior Housing | Mixed Use | Other | Total commercial real estate loans |


| Year Ended December 31, | 2011 | $ | (In millions, except percentages) | North America | Europe and Africa | Asia-Pacific | South America | Total |


| Advanced Engineered Materials Consumer Specialties Industrial Specialties Acetyl Intermediates Other Activities Eliminations Consolidated | (In $ millions) | Year ended December 31, 2010 | Net sales | Other (charges) gains, net | Equity in net earnings (loss) of affiliates | Earnings (loss) from continuing operations before tax | Depreciation and amortization | Capital expenditures | Goodwill and intangible assets, net | Total assets | Year ended December 31, 2009 - As Adjusted (Note 4) | Net sales | Other (charges) gains, net | Equity in net earnings (loss) of affiliates | Earnings (loss) from continuing operations before tax | Depreciation and amortization | Capital expenditures | Goodwill and intangible assets, net | Total assets | Year ended December 31, 2008 - As Adjusted (Note 4) | Net sales | Other (charges) gains, net | Equity in net earnings (loss) of affiliates | Earnings (loss) from continuing operations before tax | Depreciation and amortization | Capital expenditures |


| At July 31, 2017 At July 31, 2016 | (In millions) | Assets: | Cash equivalents, primarily money market funds and time deposits | Available-for-sale debt securities: | Municipal bonds | Municipal auction rate securities | Corporate notes | U.S. agency securities | Total available-for-sale securities | Total assets measured at fair value on a recurring basis | Liabilities: | Senior notes-1 |


credit facilities.
As such, our foreign cash and cash equivalents are not expected to be a key source of liquidity to our domestic operations.
At September 30, 2019, we had approximately $2.9 billion of availability under our committed credit facilities, primarily under our revolving credit facility, the majority of which matures on July 1, 2022.
This liquidity may be used to provide for ongoing working capital needs and for other general corporate purposes, including acquisitions, dividends and stock repurchases.
Certain restrictive covenants govern our maximum availability under the credit facilities.
We test and report our compliance with these covenants as required and we were in compliance with all of these covenants at September 30, 2019.
At September 30, 2019, we had $129.8 million of outstanding letters of credit not drawn upon.
Cash and cash equivalents were $151.6 million at September 30, 2019 and $636.8 million at September 30, 2018.
We used a significant portion of the cash and cash equivalents on hand at September 30, 2018 in connection with the closing of the KapStone Acquisition.
Primarily all of the cash and cash equivalents at September 30, 2019 were held outside of the U. S.  At September 30, 2019, total debt was $10,063.4 million, $561.1 million of which was current.
At September 30, 2018, total debt was $6,415.2 million, $740.7 million of which was current.
The increase in debt was primarily related to the KapStone Acquisition.


Costs and Expenses Cost of Product Revenue Cost of product revenue for fiscal 2015 increased by $2.6 million, or 7%, to $39.9 million from $37.3 million for fiscal 2014.
Gross margin was 83% for fiscal 2015 and 80% for fiscal 2014.
The increase in cost of product revenues was related to increased Impella demand and higher production volume and costs to support growing demand for our Impella products.
Gross margin was impacted favorably by higher manufacturing production volume, fewer shipments of AIC consoles, improved efficiencies in manufacturing production and a favorable Euro in the second half of fiscal 2015 Research and Development Expenses Research and development expenses for fiscal 2015 increased by $5.3 million, or 17%, to $36.0 million from $30.7 million in fiscal 2014.
The increase in research and development expenses was primarily due to operating expenses associated with the ECP business in Berlin that we acquired in July 2014 and a $1.5 million up-front license payment made in April 2014 for optical sensor technology.
Selling, General and Administrative Expenses Selling, general and administrative expenses for fiscal 2015 increased by $18.4 million, or 17%, to $125.7 million from $107.3 million in fiscal 2014.
The increase in selling, general and administrative expenses was primarily due to the hiring of additional U. S.  field sales and clinical personnel, increased spending on marketing initiatives as we continue to educate physicians on the benefits of hemodynamic support, higher stock-based compensation expense, higher excise taxes associated with the medical device tax in the U. S.  and legal and professional expenses related to the ECP acquisition.
These amounts were partially offset by lower legal expenses during fiscal 2015.
Income Tax Provision We recorded an income tax benefit of $84.9 million in fiscal 2015 compared to an income tax expense of $1.2 million in fiscal 2014.
The income tax benefit in fiscal 2015 was comprised of an $87.1 million deferred tax benefit primarily due to the release of our valuation allowance on certain of our deferred tax assets in the quarter ended March 31, 2015, partially offset by a current income tax provision of $2.2 million in U.
S and Germany.
The income tax provision for fiscal 2014 was comprised of income taxes in Germany and income taxes related to the deferred tax liability associated with tax deductible goodwill.
Net Income During fiscal 2015, we recognized net income of $113.7 million, or $2.80 per basic share and $2.65 per diluted share, compared to $7.4 million, or $0.19 per basic share and $0.18 per diluted share for fiscal 2014.
Our net income for fiscal 2015 included an income tax benefit of $84.9 million, primarily due to the release of our valuation allowance on certain of our deferred tax assets.
The increase in net income in fiscal 2015 was also due to higher Impella product revenue in the U. S.  and Europe.
Liquidity and Capital Resources At March 31, 2016, our total cash, cash equivalents, and short and long-term marketable securities totaled $213.1 million, an increase of $67.1 million compared to $146.0 million at March 31, 2015.
The increase in our cash, cash equivalents, and short and long-term marketable securities was due primarily to positive cash flows from operations in fiscal 2016.
Following is a summary of our cash flow activities:


Foreign Currency Exchange Rates In the fourth quarter of 2012, our Board of Directors authorized a project to construct new ammonia and urea/UAN plants at our Donaldsonville, Louisiana complex and new ammonia and urea plants at our Port Neal, Iowa complex.
A portion of the capacity expansion project costs are euro-denominated.
In order to manage our exposure to changes in the euro to U. S.  dollar currency exchange rates, we have hedged our projected euro-denominated payments through the third quarter of 2016 using foreign currency forward contracts.
As of December 31, 2015 and 2014, the notional amount of our open foreign currency derivatives was €89.0 million and €209.0 million, respectively.
None of these open foreign currency derivatives were designated as hedging instruments for accounting purposes.
During the year ended December 31, 2014, we reclassified a pre-tax gain of $2.8 million from accumulated other comprehensive income (AOCI) to income as a result of the discontinuance of certain foreign currency derivatives, which were originally designated as cash flow hedges.
No reclassification from AOCI to income occurred in 2015 or 2013.
As of December 31, 2015 and December 31, 2014, AOCI includes $7.4 million of pre-tax gains related to the foreign currency derivatives that were originally designated as cash flow hedges.
The hedges were de-designated as of December 31, 2013, and the remaining balance in AOCI will be reclassified into income over the depreciable lives of the property, plant and equipment associated with the capacity expansion projects.
We expect that the amounts to be reclassified within the next twelve months will be insignificant.
See Note 18¡ªStockholders' Equity, for further information.
The effect of derivatives in our consolidated statements of operations is shown in the tables below:


| Years Ended December 31, Percentage Change | (in millions) | Corporate and Other pre-tax operating loss: | Equity in pre-tax operating earnings of AerCap(a) | Fair value of PICC investments(b) | Income from other assets, net(c) | Corporate general operating expenses | Severance expense(d) | Interest expense |


| Payments due by Period | At December 31, 2010(in millions) | Borrowings(a) | FRBNY Credit Facility(b) | Interest payments on borrowings | Loss Reserves | Insurance and investment contract liabilities | Aircraft purchase commitments | Operating leases | Other long-term obligations(c) | Total(d) |


Commodity Price Risk We are exposed to fluctuations in commodity prices due to contractual agreements with component suppliers.
In order to protect ourselves against future price volatility and, consequently, fluctuations in gross margins, we periodically enter into commodity swap contracts with designated banks to fix the cost of certain raw material purchases with the objective of minimizing changes in inventory cost due to market price fluctuations.
Certain commodity swap contracts are derivative contracts that are designated as cash flow hedges under GAAP.
We also have commodity swap contracts that represent an economic hedge, but are not designated for hedge accounting and are marked to market through earnings.
For those contracts that qualify for hedge accounting, the effective portion of the unrealized gain or loss is deferred and reported as a component of AOCL.
When the hedged forecasted transaction (purchase) occurs, the unrealized gain or loss is reclassified into income in the same line item associated with the hedged transaction in the same period or periods during which the hedged transaction affects income.
The ineffective portion of the hedge, if any, is recognized in current income in the period in which the ineffectiveness occurs.
As of December 31, 2013, we expect to reclassify an unrealized net loss of $4 million from AOCL to income over the next year.
Our internal policy allows for managing these cash flow hedges for up to three years.


| 2018 2017 | (in millions) | Individual annuities | Group annuities | Guaranteed investment contracts and guaranteed interest accounts | Funding agreements | Interest-sensitive life contracts | Dividend accumulation and other | Total policyholders’ account balances |


| Operating rental properties $602,011 | Land held for development | Total real estate investments | Other assets | Lease related intangible assets | Goodwill | Total assets acquired | Debt assumed | Other liabilities assumed | Purchase price, net of assumed liabilities |


| Year ended December 31, | 2006 | (in millions) | Life insurance sales-1: | Excluding corporate-owned life insurance: | Variable life | Universal life | Term life | Total excluding corporate-owned life insurance | Corporate-owned life insurance | Total | Life insurance sales by distribution channel, excluding corporate-owned life insurance-1: | Prudential Agents | Third party | Total |


| Consolidated Performance Summary 2011 -1 2010 -2 2009 -3(4) | Revenue | Revenue gain % | Comparable store sales % (decline) gain | Gross profit as % of revenue-5 | SG&A as % of revenue-5 | Operating income | Operating income as % of revenue | Net earnings | Diluted earnings per share |


| Pension Benefits Other Benefits | (in thousands) | Change in benefit obligation | Benefit obligation at beginning of year | Service cost | Interest cost | Amendments | Plan participants’ contributions | Actuarial loss | Benefits paid | Benefit obligation at year-end | Change in plan assets | Fair value of plan assets at beginning of year | Actual return on plan assets | Employer contribution | Benefits paid | Fair value of plan assets at end of year | Funded status | Unrecognized net actuarial loss | Unrecognized prior service cost (benefit) | Unrecognized net transition obligation | Accrued benefit costs |


Strategy Our mission is to achieve sustainable revenue and earnings growth through providing superior solutions to our customers.
Our strategy to achieve this has been and will continue to be built on the following pillars: ?
Expand Client Relationships  The overall market we serve continues to gravitate beyond single-product purchases to multi-solution partnerships.
As the market dynamics shift, we expect our clients to rely more on our multidimensional service offerings.
Our leveraged solutions and processing expertise can drive meaningful value and cost savings to our clients through more efficient operating processes, improved service quality and speed for our clients' customers.  ?
Buy, Build or Partner to Add Solutions to Cross-Sell  We continue to invest in growth through internal product development, as well as through product-focused or market-centric acquisitions that complement and extend our existing capabilities and provide us with additional solutions to cross-sell.
We also partner from time to time with other entities to provide comprehensive offerings to our customers.
By investing in solution innovation and integration, we continue to expand our value proposition to clients.  ?
Support Our Clients Through Market Transformation  The changing market dynamics are transforming the way our clients operate, which is driving incremental demand for our leveraged solutions, consulting expertise, and services around intellectual property.
Our depth of services capabilities enables us to become involved earlier in the planning and design process to assist our clients as they manage through these changes.  ?
Continually Improve to Drive Margin Expansion  We strive to optimize our performance through investments in infrastructure enhancements and other measures that are designed to drive organic revenue growth and margin expansion.  ?
Build Global Diversification  We continue to deploy resources in emerging global markets where we expect to achieve meaningful scale.


| December 31, 2014 December 31, 2013 | Remaining  Permitted  Capacity | Remaining cubic yards | Remaining tonnage |


Operating revenues increased by 17.3% in the year ended December 31, 2011 to $4,092.2 million (year ended December 31, 2010: $3,487.7 million).
Net revenues increased by 15.0% in in the year ended December 31, 2011 to $2,898.4 million (year ended December 31, 2010: $2,521.1 million).
Net revenues are operating revenues less third-party distribution, service and advisory expenses, plus our proportional share of net revenues from joint venture arrangements, plus management and performance fees
Table of Contents both probable and reasonably estimable.
We must from time to time make material estimates with respect to legal and other contingencies.
The nature of our business requires compliance with various state and federal statutes, as well as various contractual obligations, and exposes us to a variety of legal proceedings and matters in the ordinary course of business.
While the outcomes of matters such as these are inherently uncertain and difficult to predict, we maintain reserves reflected in other current and other non-current liabilities, as appropriate, for identified losses that are, in our judgment, probable and reasonably estimable.
Management's judgment is based on the advice of legal counsel, ruling on various motions by the applicable court, review of the outcome of similar matters, if applicable, and review of guidance from state or federal agencies, if applicable.
Contingent consideration payable in relation to a business acquisition is recorded as of the acquisition date as part of the fair value transferred in exchange for the acquired business.
Recent Accounting Standards See Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies - Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements.
” Item 7A.
Quantitative and Qualitative Disclosures About Market Risk In the normal course of its business, the company is primarily exposed to market risk in the form of securities market risk, interest rate risk, and foreign exchange rate risk.
AUM Market Price Risk The company's investment management revenues are comprised of fees based on a percentage of the value of AUM.
Declines in equity or fixed income security market prices could cause revenues to decline because of lower investment management fees by: ?
Causing the value of AUM to decrease.  ?
Causing the returns realized on AUM to decrease (impacting performance fees).  ?
Causing clients to withdraw funds in favor of investments in markets that they perceive to offer greater opportunity and that the company does not serve.  ?
Causing clients to rebalance assets away from investments that the company manages into investments that the company does not manage.  ?
Causing clients to reallocate assets away from products that earn higher revenues into products that earn lower revenues.
Underperformance of client accounts relative to competing products could exacerbate these factors.
Securities Market Risk The company has investments in sponsored investment products that invest in a variety of asset classes.
Investments are generally made to establish a track record or to hedge economically exposure to certain deferred compensation plans.
The company's exposure to market risk arises from its investments.
The following table summarizes the fair values of the investments exposed to market risk and provides a sensitivity analysis of the estimated fair values of those investments, assuming a 20% increase or decrease in fair values:


The Company had the following active stock option plans as of December 31, 2013: ?
The Coca-Cola Company 1999 Stock Option Plan (the ‘‘1999 Option Plan’’) was approved by shareowners in April 1999.
Under the 1999 Option Plan, a maximum of 240 million shares of our common stock was approved to be issued or transferred, through the grant of stock options, to certain officers and employees.  ?
The Coca-Cola Company 2002 Stock Option Plan (the ‘‘2002 Option Plan’’) was approved by shareowners in April 2002.
An amendment to the 2002 Option Plan which permitted the issuance of stock appreciation rights was approved by shareowners in April 2003.
Under the 2002 Option Plan, a maximum of 240 million shares of our common stock was approved to be issued or transferred, through the grant of stock options or stock appreciation rights, to certain officers and employees.
No stock appreciation rights have been issued under the 2002 Option Plan as of December 31, 2013.  ?
The Coca-Cola Company 2008 Stock Option Plan (the ‘‘2008 Option Plan’’) was approved by shareowners in April 2008.
Under the 2008 Option Plan, a maximum of 280 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options granted under the 2008 Option Plan.  ?
As a result of our acquisition of CCE’s former North America business, the Company assumed certain stock-based compensation plans previously sponsored by CCE.
Shares from these plans remain available for future grant to current employees who were employees of CCE or its subsidiaries prior to the acquisition or who are hired by the Company or its subsidiaries following the acquisition.
The assumed Coca-Cola Enterprises Inc.  2001 Stock Option Plan, Coca-Cola Enterprises Inc.  2004 Stock Award Plan and Coca-Cola Enterprises Inc.  2007 Incentive Award Plan previously sponsored by CCE have approximately 29 million shares available for grant after conversion of CCE common stock into our common stock.
The Company has not granted any equity awards from the assumed plans.
As of December 31, 2013, there were 84 million shares available to be granted under the 1999 Option Plan, 2002 Option Plan and 2008 Option Plan.
Options to purchase common stock under all of these plans have generally been granted at the fair market value of the Company’s stock at the date of grant.
Stock option activity for all stock option plans for the year ended December 31, 2013, was as follows:


| Global Networks InternationalSubscribers(millions) Regional Networks InternationalSubscribers(millions) | Discovery Channel | Animal Planet | TLC, Real Time and Travel & Living | Discovery Science | Investigation Discovery | Discovery Home & Health | Turbo | Discovery World |


| (approximate amounts in thousands except per share data) 2007 | Net revenue | Net income | Net income per share—basic | Net income per share—assuming dilution |


| 2017 2016 2015 | (in millions, except %) | Weighted average assumptions used to determine net periodic benefit costs (income) | Discount rate for PBO | Discount rate for Service Cost | Discount rate for Interest on PBO | Discount rate for Interest on Service Cost | Assets: | Expected rate of return | Expected return | Actual return | Gain/(Loss) | One year actual return | Five year actual return |


| Year Ended December 31, 2018 | PFI Excluding Closed Block Division and Japanese Operations | Yield-1 | ($ in millions) | Fixed maturities-2 | Assets supporting experience-rated contractholder liabilities | Equity securities | Commercial mortgage and other loans | Policy loans | Short-term investments and cash equivalents | Gross investment income | Investment expenses | Investment income after investment expenses | Other invested assets-3 | Investment results of other entities and operations-4 | Total investment income |


| Year Ended December 31, | 2012 | Beginning balance | Provision | Settlements/ reversals | Ending balance |


Products and Services We offer our customers subscription-based video services, including video on demand (VOD), high definition (HD) television, and digital video recorder (DVR) service, Internet services and voice services.
As of December 31, 2017, 74% of our footprint was all-digital enabling us to offer more HD channels, faster Internet speeds and better video picture quality and we intend to transition the remaining portions of our Legacy TWC and Legacy Bright House footprints to all-digital.
Our video, Internet, and voice services are offered to residential and commercial customers on a subscription basis, with prices and related charges based on the types of service selected, whether the services are sold as a bundle or on an individual basis, and the equipment necessary to receive our services.
Bundled services are available to substantially all of our passings, and approximately 59% of our customers subscribe to a bundle of services.
All customer statistics as of December 31, 2017 include the operations of Legacy TWC, Legacy Bright House and Legacy Charter, each of which is based on individual legacy company reporting methodology.
These methodologies differ and their differences may be material.
Statistical reporting will be conformed over time to a single reporting methodology.
The following table summarizes our customer statistics for video, Internet and voice as of December 31, 2017 and 2016 (in thousands except per customer data and footnotes).


| September 30, 2010-1 September 30, 2009-2 | 4.3% | 4.1% | 3.2% | 2.8% | 2.6% |


| $ in millions Total 2013 2014 -2015 2016 -2017 2018 andbeyond | Long-term debt | Interest payments on long-term debt | Operating leases | Purchase obligations-1 | Other long-term liabilities-2 | Total contractual obligations |


Future Policy Benefit Reserves.
The Company wrote a limited amount of life and annuity reinsurance in its Bermuda segment.
Future policy benefit liabilities for annuities are reported at the accumulated fund balance of these contracts.
Reserves for those liabilities include mortality provisions with respect to life and annuity claims, both reported and unreported.
Actual experience in a particular period may be worse than assumed experience and, consequently, may adversely affect the Companys operating results for that period.
See ITEM 8, Financial Statements and Supplementary Data - Note 1F of Notes to Consolidated Financial Statements.
Activity in the reserve for future policy benefits is summarized for the periods indicated:


Flows reflected ongoing institutional demand for our solutions-based advice with $15.1 billion, or 52%, of net inflows coming from institutional clients.
Defined contribution plans of institutional clients remained a significant driver of flows, and contributed $12.8 billion to institutional multi-asset class net new business in 2014, primarily into target date and target risk product offerings.
Retail net inflows of $13.4 billion were driven by particular demand for our Multi-Asset Income fund, which raised $6.3 billion in 2014.
The Company’s multi-asset strategies include the following: ?
Asset allocation and balanced products represented 48% of multi-asset class AUM at year-end, with growth in AUM driven by net new business of $18.4 billion.
These strategies combine equity, fixed income and alternative components for investors seeking a tailored solution relative to a specific benchmark and within a risk budget.
In certain cases, these strategies seek to minimize downside risk through diversification, derivatives strategies and tactical asset allocation decisions.
Flagship products in this category include our Global Allocation and Multi-Asset Income suites.  ?
Target date and target risk products grew 10% organically in 2014.
Institutional investors represented 90% of target date and target risk AUM, with defined contribution plans accounting for over 80% of AUM.
The remaining 10% of target date and target risk AUM consisted of retail client investments.
Flows were driven by defined contribution investments in our LifePath and LifePath Retirement Income?
offerings.
LifePath products utilize a proprietary asset allocation model that seeks to balance risk and return over an investment horizon based on the investor’s expected retirement timing.  ?
Fiduciary management services are complex mandates in which pension plan sponsors or endowments and foundations retain BlackRock to assume responsibility for some or all aspects of plan management.
These customized services require strong partnership with the clients’ investment staff and trustees in order to tailor investment strategies to meet client-specific risk budgets and return objectives.


| 2007 First Quarter Second Quarter Third Quarter Fourth Quarter | Net sales | Gross profit | Net earnings | Basic net earnings per common share | Diluted net earnings per common share |


Table of Contents On April 2, 2008, the Company effected a two-for-one stock split in the form of a stock dividend to stockholders as of March 21, 2008.
Pursuant to the Amended and Restated Rights Agreement, the Company amended the terms of the rights issued and issuable under the agreement (“Rights”), effective as of April 3, 2008 (after the stock dividend), to reset the Rights such that each share of Common Stock is entitled to receive one Right, to retain the purchase price of each Right at $60 per Right, and to provide that each Right will entitle the holder to purchase one twenty-five thousandth of a share of Series A Junior Participating Preferred Stock (the “Series A Preferred Stock”).
Conforming changes have also been made to the Company’s certificate of designation for the Series A Preferred Stock to provide that each share of Series A Preferred Stock carries 25,000 times the dividend, liquidation and voting rights of the Company’s Common Stock.
Other modifications have also been made in the Amended and Restated Rights Agreement to update the agreement for certain developments, including the recent amendments to the Company’s by-laws permitting stockholders to hold and transfer shares of the Company’s capital stock in book entry form.
The expiration date of the Rights has remained unchanged at January 1, 2013.


| 2013 2012 2011 | (In millions) | Balance at beginning of year | Increases for tax positions taken in prior years | Decreases for tax positions taken in prior years | Increases for tax positions taken in the current year | Decreases for settlements with taxing authorities | Balance at end of year |


| Fiscal Year | 2015 | Estimated fair values of stock options granted | Assumptions: | Risk-free interest rate | Expected term | Expected volatility | Dividend yield |


| 2007 2006 | (in millions) | Life insurance | Individual and group annuities and supplementary contracts | Other contract liabilities | Subtotal future policy benefits excluding unpaid claims and claim adjustment expenses | Unpaid claims and claim adjustment expenses | Total future policy benefits |