addition, we are exposed to gains and losses resulting from fluctuations in foreign currency exchange rates on transactions generated by our international subsidiaries in currencies other than their local currencies.
These gains and losses are primarily driven by inter-company transactions.
These exposures are included in other income (expense), net on the consolidated statements of income.
Since 2007, we have used foreign currency forward contracts to reduce the risk from exchange rate fluctuations on inter-company transactions and projected inventory purchases for our Canadian subsidiary.
Beginning in December 2008, we began using foreign currency forward contracts in order to reduce the risk associated with foreign currency exchange rate fluctuations on inter-company transactions for our European subsidiary.
We do not enter into derivative financial instruments for speculative or trading purposes.
Based on the foreign currency forward contracts outstanding as of December 31, 2009, we receive US Dollars in exchange for Canadian Dollars at a weighted average contractual forward foreign currency exchange rate of 1.04 CAD per $1.00 and US Dollars in exchange for Euros at a weighted average contractual forward foreign currency exchange rate of 0.70 EUR per $1.00.
As of December 31, 2009, the notional value of our outstanding foreign currency forward contracts for our Canadian subsidiary was $15.4 million with contract maturities of 1 month, and the notional value of our outstanding foreign currency forward contracts for our European subsidiary was $56.0 million with contract maturities of 1 month.
The foreign currency forward contracts are not designated as cash flow hedges, and accordingly, changes in their fair value are recorded in other income (expense), net on the consolidated statements of income.
The fair value of our foreign currency forward contracts was $0.3 million and $1.2 million as of December 31, 2009 and 2008, respectively.
These amounts are included in prepaid expenses and other current assets on the consolidated balance sheet.
Refer to Note 9 for a discussion of the fair value measurements.
Other income (expense), net included the following amounts related to changes in foreign currency exchange rates and derivative foreign currency forward contracts:


| In millions 2020 2019 | Pension expense | U.S. plans | Non-U.S. plans | Net expense | Investment Groups | Equity securities | Non-U.S. equity securities | Debt securities | Cash | Other |


At The Market (ATM) Equity Program In October 2017, we entered into a distribution agreement (the “Distribution Agreement”) with a syndicate of 10 banks (the “Agents”) pursuant to which we may sell, from time to time, up to an aggregate sales price of $500.0 million of our common stock through the Agents (the “At The Market (ATM) Equity Program”).
Sales of our common stock made pursuant to the Distribution Agreement may be made in negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), including sales made directly on the NYSE, or sales made to or through a market maker other than on an exchange, or as otherwise agreed between the applicable Agent and us.
We intend to use the net proceeds from sales of our common stock pursuant to the At The Market (ATM) Equity Program for general corporate purposes, including financing the expansion of our data center business and adjacent businesses through acquisitions, and repaying amounts outstanding from time to time under the Revolving Credit Facility.
During the quarter ended December 31, 2017 under the At The Market (ATM) Equity Program, we sold an aggregate of 1,481,053 shares of common stock for gross proceeds of approximately $60.0 million, generating net proceeds of $59.1 million after deducting commissions of $0.9 million.
As of December 31, 2017, the remaining aggregate sale price of shares of our common stock available for distribution under the At The Market (ATM) Equity Program was approximately $440.0 million.
Equity Offering On December 12, 2017, we entered into an underwriting agreement (the “Underwriting Agreement”) with a syndicate of 16 banks (the “Underwriters”), related to the public offering by us of 14,500,000 shares (the “Firm Shares”) of our common stock (the “Equity Offering”).
The offering price to the public for the Equity Offering was $37.00 per share, and we agreed to pay the Underwriters an underwriting commission of $1.38195 per share.
The net proceeds to us from the Equity Offering, after deducting underwriters' commissions, was $516.5 million.


| Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights(a) Weighted-average exerciseprice of outstanding options, warrants and rights(b) Number of securitiesremaining available forfuture issuance under equity compensation plans (excluding securities reflected in column (a))(c) | Equity compensation plans approved by security holders: | Equity compensation plans not approved by security holders: | Total |


The fair value for RSU and restricted stock awards was calculated using the closing price of the Company’s common stock on the date of grant.
The fair value of the options granted was calculated using a Black-Scholes Merton option pricing model (Black-Scholes).


include as events of default, defaults in payments of other debt obligations in excess of specified levels ($150 million or $100 million for CECONY, depending on the facility).
Note D – Short-Term Borrowing In October 2011, Con Edison and the Utilities entered into a credit agreement (Credit Agreement), under which banks are committed to provide loans and letters of credit on a revolving credit basis.
The Credit Agreement, as amended, expires in October 2017.
There is a maximum of $2.25 billion of credit available through October 2016 and approximately $2.1 billion of credit available from then through October 2017.
The full amount is available to CECONY and $1.5 billion is available to Con Edison, including up to $1.2 billion of letters of credit.
The Credit Agreement supports the Companies’ commercial paper programs.
The Companies have not borrowed under the Credit Agreement.
At December 31, 2015, Con Edison had $1,529 million of commercial paper outstanding of which $1,033 million was outstanding under CECONY’s program.
The weighted average interest rate at December 31, 2015 was 0.7 percent for both Con Edison and CECONY.
At December 31, 2014, Con Edison had $800 million of commercial paper outstanding of which $450 million was outstanding under CECONY’s program.
The weighted average interest rate at December 31, 2014 was 0.4 percent for both Con Edison and CECONY.
At December 31, 2015 and 2014, no loans were outstanding under the Credit Agreement and $15 million and $11 million (including $11 million for CECONY) of letters of credit were outstanding under the Credit Agreement, respectively.
The banks’ commitments under the Credit Agreement are subject to certain conditions, including that there be no event of default.
The commitments are not subject to maintenance of credit rating levels or the absence of a material adverse change.
Upon a change of control of, or upon an event of default by one of the Companies, the banks may terminate their commitments with respect to that company, declare any amounts owed by that company under the Credit Agreement immediately due and payable and require that company to provide cash collateral relating to the letters of credit issued for it under the Credit Agreement.
Events of default include the exceeding at any time of a ratio of consolidated debt to consolidated total capital of 0.65 to 1 (at December 31, 2015 this ratio was 0.52 to 1 for Con Edison and CECONY); having liens on its assets in an aggregate amount exceeding five percent of its consolidated total capital, subject to certain exceptions; and the failure, following any applicable notice period, to meet certain other customary covenants.
Interest and fees charged for the revolving credit facilities and any loans made or letters of credit issued under the Credit Agreement reflect the Companies’ respective credit ratings.
The Companies were in compliance with their covenants at December 31, 2015.
See Note S for information about short-term borrowing between related parties.
Note E – Pension Benefits Con Edison maintains a tax-qualified, non-contributory pension plan that covers substantially all employees of CECONY and O&R and certain employees of Con Edison’s competitive energy businesses.
The plan is designed to comply with the Internal Revenue Code and the Employee Retirement Income Security Act of 1974.
In addition, Con Edison maintains additional non-qualified supplemental pension plans.
Total Periodic Benefit Cost The components of the Companies’ total periodic benefit costs for 2015, 2014 and 2013 were as follows:


| Transitional Basel III December 31, | (dollars in millions) | Total common stockholders’ equity | Exclusions-1: | Net unrealized (gains) losses recorded in accumulated other comprehensive income, net of tax: | Debt and marketable equity securities available for sale | Derivatives | Unamortized net periodic benefit costs | Deductions: | Goodwill | Deferred tax liability associated with goodwill | Other intangible assets | Total Common Equity Tier 1 Capital | Qualifying preferred stock | Total Tier 1 Capital | Qualifying long-term debt securities as tier 2 | Allowance for loan and lease losses | Allowance for credit losses for off-balance sheet exposure | Total capital |


| Payments Due by Year  In thousands of dollars | Contractual Obligations | Unconditional Purchase Obligations | Lease Obligations | Long-term Debt | Total Obligations |


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


| (in millions) 2015 2014 2013 | Investment banking fees | Principal transactions | Lending- and deposit-related fees | Asset management, administration and commissions | Securities gains | Mortgage fees and related income | Card income | Other income(a) | Noninterest revenue | Net interest income | Total net revenue |


Drivers of Risks Drivers of risks include, but are not limited to, the economic environment, regulatory or government policy, competitor or market evolution, business decisions, process or judgment error, deliberate wrongdoing, dysfunctional markets, and natural disasters.
Types of Risks The Firms risks are generally categorized in the following four risk types: Strategic risk is the risk associated with the Firms current and future business plans and objectives, including capital risk, liquidity risk, and the impact to the Firms reputation.
Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk, wholesale credit risk, and investment portfolio risk.
Market risk is the risk associated with the effect of changes in market factors, such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term.
Operational risk is the risk associated with inadequate or failed internal processes, people and systems, or from external events and includes compliance risk, conduct risk, legal risk, and estimations and model risk.
Impacts of Risks There may be many consequences of risks manifesting, including quantitative impacts such as reduction in earnings and capital, liquidity outflows, and fines or penalties, or qualitative impacts, such as reputation damage, loss of clients, and regulatory and enforcement actions.
Governance and Oversight Functions The Firm manages its risk through risk governance and oversight functions.
The scope of a particular function may include one or more drivers, types and/or impacts of risk.
For example, Country Risk Management oversees country risk which may be a driver of risk or an aggregation of exposures that could give rise to multiple risk types such as credit or market risk.
The following sections discusses the risk governance and oversight functions in place to manage the risks inherent in the Firms business activities.
Managements discussion and analysis 118 JPMorgan Chase & Co. /2018 Form 10-K equivalent to the risk of loan exposures.
DRE is a less extreme measure of potential credit loss than Peak and is used as an input for aggregating derivative credit risk exposures with loans and other credit risk.
Finally, AVG is a measure of the expected fair value of the Firms derivative receivables at future time periods, including the benefit of collateral.
AVG over the total life of the derivative contract is used as the primary metric for pricing purposes and is used to calculate credit risk capital and the CVA, as further described below.
The fair value of the Firms derivative receivables incorporates CVA to reflect the credit quality of counterparties.
CVA is based on the Firms AVG to a counterparty and the counterpartys credit spread in the credit derivatives market.
The Firm believes that active risk management is essential to controlling the dynamic credit risk in the derivatives portfolio.
In addition, the Firms risk management process takes into consideration the potential impact of wrong-way risk, which is broadly defined as the potential for increased correlation between the Firms exposure to a counterparty (AVG) and the counterpartys credit quality.
Many factors may influence the nature and magnitude of these correlations over time.
To the extent that these correlations are identified, the Firm may adjust the CVA associated with that counterpartys AVG.
The Firm risk manages exposure to changes in CVA by entering into credit derivative contracts, as well as interest rate, foreign exchange, equity and commodity derivative contracts.
The accompanying graph shows exposure profiles to the Firms current derivatives portfolio over the next 10 years as calculated by the Peak, DRE and AVG metrics.
The three measures generally show that exposure will decline after the first year, if no new trades are added to the portfolio.
Exposure profile of derivatives measures December 31, 2018 (in billions)


| 2014 2013 -1 | Accrued property and real estate taxes | Payroll and related withholdings | Accrued construction costs | Accrued rent | Other accrued expenses | Balance as of December 31, | Twelve Months Ended | (Millions of Dollars) | Operating revenues | Purchased power | Gas purchased for resale | Other operations and maintenance | Depreciation and amortization | Taxes, other than income taxes | (Gain) on sale of solar electric production projects | Operating income (loss) |


As of December 31, 2015, we had $3.37 billion of federal and $1.34 billion of state net operating loss carryforwards available to reduce future taxable income.
These net operating loss carryforwards will begin to expire for federal income tax purposes and state income tax purposes in 2027 and 2016, respectively.
We also have research credit carryforwards of $188.2 million and $150.6 million for federal and state income tax purposes, respectively.
The federal research credit carryforward will begin to expire in 2027.
The state research credit carryforward has no expiration date.
Additionally, we have California Enterprise Zone credit carryforwards of $18.0 million which will begin to expire in 2023.
Utilization of the net operating loss carryforwards and research credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions.
Any annual limitation may result in the expiration of net operating losses and research credits before utilization.


Property, Plant and Equipment We state property, plant, equipment, and leasehold improvements at historical cost.
We charge expenditures for maintenance and repairs to expense and capitalize additions and improvements that extend the life of the underlying asset.
We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets.
We depreciate buildings over a 20 to 40 year life; building improvements over the remaining useful life of the building structure; equipment, furniture and fixtures over a three to ten year life; and leasehold improvements over the shorter of the useful life of the improvement or the term of the related lease.
Depreciation expense was $270 million in 2016, $274 million in 2015 and $287 million in 2014.


Commissions.
Total commissions increased by $15.4 million or 29.1% to $68.2 million for the year ended December 31, 2004 from $52.8 million for the comparable period in 2003.
This increase was primarily due to increases in the amount of U. S.  high-grade commissions and substantial increases in European high-grade commissions.
U. S.  high-grade commissions increased by $5.2 million or 12.8% to $45.5 million for the year ended December 31, 2004 from $40.3 million for the comparable period in 2003.
European high-grade commissions increased by $8.0 million or 112.5% to $15.1 million from $7.1 million for the comparable period in 2003.
Other commissions increased by $2.2 million or 41.0% to $7.6 million from $5.4 million for the comparable period in 2003.
These increases were primarily due to an increase in transaction volume from $192.2 billion for the year ended December 31, 2003 to $298.1 billion for the year ended December 31, 2004 generated by new and existing clients, offset by a 16.7% reduction in the average commission per million from $275 per million for the year ended December 31, 2003 to $229 per million for the year ended December 31, 2004.
This decrease in average commission per million was attributable to the full-year effect of our U. S.  high-grade fee plans, increasing volumes of transactions with lower fees per million and an increase in the percentage of trades executed on the platform with shorter maturities, which generally generate lower commissions per million, Information and User Access Fees.


| For the year ended | 12-31-07 | Town Grove, LLC | Avalon Del Rey, LLC | CVP I, LLC | Town Run Associates | AvalonTerrace, LLC-1 | MVP I, LLC | AvalonBay Value Added Fund, L.P. | AvalonBay Redevelopment LLC | Rent.com | Constellation Real Technologies | Total-2 |


| Pension Postretirement | U.S. Plans | (in millions) | Components of net periodic benefit cost: | Service cost | Interest cost | Expected return on assets | Amortization of prior service credit | Amortization of net loss | Curtailment (gain) loss | Settlement loss | Other | Net periodic benefit cost | Total recognized in Accumulated other comprehensive income (loss) | Total recognized in net periodic benefit cost and other comprehensive income (loss) |


| Pension plans Postretirement benefit plans | In millions of dollars | 2019 | 2020 | 2021 | 2022 | 2023 | 2024–2028 |


| Year Ended December 31, | 2004 | Food Packaging Segment | Protective Packaging Segment | Total segments | Restructuring and other (charges) credits | Unallocated corporate operating expenses | Total |


| Amount | 2019 | 2020 | 2021 | 2022 | 2023 |


Common Stock Dividends Per Share Historically, Xcel Energy has paid quarterly dividends to its shareholders.
For the first quarter of 2004, Xcel Energy paid dividends to its shareholders of $0.1875 per share.
In each of the last three quarters of 2004, Xcel Energy paid dividends to its shareholders of $0.2075.
For each of the four quarters of 2003, Xcel Energy paid dividends to its shareholders of $0.1875 per share.
For each of the first two quarters of 2002, Xcel Energy paid dividends to its shareholders of $0.375 per share.
In each of the third and fourth quarters of 2002, Xcel Energy paid dividends to its shareholders of $0.1875 per share.
Dividends on common stock are paid as declared by the board of directors.


| Year Ended December 31 | $ in millions | Product sales | Product costs-1 | % of product sales | Service sales | Service costs-1 | % of service sales |


| (in millions) December 31, 2013 Net inflows (outflows) Market change FX impact -1 December 31, 2014 Full Year Average AUM-2 | Retail: | Equity | Fixed income | Multi-asset | Alternatives | Retail subtotal | iShares: | Equity | Fixed income | Multi-asset | Alternatives | iSharessubtotal | Institutional: | Active: | Equity | Fixed income | Multi-asset | Alternatives | Active subtotal | Index: | Equity | Fixed income | Multi-asset | Alternatives | Index subtotal | Institutional subtotal | Long-term | Cash management | Advisory-3 | Total |


| 2018 2017 2016 | Samsung Electronics Co., Ltd. | 11% | * | 11% |


| $ in millions U.S. U.K. Continental Europe/Ireland Canada Asia Total | For the year ended December 31, 2014 | Revenue from external customers | Inter-company revenue | Total operating revenues | Long-lived assets | For the year ended December 31, 2013 | Revenue from external customers | Inter-company revenue | Total operating revenues | Long-lived assets | For the year ended December 31, 2012 | Revenue from external customers | Inter-company revenue | Total operating revenues | Long-lived assets |


| 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 | (In millions) | Net Reserves Held | Discount (in Reserves Held) | Net Reserves Held (Undiscounted) | Paid (Cumulative) as of: | One year later | Two years later | Three years later | Four years later | Five years later | Six years later | Seven years later | Eight years later | Nine years later | Ten years later | 1998 | (In millions) | Net Reserves Held (Undiscounted) | Undiscounted Liability as of: | One year later | Two years later | Three years later | Four years later | Five years later | Six years later | Seven years later | Eight years later | Nine years later | Ten years later | Net Redundancy / (Deficiency) | Remaining Reserves (Undiscounted) | Remaining Discount | Remaining Reserves |


| December 31, | 2012 | (in millions) | 7.875% notes payable, due 2014 | 3.76% notes payable, due 2015 | 1.85% notes payable, due 2017 | 8.875% notes payable, due 2019 | 3.3% notes payable, due 2022 | 3.125% notes payable, due 2023 | 6.05% notes payable, due 2036 | 4.625% notes payable, due 2042 | 4.35% notes payable, due 2043 | 8.0% surplus notes payable, due 2044 | Non-recourse mortgages and notes payable | Total long-term debt |


| High Low Dividends | 2009 | First quarter | Second quarter | Third quarter | Fourth quarter | 2008 | First quarter | Second quarter | Third quarter | Fourth quarter |


The Company sponsors other plans for the benefit of its employees and retirees.
These plans include health care and life insurance benefits.
The Company uses a December 31 measurement date for its plans.
The following table reflects the change in benefit obligation and change in plan assets of the Companys pension and other postretirement benefit plans at December 31:


The above discussion contains forward looking statements with respect to the potential commercialization of our GTF?
technology.
The foregoing factors (among others) could cause actual results to differ materially from those set forth in the forward-looking statements.
Corporate and Other The remaining $498 million of our 2010 budget relates to capitalized interest and corporate activities.
The net income tax liabilities of our OSM operations are denominated in Canadian dollars and must be remeasured to U. S.  dollars each reporting period.
At year end we took steps, as permitted under Canadian tax rules, which will enable us to convert these liabilities during the first half of 2010 to be denominated in U. S.  dollars and thereby eliminate exposure to foreign currency exchange rate changes on our net deferred tax liability related to OSM operations from that point forward.
The forward-looking statements about our capital, investment and exploration budget are based on current expectations, estimates and projections and are not guarantees of future performance.
Actual results may differ materially from these expectations, estimates and projections and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict.
Some factors that could cause actual results to differ materially include prices of and demand for crude oil, natural gas and refined products, actions of competitors, disruptions or interruptions of our production or refining operations due to the shortage of skilled labor and unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response, and other operating and economic considerations.
Managements Discussion and Analysis of Environmental Matters, Litigation and Contingencies We have incurred and will continue to incur substantial capital, operating and maintenance, and remediation expenditures as a result of environmental laws and regulations.
If these expenditures, as with all costs, are not ultimately reflected in the prices of our products and services, our operating results will be adversely affected.
We believe that substantially all of our competitors must comply with similar environmental laws and regulations.
However, the specific impact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, marketing areas, crude oil and feedstock sources, production processes and whether it is also engaged in the petrochemical business or the marine transportation of crude oil and refined products.
Legislation and regulations pertaining to climate change and greenhouse gas emissions have the potential to materially adversely impact our business, financial condition, results of operations and cash flow, including costs of compliance and permitting delays.
The extent and magnitude of these adverse impacts cannot be reliably or accurately estimated at this time because specific regulatory and legislative requirements have not been finalized and uncertainty exists with respect to the measures being considered, the costs and the time frames for compliance, and our ability to pass compliance costs on to our customers.
For additional information see Item 1A.
Risk Factors.
Our environmental expenditures(a) for each of the last three years were:


Five-Year Performance Comparison – The following graph provides an indicator of cumulative total shareholder returns for the Corporation as compared to the peer group index (described above), the DJ Trans, and the S&P 500.
The graph assumes that $100 was invested in the common stock of Union Pacific Corporation and each index on December 31, 2010 and that all dividends were reinvested.
The information below is historical in nature and is not necessarily indicative of future performance.


| December 31, 2009 December 31, 2008 | (in millions) | General obligations: | Capital debt | Investment related | Securities business related | Specified other businesses | Total general obligations | Limited and non-recourse debt | Total borrowings | Short-term debt | Long-term debt | Total borrowings | Borrowings of Financial Services Businesses | Borrowings of Closed Block Business | Total borrowings | Year ended December 31, | 2009 | (in millions) | Operating results: | Revenues | Expenses | Adjusted operating income | Realized investment gains (losses), net, and related adjustments(1) | Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests-2 | Income from continuing operations before income taxes and equity in earnings of operating joint ventures |


| Years Ended December 31, | 2006 | (in millions) | Cost of revenues | % of net revenues | Gross profits | % of net revenues |


| Change in long-term rateof return on plan assets | Increase (decrease) in expense | U.S. plans | U.K. plans | The Netherlands plan | Canada plans | December 31, | 2011 | One- to four-family | Home equity | Total loans receivable measured at fair value | REO measured at fair value |


| Year Ended December 31, | 2014 | Electric Energy Delivered(millions of kWh) | Total deliveries to O&R full service customers | Delivery service for retail choice customers | Total Deliveries In Franchise Area | Electric Energy Delivered($ in millions) | Total deliveries to O&R full service customers | Delivery service for retail choice customers | Other operating revenues | Total Deliveries In Franchise Area | Average Revenue Per kWh Sold(Cents) | Residential | Commercial and Industrial |


| 2012 2011 | Average Tier 1 Common Capital | (dollars in billions) | Institutional Securities | Global Wealth Management Group | Asset Management | Parent capital | Total |


| Years Ended December 31, | 2011 | (In millions) | Investment return | Separate account balances | Net investment gain (loss) | Guaranteed Minimum Income Benefits | Expense | In-force/Persistency | Policyholder dividends and other | Total |


| In millions 2016 2015 2014 | Balance of gross unrecognized tax benefits at January 1 | Increases: | Positions taken during a prior period | Decreases: | Positions taken during a prior period | Settlements with taxing authorities | Reductions resulting from lapse of statute of limitations | Balance of gross unrecognized tax benefits at December 31 | Favorable impact if recognized |


Asian Printing Papers net sales were $59 million in 2014, $90 million in 2013 and $85 million in 2012.
Operating profits were $0 million in 2014 and $1 million in both 2013 and 2012.
U. S.  Pulp net sales were $895 million in 2014 compared with $815 million in 2013 and $725 million in 2012.
Operating profits were $57 million in 2014 compared with $2 million in 2013 and a loss of $59 million in 2012.
Sales volumes in 2014 increased from 2013 for both fluff pulp and market pulp reflecting improved market demand.
Average sales price realizations increased significantly for fluff pulp, while prices for market pulp were also higher.
Input costs for wood and energy were higher.
Operating costs were lower, but planned maintenance downtime costs were $1 million higher.
Compared with the fourth quarter of 2014, sales volumes in the first quarter of 2015, are expected to decrease for market pulp, but be slightly higher for fluff pulp.
Average sales price realizations are expected to to be stable for fluff pulp and softwood market pulp, while hardwood market pulp prices are expected to improve.
Input costs should be flat.
Planned maintenance downtime costs should be about $13 million higher than in the fourth quarter of 2014.


7.
INCENTIVE PLANS Discretionary Annual Incentive Awards Citigroup grants immediate cash bonus payments and various forms of immediate and deferred awards as part of its discretionary annual incentive award program involving a large segment of Citigroups employees worldwide.
Most of the shares of common stock issued by Citigroup as part of its equity compensation programs are to settle the vesting of the stock components of these awards.
Discretionary annual incentive awards are generally awarded in the first quarter of the year based on the previous years performance.
Awards valued at less than U. S.  $100,000 (or the local currency equivalent) are generally paid entirely in the form of an immediate cash bonus.
Pursuant to Citigroup policy and/or regulatory requirements, certain employees and officers are subject to mandatory deferrals of incentive pay and generally receive 25% 60% of their awards in a combination of restricted or deferred stock, deferred cash stock units or deferred cash.
Discretionary annual incentive awards to many employees in the EU are subject to deferral requirements regardless of the total award value, with at least 50% of the immediate incentive delivered in the form of a stock payment award subject to a restriction on sale or transfer (generally, for 12 months).
Deferred annual incentive awards may be delivered in the form of one or more award types: a restricted or deferred stock award under Citis Capital Accumulation Program (CAP), or a deferred cash stock unit award and/or a deferred cash award under Citis Deferred Cash Award Plan.
The applicable mix of awards may vary based on the employees minimum deferral requirement and the country of employment.
Subject to certain exceptions (principally, for retirement-eligible employees), continuous employment within Citigroup is required to vest in CAP, deferred cash stock unit and deferred cash awards.
Post employment vesting by retirement-eligible employees and participants who meet other conditions is generally conditioned upon their refraining from competition with Citigroup during the remaining vesting period, unless the employment relationship has been terminated by Citigroup under certain conditions.
Generally, the deferred awards vest in equal annual installments over three- or four-year periods.
Vested CAP awards are delivered in shares of common stock.
Deferred cash awards are payable in cash and, except as prohibited by applicable regulatory guidance, earn a fixed notional rate of interest that is paid only if and when the underlying principal award amount vests.
Deferred cash stock unit awards are payable in cash at the vesting value of the underlying stock.
Generally, in the EU, vested CAP shares are subject to a restriction on sale or transfer after vesting, and vested deferred cash awards and deferred cash stock units are subject to hold back (generally, for 12 months in each case).
Unvested CAP, deferred cash stock units and deferred cash awards are subject to one or more clawback provisions that apply in certain circumstances, including gross misconduct.
CAP and deferred cash stock unit awards, made to certain employees, are subject to a formulaic performancebased vesting condition pursuant to which amounts otherwise scheduled to vest will be reduced based on the amount of any pretax loss in the participants business in the calendar year preceding the scheduled vesting date.
A minimum reduction of 20% applies for the first dollar of loss for CAP and deferred cash stock unit awards.
In addition, deferred cash awards are subject to a discretionary performance-based vesting condition under which an amount otherwise scheduled to vest may be reduced in the event of a material adverse outcome for which a participant has significant responsibility.
 These awards are also subject to an additional clawback provision pursuant to which unvested awards may be canceled if the employee engaged in misconduct or exercised materially imprudent judgment, or failed to supervise or escalate the behavior of other employees who did.
Sign-on and Long-Term Retention Awards Stock awards and deferred cash awards may be made at various times during the year as sign-on awards to induce new hires to join Citi or to highpotential employees as long-term retention awards.
Vesting periods and other terms and conditions pertaining to these awards tend to vary by grant.
Generally, recipients must remain employed through the vesting dates to vest in the awards, except in cases of death, disability or involuntary termination other than for gross misconduct.
These awards do not usually provide for post employment vesting by retirement-eligible participants.


products.
Credit Portfolio revenue was  $1.3 billion, up 19%, primarily due to higher revenue from risk management activities, partially offset by lower gains from loan sales and workouts.
The Provision for credit losses was $654 million, an increase of $463 millio n from the prior year.
The change was due to a net increase of $532 million in the Allowance for credit losses, primarily due to portfolio activity, which included the effect of the weakening credit environment, and an increase in allowance for unfunded leveraged lending commitments, as well as portfolio growth.
In addition, there were $36 million of net charge-offs in the current year, compared with $31 million of net recov- eries in the prior year.
The Allowance for loan losses to average loans was 2.14% for 2007, compared with a ratio of 1.79% in the prior year.
Noninterest expense was $13.1 billion, up $214 million, or 2%, from the prior year.
Return on equity was 15% on $21.0 billion of allocated capital compared with 18% on $20.8 billion in 2006.2006 compared with 2005 Net income of $3.7 billion was flat, as record revenue of $18.8 billion was  offset  largely  by higher compensation expense, including the impact of SFAS 123R, and Provision for credit losses compared with a benefit in the prior year .
Total net revenue of $18.8 billion was up $3.7 billion, or 25%, from the prior year.
Investment banking fees of $5.5 billion were a record, up 35% from the prior year, driven by record debt and equity under- writing as well as strong advisory fees, which were the highest since 2000.
Advisory fees of $1.7 billion were up 31% over the prior year driven primarily by strong performance in the Americas.
Debt under- writing fees of $2.7 billion were up 37% from the prior year driven by record performance in both loan syndications and bond underwrit- ing.
Equity underwriting fees of $1.2 billion were up 36% from the prior year driven by global equity markets.
Fixed Income Markets rev- enue of $8.7 billion was also a record, up 15% from the prior year driven by strength in credit markets, emerging markets and currencies.
Record Equity Markets revenue of $3.5 billion increased 73%, and was driven by strength in cash equities and equity derivatives.
Credit Portfolio revenue of $1.1 billion was down 24%, primarily reflecting lower gains from loan workouts.
Provision for credit losses was $191 million compared with a benefit of $838 million in the prior year.
The 2006 provision reflects portfolio activity; credit quality remained stable.
The prior-year benefit reflected strong credit quality, a decline in criticized and nonperforming loans and a higher level of recoveries.
Total noninterest expense of $12.9 billion was up $2.6 billion, or 26%, from the prior year.
This increase was due primarily to higher performance-based compensation, including the impact of an increase in the ratio of compensation expense to total net revenue, as well as the incremental expense related to SFAS 123R.
Return on equity was 18% on $20.8 billion of allocated capital com- pared with 18% on $20.0 billion in 2005


| Year Ended April 30, 2009 2008 2007 | Interest income: | Mortgage loans, net | Emerald Advance lines of credit | Investment securities | Other | $154,516 | Operating interest expense: | Borrowings | Deposits | FHLB advances | 102,375 | Interest expense – acquisition debt | Total interest expense |


(1) Amount represents AUM acquired in the First Reserve Transaction.1 Source: BlackRock; Bloomberg 2 Regional iShares ETF amounts based on jurisdiction of product, not underlying client.
number of these indemnities is not estimable.
At December 31, 2007, we have an $88 million liability in connection with indemnities related to the sale of certain subsidiaries reflected on our Consolidated Balance Sheets.
We provide guarantees and surety bonds on behalf of certain non-consolidated entities, improving their ability to transact business.
In addition, we have provided financial guarantees to certain property owners in connection with the Bay Harbor remediation effort.
We monitor these obligations and believe it is unlikely that we will incur any material losses associated with these guarantees.
For additional details on these and other guarantee arrangements, see Note 3, Contingencies, “Other Contingencies — Guarantees and Indemnifications.
” Sale of Accounts Receivable: Under a revolving accounts receivable sales program, Consumers may sell up to $325 million of certain accounts receivable.
This program provides less expensive funding that unsecured debt.
For additional details, see Note 4, Financings and Capitalization.
Capital Expenditures: For planning purposes, we forecast capital expenditures over a three-year period.
We review these estimates and may revise them, periodically, due to a number of factors including environmental regulations, business opportunities, market volatility, economic trends, and the ability to access capital.
The following is a summary of our estimated capital expenditures, including lease commitments, for 2008 through 2010:


| December 31, | (Dollars in thousands) | Noninterest-bearing demand | Negotiable order of withdrawal (NOW) | Money market | Money market deposits in foreign offices | Sweep deposits in foreign offices | Time | Total deposits | Year ended December 31, | Non-GAAP operating efficiency ratio, net of noncontrolling interests (Dollars in thousands, except ratios) | GAAP noninterest expense | Less: expense attributable to noncontrolling interests | Non-GAAP noninterest expense, net of noncontrolling interests | GAAP net interest income | Adjustments for taxable equivalent basis | Non-GAAP taxable equivalent net interest income | Less: income attributable to noncontrolling interests | Non-GAAP taxable equivalent net interest income, net of noncontrolling interests | GAAP noninterest income | Less: income attributable to noncontrolling interests | Non-GAAP noninterest income, net of noncontrolling interests | GAAP total revenue | Non-GAAP taxable equivalent revenue, net of noncontrolling interests | GAAP operating efficiency ratio | Non-GAAP operating efficiency ratio -1 | Year ended December 31, | (Dollars in thousands, except employees) | Compensation and benefits: | Salaries and wages | Incentive compensation | ESOP | Other employee compensation and benefits -1 | Total compensation and benefits | Period-end full-time equivalent employees | Average full-time equivalent employees |


| Millions of kWhs Twelve Months Ended Percent Variation | Description | Residential/Religious | Commercial/Industrial | Other | Total Full Service Customers | Retail access customers | Sub-total | NYPA, Municipal Agency and Other Sales | Total Service Area |


| Millions of Dollars 2008 2007 2006 % Change 2008 v 2007 % Change 2007 v 2006 | Freight revenues | Other revenues | Total |


| December 31, | (millions of dollars) | Long-Term Debt (including current portion) | Con Edison | CECONY |


2015 Compared to 2014.
In 2015, research and development expenses increased by $115.1 million compared to 2014.
The increase was primarily attributable to an $87.0 million increase in personnel-related costs, mainly driven by an increase in compensation and recognition of stock-based compensation expense, and a $41.4 million increase in allocated facilities and other supporting overhead expenses due to the continued expansion of our real estate footprint and increase in support functions.
These increases were partially offset by a $13.3 million increase in the capitalization of costs associated with developing software for internal use.


| 12/2008 12/2009 12/2010 12/2011 12/2012 12/2013 | Valero Common Stock | S&P 500 | Old Peer Group | New Peer Group |


| Location Function Kraft linerboard mill Kraft linerboard mill Semi-chemical medium mill Semi-chemical medium mill Capacity (tons) 1,043,000 556,000 538,000 438,000 | Counce, TN | Total |


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 83 Dividends Dividends per share paid to shareholders were $4.55, $4.30 and $3.90 during 2018, 2017 and 2016, respectively.
Share Repurchase Program On July 25, 2017, our Board of Directors authorized an additional share repurchase program of up to $2 billion.
For the year ended December 31, 2018, we repurchased 7,456,038 shares at an aggregate purchase price of approximately $1.2 billion under this program.
At December 31, 2018, there were approximately $800 million in remaining funds authorized under this program.
Share repurchases are made from time to time on the open market as conditions warrant.
These programs do not obligate us to repurchase any of our shares and they have no expiration date.
Retained Earnings The increase to beginning retained earnings in 2018 of $72 million was a result of the adoption of the following accounting standards: ASU 2016-16 ($56 million), ASU 2016-01 ($17 million) and ASU 2014-09 ($0.4 million).
For additional information regarding the adoption of these accounting standards, see Note 1 to the Consolidated Financial Statements.
(12) SHARE-BASED INCENTIVE PLANS We sponsor several share-based employee incentive plans.
Share-based compensation expense for grants awarded under these plans was $51 million, $48 million and $39 million in 2018, 2017, and 2016, respectively.
Related income tax benefits recognized in earnings were $9 million, $16 million and $14 million in 2018, 2017, and 2016, respectively.
At December 31, 2018, unrecognized compensation cost related to non-vested stock option and stock unit awards totaled $54 million.
The cost of these non-vested awards is expected to be recognized over a weighted-average remaining vesting period of 23 months.
Share-Based Employee Incentive Plans On April 17, 2018, our stockholders approved the 2018 Omnibus Stock and Incentive Plan ("2018 OSIP").
This plan was adopted by our Board of Directors on February 20, 2018 and provides for the issuance of stock options, performance stock units, performance shares, restricted stock and restricted stock units.
No new awards may be granted under the 2018 OSIP after the tenth anniversary of the date that the stockholders approved the plan.
However, the term and exercise of awards granted before then may extend beyond that date.
At December 31, 2018, approximately 6.7 million shares remain available for issuance under the 2018 OSIP.
Stock Options Eligible employees may receive stock options as a portion of their total compensation.
Such options generally become exercisable over a 3-year period, expire 10 years from the date of grant and are subject to forfeiture upon termination of employment, other than by death, disability or retirement.
We use the Black-Scholes option-pricing model to measure the fair value of stock options granted to employees.
Granted options have exercise prices equal to the market price of Whirlpool common stock on the grant date.
The principal assumptions used in valuing options include: (1) risk-free interest rate - an estimate based on the yield of United States zero coupon securities with a maturity equal to the expected life of the option; (2) expected volatility - an estimate based on the historical volatility of Whirlpool common stock for a period equal to the expected life of the option; and (3) expected option life - an estimate based on historical experience.
Stock options are expensed on a straight-line basis, net of estimated forfeitures.
Based on the results of the model, the weighted-average grant date fair value of stock options granted for 2018, 2017, and 2016 were $38.34, $44.01 and $31.21, respectively, using the following assumptions:


| For the Years Ended December 31, | 2012 | (in thousands) | Net capital expenditures | Proceeds from sale of assets and securities | Acquisitions | Other investing activities, net-1 | Net cash flows used in investing activities |


| Natural Gas Fuel Oil Nuclear Fuel Coal | Year | 2004 | 2003 | 2002 | Natural Gas | 2004 | Entergy Arkansas (a) | Entergy Gulf States | Entergy Louisiana | Entergy Mississippi | Entergy New Orleans | System Energy | U.S. Utility (a) |


The Company will continue to recognize interest and penalties related to unrecognized tax benefits as a component of its income tax provision.
As of December 31, 2014 and 2013, the Company has $9,409 and $13,890, respectively, accrued for the payment of interest and penalties, excluding the federal tax benefit of interest deductions where applicable.
During the years ending December 31, 2014, 2013 and 2012, the Company accrued interest and penalties through the consolidated statements of operations of $(3,579), $74 and $(1,585), respectively.
The Company believes that its unrecognized tax benefits could decrease by $14,746 within the next twelve months.
The Company has effectively settled all Federal income tax matters related to years prior to 2010.
Various other state and foreign income tax returns are open to examination for various years.


| Year Ended December 31, | 2008 | (in millions) | Realized investment gains (losses) - Fixed Maturity Securities—Closed Block Business | Gross realized investment gains: | Gross gains on sales and maturities | Private bond prepayment premiums | Total | Gross realized investment losses: | Gross losses on sales and maturities-1 | Other-than-temporary impairments | Credit related losses on sales | Total | Realized investment gains (losses), net—Fixed Maturity Securities | Net gains (losses) on sales and maturities—Fixed Maturity Investments(1) |


| Years Ended December 31, | 2009 | (In millions) | Statement of Operations Data -1 | Revenues: | Premiums | Universal life and investment-type product policy fees | Net investment income | Other revenues | Net investment gains (losses) | Total revenues | Expenses: | Policyholder benefits and claims | Interest credited to policyholder account balances | Policyholder dividends | Other expenses | Total expenses | Income (loss) from continuing operations before provision for income tax | Provision for income tax expense (benefit) | Income (loss) from continuing operations, net of income tax | Income (loss) from discontinued operations, net of income tax | Net income (loss) | Less: Net income (loss) attributable to noncontrolling interests | Net income (loss) attributable to MetLife, Inc. | Less: Preferred stock dividends | Net income (loss) available to MetLife, Inc.’s common shareholders |


| 2009 2008 2007 | Shares issued, beginning of year | Shares issued, net | Exercise of stock options | Shares issued under Employee Stock Purchase Plan | Shares issued, end of year | Common Shares in treasury, end of year | Shares issued and outstanding, end of year | Common Shares issued to employee trust | Balance, beginning of year | Shares redeemed | Balance, end of year |


| Approximate Number Approximate Size in Square Feet | Switching centers | Data centers | Call center | Warehouses | Year Ended December 31, | (in millions) | Net income | Adjustments: | Interest expense | Interest expense to affiliates | Interest income-1 | Other (income) expense, net | Income tax expense (benefit) | Operating income-1 | Depreciation and amortization | Cost of MetroPCS business combination-2 | Stock-based compensation-3 | Other, net-4 | Adjusted EBITDA-1 | Net income margin (Net income divided by service revenues) | Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)(1) |


In April 2009, the FASB issued additional guidance under ASC 820 which provides guidance on estimating the fair value of an asset or liability (financial or nonfinancial) when the volume and level of activity for the asset or liability have significantly decreased, and on identifying transactions that are not orderly.
The application of the requirements of this guidance did not have a material effect on the accompanying consolidated financial statements.
In August 2009, the FASB issued ASU 2009-05, Measuring Liabilities at Fair Value, which further amends ASC 820 by providing clarification for circumstances in which a quoted price in an active market for the identical liability is not available.
The Company included the disclosures required by this guidance in the accompanying consolidated financial statements.
ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES In June 2006, the FASB issued guidance under ASC 740, Income Taxes (formerly FIN 48).
This guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in tax returns.
Specifically, the financial statement effects of a tax position may be recognized only when it is determined that it is more likely than not that, based on its technical merits, the tax position will be sustained upon examination by the relevant tax authority.
The amount recognized shall be measured as the largest amount of tax benefits that exceed a 50% probability of being recognized.
This guidance also expands income tax disclosure requirements.
International Paper applied the provisions of this guidance beginning in the first quarter of 2007.
The adoption of this guidance resulted in a charge to the beginning balance of retained earnings of $94 million at the date of adoption.


| December 31, 2011 | Weighted Average | Default rate-1 | Loss severity | Prepayment rate |


| 2011 | Allowance for loan and lease losses, January 1 | Loans and leases charged off | Recoveries of loans and leases previously charged off | Net charge-offs | Provision for loan and lease losses | Other | Allowance for loan and lease losses, December 31 | Reserve for unfunded lending commitments, January 1 | Provision for unfunded lending commitments | Other | Reserve for unfunded lending commitments, December 31 | Allowance for credit losses, December 31 |


above) increased 10% compared to 2010 expenses from operations of $6.18 billion ($6.84 billion net of $666 million, composed of a $7 million tax on bonus payments to employees in the U. K. , a $414 million securities lending charge and $245 million of acquisition and restructuring costs).
The increase mainly resulted from increases in compensation and employee benefits expenses from merit adjustments and acquisitions, and higher levels of professional services expenses.
In 2011, we secured mandates for approximately $1.41 trillion in assets to be serviced; of the total, $1.14 trillion was installed prior to December 31, 2011, with the remaining $270 billion expected to be installed in 2012.
The new business not installed by December 31, 2011 was not included in assets under custody and administration at that date, and had no impact on servicing fee revenue for 2011, as the assets are not included until their installation is complete and we begin to service them.
Once installed, the assets generate servicing fee revenue in subsequent periods.
We will provide various services for these assets including accounting, fund administration, custody, foreign exchange, securities finance, transfer agency, performance analytics, compliance reporting and monitoring, hedge fund servicing, private equity administration, real estate administration, depository banking services, wealth management services and investment manager operations outsourcing.
CONSOLIDATED RESULTS OF OPERATIONS This section discusses our consolidated results of operations for 2011 compared to 2010, and should be read in conjunction with the consolidated financial statements and accompanying notes included under Item 8.
A comparison of consolidated results of operations for 2010 with those for 2009 is provided under Comparison of 2010 and 2009 in this Managements Discussion and Analysis.


| Year Ended September 30, | 2006 | (In millions) | Capitalized interest, beginning of year | Interest incurred — homebuilding | Interest expensed | Directly — homebuilding | Amortized to cost of sales | Capitalized interest, end of year |


Segment Operating Performance The Company manages its business primarily on a geographic basis.
Accordingly, the Company determined its reportable operating segments, which are generally based on the nature and location of its customers, to be the Americas, Europe, Greater China, Japan, Rest of Asia Pacific and Retail.
The Americas segment includes both North and South America.
The Europe segment includes European countries, as well as India, the Middle East and Africa.
The Greater China segment includes China, Hong Kong and Taiwan.
The Rest of Asia Pacific segment includes Australia and Asian countries, other than those countries included in the Company’s other operating segments.
The results of the Company’s geographic segments do not include results of the Retail segment.
Each operating segment provides similar hardware and software products and similar services.
Further information regarding the Company’s operating segments may be found in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 11, “Segment Information and Geographic Data.


Item 1B.
Unresolved Staff Comments.
None.


| Twelve Months Ended December 31, Change | 2017 vs. 2016 | International | (In millions) | Operating revenue: | Asia Pacific | Europe | Latin America | Canada | Total operating revenue | % of consolidated revenue | Total operating income | Operating margin |


short-term borrowings from the Federal Reserve totaled $1.0 billion.
Those borrowings were bid for by the Company through the Federal Reserves TAF program and had maturities of 84 days.
As a source of funding and to enhance regulatory capital ratios, during January 2008, M&T Capital Trust IV issued $350 million of Enhanced Trust Preferred Securities bearing a fixed rate of interest of 8.50% and maturing in 2068.
The related junior subordinated debentures are included in long-term borrowings.
Such securities qualify for inclusion in the Companys Tier 1 Capital as defined by federal regulators.
The Company has issued subordinated capital notes from time to time to provide liquidity and enhance regulatory capital ratios.
Such notes qualify for inclusion in the Companys total capital as defined by federal regulators.
Information about the Companys borrowings is included in note 9 of Notes to Financial Statements.
The Company has informal and sometimes reciprocal sources of funding available through various arrangements for unsecured short-term borrowings from a wide group of banks and other financial institutions.
Short-term federal funds borrowings were $2.1 billion and $809 million at December 31, 2009 and 2008, respectively.
In general, those borrowings were unsecured and matured on the next business day.
As already noted, offshore branch deposits and brokered certificates of deposit have been used by the Company as an alternative to short-term borrowings.
Offshore branch deposits also generally mature on the next business day and totaled $1.1 billion and $4.0 billion at December 31, 2009 and 2008, respectively.
Outstanding brokered time deposits at December 31, 2009 and December 31, 2008 were $868 million and $487 million, respectively.
Such deposits at December 31, 2009 included $813 million of brokered time deposits obtained in the acquisition of Provident.
At December 31, 2009, the weighted-average remaining term to maturity of brokered time deposits was 21 months.
Certain of these brokered deposits have provisions that allow for early redemption.
The Company also had brokered NOW and brokered money-market deposit accounts which aggregated $618 million and $537 million at December 31, 2009 and 2008, respectively.
The Companys ability to obtain funding from these or other sources could be negatively affected should the Company experience a substantial deterioration in its financial condition or its debt ratings, or should the availability of short-term funding become restricted due to a disruption in the financial markets.
The Company attempts to quantify such credit-event risk by modeling scenarios that estimate the liquidity impact resulting from a short-term ratings downgrade over various grading levels.
Such impact is estimated by attempting to measure the effect on available unsecured lines of credit, available capacity from secured borrowing sources and securitizable assets.
Information about the credit ratings of M&T and M&T Bank is presented in table 15.
Additional information regarding the terms and maturities of all of the Companys short-term and long-term borrowings is provided in note 9 of Notes to Financial Statements.
In addition to deposits and borrowings, other sources of liquidity include maturities of investment securities and other earning assets, repayments of loans and investment securities, and cash generated from operations, such as fees collected for services.


The Company has also encountered various quality issues on its aircraft carrier construction and overhaul programs and its Virginia-class submarine construction program at its Newport News location.
These primarily involve matters related to filler metal used in pipe welds identified in 2007, and issues associated with non-nuclear weld inspection and the installation of weapons handling equipment on certain submarines, and certain purchased material quality issues identified in 2009.
The Company does not believe that resolution of these issues will have a material effect upon its consolidated financial position, results of operations or cash flows.
Environmental Matters—The estimated cost to complete environmental remediation has been accrued where it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party (“PRP”) by the Environmental Protection Agency, or similarly designated by another environmental agency, and these costs can be estimated by management.
These accruals do not include any litigation costs related to environmental matters, nor do they include amounts recorded as asset retirement obligations.
To assess the potential impact on the Company’s consolidated financial statements, management estimates the range of reasonably possible remediation costs that could be incurred by the Company, taking into account currently available facts on each site as well as the current state of technology and prior experience in remediating contaminated sites.
These estimates are reviewed periodically and adjusted to reflect changes in facts and technical and legal circumstances.
Management estimates that as of December 31, 2011, the probable future costs for environmental remediation is $3 million, which is accrued in other current liabilities.
Factors that could result in changes to the Company’s estimates include: modification of planned remedial actions, increases or decreases in the estimated time required to remediate, changes to the determination of legally responsible parties, discovery of more extensive contamination than anticipated, changes in laws and regulations affecting remediation requirements, and improvements in remediation technology.
Should other PRPs not pay their allocable share of remediation costs, the Company may have to incur costs exceeding those already estimated and accrued.
In addition, there are certain potential remediation sites where the costs of remediation cannot be reasonably estimated.
Although management cannot predict whether new information gained as projects progress will materially affect the estimated liability accrued, management does not believe that future remediation expenditures will have a material effect on the Company’s consolidated financial position, results of operations or cash flows.
Financial Arrangements—In the ordinary course of business, HII uses standby letters of credit issued by commercial banks and surety bonds issued by insurance companies principally to support the Company’s self-insured workers’ compensation plans.
At December 31, 2011, there were $121 million of standby letters of credit issued but undrawn and $297 million of surety bonds outstanding related to HII.
U. S.  Government Claims—From time to time, the U. S.  Government advises the Company of claims and penalties concerning certain potential disallowed costs.
When such findings are presented, the Company and U. S.  Government representatives engage in discussions to enable HII to evaluate the merits of these claims as well as to assess the amounts being claimed.
The Company does not believe that the outcome of any such matters will have a material effect on its consolidated financial position, results of operations or cash flows.
Collective Bargaining Agreements—The Company believes that it maintains good relations with its approximately 38,000 employees of which approximately 50% are covered by a total of 10 collective bargaining agreements.
The Company expects to renegotiate renewals of each of its collective bargaining agreements between 2013 and 2015 as they approach expiration.
Collective bargaining agreements generally expire after three to five years and are subject to renegotiation at that time.
It is not expected that the results of these negotiations, either individually or in the aggregate, will have a material effect on the Company’s consolidated results of operations.
Operating Leases—Rental expense for operating leases was $44 million in 2011, $44 million in 2010, and $48 million in 2009.
These amounts are net of immaterial amounts of sublease rental income.
Minimum rental commitments under long-term non-cancellable operating leases for the next five years and thereafter are:


The contractual maturities of held-to-maturity securities as of January 30, 2009 were in excess of three years and were $31.4 million at cost and $28.9 million at fair value, respectively.
For the Successor year ended January 30, 2009 and period ended February 1, 2008, and the Predecessor period ended July 6, 2007 and year ended February 2, 2007, gross realized gains and losses on the sales of available-for-sale securities were not material.
The cost of securities sold is based upon the specific identification method.
Merchandise inventories Inventories are stated at the lower of cost or market with cost determined using the retail last-in, first-out (“LIFO”) method.
Under the Company’s retail inventory method (“RIM”), the calculation of gross profit and the resulting valuation of inventories at cost are computed by applying a calculated cost-to-retail inventory ratio to the retail value of sales at a department level.
Costs directly associated with warehousing and distribution are capitalized into inventory.
The excess of current cost over LIFO cost was approximately $50.0 million at January 30, 2009 and $6.1 million at February 1, 2008.
Current cost is determined using the retail first-in, first-out method.
The Company’s LIFO reserves were adjusted to zero at July 6, 2007 as a result of the Merger.
The Successor recorded LIFO provisions of $43.9 million and $6.1 million during 2008 and 2007, respectively.
The Predecessor recorded a LIFO credit of $1.5 million in 2006.
In 2008, the increased commodity cost pressures mainly related to food and pet products which have been driven by fruit and vegetable prices and rising freight costs.
Increases in petroleum, resin, metals, pulp and other raw material commodity driven costs also resulted in multiple product cost increases.
The Company intends to address these commodity cost increases through negotiations with its vendors and by increasing retail prices as necessary.
On a quarterly basis, the Company estimates the annual impact of commodity cost fluctuations based upon the best available information at that point in time.
Store pre-opening costs Pre-opening costs related to new store openings and the construction periods are expensed as incurred.
Property and equipment Property and equipment are recorded at cost.
The Company provides for depreciation and amortization on a straight-line basis over the following estimated useful lives:


| (Millions of Dollars) Level 1 Level 2 Total | Equity (a) | Other Fixed Income Debt (b) | Cash and Cash Equivalents (c) | Total investments | Funds for retiree health benefits (d) | Investments (including funds for retiree health benefits) | Funds for retiree health benefits measured at net asset value (d)(e) | Pending activities (f) | Total fair value of plan net assets |


| December 31, 2006 | Balance Sheet Caption | (In millions) | Other assets: Prepaid pension benefit cost | Other assets: Intangible asset | Other liabilities: Accrued pension benefit cost | Other liabilities: Accrued other postretirement benefit cost | Accumulated other comprehensive income (loss), before income tax: | Defined benefit plans | Minority interest | Deferred income tax | Accumulated other comprehensive income (loss), net of income tax: | Defined benefit plans | December 31, 2006 | Pension Benefits | 2006 | (In millions) | Benefit obligation at end of year | Fair value of plan assets at end of year | Funded status at end of year | Unrecognized net actuarial (gains) losses | Unrecognized prior service cost (credit) | Unrecognized net asset at transition | Net prepaid (accrued) benefit cost recognized | Components of net amount recognized: | Qualified plan prepaid benefit cost | Non-qualified plan accrued benefit cost | Net prepaid (accrued) benefit cost recognized | Intangible asset | Additional minimum pension liability | Net amount recognized | Amounts recognized in the consolidated balance sheet consist of: | Other assets | Other liabilities | Net amount recognized | Accumulated other comprehensive (income) loss: | Net actuarial (gains) losses | Prior service cost (credit) | Net asset at transition | Additional minimum pension liability | 1,164 | Deferred income tax and minority interest | $741 |


| Chipotle Class A Common Stock Chipotle Class B Common Stock | High | 2007 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Chipotle Class A Common Stock | High | 2006 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter |


| As of December 31, | 2015 | (in millions) | Other guarantees where amount can be determined | Accrued liability for other guarantees and indemnifications | As of December 31, | 2015 | (in millions) | Other assets: | Premium tax offset for future undiscounted assessments | Premium tax offsets currently available for paid assessments | Total | Other liabilities: | Insolvency assessments |


| Years ended December 31 (in millions) 2016 2015 2014 | Net interest income | Provision for loan losses | Totalnon-interestincome | Totalnon-interestexpense | Income before income tax expense | Income tax expense | Net income | Average total assets | Average total liabilities |


| Instrument Amount of gainrecognized in AOCI(effective portion) Income Statement location Amount of gainreclassified fromaccumulated OCI intoincome (effective portion) | 2011 | Electricity forwards, swaps and options | 2010 | Electricity forwards, swaps and options | 2009 | Electricity forwards, swaps, and options |


Note D  Short Term Borrowing At December 31, 2004 and 2003, Con Edison and the Utilities had commercial paper programs totaling $950 million under which short-term borrowings are made at prevailing market rates.
These programs are supported by revolving credit agreements with banks.
At December 31, 2004, $56 million was outstanding under Con Edisons $350 million program and $100 million was outstanding under Con Edison of New Yorks $500 million program, both at a weighted average interest rate of 2.2 percent.
There was no balance outstanding under O&Rs $100 million program.
At December 31, 2003, $42 million was outstanding under Con Edisons $350 million program, $99 million was outstanding under Con Edison of New Yorks $500 million program, and $15 million was outstanding under O&Rs $100 million program, all at a weighted average interest rate of 1.0 percent.
The Utilities change the amount of their programs from time to time, subject to FERC-authorized limits of $1 billion for Con Edison of New York and $150 million for O&R.
Bank commitments under the revolving credit agreements total $950 million, of which $388 million and $563 million expire in November 2005 and November 2006, respectively.


| 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 | HUM | S&P 500 | Peer Group |


| (Dollars in millions) 2006 2005 | Investment banking income | Advisory fees | Debt underwriting | Equity underwriting | Total investment banking income | Sales and trading | Fixed income: | Liquid products | Credit products | Structured products | Total fixed income | Equity income | Total sales and trading-1 | Total Capital Markets and Advisory Services market-based revenue-1 |


| Dollars in millions December 31 2013 December 31 2012 | Basel I Tier 1 common capital | Less regulatory capital adjustments: | Basel III quantitative limits | Accumulated other comprehensive income (a) | All other adjustments | Estimated Fully Phased-In Basel III Tier 1 common capital | Estimated Basel III advanced approaches risk-weighted assets | Pro forma Fully Phased-In Basel III advanced approaches Tier 1 common capitalratio | Estimated Basel III standardized approach risk-weighted assets | Pro forma Fully Phased-In Basel III standardized approach Tier 1 common capitalratio |


| 2006 2005 | Remaining net rentals | Estimated unguaranteed residual value | Non-recourse mortgage debt | Unearned and deferred income | Net investment in leveraged lease |


Item 3.
LEGAL PROCEEDINGS During September and October 2010, PCA and eight other U. S.  and Canadian containerboard producers were named as defendants in five purported class action lawsuits filed in the United States District Court for the Northern District of Illinois, alleging violations of the Sherman Act.
The lawsuits have been consolidated in a single complaint under the caption Kleen Products LLC v Packaging Corp.  of America et al.
The consolidated complaint alleges that the defendants conspired to limit the supply of containerboard, and that the purpose and effect of the alleged conspiracy was to artificially increase prices of containerboard products during the period from August 2005 to the time of filing of the complaints.
The complaint was filed as a purported class action suit on behalf of all purchasers of containerboard products during such period.
The complaint seeks treble damages and costs, including attorney’s fees.
The defendants’ motions to dismiss the complaint were denied by the court in April 2011.
PCA believes the allegations are without merit and will defend this lawsuit vigorously.
However, as the lawsuit is in the early stages of discovery, PCA is unable to predict the ultimate outcome or estimate a range of reasonably possible losses.
PCA is a party to various other legal actions arising in the ordinary course of our business.
These legal actions cover a broad variety of claims spanning our entire business.
As of the date of this filing, we believe it is not reasonably possible that the resolution of these legal actions will, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.
NOTE 18 EQUITY COMMON STOCK On February 8, 2010, we raised $3.0 billion in new common equity through the issuance of 55.6 million shares of common stock in an underwritten offering at $54 per share.
The underwriters exercised their option to purchase an additional 8.3 million shares of common stock at the offering price of $54 per share, totaling approximately $450 million, to cover over-allotments.
We completed this issuance on March 11, 2010.


(K) Cash and Cash Equivalents The Company classifies any marketable security with a maturity date of 90 days or less at the time of purchase as a cash equivalent.
(L) Marketable Securities The Company classifies any security with a maturity date of greater than 90 days at the time of purchase as marketable securities and classifies marketable securities with a maturity date of greater than one year from the balance sheet date as long-term investments.
Under Statement of Financial Accounting Standards (SFAS) No.115, Accounting for Certain Investments in Debt and Equity Securities, securities that the Company has the positive intent and ability to hold to maturity are reported at amortized cost and classified as held-to-maturity securities.
The amortized cost and market value of marketable securities were approximately $25,654,000 and $25,661,000 at March 31, 2002, and $9,877,000 and $9,858,000 at March 31, 2003, respectively.
At March 31, 2003, these short-term investments consisted primarily of government securities.


| Natural Gas and Casinghead Gas (Bcf) | United States | Proved Reserves as of: | December 31, 2008 | Revisions of Previous Estimates-2 | Extensions, Discoveries and Other Additions-3 | Purchase of Minerals in Place-4 | Sale of Minerals in Place-5 | Production | December 31, 2009 | Revisions of Previous Estimates-2 | Extensions, Discoveries and Other Additions-3 | Purchase of Minerals in Place-4 | Sale of Minerals in Place-5 | Production | December 31, 2010 | Revisions of Previous Estimates-2 | Extensions, Discoveries and Other Additions-3 | Purchase of Minerals in Place-4 | Sale of Minerals in Place-5 | Production | December 31, 2011 | Proved Developed Reserves as of: | December 31, 2008 | December 31, 2009 | December 31, 2010 | December 31, 2011 | Proved Undeveloped Reserves as of: | December 31, 2008 | December 31, 2009 | December 31, 2010 | December 31, 2011 |


| 1% Increase 1% Decrease | Effect on total of service cost and interest cost | Effect on postretirement benefit obligation |


Digital Marketing Revenue from Digital Marketing increased $143.8 million during fiscal 2013 as compared to fiscal 2012.
The increase was primarily due to continued revenue growth associated with our Adobe Marketing Cloud, which increased 26% during fiscal 2013, as compared to the year ago period and includes Adobe Campaign revenue from our acquisition of Neolane in the third quarter of fiscal 2013.
The increase noted above was partially offset by expected declines in revenue associated with our legacy products during fiscal 2013.
Print and Publishing Revenue from Print and Publishing decreased during fiscal 2013 as compared to fiscal 2012, primarily due to increased ETLAs for certain products in this group.


Acetyl Intermediates
Table 1: Our Acetyl Intermediates segment produces and supplies acetyl products, including acetic acid, VAM, acetic anhydride and acetate esters.
These products are generally used as starting materials for colorants, paints, adhesives, coatings, medicines and more.
Other chemicals produced in this segment are organic solvents and intermediates for pharmaceutical, agricultural and chemical products.
Net sales increased by 7% during 2008 primarily due to increased prices and favorable foreign currency impacts, partially offset by lower volumes.
Our formula-based pricing arrangements benefited from higher ethylene and methanol costs during the first nine months of 2008.
Market tightness in the Americas and favorable foreign currency impacts in Europe also contributed to the increase in net sales.
Reduced volumes offset the increase in net sales as the slowdown of the global economy caused customers to slow production and diminish current inventory levels, particularly in Asia during the fourth quarter.
We expect the impact of our customers destocking initiatives to continue to a lesser extent during 2009.
Ethylene and methanol prices decreased during the fourth quarter of 2008 on slowed global demand.
Operating profit declined $307 million primarily as a result of higher ethylene, methanol and energy prices, increased other charges, increased depreciation and amortization and the absence of a $12 million gain on the sale of our Edmonton facility in 2007.
Other charges increased during 2008 partially due to $76 million of long-lived asset impairment losses recognized in 2008 related to the potential closure of our acetic acid and VAM production facility in Pardies, France, our VAM production unit in Cangrejera, Mexico (which we subsequently decided to shut down effective at the end of February 2009) and certain other facilities.
Other charges in 2008 also includes $23 million of long-lived asset impairment and $13 million of severance and retention charges related to the shutdown of our Pampa, Texas facility.
Also contributing to the increase was the absence of a one-time payment of $31 million received in 2007 in resolution of commercial disputes with a vendor and a $25 million decrease in insurance recoveries received in partial satisfaction of the losses resulting from the temporary outage of the acetic acid unit at our Clear Lake, Texas facility.
Increased depreciation and amortization expense during 2008 is the result of accelerated depreciation associated with the shutdown of our Pampa, Texas facility and a full year of depreciation for our acetic acid plant in Nanjing, China, which started up in mid-2007.
Earnings from continuing operations before tax and minority interest differs from operating profit primarily as a result of dividend income from our cost investment, National Methanol Co.  (Ibn Sina).
Increased dividend income of $41 million during 2008 had a positive impact on earnings from continuing operations before tax and minority interest.
Ibn Sina increased their dividends as a result of higher earnings from expanding margins for methanol and methyl tertiary-butyl ether.
The weighted average grant date fair value of options granted during 2012, 2011, and 2010 was $13, $19 and $20 per share, respectively.
The total intrinsic value of options exercised during the years ended December 31, 2012, 2011 and 2010, was $19.0 million, $4.2 million and $15.6 million, respectively.
In 2012, the company granted 931,340 shares of restricted Class A common stock and 4,048 shares of restricted stock units.
Restricted common stock and restricted stock units generally have a vesting period of 2 to 4 years.
The fair value related to these grants was $54.5 million, which is recognized as compensation expense on an accelerated basis over the vesting period.
Beginning with restricted stock grants in September 2010, dividends are accrued on restricted Class A common stock and restricted stock units and are paid once the restricted stock vests.
In 2012, the company also granted 138,410 performance shares.
The fair value related to these grants was $7.7 million, which is recognized as compensation expense on an accelerated and straight-lined basis over the vesting period.
The vesting of these shares is contingent on meeting stated performance or market conditions.
The following table summarizes restricted stock, restricted stock units, and performance shares activity for 2012:


| March 31, 2013 March 31, 2012 | (In millions) | Cash Equivalents | Money market funds-1 | Time deposits-2 | Repurchase agreements-2 | Total cash equivalents |


| Residential Commercial/Industrial Total Customers | Arkansas | Louisiana | Minnesota | Mississippi | Oklahoma | Texas | Total Gas Operations |


be adjusted by reference to a grid (the
“Pricing Grid”) based on the consolidated leverage ratio and ranges between 1.00% to 1.25% for adjusted LIBOR loans and 0.00% to 0.25% for alternate base rate loans.
The weighted average interest rate under the outstanding term loans and revolving credit facility borrowings was 1.6% and 1.3% during the years ended December 31, 2016 and 2015, respectively.
The Company pays a commitment fee on the average daily unused amount of the revolving credit facility and certain fees with respect to letters of credit.
As of December 31, 2016, the commitment fee was 15.0 basis points.
Since inception, the Company incurred and deferred $3.9 million in financing costs in connection with the credit agreement.3.250% Senior Notes In June 2016, the Company issued $600.0 million aggregate principal amount of 3.250% senior unsecured notes due June 15, 2026 (the “Notes”).
The proceeds were used to pay down amounts outstanding under the revolving credit facility.
Interest is payable semi-annually on June 15 and December 15 beginning December 15, 2016.
Prior to March 15, 2026 (three months prior to the maturity date of the Notes), the Company may redeem some or all of the Notes at any time or from time to time at a redemption price equal to the greater of 100% of the principal amount of the Notes to be redeemed or a “make-whole” amount applicable to such Notes as described in the indenture governing the Notes, plus accrued and unpaid interest to, but excluding, the redemption date.
On or after March 15, 2026 (three months prior to the maturity date of the Notes), the Company may redeem some or all of the Notes at any time or from time to time at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The indenture governing the Notes contains covenants, including limitations that restrict the Company’s ability and the ability of certain of its subsidiaries to create or incur secured indebtedness and enter into sale and leaseback transactions and the Company’s ability to consolidate, merge or transfer all or substantially all of its properties or assets to another person, in each case subject to material exceptions described in the indenture.
The Company incurred and deferred $5.3 million in financing costs in connection with the Notes.
Other Long Term Debt In December 2012, the Company entered into a $50.0 million recourse loan collateralized by the land, buildings and tenant improvements comprising the Company’s corporate headquarters.
The loan has a seven year term and maturity date of December 2019.
The loan bears interest at one month LIBOR plus a margin of 1.50%, and allows for prepayment without penalty.
The loan includes covenants and events of default substantially consistent with the Company’s credit agreement discussed above.
The loan also requires prior approval of the lender for certain matters related to the property, including transfers of any interest in the property.
As of December 31, 2016 and 2015, the outstanding balance on the loan was $42.0 million and $44.0 million, respectively.
The weighted average interest rate on the loan was 2.0% and 1.7% for the years ended December 31, 2016 and 2015, respectively.
The following are the scheduled maturities of long term debt as of December 31, 2016:


Table VII Allocation of the Allowance for Credit Losses by Product Type


| December 31, 2006 December 31, 2005 | Notional | Amount | (In millions) | Interest rate swaps | Interest rate floors | Interest rate caps | Financial futures | Foreign currency swaps | Foreign currency forwards | Options | Financial forwards | Credit default swaps | Synthetic GICs | Other | Total | December 31, 2006 | Primary Beneficiary | Maximum | Total | Assets-1 | (In millions) | Asset-backed securitizations and collateralized debt obligations | Real estate joint ventures-3 | Other limited partnerships interests-4 | Other investments-5 | Total |


| 2007 2008 Change | Capital gain distributions received | Other than temporary impairments recognized | Net gains (losses) realized on funddispositions | Net gain (loss) recognized on fund holdings |


Other expense, net increased $0.8 million to $7.2 million in 2015 from $6.4 million in 2014.
This increase was due to higher net losses on the combined foreign currency exchange rate changes on transactions denominated in foreign currencies and our foreign currency derivative financial instruments in 2015.
Provision for income taxes increased $19.9 million to $154.1 million in 2015 from $134.2 million in 2014.
Our effective tax rate was 39.9% in 2015 compared to 39.2% in 2014.
Our effective tax rate for 2015 was higher than the effective tax rate for 2014 primarily due to increased non-deductible costs incurred in connection with our Connected Fitness acquisitions in 2015.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013 Net revenues increased $752.3 million, or 32.3%, to $3,084.4 million in 2014 from $2,332.1 million in 2013.
Net revenues by product category are summarized below:


| December 31, 2014 | As Reported | Inventories | Total Current Assets | Property, plant and equipment, net | Other assets | Total Assets | Accounts payable | Income taxes payable | Other current liabilities | Total Current Liabilities | Long-term income tax payable | Total Liabilities | Retained earnings | Accumulated other comprehensive income | Total Zimmer Holdings, Inc. stockholders’ equity | Total Stockholders’ Equity | Total Liabilities and Stockholders’ Equity |


| ($ in millions) 2008 2007 2006 | Allstate Protection | Auto | Homeowners | Other lines | Total Allstate Protection | Discontinued Lines and Coverages | Asbestos | Environmental | Other discontinued lines | Total Discontinued Lines and Coverages | Total Property-Liability |


| December 31, 2010 December 31, 2009 | Amortized Cost-1 | (in millions) | Less than three months | Three months or greater but less than six months | Six months or greater but less than nine months | Nine months or greater but less than twelve months | Greater than twelve months | Total |


MARATHON OIL CORPORATION Notes to Consolidated Financial Statements equivalent to the Exchangeable Shares at the acquisition date as discussed below.
Additional shares of voting preferred stock will be issued as necessary to adjust the number of votes to account for changes in the exchange ratio.
Preferred shares – In connection with the acquisition of Western discussed in Note 6, the Board of Directors authorized a class of voting preferred stock consisting of 6 million shares.
Upon completion of the acquisition, we issued 5 million shares of this voting preferred stock to a trustee, who holds the shares for the benefit of the holders of the Exchangeable Shares discussed above.
Each share of voting preferred stock is entitled to one vote on all matters submitted to the holders of Marathon common stock.
Each holder of Exchangeable Shares may direct the trustee to vote the number of shares of voting preferred stock equal to the number of shares of Marathon common stock issuable upon the exchange of the Exchangeable Shares held by that holder.
In no event will the aggregate number of votes entitled to be cast by the trustee with respect to the outstanding shares of voting preferred stock exceed the number of votes entitled to be cast with respect to the outstanding Exchangeable Shares.
Except as otherwise provided in our restated certificate of incorporation or by applicable law, the common stock and the voting preferred stock will vote together as a single class in the election of directors of Marathon and on all other matters submitted to a vote of stockholders of Marathon generally.
The voting preferred stock will have no other voting rights except as required by law.
Other than dividends payable solely in shares of voting preferred stock, no dividend or other distribution, will be paid or payable to the holder of the voting preferred stock.
In the event of any liquidation, dissolution or winding up of Marathon, the holder of shares of the voting preferred stock will not be entitled to receive any assets of Marathon available for distribution to its stockholders.
The voting preferred stock is not convertible into any other class or series of the capital stock of Marathon or into cash, property or other rights, and may not be redeemed.25.


| December 31, | 2013 | (in millions) | Advice & Wealth Management | Asset Management | Annuities | Protection | Corporate & Other | Total assets |


Derivative Financial Instruments The Company uses derivatives to partially offset its business exposure to foreign exchange risk.
Foreign currency forward and option contracts are used to offset the foreign exchange risk on certain existing assets and liabilities and to hedge the foreign exchange risk on expected future cash flows on certain forecasted revenue and cost of sales.
From time to time, the Company enters into interest rate derivative agreements to modify the interest rate profile of certain investments and debt.
The Companys accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments.
The Company records all derivatives on the balance sheet at fair value.


increase in dividends paid.
Free cash flow is defined as cash provided by operating activities less cash used in investing activities and dividends paid.
Free cash flow is not considered a financial measure under accounting principles generally accepted in the U. S.  (GAAP) by SEC Regulation G and Item 10 of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner.
We believe free cash flow is important to management and investors in evaluating our financial performance and measures our ability to generate cash without additional external financings.
Free cash flow should be considered in addition to, rather than as a substitute for, cash provided by operating activities.
The following table reconciles cash provided by operating activities (GAAP measure) to free cash flow (non-GAAP measure):


| 2011 2012 2013 2014 2015 2016 | JKHY | Peer Group | S&P 500 |


| 2008 2007 2006 | Taxable-equivalent basisDollars in millions | Assets | Interest-earning assets | Investment securities | Securities available for sale | Residential mortgage-backed | Commercial mortgage-backed | Asset-backed | U.S. Treasury and government agencies | State and municipal | Other debt | Corporate stocks and other | Total securities available for sale | Securities held to maturity | Total investment securities | Loans | Commercial | Commercial real estate | Equipment lease financing | Consumer | Residential mortgage | Other | Total loans | Loans held for sale | Federal funds sold and resale agreements | Other | Total interest-earning assets/interest income | Noninterest-earning assets | Allowance for loan and lease losses | Cash and due from banks | Other | Total assets | Liabilities, Minority and Noncontrolling Interests, and Shareholders’ Equity | Interest-bearing liabilities | Interest-bearing deposits | Money market | Demand | Savings | Retail certificates of deposit | Other time | Time deposits in foreign offices | Total interest-bearing deposits | Borrowed funds | Federal funds purchased and repurchase agreements | Federal Home Loan Bank borrowings | Bank notes and senior debt | Subordinated debt | Other | Total borrowed funds | Total interest-bearing liabilities/interest expense | Noninterest-bearing liabilities, minority and noncontrolling interests, and shareholders’ equity | Demand and other noninterest-bearing deposits | Allowance for unfunded loan commitments and letters of credit | Accrued expenses and other liabilities | Minority and noncontrolling interests in consolidated entities | Shareholders’ equity | Total liabilities, minority and noncontrolling interests, and shareholders’equity | Interest rate spread | Impact of noninterest-bearing sources | Net interest income/margin | Change in Assumption | .5% decrease in discount rate(a) | .5% decrease in expected long-term return on assets | .5% increase in compensation rate |


| As of December 31, | 2018 | Consolidated Balance Sheet Data | Cash and cash equivalents | Margin deposits, guaranty funds and delivery contracts receivable-1 | Total current assets | Goodwill and other intangible assets, net-2 | Total assets | Margin deposits, guaranty funds and delivery contracts payable-1 | Total current liabilities | Short-term and long-term debt-2 | Equity-2 |


| Table 2 Summary Income Statement | (Dollars in millions) | Net interest income (FTE basis)(1) | Noninterest income | Total revenue, net of interest expense (FTE basis)(1) | Provision for credit losses | Goodwill impairment | All other noninterest expense | Income (loss) before income taxes | Income tax expense (benefit) (FTE basis)(1) | Net income (loss) | Preferred stock dividends | Net income (loss) applicable to common shareholders | Per common share information | Earnings (loss) | Diluted earnings (loss) |