| In millions 2013 2012 | January 1 | New nonperforming assets (a) | Charge-offs and valuation adjustments (b) | Principal activity, including paydowns and payoffs | Asset sales and transfers to loans held for sale | Returned to performing status | December 31 |


| December 31, 2009 | Assets acquired in loan | Loans | Held-for-sale | (in millions) | Investment Bank | Commercial Banking | Treasury & Securities Services | Asset Management | Corporate/Private Equity | Total | (in millions) | Contractually required paymentsreceivable | (including interest) | Less: Nonaccretable difference | Cash flows expected to becollected(a)(b) | Less: Accretable yield(b)(c) | Fair value of loans acquired | (in millions) | Balance, January 1 | Washington Mutual acquisition(a) | Accretion into interest income | Changes in interest rates onvariable rate loans | Other changes in expected cashflows(b) | Balance, December 31, | Accretable yield percentage |


Revisions of previous estimates include the transfer of PUDs to unproved reserve categories as a result of changes in development plans and/or the impact of changes in commodity prices, and the addition of new PUDs arising from current development plans.
Negative revisions of 177 MMBoe in the US for 2015 included: ?
the transfer to unproved reserves of 183 MMBoe due to negative price revisions attributed to low commodity price outlook and negative revisions of 48 MMBoe due to reduced future development activity, primarily in the DJ Basin; offset by: ?54 MMBoe positive revisions primarily in the Marcellus Shale, Eagle Ford Shale and Permian Basin due to current drilling and development plans.
Extensions, discoveries and other additions include addition of proved reserves through additional drilling or the discovery of new reservoirs in proven fields.
During 2015, we recorded additions of 68 MMBoe and 9 MMBoe in the DJ Basin and Marcellus Shale, respectively, as a result of successful expansion of our extended reach lateral well programs.
Purchases of minerals included 119 MMBoe and 24 MMBoe in the Eagle Ford Shale and Permian Basin, respectively, as a result of the Rosetta Merger.
Conversion to proved developed reserves primarily included the transfer of 39 MMBoe, 22 MMBoe, 17 MMBoe and 11 MMBoe from the Marcellus Shale, DJ Basin, Eagle Ford Shale and deepwater Gulf of Mexico, respectively.
In 2015, we converted 89 MMBoe of US PUDs, or 23% of our 2014 US PUD balance, to developed status.
Based on our current inventory of identified horizontal well locations and our anticipated rate of drilling and completion activity, we expect our US PUDs as of December 31, 2015 to be converted to proved developed reserves well within a five-year period.
US PUDs Locations As of December 31, 2015, our US PUDs included: ?147 MMBoe in the DJ Basin; ?50 MMBoe in the Marcellus Shale; ?102 MMBoe in the Eagle Ford Shale; ?31 MMBoe in the Permian Basin; and ?14 MMBoe in the deepwater Gulf of Mexico primarily associated with the Gunflint project.
Our PUDs are expected to be recovered from new wells on undrilled acreage or from existing wells where additional capital expenditures are required for completion, such as drilled but uncompleted (DUC) wells.
As of December 31, 2015, we had approximately 98 MMBoe of proved undeveloped reserves associated with DUC well locations related to our onshore US operations, approximately one-half of which are in the Marcellus Shale, nearly one-third are in the Eagle Ford Shale and the remainder are in the DJ Basin and Permian Basin.
International PUDs Locations As of December 31, 2015, our international PUDs included: ?70 MMBoe in the Alba field, offshore Equatorial Guinea, all of which have been recorded as PUDs for over five years and are attributable to a sanctioned compression project which is currently under construction and expected to come online mid-2016.
These volumes, which will be recovered through existing wells, will be reclassified to proved developed at start-up, currently expected in second quarter 2016; and ?71 MMBoe in Israel primarily in the Tamar and Tamar Southwest fields, including PUDs of 32 MMBoe related to the Tamar Southwest field, which is awaiting government approval of the development plan.


| Year ended December 31, | (Dollar amounts in millions, except per share data) | Income statement data: | Revenue | Related parties-2 | Other third parties | Total revenue | Expenses | Restructuring charges | Other operating expenses | Total expenses | Operating income | Total non-operating income (expense) | Income before income taxes | Income tax expense | Net income | Less: Net income (loss) attributable to non-controlling interests | Net income attributable to BlackRock, Inc. | Per share data:-3 | Basic earnings | Diluted earnings | Book value-4 | Common and preferred cash dividends |


| 2012 2011 2010 | Net income | Shares used to compute basic net income per share | Dilutive potential common shares: | Unvested restricted stock and performance share awards | Stock options | Shares used to compute diluted net income per share | Basic net income per share | Diluted net income per share |


| December 31, 2008 | Outstandings | (Dollars in millions) | California | Florida | New York | Texas | Virginia | Other U.S./Foreign | Total residential mortgage loans (excluding SOP 03-3 loans) | Total SOP 03-3 residential mortgage loans-1 | Total residential mortgage loans |


| (Dollars in millions) 2003 2002 Change | External Sales | Volume effect | Price effect | Product mix effect | Exchange rate effect | Interdivisional sales | Operating earnings | Asset impairments and restructuring charges, net |


| December 31 | (Dollars in millions) | By counterparty | Private-label securitization trustees, whole-loan investors, including third-party securitizationsponsors and other-3 | Monolines | GSEs | Total unresolved repurchase claims by counterparty-3 | By product type | Prime loans | Alt-A | Home equity | Pay option | Subprime | Other | Total unresolved repurchase claims by product type-3 |


| As at December 31, 2010 2009 | 4.50% Guaranteed Notes due 2014 | 2.75% Guranteed Notes due 2015 | 5.25% Guaranteed Notes due 2013 | 9.75% Senior Notes due 2019-1 | 3.00% Guaranteed Notes due 2013 | 8.625% Senior Notes due 2014-1 | 6.00% Senior Notes due 2016-1 | 6.5% Notes due 2012 | 5.875% Guaranteed Bonds due 2011 | Commercial paper borrowings | Other variable rate debt | 5,504 | Fair value adjustment – hedging | $5,517 |


Effective January 1, 2003, Marathon adopted Statement of Financial Accounting Standards No.146 “Accounting for Exit or Disposal Activities” (“SFAS No.146”).
SFAS No.146 is effective for exit or disposal activities that are initiated after December 31, 2002.
There were no impacts upon the initial adoption of SFAS No.146.


| Floating rate due December 15, 2015 $500 | Floating rate due December 15, 2016 | 1.20% due December 15, 2016-1 | 2.25% due December 15, 2018 | Discount and issuance costs | Net proceeds |


| 2016 2015 2014 | United States | China | Other international locations | Total |


| Options Outstanding Weighted-   Average   Exercise Price   Per Share Weighted-   Average   Remaining   Contractual   Term in Years Aggregate   Intrinsic Value | Options outstanding at October 30, 2010 | Options granted | Options exercised | Options forfeited | Options expired | Options outstanding October 29, 2011 | Options exercisable at October 29, 2011 | Options vested or expected to vest October 29, 2011-1 |


| In billions of dollars Dec. 31, 2017 Sept. 30, 2017 Dec. 31, 2016 | HQLA | Net outflows | LCR | HQLA in excess of net outflows |


| 2009 2008 2007 | Risk-free interest rate | Expected life (years) | Expected volatility |


| Unrecognized tax benefit—January 1, 2008 $7,928 | Ansoft unrecognized tax benefit—acquired July 31, 2008 | Gross increases—tax positions in prior period | Gross decreases—tax positions in prior period | Gross increases—tax positions in current period | Reductions due to a lapse of the applicable statute of limitations | Changes due to currency fluctuation | Settlements | Unrecognized tax benefit—December 31, 2008 |


| 363 Sale | Total  Obligation | Description of Funding Commitment | Total UST Funding | Total EDC Funding | Total UST and EDC Funding |


Table 1 ##
For further discussion of the company’s gas operating revenues and its gas results, see “Results of Operations” in Item 7.
For additional segment information, see Note N to the financial statements in Item 8.
Gas Peak Demand The gas peak demand for firm service customers in CECONY’s service area occurs during the winter heating season.
The daily peak day demand during the winter 2010/2011 (through January 25, 2011) occurred on January 23, 2011 when the demand reached 891 mdths.
The 2010/2011 winter demand included an estimated 587 mdths for CECONY’s full-service customers and 304 mdths for customers participating in its gas retail access program.
“Design weather” for the gas system is a standard to which the actual peak demand is adjusted for evaluation and planning purposes.
The company estimates that under design weather conditions the 2011/2012 service area peak demand will be 1,151 mdths, including an estimated 675 mdths for its full-service customers and 475 mdths for its retail access customers.
The company forecasts average annual growth of the peak gas demand over the next five years at design conditions to be approximately 1.1 percent in its service area.
The forecasted peak demand at design conditions does not include gas used by interruptible gas customers or in generating stations (electricity and steam).
The company continues to monitor the potential impact on customer demand from the current economic conditions Gas Supply CECONY and O&R have combined their gas requirements, and contracts to meet those requirements, into a single portfolio.
The combined portfolio is administered by, and related management services are provided by, CECONY (for itself and as agent for O&R) and costs are allocated between the Utilities in accordance with provisions approved by the NYSPSC.
See Note S to the financial statements in Item 8.
Charges from suppliers for the firm purchase of gas, which are based on formulas or indexes or are subject to negotiation, are generally designed to approximate market prices.
The gas supply contracts are for various terms extending to 2014.
The Utilities have contracts with interstate pipeline companies for the purchase of firm transportation from upstream points where gas has been purchased to the Utilities’ distribution systems, and for upstream storage services.
Charges under these transportation and storage contracts are approved by the FERC.
Such contracts are for various terms extending to 2023.
The Utilities are required to pay certain fixed charges under the supply, transportation and storage contracts whether or not the contracted capacity is actually used.
These fixed charges amounted to approximately $246 million in 2010, including $205 million for CECONY.
See “Contractual Obligations” below.
In addition, the Utilities purchase gas on the spot market and contract for interruptible gas transportation.
See “Recoverable Energy Costs” in Note A to the financial statements in Item 8
Assumed health care cost trend rates for the U. S.  retiree health care benefit plan as of December 31 are as follows:


| December 31, 2010 | Fixed Maturity Securities | (In millions) | Outstanding principal and interest balance -1 | Carrying value -2 | Year Ended December 31, 2010 | Fixed Maturity Securities | (In millions) | Contractually required payments (including interest) | Cash flows expected to be collected -1 (2) | Fair value of investments acquired | December 31, | 2010 | (In millions) | Balance Sheet Data -1 | Assets: | General account assets -2 | Separate account assets | Total assets | Liabilities: | Policyholder liabilities and other policy-related balances -3 | Payables for collateral under securities loaned and other transactions | Bank deposits | Short-term debt | Long-term debt -2 | Collateral financing arrangements | Junior subordinated debt securities | Other -2 | Separate account liabilities | Total liabilities | Redeemable noncontrolling interests in partially owned consolidated securities | Equity: | MetLife, Inc.’s stockholders’ equity: | Preferred stock, at par value | Convertible preferred stock, at par value | Common stock, at par value | Additional paid-in capital | Retained earnings | Treasury stock, at cost | Accumulated other comprehensive income (loss) | Total MetLife, Inc.’s stockholders’ equity | Noncontrolling interests | Total equity | Total liabilities and equity | Years Ended December 31, | 2010 | (In millions, except per share data) | Other Data -1, (4) | Net income (loss) available to MetLife, Inc.’s common shareholders | Return on MetLife, Inc.’s common equity | Return on MetLife, Inc.’s common equity, excluding accumulated other comprehensive income (loss) | EPS Data -1, (5) | Income (Loss) from Continuing Operations Available to MetLife, Inc.’s Common Shareholders Per Common Share: | Basic | Diluted | Income (Loss) from Discontinued Operations Per Common Share: | Basic | Diluted | Net Income (Loss) Available to MetLife, Inc.’s Common Shareholders Per Common Share: | Basic | Diluted | Cash Dividends Declared Per Common Share |


| 2010 $220 | 2011 | 2012 | 2013 | 2014 |


| 2009 2010 2011 2012 2013 Thereafter Total | Deferred acquisition payments | Put and call options with affiliates1 | Total contingent acquisition payments | Less cash compensation expense included above | Total |


CITIZENS FINANCIAL GROUP, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 183 The table below summarizes TDRs that defaulted during the years ended December 31, 2014, 2013 and 2012 within 12 months of their modification date.
For purposes of this table, a payment default is defined as being past due 90 days or more under the modified terms.
Amounts represent the loan's recorded investment at the time of payment default.
Loan data includes loans meeting the criteria that were paid off in full, charged off, or sold prior to December 31, 2014 and 2013.
If a TDR of any loan type becomes 90 days past due after being modified, the loan is written down to the fair value of collateral less cost to sell.
The amount written off is charged to the ALLL.


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


Award Proceedings in relation to Domination Agreement and Squeeze-Out On October 1, 2004, Celanese GmbH and the Companys subsidiary, BCP Holdings GmbH (BCP Holdings), a German limited liability company, entered into a Domination Agreement pursuant to which the BCP Holdings became obligated to offer to acquire all outstanding Celanese GmbH shares from the minority shareholders of Celanese GmbH in return for payment of fair cash compensation (the Purchaser Offer).
The amount of this fair cash compensation was determined to be A41.92 per share in accordance with applicable German law.
All minority shareholders who elected not to sell their shares to the BCP Holdings under the Purchaser Offer were entitled to remain shareholders of Celanese GmbH and to receive from the BCP Holdings a gross guaranteed annual payment of A3.27 per Celanese GmbH share less certain corporate taxes in lieu of any dividend.
As of March 30, 2005, several minority shareholders of Celanese GmbH had initiated special award proceedings seeking the courts review of the amounts of the fair cash compensation and of the guaranteed annual payment offered in the Purchaser Offer under the Domination Agreement.
In the Purchaser Offer, 145,387 shares were tendered at the fair cash compensation of A41.92, and 924,078 shares initially remained outstanding and were entitled to the guaranteed annual payment under the Domination Agreement.
As a result of these proceedings, the amount of the fair cash consideration and the guaranteed annual payment paid under the Domination Agreement could be increased by the court so that all minority shareholders, including those who have already tendered their shares in the Purchaser Offer for the fair cash compensation, could claim the respective higher amounts.
On December 12, 2006, the court of first instance appointed an expert to assist the court in determining the value of Celanese GmbH.
On May 30, 2006 the majority shareholder of Celanese GmbH adopted a squeeze-out resolution under which all outstanding shares held by minority shareholders should be transferred to BCP Holdings for a fair cash compensation of A66.99 per share (the Squeeze-Out).
This shareholder resolution was challenged by shareholders but the Squeeze-Out became effective after the disputes were settled on December 22, 2006.
Award proceedings were subsequently filed by 79 shareholders against BCP Holdings with the Frankfurt District Court requesting the court to set a higher amount for the Squeeze-Out compensation.
Pursuant to a settlement agreement between BCP Holdings and certain former Celanese GmbH shareholders, if the court sets a higher value for the fair cash compensation or the guaranteed payment under the Purchaser Offer or the Squeeze-Out compensation, former Celanese GmbH shareholders who ceased to be shareholders of Celanese GmbH due to the Squeeze-Out will be entitled to claim for their shares the higher of the compensation amounts determined by the court in these different proceedings related to the Purchaser Offer and the Squeeze-Out.
If the fair cash compensation determined by the court is higher than the Squeeze-Out compensation of A 66.99, then 1,069,465 shares will be entitled to an adjustment.
If the court confirms the value of the fair cash compensation under the Domination Agreement but determines a higher value for the Squeeze-Out compensation, 924,078 shares


Revenue from AZLP, primarily relating to sales of Nexium and Prilosec, was $463 million in 2014 through the termination date on June 30, 2014, $920 million in 2013 and $915 million in 2012.
Consumer Care As noted above, on October 1, 2014, the Company divested its Consumer Care segment.
Consumer Care products included over-the-counter, foot care and sun care products.
Global sales of Consumer Care were $1.5 billion in 2014, $1.9 billion in 2013 and $2.0 billion in 2012.


Residential mortgages Classification and Valuation  Residential mortgage loans and MBS are classified within level 2 or level 3 of the valuation hierarchy, depending on the level of liquidity and activity in the markets for a particular product.
Level 3 assets include nonagency residential whole loans and subordinated nonagency residential MBS.
Products that continue to have reliable price transparency as evidenced by consistent market transactions, such as senior nonagency securities, as well as agency securities, are classified in level 2.
For those products classified within level 2 of the valuation hierarchy, the Firm estimates the value of such instruments using a combination of observed transaction prices, independent pricing services and relevant broker quotes.
Consideration is given to the nature of the quotes (e. g. , indicative or firm) and the relationship of recently evidenced market activity to the prices provided from independent pricing services.
When relevant market activity is not occurring or is limited, the fair value is estimated as follows: Residential mortgage loans  Fair value of residential mortgage loans is estimated by projecting the expected cash flows and discounting those cash flows at a rate reflective of current market liquidity.
To estimate the projected cash flows (inclusive of assumptions of prepayment, default rates and loss severity), specific consideration is given to both borrower-specific and other market factors, including, but not limited to: the borrowers FICO score; the type of collateral supporting the loan; an estimate of the current value of the collateral supporting the loan; the level of documentation for the loan; and market-derived expectations for home price appreciation or depreciation in the respective geography of the borrower.
Residential mortgage-backed securities  Fair value of residential MBS is estimated considering the value of the collateral and the specific attributes of the securities held by the Firm.
The value of the collateral pool supporting the securities is analyzed using the same techniques and factors described above for residential mortgage loans, albeit in a more aggregated manner across the pool.
For example, average FICO scores, average delinquency rates, average loss severities and prepayment rates, among other metrics, may be evaluated.
In addition, as each securitization vehicle distributes cash in a manner or order that is predetermined at the inception of the vehicle, the priority in which each particular MBS is allocated cash flows, and the level of credit enhancement that is in place to support those cash flows, are key considerations in deriving the value of residential MBS.
Finally, the risk premium that investors demand for securitized products in the current market is factored into the valuation.
To benchmark its valuations, the Firm looks to transactions for similar instruments and utilizes independ-


PART II Investment in Foreign Subsidiaries The Company views its investment in foreign subsidiaries as a long-term commitment, and does not hedge translation exposures.
The investment in a foreign subsidiary may take the form of either permanent capital or notes.
The Company’s net investment (i. e. , total assets less total liabilities subject to translation exposure) in foreign subsidiaries at December 31 is as follows:


| December 31, (in millions) 2005 2004 (c) | Allowance for lending-related commitmentsat January 1 | Addition resulting from the Merger, July 1, 2004 | Provision for lending-related commitments: | Provision excludingaccounting policy conformity | Accounting policy conformity(a) | Total Provision for lending-related commitments | Other | Allowance for lending-related commitmentsat December 31(b) |


| 2005 2004 | ($ in millions) | Notes and other long-term assets | Long-term debt and other long-term liabilities | Derivative instruments |


| Year Ended December 31, | (dollars in millions) | Service charges and fees | Card fees | Trust and investment services fees | Mortgage banking fees | Capital markets fees | Foreign exchange and letter of credit fees | Bank-owned life insurance income | Securities gains, net | Other income-1 | Noninterest income |


| December 31 | Outstandings | (Dollars in millions) | California | Florida | Texas | New York | New Jersey | Other U.S. | Total credit card – domestic loan portfolio |


| For the year ended December 31, | 2007 | (in millions) | Proceeds from new securitizations | Servicing fees received | Other cash flows received on retained interests |


?
On March 6, 2018, Discovery acquired Scripps Networks.
Scripps Networks is a wholly-owned subsidiary whose total assets and total revenues represented approximately 55% and 29%, respectively, of the Companys related consolidated financial statement amounts as of and for the year ended December 31, 2018.
On April 30, 2018, Discovery sold an 88% controlling equity stake in its Education Business to Francisco Partners for a sale price of $113 million.
The Company recorded a gain of $84 million based on net assets disposed of $44 million, including $40 million of goodwill.
(See Note 3 to the accompanying consolidated financial statements. )
For the year ended December 31, 2018, Discovery has incurred transaction and integration costs for the Scripps Networks acquisition of $110 million.


The Company provides limited postemployment benefits to eligible former U. S.  employees, primarily severance under a formal severance plan (the “Severance Plan”).
The Company accounts for severance expense by accruing the expected cost of the severance benefits expected to be provided to former employees after employment over their relevant service periods.
The Company updates the assumptions in determining the severance accrual by evaluating the actual severance activity and long-term trends underlying the assumptions.
As a result of updating the assumptions, the Company recorded incremental severance expense (benefit) related to the Severance Plan of $3,471, $2,643 and $(3,418), respectively, during the years 2009, 2008 and 2007.
These amounts were part of total severance expenses of $135,113, $32,997 and $21,284 in 2009, 2008 and 2007, respectively, included in general and administrative expenses in the accompanying consolidated statements of operations.
Note 14.
Debt On April 28, 2008, the Company extended its committed unsecured revolving credit facility, dated as of April 28, 2006 (the “Credit Facility”), for an additional year.
The new expiration date of the Credit Facility is April 26, 2011.
The available funding under the Credit Facility will remain at $2,500,000 through April 27, 2010 and then decrease to $2,000,000 during the final year of the Credit Facility agreement.
Other terms and conditions in the Credit Facility remain unchanged.
The Company’s option to request that each lender under the Credit Facility extend its commitment was provided pursuant to the original terms of the Credit Facility agreement.
Borrowings under the facility are available to provide liquidity in the event of one or more settlement failures by MasterCard International customers and, subject to a limit of $500,000, for general corporate purposes.
The facility fee and borrowing cost are contingent upon the Company’s credit rating.
At December 31, 2009, the facility fee was 7 basis points on the total commitment, or approximately $1,774 annually.
Interest on borrowings under the Credit Facility would be charged at the London Interbank Offered Rate (LIBOR) plus an applicable margin of 28 basis points or an alternative base rate, and a utilization fee of 10 basis points would be charged if outstanding borrowings under the facility exceed 50% of commitments.
At the inception of the Credit Facility, the Company also agreed to pay upfront fees of $1,250 and administrative fees of $325, which are being amortized over five years.
Facility and other fees associated with the Credit Facility totaled $2,222, $2,353 and $2,477 for each of the years ended December 31, 2009, 2008 and 2007, respectively.
MasterCard was in compliance with the covenants of the Credit Facility and had no borrowings under the Credit Facility at December 31, 2009 or December 31, 2008.
The majority of Credit Facility lenders are members or affiliates of members of MasterCard International.
In June 1998, MasterCard International issued ten-year unsecured, subordinated notes (the “Notes”) paying a fixed interest rate of 6.67% per annum.
MasterCard repaid the entire principal amount of $80,000 on June 30, 2008 pursuant to the terms of the Notes.
The interest expense on the Notes was $2,668 and $5,336 for each of the years ended December 31, 2008 and 2007, respectively.


| ($ in millions) Total 2012 2013 - 2014 2015 - 2016 2017 and beyond | Long-term debt | Interest payments on long-term debt -1 | Operating leases | Purchase obligations -2 | Other long-term liabilities -3 | Total contractual obligations |


| 2017 2016 | Long-term contracts in progress | Commercial aircraft programs | Commercial spare parts, used aircraft, general stock materials and other | Inventory before advances and progress billings | Less advances and progress billings | Total |


| Payments Due by Period | (In millions) | Long-Term Debt, including current portion,excluding capital lease obligations-1 | Operating lease obligations-2 | Capital lease obligations-3 | Purchase obligations and other-4 -5 (6) | Total |


| Payments Due by Period | December 31, 2015 | (In millions) | Debt (a) | Operating leases | Claim and claim adjustment expense reserves (b) | Future policy benefits reserves (c) | Rig construction contracts | Purchase and other obligations | Total (d) | Statutory Capital and Surplus December 31 | 2015 (a) | (In millions) | Combined Continental Casualty Companies | Life company |


The increase in gross margin was due to higher volumes for all businesses, increased aftertreatment content on 2010 North American truck engines and efficiencies gained from restructuring actions partially offset by higher commodity costs and warranty expenses.
The increase in selling, general and administrative expenses and research, development and engineering expenses were primarily due to increased variable compensation which resulted from the segments strong performance; other people costs and new product development program spending.
The increase in equity, royalty and interest income from investees was driven by improved joint venture income from the filtration business in China and India.


| Years Ended December 31, | 2013 | (in millions) | Revenues | Management and financial advice fees | Distribution fees | Net investment income | Other revenues | Total revenues | Banking and deposit interest expense | Total net revenues | Expenses | Distribution expenses | Amortization of deferred acquisition costs | Interest and debt expense | General and administrative expense | Total expenses | Operating earnings |


| Year ended December 31, 2014 Year ended December 31, 2013 | As Reported | Net earnings | Deferred income tax provision | Changes in operating assets and liabilities, net of effect of acquisitions: | Income taxes payable | Inventories | Accounts payable and accrued expenses | Other assets and liabilities |


| Fair Value Note 2 Page 130 | Investment Securities | Loans and Leases | Goodwill and Other Intangible Assets | Contingencies | Variable Interest Entities | Equity-Based Compensation | Regulatory Capital | Derivative Financial Instruments | Income Taxes | Earnings Per Common Share |


The Company and its subsidiaries are routinely examined by various taxing authorities.
The Internal Revenue Service (“IRS”) has initiated examinations of certain of the Company’s Federal income tax returns for the years 2006 and 2007.
In addition, the Company has subsidiaries in Germany, Canada, France, and various other states, provinces and countries that are currently under audit for years ranging from 2001 through 2007.
To date, there have been no adjustments associated with in-process or recently settled audits that would have a material impact on the Company’s financial position or results of operations.
The Company files numerous consolidated and separate income tax returns in the United States Federal jurisdiction and in many state and foreign jurisdictions.
With few exceptions, the Company is no longer subject to U. S.  Federal income tax examinations for years before 2004 and is no longer subject to state, local and foreign income tax examinations by tax authorities for years before 2001.


| December 1, 2013 December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 | Allegion plc | S&P 500 | S&P 400 Capital Goods |


| Year Ended December | $ in millions | Fixed Income, Currency and Commodities Client Execution | Equities client execution1 | Commissions and fees | Securities services | Total Equities | Total net revenues | Operating expenses | Pre-tax earnings |


| Segment | Private client group | (in thousands) | Goodwill at September 30, 2012 | Additions-1 | Impairment losses-2 | Goodwill at September 30, 2013 | Impairment losses | Goodwill at September 30, 2014 |


LIQUIDITY AND CAPITAL RESOURCES Liquidity Sources of Cash Historically, we have generated a significant amount of cash from operations.
During the year ended December 31, 2017, we funded our working capital needs primarily through cash flows from operations.
As of December 31, 2017, we had $7.3 billion of cash and cash equivalents on hand.
We maintain an effective Registration Statement on Form S-3 that allows us to conduct registered offerings of securities, including debt securities, common stock and preferred stock.
Access to sufficient capital from the public market is not assured.
closing price of our common stock on December 31, 2009, which would have been received by the option holders had all option holders exercised their options as of that date.
This amount changes based upon the fair market value of our common stock.
The total intrinsic value of stock options exercised was $27.2 million, $33.5 million and $52.4 million during the years ended December 31, 2009, 2008 and 2007, respectively.
Note 6.


| Total Less than1 year 1-3 years 3-5 years More than5 years | Long-term debt-1 | Operating leases-2 | Ship construction contracts-3 | Port facilities-4 | Interest-5 | Other-6 | Total |


Other revenues increased $18 million, or 5%, to $410 million for the year ended December 31, 2013 compared to $392 million for the prior year primarily due to an $18 million unfavorable impact from unlocking for the year ended December 31, 2013 compared to a $41 million unfavorable impact in the prior year.
The primary driver of the unlocking impact to other revenues in both periods was lower projected gains on reinsurance contracts resulting from favorable mortality experience.


| Increase (Decrease) | Stock-based compensation expense* | Income before income taxes | Income tax (benefit) | Net income | Cash flow from operations | Cash flow from financing activities | Basic earnings per share | Diluted earnings per share | * No stock option expense was capitalized. |


| Year Ended December 31, | (in millions) | Net periodic pension (income) cost | Net actuarial (gain) loss | Amortization of prior service credit | Amortization of net actuarial loss | Settlement | Divestiture | Total recognized in other comprehensive income | Total recognized in net periodic pension cost and other comprehensive income |


Financial Strength Ratings.
The following table shows the current financial strength ratings of the Companys operating subsidiaries as reported by A. M.  Best, Standard & Poors and Moodys.
These ratings are based upon factors of concern to policyholders and should not be considered an indication of the degree or lack of risk involved in a direct or indirect equity investment in an insurance or reinsurance company.
All of the below-mentioned ratings are continually monitored and revised, if necessary, by each of the rating agencies.
The ratings presented in the following table were in effect as of February 10, 2017.
The Company believes that its ratings are important as they provide the Companys customers and its investors with an independent assessment of the Companys financial strength using a rating scale that provides for relative comparisons.
Strong financial ratings are particularly important for reinsurance companies.
Ceding companies must rely on their reinsurers to pay covered losses well into the future.
As a result, a highly rated reinsurer is generally preferred.


For further discussion of the company’s gas operating revenues and its gas results, see “Results of Operations” in Item 7.
For additional segment information, see Note N to the financial statements in Item 8.
Gas Peak Demand The gas peak demand for firm service customers in O&R’s service area occurs during the winter heating season.
The daily peak day demand during the winter 2009/2010 (through January 31, 2010) occurred on January 3, 2010 when the demand reached 169 mdths.
The 2009/2010 winter demand included an estimated 81 mdths for O&R’s full-service customers and 88 mdths for customers participating in its gas retail access program.
“Design weather” for the gas system is a standard t which the actual peak demand is adjusted for evaluation and planning purposes.
The company estimates that under design weather conditions the 2010/2011 service area peak demand will be 216 mdths, including an estimated 101 mdths for its full- service customers and 115 mdths for its retail access customers.
The company forecasts average annual growth of the peak gas demand over the next five years at design conditions to be approximately 0.6 percent in the company’s service area.
The forecasted peak demand at design conditions does not include gas used by interruptible gas customers or in generating stations.
The company continues to monitor the potential impact on customer demand from the continuing difficult economic conditions.


| December 31, 2011 December 31, 2010 | Amortized  Cost | AAA | AA | A | BBB | BB & below | Total |


| (Dollars in millions) Fiscal2013 Fiscal2012 Fiscal2011 2013-2012% Change 2012-2011% Change | Product revenue | Service and other revenue | Total segment revenue | % of total revenue | Segment operating income | % of related revenue |


| For the Years Ended December 31, | 2007 | Variable portion of variable annuity | Fixed portion of variable annuity | Total variable annuity | Fixed annuity | Alliance Mutual Fund | Total annuity and Alliance | COLI and BOLI | Total deposits |


Plan Assets.
Our pension plan assets are held in trust and a fiduciary committee sets the investment policies and strategies.
Longterm strategic investment objectives include achieving reasonable returns while prudently balancing risk and return, and controlling costs.
We target allocating approximately 75% of plan assets to equity and equity-related instruments and approximately 25% to fixed income securities.
Equity securities are currently composed of mutual funds that include highly diversified investments in large-, mid- and small-cap companies located in the United States and internationally.
The fixed income securities are composed of mutual funds that include investments in debt securities, mortgage-backed securities, corporate bonds and other debt obligations primarily in the United States.
We do not expect any plan assets to be returned to us during fiscal 2017.
The fair values of the plans assets are provided by the plans trustee and the investment managers.
Within the fair value hierarchy (see Note 6), the mutual funds are classified as Level 1 as quoted active market prices for identical assets are used to measure fair value.
The collective funds are public investment vehicles valued using a net asset value (NAV).
The collective funds may be liquidated with minimal restrictions and are classified as Level 2.


| (In millions) Level 1 Level 2 Level 3 Total | Short-term investment funds | Government and agency securities | Equity securities | Debt instruments | Commingled funds | Insurance contracts | Limited partnerships and hedge fund investments | Total |


| Shares Weighted Average Grant-date Fair Value | Non-vested shares at January 1 | Granted | Deferred | Vested | Forfeited | Non-vested shares at December 31 |


CONSOLIDATED INCOME STATEMENT REVIEW Our Consolidated Income Statement is presented in Item 8 of this Report.
Net income for 2017 was $5.4 billion, or $10.36 per diluted common share, an increase of 35% compared with $4.0 billion, or $7.30 per diluted common share, for 2016.
Higher net income was driven by an 8% increase in total revenue and a tax benefit from the new federal tax legislation, partially offset by a 10% increase in noninterest expense.
Revenue growth resulted from a 9% increase in net interest income and a 7% increase in noninterest income.
Net Interest Income Table 1: Summarized Average Balances and Net Interest Income (a)
(a) Interest income calculated as taxable-equivalent interest income.
To provide more meaningful comparisons of interest income and yields for all interest-earning assets, as well as net interest margins, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments.
This adjustment is not permitted under GAAP on the Consolidated Income Statement.
For more information, see Reconciliation of Taxable-Equivalent Net Interest Income in the Statistical Information (Unaudited) section in Item 8 of this Report.
Changes in net interest income and margin result from the interaction of the volume and composition of interest-earning assets and related yields, interest-bearing liabilities and related rates paid, and noninterest-bearing sources of funding.
See the Statistical Information (Unaudited)  Average Consolidated Balance Sheet And Net Interest Analysis and Analysis Of Year-To-Year Changes In Net Interest Income in Item 8 of this Report.
Net interest income increased $717 million, or 9%, in 2017 compared with 2016 due to increases in loan and securities balances and yields, partially offset by an increase in borrowing and deposit costs.
Net interest margin increased largely reflecting the benefit to loans and securities yields from higher interest rates in 2017.
Average investment securities increased $3.0 billion, or 4%, reflecting net purchases of U. S.  Treasury and government agency securities of $2.9 billion and agency residential mortgage-backed securities of $2.8 billion, partially offset by declines in average commercial mortgage-backed securities of $1.6 billion and non-agency residential mortgage-backed securities of $.8 billion.
Total investment securities were 23% of average interest-earning assets in both 2017 and 2016.
Average loans grew by $8.5 billion, or 4%, reflecting an increase in average commercial lending of $8.4 billion driven by broad-based growth in our Corporate Banking, Real Estate, Equipment Finance and Business Credit businesses in our Commercial & Institutional Banking segment.
Growth in Equipment Finance included the impact of the acquisition of a commercial and vendor finance business with $1.0 billion of loans and leases in the second quarter of 2017.
Average consumer lending increased $.1 billion in the comparison, as growth in average residential real estate, automobile and credit card loans was substantially offset by declines in average home equity and education loans.
These declines reflected run-off in the non-strategic consumer loan portfolios of brokered home equity and government guaranteed education loans.
Average loans represented 67% of average interestearning assets in 2017 compared to 66% in 2016.
Average total deposits increased $7.2 billion, or 3%, primarily due to growth in average interest-bearing deposits of $6.7 billion, or 4%, driven by higher average savings deposits of $13.1 billion.
This increase reflected a shift, in part, to relationship-based savings products from money market deposits, which decreased $9.2 billion.
Additionally, average interest-bearing demand deposits grew $4.3 billion, mainly


| (dollar amounts in millions) Percentage Change | for the fiscal years ended September 30, | Asset-based expenses | Sales-based expenses | Amortization of deferred sales commissions | Sales, Distribution and Marketing |


| Year ended December 31, | (Dollars in thousands) | Allowance for loan losses balance, beginning of year | Charge-offs: | Commercial loans: | Software | Hardware | Venture capital/private equity | Life science | Premium wine | Other | Total commercial loans | Consumer loans | Total charge-offs | Recoveries: | Commercial loans: | Software | Hardware | Venture capital/private equity | Life science | Premium wine | Other | Total commercial loans | Consumer loans | Total recoveries | Provision for loan losses | Allowance for loan losses balance, end of year | December 31, | 2011 | (Dollars in thousands) | Commercial loans: | Software | Hardware | Venture capital/private equity | Life science | Premium wine | Other | Total commercial loans | Consumer loans | Total |


| 2013 2012 | Low | Discount rate | Exit capitalization rate | Lease-up period (months) | Net rental rate per square foot - Industrial | Net rental rate per square foot - Medical Office |


| (in millions) 2018 2019 2020 2021 2022 Thereafter-1 Total | Contractual obligations and commitments-1: | Long-term borrowings-2: | Principal | Interest | Operating leases | Purchase obligations | Investment commitments | Total contractual obligations and commitments | Contingent obligations: | Contingent payments related to business acquisitions-3 | Total contractual obligations, commitments andcontingent obligations-4 |


| By remaining contractual maturity at December 31, 2004 Under 1 year After 5 years 2004  total 2003 total(g) | (in millions) | Parent company | Senior debt:(a) | Variable rate | Interest rates(b) | Subordinated debt: | Variable rate | Interest rates(b) | Subtotal | Subsidiaries | Senior debt:(a) | Variable rate | Interest rates(b) | Subordinated debt: | Variable rate | Interest rates(b) | Subtotal | Total long-term debt | FIN 46R long-term beneficial interests:(c) | Fixed rate | Variable rate | Interest rates(b) | Total FIN 46R long-term beneficial interests |


| 2013 2012 2011 | Cash, cash equivalents and marketable securities | Property, plant and equipment, net | Long-term debt | Working capital | Cash generated by operating activities | Cash used in investing activities | Cash generated/(used in) by financing activities |


| As of December 31, | 2007 | (in millions) | Balance Sheet Data: | Total investments excluding policy loans | Separate account assets | Total assets | Future policy benefits and policyholders’ account balances | Separate account liabilities | Short-term debt | Long-term debt | Total liabilities | Stockholders’ equity-2 |


| Qualified Defined Benefit Pension Plans(a) Retiree Medical and Life Insurance Plans | 2014 | Service cost | Interest cost | Expected return on plan assets | Recognized net actuarial losses | Amortization of net prior service (credit) cost | Total net periodic benefit cost |


| Dollars in millions December 31 2017 December 31 2016 | Nonperforming loans | Total commercial lending | Total consumer lending (a) | Total nonperforming loans | OREO, foreclosed and other assets | Total nonperforming assets | Nonperforming loans to total loans | Nonperforming assets to total loans,OREO, foreclosed and other assets | Nonperforming assets to total assets | Interest on nonperforming loans (b) | Computed on original terms | Recognized prior to nonperformingstatus | Target Allocation Range | PNC Pension Plan | Asset Category | Domestic Equity | International Equity | Private Equity | Total Equity | Domestic Fixed Income | High Yield Fixed Income | Total Fixed Income | Real estate | Other | Total |


| December 31, | (Dollars in thousands) | Commitments available for funding: -1 | Fixed interest rate commitments | Variable interest rate commitments | Total commitments available for funding | Commitments unavailable for funding -2 | Maximum lending limits for accounts receivable factoring arrangements -3 | Reserve for unfunded credit commitments |


| 2015 2016 and 2017 2018 and 2019 After 2019 Total | Long Term Debt -1 | Interest Payments -2 | Consolidated Capital Expenditure Commitments -3 | Lease Commitments -4 |


| 2011 2010 | Sundry assets | Notes receivable (see Note H) | Deferred taxes (see Note N) | Pension plan assets (see Note M) | Assets held for sale | Other | $67.3 | Accrued expenses | Workers’ compensation, medical, auto and product liability | Wages and commissions payable | Sales promotions | General taxes, excluding income taxes | Accrued interest | Other | $209.6 | Other current liabilities | Dividends payable | Outstanding checks in excess of book balances | Derivative financial instruments (see Note S) | Other | $117.3 | Other long-term liabilities | Liability for pension benefits (see Note M) | Reserves for tax contingencies (see Note N) | Deferred compensation | Other | $130.3 |


| Fair Value Carrying Value | At December 31, | Current portion of long-term debt | Long-term debt | Total |


| Con Edison Con Edison of New York | (Millions of Dollars) | Deferred tax liabilities: | Depreciation | Regulatory liability – future income tax | Unrecognized pension and other postretirement costs – SFAS No. 158 | State income tax | Capitalized overheads | Other | Total deferred tax liabilities | Deferred tax assets: | Unrecognized pension and other postretirement costs – SFAS No. 158 | Regulatory asset – future income tax | State income tax | Other | Total deferred tax assets | Net Liabilities | Investment Tax Credits | Deferred Income Taxes and Investment Tax Credits | Deferred Income Taxes – Recoverable Energy Costs | Total Deferred Income Taxes and Investment Tax Credits |


| December 31, 2011 | (Dollars in millions) | Notional amount of credit extension commitments | Loan commitments | Home equity lines of credit | Standby letters of credit and financial guarantees-1 | Letters of credit | Legally binding commitments | Credit card lines-2 | Total credit extension commitments | December 31, 2010 | Notional amount of credit extension commitments | Loan commitments | Home equity lines of credit | Standby letters of credit and financial guarantees-1 | Letters of credit-3 | Legally binding commitments | Credit card lines-2 | Total credit extension commitments |


Free Cash Flow Free cash flow represents cash provided by (used in) operating activities less capital expenditures.
We believe free cash flow is a useful measure for investors to consider.
Free cash flow is not a measure of financial performance under GAAP, and may not be defined and calculated by other companies in the same manner.
This measure should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating results presented in accordance with GAAP as indicators of performance.
The table below reconciles net cash provided by (used in) operating activities to free cash flow:


Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations  CNA Financial  (Continued) reinsurance treaties of $26.0 million in 2004 as compared with 2003.
The 2003 ceded premiums were principally driven by the unfavorable net prior year reserve development in 2003.
Specialty Lines averaged rate increases of 9.0% and 29.0% in 2004 and 2003 for the contracts that renewed during those periods.
Retention rates of 83.0% and 81.0% were achieved for those contracts that were up for renewal.
Net income increased $308.8 million in 2004 as compared with 2003.
This increase was due primarily to increased net operating income, partially offset by a decrease in realized investment gains.
See the Investments section of this MD&A for further discussion on net realized investment gains.
Net operating results improved $325.9 million in 2004 as compared with 2003.
This improvement, after tax and minority interest, was due primarily to decreased unfavorable net prior year development of $156.1 million, a decrease in the bad debt provision for reinsurance receivables of $71.2 million, a decrease in certain insurance related assessments of $7.3 million, and increased net investment income.
These improvements were partially offset by increased catastrophe losses in 2004.
The impact of catastrophes was $10.0 million and $2.7 million, after tax and minority interest, in 2004 and 2003, as discussed below.
See the Investments section of this MD&A for further discussion on net investment income.
The combined ratio decreased 27.8 points in 2004 as compared with 2003.
The loss ratio decreased 26.3 points due principally to decreased unfavorable net prior year development of $264.0 million, a $120.0 million decrease in bad debt reserves for uncollectible reinsurance and an improvement in the current net accident year loss ratio.
These favorable impacts to the loss ratio were partially offset by increased catastrophe losses.
Catastrophe losses of $15.0 million and $4.0 million were recorded in 2004 and 2003.
The increased catastrophe losses in 2004 were due to $12.0 million of losses resulting from Hurricanes Charley, Frances, Ivan and Jeanne.
Unfavorable net prior year development was $30.0 million, including $58.0 million of unfavorable claim and allocated claim adjustment expense and $28.0 million of favorable premium development, in 2004.
Unfavorable net prior year development of $294.0 million, including $257.0 million of unfavorable claim and allocated claim adjustment expense development and $37.0 million of unfavorable premium development, was recorded for the same period in 2003.
Further information on Specialty Lines Net Prior Year Development for 2004 and 2003 is included in Note 9 of the Notes to Consolidated Financial Statements included under Item 8.
The expense ratio decreased 1.5 points primarily due to the increased earned premium base and a decrease of $12.0 million in certain insurance related assessments recorded in 2003.
In addition, the expense ratio was favorably impacted by decreased underwriting expenses due to CNAs expense initiatives.


MORGAN STANLEY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) Senior debt securities often are denominated in various non-U.
S.  dollar currencies and may be structured to provide a return that is equity-linked, credit-linked, commodity-linked or linked to some other index (e. g. , the consumer price index).
Senior debt also may be structured to be callable by the Company or extendible at the option of holders of the senior debt securities.
Debt containing provisions that effectively allow the holders to put or extend the notes aggregated $2,902 million at December 31, 2015 and $2,175 million at December 31, 2014.
In addition, in certain circumstances, certain purchasers may be entitled to cause the repurchase of the notes.
The aggregated value of notes subject to these arrangements was $650 million at December 31, 2015 and $551 million at December 31, 2014.
Subordinated debt and junior subordinated debentures generally are issued to meet the capital requirements of the Company or its regulated subsidiaries and primarily are U. S.  dollar denominated.
During 2015, Morgan Stanley Capital Trusts VI and VII redeemed all of their issued and outstanding 6.60% Capital Securities, respectively, and the Company concurrently redeemed the related underlying junior subordinated debentures.
Senior DebtStructured Borrowings.
The Companys index-linked, equity-linked or credit-linked borrowings include various structured instruments whose payments and redemption values are linked to the performance of a specific index (e. g. , Standard & Poors 500), a basket of stocks, a specific equity security, a credit exposure or basket of credit exposures.
To minimize the exposure resulting from movements in the underlying index, equity, credit or other position, the Company has entered into various swap contracts and purchased options that effectively convert the borrowing costs into floating rates based upon LIBOR.
The Company generally carries the entire structured borrowings at fair value.
The swaps and purchased options used to economically hedge the embedded features are derivatives and also are carried at fair value.
Changes in fair value related to the notes and economic hedges are reported in Trading revenues.
See Note 3 for further information on structured borrowings.
Subordinated Debt and Junior Subordinated Debentures.
Included in the long-term borrowings are subordinated notes of $10,404 million having a contractual weighted average coupon of 4.45% at December 31, 2015 and $8,339 million having a contractual weighted average coupon of 4.57% at December 31, 2014.
Junior subordinated debentures outstanding by the Company were $2,870 million at December 31, 2015 having a contractual weighted average coupon of 6.22% at December 31, 2015 and $4,868 million at December 31, 2014 having a contractual weighted average coupon of 6.37% at December 31, 2014.
Maturities of the subordinated and junior subordinated notes range from 2022 to 2067, while maturities of certain junior subordinated debentures can be extended to 2052 at the Companys option.
Asset and Liability Management.
In general, securities inventories that are not financed by secured funding sources and the majority of the Companys assets are financed with a combination of deposits, short-term funding, floating rate long-term debt or fixed rate long-term debt swapped to a floating rate.
Fixed assets are generally financed with fixed rate long-term debt.
The Company uses interest rate swaps to more closely match these borrowings to the duration, holding period and interest rate characteristics of the assets being funded and to manage interest rate risk.
These swaps effectively convert certain of the Companys fixed rate borrowings into floating rate obligations.
In addition, for non-U.
S.  dollar currency borrowings that are not used to fund assets in the same currency, the Company has entered into currency swaps that effectively convert the borrowings into U. S.  dollar obligations.
The Companys use of swaps for asset and liability management affected its effective average borrowing rate.


| Years ended December 31, 2008 2007 2006 | Average Balance | (Dollars in millions; fully taxable-equivalent basis) | Federal funds sold and securities purchased under resale agreements | Investment securities | Investment securities purchased under AMLF-1 | Loans and leases-2 | Other | Total interest-earning assets | Deposits | Short-term borrowings under AMLF-1 | Other short-term borrowings | Long-term debt | Total interest-bearing liabilities | Interest-rate spread | Net interest revenue - fully taxable-equivalent basis-3 | Net interest margin - fully taxable-equivalent basis | Net interest revenue—GAAP basis |


| 2010 $84 | 2011 | 2012 | 2013 | 2014 | Thereafter |


15.
Leases In January 1996, the Company entered into a lease agreement with an unrelated third party for a new corporate office facility, which the Company occupied in February 1997.
In May 2004, the Company entered into the first amendment to this lease agreement, effective January 1, 2004.
The lease was extended from an original period of 10 years, with an option for five additional years, to a period of 18 years from the inception date, with an option for five additional years.
The Company incurred lease rental expense related to this facility of $1.3 million in 2008, 2007 and 2006.
The future minimum lease payments are $1.4 million per annum from January 1, 2009 to December 31, 2014.
The future minimum lease payments from January 1, 2015 through December 31, 2019 will be determined based on prevailing market rental rates at the time of the extension, if elected.
The amended lease also provided for the lessor to reimburse the Company for up to $550,000 in building refurbishments completed through March 31, 2006.
These amounts have been recorded as a reduction of lease expense over the remaining term of the lease.
The Company has also entered into various noncancellable operating leases for equipment and office space.
Office space lease expense totaled $9.3 million, $6.3 million and $4.7 million for the years ended December 31, 2008, 2007 and 2006, respectively.
Future minimum lease payments under noncancellable operating leases for office space in effect at December 31, 2008 are $8.8 million in 2009, $6.6 million in 2010, $3.0 million in 2011, $1.8 million in 2012 and $1.1 million in 2013.16.
Royalty Agreements The Company has entered into various renewable, nonexclusive license agreements under which the Company has been granted access to the licensors technology and the right to sell the technology in the Companys product line.
Royalties are payable to developers of the software at various rates and amounts, which generally are based upon unit sales or revenue.
Royalty fees are reported in cost of goods sold and were $6.3 million, $5.2 million and $3.9 million for the years ended December 31, 2008, 2007 and 2006, respectively.17.
Geographic Information Revenue to external customers is attributed to individual countries based upon the location of the customer.
Revenue by geographic area is as follows:


| Current assets $1,922 | Long-term assets | Identifiable intangible assets | Total liabilities assumed | Total identifiable net assets | Goodwill | Net assets acquired |


| Year ended December 31 – dollars in millions 2017 2016 2015 2014 2013 | Allowance for loan and lease losses – January 1 | Gross charge-offs | Commercial | Commercial real estate | Equipment lease financing | Home equity | Residential real estate | Credit card | Other consumer | Total charge-offs | Recoveries | Commercial | Commercial real estate | Equipment lease financing | Home equity | Residential real estate | Credit card | Other consumer | Total recoveries | Net charge-offs | Provision for credit losses | Net decrease / (increase) in allowance for unfunded loan commitments and letters of credit | Other (a) | Allowance for loan and lease losses – December 31 | Allowance as a percentage of December 31: | Loans (a) | Nonperforming loans | As a percentage of average loans: | Net charge-offs | Provision for credit losses | Allowance for loan and lease losses (a) | Allowance as a multiple of net charge-offs | 2017 | December 31 Dollars in millions | Commercial | Commercial real estate | Equipment lease financing | Home equity | Residential real estate | Credit card | Other consumer | Total |


| December 31, 2017 | Beginning Balance | Gains on assets sold | Change in fair value of assets | Net purchases and sales | Translation gain | Ending Balance |


Notes to Consolidated Financial Statements – (continued) (Amounts in Millions, Except Per Share Amounts) Guarantees We have guaranteed certain obligations of our subsidiaries relating principally to operating leases and credit facilities of certain subsidiaries.
The amount of parent company guarantees on lease obligations was $857.3 and $619.4 as of December 31, 2016 and 2015, respectively, and the amount of parent company guarantees primarily relating to credit facilities was $395.6 and $336.5 as of December 31, 2016 and 2015, respectively.
In the event of non-payment by the applicable subsidiary of the obligations covered by a guarantee, we would be obligated to pay the amounts covered by that guarantee.
As of December 31, 2016, there were no material assets pledged as security for such parent company guarantees.
Contingent Acquisition Obligations The following table details the estimated future contingent acquisition obligations payable in cash as of December 31, 2016.


On April 3, 2014, consistent with our 2014 capital plan, our Board of Directors approved an increase to PNCs quarterly common stock dividend from 44 cents per common share to 48 cents per common share beginning with the May 5, 2014 dividend payment.
In connection with the 2015 CCAR, PNC submitted its 2015 capital plan, as approved by its Board of Directors, to the Federal Reserve in January 2015.
PNC expects to receive the Federal Reserves response (either a non-objection or objection) to the capital plan submitted as part of the 2015 CCAR in March 2015.
See the Supervision and Regulation section in Item 1 of this Report for additional information regarding the Federal Reserves CCAR process and the factors the Federal Reserve takes into consideration in evaluating capital plans, qualitative and quantitative liquidity risk management standards proposed by the U. S.  banking agencies, and final rules issued by the Federal Reserve that make certain modifications to the Federal Reserves capital planning and stress testing rules.
See Table 42 for information on affiliate purchases of notes issued by PNC Bank during 2014.
On February 6, 2015, PNC used $600 million of parent company/non-bank subsidiary cash to purchase floating rate senior notes that were issued by PNC Bank to an affiliate on that same date.
Parent Company Liquidity  Sources The principal source of parent company liquidity is the dividends it receives from its subsidiary bank, which may be impacted by the following: ?
Bank-level capital needs, ?
Laws and regulations, ?
Corporate policies, ?
Contractual restrictions, and ?
Other factors.
There are statutory and regulatory limitations on the ability of national banks to pay dividends or make other capital distributions or to extend credit to the parent company or its non-bank subsidiaries.
The amount available for dividend payments by PNC Bank to the parent company without prior regulatory approval was approximately $1.5 billion at December 31, 2014.
See Note 20 Regulatory Matters in the Notes To Consolidated Financial Statements in Item 8 of this Report for a further discussion of these limitations.
We provide additional information on certain contractual restrictions in Note 12 Capital Securities of a Subsidiary Trust and Perpetual Trust Securities in the Notes To Consolidated Financial Statements in Item 8 of this Report.
In addition to dividends from PNC Bank, other sources of parent company liquidity include cash and investments, as well as dividends and loan repayments from other subsidiaries and dividends or distributions from equity investments.
We can also generate liquidity for the parent company and PNCs non-bank subsidiaries through the issuance of debt and equity securities, including certain capital instruments, in public or private markets and commercial paper.
We have an effective shelf registration statement pursuant to which we can issue additional debt, equity and other capital instruments.
During 2014, we issued the following parent company debt under our shelf registration statement: ?
$750 million of subordinated notes with a maturity date of April 29, 2024.
Interest is payable semiannually, at a fixed rate of 3.90%, on April 29 and October 29 of each year, beginning on October 29, 2014.
Total parent company senior and subordinated debt and hybrid capital instruments decreased to $10.1 billion at December 31, 2014 from $10.7 billion at December 31, 2013 due to the following activity in the period.
Table 45: Parent Company Senior and Subordinated Debt and Hybrid Capital Instruments


| Balance at January 1, 2012 $21,579 | Increases in current period tax positions | Decreases in current period tax positions | Balance at December 31, 2012 | Increases in current period tax positions | Decreases in current period tax positions | Balance at December 31, 2013 | Increases in current period tax positions | Decreases in current period tax positions | Balance at December 31, 2014 |


| December 31, (in millions) 2008 2007 | Investment Bank | Retail Financial Services | Card Services | Commercial Banking | Treasury & Securities Services | Asset Management | Corporate/Private Equity | Total goodwill |


| Year Ended December 31, | 2016 | Revenue: | Fee revenue | Pass through costs also recognized as revenue | Total revenue | Costs and expenses: | Cost of services | Operating, administrative and other | Depreciation and amortization | Total costs and expenses | Gain on disposition of real estate | Operating income | Equity income from unconsolidated subsidiaries | Other income (loss) | Interest income | Interest expense | Write-offof financing costs on extinguished debt | Income before provision for income taxes | Provision for income taxes | Net income | Less: Net income attributable tonon-controllinginterests | Net income attributable to CBRE Group, Inc. | EBITDA | Adjusted EBITDA |


| December 31 Year Ended December 31 | Outstandings | (Dollars in millions) | Commercial loans and leases | Commercial – domestic-5 | Commercial real estate-6 | Commercial lease financing | Commercial – foreign | 302,797 | Small business commercial – domestic-7 | Total measured at historical cost | Total measured at fair value-8 | Total commercial loans and leases |


Total income tax expense includes $252 million, $55 million and $2.4 billion of tax benefits recorded in 2017, 2016, and 2015, respectively, as a result of tax audit resolutions.
Tax effect of items recorded in stockholders equity The preceding table does not reflect the tax effect of certain items that are recorded each period directly in stockholders equity.
The tax effect of all items recorded directly to stockholders equity resulted in a decrease of $915 million in 2017, an increase of $925 million in 2016, and an increase of $1.5 billion in 2015.
Effective January 1, 2016, the Firm adopted new accounting guidance related to employee share-based payments.
As a result of the adoption of this new guidance, all excess tax benefits (including tax benefits from dividends or dividend equivalents) on share-based payment awards are recognized within income tax expense in the Consolidated statements of income.
In prior years these tax benefits were recorded as increases to additional paid-in capital.
Results from Non-U.
S.  earnings The following table presents the U. S.  and non-U.
S.  components of income before income tax expense for the years ended December 31, 2017, 2016 and 2015.


| Change | 2015 | (In millions, except percentages) | Taiwan |


| December 31 | (Dollars in millions) | Trading account assets | Corporate securities, trading loans and other | U.S. government and agency securities-1 | Equity securities | Mortgage trading loans and asset-backed securities | Foreign sovereign debt | Total | Trading account liabilities | U.S. government and agency securities-2 | Equity securities | Foreign sovereign debt | Corporate securities and other | Mortgage trading loans and asset-backed securities | Total |


| (Dollars in millions) 2011 2010 | Production loss: | Core production revenue | Representations and warranties provision | Total production loss | Servicing income: | Servicing fees | Impact of customer payments-1 | Fair value changes of MSRs, net of economic hedge results-2 | Other servicing-related revenue | Total net servicing income | TotalCRESmortgage banking income (loss) | Eliminations-3 | Total consolidated mortgage banking income (loss) |


Tables of Contents FMS segment operating income as a percentage of related revenue increased to 31% in fiscal 2011 from 25% in fiscal 2010.
Segment operating income increased in fiscal 2011 due to the increase in revenue described above, $13 million in lower staffing expenses, and cost of product revenue efficiencies, partially offset by about $11 million in higher expenses for advertising and other marketing programs.
Fiscal 2010 Compared with Fiscal 2009 FMS total net revenue increased $32 million or 6% in fiscal 2010 compared with fiscal 2009.
About half of this increase was due to Intuit Websites customer growth.
In our QuickBooks desktop business, higher average selling prices more than offset a 2% decline in total paid QuickBooks software units.
Average selling prices were higher in fiscal 2010 because we offered fewer promotional discounts compared with fiscal 2009.
QuickBooks Online and QuickBooks Enterprise Solutions customer growth also contributed to higher revenue in fiscal 2010.
FMS segment operating income as a percentage of related revenue increased to 25% in fiscal 2010 from 20% in fiscal 2009 due to the increase in revenue described above, partially offset by higher cost of revenue and customer service expenses associated with growth in Intuit Websites.
Fiscal 2010 segment operating income also benefited from a decrease of about $16 million in staffing expenses compared with fiscal 2009.


| Estimated useful life-in years December 31, | (in millions) | Property and equipment: | Land | Building | Building improvements | Leasehold improvements | Equipment and computer software | Other transportation equipment | Furniture and fixtures | Construction in progress | Total | Less: accumulated depreciation and amortization | Property and equipment, net |


Rental expense under operating leases was $114,529, $116,541 and $97,587 in 2014, 2013 and 2012, respectively.
The Company had approximately $37,381 and $47,713 in standby letters of credit for various insurance contracts and commitments to foreign vendors as of December 31, 2014 and 2013, respectively that expire within two years.
The Company is involved in litigation from time to time in the regular course of its business.
Except as noted below, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.
Beginning in August 2010, a series of civil lawsuits were initiated in several U. S.  federal courts alleging that certain manufacturers of polyurethane foam products and competitors of the CompanyÂ¡Â¯s carpet underlay division had engaged in price fixing in violation of U. S.  anti-trust laws.
The Company has been named as a defendant in a number of the individual cases (the first filed on August 26, 2010), as well as in two consolidated amended class action complaints the first filed on February 28, 2011, on behalf of a class of all direct purchasers of polyurethane foam products, and the second filed on March 21, 2011, on behalf of a class of indirect purchasers.
All pending cases in which the Company has been named as a defendant have been filed in or transferred to the U. S.  District Court for the Northern District of Ohio for consolidated pre-trial proceedings under the name In re: Polyurethane Foam Antitrust Litigation, Case No.1:10-MDL-02196.
In these actions, the plaintiffs, on behalf of themselves and/or a class of purchasers, seek damages allegedly suffered as a result of alleged overcharges in the price of polyurethane foam products from at least 1999 to the present.
The direct purchaser class currently claims damages from all of the defendants named in the lawsuit of up to approximately $867,400 which amount will be reduced by the value of claims made by plaintiffs that opt out of the class.
Any damages actually awarded at trial are subject to being tripled under US antitrust laws.
The amount of damages in the remaining cases varies or has not yet been specified by the plaintiffs.
Each plaintiff also seeks attorney fees, pre-judgment and post-judgment interest, court costs and injunctive relief against future violations.


| Aircraft manufacturing and completions $-220 | Pre-owned aircraft | Aircraft services | Other | Total decrease in operating earnings |


CORPORATE Corporate results consist primarily of compensation expense for stock options.
Corporate operating costs totaled $72 in 2014, $96 in 2013 and $69 in 2012.
We expect Corporate operating costs in 2015 of approximately $65 to $70.


| Location ofHeadquarters Ownership Partner(s) YearEntered | Equity Method Investments | Advanced Engineered Materials | National Methanol Company | KEPCO | Polyplastics | Fortron Industries LLC | Cost Method Investments | Consumer Specialties | Kunming Cellulose Fibers Co. Ltd. | Nantong Cellulose Fibers Co. Ltd. | Zhuhai Cellulose Fibers Co. Ltd. | Year Ended December 31, | 2011 | 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 |


| 2013 2012 2011 | Revenues | United States | United Kingdom | Canada | Germany | Mexico | All Other | Total Company | 2013 | Automotive Sector | Revenues | Income before income taxes | Financial Services Sector | Revenues | Income before income taxes | Total Company | Income before income taxes | Net income | Basic | Diluted |


| Year Ended December 31, | 2013 | (in thousands, except percentages and per share data) | Total revenue | Operating income | Operating profit margin | Net income | Earnings per share – diluted: | Diluted earnings per share | Weighted average shares – diluted |


Valuation of Business Combinations We allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the dates of acquisition, including identifiable intangible assets and in-process research and development which either arise from a contractual or legal right or are separable from goodwill.
We base the fair value of identifiable intangible assets acquired in a business combination, including in-process research and development, on detailed valuations that use information and assumptions provided by management, which consider managements best estimates of inputs and assumptions that a market participant would use.
We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill.
Transaction costs associated with these acquisitions are expensed as incurred through selling, general and administrative costs.
In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date.
We re-measure this liability each reporting period and record changes in the fair value through a separate line item within our consolidated statements of operations.
Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving regulatory, revenue or commercialization-based milestones.


| Fair Value of Asset Derivatives-1 Fair Value of (Liability) Derivatives(1) | December 31, 2009 | Derivatives designated as hedging instruments: | Foreign currency forward contracts | Interest rate swaps | Derivatives not designated as hedging instruments: | Foreign currency forward contracts | Total |


| Millions 2010 2009 2008 | Agricultural | Automotive | Chemicals | Energy | Industrial Products | Intermodal | Total freight revenues | Other revenues | Total operating revenues | Other Operating Leases | (Millions of Dollars) | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total minimum obligation | Interest component of obligation | Present value of minimum obligation | 2008 | (Millions of Dollars) | NSP-Minnesota | NSP-Wisconsin | PSCo | SPS | Total Xcel Energy |


| (In millions) 2009 2008 2007 | Capital | Compliance | Operating and maintenance | Remediation(b) | Total |


Liquidity and Capital Resources At September 26, 2009, we had $492.2 million of working capital, and our cash and cash equivalents totaled $293.2 million.
Our cash and cash equivalents balance increased by $197.5 million during fiscal 2009, primarily from cash generated from our operations.
This cash source was partially offset by our financing activities relating to our repayment of amounts outstanding under our credit agreement and certain other notes payable and to a lesser extent cash used in our investing activities primarily for purchases of property and equipment and placement of equipment under customer usage agreements.
Our operating activities generated $546.4 million of cash, which included a net loss of $2.18 billion reduced primarily by non-cash charges for goodwill and intangible asset impairments of $2.34 billion, depreciation and amortization expense of $273.9 million, stock-based compensation expense of $32.9 million and non-cash interest expense of $17.7 million from the amortization of debt issuance costs.
Cash provided by operations due to changes in our operating assets and liabilities included a decrease in accounts receivable of $57.6 million, an increase in deferred revenue of $19.6 million and a decrease in prepaid income taxes of $17.9 million.
The decrease in accounts receivable was primarily due to the decline in sales volume in the current quarter as compared to the fourth quarter of fiscal 2008 as well as improved collections.
The increase in deferred revenue was primarily due to an increase in the number of service contracts as our installed base of our Breast Health products continues to grow.
The decrease in prepaid income taxes was due to the utilization of amounts to offset current taxable income.
Cash provided by operations was offset by an increase in inventories of $15.1 million and a decrease in accounts payable and accrued expenses and other liabilities of $12.9 million and $10.6 million, respectively.
The increase in inventories was primarily related to the increase in components on hand as a result


Expense Attribution Except as discussed above, we recognize compensation expense for our stock using a straight-line method over the substantive vesting period.
Most of our stock awards provide for immediate vesting upon death or disability of the participant.
In addition, our stock grants to employees provide for accelerated vesting of our stock-based awards, other than market-based awards, upon retirement.
In accordance with the terms of our stock grants, for employees who will become retirement eligible prior to the vest date we expense stock-based awards, other than market-based awards, over the greater of one year or the period between grant date and retirement-eligibility.
The market-based awards discussed above do not contain provisions that would accelerate the full vesting of the awards upon retirement-eligibility.
We recognize stock-based compensation expense for the value of the portion of awards that are ultimately expected to vest.
ASC Topic 718, Compensation – Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from


| (millions) 2013 2012 | Foreign currency exchange contracts | Interest rate contracts | Commodity contracts | Total |


| Con Edison CECONY | Units | TSR Portion(b) | Non-vested at 12/31/13 | Granted | Vested | Forfeited | Non-vested at 12/31/14 |


| December 31 | 2008 | (In thousands) | Commitments to extend credit | Home equity lines of credit | Commercial real estate loans to be sold | Other commercial real estate and construction | Residential real estate loans to be sold | Other residential real estate | Commercial and other | Standby letters of credit | Commercial letters of credit | Financial guarantees and indemnification contracts | Commitments to sell real estate loans |


| Revenues, net of interest expense-1 Provision (benefit) for income taxes Income (loss) from continuing operations(1)(2)(3) Identifiable assets at year end | In millions of dollars, except | identifiable assets in billions | Regional Consumer Banking | Institutional Clients Group | Subtotal Citicorp | Citi Holdings | Corporate/Other | Total |


| 2008 2007 2006 | Ameren | UE | CIPS | CILCORP | CILCO | IP |


| (In millions) Commingled Funds Insurance Contracts Limited Partnerships and Hedge Fund Investments Total | Balance as of June 30, 2014 | Actual return on plan assets: | Relating to assets still held at the reporting date | Relating to assets sold during the year | Transfers in (out) | Purchases, sales, issuances and settlements, net | Foreign exchange impact | Balance as of June 30, 2015 |


| Premiums Payable Premiums Receivable | (in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | 2020-2027 | Total |


(b) Postretirement Plans: In addition to AlG's defined benefitpension plans，AlG and its subsidiaries provide a postretirementbenefit program for medical care and life insurance in the U. s. and in certain non-U.
s.  countries.
Eligibility in the various plans isgenerally based upon completion of a specified period of eligibleservice and attaining a specified age.
Overseas,benefits vary bygeographic location.
AIG's u. s.  postretirement medical and life insurance benefitsare based upon the employee electing immediate retirement andhaving a minimum of ten years of service.
Retirees who reached


| Fair Value at   December 31,   2008 Principal Amount   Due Upon Maturity Difference | (In millions) | Assets: | Mortgage and other loans receivable | Liabilities: | Long-term debt |


| U.S. Qualified Pension International Pension (weighted average) U.S. Postretirement Medical | December 31, 2014 Liability and 2015 Net Periodic Benefit Cost: | Single discount rate | December 31, 2015 Liability: | Benefit obligation | 2016 Net Periodic Benefit Cost Components: | Service cost | Interest cost |


(1) Includes exposure to Alt-a mortgage loans with an amortized cost of $78.7 million, gross unrealized gains of $0.4 million, gross unrealized losses of $4.1 million and a carrying amount of $75.0 million.
All of these securities are rated AAA and 62% are 2005 and prior vintages.
(2) This exposure is all related to sub-prime mortgage loans.
(3) Includes exposure to sub-prime mortgage loans with an amortized cost of $79.1 million, gross unrealized losses of $28.8 million and a carrying amount of $50.3 million.
Of the $8,215.6 million in gross unrealized losses as of December 31, 2008, there were $46.3 million in losses attributed to securities scheduled to mature in one year or less, $1,191.7 million attributed to securities scheduled to mature between one to five years, $1,826.9 million attributed to securities scheduled to mature between five to ten years, $2,139.2 million attributed to securities scheduled to mature after ten years and $3,011.5 million related to mortgage-backed and other ABS that are not classified by maturity year.
The credit disruption in the market that began in the last half of 2007 from concerns in the sub-prime markets, and continued into 2008 with concerns in the leveraged finance markets has led to reduced liquidity and wider credit spreads.
These credit concerns led to a widespread forced selling into a very thinly traded market which further strained market liquidity.
This market disruption lowered valuations and, as a result, we have seen an increase in unrealized losses in our securities portfolio.
The losses were more pronounced in the Finance sectors and in structured products such as collateralized debt obligations, ABS and CMBS.
The decline in value in large part reflects the illiquid markets.
Future changes in the fair value of these securities will be dependent on the return of market liquidity and changes in general market conditions, including interest rates and credit spread movements.
Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms, the expectation that they will continue to do so given the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence and management’s intent and ability to hold these securities to recovery, we concluded that the prices of the securities in our securities portfolio were temporarily depressed.


| Outstanding Principal Balance Loan Loss Allowance % 30-Days Past Due Average FICO | As of April 30, 2008: | Purchased from SCC | All other | $1,004,640 | As of April 30, 2007: | Purchased from SCC | All other | $1,350,892 |


The Company is exposed to credit risk in the event a counterparty does not fulfill its obligation to complete a transaction or if there is a miscommunication or other error in executing a matched principal transaction.
Pursuant to the terms of the securities clearing agreements, the clearing broker has the right to charge the Company for losses resulting from a counterparty’s failure to fulfill its contractual obligations.
The losses are not capped at a maximum amount and apply to all trades executed through the clearing broker.
At December 31, 2014 and 2013, the Company had not recorded any liabilities with regard to this right.
In the normal course of business, the Company enters into contracts that contain a variety of representations, warranties and general indemnifications.
The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.
However, based on experience, the Company expects the risk of loss to be remote.14.


| Year Ended December 31, 2017 2016 2015 | Europe, Middle East & Africa | Latin America | North America | Asia Pacific | Bottling Investments | Corporate | Total |


| 2018 2017 | 6.25% Senior Notes due 2019 | 4.45% Senior Notes due 2020 | 3.625% Senior Notes due 2022 | 3.65% Senior Notes due 2024 | 3.60% Senior Notes due 2026 | 4,900.0 | Unamortized premium (discount), net | Unamortized debt issuance costs | Unamortized deferred gain from settlement of interest rate swaps | Fair value adjustment attributed to outstanding interest rate swaps | 4,883.7 | Current portion | Long-term debt | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | $4,900.0 |


available, we do not expect any transactions to have a significant impact on our reported income tax expense.
In connection with the completion of the reorganization, we will reevaluate the ability to realize our deferred tax assets related to U. S.  operations under the new Aon UK corporate structure and we may recognize a non-cash, deferred tax expense upon the conclusion of this evaluation.
Based on information currently available, we do not expect the additional deferred tax expense, if any, to be significant.
The reorganization will result in additional ongoing costs to us.
The completion of the reorganization will result in an increase in some of our ongoing expenses and require us to incur some new expenses.
Some costs, including those related to employees in our U. K.  offices and holding board meetings in the U. K. , are expected to be higher than would be the case if our principal executive offices were not relocated to the U. K. .  We also expect to incur new expenses, including professional fees and SDRT in connection with settlement of equity-based awards under our stock or share incentive plans, to comply with U. K.  corporate and tax laws.
Item 1B.
Unresolved Staff Comments.
None.
Item 2.
Properties.
We have offices in various locations throughout the world.
Substantially all of our offices are located in leased premises.
We maintain our corporate headquarters at 200 E.  Randolph Street in Chicago, Illinois, where we occupy approximately 355,000 square feet of space under an operating lease agreement that expires in 2013.
There are two five-year renewal options at current market rates.
We own one building at Pallbergweg 2-4, Amsterdam, the Netherlands (150,000 square feet).
The following are additional significant leased properties, along with the occupied square footage and expiration.


| Delivery in Calendar Years Ending | Aircraft on Firm Order-3 | B-737-700 | B-737-800 | B-777-200LR | A319-100 | A320-200 | CRJ-900 | Total |


| Contingent   Consideration | Balance as of October 30, 2010 | Contingent consideration liability recorded | Fair value adjustment | Balance as of October 29, 2011 | December 31, 2010 | Carrying amount | ($ in millions) | Fixed maturities: | Public | Private | Equity securities | Mortgage loans: | Commercial | Residential | Real estate held for sale | Real estate held for investment | Policy loans | Other investments | Total invested assets | Cash and cash equivalents | Total invested assets and cash | December 31, 2010 | Carrying amount | ($ in millions) | U.S. government and agencies | States and political subdivisions | Non-U.S. governments | Corporate — public | Corporate — private | Residential pass-through securities | Commercial mortgage-backed securities | Residential collateralized mortgage obligations | Asset-backed securities | Total fixed maturities | December 31, 2010 | (in millions) | European Union | United Kingdom | Australia | Asia | South America | Other countries -1 | Total |


| RM&T Operating Statistics 2008 2007 | Refining and wholesale marketing gross margin(Dollars per gallon)(a) | Refined products sales volumes(Thousands of barrels per day) |


| Jurisdiction Expiration Amount  (in millions) | U.S. Federal | U.S. States | Australia | U.K. | Other Foreign |


| WMI WM Holdings Non-Guarantor Subsidiaries Eliminations Consolidated | Year Ended December 31, 2008 | Cash flows from operating activities: | Net income | Equity in earnings of subsidiaries, net of taxes | Other adjustments | Net cash provided by (used in) operating activities | Cash flows from investing activities: | Acquisition of businesses, net of cash acquired | Capital expenditures | Proceeds from divestitures of businesses (net of cash divested) and other sales of assets | Net receipts from restricted trust and escrow accounts and other, net | Net cash used in investing activities | Cash flows from financing activities: | New borrowings | Debt repayments | Common stock repurchases | Cash dividends | Exercise of common stock options and warrants | Minority interest distributions paid and other | (Increase) decrease in intercompany and investments, net | Net cash provided by (used in) financing activities | Effect of exchange rate changes on cash and cash equivalents | Increase in cash and cash equivalents | Cash and cash equivalents at beginning of period | Cash and cash equivalents at end of period | Year Ended December 31, 2007 | Cash flows from operating activities: | Net income | Equity in earnings of subsidiaries, net of taxes | Other adjustments | Net cash provided by (used in) operating activities | Cash flows from investing activities: | Acquisition of businesses, net of cash acquired | Capital expenditures | Proceeds from divestitures of businesses (net of cash divested) and other sales of assets | Purchases of short-term investments | Proceeds from sales of short-term investments | Net receipts from restricted trust and escrow accounts and other, net | Net cash provided by (used in) investing activities | Cash flows from financing activities: | New borrowings | Debt repayments | Common stock repurchases | Cash dividends | Exercise of common stock options and warrants | Minority interest distributions paid and other | (Increase) decrease in intercompany and investments, net | Net cash provided by (used in) financing activities |


Operating earnings in 2007 improved by $2,816 million compared with 2006.
The increase is partly due to the $571 million global settlement with U. S.  Department of Justice (U. S.  DoJ) that occurred in the second quarter of 2006.
Commercial Airplanes earnings increased by $851 million compared with the same period in 2006, primarily due to higher new airplane deliveries, commercial aviation support activities and improved cost performance offset by increased research and development expense.
Commercial Airplanes’ research and development expense increased by $572 million to $2,962 million compared with the same period 2006, primarily due to spending on the 787 and 747-8 programs.
IDS earnings increased by $409 million compared with 2006.
The increase is primarily due to 2006 charges of $770 million in the BMA segment related to AEW&C, partially offset by lower 2007 earnings on several programs in the BMA and N&SS segments.
BCC operating earnings decreased $57 million reflecting lower revenues partially offset by a recovery of losses and lower expenses.
Other segment earnings improved by $482 million primarily due to the absence of losses related to Connexion by Boeing, which included a charge of $320 million to exit this business in 2006.
Unallocated items and eliminations in 2007 contributed $560 million to the 2007 earnings improvement, which is further explained in the table below.


| December 31, | 2013 | (in millions) | Balance Sheet Data: | Investments-1 | Separate account assets | Total assets | Policyholder account balances, future policy benefits and claims | Separate account liabilities | Customer deposits | Long-term debt-1 | Short-term borrowings | Total liabilities | Total Ameriprise Financial, Inc. shareholders’ equity | Noncontrolling interests’ equity |


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


| Fiscal Year | 2009 | Cost of product revenue | Cost of services revenue | Research and development | Sales and marketing | General and administrative | Total stock-based compensation |


| Years ended December 31, | (in thousands) | Net cash provided by operating activities | Net cash used in investing activities | Net cash provided by (used in) financing activities | Effect of exchange rate changes on cash | Net increase/(decrease) in cash and cash equivalents |


| Period Total Number ofShares Purchased Average PricePaid PerShare Total Number of SharesPurchased as Part ofPubliclyAnnouncedProgram(a) Maximum Number ofShares That May Yet BePurchased Under theProgram(b) | October | November | December |


| -1 (2) December 31, 2006 December 31, 2005 | NAIC Designation | (in millions) | 1 | 2 | Subtotal Investment Grade | 3 | 4 | 5 | 6 | Subtotal Below Investment Grade | Total Private Fixed Maturities | -1 | NAIC Designation | (in millions) | 1 | 2 | Subtotal Investment Grade | 3 | 4 | 5 | 6 | Subtotal Below Investment Grade | Total Private Fixed Maturities |


| Year Ended December 31, | 2014 | Other revenue special item, net -1 | Mainline operating special items, net -2 | Regional operating special items, net | Nonoperating special items, net -3 | Reorganization items, net -4 | Income tax special items, net -5 | Total |