The growth in the Reinsurance segment was primarily attributable to premiums from new facultative and automatic treaties and renewal premiums on existing blocks of business in the U. S.  and international operations.
The growth in the International segment was primarily due to the following factors: ?
An increase in Mexicos premiums, fees and other revenues due to growth in the business and higher fees, partially offset by an adjustment for experience refunds on a block of business and various one- time other revenue items in both years.  ?
South Koreas premiums, fees and other revenues increased due to business growth, as well as the favorable impact of foreign currency exchange rates.  ?
Brazils premiums, fees and other revenues increased due to business growth and higher bancassurance business, as well as an increase in amounts retained under reinsurance arrangements.  ?
Chiles premiums, fees and other revenues increased primarily due to higher institutional premiums through its bank distribution channel, partially offset by lower annuity sales.  ?
Business growth in the United Kingdom, Argentina, Australia and Taiwan, as well as the favorable impact of changes in foreign currency exchange rates, also contributed to the increase in the International segment.
The growth in the Institutional segment was primarily due to growth in the dental, disability, AD&D products, as well as growth in the LTC and IDI businesses, all within the non-medical health & other business.
Additionally, growth in the group life business was attributable to the impact of sales and favorable persistency largely in the term life business.
These increases in the non-medical health & other and group life businesses were partially offset by a decrease in the retirement & savings business.
The decline in retirement & savings was primarily due to a decline in premiums from structured settlements predominantly due to lower sales, partially offset by an increase in master terminal funding premiums (MTF).
The growth in the Individual segment was primarily due to higher fee income from universal life and investment-type products and an increase in premiums from other life products, partially offset by a decrease in immediate annuity premiums and a decline in premiums associated with the Companys closed block business as this business continues to run-off.


Banking E*TRADE Bank is subject to various regulatory capital requirements administered by federal banking agencies.
Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on E*TRADE Bank’s financial condition and results of operations.
Under capital adequacy guidelines and the regulatory framework for prompt corrective action, E*TRADE Bank must meet specific capital guidelines that involve quantitative measures of E*TRADE Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.
In addition, E*TRADE Bank may not pay dividends to the parent company without approval from its regulators and any loans by E*TRADE Bank to the parent company and its other non-bank subsidiaries are subject to various quantitative, arm’s length, collateralization and other requirements.
E*TRADE Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require E*TRADE Bank to maintain minimum amounts and ratios of Total and Tier I capital to risk-weighted assets and Tier I capital to adjusted total assets.
As shown in the table below, at both December 31, 2011 and 2010, the most recent notification from its regulators categorized E*TRADE Bank as “well capitalized” under the regulatory framework for prompt corrective action.
However, events beyond management’s control, such as a continued deterioration in residential real estate and credit markets, could adversely affect future earnings and E*TRADE Bank’s ability to meet its future capital requirements.


| In millions Unpaid Principal Balance Recorded Investment (a) Associated Allowance (b) Average Recorded Investment (c) | December 31, 2014 | Impaired loans with an associated allowance | Commercial | Commercial real estate | Home equity | Residential real estate | Credit card | Other consumer | Total impaired loans with an associated allowance | Impaired loans without an associated allowance | Commercial | Commercial real estate | Home equity | Residential real estate | Total impaired loans without an associated allowance | Total impaired loans | December 31, 2013 | Impaired loans with an associated allowance | Commercial | Commercial real estate | Home equity | Residential real estate | Credit card | Other consumer | Total impaired loans with an associated allowance | Impaired loans without an associated allowance | Commercial | Commercial real estate | Home equity | Residential real estate | Total impaired loans without an associated allowance | Total impaired loans |


| Year ended December 31, (in millions) Revenue(a) Expense(b) Income from continuing operations before income taxes Net income | 2007 | Europe/Middle East and Africa | Asia and Pacific | Latin America and the Caribbean | Other | Total international | Total U.S. | Total | 2006 | Europe/Middle East and Africa | Asia and Pacific | Latin America and the Caribbean | Other | Total international | Total U.S. | Total | 2005 | Europe/Middle East and Africa | Asia and Pacific | Latin America and the Caribbean | Other | Total international | Total U.S. | Total |


Total rent expense for the years ended December 31, 2017, 2016 and 2015 aggregated $87.2 million, $74.0 million, and $60.1 million, respectively.
Future minimum rental commitments under non-cancelable operating leases in effect as of December 31, 2017 were (in millions):


| Cocoa Futures Contract Prices(dollars per pound) | 2015 | Annual Average | High | Low |


| Years Ended December 31, | 2013 | Consolidated | Crude charge (BPD)(1) | Refinery throughput (BPD)(2) | Refinery production (BPD)(3) | Sales of produced refined products (BPD) | Sales of refined products (BPD)(4) | Refinery utilization-5 |


| Expiration Date Capacity Borrowings Letters of Credit Issued Total Used Available Capacity | (In millions) | Revolving credit facility | Asset-backed credit facility | Committed lines | Uncommitted lines | Total |


| Year ended December 31, | 2005 | (in millions) | GAAP results: | Revenues | Benefits and expenses | Income from continuing operations before income taxes, extraordinary gain on acquisition and cumulative effect of accountingchange |


| Year Ended December 31, | 2017 | (In $ millions, except percentages) | Income tax provision computed at US federal statutory tax rate | Change in valuation allowance | Equity income and dividends | (Income) expense not resulting in tax impact, net | US tax effect of foreign earnings and dividends | Foreign tax credits | Other foreign tax rate differentials | Legislative changes | State income taxes, net of federal benefit | Other, net | Income tax provision (benefit) | Effective income tax rate |


The Company has entered into remarketing agreements with several hardware manufacturers under which we sell computer hardware, hardware maintenance and related services to our customers.
Revenue related to hardware sales is recognized when the hardware is shipped to our customers.
Hardware revenue decreased due to a decrease in the number of third party hardware systems and components delivered.
COST OF SALES AND GROSS PROFIT Cost of license represented the cost of software from third party vendors through remarketing agreements associated with license fee revenue.
These costs were recognized when license revenue was recognized.
Cost of support and service represented costs associated with conversion and implementation efforts, ongoing support for our in-house customers, operation of our data and item centers providing services for our outsourced customers, electronic payment services and direct operating costs.
These costs were recognized as they were incurred.
Cost of hardware consisted of the direct and indirect costs of purchasing the equipment from the manufacturers and delivery to our customers.
These costs were recognized at the same time as the related hardware revenue was recognized.
Ongoing operating costs to provide support to our customers were recognized as they were incurred.
Table of Contents 124 14.
Other (Income) Expense, Net Other (income) expense, net, consisted of:


| Year Ended December 31, | 2010 | (millions) | Acquisition, Capital and Exploration Expenditures | Unproved Property Acquisition-1 | Proved Property Acquisition-2 | Exploration | Development | Corporate and Other | Total | Increase in FPSO Lease Obligation-3 |


exchange contracts for the benefit of commercial customers involved in international trade to hedge their exposure to foreign currency fluctuations.
The Bancorp has internal controls in place to help ensure excessive risk is not being taken in providing this service to customers.
These controls include an independent determination of currency volatility and credit equivalent exposure on these contracts, counterparty credit approvals and country limits.
LIQUIDITY RISK MANAGEMENT The goal of liquidity management is to provide adequate funds to meet changes in loan and lease demand, unexpected deposit withdrawals and other contractual obligations.
A summary of certain obligations and commitments to make future payments under contracts is included in Table 42.
Mitigating liquidity risk is accomplished by maintaining liquid assets in the form of investment securities, maintaining sufficient unused borrowing capacity in the debt markets and delivering consistent growth in core deposits.
Cash flows from estimated loan and lease repayment are included in Table 37.
The estimated weightedaverage life of the available-for-sale securities portfolio was 3.2 years at December 31, 2008, based on current prepayment expectations.
Of the $14.3 billion of securities in the portfolio at December 31, 2008, $5.8 billion in principal and interest is expected to be received in the next 12 months and an additional $2.2 billion is expected to be received in the next 13 to 24 months.
In addition to the securities portfolio, asset-driven liquidity is provided by the Bancorps ability to sell or securitize loan and lease assets.
In order to reduce the exposure to interest rate fluctuations and to manage liquidity, the Bancorp has developed securitization and sale procedures for several types of interestsensitive assets.
A majority of the long-term, fixed-rate singlefamily residential mortgage loans underwritten according to FHLMC or FNMA guidelines are sold for cash upon origination.
Additional assets such as jumbo fixed-rate residential mortgages, certain commercial loans, home equity loans, automobile loans and other consumer loans are also capable of being securitized or sold.
For the year ended December 31, 2008 and 2007, loans totaling $15.7 billion and $12.2 billion, respectively, were securitized or sold.
Core deposits have historically provided the Bancorp with a sizeable source of relatively stable and low cost funds.
The Bancorps average core deposits and shareholders equity funded 65% of its average total assets during 2008.
In addition to core deposit funding, the Bancorp also accesses a variety of other short-term and long-term funding sources, which include the use of various regional Federal Home Loan Banks as a funding source.
Certificates carrying a balance of $100,000 or more and deposits in the Bancorps foreign branch located in the Cayman Islands are wholesale funding tools utilized to fund asset growth.
Management does not rely on any one source of liquidity and manages availability in response to changing balance sheet needs.
The Bancorp has a shelf registration in place with the SEC permitting ready access to the public debt markets and qualifies as a well-known seasoned issuer under SEC rules.
As of December 31, 2008, $4.4 billion of debt or other securities were available for issuance from this shelf registration under the current Bancorps Board of Directors authorizations, however, due to current market disruptions, access to these markets may not be readily available.
The Bancorp also has $16.2 billion of funding available for issuance through private offerings of debt securities pursuant to its bank note program and currently has approximately $17.9 billion of borrowing capacity available through secured borrowing sources including the Federal Home Loan Banks and Federal Reserve Banks.
The Bancorp has approximately $1.3 billion of unsecured long-term debt and $2.8 billion of total long-term debt that will mature during 2009.
The Bancorps senior debt ratings as of February 23, 2009 are summarized in Table 39, which indicate the Bancorps strong capacity to meet financial commitments.
* Additional information on senior debt credit ratings is as follows: ?
Moodys A2 rating is considered upper-medium-grade obligations and is the third highest ranking within its overall classification system; ?
Standard & Poors A- rating indicates the obligors capacity to meet its financial commitment is STRONG and is the third highest ranking within its overall classification system; ?
Fitch Ratings A rating is considered high credit quality and is the third highest ranking within its overall classification system; and ?
DBRS Ltd. s AAL rating is considered superior credit quality and is the second highest ranking within its overall classification system.
* As an investor, you should be aware that a security rating is not a recommendation to buy, sell or hold securities, that it may be subject to revision or withdrawal at any time by the assigning rating organization and that each rating should be evaluated independently of any other rating.


| (In millions) Capital Lease Obligations (a) Operating Lease Obligations | 2010 | 2011 | 2012 | 2013 | 2014 | Later years | Sublease rentals | Total minimum lease payments | Less imputed interest costs | Present value of net minimum lease payments |


| December 31, | 2007 | (in millions) | Cash | Cash equivalents: | Federal government obligations | Other debt securities | Total cash and cash equivalents | Short-term investments: | State and local government obligations | Other debt securities | Total short-term investments |


| December 31,(in millions) 2010 2009 | Mortgages – commercial | Mortgages – residential(a) | Life insurance policy loans | Collateral, guaranteed, and other commercial loans | Total mortgage and other loans receivable | Allowance for losses(b) | Mortgage and other loans receivable, net |


| In millions Level 1 Level 2 Level 3 Carrying value | Cash equivalents | Investments | Derivative receivables | Total assets at fair value | Derivative payables | Total liabilities at fair value |


Stock Performance Graph The following graph compares the most recent five-year performance of Alcoa’s common stock with (1) the Standard & Poor’s 500?
Index and (2) the Standard & Poor’s 500?
Materials Index, a group of 27 companies categorized by Standard & Poor’s as active in the “materials” market sector.
Such information shall not be deemed to be “filed.
”


Discontinued Operations In the first quarter of fiscal 2013 we completed the sale of our Intuit Websites business for approximately $60 million in cash and recorded a gain on disposal of approximately $32 million, net of income taxes.
We completed the sale of our Intuit Financial Services business in the first quarter of fiscal 2014 for approximately $1.025 billion in cash and recorded a gain on disposal of approximately $36 million, net of income taxes.
In the first quarter of fiscal 2014 we also completed the sale of our Intuit Health business for cash consideration that was not significant and recorded a $4 million pre-tax loss on disposal that was more than offset by a related income tax benefit of approximately $14 million, resulting in a net gain on disposal of approximately $10 million.
We have reclassified our statements of operations for all periods presented to reflect these three businesses as discontinued operations.
See Note 7 to the financial statements in Item 8 of this Annual Report for a more complete description of these discontinued operations and the impact that they have had on our statements of operations for the fiscal periods presented.


| Years Ended March 31, Change | (Dollars in millions) | Segment Operating Profit-1 | Distribution Solutions-2 | Technology Solutions | Subtotal | Corporate Expenses, Net | Litigation Credit, Net | Interest Expense | Income from Continuing Operations Before Income Taxes | Segment Operating Profit Margin | Distribution Solutions | Technology Solutions |


| Effective Expiration Maximum Available As of  December 31, Outstanding As of  December 31, | Description | Commercial Paper | The Hartford | Revolving Credit Facility | 5-year revolving credit facility [1] | Total Commercial Paper and RevolvingCredit Facility |


NONOPERATING INCOME (EXPENSE) The Company received $138 million of cash proceeds and recorded $22 million in short-term other receivables from the sale of certain marketable equity securities during 2017.
The Company recorded a pretax gain related to this sale of $73 million ($46 million after-tax or $0.06 per diluted share).
During 2016, the Company received cash proceeds of $265 million from the sale of certain marketable equity securities and recorded a pretax gain related to this sale of $223 million ($140 million after-tax or $0.20 per diluted share).
During 2016, the Company also paid $188 million of make-whole premiums associated with the early extinguishment of the Redeemed Notes.
The Company recorded a loss on extinguishment of these borrowings, net of certain deferred gains, of $179 million ($112 million after-tax or $0.16 per diluted share).
During 2015, the Company received cash proceeds of $43 million from the sale of certain marketable equity securities and recorded a pretax gain related to these sales of $12 million ($8 million after-tax or $0.01 per diluted share).
INTEREST COSTS Interest expense of $163 million for 2017 was $22 million lower than in 2016, due primarily to the decrease in interest costs as a result of the early extinguishment of certain outstanding borrowings in the third quarter of 2016 using the proceeds from the Fortive Distribution and due to lower commercial paper borrowings in 2017 compared to 2016, partially offset by the cost of


| 30 September 2018 30 September 2017 | US$Notional | Interest rate swaps (fair value hedge) | Cross currency interest rate swaps (net investment hedge) | Cross currency interest rate swaps (cash flow hedge) | Cross currency interest rate swaps (not designated) |


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


Cash Flow Hedges Beginning in the third quarter of 2013, the firm designated certain commodities-related swap and forward contracts as cash flow hedges.
These swap and forward contracts hedge the firms exposure to the variability in cash flows associated with the forecasted sales of certain energy commodities by one of the firms consolidated investments.
The firm applies a statistical method that utilizes regression analysis when assessing hedge effectiveness.
A cash flow hedge is considered highly effective in offsetting changes in forecasted cash flows attributable to the hedged risk when the regression analysis results in a coefficient of determination of 80% or greater and a slope between 80% and 125%.
For qualifying cash flow hedges, the gains or losses on derivatives, to the extent effective, are included in Cash flow hedges within the consolidated statements of comprehensive income.
Gains or losses resulting from hedge ineffectiveness are included in Other principal transactions in the consolidated statements of earnings.
The effective portion of the gains, before taxes, recognized on these cash flow hedges was $14 million for 2013.
The gain/(loss) related to hedge ineffectiveness was not material for 2013.
There were no gains/(losses) excluded from the assessment of hedge effectiveness or reclassified to earnings from accumulated other comprehensive income during 2013.
The amounts recorded in Cash flow hedges will be reclassified to Other principal transactions in the same periods as the corresponding gain or loss on the sale of the hedged energy commodities, which is also recorded in Other principal transactions.
 The firm expects to reclassify $5 million of gains, net of taxes, related to cash flow hedges from Cash flow hedges to earnings within the next twelve months.
The length of time over which the firm is hedging its exposure to the variability in future cash flows for forecasted transactions is approximately two years.


| Stock Options 2014 2013 2012 | Options granted (in thousands) | Weighted-average exercise price | Weighted-average grant-date fair value | Assumptions: | Weighted-average expected volatility | Weighted-average expected term (in years) | Weighted-average risk-free interest rate | Weighted-average expected dividend yield |


| Year Ended | September 30, 2007 | ($ in 000's) | Interest Income and Expense | Interest Income | Interest Expense | Net Interest Income | Expenses | Pre-tax Earnings |


(1) In addition to the items in the table above, “Realized investment gains (losses), net, and related charges and adjustments” also includes an adjustment to reflect “Realized investment gains (losses), net” related to divested businesses as results of “Divested businesses,” discussed below.
Terminated Hedges of Foreign Currency Earnings.
The amounts shown in the table above primarily reflect the impact of an intercompany arrangement between Corporate and Other operations and the International Insurance segment, pursuant to which the
Gibraltar Life sells fixed annuities, denominated in U. S.  and Australian dollars that may be subject to increased surrenders should the yen depreciate in relation to these currencies and interest rates in Australia and the U. S.  decline relative to Japan.
A significant portion of the liabilities associated with these contracts include a market value adjustment feature, which mitigates the profitability impact from surrenders.
As of December 31, 2016, products with a market value adjustment feature represented $23.3 billion of our Japan operations’ insurance-related liabilities, which included $19.1 billion attributable to non-yen denominated fixed annuities.
Liquid Assets Liquid assets include cash and cash equivalents, short-term investments, U. S.  Treasury fixed maturities, fixed maturities that are not designated as held-to-maturity and public equity securities.
In addition to access to substantial investment portfolios, our insurance companies’ liquidity is managed through access to a variety of instruments available for funding and/or managing cash flow mismatches, including from time to time those arising from claim levels in excess of projections.
Our ability to utilize assets and liquidity between our subsidiaries is limited by regulatory and other constraints.
We believe that ongoing operations and the liquidity profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios for each of our insurance subsidiaries.
The following table sets forth the fair value of certain of our domestic insurance operations’ portfolio of liquid assets, including cash and short-term investments, fixed maturity investments other than those designated as held-to-maturity, classified by NAIC or equivalent rating, and public equity securities, as of the dates indicated.


Commercial loans held for investment During 2013 and 2012, the Bancorp recorded nonrecurring impairment adjustments to certain commercial and industrial, commercial mortgage and commercial construction loans held for investment.
Larger commercial loans included within aggregate borrower relationship balances exceeding $1 million that exhibit probable or observed credit weaknesses are subject to individual review for impairment.
The Bancorp considers the current value of collateral, credit quality of any guarantees, the guarantors liquidity and willingness to cooperate, the loan structure and other factors when evaluating whether an individual loan is impaired.
When the loan is collateral dependent, the fair value of the loan is generally based on the fair value of the underlying collateral supporting the loan and therefore these loans were classified within Level 3 of the valuation hierarchy.
In cases where the carrying value exceeds the fair value, an impairment loss is recognized.
An adverse change in the fair value of the underlying collateral would result in a decrease in the fair value measurement.
The fair values and recognized impairment losses are reflected in the previous table.
Commercial Credit Risk, which reports to the Chief Risk and Credit Officer, is responsible for preparing and reviewing the fair value estimates for commercial loans held for investment.


Economic Hedges The Companies enter into certain derivative instruments that do not qualify or are not designated as hedges under the accounting rules for derivatives and hedging.
However, management believes these instruments represent economic hedges that mitigate exposure to fluctuations in commodity prices.
facilities, were $3,735 million and $3,455 million at December 31, 2012 and 2011, respectively.
Natural gas is delivered by pipeline to CECONY at various points in its service territory and is distributed to customers by the company through an estimated 4,360 miles of main and 387,881 service lines.
The company owns a natural gas liquefaction facility and storage tank at its Astoria property in Queens, New York.
The plant can store approximately 1,000 mdths of which a maximum of about 250 mdths can be withdrawn per day.
The company has about 1,226 mdths of additional natural gas storage capacity at a field in upstate CECONYs gas sales and deliveries for the last five years were: New York, owned and operated by Honeoye Storage Corporation, a corporation 28.8 percent owned by CECONY and 71.2 percent owned by Con Edison Development.
Gas Sales and Deliveries The company generally recovers the cost of the gas that it buys and then sells to its firm sales customers.
It does not make any margin or profit on the gas it sells.
CECONYs gas revenues are subject to a weather normalization clause and a revenue decoupling mechanism.
As a result, its gas delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.


| In millions Residential Mortgages Commercial Mortgages (a) Home Equity Loans/Lines (b) | FINANCIAL INFORMATION – December 31, 2012 | Servicing portfolio (c) | Carrying value of servicing assets (d) | Servicing advances (e) | Repurchase and recourse obligations (f) | Carrying value of mortgage-backed securities held (g) | FINANCIAL INFORMATION – December 31, 2011 | Servicing portfolio (c) | Carrying value of servicing assets (d) | Servicing advances (e) | Repurchase and recourse obligations (f) | Carrying value of mortgage-backed securities held (g) | In millions | CASH FLOWS – Year ended December 31, 2012 | Sales of loans (h) | Repurchases of previously transferred loans (i) | Servicing fees (j) | Servicing advances recovered/(funded), net | Cash flows on mortgage-backed securities held (g) | CASH FLOWS – Year ended December 31, 2011 | Sales of loans (h) | Repurchases of previously transferred loans (i) | Servicing fees (j) | Servicing advances recovered/(funded), net | Cash flows on mortgage-backed securities held (g) |


Earnings for the first quarter of 2007 are expected to be lower than in the fourth quarter of 2006.
Containerboard export sales volumes are expected to decline due to scheduled first-quarter maintenance outages.
Sales volumes for U. S.  converted products will be higher due to more shipping days, but expected softer demand should cause the shipments per day to decrease.
Average sales price realizations are expected to be comparable to fourthquarter averages.
An additional containerboard price increase was announced in January that is expected to be fully realized in the second quarter.
Costs for wood, energy, starch, adhesives and freight are expected to increase.
Manufacturing costs will be higher due to costs associated with scheduled maintenance outages in the containerboard mills.
European Container operating results are expected to improve as seasonally higher sales volumes and improved margins more than offset slightly higher manufacturing costs.
Consumer Packaging Demand and pricing for Consumer Packaging products correlate closely with consumer spending and general economic activity.
In addition to prices and volumes, major factors affecting the profitability of Consumer Packaging are raw material and energy costs, manufacturing efficiency and product mix.
CONSUMER PACKAGING net sales increased 9% compared with 2005 and 7% compared with 2004.
Operating profits rose 8% from 2005, but declined 15% from 2004 levels.
Compared with 2005, higher sales volumes ($9 million), improved average sales price realizations ($33 million), reduced lack-of-order downtime ($18 million), and favorable mill operations ($25 million) were partially offset by higher raw material costs ($19 million) and freight costs ($21 million), unfavorable mix ($14 million) and other costs ($21 million).


Ã¿Ã¾We conduct our business primarily through one reportable segment, our Regulated Businesses segment.
 We  also operate businesses that provide a broad range of related and complementary water and wastewater services  in non-regulated markets, which includes four operating segments that individually do not meet the criteria of a  reportable segment.
 These four non-reportable segments have been combined and are presented as Market-Based  Businesses, which is consistent with how management assesses the results of our businesses.
  Regulated Businesses Segment  The following table summarizes certain financial information for our Regulated Businesses segment:  @T@  Operating revenues.
 The following tables and discussions provide explanation of the variances related to the  three components of operating revenues  water revenues, wastewater revenues and other revenues:  @T@  For the Years Ended December 31,  @T@  (a) The correlation between water service revenues and billed water sales volumes shown above is impacted by the California drough.
  California is experiencing a severe drought and in April 2015, the Governor mandated water usage restrictions to reduce overall water  usage by 25% in the state compared to 2013 levels.
 Our California customers are largely meeting these conservation targets.
 Revenue in  California is decoupled from sales volume, aligning our water conservation goals with those of the state and our customers and therefore  these usage reductions do not impact earnings.
  In 2015, water revenues in  California is  decoupled from sales volume, a


| Years Ended December 31, 2013 2012 2011 | Gross | Survival ratios: | Asbestos | Environmental | Combined |


| Payments Due by Period | Total | (Thousands of Dollars) | Long-term debt, principal and interest payments | Capital lease obligations | Operating leases(a) | Unconditional purchase obligations(b) | Other long-term obligations — WYCO investment | Other long-term obligations | Payments to vendors in process | Short-term debt | Total contractual cash obligations(c) |


Because of the interrelation of Applied’s operations, properties within a country may be shared by the segments operating within that country.
Products in the Silicon Systems Group are manufactured in Austin, Texas; Singapore; Gloucester, Massachusetts; and Rehovot, Israel.
Remanufactured equipment products in the Applied Global Services segment are produced primarily in Austin, Texas.
Products in the Display segment are manufactured in Tainan, Taiwan; Santa Clara, California; and Alzenau, Germany.
Products in the Energy and Environmental Solutions segment are primarily manufactured in Alzenau, Germany; Treviso, Italy; and Cheseaux, Switzerland.
In addition to the above properties, Applied also owns and leases offices, plants and/or warehouse locations in 78 locations throughout the world: 18 in Europe, 21 in Japan, 15 in North America (principally the United States), 8 in China, 7 in Korea, 6 in Southeast Asia, and 3 in Taiwan.
These facilities are principally used for manufacturing; research, development and engineering; and marketing, sales and/or customer support.
Applied also owns a total of approximately 139 acres of buildable land in Texas, California, Israel and Italy that could accommodate additional building space.
Applied considers the properties that it owns or leases as adequate to meet its current and future requirements.
Applied regularly assesses the size, capability and location of its global infrastructure and periodically makes adjustments based on these assessments.
Fiscal 2013 operating results reflected a recovery in demand for TV manufacturing equipment and continued demand for advanced mobile display equipment, which resulted in increased new orders, net sales, operating income and non-GAAPadjusted operating income compared to fiscal 2012.
In the fourth quarter of fiscal 2013, new orders were $114 million, down 55 percent from the prior quarter, and reflected customer push-outs of orders.
Net sales in the fourth quarter of fiscal 2013 were $163 million, almost flat compared to the prior quarter.
Two customers accounted for approximately 50 percent of net sales for the Display segment in fiscal 2013.
Fiscal 2012 operating results reflected a continued overcapacity in the large substrate LCD TV equipment industry that resulted in decreased new orders and net sales in fiscal 2012.
The downturn in the LCD TV equipment industry was partially offset by increased demand for advanced mobile display equipment.
Four customers accounted for 60 percent of net sales for the Display segment in fiscal 2012.


| Millions of Dollars OperatingLeases Capital Leases | 2010 | 2011 | 2012 | 2013 | 2014 | Later years | Total minimum lease payments | Amount representing interest | Present value of minimum lease payments |


| Cocoa Futures Contract Prices  (dollars perpound) | 2008 | Annual Average | High | Low |


| 2010 | Allowance for loan and lease losses, January 1 | Loans and leases charged off | Recoveries of loans and leases previously charged off | Net charge-offs | Provision for loan and lease losses | Other | Allowance for loan and lease losses, December 31 | Reserve for unfunded lending commitments, January 1 | Provision for unfunded lending commitments | Other | Reserve for unfunded lending commitments, December 31 | Allowance for credit losses, December 31 | December 31 | (Dollars in millions) | By counterparty-1, 2 | GSEs-3 | Monolines | Whole-loan investors, private-label securitization trustees, third-party securitization sponsors and other | Total unresolved repurchase claims by counterparty-3 | By product type-1, 2 | Prime loans | Alt-A | Home equity | Pay option | Subprime | Other | Total unresolved repurchase claims by product type-3 |


| September 30, | 2004 | Wireless licenses | Marketing-related | Technology-based | Customer-related | Other | Total intangible assets | 2002 | Reported net income | Goodwill amortization | Adjusted net income | Earnings per common share: | Basic — as reported | Basic — as adjusted | Diluted — as reported | Diluted — as adjusted | September 30, | 2004 | Gross | Carrying | Amount | Wireless licenses | Marketing-related | Technology-based | Customer-related | Other | Total intangible assets |


| Pension Benefits Postretirement Benefits | 2008 | (In millions) | Retirement plan expense | Defined benefit plans: | Service cost (benefits earned during the period) | Interest cost | Expected return on plan assets | Curtailment | Amortization of actuarial loss | Other amortization | Net periodic defined benefit plan expense | Defined contribution plans | Total retirement plan expense |


| Power Plant Market In Service Year Acquired Location Capacity - Reactor Type License Expiration Date | Pilgrim (a) | Indian Point 3 (b) | Indian Point 2 (b) | Vermont Yankee (c) | Palisades (d) |


Earnings From Operations Earnings from operations for 2012 increased by $1,216 million compared with 2011.
This was primarily due to higher new airplane deliveries, which drove an increase in earnings of $1,292 million, and lower research and development expense of $666 million primarily due to lower spending on the 747-8 and 787-8 programs.
These increases were partially offset by lower earnings of $742 million driven by higher fleet support costs, increased operating costs associated with business growth, other period costs and decreased earnings from commercial aviation services.
The decrease in operating margins from 9.7% in 2011 to 9.6% in 2012 was primarily due to the dilutive effect of the 787 and 747-8 deliveries.
Earnings from operations for 2011 increased by $489 million compared with 2010.
This increase reflects earnings of $376 million from higher revenues on new airplane deliveries, $180 million of higher earnings due to commercial aviation services volume and margins and $261 million of lower research and development expense, partially offset by increases of $328 million reflecting higher fleet support costs and other costs associated with business growth.


Distributions 2012 annual sales decreased 9% from 2011, and decreased 10% from 2010.
Operating profits in 2012 were $22 million ($71 million excluding reorganization costs) compared with $34 million ($86 million excluding reorganization costs) in 2011 and $78 million in 2010.
Annual sales of printing papers and graphic arts supplies and equipment totaled $3.5 billion in 2012 compared with $4.0 billion in 2011 and $4.2 billion in 2010, reflecting declining demand and the exiting of unprofitable businesses.
Trade margins as a percent of sales for printing papers were relatively even with both 2011 and 2010.
Revenue from packaging products was flat at $1.6 billion in both 2012 and 2011 and up slightly compared to $1.5 billion in 2010.
Packaging margins increased in 2012 from both 2011 and 2010, reflecting the successful execution of strategic sourcing initiatives.
Facility supplies annual revenue was $0.9 billion in 2012, down compared to $1.0 billion in 2011 and 2010.
Operating profits in 2012 included $49 million of reorganization costs for severance, professional services and asset write-downs compared with $52


AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 3.00% Convertible Notes—During the years ended December 31, 2008 and 2007, the Company issued an aggregate of approximately 8.9 million and 973 shares of Common Stock, respectively, upon conversion of $182.8 million and $0.02 million principal amount, respectively, of 3.00% Notes.
Pursuant to the terms of the indenture, holders of the 3.00% Notes are entitled to receive 48.7805 shares of Common Stock for every $1,000 principal amount of notes converted.
In connection with the conversions in 2008, the Company paid such holders an aggregate of approximately $4.7 million, calculated based on the discounted value of the future interest payments on the notes, which is reflected in loss on retirement of long-term obligations in the accompanying consolidated statement of operations for the year ended December 31, 2008.14.
IMPAIRMENTS, NET LOSS ON SALE OF LONG-LIVED ASSETS, RESTRUCTURING AND MERGER RELATED EXPENSE The significant components reflected in impairments, net loss on sale of long-lived assets, restructuring and merger related expense in the accompanying consolidated statements of operations include the following: Impairments and Net Loss on Sale of Long-Lived Assets—During the years ended December 31, 2008, 2007 and 2006, the Company recorded impairments and net loss on sale of long-lived assets (primarily related to its rental and management segment) of $11.2 million, $9.2 million and $2.6 million, respectively.
During the years ended December 31, 2008, 2007 and 2006 respectively, the Company recorded net losses associated with the sales of certain non-core towers and other assets, as well as impairment charges to write-down certain assets to net realizable value after an indicator of impairment had been identified.
As a result, the Company recorded net losses and impairments of approximately $10.5 million, $7.1 million and $2.0 million for the years ended December 31, 2008, 2007 and 2006, respectively.
The net loss for the year ended December 31, 2008 is comprised of net losses from asset sales and other impairments of $10.7 million, offset by gains from asset sales of $0.2 million.
The net loss for the year ended December 31, 2007 is comprised of net losses from asset sales and other impairments of $7.8 million, offset by gains from asset sales of $0.7 million.
Merger Related Expense—During the year ended December 31, 2005, the Company assumed certain obligations, as a result of the merger with SpectraSite, Inc. , primarily related to employee separation costs of former SpectraSite employees.
Severance payments made to former SpectraSite, Inc.  employees were subject to plans and agreements established by SpectraSite, Inc.  and assumed by the Company in connection with the merger.
These costs were recognized as an assumed liability in the purchase price allocation.
In addition, the Company also incurred certain merger related costs for additional employee retention and separation costs incurred during the year ended December 31, 2006.


| Year Ended December 31, | 2009 | Steam Sold (MMlbs) | General | Apartment house | Annual power | Total Steam Delivered to CECONY Customers | Steam Sold ($ in millions) | General | Apartment house | Annual power | Other operating revenues | Total Steam Delivered to CECONY Customers | Average Revenue per Mlb Sold |


value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired as of December 31, 2005 and 2004.
Gross realized gains and losses for 2005 were $15,000 and $75,000, respectively.
Gross realized gains and losses for 2004 were $628,000 and $205,000, respectively.
Gross realized gains for 2003 were $1,249,000.
There were no gross realized losses for 2003.
Maturities stated are effective maturities.
F.  Restricted Cash At December 31, 2005 and 2004, the Company held $41,482,000 and $49,847,000, respectively, in restricted cash.
At December 31, 2005 and 2004 the balance was held in deposit with certain banks predominantly to collateralize conditional stand-by letters of credit in the names of the Company's landlords pursuant to certain operating lease agreements.
G.  Property and Equipment Property and equipment consist of the following at December 31 (in thousands):


| 2010 2009 2008 | Second generation tenant improvements | Second generation leasing costs | Building improvements | Totals |


HEWLETT-PACKARD COMPANY AND SUBSIDIARIES Managements Discussion and Analysis of Financial Condition and Results of Operations (Continued) declines in short-term project work combined with an unfavorable currency impact, the effect of which was partially offset by increases in sales of cloud and information management and analytics offerings.
ES earnings from operations as a percentage of net revenue decreased by 3.4 percentage points in fiscal 2012.
The decrease was due primarily to a gross margin decline driven by lower than expected revenue, contractual rate declines on ongoing contracts, a lower resource utilization rate and additional costs associated with certain contract deliverable delays.
These effects were partially offset by a continued focus on operating improvements and cost initiatives that favorably impacted the cost structure of all business units.
Software


| Con Edison* Con Edison of New York O&R Competitive Businesses and Other** | (Millions of Dollars) | Operating revenues | Purchased power | Fuel | Gas purchased for resale | Operating revenues less purchased power, fuel and gas purchased for resale (net revenues) | Other operations and maintenance | Depreciation and amortization | Taxes, other than income taxes | Income taxes | Operating income | Other income less deductions and related federal income tax | Net interest charges | Income from continuing operations | Discontinued operations | Net income |


| Year Ended December 31 | 2009 | (In thousands) | Principal and interest payments on retained securities | Servicing fees received |


| 2014 Impairment Test 2013 Impairment Test | Reporting Unit | A | B | C | D | E | F | G | 2014 Impairment Test | Reporting Unit | Low | A | B | C | D | E | F | G |


| (Millions) 2007 2006 2005 | Cash income tax payments | Cash interest payments | Capitalized interest |


| DECEMBER 31, 2008 DECEMBER 30, 2007 | Balance at beginning of year | Additions based on tax positions related to current year | Additions for tax positions of prior years | Reductions for tax positions of prior years | Foreign currency translation | Settlements | Lapse of statute | Balance at end of year |


| In billions of dollars Dec. 31, 2016 Sept. 30, 2016 Dec. 31, 2015 | Global Consumer Banking | North America | Latin America | Asia-1 | Total | Institutional Clients Group | Corporate lending | Treasury and trade solutions (TTS) | Private bank,Markets and securities servicesand other | Total | Total Citicorp | Total Citi Holdings | Total Citigroup loans (EOP) | Total Citigroup loans (AVG) |


THE GOLDMAN SACHS GROUP, INC.  AND SUBSIDIARIES Notes to Consolidated Financial Statements ° Commodity prices and spreads.
The ranges for commodity prices and spreads cover variability in products, maturities and delivery locations.
Sensitivity of Fair Value Measurement to Changes in Significant Unobservable Inputs The following is a description of the directional sensitivity of the firms level 3 fair value measurements to changes in significant unobservable inputs, in isolation: ° Correlation.
In general, for contracts where the holder benefits from the convergence of the underlying asset or index prices (e. g. , interest rates, credit spreads, foreign exchange rates, inflation rates and equity prices), an increase in correlation results in a higher fair value measurement.
° Volatility.
In general, for purchased options, an increase in volatility results in a higher fair value measurement.
° Credit spreads, upfront credit points and recovery rates.
In general, the fair value of purchased credit protection increases as credit spreads or upfront credit points increase or recovery rates decrease.
Credit spreads, upfront credit points and recovery rates are strongly related to distinctive risk factors of the underlying reference obligations, which include reference entityspecific factors such as leverage, volatility and industry, market-based risk factors, such as borrowing costs or liquidity of the underlying reference obligation, and macroeconomic conditions.
° Commodity prices and spreads.
In general, for contracts where the holder is receiving a commodity, an increase in the spread (price difference from a benchmark index due to differences in quality or delivery location) or price results in a higher fair value measurement.
Due to the distinctive nature of each of the firms level 3 derivatives, the interrelationship of inputs is not necessarily uniform within each product type.


(1) Includes exposure to Alt-a mortgage loans with an amortized cost of $59.6 million, gross unrealized losses of $18.2 million and a carrying amount of $41.4 million.
The Alt-a portfolio has a weighted average rating of BBB and 66% 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 $27.4 million, gross unrealized gains of $0.3 million, gross unrealized losses of $17.9 million and a carrying amount of $9.8 million.
Of the $1,445.5 million in gross unrealized losses as of December 31, 2010, there were $1.8 million in losses attributed to securities scheduled to mature in one year or less, $50.5 million attributed to securities scheduled to mature between one to five years, $86.0 million attributed to securities scheduled to mature between five to ten years, $386.9 million attributed to securities scheduled to mature after ten years and $920.3 million related to mortgage-backed and other ABS that are not classified by maturity year.
As of December 31, 2010, we were in a $695.8 million net unrealized gain position as compared to a $1,458.8 million net unrealized loss position as of December 31, 2009.
Of the $2,154.6 million increase in net unrealized gains for the year ended December 31, 2010, an approximate $1.0 billion net unrealized gain can be attributed to an approximate 57 basis points decrease in interest rates and the remaining net unrealized gains related to other market factors.
Credit Disruption.
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 and 2009 with concerns in the leveraged finance markets led to reduced liquidity and wider credit spreads.
These credit concerns led to widespread forced selling into a very thinly traded market, which further strained market liquidity.
This market disruption lowered valuations and, as a result, we saw an increase in net unrealized losses in our securities portfolio through the first quarter of 2009.
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 reflected the illiquid markets.
We concluded the prices of the securities in our securities portfolio were temporarily depressed due to (1) the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms, (2) the expectation the issuers will continue to satisfy their obligations given the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence and (3) management not having the intent to sell these securities and as it is not more likely than not that we would be required to sell these securities before the


OtherIn addition to the proceedings or other matters described above, PNC and persons to whom we may have indemnification obligations, in the normal course of business, are subject to various other pending and threatened legal proceedings in which claims for monetary damages and other relief are asserted.
We do not anticipate, at the present time, that the ultimate aggregate liability, if any, arising out of such other legal proceedings will have a material adverse effect on our financial position.
However, we cannot now determine whether or not any claims asserted against us or others to whom we may have indemnification obligations, whether in the proceedings or other matters described above or otherwise, will have a material adverse effect on our results of operations in any future reporting period, which will depend on, among other things, the amount of the loss resulting from the claim and the amount of income otherwise reported for the reporting period.
NOTE 20 COMMITMENTSIn the normal course of business, we have various commitments outstanding, certain of which are not included on our Consolidated Balance Sheet.
The following table presents our outstanding commitments to extend credit along with significant other commitments as of December 31, 2017 and December 31, 2016, respectively.
Table 98: Commitments to Extend Credit and Other Commitments
(a) Net outstanding standby letters of credit include $3.5 billion and $3.9 billion at December 31, 2017 and December 31, 2016, respectively, which support remarketing programs.
(b) Represents aggregate maximum exposure up to the specified limits of the reinsurance contracts provided by our wholly-owned captive insurance subsidiary.
These amounts reflect estimates based on availability of financial information from insurance carriers.
As of December 31, 2017, the aggregate maximum exposure amount comprised $1.5 billion for accidental death & dismemberment contracts and $.2 billion for credit life, accident & health contracts.
Comparable amounts at December 31, 2016 were $1.5 billion and $.3 billion, respectively.
(c) We enter into standby bond purchase agreements to support municipal bond obligations.
(d) Includes $.5 billion related to investments in qualified affordable housing projects at both December 31, 2017 and December 31, 2016.
Commitments to Extend CreditCommitments to extend credit, or net unfunded loan commitments, represent arrangements to lend funds or provide liquidity subject to specified contractual conditions.
These commitments generally have fixed expiration dates, may require payment of a fee, and contain termination clauses in the event the customers credit quality deteriorates.
Net Outstanding Standby Letters of CreditWe issue standby letters of credit and share in the risk of standby letters of credit issued by other financial institutions, in each case to support obligations of our customers to third parties, such as insurance requirements and the facilitation of transactions involving capital markets product execution.
Approximately 91% and 94% of our net outstanding standby letters of credit were rated as Pass as of December 31, 2017 and December 31, 2016, respectively, with the remainder rated as Below Pass.
An internal credit rating of Pass indicates the expected risk of loss is currently low, while a rating of Below Pass indicates a higher degree of risk.
If the customer fails to meet its financial or performance obligation to the third party under the terms of the contract or there is a need to support a remarketing program, then upon a draw by a beneficiary, subject to the terms of the letter of credit, we would be obligated to make payment to them.
The standby letters of credit outstanding on December 31, 2017 had terms ranging from less than one year to seven years.
As of December 31, 2017, assets of $1.3 billion secured certain specifically identified standby letters of credit.
In addition, a portion of the remaining standby letters of credit issued on behalf of specific customers is also secured by collateral or guarantees that secure the customers other obligations to us.
The carrying amount of the liability for our obligations related to standby letters of credit and participations in standby letters of credit was $.2 billion at December 31, 2017 and is included in Other liabilities on our Consolidated Balance Sheet.
attributable to the higher interest rate environment and customer growth.
Average interest-bearing deposits represented 76% of average interest-bearing liabilities in 2017 compared to 77% in 2016.
Further details regarding average loans and deposits are included in the Business Segments Review section of this Item 7.


| (Thousands of barrels per day) 2008 2007 2006 | Gasoline | Distillates | Propane | Feedstocks and special products | Heavy fuel oil | Asphalt | TOTAL(a) | Average sales price(Dollars per barrel) | Crack spreads(Dollars per barrel) | Chicago LLS 6-3-2-1 | US Gulf Coast LLS 6-3-2-1 |


| Sales Price | High | Fiscal 2006 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Fiscal 2005 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter |


| Year Ended December 31, | (In thousands) | Apparel | Footwear | Accessories | Total net sales | License | Connected Fitness | Total net revenues |


| 2006 2005 2004 | As of December 31 (dollars in millions) | Core deposits: | Non-interest-bearing | Savings, interest-bearing checking and money market | Total | Time deposits maturing: | Within 6 months | After 6 months but within 1 year | After 1 but within 2 years | After 2 but within 3 years | After 3 years | Total | Total core deposits | Non-core deposits | Total deposits |


| December 31, 2012 December 31, 2011 | (Dollar amounts in millions) | Other investments: | Consolidated sponsored investment funds | Equity method | Deferred compensation plan hedge fund equity method investments | Cost method investments: | Federal Reserve Bank stock | Other | Total cost method investments | Carried interest | Total other investments |


| Years Ended December 31, | 2017 | Total net revenues | Total expenses | Income from continuing operations | Loss from discontinued operations, net of tax | Net income | Less: Net income attributable to noncontrolling interests | Net income attributable to Ameriprise Financial | Income from continuing operations | Loss from discontinued operations | Net income | Income from continuing operations | Loss from discontinued operations | Net income | Cash Dividends Declared Per Common Share | December 31, | 2017 | 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 |


| December 31, Allowance for loan losses Net charge-offs (recoveries) year ended | (in millions) | Investment Bank | Commercial Banking | Treasury & Securities Services | Asset Management | Corporate/Private Equity | Total Wholesale | Retail Financial Services | Card Services | Corporate/Private Equity | Total Consumer – reported | Credit card – securitized | Total Consumer – managed | Total |


| Years ended December 31(millions, except percentage data) 2014 2013 2012 | Revenue | Operating income | Operating margin |


| (In millions) 2006 2005 2004 | E&P | RM&T | IG | Segment revenues | Elimination of intersegment revenues | Gain (loss) on long-term U.K. gas contracts | Total revenues | Items included in both revenues and costs and expenses: | Consumer excise taxes on petroleum products and merchandise | Matching crude oil and refined product buy/sell transactions settled in cash: | E&P | RM&T | Total buy/sell transactions included in revenues |


Derivatives and Hedging The Company maintains a program to enter into swaps to hedge against market price and interest rate exposures with respect to certain seed investments in sponsored investment products.
At December 31, 2017, the Company had outstanding total return swaps with an aggregate notional value of approximately $587 million.
At December 31, 2016, the Company had outstanding total return swaps and interest rate swaps with aggregate notional values of approximately $572 million and $42 million, respectively.
Gains (losses) on total return swaps are recorded in nonoperating income (expense) and were $(118) million, $(31) million and $11 million for 2017, 2016 and 2015, respectively.
Gains (losses) on the interest rate swaps are recorded in nonoperating income (expense) and were not material for 2017, 2016 and 2015.
The Company has entered into a derivative, providing credit protection to a counterparty of approximately $17 million, representing the Companys maximum risk of loss with respect to the provision of credit protection.
The Company carries the derivative at fair value based on the expected discounted future cash outflows under the arrangement.
The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange movements.
At December 31, 2017 and 2016, the Company had outstanding forward foreign currency exchange contracts with aggregate notional values of approximately $1.5 billion and $107 million, respectively.
Gains (losses) on the forward foreign currency exchange contracts are recorded in other general and administration expense and were $63 million for 2017.
Gains (losses) on the forward foreign currency exchange contracts were not material to the consolidated statements of income for 2016 and 2015.
The Company consolidates certain sponsored investment funds, which may utilize derivative instruments as a part of the funds investment strategies.
The change in fair value of such derivatives, which is recorded in nonoperating income (expense), was not material for 2017, 2016 and 2015.
The fair value of the outstanding derivatives mentioned above were not material to the consolidated statements of financial condition at December 31, 2017 and 2016.
See Note 12, Borrowings, for more information on the Companys net investment hedge.8.


| Type of Authorization Commission Expiration Date Authorization Amount Available Under Authorization | Westar Energy & KGE | Short-Term Debt | KCP&L | Short-Term Debt | Long-Term Debt | GMO | Short-Term Debt | Long-Term Debt |


35% due primarily to certain undistributed foreign earnings for which no U. S.  taxes are provided because such earnings are intended to be indefinitely reinvested outside the U. S.  As of September 29, 2012, the Company had deferred tax assets arising from deductible temporary differences, tax losses, and tax credits of $4.0 billion, and deferred tax liabilities of $14.9 billion.
Management believes it is more likely than not that forecasted income, including income that may be generated as a result of certain tax planning strategies, together with future reversals of existing taxable temporary differences, will be sufficient to fully recover the deferred tax assets.
The Company will continue to evaluate the realizability of deferred tax assets quarterly by assessing the need for and amount of a valuation allowance.
The Internal Revenue Service (the IRS) has completed its field audit of the Companys federal income tax returns for the years 2004 through 2006 and proposed certain adjustments.
The Company has contested certain of these adjustments through the IRS Appeals Office.
The IRS is currently examining the years 2007 through 2009.
All IRS audit issues for years prior to 2004 have been resolved.
In addition, the Company is subject to audits by state, local, and foreign tax authorities.
Management believes that adequate provisions have been made for any adjustments that may result from tax examinations.
However, the outcome of tax audits cannot be predicted with certainty.
If any issues addressed in the Companys tax audits are resolved in a manner not consistent with managements expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.


| (In millions) 2010 2009 2008 | Net sales | Operating profit | Operating margin | Backlog at year-end |


OCC Capital Plan In December 2014, OCC announced a newly-formed capital plan.
The OCC capital plan was designed to strengthen OCCs capital base and facilitate its compliance with proposed SEC regulations for Systemically Important Financial Market Utilities (SIFMUs) as well as international standards applicable to financial market infrastructures.
On February 26, 2015, the SEC issued a notice of no objection to OCCs advance notice filing regarding the capital plan, and OCC and OCCs existing exchange stockholders, which include CBOE, subsequently executed agreements effecting the capital plan.
Under the plan, each of OCCs existing exchange stockholders agreed to contribute its pro-rata share, based on ownership percentage, of $150 million in equity capital, which would increase OCCs shareholders equity, and to provide its pro rata share in replenishment capital, up to a maximum of $40 million per exchange stockholder, if certain capital thresholds are breached.
OCC also adopted policies under the plan with respect to fees, customer refunds, and stockholder dividends, which envision an annual dividend payment to the exchange stockholders equal to the portion of OCCs after-tax income that exceeds OCCs capital requirements after payment of refunds to OCCs clearing members (with such customer refunds generally to constitute 50% of the portion of OCCs pre-tax income that exceeds OCCs capital requirements).
On March 3, 2015, in accordance with the plan, CBOE contributed $30 million to OCC.
On March 6, 2015, OCC informed CBOE that the SEC, acting though delegated authority, had approved OCCs proposed rule filing for the capital plan.
The SEC approval order was stayed on March 13, 2015 automatically as a result of the initiation of petitions to review the order.
On September 10, 2015, the SEC issued orders that discontinued the automatic stay of the approval order and granted the petitions for the SEC to review the approval order.
On September 15, 2015, the petitioners filed motions to reinstitute the automatic stay.
On February 11, 2016, based on a de novo review of the entire record, the SEC approved the proposed rule change implementing OCCs capital plan and dismissed the petitions for review and the petitioners motions.
Certain petitioners subsequently appealed the SEC approval order for the OCC capital plan to the U. S.  Court of Appeals for the D. C.  Circuit and moved to stay the SEC approval order.
On February 23, 2016, the Court denied the petitioners motion to stay.
The appeal of the SEC approval order remains pending.
CBOEs contribution has been recorded under Investments in the balance sheet at December 31, 2016.


| Years ended December 31, | 2009 | AmerisourceBergen Corporation: | Gross product sales | % of total gross revenues | % of U.S. gross product sales | McKesson Corporation: | Gross product sales | % of total gross revenues | % of U.S. gross product sales | Cardinal Health, Inc.: | Gross product sales | % of total gross revenues | % of U.S. gross product sales |


ITEM 3.
LEGAL PROCEEDINGS On October 27, 2000, Ajaxo, Inc.  (“Ajaxo”) filed a complaint in the Superior Court for the State of California, County of Santa Clara.
Ajaxo sought damages and certain non-monetary relief for the Company’s alleged breach of a non-disclosure agreement with Ajaxo pertaining to certain wireless technology that Ajaxo offered the Company as well as damages and other relief against the Company for their alleged misappropriation of Ajaxo’s trade secrets.
Following a jury trial, a judgment was entered in 2003 in favor of Ajaxo against the Company for $1.3 million for breach of the Ajaxo non-disclosure agreement.
Although the jury found in favor of Ajaxo on its claim against the Company for misappropriation of trade secrets, the trial court subsequently denied Ajaxo’s requests for additional damages and relief.
On December 21, 2005, the California Court of Appeal affirmed the above-described award against the Company for breach of the nondisclosure agreement but remanded the case to the trial court for the limited purpose of determining what, if any, additional damages Ajaxo may be entitled to as a result of the jury’s previous finding in favor of Ajaxo on its claim against the Company for misappropriation of trade secrets.
Although the Company paid Ajaxo the full amount due on the above-described judgment, the case was remanded back to the trial court, and on May 30, 2008, a jury returned a verdict in favor of the Company denying all claims raised and demands for damages against the Company.
Following the trial court’s filing of entry of judgment in favor of the Company on September 5, 2008, Ajaxo filed post-trial motions for vacating this entry of judgment and requesting a new trial.
By order dated November 4, 2008, the trial court denied these motions.
On December 2, 2008, Ajaxo filed a notice of appeal with the Court of Appeal of the State of California for the Sixth District.
Oral argument on the appeal was heard on July 15, 2010.
On August 30, 2010, the Court of Appeal affirmed the trial court’s verdict in part and reversed the verdict in part, remanding the case.
E*TRADE petitioned the Supreme Court of California for review of the Court of Appeal decision.
On December 16, 2010, the California Supreme Court denied the Company’s petition for review and remanded for further proceedings to the trial court.
On September 20, 2011, the trial court granted limited discovery at a conference on November 4, 2011, and set a motion schedule and trial date.
The trial will continue on May 14, 2012.
The Company will continue to defend itself vigorously.
On October 2, 2007, a class action complaint alleging violations of the federal securities laws was filed in the United States District Court for the Southern District of New York against the Company and its then
Legal Settlements for the Auction Rate Securities and Freudenberg Matters ?
We reached a settlement with the Colorado Division of Securities and the NASAA whereby E*TRADE Securities LLC offered to purchase auction rate securities from eligible investors who purchased those securities through E*TRADE Securities LLC.
We recorded a reserve of $48 million in connection with this settlement.
We also entered into a memorandum of understanding to settle the Freudenberg Action, which resulted in the recording of a net reserve of $10.8 million as of December 31, 2011.


| 2013 2012 2011 | Net sales | Operating profit | Operating margins | Backlog at year-end |


Certain non-structured liabilities The Company has elected the fair value option for certain non-structured liabilities with fixed and floating interest rates (“non-structured liabilities”).
The Company has elected the fair value option where the interest-rate risk of such liabilities is economically hedged with derivative contracts or the proceeds are used to purchase financial assets that will also be accounted for at fair value through earnings.
The election has been made to mitigate accounting mismatches and to achieve operational simplifications.
These positions are reported in Short-term borrowings and Long-term debt on the Company’s Consolidated Balance Sheet.
For those non-structured liabilities classified as Short-term borrowings for which the fair value option has been elected, the aggregate unpaid principal balance exceeded the aggregate fair value of such instruments by $220 million as of December31, 2008.
For non-structured liabilities classified as Long-term debt for which the fair value option has been elected, the aggregate unpaid principal balance exceeded the aggregate fair value by $1,542 million and $856 million as of December31, 2009 and 2008, respectively.
The change in fair value for these non-structured liabilities is reported in Principal transactions in the Company’s Consolidated Statement of Income.
Related interest expense continues to be measured based on the contractual interest rates and reported as such in the Consolidated Income Statement.


($9.0) and other items ($.2), offset by the revaluation of our U. S.  deferred taxes ($26.1).
We refined these provisional amounts under SAB 118 in the third quarter of 2018 and recorded measurement period adjustment benefits related to the deemed repatriation tax and our deferred tax revaluation of $1.3 and $.5, respectively.
In addition, in 2018, the United States Internal Revenue Service (IRS) applied our prepaid income taxes and taxes receivable of $28.4 against the December 31, 2017 deemed repatriation tax liability.
The deemed repatriation tax outstanding as of December 31, 2018, was $32.2 and will be paid on a graduated scale beginning in 2022 over a four-year period.
As of December 31, 2018, our accounting was finalized with respect to the SAB 118 provisional amounts recorded at December 31, 2017.
In aggregate, these adjustment items decreased our effective tax rate by .4% in 2018.
Our 2018 rate benefited by $2.3, primarily related to the net reduction of valuation allowances of $7.8 and other net benefits totaling $9.1, including measurement period adjustments discussed in the previous paragraph.
These benefits were offset by tax detriments recorded in 2018 totaling $14.6 related to current and deferred foreign withholding taxes.
In 2017, we recognized net tax benefits totaling $25.2, including those associated with tax attributes from a divested business and the impact of stock-based compensation.
In 2016, we recognized net tax benefits totaling $19.3, including a tax benefit related to stock-based compensation from the first year adoption of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting".
In both 2017 and 2016, prior to TCJA, the tax rate benefited from income earned in various foreign jurisdictions at rates lower than the U. S.  federal statutory rate, primarily related to China, Croatia, and Luxembourg.
We file tax returns in each jurisdiction where we are required to do so.
In these jurisdictions, a statute of limitations period exists.
After a statute period expires, the tax authorities can no longer assess additional income tax for the expired period.
In addition, once the statute expires we are no longer eligible to file claims for refund for any tax that we may have overpaid.
Unrecognized Tax Benefits The total amount of our gross unrecognized tax benefits at December?31, 2018 was $11.0, of which $7.9 would impact our effective tax rate, if recognized.
A reconciliation of the beginning and ending balance of our gross unrecognized tax benefits for the periods presented is as follows:


| Years Ended December 31, Gain (Loss) | (in millions) | Assets: | Bond and equity securities | Alternative investments(a) | Other, including Short-term investments | Liabilities: | Long-term debt(b) | Other liabilities | Total gain |


Interest rates on variable rate obligations were calculated using the rate in effect as of December 31, 2004.
Interest rates on certain long-term debt have been converted from variable to fixed rates as discussed under the heading Interest Rate Swaps below.
Interest Rate Swaps In order to minimize its financing costs and to manage interest rate exposure, the Company, from time to time, enters into interest rate swap agreements.
In October 2003, the Company entered into interest rate swap agreements to effectively convert interest payments on long-term debt from fixed to variable rates.
Interest payments on $200.0 million of 6.7% Notes due in October 2005 and $150.0 million of 6.95% Notes due in March 2007 were converted from the respective fixed rates to variable rates based on the London Interbank Offered Rate, LIBOR.
In March 2004, the Company terminated these agreements, resulting in cash receipts totaling $5.2 million, with a corresponding increase to the carrying value of the long-term debt.
This increase is being amortized over the remaining term of the respective long-term debt as a reduction to interest expense.
In February 2001, the Company entered into interest rate swap agreements that effectively converted variable-interest-rate payments on certain leases from a variable to a fixed rate of 6.1%.
The fair value of interest rate swaps is defined as the difference in the present values of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period.
The fair value of the swap agreements is calculated quarterly based upon the quoted market price for the same or similar financial instruments.
The fair value of the variable to fixed interest rate swaps was a liability of $1.7 million and $5.2 million as of December 31, 2004 and 2003, respectively.
The potential net loss in fair value of interest rate swaps of ten percent resulting from a hypothetical near-term adverse change in market rates was $.2 million and $.5 million as of December 31, 2004 and 2003, respectively.
The Company’s risk related to the interest rate swap agreements is limited to the cost of replacing the agreements at prevailing market rates.


| Year ended December 31, (in millions) 2006 2005 | Other noninterest revenue | Net interest income | Gain on sale of discontinued operations | Total net revenue | Noninterest expense | Income from discontinued operations before income taxes | Income tax expense | Income from discontinued operations |


Hypothetical scenarios evaluate the potential impact of extreme but plausible events over periods as long as one month.
These scenarios are developed to address perceived vulnerabilities in the market and in our portfolios, and are periodically updated.
They are also reviewed and updated to reflect changing market conditions, such as were experienced during the second half of 2007.
For example, many trading assets became extremely illiquid which required changes in assumptions to properly incorporate them in the stress models.
This was the case with our CDOrelated exposure for which we have updated our models at various times during the second half of 2007.
Management reviews and evaluates results of these scenarios monthly.
During the twelve months ended December 31, 2007, the largest daily losses among these scenarios ranged from $459 million to $1.5 billion.
Worst-case losses, which represent the most extreme losses in our daily VAR calculation, are reported daily.
Finally, desk-level stress tests are performed daily for individual businesses.
These stress tests evaluate the potential adverse impact of large moves in the market risk factors to which those businesses are most sensitive.


Assets held for sale in the consolidated balance sheet as of December 31, 2009 include an office building the Company sold during the year ended December 31, 2010.
The office building had a net book value of $2 million and the Company recorded a gain of $14 million to Gain (loss) on disposition of businesses and assets, net, in the consolidated statements of operations during the year ended December 31, 2010.
The office building was included in the Other Activities segment.5.
Marketable Securities, at Fair Value The Captives and nonqualified pension trusts hold available-for-sale securities for capitalization and funding requirements, respectively.
The Company recorded realized gains (losses) as follows:


| (in millions) December 31, 2017 December 31, 2016 | Investments, GAAP | Investments held by consolidated VIEs, GAAP | Total Investments | Investments held by consolidated VIEs | Investments held by consolidated VREs | Net interest in consolidated VREs | Net interest in consolidated VIEs-1 | Total Investments, as adjusted | Federal Reserve Bank stock | Deferred compensation investments | Hedged investments | Carried interest (VIEs/VREs) | Total “economic” investment exposure |


| December 31, 2014-6 | AmortizedCost | (in millions) | Fixed maturities, available-for-sale | U.S. Treasury securities and obligations of U.S. government authorities and agencies | Obligations of U.S. states and their political subdivisions | Foreign government bonds | U.S. corporate public securities | U.S. corporate private securities-1 | Foreign corporate public securities | Foreign corporate private securities | Asset-backed securities-2 | Commercial mortgage-backed securities | Residential mortgage-backed securities-3 | Total fixed maturities, available-for-sale-1 | Equity securities, available-for-sale |


The following table provides the change in income from continuing operations by segment, excluding Travelers, and certain transactions as mentioned above:


| Payment due by period 2019 2020 2021 2022 2023 After 2023 Total | Long-term debt | Principal | Interest | Long-term debt of VIEs | Principal | Interest | Lease commitments | Operating leases | Capital leases | Pension and other post-retirement plans(a) | Purchase commitments | Fuel | Power | Other | Total contractual commitments(a) |


MetLife, Inc.  Notes to the Consolidated Financial Statements — (Continued) action lawsuit was filed against Sun Life in Toronto, Kang v.  Sun Life Assurance Co.  (Super.
Ct. , Ontario, September 2010), alleging sales practices claims regarding the same individual policies sold by MLIC and transferred to Sun Life.
Sun Life contends that MLIC is obligated to indemnify Sun Life for some or all of the claims in this lawsuit.
MLIC is currently not a party to the Kang v.  Sun Life lawsuit.
Italy Fund Redemption Suspension Complaints and Litigation.
As a result of suspension of withdrawals and diminution in value in certain funds offered within certain unit-linked policies sold by the Italian branch of Alico Life International, Ltd.  (“ALIL”), a number of policyholders invested in those funds have either commenced or threatened litigation against ALIL, alleging misrepresentation, inadequate disclosures and other related claims.
These policyholders contacted ALIL beginning in July 2009 alleging that the funds operated at variance to the published prospectus and that prospectus risk disclosures were allegedly wrong, unclear, and misleading.
The limited number of lawsuits that have been filed to date have either been resolved or are proceeding through litigation.
In March 2010, ALIL learned that the public prosecutor in Milan had opened a formal investigation into the actions of ALIL employees, as well as of employees of ALIL’s major distributor, based upon a policyholder complaint.
The complaint filed by the policyholder has now been withdrawn.
ALIL is cooperating with the Italian and Irish regulatory authorities, which have jurisdiction in connection with this matter.
The Stock Purchase Agreement includes a provision pursuant to which the Holding Company and certain related parties may seek indemnification for liabilities in excess of an agreed upon amount arising out of certain specified policyholder claims and governmental investigations in connection with the above-mentioned unit-linked policies.
See also “Indemnification Assets and Contingent Consideration” in Note 2.
Summary Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, mortgage lending bank, employer, investor, investment advisor and taxpayer.
Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.
It is not possible to predict the ultimate outcome or provide reasonable ranges of potential losses of all pending investigations and legal proceedings.
In some of the matters referred to previously, very large and/or indeterminate amounts, including punitive and treble damages, are sought.
Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect.
However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.
Insolvency Assessments Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers.
These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged.
Some states permit member insurers to recover assessments paid through full or partial premium tax offsets.
In addition, Japan has established a Policyholder Protection Commission as a contingency to protect policyholders against the insolvency of life insurance companies in Japan through assessments to companies licensed to provide life insurance.
Assets and liabilities held for insolvency assessments were as follows:


Forward-Looking Statements This Annual Report to Shareholders contains forward-looking statements concerning Eaton's full year 2013 sales, the performance in 2013 of its worldwide end markets, and Eaton's 2013 growth in relation to end markets, among other matters.
These statements may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to Eaton, based on current beliefs of management as well as assumptions made by, and information currently available to, management.
Forward-looking statements generally will be accompanied by words such as anticipate, believe, could, estimate, expect, forecast, guidance, intend, may, possible, potential, predict, project or other similar words, phrases or expressions.
These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside Eatons control.
The following factors could cause actual results to differ materially from those in the forward-looking statements: unanticipated changes in the markets for the Companys business segments; unanticipated downturns in business relationships with customers or their purchases from us; the availability of credit to customers and suppliers; competitive pressures on sales and pricing; increases in the cost of material and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest; the impact of acquisitions and divestitures; unanticipated difficulties integrating acquisitions; new laws and governmental regulations; interest rate changes; tax rate changes or exposure to additional income tax liability; stock market and currency fluctuations; and unanticipated deterioration of economic and financial conditions in the United States and around the world.
Eaton does not assume any obligation to update these forward-looking statements.
Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations  CNA Financial  (Continued) Net income increased $246 million in 2006 as compared with 2005.
This increase was attributable to increases in net operating income and net realized investment gains.
See the Investments section of this MD&A for further discussion of net investment income and net realized investment results.
Net operating income increased $225 million in 2006 as compared with 2005.
This improvement was primarily driven by an increase in net investment income, a decrease in net prior year development as discussed below and reduced catastrophe impacts in 2006.
Catastrophe impacts were $1 million after tax and minority interest for the year ended December 31, 2006, as compared to $15 million after tax and minority interest for the year ended December 31, 2005.
The 2005 results also included a $54 million loss, after taxes and minority interest, in the surety line of business related to a large national contractor.
Further information related to the large national contractor is included in Note 22 of the Notes to Consolidated Financial Statements included under Item 8.
The combined ratio improved 7.9 points in 2006 as compared with 2005.
The loss ratio improved 7.9 points, due to decreased net prior year development as discussed below and improved current accident year impacts.
The 2005 loss ratio was unfavorably impacted by surety losses of $110 million, before taxes and minority interest, related to a national contractor as discussed above.
Partially offsetting this favorable impact was less favorable current accident year loss ratios across several other lines of business in 2006.
Favorable net prior year development of $66 million was recorded in 2006, including $61 million of favorable claim and allocated claim adjustment expense reserve development and $5 million of favorable premium development.
Unfavorable net prior year development of $103 million, including $173 million of unfavorable claim and allocated claim adjustment expense reserve development and $70 million of favorable premium development, was recorded in 2005.
Further information on Specialty Lines Net Prior Year Development for 2006 and 2005 is included in Note 9 of the Notes to Consolidated Financial Statements included under Item 8.


Part I Item 1 Entergy Corporation, Utility operating companies, and System Energy 253 including the continued effectiveness of the Clean Energy Standards/Zero Emissions Credit program (CES/ZEC), the establishment of certain long-term agreements on acceptable terms with the Energy Research and Development Authority of the State of New York in connection with the CES/ZEC program, and NYPSC approval of the transaction on acceptable terms, Entergy refueled the FitzPatrick plant in January and February 2017.
In October 2015, Entergy determined that it would close the Pilgrim plant.
The decision came after management’s extensive analysis of the economics and operating life of the plant following the NRC’s decision in September 2015 to place the plant in its “multiple/repetitive degraded cornerstone column” (Column 4) of its Reactor Oversight Process Action Matrix.
The Pilgrim plant is expected to cease operations on May 31, 2019, after refueling in the spring of 2017 and operating through the end of that fuel cycle.
In December 2015, Entergy Wholesale Commodities closed on the sale of its 583 MW Rhode Island State Energy Center (RISEC), in Johnston, Rhode Island.
The base sales price, excluding adjustments, was approximately $490 million.
Entergy Wholesale Commodities purchased RISEC for $346 million in December 2011.
In December 2016, Entergy announced that it reached an agreement with Consumers Energy to terminate the PPA for the Palisades plant on May 31, 2018.
Pursuant to the PPA termination agreement, Consumers Energy will pay Entergy $172 million for the early termination of the PPA.
The PPA termination agreement is subject to regulatory approvals.
Separately, and assuming regulatory approvals are obtained for the PPA termination agreement, Entergy intends to shut down the Palisades nuclear power plant permanently on October 1, 2018, after refueling in the spring of 2017 and operating through the end of that fuel cycle.
Entergy expects to enter into a new PPA with Consumers Energy under which the plant would continue to operate through October 1, 2018.
In January 2017, Entergy announced that it reached a settlement with New York State to shut down Indian Point 2 by April 30, 2020 and Indian Point 3 by April 30, 2021, and resolve all New York State-initiated legal challenges to Indian Point’s operating license renewal.
As part of the settlement, New York State has agreed to issue Indian Point’s water quality certification and Coastal Zone Management Act consistency certification and to withdraw its objection to license renewal before the NRC.
New York State also has agreed to issue a water discharge permit, which is required regardless of whether the plant is seeking a renewed NRC license.
The shutdowns are conditioned, among other things, upon such actions being taken by New York State.
Even without opposition, the NRC license renewal process is expected to continue at least into 2018.
With the settlement concerning Indian Point, Entergy now has announced plans for the disposition of all of the Entergy Wholesale Commodities nuclear power plants, including the sales of Vermont Yankee and FitzPatrick, and the earlier than previously expected shutdowns of Pilgrim, Palisades, Indian Point 2, and Indian Point 3.
See “Entergy Wholesale Commodities Exit from the Merchant Power Business” for further discussion.
Property Nuclear Generating Stations Entergy Wholesale Commodities includes the ownership of the following nuclear power plants:


| U.S. dollar Instantaneous change in rates | (in billions) | December 31, 2016 | December 31, 2015 | 2016 | December 31, (in millions) | Federal funds sold and securities purchased under resale agreements | Securities borrowed | Trading assets: | Debt and equity instruments, excluding loans | Loans reported as tradingassets: | Changes in instrument-specific credit risk | Other changes in fair value | Loans: | Changes in instrument-specific credit risk | Other changes in fair value | Other assets | Deposits(a) | Federal funds purchased and securities loaned or sold under repurchase agreements(a) | Other borrowed funds(a) | Trading liabilities | Beneficial interests issued by consolidated VIEs | Other liabilities | Long-term debt: | DVA on fair value option elected liabilities(a) | Other changes in fair value(b) |


For reporting purposes, we allocate the allowance for credit losses across products.
However, the allowance is available to absorb any credit losses without restriction.
Table 38 presents our allocation by product type.


| Fiscal Years Ended | September 26, 2009 | (In thousands, except per share data) | Consolidated Statement of Operations Data | Revenues: | Product sales | Service and other revenues | 1,637,134 | Costs and Expenses: | Cost of product sales | Cost of product sales—amortization of intangible assets | Cost of product sales—impairment of intangibles | Cost of service and other revenues | Research and development | Selling and marketing | General and administrative | Amortization of intangible assets | Impairment of goodwill | Impairment of intangible assets | Net gain on sale of intellectual property | Acquired in-process research and development | Restructuring charges | 3,653,808 | (Loss) income from operations | Interest income | Interest expense | Other (expense) income, net | (Loss) income before income taxes | Provision for income taxes | Net (loss) income |


As of December 31, 2008, the Company had paid all of these merger related liabilities.
The loss from discontinued operations for the year ended December 31, 2007 is primarily due to the settlement of the Verestar bankruptcy proceedings and related litigation and the related tax effects.
In November 2007, following approval by the bankruptcy court, the Verestar settlement agreement became effective, we paid the $32.0 million settlement amount and the litigation was dismissed.
In connection with the approval of the settlement agreement by the bankruptcy court and the dismissal of the bankruptcy proceedings and related litigation, we determined that the benefits from certain of Verestar’s net operating losses would more likely than not be recoverable by us.
We had not previously recorded these tax benefits related to net operating losses generated from the operations of Verestar and used by us because our ability to realize such benefits was potentially impacted by the bankruptcy proceedings and related litigation that had yet to be resolved.
Accordingly, in November 2007, we recorded $5.6 million of additional tax benefits related to Verestar.
We also recorded a tax provision of $10.7 million in loss from discontinued operations, net during the three months ended December 31, 2007 to write off deferred tax assets associated with Verestar that should have been written off in 2002 and removed from the consolidated balance sheet when Verestar was deconsolidated upon its bankruptcy filing in December 2003.


| Range of Annual Paymentsor (Receipts) Average AnnualPayments or (Receipts)for 2005-2009 Period | (In Millions) | Entergy Arkansas | Entergy Gulf States | Entergy Louisiana | Entergy Mississippi | Entergy New Orleans |


| Interest Rate Type | Fixed | (in 000’s) | Commercial Loans | Real Estate Construction Loans | Commercial Real Estate Loans | Residential Mortgage Loans | Consumer Loans | Total Loans |


| For the years ended December31 | 2012 | Beginning of year | Openings | Relocations | Total restaurants at end of year |


The increase in gross margin versus 2013 was primarily due to higher volumes, favorable mix, decreased material and commodity costs and improved pricing.
The increase in selling, general and administrative expenses was primarily due to increased headcount and higher variable compensation expense.
The increase in research, development and engineering expenses was primarily due to lower expense recovery, increased consulting, increased variable compensation and increased investment to support new product initiatives.
The increase in equity, royalty and interest income from investees was primarily due to higher earnings at Beijing Foton Cummins Engine Co. , Ltd.  (Light-duty).2013 vs.  2012 Sales Engine segment sales decreased versus 2012 due to lower demand in stationary power, heavy-duty truck and industrial businesses, partially offset by the medium-duty truck business.
The following are the primary drivers by market: ?
Stationary power engine sales decreased due to lower demand in power generation markets.  ?
Heavy-duty truck engine sales decreased due to weaker demand in North American on-highway markets during the first half of the year compared to the recovery experienced in the first half of 2012 as trucking companies replaced aging fleets.  ?
Industrial market sales decreased primarily due to a 36 percent reduction in global mining shipments as a result of lower commodity prices and a 37 percent decline in engine shipments to North American oil and gas markets, partially offset by increased shipments to the Western European construction markets as a result of the pre-buy activity in 2013 ahead of the Tier IV emission regulations beginning in the first quarter of 2014.  ?
Foreign currency fluctuations unfavorably impacted sales.
The decreases above were partially offset by the following: ?
Medium-duty truck engine sales increased due to market share gains in the North American medium-duty truck market and improved demand in the Brazilian and European truck markets.
The improved sales in Brazil were primarily due to lower sales in the first half of 2012 as the result of the implementation of the Euro V emission regulations beginning in the first quarter of 2012.
Total on-highway-related sales for 2013 were 62 percent of total engine segment sales, compared to 59 percent in 2012.
Segment EBIT Engine segment EBIT decreased versus 2012, primarily due to lower gross margin, partially offset by lower research, development and engineering expenses and higher equity, royalty and interest income from investees.
Engine segment EBIT for 2012 included restructuring and other charges of $20 million in the fourth quarter of 2012.
Major components of EBIT and related changes to segment EBIT and EBIT as a percentage of sales were as follows: