| 1. Consolidated Financial Statements: | Management Report on Internal Controls — For the year ended Dec. 31, 2009. | Reports of Independent Registered Public Accounting Firm — For the years ended Dec. 31, 2009, 2008 and 2007. | Consolidated Statements of Income — For the three years ended Dec. 31, 2009, 2008 and 2007. | Consolidated Statements of Cash Flows — For the three years ended Dec. 31, 2009, 2008 and 2007. | Consolidated Balance Sheets — As of Dec. 31, 2009 and 2008. | 2. | Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended Dec. 31, 2009, 2008 and 2007. | 3. |


| Year ended December 31, Operating revenue (loss) Change from Operating earnings (losses) Change from Return on allocated capital | (in millions, except ratios) | Investment Bank | Treasury & Securities Services | Investment Management &Private Banking | JPMorgan Partners | Chase Financial Services | Support Units and Corporate | JPMorgan Chase |


| Amount (In Millions) | 2007 net revenue | Realized price changes | Palisades acquisition | Volume variance (other than Palisades) | Fuel expenses (other than Palisades) | Other | 2008 net revenue |


| 2011 2010 | Revenue | Oilfield Services | Reservoir Characterization | Drilling | Reservoir Production | Eliminations & other | 36,959 | Distribution | Eliminations | 2,581 | Corporate & other-1 | Interest income-2 | Interest expense-3 | Charges & credits-4 | $39,540 |


| For the fiscal years ended June 30, | (in millions) | Gain on iProperty transaction(a) | Impairment of marketable securities and cost method investments(b) | Gain on sale of marketable securities(c) | Dividends received from cost method investments | Gain on sale of cost method investments | Other | Total Other, net |


| Due in | 1 Year or Less | (in 000’s) | Commercial Loans | Real Estate Construction Loans | Commercial Real Estate Loans | Residential Mortgage Loans | Consumer Loans | Total Loans |


18.
Commitments and Contingencies Asserted and Unasserted Claims – Various claims and lawsuits are pending against us and certain of our subsidiaries.
We cannot fully determine the effect of all asserted and unasserted claims on our consolidated results of operations, financial condition, or liquidity.
To the extent possible, we have recorded a liability where asserted and unasserted claims are considered probable and where such claims can be reasonably estimated.
We do not expect that any known lawsuits, claims, environmental costs, commitments, contingent liabilities, or guarantees will have a material adverse effect on our consolidated results of operations, financial condition, or liquidity after taking into account liabilities and insurance recoveries previously recorded for these matters.
Personal Injury – The cost of personal injuries to employees and others related to our activities is charged to expense based on estimates of the ultimate cost and number of incidents each year.
We use an actuarial analysis to measure the expense and liability, including unasserted claims.
The Federal Employers’ Liability Act (FELA) governs compensation for work-related accidents.
Under FELA, damages are assessed based on a finding of fault through litigation or out-of-court settlements.
We offer a comprehensive variety of services and rehabilitation programs for employees who are injured at work.
Our personal injury liability is not discounted to present value due to the uncertainty surrounding the timing of future payments.
Approximately 95% of the recorded liability is related to asserted claims and approximately 5% is related to unasserted claims at December 31, 2017.
Because of the uncertainty surrounding the ultimate outcome of personal injury claims, it is reasonably possible that future costs to settle these claims may range from approximately $285 million to $310 million.
We record an accrual at the low end of the range as no amount of loss within the range is more probable than any other.
Estimates can vary over time due to evolving trends in litigation.
As of Dec.  31, 2005, the VaRs for the commodity trading operations were:


| North America Asia Europe Total | December 29, 2007 | Net sales to external customers | Long-lived assets | Net assets | December 30, 2006 | Net sales to external customers | Long-lived assets | Net assets | December 31, 2005 | Net sales to external customers | Long-lived assets | Net assets |


?
Fuel Prices – Crude oil prices increased at a steady rate in 2007, rising from a low of $56.58 per barrel in January to close at nearly $96.00 per barrel at the end of December.
Our 2007 average fuel price increased by 9% and added $242 million of operating expenses compared to 2006.
Our fuel surcharge programs are designed to help offset the impact of higher fuel prices.
In addition, our fuel conservation efforts allowed us to improve our consumption rate by 2%.
Locomotive simulator training, operating practices, and technology all contributed to this improvement, saving approximately 21 million gallons of fuel in 2007.  ?


| 2015 2014 2013 | Stock options | RSUs | ESPP | Stock-based compensation | Income tax benefit | Stock-based compensation expense, net of tax |


| 2013 2012 | Notional Principal | Instruments designated as accounting hedges: | Foreign exchange contracts | Interest rate contracts | Instruments not designated as accounting hedges: | Foreign exchange contracts |


| (Dollars in millions) Multi-Seller Conduits Loan and Other Investment Vehicles CDOs Leveraged Lease Trusts Other Vehicles Total | Consolidated VIEs, December 31, 2009 | Maximum loss exposure | Consolidated Assets-1 | Trading account assets | Derivative assets | Available-for-sale debt securities | Held-to-maturity debt securities | Loans and leases | All other assets | Total | Consolidated Liabilities-1 | Commercial paper and other short-term borrowings | All other liabilities | Total | Consolidated VIEs, December 31, 2008 | Maximum loss exposure | Total assets of VIEs-1 |


UNITED PARCEL SERVICE, INC.  AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 25 Revenue The change in overall revenue was impacted by the following factors for the years ended December 31, 2012 and 2011, compared with the corresponding prior year periods:


UNITED PARCEL SERVICE, INC.  AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 81 NOTE 7.
DEBT AND FINANCING ARRANGEMENTS The following table sets forth the principal amount, maturity or range of maturities, as well as the carrying value of our debt obligations, as of December 31, 2012 and 2011 (in millions).
The carrying value of these debt obligations can differ from the principal amount due to the impact of unamortized discounts or premiums and valuation adjustments resulting from interest rate swap hedging relationships.


| 2013 2012 | December 31, (in millions) | Loans(a) | Nonaccrual loans | Loans reported as trading assets | Loans(d) | Subtotal | All other performing loans | Loans reported as trading assets | Loans(d) | Total loans | Long-term debt | Principal-protected debt | Nonprincipal-protected debt(b) | Total long-term debt | Long-term beneficial interests | Nonprincipal-protected debt(b) | Total long-term beneficial interests |


| (In millions) North America EMEA Latin America APAC Total | 2016 Net Sales | Volume – Units | Price/mix-1 | Total organic change (non-U.S. GAAP) | Acquisition | Total constant dollar change (non-U.S. GAAP) | Foreign currency translation | Total change (U.S. GAAP) | 2017 Net Sales |


| At December 31, | (dollar amounts in millions) | Commercial:-1 | Commercial and industrial | Commercial real estate: | Construction | Commercial | Total commercial real estate | Total commercial | Consumer: | Automobile-2 | Home equity | Residential mortgage | Other consumer | Total consumer | Total loans and leases |


Interest Expense Interest expense allocable to continuing operations increased from $220.5 million in 2011 to $245.2 million in 2012.
We had $47.4 million of interest expense allocated to discontinued operations in 2011, associated with the properties that were disposed of during 2011, compared to the allocation of only $3.1 million of interest expense to discontinued operations for 2012.
Total interest expense, combined for continuing and discontinued operations, decreased from $267.8 million in 2011 to $248.3 million in 2012.
The reduction in total interest expense was primarily the result of a lower weighted average borrowing rate in 2012, due to refinancing some higher rate bonds in 2011 and 2012, as well as a slight decrease in our average level of borrowings compared to 2011.
Also, due to an increase in properties under development from 2011, which met the criteria for capitalization of interest and were financed in part by common equity issuances during 2012, a $5.0 million increase in capitalized interest also contributed to the decrease in total interest expense in 2012.
Acquisition-Related Activity During 2012, we recognized approximately $4.2 million in acquisition costs, compared to $2.3 million of such costs in 2011.
The increase from 2011 to 2012 is the result of acquiring a higher volume of medical office properties, where a higher level of acquisition costs are incurred than other property types, in 2012.
During 2011, we also recognized a $1.1 million gain related to the acquisition of a building from one of our 50%-owned unconsolidated joint ventures.
Discontinued Operations Subject to certain criteria, the results of operations for properties sold during the year to unrelated parties, or classified as held-for-sale at the end of the period, are required to be classified as discontinued operations.
The property specific components of earnings that are classified as discontinued operations include rental revenues, rental expenses, real estate taxes, allocated interest expense and depreciation expense, as well as the net gain or loss on the disposition of properties.
The operations of 150 buildings are currently classified as discontinued operations.
These 150 buildings consist of 114 office, 30 industrial, four retail, and two medical office properties.
As a result, we classified operating losses, before gain on sales, of $1.5 million, $1.8 million and $7.1 million in discontinued operations for the years ended December 31, 2012, 2011 and 2010, respectively.
Of these properties, 28 were sold during 2012, 101 properties were sold during 2011 and 19 properties were sold during 2010.
The gains on disposal of these properties of $13.5 million, $100.9 million and $33.1 million for the years ended December 31, 2012, 2011 and
THE INTERPUBLIC GROUP OF COMPANIES, INC.  AND SUBSIDIARIES MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — (Continued) (Amounts in Millions, Except Per Share Amounts) sale of our remaining equity ownership interest in an agency within FCB, and net gains on sales of available-for-sale securities of $7.9, of which $3.8 related to appreciation of Rabbi Trust investments restricted for the purpose of paying our deferred compensation and deferred benefit arrangement liabilities.
Investment Impairments — We recorded charges of $12.2 during 2005, primarily related to a $7.1 adjustment of the carrying amount of our remaining unconsolidated investment in Latin America to fair value as a result of our intent to sell and $3.7 related to a decline in value of certain available-for-sale investments that were determined to be other than temporary.
We recorded investment impairment charges of $63.4 during 2004, primarily related to a $50.9 charge for an unconsolidated investment in a German advertising agency as a result of a decrease in projected operating results.
Additionally, we recorded impairment charges of $4.7 related to unconsolidated affiliates primarily in Israel, Brazil, Japan and India, and $7.8 related to several other available-for-sale investments.
Litigation Reversals — During 2004 the settlement of thirteen class actions under the federal securities laws became final and we agreed to pay $115.0, comprised of $20.0 in cash and $95.0 in shares of our common stock valued at $14.50 per share.
We received insurance proceeds of $20.0, which we recorded as a reduction in litigation charges.
We also recorded a reduction of $12.5 relating to a decrease in the share price between the tentative settlement date and the final settlement date.


2016 Share Repurchase Program\
On February 10, 2017, we announced that our Board had approved a new share repurchase program to repurchase from time to time up to $300.0 million, excluding fees, of our common stock.
The new authorization is in addition to any amounts remaining for repurchase under the 2016 Share Repurchase Program.
There is no expiration date associated with the share repurchase programs.


| Cash, net of cash acquired $366 | Fair value of contingent consideration | Fair value of debt repaid | $459 | Goodwill | Amortizable intangible assets | Inventory | Property, plant and equipment | Other net liabilities | Deferred income taxes | $459 | AmountAssigned(in millions) | Amortizable intangible assets: | Technology-related | Customer relationships | Other intangible assets | $228 |


ITEM 7 / ENTERPRISE RISK MANAGEMENT aggregate currency portfolio limits.
As a matter of general practice, we do not typically hedge our foreign currency exposures to net investments in subsidiaries.
At December 31, 2015, our foreign currency-denominated net asset position decreased by $1.3 billion, or 11.2 percent, compared to December 31, 2014.
The decrease was mostly due to a $1.7 billion decrease in our British pound position, primarily resulting from the unwinding of a cross-currency swap and a $737 million decrease in our Hong Kong dollar position, primarily resulting from the sale of ordinary shares in PICC P&C.
These decreases were partially offset by a $1.3 billion increase in our euro position, primarily resulting from debt repurchases and hedging.
For illustrative purposes, we modeled our sensitivities based on a 100 basis point increase in yield curves, a 20 percent decline in equities and alternative assets, and a 10 percent depreciation of all foreign currency exchange rates against the U. S.  dollar.
The estimated results presented in the table above should not be taken as a prediction, but only as a demonstration of the potential effects of such events.
The sensitivity factors utilized for 2015 and presented above were selected based on historical data from 1995 to 2015, as follows (see the table below): ?
a 100 basis point parallel shift in the yield curve is consistent with a one standard deviation movement of the benchmark ten-year treasury yield; ?
a 20 percent drop for equity and alternative investments is broadly consistent with a one standard deviation movement in the S&P 500; and ?
a 10 percent depreciation of foreign currency exchange rates is consistent with a one standard deviation movement in the U. S.  dollar (USD)/Great Britain pound (GBP) exchange rate.


| December 31, 2015 December 31, 2014 | (in millions) | Fixed maturities: | Public, available-for-sale, at fair value | Public, held-to-maturity, at amortized cost | Private, available-for-sale, at fair value | Private, held-to-maturity, at amortized cost | Trading account assets supporting insurance liabilities, at fair value | Other trading account assets, at fair value | Equity securities, available-for-sale, at fair value | Commercial mortgage and other loans, at book value | Policy loans, at outstanding balance | Other long-term investments-1 | Short-term investments | Total Japanese general account investments |


Segment revenues constituted 10.4% of our consolidated revenues from continuing operations for fiscal year 2008, 9.7% for 2007 and 8.1% for 2006.
H&R BLOCK FINANCIAL ADVISORS  HRBFA is a registered broker-dealer with the SEC and is a member of the New York Stock Exchange (NYSE), other national securities exchanges, Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA).
HRBFA is also a registered investment adviser.
We act as a dealer in fixed-income securities including corporate and municipal bonds, various U. S.  Government and U. S.  Government Agency securities and certificates of deposit.
HRBFA is authorized to do business as a broker-dealer in all 50 states, the District of Columbia and Puerto Rico.
At the end of fiscal year 2008, we operated 183 branch offices, compared to 195 offices in 2007 and 219 in 2006.
The reduced number of branch offices is primarily due to the consolidation of smaller branches.
Financial Advisors.
Our future success is dependent on retaining and recruiting productive financial advisors.
During fiscal years 2008, 2007 and 2006, we added 126, 97 and 193 advisors, respectively.
These additions, partially offset by attrition, increased our number of advisors from 918 at April 30, 2007, to 984 at April 30, 2008.
Our overall retention rate for fiscal year 2008 was 84%, up from nearly 80% last year.
The retention rate for our higherproducing advisors was approximately 94%, up from 92% in 2007.
Minimum production requirements caused our overall advisor retention rate to lag our higher-producing advisor retention rate.
Advisor productivity is as follows:


| in thousands 2010 2009 2008 | Accumulated Other Comprehensive Loss | Cash flow hedges | Pension and postretirement plans | Total |


Foreign Exchange Rates As a result of our international business presence, we are exposed to foreign currency exchange risks.
We transact business in foreign currencies and, as a result, our income experiences some volatility related to movements in foreign currency exchange rates.
To help manage our exposure to exchange rate volatility, we use foreign currency forward contracts on a regular basis to hedge forecasted intercompany and third-party sales and purchases denominated in non-functional currencies.
Our internal policy allows for managing anticipated foreign currency cash flows for up to one year.
These foreign currency forward contracts are designated and qualify as foreign currency cash flow hedges under GAAP.
The effective portion of the unrealized gain or loss on the forward contract is deferred and reported as a component of Accumulated other comprehensive loss (AOCL).
When the hedged forecasted transaction (sale or purchase) occurs, the unrealized gain or loss is reclassified into income in the same line item associated with the hedged transaction in the same period or periods during which the hedged transaction affects income.
The ineffective portion of the hedge, if any, is recognized in current income during the period of change.
As of December 31, 2013, the amount we expect to reclassify from AOCL to income over the next year is an unrealized net gain of $4 million.
For the years ended December 31, 2013 and 2012, there were no circumstances that would have resulted in the discontinuance of a foreign currency cash flow hedge.


Pro forma information related to the acquisition of Olmuksan has not been included as it does not have a material effect on the Company's consolidated results of operations.


| Con Edison CECONY | (Millions of Dollars) | Accrued liability – asbestos suits | Regulatory assets – asbestos suits | Accrued liability – workers’ compensation | Regulatory assets – workers’ compensation |


| 2004 High Low | Quarter ended March 31 | Quarter ended June 30 | Quarter ended September 30 | Quarter ended December 31 | 2003 | Quarter ended March 31 | Quarter ended June 30 | Quarter ended September 30 | Quarter ended December 31 |


| First  Quarter Second  Quarter Third  Quarter Fourth  Quarter | 2012 Market price | High | Low | 2011 Market price | High | Low |


| 2002 2003 Change | Foreign currency transaction gains | Debt extinguishment expense | Loss on investments | Other, net | $1,435 |


leveraged lease with any change in the recalculated net investment recognized as a gain or loss currently.
Con Edison believes that its position on the LILOs is correct and is currently appealing the auditors proposal within the Internal Revenue Service.
If Con Edison is unsuccessful in defending its position, the company may be required to recalculate the leveraged leases, which could result in a charge to earnings, the amount of which could have a material adverse effect on Con Edisons results of operations.
Liquidity and Capital Resources The Companies liquidity reflects cash flows from operating, investing and financing activities, as shown on their respective consolidated statement of cash flows and as discussed below.
The principal factors affecting Con Edisons liquidity are its investments in the Utilities, the dividends it pays to its shareholders and the dividends it receives from the Utilities.
In addition, in the 2004 and 2003 periods, Con Edison issued 16.7 million and 11.9 million shares of common stock for $578 and $436 million, respectively, of which $512 million and $378 million were invested in Con Edison of New York.
Con Edison also issued $200 million of five-year debt in 2003 and $325 million of 40-year debt (most of which it invested in its unregulated subsidiaries) in 2002.
The principal factors affecting the Utilities liquidity are the cash flow generated from operations, construction expenditures and maturities of their debt securities.
In addition, Con Edison of New York in 2004 and 2003 received net capital contributions from Con Edison of $512 million and $378 million, respectively, and in 2004, 2003 and 2002 issued $95 million, $45 million and $225 million, respectively, of additional debt net of redemptions.
In 2003, O&R redeemed $35 million of debt at maturity with commercial paper.
Con Edison of New Yorks expenditures have included approximately $447 million related to the attack on the World Trade Center and the subsequent restoration of lower Manhattan energy services and facilities; to date the company has received reimbursement of $76 million of such costs from insurance carriers and $63 million from the federal government and is pursuing further reimbursement of such costs.
See Note R to the financial statements.
The Companies current liabilities exceeded their current assets at December 31, 2004 and 2003.
The Companies generally maintain minimal cash balances and use short-term borrowing to meet their working capital needs and other cash requirements.
The Companies repay their short-term borrowings using cash flow from long-term financings and operating activities.
The Utilities cost of capital, including working capital, is reflected in the rates they charge to their customers.
Each of the Companies believes that it will be able to meet its reasonably likely short-term and long-term cash requirements.
See Risk Factors, and Application of Critical Accounting Policies  Accounting for Contingencies, above, and Regulatory Matters, below.
Changes in the Companies cash and temporary cash investments resulting from operating, investing and financing activities for the years ended December 31, 2004, 2003 and 2002 are summarized as follows: Con Edison


| 2018 2017 | Class A Common Stock | Balance at beginning of year | Issue of shares on business combination at July 3, 2017 | Issue of shares upon vesting of restricted stock units-1 | Issue of shares on exercises of stock options-1 | Exchange of Class B Common Stock for Class A Common Stock-2 | Stock repurchase program-3 (4) | Balance at end of year | Year Ended December 31, | 2018 | Revenue: | Oilfield Services | Oilfield Equipment | Turbomachinery & Process Solutions | Digital Solutions | Total | Year Ended December 31, | 2018 | Segment operating income (loss): | Oilfield Services | Oilfield Equipment | Turbomachinery & Process Solutions | Digital Solutions | Total segment operating income | Corporate | Inventory impairment and related charges-1 | Restructuring, impairment and other | Merger and related costs | Operating income (loss) | Other non operating income, net | Interest expense, net | Income (loss) before income taxes and equity in loss of affiliate | Equity in loss of affiliate | Provision for income taxes | Net income (loss) |


with APB No.25.
Instead, companies will be required to account for such transactions using a fair-value method and recognize the related expense associated with share-based payments in the statement of operations.
SFAS 123R is effective for us as of January 1, 2006.
We have historically accounted for share-based payments to employees under APB No.25’s intrinsic value method.
As such, we generally have not recognized compensation expense for options granted to employees.
We will adopt the provisions of SFAS 123R under the modified prospective method, in which compensation cost for all share-based payments granted or modified after the effective date is recognized based upon the requirements of SFAS 123R, and compensation cost for all awards granted to employees prior to the effective date that are unvested as of the effective date of SFAS 123R is recognized based on SFAS 123.
Tax benefits will be recognized related to the cost for share-based payments to the extent the equity instrument would ordinarily result in a future tax deduction under existing law.
Tax expense will be recognized to write off excess deferred tax assets when the tax deduction upon settlement of a vested option is less than the expense recorded in the statement of operations (to the extent not offset by prior tax credits for settlements where the tax deduction was greater than the fair value cost).
We estimate that we will recognize equity-based compensation expense of approximately $35 million to $38 million for the year ending December 31, 2006.
This amount is subject to revisions as we finalize certain assumptions related to 2006, including the size and nature of awards and forfeiture rates.
SFAS 123R also requires the benefits of tax deductions in excess of recognized compensation cost be reported as a financing cash flow rather than as operating cash flow as was previously required.
We cannot estimate what the future tax benefits will be as the amounts depend on, among other factors, future employee stock option exercises.
Due to the our tax loss position, there was no operating cash inflow realized for December 31, 2005 and 2004 for such excess tax deductions.
In March 2005, the SEC issued Staff Accounting Bulletin (SAB) No.107 regarding the Staff’s interpretation of SFAS 123R.
This interpretation provides the Staff’s views regarding interactions between SFAS 123R and certain SEC rules and regulations and provides interpretations of the valuation of share-based payments for public companies.
The interpretive guidance is intended to assist companies in applying the provisions of SFAS 123R and investors and users of the financial statements in analyzing the information provided.
We will follow the guidance prescribed in SAB No.107 in connection with our adoption of SFAS 123R.


| December 31, | 2010 | Estimated | Fair | Value | (In millions) | RMBS | CMBS | ABS | Total structured securities | Ratings profile: | RMBS rated Aaa/AAA | RMBS rated NAIC 1 | CMBS rated Aaa/AAA | CMBS rated NAIC 1 | ABS rated Aaa/AAA | ABS rated NAIC 1 | 2013 | Balance at beginning of year | Granted | Cancelled | Balance at end of year | Vested during the year | Compensation expense recorded | Weighted average fair value of restricted stock granted during the year |


| 2006 2005 2004 | Timberlands | Wood Products | Cellulose Fiber and White Papers | Containerboard, Packaging and Recycling | Corporate and Other | $849 |


MetLife, Inc.  Notes to the Consolidated Financial Statements — (Continued) American Life’s life insurance and annuity contracts (“Covered Payments”) for any tax periods beginning on January 1, 2005 and ending on December 31, 2013 (the “Deferral Period”).
The Closing Agreement requires that American Life submit a plan to the IRS within 90 days after the close of the Acquisition, indicating the steps American Life will take (on a country by country basis) to ensure that no substantial amount of U. S.  withholding tax will arise from Covered Payments made by American Life’s foreign branches to foreign customers after the Deferral Period.
Such plan, which was submitted to the Internal Revenue Service (“IRS”) on January 29, 2011, involves the transfer of businesses from certain of the foreign branches of American Life to one or more existing or newly-formed subsidiaries of MetLife, Inc.  or American Life.
A liability of $277 million was recognized in purchase accounting as of November 1, 2010, for the anticipated and estimated costs associated with restructuring American Life’s foreign branches into subsidiaries in connection with the Closing Agreement.
Current and Deferred Income Tax The future tax effects of temporary differences between financial reporting and tax bases of assets and liabilities are measured at the balance sheet dates and are recorded as deferred income tax assets and liabilities, with certain exceptions such as certain temporary differences relating to goodwill under purchase accounting.
For federal income tax purposes, MetLife, Inc.  and ALICO Holdings are expected to make Section 338 elections with respect to American Life and certain of its subsidiaries.
In addition, MetLife, Inc.  and AIG are expected to make a Section 338 election with respect to DelAm.
Under such elections, the U. S.  tax basis of the assets deemed acquired and liabilities assumed of ALICO were adjusted as of the Acquisition Date to reflect the consequences of the Section 338 elections.
The reversal of temporary differences (between financial reporting and U. S.  tax bases of assets and liabilities) of American Life’s foreign branches, post-branch restructuring, in connection with the Closing Agreement (i. e. , generally, after the end of the Deferral Period) is not expected to result in any direct U. S.  tax effect.
Thus, as of November 1, 2010, American Life reduced its net deferred tax asset of $425 million by $671 million that reflects the amount of U. S.  deferred tax asset that is expected to reverse post-branch restructuring.
Therefore, American Life recognized a U. S.  net deferred tax liability of approximately $246 million in purchase accounting.
As of the Acquisition Date, ALICO’s current and deferred income tax liabilities are provisional and not yet finalized.
Current income taxes may be adjusted pending the resolution of the tax value of MetLife, Inc.  securities delivered to ALICO Holdings as part of the purchase consideration on the Acquisition Date, the amount of taxes resulting from the Section 338 elections and the filing of income tax returns.
Deferred income taxes may be adjusted as a result of changes in estimates and assumptions relating to the reversal of U. S.  temporary differences prior to the completion of the anticipated restructuring of American Life’s foreign branches, the filing of income tax returns and as additional information becomes available during the measurement period.
We expect to finalize these amounts as soon as possible but no later than one year from the Acquisition Date.


| Fiscal Year Ended July 2, 2004 Fiscal Year Ended June 27, 2003 | (in millions) | Balance, beginning of period | Warranties issued | Repairs and replacements | Changes in liability for pre-existing warranties, including expirations | Balance, end of period |


Long-term borrowings at December 31, 2015 had a carrying value of $4.9 billion and a fair value of $5.2 billion determined using market prices at the end of December 2015.2025 Notes.
In May 2015, the Company issued ¬700 million of 1.25% senior unsecured notes maturing on May 6, 2025 (the Â¡Â°2025 NotesÂ¡Â±).
The notes are listed on the New York Stock Exchange.
The net proceeds of the 2025 Notes were used for general corporate purposes, including refinancing of outstanding indebtedness.
Interest of approximately $9 million per year based on current exchange rates is payable annually on May 6 of each year.
The 2025 Notes may be redeemed in whole or in part prior to maturity at any time at the option of the Company at a Â¡Â°make-wholeÂ¡Â± redemption price.
The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2025 Notes.
Upon conversion to U. S.  dollars the Company designated the ¬700 million debt offering as a net investment hedge to offset its currency exposure relating to its net investment in certain euro functional currency operations.
Gains of $14 million (net of tax of $8 million) and $19 million (net of tax of $11 million) were recognized in other comprehensive income for 2016 and 2015, respectively.
No hedge ineffectiveness was recognized during 2016.2024 Notes.
In March 2014, the Company issued $1.0 billion in aggregate principal amount of 3.50% senior unsecured and unsubordinated notes maturing on March 18, 2024 (the Â¡Â°2024 NotesÂ¡Â±).
The net proceeds of the 2024 Notes were used to refinance certain indebtedness which matured in the fourth quarter of 2014.
Interest is payable semi-annually in arrears on March 18 and September 18 of each year, or approximately $35 million per year.
The 2024 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a Â¡Â°make-wholeÂ¡Â± redemption price.
The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2024 Notes.2022 Notes.
In May 2012, the Company issued $1.5 billion in aggregate principal amount of unsecured unsubordinated obligations.
These notes were issued as two separate series of senior debt securities, including $750 million of 1.375% notes, which were repaid in June 2015 at maturity, and $750 million of 3.375% notes maturing in June 2022 (the Â¡Â°2022 NotesÂ¡Â±).
Net proceeds were used to fund the repurchase of BlackRockÂ¡Â¯s common stock and Series B Preferred from Barclays and affiliates and for general corporate purposes.
Interest on the 2022 Notes of approximately $25 million per year is payable semi-annually on June 1 and December 1 of each year, which commenced December 1, 2012.
The 2022 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a Â¡Â°make-wholeÂ¡Â± redemption price.
The Â¡Â°makewholeÂ¡Â± redemption price represents a price, subject to the specific terms of the 2022 Notes and related indenture, that is the greater of (a) par value and (b) the present value of


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Coca-Cola Company and Subsidiaries NOTE 11: COMMITMENTS AND CONTINGENCIES (Continued) Company expects final resolution of certain matters in 2005.
Management believes that any gains to the Company that may arise as a result of the final resolutions of these matters will not have a material effect on the financial condition of the Company taken as a whole.
NOTE 12: NET CHANGE IN OPERATING ASSETS AND LIABILITIES Net cash provided by operating activities attributable to the net change in operating assets and liabilities is composed of the following (in millions):


| Year Amount | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | Total |


Item 6.
SELECTED FINANCIAL DATA The selected financial data presented below has been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-K.
Prior year data reflects certain reclassifications to conform to the current year presentation.


| (In millions) 2011 2010 | E&P | OSM | IG | Segment revenues | Elimination of intersegment revenues | Total revenues |


| In millions 2007 2006 2005 | Sales | Operating Profit |


While the majority of the Promoted Products we sell to our advertisers are placed on Twitter, we also generate advertising revenue by placing advertising products that we sell to advertisers on third-party publishers’ websites, applications or other offerings.
Data Licensing and Other We generate data licensing and other revenue by (i) offering “Gnip”-branded products and data licenses that allow our data partners to access, search and analyze historical and real-time data on our platform, which data consists of public Tweets and their content, and (ii) providing mobile advertising exchange services through our MoPub exchange.
Our data partners generally purchase licenses to access all or a portion of our data for a fixed period.
We recognize data licensing revenue as the licensed data is made available to our data partners.
In addition, we operate a mobile ad exchange and receive service fees from transactions completed on the exchange.
Our mobile ad exchange enables buyers and sellers to purchase and sell advertising inventory and matches buyers and sellers.
We have determined we are not the principal in the purchase and sale of advertising inventory in transactions between third party buyers and sellers on the exchange.
Therefore we report revenue related to our ad exchange services on a net basis.


| In millions InterestOnlyProduct PrincipalandInterestProduct | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 and thereafter | Total (a) |


| Year ended December 31, | 2007 | (in millions) | Operating results: | Revenues | Benefits and expenses | Adjusted operating income | Realized investment gains (losses), net, and related adjustments(1) | Related charges-1(2) | Income from continuing operations before income taxes and equity in earnings of operating joint ventures |


categories and brands, purchase them in a store or online and use them in their homes.
Winning with consumers around the world and against our best competitors requires innovation.
Innovation has always been, and continues to be, P&Gs lifeblood.
Innovation requires consumer insights and technology advancements that lead to product improvements, improved marketing and merchandising programs and game-changing inventions that create new brands and categories.
Productivity improvement is critical to delivering our balanced top-line growth, bottom-line growth and value creation objectives.
Productivity improvement and sales growth reinforce and fuel each other.
We are driving productivity improvement across all elements of cost, including cost of goods sold, marketing and promotional expenses and nonmanufacturing overhead.
Productivity improvements and cost savings are being reinvested in product and packaging improvements, brand awareness-building advertising and trial-building sampling programs, increased sales coverage and R&D programs.
We are improving operational effectiveness and organizational culture through enhanced clarity of roles and responsibilities, accountability and incentive compensation programs.
The Company has undertaken an effort to focus and strengthen its business portfolio to compete in categories and with brands that are structurally attractive and that play to P&G's strengths.
The ongoing portfolio of businesses consists of 10 product categories.
These are categories where P&G has leading market positions, strong brands and consumer-meaningful product technologies.
We believe these strategies are right for the long-term health of the Company and our objective of delivering total shareholder return in the top one-third of our peer group.
The Company expects the delivery of the following long-term annual financial targets will result in total shareholder returns in the top third of the competitive peer group: ?
Organic sales growth above market growth rates in the categories and geographies in which we compete; ?
Core EPS growth of mid-to-high single digits; and ?
Adjusted free cash flow productivity of 90% or greater.
In periods with significant macroeconomic pressures, we intend to maintain a disciplined approach to investing so as not to sacrifice the long-term health of our businesses to meet shortterm objectives in any given year.


| Years Ended December 31, | 2009 | (in millions, except per share amounts) | Numerator: | Net income (loss) attributable to Ameriprise Financial | Denominator: | Basic: Weighted-average common shares outstanding | Effect of potentially dilutive nonqualified stock options and other share-based awards | Diluted: Weighted-average common shares outstanding | Earnings (loss) per share attributable to Ameriprise Financial common shareholders: | Basic | Diluted |


Corporate Offices Eastman Chemical Company 100 North Eastman Road P.  O.
Box 511 Kingsport, TN 37662-5075 U. S. A.  http:/ /www.
eastman.
com Stock Transfer Agent and Registrar Inquiries and changes to stockholder accounts should be directed to our transfer agent: American Stock Transfer & Trust Company 59 Maiden Lane New York, NY 10038 In the United States: 800-937-5449 Outside the United States: (1) 212-936-5100 or (1) 718-921-8200 http:/ /www.
amstock.
com Annual Meeting Toy F.  Reid Employee Center Kingsport, Tennessee Thursday, May 5, 2005 11:30 a. m. , (ET) Eastman Stockholder Information 877-EMN-INFO (877-366-4636) http:/ /www.
eastman.
com Annual Report on Form 10-K Copies of the Annual Report on Form 10-K for 2004 are available to stockholders without charge by calling 423-229-5466 or by writing to: Eastman Chemical Company P.  O.
Box 511, Building 226 Kingsport, TN 37662-5075 U. S. A.
This information is also available through Eastmans World Wide Web address, http:/ /www.
eastman.
com, in the investor information section.
Stock Exchange Listing Eastman Chemical Company common stock is listed and traded on the New York Stock Exchange under the ticker symbol EMN.
Most newspaper stock tables list the Companys stock as EmanChm.
 Dividends Quarterly dividends on common stock, if declared by the Board of Directors, are usually paid on or about the first business day of the month following the end of each quarter.
Dividends declared were $1.76 in 2004, 2003 and 2002.
Stockholders of record at year-end 2004: 33,709 Shares outstanding at year-end 2004: 79,336,711 Employees at year-end 2004: 12,000


| Year Ended December 31 2005 2004 2003 | (In millions) | Net realized gains (losses) on fixed maturity and equity securities: | Fixed maturity securities: | Gross realized gains | Gross realized losses | Net realized gains (losses) on fixed maturity securities | Equity securities: | Gross realized gains | Gross realized losses | Net realized gains (losses) on equity securities | Net realized gains (losses) on fixed maturity and equity securities |


NOTE 20 COMMITMENTS In 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, 2016 and December 31, 2015, respectively.
Table 98: Commitments to Extend Credit and Other Commitments


| In billions of dollars DTA balance December 31, 2009 DTA balance December 31, 2008 | U.S. Federal | Net operating loss (NOL) | Foreign tax credit (FTC) | General business credit (GBC) | Future tax deductions and credits | Other | Total U.S. federal | State and local | New York NOLs | Other State NOLs | Future tax deductions | Total State and local | Foreign | APB 23 subsidiary NOLs | Non-APB 23 subsidiaryNOLs | Future tax deductions | Total foreign | Total | Reporting unit-1 | North America Regional Consumer Banking | EMEA Regional Consumer Banking | Asia Regional Consumer Banking | Latin America Regional Consumer Banking | Securities and Banking | Transaction Services | Brokerage and Asset Management | Local Consumer Lending—Cards | In millions of dollars | Net interest revenue | Non-interest revenue | Total revenues, net of interest expense | Total operating expenses | Net credit losses | Credit reserve build/(release) | Provisions for benefits and claims | Provision for loan losses and for benefits and claims | Income (loss) from continuing operations before taxes | Income taxes (benefits) | Income (loss) from continuing operations | Net income (loss) attributable to noncontrolling interests | Net income (loss) | Average assets(in billions of dollars) | Average deposits(in billions of dollars) | Net credit losses as a percentage of average loans | Revenue bybusiness | Retail banking | Citi-branded cards | Total | Income (loss) from continuing operations by business | Retail banking | Citi-branded cards | Total |


| 2011 2010 2009 2008 2007 | Income Statement Data | Earned premiums | Fee income | Net investment income (loss): | Securities available-for-sale and other | Equity securities, trading | Total net investment income (loss) | Net realized capital losses: | Total other-than-temporary impairment (“OTTI”) losses | OTTI losses recognized in other comprehensive income | Net OTTI losses recognized in earnings | Net realized capital losses, excluding net OTTI losses recognized in earnings | Total net realized capital gains (losses) | Other revenues | Total revenues | Benefits, losses and loss adjustment expenses | Benefits, losses and loss adjustment expenses — returns credited on internationalvariable annuities | Amortization of deferred policy acquisition costs and present value of future profits | Insurance operating costs and other expenses | Interest expense | Goodwill impairment | Total benefits, losses and expenses | Income (loss) from continuing operations before income taxes | Income tax expense (benefit) | Income (loss) from continuing operations, net of tax | Income (loss) from discontinued operations, net of tax | Net income (loss) | Preferred stock dividends and accretion of discount | Net income (loss) available to common shareholders | Balance Sheet Data | Separate account assets | Total assets | Total debt (including capital lease obligations) | Separate account liabilities | Common equity, excluding AOCI | Preferred Stock | AOCI, net of tax | Total stockholders’ equity | Income (loss) from continuing operations, net of tax, available to commonshareholders per common share | Basic | Diluted | Net income (loss) available to common shareholders per common share | Basic | Diluted | Cash dividends declared per common share | Other Data | Total revenues, excluding net investment income on equity securities, trading | Unlock benefit (charge), after-tax | Total investments, excluding equity securities, trading |


| Share as a % of U.S. Net Sales | $0 to $2.7 billion | $2.7 billion to $3.2 billion | $3.2 billion to $3.7 billion | $3.7 billion to $4.0 billion | $4.0 billion to $4.2 billion | In excess of $4.2 billion |


| Gross amounts not offset inthe consolidated balancesheets | (dollar amounts in thousands) | Offsetting of Financial Assets and Derivative Assets | December 31, 2016 | December 31, 2015 |


| Con Edison CECONY | (Millions of Dollars) | Service cost – including administrative expenses | Interest cost on projected benefit obligation | Expected return on plan assets | Recognition of net actuarial loss | Recognition of prior service costs | NET PERIODIC BENEFIT COST | Amortization of regulatory asset* | TOTAL PERIODIC BENEFIT COST | Cost capitalized | Reconciliation to rate level | Cost charged to operating expenses |


| 2010 2009 2008 | Income | (in millions, except per share amounts) | Basic earnings per share | Income (loss) from continuing operations attributable to the Closed Block Business | Less: Direct equity adjustment | Income (loss) from continuing operations attributable to the Closed Block Business available to holders of Class B Stock afterdirect equity adjustment |


| 2009 2008 2007 | Dividend yield | Expected volatility | Risk-free interest rate | Expected option lives (in years) | Shares (in thousands) | Stock Options and Stock Appreciation Rights: | Outstanding at December 31, 2007 | Granted | Exercised | Forfeited or expired | Outstanding at December 31, 2008 | Granted | Exercised | Forfeited or expired | Outstanding at December 31, 2009 | Exercisable at December 31, 2009 |


| Millions of Dollars 2009 2008 2007 | Agricultural | Automotive | Chemicals | Energy | Industrial Products | Intermodal | Total freight revenues | Other revenues | Total operating revenues |


| December 31, 2011 | Public | Carrying amount | (in millions) | Three months or less | Greater than three to six months | Greater than six to nine months | Greater than nine to twelve months | Greater than twelve to twenty-four months | Greater than twenty-four to thirty-six months | Greater than thirty-six months | Total fixed maturities, available-for-sale |


Inventory market valuation reserve (‘‘IMV’’) is established to reduce the cost basis of inventories to current market value.
Generally, we will establish an IMV reserve when crude oil prices fall below $22 per barrel.
The 2002 results of operations include credits to income from operations of $71 million, reversing the IMV reserve at December 31, 2001.


| As of December | $ in millions | Corporate loans | Loans to private wealth management clients | Loans backed by commercial real estate | Loans backed by residential real estate | Other loans | Total loans receivable, gross | Allowance for loan losses | Total loans receivable |


Exposure to interest rate risk is reflected in the variation of forecasted net interest income across scenarios.
Key assumptions in this simulation analysis relate to the behavior of interest rates and spreads, the changes in product balances and the behavior of loan and deposit clients in different rate environments.
The most material of these behavioral assumptions relate to the repricing characteristics and balance fluctuations of deposits with indeterminate (i. e. , non-contractual) maturities as well as the pace of mortgage prepayments.
Assessments are periodically made by running sensitivity analysis of the impact of key assumptions.
The results of these analyses are reported to the Asset Liability Committee.
As the future path of interest rates cannot be known in advance, we use simulation analysis to project net interest income under various interest rate scenarios including a ?most likely?
(implied forward) scenario as well as a variety of deliberately extreme and perhaps unlikely scenarios.
These scenarios may assume gradual ramping of the overall level of interest rates, immediate shocks to the level of rates and various yield curve twists in which movements in short- or long-term rates predominate.
Generally, projected net interest income in any interest rate scenario is compared to net interest income in a base case where market forward rates are realized.
The table below reports net interest income exposures against a variety of interest rate scenarios.
Our policies involve measuring exposures as a percentage change in net interest income over the next year due to either instantaneous or gradual parallel changes in rates relative to the market implied forward yield curve.
With rates rising from historically low levels due to Federal Open Market Committee rate increases, exposure to falling rates has increased.
As the following table illustrates, our balance sheet is asset-sensitive: net interest income would benefit from an increase in interest rates.
Exposure to a decline in interest rates is within limit.
While an instantaneous and severe shift in interest rates was used in this analysis, we believe that any actual shift in interest rates would likely be more gradual and would therefore have a more modest impact as demonstrated in the following table.
The table below presents the sensitivity of net interest income to various parallel yield curve shifts from the market implied forward yield curve:


| Unrealized Gains (Losses) on Energy Marketing and Risk Management Assets/Liabilities (Thousands of dollars) UnrealizedHoldingGains (Losses) onInvestmentSecurities Pension and Postretirement Benefit Plan Obligations Accumulated Other Comprehensive Income (Loss) | December 31, 2006 | Other comprehensive income (loss) | December 31, 2007 | Other comprehensive income (loss) | December 31, 2008 |


Senior Notes In the fourth quarter of 2012, we issued $6.2 billion aggregate principal amount of senior unsecured notes for general corporate purposes and to repurchase shares of our common stock pursuant to our authorized common stock repurchase program.
In the third quarter of 2011, we issued $5.0 billion aggregate principal amount of senior unsecured notes, primarily to repurchase shares of our common stock pursuant to our authorized common stock repurchase program, and for general corporate purposes.
Our senior notes pay a fixed rate of interest semiannually.
We may redeem our senior notes, in whole or in part, at any time at our option at specified redemption prices.
The senior notes rank equally in right of payment with all of our other existing and future senior unsecured indebtedness and will effectively rank junior to all liabilities of our subsidiaries.


| Years Ended | September 24, 2011 | Amount | Product Sales | Breast Health | Diagnostics | GYN Surgical | Skeletal Health | $1,478,340 |


PART II Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
The Company’s common stock is listed on the New York Stock Exchange.
Prior to the Separation of Alcoa Corporation from the Company, the Company’s common stock traded under the symbol “AA.
” In connection with the separation, on November 1, 2016, the Company changed its stock symbol and its common stock began trading under the symbol “ARNC.
” On October 5, 2016, the Company’s common shareholders approved a 1-for-3 reverse stock split of the Company’s outstanding and authorized shares of common stock (the “Reverse Stock Split”).
As a result of the Reverse Stock Split, every three shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in the par value per share.
The Reverse Stock Split reduced the number of shares of common stock outstanding from approximately 1.3 billion shares to approximately 0.4 billion shares, and proportionately decreased the number of authorized shares of common stock from 1.8 billion to 0.6 billion shares.
The Company’s common stock began trading on a Reverse Stock Split-adjusted basis on October 6, 2016.
On November 1, 2016, the Company completed the Separation of its business into two independent, publicly traded companies: the Company and Alcoa Corporation.
The Separation was effected by means of a pro rata distribution by the Company of 80.1% of the outstanding shares of Alcoa Corporation common stock to the Company’s shareholders.
The Company’s shareholders of record as of the close of business on October 20, 2016 (the “Record Date”) received one share of Alcoa Corporation common stock for every three shares of the Company’s common stock held as of the Record Date.
The Company retained 19.9% of the outstanding common stock of Alcoa Corporation immediately following the Separation.
See disposition of retained shares in Note C to the Consolidated Financial Statements in Part II Item 8 of this Form 10-K.
The following table sets forth, for the periods indicated, the high and low sales prices and quarterly dividend amounts per share of the Company’s common stock as reported on the New York Stock Exchange, adjusted to take into account the Reverse Stock Split effected on October 6, 2016.
The prices listed below for those dates prior to November 1, 2016 reflect stock trading prices of Alcoa Inc.  prior to the Separation of Alcoa Corporation from the Company on November 1, 2016, and therefore are not comparable to the Company’s post-Separation prices.


| 2014 2013 | In millions | January 1 | Reserve adjustments, net | Losses – loan repurchases and private investor settlements | Agency settlements | December 31 | December 31, 2014 | Dollars in millions | Home equity | Temporary Modifications | Permanent Modifications | Total home equity | Residential Mortgages | Permanent Modifications | Non-Prime Mortgages | Permanent Modifications | Residential Construction | Permanent Modifications | Total Consumer Real Estate Related Loan Modifications |


| As of or for the year ended December 31, Average | (in millions) | Commercial paper: | Wholesale funding | Client cash management | Total commercial paper | Obligations of Firm-administered multi-seller conduits(a) | Other borrowed funds | Securities loaned or sold under agreements to repurchase: | Securities sold under agreements to repurchase | Securities loaned(b) | Total securities loaned or sold under agreements to repurchase(b)(c)(d)(e) | Senior notes | Trust preferred securities | Subordinated debt | Structured notes | Total long-term unsecured funding | Credit card securitization(a) | Other securitizations((a)(f) | FHLB advances | Other long-term secured funding(g) | Total long-term secured funding | Preferred stock(h) | Common stockholders’ equity(h) |


| Years Ended December 31, 2014/2013 2013/2012 | (Dollars in millions) | Gross written premiums | Net written premiums | Premiums earned | Incurred losses and LAE | Commission and brokerage | Other underwriting expenses | Underwriting gain (loss) | Point Chg | Loss ratio | Commission and brokerage ratio | Other underwriting expense ratio | Combined ratio | (NM, not meaningful) | (Some amounts may not reconcile due to rounding.) |


The increase in net periodic pension expense in 2017 is attributable to higher amortization compared to the prior year.
Beginning in 2016, the Company refined the method used to determine the service and interest cost components of pension expense for its U. S.  retirement plans.
The specific spot rates along the yield curve, rather than the single weighted-average rate previously used, are applied to the projected cash flows to provide more precise measurement of these costs.
This is a change in estimate which has
Total cash paid for all businesses for the fiscal year ended 2018 was $2.2 billion, net of cash acquired.
The purchase price of the 2018 acquisitions was preliminarily allocated to assets and liabilities as follows.


| December 31, 2010 December 31, 2009 | Carrying amount | (in millions) | Assets (liabilities) | Fixed maturities, available-for-sale | Fixed maturities, trading | Equity securities, available-for-sale | Equity securities, trading | Mortgage loans | Policy loans | Other investments | Cash and cash equivalents | Derivative assets | Separate account assets | Cash collateral | Investment-type insurance contracts | Short-term debt | Long-term debt | Separate account liabilities | Derivative liabilities | Bank deposits | Cash collateral payable | Other liabilities |


| Range ofExercise Prices Shares Weighted-AverageRemainingContractural Life in Years Outstanding Weighted-AverageExercise Price | Outstanding | $10.84 - $11.50 | $11.51 - $18.55 | $18.56 - $21.53 | $21.54 - $23.40 | $23.41 - $23.65 | $23.66 - $24.97 | $24.98 - $25.00 | $25.01 - $25.65 | $25.66 - $25.72 | $25.73 - $28.52 | $ 10.84 - $28.52 |


| 2007 2006 2005 | Basic net income available for common shareholders | Minority interest in earnings of common unitholders | Diluted net income available for common shareholders | Weighted average number of common shares outstanding | Weighted average partnership Units outstanding | Dilutive shares for stock-based compensation plans -1 | Weighted average number of common shares and potential dilutive common equivalents |


The 0.5% of revenue gross profit rate increase for fiscal 2009 was due to increases in both our Domestic and International segments’ gross profit rates.
The acquisition of Best Buy Europe increased our gross profit rate by 0.4% of revenue for fiscal 2009.
For further discussion of each segment’s gross profit rate changes, see Segment Performance Summary, below.
The 1.5% of revenue SG&A rate increase for fiscal 2009 was due to increases in both our Domestic and International segments’ SG&A rates.
The acquisition of Best Buy Europe increased our SG&A rate by 0.7% of revenue for fiscal 2009.
For further discussion of each segment’s SG&A rate changes, see Segment Performance Summary, below.
Our operating income in fiscal 2009 also included restructuring and goodwill and tradename impairment charges recorded in the fiscal fourth quarter.
The $78 million restructuring charge related primarily to employee termination benefits offered pursuant to voluntary and involuntary separation programs at our corporate headquarters and certain other locations.
The restructuring charges were recorded as a result of measures we took to create a more effective and efficient operating cost structure and to support our fiscal 2010 strategic priorities.
The $66 million goodwill and tradename impairment charges related to our Speakeasy business and were recorded as a result our annual goodwill impairment test.


| 2008 2007 2006 | Risk-free interest rate | Expected option life (years) | Expected volatility |


Corporate cash is the primary source of liquidity at the parent company.
We define corporate cash as cash held at the parent company as well as cash held in certain subsidiaries that can distribute cash to the parent company without any regulatory approval.
We believe corporate cash is a useful measure of the parent companys liquidity as it is the primary source of capital above and beyond the capital deployed in our regulated subsidiaries.
Corporate cash can fluctuate in any given quarter and is impacted primarily by tax settlements, approval and timing of subsidiary dividends, debt service costs and other overhead cost sharing arrangements.
We target corporate cash to be two times our annual debt service, or approximately $330 million.
From the level of corporate cash at December 31, 2011, we expect that it will decline generally in line with our corporate interest expense.
However, the parent company has approximately $0.5 billion in deferred tax assets, which will ultimately become sources of corporate cash as the parents subsidiaries reimburse the parent for the use of its deferred tax assets.


| High Low Close Declared Dividends | 2016 | 1stQuarter | 2ndQuarter | 3rdQuarter | 4thQuarter | 2017 | 1stQuarter | 2ndQuarter | 3rdQuarter | 4thQuarter |


| Ship construction $626 | Aircraft manufacturing and outfitting | Mobile communication products | Pre-owned aircraft | Other, net | Total increase |


| Year Ended December 31, | (dollars in millions) | Salaries and employee benefits | Outside services | Occupancy | Equipment expense | Amortization of software | Other operating expense | Noninterest expense |


| Table 41 Commercial Utilized Reservable Criticized Exposure December 31 | 2011 | (Dollars in millions) | U.S. commercial | Commercial real estate | Commercial lease financing | Non-U.S. commercial | 25,920 | U.S. small business commercial | Total commercial utilized reservable criticized exposure |


| Project Name Date Completed Sales Proceeds (in millions) Location | CILCORP/Medina Valley | AES Ecogen/AES Mt. Stuart | Mountainview | Kelvin | Songas | AES Barry Limited | AES Haripur Private Ltd/AES Meghnaghat Ltd | AES MtKvari/AES Khrami/AES Telasi | Medway Power Limited/AES Medway Operations Limited | AES Oasis Limited |


THE GOLDMAN SACHS GROUP, INC.  AND SUBSIDIARIES Notes to Consolidated Financial Statements Impact of Credit Spreads on Borrowings The table below presents the net gains/(losses) attributable to the impact of changes in the firms own credit spreads on borrowings for which the fair value option was elected.
The firm calculates the fair value of borrowings by discounting future cash flows at a rate which incorporates the firms credit spreads.


Effective Tax Rate The effective tax rate equals the income tax provision divided by income from continuing operations before taxes.
Refer to Note 22, Income Taxes, to the consolidated financial statements for details on factors affecting the effective tax rate.2014 vs.  2013 On a GAAP basis, the effective tax rate was 27.0% and 22.8% in 2014 and 2013, respectively.
The effective tax rate was higher in the current year primarily due to the goodwill impairment charge of $305.2, which was not deductible for tax purposes, and the Chilean tax reform enacted in September 2014 which increased income tax expense by $20.6.
These impacts were partially offset by an income tax benefit of $51.6 associated with losses from transactions and a tax election in a non-U.
S.  subsidiary.
The prior year rate included income tax benefits of $73.7 related to the business restructuring and cost reduction plans and $3.7 for the advisory costs.
Refer to Note 4, Business Restructuring and Cost Reduction Actions; Note 9, Goodwill; Note 22, Income Taxes; and Note 23, Supplemental Information, to the consolidated financial statements for details on these transactions.
On a non-GAAP basis, the effective tax rate was 24.0% and 24.2% in 2014 and 2013, respectively.2013 vs.  2012 On a GAAP basis, the effective tax rate was 22.8% and 21.9% in 2013 and 2012, respectively.
The effective rate in 2013 includes income tax benefits of $73.7 related to the business restructuring and cost reduction plans and $3.7 for the advisory costs.
The effective rate in 2012 includes income tax benefits of $105.0 related to the business restructuring and cost reduction plans, $58.3 related to the second quarter Spanish tax ruling, and $3.7 related to the customer bankruptcy charge, offset by income tax expense of $43.8 related to the first quarter Spanish tax settlement and $31.3 related to the gain on the previously held equity interest in DA NanoMaterials.
Refer to Note 4, Business Restructuring and Cost Reduction Actions; Note 5, Business Combinations; Note 22, Income Taxes; and Note 23, Supplemental Information, to the consolidated financial statements for details on these transactions.
On a non-GAAP basis, the effective tax rate was 24.2% in both 2013 and 2012.


Other Other reported earnings of $376 million for 2011 compared with earnings of $386 million for 2010.
The decrease in earnings primarily reflected the noncash charge related to the redemption of trust preferred securities in the fourth quarter of 2011 and the gain related to the sale of a portion of PNCs BlackRock shares in 2010 partially offset by lower integration costs in 2011.


| Three Months Ended | Dec. 31, 2014 | (Unaudited, in thousands) | Cost of revenue | Research and development | Sales and marketing | General and administrative | Total stock-based compensation expense |


(m) Foreign Currency Translation Prior to the second quarter of 2012, operations carried out in Mexico used the U. S.  Dollar as the functional currency.
Effective April 1, 2012, the Company changed the functional currency of its Mexico operations to the Mexican Peso.
The Company believes that the completion of a second plant in Mexico and growth in sales to the local Mexican market indicated a significant change in the economic facts and circumstances that justified the change in the functional currency.
The effects of the change in functional currency were not significant to the Companys consolidated financial statements.
The Companys subsidiaries that operate outside the United States use their local currency as the functional currency.
The functional currency is translated into U. S.  Dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period.
The translation adjustments are deferred as a separate component of stockholders equity, within accumulated other comprehensive income (deficit).
Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of operations.


| Reporting Segment Fiscal 2009   Net Sales Fiscal 2008   Net Sales % Increase | Consumer Foods | Commercial Foods | Total |


| 2015 2016 2017 2018 2019 Thereafter Total | Recorded Obligations: | Expected environmental liabilities:(a) | Final capping, closure and post-closure | Environmental remediation | 147 | Debt payments(b),(c),(d) | Unrecorded Obligations:(e) | Non-cancelable operating lease obligations | Estimated unconditional purchase obligations(f) | Anticipated liquidity impact as of December 31, 2014 | 2004 | (In thousands) | Net income | Depreciation and amortization | Interest expense | Other interest income | EBITDA | Gain loss on sale of real estate | Loss on abandoned developments held for sale | Adjusted EBITDA | Balance, December 31, 2007 | Additions during period—depreciation and amortization expense | Deductions during period—disposition and retirements of property | Balance, December 31, 2008 | Additions during period—depreciation and amortization expense | Deductions during period—disposition and retirements of property | Balance, December 31, 2009 | Additions during period—depreciation and amortization expense | Deductions during period—disposition and retirements of property | Balance, December 31, 2010 |


| Gross Amount | Amounts of unrecognized tax benefits at January 1, 2007 | Decreases as a result of tax positions taken in a prior period | Increases as a result of tax positions taken in a prior period | Amount of unrecognized tax benefit at December 31, 2007 | Amount of decreases due to lapse of the applicable statute of limitations | Amount of decreases due to change of position |


| December 31, 2015 December 31, 2014 | Dollars in millions | Temporary modifications (a) | Permanent modifications | Home equity | Residential real estate | Total permanent modifications | Total consumer real estate related loan modifications | Year ended December 31 | Dollars in millions, except per share data | Summary of Operations | Interest income | Interest expense | Net interest income | Noninterest income | Total revenue | Provision for credit losses | Noninterest expense | Income before income taxes and noncontrolling interests | Income taxes | Net income | Less: Net income attributable to noncontrolling interests | Preferred stock dividends | Preferred stock discount accretion and redemptions | Net income attributable to common shareholders | Per Common Share | Basic earnings | Diluted earnings | Book value | Cash dividends declared | Effective tax rate (a) |


Additional Considerations Our BDS business includes a variety of development programs which have complex design and technical challenges.
Many of these programs have cost-type contracting arrangements.
In these cases, the associated financial risks are primarily in reduced fees, lower profit rates or program cancellation if cost, schedule or technical performance issues arise.
Examples of these programs include Ground-based Midcourse Defense (GMD), Proprietary and Space Launch Systems programs.
Some of our development programs are contracted on a fixed-price basis.
Many of these programs have highly complex designs.
As technical or quality issues arise during development, we may experience schedule delays and cost impacts, which could increase our estimated cost to perform the work or reduce our estimated price, either of which could result in a material charge or otherwise adversely affect our financial condition.
These programs are ongoing, and while we believe the cost and fee estimates incorporated in the financial statements are appropriate, the technical complexity of these programs creates financial risk as additional completion costs may become necessary or scheduled delivery dates could be extended, which could trigger termination provisions, the loss of satellite in-orbit incentive payments, or other financially significant exposure.
These programs have risk for reach-forward losses if our estimated costs exceed our estimated contract revenues.
Examples of significant fixed-price development programs include Airborne Early Warning and Control (AEW&C), Family of Advanced Beyond Line-of-Sight Terminals (FAB-T), India P-8I, Saudi F-15, USAF KC-46A Tanker, and commercial and military satellites.


| Payments Due by Fiscal Year | In Millions | Long-term debt (a) | Accrued interest | Operating leases (b) | Capital leases | Purchase obligations (c) | Total contractual obligations | Other long-term obligations (d) | Total long-term obligations |


| ($ in millions) 2013 2012 2011 | Total Sales | Pharmaceutical | Januvia | Zetia | Remicade | Gardasil | Janumet | Isentress | Vytorin | Nasonex | ProQuad/M-M-RII/Varivax | Singulair | Animal Health | Consumer Care | Other Revenues-1 |


| Years ended December 31, | 2014 | Balance at beginning of period | Change in related noncontrolling interest balance | Changes in redemption value of redeemable noncontrolling interests: | Additions | Redemptions and reclassifications | Redemption value adjustments | Balance at end of period |


| Number of Options WeightedAverageExercise Price | Options outstanding, December 31, 2005 | Granted | Exercised | Forfeited | Options outstanding, December 31, 2006 | Granted | Exercised | Forfeited | Options outstanding, December 31, 2007 | Granted | Exercised | Forfeited | Options outstanding, December 31, 2008 |


12.
Commitments and Contingencies (continued) acquisition, Barclays was contractually obligated to continue providing counterparty default indemnification to several BlackRock securities lending clients through December 1, 2012.
BlackRock assumed these indemnification obligations prior to or upon the expiration of Barclays indemnification obligation.
As of December 31, 2012, the Company indemnified certain of its clients for loan balances of approximately $99.5 billion.
The fair value of these indemnifications was not material to the consolidated statements of financial condition as of December 31, 2012.
The Company expects indemnified balances to continue to increase over time.
Under the transaction agreement in the BGI Transaction, the Company agreed to indemnify Barclays for losses it may incur arising from (1) breach by the Company of certain representations, (2) breach by the Company of any covenant in the agreement, (3) liabilities of the entities acquired in the transaction other than liabilities assumed by Barclays or for which it is providing indemnification, and (4) certain taxes.
Management believes that the likelihood of any liability arising under the BGI Transaction indemnification provisions is remote.
Management cannot estimate any potential maximum exposure due both to the remoteness of any potential claims and the fact that items that would be included within any such calculated claim would be beyond the control of BlackRock.
Consequently, no liability has been recorded on the consolidated statements of financial condition.13.
Stock-Based Compensation The components of stock-based compensation expense are as follows:


| Power Plant Market InServiceYear Acquired Location Capacity-Reactor Type LicenseExpirationDate | Pilgrim | FitzPatrick | Indian Point 3 | Indian Point 2 | Vermont Yankee | Palisades |


Net Investment Hedges We enter into foreign currency forward contracts to hedge non-U.
S.  Dollar net investments in foreign subsidiaries against adverse changes in foreign exchange rates.
We assess whether the hedging relationship is highly effective in achieving offsetting changes in the value of the hedge and hedged item by qualitatively verifying that the critical terms of the hedge and hedged item match at the inception of the hedging relationship and on an ongoing basis.
Net investment hedge derivatives are classified as foreign exchange contracts.
There were no components of derivative gains or losses excluded from the assessment of the hedge effectiveness for all periods presented.
For 2016, 2015 and 2014, there was no net investment hedge ineffectiveness.
Net gains on net investment hedge derivatives recognized in OCI were $186 million in 2016, $60 million in 2015 and $54 million in 2014.


| 25 Basis Point Increase 25 Basis Point Decrease | Pension Plans | Discount Rate: | Effect on net periodic benefit cost | Effect on projected benefit obligation | Return on Assets: | Effect on net periodic benefit cost | Postretirement Medical Plans | Discount Rate: | Effect on net periodic benefit cost | Effect on accumulated postretirement benefit obligation | Health Care Cost Trend Rate: | Effect on net periodic benefit cost | Effect on accumulated postretirement benefit obligation |


(3) Yield/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
Table 6 - Consolidated Average Balance Sheet and Net Interest Margin Analysis (Continued) (3) (dollar amounts in thousands)


| December 31, | 2011 | Shares outstanding, beginning | Vested restricted stock and restricted stock units, net (a) | Issuance related to ESPP | Issuance related to SARS exercise | Shares repurchased | Shares outstanding, ending |


| Total Reserves | Gross [1] [2] | Direct | Assumed Reinsurance | London Market | Total | Ceded | Net |


| U.K. U.S. Other | Combined experience loss | Amortization period (in years) | Estimated 2014 amortization of loss |


| Three Months Ended | March 31, | (Dollars in thousands, except per share amounts) | Year Ended December 31, 2005: | Interest income | Interest expense | Net interest income | Provision for/(recovery of) loan and lease losses | Noninterest income | Noninterest expense | Minority interest in net (income) losses of consolidated affiliates | Income before income tax expense | Income tax expense | Net income | Earnings per common share—basic | Earnings per common share—diluted | Year Ended December 31, 2004: | Interest income | Interest expense | Net interest income | Provision for/(recovery of) loan and lease | Noninterest income | Noninterest expense | Minority interest in net (income) of consolidated affiliates | Income before income tax expense | Income tax expense | Net income | Earnings per common share—basic | Earnings per common share—diluted |


| (In Millions) | 2002 net revenue | Volume/weather | Fuel write-offs in 2002 | Net wholesale revenue | Base rate decreases | NISCO gain recognized in 2002 | Rate refund provisions | Other | 2003 net revenue |


| Year Ended December 31, 2017 | (in millions) | Current income taxes | Federal | State | Foreign | Total current income taxes | Deferred income taxes | Federal | State | Total deferred income taxes(a) (b) | Investment tax credit amortization | Income tax expense from continuing operations | Tax benefit from discontinued operations | Total income tax expense included in Consolidated Statements of Operations |


| 2010 2009 2008 | Number of shares | Outstanding nonvested shares, beginning of year | Shares granted | Shares vested | Shares forfeited | Outstanding nonvested shares, end of year | Issued | Balance, January 1, 2001 | Employee stock purchase plan | Shares granted to Directors | Shares sold to optionees | Balance, December 31, 2001 | Employee stock purchase plan | Shares granted to Directors | Shares sold to optionees | Acquisition of Technoguide | Balance, December 31, 2002 | Employee stock purchase plan | Shares granted to Directors | Shares sold to optionees | Balance, December 31, 2003 |


| Revenue Mix Summary Year Ended Comparable Store Sales Summary Year Ended | February 27, 2010 | Consumer electronics | Home office | Entertainment | Appliances | Services | Other | Total |


| Instrument Amount of gain (loss)recognized in othercomprehensive income Income Statement location Amount of gain reclassified fromAOCI into income | 2013 | Electricity swaps and options | 2012 | Electricity swaps and options | 2011 | Electricity swaps and options |


| Years Ended December 31, | 2008 | Cash dividends per common share: | Declared(a) | Paid | Total cash dividends (in millions): | Declared(a) | Paid |


| At December 31, | (Dollars in thousands) | Gross basis: | Beginning of period reserves | Incurred losses | Paid losses | End of period reserves | Net basis: | Beginning of period reserves | Incurred losses | Paid losses | End of period reserves | (Dollars in thousands) | Balance at January 1 | Additions based on tax positions related to the current year | Additions for tax positions of prior years | Reductions for tax positions of prior years | Settlements with taxing authorities | Lapses of applicable statutes of limitations | Balance at December 31 |


| As of Change | January 3,2015 | (In millions) | Cash, cash equivalents and short-term investments | Net working capital |


| Year ended December 31 - dollars in millions 2011 2010 2009 2008 2007 | Allowance for loan and lease losses – January 1 | Charge-offs | Commercial | Commercial real estate | Equipment lease financing | Consumer (a) | Residential real estate | Total charge-offs | Recoveries | Commercial | Commercial real estate | Equipment lease financing | Consumer (a) | Residential real estate | Total recoveries | Net charge-offs | Provision for credit losses (b) | Acquired allowance – National City | Other | Adoption of ASU 2009-17,Consolidations | Net change in allowance for unfunded loan commitments and letters ofcredit | Allowance for loan and lease losses – December 31 | Allowance as a percent of December 31: | Loans | Nonperforming loans | As a percent of average loans | Net charge-offs | Provision for credit losses | Allowance for loan and lease losses | Allowance as a multiple of net charge-offs |


Investment Management Fees Investment management fees are generally calculated under contractual arrangements with our SIPs and the products for which we provide sub-advisory services as a percentage of the market value of AUM.
Annual rates vary by investment objective and type of services provided.
Rates for products sold outside of the U. S.  are generally higher than for U. S.  products because they are structured to compensate for certain distribution costs.
Investment management fees decreased $856.1 million in fiscal year 2016 primarily due to a 14% decrease in average AUM and the impact of a lower effective fee rate.
Investment management fees decreased $237.9 million in fiscal year 2015 primarily due to a 2% decrease in average AUM and the impact of a lower effective fee rate.
The decrease in average AUM in fiscal year 2016 occurred in all sales regions and primarily in the global/international and hybrid investment objectives.
The decrease in average AUM in fiscal year 2015 primarily occurred in the international sales regions and in the global/ international investment objectives, partially offset by slight increases in the other investment objectives.
Our effective investment management fee rate (investment management fees divided by average AUM) was 59.7, 61.3 and 62.7 basis points for fiscal years 2016, 2015 and 2014.
The rate decrease in fiscal year 2016 was primarily due to higher weightings of AUM in U. S.  products and in lower fee products in the global/international investment objectives in the Europe, Middle East and Africa and Asia-Pacific sales regions, partially offset by higher performance fees.
The rate decrease in fiscal year 2015 was primarily due to higher weightings of AUM in U. S.  products and in lower fee products in the global/international investment objectives in the Europe, Middle East and Africa sales region, as well as lower performance fees.
Performance-based investment management fees were $26.5 million, $19.8 million and $50.9 million for fiscal years 2016, 2015 and 2014.
The higher fees in fiscal year 2014 were primarily related to fund of hedge funds products.
U. S.  industry asset-weighted average management fee rates were as follows1 :


Interest Expense  Interest expense increased in 2014 versus 2013 due to an increased weightedaverage debt level of $10.8 billion in 2014 from $9.6 billion in 2013, which more than offset the impact of the lower effective interest rate of 5.3% in 2014 versus 5.7% in 2013.
Interest expense decreased in 2013 versus 2012 due to a lower effective interest rate of 5.7% in 2013 versus 6.0% in 2012.
The increase in the weighted-average debt level to $9.6 billion in 2013 from $9.1 billion in 2012 partially offset the impact of the lower effective interest rate.
Income Taxes  Higher pre-tax income increased income taxes in 2014 compared to 2013.
Our effective tax rate for 2014 was 37.9% compared to 37.7% in 2013.
Higher pre-tax income increased income taxes in 2013 compared to 2012.
Our effective tax rate for 2013 was 37.7% compared to 37.6% in 2012.


| 2011 2010 | Beginning balance | Gross increases in unrecognized tax benefits – prior year tax positions | Gross decreases in unrecognized tax benefits – prior year tax positions | Gross increases in unrecognized tax benefits – current year tax positions | Settlements with taxing authorities | Lapse of statute of limitations | Foreign exchange gains and losses | Ending balance |


Significant 2015 Developments and Outlook ?
Con Edison reported 2015 net income of $1,193 million or $4.07 a share compared with $1,092 million or $3.73 a share in 2014.
Adjusted earnings were $1,196 million or $4.08 a share in 2015 compared with $1,140 million or $3.89 a share in 2014.
See “Results of Operations” in Item 7 and “Non-GAAP Financial Measure” below.  ?
In 2015, the Utilities invested $2,595 million to upgrade and reinforce their energy delivery systems, and the competitive energy businesses invested $823 million in renewable electric production projects.
In 2016, the Companies are expected to invest $3,168 million for their energy delivery systems and $985 million in renewable electric production projects.
Con Edison plans to meet its 2016 capital requirements, including for maturing securities, through internally-generated funds and the issuance of securities.
The company’s plans include the issuance of between $1,000 million and $1,500 million of long-term debt at the Utilities and the issuance of additional debt secured by its renewable electric production projects.
The company’s plans also include the issuance of up to $200 million of common equity in addition to equity under its dividend reinvestment, employee stock purchase and long term incentive plans.
See “Capital Requirements and Resources” in Item 1.  ?
In June 2015, Con Edison initiated a plan to sell the retail electric supply business of its competitive energy businesses.
In October 2015 O&R entered into an agreement to sell Pike to Corning Natural Gas Holding Corporation.
See Note U to the financial statements in Item 8.  ?
CECONY forecasts average annual growth in peak demand in its service area at design conditions over the next five years for electric and gas to be approximately 0.2 percent and 2.3 percent, respectively, and average annual decrease in steam peak demand in its service area at design conditions over the next five years to be approximately 0.8 percent.
O&R forecasts average annual growth of the peak demand in its service area over the next five years at design conditions for electric and gas to be approximately 0.3 percent and 0.6 percent, respectively.
See “The Utilities” in Item 1.  ?
In September 2015, CECONY, the New York State Public Service Commission (NYSPSC) staff and others entered into a Joint Proposal to settle the proceeding the NYSPSC commenced in February 2009 to examine the prudence of certain CECONY expenditures and related matters.
Pursuant to the Joint Proposal, which is subject to NYSPSC approval, the company is required to credit $116 million to customers and, for the period


GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangible assets totaled $11.3 billion at December 31, 2013 and $10.9 billion at December 31, 2012.
The increase of $.4 billion was primarily due to additions to and changes in value of mortgage and other loan servicing rights.
See additional information regarding our goodwill and intangible assets in Note 10 Goodwill and Other Intangible Assets included in the Notes To Consolidated Financial Statements in Item 8 of this Report.


Net interest and other financial costs decreased by $25 million in 2004 from 2003 and by $82 million in 2003 from 2002.
The decrease in 2004 is primarily due to an increase in interest income.
The decrease in 2003 is primarily due to an increase in capitalized interest related to increased long-term construction projects, the favorable effect of interest rate swaps, the favorable effect of a reduction in interest on tax deficiencies and increased interest income on investments.
Additionally, included in net interest and other financing costs are foreign currency gains of $9 million, $13 million and $8 million for 2004, 2003 and 2002.


| Outstanding options Exercisable options | Exercise price | $ 14.09 - 28.17 | 28.17 - 42.26 | 42.27 - 56.34 | 56.35 - 70.43 | 70.44 - 84.52 | 84.53 - 98.60 | 98.61 - 112.69 | 112.70 - 126.77 | 126.78 - 140.86 | $ 14.09 - 140.86 |


Table 2: The Corporation transfers residential mortgage loans to securitizations sponsored by the GSEs or GNMA in the normal course of business and receives RMBS in exchange which may then be sold into the market to third-party investors for cash proceeds.
A majority of the first-lien residential and commercial mortgage loans securitized are initially classified as LHFS and accounted for under the fair value option.
Gains recognized on these LHFS prior to securitization, which totaled $487 million, $750 million and $715 million net of hedges, during 2016, 2015 and 2014, respectively are not included in the table above.
The Corporation may have the option to repurchase delinquent loans out of securitization trusts, which reduces the amount of servicing advances it is required to make.
The Corporation may also repurchase loans from securitization trusts to perform modifications.
The majority of repurchased loans are FHA-insured mortgages collateralizing GNMA securities.
In addition to cash proceeds as reported in the table above, the Corporation received securities with an initial fair value of $4.2 billion, $22.3 billion and $5.4 billion in connection with first-lien mortgage securitizations in 2016, 2015 and 2014.
The receipt of these securities represents non-cash operating and investing activities and, accordingly, is not reflected on the Consolidated Statement of Cash Flows.
All of these securities were initially classified as Level 2 assets within the fair value hierarchy.
During 2016, 2015 and 2014 there were no changes to the initial classification.
The Corporation recognizes consumer MSRs from the sale or securitization of first-lien mortgage loans.
Servicing fee and ancillary fee income on consumer mortgage loans serviced, including securitizations where the Corporation has continuing
The following table shows the major categories of ongoing claims for which the Company has been able to estimate its probable liability and for which the Company has taken reserves and the related insurance receivables:


| At December 31, | (Dollars in millions) | Balance at beginning of year | Liabilities assumed | Adjustments to reserves | Benefits paid in the current year | Balance at end of year | (Some amounts may not reconcile due to rounding.) |


| December 31,2012 December 31,2013 December 31,2014 December 31,2015 December 31,2016 December 31,2017 | DISCA | DISCB | DISCK | S&P 500 | Peer Group |


| Net sales Segment income | (Millions) | Industrial Coatings | Performance and Applied Coatings | Optical and Specialty Materials | Commodity Chemicals | Glass |


| 2009 Quarters 2008 Quarters | Earnings and dividends | Amounts in thousands, except per share | Interest income (taxable-equivalent basis) | Interest expense | Net interest income | Less: provision for credit losses | Other income | Less: other expense | Income before income taxes | Applicable income taxes (benefit) | Taxable-equivalent adjustment | Net income | Net income available to common shareholders | Per common share data | Basic earnings | Diluted earnings | Cash dividends | Average common shares outstanding | Basic | Diluted | Performance ratios, annualized | Return on | Average assets | Average common stockholders’ equity | Net interest margin on average earning assets (taxable-equivalent basis) | Nonaccrual loans to total loans and leases, net of unearned discount | Efficiency ratio(a) | Net operating (tangible) results(b) | Net operating income (in thousands) | Diluted net operating income per common share | Annualized return on | Average tangible assets | Average tangible common stockholders’ equity | Efficiency ratio(a) | Balance sheet data | In millions, except per share | Average balances | Total assets(c) | Total tangible assets(c) | Earning assets | Investment securities | Loans and leases, net of unearned discount | Deposits | Common stockholders’ equity(c) | Tangible common stockholders’ equity(c) | At end of quarter | Total assets(c) | Total tangible assets(c) | Earning assets | Investment securities | Loans and leases, net of unearned discount | Deposits | Common stockholders’ equity(c) | Tangible common stockholders’ equity(c) | Equity per common share | Tangible equity per common share | Market price per common share | High | Low | Closing |


| Company Payments Volume  (billions) Total Volume  (billions) Total Transactions  (billions) Cards  (millions) | VisaInc.-1 | MasterCard | American Express | Discover | JCB | Diners Club |


The following table summarizes average client investment funds for 2011, 2010 and 2009:


NOTE 15.


| (In millions) 2012 2011 2010 | Balance at January 1 | Current-year provisions | Expenditures | Other changes | Balance at December 31 | November 30, | 2010 | (In thousands) | Loan origination liabilities, beginning of year | Provision for losses issued during the period | Adjustments to pre-existing provision for losses from changes in estimates | Payments/settlements | Loan origination liabilities, end of year |


| Pretax Increase (Decrease) 2016 2015 | (in millions) | Premiums | Other revenues | Total revenues | Distribution expenses | Benefits, claims, losses and settlement expenses | Amortization of DAC | Total expenses | Total-1 |


| 1. Consolidated Financial Statements: | Management Report on Internal Controls — For the year ended Dec. 31, 2008. | Reports of Independent Registered Public Accounting Firm — For the years ended Dec. 31, 2008, 2007 and 2006. | Consolidated Statements of Income — For the three years ended Dec. 31, 2008, 2007 and 2006. | Consolidated Statements of Cash Flows — For the three years ended Dec. 31, 2008, 2007 and 2006. | Consolidated Balance Sheets — As of Dec. 31, 2008 and 2007. | 2. | Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended Dec. 31, 2008, 2007 and 2006. | 3. |


Humana Inc.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 3.
ACQUISITIONS On December 21, 2010, we acquired Concentra Inc. , or Concentra, a health care company based in Addison, Texas, for cash consideration of $804.7 million.
Through its affiliated clinicians, Concentra delivers occupational medicine, urgent care, physical therapy, and wellness services to workers and the general public through its operation of medical centers and worksite medical facilities.
The Concentra acquisition provides entry into the primary care space on a national scale, offering additional means for achieving health and wellness solutions and providing an expandable platform for growth with a management team experienced in physician asset management and alternate site care.
The preliminary fair values of Concentra’s assets acquired and liabilities assumed at the date of the acquisition are summarized as follows:


| ($ in millions) As Adjusted for Accounting Change | Balance at January 1, 2007 | Additions based on tax positions related to the current year | Additions for tax positions of prior years | Reductions for settlements | Effect of foreign currency exchange rates | Balance at December 31, 2007 | Balance sheet classification: | Income taxes payable | Deferred taxes and other liabilities | Total |


| As of December 31, | 2014 | (In $ millions) | Trade receivables, net | Inventories | Trade payables - third party and affiliates | Trade working capital |


Mortgage-related exposures carried at fair value The following table provides a summary of the Firms mortgage-related exposures, including the impact of risk management activities.
These exposures include all mortgage-related securities and loans carried at fair value regardless of their classification within the fair value hierarchy, and that are carried at fair value through earnings or at the lower of cost or fair value.
The table excludes securities held in the available-for-sale portfolio, which are reported on page 170 of this Note.


The Company conducts substantially all of its operations in the United States.
There are no transactions with a single customer that in the aggregate result in revenues that exceed ten percent of consolidated total revenues.
Table 23 QUARTERLY TRENDS


| Operating Leases | 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total minimum lease payments [1] |