Provision for Credit Losses The provision for credit losses decreased $15.0 billion to $13.4 billion for 2011 compared to 2010.
The provision for credit losses was $7.4 billion lower than net charge-offs for 2011, resulting in a reduction in the allowance for credit losses driven primarily by lower delinquencies, improved collection rates and fewer bankruptcy filings across the Card Services portfolio, and improvement in overall credit quality in the commercial real estate portfolio partially offset by additions to consumer PCI loan portfolio reserves.
This compared to a $5.9 billion reduction in the allowance for credit losses in 2010.
We expect reductions in the allowance for credit losses to be lower in 2012.
The provision for credit losses related to our consumer portfolio decreased $11.1 billion to $14.3 billion for 2011 compared to 2010.
The provision for credit losses related to our commercial portfolio including the provision for unfunded lending commitments decreased $3.9 billion to a benefit of $915 million for 2011 compared to 2010.
Net charge-offs totaled $20.8 billion, or 2.24 percent of average loans and leases for 2011 compared to $34.3 billion, or 3.60 percent for 2010.
The decrease in net charge-offs was primarily driven by improvements in general economic conditions that resulted in lower delinquencies, improved collection rates and fewer bankruptcy filings across the Card Services portfolio as well as lower losses in the home equity portfolio driven primarily by fewer delinquent loans.
For more information on the provision for credit losses, see Provision for Credit Losses on page 102.


| For the Years Ended | 2017 | Revenues by Solutions & Services | System sales | Support and maintenance | Services | Reimbursed travel | 100% | Revenues by Segment | Domestic | Global | 100% |


| Shares (In thousands) Weighted- Average Grant- Date Fair Value-1 | Non-vested at January 1, 2013 | Granted | Vested | Cancelled | Forfeited | Non-vested at December 31, 2013 | December 29, 2001 | Cadence Design Systems, Inc. | S & P 500 | NASDAQ Composite | S & P Information Technology |


Supplementary Information on Oil and Gas Producing Activities (Unaudited) CONTINUED Estimated Quantities of Proved Oil and Gas Reserves Estimates of proved reserves have been prepared by in-house teams of reservoir engineers and geoscience professionals.
Reserve estimates are periodically reviewed by Marathon’s Corporate Reserves Group to assure that rigorous professional standards and the reserves definitions prescribed by the U. S.  Securities and Exchange Commission (“SEC”) are consistently applied throughout the Company.
Proved reserves are the estimated quantities of oil and natural gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
Estimates of proved reserves may change, either positively or negatively, as additional information becomes available and as contractual, economic and political conditions change.
Marathon’s net proved reserve estimates have been adjusted as necessary to reflect all contractual agreements, royalty obligations and interests owned by others at the time of the estimate.
Only reserves that are estimated to be recovered during the term of the current contract have been included in the proved reserve estimate unless there is a clear and consistent history of contract extension.
Reserves from properties governed by production sharing contracts have been calculated using the “economic interest” method prescribed by the SEC.
Reserves that are not currently considered proved, such as those that may result from extensions of currently proved areas or that may result from applying secondary or tertiary recovery processes not yet tested and determined to be economic are excluded.
Purchased natural gas utilized in reservoir management and subsequently resold is also excluded.
Marathon does not have any quantities of oil and gas reserves subject to long-term supply agreements with foreign governments or authorities in which Marathon acts as producer.
Proved developed reserves are the quantities of oil and gas expected to be recovered through existing wells with existing equipment and operating methods.
In some cases, proved undeveloped reserves may require substantial new investments in additional wells and related facilities.


| 10/26/2008 10/25/2009 10/31/2010 10/30/2011 10/28/2012 10/27/2013 | Applied Materials | S&P 500 Index | RDG Semiconductor Composite Index | Change | 2013 | (In millions, except percentages and ratios) | New orders | Net sales | Book to bill ratio | Operating income | Operating margin | Non-GAAP Adjusted Results | Non-GAAP adjusted operating income | Non-GAAP adjusted operating margin |


| For the Years Ended December 31, | (Millions of Dollars) | Operating revenues | Purchased power | Other operations and maintenance | Depreciation and amortization | Taxes, other than income taxes | Electric operating income | Millions of kWh Delivered | For the Years Ended | Description | Residential/Religious (b) | Commercial/Industrial | Retail choice customers | Public authorities | Other operating revenues (c) | Total |


Asset and Liability Management Activities The primary objective of asset and liability management is to provide sustainable and growing net interest revenue, or NIR, under varying economic environments, while protecting the economic values of our balance sheet assets and liabilities from the adverse effects of changes in interest rates.
Most of our NIR is earned from the investment of deposits generated by our core Investment Servicing and Investment Management businesses.
We structure our balance sheet assets to generally conform to the characteristics of our balance sheet liabilities, but we manage our overall interest-rate risk position in the context of current and anticipated market conditions and within internally approved risk guidelines.
Our overall interest-rate risk position is maintained within a series of policies approved by the Board and guidelines established and monitored by ALCO.
Our Global Treasury unit has responsibility for managing State Streets day-to-day interest-rate risk.
To effectively manage the consolidated balance sheet and related net interest revenue, Global Treasury has the authority to take a limited amount of interestrate risk based on market conditions and its views about the direction of global interest rates over both short-term and long-term time horizons.
Global Treasury manages our exposure to changes in interest rates on a consolidated basis, and they have organized themselves into three regional treasury units, North America, Europe, and Asia/Pacific, to reflect the growing, global nature of our exposures and to capture the impact of change in regional market environments on our total risk position.
Our investment activities and our use of derivative financial instruments are the primary tools used in managing interest-rate risk.
We invest in financial instruments with currency, repricing, and maturity characteristics we consider appropriate to manage our overall interest-rate risk position.
In addition to onbalance sheet assets, we use certain derivatives, primarily interest-rate swaps, to alter the interest-rate characteristics of specific balance sheet assets or liabilities.
The use of derivatives is subject to ALCO-approved guidelines.
Additional information about our use of derivatives is in Note 15 of the Notes to Consolidated Financial Statements included in this Form 10-K under Item 8.
As a result of growth in our non-U.
S.  operations, non-U.
S.  dollar denominated customer liabilities are a significant portion of our consolidated balance sheet.
This growth results in exposure to changes in the shape and level of non-U.
S.  dollar yield curves, which we include in our consolidated interest-rate risk management process.


Cash flows from operating activities in 2006 were negatively affected by higher cash pension funding and higher working capital levels compared to the prior year.
The higher working capital was a combination of higher than planned raw material inventory levels, higher income tax payments and higher accounts receivable balances, the latter resulting primarily from the repayment of a portion of the accounts receivable securitization program and late payments from customers in Europe.
Management expects the increase in working capital to be temporary and that working capital levels will return to normal levels by the end of the first half of 2007.


| In millions IncrementalAssets | Market Street | Credit card loans | Total | In millions | December 31, 2009 | Market Street | Tax credit investments (b) (c) | Collateralized debt obligations | Total | December 31, 2008 | Market Street | Tax credit investments (b) (c) | Collateralized debt obligations | Total |


| Year Ended December 31, | (in millions) | Interest income | Foreign currency losses | Net gains (losses) on investments | Other expense, net | $-37 |


| 2003 2002 2001 2000 1999 | Net earnings (loss) | Add: | Interest expense | Income tax expense (benefit) | EBIT | Add: depreciation and amortization | EBITDA |


| 2016 2015 2014 | Sales | Operating income | Operating margin | Adjusted EBITDA | Adjusted EBITDA margin |


| Year Ended February 28, 2011 | (In thousands except per share data) | Selling, general and administrative expenses | Interest expense | Earnings before income taxes | Income tax provision | Net earnings | Net Earnings Per Share: | Basic | Diluted |


| In millions, except per share data 2009 2008 2007 | Share-based compensation expense | After tax | Net income per common share-diluted |


| For the Year Ended  December 31, | 2004 | (In millions) | Net earned premiums and other considerations: | Specialty Property | Consumer Protection | Total | Fees and other income | Total |


| Consolidated Balance Sheet Data At July 31, | (In millions) | Cash, cash equivalents and investments | Long-term investments | Working capital | Total assets | Current portion of long-term debt | Long-term debt | Other long-term obligations | Total stockholders’ equity | (Dollars in millions) | Product revenue | Service and other revenue | Total segment revenue | % of total revenue | Segment operating income | % of related revenue | (Dollars in millions) | Product revenue | Service and other revenue | Total segment revenue | % of total revenue | Segment operating income | % of related revenue |


| December 31, 2008 December 31, 2007 | (in thousands) | May 1, 2006 term loan | July 31, 2008 term loan | Total |


| As of December | $ in millions | Investment Banking: | Financial Advisory | Underwriting | Institutional Client Services: | FICC Client Execution | Equities client execution | Securities services | Investing & Lending | Investment Management | Total |


Managements discussion and analysis 78 JPMorgan Chase & Co. /2018 Form 10-K Treasury and CIO overview Treasury and CIO is predominantly responsible for measuring, monitoring, reporting and managing the Firms liquidity, funding, capital, structural interest rate and foreign exchange risks.
The risks managed by Treasury and CIO arise from the activities undertaken by the Firms four major reportable business segments to serve their respective client bases, which generate both on- and offbalance sheet assets and liabilities.
Treasury and CIO seek to achieve the Firms asset-liability management objectives generally by investing in highquality securities that are managed for the longer-term as part of the Firms investment securities portfolio.
Treasury and CIO also use derivatives to meet the Firms assetliability management objectives.
For further information on derivatives, refer to Note 5.
In addition, Treasury and CIO manage the Firms cash position primarily through depositing at central banks and investing in short-term instruments.
For further information on liquidity and funding risk, refer to Liquidity Risk Management on pages 95100.
For information on interest rate, foreign exchange and other risks, refer to Market Risk Management on pages 124131.
The investment securities portfolio primarily consists of agency and nonagency mortgage-backed securities, U. S.  and non-U.
S.  government securities, obligations of U. S.  states and municipalities, other ABS and corporate debt securities.
At December 31, 2018, the investment securities portfolio was $260.1 billion, and the average credit rating of the securities comprising the portfolio was AA+ (based upon external ratings where available and, where not available, based primarily upon internal ratings that correspond to ratings as defined by S&P and Moodys).
Refer to Note 10 for further information on the Firms investment securities portfolio.


| For the Three Months Ended | (dollars in millions, except per share amounts) | Operating Data: | Net interest income | Noninterest income-1 | Total revenue | Provision for credit losses | Noninterest expense-2 (5) (8) | Income before income tax expense | Income tax expense | Net income-3 (6) (9) | Net income available to common stockholders-3 (6) (9) | Net income per average common share- basic-4 (7) (10) | Net income per average common share- diluted-4 (7) (10) | Other Operating Data: | Return on average common equity-11 (17) | Return on average tangible common equity-12 (17) | Return on average total assets-13 (17) | Return on average total tangible assets-14 (17) | Efficiency ratio-15 (17) | Net interest margin-16 (17) | Stock Activity: | Share Price: | High | Low | Share Data: | Cash dividends declared and paid per common share | Dividend payout ratio | Years ended December 31, | 2016 | Basic weighted-average shares outstanding | Effect of potential common stock: | Common stock awards | Senior subordinated convertible notes | Diluted weighted-average shares outstanding |


Results of operations and the estimated fair value of acquired assets and assumed liabilities are recorded in the consolidated financial statements from the date of acquisition.
Pro forma results of operations for the business combinations completed during fiscal 2016 have not been presented because the effects of these acquisitions, individually and in the aggregate, would not have been material to Cadence’s financial results.
The fair values of acquired intangible assets and assumed liabilities were determined using significant inputs that are not observable in the market.
For an additional description of these fair value calculations, see Note 16 in the notes to the consolidated financial statements.
A trust for the benefit of the children of Lip-Bu Tan, Cadence’s President, Chief Executive Officer, or CEO, and director, owned less than 2% of Rocketick Technologies Ltd. , one of the acquired companies, and Mr.  Tan and his wife serve as co-trustees of the trust and disclaim pecuniary and economic interest in the trust.
The Board of Directors of Cadence reviewed the transaction and concluded that it was in the best interests of Cadence to proceed with the transaction.
Mr.  Tan recused himself from the Board of Directors’ discussion of the valuation of Rocketick Technologies Ltd.  and on whether to proceed with the transaction.
A financial advisor provided a fairness opinion to Cadence in connection with the transaction.2014 Acquisitions During fiscal 2014, Cadence acquired Jasper Design Automation, Inc. , or Jasper, a privately held provider of formal analysis solutions based in Mountain View, California.
The acquired technology complements Cadence’s existing system design and verification platforms.
Total cash consideration for Jasper, after taking into account adjustments for certain costs, and cash held by Jasper at closing of $28.7 million, was $139.4 million.
Cadence will also make payments to certain employees through the third quarter of fiscal 2017 subject to continued employment and other conditions.
Cadence also completed two other business combinations during fiscal 2014 for total cash consideration of $27.5 million, after taking into account cash acquired of $2.1 million.
Acquisition-related Transaction Costs Transaction costs associated with acquisitions were $1.1 million, $0.7 million and $3.7 million during fiscal 2016, 2015 and 2014, respectively.
These costs consist of professional fees and administrative costs and were expensed as incurred in Cadence’s consolidated income statements.
NOTE 8.
GOODWILL AND ACQUIRED INTANGIBLES Goodwill The changes in the carrying amount of goodwill during fiscal 2016 and 2015 were as follows:


costs between cost of license revenue and cost of maintenance and service revenue based on license and maintenance and service revenue reported.
Cost of license revenue.
Cost of license revenue includes costs related to products sold and software licensed, allocated operating costs related to product support and distribution costs, royalties paid to third party vendors, and the amortization of capitalized research and development costs associated with software products which have reached technological feasibility.
Cost of maintenance and service revenue.
Cost of maintenance and service revenue includes operating costs related to maintaining the infrastructure necessary to operate our services and training organization, and costs associated with the delivery of our consulting services, such as, hotline and onsite support, production services and documentation of maintenance updates.
Amortization of intangible assets.
Amortization of intangible assets, which is recorded to cost of revenue and operating expenses, includes the amortization of certain contract rights and the amortization of core/developed technology, trademarks, trade names, customer relationships, and covenants not to compete related to acquisitions.
Cost of revenue increased by $60.9 million or 16% in fiscal 2013 compared to fiscal 2012 due to increases of $23.0 million in amortization of intangible assets and $17.7 million in personnel-related costs, primarily as a result of acquisitions in fiscal 2012, particularly in the fourth quarter of fiscal 2012, and $25.9 million in product costs primarily due to product sales.
The increase in cost of revenue was partially offset by an additional week of expenses of approximately $2.2 million in fiscal 2012 and a $1.3 million reduction in acquisition-related costs compared to fiscal 2012.
Cost of revenue increased by $52.2 million or 15% in fiscal 2012 compared to fiscal 2011.
The increase was primarily due to increases of $26.5 million in amortization of intangible assets, $19.0 million in personnel-related costs as a result of fiscal 2012 acquisitions and the impact of one extra week of costs of approximately $2.2 million in fiscal 2012.


| December 31, 2010 | Cost or | Amortized | Cost | (In millions) | Fixed Maturity Securities: | U.S. corporate securities | Foreign corporate securities | RMBS | Foreign government securities | U.S. Treasury, agency and government guaranteed securities -1 | CMBS | ABS | State and political subdivision securities | Other fixed maturity securities | Total fixed maturity securities -2, (3) | Equity Securities: | Common stock | Non-redeemable preferred stock -2 | Total equity securities -4 |


| 2007 2006 2005 | Net income: | UE(a) | CIPS | Genco | CILCORP | IP | Other(b) | Ameren net income | 2007 | Electric margin | Gas margin | Other revenues | Other operations and maintenance | Depreciation and amortization | Taxes other than income taxes | Other income and expenses | Interest expense | Income taxes (benefit) | Minority interest and preferred dividends | Net Income | 2006 | Electric margin | Gas margin | Other revenues | Other operations and maintenance | Depreciation and amortization | Taxes other than income taxes | Other income and expenses | Interest expense | Income taxes (benefit) | Minority interest and preferred dividends | Net Income | 2005 | Electric margin | Gas margin | Other revenue | Other operations and maintenance | Depreciation and amortization | Taxes other than income taxes | Other income and expenses | Interest expense | Income taxes (benefit) | Minority interest and preferred dividends | Cumulative effect of change in accounting principle | Net Income | Credit Facility | Ameren, UE and Genco: | Multiyear revolving(a)(b) | CIPS, CILCORP, CILCO, IP and AERG: | 2006 Multiyear revolving(c) | 2007 Multiyear revolving(d) | Coal | Fuel   Expense | Ameren(b) | UE | Genco | CILCORP | CILCO | EEI | Sources of Fair Value | IP: | Prices actively quoted | Prices provided by other external sources(a) | Prices based on models and other valuation methods(b) | Total |


The Company believes that its unrecognized tax benefits could decrease by $10,273 within the next twelve months.
The Company has effectively settled all Federal income tax matters related to years prior to 2010.
Various other state and foreign income tax returns are open to examination for various years.
Belgian Tax Matter The Company believes that its unrecognized tax benefits could decrease by $10,273 within the next twelve months.
The Company has effectively settled all Federal income tax matters related to years prior to 2010.
Various other state and foreign income tax returns are open to examination for various years.
Belgian Tax Matter In January 2012, the Company received a ¬23,789 assessment from the Belgian tax authority related to its year ended December 31, 2008, asserting that the Company had understated its Belgian taxable income for that year.
The Company filed a formal protest in the first quarter of 2012 refuting the Belgian tax authorityÂ¡Â¯s position.
The Belgian tax authority set aside the assessment in the third quarter of 2012 and refunded all related deposits, including interest income of ¬1,583 earned on such deposits.
However, on October 23, 2012, the Belgian tax authority notified the Company of its intent to increase the CompanyÂ¡Â¯s taxable income for the year ended December 31, 2008 under a revised theory.
On December 28, 2012, the Belgian tax authority issued assessments for the years ended December 31, 2005 and December 31, 2009, in the amounts of ¬46,135 and ¬35,567, respectively, including penalties, but excluding interest.
The Company filed a formal protest during the first quarter of 2013 relating to the new assessments.
In September 2013, the Belgian tax authority denied the CompanyÂ¡Â¯s protests, and the Company has brought these two years before the Court of First Appeal in Bruges.
In December 2013, the Belgian tax authority issued additional assessments related to the years ended December 31, 2006, 2007, and 2010, in the amounts of ¬38,817, ¬39,635, and ¬43,117, respectively, including penalties, but excluding interest.
The Company filed formal protests during the first quarter of 2014, refuting the Belgian tax authorityÂ¡Â¯s position for each of the years assessed.
In the quarter ended June 28, 2014, the Company received a formal assessment for the year ended December 31, 2008, totaling ¬30,131, against which the Company also submitted its formal protest.
All 4 additional years have been brought before the Court of First Appeal in November 2014.
In January of 2015, the Company met with the Court of First Appeal in Bruges, Belgium and agreed with the Belgium tax authorities to consolidate and argue the issues regarding the years 2005 and 2009, and apply the ruling to all of the open years (to the extent there are no additional facts/procedural arguments in the other years).
On January 27, 2016, the Court of First Appeal in Bruges, Belgium ruled in favor of the Company with respect to the calendar years ending December 31, 2005 and December 31, 2009.
The Company anticipates that the Belgian tax authority will appeal this ruling.
The Company disagrees with the views of the Belgian tax authority on this matter and will persist in its vigorous defense if there is an appeal.
Although there can be no assurances, the Company believes the ultimate outcome of these actions will not have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, liquidity or cash flows in a given quarter or year.


| In millions Interest OnlyProduct Principal andInterest Product | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 and thereafter | Total (a)(b) | December 31, | (in millions) | Loans retained | Loans held-for-sale | Loans at fair value(a) | Loans – reported | Derivative receivables | Receivables from customers and other(b) | Total wholesale credit-related assets | Lending-related commitments | Total wholesale credit exposure | Credit Portfolio Management derivatives notional, net(c) | Liquid securities and other cash collateral held against derivatives | JPMorgan Chase & Co. | December 31, 2013 | Moody’s Investor Services | Standard & Poor’s | Fitch Ratings |


| Fiscal year ended December 29, 2007 Fiscal year ended December 30, 2006 Year over Year | Net Sales | Outdoor/Fitness | Marine | Automotive/Mobile | Aviation | Total |


| Con Edison CECONY | Units | Non-vested at 12/31/13 | Granted | Vested | Forfeited | Non-vested at 12/31/14 |


| For the Years Ended December 31, | 2013 | (Dollars in thousands) | Production costs | Employee-related costs | Operating supplies and services | Maintenance materials and supplies | Other | Total |


| Twelve Months Ended December 31, 2011 Twelve Months Ended December 31, 2010 | (millions of dollars) | Operating revenues | Purchased power | Gas purchased for resale | Net revenues | Operations and maintenance | Depreciation and amortization | Taxes, other than income taxes | Operating income |


| December 31, 2008 December 31, 2007 | (Dollars in millions) | Interest rate contracts | Swaps | Futures and forwards | Written options | Purchased options | Foreign exchange contracts | Swaps | Spot, futures and forwards | Written options | Purchased options | Equity contracts | Swaps | Futures and forwards | Written options | Purchased options | Commodity contracts | Swaps | Futures and forwards | Written options | Purchased options | Credit derivatives | Purchased protection: | Credit default swaps | Total return swaps | Written protection: | Credit default swaps | Total return swaps | Credit risk before cash collateral | Less: Cash collateral applied | Total derivative assets |


| Years Ended December 31, | 2014 | (in millions) | Investment income on fixed maturities | Net realized gains | Affordable housing partnerships | Other | Consolidated investment entities | Total net investment income | December 31, 2014 | Description of Securities | (in millions) | Corporate debt securities | Residential mortgage backed securities | Commercial mortgage backed securities | Asset backed securities | State and municipal obligations | U.S. government and agencies obligations | Foreign government bonds and obligations | Common stocks | Total | December 31, 2013 | Description of Securities | (in millions) | Corporate debt securities | Residential mortgage backed securities | Commercial mortgage backed securities | Asset backed securities | State and municipal obligations | U.S. government and agencies obligations | Foreign government bonds and obligations | Common stocks | Total |


| December 31, | 2010 | Estimated | Amortized | Cost | (In millions) | Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years | Subtotal | RMBS, CMBS and ABS | Total fixed maturity securities |


| Contractual Obligations 2015 2016 2017 2018 2019 Thereafter Total | Long-term obligations, excluding capital leases | Cash interest expense | Capital lease payments (including interest) | Total debt service obligations | Operating lease payments-11 | Other non-current liabilities-12-13 | Total |


Segment Income (Loss) Before Income Tax by Business Segment
The amount of our total revenues, segment income before and after income tax and total assets by segment and the amount of our revenues and long-lived assets by geographic region is set forth in Note 21 to our consolidated financial statements.
On June 21, 2005, we announced our intention to separate Assurant Solutions into two segments: Assurant Solutions and Assurant Specialty Property.
We will begin reporting separate segment financial information sometime in 2006 upon completion of the separation of the underlying product lines.
The majority of Assurant Solutions’ existing Specialty Property division will become the Assurant Specialty Property segment.
The majority of Assurant Solutions’ existing Consumer Protection division combined with the existing Assurant PreNeed segment will become the new Assurant Solutions segment.
Since these segment changes will not be made until some time in 2006, all discussions in this Form 10-K refer to the existing Assurant Solutions segment and its two divisions, Specialty Property and Consumer Protection.
On November 9, 2005, we signed an agreement with Forethought Life Insurance Company (“Forethought”) whereby we will discontinue writing new preneed insurance policies in the United States via independent funeral homes and non-SCI corporate funeral home chains for a period of 10 years.
This agreement does not impact Assurant PreNeed’s Independent—Canada or AMLIC’s relationship with SCI.
In addition, concurrent with the creation of the new Assurant Solutions and Assurant Specialty Property segments, we will realign the Assurant PreNeed segment under the new Assurant Solutions segment.
Assurant Solutions Assurant Solutions, which includes American Security Group operations acquired in 1980 and American Bankers Insurance Group acquired in 1999, has leadership positions or is aligned with clients who are leaders in creditor placed homeowners insurance, manufactured housing homeowners, credit related insurance products, debt protection administration and warranty and extended service contracts.
We develop, underwrite and market our specialty insurance products and services through collaborative relationships with our clients.
Assurant Solutions is organized into two divisions: Specialty Property and Consumer Protection.
The Specialty Property division focuses on creditor placed homeowners and manufactured housing homeowners insurance products and related services, as well as other insurance related products such as renters’ insurance, watercraft and motorcycle property coverages.
In our Consumer Protection division, we are a low-cost provider of credit and debt protection administration services.
In addition, we offer a variety of warranties and extended service contracts on consumer electronics, cellular phones, personal computers, appliances and vehicles through clients domestically and internationally.
Assurant Solutions maintains a comprehensive client and transaction database, which we believe gives us a competitive advantage with respect to pricing, marketing and projected claims development.
Additionally, our high level of integration with clients allows us to have current and accurate data on the performance of their underwriting, claims, fees earned and commissions.
We leverage the data advantage with clients to determine their optimal pricing and marketing strategy.
Our principal business lines within our Assurant Solutions segment have experienced growth in varying degrees.
We have benefited from growth in the creditor placed homeowners insurance market and from the acquisition of new clients.
We also experienced growth in our warranty and extended service contract and


Credit Ratings Citigroups funding and liquidity, funding capacity, ability to access capital markets and other sources of funds, the cost of these funds and its ability to maintain certain deposits are partially dependent on its credit ratings.
The table below shows the ratings for Citigroup and Citibank as of December 31, 2018.
While not included in the table below, the long- and short-term ratings of Citigroup Global Markets Holding Inc.  (CGMHI) were BBB+/A-2 at Standard & Poors and A/F1 at Fitch as of December 31, 2018.


| December 31, 2015 | Lowest Rating Agency Rating | AAA | (in millions) | Collateralized by sub-prime mortgages | Collateralized loan obligations | Collateralized by education loans-1 | Collateralized by credit cards | Collateralized by auto loans | Other asset-backed securities-2 | Total asset-backed securities-3 |


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


| Twelve Months EndedDecember 31, | 2016-1 | (In millions, except per share data) | Summary of Operations: | Operating revenue | Operating expenses | Operating income | Consolidated income from continuing operations | Discontinued operations, net of tax-2(7) | Net income attributable to Equifax | Dividends paid to Equifax shareholders | Diluted earnings per share | Net income from continuing operations attributable to Equifax | Discontinued operations attributable to Equifax | Net income attributable to Equifax | Cash dividends declared per share | Weighted-average shares outstanding (diluted) |


| In billions of dollars December 31, 2008 December 31, 2007 | Cash | Available-for-sale securities | Loans | Allowance for loan losses | Total assets | Long-term debt | Other liabilities | Total liabilities |


| CONSOLIDATED STATEMENTS OF OPERATIONS Twelve Months Ended December 31, 2015 Twelve Months Ended December 31, 2014 | AND COMPREHENSIVE INCOME (LOSS): | As previously reported | (Dollars in thousands) | REVENUES: | Premiums earned | Net investment income | Other income (expense) | Total revenues | CLAIMS AND EXPENSES: | Incurred losses and loss adjustment expenses | Commission, brokerage, taxes and fees | Other underwriting expenses | Total claims and expenses | INCOME (LOSS) BEFORE TAXES | NET INCOME (LOSS) | Net income (loss) attributable to noncontrolling interests | NET INCOME (LOSS) ATTRIBUTABLE TO EVEREST RE GROUP | CONSOLIDATED STATEMENT OF CASH FLOWS: | (Dollars in thousands) | CASH FLOWS FROM OPERATING ACTIVITIES: | Net income (loss) | Decrease (increase) in premiums receivable | Decrease (increase) in funds held by reinsureds, net | Decrease (increase) in reinsurance receivables | Decrease (increase) in prepaid reinsurance premiums | Increase (decrease) in other net payable to reinsurers | Change in other assets and liabilities, net | Net cash provided by (used in) operating activities | CASH FLOWS FROM INVESTING ACTIVITIES: | Net change in short-term investments | Net cash provided by (used in) investing activities | CASH FLOWS FROM FINANCING ACTIVITIES: | Third party investment in redeemable noncontrolling interest | Subscription advances for third party redeemable noncontrolling interest | Dividends paid on third party investment in redeemable noncontrolling interest | Net cash provided by (used in) financing activities | EFFECT OF EXCHANGE RATE CHANGES ON CASH |


Foreign Currency Exchange Rate Risk We transact business in many different foreign currencies and may be exposed to financial market risk resulting from fluctuations in foreign currency exchange rates, particularly EUR, GBP, and AUD.
The volatility of EUR, GBP, and AUD (and all other applicable currencies) will be monitored frequently throughout the coming year.
When appropriate, we enter into hedging transactions in order to mitigate our risk from foreign currency fluctuations.
We will continue to use hedging programs in the future and may use currency forward contracts, currency options, and/or other derivative financial instruments commonly utilized to reduce financial market risks if it is determined that such hedging activities are appropriate to reduce risk.
We do not hold or purchase any foreign currency contracts for trading purposes.
As of March 31, 2006, we had no outstanding hedging contracts.


| 2018 2017 2016 | Risk free rate | Dividend yield | Volatility | Requisite service period |


| Before Application of SFAS No. 158 SFAS No. 158 Adjustments After Application of SFAS No. 158 | (dollars in millions) | Other assets | Other liabilities and accrued expenses | Net deferred tax assets | Accumulated other comprehensive income (loss) | Total shareholders’ equity |


| (Dollars in millions) Fiscal2011 Fiscal2010 Fiscal2009 2011-2010% Change 2010-2009% Change | Product revenue | Service and other revenue | Total segment revenue | % of total revenue | Segment operating income | % of related revenue |


?
Level 1Quoted prices for identical instruments in active markets.  ?
Level 2Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets.  ?
Level 3Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.
For some products or in certain market conditions, observable inputs may not always be available.
For example, during the market dislocations that started in the second half of 2007, certain markets became illiquid, and some key observable inputs used in valuing certain exposures were unavailable.
When and if these markets become liquid, the valuation of these exposures will use the related observable inputs available at that time from these markets.
Under SFAS 157, Citigroup is required to take into account its own credit risk when measuring the fair value of derivative positions as well as the other liabilities for which fair value accounting has been elected under SFAS 155, Accounting for Certain Hybrid Financial Instruments and SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities.
The adoption of SFAS 157 has also resulted in some other changes to the valuation techniques used by Citigroup when determining fair value, most notably the changes to the way that the probability of default of a counterparty is factored in and the elimination of a derivative valuation adjustment which is no longer necessary under SFAS 157.
The cumulative effect at January 1, 2007 of making these changes was a gain of $250 million after-tax ($402 million pretax), or $0.05 per diluted share, which was recorded in the first quarter of 2007 earnings within the S&B business.
SFAS 157 also precludes the use of block discounts for instruments traded in an active market, which were previously applied to large holdings of publicly traded equity securities, and requires the recognition of trade-date gains after consideration of all appropriate valuation adjustments related to certain derivative trades that use unobservable inputs in determining their fair value.
Previous accounting guidance allowed the use of block discounts in certain circumstances and prohibited the recognition of day-one gains on certain derivative trades when determining the fair value of instruments not traded in an active market.
The cumulative effect of these changes resulted in an increase to January 1, 2007 retained earnings of $75 million.
Fair Value Option (SFAS 159) In conjunction with the adoption of SFAS 157, the Company early-adopted SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159), as of January 1, 2007.
SFAS 159 provides an option on an instrument-by-instrument basis for most financial assets and liabilities to be reported at fair value with changes in fair value reported in earnings.
After the initial adoption, the election is made at the acquisition of a financial asset, a financial liability, or a firm commitment and it may not be revoked.
SFAS 159 provides an opportunity to mitigate volatility in reported earnings that resulted prior to its adoption from being required to apply fair value accounting to certain economic hedges (e. g. , derivatives) while having to measure the assets and liabilities being economically hedged using an accounting method other than fair value.
Under the SFAS 159 transition provisions, the Company elected to apply fair value accounting to certain financial instruments held at January 1, 2007 with future changes in value reported in earnings.
The adoption of SFAS 159 resulted in a decrease to January 1, 2007 retained earnings of $99 million.
Leveraged Leases On January 1, 2007, the Company adopted FSP FAS 13-2, Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leverage Lease Transaction (FSP 13-2), which provides guidance regarding changes or projected changes in the timing of cash flows relating to income taxes generated by a leveraged lease transaction.
Leveraged leases can provide significant tax benefits to the lessor, primarily as a result of the timing of tax payments.
Since changes in the timing and/or amount of these tax benefits may have a significant effect on the cash flows of a lease transaction, a lessor, in accordance with FSP 13-2, will be required to perform a recalculation of a leveraged lease when there is a change or projected change in the timing of the realization of tax benefits generated by that lease.
Previously, Citigroup did not recalculate the tax benefits if only the timing of cash flows had changed.
The adoption of FSP 13-2 resulted in a decrease to January 1, 2007 retained earnings of $148 million.
This decrease to retained earnings will be recognized in earnings over the remaining lives of the leases as tax benefits are realized.
Accounting for Defined Benefit Pensions and Other Postretirement Benefits As of December 31, 2006, the Company adopted SFAS No.158, Employers Accounting for Defined Benefit Pensions and Other Postretirement Benefits (SFAS 158).
In accordance with this standard, Citigroup recorded the funded status of each of its defined benefit pension and postretirement plans as an asset or liability on its Consolidated Balance Sheet with a corresponding offset, net of taxes, recorded in Accumulated other comprehensive income (loss) within Stockholders equity, resulting in an after-tax decrease in equity of $1.647 billion.
See Note 9 on page 144.


| Notional amount of protectionpurchased and sold(a) | December 31, (in millions) | Credit derivatives used to manage: | Loans and lending-related commitments | Derivative receivables | Total net protection purchased | Total net protection sold | Credit portfolio management derivatives notional, net |


| Amount (In Millions) | 2014 net revenue | Nuclear realized price changes | Vermont Yankee shutdown in December 2014 | Nuclear volume, excluding Vermont Yankee effect | Other | 2015 net revenue |


| Year Ended December 31, Change | (in thousands, except percentages) | Revenue: | Lease licenses | Perpetual licenses | Software licenses | Maintenance | Service | Maintenance and service | Total revenue |


Higher 2017 sales volumes, incremental year-over-year cost savings associated with restructuring and productivity improvement initiatives, costs associated with various growth investments made in 2016 and changes in currency exchange rates, partially offset by incremental year-over-year costs associated with various product development and sales and marketing growth investments: 60 basis points Year-over-year operating profit margin comparisons were unfavorably impacted by: ?
The incremental year-over-year net dilutive effect of acquired businesses: 20 basis points 2016 COMPARED TO 2015 Year-over-year price increases in the segment contributed 0.3% to sales growth during 2016 as compared to 2015 and are reflected as a component of the change in sales from existing businesses.
Sales from existing businesses in the segments Transportation Technologies businesses grew at a high-single digit rate during 2016 as compared to 2015, due primarily to strong demand for dispenser, payment and point-of-sale systems, environmental compliance products as well as vehicle and fleet management products, partly offset by weaker year-over-year demand for compressed natural gas products.
As expected, beginning in the second half of 2016, the business began to experience reduced EMV-related demand for indoor point-of-sale solutions, as customers had largely upgraded to products that support indoor EMV requirements in the prior year in response to the indoor liability shift.
However, demand increased on a year-over-year basis for dispensers and payment systems as customers in the United States continued to upgrade equipment driven primarily by the EMV deadlines related to outdoor payment systems.
Geographically, sales from existing businesses continued to increase on a year-over-year basis in the United States and to a lesser extent in Asia and Western Europe.
Sales from existing businesses in the segments Automation & Specialty Components business declined at a low-single digit rate during 2016 as compared to 2015.
The businesses experienced sequential year-over-year improvement in demand during the second half of 2016 as compared to the first half of 2016.
During 2016, year-over-year demand declined for engine retarder products due primarily to weakness in the North American heavy-truck market, partly offset by strong growth in China and Europe.
In addition, year-over-year demand declined in certain medical and defense related end markets which were partly offset by increased year-over-year demand for industrial automation products particularly in China.
Geographically, sales from existing businesses in the segments Automation & Specialty Components businesses declined in North America, partly offset by growth in Western Europe and China.
Sales from existing businesses in the segments Franchise Distribution business grew at a mid-single digit rate during 2016, as compared to 2015, due primarily to continued net increases in franchisees as well as continued growth in demand for professional tool products and tool storage products, primarily in the United States.
This growth was partly offset by yearover-year declines in wheel service equipment sales during 2016.
Operating profit margins increased 70 basis points during 2016 as compared to 2015.
The following factors favorably impacted year-over-year operating profit margin comparisons: ?
Higher 2016 sales volumes, pricing improvements, incremental year-over-year cost savings associated with restructuring and productivity improvement initiatives and the incrementally favorable impact of the impairment of certain tradenames used in the segment in 2015 and 2016, net of costs associated with various growth investments, product development and sales and marketing growth investments, higher year-over-year costs associated with restructuring actions and changes in currency exchange rates: 65 basis points ?
The incremental net accretive effect in 2016 of acquired businesses: 5 basis points COST OF SALES AND GROSS PROFIT


Reinsurance of GMDB and GMIB guarantees Our net income is directly impacted by changes in the reserves calculated in connection with the reinsurance of variable annuity guarantees, primarily GMDB and GMIB.
These reserves are calculated in accordance with SOP 03-1 (SOP reserves) and changes in these reserves are reflected as life and annuity benefit expense, which is included in life underwriting income.
In addition, our net income is directly impacted by the change in the fair value of the GMIB liability (FVL), which is classified as a derivative according to FAS 133.
The fair value liability established for a GMIB reinsurance contract represents the difference between the fair value of the contract and the SOP 03-1 reserves.
Changes in the fair value of the GMIB liability, net of associated changes in the calculated SOP 03-1 reserve, are reflected as realized gains or losses.
ACE views our variable annuity reinsurance business as having a similar risk profile to that of catastrophe reinsurance, with the probability of long-term economic loss relatively small at the time of pricing.
Adverse changes in market factors and policyholder behavior will have an impact on both life underwriting income and net income.
When evaluating these risks, we expect to be compensated for taking both the risk of a cumulative long-term economic net loss, as well as the short-term accounting variations caused by these market movements.
Therefore, we evaluate this business in terms of its long-term economic risk and reward.
The ultimate risk to the variable annuity guaranty reinsurance business is a long-term underperformance of investment returns, which can be exacerbated by a long-term reduction in interest rates.
Following a market downturn, continued market underperformance over a period of five to seven years would eventually result in a higher level of paid claims as policyholders accessed their guarantees through death or annuitization.
However, if market conditions improved following a downturn, SOP 03-1 reserves and fair value liability would fall reflecting a decreased likelihood of future claims, which would result in an increase in both life underwriting income and net income.
As of December 31, 2008, management established the SOP 03-1 reserve based on the benefit ratio calculated using actual market values at December 31, 2008.
Management exercises judgment in determining the extent to which short-term market movements impact the SOP 03-1 reserve.
The SOP 03-1 reserve is based on the calculation of a long-term benefit ratio (or loss ratio) for the variable annuity guarantee reinsurance.
Despite the long-term nature of the risk the benefit ratio calculation is impacted by short-term market movements that may be judged by management to be temporary or transient.
Management will, in keeping with the language in SOP 03-1, regularly examine both quantitative and qualitative analysis and management will determine if, in its judgment, the change in the calculated benefit ratio is of sufficient magnitude and has persisted for a sufficient duration to warrant a change in the benefit ratio used to establish the SOP 03-1 reserve.
This has no impact on either premium received or claims paid nor does it impact the long-term profit or loss of the variable annuity guarantee reinsurance.
The SOP 03-1 reserve and fair value liability calculations are directly affected by market factors, including equity levels, interest rate levels, credit risk and implied volatilities, as well as policyholder behaviors, such as annuitization and lapse rates.
The table below shows the sensitivity, as of December 31, 2008, of the SOP 03-1 reserves and fair value liability associated with the variable annuity guarantee reinsurance portfolio.
In addition, the tables below show the sensitivity of the fair value of specific derivative instruments held (hedge value), which includes instruments purchased in January 2009, to partially offset the risk in the variable annuity guarantee reinsurance portfolio.
Although these derivatives do not receive hedge accounting treatment, some portion of the change in value may be used to offset changes in the SOP 03-1 reserve.


Fortron Industries LLC.
Fortron is a leading global producer of PPS, sold under the Fortron?
brand, which is used in a wide variety of automotive and other applications, especially those requiring heat and/or chemical resistance.
Fortron's facility is located in Wilmington, North Carolina.
This venture combines the sales, marketing, distribution, compounding and manufacturing expertise of Celanese with the PPS polymer technology expertise of Kureha America Inc.  Cellulose derivatives strategic ventures.
Our cellulose derivatives ventures generally fund their operations using operating cash flow and pay dividends based on each ventures' performance in the preceding year.
In 2014, 2013 and 2012, we received cash dividends of $115 million, $92 million and $83 million, respectively.
Although our ownership interest in each of our cellulose derivatives ventures exceeds 20%, we account for these investments using the cost method of accounting because we determined that we cannot exercise significant influence over these entities due to local government investment in and influence over these entities, limitations on our involvement in the day-to-day operations and the present inability of the entities to provide timely financial information prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").  ?
Other Equity Method Investments InfraServs.
We hold indirect ownership interests in several German InfraServ Groups that own and develop industrial parks and provide on-site general and administrative support to tenants.


| Common Stock Additional Paid-In Capital Accumulated other Comprehensive Loss Total Stockholders' Equity | (In thousands) | Balance, June 28, 2008 | Components of comprehensive income: | Net income | Unrealized actuarial loss on post-retirement benefits, net of tax | Tax effect of the unrealized exchange loss on long-term intercompany receivable | Unrealized gain on available-for-sale investments, net of tax | Total comprehensive income | Repurchase of common stock | Common stock issued under stock plans, net of shares withheld for employee taxes | Stock based compensation | Tax shortfall on settlement of equity instruments | Modification of equity instruments to liability | Modification of liability instruments to equity | Dividends paid | Balance, June 27, 2009 | Components of comprehensive income: | Net income | Unrealized actuarial loss on post-retirement benefits, net of tax | Tax effect of the unrealized exchange gain on long-term intercompany receivable | Unrealized loss on available-for-sale investments, net of tax | Unrealized loss on forward-exchange contracts, net of tax | Total comprehensive income | Repurchase of common stock | Common stock issued under stock plans, net of shares withheld for employee taxes | Stock based compensation | Tax shortfall on settlement of equity instruments | Derivative settlement, net of tax | Modification of equity instruments to liability | Common stock issued under Employee Stock Purchase Plan | Dividends paid | Balance, June 26, 2010 | Components of comprehensive income: | Net income | Unrealized actuarial loss on post-retirement benefits, net of tax | Tax effect of the unrealized exchange gain on long-term intercompany receivable | Unrealized loss on available-for-sale investments, net of tax | Total comprehensive income | Repurchase of common stock | Common stock issued under stock plans, net of shares withheld for employee taxes | Stock Options Exercised | Stock based compensation | Tax benefit on settlement of equity instruments | Modification of liability instruments to equity | Common stock issued under Employee Stock Purchase Plan | Dividends paid | Balance, June 25, 2011 |


ADOBE SYSTEMS INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 81 Foreign Currency Translation We translate assets and liabilities of foreign subsidiaries, whose functional currency is their local currency, at exchange rates in effect at the balance sheet date.
We translate revenue and expenses at the monthly average exchange rates.
We include accumulated net translation adjustments in stockholders equity as a component of accumulated other comprehensive income.
Property and Equipment We record property and equipment at cost less accumulated depreciation and amortization.
Property and equipment are depreciated using the straight-line method over their estimated useful lives ranging from 1 to 5 years for computers and equipment, 1 to 6 years for furniture and fixtures and up to 35 years for buildings.
Leasehold improvements are amortized using the straight-line method over the lesser of the remaining respective lease term or useful lives.
Goodwill, Purchased Intangibles and Other Long-Lived Assets We review our goodwill for impairment annually, or more frequently, if facts and circumstances warrant a review.
We completed our annual impairment test in the second quarter of fiscal 2009 and determined that there was no impairment.
Goodwill is assigned to one or more reporting segments on the date of acquisition.
We evaluate goodwill for impairment by comparing the fair value of each of our reporting segments to its carrying value, including the associated goodwill.
To determine the fair values, we use the market approach based on comparable publicly traded companies in similar lines of businesses and the income approach based on estimated discounted future cash flows.
Our cash flow assumptions consider historical and forecasted revenue, operating costs and other relevant factors.
We amortize intangible assets with finite lives over their estimated useful lives and review them for impairment whenever an impairment indicator exists.
We continually monitor events and changes in circumstances that could indicate carrying amounts of our long-lived assets, including our intangible assets may not be recoverable.
When such events or changes in circumstances occur, we assess recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows.
If the future undiscounted cash flows are less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets.
We did not recognize any intangible asset impairment charges in fiscal 2009, 2008 or 2007.
Our intangible assets are amortized over their estimated useful lives of 1 to 13 years as shown in the table below.
Amortization is based on the pattern in which the economic benefits of the intangible asset will be consumed.


| At December 31, 2014 | Fair Values-1 | Receivable | (dollars in millions) | Banks and securities firms | Insurance and other financial institutions | Non-financial entities | Total | At December 31, 2013 | Fair Values-1 | Receivable | (dollars in millions) | Banks and securities firms | Insurance and other financial institutions | Non-financial entities | Total |


| in millions 2010 2009 2008 | Net earnings (loss) | Depreciation, depletion, accretionand amortization | Goodwill impairment | Other operating cash flows, net | Net cash provided by operating activities |


| 2019 2020 2021 2022 2023 | (millions) | Evergy(a) | Westar Energy(a) | KCP&L | VIEs |


| (in millions) December 31, 2016 Net inflows (outflows) Acquisition-1 Market change FX impact-2 December 31, 2017 Full yearaverage AUM-3 | Active: | Equity | Fixed income | Multi-asset | Alternatives | Active subtotal | Index andiSharesETFs: | iSharesETFs: | Equity | Fixed income | Multi-asset | Alternatives | iSharesETFs subtotal | Non-ETF Index | Equity | Fixed income | Multi-asset | Alternatives | Non-ETF Index subtotal | Index &iSharesETFs subtotal | Long-term | Cash management | Advisory-4 | Total | (in millions) | Equity | Fixed income | Multi-asset | Alternatives: | Core | Currency and commodities-5 | Alternatives subtotal | Long-term | Cash management | Advisory-4 | Total |


Significant Variable Interests in Unconsolidated Variable Interest Entities for which the Company is not the Sponsor In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs for which it is not the sponsor.
These structured investments typically invest in fixed income investments and are managed by third parties and include assetbacked securities, commercial mortgage-backed securities and residential mortgage-backed securities.
The Companys maximum exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment.
The Company has not provided material financial or other support that was not contractually required to these structures.
The Company has determined that it is not the primary beneficiary of these structures due to its relative size and position in the capital structure of these entities.
Included among these structured investments are asset-backed securities issued by VIEs that manage investments in the European market.
In addition to a stated coupon, each investment provides a return based on the VIEs portfolio of assets and related investment activity.
The market value of these VIEs was approximately $7.5 billion as of December 31, 2009 and these VIEs were financed primarily through the issuance of notes similar to those purchased by the Company.
The Company generally accounts for these investments as available for sale fixed maturities containing embedded derivatives that are bifurcated and marked-to-market through Realized investment gains (losses), net, based upon the change in value of the underlying portfolio.
The Companys variable interest in each of these VIEs represents less than 50% of the only class of variable interests issued by the VIE.
The Companys maximum exposure to loss from these interests was $723 million and $1,095 million at December 31, 2009 and 2008, respectively, which includes the fair value of the embedded derivatives


2008 Outlook ?
Safety – Operating a safe railroad benefits our employees, our customers, our shareholders, and the public.
We will continue using a multi-faceted approach to safety, utilizing technology, risk assessment, quality control, and training for, and engaging with our employees.
We plan to implement Total Safety Culture (TSC) throughout our operations.
TSC, an employee-focused initiative that has helped improve safety, is a process designed to establish, maintain, and promote safety among co-workers.
With respect to public safety, we will continue our efforts to maintain, upgrade, and close crossings, install video cameras on locomotives, and educate the public about crossing safety through various internal and industry programs, along with other activities.  ?


Note 3.  Business Combinations Purchase Combinations.
During the fiscal years presented, the Company made a number of purchase acquisitions.
For each acquisition, the excess of the purchase price over the estimated value of the net tangible assets acquired was allocated to various intangible assets, consisting primarily of developed technology, customer and contract-related assets and goodwill.
The values assigned to developed technologies related to each acquisition were based upon future discounted cash flows related to the existing products’ projected income streams.
Goodwill, representing the excess of the purchase consideration over the fair value of tangible and identifiable intangible assets acquired in the acquisitions, will not to be amortized.
Goodwill is not deductible for tax purposes.
The amounts allocated to purchased in-process research and developments were determined through established valuation techniques in the high-technology industry and were expensed upon acquisition because technological feasibility had not been established and no future alternative uses existed.
The consolidated financial statements include the operating results of each business from the date of acquisition.
The Company does not consider these acquisitions to be material to its results of operations and is therefore not presenting pro forma statements of operations for the fiscal years ended October 31, 2006, 2005 and 2004.
Fiscal 2006 Acquisitions SIGMA-C Software AG (Sigma-C) The Company acquired Sigma-C on August 16, 2006 in an all-cash transaction.
Reasons for the Acquisition.
Sigma-C provides simulation software that allows semiconductor manufacturers and their suppliers to develop and optimize process sequences for optical lithography, e-beam lithography and next-generation lithography technologies.
The Company believes the acquisition will enable a tighter integration between design and manufacturing tools, allowing the Company’s customers to perform more accurate design layout analysis with 3D lithography simulation and better understand issues that affect IC wafer yields.
Purchase Price.
The Company paid $20.5 million in cash for the outstanding shares and shareholder notes of which $2.05 million was deposited with an escrow agent and will be paid per the escrow agreement.
The Company believes that the escrow amount will be paid.
The total purchase consideration consisted of:


| 2011 2012 2013 2014 2015 Thereafter No Single Maturity Total | Fixed interest-bearing securities: | Cash and cash equivalents | Interest rate | Time deposits | Interest rate | Available-for-sale securities: | Investment grade | Interest rate | Non-investment grade | Interest rate | Floating interest-bearing securities: | Cash and cash equivalents | Interest rate | Available-for-sale securities: | Investment grade | Interest rate | Non-investment grade | Interest rate | Loan payable to banks | Fixed interest rate |


| Years ended November 30, | Unobservable inputs | Average selling price | Absorption rate per quarter (homes) | Discount rate |


PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements Prudential Financial made a Section 338(g) election under the Internal Revenue Code with respect to this acquisition, resulting in the acquired entity being treated for U. S.  tax purposes as a newly-incorporated company.
Under such election, the U. S.  tax basis of the assets acquired and liabilities assumed of UniAsia Life Assurance Berhad was adjusted as of January 2, 2014, to reflect the consequences of the Section 338(g) election.
Acquisition of The Hartfords Individual Life Insurance Business In January 2013, the Company acquired the Hartford Life Business through a reinsurance transaction.
Under the agreement, the Company paid cash consideration of $615 million, primarily in the form of a ceding commission to provide reinsurance for approximately 700,000 life insurance policies with net retained face amount in force of approximately $141 billion.
The acquisition increased the Companys scale in the U. S.  individual life insurance market, particularly universal life products, and provides complementary distribution opportunities through expanded wirehouse and bank distribution channels.
The assets acquired and liabilities assumed have been included in the Companys Consolidated Financial Statements as of the acquisition date.
Total assets acquired were $11.2 billion, including $1.4 billion of VOBA and $0.1 billion of cash, and total liabilities assumed were $10.6 billion.
There is no goodwill, including tax deductible goodwill, associated with the acquisition.
Sale of Wealth Management Solutions Business In April 2013, the Company signed a definitive agreement to sell its wealth management solutions business to Envestnet Inc.
The transaction, which did not have a material impact to the Companys financial results, closed in July 2013.
Due to the existence of an ongoing contractual relationship between the Company and these operations, this disposition did not qualify for discontinued operations accounting treatment under U. S.  GAAP.4.


| 2008 | Net sales | Income from operations | Interest expense and other | Equity in income of affiliates | Income tax expense | Net earnings from operations | Net gain on sale (after-tax): | Containerboard, Packaging and Recyclingbusiness | Australian operations | Net earnings from discontinued operations |


| 2009 2010 2011 2012 2013 | Masco | S&P 500 Index | S&P Industrials Index | S&P Consumer Durables & Apparel Index |


Securities lending indemnification Through the Firms securities lending program, customers securities, via custodial and non-custodial arrangements, may be lent to third parties.
As part of this program, the Firm provides an indemnification in the lending agreements which protects the lender against the failure of the third-party borrower to return the lent securities in the event the Firm did not obtain sufficient collateral.
To minimize its liability under these indemnification agreements, the Firm obtains cash or other highly liquid collateral with a market value exceeding 100% of the value of the securities on loan from the borrower.
Collateral is marked to market daily to help assure that collateralization is adequate.
Additional collateral is called from the borrower if a shortfall exists, or collateral may be released to the borrower in the event of overcollateralization.
If a borrower defaults, the Firm would use the collateral held to purchase replacement securities in the market or to credit the lending customer with the cash equivalent thereof.
Also, as part of this program, the Firm invests cash collateral received from the borrower in accordance with approved guidelines.


| Pension Benefits Year Ended December 31, Other Benefits Year Ended December 31, | 2015 | (In millions) | Components of net periodic benefit cost: | Service cost | Interest cost | Expected return on plan assets | Amortization: | - prior service cost (credit) | - actuarial loss | Net curtailment loss (gain)(a) | Net settlement loss(b) | Net periodic benefit cost(c) | Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss (pretax): | Actuarial loss (gain)(d) | Amortization of actuarial gain (loss) | Prior service cost (credit) | Amortization of prior service credit (cost) | Total recognized in other comprehensive (income) loss | Total recognized in net periodic benefit cost and other comprehensive (income) loss |


| Fiscal year ended | (dollars in millions, except per share data) | Income statement data: | Revenues: | Domestic Company-owned stores | Domestic franchise | Domestic stores | Domestic distribution | International | Total revenues | Cost of sales | Operating margin | General and administrative expense | Income from operations | Interest income | Interest expense | Other -1 | Income before provision for income taxes | Provision for income taxes | Net income | Net income (loss) available to common stockholders (2) | Earnings (loss) per share: | Class L – basic | Class L – diluted | Common stock – basic | Common stock – diluted | Dividends declared per share -3 | Balance sheet data (at end of period): | Cash and cash equivalents | Working capital | Total assets | Total long-term debt, less current portion | Total debt | Cumulative preferred stock | Total stockholders’ deficit |


| In millions of dollars 2010 2009 2008 2007 2006 | OREO | Citicorp | Citi Holdings | Corporate/Other | Total OREO | North America | EMEA | Latin America | Asia | $1,703 | Other repossessed assets | Non-accrual assets—Total Citigroup | Corporate non-accrual loans | Consumer non-accrual loans | Non-accrual loans (NAL) | OREO | Other repossessed assets | Non-accrual assets (NAA) | NAL as a percentage of total loans | NAA as a percentage of total assets | Allowance for loan losses as a percentage of NAL-1(2) |


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ROPER INDUSTRIES, INC.  AND SUBSIDIARIES Years Ended December 31, 2007, 2006 and 2005 (1) SUMMARY OF ACCOUNTING POLICIES Basis of Presentation  These fi nancial statements present consolidated information for Roper Industries, Inc.  and its subsidiaries (Roper or the Company).
All signifi cant intercompany accounts and transactions have been eliminated.
Nature of the Business  Roper is a diversifi ed growth company that designs, manufactures and distributes energy systems and controls, scientifi c and industrial imaging products and software, industrial technology products and radio frequency (RF) products and services.
We market these products and services to selected segments of a broad range of markets, including radio frequency applications, water, energy, research and medical, security and other niche markets.
Accounts Receivable  Accounts receivable were stated net of an allowance for doubtful accounts and sales allowances of $11.9 million and $9.0 million at December 31, 2007 and 2006, respectively.
Outstanding accounts receivable balances are reviewed periodically, and allowances are provided at such time that management believes reasonable doubt exists that such balances will be collected within a reasonable period of time.
Cash and Cash Equivalents  Roper considers highly liquid fi nancial instruments with remaining maturities at acquisition of three months or less to be cash equivalents.
Roper had $198 million of cash equivalents at December 31, 2007 and no cash equivalents at December 31, 2006.
Earnings per Share  Basic earnings per share were calculated using net earnings and the weighted-average number of shares of common stock outstanding during the respective year.
Diluted earnings per share were calculated using net earnings and the weighted-average number of shares of common stock and potential common stock outstanding during the respective year.
Potentially dilutive common stock consisted of stock options, restricted stock awards and the premium over the conversion price on our senior subordinated convertible notes based upon the trading price of the Companys common stock.
The effects of potential common stock were determined using the treasury stock method (in thousands).


| In millions 2006 2007 2008 2009 2010 Thereafter | Total debt | Lease obligations | Purchase obligations (a) | Total |


| Defined benefit pension plans | As of or for the year ended December 31, | (in millions) | Change in benefit obligation | Benefit obligation, beginning of year | Benefits earned during the year | Interest cost on benefit obligations | Plan amendments | Special termination benefits | Curtailments | Employee contributions | Net gain/(loss) | Benefits paid | Expected Medicare Part D subsidy receipts | Foreign exchange impact and other | Benefit obligation, end of year | Change in plan assets | Fair value of plan assets, beginning of year | Actual return on plan assets | Firm contributions | Employee contributions | Benefits paid | Foreign exchange impact and other | Fair value of plan assets, end of year | Net funded status(a) | Accumulated benefit obligation, end of year |


| Millions 2010 2009 2008 | Cash provided by operating activities | Receivables securitization facility [a] | Cash provided by operating activitiesadjusted for the receivables securitizationfacility | Cash used in investing activities | Dividends paid | Free cash flow |


PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements The Company is participating in the IRS’s Compliance Assurance Program.
Under this program, the IRS assigns an examination team to review completed transactions as they occur in order to reach agreement with the Company on how they should be reported in the relevant tax returns.
If disagreements arise, accelerated resolutions programs are available to resolve the disagreements in a timely manner before the tax return is filed.
Some of the Company’s affiliates in Japan file a consolidated tax return, while others file separate tax returns.
The Company’s affiliates in Japan are subject to audits by the local taxing authority.
The general statute of limitations is five years from when the return is filed.
During 2016, the Tokyo Regional Taxation Bureau concluded a routine tax audit of the tax returns of the Company’s affiliates in Japan for their tax years ended March 31, 2013 to March 31, 2015.
These activities had no material impact on the Company’s 2016, 2017 or 2018 results.
The Company’s affiliates in South Korea file separate tax returns and are subject to audits by the local taxing authority.
The general statute of limitations is five years from when the return is filed.
The Korean National Tax Service did not conduct a tax audit of the tax returns of Prudential of Korea during the reporting period.16.


| December 31, 2017 December 31, 2016 | Dollars in millions | Commercial | Manufacturing | Retail/wholesale trade | Service providers | Real estate related (a) | Health care | Financial services | Transportation andwarehousing | Other industries | Total commercial loans |


| (In millions) 2014 2013 2012 | Average U.S. short-duration advances | Average non-U.S. short-duration advances | Average total short-duration advances | Average short-durance advances to average loans and leases |


| (In thousands) FairValueHierarchy Fair Value Year Ended November 30, 2012 Total Gains(Losses) (1) | Lennar Homebuilding: | Finished homes and construction in progress -2 | Land and land under development -3 | Rialto Investments: | REO - held-for-sale -4 | REO - held-and-used, net -5 |


| Interest Rate Exposure to Pretax Income | Interest Rate Increase 100 Basis Points | (in millions) | Asset-based management and distribution fees-1 | Variable annuity riders: | GMDB and GMIB | GMWB | GMAB | DAC and DSIC amortization-4 | Total variable annuity riders | Macro hedge program-5 | Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products | Brokerage client cash balances | Certificates | Indexed universal life insurance | Total |


| 2010 2009 2008 | Per Share | First quarter | Second quarter | Third quarter | Fourth quarter | $0.72 |


a.
Represents accretion of the fair value of environmental obligations assumed in the 2007 acquisition of FMC, which were determined on a discounted cash flow basis.
b.
Reductions primarily reflect revisions for changes in the anticipated scope and timing of projects and other noncash adjustments.
Estimated future environmental cash payments (on an undiscounted and unescalated basis) total $134 million in 2018, $132 million in 2019, $117 million in 2020, $119 million in 2021, $88 million in 2022 and $2.7 billion thereafter.
The amount and timing of these estimated payments will change as a result of changes in regulatory requirements, changes in scope and timing of remediation activities, the settlement of environmental matters and as actual spending occurs.
At December 31, 2017, FCXs environmental obligations totaled $1.4 billion, including $1.3 billion recorded on a discounted basis for those obligations assumed in the FMC acquisition at fair value.
On an undiscounted and unescalated basis, these obligations totaled $3.3 billion.
FCX estimates it is reasonably possible that these obligations could range between $2.8 billion and $3.7 billion on an undiscounted and unescalated basis.
At December 31, 2017, the most significant environmental obligations were associated with the Pinal Creek site in Arizona; the Newtown Creek site in New York City; historical smelter sites principally located in Arizona, Indiana, Kansas, Missouri, New Jersey, Oklahoma and Pennsylvania; and uranium mining sites in the western U. S.  The recorded environmental obligations for these sites totaled $1.3 billion at December 31, 2017.
FCX may also be subject to litigation brought by private parties, regulators and local governmental authorities related to these historical sites.
A discussion of these sites follows.


| December 31 | 2012 | (Dollars in millions) | Allowance for loan and lease losses | Residential mortgage | Home equity | Discontinued real estate | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer | Other consumer | Total consumer | U.S. commercial-1 | Commercial real estate | Commercial lease financing | Non-U.S. commercial | Total commercial-2 | Allowance for loan and lease losses | Reserve for unfunded lending commitments | Allowance for credit losses-3 |


(1) The North Sea includes acreage in the UK and the Netherlands.
Electricity Sales and Expense We have a 100% ownership interest in an integrated natural gas-to-power project.
The project includes the Amistad natural gas field, offshore Ecuador, which supplies fuel to the Machala power plant.
Electricity sales are included in other revenues and electricity generation expense is included in other operating expense, net in the consolidated statements of operations.
Operating data is as follows:


| Year Ended December 31, | 2010 | % of | $ | (In millions, except percentages) | North America | Europe and Africa | Asia-Pacific | South America | Total |


| Outstanding  Principal Balance Loan Loss Allowance % 30+ Days  Past Due | Amount | As of April 30, 2010: | Purchased from SCC | All other | $683,684 | As of April 30, 2009: | Purchased from SCC | All other | $821,837 |


Other Equity-Based Compensation Arrangements The Company granted 10,640 shares, 24,540 shares and 22,420 shares of restricted stock in 2014, 2013 and 2012, respectively, to members of its board of directors.
These grants generally vest oneyear from the date of the grant and have a fair value equal to the market price of the Companys stock on the grant date.
The Company recorded total non-cash compensation expense of $0.8 million, $1.0 million and $0.8 million in 2014, 2013 and 2012, respectively, related to these restricted stock awards.
All non-cash compensation expense amounts are recorded in general and administrative expense.
As of December 28, 2014, there was approximately $0.1 million of total unrecognized compensation cost related to these restricted stock grants.
The Company granted 119,670 shares, 312,330 shares and 282,170 shares of performance-based restricted stock in 2014, 2013 and 2012, respectively, to certain employees of the Company.
The performance-based restricted stock awards granted in 2012 are separated into three tranches and have time-based and performance-based vesting conditions with the last tranche vesting three years from the issuance date.
The performance-based restricted stock awards granted in 2013 and 2014 are separated into four tranches and have time-based and performance-based vesting conditions with the last tranche vesting four years from the issuance date.
These awards also contain provisions for accelerated vesting upon the retirement of holders that have achieved specific service and age requirements.
These awards are considered granted for accounting purposes when the performance target is set, which is generally in the fourth quarter of each year.
The Company recorded total non-cash compensation expense of $12.4 million, $14.1 million and $11.5 million in 2014, 2013 and 2012, respectively, related to these awards.
All non-cash compensation expense amounts are recorded in general and administrative expense.
As of December 28, 2014, there was an estimated $24.4 million of total unrecognized compensation cost related to performance-based restricted stock.


| 2014 2013 2012 | U.S. Plans | Actuarial assumptions used to determine benefit obligations as of December 31: | Discount rate | Rate of compensation increase | Actuarial assumptions used to determine net periodic pension cost for years ended December 31: | Discount rate | Expected long-term rate of return on plan assets (b) | Rate of compensation increase |


| For the Years Ended December 31, | 2010 | (In thousands) | Free cash flow | Add back: | Purchases of property and equipment | Net cash flows from operating activities |


| Payments Due By Fiscal Year  (in $000’s) | Contractual Obligations | Operating Lease Commitments | Contractual Obligations | Total Obligations |


| Segments Senior Housing Triple-Net SHOP Life Science Medical Office Other Non-reportable Corporate Non-segment Total | Real estate revenues-1 | Operating expenses | NOI | Adjustments to NOI-2 | Adjusted NOI | Addback adjustments | Interest income | Interest expense | Depreciation and amortization | General and administrative | Transaction costs | Recoveries (impairments), net | Gain (loss) on sales of real estate, net | Loss on debt extinguishment | Other income (expense), net | Income tax benefit (expense) | Equity income (loss) from unconsolidated joint ventures | Net income (loss) |


| -1 (2) December 31, 2007 December 31, 2006 | NAIC Designation | (in millions) | 1 | 2 | Subtotal Investment Grade | 3 | 4 | 5 | 6 | Subtotal Below Investment Grade | Total Private Trading Account Assets Supporting Insurance Liabilities |


(1) At December 31, 2009, maximum loss exposure represents the total retained interests held by the Corporation and also includes $2.3 billion related to a liquidity support commitment the Corporation provided to one of the U. S.  Credit Card Securitization Trusts commercial paper program.
This commercial paper program was terminated in 2010.
(2) As a holder of these securities, the Corporation receives scheduled principal and interest payments.
During 2009, there were no OTTI losses recorded on those securities classified as AFS or HTM debt securities.
(3) At December 31, 2010 and 2009, loans and leases includes $20.4 billion and $10.8 billion of sellers interest and $3.8 billion and $4.1 billion of discount receivables.
(4) At December 31, 2010, all other assets includes restricted cash accounts and unbilled accrued interest and fees.
At December 31, 2009, all other assets includes discount subordinate interests in accrued interest and fees on the securitized receivables, cash reserve accounts and interest-only strips which are carried at fair value.
During 2010, $2.9 billion of new senior debt securities were issued to external investors from the credit card securitization trusts.
There were no new debt securities issued to external investors from the credit card securitization trusts during 2009.
Collections reinvested in revolving period securitizations were $133.8 billion and cash flows received on residual interests were $5.5 billion during 2009.
At December 31, 2009, there were no recognized servicing assets or liabilities associated with any of the credit card securitization transactions.
The Corporation recorded $2.0 billion in servicing fees related to credit card securitizations during 2009.
During 2010 and 2009, subordinate securities with a notional principal amount of $11.5 billion and $7.8 billion and a stated interest rate of zero percent were issued by certain credit card securitization trusts to the Corporation.
In addition, the Corporation has elected to designate a specified percentage of new receivables transferred to the trusts as discount receivables such that principal collections thereon are added to finance charges which increases the yield in the trust.
Through the designation of newly transferred receivables as discount receivables, the Corporation has subordinated a portion of its sellers interest to the investors interest.
These actions, which were specifically permitted by the terms of the trust documents, were taken in an effort to address the decline in the excess spread of the U. S.  and U. K.  Credit Card Securitization Trusts.
As these trusts were consolidated on January 1, 2010, the issuance of subordinate securities and the discount receivables election had no impact on the Corporations consolidated results during 2010 or 2009.
At December 31, 2009, the carrying amount and fair value of the retained subordinate securities were $6.6 billion and $6.4 billion.
These balances were eliminated on January 1, 2010 with the consolidation of the trusts.
The outstanding principal balance of discount receivables, which are classified in loans and leases, was $3.8 billion and $4.1 billion at December 31, 2010 and 2009.
The notional amounts presented in Table 45 represent the total contract/ notional amount of credit derivatives outstanding and include both purchased and written credit derivatives.
The credit risk amounts are measured as the net replacement cost, in the event the counterparties with contracts in a gain position to us fail to per form under the terms of those contracts.
For information on the per formance risk of our written credit derivatives, see Note 4  Derivatives to the Consolidated Financial Statements.
The credit risk amounts discussed on page 96 and noted in the table below take into consideration the effects of legally enforceable master netting agreements while amounts disclosed in Note 4  Derivatives to the Consolidated Financial Statements are shown on a gross basis.
Credit risk reflects the potential benefit from offsetting exposure to non-credit derivative products with the same counterparties that may be netted upon the occurrence of certain events, thereby reducing the Corporations overall exposure.


Profit Sharing 401(k) Plan The Company has a qualified profit sharing plan covering substantially all of its employees.
Contributions to the plan are at the discretion of the Company’s Board of Directors.
The Company made contributions of $5,725, $5,305 and $1,572 for fiscal years 2009, 2008 and 2007, respectively.11.


(a) Represents the net fair value of assets and liabilities.2012 VERSUS 2011 CONSOLIDATED INCOME STATEMENT REVIEW Summary Results Net income for 2012 was $3.0 billion, or $5.30 per diluted common share, compared with $3.1 billion, or $5.64 per diluted common share, for 2011.
Revenue growth of 8% and a decline in the provision for credit losses were more than offset by a 16% increase in noninterest expense in 2012 compared to 2011.
Net Interest Income Net interest income increased to $9.6 billion in 2012 compared with $8.7 billion in 2011, primarily due to the impact of the RBC Bank (USA) acquisition, organic loan growth and lower funding costs.
The net interest margin remained relatively flat at 3.94% in 2012 compared with 3.92% in 2011.
The modest increase in the comparison was primarily due to a decrease in the weighted-average rate paid on total interest-bearing liabilities, primarily due to the runoff of maturing retail certificates of deposit and the redemption of additional trust preferred and hybrid capital securities during 2012, in addition to an increase in FHLB borrowings and commercial paper as lowercost funding sources.
This impact was mostly offset by a decrease in the yield on total interest-earning assets, which reflected lower rates on new loan volume and lower yields on new securities.
Noninterest Income Noninterest income increased to $5.9 billion in 2012 compared with $5.6 billion in 2011.
The overall increase in the comparison was primarily due to an increase in residential mortgage loan sales revenue driven by higher loan origination volume, gains on sales of Visa Class B common shares and higher corporate service fees, largely offset by higher provision for residential mortgage repurchase obligations.
Noninterest income as a percentage of total revenue was 38% in 2012 compared with 39% in 2011.
Asset management revenue increased to $1.2 billion in 2012 compared with $1.1 billion in 2011, primarily due to higher earnings from our BlackRock investment.
Discretionary assets under management increased to $112 billion at December 31, 2012 compared with $107 billion at December 31, 2011 driven by stronger average equity markets, positive net flows, after adjustments to total net flows for cyclical client activities, and strong sales performance.
Consumer services fees declined to $1.1 billion compared with $1.2 billion in 2011.
The decline reflected the regulatory impact of lower interchange fees on debit card transactions partially offset by customer growth.
As further discussed in the Retail Banking portion of the Business Segments Review section of Item 7 in our 2012 Form 10-K, the Dodd-Frank limits on interchange rates were effective October 1, 2011 and had a negative impact on revenue of approximately $314 million in 2012 and $75 million in 2011.
This impact was partially offset by higher volumes of merchant, customer credit card and debit card transactions and the impact of the RBC Bank (USA) acquisition.
Corporate services revenue increased by $.3 billion, or 30%, to $1.2 billion in 2012 compared with $.9 billion in 2011 due to higher commercial mortgage servicing revenue and higher merger and acquisition advisory fees in 2012.
The comparison also reflected the impact of valuation gains from rising interest rates on commercial mortgage servicing rights valuations, which were $31 million in 2012 compared to a loss of $152 million in 2011.
an institution rated single-A by the credit rating agencies.
Given the illiquid nature of many of these types of investments, it can be a challenge to determine their fair values.
See Note 7 Fair Value in the Notes To Consolidated Financial Statements in Item 8 of this Report for additional information.
Various PNC business units manage our equity and other investment activities.
Our businesses are responsible for making investment decisions within the approved policy limits and associated guidelines.
A summary of our equity investments follows: Table 48: Equity Investments Summary


| American US Airways Wholly-owned Regional Carriers Total | Pilots | Flight attendants | Maintenance personnel | Fleet service personnel | Passenger service personnel | Administrative and other | Total |


Trading Securities Trading securities include investments in mutual funds held in a separate trust, which are owned as part of the Company’s supplemental retirement plan.
(See discussion in Note 14. )
Equity Method Investments Equity method investments principally include ownership interests in unconsolidated ventures determined to be VIEs.
All equity method investees are privately owned.
The carrying values of the Company’s equity-method investments are consistent with its ownership in the underlying net assets of the investees.
The carrying values of equity method investments increased as a result of additional funding provided and interest earnings recorded on the note receivable from OWN and the $273 million step-up for the disposition of the Discovery Health network and retained equity interest in OWN.
(See Note 4).
These increases were partially offset by losses and dividends from equity method investments.
Consolidated


As of December 31, 2016, our liability for uncertain income tax positions was $4.2 million.
Due to the high degree of uncertainty regarding timing of potential future cash flows associated with these liabilities, we are unable to make a reasonably reliable estimate of the amount and period in which these liabilities might be paid.
We utilize blanket purchase orders to communicate expected annual requirements to many of our suppliers.
Requirements under blanket purchase orders generally do not become committed until several weeks prior to our scheduled unit production.
The purchase obligation amount presented above represents the value of commitments that we consider firm.
Recent Accounting Pronouncements Refer to Recent Accounting Pronouncements in Note 1 of Notes to Consolidated Financial Statements.
Derivative Instruments — Fair values for foreign currency derivatives are determined using pricing models based on the prevailing forward exchange rate of the underlying currencies.
The fair values of interest rate derivatives are based on broker quotes that utilize current market interest rate forecasts.
Pension Benefits Xcel Energy has several noncontributory, defined benefit pension plans that cover almost all employees.
Generally, benefits are based on a combination of years of service, the employee’s average pay and, in some cases, social security benefits.
Xcel Energy’s policy is to fully fund into an external trust the actuarially determined pension costs recognized for ratemaking and financial reporting purposes, subject to the limitations of applicable employee benefit and tax laws.
In addition to the qualified pension plans, Xcel Energy maintains a supplemental executive retirement plan (SERP) and a nonqualified pension plan.
The SERP is maintained for certain executives that were participants in the plan in 2008, when the SERP was closed to new participants.
The nonqualified pension plan provides unfunded, nonqualified benefits for compensation that is in excess of the limits applicable to the qualified pension plans.
The total obligations of the SERP and nonqualified plan as of Dec.  31, 2015 and 2014 were $41.8 million and $46.5 million, respectively.
In 2015 and 2014, Xcel Energy recognized net benefit cost for financial reporting for the SERP and nonqualified plans of $9.5 million and $4.7 million, respectively.
Benefits for these unfunded plans are paid out of Xcel Energy’s consolidated operating cash flows.
Xcel Energy bases the investment-return assumption on expected long-term performance for each of the investment types included in its pension asset portfolio.
Xcel Energy considers the historical returns achieved by its asset portfolio over the past 20-year or longer period, as well as the long-term return levels projected and recommended by investment experts.
Xcel Energy continually reviews its pension assumptions.
The pension cost determination assumes a forecasted mix of investment types over the long-term.  ?
Investment returns in 2015 were below the assumed level of 7.09 percent; ?
Investment returns in 2014 were above the assumed level of 7.05 percent; ?
Investment returns in 2013 were below the assumed level of 6.88 percent; and ?
In 2016, Xcel Energy’s expected investment return assumption is 6.87 percent.
The assets are invested in a portfolio according to Xcel Energy’s return, liquidity and diversification objectives to provide a source of funding for plan obligations and minimize the necessity of contributions to the plan, within appropriate levels of risk.
The principal mechanism for achieving these objectives is the projected allocation of assets to selected asset classes, given the long-term risk, return, and liquidity characteristics of each particular asset class.
There were no significant concentrations of risk in any particular industry, index, or entity.
Market volatility can impact even well-diversified portfolios and significantly affect the return levels achieved by pension assets in any year.
The following table presents the target pension asset allocations for Xcel Energy at Dec.  31 for the upcoming year:


(1)  Options to purchase approximately 3,319 common stock shares in 2004, 15,231 common stock shares in 2003, and 109,897 common stock shares in 2002 at various prices were outstanding at the end of those years that were not included in the computation of diluted earnings per share because the exercise prices were greater than the common share average market price at the end of each of the years presented.


| Year ended June 30, | 2011 | Net income | Non-cash expenses | Change in receivables | Change in deferred revenue | Change in other assets and liabilities | Net cash from operating activities |


| NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (A) WEIGHTED AVERAGE EXERCISE PRICEOF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (B) NUMBEROF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (A)) (C) | Equity compensation plans approved by security holders | Equity compensation plans not approved by security holders | Total | TOTAL NUMBER OF SHARES (ORUNITS) PURCHASED (A) | Common Stock Repurchases During the Third Quarter: | June 27 – July 30 | July 31 – August 27 | August 28 – September 24 | Total repurchases during third quarter | Common Stock Repurchases During the Fourth Quarter: | September 25 – October 29 | October 30 – November 26 | November 27 – December 31 | Total repurchases during fourth quarter | Total common stock repurchases during 2006 |


| For the year ended December 31, | 2007 | (in millions) | Premiums and other considerations: | Direct | Assumed | Ceded | Net premiums and other considerations | Benefits, claims and settlement expenses: | Direct | Assumed | Ceded | Net benefits, claims and settlement expenses |


| As of December 31, 2013 | $ in millions | Cash and cash equivalents | Fund investments | Equity securities | Government debt securities | Other assets | Guaranteed investment contracts | Total |