A discussion of each of Torchmarks segments follows.
The following discussions are presented in the manner we view our operations, as described in Note 14Business Segments
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) the realization of this investment gain ($5,624 net of the award).
This award, which will be paid out over a three-year period, is presented as Deferred compensation award on the balance sheet.
As of December 31, 2002, $1,504 had been paid against this compensation award.401(K) Plan During August 1997, the Company implemented a 401(K) Savings/Retirement Plan (the 401(K) Plan) to cover eligible employees of the Company and any designated affiliate.
The 401(K) Plan permits eligible employees of the Company to defer up to 15% of their annual compensation, subject to certain limitations imposed by the Code.
The employees elective deferrals are immediately vested and non-forfeitable upon contribution to the 401(K) Plan.
During 2000, the Company amended its 401(K) Plan to include a matching contribution, subject to ERISA limitations, equal to 50% of the first 4% of annual compensation deferred by an employee.
For the years ended December 31, 2002, 2001 and 2000, the Company made matching contributions of $140, $116 and $54, respectively.18.
Commitments and Contingencies The Company and the Operating Partnership are not presently involved in any material litigation nor, to their knowledge, is any material litigation threatened against them or their properties, other than routine litigation arising in the ordinary course of business.
Management believes the costs, if any, incurred by the Company and the Operating Partnership related to this litigation will not materially affect the financial position, operating results or liquidity of the Company and the Operating Partnership.
On October 24, 2001, an accident occurred at 215 Park Avenue South, a property which the Company manages, but does not own.
Personal injury claims have been filed against the Company and others by 11 persons.
The Company believes that there is sufficient insurance coverage to cover the cost of such claims, as well as any other personal injury or property claims which may arise.
The Company has entered into employment agreements with certain executives.
Six executives have employment agreements which expire between November 2003 and December 2007.
The cash based compensation associated with these employment agreements totals approximately $2,125 for 2003.
During March 1998, the Company acquired an operating sub-leasehold position at 420 Lexington Avenue.
The operating sub-leasehold position requires annual ground lease payments totaling $6,000 and sub-leasehold position payments totaling $1,100 (excluding an operating sub-lease position purchased January 1999).
The ground lease and sub-leasehold positions expire 2008.
The Company may extend the positions through 2029 at market rents.
The property located at 1140 Avenue of the Americas operates under a net ground lease ($348 annually) with a term expiration date of 2016 and with an option to renew for an additional 50 years.
The property located at 711 Third Avenue operates under an operating sub-lease which expires in 2083.
Under the sublease, the Company is responsible for ground rent payments of $1,600 annually which increased to $3,100 in July 2001 and will continue for the next ten years.
The ground rent is reset after year ten based on the estimated fair market value of the property.
In April 1988, the SL Green predecessor entered into a lease agreement for property at 673 First Avenue in New York City, which has been capitalized for financial statement purposes.
Land was estimated to be approximately 70% of the fair market value of the property.
The portion of the lease attributed to land is classified as an operating lease and the remainder as a capital lease.
The initial lease term is 49 years with an option for an additional 26 years.
Beginning in lease years 11 and 25, the lessor is entitled to additional rent as defined by the lease agreement.
The Company continues to lease the 673 First Avenue property which has been classified as a capital lease with a cost basis of $12,208 and cumulative amortization of $3,579 and $3,306 at December 31, 2002 and 2001, respectively.
The following is a schedule of future minimum lease payments under capital leases and noncancellable operating leases with initial terms in excess of one year as of December 31, 2002.


(1) See Non-GAAP Financial Measures for further information on and reconciliation of as adjusted items.
(2) Net of net income (loss) attributable to NCI.
The Companys tax rate is affected by tax rates in foreign jurisdictions and the relative amount of income earned in those jurisdictions, which the Company expects to be fairly consistent in the near term.
The significant foreign jurisdictions that have lower statutory tax rates than the U. S.  federal statutory rate of 35% include the United Kingdom, Channel Islands, Ireland and Canada.
U. S.  income taxes were not provided for certain undistributed foreign earnings intended to be indefinitely reinvested outside the United States.2016.
Income tax expense (GAAP) reflected: ?
a net noncash benefit of $30 million, primarily associated with the revaluation of certain deferred income tax liabilities; and ?
a benefit from $65 million of nonrecurring items, including the resolution of certain outstanding tax matters.
The as adjusted effective tax rate of 29.6% for 2016 excluded the net noncash benefit of $30 million mentioned above, as it will not have a cash flow impact and to ensure comparability among periods presented.2015.
Income tax expense (GAAP) reflected: ?
a net noncash benefit of $54 million, primarily associated with the revaluation of certain deferred income tax liabilities; and ?
a benefit from $75 million of nonrecurring items, primarily due to the realization of losses from changes in the Companys organizational tax structure and the resolution of certain outstanding tax matters.
The as adjusted effective tax rate of 28.4% for 2015 excluded the net noncash benefit of $54 million mentioned above, as it will not have a cash flow impact and to ensure comparability among periods presented 2014.
Income tax expense (GAAP) reflected: ?
a $94 million tax benefit, primarily due to the resolution of certain outstanding tax matters related to the acquisition of BGI, including the previously mentioned $50 million tax benefit (see Executive Summary for more information); ?
a $73 million net tax benefit related to several favorable nonrecurring items; and ?
a net noncash benefit of $9 million associated with the revaluation of deferred income tax liabilities.
The as adjusted effective tax rate of 26.6% for 2014 excluded the $9 million net noncash benefit as it will not have a cash flow impact and to ensure comparability among periods presented and the $50 million tax benefit mentioned above.
The $50 million general and administrative expense and $50 million tax benefit have been excluded from as adjusted results as there is no impact on BlackRocks book value.


| Location Description Building  Size  (SqFt) Property  Size  (Acres) Owned /  Leased Lease  Termination  Date | Rig Technology: | Lanzhou, China | Pampa, Texas | Houston, Texas | Ulsan, South Korea | Houston, Texas | Houston, Texas | Fort Worth, Texas | Sugar Land, Texas | Cedar Park, Texas | Carquefou, France | Galena Park, Texas | Lafayette,Louisiana | Aberdeen, Scotland | Houston, Texas | Kristiansand,Norway | Orange, California | Singapore | Anderson, Texas | Houston, Texas | Duncan, Oklahoma | Conroe, Texas | Molde, Norway | Etten Leur,Netherlands | Sogne, Norway | Edmonton, Canada | Stavanger, Norway | Dubai, UAE | Aracaju, Brazil | New Iberia, Louisiana |


Ã¿Ã¾Operation and Maintenance  The following table and ensuing discussions provide explanations for the variances related to the major  components of operation and maintenance expense:  @T@  In 2017, operation and maintenance expense decreased $35 million, or 9.4%
  $44 million decrease in operating supplies and services principally due to lower capital upgrades in our  Military Services Group in 2017, as discussed above, as well as lower advertising and marketing  expense in our Homeowners Services Group; partially offset by a  $3 million increase in employee-related costs largely attributable to higher headcount in Keystone due to an increase in operations as a result of market recovery in the natural gas industry, offset in part in  our Contract Operations Group as several contracts were completed in 2017; and a  $5 million increase in other mainly due to an increase in customer uncollectible expense in our  Homeowner Services Group as a result of contract growth in 2017.
  In 2016, operation and maintenance expense increased $14 million, or 3.9%
  $11 million increase from Keystone, which was acquired in the third quarter of 2015, including   $8 million in employee-related costs and $1 million each in production costs, operating supplies and   services, and an;   $11 million increase in maintenance materials and supplies largely attributable to contract growth in   our Homeowner Services and Contract Operations Groups, and higher claims


| Revenues Property, Plant and Equipment | Dollars in Millions | United States | Europe | Rest of the World | Other(a) | Total |


Ameren Missouris cash used in investing activities increased $76 million during 2012, compared with 2011.
Capital expenditures increased $45 million primarily because of increased expenditures for maintenance and reliability, boiler, and turbine projects, which more than offset a $29 million decrease in storm restoration costs.
Cash flows used in investing activities also increased due to a $29 million increase in nuclear fuel expenditures due to timing of purchases for the spring 2013 reload.
In 2012, cash flows from investing activities benefited from $18 million of federal tax grants received related to renewable energy construction projects.
In 2011, cash flows used in investing activities benefited from a $9 million payment received from a settlement with the DOE related to nuclear waste disposal.


| As of December | $ in millions | Held for investment | Held for sale | At fair value | Total |


| (In millions) 2009 2008 2007 | Revenues applicable to discontinued operations | Pretax income from discontinued operations |


| December 31, 2007 | Employee Stock Options | Weighted Average Remaining Contractual Term | (in years) | Outstanding | Vested and expected to vest | Exercisable | Restricted Stock Shares | Restricted at December 31, 2004 | Granted | Forfeited | Performance adjustment-2 | Released | Restricted at December 31, 2005 | Granted | Forfeited | Performance adjustment-2 | Released | Restricted at December 31, 2006 | Granted | Forfeited | Performance adjustment-2 | Released | Restricted at December 31, 2007 |


| 2009 2008 2007 | Basic earnings per share | As reported | Two-class method | Diluted earnings per share-1 | As reported | Two-class method |


| Year Ended December 31, | 2008 | Statement of Operations Data: | Revenue | Expenses: | Cost of operations | Depreciation amortization and depletion | Accretion | Selling, general and administrative | Asset impairments | Restructuring charges | Operating income | Interest expense | Interest income | Other income (expense), net | Income before income taxes | Provision for income taxes | Minority interests | Net income | Basic earnings per share: | Basic earnings per share | Weighted average common shares outstanding | Diluted earnings per share: | Diluted earnings per share | Weighted average common and common equivalent shares outstanding | Cash dividends per common share |


| Loss ratio(a) 124.2 100.7 73.7 23.5 27.0 | Acquisition ratio | General operating expense ratio | Expense ratio | Combined ratio(a) | Adjustments for accident year loss ratio, as adjusted, and accident year combined ratio, as adjusted: | Catastrophe losses and reinstatement premiums | Prior year development net of premium adjustments | Accident year loss ratio, as adjusted | Accident year combined ratio, as adjusted |


| Net open position long/(short) | Derivatives designated as hedging contracts | Crude oil | Natural gas fixed price | Natural gas basis | Derivatives not designated as hedging contracts | Natural gas basis |


| 2016 2015 2014 2013 | $22,503 |


| (in millions) 2017 2016 2015 2017 v. 2016 2016 v. 2015 | Revenue | Gross profit | Gross margin | Total operating expenses | Expense to revenue ratio | Restructuring and realignment costs | Sensus acquisition related charges | Special charges | Operating expenses excluding restructuring and realignment costs, Sensus acquisition related costs and special charges | Expense to revenue ratio | Operating income | Operating margin | Interest and other non-operating expense (income), net | (Loss)/gain from sale of businesses | Income tax expense | Tax rate | Net income |


| Years Ended December 31, | (Dollars in millions) | 2012 | Attritional | Catastrophes | A&E | Total segment | 2011 | Attritional | Catastrophes | A&E | Total segment | 2010 | Attritional | Catastrophes | A&E | Total segment | Variance 2012/2011 | Attritional | Catastrophes | A&E | Total segment | Variance 2011/2010 | Attritional | Catastrophes | A&E | Total segment | (Some amounts may not reconcile due to rounding.) |


| Options Outstanding Options Exercisable | Range ofExercise Prices | $3.09 — $9.99 | $10.00 — $19.99 | 6 | Options exercisable and expected to become exercisable |


| Con Edison CECONY | (Millions of Dollars) | Balance at January 1 | Additions based on tax positions related to the current year | Additions based on tax positions of prior years | Reductions for tax positions of prior years | Settlements | Balance at December 31 |


| Years Ended December 31 2011 2010 | Derivatives designated in fair value hedging relationships | Interest rate swap contracts | Amount of gain recognized inOther (income) expense, neton derivatives | Amount of loss recognized inOther (income) expense, neton hedged item | Derivatives designated in foreign currency cash flow hedging relationships | Foreign exchange contracts | Amount of loss reclassified fromAOCItoSales | Amount of loss (gain) recognized inOCIon derivatives | Derivatives designated in foreign currency net investment hedging relationships | Foreign exchange contracts | Amount of gain recognized inOther (income) expense, netonderivatives(1) | Amount of loss recognized inOCIon deriviatives | Derivatives not designated in a hedging relationship | Foreign exchange contracts | Amount of gain recognized inOther (income) expense, netonderivatives(2) | Amount of gain recognized inSales |


(1) Diversification benefit equals the difference between the total VaR and the sum of the component VaRs.
This benefit arises because the simulated one-day losses for each of the components occur on different days; similar diversification benefits also are taken into account within each component.
(2) N/A–Not Applicable.
The minimum and maximum VaR values for the total VaR and each of the component VaRs might have occurred on different days during the year, and therefore the diversification benefit is not an applicable measure.
The current VaR model estimates are lower than the VaR estimates produced under the prior model because the prior model places more emphasis on the large market moves experienced during the 2008 financial crisis, whereas the current model emphasized more recent volatility, which has been generally lower.
VaR Statistics under Varying Assumptions.
VaR statistics are not readily comparable across firms because of differences in the breadth of products included in each firm’s VaR model, in the statistical assumptions made when simulating changes in market risk factors, and in the methods used to approximate portfolio revaluations under the simulated market conditions.
These differences can result in materially different VaR estimates for similar portfolios.
The impact varies depending on the factor history assumptions, the frequency with which the factor history is updated, and the confidence level.
As a result, VaR statistics are more reliable and relevant when used as indicators of trends in risk taking rather than as a basis for inferring differences in risk taking across firms.


| December 31, 2016 December 31, 2015-1 | PrudentialFinancial | (in millions) | General obligation short-term debt: | Commercial paper | Current portion of long-term debt | Subtotal | General obligation long-term debt: | Senior debt | Junior subordinated debt | Surplus notes -2 | Subtotal | Total general obligations | Limited and non-recourse borrowings -3 | Current portion of long-term debt | Long-term debt | Subtotal | Total borrowings |


| 2014 2013 2012 | (In millions) | Gross amounts of unrecognized tax benefits as of the beginning of the period | Increases related to prior period tax positions | Decreases related to prior period tax positions | Increases related to current period tax positions | Settlements | Gross amounts of unrecognized tax benefits as of the end of the period |


| (in billions, except ratios) 2003 2002 Change | Loan and lease receivables | Average loan and lease receivables | Automobile origination volume | Automobile market share | 30+ day delinquency rate | Net charge-off ratio | Overhead ratio |


| Company / Index 2009 2010 2011 2012 2013 2014 | Teleflex Incorporated | S&P 500 Index | S&P 500 Healthcare Equipment & Supply Index |


Perrigo Company plc - Item 7 Financial Condition, Liquidity and Capital Resources Contractual Obligations Our enforceable and legally binding obligations as of December 31, 2018 are set forth in the following table.
Some of the amounts included in this table are based on management’s estimates and assumptions about these obligations, including the duration, the possibility of renewal, anticipated actions by third parties and other factors.
Because these estimates and assumptions are necessarily subjective, the enforceable and legally binding obligations actually paid in future periods may vary from the amounts reflected in the table (in millions):


| Payments Due During the Year Ending December 31, Debt Leases Purchase Obligations Total | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | $12,522 |


Equity Securities The net change in unrealized gains (losses) from equity securities, still held at period end, recorded within Other income (loss), was $(1,157) million during the year ended December 31, 2018.
The net change in unrealized gains (losses) from equity securities, still held at period end, recorded within Other comprehensive income (loss), was $(494) million and $760 million during the years ended December 31, 2017 and 2016, respectively.
Benefits and expenses increased $735 million.
Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses increased $709 million primarily driven by an increase in policyholders benefits, including the change in policy reserves, related to the increase in premiums discussed above.
Account Values Account values are a significant driver of our operating results, and are primarily driven by net additions (withdrawals) and the impact of market changes.
The income we earn on most of our fee-based products varies with the level of fee-based account values, since many policy fees are determined by these values.
The investment income and interest we credit to policyholders on our spread-based products varies with the level of general account values.
To a lesser extent, changes in account values impact our pattern of amortization of DAC and VOBA and general and administrative expenses.
The following table shows the changes in the account values and net additions (withdrawals) of Retirement segment products for the periods indicated.
Net additions (withdrawals) are plan sales and participant deposits or additions, as applicable, minus plan and participant withdrawals and benefits.
Account values include both internally- and externallymanaged client balances as the total balances drive revenue for the Retirement segment.
For more information on internally-managed balances, see PGIM.


| JPMorgan Chase & Co.(d) | (in millions,except ratios) | Regulatory capital | CET1 capital | Tier 1 capital(a) | Total capital | Assets | Risk-weighted | Adjusted average(b) | Capital ratios(c) | CET1 | Tier 1(a) | Total | Tier 1 leverage |


| Units Weighted-Average Grant-Date Fair Value Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value | Outstanding at January 1, 2009 | Granted | Converted | Forfeited/expired | Outstanding at December 31, 2009 | PSUs vested at December 31, 20091 |


| Millions of kWhs Delivered Revenues in Millions | Twelve Months Ended | Description | Residential/Religious(a) | Commercial/Industrial | Retail access customers | NYPA, Municipal Agency and other sales | Other operating revenues | Total |


NOTE 17.
VARIABLE INTEREST ENTITIES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy) Under applicable authoritative accounting guidance, a variable interest entity (VIE) is an entity that conducts a business or holds property that possesses any of the following characteristics: an insufficient amount of equity at risk to finance its activities, equity owners who do not have the power to direct the significant activities of the entity (or have voting rights that are disproportionate to their ownership interest), or where equity holders do not receive expected losses or returns.
An entity may have an interest in a VIE through ownership or other contractual rights or obligations, and is required to consolidate a VIE if it is the VIE’s primary beneficiary.
The primary beneficiary of a VIE is the entity that has the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance, and has the obligation to absorb losses or has the right to residual returns that would potentially be significant to the entity.
ENTERGY MISSISSIPPI, INC.  MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS Results of Operations Net Income 2016 Compared to 2015 Net income increased $16.5 million primarily due to lower other operation and maintenance expenses, higher net revenues, and a lower effective income tax rate, partially offset by higher depreciation and amortization expenses.2015 Compared to 2014 Net income increased $17.9 million primarily due to the write-off in 2014 of the regulatory assets associated with new nuclear generation development costs as a result of a joint stipulation entered into with the Mississippi Public Utilities Staff, subsequently approved by the MPSC, partially offset by higher depreciation and amortization expenses, higher taxes other than income taxes, higher other operation and maintenance expenses, and lower net revenue.
See Note 2 to the financial statements for discussion of the new nuclear generation development costs and the joint stipulation.
Net Revenue 2016 Compared to 2015 Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges (credits).
Following is an analysis of the change in net revenue comparing 2016 to 2015.


| December 31, | 2006 | (In millions) | Balance Sheet Data-1 | Assets: | General account assets | Separate account assets | Total assets-2 | Liabilities: | Life and health policyholder liabilities-7 | Property and casualty policyholder liabilities-7 | Short-term debt | Long-term debt | Junior subordinated debt securities | Payables for collateral under securities loaned and other transactions | Other | Separate account liabilities | Total liabilities-2 | Company-obligated mandatorily redeemable securities of subsidiary trusts | Stockholders’ Equity | Preferred stock, at par value | Common stock, at par value | Additional paid-in capital | Retained earnings | Treasury stock, at cost | Accumulated other comprehensive income-8 | Total stockholders’ equity | Total liabilities and stockholders’ equity |


ITEM 3.
LEGAL PROCEEDINGS A lawsuit has been filed against us in California alleging violations of state laws regarding employee record- keeping, meal and rest breaks, payment of overtime and related practices with respect to our employees.
The case seeks damages, penalties and attorneys fees on behalf of a purported class of our present and former employees.
We are currently investigating these claims, and although we have various defenses, it is not possible at this time to reasonably estimate the outcome of or any potential liability from this case.
Were involved in various other claims and legal actions that arise in the ordinary course of business.
We do not believe that the ultimate resolution of these actions will have a material adverse effect on our financial position, results of operations, liquidity or capital resources.
However, a significant increase in the number of these claims, or one or more successful claims under which we incur greater liabilities than we currently anticipate could materially and adversely affect our business, financial condition, results of operation and cash flows.


The following table reconciles commercial lendingrelated commitments on a GAAP basis with the Firms Economic credit exposure basis, a non-GAAP financial measure.
Reconciliation of Commercial Lending-Related Commitments to Economic Credit Exposure


Table of Contents outcomes of completed trials and the most current information regarding anticipated timing, progression, and related costs of pre-trial activities and trials in the associated litigation.
The amount of legal defense reserves as of December 31, 2013 and December 31, 2012 of approximately $160 million and $260 million, respectively, represents the Company’s best estimate of the minimum amount of defense costs to be incurred in connection with its outstanding litigation; however, events such as additional trials and other events that could arise in the course of its litigation could affect the ultimate amount of legal defense costs to be incurred by the Company.
The Company will continue to monitor its legal defense costs and review the adequacy of the associated reserves and may determine to increase the reserves at any time in the future if, based upon the factors set forth, it believes it would be appropriate to do so.
Environmental Matters The Company and its subsidiaries are parties to a number of proceedings brought under the Comprehensive Environmental Response, Compensation and Liability Act, commonly known as Superfund, and other federal and state equivalents.
These proceedings seek to require the operators of hazardous waste disposal facilities, transporters of waste to the sites and generators of hazardous waste disposed of at the sites to clean up the sites or to reimburse the government for cleanup costs.
The Company has been made a party to these proceedings as an alleged generator of waste disposed of at the sites.
In each case, the government alleges that the defendants are jointly and severally liable for the cleanup costs.
Although joint and several liability is alleged, these proceedings are frequently resolved so that the allocation of cleanup costs among the parties more nearly reflects the relative contributions of the parties to the site situation.
The Company’s potential liability varies greatly from site to site.
For some sites the potential liability is de minimis and for others the final costs of cleanup have not yet been determined.
While it is not feasible to predict the outcome of many of these proceedings brought by federal or state agencies or private litigants, in the opinion of the Company, such proceedings should not ultimately result in any liability which would have a material adverse effect on the financial position, results of operations, liquidity or capital resources of the Company.
The Company has taken an active role in identifying and providing for these costs and such amounts do not include any reduction for anticipated recoveries of cleanup costs from former site owners or operators or other recalcitrant potentially responsible parties.
In management’s opinion, the liabilities for all environmental matters that are probable and reasonably estimable have been accrued and totaled $213 million and $145 million at December 31, 2013 and 2012, respectively.
These liabilities are undiscounted, do not consider potential recoveries from other parties and will be paid out over the periods of remediation for the applicable sites, which are expected to occur primarily over the next 15 years.
Although it is not possible to predict with certainty the outcome of these matters, or the ultimate costs of remediation, management does not believe that any reasonably possible expenditures that may be incurred in excess of the liabilities accrued should exceed $84 million in the aggregate.
Management also does not believe that these expenditures should result in a material adverse effect on the Company’s financial position, results of operations, liquidity or capital resources for any year.11.


| December 31, 2011 December 31, 2010 | Amount | Fixed maturities, AFS, at fair value | Fixed maturities, at fair value using the fair value option | Equity securities, AFS, at fair value | Mortgage loans | Policy loans, at outstanding balance | Limited partnerships and other alternative investments | Other investments [1] | Short-term investments | Total investments excluding equity securities, trading | Equity securities, trading, at fair value [2] | Total investments |


Fuel Prices – Fuel prices should remain volatile, with crude oil prices and conversion and regional spreads fluctuating throughout the year.
On average, we expect fuel prices to increase 15% to 20% above the average price in 2007.
To reduce the impact of fuel price on earnings, we will continue to seek recovery from our customers through our fuel surcharge programs and expand our fuel conservation efforts.
through 2002, among other things, resulted in the $118 million reduction in 2005.
Our effective tax rate was 36.4% and 28.6% in 2006 and 2005, respectively.


| Years Ended December 31, | (Dollars in millions) | 2017 | Attritional | Catastrophes | Total segment | 2016 | Attritional | Catastrophes | Total segment | 2015 | Attritional | Catastrophes | Total segment | Variance 2017/2016 | Attritional | Catastrophes | Total segment | Variance 2016/2015 | Attritional | Catastrophes | Total segment | (Some amounts may not reconcile due to rounding.) |


(1) Net sales orders represent the number and dollar value of new sales contracts executed with customers, net of sales contract cancellations.
(2) Cancellation rate represents the number of cancelled sales orders divided by gross sales orders.
Net Sales Orders The value of net sales orders decreased 25%, to $3,498.4 million (17,034 homes) in 2009 from $4,677.2 million (21,251 homes) in 2008.
The number of net sales orders decreased 20% in fiscal 2009 compared to fiscal 2008.
We believe the most significant factors contributing to the slowing of demand for new homes in most of our markets include a continued high level of homes for sale, which includes foreclosed homes for sale; a decrease in the availability of mortgage financing for many potential homebuyers; the continued uncertainty in the financial markets and a decline in homebuyer consumer confidence.
Many prospective homebuyers continue to approach the purchase decision tentatively due to concern over their ability to sell an existing home or obtain mortgage financing, the general uncertainty surrounding the housing market, increasing unemployment and weakness in the overall economy.
However, these factors have led to lower home prices and improved affordability, which combined with various homebuyer tax incentives and low mortgage interest rates, have served to partially offset some of the market softness.
We continue to manage our sales incentives and pricing on a community by community basis in an attempt to optimize the
Revenues from home sales in fiscal 2009 and 2008 were increased by $3.1 million and $26.8 million, respectively, from changes in deferred profit.
The home sales profit related to our mortgage loans held for sale is deferred in instances where a buyer finances a home through our wholly-owned mortgage company and has not made an adequate initial or continuing investment.
The decline in the change in revenues from the prior year is due to the reduced availability of the mortgage types whose use generally resulted in the profit deferral.
As of September 30, 2009, the balance of deferred profit related to such mortgage loans held for sale was $2.7 million, compared to $5.8 million at September 30, 2008.
Homebuilding Operating Margin Analysis


AMR Incentive Awards Prior to the Petition Date, AMR adopted certain plans which provided for the issuance of common stock in connection with the exercise of stock options and other share-based awards.
AMR granted stock compensation under three plans: the 1998 Long Term Incentive Plan (the 1998 Plan), the 2003 Employee Stock Incentive Plan (the 2003 Plan) and the 2009 Long Term Incentive Plan (the 2009 Plan).
Collectively, the 1998 Plan and the 2009 Plan are referred to as the LTIP Plans.
No awards were made under AMR's plans in 2012 or 2013.
AMR had share-based incentive awards including stock options/stock appreciation rights granted under the LTIP Plans and the 2003 Plan, performance share awards granted under the LTIP plans and based upon a requisite service period and contingently issuable based upon the AMR's relative stock price performance compared to certain of its competitors over a three year period, deferred share awards granted under the LTIP plans and based solely on a requisite service period and career equity awards granted to certain employees of AMR vesting upon the retirement of those individuals.
Deferred share and career equity awards totaling 5,899,500 shares vested in AMR common stock pursuant to the Plan.
These plan participants become holders of interest in AMR Corporation and will receive distributions of AAG common stock in accordance with the Plan (See Note 2 to AAG's Consolidated Financial Statements for information regarding the Plan).
All remaining outstanding awards were canceled in accordance with the Plan upon emergence from Chapter 11.
Activity of all previous AMR awards is as follows:


Net Investment Hedges Â¡Âª Non-U.
S.  dollar borrowings of ¬541 million ($741 million) are designated to hedge the foreign currency exposures of the net investment in certain foreign affiliates.
These borrowings are designated as net investment hedges and recognized in long term debt.
The effective portion of foreign exchange gains or losses on the remeasurement of the debt is recognized in the foreign currency translation component of accumulated OCI with the related offset in long term debt.
Fair Value Hedges Â¡Âª Fixed-to-floating interest rate swap contracts are designated as fair value hedges and are used as part of an interest rate risk management strategy to create an appropriate balance of fixed and floating rate debt.
The swaps and underlying debt for the benchmark risk being hedged are recorded at fair value.
The effective interest rate paid on fixed-to-floating interest rate swaps is onemonth LIBOR (0.17% as of December 31, 2013) plus an interest rate spread ranging from (0.8)% to 4.4%.
When the underlying swap is terminated prior to maturity, the fair value basis adjustment to the underlying debt instrument is amortized into earnings as a reduction to interest expense over the remaining life of the debt.
Fixed-to-floating interest rate swap contracts were executed in 2013 to convert $2,050 million notional amount from fixed rate to variable rate debt.
During 2011, fixed-to-floating interest rate swap contracts of $1.6 billion notional amount and ¬1.0 billion notional amount were terminated generating total proceeds of $356 million (including accrued interest of $66 million).
The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options.
In projecting expected stock price volatility, the Company uses a combination of historical stock price volatility and implied volatility from observable market prices of similar equity instruments.
The Company estimated the expected life of stock options based on historical experience using employee exercise and option expiration data.
Stock-Based Compensation Expense The Company uses the straight-line attribution method to recognize stock-based compensation expense for stock options and restricted stock units (RSU).
The vesting term of stock options is generally five years with annual vesting of 20% per year on the anniversary of the grant date, and RSUs generally either cliff vest at the end of three years or vest over four years with annual vesting at 25% per year on the anniversary of the grant date.
The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.
ASC 718 requires forfeitures to be estimated at the time granted and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Based on an analysis of historical forfeitures, the Company has determined a specific forfeiture rate for certain employee groups and has applied forfeiture rates ranging from 0% to 5% as of September 24, 2011 depending on the specific employee group.
This analysis is re-evaluated annually and the forfeiture rate will be adjusted as necessary.
Ultimately, the actual stock-based compensation expense recognized will only be for those stock options and RSUs that vest.
Stock-based compensation expense in fiscal 2011, 2010 and 2009 is as follows:


| As of December 31, 2004 MaximumPotentialPayments EstimatedProceedsfromCollateral/Recourse CarryingAmount ofLiabilities* | Contingent repurchase commitments | Trade-in commitments | Asset-related guarantees | Credit guarantees related to the Sea Launch venture | Other credit guarantees | Equipment trust certificates | Performance guarantees |


| Dollars in millions 2013 2012 | January 1 | Total net charge-offs | Provision for credit losses | Net change in allowance for unfunded loan commitments and letters of credit | Other | December 31 | Net charge-offs to average loans (for the year ended) (a) | Allowance for loan and lease losses to total loans | Commercial lending net charge-offs | Consumer lending net charge-offs | Total net charge-offs | Net charge-offs to average loans (for the year ended) | Commercial lending | Consumer lending (a) |


| (Dollars in millions)(1) Securities Derivatives -2 Other Total | Balance, December 31, 2003 (Restated) | Net change in fair value recorded in Accumulated OCI | Less: Net gains (losses) reclassified into earnings(3) | Balance, December 31, 2004 (Restated) | Net change in fair value recorded in Accumulated OCI | Less: Net gains (losses) reclassified into earnings(3) | Balance, December 31, 2005 | December 31, 2007 | Bank of America Corporation | Senior Debt | Moody’s Investors Service | Standard & Poor’s | Fitch Ratings |


| December 31, 2016 (In millions) | Asia Pacific | U.S. Information Solutions | Europe | Latin America | Canada | Global Consumer Solutions | Verification Services | Employer Services | Total goodwill |


| December 31, | In millions of dollars | Consumer loans | In U.S. offices | Mortgage and real estate-1 | Installment, revolving credit, and other | Cards | Commercial and industrial | Lease financing | $202,968 | In offices outside the U.S. | Mortgage and real estate-1 | Installment, revolving credit, and other | Cards | Commercial and industrial | Lease financing | $125,990 | Total consumer loans | Unearned income-2 | Consumer loans, net of unearned income | Corporate loans | In U.S. offices | Commercial and industrial | Loans to financial institutions | Mortgage and real estate-1 | Installment, revolving credit, and other | Lease financing | $150,262 | In offices outside the U.S. | Commercial and industrial | Loans to financial institutions | Mortgage and real estate-1 | Installment, revolving credit, and other | Lease financing | Governments and official institutions | $138,232 | Total corporate loans | Unearned income-3 | Corporate loans, net of unearned income | Total loans—net of unearned income | Allowance for loan losses—on drawn exposures | Total loans—net of unearned incomeand allowance for credit losses | Allowance for loan losses as a percentage of total loans—net of unearned income-4 | Allowance for consumer loan losses as a percentage oftotal consumer loans—net of unearned income-4 | Allowance for corporate loan losses as a percentage oftotal corporate loans—net of unearned income-4 | (in millions) | 2004 | Japan and Other: | Life insurance | Personal accident | Group products | Individual fixed annuities | Individual variable annuities | Total | Asia: | Life insurance | Personal accident | Group products(c) | Individual fixed annuities | Individual variable annuities | Total | Total Foreign Life Insurance & Retirement Services: | Life insurance | Personal accident | Group products(c) | Individual fixed annuities | Individual variable annuities | Total |


| Global  Payments S&P 500 S&P  Information  Technology | May 31, 2003 | May 31, 2004 | May 31, 2005 | May 31, 2006 | May 31, 2007 | May 31, 2008 | December 31, (in millions) | Goodwill | Mortgage servicing rights | Purchased credit card relationships | All other intangibles: | Other credit card-related intangibles | Core deposit intangibles | All other intangibles | Total other intangible assets |


As of December 2015 and December 2014, the fair value of loans receivable was $45.19 billion and $28.90 billion, respectively.
As of December 2015, had these loans been carried at fair value and included in the fair value hierarchy, $23.91 billion and $21.28 billion would have been classified in level 2 and level 3, respectively.
As of December 2014, had these loans been carried at fair value and included in the fair value hierarchy, $13.75 billion and $15.15 billion would have been classified in level 2 and level 3, respectively.
The firm also extends lending commitments that are held for investment and accounted for on an accrual basis.
As of December 2015 and December 2014, such lending commitments were $93.92 billion and $66.22 billion, respectively, substantially all of which were extended to corporate borrowers.
The carrying value and the estimated fair value of such lending commitments were liabilities of $291 million and $3.32 billion, respectively, as of December 2015, and $199 million and $1.86 billion, respectively, as of December 2014.
Had these commitments been included in the firms fair value hierarchy, they would have primarily been classified in level 3 as of both December 2015 and December 2014.
The following is a description of the captions in the table above: ° Corporate Loans.
Corporate loans include term loans, revolving lines of credit, letter of credit facilities and bridge loans, and are principally used for operating liquidity and general corporate purposes, or in connection with acquisitions.
Corporate loans may be secured or unsecured, depending on the loan purpose, the risk profile of the borrower and other factors.
° Loans to Private Wealth Management Clients.
Loans to the firms private wealth management clients include loans used by clients to finance private asset purchases, employ leverage for strategic investments in real or financial assets, bridge cash flow timing gaps or provide liquidity for other needs.
Such loans are primarily secured by securities or other assets.
° Loans Backed by Commercial Real Estate.
Loans backed by commercial real estate include loans extended by the firm that are directly or indirectly secured by hotels, retail stores, multifamily housing complexes and commercial and industrial properties.
Loans backed by commercial real estate also include loans purchased by the firm.
° Loans Backed by Residential Real Estate.
Loans backed by residential real estate include loans extended by the firm to clients who warehouse assets that are directly or indirectly secured by residential real estate.
Loans backed by residential real estate also include loans purchased by the firm.
° Other Loans.
Other loans primarily include loans extended to clients who warehouse assets that are directly or indirectly secured by consumer loans, including auto loans, and private student loans and other assets.


| At December 31, 2011 | Country | United Kingdom | Cayman Islands | France | Japan | Germany | Netherlands | Luxembourg | Brazil | Australia | Italy |


| For the Year Ended December 31, | 2018 | Other income and expenses: | Gain on real estate transactions, earnout on prior acquisitions and impairment of real estate | Interest expense | Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes | Interest income | Equity in earnings of unconsolidated real estate ventures | Income tax expense | Total other expense, net |


| 2010 2009 2008 | (In millions) | Non-interest-bearing demand | Savings accounts | Interest-bearing transaction accounts | Money market accounts—domestic | Money market accounts—foreign | Low-cost deposits | Time deposits | Customer deposits | Corporate Treasury deposits | Time deposits | Total deposits |


We manage equity risk against benchmarks in respective markets.
We benchmark our return on equity holdings against a blend of market indices, mainly the S&P 500 and Russell 2000 for U. S.  equities.
We benchmark foreign equities against the Tokyo Price Index, and the MSCI EAFE, a market index of European, Australian, and Far Eastern equities.
We target price sensitivities that approximate those of the benchmark indices.
We estimate our equity risk from a hypothetical 10% decline in equity benchmark market levels.
The following table sets forth the net estimated potential loss in fair value from such a decline as of December 31, 2018 and 2017.
While these scenarios are for illustrative purposes only and do not reflect our expectations regarding future performance of equity markets or of our equity portfolio, they represent near-term reasonably possible hypothetical changes that illustrate the potential impact of such events.
These scenarios consider only the direct impact on fair value of declines in equity benchmark market levels and not changes in asset-based fees recognized as revenue, changes in our estimates of total gross profits used as a basis for amortizing deferred policy acquisition and other costs, or changes in any other assumptions such as market volatility or mortality, utilization or persistency rates in our variable annuity contracts that could also impact the fair value of our living benefit features.
In addition, these scenarios do not reflect the impact of basis risk, such as potential differences in the performance of the investment funds underlying the variable annuity products relative to the market indices we use as a basis for developing our hedging strategy.
The impact of basis risk could result in larger differences between the change in fair value of the equity-based derivatives and the related living benefit features in comparison to these scenarios.
In calculating these amounts, we exclude separate account equity securities.


| Americas EMEA Asia Pacific Global Investment Management Development Services Total | Balance as of December 31,2015 | Goodwill | Accumulated impairmentlosses | 1,461,786 | Purchase accounting entriesrelated to acquisitions | Foreign exchange movement | Balance as of December 31,2016 | Goodwill | Accumulated impairmentlosses | 1,504,639 | Purchase accounting entriesrelated to acquisitions | Foreign exchange movement | Balance as of December 31,2017 | Goodwill | Accumulated impairmentlosses | $1,610,286 |


Other Assets The Company accounts for its interest in PennyMac as an equity method investment, which is included in other assets on the consolidated statements of financial condition.
The carrying value and fair value of the Companys interest (approximately 20% or 16 million shares and non-public units) was approximately $342 million and $348 million, respectively, at December 31, 2017 and approximately $301 million and $259 million, respectively, at December 31, 2016.
The fair value of the Companys interest reflected the PennyMac stock price at December 31, 2017 and 2016, respectively (a Level 1 input).
The fair value of the Companys interest in the non-public units held of PennyMac is based on the stock price of the PennyMac public securities at December 31, 2017 and 2016.12.
Borrowings Short-Term Borrowings 2017 Revolving Credit Facility.
The Companys credit facility has an aggregate commitment amount of $4.0 billion and was amended in April 2017 to extend the maturity date to April 2022 (the 2017 credit facility).
The 2017 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, increasing the overall size of the 2017 credit facility to an aggregate principal amount not to exceed $5.0 billion.
Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread.
The 2017 credit facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at December 31, 2017.
The 2017 credit facility provides back-up liquidity to fund ongoing working capital for general corporate purposes and various investment opportunities.
At December 31, 2017, the Company had no amount outstanding under the 2017 credit facility.
Commercial Paper Program.
The Company can issue unsecured commercial paper notes (the CP Notes) on a private-placement basis up to a maximum aggregate amount outstanding at any time of $4.0 billion.
The commercial paper program is currently supported by the 2017 credit facility.
At December 31, 2017, BlackRock had no CP Notes outstanding.
Long-Term Borrowings The carrying value and fair value of long-term borrowings estimated using market prices and foreign exchange rates at December 31, 2017 included the following:
Long-term borrowings at December 31, 2016 had a carrying value of $4.9 billion and a fair value of $5.2 billion determined using market prices at the end of December 2016.2027 Notes.
In March 2017, the Company issued $700 million in aggregate principal amount of 3.20% senior unsecured and unsubordinated notes maturing on March 15, 2027 (the 2027 Notes).
Interest is payable semi-annually on March 15 and September 15 of each year, commencing September 15, 2017, and is approximately $22 million per year.
The 2027 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a make-whole redemption price.
The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2027 Notes.
In April 2017, the net proceeds of the 2027 Notes were used to fully repay $700 million in aggregate principal amount outstanding of 6.25% notes prior to their maturity in September 2017.2025 Notes.
In May 2015, the Company issued ¬700 million of 1.25% senior unsecured notes maturing on May 6, 2025 (the 2025 Notes).
The notes are listed on the New York Stock Exchange.
The net proceeds of the 2025 Notes were used for general corporate purposes, including refinancing of outstanding indebtedness.
Interest of approximately $9 million per year based on current exchange rates is payable annually on May 6 of each year.
The 2025 Notes may be redeemed in whole or in part prior to maturity at any time at the option of the Company at a make-whole redemption price.
The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2025 Notes.
Upon conversion to U. S.  dollars the Company designated the ¬700 million debt offering as a net investment hedge to offset its currency exposure relating to its net investment in certain euro functional currency operations.
A loss of $64 million (net of a tax benefit of $38 million), a gain of $14 million (net of tax of $8 million), and a gain of $19 million (net of tax of $11 million) were recognized in other comprehensive income for 2017, 2016 and 2015, respectively.
No hedge ineffectiveness was recognized during 2017, 2016, and 2015.202


| December 31 (in millions) 2015 2014 | Transactions with Comcast and Consolidated Subsidiaries | Receivables, net | Accounts payable and accrued expenses related to trade creditors | Accrued expenses and other current liabilities | Note payable to Comcast | Other noncurrent liabilities | Years Ended December 31, | (Dollars in millions) | Gross written premiums | Net written premiums | Premiums earned | Incurred losses and LAE | Commission and brokerage | Other underwriting expenses | Underwriting gain (loss) | Point Chg | Loss ratio | Commission and brokerage ratio | Other underwriting expense ratio | Combined ratio | (Some amounts may not reconcile due to rounding.) |


NOTE 16: Contingencies Securities Class Action On January 15, 2014, a class action lawsuit captioned Hatamian v.  AMD, et al.
, C. A.
No.3:14-cv-00226 (the “Hatamian Lawsuit”) was filed against the Company in the United States District Court for the Northern District of California.
The complaint purports to assert claims against the Company and certain individual officers for alleged violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10b-5 of the Exchange Act.
The plaintiffs seek to represent a proposed class of all persons who purchased or otherwise acquired our common stock during the period April 4, 2011 through October 18, 2012.
The complaint seeks damages allegedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual officers regarding its 32nm technology and “Llano” product, which statements and omissions, the plaintiffs claim, allegedly operated to artificially inflate the price paid for the Company’s common stock during the period.
The complaint seeks unspecified compensatory damages, attorneys’ fees and costs.
On July 7, 2014, the Company filed a motion to dismiss plaintiffs’ claims.
On March 31, 2015, the Court denied the motion to dismiss.
On May 14, 2015, the Company filed its answer to plaintiffs’ corrected amended complaint.
The discovery process is ongoing.
On September 4, 2015, plaintiffs filed their motion for class certification.
A court-ordered mediation held in January 2016 did not result in a settlement of the lawsuit.
Based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations.


| Years Ended December 31, | (Dollars in millions) | 2016 | Attritional | Catastrophes | Total segment | 2015 | Attritional | Catastrophes | Total segment | 2014 | Attritional | Catastrophes | Total segment | Variance 2016/2015 | Attritional | Catastrophes | Total segment | Variance 2015/2014 | Attritional | Catastrophes | Total segment | (Some amounts may not reconcile due to rounding.) |


NOTE 12.
CONTINGENCIES Environmental.
FCX subsidiaries are subject to various national, state and local environmental laws and regulations that govern emissions of air pollutants; discharges of water pollutants; generation, handling, storage and disposal of hazardous substances, hazardous wastes and other toxic materials; and remediation, restoration and reclamation of environmental contamination.
FCX subsidiaries that operate in the U. S.  also are subject to potential liabilities arising under CERCLA and similar state laws that impose responsibility on current and previous owners and operators of a facility for the remediation of hazardous substances released from the facility into the environment, including damages to natural resources, in some cases irrespective of when the damage to the environment occurred or who caused it.
Remediation liability also extends to persons who arranged for the disposal of hazardous substances or transported the hazardous substances to a disposal site selected by the transporter.
These liabilities are often shared on a joint and several basis, meaning that each responsible party is fully responsible for the remediation, if some or all of the other historical owners or operators no longer exist, do not have the financial ability to respond or cannot be found.
As a result, because of FCXs acquisition of FMC in 2007, many of the subsidiary companies FCX now owns are responsible for a wide variety of environmental remediation projects throughout the U. S. , and FCX expects to spend substantial sums annually for many years to address those remediation issues.
Certain FCX subsidiaries have been advised by the U. S.  Environmental Protection Agency (EPA), the Department of the Interior, the Department of Agriculture and various state agencies that, under CERCLA or similar state laws and regulations, they may be liable for costs of responding to environmental conditions at a number of sites that have been or are being investigated to determine whether releases of hazardous substances have occurred and, if so, to develop and implement remedial actions to address environmental concerns.
FCX is also subject to claims where the release of hazardous substances is alleged to have damaged natural resources (NRD) and to litigation by individuals allegedly exposed to hazardous substances.
As of December 31, 2017, FCX had more than 100 active remediation projects, including NRD claims, in 26 U. S.  states.
A summary of changes in estimated environmental obligations for the years ended December 31 follows:


| 2006 | Net revenue | Net income | Net income per share—basic | Net income per share—assuming dilution |


| Payment Period | Contractual Commitments | Debt1 | Operating Leases | Purchase Obligations2 |


| (in thousands) | Cash and cash equivalents | Investment securities | Premiums receivable and other current assets | Property and equipment and other assets | Medical and other expenses payable | Other current liabilities | Other liabilities | Net tangible assets acquired |


In connection with past sales of various plants and operations, Marathon assigned and the purchasers assumed certain leases of major equipment used in the divested plants and operations of United States Steel.
In the event of a default by any of the purchasers, United States Steel has assumed these obligations; however, Marathon remains primarily obligated for payments under these leases.
Minimum lease payments under these operating lease obligations of $54 million have been included above and an equal amount has been reported as sublease rentals.
Of the $181 million present value of net minimum capital lease payments, $135 million was related to obligations assumed by United States Steel under the Financial Matters Agreement.
Of the $378 million total minimum operating lease payments, $18 million was assumed by United States Steel under the Financial Matters Agreement.
During 2003, Marathon purchased two LNG tankers to transport LNG primarily from Kenai, Alaska to Tokyo, Japan which were previously leased.
A $17 million charge was recorded on the termination of the two tanker operating leases.
Operating lease rental expense was:


| December 31,(in dollars) 2009 2010 2011 2012 2013 2014 | JPMorgan Chase | KBW Bank Index | S&P Financial Index | S&P 500 Index |


| (Millions of Dollars) Beginning Balance as of January 1, 2012 Assets StillHeld at Reporting Date – Unrealized Gains/(Losses) Assets Sold During the Period – Realized Gains Purchases Sales and Settlements Transfer in/(out) of Level 3 Ending Balance as of December 31, 2012 | Real Estate | Private Equity | Corporate Bonds | Structured Assets | Other Fixed Income | Total investments | Funds for retiree health benefits | Investments (excluding funds for retiree health benefits) |


| 2009 2008 | (in billions) | Balance at January 1 | Net flows | Market appreciation/(depreciation) | Other | Balance at December 31 |


| (In millions) 2017 2016 2015 | Operating activities | Investing activities | Financing activities |


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollar amounts in thousands except per share data) Note 13Business Segments (continued)
(1) Reclassification of interest amount due to FIN46R (accounting rule requiring deconsolidation of Trust Preferred Securities).
(2) Administrative expense is not allocated to insurance segments.
(3) Elimination of intersegment commission.
Torchmark holds a sizeable investment portfolio to support its insurance liabilities, the yield from which is used to offset policy benefit, acquisition, administrative and tax expenses.
This yield or investment income is taken into account when establishing premium rates and profitability expectations of its insurance products.
In holding such a portfolio, investments are sold, called, or written down from time to time, resulting in a realized gain or loss.
These gains or losses generally occur as a result of disposition due to issuer calls, a downgrade in credit quality, compliance with Company investment policies, or other reasons often beyond managements control.
Unlike investment income, realized gains and losses are incidental to insurance operations, and are not considered when setting premium rates or insurance product profitability expectations.
While these gains and losses are not relevant to segment profitability or core operating results, they can have a material positive or negative result on net income.
For these reasons, management removes realized investment gains and losses when it views its segment operations.
Prior to 2006, management entered into swap derivative contracts to exchange certain of its fixedrate debt securities to floating rates to reduce its interest cost.
For this reason, management views the difference between the floating-rate interest paid and the fixed-rate interest received (the spread) as an adjustment to its financing cost in the Investment Segment and has reported it as such in this analysis.
In accordance with current accounting rules, this spread on a non-hedged swap must be included in the same line item as the swaps change in fair value each period.
Because of this rule, Torchmark includes the spread on all swaps in Realized investment gains and losses in the Consolidated Statements of Operations, as this is the line item that contains the fair value adjustment each period.
markets reverse and market rates increase placing the fixed-income portfolio in an unrealized loss position.
The long-term nature of our insurance policy liabilities and strong cash-flow operating position substantially mitigate any future need to liquidate portions of the portfolio.
The increase in the fair value of insurance liabilities and debt due to declines in market interest rates largely offset the impact of rates on the investment portfolio.
However, in accordance with GAAP, these liabilities are not marked to market.
The following table illustrates the market risk sensitivity of our interest-rate sensitive fixed-maturity portfolio at December 31, 2006 and 2005.
This table measures the effect of a change in interest rates (as represented by the U. S.  Treasury curve) on the fair value of the fixed-maturity portfolio.
The data are prepared through a model which incorporates various assumptions and estimates to measure the change in fair value arising from an immediate and sustained change in interest rates in increments of 100 basis points.
It takes into account the effect that special option features such as call options, put options, and unscheduled repayments could have on the portfolio, given the changes in rates.
The valuation of these option features is dependent upon assumptions about future interest rate volatility that are based on past performance.


O—Segment Information Reportable segments are primarily based upon the Company’s management organizational structure.
This structure is generally focused on broad end-user markets for the Company’s diversified products.
Residential Furnishings derives its revenues from components for bedding, furniture and other furnishings, as well as related consumer products.
Commercial Fixturing & Components derives its revenues from retail store fixtures, displays and components for office and institutional furnishings.
Industrial Materials derives its revenues from drawn steel wire, specialty wire products and welded steel tubing sold to trade customers as well as other Leggett segments.
Specialized Products derives its revenues from automotive seating components, specialized machinery and equipment, and van interiors.
The accounting principles used in the preparation of the segment information are the same as used for the consolidated financial statements, except that the segment assets and income reflect the FIFO basis of accounting for inventory.
Certain inventories are accounted for using the LIFO basis in the consolidated financial statements.
The Company evaluates performance based on earnings from operations before interest and income taxes (EBIT).
Intersegment sales are made primarily at prices that approximate market-based selling prices.
Centrally incurred costs are allocated to the segments based on estimates of services used by the segment.
Certain general and administrative costs and miscellaneous corporate income and expense of the Company are allocated to the segments based on sales and EBIT.
These allocated corporate costs include depreciation and other costs and income related to assets that are not allocated or otherwise included in the segment assets.
The Company’s new role-based portfolio management as discussed in Note B does not impact its segment reporting structure under SFAS 131, which includes the four reportable segments described above.
These segments are comprised of 10 business groups (which are also reporting units for goodwill impairment testing purposes).
These business groups are currently comprised of 20 business units and over 160 production locations.
As part of the Company’s 2007 Strategic Plan, it adopted a role-based portfolio management approach and assigned different roles (Grow, Core, Fix or Divest) to each of its 20 business units based upon competitive advantages, strategic position and financial health.
Historically, the Company established goals and plans for the business units uniformly, with each business unit expected to grow revenue significantly.
The new role-based approach changes the expectations for the business units based on their assigned roles.
The Company’s reportable segments are based upon management organizational structure, including senior operating vice-presidents for each reportable segment.
The Company’s management structure has not changed as a result of the role-based approach.
The financial information regularly reviewed and used by the chief operating decision-maker and the Board of Directors to evaluate segment performance and allocate total resources has not changed.
In addition, the management incentive compensation for segment, group and unit managers is based upon budget achievement and return on capital employed of operations under their direct control as reported through the existing segment structure.
The new role-based approach is a supplemental tool used by management to ensure capital (not total resources) is efficiently allocated to the business units within the reportable segment structure.


| Year Ended September 30, | 2010 | ($ in 000's) | Revenues: | Interest-1 | Investment Advisory Fees | Other | Total Revenues | Expenses | Compensation Expense | Other Expenses | Total Expenses | Income Before Taxes and Including Noncontrolling Interests | Noncontrolling Interests | Pre-tax Income Excluding Noncontrolling Interests |


| September 30, | 2013 | (In millions) | Balance Sheet Data: | Cash and cash equivalents and marketable securities | Inventories | Total assets | Notes payable -4 | Total equity |


| At December 31, | Franchises | United States Franchises | International Franchises | Total Franchises |


| 2013 2012 2011 | Depreciation and amortization of propertyand equipment | Landfill depletion and amortization | Depreciation, amortization and depletionexpense |


| Fair Value Measurement of Plan Assets At December 31, 2015 | Total | (In thousands) | Asset category: | Money-market funds | Equity securities: | M&T | Domestic(a) | International(b) | Mutual funds: | Domestic(a) | International(b) | 1,059,758 | Debt securities: | Corporate(c) | Government | International | Mutual funds: | Domestic(d) | 284,365 | Other: | Diversified mutual fund | Private real estate | Private equity | Hedge funds | Guaranteed deposit fund | 209,878 | Total(e) |


| In millions 2014 2015 2016 2017 2018 Thereafter | Maturities of long-term debt (a) | Debt obligations with right of offset (b) | Lease obligations | Purchase obligations (c) | Total (d) |


| (In thousands) | 2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | Total |


Insurance Liabilities.
The Companys principal cash outflows primarily relate to the liabilities associated with its various life insurance, property and casualty, annuity and group pension products, operating expenses and income tax, as well as principal and interest on its outstanding debt obligations.
Liabilities arising from its insurance activities primarily relate to benefit payments under the aforementioned products, as well as payments for policy surrenders, withdrawals and loans.
See Contractual Obligations.
 Investment and Other.
Additional cash outflows include those related to obligations of securities lending activities, investments in real estate, limited partnerships and joint ventures, as well as litigation-related liabilities.
Securities Lending.
The Company participates in a securities lending program whereby blocks of securities, which are included in fixed maturity and equity securities, are loaned to third parties, primarily major brokerage firms and commercial banks.
The Company requires collateral equal to 102% of the current estimated fair value of the loaned securities to be obtained at the inception of a loan, and maintained at a level greater than or equal to 100% for the duration of the loan.
During the extraordinary market events occurring in the fourth quarter of 2008, the Company, in limited instances, accepted collateral less than 102% at the inception of certain loans, but never less than 100%, of the estimated fair value of such loaned securities.
These loans involved U. S.  Treasury Bills which are considered to have limited variation in their estimated fair value during the term of the loan.
The Company was liable for cash collateral under its control of $23.3 billion and $43.3 billion at December 31, 2008 and 2007, respectively.
During the unprecedented market disruption since midSeptember 2008, the demand for securities loans from the Companys counterparties has decreased.
The volume of securities lending has decreased in line with reduced demand from counterparties and reduced trading capacity of certain segments of the fixed income securities market.
See Extraordinary Market Conditions for further information.


| 2016 2015 2014 | Balance at January 1 | Additions based on tax positions related to the current year | Additions for tax positions of prior years | Reductions for tax positions of prior years | Audit settlements | Balance at December 31 |


| Year Ended April 30, 2010 2009 2008 | Net income from continuing operations attributable to shareholders | Amounts allocated to participating securities (nonvested shares) | Net income from continuing operations attributable to common shareholders | Basic weighted average common shares | Potential dilutive shares | Dilutive weighted average common shares | Earnings per share from continuing operations attributable to common shareholders: | Basic | Diluted |


| (millions, except per share data) Earnings Average shares  outstanding Per  share | 2006 | Basic | Dilutive potential common shares | Diluted | 2005 | Basic | Dilutive potential common shares | Diluted | 2004 | Basic | Dilutive potential common shares | Diluted |


Manufacturing, Raw Materials and Supplies Applied’s manufacturing activities consist primarily of assembly, test and integration of various proprietary and commercial parts, components and subassemblies (collectively, parts) that are used to manufacture systems.
Applied has implemented a distributed manufacturing model under which manufacturing and supply chain activities are conducted in various countries, including the United States, Europe, Israel, Singapore, Taiwan, and other countries in Asia, and assembly of some systems is completed at customer sites.
Applied uses numerous vendors, including contract manufacturers, to supply parts and assembly services for the manufacture and support of its products.
Although Applied makes reasonable efforts to assure that parts are available from multiple qualified suppliers, this is not always possible.
Accordingly, some key parts may be obtained from only a single supplier or a limited group of suppliers.
Applied seeks to reduce costs and to lower the risks of manufacturing and service interruptions by: (1) selecting and qualifying alternate suppliers for key parts; (2) monitoring the financial condition of key suppliers; (3) maintaining appropriate inventories of key parts; (4) qualifying new parts on a timely basis; and (5) locating certain manufacturing operations in close proximity to suppliers and customers.


| Corporate – Operating Results (in 000s) 2009 | Year Ended April 30, | Interest income on mortgage loans held for investment | Other | Total revenues | Interest expense | Provision for loan losses | Compensation and benefits | Other, net | Total expense | Pretax loss |


| Less than 12 months 12 months or more Total | Fair  Value | (in thousands) | December 31, 2010 | U.S. Treasury and other U.S. government corporations and agencies: | U.S. Treasury and agency obligations | Mortgage-backed securities | Tax-exempt municipal securities | Mortgage-backed securities: | Residential | Commercial | Asset-backed securities | Corporate debt securities | Total debt securities |


| In millions 2007 2008 2009 2010 2011 Thereafter | Total debt (a) | Lease obligations (b) | Purchase obligations (c,d) | Total |


Pursuant to this program, approximately 0.7 million shares, 1.1 million shares, and 1.0 million shares were issued during the years ended December 31, 2018, 2017, and 2016, respectively.
Approximately 1.0 million shares are expected to be issued in 2019.
As of December 31, 2018, the total remaining unrecognized compensation cost related to nonvested SVAs was $55.7 million, which will be amortized over the weighted-average remaining requisite service period of 20 months.


We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition, operating performance and our ability to receive dividend payments from our subsidiaries, which is subject to prevailing economic and competitive conditions, regulatory approval and certain financial, business and other factors beyond our control.
We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness.
These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.
In addition, the terms of existing or future debt instruments may restrict us from adopting some of these alternatives.
Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time.
Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness.
If our cash flows and available cash are insufficient to meet our debt service obligations, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.
We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them, and these proceeds may not be adequate to meet any debt service obligations then due.


| Years Ended December 31, 2017/2016 2016/2015 | (Dollars in millions) | Gross written premiums | Net written premiums | Premiums earned | Incurred losses and LAE | Commission and brokerage | Other underwriting expenses | Underwriting gain (loss) | Point Chg | Loss ratio | Commission and brokerage ratio | Other underwriting expense ratio | Combined ratio | (Some amounts may not reconcile due to rounding.) |


| (in millions of U.S. dollars) 2008 2007 2006 | Equity in net income (loss) of partially-owned companies | Minority interest expense | Federal excise and capital taxes | Other | Other (income) expense |


Operating margin decreased 80 basis points in 2016 as the negative impact from foreign currency, increased investments in direct-to-consumer, product development and innovation and restructuring charges more than offset the benefits of favorable pricing and lower product costs.2015 compared to 2014 Global revenues for Outdoor & Action Sports increased 3% in 2015, reflecting 9% operational growth compared to 2014.
The operational growth was partially offset by a negative 6% impact from foreign currency.
The 53rd week in 2014 also negatively impacted 2015 revenue growth.
Revenues in the Americas region increased 8% in 2015, including a 2% negative impact from foreign currency.
Revenues in the Asia Pacific region increased 10% in 2015 despite a 5% negative impact from foreign currency.
European revenues declined 10% in 2015, including a 16% negative impact from foreign currency.
Global direct-to-consumer revenues for Outdoor & Action Sports grew 6% in 2015 over 2014, driven by new store openings and an expanding e-commerce business.
Foreign currency negatively impacted direct-to-consumer revenues by 5% in 2015.
Wholesale revenues were up 1% in 2015, including an 8% negative impact from foreign currency.
Global revenues for The North Face?
brand increased 1% in 2015 over 2014, as operational growth in the direct-to-consumer channel was partially offset by a negative 4% impact from foreign currency.
Sales for The North Face?
brand were negatively impacted by the warm weather in 2015, particularly during the fourth quarter when consumer demand for cold-weather products is typically at its peak.
Vans?
brand global revenues were up 7% in 2015, reflecting operational growth in both the direct-toconsumer and wholesale channels, partially offset by a negative 7% impact from foreign currency.
Global revenues for the Timberland?
brand were up 2% in 2015 driven by strong wholesale revenues, partially offset by a negative 8% impact from foreign currency and reduced consumer demand for outdoor apparel and footwear as a result of the warm weather noted above.
Operating margin decreased 110 basis points in 2015 due to the negative impact from foreign currency and increased investments in direct-to-consumer businesses, partially offset by the leverage of operating expenses on higher revenues.


NBCUniversal NBCUniversal is a wholly owned subsidiary of NBCUniversal Holdings and there is no market for its equity securities.
The information systems used by our domestic dough manufacturing and supply chain centers are an integral part of the quality service we provide our stores.
We use routing strategies and software to optimize our daily delivery schedules, which maximizes on-time deliveries.
Through our strategic dough manufacturing and supply chain center locations and proven routing systems, we achieved delivery accuracy rates of approximately 99% during 2007.
Our supply chain center drivers unload food and supplies and stock store shelves typically during non-peak store hours, which minimizes disruptions in store operations.
International During 2007, our international segment accounted for $126.9 million, or 9%, of our consolidated revenues.
We have 566 franchise stores in Mexico, representing the largest presence of any QSR company in Mexico, 467 franchise stores in the United Kingdom, 405 franchise stores in Australia, 289 franchise stores in South Korea, 277 franchise stores in Canada and over 100 franchise stores in each of Japan, India, Taiwan and France.
The principal sources of revenues from our international operations are royalty payments generated by retail sales from franchise stores and sales of food and supplies to franchisees in certain markets.
We have grown by more than 1,000 international stores over the past five years.
While our stores are designed for delivery and carry-out, which are less capital-intensive than dine-in, we empower our managers and franchisees to adapt the standard operating model, within certain parameters, to satisfy the local eating habits and consumer preferences of various regions outside the contiguous United States.
Currently, most of our international stores are operated under master franchise agreements, and we plan to continue entering into master franchise agreements with qualified franchisees to expand our international operations in selected countries.
We believe that our international franchise stores appeal to potential franchisees because of our well-recognized brand name, the limited capital expenditures required to open and operate our stores and our systems favorable store economics.
The following table shows our store count as of December 30, 2007 in our top ten international markets, which account for 77% of our international stores.


| (millions) 2012 2011 | Foreign currency exchange contracts | Interest rate contracts | Commodity contracts | Total |


Derivative financial instruments As part of managing interest rate risk, the Company enters into interest rate swap agreements to modify the repricing characteristics of certain portions of the Companys portfolios of earning assets and interest-bearing liabilities.
The Company designates interest rate swap agreements utilized in the management of interest rate risk as either fair value hedges or cash flow hedges.
Interest rate swap agreements are generally entered into with counterparties that meet established credit standards and most contain master netting, collateral and/or settlement provisions protecting the at-risk party.
Based on adherence to the Companys credit standards and the presence of the netting, collateral or settlement provisions, the Company believes that the credit risk inherent in these contracts was not significant as of December 31, 2017.
The net effect of interest rate swap agreements was to increase net interest income by $25 million in 2017, $37 million in 2016 and $44 million in 2015.
Information about interest rate swap agreements entered into for interest rate risk management purposes summarized by type of financial instrument the swap agreements were intended to hedge follows:


| As of or for the year ended December 31, (in millions) 2015 2014 2013 | Securities gains | Investment securities portfolio (average)(a) | Investment securities portfolio (period–end)(b) | Mortgage loans (average) | Mortgage loans (period-end) |


Contractual Obligations FIS’ long-term contractual obligations generally include its long-term debt, interest on long-term debt, lease payments on certain of its property and equipment and payments for data processing and maintenance.
For more descriptive information regarding the Company's long-term debt, see Note 13 in the Notes to Consolidated Financial Statements.
The following table summarizes FIS’ significant contractual obligations and commitments as of December 31, 2012 (in millions):


| Annual Lifts | Top 10 Intermodal Terminals | ICTF (Los Angeles), California | Marion (Memphis), Tennessee | East Los Angeles, California | Global II (Chicago), Illinois | Global I (Chicago), Illinois | Dallas, Texas | Seattle, Washington | Yard Center (Chicago), Illinois | Oakland, California | Englewood (Houston), Texas |


The Black-Scholes model incorporates assumptions to value stock-based awards.
The risk-free rate of interest for periods within the contractual life of the option is based on a zero-coupon U. S.  government instrument whose maturity period equals or approximates the option’s expected term.
Expected volatility is based on implied volatility from traded options on the Company’s stock and historical volatility of the Company’s stock.
To estimate the option exercise timing to be used in the valuation model, in addition to considering the vesting period and contractual term of the option, the Company analyzes and considers actual historical exercise data for previously granted options.


| Transition adjustment on January 1, 2001 $-93 | Reclassification to earnings | Change in fair value | Balance, December 31, 2001 |


Home equity  Home equity lending includes both home equity loans and lines-of-credit.
This type of lending, which is secured by a first-lien or junior-lien on the borrowers residence, allows customers to borrow against the equity in their home or refinance existing mortgage debt.
Products include closed-end loans which are generally fixed-rate with principal and interest payments, and variable-rate, interest-only lines-of-credit which do not require payment of principal during the 10-year revolving period.
The home equity line of credit may convert to a 20-year amortizing structure at the end of the revolving period.
Applications are underwritten centrally in conjunction with an automated underwriting system.
The home equity underwriting criteria is based on minimum credit scores, debt-to-income ratios, and LTV ratios, with current collateral valuations.
The underwriting for the floating rate lines of credit also incorporates a stress analysis for a rising interest rate.


We have historically generated significant cash from operations and we expect to continue to do so during fiscal 2015.
Since our operations are primarily domestic, approximately 90% of our cash, cash equivalents and investments at July 31, 2014 were located in the U. S.  and none of those funds were restricted.
Our only significant debt consists of $500 million in senior unsecured notes due in March 2017.
We also have an unused $500 million unsecured revolving line of credit facility available to us for general corporate purposes, including future acquisitions.
We evaluate, on an ongoing basis, the merits of acquiring technology or businesses, or establishing strategic relationships with and investing in other companies.
Our strong liquidity profile enables us to respond nimbly to these kinds of opportunities.
Based on past performance and current expectations, we believe that our cash and cash equivalents, investments, and cash generated from operations will be sufficient to meet anticipated seasonal working capital needs, capital expenditure requirements, contractual obligations, commitments, debt service requirements, and other liquidity requirements associated with our operations for at least the next 12 months.
We expect to return excess cash generated by operations to our stockholders through repurchases of our common stock and payment of cash dividends, after taking into account our operating and strategic cash needs.


| December 31 2005 2004 | (In millions) | Land | Buildings and building equipment | Offshore drilling rigs and equipment | Machinery and equipment | Pipeline equipment | Leaseholds and leasehold improvements | Total | Less accumulated depreciation and amortization | Property, plant and equipment |


2016 vs.  2015 Sales of $498.8 increased $212.1, or 74%.
The increase in sales was driven by the Jazan project which more than offset the decrease in small equipment and other air separation unit sales.
In 2016, we recognized approximately $300 of sales related to the Jazan project.
Operating loss of $21.3 decreased 59%, or $30.3, primarily from income on the Jazan project and benefits from cost reduction actions, partially offset by lower other sale of equipment project activity and a gain associated with the cancellation of a sale of equipment contract that was recorded in fiscal year 2015.
Corporate and other The Corporate and other segment includes two ongoing global businesses (our LNG equipment business and our liquid helium and liquid hydrogen transport and storage container businesses), and corporate support functions that benefit all the segments.
Corporate and other also includes income and expense that is not directly associated with the business segments, including foreign exchange gains and losses and stranded costs.
Stranded costs result from functional support previously provided to the two divisions comprising the former Materials Technologies segment.
The majority of these costs are reimbursed to Air Products pursuant to short-term transition services agreements under which Air Products provides transition services to Versum for EMD and to Evonik for PMD.
The reimbursement for costs in support of the transition services has been reflected on the consolidated income statements within "Other income (expense), net. "


CERTAIN LONG-DURATION CONTRACTS WITH GUARANTEES The Company issues variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder.
The Company also issues variable annuity contracts with general and separate account options where the Company contractually guarantees to the contractholder a return of no less than total deposits made to the contract adjusted for any partial withdrawals (return of net deposits).
In certain of these variable annuity contracts, the Company also contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract adjusted for any partial withdrawals plus a minimum return (minimum return), and/or (2) the highest contract value on a specified date adjusted for any withdrawals (contract value).
These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.
The Company also issues annuity contracts with market value adjusted investment options (MVAs), which provide for a return of principal plus a fixed rate of return if held-to-maturity, or, alternatively, a market adjusted value if surrendered prior to maturity or if funds are reallocated to other investment options.
The market value adjustment may result in a gain or loss to the Company, depending on crediting rates or an indexed rate at surrender, as applicable.
The Company also issues fixed deferred annuity contracts without MVA that have a guaranteed credited rate and annuity benefit.
In addition, the Company issues certain variable life, variable universal life and universal life contracts where the Company contractually guarantees to the contractholder a death benefit even when there is insufficient value to cover monthly mortality and expense charges, whereas otherwise the contract would typically lapse (no-lapse guarantee).
Variable life and variable universal life contracts are offered with general and separate account options.


(1) Additions are directly attributable to the acquisition of Morgan Keegan (see Notes 1 and 3 for additional information).
(2) The goodwill adjustment arose during the quarter ended December 31, 2012 from a change in a tax election pertaining to whether assets acquired and liabilities assumed are written-up to fair value for tax purposes.
This election is made on an entity-by-entity basis, and during the period indicated, our assumption regarding whether we would make such election changed for one of the Morgan Keegan entities we acquired.
The offsetting balance associated with this adjustment to goodwill was the net deferred tax asset.
(3) The impairment expense in the year ended September 30, 2013 is associated with the RJES reporting unit.
We concluded the goodwill associated with this reporting unit to be completely impaired during the quarter ended March 31, 2013.
Since we did not own 100% of RJES as of the goodwill impairment testing date, for the year ended September 30, 2013 the effect of this impairment expense on the pre-tax income attributable to Raymond James Financial, Inc.  is approximately $4.6 million and the portion of the impairment expense attributable to the noncontrolling interests is approximately $2.3 million.
Goodwill is subject to an evaluation of potential impairment on an annual basis, or more often if events or circumstances indicate there may be impairment.
We performed our annual goodwill impairment testing as of December 31, 2012.
We elected to not exercise the option to perform a qualitative assessment, but instead to perform a quantitative assessment of the equity value of each reporting unit that includes an allocation of goodwill.
In our determination of the reporting unit fair value of equity, we used a combination of the income approach and the market approach.
Under the income approach, we used discounted cash flow models applied to each respective reporting unit.
Under the market approach, we calculated an estimated fair value based on a combination of multiples of earnings of guideline companies in the brokerage and capital markets industry that are publicly traded on organized exchanges, and the book value of comparable transactions.
The estimated fair value of the equity of the reporting unit resulting from each of these valuation approaches was dependent upon the estimates of future business unit revenues and costs, such estimates were subject to critical assumptions regarding the nature and health of financial markets in future years as well as the discount rate to apply to the projected future cash flows.
In estimating future cash flows, a balance sheet as of the test date and a statement of operations for the last twelve months of activity for each reporting unit (or for the nine month period since the Closing Date for Morgan Keegan reporting units) were compiled.
Future balance sheets and statements of operations were then projected, and estimated future cash flows were determined by the combination of these projections.
The cash flows were discounted at the reporting units estimated cost of equity which was derived through application of the capital asset pricing model.
The valuation result from the market approach was dependent upon the selection of the comparable guideline companies and transactions and the earnings multiple applied to each respective reporting units projected earnings.
Finally, significant management judgment was applied in determining the weight assigned to the outcome of the market approach and the income approach, which resulted in one single estimate of the fair value of the equity of the reporting unit.
The following table summarizes the activity impacting the fee-billable financial assets under management in non-managed programs (excluding activity in MK & Co.  non-managed fee-based assets for the periods prior to the conversion of MK & Co.  accounts to the RJ&A platform) for the periods indicated:


General and Administrative General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation, for our executive, finance, legal, information technology, human resources and other administrative employees.
In addition, general and administrative expenses include fees and costs for professional services, including consulting, third-party legal and accounting services and facilities costs and other supporting overhead costs that are not allocated to other departments.


| In billions of dollars 2008 2007 2006 | Proceeds from new securitizations | Cash flows received on retained interests and other net cash flows | In millions of dollars | Net interest revenue | Non-interest revenue | Revenues, net of interest expense | Total operating expenses | Net credit losses | Provisions for unfunded lending commitments | Credit reserve build (release) | Provisions for loan losses and benefits and claims | Income before taxes and noncontrolling interests | Income taxes | Income from continuing operations | Net income (loss) attributable to noncontrolling interests | Net income | Average assets(in billions of dollars) | Return on assets | Revenues by region | North America | EMEA | Latin America | Asia | Total revenues | Net income from continuing operations by region | North America | EMEA | Latin America | Asia | Total net income from continuing operations | Securities and Bankingrevenue details | Total investment banking | Lending | Equity markets | Fixed income markets | Private bank | OtherSecurities and Banking | TotalSecurities and Bankingrevenues | 2013 | AAA-1 | AA | A | BBB | Below BBB | 100% |


| Distributions | 2017 | Fourth Quarter Ended December 31, | Third Quarter Ended September 30, | Second Quarter Ended June 30, | First Quarter Ended March 31, |


| Con Edison CECONY | (Millions of Dollars) | Electric | Generation | Transmission | Distribution | Gas (a) | Steam | General | Held for future use | Construction work in progress | Net Utility Plant |