| For the Years Ended December 31, | 2011 | (in thousands) | Contracted services | Office supplies and services | Transportation | Rents | Other | Total |


| Years Ended December 31, | 2015 | ($ in thousands, except per share amounts) | OPERATING DATA:-1 | Rental and other property | Management and other fees from affiliates | Income before discontinued operations | Income from discontinued operations | Net income | Net income available to common stockholders | Per share data: | Basic: | Income before discontinued operations available to common stockholders | Net income available to common stockholders | Weighted average common stock outstanding | Diluted: | Income before discontinued operations available to common stockholders | Net income available to common stockholders | Weighted average common stock outstanding | Cash dividend per common share |


| Millions 2018 2017 2016 | Agricultural Products | Energy | Industrial | Premium | Total freight revenues | Other subsidiary revenues | Accessorial revenues | Other | Total operating revenues |


| 2018 $-13,853 | 2019 | 2020 | 2021 | 2022 |


| 2014 $120,971 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total |


| (in thousands) | December 31, | Backlog |


Gas Operations Gas Facilities O&Rs capitalized costs for utility plant, net of accumulated depreciation for gas facilities, which are primarily distribution facilities, were $476 million and $456 million at December 31, 2014 and 2013, respectively.
O&R and Pike own their gas distribution systems and O&R owns a gas transmission system.
Natural gas is delivered by pipeline to O&R at various points in or near its service territory and is distributed to customers by the company through an estimated 1,867 miles of mains and 105,077 service lines.
Gas Sales and Deliveries O&R generally recovers the cost of the gas that it buys and then sells to its full-service customers.
It does not make any margin or profit on the gas it sells.
O&Rs gas revenues are subject to a weather normalization clause.
O&Rs New York gas revenues (which accounted for substantially all of O&Rs gas revenues in 2014) are subject to a revenue decoupling mechanism.
As a result, its gas delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
O&Rs gas sales and deliveries for the last five years were:


| Current 30-89 Days  PastDue Accruing Loans Past Due 90 Days or More(a) Accruing Loans Acquired at a Discount Past Due 90 Daysor More(b) Purchased Impaired(c) Nonaccrual Total | (In thousands) | December 31, 2015 | Commercial, financial, leasing, etc. | Real estate: | Commercial | Residential builder and developer | Other commercial construction | Residential | Residential-limited documentation | Consumer: | Home equity lines and loans | Automobile | Other | Total | December 31, 2014 | Commercial, financial, leasing, etc. | Real estate: | Commercial | Residential builder and developer | Other commercial construction | Residential | Residential-limited documentation | Consumer: | Home equity lines and loans | Automobile | Other | Total |


| 2015 2014 | Quarter | First | Second | Third | Fourth | Year |


| Change | Fiscal Year | 2016 | Amortization expenses | Amortization expenses as a % of revenue |


Contingencies Contingent Payments Related to Business Acquisitions.
In connection with certain acquisitions, BlackRock is required to make contingent payments, subject to achieving specified performance targets, which may include revenue related to acquired contracts or new capital commitments for certain products.
The fair value of the remaining aggregate contingent payments at December 31, 2017 totaled $236 million, including $128 million related to the First Reserve Transaction, and is included in other liabilities on the consolidated statements of financial condition.


| December 31, (in billions) 2003 2002 | Structured commercial loan vehicles | Credit-linked note vehicles | Municipal bond vehicles | Other client intermediation vehicles |


UNITED PARCEL SERVICE, INC.  AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 26 Revenue per piece for our Next Day Air and deferred products decreased in 2012 compared with 2011, as declines in fuel surcharge rates and product mix changes more than offset the impact of a base rate increase that took effect in early 2012.
Changes in product mix negatively impacted revenue per piece for our air products, as our lightweight service offerings accounted for a larger portion of our overall air volume in 2012 compared with 2011, and our Next Day Air Saver volume continued to grow at a faster rate than our premium Next Day Air services.
Ground revenue per piece increased in 2012 compared with 2011, primarily due to a base rate increase that took effect in early 2012; however, this was partially offset by product mix changes, as strong volume growth in our lightweight service offerings resulted in these relatively lower-yielding products accounting for a greater portion of our overall volume in 2012, compared with 2011.
Revenue per piece for our ground and air products was positively impacted by an increase in base rates that took effect on January 2, 2012.
We increased the base rates 6.9% on UPS Next Day Air, UPS 2nd Day Air and UPS 3 Day Select, and 5.9% on UPS Ground, while reducing our fuel surcharge indices (discussed further below).
Other pricing changes included an increase in the residential surcharge, and an increase in the delivery area surcharge on certain residential and commercial services.
These rate changes are customary and occur on an annual basis.2011 compared to 2010 Overall revenue per piece increased for our ground and air products during 2011 due to a combination of base price increases and fuel surcharge rate changes, which are discussed further below.
The overall revenue per piece increase was also positively affected by our focus on revenue management initiatives.
In addition, the revenue per piece increase for our air products was positively impacted by the overall mix shift from letters to packages.
Comparing the fourth quarter of 2011 with 2010, the average revenue per piece increase slowed to 3.4% due to the higher volume of lighter-weight business-to-consumer packages.
Revenue per piece for our ground and air products was also impacted by an increase in base rates that took effect on January 3, 2011.
We increased the base rates 6.9% on UPS Next Day Air, UPS 2nd Day Air, and UPS 3 Day Select, and 5.9% on UPS Ground, while reducing our fuel surcharge indices (discussed further below).
Other pricing changes included an increase in the residential surcharge, and an increase in the delivery area surcharge on both residential and commercial services to certain ZIP codes.
Fuel Surcharges UPS applies a fuel surcharge on our domestic air and ground services.
The air fuel surcharge is based on the U. S.  Department of Energy’s (“DOE”) Gulf Coast spot price for a gallon of kerosene-type jet fuel, while the ground fuel surcharge is based on the DOE’s On-Highway Diesel Fuel Price.
Based on published rates, the average fuel surcharge rates for domestic air and ground products were as follows:


| Exhibit No. Document | 3.1 | 3.2 | 4.1 | 4.2 | 4.3 | 4.4 | 4.5 | 4.6 | 4.7 | 4.8 | 4.9 | 4.10 | 4.11 | 4.12 |


| E&P OSM RM&T IG Total | 2007 | Revenues: | Customer | Intersegment(a) | Related parties | Segment revenues | Elimination of intersegment revenues | Loss on long-term U.K. natural gas contracts | Total revenues | Segment income (loss) | Income from equity method investments | Depreciation, depletion and amortization(b) | Minority interests in loss of subsidiary | Income tax provision (benefit)(b) | Capital expenditures(c)(d) | 2006 | Revenues: | Customer | Intersegment(a) | Related parties | Segment revenues | Elimination of intersegment revenues | Gain on long-term U.K. natural gas contracts | Total revenues | Segment income | Income from equity method investments | Depreciation, depletion and amortization(b) | Minority interests in loss of subsidiary | Income tax provision(b) | Capital expenditures(c)(d) | 2005 | Revenues: | Customer | Intersegment(a) | Related parties | Segment revenues | Elimination of intersegment revenues | Loss on long-term U.K. natural gas contracts | Total revenues | Segment income | Income from equity method investments | Depreciation, depletion and amortization(b) | Minority interests in (income) loss of subsidiaries(b) | Income tax provision (benefit)(b) | Capital expenditures(c)(d) | (In millions) | Sales and transfers of oil and gas produced, net of production, transportation and administrative costs | Net changes in prices and production, transportation and administrative costs related to future production | Extensions, discoveries and improved recovery, less related costs | Development costs incurred during the period | Changes in estimated future development costs | Revisions of previous quantity estimates | Net changes in purchases and sales of minerals in place | Accretion of discount | Net change in income taxes | Timing and other | Net change for the year | Beginning of year | End of year | Net change for the year from discontinued operations |


The following table summarizes the Company’s results on a pro forma basis as if it had recorded compensation expense based upon the fair value at the grant date for awards under these plans consistent with the methodology prescribed in SFAS No.123 for 2005, 2004 and 2003:


| 2005 2004 2003 | (for the year ended December 31, in millions) | Commercial Accounts | Select Accounts | National Accounts | Total Commercial Core | Commercial Other | Total Commercial |


| Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted- average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for futureissuance under equity compensation plans (excluding securities reflected in column (a)) (c) | Equity compensation plans approved by security holders: | Equity compensation plans not approved by security holders: | Total |


Separate Accounts The separate account assets presented in the consolidated financial statements represent the fair market value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments.
The separate account contract owner, rather than us, bears the investment risk of these funds.
The separate account assets are legally segregated and are not subject to claims that arise out of any of our other business.
We receive fees for mortality, withdrawal, and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations.
Net deposits, net investment income and realized and unrealized capital gains and losses on the separate accounts are not reflected in the consolidated statements of operations.
At December 31, 2009 and 2008, the separate accounts include a separate account valued at $191.5 million and $207.4 million, respectively, which primarily includes shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization.
These shares are included in both basic and diluted earnings per share calculations.
In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability to eligible participants of the qualified plan.
Changes in fair


| Restructuring | (In millions) | Internet | Supply chain | Globalization of organization | Distribution | Total charge | Tax effect | Net charge |


Reportable Segments Segment results are determined based upon the Companys management reporting system, which assigns balance sheet and statement of operations items to each of the business segments.
The process is designed around the Companys organizational and management structure and accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions.
A description of each reportable segment and table of financial results is presented below: Consumer Banking The Consumer Banking segment focuses on retail customers and small businesses with annual revenues of up to $25 million.
It offers traditional banking products and services, including checking, savings, home loans, education loans, credit cards, business loans, and unsecured product finance and personal loans in addition to financial management services.
It also operates an indirect auto financing business, providing financing for both new and used vehicles through auto dealerships.
The segments distribution channels include a branch network, ATMs and a work force of experienced specialists ranging from financial consultants, mortgage loan officers and business banking officers to private bankers.
The Companys Consumer Banking value proposition is based on providing simple, easy to understand product offerings and a convenient banking experience with a more personalized approach.
Commercial Banking The Commercial Banking segment primarily targets companies with annual revenues from $25 million to $2.5 billion and provides a full complement of financial products and solutions, including loans, leases, trade financing, deposits, cash management, commercial cards, foreign exchange, interest rate risk management, corporate finance and capital markets advisory capabilities.
It focuses on middle-market companies, large corporations and institutions and has dedicated teams with industry expertise in government banking, not-for-profit, healthcare, technology, professionals, oil and gas, asset finance, franchise finance, asset-based lending, commercial real estate, private equity and sponsor finance.
While the segments business development efforts are predominantly focused in the Companys footprint, some of its specialized industry businesses also operate selectively on a national basis (such as healthcare, asset finance and franchise finance).
A key component of Commercial Bankings growth strategy is to bring ideas to clients that help their businesses thrive, and in doing so, expand the loan portfolio and ancillary product sales.
Non-segment Operations Other Non-segment operations are classified as Other, which includes corporate functions, the Treasury function, the securities portfolio, wholesale funding activities, intangible assets, community development, non-core assets (including legacy Royal Bank of Scotland Group plc aircraft loans and leases placed in runoff in the third quarter of 2016), and other unallocated assets, liabilities, capital, revenues, provision for credit losses and expenses, including income tax expense.
In addition to non-segment operations, Other includes goodwill and any associated goodwill impairment charges.
For impairment testing purposes, the Company allocates goodwill to its Consumer Banking and Commercial Banking reporting units.
For management reporting purposes, the Company presents the goodwill balance (and any related impairment charges) in Other.


Note 3  Acquisition of Petsense: On September 29, 2016, the Company completed the acquisition of Petsense.
Headquartered in Scottsdale, Arizona, Petsense is a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-size communities, and offering a variety of pet products and services.
Pursuant to the agreement governing the transaction, the Company acquired all the outstanding equity interests in Petsense for an all-cash purchase price which was financed with cash on-hand and revolver borrowings under the 2016 Senior Credit Facility (as defined in Note 5).
The total consideration transferred in connection with the Petsense acquisition has been allocated to the assets acquired and liabilities assumed based upon their respective fair values.
The fair value of the assets acquired and liabilities assumed is estimated based on either one or a combination of the following methodologies: the income approach, the cost approach or the market approach as determined based on the nature of the asset or liability and the level of inputs available.
With respect to assets and liabilities, the determination of fair value requires management to make subjective judgments as to projections of future operating performance, the appropriate discount rate to apply, long-term growth rates, etc.
(i. e.  unobservable inputs classified as Level 3 inputs under the fair value hierarchy), which affect the amounts recorded in the purchase price allocation.
The excess of the consideration transferred over the fair value of the identifiable assets, net of liabilities, is recorded as goodwill, which is indicative of the expected continued growth and development of the pet specialty retail business acquired.
The table below summarizes the consideration transferred and allocation of the purchase price for the Petsense acquisition (in thousands):


Liquidity Our primary sources of cash include receipts of premiums, administrative services fees, investment income, and proceeds from the sale or maturity of our investment securities and from borrowings.
Our primary uses of cash include disbursements for claims payments, administrative expenses, interest expense, and taxes, purchases of investment securities and capital expenditures and payments on borrowings.
Cash and cash equivalents decreased to $580.1 million at December 31, 2004 from $931.4 million at December 31, 2003.
The change in cash and cash equivalents for the years ended December 31, 2004, 2003 and 2002 is summarized as follows:


| By Remaining Maturity at December 31, | 2007 | Under | Contractual Cash Obligations | (In millions) | Long-term debt (including estimated interest) | Capital lease obligations (including estimated interest) | Operating leases | Fuel purchase and transportation obligations(a) | Total contractual cash obligations |


| Millions, Except Estimated UsefulLifeAs of December 31, 2013 Cost$5,120 AccumulatedDepreciation$N/A Net BookValue$5,120 EstimatedUseful LifeN/A | Road: | Rail and other track material | Ties | Ballast | Other roadway [a] | Total road | Equipment: | Locomotives | Freight cars | Work equipment and other | Total equipment | Technology and other | Construction in progress | Total |


| (Dollars in thousands) 2006 2005 2004 | Gross basis: | Beginning of period reserves | Incurred losses | Paid losses | End of period reserves | Net basis: | Beginning of period reserves | Incurred losses | Paid losses | End of period reserves |


| December 31, 2010 December 31, 2009 | Cost | (in millions) | Public Equity | Perpetual preferred stocks-1 | Non-redeemable preferred stocks | Mutual fund common stocks-2 | Other common stocks | Total public equity | Private Equity | Perpetual preferred stocks-1 | Non-redeemable preferred stocks | Common stock | Total private equity-3 | Total equity |


| Fair Value Weighted Average Amortization Period (in Years) | Intellectual property | Customer relationships | In-process research and development | Backlog | Trademark | Total identifiable intangible assets | Fiscal Years Ended | September 30,2011 | Revenue | Net income | Basic EPS | Diluted EPS |


| Balance at December 31, 2008 $27,132 | Sale of Smith Barney | Sale of Nikko Cordial Securities | Sale of Nikko Asset Management | Foreign exchange translation | Smaller acquisitions/divestitures, purchase accounting adjustments and other | Balance at December 31, 2009 | Foreign exchange translation | Smaller acquisitions/divestitures, purchase accounting adjustments and other | Balance at December 31, 2010 | In millions of dollars | Balance at December 31, 2008 | Goodwill acquired during 2009 | Goodwill disposed of during 2009 | Other-1 | Balance at December 31, 2009 | Goodwill acquired during 2010 | Goodwill disposed of during 2010 | Other-1 | Balance at December 31, 2010 |


| December 31, | 2010 | Maximum | Carrying | Amount | (In millions) | Fixed maturity securitiesavailable-for-sale: | RMBS -2 | CMBS -2 | ABS -2 | Foreign corporate securities | U.S. corporate securities | Other limited partnership interests | Trading securities | Other invested assets | Mortgage loans | Real estate joint ventures | Equity securitiesavailable-for-sale: | Non-redeemable preferred stock | Total |


| Millions 2015 2014 2013 | Cash provided by operating activities | Cash used in investing activities | Cash used in financing activities | Net change in cash and cash equivalents |


| Claims Activity 2006 2005 2004 | Open claims, beginning balance | New claims | Settled or dismissed claims | Open claims, ending balance at December 31 |


Item 7A.
Quantitative and Qualitative Disclosures About Market Risk We manage our exposure to foreign currency exchange rate risk and interest rate risk through various strategies, including the use of derivative financial instruments.
We use forward foreign exchange contracts as economic hedges to manage the cash flow volatility arising from foreign currency exchange rate fluctuations.
We use interest rate swaps to manage our interest expense and structure our long-term debt portfolio to achieve a mix of fixed rate and floating rate debt.
We do not use derivatives for trading or speculative purposes.
Using derivatives exposes us to the risk that counterparties to the derivative contracts will fail to meet their contractual obligations.
We manage that risk through careful selection and ongoing evaluation of the counterparty financial institutions based on specific minimum credit standards and other factors.
We evaluate the effects of changes in foreign currency exchange rates, interest rates and other relevant market risks on our derivatives.
We periodically determine the potential loss from market risk on our derivatives by performing a value-at-risk, or VaR, analysis.
VaR is a statistical model that uses historical currency exchange and interest rate data to measure the potential impact on future earnings of our derivative financial instruments assuming normal market conditions.
The VaR model is not intended to represent actual losses but is used as a risk estimation and management tool.
Based on the results of the model, we estimate with 95% confidence a maximum one-day change in the net fair value of our derivative financial instruments at December 31, 2018 was not significant.
Foreign Currency Exchange Risk Our international operations represent approximately 48% of our revenue.
Changes in the value of foreign currencies against the U. S.  Dollar affect our results of operations and financial position.
For the most part, because the revenue and expenses of our foreign operations are denominated in the same local currency, the economic impact on operating margin is minimized.
The effects of foreign currency exchange transactions on our results of operations are discussed in Note 2 to the consolidated financial statements.
While our major international markets include the Euro Zone, the U. K. , Australia, Brazil, Canada, China and Japan, our agencies transact business in more than 50 different currencies.
As an integral part of our global treasury operations, we centralize our cash and use multicurrency pools, and to a lesser extent forward foreign exchange contracts, to manage the foreign currency exchange risk that arises from imbalances between subsidiaries and their respective treasury centers from which they borrow or invest funds.
At December 31, 2018, there were no outstanding forward foreign exchange contracts and at December 31, 2017, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $92.8 million.
In addition, there are circumstances where revenue and expense transactions are not denominated in the same currency.
In these instances, amounts are either promptly settled or hedged with forward foreign exchange contracts.
To manage that risk, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $86.1 million and $136.3 million at December 31, 2018 and 2017, respectively.
The net fair value of the forward foreign contracts at December 31, 2018 and 2017 was a current liability of $0.1 million and a current asset of $0.9 million, respectively.


| 2013 2012 2011 | Net income | Shares used to compute basic net income per share | Dilutive potential common shares: | Unvested restricted stock and performance share awards | Stock options | Shares used to compute diluted net income per share | Basic net income per share | Diluted net income per share |


Financial Position, Liquidity and Capital Resources The Company continues to maintain a sufficient level of working capital, which was approximately $8.1 billion at December 31, 2008 and $1.7 billion at December 31, 2007.
In 2008 and future periods, the Company expects cash generated by its U. S.  operations, together with existing cash, cash equivalents, marketable securities and borrowings from the capital markets, to be sufficient to cover cash needs for working capital, capital expenditures (which the Company expects to include investments in facilities to increase and maintain the Company’s capacity to provide biologics on a commercial scale), strategic alliances and acquisitions, milestone payments and dividends paid in the U. S.  Cash and cash equivalents, marketable securities, the conversion of other working capital items and borrowings are expected to fund near-term operations outside the U. S.  In December 2006, the Company obtained a $2.0 billion five year revolving credit facility from a syndicate of lenders, which is extendable on the anniversary date with the consent of the lenders.
This facility contains customary terms and conditions, including a financial covenant whereby the ratio of consolidated debt to consolidated capital cannot exceed 50% at the end of each quarter.
The Company has been in compliance with this covenant since the inception of this new facility.
There were no borrowings outstanding under the revolving credit facility at December 31, 2008.
On February 17, 2009, Mead Johnson entered into a three year syndicated revolving credit facility agreement.
The credit facility is unsecured and provides for borrowings and letters of credit of up to $410 million.
The company's risk with respect to each investment in CIP is limited to its equity ownership and any uncollected management and performance fees.
Therefore, the gains or losses of CIP have not had a significant impact on the company's net income attributable to common shareholders, liquidity or capital resources.
The company has no right to the benefits from, nor does it bear the risks associated with, these investments, beyond the company's minimal direct investments in, and management and performance fees generated from, the investment products.
If the company were to liquidate, these investments would not be available to the general creditors of the company, and as a result, the company does not consider investments held by CIP to be company assets.
Additionally, the collateral assets of consolidated collateralized loan obligations (CLOs) are held solely to satisfy the obligations of the CLOs, and the investors in the consolidated CLOs have no recourse to the general credit of the company for the notes issued by the CLOs.
At December 31, 2014 , the company's maximum risk of loss in significant VIEs in which the company is not the primary beneficiary is presented in the table below.


| December 31, | 2008 | Estimated | Fair Value | (In millions) | Residential mortgage-backed securities: | Collateralized mortgage obligations | Pass-through securities | Total residential mortgage-backed securities |


Long-term programs.
Long-term modification programs, or “troubled debt restructurings” (TDRs), occur when the terms of a loan have been modified due to the borrowers’ financial difficulties and a long-term concession has been granted to the borrower.
Substantially all programs in place provide permanent interest rate reductions.
Valuation allowances for TDRs are determined by comparing estimated cash flows of the loans discounted at the loans’ original contractual interest rates to the carrying value of the loans.
See Note 1 to the Consolidated Financial Statements for a further discussion of the allowance for loan losses for such modified loans.
The following table presents the amounts of gross loans related to these TDRs as of December 31, 2009 and 2008:


Notes to consolidated financial statements 226 JPMorgan Chase & Co. /2013 Annual Report The following table presents, as of December 31, 2013 and 2012, the gross and net derivative payables by contract and settlement type.
Derivative payables have been netted on the Consolidated Balance Sheets against derivative receivables to the same counterparty with respect to derivative contracts for which the Firm has obtained an appropriate legal opinion with respect to the master netting agreement.
Where such a legal opinion has not been either sought or obtained, the payables are not eligible under U. S.  GAAP for netting against related derivative receivables on the Consolidated Balance Sheets, and are shown separately in the table below.


We recognize the expense on these awards in our consolidated statements of operations on a straight-line basis over the three-year measurement period.
Free Cash Flow Performance-based DSU Awards During 2012, we granted free cash flow performance-based DSU awards to certain members of our executive and operating teams.
The attainment of these stock units is based on our achievement of the 2012 annual financial plan performance for Free Cash Flow (FCF).
FCF is measured over a one-year performance period beginning January 1, 2012 and ending December 31, 2012.
The number of performance share units as to which the performance criteria under this program shall be determined to have been satisfied will be in a range of 0% to 150% of the target number of performance share units awarded to the participant.
In addition, award recipients must remain employed by us throughout the three-year measurement period to attain the full award.
We determined the fair value of the 2012 FCF awards to be approximately $7 million, based on the closing stock price at December 31, 2012 and an achievement of 130% of target payout, which is subject to approval by the Executive Compensation and Human Resources Committee of our Board of Directors.
The per unit fair value is $5.73.
We recognize the expense on these awards in our consolidated statements of operations over the vesting period which is three years after the date of grant.


| Years Ended December 31, 2015/2014 2014/2013 | (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 19 – NET REVENUES Net revenues are recognized based on the satisfaction of performance obligations under the terms of a contract.
A performance obligation is a promise in a contract to transfer control of a distinct product or to provide a service, or a bundle of products or services, to a customer, and is the unit of account under ASC 606.
The Company has two principal revenue streams, tangible product sales and services.
Approximately 99% of consolidated Net revenues involve contracts with a single performance obligation, which is the transfer of control of a product or bundle of products to a customer.
Transfer of control typically occurs when goods are shipped from the Company's facilities or at other predetermined control transfer points (for instance, destination terms).
Net revenues are measured as the amount of consideration expected to be received in exchange for transferring control of the products and takes into account variable consideration, such as sales incentive programs including discounts and volume rebates.
The existence of these programs does not preclude revenue recognition but does require the Company's best estimate of the variable consideration to be made based on expected activity, as these items are reserved for as a deduction to Net revenues over time based on the Company's historical rates of providing these incentives and annual forecasted sales volumes.
The Company also offers a standard warranty with most product sales and the value of such warranty is included in the contractual price.
The corresponding cost of the warranty obligation is accrued as a liability (see Note 20).
The Company's remaining Net revenues involve services, including installation and consulting.
Unlike the single performance obligation to ship a product or bundle of products, the service revenue stream delays revenue recognition until the service performance obligations are satisfied.
In some instances, customer acceptance provisions are included in sales arrangements to give the buyer the ability to ensure the service meets the criteria established in the order.
In these instances, revenue recognition is deferred until the performance obligations are satisfied, which could include acceptance terms specified in the arrangement being fulfilled through customer acceptance or a demonstration that established criteria have been satisfied.
During the year ended December 31, 2018, no adjustments related to performance obligations satisfied in previous periods were recorded.
Upon adoption of ASC 606, the Company used the practical expedients to omit the disclosure of remaining performance obligations for contracts with an original expected duration of one year or less and for contracts where the Company has the right to invoice for performance completed to date.
The transaction price is not adjusted for the effects of a significant financing component, as the time period between control transfer of goods and services is less than one year.
Sales, value-added and other similar taxes collected by the Company are excluded from Net revenues.
The Company has also elected to account for shipping and handling activities that occur after control of the related goods transfers as fulfillment activities instead of performance obligations.
These activities are included in Cost of goods sold in the Consolidated Statements of Comprehensive Income.
The Company’s payment terms are generally consistent with the industries in which their businesses operate.
The following table shows the Company's Net revenues for the years ended December 31, based on the two principal revenue streams, tangible product sales and services, disaggregated by business segment.
Net revenues are shown by tangible product sales and services, as contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flows are substantially similar within each of the two principal revenue streams:


| December 31, 2010 | Fair Value Measurements at Reporting Date Using | Quoted Prices in | Active Markets for | Identical Assets | and Liabilities | (Level 1) | (In millions) | Assets | Fixed maturity securities: | U.S. corporate securities | Foreign corporate securities | RMBS | Foreign government securities | U.S. Treasury, agency and government guaranteed securities | CMBS | ABS | State and political subdivision securities | Other fixed maturity securities | Total fixed maturity securities | Equity securities: | Common stock | Non-redeemable preferred stock | Total equity securities | Trading and other securities: | Actively Traded Securities | FVO general account securities | FVO contractholder-directed unit-linked investments | FVO securities held by consolidated securitization entities | Total trading and other securities | Short-term investments -1 | Mortgage loans: | Mortgage loans held by consolidated securitization entities | Mortgage loansheld-for-sale-2 | Total mortgage loans | MSRs -3 | Other invested assets — investment funds | Derivative assets: -4 | Interest rate contracts | Foreign currency contracts | Credit contracts | Equity market contracts | Total derivative assets | Net embedded derivatives within asset host contracts -5 | Separate account assets -6 | Total assets |


| Year ended December 31 | Dollars in millions, except per share data | Summary of Operations | Interest income | Interest expense | Net interest income | Noninterest income | Total revenue | Provision for credit losses | Noninterest expense | Income before income taxes and noncontrolling interests | Income taxes | Net income | Less: Net income attributable to noncontrolling interests | Preferred stock dividends | Preferred stock discount accretion and redemptions | Net income attributable to common shareholders | Per Common Share | Basic earnings | Diluted earnings | Book value | Cash dividends declared | Effective tax rate(a) (b) | Performance Ratios | Net interest margin (c) | Noninterest income to total revenue | Efficiency | Return on: | Average common shareholders' equity (b) | Average assets (b) |


| 2013 Change 2012 Change 2011 | Research and development | Percentage of total net sales | Selling, general and administrative | Percentage of total net sales | Total operating expenses | Percentage of total net sales |


Sales and Service Revenues 2011—Newport News revenues remained stable at $3,766 million in 2011 compared to $3,775 million in 2010.
Lower revenues in Aircraft Carriers and Fleet Support were offset by higher revenues in Submarines.
The decrease in Aircraft Carriers revenues was primarily due to lower revenues on the CVN-71 USS Theodore Roosevelt RCOH, the CVN-65 USS Enterprise Extended Drydocking Selected Restricted Availability (
EDSRA
), and the Post Shakedown Availability (
PSA
) for CVN-77 USS George H. W.  Bush.
These decreases in Aircraft Carriers revenues were partially offset by higher revenues on CVN-78 Gerald R.  Ford, the advance construction contract for CVN-79 John F.  Kennedy, and the advance planning contract for CVN-72 USS Abraham Lincoln RCOH.
The decrease in Fleet Support revenues was primarily driven by lower activity in the San Diego fleet maintenance market.
The increase in Submarines revenues was primarily due to higher revenues on the construction of SSN-774 Virginia-class submarines.2010—Newport News revenues increased $241 million, or 7%, from 2009, primarily driven by $148 million higher sales in Aircraft Carriers and $108 million higher sales in Submarines.
The increase in Aircraft Carriers was primarily due to higher sales volume on CVN-78 Gerald R.  Ford and CVN-71 USS Theodore Roosevelt RCOH, partially offset by lower volume in 2010 on CVN-77 USS George H. W.  Bush and CVN-70 USS Carl Vinson RCOH, both of which were completed in the second quarter of 2009.
The increase in Submarines was primarily due to higher sales volume on the construction of SSN-774 Virginia-class submarines.
Segment Operating Income (Loss) 2011—Newport News operating income was $342 million compared to $355 million in 2010.
The decrease was primarily due to higher revenues on lower margin programs and risk retirement on the CVN-70 USS Carl Vinson and the CVN-77 USS George H. W.  Bush that occurred in 2010, partially offset by risk retirement on the SSN-774 Virginia-class submarine program in 2011.2010—Newport News operating income was $355 million compared with $313 million in 2009.
The increase was primarily due to the impact of the sales volume changes described above, improved operating performance on Aircraft Carriers, and higher earnings from our equity method investments, which totaled $19 million and $10 million in 2010 and 2009, respectively.
See Note 11: Business Arrangements in Item 8.
BACKLOG Total backlog at December 31, 2011, was approximately $16.3 billion.
Total backlog includes both funded backlog, firm orders for which funding is contractually obligated by the customer, and unfunded backlog, firm orders for which funding is not currently contractually obligated by the customer.
Backlog excludes unexercised contract options and unfunded Indefinite Delivery/Indefinite Quantity (
IDIQ
) orders.
For contracts having no stated contract values, backlog includes only the amounts committed by the customer.
The following table presents funded and unfunded backlog by segment at December 31, 2011 and 2010:


Technology Products and Services.
Technology products and services revenues increased by $1.2 million or 14.3% to $9.8 million for the year ended December 31, 2009 from $8.6 million for the year ended December 31, 2008.
The increase was primarily a result of technology integration consulting services.


| Fiscal 2009 Fiscal 2008 FY09 vs. FY08 % Change Fiscal 2007 FY08 vs. FY07 % Change | (In millions) | Revenues | Footwear | Apparel | Equipment | Total Revenues | Pre-tax Income |


| Year Ended December 31, | 2014 | (In $ millions) | Employee termination benefits (Note 4) | Kelsterbach plant relocation (Note 28) | Plumbing actions | Asset impairments | Plant/office closures (Note 4) | Commercial disputes | Other | Total |


During 2015, the Company fully repaid $750 million of 1.375% notes at maturity.
In May 2015, the Company issued Long-Term Borrowings.
The carrying value of long-term borrowings at December 31, 2015 included the following


| (Millions) 2010 2009 2008 | Interest income | Royalty income | Share of net earnings (loss) of equity affiliates (See Note 6) | Gain on sale of assets | Other | Total |


| (in millions) December 31, 2009 December 31, 2010 February 16, 2011 | Regulatory capital | Arbitrage – multi-sector CDO | Arbitrage – corporate | Total |


Risk and Insurance Program Our business is subject to all of the operating risks normally associated with the exploration, production, gathering, processing and transportation of crude oil and natural gas, including hurricanes, blowouts, well cratering and fire, any of which could result in damage to, or destruction of, oil and natural gas wells or formations or production facilities and other property and injury to persons.
As protection against financial loss resulting from many, but not all of these operating hazards, we maintain insurance coverage, including certain physical damage, business interruption (loss of production), employers liability, comprehensive general liability and workers compensation insurance.
We maintain insurance at levels that we believe are appropriate and consistent with industry practice and we regularly review our potential risks of loss and the cost and availability of insurance and revise our insurance program accordingly.
For example, in certain international locations (including Israel and Equatorial Guinea) we carry business interruption insurance for loss of revenue arising from physical damage to our facilities caused by fire and natural disasters.
The coverage is subject to customary deductibles, waiting periods and recovery limits.
In the Gulf of Mexico, we have begun self-insuring for windstorm exposure.
We made this decision because recent abandonment activities on the Gulf of Mexico shelf significantly reduced our windstorm exposure, as our remaining Gulf of Mexico assets are primarily subsea operations.
In addition, the cost of windstorm insurance has recently increased while the amounts of coverage have been reduced.
Therefore, we believe it is more cost-effective for us to self-insure these assets.
However, we are now responsible for substantially all windstorm-related damages to our Gulf of Mexico assets.
In accordance with industry practice, oil and gas well owners generally indemnify drilling rig contractors against certain risks, such as those arising from property and environmental losses, pollution from sources such as oil spills, or contamination resulting from well blowout or fire or other uncontrolled flow of hydrocarbons.
Most of our domestic and international drilling contracts contain such indemnification clauses.
In addition, oil and gas well owners typically assume all costs of well control in the event of an uncontrolled well.
We currently carry insurance protection for our net share of any potential financial losses occurring as a result of events such as the Deepwater Horizon Incident.
This protection consists of $250 million of well control, pollution cleanup and consequential damages coverage and $251 million of additional pollution cleanup and consequential damages coverage, which also covers third party personal injury and death.
Consequently if we were to experience an accident similar to the Deepwater Horizon


| Period SharesPurchased(a) AveragePricePaid PerShare SharesPurchasedas Part ofPubliclyAnnouncedPlans orPrograms MaximumShares thatMay BePurchasedUnder thePlans orPrograms | October 2008 | November 2008 | December 2008 | Total |


Gas Operations Gas Facilities O&Rs capitalized costs for utility plant, net of accumulated depreciation for gas facilities, which are primarily distribution


Notes to the Financial Statements  Continued In July 2012, Con Edison Development purchased a company that is developing 70 MW (AC) of solar energy projects in Alpaugh, California (Alpaugh).
Electricity generated by the projects is to be purchased by Pacific Gas and Electric Company pursuant to long-term power purchase agreements (PPA).
Alpaugh was purchased for $288 million, including contingent consideration of $2 million and $4 million in deposits relating to the PPA and interconnection agreements.
The total cost to acquire and construct these projects was $340 million.
Alpaugh commenced commercial operation in December 2012.
In October 2012, Con Edison Development purchased two companies that are developing 40 MW (AC) of solar energy projects in Tulare and Kings County, California.
Electricity generated by the projects is to be purchased by Pacific Gas and Electric Company pursuant to long-term PPAs.
The projects were purchased for approximately $51 million, of which $39 million has been allocated to construction work in progress and $12 million to deposits relating to the PPA and interconnection agreements.
The total cost to acquire and construct these projects is estimated to be $200 million.


(1) These amounts represent the principal repayments of Long-term debt and are included on our Consolidated Balance Sheets.
As of June 30, 2010, we had $324.1 million of outstanding debt consisting of $200.0 million of a term loan facility and $124.1 million in Senior Notes.
See Note 11, Borrowings to our Financial Statements under Item 8 of Part II of this Annual Report on Form 10-K for additional information about our Borrowings and related matters.
Excludes future cash payments related to interest expense as the term loan facility is variable rate and the interest payments will ultimately be determined by the rates in effect during each period.
(2) Included in these amounts are various facilities and equipment leases and software license agreements.
We enter into operating leases in the normal course of business relating to facilities and equipment, as well as the licensing of software.
The majority of our lease agreements have fixed payment terms based on the passage of time.
Certain facility and equipment leases require payment of maintenance and real estate taxes and contain escalation provisions based on future adjustments in price indices.
Our future operating lease obligations could change if we exit certain contracts and if we enter into additional operating lease agreements.
(3) Purchase obligations primarily relate to payments to ADP related to a data center outsourcing services agreement that expires in fiscal year 2012, payments to IBM related to the IT Services Agreement entered into in March 2010 that expires October 2021, and purchase and maintenance agreements on our software, equipment and other assets.
ADP provides the Company with data center services under a data center outsourcing services agreement which expires on June 30, 2012.
Among the principal services provided by ADP are information technology services and service delivery network services.
For the fiscal years ended June 30, 2010, 2009 and 2008, the Company recorded expenses related to this agreement of $104.8 million, $102.8 million and $107.0 million, respectively, in the Consolidated Statements of Earnings.
Other Commercial Commitments The Company has a five-year revolving credit facility that expires in March 2012 that has an available capacity of $500.0 million.
As of June 30, 2010, no amounts were outstanding under this credit facility.
In addition, immediately before the separation from ADP, certain of the Companys foreign subsidiaries established unsecured, uncommitted lines of credit with banks.
These lines of credit bear interest at a rate equal to LIBOR plus 250 basis points.
There were no outstanding borrowings under these lines of credit at June 30, 2010.


| December 31 | (Dollars in millions) | Consumer | Residential mortgage-2 | Home equity | Discontinued real estate-3 | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer-4 | Other consumer-5 | Total consumer loans | Consumer loans accounted for under the fair value option-6 | Total consumer | Commercial | U.S. commercial-7 | Commercial real estate-8 | Commercial lease financing | Non-U.S. commercial | Total commercial loans | Commercial loans accounted for under the fair value option-6 | Total commercial | Total loans and leases |


| State Number of   Locations-1 | California | Texas | Florida | Georgia, New York | New Jersey | Illinois, Massachusetts | Alabama, Arizona, Minnesota, North Carolina | Other |


Aeronautics’ operating profit for 2012 increased $69 million, or 4%, compared to 2011.
The increase was attributable to higher operating profit of approximately $105 million from C-130 programs due to an increase in risk retirements; about $50 million from F-16 programs due to higher aircraft deliveries partially offset by a decline in risk retirements; approximately $50 million from F-35 production contracts due to increased production volume and risk retirements; and about $50 million from the completion of purchased intangible asset amortization on certain F-16 contracts.
Partially offsetting the increases was lower operating profit of about $90 million from the F-35 development contract primarily due to the inception-to-date effect of reducing the profit booking rate in the second quarter of 2012; approximately $50 million from decreased production volume and risk retirements on the F-22 program partially offset by a resolution of a contractual matter in the second quarter of 2012; and approximately $45 million primarily due to a decrease in risk retirements on other sustainment activities partially offset by various other Aeronautics programs due to increased risk retirements and volume.
Operating profit for C-5 programs was comparable to 2011.
Adjustments not related to volume, including net profit booking rate adjustments and other matters described above, were approximately $30 million lower for 2012 compared to 2011.
Backlog Backlog decreased in 2013 compared to 2012 mainly due to lower orders on F-16, C-5, and C-130 programs, partially offset by higher orders on the F-35 program.
Backlog decreased in 2012 compared to 2011 mainly due to lower orders on F-35 and C-130 programs, partially offset by higher orders on F-16 programs.
Trends We expect Aeronautics’ net sales to increase in 2014 in the mid-single digit percentage range as compared to 2013 primarily due to an increase in net sales from F-35 production contracts.
Operating profit is expected to increase slightly from 2013, resulting in a slight decrease in operating margins between the years due to program mix.


| September 30, | 2011 | (In millions) | Other mortgage loans | Real estate owned | $43.7 | September 30, | 2011 | (In millions) | Loss reserves related to: | Other mortgage loans | Real estate owned | Loan repurchase and settlement obligations — known and expected | $33.0 |


| Assumptions Pension OPEB | Discount rate | Expected return on plan assets | Compensation increase | Health care cost trend rate: | Pre-65 current | Pre-65 level in 2028 |


| Ratio of Earnings to Fixed Charges | 2008 | Con Edison | CECONY |


| PriceRange | 2005 | Quarterended March 31,2005 | Quarter endedJune 30,2005 | Quarter endedSeptember 30, 2005 | Quarter endedDecember 31,2005 |


Gas O&R’s results of gas operations for the year ended December 31, 2018 compared with the year ended December 31, 2017 were as follows:


CHANGE IN PLAN ASSETS
(1) Primarily non-U.
S. -based defined benefit retirement plans.
(2) Primarily U. S. -based other postretirement benefit plans.
(3) For the pension benefit plans, the benefit obligation is the projected benefit obligation.
For other retiree benefit plans, the benefit obligation is the accumulated postretirement benefit obligation.
(4) Represents the net impact of ESOP debt service requirements, which is netted against plan assets for other retiree benefits.


Long-Term Incentive Compensation Entergy Corporations goal for its long-term incentive compensation is to focus the executive officers on building shareholder value and to increase the executive officers ownership of Entergy Corporations common stock in order to more closely align their interest with those of Entergy Corporations shareholders.
In its long-term incentive compensation programs, Entergy Corporation uses a mix of performance units, restricted stock, and stock options.
Performance units are used to deliver more than a majority of the total target long-term incentive awards.
For periods through the end of 2017, performance units reward the Named Executive Officers on the basis of total shareholder return, which is a measure of stock price appreciation and dividend payments, in relation to the companies in the Philadelphia Utility Index.
Beginning with the 2018-2020 performance period, a cumulative utility earnings metric has been added to the Long-Term Performance Unit Program to supplement the relative total shareholder return measure that historically has been used in this program with each measure equally weighted.
Restricted stock ties the executive officers long-term financial interest to the long-term financial interests of Entergy Corporations shareholders.
Stock options provide a direct incentive to increase the value of Entergy Corporations common stock.
In general, Entergy Corporation seeks to allocate the total value of long-term incentive compensation 60% to performance units and 40% to a combination of stock options and restricted stock, equally divided in value, based on the value the compensation model seeks to deliver.
Awards for individual Named Executive Officers may vary from this target as a result of individual performance, promotions, and internal pay equity.
The performance units for the 2015-2017 performance period were awarded under the 2011 Equity Ownership Plan and Long-Term Cash Incentive Plan (the 2011 Equity Ownership Plan) and the performance units for the


| Years Ended December 31, | (Dollars in thousands) | Interest expense incurred |


| Unrecognized Tax Benefits 2016 2015 2014 | Balance at beginning of year | Additions for tax positions of the current year | Additions for tax positions of prior years | Reductions for tax positions of prior years | Settlements | Statute of limitations expiration | Foreign currency translation | Balance at End of Year |


| Properties subject to amortization $13,829 | Accumulated amortization | $12,472 |


Item 1B.
Unresolved Staff Comments.
None.
Item 2.
Properties.
We have offices in various locations throughout the world.
Substantially all of our offices are located in leased premises.
We maintain our corporate headquarters at 8 Devonshire Square, London, England, where we occupy approximately 225,000 square feet of space under an operating lease agreement that expires in 2018.
We own one building at Pallbergweg 2-4, Amsterdam, the Netherlands (150,000 square feet).
The following are additional significant leased properties, along with the occupied square footage and expiration.


| For the year ended December 31, | 2010 | (in millions) | Current income taxes: | U.S. federal | State and foreign | Total current income taxes | Deferred income taxes | Total income taxes (benefits) |


| (in millions) Operating Leases Purchase Obligations Other Long-Term Liabilities Total-1 | Year | 2011 | 2012-2013 | 2014-2015 | Thereafter | Total |


| Year ended December 31, | In millions of dollars | Amount of gain (loss) recognized in AOCI on derivative | Interest rate contracts-1 | Foreign exchange contracts | Total gain (loss) recognized in AOCI | Amount of gain (loss) reclassified from AOCI to earnings | Interest rate contracts-1 | Foreign exchange contracts | Total gain (loss) reclassified from AOCI into earnings |


| September 2010 September 2011 September 2012 September 2013 September 2014 September 2015 | Apple Inc. | S&P 500 Index | S&P Information Technology Index | Dow Jones U.S. Technology Supersector Index |


We recognize interest and penalties related to unrecognized tax benefits as part of income tax expense in the Consolidated Statements of Operations, which is consistent with prior reporting periods.
As of December?31, 2018, four tax years were subject to audit by the IRS, covering the years 2015 through 2018.
In 2017, the IRS examined our 2015 tax returns for a U. S.  non-consolidated filing entity, L&P Financial Services Co. , and the audit concluded with no adjustments.
There are no current IRS examinations in process, nor are we aware of any forthcoming.


| Sites Corporate BD Life Sciences BD Medical BD Interventional Mixed(a) Total | Leased | Owned | Total | Square feet |


and other costs incurred for the continued expansion of our factory house stores.  ?
Product innovation and supply chain costs increased $25.0 million to $96.8 million in 2010 from $71.8 million in 2009 primarily due to higher personnel costs for the design and sourcing of our expanding apparel, footwear and accessories lines and higher distribution facilities operating and personnel costs as compared to the prior year to support our growth in net revenues.
In addition, we incurred higher expenses for our performance incentive plan as compared to the prior year.
As a percentage of net revenues, product innovation and supply chain costs increased to 9.1% in 2010 from 8.4% in 2009 primarily due to the items noted above.  ?
Corporate services costs increased $24.0 million to $98.6 million in 2010 from $74.6 million in 2009.
This increase was attributable primarily to higher corporate facility costs, information technology initiatives and corporate personnel costs, including increased expenses for our performance incentive plan as compared to the prior year.
As a percentage of net revenues, corporate services costs increased to 9.3% in 2010 from 8.7% in 2009 primarily due to the items noted above.
Income from operations increased $27.1 million, or 31.8%, to $112.4 million in 2010 from $85.3 million in 2009.
Income from operations as a percentage of net revenues increased to 10.6% in 2010 from 10.0% in 2009.
This increase was a result of the items discussed above.
Interest expense, net remained unchanged at $2.3 million in 2010 and 2009.
Other expense, net increased $0.7 million to $1.2 million in 2010 from $0.5 million in 2009.
The increase in 2010 was due to higher net losses on the combined foreign currency exchange rate changes on transactions denominated in the Euro and Canadian dollar and our derivative financial instruments as compared to 2009.
Provision for income taxes increased $4.8 million to $40.4 million in 2010 from $35.6 million in 2009.
Our effective tax rate was 37.1% in 2010 compared to 43.2% in 2009, primarily due to tax planning strategies and federal and state tax credits reducing the effective tax rate, partially offset by a valuation allowance recorded against our foreign net operating loss carryforward.
Segment Results of Operations Year Ended December 31, 2011 Compared to Year Ended December 31, 2010 Net revenues by geographic region are summarized below:


STATE STREET CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) model, an entity would recognize revenue that represents the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The amendment supersedes most current GAAP related to revenue recognition, including industry-specific guidance.
The amendment is effective for State Street beginning on January 1, 2017, and must be applied retrospectively.
Early adoption is prohibited.
We are currently assessing the potential impact of this amendment on our consolidated financial statements.
In April 2014, the FASB issued an amendment to GAAP that revises the criteria for the treatment and disclosure of discontinued operations.
The amendment allows entities to have significant continuing involvement and continuing cash flows with the discontinued operation, but requires additional disclosure for discontinued operations and disclosure for disposals deemed to be material that do not meet the definition of a discontinued operation.
The presentation and disclosure requirements are effective for State Street beginning on January 1, 2015, and are required to be applied prospectively to discontinued operations occurring after that date.
We did not have any transactions that qualified as discontinued operations during the periods presented in our consolidated financial statements.
In January 2014, the FASB issued an amendment to GAAP that allows an investor in an affordable housing project, if the project meets certain defined conditions, to amortize the cost of their investment in proportion to the tax credits and other tax benefits they receive, and reflect it as part of income tax expense rather than as revenue from operations.
The amendment is effective, for State Street, for interim and annual periods beginning January 1, 2015, and will not have a material effect on our consolidated financial statements.


Market Risk Management Market risk is the risk that values of assets and liabilities or revenues will be adversely affected by changes in market conditions such as market movements.
This risk is inherent in the financial instruments associated with our operations and/or activities including loans, deposits, securities, short-term borrowings, long-term debt, trading account assets and liabilities, and derivatives.
Market-sensitive assets and liabilities are generated through loans and deposits associated with our traditional banking business, customer and other trading operations, ALM process, credit risk mitigation activities and mortgage banking activities.
In the event of market volatility, factors such as underlying market movements and liquidity have an impact on the results of the Corporation.
Our traditional banking loan and deposit products are nontrading positions and are generally reported at amortized cost for assets or the amount owed for liabilities (historical cost).
However, these positions are still subject to changes in economic value based on varying market conditions, primarily changes in the levels of interest rates.
The risk of adverse changes in the economic value of our nontrading positions is managed through our ALM activities.
We have elected to account for certain assets and liabilities under the fair value option.
For further information on the fair value of certain financial assets and liabilities, see Note 20  Fair Value Measurements to the Consolidated Financial Statements.
Our trading positions are reported at fair value with changes currently reflected in income.
Trading positions are subject to various risk factors, which include exposures to interest rates and foreign exchange rates, as well as mortgage, equity, commodity, issuer and market liquidity risk factors.
We seek to mitigate these risk exposures by using techniques that encompass a variety of financial instruments in both the cash and derivatives markets.
The following discusses the key risk components along with respective risk mitigation techniques.
Interest Rate Risk Interest rate risk represents exposures to instruments whose values vary with the level or volatility of interest rates.
These instruments include, but are not limited to, loans, debt securities, certain trading-related assets and liabilities, deposits, borrowings and derivative instruments.
Hedging instruments used to mitigate these risks include related derivatives such as options, futures, forwards and swaps.
Foreign Exchange Risk Foreign exchange risk represents exposures to changes in the values of current holdings and future cash flows denominated in other currencies.
The types of instruments exposed to this risk include investments in foreign subsidiaries, foreign currency-denominated loans and securities, future cash flows in foreign currencies arising from foreign exchange transactions, foreign currency-denominated debt and various foreign exchange derivative instruments whose values fluctuate with changes in the level or volatility of currency exchange rates or foreign interest rates.
Hedging instruments used to mitigate this risk include foreign exchange options, currency swaps, futures, forwards, foreign currency- denominated debt and deposits.


Operating Expenses


| JPMorgan Chase Bank, N.A. | Basel III Standardized Transitional | (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(d) |


| 2004 2003 2002 | Investment yield, after-tax | Net realized capital gains (losses), after-tax |


Commercial Banking net income increased $28.2 million in 2012 compared to 2011.
The $27.1 million increase in net interest income primarily reflects continued loan growth, improved spreads on commercial loans and certain commercial deposits, and the benefit from the change in FTP methodology discussed previously, partially offset by the continued negative impact of the low interest rate environment.
The $7.3 million increase in non-interest income in 2012 reflects increases in commercial banking fees and operating lease income resulting from a higher level of equipment leased to PCLC customers.
Included in non-interest income in 2012 and 2011 are net gains on sales of acquired loans totaling $1.0 million and $7.5 million, respectively.
The $9.2 million decrease in non-interest expense reflects a lower level of allocated expenses in 2012 compared to 2011, partially offset by an increase in direct expenses.
Average total assets increased $1.3 billion and average total liabilities increased $322 million in 2012 compared to 2011, reflecting loan and deposit growth, as well as loans acquired and deposits assumed in the Danvers acquisition (effective July 1, 2011).


Revenues N&SS revenues decreased 1% in 2008 and 2% in 2007.
The decrease of $137 million in 2008 is primarily due to decreased revenues in FCS, Proprietary and satellite programs partially offset by increased revenues in the SBInet program.
The decrease of $292 million in 2007 was primarily due to the exclusion of government Delta volume, now a component of our equity investment in ULA and lower FCS volume, partially offset by increased volume on SBInet and several satellite programs.
Delta launch and new-build satellite deliveries were as follows:


(3) Purchase obligations are defined as agreements to purchase goods and services that are enforceable and legally binding on us, and that specifies all significant terms, including what is to be purchased, at what price and the approximate timing of the transaction.
Most of our purchase obligations are related to purchases of information technology services or other service contracts.


The FASB issued Statement of Financial Accounting Standards No.150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” on May 30, 2003.
The adoption of this Statement, effective July 1, 2003, did not have a material effect on Marathon’s financial position or results of operations.


| (Dollars in millions) 2017 2016 2015 2014 2013 | Allowance for loan and lease losses, January 1 | Loans and leases charged off | Residential mortgage | Home equity | U.S. credit card | Non-U.S. credit card-1 | Direct/Indirect consumer | Other consumer | Total consumer charge-offs | U.S. commercial-2 | Non-U.S. commercial | Commercial real estate | Commercial lease financing | Total commercial charge-offs | Total loans and leases charged off | Recoveries of loans and leases previously charged off | Residential mortgage | Home equity | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer | Other consumer | Total consumer recoveries | U.S. commercial-3 | Non-U.S. commercial | Commercial real estate | Commercial lease financing | Total commercial recoveries | Total recoveries of loans and leases previously charged off | Net charge-offs | Write-offs of PCI loans | Provision for loan and lease losses | Other-4 | Total allowance for loan and lease losses, December 31 | Less: Allowance included in assets of business held for sale-5 | Allowance for loan and lease losses, December 31 | Reserve for unfunded lending commitments, January 1 | Provision for unfunded lending commitments | Other-4 | Reserve for unfunded lending commitments, December 31 | Allowance for credit losses, December 31 |


| As of February 24, 2014 Moody’s Standard and Poor’s Fitch DBRS | Fifth Third Bancorp: | Short-term | Senior debt | Subordinated debt | Fifth Third Bank: | Short-term | Long-term deposit | Senior debt | Subordinated debt |


Gross profit decreased $64.8 million, or 13.2%, for the year ended December 31, 2009 from the year ended December 31, 2008.
Gross profit as a percentage of net sales decreased from 20.8% of net sales in the year ended December 31, 2008 to 19.9% of net sales in the year ended December 31, 2009 primarily due to the decreases of sales prices and volume described previously.
Selling and administrative expenses were essentially unchanged, up 0.1%, for the year ended December 31, 2009 from the year ended December 31, 2008.
Corporate overhead for the year ended December 31, 2009 decreased $6.5 million, or 10.6%, from the year ended December 31, 2008.
The decrease was primarily attributable to lower salary and fringe benefit expenses ($5.9 million) and other items which were individually insignificant.
Other expense, net, decreased $0.7 million, or 4.7% for the year ended December 31, 2009 compared to the year ended December 31, 2008.
The decrease was primarily due to lower legal related costs ($1.6 million), partially offset by increased fixed asset disposal costs ($0.8 million).
Interest Expense, Net and Income Taxes Interest expense, net of interest income, increased by $3.8 million, or 12.0%, for the year ended December 31, 2009 compared to the year ended December 31, 2008, due to lower interest rates on our investments, which reduced interest income by $5.0 million in 2009 compared to 2008.
PCA’s total effective tax rate was 16.1% for the year ended December 31, 2009 and 35.5% for the year ended December 31, 2008.
The effective tax rate in 2009 varies from the U. S.  federal statutory tax rate of 35.0% principally due to the impact of the alternative fuel mixture tax credit, state and local income taxes and the domestic manufacturers’ deduction.
PCA had no material changes to its uncertain tax positions under ASC 740, “Income Taxes,” in 2009.
Year Ended December 31, 2008 Compared to Year Ended December 31, 2007 The historical results of operations of PCA for the years ended December 31, 2008 and 2007 are set forth below:


| December 31, 2005 2004 | Deferred tax assets: | Net operating loss carryforward | Other | Total gross deferred tax assets | Less: valuation allowance | Net deferred tax assets | Deferred tax liabilities: | Investment in Charter Holdco | Indirect Corporate Subsidiaries: | Property, plant & equipment | Franchises | Gross deferred tax liabilities | Net deferred tax liabilities |


| 2015 period Total sharespurchased (a) Averagepricepaid pershare Total sharespurchased aspartofpubliclyannouncedprograms (b) Maximumnumberofshares thatmay yet bepurchasedunder theprograms (b) | October 1 – 31 | November 1 – 30 | December 1 – 31 | Total |


U. S.  equity securities and international equity securities categorized as Level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year.
For U. S.  equity securities and international equity securities not traded on an active exchange, or if the closing price is not available, the trustee obtains indicative quotes from a pricing vendor, broker or investment manager.
These securities are categorized as Level 2 if the custodian obtains corroborated quotes from a pricing vendor or categorized as Level 3 if the custodian obtains uncorroborated quotes from a broker or investment manager.
Commingled equity funds categorized as Level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year.
For commingled equity funds not traded on an active exchange, or if the closing price is not available, the trustee obtains indicative quotes from a pricing vendor, broker or investment manager.
These securities are categorized as Level 2 if the custodian obtains corroborated quotes from a pricing vendor.
Fixed income investments categorized as Level 2 are valued by the trustee using pricing models that use verifiable observable market data (e. g. , interest rates and yield curves observable at commonly quoted intervals and credit spreads), bids provided by brokers or dealers or quoted prices of securities with similar characteristics.
Fixed income investments are categorized at Level 3 when valuations using observable inputs are unavailable.
The trustee obtains pricing based on indicative quotes or bid evaluations from vendors, brokers or the investment manager.
Commodities are traded on an active commodity exchange and are valued at their closing prices on the last trading day of the year.
Certain commingled equity funds, consisting of equity mutual funds, are valued using the NAAV.
The NAVA valuations are based on the underlying investments and typically redeemable within 90 days.
Private equity funds consist of partnership and co-investment funds.
The NAVA is based on valuation models of the underlying securities, which includes unobservable inputs that cannot be corroborated using verifiable observable market data.
These funds typically have redemption periods between eight and 12 years.
Real estate funds consist of partnerships, most of which are closed-end funds, for which the NAAV is based on valuation models and periodic appraisals.
These funds typically have redemption periods between eight and 10 years.
Hedge funds consist of direct hedge funds for which the NAAVis generally based on the valuation of the underlying investments.
Redemptions in hedge funds are based on the specific terms of each fund, and generally range from a minimum of one month to several months.


| Amortization Period Ameren Missouri Ameren Illinois ATXI Total | 30–60 years | 7–10 years | Total |


DISCONTINUED OPERATIONS Effective January 1, 2001, the Company adopted SFAS No.144.
This statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets.
SFAS No.144 requires a component of an entity that either has been disposed of or is classified as held for sale to be reported as discontinued operations if certain conditions are met.
During the year, the Company decided to exit certain of its businesses.
These businesses included Power Direct, Geoutilities, TermoCandelaria, Ib Valley and several telecommunications businesses in Brazil and the U. S.  The businesses were either disposed of or abandoned during the year or were classified as held for sale at December 31, 2001.
For those businesses disposed of or abandoned, the Company determined that significant adverse changes in legal factors and/or the business climate, such as unfavorable market conditions and low tariffs, negatively affected the value of these assets.
The Company has certain businesses that are held for sale, including TermoCandelaria.
The Company has approved and committed to a plan to sell these assets, they are available for immediate sale, and a plan has been established to locate a buyer at a reasonable fair market value price.
The Company believes it will sell these assets within one year and it is unlikely that significant changes will be made to the plan to sell.
At December 31, 2001, the assets and liabilities associated with the discontinued operations are segregated on the consolidated balance sheets.
A majority of the long-lived assets related to discontinued operations are for the TermoCandelaria competitive supply business located in Colombia.
The revenues associated with the discontinued operations were $287 million, $74 million and $7 million for the years ended December 31, 2001, 2000 and 1999, respectively.
The pretax losses associated with the discontinued operations were $58 million, $31 million and $4 million for each of the years ended December 31, 2001, 2000 and 1999, respectively.
The loss on disposal and impairment write-downs for those businesses held for sale, net of tax associated with the discontinued operations, was $145 million for the year ended December 31, 2001.


| EIN / PensionPlan PensionProtection ActZone Status FIP / RP StatusPending / (in millions)UPS Contributions and Accruals Surcharge | Pension Fund | Alaska Teamster-Employer Pension Plan | Automotive Industries Pension Plan | Central Pennsylvania Teamsters Defined Benefit Plan | Eastern Shore Teamsters Pension Fund | Employer-Teamsters Local Nos. 175 & 505 Pension Trust Fund | Hagerstown Motor Carriers and Teamsters Pension Fund | I.A.M. National Pension Fund / National Pension Plan | International Brotherhood of Teamsters Union Local No. 710 Pension Fund | Local 705, International Brotherhood of Teamsters Pension Plan | Local 804 I.B.T. & Local 447 I.A.M.—UPS Multiemployer Retirement Plan | Milwaukee Drivers Pension Trust Fund | New England Teamsters & Trucking Industry Pension Fund | New York State Teamsters Conference Pension and Retirement Fund | Teamster Pension Fund of Philadelphia and Vicinity | Teamsters Joint Council No. 83 of Virginia Pension Fund | Teamsters Local 639—Employers Pension Trust | Teamsters Negotiated Pension Plan | Truck Drivers and Helpers Local Union No. 355 Retirement Pension Plan | United Parcel Service, Inc.—Local 177, I.B.T. Multiemployer Retirement Plan | Western Conference of Teamsters Pension Plan | Western Pennsylvania Teamsters and Employers Pension Fund | All Other Multiemployer Pension Plans | Total Contributions |


Beginning in late 2008 and continuing throughout 2009, the disruption in the global credit markets and the deterioration of the financial markets has created significant uncertainty in the marketplace.
The prolonged economic downturn is adversely impacting our clients’ financial condition and the levels of business activities in the industries and geographies where we operate.
While we believe that the majority of our practices are well positioned to manage through this time, these challenges are reducing demand for some of our services and depressing the price of those services, which is having an adverse effect on our new business and results of operations.


| For the years ended December 31, | 2011 | Credit-related concerns | Held for sale | Agricultural loans | B-note participations | Mezzanine loans | Total |


| Number of shares Amount Capital in excess of par value Treasury stock Retained earnings (deficit) Accumulated other comprehensive income (loss) Total stockholders’ equity (deficit) | (In millions) | December 25, 2005 | Comprehensive loss: | Net loss | Other comprehensive income (loss): | Net change in unrealized gains on investments, net of taxes of $0 | Net change in cumulative translation adjustments | Net change in unrealized gains on cash flow hedges, net of taxes of $0 | Reclassification adjustment for gain included in earnings, net of taxes of $0 | Total other comprehensive loss | Total comprehensive loss | Issuance of shares: | Employee stock plans | Common stock issued in public offering, net of issuance cost | Common stock issued for ATI Acquisition (see Note 3) | Fair value of vested options and restricted stock units issued to ATI employees (see Note 3) | Conversion of 4.75% Senior Debentures due 2022 (see Note 9) | Compensation recognized under employee stock plans | December 31, 2006 | Comprehensive loss: | Net loss | Other comprehensive income (loss): | Net change in unrealized gains on investments, net of taxes of $0 | Net change due to reduction in Spansion investment | Net change in unrealized gains on cash flow hedges, net of taxes of $0 | Reclassification adjustment for gain included in earnings, net of taxes of $1 | Total other comprehensive income | Total comprehensive loss | Cumulative effect of adoption of new accounting pronouncements | Issuance of shares: | Employee stock plans | Common stock issued, net of issuance cost | Purchased of Capped Call | Compensation recognized under employee stock plans | Others | December 29, 2007 | Comprehensive loss: | Net loss | Other comprehensive income (loss): | Net change in unrealized gains on cash flow hedges, net of taxes of $3 | Reclassification adjustment for gains included in earnings, net of taxes of $0 | Minimum pension liability | Total other comprehensive loss | Total comprehensive loss | Issuance of shares: | Employee stock plans | Compensation recognized under employee stock plans | December 27, 2008 |


PART II ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Vornado’s common shares are traded on the New York Stock Exchange under the symbol “VNO.
” Quarterly high and low sales prices of the common shares and dividends paid per share for the years ended December 31, 2011 and 2010 were as follows:


| (in millions) Maturity Amount Unamortized Discount Carrying Value Fair Value | 1.375% Notes due 2015 | 6.25% Notes due 2017 | 5.00% Notes due 2019 | 4.25% Notes due 2021 | 3.375% Notes due 2022 | 3.50% Notes due 2024 | Total Long-term Borrowings |


| 2006 2005 | American Tower credit facility | SpectraSite credit facility | Senior subordinated notes | Senior subordinated discount notes, net of discount and warrant valuation | Senior notes, net of discount and premium | Convertible notes, net of discount | Notes payable and capital leases | Total | Less current portion of other long-term obligations | Long-term obligations |


| Increase Decrease | Effect on total of service and interest cost | Effect on postretirement benefit obligation |


| 2006 2005 | (in millions) | Domestic Life Insurance & Retirement Services: | Balance at beginning of year(a) | Acquisition costs deferred | Amortization (charged) or credited to operating income: | Related to realized capital gains (losses) | Related to unlocking future assumptions | All other amortization(b) | Related to change in unrealized gains (losses) on securities | Increase (decrease) due to foreign exchange | Balance at end of year | Foreign Life Insurance & Retirement Services: | Balance at beginning of year(a) | Acquisition costs deferred | Amortization (charged) or credited to operating income: | Related to realized capital gains (losses) | Related to unlocking future assumptions | All other amortization | Related to change in unrealized gains (losses) on securities | Increase (decrease) due to foreign exchange | Balance at end of year | Total Life Insurance & Retirement Services: | Balance at beginning of year(a) | Acquisition costs deferred | Amortization (charged) or credited to operating income: | Related to realized capital gains (losses) | Related to unlocking future assumptions | All other amortization | Related to change in unrealized gains (losses) on securities | Increase (decrease) due to foreign exchange | Balance at end of year |


| % of Total % of Total Increase | 2010 | Healthcare distribution -1: | Dental -2 | Medical -3 | Animal health -4 | International -5 | Total healthcare distribution | Technology -6 | Total |


| Years Ended December 31, | 2008 | (in millions, except percentages) | Revenues | Management and financial advice fees | Net investment income | Other revenues | Total revenues | Banking and deposit interest expense | Total net revenues | Expenses | Distribution expenses | Interest and debt expense | Separation costs | General and administrative expense | Total expenses | Pretax loss |


As of December 31, 2017, we had $1.238 billion of gross unrecognized tax benefits, of which a net $1.150 billion, if recognized, would affect our effective tax rate.
As of December 31, 2016, we had $1.095 billion of gross unrecognized tax benefits, of which a net $1.006 billion, if recognized, would affect our effective tax rate.
As of December 31, 2015, we had $1.056 billion of gross unrecognized tax benefits, of which a net $900 million, if recognized, would affect our effective tax rate.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


During 2015, the Company recognized net benefits related to discrete tax items of $63.3 million.
The net benefits were driven primarily by the release of $20.6 million of valuation allowances, based on the realizability of foreign deferred tax assets and the ability to recognize a worthless stock deduction of $39.0 million for the tax basis in a wholly-owned domestic subsidiary.
During 2014, the Company recognized net expenses related to discrete tax items of $13.2 million.
The net expenses were driven primarily by an update to non-current tax liabilities for certain global tax audits, an adjustment related to the re-characterization of intercompany payments between its U. S.  and foreign affiliates, the remeasurement of certain deferred tax assets and liabilities resulting from changes in its deferred state tax rate, recognizing adjustments from filing its 2013 U. S.  federal and state tax returns, net changes of valuation allowances based on the realizability of foreign deferred tax assets and the impact from other foreign country audit settlements.
A reconciliation of the beginning and ending amount of gross liability for unrecognized tax benefits is as follows:


| As of April 30, 2011 April 30, 2010 | Short-term | Moody’s | S&P | DBRS |


| Year ended December 31 2018 2017 | Discount rate | Qualified pension | Nonqualified pension | Postretirement benefits | Rate of compensation increase (average) | Assumed health care cost trend rate | Initial trend | Ultimate trend | Year ultimate trend reached |


| December 31, 2010 December 31, 2009 | In the Event of Death | ($ in millions) | Variable Annuity Contracts | Return of net deposits | Account value | Net amount at risk | Average attained age of contractholders | Minimum return or contract value | Account value | Net amount at risk | Average attained age of contractholders | Average period remaining until earliest expected annuitization |


| 2007 2006 | (in millions) | Individual annuities | Group annuities | Guaranteed investment contracts and guaranteed interest accounts | Funding agreements | Interest-sensitive life contracts | Dividend accumulations and other | Policyholders’ account balances |


Long-Term Performance Compensation Plan Prior to January 1, 2005, the Holding Company granted stock-based compensation awards to certain members of management under the Long-Term Performance Compensation Plan (LTPCP).
The final LTPCP performance period concluded during 2007.
The awards for the final LTPCP performance period, in the amount of 618,375 shares of the Holding Companys common stock and $16 million in cash, were paid during 2007.
No significant compensation expense related to LTPCP was recognized during the year ended December 31, 2007.


| North America Europe,Middle East& Africa Asia Pacific South America Total | Electrical/Electronic Architecture | Powertrain Systems | Electronics and Safety | Total |


THE AES CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) DECEMBER 31, 2017, 2016, AND 2015 163 was dispatched starting in February 2018.  AES Puerto Rico continues to be the lowest cost and EPA compliant energy provider in Puerto Rico.
Therefore, we expect AES Puerto Rico to continue to be a critical supplier to PREPA.
Starting prior to the hurricanes, PREPA has been facing economic challenges that could impact the Company, and on July 2, 2017, filed for bankruptcy under Title III.
As a result of the bankruptcy filing, AES Puerto Rico and AES Ilumina’s non-recourse debt of $365 million and $36 million, respectively, is in default and has been classified as current as of December 31, 2017.
In November 2017, AES Puerto Rico signed a Forbearance and Standstill Agreement with its lenders to prevent the lenders from taking any action against the company due to the default events.
This agreement will expire on March 22, 2018.
The Company's receivable balances in Puerto Rico as of December 31, 2017 totaled $86 million, of which $53 million was overdue.
After the filing of Title III protection, and up until the disruption caused by the hurricanes, AES in Puerto Rico was collecting the overdue amounts from PREPA in line with historic payment patterns.
Considering the information available as of the filing date, management believes the carrying amount of our assets in Puerto Rico of $627 million is recoverable as of December 31, 2017 and no reserve on the receivables is required.
Foreign Currency Risks — AES operates businesses in many foreign countries and such operations could be impacted by significant fluctuations in foreign currency exchange rates.
Fluctuations in currency exchange rate between U. S.  dollar and the following currencies could create significant fluctuations in earnings and cash flows: the Argentine peso, the Brazilian real, the Dominican Republic peso, the Euro, the Chilean peso, the Colombian peso, and the Philippine peso.
Concentrations — Due to the geographical diversity of its operations, the Company does not have any significant concentration of customers or sources of fuel supply.
Several of the Company's generation businesses rely on PPAs with one or a limited number of customers for the majority of, and in some cases all of, the relevant businesses' output over the term of the PPAs.
However, no single customer accounted for 10% or more of total revenue in 2017, 2016 or 2015.
The cash flows and results of operations of our businesses depend on the credit quality of our customers and the continued ability of our customers and suppliers to meet their obligations under PPAs and fuel supply agreements.
If a substantial portion of the Company's long-term PPAs and/or fuel supply were modified or terminated, the Company would be adversely affected to the extent that it would be unable to replace such contracts at equally favorable terms.26.
RELATED PARTY TRANSACTIONS Certain of our businesses in Panama and the Dominican Republic are partially owned by governments either directly or through state-owned institutions.
In the ordinary course of business, these businesses enter into energy purchase and sale transactions, and transmission agreements with other state-owned institutions which are controlled by such governments.
At two of our generation businesses in Mexico, the offtakers exercise significant influence, but not control, through representation on these businesses' Boards of Directors.
These offtakers are also required to hold a nominal ownership interest in such businesses.
In Chile, we provide capacity and energy under contractual arrangements to our investment which is accounted for under the equity method of accounting.
Additionally, the Company provides certain support and management services to several of its affiliates under various agreements.


| Issued In Treasury Shares Outstanding | Balance, January 1, 2008 | Shares sold to optionees less shares exchanged | Shares issued under employee stock purchase plan | Stock repurchase program | Issued on conversions of debentures | Balance, December 31, 2008 | Shares sold to optionees less shares exchanged | Vesting of restricted stock | Shares issued under employee stock purchase plan | Stock repurchase program | Balance, December 31, 2009 | Acquisition of Smith International, Inc. | Shares sold to optionees less shares exchanged | Shares issued under employee stock purchase plan | Stock repurchase program | Issued on conversions of debentures | Balance, December 31, 2010 |


Our environmental site activity was as follows:


| Company and ARO Description ARO Liability 12/31/2013 Incurred Settled 1 Accretion Cash flow Revisions In MillionsARO Liability 12/31/2014 | CMS Energy, including Consumers | Gas treating plant and gas wells | Consumers | Total CMS Energy | Consumers | Coal ash disposal areas | Asbestos abatement | Gas distribution cut, purge, and cap | Wind parks | Total Consumers |


| -1(2) December 31, 2005 December 31, 2004 | NAIC Designation | (in millions) | 1 | 2 | Subtotal Investment Grade | 3 | 4 | 5 | 6 | Subtotal Below Investment Grade | Total Private Fixed Maturities | -1 | NAIC Designation | (in millions) | 1 | 2 | Subtotal Investment Grade | 3 | 4 | 5 | 6 | Subtotal Below Investment Grade | Total Private Fixed Maturities |


| 2014 Unrestricted 2013 Unrestricted | Less: | Unearned finance income: | Equipment notes | Sales-type leases | Total | Financing receivables  related to the company’s  sales of equipment |


| Scheduled Amortization Principal Repayments Revolving Credit Facilities Term  Loan Total Joint Venture Debt | 2004 | 2005 | 2006 | 2007 | 2008 | Thereafter | $56,675 |


(1) Consists of customer-related intangibles of approximately $36.5 million and network location intangibles of approximately $27.0 million.
The customer-related intangibles and network location intangibles are being amortized on a straight-line basis over periods of up to 20 years.
(2) The Company expects that the goodwill recorded will be not be deductible for tax purposes.
The goodwill was allocated to the Company’s international rental and management segment.
Germany Acquisition—On November 14, 2012, the Company entered into a definitive agreement to purchase communications sites from E-Plus Mobilfunk GmbH & Co.  KG.
On December 4, 2012, the Company completed the purchase of 2,031 communications sites, for an aggregate purchase price of $525.7 million.


Stock-Based Compensation We grant other stock-based compensation awards such as stock-settled awards, cash-settled awards and performancebased awards (settled in cash or shares) to certain key employees.
The number of shares or units received by an employee for performance-based awards depends on Company performance against specific performance targets and could range from 0% to 300% of the target amount of shares originally granted.
Incentive awards are subject to certain restrictions and vesting requirements as determined by the Compensation Committee.
The fair value of the shares on the grant date is amortized over the vesting period, which is generally three years.
Upon completion of the vesting period for cash-settled awards, the grantee is entitled to receive a payment in cash based on the fair market value of the corresponding number of shares of common stock.
No monetary consideration is paid by a recipient for any incentive award.
The fair value of cash-settled awards is adjusted each quarter based on our share price.
The holders of stock-settled awards have absolute ownership interest in the underlying shares of common stock prior to vesting, which includes the right to vote and receive dividends.
Dividends declared on common stock are accrued during the vesting period and paid when the award vests.
The holders of cash-settled and performance-based awards have no ownership interest in the underlying shares of common stock until the awards vest and the shares of common stock are issued.


| Restaurants at December 31, 2016 2015 2014 | Conventional franchised | Developmental licensed | Foreign affiliated | Franchised | Company-operated | Systemwide restaurants |


| 2015 2014 2013 | McKesson Corporation | 16% | 12% |


| 2009 2008 2007 | (in thousands, except per share data) | Basic EPS: | Net income available to common shareholders | Basic weighted average shares outstanding | Earnings per share | Diluted EPS: | Net income available to common shareholders | Basic weighted average shares outstanding | Plus: dilutive effect of stock options and restricted stock awards | Diluted weighted average shares outstanding | Earnings per share |