| (In millions) 2007 2006 2005 | E&P | OSM | RM&T | IG | Segment revenues | Elimination of intersegment revenues | Gain (loss) on long-term U.K. gas contracts | Total revenues | Items included in both revenue and costs and expenses: | Consumer excise taxes on petroleum products and merchandise | Matching crude oil and refined product buy/sell transactions settled in cash: | E&P | RM&T | Total buy/sell transactions included in revenues |


Management’s Discussion and Analysis of Financial Condition and Results of Operations – Continued O&R’s electric operating revenues decreased $49 million in 2012 compared with 2011 due primarily to lower purchased power costs ($69 million), offset in part by the New York electric rate plan ($12 million).
O&R’s New York electric delivery revenues are subject to a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
O&R’s electric sales in New Jersey and Pennsylvania are not subject to a decoupling mechanism, and as a result, changes in such volumes do impact revenues.
Other electric operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s electric rate plan.
See Note B to the financial statements in Item 8.
Electric delivery volumes in O&R’s service area decreased 1.0 percent in 2012 compared with 2011.
After adjusting for weather and other variations, electric delivery volumes in O&R’s service area increased 0.8 percent in 2012 compared with 2011.
Electric operating income increased $2 million in 2012 compared with 2011.
The increase reflects primarily higher net revenues ($20 million), offset by higher operations and maintenance expense ($9 million, due to higher pension and health care expense), taxes other than income taxes ($6 million, principally property taxes) and depreciation and amortization ($3 million).
Most of the operating expenses attributable to major storms in 2012 and 2011 were deferred as a regulatory asset.


STATE STREET CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 167 With respect to the 5.25% subordinated bank notes due 2018, State Street Bank is required to make semiannual interest payments on the outstanding principal balance of the notes on April 15 and October 15 of each year, and the notes qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.
With respect to the 5.30% subordinated notes due 2016 and the floating-rate subordinated notes due 2015, State Street Bank is required to make semi-annual interest payments on the outstanding principal balance of the 5.30% subordinated notes on January 15 and July 15 of each year, and quarterly interest payments on the outstanding principal balance of the floating-rate notes on March 8, June 8, September 8 and December 8 of each year.
Each of the subordinated notes qualifies for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.
Note 11.
Commitments, Guarantees and Contingencies Commitments: We had unfunded off-balance sheet commitments to extend credit totaling $21.30 billion and $17.86 billion as of December 31, 2013 and 2012, respectively.
The potential losses associated with these commitments equal the gross contractual amounts, and do not consider the value of any collateral.
Approximately 75% of our unfunded commitments to extend credit expire within one year from the date of issue.
Since many of these commitments are expected to expire or renew without being drawn upon, the gross contractual amounts do not necessarily represent our future cash requirements.
Guarantees: Off-balance sheet guarantees are composed of indemnified securities financing, stable value protection, unfunded commitments to purchase assets, and standby letters of credit.
The potential losses associated with these guarantees equal the gross contractual amounts, and do not consider the value of any collateral.


ITEM 7 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXECUTIVE SUMMARY THE PNC FINANCIAL SERVICES GROUP, INC.  PNC is one of the largest diversified financial services companies in the United States based on assets, with businesses engaged in retail banking, corporate and institutional banking, asset management, and global fund processing services.
We provide many of our products and services nationally and others in our primary geographic markets located in Pennsylvania, New Jersey, Washington, DC, Maryland, Virginia, Ohio, Kentucky and Delaware.
We also provide certain global fund processing services internationally.
KEY STRATEGIC GOALS Our strategy to enhance shareholder value centers on driving positive operating leverage by achieving growth in revenue from our diverse business mix that exceeds growth in expenses as a result of disciplined cost management.
In each of our business segments, the primary drivers of revenue growth are the acquisition, expansion and retention of customer relationships.
We strive to expand our customer base by providing convenient banking options and leading technology systems, providing a broad range of fee-based products and services, focusing on customer service, and through a significantly enhanced branding initiative.
We may also grow revenue through appropriate and targeted acquisitions and, in certain businesses, by expanding into new geographical markets.
We have maintained a moderate risk profile characterized by strong credit quality and limited exposure to earnings volatility resulting from interest rate fluctuations and the shape of the interest rate yield curve.
Our actions have created a strong balance sheet, ample liquidity and investment flexibility to adjust, where appropriate, to changing interest rates and market conditions.
We continue to be disciplined in investing capital in our businesses while returning a portion to shareholders through dividends and share repurchases when appropriate.
ACQUISITION AND DIVESTITURE ACTIVITY A summary of pending and recently completed acquisitions and divestitures is included under Item 1 and in Note 2 Acquisitions and Divestitures in the Notes To Consolidated Financial Statements in Item 8 of this Report.
KEY FACTORS AFFECTING FINANCIAL PERFORMANCE Our financial performance is substantially affected by several external factors outside of our control, including: ?
General economic conditions, ?
Loan demand, utilization of credit commitments and standby letters of credit, and asset quality ?
Customer demand for other products and services, ?
Movement of customer deposits from lower to higher rate accounts or to investment alternatives, ?
The level of, direction, timing and magnitude of movement in interest rates, and the shape of the interest rate yield curve, and ?
The functioning and other performance of, and availability of liquidity in, the capital and other financial markets.  ?
The impact of credit spreads on valuations of commercial mortgage loans held for sale and the market for securitization and sale of these assets.
Starting in the middle of 2007, and continuing at present, there has been significant turmoil and volatility in worldwide financial markets, accompanied by uncertain prospects for the overall economy.
Our performance in 2008 will be impacted by developments in these areas.
In addition, our success in 2008 will depend, among other things, upon: ?
Further success in the acquisition, growth and retention of customers, ?
The successful integration of Yardville and progress toward closing and integrating the Sterling acquisition, ?
Completing the divestiture of Hilliard Lyons, ?
Continued development of the Mercantile franchise, including full deployment of our product offerings, ?
Revenue growth, ?
A sustained focus on expense management and creating positive operating leverage, ?
Maintaining strong overall asset quality, ?
Prudent risk and capital management, and ?
Actions we take within the capital and other financial markets.


| (In millions) 2006 2005 2004 | 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 |


| December 31,2013 December 31,2014 December 31,2015 December 31,2016 December 31,2017 December 31,2018 | DISCA | DISCB | DISCK | S&P 500 | Peer Group incl. Acquired Companies | Peer Group ex. Acquired Companies |


| 2011 2012 2013 2014 2015 Annual Average for 2011-2015 | (Dollars in millions unless otherwise stated) | Net Baseload Capacity (MW)(a) | Forecasted Baseload Capacity (MW)(b) | Total Baseload Sales (MW)(c)(d) | Percentage Baseload Capacity Sold Forward(e) | Total Forward Hedged Revenues(f)(g) | Weighted Average Hedged Price ($ per MWh)(f) | Average Equivalent Natural Gas Price ($ per MMBtu) |


| 2006 2005 | (In millions) | Years ended December 31, | Foreign exchange products | Interest-rate products |


| 2010 2009 | (in millions) | General obligations: | Capital debt-1 | Investment-related | Securities business-related | Specified other businesses | Total general obligations | Limited and non-recourse debt-2 | Total borrowings | Short-term debt | Long-term debt | Total borrowings | Borrowings of Financial Services Businesses | Borrowings of Closed Block Business | Total borrowings | Calendar Year: | 2012 | 2013 | 2014 | 2015 | 2016 and thereafter | Total |


| Triple-net lease rental revenue resulting from acquisitions— for the year ended December 31, | Property Type | (in thousands) | Senior housing facilities | Other healthcare facilities | Total |


| 2009 | Less than twelve months | Fair Value | (in millions) | Fixed maturities-2 | U.S. Treasury securities and obligations of U.S. government authorities and agencies | Obligations of U.S. states and their political subdivisions | Foreign government bonds-1 | Corporate securities-1 | Commercial mortgage-backed securities | Asset-backed securities | Residential mortgage-backed securities | Total | 2010 | (in millions) | Individual annuities | Group annuities | Guaranteed investment contracts and guaranteed interest accounts | Funding agreements | Interest-sensitive life contracts | Dividend accumulation and other | Total policyholders’ account balances |


The tax benefit recognized in our consolidated financial statements is based on the amount of compensation expense recorded for book purposes.
The actual tax benefit realized in our tax return is based on the intrinsic value, or the excess of the market value over the exercise or purchase price, of stock options exercised and restricted stock awards vested during the period.
The actual tax benefit realized for the deductions taken on our tax returns from option exercises and restricted stock award vesting totaled $14.9 million in 2010, $16.3 million in 2009, and $16.9 million in 2008.
There was no capitalized stock-based compensation expense.
The stock plans provide that one restricted share is equivalent to 1.7 stock options.
At December 31, 2010, there were 12,375,233 shares reserved for stock award plans, including 3,225,299 shares of common stock available for future grants assuming all stock options or 1,897,235 shares available for future grants assuming all restricted shares.
Stock Options Stock options are granted with an exercise price equal to the fair market value of the underlying common stock on the date of grant.
Our stock plans, as approved by the Board of Directors and stockholders, define fair market value as the average of the highest and lowest composite stock prices reported by the New York Stock Exchange on a given date.
Exercise provisions vary, but most options vest in whole or in part 1 to 3 years after grant and expire 7 to 10 years after grant.
Upon grant, stock options are assigned a fair value based on the BlackScholes valuation model.
Compensation expense is recognized on a straight-line basis over the total requisite service period, generally the total vesting period, for the entire award.
For stock options granted on or after


| 2009 2008 2007 | Return on average assets | Return on average common equity |


income was due primarily to the adoption of Statement of Position 03-1,
Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts
 (SOP 03-1), which resulted in $1.6 billion of net investment income.2003 Compared to 2002
 Revenues for the year ended December 31, 2003 increased $2.3 billion over the comparable 2002 period.
Revenues increased due to earned premium growth within the Business Insurance, Specialty Commercial and Personal Lines segments, primarily as a result of earned pricing increases, higher earned premiums and net investment income in the Retail Products segment and net realized capital gains in 2003 as compared to net realized capital losses in 2002.
Total benefits, claims and expenses increased $3.9 billion for the year ended December 31, 2003 over the comparable prior year period primarily due to the Company’s $2.6 billion asbestos reserve strengthening during the first quarter of 2003 and due to increases in the Retail Products segment associated with the growth in the individual annuity and institutional investments businesses.
The net loss for the year ended December 31, 2003 was primarily due to the Company’s first quarter 2003 asbestos reserve strengthening of $1.7 billion, after-tax.
Included in net loss for the year ended December 31, 2003 are $40 of after-tax expense related to the settlement of litigation with Bancorp Services, LLC (“Bancorp”) and $27 of severance charges, after-tax, in Property & Casualty.
Included in net income for the year ended December 31, 2002 are the $8 after-tax benefit recognized by Hartford Life, Inc.  (“HLI”) related to the reduction of HLI’s reserves associated with September 11 and $11 of after-tax expense related to litigation with Bancorp.
Net Realized Capital Gains and Losses See “Investment Results” in the Investments section.
Income Taxes The effective tax rate for 2004, 2003 and 2002 was 15%, 83% and 6%, respectively.
The principal causes of the difference between the effective rates and the U. S.  statutory rate of 35% were tax-exempt interest earned on invested assets, the dividends-received deduction, the tax benefit associated with the settlement of the 1998-2001 IRS audit in 2004 and the tax benefit associated with the settlement of the 1996-1997 IRS audit in 2002.
Income taxes paid (received) in 2004, 2003 and 2002 were $32, ($107) and ($102) respectively.
For additional information, see Note 13 of Notes to Consolidated Financial Statements.
Per Common Share The following table represents earnings per common share data for the past three years:


| 2005 2004 2003 | Dividend yield | Volatility | Risk-free interest rate | Expected life (years) |


| Commodity Price Increase (Decrease) Year Ended December 31, | 2011 | Crude Oil & Condensate | (Per Bbl) | United States | Equatorial Guinea | Total Consolidated Operations | Total |


Segment and Geographic Information The Company operates an electronic multi-party platform for the trading of fixed-income securities and provides related data, analytics, compliance tools and post-trade services.
The Company’s operations constitute a single business segment because of the highly integrated nature of these product and services, of the financial markets in which the Company competes and of the Company’s worldwide business activities.
The Company believes that results by geographic region or client sector are not necessarily meaningful in understanding its business.
For the years ended December 31, 2014 and 2013, the U. K.  is the only individual foreign country in which we have a subsidiary that accounted for 10% or more of the total revenues or total long-lived assets of the Company.
Revenues and long-lived assets are attributed to geographic area based on the location of the particular subsidiary.
Long-lived assets are defined as furniture, equipment, leasehold improvements and capitalized software .
Information regarding revenue for the three years ended December 31, 2014 and long-lived assets as of December 31, 2014 and 2013 follows:
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013 Overview Total ?revenues ?increased ?by ?$24.0 ?million ?or ?10.1% ?to ?$262.8 ?million ?for ?the ?year ?ended ?December ?31, ?2014 ?from ?$238.7 ?million ?for ?the ?year ?ended December?31,?2013.
?This?increase?in?total?revenues?was?primarily?due?to?an?increase?in?commissions?of?$17.5?million?and?an?increase?in?revenue?from?information and ?post-trade ?services ?of ?$6.1 ?million.
?The ?increase ?in ?revenue ?from ?information ?and ?post-trade ?services ?was ?primarily ?due ?to ?the ?inclusion ?in ?2014 ?of ?two additional?months?of?revenues?from?Xtrakter,?which?was?acquired?in?February?2013.
?A?5.4%?change?in?the?foreign?currency?exchange?rates?of?the?Pound?Sterling compared?to?the?U.
S. ?dollar?from?the?year?ended?December?31,?2013?to?the?year?ended?December?31,?2014?had?the?effect?of?increasing?revenues?by?$1.9?million.
Total ?expenses ?increased ?by ?$12.8 ?million ?or ?9.7% ?to ?$144.2 ?million ?for ?the ?year ?ended ?December ?31, ?2014 ?from ?$131.5 ?million ?for ?the ?year ?ended December?31,?2013.
?This?increase?was?primarily?due?to?higher?employee?compensation?and?benefits?of?$10.6?million,?depreciation?and?amortization?of?$3.3?million, technology?and?communication?costs?of?$1.6?million?and?marketing?and?advertising?costs?of?$1.1?million,?which?were?partially?offset?by?a?decrease?in?professional and?consulting?fees?of?$3.8?million.
??The?increase?in?expenses?reflects?the?inclusion?in?2014?of?two?additional?months?of?expenses?from?Xtrakter. ?
?During?the?second quarter?of?2013,?we?determined?that?we?had?incorrectly?excluded?incentive?compensation?as?a?component?of?employee?compensation?eligible?for?capitalization under?our?software?development?costs?capitalization?policy. ?
?We?recorded?this?item?as?an?out-of-period?adjustment?in?the?three?months?ended?June?30,?2013?by reducing ?employee ?compensation ?and ?benefits ?expense ?by ?$2.9 ?million ?and ?increasing ?depreciation ?and ?amortization ?expense ?by ?$1.3 ?million.
?The ?change ?in foreign?currency?exchange?rates?had?the?effect?of?increasing?expenses?by?$1.7?million?for?the?year?ended?December?31,?2014.
??
Income?before?taxes?from?continuing?operations?increased?by?$11.3?million?or?10.5%?to?$118.5?million?for?the?year?ended?December?31,?2014?from?$107.3 million?for?the?year?ended?December?31,?2013.
?Net?income?from?continuing?operations?increased?by?$6.2?million?or?9.1%?to?$74.8?million?for?the?year?ended December?31,?2014?from?$68.6?million?for?the?year?ended?December?31,?2013.
In?October?2013,?we?sold?Greenline?Financial?Technologies,?Inc.
?(“Greenline”)?for?$11.0?million?and?recognized?a?gain?on?the?sale,?net?of?a?tax?benefit,?of $7.6 ?million.
?Greenline’s ?operating ?results ?have ?been ?classified ?as ?discontinued ?operations ?in ?our ?Consolidated ?Statement ?of ?Operations.
?The ?net ?loss ?from discontinued?operations?for?the?year?ended?December?31,?2013?was?$0.2?million.
Revenues Our?revenues?for?the?years?ended?December?31,?2014?and?2013,?and?the?resulting?dollar?and?percentage?changes,?were?as?follows:


| Accrual Non-accrual | In millions of dollars | Mortgage and real estate | Cards-1 | Installment and other |


| September 30, 2007 September 30, 2006 | (in 000's) | Net Unrealized (Loss) Gain on Securities Available for Sale, Net of Tax Effect of ($998) in 2007 | and $245 in 2006 | Net Currency Translations, Net of Tax Effect of $18,593 in 2007 and $7,285 in 2006 | Accumulated Other Comprehensive Income |


PART II – FINANCIAL INFORMATION ITEM 8?Financial Statements and Supplementary Data NOTE?19 Share-Based Compensation Sysco provides compensation benefits to employees under several share-based payment arrangements, including various long-term employee stock incentive plans and the 2015 Employee Stock Purchase Plan (ESPP).
Stock Incentive Plans In November 2018, Sysco’s Omnibus Incentive Plan (2018 Plan) was adopted and reserved up to 51,500,000 shares of Sysco common stock for share-based awards to employees, non-employee directors and key advisors.
Of the 51,500,000 authorized shares, the full 51,500,000 shares may be issued as options or stock appreciation rights and up to 17,500,000 shares may be issued as restricted stock, restricted stock units or other types of stock-based awards.
To date, Sysco has issued options, restricted stock units and performance share units under the 2018 Plan.
Vesting requirements for awards under the 2018 Plan vary by individual grant and may include either time-based vesting or time-based vesting subject to acceleration based on performance criteria for fiscal periods of at least one year.
The contractual life of all options granted under the 2018 Plan are and will be no greater than ten years.
As of June?29, 2019, there were 50,783,126 remaining shares authorized and available for grant in total under the 2018 Plan, of which the full 50,783,126 shares may be issued as options or stock appreciation rights, or as a combination of up to 16,841,942 shares that may be issued as restricted stock, restricted stock units or other types of stock-based awards, with the remainder available for issuance as options or stock appreciation rights.
Sysco has also granted employee options under several previous employee stock option plans for which previously granted options remain outstanding as of June 29, 2019.
No new options will be issued under any of the prior plans, as future grants to employees will be made through the 2018 Plan or subsequently adopted plans.
Awards under these plans are subject to time-based vesting with vesting periods that vary by individual grant.
The contractual life of all options granted under these plans is ten years.
Sysco’s policy is to utilize treasury stock for issuing shares upon share option exercise or share unit conversion.
Performance Share Units During fiscal 2019 and 2018, 581,174 and 895,968 performance share units (PSUs), respectively, were granted to employees.
Based on the jurisdiction in which the employee resides, some of these PSUs were granted with forfeitable dividend equivalents.
The fair value of each PSU award granted with a dividend equivalent is based on the company’s stock price as of the date of grant.
For PSUs granted without dividend equivalents, the fair value was reduced by the present value of expected dividends during the vesting period.
The weighted average grant-date fair value per performance share unit granted during fiscal 2019 and 2018 was $74.86 and $51.11, respectively.
The PSUs granted will vest and convert into shares of Sysco common stock at the end of the performance periods, which conclude at the end of fiscal 2021 and fiscal 2020, respectively, based on financial performance targets consisting of Sysco’s earnings per share, compound annual growth rate and adjusted return on invested capital.
Stock Options Sysco’s option awards are subject to graded vesting over a requisite service period with compensation cost recognized on a straight-line basis over the requisite service period over the duration of the award.
In addition, certain of Sysco’s options provide that the options continue to vest as if the optionee continued as an employee or director if the optionee meets certain age and years of service thresholds upon retirement.
In these cases, Sysco will recognize compensation cost for such awards over the period from the grant date to the date the employee or director first becomes eligible to retire with the options continuing to vest after retirement.
The fair value of each option award is estimated as of the date of grant using a Black-Scholes option pricing model.
Expected dividend yield is estimated based on the historical pattern of dividends and the average stock price for the year preceding the option grant.
Expected volatility is based on historical volatility of Sysco’s stock, implied volatilities from traded options on Sysco’s stock and other factors.
The risk-free rate for the expected term of the option is based on the U. S.  Treasury yield curve in effect at the time of grant.
Sysco utilizes historical data to estimate option exercise and employee termination behavior within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately in determining the expected life of awards for valuation purposes.
The weighted average assumptions discussed above are noted in the table below for relevant periods as follows:


| Funded Pension Plans Unfunded Pension Plan Postretirement Medical Plan | 2013 | (In millions) | Change in fair value of plan assets | Balance at January 1 | Actual return on plan assets | Employer contributions | Benefit payments | Plan settlements (b) | Foreign currency exchange rate changes | Balance at December 31 | Funded status (plan assets greater (less) than benefit obligations) at December 31 | Unrecognized net actuarial (gains) losses | Net amount recognized |


| Years Ended December 31, | 2014 | (in millions) | Revenues | Management and financial advice fees | Distribution fees | Net investment income | Premiums | Other revenues | Total revenues | Banking and deposit interest expense | Total net revenues | Expenses | Distribution expenses | Interest credited to fixed accounts | Benefits, claims, losses and settlement expenses | Amortization of deferred acquisition costs | Interest and debt expense | General and administrative expense | Total expenses | Operating earnings |


| December 31, 2009 | (Dollars in millions) | Maximum loss exposure | On-balance sheet assets | Available-for-saledebt securities | Held-to-maturitydebt securities | Loans and leases | All other assets | Total | On-balance sheet liabilities | Commercial paper and other short-term borrowings | Total | Total assets of VIEs |


Depreciation and Amortization Expense Depreciation and amortization expense increased from $188.0 million in 2003 to $224.6 million in 2004 as a result of increased capital spending associated with increased leasing, the additional basis resulting from acquisitions, development activity and the application of SFAS 141 as described below.
The points below highlight the significant increase in depreciation and amortization.
● Depreciation expense on tenant improvements increased by $14.1 million.
● Depreciation expense on buildings increased by $6.0 million.
● Lease commission amortization increased by $2.2 million.
The amortization expense associated with acquired lease intangible assets increased by approximately $10.0 million.
The acquisitions were accounted for in accordance with SFAS 141 which requires the allocation of a portion of a property’s purchase price to intangible assets for leases acquired and in-place at the closing date of the acquisition.
These intangible assets are amortized over the remaining life of the leases (generally 3-5 years) as compared to the building basis portion of the acquisition, which is depreciated over 40 years.


| Year ended December 31, | 2005 | (in millions) | Operating results: | Revenues | Expenses | Adjusted operating income | Realized investment gains (losses), net(1) | Related charges-2 | Income (loss) from continuing operations before income taxes, extraordinary gain on acquisition and cumulative effect of accountingchange |


9.
Earnings Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during each period.
Diluted earnings per share (diluted EPS) is calculated using income available to common shareholders divided by diluted weightedaverage shares of common stock outstanding during each period.
Potentially dilutive securities include shares of common stock underlying stock options, SOSARs and non-vested stock awards.
Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect.
SOSARs to purchase 240, 340 and 532 shares of common stock were excluded from the calculation of 2011, 2010 and 2009 diluted EPS, respectively, because they were anti-dilutive.
In addition, 224, 60 and 119 stock awards subject to performance conditions were excluded from the 2011, 2010 and 2009 calculations of diluted EPS.
The following table sets forth the computations of basic and dilutive earnings per share:


| ($ in millions) 2008 2007 2006 | Sales-1 | Impairment write-downs-2 | Change in intent write-downs-1(3) | Valuation of derivative instruments | EMA LP income-4 | Settlements of derivative instruments | Realized capital gains and losses, pre-tax | Income tax benefit | Realized capital gains and losses, after-tax |


| December 31 | (Dollars in millions) | U.S. Dollar | Euros | Japanese Yen | British Pound | Australian Dollar | Canadian Dollar | Swiss Franc | Other | Total long-term debt |


| Three Months Ended | Dec. 31, 2017 | (Unaudited, in thousands) | Reconciliation of Net Income (Loss) to Adjusted EBITDA: | Net income (loss) | Stock-based compensation expense | Depreciation and amortization expense | Interest and other expense, net | Provision for income taxes | Restructuring charges and one-time nonrecurring gain | Adjusted EBITDA |


Credit Exposure The Companies are exposed to credit risk related to transactions entered into primarily for the various energy supply and hedging activities by the Utilities and the competitive energy businesses.
The Companies use credit policies to manage this risk, including an established credit approval process, monitoring of counterparty limits, netting provisions within agreements, collateral or prepayment arrangements, credit insurance and credit default swaps.
At December 31, 2012, Con Edison and CECONY had $113 million and $19 million of credit exposure in connection with energy supply and hedging activities, net of collateral, respectively.
Con Edisons net credit exposure consisted of $41 million with investment-grade counterparties, $41 million with commodity exchange brokers, $28 million with independent system operators and $3 million with noninvestment grade/non-rated counterparties.
CECONYs net credit exposure consisted of $1 million with investment-grade counterparties and $18 million with commodity exchange brokers.


11.
Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) are as follows (in millions):


| At December 31, 2004 At December 31, 2003 | Amortized  Cost | (In millions) | Due in one year or less | Due after one year through five years | Due after five years through ten years | Due after ten years | Total | Mortgage and asset backed securities | Total |


| Fiscal year DefinedBenefit Plans Post-RetirementBenefit Plans | In millions | 2020 | 2021 | 2022 | 2023 | 2024 | Next five fiscal years to October 31, 2029 |


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


| In millions December 31 2009 December 31 2008 | Commercial | Commercial real estate | Consumer | Residential real estate | Equipment lease financing | Total loans | In millions | Commercial and commercial real estate | Home equity lines of credit | Consumer credit card and other unsecured lines | Other | Total |


| 12/28/2013 1/3/2015 1/2/2016 12/31/2016 12/30/2017 12/29/2018 | Cadence Design Systems, Inc. | Nasdaq Composite | S&P 500 | S&P 500 Information Technology |


| Net Sales Orders -1 Fiscal Year Ended September 30, | Net Homes Sold | 2012 | East | Midwest | Southeast | South Central | Southwest | West | 21,048 | Sales Order Cancellations Fiscal Year Ended September 30, | Cancelled Sales Orders | 2012 | East | Midwest | Southeast | South Central | Southwest | West | 6,657 |


| December 31, Annual Maturities  (in millions) | 2011 | 2012 | 2013 | 2014 | 2015 | Thereafter | Total non-recourse debt | December 31, 2011 | Carrying Value | (In millions) | FirstEnergy-1 | FES | OE | CEI | TE | JCP&L | Met-Ed | Penelec |


| (in millions of U.S. dollars, except for percentages) 2010 2009 | Short-term debt | Long-term debt | Total debt | Trust preferred securities | Total shareholders’ equity | Total capitalization | Ratio of debt to total capitalization | Ratio of debt plus trust preferred securities to total capitalization |


Acquisition, integration, realignment and other expenses for 2009 were $75.3 million compared to $68.5 million in 2008.
During 2009, we initiated a workforce realignment, which included the elimination of positions in some areas and increases in others to support long-term growth.
As a result of this realignment and headcount reductions from acquisitions, we incurred approximately $19.0 million of severance and termination-related expenses.
Other items in acquisition, integration, realignment and other expenses in 2009 included approximately $9.4 million of expenses related to contract termination costs, $23.4 million of certain litigation matters that were recognized during the period and various costs incurred to integrate the Abbott Spine business acquired in the fourth quarter of 2008.
Included in acquisition, integration, realignment and other expenses in 2008 was $38.5 million of in-process research and development related to the Abbott Spine acquisition and other costs related to the integration of Abbott Spine.
See Note 2 to the consolidated financial statements for a more complete description of these charges.
We recognized a net curtailment and settlement gain of $32.1 million during 2009 related to amending our U. S.  and Puerto Rico postretirement benefit plans.
For more information regarding the net curtailment and settlement gain, see Note 12 to the consolidated financial statements.
Operating Profit, Income Taxes and Net Earnings Operating profit for 2009 decreased 7 percent to $1,018.8 million from $1,090.0 million in 2008.
The decrease in operating profit is due to higher operating expenses, most notably the goodwill impairment charge.
Interest and other expense for 2009 increased to $20.6 million compared to income of $31.8 million in 2008.
Interest and other income in 2008 included a realized gain of $38.8 million related to the sale of certain marketable securities.
Interest expense increased in the 2009 period as the result of increased long-term debt used to partially fund the Abbott Spine acquisition and the $1.0 billion senior notes offering during 2009.
The effective tax rate on earnings before income taxes increased to 28.1 percent for 2009, up from 24.3 percent in 2008.
The effective tax rate for 2009 is negatively impacted by the goodwill impairment charge of $73.0 million recorded during 2009 for which no tax benefit was recorded.
The effective tax rate for 2008 includes the impact of a current tax benefit of $31.7 million related to the 2007 settlement expense, resulting in a decrease of approximately 3 percent in the 2008 effective tax rate.
This impact on the 2008 effective tax rate was partially offset by Abbott Spine acquisitionrelated in-process research and development charges recorded during 2008 for which no tax benefit was recorded.
These discrete items account for the majority of the change in our effective tax rate year-over-year.
Net earnings decreased 15 percent to $717.4 million for 2009, compared to $848.6 million in 2008, as a result of decreased operating profit, increased interest expense and an increased effective tax rate.
Basic earnings per share in 2009 decreased 10 percent to $3.34 from $3.73 in 2008.
Diluted earnings per share decreased 11 percent to $3.32 from $3.72 in 2008.
The disproportional change in earnings per share as compared to net earnings is attributed to the effect of 2009 and 2008 share repurchases.


| Period Total Number ofShares Purchased Average PricePaid PerShare Total Number of SharesPurchased as Part ofPublicly AnnouncedProgram-1 Maximum Number ofShares That May Yet BePurchased Under theProgram-2 | October | November | December |


| Years Ended December 31, | 2011 | Revenue: | Rig Technology | Petroleum Services & Supplies | Distribution & Transmission | Eliminations | Total Revenue |


Average interest-earning assets increased 6% to $43.3 billion for the year ended December 31, 2016, compared to the same period in 2015.
The fluctuation in interest-earning assets is generally driven by changes in interest-bearing liabilities, primarily deposits and customer payables.
Average interest-bearing liabilities increased 6% to $41.3 billion for the year ended December 31, 2016, compared to the same period in 2015.
The increase was primarily due to increased deposits as a result of transferring customer cash held by third parties to our balance sheet, partially offset by the termination of our legacy wholesale funding obligations during 2015.
For additional information on our balance sheet growth and customer cash held by third parties, see Balance Sheet Overview.
Net interest margin increased 15 basis points to 2.65% for the year ended December 31, 2016, compared to the same period in 2015.
Net interest margin is driven by the mix of asset and liability average balances and the interest rates earned or paid on those balances.
The increase was primarily due to lower borrowing costs resulting from the termination of legacy wholesale funding obligations during 2015.
The increase was partially offset by lower rates earned on reinvesting funds in securities as our legacy loan portfolio continues to pay down.
Margin balances also decreased 16% for the year ended December 31, 2016, compared to the same period in 2015; however, the impact of the margin receivables decrease was partially offset by increased rates earned on margin due to the increase in market interest rates and changes in customer mix.


| Year Ended December 31, | 2007 | (In thousands) | Net cash provided by operating activities | Net cash (used in) provided by investing activities | Net cash (used in) provided by financing activities | Effect of exchange rate changes on cash | Net (decrease) increase for the period |


| In millions U.S. Plans 2012 Non- U.S. Plans U.S. Plans 2011 Non- U.S. Plans U.S. Plans 2010 Non- U.S. Plans | Service cost | Interest cost | Expected return on plan assets | Actuarial loss / (gain) | Amortization of prior service cost | Curtailment gain | Settlement gain | Net periodic pension expense |


Interest Expense—Interest expense was $498 in 2015 compared with $473 in 2014.
The increase of $25, or 5%, was primarily due to an 8% higher average debt level, somewhat offset by the absence of fees paid associated with the execution and termination of a 364-day senior unsecured bridge term loan facility related to the then-planned acquisition of Firth Rixson ($13—see Engineered Products and Solutions in Segment Information below).
The higher average debt level was mostly attributable to higher outstanding long-term debt due to the September 2014 issuance of $1,250 in 5.125% Notes, the proceeds of which were used to pay a portion of the purchase price of the Firth Rixson acquisition.
Interest expense was $473 in 2014 compared with $453 in 2013.
The increase of $20, or 4%, was principally caused by lower capitalized interest ($43), largely due to the progress completed at the aluminum complex in Saudi Arabia, and fees paid associated with the execution and termination of a 364-day senior unsecured bridge term loan facility related to the then-planned acquisition of Firth Rixson ($13—see Engineered Products and Solutions in Segment Information below).
These items were partially offset by a 3% lower average debt level and lower amortization of debt-related costs
Reconciliation of income (loss) from continuing operations, net of income tax, to operating earnings available to common shareholders Year Ended December 31, 2015


The Company’s purchased intangible assets other than goodwill are subject to amortization on a straight-line basis over an aggregate weighted-average period of 40 years.
Remaining unamortized intangible assets consist principally of amounts pertaining to nuclear-powered aircraft carrier and submarine intangibles whose useful lives have been estimated based on the long life cycle of the related programs.
Amortization expense for the years ended December 31, 2011, 2010 and 2009, was $20 million, $23 million and $30 million, respectively.


| Price Collar Contracts | Floor Price | Weighted | Floor | Volume | Period | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | 2008 Average |


| Years Ended December 31, | 2012 | (in millions) | Revenues | Management and financial advice fees | Distribution fees | Net investment income | Other revenues | Total revenues | Banking and deposit interest expense | Total net revenues | Expenses | Distribution expenses | Amortization of deferred acquisition costs | General and administrative expense | Total expenses | Operating earnings |


| October 29, 2011 October 30, 2010 | Fair value of forward exchange contracts asset | Fair value of forward exchange contracts after a 10% unfavorable movement in foreign currency exchange rates asset | Fair value of forward exchange contracts after a 10% favorable movement in foreign currency exchange rates liability |


| Year Ended September 30, | 2016 | (In millions, except per share data) | Operating Data: | Revenues: | Homebuilding | Financial Services | Inventory and land option charges | Gross profit — Homebuilding | Income before income taxes: | Homebuilding -1 | Financial Services and other -1 | Income tax expense (benefit) (2) | Net income | Net income per share: | Basic | Diluted | Cash dividends declared per common share |


| Year ended December 31, | 2016 | (in millions) | Revenues | Benefits and expenses | Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures | Income tax expense (benefit) | Income (loss) from continuing operations before equity in earnings of operating joint ventures | Equity in earnings of operating joint ventures, net of taxes | Income (loss) from continuing operations | Income (loss) from discontinued operations, net of taxes | Net income (loss) | Less: Income attributable to noncontrolling interests | Net income (loss) attributable to Prudential Financial, Inc. |


| Fair Value Impact | In Millions | Interest rate instruments | Foreign currency instruments | Commodity instruments | Equity instruments | December 31, 2015 | TotalFacility | Cash, cash equivalents and marketable securities | Committed credit agreement | Uncommitted credit arrangements | 2015 Impairment Test | Reporting Unit | A | B | C | D |


| Jurisdiction Years | United States | California | Louisiana | Mississippi | Virginia |


| As of | (in millions) | Derivative Assets: | Designated Hedging Instruments | Currency hedge contracts | Currency hedge contracts | 163 | Non-Designated Hedging Instruments | Currency hedge contracts | Total Derivative Assets | Derivative Liabilities: | Designated Hedging Instruments | Currency hedge contracts | Currency hedge contracts | 7 | Non-Designated Hedging Instruments | Currency hedge contracts | Total Derivative Liabilities |


Legal Matters In the normal course of business, we are involved in various legal proceedings, and subject to investigations, inspections, audits, inquiries and similar actions by governmental authorities.
The types of allegations that arise in connection with such legal proceedings vary in nature, but can include claims related to contract, employment, tax and intellectual property matters.
We evaluate all cases each reporting period and record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount, or potential range, of loss can be reasonably estimated.
In certain cases, we cannot reasonably estimate the potential loss because, for example, the litigation is in its early stages.
While any outcome related to litigation or such governmental proceedings in which we are involved cannot be predicted with certainty, management believes that the outcome of these matters, individually and in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows.
As previously disclosed, on April 10, 2015, a federal judge in Brazil authorized the search of the records of an agency’s offices in S?o Paulo and Brasilia, in connection with an ongoing investigation by Brazilian authorities involving payments potentially connected to local government contracts.
The Company had previously investigated the matter and taken a number of remedial and disciplinary actions.
The Company is in the process of concluding a settlement related to these matters with government agencies.
The Company confirmed that one of its standalone domestic agencies has been contacted by the Department of Justice Antitrust Division for documents regarding video production practices and is cooperating with the government.


FAIR VALUE MEASUREMENTS In addition to the following, see Note 7 Fair Value in the Notes To Consolidated Financial Statements in Item 8 of this Report for further information regarding fair value.
The following table summarizes the assets and liabilities measured at fair value on a recurring basis at December 31, 2015 and December 31, 2014, respectively, and the portions of such assets and liabilities that are classified within Level 3 of the valuation hierarchy.
Level 3 assets and liabilities are those where the fair value is estimated using significant unobservable inputs.
Table 20: Fair Value Measurements  Summary


Our Asset Management segment pretax operating earnings, which exclude net realized gains or losses and integration and restructuring charges, increased $158 million, or 28%, to $715 million for the year ended December 31, 2013 compared to $557 million for the prior year reflecting equity market appreciation, a $30 million gain on the sale of Threadneedle’s strategic business investment in Cofunds, a $19 million benefit from a CDO unwind, continued revenue enhancements related to various pricing adjustments and expense re-engineering, partially offset by the impact of net outflows.
Net Revenues Net revenues, which exclude net realized gains or losses, increased $278 million, or 10%, to $3.2 billion for the year ended December 31, 2013 compared to $2.9 billion for the prior year driven by increases in management and financial advice fees and net investment income.
Management and financial advice fees increased $223 million, or 9%, to $2.6 billion for the year ended December 31, 2013 compared to $2.4 billion for the prior year due to an increase in assets under management, as well as a shift to higher fee retail assets at Threadneedle, revenue enhancements related to various pricing adjustments and $17 million of performance based incentive fees on a CDO unwind.
Average assets under management increased 4% compared to the prior year driven by equity market appreciation, partially offset by net outflows.
See our discussion above on the changes in assets under management.
Net investment income, which excludes net realized gains or losses, increased $35 million to $54 million for the year ended December 31, 2013 compared to $19 million for the prior year due to a $30 million gain on the sale of Threadneedle’s strategic business investment in Cofunds, as well as a $10 million gain on a CDO unwind related to our residual interest in the CDO.
Expenses Total expenses, which exclude integration and restructuring charges, increased $120 million, or 5%, to $2.5 billion for the year ended December 31, 2013 compared to $2.3 billion for the prior year primarily due to an $86 million increase in distribution expenses driven by higher retail fund assets and a $33 million increase in general and administrative expense driven by higher performance-based compensation, including $8 million of higher compensation related to a CDO unwind, and investments in the business, partially offset by re-engineering benefits.


| December 31, | 2009 | Balance at beginning of period | Increases as a result of tax positions taken during a prior year | Decreases as a result of tax positions taken during a prior year | Settlements with taxing authorities | Lapse of statutes of limitation | Increases as a result of tax positions taken during the current year | Balance at end of period | Years ended December 31, | 2009 | Reported in comprehensive income | Unrealized gains | Unrealized losses | Reported in other income, net | Realized gains | Realized losses | Domestic Pension Plans | Years ended December 31, | Service cost | Interest cost | Expected return on plan assets | Curtailment gains | Settlement losses (gains) | Amortization of: | Transition obligation | Prior service cost (credit) | Unrecognized actuarial losses | Net periodic cost |


| 2014 2013* 2012* | Purchases | Excess cash flow and borrowings | Option proceeds | Total |


Items selected for fair-value accounting in accordance with SFAS 155 and SFAS 156 Certain hybrid financial instruments The Company has elected to apply fair-value accounting under SFAS 155 for certain hybrid financial assets and liabilities whose performance is linked to risks other than interest rate, foreign exchange or inflation (e. g. , equity, credit or commodity risks).
In addition, the Company has elected fair-value accounting under SFAS 155 for residual interests retained from securitizing certain financial assets.
The Company has elected fair-value accounting for these instruments because these exposures are considered to be trading-related positions and, therefore, are managed on a fair-value basis.
In addition, the accounting for these instruments is simplified under a fair-value approach as it eliminates the complicated operational requirements of bifurcating the embedded derivatives from the host contracts and accounting for each separately.
The hybrid financial instruments are classified as Trading account assets, Loans, Deposits, Trading account liabilities (for prepaid derivatives), Short-term borrowings or Long-Term Debt on the Companys Consolidated Balance Sheet according to their legal form, while residual interests in certain securitizations are classified as Trading account assets.
For hybrid financial instruments for which fair-value accounting has been elected under SFAS 155 and that are classified as Long-term debt, the aggregate unpaid principal exceeds the aggregate fair value by $1.9 billion as of December 31, 2008, while the aggregate fair value exceeds the aggregate unpaid principal balance by $460 million as of December 31, 2007.
The difference for those instruments classified as Loans is immaterial.
Changes in fair value for hybrid financial instruments, which in most cases includes a component for accrued interest, are recorded in Principal transactions in the Companys Consolidated Statement of Income.
Interest accruals for certain hybrid instruments classified as trading assets are recorded separately from the change in fair value as Interest revenue in the Companys Consolidated Statement of Income.


| 2010 2009 | Gross   Book Value | Technology/Technical Know-How | Tradenames | Customer Relationships | Other | $5,865 |


| Net Investment Gains (Losses) Net Investment Income -1 Policyholder Benefits and Claims -2 Other Revenues -3 Other Expenses -4 | (In millions) | For the Year Ended December 31, 2009: | Interest rate swaps | Interest rate floors | Interest rate caps | Interest rate futures | Equity futures | Foreign currency swaps | Foreign currency forwards | Currency options | Equity options | Interest rate options | Interest rate forwards | Variance swaps | Swap spreadlocks | Credit default swaps | Total rate of return swaps | Total | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | 2017 vs. 2016 Increase (decrease)due to change in: | In millions of dollars | Deposits with banks-4 | Federal funds sold and securities borrowed orpurchased under agreements to resell | In U.S. offices | In offices outside the U.S.-4 | Total | Trading account assets-5 | In U.S. offices | In offices outside the U.S.-4 | Total | Investments-1 | In U.S. offices | In offices outside the U.S.-4 | Total | Loans (net of unearned income)(6) | In U.S. offices | In offices outside the U.S.-4 | Total | Other interest-earning assets-7 | Total interest revenue |


Liquidity and Capital Resources At September 30, 2006 we had approximately $115.7 million of working capital.
At that date our cash and cash equivalents totaled $29.9 million.
Our cash and cash equivalents balance decreased $84.1 million during fiscal 2006 primarily due to the use of $27.6 million in cash for the acquisition of the mammography intellectual property of Fischer Imaging, cash for the acquisition of AEG and related fees and expenses of $21.9 million net of cash acquired, cash for the acquisition of R2 and related fees and expenses of $13.4 million net of cash acquired, cash to acquire Suros and related fees and expenses of $136.5 million net of cash acquired and for the purchase of property and equipment of $13 million.
These uses of cash were partially offset by cash provided by financing and operating activities and the sale of intellectual property for $6.5 million.
Our operating activities provided us with $31.1 million of cash, which included net income of $27.4 million for fiscal 2006 increased by non-cash charges for depreciation and amortization of an aggregate $16.1 million, and the acquired in-process research and development charge of $19.9 million related to the Fischer, AEG, R2 and Suros acquisitions, which were partially offset by the $27.9 million tax benefit related to the exercise of non-qualified stock options.
Cash used by operations due to changes in our current assets and liabilities included an increase in inventory of $23.0 million and accounts receivable of $9.5 million.
These uses of cash were partially offset by an increase in accrued expenses of $14.5 million, an increase in deferred revenue of $10.5 million, and an increase in accounts payable of $3.9 million.
The increase in inventory was to support the increased sales volume, especially for digital mammography and in support of our domestic distribution of a new line of a third party extremity MRI system as well as an increase in amounts related to our newly acquired businesses.
The increase in accounts receivable was primarily due to the increased revenues during fiscal 2006.
The increase in deferred revenue was primarily due to an increase in the number of deferred service contracts for our core business as well as an increase in amounts related to our newly acquired businesses.
The increase in accrued expenses and accounts payable was due to increased expenditures to support our growing inventory and expenses as well as increase in amounts related to our newly acquired businesses.


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


| December 31, 2010  Debt Service Coverage Ratio | Greater than 2.0x | Loan-to-Value Ratio | 0%—49.99% | 50%—59.99% | 60%—69.99% | 70%—79.99% | 80%—89.99% | 90%—100% | Greater than 100% | Total commercial and agricultural mortgage loans | December 31, 2010  Debt Service Coverage Ratio | Greater than 2.0x | Loan-to-Value Ratio | 0%—49.99% | 50%—59.99% | 60%—69.99% | 70%—79.99% | 80%—89.99% | 90%—100% | Greater than 100% | Total commercial and agricultural mortgage loans |


| $ in millions Specific Portfolio PCI Total | As of December 2018 | Loans Receivable | Corporate loans | PWM loans | Commercial real estate loans | Residential real estate loans | Consumer loans | Other loans | Total | Lending Commitments | Corporate | Other | Total | As of December 2017 | Loans Receivable | Corporate loans | PWM loans | Commercial real estate loans | Residential real estate loans | Consumer loans | Other loans | Total | Lending Commitments | Corporate | Other | Total |


Inventory quantities are tracked through a perpetual inventory system.
The Company completes physical inventories and other targeted inventory counts in its store locations to ensure the accuracy of the perpetual inventory quantities of merchandise and core inventory.
In its distribution centers and branches, the Company uses a cycle counting program to ensure the accuracy of the perpetual inventory quantities of merchandise and product core inventory.
Reserves for estimated shrink are established based on the results of physical inventories conducted by the Company and other targeted inventory counts in its stores, results from recent cycle counts in its distribution facilities and historical and current loss trends.
The Company also establishes reserves for potentially excess and obsolete inventories based on (i) current inventory levels, (ii) the historical analysis of product sales and (iii) current market conditions.
The Company has return rights with many of its vendors and the majority of excess inventory is returned to its vendors for full credit.
In certain situations, the Company establishes reserves when less than full credit is expected from a vendor or when liquidating product will result in retail prices below recorded costs.


| 2012 2011 | Indefinite-life intangible asset—Pullmantur trademarks and trade names | Impairment charge | Foreign currency translation adjustment | Total |


In order to capitalize on the growth opportunities in our domestic and international markets highlighted above, we continue to make investments in and across our businesses.
We are investing in expanding our distribution capabilities through a focus on customer experience and technology enabled advice and distribution, cross-business collaboration, further development of work site relationships with individuals and expanding our ability to offer relevant products and services to customers through whichever channels they choose.
We are also investing in product innovation, through the use of data and digital initiatives to better understand and serve the needs of a customer base with changing demographics, to achieve a goal of offering a broader array of cost effective and easily comprehensible products.
In addition, we are making investments in our information technology infrastructure in order to streamline processes and enhance the effectiveness of our administrative systems.
While we expect these strategic investments to ultimately generate business growth, they will result in elevated expenses in the nearterm.
In addition, we expect the time periods required for these investments to generate returns to vary.
These investments are being funded through a combination of operating cost efficiencies and the returns generated by our businesses, and we expect to be able to continue to absorb some of these investment costs through efficiency gains.


| Pre-Tax Earnings Impact | (in millions) | Instruments sensitive to: | Foreign currency rates | Fair Value Impact | (in millions) | Instruments sensitive to: | Interest rates | Pre-Tax Earnings Impact | (in millions) | Instruments sensitive to: | Foreign currency rates | Fair Value Impact | (in millions) | Instruments sensitive to: | Interest rates |


| Years Ended December 31, 2012/2011 2011/2010 | (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.) |


| Short-term debt Senior long-term debt | Moody’s | JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A. | Chase Bank USA, N.A. |


| Percent Change | (millions) | Reported GAAP operating income | Special (gains) and charges | Non-GAAP adjusted operating income | Effect of foreign currency translation | Non-GAAP adjusted fixed currency operating income | (percent) | Reported GAAP operating income margin | Non-GAAP adjusted operating income margin | Non-GAAP adjusted fixed currency | operating income margin |


| (Amounts in millions) 2007 2006 | Cash and cash equivalents | Accounts receivable – net of allowances | Inventories | Other current assets | Total current assets | Accounts payable | Notes payable and current maturities of long-term debt | Other current liabilities | Total current liabilities | Total working capital |


| Year Ended December 31, | 2010 | (In $ millions) | Income tax provision computed at US federal statutory tax rate | Change in valuation allowance | Equity income and dividends | (Income) expense not resulting in tax impact | US tax effect of foreign earnings and dividends | Other foreign tax rate differentials-1 | Legislative changes | Tax-deductible interest on foreign equity investments and other related items | State income taxes and other | Income tax provision (benefit) |


Other Commodity Risk We are impacted by basis risk, caused by factors that affect the relationship between commodity futures prices reflected in derivative commodity instruments and the cash market price of the underlying commodity.
Natural gas transaction prices are frequently based on industry reference prices that may vary from prices experienced in local markets.
For example, New York Mercantile Exchange (NYMEX) contracts for natural gas are priced at Louisianas Henry Hub, while the underlying quantities of natural gas may be produced and sold in the western United States at prices that do not move in strict correlation with NYMEX prices.
If commodity price changes in one region are not reflected in other regions, derivative commodity instruments may no longer provide the expected hedge, resulting in increased exposure to basis risk.
These regional price differences could yield favorable or unfavorable results.
OTC transactions are being used to manage exposure to a portion of basis risk.
We are impacted by liquidity risk, caused by timing delays in liquidating contract positions due to a potential inability to identify a counterparty willing to accept an offsetting position.
Due to the large number of active participants, liquidity risk exposure is relatively low for exchange-traded transactions.


| For the Year 2010 | Life | Distribution Channel | United American Independent | Liberty National Exclusive | American Income Exclusive | Direct Response | Medicare Part D | Other | $1,663,699 | For the Year 2009 | Life | Distribution Channel | United American Independent | Liberty National Exclusive | American Income Exclusive | Direct Response | Medicare Part D | Other | $1,591,853 | For the Year 2008 | Life | Distribution Channel | United American Independent | Liberty National Exclusive | American Income Exclusive | Direct Response | Medicare Part D | Other | $1,544,219 |


CF INDUSTRIES HOLDINGS, INC.  116 15.
Derivative Financial Instruments We use derivative financial instruments to reduce our exposure to changes in commodity prices and foreign currency exchange rates.
Commodity Price Risk Management Natural gas is the largest and most volatile component of the manufacturing cost for nitrogen-based products.
We manage the risk of changes in natural gas prices primarily through the use of derivative financial instruments.
The derivatives that we use for this purpose are primarily natural gas fixed price swaps and natural gas options traded in the OTC markets.
These natural gas derivatives settle using primarily a NYMEX futures price index, which represents the basis for fair value at any given time.
We enter into natural gas derivative contracts with respect to natural gas to be consumed by us in the future, and settlements of those derivative contracts are scheduled to coincide with our anticipated purchases of natural gas used to manufacture nitrogen products during those future periods.
We use natural gas derivatives as an economic hedge of natural gas price risk, but without the application of hedge accounting.
As a result, changes in fair value of these contracts are recognized in earnings.
As of December 31, 2016, we have natural gas derivative contracts covering periods through the end of 2018.
As of December 31, 2016 and 2015, we had open natural gas derivative contracts for 183.0 million MMBtus and 431.5 million MMBtus, respectively.
For the year ended December 31, 2016, we used derivatives to cover approximately 84% of our natural gas consumption.
Foreign Currency Exchange Rates A portion of the costs for our capacity expansion projects at our Donaldsonville, Louisiana complex and Port Neal, Iowa complex were euro-denominated.
In order to manage our exposure to changes in the euro to U. S.  dollar currency exchange rates, we hedged our projected euro-denominated payments through the end of 2016 using foreign currency forward contracts.
As of December 31, 2015, the notional amount of our open foreign currency derivatives was €89 million.
None of these open foreign currency derivatives were designated as hedging instruments for accounting purposes.
All of these foreign currency derivatives settled in 2016.
As of December 31, 2016, accumulated other comprehensive loss (AOCL) includes $7 million of pre-tax gains related to the foreign currency derivatives that were originally designated as cash flow hedges.
The hedges were de-designated as of December 31, 2013.
The remaining balance in AOCL is being reclassified into income over the depreciable lives of the property, plant and equipment associated with the capacity expansion projects.
The amounts reclassified into income from AOCL during the years ended December 31, 2016, 2015 and 2014 were zero, zero and $3 million, respectively, and are included in other operating¡ªnet in our consolidated statements of operations.
We expect that the amounts to be reclassified within the next twelve months will be insignificant.
During the years ended December 31, 2016, 2015, and 2014, none of our derivatives were designated as hedges and no gain or loss was recognized in income or AOCL related to derivatives designated as cash flow hedges except for the amounts recognized in income, which were reclassified from AOCL, as discussed above.
The effect of derivatives in our consolidated statements of operations is shown in the table below:


| December 31, 2009 December 31, 2008 | (in millions) | Cross-currency coupon swap agreements | Foreign exchange component of interest on dual currency investments | Total |


| 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 | United Parcel Service, Inc. | Standard & Poor’s 500 Index | Dow Jones Transportation Average |


| 2014 2013 2012 | European Union | Eastern Europe, Middle East & Africa | Asia | Latin America & Canada | 100.0% | Asset Derivatives | FairValue | (in millions) | Foreign exchange contracts designated as hedging instruments | Other assets | Foreign exchange contracts not designated as hedging instruments | Other assets | Total derivatives |


We have entered into certain acquisitions that contain both redeemable noncontrolling interests and call options with similar terms and conditions.
In such instances, we have included the related estimated contingent acquisition obligation in the period when the earliest related option is exercisable.
We have certain redeemable noncontrolling interests that are exercisable at the discretion of the noncontrolling equity owners as of December 31, 2009.
As such, these estimated acquisition payments of $20.5 have been included within the total payments expected to be made in 2010 in the table and, if not made in 2010, will continue to carry forward into 2011 or beyond until they are exercised or expire.
Redeemable noncontrolling interests are included in the table at current exercise price payable in cash, not at applicable redemption value in accordance with the authoritative guidance for classification and measurement of redeemable securities.
Legal Matters We are involved in legal and administrative proceedings of various types.
While any litigation contains an element of uncertainty, we do not believe that the outcome of such proceedings will have a material adverse effect on our financial condition, results of operations or cash flows.
Note 16: Recent Accounting Standards In December 2009, the Financial Accounting Standards Board (FASB) amended authoritative guidance related to accounting for transfers and servicing of financial assets and extinguishments of liabilities.
The guidance will be effective for the Company beginning January 1, 2010.
The guidance eliminates the concept of a qualifying special-purpose entity and changes the criteria for derecognizing financial assets.
In addition, the guidance will require additional disclosures related to a companys continued involvement with financial assets that have been transferred.
We do not expect the adoption of this amended guidance to have a significant impact on our Consolidated Financial Statements.
In December 2009, the FASB amended authoritative guidance for consolidating variable interest entities.
The guidance will be effective for the Company beginning January 1, 2010.
Specifically, the guidance revises factors that should be considered by a reporting entity when determining whether an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated.
This guidance also includes revised financial statement disclosures regarding the reporting entitys involvement, including significant risk exposures as a result of that involvement, and the impact the relationship has on the reporting entitys financial statements.
We are currently evaluating the potential impact of the amended guidance on our Consolidated Financial Statements.
PART III Item 10.
Directors, Executive Officers and Corporate Governance The information required by this Item is incorporated by reference to the Election of Directors section, the Director Selection Process section, the Code of Conduct section, the Principal Committees of the Board of Directors section, the Audit Committee section and the Section 16(a) Beneficial Ownership Reporting Compliance section of the Proxy Statement for the Annual Meeting of Stockholders to be held on May 27, 2010 (the Proxy Statement), except for the description of our Executive Officers, which appears in Part I of this Report on Form 10-K under the heading Executive Officers of IPG.
 New York Stock Exchange Certification In 2009, our CEO provided the Annual CEO Certification to the New York Stock Exchange, as required under Section 303A.12(a) of the New York Stock Exchange Listed Company Manual.
Item 11.
Executive Compensation The information required by this Item is incorporated by reference to the Compensation of Executive Officers section, the Non-Management Director Compensation section, the Compensation Discussion and Analysis section and the Compensation Committee Report section of the Proxy Statement.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated by reference to the Outstanding Shares section of the Proxy Statement, except for information regarding the shares of common stock to be issued or which may be issued under our equity compensation plans as of December 31, 2009, which is provided in the following table.


| Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value | Number of shares under option: | Outstanding at beginning of year | Granted | Exercised | Forfeited | Expired | Outstanding at end of year | Exercisable at end of year |


Derivative Commitments Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings of the individual legal entity that entered into the derivative agreement as set by nationally recognized statistical rating agencies.
If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and in certain instances demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement.
The settlement amount is determined by netting the derivative positions transacted under each agreement.
If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity.
The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of December 31, 2011, is $725.
Of this $725 the legal entities have posted collateral of $716 in the normal course of business.
Based on derivative market values as of December 31, 2011, a downgrade of one level below the current financial strength ratings by either Moody’s or S&P could require approximately an additional $37 to be posted as collateral.
Based on derivative market values as of December 31, 2011, a downgrade by either Moody’s or S&P of two levels below the legal entities’ current financial strength ratings could require approximately an additional $48 of assets to be posted as collateral.
These collateral amounts could change as derivative market values change, as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated.
The nature of the collateral that we would post, if required, would be primarily in the form of U. S.  Treasury bills and U. S.  Treasury notes.
The aggregate notional amount of derivative relationships that could be subject to immediate termination in the event of rating agency downgrades to either BBB+ or Baa1 as of December 31, 2011 was $14.5 billion with a corresponding fair value of $418.
The notional and fair value amounts include a customized GMWB derivative with a notional amount of $4.2 billion and a fair value of $207, for which the Company has a contractual right to make a collateral payment in the amount of approximately $45 to prevent its termination.
This customized GMWB derivative contains an early termination trigger such that if the unsecured, unsubordinated debt of the counterparty’s related party guarantor is downgraded two levels or more below the current ratings by Moody’s and one or more levels by S&P, the counterparty could terminate all transactions under the applicable International Swaps and Derivatives Association Master Agreement.
As of December 31, 2011, the gross fair value of the affected derivative contracts is $223, which would approximate the settlement value.


Adjusted EBITDA increased $2.8 billion, or 36%, in 2016 primarily from: ?
Increased branded postpaid and prepaid service revenues primarily due to strong customer response to our Un-carrier initiatives and the ongoing success of our promotional activities; ?
Higher gains on disposal of spectrum licenses of $672 million; gains on disposal were $835 million in 2016 compared to $163 million in 2015; ?
Lower losses on equipment; and ?
Focused cost control and synergies realized from the MetroPCS business combination, primarily in cost of services; partially offset by ?
Higher selling, general and administrative.


| ($ millions) 2016 N/A Change vs. 2015 -2% 2015 N/A Change vs. 2014 -1% | Net sales | Net earnings | % of net sales |


Overview Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L. P. , a Delaware limited partnership (the “Operating Partnership”).
Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders is dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors.
Vornado is the sole general partner of, and owned approximately 94.0% of the common limited partnership interest in the Operating Partnership at December 31, 2012.
All references to “we,” “us,” “our,” the “Company” and “Vornado” refer to Vornado Realty Trust and its consolidated subsidiaries, including the Operating Partnership.
We own and operate office and retail properties (our “core” operations) with large concentrations in the New York City metropolitan area and in the Washington, DC / Northern Virginia area.
In addition, we have a 32.6% interest in Toys “R” Us, Inc.  (“Toys”) which has a significant real estate component, a 32.4% interest in Alexander’s, Inc.  (NYSE: ALX) (“Alexander’s”), which has six properties in the greater New York metropolitan area, as well as interests in other real estate and related investments.
Our business objective is to maximize shareholder value, which we measure by the total return provided to our shareholders.
Below is a table comparing our performance to the Morgan Stanley REIT Index (“RMS”) and the SNL REIT Index (“SNL”) for the following periods ended December 31, 2012:


| December 31 | (Dollars in billions) | Unpaid principal balance | Residential mortgage loans-2 | Total | 60 days or more past due | Number of loans serviced (in thousands) | Residential mortgage loans-2 | Total | 60 days or more past due | December 31 | (Dollars in billions) | Unpaid principal balance | Residential mortgage loans-2 | Total | 60 days or more past due | Number of loans serviced (in thousands) | Residential mortgage loans-2 | Total | 60 days or more past due |


| In millions 2014 2013 2012 | Revenue (loss) (a) | Expense (a) | Cash receipts (b) | Cash payments (c) |


| Year ended December 31, | 2006 | (in millions) | Operating results: | Revenues | Benefits and expenses | Adjusted operating income | Realized investment gains (losses), net, and related adjustments(1) | Related charges-2 | Income from continuing operations before income taxes, equity in earnings of operating joint ventures, extraordinary gain on acquisition andcumulative effect of accounting change |


| 2014 2013 2012 | Outstanding at beginning of year | Granted | Forfeited | Cancelled | Vested | Outstanding at end of year | Weighted average grant-date fair value: | Granted | Forfeited | Cancelled | Vested | Outstanding at end of year |


| In thousands Nonvested Cash-Payable Restricted Unit Shares Aggregate Intrinsic Value | Outstanding at December 31, 2008 | Granted | Vested and released | Forfeited | Outstanding at December 31, 2009 |


| Net Sales -1(2)(3)(4)(5) Operating (Loss) Profit(5)(6) Assets at December 31 -11(12) | 2010 | The Company’s operations by segment were: | Cabinets and Related Products | Plumbing Products | Installation and Other Services | Decorative Architectural Products | Other Specialty Products | Total | The Company’s operations by geographic area were: | North America | International, principally Europe | Total, as above | General corporate expense, net -7 | Charge for defined-benefit curtailment -8 | Charge for litigation settlements -9 | Accelerated stock compensation expense -10 | Loss on corporate fixed assets, net | Operating (loss) profit, as reported | Other income (expense), net | Loss from continuing operations before income taxes | Corporate assets | Total assets |


| Year ended December 31 Change | Dollars in millions | Noninterest income | Asset management | Consumer services | Corporate services | Residential mortgage | Service charges on deposits | Net gains on sales of securities | Net other-than-temporary impairments | Other | Total noninterest income |


| December 31, | (in days) | Days of sales outstanding (DSO)(1) | Days of supply in inventory (DIO)(2) | Days of purchases outstanding (DPO)(3) | Cash conversion cycle |


The Combat Systems group is also focused on innovative technologies and is well-positioned to participate in future development programs.
For the U. S.  Marine Corps, the group continues the design and testing of the Expeditionary Fighting Vehicle (EFV), an expeditionary combat platform designed to replace the services current craft.
With the EFV, the Marine Corps can launch forces from ships located beyond the horizon and proceed directly to inland objectives.
The EFV offers sea maneuverability at speeds three times the current platforms capability and ground mobility equaling that of the Abrams tank, providing a level of flexibility and tactical surprise unparalleled in the current force structure.
We are building seven new prototypes as part of a system design and development contract, which we expect to deliver in 2010.
The group is also a member of one of three teams awarded technology demonstration contracts for the Joint Light Tactical Vehicle (JLTV), which is intended to replace a portion of the Armys fleet of High Mobility Multi-purpose Wheeled Vehicles (HMMWV).
The Combat Systems team was the first to complete its critical design review for the JLTV in 2009.
In addition, we are well-positioned to compete for work on the Armys next-generation Ground Combat Vehicle program, for which the customer expects to award development contracts late in 2010.
Combat Systems has a significant presence internationally and is a recognized military-vehicle integrator and leading defense-materiel provider worldwide.
It has manufacturing facilities in Australia, Austria, Brazil, Canada, France, Germany, Spain and Switzerland, and has customers in more than 30 countries.
The groups European business offers a broad range of products, including light- and medium-weight tracked and wheeled tactical vehicles, amphibious bridge systems, artillery systems, light weapons, ammunition and propellants.
Like the groups U. S.  products, many of these systems constitute key platforms employed by its customers military forces.
These include the Leopard 2E tank and the Pizarro tracked infantry vehicle, produced for the Spanish army; the Pandur II armored combat vehicle, produced for the Portuguese army and navy; the Eagle wheeled vehicle for Germany; and the Piranha wheeled armored vehicle, which the group has sold to several European countries.
Combat Systems also is experiencing increased international demand beyond Europe as a result of the demonstrated success of its fielded products.
In particular, the group has contracts to provide Abrams tanks and light armored vehicles to a number of U. S.  allies in the Middle East.
The group is also a global manufacturer and supplier of highly engineered axles, suspensions, brakes and aftermarket parts for heavy-payload vehicles for a variety of military and commercial customers.
The Combat Systems group continues to focus on operational execution across the business as it delivers on its substantial backlog.
In an environment of continuously expanding threats and evolving customer needs, including an increased emphasis on speed to market, the group remains focused on its customers requirements and the opportunities they present.
Revenues for the Combat Systems group were 30 percent of our consolidated revenues in 2009, 28 percent in 2008 and 29 percent in 2007.
Revenues by major products and services were as follows:


| Total Revenue -1 Net Income (Loss) | (Dollars in millions) | Deposits | Global Card Services-2 | Home Loans & Insurance | Global Commercial Banking | Global Banking & Markets | Global Wealth & Investment Management | All Other-2 | Total FTE basis | FTE adjustment | Total Consolidated |


| 2009 2008 | Commodity Derivatives, Net | (Thousands of Dollars) | Balance at Jan. 1 | Purchases, issuances, and settlements, net | Transfers into (out of) Level 3 | (Losses) gains recognized in earnings | Gains (losses) recognized as regulatory assets and liabilities | Balance at Dec. 31 |


| Entity Company Action Level RBC TotalAdjusted Capital % of Company Action Level RBC | (in millions, except percentages) | RiverSource Life | RiverSource Life of NY | IDS Property Casualty | Ameriprise Insurance Company |


| (dollar amounts in millions) At December 31, 2017 | One Yearor Less | Deposits without a stated maturity | Certificates of deposit and other time deposits | Short-term borrowings | Long-term debt | Operating lease obligations | Purchase commitments |


The Company determined the expected life of stock options using historical data adjusted for known factors that would alter historical exercise behavior.
The risk-free interest rate is based on the U. S.  treasury yield curve in effect as of the grant date.
Expected volatility is determined using weighted-average implied market volatility combined with historical volatility.
The Company believes that a blend of historical volatility and implied volatility better reflects future market conditions and better indicates expected volatility than purely historical volatility.
Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis is based primarily on the consolidated financial statements of Welltower Inc.  for the periods presented and should be read together with the notes thereto contained in this Annual Report on Form 10-K.  Other important factors are identified in Item 1  Business and Item 1A  Risk Factors above.
Executive Summary Company Overview Welltower Inc.  (NYSE: HCN), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure.
The Company invests with leading seniors housing operators, postacute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve peoples wellness and overall health care experience.
WelltowerTM, a real estate investment trust (REIT), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.
Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets.
The following table summarizes our consolidated portfolio for the year ended December 31, 2016 (dollars in thousands):


| ALICO’s Operations Included in MetLife’s Results for the Year Ended December 31, 2010 (In millions) | Total revenues | Income (loss) from continuing operations, net of income tax |


| Return Periods (in years) 1 in 20 1 in 50 1 in 100 1 in 250 1 in 500 1 in 1,000 | Exceeding Probability | (Dollars in millions) | Zone/ Peril | Southeast U.S., Wind | California, Earthquake | Texas, Wind |


Managements discussion and analysis 126 JPMorgan Chase & Co. /2014 Annual Report While useful as a current view of credit exposure, the net fair value of the derivative receivables does not capture the potential future variability of that credit exposure.
To capture the potential future variability of credit exposure, the Firm calculates, on a client-by-client basis, three measures of potential derivatives-related credit loss: Peak, Derivative Risk Equivalent (DRE), and Average exposure (AVG).
These measures all incorporate netting and collateral benefits, where applicable.
Peak exposure to a counterparty is an extreme measure of exposure calculated at a 97.5% confidence level.
DRE exposure is a measure that expresses the risk of derivative exposure on a basis intended to be equivalent to the risk of loan exposures.
The measurement is done by equating the unexpected loss in a derivative counterparty exposure (which takes into consideration both the loss volatility and the credit rating of the counterparty) with the unexpected loss in a loan exposure (which takes into consideration only the credit rating of the counterparty).
DRE is a less extreme measure of potential credit loss than Peak and is the primary measure used by the Firm for credit approval of derivative transactions.
Finally, AVG is a measure of the expected fair value of the Firms derivative receivables at future time periods, including the benefit of collateral.
AVG exposure over the total life of the derivative contract is used as the primary metric for pricing purposes and is used to calculate credit capital and the CVA, as further described below.
The three year AVG exposure was $37.5 billion and $35.4 billion at December 31, 2014 and 2013, respectively, compared with derivative receivables, net of all collateral, of $59.4 billion and $51.3 billion at December 31, 2014 and 2013, respectively.
The fair value of the Firms derivative receivables incorporates an adjustment, the CVA, to reflect the credit quality of counterparties.
The CVA is based on the Firms AVG to a counterparty and the counterpartys credit spread in the credit derivatives market.
The primary components of changes in CVA are credit spreads, new deal activity or unwinds, and changes in the underlying market environment.
The Firm believes that active risk management is essential to controlling the dynamic credit risk in the derivatives portfolio.
In addition, the Firms risk management process takes into consideration the potential impact of wrong-way risk, which is broadly defined as the potential for increased correlation between the Firms exposure to a counterparty (AVG) and the counterpartys credit quality.
Many factors may influence the nature and magnitude of these correlations over time.
To the extent that these correlations are identified, the Firm may adjust the CVA associated with that counterpartys AVG.
The Firm risk manages exposure to changes in CVA by entering into credit derivative transactions, as well as interest rate, foreign exchange, equity and commodity derivative transactions.
The accompanying graph shows exposure profiles to the Firms current derivatives portfolio over the next 10 years as calculated by the DRE and AVG metrics.
The two measures generally show that exposure will decline after the first year, if no new trades are added to the portfolio.


| Owned Leased | United States | Canada | EMEA | Rest of World |


| Yearended December 31, | (Dollar amounts in millions) | Balance at January 1 | Additions for tax positions of prior years | Reductions for tax positions of prior years | Additions based on tax positions related to current year | Lapse of statute of limitations | Settlements | Foreign exchange translation | Positions assumed in BGI Transaction | Balance at December 31 |


| Years Ended December 31, Percentage Change | Rate for 1 USD | Currency: | JPY | EUR | GBP |


Five-year Stock Performance Graph The graph below illustrates the cumulative total shareholder return on Snap-on common stock since December 31, 2013, of a $100 investment, assuming that dividends were reinvested quarterly.
The graph compares Snap-ons performance to that of the Standard & Poors 500 Industrials Index (S&P 500 Industrials) and Standard & Poors 500 Stock Index (S&P 500).


| 2015 2014 2013 | Year ended December 31,(in millions, except rates)(a) | Principal securitized | All cash flows during the period: | Proceeds from new securitizations(b) | Servicing fees collected | Purchases of previously transferred financial assets (or the underlying collateral)(c) | Cash flows received on interests |


| 30 September 2019 2018 | Short-term borrowings | Current portion of long-term debt(A)(B) | Long-term debt | Long-term debt – related party(B) | Total Debt |


2012 Plans In 2012, we recorded an expense of $327.4 ($222.4 after-tax, or $1.03 per share) for business restructuring and cost reduction plans in our Polyurethane Intermediates (PUI), Electronics, and European Merchant businesses.
During the second quarter of 2012, we recorded an expense of $86.8 ($60.6 after-tax, or $.28 per share) for actions to remove stranded costs resulting from our decision to exit the Homecare business, the reorganization of the Merchant business, and actions to right-size our European cost structure in light of the challenging economic outlook.
The charge related to the businesses at the segment level as follows: $77.3 in Merchant Gases, $3.8 in Tonnage Gases, and $5.7 in Electronics and Performance Materials.
As of 30 September 2013, the planned actions were completed.
During the fourth quarter of 2012, we took actions to exit the PUI business to improve costs, resulting in a net expense of $54.6 ($34.8 after-tax, or $.16 per share).
We sold certain assets and the rights to a supply contract for $32.7 in cash at closing.
In connection with these actions, we recognized an expense of $26.6, for the net book value of assets sold and those committed to be disposed of other than by sale.
The remaining charge was primarily related to contract terminations and an environmental liability.
Our PUI production facility in Pasadena, Texas is currently being dismantled, with completion expected in fiscal year 2014.
The costs to dismantle are expensed as incurred and reflected in continuing operations in the Tonnage Gases business segment.
During the fourth quarter of 2012, we completed an assessment of our position in the PV market, resulting in $186.0 of expense ($127.0 after-tax, or $.59 per share) primarily related to the Electronics and Performance Materials segment.
Air Products supplies the PV market with both bulk and on-site supply of gases, including silane.
The PV market has not developed as expected, and as a result, the market capacity to produce silane is expected to exceed demand for the foreseeable future.
Included in the charge was an accrual of $93.5 for an offer that we made to terminate a long-term take-or-pay contract to purchase silane.
A final settlement was reached with the supplier in the fourth quarter of 2013.


| Year Ended October 31, $ Change % Change $ Change % Change | 2006 | (dollars in millions) | $112.9 | Percentage of total revenue |


| Year Ended December 31, | 2009 | (millions) | Balance, Beginning of period | Changes | Allowance for SemCrude receivable | Allowance for Ecuador receivable | Recovery of Ecuador receivable | Other Changes | Net Changes Before Write-offs | Write-off of SemCrude receivable | Other Write-offs | Balance, End of Period |


| December 31 | Commercial Utilized-1, 2 | (Dollars in millions) | Loans and leases | Derivative assets-5 | Standby letters of credit and financial guarantees | Assets held-for-sale-6 | Bankers’ acceptances | Commercial letters of credit | Foreclosed properties and other | Total commercial credit exposure |


| As of and for the Year Ended December 31, 2016 | (in millions) | Net interest income | Noninterest income | Total revenue | Noninterest expense | Profit before provision for credit losses | Provision for credit losses | Income before income tax expense (benefit) | Income tax expense (benefit) | Net income | Total average assets | As of and for the Year Ended December 31, 2015 | (in millions) | Net interest income | Noninterest income | Total revenue | Noninterest expense | Profit before provision for credit losses | Provision for credit losses | Income (loss) before income tax expense (benefit) | Income tax expense (benefit) | Net income (loss) | Total average assets |