(Amounts in tables in millions, except share and per share data) (continued) Observable market inputs used in the calculation of the foreign currency forward contracts include foreign currency spot and forward rates.
In addition, other pricing data quoted by various banks and foreign currency dealers involving identical or comparable instruments are included.
The fair value generally reflects the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date.
Other Financial Instruments The following financial instruments are recorded at fair value or at amounts that approximate fair value: (1) cash and cash equivalents, (2) receivables, net, (3) certain other current assets, (4) accounts payable and (5) other current liabilities.
The carrying amounts reported in the consolidated balance sheets for the above financial instruments closely approximates their fair value due to the short-term nature of these assets and liabilities.
To calculate the fair values of the Companys senior notes at December 31, 2008 and 2007, the Company utilizes a market approach.
Due to the restricted investor base and the notional value of the senior notes, the senior notes may not be actively traded on the date the fair value is calculated.
Therefore, the Company utilizes prices and other relevant information generated by market transactions involving identical securities, reflecting U. S.  Treasury yields to calculate the yield-to-maturity and the price on each of the Companys senior notes.
These inputs are provided by an independent third party.
The Company derived the fair value estimates of the Companys various other debt instruments by evaluating the nature and terms of each instrument, considering prevailing economic and market conditions, and examining the cost of similar debt offered at the balance sheet date.
The Company also incorporates its credit default swap rates and currency specific swap rates to each debt instrument, as applicable.
These estimates are subjective and involve uncertainties and matters of significant judgment, and therefore the Company cannot determine them with precision.
Changes in assumptions could significantly affect the Companys estimates.
The fair value of the debt in the table below differs from the carrying amount due to changes in interest rates based on market conditions as of December 31, 2008 and 2007.
Generally, the fair value of fixed rate debt will increase as interest rates fall and decrease as interest rates rise.
The carrying amounts and estimated fair values of the Companys debt at December 31, 2008 and 2007 were as follows:


| Expected Maturity Date (as of December 31, 2003) | 2004 | (in thousands) | ASSETS: | Cash and cash equivalents | Short-term marketable securities | Weighted average interest rate | LIABILITIES: | Equipment-based term loan | Fixed rate debt lease obligation | Weighted average interest rate |


Commercial Mortgage Securitization Operations In 2008, we classified our commercial mortgage securitization operations as a divested business, reflecting our decision to exit this business.
These operations, which involved the origination and purchase of commercial mortgage loans that we in turn would aggregate and sell into commercial mortgage-backed securitization transactions, together with related hedging activities, were previously reported within the Asset Management segment.
We retained and continue the remainder of our commercial mortgage origination, servicing and other commercial mortgage related activities, which remain a part of our Asset Management segment.
As of December 31, 2009, our commercial mortgage securitization operations held a loan with a principal balance of $14 million, whose fair value continues to be subject to changes in credit spreads.
The losses in 2008 and 2009 primarily reflect net realized and unrealized losses on the loans, bonds and hedges from instability in the commercial mortgage-backed securities market.
We have substantial insurance operations in Japan, with 36% and 35% of our Financial Services Businesses general account investments relating to our Japanese insurance operations as of December 31, 2009 and 2008, respectively.
The following table sets forth the composition of the investments of our Japanese insurance operations general account as of the dates indicated.


| December 31 2009 2008 | Gross Case Reserves | Gross IBNR Reserves | Total Gross Carried Claim and Claim Adjustment Expense Reserves | Net Case Reserves | Net IBNR Reserves | Total Net Carried Claim and Claim Adjustment Expense Reserves |


| 2011 FES OE CEI TE JCP&L Met-Ed Penelec | (In millions) | Revenues: | Electric sales to affiliates | Ground lease with ATSI | Other | Expenses: | Purchased power from affiliates | Fuel | Support services | Investment Income: | Interest income from affiliates | Interest income from FE | Interest Expense: | Interest expense to affiliates | Interest expense to FE |


| 2009 2010-2011 2012-2013 after 2013 Total | (In Millions) | Planned construction and | capital investment -1 | Long-term debt | Operating leases | Purchase obligations -2 |


| $ in millions U.S. U.K. Continental Europe/Ireland Canada Asia Total | For the year ended December 31, 2015 | Revenue from external customers | Inter-company revenue | Total operating revenues | Long-lived assets | For the year ended December 31, 2014 | Revenue from external customers | Inter-company revenue | Total operating revenues | Long-lived assets | For the year ended December 31, 2013 | Revenue from external customers | Inter-company revenue | Total operating revenues | Long-lived assets |


| Year Ended December 31, | 2005 | Revenues | Video | High-speed Internet | Telephone | Advertising sales | Commercial | Other | $5,254 |


Our comparable store sales gain in fiscal 2008 benefited from a higher average transaction amount driven by the continued growth in higher-ticket items, including video gaming hardware, flat-panel televisions and notebook
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued) NOTE 11 RETIREMENT BENEFIT PLANS The Company sponsors various defined contribution savings plans, primarily in the U. S. , that allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with plan specified guidelines.
Under specified conditions, the Company will make contributions to the plans and/or match a percentage of the employee contributions up to certain limits.
Total expense related to the defined contribution plans was $24.8 million, $18.9 million and $19.2 million in the years ended December 31, 2012, 2011 and 2010, respectively.
The Company has a number of defined benefit pension plans and other postretirement benefit plans covering eligible salaried and hourly employees and their dependents.
The defined pension benefits provided are primarily based on (i) years of service and (ii) average compensation or a monthly retirement benefit amount.
The Company provides defined benefit pension plans in France, Germany, Ireland, Italy, Japan, Mexico, Monaco, South Korea, Sweden, U. K.  and U. S.  The other postretirement benefit plans, which provide medical and life insurance benefits, are unfunded plans.
All pension and other postretirement benefit plans in the U. S.  have been closed to new employees since 1999.
The measurement date for all plans is December 31.
On February 26, 2009, the Companys subsidiary BorgWarner Diversified Transmission Products Inc.  (DTP), entered into a Plant Shutdown Agreement with the United Auto Workers (UAW) for its Muncie, Indiana automotive component plant (the Muncie Plant).
Management subsequently wound-down production activity at the plant, with operations effectively ceased as of March 31, 2009.
The Plant Shutdown Agreement included terms allowing for lump sum payment of the pension obligation for certain participants if funding of the plan exceeded a defined level.
In accordance with these terms, in December 2012, the Company settled a portion of the pension obligation resulting in a non-cash loss of $5.7 million, which was recorded in other (income) expense within the Consolidated Statement of Operations.
On March 24, 2010, the Company finalized its settlement agreement regarding the closure of the Muncie Plant with the Pension Benefit Guaranty Corporation (PBGC) in which the Company agreed to make certain payments directly to the Muncie Plants defined benefit pension plan (the Plan).
In accordance with the settlement agreement, the Company made an initial cash contribution of $23 million for the 2009 Plan year and a cash contribution of $15 million in the year ended December 31, 2011.
During the fourth quarter of 2012, the Company received notification from the PBGC that the terms of the settlement have been suspended pending review of the Companys financial strength under the PBGCs revised enforcement policy pilot program announced on November 2, 2012.
The evaluation was confirmed in January 2013 and as a result the Company currently does not have any obligations as described in the original agreement.
The following table summarizes the expenses for the Companys defined contribution and defined benefit pension plans and the other postretirement defined benefit plans.


| (in millions) 2014 2015 2016 2017 2018 Thereafter Total | Operating leases | Marketing and sponsorships | Total |


| As of or for the year ended 2008 2007 At December 31, | December 31,(a)(in millions) | By risk type: | Fixed income | Foreign exchange | Equities | Commodities and other | Diversification | Trading VaR | Credit portfolio VaR | Diversification | Total trading and creditportfolio VaR | (in millions) | December 31, 2008 | December 31, 2007 |


| Parent CBRE Guarantor Subsidiaries Nonguarantor Subsidiaries Consolidated Total | CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: | CASH FLOWS FROM INVESTING ACTIVITIES: | Capital expenditures | Acquisition of businesses, including net assets acquired, intangibles and goodwill, net of cash acquired | Contributions to unconsolidated subsidiaries | Distributions from unconsolidated subsidiaries | Net proceeds from disposition of real estate held for investment | Additions to real estate held for investment | Proceeds from the sale of servicing rights and other assets | (Increase) decrease in restricted cash | Purchase of available for sale securities | Proceeds from the sale of available for sale securities | Other investing activities, net | Net cash used in investing activities | CASH FLOWS FROM FINANCING ACTIVITIES: | Proceeds from senior secured term loans | Repayment of senior secured term loans | Proceeds from revolving credit facility | Repayment of revolving credit facility | Proceeds from issuance of 5.00% senior notes | Repayment of 11.625% senior subordinated notes | Proceeds from notes payable on real estate held for investment | Repayment of notes payable on real estate held for investment | Proceeds from notes payable on real estate held for sale and under development | Repayment of notes payable on real estate held for sale and under development | Shares repurchased for payment of taxes on stock awards | Proceeds from exercise of stock options | Incremental tax benefit from stock options exercised | Non-controlling interests contributions | Non-controlling interests distributions | Payment of financing costs | (Increase) decrease in intercompany receivables, net | Other financing activities, net | Net cash (used in) provided by financing activities | Effect of currency exchange rate changes on cash and cash equivalents | NET DECREASE IN CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD | CASH AND CASH EQUIVALENTS, AT END OF PERIOD | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | Cash paid during the period for: | Interest | Income tax payments, net |


Covenants and Restrictions Related to our Long-Term Debt We are subject to the covenants and restrictions set forth in the indentures related to our long-term debt.
In particular, the indentures related to our outstanding senior notes issued by DISH DBS Corporation (“DISH DBS”) contain restrictive covenants that, among other things, impose limitations on the ability of DISH DBS and its restricted subsidiaries to: (i) incur additional indebtedness; (ii) enter into sale and leaseback transactions; (iii) pay dividends or make distributions on DISH DBS’ capital stock or repurchase DISH DBS’ capital stock; (iv) make certain investments; (v) create liens; (vi) enter into certain transactions with affiliates; (vii) merge or consolidate with another company; and (viii) transfer or sell assets.
Should we fail to comply with these covenants, all or a portion of the debt under the senior notes and our other long-term debt could become immediately payable.
The senior notes also provide that the debt may be required to be prepaid if certain change-in-control events occur.
In addition, the Convertible Notes due 2026 provide that, if a “fundamental change” (as defined in the related indenture) occurs, holders may require us to repurchase for cash all or part of their Convertible Notes due 2026.
As of the date of filing of this Annual Report on Form 10-K, we and DISH DBS were in compliance with the covenants and restrictions related to our respective long-term debt.


| 737 747 767 777 787 Total | 2012 | Cumulative deliveries | Deliveries | 2011 | Cumulative deliveries | Deliveries | 2010 | Cumulative deliveries | Deliveries |


| Year Ended December 31, 2004: High Low | First quarter | Second quarter | Third quarter | Fourth quarter | Year Ended December 31, 2005: | First quarter | Second quarter | Third quarter | Fourth quarter |


| 2014 2013 2012 | Weighted average common shares outstanding for basic computations | Weighted average dilutive effect of equity awards | Weighted average common shares outstanding for diluted computations |


| December 31, | (in millions) | Undrawn commitments to extend credit | Letters of credit | Marketing rights | Risk participation agreements | Residential mortgage loans sold with recourse | Total |


| Years ended December 31, 2017 2016 2015 | Revenues | GAAP | Earnings from operations | Operating margins | Effective income tax rate | Net earnings | Diluted earnings per share | Non-GAAP-1 | Core operating earnings | Core operating margins | Core earnings per share | Program | 737 | 2017 | Program accounting quantities | Undelivered units under firm orders | Cumulative firm orders | 2016 | Program accounting quantities | Undelivered units under firm orders | Cumulative firm orders | 2015 | Program accounting quantities | Undelivered units under firm orders | Cumulative firm orders |


| (in basis points) Industry Average1 | for the fiscal years ended September 30, | Equity | Global/international2 | United States | Multi-Asset/Balanced | Fixed Income | Tax-free | Taxable | Global/international3 | United States | Cash Management |


| Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 | Apple Inc. | S&P©500 | S&P©Computer Hardware | December 31, | 2011 | (in millions) | RSU expense before income tax | Tax benefit | RSU expense, net of tax | Total value of RSUs converted-1 | Total fair value of RSUs vested-2 | Workforce Reductions | Balance at January 1, 2006 | Purchase price adjustments | Charges utilized | Balance at December 31, 2006 | Purchase price adjustments | Charges utilized | Balance at December 31, 2007 | 2006 | Financial Services Businesses | ASSETS | Fixed maturities: | Available for sale, at fair value | Held to maturity, at amortized cost | Trading account assets supporting insurance liabilities, at fair value | Other trading account assets, at fair value | Equity securities, available for sale, at fair value | Commercial loans | Policy loans | Securities purchased under agreements to resell | Other long-term investments | Short-term investments | Total investments | Cash and cash equivalents | Accrued investment income | Reinsurance recoverables | Deferred policy acquisition costs | Other assets | Separate account assets | TOTAL ASSETS | LIABILITIES AND ATTRIBUTED EQUITY | LIABILITIES | Future policy benefits | Policyholders’ account balances | Policyholders’ dividends | Reinsurance payables | Securities sold under agreements to repurchase | Cash collateral for loaned securities | Income taxes | Securities sold but not yet purchased | Short-term debt | Long-term debt | Other liabilities | Separate account liabilities | Total liabilities | COMMITMENTS AND CONTINGENT LIABILITIES | ATTRIBUTED EQUITY | Accumulated other comprehensive income | Other attributed equity | Total attributed equity | TOTAL LIABILITIES AND ATTRIBUTED EQUITY |


| Year Ended December 31 % Change in | $ in millions, except per share amounts | Sales | Operating costs and expenses | Operating costs and expenses as a % of sales | Operating income | Operating margin rate | Mark-to-market pension and OPB (expense) benefit | Federal and foreign income tax expense | Effective income tax rate | Net earnings | Diluted earnings per share |


| Year Ended October 31, $ Change % Change $ Change % Change | 2011 | (dollars in millions) | Interest income | (Loss) gain on investments | Gain (loss) on assets related to executive deferred compensation plan | Foreign currency exchange gain (loss) | Other, net | Total | Year Ended October 31, | 2011 | (in thousands, except per share price) | Shares repurchased | Average purchase price | Aggregate purchase price -1 | Reissuance of treasury stock |


| Year Ended December 31, | 2008 | Risk-free interest rate | Expected life (in years) | Dividend yield | Expected volatility |


| Deposits Consumer Lending Total Consumer Banking | (Dollars in millions) | Net interest income | Noninterest income: | Card income | Service charges | All other income | Total noninterest income | Total revenue, net of interest expense | Provision for credit losses | Noninterest expense | Income before income taxes | Income tax expense | Net income | Effective tax rate-1 | Net interest yield | Return on average allocated capital | Efficiency ratio | Balance Sheet | Average | Total loans and leases | Total earning assets-2 | Total assets-2 | Total deposits | Allocated capital | Year end | Total loans and leases | Total earning assets-2 | Total assets-2 | Total deposits |


| Shares Weighted-AverageGrant DateFair Value | Unvested restricted shares outstanding at December 31, 2010 | Granted | Forfeited | Vested | Unvested restricted shares outstanding at December 31, 2011 | Granted | Forfeited | Vested | Unvested restricted shares outstanding at December 31, 2012 | Granted | Forfeited | Vested | Unvested restricted shares outstanding at December 31, 2013 |


| 2010 2009 2008 | Assumptions: | Weighted-average expected volatility | Expected term of stock options | Risk-free interest rate | Weighted-average expected dividend yield | Weighted-average grant date fair value per share of options granted | Twelve months ended December 31, | 2015 | (in millions, except as noted) | Net sales | Cost of sales | Gross margin | Gross margin percentage | Sales volume by product tons (000s) | Sales volume by nutrient tons (000s)(1) | Average selling price per product ton | Average selling price per nutrient ton-1 | Gross margin per product ton | Gross margin per nutrient ton-1 | Depreciation and amortization |


Operating profit for the segment was unchanged for 2010 compared to 2009.
Growth in Space Transportation’s operating profit was more than offset by a decline in Satellites’ operating profit.
S&DMS operating profit was relatively unchanged between periods.
The $21 million increase in Space Transportation mainly was attributable to higher equity earnings on the ULA and USA joint ventures and higher volume on the Orion program, which partially were offset by lower volume on the space shuttle’s external tank program.
Satellites’ operating profit decreased $23 million primarily due to lower volume and performance on commercial satellite programs, which partially was offset by higher volume and improved performance on government satellite programs in 2010.
Equity earnings represented 27% of operating profit at Space Systems in 2010, compared to 22% in 2009.
Operating profit for the segment increased 2% in 2009 compared to 2008.
During the year, operating profit growth at Satellites more than offset declines at Space Transportation and S&DMS.
In Satellites, the operating profit increase of $88 million mainly was due to higher volume on government satellite activities, which partially was offset by lower volume in commercial satellite activities.
The decrease of $46 million in Space Transportation’s operating profit mainly was attributable to the absence in 2009 of a benefit recognized in 2008 from the successful negotiations of a terminated commercial launch vehicle contract, lower volume on the space shuttle external tank program, and lower equity earnings in 2009 on the ULA joint venture.
The decrease in S&DMS’ operating profit of $19 million primarily was attributable to a lower volume on defensive missile programs and a reduction in the level of favorable performance adjustments in 2009 compared to 2008 on strategic missile programs.
Total equity earnings recognized by Space Systems, which includes ULA and USA, represented 22% of the segment’s operating profit in 2009 compared to 24% in 2008.
Backlog increased in 2010 compared to 2009 mainly due to orders exceeding sales on government satellite programs in Satellites and strategic missile programs in S&DMS, which more than offset higher sales volume compared to new orders on the Orion program in Space Transportation in 2010.
The decrease in backlog during 2009 compared to 2008 was primarily attributable to declines in orders and higher sales volume on the Orion program in Space Transportation and on government satellite programs in Satellites.
We expect Space Systems’ sales for 2011 will be comparable with the 2010 results.
Sales are expected to decline due to the end of our production of the external tank for the space shuttle, offset by growth in satellite activities.
Segment operating profit is expected to be down slightly primarily due to lower anticipated levels of equity earnings from our ownership interest in USA, which provides processing activities for the space shuttle.
USA’s activities will be winding down as the space shuttle’s last flight will be in 2011.
Segment operating margin is expected to slightly decline due to the lower equity earnings.


Defined Contribution Plans Our Company sponsors qualified defined contribution plans covering substantially all U. S.  employees.
Under the largest U. S.  defined contribution plan, we match participants’ contributions up to a maximum of 3.5 percent of compensation, subject to certain limitations.
Company costs related to the U. S.  plans were $39 million, $61 million and $82 million in 2018, 2017 and 2016, respectively.
We also sponsor defined contribution plans in certain locations outside the United States.
Company costs associated with those plans were $33 million, $35 million and $37 million in 2018, 2017 and 2016, respectively.


| State Foreign Operations Total | (in millions) | Balance at January 1, 2016 | Charged to costs and expenses | Other adjustments | Balance at December 31, 2016 | Charged to costs and expenses | Other adjustments | Balance at December 31, 2017 | Charged to costs and expenses | Other adjustments | Balance at December 31, 2018 |


13.
Borrowings Short-Term Borrowings 2007 Facility In August 2007, the Company entered into a five-year $2.5 billion unsecured revolving credit facility (the 2007 facility), which permits the Company to request an additional $500 million of borrowing capacity, subject to lender credit approval, up to a maximum of $3.0 billion.
The 2007 facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less domestic unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at December 31, 2009.
The 2007 facility provides back-up liquidity, funds ongoing working capital for general corporate purposes and funds various investment opportunities.
At December 31, 2009, the Company had $200 million outstanding under the 2007 facility with an interest rate of 0.44% and a maturity date during February 2010.
During February 2010, the Company rolled over $100 million in borrowings with an interest rate of 0.43% and a maturity date in May 2010.
Lehman Commercial Paper Inc.  has a $140 million participation under the 2007 Facility; however BlackRock does not expect that Lehman Commercial Paper Inc.  will honor its commitment to fund additional amounts.
Bank of America, a related party, has a $140 million participation under the 2007 facility.
In December 2007, in order to support two enhanced cash funds that BlackRock manages, BlackRock elected to procure two letters of credit under the existing 2007 facility in an aggregate amount of $100 million.
In December 2008, the letters of credit were terminated.
Commercial Paper Program On October 14, 2009, BlackRock established a commercial paper program (the CP Program) under which the Company may issue unsecured commercial paper notes (the CP Notes) on a private placement basis up to a maximum aggregate amount outstanding at any time of $3 billion.
The proceeds of the commercial paper issuances were used for the financing of a portion of the BGI Transaction.
Subsidiaries of Bank of America and Barclays, as well as other third parties, act as dealers under the CP Program.
The CP Program is supported by the 2007 facility.
The Company began issuance of CP Notes under the CP Program on November 4, 2009.
As of December 31, 2009, BlackRock had approximately $2 billion of outstanding CP Notes with a weighted average interest rate of 0.20% and a weighted average maturity of 23 days.
Since December 31, 2009, the Company repaid approximately $1.4 billion of CP Notes with proceeds from the long-term notes issued in December 2009.
As of March 5, 2010, BlackRock had $596 million of outstanding CP Notes with a weighted average interest rate of 0.18% and a weighted average maturity of 38 days.
Japan Commitment-line In June 2008, BlackRock Japan Co. , Ltd. , a wholly owned subsidiary of the Company, entered into a five billion Japanese yen commitment-line agreement with a banking institution (the Japan Commitment-line).
The term of the Japan Commitment-line was one year and interest accrued at the applicable Japanese short-term prime rate.
In June 2009, BlackRock Japan Co. , Ltd.  renewed the Japan Commitment-line for a term of one year.
licensed software upgrade rights, installation fees, transaction processing and subscriptions, increased 7% to $1.4 billion in 2017, from $1.3 billion in 2016.
The increase in system sales was primarily driven by increases in licensed software and subscriptions of $63 million and $27 million, respectively.  ?
Support and maintenance revenues increased 3% from 2016 to 2017.
This increase was primarily attributable to continued success selling Cerner Millennium applications and implementing them at client sites.  ?
Services revenue, which includes professional services (excluding installation) and managed services, increased 9% to $2.6 billion in 2017, from $2.4 billion in 2016.
This increase was driven by a $148 million increase in professional services due to growth in implementation and consulting activities and growth in managed services of $65 million as a result of continued demand for our hosting services.
Revenue backlog, which reflects contracted revenue that has not yet been recognized as revenue, increased 10% to $17.5 billion in 2017, compared to $15.9 billion in 2016.
This increase was driven by solid levels of new business bookings during the past four quarters, including strong levels of managed services bookings that typically have longer contract terms.
Costs of Revenue Costs of revenue as a percent of total revenues were 17% in 2017, compared to 16% in 2016.
The marginally higher costs of revenue as a percent of total revenues was primarily due to higher third-party costs associated with technology resale.
Costs of revenue include the cost of reimbursed travel expense, sales commissions, third party consulting services and subscription content and computer hardware, devices and sublicensed software purchased from manufacturers for delivery to clients.
It also includes the cost of hardware maintenance and sublicensed software support subcontracted to the manufacturers.
Such costs, as a percent of total revenues, typically have varied as the mix of revenue (software, hardware, devices, maintenance, support, services and reimbursed travel) carrying different margin rates changes from period to period.
Costs of revenue does not include the costs of our client service personnel who are responsible for delivering our service offerings.
Such costs are included in sales and client service expense.
Operating Expenses Total operating expenses increased 7% to $3.3 billion in 2017, compared with $3.1 billion in 2016.  ?
Sales and client service expenses as a percent of total revenues were 44% in 2017, compared to 43% in 2016.
These expenses increased 10% to $2.3 billion in 2017, from $2.1 billion in 2016.
Sales and client service expenses include salaries and benefits of sales, marketing, support, and services personnel, depreciation and other expenses associated with our managed services business, communications expenses, unreimbursed travel expenses, expense for share-based payments, and trade show and advertising costs.
The growth in sales and client service expenses reflects hiring of services personnel to support the growth in services revenue.  ?
Software development expenses as a percent of total revenues were 12% in 2017, compared to 11% in 2016.
Expenditures for software development include ongoing development and enhancement of the Cerner Millennium and HealtheIntent platforms, with a focus on supporting key initiatives to enhance physician experience, revenue cycle and population health solutions.
A summary of our total software development expense in 2017 and 2016 is as follows:


VISA INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) September 30, 2013 In July 2013, the Company’s board of directors authorized a $1.5 billion share repurchase program to be in effect through July 2014.
As of September 30, 2013, the program had remaining authorized funds of $251 million.
All share repurchase programs authorized prior to July 2013 have been completed.
In October 2013, the Company’s board of directors authorized a new $5.0 billion share repurchase program.
Under the terms of the retrospective responsibility plan, when the Company makes a deposit into the litigation escrow account, the shares of class B common stock are subject to dilution through an adjustment to the conversion rate of the shares of class B common stock to shares of class A common stock.
These deposits have the same economic effect on earnings per share as repurchasing the Company’s class A common stock, because they reduce the class B conversion rate and consequently the as-converted class A common stock share count.
The following table presents as-converted class B common stock after deposits into the litigation escrow account in fiscal 2012.
There were no deposits into the litigation escrow account in fiscal 2013.


2015 compared to 2014 When compared to 2014, costs of revenue in 2015 increased $41 million.
This increase included a constant currency increase in expenses of approximately $238 million, or 8.9%, partially offset by a positive impact of approximately $197 million from the effects of foreign currency fluctuations.
The constant currency growth was comprised of a $71 million increase in Commercial Solutions, which included the impact from the Encore acquisition which closed in July 2014, a $146 million increase in Research & Development Solutions, which included the incremental impact from the businesses that Quest contributed to Q2 Solutions, and a $21 million increase in Integrated Engagement Services.
The decrease in costs of revenue as a percent of revenues for 2015 was primarily as a result of an improvement in constant currency profit margin in the Commercial Solutions, Research & Development Solutions and Integrated Engagement Services segments (as more fully described in the segment discussion later in this section).
For 2015, this constant currency profit margin expansion was partially offset by the effect from a higher proportion of consolidated revenues being contributed by our lower margin Integrated Engagement Services segment when compared to 2014 as well as a negative impact from foreign currency fluctuations.


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


| Amount (In Thousands) | Senior Secured Transition Bonds, Series A: | Tranche A-1 -5.51% due October 2013 | Tranche A-2 -5.79% due October 2018 | Tranche A-3 -5.93% due June 2022 | Total senior secured transition bonds |


Variable interest entities and asset securitizations Variable interest entities Variable interest entities in which the Company holds a significant variable interest are described below.
M&T Auto Receivables I, LLC is a special purpose subsidiary of M&T Bank formed in 2002 for the purpose of borrowing $500 million in a revolving asset-backed structured borrowing with an unaffiliated conduit lender.
The revolving asset-backed structured borrowing is secured by automobile loans and other assets transferred to the special purpose subsidiary by M&T Bank or other of its subsidiaries that totaled $565 million and $572 million at December 31, 2006 and 2005, respectively.
The activities of M&T Auto Receivables I, LLC are generally restricted to purchasing and owning automobile loans for the purpose of securing this revolving borrowing arrangement.
Proceeds from payments on the automobile loans are required to be applied in priority order for fees, principal and interest on the borrowing, and funding the monthly replenishment of loans.
Any remaining proceeds are available for distribution to M&T Bank.
The secured borrowing is prepayable, in whole or in part, at any time and is non-recourse to M&T Bank and the Company.
However, 80% of the borrowing can be put back to M&T Bank upon demand.
The Companys maximum incremental exposure to loss resulting from the structure of this borrowing arrangement is generally restricted to the amount that such borrowing is overcollateralized.
Management currently estimates no material losses as a result of the pledging of assets and the terms of the borrowing arrangement.
The assets and liabilities of M&T Auto Receivables I, LLC have been included in the Companys consolidated financial statements.
M&T has a variable interest in a trust that holds American Depositary Shares of AIB (AIB ADSs) for the purpose of satisfying options to purchase such shares for certain employees.
The trust purchased the AIB ADSs with the proceeds of a loan from an entity subsequently acquired by M&T.
Proceeds from option exercises and any dividends and other earnings on the trust assets are used to repay the loan plus


| For the years ended December 31, | 2013 | (gallons in millions) | Billed water sales volumes | Residential | Commercial | Industrial | Public and other | Total |


CITIZENS FINANCIAL GROUP, INC.  MANAGEMENT'S DISCUSSION AND ANALYSIS 112 Asset liquidity risk is the risk that market conditions may reduce an entity’s ability to liquidate, pledge and/or finance certain assets and thereby substantially reduce the liquidity value of such assets.
Drivers of contingent liquidity risk include general market disruptions as well as specific issues regarding the credit quality and/or valuation of a security or loan, issuer or borrower and/or asset class.
Funding liquidity risk is the risk that market conditions and/or entity-specific events may reduce an entity’s ability to raise funds from depositors and/or wholesale market counterparties.
Drivers of funding liquidity may be idiosyncratic or systemic, reflecting impediments to operations and/or undermining of market confidence.
Factors Affecting Liquidity Given the composition of their assets and borrowing sources, contingent liquidity at both CBNA and CBPA would be materially affected by such events as deterioration of financing markets for high-quality securities (e. g. , mortgage-backed securities and other instruments issued by the Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”)), by any incapacitation of the Federal Home Loan Banks (“FHLBs”) to provide collateralized advances and/or by a refusal of the Federal Reserve Board to act as lender of last resort in systemic stress.
Given the quality of our free securities, the positive track record of the FHLBs in stress and the commitment of the Federal Reserve Board to continue as lender of last resort in systemic stress scenarios, we view contingent liquidity risk at our banking subsidiaries, both CBNA and CBPA, to be relatively modest.
Given the structure of their balance sheets, funding liquidity of CBNA and CBPA would be materially affected by an adverse idiosyncratic event (e. g. , a major loss, causing a perceived or actual deterioration in its financial condition), an adverse systemic event (e. g. , default or bankruptcy of a significant capital markets participant), or a combination of both (e. g. , the financial crisis of 2008-2010).
However, during the financial crisis, our banking subsidiaries reduced their dependence on unsecured wholesale funding to virtually zero.
Consequently, and despite ongoing exposure to a variety of idiosyncratic and systemic events, we view our funding liquidity risk to be relatively modest.
An additional variable affecting our access, and the access of our banking subsidiaries, to unsecured wholesale market funds and to large denomination (i. e. , uninsured) customer deposits is the credit ratings assigned by such agencies as Moody’s, Standard & Poor’s and Fitch.


| Actual Capital December 31, RegulatoryCapital Requirements December 31, | 2016 | (in millions) | RiverSource Life-1(2) | RiverSource Life of NY-1(2) | IDS Property Casualty-1(3) | Ameriprise Insurance Company-1(3) | ACC-4(5) | Threadneedle Asset Management Holdings Sàrl-6 | Ameriprise National Trust Bank-7 | AFSI-3(4) | Ameriprise Captive Insurance Company-3 | Ameriprise Trust Company-3 | AEIS-3(4) | RiverSource Distributors, Inc.-3(4) | Columbia Management Investment Distributors, Inc.-3(4) |


| Year ended December 31, | 2009 | (in millions) | Annualized new business premiums: | On an actual exchange rate basis: | Life Planner operations | Gibraltar Life | Total | On a constant exchange rate basis: | Life Planner operations | Gibraltar Life | Total |


| Payments Due by Period | Total | (in millions) | Long-term debt-1 | Capital lease obligations | Operating leases | Purchase commitments | Total contractual obligations |


| (Thousands of dollars) | Net fair value of derivatives outstanding at December 31, 2007 | Derivatives reclassified or otherwise settled during the period | Fair value of new derivatives entered into during the period | Other changes in fair value | Net fair value of derivatives outstanding at December 31, 2008 (a) |


In the December 2013 order, the FERC set one issue for hearing involving a settlement with Union Pacific regarding certain coal delivery issues.
Consistent with the decisions described above, Entergy Arkansas’s participation in the System Agreement terminated effective December 18, 2013.
In December 2014 a FERC ALJ issued an initial decision finding that Entergy Arkansas would realize benefits after December 18, 2013 from the 2008 settlement agreement between Entergy Services, Entergy Arkansas, and Union Pacific, related to certain coal delivery issues.
The ALJ further found that all of the Utility operating companies should share in those benefits pursuant to the methodology proposed by the MPSC.
The Utility operating companies and other parties to the proceeding have filed briefs on exceptions and/or briefs opposing exceptions with the FERC challenging various aspects of the December 2014 initial decision and the matter is pending before the FERC.
Utility Operating Company Notices of Termination of System Agreement Participation Consistent with their written notices of termination delivered in December 2005 and November 2007, respectively, Entergy Arkansas and Entergy Mississippi filed with the FERC in February 2009 their notices of cancellation to terminate their participation in the System Agreement, effective December 18, 2013 and November 7, 2015, respectively.
In November 2009 the FERC accepted the notices of cancellation and determined that Entergy Arkansas and Entergy Mississippi are permitted to withdraw from the System Agreement following the 96-month notice period without payment of a fee or the requirement to otherwise compensate the remaining Utility operating companies as a result of withdrawal.
Appeals by the LPSC and the City Council were denied in 2012 and 2013.
Effective December 18, 2013, Entergy Arkansas ceased participating in the System Agreement.
Effective November 7, 2015, Entergy Mississippi ceased participating in the System Agreement.
In keeping with their prior commitments and after a careful evaluation of the basis for and continued reasonableness of the 96-month System Agreement termination notice period, the Utility operating companies filed with the FERC in October 2013 to amend the System Agreement changing the notice period for an operating company to


| Pension | Years ended December 31, | Service cost | Interest cost | Expected return on plan assets | Amortization of prior service costs | Recognized net actuarial loss | Settlement/curtailment/other losses | Net periodic benefit cost | (Dollars in millions) | Years ended December 31, | Allocated to business segments | Unallocated items, eliminations and other | Total |


| Amount (In Millions) | 2010 net revenue | Retail electric price | Volume/weather | Purchased power capacity | Other | 2011 net revenue |


| Year ended December 31 Change | Dollars in millions | Noninterest expense | Personnel | Occupancy | Equipment | Marketing | Other | Total noninterest expense | Liability as of December 31, 2003 | Lease restructuring liability and other operating lease liability |


Entergy Texas, Inc.  Management's Financial Discussion and Analysis 361 Fuel and purchased power expenses increased primarily due to an increase in power purchases as a result of the purchased power agreements between Entergy Gulf States Louisiana and Entergy Texas and an increase in the average market prices of purchased power and natural gas, substantially offset by a decrease in deferred fuel expense as a result of decreased recovery from customers of fuel costs.
Other regulatory charges increased primarily due to an increase of $6.9 million in the recovery of bond expenses related to the securitization bonds.
The recovery became effective July 2007.
See Note 5 to the financial statements for additional information regarding the securitization bonds.2007 Compared to 2006 Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges.
Following is an analysis of the change in net revenue comparing 2007 to 2006.


Product Warranty Warranty and similar reserves for homes are established at an amount estimated to be adequate to cover potential costs for materials and labor with regard to warranty-type claims expected to be incurred subsequent to the delivery of a home.
Reserves are determined based on historical data and trends with respect to similar product types and geographical areas.
The Company constantly monitors the warranty reserve and makes adjustments to its pre-existing warranties in order to reflect changes in trends and historical data as information becomes available.
Warranty reserves are included in other liabilities in the consolidated balance sheets.
The activity in the Companys warranty reserve was as follows:


| 2015 2014 2013 | Numerator | Income from continuing operations | Loss from discontinued operations, net of tax | Net income available to common stockholders | Denominator | Weighted average common shares outstanding—Basic | Effect of dilutive common stock equivalents | Weighted average common shares outstanding—Diluted |


| For the Year Ended December 31, | 2018 | (in millions) | Net interest income | Noninterest income | Total revenue | Noninterest expense | Net income | Total average loans and leases and loans held for sale | Total average deposits |


Star Pizza Acquisition On March 13, 2017, we completed the Star Pizza Acquisition.
The transaction provided us with a leadership position in the fast growing small-run pizza box market and increases our vertical integration.
The purchase price was $34.6 million, net of a $0.7 million working capital settlement.
We have fully integrated the approximately 22,000 tons of containerboard used by Star Pizza annually.
We have included the financial results of the acquired assets since the date of the acquisition in our Corrugated Packaging segment.
The purchase price allocation for the acquisition primarily included $24.8 million of customer relationship intangible assets and $2.2 million of goodwill.
We are amortizing the customer relationship intangibles over 10 years based on a straight-line basis because the amortization pattern was not reliably determinable.
The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e. g. , enhanced reach of the combined organization and other synergies), and the assembled work force.
The goodwill and intangibles are amortizable for income tax purposes.
Packaging Acquisition On January 19, 2016, we completed the Packaging Acquisition.
The entities acquired provide value-added folding carton and litho-laminated display packaging solutions.
The purchase price was $94.1 million, net of cash received of $1.7 million, a working capital settlement and a $3.5 million escrow receipt in the first quarter of fiscal 2017.
The transaction is subject to an election under Section 338(h)(10) of the Code that increases the U. S.  tax basis in the acquired U. S.  entities.
We believe the transaction has provided us with attractive and complementary customers, markets and facilities.
We have included the financial results of the acquired entities since the date of the acquisition in our Consumer Packaging segment.
The purchase price allocation for the acquisition primarily included $55.0 million of property, plant and equipment, $10.5 million of customer relationship intangible assets, $9.3 million of goodwill and $25.8 million of liabilities, including $1.3 million of debt.
We are amortizing the customer relationship intangibles over estimated useful lives ranging from 9 to 15 years based on a straight-line basis because the amortization pattern was not reliably determinable.
The fair value assigned to goodwill is primarily attributable to buyer-specific synergies expected to arise after the acquisition (e. g. , enhanced reach of the combined organization and other synergies), and the assembled work force.
The goodwill and intangibles of the U. S.  entities are amortizable for income tax purposes.
SP Fiber On October 1, 2015, we completed the SP Fiber Acquisition in a stock purchase.
The transaction included the acquisition of mills located in Dublin, GA and Newberg, OR, which produce lightweight recycled containerboard and kraft and bag paper.
The Newberg mill also produced newsprint.
As part of the transaction, we also acquired SP Fiber's 48% interest in GPS.
GPS is a joint venture providing steam to the Dublin mill and electricity to Georgia Power.
The purchase price was $278.8 million, net of cash received of $9.2 million and a working capital


| Year Ended September 30, 2007 Year Ended September 30, 2006 | High | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter |


| Product Year of Expiration (in the U.S.)(1) | Asmanex | Dulera | Integrilin | Nasonex-2 | Emend | Follistim AQ | PegIntron | Invanz | Zostavax | Zetia-3/Vytorin/Liptruzet | NuvaRing | Emendfor Injection | Noxafil | RotaTeq | Intron A | Recombivax | Januvia/Janumet/Janumet XR | Zioptan | Isentress | Victrelis | Gardasil |


| (in millions) | 2009 | 2010 | 2011 | 2012 | 2013 |


| 2014 2013 | December 31,(in millions,except ratios) | Home equity | Prime mortgage | Subprime mortgage | Option ARMs |


| Year Weighted-AverageSupply ofBerthsMarketedGlobally-1 Royal Caribbean Cruises Ltd. Total Berths GlobalCruiseGuests-1 North AmericanCruiseGuests-2 EuropeanCruiseGuests -3 | 2010 | 2011 | 2012 | 2013 | 2014 |


The year-to-year increase in communications end market revenue in fiscal 2014 was primarily a result of increased wireless base station deployment activity and, to a lesser extent, an increase in revenue as a result of the Acquisition.
Industrial end market revenue increased year-over-year in fiscal 2014 as compared to fiscal 2013 as a result of an increase in demand in this end market, which was most significant for products sold into the instrumentation and automation sectors and, to a lesser extent, an increase in revenue as a result of the Acquisition.
The year-to-year increase in automotive end market revenue in fiscal 2014 was primarily a result of increasing electronic content in vehicles and higher demand for new vehicles.
The year-to-year decrease in revenue in the consumer end market in fiscal 2014 was primarily the result of the sale of our microphone product line in the fourth quarter of fiscal 2013.
The year-to-year decrease in revenue in the industrial and consumer end markets in fiscal 2013 was primarily the result of a weak global economic environment and one less week of operations in fiscal 2013 as compared to fiscal 2012.
Automotive end market revenue increased in fiscal 2013 primarily as a result of increasing electronic content in vehicles.


Note 29  Capital The Federal Reserve establishes capital requirements, including well-capitalized standards for the consolidated financial holding company.
The OCC establishes similar capital requirements and standards for the Firms national banks, including JPMorgan Chase Bank, N. A. , and Chase Bank USA, N. A.
There are two categories of risk-based capital: Tier 1 capital and Tier 2 capital.
Tier 1 capital includes common stockholders equity, qualifying preferred stock and minority interest less goodwill and other adjustments.
Tier 2 capital consists of preferred stock not qualifying as Tier 1, subordinated long-term debt and other instruments qualifying as Tier 2, and the aggregate allowance for credit losses up to a certain percentage of risk-weighted assets.
Total regulatory capital is subject to deductions for investments in certain subsidiaries.
Under the risk-based capital guidelines of the Federal Reserve, JPMorgan Chase is required to maintain minimum ratios of Tier 1 and Total (Tier 1 plus Tier 2) capital to risk-weighted assets, as well as minimum leverage ratios (which are defined as Tier 1 capital to average adjusted onbalance sheet assets).
Failure to meet these minimum requirements could cause the Federal Reserve to take action.
Banking subsidiaries also are subject to these capital requirements by their respective primary regulators.
As of December 31, 2009 and 2008, JPMorgan Chase and all of its banking subsidiaries were well-capitalized and met all capital requirements to which each was subject.


When we purchase an asset, we capitalize all costs necessary to make the asset ready for its intended use.
However, many of our assets are self-constructed.
A large portion of our capital expenditures is for track structure expansion (capacity projects) and replacement (program projects), which is typically performed by our employees.
Approximately 13% of our full-time equivalent employees are dedicated to the construction of capital assets.
Costs that are directly attributable or overhead costs that relate directly to capital projects are capitalized.
Direct costs that are capitalized as part of self-constructed assets include material, labor, and work equipment.
Indirect costs are capitalized if they clearly relate to the construction of the asset.
These costs are allocated using appropriate statistical bases.
The capitalization of indirect costs is consistent with FASB Statement No.67, Accounting for Costs and Initial Rental Operations of Real Estate Projects.
General and administrative expenditures are expensed as incurred.
Normal repairs and maintenance are also expensed as incurred, while costs incurred that extend the useful life of an asset, improve the safety of our operations or improve operating efficiency are capitalized.
Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or the fair value of the leased asset at the inception of the lease.
Amortization expense is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease.10.
Accounts Payable and Other Current Liabilities


| Target Allocation Plan Assets | 2009 | Asset Category | Equity securities | Fixed income | Total |


| At December 31 Total United States Europe* Africa Asia | (In millions) | 2013 | Future revenues | Less: | Future production costs | Future development costs | Future income tax expenses | 83,618 | Future net cash flows | Less: Discount at 10% annual rate | Standardized measure of discounted future net cash flows | 2012 | Future revenues | Less: | Future production costs | Future development costs | Future income tax expenses | 94,093 | Future net cash flows | Less: Discount at 10% annual rate | Standardized measure of discounted future net cash flows | 2011 | Future revenues | Less: | Future production costs | Future development costs | Future income tax expenses | 92,383 | Future net cash flows | Less: Discount at 10% annual rate | Standardized measure of discounted future net cash flows |


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


| Credit Card (a) Other Consumer (b) | Dollars in millions | December 31, 2012 | FICO score greater than 719 | 650 to 719 | 620 to 649 | Less than 620 | No FICO score available or required (c) | Total loans using FICO credit metric | Consumer loans using other internal credit metrics (b) | Total loan balance | Weighted-average updated FICO score (d) | December 31, 2011 | FICO score greater than 719 | 650 to 719 | 620 to 649 | Less than 620 | No FICO score available or required (c) | Total loans using FICO credit metric | Consumer loans using other internal credit metrics (b) | Total loan balance | Weighted-average updated FICO score (d) | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 and thereafter | Total |


The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations.
Cost Method Investments Cost method investments are initially recorded at cost, and we record dividend income when applicable dividends are declared.
Cost method investments are reported as other investments in our consolidated balance sheets, and dividend income from cost method investments is reported in other income (loss) — net in our consolidated statements of income.
We review all of our cost method investments quarterly to determine if impairment indicators are present; however, we are not required to determine the fair value of these investments unless impairment indicators exist.
When impairment indicators exist, we generally use discounted cash flow analyses to determine the fair value.
We estimate that the fair values of our cost method investments approximated or exceeded their carrying values as of December 31, 2014 and 2013.
Our cost method investments had a carrying value of $166 million and $162 million as of December 31, 2014 and 2013, respectively.


| (dollars in millions)CDS Gross TransactionNotional Amount atDecember 31,2010 Net NotionalAmount atDecember 31,2010 AttachmentPoint atInception(a) AttachmentPoint atDecember 31,2010(a) RealizedLossesthroughDecember 31,2010(b) PercentNon-investmentGrade atDecember 31,2010(c) | 1 | 2 | 3 | 4(d) | 5(d) | 6(d) | Total |


| In millions Dec. 312013 Dec. 312012 | Total consumer lending | Total commercial lending | Total TDRs | Nonperforming | Accruing (a) | Credit card | Total TDRs |


KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Investment in Retail Store Leases The Company has interests in various retail store leases relating to the anchor store premises in neighborhood and community shopping centers.
These premises have been sublet to retailers who lease the stores pursuant to net lease agreements.
Income from the investment in these retail store leases during the years ended December 31, 2008, 2007 and 2006, was approximately $2.7 million, $1.2 million and $1.3 million, respectively.
These amounts represent sublease revenues during the years ended December 31, 2008, 2007 and 2006, of approximately $7.1 million, $7.7 million and $8.2 million, respectively, less related expenses of $4.4 million, $5.1 million and $5.7 million, respectively, and an amount which, in managements estimate, reasonably provides for the recovery of the investment over a period representing the expected remaining term of the retail store leases.
The Companys future minimum revenues under the terms of all non-cancelable tenant subleases and future minimum obligations through the remaining terms of its retail store leases, assuming no new or renegotiated leases are executed for such premises, for future years are as follows (in millions): 2009, $5.6 and $3.8; 2010, $5.4 and $3.7; 2011, $4.5 and $3.1; 2012, $2.3 and $2.1; 2013, $1.0 and $1.3 and thereafter, $1.4 and $0.5, respectively.
Leveraged Lease During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties.
The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights.
The Companys cash equity investment was approximately $4.0 million.
This equity investment is reported as a net investment in leveraged lease in accordance with SFAS No.13, Accounting for Leases (as amended).
From 2002 to 2007, 18 of these properties were sold, whereby the proceeds from the sales were used to pay down the mortgage debt by approximately $31.2 million.
As of December 31, 2008, the remaining 12 properties were encumbered by third-party non-recourse debt of approximately $42.8 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease.
As an equity participant in the leveraged lease, the Company has no recourse obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment of the lease.
Accordingly, this obligation has been offset against the related net rental receivable under the lease.
At December 31, 2008 and 2007, the Companys net investment in the leveraged lease consisted of the following (in millions)


Quarterly Trends Revenue Spending by advertisers is traditionally strongest in the fourth quarter of each year.
Historically, this seasonality in advertising spending has affected our quarterly results with higher sequential advertising revenue growth from the third to the fourth quarter compared to sequential advertising revenue growth from the fourth quarter to the subsequent first quarter.
For example, our advertising revenue increased 45%, 43% and 35% between the third and fourth quarters of 2012, 2013 and 2014, respectively, while advertising revenue for the first quarter of 2013 and 2014 increased 1% and 3% compared to the fourth quarter of 2012 and 2013, respectively.
Cost of Revenue and Operating Expenses Cost of revenue, excluding the impact of stock-based compensation expense, increased in every quarter presented primarily due to the continued expansion of our co-located data center facilities and an increase in average employee headcount.
Legal Proceedings The Company is currently involved in, and may in the future be involved in, legal proceedings, claims and governmental investigations in the normal course of business.
Legal fees and other costs associated with such actions are expensed as incurred.
The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies.
Litigation accruals are recorded when and if it is determined that a loss related matter is both probable and reasonably estimable.
Material loss contingencies that are reasonably possible of occurrence, if any, are subject to disclosure.
As of December 31, 2014, there was no litigation or contingency with at least a reasonable possibility of a material loss.
No material losses have been recorded during years ended December 31, 2014, 2013 and 2012 with respect to litigation or loss contingencies.
Indemnification In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with its customers, partners, suppliers and vendors.
Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service, breach of representations or covenants, intellectual property infringement or other claims made against such parties.
These provisions may limit the time within which an indemnification claim can be made.
It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.
The Company has never incurred significant expense defending its licensees against third party claims, nor has it ever incurred significant expense under its standard service warranties or arrangements with its customers, partners, suppliers and vendors.
Accordingly, the Company had no liabilities recorded for these provisions as of December 31, 2014 and 2013.
Note 15.
Related Party Transactions One of the Companys directors has a direct ownership interest in a vendor that provides marketing and communication services to the Company.
For the years ended December 31, 2014 and 2013, no expenses were incurred for services rendered.
For the year ended December 31, 2012, the Company incurred $1.9 million of expense for services rendered.
There was no outstanding payable balance associated with the vendor as of December 31, 2014.
Note 16.
Employee Benefit Plan The Company adopted a 401(k) Plan that qualifies as a deferred compensation arrangement under Section 401 of the Code.
Under the 401(k) Plan, participating employees may defer a portion of their pretax earnings not to exceed the maximum amount allowable.
The Company has not made any matching contributions to date.
Note 17.
Segment Information and Operations by Geographic Area The Company has a single operating segment and reporting unit structure.
The Companys chief operating decisionmaker is the chief executive officer who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue by geographic region for purposes of allocating resources and evaluating financial performance.
Revenue Revenue by geography is based on the billing addresses of the customers.
The following tables set forth revenue by services and revenue by geographic area (in thousands):


Private Notes The Company’s private notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium.
Upon the occurrence of specified changes of control involving the Company, the Company would be required to offer to repurchase the private notes at a price equal to 100% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase.
Additionally, the Company would be required to make a similar offer to repurchase the private notes upon the occurrence of specified merger events or asset sales involving the Company, when accompanied by a downgrade of the private notes below investment grade rating, within a specified time period.
The private notes are unsecured senior obligations of the Company and rank equal in right of payment with all other senior indebtedness of the Company.
The private notes shall be unconditionally guaranteed by subsidiaries of the Company in certain circumstances, as described in the note purchase agreements as amended.


| (in millions) Unrealized gains (losses) on AFS securities(a) Translation adjustments, net of hedges Cash flow hedges Net loss andprior service (credit) of defined benefit pension and OPEB plans(e) Accumulated other comprehensive income (loss) | Balance at December 31, 2004 | Net change | Balance at December 31, 2005 | Net change | Adjustment to initially apply SFAS 158, net of taxes | Balance at December 31, 2006 | Cumulative effect of changes in accounting principles (SFAS 159) | Balance at January 1, 2007, adjusted | Net change | Balance at December 31, 2007 |


| (Dollars in millions) December 31 | 2008 | Ratings-2 | AAA | AA | A | BBB | BB | B | CCC and below | NR-3 | Total net credit default protection |


Item 6.
Selected Financial Data The following table sets forth selected financial data for each of the five years in the period ended December 31, 2006 (amounts in millions, except per share amounts).
This financial data should be read together with our consolidated financial statements and related notes, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and other financial data appearing elsewhere in this report.


| Years Ended December 31, Gain (Loss) | (in millions) | Assets: | Bond and equity securities | Alternative investments(a) | Other, including Short-term investments | Liabilities: | Long-term debt(b) | Other liabilities | Total gain |


| DATE CITI S&P 500 S&P FINANCIALS | 31-Dec-2010 | 30-Dec-2011 | 31-Dec-2012 | 31-Dec-2013 | 31-Dec-2014 | 31-Dec-2015 | Years Ended November 30, | 2003 | (Dollars in thousands) | Revenues | Costs and expenses | Operating earnings | Dollar value of mortgages originated | Number of mortgages originated | Mortgage capture rate of Lennar homebuyers | Number of title closing transactions (excluding title policies issued) | Number of title policies issued |


| Year Ended December 31, | 2012 | Risk-free interest rate | Expected dividend yield | Expected volatility—ANSYS Stock Price | Expected volatility—NASDAQ Composite Index | Expected term | Correlation factor |


| Year Ended December 31, | 2016 | (MMBoe) | Proved Reserves Beginning of Year | Revisions of Previous Estimates | Extensions, Discoveries and Other Additions | Purchase of Minerals in Place | Sale of Minerals in Place | Production | Proved Reserves End of Year |


| Territory Competitor Marketed Product Competitor | U.S. | Europe | Europe | Europe | Europe | Europe | Europe |


(l) Impairment of Long-Lived Assets The Company reviews its long-lived asset groups, which include intangible assets subject to amortization, which for the Company are its patents and customer relationships, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable.
Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups.
If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.
Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.


| Year Ended December 31, | 2015 | (Millions, except per Boe amounts) | LOE: | U.S. | Canada | Total | LOE per Boe: | U.S. | Canada | Total | 2015 | Grant-date fair value | Risk-free interest rate | Volatility factor | Contractual term (years) |


| For the year ended December 31, 2012 | Transfers out of Level 1 into Level 2 | (in millions) | Assets | Fixed maturities, available-for- | sale: | Non-U.S. governments | State and political subdivisions | Corporate | Collateralized debt obligations | Other debt obligations | Total fixed maturities, available-for-sale | Fixed maturities, trading | Separate account assets |


Income tax expense Income tax expense increased $958 million to $990 million in 2017 as compared to 2016.
The Company's effective tax rates were 128% and 17% for the years ended December 31, 2017 and 2016, respectively.
The net increase in the 2017 effective tax rate was due primarily to expense related to the U. S.  tax reform one-time transition tax and remeasurement of deferred tax assets.
Further, the 2016 rate was impacted by the items described below.
Income tax expense decreased $380 million to $32 million in 2016 as compared to 2015.
The Company's effective tax rates were 17% and 42% for the years ended December 31, 2016 and 2015, respectively.
The net decrease in the 2016 effective tax rate was due, in part, to the 2016 asset impairments in the U. S. , as well as the devaluation of the peso in certain of our Mexican subsidiaries and the release of valuation allowance at certain of our Brazilian subsidiaries.
These favorable items were partially offset by the unfavorable impact of Chilean income tax law reform enacted during the first quarter of 2016.
Further, the 2015 rate was due, in part, to the nondeductible 2015 impairment of goodwill at DP&L and Chilean withholding taxes offset by the release of valuation allowance at certain of our businesses in Brazil, Vietnam and the U. S.  See Note 19—Asset Impairment Expense included in Item 8.
—Financial Statements and Supplementary Data of this Form 10-K for additional information regarding the 2016 U. S.  asset impairments.
See Note 20—Income Taxes included in Item 8.
—Financial Statements and Supplementary Data of this Form 10-K for additional information regarding the 2016 Chilean income tax law reform.
Our effective tax rate reflects the tax effect of significant operations outside the U. S. , which are generally taxed at rates different than the U. S.  statutory rate.
Foreign earnings may be taxed at rates higher than the new U. S.  corporate rate of 21% and a greater portion of our foreign earnings may be subject to current U. S.  taxation under the new tax rules.
A future proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions could impact our periodic effective tax rate.
The Company also benefits from reduced tax rates in certain countries as a result of satisfying specific commitments regarding employment and capital investment.
See Note 20—Income Taxes included in Item 8.
—Financial Statements and Supplementary Data of this Form 10-K for additional information regarding these reduced rates.


| Millions of kWhs Twelve Months Ended Percent Variation | Description | Residential/Religious | Commercial/Industrial | Other | Total Full Service Customers | Retail access customers | Sub-total | NYPA, Municipal Agency and Other Sales | Total Service Area |


| Year Ended December 31, 2015 | PFI excludingClosed Block Division | Yield-1 | ($ in millions) | Fixed maturities | Trading account assets supporting insurance liabilities | Equity securities | Commercial mortgage and other loans | Policy loans | Short-term investments and cash equivalents | Other investments | Gross investment income before investment expenses | Investment expenses | Investment income after investment expenses | Investment results of other entities and operations-2 | Total investment income |


Table of Contents is substantially related to additional service contracts for the increased number of Selenia systems in our installed base.
This segment incurred an operating loss in fiscal 2009 compared to operating income in fiscal 2008 primarily due to a $265.9 million goodwill impairment charge recorded in the second quarter related to our MammoSite reporting unit in addition to the reduction of revenue discussed above and lower gross margins, partially offset by a reduction of operating expenses from our cost reduction initiatives implemented in the first half of fiscal 2009.
Our gross margin in this business segment was 47% in fiscal 2009 compared to 51% in fiscal 2008.
The decrease in gross margin was primarily attributable to lower absorption of manufacturing costs due to lower volumes, an increase of $8.8 million in amortization expense of intangible assets, and to a lesser extent, a slight deterioration of average selling prices driven by the current economic environment for capital purchases, and less expensive configurations of the units being sold.
In addition, included in cost of product sales was approximately $1.9 million of costs related to the closure of our manufacturing facility in Shanghai.
This segment incurred charges of $3.3 million in fiscal 2008 related to sales of acquired MammoSite inventory that was written up to fair value for purchase accounting purposes.


| ($ in millions) 2010 2009 | Immediate fixed annuities: | Structured settlement annuities | Other immediate fixed annuities | Traditional life insurance | Accident and health insurance | Other | Total reserve for life-contingent contract benefits |


| (in millions) Total Less than 1 year 1 to 3 years 3 to 5 years After 5 years | Long-term borrowed funds-1 | Operating lease obligations | Term deposits-1 | Purchase obligations-2 | Total outstanding contractual obligations |


| Other-Than-Temporary Impairments (OTTI) on Investments Year ended December 31, 2009 | In millions of dollars | Impairment losses related to securities that the Company does not intend to sell nor will | likely be required to sell | Total OTTI losses recognized during the year ended December 31, 2009 | Less: portion of OTTI loss recognized in AOCI (before taxes) | Net impairment losses recognized in earnings for securities that the Company does not intend | to sell nor will likely be required to sell | OTTI losses recognized in earnings for securities that the Company intends to sell or more- | likely-than-not will be required to sell before recovery | Total impairment losses recognized in earnings |


| 2004 2003 | ($ in millions) | Notes and other long-term assets | Long-term debt and other long-term liabilities | Derivative instruments | 2006 | ($ in millions) | Operating income (loss) | Gains and other income (expense) | Interest income, provision for loan losses and interest expense | Equity in earnings (losses) | Income (loss) before income taxes and minority interest | Tax (provision) benefit | Tax credits | Total tax (provision) benefit | Income from continuing operations before minority interest | Minority interest | Income from continuing operations |


| Years ended December 31, | 2009 | Net loss on early extinguishment of debt | Gains (losses) on sales of businesses and investments | Vendor discounts and credit adjustments | Litigation settlement | Investment impairments | Other income, net | Total other income, net |


| Net sales $3,410 | Cost of sales | Severance charges | Gross profit | Other income, net | Operating profit | Earnings from discontinued operations before income taxes | Income tax expense | Net gain on divestiture of discontinued operations | Net earnings from discontinued operations |


Related-Party Transactions Prior to the Disposition, the Company was a wholly-owned subsidiary of McDonalds.
Transactions through the date of separation are considered related-party transactions and are discussed below.
The consolidated statement of income reflects charges from McDonalds of $8,667 for the year ended December 31, 2006.
These charges primarily related to reimbursements of payroll and related expenses for certain McDonalds employees that performed services for the Company, insurance coverage, software maintenance agreements and non-income based taxes.
The charges were specifically identifiable to the Company.
The Company cannot estimate with any reasonable certainty what these charges would have been on a standalone basis.
However, the Company feels that these charges are indicative of what it could have incurred on a stand-alone basis.


Below-investment grade corporate fixed income portfolio Below-investment grade securities have different characteristics than investment grade corporate debt securities.
Risk of loss from default by the borrower is greater with below-investment grade securities.
Below-investment grade securities are generally unsecured and are often subordinated to other creditors of the issuer.
Also, issuers of below-investment grade securities usually have higher levels of debt and are more sensitive to adverse economic conditions, such as recession or increasing interest rates, than are investment grade issuers.
At December 31, 2010, our fixed income investment portfolio included belowinvestment grade and non-rated securities which, in total, comprised approximately 14 percent of our fixed income portfolio.
Our below-investment grade and non-rated portfolio includes approximately 650 issuers, with the greatest single exposure being $72 million.
We manage high yield bonds as a distinct and separate asset class from investment grade bonds.
The allocation to high yield bonds is explicitly set by internal management and is targeted to securities in the upper tier of credit quality (BB/B).
Our minimum rating for initial purchase is BB/B.
Six external investment managers are responsible for high yield security selection and portfolio construction.
Our high yield managers have a conservative approach to credit selection and very low historical default experience.
Holdings are highly diversified across industries and subject to a 1.5 percent issuer limit as a percentage of high yield allocation.
We monitor position limits daily through an internal compliance system.
Derivative and structured securities (e. g.  credit default swaps and collateralized mortgage obligations) are not permitted in the high-yield portfolio.


Table of Contents ADOBE INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Stock Options The 2003 Plan allows us to grant options to all employees, including executive officers, outside consultants and nonemployee directors.
This plan will continue until the earlier of (i) termination by the Board or (ii) the date on which all of the shares available for issuance under the plan have been issued and restrictions on issued shares have lapsed.
Option vesting periods used in the past were generally four years and expire seven years from the effective date of grant.
We eliminated the use of stock option grants for all employees and non-employee directors but may choose to issue stock options in the future.
Performance Share Programs Our 2018, 2017 and 2016 Performance Share Programs aim to help focus key employees on building stockholder value, provide significant award potential for achieving outstanding Company performance and enhance the ability of the Company to attract and retain highly talented and competent individuals.
The Executive Compensation Committee of our Board of Directors approves the terms of each of our Performance Share Programs, including the award calculation methodology, under the terms of our 2003 Plan.
Shares may be earned based on the achievement of an objective relative total stockholder return measured over a three-year performance period.
Performance share awards will be awarded and fully vest upon the later of the Executive Compensation Committee's certification of the level of achievement or the three-year anniversary of each grant.
Program participants generally have the ability to receive up to 200% of the target number of shares originally granted.
On January 24, 2018, the Executive Compensation Committee approved the 2018 Performance Share Program, the terms of which are similar to prior year performance share programs as discussed above.
As of November 30, 2018, the shares awarded under our 2018, 2017 and 2016 Performance Share Programs are yet to be achieved.
Issuance of Shares Upon exercise of stock options, vesting of restricted stock units and performance shares, and purchases of shares under the ESPP, we will issue treasury stock.
If treasury stock is not available, common stock will be issued.
In order to minimize the impact of on-going dilution from exercises of stock options and vesting of restricted stock units and performance shares, we instituted a stock repurchase program.
See Note 12 for information regarding our stock repurchase programs.
Valuation of Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the fair value of the award.
Our performance share awards are valued using a Monte Carlo Simulation model.
The fair value of the awards are fixed at grant date and amortized over the longer of the remaining performance or service period.
We use the Black-Scholes option pricing model to determine the fair value of ESPP shares.
The determination of the fair value of stock-based payment awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables.
These variables include our expected stock price volatility over the expected term of the awards, actual and projected employee stock option exercise behaviors, a risk-free interest rate and any expected dividends.
The expected term of ESPP shares is the average of the remaining purchase periods under each offering period.
The assumptions used to value employee stock purchase rights were as follows:


| (Millions of dollars) 2017 2016 | Caterpillar dealer performance guarantees | Customer loan guarantees | Supplier consortium performance guarantees | Third party logistics business lease guarantees | Other guarantees | Total guarantees |


| 2015 2014 2013 | Cash provided by operating activities | Purchases of property and equipment | Proceeds from sales of property and equipment | Free cash flow |


Income taxes paid in 2011, 2010 and 2009 were $2.7 billion, $1.6 billion and $958 million, respectively.
Stock option exercises did not have a significant impact on taxes paid in 2011, 2010 or 2009.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


| In millions 2006 2005 2004 | Printing Papers | Industrial Packaging | Consumer Packaging | Distribution | Forest Products | Subtotal | Corporate and other | Total from continuing operations | In millions | Insurance settlements | Income recognized | Cash settlements received, net |


| Average Daily Paid Print Circulation-1 Total Paid Subscribers for Combined Masthead (Print and Digital)(2) Total Monthly Audience for Combined Masthead (Print and Digital)(3) | The Australian (Mon – Fri) | The Weekend Australian (Sat) | The Daily Telegraph (Mon – Sat) | The Sunday Telegraph | Herald Sun (Mon – Sat) | Sunday Herald Sun | The Courier Mail (Mon – Sat) | The Sunday Mail | The Advertiser (Mon – Sat) | Sunday Mail |


(1) Unrealized gains or losses on short-term investments, restricted cash and short-term investments and derivatives qualifying for hedge accounting are recorded in accumulated other comprehensive income (loss) at each measurement date.
(2) The Company’s short-term investments mature in one year or less except for $250 million of bank notes/certificates of deposit/time deposits, $511 million of U. S.  Government agency investments and $2.1 billion of corporate obligations.


| Grant Year Grant Date Expected Life Expected Volatility Expected Dividend Yield Risk Free Interest Rate Weighted-Average Grant Date Fair Value Per Share | 2013 | 2012 | 2011 |


| 2011 2010 | Notes | Capital lease obligations | Total debt and capital lease obligations | Less: current portion | Debt and capital lease obligations | Volatility Factor | 10% Lower | (dollars in millions) | Expected Life in Years | Average minus approximately 1.5 years | Average – 2.4 years | Average plus approximately 1.6 years |


| 2014 2013 | Unrecognized tax benefit at January 1 | No activity | Unrecognized tax benefit at December 31 |


| Balance at January 1, 2012 $158,578 | Increases in current period tax positions | Decreases in prior period measurement of tax positions | Balance at December 31, 2012 | Increases in current period tax positions | Decreases in prior period measurement of tax positions | Balance at December 31, 2013 |


Note 20: Segment Information The Company’s operating segments are comprised of the revenue-generating components of its businesses for which separate financial information is internally produced and regularly used by management to make operating decisions and assess performance.
The Company operates its businesses primarily through one reportable segment, the Regulated Businesses segment.
The Company also operates market-based businesses that provide a broad range of related and complementary water and wastewater services within non-reportable operating segments, collectively referred to as the Market-Based Businesses.
The Regulated Businesses segment is the largest component of the Company’s business and includes 20 subsidiaries that provide water and wastewater services to customers in 16 states.
The Company’s primary Market-Based Businesses include the Homeowner Services Group, which provides warranty protection programs to residential and smaller commercial customers; the Military Services Group, which provides water and wastewater services to the U. S.  government on military installations; and Keystone, which provides water transfer services for shale natural gas exploration and production companies.
Supplementary Information on Oil and Gas Producing Activities (Unaudited) The supplementary information is disclosed by the following geographic areas: the United States; Europe, which primarily includes activities in the United Kingdom, Ireland and Norway; Africa, which primarily includes activities in Angola, Equatorial Guinea, Gabon and Libya; and Other International, which includes activities in Canada, and other international locations outside of Europe and Africa.
Discontinued operations represent Marathon’s Russian oil exploration and production businesses that were sold in 2006.


Goodwill Impairment As previously discussed in Critical Accounting Policies, Estimates and Judgments in Item 7, we perform impairment tests for goodwill as of November 30 each year, or when evidence of potential impairment exists.
We record a charge to operations when we determine that an impairment has occurred.
Except for long-term debt, the carrying amounts of the Company’s other financial instruments are measured at fair value or approximate fair value due to the short-term nature of these instruments.
Asset Retirement Obligations—The Company records all known asset retirement obligations within other current liabilities for which the liability’s fair value can be reasonably estimated, including certain asbestos removal, asset decommissioning and contractual lease restoration obligations.
The changes in the asset retirement obligation carrying amounts during 2011, 2010 and 2009 were as follows:


| Balance as of September 30, 2007 $475 | Increases related to tax positions taken during a prior period | Decreases related to tax positions taken during a prior period | Increases related to tax positions taken during the current period | Decreases related to settlements with taxing authorities | Decreases related to expiration of statute of limitations | Balance as of September 27, 2008 |


Additional Disclosures for Derivative Instruments.
In March 2008, the FASB issued authoritative guidance for derivative instruments and hedging activities, which requires enhanced disclosures on derivative instruments and hedged items.
On January 1, 2009, the Company adopted the additional disclosure for the equity index put options.
No comparative information for periods prior to the effective date was required.
This guidance had no impact on how the Company records its derivatives.


In June 2009, the FASB issued guidance on accounting for transfers of financial assets.
This guidance amends various components of the existing guidance governing sale accounting, including the recognition of assets obtained and liabilities assumed as a result of a transfer, and considerations of effective control by a transferor over transferred assets.
In addition, this guidance removes the exemption for qualifying special purpose entities from the consolidation guidance.
This guidance is effective January 1, 2010, with early adoption prohibited.
While the amended guidance governing sale accounting is applied on a prospective basis, the removal of the qualifying special purpose entity exception will require us to evaluate certain entities for consolidation.
While we are evaluating the effect of adoption of this guidance, we currently believe that its adoption will not have a material impact on our consolidated financial statement.


CASH FROM OPERATING ACTIVITIES – Cash provided by operations, which consists primarily of cash received from customers, decreased $75.0 million from fiscal year 2010.
Cash payments for representation and warranty obligations of our discontinued mortgage business totaled $61.9 million in fiscal year 2011, compared to $18.4 million in fiscal year 2010 and $36.5 million in fiscal year 2009.
Restricted Cash.
We hold certain cash balances that are restricted as to use.
Cash and cash equivalents – restricted totaled $48.4 million at April 30, 2011, and primarily consisted of cash held by our captive insurance subsidiary that will be used to pay claims.
CASH FROM INVESTING ACTIVITIES – Changes in cash provided by investing activities primarily relate to the following: Purchases of Available-for-Sale Securities.
During fiscal year 2011, HRB Bank purchased $138.8 million in mortgage-backed securities forregulatory purposes.
See additional discussion in Item 8, note 4 to the consolidated financial statements.
Mortgage Loans Held for Investment.
We received net proceeds of $58.5 million, $72.8 million and $91.3 million on our mortgage loans held for investment in fiscal years 2011, 2010 and 2009, respectively.
Purchases of Property and Equipment.
Total cash paid for property and equipment was $63.0 million, $90.5 million and $97.9 million for fiscal years 2011, 2010 and 2009, respectively.
Business Acquisitions.
Total cash paid for acquisitions was $54.2 million, $10.5 million and $293.8 million during fiscal years 2011, 2010 and 2009, respectively.
In July 2010 our Business Services segment acquired Caturano, a Boston-based accounting firm, and cash used in investing activities includes payments totaling $32.6 million related to this acquisition.
See additional discussion in Item 8, note 2 to the consolidated financial statements.
In November 2008, we acquired our last major independent franchise operator for an aggregate purchase price of $279.2 million.
In October 2010, we signed a definitive merger agreement to acquire all of the outstanding shares of 2SS Holdings, Inc.  (“2SS”), developer of TaxACT digital tax preparation solutions, for $287.5 million in cash.
Completion of the transaction is subject to the satisfaction of customary closing conditions, including regulatory approval.
In May 2011, the United States Department of Justice (the “DOJ”) filed a civil antitrust lawsuit to block our proposed acquisition of 2SS.
On June 21, 2011, the parties to the merger agreement signed an


| Before Adoption of SFAS No. 158 Adjustments (In thousands) After Adoption of SFAS No. 158 | Accumulated other comprehensive income | Total stockholders’ equity |


| 2011 2010 | Deferred tax assets: | Acquired technology | Reserves and accruals | Deferred revenue | Unrealized losses on investments | Stock-based compensation | Net operating loss of acquired companies | Credit carryforwards | Capitalized expenses | Other | Total gross deferred tax assets | Deferred tax asset valuation allowance | Total deferred tax assets | Deferred tax liabilities: | Depreciation and amortization | Undistributed earnings of foreign subsidiaries | Acquired intangible assets | Total deferred tax liabilities | Net deferred tax (liabilities) assets |


| Aircraft manufacturing and outfitting $68 | Pre-owned aircraft | Aircraft services | SG&A/other | Total increase in operating earnings |


| As of October 31, | 2019 | Dollars in millions | Short-term debt | Long-term debt | Weighted-average interest rate | Shares (in millions) | Balance at November 30, 2015 | RSAs/RSUs assumed | Granted | Vested | Forfeited | Balance at November 30, 2016 |


| Noninvestment-grade Collateral held against | As of December 31, 2004 | (in millions, except ratios) | Top 10 industries(a)Banks and finance companies | Real estate | Consumer products | Healthcare | State and municipal governments | Utilities | Retail and consumer services | Oil and gas | Asset managers | Securities firms and exchanges | All other | Total excluding HFS | Held-for-sale(c) | Total exposure |


Entergy Corporation and Subsidiaries Notes to Financial Statements 171 Ouachita In September 2008, Entergy Arkansas purchased the Ouachita Plant, a 789 MW three-train gas-fired combined cycle generating turbine (CCGT) electric power plant located 20 miles south of the Arkansas state line near Sterlington, Louisiana, for approximately $210 million from a subsidiary of Cogentrix Energy, Inc.  Entergy Arkansas received the plant, materials and supplies, and related real estate in the transaction.
The FERC and the APSC approved the acquisition.
The APSC also approved the recovery of the acquisition and ownership costs through a rate rider and the planned sale of one-third of the capacity and energy to Entergy Gulf States Louisiana.
The LPSC also approved the purchase of one-third of the capacity and energy by Entergy Gulf States Louisiana, subject to certain conditions, including a study to determine the costs and benefits of Entergy Gulf States Louisiana exercising an option to purchase one-third of the plant (Unit 3) from Entergy Arkansas.
Entergy Gulf States Louisiana is scheduled to report the results of that study by March 30, 2009.
Palisades In April 2007, Entergy's Non-Utility Nuclear business purchased the 798 MW Palisades nuclear energy plant located near South Haven, Michigan from Consumers Energy Company for a net cash payment of $336 million.
Entergy received the plant, nuclear fuel, inventories, and other assets.
The liability to decommission the plant, as well as related decommissioning trust funds, was also transferred to Entergy's Non-Utility Nuclear business.
Entergy's Non-Utility Nuclear business executed a unit-contingent, 15-year purchased power agreement (PPA) with Consumers Energy for 100% of the plant's output, excluding any future uprates.
Prices under the PPA range from $43.50/MWh in 2007 to $61.50/MWh in 2022, and the average price under the PPA is $51/MWh.
In the first quarter 2007, the NRC renewed Palisades' operating license until 2031.
As part of the transaction, Entergy's NonUtility Nuclear business assumed responsibility for spent fuel at the decommissioned Big Rock Point nuclear plant, which is located near Charlevoix, Michigan.
Palisades' financial results since April 2007 are included in Entergy's Non-Utility Nuclear business segment.
The following table summarizes the assets acquired and liabilities assumed at the date of acquisition.


Note D — Short-Term Borrowing In October 2011, Con Edison and the Utilities entered into a Credit Agreement (Credit Agreement), under which banks are committed to provide loans and letters of credit on a revolving credit basis, and terminated their Amended and Restated Credit Agreement (Prior Credit Agreement) which was to expire in June 2012.
Under the Credit Agreement, which expires in October 2016, there is a maximum of $2.25 billion of credit available, with the full amount available to CECONY and $1 billion available to Con Edison, including up to $1.2 billion of letters of credit.
The Credit Agreement supports the Companies’ commercial paper programs.
The Companies have not borrowed under the Credit Agreement.
At December 31, 2011 and 2010, Con Edison and CECONY had no commercial paper outstanding.
The banks’ commitments under the Credit Agreement are subject to certain conditions, including that there be no event of default.
The commitments are not subject to maintenance of credit rating levels or the absence of a material adverse change.
Upon a change of control of, or upon an event of default by one of the Companies, the banks may terminate their commitments with respect to that company, declare any amounts owed by that company under the Credit Agreement immediately due and payable and require that company to provide cash collateral relating to the letters of credit issued for it under the Credit Agreement.
Events of default include the exceeding at any time of a ratio of consolidated debt to consolidated total capital of 0.65 to 1 (at December 31, 2011 this ratio was 0.48 to 1 for Con Edison and CECONY); having liens on its assets in an aggregate amount exceeding 5 percent of its consolidated total capital, subject to certain exceptions; and the failure, following any applicable notice period, to meet certain other customary covenants.
Interest and fees charged for the revolving credit facilities and any loans made or letters of credit issued under the Credit Agreement reflect the Companies’ respective credit ratings.


| Years ended December 31, 2010 2009 2008 | Revenue | Operating income | Operating margin |