Note 20 Legal Proceedings and Contingencies Various lawsuits, claims, proceedings and investigations are pending against the Company and certain of its subsidiaries.
In accordance with SFAS No.5, Accounting for Contingencies, the Company records accruals for such contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated.
These matters involve antitrust, securities, patent infringement, pricing, sales and marketing practices, environmental, health and safety matters, product liability and insurance coverage.
The most significant of these matters are described below.
There can be no assurance that there will not be an increase in the scope of these matters or that any future lawsuits, claims, proceedings or investigations will not be material.
Management continues to believe, as previously disclosed, that during the next few years, the aggregate impact, beyond current reserves, of these and other legal matters affecting the Company is reasonably likely to be material to the Company’s results of operations and cash flows, and may be material to its financial condition and liquidity.
The Company’s decision to obtain insurance coverage is dependent on market conditions, including cost and availability, existing at the time such decisions are made.
As a result of external factors, the availability of insurance has become more restrictive while the cost has increased significantly.
The Company has evaluated its risks and has determined that the cost of obtaining insurance outweighs the benefits of coverage protection against losses and as such, became self-insured for product liabilities effective July 1, 2004.
The Company will continue to evaluate these risks and benefits to determine its insurance needs in the future.


producing well and as long as the Company is making sufficient progress assessing the reserves and the economic and operating viability of the project.
For certain capital-intensive deepwater Gulf of Mexico or international projects, it may take the Company more than one year to evaluate the future potential of the exploration well and make a determination of its economic viability.
The Companys ability to move forward on a project may be dependent on gaining access to transportation or processing facilities or obtaining permits and government or partner approval, the timing of which is beyond the Companys control.
In such cases, exploratory well costs remain suspended as long as the Company is actively pursuing access to necessary facilities and access to such permits and approvals and believes they will be obtained.
Management assesses the status of its suspended exploratory well costs on a quarterly basis.
See Note 5  Capitalized Exploratory Well Costs.
 Other Property  Other property includes autos, trucks, airplane, office furniture and computer equipment and other fixed assets.
These items are recorded at cost and are depreciated on the straight-line method based on expected lives of the individual assets or group of assets.
Other Assets Other assets consists of the following at December 31:


Entergy Mississippi, Inc.  Management's Financial Discussion and Analysis 227 Other regulatory charges (credits) have no material effect on net income due to recovery and/or refund of such expenses.
Other regulatory credits increased primarily due to the under-recovery through the Grand Gulf rider of Grand Gulf capacity charges.2003 Compared to 2002 Net revenue, which is Entergy Mississippi's measure of gross margin, consists of operating revenues net of: 1) fuel, fuel-related, and purchased power expenses and 2) other regulatory charges (credits).
Following is an analysis of the change in net revenue comparing 2003 to 2002.


ALM Process Interest rate contracts and foreign exchange contracts are utilized in the Corporation’s ALM process.
The Corporation maintains an overall interest rate risk management strategy that incorporates the use of interest rate contracts to minimize significant fluctuations in earnings that are caused by interest rate volatility.
The Corporation’s goal is to manage interest rate sensitivity so that movements in interest rates do not significantly adversely affect Net Interest Income.
As a result of interest rate fluctuations, hedged fixed-rate assets and liabilities appreciate or depreciate in market value.
Gains or losses on the derivative instruments that are linked to the hedged fixed-rate assets and liabilities are expected to substantially offset this unrealized appreciation or depreciation.
Interest Income and Interest Expense on hedged variable-rate assets and liabilities increase or decrease as a result of interest rate fluctuations.
Gains and losses on the derivative instruments that are linked to these hedged assets and liabilities are expected to substantially offset this variability in earnings.


| December 31, 2009 December 31, 2008 | Fair | Value | U.S. government and agency securities | Corporate notes and bonds | Municipal securities | Mortgage-backed securities | Asset-backed securities | Foreign government bonds | Commercial paper | Other debt securities | Equity securities | $973.9 |


| Fiscal2014 Fiscal2013 Fiscal2012 | Euro | Yen (in billions) | British Pounds |


| Year Ended December | in millions | Equity securities | Debt securities and loans | Other | Total net revenues | Operating expenses | Pre-tax earnings/(loss) |


| As of December 31, | (in millions, except ratio data) | BALANCE SHEET DATA: | Total assets | Loans held for sale, at fair value | Other loans held for sale | Loans and leases | Allowance for loan and lease losses | Total securities | Goodwill | Total liabilities | Total deposits | Federal funds purchased and securities sold under agreements to repurchase | Other short-term borrowed funds | Long-term borrowed funds | Total stockholders’ equity | OTHER BALANCE SHEET DATA: | Asset Quality Ratios: | Allowance for loan and lease losses as a % of total loans and leases | Allowance for loan and lease losses as a % of nonperforming loans and leases | Nonperforming loans and leases as a % of total loans and leases | Capital Ratios:-5 | CET1 capital ratio-6 | Tier 1 capital ratio-7 | Total capital ratio-8 | Tier 1 leverage ratio-9 |


Note 24 – Capital 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 FRB, 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 on–balance sheet assets).
Failure to meet these minimum requirements could cause the FRB to take action.
Bank subsidiaries also are subject to these capital requirements by their respective primary regulators.
As of December 31, 2005 and 2004, JPMorgan Chase and all of its banking subsidiaries were well-capitalized and met all capital requirements to which each was subject.


At December 31, 2014, there was $401 million of total pretax unrecognized compensation expense related to nonvested stock options, RSU and PSU awards which will be recognized over a weighted average period of 1.9 years.
For segment reporting, share-based compensation costs are unallocated expenses.13.


NIKE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) such agreements in place.
However, based on the Company’s historical experience and the estimated probability of future loss, the Company has determined that the fair value of such indemnifications is not material to the Company’s financial position or results of operations.
In the ordinary course of its business, the Company is involved in various legal proceedings involving contractual and employment relationships, product liability claims, trademark rights, and a variety of other matters.
The Company does not believe there are any pending legal proceedings that will have a material impact on the Company’s financial position or results of operations.
Note 16 — Restructuring Charges During the fourth quarter of fiscal 2009, the Company took necessary steps to streamline its management structure, enhance consumer focus, drive innovation more quickly to market and establish a more scalable, long-term cost structure.
As a result, the Company reduced its global workforce by approximately 5% and incurred pre-tax restructuring charges of $195 million, primarily consisting of severance costs related to the workforce reduction.
As nearly all of the restructuring activities were completed in the fourth quarter of fiscal 2009, the Company does not expect to recognize additional costs in future periods relating to these actions.
The restructuring charge is reflected in the corporate expense line in the segment presentation of pre-tax income in Note 19 — Operating Segments and Related Information.
The activity in the restructuring accrual for the year ended May 31, 2009 is as follows (in millions):


| 2010 Period-to- Period Change 2009 Period-to- Period Change 2008 | Labor and related benefits | Professional fees | Provision for bad debts | Other | $1,461 |


| As of December 31, | 2006 | Balance Sheet Data(at end of period): | Cash and cash equivalents | Total assets | Total long-term debt | Minority interest | Total stockholders’ equity |


Rupture in Note H to the financial statements in Item 8) ($14 million), offset in part by surcharges for assessments and fees that are collected in revenues from customers ($4 million) and lower municipal infrastructure support costs ($2 million).
Depreciation and amortization increased $2 million in 2018 compared with 2017 due primarily to higher steam utility plant balances.
Taxes, other than income taxes increased $14 million in 2018 compared with 2017 due primarily to higher property taxes ($13 million) and state and local taxes ($2 million), offset in part by a sales and use tax refund ($1 million).
Taxes, Other Than Income Taxes At $2,156 million, taxes other than income taxes remain one of CECONY’s largest operating expenses.
The principal components of, and variations in, taxes other than income taxes were:


| Trusts Face Value Maturity Date Annual Interest Rate | ETBH Capital Trust II | ETBH Capital Trust I | ETBH Capital Trust V, VI, VIII | ETBH Capital Trust VII, IX—XII | ETBH Capital Trust XIII—XVIII, XX | ETBH Capital Trust XIX, XXI, XXII | ETBH Capital Trust XXIII—XXIV | ETBH Capital Trust XXV—XXX | Total |


CAPITAL RESOURCES AND LIQUIDITY 100 www.
thehartford.
com Off-balance Sheet Arrangements and Aggregate Contractual Obligations The Company does not have any off-balance sheet arrangements that are reasonably likely to have a material effect on the financial condition, results of operations, liquidity, or capital resources of the Company, except for the contingent capital facility described above, as well as unfunded commitments to purchase investments in limited partnerships and other alternative investments, private placements, and mortgage loans as disclosed in Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements.


| Federal funds purchased and securities sold under | agreements to | repurchase-2 | In billions of dollars | Amounts outstanding at year end | Average outstanding during the year-5 | Maximum month-end outstanding | Weighted-average interest rate | During the year-5(6) | At year end-7 |


PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements entities.
This analysis includes a review of (1) the Company’s rights and responsibilities as investment manager and (2) variable interests (if any) held by the Company.
The assets of these VIEs are restricted and must be used first to settle liabilities of the VIE.
The Company is not required to provide, and has not provided, material financial or other support to any of these VIEs.
Effective January 1, 2016, the Company adopted new FASB guidance (ASU 2015-02, Consolidation (Topic 810): Amendments to Consolidation Analysis) that resulted in the deconsolidation of certain of its previously consolidated CLOs.
See Note 2 for additional information.
Additionally, the Company is the primary beneficiary of certain VIEs in which the Company has invested, as part of its investment activities, but for which it is not the investment manager.
These include structured investments issued by a VIE that manages yen-denominated investments coupled with cross-currency coupon swap agreements thereby creating synthetic dual currency investments.
The Company’s involvement in the structuring of these investments combined with its economic interest indicates that the Company is the primary beneficiary.
The Company has not provided material financial support or other support that was not contractually required to these VIEs.
The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported.
The liabilities primarily comprise obligations under debt instruments issued by the VIEs that are non-recourse to the Company.
The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIEs.


Certain products the Company sells are accounted for as freestanding derivatives or contain embedded derivatives.
Changes in the fair value of these derivatives, along with any fees received or payments made relating to the derivative, are recorded in Realized investment gains (losses), net.
 These Realized investment gains (losses), net are included in adjusted operating income in the period in which the gain or loss is recorded.
In addition, the changes in fair value of any associated derivative portfolio that is part of an economic hedging program related to the risk of these products (but which do not qualify for hedge accounting treatment under U. S.  GAAP) are also included in adjusted operating income in the period in which the gains or losses on the derivative portfolio are recorded.
Adjusted operating income includes net gains of $376 million, net losses of $456 million and net gains of $46 million for the years ended December 31, 2009, 2008, and 2007, respectively, related to these products and any associated derivative portfolio.
Adjustments are also made for the purposes of calculating adjusted operating income for the following items: The Company conducts certain activities for which Realized investment gains (losses), net are a principal source of earnings for its businesses and therefore included in adjusted operating income, particularly within the Companys Asset Management segment.
For example, Asset Managements proprietary investing business makes investments for sale or syndication to other investors or for placement or co-investment in the Companys managed funds and structured products.
The Realized investment gains (losses), net associated with the sale of these proprietary investments, as well as related derivative results, are a principal activity for this business and included in adjusted operating income.
In addition, the Realized investment gains (losses), net associated with loans originated by the Companys commercial mortgage operations, as well as related derivative results and retained mortgage servicing rights, are a principal activity for this business and included in adjusted operating income.
Net realized investment losses of $274 million, gains of $66 million and losses of $22 million for the years ended December 31, 2009, 2008, and 2007, respectively, related to these and other businesses were included in adjusted operating income as an adjustment to Realized investment gains (losses), net.


| Type of expense Total estimated amount expected to be incurred | Termination benefits | Other exit costs-1 | Restructuring charges | Restructuring related charges-2 | $46 million to $51 million |


| 2019 $294,269 | 2020 | 2021 | 2022 | 2023 | Thereafter | Future Minimum Lease Payments | December 31, 2010 | Financial Services Businesses | Gross Carrying Value | ($ in millions) | Commercial and agricultural mortgage loans by region: | U.S. Regions: | Pacific | South Atlantic | Middle Atlantic | East North Central | West South Central | Mountain | New England | West North Central | East South Central | Subtotal—U.S. | Asia | Other | Total commercial and agricultural mortgage loans | December 31, 2010 | Financial Services Businesses | Gross Carrying Value | ($ in millions) | Commercial and agricultural mortgage loans by property type: | Industrial buildings | Retail stores | Office buildings | Apartments/Multi-family | Other | Hospitality | Agricultural properties | Total commercial and agricultural mortgage loans |


The fair value of Stock Options is estimated on the date of grant using a binomial lattice model.
Significant assumptions used in the Companys binomial lattice model, which are further described below, include: expected volatility of the price of the Holding Companys common stock; risk-free rate of return; expected dividend yield on the Holding Companys common stock; exercise multiple; and the postvesting termination rate.
Expected volatility is based upon an analysis of historical prices of the Holding Companys common stock and call options on that common stock traded on the open market.
The Company uses a weighted-average of the implied volatility for publicly-traded call options with the longest remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using monthly closing prices of the Holding Companys common stock.
The Company chose a monthly measurement interval for historical volatility as it believes this better depicts the nature of employee option exercise decisions being based on longer-term trends in the price of the underlying shares rather than on daily price movements.
The binomial lattice model used by the Company incorporates different risk-free rates based on the imputed forward rates for U. S.  Treasury Strips for each year over the contractual term of the option.
The table below presents the full range of rates that were used for options granted during the respective periods.
Dividend yield is determined based on historical dividend distributions compared to the price of the underlying common stock as of the valuation date and held constant over the life of the Stock Option.


| 2006 2005 2004 | Shares | Deferred Compensation Obligations | Balance at beginning of year | Reinvested dividends | Option exercise deferrals | Benefit payments | Balance at end of year | Treasury Stock | Balance at beginning of year | Reinvested dividends | Option exercise deferrals | Benefit payments | Balance at end of year |


| Years Ended December 31 2016 2015 2014 | (In millions) | Net earned premiums | Net investment income | Net operating loss | Net realized investment gains | Net loss from continuing operations |


develop risk management practices, such as an information security program and a supplier program to ensure that suppliers adopt appropriate policies and procedures when performing work on our behalf.
These specialized groups also assist the lines of business in the development and implementation of risk management practices specific to the needs of the individual businesses.
These groups also work with line of business executives and risk executives to develop and guide appropriate strategies, policies, practices, controls and monitoring tools for each line of business.
Additionally, where appropriate, we purchase insurance policies to mitigate the impact of operational losses when and if they occur.
These insurance policies are explicitly incorporated in the structural features of our operational risk evaluation.
As insurance recoveries, especially given recent market events, are subject to legal and financial uncertainty, the inclusion of these insurance policies are subject to reductions in the mitigating benefits expected within our operational risk evaluation.
The lines of business are responsible for all the risks within the business line, including operational risks.
Operational risk executives, working in conjunction with senior line of business executives, have developed key tools to help identify, measure, mitigate and monitor risk in each line of business.
Examples of these include personnel management practices, data reconciliation processes, fraud management units, transaction processing monitoring and analysis, business recovery planning and new product introduction processes.
In addition, the lines of business are responsible for monitoring adherence to corporate practices.
Line of business management uses a self-assessment process, which helps to identify and evaluate the status of risk and control issues, including mitigation plans, as appropriate.
The goal of the self-assessment process is to periodically assess changing market and business conditions, to evaluate key risks impacting each line of business and assess the controls in place to mitigate the risks.
In addition to information gathered from the self-assessment process, key operational risk indicators have been developed and are used to help identify trends and issues on both an enterprise and a line of business level.


| Locomotives Owned Leased Total AverageAge (yrs.) | Road | Switching | Other | Total locomotives |


Effective January 1, 2018, we adopted new accounting guidance issued by the FASB related to the presentation of net periodic pension and OPEB costs.
This guidance requires that an employer disaggregate the service cost component from the other components of net benefit cost.
Service cost is required to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period.
The other components of net benefit cost are required to be reported outside the subtotal for income from operations.
As a result, components of pension and OPEB costs, other than service costs, will be reclassified from operating costs to other income/expense.
This change will be applied retrospectively to prior years.
In the fourth quarter of 2017, the company reviewed and made changes to the mortality assumptions primarily for our U. S.  pension plans which resulted in an overall increase in the life expectancy of plan participants.
As of December 31, 2017 these changes resulted in an increase in our Liability for postemployment benefits of approximately $290 million.
In the fourth quarter of 2016, the company adopted new mortality improvement scales released by the SoA for our U. S.  pension and OPEB plans.
As of December 31, 2016, this resulted in an increase in our Liability for postemployment benefits of approximately $200 million.
In the first quarter of 2017, we announced the closure of our Gosselies, Belgium facility.
This announcement impacted certain employees that participated in a defined benefit pension plan and resulted in a curtailment and the recognition of termination benefits.
In March 2017, we recognized a net loss of $20 million for the curtailment and termination benefits.
In addition, we announced the decision to phase out production at our Aurora, Illinois, facility, which resulted in termination benefits of $9 million for certain hourly employees that participate in our U. S.  hourly defined benefit pension plan.
Beginning in 2016, we elected to utilize a full yield curve approach in the estimation of service and interest costs by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.
Service and interest costs in 2017 and 2016 were lower by $140 million and $180 million, respectively, under the new method than they would have been under the previous method.
This change had no impact on our year-end defined benefit pension and OPEB obligations or our annual net periodic benefit cost as the lower service and interest costs were entirely offset in the actuarial loss (gain) reported for the respective year.
We expect our total defined benefit pension and OPEB expense (excluding the impact of mark-to-market gains and losses) to decrease approximately $80 million in 2018.
This decrease is primarily due to a higher expected return on plan assets as a result of a higher asset base in 2018.
In general, our strategy for both the U. S.  and the non-U.
S.  pensions includes ongoing alignment of our investments to our liabilities, while reducing risk in our portfolio.
For our U. S.  pension plans, our year-end 2017 asset allocation was 34?percent equities, 62?percent fixed income and 4 percent other.
Our current U. S.  pension target asset allocation is 30 percent equities and 70 percent fixed income.
The target allocation is revisited periodically to ensure it reflects our overall objectives.
The U. S.  plans are rebalanced to plus or minus 5 percentage points of the target asset allocation ranges on a monthly basis.
The year-end 2017 asset allocation for our non-U.
S.  pension plans was 40?percent equities, 53?percent fixed income, 4?percent real estate and 3 percent other.
The 2017 weighted-average target allocations for our non-U.
S.  pension plans was 38?percent equities, 54?percent fixed income, 5?percent real estate and 3?percent other.
The target allocations for each plan vary based upon local statutory requirements, demographics of the plan participants and funded status.
The frequency of rebalancing for the non-U.
S.  plans varies depending on the plan.
Contributions to our pension and OPEB plans were $1.6 billion and $329 million in 2017 and 2016, respectively.
The 2017 contributions include a $1.0 billion discretionary contribution made to our U. S.  pension plans in December 2017.
We expect to make approximately $365 million of contributions to our pension and OPEB plans in 2018.
We believe we have adequate resources to fund both pension and OPEB plans.


| 2009 2008 2007 | Cost of revenues | Research and development | Selling and marketing | General and administrative | Restructuring charge | $32,939 |


| As of December 31, 2003 MaximumPotentialPayments EstimatedProceedsfromCollateral/Recourse CarryingAmount ofLiabilities* | Contingent repurchase commitments | Trade-in commitments | Asset-related guarantees | Credit guarantees related to the Sea Launch venture | Other credit guarantees | Equipment trust certificates | Performance guarantees |


| Years Ended December 31, | 2013 | (in millions) | Revenues | Management and financial advice fees | Distribution fees | Net investment income | Premiums | Other revenues | Total revenues | Banking and deposit interest expense | Total net revenues | Expenses | Distribution expenses | Interest credited to fixed accounts | Benefits, claims, losses and settlement expenses | Amortization of deferred acquisition costs | Interest and debt expense | General and administrative expense | Total expenses | Income from continuing operations before income tax provision | Income tax provision | Income from continuing operations | Loss from discontinued operations, net of tax | Net income | Less: Net income (loss) attributable to noncontrolling interests | Net income attributable to Ameriprise Financial |


| Restructuring Charges( In Thousands) Positions Affected | 2011 | Flavors | Fragrances | Global | Total |


Selling, General and Administrative Expenses.
Selling, general and administrative expenses consist primarily of personnel-related costs, restructuring costs, corporate costs, fees for professional and consulting services, advertising costs, and other costs of administration.
Advertising.
Advertising costs, which are expensed as incurred, totaled $63.6 million, $65.1 million and $57.1 million during 2016, 2015 and 2014, respectively.
Stock-Based Compensation.
We recognize the cost of stock-based payment transactions in the financial statements over the period services are rendered according to the fair value of the stock-based awards issued.
All of our stock-based awards, which are stock options and nonvested stock, are classified as equity instruments.
Income Taxes.
We account for income taxes under the liability method.
We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are expected to be paid.
Deferred income tax assets and liabilities are recorded based on the differences between the financial reporting and income tax bases of assets and liabilities.
We assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred tax assets.
We record a valuation allowance, as necessary, to reduce our deferred tax assets to the amount of future tax benefit that we estimate is more likely than not to be realized.
We record tax benefits for positions that we believe are more likely than not of being sustained under audit examinations.
We assess the potential outcome of such examinations to determine the adequacy of our income tax accruals.
We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes on our Consolidated Statements of Income.
We adjust our income tax provision during the period in which we determine that the actual results of the examinations may differ from our estimates or when statutory terms expire.
Changes in tax laws and rates are reflected in our income tax provision in the period in which they occur.
Earnings Per Share.
Our basic earnings per share, or EPS, is calculated as net income divided by the weightedaverage number of common shares outstanding during the reporting period.
Diluted EPS is calculated to reflect the potential dilution that would occur if stock options or other contracts to issue common stock were exercised and resulted in additional common shares outstanding.
The net income amounts used in both our basic and diluted EPS calculations are the same.
A reconciliation of the weightedaverage outstanding shares used in the two calculations is


| 2018 2017 2016 2015 2014 | (In millions, except per share data) | COMMON STOCK DATA | Common equity book value per share | Tangible common book value per share (non-GAAP)(2) | Market value at year-end | Total trading volume (shares) | Dividend payout ratio | Stockholders of record at year-end (actual) | Weighted-average number of common shares outstanding | Basic | Diluted |


Domestic utility companies and System Energy Notes to Respective Financial Statements (b) In 2003, the domestic utility companies and System Energy filed, with the IRS, a change in tax accounting method notification for their respective calculations of cost of goods sold.
The adjustment implemented a simplified method of allocation of overhead to the production of electricity, which is provided under the IRS capitalization regulations.
The cumulative adjustment placing these companies on the new methodology resulted in a $1.171 billion deduction for Entergy Arkansas, a $674 million deduction for Entergy Gulf States, a $505 million deduction for Entergy Louisiana, a $145 million deduction for Entergy Mississippi, a $31 million deduction for Entergy New Orleans, and a $430 million deduction for System Energy on Entergy's 2003 income tax return.
There was no cash benefit from the method change in 2003.
In 2004, Entergy Arkansas realized $173 million, Entergy Gulf States realized $69 million, Entergy Louisiana realized $100 million, Entergy Mississippi realized $36 million, and System Energy realized $144 million in cash tax benefit from the method change.
This tax accounting method change is an issue across the utility industry and will likely be challenged by the IRS on audit.
Entergy believes that its contingency provision established in its financial statements will sufficiently cover its risk associated with this issue.
Total income taxes differ from the amounts computed by applying the statutory income tax rate to income before taxes.
The reasons for the differences for the years 2004, 2003, and 2002 are:


| December 31 | (Dollars in millions) | Consumer | Residential mortgage-2 | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer | Other consumer | Total consumer | Commercial | U.S. commercial | Commercial real estate | Commercial lease financing | Non-U.S. commercial | 96 | U.S. small business commercial | Total commercial | Total accruing loans and leases past due 90 days or more-3 |


| December 31, 2007 December 31, 2006 | Type | (In millions) | Real estate | Real estate joint ventures | Foreclosed real estate | 6,597 | Real estate held-for-sale | Total real estate holdings |


| 2014 | First Quarter | (In millions, except per share amounts) | Operating revenues | Earnings (loss) before income taxes | Net earnings (loss) attributable to Devon | Basic net earnings (loss) per share attributable to Devon | Diluted net earnings (loss) per share attributable to Devon | 2013 | First Quarter | (In millions, except per share amounts) | Operating revenues | Earnings (loss) before income taxes | Net earnings (loss) attributable to Devon | Basic net earnings (loss) per share attributable to Devon | Diluted net earnings (loss) per share attributable to Devon |


Our direct exposure to subprime mortgage lending is limited to investment in residential mortgage-backed securities and asset-backed securities backed by home equity loans.
The fair value of securities backed by Alt-A and subprime loans was $5.5 million at December 31, 2009 and $7.6 million at December 31, 2008.
There are no collateralized debt obligations or structured investment vehicles in our investment portfolio.
The percentage of corporate securities associated with the financial services industry was 37.3% at December 31, 2009 and 41.7% at December 31, 2008.
Duration is indicative of the relationship between changes in market value and changes in interest rates, providing a general indication of the sensitivity of the fair values of our debt securities to changes in interest rates.
However, actual market values may differ significantly from estimates based on duration.
The average duration of our debt securities was approximately 4.5 years at December 31, 2009.
Including cash equivalents, the average duration was approximately 3.8 years.
Based on the duration including cash equivalents, a 1% increase in interest rates would generally decrease the fair value of our securities by approximately $340 million.
Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at December 31, 2009 and 2008, respectively:


| Crude Oil, Condensate and NGLs (MMBbls) | United States | Proved Reserves as of: | December 31, 2007 | Revisions of Previous Estimates-2 | Extensions, Discoveries and Other Additions-3 | Purchase of Minerals in Place-4 | Sale of Minerals in Place-5 | Production-6 | December 31, 2008 | Revisions of Previous Estimates-2 | Extensions, Discoveries and Other Additions-3 | Purchase of Minerals in Place-4 | Sale of Minerals in Place-5 | Production-6 | December 31, 2009 | Revisions of Previous Estimates-2 | Extensions, Discoveries and Other Additions-3 | Purchase of Minerals in Place-4 | Sale of Minerals in Place-5 | Production-6 | December 31, 2010 | Proved Developed Reserves as of: | December 31, 2007 | December 31, 2008 | December 31, 2009 | December 31, 2010 | Proved Undeveloped Reserves as of: | December 31, 2007 | December 31, 2008 | December 31, 2009 | December 31, 2010 |


| $ in millions Total-4,5,6 Within 1 Year 1-3 Years 3-5 Years More Than 5 Years | Long-term debt-1 | Estimated interest payments on long-term debt-1 | Operating leases-2 | Purchase obligations-3 | Total |


Delta government launches are excluded from our deliveries after December 1, 2006 due to the formation of ULA.


| 2009 2008 2007 | Recurring tenant improvements | Recurring leasing costs | Building improvements | Totals |


EARNINGS PER SHARE The Company has outstanding two separate classes of common stock.
The Common Stock reflects the performance of the Financial Services Businesses and the Class B Stock reflects the performance of the Closed Block Business.
Accordingly, earnings per share is calculated separately for each of these two classes of common stock.
arithmetic average of prospective returns, which is based upon a risk free rate as of the measurement date adjusted by a risk premium that considers historical statistics and expected investment manager performance, for equity, debt and real estate markets applied on a weighted average basis to our pension asset portfolio.
Giving effect to the foregoing assumptions, we expect on a consolidated basis income from our own qualified pension plan will continue to contribute to adjusted operating income in 2006, but at a level of about $65 million to $75 million below that of the year 2005.
In 2006, pension service costs related to active employees will continue to be allocated to our business segments.
Adjusted operating income of our real estate and relocation services business increased $4 million, from $101 million in 2004 to $105 million in 2005.
The improvement is the result of higher revenues in our real estate franchise operations and higher operating income in our real estate financing business due to increased real estate transaction volumes and home prices.2004 to 2003 Annual Comparison.
Corporate and Other had adjusted operating income of $167 million in 2004 compared to $84 million in 2003.
Adjusted operating income from corporate operations increased by $45 million, from $21 million in 2003 to $66 million in 2004.
Corporate operations includes income from our qualified pension plan of $466 million in 2004, an increase of $94 million from $372 million in 2003, reflecting an increase in the allocation to other segments of pension service costs.
The increase in allocated pension service costs in 2004 was partially offset by a reduction in the allocation to other segments of other benefit costs related to non-active employees that are now retained in corporate operations.
In 2003, Corporate operations general and administrative expenses included $37 million of costs related to a structured financing transaction we entered into prior to our demutualization.
General and administrative expenses, other than this cost, increased $42 million in comparison to 2003, reflecting the reduction in the allocation to other segments of other benefit costs related to non-active employees discussed above.
Our 2004 results reflect an initial $39 million benefit from reduction in postretirement benefit costs relating to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
Corporate operations included $68 million of costs in 2004 from retained obligations relating to policyholders with whom we had previously agreed to provide insurance for reduced or no premium in accordance with contractual settlements related to prior individual life sales practices remediation, as compared to $23 million in 2003.
The costs in 2004 include the impact of a reduction in our policy dividend scale, as discussed above.
Adjusted operating income of our real estate and relocation services increased by $38 million, from $63 million in 2003 to $101 million in 2004.
The improvement is the result of higher revenues in our real estate franchise operations and higher operating income in our real estate financing business due to increased real estate transaction volumes and home prices.


| Fair Value Measurement | Quoted Prices in Active Markets forIdentical Assets(Level 1) | As of December 31, | Balance Sheet Classification | (In $ millions) | Mutual funds | Derivatives Not Designated as Hedges | Foreign currency forwards and swaps | Total assets | Derivatives Designated as Cash Flow Hedges | Interest rate swaps | Interest rate swaps | Derivatives Not Designated as Hedges | Interest rate swaps | Interest rate swaps | Foreign currency forwards and swaps | Total liabilities |


Financial derivatives involve, to varying degrees, interest rate, market and credit risk.
For interest rate swaps and total return swaps, options and futures contracts, only periodic cash payments and, with respect to options, premiums are exchanged.
Therefore, cash requirements and exposure to credit risk are significantly less than the notional amount on these instruments.
Further information on our financial derivatives is presented in Note 1 Accounting Policies and Note 17 Financial Derivatives in the Notes To Consolidated Financial Statements in Item 8 of this Report, which is incorporated here by reference.
Not all elements of interest rate, market and credit risk are addressed through the use of financial or other derivatives, and such instruments may be ineffective for their intended purposes due to unanticipated market changes, among other reasons.
The following table summarizes the notional or contractual amounts and net fair value of financial derivatives at December 31, 2012 and December 31, 2011.
Table 54: Financial Derivatives Summary


| 2010 2009 2008 | New stores | Store-related projects-1 | Information technology | Other | Total capital expenditures |


| Restricted Stock Units Outstanding Weighted Average Grant-DateFair Value of Restricted StockUnits Outstanding | Future Service Required | Outstanding, December 2012 | Granted1, 2 | Forfeited | Delivered3 | Vested2,4 | Outstanding, December 2013 |


| Year Ended December 31, 2014 | Parent | Cash Flows from Operating Activities: | Cash Flows from Operating Activities-Continuing Operations | Cash Flows from Operating Activities-Discontinued Operations | Cash Flows from Operating Activities | Cash Flows from Investing Activities: | Capital expenditures | Cash paid for acquisitions, net of cash acquired | Intercompany loans to subsidiaries | Investment in subsidiaries | Acquisitions of customer relationships and customer inducements | Proceeds from sales of property and equipment and other, net (including real estate) | Cash Flows from Investing Activities-Continuing Operations | Cash Flows from Investing Activities-Discontinued Operations | Cash Flows from Investing Activities | Cash Flows from Financing Activities: | Repayment of revolving credit and term loan facilities and other debt | Proceeds from revolving credit and term loan facilities and other debt | Early retirement of senior subordinated notes | Net proceeds from sales of senior notes | Debt financing (repayment to) and equity contribution from (distribution to) noncontrolling interests, net | Intercompany loans from parent | Equity contribution from parent | Parent cash dividends | Proceeds from exercise of stock options and employee stock purchase plan | Excess tax deficiency from stock-based compensation | Payment of debt financing and stock issuance costs | Cash Flows from Financing Activities-Continuing Operations | Cash Flows from Financing Activities-Discontinued Operations | Cash Flows from Financing Activities | Effect of exchange rates on cash and cash equivalents | Increase (Decrease) in cash and cash equivalents | Cash and cash equivalents, beginning of year | Cash and cash equivalents, end of year |


| Year Ended | September 30, 2009 | ($ in 000's) | Interest Income and Expense | Interest Income | Interest Expense | Net Interest Income | Non-Interest Expenses | Pre-tax Income |


organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses, with the expectation that fewer will qualify as acquisitions (or disposals) of businesses.
The ASU became effective for us on January 1, 2018.
These amendments will be applied prospectively from the date of adoption.
The effect of ASU 2017-01 will be dependent upon the nature of future acquisitions or dispositions that we make, if any.
In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.
” The amendments in this update state that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory, such as intellectual property and property and equipment, when the transfer occurs.
We will adopt ASU 2016-16 effective January 1, 2018 with no expected effect on our consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
” The amendments in this update change how companies measure and recognize credit impairment for many financial assets.
The new expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets (including trade receivables) that are in the scope of the update.
The update also made amendments to the current impairment model for held-to-maturity and available-for-sale debt securities and certain guarantees.
The guidance will become effective for us on January 1, 2020.
Early adoption is permitted for periods beginning on or after January 1, 2019.
We are evaluating the effect of ASU 2016-13 on our consolidated financial statements.
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.
” The amendments in this update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments.
The amendments in this update supersede the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures and limited liability companies) to be measured at fair value with changes in the fair value recognized through earnings.
Equity investments that are accounted for under the equity method of accounting or result in consolidation of an investee are not included within the scope of this update.
The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment.
The amendments also require enhanced disclosures about those investments.
We will adopt ASU 2016-01 effective January 1, 2018 with no expected effect on our consolidated financial statements.


| As of December 31, | 2006 | (In thousands) | Consolidated Balance Sheet Data: -1 | Cash and cash equivalents | Short-term investments | Long-term investments | Working capital -4 | Total assets | Short-term debt | Long-term debt | Total stockholders' equity |


| Increase (Decrease) | Labor, other benefits, contracting and materials | Nuclear refueling outage costs, including the co-owned Salem Plant(a) | Exelon Wind(b) | Asset retirement obligation reduction(c) | 2010 nuclear insurance credit(d) | Corporate allocations(e) | Acquisition costs(f) | Other(g) | Increase in operating and maintenance expense |


| (in millions) 2010 2009 2008 | Hedges of lending-related commitments(a) | CVA and hedges of CVA(a) | Net gains/(losses) |


| A.M. Best Fitch Standard & Poor's Moody's | Principal Financial Group | Senior Unsecured Debt -1 | Preferred Stock -2 | Principal Financial Services | Senior Unsecured Debt | Commercial Paper | Principal Life Insurance Company | Insurer Financial Strength | Enterprise Risk Management Rating | Principal National Life Insurance Company | Insurer Financial Strength |


| East 2016 2017 2018 2019 AnnualAverage for2016-2019 | (Dollars in millions unless otherwise stated) | Net Coal Capacity (MW)(a) | Forecasted Coal Capacity (MW)(b) | Total Coal Sales (MW)(c) | Percentage Coal Capacity Sold Forward(d) | Total Forward Hedged Revenues(e) | Weighted Average Hedged Price ($ per MWh)(e) | Average Equivalent Natural Gas Price ($ per MMBtu)(e) | Gas Price Sensitivity Up $0.50/MMBtu on Coal Units | Gas Price Sensitivity Down $0.50/MMBtu on Coal Units | Heat Rate Sensitivity Up 1 MMBtu/MWh on Coal Units | Heat Rate Sensitivity Down 1 MMBtu/MWh on Coal Units |


| 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 | United Parcel Service, Inc. | S&P 500 Index | Dow Jones Transportation Average | 2013 | Net income | Non-cash operating activities(a) | Pension and postretirement plan contributions (UPS-sponsored plans) | Income tax receivables and payables | Changes in working capital and other noncurrent assets and liabilities | Other operating activities | Net cash from operating activities |


| 2005 2004 | Towers | Equipment | Buildings and improvements | Land and improvements | Construction-in-progress | Total | Less accumulated depreciation and amortization | Property and equipment, net |


| 2019 2020 2021 2022 2023 Thereafter Total | Deferred acquisition payments | Redeemable noncontrolling interests and call options with affiliates1 | Total contingent acquisition payments |


| Millions, Except Estimated UsefulLifeAs of December 31, 2014 Cost$5,194 AccumulatedDepreciation$N/A Net BookValue$5,194 EstimatedUseful LifeN/A | Road: | Rail and other track material | Ties | Ballast | Other roadway [a] | Total road | Equipment: | Locomotives | Freight cars | Work equipment and other | Total equipment | Technology and other | Construction in progress | Total |


| Con Edison CECONY | (Millions of Dollars) | CHANGE IN PROJECTED BENEFIT OBLIGATION | Projected benefit obligation at beginning of year | Service cost – excluding administrative expenses | Interest cost on projected benefit obligation | Net actuarial (gain)/loss | Plan amendments | Benefits paid | PROJECTED BENEFIT OBLIGATION AT END OF YEAR | CHANGE IN PLAN ASSETS | Fair value of plan assets at beginning of year | Actual return on plan assets | Employer contributions | Benefits paid | Administrative expenses | FAIR VALUE OF PLAN ASSETS AT END OF YEAR | FUNDED STATUS | Unrecognized net loss | Unrecognized prior service costs | Accumulated benefit obligation |


Commercial Credit The primary factors considered in commercial credit approvals are the financial strength of the borrower, assessment of the borrowers management capabilities, cash flows from operations, industry sector trends, type and sufficiency of collateral, type of exposure, transaction structure, and the general economic outlook.
While these are the primary factors considered, there are a number of other factors that may be considered in the decision process.
We utilize a centralized preview and senior loan approval committee, led by our chief credit officer.
The risk rating (see next paragraph) and complexity of the credit determines the threshold for approval of the senior loan committee with a minimum credit exposure of $10.0 million.
For loans not requiring senior loan committee approval, with the exception of small business loans, credit officers who understand each local region and are experienced in the industries and loan structures of the requested credit exposure are involved in all loan decisions and have the primary credit authority.
For small business loans, we utilize a centralized loan approval process for standard products and structures.
In this centralized decision environment, certain individuals who understand each local region may make credit-extension decisions to preserve our commitment to the communities in which we operate.
In addition to disciplined and consistent judgmental factors, a sophisticated credit scoring process is used as a primary evaluation tool in the determination of approving a loan within the centralized loan approval process.
In commercial lending, on-going credit management is dependent on the type and nature of the loan.
We monitor all significant exposures on an on-going basis.
All commercial credit extensions are assigned internal risk ratings reflecting the borrowers PD and LGD.
This two-dimensional rating methodology provides granularity in the portfolio management process.
The PD is rated and applied at the borrower level.
The LGD is rated and applied based on the specific type of credit extension and the quality and lien position associated with the underlying collateral.
The internal risk ratings are assessed at origination and updated at each periodic monitoring event.
There is also extensive macro portfolio management analysis on an on-going basis.
We continually review and adjust our risk-rating criteria based on actual experience, which provides us with the current risk level in the portfolio and is the basis for determining an appropriate allowance for credit losses (ACL) amount for the commercial portfolio.
A centralized portfolio management team monitors and reports on the performance of the entire commercial portfolio, including small business loans, to provide consistent oversight.
In addition to the initial credit analysis conducted during the approval process, our Credit Review group performs testing to provide an independent review and assessment of the quality and risk of new loan originations.
This group is part of our Risk Management area and conducts portfolio reviews on a risk-based cycle to evaluate individual loans, validate risk ratings, and test the consistency of credit processes.


Certain mortgage loans Citigroup has elected the fair value option for certain purchased and originated prime fixed-rate and conforming adjustable-rate first mortgage loans held-for-sale.
These loans are intended for sale or securitization and are hedged with derivative instruments.
The Company has elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplifications.
The fair value option was not elected for loans held-for-investment, as those loans are not hedged with derivative instruments.
The following table provides information about certain mortgage loans carried at fair value:


Pensions We use actuarial estimated and related actuarial methods to calculate our obligation and expense.
We are required to select certain actuarial assumptions, which are determined based on current market conditions, historical information and consultation with and input from our actuaries and asset managers.
Refer to Note 12.
Pension Benefits to the audited consolidated financial statements included herein for additional details.
The key factors which impact our estimates are (1) discount rates; (2) asset return assumptions; and (3) actuarial assumptions such as retirement age and mortality which are determined as of the current year measurement date.
We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when appropriate.
Experience gains and losses, as well as the effects of changes in actuarial assumptions and plan provisions are recognized in other comprehensive income.
Cumulative actuarial gains and losses in excess of 10% of the projected benefit obligation (“PBO”) for a particular plan are amortized over the average future service period of the employees in that plan.
The principal assumptions used to determine the pension expense and the actuarial value of the projected benefit obligation for the U. S.  and non-U.
S.  pension plans were: Assumptions used to determine benefit obligations at December 31:


(11) Capital Stock In February 2015, the Companys Board of Directors authorized the repurchases of up to $500,000 in common stock.
Purchases of the Companys common stock may be made from time to time, subject to market conditions, and may be made in the open market or through privately negotiated transactions.
The Company has no obligation to repurchase shares under the authorization and the time, actual number, and the value of the shares which are repurchased will depend on a number of factors, including the price of the Companys common stock.
In 2017, the Company repurchased 1,584 shares at an average price of $94.74.
The total cost of these repurchases, including transaction costs, was $150,054.
At December 31, 2017, $177,966 remained under the current authorizations.


| Gross derivative receivables Gross derivative payables | December 31, 2012(in millions) | Trading assets and liabilities | Interest rate | Credit | Foreign exchange(b) | Equity | Commodity | Total fair value of trading assets and liabilities | Gross derivative receivables | December 31, 2011(in millions) | Trading assets and liabilities | Interest rate | Credit | Foreign exchange(b) | Equity | Commodity | Total fair value of trading assets and liabilities | Year ended December 31,(in millions) | Repurchase liability at beginning of period | Net realized gains/(losses)(b) | Reclassification to litigation reserve | (Benefit)/provision for repurchase(c) | Repurchase liability at end of period |


All Other Included in All Other are our Latin America and Equity Investments businesses, and Other.
Latin America includes our full-service Latin American operations in Brazil, Argentina and Chile.
These businesses provide a wide array of products to indigenous and multinational corporations, as well as consumers.
These services include lending, deposit-taking, asset management, private banking and treasury operations.
The consumer business focuses on the affluent and middle-market segments.
Our largest book of business is in Brazil, while Argentina has our largest branch network, with 87 branches.
Our Brazilian and Chilean operations have 65 branches and 43 branches, respectively.
Beginning in 2005, Latin America will be re-aligned with the Global Business and Financial Services segment.
For more information on our Latin American operations, see Foreign Portfolio beginning on page 64.
Equity Investments include Principal Investing and other corporate investments.
Principal Investing is comprised of a diversified portfolio of investments in privately-held and publicly-traded companies at all stages of their lifecycle from start-up to buyout.
Other includes Noninterest Income and Expense amounts associated with the ALM process, including Gains on Sales of Debt Securities, the allowance for credit losses process, the residual impact of methodology allocations, intersegment eliminations, and the results of certain consumer finance and commercial lending businesses that are being liquidated.


| 2003 2002 2001 | Subsidiaries | Affiliates |


| Table 48 Net Credit Default Protection by Maturity Profile December 31 | 2011 | Less than or equal to one year | Greater than one year and less than or equal to five years | Greater than five years | Total net credit default protection |


| Years Ended December 31, | 2008 | (In millions) | Operating Revenues | Premiums | Net investment income | Other revenues | Total operating revenues | Operating Expenses | Policyholder benefits and claims and policyholder dividends | Interest credited to policyholder account balances | Interest credited to bank deposits | Capitalization of DAC | Amortization of DAC and VOBA | Interest expense | Other expenses | Total operating expenses | Provision for income tax expense (benefit) | Operating earnings | Preferred stock dividends | Operating earnings available to common shareholders |


The table below presents, by region, the tons of proven and probable aggregates reserves as of December 31, 2014 and the types of facilities operated.


| (Millions of Dollars) 2014 2013 Variance 2014 vs. 2013 2012 Variance 2013 vs. 2012 | Operating activities | Investing activities | Financing activities | Net change | Balance at beginning of period | Balance at end of period | (Millions of Dollars) | Operating activities | Investing activities | Financing activities | Net change | Balance at beginning of period | Balance at end of period |


| (in millions) Maturity Amount Carrying Value Maturity | 5.00% Notes | 4.25% Notes | 3.375% Notes | 3.50% Notes | 1.25% Notes-1 | 3.20% Notes | Total Long-term Borrowings |


| ($ in millions) 2012 2011 2010 | Service cost | Interest cost | Expected return on plan assets | Amortization of: | Prior service credit | Net actuarial loss | Settlement loss | Net periodic cost |


| Fiscal Years Operating   Leases | 2008 | 2009 | 2010 | 2011 | 2012 | Later Years | Total |


| December 31 | 2014 | (In thousands) | Loans | Commercial, financial, etc. | Real estate: | Residential | Commercial | Construction | Consumer | Total loans | Leases | Commercial | Total loans and leases | Less: unearned discount | Total loans and leases, net of unearned discount |


| Year EndedDecember 31, 2017 Seven Months Ended December 31, 2016 Year Ended May 31, | 2016 | Cash flows from operating activities: | Net income | Adjustments to reconcile net income to net cash provided by operating activities: | Depreciation and amortization of property and equipment | Amortization of acquired intangibles | Share-based compensation expense | Provision for operating losses and bad debts | Amortization of capitalized customer acquisition costs | Deferred income taxes | Gain on sale of investments | Other, net | Changes in operating assets and liabilities, net of the effects of acquisitions: | Accounts receivable | Settlement processing assets and obligations, net | Prepaid expenses and other assets | Capitalized customer acquisition costs | Accounts payable and other liabilities | Net cash provided by operating activities | Cash flows from investing activities: | Acquisitions, net of cash acquired | Capital expenditures | Net proceeds from sale of investments | Net proceeds from sales of property and equipment | Other, net | Net cash used in investing activities | Cash flows from financing activities: | Net proceeds from (repayments of) settlement lines of credit | Proceeds from long-term debt | Repayments of long-term debt | Payment of debt issuance costs | Repurchase of common stock | Proceeds from stock issued under share-based compensation plans | Common stock repurchased - share-based compensation plans | Purchase of subsidiary shares from noncontrolling interest | Proceeds from sale of subsidiary shares to noncontrolling interest | Distributions to noncontrolling interests | Dividends paid | Net cash provided by (used in) financing activities | Effect of exchange rate changes on cash | Increase in cash and cash equivalents | Cash and cash equivalents, beginning of the period | Cash and cash equivalents, end of the period |


| At December 31, | 2015 | Commercial: | Commercial and industrial | Commercial real estate | Total commercial | Consumer: | Automobile | Home equity | Residential mortgage | Other loans | Total consumer | Total allowance for loan and lease losses | Allowance for unfunded loan commitments | Total allowance for credit losses | Total loans and leases | Nonaccrual loans and leases | Nonperforming assets | Total loans and leases | Nonaccrual loans and leases | Nonperforming assets |


| RSUs | 2019 | 2020 | 2021 | 2022 | 2023 | Total unrecognized compensation expense |


| Year ended December 31, | (Dollars in thousands) | Accrued compensation | Foreign exchange spot contract liabilities, gross | Derivative liabilities, gross -1 | Reserve for unfunded credit commitments | Other | Total other liabilities | Year ended December 31, | (Dollars in thousands) | Average cash and cash equivalents | Percentage of total average assets | Net cash provided by operating activities | Net cash used for investing activities | Net cash provided by financing activities | Net (decrease) increase in cash and cash equivalents |


| (in billions, except ratios) Reported Pro forma(a)(b) | Assets | Liabilities | Tier 1 capital ratio | Tier 1 leverage ratio |


We account for income taxes under SFAS No.109.
This statement requires that we recognize a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences and carry forwards to the extent they are realizable.
Our effective tax rate for fiscal 2006 was 48.5% of pre-tax earnings.
This represents our normalized rate of approximately 38% increased for the in-process research and development charges recorded during the year which are not deductible for tax purposes.
Our effective tax rate for fiscal 2005 was 19% of pre-tax earnings.
This represented our normalized rate of approximately 38% reduced by a decrease in certain valuation allowances and tax reserves.
We anticipate a normalized effective tax rate of 38% of pre-tax earnings in fiscal 2007.
We had previously recorded a valuation allowance to reduce our deferred tax assets to the amount that was more likely than not to be realized.
In fiscal 2005, we considered our recent operating results, future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance.
As a result, we determined that we were able to realize a portion of our deferred tax assets in excess of the net recorded amount, and therefore, an adjustment of $6.2 million was made to reduce the valuation allowance.
The benefit of the release in valuation allowance was realized through reductions to tax expense and increases to additional paid in capital.
In addition, during the fourth quarter of 2005 we received notification that the Joint Committee on Taxation had no exceptions with the Internal Revenue Service’s conclusions on several tax returns under examination.
Therefore, we released $750,000 of tax reserves related to these returns further reducing our provision for income taxes in fiscal 2005.


| Year endedDecember 31 | Dollars in millions | Net interest income | Net interest margin |


| Year Ended | September 30, 2007 | ($ in 000's) | Revenues | Interest Income | Other | Total Revenues | Other Expense | Pre-tax Earnings (Loss) |


Tenant Lease Expirations The following table shows tenant lease expirations, including those related to DFLs, for the next 10 years and thereafter at our consolidated properties, assuming that none of the tenants exercise any of their renewal or purchase options, unless otherwise noted below, and excludes properties in our SHOP segment and assets held for sale as of and for the year ended December 31, 2018 (dollars and square feet in thousands):


| Con Edison CECONY | (Millions of Dollars) | Accrued liability – asbestos suits | Regulatory assets – asbestos suits | Accrued liability – workers’ compensation | Regulatory assets – workers’ compensation |


| Year Ended December 31, Year Ended December 31, | 2014 | (In $ millions, except percentages) | Net sales | Net Sales Variance | Volume | Price | Currency | Other | Other (charges) gains, net | Operating profit (loss) | Operating margin | Equity in net earnings (loss) of affiliates | Dividend income - cost investments | Depreciation and amortization |


| December 31, 2008 | Less than twelve months | Carrying value | (in millions) | Fixed maturities, available-for-sale: | U.S. government and agencies | Non-U.S. governments | States and political subdivisions | Corporate — public | Corporate — private | Mortgage-backed and other asset-backed securities | Total fixed maturities, available-for-sale | Total equity securities, available-for-sale |


Gain on business divestitures and impairments, net We strive to have a number one or number two market position in each of the markets we serve, or have a clear path on how we will achieve a leading market position over time.
Where we cannot establish a leading market position, or where operations are not generating acceptable returns, we may decide to divest certain assets and reallocate resources to other markets.
Asset or business divestitures could result in gains, losses or asset impairment charges that may be material to our results of operations in a given period.
During 2018, we recorded a net gain on business divestitures, net of asset impairments of $44.9 million.
During 2017, we recorded a net gain on business divestitures, net of asset impairments of $27.1 million.
We also recorded a gain on business divestitures of $6.8 million due to the transfer of ownership of the landfill gas collection and control system and the remaining post-closure and environmental liabilities associated with one of our divested landfills.
During 2016, we recorded a charge to earnings of $4.6 million primarily related to environmental costs associated with one of our divested landfills.
During 2016, we also recorded a net gain related to a business divestiture of $4.7 million.
Restructuring Charges In January 2018, we eliminated certain positions following the consolidation of select back-office functions, including but not limited to the integration of our National Accounts support functions into our existing corporate support functions.
These changes include a reduction in administrative staffing and the closure of certain office locations.
During 2018, we incurred restructuring charges of $26.4 million that primarily consisted of severance and other employee termination benefits, the closure of offices with non-cancelable lease agreements, and the redesign of our back-office functions and upgrades to certain of our software systems.
We paid $24.7 million during 2018 related to these restructuring efforts.
In January 2016, we realigned our field support functions by combining our three regions into two field groups, consolidating our areas and streamlining select operational support roles at our Phoenix headquarters.
Additionally, in the second quarter of 2016, we began the redesign of our back-office functions as well as the consolidation of over 100 customer service locations into three Customer Resource Centers.
The redesign of our back-office functions and upgrades to certain of our software systems continued into 2018.
During the years ended December 31, 2017 and 2016, we incurred $17.6 million and $40.7 million of restructuring charges, respectively, that primarily consisted of severance and other employee termination benefits, transition costs, relocation benefits, and the closure of offices with lease agreements with non-cancelable terms.
The savings realized from these restructuring efforts have been reinvested in our customer-focused programs and initiatives.
Interest Expense The following table provides the components of interest expense, including accretion of debt discounts and accretion of discounts primarily associated with environmental and risk insurance liabilities assumed in acquisitions (in millions of dollars):


| Amount (In Millions) | 2016 net revenue | FitzPatrick sale | Nuclear volume | FitzPatrick reimbursement agreement | Nuclear fuel expenses | Other | 2017 net revenue |


| Consolidated Statement of Operations Data Fiscal | (In millions, except per share amounts) | Total net revenue | Total costs and expenses | Operating income from continuing operations | Total share-based compensation expense included in total costs and expenses | Net income from continuing operations | Net income from discontinued operations | Net income | Net income per common share: | Basic net income per share from continuing operations | Basic net income per share from discontinued operations | Basic net income per share | Diluted net income per share from continuing operations | Diluted net income per share from discontinued operations | Diluted net income per share | (Dollars in millions) | Product revenue | Service and other revenue | Total segment revenue | % of total revenue | Segment operating income | % of related revenue |


| (in thousands) Year Ended December 31, 2008 Year Ended December 31, 2007 Year Ended December 31, 2006 | Cost of sales: | Software licenses | Maintenance and service | Operating expenses: | Selling, general and administrative | Research and development | Stock-based compensation expense before taxes | Related income tax benefits | Stock-based compensation expense, net of taxes |


| Year Ended December 31, | 2012-1 | Oil (per Bbl) | U.S. Onshore | Canada | North America Onshore | U.S. Offshore | Total | Bitumen (per Bbl) | Canada | Gas (per Mcf) | U.S. Onshore | Canada | North America Onshore | U.S. Offshore | Total | NGLs (per Bbl) | U.S. Onshore | Canada | North America Onshore | U.S. Offshore | Total | Combined (per Boe) | U.S. Onshore | Canada | North America Onshore | U.S. Offshore | Total |


In November 2015, the FASB issued amended guidance which requires all deferred income tax assets and liabilities to be presented as noncurrent on the balance sheet.
This amended guidance is effective beginning January 1, 2017, and may be applied retrospectively or prospectively, with early adoption permitted.
We have early adopted this amended guidance and applied the presentation prospectively as of December 31, 2015.
For the year ended December 31, 2014, there were $107.1 of current deferred tax assets included within Other current assets and $5.4 of current deferred tax liabilities included within Accrued liabilities, which would be classified as noncurrent under the amended guidance.
We evaluate the realizability of our deferred tax assets on a quarterly basis.
The realization of our deferred tax assets is primarily dependent on future earnings.
The amount of the deferred tax assets considered realizable could be reduced or increased in the near future if estimates of future taxable income are lower or greater than anticipated.
A valuation allowance is established when it is “more likely than not” that all or a portion of deferred tax assets will not be realized.
In circumstances where there is negative evidence, establishment of a valuation allowance is considered.
The factors used in assessing valuation allowances include all available evidence, such as past operating results, estimates of future taxable income and the feasibility of tax planning strategies.
We believe that cumulative losses in the most recent three-year period represent significant negative evidence, and as a result, we determined that certain of our deferred tax assets required the


| 2012 $372 | 2011 | 2010 | 2009 | 2008 and prior | $1,884 |


| Liabilities recorded on the balance sheet $60,578 | Commitments not recorded on the balance sheet | Total |


| Location Approximate Square Footage | Alpharetta, Georgia | Arlington, Virginia | Jersey City, New Jersey | Menlo Park, California | Sandy, Utah | New York, New York | Chicago, Illinois |


| 2008 2007 2006 Amount | Dollars in millions, except per share data | Revenues | Sales by Company-operated restaurants | Revenues from franchised restaurants | Total revenues | Operating costs and expenses | Company-operated restaurant expenses | Franchised restaurants—occupancy expenses | Selling, general & administrative expenses | Impairment and other charges, net | Other operating (income) expense, net | Total operating costs and expenses | Operating income | Interest expense | Nonoperating (income) expense, net | Gain on sale of investment | Income from continuing operations before provision for income taxes | Provision for income taxes | Income from continuing operations | Income from discontinued operations (net of taxes of $35 and $102) | Net income | Income per common share–diluted | Continuing operations | Discontinued operations | Net income | Weighted-average common shares outstanding–diluted |


| Millions of Dollars 2009 2008 2007 % Change 2009 v 2008 % Change 2008 v 2007 | Freight revenues | Other revenues | Total |


| (in millions) 2013 2012 2011 | Nonoperating income (expense), GAAP basis | Less: Net income (loss) attributable to NCI | Nonoperating income (expense) | Gain related to Charitable Contribution | Compensation expense related to (appreciation) depreciation on deferred compensation plans | Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted |


| December 31, 2010 | Financial Services Businesses | Amortized Cost | ($ in millions) | Corporate & government securities: | Maturing in 2011 | Maturing in 2012 | Maturing in 2013 | Maturing in 2014 | Maturing in 2015 | Maturing in 2016 | Maturing in 2017 | Maturing in 2018 | Maturing in 2019 | Maturing in 2020 | Maturing in 2021 | Maturing in 2022 and beyond | Total corporate & government securities | Asset-backed securities | Commercial mortgage-backed securities | Residential mortgage-backed securities | Total fixed maturities | December 31, 2010 | Industry-1 | (in millions) | Corporate securities: | Manufacturing | Utilities | Finance | Services | Energy | Retail and Wholesale | Transportation | Other | Total corporate securities-3 | Foreign government-3(4) | Residential mortgage-backed | Asset-backed securities-5 | Commercial mortgage-backed | U.S. Government | State & Municipal-6 | Total-7(8) |


| (Dollars in thousands) Fair Value Unfunded Commitments | Non-marketable securities (investment company fair value accounting): | Private equity fund investments -1 | Non-marketable securities (equity method accounting): | Other investments -2 | Non-marketable securities (cost method accounting): | Private equity fund investments -3 | Total |


| 2005 $138,386 | 2006 | 2007 | 2008 | 2009 | Thereafter | Total cash obligations | Accreted value of original issue discount of the ATI 12.25% Notes | Accreted value of the related warrants | Accreted value of the discount and premium of 3.00% Notes and 7.125% Notes | Balance as of December 31, 2004 |


| Domestic International Total | Fiscal 2009 | Termination benefits | Facility closure costs | Property and equipment write-downs | Total |


| For the years ended December 31, | 2016 | Stock-based compensation plans expense | Income tax benefit | Total stock-based compensation plans expense, after-tax |


| Year Ended April 30, 2009 2008 2007 | Net interest margin-1 | Pretax return on average assets-2 | Total assets (in 000s) | Mortgage loans held for investment: | Loan loss reserve as a % of mortgage loans | Delinquency rate (30+ days) |


| 2012 2011 | (In millions) | Exploration and Production | Unproved properties | Proved properties | Wells, equipment and related facilities | 43,015 | Marketing, Refining and Corporate | Total — at cost | Less: Reserves for depreciation, depletion, amortization and lease impairment | Property, plant and equipment — net |


| Operating Subsidiary: A.M. Best Standard & Poor's Moody's | Everest Re | Bermuda Re | Ireland Re | Everest National | Everest Indemnity | Everest Security | Everest International Assurance, Ltd. | Everest International | Everest Canada | Everest Denali | Everest Premier | Ireland Insurance |


Shareholder Value Award Program SVAs are granted to officers and management and are payable in shares of our common stock.
The number of shares actually issued, if any, varies depending on our stock price at the end of the three-year vesting period compared to pre-established target stock prices.
We measure the fair value of the SVA unit on the grant date using a Monte Carlo simulation model.
The model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award.
Expected volatilities utilized in the model are based on implied volatilities from traded options on our stock, historical volatility of our stock price, and other factors.
Similarly, the dividend yield is based on historical experience and our estimate of future dividend yields.
The risk-free interest rate is derived from the U. S.  Treasury yield curve in effect at the time of grant.
The weighted-average fair values of the SVA units granted during the years ended December 31, 2018, 2017, and 2016 were $48.51, $66.25, and $48.68, respectively, determined using the following assumptions:


| Common Equity Ratio (Percent of total capitalization) | 2008 | Con Edison | CECONY |


| Years Ended December 31, | 2009 | (in millions) | Stock options | Restricted stock awards | Restricted stock units | Total |


| Balance in Accumulated Other Comprehensive Loss | Contract Type | Interest Rate Swaps |


| 2014 2013 | December 31, (in millions) | U.S. GAAP nettable derivative payables | Interest rate contracts: | OTC | OTC–cleared | Exchange-traded(a) | Total interest rate contracts | Credit contracts: | OTC | OTC–cleared | Total credit contracts | Foreign exchange contracts: | OTC | OTC–cleared | Exchange-traded(a) | Total foreign exchange contracts | Equity contracts: | OTC | OTC–cleared | Exchange-traded(a) | Total equity contracts | Commodity contracts: | OTC | OTC–cleared | Exchange-traded(a) | Total commodity contracts | Derivative payables with appropriate legal opinions | Derivative payables where an appropriate legal opinion has not been either sought or obtained | Total derivative payables recognized on the Consolidated balance sheets |


| Settlement date before December 31, | 2017 | December 31, 2016 | (millions) | Foreign currency sold | U.S. dollars sold for Pounds sterling | Euro sold for U.S. dollars | Japanese yen sold for U.S. dollars | Euro sold for Pounds sterling | Total | Fair value(i) |


| As of December 31, 2013 | Consolidated Balance Sheet | Other intangible assets, net | Deferred income taxes | Total assets | Retained earnings | Total stockholders' equity | Total liabilities and stockholders' equity |


| Years ended December 31, | 2009 | Cash interest on debt obligations | Non-cash interest | Interest expense | Interest income | Net interest expense | Other income, net | Total (expenses) and other income |


| 2007 2006 2005 | Beginning balance as of January 1, | (Deductions), additions and revisions in estimated cash flows, net of settlements | Accretion expense | Liability assumed in merger with SpectraSite, Inc. | Increase due to change in accounting principle | Balance as of December 31, |


| 2016 2015 | December 31, (in millions) | Loans(a) | Nonaccrual loans | Loans reported as trading assets | Loans | Subtotal | All other performing loans | Loans reported as trading assets | Loans | Total loans | Long-term debt | Principal-protected debt | Nonprincipal-protected debt(b) | Total long-term debt | Long-term beneficial interests | Nonprincipal-protected debt | Total long-term beneficial interests |


| Gross Prescription   Drug Subsidies  (In millions) Net | 2008 | 2009 | 2010 | 2011 | 2012 | 2013-2017 |


.
Loss on Early Extinguishment of Debt: During the fourth quarter of 2014, UST redeemed in full its $300 million (aggregate principal amount) 5.75% senior notes due 2018.
In addition, during the fourth quarter of 2013 and the third quarter of 2012, Altria Group, Inc.  completed debt tender offers to purchase for cash certain of its senior unsecured notes in aggregate principal amounts of $2.1 billion and $2.0 billion, respectively.
As a result of the UST debt redemption and the Altria Group, Inc.  debt tender offers, pre-tax losses on early extinguishment of debt were recorded as follows:


| Total Less than 1 year 1-3 years 3-5 years Over 5 years | Non-cancelable operating leases, net of sublease income |


| Balance at May 31, 2012 $67,436 | Adjustments | Subtotal | Payments | Balance at May 31, 2013 |


FISCAL YEAR 2012 COMPARED TO FISCAL YEAR 2011 Interest income earned on mortgage loans held for investment decreased $4.4 million, or 17.7%, from the prior year, primarily as a result of declining rates and non-performing loans.
Our provision for loan losses decreased $11.5 million, or 32.3%, from the prior year as a result of the continued run-off of our portfolio.
Income Taxes on Continuing Operations Our effective tax rate for continuing operations in fiscal year 2012 was 39.9% compared to 37.5% in the prior year.
The higher effective tax rate was primarily due to increased tax expense related to changes in the value of investments held within company-owned life insurance (COLI) policies.
A portion of the increase related to COLI resulted from the decision to surrender COLI policies no longer required to support our deferred
NOTE 10: OTHER NONCURRENT ASSETS AND LIABILITIES We have deferred compensation plans that permit certain employees to defer portions of their compensation and accrue income on the deferred amounts.
Included in other noncurrent liabilities is $48.0 million and $142.0 million at April 30, 2012 and 2011, respectively, reflecting our obligation under these plans.
The decline in the liability from the prior year is primarily due to amounts paid to former employees in connection with the sale of RSM.
We purchased whole-life insurance contracts on certain participants to recover distributions made or to be made under these plans.
The cash surrender value of the policies and other assets totaled $99.0 million and $105.0 million at April 30, 2012 and 2011, respectively.
These assets are restricted, as they are only available to fund the related liabilities.
Due to our plan to liquidate certain of these investments, at April 30, 2012, $81.4 million of these assets were classified as current and included in prepaid and other current assets on the consolidated balance sheet.
The remaining balance as of April 30, 2012, and the entire balance as of April 30, 2011, was included in other noncurrent assets on the consolidated balance sheets.
NOTE 11: FAIR VALUE MEASUREMENT We use the following classification of financial instruments pursuant to the fair value hierarchy methodologies for assets measured at fair value:  Level 1  inputs to the valuation are quoted prices in an active market for identical assets.
 Level 2  inputs to the valuation include quoted prices for similar assets in active markets utilizing a third-party pricing service to determine fair value.
 Level 3  valuation is based on significant inputs that are unobservable in the market and our own estimates of assumptions that we believe market participants would use in pricing the asset.
Financial instruments are broken down in the tables that follow by recurring or nonrecurring measurement status.
Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date.
Assets measured on a nonrecurring basis are assets that, as a result of an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period.
The following table presents the assets that were remeasured at fair value on a recurring basis during the fiscal year ended April 30, 2012 and 2011 and the gains on those remeasurements:


ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES For the information required by this Item 14, see “Audit and Non-Audit Fees” and “Audit Committee Pre-Approval Procedures” in the Proxy Statement for our 2016Annual Meeting, which information is incorporated herein by reference.


| For the Year Ended December 31, | (In millions) | Net sales | Income before interest and taxes | Interest expense, net | Income (loss) before taxes | (Provision) benefit for income taxes | Net income (loss) |


Liquidity and Capital Resources Liquidity is essential to our business.
The primary goal of our liquidity management activities is to ensure adequate funding to conduct our business over a range of market environments.
Senior management establishes our liquidity and capital policies.
These policies include senior managements review of shortand long-term cash flow forecasts, review of monthly capital expenditures, the monitoring of the availability of alternative sources of financing, and the daily monitoring of liquidity in our significant subsidiaries.
Our decisions on the allocation of capital to our business units consider, among other factors, projected profitability and cash flow, risk and impact on future liquidity needs.
Our treasury departments assist in evaluating, monitoring and controlling the impact that our business activities have on our financial condition, liquidity and capital structure as well as maintain our relationships with various lenders.
The objectives of these policies are to support the successful execution of our business strategies while ensuring ongoing and sufficient liquidity.
Liquidity is provided primarily through our business operations and financing activities.
Financing activities could include bank borrowings, repurchase agreement transactions or additional capital raising activities under our universal shelf registration statement.
Cash provided by operating activities during the year ended September 30, 2013 was $660 million.
Operating cash generated by successful operating results over the period resulted in a $457 million increase in cash.
The increase in operating cash included an increase in brokerage client payables and other accounts payable of $1.31 billion, largely the result of an increase in client cash deposits during the period.
A decrease in trading instruments held resulted in an increase of $252 million in operating cash.
A decrease in brokerage client and other receivables resulted in an increase of $88 million in operating cash.
Partially offsetting these activities which resulted in increases of cash, decreases in cash resulted from the following activities: an increase in assets segregated pursuant to regulations and other segregated assets resulted in a $1.28 billion use of cash due to the increase in brokerage client deposits; an increase in securities purchased under agreements to resell, net of securities sold under agreements to repurchase, resulted in a $191 million use of operating cash; and an increase in prepaid expenses and other assets resulted in a $66 million use of cash.
All other components of operating activities combined to net a $94 million increase in operating cash.
to September 30, 2013.
Increased client assets under administration typically result in higher fee-based account revenues and mutual fund and annuity service fees.
Improved equity markets not only result in increased assets under administration, but also generally lead to more client activity and therefore improved financial advisor productivity.
Higher client cash balances generally lead to increased interest income and account fee revenues, depending upon the interest rates realized in our Client Interest Program and RJBDP.
The following table presents a summary of PCG financial advisors and the total number of PCG branch locations as of the periods indicated:


| Percentage Increase (Decrease) | Years ended December 31 (dollars in millions) | Bank service charges | Investment management fees | Operating lease income | Insurance revenue | Net gains on sales of residential mortgage loans | Brokerage commissions | Net gains on sales of acquired loans | Net security gains | Other non-interest income: | Commercial banking fees | Merchant services income, net | BOLI | Other | Total other non-interest income | Total non-interest income |


Defined Contribution Plan In addition to the plans described previously, the Company’s employees are generally eligible to participate in the Ameriprise Financial 401(k) Plan (the ‘‘401(k) Plan’’).
The 401(k) Plan allows eligible employees to make contributions through payroll deductions up to IRS limits and invest their contributions in one or more of the 401(k) Plan investment options, which include the Ameriprise Financial Stock Fund.
Effective March 1, 2010, the Company matches 100% of the first 5% of eligible compensation an employee contributes on a pretax or Roth 401(k) basis for each annual period.
Prior to March 1, 2010, the Company matched 100% of the first 3% of base pay an employee contributed on a pretax basis each pay period.
Effective March 1, 2010, the Company no longer makes an annual discretionary variable match.
Prior to May 2009, the Company also made contributions equal to 1% of base pay each pay period, which were automatically invested in the Ameriprise Financial Stock Fund.
Under the 401(k) Plan, employees become eligible for contributions under the plan during the pay period they reach 60 days of service.
Fixed and variable match contributions and stock contributions are fully vested after five years of service, vesting ratably over the first five years of service.
The Company’s defined contribution plan expense was $33 million, $32 million and $16 million in 2011, 2010 and 2009, respectively.


Purchase Obligations.
In the ordinary course of business, BlackRock enters into contracts or purchase obligations with third parties whereby the third parties provide services to or on behalf of BlackRock.
Purchase obligations included in the contractual obligations table above represent executory contracts, which are either noncancelable or cancelable with a penalty.
At December 31, 2014, the Company’s obligations primarily reflected standard service contracts for portfolio, market data, office-related services and third-party marketing and promotional services, and obligations for equipment.
Purchase obligations are recorded on the Company’s financial statements when services are provided and, as such, obligations for services not received are not included in the consolidated statement of financial condition at December 31, 2014.


| Modifications  Current Modifications  30-89Days  Delinquent Modifications  90-179Days  Delinquent Modifications  180+Days  Delinquent Total Recorded  Investmentin  Modifications | December 31, 2013 | One- to four-family | Home equity | Total | December 31, 2012 | One- to four-family | Home equity | Total | Recorded  Investment in  Modifications  before Charge- offs | December 31, 2013 | One- to four-family | Home equity | Total | December 31, 2012 | One- to four-family | Home equity | Total |


Entering 2006, earnings in the first quarter are expected to improve compared with the 2005 fourth quarter due principally to higher average price realizations, reflecting announced price increases.
Product demand for the first quarter should be seasonally slow, but is expected to strengthen as the year progresses, supported by continued economic growth in North America, Asia and Eastern Europe.
Average prices should also improve in 2006 as price increases announced in late 2005 and early 2006 for uncoated freesheet paper and pulp continue to be realized.
Operating rates are expected to improve as a result of industry-wide capacity reductions in 2005.
Although energy and raw material costs remain high, there has been some decline in both natural gas and delivered wood costs, with further moderation expected later in 2006.
We will continue to focus on further improvements in our global manufacturing operations, implementation of supply chain enhancements and reductions in overhead costs during 2006.
Industrial Packaging Demand for Industrial Packaging products is closely correlated with non-durable industrial goods production in the United States, as well as with demand for processed foods, poultry, meat and agricultural products.
In addition to prices and volumes, major factors affecting the profitability of Industrial Packaging are raw material and energy costs, manufacturing efficiency and product mix.
Industrial Packagings net sales for 2005 increased 2% compared with 2004, and were 18% higher than in 2003, reflecting the inclusion of International Paper Distribution Limited (formerly International Paper Pacific Millennium Limited) beginning in August 2005.
Operating profits in 2005 were 39% lower than in 2004 and 13% lower than in 2003.
Sales volume increases ($24 million), improved price realizations ($66 million), and strong mill operating performance ($27 million) were not enough to offset the effects of increased raw material costs ($103 million), higher market related downtime costs ($50 million), higher converting operating costs ($22 million), and unfavorable mix and other costs ($67 million).
Additionally, the May 2005 sale of our Industrial Papers business resulted in a $25 million lower earnings contribution from this business in 2005.
The segment took 370,000 tons of downtime in 2005, including 230,000 tons of lack-of-order downtime to balance internal supply with customer demand, com


| Years Ended December 31, | 2006 | (In millions) | Balance at January 1, | Acquisition | Cash payments | Other reductions | Balance at December 31, |


The pro forma results are based upon assumptions and estimates that the Company believes are reasonable.
The pro forma results do not purport to be indicative of the results that actually would have been obtained had the acquisitions occurred at the beginning of the periods shown, nor are they intended to be a projection of future results.3.


N.  SHAREHOLDERS’ EQUITY In July 2007, the Company’s Board of Directors authorized the repurchase for retirement of up to 50 million shares of the Company’s common stock in open-market transactions or otherwise.
At December 31, 2010, the Company had remaining authorization to repurchase up to 27 million shares.
During 2010, the Company repurchased and retired three million shares of Company common stock, for cash aggregating $45 million to offset the dilutive impact of the 2010 grant of three million shares of long-term stock awards.
The Company repurchased and retired two million common shares in 2009 and nine million common shares in 2008 for cash aggregating $11 million and $160 million in 2009 and 2008, respectively.
On the basis of amounts paid (declared), cash dividends per common share were $.30 ($.30) in 2010, $.46 ($.30) in 2009 and $.925 ($.93) in 2008, respectively.
In 2009, the Company decreased its quarterly cash dividend to $.075 per common share from $.235 per common share.


| Year Ended December 31, 2009 | Other Trading Account Assets– Equity Securities | (in millions) | Fair Value, beginning of period | Total gains or (losses) (realized/unrealized): | Included in earnings: | Realized investment gains (losses), net | Asset management fees and other income | Included in other comprehensive income (loss) | Net investment income | Purchases, sales, issuances and settlements | Foreign currency translation | Other-1 | Transfers into Level 3-2 | Transfers out of Level 3-2 | Fair Value, end of period | Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of theperiod(3): | Included in earnings: | Realized investment gains (losses), net | Asset management fees and other income | Included in other comprehensive income (loss) |