Tables of Contents Mint.
com service revenue is derived primarily from lead generation fees.
Intuit Health service revenue is derived from online patient-to-provider communication services and fees for implementation services.
In Canada, product revenue is derived primarily from localized versions of QuickBooks and Quicken as well as consumer desktop tax return preparation software and professional tax preparation products.
Service revenue in Canada consists primarily of revenue from payroll services and QuickBooks support plans.
In the United Kingdom, product revenue is derived primarily from localized versions of QuickBooks and QuickBooks Payroll.
Our newest international offerings include QuickBooks Online in Singapore and Intuit Money Manager, a mobile personal financial management service, in India.
Fiscal 2011 Compared with Fiscal 2010 Other Businesses total net revenue increased $40 million or 15% in fiscal 2011 compared with fiscal 2010 due to strong performance in our Canadian and United Kingdom small business offerings and our fiscal 2010 acquisitions of Mint and Medfusion.
In addition, favorable currency impacts in our Canadian and United Kingdom businesses accounted for approximately three percentage points of Other Businesses revenue growth in fiscal 2011.
Other Businesses segment operating income as a percentage of related revenue decreased to 22% in fiscal 2011 from 25% in fiscal 2010.
Higher fiscal 2011 revenue as described above was offset by higher costs and expenses associated with our fiscal 2010 acquisitions of Mint and Medfusion and by our continued investment in emerging market opportunities.
Fiscal 2010 Compared with Fiscal 2009 Other Businesses total net revenue increased $47 million or 22% in fiscal 2010 compared with fiscal 2009.
Revenue increased in fiscal 2010 due to 23% higher Quicken revenue that was driven by higher unit sales and a favorable foreign currency impact in our Canadian business.
The weaker U. S.  dollar accounted for approximately seven percentage points of Other Businesses segment revenue growth in fiscal 2010 compared with fiscal 2009.
Other Businesses segment operating income as a percentage of related revenue decreased to 25% in fiscal 2010 from 29% in fiscal 2009.
Higher fiscal 2010 revenue as described above was offset by higher costs and expenses associated with our November 2009 acquisition of Mint and by our continued investment in emerging market opportunities.
Canadian costs and expenses were also higher in the 2010 periods due to the weaker U. S.  dollar.


| Year Ended December 31, | 2012 | Steam Sold(MMlb) | General | Apartment house | Annual power | Total Steam Delivered to CECONY Customers | Steam Sold($ in millions) | General | Apartment house | Annual power | Other operating revenues | Total Steam Delivered to CECONY Customers | Average Revenue per MMlb Sold |


| November 30, | 2003 | (In thousands) | Assets: | Cash and receivables, net | Mortgage loans held for sale, net | Mortgage loans, net | Title plants | Investment securities | Goodwill, net | Other | Limited-purpose finance subsidiaries | $1,016,710 | Liabilities: | Notes and other debts payable | Other | Limited-purpose finance subsidiaries | $873,266 |


| Fourth Quarter Change | 2009 | Average Deposits | Demand deposits — noninterest-bearing | Demand deposits — interest-bearing | Money market deposits | Savings and other domestic time deposits | Core certificates of deposit | Total core deposits | Other deposits | Total deposits |


The following table provides a reconciliation of non-GAAP noninterest income, net of noncontrolling interests and non-GAAP noninterest income, net of noncontrolling interests and excluding net losses on SVBIF sale transaction, each to GAAP noninterest income:


| For the Years Ended December 31, | 2012 | (Dollars in thousands) | Contracted services | Office supplies and services | Transportation | Rents | Other | Total |


LIQUIDITY AND CAPITAL RESOURCES Cash flows provided by operating activities were $1,747.4 million in 2018 compared to $1,582.3 million and $1,632.2 million in 2017 and 2016, respectively.
The increase in operating cash flows in 2018 compared to 2017 was driven by additional cash flows from our sale of accounts receivable in certain countries, lower acquisition and integration expenses and lower quality remediation expenses, as well as certain significant payments made in the 2017 period.
In the 2017 period, we made payments related to the U. S.  Durom Cup Settlement Program, and we paid $30.5 million in Settlement Payments to resolve previously-disclosed FCPA matters involving Biomet and certain of its subsidiaries as discussed in Note 19 to our consolidated financial statements included in Item 8 of this report.
The decline in operating cash flows in 2017 compared to 2016 was driven by additional investments in inventory, additional expenses for quality remediation and the significant payments made in the 2017 period as discussed in the previous sentence.
These unfavorable items were partially offset by $174.0 million of incremental cash flows in 2017 from our sale of accounts receivable in certain countries.
Cash flows used in investing activities were $416.6 million in 2018 compared to $510.8 million and $1,691.5 million in 2017 and 2016, respectively.
Instrument and property, plant and equipment additions reflected ongoing investments in our product portfolio and optimization of our manufacturing and logistics network.
In 2018, we entered into receive-fixed-rate, pay-fixed-rate cross-currency interest rate swaps.
Our investing cash flows reflect the net cash inflows from the fixedrate interest rate receipts/payments, as well as the termination of certain of these swaps that were in a gain position in the year.
The 2016 period included cash outflows for the acquisition of LDR Holding Corporation (LDR) and other business acquisitions.
Additionally, the 2016 period reflects the maturity of available-for-sale debt securities.
As these investments matured, we used the cash to pay off debt and have not reinvested in any additional debt securities.
Cash flows used in financing activities were $1,302.2 million in 2018.
Our primary use of available cash in 2018 was for debt repayment.
We received net proceeds of $749.5 million from the issuance of additional senior notes and borrowed $400.0 million from our Multicurrency Revolving Facility to repay $1,150.0 million of senior notes that became due on April 2, 2018.
We subsequently repaid the $400.0 million of Multicurrency Revolving Facility borrowings.
Also in 2018, we borrowed another $675.0 million under a new U. S.  Term Loan C and used the cash proceeds along with cash generated from operations throughout the year to repay an aggregate of $835.0 million on U. S.  Term Loan A, $450.0 million on U. S.  Term Loan B, and we subsequently repaid $140.0 million on U. S.  Term Loan C.  Overall, we had approximately $1,150 million of net principal repayments on our senior notes and term loans in 2018.
In 2017, our primary use of available cash was also for debt repayment compared to 2016 when we were not able to repay as much debt due to financing requirements to complete the LDR and other business acquisitions.
Additionally in 2017, we had net cash inflows of $103.5 million on factoring programs that had not been remitted to the third party.
In 2018, we had net cash outflows related to these factoring programs as we remitted the $103.5 million and collected only $66.8 million which had not yet been remitted by the end of the year.
Since our factoring programs started at the end of 2016, we did not have similar cash flows in that year.
In January 2019, we borrowed an additional $200.0 million under U. S.  Term Loan C and used those proceeds, along with cash on hand, to repay the remaining $225.0 million outstanding under U. S.  Term Loan B.
In February, May, August and December 2018, our Board of Directors declared cash dividends of $0.24 per share.
We expect to continue paying cash dividends on a quarterly basis; however, future dividends are subject to approval of the Board of Directors and may be adjusted as business needs or market conditions change.
As further discussed in Note 11 to our consolidated financial statements, our debt facilities restrict the payment of dividends in certain circumstances.


| December 31 Direct Assumed Ceded Net | (In millions) | 2005 | 2004 (a) | 2003 |


| Pension Benefits | U.S. Plans | Benefit Payments | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 - 2015 | 2010 | Dividend yield | Volatility Rate | Risk-free interest rate | Expected option life (years) |


Due to the recent timing of the transaction, the allocation of the purchase price is preliminary.
All of the goodwill associated with the acquisition is expected to be deductible for tax purposes.
The customer-related intangible assets have amortization periods of up to 13 years.
The contract-based intangible assets have amortization periods of 7 years.
The trademark has an amortization period of 5 years.


(C) Retirement Restoration Plan Effective January 1, 2009, we replaced the frozen restoration plan with a new non-qualified retirement plan for certain senior executives who are affected by Internal Revenue Code limitations on benefits provided under the Retirement Savings 401(k) Plan.
Under this plan, these associates may continue to defer portions of their compensation for retirement savings.
We match the associates contributions at the same rate provided under the 401(k) plan, and also may provide the annual discretionary company-funded contribution made regardless of associate participation, as well as the additional discretionary company-funded contribution to the associates meeting the same age and service requirements.
This plan is unfunded with lump sum payments to be made upon the associates retirement.
The total cost for this plan was not significant in fiscal 2016, fiscal 2015 and fiscal 2014.


| Mortgage Loan Valuation Allowances | Commercial | (In millions) | Balance at January 1, 2008 | Provision (release) | Charge-offs, net of recoveries | Balance at December 31, 2008 | Provision (release) | Charge-offs, net of recoveries | Balance at December 31, 2009 | Provision (release) | Charge-offs, net of recoveries | Balance at December 31, 2010 |


| Period TotalNumberof SharesPurchased(a) AveragePrice PaidPer Share Total Numberof SharesPurchased asPart of aPubliclyAnnouncedProgram MaximumNumberof Sharesthat may yetbe PurchasedUndertheProgram(b) | February 27, 2006 through April 2, 2006 | April 3, 2006 through April 30, 2006 | May 1, 2006 through May 28, 2006 | Total |


| Range | U.S. equities | International equities | Long bonds | Alternative investments |


| Balance at December 31, 2007 $41,053 | Sale of German retail bank | Sale of CitiCapital | Sale of Citigroup Global Services Limited | Purchase accounting adjustments—BISYS | Purchase of the remaining shares of Nikko Cordial—net of purchase accounting adjustments | Acquisition of Legg Mason Private Portfolio Group | Foreign exchange translation | Impairment of goodwill | Smaller acquisitions, purchase accounting adjustments and other | Balance at December 31, 2008 | Sale of Smith Barney | Sale of Nikko Cordial Securities | Sale of Nikko Asset Management | Foreign exchange translation | Smaller acquisitions/divestitures, purchase accounting adjustments and other | Balance at December 31, 2009 | In millions of dollars | Balance at December 31, 2007-1 | Goodwill acquired during 2008 | Goodwill disposed of during 2008 | Goodwill impaired during 2008 | Other-1 | Balance at December 31, 2008-1 | Goodwill acquired during 2009 | Goodwill disposed of during 2009 | Other-1 | Balance at December 31, 2009 |


decrease in the CDS trade execution revenues for the year ended December 31, 2017 is also impacted by the sale and discontinuance of our U. S.  and U. K.  CDS voice brokerage operations in the third quarter of 2016.
Other Revenues Other revenues primarily include interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U. S.  securities exchanges, designated market maker service fees, exchange membership fees and agricultural grading and certification fees.
The increase in other revenues for the year ended December 31, 2017, from the comparable period in 2016, is primarily due to a $6 million breakup fee received in the third quarter of 2017 related to the termination of the derivatives clearing agreement with Euronext, under which ICE Clear Netherlands was to provide clearing of Euronext’s financial and commodity derivatives.
Selected Operating Data The following charts and table present trading activity in our futures and options markets by commodity type based on the total number of contracts traded, as well as futures and options rate per contract (in millions, except for percentages and rate per contract amounts):


Effects of Inflation Inflation can impact our organization primarily in two ways.
First, inflationary pressures can result in increases in our cost structure, especially to the extent that large expense components such as compensation are impacted.
To the degree that these expense increases are not recoverable or cannot be counterbalanced through pricing increases due to the competitive environment, our profitability could be negatively impacted.
Secondly, the value of the assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment.
Declines in the values of these AUM could lead to reduced revenues as management fees are generally calculated based upon the size of AUM.


| In millions 2013 2014 2015 2016 2017 Thereafter | Maturities of long-term debt (a) | Debt obligations with right of offset (b) | Lease obligations | Purchase obligations (c) | Total (d) |


Net revenue for the PCCG operating segment decreased by $1.5 billion, or 4%, in 2013 compared to 2012.
PCCG platform unit sales were down 3% primarily on softness in traditional PC demand during the first nine months of the year.
The decrease in revenue was driven by lower notebook and desktop platform unit sales which were down 4% and 2%, respectively.
PCCG platform average selling prices were flat, with 6% higher desktop platform average selling prices offset by 4% lower notebook platform average selling prices.
Operating income decreased by $1.3 billion, or 10%, in 2013 compared to 2012, which was driven by $1.5 billion of lower gross margin, partially offset by $200 million of lower operating expenses.
The decrease in gross margin was driven by $1.5 billion of higher factory start-up costs primarily on our next-generation 14nm process technology as well as lower PCCG platform revenue.
These decreases were partially offset by approximately $520 million of lower PCCG platform unit costs, $260 million of lower excess capacity charges, and higher sell-through of previously non-qualified units.
Net revenue for the PCCG operating segment decreased by $1.1 billion, or 3%, in 2012 compared to 2011.
PCCG revenue was negatively impacted by the growth of tablets as these devices compete with PCs for consumer sales.
Platform average selling prices and unit sales decreased 2% and 1%, respectively.
The decrease was driven by 6% lower notebook platform average selling prices and 5% lower desktop platform unit sales.
These decreases were partially offset by a 4% increase in desktop platform average selling prices and a 2% increase in notebook platform unit sales.


THE HARTFORD FINANCIAL SERVICES GROUP, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) needs of the Plan, the investment preferences and risk tolerance of the Plan and the desired degree of diversification.
These asset classes include publicly traded equities, bonds and alternative investments and are made up of individual investments in cash and cash equivalents, equity securities, debt securities, assetbacked securities, mortgage loans and hedge funds.
Hedge fund investments represent a diversified portfolio of partnership investments in a variety of strategies.
In addition, the Company uses U. S.  Treasury bond futures contracts and U. S.  Treasury STRIPS in a duration overlay program to adjust the duration of Plan assets to better match the duration of the benefit obligation.
Investment Valuation Pension Plan Assets at Fair Value as of December 31, 2018


| 2007 $2.6 | 20081 | 2009 | 2010 | 2011 | Thereafter | Total long-term debt |


| 2015 2014 | Indefinite-life intangible asset—Pullmantur trademarks and trade names | Impairment charge | Foreign currency translation adjustment | Total |


| Date Entered Maturity Date Hedge Designation Fixed Rate Floating Rate Index Notional Amount Fair Value | July 2005-1 | November 2008 | June 2009 | July 2009 | August 2009 | August 2009 |


| Target Allocation Range Target Percentage ofPlan Assets byStrategyatDecember 31 | PNC Pension Plan | Asset Category | Domestic Equity | International Equity | Private Equity | Total Equity | Domestic Fixed Income | High Yield Fixed Income | Total Fixed Income | Real estate | Other | Total |


| Year Ended December 31 2009 2008 Variance | Revenues | Operating earnings | Operating margin | Gulfstream aircraft deliveries (in units): | Green | Completion |


Properties, Plants, and Equipment.
Properties, plants, and equipment are recorded at cost.
Depreciation is recorded principally on the straight-line method at rates based on the estimated useful lives of the assets.
The following table details the weighted-average useful lives of structures and machinery and equipment by reporting segment (numbers in years):


Table of Contents Seasonality Our revenues are seasonal based on the demand for cruises.
Demand is strongest for cruises during the Northern Hemisphere’s summer months and holidays.
In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have focused on deployment in the Caribbean, Asia and Australia during that period.
Passengers and Capacity Selected statistical information is shown in the following table (see Financial Presentation- Description of Certain Line Items and Selected Operational and Financial Metrics under Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, for definitions):


New Accounting Standards Not Yet Adopted Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), requiring, among other things, the recognition of lease liabilities and corresponding right-of-use assets on the balance sheet by lessees for all leases with a term longer than 12 months.
The new standard is effective for Cadence in the first quarter of fiscal 2019.
A modified retrospective approach is required, applying the new standard to leases existing as of the date of initial application.
An entity may choose to apply the standard as of either its effective date or the beginning of the earliest comparative period presented in the financial statements.
Cadence adopted the new standard on December 30, 2018, the first day of fiscal 2019, and used the effective date as the date of initial application.
Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods prior to the first quarter of fiscal 2019.
Cadence elected certain practical expedients permitted under the transition guidance within the new standard, which among other things, allowed Cadence to carry forward its prior conclusions about lease identification and classification.


| Balance as of January 1, 2008 $580 | Warranty expense | Warranty claims | Balance as of December 31, 2008 | Warranty expense | Warranty claims | Balance as of December 31, 2009 |


| Year ended December 31, (in millions) 2010 2009 2008 | Investment banking fees | Principal transactions | Lending- and deposit-related fees | Asset management, administrationand commissions | Securities gains | Mortgage fees and related income | Credit card income | Other income | Noninterest revenue | Net interest income | Total net revenue |


| 2019 2018 2017 | Balance at beginning of year | Gross increases related to tax positions in a prior period | Gross decreases related to tax positions in a prior period | Gross increases related to tax positions in the current period | Settlements with taxing authorities | Currency | Lapse of statute of limitations | Balance at end of year |


* These financial instruments are not measured at fair value on a recurring basis.
See the indicated footnotes for additional information about the carrying and fair values of these financial instruments.
Foreign time deposits are measured at cost plus accrued interest, which approximates fair value.
A three-level valuation hierarchy exists for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.
The three levels are defined as follows: ?
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.  ?
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.  ?
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement.
An asset or liability's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
There are three types of valuation approaches: a market approach, which uses observable prices and other relevant information that is generated by market transactions involving identical or comparable assets or liabilities; an income approach, which uses valuation techniques to convert future amounts to a single, discounted present value amount; and a cost approach, which is based on the amount that currently would be required to replace the service capacity of an asset.
The following is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring


| Payments by Period | Total | Secured and unsecured debt-1 (2) | Estimated interest payments on fixed-rate and hedged variable-rate debt-3 | Estimated interest payments on variable-rate debt-4 | Ground lease obligations | Other obligations | Total |


| Year Ended December 31, | 2017 | (dollars in millions) | Assets | Interest-bearing cash and due from banks and deposits in banks | Taxable investment securities | Non-taxable investment securities | Total investment securities | Commercial | Commercial real estate | Leases | Total commercial loans and leases | Residential mortgages | Home equity loans | Home equity lines of credit | Home equity loans serviced by others | Home equity lines of credit serviced by others | Automobile | Education-1 | Credit cards | Other retail | Total retail loans | Total loans and leases-2 | Loans held for sale, at fair value | Other loans held for sale | Interest-earning assets | Allowance for loan and lease losses | Goodwill | Other noninterest-earning assets | Total noninterest-earning assets | Total assets | Liabilities and Stockholders’ Equity | Checking with interest | Money market accounts | Regular savings | Term deposits | Total interest-bearing deposits | Federal funds purchased and securities sold under agreements to repurchase-3 | Other short-term borrowed funds | Long-term borrowed funds | Total borrowed funds | Total interest-bearing liabilities | Demand deposits | Other liabilities | Total liabilities | Stockholders’ equity | Total liabilities and stockholders’ equity | Interest rate spread | Net interest income | Net interest margin | Memo: Total deposits (interest-bearing and demand) | For the Years Ended December 31, | 2005 | (In thousands) | Free Cash Flow | Add back: | Purchases of property and equipment | Net cash flows from operating activities |


| Period Total Number of Shares Purchased-1 Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs-1 Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs   (In millions) | 11/17/05 – 11/30/05 | 12/1/05 – 12/31/05 | Total Fourth Quarter |


| For the fiscal years ended June 30, | 2019 | (in millions, except %) | Revenues: | Circulation and subscription | Advertising | Other | Total Revenues | Operating expenses | Selling, general and administrative | Segment EBITDA |


| For the Year 2011 | Life | Revenue: | Premium | Net investment income | Other income | Total revenue | Expenses: | Policy benefits | Required interest on net reserves | Amortization of acquisition costs | Commissions and premium tax | Insurance administrative expense-3 | Parent expense | Stock-based compensation expense | Interest expense | Total expenses | Sub total | Non operating items | Amortization of low-income housing interests | Measure of segment profitability (pretax) | Deduct applicable income taxes | Segment profits after tax | Add back income taxes applicable to segment profitability | Add (deduct) realized investment gains (losses) | Deduct amortization of low-incomehousing -5 | Deduct state administrative settlementexpense -6 | Deduct loss on sale of equipment -7 | Deduct litigation expense -8 | Pretax income per Consolidated Statement of Operations |


| Year Ended December 31, | (dollars in millions) | Service charges and fees | Card fees | Mortgage banking fees | Trust and investment services fees | Foreign exchange and trade finance fees | Capital markets fees | Bank-owned life insurance income | Securities gains, net | Other income-1 | Noninterest income | Description of Commitment | (In millions) | Operating Leases | Capital Leases | Long-term Debt-1 | Endorsement Contracts-2 | Product Purchase Obligations-3 | Other-4 | TOTAL |


| Years Ended December 31, | 2014 | Weighted-average volatility | Weighted-average dividend yield | Weighted-average expected term | Weighted-average risk-free rate | Calendar year: | (Dollars in millions) | 2014 | 2013 | 2012 | 2011 | 2010 | Years Ended December 31, | (Dollars in millions) | 2014 | Attritional | Catastrophes | Total segment | 2013 | Attritional | Catastrophes | Total segment | 2012 | Attritional | Catastrophes | Total segment | Variance 2014/2013 | Attritional | Catastrophes | Total segment | Variance 2013/2012 | Attritional | Catastrophes | Total segment | (Some amounts may not reconcile due to rounding.) |


| 2004 2003 2002 | Revenues | Operating income/(loss) from discontinued operations | Gain/(loss) on discontinued operations | (Provision for)/benefit from income taxes | Income/(loss) from discontinued operations |


| June 25,2011 June 26,2010 June 27,2009 | (in thousands) | Net cash provided by operating activities | Net cash used in investing activities | Net cash used in financing activities | Net increase (decrease) in cash and cash equivalents |


[1] Yields calculated using annualized net investment income divided by the monthly average invested assets at amortized cost as applicable, excluding repurchase agreement and securities lending collateral, if any, and derivatives book value.
[2] Includes net investment income on short-term investments.
[3] Primarily includes income from derivatives that qualify for hedge accounting and hedge fixed maturities.
Year ended December 31, 2017 compared to the year ended December 31, 2016 Total net investment income increased primarily due to higher income from limited partnerships and other alternative investments, partially offset by lower make-whole payment income on fixed maturities and increased investment expense.
Income from limited partnerships and other alternative investments increased due to higher valuation write-ups of private equity partnerships and strong returns on real estate investments in 2017.
Annualized net investment income yield excluding limited partnerships and other alternative investments, was 3.7% in 2017 and 3.8% in 2016.
Excluding make-whole payment income on fixed maturities, income received from previously impaired securities, and prepayment penalties on mortgage loans, the annualized investment income yield, excluding limited partnerships and other alternative investments, was 3.6% in 2017 consistent with that of the same period for 2016.
Average reinvestment rate excluding certain U. S.  Treasury securities and cash equivalent securities, for the year ended December 31, 2017, was approximately 3.5% which was below the average yield of sales and maturities of 3.7% for the same period.
For the year ended December 31, 2017, the average reinvestment rate of 3.5% remained consistent with that of the same period in 2016.
We expect the annualized net investment income yield for the 2018 calendar year, excluding limited partnerships and other alternative investments, to be slightly below the portfolio yield earned in 2017.
This assumes the Company earns less income in 2018 from make-whole payment income on fixed maturities and recoveries on previously impaired securities than it did in 2017 and that reinvestment rates continue to be below the average yield of sales and maturities.
The estimated impact on net investment income is subject to change as the composition of the portfolio changes through portfolio management and changes in market conditions.
Year ended December 31, 2016 compared to the year ended December 31, 2015 Total net investment income increased primarily due to higher asset levels, partially offset by lower make-whole payments on fixed maturities as well as reinvesting at lower interest rates.


| Options (a,b) WeightedAverageExercisePrice WeightedAverageRemainingLife(years) AggregateIntrinsicValue(thousands) | Outstanding at December 31, 2010 | Exercised | Forfeited | Expired | Outstanding at December 31, 2011 | Granted | Exercised | Expired | Outstanding at December 31, 2012 | Granted | Exercised | Expired | Outstanding at December 31, 2013 |


Critical Accounting Estimates Our Consolidated Financial Statements include amounts that, either by their nature or due to requirements of accounting principles generally accepted in the U. S.  (GAAP), are determined using best estimates and assumptions.
While we believe that the amounts included in our Consolidated Financial Statements reflect our best judgment, actual amounts could ultimately materially differ from those currently presented.
We believe the items that require the most subjective and complex estimates are: ?
unpaid loss and loss expense reserves, including long-tail asbestos and environmental (A&E) reserves; ?
future policy benefits reserves; ?
valuation of value of business acquired (VOBA) and amortization of deferred policy acquisition costs and VOBA; ?
the assessment of risk transfer for certain structured insurance and reinsurance contracts; ?
reinsurance recoverable, including a provision for uncollectible reinsurance; ?
the valuation of our investment portfolio and assessment of other-than-temporary impairments (OTTI); ?
the valuation of deferred tax assets; ?
the valuation of derivative instruments related to guaranteed minimum income benefits (GMIB) ; and ?
the valuation of goodwill.
We believe our accounting policies for these items are of critical importance to our Consolidated Financial Statements.
The following discussion provides more information regarding the estimates and assumptions required to arrive at these amounts and should be read in conjunction with the sections entitled: Prior Period Development, Asbestos and Environmental and Other Run-off Liabilities, Reinsurance Recoverable on Ceded Reinsurance, Investments, Net Realized Gains (Losses), and Other Income and Expense Items.
Unpaid losses and loss expenses Overview and key data As an insurance and reinsurance company, we are required, by applicable laws and regulations and GAAP, to establish loss and loss expense reserves for the estimated unpaid portion of the ultimate liability for losses and loss expenses under the terms of our policies and agreements with our insured and reinsured customers.
The estimate of the liabilities includes provisions for claims that have been reported but are unpaid at the balance sheet date (case reserves) and for future obligations on claims that have been incurred but not reported (IBNR) at the balance sheet date (IBNR may also include a provision for additional development on reported claims in instances where the case reserve is viewed to be potentially insufficient).
Loss reserves also include an estimate of expenses associated with processing and settling unpaid claims (loss expenses).
At December 31, 2009, our gross unpaid loss and loss expense reserves were $37.8 billion and our net unpaid loss and loss expense reserves were $25 billion.
With the exception of certain structured settlements, for which the timing and amount of future claim payments are reliably determinable, our loss reserves are not discounted for the time value of money.
In connection with such structured settlements, we carry net reserves of $76 million, net of discount.
The table below presents a roll-forward of our unpaid losses and loss expenses for the years ended December 31, 2009 and 2008.


| 2007 2006 2005 | (in thousands, except per share data) | Basic EPS: | Net income available to common shareholders | Basic weighted average shares outstanding | Earnings per share | Diluted EPS: | Net income available to common shareholders | Basic weighted average shares outstanding | Plus: dilutive effect of stock options and restricted stock awards | Diluted weighted average shares outstanding | Earnings per share |


| Target Allocation April 27, 2018 Actual Allocation | April 27, 2018 | Asset Category: | Equity securities | Debt securities | Other | Total |


| $ in millions Gross Book Value Accumulated Impairment Net Book Value | January 1, 2011 | Business combinations | Foreign exchange and other | December 31, 2011 | January 1, 2010 | Business combinations | Foreign exchange and other | December 31, 2010 |


Environmental Matters Our operations, like operations of other companies engaged in similar businesses, involve the use, disposal and cleanup of substances regulated under environmental protection laws.
We are involved in a sizable number of remediation actions to clean up hazardous wastes as required by federal and state laws.
Such statutes require that responsible parties fund remediation actions regardless of fault, legality of original disposal or ownership of a disposal site.
Expenditures for site remediation actions amounted to approximately $0.3 billion in 2008 and $0.2 billion in 2007.
We presently expect that such remediation actions will require average annual expenditures in the range of $0.3 billion to $0.4 billion over the next two years.
In November 2006, the United States Federal District Court approved a consent decree, which had been agreed to by GE and the United States Environmental Protection Agency (EPA), that represents a comprehensive framework for implementation of the EPA’s 2002 decision to dredge polychlorinated biphenyl (PCB)-containing sediments in the upper Hudson River.
The dredging will be performed in two phases with an intervening peer review of performance after the first phase.
Under the consent decree, we have committed to reimburse the EPA for its past and future project oversight costs and to perform the first phase of dredging, which is scheduled to proceed from May through November of 2009.
After completion of the peer review, currently scheduled for 2010, we may be responsible for further costs.
Our Statement of Financial Position as of December 31, 2008 and 2007, included liabilities for the probable and estimable costs of the agreed upon remediation activities.


Proven, or measured, reserves are those reserves for which the quantity is computed from dimensions revealed by drill data, together with other direct and measurable observations, such as outcrops, trenches and quarry faces.
The grade and quality of those reserves are computed from the results of detailed sampling, and the sampling and measurement data are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established.
Probable, or indicated, reserves are those reserves for which quantity, grade and quality are computed partly from specific measurements and partly from projections based on reasonable, though not drilled, geologic evidence.
The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
Reported proven and probable reserves include only quantities that are owned in fee or under lease, and for which all appropriate zoning and permitting have been obtained.
Leases, zoning, permits, reclamation plans and other government or industry regulations often set limits on the areas, depths and lengths of time allowed for mining, stipulate setbacks and slopes that must be left in place, and designate which areas may be used for surface facilities, berms, and overburden or waste storage, among other requirements and restrictions.
Our reserve estimates take into account these factors.
Technical and economic factors also affect the estimates of reported reserves regardless of what might otherwise be considered proven or probable based on a geologic analysis.
For example, excessive overburden or weathered rock, rock quality issues, excessive mining depths, groundwater issues, overlying wetlands, endangered species habitats, and rights of way or easements may effectively limit the quantity of reserves considered proven and probable.
In addition, computations for reserves in-place are adjusted for estimates of unsaleable sizes and materials as well as pit and plant waste.
The 15.8 billion tons of estimated proven and probable aggregates reserves reported at the end of 2014 include reserves at inactive and greenfield (undeveloped) sites.


| VIE Assets That the  Company Does Not Consolidate VIE Liabilities That the  Company Does Not Consolidate Variable Interests on the Statement of Financial Condition | Investments | CDOs | Sponsored cash management funds | Other sponsored investment funds | Total |


| Payments Due by Period | (In Millions) | Operating lease obligations | Capital purchase obligations1 | Other purchase obligations and commitments2 | Tax obligations3 | Long-term debt obligations4 | Other long-term liabilities5 | Total6 |


| RM&T Operating Statistics 2008 2007 | Refining and wholesale marketing gross margin(Dollars per gallon)(a) | Refined products sales volumes(Thousands of barrels per day) |


| Years Ended December 31, | 2015 | Rocky Mountain Region (Cheyenne and Woods Cross Refineries) | Sales of produced refined products: | Gasolines | Diesel fuels | Jet fuels | Fuel oil | Asphalt | LPG and other | Total | December 31, 2010 | Financial Services Businesses | (in millions) | Joint ventures and limited partnerships: | Real estate related | Non-real estate related | Real estate held through direct ownership -1 | Other -2 | Total other long-term investments |


THE HERSHEY COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) The 2006 charges (credits) relating to previous business realignment initiatives which began in 2003 and 2001 resulted from the finalization of the sale of certain properties, adjustments to liabilities which had previously been recorded, and the impact of the settlement of litigation in connection with the 2003 business realignment initiatives.
Liabilities Associated with Business Realignment Initiatives The liability balance as of December 31, 2008 relating to the 2007 business realignment initiatives was $31.0 million for employee separation costs to be paid primarily in 2009.
The liability balance as of December 31, 2007 was $68.4 million, primarily related to employee separation costs.
Charges for employee separation and contract termination costs of $12.9 million were recorded in 2008.
During 2008 and 2007, we made payments against the liabilities recorded for the 2007 business realignment initiatives of $46.9 million and $13.2 million, respectively, principally related to employee separation and project administration.
The liability balance as of December 31, 2008 was reduced by $3.4 million as a result of foreign currency translation adjustments.4.
COMMITMENTS AND CONTINGENCIES We enter into certain obligations for the purchase of raw materials.
These obligations are primarily in the form of forward contracts for the purchase of raw materials from third-party brokers and dealers.
These contracts minimize the effect of future price fluctuations by fixing the price of part or all of these purchase obligations.
Total obligations for each year consisted of fixed price contracts for the purchase of commodities and unpriced contracts that were valued using market prices as of December 31, 2008.
The cost of commodities associated with the unpriced contracts is variable as market prices change over future periods.
We mitigate the variability of these costs to the extent that we have entered into commodities futures and options contracts to hedge our costs for those periods.
Increases or decreases in market prices are offset by gains or losses on commodities futures contracts.
Taking delivery of and making payments for the specific commodities for use in the manufacture of finished goods satisfies our obligations under the forward purchase contracts.
For each of the three years in the period ended December 31, 2008, we satisfied these obligations by taking delivery of and making payment for the specific commodities.
As of December 31, 2008, we had entered into purchase agreements with various suppliers.
Subject to meeting our Companys quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2008:


| Year Ended January 1, 2006 Year Ended January 2, 2005 | Revenue | Net loss | Net loss per share, basic and diluted |


| 2015 | $ in millions | Other comprehensive income/(loss) net of tax: | Currency translation differences on investments in foreign subsidiaries | Actuarial gain/(loss) related to employee benefit plans | Reclassification of prior service (credit)/cost into employee compensation expense | Reclassification of actuarial (gains)/losses into employee compensation expenses | Share of other comprehensive income/(loss) of equity method investments | Unrealized gains/(losses) on available-for-sale investments | Reclassification of net (gains)/losses realized on available-for-sale investments included in other gains and losses, net | Other comprehensive income/(loss) | Beginning balance | Other comprehensive income/(loss) | Ending balance |


| 2013 2012 2011 | Net sales | Operating profit | Operating margins | Backlog at year-end |


Capital Structure We use a combination of debt and equity sources to fund our business objectives.
We maintain a capital structure, focused on maintaining access, flexibility and low costs, that we believe allows us to proactively source potential investment opportunities in the marketplace.
We structure our debt maturities to avoid disproportionate exposure in any given year.
Our primary debt financing strategy is to access the unsecured debt markets to provide our debt capital needs, but we also maintain a limited amount of secured debt and maintain our access to both the secured and unsecured debt markets for maximum flexibility.
We also believe that we have significant access to the equity capital markets.
At December 31, 2017, 27.5% of our total market capitalization consisted of debt borrowings, including 21.5% under unsecured credit facilities and unsecured senior notes and 6.0% under secured borrowings.
We currently intend to target our total debt, net of cash held, to a range of approximately 32% to 38% of the undepreciated book value of our assets.
Our charter and bylaws do not limit our debt levels and our Board of Directors can modify this policy at any time.
We may issue new equity to maintain our debt within the target range.
Covenants for our unsecured senior notes limit our debt to undepreciated book value of our assets to 60%.
As of December 31, 2017, our ratio of total debt to our adjusted total assets (as defined in the covenants for the bonds issued by MAALP) was approximately 33.2%.
We continuously review opportunities for lowering our cost of capital.
We plan to continue using unsecured debt in order to take advantage of the lower cost of capital and flexibility provided by these markets.
We will evaluate opportunities to repurchase shares when we believe that our share price is significantly below our net present value.
We also look for opportunities where we can acquire or develop apartment communities, selectively funded or partially funded by sales of equity securities, when appropriate opportunities arise.
We focus on improving the net present value of our investments by generating cash flows from our portfolio of assets above the estimated total cost of debt and equity capital.
We routinely make new investments when we believe it will be accretive to shareholder value over the life of the investments.


| Year Ended December 31, | 2010 | Beginning Balance | Additions based on positions related to the current year | Additions based on positions related to the prior year | Reductions for tax positions of prior years | Settlements with taxing authorities | Statute of limitation expirations | Ending Balance |


Additionally, we performed a sensitivity analysis and reviewed the carrying values compared to the high end and low end of the valuation range.
The table below displays the range of the sensitivity analysis for each reporting unit tested in the 2013 and 2012 annual impairment tests.
For the 2013 test, using the low of the valuation range, there were two reporting units whose fair value exceeded its carrying value by less than 20%, but not less that 0%.
For the 2012 test, using the low of the valuation range, there were no reporting units whose fair value exceeded its carrying value by less than 20%.


| Pension benefits | 2016 | The projected benefit obligation and accumulated benefit obligation for all defined benefit pension plans was asfollows: | Projected benefit obligation | Accumulated benefit obligation | The aggregate projected benefit obligation and fair value of plan assets for pension plans with projected benefit obligations inexcess of plan assets was as follows: | Projected benefit obligation | Fair value of plan assets | The aggregate accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligationsin excess of plan assets was as follows: | Accumulated benefit obligation | Fair value of plan assets | Pension benefits -1 | 2016 | Service cost | Interest cost | Expected return on plan assets | Recognized net actuarial loss | Amortization of prior service cost (benefit) | Settlements-3 | Curtailments-4 | Special termination benefits-5 | Net periodic benefit cost-6 | Discontinued operations | Net amount recognized in Statement of Consolidated Operations | Year ended December 31, | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 through 2026 | $4,330 |


MARKET RISK MANAGEMENT Market risk is the exposure to an adverse change in the market value of portfolios and financial instruments caused by a change in market prices or rates.
Market risk management Market risk is identified, measured, monitored, and controlled by Market Risk, a corporate risk governance function independent of the lines of business.
Market Risk seeks to facilitate efficient risk/return decisions, reduce volatility in operating performance and make the Firms market risk profile transparent to senior management, the Board of Directors and regulators.
Market Risk is overseen by the Chief Risk Officer and performs the following functions: ?
Establishment of a comprehensive market risk policy framework ?
Independent measurement, monitoring and control of business segment market risk ?
Definition, approval and monitoring of limits ?
Performance of stress testing and qualitative risk assessments Risk identification and classification Market Risk works in partnership with the business segments to identify market risks throughout the Firm and define and monitor market risk policies and procedures.
All business segments are responsible for the comprehensive identification and verification of market risks within their units.
Risk-taking businesses have functions that act independently from trading personnel and are responsible for verifying risk exposures that the business takes.
In addition to providing independent oversight for market risk arising from the business segments, Market Risk is also responsible for identifying exposures which may not be large within individual business segments but which may be large for the Firm in the aggregate.
Regular meetings are held between Market Risk and the heads of risk-taking businesses to discuss and decide on risk exposures in the context of the market environment and client flows.
Positions that expose the Firm to market risk can be classified into two categories: trading and nontrading risk.
Trading risk includes positions that are held by the Firm as part of a business segment or unit, the main business strategy of which is to trade or make markets.
Unrealized gains and losses in these positions are generally reported in principal transactions revenue.
Nontrading risk includes securities and other assets held for longer-term investment, mortgage servicing rights, and securities and derivatives used to manage the Firms asset/liability exposures.
Unrealized gains and losses in these positions are generally not reported in principal transactions revenue.
Notes to consolidated financial statements 174 JPMorgan Chase & Co.  / 2008 Annual Report card-related asset-backed securities, mortgage-backed securities issued by private issuers and commercial and industrial asset-backed securities.
Of the $2.0 billion of unrealized losses related to credit card-related asset-backed securities, $1.7 billion relates to purchased credit card-related asset-backed securities, and $304 million relates to retained interests in the Firms own credit card receivable securitizations.
The credit card-related asset-backed securities include AAA, A and BBB ratings.
Based on the levels of excess spread available to absorb credit losses, and based on the value of interests subordinate to the Firms interests where applicable, the Firm does not believe it is probable that it will not recover its investments.
Where applicable under EITF 99-20, the collateral and credit enhancement features are at levels sufficient to ensure that an adverse change in expected future cash flows has not occurred.
Of the remaining unrealized losses as of December 31, 2008, related to securities that have been in an unrealized loss position for less than 12 months, $2.7 billion relates to mortgage-backed securities issued by private issuers and $820 million relates to commercial and industrial asset-backed securities.
The mortgage-backed securities and commercial and industrial asset-backed securities are predominantly rated AAA.
Based on an analysis of the performance indicators noted above for mortgage-backed securities and asset-backed securities, which have been applied to the loans underlying these securities, the Firm does not believe it is probable that it will not recover its investments in these securities.
The Firm intends to hold the securities in an unrealized loss position for a period of time sufficient to allow for an anticipated recovery in fair value or maturity.
The Firm has sufficient capital and liquidity to hold these securities until recovery in fair value or maturity.
Based on the Firms evaluation of the factors and other objective evidence described above, the Firm believes that the securities are not otherthan-temporarily impaired as of December 31, 2008.


| Net tangible assets acquired as of July 27, 2006 $13,100 | In-process research and development | Developed technology and know-how | Customer relationship | Trade name | Deferred income taxes | Goodwill | Final purchase price |


| Year Ended December 31, | 2015 | (in millions) | Assets: | Commercial mortgage and other loans: | Changes in instrument-specific credit risk | Other changes in fair value | Other long-term investments: | Changes in fair value | Liabilities: | Notes issued by consolidated VIEs: | Changes in fair value |


| Plan category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights-1(a)(b) Weighted-Average Exercise Price of Outstanding Options,Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding SecuritiesReflected in Column (a)) (c) | Equity compensation plans approved by security holders | Equity compensation plans not approved by security holders-2 | Total |


| Contractual Obligations Total 2009 2010 and 2011 2012 and 2013 2014 and Thereafter | Long-term debt | Operating leases | Purchase obligations | Long-term income taxes payable | Other long-term liabilities | Total contractual obligations |


| Performance   Shares Weighted Average   Grant Date   Fair Value | Outstanding at January 1, 2007 | Granted | Forfeited | Outstanding at December 31, 2007 | Performance Shares expected to vest at December 31, 2007 |


Unrealized Loss Aging for AFS Securities by Type and Length of Time as of December 31, 2017


Investment Valuation.
Our fixed income investments are classified for accounting purposes as available for sale and are carried at market value or fair value in our consolidated balance sheets.
Our equity securities are also held as available for sale and are carried at market or fair value.
Most securities we own are traded on national exchanges where market values are readily available.
Some of our commercial mortgage-backed securities (“CMBS”) are valued using cash flow models and risk-adjusted discount rates.
We hold some privately placed securities, less than 0.33% of the portfolio, that are either valued by brokers or an investment advisor.
At December 31, 2012 and 2011, our investment portfolio included $548.9 million and $515.5 million, respectively, of limited partnership investments whose values are reported pursuant to the equity method of accounting.
We carry these investments at values provided by the managements of the limited partnerships and due to inherent reporting lags, the carrying values are based on values with “as of” dates from one month to one quarter prior to our financial statement date.


| February 28, 2009 March 1, 2008 | Gross Carrying Amount | Tradenames | Customer relationships | Total |


| Fiscal Year Ended October 31,-1 | 2016 | (in thousands, except per share data) | Revenue | Income before provisions for income taxes | Provision (benefit) for income taxes(2) | Net income | Net income per share: | Basic | Diluted | Working capital-3 | Total assets | Long-term debt | Stockholders’ equity |


| 2010 Quarters 2009 Quarters | (Dollars in millions, except per share information) | Reconciliation of net interest income to net interest income on a fully taxable-equivalent basis | Net interest income | Fully taxable-equivalent adjustment | Net interest income on a fully taxable-equivalent basis | Reconciliation of total revenue, net of interest expense to total revenue, net of interest expense on a fully taxable-equivalent basis | Total revenue, net of interest expense | Fully taxable-equivalent adjustment | Total revenue, net of interest expense on a fully taxable-equivalent basis | Reconciliation of total noninterest expense to total noninterest expense, excluding goodwill impairment charges | Total noninterest expense | Goodwill impairment charges | Total noninterest expense, excluding goodwill impairment charges | Reconciliation of income tax expense (benefit) to income tax expense (benefit) on a fully taxable-equivalent basis | Income tax expense (benefit) | Fully taxable-equivalent adjustment | Income tax expense (benefit) on a fully taxable-equivalent basis | Reconciliation of net income (loss) to net income (loss), excluding goodwill impairment charges | Net income (loss) | Goodwill impairment charges | Net income (loss), excluding goodwill impairment charges | Reconciliation of net income (loss) applicable to common shareholders to net income (loss) applicable to common shareholders, excluding goodwill impairment charges | Net income (loss) applicable to common shareholders | Goodwill impairment charges | Net income (loss) applicable to common shareholders, excluding goodwill impairment charges | Reconciliation of average common shareholders’ equity to average tangible common shareholders’ equity | Common shareholders’ equity | Common Equivalent Securities | Goodwill | Intangible assets (excluding MSRs) | Related deferred tax liabilities | Tangible common shareholders’ equity |


Notes to Consolidated Financial Statements – (continued) (Amounts in Millions, Except Per Share Amounts) Debt Transactions See Note 6 for further information regarding the Company’s acquisition of Acxiom (the “Acxiom Acquisition”) on October 1, 2018 (the “Closing Date”).
Senior Notes On September 21, 2018, in order to fund the Acxiom Acquisition and related fees and expenses, we issued a total of $2,000.0 in aggregate principal amount of unsecured senior notes (in four separate series of $500.0 each, together, the “Senior Notes”).
Upon issuance, the Senior Notes were reflected on our Consolidated Balance Sheets net of discount of $5.8 and net of the capitalized debt issuance costs, including commissions and offering expenses of $16.1, both of which will be amortized in interest expense through the respective maturity dates of each series of Senior Notes using the effective interest method.
Interest is payable semi-annually in arrears on April 1st and October 1st of each year, commencing on April 1, 2019.
The issuance was comprised of the following four series of notes:


Description of business segment reporting methodology Results of the business segments are intended to reflect each segment as if it were essentially a stand-alone business.
The management reporting process that derives these results allocates income and expense using market-based methodologies.
At the time of the Merger, several of the allocation methodologies were revised, as noted below.
The changes became effective July 1, 2004.
As prior periods have not been revised to reflect these new methodologies, they are not comparable to the presentation of periods beginning with the third quarter of 2004.
Further, the Firm intends to continue to assess the assumptions, methodologies and reporting reclassifications used for segment reporting, and it is anticipated that further refinements may be implemented in future periods.
Revenue sharing When business segments join efforts to sell products and services to the Firms clients, the participating business segments agree to share revenues from those transactions.
These revenue sharing agreements were revised on the Merger date to provide consistency across the lines of businesses.
Funds transfer pricing Funds transfer pricing (FTP) is used to allocate interest income and interest expense to each line of business and also serves to transfer interest rate risk to Corporate.
While business segments may periodically retain interest rate exposures related to customer pricing or other business-specific risks, the balance of the Firms overall interest rate risk exposure is included and managed in Corporate.
In the third quarter of 2004, FTP was revised to conform the policies of the combined firms.
Expense allocation Where business segments use services provided by support units within the Firm, the costs of those support units are allocated to the business segments.
Those expenses are allocated based on their actual cost, or the lower of actual cost or market cost, as well as upon usage of the services provided.
Effective with the third quarter of 2004, the cost allocation methodologies of the heritage firms were aligned to provide consistency across the business segments.
In addition, expenses related to certain corporate functions, technology and operations ceased to be allocated to the business segments and are retained in Corporate.
These retained expenses include parent company costs that would not be incurred if the segments were stand-alone businesses; adjustments to align certain corporate staff, technology and operations allocations with market prices; and other one-time items not aligned with the business segments.
Capital allocation Each business segment is allocated capital by taking into consideration standalone peer comparisons, economic risk measures and regulatory capital requirements.
The amount of capital assigned to each business is referred to as equity.
Effective with the third quarter of 2004, new methodologies were implemented to calculate the amount of capital allocated to each segment.
As part of the new methodology, goodwill, as well as the associated capital, is allocated solely to Corporate.
Although U. S.  GAAP requires the allocation of goodwill to the business segments for impairment testing (see Note 15 on page 109 of this Annual Report), the Firm has elected not to include goodwill or the related capital in each of the business segments for management reporting purposes.
See the Capital management section on page 50 of this Annual Report for a discussion of the equity framework.
Credit reimbursement TSS reimburses the IB for credit portfolio exposures the IB manages on behalf of clients the segments share.
At the time of the Merger, the reimbursement methodology was revised to be based on pre-tax earnings, net of the cost of capital related to those exposures.
Prior to the Merger, the credit reimbursement was based on pre-tax earnings, plus the allocated capital associated with the shared clients.
Tax-equivalent adjustments Segment results reflect revenues on a tax-equivalent basis for segment reporting purposes.
Refer to page 25 of this Annual Report for additional details.


| December 31, 2010 2010 | (Dollars in millions) | With no recorded allowance | Residential mortgage | Home equity | Discontinued real estate | With an allowance recorded | Residential mortgage | Home equity | Discontinued real estate | Total | Residential mortgage | Home equity | Discontinued real estate |


| Year Ended December 31, | 2005 | Gas delivered (mDTH) | Firm Sales | Full service | Firm transportation | Total Firm Sales and Transportation | Interruptible Sales | Total Gas Sold To O&R Customers | Transportation of customer-owned gas | Interruptible transportation | Sales for resale | Sales to electric generating stations | Off-System Sales | Total Sales and Transportation | Gas delivered ($ in millions) | Firm Sales | Full service | Firm transportation | Total Firm Sales and Transportation | Interruptible Sales | Total Gas Sold To O&R Customers | Transportation of customer-owned gas | Sales to electric generating stations | Other operating revenues | Total Sales and Transportation | Average Revenue Per DTH Sold | Residential | General |


| (Dollars in millions) 2008 2007 | Principal Investing | Corporate Investments | Strategic and other investments | Total equity investment income included in All Other | Total equity investment income included in the business segments | Total consolidated equity investment income |


PNC PENSION PLAN ASSETS Assets related to our qualified pension plan (the Plan) are held in trust (the Trust).
Effective July 1, 2011, the trustee is The Bank of New York Mellon; prior to that date, the trustee was PNC Bank, National Association, (PNC Bank, N. A).
The Trust is exempt from tax pursuant to section 501(a) of the Internal Revenue Code (the Code).
The Plan is qualified under section 401(a) of the Code.
Plan assets consist primarily of listed domestic and international equity securities and US government, agency, and corporate debt securities and real estate investments.
Plan assets as of December 31, 2011 and 2010 include common stock of PNC.
PNC Common Stock was $11 million and $12 million at December 31, 2011 and December 31, 2010, respectively.
At December 31, 2011, this accounted for less than 1% of our total asset balance.
The Pension Plan Administrative Committee (the Committee) adopted a current Pension Plan Investment Policy Statement, including target allocations and allowable ranges, on August 13, 2008.
On February 25, 2010, the Committee amended the investment policy to include a dynamic asset allocation approach and also updated target allocation ranges for certain asset categories.
On March 1, 2011, the Committee amended the investment policy to update the target allocation ranges for certain asset categories.
The long-term investment strategy for pension plan assets is to: ?
Meet present and future benefit obligations to all participants and beneficiaries, ?
Cover reasonable expenses incurred to provide such benefits, including expenses incurred in the administration of the Trust and the Plan, ?
Provide sufficient liquidity to meet benefit and expense payment requirements on a timely basis, and ?
Provide a total return that, over the long term, maximizes the ratio of trust assets to liabilities by maximizing investment return, at an appropriate level of risk.
Under the dynamic asset allocation strategy, scenarios are outlined in which the Committee has the ability to make short to intermediate term asset allocation shifts based on factors such as the Plans funded status, the Committees view of return on equities relative to long term expectations, the Committees view on the direction of interest rates and credit spreads, and other relevant financial or economic factors which would be expected to impact the ability of the Trust to meet its obligation to beneficiaries.
Accordingly, the allowable asset allocation ranges have been updated to incorporate the flexibility required by the dynamic allocation policy.
The Plans specific investment objective is to meet or exceed the investment policy benchmark over the long term.
The investment policy benchmark compares actual performance to a weighted market index, and measures the contribution of active investment management and policy implementation.
This investment objective is expected to be achieved over the long term (one or more market cycles) and is measured over rolling five-year periods.
Total return calculations are timeweighted and are net of investment-related fees and expenses.
The asset strategy allocations for the Trust at the end of 2011 and 2010, and the target allocation range at the end of 2011, by asset category, are as follows: Asset Strategy Allocations


The principal source of parent company cash flow is the dividends it receives from its subsidiary bank, which may be impacted by the following: ?
Capital needs, ?
Laws and regulations, ?
Corporate policies, ?
Contractual restrictions, and ?
Other factors.
Also, there are statutory and regulatory limitations on the ability of national banks to pay dividends or make other capital distributions.
The amount available for dividend payments to the parent company by PNC Bank, N. A.  without prior regulatory approval was approximately $1.5 billion at December 31, 2012.
Under federal law, a bank subsidiary generally may not extend credit to, or engage in other types of covered transactions (including the purchase of assets) with, the parent company or its non-bank subsidiaries on terms and under circumstances that are not substantially the same as comparable transactions with nonaffiliates.
A bank subsidiary may not extend credit to, or engage in a covered transaction with, the parent company or a non-bank subsidiary if the aggregate amount of the banks extensions of credit and other covered transactions with the parent company or non-bank subsidiary exceeds 10% of the capital stock and surplus of such bank subsidiary or the aggregate amount of the banks extensions of credit and other covered transactions with the parent company and all nonbank subsidiaries exceeds 20% of the capital and surplus of such bank subsidiary.
Such extensions of credit, with limited exceptions, must be at least fully collateralized in accordance with specified collateralization thresholds, with the thresholds varying based on the type of assets serving as collateral.
In certain circumstances, federal regulatory authorities may impose more restrictive limitations.
Federal Reserve Board regulations require depository institutions to maintain cash reserves with a Federal Reserve Bank (FRB).
At December 31, 2012, the balance outstanding at the FRB was $3.5 billion.
NOTE 23 LEGAL PROCEEDINGS We establish accruals for legal proceedings, including litigation and regulatory and governmental investigations and inquiries, when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated.
Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances.
When we are able to do so, we also determine estimates of possible losses or ranges of possible losses, whether in excess of any related accrued liability or where there is no accrued liability, for disclosed legal proceedings (Disclosed Matters, which are those matters disclosed in this Note 23).
For Disclosed Matters where we are able to estimate such possible losses or
REPUBLIC SERVICES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) The following table summarizes the activity in our gross unrecognized tax benefits for the years ended December 31:


| Years Ended December 31, | 2010 | CIEs | (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 | Pretax income (loss) | Income tax benefit | Net income (loss) | Less: Net income attributable to noncontrolling interests | Net loss attributable to Ameriprise Financial |


| 2008 2007 2006 | (In millions except per share data) | Income from continuing operations | Discontinued operations | Net income | Weighted average common shares outstanding | Effect of dilutive securities | Weighted average common shares, including dilutive effect | Per share: | Income from continuing operations | Discontinued operations | Net income |


| Years Ended December 31, 2013 2012 2011 % Change2013 vs. 2012 | (Dollars in millions) | Foreign exchange trading: | Direct sales and trading | Indirect foreign exchange trading | Total foreign exchange trading | Brokerage and other trading services: | Electronic foreign exchange trading | Other trading, transition management and brokerage | Total brokerage and other trading services | Total trading services revenue |


Institutional active AUM ended 2015 at $962.9 billion, reflecting $26.8 billion of net inflows.
Institutional active represented 22% of long-term AUM and 20% of long-term base fees.
Growth in AUM reflected continued strength in multi-asset class products with net inflows of $18.4 billion reflecting ongoing demand for solutions offerings and the LifePath?
target-date suite.
Our top-performing fixed income platform generated net inflows of $5.7 billion, diversified across exposures.
Alternatives net inflows of $3.1 billion were led by inflows into infrastructure and alternatives solutions offerings.
In addition, 2015 was another strong fundraising year for illiquid alternatives, and we raised over $5 billion in new commitments, which will be a source of future net inflows.
Equity net outflows of $0.5 billion reflected fundamental net outflows of $2.2 billion, which were partially offset by scientific net inflows of $1.7 billion.
Institutional index AUM totaled $1.739 trillion at December 31, 2015, reflecting net outflows of $43.1 billion.
Equity net outflows of $33.7 billion were primarily due to low-fee global and regional index equity outflows as clients looked to re-allocate, re-balance or meet their cash needs.
Fixed income net outflows of $10.2 billion were concentrated in local currency mandates, linked to outflows from liability management strategies.
Institutional index represented 40% of long-term AUM at December 31, 2015 and accounted for 10% of long-term base fees for 2015.
The Companys institutional clients consist of the following: ?
Pensions, Foundations and Endowments.
BlackRock is among the worlds largest managers of pension plan assets with $1.847 trillion, or 68%, of long-term institutional AUM managed for defined benefit, defined contribution and other pension plans for corporations, governments and unions at December 31, 2015.
The market landscape is shifting from defined benefit to defined contribution, driving strong flows in our defined contribution channel, which had $36.2 billion of longterm net inflows for the year, or 6% organic growth, driven by continued demand for our LifePath targetdate suite.
Defined contribution represented $630.9 billion of total pension AUM, and we remain well positioned to capitalize on the on-going evolution of the defined contribution market and demand for outcomeoriented investments.
An additional $52.8 billion, or 2% of long-term institutional AUM, was managed for other tax-exempt investors, including charities, foundations and endowments.  ?
Official Institutions.
We also managed $185.0 billion, or 7%, of long-term institutional AUM for official institutions, including central banks, sovereign wealth funds, supranationals, multilateral entities and government ministries and agencies at year-end 2015.
These clients often require specialized investment advice, the use of customized benchmarks and training support.  ?
Financial and Other Institutions.
BlackRock is a top independent manager of assets for insurance companies, which accounted for $237.7 billion, or 9%, of institutional long-term AUM at year-end 2015.
Assets managed for other taxable institutions, including corporations, banks and third-party fund sponsors for which we provide sub-advisory services, totaled $379.4 billion, or 14%, of long-term institutional AUM at yearend.
PRODUCT TYPE Component changes in AUM by product type and investment style for 2015 are presented below


| Year Ended December 31, | 2017 | Net income (loss) applicable to common shares | NAREIT FFO | FFO as adjusted | FAD |


| 2017 2016 2015 | Weighted average common shares outstanding for basic computations | Weighted average dilutive effect of equity awards | Weighted average common shares outstanding for diluted computations |


*As adjusted for discontinued operations.
The increase in interest income on cash and marketable securities held by corporate and other segments was a result of higher average cash and marketable securities balances, partially offset by the impact of lower interest rates earned on these balances, and $6 million in interest income recorded as a result of a refund from the United States Internal Revenue Service.
The decrease in QSI interest income was primarily the result of the prepayment on the Pegaso debt facility in the first quarter of fiscal 2004.
The other-than-temporary losses on marketable securities during fiscal 2003 primarily related to an $81 million impairment of our investment in a wireless operator in South Korea and a $16 million impairment of our investment in a provider of semiconductor packaging, test and distribution services.
The other-than-temporary losses on other investments during fiscal 2003 related to the impairment of our investments in two development stage CDMA wireless operators.
Equity in losses of investees decreased primarily due to a decrease in losses incurred by Inquam, of which our share was $59 million for fiscal 2004 as compared to $99 million for fiscal 2003.
Income Tax Expense.
Income tax expense from continuing operations was $588 million for fiscal 2004, compared to $536 million for fiscal 2003.
The annual effective tax rate for continuing operations was approximately 25% for fiscal 2004, compared to 34% for fiscal 2003.
The annual effective tax rate for continuing operations for fiscal 2004 was lower than the 2003 effective tax rate for continuing operations primarily due to an increase in foreign earnings taxed at less than the United States federal tax rate, an increase in tax benefits recorded arising from the forecast of our ability to use capital loss carryforwards and the reduction of QTL earnings, which are taxed at a rate that is lower than our effective tax rate, as a percentage of total earnings due to the change in the timing of recognizing QTL royalties.
Foreign earnings taxed at less than the United States federal rate are higher in fiscal 2004 primarily due to the adjustment of an intercompany royalty agreement and an increase in foreign earnings.
The annual effective tax rate for continuing operations for fiscal 2004 is 10% lower than the United States federal statutory rate due primarily to a benefit of approximately 14% related to foreign earnings taxed at less than the United States federal rate, research and development tax credits and the forecast of our increased ability to use capital loss carryforwards, partially offset by state taxes of 4%.
As of September 30, 2004, we had a valuation allowance of $139 million on previously incurred capital losses due to uncertainty as to our ability to generate sufficient capital gains to utilize all capital losses.
We will continue to assess the realizability of capital losses.
The amount of the valuation allowance on capital losses may be adjusted in the future as our ability to utilize capital losses changes.
A change in the valuation allowance may impact the provision for income taxes in the period the change occurs.
We are currently considering actions that may result in our ability to utilize some of the capital loss currently reserved, which may result in a reduction of our valuation allowance and income tax expense in subsequent periods.
Fiscal 2003 Compared to Fiscal 2002 Revenues.
Total revenues for fiscal 2003 were $3,847 million, compared to $2,915 million for fiscal 2002.
Revenues from Samsung, LG Electronics, Motorola and Kyocera, customers of our QCT, QTL and other nonreportable segments, comprised an aggregate of 17%, 13%, 13% and 9% of total consolidated revenues, respectively, in fiscal 2003, compared to 16%, 12%, 8% and 14% of total consolidated revenues, respectively, in fiscal 2002.
The percentages for Kyocera included 1% and 4% in fiscal 2003 and 2002, respectively, related to services provided to Kyocera by employees from our terrestrial-based CDMA wireless consumer phone business which was sold to Kyocera in February 2000.
Revenues from sales of equipment and services for fiscal 2003 were $2,862 million, compared to $2,080 million for fiscal 2002.
Revenues from sales of integrated circuits increased by $828 million, primarily due to an increase in unit shipments of MSM and accompanying RF integrated circuits.
Revenues from licensing and royalty fees for fiscal 2003 were $985 million, compared to $835 million for fiscal 2002.
The increase resulted from higher QTL segment royalties, resulting from an increase in phone sales by our licensees.


The pension liabilities, net of pension assets, recognized on the balance sheet at October 31, 2012, 2011 and 2010 were $1,817 million, $1,373 million and $693 million, respectively.
The OPEB liabilities, net of OPEB assets, on these same dates were $5,736 million, $5,193 million and $4,830 million, respectively.
The increases in pension net liabilities in 2012 and 2011 were primarily due to decreases in discount rates and interest on the liabilities, partially offset by the return on plan assets.
The increases in the OPEB net liabilities in 2012 and 2011 were primarily due to the decreases in discount rates and interest on the liabilities.
The effect of hypothetical changes to selected assumptions on the companys major U. S.  retirement benefit plans would be as follows in millions of dollars:


| ($ in millions) Proceeds | 3-year variable rate bank loan-1 | 2.30% notes, due 2019 | 15-year 2.5% fixed rate note-1 | 30-year 3.0% fixed rate note-1 | Total cash proceeds |


| Year Ended December 31, 2011 2010 2009 | Stock-based compensation expense | Advertising expenses | Bottling and distribution expenses | Other operating expenses | Selling, general and administrative expenses |


APACHE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued) As of December 31, 2012, the Company had an undiscounted reserve for environmental remediation of approximately $104 million.
Apache is not aware of any environmental claims existing as of December 31, 2012 that have not been provided for or would otherwise have a material impact on its financial position or results of operations.
There can be no assurance however, that current regulatory requirements will not change or past noncompliance with environmental laws will not be discovered on the Companys properties.
Apache Canada Ltd.  asserted a claim against BP Canada arising out of the acquisition of certain Canadian properties under the parties Partnership Interest and Share Purchase and Sale Agreement dated July 20, 2010.
The claim centered on Apache Canada Ltd. s identification of Alleged Adverse Conditions, as that term is defined in the parties agreement, and more specifically the contention that liabilities associated with such conditions were retained by BP Canada as seller.
The parties have resolved the matter on commercial terms with no material impact on the Companys financial position, results of operations, or liquidity.
On May 25, 2011, a panel of the Bureau of Ocean Energy Management (BOEMRE, as it was then known) published a report dated May 23, 2011, and titled OCS G-2580, Vermilion Block 380 Platform A, Incidents of Noncompliance.
 The report concerned the BOEMREs investigation of a fire on the Vermilion 380 A platform located in the Gulf of Mexico.
At the time of the incident, Mariner operated the platform.
A small amount of hydrocarbons spilled from the platform into the surrounding water as a result of the incident, and 13 workers were rescued after evacuating the platform.
The BOEMRE concluded in its investigation that the fire was caused by Mariners failure to adequately maintain or operate the platforms heater-treater in a safe condition.
The BOEMRE also identified other safety deficiencies on the platform.
On December 27, 2011, the Bureau of Safety and Environmental Enforcement (BSEE, successor to BOEMRE) issued several Incidents of Non-Compliance, which may provide the basis for the assessment of civil penalties against Mariner.
The Companys subsidiary Apache Deepwater LLC, which acquired Mariner effective November 10, 2010, filed an appeal on August 31, 2012, contesting several of the Incidents of Non-Compliance.
It is managements opinion that any loss arising from this matter will not have a material adverse effect on the Companys financial position, results of operations, or liquidity.


KANSAS CITY POWER & LIGHT COMPANY MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS The below results of operations and related discussion for KCP&L is presented in a reduced disclosure format in accordance with General Instruction (I)(2)(a) to Form 10-K.
The following table summarizes KCP&L's comparative results of operations.


| 2010 2009 2008 | Cash provided by operating activities | Cash used in investing activities | Cash (used in) provided by financing activities | Exchange rate effect on cash and cash equivalents | (Decrease) increase in cash and cash equivalents |


| As of and for the Year Ended December 31, | (in millions) | Net interest income | Noninterest income | Total revenue | Noninterest expense | Profit before provision for credit losses | Provision for credit losses | Income before income tax expense (benefit) | Income tax expense (benefit) | Net income | Loans and leases (period-end) | Average Balances: | Total assets | Total loans and leases | Deposits | Interest-earning assets |


| Years Ended | September 30, 2006 | Amount | Total Revenues | Operating Income |


Interest Rate Swap O&R has an interest rate swap, which terminates in October 2014, pursuant to which it pays a fixed-rate of 6.09 percent and receives a LIBOR-based variable rate.
The fair value of this interest rate swap at December 31, 2013 was an unrealized loss of $2 million, which has been included in Con Edisons consolidated balance sheet as a current liability/fair value of derivative liabilities and a regulatory asset.
The increase in the fair value of the swap for the year ended December 31, 2013 was $4 million.
In the event O&Rs credit rating was downgraded to BBB- or lower by S&P or Baa3 or lower by Moodys, the swap counterparty could elect to terminate the agreement and, if it did so, the parties would then be required to settle the transaction.


Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis 17 The purchased power capacity variance is primarily due to higher capacity charges.
A portion of the variance is due to the amortization of deferred capacity costs and is offset in base revenues due to base rate increases implemented to recover incremental deferred and ongoing purchased power capacity charges.
The volume/weather variance is primarily due to the effect of less favorable weather compared to the same period in 2007 and decreased electricity usage primarily during the unbilled sales period.
Hurricane Gustav and Hurricane Ike, which hit the Utility's service territories in September 2008, contributed an estimated $46 million to the decrease in electricity usage.
Industrial sales were also depressed by the continuing effects of the hurricanes and, especially in the latter part of the year, because of the overall decline of the economy, leading to lower usage in the latter part of the year affecting both the large customer industrial segment as well as small and mid-sized industrial customers.
The decreases in electricity usage were partially offset by an increase in residential and commercial customer electricity usage that occurred during the periods of the year not affected by the hurricanes.
The retail electric price variance is primarily due to: x an increase in the Attala power plant costs recovered through the power management rider by Entergy Mississippi.
The net income effect of this recovery is limited to a portion representing an allowed return on equity with the remainder offset by Attala power plant costs in other operation and maintenance expenses, depreciation expenses, and taxes other than income taxes; x a storm damage rider that became effective in October 2007 at Entergy Mississippi; and x an Energy Efficiency rider that became effective in November 2007 at Entergy Arkansas.
The establishment of the storm damage rider and the Energy Efficiency rider results in an increase in rider revenue and a corresponding increase in other operation and maintenance expense with no impact on net income.
The retail electric price variance was partially offset by: x the absence of interim storm recoveries through the formula rate plans at Entergy Louisiana and Entergy Gulf States Louisiana which ceased upon the Act 55 financing of storm costs in the third quarter 2008; and x a credit passed on to customers as a result of the Act 55 storm cost financings.
Refer to "Liquidity and Capital Resources - Hurricane Katrina and Hurricane Rita" below and Note 2 to the financial statements for a discussion of the interim recovery of storm costs and the Act 55 storm cost financings.


| Year ended December 31, Net income (loss) Return on equity | (in millions, except ratios) | Investment Bank | Retail Financial Services | Card Services | Commercial Banking | Treasury & SecuritiesServices | Asset Management | Corporate(b) | Total |


| Short-term Long-term Outlook | Fitch | Moody’s | S&P | DBRS |


| December 31 | (Dollars in millions) | Deposits | Card Services | Consumer Real Estate Services | Global Commercial Banking | Global Banking & Markets | Global Wealth & Investment Management | All Other | Total goodwill |


| Location Ownership Number ofBuildings Square Feet Weighted AverageOccupancy-1 | Manhattan | Unconsolidated properties | Suburban | Unconsolidated properties | 62 |


| Years Ended December 31, Years Ended December 31, Years Ended December 31, | 2011 | Fixed Maturity Securities | (In millions) | Proceeds | Gross investment gains | Gross investment losses | Total OTTI losses recognized in earnings: | Credit-related | Other -1 | Total OTTI losses recognized in earnings | Net investment gains (losses) |


| December 31 Year Ended December 31 | Nonperforming Loans and Foreclosed Properties-1 | (Dollars in millions) | Commercial real estate – non-homebuilder | Office | Multi-family rental | Shopping centers/retail | Hotels/motels | Industrial/warehouse | Multi-use | Land and land development | Other-4 | Total non-homebuilder | Commercial real estate – homebuilder-5 | Total commercial real estate |


| 2016 2015 2014 2013 | $14,215 |


| Series A preferred stock Series B preferred stock Common stock | (in millions) | Outstanding shares at January 1, 2006 | Shares issued | Treasury stock acquired | Outstanding shares at December 31, 2006 | Shares issued | Treasury stock acquired | Outstanding shares at December 31, 2007 | Shares issued | Treasury stock acquired | Outstanding shares at December 31, 2008 |


| Sales Long-Lived Assets | 2016 | United States | Australia | Ghana | Peru | Suriname | Other | North America | Years Ended December 31, | Tons mined (000 dry short tons): | Open pit | Underground | Tons processed (000 dry short tons): | Mill | Leach | Average ore grade (oz/ton): | Mill | Leach | Average mill recovery rate | Ounces produced -000: | Mill | Leach | Consolidated | Attributable | Consolidated ounces sold -000 | Production costs per ounce sold:-1 | Direct mining and production costs | By-product credits | Royalties and production taxes | Write-downs and inventory change | Costs applicable to sales | Depreciation and amortization | Reclamation accretion | Total production costs | All-in sustaining costs per ounce sold-2 | Australia | Years Ended December 31, | Tons mined (000 dry short tons): | Open pit | Underground | Tons milled (000 dry short tons) | Average ore grade (oz/ton) | Average mill recovery rate | Ounces produced -000: | Mill | Consolidated | Consolidated ounces sold -000 | Production costs per ounce sold:-1 | Direct mining and production costs | By-product credits | Royalties and production taxes | Write-downs and inventory change | Costs applicable to sales | Depreciation and amortization | Reclamation accretion | Total production costs | All-in sustaining costs per ounce sold-2 |


Additional detail about these loan and lease segments, including underlying classes, is provided in note 4 to the consolidated financial statements included under Item 8.
The institutional segment is composed of the following classes: investment funds, commercial and financial, purchased receivables and lease financing.
Investment funds includes lending to mutual and other collective investment funds and short-duration advances to fund clients to provide liquidity in support of their transaction flows associated with securities settlement activities.
Commercial and financial includes lending to corporate borrowers, including broker/dealers.
Purchased receivables represents undivided interests in securitized pools of underlying third-party receivables added in connection with the 2009 conduit consolidation.
Lease financing includes our investment in leveraged lease financing.
As of December 31, 2011 and 2010, unearned income deducted from our investment in leveraged lease financing was $146 million and $168 million, respectively, for U. S.  leases and $381 million and $667 million, respectively, for non-U.
S.  leases.
Aggregate short-duration advances to our clients included in the institutional segment were $2.17 billion and $2.63 billion at December 31, 2011 and 2010, respectively.
The commercial real estate, or CRE, loans were acquired in 2008 pursuant to indemnified repurchase agreements with an affiliate of Lehman as a result of the Lehman Brothers bankruptcy.
These loans, which are primarily collateralized by direct and indirect interests in commercial real estate, were recorded at their thencurrent fair value, based on managements expectations with respect to future cash flows from the loans using appropriate market discount rates as of the date of acquisition.
As of December 31, 2011 and 2010, we held an aggregate of approximately $199 million and $307 million, respectively, of CRE loans which were modified in troubled debt restructurings.
No impairment loss was recognized upon restructuring of the loans, as the discounted cash flows of the modified loans exceeded the carrying amount of the original loans as of the modification date.
No loans were modified in troubled debt restructurings in 2011.


| % Change in Sales — 2009 vs 2008 | Fine & Beauty Care | North America | EAME | Local Currency | Latin America | Local Currency | Greater Asia | Local Currency | Total | Local Currency |


| Plan Category (shares in thousands) Number of Shares tobe Issued UponExercise Weighted-AverageExercisePrice N/A Shares Available for Future Issuance | Equity compensation plans approved by shareholders | SARs | Restricted stock | Stock options(c) | Phantom stock units | Performance units | Employee stock purchase plan | Total shares |


| Year Ended December 31, | (in thousands) | -1 | Other Financial Data: | Net cash provided by operating activities-7 | Net cash used in investing activities | Net cash (used in) provided by financing activities(7) | Capital expenditures | Cash paid for acquisitions, net of cash acquired | Depreciation and amortization | Balance Sheet Data: | Total assets | Working capital-8 | Long-term obligations, including current portion | Stockholders' equity |


Accrued Warranty and Indemnifications The Company offers a basic limited parts and labor warranty on its hardware products.
The basic warranty period for hardware products is typically one year from the date of purchase by the end-user.
The Company also offers a 90-day basic warranty for its service parts used to repair the Companys hardware products.
The Company provides currently for the estimated cost that may be incurred under its basic limited product warranties at the time related revenue is recognized.
Factors considered in determining appropriate accruals for product warranty obligations include the size of the installed base of products subject to warranty protection, historical and projected warranty claim rates, historical and projected cost-per-claim, and knowledge of specific product failures that are outside of the Companys typical experience.
The Company assesses the adequacy of its preexisting warranty liabilities and adjusts the amounts as necessary based on actual experience and changes in future estimates.
For products accounted for under subscription accounting pursuant to SOP No.97-2, the Company recognizes warranty expense as incurred.
The Company periodically provides updates to its applications and system software to maintain the softwares compliance with specifications.
The estimated cost to develop such updates is accounted for as warranty costs that are recognized at the time related software revenue is recognized.
Factors considered in determining appropriate accruals related to such updates include the number of units delivered, the number of updates expected to occur, and the historical cost and estimated future cost of the resources necessary to develop these updates.


| Operating Subsidiary: A.M. Best Standard & Poor's Moody's | Everest Re | Bermuda Re | Ireland Re | Everest International | Everest National | Everest Indemnity | Everest Security | Everest Canada | Mt. McKinley | Mt. Logan Re |


| Component Changes in Alternatives AUM | (in millions) | Core: | Hedge Funds | Funds of Funds | Real Estate and Hard Assets | Subtotal Core | Currency and commodities | Alternatives |


| Years Ended December 31, | 2011 | GAAP | (in millions) | Revenues | Management and financial advice fees | Distribution fees | Net investment income | Other revenues | Total revenues | Banking and deposit interest expense | Total net revenues | Expenses | Distribution expenses | Amortization of deferred acquisition costs | General and administrative expense | Total expenses | Pretax income |


(a) The change in net unrealized losses on trading securities included in net investment income was $15 million and $7 million for the years ended December 31, 2007 and 2005.
There was no change in net unrealized gains (losses) on trading securities included in net investment income for the year ended December 31, 2006.
Net investment income increased by $21 million for 2007 compared with 2006.
The improvement was primarily driven by an increase in the overall invested asset base and a reduction of interest expense on funds withheld and other deposits as discussed further below.
These increases were substantially offset by decreases in limited partnership income and results from the trading portfolio.
The decreased income from the trading portfolio was largely offset by a


| December 31,   2006 January 18, 2007   Refinancing | 2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total |