Enterprises Enterprises, through various subsidiaries and certain equity investments, is engaged primarily in domestic independent power production.
Enterprises’ operating revenue included in Continuing Operations in our consolidated financial statements was $383 million in 2007, $438 million in 2006, and $693 million in 2005.
Operating revenue included in Discontinued Operations in our consolidated financial statements was $235 million in 2007, $684 million in 2006, and $409 million in 2005.
In 2007, Enterprises made a significant change in business strategy by exiting the international marketplace and refocusing its business strategy to concentrate on its independent power business in the United States.
Independent Power Production CMS Generation was formed in 1986.
It invested in and operated non-utility power generation plants in the United States and abroad.
The independent power production business segment’s operating revenue included in Continuing Operations in our consolidated financial statements was $41 million in 2007, $103 million in 2006, and $104 million in 2005.
Operating revenue included in Discontinued Operations in our consolidated financial statements was $124 million in 2007, $437 million in 2006, and $211 million in 2005.
In 2007, Enterprises sold CMS Generation and all of its international assets and power production facilities and transferred its domestic independent power plant operations to its subsidiary, Hydra-Co.  For more information on the asset sales, see ITEM 8.
CMS ENERGY’S FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA — NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — NOTE 2.


million ($27.6 million at such time) annually under its transmission contract with ITVD.
ITVD represented approximately 12% of the 2001 revenues of CCUK and approximately 3% of the 2001 consolidated revenues of the Company.
In August 2002, the ITC granted the DTT multiplex licenses previously held by ITVD to CCUK (multiplex C and D) and the BBC (multiplex B, bringing the BBCs total to two licenses).
The DTT multiplex licenses awarded to CCUK have a term of 12 years, and CCUK has the right to renew the licenses for an additional term of 12 years subject to satisfaction of certain performance criteria.
No license fees were paid to the U. K.  government with respect to the award of the multiplex licenses other than an approximately $76,000 application fee.
Following the award of such licenses, the current U. K.  DTT multiplex licensing structure is as follows:


| Pension Benefits Other Postretirement Benefits | 2009 | Weighted-average assumptions | Discount rate (beginning of period) | Discount rate (end of period) | Rate of increase in compensation levels (beginning of period) | Rate of increase in compensation levels (end of period) | Expected return on plan assets (beginning of period) | Health care cost trend rates (beginning of period) | Health care cost trend rates (end of period) | For 2009, 2008 and 2007, the ultimate health care cost trend rate after gradual decrease until: 2014, 2012, 2009 (beginning ofperiod) | For 2009, 2008 and 2007, the ultimate health care cost trend rate after gradual decrease until: 2015, 2014, 2012 (end of period) |


Additional losses, including those relating to latent injuries and other exposures, which are as yet unrecognized, the type or magnitude of which cannot be foreseen by either the Company or the industry, may emerge in the future.
Such future emergence could have material adverse effects on the Company’s future financial condition, results of operations and cash flows.
Future Policy Benefit Reserves.
The Company wrote a limited amount of life and annuity reinsurance in its Bermuda segment.
Future policy benefit liabilities for annuities are reported at the accumulated fund balance of these contracts.
Reserves for those liabilities include mortality provisions with respect to life and annuity claims, both reported and unreported.
Actual experience in a particular period may be worse than assumed experience and, consequently, may adversely affect the Company’s operating results for that period.
See ITEM 8, “Financial Statements and Supplementary Data” - Note 1F of Notes to Consolidated Financial Statements.
Activity in the reserve for future policy benefits is summarized for the periods indicated:


Item 3.
Legal Proceedings.
Information with respect to certain legal proceedings is included in Note 5 to the consolidated financial statements contained in Item 8.
Financial Statements and Supplementary Data, and is incorporated herein by reference.


| Location Number of   Doors(a) | United States and Canada | Europe | Japan | Total |


| For the fiscal years ended October 31 | 2013 | In millions | Net revenue | Earnings from operations | Earnings from operations as a % of net revenue |


Warranties The Company generally provides a one-year warranty on sequencing, genotyping and gene expression systems.
At the time revenue is recognized, the Company establishes an accrual for estimated warranty expenses associated with system sales.
This expense is recorded as a component of cost of product revenue.
Estimated warranty expenses associated with extended maintenance contracts are recorded as cost of revenue ratably over the term of the maintenance contract.
Changes in the Company’s reserve for product warranties from January 1, 2006 through December 28, 2008 are as follows (in thousands):


| December 31, 2009 | (Dollars in millions) | Long-term debt and capital leases | Operating lease obligations | Purchase obligations | Other long-term liabilities | Total long-term debt and other obligations |


of exiting a business in Japan, economic weakness in Asia and political unrest in Thailand, partially offset by growth in New Zealand and certain emerging markets.
Reinsurance commissions, fees and other revenue increased 48%, due mainly to the Benfield merger, partially offset by unfavorable foreign currency translation.
Organic revenue is even with 2008, as growth in domestic treaty business and slightly higher pricing was offset by greater client retention, and declines in investment banking and facultative placements.
Operating Income Operating income increased $54 million or 6% from 2008 to $900 million in 2009.
In 2009, operating income margins in this segment were 14.3%, up 60 basis points from 13.7% in 2008.
Contributing to increased operating income and margins were the merger with Benfield, lower E&O costs due to insurance recoveries, a pension curtailment gain of $54 million in 2009 versus a curtailment loss of $6 million in 2008, declines in anti-corruption and compliance initiative costs of $35 million, restructuring savings, and other cost savings initiatives.
These items were partially offset by an increase of $140 million in restructuring costs, $95 million of lower fiduciary investment income, Benfield integration costs and higher amortization of intangible assets obtained in the merger, and unfavorable foreign currency translation.


| Immediate change in rates | December 31,(in millions) | 2012 | 2011 |


by a $1.4 billion increase in average loans and an increase in net FTPcredits, partially offset by lower loan yields.
Average deposits increased $1.4 billion.
The provision for credit losses of $28 million in 2014 increased $10 million from the prior year, primarily due to an increase in general Middle Market, partially offset by decreases in almost all other business lines.
Net credit-related charge-offs of $22 million in 2014 decreased $5 million compared to 2013, primarily reflecting decreases in most lines of business, partially offset by increases in Technology and Life Sciences and general Middle Market.
Noninterest income of $147 million in 2014 decreased $3 million from the prior year, primarily due to decreases of $3 million each in warrant income and securities trading income, partially offset by smaller increases in foreign exchange income, card fees and several other categories of noninterest income.
Noninterest expenses of $401 million in 2014 increased $5 million from the prior year, primarily reflecting a $7 million increase in corporate overhead expenses and small increases in several other noninterest expense categories, partially offset by a $6 million decrease in salaries and benefits expense and a $5 million decrease in losses related to foreclosed property.
See the Business Bank discussion for an explanation of the increase in corporate overhead expense.
The Texas market's net income decreased $17 million to $160 million in 2014, compared to $177 million in 2013.
Net interest income (FTE) of $542 million in 2014 increased $1 million from the prior year, primarily due to the benefit provided by a $965 million increase in average loans and lower deposit rates, partially offset by lower loan yields and a decrease in accretion of the purchase discount on the acquired loan portfolio.
Average deposits increased $517 million.
The provision for credit losses of $50 million in 2014 increased $15 million from the prior year, primarily reflecting increases in Energy, Commercial Real Estate and Technology and Life Sciences, partially offset by a decrease in Small Business.
Refer to the "Allowance for Credit Losses" and "Energy Lending" subheadings in the Risk Management section of this financial review for a discussion of the impact of the significant decline in oil and gas prices in the late third and fourth quarters of 2014 on the Corporation's portfolio of energy-related loans.
Net credit-related charge-offs of $9 million for 2014 decreased $11 million from the prior year, with decreases in almost all lines of business.
Noninterest income of $129 million in 2014 decreased $3 million from the prior year, primarily due to a decrease in syndication fees, a component of commercial lending fees.
Noninterest expenses of $369 million in 2014 increased $6 million from 2013, primarily due to an $8 million increase in corporate overhead expenses, partially offset by small decreases in several other categories of noninterest expenses.
See the Business Bank discussion, above, for an explanation of the increase in corporate overhead expense.
Net income in Other Markets of $221 million in 2014 increased $13 million compared to $208 million in 2013.
Net interest income (FTE) of $312 million in 2014 decreased $1 million from the prior year, primarily due to the impact of a decrease in average loans of $76 million and lower loan yields, partially offset by an increase in net FTPcredits.
Average deposits increased $476 million.
The provision for credit losses decreased $26 million in 2014, compared to the prior year, primarily reflecting decreases in general Middle Market, Environmental Services and Commercial Real Estate, partially offset by an increase in Mortgage Banker Finance.
Net credit-related recoveries were $14 million in 2014 compared to net charge-offs of $20 million in 2013, primarily reflecting decreases in general Middle Market, Commercial Real Estate and Environmental Services.
Noninterest income of $166 million in 2014 decreased $4 million from the prior year, primarily reflecting a $5 million decrease in income from the Corporation's third-party credit card provider, largely due to a change in the timing of the recognition of incentives from annually to quarterly in the third quarter 2013 and small decreases in several other noninterest income categories, partially offset by a $4 million increase in fiduciary income.
Noninterest expenses of $200 million in 2014 increased $3 million compared to the prior year, primarily due to a $3 million increase in corporate overhead expenses, a $3 million increase in efficiency-related occupancy expenses and small increases in several other noninterest expense categories, partially offset by a $7 million decrease in salaries and benefits expense.
See the Business Banking discussion for an explanation of the increase in corporate overhead expense.
The net loss for the Finance & Other category of $357 million in 2014 decreased $16 million compared to 2013, primarily reflecting a $19 million decrease in net loss in the Finance segment, largely due to the third quarter 2014 gain of $32 million on the early redemption of debt as previously discussed under the "Business Segments" subheading above.


| (millions of dollars) 2010 2009 2008 | Year Ended December 31, | Earnings (loss) before taxes | Provision for income taxes: | Current: | Federal/foreign | State | Total current | Deferred | Total provision for income taxes | Effective tax rate |


| 2008 2007 | Carrying Amount | 6.95% Senior Notes due 2009 | 5.375% Senior Notes-1 due 2008 | 5.625% Senior Notes due 2013 | 6.875% Senior Notes due 2033 | 3% Convertible Senior Notes | Other foreign loans | Other loans | Total debt |


| For the Year 2006 | Life | Distribution Channel | United American Independent | Liberty National Exclusive | American Income Exclusive | Direct Response | United American Branch Office | Military | Medicare Part D | Other | $1,524,267 | For the Year 2005 | Life | Distribution Channel | United American Independent | Liberty National Exclusive | American Income Exclusive | Direct Response | United American Branch Office | Military | Other | $1,468,288 | For the Year 2004 | Life | Distribution Channel | United American Independent | Liberty National Exclusive | American Income Exclusive | Direct Response | United American Branch Office | Military | Other | $1,395,490 | For the Year | 2014 | Cost of acquisitions: | Investment-grade corporate securities | Taxable municipal securities | Other investment-grade securities | Total fixed-maturity acquisitions | Effective annual yield (one year compounded*) | Average life (in years, to next call) | Average life (in years to maturity) | Average rating |


| Ratio of Earnings to Fixed Charges | 2012 | Con Edison | CECONY |


Commission and brokerage decreased by 2.6% to $298.2 million in 2015 compared to $306.2 million in 2014.
The decrease was mainly due to the impact of the decrease in premiums earned and changes in the mix of business.
Segment other underwriting expenses decreased slightly to $34.3 million in 2015 compared to $34.6 million in 2014.


| (dollars in millions) Balance Yield/Rate | Earning assets: | Short-term investments | Securities | Loans | Total earning assets | Funding liabilities: | Non-interest-bearing deposits | Savings, interest-bearing checking and money market deposits | Time deposits | Borrowings | Notes and debentures | Total funding liabilities |


| Net Minimum Commitments Total 2013 2014-2015 2016-2017 2018 & Beyond | (In millions) | Drilling rig commitments-1 | Purchase obligations-2 | Firm transportation agreements-3 | Office and related equipment-4 | Other operating lease obligations-5 | Total Net Minimum Commitments |


CITIZENS FINANCIAL GROUP, INC.  MANAGEMENT’S DISCUSSION AND ANALYSIS 72 Our capital levels are evaluated and managed centrally, however, capital is allocated to the operating segments to support evaluation of business performance.
Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.
We approximate that regulatory capital is equivalent to a sustainable target level for common equity tier 1 and then allocate that approximation to the segments based on economic capital.
Interest income and expense is determined based on the assets and liabilities managed by the business segment.
Because funding and asset liability management is a central function, funds transfer-pricing methodologies are utilized to allocate a cost of funds used, or credit for the funds provided, to all business segment assets, liabilities and capital, respectively, using a matched-funding concept.
The residual effect on net interest income of asset/liability management, including the residual net interest income related to the funds transfer pricing process, is included in Other.
Provision for credit losses is allocated to each business segment based on actual net charge-offs that have been recognized by the business segment.
The difference between the consolidated provision for credit losses and the business segments’ net charge- offs is reflected in Other.
Noninterest income and expense directly managed by each business segment, including fees, service charges, salaries and benefits, and other direct revenues and costs are accounted for within each segment’s financial results in a manner similar to our Consolidated Financial Statements.
Occupancy costs are allocated based on utilization of facilities by the business segment.
Noninterest expenses incurred by centrally managed operations or business segments that directly support another business segment’s operations are charged to the applicable business segment based on its utilization of those services.
Income taxes are assessed to each business segment at a standard tax rate with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Other.
Developing and applying methodologies used to allocate items among the business segments is a dynamic process.
Accordingly, financial results may be revised periodically as management systems are enhanced, methods of evaluating performance or product lines change, or our organizational structure changes.


Scot E.  Warren, 47 Mr.  Warren has served as our Managing Director, Equity Index Products and Index Services since February 2010.
Mr.  Warren previously served as our Managing Director, Equity Products since joining us in 2007.
Prior to that, Mr.  Warren worked for Goldman Sachs as its President, Manager Trading and Business Analysis Team.
Prior to Goldman Sachs, Mr.  Warren managed equity and option execution and clearing businesses for ABN Amro in Chicago and was a Senior Consultant for Arthur Andersen & Co.  for financial services firms.


| Owned Leased U.S. Government- Owned Total | Aeronautics | Information Systems & Global Solutions | Missiles and Fire Control | Mission Systems and Training | Space Systems | Corporate activities | Total | 2002 | Net cash provided by operating activities | Adjustment for items included in cash provided by operating activities but excluded from the calculation of EBITDA and EBIT: | Amortization of bond discount | Non-cash portion of restructuring and other charges (credits) | Non-cash portion of asbestos settlement | Deferred tax provisions | Net loss (gain) on disposals of property and equipment | Changes in operating assets and liabilities, net of businesses acquired | Interest expense | Income tax (benefit) expense | EBITDA | Less: depreciation and amortization | EBIT |


| Years Ended December 31 Percent Change | (Dollars in millions) | Segment net sales | Operating earnings |


NORTHROP GRUMMAN CORPORATION -31- Protection Security System, Saudi Arabian American Oil Company, Netcents DKO, F-22 and several other programs, partially offset by higher volume on Encore II and Trailer Mounted Support System programs.
The lower civil sales volume is primarily due to the sale of the County of San Diego contract, which reduced sales by $70 million as compared to the same period in 2010, lower volume on the ENM program and completion of the Treasury Communications System program in 2010.
Operating income for 2011 increased $10 million, or 1 percent, and operating margin rate increased to 9.7 percent from 9.0 percent.
The increase is primarily driven by improved performance on several civil programs, including the Virginia Information Technologies Agency Outsource contract and the effect of the sale of the County of San Diego contract, partially offset by the lower sales volume in defense programs described above.


Management’s Discussion and Analysis of Financial Condition and Results of Operations–(Continued) Life and annuity contract benefits increased 1.2% or $19 million in 2007 compared to 2006 due to increased contract benefits on life insurance products, partially offset by lower contract benefits on annuities.
Increased contract benefits on life insurance products in 2007 were primarily due to unfavorable mortality experience, litigation related costs recognized in 2007 in the form of additional policy benefits on certain universal life policies written prior to 1992, and higher contract benefits associated with the Workplace Division.
The decline in contract benefits on annuities was mostly attributable to favorable mortality experience on immediate annuities with life contingencies and the absence in 2007 of contract benefits on the reinsured variable annuity business, partially offset by an increase in the implied interest on immediate annuities with life contingencies.
We analyze our mortality and morbidity results using the difference between premiums and contract charges earned for the cost of insurance and life and annuity contract benefits excluding the portion related to the implied interest on immediate annuities with life contingencies (‘‘benefit spread’’).
This implied interest totaled $552 million, $547 million and $539 million in 2008, 2007 and 2006, respectively.
The benefit spread by product group is disclosed in the following table.


| Year Ending December 31, 2008 | Volumes Hedged | Natural gas liquids(Bbl/d)(a) | Condensate(Bbl/d)(a) | Total liquid sales(Bbl/d) | (a) - Hedged with fixed-price swaps. | (Thousands of dollars) | Net fair value of derivatives outstanding at December 31, 2006 | Derivatives realized or otherwise settled during the period | Fair value of new derivatives entered into during the period | Other changes in fair value | Net fair value of derivatives outstanding at December 31, 2007 |


| Year Ended December | in millions | Fixed Income, Currency and Commodities Client Execution | Equities client execution1 | Commissions and fees | Securities services | Total Equities | Total net revenues | Operating expenses | Pre-tax earnings |


NM - Not Meaningful Interest income increased during fiscal 2019 compared to fiscal 2018, primarily due to a shift in our investment portfolio to higheryielding investments, partially offset by a decrease in the size of the portfolio.
Interest income also increased during fiscal 2018 compared to fiscal 2017 due to a shift to higher-yielding investments, with the portfolio size being relatively consistent in each year.
Interest expense decreased during fiscal 2019 compared to fiscal 2018, primarily due to a reduction in the average amount of interest-bearing debt outstanding.
Interest expense increased in fiscal 2018 compared to fiscal 2017 primarily as a result of our commercial paper program, which began in the third quarter of fiscal 2017, and the September 2017 issuance of $800 million aggregate principal amount of Senior Notes which have a higher weighted average interest rate than the $750 million aggregate principal amount of Senior Notes extinguished in November 2017.
The fluctuations in fiscal 2019 and 2018 compared to the respective prior years are primarily attributable to differences in net foreign exchange gains.


| Company and ARO Description In-Service Date Long-Lived Assets | CMS Energy, including Consumers | Closure of gas treating plant and gas wells | Closure of coal ash disposal areas | Asbestos abatement | Gas distribution cut, purge, and cap | Closure of wind parks | Consumers | Closure of coal ash disposal areas | Asbestos abatement | Gas distribution cut, purge, and cap | Closure of wind parks |


CDF CroisiÃ¨res de France In January 2014, we redeployed Zenith from Pullmantur to CDF CroisiÃ¨res de France.
As a result, as of January 2014, we operate two ships with an aggregate capacity of approximately 2,750 berths under our CDF CroisiÃ¨res de France brand.
During the summer of 2014, CDF CroisiÃ¨res de France will operate both ships in Europe and, for the first time, the brand will operate in the Caribbean during the winter of 2014.
In addition, CDF CroisiÃ¨res de France offers seasonal itineraries to the Mediterranean.
CDF CroisiÃ¨res de France is designed to serve the contemporary segment of the French cruise market by providing a brand tailored for French cruise guests.


| June 27, 2003 June 28, 2002 | (in millions) | Deferred Tax Assets | Accrued warranty | Inventory valuation accounts | Receivable reserves | Accrued compensation and benefits | Depreciation | Restructuring allowance | Other accruals | Acquisition related items | Net operating losses and tax credit carry-forwards | Other assets | Total Deferred Tax Assets | Valuation allowance | Net Deferred Tax Assets | As Reported on the Balance Sheet | Other current assets | Other assets, net | Net Deferred Tax Assets |


of cash on hand, cash generated by operations, borrowings under our revolving credit facility and future financing transactions.
Under the program, management is authorized to purchase shares from time to time through open market purchases or privately negotiated transactions at prevailing prices as permitted by securities laws and other legal requirements, and subject to stock price, business conditions, market conditions and other factors.
The repurchase program does not have an expiration date.
The above repurchases were funded using cash on hand.
There were no repurchases of our Series A common stock or Series B common stock during the three months ended December 31, 2011.


Table 37 presents commercial utilized reservable criticized exposure by product type.
Criticized exposure corresponds to the Special Mention, Substandard and Doubtful asset categories as defined by regulatory authorities.
In addition to reservable loans and leases, excluding those accounted for under the fair value option, exposure includes SBLCs, financial guarantees, bankers acceptances and commercial letters of credit for which we are legally bound to advance funds under prescribed conditions, during a specified time period.
Although funds have not been advanced, these exposure types are considered utilized for credit risk management purposes.
Total commercial utilized reservable criticized exposure decreased $16.1 billion at December 31, 2010 compared to December 31, 2009, due to decreases across all portfolios, primarily U. S.  commercial and commercial real estate driven largely by continued paydowns, payoffs and, to a diminishing extent, charge-offs.
Despite the improvements, utilized reservable criticized levels remain elevated in commercial real estate.
At December 31, 2010, approximately 88 percent of the loans within commercial utilized reservable criticized exposure were secured.


Recent Acquisitions On June 22, 2012, People’s United Bank acquired 57 branches from RBS Citizens, N. A.  and assumed approximately $324 million in deposits associated with these branches.
The assets acquired, which included cash, premises and equipment, and other assets totaling $15.8 million, and liabilities assumed, which included deposits and other liabilities totaling $324.6 million, were recorded by People’s United Financial at their estimated fair values as of the acquisition date.
After the close of business on June 30, 2011, People’s United Financial acquired Danvers Bancorp, Inc.  (“Danvers”).
The transaction was effective July 1, 2011.
Total consideration paid in the Danvers acquisition of approximately $462 million consisted of approximately $214 million in cash and 18.5 million shares of People’s United Financial common stock with a fair value of approximately $248 million.
Cash consideration was paid at the rate of $23.00 per share of Danvers common stock and stock consideration was paid at the rate of 1.624 shares of People’s United Financial common stock per share of Danvers common stock.
The fair value of the assets acquired and liabilities assumed in the Danvers acquisition totaled $2.8 billion and $2.4 billion, respectively.
People’s United Financial’s results of operations include the results of Danvers beginning with the effective date.
Merger-related expenses recorded in 2011 totaling $42.9 million related to the Danvers acquisition and acquisitions completed during 2010.


| 2016 2015 2014 2013 | $681 |


| September2011 September2012 September2013 September2014 September2015 September2016 | Apple Inc. | S&P 500 Index | S&P Information Technology Index | Dow Jones U.S. Technology Supersector Index | Gold Ounces Sold-1 | 2008 | (in thousands) | Ahafo | Gold Ounces Produced | 2010 | (in thousands) | Ahafo | Attributable to Newmont | Gold or Copper Produced | 2018 | GOLD | Carlin | Phoenix | Twin Creeks | Long Canyon-3 | CC&V | Total / Weighted Average-4 | COPPER | Phoenix | COPPER | Phoenix |


M ANAGEMENT  S D ISCUSSION AND A NALYSIS OF F INANCIAL C ONDITION AND R ESULTS OF O PERATIONS  C ONTINUED O&Rs electric operating revenues decreased $49 million in 2012 compared with 2011 due primarily to lower purchased power costs ($69 million), offset in part by the New York electric rate plan ($12 million).
O&Rs New York electric delivery revenues are subject to a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
O&Rs electric sales in New Jersey and Pennsylvania are not subject to a decoupling mechanism, and as a result, changes in such volumes do impact revenues.
Other electric operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the companys electric rate plan.
See Note B to the financial statements in Item Electric delivery volumes in O&Rs service area decreased 1.0 percent in 2012 compared with 2011.
After adjusting for weather and other variations, electric delivery volumes in O&Rs service area increased 0.8 percent in 2012 compared with 2011.
Electric operating income increased $2 million in 2012 compared with 2011.
The increase reflects primarily higher net revenues ($20 million), offset by higher operations and maintenance expense ($9 million, due to higher pension and health care expense), taxes other than income taxes ($6 million, principally property taxes) and depreciation and amortization ($3 million).
Most of the operating expenses attributable to major storms in 2012 and 2011 were deferred as a regulatory asset.
Gas O&Rs results of gas operations for the year ended December 31, 2012 compared with the year ended December 31, 2011 is as follows


| 10/27/2013 10/26/2014 10/25/2015 10/30/2016 10/29/2017 10/28/2018 | Applied Materials | S&P 500 Index | RDG Semiconductor Composite Index |


| Years Ended December 31, | (in millions, except per share data) | Revenues: | Premiums | Policy fees | Net investment income | Net realized capital gains (losses) | Other income | Total revenues | Benefits, claims and expenses: | Policyholder benefits and claims incurred | Interest credited to policyholder account balances | Amortization of deferred acquisition costs | Other acquisition and insurance expenses | Interest expense | Net loss on extinguishment of debt | Net (gain) loss on sale of properties and divested businesses | Other expenses | Total benefits, claims and expenses | Income (loss) from continuing operations before income taxes(b) | Income taxes expense (benefit) | Income (loss) from continuing operations | Income (loss) from discontinued operations, net of taxes | Net income (loss) | Net income (loss) attributable to AIG | Income (loss) per common share attributable to AIG common shareholders | Basic and diluted | Income (loss) from continuing operations | Income (loss) from discontinued operations | Net income (loss) attributable to AIG | Dividends declared per common share | Year-end balance sheet data: | Total investments | Total assets | Long-term debt | Total liabilities | Total AIG shareholders' equity | Total equity | Book value per share(a) | Book value per share, excluding Accumulated other comprehensive income (loss)(a)(c) | AIG Property Casualty combined ratio(d) | Other data (from continuing operations): | Other-than-temporary impairments | Adjustment to federal and foreign deferred tax valuation allowance | Amortization of prepaid commitment fee | Catastrophe-related losses |


GUARANTEES AND WARRANTIES In April 2015, we entered into joint venture arrangements in Saudi Arabia.
An equity bridge loan has been provided to the joint venture until 2020 to fund equity commitments, and we guaranteed the repayment of our 25% share of this loan.
Our venture partner guaranteed repayment of their share.
Our maximum exposure under the guarantee is approximately $100.
As of 30 September 2015, we recorded a noncurrent liability of $67.5 for our obligation to make future equity contributions based on the equity bridge loan.
Air Products has also entered into a sale of equipment contract with the joint venture to engineer, procure, and construct the industrial gas facilities that will supply gases to Saudi Aramco.
We will provide bank guarantees to the joint venture of up to $326 to support our performance under the contract.
We are party to an equity support agreement and operations guarantee related to an air separation facility constructed in Trinidad for a venture in which we own 50%.
At 30 September 2015, maximum potential payments under joint and several guarantees were $30.0.
Exposures under the guarantee decline over time and will be completely extinguished by 2024.
During the first quarter of 2014, we sold the remaining portion of our Homecare business and entered into an operations guarantee related to obligations under certain homecare contracts assigned in connection with the transaction.
Our maximum potential payment under the guarantee is ￡20 million (approximately $30 at 30 September 2015), and our exposure will be extinguished by 2020.
To date, no equity contributions or payments have been made since the inception of these guarantees.
The fair value of the above guarantees is not material.
We, in the normal course of business operations, have issued product warranties related to equipment sales.
Also, contracts often contain standard terms and conditions which typically include a warranty and indemnification to the buyer that the goods and services purchased do not infringe on third-party intellectual property rights.
The provision for estimated future costs relating to warranties is not material to the consolidated financial statements.
We do not expect that any sum we may have to pay in connection with guarantees and warranties will have a material adverse effect on our consolidated financial condition, liquidity, or results of operations.


(1) Other represents the impact of consolidation or deconsolidation of funds and reclasses of certain assets between reporting categories.
(2) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.
(3) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.
(4) Separate account assets represent segregated funds that are invested for certain customers.
Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts.
Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statement of Financial Position.
Includes reclassifications to conform to current period presentation.
Transfers—Transfers into Level 3 for Fixed Maturities Available for Sale—Asset-Backed securities and Trading Account Assets Supporting Insurance Liabilities—Asset-Backed securities include $4,583 million and $188 million, respectively for the year ended December 31, 2009, resulting from the Company’s conclusion that the market for asset-backed securities collateralized by sub-prime mortgages was an inactive market, as discussed above.
Transfers into Level 3 for Fixed Maturities, Available for Sale—Commercial Mortgage-Backed securities for the year ended December 31, 2009 is primarily the result of over-riding the third party pricing information downward with internally developed valuations for certain securities held in the Japanese insurance operations portfolio.
Transfers into Level 3 for Commercial Mortgage and Other Loans for the year ended December 31, 2009 is primarily due to downward credit migration of these loans.
The downgrade in loans has resulted in the utilization of higher credit spreads, that are internally developed and not observable in the market place.
This increase in credit spreads is now considered a significant input in the fair value calculation for these loans.
Transfers out of Level 3 for Other Trading Account Assets—Asset Backed securities were primarily the result of the use of third party pricing for the securities purchased under TALF.
In the first quarter of 2009, these assets were valued internally using a model.
Other transfers out of Level 3 were typically due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate.
Other transfers into Level 3 were primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes (that could not be validated) when previously, information from third party pricing services (that could be validated) was utilized.
PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements The international business primarily uses reinsurance to obtain experience with respect to certain new product offerings and to a lesser extent, to manage risk and volatility as necessary.
Reinsurance ceded arrangements do not discharge the Company as the primary insurer.
Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements.
Reinsurance premiums, commissions, expense reimbursements, benefits and reserves related to reinsured long-duration contracts under coinsurance arrangements are accounted for over the life of the underlying reinsured contracts using assumptions consistent with those used to account for the underlying contracts.
Coinsurance arrangements contrast with the Company’s yearly renewable term arrangements, where only mortality risk is transferred to the reinsurer and premiums are paid to the reinsurer to reinsure that risk.
The mortality risk that is reinsured under yearly renewable term arrangements represents the difference between the stated death benefits in the underlying reinsured contracts and the corresponding reserves or account value carried by the Company on those same contracts.
The premiums paid to the reinsurer are based upon negotiated amounts, not on the actual premiums paid by the underlying contract holders to the Company.
As yearly renewable term arrangements are usually entered into by the Company with the expectation that the contracts will be inforce for the lives of the underlying policies, they are considered to be long-duration reinsurance contracts.
The cost of reinsurance related to short-duration reinsurance contracts is accounted for over the reinsurance contract period.
The tables presented below exclude amounts pertaining to the Company’s discontinued operations.
Reinsurance amounts included in the Consolidated Statements of Operations for premiums, policy charges and fees and policyholders’ benefits for the years ended December 31, were as follows:


| (Shares and intrinsic value in thousands) Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value | Outstanding as of February 28, 2013 | Options granted | Options exercised | Options forfeited or expired | Outstanding as of February 28, 2014 | Exercisable as of February 28, 2014 |


| Year Ended December 31, | (In thousands, except per share amounts) | Net revenues | Cost of goods sold | Gross profit | Selling, general and administrative expenses | Income from operations | Interest expense, net | Other expense, net | Income before income taxes | Provision for income taxes | Net income | Adjustment payment to Class C | Net income available to all stockholders | Net income available per common share | Basic net income per share of Class A and B common stock | Basic net income per share of Class C common stock | Diluted net income per share of Class A and B common stock | Diluted net income per share of Class C common stock | Basic | Diluted | Basic | Diluted | Dividends declared |


| -100 -50 0 50 100 | (In millions) | Total market value | % Change in market value from base case | $ Change in market value from base case |


| Business changes and developments Note 2 Page 195 | Fair value measurement | Fair value option | Derivative instruments | Noninterest revenue | Interest income and interest expense | Pension and other postretirement employee benefit plans | Employee stock-based incentives | Securities | Securities financing activities | Loans | Allowance for credit losses | Variable interest entities | Goodwill and other intangible assets | Premises and equipment | Long-term debt | Income taxes | Off–balance sheet lending-related financial instruments, guarantees and other commitments | Litigation |


Our Corporate & Other segment pretax operating loss excludes net realized gains or losses, the impact of consolidating CIEs and restructuring charges.
Our Corporate & Other segment pretax operating loss was $345 million for the year ended December 31, 2013 compared to $270 million for the prior year.
Operating losses during the year ended December 31, 2013 included a loss of $31 million primarily due to how we offset accretion from an intercompany transfer of former bank assets.
Approximately $23 million of this loss was reflected in net investment loss and approximately $8 million was reflected in general and administrative expense.
The loss of $23 million in the Corporate & Other segment was offset by the associated incremental accretion income, primarily in the Annuities segment, that relates to the transfer of the bank assets and eliminates on a consolidated basis.
Corporate & Other segment results also reflected $29 million of higher interest and debt expense compared to the prior year due to $19 million in costs related to the early retirement of $350 million of our senior notes due 2015, as well as higher interest expense due to the issuance of debt in 2013.
General and administrative expense for the prior year included a $15 million benefit from a settlement with a third-party service provider.


| Cash $27,961 | Accounts receivable | Inventory | Property and equipment | Other tangible assets | Accrued taxes | Accounts payable and accrued expenses | Customer relationships | Business licenses | Trade names | Deferred taxes, net | Goodwill | Purchase Price | Years Ended | September 29, 2012 | Amount | Product Sales | Breast Health | Diagnostics | GYN Surgical | Skeletal Health | $1,657,728 |


| Year ended December 31, 2006 gross margin 77.7% | Foreign exchange impact, net | Other | Year ended December 31, 2007 gross margin |


| Interest Rates | Weighted | Range | (In millions) | Senior notes | Repurchase agreements | Surplus notes | Fixed rate notes | Other notes with varying interest rates | Capital lease obligations | Total long-term debt | Total short-term debt | Total |


| 2009 2008 2007 | Net income (loss) attributable to common shareholders | Less: Dividends on share-based awards expected to vest | Basic net income (loss) attributable to common shareholders | Noncontrolling interest in earnings of common unitholders -1 | Diluted net income (loss) attributable to common shareholders | Weighted average number of common shares outstanding | Weighted average partnership Units outstanding | Other potential dilutive shares -2 | Weighted average number of common shares and potential dilutive securities |


| December 31, 2009 December 31, 2008 | Amount | ($ in millions) | Not subject to discretionary withdrawal provisions | Subject to discretionary withdrawal, with adjustment: | With market value adjustment | At market value | At contract value, less surrender charge of 5% or more | Subtotal | Subject to discretionary withdrawal at contract value with no surrender charge or surrender charge of less than5% | Total annuity reserves and deposit liabilities | December 31, 2008 | Single Name | NAIC Designation | (in millions) | 1 | 2 | Subtotal | 3 | 4 | 5 | 6 | Subtotal | Total |


| 2014 Quarters 2013 Quarters | (Dollars in millions) | Average balance sheet | Total loans and leases | Total assets | Total deposits | Long-term debt | Common shareholders’ equity | Total shareholders’ equity | Asset quality-4 | Allowance for credit losses-5 | Nonperforming loans, leases and foreclosed properties-6 | Allowance for loan and lease losses as a percentage of total loans and leases outstanding-6 | Allowance for loan and lease losses as a percentage of total nonperforming loans and leases-6 | Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the PCI loan portfolio-6 | Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases-7 | Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases-6, 7 | Net charge-offs-8 | Annualized net charge-offs as a percentage of average loans and leases outstanding-6, 8 | Annualized net charge-offs as a percentage of average loans and leases outstanding, excluding the PCI loan portfolio-6 | Annualized net charge-offs and PCI write-offs as a percentage of average loans and leases outstanding-6 | Nonperforming loans and leases as a percentage of total loans and leases outstanding-6 | Nonperforming loans, leases and foreclosed properties as a percentage of total loans, leases and foreclosed properties-6 | Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs-8 | Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs, excluding the PCI loan portfolio | Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs and PCI write-offs | Capital ratios at period end-9 | Risk-based capital: | Common equity tier 1 capital | Tier 1 common capital | Tier 1 capital | Total capital | Tier 1 leverage | Tangible equity-3 | Tangible common equity-3 |


| Payments Due by Year  In thousands of dollars | Contractual Obligations | Unconditional Purchase Obligations | Non-cancelable Operating Leases | Long-term Debt | Total Obligations |


| DERIVATIVE CONTRACTS MARKETABLE DEBT SECURITIES PENSION PLANS FOREIGN CURRENCY TRANSLATION TOTAL | Balance at January 1, 2015 | Recorded into AOCI | Reclassified out of AOCI | Net other comprehensive income (loss) | Balance at December 31, 2015 |


Sales and Marketing Sales and marketing expenses consist primarily of personnel-related costs, including salaries, commissions, benefits and stock-based compensation for our employees engaged in sales, sales support, business development and media, marketing, corporate communications and customer service functions.
In addition, marketing and sales-related expenses also include advertising costs, market research, tradeshows, branding, marketing, public relations costs, amortization of acquired intangible assets, as well as allocated facilities and other supporting overhead costs.


At December 31, 2005, options for 1,784,765 shares were available for future grant under the 1997 Plan.
To the extent that a stock award is made from this reserve, in the form of stock options the 1,784,765 share reserve will be reduced by an amount equal to the number of shares subject to that award.
Further, if shares acquired from the 1,784,765 share reserve pursuant to stock options are forfeited, the number of shares so forfeited will return to the 1,784,765 share reserve and will again become available for issuance.


| 2006 2005 2004 | Dividend yield | Expected volatility | Risk-free interest rate | Expected option lives (in years) |


| December 31, (in millions) 2008 2007 | Goodwill | Mortgage servicing rights | Purchased credit card relationships | All other intangibles: | Other creditcard–related intangibles | Core deposit intangibles | Other intangibles | Total all other intangible assets |


1 Long-term contracts for purchase of commodities and related services, and construction and service agreements.
The commodities and related services include natural gas and associated transportation, electricity, and coal and associated transportation.2 Long-term power purchase agreements from certain affiliates of CMS Enterprises.
CMS Energy and Consumers also have recognized non-current liabilities for which the timing of payments cannot be reasonably estimated.
These items, which are excluded from the table above, include regulatory liabilities, deferred income taxes, workers compensation liabilities, accrued liabilities under renewable energy programs, and other liabilities.
Retirement benefits are also excluded from the table above.
For details related to benefit payments, see Note 11, Retirement Benefits.
Off-Balance-Sheet Arrangements: CMS Energy, Consumers, and certain of their subsidiaries also enter into various arrangements in the normal course of business to facilitate commercial transactions with third parties.
These arrangements include indemnities, surety bonds, letters of credit, and financial and performance guarantees.
Indemnities are usually agreements to reimburse a counterparty that may incur losses due to outside claims or breach of contract terms.
The maximum payment that could be required under a number of these indemnity obligations is not estimable; the maximum obligation under
In December 2006 the Tax Relief and Health Care Act of 2006 was signed into law.
The Act included a reinstatement of the federal research and experimental credit through December 31, 2007 that was retroactive to January 1, 2006.
We recorded a discrete tax benefit of approximately $3.7 million for the retroactive amount related to fiscal 2006 during the twelve months ended July 31, 2007.
Significant deferred tax assets and liabilities were as follows at the dates indicated:


| As of December 31, 2015 As of December 31, 2014 | (in millions) | Assets | Money market and government funds | Currency hedge contracts | Interest rate contracts | $118 | Liabilities | Currency hedge contracts | Accrued contingent consideration | $— |


Transfers between levels represent assets or liabilities that were previously (i) categorized at a higher level for which the inputs to the estimate became less observable or (ii) classified at a lower level for which the inputs became more observable during the period.
The Duke Energy Registrant’s policy is to recognize transfers between levels of the fair value hierarchy at the end of the period.
There were no transfers between levels during the years ended December 31, 2017, 2016 and 2015.
In addition, for Piedmont, there were no transfers between levels during the two months ended December 31, 2016, and the years ended October 31, 2016, and 2015.
Valuation methods of the primary fair value measurements disclosed below are as follows.
Investments in equity securities The majority of investments in equity securities are valued using Level 1 measurements.
Investments in equity securities are typically valued at the closing price in the principal active market as of the last business day of the quarter.
Principal active markets for equity prices include published exchanges such as the New York Stock Exchange (NYSE) and the NASDAQ Stock Market.
Foreign equity prices are translated from their trading currency using the currency exchange rate in effect at the close of the principal active market.
There was no after-hours market activity that was required to be reflected in the reported fair value measurements.
Investments in debt securities Most investments in debt securities are valued using Level 2 measurements because the valuations use interest rate curves and credit spreads applied to the terms of the debt instrument (maturity and coupon interest rate) and consider the counterparty credit rating.
If the market for a particular fixed-income security is relatively inactive or illiquid, the measurement is Level 3.
Commodity derivatives Commodity derivatives with clearinghouses are classified as Level 1.
Other commodity derivatives, including Piedmont’s natural gas supply contracts, are primarily valued using internally developed discounted cash flow models that incorporate forward price, adjustments for liquidity (bid-ask spread) and credit or non-performance risk (after reflecting credit enhancements such as collateral) and are discounted to present value.
Pricing inputs are derived from published exchange transaction prices and other observable data sources.
In the absence of an active market, the last available price may be used.
If forward price curves are not observable for the full term of the contract and the unobservable period had more than an insignificant impact on the valuation, the commodity derivative is classified as Level 3.
In isolation, increases (decreases) in natural gas forward prices result in favorable (unfavorable) fair value adjustments for gas purchase contracts; and increases (decreases) in electricity forward prices result in unfavorable (favorable) fair value adjustments for electricity sales contracts.
Duke Energy regularly evaluates and validates pricing inputs used to estimate the fair value of natural gas commodity contracts by a market participant price verification procedure.
This procedure provides a comparison of internal forward commodity curves to market participant generated curves.
Interest rate derivatives Most over-the-counter interest rate contract derivatives are valued using financial models that utilize observable inputs for similar instruments and are classified as Level 2.
Inputs include forward interest rate curves, notional amounts, interest rates and credit quality of the counterparties.
Other fair value considerations See Note 11 for a discussion of the valuation of goodwill and intangible assets.
See Note 2 related to the acquisition of Piedmont in 2016 and the purchase of NCEMPA’s ownership interests in certain generating assets in 2015.
DUKE ENERGY The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Consolidated Balance Sheets.
Derivative amounts in the table below for all Duke Energy Registrants exclude cash collateral, which is disclosed in Note 14.
See Note 15 for additional information related to investments by major security type for the Duke Energy Registrants.
II The following table shows the percent changes in dekatherms delivered and average number of customers.
The percentages for all throughput deliveries represent billed and unbilled sales.
Amounts are not weather-normalized.


| Payments Due By Period(a) | ($ in millions) | Long-term debt, including capital leases | Interest payments on long-term debt(b) | Operating leases | Purchase obligations(c) | Total payments on contractual obligations |


million excluding a gain on a bargain purchase price adjustment on the acquisition of a majority share of our operations in Turkey and restructuring costs) compared with $53 million ($72 million excluding restructuring costs) in 2012 and $66 million ($61 million excluding a gain for a bargain purchase price adjustment on an acquisition by our then joint venture in Turkey and costs associated with the closure of our Etienne mill in France in 2009) in 2011.
Sales volumes in 2013 were higher than in 2012 reflecting strong demand for packaging in the agricultural markets in Morocco and Turkey.
In Europe, sales volumes decreased slightly due to continuing weak demand for packaging in the industrial markets, and lower demand for packaging in the agricultural markets resulting from poor weather conditions.
Average sales margins were significantly lower due to input costs for containerboard rising ahead of box sales price increases.
Other input costs were also higher, primarily for energy.
Operating profits in 2013 and 2012 included net gains of $13 million and $10 million, respectively, for insurance settlements and Italian government grants, partially offset by additional operating costs, related to the earthquakes in Northern Italy in May 2012 which affected our San Felice box plant.
Entering the first quarter of 2014, sales volumes are expected to increase slightly reflecting higher demand for packaging in the industrial markets.
Average sales margins are expected to gradually improve as a result of slight reductions in material costs and planned box price increases.
Other input costs should be about flat.
Brazilian Industrial Packaging includes the results of Orsa International Paper Embalagens S. A. , a corrugated packaging producer in which International Paper acquired a 75% share in January 2013.
Net sales were $335 million in 2013.
Operating profits in 2013 were a loss of $2 million (a gain of $2 million excluding acquisition and integration costs).
Looking ahead to the first quarter of 2014, sales volumes are expected to be seasonally lower than in the fourth quarter of 2013.
Average sales margins should improve reflecting the partial implementation of an announced sales price increase and a more favorable product mix.
Operating costs and input costs are expected to be lower.
Asian Industrial Packaging net sales were $400 million in 2013 compared with $400 million in 2012 and $410 million in 2011.
Operating profits for the packaging operations were a loss of $5 million in 2013 (a loss of $1 million excluding restructuring costs) compared with gains of $2 million in 2012 and $2 million in 2011.
Operating profits were favorably impacted in 2013 by higher average sales margins and slightly higher sales volumes compared with 2012, but these benefits were offset by higher operating costs.
Looking ahead to the first quarter of 2014, sales volumes and average sales margins are expected to be seasonally soft.
Net sales for the distribution operations were $285 million in 2013 compared with $260 million in 2012 and $285 million in 2011.
Operating profits were $3 million in 2013, 2012 and 2011.
Printing Papers Demand for Printing Papers products is closely correlated with changes in commercial printing and advertising activity, direct mail volumes and, for uncoated cut-size products, with changes in whitecollar employment levels that affect the usage of copy and laser printer paper.
Pulp is further affected by changes in currency rates that can enhance or disadvantage producers in different geographic regions.
Principal cost drivers include manufacturing efficiency, raw material and energy costs and freight costs.
Printing Papers net sales for 2013 were about flat with both 2012 and 2011.
Operating profits in 2013 were 55% lower than in 2012 and 69% lower than in 2011.
Excluding facility closure costs and impairment costs, operating profits in 2013 were 15% lower than in 2012 and 40% lower than in 2011.
Benefits from lower operating costs ($81 million) and lower maintenance outage costs ($17 million) were more than offset by lower average sales price realizations ($38 million), lower sales volumes ($14 million), higher input costs ($99 million) and higher other costs ($34 million).
In addition, operating profits in 2013 included costs of $118 million associated with the announced closure of our Courtland, Alabama mill.
During 2013, the Company accelerated depreciation for certain Courtland assets, and diligently evaluated certain other assets for possible alternative uses by one of our other businesses.
The net book value of these assets at December 31, 2013 was approximately $470 million.
During 2014, we have continued our evaluation and expect to conclude as to any uses for these assets during the first quarter of 2014.
Operating profits also included a $123 million impairment charge associated with goodwill and a trade name intangible asset in our India Papers business.
Operating profits in 2011 included a $24 million gain related to the announced repurposing of our Franklin, Virginia mill to produce fluff pulp and an $11 million impairment charge related to our Inverurie, Scotland mill that was closed in 2009.


CASH FROM OPERATING ACTIVITIES  Cash provided by operations, which consists primarily of cash received from customers, decreased $150.5 million from fiscal year 2011.
The decline from the prior year was primarily due to lower net income of our continuing operations and losses in our discontinued operations.
Restricted Cash.
We hold certain cash balances that are restricted as to use.
Cash and cash equivalents  restricted totaled $48.1 million at April 30, 2012, and primarily consisted of cash held by our captive insurance subsidiary that will be used to pay claims and cash held by HRB Bank required for regulatory compliance.
CASH FROM INVESTING ACTIVITIES  Changes in cash provided by investing activities primarily relate to the following: Available-for-Sale Securities.
During fiscal year 2012, HRB Bank purchased $256.2 million in mortgagebacked securities for regulatory purposes, compared to $138.8 million in fiscal year 2011.
Additionally, we received payments on AFS securities of $66.4 million in fiscal year 2012 compared to $16.8 million and $15.8 million in fiscal years 2011 and 2010, respectively.
See additional discussion in Item 8, note 5 to the consolidated financial statements.
Mortgage Loans Held for Investment.
We received net proceeds of $49.1 million, $58.5 million and $72.8 million on our mortgage loans held for investment in fiscal years 2012, 2011 and 2010, respectively.
Purchases of Property and Equipment.
Total cash paid for property and equipment was $82.5 million, $63.0 million and $90.5 million for fiscal years 2012, 2011 and 2010, respectively.
Business Acquisitions.
Total cash paid for acquisitions was $15.3 million, $54.2 million and $10.5 million during fiscal years 2012, 2011 and 2010, respectively.
In fiscal year 2011 our previously reported Business Services segment acquired Caturano, a Boston-based accounting firm, and cash used in investing activities includes payments totaling $32.6 million related to this acquisition.
Sales of Businesses.
We received proceeds from the sales of businesses of $560.5 million, $71.1 million and $66.6 million for fiscal years 2012, 2011 and 2010, respectively.
Current year amounts include net proceeds of $523.1 million from the sale of RSM and proceeds of $37.4 million from the sale of ancillary businesses and offices.
During fiscal year 2012, we sold 83 tax offices to franchisees, compared to 280 tax offices in fiscal year 2011, and 267 in fiscal year 2010.
The majority of these sales were financed through affiliate loans.
Loans Made to Franchisees.
Loans made to franchisees totaled $46.2 million, $92.5 million and $89.7 million for fiscal years 2012, 2011 and 2010, respectively.
We received payments from franchisees totaling $56.6 million, $57.6 million and $40.7 million, respectively.
These amounts include both the financing of sales of tax offices and franchisee draws under our Franchise Equity Lines of Credit (FELCs).
CASH FROM FINANCING ACTIVITIES  Changes in cash used in financing activities primarily relate to the following: Short-Term Borrowings.
While we use commercial paper borrowings to fund our off-season losses and cover our seasonal working capital needs, we had no commercial paper borrowings outstanding as of April 30, 2012 or 2011.
Our commercial paper borrowings peaked at $331.5 million in January of the current year.
Our borrowings in the current year were lower than previous years due to cash received from the sale of RSM.
FHLB Borrowings.
HRB Bank obtains borrowings from the FHLB in accordance with regulatory and capital requirements.
During fiscal years 2012, 2011 and 2010, we had net repayments of $25.0 million, $50.0 million and $25.0 million, respectively.


| For the year ended December 31, | 2012 | (in millions) | Current income taxes (benefits): | U.S. federal | State and foreign | Total current income taxes (benefits) | Deferred income taxes (benefits) | Total income taxes |


| 2009 2010 2011 2012 2013 | Retail electric volumes sold (millions of kWhs) | Number of retail customers accounts:(a) | Industrial and large commercial | Mass market |


| Years Ended November 30, | 2003 | (In thousands) | Revenues | Costs and expenses | Net earnings of unconsolidated partnerships | Company’s share of net earnings | 2003 | Stock Options | Outstanding, beginning of year | Grants | Other * | Terminations | Exercises | Outstanding, end of year | Exercisable, end of year | Available for grant, end of year | Weighted average fair value per share of options granted during the year under SFAS No. 123 |


| Revenue  Years Ended December 31, Long-Lived Assets  December 31, | 2007 | U.S | International: | United Kingdom | Continental Europe | Latin America | Asia Pacific | Other | Total international | Total consolidated | December 31, | 2007 | Book Value | Investment securities: | Short-term marketable securities | Long-term investments | Long-term debt | Financial commitments: | Other forward contracts |


Managements discussion and analysis 110 JPMorgan Chase & Co.  / 2008 Annual Report The allowance for credit losses increased $13.7 billion from the prior year to $23.8 billion.
The increase included $4.1 billion of allowance related to noncredit-impaired loans acquired in the Washington Mutual transaction and the related accounting conformity provision.
Excluding held-for-sale loans, loans carried at fair value, and purchased credit-impaired consumer loans, the allowance for loan losses represented 3.62% of loans at December 31, 2008, compared with 1.88% at December 31, 2007.
The consumer allowance for loan losses increased $10.5 billion from the prior year as a result of the Washington Mutual transaction and increased allowance for loan loss in residential real estate and credit card.
The increase included additions to the allowance for loan losses of $4.7 billion driven by higher estimated losses for residential mortgage and home equity loans as the weak labor market and weak overall economic conditions have resulted in increased delinquencies, while continued weak housing prices have driven a significant increase in loss severity.
The allowance for loan losses related to credit card increased $4.3 billion from the prior year primarily due to the acquired allowance and subsequent conforming provision for loan loss related to the Washington Mutual Bank acquisition and an increase in provision for loan losses of $2.3 billion in 2008 over 2007, as higher estimated net charge-offs are expected in the portfolio resulting from the current economic conditions.
The wholesale allowance for loan losses increase of $3.4 billion from December 31, 2007, reflected the effect of a weakening credit environment and the transfer of $4.9 billion of funded and unfunded leveraged lending commitments to retained loans from held-for-sale.
To provide for the risk of loss inherent in the Firms process of extending credit, an allowance for lending-related commitments is held for both wholesale and consumer, which is reported in other liabilities.
The wholesale component is computed using a methodology similar to that used for the wholesale loan portfolio, modified for expected maturities and probabilities of drawdown and has an assetspecific component and a formula-based component.
For a further discussion on the allowance for lending-related commitment see Note 15 on pages 178180 of this Annual Report.
The allowance for lending-related commitments for both wholesale and consumer was $659 million and $850 million at December 31, 2008 and 2007, respectively.
The decrease reflects the reduction in lending-related commitments at December 31, 2008.
For more information, see page 102 of this Annual Report.


| 2016 Quarter Ended Dec. 31 Sept. 30 June 30 March 31 | (In millions, except per share data) | Total revenues | Net income (loss) (a) | Per share-basic and diluted | 2015 Quarter Ended | (In millions, except per share data) | Total revenues | Net income (loss) (b) | Per share-basic and diluted |


| Average volume Interest revenue % Average rate | In millions of dollars, except rates | Assets | Deposits with banks-5 | Federal funds sold and securities borrowed or purchased under agreements to resell-6 | In U.S. offices | In offices outside the U.S.-5 | Total | Trading account assets-7(8) | In U.S. offices | In offices outside the U.S.-5 | Total | Investments | In U.S. offices | Taxable | Exempt from U.S. income tax | In offices outside the U.S.-5 | Total | Loans (net of unearned income)(9) | In U.S. offices | In offices outside the U.S.-5 | Total | Other interest-earning assets-10 | Total interest-earning assets | Non-interest-earning assets-7 | Total assets from discontinued operations | Total assets | In billions of dollars | State-1 | CA | NY/NJ/CT-4 | VA/MD | IL-4 | FL-4 | TX | Other | Total-5 |


| December 31, (in millions) 2015 2014 | Interest rate | Credit derivatives | Foreign exchange | Equity | Commodity | Total, net of cash collateral | Liquid securities and other cash collateral held against derivative receivables | Total, net of all collateral |


Trading Account Assets (Liabilities) Trading account assets include debt and marketable equity securities, derivatives in a receivable position, residual interests in securitizations, and physical commodities inventory.
In addition, certain assets that Citigroup has elected to carry at fair value, such as certain loans and purchase guarantees, are also included in Trading account assets.
Trading account liabilities include securities sold, not yet purchased (short positions) and derivatives in a net payable position as well as certain liabilities that Citigroup has elected to carry at fair value.
All Trading account assets and Trading account liabilities are reported at their fair value, except for physical commodities inventory which is carried at the lower of cost or market, with unrealized gains and losses recognized in current income.
During 2009, Trading account assets decreased by $35 billion, or 9%, due to a: ?
$56 billion, or 49%, decrease in revaluation gains primarily consisting of decreases in interest rate and foreign exchange contracts as well as a decrease in netting agreements; ?
$16 billion, or 30%, decrease in mortgage loan securities driven by decreased agency and subprime debt; ?
$20 billion, or 172%, increase in U. S.  Treasury and federal agency securities; ?
$15 billion, or 27%, increase in foreign government securities; and ?
$7 billion, or 9%, increase in corporate and other debt securities.


| Ratio of Earnings to Fixed Charges | 2010 | Con Edison | CECONY | Common Equity Ratio (Percent of total capitalization) | 2010 | Con Edison | CECONY |


The Registrant Subsidiaries accrue interest expense related to unrecognized tax benefits in income tax expense and do not include it in fixed charges.
Entergy Wholesale Commodities Entergy Wholesale Commodities includes the ownership, operation, and decommissioning of nuclear power plants, located in the northern United States and the sale of the electric power produced by its operating plants to wholesale customers.
Entergy Wholesale Commodities revenues are primarily derived from sales of energy and generation capacity from these plants.
Entergy Wholesale Commodities also provides operations and management services, including decommissioning services, to nuclear power plants owned by other utilities in the United States.
Entergy Wholesale Commodities also includes the ownership of interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers.
On December 29, 2014, Entergy Wholesale Commodities’Vermont Yankee plant was removed from the grid, after 42 years of operations.
The decision to close and decommission Vermont Yankee was announced in August 2013, as a result of numerous issues including sustained low natural gas and wholesale energy prices, the high cost structure of the plant, and lack of a market structure that adequately compensates merchant nuclear plants for their environmental and fuel diversity benefits in the Northeast region.
In November 2016, Entergy entered into an agreement to sell 100% of the membership interest in Entergy Nuclear Vermont Yankee, LLC to a subsidiary of NorthStar Group Services, Inc.  (NorthStar).
Entergy Nuclear Vermont Yankee is the owner of the Vermont Yankee plant.
The sale of Entergy Nuclear Vermont Yankee to NorthStar will include the transfer of Entergy Nuclear Vermont Yankee’s nuclear decommissioning trust fund and the asset retirement obligation for spent fuel management and decommissioning of the plant.
Entergy plans to transfer all spent nuclear fuel to dry cask storage by the end of 2018, subject to obtaining necessary regulatory approvals, in advance of the planned transaction close.
Under the sale agreement and related agreements to be entered into at the closing, NorthStar will commit to initiate decommissioning and site restoration by 2021 and complete those activities, along with the partial restoration of the Vermont Yankee site, with the exception of the independent spent fuel storage installation and the switchyard, by 2030.
The original completion date, as outlined in Entergy’s Post Shutdown Decommissioning Activities Report filed with the NRC, was 2075.
The transaction is contingent upon certain closing conditions, including approval by the NRC; approval by the State of Vermont Public Service Board, including approval of site restoration standards that will be proposed as part of the transaction; the transfer of all spent nuclear fuel to dry fuel storage on the independent spent fuel storage installation; and that the market value of the fund assets held in the decommissioning trust fund for the Vermont Yankee Nuclear Power Station, less the hypothetical income tax on the aggregate unrealized net gain of such fund assets at closing, is equal to or exceeds $451.95 million, subject to adjustments.
In October 2015, Entergy determined that it would close the FitzPatrick plant earlier than expected.
The original expectation was to shut down the FitzPatrick plant at the end of its fuel cycle in January 2017, but in August 2016, Entergy entered into an agreement to sell the FitzPatrick plant to Exelon, and the sale is expected to close in the first half of 2017.
The transaction is contingent upon, among other things, the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of necessary regulatory approvals from the FERC, the NRC, and the Public Service Commission of the State of New York (NYPSC), and the receipt of a private letter ruling from the IRS.
NRC approval has not yet been received, but all other necessary regulatory approvals have been received.
Because certain specified conditions were satisfied in November 2016
Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis 15 Entergy Wholesale Commodities includes the ownership of the following nuclear reactors


NOTE 5: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS The Company is directly and indirectly affected by changes in certain market conditions.
These changes in market conditions may adversely impact the Company’s financial performance and are referred to as “market risks.
” Our Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks.
The primary market risks managed by the Company through the use of derivative instruments are foreign currency exchange rate risk, commodity price risk and interest rate risk.
The Company uses various types of derivative instruments including, but not limited to, forward contracts, commodity futures contracts, option contracts, collars and swaps.
Forward contracts and commodity futures contracts are agreements to buy or sell a quantity of a currency or commodity at a predetermined future date, and at a predetermined rate or price.
An option contract is an agreement that conveys the purchaser the right, but not the obligation, to buy or sell a quantity of a currency or commodity at a predetermined rate or price during a period or at a time in the future.
A collar is a strategy that uses a combination of options to limit the range of possible positive or negative returns on an underlying asset or liability to a specific range, or to protect expected future cash flows.
To do this, an investor simultaneously buys a put option and sells (writes) a call option, or alternatively buys a call option and sells (writes) a put option.
A swap agreement is a contract between two parties to exchange cash flows based on specified underlying notional amounts, assets and/or indices.
We do not enter into derivative financial instruments for trading purposes.
All derivatives are carried at fair value in our consolidated balance sheets in the following line items, as applicable: prepaid expenses and other assets; other assets; accounts payable and accrued expenses; and other liabilities.
The carrying values of the


Our income tax provision amounted to an income tax expense of $1,310 million in 2010 compared to a benefit of $54 million in 2009.
The increase in income tax expense primarily reflects the increase in pre-tax income from continuing operations before income taxes and equity in earnings of operating joint ventures for the year ended December 31, 2010.
In addition, the 2009 income tax benefit included a reduction to the liability for unrecognized tax benefits and related interest of $272 million primarily related to tax years prior to 2002 as a result of the expiration of the statute of limitations for the 2002 and 2003 tax years, additional interest on a tax refund received related to the 1997 through 2001 tax years, and changes in estimates.
In addition, 2010 income tax expense includes a charge for the reduction of deferred tax assets in the amount of $94 million related to the Medicare Part D subsidy and a charge of $29 million to reflect an increase in valuation allowance related to deferred tax assets established in 2010 and prior years.
The change in valuation allowance in the current year reflects the Company’s reassessment of the likelihood of the realization of state and local deferred tax assets for certain non-insurance subsidiaries.
We employ various tax strategies, including strategies to minimize the amount of taxes resulting from realized capital gains.
For additional information regarding income taxes, see Note 19 to the Consolidated Financial Statements.
Discontinued Operations Included within net income are the results of businesses which are reflected as discontinued operations under U. S.  GAAP.
Income (loss) from discontinued operations, net of taxes, was $10 million, $(39) million and $75 million for the years ended December 31, 2010, 2009 and 2008, respectively.
For additional information regarding discontinued operations see Note 3 to the Consolidated Financial Statements.
Divested Businesses Our income from continuing operations includes results from several businesses that have been or will be sold or exited that do not qualify for “discontinued operations” accounting treatment under U. S.  GAAP.
The results of these divested businesses are reflected in our Corporate and Other operations, but excluded from adjusted operating income.
A summary of the results of these divested businesses that have been excluded from adjusted operating income is as follows for the periods indicated:


| Year Ended or as of December | $ in millions | Beginning balance | Increases based on tax positions related to the current year | Increases based on tax positions related to prior years | Decreases based on tax positions related to prior years | Decreases related to settlements | Exchange rate fluctuations | Ending balance | Related deferred income taxasset | Net unrecognized tax benefit |


| 201 4 2013 | Balance, beginning of year | Increases for tax positions related to current year | Reduction due to adoption of ASU 2013-11(a) | Balance, end of year |


| Pension Benefits-1 Other Retiree Benefits-2 | Years ended June 30 | CHANGE IN BENEFIT OBLIGATION | Benefit obligation at beginning of year-3 | Service cost | Interest cost | Participants' contributions | Amendments | Actuarial loss/(gain) | Acquisitions/(divestitures) | Special termination benefits | Currency translation and other | Benefit payments | BENEFIT OBLIGATION AT END OF YEAR-3 |


| Sales Volumes Average Sales Price ProductionCost-1 Per BOE | Crude Oil &CondensateMBbl/d | Year Ended December 31, 2011 | United States | Wattenberg | Other US | Total US | Equatorial Guinea | Alba Field-2 | Other | Mari-B Field (Israel) | North Sea | China | Total Consolidated Operations | Equity Investee-3 | Total | Year Ended December 31, 2010 | United States | Wattenberg | Other US | Total US-4 | Alba Field (Equatorial Guinea)(2) | Mari-B Field (Israel) | North Sea | Ecuador-5 | China | Total Consolidated Operations | Equity Investee-3 | Total | Year Ended December 31, 2009 | United States | Wattenberg | Other US | Total US-4 | Alba Field (Equatorial Guinea)(2) | Mari-B Field (Israel) | North Sea | Ecuador | China | Total Consolidated Operations | Equity Investee-3 | Total |


| 2010  (in millions) | Southland (Huntington Beach) | Tisza II | Deepwater | Other | Total |


| Year Ended December 31, 2018 vs. 2017 2017 vs. 2016 | 2018 | Interest income | Interest expense | Depreciation and amortization | General and administrative | Transaction costs | Impairments (recoveries), net | Gain (loss) on sales of real estate, net | Loss on debt extinguishments | Other income (expense), net | Income tax benefit (expense) | Equity income (loss) from unconsolidated joint ventures | Total discontinued operations | Noncontrolling interests’ share in earnings |


| 2011 $128.5 | 2012 | 2013 | 2014 | 2015 | After 2015 | Total Payments | Less: Convertible Note Accretion | Less: Unamortized Discounts | Total |


| At December 31 (Millions) 2007 2006 2005 | Breast implant liabilities | Breast implant receivables | Respirator mask/asbestos liabilities | Respirator mask/asbestos receivables | Environmental remediation liabilities | Environmental remediation receivables | Other environmental liabilities |


Operating, administrative and other expenses increased by $27.7 million, or 11.3%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013.
The increase was primarily driven by higher payroll-related (including bonuses), occupancy and consulting costs.
Foreign currency translation had an $11.2 million positive impact on total operating expenses during the year ended December 31, 2014.
Global Investment Management Revenue decreased by $68.2 million, or 12.7%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013, primarily driven by reduced carried interest revenue.
Lower asset management fees, which reflect the sale of assets in 2013 to harvest gains for fund investors (which generated the carried interest in 2013), lower fees on some AUM in EMEA, and our exiting the management of a private REIT, also contributed to the decline during the year ended December 31, 2014.
These reductions were partially offset by higher acquisition fees during the year ended December 31, 2014 as well as foreign currency translation, which had a $4.5 million positive impact on total revenue during the year ended December 31, 2014.
Operating, administrative and other expenses increased by $21.6 million, or 6.1%, for the year ended December 31, 2014 as compared to the year ended December 31, 2013, primarily due to higher carried interest expense incurred in 2014.
Foreign currency translation also had a $2.7 million negative impact on total operating expenses during the year ended December 31, 2014.
These increases were partially offset by lower costs due to the sale of assets and internalization of the management of the private REIT discussed above.
This business transitioned from gain-harvesting in 2013 to capital-deployment in 2014.
Total AUM as of December 31, 2014 rose to $90.6 billion.
A rollforward of our AUM by product type for the year ended December 31, 2014 is as follows (dollars in billions):


Gains on Investment Securities, Net Net gains on investment securities include both gains and losses from our non-marketable and other securities, as well as gains and losses from sales of our available-for-sale securities portfolio, when applicable.
Our available-for-sale securities portfolio is primarily a fixed income investment portfolio that is managed with the objective of earning an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and credit diversification as well as addressing our asset/liability management objectives.
Sales of equity securities held as a result of our exercised warrants, result in net gains or losses on investment securities.
These sales are conducted pursuant to the guidelines of our investment policy related to the management of our liquidity position and interest rate risk.
Though infrequent, sales of investment securities in our AFS securities portfolio may result in net gains or losses and are also conducted pursuant to the guidelines of our investment policy.
Our non-marketable and other securities portfolio primarily represents investments in venture capital and private equity funds, venture debt funds and private and public portfolio companies.
We experience variability in the performance of our non-marketable and other securities from period to period, which results in net gains or losses on investment securities (both realized and unrealized).
This variability is due to a number of factors, including unrealized changes in the values of our investments, changes in the amount of realized gains from distributions, changes in liquidity events and general economic and market conditions.
Unrealized gains from non-marketable and other securities for any single period are typically driven by valuation changes, and are therefore subject to potential increases or decreases in future periods.
Such variability may lead to volatility in the gains or losses from investment securities and as such our results for a particular period are not necessarily indicative of our expected performance in a future period.
The extent to which any unrealized gains or losses will become realized is subject to a variety of factors, including, among other things, the expiration of certain sales restrictions to which these equity securities may be subject to (i. e.  lock-up agreements), changes in prevailing market prices, market conditions, the actual sales or distributions of securities, the timing of such actual sales or distributions, which, to the extent such securities are managed by our managed funds, are subject to our funds' separate discretionary sales/distributions and governance processes.
In 2015 , we had net gains on investment securities of $89.4 million , compared to $267.0 million and $419.4 million in 2014 and 2013 , respectively.
NonGAAP net gains on investment securities, net of noncontrolling interests were $57.3 million in 2015 , compared to $30.7 million and $77.3 million in 2014 and 2013 , respectively.
Net gains on investment securities, net of noncontrolling interests of $57.3 million in 2015 were driven by the following: ?
Gains of $30.2 million from our strategic and other investments, primarily driven by strong distributions from our strategic venture capital fund investments reflective of IPO and M&A activity as well as unrealized valuation increases from certain investments.  ?
Gains of $17.0 million from our managed funds of funds, primarily related to unrealized valuation increases.


| Domestic Segment Performance Summary 2010 -1 2009 -2 2008 | Revenue | Revenue gain % | Comparable store sales % gain (decline) | Gross profit as % of revenue | SG&A as % of revenue | Operating income | Operating income as % of revenue |


| 2012 | (Dollars in millions) | Allowance for loan and lease losses, January 1 | Loans and leases charged off | Recoveries of loans and leases previously charged off | Net charge-offs | Provision for loan and lease losses | Write-offs of home equity PCI loans | Other | Allowance for loan and lease losses, December 31 | Reserve for unfunded lending commitments, January 1 | Provision for unfunded lending commitments | Other | Reserve for unfunded lending commitments, December 31 | Allowance for credit losses, December 31 |


Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options.
Fixed maturity securities not due at a single maturity date have been included in the above table in the year of final contractual maturity.
RMBS, CMBS and ABS are shown separately in the table, as they are not due at a single maturity.
As discussed further in Note 2, an indemnification asset has been established in connection with certain investments acquired from American Life.
Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment As described more fully in Note 1, the Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities, equity securities and perpetual hybrid securities, in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired
‰ Net unrealized investment gains (losses); ‰ Continuous gross unrealized losses and OTTI losses for fixed maturity and equity securities available-for-sale by sector; ‰ Aging of gross unrealized losses and OTTI losses for fixed maturity and equity securities available-for-sale; ‰ Concentration of gross unrealized losses and OTTI losses for fixed maturity and equity securities available-for-sale; and ‰ Evaluating temporarily impaired available-for-sale securities.
Trading and Other Securities The Company has a trading securities portfolio, principally invested in fixed maturity securities, to support investment strategies that involve the active and frequent purchase and sale of securities (“Actively Traded Securities”) and the execution of short sale agreements.
Trading and other securities also include securities for which the FVO has been elected (“FVO Securities”).
FVO Securities include certain fixed maturity and equity securities held for investment by the general account to support asset and liability matching strategies for certain insurance products.
FVO Securities also include contractholder-directed investments supporting unit-linked variable annuity type liabilities which do not qualify for presentation as separate account summary total assets and liabilities.
These investments are primarily mutual funds and, to a lesser extent, fixed maturity and equity securities, short-term investments and cash and cash equivalents.
The investment returns on these investments inure to contractholders and are offset by a corresponding change in PABs through interest credited to policyholder account balances.
FVO Securities also include securities held by CSEs (former qualifying special purpose entities).
Trading and other securities were $18.3 billion and $18.6 billion at estimated fair value, or 3.5% and 3.9% of total cash and invested assets, at December 31, 2011 and 2010, respectively.
See Note 3 of the Notes to the Consolidated Financial Statements for tables which present information about the Actively Traded Securities and FVO Securities, related short sale agreement liabilities and investments pledged to secure short sale agreement liabilities at December 31, 2011 and 2010.
Trading and other securities and trading (short sale agreement) liabilities, measured at estimated fair value on a recurring basis and their corresponding fair value hierarchy, are presented as follows:


Market-based restricted stock units were not granted during fiscal 2013 or 2012.
Expected volatility — The Company is responsible for estimating volatility and has considered a number of factors, including third-party estimates.
The Company currently believes that the exclusive use of implied volatility results in the best estimate of the grant-date fair value of employee stock options because it reflects the market’s current expectations of future volatility.
In evaluating the appropriateness of exclusively relying on implied volatility, the Company concluded that: (1) options in the Company’s common stock are actively traded with sufficient volume on several exchanges; (2) the market prices of both the traded options and the underlying shares are measured at a similar point in time to each other and on a date close to the grant date of the employee share options; (3) the traded options have exercise prices that are both near-the-money and close to the exercise price of the employee share options; and (4) the remaining maturities of the traded options used to estimate volatility are at least one year.
Expected term — The Company uses historical employee exercise and option expiration data to estimate the expected term assumption for the Black-Scholes grant-date valuation.
The Company believes that this historical data is currently the best estimate of the expected term of a new option, and that generally its employees exhibit similar exercise behavior.
Risk-free interest rate — The yield on zero-coupon U. S.  Treasury securities for a period that is commensurate with the expected term assumption is used as the risk-free interest rate.
Expected dividend yield — Expected dividend yield is calculated by annualizing the cash dividend declared by the Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the date of grant.
Until such time as the Company’s Board of Directors declares a cash dividend for an amount that is different from the current quarter’s cash dividend, the current dividend will be used in deriving this assumption.
Cash dividends are not paid on options, restricted stock or restricted stock units.


| Year Ended December 31, | 2006 | (In thousands, except per share amounts) | Consolidated Statement of Income Data -1: | Net revenues | Gross profit | Income from operations | Income before income taxes | Net income | Net income per share: | Basic | Diluted | Weighted average shares: | Basic | Diluted |


| 2014 2013 | (in millions) | Differences between book and tax basis of property | Other taxable temporary differences | Total deferred tax liability | Operating loss carryforwards | Capital loss carryforwards | Bad debt and other book provisions | Retirement costs | Tax credit carryforwards | Other deductible temporary differences | Total gross deferred tax asset | Less: valuation allowance | Total net deferred tax asset | Net deferred tax asset (liability) |


Legal Matters We are involved in various legal proceedings, and subject to investigations, inspections, audits, inquiries and similar actions by governmental authorities arising in the normal course of business.
The types of allegations that arise in connection with such legal proceedings vary in nature, but can include claims related to contract, employment, tax and intellectual property matters.
We evaluate all cases each reporting period and record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount, or potential range, of loss can be reasonably estimated.
In certain cases, we cannot reasonably estimate the potential loss because, for example, the litigation is in its early stages.
While any outcome related to litigation or such governmental proceedings in which we are involved cannot be predicted with certainty, management believes that the outcome of these matters, individually and in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows.
As previously disclosed, on April 10, 2015, a federal judge in Brazil authorized the search of the records of an agencys offices in S?o Paulo and Brasilia, in connection with an ongoing investigation by Brazilian authorities involving payments potentially connected to local government contracts.
The Company had previously investigated the matter and taken a number of remedial and disciplinary actions.
The Company has been in the process of concluding a settlement related to these matters with government agencies, and that settlement was fully executed in April 2018.
The Company has previously provided for such settlement in its Consolidated Financial Statements.


| (in thousands, exceptweighted-average data) Number of options/SARs Weighted-average exercise price Weighted-average remaining contractual life (in years) Aggregate intrinsic value | Outstanding, January 1 | Granted | Exercised | Forfeited | Canceled | Outstanding, December 31 | Exercisable, December 31 |


| 2009 2008 | (in millions of U.S. dollars) | Case reserves | IBNR reserves | Total | 2009 | (in millions of U.S. dollars) | Property and all other | Case reserves | Loss expenses | IBNR reserves | Subtotal | Casualty | Case reserves | Loss expenses | IBNR reserves | Subtotal | A&H | Case reserves | Loss expenses | IBNR reserves | Subtotal | Total | Case reserves | Loss expenses | IBNR reserves | Total |


MARATHON OIL CORPORATION Notes to Consolidated Financial Statements Assumed health care cost trend rates have a significant effect on the amounts reported for defined benefit retiree health care plans.
A one-percentage-point change in assumed health care cost trend rates would have the following effects: