MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The $19.5 million decrease in interest expense is primarily attributable to lower outstanding balances on the Company’s lines of credit associated with the financing of the Company’s investment and operating activities.
The Company has maintained a significantly lower balance on its lines of credit throughout 2001 compared to 2000, as a result of its property dispositions proceeds used to fund future development, combined with a lower development level as a result of the slower economy.
Additionally, the Company paid off $128.5 million of secured mortgage loans throughout 2001, as well as an $85 million unsecured term loan.
These decreases were partially offset by an increase in interest expense on unsecured debt as a result of the Company issuing $175.0 million of debt in February 2001, as well as a decrease in the amount of interest capitalized in 2001 versus 2000, because of the decrease in development activity by the Company.
As a result of the above-mentioned items, earnings from Rental Operations increased $28.9 million from $225.2 million for the year ended December 31, 2000, to $254.1 million for the year ended December 31, 2001.
Service Operations Service Operations revenues decreased from $82.8 million for the year ended December 31, 2000, to $80.5 million for the year ended December 31, 2001.
The Company experienced a decrease of $4.3 million in net general contractor revenues from third party jobs because of a decrease in the volume of construction in 2001, compared to 2000, as well as slightly lower profit margins.
This decrease is the effect of businesses delaying or terminating plans to expand in the wake of the slowed economy.
Property management, maintenance and leasing fee revenues decreased approximately $2.7 million mainly because of a decrease in landscaping maintenance revenue associated with the sale of the landscape business in the third quarter of 2001 (see discussion below).
Construction management and development activity income represents construction and development fees earned on projects where the Company acts as the construction manager along with profits from the Company’s held for sale program whereby the Company develops a property for sale upon completion.
The increase in revenues of $2.2 million in 2001 is primarily because of an increase in profits on the sale of properties from the held for sale program.
Other income increased approximately $2.4 million in 2001 over 2000; due to a $1.8 million gain the Company recognized on the sale of its landscape business in the third quarter of 2001.
The sale of the landscape business resulted in a total net profit of over $9 million after deducting all related expenses.
This gain will be recognized in varying amounts over the next seven years because the Company has an on-going contract to purchase future services from the buyer.
Service Operations expenses decreased by $4.7 million for the year ended December 31, 2001, compared to the same period in 2000, as the Company reduced total overhead costs throughout 2001 in an effort to minimize the effects of decreased construction and development activity.
The primary savings were experienced in employee salary and related costs through personnel reductions and reduced overhead costs from the sale of the landscaping business.
As a result, earnings from Service Operations increased from $32.8 million for the year ended December 31, 2000, to $35.1 million for the year ended December 31, 2001.
General and Administrative Expense General and Administrative Expense decreased from $21.1 million in 2000 to $15.6 million for the year ended December 31, 2001, through overhead cost reduction efforts.
In late 2000 and continuing throughout 2001, the Company introduced several cost cutting measures to reduce the amount of overhead, including personnel reductions, centralization of responsibilities and reduction of employee costs such as travel and entertainment.


| Millions 2012 2011 2010 % Change 2012 v 2011 % Change 2011 v 2010 | Compensation and benefits | Fuel | Purchased services and materials | Depreciation | Equipment and other rents | Other | Total |


| Year ended December 31In millions 2014 2013 | Net interest income | Noninterest income | Total customer-related trading revenue | Securities trading (b) | Foreign exchange | Financial derivatives and other | Total customer-related trading revenue |


However, research and development headcount at the end of fiscal year 2017 decreased to 1,192 from 1,211 at the end of fiscal year 2016 due to a reduction in workforce that took place in the fourth quarter of fiscal year 2017.
Research and development expense included stock-based compensation expense of $47.3 million, $53.4 million and $52.6 million for fiscal years 2018, 2017 and 2016, respectively.
We expect research and development expenses to be consistent as a percentage of net revenue in the foreseeable future.


| Total UnitedStates WestAfrica-1 EasternMediter-ranean-2 NorthSea Other Int'l,Corporate-3 | (millions) | Year Ended December 31, 2011 | Dry Hole Expense | Seismic | Staff Expense | Other | Total Exploration Expense | Year Ended December 31, 2010 | Dry Hole Expense | Seismic | Staff Expense | Other | Total Exploration Expense | Year Ended December 31, 2009 | Dry Hole Expense | Seismic | Staff Expense | Other | Total Exploration Expense |


| Con Edison CECONY | (Millions of Dollars) | Beginning balance as of January 1, | Included in earnings | Included in regulatory assets and liabilities | Purchases | Sales (a) | Settlements | Ending balance as of December 31, |


MetLife, Inc.  Notes to the Consolidated Financial Statements — (Continued) Properties acquired through foreclosure were $165 million, $127 million and less than $1 million for the years ended December 31, 2010, 2009 and 2008, respectively, and includes commercial, agricultural and residential properties.
After the Company acquires properties through foreclosure, it evaluates whether the property is appropriate for retention in its traditional real estate portfolio.
Foreclosed real estate held at December 31, 2010 and 2009 includes those properties the Company has not selected for retention in its traditional real estate portfolio and which do not meet the criteria to be classified as held-for-sale.
The wholly-owned real estate within traditional real estate is net of accumulated depreciation of $1.7 billion and $1.4 billion at December 31, 2010 and 2009, respectively.
Related depreciation expense on traditional wholly-owned real estate was $151 million, $135 million and $136 million for the years ended December 31, 2010, 2009 and 2008, respectively.
These amounts include depreciation expense related to discontinued operations of less than $1 million for the year ended December 31, 2010, and $1 million for both the years ended December 31, 2009 and 2008.
The estimated fair value of the traditional real estate investment portfolio was $6.6 billion and $5.4 billion at December 31, 2010, and 2009, respectively.
Impairments recognized on real estate held-for-investment were $48 million, $160 million and $20 million for the years ended Decem- ber 31, 2010, 2009 and 2008, respectively.
Impairments recognized on real estate held-for-sale were $1 million for the year ended December 31, 2010.
There were no impairments recognized on real estate held-for-sale for each of the years ended December 31, 2009 and 2008.
The Company’s carrying value of real estate held-for-sale has been reduced by impairments recorded prior to 2009 of $1 million at both December 31, 2010 and 2009.
The carrying value of non-income producing real estate was $137 million, $76 million and $28 million at December 31, 2010, 2009 and 2008, respectively.
The Company diversifies its real estate investments by both geographic region and property type to reduce risk of concentration.
The Company’s real estate investments are primarily located in the United States, at 88%, with the remaining 12% located outside the United States , at December 31, 2010.
The three locations with the largest real estate investments were California, Florida and Japan at 21%, 12% and 10%, respectively, at December 31, 2010.
The Company’s real estate investments by property type are categorized as follows:


| (Amounts in millions) Amount | Unrecognized tax benefits as of December 31, 2006 | Gross increases – tax positions in prior periods | Gross decreases – tax positions in prior periods | Gross increases – tax positions in the current period | Settlements with taxing authorities | Lapsing of statutes of limitations | Unrecognized tax benefits as of December 29, 2007 |


| Notional Value Strike Rate Maturity Fair Value | Interest Rate Collar | Interest Rate Swap |


| Net Unrealized Gains (Losses) On Investments(1) Deferred Policy Acquisition Costs and Valuation of Business Acquired Future Policy Benefits Policyholders’ Dividends Deferred Income Tax (Liability) Benefit Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains(Losses) | (in millions) | Balance, December 31, 2004 | Net investment gains (losses) on investments arising during the period | Reclassification adjustment for (gains) losses included in net income | Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and valuation of business acquired | Impact of net unrealized investment (gains) losses on future policy benefits | Impact of net unrealized investment (gains) losses on policyholders’ dividends | Balance, December 31, 2005 | Net investment gains (losses) on investments arising during the period | Reclassification adjustment for (gains) losses included in net income | Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and valuation of business acquired | Impact of net unrealized investment (gains) losses on future policy benefits | Impact of net unrealized investment (gains) losses on policyholders’ dividends | Balance, December 31, 2006 | Net investment gains (losses) on investments arising during the period | Reclassification adjustment for (gains) losses included in net income | Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and valuation of business acquired | Impact of net unrealized investment (gains) losses on future policy benefits | Impact of net unrealized investment (gains) losses on policyholders’ dividends | Balance, December 31, 2007 |


| December 31, Credit exposure Nonperforming (f) | (in millions) | Loans retained | Loans held-for-sale | Loans at fair value | Loans– reported | Derivative receivables | Receivables from customers(a) | Interests in purchased receivables(b) | Total wholesale credit-related assets | Lending-related commitments(c) | Total wholesale credit exposure | Net credit derivative hedges notional(d) | Liquid securities and other cash collateral held against derivatives(e) |


| Total Less Than 1 Year 1 - 3 Years 4 - 5 Years After 5 Years | Commitments to fund mortgage loans | Commitments to sell mortgage loans | Pledged securities | Commitment to fund M&P | Franchise Equity Lines of Credit | Mortgage loan repurchase obligations | Construction of new building | Other commercial commitments | Total commercial commitments |


On February 17, 2015, NRG paid a quarterly dividend on the Company's common stock of $0.145 per share, or $0.58 per share on an annualized basis, an increase of 4% from $0.56 per share.
Employee Stock Purchase Plan — Under the ESPP, eligible employees may elect to withhold up to 10% of their eligible compensation to purchase shares of NRG common stock at the lesser of 85% of its fair market value on the offering date or 85% of the fair market value on the exercise date.
An offering date occurs each Jan 1 and July1.
An exercise date occurs each June 30 and December 31.
As of December 31, 2014, there remained 1,560,052 shares of treasury stock reserved for issuance under the ESPP, and in the first quarter of 2015, 124,624 shares of common stock were issued to employee accounts from treasury stock.2015 Capital Allocation Program — In December 2014, the Company was authorized to repurchase $100 million of its common stock under the 2015 Capital Allocation Program.
The purchase of common stock was made using cash on hand.
As of December 31, 2014, the Company had purchased 1,624,360 shares of NRG common stock for approximately $44 million at an average cost of $26.95 per share.
In the first quarter of 2015, the Company purchased an additional 2,224,830 shares of NRG common stock for approximately $56 million at an average cost of $25.25 per share.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Fiscal years ended May 30, 2010, May 31, 2009, and May 25, 2008 Columnar Amounts in Millions Except Per Share Amounts Other indebtedness included $83 million and $89 million of debt of consolidated variable interest entities at May 30, 2010 and May 31, 2009, respectively.
The liabilities recognized as a result of consolidating the Lamb Weston BSW entity do not represent additional claims on our general assets.
The creditors of Lamb Weston BSW have claims only on the assets of the specific variable interest entity to which they extend credit.
During the fourth quarter of fiscal 2009, we issued $500 million of senior notes maturing in 2014 and $500 million of senior notes maturing in 2019.
During fiscal 2009, we retired $357.3 million of 6.75% senior long-term debt due September 2011, $27.6 million of 7.125% senior long-term debt due October 2026, $290.8 million of 6.7% senior long-term debt due August 2027, $17.9 million of 7% senior long-term debt due October 2028, $252.0 million of 7.875% senior long-term debt due September 2010, and $4.1 million of 9.75% senior subordinated long-term debt due March 2021, prior to the maturity of the long-term debt, resulting in net charges of $49.2 million.
As discussed in Note 3, in September 2008, we entered into a potato processing venture, Lamb Weston BSW.
We have determined that the venture is a variable interest entity and that we are the primary beneficiary of the entity.
Accordingly, we consolidate the financial statements of the venture.
During the second quarter of fiscal 2009, Lamb Weston BSWentered into a term loan agreement with a bank under which it borrowed $20.0 million of senior debt at an annual interest rate of 4.34% due September 2018.
During the third quarter of fiscal 2009, Lamb Weston BSW restructured and repaid this debt and entered into a term loan agreement with a bank under which it borrowed $40.0 million of variable (30-day LIBOR+1.85%) interest rate debt due in June 2018.
In the first quarter of fiscal 2010, we established a line of credit with Lamb Weston BSW, under which we will lend up to $1.5 million to Lamb Weston BSW, due on August 24, 2010.
Borrowings under the line of credit, which are subordinate to Lamb Weston BSW’s borrowings from a syndicate of banks, bear interest at a rate of LIBOR plus 3%.
Our most restrictive debt agreements (the revolving credit facility and certain privately placed long-term debt) require that our consolidated funded debt not exceed 65% of our consolidated capital base, and that our fixed charges coverage ratio be greater than 1.75 to 1.0.
At May 30, 2010, we were in compliance with our debt covenants.
Net interest expense consists of:


| December 31, 2011 December 31, 2010 | Carrying Value | Assets | Held-to-maturity securities | Loans receivable, net-1 | Liabilities | Deposits | Securities sold under agreements to repurchase | FHLB advances and other borrowings | Corporate debt |


| In millions 2014 2013 2012 | Total stock-based compensation expense (included in selling and administrative expense) | Income tax benefits related to stock-based compensation |


The tables below summarize gains and losses due to changes in fair value, including both realized and unrealized gains (losses), recorded in earnings for Level 3 assets and liabilities during 2009, 2008 and 2007.
These amounts include those gains (losses) generated by loans, LHFS, loan commitments and structured notes which are accounted for under the fair value option.


| Country Function Size (square feet) Property Interest | Boston, MA | Southborough, MA | Woburn, MA | Atlanta, GA | Cary, NC | Mexico City, Mexico | Sao Paulo, Brazil | Delhi, India | Mumbai, India | Lima, Peru | Bogota, Colombia |


(1) Includes revenues from government securities and corporate debt, municipal securities, mortgage securities and other debt instruments.
Also includes spot and forward trading of currencies and exchange-traded and over-the-counter (OTC) currency options, options on fixed income securities, interest rate swaps, currency swaps, swap options, caps and floors, financial futures, OTC options and forward contracts on fixed income securities.
(2) Includes revenues from foreign exchange spot, forward, option and swap contracts, as well as foreign currency translation (FX translation) gains and losses.
(3) Includes revenues from common, preferred and convertible preferred stock, convertible corporate debt, equity-linked notes and exchange-traded and OTC equity options and warrants.
(4) Primarily includes revenues from crude oil, refined oil products, natural gas and other commodities trades.
(5) Includes revenues from structured credit products.


2016 compared to 2015 Ahafo, Ghana.
Gold production increased 5% due to higher throughput as a result of higher mill utilization and slightly higher mill recovery rates, partially offset by lower ore grade milled.
Costs applicable to sales per ounce increased 44% primarily due to higher stockpile inventory adjustments as a result of lower grades on stockpiles, partially offset by higher ounces sold and lower oil prices.
Depreciation and amortization per ounce increased 68% primarily due to higher stockpile inventory adjustments as a result of lower grades on stockpiles.
All-in sustaining costs per ounce sold increased 29% due to higher costs applicable to sales per ounce, partially offset by lower sustaining capital spend.


| Amount of Commitment Expiration per Period | Other Commercial CommitmentsMillions | Credit facilities [a] | Receivables securitization facility [b] | Guarantees [c] | Standby letters of credit [d] | Total commercialcommitments |


| Millions of kWh Delivered Revenues in Millions (a) | For the Years Ended | Description | Residential/Religious (b) | Commercial/Industrial | Retail choice customers | Public authorities | Other operating revenues (c) | Total |


| (In millions) 25 Basis-Point Increase 25 Basis-Point  Decrease | Discount rate | Expected return on assets |


| In millions December 31,2008Total FairValue (a) Total losses for year ended December 31, 2008 | Assets | Nonaccrual loans | Loans held for sale | Equity investment | Commercial mortgage servicing rights | Total assets |


| Estimated % Change inNet Interest Income over 12 Months December 31, | Basis points | Instantaneous Change in Interest Rates | +200 | +100 | -100 | Gradual Change in Interest Rates | +200 | +100 | -100 |


| December 31, 2002 December 31, 2001 | Carrying Amount | Assets: | Foreign currency forwards and swaps, net | Energy derivatives, net | Liabilities: | Non-recourse debt | Recourse debt | Tecons | Interest rate swaps | Interest rate caps and floors, net | Years Ended December 31, | Results of operations | (in millions, except per share amounts) | Revenue: | US SBU | Andes SBU | Brazil SBU | MCAC SBU | Europe SBU | Asia SBU | Corporate and Other | Intersegment eliminations | Total Revenue | Operating Margin: | US SBU | Andes SBU | Brazil SBU | MCAC SBU | Europe SBU | Asia SBU | Corporate and Other | Intersegment eliminations | Total Operating Margin | General and administrative expenses | Interest expense | Interest income | Loss on extinguishment of debt | Other expense | Other income | Gain on disposal and sale of investments | Goodwill impairment expense | Asset impairment expense | Foreign currency transaction gains (losses) | Other non-operating expense | Income tax expense | Net equity in earnings of affiliates | INCOME (LOSS) FROM CONTINUING OPERATIONS | Income (loss) from operations of discontinued businesses | Net gain (loss) from disposal and impairments of discontinued operations | NET INCOME (LOSS) | Noncontrolling interests: | (Income) from continuing operations attributable to noncontrolling interests | (Income) loss from discontinued operations attributable to noncontrolling interests | Net income (loss) attributable to The AES Corporation | AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS: | Income (loss) from continuing operations, net of tax | Income (loss) from discontinued operations, net of tax | Net income (loss) | Net cash provided by operating activities | DIVIDENDS DECLARED PER COMMON SHARE |


Employee Stock Purchase Plan In March 1988, the Company adopted the 1988 Employee Stock Purchase Plan (“the Purchase Plan” or “ESPP”), as amended.
Under the Purchase Plan, eligible employees, including officers and directors, who have completed three months of employment with the Company or its subsidiaries who elect to participate in the Purchase plan instruct the Company to withhold a specified amount from each payroll period during a six-month payment period (the periods April 1—September 30 and October 1—March 31).
On the last business day of each payment period, the amount withheld is used to purchase common stock at an exercise price equal to 85% of the lower of its market price on the first business day or the last business day of the payment period.
Up to 500,000 shares of common stock may be issued under the Purchase Plan, of which 163,245 shares are available for future issuance as of March 31, 2009.
During the years ended March 31, 2009, 2008 and 2007, 45,823, 23,930, and 27,095 shares of common stock, respectively, were sold pursuant to the Purchase Plan.


| December 31 | (Dollars in millions) | Consumer | Residential mortgage | Credit card – domestic | Credit card – foreign | Home equity-1 | Direct/Indirect consumer-1, 2 | Other consumer-1, 3 | Total consumer | Commercial | Commercial – domestic-4 | Commercial real estate-5 | Commercial lease financing | Commercial – foreign | Total commercial loans measured at historical cost | Commercial loans measured at fair value-6 | Total commercial | Total loans and leases |


Table 4
(a) The shares reported in this column represent purchases settled in the fourth quarter of 2018 relating to (i) our purchases of shares in open-market transactions to meet our obligations under stock-based compensation plans and (ii) our purchases of shares from our employees and non-employee directors in connection with the exercise of stock options, the vesting of restricted stock, and other stock compensation transactions in accordance with the terms of our stock-based compensation plans.
(b) On January 23, 2018, we announced that our board of directors authorized our purchase of up to $2.5 billion of our outstanding common stock (the 2018 Program), with no expiration date, which was in addition to the remaining amount available under a $2.5 billion program authorized on September 21, 2016 (the 2016 Program).
During the fourth quarter of 2018, we completed our purchases under the 2016 Program.
As of December 31, 2018, we had $2.2 billion remaining available for purchase under the 2018 Program.


| Actual | CRIP | Canadian Equities | International Equities (including U.S. Equities) | Fixed Income | Money Market |


HOLLY ENERGY PARTNERS, L. P.  HEPis a Delaware limited partnership that trades on the New York Stock Exchange under the trading symbol “HEP.
” HEPowns and operates logistic assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and refinery processing units that principally support our refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain regions of the United States and Delek's refinery in Big Spring, Texas.
Additionally, HEP owns a 75% interest in UNEV Pipeline, LLC (“UNEV”), the owner of a pipeline running from Woods Cross, Utah to Las Vegas, Nevada (the “UNEV Pipeline”) and associated product terminals; a 50% interest in Osage Pipe Line Company, LLC, the owner of a pipeline running from Cushing, Oklahoma to El Dorado, Kansas (the “Osage Pipeline”); and a 50% interest in Cheyenne Pipeline, LLC, the owner of a pipeline running from Fort Laramie, Wyoming to Cheyenne, Wyoming (the “Cheyenne Pipeline”).
HEP generates revenues by charging tariffs for transporting petroleum products and crude oil through its pipelines, by leasing certain pipeline capacity to Delek, by charging fees for terminalling and storing refined products and other hydrocarbons and providing other services at its storage tanks, terminals and refinery processing units.
HEP does not take ownership of products that it transports, terminals, stores or refines; therefore, it is not directly exposed to changes in commodity prices.
HEP's recent acquisitions (2015 through present) are summarized below: SLC Pipeline and Frontier Aspen On October 31, 2017, HEPacquired the remaining 75% interest in SLC Pipeline LLC, the owner of a pipeline that serves refineries in the Salt Lake City, Utah area (the “SLC Pipeline”), and the remaining 50% interest in Frontier Aspen LLC, the owner of a pipeline running from Wyoming to Frontier Station, Utah (the “Frontier Pipeline”), from subsidiaries of Plains All American Pipeline, L. P.  (“Plains”) for total cash consideration of $250.0 million.


| December 31, | 2014 | (Dollars in thousands) | Silicon Valley BancVentures, LP | SVB Capital Partners II, LP | Capital Partners III, LP | SVB Capital Shanghai Yangpu Venture Capital Fund | Total other venture capital investments |


Environmental Costs The Companys water and wastewater operations and the operations of its Market-Based Businesses are subject to U. S.  federal, state, local and foreign requirements relating to environmental protection, and as such, the Company periodically becomes subject to environmental claims in the normal course of business.
Environmental expenditures that relate to current operations or provide a future benefit are expensed or capitalized as appropriate.
Remediation costs that relate to an existing condition caused by past operations are accrued, on an undiscounted basis, when it is probable that these costs will be incurred and can be reasonably estimated.
A conservation agreement entered into by a subsidiary of the Company with the National Oceanic and Atmospheric Administration in 2010 and amended in 2017 required the Company to, among other provisions, implement certain measures to protect the steelhead trout and its habitat in the Carmel River watershed in the State of California.
The Company agreed to pay $1 million annually commencing in 2010 with the final payment being made in 2021.
Remediation costs accrued amounted to $6 million and less than $1 million as of December 31, 2017 and 2016, respectively.


| ($ in millions) 2008 2007 | Immediate fixed annuities: | Structured settlement annuities | Other immediate fixed annuities | Traditional life insurance | Other | Total reserve for life-contingent contract benefits |


| December 31, | 2018 | (in millions) | Other assets: | Premium tax offset for future undiscounted assessments | Premium tax offset currently available for paid assessments | Total | Other liabilities: | Insolvency assessments |


the duration of the liabilities in each plan when selecting the bonds to be used in determining the discount rate.
The rate of compensation increase for all plans and the medical cost trend rate for the applicable U. S.  plans are based on plan experience.
With respect to the U. S.  plans, the expected rate of return on plan assets was determined based on an asset allocation model using the current target allocation, real rates of return by asset class and an anticipated inflation rate.
The target asset allocation consists of approximately: 20% in equity securities and 80% in fixed income securities.
The plan has achieved a compounded annual rate of return of 4.9% over the previous 20 years.
At December 31, 2018, the actual asset allocation for the U. S.  plan was: 1% cash and cash equivalents, 25% in equity securities and 74% in fixed income securities.
The expected rate of return for the non-U.
S.  plans employs a similar set of criteria adapted for local investments, inflation rates and in certain cases specific government requirements.
The target asset allocation, for the non-U.
S.  plans, consists of approximately: 40% – 70% in fixed income securities; 15% – 40% in equity securities; 5% – 20% in real estate; and 5% – 10% in alternative investments.
At December 31, 2018, the actual asset allocation for the non-U.
S.  plan was: 36% in fixed income investments; 12% in equity investments; 8% in real estate investments, 3% in cash and cash equivalents and 41% in alternative investments.
Changes in pension and other post-employment benefits, and associated expenses, may occur in the future due to changes in these assumptions.
The impact that a 0.25% decrease in the discount rate or a 1% change in the medical cost trend rate would have on our pension and other post-employment benefit expense, as applicable, is as follows:


| At December 31, | 2011 | (dollar amounts in millions) | Secured loans: | Real estate — commercial | Real estate — consumer | Vehicles | Receivables/Inventory | Machinery/Equipment | Securities/Deposits | Other | Total secured loans and leases | Unsecured loans and leases | Total loans and leases |


D. R.  HORTON, INC.  AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 75 Effective August 1, 2017, the Board of Directors authorized the repurchase of up to $500 million of the Company’s debt securities effective through July 31, 2018.
All of the $500 million authorization was remaining at September 30, 2017.
Financial Services: The Company’s mortgage subsidiary, DHI Mortgage, has a mortgage repurchase facility that is accounted for as a secured financing.
The mortgage repurchase facility provides financing and liquidity to DHI Mortgage by facilitating purchase transactions in which DHI Mortgage transfers eligible loans to the counterparties against the transfer of funds by the counterparties, thereby becoming purchased loans.
DHI Mortgage then has the right and obligation to repurchase the purchased loans upon their sale to third-party purchasers in the secondary market or within specified time frames from 45 to 60 days in accordance with the terms of the mortgage repurchase facility.
In February 2017, the mortgage repurchase facility was amended to increase its capacity to $600 million and extend its maturity date to February 23, 2018.
The capacity of the facility increases, without requiring additional commitments, to $725 million for approximately 30 days at each quarter end and to $800 million for approximately 45 days at fiscal year end.
The capacity can also be increased to $1.0 billion subject to the availability of additional commitments.
As of September 30, 2017, $540.1 million of mortgage loans held for sale with a collateral value of $520.0 million were pledged under the mortgage repurchase facility.
As a result of advance paydowns totaling $100.0 million, DHI Mortgage had an obligation of $420.0 million outstanding under the mortgage repurchase facility at September 30, 2017 at a 3.3% annual interest rate.
The mortgage repurchase facility is not guaranteed by D. R.  Horton, Inc.  or any of the subsidiaries that guarantee the Company’s homebuilding debt.
The facility contains financial covenants as to the mortgage subsidiary’s minimum required tangible net worth, its maximum allowable ratio of debt to tangible net worth and its minimum required liquidity.
These covenants are measured and reported to the lenders monthly.
At September 30, 2017, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facility.
In the past, DHI Mortgage has been able to renew or extend its mortgage credit facility at a sufficient capacity and on satisfactory terms prior to its maturity and obtain temporary additional commitments through amendments to the credit facility during periods of higher than normal volumes of mortgages held for sale.
The liquidity of the Company’s financial services business depends upon its continued ability to renew and extend the mortgage repurchase facility or to obtain other additional financing in sufficient capacities.
NOTE E – CAPITALIZED INTEREST The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the years ended September 30, 2017, 2016 and 2015.


THE COMPANY’S STOCK PERFORMANCE The following graph compares cumulative total return of the Company’s Common Stock with the cumulative total return of (i) the NASDAQ Stock Market-United States, and (ii) the NASDAQ Biotechnology Index.
The graph assumes (a) $100 was invested on July 31, 2001 in each of the Company’s Common Stock, the stocks comprising the NASDAQ Stock Market-United States and the stocks comprising the NASDAQ Biotechnology Index, and (b) the reinvestment of dividends.
COMPARISON OF 65 MONTH CUMULATIVE TOTAL RETURN* Among Alexion Pharmaceuticals, Inc. , The NASDAQ Composite Index And The NASDAQ Biotechnology Index


| Years Ended December 31, | 2008 | (In millions) | Group retirement products | Balance at beginning of year | Deposits — annuities | Deposits — mutual funds | Total Deposits | Surrenders and other withdrawals | Death benefits | Net inflows (outflows) | Change in fair value of underlying investments, interest credited, net of fees | Balance at end of year |


| Year Ended December 31, Change | (in thousands, except percentages) | Revenue: | Lease licenses | Perpetual licenses | Software licenses | Maintenance | Service | Maintenance and service | Total revenue |


| 2009 2008 | Balance at January 1 | Additions based on tax positions related to the current year | Additions for tax positions of prior years | Reductions for tax positions of prior years | Settlements | Lapse of statute of limitations | Acquisitions | Foreign currency translation | Balance at December 31 |


LIABILITY AWARDS Beginning in 2008, we granted cash-payable restricted share units to certain executives.
The grants were made primarily as part of an annual bonus incentive deferral plan.
While there are time-based, service-related vesting criteria, there are no market or performance criteria associated with these awards.
Compensation expense recognized related to these awards was recorded in prior periods as part of annual cash bonus criteria.
As of December 31, 2009, there were 440,441 of these cashpayable restricted share units outstanding.
During the third quarter of 2009, we entered into an agreement with certain of our executives regarding a portion of their salary to be payable in stock units.
These units, which are cash-payable, have no future service, market or performance criteria and as such are fully expensed at grant date.
These units will be settled in cash on March 31, 2011.
As of December 31, 2009, there were 221,286 of these units outstanding, with a current market value of approximately $12 million.
A summary of all nonvested, cash-payable restricted share unit activity follows:


Fair Value of Financial Instruments—The carrying values of the Company’s financial instruments, with the exception of long-term obligations, including current portion, reasonably approximate the related fair values as of December 31, 2006 and 2005.
As of December 31, 2006, the carrying amount and fair value of long-term obligations, including current portion, were $3.5 billion and $4.1 billion, respectively.
As of December 31, 2005, the carrying amount and fair value of long-term obligations, including current portion, were $3.6 billion and


impact of wrong-way risk, which is broadly defined as the potential for increased correlation between the Firm’s exposure to a counterparty (AVG) and the counterparty’s credit quality.
Many factors may influence the nature and magnitude of these correlations over time.
To the extent that these correlations are identified, the Firm may adjust the CVA associated with that counterparty’s AVG.
The Firm risk manages exposure to changes in CVA by entering into credit derivative transactions, as well as interest rate, foreign exchange, equity and commodity derivative transactions.
The accompanying graph shows exposure profiles to the Firm’s current derivatives portfolio over the next 10 years as calculated by the Peak, DRE and AVG metrics.
The three measures generally show that exposure will decline after the first year, if no new trades are added to the portfolio.
Exposure profile of derivatives measures December 31, 2017 (in billions)


* Includes warranty liabilities assumed in connection with acquisitions, foreign exchange translation adjustments and reclassifications.
O.
EQUITY COMPENSATION PLANS Equity Compensation Overview We have various equity compensation plans for employees, as well as for non-employee members of the board of directors.
These include the General Dynamics Corporation 2009 Equity Compensation Plan (Equity Compensation Plan) and the 2009 General Dynamics United Kingdom Share Save Plan (U. K.  Plan).
The purpose of the Equity Compensation Plan is to provide an effective means of attracting, retaining and motivating directors, officers and key employees, and to provide them with incentives to enhance our growth and profitability.
Under the Equity Compensation Plan, awards may be granted to officers, employees or non-employee directors in common stock, options to purchase common stock, restricted shares of common stock, participation units or any combination of these.
Stock options may be granted either as incentive stock options, intended to qualify for capital gain treatment under Section 422 of the Internal Revenue Code (the Code), or as options not qualified under the Code.
All options granted under the Equity Compensation Plan are issued with an exercise price at the fair market value of the common stock on the date of grant.
Awards of stock options vest over two years, with 50 percent of the options vesting in one year and the remaining 50 percent vesting the following year.
Stock options that have been awarded under the Equity Compensation Plan expire five years after the grant date.
We grant stock options to participants in the Equity Compensation Plan on the first Wednesday of March based on the average of the high and low stock prices on that day as listed on the New York Stock Exchange.
Grants of restricted stock are awards of shares of common stock that are released approximately four years after the grant date.
During that restriction period, recipients may not sell, transfer, pledge, assign or otherwise convey their restricted shares to another party.
However, during the restriction period, the recipient is entitled to vote the restricted shares and to retain cash dividends paid on those shares.
Participation units represent obligations that have a value derived from or related to the value of our common stock.
These include stock appreciation rights, phantom stock units, and restricted stock units and are payable in cash and/or common stock.
Under the U. K.  Plan, our employees located in the United Kingdom may invest designated amounts in a savings account to be used to purchase a specified number of shares of common stock, based on option grants that the employee may receive, at an exercise price of not less than 80 percent of the fair market value of the common stock.
The options may be exercised three, five or seven years after the date of grant, depending on the terms of the specific award.
We issue common stock under our equity compensation plans from treasury stock.
On December 31, 2009, in addition to the shares reserved for issuance upon the exercise of outstanding options, approximately 32 million shares have been authorized for options and restricted stock that may be granted in the future.
Stock-based Compensation Expense The following table details the components of stock-based compensation expense recognized in net earnings in each of the past three years:


Investment Valuation.
Our fixed income investments are classified for accounting purposes as available for sale and are carried at market value or fair value in our consolidated balance sheets.
Our equity securities are all carried at fair value, as of January 1, 2018, due to the adoption of ASU 2016-01.
Most securities we own are traded on national exchanges where market values are readily available.
Some of our commercial mortgage-backed securities (CMBS) are valued using cash flow models and risk-adjusted discount rates.
We hold some privately placed securities, less than 2.9% of the portfolio, that are either valued by brokers or investment advisors.
In most instances, values provided by an investment advisor are supported with opinions from qualified independent third parties.
In limited circumstances when broker or investment advisor prices are not available for a private placement, we will value the securities using comparable market information.
At December 31, 2018 and 2017, our investment portfolio included $1,427.8 million and $1,074.6 million, respectively, of limited partnership investments whose values are reported pursuant to the equity method of accounting.
We carry these investments at values provided by the managements of the limited partnerships and due to inherent reporting lags, the carrying values are based on values with as of dates from one month to one quarter prior to our financial statement date.
At December 31, 2018, we had net unrealized losses, net of tax, of $179.4 million compared to unrealized gains, net of tax, of $50.0 million at December 31, 2017.
Gains and losses from market fluctuations for investments held at market value are reflected as comprehensive income (loss) in the consolidated balance sheets.
Gains and losses from market fluctuations for investments held at fair value are reflected as net realized capital gains and losses in the consolidated statements of operations and comprehensive income (loss).
Market value declines for the fixed income portfolio, which are considered credit other-thantemporary impairments, are reflected in our consolidated statements of operations and comprehensive income (loss), as realized capital losses.
We consider many factors when determining whether a market value decline is other-than-temporary, including: (1) we have no intent to sell and, more likely than not, will not be required to sell prior to recovery, (2) the length of time the market value has been below book value, (3) the credit strength of the issuer, (4) the issuers market sector, (5) the length of time to maturity and (6) for asset-backed securities, changes in prepayments, credit enhancements and underlying default rates.
If managements assessments change in the future, we may ultimately record a realized loss after management originally concluded that the decline in value was temporary.
See also ITEM 8, Financial Statements and Supplementary Data - Note 1 of Notes to the Consolidated Financial Statements.


| Moody's Standard & Poor's A.M. Best | The Allstate Corporation (senior long-term debt) | The Allstate Corporation (commercial paper) | AIC (insurance financial strength) | Allstate Life Insurance Company (insurance financial strength) | ($ in millions) | Other commitments—conditional | Other commitments—unconditional | Total commitments |


| Year Ended December 31, | (in millions, except share and per-share data) | Numerator (basic and diluted): | Net income | Less: Preferred stock dividends | Net income available to common stockholders | Denominator: | Weighted-average common shares outstanding - basic | Dilutive common shares: share-based awards | Weighted-average common shares outstanding - diluted | Earnings per common share: | Basic | Diluted |


Investment Management Fees Investment management fees are generally calculated under contractual arrangements with our SIPs and the products for which we provide sub-advisory services as a percentage of the market value of AUM.
Annual rates vary by investment objective and type of services provided.
Rates for products sold outside of the U. S.  are generally higher than for U. S.  products because they are structured to compensate for certain distribution costs.
Investment management fees decreased $112.5 million in fiscal year 2017 primarily due to a 2% decrease in average AUM and the impact of a lower effective fee rate, partially offset by higher performance fees.
Investment management fees decreased $856.1 million in fiscal year 2016 primarily due to a 14% decrease in average AUM and the impact of a lower effective fee rate.
The decrease in average AUM in fiscal year 2017 occurred primarily in the global/international fixed income investment objective, and across all sales regions except Asia-Pacific.
The decrease in average AUM in fiscal year 2016 occurred in all sales regions and primarily in the global/international and multi-asset/balanced investment objectives.
Our effective investment management fee rate (investment management fees divided by average AUM) was 59.2, 59.7 and 61.3 basis points for fiscal years 2017, 2016 and 2015.
The rate decrease in fiscal year 2017 was primarily due to higher weightings of AUM in lower fee products in the global/international fixed income investment objective in the Europe, Middle East and Africa and Asia-Pacific sales regions, partially offset by higher performance fees.
The rate decrease in fiscal year 2016 was primarily due to higher weightings of AUM in U. S.  products and in lower fee products in global/international investment objectives in the Europe, Middle East and Africa and Asia-Pacific sales regions, partially offset by higher performance fees.
Performance-based investment management fees were $35.5 million, $26.5 million and $19.8 million for fiscal years 2017, 2016 and 2015.
The increases in fiscal years 2017 and 2016 were primarily due to performance fees earned from separately-managed accounts.


| (in millions) Total Level 1 Level 2 Level 3 | Securities available for sale: | Mortgage-backed securities | State and political subdivisions | Equity securities | U.S. Treasury | Total securities available for sale | Loans held for sale, at fair value: | Residential loans held for sale | Commercial loans held for sale | Total loans held for sale, at fair value | Derivative assets: | Interest rate swaps | Foreign exchange contracts | Other contracts | Total derivative assets | Other investment securities, at fair value: | Money market mutual fund | Other investments | Total other investment securities, at fair value | Total assets | Derivative liabilities: | Interest rate swaps | Foreign exchange contracts | Other contracts | Total derivative liabilities | Total liabilities |


Proportional Free Cash Flow (a non-GAAP measure) We define proportional free cash flow as cash flows from operating activities less maintenance capital expenditures (including non-recoverable environmental capital expenditures), adjusted for the estimated impact of noncontrolling interests.
The proportionate share of cash flows and related adjustments attributable to noncontrolling interests in our subsidiaries comprise the proportional adjustment factor presented in the reconciliation below.
Upon the Company's adoption of the accounting guidance for service concession arrangements effective January 1, 2015, capital expenditures related to service concession assets that would have been classified as investing activities on the Consolidated Statement of Cash Flows are now classified as operating activities.
See Note 1General and Summary of Significant Accounting Policies of this Form 10-K for further information on the adoption of this guidance.
Beginning in the quarter ended March 31, 2015, the Company changed the definition of Proportional Free Cash Flow to exclude the cash flows for capital expenditures related to service concession assets that are now classified within net cash provided by operating activities on the Consolidated Statement of Cash Flows.
The proportional adjustment factor for these capital expenditures is presented in the reconciliation below.
We also exclude environmental capital expenditures that are expected to be recovered through regulatory, contractual or other mechanisms.
An example of recoverable environmental capital expenditures is IPL's investment in MATS-related environmental upgrades that are recovered through a tracker.
See Item 1.
US SBUIPLEnvironmental Matters for details of these investments.
The GAAP measure most comparable to proportional free cash flow is cash flows from operating activities.
We believe that proportional free cash flow better reflects the underlying business performance of the Company, as it measures the cash generated by the business, after the funding of maintenance capital expenditures, that may be available for investing or repaying debt or other purposes.
Factors in this determination include the impact of noncontrolling interests, where AES consolidates the results of a subsidiary that is not wholly-owned by the Company.
The presentation of free cash flow has material limitations.
Proportional free cash flow should not be construed as an alternative to cash from operating activities, which is determined in accordance with GAAP.
Proportional free cash flow does not represent our cash flow available for discretionary payments because it excludes certain payments that are required or to which we have committed, such as debt service requirements and dividend payments.
Our definition of proportional free cash flow may not be comparable to similarly titled measures presented by other companies.


| 2017 2016 2015 2014 | $111,667 |


E.  GOODWILL AND INTANGIBLE ASSETS Goodwill Activity - There was no change in the carrying amounts of goodwill during 2007.
The following table reflects the changes in the carrying amount of goodwill for the period indicated.


| 2006 2007 2008 2009 2010 | Masco | S&P 500 Index | S&P Industrials Index | S&P Consumer Durables & Apparel Index |


| As of December | $ in millions | Balance, beginning of year | 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 | Acquisitions/(dispositions) | Exchange rate fluctuations | Balance, end of year | Related deferred income tax asset1 | Net unrecognized tax benefit2 | Jurisdiction | U.S. Federal | New York State and City | United Kingdom | Japan | Hong Kong | Korea |


| November 6, 2015 | Cash and cash equivalents | Receivables | Inventories | Deferred income taxes, current | Other current assets | Property, plant and equipment | Goodwill | Intangible assets: | Customer programs | Trademarks | Other noncurrent assets | Deferred income taxes, noncurrent | Total identifiable assets and goodwill | Accounts payable | Customer advances and amounts in excess of costs incurred | Salaries, benefits, and payroll taxes | Current portion of long-term debt | Other current liabilities | Long-term debt | Customer contractual obligations(a) | Other noncurrent liabilities | Deferred income tax liabilities, noncurrent(a) | Total liabilities assumed | Total consideration |


| (in millions) | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total-1 |


| Year Ended December 31, | 2003 | Other Financial Data: | Net cash provided by operating activities | Net cash used in investing activities | Net cash provided by financing activities | Capital expenditures(b) | Depreciation and amortization | EBITDA(c) | Balance Sheet Data: | Total assets | Working capital | Long-term obligations, including current portion | Stockholders' equity |


2009 Disposition In March 2009, the Company sold Cova Corporation (“Cova”), the parent company of Texas Life Insurance Company (“Texas Life”) to a third-party for $130 million in cash consideration, excluding $1 million of transaction costs.
The net assets sold were $101 million, resulting in a gain on disposal of $28 million, net of income tax.
The Company also reclassified $4 million, net of income tax, of the 2009 operations of Texas Life into discontinued operations in the consolidated financial statements.
As a result, the Company recognized income from discontinued operations of $32 million, net of income tax, during the year ended December 31, 2009.
See Note 23.


| Year Ended December | $ in millions | Total other financial assets | Beginning balance | Net unrealized gains/(losses) | Purchases | Settlements | Ending balance | Total other financial liabilities | Beginning balance | Net realized gains/(losses) | Net unrealized gains/(losses) | Purchases | Sales | Issuances | Settlements | Transfers into level 3 | Transfers out of level 3 | Ending balance |


| December 31, 2017 2016 2015 | Balance at January 1 | Additions for current year tax positions | Additions for tax positions of prior years | Reductions for tax positions of prior years | Effects of foreign currency translation | Settlements | Lapse of statute of limitations | Balance at December 31 |


| Homes Closed and Home Sales Revenue Fiscal Year Ended September 30, | Homes Closed | 2013 | East | Midwest | Southeast | South Central | Southwest | West | 24,155 |


| (in millions) 2006 2005 2004 | Revenues(a): | Aircraft Leasing(b) | Capital Markets(c)(d) | Consumer Finance(e) | Other | Total | Operating income (loss)(a): | Aircraft Leasing | Capital Markets(d) | Consumer Finance(f) | Other, includingintercompany adjustments(g) | Total | Life Insurance & | General | (in millions) | 2006 | Fixed maturities: | Bonds available for sale, at fair value | Bonds held to maturity, at amortized cost | Bond trading securities, at fair value | Equity securities: | Common stocks available for sale, at fair value | Common stocks trading, at fair value | Preferred stocks available for sale, at fair value | Mortgage and other loans receivable, net of allowance | Financial services assets: | Flight equipment primarily under operating leases, net of accumulated depreciation | Securities available for sale, at fair value | Trading securities, at fair value | Spot commodities | Unrealized gain on swaps, options and forward transactions | Trade receivables | Securities purchased under agreements to resell, at contract value | Finance receivables, net of allowance | Securities lending invested collateral, at fair value | Other invested assets | Short-term investments, at cost | Total investments and financial services assets as shown on the balance sheet | Cash | Investment income due and accrued | Real estate, net of accumulated depreciation | Total invested assets(a)(b) | General   Insurance | (In millions) | At December 31, 2008 | Fixed maturity securities: | Bonds available for sale, at fair value | Bond trading securities, at fair value | Securities lending invested collateral, at fair value |


N/A Not Applicable.
(1) Excludes incentive income which is impacted by market and fund performance during the period and cannot be readily estimated.
(2) Market impact on DAC and DSIC amortization resulting from lower projected profits.
(3) In estimating the impact on DAC and DSIC amortization resulting from lower projected profits, we have not changed our assumed equity asset growth rates.
This is a significantly more conservative estimate than if we assumed management follows its mean reversion guideline and increased near-term rates to recover the drop in equity values over a five-year period.
We make this same conservative assumption in estimating the impact from GMDB and GMIB riders.


| Change | Fiscal Year | 2012 | United States | Rest of North and South America | Europe | Japan | China | Rest of Asia | Total Revenue |


| Fiscal 2009 Fiscal 2008 FY09 vs. FY08 % Change Fiscal 2007 FY08 vs. FY07 % Change | (In millions) | Revenues | Footwear | Apparel | Equipment | Total Revenues | Pre-tax Income |


NOTE 10.
RESTRUCTURING Fiscal 2011 Restructuring Plan In the fourth quarter of fiscal 2011, we initiated a restructuring plan consisting of reductions in workforce and the consolidation of facilities in order to better align our resources around our Digital Media and Digital Marketing strategies.
During fiscal 2013, we continued to implement restructuring activities under this plan.
Total costs incurred to date and expected to be incurred for closing redundant facilities are $12.2 million as all facilities under this plan have been exited as of November 29, 2013.
Other Restructuring Plans Other restructuring plans include other Adobe plans and other plans associated with certain of our acquisitions that are substantially complete.
We continue to make cash outlays to settle obligations under these plans, however the current impact to our Consolidated Financial Statements is not significant.
Our other restructuring plans primarily consist of the 2009 Restructuring Plan, which was implemented in the fourth quarter of fiscal 2009, in order to appropriately align our costs in connection with our fiscal 2010 operating plan.
Performance Share Unit awards granted under the 2010 Employee Plan will vest 100% after three years.
The Performance Share Unit awards represent the right to receive between and 0 and 1.75 shares of stock for each unit awarded depending upon performance in relation to certain metrics.
The performance share unit valuation will be based 50% on growth in book value per share over the three year vesting period, compared to designated peer companies.
The remaining 50% of the performance share valuation will be based upon operating return on equity for each of the separate operating years within the vesting period.
For share options, restricted shares and performance share units granted under the 2010 Employee Plan, the 2002 Employee Plan, the 2009 Director Plan and the 2003 Director Plan, share-based compensation expense recognized in the consolidated statements of operations and comprehensive income (loss) was $32,369 thousand, $30,297 thousand and $26,398 thousand for the years ended December 31, 2018, 2017 and 2016, respectively.
The corresponding income tax benefit recorded in the consolidated statements of operations and comprehensive income (loss) for share-based compensation was $7,401 thousand, $14,824 thousand and $6,898 thousand for the years ended December 31, 2018, 2017 and 2016, respectively.
In accordance with ASU 2016-09, the income tax effect resulting from the change in the value of share based compensation awards between grant date and settlement date has been recorded as part of the income tax benefit in the consolidation statements of operations and comprehensive income (loss) effective January 1, 2017.
Prior to that date, the income tax impact of the change in value of share based compensation awards between grant date and settlement date was recorded within additional paid in capital in the Consolidated Balance Sheets.
For the year ended December 31, 2018, a total of 173,065 restricted shares were granted on February 21, 2018, May 15, 2018, September 13, 2018, and November 13, 2018, with a fair value of $242.39, $226.95, $218.065 and $215.2175 per share, respectively.
Additionally, 13,325 performance share units were awarded on February 21, 2018, with a fair value of $242.39 per unit.
No share options were granted during the year ended December 31, 2018.
For share options granted during previous years, the fair value per option was calculated on the date of the grant using the Black-Scholes option valuation model.
The Company recognizes, as an increase to additional paid-in capital, a realized income tax benefit from dividends, charged to retained earnings and paid to employees on equity classified non-vested equity shares.
In addition, the amount recognized in additional paid-in capital for the realized income tax benefit from dividends on those awards is included in the pool of excess tax benefits available to absorb tax deficiencies on share-based payment awards.
For the years ended December 31, 2018, 2017 and 2016, the Company recognized $403 thousand, $626 thousand and $597 thousand, respectively, of additional paid-in capital due to tax benefits from dividends on restricted shares.


| Payments due by Period (in thousands) | Contractual Obligations | Long-term debt -1 | Lines of credit -2 | Share of debt of unconsolidated joint ventures -3 | Ground leases | Operating leases | Development and construction backlog costs -4 | Other | Total Contractual Obligations |


| December 31 2005 2004 | (In millions) | Short-term investments available-for-sale: | Commercial paper | U.S. Treasury securities | Money market funds | Other | Total short-term investments available-for-sale | Short-term investments trading: | Commercial paper | U.S. Treasury securities | Money market funds | Other | Total short-term investments trading | Total short-term investments |


| 2006 2005 2004 2003 2002 | (In thousands) | Net income | Depreciation and amortization | Interest expense | Other interest income | EBITDA | Gain on sale of real estate | Loss on abandoned developmentsheld for sale | Adjusted EBITDA |


See Note 4 to the financial statements for a description of the money pool.
Entergy Texas has a credit facility in the amount of $100 million scheduled to expire in August 2012.
As of December 31, 2008, $100 million was outstanding on the credit facility.
In February 2009, Entergy Texas repaid its credit facility with the proceeds from the bond issuance discussed below.
On June 2, 2008 and December 8, 2008, under the terms of the debt assumption agreement between Entergy Texas and Entergy Gulf States Louisiana that is discussed in Note 5 to the financial statements, Entergy Texas paid at maturity $148.8 million and $160.3 million, respectively, of Entergy Gulf States Louisiana first mortgage bonds, which results in a corresponding decrease in Entergy Texas' debt assumption liability.
In December 2008, Entergy Texas borrowed $160 million from its parent company, Entergy Corporation, under a $300 million revolving credit facility pursuant to an Inter-Company Credit Agreement between Entergy Corporation and Entergy Texas.
This borrowing would have matured on December 3, 2013.
Entergy Texas used these borrowings, together with other available corporate funds, to pay at maturity the portion of the $350 million Floating Rate series of First Mortgage Bonds due December 2008 that had been assumed by Entergy Texas, and that bond series is no longer outstanding.
In January 2009, Entergy Texas repaid its $160 million note payable to Entergy Corporation with the proceeds from the bond issuance discussed below.
In January 2009, Entergy Texas issued $500 million of 7.125% Series Mortgage Bonds due February 2019.
Entergy Texas used a portion of the proceeds to repay its $160 million note payable to Entergy Corporation, to repay the $100 million outstanding on its credit facility, and to repay short-term borrowings under the Entergy System money pool.
Entergy Texas intends to use the remaining proceeds to repay on or prior to maturity approximately $70 million of obligations that had been assumed by Entergy Texas under the debt assumption agreement with Entergy Gulf States Louisiana and for other general corporate purposes.


| Year Operating Lease Payment Sublease Income Capital Leases | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total minimum lease payments | Less amounts representing interest | Present value of capital lease obligations |


| Capital in Excess Accumulated Other Comprehensive Income/(Loss) | of Par | Capital | Stock | YEAR ENDED DECEMBER 31, 2003 | Balance at beginning of year | Comprehensive income/(loss) | Net income | Foreign currency translation | Net gain /(loss) on derivative instruments (net of tax of $430) | Minimum pension liability (net of tax of $1,208) | Net holding gain/(loss) (net of tax of $1) | Comprehensive income/(loss) | Common Stock issued for employee benefit plans and other | ESOP loan and treasury stock | Cash dividends | Balance at end of year | YEAR ENDED DECEMBER 31, 2004 | Balance at beginning of year | Comprehensive income/(loss) | Net income | Foreign currency translation | Net gain/(loss) on derivative instruments (net of tax of $98) | Minimum pension liability (net of tax of $255) | Net holding gain/(loss) (net of tax of $13) | Comprehensive income/(loss) | Common Stock issued for employee benefit plans and other | ESOP loan and Treasury stock | Cash dividends | Balance at end of year | YEAR ENDED DECEMBER 31, 2005 | Balance at beginning of year | Comprehensive income/(loss) | Net income | Foreign currency translation (Note 2) | Net gain/(loss) on derivative instruments (net of tax of $501) | Minimum pension liability (net of tax of $210) | Net holding gain/(loss) (net of tax of $29) | Comprehensive income/(loss) | Common Stock issued for employee benefit plans and other | ESOP loan and treasury stock | Cash dividends | Balance at end of year | (in millions) | Balance as of December 31, 2016 | Purchases | Distributions | Gain (loss) | Balance as of December 31, 2017 |


| December 31, | (In thousands) | Finished goods | Raw materials | Total inventories | 2007 | Weyerhaeuser | Real Estate and Related Assets | $119 |


| For the Years Ended | (In thousands) | Cash flows from operating activities (GAAP) | Capital purchases | Capitalized software development costs | Free cash flow (non-GAAP) |


| Fair Value Average Fair Value | (Dollars in millions) | 2003: | FOREIGN EXCHANGE CONTRACTS: | Contracts in a receivable position | Contracts in a payable position | OTHER FINANCIAL INSTRUMENT CONTRACTS: | Contracts in a receivable position | Contracts in a payable position | 2002: | FOREIGN EXCHANGE CONTRACTS: | Contracts in a receivable position | Contracts in a payable position | OTHER FINANCIAL INSTRUMENT CONTRACTS: | Contracts in a receivable position | Contracts in a payable position | Under 1 Year | (Dollars in millions) | Available for sale-2: | U.S. Treasury and federal agencies: | Direct obligations | Mortgage-backed securities | Asset-backed securities | Collateralized mortgage obligations | State and political subdivisions-1 | Other investments | Total | Held to maturity-2: | U.S. Treasury and federal agencies: | Direct obligations | Mortgage-backed securities | Collateralized mortgage obligations | Other investments | Total |


| For the years ended December 31, | (Before-tax) | Fixed maturities | Equity securities, AFS | Mortgage loans | Policy loans | Limited partnerships and other alternative investments | Other investments | Investment expenses | Total securities AFS and other | Equity securities, trading | Total net investment income (loss) | Ratios and Supplemental Data | Loss and loss adjustment expense ratio | Current accident year before catastrophes | Current accident year catastrophes | Prior accident years | Total loss and loss adjustment expense ratio | Expense ratio | Combined ratio | Catastrophe ratio | Current accident year | Prior accident years | Total catastrophe ratio | Combined ratio before catastrophes | Combined ratio before catastrophes and prior accident years development | Other revenues [1] |


| As of December 31, | 2018 | Projected benefit obligation | Accumulated benefit obligation | Fair value of plan assets |


| Utility Gross Margin 2018 Change 2017 Change 2016 | Retail revenues | Residential | Commercial | Industrial | Other retail revenues | Total electric retail | Wholesale revenues | Transmission revenues | Other revenues | Operating revenues | Fuel and purchased power | SPP network transmission costs | Utility gross margin(a) | MWh Sales | Retail MWh Sales | Residential | Commercial | Industrial | Other retail revenues | Total electric retail | Wholesale revenues | Operating revenues |


We have some multiple element arrangements that include software. ?
?We recognize the elements for which we have established vendor specific objective evidence at fair value upon delivery, in accordance with the applicable guidance.
We record revenue on a net basis for those sales in which we have in substance acted as an agent or broker in the transaction.
The debt collections and recovery management revenue is calculated as a percentage of debt collected on behalf of the customer and, as such, is primarily recognized when the cash is collected assuming all other revenue recognition criteria are met.
Deferred revenue consists of amounts billed in excess of revenue recognized on sales of our information services relating generally to the deferral of subscription fees and arrangement consideration from elements not meeting the criteria for having stand-alone value discussed above.
Deferred revenues are subsequently recognized as revenue in accordance with our revenue recognition policies.
Cost of Services. ?
?Cost of services consist primarily of (1) data acquisition and royalty fees; (2) customer service costs, which include: personnel costs to collect, maintain and update our proprietary databases, to develop and maintain software application platforms and to provide consumer and customer call center support; (3) hardware and software expense associated with transaction processing systems; (4) telecommunication and computer network expense; and (5) occupancy costs associated with facilities where these functions are performed by Equifax employees.
Selling, General and Administrative Expenses. ?
?Selling, general and administrative expenses consist primarily of personnel-related costs, restructuring costs, corporate costs, fees for professional and consulting services, advertising costs, and other costs of administration.
Advertising. ?
?Advertising costs from continuing operations, which are expensed as incurred, totaled $65.1 million, $57.1 million and $57.5 million during 2015, 2014 and 2013, respectively.
Stock-Based Compensation. ?
?We recognize the cost of stock-based payment transactions in the financial statements over the period services are rendered according to the fair value of the stock-based awards issued.
All of our stock-based awards, which are stock options and nonvested stock, are classified as equity instruments.
Income Taxes. ?
?We account for income taxes under the liability method.
Deferred income tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement and tax bases of assets and liabilities, as measured by current enacted tax rates.
We assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred tax assets.
We record a valuation allowance, as necessary, to reduce our deferred tax assets to the amount of future tax benefit that we estimate is more likely than not to be realized.
We record tax benefits for positions that we believe are more likely than not of being sustained under audit examinations.
We assess the potential outcome of such examinations to determine the adequacy of our income tax accruals.
We recognize interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes on our Consolidated Statements of Income.
We adjust our income tax provision during the period in which we determine that the actual results of the examinations may differ from our estimates or when statutory terms expire.
Changes in tax laws and rates are reflected in our income tax provision in the period in which they occur.


| Conversion Feature Warrant | December 11, 2007 | Stock price | Exercise Price | Risk-free interest rate | Expected option life (years) | Expected volatility | In millions of dollars | Allowance for loan losses at beginning of year | Gross credit losses | Gross recoveries | Net credit (losses) recoveries (NCLs) | NCLs | Net reserve builds (releases) | Net specific reserve builds (releases) | Total provision for credit losses | Other, net-2 | Allowance for loan losses at end of year | Allowance for credit losses on unfunded lending commitments at beginning of year-3 | Provision for unfunded lending commitments | Allowance for credit losses on unfunded lending commitments at end of year-3 | Total allowance for loans, leases, and unfunded lending commitments | In millions of dollars | Commissions and fees | Administration and other fiduciary fees | Investment banking | Principal transactions | Other | Total non-interest revenue | Net interest revenue (including dividends) | Total revenues, net of interest expense | Total operating expenses | Net credit losses | Provision for unfunded lending commitments | Credit reservebuild | Provision for benefits and claims | Provisions for loan losses and benefits and claims | Income from continuing operations before taxes | Income taxes | Income from continuing operations | Net income attributable to noncontrolling interests | Net income | Average assets(in billions of dollars) | Return on assets | Revenues by region | North America | EMEA | Latin America | Asia | Total | Income from continuing operations by region | North America | EMEA | Latin America | Asia | Total | Average loans by region(in billions of dollars) | North America | EMEA | Latin America | Asia | Total |


| December 31, 2017 | (in millions) | Commercial | Commercial real estate | Leases | Total commercial loans and leases | Residential mortgages | Home equity loans | Home equity lines of credit | Home equity loans serviced by others | Home equity lines of credit serviced by others | Automobile | Education | Credit cards | Other retail | Total retail loans | Total loans and leases | Loans and leases due after one year at fixed interest rates | Loans and leases due after one year at variable interest rates |


Cash Flow from Operating Activities Our operating cash flows in 2004 were significantly impacted by the timing of the Medicare Advantage premium remittance which is payable to us on the first day of each month.
When the first day of a month falls on a weekend or holiday, we have historically received this payment at the end of the previous month.
As such, the Medicare Advantage receipts for January 2004 of $211.9 million and January 2003 of $205.8 million were received in December 2003 and December 2002, respectively, because January 1 is a holiday.
This timing accounts for a significant portion of the unearned revenues balance on our consolidated balance sheet at December 31, 2003.
Beginning in 2005, the monthly premium payment schedule includes a change in timing from previous practice.
As a result of this change, the January 2005 payment of $290.3 million originally scheduled to be received on Friday, December 31, 2004, was changed to Monday, January 3, 2005, or one business day later.
Therefore, we received only 11 monthly Medicare Advantage premium remittances during 2004 versus 12 monthly premium remittances during 2003.
Other than the impact from the timing of the Medicare Advantage premium receipts, the increase in net income and cash generated from changes in working capital increased our operating cash flow in 2004 compared to 2003.
The most significant drivers of changes in our working capital are typically the timing of receipts for premiums and administrative services fees and payments of medical expenses.
We illustrate these changes with the following summary of receivables and medical and other expenses payable.
The detail of total net receivables was as follows at December 31, 2004, 2003 and 2002:


| Millions of kWh Delivered Revenues in Millions (a) | For the Years Ended | Description | Residential/Religious (b) | Commercial/Industrial | Retail choice customers | NYPA, Municipal Agency and other sales | Other operating revenues (c) | Total |


| Weighted Average Rate (a) Amount | 2005 | Automotive Sector | Debt payable within one year | Short-term | Long-term payable within one year | Senior indebtedness | Total debt payable within one year | Long-term debt | Senior indebtedness | Notes and bank debt | Unamortized discount | Total senior indebtedness | Subordinated indebtedness | Total long-term debt | Total debt | Fair value (b) | Financial Services Sector | Short-term debt | Asset-backed commercial paper (c) | Commercial paper | Other short-term | Total short-term debt | Long-term debt | Senior indebtedness | Notes payable within one year | Notes payable after one year | Unamortized discount | Asset-backed debt (d) | Notes payable within one year | Notes payable after one year | Total long-term debt | `Total debt | Fair value (b) |


| As of or for the year ended (e)> | December 31, | (in millions, except ratios) | Consumer real estate | Home finance– home equity and other(a) | Home finance– mortgage | Total Home finance(a) | Auto & education finance | Consumer & small business and other | Credit cardreceivables – reported(b) | Totalconsumer loans – reported | Credit card securitizations(b)(c) | Totalconsumer loans – managed(b) | Assets acquired in loan satisfactions | Total consumer relatedassets – managed | Consumer lending-related commitments: | Home finance | Auto & education finance | Consumer & small business and other | Credit cards | Total lending-related commitments | Total consumer credit portfolio |


| Cost Gross Unrealized Losses Estimated Fair Market Value | (in thousands) | Due in one year or less | Due after one through five years | Total |


The overall increase in employee-related costs was primarily driven by increased pension expense.
The increase in pension expense for the year ended December 31, 2011 was primarily due to increased contributions in certain of our regulated operating companies whose costs and revenue requirements are based on the actual cash contributions to our pension trust account.
This increase was partially offset by lower salaries and wages and group insurance expenses.
The decrease in salaries and wages for the year ended December 31, 2011 compared to the same period in the prior year was driven by vacant positions and lower severance expenses, partially offset by increased incentive costs and annual wage increases.
Group insurance decreased mainly due to lower postretirement benefits other than pension as the result of changes to the design of our medical plan, and vacant positions as compared to the same period in the prior year.


| Fiscal year ended -5 | (dollars in millions) | Other financial data: | Depreciation and amortization | Capital expenditures | Same store sales growth -2 : | Domestic Company-owned stores | Domestic franchise stores | Domestic stores | International stores | Store counts (at end of period): | Domestic Company-owned stores | Domestic franchise stores | Domestic stores | International stores | Total stores |


and the derivatives hedging these benefits, as well as the changes in fair value of derivatives hedging GMDB provisions.
Benefits, claims, losses and settlement expenses also include amortization of DSIC.
Amortization of DAC Direct sales commissions and other costs capitalized as DAC are amortized over time.
For annuity and UL contracts, DAC are amortized based on projections of estimated gross profits over amortization periods equal to the approximate life of the business.
For other insurance products, DAC are generally amortized as a percentage of premiums over amortization periods equal to the premium-paying period.
For certain mutual fund products, DAC are generally amortized over fixed periods on a straight-line basis adjusted for redemptions.
See ‘‘Deferred Acquisition Costs and Deferred Sales Inducement Costs’’ under ‘‘Critical Accounting Policies’’ for further information on DAC.
Interest and Debt Expense Interest and debt expense primarily includes interest on corporate debt and debt of CIEs, the impact of interest rate hedging activities and amortization of debt issuance costs.
General and Administrative Expense General and administrative expense includes compensation, share-based awards and other benefits for employees (other than employees directly related to distribution, including financial advisors), integration costs, professional and consultant fees, information technology, facilities and equipment, advertising and promotion, legal and regulatory and corporate related expenses.
Assets Under Management and Administration Assets under management (‘‘AUM’’) include external client assets for which we provide investment management services, such as the assets of the Columbia funds and Threadneedle funds, assets of institutional clients and assets of clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisers selected by us.
AUM also includes certain assets on our Consolidated Balance Sheets for which we provide investment management services and recognize management fees in our Asset Management segment, such as the assets of the general account and the variable product funds held in the separate accounts of our life insurance subsidiaries and client assets of CIEs.
These assets do not include assets under advisement, for which we provide model portfolios but do not have full discretionary investment authority.
Corporate & Other AUM primarily includes former bank assets that are managed within our Corporate & Other segment.
Assets under administration (‘‘AUA’’) include assets for which we provide administrative services such as client assets invested in other companies’ products that we offer outside of our wrap accounts.
These assets include those held in clients’ brokerage accounts.
We generally record revenues received from administered assets as distribution fees.
We do not exercise management discretion over these assets and do not earn a management fee.
These assets are not reported on our Consolidated Balance Sheets.
AUA also includes certain assets on our Consolidated Balance Sheets for which we do not provide investment management services and do not recognize management fees, such as investments in non-affiliated funds held in the separate accounts of our life insurance subsidiaries.
These assets do not include assets under advisement, for which we provide model portfolios but do not have full discretionary investment authority.


| (Dollars in millions) 2011 2010 2009 2008 2007 | Allowance for loan and lease losses, January 1-1 | Loans and leases charged off | Residential mortgage | Home equity | Discontinued real estate | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer | Other consumer | Total consumer charge-offs | U.S. commercial-2 | Commercial real estate | Commercial lease financing | Non-U.S. commercial | Total commercial charge-offs | Total loans and leases charged off | Recoveries of loans and leases previously charged off | Residential mortgage | Home equity | Discontinued real estate | U.S. credit card | Non-U.S. credit card | Direct/Indirect consumer | Other consumer | Total consumer recoveries | U.S. commercial-3 | Commercial real estate | Commercial lease financing | Non-U.S. commercial | Total commercial recoveries | Total recoveries of loans and leases previously charged off | Net charge-offs | Provision for loan and lease losses | Other-4 | Allowance for loan and lease losses, December 31 | Reserve for unfunded lending commitments, January 1 | Provision for unfunded lending commitments | Other-5 | Reserve for unfunded lending commitments, December 31 | Allowance for credit losses, December 31 |


Liquidity and Capital Resources Overview As a holding company, our cash flows are derived primarily from the operations of and distributions from our operating subsidiaries or funds raised through borrowings under our credit facilities and debt and equity offerings.
As of December 31, 2008, we had approximately $638.2 million of total liquidity, comprised of approximately $143.1 million in cash and cash equivalents and the ability to borrow approximately $495.1 million under our Revolving Credit Facility.
As of December 31, 2008, our cash and cash equivalents increased by $110.0 million as compared to December 31, 2007.
Summary cash flow information for the years ended December 31, 2008, 2007 and 2006 is set forth below.


| GAAP As adjusted | (Dollar amounts in millions) | Income before income taxes-1 | Income tax expense | Effective tax rate |


| Community Name Location Period of sale Apartment homes Debt Gross sales price Net proceeds | Avalon View | San Marino | Avalon West | Avalon at Stevens Pond | Avalon Grove-1 | Total of all 2007 asset sales | Total of all 2006 asset sales | Total of all 2005 asset sales |


| 2007 2006 | Vendor non-trade receivables | NAND flash memory prepayments | Other current assets | Total other current assets | April 30, | U.S. OFFICES: | Company-owned offices | Company-owned shared locations-1 | Total company-owned offices | Franchise offices | Franchise shared locations-1 | Total franchise offices | 12,923 | INTERNATIONAL OFFICES: | Canada | Australia | 1,571 |


| 2014 2013 2012 | Current: | U.S.: | Federal | State | Foreign | Total current | Deferred: | U.S.: | Federal | State | Foreign | Total deferred | Provision for income taxes |


| 2016 $126,488 | 2017 | 2018 | 2019 | 2020 | 2021 and thereafter | Total future minimum sponsorship and other payments | Years Ended December 31, | 2014 | Solid Waste: | Tier 1 | Tier 2 | Tier 3 | Solid Waste | Wheelabrator | Other | Intercompany | Total |


| Year Return Year Return | 2004 | 2003 | 2002 | 2001 | 2000 |


Fair Value of Financial Instruments Our debt is reflected on the balance sheet at cost.
Based on current market conditions, our interest rate margins are below the rate available in the market, which causes the fair value of our debt to fall below the carrying value.
The fair value of our term loans (see Note 6, “Long-Term Obligations”) is approximately $570 million at December 31, 2009, as compared to the carrying value of $596 million.
We estimated the fair value of our term loans by calculating the upfront cash payment a market participant would require to assume our obligations.
The upfront cash payment, excluding any issuance costs, is the amount that a market participant would be able to lend at December 31, 2009 to an entity with a credit rating similar to ours and achieve sufficient cash inflows to cover the scheduled cash outflows under our term loans.
The carrying amounts of our cash and equivalents, net trade receivables and accounts payable approximate fair value.
We apply the market approach to value our financial assets and liabilities, which include the cash surrender value of life insurance, deferred compensation liabilities and interest rate swaps.
The market approach utilizes available market information to estimate fair value.
Required fair value disclosures are included in Note 8, “Fair Value Measurements.


Table of Contents The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize custom components available from only one source.
When a component or product uses new technologies, initial capacity constraints may exist until the suppliers yields have matured or manufacturing capacity has increased.
If the Companys supply of components for a new or existing product were delayed or constrained, or if an outsourcing partner delayed shipments of completed products to the Company, the Companys financial condition and operating results could be materially adversely affected.
The Companys business and financial performance could also be materially adversely affected depending on the time required to obtain sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative source.
Continued availability of these components at acceptable prices, or at all, may be affected if those suppliers concentrated on the production of common components instead of components customized to meet the Companys requirements.
The Company has entered into agreements for the supply of many components; however, there can be no guarantee that the Company will be able to extend or renew these agreements on similar terms, or at all.
Therefore, the Company remains subject to significant risks of supply shortages and price increases that could materially adversely affect its financial condition and operating results.
Substantially all of the Companys hardware products are manufactured by outsourcing partners that are located primarily in Asia.
A significant concentration of this manufacturing is currently performed by a small number of outsourcing partners, often in single locations.
Certain of these outsourcing partners are the solesourced suppliers of components and manufacturers for many of the Companys products.
Although the Company works closely with its outsourcing partners on manufacturing schedules, the Companys operating results could be adversely affected if its outsourcing partners were unable to meet their production commitments.
The Companys purchase commitments typically cover its requirements for periods up to 150 days.


| As of and for the Year Ended December 31, | (dollars in millions) | Allowance for Loan and Lease Losses—Beginning: | Commercial | Commercial real estate | Leases | Qualitative-1 | Total commercial | Residential mortgages | Home equity loans | Home equity lines of credit | Home equity loans serviced by others-2 | Home equity lines of credit serviced by others-2 | Automobile | Student | Credit cards | Other retail | Qualitative-1 | Total retail | Unallocated | Total allowance for loan and lease losses—beginning |


CITI HOLDINGS Citi Holdings contains businesses and portfolios of assets that Citigroup has determined are not central to its core Citicorp business.
These noncore businesses tend to be more asset-intensive and reliant on wholesale funding and also may be product-driven rather than client-driven.
Citi intends to exit these businesses as quickly as practicable yet in an economically rational manner through business divestitures, portfolio run-off and asset sales.
Citi has made substantial progress divesting and exiting businesses from Citi Holdings, having completed 15 divestitures in 2009, including Smith Barney, Nikko Cordial Securities, Nikko Asset Management Financial Institution Credit Card business (FI) and Diners Club North America.
Citi Holdings’ assets have been reduced by nearly 40%, or $351 billion, from the peak level of $898 billion in the first quarter of 2008 to $547 billion at year-end 2009.
Citi Holdings’ assets represented less than 30% of Citi’s assets as of December 31, 2009.
Asset reductions from Citi Holdings have the combined benefits of further fortifying Citigroup’s capital base, lowering risk, simplifying the organization and allowing Citi to allocate capital to fund long-term strategic businesses.
Citi Holdings consists of the following businesses: Brokerage and Asset Management; Local Consumer Lending; and Special Asset Pool.
With Citi’s exit from the loss-sharing agreement with the U. S.  government in December 2009, the Company conducted a broad review of the Citi Holdings asset base to determine which assets are strategically important to Citicorp.
As a result of this analysis, approximately $61 billion of assets will be moved from Citi Holdings into Citicorp in the first quarter of 2010.
The assets consist primarily of approximately $34 billion of U. S.  mortgages that will be transferred to NA RCB, approximately $19 billion of commercial and corporate loans and securities related to core Citicorp clients, of which approximately $17 billion will be moved to S&B and the remainder to NA RCB, and approximately $5.0 billion of assets related to Citi’s Mexico asset management business that will be moved to LATAM RCB.


| Years Ended December 31, | (Dollars in millions) | Case reserves reported by ceding companies | Additional case reserves established by the Company (assumed reinsurance)(1) | Case reserves established by the Company (direct insurance) | Incurred but not reported reserves | Gross reserves | Reinsurance receivable | Net reserves | A.M. Best | Senior Notes | Trust Preferred Securities | Long Term Notes |


| As of December | $ in millions | Deposits | Collateralized financings: | Repurchase agreements | Securities loaned | Other secured financings | Total collateralized financings | Unsecured short-term borrowings | Unsecured long-term borrowings | Total shareholders’ equity | Total funding sources |


| Years Ended December 31, | 2009 | (In millions) | Investment return | Separate account balances | Net investment gain (loss) related | Expense | In-force/Persistency | Policyholder dividends and other | Total |


| Year Ended December 31, | 2003 | Statements of Income Data: | Revenue | Cost of goods sold | Gross Margin | Operating income | Other (income) expense | Interest, net | Other, net | Income before provision for income taxes | Provision for income taxes | Net income | Basic earnings per share | Diluted earnings per share | Shares used in per share calculation-basic(a) | Shares used in per share calculation-diluted(a) |


| December 31, | 2011 | (in millions) | Balance Sheet Data:-3 | Investments | Separate account assets | Total assets before consolidated investment entities | Future policy benefits and claims | Separate account liabilities | Customer deposits | Long-term debt | Short-term borrowings | Total liabilities before consolidated investment entities | Total Ameriprise Financial, Inc. shareholders' equity |


Other information required by Item 10 appearing under the caption Director Nominees and Continuing Directors and Section 16(a) Beneficial Ownership Reporting Compliance, of the companys proxy statement to be filed pursuant to Regulation 14A within 120 days after December 31, 2006, is incorporated herein by reference.
Item 11.
Executive Compensation The information required by Item 11 appearing under the caption Executive Compensation in the companys proxy statement, to be filed pursuant to Regulation 14A within 120 days after December 31, 2006, is incorporated herein by reference.
Additionally, the Ball Corporation 2000 Deferred Compensation Company Stock Plan, the Ball Corporation Deposit Share Program and the Ball Corporation Directors Deposit Share Program were created to encourage key executives and other participants to acquire a larger equity ownership interest in the company and to increase their interest in the companys stock performance.
Non-employee directors also participate in the 2000 Deferred Compensation Company Stock Plan.


Investing Activities 2011Cash used by investing activities was $197 million in 2011, consisting entirely of capital expenditures.2010Cash used by investing activities was $189 million in 2010, principally for capital expenditures.2009Cash used by investing activities was $178 million in 2009, due principally to $181 million in capital expenditures.


Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations  Diamond Offshore  (Continued) While dayrates Diamond Offshore receives for new contracts are no longer at the peak levels achieved at the height of the most recent up-cycle, improving oil prices, which had climbed to approximately $90 per barrel by the end of 2010, appear to be supporting demand for Diamond Offshores equipment.
As a result, dayrates for Diamond Offshores international floater rigs appear to have stabilized, though demand for its services has not risen sufficiently to provide significant pricing power on new contracts.
Additionally, the continuing regulatory uncertainty in the GOM could cause Diamond Offshore or others to move additional rigs out of the GOM to international locations.
If Diamond Offshore, or others, move a large number of additional rigs out of the GOM to international locations, the increased supply of available rigs entering the international market, coupled with un-contracted new-build rigs scheduled for delivery between now and the end of 2011, could create downward pressure on dayrates unless demand improves sufficiently to absorb the new supply.
Diamond Offshore currently has one high specification floater and two jack-up rigs contracted offshore Egypt with an aggregate net book value of $270 million, or approximately 6.0% of Diamond Offshores total operating assets at December 31, 2010.
Although these rigs have continued to work throughout the recent political unrest in Egypt, there have been, and in the future there may be other, disruptions to the support networks within Egypt, including the banking institutions.
At February 1, 2011, Diamond Offshores contract drilling backlog related to its drilling operations offshore Egypt was approximately $60 million, or 2.2% of its total contract backlog, for 2011.
Diamond Offshores customers may attempt to assert force majeure under the agreements under which these rigs are operating.
As of the date of this Report, Diamond Offshore has not received any force majeure assertions with respect to its Egyptian operations.
Since September 30, 2010 through the date of this Report, Diamond Offshore has entered into 17 new drilling contracts totaling approximately $457 million in backlog and ranging in duration from one well to one year.
As of February 1, 2011, Diamond Offshores contract backlog was approximately $6.6 billion, of which its contracts in the GOM (excluding amounts related to the contract for the Ocean Monarch discussed above) represented approximately $141 million, or 2.1%, of Diamond Offshores total contract backlog.
Contract Drilling Backlog The following table reflects Diamond Offshores contract drilling backlog as of February 1, 2011, October 18, 2010 (the date reported in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2010) and February 1, 2010 (the date reported in our Annual Report on Form 10-K for the year ended December 31, 2009).
Contract drilling backlog is calculated by multiplying the contracted operating dayrate by the firm contract period and adding one-half of any potential rig performance bonuses.
Diamond Offshores calculation also assumes full utilization of its drilling equipment for the contract period (excluding scheduled shipyard and survey days); however, the amount of actual revenue earned and the actual periods during which revenues are earned will be different than the amounts and periods shown in the tables below due to various factors.
Utilization rates, which generally approach 95.0%  98.0% during contracted periods, can be adversely impacted by downtime due to various operating factors including, but not limited to, weather conditions and unscheduled repairs and maintenance.
Contract drilling backlog excludes revenues for mobilization, demobilization, contract preparation and customer reimbursables.
No revenue is generally earned during periods of downtime for regulatory surveys.
Changes in Diamond Offshores contract drilling backlog between periods are a function of the performance of work on term contracts, as well as the extension or modification of existing term contracts and the execution of additional contracts.


| 1 st Quarter 2 nd Quarter 3 rd Quarter 4thQuarter | Ordinary Income | Long-term Capital Gain | Total |