| _id | dd4c30b66 |
| title |  |
| text | assumed health care cost trend rates for the u.s .
retiree health care benefit plan as of december 31 are as follows: .

a one percentage point increase or decrease in health care cost trend rates over all future periods would have increased or decreased the accumulated postretirement benefit obligation for the u.s .
retiree health care benefit plan as of december 31 , 2017 , by $ 1 million .
the service cost and interest cost components of 2017 plan expense would have increased or decreased by less than $ 1 million .
deferred compensation arrangements we have a deferred compensation plan that allows u.s .

employees whose base salary and management responsibility exceed a certain level to defer receipt of a portion of their cash compensation .
payments under this plan are made based on the participant 2019s distribution election and plan balance .
participants can earn a return on their deferred compensation based on notional investments in the same investment funds that are offered in our defined contribution plans .

as of december 31 , 2017 , our liability to participants of the deferred compensation plans was $ 255 million and is recorded in other long-term liabilities on our consolidated balance sheets .
this amount reflects the accumulated participant deferrals and earnings thereon as of that date .

as of december 31 , 2017 , we held $ 236 million in mutual funds related to these plans that are recorded in long-term investments on our consolidated balance sheets , and serve as an economic hedge against changes in fair values of our other deferred compensation liabilities .
we record changes in the fair value of the liability and the related investment in sg&a as discussed in note 8 .
11 .

11 .
debt and lines of credit short-term borrowings we maintain a line of credit to support commercial paper borrowings , if any , and to provide additional liquidity through bank loans .
as of december 31 , 2017 , we had a variable-rate revolving credit facility from a consortium of investment-grade banks that allows us to borrow up to $ 2 billion until march 2022 .

the interest rate on borrowings under this credit facility , if drawn , is indexed to the applicable london interbank offered rate ( libor ) .
as of december 31 , 2017 , our credit facility was undrawn and we had no commercial paper outstanding .
long-term debt we retired $ 250 million of maturing debt in march 2017 and another $ 375 million in june 2017 .
in may 2017 , we issued an aggregate principal amount of $ 600 million of fixed-rate , long-term debt .

the offering consisted of the reissuance of $ 300 million of 2.75% ( 2.75 % ) notes due in 2021 at a premium and the issuance of $ 300 million of 2.625% ( 2.625 % ) notes due in 2024 at a discount .
we incurred $ 3 million of issuance and other related costs .
the proceeds of the offerings were $ 605 million , net of the original issuance discount and premium , and were used for the repayment of maturing debt and general corporate purposes .

in november 2017 , we issued a principal amount of $ 500 million of fixed-rate , long-term debt due in 2027 .
we incurred $ 3 million of issuance and other related costs .
the proceeds of the offering were $ 494 million , net of the original issuance discount , and were used for general corporate purposes .
in may 2016 , we issued a principal amount of $ 500 million of fixed-rate , long-term debt due in 2022 .
we incurred $ 3 million of issuance and other related costs .

the proceeds of the offering were $ 499 million , net of the original issuance discount , and were used toward the repayment of a portion of $ 1.0 billion of maturing debt retired in may 2016 .
in may 2015 , we issued a principal amount of $ 500 million of fixed-rate , long-term debt due in 2020 .
we incurred $ 3 million of issuance and other related costs .

the proceeds of the offering were $ 498 million , net of the original issuance discount , and were used toward the repayment of a portion of the debt that matured in august 2015 .
we retired $ 250 million of maturing debt in april 2015 and another $ 750 million in august 2015 .
texas instruments 2022 2017 form 10-k 51

 |
| table | | 2017             | 2016
------------------------------------------------- | ---------------- | ----------------
assumed health care cost trend rate for next year | 7.50% ( 7.50 % ) | 6.75% ( 6.75 % )
ultimate trend rate                               | 5.00% ( 5.00 % ) | 5.00% ( 5.00 % )
year in which ultimate trend rate is reached      | 2028             | 2024 |


| _id | dd4bcd872 |
| title |  |
| text | the internal revenue code .
therefore , cash needed to execute our strategy and invest in new properties , as well as to pay our debt at maturity , must come from one or more of the following sources : 2022 cash not distributed to shareholders , 2022 proceeds of property dispositions , or 2022 proceeds derived from the issuance of new debt or equity securities .
it is management 2019s intention that we continually have access to the capital resources necessary to expand and develop our business .

as a result , we intend to operate with and maintain a conservative capital structure that will allow us to maintain strong debt service coverage and fixed-charge coverage ratios as part of our commitment to investment-grade debt ratings .

we may , from time to time , seek to obtain funds by the following means : 2022 additional equity offerings , 2022 unsecured debt financing and/or mortgage financings , and 2022 other debt and equity alternatives , including formation of joint ventures , in a manner consistent with our intention to operate with a conservative debt structure .
cash and cash equivalents were $ 30.5 million and $ 35.0 million at december 31 , 2004 and december 31 , 2003 , respectively .

summary of cash flows for the year ended december 31 , 2004 ( in thousands ) .

the cash provided by operating activities is primarily attributable to the operation of our properties and the change in working capital related to our operations .

we used cash of $ 154.3 million during the twelve months ended december 31 , 2004 in investing activities , including the following : 2022 $ 101.7 million for our acquisition of westgate mall , shaw 2019s plaza and several parcels of land , 2022 capital expenditures of $ 59.2 million for development and redevelopment of properties including santana row , 2022 maintenance capital expenditures of approximately $ 36.9 million , 2022 $ 9.4 million capital contribution to a real estate partnership , and 2022 an

to a real estate partnership , and 2022 an additional $ 3.2 million net advance under an existing mortgage note receivable ; offset by 2022 $ 41.8 million in net sale proceeds from the sale of properties , and

 |
| table | | for the year ended december 31 2004 ( in thousands )
--------------------------------------------- | ----------------------------------------------------
cash provided by operating activities         | $ 161113
cash used in investing activities             | -154273 ( 154273 )
cash used by financing activities             | -11333 ( 11333 )
decrease in cash and cash equivalents         | -4493 ( 4493 )
cash and cash equivalents beginning of period | 34968
cash and cash equivalents end of period       | $ 30475 |


| _id | dd4c36b88 |
| title |  |
| text | ( c ) includes the effects of items not considered in the assessment of the operating performance of our business segments which increased operating profit by $ 230 million , $ 150 million after tax ( $ 0.34 per share ) .

also includes expenses of $ 16 million , $ 11 million after tax ( $ 0.03 per share ) for a debt exchange , and a reduction in income tax expense of $ 62 million ( $ 0.14 per share ) resulting from a tax benefit related to claims we filed for additional extraterritorial income exclusion ( eti ) tax benefits .
on a combined basis , these items increased earnings by $ 201 million after tax ( $ 0.45 per share ) .

( d ) includes the effects of items not considered in the assessment of the operating performance of our business segments which , on a combined basis , increased operating profit by $ 173 million , $ 113 million after tax ( $ 0.25 per share ) .
( e ) includes the effects of items not considered in the assessment of the operating performance of our business segments which decreased operating profit by $ 61 million , $ 54 million after tax ( $ 0.12 per share ) .

also includes a charge of $ 154 million , $ 100 million after tax ( $ 0.22 per share ) for the early repayment of debt , and a reduction in income tax expense resulting from the closure of an internal revenue service examination of $ 144 million ( $ 0.32 per share ) .
on a combined basis , these items reduced earnings by $ 10 million after tax ( $ 0.02 per share ) .

( f ) includes the effects of items not considered in the assessment of the operating performance of our business segments which , on a combined basis , decreased operating profit by $ 7 million , $ 6 million after tax ( $ 0.01 per share ) .
also includes a charge of $ 146 million , $ 96 million after tax ( $ 0.21 per share ) for the early repayment of debt .

( g ) we define return on invested capital ( roic ) as net earnings plus after-tax interest expense divided by average invested capital ( stockholders 2019 equity plus debt ) , after adjusting stockholders 2019 equity by adding back adjustments related to postretirement benefit plans .
we believe that reporting roic provides investors with greater visibility into how effectively we use the capital invested in our operations .

we use roic to evaluate multi-year investment decisions and as a long-term performance measure , and also use it as a factor in evaluating management performance under certain of our incentive compensation plans .
roic is not a measure of financial performance under generally accepted accounting principles , and may not be defined and calculated by other companies in the same manner .
roic should not be considered in isolation or as an alternative to net earnings as an indicator of performance .

we calculate roic as follows : ( in millions ) 2007 2006 2005 2004 2003 .

1 represents after-tax interest expense utilizing the federal statutory rate of 35% ( 35 % ) .
2 debt consists of long-term debt , including current maturities of long-term debt , and short-term borrowings ( if any ) .
3 equity includes non-cash adjustments , primarily for unrecognized benefit plan actuarial losses and prior service costs in 2007 and 2006 , the adjustment for the adoption of fas 158 in 2006 , and the additional minimum pension liability in years prior to 2007 .

4 average benefit plan adjustments reflect the cumulative value of entries identified in our statement of stockholders equity under the captions 201cpostretirement benefit plans , 201d 201cadjustment for adoption of fas 158 201d and 201cminimum pension liability . 201d the total of annual benefit plan adjustments to equity were : 2007 = $ 1706 million ; 2006 = ( $ 1883 ) million ; 2005 = ( $ 105 ) million ; 2004 = ( $ 285 ) million ; 2003 = $ 331 million ; 2002 = ( $ 1537 million ) ; and 2001 = ( $ 33

; 2002 = ( $ 1537 million ) ; and 2001 = ( $ 33 million ) .

as these entries are recorded in the fourth quarter , the value added back to our average equity in a given year is the cumulative impact of all prior year entries plus 20% ( 20 % ) of the current year entry value .
5 yearly averages are calculated using balances at the start of the year and at the end of each quarter.

 |
| table | ( in millions )                                   | 2007             | 2006             | 2005             | 2004             | 2003
------------------------------------------------- | ---------------- | ---------------- | ---------------- | ---------------- | --------------
net earnings                                      | $ 3033           | $ 2529           | $ 1825           | $ 1266           | $ 1053
interest expense ( multiplied by 65% ( 65 % ) ) 1 | 229              | 235              | 241              | 276              | 317
return                                            | $ 3262           | $ 2764           | $ 2066           | $ 1542           | $ 1370
average debt2 5                                   | $ 4416           | $ 4727           | $ 5077           | $ 5932           | $ 6612
average equity3 5                                 | 7661             | 7686             | 7590             | 7015             | 6170
average benefit plan adjustments3 4 5             | 3171             | 2006             | 1545             | 1296             | 1504
average invested capital                          | $ 15248          | $ 14419          | $ 14212          | $ 14243          | $ 14286
return on invested capital                        | 21.4% ( 21.4 % ) | 19.2% ( 19.2 % ) | 14.5% ( 14.5 % ) | 10.8% ( 10.8 % ) | 9.6% ( 9.6 % ) |


| _id | dd4c5a402 |
| title |  |
| text | table of contents configuration , amenities provided to passengers , loyalty programs , the automation of travel agent reservation systems , onboard products , markets served and other services .
we compete with both major network airlines and low-cost carriers throughout our network .
international in addition to our extensive domestic service , we provide international service to canada , central and south america , asia , europe , australia and new zealand .

in providing international air transportation , we compete with u.s .
airlines , foreign investor-owned airlines and foreign state- owned or state-affiliated airlines , including carriers based in the middle east , the three largest of which we believe benefit from significant government subsidies .
in order to increase our ability to compete for international air transportation service , which is subject to extensive government regulation , u.s .

and foreign carriers have entered into marketing relationships , alliances , cooperation agreements and jbas to exchange traffic between each other 2019s flights and route networks .
see 201cticket distribution and marketing agreements 201d above for further discussion .
employees and labor relations the airline business is labor intensive .
in 2016 , mainline and regional salaries , wages and benefits were our largest expense and represented approximately 35% ( 35 % ) of our total operating expenses .

labor relations in the air transportation industry are regulated under the railway labor act ( rla ) , which vests in the national mediation board ( nmb ) certain functions with respect to disputes between airlines and labor unions relating to union representation and collective bargaining agreements ( cbas ) .
when an rla cba becomes amendable , if either party to the agreement wishes to modify its terms , it must notify the other party in the manner prescribed under the rla and as agreed by the parties .

under the rla , the parties must meet for direct negotiations , and , if no agreement is reached , either party may request the nmb to appoint a federal mediator .
the rla prescribes no set timetable for the direct negotiation and mediation process .
it is not unusual for those processes to last for many months and even for several years .

if no agreement is reached in mediation , the nmb in its discretion may declare under the rla at some time that an impasse exists , and if an impasse is declared , the nmb proffers binding arbitration to the parties .
either party may decline to submit to binding arbitration .
if arbitration is rejected by either party , an initial 30-day 201ccooling off 201d period commences .

following the conclusion of that 30-day 201ccooling off 201d period , if no agreement has been reached , 201cself-help 201d ( as described below ) can begin unless a presidential emergency board ( peb ) is established .
a peb examines the parties 2019 positions and recommends a solution .
the peb process lasts for 30 days and ( if no resolution is reached ) is followed by another 201ccooling off 201d period of 30 days .

at the end of a 201ccooling off 201d period ( unless an agreement is reached , a peb is established or action is taken by congress ) , the labor organization may exercise 201cself-help , 201d such as a strike , and the airline may resort to its own 201cself-help , 201d including the imposition of any or all of its proposed amendments to the cba and the hiring of new employees to replace any striking workers .

the table below presents our approximate number of active full-time equivalent employees as of december 31 , 2016 .
mainline operations wholly-owned regional carriers total .

 |
| table | | mainline operations | wholly-owned regional carriers | total
------------------------------------------- | ------------------- | ------------------------------ | ------
pilots and flight crew training instructors | 13400               | 3400                           | 16800
flight attendants                           | 24700               | 2200                           | 26900
maintenance personnel                       | 14900               | 2000                           | 16900
fleet service personnel                     | 16600               | 3500                           | 20100
passenger service personnel                 | 15900               | 7100                           | 23000
administrative and other                    | 16000               | 2600                           | 18600
total                                       | 101500              | 20800                          | 122300 |


| _id | dd4c02ae0 |
| title |  |
| text | marathon oil corporation notes to consolidated financial statements restricted stock awards the following is a summary of restricted stock award activity .
awards weighted-average grant date fair value .

the vesting date fair value of restricted stock awards which vested during 2009 , 2008 and 2007 was $ 24 million , $ 38 million and $ 29 million .
the weighted average grant date fair value of restricted stock awards was $ 44.89 , $ 47.72 , and $ 39.87 for awards unvested at december 31 , 2009 , 2008 and 2007 .

as of december 31 , 2009 , there was $ 43 million of unrecognized compensation cost related to restricted stock awards which is expected to be recognized over a weighted average period of 1.6 years .
stock-based performance awards all stock-based performance awards have either vested or been forfeited .
the vesting date fair value of stock- based performance awards which vested during 2007 was $ 38 .
24 .

24 .
stockholders 2019 equity in each year , 2009 and 2008 , we issued 2 million in common stock upon the redemption of the exchangeable shares described below in addition to treasury shares issued for employee stock-based awards .
the board of directors has authorized the repurchase of up to $ 5 billion of marathon common stock .
purchases under the program may be in either open market transactions , including block purchases , or in privately negotiated transactions .

we will use cash on hand , cash generated from operations , proceeds from potential asset sales or cash from available borrowings to acquire shares .
this program may be changed based upon our financial condition or changes in market conditions and is subject to termination prior to completion .
the repurchase program does not include specific price targets or timetables .
as of december 31 , 2009 , we have acquired 66 million common shares at a cost of $ 2922 million under the program .

no shares have been acquired since august 2008 .
securities exchangeable into marathon common stock 2013 as discussed in note 6 , we acquired all of the outstanding shares of western on october 18 , 2007 .
the western shareholders who were canadian residents received , at their election , cash , marathon common stock , securities exchangeable into marathon common stock ( the 201cexchangeable shares 201d ) or a combination thereof .

the western shareholders elected to receive 5 million exchangeable shares as part of the acquisition consideration .
the exchangeable shares are shares of an indirect canadian subsidiary of marathon and , at the acquisition date , were exchangeable on a one-for-one basis into marathon common stock .
subsequent to the acquisition , the exchange ratio is adjusted to reflect cash dividends , if any , paid on marathon common stock and cash dividends , if any , paid on the exchangeable shares .

the exchange ratio at december 31 , 2009 , was 1.06109 common shares for each exchangeable share .
the exchangeable shares are exchangeable at the option of the holder at any time and are automatically redeemable on october 18 , 2011 .
holders of exchangeable shares are entitled to instruct a trustee to vote ( or obtain a proxy from the trustee to vote directly ) on all matters submitted to the holders of marathon common stock .

the number of votes to which each holder is entitled is equal to the whole number of shares of marathon common stock into which such holder 2019s exchangeable shares would be exchangeable based on the exchange ratio in effect on the record date for the vote .
the voting right is attached to voting preferred shares of marathon that were issued to a trustee in an amount

 |
| table | | awards             | weighted-averagegrant datefair value
---------------------------- | ------------------ | ------------------------------------
unvested at december 31 2008 | 2049255            | $ 47.72
granted                      | 251335             | 24.74
vested                       | -762466 ( 762466 ) | 46.03
forfeited                    | -96625 ( 96625 )   | 43.56
unvested at december 31 2009 | 1441499            | 44.89 |


| _id | dd4ba7be0 |
| title |  |
| text | construction of cvn-79 john f .
kennedy , construction of the u.s .
coast guard 2019s fifth national security cutter ( unnamed ) , advance planning efforts for the cvn-72 uss abraham lincoln rcoh , and continued execution of the cvn-71 uss theodore roosevelt rcoh .
2010 2014the value of new contract awards during the year ended december 31 , 2010 , was approximately $ 3.6 billion .
significant new awards during this period included $ 480 million for the construction of the u.s .

coast guard 2019s fourth national security cutter hamilton , $ 480 million for design and long-lead material procurement activities for the cvn-79 john f .
kennedy aircraft carrier , $ 377 million for cvn-78 gerald r .
ford , $ 224 million for lha-7 ( unnamed ) , $ 184 million for lpd-26 john p .
murtha , $ 114 million for ddg-114 ralph johnson and $ 62 million for long-lead material procurement activities for lpd-27 ( unnamed ) .

liquidity and capital resources we endeavor to ensure the most efficient conversion of operating results into cash for deployment in operating our businesses and maximizing stockholder value .
we use various financial measures to assist in capital deployment decision making , including net cash provided by operating activities and free cash flow .
we believe these measures are useful to investors in assessing our financial performance .

the table below summarizes key components of cash flow provided by ( used in ) operating activities: .

cash flows we discuss below our major operating , investing and financing activities for each of the three years in the period ended december 31 , 2011 , as classified on our consolidated statements of cash flows .
operating activities 2011 2014cash provided by operating activities was $ 528 million in 2011 compared with $ 359 million in 2010 .

the increase of $ 169 million was due principally to increased earnings net of impairment charges and lower pension contributions , offset by an increase in trade working capital .
net cash paid by northrop grumman on our behalf for u.s .
federal income tax obligations was $ 53 million .
we expect cash generated from operations for 2012 to be sufficient to service debt , meet contract obligations , and finance capital expenditures .

although 2012 cash from operations is expected to be sufficient to service these obligations , we may from time to time borrow funds under our credit facility to accommodate timing differences in cash flows .
2010 2014net cash provided by operating activities was $ 359 million in 2010 compared with cash used of $ 88 million in 2009 .

the change of $ 447 million was due principally to a decrease in discretionary pension contributions of $ 97 million , a decrease in trade working capital of $ 299 million , and a decrease in deferred income taxes of $ 79 million .
in 2009 , trade working capital balances included the unfavorable impact of delayed customer billings associated with the negative performance adjustments on the lpd-22 through lpd-25 contract due to projected cost increases at completion .

see note 7 : contract charges in item 8 .
the change in deferred taxes was due principally to the timing of contract related deductions .
u.s .
federal income tax payments made by northrop grumman on our behalf were $ 89 million in 2010.

 |
| table | ( $ in millions )                                          | year ended december 31 2011 | year ended december 31 2010 | year ended december 31 2009
---------------------------------------------------------- | --------------------------- | --------------------------- | ---------------------------
net earnings ( loss )                                      | $ -94 ( 94 )                | $ 135                       | $ 124
goodwill impairment                                        | 290                         | 0                           | 0
deferred income taxes                                      | 27                          | -19 ( 19 )                  | -98 ( 98 )
depreciation and amortization                              | 190                         | 183                         | 186
stock-based compensation                                   | 42                          | 0                           | 0
retiree benefit funding less than ( in excess of ) expense | 122                         | 33                          | -28 ( 28 )
trade working capital decrease ( increase )                | -49 ( 49 )                  | 27                          | -272 ( 272 )
net cash provided by ( used in ) operating activities      | $ 528                       | $ 359                       | $ -88 ( 88 ) |


| _id | dd4b87462 |
| title |  |
| text | masco corporation notes to consolidated financial statements ( continued ) t .
other commitments and contingencies litigation .
we are subject to claims , charges , litigation and other proceedings in the ordinary course of our business , including those arising from or related to contractual matters , intellectual property , personal injury , environmental matters , product liability , construction defect , insurance coverage , personnel and employment disputes and other matters , including class actions .

we believe we have adequate defenses in these matters and that the outcome of these matters is not likely to have a material adverse effect on us .
however , there is no assurance that we will prevail in these matters , and we could in the future incur judgments , enter into settlements of claims or revise our expectations regarding the outcome of these matters , which could materially impact our results of operations .

in july 2012 , the company reached a settlement agreement related to the columbus drywall litigation .
the company and its insulation installation companies named in the suit agreed to pay $ 75 million in return for dismissal with prejudice and full release of all claims .
the company and its insulation installation companies continue to deny that the challenged conduct was unlawful and admit no wrongdoing as part of the settlement .

a settlement was reached to eliminate the considerable expense and uncertainty of this lawsuit .
the company recorded the settlement expense in the second quarter of 2012 and the amount was paid in the fourth quarter of 2012 .
warranty .
at the time of sale , the company accrues a warranty liability for the estimated cost to provide products , parts or services to repair or replace products in satisfaction of warranty obligations .

during the third quarter of 2012 , a business in the other specialty products segment recorded a $ 12 million increase in expected future warranty claims resulting from the completion of an analysis prepared by the company based upon its periodic assessment of recent business unit specific operating trends including , among others , home ownership demographics , sales volumes , manufacturing quality , an analysis of recent warranty claim activity and an estimate of current costs to service anticipated

estimate of current costs to service anticipated claims .

changes in the company 2019s warranty liability were as follows , in millions: .

investments .
with respect to the company 2019s investments in private equity funds , the company had , at december 31 , 2012 , commitments to contribute up to $ 19 million of additional capital to such funds representing the company 2019s aggregate capital commitment to such funds less capital contributions made to date .
the company is contractually obligated to make additional capital contributions to certain of its private equity funds upon receipt of a capital call from the private equity fund .

the company has no control over when or if the capital calls will occur .
capital calls are funded in cash and generally result in an increase in the carrying value of the company 2019s investment in the private equity fund when paid.

 |
| table | | 2012       | 2011
---------------------------------------------------- | ---------- | ----------
balance at january 1                                 | $ 102      | $ 107
accruals for warranties issued during the year       | 42         | 28
accruals related to pre-existing warranties          | 16         | 8
settlements made ( in cash or kind ) during the year | -38 ( 38 ) | -38 ( 38 )
other net ( including currency translation )         | -4 ( 4 )   | -3 ( 3 )
balance at december 31                               | $ 118      | $ 102 |


| _id | dd4c3d01e |
| title |  |
| text | discounted cash flow model ( dcf ) to estimate the current fair value of its reporting units when testing for impairment , as management believes forecasted cash flows are the best indicator of such fair value .
a number of significant assumptions and estimates are involved in the application of the dcf model to forecast operating cash flows , including sales growth ( volumes and pricing ) , production costs , capital spending , and discount rate .

most of these assumptions vary significantly among the reporting units .
cash flow forecasts are generally based on approved business unit operating plans for the early years and historical relationships in later years .
the wacc rate for the individual reporting units is estimated with the assistance of valuation experts .

arconic would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit 2019s fair value without exceeding the total amount of goodwill allocated to that reporting unit .

in connection with the interim impairment evaluation of long-lived assets for the disks operations ( an asset group within the aen business unit ) in the second quarter of 2018 , which resulted from a decline in forecasted financial performance for the business in connection with its updated three-year strategic plan , the company also performed an interim impairment evaluation of goodwill for the aen reporting unit .

the estimated fair value of the reporting unit was substantially in excess of the carrying value ; thus , there was no impairment of goodwill .
goodwill impairment tests in 2017 and 2016 indicated that goodwill was not impaired for any of the company 2019s reporting units , except for the arconic forgings and extrusions ( afe ) business whose estimated fair value was lower than its carrying value .
as such , arconic recorded an impairment for the full amount of goodwill in the afe reporting unit of $ 719 .

the decrease in the afe fair value was primarily due to unfavorable performance that was impacting operating margins and a higher discount rate due to an increase in the risk-free rate of return , while the carrying value increased compared to prior year .
other intangible assets .
intangible assets with indefinite useful lives are not amortized while intangible assets with finite useful lives are amortized generally on a straight-line basis over the periods benefited .

the following table details the weighted- average useful lives of software and other intangible assets by reporting segment ( numbers in years ) : .

revenue recognition .
the company's contracts with customers are comprised of acknowledged purchase orders incorporating the company 2019s standard terms and conditions , or for larger customers , may also generally include terms under negotiated multi-year agreements .
these contracts with customers typically consist of the manufacture of products which represent single performance obligations that are satisfied upon transfer of control of the product to the customer .

the company produces fastening systems ; seamless rolled rings ; investment castings , including airfoils and forged jet engine components ; extruded , machined and formed aircraft parts ; aluminum sheet and plate ; integrated aluminum structural systems ; architectural extrusions ; and forged aluminum commercial vehicle wheels .
transfer of control is assessed based on alternative use of the products we produce and our enforceable right to payment for performance to date under the contract terms .

transfer of control and revenue recognition generally occur upon shipment or delivery of the product , which is when title , ownership and risk of loss pass to the customer and is based on the applicable shipping terms .
the shipping terms vary across all businesses and depend on the product , the country of origin , and the type of transportation ( truck , train , or vessel ) .
an invoice for payment is issued at time of shipment .
the company 2019s objective is to have net 30-day terms .

our business units set commercial terms on which arconic sells products to its customers .
these terms are influenced by industry custom , market conditions , product line ( specialty versus commodity products ) , and other considerations .
in certain circumstances , arconic receives advanced payments from its customers for product to be delivered in future periods .

these advanced payments are recorded as deferred revenue until the product is delivered and title and risk of loss have passed to the customer in accordance with the terms of the contract .
deferred revenue is included in other current liabilities and other noncurrent liabilities and deferred credits on the accompanying consolidated balance sheet .
environmental matters .
expenditures for current operations are expensed or capitalized , as appropriate .

expenditures relating to existing conditions caused by past operations , which will not contribute to future revenues , are expensed .
liabilities are recorded when remediation costs are probable and can be reasonably estimated .
the liability may include costs such as site investigations , consultant fees , feasibility studies , outside contractors , and monitoring expenses .
estimates are generally not discounted or reduced by potential claims for recovery .

claims for recovery are recognized when probable and as agreements are reached with third parties .
the estimates also include costs related to other potentially responsible parties to the extent that arconic has reason to believe such parties will not fully pay their proportionate share .

the liability is continuously reviewed and adjusted to reflect current remediation progress , prospective estimates of required activity , and other factors that may be relevant , including changes in technology or regulations .
litigation matters .
for asserted claims and assessments , liabilities are recorded when an unfavorable outcome of a matter is

 |
| table | | software | other intangible assets
----------------------------------------- | -------- | -----------------------
engineered products and solutions         | 5        | 33
global rolled products                    | 5        | 9
transportation and construction solutions | 5        | 16 |


| _id | dd4c5169a |
| title |  |
| text | table of contents although our ownership interest in each of our cellulose derivatives ventures exceeds 20% ( 20 % ) , we account for these investments using the cost method of accounting because we determined that we cannot exercise significant influence over these entities due to local government investment in and influence over these entities , limitations on our involvement in the day-to-day operations and the present inability of the entities to provide timely financial information prepared in

provide timely financial information prepared in accordance with generally accepted accounting principles in the united states of america ( "us gaap" ) .

other equity method investments infraservs .
we hold indirect ownership interests in several german infraserv groups that own and develop industrial parks and provide on-site general and administrative support to tenants .
our ownership interest in the equity investments in infraserv affiliates are as follows : as of december 31 , 2016 ( in percentages ) .

research and development our businesses are innovation-oriented and conduct research and development activities to develop new , and optimize existing , production technologies , as well as to develop commercially viable new products and applications .
research and development expense was $ 78 million , $ 119 million and $ 86 million for the years ended december 31 , 2016 , 2015 and 2014 , respectively .

we consider the amounts spent during each of the last three fiscal years on research and development activities to be sufficient to execute our current strategic initiatives .
intellectual property we attach importance to protecting our intellectual property , including safeguarding our confidential information and through our patents , trademarks and copyrights , in order to preserve our investment in research and development , manufacturing and marketing .

patents may cover processes , equipment , products , intermediate products and product uses .
we also seek to register trademarks as a means of protecting the brand names of our company and products .
patents .
in most industrial countries , patent protection exists for new substances and formulations , as well as for certain unique applications and production processes .
however , we do business in regions of the world where intellectual property protection may be limited and difficult to enforce .

confidential information .
we maintain stringent information security policies and procedures wherever we do business .
such information security policies and procedures include data encryption , controls over the disclosure and safekeeping of confidential information and trade secrets , as well as employee awareness training .
trademarks .

aoplus ae , ateva ae , avicor ae , britecoat ae , celanese ae , celanex ae , celcon ae , celfx ae , celstran ae , celvolit ae , clarifoil ae , duroset ae , ecovae ae , factor ae , fortron ae , gur ae , hostaform ae , impet ae , mowilith ae , metalx ae , mt ae , nutrinova ae , qorus ae , riteflex ae , slidex 2122 , sunett ae , tcx ae , thermx ae , tufcor ae , vantage ae , vantageplus 2122 , vectra ae , vinamul ae , vitaldose ae , zenite ae and certain other branded products and services named in this

other branded products and services named in this document are registered or reserved trademarks or service marks owned or licensed by celanese .

the foregoing is not intended to be an exhaustive or comprehensive list of all registered or reserved trademarks and service marks owned or licensed by celanese .
fortron ae is a registered trademark of fortron industries llc .
hostaform ae is a registered trademark of hoechst gmbh .
mowilith ae is a registered trademark of celanese in most european countries .
we monitor competitive developments and defend against infringements on our intellectual property rights .

neither celanese nor any particular business segment is materially dependent upon any one patent , trademark , copyright or trade secret .
environmental and other regulation matters pertaining to environmental and other regulations are discussed in item 1a .
risk factors , as well as note 2 - summary of accounting policies , note 16 - environmental and note 24 - commitments and contingencies in the accompanying consolidated financial statements.

 |
| table | | as of december 31 2016 ( in percentages )
--------------------------------- | -----------------------------------------
infraserv gmbh & co . gendorf kg  | 39
infraserv gmbh & co . hoechst kg  | 32
infraserv gmbh & co . knapsack kg | 27 |


| _id | dd4beb624 |
| title |  |
| text | issuer purchases of equity securities the following table provides information regarding purchases of our common stock that were made by us during the fourth quarter of 2011 .
period total number of shares purchased ( 2 ) average price paid per share total number of shares purchased as part of publicly announced plans or programs ( 1 ) maximum dollar value of shares that may yet be purchased under the plans or programs ( 1 ) ( in millions ) .

( 1 ) in may 2010 , our board of directors approved a $ 3.5 billion share repurchase program .
we completed this program in the fourth quarter of 2011 .
in total , we repurchased 49.2 million common shares for $ 3.5 billion , or $ 71.18 per share , under this program .
( 2 ) during the fourth quarter of 2011 , we repurchased 672326 shares from company employees for the payment of personal income tax withholdings resulting from restricted stock vesting and stock option exercises .

such repurchases are in addition to the $ 3.5 billion repurchase program .
under the devon energy corporation incentive savings plan ( the 201cplan 201d ) , eligible employees may purchase shares of our common stock through an investment in the devon stock fund ( the 201cstock fund 201d ) , which is administered by an independent trustee , fidelity management trust company .

eligible employees purchased approximately 45000 shares of our common stock in 2011 , at then-prevailing stock prices , that they held through their ownership in the stock fund .
we acquired the shares of our common stock sold under the plan through open-market purchases .

we filed a registration statement on form s-8 on january 26 , 2012 registering any offers and sales of interests in the plan or the stock fund and of the underlying shares of our common stock purchased by plan participants after that date .

similarly , under the devon canada corporation savings plan ( the 201ccanadian plan 201d ) , eligible canadian employees may purchase shares of our common stock through an investment in the canadian plan , which is administered by an independent trustee , sun life assurance company of canada .
eligible canadian employees purchased approximately 9000 shares of our common stock in 2011 , at then-prevailing stock prices , that they held through their ownership in the canadian plan .

we acquired the shares sold under the canadian plan through open-market purchases .
these shares and any interest in the canadian plan were offered and sold in reliance on the exemptions for offers and sales of securities made outside of the u.s. , including under regulation s for offers and sales of securities to employees pursuant to an employee benefit plan established and administered in accordance with the law of a country other than the u.s.

 |
| table | period                      | total number of shares purchased ( 2 ) | average price paid per share | total number of shares purchased as part ofpublicly announced plans or programs ( 1 ) | maximum dollar value of shares that may yetbe purchased under the plans or programs ( 1 ) ( in millions )
--------------------------- | -------------------------------------- | ---------------------------- | ------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------
october 1 2013 october 31   | 3228557                                | $ 58.52                      | 3227800                                                                               | $ 108
november 1 2013 november 30 | 1813994                                | $ 66.38                      | 1618110                                                                               | $ 2014
december 1 2013 december 31 | 475685                                 | $ 64.68                      | 2014                                                                                | $ 2014
total                       | 5518236                                | $ 61.64                      | 4845910                                                                               | |


| _id | dd4ba5732 |
| title |  |
| text | the hartford financial services group , inc .
notes to consolidated financial statements ( continued ) 10 .
sales inducements accounting policy the company currently offers enhanced crediting rates or bonus payments to contract holders on certain of its individual and group annuity products .
the expense associated with offering a bonus is deferred and amortized over the life of the related contract in a pattern consistent with the amortization of deferred policy acquisition costs .

amortization expense associated with expenses previously deferred is recorded over the remaining life of the contract .
consistent with the unlock , the company unlocked the amortization of the sales inducement asset .
see note 7 for more information concerning the unlock .
changes in deferred sales inducement activity were as follows for the years ended december 31: .

11 .
reserves for future policy benefits and unpaid losses and loss adjustment expenses life insurance products accounting policy liabilities for future policy benefits are calculated by the net level premium method using interest , withdrawal and mortality assumptions appropriate at the time the policies were issued .
the methods used in determining the liability for unpaid losses and future policy benefits are standard actuarial methods recognized by the american academy of actuaries .

for the tabular reserves , discount rates are based on the company 2019s earned investment yield and the morbidity/mortality tables used are standard industry tables modified to reflect the company 2019s actual experience when appropriate .
in particular , for the company 2019s group disability known claim reserves , the morbidity table for the early durations of claim is based exclusively on the company 2019s experience , incorporating factors such as gender , elimination period and diagnosis .

these reserves are computed such that they are expected to meet the company 2019s future policy obligations .
future policy benefits are computed at amounts that , with additions from estimated premiums to be received and with interest on such reserves compounded annually at certain assumed rates , are expected to be sufficient to meet the company 2019s policy obligations at their maturities or in the event of an insured 2019s death .

changes in or deviations from the assumptions used for mortality , morbidity , expected future premiums and interest can significantly affect the company 2019s reserve levels and related future operations and , as such , provisions for adverse deviation are built into the long-tailed liability assumptions .
liabilities for the company 2019s group life and disability contracts , as well as its individual term life insurance policies , include amounts for unpaid losses and future policy benefits .

liabilities for unpaid losses include estimates of amounts to fully settle known reported claims , as well as claims related to insured events that the company estimates have been incurred but have not yet been reported .

these reserve estimates are based on known facts and interpretations of circumstances , and consideration of various internal factors including the hartford 2019s experience with similar cases , historical trends involving claim payment patterns , loss payments , pending levels of unpaid claims , loss control programs and product mix .
in addition , the reserve estimates are influenced by consideration of various external factors including court decisions , economic conditions and public attitudes .

the effects of inflation are implicitly considered in the reserving process.

 |
| table | | 2011       | 2010     | 2009
------------------------------ | ---------- | -------- | ------------
balance beginning of year      | $ 459      | $ 438    | $ 553
sales inducements deferred     | 20         | 31       | 59
amortization charged to income | -17 ( 17 ) | -8 ( 8 ) | -105 ( 105 )
amortization 2014 unlock       | -28 ( 28 ) | -2 ( 2 ) | -69 ( 69 )
balance end of year            | $ 434      | $ 459    | $ 438 |


| _id | dd4b8df74 |
| title |  |
| text | 2011 compared to 2010 mfc 2019s net sales for 2011 increased $ 533 million , or 8% ( 8 % ) , compared to 2010 .
the increase was attributable to higher volume of about $ 420 million on air and missile defense programs ( primarily pac-3 and thaad ) ; and about $ 245 million from fire control systems programs primarily related to the sof clss program , which began late in the third quarter of 2010 .

partially offsetting these increases were lower net sales due to decreased volume of approximately $ 75 million primarily from various services programs and approximately $ 20 million from tactical missile programs ( primarily mlrs and jassm ) .
mfc 2019s operating profit for 2011 increased $ 96 million , or 10% ( 10 % ) , compared to 2010 .

the increase was attributable to higher operating profit of about $ 60 million for air and missile defense programs ( primarily pac-3 and thaad ) as a result of increased volume and retirement of risks ; and approximately $ 25 million for various services programs .
adjustments not related to volume , including net profit rate adjustments described above , were approximately $ 35 million higher in 2011 compared to 2010 .

backlog backlog increased in 2012 compared to 2011 mainly due to increased orders and lower sales on fire control systems programs ( primarily lantirn ae and sniper ae ) and on various services programs , partially offset by lower orders and higher sales volume on tactical missiles programs .
backlog increased in 2011 compared to 2010 primarily due to increased orders on air and missile defense programs ( primarily thaad ) .
trends we expect mfc 2019s net sales for 2013 will be comparable with 2012 .

we expect low double digit percentage growth in air and missile defense programs , offset by an expected decline in volume on logistics services programs .
operating profit and margin are expected to be comparable with 2012 results .

mission systems and training our mst business segment provides surface ship and submarine combat systems ; sea and land-based missile defense systems ; radar systems ; mission systems and sensors for rotary and fixed-wing aircraft ; littoral combat ships ; simulation and training services ; unmanned technologies and platforms ; ship systems integration ; and military and commercial training systems .

mst 2019s major programs include aegis , mk-41 vertical launching system ( vls ) , tpq-53 radar system , mh-60 , lcs , and ptds .
mst 2019s operating results included the following ( in millions ) : .

2012 compared to 2011 mst 2019s net sales for 2012 increased $ 447 million , or 6% ( 6 % ) , compared to 2011 .

the increase in net sales for 2012 was attributable to higher volume and risk retirements of approximately $ 395 million from ship and aviation system programs ( primarily ptds ; lcs ; vls ; and mh-60 ) ; about $ 115 million for training and logistics solutions programs primarily due to net sales from sim industries , which was acquired in the fourth quarter of 2011 ; and approximately $ 30 million as a result of increased volume on integrated warfare systems and sensors programs ( primarily aegis ) .

partially offsetting the increases were lower net sales of approximately $ 70 million from undersea systems programs due to lower volume on an international combat system program and towed array systems ; and about $ 25 million due to lower volume on various other programs .
mst 2019s operating profit for 2012 increased $ 92 million , or 14% ( 14 % ) , compared to 2011 .

the increase was attributable to higher operating profit of approximately $ 175 million from ship and aviation system programs , which reflects higher volume and risk retirements on certain programs ( primarily vls ; ptds ; mh-60 ; and lcs ) and reserves of about $ 55 million for contract cost matters on ship and aviation system programs recorded in the fourth quarter of 2011 ( including the terminated presidential helicopter program ) .

partially offsetting the increase was lower operating profit of approximately $ 40 million from undersea systems programs due to reduced profit booking rates on certain programs and lower volume on an international combat system program and towed array systems ; and about $ 40 million due to lower volume on various other programs .

adjustments not related to volume , including net profit booking rate adjustments and other matters described above , were approximately $ 150 million higher for 2012 compared to 2011.

 |
| table | | 2012           | 2011           | 2010
------------------- | -------------- | -------------- | --------------
net sales           | $ 7579         | $ 7132         | $ 7443
operating profit    | 737            | 645            | 713
operating margins   | 9.7% ( 9.7 % ) | 9.0% ( 9.0 % ) | 9.6% ( 9.6 % )
backlog at year-end | 10700          | 10500          | 10600 |


| _id | dd4c1f226 |
| title |  |
| text | research and development we are committed to investing in highly productive research and development capabilities , particularly in electro-mechanical systems .
our research and development ( "r&d" ) expenditures were approximately $ 48.3 million , $ 47.3 million and $ 45.2 million for the years ended december 31 , 2017 , 2016 and 2015 , respectively .

we concentrate on developing technology innovations that will deliver growth through the introduction of new products and solutions , and also on driving continuous improvements in product cost , quality , safety and sustainability .
we manage our r&d team as a global group with an emphasis on a global collaborative approach to identify and develop new technologies and worldwide product platforms .
we are organized on a regional basis to leverage expertise in local standards and configurations .

in addition to regional engineering centers in each geographic region , we also operate a global engineering center of excellence in bangalore , india .
seasonality our business experiences seasonality that varies by product line .
because more construction and do-it-yourself projects occur during the second and third calendar quarters of each year in the northern hemisphere , our security product sales , typically , are higher in those quarters than in the first and fourth calendar quarters .

however , our interflex business typically experiences higher sales in the fourth calendar quarter due to project timing .
revenue by quarter for the years ended december 31 , 2017 , 2016 and 2015 are as follows: .

employees we currently have approximately 10000 employees .
environmental regulation we have a dedicated environmental program that is designed to reduce the utilization and generation of hazardous materials during the manufacturing process as well as to remediate identified environmental concerns .
as to the latter , we are currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former production facilities .

the company regularly evaluates its remediation programs and considers alternative remediation methods that are in addition to , or in replacement of , those currently utilized by the company based upon enhanced technology and regulatory changes .
we are sometimes a party to environmental lawsuits and claims and have received notices of potential violations of environmental laws and regulations from the u.s .
environmental protection agency ( the "epa" ) and similar state authorities .

we have also been identified as a potentially responsible party ( "prp" ) for cleanup costs associated with off-site waste disposal at federal superfund and state remediation sites .
for all such sites , there are other prps and , in most instances , our involvement is minimal .
in estimating our liability , we have assumed that we will not bear the entire cost of remediation of any site to the exclusion of other prps who may be jointly and severally liable .

the ability of other prps to participate has been taken into account , based on our understanding of the parties 2019 financial condition and probable contributions on a per site basis .
additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future .

we incurred $ 3.2 million , $ 23.3 million , and $ 4.4 million of expenses during the years ended december 31 , 2017 , 2016 , and 2015 , respectively , for environmental remediation at sites presently or formerly owned or leased by us .
as of december 31 , 2017 and 2016 , we have recorded reserves for environmental matters of $ 28.9 million and $ 30.6 million .
of these amounts $ 8.9 million and $ 9.6 million , respectively , relate to remediation of sites previously disposed by us .

given the evolving nature of environmental laws , regulations and technology , the ultimate cost of future compliance is uncertain.

 |
| table | | first quarter | second quarter | third quarter | fourth quarter
---- | ------------- | -------------- | ------------- | --------------
2017 | 23% ( 23 % )  | 26% ( 26 % )   | 25% ( 25 % )  | 26% ( 26 % )
2016 | 22% ( 22 % )  | 26% ( 26 % )   | 26% ( 26 % )  | 26% ( 26 % )
2015 | 22% ( 22 % )  | 25% ( 25 % )   | 26% ( 26 % )  | 27% ( 27 % ) |


| _id | dd4bc32fa |
| title |  |
| text | notes to consolidated financial statements sumitomo mitsui financial group , inc .
( smfg ) provides the firm with credit loss protection on certain approved loan commitments ( primarily investment-grade commercial lending commitments ) .
the notional amount of such loan commitments was $ 32.41 billion and $ 31.94 billion as of december 2012 and december 2011 , respectively .

the credit loss protection on loan commitments provided by smfg is generally limited to 95% ( 95 % ) of the first loss the firm realizes on such commitments , up to a maximum of approximately $ 950 million .

in addition , subject to the satisfaction of certain conditions , upon the firm 2019s request , smfg will provide protection for 70% ( 70 % ) of additional losses on such commitments , up to a maximum of $ 1.13 billion , of which $ 300 million of protection had been provided as of both december 2012 and december 2011 .
the firm also uses other financial instruments to mitigate credit risks related to certain commitments not covered by smfg .

these instruments primarily include credit default swaps that reference the same or similar underlying instrument or entity or credit default swaps that reference a market index .
warehouse financing .
the firm provides financing to clients who warehouse financial assets .
these arrangements are secured by the warehoused assets , primarily consisting of commercial mortgage loans .

contingent and forward starting resale and securities borrowing agreements/forward starting repurchase and secured lending agreements the firm enters into resale and securities borrowing agreements and repurchase and secured lending agreements that settle at a future date .
the firm also enters into commitments to provide contingent financing to its clients and counterparties through resale agreements .

the firm 2019s funding of these commitments depends on the satisfaction of all contractual conditions to the resale agreement and these commitments can expire unused .
investment commitments the firm 2019s investment commitments consist of commitments to invest in private equity , real estate and other assets directly and through funds that the firm raises and manages .

these commitments include $ 872 million and $ 1.62 billion as of december 2012 and december 2011 , respectively , related to real estate private investments and $ 6.47 billion and $ 7.50 billion as of december 2012 and december 2011 , respectively , related to corporate and other private investments .

of these amounts , $ 6.21 billion and $ 8.38 billion as of december 2012 and december 2011 , respectively , relate to commitments to invest in funds managed by the firm , which will be funded at market value on the date of investment .
leases the firm has contractual obligations under long-term noncancelable lease agreements , principally for office space , expiring on various dates through 2069 .

certain agreements are subject to periodic escalation provisions for increases in real estate taxes and other charges .
the table below presents future minimum rental payments , net of minimum sublease rentals .
in millions december 2012 .

rent charged to operating expense for the years ended december 2012 , december 2011 and december 2010 was $ 374 million , $ 475 million and $ 508 million , respectively .
operating leases include office space held in excess of current requirements .

rent expense relating to space held for growth is included in 201coccupancy . 201d the firm records a liability , based on the fair value of the remaining lease rentals reduced by any potential or existing sublease rentals , for leases where the firm has ceased using the space and management has concluded that the firm will not derive any future economic benefits .
costs to terminate a lease before the end of its term are recognized and measured at fair value on termination .

goldman sachs 2012 annual report 175

 |
| table | in millions       | as of december 2012
----------------- | -------------------
2013              | $ 439
2014              | 407
2015              | 345
2016              | 317
2017              | 306
2018 - thereafter | 1375
total             | $ 3189 |


| _id | dd4b94b76 |
| title |  |
| text | 22 2016 annual report performance graph the following chart presents a comparison for the five-year period ended june 30 , 2016 , of the market performance of the company 2019s common stock with the s&p 500 index and an index of peer companies selected by the company : comparison of 5 year cumulative total return among jack henry & associates , inc. , the s&p 500 index , and a peer group the following information depicts a line graph with the following values: .

this comparison assumes $ 100 was invested on june 30 , 2011 , and assumes reinvestments of dividends .
total returns are calculated according to market capitalization of peer group members at the beginning of each period .
peer companies selected are in the business of providing specialized computer software , hardware and related services to financial institutions and other businesses .

companies in the peer group are aci worldwide , inc. , bottomline technology , inc. , broadridge financial solutions , cardtronics , inc. , convergys corp. , corelogic , inc. , dst systems , inc. , euronet worldwide , inc. , fair isaac corp. , fidelity national information services , inc. , fiserv , inc. , global payments , inc. , moneygram international , inc. , ss&c technologies holdings , inc. , total systems services , inc. , tyler technologies , inc. , verifone systems , inc. , and wex , inc. .

heartland payment systems , inc .
was removed from the peer group as it merged with global payments , inc .
in april 2016.

 |
| table | | 2011   | 2012   | 2013   | 2014   | 2015   | 2016
---------- | ------ | ------ | ------ | ------ | ------ | ------
jkhy       | 100.00 | 116.62 | 161.33 | 206.53 | 228.24 | 312.11
peer group | 100.00 | 107.65 | 126.89 | 174.28 | 219.46 | 251.24
s&p 500    | 100.00 | 105.45 | 127.17 | 158.46 | 170.22 | 177.02 |


| _id | dd4bee7ac |
| title |  |
| text | proceeds from the sale of equity securities .
from time to time , we raise funds through public offerings of our equity securities .
in addition , we receive proceeds from sales of our equity securities pursuant to our stock option and stock purchase plans .
for the year ended december 31 , 2004 , we received approximately $ 40.6 million in proceeds from sales of shares of our class a common stock and the common stock of atc mexico pursuant to our stock option and stock purchase plans .

financing activities during the year ended december 31 , 2004 , we took several actions to increase our financial flexibility and reduce our interest costs .
new credit facility .
in may 2004 , we refinanced our previous credit facility with a new $ 1.1 billion senior secured credit facility .

at closing , we received $ 685.5 million of net proceeds from the borrowings under the new facility , after deducting related expenses and fees , approximately $ 670.0 million of which we used to repay principal and interest under the previous credit facility .
we used the remaining net proceeds of $ 15.5 million for general corporate purposes , including the repurchase of other outstanding debt securities .

the new credit facility consists of the following : 2022 $ 400.0 million in undrawn revolving loan commitments , against which approximately $ 19.3 million of undrawn letters of credit were outstanding at december 31 , 2004 , maturing on february 28 , 2011 ; 2022 a $ 300.0 million term loan a , which is fully drawn , maturing on february 28 , 2011 ; and 2022 a $ 398.0 million term loan b , which is fully drawn , maturing on august 31 , 2011 .

the new credit facility extends the previous credit facility maturity dates from 2007 to 2011 for a majority of the borrowings outstanding , subject to earlier maturity upon the occurrence of certain events described below , and allows us to use credit facility borrowings and internally generated funds to repurchase other indebtedness without additional lender approval .
the new credit facility is guaranteed by us and is secured by a pledge of substantially all of our assets .

the maturity date for term loan a and any outstanding revolving loans will be accelerated to august 15 , 2008 , and the maturity date for term loan b will be accelerated to october 31 , 2008 , if ( 1 ) on or prior to august 1 , 2008 , our 93 20448% ( 20448 % ) senior notes have not been ( a ) refinanced with parent company indebtedness having a maturity date of february 28 , 2012 or later or with loans under the new credit facility , or ( b ) repaid , prepaid , redeemed , repurchased or otherwise retired ,

, redeemed , repurchased or otherwise retired , and ( 2 ) our consolidated leverage ratio ( total parent company debt to annualized operating cash flow ) at june 30 , 2008 is greater than 4.50 to 1.00 .

if this were to occur , the payments due in 2008 for term loan a and term loan b would be $ 225.0 million and $ 386.0 million , respectively .
note offerings .
during 2004 , we raised approximately $ 1.1 billion in net proceeds from the sale of debt securities through institutional private placements as follows ( in millions ) : debt security date of offering principal amount approximate net proceeds .

2022 7.50% ( 7.50 % ) senior notes offering .
in february 2004 , we sold $ 225.0 million principal amount of our 7.50% ( 7.50 % ) senior notes due 2012 through an institutional private placement .
the 7.50% ( 7.50 % ) senior notes mature on may 1 , 2012 , and interest is payable semiannually in arrears on may 1 and november 1 of each year.

 |
| table | debt security                                         | date of offering | principal amount | approximate net proceeds
----------------------------------------------------- | ---------------- | ---------------- | ------------------------
7.50% ( 7.50 % ) senior notes due 2012                | february 2004    | $ 225.0          | $ 221.7
3.00% ( 3.00 % ) convertible notes due august 15 2012 | august 2004      | 345.0            | 335.9
7.125% ( 7.125 % ) senior notes due 2012              | october 2004     | 300.0            | 292.8
7.125% ( 7.125 % ) senior notes due 2012              | december 2004    | 200.0            | 199.8
total                                                 |                  | $ 1070.0         | $ 1050.2 |


| _id | dd4c62fb2 |
| title |  |
| text | contractual commitments we have contractual obligations and commitments in the form of capital leases , operating leases , debt obligations , purchase commitments , and certain other liabilities .
we intend to satisfy these obligations through the use of cash flow from operations .
the following table summarizes the expected cash outflow to satisfy our contractual obligations and commitments as of december 31 , 2010 ( in millions ) : .

our capital lease obligations relate primarily to leases on aircraft .
capital leases , operating leases , and purchase commitments , as well as our debt principal obligations , are discussed further in note 7 to our consolidated financial statements .
the amount of interest on our debt was calculated as the contractual interest payments due on our fixed-rate debt , in addition to interest on variable rate debt that was calculated based on interest rates as of december 31 , 2010 .

the calculations of debt interest take into account the effect of interest rate swap agreements .
for debt denominated in a foreign currency , the u.s .
dollar equivalent principal amount of the debt at the end of the year was used as the basis to calculate future interest payments .
purchase commitments represent contractual agreements to purchase goods or services that are legally binding , the largest of which are orders for aircraft , engines , and parts .

as of december 31 , 2010 , we have firm commitments to purchase 20 boeing 767-300er freighters to be delivered between 2011 and 2013 , and two boeing 747-400f aircraft scheduled for delivery during 2011 .
these aircraft purchase orders will provide for the replacement of existing capacity and anticipated future growth .
pension fundings represent the anticipated required cash contributions that will be made to our qualified pension plans .

these contributions include those to the ups ibt pension plan , which was established upon ratification of the national master agreement with the teamsters , as well as the ups pension plan .
these plans are discussed further in note 5 to the consolidated financial statements .

the pension funding requirements were estimated under the provisions of the pension protection act of 2006 and the employee retirement income security act of 1974 , using discount rates , asset returns , and other assumptions appropriate for these plans .
to the extent that the funded status of these plans in future years differs from our current projections , the actual contributions made in future years could materially differ from the amounts shown in the table above .

additionally , we have not included minimum funding requirements beyond 2015 , because these projected contributions are not reasonably determinable .
we are not subject to any minimum funding requirement for cash contributions in 2011 in the ups retirement plan or ups pension plan .
the amount of any minimum funding requirement , as applicable , for these plans could change significantly in future periods , depending on many factors , including future plan asset returns and discount rates .

a sustained significant decline in the world equity markets , and the resulting impact on our pension assets and investment returns , could result in our domestic pension plans being subject to significantly higher minimum funding requirements .
such an outcome could have a material adverse impact on our financial position and cash flows in future periods .
the contractual payments due for 201cother liabilities 201d primarily include commitment payments related to our investment in certain partnerships .

the table above does not include approximately $ 284 million of liabilities for

 |
| table | commitment type      | 2011   | 2012   | 2013   | 2014   | 2015  | after 2016 | total
-------------------- | ------ | ------ | ------ | ------ | ----- | ---------- | -------
capital leases       | $ 18   | $ 19   | $ 19   | $ 20   | $ 21  | $ 112      | $ 209
operating leases     | 348    | 268    | 205    | 150    | 113   | 431        | 1515
debt principal       | 345    | 2014   | 1750   | 1000   | 100   | 7363       | 10558
debt interest        | 322    | 321    | 300    | 274    | 269   | 4940       | 6426
purchase commitments | 642    | 463    | 425    | 16     | 2014  | 2014       | 1546
pension fundings     | 1200   | 196    | 752    | 541    | 274   | 2014       | 2963
other liabilities    | 69     | 67     | 64     | 58     | 43    | 38         | 339
total                | $ 2944 | $ 1334 | $ 3515 | $ 2059 | $ 820 | $ 12884    | $ 23556 |


| _id | dd4c364c6 |
| title |  |
| text | agreements associated with the agency securitizations , most sale agreements do not provide for penalties or other remedies if we do not respond timely to investor indemnification or repurchase requests .
origination and sale of residential mortgages is an ongoing business activity and , accordingly , management continually assesses the need to recognize indemnification and repurchase liabilities pursuant to the associated investor sale agreements .

we establish indemnification and repurchase liabilities for estimated losses on sold first and second-lien mortgages and home equity loans/lines for which indemnification is expected to be provided or for loans that are expected to be repurchased .
for the first and second-lien mortgage sold portfolio , we have established an indemnification and repurchase liability pursuant to investor sale agreements based on claims made and our estimate of future claims on a loan by loan basis .

these relate primarily to loans originated during 2006-2008 .
for the home equity loans/lines sold portfolio , we have established indemnification and repurchase liabilities based upon this same methodology for loans sold during 2005-2007 .
indemnification and repurchase liabilities are initially recognized when loans are sold to investors and are subsequently evaluated by management .

initial recognition and subsequent adjustments to the indemnification and repurchase liability for the sold residential mortgage portfolio are recognized in residential mortgage revenue on the consolidated income statement .
since pnc is no longer engaged in the brokered home equity lending business , only subsequent adjustments are recognized to the home equity loans/lines indemnification and repurchase liability .

these adjustments are recognized in other noninterest income on the consolidated income statement .
management 2019s subsequent evaluation of these indemnification and repurchase liabilities is based upon trends in indemnification and repurchase requests , actual loss experience , risks in the underlying serviced loan portfolios , and current economic conditions .
as part of its evaluation , management considers estimated loss projections over the life of the subject loan portfolio .

at december 31 , 2011 and december 31 , 2010 , the total indemnification and repurchase liability for estimated losses on indemnification and repurchase claims totaled $ 130 million and $ 294 million , respectively , and was included in other liabilities on the consolidated balance sheet .
an analysis of the changes in this liability during 2011 and 2010 follows : analysis of indemnification and repurchase liability for asserted claims and unasserted claims .

( a ) repurchase obligation associated with sold loan portfolios of $ 121.4 billion and $ 139.8 billion at december 31 , 2011 and december 31 , 2010 , respectively .
( b ) repurchase obligation associated with sold loan portfolios of $ 4.5 billion and $ 6.5 billion at december 31 , 2011 and december 31 , 2010 , respectively .
pnc is no longer engaged in the brokered home equity lending business , which was acquired with national city .

management believes our indemnification and repurchase liabilities appropriately reflect the estimated probable losses on investor indemnification and repurchase claims at december 31 , 2011 and 2010 .

while management seeks to obtain all relevant information in estimating the indemnification and repurchase liability , the estimation process is inherently uncertain and imprecise and , accordingly , it is reasonably possible that future indemnification and repurchase losses could be more or less than our established liability .

factors that could affect our estimate include the volume of valid claims driven by investor strategies and behavior , our ability to successfully negotiate claims with investors , housing prices , and other economic conditions .
at december 31 , 2011 , we estimate that it is reasonably possible that we could incur additional losses in excess of our indemnification and repurchase liability of up to $ 85 million .

this estimate of potential additional losses in excess of our liability is based on assumed higher investor demands , lower claim rescissions , and lower home prices than our current assumptions .
reinsurance agreements we have two wholly-owned captive insurance subsidiaries which provide reinsurance to third-party insurers related to insurance sold to our customers .

these subsidiaries enter into various types of reinsurance agreements with third-party insurers where the subsidiary assumes the risk of loss through either an excess of loss or quota share agreement up to 100% ( 100 % ) reinsurance .
in excess of loss agreements , these subsidiaries assume the risk of loss for an excess layer of coverage up to specified limits , once a defined first loss percentage is met .

in quota share agreements , the subsidiaries and third-party insurers share the responsibility for payment of all claims .
these subsidiaries provide reinsurance for accidental death & dismemberment , credit life , accident & health , lender placed 200 the pnc financial services group , inc .
2013 form 10-k

 |
| table | in millions                                  | 2011 residential mortgages ( a ) | 2011 home equity loans/lines ( b ) | 2011 total   | 2011 residential mortgages ( a ) | 2011 home equity loans/lines ( b ) | total
-------------------------------------------- | -------------------------------- | ---------------------------------- | ------------ | -------------------------------- | ---------------------------------- | ------------
january 1                                    | $ 144                            | $ 150                              | $ 294        | $ 229                            | $ 41                               | $ 270
reserve adjustments net                      | 102                              | 4                                  | 106          | 120                              | 144                                | 264
losses 2013 loan repurchases and settlements | -163 ( 163 )                     | -107 ( 107 )                       | -270 ( 270 ) | -205 ( 205 )                     | -35 ( 35 )                         | -240 ( 240 )
december 31                                  | $ 83                             | $ 47                               | $ 130        | $ 144                            | $ 150                              | $ 294 |


| _id | dd4bbb370 |
| title |  |
| text | the fair value of performance awards is calculated using the market value of a share of snap-on 2019s common stock on the date of grant .
the weighted-average grant date fair value of performance awards granted during 2013 , 2012 and 2011 was $ 77.33 , $ 60.00 and $ 55.97 , respectively .
vested performance share units approximated 148000 shares as of 2013 year end , 213000 shares as of 2012 year end and 54208 shares as of 2011 year end .

performance share units of 213459 shares were paid out in 2013 and 53990 shares were paid out in 2012 ; no performance share units were paid out in 2011 .
earned performance share units are generally paid out following the conclusion of the applicable performance period upon approval by the organization and executive compensation committee of the company 2019s board of directors ( the 201cboard 201d ) .

based on the company 2019s 2013 performance , 84413 rsus granted in 2013 were earned ; assuming continued employment , these rsus will vest at the end of fiscal 2015 .
based on the company 2019s 2012 performance , 95047 rsus granted in 2012 were earned ; assuming continued employment , these rsus will vest at the end of fiscal 2014 .
based on the company 2019s 2011 performance , 159970 rsus granted in 2011 were earned ; these rsus vested as of fiscal 2013 year end and were paid out shortly thereafter .

as a result of employee retirements , a total of 1614 of the rsus earned in 2012 and 2011 vested pursuant to the terms of the related award agreements and the underlying shares were paid out in the third quarter of 2013 .
the changes to the company 2019s non-vested performance awards in 2013 are as follows : shares ( in thousands ) fair value price per share* .

* weighted-average as of 2013 year end there was approximately $ 12.9 million of unrecognized compensation cost related to non-vested performance awards that is expected to be recognized as a charge to earnings over a weighted-average period of 1.6 years .
stock appreciation rights ( 201csars 201d ) the company also issues cash-settled and stock-settled sars to certain key non-u.s .
employees .

employees .
sars have a contractual term of ten years and vest ratably on the first , second and third anniversaries of the date of grant .
sars are granted with an exercise price equal to the market value of a share of snap-on 2019s common stock on the date of grant .
cash-settled sars provide for the cash payment of the excess of the fair market value of snap-on 2019s common stock price on the date of exercise over the grant price .

cash-settled sars have no effect on dilutive shares or shares outstanding as any appreciation of snap-on 2019s common stock value over the grant price is paid in cash and not in common stock .
in 2013 , the company began issuing stock-settled sars that are accounted for as equity instruments and provide for the issuance of snap-on common stock equal to the amount by which the company 2019s stock has appreciated over the exercise price .

stock-settled sars have an effect on dilutive shares and shares outstanding as any appreciation of snap-on 2019s common stock value over the exercise price will be settled in shares of common stock .
2013 annual report 101

 |
| table | | shares ( in thousands ) | fair valueprice pershare*
-------------------------------------------------- | ----------------------- | -------------------------
non-vested performance awards at beginning of year | 509                     | $ 59.36
granted                                            | 180                     | 77.33
vested                                             | -306 ( 306 )            | 58.94
cancellations                                      | -2 ( 2 )                | 69.23
non-vested performance awards at end of year       | 381                     | 68.13 |


| _id | dd4c558b2 |
| title |  |
| text | loan activity .
from time to time , we make loans to owners of hotels that we operate or franchise .
loan collections , net of loan advances , amounted to $ 35 million in 2018 , compared to net collections of $ 94 million in 2017 .
at year-end 2018 , we had $ 131 million of senior , mezzanine , and other loans outstanding , compared to $ 149 million outstanding at year-end 2017 .
equity method investments .

equity method investments .
cash outflows of $ 72 million in 2018 , $ 62 million in 2017 , and $ 13 million in 2016 for equity method investments primarily reflect our investments in several joint ventures .
financing activities cash flows debt .

financing activities cash flows debt .
debt increased by $ 1109 million in 2018 , to $ 9347 million at year-end 2018 from $ 8238 million at year-end 2017 , primarily due to the issuance of our series x , y , z , and aa notes , partially offset by the maturity of our series s notes ( $ 330 million ) and lower outstanding commercial paper ( $ 126 million ) .
see footnote 10 .
long-term debt for additional information on the debt issuances .

our financial objectives include diversifying our financing sources , optimizing the mix and maturity of our long-term debt , and reducing our working capital .
at year-end 2018 , our long-term debt had a weighted average interest rate of 3.3 percent and a weighted average maturity of approximately 4.8 years .
the ratio of our fixed-rate long-term debt to our total long-term debt was 0.7 to 1.0 at year-end 2018 .

see the 201ccash requirements and our credit facility , 201d caption in this 201cliquidity and capital resources 201d section for more information on our credit facility .
share repurchases .
we purchased 21.5 million shares of our common stock in 2018 at an average price of $ 130.67 per share , 29.2 million shares in 2017 at an average price of $ 103.66 per share , and 8.0 million shares in 2016 at an average price of $ 71.55 per share .

at year-end 2018 , 10.7 million shares remained available for repurchase under board approved authorizations , and on february 15 , 2019 , our board of directors further increased our common stock repurchase authorization by 25 million shares .
for additional information , see 201cfourth quarter 2018 issuer purchases of equity securities 201d in part ii , item 5 .
dividends .

our board of directors declared the following quarterly cash dividends in 2018 : ( 1 ) $ 0.33 per share declared on february 9 , 2018 and paid march 30 , 2018 to shareholders of record on february 23 , 2018 , ( 2 ) $ 0.41 per share declared on may 4 , 2018 and paid june 29 , 2018 to shareholders of record on may 18 , 2018 , ( 3 ) $ 0.41 per share declared on august 9 , 2018 and paid september 28 , 2018 to shareholders of record on august 23 , 2018 , and ( 4 ) $ 0.41 per share declared on november 8 , 2018

) $ 0.41 per share declared on november 8 , 2018 and paid december 31 , 2018 to shareholders of record on november 21 , 2018 .

our board of directors declared a cash dividend of $ 0.41 per share on february 15 , 2019 , payable on march 29 , 2019 to shareholders of record on march 1 , 2019 .
contractual obligations and off-balance sheet arrangements contractual obligations the following table summarizes our contractual obligations at year-end 2018: .

( 1 ) includes principal as well as interest payments .
the preceding table does not reflect transition tax payments totaling $ 507 million as a result of the 2017 tax act .
in addition , the table does not reflect unrecognized tax benefits at year-end 2018 of $ 559 million .
in addition to the purchase obligations noted in the preceding table , in the normal course of business we enter into purchase commitments to manage the daily operating needs of the hotels that we manage .

since we are reimbursed from the cash flows of the hotels , these obligations have minimal impact on our net income and cash flow.

 |
| table | ( $ in millions )                                 | total   | payments due by period less than1 year | payments due by period 1-3 years | payments due by period 3-5 years | payments due by period after5 years
------------------------------------------------- | ------- | -------------------------------------- | -------------------------------- | -------------------------------- | -----------------------------------
debt ( 1 )                                        | $ 10483 | $ 1074                                 | $ 4392                           | $ 2054                           | $ 2963
capital lease obligations ( 1 )                   | 230     | 13                                     | 26                               | 26                               | 165
operating leases where we are the primary obligor | 2073    | 171                                    | 315                              | 292                              | 1295
purchase obligations                              | 286     | 153                                    | 116                              | 17                               | 2014
other noncurrent liabilities                      | 136     | 3                                      | 28                               | 20                               | 85
total contractual obligations                     | $ 13208 | $ 1414                                 | $ 4877                           | $ 2409                           | $ 4508 |


| _id | dd4be0cba |
| title |  |
| text | unconditional purchase obligations approximately $ 390 of our long-term unconditional purchase obligations relate to feedstock supply for numerous hyco ( hydrogen , carbon monoxide , and syngas ) facilities .
the price of feedstock supply is principally related to the price of natural gas .
however , long-term take-or-pay sales contracts to hyco customers are generally matched to the term of the feedstock supply obligations and provide recovery of price increases in the feedstock supply .

due to the matching of most long-term feedstock supply obligations to customer sales contracts , we do not believe these purchase obligations would have a material effect on our financial condition or results of operations .
refer to note 17 , commitments and contingencies , to the consolidated financial statements for additional information on our unconditional purchase obligations .

the unconditional purchase obligations also include other product supply and purchase commitments and electric power and natural gas supply purchase obligations , which are primarily pass-through contracts with our customers .
in addition , purchase commitments to spend approximately $ 540 for additional plant and equipment are included in the unconditional purchase obligations in 2016 .

we also purchase materials , energy , capital equipment , supplies , and services as part of the ordinary course of business under arrangements that are not unconditional purchase obligations .
the majority of such purchases are for raw materials and energy , which are obtained under requirements-type contracts at market prices .

obligation for future contribution to an equity affiliate on 19 april 2015 , a joint venture between air products and acwa holding entered into a 20-year oxygen and nitrogen supply agreement to supply saudi aramco 2019s oil refinery and power plant being built in jazan , saudi arabia .
air products owns 25% ( 25 % ) of the joint venture and guarantees the repayment of its share of an equity bridge loan .
in total , we expect to invest approximately $ 100 in this joint venture .

as of 30 september 2015 , we recorded a noncurrent liability of $ 67.5 for our obligation to make future equity contributions based on advances received by the joint venture under the loan .
income tax liabilities noncurrent deferred income tax liabilities as of 30 september 2015 were $ 903.3 .
tax liabilities related to unrecognized tax benefits as of 30 september 2015 were $ 97.5 .

these tax liabilities were excluded from the contractual obligations table , as it is impractical to determine a cash impact by year given that payments will vary according to changes in tax laws , tax rates , and our operating results .
in addition , there are uncertainties in timing of the effective settlement of our uncertain tax positions with respective taxing authorities .
refer to note 23 , income taxes , to the consolidated financial statements for additional information .

pension benefits the company sponsors defined benefit pension plans and defined contribution plans that cover a substantial portion of its worldwide employees .
the principal defined benefit pension plans 2014the u.s .
salaried pension plan and the u.k .
pension plan 2014were closed to new participants in 2005 and were replaced with defined contribution plans .
over the long run , the shift to defined contribution plans is expected to reduce volatility of both plan expense and contributions .

the fair market value of plan assets for our defined benefit pension plans as of the 30 september 2015 measurement date decreased to $ 3916.4 from $ 4114.6 at the end of fiscal year 2014 .
the projected benefit obligation for these plans was $ 4787.8 and $ 4738.6 at the end of the fiscal years 2015 and 2014 , respectively .
refer to note 16 , retirement benefits , to the consolidated financial statements for comprehensive and detailed disclosures on our postretirement benefits .
pension expense .

 |
| table | | 2015           | 2014           | 2013
-------------------------------------------------------------------- | -------------- | -------------- | --------------
pension expense                                                      | $ 135.6        | $ 135.9        | $ 169.7
special terminations settlements and curtailments ( included above ) | 35.2           | 5.8            | 19.8
weighted average discount rate                                       | 4.0% ( 4.0 % ) | 4.6% ( 4.6 % ) | 4.0% ( 4.0 % )
weighted average expected rate of return on plan assets              | 7.4% ( 7.4 % ) | 7.7% ( 7.7 % ) | 7.7% ( 7.7 % )
weighted average expected rate of compensation increase              | 3.5% ( 3.5 % ) | 3.9% ( 3.9 % ) | 3.8% ( 3.8 % ) |


| _id | dd4b9db40 |
| title |  |
| text | abiomed , inc .
and subsidiaries notes to consolidated financial statements 2014 ( continued ) evidence of an arrangement exists , ( 2 ) delivery has occurred or services have been rendered , ( 3 ) the seller 2019s price to the buyer is fixed or determinable , and ( 4 ) collectibility is reasonably assured .
further , sab 104 requires that both title and the risks and rewards of ownership be transferred to the buyer before revenue can be recognized .

in addition to sab 104 , we follow the guidance of eitf 00-21 , revenue arrangements with multiple deliverables .
we derive our revenues primarily from product sales , including maintenance service agreements .
the great majority of our product revenues are derived from shipments of our ab5000 and bvs 5000 product lines to fulfill customer orders for a specified number of consoles and/or blood pumps for a specified price .
we recognize revenues and record costs related to such sales upon product shipment .

maintenance and service support contract revenues are recognized ratably over the term of the service contracts based upon the elapsed term of the service contract .
government-sponsored research and development contracts and grants generally provide for payment on a cost-plus-fixed-fee basis .
revenues from these contracts and grants are recognized as work is performed , provided the government has appropriated sufficient funds for the work .

under contracts in which the company elects to spend significantly more on the development project during the term of the contract than the total contract amount , the company prospectively recognizes revenue on such contracts ratably over the term of the contract as it incurs related research and development costs , provided the government has appropriated sufficient funds for the work .
( d ) translation of foreign currencies all assets and liabilities of the company 2019s non-u.s .

subsidiaries are translated at year-end exchange rates , and revenues and expenses are translated at average exchange rates for the year in accordance with sfas no .
52 , foreign currency translation .
resulting translation adjustments are reflected in the accumulated other comprehensive loss component of shareholders 2019 equity .
currency transaction gains and losses are included in the accompanying statement of income and are not material for the three years presented .

( e ) warranties the company routinely accrues for estimated future warranty costs on its product sales at the time of sale .
our products are subject to rigorous regulation and quality standards .
warranty costs are included in cost of product revenues within the consolidated statements of operations .
the following table summarizes the activities in the warranty reserve for the two fiscal years ended march 31 , 2006 ( in thousands ) .

 |
| table | | 2005         | 2006
-------------------------------------- | ------------ | ------------
balance at the beginning of the year   | $ 245        | $ 231
accrual for warranties                 | 198          | 193
warranty expense incurred for the year | -212 ( 212 ) | -257 ( 257 )
balance at the end of the year         | $ 231        | $ 167 |


| _id | dd4c16450 |
| title |  |
| text | notes to consolidated financial statements 4 .
the sum of the quarters 2019 earnings per common share may not equal the annual amounts due to the averaging effect of the number of shares and share equivalents throughout the year .
5 .
during the fourth quarter of 2016 , net revenues included losses of approximately $ 60 million on sales and markdowns of legacy limited partnership investments in third-party-sponsored funds within the invest- ment management business segment .

the fourth quarter of 2016 also included a $ 70 million provision within the wealth management busi- ness segment related to certain brokerage service reporting activities .
employee share-based awards .

24 .
subsequent events the firm has evaluated subsequent events for adjustment to or disclosure in the financial statements through the date of this report and has not identified any recordable or disclos- able events not otherwise reported in these financial state- ments or the notes thereto .
175 december 2017 form 10-k

 |
| table | $ in millions        | 2017 quarter first | 2017 quarter second | 2017 quarter third | 2017 quarter fourth
-------------------- | ------------------ | ------------------- | ------------------ | -------------------
discrete tax benefit | $ 112              | $ 16                | $ 11               | $ 16 |