| _id | dd4ba0660 |
| title |  |
| text | 2000 non-employee director stock option plan ( the 201cdirector stock option plan 201d ) , and the global payments inc .
2011 incentive plan ( the 201c2011 plan 201d ) ( collectively , the 201cplans 201d ) .
we made no further grants under the 2000 plan after the 2005 plan was effective , and the director stock option plan expired by its terms on february 1 , 2011 .
we will make no future grants under the 2000 plan , the 2005 plan or the director stock option plan .

the 2011 plan permits grants of equity to employees , officers , directors and consultants .
a total of 14.0 million shares of our common stock was reserved and made available for issuance pursuant to awards granted under the 2011 plan .
the following table summarizes share-based compensation expense and the related income tax benefit recognized for our share-based awards and stock options ( in thousands ) : 2016 2015 2014 ( in thousands ) .

we grant various share-based awards pursuant to the plans under what we refer to as our 201clong-term incentive plan . 201d the awards are held in escrow and released upon the grantee 2019s satisfaction of conditions of the award certificate .
restricted stock restricted stock awards vest over a period of time , provided , however , that if the grantee is not employed by us on the vesting date , the shares are forfeited .
restricted shares cannot be sold or transferred until they have vested .

restricted stock granted before fiscal 2015 vests in equal installments on each of the first four anniversaries of the grant date .
restricted stock granted during fiscal 2015 and thereafter either vest in equal installments on each of the first three anniversaries of the grant date or cliff vest at the end of a three-year service period .

the grant date fair value of restricted stock , which is based on the quoted market value of our common stock at the closing of the award date , is recognized as share-based compensation expense on a straight-line basis over the vesting period .
performance units certain of our executives have been granted performance units under our long-term incentive plan .

performance units are performance-based restricted stock units that , after a performance period , convert into common shares , which may be restricted .
the number of shares is dependent upon the achievement of certain performance measures during the performance period .
the target number of performance units and any market-based performance measures ( 201cat threshold , 201d 201ctarget , 201d and 201cmaximum 201d ) are set by the compensation committee of our board of directors .

performance units are converted only after the compensation committee certifies performance based on pre-established goals .
the performance units granted to certain executives in fiscal 2014 were based on a one-year performance period .
after the compensation committee certified the performance results , 25% ( 25 % ) of the performance units converted to unrestricted shares .

the remaining 75% ( 75 % ) converted to restricted shares that vest in equal installments on each of the first three anniversaries of the conversion date .
the performance units granted to certain executives during fiscal 2015 and fiscal 2016 were based on a three-year performance period .
after the compensation committee certifies the performance results for the three-year period , performance units earned will convert into unrestricted common stock .

the compensation committee may set a range of possible performance-based outcomes for performance units .
depending on the achievement of the performance measures , the grantee may earn up to 200% ( 200 % ) of the target number of shares .

for awards with only performance conditions , we recognize compensation expense on a straight-line basis over the performance period using the grant date fair value of the award , which is based on the number of shares expected to be earned according to the level of achievement of performance goals .

if the number of shares expected to be earned were to change at any time during the performance period , we would make a cumulative adjustment to share-based compensation expense based on the revised number of shares expected to be earned .
global payments inc .
| 2016 form 10-k annual report 2013 83

 |
| table | | 2016    | 2015 ( in thousands ) | 2014
-------------------------------- | ------- | --------------------- | -------
share-based compensation expense | $ 30809 | $ 21056               | $ 29793
income tax benefit               | $ 9879  | $ 6907                | $ 7126 |


| _id | dd4b980aa |
| title |  |
| text | "three factor formula" ) .
the consolidated financial statements include northrop grumman management and support services allocations totaling $ 32 million for the year ended december 31 , 2011 .
shared services and infrastructure costs - this category includes costs for functions such as information technology support , systems maintenance , telecommunications , procurement and other shared services while hii was a subsidiary of northrop grumman .

these costs were generally allocated to the company using the three factor formula or based on usage .
the consolidated financial statements reflect shared services and infrastructure costs allocations totaling $ 80 million for the year ended december 31 , 2011 .
northrop grumman-provided benefits - this category includes costs for group medical , dental and vision insurance , 401 ( k ) savings plan , pension and postretirement benefits , incentive compensation and other benefits .

these costs were generally allocated to the company based on specific identification of the benefits provided to company employees participating in these benefit plans .
the consolidated financial statements include northrop grumman- provided benefits allocations totaling $ 169 million for the year ended december 31 , 2011 .
management believes that the methods of allocating these costs are reasonable , consistent with past practices , and in conformity with cost allocation requirements of cas or the far .

related party sales and cost of sales prior to the spin-off , hii purchased and sold certain products and services from and to other northrop grumman entities .
purchases of products and services from these affiliated entities , which were recorded at cost , were $ 44 million for the year ended december 31 , 2011 .
sales of products and services to these entities were $ 1 million for the year ended december 31 , 2011 .

former parent's equity in unit transactions between hii and northrop grumman prior to the spin-off have been included in the consolidated financial statements and were effectively settled for cash at the time the transaction was recorded .
the net effect of the settlement of these transactions is reflected as former parent's equity in unit in the consolidated statement of changes in equity .
21 .

21 .
unaudited selected quarterly data unaudited quarterly financial results for the years ended december 31 , 2013 and 2012 , are set forth in the following tables: .

 |
| table | ( $ in millions except per share amounts ) | year ended december 31 2013 1st qtr | year ended december 31 2013 2nd qtr | year ended december 31 2013 3rd qtr | year ended december 31 2013 4th qtr
------------------------------------------ | ----------------------------------- | ----------------------------------- | ----------------------------------- | -----------------------------------
sales and service revenues                 | $ 1562                              | $ 1683                              | $ 1637                              | $ 1938
operating income ( loss )                  | 95                                  | 116                                 | 127                                 | 174
earnings ( loss ) before income taxes      | 65                                  | 87                                  | 99                                  | 143
net earnings ( loss )                      | 44                                  | 57                                  | 69                                  | 91
dividends declared per share               | $ 0.10                              | $ 0.10                              | $ 0.10                              | $ 0.20
basic earnings ( loss ) per share          | $ 0.88                              | $ 1.14                              | $ 1.38                              | $ 1.86
diluted earnings ( loss ) per share        | $ 0.87                              | $ 1.12                              | $ 1.36                              | $ 1.82 |


| _id | dd4bf30e0 |
| title |  |
| text | mfc 2019s operating profit for 2013 increased $ 175 million , or 14% ( 14 % ) , compared to 2012 .

the increase was primarily attributable to higher operating profit of approximately $ 85 million for air and missile defense programs ( thaad and pac-3 ) due to increased risk retirements and volume ; about $ 85 million for fire control programs ( sniper ae , lantirn ae and apache ) due to increased risk retirements and higher volume ; and approximately $ 75 million for tactical missile programs ( hellfire and various programs ) due to increased risk retirements .

the increases were partially offset by lower operating profit of about $ 45 million for the resolution of contractual matters in the second quarter of 2012 ; and approximately $ 15 million for various technical services programs due to lower volume partially offset by increased risk retirements .
adjustments not related to volume , including net profit booking rate adjustments and other matters , were approximately $ 100 million higher for 2013 compared to 2012 .

2012 compared to 2011 mfc 2019s net sales for 2012 were comparable to 2011 .
net sales decreased approximately $ 130 million due to lower volume and risk retirements on various services programs , and about $ 60 million due to lower volume from fire control systems programs ( primarily sniper ae ; lantirn ae ; and apache ) .

the decreases largely were offset by higher net sales of approximately $ 95 million due to higher volume from tactical missile programs ( primarily javelin and hellfire ) and approximately $ 80 million for air and missile defense programs ( primarily pac-3 and thaad ) .
mfc 2019s operating profit for 2012 increased $ 187 million , or 17% ( 17 % ) , compared to 2011 .

the increase was attributable to higher risk retirements and volume of about $ 95 million from tactical missile programs ( primarily javelin and hellfire ) ; increased risk retirements and volume of approximately $ 60 million for air and missile defense programs ( primarily thaad and pac-3 ) ; and about $ 45 million from a resolution of contractual matters .
partially offsetting these increases was lower risk retirements and volume on various programs , including $ 25 million for services programs .

adjustments not related to volume , including net profit booking rate adjustments and other matters described above , were approximately $ 145 million higher for 2012 compared to 2011 .
backlog backlog increased in 2013 compared to 2012 mainly due to higher orders on the thaad program and lower sales volume compared to new orders on certain fire control systems programs in 2013 , partially offset by lower orders on technical services programs and certain tactical missile programs .

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 .

trends we expect mfc 2019s net sales to be flat to slightly down in 2014 compared to 2013 , primarily due to a decrease in net sales on technical services programs partially offset by an increase in net sales from missiles and fire control programs .
operating profit is expected to decrease in the high single digit percentage range , driven by a reduction in expected risk retirements in 2014 .
accordingly , operating profit margin is expected to slightly decline from 2013 .

mission systems and training our mst business segment provides ship and submarine mission and combat systems ; mission systems and sensors for rotary and fixed-wing aircraft ; sea and land-based missile defense systems ; radar systems ; littoral combat ships ; simulation and training services ; and unmanned systems and technologies .
mst 2019s major programs include aegis combat system ( aegis ) , lcs , mh-60 , tpq-53 radar system , and mk-41 vertical launching system ( vls ) .

mst 2019s operating results included the following ( in millions ) : .

2013 compared to 2012 mst 2019s net sales for 2013 decreased $ 426 million , or 6% ( 6 % ) , compared to 2012 .
the decrease was primarily attributable to lower net sales of approximately $ 275 million for various ship and aviation systems programs due to lower volume

 |
| table | | 2013             | 2012           | 2011
------------------- | ---------------- | -------------- | --------------
net sales           | $ 7153           | $ 7579         | $ 7132
operating profit    | 905              | 737            | 645
operating margins   | 12.7% ( 12.7 % ) | 9.7% ( 9.7 % ) | 9.0% ( 9.0 % )
backlog at year-end | 10800            | 10700          | 10500 |


| _id | dd4bb416a |
| title |  |
| text | entergy gulf states , inc .
management's financial discussion and analysis .

the volume/weather variance resulted primarily from an increase of 1179 gwh in electricity usage in the industrial sector .
billed usage also increased a total of 291 gwh in the residential , commercial , and governmental sectors .
the increase in net wholesale revenue is primarily due to an increase in sales volume to municipal and co-op customers .

summer capacity charges variance is due to the amortization in 2003 of deferred capacity charges for the summer of 2001 compared to the absence of the amortization in 2004 .
the amortization of these capacity charges began in june 2002 and ended in may 2003 .
the price applied to unbilled sales variance resulted primarily from an increase in the fuel price applied to unbilled sales .
fuel recovery revenues represent an under-recovery of fuel charges that are recovered in base rates .

entergy gulf states recorded $ 22.6 million of provisions in 2004 for potential rate refunds .
these provisions are not included in the net revenue table above because they are more than offset by provisions recorded in 2003 .

gross operating revenues , fuel and purchased power expenses , and other regulatory credits gross operating revenues increased primarily due to an increase of $ 187.8 million in fuel cost recovery revenues as a result of higher fuel rates in both the louisiana and texas jurisdictions .
the increases in volume/weather and wholesale revenue , discussed above , also contributed to the increase .

fuel and purchased power expenses increased primarily due to : 2022 increased recovery of deferred fuel costs due to higher fuel rates ; 2022 increases in the market prices of natural gas , coal , and purchased power ; and 2022 an increase in electricity usage , discussed above .
other regulatory credits increased primarily due to the amortization in 2003 of deferred capacity charges for the summer of 2001 compared to the absence of amortization in 2004 .

the amortization of these charges began in june 2002 and ended in may 2003 .
2003 compared to 2002 net revenue , which is entergy gulf states' measure of gross margin , consists of operating revenues net of : 1 ) fuel , fuel-related , and purchased power expenses and 2 ) other regulatory credits .
following is an analysis of the change in net revenue comparing 2003 to 2002.

 |
| table | | ( in millions )
------------------------------- | ---------------
2003 net revenue                | $ 1110.1
volume/weather                  | 26.7
net wholesale revenue           | 13.0
summer capacity charges         | 5.5
price applied to unbilled sales | 4.8
fuel recovery revenues          | -14.2 ( 14.2 )
other                           | 3.9
2004 net revenue                | $ 1149.8 |


| _id | dd4b8a6b2 |
| title |  |
| text | table of contents research and development expense ( 201cr&d 201d ) r&d expense increased 34% ( 34 % ) or $ 449 million to $ 1.8 billion in 2010 compared to 2009 .
this increase was due primarily to an increase in headcount and related expenses in the current year to support expanded r&d activities .
also contributing to this increase in r&d expense in 2010 was the capitalization in 2009 of software development costs of $ 71 million related to mac os x snow leopard .

although total r&d expense increased 34% ( 34 % ) during 2010 , it declined as a percentage of net sales given the 52% ( 52 % ) year-over-year increase in net sales in 2010 .
the company continues to believe that focused investments in r&d are critical to its future growth and competitive position in the marketplace and are directly related to timely development of new and enhanced products that are central to the company 2019s core business strategy .

as such , the company expects to make further investments in r&d to remain competitive .
r&d expense increased 20% ( 20 % ) or $ 224 million to $ 1.3 billion in 2009 compared to 2008 .
this increase was due primarily to an increase in headcount in 2009 to support expanded r&d activities and higher stock-based compensation expenses .

additionally , $ 71 million of software development costs were capitalized related to mac os x snow leopard and excluded from r&d expense during 2009 , compared to $ 11 million of software development costs capitalized during 2008 .
although total r&d expense increased 20% ( 20 % ) during 2009 , it remained relatively flat as a percentage of net sales given the 14% ( 14 % ) increase in revenue in 2009 .

selling , general and administrative expense ( 201csg&a 201d ) sg&a expense increased $ 1.4 billion or 33% ( 33 % ) to $ 5.5 billion in 2010 compared to 2009 .
this increase was due primarily to the company 2019s continued expansion of its retail segment , higher spending on marketing and advertising programs , increased stock-based compensation expenses and variable costs associated with the overall growth of the company 2019s net sales .

sg&a expenses increased $ 388 million or 10% ( 10 % ) to $ 4.1 billion in 2009 compared to 2008 .
this increase was due primarily to the company 2019s continued expansion of its retail segment in both domestic and international markets , higher stock-based compensation expense and higher spending on marketing and advertising .

other income and expense other income and expense for the three years ended september 25 , 2010 , are as follows ( in millions ) : total other income and expense decreased $ 171 million or 52% ( 52 % ) to $ 155 million during 2010 compared to $ 326 million and $ 620 million in 2009 and 2008 , respectively .

the overall decrease in other income and expense is attributable to the significant declines in interest rates on a year- over-year basis , partially offset by the company 2019s higher cash , cash equivalents and marketable securities balances .
the weighted average interest rate earned by the company on its cash , cash equivalents and marketable securities was 0.75% ( 0.75 % ) , 1.43% ( 1.43 % ) and 3.44% ( 3.44 % ) during 2010 , 2009 and 2008 , respectively .

additionally the company incurred higher premium expenses on its foreign exchange option contracts , which further reduced the total other income and expense .
during 2010 , 2009 and 2008 , the company had no debt outstanding and accordingly did not incur any related interest expense .
provision for income taxes the company 2019s effective tax rates were 24% ( 24 % ) , 32% ( 32 % ) and 32% ( 32 % ) for 2010 , 2009 and 2008 , respectively .

the company 2019s effective rates for these periods differ from the statutory federal income tax rate of 35% ( 35 % ) due .

 |
| table | | 2010         | 2009       | 2008
------------------------------ | ------------ | ---------- | ----------
interest income                | $ 311        | $ 407      | $ 653
other income ( expense ) net   | -156 ( 156 ) | -81 ( 81 ) | -33 ( 33 )
total other income and expense | $ 155        | $ 326      | $ 620 |


| _id | dd497a3f4 |
| title |  |
| text | part ii item 5 2014market for registrant 2019s common equity and related stockholder matters market information .
the common stock of the company is currently traded on the new york stock exchange ( nyse ) under the symbol 2018 2018aes . 2019 2019 the following tables set forth the high and low sale prices for the common stock as reported by the nyse for the periods indicated .
price range of common stock .

holders .
as of march 3 , 2003 , there were 9663 record holders of the company 2019s common stock , par value $ 0.01 per share .
dividends .
under the terms of the company 2019s senior secured credit facilities entered into with a commercial bank syndicate , the company is not allowed to pay cash dividends .

in addition , the company is precluded from paying cash dividends on its common stock under the terms of a guaranty to the utility customer in connection with the aes thames project in the event certain net worth and liquidity tests of the company are not met .
the ability of the company 2019s project subsidiaries to declare and pay cash dividends to the company is subject to certain limitations in the project loans , governmental provisions and other agreements entered into by such project subsidiaries .

securities authorized for issuance under equity compensation plans .
see the information contained under the caption 2018 2018securities authorized for issuance under equity compensation plans 2019 2019 of the proxy statement for the annual meeting of stockholders of the registrant to be held on may 1 , 2003 , which information is incorporated herein by reference.

 |
| table | 2002 first quarter | high $ 17.84 | low $ 4.11 | 2001 first quarter | high $ 60.15 | low $ 41.30
------------------ | ------------ | ---------- | ------------------ | ------------ | -----------
second quarter     | 9.17         | 3.55       | second quarter     | 52.25        | 39.95
third quarter      | 4.61         | 1.56       | third quarter      | 44.50        | 12.00
fourth quarter     | 3.57         | 0.95       | fourth quarter     | 17.80        | 11.60 |


| _id | dd4bd06a8 |
| title |  |
| text | financial assurance we must provide financial assurance to governmental agencies and a variety of other entities under applicable environmental regulations relating to our landfill operations for capping , closure and post-closure costs , and related to our performance under certain collection , landfill and transfer station contracts .

we satisfy these financial assurance requirements by providing surety bonds , letters of credit , or insurance policies ( financial assurance instruments ) , or trust deposits , which are included in restricted cash and marketable securities and other assets in our consolidated balance sheets .
the amount of the financial assurance requirements for capping , closure and post-closure costs is determined by applicable state environmental regulations .

the financial assurance requirements for capping , closure and post-closure costs may be associated with a portion of the landfill or the entire landfill .
generally , states require a third-party engineering specialist to determine the estimated capping , closure and post-closure costs that are used to determine the required amount of financial assurance for a landfill .
the amount of financial assurance required can , and generally will , differ from the obligation determined and recorded under u.s .

gaap .
the amount of the financial assurance requirements related to contract performance varies by contract .
additionally , we must provide financial assurance for our insurance program and collateral for certain performance obligations .
we do not expect a material increase in financial assurance requirements during 2015 , although the mix of financial assurance instruments may change .

these financial assurance instruments are issued in the normal course of business and are not considered indebtedness .
because we currently have no liability for the financial assurance instruments , they are not reflected in our consolidated balance sheets ; however , we record capping , closure and post-closure liabilities and insurance liabilities as they are incurred .

the underlying obligations of the financial assurance instruments , in excess of those already reflected in our consolidated balance sheets , would be recorded if it is probable that we would be unable to fulfill our related obligations .
we do not expect this to occur .
off-balance sheet arrangements we have no off-balance sheet debt or similar obligations , other than operating leases and financial assurances , which are not classified as debt .

we have no transactions or obligations with related parties that are not disclosed , consolidated into or reflected in our reported financial position or results of operations .
we have not guaranteed any third-party debt .
free cash flow we define free cash flow , which is not a measure determined in accordance with u.s .

gaap , as cash provided by operating activities less purchases of property and equipment , plus proceeds from sales of property and equipment , as presented in our consolidated statements of cash flows .
the following table calculates our free cash flow for the years ended december 31 , 2014 , 2013 and 2012 ( in millions of dollars ) : .

for a discussion of the changes in the components of free cash flow , you should read our discussion regarding cash flows provided by operating activities and cash flows used in investing activities contained elsewhere in this management 2019s discussion and analysis of financial condition and results of operations.

 |
| table | | 2014             | 2013             | 2012
--------------------------------------------- | ---------------- | ---------------- | ----------------
cash provided by operating activities         | $ 1529.8         | $ 1548.2         | $ 1513.8
purchases of property and equipment           | -862.5 ( 862.5 ) | -880.8 ( 880.8 ) | -903.5 ( 903.5 )
proceeds from sales of property and equipment | 35.7             | 23.9             | 28.7
free cash flow                                | $ 703.0          | $ 691.3          | $ 639.0 |


| _id | dd4bd1d0a |
| title |  |
| text | mastercard incorporated notes to consolidated financial statements 2014 ( continued ) ( in thousands , except percent and per share data ) the following table summarizes expected benefit payments through 2018 including those payments expected to be paid from the company 2019s general assets .
since the majority of the benefit payments are made in the form of lump-sum distributions , actual benefit payments may differ from expected benefits payments. .

substantially all of the company 2019s u.s .
employees are eligible to participate in a defined contribution savings plan ( the 201csavings plan 201d ) sponsored by the company .
the savings plan allows employees to contribute a portion of their base compensation on a pre-tax and after-tax basis in accordance with specified guidelines .
the company matches a percentage of employees 2019 contributions up to certain limits .

in 2007 and prior years , the company could also contribute to the savings plan a discretionary profit sharing component linked to company performance during the prior year .
beginning in 2008 , the discretionary profit sharing amount related to 2007 company performance was paid directly to employees as a short-term cash incentive bonus rather than as a contribution to the savings plan .
in addition , the company has several defined contribution plans outside of the united states .

the company 2019s contribution expense related to all of its defined contribution plans was $ 35341 , $ 26996 and $ 43594 for 2008 , 2007 and 2006 , respectively .
the company had a value appreciation program ( 201cvap 201d ) , which was an incentive compensation plan established in 1995 .
annual awards were granted to vap participants from 1995 through 1998 , which entitled participants to the net appreciation on a portfolio of securities of members of mastercard international .

in 1999 , the vap was replaced by an executive incentive plan ( 201ceip 201d ) and the senior executive incentive plan ( 201cseip 201d ) ( together the 201ceip plans 201d ) ( see note 16 ( share based payments and other benefits ) ) .
contributions to the vap have been discontinued , all plan assets have been disbursed and no vap liability remained as of december 31 , 2008 .
the company 2019s liability related to the vap at december 31 , 2007 was $ 986 .

the expense ( benefit ) was $ ( 6 ) , $ ( 267 ) and $ 3406 for the years ended december 31 , 2008 , 2007 and 2006 , respectively .
note 12 .
postemployment and postretirement benefits the company maintains a postretirement plan ( the 201cpostretirement plan 201d ) providing health coverage and life insurance benefits for substantially all of its u.s .
employees and retirees hired before july 1 , 2007 .

the company amended the life insurance benefits under the postretirement plan effective january 1 , 2007 .
the impact , net of taxes , of this amendment was an increase of $ 1715 to accumulated other comprehensive income in 2007.

 |
| table | 2009           | $ 19766
-------------- | -------
2010           | 18182
2011           | 25518
2012           | 21029
2013           | 24578
2014 2013 2018 | 118709 |


| _id | dd4b95cc4 |
| title |  |
| text | performance graph the performance graph below shows the five-year cumulative total stockholder return on applied common stock during the period from october 25 , 2009 through october 26 , 2014 .
this is compared with the cumulative total return of the standard & poor 2019s 500 stock index and the rdg semiconductor composite index over the same period .

the comparison assumes $ 100 was invested on october 25 , 2009 in applied common stock and in each of the foregoing indices and assumes reinvestment of dividends , if any .
dollar amounts in the graph are rounded to the nearest whole dollar .
the performance shown in the graph represents past performance and should not be considered an indication of future performance .

comparison of 5 year cumulative total return* among applied materials , inc. , the s&p 500 index 201cs&p 201d is a registered trademark of standard & poor 2019s financial services llc , a subsidiary of the mcgraw-hill companies , inc. .

dividends during fiscal 2014 , applied 2019s board of directors declared four quarterly cash dividends of $ 0.10 per share each .
during fiscal 2013 , applied 2019s board of directors declared three quarterly cash dividends of $ 0.10 per share each and one quarterly cash dividend of $ 0.09 per share .
during fiscal 2012 , applied 2019s board of directors declared three quarterly cash dividends of $ 0.09 per share each and one quarterly cash dividend of $ 0.08 .

dividends declared during fiscal 2014 , 2013 and 2012 totaled $ 487 million , $ 469 million and $ 438 million , respectively .

applied currently anticipates that it will continue to pay cash dividends on a quarterly basis in the future , although the declaration and amount of any future cash dividends are at the discretion of the board of directors and will depend on applied 2019s financial condition , results of operations , capital requirements , business conditions and other factors , as well as a determination that cash dividends are in the best interests of applied 2019s stockholders .

$ 100 invested on 10/25/09 in stock or 10/31/09 in index , including reinvestment of dividends .
indexes calculated on month-end basis .
and the rdg semiconductor composite index 183145 97 102 121 132 10/25/09 10/31/10 10/30/11 10/28/12 10/27/13 10/26/14 applied materials , inc .
s&p 500 rdg semiconductor composite

 |
| table | | 10/25/2009 | 10/31/2010 | 10/30/2011 | 10/28/2012 | 10/27/2013 | 10/26/2014
--------------------------------- | ---------- | ---------- | ---------- | ---------- | ---------- | ----------
applied materials                 | 100.00     | 97.43      | 101.85     | 88.54      | 151.43     | 183.29
s&p 500 index                     | 100.00     | 116.52     | 125.94     | 145.09     | 184.52     | 216.39
rdg semiconductor composite index | 100.00     | 121.00     | 132.42     | 124.95     | 163.20     | 207.93 |


| _id | dd4bbe714 |
| title |  |
| text | recourse and repurchase obligations as discussed in note 3 loans sale and servicing activities and variable interest entities , pnc has sold commercial mortgage and residential mortgage loans directly or indirectly in securitizations and whole-loan sale transactions with continuing involvement .
one form of continuing involvement includes certain recourse and loan repurchase obligations associated with the transferred assets in these transactions .

commercial mortgage loan recourse obligations we originate , close and service certain multi-family commercial mortgage loans which are sold to fnma under fnma 2019s dus program .
we participated in a similar program with the fhlmc .
under these programs , we generally assume up to a one-third pari passu risk of loss on unpaid principal balances through a loss share arrangement .

at december 31 , 2011 and december 31 , 2010 , the unpaid principal balance outstanding of loans sold as a participant in these programs was $ 13.0 billion and $ 13.2 billion , respectively .
the potential maximum exposure under the loss share arrangements was $ 4.0 billion at both december 31 , 2011 and december 31 , 2010 .
we maintain a reserve for estimated losses based upon our exposure .

the reserve for losses under these programs totaled $ 47 million and $ 54 million as of december 31 , 2011 and december 31 , 2010 , respectively , and is included in other liabilities on our consolidated balance sheet .
if payment is required under these programs , we would not have a contractual interest in the collateral underlying the mortgage loans on which losses occurred , although the value of the collateral is taken into account in determining our share of such losses .

our exposure and activity associated with these recourse obligations are reported in the corporate & institutional banking segment .
analysis of commercial mortgage recourse obligations .

residential mortgage loan and home equity repurchase obligations while residential mortgage loans are sold on a non-recourse basis , we assume certain loan repurchase obligations associated with mortgage loans we have sold to investors .
these loan repurchase obligations primarily relate to situations where pnc is alleged to have breached certain origination covenants and representations and warranties made to purchasers of the loans in the respective purchase and sale agreements .

residential mortgage loans covered by these loan repurchase obligations include first and second-lien mortgage loans we have sold through agency securitizations , non-agency securitizations , and whole-loan sale transactions .
as discussed in note 3 in this report , agency securitizations consist of mortgage loans sale transactions with fnma , fhlmc , and gnma , while non-agency securitizations and whole-loan sale transactions consist of mortgage loans sale transactions with private investors .

our historical exposure and activity associated with agency securitization repurchase obligations has primarily been related to transactions with fnma and fhlmc , as indemnification and repurchase losses associated with fha and va-insured and uninsured loans pooled in gnma securitizations historically have been minimal .
repurchase obligation activity associated with residential mortgages is reported in the residential mortgage banking segment .

pnc 2019s repurchase obligations also include certain brokered home equity loans/lines that were sold to a limited number of private investors in the financial services industry by national city prior to our acquisition .
pnc is no longer engaged in the brokered home equity lending business , and our exposure under these loan repurchase obligations is limited to repurchases of whole-loans sold in these transactions .

repurchase activity associated with brokered home equity loans/lines is reported in the non-strategic assets portfolio segment .
loan covenants and representations and warranties are established through loan sale agreements with various investors to provide assurance that pnc has sold loans to investors of sufficient investment quality .

key aspects of such covenants and representations and warranties include the loan 2019s compliance with any applicable loan criteria established by the investor , including underwriting standards , delivery of all required loan documents to the investor or its designated party , sufficient collateral valuation , and the validity of the lien securing the loan .

as a result of alleged breaches of these contractual obligations , investors may request pnc to indemnify them against losses on certain loans or to repurchase loans .
these investor indemnification or repurchase claims are typically settled on an individual loan basis through make- whole payments or loan repurchases ; however , on occasion we may negotiate pooled settlements with investors .

indemnifications for loss or loan repurchases typically occur when , after review of the claim , we agree insufficient evidence exists to dispute the investor 2019s claim that a breach of a loan covenant and representation and warranty has occurred , such breach has not been cured , and the effect of such breach is deemed to have had a material and adverse effect on the value of the transferred loan .

depending on the sale agreement and upon proper notice from the investor , we typically respond to such indemnification and repurchase requests within 60 days , although final resolution of the claim may take a longer period of time .
with the exception of the sales the pnc financial services group , inc .
2013 form 10-k 199

 |
| table | in millions                                  | 2011     | 2010
-------------------------------------------- | -------- | ----------
january 1                                    | $ 54     | $ 71
reserve adjustments net                      | 1        | 9
losses 2013 loan repurchases and settlements | -8 ( 8 ) | -2 ( 2 )
loan sales                                   |          | -24 ( 24 )
december 31                                  | $ 47     | $ 54 |


| _id | dd4bdb3be |
| title |  |
| text | there is no goodwill assigned to reporting units within the balance sheet management segment .
the following table shows the amount of goodwill allocated to each of the reporting units and the fair value as a percentage of book value for the reporting units in the trading and investing segment ( dollars in millions ) : .

we also evaluate the remaining useful lives on intangible assets each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization .
other intangible assets have a weighted average remaining useful life of 13 years .
we did not recognize impairment on our other intangible assets in the periods presented .

effects if actual results differ if our estimates of fair value for the reporting units change due to changes in our business or other factors , we may determine that an impairment charge is necessary .
estimates of fair value are determined based on a complex model using estimated future cash flows and company comparisons .
if actual cash flows are less than estimated future cash flows used in the annual assessment , then goodwill would have to be tested for impairment .

the estimated fair value of the market making reporting unit as a percentage of book value was approximately 115% ( 115 % ) ; therefore , if actual cash flows are less than our estimated cash flows , goodwill impairment could occur in the market making reporting unit in the future .
these cash flows will be monitored closely to determine if a further evaluation of potential impairment is necessary so that impairment could be recognized in a timely manner .

in addition , following the review of order handling practices and pricing for order flow between e*trade securities llc and gi execution services , llc , our regulators may initiate investigations into our historical practices which could subject us to monetary penalties and cease-and-desist orders , which could also prompt claims by customers of e*trade securities llc .

any of these actions could materially and adversely affect our market making and trade execution businesses , which could impact future cash flows and could result in goodwill impairment .
intangible assets are amortized over their estimated useful lives .
if changes in the estimated underlying revenue occur , impairment or a change in the remaining life may need to be recognized .

estimates of effective tax rates , deferred taxes and valuation allowance description in preparing the consolidated financial statements , we calculate income tax expense ( benefit ) based on our interpretation of the tax laws in the various jurisdictions where we conduct business .

this requires us to estimate current tax obligations and the realizability of uncertain tax positions and to assess temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities .
these differences result in deferred tax assets and liabilities , the net amount of which we show as other assets or other liabilities on the consolidated balance sheet .
we must also assess the likelihood that each of the deferred tax assets will be realized .

to the extent we believe that realization is not more likely than not , we establish a valuation allowance .
when we establish a valuation allowance or increase this allowance in a reporting period , we generally record a corresponding tax expense in the consolidated statement of income ( loss ) .
conversely , to the extent circumstances indicate that a valuation allowance is no longer necessary , that portion of the valuation allowance is reversed , which generally reduces overall income tax expense .

at december 31 , 2012 we had net deferred tax assets of $ 1416.2 million , net of a valuation allowance ( on state , foreign country and charitable contribution deferred tax assets ) of $ 97.8 million.

 |
| table | reporting unit   | december 31 2012 goodwill | december 31 2012 % (  % ) of fair value to book value
---------------- | ------------------------- | -----------------------------------------------------
retail brokerage | $ 1791.8                  | 190% ( 190 % )
market making    | 142.4                     | 115% ( 115 % )
total goodwill   | $ 1934.2                  | |


| _id | dd497502a |
| title |  |
| text | the selection and disclosure of our critical accounting estimates have been discussed with our audit committee .
the following is a discussion of the more significant assumptions , estimates , accounting policies and methods used in the preparation of our consolidated financial statements : 2022 revenue recognition - we recognize revenue when persuasive evidence of an arrangement exists , delivery of product has occurred , the sales price is fixed or determinable and collectability is reasonably assured .

for our company , this means that revenue is recognized when title and risk of loss is transferred to our customers .
title transfers to our customers upon shipment or upon receipt at the customer's location as determined by the sales terms for each transaction .
the company estimates the cost of sales returns based on historical experience , and these estimates are normally immaterial .

2022 goodwill and non-amortizable intangible assets valuation - we test goodwill and non-amortizable intangible assets for impairment annually or more frequently if events occur that would warrant such review .
we perform our annual impairment analysis in the first quarter of each year .

while the company has the option to perform a qualitative assessment for both goodwill and non-amortizable intangible assets to determine if it is more likely than not that an impairment exists , the company elects to perform the quantitative assessment for our annual impairment analysis .
the impairment analysis involves comparing the fair value of each reporting unit or non-amortizable intangible asset to the carrying value .

if the carrying value exceeds the fair value , goodwill or a non-amortizable intangible asset is considered impaired .
to determine the fair value of goodwill , we primarily use a discounted cash flow model , supported by the market approach using earnings multiples of comparable global and local companies within the tobacco industry .

at december 31 , 2015 , the carrying value of our goodwill was $ 7.4 billion , which is related to ten reporting units , each of which is comprised of a group of markets with similar economic characteristics .
the estimated fair value of our ten reporting units exceeded the carrying value as of december 31 , 2015 .
to determine the fair value of non-amortizable intangible assets , we primarily use a discounted cash flow model applying the relief-from-royalty method .

we concluded that the fair value of our non-amortizable intangible assets exceeded the carrying value , and any reasonable movement in the assumptions would not result in an impairment .
these discounted cash flow models include management assumptions relevant for forecasting operating cash flows , which are subject to changes in business conditions , such as volumes and prices , costs to produce , discount rates and estimated capital needs .

management considers historical experience and all available information at the time the fair values are estimated , and we believe these assumptions are consistent with the assumptions a hypothetical marketplace participant would use .
since the march 28 , 2008 , spin-off from altria , we have not recorded a charge to earnings for an impairment of goodwill or non-amortizable intangible assets .

2022 marketing and advertising costs - we incur certain costs to support our products through programs which include advertising , marketing , consumer engagement and trade promotions .
the costs of our advertising and marketing programs are expensed in accordance with u.s .
gaap .
recognition of the cost related to our consumer engagement and trade promotion programs contain uncertainties due to the judgment required in estimating the potential performance and compliance for each program .

for volume-based incentives provided to customers , management continually assesses and estimates , by customer , the likelihood of the customer achieving the specified targets and records the reduction of revenue as the sales are made .
for other trade promotions , management relies on estimated utilization rates that have been developed from historical experience .

changes in the assumptions used in estimating the cost of any individual marketing program would not result in a material change in our financial position , results of operations or operating cash flows .
we have not made any material changes in the accounting methodology used to estimate our marketing programs during the past three years .
2022 employee benefit plans - as discussed in item 8 , note 13 .

benefit plans to our consolidated financial statements , we provide a range of benefits to our employees and retired employees , including pensions , postretirement health care and postemployment benefits ( primarily severance ) .
we record annual amounts relating to these plans based on calculations specified by u.s .
gaap .

gaap .
these calculations include various actuarial assumptions , such as discount rates , assumed rates of return on plan assets , compensation increases , mortality , turnover rates and health care cost trend rates .
we review actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so .
as permitted by u.s .
gaap , any effect of the modifications is generally amortized over future periods .

we believe that the assumptions utilized in calculating our obligations under these plans are reasonable based upon our historical experience and advice from our actuaries .
weighted-average discount rate assumptions for pensions and postretirement plans are as follows: .

we anticipate that assumption changes , coupled with decreased amortization of deferred losses , will decrease 2016 pre-tax u.s .
and non- u.s .
pension and postretirement expense to approximately $ 209 million as compared with approximately $ 240 million in 2015 , excluding

 |
| table | | 2015             | 2014
----------------------- | ---------------- | ----------------
u.s . pension plans     | 4.30% ( 4.30 % ) | 3.95% ( 3.95 % )
non-u.s . pension plans | 1.68% ( 1.68 % ) | 1.92% ( 1.92 % )
postretirement plans    | 4.45% ( 4.45 % ) | 4.20% ( 4.20 % ) |


| _id | dd4972fd2 |
| title |  |
| text | hologic , inc .
notes to consolidated financial statements ( continued ) ( in thousands , except per share data ) acquisition and the adjustments did not have a material impact on the company 2019s financial position or results of operation .
there have no other material changes to the purchase price allocation as disclosed in the company 2019s form 10-k for the year ended september 30 , 2006 .

as part of the purchase price allocation , all intangible assets that were a part of the acquisition were identified and valued .
it was determined that only customer relationship , trade name , developed technology and know how and in-process research and development had separately identifiable values .
customer relationship represents r2 2019s strong active customer base , dominant market position and strong partnership with several large companies .

trade name represents the r2 product names that the company intends to continue to use .
order backlog consists of customer orders for which revenue has not yet been recognized .
developed technology and know how represents currently marketable purchased products that the company continues to resell as well as utilize to enhance and incorporate into the company 2019s existing products .

the estimated $ 10200 of purchase price allocated to in-process research and development projects primarily related to r2 2019s digital cad products .
the projects added direct digital algorithm capabilities as well as a new platform technology to analyze images and breast density measurement .
the projects were substantially completed as planned in fiscal 2007 .

the deferred income tax asset relates to the tax effect of acquired net operating loss carry forwards that the company believes are realizable partially offset by acquired identifiable intangible assets , and fair value adjustments to acquired inventory as such amounts are not deductible for tax purposes .
acquisition of suros surgical systems , inc .
on july 27 , 2006 , the company completed the acquisition of suros surgical systems , inc .

( suros ) , pursuant to an agreement and plan of merger dated april 17 , 2006 .
the results of operations for suros have been included in the company 2019s consolidated financial statements from the date of acquisition as part of its mammography/breast care business segment .
suros , located in indianapolis , indiana , develops , manufactures and sells minimally invasive interventional breast biopsy technology and products for biopsy , tissue removal and biopsy site marking .

the initial aggregate purchase price for suros of approximately $ 248100 ( subject to adjustment ) consisted of 2300 shares of hologic common stock valued at $ 106500 , cash paid of $ 139000 , and approximately $ 2600 for acquisition related fees and expenses .
the company determined the fair value of the shares issued in connection with the acquisition in accordance with eitf issue no .

99-12 , determination of the measurement date for the market price of acquirer securities issued in a purchase business combination .
the components and allocation of the purchase price , consists of the following approximate amounts: .

the acquisition also provides for a two-year earn out .
the earn-out is payable in two annual cash installments equal to the incremental revenue growth in suros 2019 business in the two years following the closing.

 |
| table | net tangible assets acquired as of july 27 2006 | $ 11800
----------------------------------------------- | ----------------
in-process research and development             | 4900
developed technology and know how               | 46000
customer relationship                           | 17900
trade name                                      | 5800
deferred income taxes                           | -21300 ( 21300 )
goodwill                                        | 202000
estimated purchase price                        | $ 267100 |


| _id | dd4bc9a9c |
| title |  |
| text | we recorded liabilities for certain litigation settlements in prior periods .
total liabilities for litigation settlements changed from december 31 , 2006 , as follows : ( in millions ) .

* note that table may not sum due to rounding .
contribution expense 2014foundation in may 2006 , in conjunction with our initial public offering ( 201cipo 201d ) , we issued 13496933 shares of our class a common stock as a donation to the foundation that is incorporated in canada and controlled by directors who are independent of us and our customers .

the foundation builds on mastercard 2019s existing charitable giving commitments by continuing to support programs and initiatives that help children and youth to access education , understand and utilize technology , and develop the skills necessary to succeed in a diverse and global work force .
the vision of the foundation is to make the economy work for everybody by advancing innovative programs in areas of microfinance and youth education .

in connection with the donation of the class a common stock , we recorded an expense of $ 395 million which was equal to the aggregate value of the shares we donated .
in both 2007 and 2006 , we recorded expenses of $ 20 million for cash donations we made to the foundation , completing our intention , announced at the time of the ipo , to donate approximately $ 40 million in cash to the foundation in support of its operating expenses and charitable disbursements for the first four years of its operations .

we may make additional cash contributions to the foundation in the future .
the cash and stock donations to the foundation are generally not deductible by mastercard for tax purposes .
as a result of this difference between the financial statement and tax treatments of the donations , our effective income tax rate for the year ended december 31 , 2006 is significantly higher than our effective income tax rates for 2007 and 2008 .

depreciation and amortization depreciation and amortization expenses increased $ 14 million in 2008 and decreased $ 2 million in 2007 .
the increase in depreciation and amortization expense in 2008 is primarily due to increased investments in leasehold and building improvements , data center equipment and capitalized software .
the decrease in depreciation and amortization expense in 2007 was primarily related to certain assets becoming fully depreciated .

depreciation and amortization will increase as we continue to invest in leasehold and building improvements , data center equipment and capitalized software.

 |
| table | balance as of december 31 2006                    | $ 477
------------------------------------------------- | ------------
provision for litigation settlements ( note 20 )  | 3
interest accretion on u.s . merchant lawsuit      | 38
payments                                          | -114 ( 114 )
balance as of december 31 2007                    | $ 404
provision for discover settlement                 | 863
provision for american express settlement         | 1649
provision for other litigation settlements        | 6
interest accretion on u.s . merchant lawsuit      | 33
interest accretion on american express settlement | 44
payments on american express settlement           | -300 ( 300 )
payments on discover settlement                   | -863 ( 863 )
payment on u.s . merchant lawsuit                 | -100 ( 100 )
other payments and accretion                      | -1 ( 1 )
balance as of december 31 2008                    | $ 1736 |


| _id | dd4c50ae2 |
| title |  |
| text | management 2019s discussion and analysis 58 jpmorgan chase & co./2018 form 10-k net interest income and net yield excluding cib 2019s markets businesses in addition to reviewing net interest income and the net interest yield on a managed basis , management also reviews these metrics excluding cib 2019s markets businesses , as shown below ; these metrics , which exclude cib 2019s markets businesses , are non-gaap financial measures .

management reviews these metrics to assess the performance of the firm 2019s lending , investing ( including asset-liability management ) and deposit-raising activities .
the resulting metrics that exclude cib 2019s markets businesses are referred to as non-markets-related net interest income and net yield .
cib 2019s markets businesses are fixed income markets and equity markets .

management believes that disclosure of non-markets-related net interest income and net yield provides investors and analysts with other measures by which to analyze the non-markets-related business trends of the firm and provides a comparable measure to other financial institutions that are primarily focused on lending , investing and deposit-raising activities .

year ended december 31 , ( in millions , except rates ) 2018 2017 2016 net interest income 2013 managed basis ( a ) ( b ) $ 55687 $ 51410 $ 47292 less : cib markets net interest income ( c ) 3087 4630 6334 net interest income excluding cib markets ( a ) $ 52600 $ 46780 $ 40958 average interest-earning assets $ 2229188 $ 2180592 $ 2101604 less : average cib markets interest-earning assets ( c ) 609635 540835 520307 average interest-earning assets excluding cib markets $ 1619553 $ 1639757 $ 1581297 net

cib markets $ 1619553 $ 1639757 $ 1581297 net interest yield on average interest-earning assets 2013 managed basis 2.50% ( 2.50 % ) 2.36% ( 2.36 % ) 2.25% ( 2.25 % ) net interest yield on average cib markets interest-earning assets ( c ) 0.51 0.86 1.22 net interest yield on average interest-earning assets excluding cib markets 3.25% ( 3.25 % ) 2.85% ( 2.85 % ) 2.59% ( 2.59 % ) ( a ) interest includes the effect of related hedges .

taxable-equivalent amounts are used where applicable .
( b ) for a reconciliation of net interest income on a reported and managed basis , refer to reconciliation from the firm 2019s reported u.s .
gaap results to managed basis on page 57 .
( c ) for further information on cib 2019s markets businesses , refer to page 69 .
calculation of certain u.s .
gaap and non-gaap financial measures certain u.s .

gaap and non-gaap financial measures are calculated as follows : book value per share ( 201cbvps 201d ) common stockholders 2019 equity at period-end / common shares at period-end overhead ratio total noninterest expense / total net revenue return on assets ( 201croa 201d ) reported net income / total average assets return on common equity ( 201croe 201d ) net income* / average common stockholders 2019 equity return on tangible common equity ( 201crotce 201d ) net income* / average tangible common equity

) net income* / average tangible common equity tangible book value per share ( 201ctbvps 201d ) tangible common equity at period-end / common shares at period-end * represents net income applicable to common equity the firm also reviews adjusted expense , which is noninterest expense excluding firmwide legal expense and is therefore a non-gaap financial measure .

additionally , certain credit metrics and ratios disclosed by the firm exclude pci loans , and are therefore non-gaap measures .
management believes these measures help investors understand the effect of these items on reported results and provide an alternate presentation of the firm 2019s performance .
for additional information on credit metrics and ratios excluding pci loans , refer to credit and investment risk management on pages 102-123. .

management 2019s discussion and analysis 58 jpmorgan chase & co./2018 form 10-k net interest income and net yield excluding cib 2019s markets businesses in addition to reviewing net interest income and the net interest yield on a managed basis , management also reviews these metrics excluding cib 2019s markets businesses , as shown below ; these metrics , which exclude cib 2019s markets businesses , are non-gaap financial measures .

management reviews these metrics to assess the performance of the firm 2019s lending , investing ( including asset-liability management ) and deposit-raising activities .
the resulting metrics that exclude cib 2019s markets businesses are referred to as non-markets-related net interest income and net yield .
cib 2019s markets businesses are fixed income markets and equity markets .

management believes that disclosure of non-markets-related net interest income and net yield provides investors and analysts with other measures by which to analyze the non-markets-related business trends of the firm and provides a comparable measure to other financial institutions that are primarily focused on lending , investing and deposit-raising activities .

year ended december 31 , ( in millions , except rates ) 2018 2017 2016 net interest income 2013 managed basis ( a ) ( b ) $ 55687 $ 51410 $ 47292 less : cib markets net interest income ( c ) 3087 4630 6334 net interest income excluding cib markets ( a ) $ 52600 $ 46780 $ 40958 average interest-earning assets $ 2229188 $ 2180592 $ 2101604 less : average cib markets interest-earning assets ( c ) 609635 540835 520307 average interest-earning assets excluding cib markets $ 1619553 $ 1639757 $ 1581297 net

cib markets $ 1619553 $ 1639757 $ 1581297 net interest yield on average interest-earning assets 2013 managed basis 2.50% ( 2.50 % ) 2.36% ( 2.36 % ) 2.25% ( 2.25 % ) net interest yield on average cib markets interest-earning assets ( c ) 0.51 0.86 1.22 net interest yield on average interest-earning assets excluding cib markets 3.25% ( 3.25 % ) 2.85% ( 2.85 % ) 2.59% ( 2.59 % ) ( a ) interest includes the effect of related hedges .

taxable-equivalent amounts are used where applicable .
( b ) for a reconciliation of net interest income on a reported and managed basis , refer to reconciliation from the firm 2019s reported u.s .
gaap results to managed basis on page 57 .
( c ) for further information on cib 2019s markets businesses , refer to page 69 .
calculation of certain u.s .
gaap and non-gaap financial measures certain u.s .

gaap and non-gaap financial measures are calculated as follows : book value per share ( 201cbvps 201d ) common stockholders 2019 equity at period-end / common shares at period-end overhead ratio total noninterest expense / total net revenue return on assets ( 201croa 201d ) reported net income / total average assets return on common equity ( 201croe 201d ) net income* / average common stockholders 2019 equity return on tangible common equity ( 201crotce 201d ) net income* / average tangible common equity

) net income* / average tangible common equity tangible book value per share ( 201ctbvps 201d ) tangible common equity at period-end / common shares at period-end * represents net income applicable to common equity the firm also reviews adjusted expense , which is noninterest expense excluding firmwide legal expense and is therefore a non-gaap financial measure .

additionally , certain credit metrics and ratios disclosed by the firm exclude pci loans , and are therefore non-gaap measures .
management believes these measures help investors understand the effect of these items on reported results and provide an alternate presentation of the firm 2019s performance .
for additional information on credit metrics and ratios excluding pci loans , refer to credit and investment risk management on pages 102-123.

 |
| table | year ended december 31 ( in millions except rates )                         | 2018             | 2017             | 2016
--------------------------------------------------------------------------- | ---------------- | ---------------- | ----------------
net interest income 2013 managed basis ( a ) ( b )                          | $ 55687          | $ 51410          | $ 47292
less : cib markets net interest income ( c )                                | 3087             | 4630             | 6334
net interest income excluding cib markets ( a )                             | $ 52600          | $ 46780          | $ 40958
average interest-earning assets                                             | $ 2229188        | $ 2180592        | $ 2101604
less : average cib markets interest-earning assets ( c )                    | 609635           | 540835           | 520307
average interest-earning assets excluding cib markets                       | $ 1619553        | $ 1639757        | $ 1581297
net interest yield on average interest-earning assets 2013 managed basis    | 2.50% ( 2.50 % ) | 2.36% ( 2.36 % ) | 2.25% ( 2.25 % )
net interest yield on average cib markets interest-earning assets ( c )     | 0.51             | 0.86             | 1.22
net interest yield on average interest-earning assets excluding cib markets | 3.25% ( 3.25 % ) | 2.85% ( 2.85 % ) | 2.59% ( 2.59 % ) |


| _id | dd4babea2 |
| title |  |
| text | the long term .
in addition , we have focused on building relationships with large multinational carriers such as airtel , telef f3nica s.a .
and vodafone group plc .
we believe that consistent carrier investments in their networks across our international markets position us to generate meaningful organic revenue growth going forward .

in emerging markets , such as ghana , india , nigeria and uganda , wireless networks tend to be significantly less advanced than those in the united states , and initial voice networks continue to be deployed in underdeveloped areas .
a majority of consumers in these markets still utilize basic wireless services , predominantly on feature phones , while advanced device penetration remains low .
in more developed urban locations within these markets , early-stage data network deployments are underway .

carriers are focused on completing voice network build-outs while also investing in initial data networks as wireless data usage and smartphone penetration within their customer bases begin to accelerate .

in markets with rapidly evolving network technology , such as south africa and most of the countries in latin america where we do business , initial voice networks , for the most part , have already been built out , and carriers are focused on 3g network build outs , with select investments in 4g technology .
consumers in these regions are increasingly adopting smartphones and other advanced devices , and as a result , the usage of bandwidth-intensive mobile applications is growing materially .

recent spectrum auctions in these rapidly evolving markets have allowed incumbent carriers to accelerate their data network deployments and have also enabled new entrants to begin initial investments in data networks .
smartphone penetration and wireless data usage in these markets are growing rapidly , which typically requires that carriers continue to invest in their networks in order to maintain and augment their quality of service .

finally , in markets with more mature network technology , such as germany , carriers are focused on deploying 4g data networks to account for rapidly increasing wireless data usage amongst their customer base .
with higher smartphone and advanced device penetration and significantly higher per capita data usage , carrier investment in networks is focused on 4g coverage and capacity .

we believe that the network technology migration we have seen in the united states , which has led to significantly denser networks and meaningful new business commencements for us over a number of years , will ultimately be replicated in our less advanced international markets .

as a result , we expect to be able to leverage our extensive international portfolio of approximately 60190 communications sites and the relationships we have built with our carrier customers to drive sustainable , long-term growth .
we have holistic master lease agreements with certain of our tenants that provide for consistent , long-term revenue and a reduction in the likelihood of churn .

our holistic master lease agreements build and augment strong strategic partnerships with our tenants and have significantly reduced collocation cycle times , thereby providing our tenants with the ability to rapidly and efficiently deploy equipment on our sites .
property operations new site revenue growth .
during the year ended december 31 , 2015 , we grew our portfolio of communications real estate through the acquisition and construction of approximately 25370 sites .

in a majority of our asia , emea and latin america markets , the acquisition or construction of new sites resulted in increases in both tenant and pass- through revenues ( such as ground rent or power and fuel costs ) and expenses .
we continue to evaluate opportunities to acquire communications real estate portfolios , both domestically and internationally , to determine whether they meet our risk-adjusted hurdle rates and whether we believe we can effectively integrate them into our existing portfolio. .

property operations expenses .
direct operating expenses incurred by our property segments include direct site level expenses and consist primarily of ground rent and power and fuel costs , some or all of which may be passed through to our tenants , as well as property taxes , repairs and maintenance .

these segment direct operating expenses exclude all segment and corporate selling , general , administrative and development expenses , which are aggregated into one line item entitled selling , general , administrative and development expense in our consolidated statements of operations .

in general , our property segments 2019 selling , general , administrative and development expenses do not significantly increase as a result of adding incremental tenants to our legacy sites and typically increase only modestly year-over-year .
as a result , leasing additional space to new tenants on our legacy sites provides significant incremental cash flow .
we may , however , incur additional segment

 |
| table | new sites ( acquired or constructed ) | 2015  | 2014 | 2013
------------------------------------- | ----- | ---- | ----
u.s .                                 | 11595 | 900  | 5260
asia                                  | 2330  | 1560 | 1260
emea                                  | 4910  | 190  | 485
latin america                         | 6535  | 5800 | 6065 |


| _id | dd4bac24e |
| title |  |
| text | bhge 2017 form 10-k | 27 the short term .
we do , however , view the long term economics of the lng industry as positive given our outlook for supply and demand .
2022 refinery , petrochemical and industrial projects : in refining , we believe large , complex refineries should gain advantage in a more competitive , oversupplied landscape in 2018 as the industry globalizes and refiners position to meet local demand and secure export potential .

in petrochemicals , we continue to see healthy demand and cost-advantaged supply driving projects forward in 2018 .
the industrial market continues to grow as outdated infrastructure is replaced , policy changes come into effect and power is decentralized .
we continue to see growing demand across these markets in 2018 .
we have other segments in our portfolio that are more correlated with different industrial metrics such as our digital solutions business .

overall , we believe our portfolio is uniquely positioned to compete across the value chain , and deliver unique solutions for our customers .
we remain optimistic about the long-term economics of the industry , but are continuing to operate with flexibility given our expectations for volatility and changing assumptions in the near term .
in 2016 , solar and wind net additions exceeded coal and gas for the first time and it continued throughout 2017 .

governments may change or may not continue incentives for renewable energy additions .
in the long term , renewables' cost decline may accelerate to compete with new-built fossil capacity , however , we do not anticipate any significant impacts to our business in the foreseeable future .
despite the near-term volatility , the long-term outlook for our industry remains strong .

we believe the world 2019s demand for energy will continue to rise , and the supply of energy will continue to increase in complexity , requiring greater service intensity and more advanced technology from oilfield service companies .
as such , we remain focused on delivering innovative cost-efficient solutions that deliver step changes in operating and economic performance for our customers .

business environment the following discussion and analysis summarizes the significant factors affecting our results of operations , financial condition and liquidity position as of and for the year ended december 31 , 2017 , 2016 and 2015 , and should be read in conjunction with the consolidated and combined financial statements and related notes of the company .
amounts reported in millions in graphs within this report are computed based on the amounts in hundreds .

as a result , the sum of the components reported in millions may not equal the total amount reported in millions due to rounding .
we operate in more than 120 countries helping customers find , evaluate , drill , produce , transport and process hydrocarbon resources .

our revenue is predominately generated from the sale of products and services to major , national , and independent oil and natural gas companies worldwide , and is dependent on spending by our customers for oil and natural gas exploration , field development and production .

this spending is driven by a number of factors , including our customers' forecasts of future energy demand and supply , their access to resources to develop and produce oil and natural gas , their ability to fund their capital programs , the impact of new government regulations and most importantly , their expectations for oil and natural gas prices as a key driver of their cash flows .

oil and natural gas prices oil and natural gas prices are summarized in the table below as averages of the daily closing prices during each of the periods indicated. .

brent oil prices ( $ /bbl ) ( 1 ) $ 54.12 $ 43.64 $ 52.32 wti oil prices ( $ /bbl ) ( 2 ) 50.80 43.29 48.66 natural gas prices ( $ /mmbtu ) ( 3 ) 2.99 2.52 2.62 ( 1 ) energy information administration ( eia ) europe brent spot price per barrel

 |
| table | | 2017    | 2016    | 2015
------------------------------------- | ------- | ------- | -------
brent oil prices ( $ /bbl ) ( 1 )     | $ 54.12 | $ 43.64 | $ 52.32
wti oil prices ( $ /bbl ) ( 2 )       | 50.80   | 43.29   | 48.66
natural gas prices ( $ /mmbtu ) ( 3 ) | 2.99    | 2.52    | 2.62 |


| _id | dd4c0289c |
| title |  |
| text | item 7 .
management 2019s discussion and analysis of financial condition and results of operations we are an international energy company with operations in the u.s. , canada , africa , the middle east and europe .
our operations are organized into three reportable segments : 2022 e&p which explores for , produces and markets liquid hydrocarbons and natural gas on a worldwide basis .

2022 osm which mines , extracts and transports bitumen from oil sands deposits in alberta , canada , and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil .
2022 ig which produces and markets products manufactured from natural gas , such as lng and methanol , in eg .
certain sections of management 2019s discussion and analysis of financial condition and results of operations include forward-looking statements concerning trends or events potentially affecting our business .

these statements typically contain words such as 201canticipates , 201d 201cbelieves , 201d 201cestimates , 201d 201cexpects , 201d 201ctargets , 201d 201cplans , 201d 201cprojects , 201d 201ccould , 201d 201cmay , 201d 201cshould , 201d 201cwould 201d or similar words indicating that future outcomes are uncertain .

in accordance with 201csafe harbor 201d provisions of the private securities litigation reform act of 1995 , these statements are accompanied by cautionary language identifying important factors , though not necessarily all such factors , which could cause future outcomes to differ materially from those set forth in forward-looking statements .
for additional risk factors affecting our business , see item 1a .
risk factors in this annual report on form 10-k .

risk factors in this annual report on form 10-k .
management 2019s discussion and analysis of financial condition and results of operations should be read in conjunction with the information under item 1 .
business , item 1a .
risk factors and item 8 .
financial statements and supplementary data found in this annual report on form 10-k .

spin-off downstream business on june 30 , 2011 , the spin-off of marathon 2019s downstream business was completed , creating two independent energy companies : marathon oil and mpc .
marathon shareholders at the close of business on the record date of june 27 , 2011 received one share of mpc common stock for every two shares of marathon common stock held .

fractional shares of mpc common stock were not distributed and any fractional share of mpc common stock otherwise issuable to a marathon shareholder was sold in the open market on such shareholder 2019s behalf , and such shareholder received a cash payment with respect to that fractional share .
a private letter tax ruling received in june 2011 from the irs affirmed the tax-free nature of the spin-off .

activities related to the downstream business have been treated as discontinued operations in all periods presented in this annual report on form 10-k ( see item 8 .
financial statements and supplementary data 2014note 3 to the consolidated financial statements for additional information ) .
overview 2013 market conditions exploration and production prevailing prices for the various grades of crude oil and natural gas that we produce significantly impact our revenues and cash flows .

prices of crude oil have been volatile in recent years .
in 2011 , crude prices increased over 2010 levels , with increases in brent averages outstripping those in wti .
during much of 2010 , both wti and brent crude oil monthly average prices remained in the $ 75 to $ 85 per barrel range .
crude oil prices reached a low of $ 33.98 in february 2009 , following global demand declines in an economic recession , but recovered quickly ending 2009 at $ 79.36 .

the following table lists benchmark crude oil and natural gas price annual averages for the past three years. .

wti crude oil ( dollars per bbl ) $ 95.11 $ 79.61 $ 62.09 brent ( europe ) crude oil ( dollars per bbl ) 111.26 79.51 61.49 henry hub natural gas ( dollars per mmbtu ) ( a ) $ 4.04 $ 4.39 $ 3.99 ( a ) settlement date average .
our u.s .
crude oil production was approximately 58 percent sour in 2011 and 68 percent in 2010 .
sour crude contains more sulfur than light sweet wti does .

sour crude oil also tends to be heavier than light sweet crude oil and sells at a discount to light sweet crude oil because of higher refining costs and lower refined product values .
our international crude oil production is relatively sweet and is generally sold in relation to the brent crude benchmark .
the differential between wti and brent average prices widened significantly in 2011 to $ 16.15 in comparison to differentials of less than $ 1.00 in 2010 and 2009.

 |
| table | benchmark                                         | 2011    | 2010    | 2009
------------------------------------------------- | ------- | ------- | -------
wti crude oil ( dollars per bbl )                 | $ 95.11 | $ 79.61 | $ 62.09
brent ( europe ) crude oil ( dollars per bbl )    | 111.26  | 79.51   | 61.49
henry hub natural gas ( dollars per mmbtu ) ( a ) | $ 4.04  | $ 4.39  | $ 3.99 |


| _id | dd4b8e1ae |
| title |  |
| text | notes to the consolidated financial statements union pacific corporation and subsidiary companies for purposes of this report , unless the context otherwise requires , all references herein to the 201ccorporation 201d , 201ccompany 201d , 201cupc 201d , 201cwe 201d , 201cus 201d , and 201cour 201d mean union pacific corporation and its subsidiaries , including union pacific railroad company , which will be separately referred to herein as 201cuprr 201d or the 201crailroad 201d .
1 .

1 .
nature of operations operations and segmentation 2013 we are a class i railroad operating in the u.s .
our network includes 32236 route miles , linking pacific coast and gulf coast ports with the midwest and eastern u.s .
gateways and providing several corridors to key mexican gateways .
we own 26039 miles and operate on the remainder pursuant to trackage rights or leases .

we serve the western two-thirds of the country and maintain coordinated schedules with other rail carriers for the handling of freight to and from the atlantic coast , the pacific coast , the southeast , the southwest , canada , and mexico .
export and import traffic is moved through gulf coast and pacific coast ports and across the mexican and canadian borders .
the railroad , along with its subsidiaries and rail affiliates , is our one reportable operating segment .

although we provide and analyze revenue by commodity group , we treat the financial results of the railroad as one segment due to the integrated nature of our rail network .
our operating revenues are primarily derived from contracts with customers for the transportation of freight from origin to destination .
effective january 1 , 2018 , the company reclassified its six commodity groups into four : agricultural products , energy , industrial , and premium .

the following table represents a disaggregation of our freight and other revenues: .

although our revenues are principally derived from customers domiciled in the u.s. , the ultimate points of origination or destination for some products we transport are outside the u.s .
each of our commodity groups includes revenue from shipments to and from mexico .
included in the above table are freight revenues from our mexico business which amounted to $ 2.5 billion in 2018 , $ 2.3 billion in 2017 , and $ 2.2 billion in 2016 .

basis of presentation 2013 the consolidated financial statements are presented in accordance with accounting principles generally accepted in the u.s .
( gaap ) as codified in the financial accounting standards board ( fasb ) accounting standards codification ( asc ) .
2 .
significant accounting policies principles of consolidation 2013 the consolidated financial statements include the accounts of union pacific corporation and all of its subsidiaries .

investments in affiliated companies ( 20% ( 20 % ) to 50% ( 50 % ) owned ) are accounted for using the equity method of accounting .
all intercompany transactions are eliminated .
we currently have no less than majority-owned investments that require consolidation under variable interest entity requirements .
cash , cash equivalents and restricted cash 2013 cash equivalents consist of investments with original maturities of three months or less .

amounts included in restricted cash represent those required to be set aside by contractual agreement.

 |
| table | millions                  | 2018    | 2017    | 2016
------------------------- | ------- | ------- | -------
agricultural products     | $ 4469  | $ 4303  | $ 4209
energy                    | 4608    | 4498    | 3715
industrial                | 5679    | 5204    | 4964
premium                   | 6628    | 5832    | 5713
total freight revenues    | $ 21384 | $ 19837 | $ 18601
other subsidiary revenues | 881     | 885     | 814
accessorial revenues      | 502     | 458     | 455
other                     | 65      | 60      | 71
total operating revenues  | $ 22832 | $ 21240 | $ 19941 |


| _id | dd4b9d988 |
| title |  |
| text | operating expenses operating expenses were $ 2.9 billion , an increase of 8% ( 8 % ) over 2000 .
adjusted for the formation of citistreet , operating expenses grew 10% ( 10 % ) .
expense growth in 2001 of 10% ( 10 % ) is significantly lower than the comparable 20% ( 20 % ) expense growth for 2000 compared to 1999 .
state street successfully reduced the growth rate of expenses as revenue growth slowed during the latter half of 2000 and early 2001 .

the expense growth in 2001 reflects higher expenses for salaries and employee benefits , as well as information systems and communications .
o p e r a t i n g e x p e n s e s ( dollars in millions ) 2001 2000 1999 change adjusted change 00-01 ( 1 ) .

( 1 ) 2000 results adjusted for the formation of citistreet expenses related to salaries and employee benefits increased $ 139million in 2001 , or $ 163millionwhen adjusted for the formation of citistreet .
the adjusted increase reflects more than 2100 additional staff to support the large client wins and new business from existing clients and acquisitions .
this expense increase was partially offset by lower incentive-based compensation .

information systems and communications expense was $ 365 million in 2001 , up 20% ( 20 % ) from the prior year .
adjusted for the formation of citistreet , information systems and communications expense increased 22% ( 22 % ) .
this growth reflects both continuing investment in software and hardware , aswell as the technology costs associated with increased staffing levels .
expenses related to transaction processing services were $ 247 million , down $ 21 million , or 8% ( 8 % ) .

these expenses are volume related and include external contract services , subcustodian fees , brokerage services and fees related to securities settlement .
lower mutual fund shareholder activities , and lower subcustodian fees resulting from both the decline in asset values and lower transaction volumes , drove the decline .
occupancy expensewas $ 229million , up 15% ( 15 % ) .

the increase is due to expenses necessary to support state street 2019s global growth , and expenses incurred for leasehold improvements and other operational costs .
other expenses were $ 363 million , up $ 17 million , or 5% ( 5 % ) .
these expenses include professional services , advertising and sales promotion , and internal operational expenses .
the increase over prior year is due to a $ 21 million increase in the amortization of goodwill , primarily from acquisitions in 2001 .

in accordance with recent accounting pronouncements , goodwill amortization expense will be eliminated in 2002 .
state street recorded approximately $ 38 million , or $ .08 per share after tax , of goodwill amortization expense in 2001 .
state street 2019s cost containment efforts , which reduced discretionary spending , partially offset the increase in other expenses .
state street corporation 9

 |
| table | ( dollars in millions )                | 2001   | 2000   | 1999   | change 00-01 | adjusted change 00-01 ( 1 )
-------------------------------------- | ------ | ------ | ------ | ------------ | ---------------------------
salaries and employee benefits         | $ 1663 | $ 1524 | $ 1313 | 9% ( 9 % )   | 11% ( 11 % )
information systems and communications | 365    | 305    | 287    | 20           | 22
transaction processing services        | 247    | 268    | 237    | -8 ( 8 )     | -7 ( 7 )
occupancy                              | 229    | 201    | 188    | 15           | 16
other                                  | 363    | 346    | 311    | 5            | 7
total operating expenses               | $ 2867 | $ 2644 | $ 2336 | 8            | 10
number of employees                    | 19753  | 17604  | 17213  | 12           | |


| _id | dd4bbf8e4 |
| title |  |
| text | 2022 through the u.s .

attorney 2019s office for the district of maryland , the office of the inspector general ( 201coig 201d ) for the small business administration ( 201csba 201d ) has served a subpoena on pnc requesting documents concerning pnc 2019s relationship with , including sba-guaranteed loans made through , a broker named jade capital investments , llc ( 201cjade 201d ) , as well as information regarding other pnc-originated sba guaranteed loans made to businesses located in the state of maryland , the commonwealth

in the state of maryland , the commonwealth of virginia , and washington , dc .

certain of the jade loans have been identified in an indictment and subsequent superseding indictment charging persons associated with jade with conspiracy to commit bank fraud , substantive violations of the federal bank fraud statute , and money laundering .
pnc is cooperating with the u.s .
attorney 2019s office for the district of maryland .
our practice is to cooperate fully with regulatory and governmental investigations , audits and other inquiries , including those described in this note 23 .

in addition to the proceedings or other matters described above , pnc and persons to whom we may have indemnification obligations , in the normal course of business , are subject to various other pending and threatened legal proceedings in which claims for monetary damages and other relief are asserted .
we do not anticipate , at the present time , that the ultimate aggregate liability , if any , arising out of such other legal proceedings will have a material adverse effect on our financial position .

however , we cannot now determine whether or not any claims asserted against us or others to whom we may have indemnification obligations , whether in the proceedings or other matters described above or otherwise , will have a material adverse effect on our results of operations in any future reporting period , which will depend on , among other things , the amount of the loss resulting from the claim and the amount of income otherwise reported for the reporting period .

see note 24 commitments and guarantees for additional information regarding the visa indemnification and our other obligations to provide indemnification , including to current and former officers , directors , employees and agents of pnc and companies we have acquired .
note 24 commitments and guarantees equity funding and other commitments our unfunded commitments at december 31 , 2013 included private equity investments of $ 164 million .

standby letters of credit we issue standby letters of credit and have risk participations in standby letters of credit issued by other financial institutions , in each case to support obligations of our customers to third parties , such as insurance requirements and the facilitation of transactions involving capital markets product execution .

net outstanding standby letters of credit and internal credit ratings were as follows : table 151 : net outstanding standby letters of credit dollars in billions december 31 december 31 net outstanding standby letters of credit ( a ) $ 10.5 $ 11.5 internal credit ratings ( as a percentage of portfolio ) : .

( a ) the amounts above exclude participations in standby letters of credit of $ 3.3 billion and $ 3.2 billion to other financial institutions as of december 31 , 2013 and december 31 , 2012 , respectively .
the amounts above include $ 6.6 billion and $ 7.5 billion which support remarketing programs at december 31 , 2013 and december 31 , 2012 , respectively .
( b ) indicates that expected risk of loss is currently low .
( c ) indicates a higher degree of risk of default .

if the customer fails to meet its financial or performance obligation to the third party under the terms of the contract or there is a need to support a remarketing program , then upon a draw by a beneficiary , subject to the terms of the letter of credit , we would be obligated to make payment to them .
the standby letters of credit outstanding on december 31 , 2013 had terms ranging from less than 1 year to 6 years .

as of december 31 , 2013 , assets of $ 2.0 billion secured certain specifically identified standby letters of credit .
in addition , a portion of the remaining standby letters of credit issued on behalf of specific customers is also secured by collateral or guarantees that secure the customers 2019 other obligations to us .
the carrying amount of the liability for our obligations related to standby letters of credit and participations in standby letters of credit was $ 218 million at december 31 , 2013 .

standby bond purchase agreements and other liquidity facilities we enter into standby bond purchase agreements to support municipal bond obligations .
at december 31 , 2013 , the aggregate of our commitments under these facilities was $ 1.3 billion .
we also enter into certain other liquidity facilities to support individual pools of receivables acquired by commercial paper conduits .
there were no commitments under these facilities at december 31 , 2013 .
212 the pnc financial services group , inc .

212 the pnc financial services group , inc .
2013 form 10-k

 |
| table | dollars in billions                                        | december 31 2013 | december 312012
---------------------------------------------------------- | ---------------- | ---------------
net outstanding standby letters of credit ( a )            | $ 10.5           | $ 11.5
internal credit ratings ( as a percentage of portfolio ) : |                  |
pass ( b )                                                 | 96% ( 96 % )     | 95% ( 95 % )
below pass ( c )                                           | 4% ( 4 % )       | 5% ( 5 % ) |


| _id | dd4bf0eb2 |
| title |  |
| text | theme parks segment 2013 operating costs and expenses our theme parks segment operating costs and expenses consist primarily of theme park operations , includ- ing repairs and maintenance and related administrative expenses ; food , beverage and merchandise costs ; labor costs ; and sales and marketing costs .

theme parks segment operating costs and expenses increased in 2015 and 2014 primarily due to additional costs at our orlando and hollywood theme parks associated with newer attractions , such as the fast fur- ious 2122 2014 supercharged 2122 studio tour in hollywood in 2015 and the wizarding world of harry potter 2122 2014 diagon alley 2122 in orlando in 2014 and increases in food , beverage and merchandise costs associated with the increases in attendance in both years .

operating costs and expenses also increased in 2015 due to $ 89 million of operating costs and expenses attributable to universal studios japan and $ 22 million of transaction costs related to our development of a theme park in china .
nbcuniversal headquarters , other and eliminations headquarters and other operating costs and expenses incurred by our nbcuniversal businesses include overhead , personnel costs and costs associated with corporate initiatives .

operating costs and expenses increased in 2015 and 2014 primarily due to higher employee-related costs , including severance costs in corporate and other results of operations year ended december 31 ( in millions ) 2015 2014 2013 % (  % ) change 2014 to 2015 % (  % ) change 2013 to 2014 .

corporate and other 2013 revenue other revenue primarily relates to comcast spectacor , which owns the philadelphia flyers and the wells fargo center arena in philadelphia , pennsylvania and operates arena management-related businesses .
other revenue increased in 2015 and 2014 primarily due to increases in revenue from food and other services associated with new contracts entered into by one of our comcast spectacor businesses .

the increase in other revenue in 2014 was also due to an increase in revenue associated with newly acquired businesses .
corporate and other 2013 operating costs and expenses corporate and other operating costs and expenses primarily include overhead , personnel costs , the costs of corporate initiatives and branding , and operating costs and expenses associated with comcast spectacor .

excluding transaction costs associated with the time warner cable merger and related divestiture trans- actions of $ 178 million and $ 237 million in 2015 and 2014 , respectively , corporate and other operating costs and expenses increased 19% ( 19 % ) in 2015 .

this was primarily due to $ 56 million of expenses related to a contract settlement , an increase in expenses related to corporate strategic business initiatives and an increase in operating costs and expenses at comcast spectacor primarily associated with new contracts entered into by one of its businesses .

corporate and other operating costs and expenses increased in 2014 primarily due to $ 237 million of transaction-related costs associated with the time warner cable merger and related divest- iture transactions , as well as an increase in operating costs and expenses associated with new contracts entered into by one of our comcast spectacor businesses .
comcast 2015 annual report on form 10-k 60

 |
| table | year ended december 31 ( in millions )              | 2015           | 2014           | 2013           | % (  % ) change 2014 to 2015 | % (  % ) change 2013 to 2014
--------------------------------------------------- | -------------- | -------------- | -------------- | ---------------------------- | ----------------------------
revenue                                             | $ 766          | $ 709          | $ 600          | 8.0% ( 8.0 % )               | 18.1% ( 18.1 % )
operating costs and expenses                        | 1664           | 1487           | 1089           | 11.9                         | 36.5
operating loss before depreciation and amortization | $ -898 ( 898 ) | $ -778 ( 778 ) | $ -489 ( 489 ) | ( 15.5 ) % (  % )            | ( 59.1 ) % (  % ) |