| _id | dd4b8d65a |
| title |  |
| text | entergy corporation and subsidiaries management's financial discussion and analysis 2022 the deferral in august 2004 of $ 7.5 million of fossil plant maintenance and voluntary severance program costs at entergy new orleans as a result of a stipulation approved by the city council .
2003 compared to 2002 net revenue , which is entergy's 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. .

base rates increased net revenue due to base rate increases at entergy mississippi and entergy new orleans that became effective in january 2003 and june 2003 , respectively .
entergy gulf states implemented base rate decreases in its louisiana jurisdiction effective june 2002 and january 2003 .

the january 2003 base rate decrease of $ 22.1 million had a minimal impact on net income due to a corresponding reduction in nuclear depreciation and decommissioning expenses associated with the change in accounting estimate to reflect an assumed extension of river bend's useful life .

the deferred fuel cost revisions variance was due to a revised unbilled sales pricing estimate made in december 2002 and further revision of that estimate in the first quarter of 2003 to more closely align the fuel component of that pricing with expected recoverable fuel costs at entergy louisiana .
the asset retirement obligation variance was due to the implementation of sfas 143 , "accounting for asset retirement obligations" adopted in january 2003 .

see "critical accounting estimates 2013 nuclear decommissioning costs" for more details on sfas 143 .
the increase was offset by increased depreciation and decommissioning expenses and had an insignificant effect on net income .
the increase in net wholesale revenue was primarily due to an increase in sales volume to municipal and cooperative customers .

the march 2002 settlement agreement variance reflects the absence in 2003 of the effect of recording the ice storm settlement approved by the apsc in 2002 .
this settlement resulted in previously deferred revenues at entergy arkansas per the transition cost account mechanism being recorded in net revenue in the second quarter of 2002 .
the decrease was offset by a corresponding decrease in other operation and maintenance expenses and had a minimal effect on net income .

gross operating revenues and regulatory credits gross operating revenues include an increase in fuel cost recovery revenues of $ 682 million and $ 53 million in electric and gas sales , respectively , primarily due to higher fuel rates in 2003 resulting from increases in the market prices of purchased power and natural gas .
as such , this revenue increase was offset by increased fuel and purchased power expenses.

 |
| table | | ( in millions )
------------------------------------- | ----------------
2002 net revenue                      | $ 4209.6
base rate increases                   | 66.2
base rate decreases                   | -23.3 ( 23.3 )
deferred fuel cost revisions          | 56.2
asset retirement obligation           | 42.9
net wholesale revenue                 | 23.2
march 2002 ark . settlement agreement | -154.0 ( 154.0 )
other                                 | -6.3 ( 6.3 )
2003 net revenue                      | $ 4214.5 |


| _id | dd4ba8c48 |
| title |  |
| text | humana inc .
notes to consolidated financial statements 2014 ( continued ) the grant-date fair value of the award will be estimated using option-pricing models .
in addition , certain tax effects of stock option exercises will be reported as a financing activity rather than an operating activity in the statements of cash flows .
we adopted sfas 123r on january 1 , 2006 under the retrospective transition method using the black-scholes pricing model .

the effect of expensing stock options under a fair value approach using the black-scholes pricing model on diluted earnings per common share for the years ended december 31 , 2005 , 2004 and 2003 is disclosed on page 69 .
in addition , the classification of cash inflows from any excess tax benefit associated with exercising stock options will change from an operating activity to a financing activity in the consolidated statements of cash flows with no impact on total cash flows .

we estimate the impact of this change in classification will decrease operating cash flows ( and increase financing cash flows ) by approximately $ 15.5 million in 2005 , $ 3.7 million in 2004 , and $ 15.2 million in 2003 .
stock option expense after adopting sfas 123r is not expected to be materially different than our pro forma disclosure on page 69 and is dependent on levels of stock options granted during 2006 .
3 .

3 .
acquisitions in january 2006 , our commercial segment reached an agreement to acquire cha service company , or cha health , a health plan serving employer groups in kentucky , for cash consideration of approximately $ 60.0 million plus any excess statutory surplus .
this transaction , which is subject to regulatory approval , is expected to close effective in the second quarter of 2006 .

on december 20 , 2005 , our commercial segment acquired corphealth , inc. , or corphealth , a behavioral health care management company , for cash consideration of approximately $ 54.2 million , including transaction costs .
this acquisition allows humana to integrate coverage of medical and behavior health benefits .
net tangible assets acquired of $ 6.0 million primarily consisted of cash and cash equivalents .

the purchase price exceeded the estimated fair value of the net tangible assets acquired by approximately $ 48.2 million .
we preliminarily allocated this excess purchase price to other intangible assets of $ 8.6 million and associated deferred tax liabilities of $ 3.2 million , and non-deductible goodwill of $ 42.8 million .
the other intangible assets , which consist primarily of customer contracts , have a weighted average useful life of 14.7 years .

the allocation is subject to change pending completion of the valuation by a third party valuation specialist firm assisting us in evaluating the fair value of the assets acquired .
on february 16 , 2005 , our government segment acquired careplus health plans of florida , or careplus , as well as its affiliated 10 medical centers and pharmacy company .
careplus provides medicare advantage hmo plans and benefits to medicare advantage members in miami-dade , broward and palm beach counties .

this acquisition enhances our medicare market position in south florida .
we paid approximately $ 444.9 million in cash , including transaction costs .
we financed the transaction with $ 294.0 million of borrowings under our credit agreement and $ 150.9 million of cash on hand .
the purchase price is subject to a balance sheet settlement process with a nine month claims run-out period .
this settlement , which will be reflected as an adjustment to goodwill , is not expected to be material .

the fair value of the acquired tangible assets ( assumed liabilities ) consisted of the following: .

 |
| table | | ( in thousands )
-------------------------------------------- | ----------------
cash and cash equivalents                    | $ 92116
premiums receivable and other current assets | 6510
property and equipment and other assets      | 21315
medical and other expenses payable           | -37375 ( 37375 )
other current liabilities                    | -23359 ( 23359 )
other liabilities                            | -5915 ( 5915 )
net tangible assets acquired                 | $ 53292 |


| _id | dd4bb4980 |
| title |  |
| text | page 71 of 94 notes to consolidated financial statements ball corporation and subsidiaries 16 .
shareholders 2019 equity ( continued ) on october 24 , 2007 , ball announced the discontinuance of the company 2019s discount on the reinvestment of dividends associated with the company 2019s dividend reinvestment and voluntary stock purchase plan for non- employee shareholders .
the 5 percent discount was discontinued on november 1 , 2007 .

accumulated other comprehensive earnings ( loss ) the activity related to accumulated other comprehensive earnings ( loss ) was as follows : ( $ in millions ) foreign currency translation pension and postretirement items , net of tax effective financial derivatives , net of tax accumulated comprehensive earnings ( loss ) .

( a ) within the company 2019s 2006 annual report , the consolidated statement of changes in shareholders 2019 equity for the year ended december 31 , 2006 , included a transition adjustment of $ 47.9 million , net of tax , related to the adoption of sfas no .
158 , 201cemployers 2019 accounting for defined benefit pension plans and other postretirement plans , an amendment of fasb statements no .

87 , 88 , 106 and 132 ( r ) , 201d as a component of 2006 comprehensive earnings rather than only as an adjustment to accumulated other comprehensive loss .
the 2006 amounts have been revised to correct the previous reporting .
notwithstanding the 2005 distribution pursuant to the jobs act , management 2019s intention is to indefinitely reinvest foreign earnings .
therefore , no taxes have been provided on the foreign currency translation component for any period .

the change in the pension and other postretirement items is presented net of related tax expense of $ 31.3 million and $ 2.9 million for 2007 and 2006 , respectively , and a related tax benefit of $ 27.3 million for 2005 .
the change in the effective financial derivatives is presented net of related tax benefit of $ 3.2 million for 2007 , related tax expense of $ 5.7 million for 2006 and related tax benefit of $ 10.7 million for 2005 .

stock-based compensation programs effective january 1 , 2006 , ball adopted sfas no .
123 ( revised 2004 ) , 201cshare based payment , 201d which is a revision of sfas no .
123 and supersedes apb opinion no .
25 .
the new standard establishes accounting standards for transactions in which an entity exchanges its equity instruments for goods or services , including stock option and restricted stock grants .

the major differences for ball are that ( 1 ) expense is now recorded in the consolidated statements of earnings for the fair value of new stock option grants and nonvested portions of grants made prior to january 1 , 2006 , and ( 2 ) the company 2019s deposit share program ( discussed below ) is no longer a variable plan that is marked to current market value each month through earnings .
upon adoption of sfas no .

upon adoption of sfas no .
123 ( revised 2004 ) , ball has chosen to use the modified prospective transition method and the black-scholes valuation model.

 |
| table | ( $ in millions )                      | foreign currency translation | pension and other postretirement items net of tax | effective financial derivatives net of tax | accumulated other comprehensive earnings ( loss )
-------------------------------------- | ---------------------------- | ------------------------------------------------- | ------------------------------------------ | -------------------------------------------------
december 31 2004                       | $ 148.9                      | $ -126.3 ( 126.3 )                                | $ 10.6                                     | $ 33.2
2005 change                            | -74.3 ( 74.3 )               | -43.6 ( 43.6 )                                    | -16.0 ( 16.0 )                             | -133.9 ( 133.9 )
december 31 2005                       | 74.6                         | -169.9 ( 169.9 )                                  | -5.4 ( 5.4 )                               | -100.7 ( 100.7 )
2006 change                            | 57.2                         | 55.9                                              | 6.0                                        | 119.1
effect of sfas no . 158 adoption ( a ) | 2013                         | -47.9 ( 47.9 )                                    | 2013                                       | -47.9 ( 47.9 )
december 31 2006                       | 131.8                        | -161.9 ( 161.9 )                                  | 0.6                                        | -29.5 ( 29.5 )
2007 change                            | 90.0                         | 57.9                                              | -11.5 ( 11.5 )                             | 136.4
december 31 2007                       | $ 221.8                      | $ -104.0 ( 104.0 )                                | $ -10.9 ( 10.9 )                           | $ 106.9 |


| _id | dd4bba18c |
| title |  |
| text | dish network corporation notes to consolidated financial statements - continued ciel ii .
ciel ii , a canadian dbs satellite , was launched in december 2008 and commenced commercial operation during february 2009 .
this satellite is accounted for as a capital lease and depreciated over the term of the satellite service agreement .
we have leased 100% ( 100 % ) of the capacity on ciel ii for an initial 10 year term .

as of december 31 , 2011 and 2010 , we had $ 500 million capitalized for the estimated fair value of satellites acquired under capital leases included in 201cproperty and equipment , net , 201d with related accumulated depreciation of $ 151 million and $ 109 million , respectively .

in our consolidated statements of operations and comprehensive income ( loss ) , we recognized $ 43 million , $ 43 million and $ 40 million in depreciation expense on satellites acquired under capital lease agreements during the years ended december 31 , 2011 , 2010 and 2009 , respectively .

future minimum lease payments under the capital lease obligation , together with the present value of the net minimum lease payments as of december 31 , 2011 are as follows ( in thousands ) : for the years ended december 31 .

the summary of future maturities of our outstanding long-term debt as of december 31 , 2011 is included in the commitments table in note 16 .
12 .
income taxes and accounting for uncertainty in income taxes income taxes our income tax policy is to record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported on our consolidated balance sheets , as well as probable operating loss , tax credit and other carryforwards .

deferred tax assets are offset by valuation allowances when we believe it is more likely than not that net deferred tax assets will not be realized .
we periodically evaluate our need for a valuation allowance .
determining necessary valuation allowances requires us to make assessments about historical financial information as well as the timing of future events , including the probability of expected future taxable income and available tax planning opportunities .

we file consolidated tax returns in the u.s .
the income taxes of domestic and foreign subsidiaries not included in the u.s .
tax group are presented in our consolidated financial statements based on a separate return basis for each tax paying entity .
as of december 31 , 2011 , we had no net operating loss carryforwards ( 201cnols 201d ) for federal income tax purposes and $ 13 million of nol benefit for state income tax purposes .
the state nols begin to expire in the year 2020 .

the state nols begin to expire in the year 2020 .
in addition , there are $ 5 million of tax benefits related to credit carryforwards which are partially offset by a valuation allowance and $ 14 million benefit of capital loss carryforwards which are fully offset by a valuation allowance .
the credit carryforwards begin to expire in the year 2012.

 |
| table | 2012                                                                                | $ 84715
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------
2013                                                                                | 77893
2014                                                                                | 76296
2015                                                                                | 75970
2016                                                                                | 75970
thereafter                                                                                | 314269
total minimum lease payments                                                                                | 705113
less : amount representing lease of the orbital location and estimated executory costs ( primarily insurance and maintenance ) including profit thereon included in total minimum lease payments | -323382 ( 323382 )
net minimum lease payments                                                                                | 381731
less : amount representing interest                                                                                | -109823 ( 109823 )
present value of net minimum lease payments                                                                                | 271908
less : current portion                                                                                | -29202 ( 29202 )
long-term portion of capital lease obligations                                                                                | $ 242706 |


| _id | dd4bc774c |
| title |  |
| text | 152 the pnc financial services group , inc .
2013 form 10-k 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 .

note 20 commitments in the normal course of business , we have various commitments outstanding , certain of which are not included on our consolidated balance sheet .
the following table presents our outstanding commitments to extend credit along with significant other commitments as of december 31 , 2017 and december 31 , 2016 , respectively .
table 98 : commitments to extend credit and other commitments in millions december 31 december 31 .

commitments to extend credit , or net unfunded loan commitments , represent arrangements to lend funds or provide liquidity subject to specified contractual conditions .
these commitments generally have fixed expiration dates , may require payment of a fee , and contain termination clauses in the event the customer 2019s credit quality deteriorates .

net outstanding standby letters of credit we issue standby letters of credit and share in the risk of 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 .

approximately 91% ( 91 % ) and 94% ( 94 % ) of our net outstanding standby letters of credit were rated as pass as of december 31 , 2017 and december 31 , 2016 , respectively , with the remainder rated as below pass .
an internal credit rating of pass indicates the expected risk of loss is currently low , while a rating of below pass indicates a higher degree of risk .

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 , 2017 had terms ranging from less than one year to seven years .

as of december 31 , 2017 , assets of $ 1.3 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 $ .2 billion at december 31 , 2017 and is included in other liabilities on our consolidated balance sheet.

 |
| table | in millions                                             | december 31 2017 | december 31 2016
------------------------------------------------------- | ---------------- | ----------------
commitments to extend credit                            |                  |
total commercial lending                                | $ 112125         | $ 108256
home equity lines of credit                             | 17852            | 17438
credit card                                             | 24911            | 22095
other                                                   | 4753             | 4192
total commitments to extend credit                      | 159641           | 151981
net outstanding standby letters ofcredit ( a )          | 8651             | 8324
reinsurance agreements ( b )                            | 1654             | 1835
standby bond purchase agreements ( c )                  | 843              | 790
other commitments ( d )                                 | 1732             | 967
total commitments to extendcredit and other commitments | $ 172521         | $ 163897 |


| _id | dd4c3d690 |
| title |  |
| text | j.p .
morgan chase & co .
/ 2003 annual report 33 corporate credit allocation in 2003 , tss was assigned a corporate credit allocation of pre- tax earnings and the associated capital related to certain credit exposures managed within ib 2019s credit portfolio on behalf of clients shared with tss .
prior periods have been revised to reflect this allocation .

for 2003 , the impact to tss of this change increased pre-tax operating results by $ 36 million and average allocated capital by $ 712 million , and it decreased sva by $ 65 million .
pre-tax operating results were $ 46 million lower than in 2002 , reflecting lower loan volumes and higher related expenses , slightly offset by a decrease in credit costs .

business outlook tss revenue in 2004 is expected to benefit from improved global equity markets and from two recent acquisitions : the november 2003 acquisition of the bank one corporate trust portfolio , and the january 2004 acquisition of citigroup 2019s electronic funds services business .
tss also expects higher costs as it integrates these acquisitions and continues strategic investments to sup- port business expansion .

by client segment tss dimensions of 2003 revenue diversification by business revenue by geographic region investor services 36% ( 36 % ) other 1% ( 1 % ) institutional trust services 23% ( 23 % ) treasury services 40% ( 40 % ) large corporations 21% ( 21 % ) middle market 18% ( 18 % ) banks 11% ( 11 % ) nonbank financial institutions 44% ( 44 % ) public sector/governments 6% ( 6 % ) europe , middle east & africa 27% ( 27 % ) asia/pacific 9% ( 9 % ) the americas 64% ( 64 % ) ( a ) includes the elimination

64% ( 64 % ) ( a ) includes the elimination of revenue related to shared activities with chase middle market in the amount of $ 347 million .

year ended december 31 , operating revenue .

( a ) includes a portion of the $ 41 million gain on sale of a nonstrategic business in 2003 : $ 1 million in institutional trust services and $ 40 million in other .
( b ) includes the elimination of revenues related to shared activities with chase middle market , and a $ 50 million gain on sale of a non-u.s .
securities clearing firm in 2002.

 |
| table | year ended december 31 , ( in millions ) | year ended december 31 , 2003 | year ended december 31 , 2002 | change
---------------------------------------- | ----------------------------- | ----------------------------- | ----------
treasury services                        | $ 1927                        | $ 1818                        | 6% ( 6 % )
investor services                        | 1449                          | 1513                          | -4 ( 4 )
institutional trust services ( a )       | 928                           | 864                           | 7
other ( a ) ( b )                        | -312 ( 312 )                  | -303 ( 303 )                  | -3 ( 3 )
total treasury & securities services     | $ 3992                        | $ 3892                        | 3% ( 3 % ) |


| _id | dd4bb3026 |
| title |  |
| text | notes to consolidated financial statements 2014 ( continued ) note 14 2014commitments and contingencies leases we conduct a major part of our operations using leased facilities and equipment .
many of these leases have renewal and purchase options and provide that we pay the cost of property taxes , insurance and maintenance .
rent expense on all operating leases for fiscal 2010 , 2009 and 2008 was $ 32.8 million , $ 30.2 million , and $ 30.4 million , respectively .

future minimum lease payments for all noncancelable leases at may 31 , 2010 were as follows : operating leases .

we are party to a number of claims and lawsuits incidental to our business .
in the opinion of management , the reasonably possible outcome of such matters , individually or in the aggregate , will not have a material adverse impact on our financial position , liquidity or results of operations .
we define operating taxes as tax contingencies that are unrelated to income taxes , such as sales and property taxes .

during the course of operations , we must interpret the meaning of various operating tax matters in the united states and in the foreign jurisdictions in which we do business .
taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to such operating tax matters , which could result in the payment of additional taxes in those jurisdictions .

as of may 31 , 2010 and 2009 we did not have a liability for operating tax items .
the amount of the liability is based on management 2019s best estimate given our history with similar matters and interpretations of current laws and regulations .
bin/ica agreements in connection with our acquisition of merchant credit card operations of banks , we have entered into sponsorship or depository and processing agreements with certain of the banks .

these agreements allow us to use the banks 2019 identification numbers , referred to as bank identification number for visa transactions and interbank card association number for mastercard transactions , to clear credit card transactions through visa and mastercard .
certain of such agreements contain financial covenants , and we were in compliance with all such covenants as of may 31 , 2010 .

on june 18 , 2010 , cibc provided notice that it will not renew its sponsorship with us for visa in canada after the initial ten year term .
as a result , their canadian visa sponsorship will expire in march 2011 .
we are

 |
| table | | operating leases
----------------------------------- | ----------------
2011                                | $ 9856
2012                                | 3803
2013                                | 2538
2014                                | 1580
2015                                | 928
thereafter                          | 1428
total future minimum lease payments | $ 20133 |


| _id | dd4bb5fd8 |
| title |  |
| text | has decreased during the period from 2002 to 2004 , principally due to the increase in earned premium and due to cost containment measures undertaken by management .
in business insurance and personal lines , the expense ratio is expected to decrease further in 2005 , largely as a result of expected increases in earned premium .

in specialty commercial , the expense ratio is expected to increase slightly in 2005 due to changes in the business mix , most notably the company 2019s decision in the fourth quarter of 2004 to exit the multi-peril crop insurance program which will eliminate significant expense reimbursements from the specialty commercial segment .
policyholder dividend ratio : the policyholder dividend ratio is the ratio of policyholder dividends to earned premium .

combined ratio : the combined ratio is the sum of the loss and loss adjustment expense ratio , the expense ratio and the policyholder dividend ratio .
this ratio is a relative measurement that describes the related cost of losses and expense for every $ 100 of earned premiums .
a combined ratio below 100.0 demonstrates underwriting profit ; a combined ratio above 100.0 demonstrates underwriting losses .

the combined ratio has decreased from 2003 to 2004 primarily because of improvement in the expense ratio .
the combined ratio in 2005 could be significantly higher or lower than the 2004 combined ratio depending on the level of catastrophe losses , but will also be impacted by changes in pricing and an expected moderation in favorable loss cost trends .

catastrophe ratio : the catastrophe ratio ( a component of the loss and loss adjustment expense ratio ) represents the ratio of catastrophe losses ( net of reinsurance ) to earned premiums .
a catastrophe is an event that causes $ 25 or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers .
by their nature , catastrophe losses vary dramatically from year to year .

based on the mix and geographic dispersion of premium written and estimates derived from various catastrophe loss models , the company 2019s expected catastrophe ratio over the long-term is 3.0 points .
before considering the reduction in ongoing operation 2019s catastrophe reserves related to september 11 of $ 298 in 2004 , the catastrophe ratio in 2004 was 5.3 points .

see 201crisk management strategy 201d below for a discussion of the company 2019s property catastrophe risk management program that serves to mitigate the company 2019s net exposure to catastrophe losses .
combined ratio before catastrophes and prior accident year development : the combined ratio before catastrophes and prior accident year development represents the combined ratio for the current accident year , excluding the impact of catastrophes .

the company believes this ratio is an important measure of the trend in profitability since it removes the impact of volatile and unpredictable catastrophe losses and prior accident year reserve development .
before considering catastrophes , the combined ratio related to current accident year business has improved from 2002 to 2004 principally due to earned pricing increases and favorable claim frequency .

other operations underwriting results : the other operations segment is responsible for managing operations of the hartford that have discontinued writing new or renewal business as well as managing the claims related to asbestos and environmental exposures .
as such , neither earned premiums nor underwriting ratios are meaningful financial measures .
instead , management believes that underwriting result is a more meaningful measure .

the net underwriting loss for 2002 through 2004 is primarily due to prior accident year loss development , including $ 2.6 billion of net asbestos reserve strengthening in 2003 .
reserve estimates within other operations , including estimates for asbestos and environmental claims , are inherently uncertain .
refer to the other operations segment md&a for further discussion of other operation's underwriting results .
total property & casualty investment earnings .

the investment return , or yield , on property & casualty 2019s invested assets is an important element of the company 2019s earnings since insurance products are priced with the assumption that premiums received can be invested for a period of time before loss and loss adjustment expenses are paid .

for longer tail lines , such as workers 2019 compensation and general liability , claims are paid over several years and , therefore , the premiums received for these lines of business can generate significant investment income .
him determines the appropriate allocation of investments by asset class and measures the investment yield performance for each asset class against market indices or other benchmarks .

due to the emphasis on preservation of capital and the need to maintain sufficient liquidity to satisfy claim obligations , the vast majority of property and casualty 2019s invested assets have been held in fixed maturities , including , among other asset classes , corporate bonds , municipal bonds , government debt , short-term debt , mortgage-

 |
| table | | 2004           | 2003           | 2002
----------------------------------------------- | -------------- | -------------- | --------------
investment yield after-tax                      | 4.1% ( 4.1 % ) | 4.2% ( 4.2 % ) | 4.5% ( 4.5 % )
net realized capital gains ( losses ) after-tax | $ 87           | $ 165          | $ -44 ( 44 ) |


| _id | dd4c0a4fc |
| title |  |
| text | part ii item 5 2013 market for registrant 2019s common equity , related stockholder matters and issuer purchases of equity securities ( a ) ( 1 ) our common stock is listed on the new york stock exchange and is traded under the symbol 201cpnc . 201d at the close of business on february 16 , 2017 , there were 60763 common shareholders of record .
holders of pnc common stock are entitled to receive dividends when declared by the board of directors out of funds legally available for this purpose .

our board of directors may not pay or set apart dividends on the common stock until dividends for all past dividend periods on any series of outstanding preferred stock and certain outstanding capital securities issued by the parent company have been paid or declared and set apart for payment .
the board of directors presently intends to continue the policy of paying quarterly cash dividends .

the amount of any future dividends will depend on economic and market conditions , our financial condition and operating results , and other factors , including contractual restrictions and applicable government regulations and policies ( such as those relating to the ability of bank and non-bank subsidiaries to pay dividends to the parent company and regulatory capital limitations ) .

the amount of our dividend is also currently subject to the results of the supervisory assessment of capital adequacy and capital planning processes undertaken by the federal reserve and our primary bank regulators as part of the comprehensive capital analysis and review ( ccar ) process as described in the supervision and regulation section in item 1 of this report .
the federal reserve has the power to prohibit us from paying dividends without its approval .

for further information concerning dividend restrictions and other factors that could limit our ability to pay dividends , as well as restrictions on loans , dividends or advances from bank subsidiaries to the parent company , see the supervision and regulation section in item 1 , item 1a risk factors , the capital and liquidity management portion of the risk management section in item 7 , and note 10 borrowed funds , note 15 equity and note 18 regulatory matters in the notes to consolidated financial

matters in the notes to consolidated financial statements in item 8 of this report , which we include here by reference .

we include here by reference additional information relating to pnc common stock under the common stock prices/ dividends declared section in the statistical information ( unaudited ) section of item 8 of this report .
we include here by reference the information regarding our compensation plans under which pnc equity securities are authorized for issuance as of december 31 , 2016 in the table ( with introductory paragraph and notes ) that appears in item 12 of this report .

our stock transfer agent and registrar is : computershare trust company , n.a .
250 royall street canton , ma 02021 800-982-7652 registered shareholders may contact this phone number regarding dividends and other shareholder services .
we include here by reference the information that appears under the common stock performance graph caption at the end of this item 5 .
( a ) ( 2 ) none .
( b ) not applicable .

( a ) ( 2 ) none .
( b ) not applicable .
( c ) details of our repurchases of pnc common stock during the fourth quarter of 2016 are included in the following table : in thousands , except per share data 2016 period total shares purchased ( a ) average paid per total shares purchased as part of publicly announced programs ( b ) maximum number of shares that may yet be purchased under the programs ( b ) .

( a ) includes pnc common stock purchased in connection with our various employee benefit plans generally related to forfeitures of unvested restricted stock awards and shares used to cover employee payroll tax withholding requirements .
note 11 employee benefit plans and note 12 stock based compensation plans in the notes to consolidated financial statements in item 8 of this report include additional information regarding our employee benefit and equity compensation plans that use pnc common stock .

( b ) on march 11 , 2015 , we announced that our board of directors approved the establishment of a stock repurchase program authorization in the amount of 100 million shares of pnc common stock , effective april 1 , 2015 .

repurchases are made in open market or privately negotiated transactions and the timing and exact amount of common stock repurchases will depend on a number of factors including , among others , market and general economic conditions , regulatory capital considerations , alternative uses of capital , the potential impact on our credit ratings , and contractual and regulatory limitations , including the results of the supervisory assessment of capital adequacy and capital planning processes undertaken by

and capital planning processes undertaken by the federal reserve as part of the ccar process .

in june 2016 , we announced share repurchase programs of up to $ 2.0 billion for the four quarter period beginning with the third quarter of 2016 , including repurchases of up to $ 200 million related to employee benefit plans .
in january 2017 , we announced a $ 300 million increase in our share repurchase programs for this period .

in the fourth quarter of 2016 , we repurchased 4.9 million shares of common stock on the open market , with an average price of $ 101.47 per share and an aggregate repurchase price of $ .5 billion .

see the liquidity and capital management portion of the risk management section in item 7 of this report for more information on the share repurchase programs under the share repurchase authorization for the period july 1 , 2016 through june 30 , 2017 included in the 2016 capital plan accepted by the federal reserve .
28 the pnc financial services group , inc .
2013 form 10-k

 |
| table | 2016 period        | total sharespurchased ( a ) | averagepricepaid pershare | total sharespurchased aspartofpubliclyannouncedprograms ( b ) | maximumnumber ofshares thatmay yet bepurchasedundertheprograms ( b )
------------------ | --------------------------- | ------------------------- | ------------------------------------------------------------- | --------------------------------------------------------------------
october 1 2013 31  | 2277                        | $ 91.15                   | 2245                                                          | 61962
november 1 2013 30 | 1243                        | $ 103.50                  | 1243                                                          | 60719
december 1 2013 31 | 1449                        | $ 115.65                  | 1449                                                          | 59270
total              | 4969                        | $ 101.39                  |                                                               | |


| _id | dd4bcd5f2 |
| title |  |
| text | compared to 2007 .
we reduced personal injury expense by $ 80 million in 2007 as a result of fewer than expected claims and lower than expected average settlement costs .
in 2008 , we reduced personal injury expense and asbestos-related costs $ 82 million based on the results of updated personal injury actuarial studies and a reassessment of our potential liability for resolution of current and future asbestos claims .

in addition , environmental and toxic tort expenses were $ 7 million lower in 2008 compared to 2007 .
other costs were lower in 2007 compared to 2006 driven primarily by a reduction in personal injury expense .
actuarial studies completed during 2007 resulted in a reduction in personal injury expense of $ 80 million , which was partially offset by an adverse development with respect to one claim .

settlement of insurance claims in 2007 related to hurricane rita , and higher equity income also drove expenses lower in 2007 versus 2006 .
conversely , the year-over-year comparison was affected by the settlement of insurance claims totaling $ 23 million in 2006 related to the january 2005 west coast storm and a $ 9 million gain in 2006 from the sale of two company-owned airplanes .
non-operating items millions of dollars 2008 2007 2006 % (  % ) change 2008 v 2007 % (  % ) change 2007 v 2006 .

other income 2013 other income decreased in 2008 compared to 2007 due to lower gains from real estate sales and decreased returns on cash investments reflecting lower interest rates .
higher rental and licensing income and lower interest expense on our sale of receivables program partially offset the decreases .
lower net gains from non-operating asset sales ( primarily real estate ) drove the reduction in other income in 2007 .

recognition of rental income in 2006 from the settlement of a rent dispute also contributed to the year-over-year decrease in other income .
cash investment returns increased $ 21 million due to larger cash balances and higher interest rates .
interest expense 2013 interest expense increased in 2008 versus 2007 due to a higher weighted-average debt level of $ 8.3 billion , compared to $ 7.3 billion in 2007 .

a lower effective interest rate of 6.1% ( 6.1 % ) in 2008 , compared to 6.6% ( 6.6 % ) in 2007 , partially offset the effects of the higher weighted-average debt level .
an increase in the weighted-average debt levels to $ 7.3 billion from $ 7.1 billion in 2006 generated higher interest expense in 2007 .
a lower effective interest rate of 6.6% ( 6.6 % ) in 2007 , compared to 6.7% ( 6.7 % ) in 2006 , partially offset the effects of the higher debt level .

income taxes 2013 income taxes were higher in 2008 compared to 2007 , driven by higher pre-tax income .
our effective tax rates were 36.1% ( 36.1 % ) and 38.4% ( 38.4 % ) in 2008 and 2007 , respectively .
the lower effective tax rate in 2008 resulted from several reductions in tax expense related to federal audits and state tax law changes .
in addition , the effective tax rate in 2007 was increased by illinois legislation that increased deferred tax expense in the third quarter of 2007 .

income taxes were $ 235 million higher in 2007 compared to 2006 , due primarily to higher pre-tax income and the effect of new tax legislation in the state of illinois that changed how we determine the amount of our income subject to illinois tax .
the illinois legislation increased our deferred tax expense by $ 27 million in 2007 .
our effective tax rates were 38.4% ( 38.4 % ) and 36.4% ( 36.4 % ) in 2007 and 2006 , respectively.

 |
| table | millions of dollars | 2008           | 2007           | 2006         | % (  % ) change 2008 v 2007 | % (  % ) change 2007 v 2006
------------------- | -------------- | -------------- | ------------ | --------------------------- | ---------------------------
other income        | $ 92           | $ 116          | $ 118        | ( 21 ) % (  % )             | ( 2 ) % (  % )
interest expense    | -511 ( 511 )   | -482 ( 482 )   | -477 ( 477 ) | 6                           | 1
income taxes        | -1318 ( 1318 ) | -1154 ( 1154 ) | -919 ( 919 ) | 14 % (  % )                 | 26 % (  % ) |


| _id | dd4bc26ca |
| title |  |
| text | entergy corporation and subsidiaries notes to financial statements equitable discretion and not require refunds for the 20-month period from september 13 , 2001 - may 2 , 2003 .
because the ruling on refunds relied on findings in the interruptible load proceeding , which is discussed in a separate section below , the ferc concluded that the refund ruling will be held in abeyance pending the outcome of the rehearing requests in that proceeding .

on the second issue , the ferc reversed its prior decision and ordered that the prospective bandwidth remedy begin on june 1 , 2005 ( the date of its initial order in the proceeding ) rather than january 1 , 2006 , as it had previously ordered .

pursuant to the october 2011 order , entergy was required to calculate the additional bandwidth payments for the period june - december 2005 utilizing the bandwidth formula tariff prescribed by the ferc that was filed in a december 2006 compliance filing and accepted by the ferc in an april 2007 order .
as is the case with bandwidth remedy payments , these payments and receipts will ultimately be paid by utility operating company customers to other utility operating company customers .

in december 2011 , entergy filed with the ferc its compliance filing that provides the payments and receipts among the utility operating companies pursuant to the ferc 2019s october 2011 order .
the filing shows the following payments/receipts among the utility operating companies : payments ( receipts ) ( in millions ) .

entergy arkansas made its payment in january 2012 .
in february 2012 , entergy arkansas filed for an interim adjustment to its production cost allocation rider requesting that the $ 156 million payment be collected from customers over the 22-month period from march 2012 through december 2013 .
in march 2012 the apsc issued an order stating that the payment can be recovered from retail customers through the production cost allocation rider , subject to refund .

the lpsc and the apsc have requested rehearing of the ferc 2019s october 2011 order .
in december 2013 the lpsc filed a petition for a writ of mandamus at the united states court of appeals for the d.c .
circuit .
in its petition , the lpsc requested that the d.c .
circuit issue an order compelling the ferc to issue a final order on pending rehearing requests .
in its response to the lpsc petition , the ferc committed to rule on the pending rehearing request before the end of february .

in january 2014 the d.c .
circuit denied the lpsc's petition .
the apsc , the lpsc , the puct , and other parties intervened in the december 2011 compliance filing proceeding , and the apsc and the lpsc also filed protests .
calendar year 2013 production costs the liabilities and assets for the preliminary estimate of the payments and receipts required to implement the ferc 2019s remedy based on calendar year 2013 production costs were recorded in december 2013 , based on certain year-to-date information .

the preliminary estimate was recorded based on the following estimate of the payments/receipts among the utility operating companies for 2014.

 |
| table | | payments ( receipts ) ( in millions )
----------------------------- | -------------------------------------
entergy arkansas              | $ 156
entergy gulf states louisiana | ( $ 75 )
entergy louisiana             | $ 2014
entergy mississippi           | ( $ 33 )
entergy new orleans           | ( $ 5 )
entergy texas                 | ( $ 43 ) |


| _id | dd4c37f2e |
| title |  |
| text | corporate & institutional banking corporate & institutional banking earned $ 1.9 billion in 2011 and $ 1.8 billion in 2010 .
the increase in earnings was primarily due to an improvement in the provision for credit losses , which was a benefit in 2011 , partially offset by a reduction in the value of commercial mortgage servicing rights and lower net interest income .
we continued to focus on adding new clients , increasing cross sales , and remaining committed to strong expense discipline .

asset management group asset management group earned $ 141 million for 2011 compared with $ 137 million for 2010 .
assets under administration were $ 210 billion at december 31 , 2011 and $ 212 billion at december 31 , 2010 .
earnings for 2011 reflected a benefit from the provision for credit losses and growth in noninterest income , partially offset by higher noninterest expense and lower net interest income .

for 2011 , the business delivered strong sales production , grew high value clients and benefitted from significant referrals from other pnc lines of business .
over time and with stabilized market conditions , the successful execution of these strategies and the accumulation of our strong sales performance are expected to create meaningful growth in assets under management and noninterest income .

residential mortgage banking residential mortgage banking earned $ 87 million in 2011 compared with $ 269 million in 2010 .
the decline in earnings was driven by an increase in noninterest expense associated with increased costs for residential mortgage foreclosure- related expenses , primarily as a result of ongoing governmental matters , and lower net interest income , partially offset by an increase in loan originations and higher loans sales revenue .

blackrock our blackrock business segment earned $ 361 million in 2011 and $ 351 million in 2010 .
the higher business segment earnings from blackrock for 2011 compared with 2010 were primarily due to an increase in revenue .
non-strategic assets portfolio this business segment ( formerly distressed assets portfolio ) consists primarily of acquired non-strategic assets that fall outside of our core business strategy .

non-strategic assets portfolio had earnings of $ 200 million in 2011 compared with a loss of $ 57 million in 2010 .
the increase was primarily attributable to a lower provision for credit losses partially offset by lower net interest income .
201cother 201d reported earnings of $ 376 million for 2011 compared with earnings of $ 386 million for 2010 .

the decrease in earnings primarily reflected the noncash charge related to the redemption of trust preferred securities in the fourth quarter of 2011 and the gain related to the sale of a portion of pnc 2019s blackrock shares in 2010 partially offset by lower integration costs in 2011 .
consolidated income statement review our consolidated income statement is presented in item 8 of this report .
net income for 2011 was $ 3.1 billion compared with $ 3.4 billion for 2010 .

results for 2011 include the impact of $ 324 million of residential mortgage foreclosure-related expenses primarily as a result of ongoing governmental matters , a $ 198 million noncash charge related to redemption of trust preferred securities and $ 42 million for integration costs .
results for 2010 included the $ 328 million after-tax gain on our sale of gis , $ 387 million for integration costs , and $ 71 million of residential mortgage foreclosure-related expenses .

for 2010 , net income attributable to common shareholders was also impacted by a noncash reduction of $ 250 million in connection with the redemption of tarp preferred stock .
pnc 2019s results for 2011 were driven by good performance in a challenging environment of low interest rates , slow economic growth and new regulations .
net interest income and net interest margin year ended december 31 dollars in millions 2011 2010 .

changes in net interest income and margin result from the interaction of the volume and composition of interest-earning assets and related yields , interest-bearing liabilities and related rates paid , and noninterest-bearing sources of funding .

see the statistical information ( unaudited ) 2013 analysis of year-to-year changes in net interest income and average consolidated balance sheet and net interest analysis in item 8 and the discussion of purchase accounting accretion in the consolidated balance sheet review in item 7 of this report for additional information .

the decreases in net interest income and net interest margin for 2011 compared with 2010 were primarily attributable to a decrease in purchase accounting accretion on purchased impaired loans primarily due to lower excess cash recoveries .
a decline in average loan balances and the low interest rate environment , partially offset by lower funding costs , also contributed to the decrease .
the pnc financial services group , inc .
2013 form 10-k 35

 |
| table | year ended december 31dollars in millions | 2011             | 2010
----------------------------------------- | ---------------- | ----------------
net interest income                       | $ 8700           | $ 9230
net interest margin                       | 3.92% ( 3.92 % ) | 4.14% ( 4.14 % ) |


| _id | dd4971178 |
| title |  |
| text | jpmorgan chase & co .
/ 2007 annual report 31 the following section provides a comparative discussion of jpmorgan chase 2019s consolidated results of operations on a reported basis for the three-year period ended december 31 , 2007 .
factors that relate primarily to a single business segment are discussed in more detail within that business segment than they are in this consolidated sec- tion .

for a discussion of the critical accounting estimates used by the firm that affect the consolidated results of operations , see pages 96 201398 of this annual report .
revenue .

2007 compared with 2006 total net revenue of $ 71.4 billion was up $ 9.4 billion , or 15% ( 15 % ) , from the prior year .
higher net interest income , very strong private equity gains , record asset management , administration and commissions revenue , higher mortgage fees and related income and record investment banking fees contributed to the revenue growth .
these increases were offset partially by lower trading revenue .

investment banking fees grew in 2007 to a level higher than the pre- vious record set in 2006 .
record advisory and equity underwriting fees drove the results , partially offset by lower debt underwriting fees .
for a further discussion of investment banking fees , which are primarily recorded in ib , see the ib segment results on pages 40 201342 of this annual report .
principal transactions revenue consists of trading revenue and private equity gains .

trading revenue declined significantly from the 2006 level , primarily due to markdowns in ib of $ 1.4 billion ( net of hedges ) on subprime positions , including subprime cdos , and $ 1.3 billion ( net of fees ) on leveraged lending funded loans and unfunded commitments .
also in ib , markdowns in securitized products on nonsubprime mortgages and weak credit trading performance more than offset record revenue in currencies and strong revenue in both rates and equities .

equities benefited from strong client activity and record trading results across all products .
ib 2019s credit portfolio results increased compared with the prior year , primarily driven by higher revenue from risk management activities .

the increase in private equity gains from 2006 reflected a significantly higher level of gains , the classification of certain private equity carried interest as compensation expense and a fair value adjustment in the first quarter of 2007 on nonpublic private equity investments resulting from the adoption of sfas 157 ( 201cfair value measurements 201d ) .

for a further discussion of principal transactions revenue , see the ib and corporate segment results on pages 40 201342 and 59 201360 , respectively , and note 6 on page 122 of this annual report .
lending & deposit-related fees rose from the 2006 level , driven pri- marily by higher deposit-related fees and the bank of new york transaction .

for a further discussion of lending & deposit-related fees , which are mostly recorded in rfs , tss and cb , see the rfs segment results on pages 43 201348 , the tss segment results on pages 54 201355 , and the cb segment results on pages 52 201353 of this annual report .
asset management , administration and commissions revenue reached a level higher than the previous record set in 2006 .
increased assets under management and higher performance and placement fees in am drove the record results .

the 18% ( 18 % ) growth in assets under management from year-end 2006 came from net asset inflows and market appreciation across all segments : institutional , retail , private bank and private client services .
tss also contributed to the rise in asset management , administration and commissions revenue , driven by increased product usage by new and existing clients and market appreciation on assets under custody .

finally , commissions revenue increased , due mainly to higher brokerage transaction volume ( primarily included within fixed income and equity markets revenue of ib ) , which more than offset the sale of the insurance business by rfs in the third quarter of 2006 and a charge in the first quarter of 2007 resulting from accelerated surrenders of customer annuities .

for additional information on these fees and commissions , see the segment discussions for ib on pages 40 201342 , rfs on pages 43 201348 , tss on pages 54 201355 , and am on pages 56 201358 , of this annual report .
the favorable variance resulting from securities gains in 2007 compared with securities losses in 2006 was primarily driven by improvements in the results of repositioning of the treasury invest- ment securities portfolio .

also contributing to the positive variance was a $ 234 million gain from the sale of mastercard shares .
for a fur- ther discussion of securities gains ( losses ) , which are mostly recorded in the firm 2019s treasury business , see the corporate segment discussion on pages 59 201360 of this annual report .
consol idated results of operat ions

 |
| table | year ended december 31 ( in millions )          | 2007    | 2006         | 2005
----------------------------------------------- | ------- | ------------ | --------------
investment banking fees                         | $ 6635  | $ 5520       | $ 4088
principal transactions                          | 9015    | 10778        | 8072
lending & deposit-related fees                  | 3938    | 3468         | 3389
asset management administration and commissions | 14356   | 11855        | 9988
securities gains ( losses )                     | 164     | -543 ( 543 ) | -1336 ( 1336 )
mortgage fees and related income                | 2118    | 591          | 1054
credit card income                              | 6911    | 6913         | 6754
other income                                    | 1829    | 2175         | 2684
noninterest revenue                             | 44966   | 40757        | 34693
net interest income                             | 26406   | 21242        | 19555
total net revenue                               | $ 71372 | $ 61999      | $ 54248 |


| _id | dd4bbb668 |
| title |  |
| text | entergy arkansas , inc .
and subsidiaries management 2019s financial discussion and analysis plan to spin off the utility 2019s transmission business see the 201cplan to spin off the utility 2019s transmission business 201d section of entergy corporation and subsidiaries management 2019s financial discussion and analysis for a discussion of this matter , including the planned retirement of debt and preferred securities .

results of operations net income 2011 compared to 2010 net income decreased $ 7.7 million primarily due to a higher effective income tax rate , lower other income , and higher other operation and maintenance expenses , substantially offset by higher net revenue , lower depreciation and amortization expenses , and lower interest expense .

2010 compared to 2009 net income increased $ 105.7 million primarily due to higher net revenue , a lower effective income tax rate , higher other income , and lower depreciation and amortization expenses , partially offset by higher other operation and maintenance expenses .
net revenue 2011 compared to 2010 net revenue consists of operating revenues net of : 1 ) fuel , fuel-related expenses , and gas purchased for resale , 2 ) purchased power expenses , and 3 ) other regulatory charges ( credits ) .

following is an analysis of the change in net revenue comparing 2011 to 2010 .
amount ( in millions ) .

the retail electric price variance is primarily due to a base rate increase effective july 2010 .
see note 2 to the financial statements for more discussion of the rate case settlement .
the ano decommissioning trust variance is primarily related to the deferral of investment gains from the ano 1 and 2 decommissioning trust in 2010 in accordance with regulatory treatment .

the gains resulted in an increase in 2010 in interest and investment income and a corresponding increase in regulatory charges with no effect on net income.

 |
| table | | amount ( in millions )
----------------------------- | ----------------------
2010 net revenue              | $ 1216.7
retail electric price         | 31.0
ano decommissioning trust     | 26.4
transmission revenue          | 13.1
volume/weather                | -15.9 ( 15.9 )
net wholesale revenue         | -11.9 ( 11.9 )
capacity acquisition recovery | -10.3 ( 10.3 )
other                         | 3.2
2011 net revenue              | $ 1252.3 |


| _id | dd4ba4bd4 |
| title |  |
| text | while we have remediated the previously-identified material weakness in our internal control over financial reporting , we may identify other material weaknesses in the future .

in november 2017 , we restated our consolidated financial statements for the quarters ended april 1 , 2017 and july 1 , 2017 in order to correctly classify cash receipts from the payments on sold receivables ( which are cash receipts on the underlying trade receivables that have already been securitized ) to cash provided by investing activities ( from cash provided by operating activities ) within our condensed consolidated statements of cash flows .

in connection with these restatements , management identified a material weakness in our internal control over financial reporting related to the misapplication of accounting standards update 2016-15 .
specifically , we did not maintain effective controls over the adoption of new accounting standards , including communication with the appropriate individuals in coming to our conclusions on the application of new accounting standards .

as a result of this material weakness , our management concluded that we did not maintain effective internal control over financial reporting as of april 1 , 2017 and july 1 , 2017 .
while we have remediated the material weakness and our management has determined that our disclosure controls and procedures were effective as of december 30 , 2017 , there can be no assurance that our controls will remain adequate .

the effectiveness of our internal control over financial reporting is subject to various inherent limitations , including judgments used in decision-making , the nature and complexity of the transactions we undertake , assumptions about the likelihood of future events , the soundness of our systems , cost limitations , and other limitations .

if other material weaknesses or significant deficiencies in our internal control are discovered or occur in the future or we otherwise must restate our financial statements , it could materially and adversely affect our business and results of operations or financial condition , restrict our ability to access the capital markets , require us to expend significant resources to correct the weaknesses or deficiencies , subject us to fines , penalties , investigations or judgments , harm our reputation , or

or judgments , harm our reputation , or otherwise cause a decline in investor confidence .

item 1b .
unresolved staff comments .
item 2 .
properties .
our corporate co-headquarters are located in pittsburgh , pennsylvania and chicago , illinois .
our co-headquarters are leased and house certain executive offices , our u.s .
business units , and our administrative , finance , legal , and human resource functions .
we maintain additional owned and leased offices throughout the regions in which we operate .

we manufacture our products in our network of manufacturing and processing facilities located throughout the world .
as of december 30 , 2017 , we operated 83 manufacturing and processing facilities .
we own 80 and lease three of these facilities .
our manufacturing and processing facilities count by segment as of december 30 , 2017 was: .

we maintain all of our manufacturing and processing facilities in good condition and believe they are suitable and are adequate for our present needs .
we also enter into co-manufacturing arrangements with third parties if we determine it is advantageous to outsource the production of any of our products .
item 3 .
legal proceedings .

item 3 .
legal proceedings .
we are routinely involved in legal proceedings , claims , and governmental inquiries , inspections or investigations ( 201clegal matters 201d ) arising in the ordinary course of our business .

while we cannot predict with certainty the results of legal matters in which we are currently involved or may in the future be involved , we do not expect that the ultimate costs to resolve any of the legal matters that are currently pending will have a material adverse effect on our financial condition or results of operations .
item 4 .
mine safety disclosures .
not applicable.

 |
| table | | owned | leased
------------- | ----- | ------
united states | 41    | 1
canada        | 2     | 2014
europe        | 11    | 2014
rest of world | 26    | 2 |


| _id | dd4b99afe |
| title |  |
| text | notes to consolidated financial statements 1 .
basis of presentation the accompanying consolidated financial statements and notes thereto have been prepared in accordance with u.s .
generally accepted accounting principles ( "u.s .
gaap" ) .
the consolidated financial statements include the accounts of aon plc and all of its controlled subsidiaries ( "aon" or the "company" ) .
all intercompany accounts and transactions have been eliminated .

the consolidated financial statements include , in the opinion of management , all adjustments necessary to present fairly the company's consolidated financial position , results of operations and cash flows for all periods presented .
reclassification certain amounts in prior years' consolidated financial statements and related notes have been reclassified to conform to the 2015 presentation .

in prior periods , long-term investments were included in investments in the consolidated statement of financial position .
these amounts are now included in other non-current assets in the consolidated statement of financial position , as shown in note 3 to these consolidated financial statements .
long-term investments were $ 135 million at december 31 , 2015 and $ 143 million at december 31 , 2014 .

in prior periods , prepaid pensions were included in other non-current assets in the consolidated statement of financial position .
these amounts are now separately disclosed in the consolidated statement of financial position .
prepaid pensions were $ 1033 million at december 31 , 2015 and $ 933 million at december 31 , 2014 .

upon vesting of certain share-based payment arrangements , employees may elect to use a portion of the shares to satisfy tax withholding requirements , in which case aon makes a payment to the taxing authority on the employee 2019s behalf and remits the remaining shares to the employee .
the company has historically presented amounts due to taxing authorities within cash flows from operating activities in the consolidated statements of cash flows .

the amounts are now included in 201cissuance of shares for employee benefit plans 201d within cash flows from financing activities .
the company believes this presentation provides greater clarity into the operating and financing activities of the company as the substance and accounting for these transactions is that of a share repurchase .
it also aligns the company 2019s presentation to be consistent with industry practice .

amounts reported in issuance of shares for employee benefit plans were $ 227 million , $ 170 million , and $ 120 million , respectively , for the years ended december 31 , 2015 , 2014 and 2013 .
these amounts , which were reclassified from accounts payable and accrued liabilities and other assets and liabilities , were $ 85 million and $ 85 million in 2014 , and $ 62 million and $ 58 million in 2013 , respectively .

changes to the presentation in the consolidated statements of cash flows for 2014 and 2013 were made related to certain line items within financing activities .
the following line items and respective amounts have been aggregated in a new line item titled 201cnoncontrolling interests and other financing activities 201d within financing activities. .

use of estimates the preparation of the accompanying consolidated financial statements in conformity with u.s .
gaap requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities , disclosures of contingent assets and liabilities at the date of the financial statements , and the reported amounts of reserves and expenses .
these estimates and assumptions are based on management's best estimates and judgments .

management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors , including the current economic environment .
management believes its estimates to be reasonable given the current facts available .
aon adjusts such estimates and assumptions when facts and circumstances dictate .
illiquid credit markets , volatile equity markets , and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions .

as future events and their effects cannot be determined , among other factors , with precision , actual results could differ significantly from these estimates .
changes in estimates resulting from continuing changes in the economic environment would , if applicable , be reflected in the financial statements in future periods.

 |
| table | years ended december 31,                          | 2014       | 2013
------------------------------------------------- | ---------- | ----------
purchases of shares from noncontrolling interests | 3          | -8 ( 8 )
dividends paid to noncontrolling interests        | -24 ( 24 ) | -19 ( 19 )
proceeds from sale-leaseback                      | 25         | 2014 |


| _id | dd4b88146 |
| title |  |
| text | long-term product offerings include alpha-seeking active and index strategies .
our alpha-seeking active strategies seek to earn attractive returns in excess of a market benchmark or performance hurdle while maintaining an appropriate risk profile , and leverage fundamental research and quantitative models to drive portfolio construction .

in contrast , index strategies seek to closely track the returns of a corresponding index , generally by investing in substantially the same underlying securities within the index or in a subset of those securities selected to approximate a similar risk and return profile of the index .
index strategies include both our non-etf index products and ishares etfs .
although many clients use both alpha-seeking active and index strategies , the application of these strategies may differ .

for example , clients may use index products to gain exposure to a market or asset class , or may use a combination of index strategies to target active returns .
in addition , institutional non-etf index assignments tend to be very large ( multi-billion dollars ) and typically reflect low fee rates .
net flows in institutional index products generally have a small impact on blackrock 2019s revenues and earnings .

equity year-end 2017 equity aum totaled $ 3.372 trillion , reflecting net inflows of $ 130.1 billion .
net inflows included $ 174.4 billion into ishares etfs , driven by net inflows into core funds and broad developed and emerging market equities , partially offset by non-etf index and active net outflows of $ 25.7 billion and $ 18.5 billion , respectively .
blackrock 2019s effective fee rates fluctuate due to changes in aum mix .

approximately half of blackrock 2019s equity aum is tied to international markets , including emerging markets , which tend to have higher fee rates than u.s .
equity strategies .
accordingly , fluctuations in international equity markets , which may not consistently move in tandem with u.s .
markets , have a greater impact on blackrock 2019s equity revenues and effective fee rate .
fixed income fixed income aum ended 2017 at $ 1.855 trillion , reflecting net inflows of $ 178.8 billion .

in 2017 , active net inflows of $ 21.5 billion were diversified across fixed income offerings , and included strong inflows into municipal , unconstrained and total return bond funds .
ishares etfs net inflows of $ 67.5 billion were led by flows into core , corporate and treasury bond funds .
non-etf index net inflows of $ 89.8 billion were driven by demand for liability-driven investment solutions .

multi-asset blackrock 2019s multi-asset team manages a variety of balanced funds and bespoke mandates for a diversified client base that leverages our broad investment expertise in global equities , bonds , currencies and commodities , and our extensive risk management capabilities .
investment solutions might include a combination of long-only portfolios and alternative investments as well as tactical asset allocation overlays .
component changes in multi-asset aum for 2017 are presented below .

( in millions ) december 31 , net inflows ( outflows ) market change impact december 31 .

( 1 ) futureadvisor amounts do not include aum held in ishares etfs .
multi-asset net inflows reflected ongoing institutional demand for our solutions-based advice with $ 18.9 billion of net inflows coming from institutional clients .
defined contribution plans of institutional clients remained a significant driver of flows , and contributed $ 20.8 billion to institutional multi-asset net inflows in 2017 , primarily into target date and target risk product offerings .

retail net inflows of $ 1.1 billion reflected demand for our multi-asset income fund family , which raised $ 5.8 billion in 2017 .
the company 2019s multi-asset strategies include the following : 2022 asset allocation and balanced products represented 41% ( 41 % ) of multi-asset aum at year-end .
these strategies combine equity , fixed income and alternative components for investors seeking a tailored solution relative to a specific benchmark and within a risk budget .

in certain cases , these strategies seek to minimize downside risk through diversification , derivatives strategies and tactical asset allocation decisions .
flagship products in this category include our global allocation and multi-asset income fund families .
2022 target date and target risk products grew 16% ( 16 % ) organically in 2017 , with net inflows of $ 23.9 billion .

institutional investors represented 93% ( 93 % ) of target date and target risk aum , with defined contribution plans accounting for 87% ( 87 % ) of aum .
flows were driven by defined contribution investments in our lifepath offerings .
lifepath products utilize a proprietary active asset allocation overlay model that seeks to balance risk and return over an investment horizon based on the investor 2019s expected retirement timing .
underlying investments are primarily index products .

2022 fiduciary management services are complex mandates in which pension plan sponsors or endowments and foundations retain blackrock to assume responsibility for some or all aspects of investment management .
these customized services require strong partnership with the clients 2019 investment staff and trustees in order to tailor investment strategies to meet client-specific risk budgets and return objectives.

 |
| table | ( in millions )               | december 312016 | net inflows ( outflows ) | marketchange | fximpact | december 312017
----------------------------- | --------------- | ------------------------ | ------------ | -------- | ---------------
asset allocation and balanced | $ 176675        | $ -2502 ( 2502 )         | $ 17387      | $ 4985   | $ 196545
target date/risk              | 149432          | 23925                    | 24532        | 1577     | 199466
fiduciary                     | 68395           | -1047 ( 1047 )           | 7522         | 8819     | 83689
futureadvisor ( 1 )           | 505             | -46 ( 46 )               | 119          | 2014     | 578
total                         | $ 395007        | $ 20330                  | $ 49560      | $ 15381  | $ 480278 |


| _id | dd4b901ac |
| title |  |
| text | financial statement impact we believe that our accruals for sales returns , rebates , and discounts are reasonable and appropriate based on current facts and circumstances .
our global rebate and discount liabilities are included in sales rebates and discounts on our consolidated balance sheet .
our global sales return liability is included in other current liabilities and other noncurrent liabilities on our consolidated balance sheet .

as of december 31 , 2018 , a 5 percent change in our global sales return , rebate , and discount liability would have led to an approximate $ 275 million effect on our income before income taxes .
the portion of our global sales return , rebate , and discount liability resulting from sales of our products in the u.s .
was approximately 90 percent as of december 31 , 2018 and december 31 , 2017 .
the following represents a roll-forward of our most significant u.s .

pharmaceutical sales return , rebate , and discount liability balances , including managed care , medicare , and medicaid: .

( 1 ) adjustments of the estimates for these returns , rebates , and discounts to actual results were approximately 1 percent of consolidated net sales for each of the years presented .
product litigation liabilities and other contingencies background and uncertainties product litigation liabilities and other contingencies are , by their nature , uncertain and based upon complex judgments and probabilities .

the factors we consider in developing our product litigation liability reserves and other contingent liability amounts include the merits and jurisdiction of the litigation , the nature and the number of other similar current and past matters , the nature of the product and the current assessment of the science subject to the litigation , and the likelihood of settlement and current state of settlement discussions , if any .

in addition , we accrue for certain product liability claims incurred , but not filed , to the extent we can formulate a reasonable estimate of their costs based primarily on historical claims experience and data regarding product usage .
we accrue legal defense costs expected to be incurred in connection with significant product liability contingencies when both probable and reasonably estimable .
we also consider the insurance coverage we have to diminish the exposure for periods covered by insurance .

in assessing our insurance coverage , we consider the policy coverage limits and exclusions , the potential for denial of coverage by the insurance company , the financial condition of the insurers , and the possibility of and length of time for collection .
due to a very restrictive market for product liability insurance , we are self-insured for product liability losses for all our currently marketed products .

in addition to insurance coverage , we also consider any third-party indemnification to which we are entitled or under which we are obligated .
with respect to our third-party indemnification rights , these considerations include the nature of the indemnification , the financial condition of the indemnifying party , and the possibility of and length of time for collection .

the litigation accruals and environmental liabilities and the related estimated insurance recoverables have been reflected on a gross basis as liabilities and assets , respectively , on our consolidated balance sheets .

impairment of indefinite-lived and long-lived assets background and uncertainties we review the carrying value of long-lived assets ( both intangible and tangible ) for potential impairment on a periodic basis and whenever events or changes in circumstances indicate the carrying value of an asset ( or asset group ) may not be recoverable .
we identify impairment by comparing the projected undiscounted cash flows to be generated by the asset ( or asset group ) to its carrying value .

if an impairment is identified , a loss is recorded equal to the excess of the asset 2019s net book value over its fair value , and the cost basis is adjusted .
goodwill and indefinite-lived intangible assets are reviewed for impairment at least annually and when certain impairment indicators are present .
when required , a comparison of fair value to the carrying amount of assets is performed to determine the amount of any impairment.

 |
| table | ( dollars in millions )                                                 | 2018                 | 2017
----------------------------------------------------------------------- | -------------------- | --------------------
sales return rebate and discount liabilities beginning of year          | $ 4172.0             | $ 3601.8
reduction of net sales due to sales returns discounts and rebates ( 1 ) | 12529.6              | 10603.4
cash payments of discounts and rebates                                  | -12023.4 ( 12023.4 ) | -10033.2 ( 10033.2 )
sales return rebate and discount liabilities end of year                | $ 4678.2             | $ 4172.0 |


| _id | dd4bc80a2 |
| title |  |
| text | capital asset purchases associated with the retail segment were $ 294 million in 2007 , bringing the total capital asset purchases since inception of the retail segment to $ 1.0 billion .
as of september 29 , 2007 , the retail segment had approximately 7900 employees and had outstanding operating lease commitments associated with retail store space and related facilities of $ 1.1 billion .
the company would incur substantial costs if it were to close multiple retail stores .

such costs could adversely affect the company 2019s financial condition and operating results .
other segments the company 2019s other segments , which consists of its asia pacific and filemaker operations , experienced an increase in net sales of $ 406 million , or 30% ( 30 % ) during 2007 compared to 2006 .
this increase related primarily to a 58% ( 58 % ) increase in sales of mac portable products and strong ipod sales in the company 2019s asia pacific region .

during 2006 , net sales in other segments increased 35% ( 35 % ) compared to 2005 primarily due to an increase in sales of ipod and mac portable products .
strong sales growth was a result of the introduction of the updated ipods featuring video-playing capabilities and the new intel-based mac portable products that translated to a 16% ( 16 % ) increase in mac unit sales during 2006 compared to 2005 .

gross margin gross margin for each of the last three fiscal years are as follows ( in millions , except gross margin percentages ) : september 29 , september 30 , september 24 , 2007 2006 2005 .

gross margin percentage of 34.0% ( 34.0 % ) in 2007 increased significantly from 29.0% ( 29.0 % ) in 2006 .
the primary drivers of this increase were more favorable costs on certain commodity components , including nand flash memory and dram memory , higher overall revenue that provided for more leverage on fixed production costs and a higher percentage of revenue from the company 2019s direct sales channels .

the company anticipates that its gross margin and the gross margins of the personal computer , consumer electronics and mobile communication industries will be subject to pressure due to price competition .

the company expects gross margin percentage to decline sequentially in the first quarter of 2008 primarily as a result of the full-quarter impact of product transitions and reduced pricing that were effected in the fourth quarter of 2007 , lower sales of ilife and iwork in their second quarter of availability , seasonally higher component costs , and a higher mix of indirect sales .

these factors are expected to be partially offset by higher sales of the company 2019s mac os x operating system due to the introduction of mac os x version 10.5 leopard ( 2018 2018mac os x leopard 2019 2019 ) that became available in october 2007 .
the foregoing statements regarding the company 2019s expected gross margin percentage are forward-looking .
there can be no assurance that current gross margin percentage will be maintained or targeted gross margin percentage levels will be achieved .

in general , gross margins and margins on individual products will remain under downward pressure due to a variety of factors , including continued industry wide global pricing pressures , increased competition , compressed product life cycles , potential increases in the cost and availability of raw material and outside manufacturing services , and a potential shift in the company 2019s sales mix towards products with lower gross margins .

in response to these competitive pressures , the company expects it will continue to take pricing actions with respect to its products .
gross margins could also be affected by the company 2019s ability to effectively manage product quality and warranty costs and to stimulate

 |
| table | | september 29 2007 | september 30 2006 | september 24 2005
----------------------- | ----------------- | ----------------- | -----------------
net sales               | $ 24006           | $ 19315           | $ 13931
cost of sales           | 15852             | 13717             | 9889
gross margin            | $ 8154            | $ 5598            | $ 4042
gross margin percentage | 34.0% ( 34.0 % )  | 29.0% ( 29.0 % )  | 29.0% ( 29.0 % ) |


| _id | dd4c55484 |
| title |  |
| text | american tower corporation and subsidiaries notes to consolidated financial statements 2014 ( continued ) to purchase 3924 and 911 shares , respectively .
in october 2005 , in connection with the exercise by mr .
gearon of his right to require the company to purchase his interest in atc south america , these options vested in full and were exercised .

upon exercise of these options , the holders received 4428 shares of atc south america , net of 1596 shares retained by the company to satisfy employee tax withholding obligations .
the 1596 shares retained by the company were treated as a repurchase of a minority interest in accordance with sfas no .
141 .

141 .
as a result , the company recorded a purchase price allocation adjustment of $ 5.6 million as an increase to intangible assets and a corresponding increase in minority interest as of the date of acquisition .
the holders had the right to require the company to purchase their shares of atc south america at their then fair market value six months and one day following their issuance .

in april 2006 , this repurchase right was exercised , and the company paid these holders an aggregate of $ 18.9 million in cash , which was the fair market value of their interests on the date of exercise of their repurchase right , as determined by the company 2019s board of directors with the assistance of an independent financial advisor .
12 .

impairments , net loss on sale of long-lived assets , restructuring and merger related expense the significant components reflected in impairments , net loss on sale of long-lived assets , restructuring and merger related expense in the accompanying consolidated statements of operations include the following : impairments and net loss on sale of long-lived assets 2014during the years ended december 31 , 2006 , 2005 and 2004 , the company recorded impairments and net loss on sale of long-lived assets (

and net loss on sale of long-lived assets ( primarily related to its rental and management segment ) of $ 3.0 million , $ 19.1 million and $ 22.3 million , respectively .

2022 non-core asset impairment charges 2014during the years ended december 31 , 2006 and 2005 respectively , the company recorded net losses associated with the sales of certain non-core towers and other assets , as well as impairment charges to write-down certain assets to net realizable value after an indicator of potential impairment had been identified .

as a result , the company recorded net losses and impairments of approximately $ 2.0 million , $ 16.8 million and $ 17.7 million for the years ended december 31 , 2006 , 2005 and 2004 , respectively .
the net loss for the year ended december 31 , 2006 is comprised net losses from asset sales and other impairments of $ 7.0 million , offset by gains from asset sales of $ 5.1 million .

2022 construction-in-progress impairment charges 2014for the years ended december 31 , 2006 , 2005 and 2004 , the company wrote-off approximately $ 1.0 million , $ 2.3 million and $ 4.6 million , respectively , of construction-in-progress costs , primarily associated with sites that it no longer planned to build .

restructuring expense 2014the following table displays activity with respect to the accrued restructuring liability for the years ended december 31 , 2004 , 2005 and 2006 ( in thousands ) : liability as of january 1 , expense payments liability december 31 , expense payments liability december 31 , expense payments liability december 31 .

the accrued restructuring liability is reflected in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of december 31 , 2005 .
during the year ended december 31 , 2006 , the company

 |
| table | | liability as of january 1 2004 | 2004 expense | 2004 cash payments | liability as of december 31 2004 | 2005 expense | 2005 cash payments | liability as of december 31 2005 | 2006 expense   | 2006 cash payments | liability as of december 31 2006
--------------------------------------------------- | ------------------------------ | ------------ | ------------------ | -------------------------------- | ------------ | ------------------ | -------------------------------- | -------------- | ------------------ | --------------------------------
employee separations                                | $ 2239                         | $ 823        | $ -2397 ( 2397 )   | $ 665                            | $ 84         | $ -448 ( 448 )     | $ 301                            | $ -267 ( 267 ) | $ -34 ( 34 )       | $ 0
lease terminations and other facility closing costs | 1450                           | -131 ( 131 ) | -888 ( 888 )       | 431                              | 12           | -325 ( 325 )       | 118                              | -10 ( 10 )     | -108 ( 108 )       | 0
total                                               | $ 3689                         | $ 692        | $ -3285 ( 3285 )   | $ 1096                           | $ 96         | $ -773 ( 773 )     | $ 419                            | $ -277 ( 277 ) | $ -142 ( 142 )     | $ 0 |


| _id | dd4be9ad6 |
| title |  |
| text | net revenue utility following is an analysis of the change in net revenue comparing 2013 to 2012 .
amount ( in millions ) .

the retail electric price variance is primarily due to : 2022 a formula rate plan increase at entergy louisiana , effective january 2013 , which includes an increase relating to the waterford 3 steam generator replacement project , which was placed in service in december 2012 .

the net income effect of the formula rate plan increase is limited to a portion representing an allowed return on equity with the remainder offset by costs included in other operation and maintenance expenses , depreciation expenses , and taxes other than income taxes ; 2022 the recovery of hinds plant costs through the power management rider at entergy mississippi , as approved by the mpsc , effective with the first billing cycle of 2013 .

the net income effect of the hinds plant cost recovery is limited to a portion representing an allowed return on equity on the net plant investment with the remainder offset by the hinds plant costs in other operation and maintenance expenses , depreciation expenses , and taxes other than income taxes ; 2022 an increase in the capacity acquisition rider at entergy arkansas , as approved by the apsc , effective with the first billing cycle of december 2012 , relating to the hot spring plant acquisition .

the net income effect of the hot spring plant cost recovery is limited to a portion representing an allowed return on equity on the net plant investment with the remainder offset by the hot spring plant costs in other operation and maintenance expenses , depreciation expenses , and taxes other than income taxes ; 2022 increases in the energy efficiency rider , as approved by the apsc , effective july 2013 and july 2012 .

energy efficiency revenues are offset by costs included in other operation and maintenance expenses and have no effect on net income ; 2022 an annual base rate increase at entergy texas , effective july 2012 , as a result of the puct 2019s order that was issued in september 2012 in the november 2011 rate case ; and 2022 a formula rate plan increase at entergy mississippi , effective september 2013 .
see note 2 to the financial statements for a discussion of rate proceedings .

the louisiana act 55 financing savings obligation variance results from a regulatory charge recorded in the second quarter 2012 because entergy gulf states louisiana and entergy louisiana agreed to share with customers the savings from an irs settlement related to the uncertain tax position regarding the hurricane katrina and hurricane rita louisiana act 55 financing .
see note 3 to the financial statements for additional discussion of the tax settlement .

entergy corporation and subsidiaries management's financial discussion and analysis

 |
| table | | amount ( in millions )
--------------------------------------------- | ----------------------
2012 net revenue                              | $ 4969
retail electric price                         | 236
louisiana act 55 financing savings obligation | 165
grand gulf recovery                           | 75
volume/weather                                | 40
fuel recovery                                 | 35
miso deferral                                 | 12
decommissioning trusts                        | -23 ( 23 )
other                                         | 15
2013 net revenue                              | $ 5524 |