| _id | dd496f77e |
| title |  |
| text | table of contents adobe inc .
notes to consolidated financial statements ( continued ) certain states and foreign jurisdictions to fully utilize available tax credits and other attributes .
the deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized .
we provide u.s .

we provide u.s .
income taxes on the earnings of foreign subsidiaries unless the subsidiaries 2019 earnings are considered permanently reinvested outside the united states or are exempted from taxation as a result of the new territorial tax system .
to the extent that the foreign earnings previously treated as permanently reinvested are repatriated , the related u.s .
tax liability may be reduced by any foreign income taxes paid on these earnings .

as of november 30 , 2018 , the cumulative amount of earnings upon which u.s .
income taxes have not been provided is approximately $ 275 million .
the unrecognized deferred tax liability for these earnings is approximately $ 57.8 million .
as of november 30 , 2018 , we have net operating loss carryforwards of approximately $ 881.1 million for federal and $ 349.7 million for state .

we also have federal , state and foreign tax credit carryforwards of approximately $ 8.8 million , $ 189.9 million and $ 14.9 million , respectively .
the net operating loss carryforward assets and tax credits will expire in various years from fiscal 2019 through 2036 .
the state tax credit carryforwards and a portion of the federal net operating loss carryforwards can be carried forward indefinitely .

the net operating loss carryforward assets and certain credits are reduced by the valuation allowance and are subject to an annual limitation under internal revenue code section 382 , the carrying amount of which are expected to be fully realized .
as of november 30 , 2018 , a valuation allowance of $ 174.5 million has been established for certain deferred tax assets related to certain state and foreign assets .
for fiscal 2018 , the total change in the valuation allowance was $ 80.9 million .

accounting for uncertainty in income taxes during fiscal 2018 and 2017 , our aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows ( in thousands ) : .

the combined amount of accrued interest and penalties related to tax positions taken on our tax returns were approximately $ 24.6 million and $ 23.6 million for fiscal 2018 and 2017 , respectively .
these amounts were included in long-term income taxes payable in their respective years .
we file income tax returns in the united states on a federal basis and in many u.s .
state and foreign jurisdictions .

state and foreign jurisdictions .
we are subject to the continual examination of our income tax returns by the irs and other domestic and foreign tax authorities .
our major tax jurisdictions are ireland , california and the united states .
for ireland , california and the united states , the earliest fiscal years open for examination are 2008 , 2014 and 2015 , respectively .

we regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our provision for income taxes and have reserved for potential adjustments that may result from these examinations .
we believe such estimates to be reasonable ; however , there can be no assurance that the final determination of any of these examinations will not have an adverse effect on our operating results and financial position .

the timing of the resolution of income tax examinations is highly uncertain as are the amounts and timing of tax payments that are part of any audit settlement process .
these events could cause large fluctuations in the balance of short-term and long- term assets , liabilities and income taxes payable .
we believe that within the next 12 months , it is reasonably possible that either certain audits will conclude or statutes of limitations on certain income tax examination periods will expire , or both .

given the uncertainties described above , we can only determine a range of estimated potential effect in underlying unrecognized tax benefits ranging from $ 0 to approximately $ 45 million.

 |
| table | | 2018             | 2017
---------------------------------------------------------------------------- | ---------------- | ----------------
beginning balance                                                            | $ 172945         | $ 178413
gross increases in unrecognized tax benefits 2013 prior year tax positions   | 16191            | 3680
gross decreases in unrecognized tax benefits 2013 prior year tax positions   | -4000 ( 4000 )   | -30166 ( 30166 )
gross increases in unrecognized tax benefits 2013 current year tax positions | 60721            | 24927
settlements with taxing authorities                                          | 2014             | -3876 ( 3876 )
lapse of statute of limitations                                              | -45922 ( 45922 ) | -8819 ( 8819 )
foreign exchange gains and losses                                            | -3783 ( 3783 )   | 8786
ending balance                                                               | $ 196152         | $ 172945 |


| _id | dd4b8ece4 |
| title |  |
| text | transfer agent and registrar for common stock the transfer agent and registrar for our common stock is : computershare shareowner services llc 480 washington boulevard 29th floor jersey city , new jersey 07310 telephone : ( 877 ) 363-6398 sales of unregistered securities not applicable .
repurchase of equity securities the following table provides information regarding our purchases of our equity securities during the period from october 1 , 2015 to december 31 , 2015 .

total number of shares ( or units ) purchased 1 average price paid per share ( or unit ) 2 total number of shares ( or units ) purchased as part of publicly announced plans or programs 3 maximum number ( or approximate dollar value ) of shares ( or units ) that may yet be purchased under the plans or programs 3 .

1 included shares of our common stock , par value $ 0.10 per share , withheld under the terms of grants under employee stock-based compensation plans to offset tax withholding obligations that occurred upon vesting and release of restricted shares ( the 201cwithheld shares 201d ) .
we repurchased 1004 withheld shares in october 2015 , 1777 withheld shares in november 2015 and 9342 withheld shares in december 2015 .

2 the average price per share for each of the months in the fiscal quarter and for the three-month period was calculated by dividing the sum of the applicable period of the aggregate value of the tax withholding obligations and the aggregate amount we paid for shares acquired under our stock repurchase program , described in note 5 to the consolidated financial statements , by the sum of the number of withheld shares and the number of shares acquired in our stock repurchase program .

3 in february 2015 , the board authorized a share repurchase program to repurchase from time to time up to $ 300.0 million , excluding fees , of our common stock ( the 201c2015 share repurchase program 201d ) .
on february 12 , 2016 , we announced that our board had approved a new share repurchase program to repurchase from time to time up to $ 300.0 million , excluding fees , of our common stock .

the new authorization is in addition to any amounts remaining for repurchase under the 2015 share repurchase program .
there is no expiration date associated with the share repurchase programs.

 |
| table | | total number ofshares ( or units ) purchased1 | average price paidper share ( or unit ) 2 | total number ofshares ( or units ) purchased as part ofpublicly announcedplans or programs3 | maximum number ( or approximate dollar value ) of shares ( or units ) that may yet be purchased under the plans or programs3
--------------- | --------------------------------------------- | ----------------------------------------- | ------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------
october 1 - 31  | 2140511                                       | $ 20.54                                   | 2139507                                                                                | $ 227368014
november 1 - 30 | 1126378                                       | $ 22.95                                   | 1124601                                                                                | $ 201557625
december 1 - 31 | 1881992                                       | $ 22.97                                   | 1872650                                                                                | $ 158553178
total           | 5148881                                       | $ 21.96                                   | 5136758                                                                                | |


| _id | dd4c2b8f0 |
| title |  |
| text | entergy texas , inc .

and subsidiaries management 2019s financial discussion and analysis in addition to the contractual obligations given above , entergy texas expects to contribute approximately $ 17 million to its qualified pension plans and approximately $ 3.2 million to other postretirement health care and life insurance plans in 2017 , although the 2017 required pension contributions will be known with more certainty when the january 1 , 2017 valuations are completed , which is expected by april 1 , 2017 .

see 201ccritical accounting estimates - qualified pension and other postretirement benefits 201d below for a discussion of qualified pension and other postretirement benefits funding .
also in addition to the contractual obligations , entergy texas has $ 15.6 million of unrecognized tax benefits and interest net of unused tax attributes and payments for which the timing of payments beyond 12 months cannot be reasonably estimated due to uncertainties in the timing of effective settlement of tax positions .

see note 3 to the financial statements for additional information regarding unrecognized tax benefits .

in addition to routine capital spending to maintain operations , the planned capital investment estimate for entergy texas includes specific investments such as the montgomery county power station discussed below ; transmission projects to enhance reliability , reduce congestion , and enable economic growth ; distribution spending to enhance reliability and improve service to customers , including initial investment to support advanced metering ; system improvements ; and other investments .

estimated capital expenditures are subject to periodic review and modification and may vary based on the ongoing effects of regulatory constraints and requirements , environmental compliance , business opportunities , market volatility , economic trends , business restructuring , changes in project plans , and the ability to access capital .
management provides more information on long-term debt in note 5 to the financial statements .

as discussed above in 201ccapital structure , 201d entergy texas routinely evaluates its ability to pay dividends to entergy corporation from its earnings .
sources of capital entergy texas 2019s sources to meet its capital requirements include : 2022 internally generated funds ; 2022 cash on hand ; 2022 debt or preferred stock issuances ; and 2022 bank financing under new or existing facilities .

entergy texas may refinance , redeem , or otherwise retire debt prior to maturity , to the extent market conditions and interest and dividend rates are favorable .
all debt and common and preferred stock issuances by entergy texas require prior regulatory approval .
debt issuances are also subject to issuance tests set forth in its bond indenture and other agreements .
entergy texas has sufficient capacity under these tests to meet its foreseeable capital needs .

entergy texas 2019s receivables from or ( payables to ) the money pool were as follows as of december 31 for each of the following years. .

see note 4 to the financial statements for a description of the money pool .
entergy texas has a credit facility in the amount of $ 150 million scheduled to expire in august 2021 .
the credit facility allows entergy texas to issue letters of credit against 50% ( 50 % ) of the borrowing capacity of the facility .
as of december 31 , 2016 , there were no cash borrowings and $ 4.7 million of letters of credit outstanding under the credit facility .

in addition , entergy texas is a party to an uncommitted letter of credit facility as a means to post collateral

 |
| table | 2016             | 2015             | 2014             | 2013
---------------- | ---------------- | ---------------- | ----------------
( in thousands ) | ( in thousands ) | ( in thousands ) | ( in thousands )
$ 681            | ( $ 22068 )      | $ 306            | $ 6287 |


| _id | dd4b9a936 |
| title |  |
| text | increased by $ 105.6 million , or 3.4% ( 3.4 % ) , from 2006 to 2007 .
the following table reflects the components of our revenue growth for the years ended december 31 , 2008 , 2007 and 2006: .

( 1 ) core volume growth for the year ended december 31 , 2006 includes .8% ( .8 % ) associated with hauling waste from the city of toronto to one of our landfills in michigan .
this hauling service is provided to the city at a rate that approximates our cost .
( 2 ) includes the impact of the acquisition of allied in december 2008 .
( 3 ) represents new taxes levied on landfill volumes in certain states that are passed on to customers .

25aa 2008 : during the year ended december 31 , 2008 , our core revenue growth continued to benefit from a broad-based pricing initiative .
in addition , 14.7% ( 14.7 % ) of our revenue growth is due to our acquisition of allied in december 2008 .
revenue growth also benefited from higher fuel surcharges and environmental fees .
however , during 2008 we experienced lower prices for commodities .

we also experienced a decrease in core volumes primarily due to lower commercial and industrial collection volumes and lower landfill volumes resulting from the slowdown in the economy .
we expect to continue to experience lower volumes until economic conditions improve .
25aa 2007 : during the year ended december 31 , 2007 , our revenue growth from core pricing continued to benefit from a broad-based pricing initiative .
our revenue growth also benefited from higher prices for commodities .

however , we experienced a decrease in core volume growth primarily due to lower industrial collection and landfill volumes resulting from the slowdown in residential construction .
25aa 2006 : during the year ended december 31 , 2006 , our revenue growth continued to benefit from our broad-based pricing initiative .
we experienced core volume growth in our collection and landfill lines of business .

this core volume growth was partially offset by hurricane clean-up efforts that took place during the fourth quarter of 2005 .
25aa 2009 outlook : we anticipate internal revenue from core operations to decrease approximately 4.0% ( 4.0 % ) during 2009 .
this decrease is the expected net of growth in core pricing of approximately 4.0% ( 4.0 % ) and an expected decrease in volume of approximately 8.0% ( 8.0 % ) .

our projections assume no deterioration or improvement in the overall economy from that experienced during the fourth quarter of 2008 .
however , our internal growth may remain flat or may decline in 2009 depending on economic conditions and our success in implementing pricing initiatives .
cost of operations .

cost of operations .
cost of operations was $ 2.4 billion , $ 2.0 billion and $ 1.9 billion , or , as a percentage of revenue , 65.6% ( 65.6 % ) , 63.1% ( 63.1 % ) and 62.7% ( 62.7 % ) , for the years ended december 31 , 2008 , 2007 and 2006 , respectively .
the increase in cost of operations in aggregate dollars for the year ended december 31 , 2008 versus the comparable 2007 period is primarily a result of our acquisition of allied in december 2008 .

the remaining increase in cost of operations in aggregate dollars and the increase as a percentage of revenue is primarily due to charges we recorded during 2008 of $ 98.0 million related to estimated costs to comply with f&os issued by the oepa and the aoc issued by the epa in response to environmental conditions at our countywide facility in ohio , $ 21.9 million related to environmental conditions at our closed disposal facility %%transmsg*** transmitting job : p14076 pcn : 048000000 ***%%pcmsg|46

job : p14076 pcn : 048000000 ***%%pcmsg|46 |00044|yes|no|02/28/2009 17:08|0|0|page is valid , no graphics -- color : d|

 |
| table | | 2008             | 2007           | 2006
-------------------------------------- | ---------------- | -------------- | --------------
core price                             | 4.0% ( 4.0 % )   | 4.2% ( 4.2 % ) | 3.4% ( 3.4 % )
fuel surcharges                        | 1.8              | .2             | 1.1
environmental fees                     | .4               | .2             | .4
recycling commodities                  | .1               | .9             | -.1 ( .1 )
total price                            | 6.3              | 5.5            | 4.8
core volume ( 1 )                      | -3.9 ( 3.9 )     | -1.5 ( 1.5 )   | 2.4
non-core volume                        | .1               | -.1 ( .1 )     | 2014
total volume                           | -3.8 ( 3.8 )     | -1.6 ( 1.6 )   | 2.4
total internal growth                  | 2.5              | 3.9            | 7.2
acquisitions net of divestitures ( 2 ) | 13.4             | -.5 ( .5 )     | -.1 ( .1 )
taxes ( 3 )                            | .1               | 2014           | .1
total revenue growth                   | 16.0% ( 16.0 % ) | 3.4% ( 3.4 % ) | 7.2% ( 7.2 % ) |


| _id | dd4be2290 |
| title |  |
| text | entergy corporation and subsidiaries notes to financial statements liability to $ 60 million , and recorded the $ 2.7 million difference as a credit to interest expense .
the $ 60 million remaining liability was eliminated upon payment of the cash portion of the purchase price .

as of december 31 , 2016 , entergy louisiana , in connection with the waterford 3 lease obligation , had a future minimum lease payment ( reflecting an interest rate of 8.09% ( 8.09 % ) ) of $ 57.5 million , including $ 2.3 million in interest , due january 2017 that is recorded as long-term debt .
in february 2017 the leases were terminated and the leased assets were conveyed to entergy louisiana .

grand gulf lease obligations in 1988 , in two separate but substantially identical transactions , system energy sold and leased back undivided ownership interests in grand gulf for the aggregate sum of $ 500 million .
the initial term of the leases expired in july 2015 .
system energy renewed the leases for fair market value with renewal terms expiring in july 2036 .

at the end of the new lease renewal terms , system energy has the option to repurchase the leased interests in grand gulf or renew the leases at fair market value .
in the event that system energy does not renew or purchase the interests , system energy would surrender such interests and their associated entitlement of grand gulf 2019s capacity and energy .
system energy is required to report the sale-leaseback as a financing transaction in its financial statements .

for financial reporting purposes , system energy expenses the interest portion of the lease obligation and the plant depreciation .
however , operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes .

consistent with a recommendation contained in a ferc audit report , system energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis , resulting in a zero net balance for the regulatory asset at the end of the lease term .

the amount was a net regulatory liability of $ 55.6 million and $ 55.6 million as of december 31 , 2016 and 2015 , respectively .
as of december 31 , 2016 , system energy , in connection with the grand gulf sale and leaseback transactions , had future minimum lease payments ( reflecting an implicit rate of 5.13% ( 5.13 % ) ) that are recorded as long-term debt , as follows : amount ( in thousands ) .

 |
| table | | amount ( in thousands )
------------------------------------------- | -----------------------
2017                                        | $ 17188
2018                                        | 17188
2019                                        | 17188
2020                                        | 17188
2021                                        | 17188
years thereafter                            | 257812
total                                       | 343752
less : amount representing interest         | 309393
present value of net minimum lease payments | $ 34359 |


| _id | dd4be687c |
| title |  |
| text | note 17 .
accumulated other comprehensive losses : pmi's accumulated other comprehensive losses , net of taxes , consisted of the following: .

reclassifications from other comprehensive earnings the movements in accumulated other comprehensive losses and the related tax impact , for each of the components above , that are due to current period activity and reclassifications to the income statement are shown on the consolidated statements of comprehensive earnings for the years ended december 31 , 2017 , 2016 , and 2015 .

for the years ended december 31 , 2017 , 2016 , and 2015 , $ 2 million , $ ( 5 ) million and $ 1 million of net currency translation adjustment gains/ ( losses ) were transferred from other comprehensive earnings to marketing , administration and research costs in the consolidated statements of earnings , respectively , upon liquidation of subsidiaries .
for additional information , see note 13 .
benefit plans and note 15 .

benefit plans and note 15 .
financial instruments for disclosures related to pmi's pension and other benefits and derivative financial instruments .
note 18 .
contingencies : tobacco-related litigation legal proceedings covering a wide range of matters are pending or threatened against us , and/or our subsidiaries , and/or our indemnitees in various jurisdictions .

our indemnitees include distributors , licensees and others that have been named as parties in certain cases and that we have agreed to defend , as well as to pay costs and some or all of judgments , if any , that may be entered against them .
pursuant to the terms of the distribution agreement between altria group , inc .
( "altria" ) and pmi , pmi will indemnify altria and philip morris usa inc .
( "pm usa" ) , a u.s .

( "pm usa" ) , a u.s .
tobacco subsidiary of altria , for tobacco product claims based in substantial part on products manufactured by pmi or contract manufactured for pmi by pm usa , and pm usa will indemnify pmi for tobacco product claims based in substantial part on products manufactured by pm usa , excluding tobacco products contract manufactured for pmi .
it is possible that there could be adverse developments in pending cases against us and our subsidiaries .

an unfavorable outcome or settlement of pending tobacco-related litigation could encourage the commencement of additional litigation .
damages claimed in some of the tobacco-related litigation are significant and , in certain cases in brazil , canada and nigeria , range into the billions of u.s .
dollars .

dollars .
the variability in pleadings in multiple jurisdictions , together with the actual experience of management in litigating claims , demonstrate that the monetary relief that may be specified in a lawsuit bears little relevance to the ultimate outcome .
much of the tobacco-related litigation is in its early stages , and litigation is subject to uncertainty .
however , as discussed below , we have to date been largely successful in defending tobacco-related litigation .

we and our subsidiaries record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated .

at the present time , while it is reasonably possible that an unfavorable outcome in a case may occur , after assessing the information available to it ( i ) management has not concluded that it is probable that a loss has been incurred in any of the pending tobacco-related cases ; ( ii ) management is unable to estimate the possible loss or range of loss for any of the pending tobacco-related cases ; and ( iii ) accordingly , no estimated loss has been accrued in the consolidated financial statements for

in the consolidated financial statements for unfavorable outcomes in these cases , if any .

legal defense costs are expensed as incurred.

 |
| table | ( losses ) earnings ( in millions )          | ( losses ) earnings 2017 | ( losses ) earnings 2016 | 2015
-------------------------------------------- | ------------------------ | ------------------------ | ----------------
currency translation adjustments             | $ -5761 ( 5761 )         | $ -6091 ( 6091 )         | $ -6129 ( 6129 )
pension and other benefits                   | -2816 ( 2816 )           | -3565 ( 3565 )           | -3332 ( 3332 )
derivatives accounted for as hedges          | 42                       | 97                       | 59
total accumulated other comprehensive losses | $ -8535 ( 8535 )         | $ -9559 ( 9559 )         | $ -9402 ( 9402 ) |


| _id | dd4bea698 |
| title |  |
| text | hologic , inc .
notes to consolidated financial statements ( continued ) ( in thousands , except per share data ) determination of the measurement date for the market price of acquirer securities issued in a purchase business combination .
the components and allocation of the purchase price , consists of the following approximate amounts: .

the company has begun to assess and formulate a plan to restructure certain of r2 2019s historical activities .
as of the acquisition date the company recorded a liability of approximately $ 798 in accordance with eitf issue no .
95-3 , recognition of liabilities in connection with a purchase business combination , related to the termination of certain employees and loss related to the abandonment of certain lease space under this plan of which approximately $ 46 has been paid as of september 30 , 2006 .

the company believes this plan will be finalized within one year from the acquisition date and will record any additional liabilities at such time resulting in an increase to goodwill .
the final purchase price allocations will be completed within one year of the acquisition and any adjustments are not expected to have a material impact on the company 2019s financial position or results of operation .

as part of the purchase price allocation , all intangible assets that were a part of the acquisition were identified and valued .
it was determined that only customer relationships , trademarks and developed technology had separately identifiable values .
customer relationships represent r2 2019s strong active customer base , dominant market position and strong partnership with several large companies .
trademarks represent the r2 product names that the company intends to continue to use .

developed technology represents currently marketable purchased products that the company continues to resell as well as utilize to enhance and incorporate into the company 2019s existing products .
the estimated $ 10200 of purchase price allocated to in-process research and development projects primarily related to r2s digital cad products .
the projects are expected to add direct digital algorithm capabilities as well as a new platform technology to analyze images and breast density measurement .

the project is approximately 20% ( 20 % ) complete and the company expects to spend approximately $ 3100 over the year to complete .
the deferred income tax asset relates to the tax effect of acquired net operating loss carry forwards that the company believes are realizable partially offset by acquired identifiable intangible assets , and fair value adjustments to acquired inventory as such amounts are not deductible for tax purposes .
acquisition of suros surgical systems , inc .

acquisition of suros surgical systems , inc .
on july 27 , 2006 , the company completed the acquisition of suros surgical systems , inc. , pursuant to an agreement and plan of merger dated april 17 , 2006 .
the results of operations for suros have been included in the company 2019s consolidated financial statements from the date of acquisition as part of its mammography business segment .

suros surgical , located in indianapolis , indiana , develops , manufactures and sells minimally invasive interventional breast biopsy technology and products for biopsy , tissue removal and biopsy site marking.

 |
| table | net tangible assets acquired as of july 13 2006 | $ 800
----------------------------------------------- | --------
in-process research and development             | 10200
developed technology and know how               | 39500
customer relationship                           | 15700
trade name                                      | 3300
order backlog                                   | 800
deferred income taxes                           | 4400
goodwill                                        | 145900
estimated purchase price                        | $ 220600 |


| _id | dd4c5feac |
| title |  |
| text | notes to the consolidated financial statements union pacific corporation and subsidiary companies for purposes of this report , unless the context otherwise requires , all references herein to the 201ccorporation 201d , 201ccompany 201d , 201cupc 201d , 201cwe 201d , 201cus 201d , and 201cour 201d mean union pacific corporation and its subsidiaries , including union pacific railroad company , which will be separately referred to herein as 201cuprr 201d or the 201crailroad 201d .
1 .

1 .
nature of operations operations and segmentation 2013 we are a class i railroad operating in the u.s .
our network includes 32084 route miles , linking pacific coast and gulf coast ports with the midwest and eastern u.s .
gateways and providing several corridors to key mexican gateways .
we own 26064 miles and operate on the remainder pursuant to trackage rights or leases .

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

although we provide and analyze revenue by commodity group , we treat the financial results of the railroad as one segment due to the integrated nature of our rail network .
the following table provides freight revenue by commodity group: .

although our revenues are principally derived from customers domiciled in the u.s. , the ultimate points of origination or destination for some products transported by us are outside the u.s .
each of our commodity groups includes revenue from shipments to and from mexico .
included in the above table are freight revenues from our mexico business which amounted to $ 2.2 billion in 2015 , $ 2.3 billion in 2014 , and $ 2.1 billion in 2013 .

basis of presentation 2013 the consolidated financial statements are presented in accordance with accounting principles generally accepted in the u.s .
( gaap ) as codified in the financial accounting standards board ( fasb ) accounting standards codification ( asc ) .
certain prior period amounts in the statement of cash flows and income tax footnote have been aggregated or disaggregated further to conform to the current period financial presentation .
2 .

2 .
significant accounting policies principles of consolidation 2013 the consolidated financial statements include the accounts of union pacific corporation and all of its subsidiaries .
investments in affiliated companies ( 20% ( 20 % ) to 50% ( 50 % ) owned ) are accounted for using the equity method of accounting .
all intercompany transactions are eliminated .
we currently have no less than majority-owned investments that require consolidation under variable interest entity requirements .

cash and cash equivalents 2013 cash equivalents consist of investments with original maturities of three months or less .
accounts receivable 2013 accounts receivable includes receivables reduced by an allowance for doubtful accounts .
the allowance is based upon historical losses , credit worthiness of customers , and current

 |
| table | millions                 | 2015    | 2014    | 2013
------------------------ | ------- | ------- | -------
agricultural products    | $ 3581  | $ 3777  | $ 3276
automotive               | 2154    | 2103    | 2077
chemicals                | 3543    | 3664    | 3501
coal                     | 3237    | 4127    | 3978
industrial products      | 3808    | 4400    | 3822
intermodal               | 4074    | 4489    | 4030
total freight revenues   | $ 20397 | $ 22560 | $ 20684
other revenues           | 1416    | 1428    | 1279
total operating revenues | $ 21813 | $ 23988 | $ 21963 |


| _id | dd4bd7f7a |
| title |  |
| text | adobe systems incorporated notes to consolidated financial statements ( continued ) we review our goodwill for impairment annually , or more frequently , if facts and circumstances warrant a review .
we completed our annual impairment test in the second quarter of fiscal 2013 .
we elected to use the step 1 quantitative assessment for our three reporting units 2014digital media , digital marketing and print and publishing 2014and determined that there was no impairment of goodwill .

there is no significant risk of material goodwill impairment in any of our reporting units , based upon the results of our annual goodwill impairment test .
we amortize intangible assets with finite lives over their estimated useful lives and review them for impairment whenever an impairment indicator exists .
we continually monitor events and changes in circumstances that could indicate carrying amounts of our long-lived assets , including our intangible assets may not be recoverable .

when such events or changes in circumstances occur , we assess recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows .
if the future undiscounted cash flows are less than the carrying amount of these assets , we recognize an impairment loss based on any excess of the carrying amount over the fair value of the assets .
we did not recognize any intangible asset impairment charges in fiscal 2013 , 2012 or 2011 .

our intangible assets are amortized over their estimated useful lives of 1 to 14 years .
amortization is based on the pattern in which the economic benefits of the intangible asset will be consumed or on a straight-line basis when the consumption pattern is not apparent .
the weighted average useful lives of our intangible assets were as follows : weighted average useful life ( years ) .

software development costs capitalization of software development costs for software to be sold , leased , or otherwise marketed begins upon the establishment of technological feasibility , which is generally the completion of a working prototype that has been certified as having no critical bugs and is a release candidate .
amortization begins once the software is ready for its intended use , generally based on the pattern in which the economic benefits will be consumed .

to date , software development costs incurred between completion of a working prototype and general availability of the related product have not been material .
internal use software we capitalize costs associated with customized internal-use software systems that have reached the application development stage .

such capitalized costs include external direct costs utilized in developing or obtaining the applications and payroll and payroll-related expenses for employees , who are directly associated with the development of the applications .
capitalization of such costs begins when the preliminary project stage is complete and ceases at the point in which the project is substantially complete and is ready for its intended purpose .
income taxes we use the asset and liability method of accounting for income taxes .

under this method , income tax expense is recognized for the amount of taxes payable or refundable for the current year .
in addition , deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities , and for operating losses and tax credit carryforwards .
we record a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not.

 |
| table | | weighted averageuseful life ( years )
------------------------------------ | -------------------------------------
purchased technology                 | 6
customer contracts and relationships | 10
trademarks                           | 8
acquired rights to use technology    | 8
localization                         | 1
other intangibles                    | 3 |


| _id | dd4c3eb94 |
| title |  |
| text | note 18 2013 earnings per share ( eps ) basic eps is calculated by dividing net earnings attributable to allegion plc by the weighted-average number of ordinary shares outstanding for the applicable period .
diluted eps is calculated after adjusting the denominator of the basic eps calculation for the effect of all potentially dilutive ordinary shares , which in the company 2019s case , includes shares issuable under share-based compensation plans .

the following table summarizes the weighted-average number of ordinary shares outstanding for basic and diluted earnings per share calculations: .

at december 31 , 2018 , 0.1 million stock options were excluded from the computation of weighted-average diluted shares outstanding because the effect of including these shares would have been anti-dilutive .
note 19 2013 net revenues net revenues are recognized based on the satisfaction of performance obligations under the terms of a contract .

a performance obligation is a promise in a contract to transfer control of a distinct product or to provide a service , or a bundle of products or services , to a customer , and is the unit of account under asc 606 .
the company has two principal revenue streams , tangible product sales and services .
approximately 99% ( 99 % ) of consolidated net revenues involve contracts with a single performance obligation , which is the transfer of control of a product or bundle of products to a customer .

transfer of control typically occurs when goods are shipped from the company's facilities or at other predetermined control transfer points ( for instance , destination terms ) .
net revenues are measured as the amount of consideration expected to be received in exchange for transferring control of the products and takes into account variable consideration , such as sales incentive programs including discounts and volume rebates .

the existence of these programs does not preclude revenue recognition but does require the company's best estimate of the variable consideration to be made based on expected activity , as these items are reserved for as a deduction to net revenues over time based on the company's historical rates of providing these incentives and annual forecasted sales volumes .
the company also offers a standard warranty with most product sales and the value of such warranty is included in the contractual price .

the corresponding cost of the warranty obligation is accrued as a liability ( see note 20 ) .
the company's remaining net revenues involve services , including installation and consulting .
unlike the single performance obligation to ship a product or bundle of products , the service revenue stream delays revenue recognition until the service performance obligations are satisfied .

in some instances , customer acceptance provisions are included in sales arrangements to give the buyer the ability to ensure the service meets the criteria established in the order .
in these instances , revenue recognition is deferred until the performance obligations are satisfied , which could include acceptance terms specified in the arrangement being fulfilled through customer acceptance or a demonstration that established criteria have been satisfied .

during the year ended december 31 , 2018 , no adjustments related to performance obligations satisfied in previous periods were recorded .
upon adoption of asc 606 , the company used the practical expedients to omit the disclosure of remaining performance obligations for contracts with an original expected duration of one year or less and for contracts where the company has the right to invoice for performance completed to date .

the transaction price is not adjusted for the effects of a significant financing component , as the time period between control transfer of goods and services is less than one year .
sales , value-added and other similar taxes collected by the company are excluded from net revenues .
the company has also elected to account for shipping and handling activities that occur after control of the related goods transfers as fulfillment activities instead of performance obligations .

these activities are included in cost of goods sold in the consolidated statements of comprehensive income .
the company 2019s payment terms are generally consistent with the industries in which their businesses operate .
the following table shows the company's net revenues for the years ended december 31 , based on the two principal revenue streams , tangible product sales and services , disaggregated by business segment .

net revenues are shown by tangible product sales and services , as contract terms , conditions and economic factors affecting the nature , amount , timing and uncertainty around revenue recognition and cash flows are substantially similar within each of the two principal revenue streams:

 |
| table | in millions                                 | 2018 | 2017 | 2016
------------------------------------------- | ---- | ---- | ----
weighted-average number of basic shares     | 95.0 | 95.1 | 95.8
shares issuable under incentive stock plans | 0.7  | 0.9  | 1.1
weighted-average number of diluted shares   | 95.7 | 96.0 | 96.9 |


| _id | dd4bb60a0 |
| title |  |
| text | 2022 international .
in general , our international markets are less advanced with respect to the current technologies deployed for wireless services .
as a result , demand for our communications sites is driven by continued voice network investments , new market entrants and initial 3g data network deployments .

for example , in india , nationwide voice networks continue to be deployed as wireless service providers are beginning their initial investments in 3g data networks , as a result of recent spectrum auctions .

in mexico and brazil , where nationwide voice networks have been deployed , some incumbent wireless service providers continue to invest in their 3g data networks , and recent spectrum auctions have enabled other incumbent wireless service providers and new market entrants to begin their initial investments in 3g data networks .

in markets such as chile and peru , recent spectrum auctions have attracted new market entrants , who are expected to begin their investment in deploying nationwide voice and 3g data networks .
we believe demand for our tower sites will continue in our international markets as wireless service providers seek to remain competitive by increasing the coverage of their networks while also investing in next generation data networks .
rental and management operations new site revenue growth .

during the year ended december 31 , 2010 , we grew our portfolio of communications sites through acquisitions and construction activities , including the acquisition and construction of approximately 7800 sites .
we continue to evaluate opportunities to acquire larger communications site portfolios , both domestically and internationally , that we believe we can effectively integrate into our existing portfolio. .

( 1 ) the majority of sites acquired or constructed internationally during 2010 and 2009 were in india and our newly launched operations in chile , colombia and peru .
network development services segment revenue growth .
as we continue to focus on growing our rental and management operations , we anticipate that our network development services revenue will continue to represent a small percentage of our total revenues .

through our network development services segment , we offer tower-related services , including site acquisition , zoning and permitting services and structural analysis services , which primarily support our site leasing business and the addition of new tenants and equipment on our sites .
rental and management operations expenses .

rental and management operations expenses .
our rental and management operations expenses include our direct site level expenses and consist primarily of ground rent , property taxes , repairs and maintenance and utilities .
these segment level expenses exclude all segment and corporate level selling , general , administrative and development expenses , which are aggregated into one line item entitled selling , general , administrative and development expense .

in general , our rental and management segment level selling , general and administrative expenses do not significantly increase as a result of adding incremental tenants to our legacy sites and typically increase only modestly year-over-year .
as a result , leasing additional space to new tenants on our legacy sites provides significant incremental cash flow .

in geographic areas where we have recently launched operations or are focused on materially expanding our site footprint , we may incur additional segment level selling , general and administrative expenses as we increase our presence in these areas .
our profit margin growth is therefore positively impacted by the addition of new tenants to our legacy sites and can be temporarily diluted by our development activities .
reit election .

reit election .
as we review our tax strategy and assess the utilization of our federal and state nols , we are actively considering an election to a reit for u.s .
federal and , where applicable , state income tax purposes .

we may make the determination to elect reit status for the taxable year beginning january 1 , 2012 , as early as the second half of 2011 , subject to the approval of our board of directors , although there is no certainty as to the timing of a reit election or whether we will make a reit election at all.

 |
| table | new sites ( acquired or constructed ) | 2010 | 2009 | 2008
------------------------------------- | ---- | ---- | ----
domestic                              | 947  | 528  | 160
international ( 1 )                   | 6865 | 3022 | 801 |


| _id | dd4c29028 |
| title |  |
| text | the discount rate assumption was determined for the pension and postretirement benefit plans independently .
at year-end 2011 , the company began using an approach that approximates the process of settlement of obligations tailored to the plans 2019 expected cash flows by matching the plans 2019 cash flows to the coupons and expected maturity values of individually selected bonds .

the yield curve was developed for a universe containing the majority of u.s.-issued aa-graded corporate bonds , all of which were non callable ( or callable with make-whole provisions ) .
historically , for each plan , the discount rate was developed as the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments .

the expected long-term rate of return on plan assets is based on historical and projected rates of return , prior to administrative and investment management fees , for current and planned asset classes in the plans 2019 investment portfolios .
assumed projected rates of return for each of the plans 2019 projected asset classes were selected after analyzing historical experience and future expectations of the returns and volatility of the various asset classes .

based on the target asset allocation for each asset class , the overall expected rate of return for the portfolio was developed , adjusted for historical and expected experience of active portfolio management results compared to the benchmark returns and for the effect of expenses paid from plan assets .
the company 2019s pension expense increases as the expected return on assets decreases .

in the determination of year end 2014 projected benefit plan obligations , the company adopted a new table based on the society of actuaries rp 2014 mortality table including a generational bb-2d projection scale .
the adoption resulted in a significant increase to pension and other postretirement benefit plans 2019 projected benefit obligations .
assumed health care cost trend rates have a significant effect on the amounts reported for the other postretirement benefit plans .

the health care cost trend rate is based on historical rates and expected market conditions .
a one-percentage-point change in assumed health care cost trend rates would have the following effects : one-percentage-point increase one-percentage-point decrease effect on total of service and interest cost components .
.
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$ 5943 $ ( 4887 ) effect on other postretirement benefit obligation .
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$ 105967 $ ( 86179 ) .

the discount rate assumption was determined for the pension and postretirement benefit plans independently .
at year-end 2011 , the company began using an approach that approximates the process of settlement of obligations tailored to the plans 2019 expected cash flows by matching the plans 2019 cash flows to the coupons and expected maturity values of individually selected bonds .

the yield curve was developed for a universe containing the majority of u.s.-issued aa-graded corporate bonds , all of which were non callable ( or callable with make-whole provisions ) .
historically , for each plan , the discount rate was developed as the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments .

the expected long-term rate of return on plan assets is based on historical and projected rates of return , prior to administrative and investment management fees , for current and planned asset classes in the plans 2019 investment portfolios .
assumed projected rates of return for each of the plans 2019 projected asset classes were selected after analyzing historical experience and future expectations of the returns and volatility of the various asset classes .

based on the target asset allocation for each asset class , the overall expected rate of return for the portfolio was developed , adjusted for historical and expected experience of active portfolio management results compared to the benchmark returns and for the effect of expenses paid from plan assets .
the company 2019s pension expense increases as the expected return on assets decreases .

in the determination of year end 2014 projected benefit plan obligations , the company adopted a new table based on the society of actuaries rp 2014 mortality table including a generational bb-2d projection scale .
the adoption resulted in a significant increase to pension and other postretirement benefit plans 2019 projected benefit obligations .
assumed health care cost trend rates have a significant effect on the amounts reported for the other postretirement benefit plans .

the health care cost trend rate is based on historical rates and expected market conditions .
a one-percentage-point change in assumed health care cost trend rates would have the following effects : one-percentage-point increase one-percentage-point decrease effect on total of service and interest cost components .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
$ 5943 $ ( 4887 ) effect on other postretirement benefit obligation .
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.
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$ 105967 $ ( 86179 )

 |
| table | | one-percentage-point increase | one-percentage-point decrease
------------------------------------------------------- | ----------------------------- | -----------------------------
effect on total of service and interest cost components | $ 5943                        | $ -4887 ( 4887 )
effect on other postretirement benefit obligation       | $ 105967                      | $ -86179 ( 86179 ) |


| _id | dd4c111ee |
| title |  |
| text | the aes corporation notes to consolidated financial statements 2014 ( continued ) december 31 , 2011 , 2010 , and 2009 the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed is as follows ( in millions ) : .

at december 31 , 2011 , the assets acquired and liabilities assumed in the acquisition were recorded at provisional amounts based on the preliminary purchase price allocation .
the company is in the process of obtaining additional information to identify and measure all assets acquired and liabilities assumed in the acquisition within the measurement period , which could be up to one year from the date of acquisition .

such provisional amounts will be retrospectively adjusted to reflect any new information about facts and circumstances that existed at the acquisition date that , if known , would have affected the measurement of these amounts .
additionally , key input assumptions and their sensitivity to the valuation of assets acquired and liabilities assumed are currently being reviewed by management .

it is likely that the value of the generation business related property , plant and equipment , the intangible asset related to the electric security plan with its regulated customers and long-term coal contracts , the 4.9% ( 4.9 % ) equity ownership interest in the ohio valley electric corporation , and deferred taxes could change as the valuation process is finalized .

dpler , dpl 2019s wholly-owned competitive retail electric service ( 201ccres 201d ) provider , will also likely have changes in its initial purchase price allocation for the valuation of its intangible assets for the trade name , and customer relationships and contracts .
as noted in the table above , the preliminary purchase price allocation has resulted in the recognition of $ 2.5 billion of goodwill .

factors primarily contributing to a price in excess of the fair value of the net tangible and intangible assets include , but are not limited to : the ability to expand the u.s .
utility platform in the mid-west market , the ability to capitalize on utility management experience gained from ipl , enhanced ability to negotiate with suppliers of fuel and energy , the ability to capture value associated with aes 2019 u.s .

tax position , a well- positioned generating fleet , the ability of dpl to leverage its assembled workforce to take advantage of growth opportunities , etc .
our ability to realize the benefit of dpl 2019s goodwill depends on the realization of expected benefits resulting from a successful integration of dpl into aes 2019 existing operations and our ability to respond to the changes in the ohio utility market .

for example , utilities in ohio continue to face downward pressure on operating margins due to the evolving regulatory environment , which is moving towards a market-based competitive pricing mechanism .
at the same time , the declining energy prices are also reducing operating

 |
| table | cash                                      | $ 116
----------------------------------------- | --------------
accounts receivable                       | 278
inventory                                 | 124
other current assets                      | 41
property plant and equipment              | 2549
intangible assets subject to amortization | 166
intangible assets 2014indefinite-lived    | 5
regulatory assets                         | 201
other noncurrent assets                   | 58
current liabilities                       | -401 ( 401 )
non-recourse debt                         | -1255 ( 1255 )
deferred taxes                            | -558 ( 558 )
regulatory liabilities                    | -117 ( 117 )
other noncurrent liabilities              | -195 ( 195 )
redeemable preferred stock                | -18 ( 18 )
net identifiable assets acquired          | 994
goodwill                                  | 2489
net assets acquired                       | $ 3483 |


| _id | dd4b902a6 |
| title |  |
| text | december 18 , 2007 , we issued an additional 23182197 shares of common stock to citadel .
the issuances were exempt from registration pursuant to section 4 ( 2 ) of the securities act of 1933 , and each purchaser has represented to us that it is an 201caccredited investor 201d as defined in regulation d promulgated under the securities act of 1933 , and that the common stock was being acquired for investment .

we did not engage in a general solicitation or advertising with regard to the issuances of the common stock and have not offered securities to the public in connection with the issuances .
see item 1 .
business 2014citadel investment .

see item 1 .
business 2014citadel investment .
performance graph the following performance graph shows the cumulative total return to a holder of the company 2019s common stock , assuming dividend reinvestment , compared with the cumulative total return , assuming dividend reinvestment , of the standard & poor 2019s ( 201cs&p 201d ) 500 and the s&p super cap diversified financials during the period from december 31 , 2002 through december 31 , 2007. .

2022 $ 100 invested on 12/31/02 in stock or index-including reinvestment of dividends .
fiscal year ending december 31 .
2022 copyright a9 2008 , standard & poor 2019s , a division of the mcgraw-hill companies , inc .
all rights reserved .
www.researchdatagroup.com/s&p.htm

 |
| table | | 12/02  | 12/03  | 12/04  | 12/05  | 12/06  | 12/07
------------------------------------ | ------ | ------ | ------ | ------ | ------ | ------
e*trade financial corporation        | 100.00 | 260.29 | 307.61 | 429.22 | 461.32 | 73.05
s&p 500                              | 100.00 | 128.68 | 142.69 | 149.70 | 173.34 | 182.87
s&p super cap diversified financials | 100.00 | 139.29 | 156.28 | 170.89 | 211.13 | 176.62 |


| _id | dd4c4fb38 |
| title |  |
| text | measurement point december 31 the priceline group nasdaq composite index s&p 500 rdg internet composite .

 |
| table | measurement pointdecember 31 | the priceline group inc . | nasdaqcomposite index | s&p 500index | rdg internetcomposite
---------------------------- | ------------------------- | --------------------- | ------------ | ---------------------
2011                         | 100.00                    | 100.00                | 100.00       | 100.00
2012                         | 132.64                    | 116.41                | 116.00       | 119.34
2013                         | 248.53                    | 165.47                | 153.58       | 195.83
2014                         | 243.79                    | 188.69                | 174.60       | 192.42
2015                         | 272.59                    | 200.32                | 177.01       | 264.96
2016                         | 313.45                    | 216.54                | 198.18       | 277.56 |


| _id | dd4c00dee |
| title |  |
| text | part ii item 5 .
market for registrant 2019s common equity , related stockholder matters and issuer purchases of equity securities .
equity compensation plans 2019 information is incorporated by reference from part iii , item 12 , 201csecurity ownership of certain beneficial owners and management and related stockholder matters , 201d of this document , and should be considered an integral part of item 5 .
at january 31 , 2016 , there were 84607 shareholders of record .

3m 2019s stock is listed on the new york stock exchange , inc .
( nyse ) , the chicago stock exchange , inc. , and the swx swiss exchange .
cash dividends declared and paid totaled $ 1.025 per share for each of the second , third , and fourth quarters of 2015 .
cash dividends declared in the fourth quarter of 2014 included a dividend paid in november 2014 of $ 0.855 per share and a dividend paid in march 2015 of $ 1.025 per share .

cash dividends declared and paid totaled $ 0.855 per share for each of the second and third quarters of 2014 .
cash dividends declared in the fourth quarter of 2013 include a dividend paid in march 2014 of $ 0.855 per share .
stock price comparisons follow : stock price comparisons ( nyse composite transactions ) .

issuer purchases of equity securities repurchases of 3m common stock are made to support the company 2019s stock-based employee compensation plans and for other corporate purposes .
in february 2014 , 3m 2019s board of directors authorized the repurchase of up to $ 12 billion of 3m 2019s outstanding common stock , with no pre-established end date .
in february 2016 , 3m 2019s board of directors replaced the company 2019s february 2014 repurchase program with a new repurchase program .

this new program authorizes the repurchase of up to $ 10 billion of 3m 2019s outstanding common stock , with no pre-established end date.

 |
| table | ( per share amounts ) | first quarter | second quarter | third quarter | fourth quarter | total
--------------------- | ------------- | -------------- | ------------- | -------------- | --------
2015 high             | $ 170.50      | $ 167.70       | $ 157.94      | $ 160.09       | $ 170.50
2015 low              | 157.74        | 153.92         | 134.00        | 138.57         | 134.00
2014 high             | $ 139.29      | $ 145.53       | $ 147.87      | $ 168.16       | $ 168.16
2014 low              | 123.61        | 132.02         | 138.43        | 130.60         | 123.61 |


| _id | dd4c515dc |
| title |  |
| text | management 2019s discussion and analysis operating expenses our operating expenses are primarily influenced by compensation , headcount and levels of business activity .
in addition , see 201cuse of estimates 201d for expenses that may arise from litigation and regulatory proceedings .
compensation and benefits includes salaries , discretionary compensation , amortization of equity awards and other items such as benefits .

discretionary compensation is significantly impacted by , among other factors , the level of net revenues , overall financial performance , prevailing labor markets , business mix , the structure of our share-based compensation programs and the external environment .
the table below presents our operating expenses and total staff ( which includes employees , consultants and temporary staff ) . .

1 .
consists of changes in reserves related to our americas reinsurance business , including interest credited to policyholder account balances , and expenses related to property catastrophe reinsurance claims .
in april 2013 , we completed the sale of a majority stake in our americas reinsurance business and no longer consolidate this business .
2014 versus 2013 .
operating expenses on the consolidated statements of earnings were $ 22.17 billion for 2014 , essentially unchanged compared with 2013 .

compensation and benefits expenses on the consolidated statements of earnings were $ 12.69 billion for 2014 , essentially unchanged compared with 2013 .
the ratio of compensation and benefits to net revenues for 2014 was 36.8% ( 36.8 % ) compared with 36.9% ( 36.9 % ) for 2013 .
total staff increased 3% ( 3 % ) during 2014 .
non-compensation expenses on the consolidated statements of earnings were $ 9.48 billion for 2014 , 4% ( 4 % ) lower than 2013 .

the decrease compared with 2013 included a decrease in other expenses , due to lower net provisions for litigation and regulatory proceedings and lower operating expenses related to consolidated investments , as well as a decline in insurance reserves , reflecting the sale of our americas reinsurance business in 2013 .
these decreases were partially offset by an increase in brokerage , clearing , exchange and distribution fees .

net provisions for litigation and regulatory proceedings for 2014 were $ 754 million compared with $ 962 million for 2013 ( both primarily comprised of net provisions for mortgage-related matters ) .
2014 included a charitable contribution of $ 137 million to goldman sachs gives , our donor-advised fund .
compensation was reduced to fund this charitable contribution to goldman sachs gives .

the firm asks its participating managing directors to make recommendations regarding potential charitable recipients for this contribution .
2013 versus 2012 .
operating expenses on the consolidated statements of earnings were $ 22.47 billion for 2013 , 2% ( 2 % ) lower than 2012 .
compensation and benefits expenses on the consolidated statements of earnings were $ 12.61 billion for 2013 , 3% ( 3 % ) lower compared with $ 12.94 billion for 2012 .

the ratio of compensation and benefits to net revenues for 2013 was 36.9% ( 36.9 % ) compared with 37.9% ( 37.9 % ) for 2012 .
total staff increased 2% ( 2 % ) during 2013 .
non-compensation expenses on the consolidated statements of earnings were $ 9.86 billion for 2013 , 2% ( 2 % ) lower than 2012 .

the decrease compared with 2012 included a decline in insurance reserves , reflecting the sale of our americas reinsurance business , and a decrease in depreciation and amortization expenses , primarily reflecting lower impairment charges and lower operating expenses related to consolidated investments .

these decreases were partially offset by an increase in other expenses , due to higher net provisions for litigation and regulatory proceedings , and higher brokerage , clearing , exchange and distribution fees .

net provisions for litigation and regulatory proceedings for 2013 were $ 962 million ( primarily comprised of net provisions for mortgage-related matters ) compared with $ 448 million for 2012 ( including a settlement with the board of governors of the federal reserve system ( federal reserve board ) regarding the independent foreclosure review ) .
2013 included a charitable contribution of $ 155 million to goldman sachs gives , our donor-advised fund .

compensation was reduced to fund this charitable contribution to goldman sachs gives .
the firm asks its participating managing directors to make recommendations regarding potential charitable recipients for this contribution .
38 goldman sachs 2014 annual report

 |
| table | $ in millions                                    | year ended december 2014 | year ended december 2013 | year ended december 2012
------------------------------------------------ | ------------------------ | ------------------------ | ------------------------
compensation and benefits                        | $ 12691                  | $ 12613                  | $ 12944
brokerage clearing exchange anddistribution fees | 2501                     | 2341                     | 2208
market development                               | 549                      | 541                      | 509
communications and technology                    | 779                      | 776                      | 782
depreciation and amortization                    | 1337                     | 1322                     | 1738
occupancy                                        | 827                      | 839                      | 875
professional fees                                | 902                      | 930                      | 867
insurance reserves1                              | 2014                     | 176                      | 598
other expenses                                   | 2585                     | 2931                     | 2435
total non-compensation expenses                  | 9480                     | 9856                     | 10012
total operating expenses                         | $ 22171                  | $ 22469                  | $ 22956
total staff at period-end                        | 34000                    | 32900                    | 32400 |


| _id | dd4bf1060 |
| title |  |
| text | stock total return performance the following graph compares our total return to stockholders with the returns of the standard & poor 2019s composite 500 index ( 201cs&p 500 201d ) and the dow jones us select health care providers index ( 201cpeer group 201d ) for the five years ended december 31 , 2018 .
the graph assumes an investment of $ 100 in each of our common stock , the s&p 500 , and the peer group on december 31 , 2013 , and that dividends were reinvested when paid. .

the stock price performance included in this graph is not necessarily indicative of future stock price performance.

 |
| table | | 12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | ----------
hum        | $ 100      | $ 140      | $ 176      | $ 202      | $ 247      | $ 287
s&p 500    | $ 100      | $ 114      | $ 115      | $ 129      | $ 157      | $ 150
peer group | $ 100      | $ 128      | $ 135      | $ 137      | $ 173      | $ 191 |


| _id | dd4b94856 |
| title |  |
| text | the goldman sachs group , inc .
and subsidiaries management 2019s discussion and analysis investing & lending investing & lending includes our investing activities and the origination of loans , including our relationship lending activities , to provide financing to clients .
these investments and loans are typically longer-term in nature .

we make investments , some of which are consolidated , including through our merchant banking business and our special situations group , in debt securities and loans , public and private equity securities , infrastructure and real estate entities .
some of these investments are made indirectly through funds that we manage .
we also make unsecured and secured loans to retail clients through our digital platforms , marcus and goldman sachs private bank select ( gs select ) , respectively .

the table below presents the operating results of our investing & lending segment. .

operating environment .
during 2017 , generally higher global equity prices and tighter credit spreads contributed to a favorable environment for our equity and debt investments .
results also reflected net gains from company- specific events , including sales , and corporate performance .

this environment contrasts with 2016 , where , in the first quarter of 2016 , market conditions were difficult and corporate performance , particularly in the energy sector , was impacted by a challenging macroeconomic environment .
however , market conditions improved during the rest of 2016 as macroeconomic concerns moderated .

if macroeconomic concerns negatively affect company-specific events or corporate performance , or if global equity markets decline or credit spreads widen , net revenues in investing & lending would likely be negatively impacted .
2017 versus 2016 .
net revenues in investing & lending were $ 6.58 billion for 2017 , 61% ( 61 % ) higher than 2016 .

net revenues in equity securities were $ 4.58 billion , including $ 3.82 billion of net gains from private equities and $ 762 million in net gains from public equities .
net revenues in equity securities were 78% ( 78 % ) higher than 2016 , primarily reflecting a significant increase in net gains from private equities , which were positively impacted by company- specific events and corporate performance .

in addition , net gains from public equities were significantly higher , as global equity prices increased during the year .
of the $ 4.58 billion of net revenues in equity securities , approximately 60% ( 60 % ) was driven by net gains from company-specific events , such as sales , and public equities .

net revenues in debt securities and loans were $ 2.00 billion , 33% ( 33 % ) higher than 2016 , reflecting significantly higher net interest income ( 2017 included approximately $ 1.80 billion of net interest income ) .

net revenues in debt securities and loans for 2017 also included an impairment of approximately $ 130 million on a secured operating expenses were $ 2.80 billion for 2017 , 17% ( 17 % ) higher than 2016 , due to increased compensation and benefits expenses , reflecting higher net revenues , increased expenses related to consolidated investments , and increased expenses related to marcus .
pre-tax earnings were $ 3.79 billion in 2017 compared with $ 1.69 billion in 2016 .
2016 versus 2015 .

2016 versus 2015 .
net revenues in investing & lending were $ 4.08 billion for 2016 , 25% ( 25 % ) lower than 2015 .
net revenues in equity securities were $ 2.57 billion , including $ 2.17 billion of net gains from private equities and $ 402 million in net gains from public equities .
net revenues in equity securities were 32% ( 32 % ) lower than 2015 , primarily reflecting a significant decrease in net gains from private equities , driven by company-specific events and corporate performance .

net revenues in debt securities and loans were $ 1.51 billion , 9% ( 9 % ) lower than 2015 , reflecting significantly lower net revenues related to relationship lending activities , due to the impact of changes in credit spreads on economic hedges .
losses related to these hedges were $ 596 million in 2016 , compared with gains of $ 329 million in 2015 .
this decrease was partially offset by higher net gains from investments in debt instruments and higher net interest income .

see note 9 to the consolidated financial statements for further information about economic hedges related to our relationship lending activities .
operating expenses were $ 2.39 billion for 2016 , essentially unchanged compared with 2015 .
pre-tax earnings were $ 1.69 billion in 2016 , 44% ( 44 % ) lower than 2015 .
goldman sachs 2017 form 10-k 61

 |
| table | $ in millions             | year ended december 2017 | year ended december 2016 | year ended december 2015
------------------------- | ------------------------ | ------------------------ | ------------------------
equity securities         | $ 4578                   | $ 2573                   | $ 3781
debt securities and loans | 2003                     | 1507                     | 1655
total net revenues        | 6581                     | 4080                     | 5436
operating expenses        | 2796                     | 2386                     | 2402
pre-taxearnings           | $ 3785                   | $ 1694                   | $ 3034 |


| _id | dd4becf7e |
| title |  |
| text | during the year ended december 31 , 2011 , we granted 354660 performance share units having a fair value based on our grant date closing stock price of $ 28.79 .
these units are payable in stock and are subject to certain financial performance criteria .
the fair value of these performance share unit awards is based on the grant date closing stock price of each respective award grant and will apply to the number of units ultimately awarded .

the number of shares ultimately issued for each award will be based on our financial performance as compared to peer group companies over the performance period and can range from zero to 200% ( 200 % ) .
as of december 31 , 2011 , estimated share payouts for outstanding non-vested performance share unit awards ranged from 150% ( 150 % ) to 195% ( 195 % ) .

for the legacy frontier performance share units assumed at july 1 , 2011 , performance is based on market performance criteria , which is calculated as the total shareholder return achieved by hollyfrontier stockholders compared with the average shareholder return achieved by an equally-weighted peer group of independent refining companies over a three-year period .

these share unit awards are payable in stock based on share price performance relative to the defined peer group and can range from zero to 125% ( 125 % ) of the initial target award .

these performance share units were valued at july 1 , 2011 using a monte carlo valuation model , which simulates future stock price movements using key inputs including grant date and measurement date stock prices , expected stock price performance , expected rate of return and volatility of our stock price relative to the peer group over the three-year performance period .
the fair value of these performance share units at july 1 , 2011 was $ 8.6 million .

of this amount , $ 7.3 million relates to post-merger services and will be recognized ratably over the remaining service period through 2013 .
a summary of performance share unit activity and changes during the year ended december 31 , 2011 is presented below: .

( 1 ) includes 225116 non-vested performance share grants under the legacy frontier plan that were outstanding and retained by hollyfrontier at july 1 , 2011 .
for the year ended december 31 , 2011 we issued 178148 shares of our common stock having a fair value of $ 2.6 million related to vested performance share units .
based on the weighted average grant date fair value of $ 20.71 there was $ 11.7 million of total unrecognized compensation cost related to non-vested performance share units .

that cost is expected to be recognized over a weighted-average period of 1.1 years .
note 7 : cash and cash equivalents and investments in marketable securities our investment portfolio at december 31 , 2011 consisted of cash , cash equivalents and investments in debt securities primarily issued by government and municipal entities .

we also hold 1000000 shares of connacher oil and gas limited common stock that was received as partial consideration upon the sale of our montana refinery in we invest in highly-rated marketable debt securities , primarily issued by government and municipal entities that have maturities at the date of purchase of greater than three months .

we also invest in other marketable debt securities with the maximum maturity or put date of any individual issue generally not greater than two years from the date of purchase .
all of these instruments , including investments in equity securities , are classified as available- for-sale .
as a result , they are reported at fair value using quoted market prices .
interest income is recorded as earned .

interest income is recorded as earned .
unrealized gains and losses , net of related income taxes , are reported as a component of accumulated other comprehensive income .
upon sale , realized gains and losses on the sale of marketable securities are computed based on the specific identification of the underlying cost of the securities sold and the unrealized gains and losses previously reported in other comprehensive income are reclassified to current earnings.

 |
| table | performance share units                         | grants
----------------------------------------------- | ------------------
outstanding at january 1 2011 ( non-vested )    | 556186
granted ( 1 )                                   | 354660
vesting and transfer of ownership to recipients | -136058 ( 136058 )
outstanding at december 31 2011 ( non-vested )  | 774788 |


| _id | dd4becb14 |
| title |  |
| text | part i item 1 .
business our company founded in 1886 , american water works company , inc. , ( the 201ccompany , 201d 201camerican water 201d or 201caww 201d ) is a delaware holding company .
american water is the most geographically diversified , as well as the largest publicly-traded , united states water and wastewater utility company , as measured by both operating revenues and population served .
as a holding company , we conduct substantially all of our business operations through our subsidiaries .

our approximately 6400 employees provide an estimated 15 million people with drinking water , wastewater and/or other water-related services in 47 states and one canadian province .
operating segments we report our results of operations in two operating segments : the regulated businesses and the market- based operations .

additional information with respect to our operating segment results is included in the section entitled 201citem 7 2014management 2019s discussion and analysis of financial condition and results of operations , 201d and note 18 of the consolidated financial statements .

regulated businesses our primary business involves the ownership of subsidiaries that provide water and wastewater utility services to residential , commercial , industrial and other customers , including sale for resale and public authority customers .
we report the results of this business in our regulated businesses segment .

our subsidiaries that provide these services are generally subject to economic regulation by certain state commissions or other entities engaged in economic regulation , hereafter referred to as public utility commissions , or 201cpucs , 201d of the states in which we operate .
the federal and state governments also regulate environmental , health and safety , and water quality matters .

our regulated businesses segment operating revenues were $ 2674.3 million for 2014 , $ 2539.9 for 2013 , $ 2564.4 million for 2012 , accounting for 88.8% ( 88.8 % ) , 90.1% ( 90.1 % ) and 89.9% ( 89.9 % ) , respectively , of total operating revenues for the same periods .

the following table sets forth our regulated businesses operating revenues , number of customers and an estimate of population served as of december 31 , 2014 : operating revenues ( in millions ) % (  % ) of total number of customers % (  % ) of total estimated population served ( in millions ) % (  % ) of total .

( a ) includes illinois-american water company , which we refer to as ilawc and american lake water company , also a regulated subsidiary in illinois.

 |
| table | new jersey                    | operatingrevenues ( in millions ) $ 652.3 | % (  % ) of total 24.5% ( 24.5 % ) | number ofcustomers 648066 | % (  % ) of total 20.2% ( 20.2 % ) | estimatedpopulationserved ( in millions ) 2.7 | % (  % ) of total 22.7% ( 22.7 % )
----------------------------- | ----------------------------------------- | ---------------------------------- | ------------------------- | ---------------------------------- | --------------------------------------------- | ----------------------------------
pennsylvania                  | 605.4                                     | 22.6% ( 22.6 % )                   | 666415                    | 20.7% ( 20.7 % )                   | 2.2                                           | 18.5% ( 18.5 % )
missouri                      | 270.2                                     | 10.1% ( 10.1 % )                   | 464498                    | 14.4% ( 14.4 % )                   | 1.5                                           | 12.7% ( 12.7 % )
illinois ( a )                | 262.3                                     | 9.8% ( 9.8 % )                     | 312017                    | 9.7% ( 9.7 % )                     | 1.3                                           | 10.9% ( 10.9 % )
california                    | 209.8                                     | 7.8% ( 7.8 % )                     | 174198                    | 5.4% ( 5.4 % )                     | 0.6                                           | 5.0% ( 5.0 % )
indiana                       | 200.6                                     | 7.5% ( 7.5 % )                     | 293666                    | 9.1% ( 9.1 % )                     | 1.2                                           | 10.1% ( 10.1 % )
west virginia ( b )           | 127.0                                     | 4.7% ( 4.7 % )                     | 170371                    | 5.3% ( 5.3 % )                     | 0.6                                           | 5.0% ( 5.0 % )
subtotal ( top seven states ) | 2327.6                                    | 87.0% ( 87.0 % )                   | 2729231                   | 84.8% ( 84.8 % )                   | 10.1                                          | 84.9% ( 84.9 % )
other ( c )                   | 346.7                                     | 13.0% ( 13.0 % )                   | 489961                    | 15.2% ( 15.2 % )                   | 1.8                                           | 15.1% ( 15.1 % )
total regulated businesses    | $ 2674.3                                  | 100.0% ( 100.0 % )                 | 3219192                   | 100.0% ( 100.0 % )                 | 11.9                                          | 100.0% ( 100.0 % ) |


| _id | dd4bc907e |
| title |  |
| text | management 2019s discussion and analysis of financial condition and results of operations state street corporation | 89 $ 65.35 billion and $ 87.20 billion as of december 31 , 2017 and december 31 , 2016 , respectively .
table 29 : components of average hqla by type of ( in millions ) december 31 , december 31 .

with respect to highly liquid short-term investments presented in the preceding table , due to the continued elevated level of client deposits as of december 31 , 2017 , we maintained cash balances in excess of regulatory requirements governing deposits with the federal reserve of approximately $ 33.58 billion at the federal reserve , the ecb and other non-u.s .
central banks , compared to $ 48.40 billion as of december 31 , 2016 .

the lower levels of deposits with central banks as of december 31 , 2017 compared to december 31 , 2016 was due to normal deposit volatility .
liquid securities carried in our asset liquidity include securities pledged without corresponding advances from the frbb , the fhlb , and other non- u.s .
central banks .
state street bank is a member of the fhlb .

state street bank is a member of the fhlb .
this membership allows for advances of liquidity in varying terms against high-quality collateral , which helps facilitate asset-and-liability management .
access to primary , intra-day and contingent liquidity provided by these utilities is an important source of contingent liquidity with utilization subject to underlying conditions .

as of december 31 , 2017 and december 31 , 2016 , we had no outstanding primary credit borrowings from the frbb discount window or any other central bank facility , and as of the same dates , no fhlb advances were outstanding .
in addition to the securities included in our asset liquidity , we have significant amounts of other unencumbered investment securities .

the aggregate fair value of those securities was $ 66.10 billion as of december 31 , 2017 , compared to $ 54.40 billion as of december 31 , 2016 .
these securities are available sources of liquidity , although not as rapidly deployed as those included in our asset liquidity .
measures of liquidity include lcr , nsfr and tlac which are described in "supervision and regulation" included under item 1 , business , of this form 10-k .

uses of liquidity significant uses of our liquidity could result from the following : withdrawals of client deposits ; draw- downs of unfunded commitments to extend credit or to purchase securities , generally provided through lines of credit ; and short-duration advance facilities .
such circumstances would generally arise under stress conditions including deterioration in credit ratings .

a recurring significant use of our liquidity involves our deployment of hqla from our investment portfolio to post collateral to financial institutions and participants in our agency lending program serving as sources of securities under our enhanced custody program .
we had unfunded commitments to extend credit with gross contractual amounts totaling $ 26.49 billion and $ 26.99 billion as of december 31 , 2017 and december 31 , 2016 , respectively .

these amounts do not reflect the value of any collateral .
as of december 31 , 2017 , approximately 72% ( 72 % ) of our unfunded commitments to extend credit expire within one year .
since many of our commitments are expected to expire or renew without being drawn upon , the gross contractual amounts do not necessarily represent our future cash requirements .

information about our resolution planning and the impact actions under our resolution plans could have on our liquidity is provided in "supervision and regulation" included under item 1 .
business , of this form 10-k .
funding deposits we provide products and services including custody , accounting , administration , daily pricing , foreign exchange services , cash management , financial asset management , securities finance and investment advisory services .

as a provider of these products and services , we generate client deposits , which have generally provided a stable , low-cost source of funds .
as a global custodian , clients place deposits with state street entities in various currencies .
as of december 31 , 2017 and december 31 , 2016 , approximately 60% ( 60 % ) of our average client deposit balances were denominated in u.s .
dollars , approximately 20% ( 20 % ) in eur , 10% ( 10 % ) in gbp and 10% ( 10 % ) in all other currencies .

for the past several years , we have frequently experienced higher client deposit inflows toward the end of each fiscal quarter or the end of the fiscal year .
as a result , we believe average client deposit balances are more reflective of ongoing funding than period-end balances.

 |
| table | ( in millions )              | december 31 2017 | december 31 2016
---------------------------- | ---------------- | ----------------
excess central bank balances | $ 33584          | $ 48407
u.s . treasuries             | 10278            | 17770
other investment securities  | 13422            | 15442
foreign government           | 8064             | 5585
total                        | $ 65348          | $ 87204 |


| _id | dd4bd368c |
| title |  |
| text | american tower corporation and subsidiaries notes to consolidated financial statements assessments in each of the tax jurisdictions resulting from these examinations .
the company believes that adequate provisions have been made for income taxes for all periods through december 31 , 2010 .
12 .
stock-based compensation the company recognized stock-based compensation of $ 52.6 million , $ 60.7 million and $ 54.8 million for the years ended december 31 , 2010 , 2009 and 2008 , respectively .

stock-based compensation for the year ended december 31 , 2009 included $ 6.9 million related to the modification of the vesting and exercise terms for certain employee 2019s equity awards .
the company did not capitalize any stock-based compensation during the years ended december 31 , 2010 and 2009 .
summary of stock-based compensation plans 2014the company maintains equity incentive plans that provide for the grant of stock-based awards to its directors , officers and employees .

under the 2007 equity incentive plan ( 201c2007 plan 201d ) , which provides for the grant of non-qualified and incentive stock options , as well as restricted stock units , restricted stock and other stock-based awards , exercise prices in the case of non-qualified and incentive stock options are not less than the fair market value of the underlying common stock on the date of grant .

equity awards typically vest ratably over various periods , generally four years , and generally expire ten years from the date of grant .
stock options 2014as of december 31 , 2010 , the company had the ability to grant stock-based awards with respect to an aggregate of 22.0 million shares of common stock under the 2007 plan .
the fair value of each option grant is estimated on the date of grant using the black-scholes option pricing model based on the assumptions noted in the table below .

the risk-free treasury rate is based on the u.s .
treasury yield in effect at the accounting measurement date .
the expected life ( estimated period of time outstanding ) was estimated using the vesting term and historical exercise behavior of company employees .
the expected volatility was based on historical volatility for a period equal to the expected life of the stock options .
key assumptions used to apply this pricing model are as follows: .

the weighted average grant date fair value per share during the years ended december 31 , 2010 , 2009 and 2008 was $ 15.03 , $ 8.90 and $ 9.55 , respectively .
the intrinsic value of stock options exercised during the years ended december 31 , 2010 , 2009 and 2008 was $ 62.7 million , $ 40.1 million and $ 99.1 million , respectively .

as of december 31 , 2010 , total unrecognized compensation expense related to unvested stock options was approximately $ 27.7 million and is expected to be recognized over a weighted average period of approximately two years .
the amount of cash received from the exercise of stock options was approximately $ 129.1 million during the year ended december 31 , 2010 .

during the year ended december 31 , 2010 , the company realized approximately $ 0.3 million of state tax benefits from the exercise of stock options.

 |
| table | | 2010                                       | 2009                                       | 2008
-------------------------------------------------------------- | ------------------------------------------ | ------------------------------------------ | ------------------------------------------
range of risk-free interest rate                               | 1.41% ( 1.41 % ) 2013 2.39% ( 2.39 % )     | 1.41% ( 1.41 % ) 2013 2.04% ( 2.04 % )     | 1.44% ( 1.44 % ) 2013 3.05% ( 3.05 % )
weighted average risk-free interest rate                       | 2.35% ( 2.35 % )                           | 1.71% ( 1.71 % )                           | 1.89% ( 1.89 % )
expected life of option grants                                 | 4.60 years                                 | 4.00 years                                 | 4.00 years
range of expected volatility of underlying stock price         | 37.11% ( 37.11 % ) 2013 37.48% ( 37.48 % ) | 36.00% ( 36.00 % ) 2013 36.63% ( 36.63 % ) | 28.51% ( 28.51 % ) 2013 35.30% ( 35.30 % )
weighted average expected volatility of underlying stock price | 37.14% ( 37.14 % )                         | 36.23% ( 36.23 % )                         | 29.10% ( 29.10 % )
expected annual dividends                                      | n/a                                        | n/a                                        | n/a |