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-0.2394 | What's the growth rate of Office for Nonperforming Loans andForeclosed Properties-1 in 2011? | PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The following table presents reported quarterly high and low per share sale prices of our common stock on the NYSE for the years 2015 and 2014.
<table><tr><td>2015</td><td>High</td><td>Low</td></tr><tr><td>Quarter ended March 31</td><td>$101.88</td><td>$93.21</td></tr><tr><td>Quarter ended June 30</td><td>98.64</td><td>91.99</td></tr><tr><td>Quarter ended September 30</td><td>101.54</td><td>86.83</td></tr><tr><td>Quarter ended December 31</td><td>104.12</td><td>87.23</td></tr><tr><td>2014</td><td>High</td><td>Low</td></tr><tr><td>Quarter ended March 31</td><td>$84.90</td><td>$78.38</td></tr><tr><td>Quarter ended June 30</td><td>90.73</td><td>80.10</td></tr><tr><td>Quarter ended September 30</td><td>99.90</td><td>89.05</td></tr><tr><td>Quarter ended December 31</td><td>106.31</td><td>90.20</td></tr></table>
On February 19, 2016, the closing price of our common stock was $87.32 per share as reported on the NYSE. As of February 19, 2016, we had 423,897,556 outstanding shares of common stock and 159 registered holders. Dividends As a REIT, we must annually distribute to our stockholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we have distributed and expect to continue to distribute all or substantially all of our REIT taxable income after taking into consideration our utilization of net operating losses (“NOLs”). We have two series of preferred stock outstanding, 5.25% Mandatory Convertible Preferred Stock, Series A, issued in May 2014 (the “Series A Preferred Stock”), with a dividend rate of 5.25%, and the 5.50% Mandatory Convertible Preferred Stock, Series B (the “Series B Preferred Stock”), issued in March 2015, with a dividend rate of 5.50%. Dividends are payable quarterly in arrears, subject to declaration by our Board of Directors. The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will be dependent upon various factors, a number of which may be beyond our control, including our financial condition and operating cash flows, the amount required to maintain our qualification for taxation as a REIT and reduce any income and excise taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt and preferred equity instruments, our ability to utilize NOLs to offset our distribution requirements, limitations on our ability to fund distributions using cash generated through our TRSs and other factors that our Board of Directors may deem relevant. We have distributed an aggregate of approximately $2.3 billion to our common stockholders, including the dividend paid in January 2016, primarily subject to taxation as ordinary income. During the year ended December 31, 2015, we declared the following cash distributions: Our total non-U. S. exposure was $232.6 billion at December 31, 2011, a decrease of $29.4 billion from December 31, 2010. Our non-U. S. exposure remained concentrated in Europe which accounted for $115.9 billion, or 50 percent, of total non-U. S. exposure. The European exposure was mostly in Western Europe and was distributed across a variety of industries. The decrease of $32.2 billion in Europe was primarily driven by our efforts to reduce risk in countries affected by the ongoing debt crisis in the Eurozone. Select European countries are further detailed in Table 54. Asia Pacific was our second largest non-U. S. exposure at $74.6 billion, or 32 percent. The $1.3 billion increase in Asia Pacific was driven by increases in securities and local exposure in Japan and increases in the emerging markets, predominately in local exposure, loans and securities offset by the sale of CCB shares. For more information on our CCB investment, see Note 5 – Securities to the Consolidated Financial Statements. Latin America accounted for $17.4 billion, or seven percent, of total non-U. S. exposure. The $2.6 billion increase in Latin America was primarily driven by an increase in Brazil in securities and local country exposure. Middle East and Africa increased $926 million to $4.6 billion, representing two percent of total non-U. S. exposure. Other non-U. S. exposure was $20.1 billion at December 31, 2011, a decrease of $2.1 billion in 2011 resulting primarily from a decrease in local exposure as a result of the sale of our Canadian consumer card business. For more information on our Asia Pacific and Latin America exposure, see non-U. S. exposure to selected countries defined as emerging markets on page 100. Table 52 presents countries where total cross-border exposure exceeded one percent of our total assets. At December 31, 2011, the United Kingdom and Japan were the only countries where total cross-border exposure exceeded one percent of our total assets. At December 31, 2011, Canada and France had total cross-border exposure of $16.9 billion and $16.1 billion representing 0.79 percent and 0.75 percent of total assets. Canada and France were the only other countries that had total cross-border exposure that exceeded 0.75 percent of our total assets at December 31, 2011. Exposure includes cross-border claims by our non-U. S. offices including loans, acceptances, time deposits placed, trading account assets, securities, derivative assets, other interestearning investments and other monetary assets. Amounts also include unused commitments, SBLCs, commercial letters of credit and formal guarantees. Sector definitions are consistent with FFIEC reporting requirements for preparing the Country Exposure Report.
<table><tr><td>Table 52</td><td colspan="6">Total Cross-border Exposure Exceeding One Percent of Total Assets<sup>-1</sup></td></tr><tr><td>(Dollars in millions)</td><td>December 31</td><td>Public Sector</td><td>Banks</td><td>Private Sector</td><td>Cross-borderExposure</td><td>Exposure as aPercentage ofTotal Assets</td></tr><tr><td>United Kingdom</td><td>2011</td><td>$6,401</td><td>$4,424</td><td>$18,056</td><td>$28,881</td><td>1.36%</td></tr><tr><td></td><td>2010</td><td>101</td><td>5,544</td><td>32,354</td><td>37,999</td><td>1.68</td></tr><tr><td>Japan<sup>-2</sup></td><td>2011</td><td>4,603</td><td>10,383</td><td>8,060</td><td>23,046</td><td>1.08</td></tr></table>
(1) Total cross-border exposure for the United Kingdom and Japan included derivatives exposure of $5.9 billion and $3.5 billion at December 31, 2011 and $2.3 billion and $2.8 billion at December 31, 2010 which has been reduced by the amount of cash collateral applied of $9.3 billion and $1.2 billion at December 31, 2011 and $13.0 billion and $1.6 billion at December 31, 2010. Derivative assets were collateralized by other marketable securities of $242 million and $1.7 billion at December 31, 2011 and $96 million and $743 million at December 31, 2010. (2) At December 31, 2010, total cross-border exposure for Japan was $17.0 billion, representing 0.75 percent of total assets. Tables 43 and 44 present commercial real estate credit quality data by non-homebuilder and homebuilder property types. The homebuilder portfolio presented in Tables 42, 43 and 44 includes condominiums and other residential real estate. Other property types in Tables 42, 43 and 44 primarily include special purpose, nursing/retirement homes, medical facilities and restaurants, as well as unsecured loans to borrowers whose primary business is commercial real estate. Table 43 Commercial Real Estate Credit Quality Data
<table><tr><td>Table 43</td><td colspan="4">Commercial Real Estate Credit Quality Data December 31</td></tr><tr><td></td><td colspan="2">Nonperforming Loans andForeclosed Properties<sup>-1</sup></td><td colspan="2">Utilized ReservableCriticized Exposure<sup>-2</sup></td></tr><tr><td>(Dollars in millions)</td><td>2011</td><td>2010</td><td>2011</td><td>2010</td></tr><tr><td>Non-homebuilder</td><td></td><td></td><td></td><td></td></tr><tr><td>Office</td><td>$807</td><td>$1,061</td><td>$2,375</td><td>$3,956</td></tr><tr><td>Multi-family rental</td><td>339</td><td>500</td><td>1,604</td><td>2,940</td></tr><tr><td>Shopping centers/retail</td><td>561</td><td>1,000</td><td>1,378</td><td>2,837</td></tr><tr><td>Industrial/warehouse</td><td>521</td><td>420</td><td>1,317</td><td>1,878</td></tr><tr><td>Multi-use</td><td>345</td><td>483</td><td>971</td><td>1,316</td></tr><tr><td>Hotels/motels</td><td>173</td><td>139</td><td>716</td><td>1,191</td></tr><tr><td>Land and land development</td><td>530</td><td>820</td><td>749</td><td>1,420</td></tr><tr><td>Other</td><td>223</td><td>168</td><td>997</td><td>1,604</td></tr><tr><td>Total non-homebuilder</td><td>3,499</td><td>4,591</td><td>10,107</td><td>17,142</td></tr><tr><td>Homebuilder</td><td>993</td><td>1,963</td><td>1,418</td><td>3,376</td></tr><tr><td>Total commercial real estate</td><td>$4,492</td><td>$6,554</td><td>$11,525</td><td>$20,518</td></tr></table>
Table 44 Commercial Real Estate Net Charge-offs and Related Ratios
<table><tr><td>Table 44</td><td colspan="4">Commercial Real Estate Net Charge-offs and Related Ratios</td></tr><tr><td></td><td colspan="2">Net Charge-offs</td><td colspan="2">Net Charge-off Ratios<sup>-1</sup></td></tr><tr><td>(Dollars in millions)</td><td>2011</td><td>2010</td><td>2011</td><td>2010</td></tr><tr><td>Non-homebuilder</td><td></td><td></td><td></td><td></td></tr><tr><td>Office</td><td>$126</td><td>$273</td><td>1.51%</td><td>2.49%</td></tr><tr><td>Multi-family rental</td><td>36</td><td>116</td><td>0.52</td><td>1.21</td></tr><tr><td>Shopping centers/retail</td><td>184</td><td>318</td><td>2.69</td><td>3.56</td></tr><tr><td>Industrial/warehouse</td><td>88</td><td>59</td><td>1.94</td><td>1.07</td></tr><tr><td>Multi-use</td><td>61</td><td>143</td><td>1.63</td><td>2.92</td></tr><tr><td>Hotels/motels</td><td>23</td><td>45</td><td>0.86</td><td>1.02</td></tr><tr><td>Land and land development</td><td>152</td><td>377</td><td>7.58</td><td>13.04</td></tr><tr><td>Other</td><td>19</td><td>220</td><td>0.33</td><td>3.14</td></tr><tr><td>Total non-homebuilder</td><td>689</td><td>1,551</td><td>1.67</td><td>2.86</td></tr><tr><td>Homebuilder</td><td>258</td><td>466</td><td>8.00</td><td>8.26</td></tr><tr><td>Total commercial real estate</td><td>$947</td><td>$2,017</td><td>2.13</td><td>3.37</td></tr></table>
(1) Net charge-off ratios are calculated as net charge-offs divided by average outstanding loans excluding loans accounted for under the fair value option. At December 31, 2011, total committed non-homebuilder exposure was $53.1 billion compared to $64.2 billion at December 31, 2010, with the decrease due to exposure reductions in all non-homebuilder property types. Non-homebuilder nonperforming loans and foreclosed properties were $3.5 billion and $4.6 billion at December 31, 2011 and 2010, which represented 9.29 percent and 10.08 percent of total nonhomebuilder loans and foreclosed properties. Non-homebuilder utilized reservable criticized exposure decreased to $10.1 billion, or 25.34 percent of non-homebuilder utilized reservable exposure, at December 31, 2011 compared to $17.1 billion, or 35.55 percent, at December 31, 2010. The decrease in reservable criticized exposure was driven primarily by office, shopping centers/retail and multi-family rental property types. For the nonhomebuilder portfolio, net charge-offs decreased $862 million in 2011 due in part to resolution of criticized assets through payoffs and sales. At December 31, 2011, we had committed homebuilder exposure of $3.9 billion compared to $6.0 billion at December 31, 2010, of which $2.4 billion and $4.3 billion were funded secured loans. The decline in homebuilder committed exposure was due to repayments, net charge-offs, reductions in new home construction and continued risk mitigation initiatives with market conditions providing fewer origination opportunities to offset the reductions. Homebuilder nonperforming loans and foreclosed properties decreased $970 million due to repayments, a decline in the volume of loans being downgraded to nonaccrual status and net charge-offs. Homebuilder utilized reservable criticized exposure decreased $2.0 billion to $1.4 billion due to repayments and net charge-offs. The nonperforming loans, leases and foreclosed properties and the utilized reservable criticized ratios for the homebuilder portfolio were 38.89 percent and 54.65 percent at December 31, 2011 compared to 42.80 percent and 74.27 percent at December 31, 2010. Net charge-offs for the homebuilder portfolio decreased $208 million in 2011. Capital Management During 2015, we repurchased approximately $2.4 billion of common stock, with an average price of $16.92 per share, in connection with our 2015 Comprehensive Capital Analysis and Review (CCAR) capital plan, which included a request to repurchase $4.0 billion of common stock over five quarters beginning in the second quarter of 2015, and to maintain the quarterly common stock dividend at the current rate of $0.05 per share. Based on the conditional non-objection we received from the Federal Reserve on our 2015 CCAR submission, we were required to resubmit our CCAR capital plan by September 30, 2015 and address certain weaknesses the Federal Reserve identified in our capital planning process. We have established plans and taken actions which addressed the identified weaknesses, and we resubmitted our CCAR capital plan on September 30, 2015. The Federal Reserve announced that it did not object to our resubmitted CCAR capital plan on December 10, 2015. As an Advanced approaches institution, under Basel 3, we were required to complete a qualification period (parallel run) to demonstrate compliance with the Basel 3 Advanced approaches capital framework to the satisfaction of U. S. banking regulators. We received approval to begin using the Advanced approaches capital framework to determine risk-based capital requirements beginning in the fourth quarter of 2015. As previously disclosed, with the approval to exit parallel run, U. S. banking regulators requested modifications to certain internal analytical models including the wholesale (e. g. , commercial) credit models. All requested modifications were incorporated, which increased our risk-weighted assets, and are reflected in the risk-based ratios in the fourth quarter of 2015. Having exited parallel run on October 1, 2015, we are required to report regulatory risk-based capital ratios and risk-weighted assets under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy including under the Prompt Corrective Action (PCA) framework and was the Advanced approaches in the fourth quarter of 2015. For additional information, see Capital Management on page 51. Trust Preferred Securities On December 29, 2015, the Corporation provided notice of the redemption on January 29, 2016 of all trust preferred securities of Merrill Lynch Preferred Capital Trust III, Merrill Lynch Preferred Capital Trust IV and Merrill Lynch Preferred Capital Trust V (the Trust Preferred Securities). In connection with the Corporation’s acquisition of Merrill Lynch & Co. , Inc. in 2009, the Corporation recorded a discount to par value as purchase accounting adjustments associated with the Trust Preferred Securities. The Corporation recorded a $612 million charge to net interest income related to the discount on these securities. New Accounting Guidance on Recognition and Measurement of Financial Instruments In January 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance on recognition and measurement of financial instruments. The Corporation has early adopted, retrospective to January 1, 2015, the provision that requires the Corporation to present unrealized gains and losses resulting from changes in the Corporation’s own credit spreads on liabilities accounted for under the fair value option (referred to as debit valuation adjustments, or DVA) in accumulated other comprehensive income (OCI). The impact of the adoption was to reclassify, as of January 1, 2015, unrealized DVA losses of $2.0 billion pretax ($1.2 billion after tax) from retained earnings to accumulated OCI. Further, pretax unrealized DVA gains of $301 million, $301 million and $420 million were reclassified from other income to accumulated OCI for the third, second and first quarters of 2015, respectively. This had the effect of reducing net income as previously reported for the aforementioned quarters by $187 million, $186 million and $260 million, or approximately $0.02 per share in each quarter. This change is reflected in consolidated results and the Global Markets segment results. Results for 2014 were not subject to restatement under the provisions of the new accounting guidance. Selected Financial Data Table 1 provides selected consolidated financial data for 2015 and 2014. |
10.3 | how much of the firm-sponsored qspes that hold asf framework loans are serviced by the firm? | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JPMorgan Chase & Co. 132 JPMorgan Chase & Co. / 2007 Annual Report The Firm’s policy for issuing shares upon settlement of employee share-based payment awards is to issue either new shares of common stock or treasury shares. On April 17, 2007, the Board of Directors approved a stock repurchase program that authorizes the repurchase of up to $10.0 billion of the Firm’s common shares, which supersedes an $8.0 billion stock repurchase program approved in 2006. The $10.0 billion authorization includes shares to be repurchased to offset issuances under the Firm’s employee stock-based plans. During 2007, the Firm settled all of its employee stock-based awards by issuing treasury shares. In December 2005, the Firm accelerated the vesting of approximately 41 million unvested, out-of-the-money employee stock options granted in 2001 under the Growth and Performance Incentive Program, which were scheduled to vest in January 2007. These options were not modified other than to accelerate vesting. The related expense was approximately $145 million, and was recognized as compensation expense in the fourth quarter of 2005. The Firm believed that at the time the options were accelerated they had limited economic value since the exercise price of the accelerated options was $51.22 and the closing price of the Firm’s common stock on the effective date of the acceleration was $39.69. RSU activity Compensation expense for RSUs is measured based upon the number of shares granted multiplied by the stock price at the grant date, and is recognized in Net income as previously described. The following table summarizes JPMorgan Chase’s RSU activity for 2007. Year ended December 31, 2007
<table><tr><td>(in thousands, exceptweighted-average data)</td><td>Number of options/SARs</td><td>Weighted-average exercise price</td><td>Weighted-average remaining contractual life (in years)</td><td>Aggregate intrinsic value</td></tr><tr><td>Outstanding, January 1</td><td>376,227#</td><td>$ 40.31</td><td></td><td></td></tr><tr><td>Granted</td><td>21,446</td><td>46.65</td><td></td><td></td></tr><tr><td>Exercised</td><td>-64,453</td><td>34.73</td><td></td><td></td></tr><tr><td>Forfeited</td><td>-1,410</td><td>40.13</td><td></td><td></td></tr><tr><td>Canceled</td><td>-5,879</td><td>48.10</td><td></td><td></td></tr><tr><td> Outstanding, December 31</td><td>325,931#</td><td>$ 41.70</td><td>4.0</td><td>$1,601,780</td></tr><tr><td>Exercisable, December 31</td><td>281,327</td><td>41.44</td><td>3.2</td><td>1,497,992</td></tr></table>
The total fair value of shares that vested during the years ended December 31, 2007, 2006 and 2005, was $1.5 billion, $1.3 billion and $1.1 billion, respectively. Employee stock option and SARs activity Compensation expense, which is measured at the grant date as the fair value of employee stock options and SARs, is recognized in Net income as described above. The following table summarizes JPMorgan Chase’s employee stock option and SARs activity for the year ended December 31, 2007, including awards granted to key employees and awards granted in prior years under broad-based plans.
<table><tr><td>(in thousands, except weighted average data)</td><td>Number of Shares</td><td>Weighted- average grant date fair value</td></tr><tr><td>Outstanding, January 1</td><td>88,456#</td><td>$ 38.50</td></tr><tr><td>Granted</td><td>47,608</td><td>48.29</td></tr><tr><td>Vested</td><td>-30,925</td><td>38.09</td></tr><tr><td>Forfeited</td><td>-6,122</td><td>42.56</td></tr><tr><td> Outstanding, December 31</td><td>99,017#</td><td>$ 43.11</td></tr></table>
The weighted-average grant date per share fair value of stock options and SARs granted during the years ended December 31, 2007, 2006 and 2005, was $13.38, $10.99 and $10.44, respectively. The total intrinsic value of options exercised during the years ended December 31, 2007, 2006 and 2005 was $937 million, $994 million and $364 million, respectively. Subprime adjustable-rate mortgage loan modifications See the Glossary of Terms on page 183 of this Annual Report for the Firm’s definition of subprime loans. Within the confines of the limited decision-making abilities of a QSPE under SFAS 140, the operating documents that govern existing subprime securitizations generally authorize the servicer to modify loans for which default is reasonably foreseeable, provided that the modification is in the best interests of the QSPE’s beneficial interest holders, and would not result in a REMIC violation. In December 2007, the American Securitization Forum (“ASF”) issued the “Streamlined Foreclosure and Loss Avoidance Framework for Securitized Subprime Adjustable Rate Mortgage Loans” (“the Framework”). The Framework provides guidance for servicers to streamline evaluation procedures for borrowers with certain subprime adjustable rate mortgage (“ARM”) loans to more efficiently provide modifications of such loans with terms that are more appropriate for the individual needs of such borrowers. The Framework applies to all first-lien subprime ARM loans that have a fixed rate of interest for an initial period of 36 months or less, are included in securitized pools, were originated between January 1, 2005, and July 31, 2007, and have an initial interest rate reset date between January 1, 2008, and July 31, 2010 (“ASF Framework Loans”). The Framework categorizes the population of ASF Framework Loans into three segments. Segment 1 includes loans where the borrower is current and is likely to be able to refinance into any available mortgage product. Segment 2 includes loans where the borrower is current, is unlikely to be able to refinance into any readily available mortgage industry product and meets certain defined criteria. Segment 3 includes loans where the borrower is not current, as defined, and does not meet the criteria for Segments 1 or 2. ASF Framework Loans in Segment 2 of the Framework are eligible for fast-track modification under which the interest rate will be kept at the existing initial rate, generally for five years following the interest rate reset date. The Framework indicates that for Segment 2 loans, JPMorgan Chase, as servicer, may presume that the borrower will be unable to make payments pursuant to the original terms of the borrower’s loan after the initial interest rate reset date. Thus, the Firm may presume that a default on that loan by the borrower is reasonably foreseeable unless the terms of the loan are modified. JPMorgan Chase has adopted the loss mitigation approaches under the Framework for securitized subprime loans that meet the specific Segment 2 screening criteria, and it expects to begin modifying Segment 2 loans by the end of the first quarter of 2008. The Firm believes that the adoption of the Framework will not affect the off-balance sheet accounting treatment of JPMorgan Chase-sponsored QSPEs that hold Segment 2 subprime loans. The total amount of assets owned by Firm-sponsored QSPEs that hold ASF Framework Loans (including those loans that are not serviced by the Firm) as of December 31, 2007, was $20.0 billion. Of this amount, $9.7 billion relates to ASF Framework Loans serviced by the Firm. Based on current economic conditions, the Firm estimates that approximately 20%, 10% and 70% of the ASF Framework Loans it services that are owned by Firm-sponsored QSPEs will fall within Segments 1, 2 and 3, respectively. This estimate could change substantially as a result of unanticipated changes in housing values, economic conditions, investor/borrower behavior and other factors. The total principal amount of beneficial interests issued by Firm-sponsored securitizations that hold ASF Framework Loans as of December 31, 2007, was as follows.
<table><tr><td>December 31, 2007(in millions)</td><td>2007</td></tr><tr><td>Third-party</td><td>$19,636</td></tr><tr><td>Retained interest</td><td>412</td></tr><tr><td>Total</td><td>$20,048</td></tr></table>
The Firm regularly evaluates market conditions and overall economic returns and makes an initial determination of whether new originations will be held-for-investment or sold within the foreseeable future. The Firm also periodically evaluates the expected economic returns of previously originated loans under prevailing market conditions to determine whether their designation as held-for-sale or held-for-investment continues to be appropriate. When the Firm determines that a change in this designation is appropriate, the loans are transferred to the appropriate classification. During the third and fourth quarters of 2007, in response to changes in market conditions, the Firm designated as held-for-investment all new originations of subprime mortgage loans, as well as subprime mortgage loans that were previously designated held-for-sale. In addition, all new prime mortgage originations that cannot be sold to U. S. government agencies and U. S. government-sponsored enterprises have been designated as held-for-investment. Prime mortgage loans originated with the intent to sell are accounted for at fair value under SFAS 159 and are classified as Trading assets in the Consolidated Balance Sheets. The following discussion relates to the specific loan and lendingrelated categories within the consumer portfolio. Home equity: Home equity loans at December 31, 2007, were $94.8 billion, an increase of $9.1 billion from year-end 2006. The change in the portfolio from December 31, 2006, reflected organic growth. The Provision for credit losses for the Home equity portfolio includes net increases of $1.0 billion to the Allowance for loan losses for the year ended December 31, 2007, as risk layered loans, continued weak housing prices and slowing economic growth have resulted in a significant increase in nonperforming assets and estimated losses, especially with respect to recently originated high loan-to-value loans in specific geographic regions that have experienced significant declines in housing prices. The decline in housing prices and the second lien position for these types of loans results in minimal proceeds upon foreclosure, increasing the severity of losses. Although subprime Home equity loans do not represent a significant portion of the Home equity loan balance, the origination of subprime home equity loans was discontinued in the third quarter of 2007. In addition, loss mitigation activities continue to be intensified, underwriting standards have been tightened and pricing actions have been implemented to reflect elevated risks related to the home equity portfolio. The following tables present the geographic distribution of consumer credit outstandings by product as of December 31, 2007 and 2006. Consumer loans by geographic region
<table><tr><td> December 31, 2007 (in billions) </td><td>Home equity</td><td>Mortgage</td><td>Auto</td><td>Card reported</td><td>All other loans</td><td>Total consumer loans–reported</td><td>Card securitized</td><td>Total consumer loans–managed</td></tr><tr><td> Top 12 states</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>California</td><td>$14.9</td><td>$13.4</td><td>$5.0</td><td>$11.0</td><td>$1.0</td><td>$45.3</td><td>$9.6</td><td>$54.9</td></tr><tr><td>New York</td><td>14.4</td><td>8.0</td><td>3.6</td><td>6.6</td><td>4.2</td><td>36.8</td><td>5.6</td><td>42.4</td></tr><tr><td>Texas</td><td>6.1</td><td>2.0</td><td>3.7</td><td>5.8</td><td>3.5</td><td>21.1</td><td>5.4</td><td>26.5</td></tr><tr><td>Florida</td><td>5.3</td><td>6.4</td><td>1.6</td><td>4.7</td><td>0.5</td><td>18.5</td><td>4.2</td><td>22.7</td></tr><tr><td>Illinois</td><td>6.7</td><td>3.0</td><td>2.2</td><td>4.5</td><td>1.9</td><td>18.3</td><td>3.9</td><td>22.2</td></tr><tr><td>Ohio</td><td>4.9</td><td>1.0</td><td>2.9</td><td>3.3</td><td>2.6</td><td>14.7</td><td>3.1</td><td>17.8</td></tr><tr><td>New Jersey</td><td>4.4</td><td>2.2</td><td>1.7</td><td>3.3</td><td>0.5</td><td>12.1</td><td>3.1</td><td>15.2</td></tr><tr><td>Michigan</td><td>3.7</td><td>1.6</td><td>1.3</td><td>2.9</td><td>2.3</td><td>11.8</td><td>2.5</td><td>14.3</td></tr><tr><td>Arizona</td><td>5.7</td><td>1.5</td><td>1.8</td><td>1.7</td><td>1.8</td><td>12.5</td><td>1.4</td><td>13.9</td></tr><tr><td>Pennsylvania</td><td>1.6</td><td>0.9</td><td>1.7</td><td>3.2</td><td>0.5</td><td>7.9</td><td>2.9</td><td>10.8</td></tr><tr><td>Colorado</td><td>2.3</td><td>1.3</td><td>1.0</td><td>2.0</td><td>0.8</td><td>7.4</td><td>1.7</td><td>9.1</td></tr><tr><td>Indiana</td><td>2.4</td><td>0.6</td><td>1.2</td><td>1.8</td><td>1.1</td><td>7.1</td><td>1.5</td><td>8.6</td></tr><tr><td>All other</td><td>22.4</td><td>14.1</td><td>14.7</td><td>33.6</td><td>8.0</td><td>92.8</td><td>27.8</td><td>120.6</td></tr><tr><td> Total</td><td>$94.8</td><td>$56.0</td><td>$42.4</td><td>$84.4</td><td>$28.7</td><td>$306.3</td><td>$72.7</td><td>$379.0</td></tr></table> |
0.06945 | In the year with lowest amount of Interruptible sales in thousands of Dt Delivered, what's the increasing rate of Total firm sales and transportation? (in %) | HR Solutions
<table><tr><td>Years ended December 31,</td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Revenue</td><td>$2,111</td><td>$1,267</td><td>$1,356</td></tr><tr><td>Operating income</td><td>234</td><td>203</td><td>208</td></tr><tr><td>Operating margin</td><td>11.1%</td><td>16.0%</td><td>15.3%</td></tr></table>
In October 2010, we completed the acquisition of Hewitt, one of the world’s leading human resource consulting and outsourcing companies. Hewitt operates globally together with Aon’s existing consulting and outsourcing operations under the newly created Aon Hewitt brand. Hewitt’s operating results are included in Aon’s results of operations beginning October 1, 2010. Our HR Solutions segment generated approximately 25% of our consolidated total revenues in 2010 and provides a broad range of human capital services, as follows: Consulting Services: ? Health and Benefits advises clients about how to structure, fund, and administer employee benefit programs that attract, retain, and motivate employees. Benefits consulting includes health and welfare, executive benefits, workforce strategies and productivity, absence management, benefits administration, data-driven health, compliance, employee commitment, investment advisory and elective benefits services. ? Retirement specializes in global actuarial services, defined contribution consulting, investment consulting, tax and ERISA consulting, and pension administration. ? Compensation focuses on compensatory advisory/counsel including: compensation planning design, executive reward strategies, salary survey and benchmarking, market share studies and sales force effectiveness, with special expertise in the financial services and technology industries. ? Strategic Human Capital delivers advice to complex global organizations on talent, change and organizational effectiveness issues, including talent strategy and acquisition, executive on-boarding, performance management, leadership assessment and development, communication strategy, workforce training and change management. Outsourcing Services: ? Benefits Outsourcing applies our HR expertise primarily through defined benefit (pension), defined contribution (401(k)), and health and welfare administrative services. Our model replaces the resource-intensive processes once required to administer benefit plans with more efficient, effective, and less costly solutions. ? Human Resource Business Processing Outsourcing (‘‘HR BPO’’) provides market-leading solutions to manage employee data; administer benefits, payroll and other human resources processes; and record and manage talent, workforce and other core HR process transactions as well as other complementary services such as absence management, flexible spending, dependent audit and participant advocacy. Beginning in late 2008, the disruption in the global credit markets and the deterioration of the financial markets created significant uncertainty in the marketplace. Weak economic conditions globally continued throughout 2010. The prolonged economic downturn is adversely impacting our clients’ financial condition and therefore the levels of business activities in the industries and geographies where we operate. While we believe that the majority of our practices are well positioned to manage through this time, these challenges are reducing demand for some of our services and putting has liability. For a further discussion of claims and possible claims against O&R under Superfund, see Note G to the financial statements in Item 8. Manufactured Gas Sites O&R and its predecessors formerly owned and operated manufactured gas plants at seven sites (O&R MGP Sites) in Orange County and Rockland County, New York. Three of these sites are now owned by parties other than O&R, and have been redeveloped by them for residential, commercial or industrial uses. The NYSDEC is requiring O&R to develop and implement remediation programs for the O&R MGP Sites including any neighboring areas to which contamination may have migrated. O&R has completed remedial investigations at all seven of its MGP sites and has received the NYSDEC’s decision regarding the remedial work to be performed at six of the sites. Of the six sites, O&R has completed remediation at four sites. Remedial construction was initiated on a portion of one of the remaining sites in 2018 and remedial design is ongoing for the other remaining sites. The company estimates that its undiscounted potential liability for the completion of the site investigation and cleanup of the known contamination on MGP sites could range from $86 million to $142 million. Superfund Sites O&R is a PRP at Superfund sites involving other PRPs, and participates in PRP groups at those sites. The company is not managing the site investigation and remediation at these multiparty Superfund sites. Work at these sites is in various stages, and investigation, remediation and monitoring activities at some of these sites is expected to continue over extended periods of time. The company believes that it is unlikely that monetary sanctions, such as penalties, will be imposed by any governmental authority with respect to these sites. The following table lists each of the Superfund sites for which the company anticipates it may have liability. The table also shows for each such site its location, the year in which the company was designated or alleged to be a PRP or to otherwise have responsibilities for the site (shown in the table under “Start”), the name of the court or agency in which proceedings for the site are pending and O&R’s estimated percentage of the total liability for each site. The company currently estimates that its potential liability for investigation, remediation, monitoring and environmental damages in aggregate for the sites below is less than $1 million. Superfund liability is joint and several. The company’s estimate of its liability for each site was determined pursuant to consent decrees, settlement agreements or otherwise and in light of the financial condition of other PRPs. The company’s actual liability could differ substantially from amounts estimated.
<table><tr><td>Site</td><td>Location</td><td>Start</td><td>Court orAgency</td><td>% of TotalLiability</td></tr><tr><td>Metal Bank of America</td><td>Philadelphia, PA</td><td>1993</td><td>EPA</td><td>4.6%</td></tr><tr><td>Borne Chemical</td><td>Elizabeth, NJ</td><td>1997</td><td>NJDEP</td><td>2.3%</td></tr><tr><td>Ellis Road</td><td>Jacksonville, FL</td><td>2011</td><td>EPA</td><td>0.2%</td></tr></table>
Other Federal, State and Local Environmental Provisions Toxic Substances Control Act Virtually all electric utilities, including CECONY, own equipment containing PCBs. PCBs are regulated under the Federal Toxic Substances Control Act of 1976. The Utilities have procedures in place to manage and dispose of oil and equipment containing PCBs properly when they are removed from service. Water Quality Under NYSDEC regulations, the operation of CECONY’s generating facilities requires permits for water discharges and water withdrawals. Conditions to the renewal of such permits may include limitations on the operations of the permitted facility or requirements to install certain equipment, the cost of which could be substantial. For information about the company’s generating facilities, see “CECONY – Electric Operations – Electric Facilities” and “Steam Operations – Steam Facilities” above in this Item 1. Certain governmental authorities are investigating contamination in the Hudson River and the New York Harbor. These waters run through portions of CECONY’s service area. Governmental authorities could require entities that released hazardous substances that contaminated these waters to bear the cost of investigation and remediation, which could be substantial. Fuel expenses increased $23 million in 2017 compared with 2016 due to higher unit costs. Other operations and maintenance expenses decreased $119 million in 2017 compared with 2016 due primarily to lower costs for pension and other postretirement benefits ($89 million) and other employee benefits related to a rabbi trust ($22 million). Depreciation and amortization increased $60 million in 2017 compared with 2016 due primarily to higher electric utility plant balances. Taxes, other than income taxes increased $78 million in 2017 compared with 2016 due primarily to higher property taxes ($97 million) and the absence in 2017 of a favorable state audit settlement in 2016 ($5 million), offset in part by deferral of under-collected property taxes due to new property tax rates for fiscal year 2017 – 2018 ($21 million) and lower state and local taxes ($4 million). Gas CECONY’s results of gas operations for the year ended December 31, 2017 compared with the year ended December 31, 2016 is as follows
<table><tr><td></td><td colspan="3">For the Years Ended December 31,</td></tr><tr><td>(Millions of Dollars)</td><td>2017</td><td>2016</td><td>Variation</td></tr><tr><td>Operating revenues</td><td>$1,901</td><td>$1,508</td><td>$393</td></tr><tr><td>Gas purchased for resale</td><td>510</td><td>319</td><td>191</td></tr><tr><td>Other operations and maintenance</td><td>413</td><td>378</td><td>35</td></tr><tr><td>Depreciation and amortization</td><td>185</td><td>159</td><td>26</td></tr><tr><td>Taxes, other than income taxes</td><td>298</td><td>265</td><td>33</td></tr><tr><td>Gas operating income</td><td>$495</td><td>$387</td><td>$108</td></tr></table>
CECONY’s gas sales and deliveries, excluding off-system sales, in 2017 compared with 2016 were
<table><tr><td></td><td colspan="4">Thousands of Dt Delivered</td><td colspan="4">Revenues in Millions (a)</td></tr><tr><td></td><td colspan="2">For the Years Ended</td><td colspan="2"></td><td colspan="2">For the Years Ended</td><td colspan="2"></td></tr><tr><td>Description</td><td>December 31, 2017</td><td>December 31, 2016</td><td>Variation</td><td>Percent Variation</td><td>December 31, 2017</td><td>December 31, 2016</td><td>Variation</td><td>Percent Variation</td></tr><tr><td>Residential</td><td>52,244</td><td>47,794</td><td>4,450</td><td>9.3%</td><td>$802</td><td>$667</td><td>$135</td><td>20.2%</td></tr><tr><td>General</td><td>30,761</td><td>28,098</td><td>2,663</td><td>9.5</td><td>334</td><td>266</td><td>68</td><td>25.6</td></tr><tr><td>Firm transportation</td><td>71,353</td><td>68,442</td><td>2,911</td><td>4.3</td><td>524</td><td>426</td><td>98</td><td>23.0</td></tr><tr><td>Total firm sales and transportation</td><td>154,358</td><td>144,334</td><td>10,024</td><td>6.9(b)</td><td>1,660</td><td>1,359</td><td>301</td><td>22.1</td></tr><tr><td>Interruptible sales (c)</td><td>7,553</td><td>8,957</td><td>-1,404</td><td>-15.7</td><td>35</td><td>34</td><td>1</td><td>2.9</td></tr><tr><td>NYPA</td><td>37,033</td><td>43,101</td><td>-6,068</td><td>-14.1</td><td>2</td><td>2</td><td>—</td><td>—</td></tr><tr><td>Generation plants</td><td>61,800</td><td>87,835</td><td>-26,035</td><td>-29.6</td><td>25</td><td>25</td><td>—</td><td>—</td></tr><tr><td>Other</td><td>21,317</td><td>21,165</td><td>152</td><td>0.7</td><td>31</td><td>32</td><td>-1</td><td>-3.1</td></tr><tr><td>Other operating revenues (d)</td><td>—</td><td>—</td><td>—</td><td>—</td><td>148</td><td>56</td><td>92</td><td>Large</td></tr><tr><td>Total</td><td>282,061</td><td>305,392</td><td>-23,331</td><td>-7.6%</td><td>$1,901</td><td>$1,508</td><td>$393</td><td>26.1%</td></tr></table>
(a) Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism, as a result of which, delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. (b) After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area increased 5.9 percent in 2017 compared with 2016, reflecting primarily increased volumes attributable to the growth in the number of gas customers. (c) Includes 3,816 thousands and 4,708 thousands of Dt for 2017 and 2016, respectively, which are also reflected in firm transportation and other. (d) Other gas operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plans. See Note B to the financial statements in Item 8. Operating revenues increased $393 million in 2017 compared with 2016 due primarily to increased gas purchased for resale expense ($191 million) and higher revenues from the gas rate plan and growth in the number of customers ($182 million). Gas purchased for resale increased $191 million in 2017 compared with 2016 due to higher unit costs ($176 million) and purchased volumes ($15 million). |
1,467.9 | What do all Cash and cash equivalents sum up, excluding those negative ones in Fair Value? (in million) | Stock Performance Graph The following graph compares the most recent five-year performance of Alcoa’s common stock with (1) the Standard & Poor’s 500? Index and (2) the Standard & Poor’s 500? Materials Index, a group of 27 companies categorized by Standard & Poor’s as active in the “materials” market sector. Such information shall not be deemed to be “filed. ”
<table><tr><td>As of December 31,</td><td>2010</td><td>2011</td><td>2012</td><td>2013</td><td>2014</td><td>2015</td></tr><tr><td>AlcoaInc.</td><td>$100</td><td>$57</td><td>$58</td><td>$72</td><td>$107</td><td>$68</td></tr><tr><td>S&P 500<sup>®</sup>Index</td><td>100</td><td>102</td><td>118</td><td>157</td><td>178</td><td>181</td></tr><tr><td>S&P 500<sup>®</sup>Materials Index</td><td>100</td><td>90</td><td>104</td><td>130</td><td>139</td><td>128</td></tr></table>
Copyright?2016 Standard & Poor’s, a division of The McGraw-Hill Companies Inc. All rights reserved. Source: Research Data Group, Inc. (www. researchdatagroup. com/S&P. htm)
<table><tr><td></td><td colspan="2">For the year ended December 31,</td></tr><tr><td>$ in millions</td><td>2011</td><td>2010</td></tr><tr><td>Acquisition-related charges</td><td>—</td><td>5.7</td></tr><tr><td>Integration-related charges:</td><td></td><td></td></tr><tr><td>Staff costs</td><td>2.8</td><td>39.1</td></tr><tr><td>Technology, contractor and related costs</td><td>11.0</td><td>53.4</td></tr><tr><td>Professional services</td><td>15.6</td><td>51.8</td></tr><tr><td>Total integration-related charges</td><td>29.4</td><td>144.3</td></tr><tr><td>Total transaction and integration charges</td><td>29.4</td><td>150.0</td></tr></table>
3. FAIR VALUE OFASSETS AND LIABILITIES The carrying value and fair value of financial instruments is presented in the below summary table. The fair value of financial instruments held by consolidated investment products is presented in Note 20, "Consolidated Investment Products. "
<table><tr><td></td><td colspan="3">December 31, 2011</td><td colspan="2">December 31, 2010</td></tr><tr><td>$ in millions</td><td>Footnote Reference</td><td>Carrying Value</td><td>Fair Value</td><td>Carrying Value</td><td>Fair Value</td></tr><tr><td>Cash and cash equivalents</td><td></td><td>727.4</td><td>727.4</td><td>740.5</td><td>740.5</td></tr><tr><td>Available for sale investments</td><td>4</td><td>63.5</td><td>63.5</td><td>100.0</td><td>100.0</td></tr><tr><td>Assets held for policyholders</td><td></td><td>1,243.5</td><td>1,243.5</td><td>1,295.4</td><td>1,295.4</td></tr><tr><td>Trading investments</td><td>4</td><td>187.5</td><td>187.5</td><td>180.6</td><td>180.6</td></tr><tr><td>Foreign time deposits*</td><td>4</td><td>32.2</td><td>32.2</td><td>28.2</td><td>28.2</td></tr><tr><td>Support agreements*</td><td>19,20</td><td>-1.0</td><td>-1.0</td><td>-2.0</td><td>-2.0</td></tr><tr><td>Policyholder payables</td><td></td><td>-1,243.5</td><td>-1,243.5</td><td>-1,295.4</td><td>-1,295.4</td></tr><tr><td>Financial instruments sold, not yet purchased</td><td></td><td>-1.0</td><td>-1.0</td><td>-0.7</td><td>-0.7</td></tr><tr><td>Derivative liabilities</td><td></td><td>—</td><td>—</td><td>-0.1</td><td>-0.1</td></tr><tr><td>Note Payable</td><td></td><td>-16.8</td><td>-16.8</td><td>-18.9</td><td>-18.9</td></tr><tr><td>Total debt*</td><td>9</td><td>-1,284.7</td><td>-1,307.5</td><td>-1,315.7</td><td>-1,339.3</td></tr></table>
* These financial instruments are not measured at fair value on a recurring basis. See the indicated footnotes for additional information about the carrying and fair values of these financial instruments. Foreign time deposits are measured at cost plus accrued interest, which approximates fair value. A three-level valuation hierarchy exists for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: ? Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ? Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ? Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. An asset or liability's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three types of valuation approaches: a market approach, which uses observable prices and other relevant information that is generated by market transactions involving identical or comparable assets or liabilities; an income approach, which uses valuation techniques to convert future amounts to a single, discounted present value amount; and a cost approach, which is based on the amount that currently would be required to replace the service capacity of an asset. The following is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring Table of Contents Contractual Obligations We have various financial obligations that require future cash payments. The following table outlines the timing of payment requirements related to our commitments as of December 31, 2011:
<table><tr><td>$ in millions</td><td>Total<sup>-4(5)</sup></td><td>Within 1 Year</td><td>1-3 Years</td><td>3-5 Years</td><td>More Than 5 Years</td></tr><tr><td>Total debt</td><td>1,284.7</td><td>215.1</td><td>530.6</td><td>539.0</td><td>—</td></tr><tr><td>Estimated interest payments on total debt<sup>-1</sup></td><td>90.6</td><td>40.1</td><td>39.2</td><td>11.3</td><td>—</td></tr><tr><td>Operating leases<sup>-2</sup></td><td>618.0</td><td>69.4</td><td>133.1</td><td>127.0</td><td>288.5</td></tr><tr><td>Defined benefit pension and postretirement medical obligations<sup>-3</sup></td><td>43.8</td><td>8.3</td><td>26.3</td><td>9.2</td><td>N/A</td></tr><tr><td>Total</td><td>2,037.1</td><td>332.9</td><td>729.2</td><td>686.5</td><td>288.5</td></tr></table>
(1) Total debt includes $745.7 million of fixed rate debt. Fixed interest payments are therefore reflected in the table above in the periods they are due. The credit facility, $539.0 million outstanding at December 31, 2011, provides for borrowings of various maturities. Interest is payable based upon LIBOR, Prime, Federal Funds or other bank-provided rates in existence at the time of each borrowing. (2) Operating leases reflect obligations for leased building space. See Item 8, Financial Statements and Supplementary Data - Note 14, “Operating Leases” for sublease information. (3) Expected future contributions to defined benefit plans of $43.8 million are estimated for the next five years, and are comprised of $31.8 million related to pension plans and $12.0 million related to a postretirement medical plan. See Item 8, Financial Statements and Supplementary Data - Note 13, “Retirement Benefit Plans” for detailed benefit pension and postretirement plan information. (4) The company has capital commitments into co-invested funds that are to be drawn down over the life of the partnership as investment opportunities are identified. At December 31, 2011, the company's undrawn capital commitments were $161.2 million. See Note 19, “Commitments and Contingencies” for additional details. (5) Due to the uncertainty with respect to the timing of future cash flows associated with unrecognized tax benefits at December 31, 2011, the company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. Therefore, $19.5 million of gross unrecognized tax benefits have been excluded from the contractual obligations table above. See Item 8, Financial Statements and Supplementary Data, Note 16 - “Taxation” for a discussion on income taxes. Critical Accounting Policies and Estimates Our significant accounting policies are disclosed in Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies” to our Consolidated Financial Statements. The accounting policies and estimates that we believe are the most critical to an understanding of our results of operations and financial condition are those that require complex management judgment regarding matters that are highly uncertain at the time policies were applied and estimates were made. These accounting policies and estimates are discussed below; however, the additional accounting policy detail in the footnote previously referenced is important to the discussion of each of the topics. Different estimates reasonably could have been used in the current period that would have had a material effect on these financial statements, and changes in these estimates are likely to occur from period-to-period in the future. Taxation. We operate in several countries and several states through our various subsidiaries, and must allocate our income, expenses, and earnings under the various laws and regulations of each of these taxing jurisdictions. Accordingly, our provision for income taxes represents our total estimate of the liability that we have incurred for doing business each year in all of our locations. Annually we file tax returns that represent our filing positions within each jurisdiction and settle our return liabilities. Each jurisdiction has the right to audit those returns and may take different positions with respect to income and expense allocations and taxable earnings determinations. Because the determinations of our annual provisions are subject to judgments and estimates, it is possible that actual results will vary from those recognized in our financial statements. As a result, it is likely that additions to, or reductions of, income tax expense will occur each year for prior reporting periods as actual tax returns and tax audits are settled. the nature of the business; making a significant accounting policyy change in certain situations; entering into transactions with affiliates; and incurring indebtedness through the subsidiaries (other than the borrower, Invesco Finance PLC). Many of these restrictions are subject to certain minimum thresholds and exceptions. Financial covenants under the credit agreement include: (i) the quarterly maintenance of a debt/EBITDA leverage ratio, as defined in the credit agreement, of not greater than 3.25:1.00, (ii) a coverage ratio (EBITDA, as defined in the credit agreement/interest payable for the four consecutive fiscal quarters ended before the date of determination) of not less than 4.00:1.00. The credit agreement governing the credit facility also contains customary provisions regarding events of default which could result in an acceleration or increase in amounts due, including (subject to certain materiality thresholds and grace periods) payment default, failure to comply with covenants, material inaccuracy of representation or warranty, bankruptcy or insolvency proceedings, change of control, certain judgments, ERISA matters, cross-default to other debt agreements, governmental action prohibiting or restricting the company or its subsidiaries in a manner that has a material adverse effect and failure of certain guaranty obligations. The company is in compliance with all regulatory minimum net capital requirements. The lenders (and their respective affiliates) may have provided, and may in the future provide, investment banking, cash management, underwriting, lending, commercial banking, leasing, foreign exchange, trust or other advisory services to the company a and its subsidiaries and affiliates. These parties may have received, and may in the future receive, customary compensation forrthese services. At December 31, 2017, the company maintains approximately $10.6 million in letters of credit from a variety of banks. The letters of credit are generally one-year automatically-renewable facilities and are maintained for various commercial reasons.9. SHARE CAPITAL The number of common shares and common share equivalents issued are represented in the table below:
<table><tr><td>In millions</td><td>December 31, 2017</td><td>December 31, 2016</td><td>December 31, 2015</td></tr><tr><td>Common shares issued</td><td>490.4</td><td>490.4</td><td>490.4</td></tr><tr><td>Less: Treasury shares for which dividend and voting rights do not apply</td><td>-83.3</td><td>-86.6</td><td>-72.9</td></tr><tr><td>Common shares outstanding</td><td>407.1</td><td>403.8</td><td>417.5</td></tr></table>
The company did not purchase shares in the open market during the twelve months ended December 31, 2017 (year ended December 31, 2016: 18.1 million shares at a cost of $535.0 million). Separately, an aggregate of 1.9 million shares were withheld on vesting events during the year ended December 31, 2017 to meet employees' withholding tax obligations (December 31, 2016: 1.5 million). The fair value of these shares withheld at the respective withholding dates was $63.8 million (December 31, 2016: $42.0 million). At December 31, 2017, approximately $1,643.0 million remained authorized under the company's share repurchase authorizations approved by the Board on October 11, 2013 and July 22, 2016 (December 31, 2016: $1,643.0 million). Total treasury shares at December 31, 2017 were 92.4 million (December 31, 2016: 95.9 million), including 9.1 million unvested restricted stock awards (December 31, 2016: 9.3 million) for which dividend and voting rights apply. The market price of common shares at the end of 2017 was $36.54. The total market value of the company's 92.4 million treasury shares was $3.4 billion at December 31, 2017. Movements in Treasury Shares comprise: |
2 | How many kinds of Writedowns are smaller than 0 in 2008 for Fixed Maturity Securities? | Gross other postretirement benefit payments for the next ten years, which reflect expected future service where appropriate, and gross subsidies to be received under the Prescription Drug Act are expected to be as follows:
<table><tr><td></td><td> Gross</td><td> Prescription Drug Subsidies (In millions)</td><td> Net</td></tr><tr><td>2009</td><td>$135</td><td>$-15</td><td>$120</td></tr><tr><td>2010</td><td>$140</td><td>$-16</td><td>$124</td></tr><tr><td>2011</td><td>$146</td><td>$-16</td><td>$130</td></tr><tr><td>2012</td><td>$150</td><td>$-17</td><td>$133</td></tr><tr><td>2013</td><td>$154</td><td>$-18</td><td>$136</td></tr><tr><td>2014-2018</td><td>$847</td><td>$-107</td><td>$740</td></tr></table>
Insolvency Assessments Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and liabilities held for insolvency assessments are as follows:
<table><tr><td></td><td colspan="2"> December 31,</td></tr><tr><td></td><td> 2008</td><td> 2007</td></tr><tr><td></td><td colspan="2"> (In millions)</td></tr><tr><td>Other Assets:</td><td></td><td></td></tr><tr><td>Premium tax offset for future undiscounted assessments</td><td>$50</td><td>$40</td></tr><tr><td>Premium tax offsets currently available for paid assessments</td><td>7</td><td>6</td></tr><tr><td>Receivable for reimbursement of paid assessments -1</td><td>7</td><td>7</td></tr><tr><td></td><td>$64</td><td>$53</td></tr><tr><td>Other Liabilities:</td><td></td><td></td></tr><tr><td>Insolvency assessments</td><td>$83</td><td>$74</td></tr></table>
(1) The Company holds a receivable from the seller of a prior acquisition in accordance with the purchase agreement. Assessments levied against the Company were $2 million, ($1) million and $2 million for the years ended December 31, 2008, 2007 and 2006, respectively. Effects of Inflation The Company does not believe that inflation has had a material effect on its consolidated results of operations, except insofar as inflation may affect interest rates. Inflation in the United States has remained contained and been in a general downtrend for an extended period. However, in light of recent and ongoing aggressive fiscal and monetary stimulus measures by the U. S. federal government and foreign governments, it is possible that inflation could increase in the future. An increase in inflation could affect our business in several ways. During inflationary periods, the value of fixed income investments falls which could increase realized and unrealized losses. Inflation also increases expenses for labor and other materials, potentially putting pressure on profitability if such costs can not be passed through in our product prices. Inflation could also lead to increased costs for losses and loss adjustment expenses in our Auto & Home business, which could require us to adjust our pricing to reflect our expectations for future inflation. If actual inflation exceeds the expectations we use in pricing our policies, the profitability of our Auto & Home business would be adversely affected. Prolonged and elevated inflation could adversely affect the financial markets and the economy generally, and dispelling it may require governments to pursue a restrictive fiscal and monetary policy, which could constrain overall economic activity, inhibit revenue growth and reduce the number of attractive investment opportunities. Adoption of New Accounting Pronouncements Fair Value Effective January 1, 2008, the Company adopted SFAS No.157, Fair Value Measurements. SFAS 157 which defines fair value, establishes a consistent framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and requires enhanced disclosures about fair value measurements and applied the provisions of the statement prospectively to assets and liabilities measured at fair value. The adoption of SFAS 157 changed the valuation of certain freestanding derivatives by moving from a mid to bid pricing convention as it relates to certain volatility inputs as well as the addition of liquidity adjustments and adjustments for risks inherent in a particular input or valuation technique. The adoption of SFAS 157 also changed the valuation of the Company’s embedded derivatives, most significantly the valuation of embedded derivatives associated with certain riders on variable annuity contracts. The change in valuation of embedded derivatives associated with riders on annuity contracts resulted from the incorporation of risk margins associated with non capital market inputs and the inclusion of the Company’s own credit standing in their valuation. At January 1, 2008, the impact of adopting SFAS 157 on assets and liabilities measured at estimated fair value was $30 million ($19 million, net of income tax) and was recognized as a change in estimate in the accompanying consolidated statement of income where it was presented in the respective income statement caption to which the item measured at estimated fair value is presented. There were no significant changes in estimated fair value of items measured at fair value and reflected in accumulated other comprehensive income (loss). The addition of risk margins and the Company’s own credit spread in the valuation of embedded derivatives associated with annuity contracts may result in significant volatility in the Company’s consolidated net income in future periods. Note 24 of the Notes to the At December 31, 2008 and 2007, the Company’s gross unrealized losses related to its fixed maturity and equity securities of $29.8 billion and $4.7 billion, respectively, were concentrated, calculated as a percentage of gross unrealized loss, as follows:
<table><tr><td></td><td colspan="2"> December 31,</td></tr><tr><td></td><td>2008</td><td> 2007</td></tr><tr><td> Sector:</td><td></td><td></td></tr><tr><td>U.S. corporate securities</td><td>33%</td><td>44%</td></tr><tr><td>Foreign corporate securities</td><td>19</td><td>16</td></tr><tr><td>Residential mortgage-backed securities</td><td>16</td><td>8</td></tr><tr><td>Asset-backed securities</td><td>13</td><td>11</td></tr><tr><td>Commercial mortgage-backed securities</td><td>11</td><td>4</td></tr><tr><td>State and political subdivision securities</td><td>3</td><td>2</td></tr><tr><td>Foreign government securities</td><td>1</td><td>4</td></tr><tr><td>Other</td><td>4</td><td>11</td></tr><tr><td>Total</td><td>100%</td><td>100%</td></tr><tr><td> Industry:</td><td></td><td></td></tr><tr><td>Mortgage-backed</td><td>27%</td><td>12%</td></tr><tr><td>Finance</td><td>24</td><td>33</td></tr><tr><td>Asset-backed</td><td>13</td><td>11</td></tr><tr><td>Consumer</td><td>11</td><td>3</td></tr><tr><td>Utility</td><td>8</td><td>8</td></tr><tr><td>Communication</td><td>5</td><td>2</td></tr><tr><td>Industrial</td><td>4</td><td>19</td></tr><tr><td>Foreign government</td><td>1</td><td>4</td></tr><tr><td>Other</td><td>7</td><td>8</td></tr><tr><td>Total</td><td>100%</td><td>100%</td></tr></table>
Writedowns. The components of fixed maturity and equity securities net investment gains (losses) are as follows:
<table><tr><td></td><td colspan="3">Fixed Maturity Securities</td><td colspan="3">Equity Securities</td><td colspan="3">Total</td></tr><tr><td></td><td>2008</td><td>2007</td><td>2006</td><td>2008</td><td>2007</td><td>2006</td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td></td><td colspan="9">(In millions)</td></tr><tr><td>Proceeds</td><td>$62,495</td><td>$78,001</td><td>$86,725</td><td>$2,107</td><td>$1,112</td><td>$845</td><td>$64,602</td><td>$79,113</td><td>$87,570</td></tr><tr><td>Gross investment gains</td><td>858</td><td>554</td><td>421</td><td>436</td><td>226</td><td>130</td><td>1,294</td><td>780</td><td>551</td></tr><tr><td>Gross investment losses</td><td>-1,511</td><td>-1,091</td><td>-1,484</td><td>-263</td><td>-43</td><td>-22</td><td>-1,774</td><td>-1,134</td><td>-1,506</td></tr><tr><td>Writedowns</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Credit-related</td><td>-1,138</td><td>-58</td><td>-56</td><td>-90</td><td>-19</td><td>-24</td><td>-1,228</td><td>-77</td><td>-80</td></tr><tr><td>Other than credit-related -1</td><td>-158</td><td>-20</td><td>—</td><td>-340</td><td>—</td><td>—</td><td>-498</td><td>-20</td><td>—</td></tr><tr><td>Total writedowns</td><td>-1,296</td><td>-78</td><td>-56</td><td>-430</td><td>-19</td><td>-24</td><td>-1,726</td><td>-97</td><td>-80</td></tr><tr><td>Net investment gains (losses)</td><td>$-1,949</td><td>$-615</td><td>$-1,119</td><td>$-257</td><td>$164</td><td>$84</td><td>$-2,206</td><td>$-451</td><td>$-1,035</td></tr></table>
(1) Other than credit-related writedowns include items such as equity securities where the primary reason for the writedown was the severity and/or the duration of an unrealized loss position and fixed maturity securities where an interest-rate related writedown was taken. Overview of Fixed Maturity and Equity Security Writedowns. Writedowns of fixed maturity and equity securities were $1.7 billion, $97 million and $80 million for the years ended December 31, 2008, 2007 and 2006, respectively. Writedowns of fixed maturity securities were $1.3 billion, $78 million and $56 million for the years ended December 31, 2008, 2007 and 2006, respectively. Writedowns of equity securities were $430 million, $19 million and $24 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company’s credit-related writedowns of fixed maturity and equity securities were $1.2 billion, $77 million and $80 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company’s credit-related writedowns of fixed maturity securities were $1.1 billion, $58 million and $56 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company’s creditrelated writedowns of equity securities were $90 million, $19 million and $24 million for the years ended December 31, 2008, 2007 and 2006, respectively. The $90 million of credit-related equity securities writedowns in 2008 were primarily on non-redeemable preferred securities. The Company’s three largest impairments totaled $528 million, $19 million and $33 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company records impairments as investment losses and adjusts the cost basis of the fixed maturity and equity securities accordingly. The Company does not change the revised cost basis for subsequent recoveries in value. Failure to comply with the financial and other covenants under our Credit Facilities, as well as the occurrence of certain material adverse events, would constitute defaults and would allow the lenders under our Credit Facilities to accelerate the maturity of all indebtedness under the related agreements. This could also have an adverse impact on the availability of financial assurances. In addition, maturity acceleration on our Credit Facilities constitutes an event of default under our other debt instruments, including our senior notes, and, therefore, our senior notes would also be subject to acceleration of maturity. If such acceleration were to occur, we would not have sufficient liquidity available to repay the indebtedness. We would likely have to seek an amendment under our Credit Facilities for relief from the financial covenants or repay the debt with proceeds from the issuance of new debt or equity, or asset sales, if necessary. We may be unable to amend our Credit Facilities or raise sufficient capital to repay such obligations in the event the maturities are accelerated. Financial assurance We are required to provide financial assurance to governmental agencies and a variety of other entities under applicable environmental regulations relating to our landfill operations for capping, closure and post-closure costs, and related to our performance under certain collection, landfill and transfer station contracts. We satisfy these financial assurance requirements by providing surety bonds, letters of credit, insurance policies or trust deposits. The amount of the financial assurance requirements for capping, closure and post-closure costs is determined by applicable state environmental regulations. The financial assurance requirements for capping, closure and post-closure costs may be associated with a portion of the landfill or the entire landfill. Generally, states will require a third-party engineering specialist to determine the estimated capping, closure and postclosure costs that are used to determine the required amount of financial assurance for a landfill. The amount of financial assurance required can, and generally will, differ from the obligation determined and recorded under U. S. GAAP. The amount of the financial assurance requirements related to contract performance varies by contract. Additionally, we are required to provide financial assurance for our insurance program and collateral for certain performance obligations. We do not expect a material increase in financial assurance requirements during 2010, although the mix of financial assurance instruments may change. These financial instruments are issued in the normal course of business and are not debt of our company. Since we currently have no liability for these financial assurance instruments, they are not reflected in our consolidated balance sheets. However, we record capping, closure and post-closure liabilities and self-insurance liabilities as they are incurred. The underlying obligations of the financial assurance instruments, in excess of those already reflected in our consolidated balance sheets, would be recorded if it is probable that we would be unable to fulfill our related obligations. We do not expect this to occur. Off-Balance Sheet Arrangements We have no off-balance sheet debt or similar obligations, other than financial assurance instruments and operating leases that are not classified as debt. We do not guarantee any third-party debt. Free Cash Flow We define free cash flow, which is not a measure determined in accordance with U. S. GAAP, as cash provided by operating activities less purchases of property and equipment, plus proceeds from sales of property and equipment as presented in our consolidated statements of cash flows. Our free cash flow for the years ended December 31, 2009, 2008 and 2007 is calculated as follows (in millions): |
0.999656 | What is the percentage of all elements that are positive to the total amount, for Auto & Home? | Stock Performance Graph The following graph compares the most recent five-year performance of the Company’s common stock with (1) the Standard & Poor’s (S&P) 500? Index, (2) the S&P 500? Materials Index, a group of 25 companies categorized by Standard & Poor’s as active in the “materials” market sector, (3) the S&P Aerospace & Defense Select Industry Index, a group of 33 companies categorized by Standard & Poor’s as active in the “aerospace & defense” industry and (4) the S&P 500? Industrials Index, a group of 69 companies categorized by Standard & Poor’s as active in the “industrials” market sector. The graph assumes, in each case, an initial investment of $100 on December 31, 2013, and the reinvestment of dividends. Historical prices prior to the separation of Alcoa Corporation from the Company on November 1, 2016, have been adjusted to reflect the value of the Separation transaction. The graph, table and related information shall not be deemed to be “filed” with the SEC, nor shall such information be incorporated by reference into future filings under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing. Please note that the Company intends to replace the S&P 500? Materials Index with the S&P Aerospace & Defense Select Industry Index and the S&P 500? Industrials Index in subsequent stock performance graphs. We believe that the companies and industries represented in the S&P Aerospace & Defense Select Industry Index and the S&P 500? Industrials Index better reflect the markets in which the Company currently participates. All three indices are represented in the graph below.
<table><tr><td>As of December 31,</td><td>2013</td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>2018</td></tr><tr><td>Arconic Inc.</td><td>$100</td><td>$149.83</td><td>$94.62</td><td>$80.22</td><td>$119.02</td><td>$74.47</td></tr><tr><td>S&P 500<sup>®</sup>Index</td><td>100</td><td>113.69</td><td>115.26</td><td>129.05</td><td>157.22</td><td>150.33</td></tr><tr><td>S&P 500<sup>®</sup>Materials Index</td><td>100</td><td>106.91</td><td>97.95</td><td>114.30</td><td>141.55</td><td>120.74</td></tr><tr><td>S&P Aerospace & Defense Select Industry Index</td><td>100</td><td>111.43</td><td>117.49</td><td>139.70</td><td>197.50</td><td>181.56</td></tr><tr><td>S&P 500<sup>®</sup>Industrials Index</td><td>100</td><td>109.83</td><td>107.04</td><td>127.23</td><td>153.99</td><td>133.53</td></tr></table>
Copyright?2019 Standard & Poor's, a division of S&P Global. All rights reserved MetLife, Inc. Notes to the Consolidated Financial Statements — (Continued) Commitments Leases In accordance with industry practice, certain of the Company’s income from lease agreements with retail tenants are contingent upon the level of the tenants’ revenues. Additionally, the Company, as lessee, has entered into various lease and sublease agreements for office space, information technology and other equipment. Future minimum rental and sublease income, and minimum gross rental payments relating to these lease agreements are as follows:
<table><tr><td></td><td> Rental Income</td><td> Sublease Income</td><td> Gross Rental Payments</td></tr><tr><td></td><td colspan="3"> (In millions)</td></tr><tr><td>2010</td><td>$415</td><td>$15</td><td>$287</td></tr><tr><td>2011</td><td>$357</td><td>$17</td><td>$237</td></tr><tr><td>2012</td><td>$288</td><td>$16</td><td>$190</td></tr><tr><td>2013</td><td>$253</td><td>$15</td><td>$169</td></tr><tr><td>2014</td><td>$221</td><td>$9</td><td>$119</td></tr><tr><td>Thereafter</td><td>$723</td><td>$44</td><td>$994</td></tr></table>
During 2008, the Company moved certain of its operations in New York from Long Island City to New York City. As a result of this movement of operations and current market conditions, which precluded the Company’s immediate and complete sublet of all unused space in both Long Island City and New York City, the Company incurred a lease impairment charge of $38 million which is included within other expenses in Banking, Corporate & Other. The impairment charge was determined based upon the present value of the gross rental payments less sublease income discounted at a risk-adjusted rate over the remaining lease terms which range from 15-20 years. The Company has made assumptions with respect to the timing and amount of future sublease income in the determination of this impairment charge. During 2009, pending sublease deals were impacted by the further decline of market conditions, which resulted in an additional lease impairment charge of $52 million. See Note 19 for discussion of $28 million of such charges related to restructuring. Additional impairment charges could be incurred should market conditions deteriorate further or last for a period significantly longer than anticipated. Commitments to Fund Partnership Investments The Company makes commitments to fund partnership investments in the normal course of business. The amounts of these unfunded commitments were $4.1 billion and $4.5 billion at December 31, 2009 and 2008, respectively. The Company anticipates that these amounts will be invested in partnerships over the next five years. Mortgage Loan Commitments The Company has issued interest rate lock commitments on certain residential mortgage loan applications totaling $2.7 billion and $8.0 billion at December 31, 2009 and 2008, respectively. The Company intends to sell the majority of these originated residential mortgage loans. Interest rate lock commitments to fund mortgage loans that will be held-for-sale are considered derivatives and their estimated fair value and notional amounts are included within interest rate forwards in Note 4. The Company also commits to lend funds under certain other mortgage loan commitments that will be held-for-investment. The amounts of these mortgage loan commitments were $2.2 billion and $2.7 billion at December 31, 2009 and 2008, respectively. Commitments to Fund Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments The Company commits to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of these unfunded commitments were $1.3 billion and $1.0 billion at December 31, 2009 and 2008, respectively. Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties pursuant to which it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $800 million, with a cumulative maximum of $1.6 billion, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. MetLife, Inc. Notes to the Consolidated Financial Statements — (Continued) Options. Additional shares carried forward from the Stock Incentive Plan and available for issuance under the 2005 Stock Plan were 13,018,939 at December 31, 2009. There were no shares carried forward from the 2000 Directors Stock Plan. Each share issued under the 2005 Stock Plan in connection with a Stock Option or Stock Appreciation Right reduces the number of shares remaining for issuance under that plan by one, and each share issued under the 2005 Stock Plan in connection with awards other than Stock Options or Stock Appreciation Rights reduces the number of shares remaining for issuance under that plan by 1.179 shares. The number of shares reserved for issuance under the 2005 Directors Stock Plan are 2,000,000. At December 31, 2009, the aggregate number of shares remaining available for issuance pursuant to the 2005 Stock Plan and the 2005 Directors Stock Plan were 47,903,044 and 1,838,594, respectively. Stock Option exercises and other stock-based awards to employees settled in shares are satisfied through the issuance of shares held in treasury by the Company. Under the current authorized share repurchase program, as described previously, sufficient treasury shares exist to satisfy foreseeable obligations under the Incentive Plans. Compensation expense related to awards under the Incentive Plans is recognized based on the number of awards expected to vest, which represents the awards granted less expected forfeitures over the life of the award, as estimated at the date of grant. Unless a material deviation from the assumed rate is observed during the term in which the awards are expensed, any adjustment necessary to reflect differences in actual experience is recognized in the period the award becomes payable or exercisable. Compensation expense of $69 million, $123 million and $146 million, and income tax benefits of $24 million, $43 million and $51 million, related to the Incentive Plans was recognized for the years ended December 31, 2009, 2008 and 2007, respectively. Compensation expense is principally related to the issuance of Stock Options, Performance Shares and Restricted Stock Units. The majority of the awards granted by the Holding Company are made in the first quarter of each year. Stock Options All Stock Options granted had an exercise price equal to the closing price of the Holding Company’s common stock as reported on the New York Stock Exchange on the date of grant, and have a maximum term of ten years. Certain Stock Options granted under the Stock Incentive Plan and the 2005 Stock Plan have or will become exercisable over a three year period commencing with the date of grant, while other Stock Options have or will become exercisable three years after the date of grant. Stock Options issued under the 2000 Directors Stock Plan were exercisable immediately. The date at which a Stock Option issued under the 2005 Directors Stock Plan becomes exercisable would be determined at the time such Stock Option is granted. A summary of the activity related to Stock Options for the year ended December 31, 2009 is presented below. The aggregate intrinsic value was computed using the closing share price on December 31, 2009 of $35.35 and December 31, 2008 of $34.86, as applicable.
<table><tr><td></td><td>Shares Under</td><td> Weighted Average </td><td rowspan="2"> Weighted Average Remaining Contractual Term (Years)</td><td rowspan="2"> Aggregate Intrinsic Value (In millions)</td></tr><tr><td></td><td>Option</td><td> Exercise Price</td></tr><tr><td>Outstanding at January 1, 2009</td><td>26,158,275</td><td>$41.73</td><td>5.73</td><td>$—</td></tr><tr><td>Granted</td><td>5,450,662</td><td>$23.61</td><td></td><td></td></tr><tr><td>Exercised</td><td>-254,576</td><td>$30.23</td><td></td><td></td></tr><tr><td>Cancelled/Expired</td><td>-794,655</td><td>$39.79</td><td></td><td></td></tr><tr><td>Forfeited</td><td>-407,301</td><td>$48.72</td><td></td><td></td></tr><tr><td>Outstanding at December 31, 2009</td><td>30,152,405</td><td>$38.51</td><td>5.50</td><td>$—</td></tr><tr><td>Aggregate number of stock options expected to vest at December 31, 2009</td><td>29,552,636</td><td>$38.58</td><td>5.43</td><td>$—</td></tr><tr><td>Exercisable at December 31, 2009</td><td>21,651,876</td><td>$38.94</td><td>4.28</td><td>$—</td></tr></table>
The fair value of Stock Options is estimated on the date of grant using a binomial lattice model. Significant assumptions used in the Company’s binomial lattice model, which are further described below, include: expected volatility of the price of the Holding Company’s common stock; risk-free rate of return; expected dividend yield on the Holding Company’s common stock; exercise multiple; and the postvesting termination rate. Expected volatility is based upon an analysis of historical prices of the Holding Company’s common stock and call options on that common stock traded on the open market. The Company uses a weighted-average of the implied volatility for publicly-traded call options with the longest remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using monthly closing prices of the Holding Company’s common stock. The Company chose a monthly measurement interval for historical volatility as it believes this better depicts the nature of employee option exercise decisions being based on longer-term trends in the price of the underlying shares rather than on daily price movements. The binomial lattice model used by the Company incorporates different risk-free rates based on the imputed forward rates for U. S. Treasury Strips for each year over the contractual term of the option. The table below presents the full range of rates that were used for options granted during the respective periods. Dividend yield is determined based on historical dividend distributions compared to the price of the underlying common stock as of the valuation date and held constant over the life of the Stock Option. Reconciliation of GAAP revenues to operating revenues and GAAP expenses to operating expenses Year Ended December 31, 2009
<table><tr><td></td><td>Insurance Products</td><td>Retirement Products</td><td>Corporate Benefit Funding</td><td>Auto & Home</td><td>International</td><td>Banking Corporate & Other</td><td>Total</td></tr><tr><td></td><td></td><td></td><td colspan="2">(In millions)</td><td></td><td></td><td></td></tr><tr><td>Total revenues</td><td>$23,483</td><td>$3,543</td><td>$5,669</td><td>$3,113</td><td>$4,383</td><td>$867</td><td>$41,058</td></tr><tr><td>Less: Net investment gains (losses)</td><td>-2,258</td><td>-1,606</td><td>-2,260</td><td>-2</td><td>-903</td><td>-743</td><td>-7,772</td></tr><tr><td>Less: Adjustments related to net investment gains (losses)</td><td>-27</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-27</td></tr><tr><td>Less: Other adjustments to revenues</td><td>-74</td><td>-217</td><td>187</td><td>—</td><td>-169</td><td>22</td><td>-251</td></tr><tr><td>Total operating revenues</td><td>$25,842</td><td>$5,366</td><td>$7,742</td><td>$3,115</td><td>$5,455</td><td>$1,588</td><td>$49,108</td></tr><tr><td>Total expenses</td><td>$24,165</td><td>$4,108</td><td>$6,982</td><td>$2,697</td><td>$4,868</td><td>$2,571</td><td>$45,391</td></tr><tr><td>Less: Adjustments related to net investment gains (losses)</td><td>39</td><td>-739</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-700</td></tr><tr><td>Less: Other adjustments to expenses</td><td>-1</td><td>—</td><td>64</td><td>—</td><td>37</td><td>38</td><td>138</td></tr><tr><td>Total operating expenses</td><td>$24,127</td><td>$4,847</td><td>$6,918</td><td>$2,697</td><td>$4,831</td><td>$2,533</td><td>$45,953</td></tr></table>
Year Ended December 31, 2008
<table><tr><td></td><td>Insurance Products</td><td>Retirement Products</td><td>Corporate Benefit Funding</td><td>Auto & Home</td><td> International</td><td>Banking Corporate & Other</td><td>Total</td></tr><tr><td></td><td colspan="7">(In millions)</td></tr><tr><td>Total revenues</td><td>$26,754</td><td>$5,630</td><td>$7,559</td><td>$3,061</td><td>$6,001</td><td>$1,979</td><td>$50,984</td></tr><tr><td>Less: Net investment gains (losses)</td><td>1,558</td><td>901</td><td>-1,629</td><td>-134</td><td>169</td><td>947</td><td>1,812</td></tr><tr><td>Less: Adjustments related to net investment gains (losses)</td><td>18</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>18</td></tr><tr><td>Less: Other adjustments to revenues</td><td>-1</td><td>-35</td><td>45</td><td>—</td><td>69</td><td>13</td><td>91</td></tr><tr><td>Total operating revenues</td><td>$25,179</td><td>$4,764</td><td>$9,143</td><td>$3,195</td><td>$5,763</td><td>$1,019</td><td>$49,063</td></tr><tr><td>Total expenses</td><td>$23,418</td><td>$5,049</td><td>$7,735</td><td>$2,728</td><td>$5,044</td><td>$1,949</td><td>$45,923</td></tr><tr><td>Less: Adjustments related to net investment gains (losses)</td><td>262</td><td>577</td><td>—</td><td>—</td><td>—</td><td>—</td><td>839</td></tr><tr><td>Less: Other adjustments to expenses</td><td>-52</td><td>—</td><td>-29</td><td>—</td><td>17</td><td>-4</td><td>-68</td></tr><tr><td>Total operating expenses</td><td>$23,208</td><td>$4,472</td><td>$7,764</td><td>$2,728</td><td>$5,027</td><td>$1,953</td><td>$45,152</td></tr></table>
Less: Adjustments related to net investment gains The volatile market conditions that began in 2008 and continued into 2009 impacted several key components of our operating earnings available to common shareholders including net investment income, hedging costs, and certain market sensitive expenses. The markets also positively impacted our operating earnings available to common shareholders as conditions began to improve during 2009, resulting in lower DAC and DSI amortization. A $722 million decline in net investment income was the result of decreasing yields, including the effects of our higher quality, more liquid, but lower yielding investment position in response to the extraordinary market conditions. The impact of declining yields caused a $1.6 billion decrease in net investment income, which was partially offset by an increase of $846 million due to growth in average invested assets calculated excluding unrealized gains and losses. The decrease in yields resulted from the disruption and dislocation in the global financial markets experienced in 2008, which continued, but moderated, in 2009. The adverse yield impact was concentrated in the following four invested asset classes: ? Fixed maturity securities — primarily due to lower yields on floating rate securities from declines in short-term interest rates and an increased allocation to lower yielding, higher quality, U. S. Treasury, agency and government guaranteed securities, to increase liquidity in response to the extraordinary market conditions, as well as decreased income on our securities lending program, primarily due to the smaller size of the program in the current year. These adverse impacts were offset slightly as conditions improved late in 2009 and we began to reallocate our portfolio to higher-yielding assets; ? Real estate joint ventures — primarily due to declining property valuations on certain investment funds that carry their real estate at estimated fair value and operating losses incurred on properties that were developed for sale by development joint ventures; ? Cash, cash equivalents and short-term investments — primarily due to declines in short-term interest rates; and ? Mortgage loans — primarily due to lower prepayments on commercial mortgage loans and lower yields on variable rate loans reflecting declines in short-term interest rates. Equity markets experienced some recovery in 2009, which led to improved yields on other limited partnership interests. As many of our products are interest spread-based, the lower net investment income was significantly offset by lower interest credited expense on our investment and insurance products. The financial market conditions also resulted in a $348 million increase in net guaranteed annuity benefit costs in our Retirement Products segment, as increased hedging losses were only partially offset by lower guaranteed benefit costs. The key driver of the increase in other expenses stemmed from the impact of market conditions on certain expenses, primarily pension and postretirement benefit costs, reinsurance expenses and letter of credit fees. These increases coupled with higher variable costs, such as |
0.03235 | what is the growth rate in the consolidated revenues from 2011 to 2012? | Strategy Our mission is to achieve sustainable revenue and earnings growth through providing superior solutions to our customers. Our strategy to achieve this has been and will continue to be built on the following pillars: ? Expand Client Relationships — The overall market we serve continues to gravitate beyond single-product purchases to multi-solution partnerships. As the market dynamics shift, we expect our clients to rely more on our multidimensional service offerings. Our leveraged solutions and processing expertise can drive meaningful value and cost savings to our clients through more efficient operating processes, improved service quality and speed for our clients' customers. ? Buy, Build or Partner to Add Solutions to Cross-Sell — We continue to invest in growth through internal product development, as well as through product-focused or market-centric acquisitions that complement and extend our existing capabilities and provide us with additional solutions to cross-sell. We also partner from time to time with other entities to provide comprehensive offerings to our customers. By investing in solution innovation and integration, we continue to expand our value proposition to clients. ? Support Our Clients Through Market Transformation — The changing market dynamics are transforming the way our clients operate, which is driving incremental demand for our leveraged solutions, consulting expertise, and services around intellectual property. Our depth of services capabilities enables us to become involved earlier in the planning and design process to assist our clients as they manage through these changes. ? Continually Improve to Drive Margin Expansion — We strive to optimize our performance through investments in infrastructure enhancements and other measures that are designed to drive organic revenue growth and margin expansion. ? Build Global Diversification — We continue to deploy resources in emerging global markets where we expect to achieve meaningful scale. Revenues by Segment The table below summarizes the revenues by our reporting segments (in millions):
<table><tr><td></td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>FSG</td><td>$2,246.4</td><td>$2,076.8</td><td>$1,890.8</td></tr><tr><td>PSG</td><td>2,380.6</td><td>2,372.1</td><td>2,354.2</td></tr><tr><td>ISG</td><td>1,180.5</td><td>1,177.6</td><td>917.0</td></tr><tr><td>Corporate & Other</td><td>0.1</td><td>-0.9</td><td>-16.4</td></tr><tr><td>Total Consolidated Revenues</td><td>$5,807.6</td><td>$5,625.6</td><td>$5,145.6</td></tr></table>
Financial Solutions Group The focus of FSG is to provide the most comprehensive software and services for the core processing, customer channel, treasury services, cash management, wealth management and capital market operations of our financial institution customers in North America. We service the core and related ancillary processing needs of North American banks, credit unions, automotive financial companies, commercial lenders, and independent community and savings institutions. FIS offers a broad selection of in-house and outsourced solutions to banking customers that span the range of asset sizes. FSG customers are typically committed under multi-year contracts that provide a stable, recurring revenue base and opportunities for cross-selling additional financial and payments offerings. We employ several business models to provide our solutions to our customers. We typically deliver the highest value to our customers when we combine our software applications and deliver them in one of several types of outsourcing arrangements, such as an application service provider, facilities management processing or an application management arrangement. We are also able to deliver individual applications through a software licensing arrangement. Based upon our expertise gained through the foregoing arrangements, some clients also retain us to manage their IT operations without using any of our proprietary software. Our solutions in this segment include: MetLife, Inc. Notes to the Consolidated Financial Statements — (Continued) 5. Fair Value Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. Assets and Liabilities Measured at Fair Value Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis, including those items for which the Company has elected the FVO, were determined as described below. These estimated fair values and their corresponding placement in the fair value hierarchy are summarized as
<table><tr><td></td><td colspan="4"> December 31, 2011</td></tr><tr><td></td><td colspan="3"> Fair Value Measurements at Reporting Date Using</td><td></td></tr><tr><td></td><td> Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)</td><td> Significant Other Observable Inputs (Level 2)</td><td> Significant Unobservable Inputs (Level 3)</td><td> Total Estimated Fair Value</td></tr><tr><td></td><td colspan="4"> (In millions)</td></tr><tr><td> Assets</td><td></td><td></td><td></td><td></td></tr><tr><td>Fixed maturity securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. corporate securities</td><td>$—</td><td>$99,001</td><td>$6,784</td><td>$105,785</td></tr><tr><td>Foreign corporate securities</td><td>—</td><td>59,648</td><td>4,370</td><td>64,018</td></tr><tr><td>Foreign government securities</td><td>76</td><td>50,138</td><td>2,322</td><td>52,536</td></tr><tr><td>RMBS</td><td>—</td><td>41,035</td><td>1,602</td><td>42,637</td></tr><tr><td>U.S. Treasury and agency securities</td><td>19,911</td><td>20,070</td><td>31</td><td>40,012</td></tr><tr><td>CMBS</td><td>—</td><td>18,316</td><td>753</td><td>19,069</td></tr><tr><td>State and political subdivision securities</td><td>—</td><td>13,182</td><td>53</td><td>13,235</td></tr><tr><td>ABS</td><td>—</td><td>11,129</td><td>1,850</td><td>12,979</td></tr><tr><td>Other fixed maturity securities</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total fixed maturity securities</td><td>19,987</td><td>312,519</td><td>17,765</td><td>350,271</td></tr><tr><td>Equity securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Common stock</td><td>819</td><td>1,105</td><td>281</td><td>2,205</td></tr><tr><td>Non-redeemable preferred stock</td><td>—</td><td>380</td><td>438</td><td>818</td></tr><tr><td>Total equity securities</td><td>819</td><td>1,485</td><td>719</td><td>3,023</td></tr><tr><td>Trading and other securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Actively Traded Securities</td><td>—</td><td>473</td><td>—</td><td>473</td></tr><tr><td>FVO general account securities</td><td>—</td><td>244</td><td>23</td><td>267</td></tr><tr><td>FVO contractholder-directed unit-linked investments</td><td>7,572</td><td>8,453</td><td>1,386</td><td>17,411</td></tr><tr><td>FVO securities held by CSEs</td><td>—</td><td>117</td><td>—</td><td>117</td></tr><tr><td>Total trading and other securities</td><td>7,572</td><td>9,287</td><td>1,409</td><td>18,268</td></tr><tr><td>Short-term investments -1</td><td>8,150</td><td>8,120</td><td>590</td><td>16,860</td></tr><tr><td>Mortgage loans:</td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial mortgage loans held by CSEs</td><td>—</td><td>3,138</td><td>—</td><td>3,138</td></tr><tr><td>Mortgage loans held-for-sale: -2</td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage loans</td><td>—</td><td>2,836</td><td>228</td><td>3,064</td></tr><tr><td>Securitized reverse residential mortgage loans</td><td>—</td><td>6,466</td><td>1,186</td><td>7,652</td></tr><tr><td>Total mortgage loans held-for-sale</td><td>—</td><td>9,302</td><td>1,414</td><td>10,716</td></tr><tr><td>Total mortgage loans</td><td>—</td><td>12,440</td><td>1,414</td><td>13,854</td></tr><tr><td>Other invested assets:</td><td></td><td></td><td></td><td></td></tr><tr><td>MSRs</td><td>—</td><td>—</td><td>666</td><td>666</td></tr><tr><td>Other investments</td><td>312</td><td>124</td><td>—</td><td>436</td></tr><tr><td>Derivative assets: -3</td><td></td><td></td><td></td><td></td></tr><tr><td>Interest rate contracts</td><td>32</td><td>10,426</td><td>338</td><td>10,796</td></tr><tr><td>Foreign currency contracts</td><td>1</td><td>1,316</td><td>61</td><td>1,378</td></tr><tr><td>Credit contracts</td><td>—</td><td>301</td><td>29</td><td>330</td></tr><tr><td>Equity market contracts</td><td>29</td><td>2,703</td><td>964</td><td>3,696</td></tr><tr><td>Total derivative assets</td><td>62</td><td>14,746</td><td>1,392</td><td>16,200</td></tr><tr><td>Total other invested assets</td><td>374</td><td>14,870</td><td>2,058</td><td>17,302</td></tr><tr><td>Net embedded derivatives within asset host contracts -4</td><td>—</td><td>1</td><td>362</td><td>363</td></tr><tr><td>Separate account assets -5</td><td>28,191</td><td>173,507</td><td>1,325</td><td>203,023</td></tr><tr><td>Total assets</td><td>$65,093</td><td>$532,229</td><td>$25,642</td><td>$622,964</td></tr></table>
a yield curve used to measure the benefit obligation. The new method utilized a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows. The Company changed to the new method to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows and their corresponding spot rates. The change is accounted for as a change in accounting estimate which is applied prospectively. This change in estimate is not expected to have a material impact on the Company’s pension and postretirement net periodic benefit expense in future periods. Although the discount rate used for each plan will be established and applied individually, a weighted average discount rate of 3.0% will be used in calculating the fiscal 2018 net periodic benefit costs (income). The discount rate reflects the market rate for high-quality fixed-income investments on the Company’s annual measurement date of June 30 and is subject to change each fiscal year. The discount rate assumptions used to account for pension and other postretirement benefit plans reflect the rates at which the benefit obligations could be effectively settled. The rate was determined by matching the Company’s expected benefit payments for the plans to a hypothetical yield curve developed using a portfolio of several hundred high-quality non-callable corporate bonds. The weighted average discount rate is volatile from year to year because it is determined based upon the prevailing rates in the U. S. , the U. K. , Australia and other foreign countries as of the measurement date. The key assumptions used in developing the Company’s fiscal 2017, 2016 and 2015 net periodic benefit costs (income) for its plans consist of the following:
<table><tr><td></td><td>2017</td><td>2016</td><td> 2015</td></tr><tr><td></td><td colspan="3"> (in millions, except %)</td></tr><tr><td>Weighted average assumptions used to determine net periodic benefit costs (income)</td><td></td><td></td><td></td></tr><tr><td>Discount rate for PBO</td><td>3.1%</td><td>3.9%</td><td>4.2%</td></tr><tr><td>Discount rate for Service Cost</td><td>3.1%</td><td>3.9%</td><td>4.2%</td></tr><tr><td>Discount rate for Interest on PBO</td><td>2.6%</td><td>3.9%</td><td>4.2%</td></tr><tr><td>Discount rate for Interest on Service Cost</td><td>2.9%</td><td>3.9%</td><td>4.2%</td></tr><tr><td>Assets:</td><td></td><td></td><td></td></tr><tr><td>Expected rate of return</td><td>5.7%</td><td>5.7%</td><td>6.3%</td></tr><tr><td>Expected return</td><td>$75</td><td>$81</td><td>$93</td></tr><tr><td>Actual return</td><td>$106</td><td>$121</td><td>$96</td></tr><tr><td>Gain/(Loss)</td><td>$31</td><td>$40</td><td>$3</td></tr><tr><td>One year actual return</td><td>8.2%</td><td>9.4%</td><td>7.2%</td></tr><tr><td>Five year actual return</td><td>8.8%</td><td>7.7%</td><td>8.6%</td></tr></table>
The Company will use a weighted average long-term rate of return of 5.1% for fiscal 2018 based principally on a combination of current asset mix and an expectation of future long term investment returns. The accumulated net pre-tax losses on the Company’s pension plans as of June 30, 2017 were approximately $595 million which decreased from approximately $610 million for the Company’s pension plans as of June 30, 2016. This decrease of $15 million was primarily due to favorable asset returns. Lower discount rates increase present values of benefit obligations and increase the Company’s deferred losses and also increase subsequent-year benefit costs. Higher discount rates decrease the present values of benefit obligations and reduce the Company’s accumulated net loss and also decrease subsequent-year benefit costs. These deferred losses are being systematically recognized in future net periodic benefit costs (income) in accordance with ASC 715, “Compensation— Retirement Benefits. ” Unrecognized losses for the primary plans in excess of 10% of the greater of the marketrelated value of plan assets or the plan’s projected benefit obligation are recognized over the average life expectancy for plan participants for the primary plans. The Company made contributions of $26 million, $26 million and $9 million to its funded pension plans in fiscal 2017, 2016 and 2015, respectively. Future plan contributions are dependent upon actual plan asset returns, statutory requirements and interest rate movements. Assuming that actual plan returns are consistent with the On April 25, 2013 Delphi granted 37,674 RSUs to the Board of Directors at a grant date fair value of approximately $2 million. The grant date fair value was determined based on the closing price of the Company's ordinary shares on April 25, 2013. The RSUs vested on April 2, 2014, the day before the 2014 annual meeting of shareholders. On April 3, 2014, Delphi granted 24,144 RSUs to the Board of Directors at a grant date fair value of approximately $2 million. The grant date fair value was determined based on the closing price of the Company's ordinary shares on April 3, 2014. The RSUs will vest on April 22, 2015, the day before the 2015 annual meeting of shareholders. In February 2012, Delphi granted approximately 1.88 million RSUs to its executives. These awards include a time-based vesting portion and a performance-based vesting portion. The time-based RSUs, which make up 25% of the awards for Delphi’s officers and 50% for Delphi’s other executives, will vest ratably over three years beginning on the first anniversary of the grant date. The performance-based RSUs, which make up 75% of the awards for Delphi’s officers and 50% for Delphi’s other executives, vested at the completion of a three-year performance period at the end of 2014. In February 2013, under the time-based vesting terms of the 2012 grant, 218,070 ordinary shares were issued to Delphi executives at a fair value of $9 million, of which 78,692 ordinary shares were withheld to cover withholding taxes. In February 2013, Delphi granted approximately 1.45 million RSUs to its executives. These awards include time and performance-based components and vesting terms similar to the 2012 awards described above, as well as continuity awards. The time-based RSUs will vest ratably over three years beginning on the first anniversary of the grant date and the performance-based RSUs will vest at the completion of a three-year performance period at the end of 2015 if certain targets are met. In February 2014, under the time-based vesting terms of the 2012 and 2013 grants, 365,930 ordinary shares were issued to Delphi executives at a fair value of $23 million, of which 131,913 ordinary shares were withheld to cover minimum withholding taxes. In February 2014, Delphi granted approximately 0.8 million RSUs to its executives. These awards include time and performance-based components and vesting terms similar to the 2013 awards described above. The time-based RSUs will vest ratably over three years beginning on the first anniversary of the grant date and the performance-based RSUs will vest at the completion of a three-year performance period at the end of 2016 if certain targets are met. Any new executives hired after the annual executive RSU grant date may be eligible to participate in the PLC LTIP. Any off cycle grants made for new hires will be valued at their grant date fair value based on the closing price of the Company's ordinary shares on the date of such grant. Each executive will receive between 0% and 200% of his or her target performance-based award based on the Company’s performance against established company-wide performance metrics, which are:
<table><tr><td>Metric</td><td>2014 Grant</td><td>2013 Grant</td><td>2012 Grant</td></tr><tr><td>Average return on net assets -1</td><td>50%</td><td>50%</td><td>50%</td></tr><tr><td>Cumulative net income</td><td>N/A</td><td>N/A</td><td>30%</td></tr><tr><td>Cumulative earnings per share -2</td><td>30%</td><td>30%</td><td>N/A</td></tr><tr><td>Relative total shareholder return -3</td><td>20%</td><td>20%</td><td>20%</td></tr></table>
(1) Average return on net assets is measured by tax-affected operating income divided by average net working capital plus average net property, plant and equipment for each calendar year during the respective performance period. (2) Cumulative earnings per share is measured by net income attributable to Delphi divided by the weighted average number of diluted shares outstanding for the respective three-year performance period. (3) Relative total shareholder return is measured by comparing the average closing price per share of the Company’s ordinary shares for all available trading days in the fourth quarter of the end of the performance period to the average closing price per share of the Company’s ordinary shares for all available trading days in the fourth quarter of the year preceding the grant, including dividends, and assessed against a comparable measure of competitor and peer group companies. The grant date fair value of the RSUs was determined based on the closing price of the Company’s ordinary shares on the date of the grant of the award, including an estimate for forfeitures, and a contemporaneous valuation performed by an independent valuation specialist with respect to the relative total shareholder return awards. Based on the target number of awards issued for the February 2014, 2013 and 2012 grants, the fair value at grant date was estimated to be approximately $53 million, $60 million and $59 million, respectively. Each pension plan is overseen by a local committee or board that is responsible for the overall administration and investment of the pension plans. In determining investment policies, strategies and goals, each committee or board considers factors including, local pension rules and regulations; local tax regulations; availability of investment vehicles (separate accounts, commingled accounts, insurance funds, etc. ); funded status of the plans; ratio of actives to retirees; duration of liabilities; and other relevant factors including: diversification, liquidity of local markets and liquidity of base currency. A majority of the Company’s pension funds are open to new entrants and are expected to be on-going plans. Permitted investments are primarily liquid and/or listed, with little reliance on illiquid and non-traditional investments such as hedge funds. The Company’s retirement plan asset allocation at the end of 2018 and 2017 and target allocations for 2019 are as follows:
<table><tr><td></td><td colspan="2">Percent ofPlan Assets</td><td rowspan="2">TargetAllocation 2019</td></tr><tr><td></td><td>2018</td><td>2017</td></tr><tr><td>Worldwide Retirement Plans</td><td></td><td></td><td></td></tr><tr><td>Equity securities</td><td>71%</td><td>76%</td><td>70%</td></tr><tr><td>Debt securities</td><td>29</td><td>24</td><td>30</td></tr><tr><td>Total plan assets</td><td>100%</td><td>100%</td><td>100%</td></tr></table>
Determination of Fair Value of Plan Assets The Plan has an established and well-documented process for determining fair values. Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon models that primarily use, as inputs, market-based or independently sourced market parameters, including yield curves, interest rates, volatilities, equity or debt prices, foreign exchange rates and credit curves. While the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Valuation Hierarchy The authoritative literature establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels within the hierarchy are described in the table below with Level 1 having the highest priority and Level 3 having the lowest. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for the investments measured at fair value. ? Short-term investment funds — Cash and quoted short-term instruments are valued at the closing price or the amount held on deposit by the custodian bank. Other investments are through investment vehicles valued using the Net Asset Value (NAV) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in a market that is not active and classified as Level 2. ? Government and agency securities — A limited number of these investments are valued at the closing price reported on the major market on which the individual securities are traded. Where quoted prices are available in an active market, the investments are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. When quoted market prices for a security are not available in an active market, they are classified as Level 2. ? Debt instruments — A limited number of these investments are valued at the closing price reported on the major market on which the individual securities are traded. Where quoted prices are available in an active market, the investments are classified as Level 1. If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows and are classified as Level 2. Level 3 debt instruments are priced based on unobservable inputs. ? Equity securities — Equity securities are valued at the closing price reported on the major market on which the individual securities are traded. Substantially all common stock is classified within Level 1 of the valuation hierarchy. ? Commingled funds — These investment vehicles are valued using the NAV provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. Assets in the Level 2 category have a quoted market price. PUBLIC STORAGE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2009 F-26 of our common shares. Through December 31, 2009, we have repurchased a total of 23,721,916 of our common shares pursuant to this authorization. At December 31, 2009 and 2008, we had 4,244,022 and 3,027,544 of common shares reserved in connection with our share-based incentive plans, respectively, (see Note 10) and 231,978 shares reserved for the conversion of Convertible Partnership Units, respectively. Equity Shares, Series AAA In November 1999, we sold $100,000,000 (4,289,544 shares) of Equity Shares, Series AAA (“Equity Shares AAA”) to a newly formed joint venture. The Equity Shares AAA ranks on a parity with common shares and junior to the Senior Preferred Shares with respect to general preference rights, and has a liquidation amount equal to 120% of the amount distributed to each common share. Annual distributions per share are equal to the lesser of (i) five times the amount paid per common share or (ii) $2.1564. We have no obligation to pay distributions if no distributions are paid to common shareholders. During the years ended December 31, 2009, 2008 and 2007, we paid quarterly distributions to the holder of the Equity Shares, Series AAA of $0.5391 per share for each of the quarters ended March 31, June 30, September 30 and December 31. For all periods presented, the Equity Shares, Series AAA and related dividends are eliminated in consolidation as the shares are held by a Subsidiary. Dividends The unaudited characterization of dividends for Federal income tax purposes is made based upon earnings and profits of the Company, as defined by the Internal Revenue Code. Common share dividends including amounts paid to our restricted share unitholders totaled $371.7 million ($2.20 per share), $472.8 million ($2.80 per share) and $340.0 million ($2.00 per share), for the years ended December 31, 2009, 2008 and 2007, respectively. Equity Shares, Series A dividends totaled $20.5 million ($2.45 per share), $21.2 million ($2.45 per share) and $21.4 million ($2.45 per share), for the years ended December 31, 2009, 2008 and 2007, respectively. Preferred share dividends pay fixed rates from 6.125% to 7.500% with a total liquidation amount of $3,399,777,000 at December 31, 2009 ($3,424,327,000 at December 31, 2008) and dividends aggregating $232.4 million, $239.7 million and $236.8 million for the years ended December 31, 2009, 2008 and 2007, respectively. For the tax year ended December 31, 2009, distributions for the common shares, Equity Shares, Series A, and all the various series of preferred shares were classified as follows:
<table><tr><td></td><td colspan="4">2009 (unaudited)</td></tr><tr><td></td><td>1 st Quarter</td><td>2 nd Quarter</td><td>3 rd Quarter</td><td>4thQuarter</td></tr><tr><td>Ordinary Income</td><td>100.00%</td><td>100.00%</td><td>98.57%</td><td>100.00%</td></tr><tr><td>Long-Term Capital Gain</td><td>0.00%</td><td>0.00%</td><td>1.43%</td><td>0.00%</td></tr><tr><td>Total</td><td>100.00%</td><td>100.00%</td><td>100.00%</td><td>100.00%</td></tr></table>
9. Related Party Transactions Mr. Hughes, Public Storage’s Chairman of the Board of Trustees, and his family (collectively the “Hughes Family”) have ownership interests in, and operate approximately 52 self-storage facilities in Canada using the “Public Storage” brand name (“PS Canada”) pursuant to a royalty-free trademark license agreement with Public Storage. We currently do not own any interests in these facilities nor do we own any facilities in Canada. The Hughes Family owns approximately 17.3% of our common shares outstanding at December 31, 2009. We have a right of first refusal to acquire the stock or assets of the corporation that manages the 52 self-storage facilities in Canada, if the Hughes Family or the corporation agrees to sell them. However, we have no interest in the operations of this corporation, we have no right to acquire this stock or assets unless the Hughes Family decides to sell and we receive no benefit from the profits and increases in value of the Canadian self-storage facilities. Same Store Facilities The “Same Store Facilities” represents those 1,899 facilities that we have owned, and have been operated on a stabilized basis, since January 1, 2007 and therefore provide meaningful comparisons for 2007, 2008, and 2009. The following table summarizes the historical operating results of these 1,899 facilities (117.5 million net rentable square feet) that represent approximately 93% of the aggregate net rentable square feet of our U. S. consolidated selfstorage portfolio at December 31, 2009.
<table><tr><td>SAME STORE FACILITIES</td><td colspan="3">Year Ended December 31,</td><td colspan="3">Year Ended December 31,</td></tr><tr><td></td><td>2009</td><td>2008</td><td>Percentage Change</td><td>2008</td><td>2007</td><td>Percentage Change</td></tr><tr><td>Revenues:</td><td colspan="6">(Dollar amounts in thousands, except weighted average amounts)</td></tr><tr><td>Rental income</td><td>$1,324,747</td><td>$1,375,484</td><td>-3.7%</td><td>$1,375,484</td><td>$1,339,637</td><td>2.7%</td></tr><tr><td>Late charges and admin fees collected</td><td>64,768</td><td>60,146</td><td>7.7%</td><td>60,146</td><td>57,121</td><td>5.3%</td></tr><tr><td>Total revenues (a)</td><td>1,389,515</td><td>1,435,630</td><td>-3.2%</td><td>1,435,630</td><td>1,396,758</td><td>2.8%</td></tr><tr><td>Cost of operations:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Property taxes</td><td>139,776</td><td>135,825</td><td>2.9%</td><td>135,825</td><td>132,411</td><td>2.6%</td></tr><tr><td>Direct property payroll</td><td>94,262</td><td>94,303</td><td>0.0%</td><td>94,303</td><td>93,152</td><td>1.2%</td></tr><tr><td>Media advertising</td><td>19,795</td><td>19,853</td><td>-0.3%</td><td>19,853</td><td>20,917</td><td>-5.1%</td></tr><tr><td>Other advertising and promotion</td><td>20,079</td><td>18,235</td><td>10.1%</td><td>18,235</td><td>18,778</td><td>-2.9%</td></tr><tr><td>Utilities</td><td>34,636</td><td>36,411</td><td>-4.9%</td><td>36,411</td><td>35,094</td><td>3.8%</td></tr><tr><td>Repairs and maintenance</td><td>38,356</td><td>42,696</td><td>-10.2%</td><td>42,696</td><td>43,332</td><td>-1.5%</td></tr><tr><td>Telephone reservation center</td><td>11,040</td><td>12,580</td><td>-12.2%</td><td>12,580</td><td>12,642</td><td>-0.5%</td></tr><tr><td>Property insurance</td><td>9,761</td><td>11,391</td><td>-14.3%</td><td>11,391</td><td>13,498</td><td>-15.6%</td></tr><tr><td>Other cost of management</td><td>86,908</td><td>91,502</td><td>-5.0%</td><td>91,502</td><td>89,744</td><td>2.0%</td></tr><tr><td>Total cost of operations (a)</td><td>454,613</td><td>462,796</td><td>-1.8%</td><td>462,796</td><td>459,568</td><td>0.7%</td></tr><tr><td>Net operating income (b)</td><td>934,902</td><td>972,834</td><td>-3.9%</td><td>972,834</td><td>937,190</td><td>3.8%</td></tr><tr><td>Depreciation and amortization expense (c)</td><td>-301,647</td><td>-344,905</td><td>-12.5%</td><td>-344,905</td><td>-447,245</td><td>-22.9%</td></tr><tr><td>Net income</td><td>$633,255</td><td>$627,929</td><td>0.8%</td><td>$627,929</td><td>$489,945</td><td>28.2%</td></tr><tr><td>Gross margin (before depreciation and amortization expense)</td><td>67.3%</td><td>67.8%</td><td>-0.7%</td><td>67.8%</td><td>67.1%</td><td>1.0%</td></tr><tr><td>Weighted average for the period:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Square foot occupancy (d)</td><td>88.7%</td><td>89.5%</td><td>-0.9%</td><td>89.5%</td><td>89.3%</td><td>0.2%</td></tr><tr><td>Realized annual rent per occupied square foot (e)(f)</td><td>$12.71</td><td>$13.08</td><td>-2.8%</td><td>$13.08</td><td>$12.77</td><td>2.4%</td></tr><tr><td>REVPAF (f)(g)</td><td>$11.28</td><td>$11.71</td><td>-3.7%</td><td>$11.71</td><td>$11.40</td><td>2.7%</td></tr><tr><td>Weighted average at December 31:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Square foot occupancy</td><td>87.1%</td><td>87.1%</td><td>-</td><td>87.1%</td><td>87.9%</td><td>-0.9%</td></tr><tr><td>In place annual rent per occupied square foot (h)</td><td>$13.46</td><td>$14.02</td><td>-4.0%</td><td>$14.02</td><td>$13.89</td><td>0.9%</td></tr><tr><td>Total net rentable square feet (in thousands)</td><td>117,462</td><td>117,462</td><td>-</td><td>117,462</td><td>117,462</td><td>-</td></tr><tr><td>Number of facilities</td><td>1,899</td><td>1,899</td><td>-</td><td>1,899</td><td>1,899</td><td>-</td></tr></table>
(a) Revenues and cost of operations do not include ancillary revenues and expenses generated at the facilities with respect to tenant reinsurance, retail sales and truck rentals. “Other costs of management” included in cost of operations principally represents all the indirect costs incurred in the operations of the facilities. Indirect costs principally include supervisory costs and corporate overhead cost incurred to support the operating activities of the facilities. (b) See “Net Operating Income” above. (c) Depreciation and amortization expense for the years ended December 31, 2009 and 2008 decreased, as compared to the year prior, primarily due to a reduction in amortization expense related to intangible assets that we obtained in the Shurgard Merger. (d) Square foot occupancies represent weighted average occupancy levels over the entire period. (e) Realized annual rent per occupied square foot is computed by annualizing the result of dividing rental income (which excludes late charges and administrative fees) by the weighted average occupied square feet for the period. Realized |
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