expenditures acquisitions of leased properties funded by original contributor no change in ownership interest result from contributions.
 excess of ashland funded improvements over marathon funded improvements results in net gain excess marathon funded improvements over ashland improvements results in net loss.
 cost of revenues increased by $ 8. 718 billion in 2003 from 2002 $ 367 million in 2002 from 2001.
 increases in oerb segment result of higher natural gas liquid hydrocarbon costs.
 increases in rm&t segment reflected higher acquisition costs for crude oil refined products refinery charge blend feedstocks increased manufacturing expenses.
 selling  general administrative expenses increased by $ 107 million in 2003 from 2002 $ 125 million in 2002 from 2001.
 increase in 2003 result of increased employee benefits increased pension expense changes in actuarial assumptions decrease in realized returns on plan assets ) other employee related costs.
 marathon changed assumptions in health care cost trend rate from 7. 5%. to 10% ( 10 % ) in higher retiree health care costs.
 during 2003 marathon recorded charge of $ 24 million related to organizational business process changes.
 increase in 2002 reflected increased employee related costs.
 inventory market valuation reserve established to reduce cost basis of inventories to current market value.
 2002 results of operations include credits to income from operations of $ 71 million reversing imv reserve at december 31 , 2001.
 for additional information adjustment see 201cmanagement 2019s discussion analysis of critical accounting estimates 2013 net realizable value of inventories 201d page 31.
 net interest other financial costs decreased by $ 82 million in 2003 from 2002 increase of $ 96 million in 2002 from 2001.
decrease in 2003 due to increase in capitalized interest to increased long-term construction projects favorable effect of interest rate swaps favorable effect interest on tax deficiencies increased interest income on investments.
 increase in 2002 due to higher average debt levels from acquisitions separation.
 included in net interest financing costs are foreign currency gains of $ 13 million and $ 8 million for 2003 and 2002 losses of $ 5 million for 2001.
 loss from early extinguishment of debt in 2002 attributable to retirement of $ 337 million aggregate principal debt in loss of $ 53 million.
 result of adoption of financial accounting standards no.
 145 201crescission of fasb statements no.
 4 , 44  64  amendment of fasb statement no.
 13  technical corrections 201d (.
 loss from early extinguishment of debt previously reported as extraordinary item ( net of taxes $ 20 million ) reclassified into income before income taxes.
 adoption of sfas no.
 145 no impact on net income for 2002.
 minority interest in income of map  ashland 2019s 38 percent ownership interest increased by $ 129 million in 2003 from 2002 following decrease of $ 531 million in 2002 from 2001.
 map income higher in 2003 compared to 2002 rm&t segment.
 map income significantly lower in 2002 compared to 2001.
 provision for income taxes increased by $ 215 million in 2003 from 2002  following decrease of $ 458 million in 2002 from 2001 due to $ 720 million increase $ 1. 356 billion decrease in income before income taxes.
 effective tax rate for 2003 was 36. 6% ( 36. 6 % ) compared to 42. 1% (. 1 % ) and 37. 1% (. 1 % ) for 2002 and 2001.
higher rate in 2002 due to united kingdom enactment of supplementary 10 percent tax on profits from north sea oil and gas production retroactively effective to april 17, 2002.
 in 2002  marathon recognized one-time noncash deferred tax adjustment of $ 61 million result of rate increase.
 analysis of effective tax rate for periods presented:.
 a ) deferred tax effect related to enactment of supplemental tax in u. k.
 increased effective tax rate 7. 0 percent in 2002.

| 2003             | 2002             | 2001
------------------------------------------------------------- | ---------------- | ---------------- | ----------------
statutory tax rate                                            | 35.0% ( 35.0 % ) | 35.0% ( 35.0 % ) | 35.0% ( 35.0 % )
effects of foreign operations ( a )                           | -0.4 ( 0.4 )     | 5.6              | -0.7 ( 0.7 )
state and local income taxes after federal income tax effects | 2.2              | 3.9              | 3.0
other federal tax effects                                     | -0.2 ( 0.2 )     | -2.4 ( 2.4 )     | -0.2 ( 0.2 )
effective tax rate                                            | 36.6% ( 36.6 % ) | 42.1% ( 42.1 % ) | 37.1% ( 37.1 % )


17.
 leases we lease certain locomotives  freight cars  other property.
 consolidated statements of financial position as of december 31 , 2017  and 2016 included $ 1635 million , net of $ 953 million of accumulated depreciation  and $ 1997 million , net of $ 1121 million of accumulated depreciation  for properties under capital leases.
 charge to income from depreciation for assets capital leases included within depreciation expense in consolidated statements of income.
 future minimum lease payments for operating and capital leases with initial remaining non-cancelable lease terms in excess of one year as of december 31, 2017 , were : millions operating leases capital leases.
 approximately 97% ( 97 % ) of capital lease payments relate to locomotives.
 rent expense for operating leases with terms exceeding one month was $ 480 million in 2017  $ 535 million in 2016  $ 590 million in 2015.
 when cash rental payments not made straight-line basis recognize variable rental expense on straight-line basis over lease term.
 contingent rentals and sub-rentals not significant.
 18.
 commitments contingencies asserted and unasserted claims 2013 various claims lawsuits pending against us and subsidiaries.
 cannot fully determine effect of all asserted unasserted claims on consolidated results of operations  financial condition liquidity.
 recorded liability where asserted claims considered probable claims reasonably estimated.
 do not expect any known lawsuits , claims environmental costs commitments contingent liabilities  guarantees will material adverse effect on consolidated results of operations  financial condition liquidity after taking account liabilities insurance recoveries previously recorded for.
personal injury 2013 cost of personal injuries to employees others related to activities charged to expense based on estimates of ultimate cost and number of incidents each year.
 use actuarial analysis to measure expense and liability including unasserted claims.
 federal employers 2019 liability act ( fela ) governs compensation for work-related accidents.
 under fela damages assessed based on finding of fault through litigation or out-of-court settlements.
 offer comprehensive services and rehabilitation programs for employees injured at work.
 personal injury liability not discounted to present value due to uncertainty surrounding timing of future payments.
 approximately 95% ( 95 % ) of recorded liability related to asserted claims approximately 5% ( 5 % ) related to unasserted claims at december 31 , 2017.
 uncertainty surrounding ultimate outcome of personal injury claims possible future costs to settle claims may range from approximately $ 285 million to $ 310 million.
 record accrual at low end of range no loss within range more probable.
 estimates can vary over time due to evolving trends in litigation.

millions                                | operatingleases | capitalleases
--------------------------------------- | --------------- | -------------
2018                                    | $ 398           | $ 173
2019                                    | 359             | 156
2020                                    | 297             | 164
2021                                    | 259             | 168
2022                                    | 221             | 147
later years                             | 1115            | 271
total minimum lease payments            | $ 2649          | $ 1079
amount representing interest            | n/a             | -187 ( 187 )
present value of minimum lease payments | n/a             | $ 892


notes to consolidated financial statements investments in funds calculate net asset value per share cash instruments at fair value include investments in funds valued based on net asset value per share ( nav ) of investment fund.
 firm uses nav as measure of fair value for fund investments when fund investment not readily determinable fair value and nav investment fund is calculated consistent with measurement principles of investment company accounting including measurement of underlying investments at fair value.
 firm 2019s investments in funds calculate nav primarily consist of investments in firm-sponsored funds where firm co-invests with third-party investors.
 private equity , credit and real estate funds are primarily closed-end funds firm 2019s investments not eligible for redemption.
 distributions will be received from these funds as underlying assets are liquidated estimated substantially all underlying assets of existing funds will be liquidated over next seven years.
 firm continues to manage existing funds transition periods under volcker rule of.
 dodd-frank wall street reform and consumer protection act ( dodd-frank act ) rules not yet finalized.
 firm 2019s investments in hedge funds are generally redeemable on quarterly basis with 91 days 2019 notice subject to maximum redemption level of 25% ( 25 % ) of firm 2019s initial investments at any quarter-end.
 firm plans to comply with volcker rule by redeeming certain interests in hedge funds.
 firm redeemed approximately $ 1. 06 billion of these interests in hedge funds during year ended december 2012.
 table below presents fair value of firm 2019s investments in  and unfunded commitments to  funds that calculate nav.
.
funds invest in broad industries worldwide variety situations including leveraged buyouts recapitalizations growth investments.
 2.
 funds generally invest in loans fixed income instruments focused on providing private high-yield capital for mid- to large-sized leveraged management buyout transactions  recapitalizations financings refinancings  acquisitions restructurings for private equity firms private family companies corporate issuers.
 3.
 funds are primarily multi-disciplinary hedge funds employ fundamental bottom-up investment approach across various asset classes strategies including long/short equity  credit  convertibles  risk arbitrage  special situations capital structure arbitrage.
 4.
 funds invest globally primarily in real estate companies loan portfolios debt recapitalizations direct property.
 goldman sachs 2012 annual report 127

in millions           | as of december 2012 fair value of investments | as of december 2012 unfunded commitments | as of december 2012 fair value of investments | unfunded commitments
--------------------- | --------------------------------------------- | ---------------------------------------- | --------------------------------------------- | --------------------
private equity funds1 | $ 7680                                        | $ 2778                                   | $ 8074                                        | $ 3514
credit funds2         | 3927                                          | 2843                                     | 3596                                          | 3568
hedge funds3          | 2167                                          | 2014                                     | 3165                                          | 2014
real estatefunds4     | 2006                                          | 870                                      | 1531                                          | 1613
total                 | $ 15780                                       | $ 6491                                   | $ 16366                                       | $ 8695


35% ( 35 % ) due to undistributed foreign earnings for which no u. s.
 taxes provided because earnings intended to be indefinitely reinvested outside the u. s.
 as of september 29 , 2012  company had deferred tax assets from deductible temporary differences , tax losses  tax credits of $ 4. 0 billion , deferred tax liabilities of $ 14. 9 billion.
 management believes likely not forecasted income , including income result of tax planning strategies, future reversals of existing taxable temporary differences, will be sufficient to fully recover deferred tax assets.
 company will continue to evaluate realizability of deferred tax assets quarterly by assessing need for amount valuation allowance.
 internal revenue service ( 201cirs 201d ) completed field audit of company 2019s federal income tax returns for years 2004 through 2006 proposed adjustments.
 company contested certain these adjustments through irs appeals office.
 irs currently examining years 2007 through 2009.
 all irs audit issues for years prior to 2004 resolved.
 company subject to audits by state , local , and foreign tax authorities.
 management believes adequate provisions made for adjustments from tax examinations.
 outcome of tax audits cannot be predicted with certainty.
 if issues addressed in company 2019s tax audits resolved not consistent with management expectations company could be required to adjust provision for income taxes in period such resolution occurs.
 liquidity and capital resources following table presents selected financial information and statistics as of for years ended september 29 , 2012 , september 24 , 2011 , and september 25 , 2010 ( in millions ) :.
 as of september 29 , 2012 , company had $ 121. 3 billion in cash , cash equivalents and marketable securities , an increase of $ 39.7 billion or 49% ( 49 % ) from september 24 , 2011.
 principal net increase was cash generated by operating activities of $ 50. 9 billion  partially offset by payments for acquisition of property  plant equipment of $ 8. 3 billion  payments for acquisition of intangible assets $ 1. 1 billion payments dividends dividend equivalent rights of $ 2. 5 billion.
 company 2019s marketable securities investment portfolio invested primarily in highly-rated securities investment policy limits credit exposure to one issuer.
 policy requires investments be investment grade objective minimizing potential risk of principal loss.
 as of september 29, 2012 and september 24 , 2011 , $ 82. 6 billion and $ 54. 3 billion  respectively of company 2019s cash  cash equivalents marketable securities held by foreign subsidiaries generally based in u. s.
 dollar-denominated holdings.
 amounts held by foreign subsidiaries subject to u. s.
 income taxation on repatriation u.
 company believes existing balances of cash  cash equivalents marketable securities sufficient to satisfy working capital needs capital asset purchases  outstanding commitments common stock repurchases dividends common stock other liquidity requirements existing operations over next 12 months.
 capital assets company 2019s capital expenditures were $ 10. 3 billion during 2012  $ 865 million for retail store facilities $ 9. 5 billion for other capital expenditures including product tooling and manufacturing process

| 2012     | 2011    | 2010
----------------------------------------------- | -------- | ------- | -------
cash cash equivalents and marketable securities | $ 121251 | $ 81570 | $ 51011
accounts receivable net                         | $ 10930  | $ 5369  | $ 5510
inventories                                     | $ 791    | $ 776   | $ 1051
working capital                                 | $ 19111  | $ 17018 | $ 20956
annual operating cash flow                      | $ 50856  | $ 37529 | $ 18595


packaging corporation of america notes to consolidated financial statements continued ) december 31 , 2005 9.
 shareholders 2019 equity continued ) stockholder received proceeds net of underwriting discount of $ 20. 69 per share.
 company sell shares in or receive proceeds from secondary offering.
 concurrent closing secondary offering december 21 , 2005 company entered common stock repurchase agreement with pca holdings llc.
 company purchased 4500000 shares of common stock from pca holdings llc at initial price public net of underwriting discount or $ 20. 69 per share  same net price per share received by pca holdings llc in secondary offering.
 shares retired on december 21 , 2005.
 10.
 commitments contingencies capital commitments company had authorized capital expenditures of approximately $ 33. 1 million and $ 55. 2 million as of december 31 , 2005 and 2004  connection expansion replacement of existing facilities and equipment.
 operating leases pca leases space for facilities cutting rights to approximately 108000 acres of timberland under long-term leases.
 company also leases equipment  primarily vehicles and rolling stock other assets under long-term leases duration generally three years.
 minimum lease payments under non-cancelable operating leases with lease terms excess of one year : ( in thousands ).
 capital lease obligations not significant to financial statements.
 total lease expense  including base rent on all leases and executory costs  insurance , taxes  maintenance  for years ended december 31 , 2005 , 2004 and 2003 was $ 35. 8 million , $ 33. 0 million and $ 31. 6 million  respectively.
 costs included in cost of goods sold and selling and administrative expenses.

2006       | $ 24569
---------- | --------
2007       | 21086
2008       | 14716
2009       | 9801
2010       | 6670
thereafter | 37130
total      | $ 113972


operating financial activities 2012 include : 2022 net proved reserve additions for e&p and osm segments 389 mmboe 226 percent reserve replacement 2022 increased liquid hydrocarbon synthetic crude oil reserves by 316 mmbbls reserve replacement of 268 percent for these commodities 2022 recorded than 95 percent average operational availability for operated e&p assets increased e&p net sales volumes excluding libya by 8 percent 2022 eagle ford shale average net sales volumes 65 mboed for december 2012 fourfold increase over december 2011 2022 bakken shale average net sales volumes 29 mboed 71 percent increase over last year 2022 resumed sales from libya reached pre-conflict production levels 2022 international liquid hydrocarbon sales volumes average realizations exceeded wti 62 percent of net e&p liquid hydrocarbon sales 2022 closed $ 1 billion of acquisitions in core eagle ford shale assumed operatorship of vilje field offshore norway signed agreements for new exploration positions in e. g.  gabon kenya ethiopia issued $ 1 billion of 3-year senior notes at 0. 9 percent interest $ 1 billion of 10-year senior notes at 2. 8 percent interest significant 2013 activities through february 22 2013 include : 2022 closed sale of alaska assets in january 2013 closed sale of interest in neptune gas plant in february 2013 consolidated results operations : 2012 compared to 2011 consolidated income before income taxes 38 percent higher 2012 than income from continuing operations before taxes 2011 due to higher liquid hydrocarbon sales volumes in e&p segment offset by lower earnings from osm and ig segments.
 7 percent decrease in income from continuing operations included lower earnings in u. k.
 e. g. offset by higher earnings in libya.
 in 2011 not in excess foreign tax credit position entire year as in 2012.
effective income tax rate for continuing operations 74 percent in 2012 compared to 61 percent 2011.
 revenues summarized in table:.
 e&p segment revenues increased $ 1055 million from 2011 to 2012 primarily due to higher average liquid hydrocarbon sales volumes.
 e&p segment revenues included net gain on crude oil derivative instruments $ 15 million in 2012 impact derivatives not significant in 2011.
 see item 8.
 financial statements supplementary data 2013 note 16 consolidated financial statement for information crude oil derivative instruments.
 included e&p segment supply optimization activities include purchase of commodities from third parties for resale.
 see cost of revenues discussion revenues from supply optimization approximate related costs.
 supply optimization aggregate volumes satisfy transportation commitments achieve flexibility within product

( in millions )                                     | 2012    | 2011
--------------------------------------------------- | ------- | ----------
e&p                                                 | $ 14084 | $ 13029
osm                                                 | 1552    | 1588
ig                                                  | 2014    | 93
segment revenues                                    | 15636   | 14710
elimination of intersegment revenues                | 2014    | -47 ( 47 )
unrealized gain on crude oil derivative instruments | 52      | 2014
total revenues                                      | $ 15688 | $ 14663


regulatory credit from reduction of federal corporate income tax rate variance due to reduction vidalia purchased power agreement regulatory liability by $ 30. 5 million and reduction of louisiana act 55 financing savings obligation regulatory liabilities by $ 25 million enactment of tax cuts and jobs act  in december 2017 lowered federal corporate income tax rate from 35% ( 35 % ) to 21% ( 21 % ).
 effects of tax cuts and jobs act discussed in note 3 to financial statements.
 grand gulf recovery variance due to increased recovery of higher operating costs.
 louisiana act 55 financing savings obligation variance results from regulatory charge in 2016 for tax savings shared with customers per agreement approved by lpsc.
 tax savings resulted from 2010-2011 irs audit settlement on treatment louisiana act 55 financing of storm costs for hurricane gustav and hurricane ike.
 see note 3 to financial statements for additional discussion of settlement benefit sharing.
 volume/weather variance due to effect of less favorable weather on residential and commercial sales offset by increase in industrial usage.
 increase in industrial usage due to new customers in primary metals industry expansion projects increase in demand for existing customers in chlor-alkali industry.
 entergy wholesale commodities analysis of change in net revenue comparing 2017 to 2016.
 amount ( in millions ).
 table net revenue for entergy wholesale commodities decreased by approximately $ 73 million in 2017 due to absence of net revenue from fitzpatrick plant after sold to exelon in march 2017 lower volume in entergy wholesale commodities nuclear fleet from more outage days in 2017 compared to 2016.
decrease partially offset by increase from reimbursement agreement with exelon exelon reimbursed entergy for specified out-of-pocket costs with preparing for refueling and operation of fitzpatrick otherwise would have avoided had entergy shut down fitzpatrick in january 2017 decrease in nuclear fuel expenses related to impairments of indian point 2  indian point 3  palisades plants related assets.
 revenues received from exelon in 2017 under reimbursement agreement offset by other operation and maintenance expenses taxes other than income taxes no effect on net income.
 see note 14 to financial statements for discussion of sale of fitzpatrick  reimbursement agreement with exelon  impairments related charges.
 entergy corporation and subsidiaries management 2019s financial discussion analysis

| amount ( in millions )
----------------------------------- | ----------------------
2016 net revenue                    | $ 1542
fitzpatrick sale                    | -158 ( 158 )
nuclear volume                      | -89 ( 89 )
fitzpatrick reimbursement agreement | 57
nuclear fuel expenses               | 108
other                               | 9
2017 net revenue                    | $ 1469


measurement point december 31 booking holdings nasdaq composite index s&p 500 rdg internet composite.
 sales of unregistered securities between october 1 , 2017 and december 31 , 2017  issued 103343 shares common stock connection with conversion of $ 196. 1 million principal amount 1. 0% ( 1. 0 % ) convertible senior notes due 2018.
 conversions effected accordance with indenture , provides principal amount converted notes paid in cash and conversion premium paid in cash and/or shares common stock at election.
 each case chose to pay conversion premium in shares common stock ( fractional shares paid in cash ).
 issuances shares not registered under securities act of 1933 , as amended ( "act" ) pursuant section 3 ( a ) ( 9 ) act.

measurement pointdecember 31 | booking holdings inc . | nasdaqcomposite index | s&p 500index | rdg internetcomposite
---------------------------- | ---------------------- | --------------------- | ------------ | ---------------------
2012                         | 100.00                 | 100.00                | 100.00       | 100.00
2013                         | 187.37                 | 141.63                | 132.39       | 163.02
2014                         | 183.79                 | 162.09                | 150.51       | 158.81
2015                         | 205.51                 | 173.33                | 152.59       | 224.05
2016                         | 236.31                 | 187.19                | 170.84       | 235.33
2017                         | 280.10                 | 242.29                | 208.14       | 338.52


maintain effective universal shelf registration allows for public offering and sale of debt securities  capital securities common stock depositary shares preferred stock  warrants to purchase securities including shares preferred stock depositary shares convertible  or any combination thereof.
 have issued past may issue future  securities pursuant to shelf registration.
 issuance of debt or equity securities depend on future market conditions funding needs other factors.
 additional information about debt equity securities issued pursuant to shelf registration provided in notes 9 and 12 to consolidated financial statements under item 8.
 maintain corporate commercial paper program can issue up to $ 3 billion with original maturities of up to 270 days from date of issue.
 at december 31 , 2011  had $ 2. 38 billion of commercial paper outstanding compared to $ 2. 80 billion at december 31 , 2010.
 additional information about corporate commercial paper program in note 8 to consolidated financial statements under item 8.
 state street bank had initial board authority to issue bank notes up to aggregate of $ 5 billion  including up to $ 1 billion of subordinated bank notes.
 approximately $ 2. 05 billion available under board authority as of december 31 , 2011.
 in 2011 , $ 2. 45 billion of senior notes  outstanding at december 31 , 2010  matured.
 state street bank maintains line of credit with financial institution of cad $ 800 million  or approximately $ 787 million as of december 31 , 2011 to support canadian securities processing operations.
 line of credit has no stated termination date cancelable by either party with prior notice.
 as of december 31 , 2011 no balance outstanding on line of credit.
 contractual cash obligations.
 long-term debt excludes capital lease obligations ( separate line item ) effect of interest-rate swaps.
interest payments calculated at stated rate exception of floating-rate debt for payments calculated using indexed rate in effect as of december 31 , 2011.
 obligations in table above recorded in consolidated statement of condition at december 31 , 2011 except for interest on long-term debt capital lease obligations.
 table not include obligations settled in cash  primarily in less than one year , such as deposits  federal funds purchased  securities sold under repurchase agreements other short-term borrowings.
 additional information about deposits  federal funds purchased securities sold under repurchase agreements other short-term borrowings in notes 7 and 8 to consolidated financial statements under item 8.
 table not include obligations related to derivative instruments amounts included in consolidated statement of condition at december 31 , 2011 related to derivatives not represent amounts ultimately be paid under contracts upon settlement.
 additional information about derivative contracts in note 16 to consolidated financial statements under item 8.
 obligations under pension post-retirement benefit plans  described in note 18 to consolidated financial statements included under item 8  not included in above table.
 additional information about contractual cash obligations related to long-term debt operating capital leases in notes 9 and 19 to consolidated financial statements under item 8.
 consolidated statement of cash flows , included under item 8  provides additional liquidity information.

as of december 31 2011 ( in millions ) | payments due by period total | payments due by period less than 1 year | payments due by period 1-3 years | payments due by period 4-5 years | payments due by period over 5 years
-------------------------------------- | ---------------------------- | --------------------------------------- | -------------------------------- | -------------------------------- | -----------------------------------
long-term debt ( 1 )                   | $ 9276                       | $ 1973                                  | $ 1169                           | $ 1944                           | $ 4190
operating leases                       | 1129                         | 237                                     | 389                              | 228                              | 275
capital lease obligations              | 989                          | 68                                      | 136                              | 138                              | 647
total contractual cash obligations     | $ 11394                      | $ 2278                                  | $ 1694                           | $ 2310                           | $ 5112


net change in total valuation allowance for years ended december 31 , 2018 and 2017 was increase of $ 12 million and increase $ 26 million  respectively.
 deferred income tax assets and liabilities recorded in consolidated balance sheet under captions deferred charges and other assets and deferred income taxes.
 decrease in deferred income tax assets principally relating to utilization of.
 federal alternative minimum tax credits under tax reform.
 deferred tax liabilities increased due to tax deferral of book gain on transfer of north american consumer packaging business to subsidiary of graphic packaging holding company.
 of $ 1. 5 billion of deferred tax liabilities for forestlands  related installment sales  investment in subsidiary  $ 884 million is attributable to investment in subsidiary 2006 international paper installment sale of forestlands and $ 538 million attributable to 2007 temple-inland installment sale of forestlands note 14.
 reconciliation of beginning and ending amount of unrecognized tax benefits for years ended december 31 , 2018 , 2017 and 2016 is.
 if company prevail on unrecognized tax benefits recorded all balances at december 31 , 2018, 2017 and 2016 would benefit effective tax rate.
 company accrues interest on unrecognized tax benefits as component of interest expense.
 penalties  if recognized as component of income tax expense.
 company had approximately $ 21 million and $ 17 million accrued for payment of estimated interest and penalties associated with unrecognized tax benefits at december 31 , 2018 and 2017.
 major jurisdictions where company files income tax returns are united states , brazil , france poland and russia.
 tax years 2006 through 2017 remain open and subject to examination by relevant tax authorities.
 company frequently faces challenges regarding amount taxes due.
challenges include positions taken by company related to timing nature amount of deductions allocation of income among various tax jurisdictions.
 pending audit settlements expiration of statute of limitations could reduce uncertain tax positions by $ 30 million during next twelve months.
 brazilian federal revenue service challenged deductibility of goodwill amortization generated in 2007 acquisition by international paper do brasil ltda., wholly-owned subsidiary of company.
 company received assessments for tax years 2007-2015 totaling approximately $ 150 million in tax  $ 380 million in interest and penalties as of december 31, 2018 ( adjusted for variation in currency exchange rates ).
 after previous favorable ruling challenging basis for assessments received unfavorable decision in october 2018 from brazilian administrative council of tax appeals.
 company intends to further appeal matter in brazilian federal courts in 2019 ; tax litigation matter may take years to resolve.
 company believes appropriately evaluated transaction underlying assessments concluded based on brazilian tax law its tax position would be sustained.
 company intends to defend position against current assessments similar assessments issued for tax years subsequent to 2015.
 international paper uses flow-through method to account for investment tax credits earned on eligible open-loop biomass facilities combined heat and power system expenditures.
 under method investment tax credits recognized as reduction to income tax expense in year they earned rather than reduction in asset basis.
 company recorded tax benefit of $ 6 million during 2018 tax benefit of $ 68 million during 2017 related to investment tax credits earned in tax years 2013-2017.

in millions                                                             | 2018           | 2017           | 2016
----------------------------------------------------------------------- | -------------- | -------------- | --------------
balance at january 1                                                    | $ -188 ( 188 ) | $ -98 ( 98 )   | $ -150 ( 150 )
( additions ) reductions based on tax positions related to current year | -7 ( 7 )       | -54 ( 54 )     | -4 ( 4 )
( additions ) for tax positions of prior years                          | -37 ( 37 )     | -40 ( 40 )     | -3 ( 3 )
reductions for tax positions of prior years                             | 5              | 4              | 33
settlements                                                             | 2              | 6              | 19
expiration of statutes oflimitations                                    | 2              | 1              | 5
currency translation adjustment                                         | 3              | -7 ( 7 )       | 2
balance at december 31                                                  | $ -220 ( 220 ) | $ -188 ( 188 ) | $ -98 ( 98 )


debt issuances in 2014 : ( millions ) type face value interest rate issuance maturity euro notes ) 20ac750 ( approximately $ 1029 ) 1. 875% ( 1. 875 % ) march 2014 march 2021 euro notes ) 20ac1000 ( approximately $ 1372 ) 2. 875% ( 2. 875 % ) march 2014 march 2026 euro notes b ) 20ac500 ( approximately $ 697 ) 2. 875% ( 2. 875 % ) may 2014 may 2029 swiss franc notes c ) chf275 ( approximately $ 311 ) 0. 750% ( 0. 750 % ) may 2014 december 2019 swiss franc notes b ) chf250 ( approximately $ 283 ) 1. 625% ( 1. 625 % ) may 2014 may 2024.
 dollar notes d ) $ 500 1. 250% ( 1. 250 % ) november 2014 november 2017.
 dollar notes d ) $ 750 3. 250% ( 3. 250 % ) november 2014 november 2024.
 dollar notes ) $ 750 4. 250% ( 4. 250 % ) november 2014 november 2044 interest on notes payable annually in arrears beginning march 2015.
 b ) interest payable annually arrears beginning may 2015.
 c ) interest notes payable annually arrears december 2014.
 ) interest payable semiannually arrears beginning may 2015.
.
 dollar equivalents for foreign currency notes calculated based on exchange rates on date of issuance.
 net proceeds from sale of securities used for general corporate purposes.
 weighted-average time to maturity of long-term debt 10. 8 years at end of 2013 and 2014.
 2022 off-balance sheet arrangements contractual obligations no off-balance sheet arrangements including special purpose entities other than guarantees contractual obligations discussed below.
 guarantees 2013 at december 31 , 2014 contingently liable for $ 1.0 billion guarantees performance primarily related to excise taxes on shipment products.
 no liability in consolidated financial statements guarantees.
 at december 31, 2014 third-party guarantees insignificant.
 debt issuances in 2014 : ( in millions ) type face value ( e ) interest rate issuance maturity euro notes a ) 20ac750 ( approximately $ 1029 ) 1. 875% ( 1. 875 % ) march 2014 march 2021 euro notes a ) 20ac1000 ( approximately $ 1372 ) 2. 875% ( 2. 875 % ) march 2014 march 2026 euro notes b ) 20ac500 ( approximately $ 697 ) 2. 875% ( 2. 875 % ) may 2014 may 2029 swiss franc notes c ) chf275 ( approximately $ 311 ) 0. 750% ( 0. 750 % ) may 2014 december 2019 swiss franc notes b ) chf250 ( approximately $ 283 ) 1. 625% ( 1. 625 % ) may 2014 may 2024 u.
 dollar notes d ) $ 500 1. 250% ( 1. 250 % ) november 2014 november 2017 u.
 dollar notes d ) $ 750 3. 250% ( 3. 250 % ) november 2014 november 2024 u.
 dollar notes d ) $ 750 4. 250% ( 4. 250 % ) november 2014 november 2044 interest notes payable annually arrears beginning march 2015.
 b ) interest payable annually arrears beginning may 2015.
 c ) interest notes payable annually arrears beginning december 2014.
 d ) interest notes payable semiannually arrears beginning may 2015.
 ).
 dollar equivalents for foreign currency notes calculated based on exchange rates on date issuance.
 net proceeds from sale securities used for general corporate purposes.
 weighted-average time to maturity long-term debt was 10. 8 years at end of 2013 and 2014.
2022 off-balance sheet arrangements aggregate contractual obligations no off-balance sheet arrangements including special purpose entities other than guarantees contractual obligations discussed below.
 guarantees 2013 at december 31 , 2014  contingently liable for $ 1. 0 billion guarantees our own performance primarily related to excise taxes on shipment products.
 no liability in consolidated financial statements associated with these guarantees.
 at december 31 , 2014  third-party guarantees insignificant.

type               |       | face value ( e )                  | interest rate      | issuance      | maturity
------------------ | ----- | --------------------------------- | ------------------ | ------------- | -------------
euro notes         | ( a ) | 20ac750 ( approximately $ 1029 )  | 1.875% ( 1.875 % ) | march 2014    | march 2021
euro notes         | ( a ) | 20ac1000 ( approximately $ 1372 ) | 2.875% ( 2.875 % ) | march 2014    | march 2026
euro notes         | ( b ) | 20ac500 ( approximately $ 697 )   | 2.875% ( 2.875 % ) | may 2014      | may 2029
swiss franc notes  | ( c ) | chf275 ( approximately $ 311 )    | 0.750% ( 0.750 % ) | may 2014      | december 2019
swiss franc notes  | ( b ) | chf250 ( approximately $ 283 )    | 1.625% ( 1.625 % ) | may 2014      | may 2024
u.s . dollar notes | ( d ) | $ 500                             | 1.250% ( 1.250 % ) | november 2014 | november 2017
u.s . dollar notes | ( d ) | $ 750                             | 3.250% ( 3.250 % ) | november 2014 | november 2024
u.s . dollar notes | ( d ) | $ 750                             | 4.250% ( 4.250 % ) | november 2014 | november 2044


entergy arkansas , inc.
 management's financial discussion analysis results of operations net income 2008 compared to 2007 net income decreased $ 92. 0 million due to higher other operation maintenance expenses  higher depreciation amortization expenses  higher effective income tax rate  partially offset by higher net revenue.
 higher other operation maintenance expenses resulted from write-off of approximately $ 70. 8 million of costs december 2008 arkansas court of appeals decision in entergy arkansas' base rate case.
 case discussed in in note 2 to financial statements.
 2007 compared to 2006 net income decreased $ 34. 0 million due to higher other operation maintenance expenses higher depreciation amortization expenses higher effective income tax rate.
 decrease partially offset by higher net revenue.
 net revenue 2008 compared to 2007 net revenue consists of operating revenues net of : 1 fuel , fuel-related expenses gas purchased for resale  2 ) purchased power expenses  3 ) other regulatory credits.
 analysis of change in net revenue comparing 2008 to 2007.
 amount ( in millions ).
 rider revenue variance due to energy efficiency rider effective in november 2007.
 establishment rider results in increase in rider revenue corresponding increase in other operation and maintenance expense no effect on net income.
 contributing to variance was increase in franchise tax rider revenue higher retail revenues.
 corresponding increase in taxes other than income taxes no effect on net income.
 purchased power capacity variance due to lower reserve equalization expenses.
 volume/weather variance due to effect of less favorable weather on residential and commercial sales during billed unbilled sales periods compared to 2007 2. 9% ( 2. 9 % ) volume decrease in industrial sales primarily in wood industry small customer class.
 billed electricity usage decreased 333 gwh in all sectors.
see "critical accounting estimates" below note 1 financial statements for further discussion accounting for unbilled revenues.

| amount ( in millions )
------------------------ | ----------------------
2007 net revenue         | $ 1110.6
rider revenue            | 13.6
purchased power capacity | 4.8
volume/weather           | -14.6 ( 14.6 )
other                    | 3.5
2008 net revenue         | $ 1117.9


item 1.
 business loews hotels holding corporation subsidiaries ( 201cloews hotels 201d ) wholly owned subsidiary operate 18 hotels.
 accounted for 2. 0% ( 2. 0 % ) , 2. 9% ( 2. 9 % ) 2. 7% ( 2. 7 % ) of consolidated total revenue for years ended december 31 , 2009  2008 2007.
 number name location rooms owned  leased managed loews annapolis hotel 220 owned annapolis , maryland loews coronado bay 440 land lease expiring 2034 san diego, california loews denver hotel 185 owned denver , colorado don cesar loews hotel 347 management contract ) st.
 pete beach , florida hard rock hotel , 650 management contract ) universal orlando , florida loews lake las vegas 493 management contract henderson , nevada loews le concorde hotel 405 land lease expiring 2069 quebec city, canada the madison  loews hotel 353 management contract expiring 2021 washington , d. c.
loews miami beach hotel 790 owned miami beach , florida loews new orleans hotel 285 management contract expiring 2018 new orleans , louisiana loews philadelphia hotel 585 owned philadelphia , pennsylvania loews portofino bay hotel , 750 management contract c ) at universal orlando orlando , florida loews regency hotel 350 land lease expiring 2013 renewal option new york, new york for 47 years loews royal pacific resort 1000 management contract ) at universal orlando orlando , florida loews santa monica beach hotel 340 management contract expiring 2018 santa monica, california renewal option for 5 years loews vanderbilt hotel 340 owned nashville, tennessee loews ventana canyon 400 management contract expiring 2019 tucson , arizona loews hotel vogue 140 owned montreal , canada management contracts subject to termination rights.
 loews hotels subsidiary 20% ( 20 % ) owner of hotel operated by loews hotels management contract.
 loews hotels subsidiary 50% ( 50 % ) owner of hotels at universal orlando theme park  joint venture with universal studios and rank group.
 hotels on land leased by joint venture operated by loews hotels management contract.
.
 loews hotels holding corporation subsidiaries of loews hotels holding corporation ( hotels 201d ) wholly owned subsidiary operate 18 hotels.
 loews hotels accounted for 2. 0% ( 2. 0 % ) , 2. 9% ( 2. 9 % ) and 2. 7% ( 2. 7 % ) of consolidated total revenue for years ended december 31 , 2009 , 2008 and 2007.
number name location rooms owned  leased managed loews annapolis hotel 220 owned annapolis , maryland coronado bay 440 land lease expiring 2034 san diego , california denver hotel 185 owned denver , colorado don cesar , loews hotel 347 management contract a ) ) st.
 pete beach , florida hard rock hotel , 650 management contract c ) at universal orlando orlando , florida loews lake las vegas 493 management contract henderson , nevada loews le concorde hotel 405 land lease expiring 2069 quebec city, canada the madison , loews hotel 353 management contract expiring 2021 washington , d. c.
 loews miami beach hotel 790 owned miami beach , florida new orleans hotel 285 management contract expiring 2018 new orleans , louisiana philadelphia hotel 585 owned philadelphia , pennsylvania portofino bay hotel , 750 management contract c ) universal orlando , florida regency hotel 350 land lease expiring 2013  renewal option new york , new york for 47 years royal pacific resort 1000 management contract c ) universal orlando , florida santa monica beach hotel 340 management contract expiring 2018 santa monica , california renewal option for 5 years loews vanderbilt hotel 340 owned nashville , tennessee ventana canyon 400 management contract expiring 2019 tucson , arizona loews hotel vogue 140 owned montreal , canada management contracts subject to termination rights.
 loews hotels subsidiary 20% ) owner of hotel  operated by loews hotels management contract.
( c ) loews hotels subsidiary is 50% ( 50 % ) owner of these hotels located at universal orlando theme park , through joint venture with universal studios and rank group.
 hotels on land leased by joint venture operated by loews hotels management contract.

name and location                                               | number of rooms | owned leased or managed
--------------------------------------------------------------- | --------------- | ----------------------------------------------------------------------
loews annapolis hotel annapolis maryland                        | 220             | owned
loews coronado bay san diego california                         | 440             | land lease expiring 2034
loews denver hotel denver colorado                              | 185             | owned
the don cesar a loews hotel st . pete beach florida             | 347             | management contract ( a ) ( b )
hard rock hotel at universal orlando orlando florida            | 650             | management contract ( c )
loews lake las vegas henderson nevada                           | 493             | management contract ( a )
loews le concorde hotel quebec city canada                      | 405             | land lease expiring 2069
the madison a loews hotel washington d.c .                      | 353             | management contract expiring 2021 ( a )
loews miami beach hotel miami beach florida                     | 790             | owned
loews new orleans hotel new orleans louisiana                   | 285             | management contract expiring 2018 ( a )
loews philadelphia hotel philadelphia pennsylvania              | 585             | owned
loews portofino bay hotel at universal orlando orlando florida  | 750             | management contract ( c )
loews regency hotel new york new york                           | 350             | land lease expiring 2013 with renewal option for 47 years
loews royal pacific resort at universal orlando orlando florida | 1000            | management contract ( c )
loews santa monica beach hotel santa monica california          | 340             | management contract expiring 2018 with renewal option for5 years ( a )
loews vanderbilt hotel nashville tennessee                      | 340             | owned
loews ventana canyon tucson arizona                             | 400             | management contract expiring 2019 ( a )
loews hotel vogue montreal canada                               | 140             | owned


31mar201122064257 notes to consolidated financial statements continued ) 10.
 income taxes continued reconciliation of beginning and ending amount gross unrecognized tax benefits follows ( in thousands ) :.
 company 2019s major tax jurisdictions as of october 1 , 2010 are united states  california iowa.
 for united states company has open tax years back to fiscal year 1998 due to carry forward of tax attributes.
 for california and iowa company open tax years back to fiscal year 2002 due to carry forward tax attributes.
 during year ended october 1, 2010 $ 0. 6 million of previously unrecognized tax benefits related to expiration of statute of limitations period recognized.
 company 2019s policy to recognize accrued interest and penalties if incurred on unrecognized tax benefits as component of income tax expense.
 company did not incur significant accrued interest or penalties related to unrecognized tax benefits during fiscal year 2010.
 11.
 stockholders 2019 equity common stock company authorized to issue ( 1 ) 525000000 shares of common stock  par value $ 0. 25 per share 2 ) 25000000 shares of preferred stock  without par value.
 holders company 2019s common stock entitled to such dividends declared by company 2019s board of directors out of funds legally available for such purpose.
 dividends not paid on common stock unless all accrued dividends on preferred stock paid or declared and set aside.
 company 2019s liquidation , dissolution winding up holders of common stock entitled to share pro rata in assets remaining after payment to creditors payment liquidation preference plus unpaid dividends to holders outstanding preferred stock.
 each holder company 2019s common stock entitled to one vote for each share outstanding in holder 2019s name.
no holder of common stock entitled to cumulate votes in voting for directors.
 company 2019s second amended certificate of incorporation provides unless otherwise determined by 2019s board of directors no holder common stock has preemptive right to purchase or subscribe for any stock of any class company may issue on august 3 , 2010  company 2019s board of directors approved stock repurchase program company authorized to repurchase up to $ 200 million of company 2019s common stock on open market or in privately negotiated transactions as permitted by securities laws other legal requirements.
 company had not repurchased any shares under program for fiscal year ended october 1 , 2010.
 as of november 29 , 2010 , skyworks / 2010 annual report 137

balance at october 2 2009                                          | $ 8859
------------------------------------------------------------------ | ------------
increases based on positions related to prior years                | 437
increases based on positions related to current year               | 11221
decreases relating to settlements with taxing authorities          | 2014
decreases relating to lapses of applicable statutes of limitations | -617 ( 617 )
balance at october 1 2010                                          | $ 19900


devon energy corporation and subsidiaries notes to consolidated financial statements 2013 ( continued ) restricted stock awards and units subject to terms  conditions  restrictions limitations  if compensation committee deems appropriate including restrictions on continued employment.
 service requirement for vesting ranges from zero to four years.
 during vesting period  recipients of restricted stock awards receive dividends not subject to restrictions or other limitations.
 devon estimates fair values of restricted stock awards and units as closing price of devon 2019s common stock on grant date of award unit expensed over applicable vesting period.
 performance-based restricted stock awards granted to certain members of devon 2019s senior management.
 vesting of awards dependent on devon meeting certain internal performance targets recipient meeting certain service requirements.
 service requirement for vesting ranges from zero to four years.
 for awards to vest  performance target must be met in first year if met  recipients entitled to dividends on awards over remaining service vesting period.
 if performance target and service period requirements not met , award does not vest.
 devon estimates fair values of awards as closing price of devon 2019s common stock on grant date of award expensed over applicable vesting period.
 performance share units units granted to certain members of devon 2019s senior management.
 each unit vests entitles recipient to one share of devon common stock.
 vesting of units based on comparing devon 2019s tsr to tsr of predetermined group of fourteen peer companies over specified two- or three- year performance period.
 vesting of units may be between zero and 200% ( 200 % ) of units granted depending on devon 2019s tsr as compared to peer group on vesting date.
end of vesting period , recipients receive dividend equivalents with respect to number of units vested.
 fair value of each performance share unit estimated as of date of grant using monte carlo simulation with following assumptions used for all grants made under plan : ( i ) risk-free interest rate based on u. s.
 treasury rates as of grant date ; ii ) volatility assumption based on historical realized price volatility of devon and designated peer group ; ( iii ) estimated ranking of devon among designated peer group.
 fair value of unit on date of grant expensed over applicable vesting period.
 following table presents assumptions related to performance share units granted.
 stock options in accordance with devon 2019s incentive plans  exercise price of stock options granted may not be less than market value of stock at date of grant.
 options granted exercisable during period established for each grant not exceed eight years from date of grant.
 recipient must pay exercise price in cash or common stock or combination thereof  at time option exercised.
 service requirement for vesting ranges from zero to four years.
 fair value of stock options on

| 2015                 | 2014                 | 2013
-------------------------- | -------------------- | -------------------- | --------------------------------------
grant-date fair value      | $ 81.99 2013 $ 85.05 | $ 70.18 2013 $ 81.05 | $ 61.27 2013 $ 63.48
risk-free interest rate    | 1.06% ( 1.06 % )     | 0.54% ( 0.54 % )     | 0.26% ( 0.26 % ) 2013 0.36% ( 0.36 % )
volatility factor          | 26.2% ( 26.2 % )     | 28.8% ( 28.8 % )     | 30.3% ( 30.3 % )
contractual term ( years ) | 2.89                 | 2.89                 | 3.0


hartford financial services group , inc.
 notes to consolidated financial statements continued ) 7.
 deferred policy acquisition costs and present value of future profits continued ) results changes in dac balance are as follows:.
 significant contributors to unlock charge recorded year ended december 31 , 2011 were assumption changes reduced expected future gross profits including additional costs associated with implementing japan hedging strategy and.
 variable annuity macro hedge program , actual separate account returns below aggregated estimated return.
 significant contributors to unlock benefit year ended december 31 , 2010 were actual separate account returns above aggregated estimated return.
 included in benefit are assumption updates related to benefits from withdrawals and lapses , offset by hedging , annuitization estimates on japan products , long-term expected rate of return updates.
 significant contributors to unlock charge recorded year ended december 31 , 2009 were results of actual separate account returns significantly below aggregated estimated return for first quarter of 2009 , partially offset by actual returns greater than aggregated estimated return for period from april 1 , 2009 to december 31 , 2009.
 most significant contributor to adjustments was effect of declining interest rates , resulting in unrealized gains on securities classified in aoci.
 includes $ 34 decrease result of disposition of dac from sale of hartford investment canadian canada in 2010.
 for year ended december 31 , 2010 effect of adopting new accounting guidance for embedded credit derivatives resulted in decrease to retained earnings and dac benefit.
 offsetting amount recorded in unrealized losses as losses decreased upon adoption of new accounting guidance.
year ended december 31 , 2009 effect adopting new accounting guidance for investments other- than- temporarily impaired resulted in increase to retained earnings dac charge.
 offsetting amount recorded in unrealized losses unrealized losses increased upon adoption new accounting guidance.
 as of december 31 , 2011  estimated future net amortization expense of present value of future profits for succeeding five years is $ 39 , $ 58 , $ 24 , $ 23 $ 22 in 2012 , 2013  2014  2015 2016  respectively.

| 2011           | 2010           | 2009
----------------------------------------------------------------------------------------- | -------------- | -------------- | --------------
balance january 1                                                                         | $ 9857         | $ 10686        | $ 13248
deferred costs                                                                            | 2608           | 2648           | 2853
amortization 2014 dac                                                                     | -2920 ( 2920 ) | -2665 ( 2665 ) | -3247 ( 3247 )
amortization 2014 dac from discontinued operations                                        | 2014           | -17 ( 17 )     | -10 ( 10 )
amortization 2014 unlock benefit ( charge ) pre-tax [1]                                   | -507 ( 507 )   | 138            | -1010 ( 1010 )
adjustments to unrealized gains and losses on securities available-for-sale and other [2] | -377 ( 377 )   | -1159 ( 1159 ) | -1031 ( 1031 )
effect of currency translation                                                            | 83             | 215            | -39 ( 39 )
cumulative effect of accounting change pre-tax [3]                                        | 2014           | 11             | -78 ( 78 )
balance december 31                                                                       | $ 8744         | $ 9857         | $ 10686


funding practices believe we not be required to make contributions under new ppa requirements until after 2012.
 not expect significant statutory or contractual funding requirements for major retiree benefit plans next years total 2007.
 and foreign plan contributions estimated at approximately $ 54 million.
 actual 2007 contributions could exceed current projections influenced by decision to undertake discretionary funding of benefit trusts versus other competing investment priorities future changes in government requirements renewals of union contracts or higher-than-expected health care claims experience.
 projections concerning timing of ppa funding requirements subject to change based on general market conditions affecting trust asset performance and future decisions regarding certain elective provisions of ppa.
 comparison to 2005 unfavorable movement in core working capital during 2006 related to trade payables performance higher inventory balances.
 at december 30 , 2006 consolidated trade payables balance within 3% ( 3 % ) of balance at year-end 2005.
 trade payables balance increased approximately 22% ( 22 % ) during 2005  from historically-low level at end of 2004.
 higher inventory balance related to higher commodity prices for raw material and packaging inventories overall increase in average number of weeks of inventory on hand.
 consolidated inventory balances unfavorably affected by.
 capacity limitations during 2006 ; consolidated inventory balances remain at industry-leading levels.
 despite unfavorable movement in absolute balance average core working capital continues to improve as percentage of net sales.
 for trailing fifty-two weeks ended december 30 , 2006  core working capital was 6. 8% ( 6. 8 % ) of net sales  compared to 7. 0% ( 7. 0 % ) as of year-end 2005 and 7. 3% ( 7. 3 % ) as of year-end 2004.
achieved multi-year reduction through faster collection of accounts receivable extension of terms on trade payables.
 up until 2006  successful in implementing logistics improvements to reduce inventory on hand while meet customer requirements.
 believe opportunity to reduce inventory from year-end 2006 levels could represent source of operating cash flow during 2007.
 for 2005  net favorable movement in core working capital related to increase in trade payables partially offset by unfavorable movement in trade receivables returned to historical levels relation to sales ) in early 2005 from lower levels at end of 2004.
 believe lower levels related to timing of 53rd week over 2004 holiday period impacted core working capital component of operating cash flow throughout 2005.
 presented in table on page 16  other working capital was source of cash in 2006 versus use of cash in 2005.
 year-over-year favorable variance of approximately $ 116 million attributable to factors including lower debt-related currency swap payments in 2006 business-related growth in accrued compensation and promotional liabilities.
 unfavorable movement in other working capital for 2004  to years primarily relates to decrease in current income tax liabilities offset in deferred income taxes line management measure of cash flow is defined as net cash provided by operating activities reduced by expenditures for property additions.
 use non-gaap financial measure of cash flow to focus management investors on amount cash available for debt repayment  dividend distributions  acquisition opportunities share repurchase.
 cash flow metric reconciled to most comparable gaap measure .
 year-over-year change 24. 5% ( 24. 5 % ) fffd19. 1% ( fffd19. 1 % ) 2006 and 2005 cash flow performance reflects increased spending for selected capacity expansions to accommodate company 2019s strong sales growth past years.
 increased capital spending represented 4.2% ( 4. 2 % ) of net sales in 2006 3. 7% ( 3. 7 % ) of net sales in 2005  compared to 2. 9% ( 2. 9 % ) in 2004.
 for 2007  expect property expenditures to remain at approximately 4% ( 4 % ) of net sales consistent with long-term target for capital spending.
 forecast includes expenditures construction new manufacturing facility in ontario , canada  represents approximately 15% ( 15 % ) of 2007 capital plan.
 facility constructed to satisfy existing capacity needs in north america business believe will partially ease logistics and inventory management issues encountered during 2006.
 for 2007  targeting cash flow of $ 950-$ 1025 million.
 expect to achieve target principally through operating

( dollars in millions )                   | 2006             | 2005                     | 2004
----------------------------------------- | ---------------- | ------------------------ | ----------------
net cash provided by operating activities | $ 1410.5         | $ 1143.3                 | $ 1229.0
additions to properties                   | -453.1 ( 453.1 ) | -374.2 ( 374.2 )         | -278.6 ( 278.6 )
cash flow                                 | $ 957.4          | $ 769.1                  | $ 950.4
year-over-yearchange                      | 24.5% ( 24.5 % ) | 221219.1% ( 221219.1 % ) |


notes to consolidated financial statements 2014 ( continued ) ( amounts in millions except per share amounts ) summary of remaining liability for 2007 , 2003 2001 restructuring programs follows : program total.
 1 includes amounts representing adjustments to liability for changes in foreign currency exchange rates.
 other reorganization-related charges charges relate to realignment of media businesses into newly management entity mediabrands 2006 merger of draft worldwide and foote , cone and belding worldwide to create draftfcb.
 charges related to severance and terminations costs lease termination exit costs.
 expect charges associated with mediabrands to completed during first half of 2009.
 charges related to creation of draftfcb in 2006 complete.
 charges separated from rest operating expenses within consolidated statements of operations because did not result from charges in normal course of business.

| 2007 program   | 2003 program | 2001 program | total
----------------------------------------- | -------------- | ------------ | ------------ | --------------
liability at december 31 2006             | $ 2014         | $ 12.6       | $ 19.2       | $ 31.8
net charges ( reversals ) and adjustments | 19.1           | -0.5 ( 0.5 ) | -5.2 ( 5.2 ) | 13.4
payments and other1                       | -7.2 ( 7.2 )   | -3.1 ( 3.1 ) | -5.3 ( 5.3 ) | -15.6 ( 15.6 )
liability at december 31 2007             | $ 11.9         | $ 9.0        | $ 8.7        | $ 29.6
net charges and adjustments               | 4.3            | 0.8          | 0.7          | 5.8
payments and other1                       | -15.0 ( 15.0 ) | -4.1 ( 4.1 ) | -3.5 ( 3.5 ) | -22.6 ( 22.6 )
liability at december 31 2008             | $ 1.2          | $ 5.7        | $ 5.9        | $ 12.8


actual return on plan assets compared to expected return on plan assets (. s.
 pension plans had actual rate of return 7. 8 percent compared to expected rate return 6. 9 percent ).
 2022 2015 net mark-to-market loss of $ 179 million - primarily due to difference between actual return on plan assets compared to expected return on plan assets (. s.
 pension plans had actual rate of return of ( 2. 0 ) percent compared to expected rate return 7. 4 percent ) partially offset by higher discount rates at end of 2015 compared to 2014.
 net mark-to-market losses in results of operations line items:.
 effective january 1, 2018, adopted new accounting guidance by fasb related to presentation of net periodic pension and opeb costs.
 guidance requires employer disaggregate service cost component from other components of net benefit cost.
 service cost required to reported in same line item or items as other compensation costs from services rendered by pertinent employees period.
 other components of net benefit cost required to reported outside subtotal for income from operations.
 components of pension and opeb costs  other than service costs reclassified from operating costs to other income/expense.
 change applied retrospectively to prior years.
 in fourth quarter of 2017  company reviewed and made changes to mortality assumptions for u. s.
 pension plans resulted in increase in life expectancy of plan participants.
 as of december 31 , 2017 changes resulted in increase in liability for postemployment benefits of approximately $ 290 million.
 in fourth quarter of 2016  company adopted new mortality improvement scales by soa for. s.
 pension and opeb plans.
 of december 31, 2016 resulted in increase in liability for postemployment benefits of approximately $ 200 million.
 in first quarter of 2017  announced closure of gosselies , belgium facility.
announcement impacted employees participated in defined benefit pension plan resulted in curtailment and recognition of termination benefits.
 in march 2017  recognized net loss of $ 20 million for curtailment and termination benefits.
 announced decision to phase out production at our aurora , illinois , facility  resulted in termination benefits of $ 9 million for certain hourly employees in our u. s.
 hourly defined benefit pension plan.
 beginning in 2016  elected to utilize full yield curve approach in estimation of service and interest costs by applying specific spot rates along yield curve used in determination benefit obligation to relevant projected cash flows.
 service and interest costs in 2017 and 2016 lower by $ 140 million and $ 180 million respectively  under new method than previous method.
 change had no impact on year-end defined benefit pension and opeb obligations or annual net periodic benefit cost lower service and interest costs offset in actuarial loss ( gain ) reported for respective year.
 expect total defined benefit pension and opeb expense ( excluding impact mark-to-market gains and losses ) to decrease approximately $ 80 million in 2018.
 decrease primarily due to higher expected return on plan assets higher asset base in 2018.
 strategy for u. s.
 and non-u. s.
 pensions includes ongoing alignment of investments to liabilities, reducing risk in portfolio.
 for u. s.
 pension plans  year-end 2017 asset allocation was 34 a0percent equities , 62 a0percent fixed income 4 percent other.
 current u. s.
 pension target asset allocation is 30 percent equities 70 percent fixed income.
 target allocation is revisited periodically to ensure reflects overall objectives.
 u. s.
 plans rebalanced to plus or minus 5 percentage points of target asset allocation ranges on monthly basis.
year-end 2017 asset allocation for non-u. s.
 pension plans was 40 a0percent equities 53 fixed income 4 a0percent real estate 3 percent other.
 2017 weighted-average target allocations for non-u. s.
 pension plans was 38 a0percent equities 54 fixed income 5 real estate 3 a0percent other.
 target allocations each plan vary based local statutory requirements demographics plan participants funded status.
 frequency of rebalancing for non-u.
 plans varies depending on plan.
 contributions to pension and opeb plans were $ 1. 6 billion and $ 329 million in 2017 and 2016 respectively.
 2017 contributions include $ 1. 0 billion discretionary contribution to. s.
 pension plans in december 2017.
 expect to make approximately $ 365 million contributions to pension opeb plans in 2018.
 believe adequate resources to fund both pension and opeb plans.
 48| 2017 form 10-k

( millions of dollars )                     | years ended december 31 , 2017 | years ended december 31 , 2016 | years ended december 31 , 2015
------------------------------------------- | ------------------------------ | ------------------------------ | ------------------------------
cost of goods sold                          | $ -29 ( 29 )                   | $ 476                          | $ 122
selling general and administrative expenses | 244                            | 382                            | 18
research and development expenses           | 86                             | 127                            | 39
total                                       | $ 301                          | $ 985                          | $ 179


republic services , inc.
 notes to consolidated financial statements 2014 continued ) high quality financial institutions.
 balances may be in excess of fdic insured limits.
 to manage related credit exposure  we monitor credit worthiness of financial institutions where deposits.
 concentrations of credit risk to trade accounts receivable limited due to wide variety of customers and markets in provide services dispersion of operations across geographic areas.
 provide services to small-container , large-container  municipal residential  energy services customers in united states and puerto rico.
 perform ongoing credit evaluations of customers do not require collateral to support customer receivables.
 establish allowance for doubtful accounts based on factors including credit risk of specific customers  age of receivables outstanding  historical trends  economic conditions other information.
 accounts receivable , net accounts receivable represent receivables from customers for collection , transfer , recycling , disposal  energy services other services.
 receivables recorded when billed or when related revenue earned represent claims against third parties settled in cash.
 carrying value of receivables , net of allowance for doubtful accounts customer credits  represents estimated net realizable value.
 provisions for doubtful accounts evaluated monthly basis recorded based on historical collection experience  age of receivables  specific customer information economic conditions.
 review outstanding balances account-specific basis.
 reserves provided for accounts receivable in excess of 90 days outstanding.
 past due receivable balances written-off when collection efforts unsuccessful in collecting amounts due.
 following table reflects activity in allowance for doubtful accounts for years ended december 31:.
 restricted cash and marketable securities as of december 31 , 2018 , had $ 108. 1 million of restricted cash and marketable securities of which $ 78.6 million supports our insurance programs for workers 2019 compensation  commercial general liability  commercial auto liability.
 we obtain funds through issuance of tax-exempt bonds for financing qualifying expenditures at our landfills  transfer stations  collection and recycling processing centers.
 funds deposited directly into trust accounts by bonding authorities at time of issuance.
 use of these funds is contractually restricted  not ability to use funds for general operating purposes they classified as restricted cash and marketable securities in our consolidated balance sheets.
 in normal course business we may be required to provide financial assurance to governmental agencies other entities in connection with municipal residential collection contracts closure post- closure of landfills environmental remediation environmental permits business licenses and permits as financial guarantee of performance.
 at several landfills satisfy financial assurance requirements by depositing cash into restricted trust funds or escrow accounts.

| 2018     | 2017     | 2016
---------------------------- | -------- | -------- | --------
balance at beginning of year | $ 38.9   | $ 44.0   | $ 46.7
additions charged to expense | 34.8     | 30.6     | 20.4
accounts written-off         | ( 39.4 ) | ( 35.7 ) | ( 23.1 )
balance at end of year       | $ 34.3   | $ 38.9   | $ 44.0


capitalized software : internally developed computer software costs and costs of product enhancements capitalized subsequent to determination technological feasibility ; capitalization continues until product available for commercial release.
 judgment required in determining when technological feasibility product is established.
 company determined technological feasibility reached after high-risk development issues resolved through coding and testing.
 time between establishment technological feasibility and commercial release of software is minimal resulting in insignificant or no capitalization of internally developed software costs.
 amortization of capitalized software costs  for internally developed as as for purchased software products computed on product-by-product basis over estimated economic life of product  generally three years.
 amortization is greater of amount computed using : ratio of current year 2019s gross revenue to total current and anticipated future gross revenue for product or straight-line method over estimated life of product.
 amortization expense related to capitalized and acquired software costs , including related trademarks  was $ 40. 9 million , $ 33. 7 million and $ 32. 8 million for years ended december 31 , 2012 , 2011 and 2010 , respectively.
 company periodically reviews carrying value of capitalized software.
 impairments recognized in results operations when expected future undiscounted operating cash flow from capitalized costs of internally developed software is less than carrying value.
 no impairment charges required to date.
 goodwill and other intangible assets : goodwill represents excess of consideration transferred over fair value of net identifiable assets acquired.
 intangible assets consist of trademarks , customer lists , contract backlog , acquired software and technology.
 company tests goodwill for impairment annually by qualitative assessment of sufficient evidence likely not fair value of each reporting unit exceeds its carrying amount.
application of qualitative assessment requires company to assess make judgments regarding variety of factors potentially impact fair value of a reporting unit , including general economic conditions , industry market-specific conditions , customer behavior  cost factors  company 2019s financial performance trends  company 2019s strategies business plans  capital requirements  management personnel issues  company 2019s stock price , among others.
 company considers totality of these and other factors , placing more weight on events and circumstances to most affect reporting unit 2019s fair value or carrying amount of net assets , to reach qualitative conclusion regarding whether more likely not fair value of reporting unit is less than its carrying amount.
 if determined more likely than not fair value reporting unit exceeds its carrying value , no further analysis is necessary.
 if determined more likely than not reporting unit's carrying value exceeds fair value , a quantitative two-step analysis is performed where fair value of reporting unit is estimated and impairment loss , if any, is recorded.
 company tests indefinite-lived intangible assets for impairment annually by comparing carrying value asset to estimated fair value.
 company performs annual goodwill and indefinite-lived intangible assets impairment test on january 1 of each year unless indicator require test during year.
 company periodically reviews carrying value of other intangible assets and will recognize impairments when events circumstances indicate such assets may be impaired.
 no impairment charges required to date for company's goodwill and other intangible assets.
 concentrations of credit risk : company has concentration of credit risk with respect to revenue and trade receivables due to use of certain significant channel partners to market sell company 2019s products.
 company performs periodic credit evaluations of customers 2019 financial condition and generally does not require collateral.
following table outlines concentrations of risk respect company 2019s revenue:.
 table of contents

( as a % (  % ) of revenue except customer data )     | year ended december 31 , 2012 | year ended december 31 , 2011 | year ended december 31 , 2010
----------------------------------------------------- | ----------------------------- | ----------------------------- | -----------------------------
revenue from channel partners                         | 26% ( 26 % )                  | 26% ( 26 % )                  | 27% ( 27 % )
largest channel partner                               | 6% ( 6 % )                    | 4% ( 4 % )                    | 4% ( 4 % )
2ndlargest channel partner                            | 3% ( 3 % )                    | 3% ( 3 % )                    | 3% ( 3 % )
direct sale customers exceeding 5% ( 5 % ) of revenue | 2014                          | 2014                          | 2014


note 10.
 commitments and contingencies credit-related commitments contingencies : credit-related financial instruments  off-balance sheet include indemnified securities financing  unfunded commitments to extend credit or purchase assets standby letters of credit.
 potential loss associated with indemnified securities financing  unfunded commitments standby letters of credit is equal to total gross contractual amount not consider value of collateral.
 table summarizes total gross contractual amounts of credit-related off-balance sheet financial instruments at december 31.
 amounts not reflect participations to independent third parties.
 ( 1 amount for 2009 excludes agreements related to commercial paper conduits consolidated in may 2009 ; see note 11.
 approximately 81% ( 81 % ) of unfunded commitments to extend credit expire within one year from date of issue.
 many commitments expected to expire or renew without drawn upon total commitment amount not represent future cash requirements.
 securities finance : on behalf of customers we lend securities to creditworthy brokers other institutions.
 indemnify customers for fair market value of securities against failure of borrower to return securities.
 collateral funds received in with securities finance services held by us as agent not recorded in consolidated statement of condition.
 require borrowers to provide collateral in amount equal to or in excess of 100% ( ) of fair market value of securities borrowed.
 borrowed securities revalued daily to determine if additional collateral necessary.
 we held  as agent  cash.
 government securities with aggregate fair value of $ 375. 92 billion and $ 333. 07 billion as collateral for indemnified securities on loan at december 31 , 2009 and 2008  presented in table.
 collateral held by us is invested on behalf of customers in accordance with their guidelines.
certain cases collateral invested in third-party repurchase agreements for we indemnify customer against loss of principal invested.
 we require repurchase agreement counterparty to provide collateral amount equal to or excess of 100% ( ) of amount repurchase agreement.
 indemnified repurchase agreements and related collateral not recorded in our consolidated statement of condition.
 of collateral of $ 375. 92 billion at december 31 , 2009 and $ 333. 07 billion at december 31 , 2008 above , $ 77. 73 billion at december 31 , 2009 and $ 68. 37 billion at december 31 , 2008 invested in indemnified repurchase agreements.
 we held as agent cash and securities with aggregate fair value of $ 82. 62 billion and $ 71. 87 billion as collateral for indemnified investments in repurchase agreements at december 31 , 2009 and december 31 , 2008.
 legal proceedings : ordinary business we and subsidiaries involved in disputes  litigation regulatory inquiries investigations pending and threatened.
 these matters if resolved adversely against us may result in monetary damages  fines penalties or require changes in business practices.
 resolution of proceedings difficult to predict.
 we do not believe amount any judgment , settlement or other action from pending proceeding have material adverse effect on our consolidated financial condition although outcome of certain matters described below may have material adverse effect on our consolidated results of operations for period matter resolved

( in millions )                       | 2009     | 2008
------------------------------------- | -------- | --------
indemnified securities financing      | $ 365251 | $ 324590
asset purchase agreements ( 1 )       | 8211     | 31780
unfunded commitments to extend credit | 18078    | 20981
standby letters of credit             | 4784     | 6061


before purchase in november 2008 units reflected in diluted earnings per share calculations using treasury stock method defined by sfas no.
 128 , earnings per share.
 under this method number of shares of common stock used in calculating diluted earnings per share ( based on settlement formula applied at end of reporting period ) increased by excess  if of number of shares issued upon settlement of purchase contracts less number of shares purchased by company in market at average market price during period using proceeds received upon settlement.
 dilution occur for periods when average market price of company 2019s common stock for reporting period above $ 21. 816.
 senior secured revolving credit facility in september 2005 company entered into $ 250 million  three-year senior secured revolving credit facility.
 result of citadel investment in november 2007 facility terminated all unamortized debt issuance costs expensed.
 corporate debt covenants company 2019s corporate debt described terms include customary financial covenants.
 as of december 31 , 2007 company in compliance with all such covenants.
 early extinguishment of debt in 2006 company called entire remaining $ 185. 2 million principal amount of 6% ( 6 % ) notes for redemption.
 company recorded $ 0. 7 million loss on early extinguishment of debt relating to write-off of unamortized debt offering costs.
 company early extinguishments of debt in 2005.
 other corporate debt company has multiple term loans from financial institutions.
 loans collateralized by equipment included within other borrowings on consolidated balance sheet.
 see note 14 2014securities sold under agreement to repurchase and other borrowings.
 future maturities of corporate debt scheduled principal payments of corporate debt as of december 31, 2007 are as follows ( dollars in thousands ) : years ending december 31.

2008                                              | $ 2014
------------------------------------------------- | ------------------
2009                                              | 2014
2010                                              | 2014
2011                                              | 453815
2012                                              | 2014
thereafter                                        | 2996337
total future principal payments of corporate debt | 3450152
unamortized discount net                          | -427454 ( 427454 )
total corporate debt                              | $ 3022698


to  rather than substitute for cash provided by operating activities.
 following table reconciles cash provided by operating activities ( gaap measure ) to free cash flow ( non-gaap measure ) :.
 2017 outlook f0b7 safety 2013 operating a safe railroad benefits all our constituents : employees , customers  shareholders communities we serve.
 will continue using multi-faceted approach to safety  utilizing technology , risk assessment  training and employee engagement  quality control  targeted capital investments.
 continue using expanding deployment of total safety culture and courage to care throughout operations to identify and implement best practices for employee and operational safety.
 continue efforts to increase detection of rail defects ; improve or close crossings ; educate public and law enforcement agencies about crossing safety through combination our own programs ( including risk assessment strategies ) industry programs local community activities across network.
 network operations 2013 in 2017  continue to align resources with customer demand maintain efficient network ensure surge capability with assets.
 fuel prices 2013 fuel price projections for crude oil and natural gas continue to fluctuate in current environment.
 could see volatile fuel prices during year  sensitive to global.
 domestic demand  refining capacity geopolitical events  weather conditions other factors.
 as prices fluctuate timing impact on earnings  fuel surcharge programs trail increases or decreases in fuel price by approximately two months.
 lower fuel prices could have positive impact on economy by increasing consumer discretionary spending increase demand for various consumer products transport.
 alternatively lower fuel prices could likely have negative impact on other commodities coal and domestic drilling-related shipments.
 capital plan 2013 in 2017  expect our capital plan to be approximately $ 3.1 billion , including expenditures for ptc , approximately 60 locomotives scheduled to delivered  intermodal containers and chassis  freight cars.
 capital plan may be revised if business conditions warrant or if new laws or regulations affect ability to generate sufficient returns on investments.
 ( see further discussion in item 7 under liquidity and capital resources 2013 capital plan. ) f0b7 financial expectations 2013 economic conditions in market sectors continue drive uncertainty with volume levels.
 expect volume to grow in low single digit range in 2017 compared to 2016  depend on overall economy and market conditions.
 significant uncertainties is outlook for energy markets  bring challenges and opportunities.
 in current environment  expect continued margin improvement driven by continued pricing opportunities  ongoing productivity initiatives  ability to leverage resources strengthen franchise.
 over longer term  expect overall u. s.
 economy to continue improve at modest pace  some markets outperforming others.

millions                              | 2016           | 2015           | 2014
------------------------------------- | -------------- | -------------- | --------------
cash provided by operating activities | $ 7525         | $ 7344         | $ 7385
cash used in investing activities     | -3393 ( 3393 ) | -4476 ( 4476 ) | -4249 ( 4249 )
dividends paid                        | -1879 ( 1879 ) | -2344 ( 2344 ) | -1632 ( 1632 )
free cash flow                        | $ 2253         | $ 524          | $ 1504


management 2019s discussion analysis 118 jpmorgan chase & co. /2018 form 10-k equivalent to risk of loan exposures.
 dre is less extreme measure of potential credit loss than peak used as input for aggregating derivative credit risk exposures with loans other credit risk.
 avg is measure of expected fair value of firm 2019s derivative receivables at future time periods , including benefit of collateral.
 avg over total life of derivative contract used as primary metric for pricing purposes used to calculate credit risk capital and cva , described below.
 fair value of firm 2019s derivative receivables incorporates cva to reflect credit quality of counterparties.
 cva based on firm 2019s avg to counterparty and counterparty 2019s credit spread in credit derivatives market.
 firm believes active risk management essential to controlling dynamic credit risk in derivatives portfolio.
 firm 2019s risk management process consideration potential impact of wrong-way risk , defined potential for increased correlation between firm 2019s exposure to counterparty ( avg ) and counterparty 2019s credit quality.
 many factors may influence nature magnitude of these correlations over time.
 extent correlations identified  firm may adjust cva associated with counterparty 2019s avg.
 firm risk manages exposure to changes in cva by entering into credit derivative contracts , interest rate , foreign exchange , equity and commodity derivative contracts.
 accompanying graph shows exposure profiles to firm 2019s current derivatives portfolio over next 10 years as calculated by peak , dre and avg metrics.
 three measures generally show exposure will decline after first year , if no new trades added to portfolio.
exposure profile of derivatives measures december 31 , 2018 ( in billions ) table summarizes ratings profile firm 2019s derivative receivables  including credit derivatives  net of all collateral  at dates indicated.
 ratings scale based on firm 2019s internal ratings correspond to ratings assigned by s&p and moody 2019s.
 ratings profile derivative receivables.
 firm uses collateral agreements to mitigate counterparty credit risk.
 percentage of firm 2019s over-the-counter derivative transactions subject to collateral agreements 2014 excluding foreign exchange spot trades not typically covered by collateral agreements due to short maturity centrally cleared trades settled daily 2014 was approximately 90% ( 90 % ) at december 31, 2018  and december 31 , 2017.

rating equivalent december 31 ( in millions except ratios ) | rating equivalent exposure net of all collateral | rating equivalent % (  % ) of exposure netof all collateral | exposure net of all collateral | % (  % ) of exposure netof all collateral
----------------------------------------------------------- | ------------------------------------------------ | ----------------------------------------------------------- | ------------------------------ | -----------------------------------------
aaa/aaa to aa-/aa3                                          | $ 11831                                          | 31% ( 31 % )                                                | $ 11529                        | 29% ( 29 % )
a+/a1 to a-/a3                                              | 7428                                             | 19                                                          | 6919                           | 17
bbb+/baa1 to bbb-/baa3                                      | 12536                                            | 32                                                          | 13925                          | 34
bb+/ba1 to b-/b3                                            | 6373                                             | 16                                                          | 7397                           | 18
ccc+/caa1 and below                                         | 723                                              | 2                                                           | 645                            | 2
total                                                       | $ 38891                                          | 100% ( 100 % )                                              | $ 40415                        | 100% ( 100 % )


table of contents table presents payments due by company under contractual obligations with minimum firm commitments as of september 28 , 2013 excludes amounts recorded on consolidated balance sheet except for long-term debt ( in millions ) : lease commitments company 2019s major facility leases typically for terms not exceeding 10 years provide renewal options for terms not exceeding five additional years.
 leases for retail space are for terms from five to 20 years  majority for 10 years often contain multi-year renewal options.
 as of september 28 , 2013  company 2019s total future minimum lease payments under noncancelable operating leases were $ 4. 7 billion  $ 3. 5 billion related to leases for retail space.
 purchase commitments with outsourcing partners component suppliers company utilizes outsourcing partners to manufacture sub-assemblies for products perform final assembly testing of finished products.
 outsourcing partners acquire components build product based on demand information supplied company covers periods up to 150 days.
 company obtains individual components for products from variety of suppliers.
 company acquires components through purchase orders , supplier contracts  open orders based on projected demand information.
 appropriate purchases applied to inventory component prepayments outstanding with supplier.
 as of september 28 , 2013  company had outstanding off-balance sheet third- party manufacturing commitments and component purchase commitments of $ 18. 6 billion.
 other obligations in addition to off-balance sheet commitments company had outstanding obligations of $ 1. 3 billion as of september 28 , 2013  mainly of commitments to acquire capital assets including product tooling manufacturing process equipment  commitments related to advertising , research and development , internet and telecommunications services other obligations.
company 2019s other non-current liabilities in consolidated balance sheets consist primarily of deferred tax liabilities , gross unrecognized tax benefits related gross interest and penalties.
 as of september 28 , 2013 , company had non-current deferred tax liabilities of $ 16. 5 billion.
 additionally as of september 28 , 2013  company had gross unrecognized tax benefits of $ 2. 7 billion additional $ 590 million for gross interest and penalties as non-current liabilities.
 company unable to make reliable estimate of timing of payments in individual years connection with these tax liabilities ; such amounts not included in above contractual obligation table.
 indemnification company does not indemnify end-users of operating system application software against legal claims software infringes third-party intellectual property rights.
 other agreements entered by payments due in than 1 payments due than 5 years total.

| payments due in less than1 year | payments due in 1-3 years | payments due in 4-5 years | payments due in more than5 years | total
-------------------- | ------------------------------- | ------------------------- | ------------------------- | -------------------------------- | -------
long-term debt       | $ 0                             | $ 2500                    | $ 6000                    | $ 8500                           | $ 17000
operating leases     | 610                             | 1200                      | 1056                      | 1855                             | 4721
purchase obligations | 18616                           | 0                         | 0                         | 0                                | 18616
other obligations    | 1081                            | 248                       | 16                        | 3                                | 1348
total                | $ 20307                         | $ 3948                    | $ 7072                    | $ 10358                          | $ 41685