changes in fair value of funded unfunded credit products classified in principal transactions in citi 2019s consolidated statement of income.
 related interest revenue measured based on contractual interest rates reported as interest revenue on trading account assets or loan interest depending on balance sheet classifications credit products.
 changes in fair value for years ended december 31 , 2018 and 2017 due to instrument-specific credit risk totaled loss of $ 27 million gain of $ 10 million.
 investments in unallocated precious metals citigroup invests in precious metals accounts ( gold  silver platinum palladium ) commodity foreign currency trading activities or to hedge exposures from structured liabilities.
 under asc 815  investment bifurcated into debt host contract and commodity forward derivative instrument.
 citigroup elects fair value option for debt host contract reports debt contract within trading account assets on company consolidated balance sheet.
 total carrying amount of debt host contracts across unallocated precious metals accounts was approximately $ 0. 4 billion and $ 0. 9 billion at december 31 , 2018 and 2017 .
 amounts expected to fluctuate based on trading activity future periods.
 trading citi trades unallocated precious metals investments executes forward purchase forward sale derivative contracts with trading counterparties.
 when citi sells unallocated precious metals investment citi 2019s receivable from depository bank repaid citi derecognizes investment in unallocated precious metal.
 forward purchase or sale contract with trading counterparty indexed to unallocated precious metals accounted for as derivative  at fair value through earnings.
 as of december 31 , 2018  approximately $ 13. 7 billion and $ 10. 3 billion in notional amounts of forward purchase and forward sale derivative contracts outstanding.
investments in private equity real estate ventures equity method investments citigroup invests in private real estate ventures for earning investment returns for capital appreciation.
 company elected fair value option for certain ventures investments similar to many private equity hedge fund activities in citi 2019s investment companies reported at fair value.
 fair value option brings consistency in accounting evaluation of investments.
 all investments ( debt and equity ) in private equity real estate entities accounted for at fair value.
 these investments classified as investments on citigroup 2019s consolidated balance sheet.
 changes in fair values investments classified in other revenue in company 2019s consolidated statement of income.
 citigroup elected fair value option for certain non-marketable equity securities risk managed with derivative instruments accounted for at fair value through earnings.
 securities classified as trading account assets on citigroup 2019s consolidated balance sheet.
 changes in fair value of securities related derivative instruments recorded in principal transactions.
 effective january 1, 2018 under asu 2016-01 and asu 2018-03  fair value option election no longer required to measure these non-marketable equity securities through earnings.
 see note 1 to consolidated financial statements for additional details.
 certain mortgage loans held-for-sale citigroup elected fair value option for certain purchased originated prime fixed-rate conforming adjustable-rate first mortgage loans hfs.
 loans intended for sale or securitization hedged with derivative instruments.
 company elected fair value option to mitigate accounting mismatches in hedge accounting complex achieve operational simplifications.
 table provides information about certain mortgage loans hfs carried at fair value:.
 changes in fair values of these mortgage loans reported in other revenue in company 2019s consolidated statement of income.
no net change in fair value during years ended december 31 , 2018 2017 due to instrument-specific credit risk.
 related interest income measured based on contractual interest rates reported as interest revenue in consolidated statement of income.

in millions of dollars                                                                                | december 312018 | december 31 2017
-------------------------------------------------------------------------------------------------------------------- | --------------- | ----------------
carrying amount reported on the consolidated balance sheet                                                           | $ 556           | $ 426
aggregate fair value in excess of ( less than ) unpaid principal balance                                             | 21              | 14
balance of non-accrual loans or loans more than 90 days past due                                                     | 2014            | 2014
aggregate unpaid principal balance in excess of fair value for non-accrual loans or loans more than 90 days past due | 2014            | 2014


residential mortgage-backed securities at december 31 , 2012  our portfolio was comprised of $ 31. 4 billion fair value of us government agency-backed securities and $ 6. 1 billion fair value of non-agency ( private issuer ) securities.
 agency securities generally collateralized by 1-4 family  conforming fixed-rate residential mortgages.
 non-agency securities also generally collateralized by 1-4 family residential mortgages.
 mortgage loans underlying non-agency securities generally non-conforming. original balances in excess of amount qualifying for agency securities ) predominately have interest rates fixed for period of time after rate adjusts to floating rate based upon contractual spread indexed to market rate. or interest rates fixed for term of loan.
 all non-agency securities are senior tranches in securitization structure at origination had credit protection in form of credit enhancement, over- collateralization and/or excess spread accounts.
 during 2012  recorded otti credit losses of $ 99 million on non-agency residential mortgage-backed securities.
 all losses associated with securities rated below investment grade.
 as of december 31 , 2012 noncredit portion of impairment recorded in accumulated other comprehensive income for non-agency residential mortgage- backed securities for which recorded otti credit loss totaled $ 150 million related securities had fair value of $ 3. 7 billion.
 fair value of sub-investment grade investment securities for not recorded otti credit loss of december 31  2012 totaled $ 1. 9 billion  with unrealized net gains of $ 114 million.
 commercial mortgage-backed securities fair value of non-agency commercial mortgage- backed securities portfolio was $ 5.9 billion at december 31 , 2012 consisted of fixed-rate  private-issuer securities collateralized by non-residential properties retail properties office buildings multi-family housing.
 agency commercial mortgage-backed securities portfolio was $ 2. 0 billion fair value at december 31 , 2012 of multi-family housing.
 all securities are most senior tranches in subordination structure.
 no otti credit losses on commercial mortgage- backed securities during 2012.
 asset-backed securities fair value of asset-backed securities portfolio was $ 6. 5 billion at december 31 , 2012 consisted of fixed-rate and floating-rate private-issuer securities collateralized by consumer credit products including residential mortgage loans credit cards automobile loans student loans.
 all securities are senior tranches in securitization structure have credit protection in of credit enhancement  over-collateralization excess spread accounts.
 recorded otti credit losses of $ 11 million on asset- backed securities during 2012.
 securities collateralized by first lien and second lien residential mortgage loans rated below investment grade.
 as of december 31 , 2012 noncredit portion of impairment recorded in accumulated other comprehensive income for asset-backed securities for recorded otti credit loss totaled $ 52 million related securities had fair value of $ 603 million.
 for sub-investment grade investment securities ( available for sale held to maturity ) not recorded otti loss through december 31 , 2012 fair value was $ 47 million unrealized net losses of $ 3 million.
 results security-level assessments indicate will recover cost basis of these securities.
 note 8 investment securities in notes to consolidated financial statements item 8 report provides additional information on otti losses detail regarding process for assessing otti.
if current housing economic conditions worsen market volatility illiquidity worsen or market interest rates increase valuation of our investment securities portfolio could be adversely affected we could incur additional credit losses impact consolidated income statement.
 loans held for sale table 15 : loans held for sale in millions december 31 31.
 stopped originating commercial mortgage loans for sale at fair value in 2008 continue pursuing opportunities to reduce positions at appropriate prices.
 at december 31 , 2012  balance to loans was $ 772 million compared to $ 843 million at december 31, 2011.
 sold $ 32 million in unpaid principal balances of commercial mortgage loans held for sale carried at fair value in 2012 sold $ 25 million in 2011.
 pnc financial services group , inc.
 2013 form 10-k 49

in millions                                      | december 312012 | december 312011
------------------------------------------------ | --------------- | ---------------
commercial mortgages at fair value               | $ 772           | $ 843
commercial mortgages at lower of cost or market  | 620             | 451
total commercial mortgages                       | 1392            | 1294
residential mortgages at fair value              | 2096            | 1415
residential mortgages at lower of cost or market | 124             | 107
total residential mortgages                      | 2220            | 1522
other                                            | 81              | 120
total                                            | $ 3693          | $ 2936


5.
 commitments contingencies rental expense related to office , warehouse space real estate amounted to $ 608 , $ 324 , $ 281 for years ended december 25 , 2004 , december 27 , 2003  december 28 , 2002 ,.
 future minimum lease payments as follows : at december 25 , 2004 , company expects future costs of approximately $ 900 for completion facility expansion in olathe , kansas.
 certain cash balances of gel held as collateral by bank securing payment united kingdom value-added tax requirements.
 these amounted to $ 1457 and $ 1602 at december 25, 2004 and december 27, 2003 , reported as restricted cash.
 in normal course business  company and subsidiaries are parties to various legal claims , actions  complaints  including matters involving patent infringement other intellectual property claims other risks.
 not possible to predict with certainty not company subsidiaries successful in these legal matters or if not impact might be.
 company 2019s management does not expect results in legal proceedings have material adverse effect on company 2019s results of operations , financial position or cash flows.
 6.
 employee benefit plans gii sponsors employee retirement plan under employees may contribute up to 50% ( 50 % ) of annual compensation subject to internal revenue code maximum limitations gii contributes specified percentage of each participant 2019s annual compensation up to certain limits as defined in plan.
 gel has defined contribution plan under employees may contribute up to 5% ( 5 % ) of annual compensation.
 both gii and gel contribute amount determined annually at discretion of board of directors.
years ended december 25 , 2004 , december 27 , 2003  december 28 , 2002  expense related to plans of $ 5183 , $ 4197 , $ 2728 ,  charged to operations.
 company 2019s foreign subsidiaries participate in local defined benefit pension plans.
 contributions calculated by formulas consider final pensionable salaries.
 neither obligations nor contributions for years ended december 25 , 2004  27  2003 28 , 2002 significant.

year       | amount
---------- | ------
2005       | $ 512
2006       | 493
2007       | 493
2008       | 474
2009       | 474
thereafter | 3452


summary of stock-based performance award and restricted stock award activity.
 stock awards weighted average grant date fair value restricted awards.
 additional shares issued in 2006 and 2007 because performance targets exceeded for 36-month performance periods to 2003 and 2004 grants.
 during 2007 , 2006 2005 weighted average grant date fair value of restricted stock awards was $ 54. 97 , $ 40. 45 $ 27. 21.
 vesting date fair value of stock-based performance awards during 2007  2006 2005 was $ 38 million , $ 21 million $ 5 million.
 vesting date fair value of restricted stock awards 2007 2006 2005 was $ 29 million , $ 32 million $ 13 million.
 as of december 31 , 2007 $ 37 million of unrecognized compensation cost related to restricted stock awards expected to be recognized over average period of 1. 4 year.
 25.
 stockholders 2019 equity common stock 2013 on april 25 , 2007  marathon 2019s stockholders approved increase in authorized shares of common stock from 550 million to 1. 1 billion shares company 2019s board of directors declared two-for-one split of 2019s common stock.
 stock split effected in form of stock dividend distributed on june 18 , 2007  to stockholders of record at close of business on may 23 , 2007.
 stockholders received one additional share of marathon oil corporation common stock for each share common stock held as of close of business on record date.
 shares of common stock issued or issuable for stock-based awards under marathon 2019s incentive compensation plans proportionately increased in accordance with terms of plans.
 common stock per share except par value ) information for all periods restated in consolidated financial statements notes reflect stock split.
2007 , 2006 2005  marathon had common stock issuances addition to shares issued for employee stock-based awards : 2022 on october 18 , 2007 , acquisition of western note 6, marathon distributed 29 million shares common stock valued $ 55. 70 per share to western 2019s shareholders.
 2022 on june 30 , 2005 , acquisition of ashland 2019s minority interest in mpc 6 marathon distributed 35 million shares common stock valued $ 27. 23 per share to ashland 2019s shareholders.
 marathon 2019s board of directors authorized repurchase of up to $ 5 billion common stock.
 purchases program may be in open market transactions  block purchases or privately negotiated transactions.
 company use cash on hand , cash generated from operations  proceeds from potential asset sales cash from available borrowings to acquire shares.
 program may be changed based company 2019s financial condition or changes market conditions subject to termination prior to completion.
 repurchase program does not include specific price targets or timetables.
 as of december 31 , 2007  company had acquired 58 million common shares at cost of $ 2. 520 billion program including 16 million common shares acquired during 2007 cost $ 822 million 42 million common shares acquired 2006 cost $ 1. 698 billion.

unvested at december 31 2005 | stock-based performance awards 897200 | weightedaverage grantdate fair value $ 14.97 | restricted stock awards 1971112 | weightedaverage grantdate fair value $ 23.97
---------------------------- | ------------------------------------- | -------------------------------------------- | ------------------------------- | --------------------------------------------
granted                      | 135696 ( a )                          | 38.41                                        | 437960                          | 40.45
vested                       | -546896 ( 546896 )                    | 19.15                                        | -777194 ( 777194 )              | 20.59
forfeited                    | -12000 ( 12000 )                      | 16.81                                        | -79580 ( 79580 )                | 26.55
unvested at december 31 2006 | 474000                                | 16.81                                        | 1552298                         | 30.21
granted                      | 393420 ( a )                          | 44.13                                        | 572897                          | 54.97
vested                       | -867420 ( 867420 )                    | 29.20                                        | -557096 ( 557096 )              | 28.86
forfeited                    | 2013                                  | 2013                                         | -40268 ( 40268 )                | 34.55
unvested at december 31 2007 | 2013                                  | 2013                                         | 1527831                         | 39.87


note 3.
 business combinations purchase combinations.
 during fiscal years presented company made purchase acquisitions.
 for each acquisition excess of purchase price over estimated value net tangible assets acquired allocated to various intangible assets primarily of developed technology  customer contract-related assets goodwill.
 values assigned to developed technologies related to each acquisition based upon future discounted cash flows to existing products 2019 projected income streams.
 goodwill  excess of purchase consideration over fair value of tangible identifiable intangible assets acquired in acquisitions not be amortized.
 goodwill not deductible for tax purposes.
 amounts allocated to purchased in-process research and developments determined through established valuation techniques in high-technology industry expensed upon acquisition because technological feasibility not established no future alternative uses existed.
 consolidated financial statements include operating results of each business from date of acquisition.
 company not consider acquisitions material to results of operations not presenting pro forma statements of operations for fiscal years ended october 31 , 2006 , 2005 2004.
 fiscal 2006 acquisitions sigma-c software ag ( sigma-c ) company acquired sigma-c on august 16 , 2006 in all-cash transaction.
 reasons for acquisition.
 sigma-c provides simulation software allows semiconductor manufacturers suppliers to develop optimize process sequences for optical lithography  e-beam lithography next-generation lithography technologies.
 company believes acquisition will tighter integration between design and manufacturing tools allowing company customers to perform more accurate design layout analysis with 3d lithography simulation understand issues affect ic wafer yields.
 purchase price.
 company paid $ 20. 5 million in cash for outstanding shares and shareholder notes of which $ 2.05 million deposited with escrow agent paid per escrow agreement.
 company believes escrow amount will be paid.
 total purchase consideration consisted of:.
 acquisition-related costs of $ 2. 1 million consist primarily of legal , tax accounting fees estimated facilities closure costs employee termination costs.
 as of october 31 , 2006  company paid $ 0. 9 million of acquisition-related costs.
 $ 1. 2 million balance remaining at october 31, 2006 primarily consists of legal tax accounting fees estimated facilities closure costs employee termination costs.
 assets acquired.
 company performed preliminary valuation allocated total purchase consideration to assets liabilities.
 company acquired $ 6. 0 million of intangible assets $ 3. 9 million in existing technology $ 1. 9 million in customer relationships $ 0. 2 million in trade names amortized over five years.
 company acquired assets of $ 3. 9 million assumed liabilities of $ 5. 1 million result transaction.
 goodwill  excess of purchase price over

| ( in thousands )
------------------------- | ----------------
cash paid                 | $ 20500
acquisition-related costs | 2053
total purchase price      | $ 22553


10-k altria release tuesday february 27, 2018 10:00pm andra design llc performance stock units : january 2017 altria group.
 granted aggregate 187886 performance stock units to eligible employees.
 payout performance stock units requires achievement of certain performance measures predetermined at time of grant over three-year performance cycle.
 performance measures consist of altria group. adjusted diluted earnings per share ( compounded annual growth rate. total shareholder return relative to predetermined peer group.
 performance stock units subject to forfeiture if employment conditions not met.
 at december 31 , 2017 altria group.
 170755 performance stock units remaining weighted-average grant date fair value of $ 70. 39 per performance stock unit.
 fair value performance stock units at date of grant net of estimated forfeitures amortized to expense over performance period.
 altria group.
 recorded pre-tax compensation expense related to performance stock units for year ended december 31 , 2017 of $ 6 million.
 unamortized compensation expense related to altria group. performance stock units was $ 7 million at december 31 , 2017.
 altria group.
 not grant performance stock units during 2016 and 2015.
 12.
 earnings per share basic and diluted eps calculated following:.
 net earnings attributable to altria group , inc.
 $ 10222 $ 14239 $ 5241 less : distributed and undistributed earnings attributable to share-based awards ( 14 ) ( 24 ) ( 10 ) earnings for basic and diluted eps $ 10208 $ 14215 $ 5231 weighted-average shares for basic and diluted eps 1921 1952 1961

( in millions )                                                                  | for the years ended december 31 , 2017 | for the years ended december 31 , 2016 | for the years ended december 31 , 2015
-------------------------------------------------------------------------------- | -------------------------------------- | -------------------------------------- | --------------------------------------
net earnings attributable to altria group inc .                                  | $ 10222                                | $ 14239                                | $ 5241
less : distributed and undistributed earnings attributable to share-based awards | -14 ( 14 )                             | -24 ( 24 )                             | -10 ( 10 )
earnings for basic and diluted eps                                               | $ 10208                                | $ 14215                                | $ 5231
weighted-average shares for basic and diluted eps                                | 1921                                   | 1952                                   | 1961


global business , many transactions and calculations where ultimate tax outcome uncertain.
 some uncertainties arise as consequence of cost reimbursement arrangements among related entities.
 although company believes estimates reasonable , no assurance can be given that final tax outcome not different than reflected in historical income tax provisions accruals.
 such differences could material impact on company 2019s income tax provision and operating results in period determination made.
 on november 4 , 2007 ( first day of 2008 fiscal year ) company adopted new accounting principles on accounting for uncertain tax positions.
 these principles require companies to determine whether 201cmore likely not tax position will be sustained upon examination by appropriate taxing authorities before benefit recorded in financial statements.
 uncertain income tax position not recognized if less than 50% ( 50 % ) likelihood of being sustained.
 no changes to company 2019s liabilities for uncertain tax positions result of adoption of these provisions.
 as of october 30 , 2010 and october 31 , 2009 , company had liability of $ 18. 4 million and $ 18. 2 million , respectively for gross unrealized tax benefits, if settled in company 2019s favor , would lower company 2019s effective tax rate in period recorded.
 in addition as of october 30 , 2010 and october 31 , 2009  company had liability of approximately $ 9. 8 million and $ 8. 0 million , respectively for interest and penalties.
 total liability as of october 30 , 2010 and october 31 , 2009 of $ 28. 3 million and $ 26.2 million , for uncertain tax positions classified as non-current  included in other non-current liabilities  because company believes ultimate payment or settlement of liabilities not occur within next twelve months.
 prior to adoption of these provisions these amounts included in current income tax payable.
 company includes interest and penalties related to unrecognized tax benefits within provision for taxes in condensed consolidated statements of income no change in classification made upon adopting these provisions.
 condensed consolidated statements of income for fiscal years 2010 , 2009 and 2008 include $ 1. 8 million, $ 1. 7 million and $ 1. 3 million  of interest and penalties related to these uncertain tax positions.
 due to complexity associated with tax uncertainties company cannot make reliable estimate period in expects to settle liabilities associated with these uncertain tax positions.
 following table summarizes changes in total amounts of uncertain tax positions for fiscal 2008 through fiscal 2010.
 fiscal years 2004 and 2005 irs examination during fourth quarter of fiscal 2007  irs completed field examination of company 2019s fiscal years 2004 and 2005.
 on january 2 , 2008  irs issued report for fiscal 2004 and 2005  included proposed adjustments related to these two fiscal years.
 company recorded taxes and penalties related to certain these proposed adjustments.
 four items with additional potential total tax liability of $ 46 million.
 company concluded based on discussions with tax advisors these four items not likely to result in additional tax liability.
 company not recorded additional tax liability for these items appealing these proposed adjustments through normal processes for resolution of differences between irs and taxpayers.
 company 2019s initial meetings with appellate division of irs held during fiscal analog devices , inc.
 notes consolidated financial statements 2014 continued

balance november 3 2007             | $ 9889
----------------------------------- | -------
additions for tax positions of 2008 | 3861
balance november 1 2008             | 13750
additions for tax positions of 2009 | 4411
balance october 31 2009             | 18161
additions for tax positions of 2010 | 286
balance october 30 2010             | $ 18447


notes to consolidated financial statements.
 morgan chase & co.
 98.
 morgan chase.
 / 2003 annual report securities financing activities jpmorgan chase enters into resale repurchase agreements securities borrowed securities loaned transactions to finance firm 2019s inventory positions  acquire securities to cover short positions settle other securities obligations.
 firm enters into transactions to accommodate customers 2019 needs.
 securities purchased under resale agreements ( 201cresale agreements 201d ) and securities sold under repurchase agreements ( 201d ) treated as collateralized financing transactions carried on consolidated bal- ance sheet at amounts securities be subsequently sold or repurchased plus accrued interest.
 where appropriate resale and repurchase agreements with same counterparty reported on net basis in accordance with fin 41.
 jpmorgan chase takes possession of securities purchased under resale agreements.
 daily basis monitors market value of underlying collateral received from counterparties of. s.
 non-u. s.
 govern- ment and agency securities requests additional collateral when necessary.
 similar transactions not meet sfas 140 definition of repurchase agreement accounted for as 201cbuys 201d and 201csells 201d rather than financing transactions.
 transactions accounted for as purchase ( sale ) of underlying securities with forward obligation to sell ( purchase ) securities.
 forward purchase ( sale ) obligation  derivative recorded on consolidated balance sheet at fair value  changes in fair value recorded in trading revenue.
 notional amounts of these transactions accounted for as purchases under sfas 140 were $ 15 billion and $ 8 billion at december 31 , 2003 and 2002  respectively.
amounts transactions accounted for as sales under sfas 140 were $ 8 billion and $ 13 billion at december 31 , 2003 and 2002  respectively.
 based on short-term duration contracts unrealized gain or loss insignificant.
 securities borrowed and lent recorded at cash collateral advanced or received.
 securities bor- rowed consist primarily of government and equity securities.
 jpmorgan chase monitors market value of securities borrowed and lent daily calls for additional col- lateral when appropriate.
 fees received or paid recorded in interest income or interest expense.
 jpmorgan chase pledges financial instruments to collateralize repurchase agreements and other securities financ ings.
 pledged securities can be sold or repledged by secured party identified as financial instruments owned ( pledged to parties on consolidated balance sheet.
 at december 31 , 2003 firm had received securities as col- lateral be repledged delivered used with fair value of approximately $ 210 billion.
 collateral obtained under resale or securities-borrowing agreements.
 approximately $ 197 billion repledged , delivered or used generally as collateral under repur- chase agreements securities-lending agreements or cover short sales.
 consolidated financial statements.
 morgan chase & co.
 loans reported at principal amount outstanding net of allowance for loan losses unearned income and net deferred loan fees.
 loans held for sale carried at lower of aggregate cost or fair value.
 loans classified as 201ctrading 201d for secondary market trading activities where positions bought and sold to make profits from short-term movements in price.
 loans held for trading purposes included in trading assets carried at fair value gains and losses included in trading revenue.
interest income recognized using interest method  or basis approximating level rate of return over term loan.
 nonaccrual loans are those accrual of interest discontinued.
 loans ( other than certain consumer loans discussed below ) placed on nonaccrual status immediately if management full payment of principal or interest in doubt or when principal or interest 90 days or more past due and collateral  insufficient to cover prin- cipal and interest.
 interest accrued but not collected at date loan placed on nonaccrual status reversed against interest income.
 amortization of net deferred loan fees suspended.
 interest income on nonaccrual loans recognized only to extent received in cash.
 where doubt regarding ultimate collectibility of loan principal , all cash received applied to reduce carrying value of loan.
 loans restored to accrual status only when interest and principal payments brought current and future payments reasonably assured.
 consumer loans charged to allowance for loan losses upon reaching specified stages of delinquency in accor- dance with federal financial institutions examination council ( 201cffiec 201d ) policy.
 for credit card loans charged off at earlier of 180 days past due or within 60 days from notification of filing of bankruptcy.
 residential mortgage products charged off to net realizable value at 180 days past due.
 other consumer products charged off to net realizable value if collateralized ) at 120 days past due.
 accrued interest on residential mortgage products , automobile financings and certain other consumer loans accounted for in accordance with nonaccrual loan policy note 11

december 31 ( in millions )                  | 2003     | 2002
-------------------------------------------- | -------- | --------
securities purchased under resale agreements | $ 62801  | $ 57645
securities borrowed                          | 41834    | 34143
securities sold under repurchase agreements  | $ 105409 | $ 161394
securities loaned                            | 2461     | 1661


revenue per car 2010 2009 2008 % ( % ) change 2010 v 2009.
 agricultural products 2013 higher volume  fuel surcharges price improvements increased agricultural freight revenue in 2010 versus 2009.
 increased shipments from midwest to export ports pacific northwest heightened demand in mexico drove higher corn and feed grain shipments 2010.
 increased corn feed grain shipments into ethanol plants in california idaho growth in ethanol shipments contributed to increase.
 2009 some ethanol plants ceased operations due to lower ethanol margins contributed to favorable year-over-year comparison.
 strong export demand for u. s.
 wheat via gulf ports increased shipments of wheat food grains compared 2009.
 declines in domestic wheat food shipments offset growth in export shipments.
 new business in feed and animal protein shipments increased agricultural shipments 2010 2009.
 lower volume fuel surcharges decreased agricultural freight revenue 2009 versus 2008.
 price improvements offset declines.
 lower demand in export domestic markets led to fewer shipments of corn and feed grains down 11% ( 11 % ) in 2009 compared to 2008.
 weaker worldwide demand reduced export shipments of wheat food grains 2009 versus 2008.
 automotive 2013 37% ( 37 % ) and 24% ( 24 % ) increases in shipments of finished vehicles automotive parts in 2010 core pricing gains fuel surcharges improved automotive freight revenue from weak 2009 levels.
 economic conditions 2009 led to poor auto sales reduced vehicle production reduced shipments of finished vehicles parts declines in shipments finished vehicles auto parts lower fuel surcharges reduced freight revenue 2009 compared 2008.
 vehicle shipments down 35% ( 35 % ) parts down 24% ( 24 % ).
 core pricing gains partially offset declines.
volume declines resulted from economic conditions reduced sales vehicle production.
 two major domestic automotive manufacturers declared bankruptcy in second quarter of 2009 , affecting production levels.
 although federal car allowance rebate system ( 201ccash for clunkers 201d program ) helped stimulate vehicle sales shipments in third quarter 2009, production cuts soft demand year offset program 2019s benefits.
 2010 agricultural revenue 2010 automotive revenue

average revenue per car | 2010   | 2009   | 2008   | % (  % ) change 2010 v 2009 | % (  % ) change 2009 v 2008
----------------------- | ------ | ------ | ------ | --------------------------- | ---------------------------
agricultural            | $ 3286 | $ 3080 | $ 3352 | 7% ( 7 % )                  | ( 8 ) % (  % )
automotive              | 2082   | 1838   | 2017   | 13                          | -9 ( 9 )
chemicals               | 2874   | 2761   | 2818   | 4                           | -2 ( 2 )
energy                  | 1697   | 1543   | 1622   | 10                          | -5 ( 5 )
industrial products     | 2461   | 2388   | 2620   | 3                           | -9 ( 9 )
intermodal              | 974    | 896    | 955    | 9                           | -6 ( 6 )
average                 | $ 1823 | $ 1718 | $ 1848 | 6% ( 6 % )                  | ( 7 ) % (  % )


westrock company notes to consolidated financial statements table summarizes weighted average life allocation to intangible assets recognized in mps acquisition , excluding goodwill ( in millions ) : weighted avg.
 amounts recognized as acquisition.
 none of intangibles has significant residual value.
 amortizing customer relationship intangibles over estimated useful lives from 13 to 16 years straight-line basis because amortization pattern not reliably determinable.
 star pizza acquisition on march 13, 2017  completed star pizza acquisition.
 transaction provided leadership position in fast growing small-run pizza box market increases vertical integration.
 purchase price was $ 34. 6 million , net of $ 0. 7 million working capital settlement.
 fully integrated approximately 22000 tons of containerboard used by star pizza annually.
 included financial results of acquired assets since date acquisition in corrugated packaging segment.
 purchase price allocation for acquisition primarily included $ 24. 8 million of customer relationship intangible assets and $ 2. 2 million of goodwill.
 amortizing customer relationship intangibles over 10 years straight-line basis because amortization pattern not reliably determinable.
 fair value assigned to goodwill primarily attributable to buyer-specific synergies expected arise after acquisition (. enhanced reach of combined organization other synergies ) assembled work force.
 goodwill and intangibles are amortizable for income tax purposes.
 packaging acquisition on january 19 , 2016  completed packaging acquisition.
 entities acquired provide value-added folding carton and litho-laminated display packaging solutions.
 purchase price was $ 94. 1 million , net of cash received of $ 1. 7 million , working capital settlement $ 3. 5 million escrow receipt in first quarter of fiscal 2017.
transaction subject to election under section 338 ( h ) ( 10 ) of code increases u. s.
 tax basis in acquired u. s.
 entities.
 believe transaction provided us with attractive complementary customers , markets facilities.
 included financial results of acquired entities since date acquisition in consumer packaging segment.
 purchase price allocation for acquisition included $ 55. 0 million of property , plant and equipment , $ 10. 5 million of customer relationship intangible assets , $ 9. 3 million of goodwill $ 25. 8 million of liabilities , including $ 1. 3 million of debt.
 amortizing customer relationship intangibles over estimated useful lives from 9 to 15 years based on straight-line basis because amortization pattern not reliably determinable.
 fair value assigned to goodwill attributable to buyer-specific synergies expected after acquisition (. enhanced reach of combined organization other synergies ) assembled work force.
 goodwill and intangibles of u. s.
 entities amortizable for income tax purposes.
 sp fiber on october 1, 2015 completed sp fiber acquisition in stock purchase.
 transaction included acquisition of mills in dublin , ga and newberg , or, produce lightweight recycled containerboard and kraft and bag paper.
 newberg mill produced newsprint.
 part of transaction acquired sp fiber's 48% ( 48 % ) interest in gps.
 gps is joint venture providing steam to dublin mill and electricity to georgia power.
 purchase price was $ 278. 8 million , net of cash received of $ 9. 2 million and working capital

| weighted avg.life | amountsrecognized as ofthe acquisitiondate
------------------------- | ----------------- | ------------------------------------------
customer relationships    | 14.6              | $ 1008.7
trademarks and tradenames | 3.0               | 15.2
photo library             | 10.0              | 2.5
total                     | 14.4              | $ 1026.4


company recognizes effect of income tax positions only if sustaining positions more likely than not.
 changes in recognition or measurement reflected in period change in judgment occurs.
 company records penalties and interest related to unrecognized tax benefits in income taxes in company 2019s consolidated statements of income.
 changes in accounting principles business combinations noncontrolling interests on january 1 , 2009  company adopted revised principles related to business combinations and noncontrolling interests.
 revised principle on business combinations applies to all transactions or events in entity obtains control over one or more businesses.
 requires acquirer to recognize assets acquired liabilities assumed noncontrolling interest in acquiree at acquisition date, measured at fair values date.
 business combinations achieved in stages require recognition of identifiable assets and liabilities noncontrolling interest in acquiree , at full amounts of fair values when control is obtained.
 revision changes requirements for recognizing assets acquired and liabilities assumed arising from contingencies requires direct acquisition costs to be expensed.
 provides changes to income tax accounting for business combinations apply to both new and previously existing business combinations.
 in april 2009  additional guidance issued revised business combination guidance related to accounting for contingent liabilities assumed in business combination.
 company adopted this guidance in conjunction with adoption of revised principles related to business combinations.
 adoption of revised principles business combinations not material impact on consolidated financial statements.
 revised principle related to noncontrolling interests establishes accounting and reporting standards for noncontrolling interests in subsidiary and for deconsolidation of subsidiary.
revised principle clarifies noncontrolling interest in subsidiary is ownership interest in consolidated entity should be reported as separate component of equity in consolidated statements financial position.
 revised principle requires retrospective adjustments for all periods of stockholders 2019 equity and net income for noncontrolling interests.
 to financial reporting changes principle provides for significant changes in accounting related to changes in ownership of noncontrolling interests.
 changes in controlling financial interests in consolidated subsidiaries not result in loss of control accounted for as equity transactions similar to treasury stock transactions.
 if change in ownership of consolidated subsidiary results in loss of control and deconsolidation retained ownership interests are remeasured at fair value with gain or loss reported in net income.
 previous periods noncontrolling interests for operating subsidiaries reported in other general expenses in consolidated statements of income.
 prior period amounts restated to conform to current year 2019s presentation.
 principal effect on prior years 2019 balance sheets related to adoption of new guidance related to noncontrolling interests summarized ( in millions ).
 revised principle requires net income adjusted to include net income attributable to noncontrolling interests and new separate caption for net income attributable to aon stockholders presented in consolidated statements of income.
 adoption of new guidance increased net income by $ 16 million and $ 13 million for 2008 and 2007.

as of december 31                                          | 2008   | 2007
---------------------------------------------------------- | ------ | ------
equity as previously reported                              | $ 5310 | $ 6221
increase for reclassification of non-controlling interests | 105    | 40
equity as adjusted                                         | $ 5415 | $ 6261


table details cash capital investments for years ended december 31 , 2006 , 2005 2004.
 millions of dollars 2006 2005 2004.
 in 2007  expect total capital investments to be approximately $ 3. 2 billion  may include long- term leases.
 investments used to maintain track structures continue capacity expansions on main lines corridors remove bottlenecks upgrade augment equipment customer needs build improve facilities terminals develop implement new technologies.
 designed investments to maintain infrastructure for safety enhance customer service promote growth improve operational fluidity.
 expect to fund 2007 cash capital investments through cash generated from operations , sale or lease of operating and non-operating properties cash on hand at december 31 , 2006.
 expect these sources continue provide sufficient funds to meet expected capital requirements for 2007.
 for years ended december 31 , 2006  2005 2004  ratio of earnings to fixed charges was 4. 4 , 2. 9 , 2. 1 ,.
 increases in 2006 and 2005 driven by higher net income.
 ratio of earnings to fixed charges computed on consolidated basis.
 earnings represent income from continuing operations less equity earnings net of distributions plus fixed charges and income taxes.
 fixed charges represent interest charges  amortization of debt discount  estimated amount representing interest portion of rental charges.
 see exhibit 12 for calculation of ratio of earnings to fixed charges.
 financing activities credit facilities 2013 on december 31 , 2006  had $ 2 billion in revolving credit facilities available including $ 1 billion under five-year facility expiring in march 2009 and $ 1 billion under five-year facility expiring in march 2010 "facilities" ).
 facilities designated for general corporate purposes support issuance of commercial paper.
 neither facilities drawn on in 2006.
commitment fees interest rates payable under facilities similar to fees rates comparably rated investment-grade borrowers.
 facilities allow for borrowings at floating rates based on london interbank offered rates plus spread  depending upon senior unsecured debt ratings.
 facilities require maintenance of minimum net worth debt to net worth coverage ratio.
 at december 31 , 2006 in compliance with these covenants.
 facilities not include other financial restrictions credit rating triggers rating-dependent pricing other provision require posting of collateral.
 in addition to revolving credit facilities had $ 150 million in uncommitted lines of credit available including $ 75 million expires in march 2007 $ 75 million expiring in may 2007.
 neither of lines of credit used as of december 31 , 2006.
 must have equivalent credit available under five-year facilities to draw on these $ 75 million lines.
 dividends 2013 on january 30 , 2007 increased quarterly dividend to $ 0. 35 per share  payable beginning april 2, 2007 to shareholders of record on february 28 , 2007.
 expect to fund increase in quarterly dividend through cash from operations sale or lease of operating non-operating properties cash on hand at december 31 , 2006.
 dividend restrictions 2013 subject to certain restrictions related to payment of cash dividends to shareholders due to minimum net worth requirements under credit facilities.
 retained earnings available

millions of dollars                | 2006   | 2005   | 2004
---------------------------------- | ------ | ------ | ------
track                              | $ 1487 | $ 1472 | $ 1328
capacity and commercial facilities | 510    | 509    | 347
locomotives and freight cars       | 135    | 98     | 125
other                              | 110    | 90     | 76
total                              | $ 2242 | $ 2169 | $ 1876


entergy corporation subsidiaries notes financial statements rate 2. 04% ( 2. 04 % ).
 principal amount not due until date given in tables above entergy louisiana investment recovery funding expects make principal payments on bonds over next five years amounts $ 21. 7 million for 2017 , $ 22. 3 million for 2018 , $ 22. 7 million for 2019 , $ 23. 2 million for 2020  $ 11 million for 2021.
 proceeds entergy louisiana investment recovery funding purchased from entergy louisiana investment recovery property  right to recover from customers through investment recovery charge amounts sufficient to service bonds.
 accordance financing order entergy louisiana apply proceeds from sale investment recovery property as reimbursement for previously-incurred investment recovery costs.
 investment recovery property reflected as regulatory asset on consolidated entergy louisiana balance sheet.
 creditors of entergy louisiana not have recourse to assets or revenues of entergy louisiana investment recovery funding  including investment recovery property creditors entergy louisiana investment recovery funding not recourse assets revenues entergy louisiana.
 entergy louisiana has no payment obligations to entergy louisiana investment recovery funding except remit investment recovery charge collections.
 entergy new orleans securitization bonds - hurricane isaac may 2015 city council issued financing order authorizing issuance of securitization bonds to recover entergy new orleans 2019s hurricane isaac storm restoration costs of $ 31. 8 million  including carrying costs costs of funding replenishing storm recovery reserve amount $ 63. 9 million  approximately $ 3 million up-front financing costs associated with securitization.
 july 2015  entergy new orleans storm recovery funding i. company wholly owned consolidated by entergy new orleans issued $ 98.7 million storm cost recovery bonds.
 bonds have coupon of 2. 67% ( 2. % ).
 principal amount not due until date given in tables above entergy new orleans storm recovery funding expects make principal payments on bonds over next five years amounts $ 10. 6 million for 2017 , $ 11 million for 2018 , $ 11. 2 million for 2019  $ 11. 6 million for 2020  $ 11. 9 million for 2021.
 proceeds entergy new orleans storm recovery funding purchased from entergy new orleans storm recovery property  right to recover from customers through storm recovery charge amounts sufficient to service securitization bonds.
 storm recovery property reflected as regulatory asset on consolidated entergy new orleans balance sheet.
 creditors of entergy new orleans not have recourse to assets or revenues of entergy new orleans storm recovery funding including storm recovery property creditors recourse assets revenues entergy new orleans.
 entergy new orleans has no payment obligations to entergy new orleans storm recovery funding except remit storm recovery charge collections.
 entergy texas securitization bonds - hurricane rita april 2007 puct issued financing order authorizing issuance securitization bonds to recover $ 353 million of entergy texas 2019s hurricane rita reconstruction costs up to $ 6 million transaction costs offset by $ 32 million related deferred income tax benefits.
 june 2007  entergy gulf states reconstruction funding i , llc  company now wholly-owned consolidated by entergy texas issued $ 329. 5 million senior secured transition bonds ( securitization bonds ) amount ( in thousands ).

| amount ( in thousands )
------------------------------------------------- | -----------------------
senior secured transition bonds series a:         |
tranche a-1 ( 5.51% ( 5.51 % ) ) due october 2013 | $ 93500
tranche a-2 ( 5.79% ( 5.79 % ) ) due october 2018 | 121600
tranche a-3 ( 5.93% ( 5.93 % ) ) due june 2022    | 114400
total senior secured transition bonds             | $ 329500


pension expense.
 ) effective in 2016  company began to measure service cost interest cost components by applying spot rates along yield curve to relevant projected cash flows provides better measurement of costs.
 company accounted for this as change in accounting estimate for on prospective basis.
 change not affect measurement total benefit obligation.
 2016 vs.
 2015 pension expense , excluding special items decreased from prior year due to adoption of spot rate approach reduced service cost interest cost impact from expected return on assets demographic gains partially offset by impact adoption of new mortality tables for major plans.
 special items of $ 7. 3 included pension settlement losses of $ 6. 4  special termination benefits of $ 2. 0  curtailment gains of $ 1. 1.
 resulted from recent business restructuring and cost reduction actions.
 2015 vs.
 2014 decrease in pension expense  excluding special items due to impact from expected return on assets  40 bp reduction in weighted average compensation increase assumption  lower service cost and interest cost.
 decrease partially offset by impact of higher amortization of actuarial losses resulted primarily from 60 bp decrease in weighted average discount rate.
 special items of $ 35. 2 included pension settlement losses of $ 21. 2  special termination benefits of $ 8. 7 , curtailment losses of $ 5. 3.
 resulted from recent business restructuring cost reduction actions.
 2017 outlook in 2017 pension expense , excluding special items  estimated to be approximately $ 70 to $ 75 , increase of $ 10 to $ 15 from 2016  resulting primarily from decrease in discount rates  offset by favorable asset experience  effects of versum spin-off adoption of new mortality tables.
pension settlement losses $ 10 to $ 15 expected dependent on timing retirements.
 in 2017  expect pension expense to include approximately $ 164 for amortization of actuarial losses compared to $ 121 in 2016.
 net actuarial losses of $ 484 recognized in accumulated comprehensive income in 2016 primarily attributable to lower discount rates improved mortality projections.
 actuarial gains/losses amortized into pension expense over prospective periods not offset by future gains or losses.
 future changes in discount rate actual returns on plan assets different from expected returns impact actuarial gains/losses and amortization in years beyond 2017.
 during first quarter of 2017 company expects to record curtailment loss estimated $ 5 to $ 10 related to employees transferring to versum.
 loss reflected in results from discontinued operations on consolidated income statements.
 continue evaluate opportunities to manage liabilities associated with pension plans.
 pension funding funding includes contributions to funded plans and benefit payments for unfunded plans primarily non-qualified plans.
 funding policy is contributions combined with appreciation earnings sufficient to pay benefits without creating unnecessary surpluses.
 make contributions to satisfy legal funding requirements while managing capacity to benefit from tax deductions attributable to plan contributions.
 with assistance third party actuaries analyze liabilities demographics of each plan guide level of contributions.
 during 2016 and 2015  cash contributions to funded plans and benefit payments for unfunded plans were $ 79. 3 and $ 137. 5  respectively.
 for 2017  cash contributions to defined benefit plans estimated to be $ 65 to $ 85.
 estimate based on expected contributions to certain international plans and anticipated benefit payments for unfunded plans

| 2016           | 2015           | 2014
-------------------------------------------------------------------- | -------------- | -------------- | --------------
pension expense                                                      | $ 68.1         | $ 135.6        | $ 135.9
special terminations settlements and curtailments ( included above ) | 7.3            | 35.2           | 5.8
weighted average discount rate ( a )                                 | 4.1% ( 4.1 % ) | 4.0% ( 4.0 % ) | 4.6% ( 4.6 % )
weighted average expected rate of return on plan assets              | 7.5% ( 7.5 % ) | 7.4% ( 7.4 % ) | 7.7% ( 7.7 % )
weighted average expected rate of compensation increase              | 3.5% ( 3.5 % ) | 3.5% ( 3.5 % ) | 3.9% ( 3.9 % )


table 46 : allowance for loan lease losses.
 includes charge-offs of $ 134 million alignment with interagency guidance on practices for loans lines of credit related consumer lending in first quarter of 2013.
 provision for credit losses totaled $ 643 million for 2013 compared to $ 987 million for 2012.
 primary driver of decrease was improved credit quality improved commercial loan risk factors lower consumer loan delinquencies improvements in expected cash flows for purchased impaired loans.
 2013 provision for commercial lending credit losses decreased by $ 102 million or 74% ( 74 % ) from 2012.
 provision for consumer lending credit losses decreased $ 242 million or 29% ( 29 % ) from 2012.
 december 31 , 2013 total nonperforming loans was 117% ( 117 % ).
 comparable amount for december 31  2012 was 124% ( 124 % ).
 ratios are 72% ( 72 % ) and 79% ( 79 % ) respectively excluding $ 1. 4 billion and $ 1. 5 billion  of alll at december 31 , 2013 december 31 2012 allocated to consumer loans lines of credit not secured by residential real estate purchased impaired loans.
 excluded consumer loans lines of credit not secured by real estate charged off after 120 to 180 days past due not on nonperforming status.
 excluded purchased impaired loans considered performing regardless of delinquency status as interest accreted based on estimate expected cash flows additional allowance recorded when cash flows below recorded investment.
 see table 35 credit risk management section for additional information.
 alll balance increases or decreases across periods in relation to fluctuating risk factors asset quality trends charge-offs changes in aggregate portfolio balances.
during 2013 , improving asset quality trends  including delinquency status improving economic conditions  realization of previously estimated losses through charge-offs  impact of alignment with interagency guidance overall portfolio growth  result in alll balance declining $. 4 billion , or 11% ( 11 % ) to $ 3. 6 billion as of december 31 , 2013 compared to december 31 , 2012.
 see note 7 allowances for loan and lease losses unfunded loan commitments letters of credit note 6 purchased loans in notes to consolidated financial statements in item 8 of report regarding changes in alll allowance for unfunded loan commitments letters of credit.
 operational risk management operational risk is risk of loss from inadequate or failed internal processes systems human factors external events.
 includes losses non- compliance with laws or regulations  failure to fulfill fiduciary responsibilities litigation or other legal actions.
 operational risk may occur in any business activities manifests itself in various ways including : 2022 transaction processing errors 2022 unauthorized transactions fraud by employees third parties 2022 material disruption in business activities 2022 system breaches misuse of sensitive information 2022 regulatory or governmental actions fines or penalties 2022 significant legal expenses  judgments or settlements.
 pnc 2019s operational risk management is inclusive of technology risk management  compliance business continuity risk.
 operational risk management focuses on balancing business needs  regulatory expectations risk management priorities through adaptive proactive program designed to provide strong governance model  sound consistent risk management processes transparent operational risk reporting across enterprise.
 pnc board determines strategic approach to operational risk via establishment of operational risk appetite appropriate risk management structure.
 includes establishment of risk metrics limits reporting structure to identify understand manage operational risks.
executive management responsibility for operational risk management.
 executive management team responsible monitoring significant risks key controls related issues through management reporting governance structure of risk committees sub-committees.
 risk management operational risk management functions responsible for developing maintaining 84 pnc financial services group , inc.
 2013 form 10-k

dollars in millions                                                         | 2013             | 2012
--------------------------------------------------------------------------- | ---------------- | ----------------
january 1                                                                   | $ 4036           | $ 4347
total net charge-offs                                                       | -1077 ( 1077 )   | -1289 ( 1289 )
provision for credit losses                                                 | 643              | 987
net change in allowance for unfunded loan commitments and letters of credit | 8                | -10 ( 10 )
other                                                                       | -1 ( 1 )         | 1
december 31                                                                 | $ 3609           | $ 4036
net charge-offs to average loans ( for the year ended ) ( a )               | .57% ( .57 % )   | .73% ( .73 % )
allowance for loan and lease losses to total loans                          | 1.84             | 2.17
commercial lending net charge-offs                                          | $ -249 ( 249 )   | $ -359 ( 359 )
consumer lending net charge-offs                                            | -828 ( 828 )     | -930 ( 930 )
total net charge-offs                                                       | $ -1077 ( 1077 ) | $ -1289 ( 1289 )
net charge-offs to average loans ( for the year ended )                     |                  |
commercial lending                                                          | .22% ( .22 % )   | .35% ( .35 % )
consumer lending ( a )                                                      | 1.07             | 1.24


entergy corporation subsidiaries management's financial discussion analysis income ( deductions ) changed from $ 47. 6 million in 2002 to ( $ 36. 0 million ) in 2003 due to decrease in "miscellaneous - net" $ 107. 7 million accrual in second quarter of 2003 loss associated with final non decision disallowing abeyed river bend plant costs.
 see note 2 to consolidated financial statements for details river bend abeyed plant costs.
 decrease partially offset by increase in interest dividend income implementation of sfas 143.
 interest on long-term debt decreased from $ 462. 0 million in 2002 to $ 433. 5 million in 2003 due to redemption refinancing of long-term debt.
 non-utility nuclear key performance measures for-utility nuclear.
 2004 compared to 2003 decrease in earnings for non-utility nuclear from $ 300. 8 million to $ 245. 0 million due to $ 154. 5 million net-of-tax cumulative effect of change in accounting principle increased earnings in first quarter of 2003 upon implementation of sfas 143.
 see "critical accounting estimates - sfas 143" for discussion implementation sfas 143.
 earnings before cumulative effect of accounting change increased by $ 98. 7 million due to : 2022 lower operation maintenance expenses decreased from $ 681. 8 million in 2003 to $ 595. 7 million in 2004 from charges recorded in 2003 with voluntary severance program ; 2022 higher revenues increased from $ 1. 275 billion in 2003 to $ 1. 342 billion in 2004 from higher contract pricing.
addition of support services contract for cooper nuclear station increased generation in 2004 due to power uprates completed 2003 fewer planned unplanned outages 2004 contributed to higher revenues ; 2022 miscellaneous income from reduction in decommissioning liability for plant  discussed in note 8 to consolidated financial statements.
 partially offsetting increase were 2022 higher income taxes increased from $ 88. 6 million in 2003 to $ 142. 6 million in 2004 ; 2022 higher depreciation expense increased from $ 34. 3 million in 2003 to $ 48. 9 million in 2004 due to additions to plant in service.
 2003 compared to 2002 increase in earnings for non-utility nuclear from $ 200. 5 million to $ 300. 8 million primarily due to $ 154. 5 million net-of-tax cumulative effect of change in accounting principle recognized in first quarter of 2003 upon implementation of sfas 143.
 see "critical accounting estimates - sfas 143" for discussion implementation sfas 143.
 income before cumulative effect accounting change decreased by $ 54. 2 million.
 decrease primarily due to $ 83. 0 million ( $ 50. 6 million net-of-tax ) of charges voluntary severance program.
 operation and maintenance expenses in 2003 per mwh of generation in line with 2002 operation maintenance.

| 2004         | 2003         | 2002
---------------------------------- | ------------ | ------------ | ------------
net mw in operation at december 31 | 4058         | 4001         | 3955
average realized price per mwh     | $ 41.26      | $ 39.38      | $ 40.07
generation in gwh for the year     | 32524        | 32379        | 29953
capacity factor for the year       | 92% ( 92 % ) | 92% ( 92 % ) | 93% ( 93 % )


customer demand.
 compared with 555000 tons total downtime in 2006 150000 tons related to lack-of-orders.
 printing papers in millions 2007 2006 2005.
 north american printing papers net sales in 2007 were $ 3. 5 billion compared with $ 4. 4 billion in 2006 (. 5 excluding coated super- calendered papers business and $ 4. 8 billion in 2005 ( $ 3. 2 billion excluding super business.
 sales volumes decreased in 2007 versus 2006 due to reduced production capacity from conversion of paper machine at pensacola mill to production lightweight linerboard for industrial packaging segment.
 average sales price realizations increased reflecting benefits from price increases 2007.
 lack-of-order downtime declined to 27000 tons in 2007 from 40000 tons in 2006.
 operating earnings of $ 537 million in 2007 increased from $ 482 million in 2006 ( $ 407 million excluding coated supercalendered papers business ) and $ 175 million in 2005 ( $ 74 million excluding coated supercalendered papers business.
 benefits from improved average sales price realizations offset effects of higher input costs for wood  energy  freight.
 mill operations favorable prior year due to improvements in machine performance and energy conservation efforts.
 sales volumes for first quarter of 2008 expected to increase slightly mix of prod- ucts sold improve.
 demand for printing papers in north america steady.
 price increases for cut-size paper and roll stock announced expected effective late in first quarter.
 planned mill maintenance outage costs should same as in fourth quarter raw material costs expected to continue increase primarily for wood and energy.
 brazil ian papers net sales for 2007 of $ 850 mil- lion higher than $ 495 million in 2006 and $ 465 million in 2005.
compared with 2006 aver- age sales price realizations improved reflecting price increases for uncoated freesheet paper realized second half 2006 first half 2007.
 excluding impact luiz antonio acquisition sales volumes increased for cut size offset paper.
 operating profits for 2007 of $ 246 mil- lion up from $ 122 million in 2006 $ 134 mil- lion in 2005 benefits from higher sales prices favorable manufacturing costs parti ally offset by higher input costs.
 contributions luiz antonio acquisition increased net sales by $ 350 million earnings $ 80 million in 2007.
 entering 2008 sales volumes for uncoated freesheet paper and pulp should be seasonally lower.
 average price realizations flat mar gins expected reflect less favorable product mix.
 energy costs primarily for hydroelectric power expected to increase reflecting lack of rainfall in brazil latter part 2007.
 european papers net sales in 2007 were $ 1. 5 bil- lion compared with $ 1. 3 billion in 2006 $ 1. 2 bil- lion in 2005.
 sales volumes in 2007 higher than 2006 at eastern european mills reflecting stronger market demand improved efficiencies lower in western europe closure of marasquel mill in 2006.
 average sales price real- izations increased in 2007 in east- ern and western european markets.
 operating profits of $ 214 million in 2007 increased from loss of $ 16 million in 2006 earnings $ 88 million in 2005.
 loss in 2006 reflects impact of $ 128 million impairment charge to reduce carrying value of fixed assets at saillat, france mill.
 excluding charge improvement in 2007 reflects contribution from higher net sales partially offset by higher input costs for wood  energy freight.
to first quarter of 2008  sales volumes expected stable in western europe seasonally weaker in eastern europe russia.
 average price realizations expected remain flat.
 wood costs expected to increase especially in russia due to strong demand tariff increases energy costs anticipated seasonally higher.
 asian printing papers net sales approx- $ 20 million in 2007 compared with $ 15 mil- lion in 2006 $ 10 million in 2005.
 operating earnings increased slightly in 2007 close to breakeven in all periods.
. s.
 market pulp sales in 2007 totaled $ 655 mil- lion compared with $ 510 million and $ 525 million in 2006 2005 respectively.
 sales volumes in 2007 up from 2006 levels primarily for paper

in millions      | 2007   | 2006   | 2005
---------------- | ------ | ------ | ------
sales            | $ 6530 | $ 6700 | $ 6980
operating profit | $ 1101 | $ 636  | $ 434


printing papers demand for products corre- lated with changes in commercial printing advertising activity direct mail volumes uncoated cut-size products changes in white- collar employment levels affect usage of copy laser printer paper.
 pulp affected by changes in currency rates producers in regions.
 principal cost drivers include manufacturing efficiency raw material energy costs freight costs.
 pr int ing papers net sales for 2012 flat with 2011 increased 5% ( 5 % ) from 2010.
 operat- ing profits 2012 31% ( 31 % ) lower than 2011 25% ( 25 % ) higher than 2010.
 excluding facility closure costs impairment costs operating profits 2012 30% ( 30 % ) lower than 2011 25% ( 25 % ) lower than 2010.
 benefits from higher sales volumes ( $ 58 mil- lion ) offset by lower sales price real- izations unfavorable product mix ( $ 233 million ) higher operating costs ( $ 30 million ) higher maintenance outage costs ( $ 17 million ) higher input costs ( $ 32 million ) other items ( $ 6 million ).
 operating profits 2011 included $ 24 million gain related to repurposing of franklin , virginia mill fluff pulp $ 11 million impairment charge related to inverurie , scotland mill closed in 2009.
 printing.
 north american pr int ing papers net sales were $ 2. 7 billion in 2012 $ 2. 8 billion in 2011 $ 2. 8 billion in 2010.
 operating profits in 2012 were $ 331 million compared with $ 423 million ( $ 399 million excluding $ 24 million gain repurposing franklin , virginia mill in 2011 $ 18 million ( $ 333 million excluding facility clo- sure costs ) in 2010.
 sales volumes 2012 flat with 2011.
 average sales margins lower due to lower export sales prices higher export sales volume.
input costs higher for wood chemicals partially offset by lower purchased pulp costs.
 freight costs increased due to higher oil prices.
 manufacturing operating costs favorable reflecting strong mill performance.
 planned main- tenance downtime costs slightly higher in 2012.
 no market-related downtime taken in 2012 or 2011.
 first quarter of 2013 sales volumes expected to increase compared with fourth quar ter 2012 reflecting seasonally stronger demand.
 average sales price realizations expected flat for domestic export uncoated freesheet roll cutsize paper stable.
 input costs increase for energy chemicals wood.
 planned maintenance downtime costs expected about $ 19 million lower with outage at georgetown mill versus outages at courtland eastover mills in fourth quarter 2012.
 braz ian papers net sales for 2012 were $ 1. 1 bil- lion compared with $ 1. 2 billion in 2011 $ 1. 1 bil- lion in 2010.
 operating profits for 2012 were $ 163 million compared with $ 169 million in 2011 $ 159 million in 2010.
 sales volumes in 2012 higher than 2011 as international paper improved segment position in brazilian market despite weaker year-over-year conditions markets.
 average sales price realizations improved for domestic uncoated freesheet paper benefit offset by declining prices for exported paper.
 margins affected by increased proportion of sales to higher- margin domestic market.
 raw material costs increased for wood chemicals costs for purchased pulp decreased.
 operating costs planned maintenance downtime costs lower than 2011.
 2013 sales volumes in first quarter expected to lower than fourth quarter 2012 due to seasonally weaker customer demand for uncoated freesheet paper.
sales price realizations expected to increase in brazilian domestic market due to announced sales price increase for uncoated free- sheet paper  benefit partially offset by pricing pressures in export markets.
 average sales margins expected negatively impacted by less favorable geographic mix.
 input costs expected flat due to lower energy costs offset by higher costs for wood  purchased pulp chemicals utilities.
 planned maintenance outage costs should be $ 4 million lower with no outages scheduled in first quarter.
 operating costs favorably impacted by savings start-up new biomass boiler at mogi guacu mill.
 european papers net sales in 2012 were $ 1. 4 bil- lion compared with $ 1. 4 billion in 2011 $ 1. 3 bil- lion in 2010.
 operating profits in 2012 were $ 179 million compared with $ 196 million ( $ 207 million excluding asset impairment charges related ) in 2011 $ 197 million ( $ 199 million excluding asset impairment charge ) in 2010.
 sales volumes in 2012 compared 2011 higher for uncoated freesheet paper in europe and russia sales volumes for pulp lower in both regions.
 average sales price realizations for uncoated

in millions      | 2012   | 2011   | 2010
---------------- | ------ | ------ | ------
sales            | $ 6230 | $ 6215 | $ 5940
operating profit | 599    | 872    | 481


expected term 2014 company uses historical employee exercise option expiration data to estimate expected term assumption for black-scholes grant-date valuation.
 company believes historical data is best estimate of expected term of new option , generally employees exhibit similar exercise behavior.
 risk-free interest rate 2014 yield on zero-coupon u. s.
 treasury securities for period commensurate with expected term assumption is used as risk-free interest rate.
 expected dividend yield 2014 expected dividend yield calculated by annualizing cash dividend declared by company 2019s board of directors for current quarter dividing result by closing stock price on date of grant.
 until company 2019s board of directors declares cash dividend for amount different from current quarter 2019s cash dividend  current dividend used in deriving assumption.
 cash dividends not paid on options , restricted stock or restricted stock units.
 in connection with acquisition , company granted restricted stock awards to replace outstanding restricted stock awards of linear employees.
 restricted stock awards entitle recipients to voting nonforfeitable dividend rights from date of grant.
 stock-based compensation expensexp p amount of stock-based compensation expense recognized during period based on value of awards expected to vest.
 forfeitures estimated at time of grant revised  if necessary in subsequent periods if actual forfeitures differ from estimates.
 term 201cforfeitures 201d distinct from 201ccancellations 201d or 201cexpirations 201d represents only unvested portion of surrendered stock-based award.
 based on analysis of historical forfeitures company applied annual forfeitureff rate of 5. 0% ( 5. 0 % ) to all unvested stock-based awards as of november 2, 2019.
 analysis will re-evaluated quarterly forfeiture rate adjusted as necessary.
actual expense recognized over vesting period only for those awards that vest.
 total stock-based compensation expense recognized is as follows:.
 as of november 2 , 2019 and november 3 , 2018 , company capitalized $ 6. 8 million and $ 7. 1 million  of stock-based compensation in inventory.
 additional paid-in-capital ( apic ) pp poolp ) company adopted asu 2016-09 during fiscal 2018.
 asu 2016-09 eliminated apic pool requires excess tax benefits and tax deficiencies recorded in income statement when awards settled.
 adoption company recorded total excess tax benefits of $ 28. 7 million and $ 26. 2 million in fiscal 2019 and fiscal 2018 from stock-based compensation payments within income tax expense in consolidated statements of income.
 for fiscal 2017  apic pool represented excess tax benefits related to stock compensation available to absorb future tax deficiencies.
 if future tax deficiencies greater than available apic pool  company recorded excess as income tax expense in consolidated statements of income.
 for fiscal 2017  company had sufficient apic pool to cover tax deficiencies recorded these deficiencies did not affect results of operations.
 analog devices.
 notes to consolidated financial statements 2014 ( )

| 2019     | 2018     | 2017
-------------------------------------------- | -------- | -------- | --------
cost of sales                                | $ 20628  | $ 18733  | $ 12569
research and development                     | 75305    | 81444    | 51258
selling marketing general and administrative | 51829    | 50988    | 40361
special charges                              | 2538     | 2014     | 2014
total stock-based compensation expense       | $ 150300 | $ 151165 | $ 104188


28 , 35  or 90 days.
 funds with failed auctions not accessible until successful auction or buyer found outside auction process.
 based on broker- dealer valuation models analysis of other-than-temporary impairment factors auction rate securities with original par value $ 34 million written-down to estimated fair value $ 16 million as of december 31 , 2007.
 write-down resulted in 201cother-than-temporary 201d impairment charge of approximately $ 8 million ( pre-tax ) in net income temporary impairment charge of $ 10 million ( pre-tax ) as unrealized loss within other comprehensive income for 2007.
 as of december 31 , 2007 investments in auction rate securities in loss position for less than six months.
 auction securities classified as non-current marketable securities as of december 31 , 2007 preceding table.
 3m reviews impairments above in accordance with emerging issues task force ( eitf ) 03-1 fsp sfas 115-1 and 124-1 , 201cthe meaning of other-than-temporary-impairment application to certain investments , 201d determine classification of impairment as 201ctemporary 201d or 201cother-than-temporary. 201d temporary impairment charge results in unrealized loss recorded in other comprehensive income component of stockholders 2019 equity.
 unrealized loss not reduce net income for applicable accounting period loss not viewed as other-than-temporary.
 company believes portion of impairment of auction rate securities investments is temporary portion other-than-temporary.
 factors evaluated to differentiate between temporary and other-than-temporary include projected future cash flows  credit ratings actions  assessment credit quality of underlying collateral.
 balance at december 31 , 2007 for marketable securities and short-term investments by contractual maturity shown below.
actual maturities differ from contractual maturities issuers securities right to prepay obligations without prepayment penalties.
 dec.
 31 , ( millions ) 2007.
 predetermined intervals usually every 7

( millions )                             | dec . 31 2007
---------------------------------------- | -------------
due in one year or less                  | $ 231
due after one year through three years   | 545
due after three years through five years | 221
due after five years                     | 62
total marketable securities              | $ 1059


table summarizes changes in total unrealized tax benefits for fiscal 2009 through fiscal 2011.
 fiscal years 2004 and 2005 irs examination during fourth quarter of fiscal 2007  internal revenue service ( irs ) completed field examination of company 2019s fiscal years 2004 and 2005.
 on january 2 , 2008 irs issued report for fiscal 2004 and 2005  included four proposed adjustments related to these two fiscal years company protested to irs appeals office.
 two of unresolved matters were one-time issues pertain to section 965 of internal revenue code related to beneficial tax treatment of dividends paid from foreign owned companies under american jobs creation act.
 other matters pertained to computation of research and development ( r&d ) tax credit and certain profits earned from manufacturing activities outside united states.
 company recorded tax liability for portion of proposed r&d tax credit adjustment.
 these four items had additional potential tax liability of $ 46 million.
 company concluded discussions tax advisors these items not likely to result in additional tax liability.
 company did not record tax liability for these items.
 during second quarter of fiscal 2011  company reached settlement with irs appeals office on three of four items under protest.
 remaining unresolved matter is a one-time issue pertaining to section 965 of internal revenue code related to beneficial tax treatment of dividends from foreign owned companies under american jobs creation act.
 company will file a petition with tax court to this open matter.
 potential liability for this adjustment is $ 36. 5 million.
 company concluded tax advisors this item not likely to result in additional tax liability.
 company has not recorded additional tax liability for this issue.
fiscal years 2006 and 2007 irs examination third quarter of fiscal 2009 , irs completed field examination of company 2019s fiscal years 2006 and 2007.
 irs and company agreed on treatment of issues included in issue resolutions agreement related to 2006 and 2007 tax returns.
 no agreement reached on tax treatment of issues for fiscal 2006 and fiscal 2007 years , including same r&d tax credit and foreign manufacturing issues mentioned related to fiscal 2004 and 2005 , pricing of intercompany sales ( transfer pricing ) deductibility of certain stock option compensation expenses.
 company recorded taxes related to portion of proposed r&d tax credit adjustment.
 these four items had additional potential total tax liability of $ 195 million.
 company concluded  based discussions with tax advisors these items not likely to result in additional tax liability.
 company did not record additional tax liability for these items appealed proposed adjustments through normal processes for resolution of differences between irs and taxpayers.
 second quarter of fiscal 2011, company reached agreement with irs appeals office on three of four protested items , two were same issues settled relating to 2004 and 2005 fiscal years.
 transfer pricing remained only item under protest with irs appeals office related to fiscal analog devices , inc.
 notes to consolidated financial statements 2014 ( continued )

balance november 1 2008                             | $ 13750
--------------------------------------------------- | ----------------
additions for tax positions of 2009                 | 4411
balance october 31 2009                             | 18161
additions for tax positions of 2010                 | 286
balance october 30 2010                             | $ 18447
additions for tax positions related to prior years  | 9265
reductions for tax positions related to prior years | -17677 ( 17677 )
settlements with taxing authorities                 | -370 ( 370 )
balance october 29 2011                             | $ 9665


mastercard incorporated notes to consolidated financial statements 2014 in thousands except percent per share data ) company make contributions to postretirement plan other than funding benefits payments.
 following table summarizes expected net benefit payments from company 2019s general assets through 2019 : benefit payments expected subsidy receipts benefit payments.
 company provides limited postemployment benefits to eligible former.
 employees primarily severance under formal severance plan ( 201cseverance plan 201d ).
 company accounts for severance expense by accruing expected cost of severance benefits to former employees after employment over relevant service periods.
 company updates assumptions in determining severance accrual by evaluating actual severance activity and long-term trends underlying assumptions.
 company recorded incremental severance expense ( benefit ) related to severance plan of $ 3471 , $ 2643 and $ ( 3418 )  during years 2009 , 2008 2007.
 these amounts part of total severance expenses of $ 135113 , $ 32997 and $ 21284 in 2009 , 2008 2007 included in general and administrative expenses in consolidated statements of operations.
 note 14.
 debt on april 28 , 2008  company extended committed unsecured revolving credit facility  dated as of april 28 , 2006 ( 201ccredit facility 201d ) for additional year.
 new expiration date of credit facility is april 26 , 2011.
 available funding under credit facility remain at $ 2500000 through april 27 , 2010 decrease to $ 2000000 during final year of credit facility agreement.
 other terms and conditions in credit facility remain unchanged.
 company 2019s option to request each lender under credit facility extend commitment provided pursuant to original terms of credit facility agreement.
borrowings under facility available to provide liquidity in settlement failures by mastercard international customers subject to limit of $ 500000  for general corporate purposes.
 facility fee and borrowing cost contingent upon company 2019s credit rating.
 at december 31 , 2009  facility fee was 7 basis points on total commitment  or approximately $ 1774 annually.
 interest on borrowings under credit facility charged at london interbank offered rate ( libor ) plus applicable margin of 28 basis points or alternative base rate utilization fee of 10 basis points charged if outstanding borrowings exceed 50% ( 50 % ) of commitments.
 credit facility company agreed to pay upfront fees of $ 1250 and administrative fees of $ 325  amortized over five years.
 facility and other fees with credit facility totaled $ 2222 , $ 2353 and $ 2477 for each years ended december 31 , 2009 , 2008 and 2007 .
 mastercard in compliance with covenants credit facility had no borrowings under credit facility at december 31 , 2009 or december 31 , 2008.
 majority of credit facility lenders are members or affiliates of members of mastercard international.
 in june 1998  mastercard international issued ten-year unsecured , subordinated notes ( ) paying fixed interest rate of 6. 67% ( 6. 67 % ) per annum.
 mastercard repaid entire principal amount of $ 80000 on june 30 , 2008 terms notes.
 interest expense on notes was $ 2668 and $ 5336 for each of years ended december 31 , 2008 and 2007 .

| benefit payments | expected subsidy receipts | net benefit payments
-------------- | ---------------- | ------------------------- | --------------------
2010           | $ 2714           | $ 71                      | $ 2643
2011           | 3028             | 91                        | 2937
2012           | 3369             | 111                       | 3258
2013           | 3660             | 134                       | 3526
2014           | 4019             | 151                       | 3868
2015 2013 2019 | 22686            | 1071                      | 21615


adverse development to one claim in 2008 favorable developments in three cases in 2009.
 other costs lower in 2009 compared to 2008 driven by decrease in expenses for freight property damages  employee travel utilities.
 higher bad debt expense in 2008 due to uncertain impact recessionary economy drove favorable year-over-year comparison.
 additional expense of $ 30 million to transaction with pacer international , inc.
 higher property taxes offset lower costs 2009.
 other costs higher in 2008 compared to 2007 due to increase in bad debts state local taxes loss damage expenses utility costs other miscellaneous expenses totaling $ 122 million.
 personal injury costs ( including asbestos-related claims ) $ 8 million lower in 2008 compared to 2007.
 reduction reflects improvements in safety experience lower estimated costs to resolve claims actuarial studies personal injury expense annual reviews of asbestos-related claims 2008 2007.
 year-over-year comparison includes negative impact of adverse development associated with one claim in 2008.
 environmental toxic tort expenses $ 7 million lower in 2008 compared to 2007.
 non-operating items millions of dollars 2009 2008 2007 % ( % ) change 2009 v 2008 % ( % ) change 2008 v 2007.
 other income 2013 income increased $ 103 million in 2009 compared to 2008 due to higher gains from real estate sales included $ 116 million pre-tax gain from land sale to regional transportation district ( rtd ) in colorado lower interest expense on sale of receivables program lower interest rates lower outstanding balance.
 reduced rental licensing income lower returns on cash investments reflecting lower interest rates partially offset increases.
 other income decreased in 2008 compared to 2007 due to lower gains from real estate sales decreased returns on cash investments reflecting lower interest rates.
higher rental licensing income lower interest expense sale of receivables program offset decreases.
 interest expense 2013 interest expense increased 2009 versus 2008 due to higher weighted- average debt levels.
 2009 weighted-average debt level $ 9. 6 billion including restructuring of locomotive leases may 2009 compared to $ 8. 3 billion in 2008.
 effective interest rate 6. 3% ( 6. 3 % ) in 2009 compared to 6. 1% ( 6. 1 % ) in 2008.
 interest expense increased 2008 versus 2007 due to higher weighted-average debt level $ 8. 3 billion compared to $ 7. 3 billion in 2007.
 lower effective interest rate 6. 1% ( 6. 1 % ) in 2008 compared to 6. 6% ( 6. 6 % ) in 2007 offset effects higher weighted-average debt level.
 income taxes 2013 income taxes lower in 2009 compared to 2008 by lower pre-tax income.
 effective tax rate 36. 5% ( 36. 5 % ) compared to 36. 1% ( 36. 1 % ) in 2008.
 income taxes higher in 2008 compared 2007 by higher pre-tax income.
 effective tax rates 36. 1% ( 36. 1 % ) 38. 4% ( 38. 4 % ) in 2008 2007.
 lower effective tax rate 2008 resulted from reductions in tax expense related to federal audits state tax law changes.
 effective tax rate 2007 increased by illinois legislation increased deferred tax expense third quarter 2007.

millions of dollars | 2009           | 2008           | 2007           | % (  % ) change 2009 v 2008 | % (  % ) change 2008 v 2007
------------------- | -------------- | -------------- | -------------- | --------------------------- | ---------------------------
other income        | $ 195          | $ 92           | $ 116          | 112 % (  % )                | ( 21 ) % (  % )
interest expense    | -600 ( 600 )   | -511 ( 511 )   | -482 ( 482 )   | 17                          | 6
income taxes        | -1089 ( 1089 ) | -1318 ( 1318 ) | -1154 ( 1154 ) | -17 ( 17 )                  | 14


contractual obligations.
 table shows contractual obligations for period indicated:.
 ( 1 ) interest expense on 6. 6% ( 6. 6 % ) long term notes assumed to be fixed through contractual term.
 ( 2 ) loss and lae reserves represent best estimate of losses from claim and related settlement costs.
 amounts and timing of payments are estimates variability of resolving claims changes in market conditions make timing of cash flows uncertain.
 ultimate amount and timing of loss and lae payments could differ from estimates.
 contractual obligations for senior notes long term notes junior subordinated debt are responsibility of holdings.
 sufficient cash flow  liquidity investments access to capital markets to satisfy these obligations.
 holdings depends upon dividends from everest re , operating insurance subsidiary for funding capital contributions from group access to capital markets.
 operating insurance and reinsurance subsidiaries have sufficient cash flow liquidity investments to settle outstanding reserves for losses lae.
 management believes we entities have sufficient financial resources to meet all obligations.
 dividends.
 during 2007 , 2006 2005  declared and paid shareholder dividends of $ 121. 4 million , $ 39. 0 million $ 25. 4 million  respectively.
 as insurance holding company partially dependent on dividends and other permitted pay- ments from subsidiaries to pay cash dividends to shareholders.
 payment of dividends to group by holdings and holdings by everest re subject to delaware regulatory restrictions payment dividends to group by bermuda re subject to bermuda insurance regulatory restrictions.
management expects absent extraordinary catastrophe losses restrictions not affect everest re 2019s ability to declare pay dividends support holdings 2019 general corporate needs holdings bermuda re ability declare pay dividends support group 2019s general corporate needs.
 years ended december 31 , 2007  2006 2005  everest re paid divi- dends to holdings of $ 245. 0 million , $ 100. 0 million $ 75. 0 million  respectively.
 years ended december 31 , 2007 , 2006 2005  bermuda re paid dividends to group of $ 0. 0 million , $ 60. 0 million $ 45. 0 million  respectively.
 see item 1 , 201cbusiness 2013 regulatory matters 2013 dividends 201d note 16 notes to consolidated financial statements.
 application of new accounting standards.
 november 2005  fasb issued fasb staff position ( 201cfsp 201d ) fas 115-1 , 201cthe meaning of other-than-temporary impairment application to certain investments 201d ( 201cfas 115-1 201d ) effective for reporting periods after december 15 , 2005.
 fas 115-1 addresses determination when investment considered impaired impairment other than temporary measurement of impairment loss.
 fas 115-1 includes accounting considerations recognition of other-than-temporary impairment requires dis- closures about unrealized losses not recognized as other-than-temporary impairments.
 company adopted fas 115-1 effective january 1 , 2006.
 company believes all unrealized losses in investment portfolio are temporary.

( dollars 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 3-5 years | payments due by period more than 5 years
-------------------------------------- | ---------------------------- | --------------------------------------- | -------------------------------- | -------------------------------- | ----------------------------------------
8.75% ( 8.75 % ) senior notes          | $ 200.0                      | $ -                                     | $ 200.0                          | $ -                              | $ -
5.40% ( 5.40 % ) senior notes          | 250.0                        | -                                       | -                                | -                                | 250.0
junior subordinated debt               | 329.9                        | -                                       | -                                | -                                | 329.9
6.6% ( 6.6 % ) long term notes         | 400.0                        | -                                       | -                                | -                                | 400.0
interest expense ( 1 )                 | 2243.0                       | 77.2                                    | 145.7                            | 119.5                            | 1900.6
employee benefit plans                 | 2.4                          | 2.4                                     | -                                | -                                | -
operating lease agreements             | 32.0                         | 8.5                                     | 16.3                             | 3.7                              | 3.5
gross reserve for losses and lae ( 2 ) | 9040.6                       | 2053.2                                  | 3232.3                           | 1077.1                           | 2678.1
total                                  | $ 12497.9                    | $ 2141.3                                | $ 3594.3                         | $ 1200.3                         | $ 5562.0