contingencies exposed to certain known contingencies material to our investors.
 facts and circumstances surrounding these contingencies and discussion of their effect on us are in note 12 to our audited consolidated financial statements included in this annual report on form 10-k.
 these contingencies may have material effect on our liquidity , capital resources or results of operations.
 in even reserves adequate incurrence of liabilities may have material effect on our liquidity and amount of cash available to for other purposes.
 believe we made appropriate arrangements in respect of future effect on us of these known contingencies.
 believe of cash available to from our operations  with cash from financing  will be sufficient for to pay any known contingencies as due without affecting our ability to conduct operations invest in growth of business.
 off-balance sheet arrangements not any off-balance sheet arrangements except for operating leases entered into in normal course of business.
 contractual obligations and commitments summary of future payment commitments by year under contractual obligations as of december 31 , 2018:.
 1 ) interest payments on our debt based on interest rates in effect on december 31 , 2018.
 2 ) purchase obligations defined as agreements to purchase goods or services enforceable and legally binding specify significant terms  including fixed or minimum quantities to be purchased , fixed  minimum variable pricing provisions approximate timing of transactions.
 3 ) committed to invest $ 120 million in private equity funds.
 as of december 31 , 2018 funded approximately $ 78 million of these commitments approximately $ 42 million remaining to be funded not included in above table unable to predict when these commitments will be paid.
 ( 4 ) amounts represent expected future benefit payments for our pension and postretirement benefit plans  expected contributions for 2019 for our funded pension benefit plans.
made cash contributions totaling approximately $ 31 million to defined benefit plans in 2018 , estimate make contributions approximately $ 25 million to defined benefit plans in 2019.
 due to potential impact of future plan investment performance  changes in interest rates  changes in other economic and demographic assumptions changes in legislation in foreign jurisdictions , not able to reasonably estimate timing and amount of contributions required to fund defined benefit plans for periods beyond 2019.
 ( 5 ) as of december 31 , 2018  liability related to uncertain income tax positions was approximately $ 106 million , $ 89 million not included in above table unable to predict when liabilities be paid due to uncertainties in timing of settlement of income tax positions.

( in millions )                                | 2019   | 2020 - 2021 | 2022 - 2023 | thereafter | total
---------------------------------------------- | ------ | ----------- | ----------- | ---------- | -------
long-term debt including interest ( 1 )        | $ 508  | $ 1287      | $ 3257      | $ 8167     | $ 13219
operating leases                               | 167    | 244         | 159         | 119        | 689
data acquisition                               | 289    | 467         | 135         | 4          | 895
purchase obligations ( 2 )                     | 17     | 22          | 15          | 8          | 62
commitments to unconsolidated affiliates ( 3 ) | 2014   | 2014        | 2014        | 2014       | 2014
benefit obligations ( 4 )                      | 25     | 27          | 29          | 81         | 162
uncertain income tax positions ( 5 )           | 17     | 2014        | 2014        | 2014       | 17
total                                          | $ 1023 | $ 2047      | $ 3595      | $ 8379     | $ 15044


company entered agreements with governmental entities in states kentucky, georgia tennessee to implement tax abatement plans related to its distribution center in franklin  kentucky simpson county distribution center in macon  georgia bibb store support center in brentwood  tennessee ( williamson county ).
 tax abatement plans provide for reduction of real property taxes for specified time frames by transferring title to real property in exchange for industrial revenue bonds.
 property was then leased back to company.
 no cash exchanged.
 lease payments equal to payments on bonds.
 tax abatement period extends through term of lease  coincides with maturity date of bonds.
 company has option to purchase real property by paying off bonds , plus $ 1.
 terms and amounts authorized and drawn under each industrial revenue bond agreement outlined as follows  as of december 30, 2017 : bond term bond authorized amount ( in millions ) amount drawn ( in millions ).
 due to transactions company not recorded bonds or lease obligation associated with sale lease-back transaction.
 original cost of company 2019s property and equipment is recorded on balance sheet being depreciated over its estimated useful life.
 capitalized software costs company capitalizes certain costs related to acquisition and development of software and amortizes these costs using straight-line method over estimated useful life of software three to five years.
 computer software consists of software developed for internal use and third-party software purchased for internal use.
 subsequent addition , modification or upgrade to internal-use software is capitalized to extent it enhances software functionality or extends its useful life.
 these costs included in computer software and hardware in accompanying consolidated balance sheets.
 certain software costs not meeting criteria for capitalization are expensed as incurred.
store closing costs company evaluates performance of stores periodically closes those under-performing.
 company records liability for costs associated with exit or disposal activity when liability incurred  usually in period store closes.
 store closing costs not significant to results operations for fiscal years presented.
 leases assets under capital leases amortized in accordance with company 2019s normal depreciation policy for owned assets or over lease term  if shorter related charge to operations included in depreciation expense in consolidated statements of income.
 certain operating leases include rent increases during lease term.
 for leases company recognizes related rental expense on straight-line basis over term of lease ( includes pre-opening period of construction , renovation  fixturing merchandise placement ) records difference between expense charged to operations and amounts paid as deferred rent liability.
 company occasionally receives reimbursements from landlords to towards improving related store to leased.
 leasehold improvements recorded at gross costs  including items reimbursed by landlords.
 related reimbursements deferred and amortized on straight-line basis as reduction of rent expense over applicable lease term.
 note 2 - share-based compensation : share-based compensation includes stock option and restricted stock unit awards certain transactions under company 2019s espp.
 share-based compensation expense recognized based on grant date fair value of all stock option and restricted stock unit awards plus discount on shares purchased by employees part of espp.
 discount under espp represents difference between purchase date market value and employee 2019s purchase price.

| bond term | bond authorized amount ( in millions ) | amount drawn ( in millions )
---------------------------------------- | --------- | -------------------------------------- | ----------------------------
franklin kentucky distribution center    | 30 years  | $ 54.0                                 | $ 51.8
macon georgia distribution center        | 15 years  | $ 58.0                                 | $ 49.9
brentwood tennessee store support center | 10 years  | $ 78.0                                 | $ 75.3


performance graph following graph is comparison of five-year cumulative return of our common shares , standard & poor 2019s 500 index ( 201cs&p 500 index 201d ) national association of real estate investment trusts 2019 ( 201cnareit 201d ) all equity index , peer group index.
 graph assumes $ 100 invested on december 31 , 2009 in our common shares , s&p 500 index nareit all equity index all dividends reinvested without payment commissions.
 no assurance performance of our shares will continue in line with same or similar trends depicted in graph below.

| 2009  | 2010  | 2011  | 2012  | 2013  | 2014
--------------------------- | ----- | ----- | ----- | ----- | ----- | -----
vornado realty trust        | $ 100 | $ 123 | $ 118 | $ 128 | $ 147 | $ 201
s&p 500 index               | 100   | 115   | 117   | 136   | 180   | 205
the nareit all equity index | 100   | 128   | 139   | 166   | 171   | 218


contractual obligations table summarizes significant contractual obligations as of december 28 , 2013:.
 capital purchase obligations1 5503 5375 125 2014 3 other purchase obligations commitments2 1859 772 744 307 36 long-term debt obligations3 22372 429 2360 3761 15822 other long-term liabilities4 5 1496 569 663 144 120 total6 $ 32100 $ 7353 $ 4190 $ 4378 $ 16179 1 capital purchase obligations represent commitments for construction or purchase of property  plant equipment.
 not recorded as liabilities on consolidated balance sheets as of december 28, 2013 not yet received related goods or taken title to property.
 2 other purchase obligations commitments include payments due under licenses agreements to purchase goods or services payments due under non-contingent funding obligations.
 funding obligations include agreements to fund projects with other companies.
 3 amounts represent principal and interest cash payments over life of debt obligations including anticipated interest payments not recorded on consolidated balance sheets.
 future settlement of convertible debt would impact cash payments.
 unable to estimate timing of future payments related to uncertain tax positions ; $ 188 million of long-term income taxes payable excluded from table.
 long- term income taxes payable  recorded on consolidated balance sheets included these uncertain tax positions reduced by federal deduction for state taxes and.
 tax credits from non-.
 income taxes.
 5 amounts represent future cash payments to satisfy other long-term liabilities recorded on consolidated balance sheets including short-term portion of long-term liabilities.
 expected required contributions to.
 non-u.
 pension plans other postretirement benefit plans of $ 62 million to made during 2014 included ; funding projections beyond 2014 not practicable to estimate.
6 total excludes contractual obligations recorded on our consolidated balance sheets as current liabilities except for short-term portions of long-term debt obligations and other long-term liabilities.
 contractual obligations for purchases of goods or services , included in other purchase obligations and commitments in preceding table include agreements enforceable and legally binding on intel specify all significant terms  including fixed or minimum quantities to purchased ; fixed variable price provisions ; approximate timing of transaction.
 for obligations with cancellation provisions  amounts included in preceding table limited to non-cancelable portion of agreement terms or minimum cancellation fee.
 entered into certain agreements for purchase of raw materials specify minimum prices and quantities based on percentage of total available market or percentage of future purchasing requirements.
 due to uncertainty of future market and future purchasing requirements non-binding nature of these agreements obligations under these agreements not included in preceding table.
 purchase orders for other products based on current manufacturing needs fulfilled by vendors within short time horizons.
 some purchase orders represent authorizations to purchase rather than binding agreements.
 table of contents management 2019s discussion and analysis of financial condition and results of operations ( continued )

( in millions )                             | payments due by period total | payments due by period less than1 year | payments due by period 1 20133 years | payments due by period 3 20135 years | payments due by period more than5 years
------------------------------------------- | ---------------------------- | -------------------------------------- | ------------------------------------ | ------------------------------------ | ---------------------------------------
operating lease obligations                 | $ 870                        | $ 208                                  | $ 298                                | $ 166                                | $ 198
capital purchase obligations1               | 5503                         | 5375                                   | 125                                  | 2014                                 | 3
other purchase obligations and commitments2 | 1859                         | 772                                    | 744                                  | 307                                  | 36
long-term debt obligations3                 | 22372                        | 429                                    | 2360                                 | 3761                                 | 15822
other long-term liabilities4 5              | 1496                         | 569                                    | 663                                  | 144                                  | 120
total6                                      | $ 32100                      | $ 7353                                 | $ 4190                               | $ 4378                               | $ 16179


republic services , inc.
 notes to consolidated financial statements 2014 ( continued ) credit exposure  we monitor credit worthiness of financial institutions where we have deposits.
 concentrations of credit risk with respect to trade accounts receivable limited due to wide variety of customers and markets in provide services dispersion of operations across many geographic areas.
 provide services to small-container commercial , large-container industrial municipal residential customers in united states and puerto rico.
 perform ongoing credit evaluations of customers generally do not require collateral to support customer receivables.
 establish allowance for doubtful accounts based on factors including credit risk of specific customers age of receivables outstanding  historical trends  economic conditions other information.
 accounts receivable , net accounts receivable represent receivables from customers for collection , transfer , recycling disposal  energy services other services.
 receivables recorded when billed or when related revenue earned represent claims against third parties settled in cash.
 carrying value of receivables , net of allowance for doubtful accounts and customer credits  represents their estimated net realizable value.
 provisions for doubtful accounts evaluated monthly basis recorded based on historical collection experience age of receivables specific customer information economic conditions.
 review outstanding balances on account-specific basis.
 reserves provided for accounts receivable in excess of 90 days outstanding.
 past due receivable balances written-off when collection efforts unsuccessful collecting amounts due.
 following table reflects activity in allowance for doubtful accounts for years ended december 31:.
 restricted cash and marketable securities as of december 31 , 2015  had $ 100. 3 million of restricted cash and marketable securities.
obtain funds through issuance of tax-exempt bonds for financing qualifying expenditures at our landfills , transfer stations  collection and recycling centers.
 funds deposited directly into trust accounts by bonding authorities at time of issuance.
 use of these funds is contractually restricted  not ability to use funds for general operating purposes , classified as restricted cash and marketable securities in consolidated balance sheets.
 in normal course of business  may be required to provide financial assurance to governmental agencies other entities in connection with municipal residential collection contracts  closure post- closure of landfills  environmental remediation  environmental permits business licenses and permits as financial guarantee of performance.
 at several landfills  satisfy financial assurance requirements by depositing cash into restricted trust funds or escrow accounts.
 property and equipment record property and equipment at cost.
 expenditures for major additions improvements to facilities capitalized  maintenance and repairs charged to expense as incurred.
 when property retired or disposed , related cost and accumulated depreciation removed from accounts resulting gain or loss reflected in consolidated statements of income.

| 2015           | 2014           | 2013
---------------------------- | -------------- | -------------- | --------------
balance at beginning of year | $ 38.9         | $ 38.3         | $ 45.3
additions charged to expense | 22.7           | 22.6           | 16.1
accounts written-off         | -14.9 ( 14.9 ) | -22.0 ( 22.0 ) | -23.1 ( 23.1 )
balance at end of year       | $ 46.7         | $ 38.9         | $ 38.3


interest rate cash flow hedges 2013 report changes in fair value of cash flow hedges in accumulated other comprehensive loss until hedged item affects earnings.
 at december 31 , 2008 and 2007 reductions of $ 4 million recorded as accumulated comprehensive loss amortized straight-line through september 30 , 2014.
 of december 31 , 2008 and 2007  no interest rate cash flow hedges outstanding.
 earnings impact 2013 use of derivative financial instruments impact on pre-tax income for years ended december 31 : millions of dollars 2008 2007 2006.
 fair value of debt instruments 2013 fair value of short- and long-term debt estimated using quoted market prices or current borrowing rates.
 at december 31 , 2008  fair value of total debt approximately $ 247 million less than carrying value.
 december 31 , 2007  fair value total debt exceeded carrying value by approximately $ 96 million.
 at december 31 , 2008 and 2007 , approximately $ 320 million and $ 181 million  fixed-rate debt securities contained call provisions allowed to retire debt instruments prior to final maturity with payment of fixed call premiums certain cases.
 sale of receivables 2013 railroad transfers accounts receivable to union pacific receivables , inc.
 upri bankruptcy-remote subsidiary of sale of receivables facility.
 upri sells without recourse on 364-day revolving basis undivided interest in accounts receivable to investors.
 total capacity to sell undivided interests to investors under facility was $ 700 million and $ 600 million at december 31 , 2008 and 2007 .
 value of outstanding undivided interest held by investors under facility was $ 584 million and $ 600 million at december 31 , 2008 and 2007.
upri reduced outstanding undivided interest held by investors due to decrease in available receivables at december 31 , 2008.
 value of outstanding undivided interest investors not included in consolidated financial statements.
 value undivided interest investors supported by $ 1015 million and $ 1071 million of accounts receivable held by upri at december 31 , 2008 and 2007 .
 at december 31 , 2008 and 2007  value of interest retained by upri was $ 431 million and $ 471 million , respectively.
 retained interest included in accounts receivable in consolidated financial statements.
 interest sold to investors is sold at carrying value  approximates fair value no gain or loss recognized from transaction.
 value of outstanding undivided interest could fluctuate based upon availability of eligible receivables affected by changing business volumes and credit risks , including default and dilution.
 if default or dilution percentages to increase one percentage point , amount of eligible receivables would decrease by $ 6 million.
 should credit rating fall below investment grade  value of outstanding undivided interest investors would be reduced in certain cases investors have right to discontinue facility.
 railroad services sold receivables ; railroad does not recognize servicing asset or liability as servicing fees compensate us for these responsibilities.
 railroad collected approximately $ 17. 8 billion and $ 16. 1 billion during years ended december 31 , 2008 and 2007 .
 upri used proceeds to purchase new receivables under facility.

millions of dollars                                                   | 2008 | 2007       | 2006
--------------------------------------------------------------------- | ---- | ---------- | ----------
( increase ) /decrease in interest expense from interest rate hedging | $ 1  | $ -8 ( 8 ) | $ -8 ( 8 )
( increase ) /decrease in fuel expense from fuel derivatives          | 1    | -1 ( 1 )   | 3
increase/ ( decrease ) in pre-tax income                              | $ 2  | $ -9 ( 9 ) | $ -5 ( 5 )


freesheet paper higher in russia lower in europe reflecting weak economic conditions market demand.
 average sales price realizations for pulp decreased.
 lower input costs for wood purchased fiber offset by higher costs for energy chemicals packaging.
 freight costs higher.
 planned maintenance downtime costs higher due to significant once-every-ten-years maintenance outage plus scheduled 18-month outage at saillat mill outage costs in russia poland lower.
 manufacturing operating costs favor- entering 2013 sales volumes first quarter expected seasonally weaker in russia flat in europe.
 average sales price realizations for uncoated freesheet paper expected decrease in europe increase in russia.
 input costs higher in russia especially for wood energy slightly lower in europe.
 no maintenance outages scheduled first quarter.
 ind ian papers includes results andhra pradesh paper mills ( appm ) 75% ( 75 % ) interest acquired on october 14 , 2011.
 net sales $ 185 million in 2012 $ 35 million in 2011.
 operat- ing profits loss of $ 16 million in 2012 loss $ 3 million in 2011.
 asian pr int ing papers net sales $ 85 mil- lion in 2012 $ 75 million in 2011 $ 80 million in 2010.
 operating profits improved from break- even to $ 1 million in 2012.
 u. s.
 pulp net sales $ 725 million in 2012 compared with $ 725 million in 2011 $ 715 million in 2010.
 operating profits loss of $ 59 million in 2012 compared with gains $ 87 million in 2011 $ 107 million in 2010.
 sales volumes 2012 increased from 2011 due to start-up of pulp production at franklin mill third quarter 2012.
 average sales price realizations significantly lower for fluff pulp market pulp.
 input costs lower primarily for wood energy.
 freight costs slightly lower.
mill operating costs unfavorable due to costs start-up franklin mill.
 planned maintenance downtime costs lower.
 first quarter of 2013 sales volumes expected be flat with fourth quarter of 2012.
 average sales price realizations expected to improve reflecting sales price increases for paper and tissue pulp announced in fourth quarter 2012.
 input costs should be flat.
 planned maintenance downtime costs about $ 9 million higher than fourth quarter 2012.
 manufacturing costs related to franklin mill should be lower as improve operations.
 consumer packaging demand and pricing for ucts correlate with consumer spending general economic activity.
 prices volumes major factors affecting profitability of consumer packaging are raw material energy costs freight costs manufacturing efficiency product mix.
 consumer packaging net sales in 2012 decreased 15% ( 15 % ) from 2011 7% ( 7 % ) from 2010.
 operating profits increased 64% ( 64 % ) from 2011 29% ( 29 % ) from 2010.
 net sales operating profits include shorewood business in 2011 2010.
 exclud- ing asset impairment other charges associated with sale shorewood business facility closure costs 2012 operating profits 27% ( 27 % ) lower than 2011 23% ( 23 % ) higher than in 2010.
 benefits from lower raw material costs ( $ 22 million ) lower maintenance outage costs ( $ 5 million ) other items ( $ 2 million ) offset by lower sales price realizations unfavorable product mix ( $ 66 million ) lower sales volumes increased market-related downtime ( $ 22 million ) higher operating costs ( $ 40 million ).
 operating profits in 2012 included gain of $ 3 million related to sale of shorewood business operating profits in 2011 included $ 129 million fixed asset impairment charge for north ameri- can shorewood business $ 72 million for other charges associated with sale of shorewood business.
 consumer packaging.
north american consumer packaging net sales $ 2. 0 billion 2012 compared with $ 2. 5 billion 2011 $ 2. 4 billion 2010.
 operating profits $ 165 million ( $ 162 million excluding gain sale shorewood business ) 2012 compared with $ 35 million ( $ 236 million excluding asset impairment charges sale shorewood business ) 2011 $ 97 million ( $ 105 million excluding facility closure costs ) in 2010.
 coated paperboard sales volumes 2012 lower than 2011 reflecting weaker market demand.
 average sales price realizations lower primar ily for folding carton board.
 input costs for wood increased partially offset by lower costs for chemicals energy.
 planned maintenance down- time costs slightly lower.
 market-related down- time about 113000 tons in 2012 compared with 38000 tons 2011.

in millions      | 2012   | 2011   | 2010
---------------- | ------ | ------ | ------
sales            | $ 3170 | $ 3710 | $ 3400
operating profit | 268    | 163    | 207


item 4.
 submission of matters to vote of security holders no matters submitted to vote security holders during fourth quarter of 2005.
 part ii item 5.
 market for registrant 2019s common equity , related stockholder matters and issuer purchases of equity securities market information series a common stock traded on new york stock exchange under symbol 2018 2018ce 2019 2019 since january 21 , 2005.
 closing sale price of series a common stock  reported on march 6 , 2006 was $ 20. 98.
 following table sets forth high and low intraday sales prices per share of common stock  reported new york stock exchange for periods indicated.
 holders no shares of 2019s series b common stock issued and outstanding.
 as of march 6 , 2006  51 holders of record of series a common stock , one holder of record of perpetual preferred stock.
 including broker accounts names estimate shareholder base to be approximately 6800 as of march 6 , 2006.
 dividend policy in july 2005  board of directors adopted policy of declaring subject to legally available funds quarterly cash dividend on each share of common stock at annual rate initially equal to approximately 1% ( 1 % ) of $ 16 price per share in initial public offering of series a common stock ( or $ 0. 16 per share ) unless board of directors  determines otherwise commencing second quarter of 2005.
 pursuant to policy company paid quarterly dividends of $ 0. 04 per share on august 11 , 2005 , november 1 , 2005 and february 1 , 2006.
 based on number of outstanding shares of series a common stock  anticipated annual cash dividend is approximately $ 25 million.
 no assurance that sufficient cash available in future to pay such dividend.
dividends payable to holders of our series a common stock cannot be declared or paid nor can funds be set aside for payment unless we paid or set aside funds for payment of all accumulated and unpaid dividends with to shares of our preferred stock  as described below.
 our board of directors may  modify or revoke our dividend policy on our series a common stock.
 we are required under terms preferred stock to pay scheduled quarterly dividends  subject to legally available funds.
 for preferred stock remains outstanding  we will not declare , pay or set apart funds for payment of any dividend or other distribution with to any junior stock or parity stock neither we  nor our subsidiaries will  subject to redeem  purchase or acquire for consideration junior stock or parity stock through sinking fund or otherwise unless we have paid or set apart funds for payment of all accumulated and unpaid dividends with shares preferred stock and parity stock for all preceding dividend periods.
 to policy company paid quarterly dividends of $ 0. 265625 on its 4. 25% (. 25 % ) convertible perpetual preferred stock on august 1 , 2005  november 1 , 2005 and february 1 , 2006.
 anticipated annual cash dividend is approximately $ 10 million.

2005                           | pricerange high | pricerange low
------------------------------ | --------------- | --------------
quarterended march 312005      | $ 18.65         | $ 15.10
quarter endedjune 302005       | $ 18.16         | $ 13.54
quarter endedseptember 30 2005 | $ 20.06         | $ 15.88
quarter endeddecember 312005   | $ 19.76         | $ 15.58


overview we finance operations capital expenditures through combination internally generated cash from operations and borrowings under our senior secured asset-based revolving credit facility.
 believe current sources of funds will sufficient to fund cash operating requirements for next year.
 believe in spite of uncertainty of future macroeconomic conditions, we have adequate sources of liquidity and funding available to meet longer-term needs.
, factors may negatively impact available sources of funds.
 amount of cash generated from operations dependent upon factors successful execution of business plan general economic conditions.
 long-term debt activities during year ended december 31 , 2014  had significant debt refinancings.
 with refinancings recorded a loss on extinguishment of long-term debt of $ 90. 7 million in consolidated statement of operations for year ended december 31 , 2014.
 see note 7 to accompanying audited consolidated financial statements in report for additional details.
 share repurchase program on november 6, 2014  announced board of directors approved $ 500 million share repurchase program effective immediately under may repurchase shares of common stock in open market or through privately negotiated transactions , depending on share price , market conditions other factors.
 share repurchase program does not obligate us to repurchase any dollar amount or number of shares  repurchases may be commenced or suspended without prior notice.
 as of date of this filing no shares repurchased under share repurchase program.
 dividends summary of 2014 dividend activity for common stock shown below:.
 on february 10 , 2015  announced board of directors declared a quarterly cash dividend on common stock of $ 0. 0675 per share.
 dividend will be paid on march 10 , 2015 to all stockholders of record as of close of business on february 25 , 2015.
payment of future dividends at discretion of our board of directors depend upon our results of operations , financial condition  business prospects  capital requirements  contractual restrictions  potential indebtedness incur  restrictions imposed by applicable law  tax considerations other factors board of directors deems relevant.
 in our ability to pay dividends on our common stock limited by restrictions on our ability to pay dividends or make distributions to stockholders and on ability of subsidiaries to pay dividends or make distributions to us , under terms of our current and future agreements governing our indebtedness.
 table of contents

dividend amount | declaration date | record date      | payment date
--------------- | ---------------- | ---------------- | -----------------
$ 0.0425        | february 12 2014 | february 25 2014 | march 10 2014
$ 0.0425        | may 8 2014       | may 27 2014      | june 10 2014
$ 0.0425        | july 31 2014     | august 25 2014   | september 10 2014
$ 0.0675        | november 6 2014  | november 25 2014 | december 10 2014


fair value of options vested during years ended december 31 , 2017 , 2016 2015 was $ 6. 8 million , $ 6. 0 million $ 7. 8 million  respectively.
 intrinsic value of fortune brands stock options exercised in years ended december 31 , 2017 , 2016 2015 was $ 70. 6 million , $ 88. 1 million $ 78. 0 million , respectively.
 performance awards granted to officers employees company under plans represent right to earn shares of company common stock based on achievement of company-wide performance conditions including cumulative diluted earnings per share average return on invested capital average return on net tangible assets ebitda during three-year performance period.
 compensation cost amortized into expense over performance period generally three years based on probability of meeting performance targets.
 fair value of each performance share award based on average of high and low stock price on date of grant.
 table summarizes information about performance share awards as of december 31 , 2017 activity during year ended.
 number of performance share awards granted shown below at target award amounts : number of performance share awards weighted-average grant-date fair value.
 remaining unrecognized pre-tax compensation cost related to performance share awards at december 31 , 2017 was approximately $ 6. 8 million  weighted-average period of time over cost recognized is 1. 3 years.
 fair value of performance share awards vested during 2017 was $ 5. 6 million ( 100580 shares ).
 director awards stock awards used as part of compensation to outside directors under plan.
 awards issued annually in second quarter.
 outside directors can elect to have director fees paid in stock or defer payment of stock.
 compensation cost expensed at time of award based on fair value of share at date of award.
in 2017 , 2016 2015 , awarded 15311 , 16471 19695 shares of company common stock to outside directors with weighted average fair value on date award of $ 63. 43 , $ 57. 37 $ 46. 21 , respectively.
 14.
 defined benefit plans number of pension plans in united states  covering many company 2019s employees plans closed to new hires.
 plans provide for payment of retirement benefits  mainly commencing between ages 55 and 65.
 after meeting certain qualifications  employee acquires vested right to future benefits.
 benefits payable under plans determined on basis employee 2019s length of service/or earnings.
 employer contributions to plans made  as necessary to ensure legal funding requirements satisfied.
 from time to  may make contributions in excess of legal funding requirements.
 service cost for 2017 relates to benefit accruals in hourly union defined benefit plan in security segment.
 benefit accruals under all other defined benefit pension plans frozen as of december 31, 2016.

| number of performance share awards | weighted-averagegrant-datefair value
----------------------------- | ---------------------------------- | ------------------------------------
non-vestedat december 31 2016 | 421600                             | $ 48.00
granted                       | 160196                             | 58.02
vested                        | -95183 ( 95183 )                   | 45.13
forfeited                     | -58285 ( 58285 )                   | 48.22
non-vestedat december 31 2017 | 428328                             | $ 52.35


inherent limitations on effectiveness of controls.
 we not expect our disclosure controls or internal control over financial reporting will prevent or detect all errors fraud.
 control system no well-designed operated can provide only reasonable not absolute assurance that control system objectives will be met.
 design of control system must reflect resource constraints exist benefits of controls must be considered relative to costs.
 inherent limitations in control systems  no evaluation of controls can provide absolute assurance misstatements due to error or fraud will not occur or all control issues instances of fraud if detected.
 design of system of controls is based in on certain assumptions about likelihood of future events no assurance that design will succeed in achieving stated goals under potential future conditions.
 projections of evaluation of effectiveness of controls to future periods subject to risks.
 over time controls may become inadequate due to changes in conditions or deterioration in degree of compliance with policies or procedures.
 if controls become inadequate could fail to meet financial reporting obligations reputation may be adversely affected business and operating results could be harmed  market price of stock could decline.
 item 1b.
 unresolved staff comments not applicable.
 item 2.
 properties as of december 31 , 2016  major facilities consisted of : ( square feet in millions ) united states countries total owned facilities1.
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 31.5 19. 2 50. 7 leased facilities2.
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 1 leases municipal grants on portions land used for facilities expire on varying dates through 2109.
 2 leases expire on varying dates through 2058 include renewals option.
 principal executive offices located in u. s.
 majority of wafer manufacturing activities in 2016 located in u. s.
 arizona wafer fabrication facilities on hold held safe state , reserving building for additional capacity future technologies.
 incremental construction equipment installation required ready facility for intended use.
 for more information on wafer fabrication assembly test facilities , see 201cmanufacturing assembly test 201d in part i , item 1 of form 10-k.
 believe facilities described above suitable adequate for present purposes productive capacity facilities substantially utilized plans to utilize.
 not identify allocate assets by operating segment.
 for information on net property , plant and equipment by country , see 201cnote 4 : operating segments geographic information 201d in part ii , item 8 of this form 10-k.
 item 3.
 legal proceedings discussion of legal proceedings , see 201cnote 20 : commitments and contingencies 201d in part ii, item 8 of form 10-k.
 item 4.
 mine safety disclosures not applicable.

( square feet in millions ) | unitedstates | othercountries | total
--------------------------- | ------------ | -------------- | -----
owned facilities1           | 31.5         | 19.2           | 50.7
leased facilities2          | 2.5          | 7.1            | 9.6
total facilities            | 34.0         | 26.3           | 60.3


table of contents marketaxess holdings inc.
 notes to consolidated financial statements 2014 this standard had no material effect on company 2019s consolidated statements of financial condition and consolidated statements of operations.
 reclassifications certain reclassifications made to prior years 2019 financial statements to conform to current year presentation.
 reclassifications no effect on previously reported net income.
 on march 5 , 2008  company acquired outstanding capital stock of greenline financial technologies , inc.
 ( 201cgreenline 201d ) illinois-based provider of integration  testing management solutions for fix-related products services to optimize electronic trading of fixed-income equity exchange-based products and approximately ten percent of outstanding capital stock of tradehelm , inc. a delaware corporation spun-out from greenline prior to acquisition.
 acquisition of greenline broadens range of technology services company offers to institutional financial markets expansion of company 2019s client base including global exchanges hedge funds diversifies company 2019s revenues beyond core electronic credit trading products.
 results of operations of greenline included in consolidated financial statements from date of acquisition.
 aggregate consideration for greenline acquisition was $ 41. 1 million  of $ 34. 7 million in cash , 725923 shares of common stock valued at $ 5. 8 million $ 0. 6 million of acquisition-related costs.
 sellers eligible to receive up to aggregate of $ 3. 0 million in cash  subject to greenline attaining earn- out targets in 2008 and 2009.
 total of $ 1. 4 million paid to sellers in 2009 based on 2008 earn-out target aggregate consideration to $ 42. 4 million.
 2009 earn-out target not met.
 total of $ 2.0 million of purchase price  deposited into escrow accounts to satisfy potential indemnity claims distributed to sellers in march 2009.
 shares of common stock issued to each selling shareholder of greenline released in two equal installments on december 20 , 2008 and december 20 , 2009  respectively.
 value ascribed to shares discounted from market value to reflect non-marketability of shares during restriction period.
 purchase price allocation as follows ( in thousands ) : amortizable intangibles include $ 3. 2 million of acquired technology , $ 3. 3 million of customer relationships , $ 1. 3 million of non-competition agreements $ 0. 5 million of tradenames.
 useful lives of ten years and five years assigned to customer relationships intangible and all other amortizable intangibles.
 identifiable intangible assets and goodwill not deductible for tax purposes.
 unaudited pro forma consolidated financial information reflects results of operations company for years ended december 31, 2008 and 2007 if acquisition of greenline occurred of beginning of period presented after effect certain purchase accounting adjustments.
 pro forma results not necessarily indicative of company 2019s operating results had acquisition taken place of beginning of earliest period presented.
 pro forma financial information 3.
 acquisitions.

cash                                                   | $ 6406
------------------------------------------------------ | --------------
accounts receivable                                    | 2139
amortizable intangibles                                | 8330
goodwill                                               | 29405
deferred tax assets net                                | 3410
other assets including investment in tradehelm         | 1429
accounts payable accrued expenses and deferred revenue | -8701 ( 8701 )
total purchase price                                   | $ 42418


challenging investment environment $ 15. 0 billion 95% ( 95 % ) net inflows from institutional clients remaining $ 0. 8 billion 5% ( 5 % ) generated by retail hnw clients.
 defined contribution plans of institutional clients significant driver of flows.
 client group added $ 13. 1 billion net new business in 2012.
 americas net inflows of $ 18. 5 billion partially offset by net outflows $ 2. 6 billion from emea asia-pacific clients.
 company 2019s multi-asset strategies include 2022 asset allocation balanced products represented 52% ( 52 % ) or $ 140. 2 billion  of multi-asset class aum at year-end up $ 14. 1 billion  growth aum driven by net new business $ 1. 6 billion $ 12. 4 billion market foreign exchange gains.
 strategies combine equity fixed income alternative components for investors seeking tailored solution specific benchmark risk budget.
 strategies minimize downside risk through diversification derivatives strategies tactical asset allocation decisions.
 2022 target date target risk products ended year at $ 69. 9 billion  up $ 20. 8 billion  or 42% ( 42 % )  since december 31 , 2011.
 growth in aum driven by net new business of $ 14. 5 billion  year-over-year organic growth rate of 30% ( 30 % ).
 institutional investors represented 90% ( 90 % ) of target date target risk aum defined contribution plans for over 80% ( 80 % ) of aum.
 remaining 10% ( 10 % ) target date target risk aum of retail client investments.
 flows driven by defined contribution investments in lifepath lifepath retirement income ae offerings qualified investment options under pension protection act of 2006.
products utilize proprietary asset allocation model risk return investment based on investor 2019s expected retirement timing.
 2022 fiduciary management services accounted for 22% ( 22 % )  or $ 57. 7 billion  of multi-asset aum at december 31 , 2012 increased $ 7. 7 billion due to market foreign exchange gains.
 complex mandates pension plan sponsors retain blackrock to assume responsibility for plan management.
 customized services require partnership with clients 2019 investment staff trustees to tailor investment strategies meet client-specific risk budgets return objectives.
 alternatives component changes in alternatives aum ( dollar amounts in millions ) 12/31/2011 net new business acquired market /fx app ( dep ) 12/31/2012.
 alternatives aum totaled $ 109. 8 billion at year-end 2012  up $ 4. 8 billion  or 5% ( 5 % ) reflecting $ 3. 3 billion in portfolio valuation gains $ 7. 0 billion new assets related to acquisitions of srpep  deepened alternatives footprint in european asian markets claymore.
 core alternative outflows of $ 3. 9 billion driven by return of capital to clients.
 currency net outflows of $ 5. 0 billion partially offset by net inflows of $ 3. 5 billion into ishares commodity funds.
 significant investments in alternatives platform demonstrated by acquisition of srpep  successful closes on renewable power initiative build out alternatives retail platform now stands at nearly $ 10. 0 billion in aum.
 believe as alternatives become more conventional investors adapt asset allocation strategies investment objectives will increase use of alternative investments complement core holdings.
 institutional investors represented 69% ( 69 % ) , or $ 75.8 billion  alternatives aum retail hnw investors additional 9% ( 9 % )  or $ 9. 7 billion  at year-end 2012.
 ishares commodity products accounted remaining $ 24. 3 billion  or 22% ( 22 % )  of aum year-end.
 alternative clients geographically diversified 56% ( 56 % ) , 26% ( 26 % )  18% ( 18 % ) clients in americas  emea asia-pacific.
 blackrock alternative investors ( 201cbai 201d ) group coordinates alternative investment efforts

( dollar amounts in millions ) | 12/31/2011 | net new business | net acquired | market /fx app ( dep ) | 12/31/2012
------------------------------ | ---------- | ---------------- | ------------ | ---------------------- | ----------
core                           | $ 63647    | $ -3922 ( 3922 ) | $ 6166       | $ 2476                 | $ 68367
currency and commodities       | 41301      | -1547 ( 1547 )   | 860          | 814                    | 41428
alternatives                   | $ 104948   | $ -5469 ( 5469 ) | $ 7026       | $ 3290                 | $ 109795


republic services , inc.
 notes to consolidated financial statements 2014 continued in december 2008  board of directors amended restated republic services  inc.
 2006 incentive stock plan ( formerly known as allied waste industries , inc.
 2006 incentive stock plan ( 2006 plan ) ).
 allied 2019s shareholders approved 2006 plan in may 2006.
 2006 plan amended restated in december 2008 to reflect republic as new sponsor plan references to shares of common stock are shares common stock of republic adjust outstanding awards number of shares available under plan to reflect allied acquisition.
 2006 plan  amended restated provided for grant of non- qualified stock options  incentive stock options  shares of restricted stock shares phantom stock stock bonuses  restricted stock units  stock appreciation rights  performance awards  dividend equivalents  cash awards other stock-based awards.
 awards granted under 2006 plan prior to december 5 , 2008 became fully vested nonforfeitable upon closing of allied acquisition.
 no further awards made under 2006 stock options use lattice binomial option-pricing model to value stock option grants.
 recognize compensation expense on straight-line basis over requisite service period for each separately vesting portion of award to employee 2019s retirement eligible date earlier.
 expected volatility based on weighted average of most recent one year volatility historical rolling average volatility of stock over expected life of option.
 risk-free interest rate based on federal reserve rates effect for bonds with maturity dates equal to expected term of option.
 use historical data to estimate future option exercises  forfeitures ( at 3. 0% ( 3. 0 % ) for each periods presented ) expected life of options.
 appropriate separate groups of employees similar historical exercise behavior considered separately for valuation purposes.
 weighted-average estimated fair values of stock options granted during years ended december 31 , 2014 , 2013 2012 were $ 5. 74 , $ 5. 27 $ 4. 77 per option  calculated using weighted-average assumptions:.

| 2014             | 2013             | 2012
----------------------------- | ---------------- | ---------------- | ----------------
expected volatility           | 27.5% ( 27.5 % ) | 28.9% ( 28.9 % ) | 27.8% ( 27.8 % )
risk-free interest rate       | 1.4% ( 1.4 % )   | 0.7% ( 0.7 % )   | 0.8% ( 0.8 % )
dividend yield                | 3.2% ( 3.2 % )   | 3.2% ( 3.2 % )   | 3.2% ( 3.2 % )
expected life ( in years )    | 4.6              | 4.5              | 4.5
contractual life ( in years ) | 7.0              | 7.0              | 7.0


stock performance graph compares recent five-year performance alcoa 2019s common stock with 1 standard & poor 2019s 500 ae index 2 standard poor 2019s 500 ae materials index  group of 27 companies categorized active in 201cmaterials 201d market sector.
 information not deemed 201cfiled. 201d five-year cumulative total return initial investment $ 100 december 31, 2010 dividends reinvested alcoa inc.
 s&p 500 ae index s&p 500 ae materials index dec-'10 dec-'11 dec-'12 dec-'14 dec-'15dec-'13.
 s&p 500 ae index 100 102 118 157 178 181 s&p 500 ae materials index 100 90 104 130 139 128 copyright a9 2016 standard & poor 2019s  division of mcgraw-hill companies inc.
 all rights reserved.
 source : research data group , inc.
 ( www. researchdatagroup. com/s&p. htm )

as of december 31,        | 2010  | 2011 | 2012 | 2013 | 2014  | 2015
------------------------- | ----- | ---- | ---- | ---- | ----- | ----
alcoainc .                | $ 100 | $ 57 | $ 58 | $ 72 | $ 107 | $ 68
s&p 500 aeindex           | 100   | 102  | 118  | 157  | 178   | 181
s&p 500 aematerials index | 100   | 90   | 104  | 130  | 139   | 128


earnings first quarter of 2007 expected lower than fourth quarter 2006.
 containerboard export sales volumes expected decline due to scheduled first-quarter main- tenance outages.
 sales volumes for.
 converted products higher due to more shipping days expected softer demand cause ship- ments per day decrease.
 average sales price real- izations expected comparable to fourth- quarter averages.
 additional containerboard price increase announced in january expected fully realized in second quarter.
 costs for wood  energy  starch adhesives freight expected increase.
 manufacturing costs higher due to costs scheduled main- tenance outages containerboard mills.
 euro- pean container operating results expected improve as seasonally higher sales volumes improved margins offset higher manufacturing costs.
 consumer packaging demand pricing correlate with consumer spending general economic activity.
 prices volumes major factors affecting profitability consumer packaging raw material energy costs manufacturing efficiency product mix.
 consumer packaging net sales increased 9% ( 9 % ) compared with 2005 7% ( 7 % ) compared with 2004.
 operating profits rose 8% ( 8 % ) from 2005 declined 15% ( 15 % ) from 2004 levels.
 compared with 2005 higher sales volumes ( $ 9 million ) improved average sales price realizations ( $ 33 million ) reduced lack-of-order downtime ( $ 18 million ) favorable mill oper- ations ( $ 25 million ) partially offset by higher raw material costs ( $ 19 million ) freight costs ( $ 21 million ) unfavorable mix ( $ 14 million ) other costs ( $ 21 million ).
 consumer packaging in millions 2006 2005 2004.
 coated paperboard net sales of $ 1. 5 billion in 2006 higher than $ 1. 3 billion in 2005 $ 1. 1 billion in 2004.
sales volumes increased 2006 compared with 2005 particularly folding car- ton board segment reflecting improved demand for coated paperboard products.
 2006 coated paperboard mills took 4000 tons of lack-of-order downtime compared with 82000 tons in 2005.
 average sales price realizations improved principally for folding carton board and cupstock board.
 operating profits 51% ( 51 % ) higher in 2006 than 2005 7% ( 7 % ) better than 2004.
 impact of higher sales prices favorable manufacturing operations due to strong performance at mills offset higher input costs for energy freight.
 foodservice net sales declined to $ 396 million in 2006 compared with $ 437 million in 2005 $ 480 million in 2004 due principally to sale of jackson , tennessee plant in july 2005.
 sales vol- umes lower in 2006 than 2005 average sales prices higher due to price increases implemented during 2005.
 operating profits for 2006 improved over 2005 and 2004 levels due to benefits from higher sales prices.
 raw material costs for bleached board higher than 2005 manufacturing costs more favorable due to increased productivity reduced waste.
 shorewood net sales of $ 670 million down from $ 691 million in 2005 and $ 687 million in 2004.
 sales volumes 2006 down from 2005 levels due to weak demand in home entertainment consumer products markets demand strong in tobacco segment.
 average sales prices year lower than 2005.
 operating prof- its down significantly from 2005 and 2004 due to decline in sales particularly in higher margin home entertainment markets higher raw material costs for bleached board inventory adjustment costs.
 entering 2007  coated paperboard first-quarter sales volumes expected to be seasonally stronger than fourth quarter 2006 for folding carton board and bristols.
 average sales price realizations expected to rise with price increase announced in january.
anticipated manufacturing costs improve versus unfavorable fourth quarter.
 foodservice earnings for first quarter of 2007 expected to decline due to seasonally weaker vol- ume.
 , sales price realizations slightly higher , seasonal switch to hot cup contain- ers favorable impact on product mix.
 shorewood sales volumes for first quarter of 2007 expected to seasonally decline , earnings impact partially offset by pricing improvements improved product mix.
 distribution our distribution business , principally represented by xpedx business , markets diverse array of products supply chain services to customers in

in millions      | 2006   | 2005   | 2004
---------------- | ------ | ------ | ------
sales            | $ 2455 | $ 2245 | $ 2295
operating profit | $ 131  | $ 121  | $ 155


aes corporation notes to consolidated financial statements 2014 ( continued ) december 31 , 2017 , 2016  2015 dispatched starting in february 2018.
 aes puerto rico lowest cost and epa compliant energy provider in puerto rico.
 expect aes puerto rico to continue critical supplier to prepa.
 starting prior to hurricanes  prepa facing economic challenges could impact company on july 2 , 2017  filed for bankruptcy under title iii.
 result bankruptcy filing aes puerto rico and aes ilumina 2019s non-recourse debt of $ 365 million and $ 36 million  respectively is in default classified as current as of december 31 , 2017.
 in november 2017  aes puerto rico signed forbearance and standstill agreement with lenders to prevent lenders from action against company due to default events.
 agreement expire on march 22 , 2018.
 company's receivable balances in puerto rico as of december 31, 2017 totaled $ 86 million  $ 53 million overdue.
 after filing of title iii protection  until disruption by hurricanes aes in puerto rico was collecting overdue amounts from prepa in line with historic payment patterns.
 considering information filing date management believes carrying amount of assets in puerto rico of $ 627 million is recoverable as of december 31 , 2017 no reserve on receivables required.
 foreign currency risks 2014 aes operates businesses in many foreign countries operations could be impacted by significant fluctuations in foreign currency exchange rates.
 fluctuations in currency exchange rate between.
 dollar and following currencies could create significant fluctuations in earnings and cash flows : argentine peso  brazilian real  dominican republic peso  euro  chilean peso  colombian peso  philippine peso.
concentrations 2014 due to geographical diversity of operations , company have significant concentration of customers or sources of fuel supply.
 several company's generation businesses rely on ppas with one or limited number of customers for majority of in some all of relevant businesses' output over term of ppas.
 no single customer accounted for 10% ( 10 % ) or more of total revenue in 2017 , 2016 or 2015.
 cash flows and results of operations of businesses depend on credit quality of customers and continued ability of customers suppliers to meet obligations under ppas and fuel supply agreements.
 if substantial portion of company's long-term ppas and/or fuel supply were modified or terminated, company would be adversely affected to unable to replace such contracts at equally favorable terms.
 26.
 related party transactions certain businesses in panama and dominican republic partially owned by governments directly or through state-owned institutions.
 these businesses enter into energy purchase and sale transactions  and transmission agreements with other state-owned institutions controlled by governments.
 at two of generation businesses in mexico  offtakers exercise significant influence , but not control  through representation on businesses' boards of directors.
 offtakers also required to hold nominal ownership interest in such businesses.
 in chile , we provide capacity and energy under contractual arrangements to our investment accounted for under equity method of accounting.
 company provides support and management services to affiliates under various agreements.
 company's consolidated statements of operations included following transactions with related parties for periods indicated ( in millions ) :.

years ended december 31,        | 2017   | 2016   | 2015
------------------------------- | ------ | ------ | ------
revenue 2014non-regulated       | $ 1297 | $ 1100 | $ 1099
cost of sales 2014non-regulated | 220    | 210    | 330
interest income                 | 8      | 4      | 25
interest expense                | 36     | 39     | 33


costs.
 2012 results lower than 2011 realized $ 53. 1 million in premium-services margins storage and marketing margins consisted of $ 96. 0 million from realized seasonal price differentials and marketing optimization activities $ 87. 7 million of storage demand costs.
 in recognized loss on change in fair value of nonqualifiying economic storage hedges of $ 1. 0 million in 2012 compared with gain of $ 8. 5 million in 2011.
 premium services impacted negatively by lower natural gas prices decreased natural gas price volatility.
 impact of hedge strategies inability to hedge seasonal price differentials at levels available in prior year reduced storage margins.
 experienced reduced opportunities to optimize storage assets negatively impacted marketing margins.
 realized loss in transportation margins of $ 42. 4 million in 2012 compared with loss of $ 18. 8 million in 2011 due primarily to $ 29. 5 million decrease in transportation hedges.
 transportation business to impacted by narrow price location differentials inability to hedge at levels available in prior years.
 result of significant increases in supply of natural gas , primarily from shale gas production across north america new pipeline infrastructure projects, location and seasonal price differentials narrowed significantly beginning in 2010 through 2012.
 market change resulted in transportation contracts unprofitable impacting ability to recover fixed costs.
 operating costs decreased due primarily to lower employee-related expenses includes impact of fewer employees.
 recognized expense of $ 10. 3 million related to impairment of goodwill in first quarter 2012.
 given significant decline in natural gas prices effect on location and seasonal price differentials performed interim impairment assessment in first quarter 2012 reduced goodwill balance to zero.
 2011 vs.
2010 - factors discussed in energy services 2019 201cnarrative description of business 201d included in item i , business , annual report led to significant decrease in net margin  including : 2022 decrease of $ 65. 3 million in transportation margins  net of hedging  due to narrower location price differentials lower hedge settlements in 2011 ; 2022 decrease of $ 34. 3 million in storage and marketing margins  net of hedging activities due to 2013 lower realized seasonal storage price differentials offset by 2013 favorable marketing activity unrealized fair value changes on nonqualifying economic storage hedges ; 2022 decrease of $ 7. 3 million in premium-services margins associated with reduction in value fees collected for services low commodity prices reduced natural gas price volatility in first quarter 2011 compared first quarter 2010 ; 2022 decrease of $ 4. 3 million in financial trading margins  low natural gas prices reduced natural gas price volatility limited financial trading opportunities.
 2011 net margin includes $ 91. 1 million in adjustments to natural gas inventory reflecting lower cost or market value.
 adjustments reclassified $ 91. 1 million of deferred gains on cash flow hedges into earnings.
 operating costs decreased due to decrease in ad valorem taxes.
 selected operating information - following table sets forth selected operating information for energy services segment for periods indicated:.
 natural gas volumes marketed and physically settled volumes decreased in 2012 compared with 2011 due to decreased marketing activities lower transported volumes reduced transportation capacity.
 decrease in 2011 compared with 2010 due primarily to lower volumes transported reduced transportation capacity.
 transportation capacity in certain markets not utilized due to economics location price differentials increased supply of natural gas  primarily from shale production increased pipeline capacity new pipeline construction.

operating information               | years ended december 31 , 2012 | years ended december 31 , 2011 | years ended december 31 , 2010
----------------------------------- | ------------------------------ | ------------------------------ | ------------------------------
natural gas marketed ( bcf )        | 709                            | 845                            | 919
natural gas gross margin ( $ /mcf ) | $ -0.07 ( 0.07 )               | $ 0.06                         | $ 0.18
physically settled volumes ( bcf )  | 1433                           | 1724                           | 1874


worldwide distribution channels table presents number of doors by geographic location ralph lauren-branded products distributed by our wholesale segment sold to consumers in primary channels distribution as of march 31 , 2012 : location number.
 american living and chaps-branded products our wholesale segment sold domestically through approximately 1800 doors as of march 31 , 2012.
 three key wholesale customers generate significant sales volume.
 for fiscal 2012  these customers accounted for approximately 40% ( 40 % ) of total wholesale revenues with macy 2019s , inc.
 representing approximately 20% ( 20 % ) of total wholesale revenues.
 our product brands sold primarily through our own sales forces.
 wholesale segment maintains primary showrooms in new york city.
 maintain regional showrooms in chicago, dallas , milan , paris , london , munich  madrid  stockholm tokyo.
 shop-within-shops.
 critical element of distribution to department stores licensing partners utilize shop-shops to enhance brand recognition permit complete merchandising of lines differentiate presentation of products.
 shop-within- shop fixed assets include items customized freestanding fixtures  wall cases and components decorative items and flooring.
 as of march 31 , 2012 had approximately 18000 shop-within-shops dedicated to our ralph lauren-branded wholesale products worldwide.
 size of shop-within-shops ranges from approximately 300 to 7400 square feet.
 share in cost of building-out shop-within-shops with wholesale customers.
 basic stock replenishment program.
basic products knit shirts chino pants oxford cloth shirts selected accessories ( including footwear ) home products can be ordered through our basic stock replenishment programs.
 we generally ship these products within two-to-five days of order receipt.
 retail segment as of march 31 , 2012  consisted of 379 stores worldwide totaling approximately 2. 9 million gross square feet 474 concessions- based shop-within-shops six e-commerce websites.
 extension of direct-to-consumer reach is a primary long-term strategic goal.
 ralph lauren retail stores reinforce luxury image distinct sensibility of brands feature exclusive lines not sold in domestic department stores.
 opened 10 new ralph lauren stores acquired 3 previously licensed stores closed 16 ralph lauren stores in fiscal 2012.
 retail stores primarily situated in major upscale street locations upscale regional malls generally in large urban markets.

location     | number of doors
------------ | ---------------
the americas | 6587
europe       | 4377
asia         | 83
total        | 11047


vornado realty trust 77 cash flows company expects contribute $ 959000 to plans in 2004.
 11.
 leases as lessor : company leases space to tenants under operating leases.
 most leases provide for payment of fixed base rentals payable monthly in advance.
 shopping center leases provide pass-through to tenants of real estate taxes  insurance maintenance.
 office building leases require tenants reimburse company for operating costs real estate taxes above base year costs.
 shopping center leases provide payment lessee of additional rent based on percentage tenants 2019 sales.
 as of december 31 , 2003  future base rental revenue under non-cancelable operating leases excluding rents for leases original term less than one year rents from exercise renewal options follows : ( amounts in thousands ) year ending december 31:.
 amounts do not include rentals based on tenants 2019 sales.
 percentage rents approximated $ 3662000 , $ 1832000  $ 2157000  for years ended december 31 , 2003  2002 2001.
 except for.
 government  accounted for 12. 7%. ) of company 2019s revenue none company 2019s tenants represented more than 10% ( % ) of total revenues for year ended december 31 , 2003.
 former bradlees locations property rentals for year ended december 31 , 2003 include $ 5000000 of additional rent effective december 31 , 2002 re-allocated to former bradlees locations in marlton , turnersville  bensalem broomall payable by stop & shop  master agreement and guaranty  dated may 1 , 1992.
 amount in addition to all other rent guaranteed by stop & shop for former bradlees locations.
january 8 , 2003 , stop & shop filed complaint with united states district court claiming company no right to reallocate continue collect $ 5000000 annual rent from stop & shop because of expiration of east brunswick , jersey city , middletown , union woodbridge leases $ 5000000 additional rent previously allocated.
 company believes additional rent provision guaranty expires earliest in 2012 will oppose stop & shop 2019s complaint.
 february 2003 , koninklijke ahold nv , parent of stop & shop , announced overstated 2002 and 2001 earnings by least $ 500 million under investigation by u. s.
 justice department securities and exchange commission.
 company cannot predict effect  situation may have on stop & shop 2019s ability to satisfy obligation under bradlees guarantees rent for existing stop & shop leases aggregating approximately $ 10. 5 million per annum.
 notes to consolidated financial statements sr-176_fin_l02p53_82v1. qxd 4/8/04 2:42 pm page 77

2004       | $ 1084934
---------- | ---------
2005       | 968162
2006       | 846345
2007       | 770228
2008       | 608267
thereafter | 3423083


9.
 junior subordinated debt securities payable provisions issued march 29 , 2004 , holdings elected redeem $ 329897 thousand of 6. 2% ( 6. 2 % ) junior subordinated debt securities outstanding on may 24 , 2013.
 result early redemption company incurred pre-tax expense of $ 7282 thousand related to immediate amortization of remaining capitalized issuance costs on trust preferred securities.
 interest expense incurred junior subordinated debt securities is follows for periods indicated:.
 holdings considered mechanisms obligations relating to trust preferred securities constituted full unconditional guarantee by holdings of capital trust ii 2019s payment obligations trust preferred securities.
 10.
 reinsurance and trust agreements certain subsidiaries of group have established trust agreements use company 2019s investments as collateral  security for assumed losses payable to certain non-affiliated ceding companies.
 at december 31 , 2015  total amount on deposit in trust accounts was $ 454384 thousand.
 on april 24 , 2014 , company entered two collateralized reinsurance agreements with kilimanjaro re limited ( 201ckilimanjaro 201d ), bermuda based special purpose reinsurer  provide company catastrophe reinsurance coverage.
 agreements are multi-year reinsurance contracts cover specified named storm and earthquake events.
 first agreement provides up to $ 250000 thousand of reinsurance coverage from named storms in specified states of southeastern united states.
second agreement provides $ 200000 thousand reinsurance coverage from named storms in specified states southeast mid-atlantic northeast regions united states puerto rico reinsurance coverage from earthquakes in specified states southeast mid-atlantic northeast west regions united states  puerto rico british columbia.
 on november 18 , 2014  company entered collateralized reinsurance agreement with kilimanjaro re catastrophe reinsurance coverage.
 agreement is multi-year reinsurance contract covers specified earthquake events.
 agreement provides up to $ 500000 thousand reinsurance coverage from earthquakes in united states  puerto rico canada.
 on december 1, 2015 company entered two collateralized reinsurance agreements with kilimanjaro re catastrophe reinsurance coverage.
 agreements are multi-year reinsurance contracts cover named storm earthquake events.
 first agreement provides $ 300000 thousand reinsurance coverage from named storms earthquakes in united states  puerto rico canada.
 second agreement provides up $ 325000 thousand reinsurance coverage from named storms earthquakes in united states  puerto rico canada.
 kilimanjaro financed property catastrophe reinsurance coverage by issuing catastrophe bonds to unrelated external investors.
 on april 24 , 2014  kilimanjaro issued $ 450000 thousand of notes ( 201cseries 2014-1 notes 201d ).
 on november 18 , 2014  kilimanjaro issued $ 500000 thousand of notes ( 201cseries 2014-2 notes 201d ).
 december 1 , 2015  kilimanjaro issued $ 625000 thousand of notes ( 201cseries 2015-1 notes ).
proceeds from issuance of series 2014-1 notes , 2014-2 notes series 2015-1 notes held in reinsurance trust throughout duration applicable reinsurance agreements invested solely in us government money market funds with rating of at least 201caaam 201d by standard & poor 2019s.

( dollars in thousands )  | years ended december 31 , 2015 | years ended december 31 , 2014 | years ended december 31 , 2013
------------------------- | ------------------------------ | ------------------------------ | ------------------------------
interest expense incurred | $ -                            | $ -                            | $ 8181


issuer purchases of equity securities during three months ended december 31, 2012  repurchased 619314 shares of common stock for aggregate approximately $ 46. 0 million , including commissions and fees pursuant to our publicly announced stock repurchase program follows : period total number of shares purchased 1 ) average price paid per share ( 2 ) total number of shares purchased as part of publicly announced plans or programs approximate dollar value of shares be purchased under plans or programs ( in millions ).
 repurchases made to $ 1. 5 billion stock repurchase program approved by board of directors in march 2011 ( 201c2011 buyback 201d ).
 under program management authorized to purchase shares through open market purchases or privately negotiated transactions at prevailing prices as permitted by securities laws other legal requirements subject to market conditions other factors.
 facilitate repurchases make purchases pursuant trading plans under rule 10b5-1 of exchange act  allows to repurchase shares during periods prevented from under insider trading laws or self-imposed trading blackout periods.
 program may be discontinued any time.
 average price per share calculated using aggregate price  excluding commissions and fees.
 continued to repurchase shares common stock pursuant to 2011 buyback subsequent to december 31 , 2012.
 between january 1 , 2013 and january 21 , 2013  repurchased additional 15790 shares common stock for aggregate of $ 1. 2 million , including commissions and fees pursuant to 2011 buyback.
 as of january 21 , 2013  had repurchased total of approximately 4. 3 million shares of common stock under 2011 buyback for aggregate of $ 245. 2 million , including commissions and fees.
expect to continue manage pacing remaining $ 1. 3 billion under 2011 buyback in response to general market conditions other relevant factors.

period               | total number of shares purchased ( 1 ) | average price paid per share ( 2 ) | total number of shares purchased as part of publicly announced plans orprograms | approximate dollar value of shares that may yet be purchased under the plans orprograms ( in millions )
-------------------- | -------------------------------------- | ---------------------------------- | ------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------
october 2012         | 27524                                  | $ 72.62                            | 27524                                                                           | $ 1300.1
november 2012        | 489390                                 | $ 74.22                            | 489390                                                                          | $ 1263.7
december 2012        | 102400                                 | $ 74.83                            | 102400                                                                          | $ 1256.1
total fourth quarter | 619314                                 | $ 74.25                            | 619314                                                                          | $ 1256.1


management 2019s discussion analysis results of reportable business segments net sales segment income ( millions ) 2008 2007.
 performance coatings sales increased $ 905 million or 24% ( 24 % ) in 2008.
 sales increased 21% ( 21 % ) due to acquisitions largely due impact sigmakalon protective marine coatings business.
 sales grew by 3% ( 3 % ) due to higher selling prices 2% ( 2 % ) to positive impact foreign currency translation.
 sales volumes declined 2% ( 2 % ) as reduced volumes in architectural coatings 2013 americas asia pacific automotive refinish not offset by improved volumes in aerospace protective marine businesses.
 volume growth in aerospace businesses throughout world volume growth in protective marine coatings primarily in asia.
 segment income increased $ 19 million in 2008.
 factors increasing segment income positive impact acquisitions lower overhead costs positive impact foreign currency translation.
 benefit higher selling prices offset negative impact of inflation higher raw materials benefit costs.
 segment income reduced by impact lower sales volumes in architectural coatings automotive refinish offset volume gains in aerospace protective marine coatings businesses.
 industrial coatings sales increased $ 353 million or 10% ( 10 % ) in 2008.
 sales increased 11% ( 11 % ) due to acquisitions including impact sigmakalon industrial coatings business.
 sales grew 3% ( 3 % ) due to positive impact foreign currency translation 1% ( 1 % ) from higher selling prices.
 sales volumes declined 5% ( 5 % ) as reduced volumes experienced in all three businesses reflecting substantial declines in global demand.
 volume declines in automotive industrial businesses primarily in u. s.
 canada.
 additional volume declines in european asian regions experienced by industrial coatings business.
packaging coatings volume declines in europe partially offset by gains in asia north america.
 segment income declined $ 158 million in 2008 due to lower volumes inflation higher raw material freight costs impact partially mitigated by increased selling prices.
 segment income declined due to higher selling distribution costs higher bad debt expense.
 factors increasing segment income were earnings of acquired businesses positive impact foreign currency translation lower manufacturing costs.
 architectural coatings - emea sales year were $ 2249 million.
 business acquired in sigmakalon acquisition.
 segment income was $ 141 million included amortization expense $ 63 million acquired intangible assets depreciation expense $ 58 million.
 optical specialty materials sales increased $ 105 million or 10% ( 10 % ) in 2008.
 sales increased 5% ( 5 % ) due to higher volumes optical products business from launch of transitions optical 2019s next generation lens product 3% ( 3 % ) due to positive impact foreign currency translation 2% ( 2 % ) due to increased selling prices.
 segment income increased $ 9 million in 2008.
 increase result of increased sales volumes favorable impact currency partially offset by increased selling marketing costs in optical products business to transitions optical product launch.
 increased selling prices partially offset higher raw material costs silicas business.
 commodity chemicals sales increased $ 298 million or 19% ( 19 % ) in 2008.
 sales increased 18% ( 18 % ) due to higher selling prices 1% ( 1 % ) due to improved sales volumes.
 segment income increased $ 97 million in 2008.
 income increased due to higher selling prices offset negative impact inflation higher raw material energy costs.
 income improved due to lower manufacturing costs lower margin mix equity earnings reduced segment income.
 glass sales decreased $ 281 million or 13% ( 13 % ) in 2008.
sales decreased 11% ( 11 % ) due to divestiture automotive glass and services business september 2008 4% ( 4 % ) due lower sales volumes.
 sales increased 2% ( 2 % ) due to higher selling prices.
 segment income decreased $ 68 million 2008.
 segment income decreased due to divestiture automotive glass services business lower volumes negative impact inflation lower equity earnings from asian fiber glass joint ventures.
 factors increasing segment income were lower manufacturing costs  higher selling prices stronger foreign currency.
 outlook overall global economic activity volatile in 2008 overall downward trend.
 north american economy continued slowing trend began second half 2006 continued 2007.
 impact weakening u. s.
 economy particularly 2008 ppg annual report form 10-k 17

( millions ) performance coatings | net sales 2008 $ 4716 | 2007 $ 3811 | segment income 2008 $ 582 | 2007 $ 563
--------------------------------- | --------------------- | ----------- | ------------------------- | ----------
industrial coatings               | 3999                  | 3646        | 212                       | 370
architectural coatings 2013 emea  | 2249                  | 2014        | 141                       | 2014
optical and specialty materials   | 1134                  | 1029        | 244                       | 235
commodity chemicals               | 1837                  | 1539        | 340                       | 243
glass                             | 1914                  | 2195        | 70                        | 138


part ii , item 7 until maturity  making us dollar denominated debt schlumberger pay interest in us dollars at rate of 4. 74% ( 4. 74 % ).
 proceeds from notes used to repay commercial paper borrowings.
 0160 on april 20 , 2006  schlumberger board of directors approved share repurchase program of up to 40 million shares of common stock acquired open market before april 2010  subject to market conditions.
 program completed during second quarter of 2008.
 on april 17 , 2008  schlumberger board of directors approved $ 8 billion share repurchase program for shares schlumberger common stock acquired open market before december 31, 2011  $ 1. 43 billion repurchased as of december 31 , 2009.
 table summarizes activity under share repurchase programs during 2009 , 2008 and ( stated in thousands except per share amounts and prices ) total cost of shares purchased total number of shares purchased average price paid per share.
 0160 cash flow by operations was $ 5. 3 billion in 2009 , $ 6. 9 billion in 2008 $ 6. 3 billion in 2007.
 decline in cash flow from operations in 2009 compared to 2008 driven by decrease in net income 2009 and significant pension plan contributions 2009 offset by improvement in working capital requirements.
 improvement in 2008 compared to 2007 driven by net income increase in 2008 offset by required investments in working capital.
 reduction in cash flows experienced by schlumberger 2019s customers result of global economic conditions could have adverse effects on financial condition.
 could result in delay in or nonpayment of amounts owed to schlumberger  could material adverse effect on schlumberger 2019s results of operations and cash flows.
 in recent quarters schlumberger experienced delays in payments from certain customers.
schlumberger operates in 80 countries.
 december 31 , 2009 three countries accounted for greater than 5% ( 5 % ) of schlumberger accounts receivable balance one represented greater than 0160 during 2008 and 2007 schlumberger announced board directors approved increases in quarterly dividend of 20% ( 20 % ) and 40% ( 40 % ).
 total dividends paid during 2009  2008 2007 were $ 1. 0 billion , $ 964 million $ 771 million .
 0160 capital expenditures were $ 2. 4 billion in 2009 $ 3. 7 billion in 2008 $ 2. 9 billion in 2007.
 capital expenditures 2008 and 2007 reflected record activity levels.
 decrease in capital expenditures in 2009 due to significant activity decline during 2009.
 oilfield services capital expenditures expected to approach $ 2. 4 billion for full year 2010 compared to $ 1. 9 billion in 2009 $ 3. 0 billion in 2008.
 westerngeco capital expenditures expected approach $ 0. 3 billion for full year 2010 compared to $ 0. 5 billion 2009 $ 0. 7 billion in 2008.

| total cost of shares purchased | total number of shares purchased | average price paid per share
---- | ------------------------------ | -------------------------------- | ----------------------------
2009 | $ 500097                       | 7825.0                           | $ 63.91
2008 | $ 1818841                      | 21064.7                          | $ 86.35
2007 | $ 1355000                      | 16336.1                          | $ 82.95


three-year period determined ownership of persons holding five percent ( 5% ) or more company 2019s equity securities.
 if company undergoes ownership change defined by i. r. c.
 section 382  company 2019s ability to utilize pre-change nol carryforwards to offset post-change income may be limited.
 company believes limitation by i. r. c.
 section 382 should not preclude use of federal nol carryforwards  assuming company sufficient taxable income in future carryforward periods to utilize nol carryforwards.
 company 2019s federal nol carryforwards not begin expiring until 2028.
 at december 31 , 2014 and 2013  company had state nols of $ 542705 and $ 628049  portion offset by valuation allowance because company not believe nols more likely than not to be realized.
 state nol carryforwards expire between 2015 and 2033.
 december 31 , 2014 and 2013 company had canadian nol carryforwards of $ 6498 and $ 6323 .
 majority carryforwards offset by valuation allowance company not believe nols more likely than not be realized.
 canadian nol carryforwards expire between 2015 and 2033.
 company had capital loss carryforwards for federal income tax purposes of $ 3844 at december 31, 2014 and 2013.
 company recognized full valuation allowance for capital loss carryforwards because company does not believe losses more likely than not to be recovered.
 company files income tax returns in united states federal jurisdiction and various state and foreign jurisdictions.
 few exceptions company no longer subject to u. s.
 federal , state local non-u. s.
 income tax examinations by tax authorities for years before 2008.
 for u. s.
 federal , tax year 2011 closed.
 company has state income tax examinations in progress not expect material adjustments result.
 patient protection and affordable care act ( 201cppaca 201d ) became law on march 23 , 2010 , and health care and education reconciliation act of 2010 became law on march 30 , 2010 , makes amendments to aspects of ppaca ( together , 201cacts 201d ).
 ppaca changes tax treatment of federal subsidies paid to sponsors of retiree health benefit plans benefit actuarially equivalent to benefits under medicare part d.
 acts make subsidy payments taxable in tax years beginning after december 31, 2012 company followed original accounting for underfunded status of other postretirement benefits for medicare part d adjustment recorded reduction in deferred tax assets and increase in regulatory assets amounting to $ 6348 and $ 6241 at december 31 , 2014 and 2013 ,.
 following table summarizes changes in company 2019s gross liability , excluding interest and penalties , for unrecognized tax benefits:.
 total balance in table does not include interest and penalties of $ 157 and $ 242 as of december 31 , 2014 and 2013 , recorded as component of income tax expense.

balance at january 1 2013                              | $ 180993
------------------------------------------------------ | ----------------
increases in current period tax positions              | 27229
decreases in prior period measurement of tax positions | -30275 ( 30275 )
balance at december 31 2013                            | $ 177947
increases in current period tax positions              | 53818
decreases in prior period measurement of tax positions | -36528 ( 36528 )
balance at december 31 2014                            | $ 195237


value using appropriate discount rate.
 projected cash flow is discounted at required rate of return reflects relative risk of achieving cash flow and time value of money.
 market approach is valuation technique uses prices relevant information by market transactions involving identical or comparable assets , liabilities  or group of assets liabilities.
 valuation techniques consistent with market approach often use market multiples derived from set comparables.
 cost approach  estimates value by determining current cost of replacing asset with another equivalent economic utility  used appropriate for property , plant and equipment.
 cost to replace given asset reflects estimated reproduction or replacement cost for property  less allowance for loss in value due to depreciation.
 preliminary purchase price allocation resulted in recognition of $ 2. 8 billion of goodwill  all expected to be amortizable for tax purposes.
 all goodwill assigned to our mst business segment.
 goodwill recognized attributable to expected revenue synergies by integration of our products and technologies with of sikorsky  costs synergies from consolidation or elimination of certain functions  intangible assets not qualify for separate recognition such as assembled workforce of sikorsky.
 determining fair value of assets acquired and liabilities assumed requires exercise significant judgments  including amount timing of expected future cash flows  long-term growth rates discount rates.
 cash flows employed in dcf analyses based on our best estimate of future sales , earnings cash flows after considering factors general market conditions customer budgets existing firm orders expected future orders contracts with suppliers labor agreements changes in working capital long term business plans recent operating performance.
 different estimates and judgments could yield different results.
impact to 2015 financial results sikorsky 2019s financial results included in consolidated financial results only for period from november 6 , 2015 acquisition date through december 31 , 2015.
 consolidated financial results for year ended december 31 , 2015 not reflect full year of sikorsky 2019s results.
 from november 6  2015 acquisition through december 31  2015 sikorsky generated net sales approximately $ 400 million operating loss of approximately $ 45 million inclusive of intangible amortization and adjustments for acquisition.
 incurred approximately $ 38 million of non-recoverable transaction costs associated with sikorsky acquisition in 2015 expensed as incurred.
 costs included in 201cother income net on consolidated statements of earnings.
 also incurred approximately $ 48 million in costs associated with issuing $ 7. 0 billion november 2015 notes used to repay outstanding borrowings under 364-day facility finance acquisition.
 financing costs recorded as reduction of debt amortized to interest expense over term of related debt.
 supplemental pro forma financial information ( unaudited ) table presents summarized unaudited pro forma financial information if sikorsky included in financial results for entire years in 2015 and 2014 ( in millions ) :.
 unaudited supplemental pro forma financial data calculated after applying accounting policies adjusting historical results of sikorsky with pro forma adjustments net of tax assume acquisition occurred on january 1 , 2014.
 significant pro forma adjustments include additional amortization expense related to acquired intangible assets additional interest expense related to short-term debt used to finance acquisition.
 adjustments assume application of fair value adjustments to intangibles debt issuance occurred on january 1, 2014 : amortization expense of $ 125 million and $ 148 million in 2015 and 2014  interest expense $ 42 million and $ 48 million in 2015 and 2014  respectively.
significant nonrecurring adjustments include elimination $ 72 million pension curtailment loss  net of tax  recognized in 2015 elimination $ 58 million income tax charge related to historic earnings of foreign subsidiaries recognized by sikorsky in 2015.

| 2015    | 2014
------------------------------------------------------------ | ------- | -------
net sales                                                    | $ 50962 | $ 53023
net earnings from continuing operations                      | 3538    | 3480
basic earnings per common share from continuing operations   | 11.40   | 10.99
diluted earnings per common share from continuing operations | 11.24   | 10.79


jpmorgan chase & co.
 / 2008 annual report 115 measure.
 in firm 2019s view including these items in var produces complete perspective of firm 2019s risk profile for items market risk impact income statement.
 consumer lending var includes firm 2019s mortgage pipeline warehouse loans , msrs related hedges.
 revised var measure exclude dva derivative structured liabilities to reflect credit quality of firm.
 excludes certain nontrading activity private equity , principal investing (. mezzanine financing tax-oriented investments. ) corporate balance sheet capital manage- ment positions longer-term corporate investments.
 corporate positions managed through firm 2019s earnings-at-risk cash flow monitoring processes than using var measure.
 nontrading principal investing activities private equity positions managed using stress and scenario analyses.
 changing to 95% ( 95 % ) confidence interval caused average var to drop by $ 85 million in third quarter when new measure implemented.
 under 95% ( 95 % ) confidence interval firm expect to incur daily losses greater than predicted by var esti mates about twelve times a year.
 following table provides information about sensitivity of dva to one basis point increase in jpmorgan chase 2019s credit spreads.
 sensitivity of dva at december 31 , 2008  represents firm ( includ- ing bear stearns ) sensitivity of dva for december 31 , 2007  represents heritage jpmorgan chase only.
 debit valuation adjustment sensitivity 1 basis point increase in ( in millions ) jpmorgan chase credit spread.
 loss advisories and drawdowns loss advisories tools to highlight senior management trading losses above certain levels initiate discus- sion of remedies.
economic value stress testing var reflects risk of loss due to adverse changes in normal markets stress testing captures firm 2019s exposure to unlikely plausible events in abnormal markets.
 firm conducts economic value stress tests for trading and nontrading activities every two weeks using multiple scenarios assume credit spreads widen equity prices decline interest rates rise in major currencies.
 additional scenarios focus on risks predominant in individual business segments include scenarios focus on potential for adverse moves in complex portfolios.
 periodically scenarios reviewed and updated to reflect changes in firm 2019s risk profile and economic events.
 stress testing important in measuring controlling risk.
 stress testing enhances understanding of firm 2019s risk profile and loss poten- tial stress losses monitored against limits.
 stress testing utilized in one-off approvals cross-business risk measure- ment input to economic capital allocation.
 stress-test results  trends explanations provided every two weeks to firm 2019s senior management and lines of business to help measure manage risks understand event risk-sensitive positions.
 earnings-at-risk stress testing var and stress-test measures illustrate total economic sensitivity of firm 2019s balance sheet to changes in market variables.
 effect of interest rate exposure on reported net income important.
 interest rate risk exposure in firm 2019s core non- trading business activities (. asset/liability management positions ) results from on- and off-balance sheet positions can occur due to variety of factors including : 2022 differences in timing among maturity or repricing of assets , liabilities off-balance sheet instruments.
 for if liabilities reprice quicker than assets and funding interest rates declining, earnings will increase initially.
 2022 differences in amounts of assets , liabilities off-balance sheet instruments repricing at same time.
for exam- ple if more deposit liabilities repricing than assets when gen eral interest rates declining , earnings will increase initially.
 2022 differences in short-term and long-term market interest rates change.
 for example changes in slope of yield curve because firm ability to lend at long-term fixed rates and borrow at variable or short-term fixed rates.
 firm 2019s earnings affected negatively by sudden unanticipated increase in short-term rates paid on liabilities (. deposits ) without increase in long-term rates received on assets (. loans ).
 conversely higher long-term rates on assets are beneficial to earnings particularly when increase not accompanied by rising short-term rates paid on liabilities.
 2022 impact of changes in maturity of assets , liabilities or off-balance sheet instruments as interest rates change.
 for if more borrowers than forecasted pay down higher rate loan balances when general interest rates declining , earnings may decrease initially.
 firm manages interest rate exposure related to assets and lia- bilities on consolidated corporate-wide basis.
 business units trans- fer interest rate risk to treasury through transfer-pricing sys- tem  account elements of interest rate exposure risk-managed in financial markets.
 these elements include asset and liability balances contractual rates of interest  contractual principal payment schedules expected prepayment expe- rience interest rate reset dates and maturities rate indices used for re-pricing interest rate ceilings or floors for adjustable rate products.
 all transfer-pricing assumptions dynamically reviewed.
 firm conducts simulations of changes in net interest income from nontrading activities under variety of interest rate scenar- ios.
earnings-at-risk tests measure potential change in firm 2019s net interest income, corresponding impact to firm 2019s pre-

( in millions )  | 1 basis point increase in jpmorgan chase credit spread
---------------- | ------------------------------------------------------
december 31 2008 | $ 32
december 31 2007 | $ 38


risks relating to business fluctuations in financial markets could result in investment losses.
 prolonged severe disruptions in public debt and equity markets  as occurred during 2008 , could result in significant realized and unrealized losses in our investment portfolio.
 financial markets improved since 2008 , could deteriorate in future.
 could disruption in individual market sectors  as in energy sector in recent years.
 declines in financial markets could result in significant realized and unrealized losses on investments could material adverse impact on results of operations , equity  business and insurer financial strength and debt ratings.
 our results could be adversely affected by catastrophic events.
 we exposed to unpredictable catastrophic events  including weather-related natural catastrophes acts of terrorism.
 material reduction in operating results by catastrophes could inhibit ability to pay dividends or to meet interest and principal payment obligations.
 illustration during past five calendar years  pre-tax catastrophe losses , net of contract specific reinsurance before cessions under corporate reinsurance programs were as follows:.
 losses from future catastrophic events could exceed projections.
 we use projections of possible losses from future catastrophic events of varying types magnitudes as strategic underwriting tool.
 use these loss projections to estimate potential catastrophe losses in certain geographic areas decide on placement of retrocessional coverage or other actions to limit extent of potential losses in geographic area.
 these loss projections are approximations on mix quantitative qualitative processes actual losses may exceed projections by material amount resulting in material adverse effect on financial condition and results of operations.

calendar year:          | pre-tax catastrophe losses
----------------------- | --------------------------
( dollars in millions ) |
2016                    | $ 301.2
2015                    | 53.8
2014                    | 56.3
2013                    | 194.0
2012                    | 410.0