result effects of costa concordia incident continued instability in european eco- nomic landscape.
 we continue to believe in long term growth potential of market.
 estimate europe served by 102 ships with approximately 108000 berths at beginning of 2008 by 117 ships with approximately 156000 berths at end of 2012.
 approximately 9 ships with estimated 25000 berths expected to be in service in european cruise market between 2013 and 2017.
 following table details growth in global , north american european cruise markets in cruise guests and estimated weighted-average berths over past five years : global cruise guests ( 1 ) weighted-average supply of berths marketed globally ( 1 ) north american cruise guests ( 2 ) weighted-average supply of berths marketed in north america ( 1 ) european cruise guests weighted-average supply of berths marketed in europe ( 1 ).
 source : our estimates of number of global cruise guests  weighted-average supply of berths marketed globally in north america europe based on combination of data from various publicly available cruise industry trade information sources including seatrade insider cruise line international association.
 our estimates incorporate our own statistical analysis utilizing same publicly available cruise industry data base.
 2 ) source : cruise line international association based on cruise guests carried for two consecutive nights for years 2008 through 2011.
 year 2012 amounts represent our estimates see number 1 above.
 3 ) source : clia europe , formerly european cruise council , for years 2008 through 2011.
 year 2012 amounts represent our estimates number 1.
 other markets in addition to expected industry growth in north america and europe expect asia/pacific region to demonstrate higher growth rate near term continue represent relatively small sector compared to north america europe.
 competition we compete with number of cruise lines.
princi- pal competitors are carnival corporation & plc , owns  , aida cruises , carnival cruise lines , costa cruises , cunard line , holland america line , iberocruceros , p&o cruises princess cruises ; disney cruise line ; msc cruises ; norwegian cruise line oceania cruises.
 cruise lines compete with other vacation alternatives land-based resort hotels sightseeing destinations for consumers 2019 leisure time.
 demand for activities is influenced by political and general economic conditions.
 com- panies within vacation market dependent on consumer discretionary spending.
 operating strategies principal operating strategies are to : 2022 protect health , safety security of guests employees protect environment in vessels organization operate  2022 strengthen support human capital to better serve global guest base grow business  2022 strengthen consumer engagement to enhance revenues  2022 increase awareness market penetration of brands globally 2022 focus on cost efficiency  manage operating expenditures ensure adequate cash and liquid- ity  goal of maximizing return on invested capital long-term shareholder value  2022 strategically invest in fleet through revit ad alization of existing ships transfer of key innovations across each brand  expanding fleet with new state-of-the-art cruise ships recently delivered on order  2022 capitalize on portability flexibility of ships by deploying them into markets and itineraries opportunities to optimize returns  continuing focus on existing key markets  2022 enhance technological capabilities to service customer preferences expectations in innovative manner  supporting strategic focus on profitability , part i 0494. indd 13 3/27/13 12:52 pm

year | global cruise guests ( 1 ) | weighted-average supply of berths marketed globally ( 1 ) | north american cruise guests ( 2 ) | weighted-average supply of berths marketed in north america ( 1 ) | european cruise guests | weighted-average supply of berths marketed in europe ( 1 )
---- | -------------------------- | --------------------------------------------------------- | ---------------------------------- | ----------------------------------------------------------------- | ---------------------- | ----------------------------------------------------------
2008 | 17184000                   | 347000                                                    | 10093000                           | 219000                                                            | 4500000                | 120000
2009 | 17340000                   | 363000                                                    | 10198000                           | 222000                                                            | 5000000                | 131000
2010 | 18800000                   | 391000                                                    | 10781000                           | 232000                                                            | 5540000                | 143000
2011 | 20227000                   | 412000                                                    | 11625000                           | 245000                                                            | 5894000                | 149000
2012 | 20823000                   | 425000                                                    | 12044000                           | 254000                                                            | 6040000                | 152000


net income $ 4. 6 billion translated into earnings $ 5. 79 per diluted share best- ever performance.
 freight revenues 2013 freight revenues increased 7% ( 7 % ) year-over-year to $ 19. 8 billion driven by volume growth 2% ( 2 % )  higher fuel surcharge revenue  core pricing gains.
 growth in frac sand  coal  intermodal shipments offset declines in grain  crude oil  finished vehicles  rock shipments.
 fuel prices 2013 average price diesel fuel in 2017 was $ 1. 81 per gallon increase 22% ( 22 % ) from 2016 crude oil and conversion spreads diesel increased 2017.
 higher price resulted in increased operating expenses $ 334 million ( excluding impact year- over-year volume growth ).
 gross-ton miles increased 5% ( 5 % )  drove higher fuel expense.
 fuel consumption rate as gallons of fuel consumed divided by gross ton-miles thousands improved 2% ( 2 % ).
 free cash flow 2013 cash by operating activities totaled $ 7. 2 billion  free cash flow $ 2. 2 billion after reductions of $ 3. 1 billion for cash in investing activities $ 2 billion in dividends included 10% ( 10 % ) increase in quarterly dividend per share from $ 0. 605 to $ 0. 665 declared paid in fourth quarter of 2017.
 free cash flow defined as cash provided by operating activities less cash in investing activities dividends.
 not considered financial measure under by sec regulation g and item 10 of sec regulation s-k may not be defined and calculated by other companies.
 free cash flow important to management investors in evaluating financial performance measures ability to generate cash without additional external financings.
free cash flow should considered in addition to rather than substitute for cash by operating activities.
 following table reconciles cash provided by operating activities ( gaap measure ) to free cash flow ( non-gaap measure ) :.
 2018 outlook f0b7 safety 2013 operating a safe railroad benefits all our constituents : employees , customers  shareholders communities we serve.
 continue using multi-faceted approach to safety  utilizing technology , risk assessment  training employee engagement  quality control  targeted capital investments.
 continue using expanding deployment of total safety culture and courage to care throughout operations identify and implement best practices for employee and operational safety.
 continue efforts to increase detection of rail defects ; improve close crossings educate public and law enforcement agencies about crossing safety through combination our own programs ( including risk assessment strategies ) industry programs local community activities across network.
 network operations 2013 in 2018  continue to align resources with customer demand maintain efficient network ensure surge capability of assets.
 f0b7 fuel prices 2013 fuel price projections for crude oil and natural gas continue to fluctuate in current environment.
 could see volatile fuel prices during year  sensitive to global u.
 domestic demand  refining capacity geopolitical events weather conditions other factors.
 as prices fluctuate timing impact on earnings  fuel surcharge programs trail increases or decreases in fuel price by approximately two months.
 lower fuel prices could positive impact on economy by increasing consumer discretionary spending potentially increase demand for various consumer products transport.
 alternatively lower fuel prices could likely have negative impact on other commodities such as coal and domestic drilling-related shipments.

millions                              | 2017           | 2016           | 2015
------------------------------------- | -------------- | -------------- | --------------
cash provided by operating activities | $ 7230         | $ 7525         | $ 7344
cash used in investing activities     | -3086 ( 3086 ) | -3393 ( 3393 ) | -4476 ( 4476 )
dividends paid                        | -1982 ( 1982 ) | -1879 ( 1879 ) | -2344 ( 2344 )
free cash flow                        | $ 2162         | $ 2253         | $ 524


table of contents company stock performance graph shows comparison of cumulative total shareholder return calculated on dividend reinvested basis for company  s&p 500 index  s&p information technology index dow jones u. s.
 technology supersector index for five years ended september 26 , 2015.
 graph assumes $ 100 invested in each company 2019s common stock s&p 500 index s&p information technology index dow jones. s.
 technology supersector index market close september 24, 2010.
 historic stock price performance not indicative of future stock price performance.
 * $ 100 invested on 9/25/10 in stock or index including reinvestment of dividends.
 data points are last day of each fiscal year for company 2019scommon stock september 30th for indexes.
 copyright a9 2015 s&p , division of mcgraw hill financial.
 all rights reserved.
 copyright a9 2015 dow jones & co.
 all rights reserved.
 september september.
 apple inc.
 | 2015 form 10-k | 21

| september 2010 | september 2011 | september 2012 | september 2013 | september 2014 | september 2015
-------------------------------------------- | -------------- | -------------- | -------------- | -------------- | -------------- | --------------
apple inc .                                  | $ 100          | $ 138          | $ 229          | $ 170          | $ 254          | $ 294
s&p 500 index                                | $ 100          | $ 101          | $ 132          | $ 157          | $ 188          | $ 187
s&p information technology index             | $ 100          | $ 104          | $ 137          | $ 147          | $ 190          | $ 194
dow jones u.s . technology supersector index | $ 100          | $ 103          | $ 134          | $ 141          | $ 183          | $ 183


value of tangible assets and identifiable intangible assets acquired was $ 17. 7 million.
 goodwill resulted from company 2019s expectation of synergies from integration of sigma-c 2019s technology with company 2019s technology and operations.
 virtio corporation , inc.
 ( virtio ) acquired virtio on may 15 , 2006 in all-cash transaction.
 reasons for acquisition.
 company believes acquisition of virtio will expand presence in electronic system level design.
 expects combination of company 2019s system studio solution with virtio 2019s virtual prototyping technology will accelerate systems to market by giving software developers ability to begin code development earlier.
 purchase price.
 company paid $ 9. 1 million in cash for outstanding shares of virtio of $ 0. 9 million deposited with escrow agent will be paid to former stockholders of virtio terms escrow agreement.
 company had prior investment in virtio of approximately $ 1. 7 million.
 total purchase consideration consisted of:.
 acquisition-related costs of $ 0. 7 million consist primarily of legal , tax and accounting fees  estimated facilities closure costs employee termination costs.
 as of october 31 , 2006 company had paid $ 0. 3 million of acquisition-related costs.
 $ 0. 4 million balance remaining at october 31, 2006 consists of professional and tax-related service fees and facilities closure costs.
 under agreement with virtio company agreed to pay up to $ 4. 3 million over three years to former stockholders based upon achievement of certain sales milestones.
 contingent consideration to additional purchase price adjustment to goodwill when if payment is made.
 company agreed to pay $ 0. 9 million in employee retention bonuses recognized as compensation expense over service period of applicable employees.
 assets acquired.
company performed preliminary valuation allocated total purchase consideration to assets liabilities acquired including identifiable intangible assets based on fair values on acquisition date.
 company acquired $ 2. 5 million of intangible assets consisting of $ 1. 9 million in existing technology  $ 0. 4 million in customer relationships $ 0. 2 million in non-compete agreements amortized over five to seven years.
 company acquired tangible assets $ 5. 5 million assumed liabilities of $ 3. 2 million.
 goodwill  excess of purchase price over fair value of net tangible identifiable intangible assets acquired in merger was $ 6. 7 million.
 goodwill resulted from company 2019s expectation of synergies from integration of virtio 2019s technology with company 2019s technology operations.
 hpl technologies , inc.
 ( hpl ) company acquired hpl on december 7 , 2005 in all-cash transaction.
 reasons for acquisition.
 company believes acquisition of hpl will solidify company 2019s position as leading electronic design automation vendor in design for manufacturing

| ( in thousands )
-------------------------- | ----------------
cash paid                  | $ 9076
prior investment in virtio | 1664
acquisition-related costs  | 713
total purchase price       | $ 11453


some cases indemnification obligations of types described above arise under arrangements by predecessor companies for we become responsible result of acquisition.
 pnc and subsidiaries provide indemnification to directors  officers employees agents against liabilities incurred their service on behalf of or at request of pnc and subsidiaries.
 pnc and subsidiaries also advance on behalf of covered individuals costs incurred in with certain claims or proceedings subject to written undertakings by each individual to repay all amounts advanced if determined individual not entitled to indemnification.
 we generally are responsible for similar indemnifications and advancement obligations companies we acquire had to their officers directors employees agents at time of acquisition.
 we advanced such costs on behalf of several individuals with respect to pending litigation or investigations during 2012.
 not possible for us to determine aggregate potential exposure from obligation to provide this indemnity or advance such costs.
 visa indemnification our payment services business issues acquires credit and debit card transactions through visa.
 inc.
 card association its affiliates ( visa ).
 in october 2007  visa completed restructuring and issued shares of visa inc.
 common stock to its financial institution members ( visa reorganization ) in of its initial public offering ( ipo ).
 part of visa reorganization we received our proportionate share of class of visa inc.
 common stock allocated to us members.
 prior to ipo us members included pnc  were obligated to indemnify visa for judgments and settlements related to specified litigation.
 result of acquisition of national city  we became party to judgment and loss sharing agreements with visa and certain other banks.
judgment loss sharing agreements designed to apportion financial responsibilities from potential adverse judgment or negotiated settlements related to specified litigation.
 in july 2012  visa funded $ 150 million into litigation escrow account reduced conversion rate of visa b to a shares.
 we continue to obligation to indemnify visa for judgments settlements for remaining specified litigation may have additional exposure to specified visa litigation.
 recourse repurchase obligations discussed in note 3 loan sale servicing activities variable interest entities pnc sold commercial mortgage residential mortgage home equity loans directly or indirectly through securitization loan sale transactions in we continuing involvement.
 form continuing involvement includes recourse and loan repurchase obligations associated with transferred assets.
 commercial mortgage loan recourse obligations we originate close service multi-family commercial mortgage loans sold to fnma under fnma 2019s dus program.
 participated in similar program with fhlmc.
 assume up to one-third risk of loss on unpaid principal balances through loss share arrangement.
 at december 31 , 2012 and december 31 , 2011 unpaid principal balance outstanding of loans sold participant in programs was $ 12. 8 billion and $ 13. 0 billion.
 potential maximum exposure under loss share arrangements was $ 3. 9 billion at december 31 , 2012 and $ 4. 0 billion at december 31 , 2011.
 maintain reserve for estimated losses based upon exposure.
 reserve for losses under programs totaled $ 43 million and $ 47 million as of december 31 , 2012 and 31  2011 included in other liabilities on consolidated balance sheet.
if payment required under programs, we contractual interest in collateral underlying mortgage loans on losses occurred, although value of collateral taken account in determining our share of losses.
 our exposure activity associated with recourse obligations reported in corporate & institutional banking segment.
 table 154 : analysis of commercial mortgage recourse obligations.
 residential mortgage loan home equity repurchase obligations residential mortgage loans sold on non-recourse basis , we assume certain loan repurchase obligations associated with mortgage loans sold to investors.
 loan repurchase obligations primarily relate to situations where pnc alleged to breached origination covenants representations warranties to purchasers loans in purchase sale agreements.
 residential mortgage loans covered by loan repurchase obligations include first and second-lien mortgage loans sold through agency securitizations, non-agency securitizations  loan sale transactions.
 discussed in note 3 loans sale and servicing activities and 228 pnc financial services group , inc.
 2013 form 10-k

in millions                                  | 2012     | 2011
-------------------------------------------- | -------- | --------
january 1                                    | $ 47     | $ 54
reserve adjustments net                      | 4        | 1
losses 2013 loan repurchases and settlements | -8 ( 8 ) | -8 ( 8 )
december 31                                  | $ 43     | $ 47


operating income ( loss ) by segment summarized below:.
 increase in total operating income driven by 2022 operating income in north america operating segment decreased $ 52. 5 million to $ 408. 4 million in 2016 from $ 461. 0 million in 2015 due to decreases in gross margin consolidated results operations $ 17. 0 million expenses related to liquidation of sports authority $ 15. 2 million bad debt expense $ 1. 8 million of in-store fixture impairment.
 decrease reflects movement of $ 11. 1 million expenses from strategic shift in headcount global business from connected fitness operating segment to north america.
 decrease partially offset by increases in revenue consolidated results operations.
 2022 operating income in emea operating segment increased $ 8. 3 million to $ 11. 4 million in 2016 from $ 3. 1 million in 2015 due to sales growth reductions in incentive compensation.
 increase offset by investments in sports marketing infrastructure for future growth.
 2022 operating income in asia-pacific operating segment increased $ 31. 9 million to $ 68. 3 million in 2016 from $ 36. 4 million in 2015 due to sales growth reductions in incentive compensation.
 increase offset by investments in direct-to-consumer business entry into new territories.
 2022 operating loss in latin america operating segment increased $ 3. 3 million to $ 33. 9 million in 2016 from $ 30. 6 million in 2015 due to increased investments to support growth region economic challenges in brazil.
 increase in operating loss offset by sales growth reductions in incentive compensation.
 2022 operating loss in connected fitness segment decreased $ 24. 5 million to $ 36. 8 million in 2016 from $ 61. 3 million in 2015 driven by sales growth.
seasonality historically , we recognized majority of net revenues significant portion of income from operations in last two quarters of year , driven primarily by increased sales volume of products during fall selling season , including higher priced cold weather products , larger proportion of higher margin direct to consumer sales.
 level of working capital generally reflects seasonality and growth in business.
 expect inventory , accounts payable certain accrued expenses to be higher in second and third quarters in preparation for fall selling season.

( in thousands )       | year ended december 31 , 2016 | year ended december 31 , 2015 | year ended december 31 , $ change | year ended december 31 , % (  % ) change
---------------------- | ----------------------------- | ----------------------------- | --------------------------------- | ----------------------------------------
north america          | $ 408424                      | $ 460961                      | $ -52537 ( 52537 )                | ( 11.4 ) % (  % )
emea                   | 11420                         | 3122                          | 8298                              | 265.8
asia-pacific           | 68338                         | 36358                         | 31980                             | 88.0
latin america          | -33891 ( 33891 )              | -30593 ( 30593 )              | -3298 ( 3298 )                    | 10.8
connected fitness      | -36820 ( 36820 )              | -61301 ( 61301 )              | 24481                             | 39.9
total operating income | $ 417471                      | $ 408547                      | $ 8924                            | 2.2% ( 2.2 % )


estimated acquisition-date fair values of major classes assets acquired and liabilities assumed including reconciliation to total purchase consideration are as follows ( in thousands ) :.
 goodwill of $ 203. 8 million arising from acquisition  included in asia-pacific segment  attributable to expected growth opportunities in australia and new zealand growth opportunities operating synergies in integrated payments in existing asia-pacific and north america markets.
 goodwill associated with acquisition is not deductible for income tax.
 customer-related intangible assets have estimated amortization period of 15 years.
 acquired technology estimated amortization period 15 years.
 trade name estimated amortization period 5 years.
 note 3 2014 settlement processing assets and obligations funds settlement refers to process transferring funds for sales and credits between card issuers and merchants.
 for transactions our systems we use our internal network to provide funding instructions to financial institutions that fund merchants.
 process funds settlement under two models sponsorship model and direct membership model.
 under sponsorship model  we designated as merchant service provider by mastercard independent sales organization by visa member clearing banks sponsor us require adherence to standards of payment networks.
 in certain markets  we have sponsorship or depository and clearing agreements with financial institution sponsors.
 these agreements allow us to route transactions under members 2019 control identification numbers to clear credit card transactions through mastercard and visa.
 in this model standards of payment networks restrict us from performing funds settlement or accessing merchant settlement funds require these funds be in possession of member until merchant is funded.
 under direct membership model  we are members in various payment networks to process and fund transactions without third-party sponsorship.
in this model , we route clear transactions directly through card brand 2019s network not restricted from performing funds settlement.
 we process transactions similarly to transactions sponsorship model.
 required to adhere to standards of payment networks we direct members.
 maintain relationships with financial institutions , may serve as our member sponsors for other card brands other markets  to assist with funds settlement.
 timing differences , interchange fees  merchant reserves exception items cause differences between amount received from payment networks and amount funded to merchants.
 intermediary balances in our settlement process for direct merchants reflected as settlement processing assets obligations on consolidated balance sheets.
 settlement processing assets obligations include components below : 2022 interchange reimbursement.
 our receivable from merchants for portion of discount fee related to reimbursement of interchange fee.
 global payments inc.
 | 2017 form 10-k annual report 2013 77

cash                                       | $ 45826
------------------------------------------ | ----------------
customer-related intangible assets         | 42721
acquired technology                        | 27954
trade name                                 | 2901
other assets                               | 2337
deferred income tax assets ( liabilities ) | -9788 ( 9788 )
other liabilities                          | -49797 ( 49797 )
total identifiable net assets              | 62154
goodwill                                   | 203828
total purchase consideration               | $ 265982


table of contents certain union-represented american mainline employees covered by agreements not currently amendable.
 until agreements become amendable negotiations for jcbas will conducted outside traditional rla bargaining process no self-help permissible.
 piedmont mechanics stock clerks psa dispatchers have agreements now amendable engaged in traditional rla negotiations.
 none of unions representing our employees may lawfully engage in concerted refusals to work strikes  slow-downs sick-outs similar activity  against us.
 risk that disgruntled employees with or without union involvement could engage in more concerted refusals to work could harm operation our airline impair financial performance.
 for more discussion see part i , item 1a.
 risk factors 2013 201cunion disputes , employee strikes other labor-related disruptions may adversely affect our operations. 201d aircraft fuel operations and financial results significantly affected by availability and price of jet fuel.
 based on 2016 forecasted mainline and regional fuel consumption estimate as of december 31 , 2015 one cent per gallon increase in aviation fuel price would increase 2016 annual fuel expense by $ 44 million.
 following table shows annual aircraft fuel consumption and costs  including taxes for mainline operations for 2015 and 2014 ( gallons and aircraft fuel expense in millions ).
 year gallons average price per gallon aircraft fuel expense percent of total mainline operating expenses.
 total fuel expenses for wholly-owned and third-party regional carriers operating under capacity purchase agreements of american were $ 1. 2 billion and $ 2. 0 billion for years ended december 31 , 2015 and 2014  respectively.
as of december 31 , 2015 , we not fuel hedging contracts outstanding to hedge our fuel consumption.
 assuming we not enter future transactions to hedge fuel consumption we will continue exposed to fluctuations in fuel prices.
 current policy is not to enter transactions to hedge fuel consumption  we review policy based on market conditions other factors.
 fuel prices fluctuated substantially over past years.
 cannot predict future availability  price volatility cost of aircraft fuel.
 natural disasters  political disruptions wars involving oil-producing countries  changes in fuel-related governmental policy  strength of u. s.
 dollar against foreign currencies  changes in access to petroleum product pipelines terminals  speculation in energy futures markets changes in aircraft fuel production capacity environmental concerns other unpredictable events may result in fuel supply shortages  additional fuel price volatility cost increases in future.
 see part i , item 1a.
 risk factors 2013 201cour business dependent on price availability of aircraft fuel.
 continued periods of high volatility in fuel costs  increased fuel prices significant disruptions in supply of aircraft fuel could have negative impact on operating results and liquidity. 201d insurance we maintain insurance of types customary in airline industry including insurance for public liability , passenger liability  property damage  all-risk coverage for damage to aircraft.
 principal coverage includes liability for injury to members public  including passengers  damage to

year | gallons | average price pergallon | aircraft fuel expense | percent of total mainline operating expenses
---- | ------- | ----------------------- | --------------------- | --------------------------------------------
2015 | 3611    | $ 1.72                  | $ 6226                | 21.6% ( 21.6 % )
2014 | 3644    | 2.91                    | 10592                 | 33.2% ( 33.2 % )


american tower corporation subsidiaries notes to consolidated financial statements brazil acquisition 2014on march 1, 2011  company acquired 100% ) of outstanding shares of company owned 627 communications sites in brazil for $ 553. 2 million  increased to $ 585. 4 million acquiring 39 additional communications sites during year ended december 31 , 2011.
 year ended december 31 , 2012 purchase price reduced to $ 585. 3 million after post- closing purchase price adjustments.
 allocation of purchase price finalized during year ended december 31 , 2012.
 table summarizes allocation of aggregate purchase consideration paid amounts of assets acquired liabilities assumed based upon estimated fair value at date of acquisition ( in thousands ) : final purchase price allocation ( 1 ) preliminary purchase price allocation ( 2 ).
 ( 1 reflected in consolidated balance sheets.
 2 ) consolidated balance sheets form 10-k for year ended december 31 , 2011.
 ( 3 ) includes approximately $ 7. 7 million of accounts receivable  approximates value due to company under certain contractual arrangements.
 ( 4 ) consists customer-related intangibles of approximately $ 250. 0 million network location intangibles of approximately $ 118. 0 million.
 customer intangibles network location intangibles amortized straight-line basis over periods up to 20 years.
 5 ) other long-term liabilities includes contingent amounts of approximately $ 30. 0 million related to uncertain tax positions related to acquisition non-current assets includes $ 24. 0 million related indemnification asset.
 6 company expects goodwill recorded deductible for tax purposes.
 goodwill allocated to company 2019s international rental and management segment.
 brazil 2014vivo acquisition 2014on march 30 , 2012  company entered definitive agreement to purchase up to 1500 towers from vivo s.
( 201cvivo 201d ).
 pursuant agreement , march 30 , 2012 , company purchased 800 communications sites for aggregate purchase price $ 151. 7 million.
 june 30 , 2012  company purchased remaining 700 communications sites aggregate purchase price $ 126. 3 million , subject to post-closing adjustments.
 company and vivo amended asset purchase agreement allow for acquisition of up to additional 300 communications sites by company , subject to regulatory approval.
 august 31 , 2012 company purchased additional 192 communications sites from vivo for aggregate purchase price $ 32. 7 million , subject to post-closing adjustments.

| final purchase price allocation ( 1 ) | preliminary purchase price allocation ( 2 )
----------------------------------- | ------------------------------------- | -------------------------------------------
current assets ( 3 )                | $ 9922                                | $ 9922
non-current assets                  | 71529                                 | 98047
property and equipment              | 83539                                 | 86062
intangible assets ( 4 )             | 368000                                | 288000
current liabilities                 | -5536 ( 5536 )                        | -5536 ( 5536 )
other non-current liabilities ( 5 ) | -38519 ( 38519 )                      | -38519 ( 38519 )
fair value of net assets acquired   | $ 488935                              | $ 437976
goodwill ( 6 )                      | 96395                                 | 147459


page 24 of 100 financial condition  liquidity capital resources cash flows capital expenditures liquidity primary sources of liquidity are cash by operating activities external committed borrowings.
 believe cash flows from operations cash short-term committed revolver borrowings when necessary sufficient to meet ongoing operating requirements scheduled principal interest payments on debt dividend payments anticipated capital expenditures.
 summarizes cash flows:.
 cash flows by operating activities in 2010 included use of $ 250 million related to change in accounting for accounts receivable securitization program.
 at december 31 , 2009 amount of accounts receivable sold under securitization program was $ 250 million under previous accounting guidance amount presented in consolidated balance sheet as reduction of accounts receivable result of true sale of receivables.
 upon company adoption of new prospective accounting guidance effective january 1 , 2010  amount accounts receivable sold not reflected as reduction of accounts receivable on balance sheet at december 31 , 2010 resulting in $ 250 million increase in accounts receivable corresponding working capital outflow from operating activities in statement of cash flows.
 no accounts receivable sold under securitization program at december 31 , 2010.
 excluding $ 250 million impact of additional accounts receivable from change in accounting cash flows by operations were $ 765. 2 million in 2010 compared to $ 559. 7 million in 2009 $ 627. 6 million in 2008.
 significant improvement in 2010 primarily due to higher earnings favorable working capital changes partially offset by higher pension funding.
 lower operating cash flows in 2009 compared to 2008 were result of working capital increases higher pension funding income tax payments year offset by payment of approximately $ 70 million to customer for legal settlement.
 management performance measures following financial measurements are on non-u. s.
gaap basis be considered in connection with consolidated financial statements within item 8 of this report.
 non-u. s.
 gaap measures not considered in isolation not considered superior to , or substitute for  financial measures calculated in accordance with u. s.
 gaap.
 presentation of earnings in accordance with u. s.
 gaap available in item 8 this report.
 free cash flow management uses free cash flow measure : to evaluate company 2019s operating results  plan stock buyback levels  evaluate strategic investments 4 evaluate company 2019s ability to incur and service debt.
 free cash flow not a defined term under u. s.
 gaap , not inferred that entire free cash flow amount available for discretionary expenditures.
 company defines free cash flow as cash flow from operating activities less additions to property , plant and equipment ( capital spending ).
 free cash flow typically derived directly from company 2019s cash flow statements ; may be adjusted for items affect comparability between periods.

( $ in millions )                                                                         | 2010             | 2009             | 2008
----------------------------------------------------------------------------------------- | ---------------- | ---------------- | ----------------
cash flows provided by ( used in ) operating activities including discontinued operations | $ 515.2          | $ 559.7          | $ 627.6
cash flows provided by ( used in ) investing activities including discontinued operations | -110.2 ( 110.2 ) | -581.4 ( 581.4 ) | -418.0 ( 418.0 )
cash flows provided by ( used in ) financing activities                                   | -459.6 ( 459.6 ) | 100.8            | -205.5 ( 205.5 )


entergy texas , inc.
 subsidiaries management 2019s financial discussion analysis gross operating revenues  fuel purchased power expenses  other regulatory charges operating revenues increased due to base rate increases volume/weather effect  discussed.
 fuel purchased power expenses increased due to increase in demand increase in deferred fuel expense lower fuel refunds in 2011 versus 2010 offset by decrease in average market price of natural gas.
 other regulatory charges decreased due to distribution in first quarter 2011 of $ 17. 4 million to customers of 2007 rough production cost equalization remedy receipts.
 see note 2 to financial statements for discussion of rough production cost equalization proceedings.
 2010 compared to 2009 net revenue consists of operating revenues net of fuel , fuel-related expenses  gas purchased for resale 2 purchased power expenses 3 ) other regulatory charges ( credits ).
 analysis of change in net revenue comparing 2010 to 2009.
 amount ( in millions ).
 net wholesale revenue variance due to increased sales to municipal co-op customers due to addition of new contracts.
 volume/weather variance due to increased electricity usage in residential and commercial sectors 1. 5% ( 1. 5 % ) increase in customers effect of favorable weather on residential sales.
 billed electricity usage increased total of 777 gwh , or 5% ( 5 % ).
 rough production cost equalization variance due to additional $ 18. 6 million allocation in second quarter of 2009 for 2007 rough production cost equalization receipts ordered by puct to texas retail customers over originally allocated to entergy texas prior to jurisdictional separation of entergy gulf states , inc.
 into entergy gulf states louisiana and entergy texas  effective december 2007  discussed in note 2 to financial statements.
retail electric price variance due to rate actions  including annual base rate increase of $ 59 million beginning august 2010 result settlement of december 2009 rate case.
 see note 2 to financial statements for discussion of rate case settlement.
 securitization transition charge variance due to issuance of securitization bonds.
 in november 2009  entergy texas restoration funding , llc  company wholly-owned and consolidated by entergy texas  issued securitization bonds with proceeds purchased from entergy texas transition property  right to recover from customers through transition charge amounts sufficient to service securitization bonds.
 securitization transition charge offset with increase in interest on long-term debt no impact on net income.
 see note 5 to financial statements for discussion securitization bond issuance.

| amount ( in millions )
---------------------------------- | ----------------------
2009 net revenue                   | $ 485.1
net wholesale revenue              | 27.7
volume/weather                     | 27.2
rough production cost equalization | 18.6
retail electric price              | 16.3
securitization transition charge   | 15.3
purchased power capacity           | -44.3 ( 44.3 )
other                              | -5.7 ( 5.7 )
2010 net revenue                   | $ 540.2


black-scholes option valuation model developed for estimating fair value of traded options no vesting restrictions fully transferable.
 option valuation models require input subjective assumptions including expected stock price volatility.
 company 2019s employee stock options have characteristics different from traded options changes in subjective input assumptions can affect fair value estimate in management 2019s opinion existing models not provide reliable single measure of fair value of employee stock options.
 fair value of rsus determined based on market value at date of grant.
 total fair value of awards vested during 2008 , 2007  2006 was $ 35384 , $ 17840 , and $ 9413 ,.
 total stock based compensation expense calculated using black-scholes option valuation model in 2008 , 2007  2006 was $ 38872 , $ 22164 , and $ 11913 ,. aggregate intrinsic values of options outstanding and exercisable at december 27 , 2008 were $ 8. 2 million and $ 8. 2 million .
 aggregate intrinsic value of options exercised during year ended december 27 , 2008 was $ 0. 6 million.
 aggregate intrinsic value represents positive difference between company 2019s closing stock price on last trading day of fiscal period $ 19. 39 on december 27 , 2008  and exercise price multiplied by number of options exercised.
 as of december 27 , 2008 was $ 141. 7 million of total unrecognized compensation cost related to unvested share-based compensation awards granted to employees under stock compensation plans.
 cost expected to be recognized over five years.
 employee stock purchase plan shareholders also adopted employee stock purchase plan ( espp ).
 up to 2000000 shares of common stock reserved for espp.
shares offered to employees at price equal to lesser of 85% ( 85 % ) fair market value stock on date of purchase or 85% ( 85 % ) value on enrollment date.
 espp intended to qualify as 201cemployee stock purchase plan 201d under section 423 internal revenue code.
 during 2008 , 2007  2006 , 362902 , 120230 , and 124693 shares  purchased under plan for total purchase price of $ 8782, $ 5730 , and $ 3569 , respectively.
 at december 27 , 2008  approximately 663679 shares available for future issuance.
 10.
 earnings per share table sets computation of basic and diluted net income per share:

| 2008             | 2007             | 2006
---------------------------------------------- | ---------------- | ---------------- | ----------------
weighted average fair value of options granted | $ 18.47          | $ 33.81          | $ 20.01
expected volatility                            | 0.3845           | 0.3677           | 0.3534
dividend yield                                 | 3.75% ( 3.75 % ) | 0.76% ( 0.76 % ) | 1.00% ( 1.00 % )
expected life of options in years              | 6.0              | 6.0              | 6.3
risk-free interest rate                        | 2% ( 2 % )       | 4% ( 4 % )       | 5% ( 5 % )


until hedged transaction recognized in earnings.
 changes in fair value of derivatives attributable to ineffective portion of hedges or derivatives not highly effective hedges if immediately recognized in earnings.
 aggregate notional amount of outstanding foreign currency hedges at december 31 , 2012 and 2011 was $ 1. 3 billion and $ 1. 7 billion.
 aggregate notional outstanding interest rate swaps at december 31, 2012 and 2011 was $ 503 million and $ 450 million.
 derivative instruments not material impact on net earnings and comprehensive income during 2012, 2011  and 2010.
 all derivatives designated for hedge accounting.
 see note 15 for more information on fair value measurements related to derivative instruments.
 stock-based compensation 2013 compensation cost related to all share-based payments including stock options and restricted stock units measured at grant date based on estimated fair value of award.
 recognize compensation cost ratably over three-year vesting period.
 income taxes 2013 periodically assess tax filing exposures related to periods open to examination.
 based on latest information evaluate tax positions to determine position more likely than not be sustained upon examination by internal revenue service ( irs ).
 if reach more-likely-than-not determination  no benefit recorded.
 if tax position more likely than not to be sustained  record largest amount of benefit more likely than not to be realized when tax position settled.
 record interest and penalties related to income taxes as component of income tax expense on statements of earnings.
 interest and penalties not material.
 accumulated other comprehensive loss 2013 changes in balance of accumulated other comprehensive loss  net of income taxes , consisted of following ( in millions ) : postretirement benefit plan adjustments other , net accumulated comprehensive.
postretirement benefit plan adjustments shown net of tax benefits at december 31 , 2012 , 2011  2010 of $ 7. 4 billion , $ 6. 1 billion  $ 4. 9 billion.
 tax benefits include amounts recognized on income tax returns as current deductions deferred income taxes  recognized on tax returns in future years.
 see note 7 and note 9 for more information on income taxes postretirement plans.
 recent accounting pronouncements 2013 effective january 1 , 2012  retrospectively adopted new guidance financial accounting standards board by presenting total comprehensive income components of net income other comprehensive loss in two separate consecutive statements.
 adoption guidance resulted in change in how present other comprehensive loss in consolidated financial statements impact on results of operations  financial position  cash flows.

| postretirement benefit plan adjustments | other net    | accumulated other comprehensive loss
----------------------------------- | --------------------------------------- | ------------ | ------------------------------------
balance at january 1 2010           | $ -8564 ( 8564 )                        | $ -31 ( 31 ) | $ -8595 ( 8595 )
other comprehensive ( loss ) income | -430 ( 430 )                            | 15           | -415 ( 415 )
balance at december 31 2010         | -8994 ( 8994 )                          | -16 ( 16 )   | -9010 ( 9010 )
other comprehensive loss            | -2192 ( 2192 )                          | -55 ( 55 )   | -2247 ( 2247 )
balance at december 31 2011         | -11186 ( 11186 )                        | -71 ( 71 )   | -11257 ( 11257 )
other comprehensive ( loss ) income | -2346 ( 2346 )                          | 110          | -2236 ( 2236 )
balance at december 31 2012         | $ -13532 ( 13532 )                      | $ 39         | $ -13493 ( 13493 )


management 2019s discussion analysis 144 jpmorgan chase & co. /2010 annual report compared with $ 57 million for 2009.
 decreases in cio and mort- gage banking var for 2010 driven by decline in market volatility position changes.
 decline in mortgage banking var at december 31 , 2010  reflects management 2019s deci- sion to reduce risk given market volatility time.
 firm 2019s average ib and other var diversification benefit was $ 59 million or 37% ( 37 % ) of sum for 2010  compared with $ 82 million or 28% ( 28 % ) sum for 2009.
 firm experienced increase in diversification benefit in 2010 as positions changed correla- tions decreased.
 year var expo- sure can vary as positions change market volatility fluctuates diversification benefits change.
 var back-testing firm conducts daily back-testing of var against market risk- related revenue defined as change in value of : princi- pal transactions revenue for ib and cio ( less private equity gains/losses revenue from longer-term cio investments ) trading-related net interest income for ib  cio mortgage bank- ing ; ib brokerage commissions underwriting fees revenue revenue from syndicated lending facilities firm mortgage fees related income for firm 2019s mortgage pipeline warehouse loans  msrs  related hedges.
 daily firmwide market risk 2013related revenue excludes gains losses from dva.
 histogram illustrates daily market risk 2013related gains and losses for ib , cio mortgage banking positions for 2010.
 chart shows firm posted market risk 2013related gains on 248 out of 261 days 12 days exceeding $ 210 million.
 inset graph looks at days firm experienced losses depicts amount 95% ( 95 % ) confidence-level var ex- ceeded actual loss each days.
2010  losses sustained 13 days none exceeded var measure.
 daily ib other market risk-related gains losses ( 95% ( 95 % ) confidence-level var ) year ended december 31 , 2010 average daily revenue : $ 87 million $ in millions millions daily ib other var less market risk-related losses table provides information gross sensitivity of dva to one-basis-point increase jpmorgan chase 2019s credit spreads.
 sensitivity represents impact from one-basis-point parallel shift jpmorgan chase 2019s entire credit curve.
 credit curves not typically move parallel sensitivity multiplied by change spreads single maturity point may not be representative of actual revenue recognized.
 debit valuation adjustment sensitivity 1 basis point increase december 31 , ( in millions ) jpmorgan chase 2019s credit spread.

december 31 ( in millions ) | 1 basis point increase in jpmorgan chase 2019s credit spread
--------------------------- | ------------------------------------------------------------
2010                        | $ 35
2009                        | $ 39


recognition deferred revenue related to sanofi-aventis 2019 $ 85. 0 million up-front payment decreased in 2010 compared to 2009 due to november 2009 amendments to expand extend companies 2019 antibody collaboration.
 november 2009 amendment discovery agreement sanofi-aventis funding up to $ 30 million agreed-upon costs to expand manufacturing capacity at rensselaer , new york facilities $ 23. 4 million received or receivable from sanofi-aventis as of december 31 , 2010.
 revenue related to these payments for funding from sanofi-aventis deferred recognized as collaboration revenue over related performance period recognition original $ 85. 0 million up-front payment.
 as of december 31 , 2010 , $ 79. 8 million of sanofi-aventis payments deferred recognized as revenue in future periods.
 august 2008  entered separate velocigene ae agreement with sanofi-aventis.
 in 2010 and 2009  recognized $ 1. 6 million and $ 2. 7 million  respectively in revenue related to agreement.
 bayer healthcare collaboration revenue collaboration revenue earned from bayer healthcare consisted of cost sharing of regeneron vegf trap-eye development expenses , performance milestone payments recognition of revenue related to non-refundable $ 75. 0 million up-front payment received in october 2006 and $ 20. 0 million milestone payment received in august 2007 ( revenue recognition not considered substantive ).
 years ended bayer healthcare collaboration revenue december 31.
 cost-sharing of vegf trap-eye development expenses with bayer healthcare increased in 2010 compared to 2009 due to higher internal development activities higher clinical development costs phase 3 copernicus trial in crvo.
 fourth quarter of 2010  earned two $ 10.0 million milestone payments from bayer healthcare for positive 52-week results in view 1 study and positive 6-month results in copernicus study.
 in july 2009  we earned $ 20. 0 million performance milestone payment from bayer healthcare dosing of first patient in copernicus study.
 recognition of deferred revenue related to $ 75. 0 million up-front payment and $ 20. 0 million milestone payment received in august 2007  as of december 31 , 2010 , $ 47. 0 million of payments deferred recognized as revenue in future periods.
 technology licensing revenue velocimmune ae license agreements with astrazeneca and astellas  each of $ 20. 0 million annual  non-refundable payments deferred upon receipt recognized as revenue ratably over ensuing year of each agreement.
 in 2010 and 2009  recognized $ 40. 0 million of technology licensing revenue related to these agreements.
 amendment and extension of license agreement with astellas  in august 2010  received $ 165. 0 million up-front payment deferred upon receipt recognized as revenue ratably over seven-year period beginning mid-2011.
 as of december 31 , 2010 , $ 176. 6 million of technology licensing payments deferred recognized as revenue in future periods.
 net product sales in 2010 and 2009  recognized as revenue $ 25. 3 million and $ 18. 4 million  of arcalyst ae net product sales for right of return no longer existed and rebates could be reasonably estimated.
 company had limited historical return experience for arcalyst ae beginning initial sales in 2008 through end of 2009 arcalyst ae net product sales deferred until right of return no longer existed and rebates reasonably estimated.
effective in first quarter of 2010 , company determined it had

bayer healthcare collaboration revenue                                           | bayer healthcare collaboration revenue |
-------------------------------------------------------------------------------- | -------------------------------------- | ------
( in millions )                                                                  | 2010                                   | 2009
cost-sharing of regeneron vegf trap-eye development expenses                     | $ 45.5                                 | $ 37.4
substantive performance milestone payments                                       | 20.0                                   | 20.0
recognition of deferred revenue related to up-front and other milestone payments | 9.9                                    | 9.9
total bayer healthcare collaboration revenue                                     | $ 75.4                                 | $ 67.3


connection matter could have adverse impact on consolidated cash flows results operations.
 item 4.
 submission matters to vote of security holders november 14 , 2008 stockholders voted approve merger with allied waste industries , inc.
 special meeting held for purpose.
 results voting meeting follows:.
 ( 1 ) to issue shares of republic common stock other securities convertible into exercisable for shares republic common stock contemplated by agreement plan of merger  dated june 22, 2008 amended july 31, 2008  among republic  rs merger wedge , inc wholly owned subsidiary of republic  formed for purpose merger  allied waste industries , inc.
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 141728743 297976 156165 ( 2 ) to adjourn special meeting if necessary solicit additional proxies in favor of foregoing proposal.
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 134081897 8068370 32617 %%transmsg*** transmitting job : p14076 pcn : 035000000 ***%%pcmsg|33 |00022|yes|no|02/28/2009 17:08|0|0|page valid , no graphics -- color : d|

| affirmative | against | abstentions
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ------- | -----------
( 1 ) to issue shares of republic common stock and other securities convertible into or exercisable for shares of republic common stock contemplated by the agreement and plan of merger dated as of june 22 2008 as amended july 31 2008 among republic rs merger wedge inc a wholly owned subsidiary of republic formed for the purpose of the merger and allied waste industries inc . | 141728743   | 297976  | 156165
( 2 ) to adjourn the special meeting if necessary to solicit additional proxies in favor of the foregoing proposal                                                                                | 134081897   | 8068370 | 32617


continuing to invest in people infrastructure to grow presence in lines businesses globally see opportunity for ace to grow market share at reasonable terms.
 continuing to invest in enterprise risk management capability  systems data environment  research and development capabilities.
 critical accounting estimates consolidated financial statements include amounts nature or due to requirements of accounting princi- ples accepted in u. s.
 ( gaap ) determined using best estimates assumptions.
 believe amounts in consolidated financial statements reflect best judgment , actual amounts could differ from currently presented.
 items require most subjective complex estimates are : 2022 unpaid loss loss expense reserves including long-tail asbestos environmental ( a&e ) reserves ; 2022 future policy benefits reserves ; 2022 valuation of value of business acquired ( voba ) amortization of deferred policy acquisition costs voba ; 2022 assessment of risk transfer for certain structured insurance and reinsurance contracts ; 2022 reinsurance recoverable  including provision for uncollectible reinsurance ; 2022 impairments to carrying value of investment portfolio ; 2022 valuation of deferred tax assets ; 2022 valuation of derivative instruments related to guaranteed minimum income benefits ( gmib ) ; 2022 valuation of goodwill.
 accounting policies for these items of critical importance to consolidated financial statements.
 following discussion provides more information regarding estimates assumptions required to arrive at these amounts be read in conjunction with sections entitled : prior period development , asbestos environmental other run-off liabilities , reinsurance recoverable on ceded reinsurance , investments , net realized gains ( losses )  other income and expense items.
unpaid losses and loss expenses as an insurance and reinsurance company  we required by applicable laws regulations gaap to establish loss loss expense reserves for estimated unpaid portion of ultimate liability for losses loss expenses under our policies agreements with insured and reinsured customers.
 estimate of liabilities includes provisions for claims reported but unpaid at balance sheet date ( case reserves ) and for future obligations from claims incurred but not reported ( ibnr ) at balance sheet date ( ibnr may include provision for additional devel- opment on reported claims in case reserve potentially insufficient ).
 reserves provide for liabilities exist for company as of balance sheet date.
 loss reserve includes estimate of expenses associated with processing and settling these unpaid claims ( loss expenses ).
 at december 31 , 2008 , our gross unpaid loss and loss expense reserves were $ 37. 2 billion net unpaid loss and loss expense reserves were $ 24. 2 billion.
 with exception of certain structured settlements , for future claim payments- nable loss reserves not discounted for time value of money.
 in with such structured settlements we carry reserves of $ 106 million ( net of discount ).
 table below presents roll-forward of our unpaid losses and loss expenses for indicated periods.
 ( in millions of u. s.
 dollars ) losses reinsurance recoverable net losses.

( in millions of u.s . dollars )                 | gross losses   | reinsurance recoverable | net losses
------------------------------------------------ | -------------- | ----------------------- | --------------
balance at december 31 2006                      | $ 35517        | $ 13509                 | $ 22008
losses and loss expenses incurred                | 10831          | 3480                    | 7351
losses and loss expenses paid                    | -9516 ( 9516 ) | -3582 ( 3582 )          | -5934 ( 5934 )
other ( including foreign exchange revaluation ) | 280            | 113                     | 167
balance at december 31 2007                      | 37112          | 13520                   | 23592
losses and loss expenses incurred                | 10944          | 3341                    | 7603
losses and loss expenses paid                    | -9899 ( 9899 ) | -3572 ( 3572 )          | -6327 ( 6327 )
other ( including foreign exchange revaluation ) | -1367 ( 1367 ) | -387 ( 387 )            | -980 ( 980 )
losses and loss expenses acquired                | 386            | 33                      | 353
balance at december 31 2008                      | $ 37176        | $ 12935                 | $ 24241


mastercard incorporated notes to consolidated financial statements 2014 ( continued ( in thousands, except percent and per share data ) on june 24, 2008 mastercard entered settlement agreement ( 201camerican express settlement 201d ) with american express company ( 201camerican express 201d ) relating to.
 federal antitrust litigation between mastercard and american express.
 american express settlement ended all existing litigation between mastercard and american express.
 under terms american settlement mastercard obligated to make 12 quarterly payments of up to $ 150000 per quarter beginning third quarter of 2008.
 mastercard 2019s maximum nominal payments total $ 1800000.
 amount of each quarterly payment contingent on performance of american express 2019s.
 global network services business.
 quarterly payments amount equal to 15% ( 15 % ) of american express 2019s.
 global network services billings during quarter up to maximum of $ 150000 per quarter.
 if payment for any quarter less than $ 150000 maximum payment for subsequent quarters increased by difference between $ 150000 and lesser amount paid in any quarter shortfall.
 mastercard assumes american express will achieve these financial hurdles.
 mastercard recorded present value of $ 1800000  at 5. 75%. ) discount rate  or $ 1649345 for year ended december 31 , 2008.
 in 2003  mastercard entered settlement agreement ( 201cu. s.
 merchant lawsuit settlement 201d ) related to.
 merchant lawsuit described under 201cu.
 merchant and consumer litigations 201d in note 20 ( legal and regulatory proceedings ) and contract disputes with certain customers.
 under terms.
 merchant lawsuit settlement company required to pay $ 125000 in 2003 and $ 100000 annually each december from 2004 through 2012.
in 2003  other lawsuits initiated by merchants opted not to participate in plaintiff class in u. s.
 merchant lawsuit.
 201copt-out 201d merchant lawsuits not covered by terms of u. s.
 merchant lawsuit settlement all individually settled.
 recorded liabilities for certain litigation settlements in prior periods.
 total liabilities for litigation settlements changed from december 31, 2006 as:.
 see note 20 ( legal and regulatory proceedings ) for additional discussion company 2019s legal proceedings.

balance as of december 31 2006                          | $ 476915
------------------------------------------------------- | ------------------
provision for litigation settlements ( note 20 )        | 3400
interest accretion on u.s . merchant lawsuit            | 38046
payments                                                | -113925 ( 113925 )
balance as of december 31 2007                          | 404436
provision for discover settlement                       | 862500
provision for american express settlement               | 1649345
provision for other litigation settlements              | 6000
interest accretion on u.s . merchant lawsuit settlement | 32879
interest accretion on american express settlement       | 44300
payments on american express settlement                 | -300000 ( 300000 )
payments on discover settlement                         | -862500 ( 862500 )
payment on u.s . merchant lawsuit settlement            | -100000 ( 100000 )
other payments and accretion                            | -662 ( 662 )
balance as of december 31 2008                          | $ 1736298


performance based restricted stock awards recognized using accelerated amortization method each vesting tranche valued as separate award separate vesting date consistent with estimated value award at each period end.
 compensation expense adjusted for actual forfeitures for all awards in period award forfeited.
 compensation expense for stock options recognized straight-line basis over requisite service period.
 maa presents stock compensation expense in consolidated statements of operations in "general and administrative expenses".
 effective january 1, 2017  company adopted 2016-09 improvements to employee share- based payment accounting allows employers to policy election to account for forfeitures as occur.
 company elected option using modified retrospective transition method cumulative effect adjustment to retained earnings no material effect on consolidated financial position or results of operations resulting from reversal of previously estimated forfeitures.
 total compensation expense under stock plan was approximately $ 10. 8 million , $ 12. 2 million $ 6. 9 million for years ended december 31 , 2017 , 2016 and 2015 .
 total compensation expense capitalized was approximately $ 0. 2 million , $ 0. 7 million and $ 0. 7 million for years ended december 31 , 2017 , 2016 2015 .
 of december 31 , 2017 total unrecognized compensation expense was approximately $ 14. 1 million.
 cost expected to be recognized over remaining weighted average period of 1. 2 years.
 total cash paid for settlement of plan shares totaled $ 4. 8 million , $ 2. 0 million and $ 1. 0 million for years ended december 31 , 2017 , 2016 and 2015 .
 information concerning grants under stock plan listed below.
restricted stock in general stock earned based on service condition , performance condition or market condition  or combination thereof generally vests ratably over period from 1 year to 5 years.
 service based awards earned when employee remains employed over requisite service period valued on grant date based market price of maa common stock on date of grant.
 market based awards earned when maa reaches specified stock price or specified return stock price ( price appreciation plus dividends ) valued grant date using monte carlo simulation.
 performance based awards earned when maa reaches certain operational goals funds from operations or targets valued based upon market price of maa common stock on date of grant probability of reaching stated targets.
 maa remeasures fair value of performance based awards each balance sheet date with adjustments made on cumulative basis until award settled and final compensation known.
 weighted average grant date fair value per share of restricted stock awards granted during years ended december 31 , 2017 , 2016 and 2015  was $ 84. 53 , $ 73. 20 and $ 68. 35 , respectively.
 summary of key assumptions used in valuation calculations for market based awards granted during years ended december 31, 2017 , 2016 and 2015:.
 risk free rate based on zero coupon risk-free rate.
 minimum risk free rate based on period of 0. 25 years for years ended december 31 , 2017 , 2016 and 2015.
 maximum risk free rate based on period of 3 years for years ended december 31 , 2017  2016 and 2015.
 dividend yield based on closing stock price of maa stock on date of grant.
 volatility for maa obtained by using blend of historical and implied volatility calculations.
historical volatility based on standard deviation of daily total continuous returns implied volatility based on trailing month average of daily implied volatilities interpolating between volatilities implied by stock call option contracts closest to terms shown and closest to money.
 minimum volatility based on period of 3 years , 2 years 1 year for years ended december 31 , 2017 , 2016 2015 , respectively.
 maximum volatility based on period of 1 year , 1 year 2 years for years ended december 31 , 2017 , 2016 2015 ,.
 requisite service period based on criteria for separate programs according to vesting schedule.

| 2017                                    | 2016                                    | 2015
------------------------ | --------------------------------------- | --------------------------------------- | ---------------------------------------
risk free rate           | 0.65% ( 0.65 % ) - 1.57% ( 1.57 % )     | 0.49% ( 0.49 % ) - 1.27% ( 1.27 % )     | 0.10% ( 0.10 % ) - 1.05% ( 1.05 % )
dividend yield           | 3.573% ( 3.573 % )                      | 3.634% ( 3.634 % )                      | 3.932% ( 3.932 % )
volatility               | 20.43% ( 20.43 % ) - 21.85% ( 21.85 % ) | 18.41% ( 18.41 % ) - 19.45% ( 19.45 % ) | 15.41% ( 15.41 % ) - 16.04% ( 16.04 % )
requisite service period | 3 years                                 | 3 years                                 | 3 years


fiscal 2006  repurchased 19 million shares common stock for aggregate purchase price $ 892 million $ 7 million settled after end of fiscal year.
 in fiscal 2005  repurchased 17 million shares common stock for aggregate purchase price $ 771 million.
 total of 146 million shares held in treasury at may 28 , 2006.
 used cash from operations to repay $ 189 million in outstanding debt in fiscal 2006.
 fiscal 2005 repaid nearly $ 2. 2 billion of debt including purchase of $ 760 million principal amount of 6 percent notes due in 2012.
 fiscal 2005 debt repurchase costs were $ 137 million $ 73 million noncash interest rate swap losses reclassified from accumulated other income $ 59 million purchase premium $ 5 million noncash unamortized cost of issuance expense.
 capital structure in millions may 28 , may 29.
 $ 2. 1 billion long-term debt maturing in next 12 months classified as current  including $ 131 million may mature in fiscal 2007 based on put rights note holders.
 believe cash flows from operations with available short- and long- term debt financing adequate to meet liquidity and capital needs for least next 12 months.
 on october 28 , 2005 repurchased significant portion of zero coupon convertible debentures put rights holders for aggregate purchase price of $ 1. 33 billion  including $ 77 million accreted original issue discount.
 debentures had aggregate prin- cipal amount at maturity of $ 1. 86 billion.
 incurred no gain or loss from repurchase.
 as of may 28 , 2006 $ 371 million in aggregate principal amount at matu- rity of debentures outstanding or $ 268 million of accreted value.
 used proceeds from issuance of commercial paper to fund purchase price deben- tures.
reclassified remaining zero coupon convertible debentures to long-term debt based on october 2008 put rights holders.
 on march 23 , 2005  commenced cash tender offer for outstanding 6 percent notes due in 2012.
 tender offer resulted in purchase of $ 500 million principal amount of notes.
 subsequent to expiration tender offer purchased additional $ 260 million prin- cipal amount notes in open market.
 aggregate purchases resulted in debt repurchase costs discussed.
 minority interests consist of interests in certain subsidiaries held by third parties.
 general mills cereals , llc ( gmc ) our subsidiary  holds manufac- turing assets and intellectual property associated with production and retail sale of big g ready-to-eat cereals  progresso soups old el paso products.
 may 2002  one wholly owned subsidiaries sold 150000 class a preferred membership interests in gmc to unrelated third-party investor exchange for $ 150 million  in october 2004  another subsidiaries sold 835000 series b-1 preferred membership interests in gmc in exchange for $ 835 million.
 all interests in gmc  other than 150000 class a interests 835000 series b-1 interests including all managing member inter- ests held by wholly owned subsidiaries.
 in fiscal 2003  general mills capital , inc.
 ( gm capital ) subsidiary for purchasing collecting receivables sold $ 150 million of series a preferred stock to unrelated third-party investor.
 class a interests of gmc receive quarterly preferred distributions at floating rate equal to sum of three- month libor plus 90 basis points  divided by ) 0. 965.
rate adjusted by agreement between third- party investor holding class a interests and gmc every five years beginning in june 2007.
 under certain circum- stances  gmc may be required to be dissolved and liquidated  including bankruptcy of gmc or subsidiaries  failure to deliver preferred distributions  failure to comply with portfolio requirements  breaches of covenants  lowering of senior debt rating below baa3 by moody 2019s or bbb by standard & poor 2019s  failed attempt to remarket class a inter- ests breach of gmc 2019s obligations to assist in remarketing.
 in liquidation of gmc  each member of gmc receive amount its then current capital account balance.
 managing member may avoid liquidation by exercising option to purchase class a interests.
 series b-1 interests of gmc entitled to receive quarterly preferred distributions at fixed rate of 4. 5 percent per year scheduled to be reset to new fixed rate through remarketing in october 2007.
 beginning in october 2007 managing member of gmc may elect to repurchase series b-1 interests for amount equal to holder 2019s then current capital account balance plus applicable make-whole amount.
 gmc not required to purchase series b-1 interests nor may investors put these interests to us.
 series b-1 interests be exchanged for shares of our perpetual preferred stock upon following events : senior unsecured debt rating falling below either ba3 rated by moody 2019s or bb- as rated by standard & poor 2019s or fitch , inc.

in millions                       | may 282006 | may 292005
--------------------------------- | ---------- | ----------
notes payable                     | $ 1503     | $ 299
current portion of long-term debt | 2131       | 1638
long-term debt                    | 2415       | 4255
total debt                        | 6049       | 6192
minority interests                | 1136       | 1133
stockholders 2019 equity          | 5772       | 5676
total capital                     | $ 12957    | $ 13001


notes to consolidated financial statements aon 2019s european subsidiaries have a a650 million (.
 $ 942 million ) multi-currency revolving loan credit facility.
 facility mature in october 2010  unless aon extend facility.
 commitment fees of 8. 75 basis points payable on unused portion of facility.
 at december 31 , 2007  aon borrowed a376 million and $ 250 million ( $ 795 million ) under this facility.
 at december 31 , 2006 , a307 million borrowed.
 december 31 2007  $ 250 million of euro facility classified as short-term debt in consolidated statements financial position.
 aon guaranteed obligations of subsidiaries this facility.
 aon maintains $ 600 million , 5-year.
 committed bank credit facility to support commercial paper and other short-term borrowings expires in february 2010.
 facility permits issuance of up to $ 150 million in letters of credit.
 at december 31 , 2007 and 2006  aon had $ 20 million in letters of credit outstanding.
 aon current credit ratings commitment fees of 10 basis points payable on unused portion of facility.
 for both.
 euro facilities aon required to maintain consolidated net worth  of at least $ 2. 5 billion , ratio of consolidated ebitda ( to consolidated interest expense of 4 to 1 ratio of consolidated debt to ebitda not greater than 3 to 1.
 aon has other foreign facilities available include a337. 5 million ( $ 74 million ) facility , a25 million ( $ 36 million ) facility  and a20 million ( $ 29 million ) facility.
 outstanding debt securities  including aon capital 2019s not redeemable by aon prior to maturity.
 no sinking fund provisions.
 interest payable semi-annually on most debt securities.
repayments of long-term debt are $ 548 million  $ 382 million $ 225 million in 2010 2011 2012 .
 other information related to aon 2019s debt:.
 lease commitments aon has noncancelable operating leases for office space equipment automobiles.
 leases expire at various dates may contain renewal expansion options.
 base rental costs occupancy lease agreements provide for rent escalations from increased assessments for real estate taxes other charges.
 approximately 81% ( ) of aon 2019s lease obligations for use of office space.
 rental expense for operating leases amounted to $ 368 million  $ 350 million $ 337 million for 2007  2006 2005  after deducting rentals from subleases ( $ 40 million $ 33 million $ 29 million for 2007  2006 2005  ).
 aon corporation

years ended december 31                                    | 2007           | 2006           | 2005
---------------------------------------------------------- | -------------- | -------------- | --------------
interest paid ( millions )                                 | $ 147          | $ 130          | $ 130
weighted-average interest rates 2014 short-term borrowings | 5.1% ( 5.1 % ) | 4.4% ( 4.4 % ) | 3.5% ( 3.5 % )


edwards lifesciences corporation notes to consolidated financial statements continued ) 12.
 employee benefit plans continued ) equity and debt securities valued at fair value based on quoted market prices on active markets traded.
 insurance contracts valued at cash surrender value contracts approximate fair value.
 following benefit payments  reflect expected future service  at december 31, 2016 expected to be paid ( in millions ) :.
 as of december 31 , 2016 expected employer contributions for 2017 are $ 6. 1 million.
 defined contribution plans company 2019s employees in united states puerto rico eligible to participate in qualified defined contribution plan.
 in united states participants may contribute up to 25% ( 25 % ) of eligible compensation subject to tax code limitation ) to plan.
 edwards lifesciences matches first 3% ( 3 % ) of participant 2019s annual eligible compensation contributed plan dollar-for-dollar basis.
 matches next 2% ( 2 % ) of participant 2019s annual eligible compensation to plan on 50% ( 50 % ) basis.
 in puerto rico participants may contribute up to 25% ( 25 % ) of annual compensation subject to tax code limitation ) to plan.
 edwards lifesciences matches first 4% ( 4 % ) of participant 2019s annual eligible compensation contributed plan 50% ( 50 % ) basis.
 company provides 2% ( 2 % ) profit sharing contribution calculated on eligible earnings for each employee.
 matching contributions to edwards lifesciences employees were $ 17. 3 million , $ 15. 3 million  $ 12. 8 million in 2016 , 2015  2014 .
 company has nonqualified deferred compensation plans for select group of employees.
 plans provide eligible participants opportunity to defer eligible compensation to future dates specified participant with return based on investment alternatives selected participant.
amount accrued under nonqualified plans was $ 46. 7 million and $ 35. 5 million at december 31 , 2016 and 2015  respectively.
 13.
 common stock treasury stock in july 2014  board of directors approved stock repurchase program authorizing company to purchase up to $ 750. 0 million of company 2019s common stock.
 in november 2016  board approved new stock repurchase program for additional $ 1. 0 billion of repurchases of common stock.
 repurchase programs expiration date.
 stock repurchased under programs may to offset obligations under company 2019s employee stock-based benefit programs stock-based business acquisitions reduce total shares outstanding.
 during 2016 , 2015  2014  company repurchased 7. 3 million , 2. 6 million  4. 4 million shares  at aggregate cost of $ 662. 3 million , $ 280. 1 million  $ 300. 9 million  including

2017      | $ 4.5
--------- | -----
2018      | 4.0
2019      | 4.0
2020      | 4.6
2021      | 4.5
2021-2025 | 44.6


authorized costs of $ 76 recovered via surcharge over twenty-year period beginning october 2012.
 surcharges collected as of december 31 , 2015 and 2014 were $ 4 and $ 5 , respectively.
 addition to authorized costs company expects to incur additional costs totaling $ 34  recovered from contributions by california state coastal conservancy.
 contributions collected as of december 31 , 2015 and 2014 were $ 8 and $ 5  respectively.
 regulatory balancing accounts accumulate differences between revenues recognized and authorized revenue requirements until collected from customers or refunded.
 accounts include low income programs purchased power and water accounts.
 debt expense amortized over lives of respective issues.
 call premiums on redemption of long- term debt unamortized debt expense deferred and amortized to extent recovered through future service rates.
 purchase premium recoverable through rates is recovery of acquisition premiums related to asset acquisition by company 2019s california subsidiary 2002  acquisitions in 2007 by company 2019s new jersey subsidiary.
 authorized for recovery by california new jersey costs amortized to depreciation and amortization in consolidated statements of operations through november 2048.
 tank painting costs deferred and amortized to operations and maintenance expense in consolidated statements of operations straight-line basis over periods five to fifteen years as authorized by regulatory authorities in determination of rates charged for service.
 other regulatory assets include deferred business transformation costs  construction costs for treatment facilities  property tax stabilization  employee-related costs business services project expenses coastal water project costs rate case expenditures environmental remediation costs.
 costs deferred because amounts recovered in rates or probable of recovery through rates in future periods.
regulatory liabilities represent probable future reductions in revenues associated with amounts credited or refunded to customers through rate-making process.
 table summarizes composition regulatory liabilities as of december 31:.
 removal costs recovered through rates are estimated costs to retire assets at end of expected useful life recovered through customer rates over life assets.
 in december 2008 company 2019s subsidiary in new jersey  at direction of new jersey puc  began to depreciate $ 48 of total balance into depreciation and amortization expense in consolidated statements operations via straight line amortization through november 2048.
 pension and postretirement benefit balancing accounts represent difference between costs incurred and costs authorized by puc 2019s expected to be refunded to customers.

| 2015  | 2014
---------------------------------------------------------- | ----- | -----
removal costs recovered through rates                      | $ 311 | $ 301
pension and other postretirement benefitbalancing accounts | 59    | 54
other                                                      | 32    | 37
total regulatory liabilities                               | $ 402 | $ 392


performance graph table compares cumulative total shareholder return on our common stock with cumulative total return of standard & poor's 500 composite stock index ( "s&p 500 index standard & poor's industrials index&p index standard & poor's consumer durables & apparel index "s&p consumer index  from december 31 , 2012 through december 31 , 2017 , when closing price our common stock was $ 43. 94.
 graph assumes investments of $ 100 on december 31 , 2012 in our common stock and in each of three indices and reinvestment of dividends.
 table sets forth value  as of december 31 for each years indicated  of $ 100 investment made on december 31 , 2012 in each our common stock , s&p 500 index  s&p industrials index and s&p consumer durables & apparel index and includes reinvestment of dividends.
 $ 50. 00 $ 100. 00 $ 150. 00 $ 200. 00 $ 250. 00 $ 300. 00 $ 350. 00 masco s&p 500 index s&p industrials index s&p consumer durables & apparel index

| 2013     | 2014     | 2015     | 2016     | 2017
------------------------------------- | -------- | -------- | -------- | -------- | --------
masco                                 | $ 138.48 | $ 155.26 | $ 200.79 | $ 227.08 | $ 318.46
s&p 500 index                         | $ 132.04 | $ 149.89 | $ 151.94 | $ 169.82 | $ 206.49
s&p industrials index                 | $ 140.18 | $ 153.73 | $ 149.83 | $ 177.65 | $ 214.55
s&p consumer durables & apparel index | $ 135.84 | $ 148.31 | $ 147.23 | $ 138.82 | $ 164.39


income franchise tax provisions allocable to contracts in process included in general administrative expenses.
 deferred income taxes recorded when revenues and expenses recognized in different periods for financial statement purposes than tax return purposes.
 deferred tax asset or liability account balances calculated at balance sheet date using current tax laws and rates.
 determinations of expected realizability of deferred tax assets need for valuation allowances against tax assets evaluated based upon stand-alone tax attributes of company valuation allowances of $ 21 million and $ 18 million deemed necessary as of december 31, 2012 and 2011  respectively.
 uncertain tax positions meeting more-likely-than-not recognition threshold based on merits position recognized in financial statements.
 recognize amount of tax benefit greater than 50% ( 50 % ) likely to be realized upon ultimate settlement with related tax authority.
 if tax position not meet minimum statutory threshold to avoid payment of penalties recognize expense for amount of penalty in period tax position claimed or expected to be claimed in tax return.
 penalties if probable reasonably estimable recognized as component of income tax expense.
 recognize accrued interest related to uncertain tax positions in income tax expense.
 timing and amount of accrued interest determined by applicable tax law associated with underpayment of income taxes.
 see note 11 : income taxes.
 under existing gaap changes in accruals associated with uncertainties recorded in earnings in period they determined.
 cash and cash equivalents - carrying amounts of cash cash equivalents approximate fair value due to short-term nature of items having original maturity dates of 90 days or less.
accounts receivable - include amounts billed and currently due from customers, amounts currently due but unbilled estimated contract change amounts  claims or requests for equitable adjustment in negotiation probable of recovery amounts retained by customer pending contract completion.
 inventoried costs - relate to work in process under contracts recognize revenues using labor dollars or units of delivery as basis of percentage-of-completion calculation.
 these costs represent accumulated contract costs less cost of sales calculated using percentage-of-completion method.
 accumulated contract costs include direct production costs factory and engineering overhead production tooling costs for government contracts  allowable general and administrative expenses.
 according to company.
 government contracts customer asserts title to  or security interest in inventories related to such contracts as result of contract advances  performance-based payments progress payments.
 with industry practice inventoried costs classified as a current asset include amounts related to contracts having production cycles longer than one year.
 inventoried costs include company owned raw materials stated at lower of cost or market  generally using average cost method.
 property , plant , and equipment - depreciable properties owned by company are recorded at cost and depreciated over estimated useful lives of individual assets.
 costs incurred for computer software developed obtained for internal use are capitalized and amortized over expected useful life of software not to exceed nine years.
 leasehold improvements amortized over shorter of useful lives or term of lease.
 remaining assets depreciated using straight-line method with following lives.
 company evaluates recoverability of property , plant and equipment when changes in economic circumstances or business objectives indicate carrying value may not be recoverable.
company's evaluations include estimated future cash flows  profitability other factors determining fair value.
 assumptions estimates may change over time, may or not be necessary to record impairment charges.

land improvements             | years 3 | years - | years 45
----------------------------- | ------- | ------- | --------
buildings and improvements    | 3       | -       | 60
capitalized software costs    | 3       | -       | 9
machinery and other equipment | 2       | -       | 45


table displays expected benefit payments in years indicated : ( dollars in thousands ).
 1 4.
 d i v i d e n d r e s t r i c t i o n s a n d s t a t u t o r y f i n a n c i a l i n f o r m a t i o n a.
 t s under bermuda law , group prohibited from declaring or paying dividend if payment reduce realizable value of assets to amount less than aggregate value of liabilities and issued share capital and share premium ( addi tional paid-in capital ) accounts.
 group 2019s ability to pay dividends and operating expenses dependent upon dividends from subsidiaries.
 payment of dividends by insurer subsidiaries limited under bermuda law and laws of var- ious u. s.
 states in which group 2019s insurance and reinsurance subsidiaries domiciled.
 limitations based upon net income and compliance with applicable policyholders 2019 surplus or minimum solvency margin and liquidity ratio requirements as determined in with relevant statutory accounting practices.
 under bermuda law , bermuda re prohibited from declaring or making payment of dividend if fails to meet minimum solvency margin or minimum liquidity ratio.
 as long-term insurer bermuda re unable to declare or pay dividend to anyone not policyholder unless after payment dividend value of assets in long-term business fund  certified by approved actuary exceeds liabilities for long-term business by at least $ 250000 minimum solvency margin.
 prior approval of bermuda monetary authority required if bermuda re 2019s dividend payments would reduce prior year-end total statutory capital by 15. 0% ( 15. 0 % ) or more.
delaware law provides insurance company member of insurance holding company system domi- ciled in state not pay dividends without prior notice to insurance commissioner of delaware not pay dividends without approval insurance commissioner if value of proposed dividend  together with all other dividends and distributions in preceding twelve months, exceeds greater of ( 1 ) 10% ( 10 % ) of statutory surplus or ( 2 ) net income , not including realized capital gains , each as reported in prior year 2019s statutory annual statement.
 no dividend may be paid in excess of unassigned earned surplus.
 at december 31 , 2006  everest re had $ 270. 4 million available for payment of dividends in 2007 without for prior regulatory approval.
.
 everest re prepares statutory financial statements in accordance with accounting practices prescribed or permitted by national association of insurance commissioners ( ) and delaware insurance department.
 prescribed statutory accounting practices set forth in naic accounting practices and procedures manual.
 capital and statutory surplus of everest re was $ 2704. 1 million ( unaudited ) and $ 2327. 6 million at december 31 , 2006 and 2005  respectively.
 statutory net income of everest re was $ 298. 7 million ( unaudited ) for year ended december 31 , 2006  statutory net loss was $ 26. 9 million for year ended december 31 , 2005 and statutory net income $ 175. 8 million for year ended december 31 , 2004.
 bermuda re prepares statutory financial statements in conformity with accounting principles in bermuda insurance act 1978 , amendments and related regulations.
 statutory capital and surplus of bermuda re was $ 1893. 9 million ( unaudited ) and $ 1522. 5 million at december 31 , 2006 and 2005  respectively.
statutory net income of bermuda re was $ 409. 8 million ( unaudited ) for year ended december 31 , 2006 , statutory net loss was $ 220. 5 million for year ended december 31 , 2005 statutory net income $ 248. 7 million for year ended december 31 , 2004.
 1 5.
 c o n t i n g e n c i e s ordinary course business  company involved in lawsuits  arbitrations formal and informal dispute resolution procedures  outcomes determine company 2019s rights obligations under insurance  reinsur- ance other contractual agreements.
 in some disputes  company seeks to enforce rights under agreement or collect funds owing to it.
 in other matters  company resisting attempts by others to collect funds or enforce alleged rights.
 disputes arise time to time addressed  resolved  through informal and formal means , including negotiated resolution , arbitration litigation.
 in all matters company believes that

2007         | $ 117
------------ | -----
2008         | 140
2009         | 203
2010         | 263
2011         | 328
next 5 years | 2731


entergy louisiana , llc subsidiaries management 2019s financial discussion analysis results of operations net income 2017 compared to 2016 net income decreased $ 305. 7 million due to effect enactment tax cuts jobs act  december 2017 resulted in decrease of $ 182. 6 million in net income 2017 effect settlement with irs related to 2010-2011 irs audit  resulted in $ 136. 1 million reduction of income tax expense in 2016.
 contributing to decrease net income were higher other operation maintenance expenses.
 decrease partially offset by higher net revenue higher other income.
 see note 3 to financial statements for discussion effects of tax cuts jobs act irs audit.
 2016 compared to 2015 net income increased $ 175. 4 million due to settlement with irs related to 2010-2011 irs audit  resulted in $ 136. 1 million reduction of income tax expense in 2016.
 contributing to increase were lower other operation maintenance expenses higher net revenue higher other income.
 increase partially offset by higher depreciation amortization expenses  higher interest expense  higher nuclear refueling outage expenses.
 see note 3 to financial statements for discussion irs audit.
 net revenue 2017 compared to 2016 net revenue consists of operating revenues net of 1 fuel , fuel-related expenses , gas purchased for resale  2 ) purchased power expenses  3 ) other regulatory charges ( credits ).
 analysis of change in net revenue comparing 2017 to 2016.
 amount ( in millions ).
 regulatory credit resulting from reduction of federal corporate income tax rate variance due to reduction of vidalia purchased power agreement regulatory liability by $ 30.5 million reduction of louisiana act 55 financing savings obligation regulatory liabilities by $ 25 million result of enactment tax cuts and jobs act  december 2017  lowered federal corporate income tax rate from 35% ( 35 % ) to 21% ( 21 % ).
 effects of tax cuts and jobs act discussed in note 3 to financial statements.

| amount ( in millions )
---------------------------------------------------------------------------------- | ----------------------
2016 net revenue                                                                   | $ 2438.4
regulatory credit resulting from reduction of thefederal corporate income tax rate | 55.5
retail electric price                                                              | 42.8
louisiana act 55 financing savings obligation                                      | 17.2
volume/weather                                                                     | -12.4 ( 12.4 )
other                                                                              | 19.0
2017 net revenue                                                                   | $ 2560.5