agreements associated with agency securitizations most sale agreements provide for penalties remedies if not respond timely to investor indemnification or repurchase requests.
 origination and sale of residential mortgages is ongoing business activity management assesses need to recognize indemnification repurchase liabilities associated investor sale agreements.
 we establish indemnification repurchase liabilities for estimated losses on sold first and second-lien mortgages and home equity loans/lines for which indemnification expected to be provided or for loans expected to be repurchased.
 for first second-lien mortgage sold portfolio established indemnification and repurchase liability investor sale agreements based on claims made and estimate of future claims loan by loan basis.
 relate primarily to loans originated during 2006-2008.
 for home equity loans/lines sold portfolio established indemnification and repurchase liabilities based this same methodology for loans sold during 2005-2007.
 indemnification repurchase liabilities initially recognized when loans sold to investors subsequently evaluated by management.
 initial recognition subsequent adjustments to indemnification repurchase liability for sold residential mortgage portfolio recognized in residential mortgage revenue on consolidated income statement.
 since pnc no longer engaged in brokered home equity lending business only subsequent adjustments recognized to home equity loans/lines indemnification and repurchase liability.
 adjustments recognized in other noninterest income on consolidated income statement.
 management 2019s subsequent evaluation of indemnification repurchase liabilities based upon trends in indemnification and repurchase requests  actual loss experience  risks in underlying serviced loan portfolios current economic conditions.
 evaluation management considers estimated loss projections over life of subject loan portfolio.
december 31 , 2011 and december 31, 2010  total indemnification and repurchase liability for estimated losses totaled $ 130 million and $ 294 million  respectively included in other liabilities on consolidated balance sheet.
 analysis of changes in liability during 2011 and 2010 follows : analysis of indemnification and repurchase liability for asserted claims and unasserted claims.
 ( a ) repurchase obligation associated with sold loan portfolios of $ 121. 4 billion and $ 139. 8 billion at december 31 , 2011 and december 31 , 2010 ,.
 ( b ) repurchase obligation associated with sold loan portfolios of $ 4. 5 billion and $ 6. 5 billion at december 31 , 2011 and 31 , 2010 ,.
 pnc no longer engaged in brokered home equity lending business acquired with national city.
 management believes indemnification and repurchase liabilities reflect estimated probable losses on investor indemnification repurchase claims at december 31 , 2011 and 2010.
 management seeks to obtain relevant information estimating indemnification repurchase liability estimation process is uncertain and imprecise possible future indemnification and repurchase losses could be more or less than established liability.
 factors affect estimate include volume of valid claims investor strategies behavior  ability to negotiate claims investors  housing prices  other economic conditions.
 at december 31 , 2011  estimate possible could incur additional losses in excess of indemnification and repurchase liability of up to $ 85 million.
 estimate of potential additional losses in excess liability based on assumed higher investor demands  lower claim rescissions  lower home prices than current assumptions.
reinsurance agreements two wholly-owned captive insurance subsidiaries provide reinsurance to third-party insurers related to insurance sold to our customers.
 subsidiaries enter reinsurance agreements with insurers subsidiary assumes risk of loss through excess of loss or quota share agreement up to 100% ) reinsurance.
 in excess of loss agreements subsidiaries assume risk of loss for excess layer coverage up to specified limits once defined first loss percentage met.
 in quota share agreements subsidiaries and third-party insurers share responsibility for payment of all claims.
 subsidiaries provide reinsurance for accidental death & dismemberment , credit life  accident & health lender placed 200 pnc financial services group , inc.
 2013 form 10-k

in millions                                  | 2011 residential mortgages ( a ) | 2011 home equity loans/lines ( b ) | 2011 total   | 2011 residential mortgages ( a ) | 2011 home equity loans/lines ( b ) | total
-------------------------------------------- | -------------------------------- | ---------------------------------- | ------------ | -------------------------------- | ---------------------------------- | ------------
january 1                                    | $ 144                            | $ 150                              | $ 294        | $ 229                            | $ 41                               | $ 270
reserve adjustments net                      | 102                              | 4                                  | 106          | 120                              | 144                                | 264
losses 2013 loan repurchases and settlements | -163 ( 163 )                     | -107 ( 107 )                       | -270 ( 270 ) | -205 ( 205 )                     | -35 ( 35 )                         | -240 ( 240 )
december 31                                  | $ 83                             | $ 47                               | $ 130        | $ 144                            | $ 150                              | $ 294


fair value of performance awards calculated using market value of share of snap-on 2019s common stock on date of grant.
 weighted-average grant date fair value of performance awards granted during 2013 , 2012 2011 was $ 77. 33 , $ 60. 00 $ 55. 97 , respectively.
 vested performance share units approximated 148000 shares as of 2013 year end  213000 shares 2012 year end 54208 shares as of 2011 year end.
 performance share units of 213459 shares paid out in 2013 53990 shares paid out in 2012 ; no performance share units paid out in 2011.
 earned performance share units generally paid out following conclusion of applicable performance period upon approval by organization and executive compensation committee of company 2019s board of directors (.
 based on company 2019s 2013 performance  84413 rsus granted in 2013 earned ; continued employment rsus vest at end of fiscal 2015.
 company 2019s 2012 performance 95047 rsus granted in 2012 earned continued employment rsus vest at end of fiscal 2014.
 company 2019s 2011 performance 159970 rsus granted in 2011 earned ; rsus vested as of fiscal 2013 year end paid out shortly thereafter.
 result of employee retirements total of 1614 of rsus earned in 2012 and 2011 vested related award agreements underlying shares paid out in third quarter of 2013.
 changes to company 2019s non-vested performance awards in 2013 are as follows : shares ( in thousands ) fair value price per share*.
-average as of 2013 year end approximately $ 12. 9 million of unrecognized compensation cost related to non-vested performance awards expected to be recognized as charge to earnings over-average period of 1. 6 years.
stock appreciation rights ( 201csars 201d ) company issues cash-settled stock-settled sars to certain key non-u. s.
 employees.
 sars have contractual term ten years vest ratably on first second third anniversaries of date of grant.
 sars granted with exercise price equal to market value of share snap-on 2019s common stock on date grant.
 cash-settled sars provide for cash payment of excess fair market value of snap-on 2019s common stock price on date exercise over grant price.
 cash-settled sars no effect on dilutive shares or shares outstanding appreciation of snap-on 2019s common stock value over grant price paid in cash not in common stock.
 in 2013 company began issuing stock-settled sars accounted for as equity instruments provide for issuance of snap-on common stock equal to amount company 2019s stock appreciated over exercise price.
 stock-settled sars have effect on dilutive shares and shares outstanding appreciation of snap-on 2019s common stock value over exercise price settled in shares common stock.
 2013 annual report 101

| shares ( in thousands ) | fair valueprice pershare*
-------------------------------------------------- | ----------------------- | -------------------------
non-vested performance awards at beginning of year | 509                     | $ 59.36
granted                                            | 180                     | 77.33
vested                                             | -306 ( 306 )            | 58.94
cancellations                                      | -2 ( 2 )                | 69.23
non-vested performance awards at end of year       | 381                     | 68.13


loan activity.
 we make loans to owners hotels we operate or franchise.
 loan collections  net loan advances to $ 35 million in 2018 compared to net collections $ 94 million in 2017.
 at year-end 2018 had $ 131 million of senior  mezzanine other loans outstanding compared to $ 149 million at year-end 2017.
 equity method investments.
 cash outflows of $ 72 million in 2018  $ 62 million in 2017 $ 13 million in 2016 investments reflect investments in joint ventures.
 financing activities cash flows debt.
 debt increased by $ 1109 million in 2018 to $ 9347 million at year-end 2018 from $ 8238 million year-end 2017 due to issuance series x, y , z  aa notes offset by maturity of series s notes ( $ 330 million ) and lower outstanding commercial paper ( $ 126 million ).
 see footnote 10.
 long-term debt for additional information debt issuances.
 financial objectives include diversifying financing sources optimizing mix and maturity of long-term debt reducing working capital.
 at year-end 2018 long-term debt had weighted average interest rate of 3. 3 percent average maturity of approximately 4. 8 years.
 ratio of fixed-rate long-term debt to total long-term debt was 0. 7 to 1. 0 at year-end 2018.
 see 201ccash requirements and credit facility  201d caption 201cliquidity and capital resources 201d section for information credit facility.
 share repurchases.
 purchased 21. 5 million shares of common stock in 2018 at average price $ 130. 67 per share  29. 2 million shares in 2017 at average price $ 103. 66 per share  8. 0 million shares in 2016 at average price $ 71. 55 per share.
 at year-end 2018.7 million shares remained available for repurchase under board approved authorizations february 15 , 2019 board of directors increased common stock repurchase authorization by 25 million shares.
 for additional information see 201cfourth quarter 2018 issuer purchases of equity securities 201d part ii , item 5.
 dividends.
 board of directors declared quarterly cash dividends in 2018 : ( 1 ) $ 0. 33 per share declared february 9 , 2018 paid march 30, 2018 to shareholders of record february 23, 2018  ( 2 ) $ 0. 41 per share declared may 4 , 2018 paid june 29, 2018 to shareholders of record may 18 , 2018  ( 3 ) $ 0. 41 per share declared august 9 , 2018 paid september 28 , 2018 to shareholders of record august 23 , 2018  ( 4 ) $ 0. 41 per share declared november 8 , 2018 paid december 31 , 2018 to shareholders of record november 21 , 2018.
 board of directors declared cash dividend of $ 0. 41 per share on february 15 , 2019 payable march 29 , 2019 to shareholders of record on march 1 , 2019.
 contractual obligations off-balance sheet arrangements contractual obligations table summarizes contractual obligations at year-end 2018:.
 ( 1 ) includes principal interest payments.
 table not reflect transition tax payments totaling $ 507 million 2017 tax act.
 table not reflect unrecognized tax benefits at year-end 2018 of $ 559 million.
 addition to purchase obligations normal business enter into purchase commitments to manage daily operating needs of hotels we manage.
 reimbursed from cash flows hotels obligations have minimal impact on net income and cash flow.

( $ in millions )                                 | total   | payments due by period less than1 year | payments due by period 1-3 years | payments due by period 3-5 years | payments due by period after5 years
------------------------------------------------- | ------- | -------------------------------------- | -------------------------------- | -------------------------------- | -----------------------------------
debt ( 1 )                                        | $ 10483 | $ 1074                                 | $ 4392                           | $ 2054                           | $ 2963
capital lease obligations ( 1 )                   | 230     | 13                                     | 26                               | 26                               | 165
operating leases where we are the primary obligor | 2073    | 171                                    | 315                              | 292                              | 1295
purchase obligations                              | 286     | 153                                    | 116                              | 17                               | 2014
other noncurrent liabilities                      | 136     | 3                                      | 28                               | 20                               | 85
total contractual obligations                     | $ 13208 | $ 1414                                 | $ 4877                           | $ 2409                           | $ 4508


unconditional purchase obligations approximately $ 390 long-term unconditional purchase obligations relate to feedstock supply for hyco ( hydrogen , carbon monoxide  syngas ) facilities.
 price of feedstock supply principally related to price of natural gas.
 long-term take-or-pay sales contracts to hyco customers matched to term feedstock supply obligations provide recovery of price increases feedstock supply.
 due to matching long-term feedstock supply obligations to customer sales contracts not believe these purchase obligations material effect on our financial condition or results of operations.
 refer to note 17 , commitments and contingencies consolidated financial statements for additional information on unconditional purchase obligations.
 unconditional purchase obligations include other product supply and purchase commitments and electric power and natural gas supply purchase obligations primarily pass-through contracts with customers.
 purchase commitments to spend approximately $ 540 for additional plant and equipment included in unconditional purchase obligations in 2016.
 also purchase materials , energy  capital equipment supplies services as of ordinary course of business under arrangements not unconditional purchase obligations.
 majority of purchases are for raw materials and energy obtained under requirements-type contracts at market prices.
 obligation for future contribution to equity affiliate 19 april 2015 joint venture between air products and acwa holding entered 20-year oxygen and nitrogen supply agreement to supply saudi aramco 2019s oil refinery and power plant in jazan , saudi arabia.
 air products owns 25% ( % ) of joint venture guarantees repayment of share of equity bridge loan.
 expect to invest approximately $ 100 in joint venture.
 as of 30 september 2015 recorded noncurrent liability of $ 67. 5 for obligation to make future equity contributions based on advances received by joint venture under loan.
income tax liabilities noncurrent deferred income tax liabilities as of 30 september 2015 were $ 903. 3.
 tax liabilities related to unrecognized tax benefits as of 30 september 2015 were $ 97. 5.
 these tax liabilities excluded from contractual obligations table impractical to determine cash impact by year payments vary according to changes in tax laws tax rates  operating results.
 uncertainties in timing of effective settlement of uncertain tax positions with taxing authorities.
 refer to note 23, income taxes  consolidated financial statements for additional information.
 pension benefits company sponsors defined benefit pension plans and defined contribution plans cover substantial portion of worldwide employees.
 principal defined benefit pension plans 2014the.
 salaried pension plan.
 pension plan closed to new participants in 2005 replaced with defined contribution plans.
 shift to defined contribution plans expected to reduce volatility of plan expense and contributions.
 fair market value of plan assets for defined benefit pension plans as of 30 september 2015 decreased to $ 3916. 4 from $ 4114. 6 at end of fiscal year 2014.
 projected benefit obligation for these plans was $ 4787. 8 and $ 4738. 6 at end of fiscal years 2015 and 2014.
 refer to note 16 , retirement benefits  consolidated financial statements for comprehensive detailed disclosures on postretirement benefits.
 pension expense.

| 2015           | 2014           | 2013
-------------------------------------------------------------------- | -------------- | -------------- | --------------
pension expense                                                      | $ 135.6        | $ 135.9        | $ 169.7
special terminations settlements and curtailments ( included above ) | 35.2           | 5.8            | 19.8
weighted average discount rate                                       | 4.0% ( 4.0 % ) | 4.6% ( 4.6 % ) | 4.0% ( 4.0 % )
weighted average expected rate of return on plan assets              | 7.4% ( 7.4 % ) | 7.7% ( 7.7 % ) | 7.7% ( 7.7 % )
weighted average expected rate of compensation increase              | 3.5% ( 3.5 % ) | 3.9% ( 3.9 % ) | 3.8% ( 3.8 % )


abiomed , inc.
 and subsidiaries notes to consolidated financial statements 2014 continued ) evidence of arrangement exists 2 delivery occurred or services rendered 3 seller 2019s price to buyer fixed or determinable 4 ) collectibility reasonably assured.
 sab 104 requires title and risks and rewards of ownership transferred to buyer before revenue recognized.
 in addition to sab 104  we follow guidance of eitf 00-21 , revenue arrangements with multiple deliverables.
 derive revenues primarily from product sales  including maintenance service agreements.
 majority of product revenues derived from shipments of ab5000 and bvs 5000 product lines to fulfill customer orders for specified number of consoles and/or blood pumps for specified price.
 recognize revenues and record costs related to such sales upon product shipment.
 maintenance and service support contract revenues recognized ratably over term of service contracts based upon elapsed term of service contract.
 government-sponsored research and development contracts and grants provide for payment on cost-plus-fixed-fee basis.
 revenues from these contracts grants recognized as work performed provided government appropriated sufficient funds for work.
 under contracts in company elects to spend significantly more on development project during term of contract than total contract amount company prospectively recognizes revenue on such contracts ratably over term of contract as incurs related research and development costs provided government appropriated sufficient funds for work.
 d translation of foreign currencies all assets and liabilities of company 2019s non-u. s.
 subsidiaries translated at year-end exchange rates revenues and expenses translated at average exchange rates for year in accordance with sfas no.
 52  foreign currency translation.
 resulting translation adjustments reflected in accumulated other comprehensive loss component of shareholders 2019 equity.
currency transaction gains losses included in accompanying statement of income not material for three years presented.
 ( e ) warranties company accrues for estimated future warranty costs on product sales at time of sale.
 products subject to rigorous regulation quality standards.
 warranty costs included in cost product revenues within consolidated statements of operations.
 following table summarizes activities in warranty reserve for two fiscal years ended march 31, 2006 ( in thousands ).

| 2005         | 2006
-------------------------------------- | ------------ | ------------
balance at the beginning of the year   | $ 245        | $ 231
accrual for warranties                 | 198          | 193
warranty expense incurred for the year | -212 ( 212 ) | -257 ( 257 )
balance at the end of the year         | $ 231        | $ 167


notes to consolidated financial statements 4.
 sum of quarters 2019 earnings per common share may not equal annual amounts due to averaging effect of number of shares and share equivalents year.
 5.
 fourth quarter of 2016  net revenues included losses approximately $ 60 million on sales markdowns of legacy limited partnership investments in third-party-sponsored funds invest- ment management business segment.
 fourth quarter 2016 included $ 70 million provision wealth management busi- ness segment related to brokerage service reporting activities.
 employee share-based awards.
 24.
 subsequent events firm evaluated subsequent events for adjustment or disclosure in financial statements through date report not identified recordable or disclos- able events not otherwise reported in financial state- ments or notes.
 175 december 2017 form 10-k

$ in millions        | 2017 quarter first | 2017 quarter second | 2017 quarter third | 2017 quarter fourth
-------------------- | ------------------ | ------------------- | ------------------ | -------------------
discrete tax benefit | $ 112              | $ 16                | $ 11               | $ 16


stock performance graph line compares cumulative shareholder returns with standard & poor 2019s information technology index standard 2019s 500 stock index for past five years.
 line graph assumes investment of $ 100 in common stock standard & poor 2019s information technology index standard 2019s 500 stock index on may 31 , 2003 assumes reinvestment of all dividends.
 comparison of 5 year cumulative total return* among global payments inc. s&p 500 index s&p information technology index 5/03 5/04 5/05 5/06 5/07 5/08 global payments inc.
 s&p 500 s&p information technology * $ 100 invested on 5/31/03 in stock or index-including reinvestment of dividends.
 fiscal year ending may 31.
 global payments s&p 500 information technology.
 issuer purchases of equity securities in fiscal 2007  board of directors approved share repurchase program authorized purchase of up to $ 100 million of global payments 2019 stock in open market or as otherwise determined by us subject to market conditions business opportunities other factors.
 authorization repurchased 2. 3 million shares of common stock.
 authorization has no expiration date may be suspended or terminated.
 repurchased shares retired available for future issuance.

| global payments | s&p 500  | s&p information technology
----------- | --------------- | -------- | --------------------------
may 31 2003 | $ 100.00        | $ 100.00 | $ 100.00
may 31 2004 | 137.75          | 118.33   | 121.98
may 31 2005 | 205.20          | 128.07   | 123.08
may 31 2006 | 276.37          | 139.14   | 123.99
may 31 2007 | 238.04          | 170.85   | 152.54
may 31 2008 | 281.27          | 159.41   | 156.43


united parcel service , inc.
 subsidiaries management's discussion analysis of financial condition results of operations liquidity capital resources operating activities summary of significant sources ( uses ) of cash from operating activities ( amounts in millions ) :.
 ( a ) represents depreciation amortization , gains and losses on derivative and foreign exchange transactions , deferred income taxes  provisions for uncollectible accounts  pension and postretirement benefit expense  stock compensation expense impairment charges other non-cash items.
 cash from operating activities remained strong throughout 2010 to 2012 period.
 operating cash flow impacted in 2012  compared with 2011 by lower contributions into defined benefit pension and postretirement benefit plans ; partially offset by changes in working capital position , impacted by overall growth in business.
 change in cash flows for income tax receivables and payables in 2011 and 2010 primarily related to timing of discretionary pension contributions during 2010 .
 except for discretionary accelerated fundings plans contributions to company-sponsored pension plans varied based on minimum funding requirements present for individual pension plans.
 in 2012  made $ 355 million required contribution to ups ibt pension plan.
 in 2011 , made $ 1. 2 billion contribution to ups ibt pension plan  satisfied 2011 contribution requirements approximately $ 440 million in contributions not required until after 2011.
 2022 in 2010 , made $ 2. 0 billion in discretionary contributions to ups retirement and ups pension plans  $ 980 million in required contributions to ups ibt pension plan.
 2022 remaining contributions in 2010 through 2012 period largely due to contributions to international pension plans and.
 postretirement medical benefit plans.
discussed in 201ccontractual commitments 201d section , minimum funding requirements next years  primarily related to ups ibt pension , ups retirement ups pension plans.
 as of december 31 , 2012  total worldwide holdings of cash and cash equivalents was $ 7. 327 billion.
 approximately $ 4. 211 billion amount held in european subsidiaries with intended purpose of completing acquisition of tnt express n. v.
 ( see note 16 to consolidated financial statements ).
 excluding portion cash held outside u. s.
 for acquisition-related purposes approximately 50%-60% ( 50%-60 % ) of remaining cash and cash equivalents held by foreign subsidiaries throughout year.
 amount of cash held by u. s.
 foreign subsidiaries fluctuates year due to variety of factors including timing of cash receipts and disbursements in normal course of business.
 cash provided by operating activities in united states continues primary source of funds to finance domestic operating needs, capital expenditures share repurchases dividend payments to shareowners.
 extent such amounts represent previously untaxed earnings  cash held by foreign subsidiaries subject to tax if repatriated in form of dividends ; not all international cash balances to be repatriated in form of dividend if returned to u. s.
 when amounts earned by foreign subsidiaries expected to be indefinitely reinvested  no accrual for taxes provided.

| 2012         | 2011           | 2010
---------------------------------------------------------------------- | ------------ | -------------- | --------------
net income                                                             | $ 807        | $ 3804         | $ 3338
non-cash operating activities ( a )                                    | 7301         | 4505           | 4398
pension and postretirement plan contributions ( ups-sponsored plans )  | -917 ( 917 ) | -1436 ( 1436 ) | -3240 ( 3240 )
income tax receivables and payables                                    | 280          | 236            | -319 ( 319 )
changes in working capital and other noncurrent assets and liabilities | -148 ( 148 ) | -12 ( 12 )     | -340 ( 340 )
other operating activities                                             | -107 ( 107 ) | -24 ( 24 )     | -2 ( 2 )
net cash from operating activities                                     | $ 7216       | $ 7073         | $ 3835


management 2019s discussion analysis of financial condition results of operations 2013 ( continued ) ( amounts in millions , except per share amounts ) operating income increased 2017 compared to 2016  comprised of decrease in revenue of $ 42. 1 , discussed above , decrease in salaries related expenses of $ 28. 0 decrease in office and general expenses of $ 16. 9.
 decrease in salaries related expenses due to lower discretionary bonuses incentive expense decrease in base salaries , benefits tax.
 decrease in office general expenses due to decreases in adjustments to contingent acquisition obligations , compared to prior year.
 operating income increased 2016 compared to 2015 due to increase in revenue of $ 58. 8 , decrease in office and general expenses of $ 3. 7 , partially offset by increase in salaries related expenses of $ 38. 8.
 increase in salaries related expenses attributable to increase in base salaries , benefits tax due to increases in workforce to support business growth last twelve months.
 decrease in office and general expenses due to lower production expenses related to pass-through costs, reflected in revenue  for certain projects in acted as principal decreased in size or did not recur current year.
 corporate other certain corporate other charges reported as separate line item within total segment operating income include corporate office expenses , shared service center certain other centrally managed expenses not fully allocated to operating divisions.
 salaries related expenses include salaries , long-term incentives  annual bonuses miscellaneous benefits for corporate office employees.
 office general expenses include professional fees related to internal control compliance , financial statement audits legal , information technology other consulting services engaged managed through corporate office.
 office general expenses include rental expense depreciation of leasehold improvements for properties occupied by corporate office employees.
portion of centrally managed expenses allocated to operating divisions based on formula planned revenues of operating units.
 amounts allocated include specific charges for information technology-related projects allocated based on utilization.
 corporate and other expenses decreased 2017 by $ 20. 6 to $ 126. 6 compared to 2016  primarily due to lower annual incentive expense.
 corporate and other expenses increased 2016 by $ 5. 4 to $ 147. 2 compared to 2015.
 liquidity capital resources cash flow overview tables summarize key financial data to liquidity  capital resources uses of capital.
 1 reflects net income adjusted for depreciation and amortization of fixed assets intangible assets amortization of restricted stock non-cash compensation net losses on sales businesses deferred income taxes.
 2 reflects changes in accounts receivable  expenditures billable to clients other current assets  accounts payable accrued liabilities.
 operating activities due to seasonality of business typically use cash from working capital in first nine months of year largest impact in first quarter generate cash from working capital in fourth quarter  driven by seasonally strong media spending by clients.
 quarterly and annual working capital results impacted by fluctuating annual media spending budgets of clients changing media spending patterns year across various countries.

cash flow data                                                                 | years ended december 31 , 2017 | years ended december 31 , 2016 | years ended december 31 , 2015
------------------------------------------------------------------------------ | ------------------------------ | ------------------------------ | ------------------------------
net income adjusted to reconcile to net cash provided by operating activities1 | $ 887.3                        | $ 1023.2                       | $ 848.8
net cash used in working capital2                                              | -29.9 ( 29.9 )                 | -414.9 ( 414.9 )               | -99.9 ( 99.9 )
changes in other non-current assets and liabilities                            | 24.4                           | -95.5 ( 95.5 )                 | -60.4 ( 60.4 )
net cash provided by operating activities                                      | $ 881.8                        | $ 512.8                        | $ 688.5
net cash used in investing activities                                          | -196.2 ( 196.2 )               | -263.9 ( 263.9 )               | -199.7 ( 199.7 )
net cash used in financing activities                                          | -1004.9 ( 1004.9 )             | -666.4 ( 666.4 )               | -490.9 ( 490.9 )


table of contents company uses custom components not commonly used by competitors new products introduced often utilize custom components available from only one source.
 when component or product uses new technologies , initial capacity constraints may exist until suppliers 2019 yields matured or manufacturing capacity increased.
 if company 2019s supply of components for new or existing product delayed or constrained  or if outsourcing partner delayed shipments of completed products company company 2019s financial condition and operating results could be materially adversely affected.
 company 2019s business and financial performance could be adversely affected depending on time required to obtain sufficient quantities from original source  or to identify obtain sufficient quantities from alternative source.
 continued availability of components at acceptable prices or may be affected if suppliers concentrated on production of common components instead of components customized to meet company 2019s requirements.
 company entered into agreements for supply of many components ; no guarantee company will to extend or renew these agreements on similar terms or.
 company remains subject to significant risks of supply shortages and price increases could adversely affect financial condition and operating results.
 substantially all of company 2019s hardware products are manufactured by outsourcing partners located primarily in asia.
 significant concentration of manufacturing is performed by small number of outsourcing partners often in single locations.
 certain these outsourcing partners are sole- sourced suppliers of components and manufacturers for many company 2019s products.
 company works closely with outsourcing partners on manufacturing schedules company 2019s operating results could be adversely affected if outsourcing partners unable to meet production commitments.
 company 2019s purchase commitments typically cover requirements for periods up to 150 days.
 other off-balance sheet commitments operating leases company leases various equipment and facilities  including retail space under noncancelable operating lease arrangements.
company utilize other off-balance sheet financing arrangements.
 major facility leases typically for terms not exceeding 10 years generally contain multi-year renewal options.
 as of september 26 , 2015  company had total 463 retail stores.
 leases for retail space for terms from five to 20 years majority for 10 years often contain multi-year renewal options.
 as of september 26 , 2015  company 2019s total future minimum lease payments under noncancelable operating leases were $ 6. 3 billion  $ 3. 6 billion related to leases for retail space.
 rent expense under all operating leases including cancelable and noncancelable leases was $ 794 million , $ 717 million and $ 645 million in 2015 , 2014 2013  respectively.
 future minimum lease payments under noncancelable operating leases remaining terms in excess of one year as of september 26  2015 are as follows ( in millions ) :.
 company utilizes outsourcing partners to manufacture sub-assemblies for products perform final assembly and testing of finished products.
 outsourcing partners acquire components build product based on demand information supplied company covers periods up to 150 days.
 company obtains individual components for products from wide variety of individual suppliers.
 company acquires components through combination purchase orders supplier contracts open orders based on projected demand information.
 appropriate purchases applied to inventory component prepayments outstanding with respective supplier.
 as of september 26 , 2015  company had outstanding off-balance sheet third-party manufacturing commitments and component purchase commitments of $ 29. 5 billion.
 apple inc.
 2015 form 10-k | 65

2016       | $ 772
---------- | ------
2017       | 774
2018       | 744
2019       | 715
2020       | 674
thereafter | 2592
total      | $ 6271


higher first half year declined second half reflecting pass- through to customers of lower resin input costs.
 average margins benefitted from favorable mix of products sold.
 raw material costs lower primarily for resins.
 freight costs favorable operating costs increased.
 shorewood sales volumes 2009 declined from 2008 levels reflecting weaker demand in home entertainment segment decrease in tobacco segment orders customers shifted pro- duction outside united states offset by higher shipments in consumer products segment.
 average sales margins improved reflecting favorable mix of products sold.
 raw material costs higher partially offset by lower freight costs.
 operating costs favorable reflect benefits from business reorganization cost reduction actions in 2008 and 2009.
 charges to restructure operations totaled $ 7 million in 2009 and $ 30 million in 2008.
 2010 coated paperboard sales volumes expected to increase average sales price real- izations comparable to 2009 fourth-quarter levels.
 raw material costs expected higher for wood , energy chemicals planned maintenance downtime costs will decrease.
 foodservice sales volumes expected remain flat average sales price realizations should improve slightly.
 input costs for resins higher offset by lower costs for bleached board.
 shorewood sales volumes expected to decline reflecting seasonal decreases in home entertainment segment shipments.
 operating costs expected favorable reflecting benefits business reorganization efforts.
 european consumer packaging net sales in 2009 were $ 315 million compared with $ 300 million in 2008 $ 280 million in 2007.
 operating earnings in 2009 of $ 66 million increased from $ 22 million in 2008 and $ 30 million in 2007.
 sales volumes in 2009 higher than 2008 reflecting increased ship- ments to export markets.
 average sales margins declined due to increased shipments to lower- margin export markets lower average sales prices in western europe.
2010 sales volumes first quarter expected remain strong.
 average margins improve reflecting increased sales price realizations favorable geographic mix of products sold.
 input costs expected higher due to increased wood prices in poland annual energy tariff increases in russia.
 asian consumer packaging net sales were $ 545 million in 2009 compared with $ 390 million 2008 $ 330 million in 2007.
 operating earnings 2009 $ 24 million compared with loss $ 13 million in 2008 earnings $ 12 million in 2007.
 improved operating earnings 2009 reflect increased sales volumes higher average sales mar- gins lower input costs primarily for chemicals.
 loss in 2008 due to $ 12 million charge to revalue pulp inventories at shandong international paper sun coated paperboard co. , ltd.
 joint venture start-up costs associated with joint venture new folding box board paper machine.
 distribution distribution business markets diverse array of products supply chain services to cus tomers many business segments.
 customer demand sensitive to changes economic conditions commercial printing segment dependent on consumer advertising promotional spending.
 distribution 2019s margins stable across economic cycle.
 providing customers best choice value in products supply chain services key competitive factor.
 efficient customer service cost-effective logistics focused working capital management key factors in segment 2019s profitability.
 distribution in millions 2009 2008 2007.
 distribution 2009 annual sales decreased 18% ( 18 % ) from 2008 11% ( 11 % ) from 2007 operating profits 2009 decreased 51% ( 51 % ) compared with 2008 54% ( 54 % ) compared with 2007.
 annual sales of printing papers graphic arts supplies equipment totaled $ 4. 1 billion in 2009 compared with $ 5. 2 billion in 2008 $ 4. 7 billion in 2007 reflecting weak economic conditions 2009.
trade margins percent sales for printing papers increased from 2008 decreased 2007 due to higher mix lower margin direct ship- ments from manufacturers.
 revenue from packaging products was $ 1. 3 billion in 2009 compared with $ 1. 7 billion 2008 $ 1. 5 billion 2007.
 trade margins percent sales for packaging products higher past two years reflecting improved product service mix.
 facility supplies annual revenue was $ 1. 1 billion in 2009

in millions      | 2009   | 2008   | 2007
---------------- | ------ | ------ | ------
sales            | $ 6525 | $ 7970 | $ 7320
operating profit | 50     | 103    | 108


discount to brent narrower in 2013 than 2012 and 2011.
 result of significant increase in.
 production of light sweet crude oil historical relationship between wti , brent and lls pricing may not be indicative of future periods.
 2013 proportion of liquid hydrocarbon sales volumes ngls continues increase due to development of united states unconventional liquids-rich plays.
 ngls were 15 percent of north america e&p liquid hydrocarbon sales volumes in 2013 compared to 10 percent in 2012 and 7 percent in 2011.
 natural gas 2013 significant portion of natural gas production in u.
 sold at bid-week prices or first-of-month indices relative to specific producing areas.
 average henry hub settlement prices for natural gas 31 percent higher for 2013 than 2012.
 international e&p liquid hydrocarbons 2013 international e&p crude oil production relatively sweet historically sold in relation to brent crude benchmark average 3 percent lower for 2013 than 2012.
 natural gas 2013 major international e&p natural gas-producing regions are europe and e. g.
 natural gas prices in europe higher than u. s.
 in recent years.
. g. natural gas sales subject to term contracts making realized prices areas less volatile.
 natural gas sales from e. g.
 at fixed prices reported average international e&p natural gas realized prices may not fully track market price movements.
 oil sands mining mining segment produces and sells various synthetic crude oil.
 output mix can be impacted by operational problems or planned unit outages at mines.
 sales prices for two-thirds of normal output mix historically tracked movements in wti one-third historically tracked movements in canadian heavy crude oil marker primarily wcs.
 wcs discount to wti increasing on average in each year.
despite wider wcs discount in 2013 average oil sands mining price realizations increased due to greater higher value synthetic crude oil sales volumes compared to 2012.
 operating cost structure oil sands mining predominantly fixed costs incurred in full operation continue during production downtime.
 per-unit costs sensitive to production rates.
 key variable costs are natural gas and diesel fuel track commodity markets aeco natural gas sales index crude oil prices.
 table below shows average benchmark prices impact revenues variable costs:.
 wcs ( dollars per bbl ) ( a ) $ 72. 77 $ 73. 18 $ 77. 97 aeco natural gas sales index ( dollars per mmbtu ) ( b ) $ 3. 08 $ 2. 39 $ 3. 68 monthly pricing based average wti adjusted for differentials unique to western canada.
 ) monthly average day ahead index.

benchmark                                                | 2013    | 2012    | 2011
-------------------------------------------------------- | ------- | ------- | -------
wti crude oil ( dollars per bbl )                        | $ 98.05 | $ 94.15 | $ 95.11
wcs ( dollars per bbl ) ( a )                            | $ 72.77 | $ 73.18 | $ 77.97
aeco natural gas sales index ( dollars per mmbtu ) ( b ) | $ 3.08  | $ 2.39  | $ 3.68


goldman sachs group , inc.
 subsidiaries notes to consolidated financial statements commercial lending.
 firm 2019s commercial lending commitments extended to investment-grade and non- investment-grade corporate borrowers.
 commitments to investment-grade corporate borrowers principally used for operating liquidity general corporate purposes.
 firm extends lending commitments in with contingent acquisition financing other corporate lending commercial real estate financing.
 commitments extended for contingent acquisition financing often intended short-term borrowers seek to replace with other funding sources.
 sumitomo mitsui financial group , inc.
 ( smfg ) provides firm credit loss protection on certain approved loan commitments ( primarily investment-grade commercial lending commitments ).
 notional amount of such loan commitments was $ 26. 88 billion and $ 27. 03 billion as of december 2016 and december 2015 .
 credit loss protection on loan commitments by smfg limited to 95% ( 95 % ) of first loss firm realizes on commitments up to maximum of approximately $ 950 million.
 subject to satisfaction conditions upon firm 2019s request smfg will provide protection for 70% ( ) of additional losses on commitments up to maximum of $ 1. 13 billion of $ 768 million of protection provided as of december 2016 and december 2015.
 firm uses other financial instruments to mitigate credit risks related to certain commitments not covered by smfg.
 instruments include credit default swaps reference same or similar underlying instrument or entity or credit default swaps reference market index.
 warehouse financing.
 firm provides financing to clients who warehouse financial assets.
 arrangements secured by warehoused assets primarily of consumer and corporate loans.
contingent forward starting resale securities borrowing agreements/forward starting repurchase secured lending agreements firm enters into resale securities agreements lending agreements settle at future date generally within three business days.
 firm enters commitments to provide contingent financing to clients counterparties through resale agreements.
 firm 2019s funding of commitments depends on satisfaction of contractual conditions resale agreement commitments can expire unused.
 letters of credit firm has commitments under letters of credit issued by banks provides to counterparties in lieu of securities or cash to satisfy collateral margin deposit requirements.
 investment commitments firm investment commitments include commitments to invest in private equity real estate other assets directly through funds firm raises manages.
 investment commitments include $ 2. 10 billion and $ 2. 86 billion as of december 2016 december 2015 respectively related to commitments to invest in funds managed by firm.
 if commitments called funded at market value on date of investment.
 leases firm has contractual obligations under long-term noncancelable lease agreements for office space expiring dates through 2069.
 certain agreements subject to periodic escalation provisions for increases in real estate taxes other charges.
 table presents future minimum rental payments  net of minimum sublease rentals.
 $ in millions december 2016.
 rent charged to operating expense was $ 244 million for 2016  $ 249 million for 2015 $ 309 million for 2014.
 operating leases include office space held in excess of current requirements.
 rent expense relating to space held for growth included in 201coccupancy. 201d firm records liability  based on fair value of remaining lease rentals reduced by potential existing sublease rentals for leases where firm ceased using space management concluded firm not derive future economic benefits.
costs terminate lease before end term recognized measured at fair value on termination.
 during 2016  firm incurred exit costs approximately $ 68 million to excess office space.
 goldman sachs 2016 form 10-k 169

$ in millions     | as of december 2016
----------------- | -------------------
2017              | $ 290
2018              | 282
2019              | 238
2020              | 206
2021              | 159
2022 - thereafter | 766
total             | $ 1941


table of contents other areas in we do business.
 depending on scope of regulation , our facilities and operations  or operations of suppliers  may be subject to additional operating permit requirements  potentially resulting in increased operating costs.
 future regulatory developments future regulatory developments actions could affect operations increase operating costs for airline industry , including our airline subsidiaries.
 see part i , item 1a.
 risk factors 2013 201cif we unable to obtain maintain adequate facilities infrastructure system at some airports adequate slots , may be unable to operate existing flight schedule expand or change route network in future may material adverse impact on our operations , 201d 201cour business subject to extensive government regulation may result in increases in costs disruptions to operations limits on operating flexibility reductions in demand for air travel competitive disadvantages 201d and 201cwe subject to environmental regulation may incur substantial costs 201d for additional information.
 employees labor relations airline business is labor intensive.
 in 2015 , salaries , wages benefits were our largest expenses represented approximately 31% ( 31 % ) of operating expenses.
 table below presents approximate number of active full-time equivalent employees as of december 31 , 2015.
 mainline operations wholly-owned regional carriers total.

| mainline operations | wholly-owned regional carriers | total
------------------------------------------- | ------------------- | ------------------------------ | ------
pilots and flight crew training instructors | 13100               | 3200                           | 16300
flight attendants                           | 24100               | 1900                           | 26000
maintenance personnel                       | 14400               | 1800                           | 16200
fleet service personnel                     | 16100               | 3200                           | 19300
passenger service personnel                 | 16500               | 7100                           | 23600
administrative and other                    | 14700               | 2400                           | 17100
total                                       | 98900               | 19600                          | 118500


marketing supplier of gasoline distillates to resellers consumers within market area in midwest  upper great plains  gulf coast southeastern regions of united states.
 in 2007  refined products sales volumes totaled 21. 6 billion gallons  or 1. 410 mmbpd.
 average sales price refined products was $ 86. 53 per barrel for 2007.
 following table sets refined products sales by product group average sales price for each last three years.
 refined product sales ( thousands of barrels per day ) 2007 2006 2005.
 total ( a ) 1410 1425 1455 average sales price ( dollars per barrel ) $ 86. 53 $ 77. 76 $ 66. 42 includes matching buy/sell volumes of 24 mbpd and 77 mbpd in 2006 and 2005.
 on april 1, 2006  changed accounting for matching buy/sell arrangements new accounting standard.
 change resulted in lower refined products sales volumes for 2007 remainder of 2006 than reported under previous accounting practices.
 see note 2 to consolidated financial statements.
 wholesale distribution of petroleum products to private brand marketers large commercial industrial consumers sales in spot market accounted for 69 percent of refined products sales volumes in 2007.
 sold 49 percent of gasoline volumes 89 percent of distillates volumes wholesale or spot market basis.
 half of propane sold into home heating market balance purchased by industrial consumers.
 propylene , cumene  aromatics  aliphatics sulfur domestically marketed to customers in chemical industry.
 base lube oils , maleic anhydride  slack wax , extract pitch sold throughout united states canada pitch products exported worldwide.
market asphalt through owned leased terminals throughout midwest upper great plains gulf coast southeastern regions of united states.
 customer base includes approximately 750 asphalt-paving contractors government entities ( states counties cities townships ) asphalt roofing shingle manufacturers.
 blended ethanol with gasoline for over 15 years increased blending program in 2007 due to renewable fuel mandates.
 blended 41 mbpd of ethanol into gasoline in 2007 35 mbpd in 2006 and 2005.
 future expansion or contraction of ethanol blending program driven by economics ethanol supply changes in government regulations.
 sell reformulated gasoline in marketing territory primarily chicago , illinois ; louisville , kentucky northern kentucky milwaukee, wisconsin hartford , illinois sell low-vapor-pressure gasoline in nine states.
 also sell biodiesel in minnesota , illinois kentucky.
 as of december 31 , 2007 supplied petroleum products to about 4400 marathon branded-retail outlets primarily in ohio , michigan indiana kentucky illinois.
 branded retail outlets also located in georgia , florida , minnesota, wisconsin  north carolina , tennessee  west virginia , virginia  south carolina  alabama pennsylvania texas.
 sales to marathon-brand jobbers dealers accounted for 16 percent of refined product sales volumes in 2007.
 speedway superamerica llc ( ) our wholly-owned subsidiary sells gasoline diesel fuel primarily through retail outlets we operate.
sales refined products through ssa retail outlets accounted for 15 percent of refined products sales volumes in 2007.
 as of december 31 , 2007 ssa had 1636 retail outlets in nine states sold petroleum products convenience store merchandise services under brand names 201cspeedway 201d 201csuperamerica. 201d ssa 2019s revenues from non-petroleum merchandise totaled $ 2. 796 billion in 2007 compared with $ 2. 706 billion in 2006.
 profit levels from such merchandise services less volatile than retail sale gasoline diesel fuel.
 ssa operates 59 valvoline instant oil change retail outlets in michigan northwest ohio.
 pilot travel centers llc ( 201cptc 201d )  joint venture with pilot corporation ( 201cpilot 201d largest operator of travel centers in united states with 286 locations in 37 states canada at december 31 , 2007.
 travel centers offer diesel fuel  gasoline other services including on-premises brand-name restaurants at locations.
 pilot and marathon each own 50 percent interest in ptc.

( thousands of barrels per day )           | 2007    | 2006    | 2005
------------------------------------------ | ------- | ------- | -------
gasoline                                   | 791     | 804     | 836
distillates                                | 377     | 375     | 385
propane                                    | 23      | 23      | 22
feedstocks and special products            | 103     | 106     | 96
heavy fuel oil                             | 29      | 26      | 29
asphalt                                    | 87      | 91      | 87
total ( a )                                | 1410    | 1425    | 1455
average sales price ( dollars per barrel ) | $ 86.53 | $ 77.76 | $ 66.42


table of contents global brand concepts american living launched exclusively at jcpenney in february 2008 american living offers classic american style with fresh modern spirit authentic sensibility.
 from everyday essentials to special occasion looks for entire family to finely crafted bedding home furnishings promises stylish clothing home products exceptionally made offered at incredible value.
 american living available exclusively at jcpenney and jcp.
 chaps translates classic heritage timeless aesthetic of ralph lauren into accessible line for men , women  children home.
 from casual basics for versatility ease wear to smart finely tailored silhouettes for business formal occasions chaps creates interchangeable classics enduring and affordable.
 chaps men 2019s collection available at select department and specialty stores.
 chaps collections for women , children home available exclusively at kohl 2019s and kohls. com.
 wholesale segment sells products to leading upscale mid-tier department stores  specialty stores golf and pro shops domestically and internationally.
 focus on elevating brand by improving in-store product assortment presentation improving full-price sell-throughs.
 as of end of fiscal 2011  ralph lauren- branded products sold through approximately 10000 doors worldwide during fiscal 2011 invested approximately $ 35 million in related shop-within-shops primarily in domestic international department and specialty stores.
 department stores are our major wholesale customers in north america.
 in europe wholesale sales are varying mix of sales to both department stores and specialty shops depending on country.
 collection brands 2014 women 2019s ralph lauren collection black label and men 2019s purple label and black label 2014 distributed through limited number of premier fashion retailers.
we sell excess out-of-season products through secondary distribution channels including retail factory stores.
 in japan  wholesale products distributed primarily through shop-within-shops at premiere top-tier department stores mix of business weighted to women 2019s blue label.
 in asia ( excluding japan south korea )  wholesale products sold at mid top- tier department stores mix business primarily weighted to men 2019s women 2019s blue label.
 in asia worldwide basis products distributed through concessions-based sales arrangements reported within our retail segment ( see 201cour retail segment 201d for further discussion ).
 worldwide distribution channels table presents number of doors by geographic location  ralph lauren-branded products distributed by our wholesale segment sold to consumers in primary channels of distribution as of april 2 , 2011 : number of location doors.
 american living chaps-branded products distributed by wholesale segment sold domestically through approximately 1700 doors as of april 2 , 2011.

location                 | number of doors
------------------------ | ---------------
united states and canada | 5943
europe                   | 3919
asia                     | 93
total                    | 9955


summary our cash flows for each period were as follows:.
 operating activities cash is net income adjusted for certain non-cash items changes in assets and liabilities.
 for 2013 compared to 2012  $ 1. 9 billion increase in cash due to changes in working capital partially offset by lower net income in 2013.
 income taxes paid  net of refunds  in 2013 compared to 2012 were $ 1. 1 billion lower due to lower income before taxes in 2013 and 2012 income tax overpayments.
 changes in assets and liabilities as of december 28 , 2013  compared to december 29 , 2012 included lower income taxes payable and receivable from reduction in taxes due in 2013 lower inventories due to sell-through of older-generation products partially offset by ramp of 4th generation intel core processor family products.
 for 2013  three largest customers accounted for 44% ( 44 % ) of net revenue ( 43% ( 43 % ) in 2012 and 2011 ) hewlett- packard company accounting for 17% ( 17 % ) of net revenue % 2012 19% ( 19 % 2011 dell for 15% ( 15 % ) net revenue lenovo for 12% ( 12 % ) of net revenue 11% 11 % 2012 9% ( 9 % 2011.
 these three customers accounted for 34% ( 34 % ) of accounts receivable as of december 28 , 2013 ( 33% ( 33 % ) as of december 29 , 2012 ).
 for 2012 compared to 2011  $ 2. 1 billion decrease in cash operating activities due to lower net income and changes in working capital partially offset by adjustments for non-cash items.
 adjustments for noncash items higher due primarily to higher depreciation in 2012 compared to 2011 partially offset by increases in non-acquisition-related deferred tax liabilities as of december 31 , 2011.
investing activities cash flows consist of capital expenditures ; investment purchases  sales  maturities disposals cash used for acquisitions.
 increase in cash for investing activities in 2013 compared to 2012 due to increase in purchases of available-for-sale investments decrease in maturities sales of trading assets partially offset by increase in maturities sales of available-for-sale investments decrease in purchases of licensed technology patents.
 capital expenditures were $ 10. 7 billion in 2013 ( $ 11. 0 billion in 2012 and $ 10. 8 billion in 2011 ).
 cash used for investing activities increased in 2012 compared to 2011 primarily due to net purchases of available- for-sale investments trading assets in 2012 net maturities sales 2011 partially offset by decrease in cash paid for acquisitions.
 net purchases of available-for-sale investments in 2012 included purchase of $ 3. 2 billion of equity securities in in q3 2012.
 financing activities cash flows consist of repurchases of common stock  payment of dividends to stockholders issuance repayment of long-term debt proceeds from sale of shares through employee equity incentive plans.
 table of contents management 2019s discussion analysis of financial condition results of operations (

( in millions )                                                   | 2013             | 2012             | 2011
----------------------------------------------------------------- | ---------------- | ---------------- | ----------------
net cash provided by operating activities                         | $ 20776          | $ 18884          | $ 20963
net cash used for investing activities                            | -18073 ( 18073 ) | -14060 ( 14060 ) | -10301 ( 10301 )
net cash used for financing activities                            | -5498 ( 5498 )   | -1408 ( 1408 )   | -11100 ( 11100 )
effect of exchange rate fluctuations on cash and cash equivalents | -9 ( 9 )         | -3 ( 3 )         | 5
net increase ( decrease ) in cash and cash equivalents            | $ -2804 ( 2804 ) | $ 3413           | $ -433 ( 433 )


green realty corp.
 2012 annual report 85 | in april a02011  purchased sitq immobilier  subsid- iary of caisse de depot et placement du quebec  or sitq 2019s , 31. 5% ( 31. 5 % ) economic interest in 1515 a0 broadway  consoli- dating full ownership of 1750000 a0square foot ( unaudited ) building.
 transaction valued consolidated interests at $ 1. 23 a0 billion.
 valuation based on negotiated sales agreement consideration factors distressed sale and minority dis- count warranted.
 acquired interest subject to $ 458. 8 a0million mortgage encumbering property.
 rec- ognized purchase price fair value adjustment of $ 475. 1 a0mil- lion upon closing transaction.
 property initially acquired in may a02002  previously accounted for as investment in unconsolidated joint ventures.
 january a0 2011  purchased city investment fund , or cif 2019s , 49. 9% ( 49. 9 % ) a0interest in 521 a0fifth avenue assum- ing full ownership of 460000 a0 square foot ( unaudited ) building.
 transaction valued consolidated interests at approximately $ 245. 7 a0 million  excluding $ 4. 5 a0 million of cash and other assets acquired.
 acquired interest subject to $ 140. 0 a0 million mortgage encumbering property.
 recognized purchase price fair value adjust- ment of $ 13. 8 a0million upon closing transaction.
 in april a02011 refinanced property with new $ 150. 0 a0mil- lion 2-year mortgage floating rate of interest of 200 a0basis points over 30-day libor.
 connection refinancing acquired fee interest in property for $ 15. 0 a0million.
summarizes allocation of purchase price assets acquired liabilities assumed upon closing 2011 acquisitions ( amounts in thousands ) : 51 east 180 110 east 1515 521 fifth 42nd street maiden lane 42nd street broadway avenue land fffd$ 44095 $ 191523 $ 34000 $ 2002 2008462700 $ 110100.
 net consideration funded by us at closing fffd$ 81632 $ 200281835 $ 20022744 $ 2002 2008259228 $ 200270000 equity and/or debt investment held fffd 2014 2014 $ 16000 $ 2002 2002 200840942 $ 200241432 debt assumed fffd$ 2002 2002 2002 2002 2008 2014 $ 2002 2002 2002 2002 2002 2008 2014 $ 65000 $ 2002 2008458767 $ 140000 2010 acquisitions  in january 2010  became sole owner of 100 a0church street , 1. 05 a0million square foot ( unau dited ) office tower in downtown manhattan  following successful foreclosure of senior mezzanine loan property.
 initial investment totaled $ 40. 9 a0million  50% ( 50 % ) a0interest in senior mezzanine loan two other mezzanine loans at 100 a0 church street  acquired from gramercy capital corp.
 ( ) summer of 2007.
 closing foreclo- sure funded additional $ 15. 0 a0million capital into project agreement with wachovia bank .
 to extend restructure existing financing.
 gramercy declined to fund share capital trans- ferred interests in investment to us at closing.
 restructured $ 139. 7 a0million mortgage carries interest rate of 350 a0basis points over 30-day libor.
 restructured mortgage  scheduled to mature in january 2013  repaid in march a02011.
august 2010  acquired 125 park avenue manhattan office tower for $ 330 a0million.
 acquisition assumed $ 146. 25 a0million in-place financ- ing.
 5. 748% ( 5. 748 % ) interest-only loan matures october a02014.
 december a02010  completed acquisition of various investments from gramercy.
 acquisition included 1 remaining 45% ( 45 % ) a0interest in leased fee at 885 a0third avenue for approximately $ 39. 3 a0 million plus assumed mortgage debt approximately $ 120. 4 a0million remaining 45% ( 45 % ) interest in leased fee at 2 a0 herald square for approxi- mately $ 25. 6 a0 million plus assumed mortgage debt approximately $ 86. 1 a0 million 3 entire leased fee interest in 292 a0madison avenue for approximately $ 19. 2 a0mil- lion plus assumed mortgage debt approximately $ 59. 1 a0million.
 assets all leased to third a0party operators.

| 51 east 42nd street | 180 maiden lane | 110 east 42nd street | 1515 broadway  | 521 fifth avenue
---------------------------------------------- | ------------------- | --------------- | -------------------- | -------------- | ----------------
land                                           | $ 44095             | $ 191523        | $ 34000              | $ 462700       | $ 110100
building                                       | 33470               | 233230          | 46411                | 707938         | 146686
above market lease value                       | 5616                | 7944            | 823                  | 18298          | 3318
acquired in-place leases                       | 4333                | 29948           | 5396                 | 98661          | 23016
other assets net of other liabilities          | 2014                | 2014            | 2014                 | 27127          | 2014
assets acquired                                | 87514               | 462645          | 86630                | 1314724        | 283120
fair value adjustment to mortgage note payable | 2014                | 2014            | 2014                 | -3693 ( 3693 ) | 2014
below market lease value                       | 7514                | 20320           | 2326                 | 84417          | 25977
liabilities assumed                            | 7514                | 20320           | 2326                 | 80724          | 25977
purchase price allocation                      | $ 80000             | $ 442325        | $ 84304              | $ 1234000      | $ 257143
net consideration funded by us at closing      | $ 81632             | $ 81835         | $ 2744               | $ 259228       | $ 70000
equity and/or debt investment held             | 2014                | 2014            | $ 16000              | $ 40942        | $ 41432
debt assumed                                   | $ 2014              | $ 2014          | $ 65000              | $ 458767       | $ 140000


table of contents item 1b.
 unresolved staff comments no unresolved sec staff comments to report.
 item 2.
 properties as of december 31 , 2015  owned or leased 126 major manufacturing sites 14 major technical centers.
 manufacturing site may include multiple plants be wholly or partially owned or leased.
 many smaller manufacturing sites , sales offices  warehouses  engineering centers joint ventures other investments strategically located throughout world.
 presence in 44 countries.
 table shows regional distribution of major manufacturing sites by operating segment uses facilities : north america europe , middle east & africa asia pacific south america total.
 in addition to manufacturing sites 14 major technical centers : four in north america five in europe , middle east and africa ; four in asia pacific one in south america.
 of 126 major manufacturing sites and 14 major technical centers  include facilities owned or leased by consolidated subsidiaries 77 are primarily owned 63 primarily leased.
 frequently review real estate portfolio develop footprint strategies to support customers 2019 global plans supporting technical needs controlling operating expenses.
 believe evolving portfolio will meet current and anticipated future needs.
 item 3.
 legal proceedings subject to various actions , claims , suits  government investigations  other proceedings incidental to business  including of alleged defects , breach of contracts  competition and antitrust matters  product warranties  intellectual property matters  personal injury claims employment-related matters.
 opinion outcome of such matters will not have material adverse impact on consolidated financial position , results of operations  or cash flows.
respect to warranty matters we cannot ensure future costs of warranty claims customers not material, believe our established reserves adequate to cover potential warranty settlements.
 final amounts required to resolve matters could differ from recorded estimates.
 gm ignition switch recall in first quarter of 2014  gm , delphi 2019s largest customer initiated product recall related to ignition switches.
 delphi received requests for information from cooperated with various government agencies related to this ignition switch recall.
 delphi initially named as co-defendant with gm ( certain other parties ) in class action and product liability lawsuits related to this matter.
 as of december 31 , 2015 delphi not named as defendant in any class action complaints.
 no assurances can be made ultimate outcome of these or other future claims delphi not believe loss probable no reserve made as of december 31 , 2015.
 unsecured creditors litigation fourth amended and restated limited liability partnership agreement of delphi automotive llp ( 201cfourth llp agreement 201d ) entered into on july 12, 2011 by members delphi automotive llp to position company for initial public offering.
 under terms fourth llp agreement if cumulative distributions to members delphi automotive llp under certain provisions fourth llp agreement exceed $ 7. 2 billion , delphi , as disbursing agent on behalf of dphh required to pay to holders of allowed general unsecured claims against dphh $ 32. 50 for every $ 67. 50 in excess of $ 7. 2 billion distributed to members up to maximum amount of $ 300 million.
december 2014  complaint filed in bankruptcy court alleging redemption by delphi automotive llp of membership interests of gm and pbgc , repurchase of shares payment of dividends by delphi automotive plc  constituted distributions under terms fourth llp agreement approximating $ 7. 2 billion.
 delphi considers cumulative

| north america | europemiddle east& africa | asia pacific | south america | total
---------------------------------- | ------------- | ------------------------- | ------------ | ------------- | -----
electrical/electronic architecture | 30            | 32                        | 25           | 5             | 92
powertrain systems                 | 4             | 10                        | 5            | 2             | 21
electronics and safety             | 3             | 7                         | 3            | 2014          | 13
total                              | 37            | 49                        | 33           | 7             | 126


devon energy corporation subsidiaries notes to consolidated financial statements 2013 continued ) debt maturities as of december 31 , 2014  excluding premiums discounts are as follows ( in millions ) :.
 credit lines devon has a $ 3. 0 billion syndicated  unsecured revolving line of credit ( senior credit facility ).
 maturity date for $ 30 million credit facility is october 24 , 2017.
 maturity date for $ 164 million is october 24 , 2018.
 maturity date for remaining $ 2. 8 billion is october 24 , 2019.
 amounts borrowed under senior credit facility may election devon bear interest at fixed rate options for up to twelve months.
 such rates generally less than prime rate.
 devon may elect to borrow at prime rate.
 senior credit facility provides for annual facility fee of $ 3. 8 million payable quarterly in arrears.
 as of december 31 , 2014 no borrowings under senior credit facility.
 senior credit facility contains one material financial covenant.
 covenant requires devon 2019s ratio of total funded debt to total capitalization in credit agreement no greater than 65 percent.
 credit agreement contains definitions of total funded debt and total capitalization include adjustments to amounts reported in accompanying consolidated financial statements.
 total capitalization adjusted to add back noncash financial write-downs full cost ceiling impairments or goodwill impairments.
 as of december 31 , 2014 devon in compliance with covenant with debt-to- capitalization ratio of 20. 9 percent.
 commercial paper devon has access to $ 3. 0 billion of short-term credit under commercial paper program.
 commercial paper debt has maturity of between 1 and 90 days can up to 365 days bears interest at rates agreed to at time of borrowing.
interest rate based on standard index federal funds rate libor or money market rate in commercial paper market.
 as of december 31 , 2014 devon 2019s commercial paper borrowings of $ 932 million have weighted- average borrowing rate 0. 44 percent.
 retirement of senior notes on november 13 , 2014  devon redeemed $ 1. 9 billion of senior notes prior to scheduled maturity primarily with proceeds from asset divestitures.
 redemption includes 2. 4%. ) $ 500 million senior notes due 2016  1. 2% ( 1. 2 % ) $ 650 million senior notes due 2016 1. 875% ( 1. 875 % ) $ 750 million senior notes due 2017.
 notes redeemed for $ 1. 9 billion  included 100 percent of principal amount make-whole premium of $ 40 million.
 date redemption notes had unamortized discount of $ 2 million unamortized debt issuance costs of $ 6 million.
 make-whole premium unamortized discounts debt issuance costs included in net financing costs on 2014 consolidated comprehensive statement of earnings.

2015                | $ 1432
------------------- | -------
2016                | 350
2017                | 2014
2018                | 875
2019                | 1337
2020 and thereafter | 7263
total               | $ 11257


worldwide wholesale distribution channels table presents number of doors by geographic location in which products distributed by our wholesale segment sold to consumers in primary channels distribution as of april 2 , 2016:.
 ( a ) includes u. s.  canada  latin america.
 ( b ) includes middle east.
 ( c ) includes australia and new zealand.
 three key wholesale customers generate significant sales volume.
 during fiscal 2016  sales to our largest wholesale customer , macy's , inc.
 accounted for approximately 11% ( 11 % ) and 25% ( 25 % ) of our total net revenues and total wholesale net revenues respectively.
 during fiscal 2016 sales to our three largest wholesale customers including macy's accounted for approximately 24% ( 24 % ) and 53% ( 53 % ) of our total net revenues and total wholesale net revenues respectively.
 our products sold primarily by our own sales forces.
 wholesale segment maintains primary showrooms in new york city.
 maintain regional showrooms in milan , paris  london  munich madrid stockholm panama.
 shop-within-shops.
 critical element of distribution to department stores utilize to enhance brand recognition permit complete merchandising of lines differentiate presentation of products.
 as of april 2 , 2016  had approximately 25000 shop-within-shops in our primary channels of distribution dedicated to wholesale products worldwide.
 size of shop-within-shops ranges from 100 to 9200 square feet.
 shop-within-shop fixed assets include items customized freestanding fixtures , wall cases and components  decorative items  and flooring.
share in cost of building shop-within-shops with wholesale customers.
 basic stock replenishment program.
 basic products as knit shirts , chino pants oxford cloth shirts select accessories  home products can be ordered by wholesale customers at any time through basic stock replenishment program.
 generally ship these products within two to five days of order receipt.
 retail segment retail segment sells directly to customers throughout world via 493 retail stores , totaling approximately 3. 8 million square feet  and 583 concession-based shop-within-shops , through various e-commerce sites.
 extension of direct-to-consumer reach is one of primary long-term strategic goals.
 operate retail business using omni-channel retailing strategy to deliver integrated shopping experience with consistent message of brands and products to customers regardless of shopping for products in physical stores or online.
 ralph lauren stores lauren stores feature broad range of apparel , accessories watch and jewelry  fragrance  home product assortments in atmosphere reflecting distinctive attitude and image of ralph lauren , polo , double rl , denim & supply brands including exclusive merchandise not sold in department stores.
 during fiscal 2016  opened 22 new ralph lauren stores closed 21 stores.
 ralph lauren stores primarily situated in major upscale street locations and upscale regional malls generally in large urban markets.

location           | number of doors
------------------ | ---------------
the americas ( a ) | 7741
europe ( b )       | 5625
asia ( c )         | 136
total              | 13502


international networks generated revenues $ 1637 million during 2012  represented 37% ( 37 % ) of our total consolidated revenues.
 our international networks segment consists of national and pan-regional television networks.
 segment generates revenue from operations in every pay-television market through infrastructure includes operational centers in london  singapore miami.
 discovery channel , animal planet tlc lead international networks 2019 portfolio of television networks.
 international networks has largest international distribution platforms with fourteen networks in more than 200 countries territories.
 at december 31 , 2012 international networks operated over 180 unique distribution feeds in over 40 languages with channel feeds customized according to language needs advertising sales opportunities.
 international networks has free-to-air networks in u. k.  germany italy spain continues pursue international expansion.
 international networks segment owns and operates following television networks reached number of subscribers as of december 31 , 2012 : global networks international subscribers ( millions ) regional networks international subscribers ( millions ).
 on december 21 , 2012  international networks segment acquired 20% ( 20 % ) equity ownership interests in eurosport , european sports satellite cable network portfolio of pay television networks from tf1 french media company for $ 264 million  including transaction costs.
 call right enables us to purchase controlling interest in eurosport starting december 2014 for one year thereafter.
 if exercise call right tf1 will right to put remaining interest to us for one year thereafter.
 arrangement intended to increase growth of eurosport  focuses on niche regionally popular sports tennis  skiing cycling skating enhance our pay television offerings in france.
december 28 , 2012 , we acquired switchover media , group of five italian television channels with children's entertainment programming.
 ( see note 3 to accompanying consolidated financial statements. ) education education generated revenues of $ 105 million during 2012 , represented 2% ( 2 % ) of total consolidated revenues.
 education comprised of curriculum-based product service offerings.
 segment generates revenues primarily from subscriptions to k-12 schools for access to online suite of curriculum-based vod tools , professional development services  digital textbooks student assessments publication of hardcopy curriculum-based content.
 education business participates in global brand content licensing engages in partnerships with leading non-profits  corporations  foundations trade associations.
 content development content development strategy designed to increase viewership maintain innovation quality leadership provide value for network distributors advertising customers.
 content sourced from wide range of third-party producers include world 2019s leading nonfiction production companies independent producers.
 production arrangements fall into three categories : produced , coproduced licensed.
 all produced content includes content we engage third parties to develop produce , we retain editorial control own most or all rights , in exchange for paying all development production costs.
 coproduced content refers to program rights we collaborated with third parties to finance develop because world-wide rights not available for acquisition or save costs collaborating with third parties.
 licensed content comprised of films or series previously produced by third parties.

global networks discovery channel | internationalsubscribers ( millions ) 246 | regional networks dmax        | internationalsubscribers ( millions ) 90
--------------------------------- | ----------------------------------------- | ----------------------------- | ----------------------------------------
animal planet                     | 183                                       | discovery kids                | 61
tlc real time and travel & living | 174                                       | quest                         | 26
discovery science                 | 75                                        | discovery history             | 13
investigation discovery           | 63                                        | shed                          | 12
discovery home & health           | 57                                        | discovery en espanol ( u.s. ) | 5
turbo                             | 42                                        | discovery familia ( u.s )     | 4
discovery world                   | 27                                        |                               |


property and equipment recorded at cost.
 company provides for depreciation amortization straight-line basis over estimated useful lives:.
 improvements of leased properties amortized over shorter of life of applicable lease term or estimated useful life of asset.
 impairment of long-lived assets when indicators of impairment present company evaluates carrying value of long-lived assets other than goodwill in relation to operating performance future cash flows or appraised values of underlying assets.
 in accordance with sfas 144 , 201caccounting for impairment or disposal of long-lived assets, 201d company reviews for impairment stores open more than two years for current cash flows from operations negative.
 impairment results when carrying value of assets exceeds undiscounted future cash flows over life of lease.
 company 2019s estimate of undiscounted future cash flows over lease term based upon historical operations stores estimates of future store profitability factors subject to variability difficult to predict.
 if long-lived asset found to impaired amount recognized for impairment equal to difference between carrying value and asset 2019s fair value.
 fair value estimated based primarily upon future cash flows ( discounted at company 2019s credit adjusted risk-free rate ) or other reasonable estimates of fair market value.
 assets to be disposed of adjusted to fair value less cost to sell if less than book value.
 company recorded impairment charges included in sg&a expense of approximately $ 0. 2 million in 2007 predecessor period , $ 9. 4 million in 2006 $ 0. 6 million in 2005 to reduce carrying value of certain stores 2019 assets necessary due to negative sales trends cash flows at locations.
 majority of 2006 charges recorded pursuant to strategic initiatives discussed in note 3.
goodwill other intangible assets company amortizes assets over estimated useful lives unless lives indefinite.
 amortizable intangible assets tested for impairment based on undiscounted cash flows if impaired written down to fair value based on discounted cash flows or appraised values.
 intangible assets with indefinite lives tested annually for impairment written down to fair value as required.
 no impairment of intangible assets identified during periods presented.

land improvements                | 20
-------------------------------- | -----
buildings                        | 39-40
furniture fixtures and equipment | 3-10


equipment and energy.
 2013 vs.
 2012 sales of $ 451. 1 increased from higher lng project activity.
 operating income $ 65. 5 increased from higher lng project activity.
 sales backlog for equipment business at 30 september 2013 was $ 402  compared to $ 450 at 30 september 2012.
 expected approximately $ 250 of backlog be completed during 2014.
 2012 vs.
 2011 sales of $ 420. 1 increased 5% ( 5 % )  or $ 19. 5  reflecting higher air separation unit ) activity.
 operating income of $ 44. 6 decreased 29% ( 29 % ) or $ 18. 2 reflecting lower lng project activity.
 sales backlog for equipment business at 30 september 2012 was $ 450  compared to $ 334 at 30 september 2011.
 other operating income ( loss ) includes other expense and income directly associated with business segments including foreign exchange gains and losses.
 included lifo inventory valuation adjustments business segments not allocated to business segments.
 included stranded costs from discontinued operations not reallocated to businesses in 2012.
 2013 vs.
 2012 operating loss was $ 4. 7  compared to $ 6. 6 in prior year.
 current year includes unfavorable lifo adjustment versus prior year of $ 11.
 prior year loss included stranded costs from discontinued operations of $ 10.
 2012 vs.
 2011 operating loss was $ 6. 6  compared to $ 39. 3 in prior year due to reduction in stranded costs  decrease in lifo adjustment decreases in inventory values favorable foreign exchange  offset by gains on asset sales prior year.

| 2013    | 2012    | 2011
---------------- | ------- | ------- | -------
sales            | $ 451.1 | $ 420.1 | $ 400.6
operating income | 65.5    | 44.6    | 62.8


cross-border outstandings defined by bank regulatory rules are amounts payable to state street by residents of foreign countries regardless of currency and local country claims in excess of local country obligations.
 outstandings consist primarily of deposits with banks loan and lease financing investment securities.
 to credit risk outstandings have risk that political or economic conditions in country borrowers may be unable to meet contractual repayment obligations of principal interest because of unavailability of or restrictions on foreign exchange needed.
 cross-border outstandings to countries in we business which amounted to at least 1% ( 1 % ) of our consolidated total assets were as follows as of december 31:.
 total cross-border outstandings in represented 5% ( 5 % ) , 12% ( 12 % ) and 9% ( 9 % ) of our consolidated total assets as of december 31 , 2008 , 2007 2006 .
 aggregate cross-border outstandings to countries totaled between. 75% (. 75 % ) and 1% ( 1 % ) of our consolidated total assets at december 31 , 2008 amounted to $ 3. 45 billion ( canada and germany ).
 no cross-border outstandings to countries which totaled between. 75% (. 75 % ) and 1% ( 1 % ) of consolidated total assets as of december 31 , 2007.
 aggregate cross-border outstandings to countries totaled between. 75% (. 75 % ) and 1% ( 1 % ) of total assets at december 31 , 2006 amounted to $ 1. 05 billion ( canada ).
 capital regulatory and economic capital management use key metrics to assess our actual level of capital commensurate with risk profile in compliance with regulatory requirements sufficient to financial flexibility to undertake future strategic business initiatives.
regulatory capital objective regulatory capital management is to maintain strong capital base to provide financial flexibility for business needs , including funding corporate growth supporting customers 2019 cash management needs  provide protection against loss to depositors and creditors.
 we strive to maintain optimal level of capital , commensurate with risk profile , attractive return to shareholders realized over short and long term , while protecting obligations to depositors and creditors satisfying regulatory requirements.
 capital management process focuses on risk exposures , capital position relative to peers , regulatory capital requirements evaluations of major independent credit rating agencies assign ratings to public debt.
 our capital committee , in with asset and liability committee , to as alco , oversees management of regulatory capital  responsible for ensuring capital adequacy with to regulatory requirements  internal targets expectations of major independent credit rating agencies.
 primary regulator of state street and state street bank for regulatory capital purposes is federal reserve.
 both state street and state street bank subject to minimum capital requirements established by federal reserve defined in federal deposit insurance corporation improvement act

( in millions )                 | 2008   | 2007    | 2006
------------------------------- | ------ | ------- | ------
united kingdom                  | $ 5836 | $ 5951  | $ 5531
australia                       | 2044   | 3567    | 1519
canada                          | 2014   | 4565    | 2014
germany                         | 2014   | 2944    | 2696
total cross-border outstandings | $ 7880 | $ 17027 | $ 9746


36 duke realty corporation annual report 2013 leasing/capital costs tenant improvements lease-related costs to initial leasing of newly completed space or vacant space in acquired properties referred as first generation expenditures.
 first generation expenditures for tenant improvements included within "development of real estate investments" in consolidated statements of cash flows expenditures for lease-related costs included within "other deferred leasing costs. cash expenditures related to construction of building's shell associated site improvements also included within "development of real estate investments" in consolidated statements of cash flows.
 tenant improvements leasing costs to re-let rental space previously leased to tenants referred as second generation expenditures.
 building improvements not specific to tenant improve integral components of real estate properties are also second generation expenditures.
 principal uses of liquidity to fund second generation leasing/capital expenditures of real estate investments.
 table summarizes second generation capital expenditures by type of expenditure ( in thousands ) :.
 second generation tenant improvements and leasing costs increased due to shift in industrial leasing volume from renewal leases to second generation leases ( see data in key performance indicators section of management's discussion analysis of financial condition results of operations ) generally more capital intensive.
 overall renewal volume lower renewals for office leases  more capital intensive than industrial increased from 2012.
 during 2013 increased investment across all product types in non-tenant specific building improvements.
 increase in capital expenditures for development of real estate investments result of increased focus on wholly owned development projects.
 wholly owned properties under development with expected cost of $ 572. 6 million at december 31 , 2013 compared to projects with expected cost of $ 468.8 million $ 124. 2 million at december 31 , 2012 2011.
 cash outflows for real estate development investments were $ 427. 4 million  $ 264. 8 million $ 162. 1 million for december 31 , 2013  2012 2011.
 capitalized $ 31. 3 million  $ 30. 4 million $ 25. 3 million overhead costs related to leasing activities including first and second generation leases during years ended december 31 , 2013  2012 2011.
 capitalized $ 27. 1 million  $ 20. 0 million $ 10. 4 million overhead costs related to development activities including construction  development tenant improvement projects on first and second generation space  years ended december 31 , 2013  2012 2011.
 combined overhead costs capitalized to leasing development totaled 35. 7% ( 35. 7 % )  31. 1% ( 31. 1 % ) 20. 6% ( 20. 6 % ) of overall pool of overhead costs at december 31 , 2013  2012 2011 .
 further discussion of capitalization of overhead costs found discussion general administrative expenses comparison sections management's discussion analysis of financial condition results of operations.

| 2013     | 2012     | 2011
-------------------------------------------- | -------- | -------- | --------
second generation tenant improvements        | $ 39892  | $ 26643  | $ 50079
second generation leasing costs              | 38617    | 31059    | 38130
building improvements                        | 13289    | 6182     | 11055
total second generation capital expenditures | $ 91798  | $ 63884  | $ 99264
development of real estate investments       | $ 427355 | $ 264755 | $ 162070
other deferred leasing costs                 | $ 35376  | $ 27772  | $ 26311


containerboard group ( division of tenneco packaging inc. ) notes to combined financial statements continued ) april 11 , 1999 5.
 pension and benefit plans continued ) funded status of group 2019s allocation of defined benefit plans excluding retirement plan reconciles with amounts recognized in 1998 statements of assets and liabilities interdivision account ( in thousands ) : actuarial present value at september 30 , 1998 2014.
 weighted average discount rate value of benefit obligations was 7. 00% ( 7. ) for year ended december 31 , 1998.
 weighted average expected long-term rate of return on plan assets was 10% ( 10 % ) for 1998.
 middle management employees participate in incentive compensation plans.
 plans provide for incentive payments based on achievement of targeted operating results specific business goals.
 targeted operating results determined each year by senior management of packaging.
 amounts charged to expense for these plans were $ 1599000 for period ended april 11 , 1999.
 in june , 1992  tenneco initiated employee stock purchase plan ( 2018 2018espp 2019 2019 ).
 plan allows.
 canadian employees group to purchase tenneco inc.
 common stock through payroll deductions at 15% ( 15 % ) discount.
 each year employee in plan may purchase shares with discounted value not to exceed $ 21250.
 weighted average fair value of employee purchase right  estimated using black-scholes option pricing model assumptions average life of each purchase right 90 days  was $ 6. 31 for period ended december 31 , 1998.
 espp terminated as of september 30 , 1996.
 tenneco adopted new employee stock purchase plan effective april 1 , 1997.
 tenneco sold 36883 shares to group employees for period ended april 11 , 1999.
december , 1996  tenneco adopted 1996 stock ownership plan permits granting variety of awards  including common stock  restricted stock  performance units  stock appreciation rights stock options to officers employees tenneco.
 tenneco can issue up to 17000000 shares common stock under plan terminate december 31 , 2001.
 april 11 , 1999  fair market value of options granted calculated using tenneco 2019s stock price at grant date multiplying amount by historical percentage of past black-scholes pricing values fair value ( approximately 25% ( 25 % ) ).
 fair value of each stock option issued by tenneco group in prior periods estimated on date of grant using black-sholes option pricing model using ranges of weighted average assumptions for grants past three

vested benefit obligation                      | $ -98512 ( 98512 )
---------------------------------------------- | --------------------
accumulated benefit obligation                 | -108716 ( 108716 )
projected benefit obligation                   | $ -108716 ( 108716 )
plan assets at fair value at september 30 1998 | 146579
unrecognized transition liability              | -1092 ( 1092 )
unrecognized net gain                          | -14623 ( 14623 )
unrecognized prior service cost                | 13455
prepaid pension cost at december 31 1998       | $ 35603