state street corporation notes to consolidated financial statements continued ) 5. 25% ( 5. 25 % ) subordinated bank notes due 2018  state street bank required make semi- annual interest payments on outstanding principal balance notes april 15 october 15 each year notes qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.
 5. 30% ( 5. 30 % ) subordinated notes due 2016 floating-rate subordinated notes due 2015 state street bank required make semi-annual interest payments on outstanding principal balance of 5. 30% ( 5. 30 % ) subordinated notes january 15 july 15 each year quarterly interest payments on outstanding principal balance floating-rate notes march 8  june 8 september 8 december 8 each year.
 each subordinated notes qualifies for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.
 note 11.
 commitments , guarantees contingencies commitments : unfunded off-balance sheet commitments to extend credit totaling $ 21. 30 billion and $ 17. 86 billion as of december 31 , 2013 2012 .
 potential losses commitments equal gross contractual amounts do not consider value of any collateral.
 approximately 75% ( 75 % ) of unfunded commitments to extend credit expire within one year from date of issue.
 many commitments expected to expire or renew without drawn upon gross contractual amounts do not represent future cash requirements.
 guarantees : off-balance sheet guarantees indemnified securities financing  stable value protection  unfunded commitments to purchase assets  standby letters of credit.
 potential losses associated guarantees equal gross contractual amounts do not consider value of any collateral.
 following table presents aggregate gross contractual amounts of off-balance sheet guarantees as of december 31 , 2013 2012.
 amounts do not reflect participations to independent third parties.
indemnified securities financing on behalf of clients we lend securities  as agent  to brokers other institutions.
 in most circumstances we indemnify clients for fair market value of securities against failure of borrower to return securities.
 require borrowers to maintain collateral amount equal to or in excess of 100% ( 100 % ) of fair market value of securities borrowed.
 securities on loan and collateral revalued daily to determine if additional collateral necessary or if excess collateral required to be returned to borrower.
 collateral received in with securities lending services held by us as agent not recorded in our consolidated statement of condition.
 cash collateral held by us as agent invested on behalf clients.
 in certain cases cash collateral invested in third-party repurchase agreements for we indemnify client against loss of principal invested.
 require counterparty to indemnified repurchase agreement to provide collateral in amount equal to or in excess of 100% ( 100 % ) of amount of repurchase agreement.
 role agent indemnified repurchase agreements and related collateral held us not recorded in our consolidated statement of condition.

( in millions )                  | 2013     | 2012
-------------------------------- | -------- | --------
indemnified securities financing | $ 320078 | $ 302341
stable value protection          | 24906    | 33512
asset purchase agreements        | 4685     | 5063
standby letters of credit        | 4612     | 4552


republic services , inc.
 notes to consolidated financial statements 2014 ( continued ) 16.
 financial instruments fuel hedges entered multiple swap agreements cash flow hedges to mitigate exposure related to changes in diesel fuel prices.
 swaps qualified for effective hedges of changes in prices forecasted diesel fuel purchases ( fuel hedges ).
 table summarizes outstanding fuel hedges as of december 31 , 2015 : year gallons hedged weighted average contract price per gallon.
 if national.
 on-highway average price for gallon diesel fuel published by department of energy exceeds contract price per gallon receive difference between average price and contract price ( multiplied by notional gallons ) from counterparty.
 if average price less than contract price per gallon pay difference to counterparty.
 fair values of fuel hedges determined using standard option valuation models with assumptions about commodity prices based underlying markets ( level 2 fair value hierarchy ).
 aggregate fair values of outstanding fuel hedges as of december 31, 2015 and 2014 were current liabilities of $ 37. 8 million and $ 34. 4 million  recorded in other accrued liabilities in consolidated balance sheets.
 ineffective portions of changes in fair values resulted in loss of $ 0. 4 million and $ 0. 5 million for years ended december 31 , 2015 and 2014 gain of less than $ 0. 1 million for year ended december 31 , 2013 recorded in other income net in consolidated statements of income.
 total ( loss ) gain recognized in other comprehensive ( loss ) income for fuel hedges ( effective portion ) was $ ( 2. 0 ) million , $ ( 24. 2 ) million and $ 2. 4 million , for years ended december 31 , 2015 , 2014 2013 .
recycling commodity hedges revenue from sale of recycled commodities primarily from sales old corrugated cardboard old newspaper.
 use derivative instruments swaps costless collars cash flow hedges to manage exposure to changes in prices commodities.
 no outstanding recycling commodity hedges as of december 31 , 2015 2014.
 no amounts recognized in other income  net in consolidated statements of income for ineffective portion of changes in fair values during years ended december 31 , 2015 , 2014 2013.
 total gain ( loss ) recognized in other comprehensive income for recycling commodity hedges ( effective portion ) was $ 0. 1 million and $ ( 0. 1 ) million for years ended december 31, 2014 2013  respectively.
 no amount recognized in other comprehensive income for 2015.
 fair value measurements measuring fair values of assets liabilities use valuation techniques maximize use of observable inputs ( level 1 ) minimize use unobservable inputs ( level 3 ).
 use market data assumptions market participants use in pricing asset or liability including assumptions about risk when appropriate.

year | gallons hedged | weighted average contractprice per gallon
---- | -------------- | -----------------------------------------
2016 | 27000000       | $ 3.57
2017 | 12000000       | 2.92


s c h e d u l e i v continued ) ace limited subsidiaries s u p p l e m e n t a l i n f o r m a t i o n c n r n n s u e premiums earned years ended december 31, 2008  2007  2006 ( in millions u. s.
 dollars ) direct amount ceded to companies assumed from other companies net amount percentage of amount assumed.

for the years ended december 31 2008 2007 and 2006 ( in millions of u.s . dollars ) | direct amount | ceded to other companies | assumed from other companies | net amount | percentage of amount assumed to net
----------------------------------------------------------------------------------- | ------------- | ------------------------ | ---------------------------- | ---------- | -----------------------------------
2008                                                                                | $ 16087       | $ 6144                   | $ 3260                       | $ 13203    | 25% ( 25 % )
2007                                                                                | $ 14673       | $ 5834                   | $ 3458                       | $ 12297    | 28% ( 28 % )
2006                                                                                | $ 13562       | $ 5198                   | $ 3461                       | $ 11825    | 29% ( 29 % )


kimco realty corporation subsidiaries notes to consolidated financial statements , continued uncertain tax positions : company subject to income tax in certain jurisdictions outside u. s.  principally canada and mexico.
 statute of limitations on assessment of tax varies from three to seven years depending on jurisdiction and tax issue.
 tax returns filed in each jurisdiction subject to examination by local tax authorities.
 company currently under audit by canadian revenue agency , mexican tax authority u. s.
 internal revenue service ( 201cirs 201d ).
 in october 2011  irs issued notice of proposed adjustment proposes to section 482 of code to disallow capital loss claimed by krs on disposition of common shares of valad property ltd. , australian publicly listed company.
 adjustment made pursuant to section 482 of code  irs believes it can assert 100 percent 201cpenalty 201d tax pursuant to section 857 ( b ) ( 7 ) of code disallow capital loss deduction.
 notice of proposed adjustment indicates irs 2019 intention to impose 100 percent 201cpenalty 201d tax on company in amount of $ 40. 9 million disallowing capital loss claimed by krs.
 company outside counsel considered irs 2019 assessment believe sufficient documentation establishing valid business purpose for transfer including recent case history showing support for similar positions.
 accordingly company disagrees with irs 2019 position on application of section 482 of code to disposition of shares imposition of 100 percent penalty tax simultaneous assertion of penalty tax disallowance of capital loss deduction.
 company received notice of proposed assessment filed written protest requested irs appeals office conference.
appeals hearing attended by management attorneys irs compliance group irs appeals officer in november , 2014  irs compliance presented arguments in support position .
 management attorneys presented rebuttal arguments in support position.
 matter currently under consideration by appeals officer.
 company intends to defend its position believes it will prevail.
 resolutions of audits not expected to have material effect on company 2019s financial statements.
 during 2013  company early adopted asu 2013-11 prospectively reclassified portion of reserve for uncertain tax positions.
 reserve for uncertain tax positions included amounts related to company 2019s canadian operations.
 company has unrecognized tax benefits reported as deferred tax assets available to settle adjustments with to company 2019s uncertain tax positions in canada.
 company reduced reserve for uncertain tax positions by $ 12. 3 million associated with canadian operations reduced deferred tax assets in accordance with asu 2013-11.
 company does not believe total amount of unrecognized tax benefits as of december 31, 2014, will significantly increase or decrease within next 12 months.
 as of december 31 , 2014  company 2019s canadian uncertain tax positions  reduce deferred tax assets  aggregated $ 10. 4 million.
 liability for uncertain tax benefits principally consists of estimated foreign , federal state income tax liabilities in years for which statute of limitations is open.
 years range from 2008 through 2014 vary by jurisdiction issue.
 aggregate changes in balance of unrecognized tax benefits for years ended december 31 , 2014 and 2013 were as follows ( in thousands ) :.
 this amount was reclassified against related deferred tax asset relating to company 2019s early adoption of asu 2013-11 discussed.

| 201 4  | 2013
--------------------------------------------------- | ------ | ----------------
balance beginning of year                           | $ 4590 | $ 16890
increases for tax positions related to current year | 59     | 15
reduction due to adoption of asu 2013-11 ( a )      | -      | -12315 ( 12315 )
balance end of year                                 | $ 4649 | $ 4590


american tower corporation subsidiaries notes consolidated financial statements 2014 continued from december 1 through may 31 each year.
 during 2008 , 2007 2006 offering periods employees purchased 55764 , 48886 53210 shares at weighted average prices per share of $ 30. 08 , $ 33. 93 $ 24. 98 ,.
 fair value of espp offerings estimated on offering period commencement date using black-scholes pricing model expense recognized over expected life six month offering period employees accumulate payroll deductions to purchase company 2019s common stock.
 weighted average fair value for espp shares purchased during 2008, 2007 2006 were $ 7. 89 , $ 9. 09 $ 6. 79 ,.
 at december 31 , 2008 , 8. 8 million shares remain reserved for future issuance plan.
 key assumptions apply pricing model for years ended december 31 :.
 13.
 stockholders 2019 equity warrants 2014in january 2003  company issued warrants to purchase approximately 11. 4 million shares of common stock offering of 808000 units each of $ 1000 principal amount at maturity of 12. 25% ( 12. 25 % ) senior subordinated discount notes due 2008 warrant to purchase 14. 0953 shares of company 2019s common stock.
 warrants exercisable on january 29 , 2006 at exercise price of $ 0. 01 per share.
 warrants expired august 1 , 2008 none outstanding as of december 31 august 2005  company completed merger with spectrasite , inc.
 assumed outstanding warrants to purchase shares of spectrasite  inc.
 common stock.
 merger completion date each warrant exercisable for two shares of spectrasite , inc.
 common stock at exercise price of $ 32 per warrant.
completion merger each warrant to purchase shares of spectrasite , inc.
 common stock converted into warrant to purchase shares company 2019s common stock upon exercise each warrant holder has right to receive 3. 575 shares of company 2019s common stock in lieu of each share of spectrasite , inc.
 common stock receivable under each assumed warrant prior to merger.
 upon completion company 2019s merger with spectrasite . warrants exercisable for approximately 6. 8 million shares of common stock.
 warrants , warrants to purchase approximately 1. 8 million and 2. 0 million shares of common stock remained outstanding as of december 31 , 2008 and 2007 .
 warrants expire on february 10 , 2010.
 stock repurchase programs 2014during year ended december 31 , 2008  company repurchased aggregate approximately 18. 3 million shares of common stock for aggregate of $ 697. 1 million , including commissions and fees pursuant to publicly announced stock repurchase programs described.

| 2008                                          | 2007                                          | 2006
-------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------- | -----------------------------------------
range of risk free interest rates                              | 1.99% ( 1.99 % ) 20143.28% ( 20143.28 % )     | 4.98% ( 4.98 % ) 20145.05% ( 20145.05 % )     | 5.01% ( 5.01 % ) 20145.17% ( 20145.17 % )
weighted average risk-free interest rate                       | 2.58% ( 2.58 % )                              | 5.02% ( 5.02 % )                              | 5.08% ( 5.08 % )
expected life of the shares                                    | 6 months                                      | 6 months                                      | 6 months
range of expected volatility of underlying stock price         | 27.85% ( 27.85 % ) 201428.51% ( 201428.51 % ) | 27.53% ( 27.53 % ) 201428.74% ( 201428.74 % ) | 29.60% ( 29.60 % )
weighted average expected volatility of underlying stock price | 28.51% ( 28.51 % )                            | 28.22% ( 28.22 % )                            | 29.60% ( 29.60 % )
expected annual dividends                                      | n/a                                           | n/a                                           | n/a


consolidated 2005 results operations was estimated reduction of gross profit corresponding decrease to inventory  at cost  of $ 5. 2 million.
 store pre-opening costs costs related to new store openings construction periods expensed as incurred.
 property and equipment property 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 asset.
 impairment of long-lived assets when indicators impairment present company evaluates carrying value of long-lived assets other goodwill in relation to operating performance future cash flows 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 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 $ 9. 4 million in 2006 , $ 0. 6 million in 2005 and $ 0.2 million in 2004 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 strategic initiatives discussed in note 2.
 other assets assets consist primarily of long-term investments , qualifying prepaid expenses  debt issuance costs amortized over life of related obligations , utility security deposits  life insurance policies goodwill.

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


company granted 1020 performance shares.
 vesting contingent on meeting goals over performance period.
 beginning with restricted stock grants in september 2010 dividends accrued on restricted class common stock and restricted stock units paid once restricted stock vests.
 table summarizes restricted stock and performance shares activity for 2010 : number of shares weighted average grant date fair value.
 total fair value of restricted stock vested during years ended december 31 , 2010  2009 2008 was $ 10. 3 million , $ 6. 2 million $ 2. 5 million .
 eligible employees may acquire shares of cme group 2019s class a common stock using after-tax payroll deductions during consecutive offering periods of six months.
 shares purchased at end of each offering period at price of 90% ( 90 % ) of closing price of class a common stock on nasdaq.
 compensation expense recognized on dates of purchase for discount from closing price.
 in 2010 , 2009 2008  total of 4371 , 4402 5600 shares  of class a common stock issued to participating employees.
 shares subject to six-month holding period.
 annual expense of $ 0. 1 million for purchase discount recognized in 2010, 2009 2008 .
 non-executive directors receive annual award of class a common stock with value equal to $ 75000.
 non-executive directors may to receive some or cash portion of annual stipend up to $ 25000  in shares of stock based on closing price at date of distribution.
 7470 , 11674 5509 shares of class a common stock issued to non-executive directors during 2010 , 2009 2008 .
 shares not subject to vesting restrictions.
 expense of $ 2. 4 million , $ 2. 5 million and $ 2.4 million related stock-based payments recognized years ended december 31 , 2010 , 2009 2008 , respectively.

| number of shares | weighted average grant date fair value
------------------------------- | ---------------- | --------------------------------------
outstanding at december 31 2009 | 116677           | $ 280
granted                         | 134245           | 275
vested                          | -34630 ( 34630 ) | 257
cancelled                       | -19830 ( 19830 ) | 260
outstanding at december 31 2010 | 196462           | 283


apple inc.
 2016 form 10-k | 20 company stock performance graph shows comparison of cumulative total shareholder return calculated on dividend reinvested basis for company  s&p 500 index  s&p information technology index dow jones u. s.
 technology supersector index for five years ended september 24 , 2016.
 graph assumes $ 100 invested in each company 2019s common stock s&p 500 index s&p information technology index dow jones u. s.
 technology supersector index market close september 23 , 2011.
 historic stock price performance not indicative of future stock price performance.
 * $ 100 invested on 9/23/11 in stock or index including reinvestment of dividends.
 data points are last day of each fiscal year for company 2019s common stock september 30th for indexes.
 copyright a9 2016 s&p , division of mcgraw hill financial.
 all rights reserved.
 copyright a9 2016 dow jones & co.
 all rights.
 september september.

| september2011 | september2012 | september2013 | september2014 | september2015 | september2016
-------------------------------------------- | ------------- | ------------- | ------------- | ------------- | ------------- | -------------
apple inc .                                  | $ 100         | $ 166         | $ 123         | $ 183         | $ 212         | $ 213
s&p 500 index                                | $ 100         | $ 130         | $ 155         | $ 186         | $ 185         | $ 213
s&p information technology index             | $ 100         | $ 132         | $ 142         | $ 183         | $ 187         | $ 230
dow jones u.s . technology supersector index | $ 100         | $ 130         | $ 137         | $ 178         | $ 177         | $ 217


news corporation notes to consolidated financial statements consideration over fair value of net tangible and intangible assets acquired recorded as goodwill.
 allocation as follows ( in millions ) : assets acquired:.
 acquired intangible assets primarily relate to broadcast licenses  fair value approximately $ 185 million , tradenames fair value approximately $ 27 million  customer relationships fair value approximately $ 8 million.
 broadcast licenses and tradenames have indefinite lives customer relationships amortized over weighted-average useful life of approximately 6 years.
 wireless group 2019s results included within news and information services segment  considered separate reporting unit for company 2019s annual goodwill impairment review.
 rea group european business in december 2016 rea group company holds 61. 6% (. 6 % ) interest  sold european business for approximately $ 140 million ( approximately 20ac133 million ) in cash resulted in pre-tax gain of $ 107 million for fiscal year ended june 30 , 2017.
 sale allows rea group to focus on core businesses in australia and asia.
 in addition to acquisitions investments referenced in note 6 2014investments company used $ 62 million of cash for additional acquisitions during fiscal 2017  primarily of australian regional media (.
 arm 2019s results included within news and information services segment.
 note 5.
 restructuring programs company recorded restructuring charges of $ 92 million , $ 71 million and $ 142 million for fiscal years ended june 30 , 2019 , 2018 and 2017  $ 77 million , $ 58 million and $ 133 million related to news and information services segment .
 restructuring charges recorded in fiscal 2019 , 2018 and 2017 primarily for employee termination benefits.

intangible assets         | $ 220
------------------------- | ----------
goodwill                  | 115
net liabilities           | -50 ( 50 )
total net assets acquired | $ 285


entergy corporation subsidiaries management's financial discussion analysis 2022 deferral in august 2004 of $ 7. 5 million fossil plant maintenance voluntary severance program costs at entergy new orleans result stipulation approved by city council.
 2003 compared to 2002 net revenue  entergy's measure of gross margin consists of operating revenues net of 1 fuel  fuel-related  purchased power expenses 2 ) other regulatory credits.
 analysis of change in net revenue comparing 2003 to 2002.
 base rates increased net revenue due to base rate increases at entergy mississippi entergy new orleans effective in january 2003 june 2003.
 entergy gulf states implemented base rate decreases in louisiana jurisdiction effective june 2002 january 2003.
 january 2003 base rate decrease of $ 22. 1 million minimal impact on net income due to reduction in nuclear depreciation decommissioning expenses associated with change in accounting estimate reflect assumed extension of river bend's useful life.
 deferred fuel cost revisions variance due to revised unbilled sales pricing estimate december 2002 further revision estimate first quarter of 2003 to align fuel component pricing with expected recoverable fuel costs at entergy louisiana.
 asset retirement obligation variance due to implementation of sfas 143  "accounting for asset retirement obligations" adopted in january 2003.
 see "critical accounting estimates 2013 nuclear decommissioning costs" for details.
 increase offset by increased depreciation decommissioning expenses insignificant effect on net income.
 increase in net wholesale revenue primarily due to increase in sales volume to municipal cooperative customers.
 march 2002 settlement agreement variance reflects absence in 2003 of effect of recording ice storm settlement approved by apsc in 2002.
settlement resulted in deferred revenues at entergy arkansas per transition cost account mechanism recorded in net revenue in second quarter of 2002.
 decrease offset by decrease in other operation and maintenance expenses had minimal effect on net income.
 gross operating revenues and regulatory credits revenues include increase in fuel cost recovery revenues of $ 682 million and $ 53 million in electric and gas sales primarily due to higher fuel rates in 2003 from increases in market prices of purchased power natural gas.
 revenue increase offset by increased fuel and purchased power expenses.

| ( in millions )
------------------------------------- | ----------------
2002 net revenue                      | $ 4209.6
base rate increases                   | 66.2
base rate decreases                   | -23.3 ( 23.3 )
deferred fuel cost revisions          | 56.2
asset retirement obligation           | 42.9
net wholesale revenue                 | 23.2
march 2002 ark . settlement agreement | -154.0 ( 154.0 )
other                                 | -6.3 ( 6.3 )
2003 net revenue                      | $ 4214.5


humana inc.
 notes to consolidated financial statements 2014 grant-date fair value of award estimated using option-pricing models.
 tax effects of stock option exercises reported as financing activity than operating activity in statements of cash flows.
 adopted sfas 123r on january 1, 2006 under retrospective transition method using black-scholes pricing model.
 effect of expensing stock options under fair value approach black-scholes pricing model on diluted earnings per common share for years ended december 31, 2005  2004 2003 disclosed on page 69.
 classification of cash inflows from excess tax benefit with exercising stock options change from operating activity to financing activity in consolidated statements of cash flows no impact on total cash flows.
 estimate impact of change in classification will decrease operating cash flows increase financing cash flows ) by approximately $ 15. 5 million in 2005  $ 3. 7 million in 2004  $ 15. 2 million in 2003.
 stock option expense after adopting sfas 123r not expected materially different than pro forma disclosure on page 69 dependent on levels of stock options granted during 2006.
 3.
 acquisitions in january 2006 commercial segment agreement to acquire cha service company  cha health  health plan serving employer groups in kentucky  for cash consideration of approximately $ 60. 0 million plus excess statutory surplus.
 transaction subject to regulatory approval expected to close effective in second quarter of 2006.
 december 20 , 2005 commercial segment acquired corphealth , inc. behavioral health care management company for cash consideration of approximately $ 54. 2 million  including transaction costs.
 acquisition allows humana to integrate coverage of medical and behavior health benefits.
 net tangible assets acquired of $ 6. 0 million primarily of cash and cash equivalents.
purchase price exceeded estimated fair value of net tangible assets acquired by approximately $ 48. 2 million.
 preliminarily allocated excess purchase price to other intangible assets of $ 8. 6 million associated deferred tax liabilities of $ 3. 2 million  non-deductible goodwill of $ 42. 8 million.
 other intangible assets primarily of customer contracts have weighted average useful life of 14. 7 years.
 allocation subject to change pending completion valuation by third party valuation specialist firm fair value of assets acquired.
 on february 16, 2005  government segment acquired careplus health plans of florida careplus affiliated 10 medical centers and pharmacy company.
 careplus provides medicare advantage hmo plans benefits to medicare advantage members in miami-dade , broward palm beach counties.
 acquisition enhances medicare market position in south florida.
 paid approximately $ 444. 9 million in cash including transaction costs.
 financed transaction with $ 294. 0 million of borrowings under credit agreement and $ 150. 9 million of cash on hand.
 purchase price subject to balance sheet settlement process with nine month claims run-out period.
 settlement  reflected as adjustment to goodwill not expected to be material.
 fair value of acquired tangible assets ( assumed liabilities ) consisted of following:.

| ( in thousands )
-------------------------------------------- | ----------------
cash and cash equivalents                    | $ 92116
premiums receivable and other current assets | 6510
property and equipment and other assets      | 21315
medical and other expenses payable           | -37375 ( 37375 )
other current liabilities                    | -23359 ( 23359 )
other liabilities                            | -5915 ( 5915 )
net tangible assets acquired                 | $ 53292


page 71 of 94 notes to consolidated financial statements ball corporation subsidiaries 16.
 shareholders 2019 equity continued october 24 , 2007 ball announced discontinuance of company 2019s discount on reinvestment of dividends associated company 2019s dividend reinvestment voluntary stock purchase plan for non- employee shareholders.
 5 percent discount discontinued november 1 , 2007.
 accumulated other comprehensive earnings ( loss ) activity related ) : ( $ in millions ) foreign currency translation pension postretirement items  net of tax effective financial derivatives  net of tax accumulated comprehensive earnings ( loss ).
 company 2019s 2006 annual report consolidated statement of changes in shareholders 2019 equity for year ended december 31, 2006 included transition adjustment of $ 47. 9 million  net of tax related to adoption of sfas no.
 158 , 201cemployers 2019 accounting for defined benefit pension plans other postretirement plans amendment of fasb statements no.
 87 , 88 , 106 132 ( r  201d component of 2006 comprehensive earnings adjustment to accumulated other comprehensive loss.
 2006 amounts revised to correct previous reporting.
 notwithstanding 2005 distribution jobs act management 2019s intention to indefinitely reinvest foreign earnings.
 no taxes provided on foreign currency translation component for any period.
 change in pension other postretirement items presented net of related tax expense of $ 31. 3 million and $ 2. 9 million for 2007 and 2006  related tax benefit of $ 27. 3 million for 2005.
 change in effective financial derivatives presented net of related tax benefit of $ 3. 2 million for 2007  related tax expense of $ 5. 7 million for 2006 related tax benefit of $ 10. 7 million for 2005.
 stock-based compensation programs effective january 1 , 2006 ball adopted sfas no.
123 revised 2004 ) , 201cshare based payment , 201d revision of sfas no.
 123 supersedes apb opinion no.
 25.
 new standard establishes accounting standards for transactions entity exchanges equity instruments for goods or services including stock option restricted stock grants.
 major differences for ball are 1 ) expense now recorded in consolidated statements of earnings for fair value of new stock option grants nonvested portions of grants made prior to january 1, 2006 2 ) company 2019s deposit share program discussed below ) no longer variable plan marked to current market value each month through earnings.
 upon adoption of sfas no.
 123 revised 2004 )  ball chosen use modified prospective transition method black-scholes valuation model.

( $ in millions )                      | foreign currency translation | pension and other postretirement items net of tax | effective financial derivatives net of tax | accumulated other comprehensive earnings ( loss )
-------------------------------------- | ---------------------------- | ------------------------------------------------- | ------------------------------------------ | -------------------------------------------------
december 31 2004                       | $ 148.9                      | $ -126.3 ( 126.3 )                                | $ 10.6                                     | $ 33.2
2005 change                            | -74.3 ( 74.3 )               | -43.6 ( 43.6 )                                    | -16.0 ( 16.0 )                             | -133.9 ( 133.9 )
december 31 2005                       | 74.6                         | -169.9 ( 169.9 )                                  | -5.4 ( 5.4 )                               | -100.7 ( 100.7 )
2006 change                            | 57.2                         | 55.9                                              | 6.0                                        | 119.1
effect of sfas no . 158 adoption ( a ) | 2013                         | -47.9 ( 47.9 )                                    | 2013                                       | -47.9 ( 47.9 )
december 31 2006                       | 131.8                        | -161.9 ( 161.9 )                                  | 0.6                                        | -29.5 ( 29.5 )
2007 change                            | 90.0                         | 57.9                                              | -11.5 ( 11.5 )                             | 136.4
december 31 2007                       | $ 221.8                      | $ -104.0 ( 104.0 )                                | $ -10.9 ( 10.9 )                           | $ 106.9


dish network corporation notes to consolidated financial statements - continued ciel ii.
 canadian dbs satellite launched december 2008 commenced commercial operation february 2009.
 satellite accounted for as capital lease depreciated over term satellite service agreement.
 leased 100% ( % ) of capacity on ciel ii for initial 10 year term.
 as of december 31 , 2011 and 2010  had $ 500 million capitalized for estimated fair value of satellites acquired under capital leases included in 201cproperty and equipment  net 201d with related accumulated depreciation of $ 151 million and $ 109 million  respectively.
 consolidated statements of operations comprehensive income ( loss ) recognized $ 43 million, $ 43 million and $ 40 million in depreciation expense on satellites acquired under capital lease agreements during years ended december 31 , 2011 , 2010 2009  respectively.
 future minimum lease payments under capital lease obligation present value of net minimum lease payments as of december 31, 2011 as follows ( in thousands ) : for years ended december 31.
 summary of future maturities of outstanding long-term debt as of december 31 , 2011 included in commitments table in note 16.
 12.
 income taxes accounting for uncertainty in income taxes income income tax policy to record estimated future tax effects of temporary differences between tax bases of assets liabilities amounts reported on consolidated balance sheets probable operating loss , tax credit other carryforwards.
 deferred tax assets offset by valuation allowances when believe more likely not net deferred tax assets not be realized.
 periodically evaluate need for valuation allowance.
 determining necessary valuation allowances requires assessments about historical financial information timing of future events including probability of expected future taxable income available tax planning opportunities.
file consolidated tax returns in u. s.
 income taxes of domestic and foreign subsidiaries not included in u. s.
 tax group presented in consolidated financial statements based on separate return basis for each tax paying entity.
 as of december 31, 2011  no net operating loss carryforwards ( 201cnols 201d ) for federal income tax purposes $ 13 million of nol benefit for state income tax purposes.
 state nols expire in year 2020.
 $ 5 million of tax benefits related to credit carryforwards partially offset by valuation allowance $ 14 million benefit of capital loss carryforwards fully offset by valuation allowance.
 credit carryforwards expire in year 2012.

2012                                                                                | $ 84715
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------
2013                                                                                | 77893
2014                                                                                | 76296
2015                                                                                | 75970
2016                                                                                | 75970
thereafter                                                                                | 314269
total minimum lease payments                                                                                | 705113
less : amount representing lease of the orbital location and estimated executory costs ( primarily insurance and maintenance ) including profit thereon included in total minimum lease payments | -323382 ( 323382 )
net minimum lease payments                                                                                | 381731
less : amount representing interest                                                                                | -109823 ( 109823 )
present value of net minimum lease payments                                                                                | 271908
less : current portion                                                                                | -29202 ( 29202 )
long-term portion of capital lease obligations                                                                                | $ 242706


152 pnc financial services group , inc.
 2013 form 10-k in addition to proceedings or other matters described, pnc and persons to we may have indemnification obligations , in normal course of business , subject to other pending and threatened legal proceedings in claims for monetary damages and other relief asserted.
 we do not anticipate  ultimate aggregate liability , if, arising out of such other legal proceedings material adverse effect on our financial position.
 cannot now determine whether not any claims asserted against us or others indemnification obligations , proceedings or material adverse effect on our results of operations in future reporting period , will depend on amount of loss resulting from claim and amount of income otherwise reported for reporting period.
 note 20 commitments in normal course of business  we have various commitments outstanding , certain not included on our consolidated balance sheet.
 following table presents our outstanding commitments to extend credit with significant other commitments as of december 31 , 2017 and december 31 , 2016 , respectively.
 table 98 : commitments to extend credit and other commitments in millions december 31 december 31.
 commitments to extend credit , or net unfunded loan commitments , represent arrangements to lend funds or provide liquidity subject to specified contractual conditions.
 commitments have fixed expiration dates  may require payment of fee  contain termination clauses in customer 2019s credit quality deteriorates.
 net outstanding standby letters of credit we issue standby letters of credit and share in risk of standby letters of credit issued by other financial institutions  to support obligations of our customers to third parties , insurance requirements and facilitation of transactions involving capital markets product execution.
91% ( 91 % ) and 94% ( 94 % ) of our net outstanding standby letters of credit rated as pass as of december 31 , 2017 and december 31 , 2016  respectively remainder rated as below pass.
 internal credit rating of pass indicates expected risk of loss low rating below pass indicates higher degree risk.
 if customer fails to meet financial or performance obligation to third party under contract or need to support remarketing program , upon draw by beneficiary  subject to terms letter of credit we obligated to make payment to them.
 standby letters of credit outstanding on december 31, 2017 had terms ranging from less than one year to seven years.
 as of december 31 , 2017  assets of $ 1. 3 billion secured certain specifically identified standby letters of credit.
 portion of remaining standby letters of credit issued on behalf of specific customers secured by collateral or guarantees secure customers 2019 other obligations to us.
 carrying amount of liability for obligations related to standby letters of credit and participations standby credit was $. 2 billion at december 31 , 2017 included in other liabilities on our consolidated balance sheet.

in millions                                             | december 31 2017 | december 31 2016
------------------------------------------------------- | ---------------- | ----------------
commitments to extend credit                            |                  |
total commercial lending                                | $ 112125         | $ 108256
home equity lines of credit                             | 17852            | 17438
credit card                                             | 24911            | 22095
other                                                   | 4753             | 4192
total commitments to extend credit                      | 159641           | 151981
net outstanding standby letters ofcredit ( a )          | 8651             | 8324
reinsurance agreements ( b )                            | 1654             | 1835
standby bond purchase agreements ( c )                  | 843              | 790
other commitments ( d )                                 | 1732             | 967
total commitments to extendcredit and other commitments | $ 172521         | $ 163897


.
 morgan chase & co.
 2003 annual report 33 corporate credit allocation 2003 tss assigned corporate credit allocation of pre- tax earnings associated capital related to credit exposures managed within ib 2019s credit portfolio behalf clients shared with tss.
 prior periods revised to reflect allocation.
 2003 impact to tss change increased pre-tax operating results $ 36 million average allocated capital $ 712 million decreased sva by $ 65 million.
 pre-tax operating results $ 46 million lower than 2002 reflecting lower loan volumes higher related expenses offset by decrease in credit costs.
 business outlook tss revenue 2004 expected benefit from improved global equity markets two recent acquisitions november 2003 acquisition bank one corporate trust portfolio january 2004 acquisition citigroup 2019s electronic funds services business.
 tss expects higher costs integrates acquisitions continues strategic investments business expansion.
 client segment tss dimensions 2003 revenue diversification by business revenue geographic region investor services 36% ( 36 % ) other 1% ( 1 % ) institutional trust services 23% ( 23 % ) treasury services 40% ( 40 % ) large corporations 21% ( 21 % ) middle market 18% ( 18 % ) banks 11% ( 11 % ) nonbank financial institutions 44% ( 44 % ) public sector/governments 6% ( 6 % ) europe , middle east & africa 27% ( 27 % ) asia/pacific 9% ( 9 % ) americas 64% ( 64 % ) includes elimination of revenue related shared activities with chase middle market $ 347 million.
 year ended december 31  operating revenue.
 includes portion of $ 41 million gain on sale of nonstrategic business 2003 : $ 1 million in institutional trust services $ 40 million in other.
 includes elimination of revenues related to shared activities with chase middle market $ 50 million gain on sale of non-u.
securities clearing 2002.

year ended december 31 , ( in millions ) | year ended december 31 , 2003 | year ended december 31 , 2002 | change
---------------------------------------- | ----------------------------- | ----------------------------- | ----------
treasury services                        | $ 1927                        | $ 1818                        | 6% ( 6 % )
investor services                        | 1449                          | 1513                          | -4 ( 4 )
institutional trust services ( a )       | 928                           | 864                           | 7
other ( a ) ( b )                        | -312 ( 312 )                  | -303 ( 303 )                  | -3 ( 3 )
total treasury & securities services     | $ 3992                        | $ 3892                        | 3% ( 3 % )


notes to consolidated financial statements 2014 ( continued ) note 14 2014commitments contingencies leases we conduct major part of operations using leased facilities equipment.
 many leases have renewal purchase options provide we pay cost of property taxes  insurance maintenance.
 rent expense on all operating leases for fiscal 2010 , 2009 2008 was $ 32. 8 million , $ 30. 2 million , and $ 30. 4 million , respectively.
 future minimum lease payments for all noncancelable leases at may 31 , 2010 were as follows : operating leases.
 we party to claims and lawsuits incidental to our business.
 in opinion of management  reasonably possible outcome of such matters  will not have material adverse impact on our financial position , liquidity or results of operations.
 define operating taxes as tax contingencies unrelated to income taxes sales property taxes.
 during operations must interpret meaning of various operating tax matters in united states foreign jurisdictions in do business.
 taxing authorities in jurisdictions may arrive at different interpretations of applicable tax laws regulations operating tax matters could result in payment of additional taxes in jurisdictions.
 as of may 31 , 2010 and 2009 not have liability for operating tax items.
 amount of liability is based on management 2019s best estimate given history with similar matters interpretations of current laws regulations.
 bin/ica agreements in connection with acquisition of merchant credit card operations of banks  entered into sponsorship or depository and processing agreements with certain banks.
 agreements allow us to use banks 2019 identification numbers  bank identification number for visa transactions and interbank card association number for mastercard transactions  to clear credit card transactions through visa and mastercard.
agreements contain financial covenants we were in compliance with all covenants as of may 31 , 2010.
 on june 18 , 2010 , cibc notice will not renew sponsorship with us for visa in canada after initial ten year term.
 their canadian visa sponsorship will expire in march 2011.
 we are

| operating leases
----------------------------------- | ----------------
2011                                | $ 9856
2012                                | 3803
2013                                | 2538
2014                                | 1580
2015                                | 928
thereafter                          | 1428
total future minimum lease payments | $ 20133


decreased period from 2002 to 2004 principally due to increase in earned premium and cost containment measures by management.
 in business insurance and personal lines expense ratio expected to decrease further in 2005 largely result of expected increases in earned premium.
 in specialty commercial , expense ratio expected to increase slightly in 2005 due to changes in business mix notably company 2019s decision 2004 to exit multi-peril crop insurance program eliminate significant expense reimbursements from specialty commercial segment.
 policyholder dividend ratio : policyholder dividend ratio is ratio of policyholder dividends to earned premium.
 combined ratio : combined ratio is sum of loss and loss adjustment expense ratio expense ratio policyholder dividend ratio.
 ratio is relative measurement describes related cost of losses and expense for every $ 100 of earned premiums.
 combined ratio below 100. 0 demonstrates underwriting profit ; combined ratio above 100. 0 demonstrates underwriting losses.
 combined ratio decreased from 2003 to 2004 primarily because of improvement in expense ratio.
 combined ratio in 2005 could be higher or lower than 2004 combined ratio depending on level of catastrophe losses impacted by changes in pricing expected moderation in favorable loss cost trends.
 catastrophe ratio : catastrophe ratio component of loss and loss adjustment expense ratio ) represents ratio of catastrophe losses ( net of reinsurance ) to earned premiums.
 catastrophe is event causes $ 25 or more in industry insured property losses affects significant number of property and casualty policyholders and insurers.
 catastrophe losses vary dramatically from year to year.
 based on mix and geographic dispersion of premium written estimates from catastrophe loss models company 2019s expected catastrophe ratio over long-term is 3. 0 points.
considering reduction in operation 2019s catastrophe reserves related to september 11 of $ 298 in 2004  catastrophe ratio in 2004 was 5. 3 points.
 see 201crisk management strategy 201d below for discussion of company 2019s property catastrophe risk management program mitigate company 2019s net exposure to catastrophe losses.
 combined ratio before catastrophes and prior accident year development combined ratio represents combined ratio for current accident year  excluding impact of catastrophes.
 company believes this ratio is important measure of trend profitability removes impact of volatile unpredictable catastrophe losses and prior accident year reserve development.
 considering combined ratio related to current accident year business improved from 2002 to 2004 due to earned pricing increases favorable claim frequency.
 other operations underwriting results other operations segment responsible for managing operations of hartford discontinued writing new or renewal business managing claims related to asbestos and environmental exposures.
 neither earned premiums nor underwriting ratios are meaningful financial measures.
 management believes underwriting result is more meaningful measure.
 net underwriting loss for 2002 through 2004 primarily due to prior accident year loss development  including $ 2. 6 billion of net asbestos reserve strengthening in 2003.
 reserve estimates within other operations  including estimates for asbestos and environmental claims are uncertain.
 refer to other operations segment md&a for discussion of other operation's underwriting results.
 total property & casualty investment earnings.
 investment return , or yield  on property & casualty 2019s invested assets is important element of company 2019s earnings insurance products are priced with assumption premiums received can be invested for before loss and loss adjustment expenses are paid.
longer tail lines , such as workers 2019 compensation general liability , claims paid over several years premiums received for these lines business can generate significant investment income.
 him determines appropriate allocation of investments by asset class measures investment yield performance for each asset class against market indices or other benchmarks.
 due to emphasis on preservation of capital need to maintain sufficient liquidity to satisfy claim obligations , majority of property and casualty 2019s invested assets held in fixed maturities  including corporate bonds , municipal bonds  government debt  short-term debt  mortgage-

| 2004           | 2003           | 2002
----------------------------------------------- | -------------- | -------------- | --------------
investment yield after-tax                      | 4.1% ( 4.1 % ) | 4.2% ( 4.2 % ) | 4.5% ( 4.5 % )
net realized capital gains ( losses ) after-tax | $ 87           | $ 165          | $ -44 ( 44 )


part ii item 5 2013 market for registrant 2019s common equity , related stockholder matters issuer purchases of equity securities ( a ) ( 1 ) our common stock listed on new york stock exchange traded under symbol 201cpnc. 201d at close of business february 16 , 2017  60763 common shareholders of record.
 holders of pnc common stock entitled to receive dividends when declared by board of directors out of funds legally available for purpose.
 board of directors may not pay or set apart dividends on common stock until dividends for all past dividend periods on series outstanding preferred stock certain outstanding capital securities issued by parent company paid or declared set apart for payment.
 board of directors intends to continue policy of paying quarterly cash dividends.
 amount future dividends depend on economic market conditions  financial condition operating results  other factors  including contractual restrictions applicable government regulations policies ( relating to ability of bank non-bank subsidiaries to pay dividends to parent company regulatory capital limitations ).
 amount of our dividend subject to results supervisory assessment of capital adequacy capital planning processes by federal reserve primary bank regulators part comprehensive capital analysis and review ( ccar ) process described in supervision and regulation section in item 1 report.
 federal reserve power to prohibit us from paying dividends without approval.
 for further information concerning dividend restrictions other factors limit ability to pay dividends restrictions on loans , dividends advances from bank subsidiaries to parent company  see supervision and regulation section in item 1 , item 1a risk factors , capital and liquidity management portion of risk management section in item 7 , note 10 borrowed funds , note 15 equity note 18 regulatory matters in notes to consolidated financial statements in item 8 of this report  include by reference.
include reference additional information relating to pnc common stock under common stock prices/ dividends declared section in statistical information ( unaudited ) section of item 8 report.
 include reference information regarding compensation plans under pnc equity securities authorized for issuance as of december 31 , 2016 in table ( with introductory paragraph notes ) appears in item 12 report.
 stock transfer agent and registrar is : computershare trust company , n. a.
 250 royall street canton , ma 02021 800-982-7652 registered shareholders contact this phone number regarding dividends shareholder services.
 include reference information under common stock performance graph caption at end of item 5.
 ( a ) ( 2 ) none.
 ( b ) not applicable.
 c ) details of repurchases of pnc common stock during fourth quarter of 2016 included in table : in thousands  except per share data 2016 period total shares purchased ( a ) average paid per total shares purchased part of publicly announced programs b ) maximum number of shares be purchased under programs ).
 includes pnc common stock purchased in connection with employee benefit plans related to forfeitures of unvested restricted stock awards shares used cover employee payroll tax withholding requirements.
 note 11 employee benefit plans and note 12 stock based compensation plans in notes to consolidated financial statements in item 8 report include additional information regarding employee benefit and equity compensation plans use pnc common stock.
 on march 11, 2015 announced board of directors approved establishment stock repurchase program authorization amount of 100 million shares of pnc common stock  effective april 1 , 2015.
repurchases made in open market or privately negotiated transactions timing exact amount of common stock repurchases depend on factors including market general economic conditions regulatory capital considerations alternative uses of capital  potential impact on credit ratings contractual and regulatory limitations including results of supervisory assessment of capital adequacy and capital planning processes by federal reserve ccar process.
 in june 2016  announced share repurchase programs of up to $ 2. 0 billion for four quarter period beginning third quarter of 2016  including repurchases of up to $ 200 million related to employee benefit plans.
 in january 2017 announced $ 300 million increase in share repurchase programs for this period.
 in fourth quarter of 2016  repurchased 4. 9 million shares of common stock on open market average price of $ 101. 47 per share aggregate repurchase price of $. 5 billion.
 see liquidity and capital management portion of risk management section in item 7 of report for more information on share repurchase programs under share repurchase authorization for period july 1, 2016 through june 30 , 2017 included in 2016 capital plan accepted by federal reserve.
 28 pnc financial services group , inc.
 2013 form 10-k

2016 period        | total sharespurchased ( a ) | averagepricepaid pershare | total sharespurchased aspartofpubliclyannouncedprograms ( b ) | maximumnumber ofshares thatmay yet bepurchasedundertheprograms ( b )
------------------ | --------------------------- | ------------------------- | ------------------------------------------------------------- | --------------------------------------------------------------------
october 1 2013 31  | 2277                        | $ 91.15                   | 2245                                                          | 61962
november 1 2013 30 | 1243                        | $ 103.50                  | 1243                                                          | 60719
december 1 2013 31 | 1449                        | $ 115.65                  | 1449                                                          | 59270
total              | 4969                        | $ 101.39                  |                                                               |


to 2007.
 reduced personal injury expense by $ 80 million 2007 fewer expected claims lower average settlement costs.
 2008 reduced personal injury expense asbestos-related costs $ 82 million based on results updated personal injury actuarial studies reassessment of potential liability for resolution current future asbestos claims.
 environmental toxic tort expenses $ 7 million lower 2008 compared to 2007.
 other costs lower 2007 compared to 2006 driven by reduction in personal injury expense.
 actuarial studies 2007 resulted in reduction personal injury expense $ 80 million partially offset by adverse development one claim.
 settlement of insurance claims 2007 related to hurricane rita higher equity income drove expenses lower 2007 versus 2006.
 year-over-year comparison affected by settlement of insurance claims totaling $ 23 million 2006 related to january 2005 west coast storm $ 9 million gain 2006 from sale of two company-owned airplanes.
 non-operating items millions of dollars 2008 2007 2006 % ( % ) change 2008 v 2007 % change 2007 v 2006.
 other income 2013 other income decreased in 2008 compared 2007 due to lower gains from real estate sales decreased returns on cash investments lower interest rates.
 higher rental licensing income lower interest expense on sale of receivables program partially offset decreases.
 lower net gains from non-operating asset sales primarily real estate drove reduction in other income in 2007.
 recognition of rental income in 2006 from settlement of rent dispute contributed to year-over-year decrease in other income.
 cash investment returns increased $ 21 million due to larger cash balances higher interest rates.
 interest expense 2013 interest expense increased in 2008 versus 2007 due to higher weighted-average debt level of $ 8. 3 billion compared to $ 7. 3 billion in 2007.
 lower effective interest rate of 6. 1%.1 % ) in 2008 compared to 6. 6% (. 6 % ) in 2007 offset effects higher weighted-average debt level.
 increase in weighted-average debt levels to $ 7. 3 billion from $ 7. 1 billion in 2006 generated higher interest expense in 2007.
 lower effective interest rate of 6. 6% ( 6. 6 % ) in 2007 compared to 6. 7% ( 6. 7 % ) in 2006 offset effects higher debt level.
 income taxes 2013 income taxes higher in 2008 compared to 2007 driven by higher pre-tax income.
 effective tax rates were 36. 1% ( 36. 1 % ) and 38. 4% ( 38. 4 % ) in 2008 and 2007.
 lower effective tax rate in 2008 resulted from reductions in tax expense related to federal audits and state tax law changes.
 effective tax rate in 2007 increased by illinois legislation increased deferred tax expense third quarter 2007.
 income taxes $ 235 million higher in 2007 compared to 2006 due to higher pre-tax income new tax legislation illinois changed income subject illinois tax.
 illinois legislation increased deferred tax expense by $ 27 million in 2007.
 effective tax rates were 38. 4% ( 38. 4 % ) and 36. 4% (. 4 % ) in 2007 and 2006.

millions of dollars | 2008           | 2007           | 2006         | % (  % ) change 2008 v 2007 | % (  % ) change 2007 v 2006
------------------- | -------------- | -------------- | ------------ | --------------------------- | ---------------------------
other income        | $ 92           | $ 116          | $ 118        | ( 21 ) % (  % )             | ( 2 ) % (  % )
interest expense    | -511 ( 511 )   | -482 ( 482 )   | -477 ( 477 ) | 6                           | 1
income taxes        | -1318 ( 1318 ) | -1154 ( 1154 ) | -919 ( 919 ) | 14 % (  % )                 | 26 % (  % )


entergy corporation and subsidiaries notes to financial statements equitable discretion not require refunds for 20-month period from september 13 , 2001 - may 2 , 2003.
 ruling on refunds relied on findings in interruptible load proceeding  discussed in separate section below ferc concluded refund ruling be held in abeyance pending outcome of rehearing requests in proceeding.
 on second issue ferc reversed prior decision ordered prospective bandwidth remedy begin on june 1 , 2005 ( date of initial order proceeding ) rather than january 1, 2006 as previously ordered.
 pursuant to october 2011 order entergy required to calculate additional bandwidth payments for period june - december 2005 utilizing bandwidth formula tariff prescribed by ferc filed in december 2006 compliance filing accepted by ferc in april 2007 order.
 with bandwidth remedy payments these payments and receipts be paid by utility operating company customers to other utility operating company customers.
 in december 2011  entergy filed with ferc compliance filing provides payments and receipts among utility operating companies pursuant to ferc 2019s october 2011 order.
 filing shows following payments/receipts among utility operating companies : payments ( receipts ) ( in millions ).
 entergy arkansas made payment in january 2012.
 in february 2012 entergy arkansas filed for interim adjustment to production cost allocation rider requesting $ 156 million payment be collected from customers over 22-month period from march 2012 through december 2013.
 in march 2012 apsc issued order stating payment can be recovered from retail customers through production cost allocation rider subject to refund.
 lpsc and apsc requested rehearing of ferc 2019s october 2011 order.
december 2013 lpsc filed petition for writ of mandamus at united states court of appeals for d. c.
 circuit.
 in petition  lpsc requested d. c.
 circuit issue order compelling ferc to issue final order on pending rehearing requests.
 in response to lpsc petition  ferc committed to rule on pending rehearing request before end of february.
 in january 2014 d. c.
 circuit denied lpsc's petition.
 apsc , lpsc , puct , other parties intervened in december 2011 compliance filing proceeding, apsc and lpsc filed protests.
 calendar year 2013 production costs liabilities assets for preliminary estimate of payments and receipts required to implement ferc 2019s remedy based on calendar year 2013 production costs recorded in december 2013 based on certain year-to-date information.
 preliminary estimate recorded based on following estimate of payments/receipts among utility operating companies for 2014.

| payments ( receipts ) ( in millions )
----------------------------- | -------------------------------------
entergy arkansas              | $ 156
entergy gulf states louisiana | ( $ 75 )
entergy louisiana             | $ 2014
entergy mississippi           | ( $ 33 )
entergy new orleans           | ( $ 5 )
entergy texas                 | ( $ 43 )


corporate & institutional banking earned $ 1. 9 billion in 2011 and $ 1. 8 billion in 2010.
 increase in earnings primarily due to improvement in provision for credit losses  benefit in 2011  offset by reduction in value of commercial mortgage servicing rights lower net interest income.
 continued focus on adding new clients increasing cross sales committed to strong expense discipline.
 asset management group earned $ 141 million for 2011 compared with $ 137 million for 2010.
 assets under administration were $ 210 billion at december 31 , 2011 and $ 212 billion at december 31 , 2010.
 earnings for 2011 reflected benefit from provision for credit losses growth in noninterest income offset by higher noninterest expense lower net interest income.
 for 2011 business delivered strong sales production grew high value clients benefitted from significant referrals from other pnc lines of business.
 over time stabilized market conditions successful execution of strategies accumulation strong sales performance expected to create growth in assets under management and noninterest income.
 residential mortgage banking earned $ 87 million in 2011 compared with $ 269 million in 2010.
 decline in earnings driven by increase in noninterest expense associated with increased costs for residential mortgage foreclosure- related expenses result of ongoing governmental matters lower net interest income offset by increase in loan originations higher loans sales revenue.
 blackrock business segment earned $ 361 million in 2011 and $ 351 million in 2010.
 higher business segment earnings from for 2011 compared with 2010 primarily due to increase in revenue.
 non-strategic assets portfolio business segment consists primarily of acquired non-strategic assets outside of core business strategy.
 non-strategic assets portfolio had earnings of $ 200 million in 2011 compared with loss of $ 57 million in 2010.
increase attributable to lower provision for credit losses offset by lower net interest income.
 201cother 201d reported earnings $ 376 million for 2011 compared with $ 386 million for 2010.
 decrease in earnings reflected noncash charge related to redemption of trust preferred securities in fourth quarter 2011 gain related to sale of portion pnc 2019s blackrock shares in 2010 offset by lower integration costs in 2011.
 consolidated income statement review presented in item 8 report.
 net income for 2011 was $ 3. 1 billion compared with $ 3. 4 billion for 2010.
 results 2011 include impact of $ 324 million of residential mortgage foreclosure-related expenses governmental matters $ 198 million noncash charge related to redemption of trust preferred securities $ 42 million for integration costs.
 results for 2010 included $ 328 million after-tax gain on sale of gis  $ 387 million for integration costs $ 71 million of residential mortgage foreclosure-related expenses.
 2010 net income to common shareholders impacted by noncash reduction of $ 250 million redemption of tarp preferred stock.
 pnc 2019s results for 2011 driven by good performance in low interest rates slow economic growth new regulations.
 net interest income and net interest margin year ended december 31 dollars in millions 2011 2010.
 changes in net interest income and margin result from interaction of volume composition of interest-earning assets related yields, interest-bearing liabilities related rates paid  noninterest-bearing sources of funding.
 see statistical information ( ) 2013 analysis of year-to-year changes in net interest income and average consolidated balance sheet and net interest analysis in item 8 discussion of purchase accounting accretion in consolidated balance sheet review in item 7 report for additional information.
decreases in net interest income margin for 2011 compared with 2010 primarily attributable to decrease in purchase accounting accretion on purchased impaired loans due to lower excess cash recoveries.
 decline in average loan balances low interest rate environment offset by lower funding costs contributed to decrease.
 pnc financial services group , inc.
 2013 form 10-k 35

year ended december 31dollars in millions | 2011             | 2010
----------------------------------------- | ---------------- | ----------------
net interest income                       | $ 8700           | $ 9230
net interest margin                       | 3.92% ( 3.92 % ) | 4.14% ( 4.14 % )


jpmorgan chase & co.
 / 2007 annual report 31 section provides comparative discussion of jpmorgan chase 2019s consolidated results operations for three-year period ended december 31 , 2007.
 factors to single business segment discussed in within business segment than consolidated sec- tion.
 for discussion of critical accounting estimates affect consolidated results operations see pages 96 201398 annual report.
 revenue.
 2007 compared with 2006 total net revenue of $ 71. 4 billion up $ 9. 4 billion  or 15% ( 15 % )  from prior year.
 higher net interest income  strong private equity gains  record asset management  administration and commissions revenue  higher mortgage fees related income record investment banking fees contributed to revenue growth.
 increases offset by lower trading revenue.
 investment banking fees grew in 2007 higher than pre record in 2006.
 record advisory and equity underwriting fees drove results partially offset by lower debt underwriting fees.
 for further discussion of investment banking fees primarily recorded in ib  see ib segment results on pages 40 201342 of annual report.
 principal transactions revenue consists of trading revenue private equity gains.
 trading revenue declined significantly from 2006 level due to markdowns in ib of $ 1. 4 billion ( net of hedges ) on subprime positions including cdos $ 1. 3 billion ( net of fees ) on leveraged lending funded loans and unfunded commitments.
 markdowns in securitized products on nonsubprime mortgages weak credit trading performance offset record revenue in currencies strong revenue in rates and equities.
 equities benefited from strong client activity record trading results across all products.
 2019s credit portfolio results increased compared prior year primarily driven by higher revenue from risk management activities.
increase in private equity gains from 2006 reflected higher level gains  classification of certain private equity carried interest as compensation expense fair value adjustment in first quarter of 2007 on nonpublic private equity investments from adoption of sfas 157 ( 201cfair value measurements 201d ).
 for discussion of principal transactions revenue see ib and corporate segment results on pages 40 201342 and 59 201360  note 6 on page 122 annual report.
 lending & deposit-related fees rose from 2006 level driven by higher deposit-related fees bank of new york transaction.
 for discussion of lending & deposit-related fees recorded in rfs  tss cb  see rfs segment results on pages 43 201348 , tss segment results pages 54 201355  cb segment results on pages 52 201353 annual report.
 asset management , administration and commissions revenue reached level higher than previous record in 2006.
 increased assets under management higher performance and placement fees in am drove record results.
 18% ( 18 % ) growth in assets under management from year-end 2006 came from net asset inflows market appreciation across all segments : institutional  retail  private bank private client services.
 tss contributed to rise in asset management  administration commissions revenue driven by increased product usage by new and existing clients market appreciation on assets under custody.
 commissions revenue increased due to higher brokerage transaction volume ( included within fixed income and equity markets revenue of ib ) offset sale of insurance business by rfs in third quarter of 2006 charge in first quarter of 2007 from accelerated surrenders of customer annuities.
additional information on fees commissions  see segment discussions for ib on pages 40 201342 , rfs pages 43 201348 , tss pages 54 201355 , am pages 56 201358 , of annual report.
 favorable variance from securities gains in 2007 compared with securities losses 2006 driven by improvements in results repositioning treasury invest- ment securities portfolio.
 also contributing to positive variance was $ 234 million gain from sale of mastercard shares.
 fur- ther discussion of securities gains ( losses ) mostly recorded in firm 2019s treasury business , see corporate segment discussion on pages 59 201360 annual report.
 consol idated results of operat ions

year ended december 31 ( in millions )          | 2007    | 2006         | 2005
----------------------------------------------- | ------- | ------------ | --------------
investment banking fees                         | $ 6635  | $ 5520       | $ 4088
principal transactions                          | 9015    | 10778        | 8072
lending & deposit-related fees                  | 3938    | 3468         | 3389
asset management administration and commissions | 14356   | 11855        | 9988
securities gains ( losses )                     | 164     | -543 ( 543 ) | -1336 ( 1336 )
mortgage fees and related income                | 2118    | 591          | 1054
credit card income                              | 6911    | 6913         | 6754
other income                                    | 1829    | 2175         | 2684
noninterest revenue                             | 44966   | 40757        | 34693
net interest income                             | 26406   | 21242        | 19555
total net revenue                               | $ 71372 | $ 61999      | $ 54248


entergy arkansas , inc.
 subsidiaries management 2019s financial discussion analysis plan to spin off utility 2019s transmission business see 201cplan to spin off utility 2019s transmission business 201d section of entergy corporation subsidiaries management 2019s financial discussion analysis discussion matter including planned retirement of debt preferred securities.
 results of operations net income 2011 compared to 2010 net income decreased $ 7. 7 million due to higher effective income tax rate lower other income higher operation maintenance expenses  offset by higher net revenue  lower depreciation amortization expenses lower interest expense.
 2010 compared to 2009 net income increased $ 105. 7 million due to higher net revenue lower effective income tax rate higher other income lower depreciation amortization expenses offset by higher other operation maintenance expenses.
 net revenue 2011 compared to 2010 net revenue consists of operating revenues net of 1 ) fuel  fuel-related expenses  gas purchased for resale  2 ) purchased power expenses  3 ) other regulatory charges ( credits ).
 analysis of change in net revenue comparing 2011 to 2010.
 amount ( in millions ).
 retail electric price variance due to base rate increase effective july 2010.
 see note 2 to financial statements for discussion of rate case settlement.
 ano decommissioning trust variance related to deferral of investment gains from ano 1 and 2 decommissioning trust in 2010 regulatory treatment.
 gains resulted in increase in 2010 in interest investment income increase in regulatory charges no effect on net income.

| amount ( in millions )
----------------------------- | ----------------------
2010 net revenue              | $ 1216.7
retail electric price         | 31.0
ano decommissioning trust     | 26.4
transmission revenue          | 13.1
volume/weather                | -15.9 ( 15.9 )
net wholesale revenue         | -11.9 ( 11.9 )
capacity acquisition recovery | -10.3 ( 10.3 )
other                         | 3.2
2011 net revenue              | $ 1252.3


remediated previously-identified material weakness in internal control over financial reporting , may identify other material weaknesses in future.
 in november 2017  restated consolidated financial statements for quarters ended april 1 , 2017 and july 1 , 2017 in to correctly classify cash receipts from payments on sold receivables ( cash receipts on underlying trade receivables securitized ) to cash provided by investing activities ( from cash provided by operating activities ) within condensed consolidated statements of cash flows.
 connection with restatements management identified material weakness in internal control over financial reporting related to misapplication of accounting standards update 2016-15.
 did not maintain effective controls over adoption of new accounting standards , including communication with appropriate individuals in to conclusions on application of new accounting standards.
 result of material weakness  management concluded we did not maintain effective internal control over financial reporting as of april 1 , 2017 and july 1 , 2017.
 remediated material weakness and management determined disclosure controls and procedures were effective as of december 30 , 2017 , can no assurance that controls will remain adequate.
 effectiveness of internal control over financial reporting subject to various inherent limitations , including judgments used in decision-making , nature and complexity of transactions  assumptions about likelihood of future events , soundness of systems  cost limitations , other limitations.
if material weaknesses or significant deficiencies in our internal control discovered or occur in future or we must restate our financial statements , it could adversely affect our business and results of operations or financial condition , restrict ability to access capital markets require us to expend significant resources to correct weaknesses deficiencies  subject us to fines , penalties  investigations or judgments  harm reputation or cause decline in investor confidence.
 item 1b.
 unresolved staff comments.
 item 2.
 properties.
 our corporate co-headquarters located in pittsburgh, pennsylvania and chicago , illinois.
 co-headquarters leased house executive offices ,.
 business units , administrative , finance , legal , human resource functions.
 we maintain additional owned and leased offices throughout regions in we operate.
 manufacture products in network of manufacturing and processing facilities throughout world.
 as of december 30 , 2017  operated 83 manufacturing and processing facilities.
 own 80 and lease three of facilities.
 manufacturing and processing facilities count by segment as of december 30 , 2017 was:.
 maintain all manufacturing and processing facilities in good condition believe suitable adequate for present needs.
 enter into co-manufacturing arrangements with third parties if determine advantageous to outsource production of products.
 item 3.
 legal proceedings.
 routinely involved in legal proceedings , claims , governmental inquiries , inspections or investigations ( 201clegal matters 201d ) arising in ordinary course of business.
 while cannot predict with certainty results of legal matters in currently involved or may in future be involved do not expect ultimate costs to resolve legal matters currently pending will have material adverse effect on our financial condition or results of operations.
 item 4.
 mine safety disclosures.
applicable.

| owned | leased
------------- | ----- | ------
united states | 41    | 1
canada        | 2     | 2014
europe        | 11    | 2014
rest of world | 26    | 2


notes to consolidated financial statements 1.
 basis presentation accompanying consolidated financial statements and notes prepared in accordance with.
 generally accepted accounting principles.
.
 consolidated financial statements include accounts of aon plc and its controlled subsidiaries ( "aon or "company.
 all intercompany accounts and transactions eliminated.
 consolidated financial statements include management all adjustments necessary to present fairly company's consolidated financial position, results of operations and cash flows for all periods presented.
 reclassification certain amounts in prior years' consolidated financial statements and related notes reclassified to conform to 2015 presentation.
 in prior long-term investments included in investments in consolidated statement of financial position.
 amounts now included in other non-current assets in consolidated statement of financial position shown in note 3 to financial statements.
 long-term investments were $ 135 million at december 31 , 2015 and $ 143 million at december 31 , 2014.
 in prior periods prepaid pensions included in other non-current assets in consolidated statement of financial position.
 amounts now separately disclosed in consolidated statement of financial position.
 prepaid pensions were $ 1033 million at december 31 , 2015 and $ 933 million at december 31 , 2014.
 upon vesting of certain share-based payment arrangements employees may elect to use portion of shares to satisfy tax withholding requirements aon makes payment to taxing authority on employee behalf remits remaining shares to employee.
 company historically presented amounts due to taxing authorities within cash flows from operating activities in consolidated statements of cash flows.
 amounts now included in of shares for employee benefit plans within cash flows from financing activities.
company believes presentation provides clarity into operating financing activities company as substance accounting for transactions is of share repurchase.
 aligns company 2019s presentation consistent with industry practice.
 amounts reported in issuance of shares for employee benefit plans were $ 227 million , $ 170 million , and $ 120 million , respectively for years ended december 31 , 2015 , 2014 and 2013.
 these amounts , reclassified from accounts payable and accrued liabilities other assets and liabilities , were $ 85 million and $ 85 million in 2014  and $ 62 million and $ 58 million in 2013 , respectively.
 changes to presentation in consolidated statements of cash flows for 2014 and 2013 related to certain line items within financing activities.
 following line items and amounts aggregated in new line item titled 201cnoncontrolling interests and other financing activities within financing activities.
 use of estimates preparation of accompanying consolidated financial statements in conformity with.
 requires management to make estimates and assumptions affect reported amounts of assets liabilities  disclosures of contingent assets and liabilities at date of financial statements reported amounts of reserves and expenses.
 estimates and assumptions based on management's best estimates and judgments.
 management evaluates estimates and assumptions on ongoing basis using historical experience other factors including current economic environment.
 management believes estimates to be reasonable given current facts.
 adjusts estimates and assumptions when facts circumstances dictate.
 illiquid credit markets , volatile equity markets  foreign currency exchange rate movements increase uncertainty in estimates and assumptions.
 future events effects cannot be determined with precision actual results could differ significantly from estimates.
changes in estimates from continuing changes in economic environment, if applicable be reflected in financial statements in future periods.

years ended december 31,                          | 2014       | 2013
------------------------------------------------- | ---------- | ----------
purchases of shares from noncontrolling interests | 3          | -8 ( 8 )
dividends paid to noncontrolling interests        | -24 ( 24 ) | -19 ( 19 )
proceeds from sale-leaseback                      | 25         | 2014


long-term product offerings include alpha-seeking active and index strategies.
 alpha-seeking active strategies seek earn attractive returns in excess of market benchmark or performance hurdle while maintaining appropriate risk profile leverage fundamental research quantitative models to drive portfolio construction.
 contrast index strategies track returns of corresponding index generally by investing in same underlying securities within index or subset securities selected approximate similar risk and return profile of index.
 index strategies include non-etf index products and ishares etfs.
 many clients use both alpha-seeking active and index strategies application strategies may differ.
 for clients may use index products to gain exposure to market or asset class or may use combination of index strategies to target active returns.
 institutional non-etf index assignments be large ( multi-billion dollars ) reflect low fee rates.
 net flows in institutional index products small impact on blackrock 2019s revenues earnings.
 equity year-end 2017 equity aum totaled $ 3. 372 trillion  reflecting net inflows of $ 130. 1 billion.
 net inflows included $ 174. 4 billion into ishares etfs  driven by net inflows into core funds broad developed and emerging market equities partially offset by non-etf index and active net outflows of $ 25. 7 billion and $ 18. 5 billion  respectively.
 blackrock 2019s effective fee rates fluctuate due to changes in aum mix.
 approximately half of blackrock 2019s equity aum tied to international markets  including emerging markets tend have higher fee rates than.
 equity strategies.
 fluctuations in international equity markets  not with.
 markets greater impact on blackrock 2019s equity revenues and effective fee rate.
fixed income aum ended 2017 at $ 1. 855 trillion reflecting net inflows $ 178. 8 billion.
 2017 active net inflows of $ 21. 5 billion diversified across fixed income offerings included strong inflows into municipal unconstrained total return bond funds.
 ishares etfs net inflows of $ 67. 5 billion led by flows core corporate treasury bond funds.
 non-etf index net inflows of $ 89. 8 billion driven by demand for liability-driven investment solutions.
 multi-asset blackrock 2019s multi-asset team manages balanced funds bespoke mandates for diversified client base investment expertise in global equities bonds currencies commodities risk management capabilities.
 investment solutions include long-only portfolios alternative investments tactical asset allocation overlays.
 component changes in multi-asset aum for 2017 presented below.
 ( in millions ) december 31 net inflows outflows ) market change impact december 31.
 futureadvisor amounts do not include aum held in ishares etfs.
 multi-asset net inflows reflected institutional demand for solutions-based advice $ 18. 9 billion net inflows from institutional clients.
 defined contribution plans of institutional clients significant driver of flows contributed $ 20. 8 billion to institutional multi-asset net inflows in 2017 primarily into target date target risk product offerings.
 retail net inflows of $ 1. 1 billion reflected demand for multi-asset income fund family raised $ 5. 8 billion in 2017.
 company 2019s multi-asset strategies include 2022 asset allocation balanced products represented 41% ( 41 % ) of multi-asset aum at year-end.
 strategies combine equity fixed income alternative components for investors seeking tailored solution specific benchmark within risk budget.
certain strategies minimize downside risk through diversification derivatives strategies tactical asset allocation decisions.
 flagship products include global allocation multi-asset income fund families.
 2022 target date target risk products grew 16% ( 16 % ) organically in 2017  net inflows of $ 23. 9 billion.
 institutional investors represented 93% ( 93 % ) of target date target risk aum  defined contribution plans for 87% ( 87 % ) of aum.
 flows driven by defined contribution investments in lifepath offerings.
 lifepath products utilize proprietary active asset allocation overlay model balance risk return over investment horizon based on investor 2019s expected retirement timing.
 underlying investments are primarily index products.
 2022 fiduciary management services are complex mandates pension plan sponsors endowments foundations retain blackrock assume responsibility for investment management.
 customized services require strong partnership with clients 2019 investment staff trustees to tailor investment strategies to meet client-specific risk budgets return objectives.

( in millions )               | december 312016 | net inflows ( outflows ) | marketchange | fximpact | december 312017
----------------------------- | --------------- | ------------------------ | ------------ | -------- | ---------------
asset allocation and balanced | $ 176675        | $ -2502 ( 2502 )         | $ 17387      | $ 4985   | $ 196545
target date/risk              | 149432          | 23925                    | 24532        | 1577     | 199466
fiduciary                     | 68395           | -1047 ( 1047 )           | 7522         | 8819     | 83689
futureadvisor ( 1 )           | 505             | -46 ( 46 )               | 119          | 2014     | 578
total                         | $ 395007        | $ 20330                  | $ 49560      | $ 15381  | $ 480278


financial statement impact we believe our accruals for sales returns , rebates discounts are reasonable appropriate based on current facts circumstances.
 global rebate and discount liabilities included in sales rebates discounts on consolidated balance sheet.
 global sales return liability included in other current liabilities and noncurrent liabilities on consolidated balance sheet.
 as of december 31 , 2018  5 percent change in global sales return , rebate  discount liability would have led to approximate $ 275 million effect on our income before income taxes.
 portion of global sales return , rebate  discount liability resulting from sales of our products in u.
 was approximately 90 percent as of december 31 , 2018 and december 31 , 2017.
 following represents roll-forward of our most significant.
 pharmaceutical sales return , rebate , discount liability balances  including managed care , medicare  medicaid:.
 adjustments of estimates for these returns  rebates  discounts to actual results were approximately 1 percent of consolidated net sales for each of years presented.
 product litigation liabilities and other contingencies background uncertainties product litigation liabilities contingencies are by nature uncertain based upon complex judgments probabilities.
 factors consider in developing product litigation liability reserves other contingent liability amounts include merits jurisdiction of litigation , nature number of other similar current and past matters , nature of product current assessment of science subject to litigation  likelihood of settlement current state of settlement discussions .
 in addition we accrue for certain product liability claims incurred  but not filed to extent can formulate reasonable estimate of costs based on historical claims experience data regarding product usage.
accrue legal defense costs expected to incurred in connection with significant product liability contingencies when probable and reasonably estimable.
 consider insurance coverage to diminish exposure for periods covered by insurance.
 in assessing insurance coverage , consider policy coverage limits and exclusions , potential for denial of coverage by insurance company , financial condition of insurers , possibility of length of time for collection.
 due to restrictive market for product liability insurance , we self-insured for product liability losses for all currently marketed products.
 in addition to insurance coverage consider any third-party indemnification to we entitled or under obligated.
 with to third-party indemnification rights considerations include nature of indemnification , financial condition of indemnifying party possibility of length of time for collection.
 litigation accruals and environmental liabilities and related estimated insurance recoverables reflected on gross basis as liabilities and assets , respectively, on our consolidated balance sheets.
 impairment of indefinite-lived and long-lived assets background and uncertainties review carrying value of long-lived assets ( intangible and tangible ) for potential impairment on periodic basis whenever events or changes in circumstances indicate carrying value of asset ( or asset group ) may not be recoverable.
 identify impairment by comparing projected undiscounted cash flows to generated by asset ( or asset group ) to its carrying value.
 if impairment identified loss recorded equal to excess of asset 2019s net book value over fair value, cost basis adjusted.
 goodwill and indefinite-lived intangible assets reviewed for impairment at least annually when certain impairment indicators present.
 when required comparison of fair value to carrying amount of assets performed to determine amount of any impairment.

( dollars in millions )                                                 | 2018                 | 2017
----------------------------------------------------------------------- | -------------------- | --------------------
sales return rebate and discount liabilities beginning of year          | $ 4172.0             | $ 3601.8
reduction of net sales due to sales returns discounts and rebates ( 1 ) | 12529.6              | 10603.4
cash payments of discounts and rebates                                  | -12023.4 ( 12023.4 ) | -10033.2 ( 10033.2 )
sales return rebate and discount liabilities end of year                | $ 4678.2             | $ 4172.0


capital asset purchases retail segment were $ 294 million in 2007  total capital asset purchases since inception to $ 1. 0 billion.
 as of september 29 , 2007 retail segment had approximately 7900 employees outstanding operating lease commitments with retail store space facilities of $ 1. 1 billion.
 company would incur substantial costs if to close multiple retail stores.
 costs could affect company 2019s financial condition operating results.
 other segments company 2019s other segments  asia pacific and filemaker operations experienced increase in net sales of $ 406 million  or 30% ( 30 % ) during 2007 compared to 2006.
 increase related to 58% ( 58 % ) increase in sales of mac portable products and strong ipod sales in asia pacific region.
 during 2006  net sales in other segments increased 35% ( 35 % ) compared to 2005 primarily due to increase in sales of ipod and mac portable products.
 strong sales growth result of introduction of updated ipods featuring video-playing capabilities new intel-based mac portable products 16% ( 16 % ) increase in mac unit sales during 2006 compared to 2005.
 gross margin margin for last three fiscal years are ( in millions percentages ) : september 29 , september 30 september 24  2007 2006 2005.
 gross margin percentage of 34. 0% ( 34. 0 % ) in 2007 increased significantly from 29. 0% ( 29. 0 % ) in 2006.
 primary drivers increase were more favorable costs on commodity components nand flash memory dram memory higher overall revenue for more leverage on fixed production costs higher percentage of revenue from company 2019s direct sales channels.
 company anticipates gross margin gross margins of personal computer  consumer electronics mobile communication industries will be subject to pressure due to price competition.
company expects gross margin percentage to decline sequentially first quarter of 2008 primarily result of full-quarter impact of product transitions reduced pricing effected in fourth quarter 2007 , lower sales of ilife and iwork second quarter availability  seasonally higher component costs  higher mix of indirect sales.
 these factors expected partially offset by higher sales of company 2019s mac os x operating system due to introduction of mac os x version 10. 5 leopard ( 2018 2018mac os x leopard 2019 2019 ) available october 2007.
 foregoing statements regarding company 2019s expected gross margin percentage are forward-looking.
 no assurance current gross margin percentage will be maintained or targeted gross margin percentage levels achieved.
 general gross margins margins on individual products remain under downward pressure due to variety factors  including continued industry wide global pricing pressures  increased competition  compressed product life cycles potential increases in cost availability of raw material and outside manufacturing services  potential shift in company 2019s sales mix towards products with lower gross margins.
 in response to competitive pressures company expects will continue to take pricing actions respect its products.
 gross margins could be affected by company 2019s ability to manage product quality warranty costs to stimulate

| september 29 2007 | september 30 2006 | september 24 2005
----------------------- | ----------------- | ----------------- | -----------------
net sales               | $ 24006           | $ 19315           | $ 13931
cost of sales           | 15852             | 13717             | 9889
gross margin            | $ 8154            | $ 5598            | $ 4042
gross margin percentage | 34.0% ( 34.0 % )  | 29.0% ( 29.0 % )  | 29.0% ( 29.0 % )