divestiture of information systems & global solutions business on august 16 , 2016  completed previously announced divestiture of is&gs business  merged with subsidiary of leidos  in reverse morris trust transaction ( 201ctransaction 201d ).
 transaction completed in multi- step process initially contributed is&gs business to abacus innovations corporation ( abacus ) , wholly owned subsidiary of lockheed martin created facilitate transaction common stock of abacus distributed to participating lockheed martin stockholders through exchange offer.
 under terms exchange offer lockheed martin stockholders had option to exchange shares of lockheed martin common stock for shares abacus common stock.
 conclusion exchange offer all shares of abacus common stock exchanged for 9369694 shares of lockheed martin common stock held by lockheed martin stockholders elected participate exchange.
 shares of lockheed martin common stock exchanged and accepted retired  reducing number of shares of common stock outstanding by approximately 3% ( 3 % ).
 following exchange offer abacus merged with subsidiary of leidos  abacus continuing as surviving corporation and wholly-owned subsidiary of leidos.
 part of merger  each share of abacus common stock automatically converted into one share of leidos common stock.
 did not receive any shares of leidos common stock as part of transaction and do not hold any shares of leidos or abacus common stock following transaction.
 based on opinion of outside tax counsel subject customary qualifications factual representations exchange offer and merger qualify as tax-free transactions to lockheed martin and stockholders  except extent cash paid to lockheed martin stockholders in lieu of fractional shares.
 connection with transaction  abacus borrowed aggregate principal amount of approximately $ 1.84 billion under term loan facilities with third party financial institutions proceeds used to one-time special cash payment of $ 1. 80 billion to lockheed martin pay associated borrowing fees and expenses.
 entire special cash payment used to repay debt  pay dividends repurchase stock during third and fourth quarters of 2016.
 obligations under abacus term loan facilities guaranteed by leidos part of transaction.
 result of transaction recognized net gain of approximately $ 1. 2 billion.
 net gain represents $ 2. 5 billion fair value of shares of lockheed martin common stock exchanged and retired exchange offer  plus $ 1. 8 billion one-time special cash payment , less net book value of is&gs business of about $ 3. 0 billion at august 16 , 2016 other adjustments of about $ 100 million.
 final gain subject to certain post-closing adjustments  including final working capital , indemnification  tax adjustments  expect to complete in 2017.
 classified operating results of is&gs business as discontinued operations in consolidated financial statements in accordance with u. s.
 gaap  divestiture business represented strategic shift major effect on operations and financial results.
 cash flows generated by is&gs business not reclassified in consolidated statements of cash flows retained this cash as part of transaction.
 carrying amounts of major classes of is&gs business assets and liabilities classified as assets and liabilities of discontinued operations as of december 31 , 2015 are as follows ( in millions ) :.

receivables net                                           | $ 807
--------------------------------------------------------- | ----------------
inventories net                                           | 143
other current assets                                      | 19
property plant and equipment net                          | 101
goodwill                                                  | 2881
intangible assets                                         | 125
other noncurrent assets                                   | 54
total assets of the disposal group                        | $ 4130
accounts payable                                          | $ -229 ( 229 )
customer advances and amounts in excess of costs incurred | -285 ( 285 )
salaries benefits and payroll taxes                       | -209 ( 209 )
other current liabilities                                 | -225 ( 225 )
deferred income taxes                                     | -145 ( 145 )
other noncurrent liabilities                              | -60 ( 60 )
total liabilities of the disposal group                   | $ -1153 ( 1153 )


56 / 57 management 2019s discussion analysis of financial condition results of operations junior subordinate deferrable interest debentures in june 2005  issued $ 100. 0 a0million of trust preferred securities  reflected on balance sheet as junior subordinate deferrable interest debentures.
 proceeds used to repay revolving credit facility.
 $ 100. 0 a0million of junior subordi- nate deferrable interest debentures have 30-year term ending july 2035.
 bear interest at fixed rate of 5. 61% ( 5. 61 % ) for first 10 years ending july 2015.
 thereafter rate float at three month libor plus 1. 25% ( 1. 25 % ).
 securities redeemable at par.
 restrictive covenants terms of 2011 revolving credit facility certain senior unsecured notes include restrictions covenants may limit ability to pay dividends ( discussed ) make certain types of investments incur additional indebtedness incur liens enter negative pledge agreements disposition of assets require compliance with financial ratios including minimum tangible net worth  maximum ratio of total indebtedness to total asset value minimum ratio of ebitda to fixed charges maximum ratio of unsecured indebtedness to unencumbered asset value.
 dividend restriction referred provides not during in default  make distributions with respect common stock or other equity interests except to enable continue qualify as reit for federal income tax purposes.
 as of december a031 , 2011 and 2010  in compli- ance with all such covenants.
 market rate risk exposed to changes in interest rates primarily from floating rate borrowing arrangements.
 use interest rate deriv- ative instruments to manage exposure to interest rate changes.
a0hypothetical 100 a0basis point increase in interest rates for 2011 and 2010  increase our annual interest cost by approximately $ 12. 3 a0million and $ 11. 0 a0mil- lion increase our share of joint venture annual interest cost by approximately $ 4. 8 a0million and $ 6. 7 a0million  respectively.
 recognize all derivatives on balance sheet at fair value.
 derivatives not hedges must be adjusted to fair value through income.
 if derivative is hedge  depending changes in fair value derivative offset against change in fair value hedged asset  liability firm commitment through earnings or recognized in other comprehensive income until hedged item recognized in earnings.
 ineffective portion of derivative 2019s change in fair value recognized immediately in earnings.
 approximately $ 4. 8 a0billion of long- term debt bore interest a0at fixed rates fair value of instru ments affected by changes in market interest rates.
 interest rate on our variable rate debt and joint venture debt as of december 2011 ranged from libor plus 150 points to libor plus 350 points.
 contractual obligations combined aggregate principal maturities of mortgages and other loans payable  2011 revolving credit facility , senior unsecured notes net discount )  trust preferred securities share of joint venture debt  including as- of-right extension options  estimated interest expense ( based on weighted average interest rates for quarter )  obligations under capital lease and ground leases  as of december 2011 are as follows ( in thousands ) :.

| 2012     | 2013      | 2014      | 2015     | 2016      | thereafter | total
-------------------------- | -------- | --------- | --------- | -------- | --------- | ---------- | ----------
property mortgages         | $ 52443  | $ 568649  | $ 647776  | $ 270382 | $ 556400  | $ 2278190  | $ 4373840
revolving credit facility  | 2014     | 2014      | 2014      | 2014     | 350000    | 2014       | 350000
trust preferred securities | 2014     | 2014      | 2014      | 2014     | 2014      | 100000     | 100000
senior unsecured notes     | 119423   | 2014      | 98578     | 657      | 274804    | 777194     | 1270656
capital lease              | 1555     | 1555      | 1555      | 1592     | 1707      | 42351      | 50315
ground leases              | 33429    | 33429     | 33429     | 33429    | 33533     | 615450     | 782699
estimated interest expense | 312672   | 309280    | 269286    | 244709   | 212328    | 470359     | 1818634
joint venture debt         | 176457   | 93683     | 123983    | 102476   | 527814    | 800102     | 1824515
total                      | $ 695979 | $ 1006596 | $ 1174607 | $ 653245 | $ 1956586 | $ 5083646  | $ 10570659


evaluation of management performance personnel committee approved annual incentive plan payouts to each named executive officer for 2017 : named executive officer base salary target as percentage of base salary payout as percentage of target 2017 annual incentive award.
 nuclear retention plan mr. a0bakken participates in nuclear retention plan  retention plan for officers leaders with expertise in nuclear industry.
 personnel committee authorized plan to attract retain key management employee talent in nuclear power field field requires unique technical expertise in great demand in utility industry.
 plan provides for bonuses paid annually over three-year employment period bonus opportunity dependent on participant 2019s management level and continued employment.
 each annual payment equal to amount from 15% ( 15 % ) to 30% ( 30 % ) of employee 2019s base salary as of date of enrollment in plan.
 mr. a0bakken 2019s participation in plan commenced in may 2016 terms conditions plan in may 2017, 2018 , 2019  subject to continued employment mr. a0bakken will receive cash bonus equal to 30% ( 30 % ) of his base salary as of may a01 , 2016.
 plan does not allow for accelerated or prorated payout upon termination.
 three-year coverage period and percentage of base salary payable under plan consistent with terms of participation of other senior nuclear officers participate in plan.
 in may 2017  mr.
 bakken received cash bonus of $ 181500 equaled 30% ( 30 % ) of his may a01 , 2016  base salary of $ 605000.
 long-term incentive compensation entergy corporation 2019s goal for long-term incentive compensation is to focus executive officers on building shareholder value increase executive officers 2019 ownership of entergy corporation 2019s common stock to align interest with entergy corporation shareholders.
long-term incentive compensation programs  entergy corporation uses mix of performance units , restricted stock  stock options.
 performance units deliver majority of total target long-term incentive awards.
 for periods through end of 2017  performance units reward named executive officers basis total shareholder return  measure of stock price appreciation and dividend payments  in relation to companies in philadelphia utility index.
 beginning with 2018-2020 performance period cumulative utility earnings metric added to long-term performance unit program to supplement relative total shareholder return measure historically used program each measure equally weighted.
 restricted stock ties executive officers 2019 long-term financial interest to long-term financial interests of entergy corporation 2019s shareholders.
 stock options provide direct incentive to increase value of entergy corporation 2019s common stock.
 entergy corporation seeks to allocate total value of long-term incentive compensation 60% ( 60 % ) to performance units 40% ( 40 % ) to combination of stock options and restricted stock  equally divided in value  based on value compensation model seeks deliver.
 awards for individual named executive officers may vary from target result of individual performance  promotions  internal pay equity.
 performance units for 2015-2017 performance period awarded under 2011 equity ownership plan and long-term cash incentive plan ( 201c2011 equity ownership plan 201d ) performance units for

named executive officer    | base salary | target as percentage of base salary | payout as percentage of target | 2017 annualincentive award
-------------------------- | ----------- | ----------------------------------- | ------------------------------ | --------------------------
a . christopher bakken iii | $ 620125    | 70% ( 70 % )                        | 129% ( 129 % )                 | $ 559973
marcus v . brown           | $ 630000    | 70% ( 70 % )                        | 129% ( 129 % )                 | $ 568890
leo p . denault            | $ 1230000   | 135% ( 135 % )                      | 129% ( 129 % )                 | $ 2142045
haley r . fisackerly       | $ 355300    | 40% ( 40 % )                        | 119% ( 119 % )                 | $ 169123
andrew s . marsh           | $ 600000    | 70% ( 70 % )                        | 129% ( 129 % )                 | $ 541800
phillip r . may jr .       | $ 366150    | 60% ( 60 % )                        | 137% ( 137 % )                 | $ 300000
sallie t . rainer          | $ 328275    | 40% ( 40 % )                        | 119% ( 119 % )                 | $ 156259
charles l . rice jr .      | $ 286424    | 40% ( 40 % )                        | 79% ( 79 % )                   | $ 91000
richard c . riley          | $ 344200    | 40% ( 40 % )                        | 204% ( 204 % )                 | $ 280661
roderick k . west          | $ 675598    | 70% ( 70 % )                        | 129% ( 129 % )                 | $ 610065


domestic utility companies system energy notes to financial statements derived from another portion entity apply sfas 71 should not be written off ; considered regulatory assets of segment apply sfas 71.
 see note 2 to domestic utility companies system energy financial statements for discussion of transition to competition activity in retail regulatory jurisdictions served by domestic.
 only texas has enacted retail open access law but entergy believes significant issues remain to be addressed by regulators enacted law not provide sufficient detail to determine impact on entergy gulf states' regulated operations.
 cash and cash equivalents entergy considers all unrestricted highly liquid debt instruments purchased with original maturity of three months or less to be cash equivalents.
 investments with original maturities more than three months classified as other temporary investments on balance sheet.
 entergy applies provisions of sfas 115 , 201caccounting for investments for certain debt and equity securities , 201d accounting for investments in decommissioning trust funds.
 entergy records decommissioning trust funds at fair value on balance sheet.
 as of december 31 , 2002 2001  fair value of securities held in such funds differs from amounts deposited plus earnings on deposits by following ( in millions ) :.
 in accordance with regulatory treatment for decommissioning trust funds entergy arkansas , entergy gulf states  entergy louisiana have recorded offsetting amount of unrealized gains/ ( losses ) on investment securities in accumulated depreciation.
 nonregulated entergy gulf states recorded offsetting amount of unrealized gains/ ( losses ) in other deferred credits.
 system energy's offsetting amount of unrealized gains/ ( losses ) on investment securities is in other regulatory liabilities.
derivatives hedging entergy implemented sfas 133 , 201caccounting for derivative instruments hedging activities 201d on january 1 , 2001.
 statement requires all derivatives recognized in balance sheet , as assets or liabilities  at fair value.
 changes in fair value of derivatives recorded each period in current earnings or other comprehensive income  depending on derivative designated part of hedge transaction type of hedge transaction.
 for cash-flow hedge transactions in which entergy hedging variability of cash flows related to variable-rate asset , liability , or forecasted transaction , changes in fair value of derivative instrument reported in other comprehensive income.
 gains and losses on derivative instrument reported in other comprehensive income reclassified as earnings in periods earnings impacted by variability of cash flows of hedged item.
 ineffective portions of all hedges recognized in current- period earnings.
 contracts for commodities delivered in quantities expected to be used or sold in ordinary course of business , including certain purchases and sales of power and fuel , not classified as derivatives.

| 2002       | 2001
------------------- | ---------- | ---------
entergy arkansas    | $ 35.3     | $ 69.8
entergy gulf states | $ 1.4      | $ 18.5
entergy louisiana   | ( $ 0.3 )  | $ 8.2
system energy       | ( $ 14.5 ) | ( $ 1.6 )


five-year performance comparison 2013 graph indicator of cumulative total shareholder returns for corporation compared to peer group index , dj trans , s&p 500.
 graph assumes $ 100 invested in common stock of union pacific corporation and each index on december 31 , 2010 all dividends reinvested.
 information historical not indicative of future performance.
 purchases of equity securities 2013 during 2015  repurchased 36921641 shares of common stock at average price of $ 99. 16.
 table presents common stock repurchases during each month for fourth quarter of 2015 : period total number of shares purchased average price paid per share total number of shares purchased as part of publicly announced plan or program maximum number of shares remaining under plan or program.
 total number of shares purchased during quarter includes approximately 32086 shares delivered or attested to upc by employees to pay stock option exercise prices  satisfy excess tax withholding obligations for stock option exercises or vesting of retention units  pay withholding obligations for vesting of retention shares.
 effective january 1 , 2014  board of directors authorized repurchase of up to 120 million shares of common stock by december 31 , 2017.
 repurchases may be made on open market or through other transactions.
 management has sole discretion determining timing and amount of transactions.

period                   | total number of shares purchased [a] | average price paid per share | total number of shares purchased as part of a publicly announcedplan or program [b] | maximum number of shares remaining under the plan or program [b]
------------------------ | ------------------------------------ | ---------------------------- | ----------------------------------------------------------------------------------- | ----------------------------------------------------------------
oct . 1 through oct . 31 | 3247731                              | $ 92.98                      | 3221153                                                                             | 56078192
nov . 1 through nov . 30 | 2325865                              | 86.61                        | 2322992                                                                             | 53755200
dec . 1 through dec . 31 | 1105389                              | 77.63                        | 1102754                                                                             | 52652446
total                    | 6678985                              | $ 88.22                      | 6646899                                                                             | n/a


reflects contribution from higher net sales  offset by higher input costs for energy  wood freight.
 entering 2007  earnings in first quarter expected to improve compared with 2006 fourth quarter due to reduced manufacturing costs reflecting completion of mill opti- mization project in brazil fourth quarter.
 sales volumes expected be seasonally better in.
 uncoated paper and market pulp businesses seasonally weaker in russian paper business.
 average sales price realizations should improve as implement announced price increases in europe and brazil.
 average price realizations expected to remain flat.
 wood costs higher due to supply difficulties in winter months energy costs mixed.
 first-quarter 2007 acquisition of luiz antonio mill in brazil will provide incremental earnings.
 during 2007 pensacola , florida mill will converted to produce container- board  reducing future.
 production capacity for uncoated freesheet paper.
 industrial packaging demand for packaging products correlated with non-durable industrial goods pro- duction in united states demand for processed foods poultry  meat agricultural products.
 addition to prices volumes major factors affecting profitability of industrial pack- aging are raw material energy costs  manufacturing efficiency product mix.
 industrial packaging net sales for 2006 increased 6% ( 6 % ) compared with 2005 and 8% ( 8 % ) compared with 2004.
 operating profits in 2006 were 82% ( 82 % ) higher than in 2005 7% ( 7 % ) higher than in 2004.
benefits from improved price realizations ( $ 156 million ) sales volume increases ( $ 29 million ) favorable mix ( $ 21 million ) reduced market related downtime ( $ 25 million ) strong mill performance ( $ 43 million ) partially offset by higher raw material costs ( $ 12 million ) higher freight costs ( $ 48 million ) higher converting operations costs ( $ 21 mil- lion ) other costs ( $ 26 million ).
 gain of $ 13 million recognized in 2006 related to sale of property in spain.
 segment took 135000 tons of downtime in 2006 none market-related compared with 370000 tons downtime in 2005 included 230000 tons of lack-of-order downtime.
 industrial packaging in millions 2006 2005 2004.
.
 containerboard net sales for 2006 were $ 955 million  compared with $ 895 million in 2005 $ 950 million for 2004.
 average sales price realizations in first quarter of 2006 below first-quarter 2005 levels improved during second quarter higher than 2005 for remainder of year.
 sales volumes higher throughout 2006.
 operating profits in 2006 more double 2005 levels 68% ( 68 % ) higher than 2004.
 favorable impacts of higher average sales price realizations higher sales volumes reduced lack-of-order downtime strong mill performance partially offset by higher input costs for freight  chemicals energy.
.
 converting operations net sales totaled $ 2. 8 billion in 2006  $ 2. 6 billion in 2005 $ 2. 3 bil- lion in 2004.
 sales volumes throughout year in 2006 above 2005 levels reflecting solid market demand for boxes and packaging solutions.
 first two quarters of 2006 margins favorable as average sales prices outpaced containerboard cost increases average margins to decline in third quarter as containerboard increases outpaced increase box prices.
operating profits 2006 decreased 72% ( 72 % ) from 2005 86% ( 86 % ) from 2004 levels primarily due to higher distribution utility raw material costs inventory adjustment charges.
 european container net sales for 2006 were $ 1. 0 billion  compared with $ 883 million in 2005 $ 865 million in 2004.
 increase principally due to contributions moroccan box plants acquired fourth quarter 2005 sales volumes rest of business slightly higher.
 operating profits 2006 up 31% ( 31 % ) compared with 2005 6% ( 6 % ) compared with 2004.
 increase included $ 13 million gain on sale of property in spain increased contributions from moroccan acquisition offset by higher energy costs.
 international paper distribution lim- ited  asian box containerboard business had net sales for 2006 of $ 182 million.
 2005  net sales were $ 104 million subsequent to international paper 2019s acquisition of majority interest august 2005.
 business generated small operating profit in 2006 compared with small loss in 2005.

in millions      | 2006   | 2005   | 2004
---------------- | ------ | ------ | ------
sales            | $ 4925 | $ 4625 | $ 4545
operating profit | $ 399  | $ 219  | $ 373


management 2019s discussion analysis 74 jpmorgan chase & co. /2017 annual report treasury and cio overview treasury cio responsible for measuring monitoring reporting managing firm 2019s liquidity  funding structural interest rate foreign exchange risks executing firm 2019s capital plan.
 risks managed by treasury and cio arise from activities by firm 2019s four major reportable business segments serve client bases  generate on- and off-balance sheet assets liabilities.
 treasury and cio achieve firm 2019s asset-liability management objectives by investing in high- quality securities managed for longer-term of firm 2019s investment securities portfolio.
 treasury and cio use derivatives to meet firm 2019s asset- liability management objectives.
 for further information on derivatives see note 5.
 investment securities portfolio consists of agency nonagency mortgage- backed securities  u. s.
 non-u. s.
 government securities  obligations of u. s.
 states municipalities  other abs corporate debt securities.
 at december 31 , 2017 , investment securities portfolio was $ 248. 0 billion  average credit rating of securities portfolio was aa+ ( based upon external ratings where available not based primarily internal ratings correspond to ratings defined by s&p and moody 2019s ).
 see note 10 for further information on details firm 2019s investment securities portfolio.
 information on liquidity funding risk  see liquidity risk management on pages 92 201397.
 for information on interest rate , foreign exchange other risks see market risk management on pages 121-128.
 selected income statement and balance sheet data of for year ended december 31 , ( in millions ) 2017 2016 2015.
afs investment securities average ) 219345 226892 264758 htm average ) 47927 51358 50044 portfolio average ) 267272 278250 314802 afs investment securities period-end ) 200247 236670 238704 htm period-end ) 47733 50168 49073 investment securities portfolio period 2013end ) 247980 286838 287777

as of or for the year ended december 31 ( in millions ) | 2017         | 2016   | 2015
------------------------------------------------------- | ------------ | ------ | ------
securities gains/ ( losses )                            | $ -78 ( 78 ) | $ 132  | $ 190
afs investment securities ( average )                   | 219345       | 226892 | 264758
htm investment securities ( average )                   | 47927        | 51358  | 50044
investment securities portfolio ( average )             | 267272       | 278250 | 314802
afs investment securities ( period-end )                | 200247       | 236670 | 238704
htm investment securities ( period-end )                | 47733        | 50168  | 49073
investment securities portfolio ( period 2013end )      | 247980       | 286838 | 287777


interest rate derivatives.
 connection with issuance of floating rate debt in august and october 2008 company entered three interest rate swap contracts  cash flow hedges, for hedging against change in interest payments due to fluctuations in underlying benchmark rate.
 in december 2010  company approved plan to refinance term loan in january 2011 resulting in $ 8. 6 million loss on derivative instruments ineffectiveness on associated interest rate swap contract.
 to mitigate counterparty credit risk interest rate swap contracts required collateralization by both counterparties for swaps 2019 aggregate net fair value during respective terms.
 collateral maintained in form cash adjusted daily basis.
 in february 2010  company entered forward starting interest rate swap contract cash flow hedge for hedging against change in interest payments due to fluctuations in underlying benchmark rate between date swap and forecasted issuance of fixed rate debt in march 2010.
 swap was highly effective.
 foreign currency derivatives.
 connection with purchase of bm&fbovespa stock in february 2008, cme group purchased put option to hedge against changes in fair value of bm&fbovespa stock from foreign currency rate fluctuations between u. s.
 dollar and brazilian real ( brl ) beyond option 2019s exercise price.
 lehman brothers special financing inc.
 ( lbsf ) sole counterparty to option contract.
 on september 15 , 2008  lehman brothers holdings inc.
 lehman ) filed for protection under chapter 11 of united states bankruptcy code.
 bankruptcy filing lehman was event of default gave company right to terminate put option agreement with lbsf.
 in march 2010  company recognized $ 6. 0 million gain on derivative instruments result of settlement from lehman bankruptcy proceedings.
.
capital stock shares outstanding.
 table presents information regarding capital stock:.
 cme group has no shares of preferred stock issued outstanding.
 associated trading rights.
 members of cme , cbot  nymex comex own or lease trading rights entitle them to access trading floors  discounts on trading fees right to vote on certain exchange matters as provided for by rules of exchange and cme group 2019s subsidiaries 2019 organizational documents.
 each class of cme group class b common stock associated with membership in specific division for trading at cme.
 cme trading right is separate asset not part of or evidenced by associated share of class b common stock cme group.
 class b common stock of cme group intended only to ensure class b shareholders cme group retain rights representation on board of directors approval rights core rights described below.
 trading rights at cbot evidenced by class b memberships in cbot nymex by class a memberships in nymex comex by comex division memberships in comex.
 members of cbot , nymex comex exchanges not have rights to elect members board of directors not entitled to receive dividends or other distributions on memberships.
 company required to have at least 10 cbot directors ( defined by bylaws ) until 2012 annual meeting.

( in thousands )       | december 31 , 2010 | december 31 , 2009
---------------------- | ------------------ | ------------------
shares authorized      | 1000000            | 1000000
class a common stock   | 66847              | 66511
class b-1 common stock | 0.6                | 0.6
class b-2 common stock | 0.8                | 0.8
class b-3 common stock | 1.3                | 1.3
class b-4 common stock | 0.4                | 0.4


item 5.
 market for registrant 2019s common equity  related stockholder matters issuer purchases of equity securities graph compares annual total return of our common stock  standard & poor 2019s 500 composite stock index ( 201cs&p 500 index 201d ) peer group ( 201cloews peer group 201d ) for five years ended december 31 , 2009.
 graph assumes value of investment in common stock s&p 500 index loews peer group was $ 100 on december 31, 2004 all dividends reinvested.
 loews peer group consists of companies industry competitors of principal operating subsidiaries : ace limited ,.
 berkley corporation  cabot oil & gas corporation chubb corporation  energy transfer partners. ensco international incorporated  hartford financial services group , inc. kinder morgan energy partners . noble corporation  range resources corporation spectra energy corporation ( included from december 14, 2006 trading ) transocean , ltd.
 travelers companies , inc.
 dividend information paid quarterly cash dividends on loews common stock each year since 1967.
 regular dividends of $ 0. 0625 per share of loews common stock paid in each calendar quarter of 2009 and 2008.
 paid quarterly cash dividends on former carolina group stock until separation.
 regular dividends of $ 0. 455 per share of former carolina group stock paid in first and second quarters of 2008.

| 2004   | 2005   | 2006   | 2007   | 2008   | 2009
---------------------- | ------ | ------ | ------ | ------ | ------ | ------
loews common stock     | 100.00 | 135.92 | 179.47 | 219.01 | 123.70 | 160.62
s&p 500 index          | 100.00 | 104.91 | 121.48 | 128.16 | 80.74  | 102.11
loews peer group ( a ) | 100.00 | 133.59 | 152.24 | 174.46 | 106.30 | 136.35


2022 failure of our information systems to function or penetration by outside parties intent to corrupt them or failure to comply with privacy laws and regulations could result in business disruption  litigation regulatory action loss of revenue  assets personal confidential data.
 we use information systems to manage business processes collect interpret business data communicate internally externally with employees suppliers customers others.
 some these information systems are managed by third-party service providers.
 we have backup systems business continuity plans in place we protect our systems and data from unauthorized access.
 failure of systems to function or penetration systems by outside parties intent on extracting corrupting information disrupting business processes could place us at competitive disadvantage result in loss of revenue assets personal sensitive data litigation regulatory action cause damage to reputation brands result in significant remediation other costs.
 failure to protect personal data respect rights of data subjects could subject us to substantial fines under regulations eu general data protection regulation.
 2022 we may be required to replace third-party contract manufacturers or service providers with our own resources.
 in certain instances  we contract with third parties to manufacture products product parts provide other services.
 may be unable to renew these agreements on satisfactory terms for numerous reasons including government regulations.
 costs may increase significantly if we must replace third parties with our own resources.
 item 1b.
 unresolved staff comments.
 item 2.
 properties.
 at december 31, 2017 we operated and owned 46 manufacturing facilities maintained contract manufacturing relationships with 25 third-party manufacturers across 23 markets.
 we work with 38 third-party operators in indonesia who manufacture our hand-rolled cigarettes.
 pmi-owned manufacturing facilities eema asia america canada total.
 ( 1 ) includes facilities that produced heated tobacco units in 2017.
in 2017 , 23 facilities each manufactured over 10 billion cigarettes eight facilities each produced over 30 billion units.
 largest factories in karawang and sukorejo ( indonesia ) , izmir ( turkey ), krakow ( poland ) , st.
 petersburg krasnodar ( russia ), batangas marikina ( philippines ), berlin ( germany ), kharkiv ( ukraine ) kutna hora ( czech republic ).
 smallest factories mostly in latin america and asia , where due to tariff constraints established small manufacturing units in individual markets.
 we will continue to optimize manufacturing base , consideration evolution of trade blocks.
 plants and properties owned or leased operated by subsidiaries maintained in good condition believed to suitable adequate for present needs.
 integrating production of heated tobacco units into existing manufacturing facilities progressing with plans to build manufacturing capacity for other rrp platforms.

| eu ( 1 ) | eema | asia | latinamerica&canada | total
---------------- | -------- | ---- | ---- | ------------------- | -----
fully integrated | 7        | 8    | 9    | 7                   | 31
make-pack        | 3        | 2014 | 1    | 2                   | 6
other            | 3        | 1    | 3    | 2                   | 9
total            | 13       | 9    | 13   | 11                  | 46


notes to consolidated financial statements 236 jpmorgan chase & co. /2010 annual report table below sets forth accretable yield activity for firm 2019s pci consumer loans for years ended december 31 , 2010 , 2009 and.
 ( a ) other changes in expected cash flows may vary from period to period as firm continues refine cash flow model updates model assumptions.
 for years ended december 31 , 2010 and 2009 , other changes in expected cash flows principally driven by changes in prepayment assumptions , reclassification to nonaccretable difference.
 such changes expected to insignificant impact on accretable yield percentage.
 factors most significantly affect estimates of gross cash flows expected collected  accretable yield balance include : ( i ) changes in benchmark interest rate indices for variable rate products option arm and home equity loans ; ( ii ) changes in prepayment assump- tions.
 to date decrease in accretable yield percentage primarily related to decrease in interest rates on vari- able-rate loans lesser extent  extended loan liquida- tion periods.
 certain events  periods affect timing of expected cash flows but not amount of cash expected received (. accretable yield balance ).
 extended loan liquidation periods reduce accretable yield percentage because same accretable yield balance recognized against higher-than-expected loan balance over longer-than-expected period of time.

year ended december 31 , ( in millions except ratios ) | year ended december 31 , 2010 | year ended december 31 , 2009 | 2008
------------------------------------------------------ | ----------------------------- | ----------------------------- | ----------------
balance january 1                                      | $ 25544                       | $ 32619                       | $ 2014
washington mutual acquisition                          | 2014                          | 2014                          | 39454
accretion into interest income                         | -3232 ( 3232 )                | -4363 ( 4363 )                | -1292 ( 1292 )
changes in interest rates on variable rate loans       | -819 ( 819 )                  | -4849 ( 4849 )                | -5543 ( 5543 )
other changes in expected cash flows ( a )             | -2396 ( 2396 )                | 2137                          | 2014
balance december 31                                    | $ 19097                       | $ 25544                       | $ 32619
accretable yield percentage                            | 4.35% ( 4.35 % )              | 5.14% ( 5.14 % )              | 5.81% ( 5.81 % )


reclassifications format changes made to prior years 2019 conform to 2015 presentation.
.
 investments.
 fixed maturity equity security investments available for sale at market value reflect unrealized appreciation depreciation result of temporary changes in market value during period shareholders 2019 equity  net of income taxes in 201caccumulated other comprehensive income ( loss ) 201d in consolidated balance sheets.
 fixed maturity equity securities carried at fair value reflect fair value re- measurements as net realized capital gains losses in consolidated statements of operations comprehensive income ( loss ).
 company records changes in fair value for fixed maturities available for sale at market value through shareholders 2019 equity  net of taxes in accumulated other comprehensive income ( loss ) cash flows from investments used to settle reserve for losses loss adjustment expense liabilities.
 company anticipates holding these investments for extended period cash flow from interest maturities fund projected payout of liabilities.
 fixed maturities carried at fair value represent portfolio of convertible bond securities characteristics similar to equity securities foreign denominated fixed maturity securities used to settle loss loss adjustment reserves in same currency.
 company carries all equity securities at fair value except for mutual fund investments underlying investments of fixed maturity securities.
 for equity securities  available for sale at fair value company reflects changes in value as net realized capital gains losses securities may be sold in near term depending on financial market conditions.
 interest income on all fixed maturities dividend income on all equity securities included as part of net investment income in consolidated statements of operations comprehensive income ( loss ).
unrealized losses on fixed maturities deemed other-than-temporary related to credit quality of security charged to net income ( loss ) as net realized capital losses.
 short-term investments stated at cost  approximates market value.
 realized gains or losses on sales of investments determined on of identified cost.
 for non- publicly traded securities market prices determined through pricing models evaluate securities relative to.
 treasury yield curve  account issue type credit quality cash flow characteristics of each security.
 for publicly traded securities market value based on quoted market prices or valuation models use observable market inputs.
 when sector financial markets inactive or illiquid company may use own assumptions about future cash flows and risk-adjusted discount rates to determine fair value.
 retrospective adjustments employed to recalculate values of asset-backed securities.
 each acquisition lot reviewed to recalculate effective yield.
 recalculated effective yield used to derive book value as if new yield applied at time of acquisition.
 outstanding principal factors from time of acquisition to adjustment date used to calculate prepayment history for all applicable securities.
 conditional prepayment rates computed with life to date factor histories and weighted average maturities used to effect calculation of projected prepayments for pass-through security types.
 other invested assets include limited partnerships and trusts.
 limited partnerships accounted for under equity method of accounting can be recorded on monthly or quarterly.
.
 uncollectible receivable balances.
 company provides reserves for uncollectible reinsurance recoverable and premium receivable balances based on management assessment of collectability of outstanding balances.
 such reserves presented in table below for periods indicated.

( dollars in thousands )                        | years ended december 31 , 2015 | years ended december 31 , 2014
----------------------------------------------- | ------------------------------ | ------------------------------
reinsurance receivables and premium receivables | $ 22878                        | $ 29497


marathon oil corporation notes to consolidated financial statements reported as discontinued operations in consolidated statements income statements cash flows for all periods presented.
 discontinued operations 2014revenues and pretax income associated with discontinued irish and gabonese operations shown in following table : ( in millions ) 2009 2008 2007.
 angola disposition 2013 july 2009  agreement to sell undivided 20 percent outside- operated interest in production sharing contract and joint operating agreement in block 32 offshore angola for $ 1. 3 billion  excluding purchase price adjustments at closing effective date of january 1, 2009.
 sale closed received net proceeds of $ 1. 3 billion in february 2010.
 pretax gain on sale approximately $ 800 million.
 retained 10 percent outside-operated interest in block 32.
 gabon disposition 2013 december 2009 closed sale of operated fields offshore gabon  receiving net proceeds of $ 269 million after closing adjustments.
 $ 232 million pretax gain on disposition reported in discontinued operations for 2009.
 permian basin disposition 2013 june 2009 closed sale of operated and portion of outside- operated permian basin producing assets in new mexico and west texas for net proceeds after closing adjustments of $ 293 million.
 $ 196 million pretax gain on sale recorded.
 ireland dispositions 2013 april 2009 closed sale of operated properties in ireland for net proceeds of $ 84 million after adjusting for cash held by sold subsidiary.
 $ 158 million pretax gain on sale recorded.
 result sale terminated pension plan in ireland incurring charge of $ 18 million.
 june 2009 agreement to sell subsidiary holding 19 percent outside-operated interest in corrib natural gas development offshore ireland.
proceeds estimated to range between $ 235 million and $ 400 million subject to timing first commercial gas at corrib and closing adjustments.
 at closing on july 30 , 2009  initial $ 100 million payment plus closing adjustments received.
 fair value of proceeds estimated $ 311 million.
 fair value anticipated sale proceeds includes $ 100 million received at closing  $ 135 million minimum amount due at earlier of first gas or december 31 , 2012  iii range zero to $ 165 million contingent proceeds subject to timing first commercial gas.
 $ 154 million impairment of for sale asset recognized in discontinued operations in second quarter of 2009 ( see note 16 ) fair value of disposal group less than net book value.
 final proceeds range between $ 135 million minimum amount to $ 300 million due on earlier of first commercial gas or december 31 , 2012.
 fair value of expected final proceeds recorded as asset at closing.
 new public information in fourth quarter of 2009  writeoff recorded on contingent portion of proceeds ( see note 10 ).
 existing guarantees of subsidiaries 2019 performance issued to irish government entities remain in place after sales until purchasers issue similar guarantees to replace.
 guarantees  related to asset retirement obligations natural gas production levels indemnified by purchasers.
 fair value of guarantees not significant.
 norwegian disposition 2013 on october 31 , 2008  closed sale of norwegian outside-operated e&p properties and undeveloped offshore acreage in heimdal area of norwegian north sea for net proceeds of $ 301 million  pretax gain of $ 254 million as of december 31 , 2008.
 pilot travel centers disposition 2013 on october 8 , 2008  completed sale of 50 percent ownership interest in ptc.
 sale proceeds were $ 625 million  pretax gain on sale of $ 126 million.
preceding sale , we received $ 75 million partial redemption of our ownership interest from ptc accounted for as return of investment.
 was investment of our rm&t segment.

( in millions )                                | 2009  | 2008  | 2007
---------------------------------------------- | ----- | ----- | -----
revenues applicable to discontinued operations | $ 188 | $ 439 | $ 456
pretax income from discontinued operations     | $ 80  | $ 221 | $ 281


supplemental financial information common stock performance graph compares performance of investment in firm 2019s common stock from december 26 , 2008 ( last trading day before firm 2019s 2009 fiscal year ) through december 31 , 2013 , with s&p 500 index and s&p 500 financials index.
 graph assumes $ 100 invested on december 26 , 2008 in each of firm 2019s common stock , s&p 500 index s&p 500 financials index , dividends reinvested on date of payment without payment commissions.
 performance in graph represents past performance not indication of future performance.
 goldman sachs group , inc.
 s&p 500 index s&p 500 financials index dec-09 dec-10 dec-11 dec-12 dec-13dec-08 table below shows cumulative total returns in dollars of firm 2019s common stock , s&p 500 index and s&p 500 financials index for goldman sachs 2019 last five fiscal year ends , assuming $ 100 invested on december 26, 2008 in each of firm 2019s common stock , s&p 500 index s&p 500 financials index , dividends reinvested on date of payment without payment commissions.
 performance in table represents past performance not indication of future performance.
 218 goldman sachs 2013 annual report

| 12/26/08 | 12/31/09 | 12/31/10 | 12/31/11 | 12/31/12 | 12/31/13
----------------------------- | -------- | -------- | -------- | -------- | -------- | --------
the goldman sachs group inc . | $ 100.00 | $ 224.98 | $ 226.19 | $ 123.05 | $ 176.42 | $ 248.36
s&p 500 index                 | 100.00   | 130.93   | 150.65   | 153.83   | 178.42   | 236.20
s&p 500 financials index      | 100.00   | 124.38   | 139.47   | 115.67   | 148.92   | 201.92


prior year incurred losses was $ 135. 6 million unfavorable in 2006 , $ 26. 4 million favorable in 2005 $ 249. 4 million unfavorable in 2004.
 losses result of reserve development noted above inher- ent uncertainty in establishing loss lae reserves.
 reserves for asbestos and environmental losses loss adjustment expenses as of year end 2006 7. 4% (. 4 % ) of reserves reflect estimate for company 2019s ultimate liability for a&e claims for ulti- mate value cannot be estimated using traditional reserving techniques.
 company 2019s a&e liabilities stem from mt.
 mckinley 2019s direct insurance business and everest re 2019s assumed reinsurance business.
 significant uncertainties in estimating company 2019s potential losses from a&e claims.
 see item 7 , 201cmanagement 2019s discussion analysis of financial condition results of operations 2014asbestos and environmental exposures 201d note 3 of notes to consolidated financial statements.
.
 mckinley 2019s book of direct a&e exposed insurance small homogenous.
 arises from limited period effective 1978 to 1984.
 book based principally on excess liability policies limiting exposure analysis to lim- ited number of policies and forms.
 result focused structure company believes able to comprehen- sively analyze exposures identify analyze actively monitor claims unusual exposure including policies exposed to pay expenses in addition to policy limits or non-products asbestos claims.
 company endeavors to be actively engaged with every insured account posing significant potential asbestos exposure to.
.
 engagement can take form of pursuing final settlement , negotiation  litigation or monitoring of claim activity under settlement in place ( 201csip 201d ) agreements.
sip agreements condition insurer 2019s payment upon actual claim experience of insured may have annual payment caps or other measures to control insurer 2019s payments.
 company 2019s mt.
 mckinley operation managing eight sip agreements , three were executed prior to acquisition of mt.
 mckinley in 2000.
 company 2019s preference with to coverage settlements is to exe- cute settlements call for fixed schedule of payments , such settlements eliminate future uncertainty.
 company has enhanced classification of insureds by exposure characteristics over time , analysis by insured for those it considers to more exposed or active.
 those insureds identified as relatively less exposed or active are subject to less rigorous , but still active management , with emphasis on monitoring characteristics , may indicate increasing exposure or levels of activity.
 company focuses on enhancement of detailed estimation processes to evaluate potential exposure of policyholders , including those not reported significant a&e losses.
 everest re 2019s book of assumed reinsurance is concentrated within modest number of a&e exposed relationships.
 arises from limited period , 1977 to 1984.
 book of business concentrated company managing a&e exposures for many years , its claim staff is familiar with ceding companies generated most of liabilities in past and most likely to generate future liabilities.
 company 2019s claim staff developed familiarity with nature of business written by its ceding companies and claims handling and reserving practices of those companies.
 this level of familiarity enhances quality of company 2019s analysis of exposure through those companies.
 result company believes it can identify those claims on has unusual exposure , such as non-products asbestos claims , for concentrated attention.
in setting reserves for reinsurance liabilities , company relies on claims data supplied and by ceding companies and brokers.
 this furnished information not always timely or accurate can impact accuracy company 2019s ultimate loss projections.
 following table summarizes composition of company 2019s total reserves for a&e losses , gross and net of reinsurance , for years ended december 31:.
 ( 1 ) additional reserves are case specific reserves determined by company to needed over and above those reported by ceding company.
 81790fin_a 4/13/07 11:08 am page 15

( dollars in millions )                                                           | 2006             | 2005             | 2004
--------------------------------------------------------------------------------- | ---------------- | ---------------- | ----------------
case reserves reported by ceding companies                                        | $ 135.6          | $ 125.2          | $ 148.5
additional case reserves established by the company ( assumed reinsurance ) ( 1 ) | 152.1            | 157.6            | 151.3
case reserves established by the company ( direct insurance )                     | 213.7            | 243.5            | 272.1
incurred but not reported reserves                                                | 148.7            | 123.3            | 156.4
gross reserves                                                                    | 650.1            | 649.6            | 728.3
reinsurance receivable                                                            | -138.7 ( 138.7 ) | -199.1 ( 199.1 ) | -221.6 ( 221.6 )
net reserves                                                                      | $ 511.4          | $ 450.5          | $ 506.7


entergy corporation and subsidiaries management's financial discussion analysis expenses related to voluntary severance program offered to employees.
 approximately 200 employees from non-utility nuclear business and 150 employees in utility business accepted voluntary severance program offers.
 net revenue utility following analysis of change in net revenue comparing 2008 to 2007.
 amount ( in millions ).
 purchased power capacity variance primarily due to higher capacity charges.
 portion of variance due to amortization of deferred capacity costs offset in base revenues due to base rate increases implemented to recover incremental deferred and ongoing purchased power capacity charges.
 volume/weather variance primarily due to effect of less favorable weather compared to same period in 2007 decreased electricity usage during unbilled sales period.
 hurricane gustav and hurricane ike , hit utility's service territories in september 2008 , contributed estimated $ 46 million to decrease in electricity usage.
 industrial sales depressed by continuing effects of hurricanes especially latter part of year overall decline of economy leading to lower usage latter part year affecting large customer industrial segment small and mid-sized industrial customers.
 decreases in electricity usage partially offset by increase in residential and commercial customer electricity usage during periods year not affected by hurricanes.
 retail electric price variance primarily due to : increase in attala power plant costs recovered through power management rider by entergy mississippi.
 net income effect of this recovery limited to portion representing allowed return on equity with remainder offset by attala power plant costs in other operation and maintenance expenses , depreciation expenses , taxes other than income taxes ; storm damage rider effective in october 2007 at entergy mississippi ; energy efficiency rider effective in november 2007 at entergy arkansas.
establishment of storm damage rider energy efficiency rider results in increase in rider revenue corresponding increase in other operation maintenance expense no impact on net income.
 retail electric price variance partially offset by absence of interim storm recoveries through formula rate plans at entergy louisiana entergy gulf states louisiana ceased upon act 55 financing of storm costs in third quarter 2008 ; credit passed on to customers result of act 55 storm cost financings.
 refer to "liquidity and capital resources - hurricane katrina hurricane rita" below note 2 to financial statements for discussion of interim recovery of storm costs act 55 storm cost financings.

| amount ( in millions )
------------------------ | ----------------------
2007 net revenue         | $ 4618
purchased power capacity | -25 ( 25 )
volume/weather           | -14 ( 14 )
retail electric price    | 9
other                    | 1
2008 net revenue         | $ 4589


notes to consolidated financial statements under regulatory framework for prompt corrective action applicable to gs bank usa  to meet quantitative requirements for 201cwell-capitalized 201d depository institution  gs bank usa required to maintain tier 1 capital ratio at least 6% ( 6 % )  total capital ratio least 10% ( 10 % ) tier 1 leverage ratio 5% ( 5 % ).
 gs bank usa agreed with federal reserve board to maintain minimum capital ratios in excess of these 201cwell- capitalized 201d levels.
 for period time gs bank usa expected to maintain tier 1 capital ratio at least 8% ( 8 % )  total capital ratio least 11% ( 11 % ) tier 1 leverage ratio least 6% ( 6 % ).
 in table below gs bank usa in compliance with minimum capital requirements as of december 2013 and december 2012.
 table presents information regarding gs bank usa 2019s regulatory capital ratios under basel i  implemented by federal reserve board.
 information as of december 2013 reflects revised market risk regulatory capital requirements  effective on january 1 , 2013.
 changes resulted in increased regulatory capital requirements for market risk.
 information as of december 2012 prior to implementation of revised market risk regulatory capital requirements.
 revised capital framework applicable to gs bank usa  advanced approach banking organization under framework.
 gs bank usa informed by federal reserve board completed satisfactory parallel run  required of advanced approach banking organizations under revised capital framework  changes to calculations of rwas will take effect beginning with second quarter of 2014.
 under revised capital framework  as of january 1 , 2014  gs bank usa became subject to new minimum cet1 ratio requirement of 4% ( 4 % )  increasing to 4. 5% ( 4. 5 % ) in 2015.
revised capital framework changes standards for 201cwell-capitalized 201d status under prompt corrective action regulations beginning january 1 , 2015 by introducing cet1 ratio requirement of 6. 5% ( 6. 5 % ) increasing tier 1 capital ratio requirement from 6% ( 6 % ) to 8% ( 8 % ).
 commencing january 1 , 2018 advanced approach banking organizations must have supplementary leverage ratio of 3% ( 3 % ) or greater.
 basel committee published final guidelines for calculating incremental capital requirements for domestic systemically important banking institutions ( d-sibs ).
 guidelines complementary to framework outlined for g-sibs.
 impact of guidelines on regulatory capital requirements of gs bank usa will depend on implemented by banking regulators in united states.
 deposits of gs bank usa are insured by fdic to by law.
 federal reserve board requires depository institutions to maintain cash reserves with federal reserve bank.
 amount deposited by firm 2019s depository institution held at federal reserve bank was approximately $ 50. 39 billion and $ 58. 67 billion as of december 2013 and december 2012 exceeded required reserve amounts by $ 50. 29 billion and $ 58. 59 billion as of december 2013 and 2012.
 transactions between gs bank usa and its subsidiaries and group inc.
 subsidiaries affiliates gs bank usa are regulated by federal reserve board.
 regulations limit types and amounts of transactions ( including credit extensions from gs bank usa ) require transactions to be on market terms or better to gs bank usa.
 firm 2019s principal non-u. s.
 bank subsidiary , gsib , is a wholly-owned credit institution regulated by prudential regulation authority ( pra ) and financial conduct authority ( fca ) subject to minimum capital requirements.
december 2013 december 2012 , gsib compliance with regulatory capital requirements.
 goldman sachs 2013 annual report 193

$ in millions         | as of december 2013 | as of december 2012
--------------------- | ------------------- | -------------------
tier 1 capital        | $ 20086             | $ 20704
tier 2 capital        | $ 116               | $ 39
total capital         | $ 20202             | $ 20743
risk-weighted assets  | $ 134935            | $ 109669
tier 1 capital ratio  | 14.9% ( 14.9 % )    | 18.9% ( 18.9 % )
total capital ratio   | 15.0% ( 15.0 % )    | 18.9% ( 18.9 % )
tier 1 leverage ratio | 16.9% ( 16.9 % )    | 17.6% ( 17.6 % )


distribution xpedx , our north american merchant distribution business distributes products services to customer markets including commercial printers with printing papers graphic pre-press  printing presses post-press equipment ; building services away-from-home markets with facility supplies manufacturers with packaging supplies equipment ; growing number of customers  exclusively provide distribution capabilities including warehousing delivery services.
 xpedx leading wholesale distribution marketer in these customer product segments in north america operating 122 warehouse locations 130 retail stores in united states, mexico cana- forest products international paper owns manages approx- 200000 acres of forestlands develop- ment properties in united states  mostly south.
 remaining forestlands managed as portfolio to optimize economic value to shareholders.
 most portfolio represents prop- erties likely to be sold to investors other buyers for various purposes.
 specialty businesses other chemicals : business sold in first quarter of 2007.
 ilim holding s.
 october 2007  international paper and ilim holding s.
 ilim completed 50:50 joint venture to operate pulp and paper business in russia.
 ilim 2019s facilities include three paper mills in bratsk , ust-ilimsk koryazhma , russia combined total pulp and paper capacity of over 2. 5 million tons.
 ilim has exclusive harvesting rights on timberland forest areas exceeding 12. 8 million acres ( 5. 2 million hectares ).
 products brand designations are trademarks of international paper or related company.
 industry segment results industrial packaging demand for industrial packaging products correlated with non-durable industrial goods pro- duction  demand for processed foods , poultry  meat agricultural products.
addition to prices volumes major factors affecting profitability industrial packaging are raw material energy costs freight costs manufacturing effi- ciency product mix.
 industrial packaging results for 2009 and 2008 include cbpr business acquired 2008 third quarter.
 net sales 2009 increased 16% ( 16 % ) to $ 8. 9 billion compared with $ 7. 7 billion in 2008 69% ( 69 % ) compared with $ 5. 2 billion in 2007.
 operating profits 95% ( 95 % ) higher in 2009 than 2008 double 2007 levels.
 benefits from higher year-over-year shipments  including impact of cbpr business ( $ 11 million ) favorable operating costs ( $ 294 million ) lower raw material freight costs ( $ 295 million ) offset by lower price realizations ( $ 243 million ) higher corporate overhead allocations ( $ 85 million ) incremental integration costs acquisition cbpr business ( $ 3 million ) higher other costs ( $ 7 million ).
 operating profits 2009 included gain of $ 849 million alternative fuel mix- ture credits.
 plant closure costs of $ 653 million costs shutdown of eti- enne mill of $ 87 million.
 industrial packaging in millions 2009 2008 2007.
 north american industrial packaging results include net sales operating profits of cbpr business from august 4 2008 acquis ition date.
 net sales were $ 7. 6 billion in 2009 com pared with $ 6. 2 billion in 2008 $ 3. 9 billion in 2007.
 operating profits 2009 were $ 791 million ( $ 682 million excluding alternative fuel mixture cred- its mill closure costs costs cbpr integration ) compared with $ 322 million ( $ 414 million excluding charges write-up of cbpr inventory to fair value cbpr integration costs facility closure costs in 2008 $ 305 million in 2007.
excluding effect cbpr acquisition, con- tainerboard box shipments lower in 2009 compared with 2008 reflecting weaker customer demand.
 average sales price realizations- nificantly lower for containerboard boxes due to weaker world-wide economic conditions.
 average sales margins for boxes

in millions      | 2009   | 2008   | 2007
---------------- | ------ | ------ | ------
sales            | $ 8890 | $ 7690 | $ 5245
operating profit | 761    | 390    | 374


general mills 2014 annual report 23 gross margin declined 1 percent fiscal 2014 versus fiscal 2013.
 gross margin percent of net sales 36 percent flat compared to fiscal 2013.
 selling , general administrative ( sg&a ) expenses decreased $ 78 million fiscal 2014 versus fiscal 2013.
 decrease sg&a expenses driven by 3 percent decrease advertising and media expense smaller contribution to general mills foundation decrease in incentive compensation expense lower pension expense compared to fiscal 2013.
 fiscal 2014 recorded $ 39 million charge related to venezuela currency devaluation compared to $ 9 million charge fiscal 2013.
 recorded $ 12 million inte- gration costs fiscal 2013 related to acquisition of yoki.
 sg&a expenses percent of net sales decreased 1 percent compared to fiscal 2013.
 restructuring , impairment  other exit costs totaled $ 4 million fiscal 2014.
 restructuring charge related to productivity and cost savings plan approved fourth quarter of fiscal 2012.
 restructuring actions completed fiscal 2014.
 fiscal 2014 paid $ 22 million in cash related to restructuring actions.
 fiscal 2014 recorded divestiture gain of $ 66 million related to sale of certain grain elevators.
 retail segment.
 no divestitures in fiscal 2013.
 net for fiscal 2014 totaled $ 302 million $ 15 million lower than fiscal 2013.
 average interest rate decreased 41 basis points including effect mix of debt generating $ 31 million decrease in net interest.
 average interest bearing instruments increased $ 367 million $ 16 million increase in net interest.
 consolidated effective tax rate for fiscal 2014 was 33. 3 percent compared to 29. 2 percent fiscal 2013.
.1 percentage point increase related to restructuring general mills cereals , llc ( gmc ) subsidiary first quarter 2013 resulted in $ 63 million decrease to deferred income tax liabilities related to tax basis investment in gmc distributed assets non-cash reduction to income taxes.
 fiscal 2013 recorded $ 34 million decrease in income tax expense increase in deferred tax assets related to actions to restore tax benefits medicare part d subsidies reduced in fiscal 2010 with patient protection and affordable care act amended by health care and education reconciliation act of 2010.
 fiscal 2013 tax expense includes $ 12 million charge with liquidation of corporate investment.
 after-tax earnings from joint ventures for fiscal 2014 decreased to $ 90 million compared to $ 99 million in fiscal 2013 driven by increased consumer spending at cereal partners worldwide ( cpw ) unfavorable foreign currency exchange from- dazs japan  inc.
 hdj.
 change in net sales for each joint venture set forth in table : joint venture change in net sales reported constant currency basis fiscal 2014 fiscal 2014 vs.
 2013 vs.
 2013 cpw ( 1 ) % ( % ) flat.
 fiscal 2014 cpw net sales declined by 1 percent- age point due to unfavorable foreign currency exchange.
 contribution from volume growth flat compared to fiscal 2013.
 fiscal 2014 net sales for hdj decreased 8 percentage points from fiscal 2013 11 percentage points of contributions from volume growth offset by 17 percentage points net sales decline from unfa- vorable foreign currency exchange 2 percentage points of net sales decline to unfavorable net price realization and mix.
 average diluted shares outstanding decreased by 20 million in fiscal 2014 from fiscal 2013 due to repurchase of 36 million shares offset by issuance of 7 million shares related to stock compensation plans.
fiscal 2014 consolidated balance sheet analysis cash equivalents increased $ 126 million from fiscal 2013.
 receivables increased $ 37 million from 2013 driven by timing of sales.
 inventories increased $ 14 million from 2013.
 prepaid expenses current assets decreased $ 29 million from 2013 due to decrease in other receivables related to liquidation of corporate investment.
 land  buildings equipment increased $ 64 million from fiscal 2013 $ 664 million capital expenditures

cpw            | as reported fiscal 2014 vs . 2013 ( 1 ) % (  % ) | constant currency basis fiscal 2014 vs . 2013 flat |
-------------- | ------------------------------------------------ | -------------------------------------------------- | --------
hdj            | -8 ( 8 )                                         | 9                                                  | % (  % )
joint ventures | ( 2 ) % (  % )                                   | 2                                                  | % (  % )


13.
 pension other postretirement benefit plans company has defined benefit pension plans covering eligible employees in united states and international subsidiaries.
 result of plan design changes approved in 2011  beginning january 1 , 2013  active participants in merck 2019s primary.
 defined benefit pension plans accruing pension benefits using new cash balance formulas based on age  service  pay interest.
 during transition period from january 1 , 2013 through december 31 , 2019 , participants earn greater of benefit as calculated under employee 2019s legacy final average pay formula or new cash balance formula.
 for all years of service after december 31 , 2019 participants earn future benefits under only cash balance formula.
 company provides medical benefits  principally to eligible.
 retirees their dependents  through other postretirement benefit plans.
 company uses december 31 as year-end measurement date for all pension plans other postretirement benefit plans.
 net periodic benefit cost benefit cost for pension other postretirement benefit plans following components:.
 increase in net periodic benefit cost for pension other postretirement benefit plans in 2013 compared with 2012 is attributable to change in discount rate.
 net periodic benefit cost attributable to.
 pension plans in was $ 348 million in 2013 , $ 268 million in 2012 $ 406 million in in connection with restructuring actions ( see note 3 ), termination charges recorded in 2013 , 2012 2011 on pension other postretirement benefit plans related to expanded eligibility for certain employees exiting merck.
 with restructuring activities curtailments were recorded in 2013 , 2012 2011 on pension other postretirement benefit plans.
 settlements were recorded in 2013 , 2012 2011 on certain domestic and international pension plans.
 table of contents

years ended december 31        | pension benefits 2013 | pension benefits 2012 | pension benefits 2011 | pension benefits 2013 | pension benefits 2012 | 2011
------------------------------ | --------------------- | --------------------- | --------------------- | --------------------- | --------------------- | ------------
service cost                   | $ 682                 | $ 555                 | $ 619                 | $ 102                 | $ 82                  | $ 110
interest cost                  | 665                   | 661                   | 718                   | 107                   | 121                   | 141
expected return on plan assets | -1097 ( 1097 )        | -970 ( 970 )          | -972 ( 972 )          | -126 ( 126 )          | -136 ( 136 )          | -142 ( 142 )
net amortization               | 336                   | 185                   | 201                   | -50 ( 50 )            | -35 ( 35 )            | -17 ( 17 )
termination benefits           | 58                    | 27                    | 59                    | 50                    | 18                    | 29
curtailments                   | -23 ( 23 )            | -10 ( 10 )            | -86 ( 86 )            | -11 ( 11 )            | -7 ( 7 )              | 1
settlements                    | 23                    | 18                    | 4                     | 2014                  | 2014                  | 2014
net periodic benefit cost      | $ 644                 | $ 466                 | $ 543                 | $ 72                  | $ 43                  | $ 122


entergy mississippi , inc.
 management 2019s financial discussion analysis results of operations net income 2016 compared to 2015 net income increased $ 16. 5 million due to lower operation maintenance expenses higher net revenues lower effective income tax rate  partially offset by higher depreciation and amortization expenses.
 2015 compared to 2014 net income increased $ 17. 9 million due to write-off in 2014 of regulatory assets associated with new nuclear generation development costs joint stipulation with mississippi public utilities staff approved by mpsc partially offset by higher depreciation amortization expenses higher taxes income taxes higher other operation maintenance expenses lower net revenue.
 see note 2 to financial statements for discussion of new nuclear generation development costs joint stipulation.
 net revenue 2016 compared to 2015 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 2016 to 2015.
 amount ( in millions ).
 retail electric price variance due to $ 19. 4 million net annual increase in revenues  approved by mpsc effective with first billing cycle of july 2016 increase in revenues collected through storm damage rider.
 see note 2 to financial statements for discussion on formula rate plan storm damage rider.
 volume/weather variance due to increase of 153 gwh , or 1% ( 1 % )  in billed electricity usage  including increase in industrial usage partially offset by effect of less favorable weather on residential and commercial sales.
 increase in industrial usage due to expansion projects in pulp and paper industry  increased demand for existing customers in metals industry new customers in wood products industry.

| amount ( in millions )
--------------------- | ----------------------
2015 net revenue      | $ 696.3
retail electric price | 12.9
volume/weather        | 4.7
net wholesale revenue | -2.4 ( 2.4 )
reserve equalization  | -2.8 ( 2.8 )
other                 | -3.3 ( 3.3 )
2016 net revenue      | $ 705.4


expenses incurred by logistics subsidiaries for external transportation increased crew transportation lodging due to volumes slower network.
 higher consulting fees higher contract expenses ( including equipment maintenance ) increased costs compared to 2013.
 locomotive freight car material expenses increased in 2014 compared to 2013 due to additional volumes impact of activating stored equipment operational issues demand slower network.
 expenses for purchased services increased 10% ( 10 % ) in 2013 compared to 2012 due to logistics management fees increase in locomotive overhauls repairs on jointly owned property.
 depreciation 2013 majority of depreciation relates to road property including rail  ties  ballast other track material.
 depreciation up 7% ( 7 % ) compared to 2013.
 higher depreciable asset base  higher ongoing capital spending drove increase.
 depreciation up 1% ( 1 % ) in 2013 compared to 2012.
 recent depreciation studies allowed longer estimated service lives for certain equipment partially offset impact of higher depreciable asset base larger capital spending.
 equipment and other rents 2013 equipment other rents expense includes rental expense railroad pays for freight cars owned by other railroads private companies ; freight car  intermodal locomotive leases office other rent expenses.
 higher intermodal volumes longer cycle times increased short-term freight car rental expense in 2014 compared to 2013.
 lower equipment leases offset higher freight car rental expense exercised purchase options on leased equipment.
 additional container costs from logistics management arrangement increased automotive shipments offset by lower cycle times drove $ 51 million increase in short-term freight car rental expense in 2013 versus 2012.
 lower locomotive freight car lease expenses partially offset higher freight car rental expense.
2013 expenses include state local taxes  freight equipment property damage  utilities insurance personal injury  environmental  employee travel  telephone cellular  computer software  bad debt general expenses.
 higher property taxes  personal injury expense utilities costs offset by lower environmental expense costs damaged freight drove increase in other costs in 2014 compared to 2013.
 higher property taxes costs damaged freight property increased other costs 2013 compared 2012.
 improvement in safety performance lower estimated liability for personal injury reduced personal injury expense year-over-year partially offset increases in other costs.
 non-operating items millions 2014 2013 2012 % ( % ) change 2014 v 2013 % % ) change 2013 v 2012.
 other income 2013 increased in 2014 versus 2013 due to higher gains from real estate sales sale of permanent easement.
 gains partially offset by higher environmental costs on non-operating property 2014 lower lease income due to $ 17 million settlement land lease contract in 2013.
 other income increased 2013 versus 2012 due to higher gains from real estate sales increased lease income favorable impact from $ 17 million settlement land lease contract.
 increases partially offset by interest received from tax refund in 2012.

millions         | 2014           | 2013           | 2012           | % (  % ) change 2014 v 2013 | % (  % ) change2013 v 2012
---------------- | -------------- | -------------- | -------------- | --------------------------- | --------------------------
other income     | $ 151          | $ 128          | $ 108          | 18% ( 18 % )                | 19% ( 19 % )
interest expense | -561 ( 561 )   | -526 ( 526 )   | -535 ( 535 )   | 7                           | -2 ( 2 )
income taxes     | -3163 ( 3163 ) | -2660 ( 2660 ) | -2375 ( 2375 ) | 19% ( 19 % )                | 12% ( 12 % )


clearing firm required to deposit maintain balances in cash ,.
 government securities certain foreign government securities  bank letters of credit other approved investments to satisfy performance bond guaranty fund requirements.
 all non-cash deposits are marked-to-market haircut daily basis.
 securities deposited by clearing firms not reflected in consolidated financial statements clearing house not earn interest on these deposits.
 balances may fluctuate over time due to investment choices changes in contributions required.
 rules regulations of cbot require collateral for delivery of physical commodities maintenance of capital requirements deposits on pending arbitration matters.
 to satisfy clearing firms accounts trade certain cbot products have deposited cash ,.
 treasury securities letters of credit.
 clearing house marks-to-market open positions at least once a day ( twice a day for futures and options contracts ) require payment from clearing firms whose positions lost value make payments to clearing firms positions gained value.
 clearing house capability to mark-to-market more frequently as market conditions warrant.
 under unlikely scenario of simultaneous default by every clearing firm open positions with unrealized losses maximum exposure related to positions other than credit default interest rate swap contracts be one half day of changes in fair value of all open positions  before considering clearing houses 2019 ability to access defaulting clearing firms 2019 collateral deposits.
 for cleared credit default swap and interest rate swap contracts  maximum exposure related to cme 2019s guarantee be one full day of changes in fair value of all open positions before considering cme 2019s ability to access defaulting clearing firms 2019 collateral.
 during 2017  clearing house transferred average of approximately $ 2.4 billion a day through clearing system for settlement from firms lost value to gained value.
 clearing house reduces guarantee exposure through initial maintenance performance bond requirements mandatory guaranty fund contributions.
 company believes guarantee liability is immaterial not recorded liability at december 31 , 2017.
 at december 31 , 2016  performance bond and guaranty fund contribution assets on consolidated balance sheets included cash u. s.
 treasury u. s.
 government agency securities with maturity dates 90 days or less.
 u. s.
 treasury and. s.
 government agency securities purchased by cme discretion using cash collateral.
 benefits  including interest earned  risks of ownership accrue to cme.
 interest earned included in investment income on consolidated statements of income.
 no u. s.
 treasury and u. s.
 government agency securities held at december 31 , 2017.
 amortized cost and fair value of securities at december 31, 2016 were as follows : ( in millions ) amortized.
 cme designated as systemically important financial market utility by financial stability oversight council maintains cash account at federal reserve bank of chicago.
 at december 31 , 2017 and december 31, 2016 cme maintained $ 34. 2 billion and $ 6. 2 billion  within cash account at federal reserve bank of chicago.
 clearing firms option may instruct cme to deposit cash held into ief programs.
 total principal in ief programs was $ 1. 1 billion at december 31 , 2017 and $ 6. 8 billion at december 31

( in millions )                    | 2016 amortizedcost | 2016 fairvalue
---------------------------------- | ------------------ | --------------
u.s . treasury securities          | $ 5548.9           | $ 5549.0
u.s . government agency securities | 1228.3             | 1228.3


2 in 2013  our principal u. k subsidiary agreed with trustees of one u. k.
 plans to contribute average of $ 11 million per year to pension plan for next three years.
 trustees plan have rights to request u. k.
 subsidiary advance amount equal to actuarially determined winding-up deficit.
 as of december 31 , 2015  estimated winding-up deficit was a3240 million ( $ 360 million at december 31 , 2015 exchange rates ).
 trustees plan accepted agreed-upon schedule of contributions not requested winding-up deficit be paid.
 3 purchase obligations are as agreements to purchase goods and services enforceable and legally binding specifies significant terms including what is to be purchased  price approximate timing of transaction.
 most purchase obligations related to purchases of information technology services or other service contracts.
 ( 4 ) excludes $ 12 million of unfunded commitments related to investment in limited partnership due to inability to estimate period s ) when limited partnership request funding.
 5 ) excludes $ 218 million of liabilities for uncertain tax positions due to inability to estimate period when potential cash settlements made.
 financial condition at december 31 , 2015  net assets were $ 6. 2 billion  total assets minus total liabilities decrease from $ 6. 6 billion at december 31 , 2014.
 decrease due primarily to share repurchases of $ 1. 6 billion  dividends of $ 323 million  increase in accumulated other comprehensive loss of $ 289 million related to increase in post- retirement benefit obligation partially offset by net income of $ 1. 4 billion for year ended december 31 , 2015.
 working capital increased by $ 77 million from $ 809 million at december 31 , 2014 to $ 886 million at december 31 , 2015.
accumulated comprehensive loss increased $ 289 million at december 31 , 2015 compared to december 31 , 2014  primarily driven by : 2022 negative net foreign currency translation adjustments of $ 436 million  attributable to strengthening of u. s.
 dollar against certain foreign currencies , 2022 decrease of $ 155 million in net post-retirement benefit obligations , 2022 net financial instrument losses of $ 8 million.
 review by segment general we serve clients through following segments : 2022 risk solutions acts as advisor and insurance and reinsurance broker , helping clients manage risks  via consultation  negotiation and placement of insurance risk with insurance carriers through global distribution network.
 2022 hr solutions partners with organizations to solve complex benefits , talent related financial challenges improve business performance by designing implementing communicating administering human capital , retirement , investment management  health care  compensation talent management strategies.
 risk solutions.
 demand for property and casualty insurance rises as economic activity increases and falls as activity decreases affecting commissions and fees by brokerage business.
 economic activity impacts property and casualty insurance described as exposure units  closely correlated

years ended december 31 ( millions except percentage data ) | 2015             | 2014             | 2013
----------------------------------------------------------- | ---------------- | ---------------- | ----------------
revenue                                                     | $ 7426           | $ 7834           | $ 7789
operating income                                            | 1506             | 1648             | 1540
operating margin                                            | 20.3% ( 20.3 % ) | 21.0% ( 21.0 % ) | 19.8% ( 19.8 % )


all goodwill intangible assets recorded related to acquisition of allied not deductible for tax purposes.
 pro forma information consolidated financial statements for republic include operating results of allied from date of acquisition.
 following pro forma information presented assuming merger completed as of january 1 , 2007.
 unaudited pro forma information below prepared for illustrative purposes not to indicative of results of operations had acquisition consummated at beginning of periods presented or of future results of combined operations ( in millions , except share per share amounts ).
 year ended december 31 , year ended december 31 , ( unaudited ) unaudited ).
 above unaudited pro forma financial information includes adjustments for amortization of identifiable intangible assets , accretion of discounts to fair value associated with debt , environmental , self-insurance other liabilities  accretion of capping , closure post-closure obligations amortization of related assets  provision for income taxes.
 assets held for sale as condition of merger with allied in december 2008  reached settlement with doj requiring us to divest of certain operations serving fifteen metropolitan areas including los angeles , ca san francisco , ca denver , co atlanta , ga northwestern indiana lexington , ky flint , mi cape girardeau , mo charlotte , nc cleveland , oh philadelphia , pa greenville-spartanburg , sc fort worth , houston lubbock , tx.
 settlement requires us to divest 87 commercial waste collection routes , nine landfills ten transfer stations , with ancillary assets in three cases access to landfill disposal capacity.
classified assets liabilities expect to divest ( including accounts receivable property equipment goodwill accrued landfill environmental costs ) as assets held for sale in consolidated balance sheet at december 31 , 2008.
 assets held for sale related to operations republic 2019s prior to merger with allied adjusted to lower carrying amounts or estimated fair values less costs to sell resulted recognizing asset impairment loss of $ 6. 1 million in consolidated statement of income for year ended december 31 , 2008.
 assets held for sale related to operations allied 2019s prior to merger recorded at estimated fair values in consolidated balance sheet as of december 31 , 2008 in accordance with purchase method of accounting.
 in february 2009 entered agreement to divest assets to waste connections , inc.
 assets covered agreement include six municipal solid waste landfills six collection operations three transfer stations across seven markets : los angeles ca denver  co houston  tx lubbock  tx greenville-spartanburg  sc charlotte  nc flint , mi.
 transaction with waste connections subject to closing conditions regarding due diligence regulatory approval other customary matters.
 closing expected to occur in second quarter of 2009.
 republic services , inc.
 subsidiaries notes to consolidated financial statements %%transmsg*** transmitting job : p14076 pcn : 106000000 ***%pcmsg|104 |00046|yes|no|02/28/2009 21:07|0|0|page valid  no graphics -- color : d|

| year ended december 31 2008 ( unaudited ) | year ended december 31 2007 ( unaudited )
------------------------------------------------------------------ | ----------------------------------------- | -----------------------------------------
revenue                                                            | $ 9362.2                                  | $ 9244.9
income from continuing operations available to common stockholders | 285.7                                     | 423.2
basic earnings per share                                           | .76                                       | 1.10
diluted earnings per share                                         | .75                                       | 1.09


table of contents item 7 2013 management 2019s discussion analysis of financial condition results of operations liquidity capital resources recorded net earnings $ 35. 4 million or $ 1. 18 per share in 2004 compared with $ 52. 2 million or $ 1. 76 per share in 2003 $ 51. 3 million or $ 1. 86 per share in 2002.
 net earnings 2004 negatively impacted by cost increases to steel and freight manufacturing inefficiencies first nine months year in ashland city plant higher selling , general administrative expense ( sg&a ).
 net earnings flat in 2003 compared with 2002 lower earnings per share amount in 2003 compared 2002 reflected full-year impact of stock offering in may 2002.
 individual segment performance discussed later section.
 working capital , excluding short-term debt was $ 339. 8 million at december 31 , 2004 compared with $ 305. 9 million and $ 225. 1 million at december 31 , 2003 december 31 , 2002.
 $ 33. 9 million increase in 2004 reflects $ 44. 9 million higher receivable balances due to longer payment terms both businesses higher sales levels in fourth quarter.
 offsetting increase receivable balances $ 13. 5 million lower inventory levels split equally between water systems and electrical products $ 14. 3 million higher accounts payable balances.
 $ 80. 8 million increase in 2003 reflects $ 46. 6 million higher inventory balances due to extensive manufacturing repositioning in electric motor business new product introductions manufacturing consolidation in water systems business.
 receivable balances $ 21. 2 million higher due to price increases with new product introductions in water systems business increase in international sales  longer payment terms.
 $ 13. 1 million increase in accounts payable balances offset by $ 9. 4 million in restructuring expenses paid in 2003.
reducing working capital major initiatives in 2005.
 cash provided by operating activities during 2004 was $ 67. 2 million compared with $ 29. 0 million during 2003 and $ 116. 0 million during 2002.
 despite lower earnings in 2004 smaller investment in working capital explains majority of improvement in cash flow compared with 2003.
 higher investment in working capital in 2003 explains majority of difference between 2003 and capital expenditures were $ 48. 5 million in 2004 same as in 2003 and approximately $ 2. 2 million higher than in 2002.
 increase in 2003 associated with new product launches in water systems business.
 projecting 2005 capital expenditures to approximately $ 55 million same as projected 2005 depreciation expense.
 believe present facilities and planned capital expenditures sufficient to provide adequate capacity for operations in 2005.
 in june 2004  completed $ 265 million , five-year revolving credit facility with eight banks.
 new facility expires on june 10 , 2009 replaced $ 250 million credit facility expired on august 2, 2004 terminated on june 10 , 2004.
 new facility backs up commercial paper and credit line borrowings.
 long-term nature facility commercial paper and credit line borrowings now classified as long-term debt.
 at december 31 , 2004 had available borrowing capacity of $ 153. 9 million under facility.
 believe combination of available borrowing capacity and operating cash flow will provide sufficient funds to finance existing operations for foreseeable future.
 advantage of low long-term borrowing rates issued $ 50. 0 million in senior notes with two insurance companies in june 2003.
 notes range in maturity between 2013 and 2016 carry weighted average interest rate of slightly less than 4. 5 percent.
 proceeds of notes used to repay commercial paper and borrowing under credit facility.
leverage  measured by ratio total debt to capitalization was 32 percent at end of 2004 and end of 2003.
 aggregate contractual obligations summary of contractual obligations as of december 31 , 2004  is as follows:.

( dollars in millions ) contractual obligation | ( dollars in millions ) total | ( dollars in millions ) less than 1 year | ( dollars in millions ) 1 - 3 years | ( dollars in millions ) 3 - 5 years | more than 5 years
---------------------------------------------- | ----------------------------- | ---------------------------------------- | ----------------------------------- | ----------------------------------- | -----------------
long-term debt                                 | $ 275.1                       | $ 8.6                                    | $ 13.8                              | $ 138.2                             | $ 114.5
capital leases                                 | 6.0                           | 2014                                     | 2014                                | 6.0                                 | 2014
operating leases                               | 62.9                          | 14.4                                     | 20.7                                | 11.6                                | 16.2
purchase obligations                           | 177.3                         | 176.6                                    | 0.7                                 | 2014                                | 2014
total                                          | $ 521.3                       | $ 199.6                                  | $ 35.2                              | $ 155.8                             | $ 130.7


united parcel service , inc.
 subsidiaries management's discussion analysis of financial condition results of operations liquidity capital resources operating activities summary of significant sources ( uses ) of cash from operating activities ( amounts in millions ) :.
 ( a ) represents depreciation and amortization , gains and losses on derivative and foreign exchange transactions , deferred income taxes , provisions for uncollectible accounts  pension and postretirement benefit expense  stock compensation expense impairment charges other non-cash items.
 cash from operating activities remained strong throughout 2011 to 2013 period.
 operating cash flow impacted in 2013  compared with 2012 by lower contributions into defined benefit pension and postretirement benefit plans ; partially offset by tnt express transaction-related charges  changes in income tax receivables and payables.
 paid termination fee to tnt express of 20ac200 million ( $ 268 million ) under agreement to terminate merger protocol in first quarter of 2013.
 cash payments for income taxes increased in 2013 compared with 2012  impacted by timing of current tax deductions.
 except for discretionary or accelerated fundings of plans contributions to company-sponsored pension plans varied based on minimum funding requirements present for individual pension plans.
 2022 in 2013  any required  nor discretionary , contributions to primary company-sponsored pension plans in.
 2022 in 2012  made $ 355 million required contribution to ups ibt pension plan.
 in 2011  made $ 1. 2 billion contribution to ups ibt pension plan  satisfied 2011 contribution requirements approximately $ 440 million in contributions not have required until after 2011.
 2022 remaining contributions in 2011 through 2013 period largely due to contributions to international pension plans and.
 postretirement medical benefit plans.
discussed in 201ccontractual commitments 201d section , minimum funding requirements next years  primarily related to ups ibt pension , ups retirement ups pension plans.
 as of december 31 , 2013 , total worldwide holdings of cash and cash equivalents was $ 4. 665 billion.
 approximately 45%-55% ( 45%-55 % ) of cash cash equivalents held by foreign subsidiaries year.
 amount of cash held by u. s.
 and foreign subsidiaries fluctuates year due to variety of factors  including timing of cash receipts and disbursements in normal course of business.
 cash provided by operating activities in united states primary source of funds to finance domestic operating needs , capital expenditures share repurchases dividend payments to shareowners.
 extent amounts represent previously untaxed earnings , cash held by foreign subsidiaries be subject to tax if amounts repatriated in form of dividends ; not all international cash balances to be repatriated in form of dividend if returned to u. s.
 when amounts earned by foreign subsidiaries expected to be indefinitely reinvested  no accrual for taxes provided.

| 2013         | 2012         | 2011
---------------------------------------------------------------------- | ------------ | ------------ | --------------
net income                                                             | $ 4372       | $ 807        | $ 3804
non-cash operating activities ( a )                                    | 3318         | 7313         | 4578
pension and postretirement plan contributions ( ups-sponsored plans )  | -212 ( 212 ) | -917 ( 917 ) | -1436 ( 1436 )
income tax receivables and payables                                    | -155 ( 155 ) | 280          | 236
changes in working capital and other noncurrent assets and liabilities | 121          | -148 ( 148 ) | -12 ( 12 )
other operating activities                                             | -140 ( 140 ) | -119 ( 119 ) | -97 ( 97 )
net cash from operating activities                                     | $ 7304       | $ 7216       | $ 7073