power purchase contracts dominion entered contracts for long-term purchases of capacity energy from other utilities qualifying facilities independent power producers.
 as of december 31 , 2002 dominion had 42 non-utility purchase contracts with bined dependable summer capacity of 3758 megawatts.
 table reflects dominion 2019s minimum commitments as of december 31  2002 under contracts.
 capacity purchases contracts totaled $ 691 million , $ 680 million $ 740 million for 2002  2001 2000 .
 in 2001  dominion completed purchase of three gener facilities termination of seven long-term power purchase contracts with non-utility generators.
 recorded after-tax charge of $ 136 million purchase termination of long-term power purchase contracts.
 cash payments related to purchase of three gener facilities totaled $ 207 million.
 allocation of pur- chase price assigned to assets liabilities acquired based upon estimated fair values as of date of acquisition.
 all value attributed to power pur- chase contracts terminated resulted in charge included in operation maintenance expense.
 fuel purchase commitments dominion enters into long-term purchase commitments for fuel in electric generation natural gas for purposes other than trading.
 estimated payments under commitments for next five years : 2003 2014$ 599 million ; 2004 2014$ 311 million ; 2005 2014$ 253 million ; 2006 2014$ 205 mil- lion ; 2007 2014$ 89 million ; years beyond 2007 2014$ 215 mil- lion.
 purchase commitments include required for regulated operations.
 dominion recovers costs of pur- chases through regulated rates.
 natural gas purchase com- mitments of dominion field services operations included net of related sales commitments.
 dominion committed to purchase certain volumes of nat- ural gas at market index prices in period natural gas delivered.
transactions designated as normal purchases sales under sfas no.
 133.
 natural gas pipeline storage capacity commitments dominion enters long-term commitments for purchase of natural gas pipeline storage capacity for purposes other than trading.
 estimated payments under commitments for next five years : 2003 2014$ 34 million ; 2004 2014$ 23 million ; 2005 2014$ 13 million.
 no signifi- cant commitments beyond 2005.
 production handling firm transportation commitments with gas oil production operations dominion entered into transportation produc- tion handling agreements with minimum commitments expected paid in following years : 2003 2014$ 23 million ; 2004 2014$ 57 million ; 2005 2014$ 56 million ; 2006 2014$ 53 million ; 2007 2014$ 44 million ; years after 2007 2014$ 68 million.
 lease commitments dominion leases facilities  vehicles  aircraft equip- ment under operating capital leases.
 future minimum lease payments under operating capital leases initial remaining lease terms excess of one year as of december 31, 2002 are : 2003 2014$ 94 million ; 2004 2014 $ 94 million ; 2005 2014$ 82 million ; 2006 2014$ 67 million ; 2007 2014 $ 62 million ; years beyond 2007 2014$ 79 million.
 rental expense included in other operations maintenance expense was $ 84 million , $ 75 million $ 107 million for 2002 , 2001  2000  respectively.
 as of december 31 , 2002 dominion entered agreements with special purpose enti- ties ( lessors ) to finance lease new power generation projects corporate headquarters air- craft.
 lessors have aggregate financing commitment from equity debt investors of $ 2. 2 billion  $ 1. 6 billion used for total project costs to date.
 dominion  construction agent for lessors responsible for com- pleting construction by specified date.
project terminated before completion, dominion has option to purchase project for 100 percent of project costs or terminate project make payment to lessor of approximately no more than 89. 9 percent of project costs.
 upon completion each individual project, dominion has use of project assets subject to operating lease.
 dominion 2019s lease payments to lessors sufficient to provide return to investors.
 at end of each individual project 2019s lease term  dominion may renew lease at negotiated amounts based on project costs current market conditions  subject to investors 2019 approval ; purchase project at original construction cost ; or sell project  on behalf lessor to independent third party.
 if project sold and proceeds from sale insufficient to repay investors, dominion may be required to make payment to lessor up to amount from 81 percent to 85 percent of project cost depending 85d o m i n i o n 2019 0 2 a n n u a l r e p o r t

( millions )               | commitment capacity | commitment other
-------------------------- | ------------------- | ----------------
2003                       | $ 643               | $ 44
2004                       | 635                 | 29
2005                       | 629                 | 22
2006                       | 614                 | 18
2007                       | 589                 | 11
later years                | 5259                | 113
total                      | 8369                | 237
present value of the total | $ 4836              | $ 140


total debt at july 1 , 2006 was $ 1762692000 approximately 75% ( 75 % ) at fixed rates averaging 6. 0% (. 0 % ) average life 19 years remainder at floating rates averaging 5. 2% (. 2 % ).
 certain loan agreements contain typical debt covenants to protect noteholders including provisions to maintain company 2019s long-term debt to total capital ratio below specified level.
 sysco in compliance with all debt covenants at july 1 , 2006.
 fair value of sysco 2019s total long-term debt estimated based on quoted market prices for same or similar issues or current rates company for debt same remaining maturities.
 fair value total long-term debt approximated $ 1669999000 at july 1, 2006 and $ 1442721000 at july 2 , 2005  respectively.
 letters of credit outstanding were $ 60000000 and $ 76817000  respectively.
 9.
 leases sysco normally purchases assets has obligations under capital and operating leases for certain distribution facilities  vehicles computers.
 total rental expense under operating leases was $ 100690000 , $ 92710000  and $ 86842000 in fiscal 2006 , 2005 2004  respectively.
 contingent rentals  subleases assets and obligations under capital leases not significant.
 aggregate minimum lease payments by fiscal year under existing non-capitalized long-term leases are:.
 2007 $ 56499000 2008 46899000 2009 39904000 2010 33329000 2011 25666000 later 128981000 10.
employee benefit plans sysco has defined benefit defined contribution retirement plans for employees.
 company contributes to multi-employer plans under provides health care benefits to eligible retirees dependents.
 sysco maintains qualified retirement plan ( ) pays benefits to employees at retirement using formulas based on participant 2019s years of service compensation.
 defined contribution 401 ( k ) plan provides under certain circumstances company may make matching contributions of up to 50% ( ) of first 6% ( 6 % ) of participant 2019s compensation.
 sysco 2019s contributions to plan were $ 21898000 in 2006, $ 28109000 in 2005  $ 27390000 in 2004.
 in addition to receiving benefits upon retirement under company 2019s defined benefit plan participants in management incentive plan ( 2018 2018management incentive compensation 2019 plans ) will receive benefits under supplemental executive retirement plan ( serp ).
 this plan is nonqualified , unfunded supplementary retirement plan.
 sysco maintains life insurance policies on lives participants with carrying values of $ 153659000 at july 1 , 2006 $ 138931000 at july 2 , 2005.
 these policies not included as plan assets or in funded status amounts in table below.
 sysco is sole owner and beneficiary of such policies.
 projected benefit obligations and accumulated benefit obligations for serp were $ 327450000 and $ 238599000  as of july 1 , 2006 and $ 375491000 and $ 264010000  as of july 2 , 2005.
 company made cash contributions to pension plans of $ 73764000 and $ 220361000 in fiscal years 2006 and 2005 including $ 66000000 and $ 214000000 in voluntary contributions to retirement plan in fiscal 2006 and 2005.
 in fiscal 2006  company 2019s voluntary contribution to retirement plan represented maximum tax-deductible amount.
fiscal 2005 company made voluntary contribution $ 134000000 fourth quarter addition $ 80000000 %%transmsg*** transmitting job : h39408 pcn : 049000000 *** %%pcmsg|47 |00011|yes|no|09/06/2006 17:22|0|1|page valid no graphics -- color : n|

| amount
----------- | ----------
2007        | $ 56499000
2008        | 46899000
2009        | 39904000
2010        | 33329000
2011        | 25666000
later years | 128981000


table provides minimum annual future rental commitment under operating leases initial or remaining non-cancelable lease terms over next five years and thereafter:.
 company has agreements with public entities ( 201cpartners 201d ) to establish joint ventures , referred to as 201cpublic-private partnerships. 201d under public-private partnerships company constructed utility plant , financed by company , and partners constructed utility plant ( connected to company 2019s property ) , financed by partners.
 company agreed to transfer and convey some of its real and personal property to partners in exchange for equal principal amount of industrial development bonds ( 201cidbs 201d ), issued by partners under state industrial development bond and commercial development act.
 company leased back total facilities , including portions funded by both company and partners , under leases for period 40 years.
 leases related to portion of facilities funded by company have required payments from company to partners that approximate payments required by terms of idbs from partners to company ( as holder of idbs ).
 ownership of portion of facilities constructed by company will revert back to company at end of lease , company has recorded these as capital leases.
 lease obligation and receivable for principal amount of idbs are presented by company on net basis.
 carrying value of facilities funded by company recognized as capital lease asset was $ 147 million and $ 150 million as of december 31 , 2018 and 2017 , respectively  presented in property , plant and equipment on consolidated balance sheets.
 future payments under lease obligations are equal to and offset by payments receivable under idbs.
as of december 31 , 2018  minimum annual future rental commitment under operating leases for facilities funded by partners initial non-cancelable lease terms in one year preceding minimum annual rental commitments are $ 4 million in 2019 through 2023 , and $ 59 million thereafter.
 note 20 : segment information company 2019s operating segments revenue-generating components businesses for separate financial information is internally produced used by management to make operating decisions assess performance.
 company operates businesses primarily through one reportable segment , regulated businesses segment.
 company also operates market-based businesses provide broad range of related complementary water and wastewater services within non-reportable operating segments  collectively referred market-based businesses.
 regulated businesses segment is largest component of company 2019s business includes 20 subsidiaries provide water and wastewater services to customers in 16 states.
 company 2019s primary market-based businesses include homeowner services group  provides warranty protection programs to residential smaller commercial customers ; military services group  provides water and wastewater services to u. s.
 government on military installations ; keystone , provides water transfer services for shale natural gas exploration and production companies.

| amount
---------- | ------
2019       | $ 17
2020       | 15
2021       | 12
2022       | 11
2023       | 6
thereafter | 80


hollyfrontier corporation notes to consolidated financial statements continued.
 transportation and storage costs incurred under agreements totaled $ 140. 5 million , $ 135. 1 million and $ 137. 7 million for years ended december 31 , 2017 , 2016 2015 , respectively.
 these amounts do not include contractual commitments under long-term transportation agreements with hep , all transactions with hep eliminated in consolidated financial statements.
 crude oil supply contract requires supplier to deliver specified volume of crude oil or pay shortfall fee for difference in actual barrels delivered less specified barrels per supply contract.
 for contract year ended august 31, 2017 actual number of barrels delivered was substantially less than specified barrels recorded reduction to cost of goods sold and accumulated shortfall fee receivable of $ 26. 0 million during this period.
 in september 2017  supplier notified us disputing shortfall fee owed in october 2017 notified us of demand for arbitration.
 offset receivable with payments of invoices for deliveries of crude oil received subsequent to august 31 , 2017  permitted under supply contract.
 believe disputes and claims made by supplier without merit.
 in march , 2006 , subsidiary of ours sold assets of montana refining company under asset purchase agreement ( 201capa 201d ).
 montana refining llc , current owner of assets submitted requests for reimbursement of approximately $ 20. 0 million to contractual indemnity provisions under apa for various costs incurred additional claims related to environmental matters.
 rejected most of claims for payment matter scheduled for arbitration beginning in july 2018.
 accrued costs we believe owed pursuant to apa estimate any reasonably possible losses beyond amounts accrued are not material.
note 20 : segment information effective fourth quarter of 2017  revised reportable segments to align with changes in chief operating decision maker manages allocates resources to business.
 tulsa refineries 2019 lubricants operations  previously reported in refining segment now combined with operations petro-canada lubricants business ( acquired february 1 , 2017 ) reported in lubricants and specialty products segment.
 prior period segment information retrospectively adjusted to reflect current segment presentation.
 operations organized into three reportable segments , refining , lubricants specialty products and hep.
 operations not included in refining , lubricants specialty products hep segments included in corporate and other.
 intersegment transactions eliminated in consolidated financial statements included in eliminations.
 corporate and other eliminations aggregated presented under corporate , other and eliminations column.
 refining segment represents operations of el dorado , tulsa , navajo , cheyenne woods cross refineries and hfc asphalt ( aggregated as reportable segment ).
 refining activities involve purchase and refining of crude oil wholesale branded marketing of refined products  gasoline  diesel fuel jet fuel.
 petroleum products primarily marketed in mid-continent , southwest rocky mountain regions of united states.
 hfc asphalt operates asphalt terminals in arizona , new mexico oklahoma.

| ( in thousands )
---------- | ----------------
2018       | $ 148716
2019       | 132547
2020       | 119639
2021       | 107400
2022       | 102884
thereafter | 857454
total      | $ 1468640


royal caribbean cruises ltd.
 15 from two to 17 nights throughout south america  caribbean europe.
 majesty of the seas will redeployed from royal caribbean international to pullmantur in 2016.
 pullmantur serves contemporary segment of spanish  portuguese latin american cruise mar- kets.
 pullmantur 2019s strategy is to attract cruise guests from these target markets by providing variety of cruising options onboard activities directed at couples families traveling with children.
 last years pullmantur increased focus on latin america expanded pres- ence in market.
 to facilitate pullmantur focus on core cruise business on march 31 , 2014  pullmantur sold majority of interest in non-core busi- nesses.
 non-core businesses included pullmantur 2019s land-based tour operations , travel agency 49% ( 49 % ) interest in air business.
 with sale agreement retained 19% ( 19 % ) interest in each non-core businesses 100% ( % ) ownership of aircraft dry leased to pullmantur air.
 see note 1.
 general and note 6.
 other assets to consolidated financial statements under item 8.
 financial statements supplementary data for further details.
 cdf croisi e8res de france operate two ships with aggregate capacity of approximately 2800 berths under cdf croisi e8res de france brand.
 cdf croisi e8res de france offers seasonal itineraries to mediterranean  europe caribbean.
 during winter season zenith deployed to pullmantur brand for sailings in south america.
 cdf croisi e8res de france designed to serve contemporary segment french cruise market providing brand tailored for french cruise guests.
tui cruises is a joint venture owned 50% ) by us and 50% 50 % ) by tui ag , a german tourism and shipping com- pany  designed to serve contemporary and premium segments of german cruise market by offering product tailored for german guests.
 all onboard activities  services  shore excursions menu offerings designed to suit preferences this target market.
 tui cruises operates three ships  mein schiff 1 , mein schiff 2 and mein schiff 3 , aggregate capacity of approximately 6300 berths.
 has three newbuild ships on order at finnish meyer turku yard capacity approximately 7500 berths : mein schiff 4  scheduled for delivery in second quarter of 2015 , mein schiff 5  for delivery third quarter of 2016 mein schiff 6  for in second quarter of 2017.
 in november 2014  formed strategic partnership with ctrip. com international ltd.
 ( 201cctrip 201d )  a chinese travel service provider to operate new cruise brand skysea cruises.
 skysea cruises will offer custom-tailored product for chinese cruise guests operating ship purchased from celebrity cruises.
 new cruise line begin service in second quarter of 2015.
 we and ctrip each own 35% ( 35 % ) of new company  skysea holding , balance owned by skysea holding management and a private equity fund.
 industry cruising is considered a well-established vacation sector in north american market growing sec tor in european market developing but promising sector in other emerging markets.
 industry data indicates market penetration rates low significant portion of cruise guests carried are first-time cruisers.
 believe presents opportunity for long-term growth and potential for increased profitability.
table details market penetration rates for north america and europe computed based on number of annual cruise guests as percentage of total population : america ( 1 ) europe ( 2 ).
 ( 1 ) source : estimates based on combination data from publicly sources including interna- tional monetary fund cruise lines international association ( ).
 rates based on cruise guests carried for at least two consecutive nights.
 includes united states of america and canada.
 ( 2 ) source : estimates based on combination of data from interna- tional monetary fund clia europe , formerly european cruise council.
 estimate global cruise fleet served by approximately 457000 berths on approximately 283 ships at end of 2014.
 approximately 33 ships with estimated 98650 berths expected to be placed in service in global cruise market between 2015 and 2019  possible ships could be ordered or taken out of service during these periods.
 estimate global cruise industry carried 22. 0 million cruise guests in 2014 compared to 21. 3 million cruise guests carried in 2013 and 20. 9 million cruise guests carried in 2012.

year | north america ( 1 ) | europe ( 2 )
---- | ------------------- | --------------
2010 | 3.1% ( 3.1 % )      | 1.1% ( 1.1 % )
2011 | 3.4% ( 3.4 % )      | 1.1% ( 1.1 % )
2012 | 3.3% ( 3.3 % )      | 1.2% ( 1.2 % )
2013 | 3.4% ( 3.4 % )      | 1.2% ( 1.2 % )
2014 | 3.5% ( 3.5 % )      | 1.3% ( 1.3 % )


rights each holder of a share of outstanding common stock holds one share purchase right ( "right" ) for each share stock.
 each right entitles holder to purchase from company one half of one-hundredth of a share of series junior participating preferred stock , $ 0. 01 par value ( "junior preferred shares" )  of company at a price of $ 135 per one half of one-hundredth of junior preferred share ( "purchase price" ).
 rights not exercisable until earlier of acquisition by a person or group of 15% ( 15 % ) or more of outstanding common stock ( "acquiring person" ) or announcement of intention to make or commencement of tender offer or exchange offer , consummation in beneficial ownership by person or group of 15% ( 15 % ) or more of outstanding common stock.
 in any person or group becomes acquiring person  each holder of right other than acquiring person will right to receive upon exercise that number of shares of common stock having market value of two times the purchase price in company acquired in a business combination transaction or 50% ( 50 % ) or more of assets are sold each holder of right will right to receive upon exercise that number of shares of common stock of acquiring company at time transaction market value of two times purchase price.
 under certain specified circumstances board of directors company may cause rights ( other ) to be exchanged  in whole or in part for common stock or junior preferred shares , at exchange rate of one share of common stock per right or one half of one-hundredth of junior preferred share per right.
 prior to acquisition by person or group of beneficial ownership of 15% ( 15 % ) or more of outstanding common stock  board of directors company may redeem rights in whole at a price of $ 0. 01 per right.
common stock reserved for future issuance at december 31 , 2003 , company has reserved shares common stock for future issuance under all equity compensation plans ( shares in thousands ) : p.
 significant revenue arrangements company formed strategic collaborations with major pharmaceutical companies in drug discovery , development  commercialization.
 research and development agreements provide company financial support valuable resources for research programs development of clinical drug candidates  product development marketing sales of products.
 collaborative research and development agreements company research development commercialization programs company seeks to discover  develop commercialize major pharmaceutical products with supported by company collaborators.
 collaborative research development arrangements provide research funding over initial contract period with renewal termination options vary by agreement.
 agreements include milestone payments based on achievement occurrence of designated event.
 agreements may contain development reimbursement provisions  royalty rights profit sharing rights manufacturing options.
 terms of each agreement vary.
 company entered into significant research and development collaborations with large pharmaceutical companies.
 p.
 significant revenue arrangements novartis in may 2000 , company and novartis pharma ag ( "novartis" ) entered agreement to collaborate on discovery , development commercialization of small molecule drugs at targets in kinase protein family.
 agreement novartis agreed to pay company up-front payment of $ 15000000 upon signing agreement, up to $ 200000000 in product research funding over six.

common stock under stock and option plans    | 21829
-------------------------------------------- | -----
common stock under the vertex purchase plan  | 249
common stock under the vertex 401 ( k ) plan | 125
total                                        | 22203


jpmorgan chase & co. /2012 annual report 119 implementing revisions to capital accord in.
 ( revisions referred to as 201cbasel iii 201d ).
 basel iii revised basel ii by narrowing definition of capital  increasing capital requirements for specific exposures.
 basel iii includes higher capital ratio requirements provides tier 1 common capital requirement increased to 7% ( 7 % ) , minimum ratio of 4. 5% ( 4. 5 % ) plus 2. 5% ( 2. 5 % ) capital conservation buffer.
 implementation of 7% ( 7 % ) tier 1 common capital requirement required by january 1 , global systemically important banks ( 201cgsibs 201d ) required to maintain tier 1 common requirements above 7% ( 7 % ) minimum in amounts ranging from additional 1% ( 1 % ) to additional 2. 5% ( 2. 5 % ).
 in november 2012  financial stability board ( 201cfsb 201d ) indicated require firm , three other banks , to hold additional 2. 5% ( 2. 5 % ) of tier 1 common ; requirement phased in beginning in 2016.
 basel committee intended to require certain gsibs to hold additional 1% ( 1 % ) of tier 1 common under certain circumstances to as disincentive for gsib from taking actions increase systemic importance.
 currently no gsib ( including firm ) required to hold this additional 1% ( 1 % ) of tier 1 common.
 pursuant to requirements of dodd-frank act ,.
 federal banking agencies proposed certain permanent basel i floors under basel ii and basel iii capital calculations.
 following table presents comparison of firm 2019s tier 1 common under basel i rules to estimated tier 1 common under basel iii rules  with firm 2019s estimated risk-weighted assets.
tier 1 common under basel iii includes additional adjustments deductions not included in basel i tier 1 common  inclusion of aoci related to afs securities defined benefit pension postretirement employee benefit ( 201copeb 201d ) plans.
 firm estimates its tier 1 common ratio under basel iii rules 8. 7% ( 8. 7 % ) as of december 31 , 2012.
 tier 1 common ratio under both basel i and basel iii are non- gaap financial measures.
 measures used by bank regulators investors analysts as key measure to assess firm 2019s capital position to compare firm 2019s capital to other financial services companies.
 december 31 , 2012 ( in millions , except ratios ).
 estimated risk-weighted assets under basel iii rules ( a ) $ 1647903 estimated tier 1 common ratio under basel iii rules ( b ) 8. 7% ( 8. 7 % ) key differences in calculation of risk-weighted assets between basel i and basel iii include basel iii credit risk rwa is based on risk-sensitive approaches on internal credit models parameters  basel i rwa based on fixed supervisory risk weightings vary by counterparty type asset class 2 basel iii market risk rwa reflects new capital requirements related to trading assets securitizations include incremental capital requirements for stress var , correlation trading  re-securitization positions basel iii includes rwa for operational risk  basel i does not.
 actual impact on firm 2019s capital ratios upon implementation could differ depending on final implementation guidance from regulators regulatory approval of firm 2019s internal risk models.
 tier 1 common ratio is tier 1 common divided by rwa.
firm 2019s estimate of tier 1 common ratio under basel iii reflects current understanding of basel iii rules based on information published by basel committee and.
 federal banking agencies application of rules to businesses conducted ; excludes impact of changes firm may make in future to businesses implementing basel iii rules  possible enhancements to market risk models further implementation guidance from regulators.
 basel iii capital requirements subject to prolonged transition periods.
 transition period for banks to meet tier 1 common requirement under basel iii originally scheduled to begin in 2013 full implementation on january 1 , 2019.
 in november 2012 .
 federal banking agencies announced delay in implementation dates for basel iii capital requirements.
 additional capital requirements for gsibs will phased in starting january 1, 2016  with full implementation on january 1 , 2019.
 management 2019s current objective is for firm to reach by end of 2013 , estimated basel iii tier i common ratio of 9. 5% ( 9. 5 % ).
 additional information regarding firm 2019s capital ratios federal regulatory capital standards presented in supervision and regulation on pages 1 20138 of 2012 form 10-k , note 28 on pages 306 2013 308 of this annual report.
 broker-dealer regulatory capital jpmorgan chase 2019s principal.
 broker-dealer subsidiaries are j.
 morgan securities llc ( 201cjpmorgan securities 201d ) and j.
 morgan clearing corp.
 ( 201cjpmorgan clearing 201d ).
 jpmorgan clearing is subsidiary of jpmorgan securities provides clearing and settlement services.
 jpmorgan securities clearing subject to rule 15c3-1 under securities exchange act of 1934 ( 201cnet capital rule 201d ).
jpmorgan securities and jpmorgan clearing registered as futures commission merchants subject to rule 1. 17 of commodity futures trading commission ( 201ccftc 201d ).
 jpmorgan elected to compute minimum net capital requirements in accordance with 201calternative net capital requirements 201d of net capital rule.
 at december 31 , 2012  jpmorgan securities 2019 net capital  defined net rule was $ 13. 5 billion , exceeding minimum requirement by

tier 1 common under basel i rules                                                         | $ 140342
----------------------------------------------------------------------------------------- | --------------
adjustments related to aoci for afs securities and defined benefit pension and opeb plans | 4077
all other adjustments                                                                     | -453 ( 453 )
estimated tier 1 common under basel iii rules                                             | $ 143966
estimated risk-weighted assets under basel iii rules ( a )                                | $ 1647903
estimated tier 1 common ratio under basel iii rules ( b )                                 | 8.7% ( 8.7 % )


unit shipments increased 49% ( 49 % ) to 217. 4 million units in 2006 compared to 146. 0 million units in 2005.
 increase driven by increased unit shipments of products for gsm , cdma 3g technologies offset by decreased unit shipments of products for iden technology.
 for full year 2006 unit shipments by segment increased in all regions.
 due to segment 2019s increase in unit shipments outpacing growth in worldwide handset market grew approximately 20% ( 20 % ) in 2006 segment expanded global handset market share to estimated 22% ( 22 % ) for full year 2006.
 in 2006 asp decreased approximately 11% ( 11 % ) compared to 2005.
 decrease in asp driven by changes in geographic and product-tier mix of sales.
 asp decreased approximately 10% ( 10 % ) in 2005 increased 15% ( 15 % ) in 2004.
 asp impacted by factors including product mix  market conditions competitive product offerings asp trends vary over time.
 in 2006 largest segment 2019s end customers ( including sales distributors ) were china mobile , verizon  sprint nextel  cingular  t-mobile.
 these five largest customers accounted for approximately 39% ( 39 % ) of segment 2019s net sales in 2006.
 besides selling directly to carriers operators segment also sold products through third-party distributors and retailers accounted for approximately 38% ( 38 % ) of segment 2019s net sales.
 largest of distributors was brightstar corporation.
 u. s.
 market continued segment 2019s largest individual market many customers more than 65% ( 65 % ) of segment 2019s 2006 net sales were outside u. s.
 largest international markets were china , brazil  united kingdom mexico.
home networks mobility segment designs  manufactures sells installs services digital video  internet protocol ( 201cip 201d ) video broadcast network interactive set-tops 201cdigital entertainment devices 201d end-to- end video delivery solutions  broadband access infrastructure systems data voice customer premise equipment ( 201cbroadband gateways 201d ) to cable television telecom service providers 201chome business 201d ) wireless access systems 201cwireless networks 201d ) including cellular infrastructure systems wireless broadband systems to wireless service providers.
 2007 segment 2019s net sales represented 27% ( 27 % ) of company 2019s consolidated net sales compared to 21% ( 21 % ) in 2006 26% ( 26 % ) in 2005.
 dollars in millions ) 2007 2006 2005 2007 20142006 years ended december 31 percent change.
 segment results 20142007 compared to 2006 segment 2019s net sales increased 9% ( 9 % ) to $ 10. 0 billion  compared to $ 9. 2 billion in 2006.
 9% ( 9 % ) increase net sales reflects 27% ( 27 % ) increase in net sales in home business offset by 1% ( 1 % ) decrease in net sales of wireless networks.
 net sales of digital entertainment devices increased 43% ( 43 % ) increased demand for digital set-tops including hd/dvr set-tops ip set-tops offset by decline in asp due to product mix shift towards all-digital set-tops.
 unit shipments of digital entertainment devices increased 51% ( 51 % ) to 15. 2 million units.
 net sales of broadband gateways increased 6% ( 6 % ) due to higher net sales of data modems driven by net sales from netopia business acquired in february 2007.
net sales wireless networks decreased 1% ( 1 % ) driven by lower net sales of iden cdma infrastructure equipment partially offset by higher net sales gsm infrastructure equipment despite competitive pricing pressure.
 geographic 9% ( 9 % ) increase in net sales reflects higher net sales in all geographic regions.
 increase in net sales in north america driven by higher sales of digital entertainment devices partially offset by lower net sales of iden cdma infrastructure equipment.
 increase in net sales in asia due to higher net sales gsm infrastructure equipment partially offset by lower net sales cdma equipment.
 increase in net sales in emea due to higher net sales gsm infrastructure equipment partially offset by lower demand for iden cdma equipment.
 net sales in north america significant portion of segment 2019s business accounting for 52% ( 52 % ) of segment 2019s total net sales in 2007 compared to 56% ( 56 % ) 2019s net sales in 2006.
 60 management 2019s discussion analysis of financial condition results of operations

( dollars in millions ) | years ended december 31 2007 | years ended december 31 2006 | years ended december 31 2005 | years ended december 31 2007 20142006 | 2006 20142005
----------------------- | ---------------------------- | ---------------------------- | ---------------------------- | ------------------------------------- | ---------------
segment net sales       | $ 10014                      | $ 9164                       | $ 9037                       | 9% ( 9 % )                            | 1% ( 1 % )
operating earnings      | 709                          | 787                          | 1232                         | ( 10 ) % (  % )                       | ( 36 ) % (  % )


synopsys , inc.
 notes to consolidated financial statements 2014 electronic applications markets.
 company believes acquisition will expand technology portfolio channel reach addressable market by adding complementary products expertise for fpga solutions rapid asic prototyping.
 purchase price.
 synopsys paid $ 8. 00 per share for all outstanding shares including vested options of synplicity for aggregate cash payment of $ 223. 3 million.
 synopsys assumed employee stock options restricted stock units called 201cstock awards. total purchase consideration consisted of.
 acquisition related costs of professional services severance employee related costs facilities closure costs $ 6. 8 million paid as of october 31 , 2009.
 fair value of stock awards assumed.
 aggregate of 4. 7 million shares of synplicity stock options restricted stock units exchanged for synopsys stock options stock units at exchange ratio of 0. 3392 per share.
 fair value of stock options assumed determined using black-scholes valuation model.
 fair value of stock awards vested or earned of $ 4. 2 million included as part of purchase price.
 fair value of unvested awards of $ 5. 0 million recorded as operating expense over remaining service periods straight-line basis.
 purchase price allocation.
 company allocated $ 80. 0 million of purchase price to identifiable intangible assets amortized over two to seven years.
 in-process research and development expense related to acquisitions was $ 4. 8 million.
 goodwill  excess of purchase price over fair value of tangible identifiable intangible assets acquired was $ 120. 3 million not be amortized.
 goodwill resulted from company expectation of cost synergies sales growth from integration of synplicity 2019s technology with company 2019s technology operations expansion of products market reach.
fiscal 2007 acquisitions 2007 company completed purchase acquisitions for cash.
 allocated total purchase considerations $ 54. 8 million included acquisition related costs $ 1. 4 million ) to assets and liabilities acquired including identifiable intangible assets based on fair values at acquisition dates resulting in aggregate goodwill of $ 36. 6 million.
 acquired identifiable intangible assets of $ 14. 3 million amortized over two to nine years.
 in-process research and development expense related to acquisitions was $ 3. 2 million.

| ( in thousands )
--------------------------------------------------- | ----------------
cash paid net of cash acquired                      | $ 180618
fair value of assumed vested or earned stock awards | 4169
acquisition related costs                           | 8016
total purchase price consideration                  | $ 192803


entergy corporation subsidiaries management 2019s financial discussion analysis volume/weather variance due to increase of 1402 gwh , or 1% ( 1 % ) in billed electricity usage including increase in industrial usage effect of favorable weather.
 increase in industrial sales due to expansion in chemicals industry addition of new customers partially offset by decreased demand due to extended maintenance outages for existing chemicals customers.
 waterford 3 replacement steam generator provision due to regulatory charge of approximately $ 32 million recorded in 2015 related to uncertainty with resolution of waterford 3 replacement steam generator project.
 see note 2 to financial statements for discussion of waterford 3 replacement steam generator prudence review proceeding.
 miso deferral variance due to deferral in 2014 of non-fuel miso-related charges  approved by lpsc mpsc.
 deferral non-fuel miso-related charges partially offset in other operation maintenance expenses.
 see note 2 to financial statements for discussion of recovery of non-fuel miso-related charges.
 louisiana business combination customer credits variance due to regulatory liability of $ 107 million recorded by entergy in october 2015 result of entergy gulf states louisiana entergy louisiana business combination.
 consistent with terms stipulated settlement business combination proceeding electric customers of entergy louisiana will realize customer credits associated with business combination in october 2015 entergy recorded regulatory liability of $ 107 million ( $ 66 million net-of-tax ).
 see note 2 to financial statements for discussion of business combination customer credits.
 entergy wholesale commodities following analysis of change in net revenue comparing 2015 to 2014.
 amount ( in millions ).
shown in table above net revenue for entergy wholesale commodities decreased by $ 558 million in 2016 primarily due to 2022 lower realized wholesale energy prices  due higher northeast market power prices in 2014  lower capacity prices in 2015 ; 2022 decrease in net revenue vermont yankee ceasing power production in december 2014.
 decrease partially offset by higher volume in entergy wholesale commodities nuclear fleet  excluding vermont yankee from fewer refueling outage days in 2015 compared to 2014 partially offset by more unplanned outage days in 2015 2014.

| amount ( in millions )
---------------------------------------------- | ----------------------
2014 net revenue                               | $ 2224
nuclear realized price changes                 | -310 ( 310 )
vermont yankee shutdown in december 2014       | -305 ( 305 )
nuclear volume excluding vermont yankee effect | 20
other                                          | 37
2015 net revenue                               | $ 1666


american tower corporation subsidiaries notes to consolidated financial statements 2014 continued ) 12.
 impairments , net loss on sale of long-lived assets  restructuring merger related expense significant components reflected in impairments  net loss on sale long-lived assets restructuring merger related expense in consolidated statements operations include : impairments net loss on sale of long-lived assets 2014during years ended december 31 , 2005  2004 2003  company recorded impairments net loss on sale of long-lived assets primarily related to rental management segment ) of $ 19. 1 million , $ 22. 3 million $ 28. 3 million , respectively.
 2022 non-core asset impairment charges 2014during years ended december 31 2005 2004 company sold limited number of non-core towers other non-core assets recorded impairment charges to write-down to net realizable value.
 year ended december 31 , 2003  company sold approximately 300 non-core towers other non-core assets recorded impairment charges to write-down assets to net realizable value.
 company recorded impairment charges net losses of approximately $ 16. 8 million , $ 17. 7 million $ 19. 1 million for years ended december 31 , 2005 , 2004 2003 .
 2022 construction-in-progress impairment charges 2014for year ended december 31  2005 2004 2003  company wrote-off approximately $ 2. 3 million , $ 4. 6 million $ 9. 2 million , of construction-in-progress costs  primarily associated with sites no longer planned to build.
 restructuring expense 2014during year ended december 31 , 2005  company made cash payments against previous accrued restructuring liability amount of $ 0. 8 million.
year ended december 31 , 2004  company incurred employee separation costs of $ 0. 8 million decreased lease terminations facility closing costs liability by $ 0. 1 million.
 year ended december 31 , 2003  company incurred employee separation costs associated with reorganization of functions within rental and management segment increased accrued restructuring liability by $ 2. 3 million.
 charges reflected in impairments , net loss on sale of long-lived assets  restructuring merger related expense in consolidated statement of operations for years ended december 31 , 2004 2003.
 table displays activity accrued restructuring liability for years ended december 31 , 2003 , 2004 2005 ( in thousands ).
 accrued restructuring liability reflected in accounts payable accrued expenses in consolidated balance sheets as of december 31 , 2005 liability january 1 , restructuring expense payments liability as december 31 , restructuring expense payments liability december 31 payments liability december 31.
 no material changes in estimates related to accrued restructuring liability year ended december 31 , 2005.
 company expects to pay balance of employee separation liabilities prior to end of 2006.
 company continues to negotiate certain lease terminations associated with restructuring liability.
 merger related expense 2014during year ended december 31 , 2005  company assumed certain obligations result of merger with spectrasite , inc. primarily related to employee separation costs former

| liability as of january 1 2003 | 2003 restructuring expense | 2003 cash payments | liability as of december 31 2003 | 2004 restructuring expense | 2004 cash payments | liability as of december 31 2004 | 2005 restructuring expense | 2005 cash payments | liability as of december 31 2005
--------------------------------------------------- | ------------------------------ | -------------------------- | ------------------ | -------------------------------- | -------------------------- | ------------------ | -------------------------------- | -------------------------- | ------------------ | --------------------------------
employee separations                                | $ 1639                         | $ 1919                     | $ -1319 ( 1319 )   | $ 2239                           | $ 823                      | $ -2397 ( 2397 )   | $ 665                            | $ 84                       | $ -448 ( 448 )     | $ 301
lease terminations and other facility closing costs | 1993                           | 347                        | -890 ( 890 )       | 1450                             | -131 ( 131 )               | -888 ( 888 )       | 431                              | 12                         | -325 ( 325 )       | 118
total                                               | $ 3632                         | $ 2266                     | $ -2209 ( 2209 )   | $ 3689                           | $ 692                      | $ -3285 ( 3285 )   | $ 1096                           | $ 96                       | $ -773 ( 773 )     | $ 419


air mobility sales declined $ 535 million due to c-130j deliveries ( 12 in 2006 compared to 15 2005 ) lower volume c-5 program.
 combat aircraft sales increased $ 292 million due to higher f-35 f-22 volume offset by reduced volume f-16 programs.
 other aeronautics programs sales increased $ 83 million due to higher volume sustainment services activities.
 operating profit segment increased 21% ( 21 % ) in 2007 compared to 2006.
 operating profit increases in combat aircraft offset decreases other aeronautics programs air mobility.
 combat aircraft operating profit increased $ 326 million due to improved performance on f-22 f-16 programs.
 air mobility other aeronautics programs declined $ 77 million due to lower operating profit in support sustainment activities.
 operating profit segment increased 20% ( 20 % ) in 2006 compared to 2005.
 operating profit increased in combat aircraft air mobility.
 combat aircraft increased $ 114 million due to higher volume on f-35 f-22 programs improved performance on f-16 programs.
 improvement attributable to 2005 operating profit included reduction in earnings on f-35 program.
 air mobility operating profit increased $ 84 million due to improved performance on c-130j sustainment activities 2006.
 backlog decreased 2007 compared to 2006 result of sales volume on f-35 program.
 decrease offset by increased orders on f-22 c-130j programs.
 electronic systems systems 2019 operating results included ( in millions ) 2007 2006 2005.
 net sales for electronic systems increased 6% ( 6 % ) in 2007 compared to 2006.
 sales increased in missiles & fire control m&fc ) maritime systems & sensors ms2 platform , training & energy pt&e ).
 m&fc sales increased $ 258 million due to higher volume in fire control systems air defense programs offset declines in tactical missile programs.
ms2 sales grew $ 254 million due to volume increases undersea radar systems activities offset by decreases surface systems activities.
 pt&e sales increased $ 113 million due to higher volume platform integration activities offset declines distribution technology activities.
 net sales for electronic systems increased 7% ( 7 % ) in 2006 compared to 2005.
 higher volume platform integration led to increased sales $ 329 million at pt&e.
 ms2 sales increased $ 267 million due to surface systems activities.
 air defense programs contributed increased sales $ 118 million at m&fc.
 operating profit segment increased 12% ( 12 % ) in 2007 compared to 2006 increase in all three lines of business.
 operating profit increased $ 70 million at pt&e due to higher volume improved performance platform integration activities.
 ms2 operating profit increased $ 32 million due to higher volume undersea tactical systems activities lower volume surface systems.
 m&fc operating profit increased $ 32 million due to higher volume fire control systems improved performance in tactical missile programs offset by performance international air defense programs 2006.
 operating profit increased 17% ( 17 % ) in 2006 compared to 2005.
 operating profit increased $ 74 million at ms2 due to higher volume on surface systems undersea programs.
 pt&e operating profit increased $ 61 million due to improved performance distribution technology activities.
 higher volume on air defense programs contributed $ 52 million increase operating profit at m&fc.
 increase in backlog 2007 over 2006 resulted from increased orders for tactical missile programs fire control systems at m&fc platform integration programs at pt&e.

( in millions )     | 2007    | 2006    | 2005
------------------- | ------- | ------- | ------
net sales           | $ 11143 | $ 10519 | $ 9811
operating profit    | 1410    | 1264    | 1078
backlog at year-end | 21200   | 19700   | 18600


entergy corporation subsidiaries notes to financial statements consists of pollution control revenue bonds environmental revenue bonds  some secured by collateral first mortgage bonds.
 these notes not have stated interest rate implicit interest rate of 4. 8% (. ).
 pursuant to nuclear waste policy act of 1982  entergy 2019s nuclear owner/licensee subsidiaries have contracts with doe for spent nuclear fuel disposal service.
 contracts include one-time fee for generation prior to april 7 , 1983.
 entergy arkansas only entergy company generated electric power with nuclear fuel prior to that date includes one-time fee  plus accrued interest  long-term see note 10 to financial statements for discussion of waterford 3 grand gulf lease obligations.
 fair value excludes lease obligations of $ 149 million at entergy louisiana $ 97 million at system energy  long-term doe obligations of $ 181 million at entergy arkansas  note payable to nypa of $ 95 million at entergy  includes debt due within one year.
 fair values classified as level 2 in fair value hierarchy discussed in note 16 financial statements based on prices from inputs benchmark yields reported trades.
 annual long-term debt maturities ( excluding lease obligations long-term doe obligations ) for debt outstanding as of december 31 , 2013 for next five years are as follows : amount ( in thousands ).
 in november 2000  entergy 2019s non-utility nuclear business purchased fitzpatrick and indian point 3 power plants in seller-financed transaction.
 entergy issued notes to nypa with seven annual installments of approximately $ 108 million commencing one year from date closing eight annual installments of $ 20 million commencing eight years from date closing.
 these notes not have stated interest rate implicit interest rate of 4. 8% (.8 % ).
 with purchase agreement with nypa purchase of indian point 2 in 2001 resulted in entergy liable to nypa for additional $ 10 million per year for 10 years beginning september 2003.
 liability recorded upon purchase indian point 2 september 2001.
 in july 2003 payment of $ 102 million made prior to maturity on note payable to nypa.
 under provision in letter of credit supporting notes if utility operating companies or system energy default on other indebtedness entergy could be required to post collateral to support letter of credit.
 entergy gulf states louisiana , entergy louisiana  entergy mississippi entergy texas  system energy obtained long-term financing authorizations from ferc through october 2015.
 entergy arkansas obtained long-term financing authorization from apsc through december 2015.
 entergy new orleans obtained long-term financing authorization from city council extends through july 2014.
 capital funds agreement agreement creditors entergy corporation agreed to supply system energy with sufficient capital to : 2022 maintain system energy 2019s equity capital at minimum of 35% ( 35 % ) of total capitalization ( excluding short- term debt )

| amount ( in thousands )
---- | -----------------------
2014 | $ 385373
2015 | $ 1110566
2016 | $ 270852
2017 | $ 766801
2018 | $ 1324616


108 / sl green realty corp.
 2017 annual report espp provides for eligible employees to purchase common stock at purchase price equal to 85% ( 85 % ) of lesser of 1 market value common stock on first day of offer- ing period or 2 ) market value common on last day of offering period.
 espp approved by stockholders at 2008 annual meeting.
 as of december a031 , 2017  104597 a0shares of common stock issued under espp.
 available for issuance subject to adjustment upon merger  reorganization  stock split or similar corporate change.
 company filed registration statement on form a0s-8 with sec espp.
 common stock offered for purchase through series of successive offering periods.
 each offering period three months duration begin first day of each calendar quarter first a0offering period commenced on january a01 , 2008.
 15.
 accumulated other comprehensive income tables set changes in accumulated other comprehensive income ( loss ) by component as of december a031, 2017 2016 2015 ( in thousands ) : a0green 2019s share net unrealized of joint venture net unrealized gain on net unrealized gain on derivative gain on derivative marketable instruments 1 ) instruments 2 ) securities total.
 1 amount reclassified from accumulated other comprehensive income ( loss ) included in interest expense in consolidated statements of operations.
 as of december a031 , 2017 and 2016  deferred net losses from these terminated hedges  included in accumulated other comprehensive loss net unrealized loss on derivative instrument was $ 3. 2 a0million and $ 7. 1 a0million  respectively.
 2 ) amount reclassified from accumulated other comprehensive income ( loss ) included in equity in net income from unconsolidated joint ventures in consolidated statements of operations.
 16.
fair value measurements required to disclose fair value information financial instruments , whether or not recognized in consolidated balance sheets , for practical to estimate fair value.
 fasb guidance defines fair value as price received to sell asset or paid to transfer a liability in orderly transaction between market participants on measurement date.
 we measure disclose estimated fair value of financial assets and liabilities based on hierarchy distinguishes between market participant assumptions based on market data sources independent of reporting entity and reporting entity 2019s own assumptions about market participant assumptions.
 hierarchy consists of three broad levels : level a01 2014 quoted prices ( unadjusted ) in active markets for identical assets or liabilities reporting entity can access at measurement date ; level a02 2014 inputs other than quoted prices included within level a01  observable for asset or liability  directly or indirectly ; and level a03 2014 unobservable inputs for asset or liability used when little or no market data available.
 follow this hierarchy for assets and liabilities measured at fair value on recurring and nonrecurring basis.
 in instances determination of fair value measurement based on inputs from different levels of fair value hierarchy, level in fair value hierarchy entire fair value measure- ment falls based on lowest level of input significant to fair value measurement in entirety.
 assessment of significance of particular input to fair value mea- surement entirety requires judgment and considers factors specific to asset or liability.

| net unrealized gain on derivative instruments ( 1 ) | sl green 2019s share of joint venture net unrealized gain on derivative instruments ( 2 ) | net unrealized gain on marketable securities | total
---------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------------------- | ----------------
balance at december 31 2014                                      | $ -9498 ( 9498 )                                    | $ -95 ( 95 )                                                                              | $ 2613                                       | $ -6980 ( 6980 )
other comprehensive loss before reclassifications                | -11143 ( 11143 )                                    | -1714 ( 1714 )                                                                            | -610 ( 610 )                                 | -13467 ( 13467 )
amounts reclassified from accumulated other comprehensive income | 10481                                               | 1217                                                                                | 2014                                         | 11698
balance at december 31 2015                                      | -10160 ( 10160 )                                    | -592 ( 592 )                                                                              | 2003                                         | -8749 ( 8749 )
other comprehensive income before reclassifications              | 13534                                               | 1160                                                                                | 3517                                         | 18211
amounts reclassified from accumulated other comprehensive income | 9222                                                | 3453                                                                                | 2014                                         | 12675
balance at december 31 2016                                      | 12596                                               | 4021                                                                                | 5520                                         | 22137
other comprehensive ( loss ) income before reclassifications     | -1618 ( 1618 )                                      | 233                                                                                | -1348 ( 1348 )                               | -2733 ( 2733 )
amounts reclassified from accumulated other comprehensive income | 1564                                                | 766                                                                                | -3130 ( 3130 )                               | -800 ( 800 )
balance at december 31 2017                                      | $ 12542                                             | $ 5020                                                                                | $ 1042                                       | $ 18604


contractual obligations fis 2019 long-term contractual obligations include long-term debt , interest on long-term debt  lease payments on property equipment payments for data processing and maintenance.
 for more descriptive information company's long-term debt , see note 13 in notes to consolidated financial statements.
 following table summarizes fis 2019 significant contractual obligations and commitments as of december 31 , 2012 ( in millions ) : less than 1-3 3-5 more than total 1 year years years 5 years.
 1 calculations assume : applicable margins remain constant all variable rate debt priced at one-month libor rate as of december 31, 2012 ; no new hedging transactions effected only mandatory debt repayments made no refinancing occurs at debt maturity.
 2 amount includes payment for labor claims related to fis' former item processing and remittance operations in brazil ( see note 3 to consolidated financial statements ) amounts due to brazilian venture partner.
 fis believes existing cash balances  cash flows from operations borrowing programs will provide adequate sources liquidity capital resources to meet fis 2019 expected short-term liquidity needs long-term needs for operations business  expected capital spending for next 12 months foreseeable future satisfaction of obligations and commitments.
 off-balance sheet arrangements fis not have off-balance sheet arrangements.
 item 7a.
 quantitative qualitative disclosure about market risks market risk exposed to market risks primarily from changes in interest rates foreign currency exchange rates.
 use certain derivative financial instruments  including interest rate swaps foreign currency forward exchange contracts to manage interest rate foreign currency risk.
 do not use derivatives for trading purposes to generate income or engage in speculative activity.
 interest rate risk in addition to existing cash balances cash by operating activities use fixed rate and variable rate debt to finance operations.
exposed to interest rate risk on debt obligations and related interest rate swaps.
 notes ( defined in note 13 to consolidated financial statements ) represent all fixed-rate long-term debt obligations.
 carrying value of notes was $ 1950. 0 million as of december 31 , 2012.
 fair value notes was approximately $ 2138. 2 million as of december 31 , 2012.
 potential reduction in fair value of notes from hypothetical 10 percent increase in market interest rates not material to overall fair value of debt.
 floating rate long-term debt obligations relate to borrowings under fis credit agreement ( defined in note 13 consolidated financial statements ).
 increase of 100 basis points in libor rate would increase annual debt service under fis credit agreement  after impact of interest rate swaps  by $ 9. 3 million ( based on principal amounts outstanding as of december 31, 2012 ).
 performed foregoing sensitivity analysis based on principal amount of floating rate debt as of december 31 , 2012 less principal amount of debt subject to interest rate swap converting debt into fixed rate debt.
 sensitivity analysis based solely on

| total    | less than 1 year | 1-3 years | 3-5 years | more than 5 years
----------------------------------- | -------- | ---------------- | --------- | --------- | -----------------
long-term debt                      | $ 4385.5 | $ 153.9          | $ 757.1   | $ 2274.5  | $ 1200.0
interest ( 1 )                      | 1137.6   | 200.4            | 372.9     | 288.8     | 275.5
operating leases                    | 226.6    | 55.0             | 96.2      | 46.4      | 29.0
data processing and maintenance     | 246.7    | 131.7            | 78.9      | 28.4      | 7.7
other contractual obligations ( 2 ) | 100.7    | 18.8             | 52.0      | 10.6      | 19.3
total                               | $ 6097.1 | $ 559.8          | $ 1357.1  | $ 2648.7  | $ 1531.5


at december 31 , 2012  total future minimum commitments under existing non-cancelable operat- ing leases purchase obligations were follows:.
 ( a ) includes $ 3. 6 billion to fiber supply agreements at time company 2019s 2006 transformation plan forestland sales 2008 acquis- ition of weyerhaeuser company 2019s containerboard , packaging recycling business.
 rent expense was $ 231 million , $ 205 million $ 210 million for 2012 , 2011 2010 , respectively.
 guarantees in connection with sales of businesses , property , equipment  forestlands other assets , interna- tional paper makes representations warranties relating to such businesses assets may agree to indemnify buyers tax environmental liabilities  breaches of representations warranties  other matters.
 where liabilities for matters probable subject to reasonable estimation accrued liabilities are recorded at time of sale as cost of transaction.
 environmental proceedings international paper named as potentially responsible party in environmental remediation actions under federal state laws  comprehensive environmental response , compensation and liability act ( cercla ).
 many these proceedings involve cleanup of hazardous substances at large commercial landfills waste from many different sources.
 joint several liability authorized under cercla equivalent state laws liability for cercla cleanups typically allocated among many potential responsible parties.
 remedial costs recorded in consolidated financial statements when become probable reasonably estimable.
 international paper estimated probable liability associated with these matters to be approximately $ 92 million in aggregate at december 31 , 2012.
 one matters referenced above is a closed wood treating facility in cass lake , minneso- ta.
 during 2009  with environmental site remediation action under cercla international paper submitted to epa a site remediation feasi- bility study.
in june 2011 , epa selected published proposed soil remedy at site with estimated cost of $ 46 million.
 overall remediation reserve for site is currently $ 48 mil- lion to address selection alternative for soil remediation component overall site remedy.
 in october 2011 , epa released public statement indicating final soil remedy deci- sion would be delayed.
 in unlikely event epa changes proposed soil remedy approves more expensive clean-up alternative , remediation costs could be material  sig- nificantly higher than amounts currently recorded.
 in october 2012, natural resource trustees for site provided notice to international paper other potentially responsible parties of intent to per- form natural resource damage assessment.
 premature to predict outcome of assessment or to estimate loss or range of loss , if any may be incurred.
 in addition other remediation costs typically associated with cleanup of hazardous substances at company 2019s current  closed or formerly-owned facilities  recorded as liabilities in balance sheet  totaled approximately $ 46 million at december 31 , 2012.
 completion of required remedial actions not expected to have material effect on consolidated financial statements.
 company is potentially responsible party with respect to allied paper , inc. /portage creek/ kalamazoo river superfund site ( kalamazoo river superfund site ) in michigan.
 epa asserts site is contaminated primarily by pcbs result of discharges from various paper mills along river  including paper mill formerly owned by st.
 regis.
 company is successor in interest to st.
 regis.
international paper not received orders from epa site in process of collecting information from epa other parties relative to kalamazoo river superfund site to evaluate extent its liability , if any , to site.
 accordingly pre- mature to estimate loss or range of loss with respect to this site.
 in connection with kalamazoo river superfund site  company named as a defendant by georgia-pacific consumer products lp , fort james corporation georgia pacific llc in contribution and cost recovery action for alleged pollution at kalamazoo river super- fund site.
 suit seeks contribution under cercla for $ 79 million in costs expended by plaintiffs of filing com- plaint  and for future remediation costs.
 suit alleges a mill , during allegedly owned and operated by st.
 regis , discharged pcb contaminated solids and paper residuals from paper de-inking and recycling.
 also named as defendants in suit are ncr corporation and weyerhaeuser company.
 in mid-2011  suit was

in millions                | 2013   | 2014  | 2015  | 2016  | 2017  | thereafter
-------------------------- | ------ | ----- | ----- | ----- | ----- | ----------
lease obligations          | $ 198  | $ 136 | $ 106 | $ 70  | $ 50  | $ 141
purchase obligations ( a ) | 3213   | 828   | 722   | 620   | 808   | 2654
total                      | $ 3411 | $ 964 | $ 828 | $ 690 | $ 858 | $ 2795


failure to comply with financial other covenants under our credit facilities occurrence of certain material adverse events constitute defaults allow lenders under credit facilities to accelerate maturity of all indebtedness under related agreements.
 this could have adverse impact on availability of financial assurances.
 in maturity acceleration on our credit facilities constitutes event of default under our other debt instruments  including senior notes  senior notes also subject to acceleration of maturity.
 if such acceleration to occur we not have sufficient liquidity available to repay indebtedness.
 we likely have to seek amendment under credit facilities for relief from financial covenants or repay debt with proceeds from issuance of new debt or equity  asset sales if necessary.
 we may be unable to amend credit facilities or raise sufficient capital to repay obligations in event maturities are accelerated.
 financial assurance we required to provide financial assurance to governmental agencies and other entities under environmental regulations relating to our landfill operations for capping , closure post-closure costs related to our performance under certain collection , landfill and transfer station contracts.
 we satisfy these financial assurance requirements by providing surety bonds , letters of credit  insurance policies or trust deposits.
 amount of financial assurance requirements for capping , closure and post-closure costs is determined by state environmental regulations.
 financial assurance requirements for capping  closure-closure costs may be associated with portion of landfill or entire landfill.
 generally states will require a third-party engineering specialist to determine estimated capping , closure and post- closure costs used to determine required amount of financial assurance for landfill.
 amount of financial assurance required can differ from obligation determined and recorded under u.
.
financial assurance requirements related to contract performance varies by contract.
 we required to provide financial assurance for our insurance program and collateral for certain performance obligations.
 do not expect a material increase in financial assurance requirements during 2010 , mix of financial assurance instruments may change.
 these financial instruments are issued in normal course of business not debt of our company.
 no liability for these financial assurance instruments not reflected in our consolidated balance sheets.
 we record capping , closure post-closure liabilities and self-insurance liabilities as incurred.
 underlying obligations of financial assurance instruments  in excess of those reflected in consolidated balance sheets be recorded if probable we unable to fulfill related obligations.
 do not expect this to occur.
 off-balance sheet arrangements no off-balance sheet debt or similar obligations  other than financial assurance instruments and operating leases not classified as debt.
 not guarantee any third-party debt.
 free cash flow define free cash flow not in with.
 as cash provided by operating activities less purchases of property and equipment  plus proceeds from sales of property and equipment as presented in consolidated statements of cash flows.
 our free cash flow for years ended december 31 , 2009 , 2008 and 2007 is calculated as follows ( in millions ) :.

| 2009             | 2008             | 2007
--------------------------------------------- | ---------------- | ---------------- | ----------------
cash provided by operating activities         | $ 1396.5         | $ 512.2          | $ 661.3
purchases of property and equipment           | -826.3 ( 826.3 ) | -386.9 ( 386.9 ) | -292.5 ( 292.5 )
proceeds from sales of property and equipment | 31.8             | 8.2              | 6.1
free cash flow                                | $ 602.0          | $ 133.5          | $ 374.9


liquidity and capital resources as of december 31 , 2006  principal sources of liquidity included cash , cash equivalents  sale of receivables  revolving credit facilities availability of commercial paper and other sources of financing through capital markets.
 had $ 2 billion of committed credit facilities available no borrowings outstanding as of december 31 , 2006  not make short-term borrowings under these facilities during year.
 value of outstanding undivided interest held by investors under sale of receivables program was $ 600 million as of december 31 , 2006.
 sale of receivables program subject to certain requirements including maintenance of investment grade bond rating.
 if bond rating to deteriorate could adverse impact on liquidity.
 access to commercial paper dependent on market conditions.
 deterioration of operating results or financial condition to external factors could negatively impact ability to utilize commercial paper as source of liquidity.
 liquidity through capital markets dependent on financial stability.
 at both december 31 , 2006 and 2005  had working capital deficit of approximately $ 1. 1 billion.
 working capital deficit common in industry does not indicate lack of liquidity.
 maintain adequate resources to meet daily cash requirements sufficient financial capacity to satisfy current liabilities.
 financial condition cash flows millions of dollars 2006 2005 2004.
 cash provided by operating activities 2013 higher income in 2006 generated increased cash provided by operating activities partially offset by higher income tax payments  $ 150 million in voluntary pension contributions  higher material and supply inventories  higher management incentive payments in 2006.
 higher income , lower management incentive payments in 2005 ( executive bonuses  paid in 2005 not awarded based on company performance in 2004 bonuses for professional workforce paid out in 2005 significantly reduced ) working capital performance generated higher cash from operating activities in 2005.
voluntary pension contribution $ 100 million in 2004 augmented positive year-over-year variance 2005 no pension contribution made 2005.
 improvement partially offset by cash received 2004 for income tax refunds.
 cash used in investing activities 2013 insurance settlement 2005 january west coast storm lower balances for work process decreased cash used investing activities 2006.
 higher capital investments lower proceeds from asset sales offset decrease.
 increased capital spending offset by higher proceeds from asset sales increased cash used investing activities 2005 compared to 2004.
 cash used in financing activities 2013 increase in cash financing activities resulted from lower net proceeds from equity compensation plans ( $ 189 million in 2006 compared to $ 262 million 2005 ).
 increase 2005 results from debt issuances 2004 higher debt repayments 2005.
 did not issue debt in 2005 versus $ 745 million debt issuances 2004 repaid $ 699 million debt 2005 compared to $ 588 million in 2004.
 higher outflows 2005 partially offset by higher net proceeds from equity compensation plans ( $ 262 million in 2005 compared to $ 80 million in 2004 ).

cash flowsmillions of dollars           | 2006           | 2005           | 2004
--------------------------------------- | -------------- | -------------- | --------------
cash provided by operating activities   | $ 2880         | $ 2595         | $ 2257
cash used in investing activities       | -2042 ( 2042 ) | -2047 ( 2047 ) | -1732 ( 1732 )
cash used in financing activities       | -784 ( 784 )   | -752 ( 752 )   | -75 ( 75 )
net change in cash and cash equivalents | $ 54           | $ -204 ( 204 ) | $ 450


page 74 notes five year summary ( a ) includes effects of items not considered in senior management 2019s assessment operating performance corporation 2019s business segments ( see section , 201cresults of operations 201d management 2019s discussion analysis financial condition results operations ) combined increased earnings from continuing operations before income taxes by $ 173 million , $ 113 million after tax ( $ 0. 25 per share ).
 ( b ) includes effects of items not considered in senior management 2019s assessment operating performance corporation business segments see section , 201cresults of operations 201d md&a ) combined decreased earnings from continuing operations before income taxes by $ 215 million , $ 154 million after tax ( $ 0. 34 per share ).
 includes reduction in income tax expense from closure of internal revenue service examination of $ 144 million ( $ 0. 32 per share ).
 items reduced earnings by $ 10 million after tax ( $ 0. 02 per share ).
 ( c ) includes effects of items not considered in senior management 2019s assessment operating performance corporation business segments see section  201cresults of operations 201d md&a ) combined decreased earnings from continuing operations before income taxes by $ 153 million , $ 102 million after tax ( $ 0. 22 per share ).
 ( d ) includes effects of items not considered in senior management 2019s assessment operating performance business segments combined decreased earnings from continuing operations before income taxes by $ 1112 million , $ 632 million after tax ( $ 1. 40 per share ).
 in 2002  corporation adopted fas 142 prohibits amortization of goodwill.
( e ) includes effects of items not considered in senior management 2019s assessment of operating performance of corporation business segments combined decreased earnings from continuing operations before income taxes by $ 973 million, $ 651 million after tax ( $ 1. 50 per share ).
 includes gain from disposal of business and charges for corporation 2019s exit from global telecommunications services business included in discontinued operations increased net loss by $ 1 billion ( $ 2. 38 per share ).
 f corporation defines return on invested capital ( roic ) as net income plus after-tax interest expense divided by average invested capital ( stockholders 2019 equity plus debt ) after adjusting stockholders 2019 equity by adding back minimum pension liability.
 adjustment to add back minimum pension liability is revision to calculation in 2005 corporation believes links roic to management performance.
 corporation believes reporting roic provides investors greater visibility into lockheed martin uses capital invested in operations.
 corporation uses roic to evaluate multi-year investment decisions and long-term performance measure uses roic factor in evaluating management performance under certain incentive compensation plans.
 roic not a measure of financial performance under gaap may not be defined and calculated by other companies same.
 roic not be considered in isola- tion or as alternative to net earnings as indicator of performance.
 following calculations of roic reflect revision to calculation discussed for all periods presented.
 ( in millions ) 2005 2004 2003 2002 2001.
 1 represents after-tax interest expense utilizing federal statutory rate of 35% ( 35 % ).
 2 debt consists of long-term debt  including current maturities and short-term borrowings.
 3 equity includes non-cash adjustments for other comprehensive losses primarily for additional minimum pension liability.
minimum pension liability values reflect cumulative value entries in statement stockholders equity under caption 201cminimum pension liability. 201d annual minimum pension liability adjustments to equity were : 2001 = ( $ 33 million ) ; 2002 = ( $ 1537 million ) 2003 = $ 331 million ; 2004 = ( $ 285 million ) 2005 = ( $ 105 million ).
 entries recorded in fourth quarter , value added to average equity year is cumulative impact of all prior year entries plus 20% ( % ) cur- rent year entry value.
 yearly averages calculated using balances at start year and end of each quarter.
 lockheed martin corporation

( in millions )                                   | 2005             | 2004             | 2003           | 2002           | 2001
------------------------------------------------- | ---------------- | ---------------- | -------------- | -------------- | ----------------
net earnings                                      | $ 1825           | $ 1266           | $ 1053         | $ 500          | $ -1046 ( 1046 )
interest expense ( multiplied by 65% ( 65 % ) ) 1 | 241              | 276              | 317            | 378            | 455
return                                            | $ 2066           | $ 1542           | $ 1370         | $ 878          | $ -591 ( 591 )
average debt2 5                                   | $ 5077           | $ 5932           | $ 6612         | $ 7491         | $ 8782
average equity3 5                                 | 7590             | 7015             | 6170           | 6853           | 7221
average minimum pension liability3 4 5            | 1545             | 1296             | 1504           | 341            | 6
average invested capital                          | $ 14212          | $ 14243          | $ 14286        | $ 14685        | $ 16009
return on invested capital                        | 14.5% ( 14.5 % ) | 10.8% ( 10.8 % ) | 9.6% ( 9.6 % ) | 6.0% ( 6.0 % ) | ( 3.7 ) % (  % )


shareholder return performance presentation graph compares cumulative total shareholder return on state street's common stock to cumulative total return s&p 500 index s&p financial index over five-year period.
 cumulative total shareholder return assumes investment of $ 100 in state street common stock each index on december 31 , 2007 at closing price last trading day 2007 assumes reinvestment of common stock dividends.
 s&p financial index is publicly available measure of 80 of standard & poor's 500 companies representing 26 diversified financial services companies 22 insurance companies 17 real estate companies 15 banking companies.
 comparison of five-year cumulative total shareholder return.

| 2007  | 2008 | 2009 | 2010 | 2011 | 2012
------------------------ | ----- | ---- | ---- | ---- | ---- | ----
state street corporation | $ 100 | $ 49 | $ 55 | $ 58 | $ 52 | $ 61
s&p 500 index            | 100   | 63   | 80   | 92   | 94   | 109
s&p financial index      | 100   | 45   | 52   | 59   | 49   | 63


part ii item 5.
 market for registrant 2019s common equity , related stockholder matters issuer purchases of equity securities table presents reported quarterly high and low per share sale prices of common stock on nyse for years 2015 and 2014.
 on february 19 , 2016  closing price common stock was $ 87. 32 per share reported nyse.
 as of february 19 , 2016  had 423897556 outstanding shares of common stock 159 registered holders.
 dividends as reit  must annually distribute to stockholders amount equal to least 90% ( 90 % ) of reit taxable income ( determined before deduction for distributed earnings excluding net capital gain ).
 distributed and expect to continue to distribute all or substantially all reit taxable income after consideration utilization of net operating losses ( 201d ).
 two series of preferred stock outstanding , 5. 25% ( 5. 25 % ) mandatory convertible preferred stock , series a issued in may 2014 201d dividend rate of 5. 25% ( 5. 25 % )  and 5. 50% ( 5. 50 % ) mandatory convertible preferred stock , series b ( preferred stock 201d ) issued in march 2015 dividend rate of 5. 50% ( 5. 50 % ).
 dividends payable quarterly in arrears subject to declaration by board of directors.
amount , timing frequency of future distributions at sole discretion of our board of directors dependent upon various factors  number may beyond our control , including our financial condition operating cash flows , amount required to maintain our qualification for taxation as a reit reduce income and excise taxes required to pay , limitations on distributions in existing future debt and preferred equity instruments , ability to utilize nols to offset distribution requirements  limitations on ability to fund distributions using cash generated through our trss other factors board of directors may deem relevant.
 we distributed aggregate of approximately $ 2. 3 billion to common stockholders , including dividend paid in january 2016 , primarily subject to taxation as ordinary income.
 during year ended december 31 , 2015 , declared following cash distributions:

2015                       | high     | low
-------------------------- | -------- | -------
quarter ended march 31     | $ 101.88 | $ 93.21
quarter ended june 30      | 98.64    | 91.99
quarter ended september 30 | 101.54   | 86.83
quarter ended december 31  | 104.12   | 87.23
2014                       | high     | low
quarter ended march 31     | $ 84.90  | $ 78.38
quarter ended june 30      | 90.73    | 80.10
quarter ended september 30 | 99.90    | 89.05
quarter ended december 31  | 106.31   | 90.20


reinvested for continued use in foreign operations.
 if total undistributed earnings of foreign subsidiaries remitted significant additional tax be offset by allowable foreign tax credits.
 not practical for to determine additional tax of remitting these earnings.
 in september 2007  reached settlement with united states department of justice to resolve investigation into financial relationships between major orthopaedic manufacturers and consulting orthopaedic surgeons.
 under terms settlement paid civil settlement amount of $ 169. 5 million recorded expense in amount.
 no tax benefit recorded related to settlement expense due to uncertainty tax treatment.
 during third quarter of 2008  reached agreement with u. s.
 internal revenue service ( irs ) confirming deductibility of portion of settlement payment.
 during 2008 recorded current tax benefit of $ 31. 7 million.
 in june 2006  financial accounting standards board ( fasb ) issued interpretation no.
 48 , accounting for uncertainty in income taxes 2013 interpretation of fasb statement no.
 109 , accounting for income taxes ( fin 48 ).
 fin 48 addresses determination of whether tax benefits claimed or expected to claimed on tax return should be recorded in financial statements.
 under fin 48  may recognize tax benefit from uncertain tax position only if more likely not tax position will be sustained on examination by taxing authorities based on technical merits of position.
 tax benefits recognized in financial statements from such position should be measured based on largest benefit greater than fifty percent likelihood of being realized upon ultimate settlement.
 fin 48 provides guidance on derecognition , classification  interest and penalties on income taxes accounting in interim periods requires increased disclosures.
 adopted fin 48 on january 1 , 2007.
prior to adoption of fin 48 had long term tax liability for expected settlement of federal state foreign income tax liabilities reflected net of corollary tax impact of settlements of $ 102. 1 million  separate accrued interest liability of $ 1. 7 million.
 result adoption of fin 48  required to present different components of liability on gross basis versus historical net presentation.
 adoption resulted in financial statement liability for unrecognized tax benefits decreasing by $ 6. 4 million as of january 1 , 2007.
 adoption resulted in decrease in liability reduction to retained earnings of $ 4. 8 million  reduction in goodwill of $ 61. 4 million  establishment of tax receivable of $ 58. 2 million  recorded in other current and non-current assets on consolidated balance sheet  increase in interest/penalty payable of $ 7. 9 million  all as of january 1 , 2007.
 after adoption of fin 48  unrecognized tax benefits is $ 95. 7 million as of january 1 , 2007.
 as of december 31 , 2008  unrecognized tax benefits is $ 129. 5 million.
 $ 45. 5 million would impact effective tax rate if recognized.
 $ 38. 2 million of $ 129. 5 million liability for unrecognized tax benefits relate to tax positions of acquired entities taken prior to acquisition by us.
 under fas 141 ( r ) if liabilities settled for different amounts affect income tax expense in period of reversal or settlement.
 following tabular reconciliation of total amounts of unrecognized tax benefits ( in millions ) :.
 recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense in consolidated statements of earnings  consistent with recognition of items in prior reporting periods.
as of december 31, 2007  recorded liability of $ 19. 6 million for accrued interest and penalties  $ 14. 7 million would impact our effective tax rate , if recognized.
 amount liability is $ 22. 9 million as of december 31 , 2008.
 amount , $ 17. 1 million would impact our effective tax rate  if recognized.
 expect amount tax liability for unrecognized tax benefits will change in next twelve months ; do not expect these changes significant impact on results of operations or financial position.
 u. s.
 federal statute of limitations remains open for year 2003 and onward.
 u. s.
 federal returns for years 2003 and 2004 under examination by irs.
 on july 15 , 2008  irs issued examination report.
 filed formal protest on august 15 , 2008 and requested conference with appeals office regarding disputed issues.
 appeals process could take several years do not anticipate resolution of audit significant impact on results of operations , financial position or cash flows.
 for 1999 tax year of centerpulse , acquired in october 2003  one issue remains in dispute.
 state income tax returns subject to examination for 3 to 5 years after filing respective return.
 state impact of federal changes remains subject to examination by various states for up to one year after formal notification to states.
 have various state income tax returns in process of examination , administrative appeals or litigation.
 z i m m e r h o l d i n g s n c.
2 0 0 8 f o r m 1 0 - a l r e p t notes consolidated financial statements continued ) %%transmsg*** transmitting job : c48761 pcn : 057000000%pcmsg|57 |00010|yes|no|02/24/2009 06:10|0|0|page valid no graphics color : d|

| 2008           | 2007
-------------------------------------------------------- | -------------- | ------------
balance at january 1                                     | $ 135.2        | $ 95.7
increases related to prior periods                       | 12.1           | 27.4
decreases related to prior periods                       | -32.0 ( 32.0 ) | -5.5 ( 5.5 )
increases related to current period                      | 15.8           | 21.9
decreases related to settlements with taxing authorities | -1.3 ( 1.3 )   | -1.3 ( 1.3 )
decreases related to lapse of statue of limitations      | -0.3 ( 0.3 )   | -3.0 ( 3.0 )
balance at december 31                                   | $ 129.5        | $ 135.2


stock options 2005 stock incentive plan june 2005  stockholders company approved 2005 stock incentive plan 2005 stock plan ).
 upon adoption issuance of options under company 2019s existing 2000 stock plan ceased.
 acquisition of solexa  company assumed stock options granted under 2005 solexa equity incentive plan 2005 solexa equity plan ).
 as of december 30 , 2007  aggregate up to 13485619 shares of company 2019s common stock reserved for issuance under 2005 stock plan 2005 solexa equity plan.
 2005 stock plan provides for automatic annual increase in shares reserved for issuance by lesser of 5% ( 5 % ) of outstanding shares company 2019s common stock on last day of preceding fiscal year , 1200000 shares or lesser amount as determined by company 2019s board of directors.
 as of december 30 , 2007  options to purchase 1834384 shares remained available for future grant under 2005 stock plan 2005 solexa equity plan.
 company 2019s stock option activity under all stock option plans from january 2, 2005 through december 30 , 2007 : options weighted- average exercise price.
 illumina , inc.
 notes to consolidated financial statements 2014 continued

| options              | weighted- average exercise price
-------------------------------------------- | -------------------- | --------------------------------
outstanding at january 2 2005                | 6205020              | $ 6.99
granted                                      | 2992300              | $ 10.02
exercised                                    | -869925 ( 869925 )   | $ 4.66
cancelled                                    | -1001964 ( 1001964 ) | $ 11.00
outstanding at january 1 2006                | 7325431              | $ 7.96
granted                                      | 2621050              | $ 27.24
exercised                                    | -1273119 ( 1273119 ) | $ 7.28
cancelled                                    | -314242 ( 314242 )   | $ 12.44
outstanding at december 31 2006              | 8359120              | $ 13.94
options assumed through business combination | 1424332              | $ 21.37
granted                                      | 3784508              | $ 40.64
exercised                                    | -2179286 ( 2179286 ) | $ 12.06
cancelled                                    | -964740 ( 964740 )   | $ 22.38
outstanding at december 30 2007              | 10423934             | $ 24.26


38 2015 ppg annual report form 10-k notes to consolidated financial statements 1.
 summary of significant accounting policies principles of consolidation consolidated financial statements include accounts of ppg industries , inc.
 ( 201cppg 201d or 201ccompany 201d ) all subsidiaries , both u. s.
 and non-u. s. , it controls.
 ppg owns more than 50% ( 50 % ) of voting stock of most subsidiaries it controls.
 for consolidated subsidiaries company 2019s ownership less than 100% ( 100 % ), outside shareholders 2019 interests shown as noncontrolling interests.
 investments in companies ppg owns 20% ( 20 % ) to 50% ( 50 % ) of voting stock ability exercise significant influence over operating financial policies of investee accounted for using equity method of accounting.
 ppg 2019s share of earnings or losses of equity affiliates included in consolidated statement of income ppg 2019s share of companies 2019 shareholders 2019 equity included in 201cinvestments 201d in accompanying consolidated balance sheet.
 transactions between ppg and subsidiaries eliminated in consolidation.
 use of estimates in preparation of financial statements preparation of financial statements in conformity with.
 generally accepted accounting principles requires management to make estimates assumptions affect reported amounts of assets liabilities disclosure of contingent assets liabilities at date of financial statements reported amounts of income and expenses during reporting period.
 estimates include fair value of assets acquired liabilities assumed resulting from allocation of purchase price related to business combinations consummated.
 actual outcomes could differ from estimates.
 revenue recognition company recognizes revenue when earnings process complete.
revenue from sales recognized by all operating segments when goods shipped title to inventory risk of loss passes to customer or services rendered.
 shipping and handling costs amounts billed to customers for reported in 201cnet sales 201d consolidated statement of income.
 shipping and handling costs incurred by company for delivery goods to customers included in 201ccost of sales  exclusive of depreciation and amortization 201d consolidated statement of income.
 selling , general and administrative costs amounts presented as 201cselling , general administrative 201d comprised of selling  customer service  distribution advertising costs  costs of providing corporate- wide functional support in finance  law  human resources planning.
 distribution costs pertain to movement storage of finished goods inventory at company- owned and leased warehouses  terminals other distribution facilities.
 advertising costs costs expensed as incurred totaled $ 324 million , $ 297 million and $ 235 million in 2015 , 2014 2013 .
 research and development costs  primarily of employee related costs  charged to expense as incurred.
 legal costs legal costs  include costs associated with acquisition and divestiture transactions  general litigation environmental regulation compliance patent and trademark protection other general corporate purposes charged to expense as incurred.
 foreign currency translation functional currency of significant non-u. s.
 operations is local currency.
 assets and liabilities of operations translated into u. s.
 dollars using year-end exchange rates ; income and expenses translated using average exchange rates for reporting period.
 unrealized foreign currency translation adjustments deferred in accumulated other comprehensive loss  separate component of shareholders 2019 equity.
 cash equivalents cash equivalents are highly liquid investments ( valued at cost  approximates fair value ) acquired with original maturity of three months or less.
short-term investments are highly liquid  high credit quality ( valued at cost plus accrued interest ) stated maturities greater than three months to one year.
 purchases and sales classified as investing activities in consolidated statement of cash flows.
 marketable equity securities company 2019s investment in marketable equity securities recorded at fair market value reported in current assets 201d and 201cinvestments 201d in consolidated balance sheet with changes in fair market value recorded in income for securities as trading securities and in other comprehensive income  net of tax  for available for sale securities.

( $ in millions )                        | 2015  | 2014  | 2013
---------------------------------------- | ----- | ----- | -----
research and development 2013 total      | $ 505 | $ 509 | $ 479
less depreciation on research facilities | 19    | 17    | 16
research and development net             | $ 486 | $ 492 | $ 463