notes to consolidated financial statements note 1.
 general description of business we are global cruise company.
 own royal caribbean international , celebrity cruises , pullmantur  azamara club cruises  cdf croisi e8res de france 50% ( 50 % ) joint venture interest in tui cruises.
 together six brands operate combined 41 ships as of december 31 , 2012.
 ships operate on worldwide itineraries approximately 455 destinations on all seven continents.
 basis for preparation of consolidated financial statements statements prepared in accordance with accounting principles accepted in united states of america ( 201cgaap 201d ).
 estimates required for.
 actual results could differ from estimates.
 all significant intercompany accounts transactions eliminated in consolidation.
 consolidate entities over we control evidenced by direct ownership interest of greater than 50% ( 50 % ) variable interest entities where we primary beneficiary.
 see note 6.
 other assets for further information regarding variable interest entities.
 for affiliates we do not control but significant influence on financial and operat- ing policies evidenced by direct ownership interest from 20% ( 20 % ) to 50% ( 50 % ) investment accounted for using equity method.
 consolidate operating results of pullmantur and wholly-owned subsidiary  cdf croisi e8res de france on two-month lag for timely preparation of con- solidated financial statements.
 no material events or transactions affecting pullmantur or cdf croisi e8res de france occurred during two-month lag period of november 2012 and december 2012 require disclosure or adjustment to con- solidated financial statements as of december 31 , 2012 except for impairment of pullmantur related assets  described in note 3.
 goodwill , note 4.
 intangible assets  note 5.
 property and equipment note 12.
 income taxes.
 note 2.
 summary of significant accounting policies revenues expenses deposits received on sales of passenger cruises initially recorded as customer deposit liabilities on balance sheet.
 customer deposits subsequently recognized as passenger ticket revenues with revenues from onboard other goods services associated direct costs of voyage upon completion of voyages with durations ten days or less pro-rata basis for voyages in excess of ten days.
 revenues expenses include port costs vary with guest head counts.
 amounts port costs included in passenger ticket revenues gross basis were $ 459. 8 million, $ 442. 9 million $ 398. 0 million for years 2012 , 2011 2010  respectively.
 cash and cash equivalents equivalents include cash market- able securities with original maturities of less than 90 days.
 inventories inventories consist of provisions  supplies fuel carried at lower of cost ( weighted-average ) or market.
 property and equipment stated at cost less accu- mulated depreciation and amortization.
 capitalize interest as part of cost of acquiring certain assets.
 improvement costs add value to ships capitalized as additions to ship depreciated over shorter of improvements 2019 estimated useful lives or associated ship.
 estimated cost and accumulated depreciation of replaced or refurbished ship components written off resulting losses recognized in cruise operating expenses.
 liquidated damages from shipyards late delivery of new ship recorded as reductions to cost basis of ship.
 depreciation of property and equipment computed using straight-line method over estimated useful life of asset.
 useful lives of ships are generally 30 years net of 15% ( 15 % ) projected residual value.
30-year useful life of newly constructed ships 15% ( 15 % ) residual value based on weighted-average major components ship.
 depreciation for assets under capital leases computed using shorter lease term or related asset life.
 ( see note 5.
 property and equipment. depreciation property equipment computed utilizing useful lives:.
 computer hardware software 3 20135 transportation equipment other 3 201330 leasehold improvements shorter of remaining lease term or useful life 3 201330 0494. indd 71 3/27/13 12:53 pm

| years
---------------------------------- | ---------------------------------------------------
ships                              | 30
ship improvements                  | 3-20
buildings and improvements         | 10-40
computer hardware and software     | 3-5
transportation equipment and other | 3-30
leasehold improvements             | shorter of remaining lease term or useful life 3-30


application specific accounting literature.
 for nonconsolidated proprietary tob trusts and qspe tob trusts , company recognizes residual investment on balance sheet at fair value third-party financing raised by trusts is off-balance sheet.
 following table summarizes selected cash flow information related to municipal bond securitizations for years 2008 , 2007 and 2006 : in billions of dollars 2008 2007 2006.
 cash flows received on retained interests and other net cash flows 0. 5 2014 2014 municipal investments municipal investment transactions represent partnerships finance construction and rehabilitation of low-income affordable rental housing.
 company invests in partnerships as limited partner earns return through receipt of tax credits from affordable housing investments by partnership.
 client intermediation client intermediation transactions represent range transactions provide investors with specified returns based on returns of underlying security , referenced asset or index.
 transactions include credit-linked notes and equity-linked notes.
 transactions spe obtains exposure to underlying security  referenced asset or index through derivative instrument  total-return swap or credit-default swap.
 spe issues notes to investors pay return based on specified underlying security , referenced asset or index.
 spe invests proceeds in financial asset or guaranteed insurance contract ( gic ) serves as collateral for derivative contract over term of transaction.
 company 2019s involvement in transactions includes counterparty to spe 2019s derivative instruments and investing in portion of notes issued by spe.
 in certain transactions  investor 2019s maximum risk of loss is limited company absorbs risk of loss above specified level.
 company 2019s maximum risk of loss in transactions is defined as amount invested in notes issued by spe and notional amount of risk of loss absorbed by company through separate instrument issued by spe.
derivative instrument held by company may generate receivable from spe ( for example company purchases credit protection from spe in connection with spe 2019s issuance of credit-linked note ) collateralized by assets owned by spe.
 these derivative instruments not considered variable interests under fin 46 ( r ) associated receivables not included in calculation of maximum exposure to spe.
 structured investment vehicles investment vehicles ( sivs ) are spes issue junior notes and senior debt ( medium-term notes short-term commercial paper ) to fund purchase of high quality assets.
 junior notes subject to 201cfirst loss 201d risk of sivs.
 sivs provide variable return to junior note investors based on net spread between cost to issue senior debt and return realized by high quality assets.
 company acts as manager for sivs prior to december 13 , 2007 not contractually obligated to provide liquidity facilities or guarantees to sivs.
 in response to ratings review of outstanding senior debt of sivs for possible downgrade by two ratings agencies continued reduction of liquidity in siv-related asset-backed commercial paper and medium-term note markets on december 13 , 2007  citigroup announced commitment to provide support facilities support sivs 2019 senior debt ratings.
 of commitment citigroup became sivs 2019 primary beneficiary and began consolidating these entities.
 on february 12 , 2008  citigroup finalized terms of support facilities  of commitment to provide $ 3. 5 billion of mezzanine capital to sivs in event market value of junior notes approaches zero.
 mezzanine capital facility increased by $ 1 billion to $ 4. 5 billion  additional commitment funded during fourth quarter of 2008.
 facilities rank senior to junior notes but junior to commercial paper and medium-term notes.
 facilities were at arm 2019s-length terms.
interest paid on drawn amount facilities per annum fee paid on unused portion.
 during period to november 18 , 2008 , company wrote down $ 3. 3 billion on siv assets.
 in to complete wind-down of sivs , company , in nearly cashless transaction , purchased remaining assets of sivs at fair value  with trade date of november 18 , 2008.
 company funded purchase of siv assets by assuming obligation to pay amounts due under medium-term notes issued by sivs , as medium-term notes mature.
 net funding company to fund purchase siv assets was $ 0. 3 billion.
 as of december 31 , 2008 , carrying amount of purchased siv assets was $ 16. 6 billion , of $ 16. 5 billion is classified as htm assets.
 investment funds company is investment manager for certain investment funds invest in various asset classes including private equity , hedge funds , real estate , fixed income and infrastructure.
 company earns management fee  percentage of capital under management , may earn performance fees.
 in  for some funds company has ownership interest in investment funds.
 company established investment funds as opportunities for qualified employees to invest in private equity investments.
 company acts as investment manager to these funds may provide employees with financing on recourse and non-recourse basis for portion of employees 2019 investment commitments.

in billions of dollars                                             | 2008  | 2007   | 2006
------------------------------------------------------------------ | ----- | ------ | ----
proceeds from new securitizations                                  | $ 1.2 | $ 10.5 | 2014
cash flows received on retained interests and other net cash flows | 0.5   | 2014   | 2014


skyworks solutions , inc.
 notes to consolidated financial statements 2014 maintained valuation allowance of $ 47. 0 million.
 valuation allowance comprised of $ 33. 6 million related to.
 state tax credits  $ 3. 6 million are state tax credits acquired from aati in fiscal year 2012 $ 13. 4 million related to foreign deferred tax assets.
 if benefits recognized future period valuation allowance on deferred tax assets reversed up to $ 46. 6 million income tax benefit up to $ 0. 4 million reduction to goodwill may be recognized.
 company need to generate $ 209. 0 million of future united states federal taxable income to utilize united states deferred tax assets as of september 28 , 2012.
 deferred tax assets recognized for foreign operations when management believes likely deferred tax assets recovered during carry forward period.
 company will continue to assess valuation allowance in future periods.
 as of september 28 , 2012 company has united states federal net operating loss carry forwards of approximately $ 74. 3 million  including $ 29. 5 million related to acquisition of sige , expire through 2030 and $ 28. 1 million related to acquisition of aati  expire through 2031.
 utilization of net operating losses subject to annual limitations under internal revenue code section 382 similar state income tax provisions.
 company has united states federal income tax credit carry forwards of $ 37. 8 million  $ 30. 4 million of federal income tax credit carry forwards not recorded as deferred tax asset.
 company has state income tax credit carry forwards of $ 33. 6 million  for company provided valuation allowance.
 united states federal tax credits expire through 2032.
 state tax credits relate primarily to california research tax credits can be carried forward indefinitely.
company continued expand operations increase investments in international jurisdictions.
 activities increase company 2019s earnings attributable to foreign jurisdictions.
 as of september 28 , 2012  no provision made for united states federal , state or additional foreign income taxes related to approximately $ 371. 5 million of undistributed earnings of foreign subsidiaries intended to be permanently reinvested.
 not practicable to determine united states federal income tax liability  if payable if earnings not permanently reinvested.
 company 2019s gross unrecognized tax benefits totaled $ 52. 4 million and $ 32. 1 million as of september 28, 2012 and september 30 , 2011  respectively.
 total unrecognized tax benefits at september 28, 2012 , $ 38. 8 million impact effective tax rate  if recognized.
 remaining unrecognized tax benefits not impact effective tax rate if recognized due to company 2019s valuation allowance certain positions required to be capitalized.
 no positions company anticipates could change within next twelve months.
 reconciliation of beginning and ending amount of gross unrecognized tax benefits as follows ( in thousands ) : unrecognized tax benefits.
 page 114 annual report

| unrecognized tax benefits
------------------------------------------------------------------ | -------------------------
balance at september 30 2011                                       | $ 32136
increases based on positions related to prior years                | 9004
increases based on positions related to current year               | 11265
decreases relating to settlements with taxing authorities          | 2014
decreases relating to lapses of applicable statutes of limitations | -25 ( 25 )
balance at september 28 2012                                       | $ 52380


echostar communications corporation notes consolidated financial statements - continued closing price of class a common stock last business day of each calendar quarter shares class common stock sold to employee under espp.
 espp terminate first i october 1, 2007 or date espp terminated by board of directors.
 during 2000 , 2001 2002 employees purchased approximately 58000 ; 80000 108000 shares of class a common stock through espp .
 401 ( k ) employee savings plan echostar sponsors 401 ( k ) employee savings plan ( 201c401 ( k ) plan 201d ) for eligible employees.
 voluntary employee contributions to 401 ( k ) plan matched 50% ( % ) by echostar subject maximum annual contribution echostar of $ 1000 per employee.
 matching 401 ( k ) contributions totaled approximately $ 1. 6 million , $ 2. 1 million $ 2. 4 million during years ended december 31, 2000 , 2001 2002 .
 echostar may make annual discretionary contribution to plan with approval by echostar 2019s board of directors subject to maximum deductible limit by internal revenue code of 1986  amended.
 contributions be made in cash or in echostar stock.
 forfeitures of unvested participant balances retained by 401 ( k ) plan used to fund matching discretionary contributions.
 expense recognized relating to discretionary contributions was approximately $ 7 million , $ 225 thousand $ 17 million during years ended december 31 , 2000 , 2001 2002 .
 9.
 commitments contingencies leases future minimum lease payments under noncancelable operating leases as of december 31 , 2002  as follows ( in thousands ) : year ending december 31.
rent expense for operating leases approximated $ 9 million , $ 14 million $ 16 million in 2000  2001 2002 , respectively.
 purchase commitments as of december 31 , 2002  echostar 2019s purchase commitments totaled approximately $ 359 million.
 majority commitments relate to echostar receiver systems related components.
 all purchases related to commitments expected be made during 2003.
 echostar expects to finance purchases from existing unrestricted cash balances future cash flows from operations.
 patents intellectual property many entities  including echostar 2019s competitors have may future obtain patents other intellectual property rights cover affect products services directly or indirectly related to echostar offers.
 echostar may not be aware of all patents intellectual property rights its products may potentially infringe.
 damages in patent infringement cases can include tripling of actual damages in certain cases.
 echostar cannot estimate extent to may be required future to obtain licenses respect

2003                         | $ 17274
---------------------------- | -------
2004                         | 14424
2005                         | 11285
2006                         | 7698
2007                         | 3668
thereafter                   | 1650
total minimum lease payments | 55999


.
 federal tax attribute carryovers expire after 16 to 17 years state after five to 10 years majority of international after six years with remaining international expiring in one year or indefinite carryover period.
 tax attributes carried over arise as certain jurisdictions may have tax losses or inabilities to utilize certain losses without same type taxable income.
 as of december 31 , 2013 company provided $ 23 million of valuation allowance against deferred tax assets based on management's determination tax benefits related to these assets not be realized.
 valuation allowance reduced in 2013 due to expiration of tax attributes.
 during 2013  company contributed $ 476 million to u. s.
 and international pension plans and $ 6 million to postretirement plans.
 during 2012  company contributed $ 1. 079 billion to. s.
 and international pension plans and $ 67 million to postretirement plans.
 during 2011  company contributed $ 517 million to.
 international pension plans and $ 65 million to postretirement plans.
 current income tax provision includes benefit for pension contributions ; deferred tax provision includes cost for related temporary difference.
 reconciliation of effective income tax rate.
 effective tax rate for 2013 was 28. 1 percent , compared to 29. 0 percent in 2012  decrease of 0. 9 percentage points impacted by many factors.
 factors decreased company 2019s effective tax rate included international taxes changes to geographic mix of income before taxes reinstatement of u. s.
 research and development credit in 2013  increase in domestic manufacturer 2019s deduction benefit  restoration of tax basis on certain assets for which depreciation deductions previously limited other items.
 combined factors decreased company 2019s effective tax rate by 4. 0 percentage points.
 benefit partially offset by factors that increased effective tax rate by 3.1 percentage points  related to adjustments to 3m 2019s income tax reserves for 2013 compared to 2012.
 effective tax rate for 2012 was 29. 0 percent  compared to 27. 8 percent in 2011  increase of 1. 2 percentage points  impacted by many factors.
 primary factors increased company 2019s effective tax rate year-on-year include international taxes  corporate reorganization of wholly owned international subsidiary ( benefited 2011 ) state income taxes  lower domestic manufacturer 2019s deduction  lapse of u. s.
 research and development credit.
 these other factors compared to 2011 increased 2012 effective tax rate by 2. 1 percentage points.
 factors decreased company 2019s effective tax rate year-on-year include international taxes changes to geographic mix of income before taxes adjustments to income tax reserves.
 these factors compared to 2011 decreased effective tax rate 0. 9 percentage points.
 company files income tax returns in u.
 federal jurisdiction  various states and foreign jurisdictions.
 with few exceptions company no longer subject to.
 federal , state local  or non-u. s.
 income tax examinations by tax authorities for years before 2004.
 irs completed field examination of company 2019s u.
 federal income tax returns for years 2005 through 2007 in fourth quarter of 2009.
 company protested certain irs positions these tax years entered into administrative appeals process with irs during first quarter of 2010.
 first quarter of 2010 irs completed field examination of company 2019s u.
 federal income tax return for 2008 year.
 company protested certain irs positions for 2008 entered into administrative appeals process with irs during second quarter of 2010.
 first quarter of 2011 irs completed field examination of company 2019s u. s.
 federal income tax return for 2009 year.
company protested certain irs positions for 2009 entered administrative appeals process with irs during second quarter of 2011.
 during first quarter of 2012 , irs completed field examination of company 2019s u. s.
 federal income tax return for 2010 year.
 company protested certain irs positions for 2010 entered into administrative appeals process with irs during

| 2013             | 2012             | 2011
------------------------------------------- | ---------------- | ---------------- | ----------------
statutory u.s . tax rate                    | 35.0% ( 35.0 % ) | 35.0% ( 35.0 % ) | 35.0% ( 35.0 % )
state income taxes - net of federal benefit | 0.9              | 0.9              | 0.7
international income taxes - net            | -6.3 ( 6.3 )     | -4.2 ( 4.2 )     | -4.6 ( 4.6 )
u.s . research and development credit       | -0.7 ( 0.7 )     | 2014             | -0.5 ( 0.5 )
reserves for tax contingencies              | 1.2              | -1.9 ( 1.9 )     | -1.2 ( 1.2 )
domestic manufacturer 2019s deduction       | -1.6 ( 1.6 )     | -1.2 ( 1.2 )     | -1.5 ( 1.5 )
all other - net                             | -0.4 ( 0.4 )     | 0.4              | -0.1 ( 0.1 )
effective worldwide tax rate                | 28.1% ( 28.1 % ) | 29.0% ( 29.0 % ) | 27.8% ( 27.8 % )


shares citigroup common stock.
 number of shares delivered equal cse award value divided by fair market value of common stock.
 for cses awarded to certain employees compensation structure approved by special master , 50% ( 50 % ) of shares delivered in april 2010 subject to restrictions on sale and transfer until january 20 , 2011.
 in lieu of 2010 cap awards certain retirement-eligible employees awarded cses payable in april 2010  shares delivered in april 2010 ( subject to stockholder approval ) subject to restrictions on sale or transfer lapse in four equal annual installments beginning january 20 , 2011.
 cse awards accrued as compensation expenses in year 2009 recorded as liability from january 2010 grant date until settlement date in april 2010.
 if stockholders approve delivery of citigroup stock for cse awards cse awards likely paid as new issues of common stock exception to company 2019s practice of delivering shares from treasury stock recorded liability reclassified as equity at.
 in january 2009  members management executive committee ( except ceo and cfo ) received 30% ( 30 % ) of incentive awards for 2008 as performance vesting-equity awards.
 awards vest 50% ( 50 % ) if price of citigroup common stock meets price target of $ 10. 61 , and 50% ( 50 % ) for price target of $ 17. 85 , in each case on or prior to january 14 , 2013.
 price target met only if nyse closing price equals or exceeds applicable price target for at least 20 nyse trading days within 30 consecutive nyse trading days ending on or before january 14 , 2013.
 shares not vested by such date will vest according to fraction  numerator is share price on delivery date and denominator is price target of unvested shares.
no dividend equivalents paid on unvested awards.
 fair value awards recognized as compensation expense over vesting period.
 on july 17 , 2007  committee approved management committee long-term incentive plan ( mc ltip ) ( terms shareholder-approved 1999 stock incentive plan ) participants received equity award earned based on citigroup 2019s performance against metrics peer companies and publicly- stated return on equity ( roe ) targets measured at end of each calendar year beginning with 2007.
 final expense for each three consecutive calendar years adjusted based on results roe tests.
 no awards earned for 2009, 2008 or 2007 no shares issued because performance targets not met.
 no new awards made under mc ltip since initial award in july 2007.
 cap participants in 2008 , 2007  2006 2005  fa cap participants in years 2009 could elect to receive all or part of award in stock options.
 figures in stock option program tables ( 201cstock option programs ) include options granted in lieu of cap and fa cap stock awards in years.
 summary of status of citigroup 2019s unvested stock awards at december 31 , 2009 changes during 12 months ended december 31, 2009 presented below : unvested stock awards shares weighted-average grant date fair value.
 weighted-average market value of vestings during 2009 was approximately $ 3. 64 per share.
 at december 31 , 2009 $ 1. 6 billion of total unrecognized compensation cost related to unvested stock awards net of forfeiture provision.
 cost expected to be recognized over weighted-average period of 1. 3 years.

unvested stock awards        | shares                   | weighted-average grant date fair value
---------------------------- | ------------------------ | --------------------------------------
unvested at january 1 2009   | 226210859                | $ 36.23
new awards                   | 162193923                | $ 4.35
cancelled awards             | -51873773 ( 51873773 )   | $ 26.59
deleted awards               | -568377 ( 568377 )       | $ 13.91
vested awards ( 1 )          | -148011884 ( 148011884 ) | $ 25.96
unvested at december 31 2009 | 187950748                | $ 19.53


fidelity national information services , inc.
 subsidiaries notes to consolidated financial statements - continued contingent consideration liabilities with business acquisitions must be adjusted for changes in fair value until settled.
 see note 3 for discussion of capital markets company bvba ( "capco" ) contingent consideration liability.
 ( d ) derivative financial instruments company accounts for derivative financial instruments with financial accounting standards board accounting standards codification ( 201cfasb asc 201d ) topic 815 , derivatives and hedging.
 during 2016 , 2015 2014  company engaged in g hedging activities to variable rate debt through use interest rate swaps.
 company designates interest rate swaps as cash flow hedges.
 estimated fair values of cash flow hedges determined using level 2 type measurements.
 recorded as asset or liability of company included in consolidated balance sheets in prepaid expenses other current assets  non-current assets  accounts payable accrued liabilities long-term liabilities as appropriate component of accumulated other comprehensive earnings  net of deferred taxes.
 portion of amount in accumulated other comprehensive earnings recorded in interest expense as yield adjustment as interest payments made on company 2019s term and revolving loans ( note 10 ).
 company 2019s existing cash flow hedge effective no impact on 2016 earnings due to hedge ineffectiveness.
 policy to execute such instruments with credit-worthy banks not to enter into derivative financial instruments for speculative purposes.
 as of december 31 , 2016  believe our interest rate swap counterparty will to fulfill obligations under agreement.
 company's foreign exchange risk management policy permits use of derivative instruments forward contracts options to reduce volatility in company's results of operations cash flows from foreign exchange rate fluctuations.
2016 and 2015 , company entered foreign currency forward exchange contracts to hedge foreign currency exposure to intercompany loans.
 as of december 31 , 2016 and 2015  notional amount derivatives was approximately $ 143 million and aa $ 81 million  respectively fair value was nominal.
 derivatives not designated as hedges for accounting purposes.
 use currency forward contracts to manage exposure to fluctuations in costs by variations in indian rupee ( "inr" ) ii exchange rates.
 as of december 31 , 2016  notional amount derivatives was approximately $ 7 million fair value l less than $ 1 million included in prepaid expenses and other current assets in consolidated balance sheets.
 inr forward contracts designated as cash flow hedges.
 fair value of currency forward contracts determined using currency uu exchange market rates obtained from reliable independent third party banks balance sheet date.
 fair value of forward rr contracts subject to changes in currency exchange rates.
 company has no ineffectiveness related to use of currency forward ff contracts in connection with inr cash flow hedges.
 september 2015  company entered into treasury lock hedges with total notional amount of $ 1. 0 billion  reducing risk of changes in benchmark index component of 10-year treasury yield.
 company def signated derivatives as cash flow hedges.
 october 13 , 2015  with pricing of $ 4. 5 billion senior notes companyr terminated treasury lock contracts for cash settlement payment of $ 16 million  recorded as component of other comprehensive earnings reclassified as adjustment to interest expense over ten years related interest payments hedged recognized in income.
 trade receivables summary of trade receivables , net  as of december 31 , 2016 and 2015 as follows ( in millions ) :.

| 2016       | 2015
------------------------------- | ---------- | ----------
trade receivables 2014 billed   | $ 1452     | $ 1546
trade receivables 2014 unbilled | 228        | 201
total trade receivables         | 1680       | 1747
allowance for doubtful accounts | -41 ( 41 ) | -16 ( 16 )
total trade receivables net     | $ 1639     | $ 1731


item 7.
 management 2019s discussion analysis of financial condition results of operations we are global integrated energy company with significant operations in north america africa europe.
 our operations organized into four reportable segments : 2022 exploration and production ( 201ce&p 201d ) explores for produces markets liquid hydrocarbons natural gas worldwide basis.
 2022 oil sands mining ( 201cosm 201d ) mines extracts transports bitumen from oil sands deposits in alberta canada  upgrades bitumen to produce market synthetic crude oil vacuum gas 2022 integrated gas ( 201cig 201d ) markets transports products from natural gas liquefied natural gas ( 201clng 201d ) methanol  worldwide basis.
 2022 refining , marketing & transportation ( 201crm&t 201d ) refines markets transports crude oil petroleum products  primarily in midwest  upper great plains  gulf coast southeastern regions of united states.
 certain sections of management 2019s discussion analysis of financial condition results of operations include forward-looking statements concerning trends events potentially affecting our business.
 these statements typically contain words as 201canticipates  201d 201cbelieves  201d 201cestimates 201d 201cexpects 201d 201ctargets 201d 201cplans 201d 201cprojects 201d 201ccould 201d 201cmay  201d 201cshould 201d 201cwould 201d similar words indicating future outcomes uncertain.
 in accordance with 201csafe harbor 201d provisions of private securities litigation reform act of 1995  these statements accompanied by cautionary language identifying important factors could cause future outcomes to differ materially from forward-looking statements.
hold 60 percent interest in equatorial guinea lng holdings limited ( 201cegholdings 201d ).
 discussed in note 4 to consolidated financial statements effective may 1 , 2007  ceased consolidating egholdings.
 investment accounted for using equity method of accounting.
 unless specifically noted amounts presented for integrated gas segment for periods prior to may 1, 2007 include amounts related to minority interests.
 management 2019s discussion analysis of financial condition results of operations read in conjunction with information under item 1.
 business , item 1a.
 risk factors , item 6.
 selected financial data item 8.
 financial statements supplementary data.
 overview exploration and production prevailing prices for various grades of crude oil and natural gas produce impact revenues cash flows.
 prices volatile in 2009  not as much as previous year.
 prices in 2009 lower than recent years illustrated by annual averages for key benchmark prices below.
 henry hub natural gas ( dollars per mcf ) ( a ) $ 3. 99 $ 9. 04 $ 6. 86 ( ) first-of-month price index.
 crude oil prices rose sharply through first half of 2008 result of strong global demand declining dollar  concerns about supplies crude oil geopolitical risk.
 later in 2008  crude oil prices declined as.
 dollar rebounded global demand decreased result economic recession.
 price decrease continued into 2009  reversed after dropping below $ 33. 98 in february  ending year at $ 79. 36.
 domestic crude oil production 62 percent sour contains more sulfur than light sweet.
 sour crude oil heavier than light sweet crude oil sells at discount to light sweet crude oil because of higher refining costs lower refined product values.
international crude oil production sweet generally sold relation dated brent crude benchmark.
 differential between wti and dated brent average prices narrowed to $ 0. 42 in 2009 compared to $ 2. 49 2008 $ 0. 02 in 2007.

benchmark                                       | 2009    | 2008    | 2007
----------------------------------------------- | ------- | ------- | -------
wti crude oil ( dollars per barrel )            | $ 62.09 | $ 99.75 | $ 72.41
dated brent crude oil ( dollars per barrel )    | $ 61.67 | $ 97.26 | $ 72.39
henry hub natural gas ( dollars per mcf ) ( a ) | $ 3.99  | $ 9.04  | $ 6.86


incentive compensation expense ( $ 8. 2 million ) related fringe benefit costs ( $ 1. 4 million ) higher warehousing costs due to customer requirements ( $ 2. 0 million ).
 corporate overhead year ended december 31 , 2006 increased $ 3. 1 million  or 6. 5% ( 6. 5 % )  from year december 31 2005.
 increase attributable to higher incentive compensation expense ( $ 2. 6 million ) other increased costs not individually significant.
 other expense  net  decreased $ 2. 1 million  or 20. 1% ( 20. 1 % ) for year ended december 31, 2006 compared to 2005.
 decrease due to $ 3. 1 million decrease in expenses to disposals of property  plant equipment planned capital projects.
 offsetting decrease in fixed asset disposal expense higher legal expenses ( $ 0. 5 million ) increased losses on disposals of storeroom items ( $ 0. 4 million ).
 interest expense  net income taxes interest expense net interest income increased by $ 3. 1 million  or 11. 1% ( 11. 1 % )  for year ended december 31, 2006 compared to 2005 higher interest expense on variable rate debt due to higher interest rates.
 effective tax rate was 35. 8% ( 35. 8 % ) for year ended december 31 , 2006 40. 2% ( 40. 2 % ) for year ended december 31  2005.
 lower tax rate in 2006 due to larger domestic manufacturer 2019s deduction reduction in texas state tax rate.
 both years 2006 and 2005 tax rates higher than federal statutory rate of 35. 0% ( 35. 0 % ) due to state income taxes.
year ended december 31, 2005 compared to 2004 historical results of operations pca for 31 2005 2004 below year december 31 ( in millions ) 2005 2004 change.
 net sales increased by $ 103. 6 million  or 5. 5% ( 5. 5 % )  for year december 31 2005 2004.
 net sales increased due to increased sales prices volumes of corrugated products compared to 2004.
 total corrugated products volume sold increased 4. 2% ( 4. 2 % ) to 31. 2 billion square feet in 2005 compared to 29. 9 billion square feet in 2004.
 comparable shipment-per-workday basis corrugated products sales volume increased 4. 6% ( 4. 6 % ) in 2005 from 2004.
 excluding pca 2019s acquisition of midland container in april 2005 corrugated products volume was 3. 0% ( 3. 0 % ) higher in 2005 than 2004 up 3. 4% ( 3. 4 % ) compared to 2004 shipment-per-workday basis.
 shipments-per-workday calculated by dividing total corrugated products volume year by number of workdays year.
 larger percentage increase due to 2005 had one less workday ( 250 days ) not weekend or holiday than 2004 ( 251 days ).
 containerboard sales volume to external domestic export customers decreased 12. 2% ( 12. 2 % ) to 417000 tons for year ended december 31 , 2005 from 475000 tons in 2004.

( in millions )            | for the year ended december 31 , 2005 | for the year ended december 31 , 2004 | change
-------------------------- | ------------------------------------- | ------------------------------------- | ----------------
net sales                  | $ 1993.7                              | $ 1890.1                              | $ 103.6
income from operations     | $ 116.1                               | $ 140.5                               | $ -24.4 ( 24.4 )
interest expense net       | -28.1 ( 28.1 )                        | -29.6 ( 29.6 )                        | 1.5
income before taxes        | 88.0                                  | 110.9                                 | -22.9 ( 22.9 )
provision for income taxes | -35.4 ( 35.4 )                        | -42.2 ( 42.2 )                        | 6.8
net income                 | $ 52.6                                | $ 68.7                                | $ -16.1 ( 16.1 )


company recorded equity earnings net of taxes related to ilim of $ 290 million in 2018 compared with earnings $ 183 million in 2017 $ 199 million in 2016.
 operating results 2018 included after-tax non-cash foreign exchange loss of $ 82 million compared with after-tax foreign exchange gain of $ 15 million in 2017 after-tax gain $ 25 million in 2016 primarily on remeasurement of ilim's.
 dollar denominated net debt.
 ilim delivered outstanding performance in 2018 driven by higher price realization strong demand.
 sales volumes for joint venture increased year over year for shipments to china of softwood pulp linerboard offset by decreased sales of hardwood pulp to china.
 sales volumes in russian market increased for softwood pulp and hardwood pulp decreased for linerboard.
 average sales price realizations higher in 2018 for sales of softwood pulp  hardwood pulp linerboard to china other export markets.
 average sales price realizations in russian markets increased year for all products.
 input costs higher in 2018 primarily for wood  fuel chemicals.
 distribution costs negatively impacted by tariffs inflation.
 company received cash dividends from joint venture of $ 128 million in 2018 $ 133 million in 2017 $ 58 million in first quarter of 2019 sales volumes expected to be lower than fourth quarter of 2018 due to seasonal slowdown in china fewer trading days.
 average sales prices expected to decrease for hardwood pulp softwood pulp linerboard to china.
 input costs projected to be relatively flat distribution costs expected to increase.
 equity earnings - gpip international paper recorded equity earnings of $ 46 million on 20. 5%. ) ownership position in gpip in 2018.
 company received cash dividends from investment of $ 25 million in 2018.
liquidity capital resources overview major factor in international paper 2019s liquidity capital resource planning is generation of operating cash flow  sensitive to changes in pricing demand for major products.
 changes in key cash operating costs  energy raw material mill transportation costs effect on operating cash generation focus on pricing cost controls improved cash flow generation over operating cycle.
 cash uses during 2018 focused on working capital requirements  capital spending  debt reductions returning cash to shareholders through dividends share repurchases under company's share repurchase program.
 cash provided by operating activities cash by operations including discontinued operations  totaled $ 3. 2 billion in 2018  compared with $ 1. 8 billion for 2017 $ 2. 5 billion for 2016.
 cash used by working capital components ( accounts receivable contract assets inventory less accounts payable accrued liabilities interest payable ) totaled $ 439 million in 2018 compared with cash $ 402 million in 2017 cash working $ 71 million in 2016.
 investment activities including discontinued operations  investment activities in 2018 increased from 2017  2018 included higher capital spending.
 in 2016 investment activity included purchase of weyerhaeuser's pulp business for $ 2. 2 billion in cash  purchase of holmen business for $ 57 million in cash  net of cash acquired proceeds from sale of asia packaging business of $ 108 million  net of cash divested.
 company maintains average capital spending target around depreciation and amortization levels  or modestly above due to strategic plans over economic cycle.
 capital spending was $ 1. 6 billion in 2018  or 118% ( 118 % ) of depreciation and amortization , compared with $ 1. 4 billion in 2017  or 98% ( 98 % ) of depreciation and amortization $ 1.3 billion  or 110% ( 110 % ) depreciation and amortization in 2016.
 across segments capital spending ranged from 69. 8% ( 69. 8 % ) to 132. 1% ( 132. 1 % ) in 2018.
 table shows capital spending for operations by business segment years ended december 31 , 2018  2017 2016  excluding discontinued operations of $ 111 million in 2017 $ 107 million in 2016.
 capital expenditures in 2019 expected about $ 1. 4 billion  or 104% ( 104 % ) of depreciation and amortization including approximately $ 400 million strategic investments.

in millions             | 2018   | 2017   | 2016
----------------------- | ------ | ------ | ------
industrial packaging    | $ 1061 | $ 836  | $ 832
global cellulose fibers | 183    | 188    | 174
printing papers         | 303    | 235    | 215
subtotal                | 1547   | 1259   | 1221
corporate and other     | 25     | 21     | 20
capital spending        | $ 1572 | $ 1280 | $ 1241


2000 non-employee director stock option plan ( 201cdirector stock option plan 201d ) , global payments inc.
 2011 incentive plan ( 201c2011 plan 201d ) ( collectively , 201cplans 201d ).
 made no further grants under 2000 plan after 2005 plan effective director stock option plan expired terms on february 1 , 2011.
 make no future grants under 2000 plan , 2005 plan or director stock option plan.
 2011 plan permits grants of equity to employees , officers  directors and consultants.
 total of 14. 0 million shares of common stock reserved available for issuance pursuant to awards granted under 2011 plan.
 following table summarizes share-based compensation expense and related income tax benefit recognized for share-based awards and stock options ( in thousands ) : 2016 2015 2014 ( in thousands ).
 grant various share-based awards to plans under 201clong-term incentive plan. 201d awards held in escrow released upon grantee 2019s satisfaction of conditions of award certificate.
 restricted stock restricted stock awards vest over period of time  if grantee not employed by us on vesting date shares are forfeited.
 restricted shares cannot be sold or transferred until vested.
 restricted stock granted before fiscal 2015 vests in equal installments on each first four anniversaries of grant date.
 restricted stock granted during fiscal 2015 and thereafter either vest in equal installments on each first three anniversaries of grant date or vest at end of three-year service period.
 grant date fair value of restricted stock  based on quoted market value of our common stock at closing of award date recognized as share-based compensation expense on straight-line basis over vesting period.
performance units executives granted performance units under our long-term incentive plan.
 performance units are performance-based restricted stock units after performance period convert into common shares may restricted.
 number of shares dependent upon achievement of certain performance measures during performance period.
 target number of performance units and market-based performance measures ( 201cat threshold 201d 201ctarget 201d 201cmaximum 201d ) set by compensation committee of board of directors.
 performance units converted after compensation committee certifies performance based on pre-established goals.
 performance units granted to certain executives in fiscal 2014 based on one-year performance period.
 after compensation committee certified performance results 25% ( 25 % ) of performance units converted to unrestricted shares.
 remaining 75% ( 75 % ) converted to restricted shares vest in equal installments on first three anniversaries of conversion date.
 performance units granted to certain executives during fiscal 2015 and fiscal 2016 based on three-year performance period.
 after compensation committee certifies performance results for three-year period performance units earned will convert into unrestricted common stock.
 compensation committee may set range of possible performance-based outcomes for performance units.
 depending on achievement of performance measures grantee may earn up to 200% ( 200 % ) of target number of shares.
 for awards with only performance conditions we recognize compensation expense on straight-line basis over performance period using grant date fair value of award based on number of shares expected to be earned according to level achievement of performance goals.
 if number of shares expected to be earned change during performance period cumulative adjustment to share-based compensation expense based on revised number of shares expected to be earned.
 global payments inc.
 | 2016 form 10-k annual report 2013 83

| 2016    | 2015 ( in thousands ) | 2014
-------------------------------- | ------- | --------------------- | -------
share-based compensation expense | $ 30809 | $ 21056               | $ 29793
income tax benefit               | $ 9879  | $ 6907                | $ 7126


"three factor formula" ).
 consolidated financial statements include northrop grumman management support services allocations totaling $ 32 million for year ended december 31 , 2011.
 shared services and infrastructure costs - category includes costs for information technology support  systems maintenance telecommunications procurement other shared services hii subsidiary of northrop grumman.
 costs generally allocated company using three factor formula or based on usage.
 consolidated financial statements reflect shared services infrastructure costs allocations totaling $ 80 million for year ended december 31 , 2011.
 northrop grumman-provided benefits - category includes costs for group medical  dental vision insurance 401 ( k ) savings plan pension postretirement benefits incentive compensation other benefits.
 costs generally allocated company based on specific identification of benefits provided to company employees participating in benefit plans.
 consolidated financial statements include northrop grumman- provided benefits allocations totaling $ 169 million for year ended december 31 , 2011.
 management believes methods of allocating costs are reasonable consistent with past practices in conformity with cost allocation requirements cas.
 related party sales cost sales prior to spin-off hii purchased and sold products services from to other northrop grumman entities.
 purchases of products services from affiliated entities recorded at cost  were $ 44 million for year ended december 31 , 2011.
 sales of products services to these entities were $ 1 million for year ended december 31 , 2011.
 former parent's equity in unit transactions between hii and northrop grumman prior to spin-off included in consolidated financial statements settled for cash at time transaction recorded.
 net effect of settlement transactions reflected as former parent's equity in unit in consolidated statement of changes in equity.
.
unaudited selected quarterly data quarterly financial results for years ended december 31 , 2013 2012 , set in following tables:.

( $ in millions except per share amounts ) | year ended december 31 2013 1st qtr | year ended december 31 2013 2nd qtr | year ended december 31 2013 3rd qtr | year ended december 31 2013 4th qtr
------------------------------------------ | ----------------------------------- | ----------------------------------- | ----------------------------------- | -----------------------------------
sales and service revenues                 | $ 1562                              | $ 1683                              | $ 1637                              | $ 1938
operating income ( loss )                  | 95                                  | 116                                 | 127                                 | 174
earnings ( loss ) before income taxes      | 65                                  | 87                                  | 99                                  | 143
net earnings ( loss )                      | 44                                  | 57                                  | 69                                  | 91
dividends declared per share               | $ 0.10                              | $ 0.10                              | $ 0.10                              | $ 0.20
basic earnings ( loss ) per share          | $ 0.88                              | $ 1.14                              | $ 1.38                              | $ 1.86
diluted earnings ( loss ) per share        | $ 0.87                              | $ 1.12                              | $ 1.36                              | $ 1.82


mfc 2019s operating profit 2013 increased $ 175 million 14% ( 14 % ) compared to 2012.
 increase attributable to higher operating profit $ 85 million for air missile defense programs ( thaad pac-3 ) due to increased risk retirements volume ; $ 85 million for fire control programs ( sniper ae lantirn ae apache ) due to increased risk retirements higher volume $ 75 million for tactical missile programs ( hellfire various programs ) due to increased risk retirements.
 increases partially offset by lower operating profit $ 45 million for resolution of contractual matters second quarter 2012 $ 15 million for technical services programs due to lower volume partially offset by increased risk retirements.
 adjustments not related to volume including net profit booking rate adjustments other matters approximately $ 100 million higher for 2013 compared to 2012.
 2012 to 2011 mfc 2019s net sales 2012 comparable to 2011.
 sales decreased $ 130 million due to lower volume risk retirements on services programs $ 60 million due to lower volume from fire control systems programs sniper ae lantirn ae apache ).
 decreases offset by higher net sales $ 95 million due to higher volume from tactical missile programs primarily javelin hellfire ) $ 80 million for air and missile defense programs primarily pac-3 thaad ).
 mfc 2019s operating profit 2012 increased $ 187 million  or 17% ( 17 % ) compared to 2011.
 increase attributable to higher risk retirements volume $ 95 million from tactical missile programs primarily javelin hellfire ) increased risk retirements volume $ 60 million for air and missile defense programs ( primarily thaad pac-3 ) $ 45 million from resolution of contractual matters.
 partially offsetting increases was lower risk retirements volume on various programs including $ 25 million for services programs.
adjustments not related to volume including net profit booking rate adjustments approximately $ 145 million higher for 2012 compared to 2011.
 backlog increased in 2013 mainly due to higher orders on thaad program lower sales volume new orders fire control systems programs partially offset by lower orders on technical services programs tactical missile programs.
 backlog increased in 2012 compared to 2011 mainly due to increased orders lower sales on fire control systems programs primarily lantirn ae sniper ae various services programs partially offset by lower orders higher sales volume on tactical missiles programs.
 expect mfc 2019s net sales to be flat to slightly down in 2014 compared to 2013 due to decrease in net sales on technical services programs partially offset by increase in net sales from missiles fire control programs.
 operating profit expected to decrease high single digit percentage range driven by reduction in expected risk retirements in 2014.
 operating profit margin expected to slightly decline from 2013.
 mission systems training mst business segment provides ship submarine mission combat systems ; mission systems sensors for rotary fixed-wing aircraft sea land-based missile defense systems radar systems littoral combat ships simulation training services unmanned systems technologies.
 mst 2019s major programs include aegis combat system aegis )  lcs  mh-60  tpq-53 radar system  mk-41 vertical launching system ).
 mst 2019s operating results included in millions ).
 2013 compared to 2012 mst 2019s net sales for 2013 decreased $ 426 million  or 6% ( 6 % )  compared to 2012.
 decrease primarily attributable to lower net sales of approximately $ 275 million for various ship and aviation systems programs due to lower

| 2013             | 2012           | 2011
------------------- | ---------------- | -------------- | --------------
net sales           | $ 7153           | $ 7579         | $ 7132
operating profit    | 905              | 737            | 645
operating margins   | 12.7% ( 12.7 % ) | 9.7% ( 9.7 % ) | 9.0% ( 9.0 % )
backlog at year-end | 10800            | 10700          | 10500


entergy gulf states , inc.
 management's financial discussion analysis.
 volume/weather variance resulted from increase of 1179 gwh in electricity usage in industrial sector.
 billed usage also increased 291 gwh in residential , commercial governmental sectors.
 increase in net wholesale revenue due to increase in sales volume to municipal and co-op customers.
 summer capacity charges variance due to amortization in 2003 of deferred capacity charges for summer of 2001 compared to absence amortization in 2004.
 amortization capacity charges began june 2002 ended may 2003.
 price applied to unbilled sales variance resulted from increase in fuel price applied to unbilled sales.
 fuel recovery revenues represent under-recovery of fuel charges recovered in base rates.
 entergy gulf states recorded $ 22. 6 million of provisions in 2004 for potential rate refunds.
 provisions not included in net revenue table more than offset by provisions recorded in 2003.
 gross operating revenues , fuel and purchased power expenses other regulatory credits gross operating revenues increased due to increase of $ 187. 8 million in fuel cost recovery revenues higher fuel rates in louisiana and texas jurisdictions.
 increases in volume/weather and wholesale revenue  contributed to increase.
 fuel and purchased power expenses increased due to 2022 increased recovery of deferred fuel costs due to higher fuel rates ; 2022 increases in market prices of natural gas , coal  purchased power ; 2022 increase in electricity usage.
 other regulatory credits increased due to amortization in 2003 of deferred capacity charges for summer of 2001 compared to absence amortization in 2004.
 amortization of these charges began in june 2002 ended may 2003.
2003 compared to 2002 net revenue  entergy gulf states' measure gross margin consists of operating revenues net 1 ) fuel  fuel-related  purchased power expenses 2 ) other regulatory credits.
 analysis of change in net revenue comparing 2003 to 2002.

| ( in millions )
------------------------------- | ---------------
2003 net revenue                | $ 1110.1
volume/weather                  | 26.7
net wholesale revenue           | 13.0
summer capacity charges         | 5.5
price applied to unbilled sales | 4.8
fuel recovery revenues          | -14.2 ( 14.2 )
other                           | 3.9
2004 net revenue                | $ 1149.8


table contents research and development expense ( 201cr&d 201d ) r&d increased 34% ( 34 % ) or $ 449 million to $ 1. 8 billion in 2010 compared to 2009.
 increase due primarily to increase headcount related expenses expanded r&d activities.
 contributing to increase 2010 was capitalization 2009 of software development costs of $ 71 million related to mac os x snow leopard.
 total r&d expense increased 34% ( 34 % ) during 2010 declined as percentage of net sales given 52% ( 52 % ) year-over-year increase in net sales in 2010.
 company focused investments in r&d critical to future growth competitive position related to timely development of new enhanced products central to company 2019s core business strategy.
 company expects to make further investments in r&d to remain competitive.
 r&d expense increased 20% ( 20 % ) or $ 224 million to $ 1. 3 billion in 2009 compared to 2008.
 increase due primarily to increase headcount 2009 expanded r&d activities higher stock-based compensation expenses.
 $ 71 million of software development costs capitalized related to mac os x snow leopard excluded from r&d expense during 2009 compared to $ 11 million of capitalized during 2008.
 total r&d expense increased 20% ( 20 % ) during 2009 remained flat as percentage of net sales given 14% ( 14 % ) increase in revenue in 2009.
 selling  general administrative expense ( 201csg&a 201d ) sg&a expense increased $ 1. 4 billion or 33% ( 33 % ) to $ 5. 5 billion in 2010 compared to 2009.
 increase due primarily to company 2019s expansion of retail segment higher spending on marketing advertising programs increased stock-based compensation expenses variable costs associated with growth company 2019s net sales.
 sg&a expenses increased $ 388 million or 10% ( 10 % ) to $ 4.1 billion in 2009 compared to 2008.
 increase due primarily to company 2019s continued expansion retail segment in domestic international markets higher stock-based compensation expense higher spending on marketing and advertising.
 other income and expense for three years ended september 25 , 2010 ( in millions ) total other income and expense decreased $ 171 million or 52% ( 52 % ) to $ 155 million during 2010 compared to $ 326 million and $ 620 million in 2009 and 2008 .
 overall decrease in other income expense attributable to significant declines in interest rates year- over-year partially offset by company 2019s higher cash  cash equivalents marketable securities balances.
 weighted average interest rate earned company on cash  cash equivalents marketable securities was 0. 75% ( 0. 75 % ) , 1. 43% ( 1. 43 % ) and 3. 44% ( 3. 44 % ) during 2010 , 2009 2008 .
 company incurred higher premium expenses on foreign exchange option contracts reduced total other income and expense.
 during 2010 , 2009 2008  company had no debt outstanding did not incur related interest expense.
 provision for income taxes company 2019s effective tax rates were 24% ( 24 % ), 32% ( 32 % ) and 32% ( 32 % ) for 2010 , 2009 2008 .
 effective rates differ from statutory federal income tax rate of 35% ( 35 % ).

| 2010         | 2009       | 2008
------------------------------ | ------------ | ---------- | ----------
interest income                | $ 311        | $ 407      | $ 653
other income ( expense ) net   | -156 ( 156 ) | -81 ( 81 ) | -33 ( 33 )
total other income and expense | $ 155        | $ 326      | $ 620


part ii item 5 2014market for registrant 2019s common equity related stockholder matters market information.
 common stock company currently traded on new york stock exchange ( nyse ) under symbol 2018 2018aes. 2019 2019 following tables set forth high and low sale prices for common stock as reported by nyse for periods indicated.
 price range of common stock.
 holders.
 as of march 3 , 2003  9663 record holders of company 2019s common stock , par value $ 0. 01 per share.
 dividends.
 under terms company 2019s senior secured credit facilities entered with commercial bank syndicate , company not allowed to pay cash dividends.
 company precluded from paying cash dividends on common stock under terms guaranty to utility customer in connection with aes thames project in event certain net worth liquidity tests company not met.
 ability of company 2019s project subsidiaries to declare and pay cash dividends company subject to limitations in project loans , governmental provisions other agreements entered by project subsidiaries.
 securities authorized for issuance under equity compensation plans.
 see information under caption 2018 2018securities authorized for issuance under equity compensation plans 2019 2019 of proxy statement for annual meeting of stockholders of registrant held on may 1, 2003 , information incorporated herein by reference.

2002 first quarter | high $ 17.84 | low $ 4.11 | 2001 first quarter | high $ 60.15 | low $ 41.30
------------------ | ------------ | ---------- | ------------------ | ------------ | -----------
second quarter     | 9.17         | 3.55       | second quarter     | 52.25        | 39.95
third quarter      | 4.61         | 1.56       | third quarter      | 44.50        | 12.00
fourth quarter     | 3.57         | 0.95       | fourth quarter     | 17.80        | 11.60


financial assurance we must provide financial assurance to governmental agencies other entities under environmental regulations relating to our landfill operations for capping  closure post-closure costs related to our performance under certain collection , landfill transfer station contracts.
 we satisfy these financial assurance requirements by providing surety bonds letters of credit insurance policies ( financial assurance instruments ) trust deposits  included in restricted cash marketable securities other assets in our consolidated balance sheets.
 amount of financial assurance requirements for capping  closure post-closure costs is determined by state environmental regulations.
 financial assurance requirements for capping  closure post-closure costs may be associated with portion of landfill or entire landfill.
 states require a third-party engineering specialist to determine estimated capping  closure post-closure costs to determine required amount of financial assurance for landfill.
 amount of financial assurance required can differ from obligation determined and recorded under u.
.
 amount of financial assurance requirements related to contract performance varies by contract.
 we must provide financial assurance for our insurance program and collateral for certain performance obligations.
 do not expect a material increase in financial assurance requirements during 2015  mix of financial assurance instruments may change.
 these financial assurance instruments are issued in normal course of business not considered indebtedness.
 currently no liability for financial assurance instruments  they not reflected in our consolidated balance sheets ; we record capping , closure post-closure liabilities insurance liabilities as they are incurred.
 underlying obligations of financial assurance instruments  in excess of those already reflected in consolidated balance sheets would be recorded if probable we unable to fulfill our related obligations.
 do not expect this to occur.
off-balance sheet arrangements no off-balance sheet debt or similar obligations other than operating leases financial assurances not classified as debt.
 no transactions or obligations with related parties not disclosed consolidated into reflected in reported financial position or results of operations.
 not guaranteed third-party debt.
 free cash flow define free cash flow  not measure determined in accordance with u. s.
 gaap  as cash provided by operating activities less purchases of property and equipment plus proceeds from sales of property equipment presented in consolidated statements of cash flows.
 following table calculates free cash flow for years ended december 31, 2014  2013 2012 ( in millions of dollars ) :.
 for discussion of changes in components of free cash flow read discussion regarding cash flows provided by operating activities and cash flows used in investing activities elsewhere in management 2019s discussion and analysis of financial condition results of operations.

| 2014             | 2013             | 2012
--------------------------------------------- | ---------------- | ---------------- | ----------------
cash provided by operating activities         | $ 1529.8         | $ 1548.2         | $ 1513.8
purchases of property and equipment           | -862.5 ( 862.5 ) | -880.8 ( 880.8 ) | -903.5 ( 903.5 )
proceeds from sales of property and equipment | 35.7             | 23.9             | 28.7
free cash flow                                | $ 703.0          | $ 691.3          | $ 639.0


mastercard incorporated notes to consolidated financial statements 2014 continued ) in thousands except percent and per share data ) table summarizes expected benefit payments through 2018 including payments expected paid from company 2019s general assets.
 majority of benefit payments made in form lump-sum distributions actual benefit payments may differ from expected benefits payments.
 all company 2019s.
 employees eligible to participate in defined contribution savings plan ( 201csavings plan 201d ) sponsored by company.
 savings plan allows employees to contribute portion of base compensation on pre-tax and after-tax basis in accordance with specified guidelines.
 company matches percentage of employees 2019 contributions up to certain limits.
 in 2007 and prior years company could contribute to savings plan discretionary profit sharing component linked to company performance during prior year.
 beginning in 2008  discretionary profit sharing amount related to 2007 company performance paid directly to employees as short-term cash incentive bonus than contribution to savings plan.
 company has several defined contribution plans outside of united states.
 company 2019s contribution expense related to all defined contribution plans was $ 35341 , $ 26996 and $ 43594 for 2008 , 2007 and 2006 .
 company had value appreciation program ( 201cvap 201d ) incentive compensation plan established in 1995.
 annual awards granted to vap participants from 1995 through 1998 entitled participants to net appreciation on portfolio of securities of members of mastercard international.
 in 1999  vap replaced by executive incentive plan ( 201ceip 201d ) and senior executive incentive plan ( 201cseip 201d ) 201ceip plans 201d ) see note 16 ( share based payments and other benefits ).
 contributions to vap discontinued all plan assets disbursed no vap liability remained as of december 31 , 2008.
company 2019s liability related to vap at december 31, 2007 was $ 986.
 expense ( benefit ) was $ ( 6 ) , $ ( 267 ) $ 3406 for years ended december 31, 2008  2007 2006  respectively.
 12.
 postemployment postretirement benefits company maintains postretirement plan ( 201cpostretirement plan 201d ) providing health coverage life insurance benefits for all.
 employees retirees hired before july 1 , 2007.
 company amended life insurance benefits under postretirement plan effective january 1 , 2007.
 impact net of taxes of amendment was increase of $ 1715 to accumulated comprehensive income in 2007.

2009           | $ 19766
-------------- | -------
2010           | 18182
2011           | 25518
2012           | 21029
2013           | 24578
2014 2013 2018 | 118709


performance graph shows five-year cumulative total stockholder return on applied common stock during period from october 25 , 2009 through october 26 , 2014.
 compared with cumulative total return of standard & poor 2019s 500 stock index and rdg semiconductor composite index over same period.
 comparison assumes $ 100 invested on october 25 , 2009 in applied common stock and in each foregoing indices assumes reinvestment of dividends if.
 dollar amounts in graph rounded to nearest whole dollar.
 performance represents past performance not indication of future performance.
 comparison of 5 year cumulative total return* among applied materials , inc. s&p 500 index 201cs&p 201d is registered trademark of standard & poor 2019s financial services llc  subsidiary of mcgraw-hill companies , inc.
 dividends during fiscal 2014  applied 2019s board of directors declared four quarterly cash dividends of $ 0. 10 per share each.
 during fiscal 2013  board declared three quarterly cash dividends of $ 0. 10 per share each one quarterly cash dividend of $ 0. 09 per share.
 during fiscal 2012  board declared three quarterly cash dividends of $ 0. 09 per share each and one quarterly cash dividend of $ 0. 08.
 dividends declared during fiscal 2014 , 2013 and 2012 totaled $ 487 million , $ 469 million and $ 438 million.
 applied anticipates continue to pay cash dividends quarterly basis in future declaration and amount of future cash dividends at discretion of board of directors depend on applied 2019s financial condition  results of operations  capital requirements  business conditions other factors determination that cash dividends in best interests of applied 2019s stockholders.
$ 100 invested 10/25/09 stock 10/31/09 index reinvestment dividends.
 indexes calculated month-end basis.
 rdg semiconductor composite index 183145 97 102 121 132 10/25/09 10/31/10 10/30/11 10/28/12 10/27/13 10/26/14 applied materials.
 s&p 500 semiconductor composite

| 10/25/2009 | 10/31/2010 | 10/30/2011 | 10/28/2012 | 10/27/2013 | 10/26/2014
--------------------------------- | ---------- | ---------- | ---------- | ---------- | ---------- | ----------
applied materials                 | 100.00     | 97.43      | 101.85     | 88.54      | 151.43     | 183.29
s&p 500 index                     | 100.00     | 116.52     | 125.94     | 145.09     | 184.52     | 216.39
rdg semiconductor composite index | 100.00     | 121.00     | 132.42     | 124.95     | 163.20     | 207.93


recourse and repurchase obligations discussed in note 3 loans sale servicing activities variable interest entities pnc sold commercial mortgage residential mortgage loans directly or indirectly in securitizations whole-loan sale transactions with continuing involvement.
 form continuing involvement includes recourse and loan repurchase obligations associated with transferred assets in transactions.
 commercial mortgage loan recourse obligations we originate  close service multi-family commercial mortgage loans sold to fnma under fnma 2019s dus program.
 participated in similar program with fhlmc.
 under programs assume up to one-third pari passu risk of loss on unpaid principal balances through loss share arrangement.
 at december 31 , 2011 and december 31, 2010 unpaid principal balance outstanding of loans sold participant in programs was $ 13. 0 billion and $ 13. 2 billion .
 potential maximum exposure under loss share arrangements was $ 4. 0 billion at december 31  2011 and 31  2010.
 maintain reserve for estimated losses based exposure.
 reserve for losses under programs totaled $ 47 million and $ 54 million as of december 31 , 2011 and december 31  2010 included in other liabilities on consolidated balance sheet.
 if payment required under programs contractual interest in collateral underlying mortgage loans on losses occurred value of collateral taken into account in determining our share of such losses.
 exposure and activity associated with recourse obligations reported in corporate & institutional banking segment.
 analysis of commercial mortgage recourse obligations.
 residential mortgage loan home equity repurchase obligations while residential mortgage loans sold on non-recourse basis we assume certain loan repurchase obligations associated with mortgage loans sold to investors.
loan repurchase obligations relate to situations pnc alleged to breached origination covenants representations warranties to purchasers loans in purchase sale agreements.
 residential mortgage loans covered by loan repurchase obligations include first and second-lien mortgage loans sold through agency securitizations  non-agency securitizations  whole-loan sale transactions.
 discussed in note 3 report agency securitizations consist of mortgage loans sale transactions with fnma , fhlmc  gnma  non-agency securitizations whole-loan sale transactions consist of mortgage loans sale transactions with private investors.
 historical exposure activity with agency securitization repurchase obligations primarily related to transactions with fnma and fhlmc  indemnification repurchase losses associated with fha and va-insured uninsured loans pooled in gnma securitizations minimal.
 repurchase obligation activity with residential mortgages reported in residential mortgage banking segment.
 pnc 2019s repurchase obligations include brokered home equity loans/lines sold to limited number private investors in financial services by national city prior to acquisition.
 pnc no longer engaged in brokered home equity lending business exposure under loan repurchase obligations limited to repurchases of whole-loans sold in these transactions.
 repurchase activity associated with brokered home equity loans/lines reported in non-strategic assets portfolio segment.
 loan covenants representations warranties established through loan sale agreements with various investors to assurance pnc sold loans to investors of sufficient investment quality.
aspects of covenants representations warranties include loan 2019s compliance with applicable loan criteria established by investor , including underwriting standards , delivery of required loan documents to investor or designated party  sufficient collateral valuation  validity of lien securing loan.
 result of alleged breaches of contractual obligations , investors may request pnc to indemnify against losses on certain loans or to repurchase loans.
 these investor indemnification or repurchase claims typically settled on individual loan basis through make- whole payments or loan repurchases ; , on occasion we may negotiate pooled settlements with investors.
 indemnifications for loss or loan repurchases typically occur when  after review claim we agree insufficient evidence exists to dispute investor 2019s claim breach of loan covenant and representation warranty occurred , breach not cured  effect of breach deemed to had material adverse effect on value of transferred loan.
 depending on sale agreement upon proper notice from investor  we typically respond to indemnification and repurchase requests within 60 days , final resolution of claim may take longer period time.
 with exception of sales pnc financial services group , inc.
 2013 form 10-k 199

in millions                                  | 2011     | 2010
-------------------------------------------- | -------- | ----------
january 1                                    | $ 54     | $ 71
reserve adjustments net                      | 1        | 9
losses 2013 loan repurchases and settlements | -8 ( 8 ) | -2 ( 2 )
loan sales                                   |          | -24 ( 24 )
december 31                                  | $ 47     | $ 54


no goodwill assigned to reporting units within balance sheet management segment.
 following table shows amount goodwill allocated to each reporting units and fair value as percentage of book value for reporting units in trading and investing segment ( dollars in millions ) :.
 we evaluate remaining useful lives on intangible assets each reporting period to determine events circumstances warrant revision to remaining period of amortization.
 other intangible assets have weighted average remaining useful life of 13 years.
 not recognize impairment on other intangible assets in periods presented.
 effects if actual results differ if estimates of fair value for reporting units change due to changes in business or other factors , may determine impairment charge is necessary.
 estimates of fair value are determined based on complex model using estimated future cash flows and company comparisons.
 if actual cash flows less than estimated future cash flows in annual assessment goodwill to be tested for impairment.
 estimated fair value of market making reporting unit as percentage of book value was approximately 115% ( 115 % ) ; if actual cash flows less than estimated cash flows goodwill impairment could occur in market making reporting unit in future.
 cash flows will be monitored closely to determine if further evaluation of potential impairment necessary impairment recognized timely.
 following review of order handling practices and pricing for order flow between e*trade securities llc and gi execution services , llc  regulators may initiate investigations into historical practices could subject us to monetary penalties and cease-and-desist orders could prompt claims by customers of e*trade securities llc.
 actions could affect market making and trade execution businesses could impact future cash flows result in goodwill impairment.
 intangible assets are amortized over estimated useful lives.
changes in estimated underlying revenue occur, impairment or change in remaining life may need to be recognized.
 estimates of effective tax rates , deferred taxes valuation allowance description in preparing consolidated financial statements we calculate income tax expense ( benefit ) based on interpretation of tax laws in various jurisdictions we conduct business.
 this requires us to estimate current tax obligations realizability of uncertain tax positions assess temporary differences between financial statement carrying amounts and tax basis of assets and liabilities.
 these differences result in deferred tax assets and liabilities , net amount of we show as other assets or other liabilities on consolidated balance sheet.
 must assess likelihood that deferred tax assets will be realized.
 realization not more likely not we establish valuation allowance.
 establish valuation allowance or increase allowance in reporting period generally record corresponding tax expense in consolidated statement of income ( loss ).
 conversely to circumstances indicate valuation allowance no longer necessary , portion of valuation allowance is reversed  reduces overall income tax expense.
 at december 31 , 2012 had net deferred tax assets of $ 1416. 2 million , net of valuation allowance ( on state , foreign country charitable contribution deferred tax assets ) of $ 97. 8 million.

reporting unit   | december 31 2012 goodwill | december 31 2012 % (  % ) of fair value to book value
---------------- | ------------------------- | -----------------------------------------------------
retail brokerage | $ 1791.8                  | 190% ( 190 % )
market making    | 142.4                     | 115% ( 115 % )
total goodwill   | $ 1934.2                  |


selection and disclosure of critical accounting estimates discussed with audit committee.
 following is discussion of significant assumptions , estimates  accounting policies methods used in preparation of consolidated financial statements : 2022 revenue recognition - we recognize revenue when persuasive evidence of arrangement exists  delivery of product occurred sales price fixed or determinable collectability reasonably assured.
 for company this means revenue recognized when title and risk of loss transferred to customers.
 title transfers to customers upon shipment or upon receipt at customer's location as determined by sales terms for each transaction.
 company estimates cost of sales returns based on historical experience these estimates are normally immaterial.
 2022 goodwill and non-amortizable intangible assets valuation - we test goodwill non-amortizable intangible assets for impairment annually or more frequently if events occur warrant review.
 perform annual impairment analysis in first quarter of each year.
 company has option to perform qualitative assessment for both goodwill non-amortizable intangible assets determine if likely not impairment exists, company elects to perform quantitative assessment for annual impairment analysis.
 impairment analysis involves comparing fair value of each reporting unit or non-amortizable intangible asset to carrying value.
 if carrying value exceeds fair value , goodwill or non-amortizable intangible asset considered impaired.
 to determine fair value of goodwill  primarily use discounted cash flow model supported by market approach using earnings multiples of comparable global and local companies within tobacco industry.
 at december 31 , 2015  carrying value of our goodwill was $ 7. 4 billion  related to ten reporting units  each comprised of group of markets with similar economic characteristics.
estimated fair value of ten reporting units exceeded carrying value as of december 31 , 2015.
 to determine fair value of non-amortizable intangible assets we primarily use discounted cash flow model applying relief-from-royalty method.
 concluded fair value of non-amortizable intangible assets exceeded carrying value any reasonable movement in assumptions not result in impairment.
 discounted cash flow models include management assumptions relevant for forecasting operating cash flows subject to changes in business conditions volumes prices  costs to produce discount rates estimated capital needs.
 management considers historical experience and available information at time fair values are estimated believe assumptions consistent with assumptions hypothetical marketplace participant would use.
 since march 28 , 2008  from not recorded a charge to earnings for impairment of goodwill or non-amortizable intangible assets.
 2022 marketing and advertising costs we incur certain costs to support our products through programs include advertising , marketing  consumer engagement and trade promotions.
 costs of advertising and marketing programs expensed in accordance with u. s.
.
 recognition of cost related to consumer engagement and trade promotion programs contain uncertainties due to judgment required in estimating potential performance and compliance for each program.
 for volume-based incentives provided to customers management assesses and estimates customer likelihood of customer achieving specified targets and records reduction of revenue as sales are made.
 for other trade promotions management relies on estimated utilization rates developed from historical experience.
 changes in assumptions in estimating cost of individual marketing program not result in material change in financial position , results of operations or operating cash flows.
 not made material changes in accounting methodology used to estimate our marketing programs during past three years.
 2022 employee benefit plans - as discussed in item 8 , note 13.
benefit plans to our consolidated financial statements  provide range of benefits to employees and retired employees including pensions  postretirement health care postemployment benefits ( primarily severance ).
 record annual amounts relating to these plans based on calculations specified by u. s.
 gaap.
 calculations include actuarial assumptions discount rates assumed rates of return on plan assets compensation increases mortality turnover rates health care cost trend rates.
 review actuarial assumptions annual basis make modifications to assumptions based on current rates trends when appropriate.
 permitted by u. s.
 gaap  effect of modifications generally amortized over future periods.
 believe assumptions utilized in calculating obligations under plans are reasonable based upon historical experience advice from actuaries.
 weighted-average discount rate assumptions for pensions postretirement plans are as follows:.
 anticipate assumption changes  coupled with decreased amortization of deferred losses will decrease 2016 pre-tax u. s.
 non- u. s.
 pension and postretirement expense to approximately $ 209 million compared with approximately $ 240 million in 2015 excluding

| 2015             | 2014
----------------------- | ---------------- | ----------------
u.s . pension plans     | 4.30% ( 4.30 % ) | 3.95% ( 3.95 % )
non-u.s . pension plans | 1.68% ( 1.68 % ) | 1.92% ( 1.92 % )
postretirement plans    | 4.45% ( 4.45 % ) | 4.20% ( 4.20 % )


hologic , inc.
 notes to consolidated financial statements continued ) in thousands except per share data ) acquisition and adjustments material impact on company 2019s financial position or results of operation.
 no other material changes to purchase price allocation disclosed in company 2019s form 10-k for year ended september 30 , 2006.
 part of purchase price allocation all intangible assets part of acquisition identified and valued.
 determined only customer relationship , trade name  developed technology and know how in-process research and development had separately identifiable values.
 customer relationship represents r2 2019s strong active customer base dominant market position strong partnership with large companies.
 trade name represents r2 product names company intends to continue to use.
 order backlog consists of customer orders for revenue not yet recognized.
 developed technology and know how represents marketable purchased products company continues to resell utilize enhance incorporate into company 2019s existing products.
 estimated $ 10200 of purchase price allocated to in-process research and development projects related to r2 2019s digital cad products.
 projects added direct digital algorithm capabilities new platform technology to analyze images breast density measurement.
 projects completed as planned in fiscal 2007.
 deferred income tax asset relates to tax effect of acquired net operating loss carry forwards company believes realizable partially offset by acquired identifiable intangible assets fair value adjustments to acquired inventory not deductible for tax purposes.
 acquisition of suros surgical systems , inc.
 on july 27 , 2006 company completed acquisition of suros surgical systems , inc.
 suros pursuant to agreement and plan of merger dated april 17 , 2006.
results of operations for suros included in company 2019s consolidated financial statements from date acquisition part mammography/breast care business segment.
 suros  located in indianapolis , indiana develops manufactures sells minimally invasive interventional breast biopsy technology products for biopsy tissue removal biopsy site marking.
 initial aggregate purchase price for suros of approximately $ 248100 ( subject to adjustment ) consisted of 2300 shares of hologic common stock valued at $ 106500 cash paid of $ 139000  approximately $ 2600 for acquisition related fees and expenses.
 company determined fair value of shares issued in acquisition in accordance with eitf issue no.
 99-12  determination measurement date for market price of acquirer securities issued in purchase business combination.
 components allocation of purchase price consists of approximate amounts:.
 acquisition provides for two-year earn out.
 payable in two annual cash installments equal to incremental revenue growth in suros 2019 business in two years following closing.

net tangible assets acquired as of july 27 2006 | $ 11800
----------------------------------------------- | ----------------
in-process research and development             | 4900
developed technology and know how               | 46000
customer relationship                           | 17900
trade name                                      | 5800
deferred income taxes                           | -21300 ( 21300 )
goodwill                                        | 202000
estimated purchase price                        | $ 267100


recorded liabilities for certain litigation settlements in prior periods.
 total liabilities for litigation settlements changed from december 31 , 2006 , as follows : ( in millions ).
 * note table may not sum due to rounding.
 contribution expense 2014foundation in may 2006 , with initial public offering ( 201cipo 201d )  issued 13496933 shares of class a common stock as donation to foundation incorporated in canada controlled by directors independent of us and customers.
 foundation builds on mastercard 2019s existing charitable giving commitments by support programs initiatives help children and youth to access education  understand utilize technology  develop skills to succeed in diverse global work force.
 vision of foundation is to make economy work for everybody by advancing innovative programs in microfinance youth education.
 connection with donation of class a common stock  recorded expense of $ 395 million equal to aggregate value of shares donated.
 in both 2007 and 2006  recorded expenses of $ 20 million for cash donations to foundation  completing intention ipo to donate approximately $ 40 million in cash to foundation in support of operating expenses and charitable disbursements for first four years of operations.
 may make additional cash contributions to foundation in future.
 cash and stock donations to foundation not deductible by mastercard for tax purposes.
 result of difference between financial statement and tax treatments of donations  effective income tax rate for year ended december 31 , 2006 significantly higher than effective income tax rates for 2007 and 2008.
 depreciation and amortization depreciation amortization expenses increased $ 14 million in 2008 decreased $ 2 million in 2007.
 increase in depreciation and amortization expense in 2008 primarily due to increased investments in leasehold and building improvements , data center equipment capitalized software.
decrease in depreciation amortization expense in 2007 related to certain assets becoming fully depreciated.
 depreciation amortization will increase as we invest in leasehold building improvements  data center equipment capitalized software.

balance as of december 31 2006                    | $ 477
------------------------------------------------- | ------------
provision for litigation settlements ( note 20 )  | 3
interest accretion on u.s . merchant lawsuit      | 38
payments                                          | -114 ( 114 )
balance as of december 31 2007                    | $ 404
provision for discover settlement                 | 863
provision for american express settlement         | 1649
provision for other litigation settlements        | 6
interest accretion on u.s . merchant lawsuit      | 33
interest accretion on american express settlement | 44
payments on american express settlement           | -300 ( 300 )
payments on discover settlement                   | -863 ( 863 )
payment on u.s . merchant lawsuit                 | -100 ( 100 )
other payments and accretion                      | -1 ( 1 )
balance as of december 31 2008                    | $ 1736


management 2019s discussion analysis 58 jpmorgan chase & co. /2018 form 10-k net interest income net yield excluding cib 2019s markets businesses reviewing net interest income net interest yield management reviews metrics excluding cib 2019s markets businesses metrics exclude cib 2019s markets businesses non-gaap financial measures.
 management reviews metrics assess performance firm 2019s lending investing deposit-raising activities.
 metrics exclude cib 2019s markets businesses non-markets-related net interest income net yield.
 cib 2019s markets businesses fixed income markets equity markets.
 management believes disclosure of non-markets-related net interest income net yield provides investors analysts measures analyze non-markets-related business trends firm provides comparable measure to other financial institutions primarily focused on lending investing deposit-raising activities.
 year ended december 31 , ( in millions  except rates ) 2018 2017 2016 net interest income 2013 managed basis ) $ 55687 $ 51410 $ 47292 less : cib markets net interest income c ) 3087 4630 6334 net interest income excluding cib markets $ 52600 $ 46780 $ 40958 average interest-earning assets $ 2229188 $ 2180592 $ 2101604 less : average cib markets interest-earning assets c ) 609635 540835 520307 average interest-earning assets excluding cib markets $ 1619553 $ 1639757 $ 1581297 net interest yield on average interest-earning assets 2013 managed basis 2. 50% ( 2. % ) 2. 36% ( 2. 36 % ) 2. 25% ( 2. 25 % ) net interest yield on average cib markets interest-earning assets c ) 0. 51 0. 86 1. 22 net interest yield on average interest-earning assets excluding cib markets 3. 25% ( 3.25 % ) 2. 85% ( 2. 85 % ) 2. 59% ( 2. 59 % ) interest includes effect of related hedges.
 taxable-equivalent amounts used where applicable.
 reconciliation of net interest income reported and managed basis refer to reconciliation from firm 2019s reported.
 gaap results to managed basis on page 57.
 further information on cib 2019s markets businesses refer to page 69.
 calculation of certain.
 gaap and non-gaap financial measures.
 calculated : book value per share ( 201cbvps 201d ) common stockholders 2019 equity at period-end / common shares at period-end overhead ratio total noninterest expense / total net revenue return on assets ( 201croa 201d ) reported net income / total average assets return on common equity ( 201croe 201d ) net income* / average common stockholders 2019 equity return on tangible common equity ( 201crotce 201d ) net income* / average tangible common equity tangible book value per share ( 201ctbvps 201d ) tangible common equity at period-end common shares period * represents net income applicable common equity firm reviews adjusted expense noninterest expense excluding firmwide legal expense non-gaap financial measure.
 certain credit metrics and ratios firm exclude pci loans non-gaap measures.
 management believes measures help investors understand effect items on reported results provide alternate presentation of firm 2019s performance.
 additional information on credit metrics ratios excluding pci loans refer to credit and investment risk management on pages 102-123.
 management 2019s discussion and analysis 58 jpmorgan chase & co./2018 form 10-k net interest income net yield excluding cib 2019s markets businesses reviewing net interest income yield management reviews metrics excluding cib 2019s markets businesses metrics non-gaap financial measures.
 management reviews metrics assess performance firm 2019s lending investing deposit-raising activities.
 metrics exclude cib 2019s markets businesses referred as non-markets-related net interest income net yield.
 cib 2019s markets businesses are fixed income markets equity markets.
 management believes disclosure of non-markets-related net interest income net yield provides investors analysts measures analyze non-markets-related business trends firm provides comparable measure to other financial institutions primarily focused on lending investing deposit-raising activities.
 year ended december 31 , ( in millions  except rates ) 2018 2017 2016 net interest income 2013 managed basis ) b ) $ 55687 $ 51410 $ 47292 less : cib markets net interest income ( c ) 3087 4630 6334 net interest income excluding cib markets $ 52600 $ 46780 $ 40958 average interest-earning assets $ 2229188 $ 2180592 $ 2101604 less : average cib markets interest-earning assets c ) 609635 540835 520307 average interest-earning assets excluding cib markets $ 1619553 $ 1639757 $ 1581297 net interest yield on average interest-earning assets 2013 managed basis 2. 50% ( 2. 50 % ) 2. 36% ( 2. 36 % ) 2. 25% ( 2. 25 % ) net interest yield on average cib markets interest-earning assets c ) 0. 51 0. 86 1. 22 net interest yield on average interest-earning assets excluding cib markets 3. 25% ( 3. 25 % ) 2. 85% ( 2. 85 % ) 2.59% ( 2. 59 % ) interest includes effect of related hedges.
 taxable-equivalent amounts used where applicable.
 reconciliation of net interest income reported and managed basis refer to reconciliation from firm 2019s reported.
 gaap results to managed basis on page 57.
 further information on cib 2019s markets businesses refer to page 69.
 calculation of certain.
 gaap and non-gaap financial measures.
 calculated : book value per share ( 201cbvps 201d ) common stockholders 2019 equity at period-end / common shares at period-end overhead ratio total noninterest expense / total net revenue return on assets ( 201croa 201d ) reported net income / total average assets return on common equity ( 201croe 201d ) net income* / average common stockholders 2019 equity return on tangible common equity ( 201crotce 201d ) net income* / average tangible common equity tangible book value per share ( 201ctbvps 201d ) tangible common equity at period-end / common shares period-end * represents net income applicable common equity firm reviews adjusted expense noninterest expense excluding firmwide legal expense non-gaap financial measure.
 certain credit metrics and ratios disclosed firm exclude pci loans non-gaap measures.
 management believes measures help investors understand effect items on reported results provide alternate presentation of firm 2019s performance.
 additional information on credit metrics and ratios excluding pci loans refer to credit and investment risk management on pages 102-123.

year ended december 31 ( in millions except rates )                         | 2018             | 2017             | 2016
--------------------------------------------------------------------------- | ---------------- | ---------------- | ----------------
net interest income 2013 managed basis ( a ) ( b )                          | $ 55687          | $ 51410          | $ 47292
less : cib markets net interest income ( c )                                | 3087             | 4630             | 6334
net interest income excluding cib markets ( a )                             | $ 52600          | $ 46780          | $ 40958
average interest-earning assets                                             | $ 2229188        | $ 2180592        | $ 2101604
less : average cib markets interest-earning assets ( c )                    | 609635           | 540835           | 520307
average interest-earning assets excluding cib markets                       | $ 1619553        | $ 1639757        | $ 1581297
net interest yield on average interest-earning assets 2013 managed basis    | 2.50% ( 2.50 % ) | 2.36% ( 2.36 % ) | 2.25% ( 2.25 % )
net interest yield on average cib markets interest-earning assets ( c )     | 0.51             | 0.86             | 1.22
net interest yield on average interest-earning assets excluding cib markets | 3.25% ( 3.25 % ) | 2.85% ( 2.85 % ) | 2.59% ( 2.59 % )