long term.
  we focused on building relationships with large multinational carriers as airtel , telef f3nica s. a.
 vodafone group plc.
 believe consistent carrier investments in their networks across our international markets position us to generate meaningful organic revenue growth.
 in emerging markets  as ghana , india  nigeria uganda , wireless networks less advanced than in united states , initial voice networks continue deployed in underdeveloped areas.
 majority of consumers in these markets still utilize basic wireless services  predominantly on feature phones  advanced device penetration remains low.
 in more developed urban locations these markets early-stage data network deployments are underway.
 carriers focused on completing voice network build-outs while investing in initial data networks as wireless data usage and smartphone penetration customer bases accelerate.
 in markets with rapidly evolving network technology  south africa most countries in latin america where we do business initial voice networks  for most already been built out  carriers focused on 3g network build outs with select investments in 4g technology.
 consumers in these regions increasingly adopting smartphones other advanced devices usage of bandwidth-intensive mobile applications growing materially.
 recent spectrum auctions in these rapidly evolving markets allowed incumbent carriers to accelerate data network deployments enabled new entrants to begin initial investments in data networks.
 smartphone penetration and wireless data usage in these markets growing rapidly  requires carriers continue to invest in networks in to maintain and augment quality of service.
 in markets with more mature network technology  as germany  carriers focused on deploying 4g data networks to account for rapidly increasing wireless data usage customer base.
higher smartphone advanced device penetration higher per capita data usage , carrier investment in networks is focused on 4g coverage and capacity.
 believe network technology migration seen in united states , led to denser networks meaningful new business commencements for over years , will be replicated in less advanced international markets.
 we expect to to leverage our extensive international portfolio of approximately 60190 communications sites relationships built with carrier customers to drive sustainable , long-term growth.
 holistic master lease agreements with tenants provide for consistent , long-term revenue reduction in likelihood of churn.
 holistic master lease agreements build augment strong strategic partnerships with tenants reduced collocation cycle times , providing tenants with ability to rapidly efficiently deploy equipment on our sites.
 property operations new site revenue growth.
 during year ended december 31 , 2015 , grew our portfolio of communications real estate through acquisition and construction of approximately 25370 sites.
 in majority of asia , emea latin america markets , acquisition or construction of new sites resulted in increases in tenant and pass- through revenues ( as ground rent or power and fuel costs ) and expenses.
 continue to evaluate opportunities to acquire communications real estate portfolios , domestically and internationally , to determine they meet our risk-adjusted hurdle rates can integrate them into existing portfolio.
 property operations expenses.
 direct operating expenses incurred by property segments include direct site level expenses consist primarily of ground rent power and fuel costs , some or all of may be passed through to tenants , property taxes , repairs and maintenance.
 these segment direct operating expenses exclude all segment and corporate selling , general , administrative and development expenses , aggregated into one line item entitled selling , general , administrative and development expense in consolidated statements of operations.
 in general , our property segments 2019 selling , general  administrative development expenses do not significantly increase adding incremental tenants to legacy sites typically increase only modestly year-over-year.
 leasing additional space to new tenants on legacy sites provides significant incremental cash flow.
 we may   incur additional segment

new sites ( acquired or constructed ) | 2015  | 2014 | 2013
------------------------------------- | ----- | ---- | ----
u.s .                                 | 11595 | 900  | 5260
asia                                  | 2330  | 1560 | 1260
emea                                  | 4910  | 190  | 485
latin america                         | 6535  | 5800 | 6065


bhge 2017 form 10-k | 27 short term.
 we view long term economics of lng industry as positive given outlook for supply and demand.
 2022 refinery , petrochemical and industrial projects : in refining  believe large  complex refineries should gain advantage in competitive , oversupplied landscape in 2018 as industry globalizes refiners position to meet local demand secure export potential.
 in petrochemicals , continue see healthy demand and cost-advantaged supply driving projects forward in 2018.
 industrial market continues to grow as outdated infrastructure is replaced  policy changes effect power decentralized.
 continue see growing demand across these markets in 2018.
 other segments in portfolio correlated with industrial metrics digital solutions business.
 believe our portfolio is uniquely positioned to compete across value chain deliver unique solutions for customers.
 remain optimistic about long-term economics of industry but continuing to operate with flexibility given expectations for volatility changing assumptions in near term.
 in 2016  solar and wind net additions exceeded coal and gas for first time continued throughout 2017.
 governments may change or may not continue incentives for renewable energy additions.
 in long term  renewables' cost decline may accelerate to compete with new-built fossil capacity do not anticipate significant impacts to business in foreseeable future.
 despite near-term volatility  long-term outlook for industry remains strong.
 believe world 2019s demand for energy will continue to rise supply of energy will continue to increase in complexity requiring greater service intensity more advanced technology from oilfield service companies.
 remain focused on delivering innovative cost-efficient solutions deliver step changes in operating and economic performance for customers.
business environment following discussion analysis summarizes significant factors affecting our results of operations  financial condition liquidity position of for year ended december 31 , 2017 , 2016 2015  should be read in conjunction with consolidated combined financial statements related notes of company.
 amounts reported in millions in graphs report are computed based on amounts in hundreds.
 sum of components reported in millions may not equal total amount reported in millions due to rounding.
 we operate in more than 120 countries helping customers find evaluate  drill  produce transport process hydrocarbon resources.
 revenue predominately generated from sale of products services to major national independent oil and natural gas companies worldwide dependent on spending by customers for oil natural gas exploration  field development production.
 spending driven by factors  including customers' forecasts of future energy demand supply  access to resources to develop produce oil natural gas  ability to fund capital programs impact of new government regulations expectations for oil and natural gas prices key driver of cash flows.
 oil and natural gas prices oil gas prices summarized in table below as averages of daily closing prices during each periods indicated.
 brent oil prices ( $ /bbl ) ( 1 ) $ 54. 12 $ 43. 64 $ 52. 32 wti oil prices ( $ /bbl ) ( 2 ) 50. 80 43. 29 48. 66 natural gas prices ( $ /mmbtu ) ( 3 ) 2. 99 2. 52 2. 62 ( 1 ) energy information administration ( eia ) europe brent spot price per barrel

| 2017    | 2016    | 2015
------------------------------------- | ------- | ------- | -------
brent oil prices ( $ /bbl ) ( 1 )     | $ 54.12 | $ 43.64 | $ 52.32
wti oil prices ( $ /bbl ) ( 2 )       | 50.80   | 43.29   | 48.66
natural gas prices ( $ /mmbtu ) ( 3 ) | 2.99    | 2.52    | 2.62


item 7.
 management 2019s discussion analysis of financial condition results of operations we are international energy company with operations in u. s. , canada africa middle east europe.
 operations organized into three reportable segments : 2022 e&p explores for produces markets liquid hydrocarbons natural gas worldwide basis.
 2022 osm mines extracts transports bitumen from oil sands deposits in alberta  canada , upgrades bitumen to produce market synthetic crude oil vacuum gas oil.
 2022 ig produces markets products from natural gas  lng methanol  eg.
 certain sections of management 2019s discussion analysis of financial condition results of operations include forward-looking statements concerning trends events potentially affecting business.
 statements typically contain words 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  statements accompanied by cautionary language identifying important factors not all could cause future outcomes to differ from forward-looking statements.
 for additional risk factors affecting business  see item 1a.
 risk factors in annual report on form 10-k.
 management 2019s discussion analysis of financial condition results of operations should be read in conjunction with information under item 1.
 business , item 1a.
 risk factors item 8.
 financial statements supplementary data found in annual report on form 10-k.
spin-off downstream business june 30, 2011 spin-off marathon 2019s downstream business completed creating two independent energy companies : marathon oil and mpc.
 marathon shareholders close of business record date june 27 , 2011 received one share mpc common stock for every two shares marathon common stock held.
 fractional shares mpc common stock not distributed fractional share mpc common stock otherwise issuable to marathon shareholder sold in open market shareholder 2019s behalf shareholder received cash payment fractional share.
 private letter tax ruling received june 2011 irs affirmed tax-free nature of spin-off.
 activities related downstream business treated as discontinued operations all periods presented annual report on form 10-k ( see item 8.
 financial statements supplementary data 2014note 3 consolidated financial statements for additional information ).
 overview 2013 market conditions exploration production prevailing prices for various grades crude oil natural gas impact revenues cash flows.
 prices crude oil volatile recent years.
 2011  crude prices increased over 2010 levels increases brent averages outstripping wti.
 2010  both wti and brent crude oil monthly average prices remained in $ 75 to $ 85 per barrel range.
 crude oil prices reached low $ 33. 98 in february 2009  following global demand declines economic recession recovered quickly ending 2009 at $ 79. 36.
 following table lists benchmark crude oil and natural gas price annual averages for past three years.
 wti crude oil ( dollars per bbl ) $ 95. 11 $ 79. 61 $ 62. 09 brent ( europe ) crude oil ( dollars per bbl ) 111. 26 79. 51 61. 49 henry hub natural gas ( dollars per mmbtu ) ( a ) $ 4. 04 $ 4. 39 $ 3. 99 ( a ) settlement date average.
 u. s.
 crude oil production 58 percent sour in 2011 68 percent in 2010.
 sour crude contains more sulfur than light sweet.
 sour crude oil heavier than light sweet crude oil sells at discount to light sweet crude oil higher refining costs lower refined product values.
 international crude oil production relatively sweet generally sold in relation to brent crude benchmark.
 differential between wti and brent average prices widened in 2011 to $ 16. 15 comparison differentials less than $ 1. 00 in 2010 and 2009.

benchmark                                         | 2011    | 2010    | 2009
------------------------------------------------- | ------- | ------- | -------
wti crude oil ( dollars per bbl )                 | $ 95.11 | $ 79.61 | $ 62.09
brent ( europe ) crude oil ( dollars per bbl )    | 111.26  | 79.51   | 61.49
henry hub natural gas ( dollars per mmbtu ) ( a ) | $ 4.04  | $ 4.39  | $ 3.99


notes to consolidated financial statements union pacific corporation and subsidiary companies for this report  unless context otherwise requires references to 201ccorporation 201d , 201ccompany 201d , 201cupc 201d , 201cwe 201d , 201cus 201d  201cour 201d mean union pacific corporation and subsidiaries  including union pacific railroad company  separately referred to as 201cuprr 201d or 201crailroad 201d.
 1.
 nature of operations segmentation 2013 we are class i railroad operating in u. s.
 network includes 32236 route miles  linking pacific coast gulf coast ports with midwest eastern u. s.
 gateways providing several corridors to key mexican gateways.
 own 26039 miles operate on remainder to trackage rights or leases.
 serve western two-thirds of country maintain coordinated schedules with other rail carriers for handling of freight to from atlantic coast , pacific coast  southeast southwest , canada  mexico.
 export and import traffic moved through gulf coast pacific coast ports across mexican and canadian borders.
 railroad , along with subsidiaries rail affiliates is our one reportable operating segment.
 analyze revenue by commodity group treat financial results of railroad as one segment due to integrated nature of rail network.
 operating revenues primarily derived from contracts with customers for transportation of freight from origin to destination.
 effective january 1 , 2018  company reclassified six commodity groups into four : agricultural products , energy , industrial , premium.
 following table represents disaggregation of our freight and other revenues:.
 revenues principally derived from customers domiciled in u. s.ultimate points of origination destination for products we transport outside u. s.
 commodity groups includes revenue from shipments to mexico.
 included in table freight revenues from mexico business amounted to $ 2. 5 billion in 2018 $ 2. 3 billion in 2017 $ 2. 2 billion in 2016.
 basis presentation 2013 consolidated financial statements presented in accordance with accounting principles accepted in u. s.
 codified in financial accounting standards board ( fasb ) accounting standards codification ( asc ).
.
 significant accounting policies principles of consolidation 2013 consolidated financial statements include accounts of union pacific corporation subsidiaries.
 investments in affiliated companies ( 20% ( 20 % ) to 50% ( 50 % ) owned ) accounted for using equity method accounting.
 intercompany transactions eliminated.
 no less than majority-owned investments require consolidation under variable interest entity requirements.
 cash  cash equivalents restricted cash 2013 cash equivalents consist of investments with original maturities of three months or less.
 amounts in restricted cash represent required set aside by contractual agreement.

millions                  | 2018    | 2017    | 2016
------------------------- | ------- | ------- | -------
agricultural products     | $ 4469  | $ 4303  | $ 4209
energy                    | 4608    | 4498    | 3715
industrial                | 5679    | 5204    | 4964
premium                   | 6628    | 5832    | 5713
total freight revenues    | $ 21384 | $ 19837 | $ 18601
other subsidiary revenues | 881     | 885     | 814
accessorial revenues      | 502     | 458     | 455
other                     | 65      | 60      | 71
total operating revenues  | $ 22832 | $ 21240 | $ 19941


operating expenses were $ 2. 9 billion  increase 8% ( 8 % ) over 2000.
 adjusted for formation citistreet  operating expenses grew 10% ( 10 % ).
 expense growth in 2001 10% ( 10 % ) lower than comparable 20% ( 20 % ) expense growth for 2000 compared to 1999.
 state street reduced growth rate expenses as revenue growth slowed during latter half 2000 early 2001.
 expense growth in 2001 reflects higher expenses for salaries employee benefits information systems and communications.
 o p e r a t i n g e x p e n s e s ( dollars in millions ) 2001 2000 1999 change adjusted change 00-01 ( 1 ).
 ( 1 ) 2000 results adjusted for formation citistreet expenses related to salaries employee benefits increased $ 139million in 2001  or $ 163millionwhen.
 adjusted increase reflects 2100 additional staff support large client wins new business from acquisitions.
 expense increase offset by lower incentive-based compensation.
 information systems and communications expense was $ 365 million in 2001 up 20% ( 20 % ) from prior year.
 adjusted for formation citistreet information systems communications expense increased 22% ( 22 % ).
 growth reflects investment in software hardware technology costs associated with increased staffing levels.
 expenses related to transaction processing services were $ 247 million down $ 21 million  or 8% ( 8 % ).
 expenses volume related include external contract services  subcustodian fees  brokerage services fees related to securities settlement.
 lower mutual fund shareholder activities  lower subcustodian fees from decline in asset values lower transaction volumes decline.
 occupancy expensewas $ 229million  up 15% ( 15 % ).
 increase due to expenses support state street 2019s global growth  expenses for leasehold improvements other operational costs.
expenses were $ 363 million up $ 17 million or 5% ).
 expenses include professional services advertising sales promotion internal operational expenses.
 increase over prior year due to $ 21 million increase in amortization of goodwill primarily from acquisitions in 2001.
 recent accounting pronouncements goodwill amortization expense will be eliminated in 2002.
 state street recorded approximately $ 38 million or $. 08 per share after tax of goodwill amortization expense in 2001.
 state street 2019s cost containment efforts reduced discretionary spending partially offset increase in other expenses.
 state street corporation 9

( dollars in millions )                | 2001   | 2000   | 1999   | change 00-01 | adjusted change 00-01 ( 1 )
-------------------------------------- | ------ | ------ | ------ | ------------ | ---------------------------
salaries and employee benefits         | $ 1663 | $ 1524 | $ 1313 | 9% ( 9 % )   | 11% ( 11 % )
information systems and communications | 365    | 305    | 287    | 20           | 22
transaction processing services        | 247    | 268    | 237    | -8 ( 8 )     | -7 ( 7 )
occupancy                              | 229    | 201    | 188    | 15           | 16
other                                  | 363    | 346    | 311    | 5            | 7
total operating expenses               | $ 2867 | $ 2644 | $ 2336 | 8            | 10
number of employees                    | 19753  | 17604  | 17213  | 12           |


2022 through u. s.
 attorney 2019s office for district of maryland , office of inspector general ( 201coig 201d ) for small business administration ( 201csba 201d ) served subpoena on pnc requesting documents concerning pnc 2019s relationship with , including sba-guaranteed loans made through  broker jade capital investments , llc ( 201cjade 201d ) , information regarding other pnc-originated sba guaranteed loans to businesses in state of maryland , commonwealth of virginia , and washington , dc.
 certain jade loans identified in indictment and subsequent superseding indictment charging persons associated with jade with conspiracy to commit bank fraud , violations of federal bank fraud statute , and money laundering.
 pnc cooperating with u. s.
 attorney 2019s office for district of maryland.
 practice to cooperate fully with regulatory and governmental investigations , audits other inquiries , including those described in this note 23.
 in addition to proceedings other matters, pnc and persons to whom we may have indemnification obligations , normal course of business subject to other pending and threatened legal proceedings in claims for monetary damages and other relief asserted.
 do not anticipate  ultimate aggregate liability , if arising out of such other legal proceedings will have material adverse effect on our financial position.
 cannot now determine whether not any claims asserted against us or others to we indemnification obligations , in proceedings or other matters described or otherwise will have material adverse effect on our results of operations in future reporting period  will depend on amount of loss resulting from claim and amount of income otherwise reported for reporting period.
note 24 commitments guarantees for additional information visa indemnification other obligations to provide indemnification including to current former officers  directors employees agents of pnc companies acquired.
 note 24 commitments guarantees equity funding other commitments unfunded commitments at december 31 , 2013 included private equity investments of $ 164 million.
 standby letters of credit issue standby letters credit have risk participations in standby letters of credit issued by other financial institutions support obligations customers to third parties insurance requirements facilitation of transactions involving capital markets product execution.
 net outstanding standby letters of credit internal credit ratings : table 151 : net outstanding standby letters of credit dollars in billions december 31 december 31 net outstanding standby letters of credit ( a ) $ 10. 5 $ 11. 5 internal credit ratings ( percentage of portfolio ) :.
 ) amounts above exclude participations in standby letters of credit of $ 3. 3 billion and $ 3. 2 billion to other financial institutions as of december 31 , 2013 december 31, 2012 .
 amounts above include $ 6. 6 billion $ 7. 5 billion support remarketing programs at december 31 , 2013 december 31 , 2012 .
 ( b ) indicates expected risk of loss low.
 ( c ) indicates higher degree of risk of default.
 if customer fails to meet financial performance obligation to third party terms contract or need to support remarketing program upon draw by beneficiary subject terms letter of credit obligated to make payment them.
 standby letters of credit outstanding on december 31 , 2013 had terms ranging from less than 1 year to 6 years.
 as of december 31 , 2013  assets of $ 2. 0 billion secured certain specifically identified standby letters of credit.
portion of remaining standby letters of credit issued on behalf of specific customers secured by collateral or guarantees secure customers 2019 other obligations to us.
 carrying amount liability for our obligations related to standby letters of credit participations was $ 218 million at december 31 , 2013.
 standby bond purchase agreements and other liquidity facilities to support municipal bond obligations.
 at december 31 , 2013 aggregate commitments under these facilities was $ 1. 3 billion.
 also enter into certain other liquidity facilities to support individual pools of receivables acquired by commercial paper conduits.
 no commitments under these facilities at december 31 , 2013.
 212 pnc financial services group , inc.
 2013 form 10-k

dollars in billions                                        | december 31 2013 | december 312012
---------------------------------------------------------- | ---------------- | ---------------
net outstanding standby letters of credit ( a )            | $ 10.5           | $ 11.5
internal credit ratings ( as a percentage of portfolio ) : |                  |
pass ( b )                                                 | 96% ( 96 % )     | 95% ( 95 % )
below pass ( c )                                           | 4% ( 4 % )       | 5% ( 5 % )


theme parks segment 2013 operating costs expenses operating costs expenses consist primarily of theme park operations includ repairs maintenance administrative expenses ; food  beverage merchandise costs labor costs sales marketing costs.
 theme parks operating costs expenses increased in 2015 2014 due to additional costs at orlando hollywood theme parks newer attractions fast fur- ious 2122 2014 supercharged 2122 studio tour hollywood 2015 wizarding world of harry potter 2122 2014 diagon alley 2122 orlando 2014 increases in food  beverage merchandise costs associated with increases in attendance both years.
 operating costs expenses increased in 2015 due to $ 89 million operating costs expenses attributable to universal studios japan $ 22 million transaction costs related to development of theme park in china.
 nbcuniversal headquarters  other eliminations headquarters other operating costs expenses nbcuniversal businesses include overhead  personnel costs costs associated with corporate initiatives.
 operating costs expenses increased in 2015 and 2014 primarily due to higher employee-related costs including severance costs in corporate other results of operations year ended december 31 ( in millions ) 2015 2014 2013 % ( % ) change 2014 to 2015 % ( % ) change 2013 to 2014.
 corporate other 2013 revenue other revenue relates to comcast spectacor  owns philadelphia flyers wells fargo center arena in philadelphia , pennsylvania operates arena management-related businesses.
 other revenue increased in 2015 and 2014 primarily due to increases in revenue from food other services associated with new contracts by comcast spectacor businesses.
 increase in other revenue in 2014 due to increase in revenue with newly acquired businesses.
corporate other 2013 operating costs and expenses operating costs expenses include overhead  personnel costs costs corporate initiatives branding  operating costs expenses associated with comcast spectacor.
 excluding transaction costs with time warner cable merger related divestiture trans- actions of $ 178 million and $ 237 million in 2015 and 2014  respectively  corporate other operating costs and expenses increased 19% ( 19 % ) in 2015.
 primarily due to $ 56 million expenses related to contract settlement , increase in expenses related to corporate strategic business initiatives increase in operating costs expenses at comcast spectacor associated with new contracts by one its businesses.
 corporate other operating costs and expenses increased in 2014 primarily due to $ 237 million transaction-related costs with time warner cable merger related divest- iture transactions  increase in operating costs expenses associated with new contracts by one comcast spectacor businesses.
 comcast 2015 annual report on form 10-k 60

year ended december 31 ( in millions )              | 2015           | 2014           | 2013           | % (  % ) change 2014 to 2015 | % (  % ) change 2013 to 2014
--------------------------------------------------- | -------------- | -------------- | -------------- | ---------------------------- | ----------------------------
revenue                                             | $ 766          | $ 709          | $ 600          | 8.0% ( 8.0 % )               | 18.1% ( 18.1 % )
operating costs and expenses                        | 1664           | 1487           | 1089           | 11.9                         | 36.5
operating loss before depreciation and amortization | $ -898 ( 898 ) | $ -778 ( 778 ) | $ -489 ( 489 ) | ( 15.5 ) % (  % )            | ( 59.1 ) % (  % )


exercise for stock options exercised at period end for outstanding stock options less applicable exercise price.
 company issued new shares to satisfy exercised stock options.
 compensation expense company recorded $ 43 million  $ 34 million $ 44 million expense related to stock awards for years ended december 31 , 2015  2014  2013 .
 company recorded $ 17 million  $ 13 million $ 17 million as tax benefit related to stock awards and stock options for years ended december 31  2015 2014 2013.
 company recognized tax benefits for years ended december 31  2015  2014 2013  of $ 41 million , $ 53 million  $ 32 million  from issuance of stock in settlement of stock awards  $ 4 million , $ 5 million  $ 4 million for years ended december 31 , 2015  2014  2013  from exercise of stock options.
 unrecognized compensation expense as of december 31 , 2015 company had less than $ 1 million unrecognized compensation expense associated with rsrs granted in 2015 and 2014  recognized over weighted average period of 1. 0 year  $ 25 million of unrecognized expense associated with rpsrs granted in 2015 , 2014  2013  recognized over weighted average period of 0. 6 years.
 as of december 31 , 2015 company had no unrecognized compensation expense related to stock options.
 compensation expense for stock options fully recognized as of december 31 , 2013.
.
 unaudited selected quarterly data quarterly financial results for years ended december 31 , 2015 and 2014  set forth in following tables:.
 second quarter of 2015  company recorded $ 59 million goodwill impairment charge.
 during same period company recorded $ 136 million of operating income result of aon settlement.
( 2 ) fourth quarter 2015 company recorded $ 16 million goodwill impairment $ 27 million intangible asset impairment charges.

( $ in millions except per share amounts ) | year ended december 31 2015 1st qtr | year ended december 31 2015 2nd qtr ( 1 ) | year ended december 31 2015 3rd qtr | year ended december 31 2015 4th qtr ( 2 )
------------------------------------------ | ----------------------------------- | ----------------------------------------- | ----------------------------------- | -----------------------------------------
sales and service revenues                 | $ 1570                              | $ 1745                                    | $ 1800                              | $ 1905
operating income ( loss )                  | 156                                 | 269                                       | 200                                 | 144
earnings ( loss ) before income taxes      | 133                                 | 244                                       | 175                                 | 80
net earnings ( loss )                      | 87                                  | 156                                       | 111                                 | 50
dividends declared per share               | $ 0.40                              | $ 0.40                                    | $ 0.40                              | $ 0.50
basic earnings ( loss ) per share          | $ 1.80                              | $ 3.22                                    | $ 2.31                              | $ 1.07
diluted earnings ( loss ) per share        | $ 1.79                              | $ 3.20                                    | $ 2.29                              | $ 1.06


new business model retail segment is inherently risky , particularly in light of significant investment involved , current economic climate  fixed nature of substantial portion of retail segment's operating expenses.
 results for segment dependent upon risks and uncertainties , some discussed below under heading "factors that may affect future results and financial condition. " backlog in company's experience actual amount of product backlog is not a meaningful indication of future business prospects.
 backlog often increases in anticipation of or following new product introductions because of over- ordering by dealers anticipating shortages.
 backlog often reduced once dealers customers believe can obtain sufficient supply.
 backlog cannot be considered reliable indicator of company's ability to achieve level revenue or financial performance.
 further information regarding company's backlog may be found below under heading "factors that may affect future results and financial condition. " gross margin gross margin for three fiscal years ended september 28 , 2002 are follows ( in millions , except gross margin percentages ) : gross margin increased to 28% ( 28 % ) of net sales in 2002 from 23% ( 23 % ) in 2001.
 gross margin in 2001 was unusually low resulting from negative gross margin of 2% ( 2 % ) experienced in first quarter of 2001.
 percentage of net sales  company's quarterly gross margins declined during fiscal 2002 from 31% ( 31 % ) in first quarter down to 26% ( 26 % ) in fourth quarter.
 decline resulted from factors including rise in component costs and aggressive pricing by company across products lines result of continued pricing pressures in personal computer industry.
 company anticipates its gross margin and gross margin of overall personal computer industry will remain under pressure throughout fiscal 2003 in light of weak economic conditions  flat demand for personal computers  pressure on prices.
statements regarding anticipated gross margin in 2003 general demand for personal computers during 2003 are forward- looking.
 gross margin could differ from anticipated levels because of several factors , including certain those below in "factors may affect future results and financial condition. no assurance that current gross margins be maintained , targeted gross margin levels achieved  or current margins on existing individual products maintained.
 gross margins and margins on individual products remain under significant downward pressure due to factors including continued industry wide global pricing pressures  increased competition  compressed product life cycles  potential increases in cost and availability of raw material and outside manufacturing services  potential changes to company's product mix , including higher unit sales of consumer products with lower average selling prices lower gross margins.
 in response to company expects it will continue to take pricing actions with products.
 gross margins could be affected by company's ability to manage quality problems warranty costs to stimulate demand for certain products.
 company's operating strategy and pricing take into account anticipated changes in foreign currency exchange rates ; company's results of operations can be significantly affected short-term by fluctuations in exchange rates.
 company orders components for products builds inventory in advance of product shipments.
 company markets are volatile subject to rapid technology and price changes , risk company will forecast incorrectly produce or order from third parties excess or insufficient inventories of products or components.
 company's operating results and financial condition been past and may in future be adversely affected by company's ability to manage inventory levels and outstanding purchase commitments to respond to short-term shifts in customer demand patterns.
 gross margin declined to 23% ( 23 % ) of net sales in 2001 from 27% ( 27 % ) in 2000.
decline resulted from gross margin negative 2% ( 2 % ) experienced first quarter of 2001 compared to 26% ( 26 % ) gross margin for same quarter in 2000.
 lower than normal net.

| 2002         | 2001         | 2000
----------------------- | ------------ | ------------ | ------------
net sales               | $ 5742       | $ 5363       | $ 7983
cost of sales           | 4139         | 4128         | 5817
gross margin            | $ 1603       | $ 1235       | $ 2166
gross margin percentage | 28% ( 28 % ) | 23% ( 23 % ) | 27% ( 27 % )


contracts customer purchase orders used to determine existence of arrangement.
 shipping documents verify delivery.
 company assesses selling price fixed or determinable based upon payment terms associated with transaction and sales price subject to refund or adjustment.
 company assesses collectibility based on creditworthiness of customer determined by credit checks analysis customer 2019s payment history.
 accruals for customer returns for defective product based on historical experience with similar sales.
 accruals for rebates and incentives based on pricing agreements tied to sales volume.
 changes in accruals may be required if future returns differ from historical experience or if actual sales volume differ from estimated sales volume.
 rebates and incentives recognized as reduction of sales.
 compensated absences.
 in fourth quarter of 2001  company changed vacation policy for certain employees so vacation pay earned ratably throughout year must be used by year-end.
 accrual for compensated absences reduced by $ 1. 6 million in 2001 to eliminate vacation pay no longer required to be accrued under current policy.
 advertising.
 advertising costs charged to operations incurred amounted to $ 18. 4 , $ 16. 2 $ 8. 8 million during 2003 , 2002 2001 respectively.
 research and development.
 development costs charged to operations incurred amounted to $ 34. 6, $ 30. 4 $ 27. 6 million during 2003 , 2002 2001 .
 product warranty.
 company 2019s products carry warranties range from one to six years based on terms generally accepted in market place.
 company records liability for expected cost of warranty-related claims at time of sale.
 allocation of warranty liability between current and long-term based on expected warranty claims to be paid in next year as determined by historical product failure rates.
.
organization significant accounting policies continued ) table presents company 2019s product warranty liability activity in 2003 and 2002 : note to table : environmental costs.
 company accrues for losses associated with environmental obligations when losses probable reasonably estimable.
 costs of estimated future expenditures not discounted to present value.
 recoveries of environmental costs from other parties recorded as assets when receipt considered probable.
 accruals adjusted as facts circumstances change.
 stock based compensation.
 company has one stock-based employee compensation plan ( see note 11 ).
 no.
 123 , 201caccounting for stock-based compensation , 201d encourages does not require companies to record compensation cost for stock-based employee compensation plans at fair value.
 company chosen to continue applying accounting principles board opinion no.
 25 , 201caccounting for stock issued to employees , 201d related interpretations accounting for stock option plans.
 because number of shares fixed exercise price of stock options equals market price of underlying stock on date of grant no compensation expense recognized.
 had compensation cost determined based upon fair value at grant date for awards under plans provisions of sfas no.
 123  company 2019s pro forma earnings and earnings per share would have been as follows:.
 in exchange for other concessions customer agreed to accept responsibility for units purchased from company become defective.
 amount of warranty reserve applicable to estimated number of units previously sold customer may become defective reclassified from product warranty liability to deferred revenue account.

years ended december 31 ( dollars in millions ) | 2003           | 2002
----------------------------------------------- | -------------- | --------------
balance at beginning of year                    | $ 63.2         | $ 69.6
expense                                         | 29.1           | 29.9
claims settled                                  | -30.2 ( 30.2 ) | -29.1 ( 29.1 )
customer warranty waiver ( 1 )                  | --             | -7.2 ( 7.2 )
balance at end of year                          | $ 62.1         | $ 63.2


critical accounting estimates consolidated financial statements include amounts or due to requirements accounting princi- ples accepted in u. s.
 ( gaap ) determined using best estimates and assumptions.
 amounts in statements reflect best judgment , actual amounts could differ from presented.
 items require most subjective complex estimates are : 2022 unpaid loss and loss expense reserves  including long-tail asbestos and environmental ( a&e ) reserves ; 2022 future policy benefits reserves ; 2022 valuation of value of business acquired ( voba ) and amortization of deferred policy acquisition costs voba ; 2022 assessment of risk transfer for certain structured insurance and reinsurance contracts ; 2022 reinsurance recoverable  including provision for uncollectible reinsurance ; valuation of investment portfolio assessment of other-than-temporary impairments ( otti ) 2022 valuation of deferred tax assets ; valuation of derivative instruments related to guaranteed minimum income benefits ( gmib ) ; 2022 valuation of goodwill.
 accounting policies for these items are of critical importance to consolidated financial statements.
 following discussion provides more information regarding estimates and assumptions required to arrive at these amounts should be read in conjunction with sections entitled : prior period development , asbestos environmental other run-off liabilities , reinsurance recoverable on ceded reinsurance , investments  net realized gains ( losses )  other income and expense items.
 unpaid losses and loss expenses overview key data as insurance and reinsurance company  required by laws regulations gaap to establish loss and loss expense reserves for estimated unpaid portion of ultimate liability for losses and loss expenses under terms our policies and agreements with insured and reinsured customers.
estimate of liabilities includes provisions for claims reported but unpaid at balance sheet date ( case reserves ) and for future obligations on claims incurred but not reported ( ibnr ) at balance sheet date ( ibnr may include provision for additional development on reported claims in where case reserve potentially insufficient ).
 loss reserves include estimate of expenses associated with processing and settling unpaid claims ( loss expenses ).
 at december 31 , 2009  gross unpaid loss and loss expense reserves were $ 37. 8 billion net unpaid loss and loss expense reserves were $ 25 billion.
 with exception of certain structured settlements , for timing future claim pay- ments determinable loss reserves not discounted for time value of money.
 with such structured settlements carry net reserves of $ 76 million , net of discount.
 table below presents roll-forward of unpaid losses and loss expenses for years ended december 31 , 2009 and 2008.
 ( 1 ) net of provision for uncollectible reinsurance

( in millions of u.s . dollars )                 | 2009 gross losses | 2009 reinsurance recoverable ( 1 ) | 2009 net losses | 2009 gross losses | 2009 reinsurance recoverable ( 1 ) | net losses
------------------------------------------------ | ----------------- | ---------------------------------- | --------------- | ----------------- | ---------------------------------- | --------------
balance beginning of year                        | $ 37176           | $ 12935                            | $ 24241         | $ 37112           | $ 13520                            | $ 23592
losses and loss expenses incurred                | 11141             | 3719                               | 7422            | 10944             | 3341                               | 7603
losses and loss expenses paid                    | -11093 ( 11093 )  | -4145 ( 4145 )                     | -6948 ( 6948 )  | -9899 ( 9899 )    | -3572 ( 3572 )                     | -6327 ( 6327 )
other ( including foreign exchange revaluation ) | 559               | 236                                | 323             | -1367 ( 1367 )    | -387 ( 387 )                       | -980 ( 980 )
losses and loss expenses acquired                | 2013              | 2013                               | 2013            | 386               | 33                                 | 353
balance end of year                              | $ 37783           | $ 12745                            | $ 25038         | $ 37176           | $ 12935                            | $ 24241


2012 , company granted selected employees aggregate 139 thousand rsus with internal performance measures and separately , certain market thresholds.
 awards vested in january 2015.
 terms of grants specified to extent certain performance goals  internal measures and market thresholds achieved , rsus would vest ; if performance goals surpassed , up to 175% ( 175 % ) of target awards distributed ; if performance goals not met, awards forfeited.
 in january 2015  additional 93 thousand rsus granted and distributed because performance thresholds exceeded.
 in 2015 , 2014 2013 , company granted rsus  with and without performance conditions , to certain employees under 2007 plan.
 rsus without performance conditions vest ratably over three- year service period beginning january 1 of year of grant and rsus with performance conditions vest ratably over three-year performance period beginning january 1 of year of grant ( 201cperformance period 201d ).
 distribution of performance shares contingent upon achievement of internal performance measures and certain market thresholds over performance period.
 during 2015 , 2014 2013 , company granted rsus to non-employee directors under 2007 plan.
 rsus vested on date of grant ; distribution of shares made within 30 days of earlier of : ( i ) 15 months after grant date , subject to deferral election by director ; or ( ii ) participant 2019s separation from service.
 rsus vested on grant date total grant date fair value recorded in operation and maintenance expense included in expense table above on grant date.
 rsus generally vest over periods from one to three years.
 rsus granted with service-only conditions and those with internal performance measures valued at market value of closing price of company 2019s common stock on date of grant.
rsus granted with market conditions valued using monte carlo model.
 expected volatility based on historical volatilities of traded common stock company comparative companies using daily stock prices over past three years.
 expected term is three years risk-free interest rate based on three-year.
 treasury rate effect as of measurement date.
 following table presents weighted-average assumptions in monte carlo simulation weighted-average grant date fair values of rsus granted for years ended december 31:.
 grant date fair value of restricted stock awards vest ratably market performance service conditions amortized through expense over requisite service period using graded-vesting method.
 rsus no performance conditions amortized through expense over requisite service period using straight-line method included in operations expense in consolidated statements of operations.
 as of december 31 , 2015 , $ 4 of total unrecognized compensation cost related to nonvested restricted stock units expected to be recognized over weighted-average remaining life of 1. 4 years.
 total grant date fair value of rsus vested was $ 12 , $ 11 $ 9 for years ended december 31 , 2015  2014 2013.

| 2015               | 2014               | 2013
------------------------------- | ------------------ | ------------------ | ------------------
expected volatility             | 14.93% ( 14.93 % ) | 17.78% ( 17.78 % ) | 19.37% ( 19.37 % )
risk-free interest rate         | 1.07% ( 1.07 % )   | 0.75% ( 0.75 % )   | 0.40% ( 0.40 % )
expected life ( years )         | 3.0                | 3.0                | 3.0
grant date fair value per share | $ 62.10            | $ 45.45            | $ 40.13


goldman sachs group , inc.
 and subsidiaries notes to consolidated financial statements connection with firm 2019s prime brokerage and clearing businesses  firm agrees to clear and settle on behalf of clients transactions entered by with other brokerage firms.
 firm 2019s obligations in such transactions are secured by assets in client 2019s account proceeds received from transactions cleared and settled by firm on behalf client.
 in connection with joint venture investments  firm may issue loan guarantees under may be liable in event of fraud , misappropriation  environmental liabilities other matters involving borrower.
 firm unable to develop estimate of maximum payout under these guarantees and indemnifications.
 management believes unlikely firm will have to make material payments under these arrangements no material liabilities related to these guarantees and indemnifications recognized in consolidated statements of financial condition as of december 2016 and december 2015.
 other representations , warranties and indemnifications.
 firm provides representations and warranties to counterparties in connection with variety of commercial transactions occasionally indemnifies them against potential losses by breach of representations warranties.
 firm may provide indemnifications protecting against changes in or adverse application of certain u.
 tax laws in connection with ordinary-course transactions such securities issuances , borrowings derivatives.
 in firm may provide indemnifications to some counterparties to protect them in event additional taxes owed or payments withheld , due to change in or adverse application of certain non-u. s.
 tax laws.
 these indemnifications generally are standard contractual terms entered into in ordinary course of business.
 no stated or notional amounts included in these indemnifications contingencies triggering obligation to indemnify not expected to occur.
firm unable to develop estimate of maximum payout under these guarantees and indemnifications.
 management believes unlikely firm will to make material payments under these arrangements no material liabilities related to arrangements recognized in consolidated statements of financial condition as of december 2016 and december 2015.
 guarantees of subsidiaries.
 group inc.
 fully unconditionally guarantees securities issued by gs finance corp. wholly-owned finance subsidiary of group inc.
 guaranteed payment obligations of goldman , sachs & co.
 gs&co. gs bank usa  subject to certain exceptions.
 group inc.
 guarantees obligations of other consolidated subsidiaries on transaction-by- transaction basis as negotiated with counterparties.
 group inc.
 unable to develop estimate of maximum payout under subsidiary guarantees guaranteed obligations are also obligations of consolidated subsidiaries group inc. 2019s liabilities as guarantor not separately disclosed.
 note 19.
 shareholders 2019 equity common equity dividends declared per common share were $ 2. 60 in 2016 , $ 2. 55 in 2015 $ 2. 25 in 2014.
 on january 17 , 2017 group inc.
 declared dividend of $ 0. 65 per common share to be paid on march 30 , 2017 to common shareholders of record on march 2 , 2017.
 firm 2019s share repurchase program intended to maintain appropriate level of common equity.
 effected primarily through regular open-market purchases ( may include repurchase plans designed to comply with rule 10b5-1 ) amounts and timing determined by firm 2019s current and projected capital position be influenced by general market conditions prevailing price and trading volumes of firm 2019s common stock.
prior repurchasing common stock, firm must receive confirmation federal reserve board does not object to capital actions.
 table below presents amount of common stock repurchased by firm under share repurchase program.
 172 goldman sachs 2016 form 10-k

in millions except per share amounts   | year ended december 2016 | year ended december 2015 | year ended december 2014
-------------------------------------- | ------------------------ | ------------------------ | ------------------------
common share repurchases               | 36.6                     | 22.1                     | 31.8
average cost per share                 | $ 165.88                 | $ 189.41                 | $ 171.79
total cost of common share repurchases | $ 6069                   | $ 4195                   | $ 5469


republic services , inc.
 notes to consolidated financial statements 2014 ( continued ) high quality financial institutions.
 such balances may be in excess of fdic insured limits.
 to manage related credit exposure we monitor credit worthiness of financial institutions where we have deposits.
 concentrations of credit risk to trade accounts receivable limited due to wide variety of customers and markets in provide services dispersion of operations across many geographic areas.
 we provide services to small-container commercial , large-container industrial municipal residential customers in united states and puerto rico.
 perform ongoing credit evaluations of customers do not require collateral to support customer receivables.
 establish allowance for doubtful accounts based on factors including credit risk of specific customers age of receivables outstanding  historical trends  economic conditions other information.
 accounts receivable  net accounts receivable represent receivables from customers for collection , transfer , recycling  disposal  energy services other services.
 receivables recorded when billed or when related revenue earned represent claims against third parties settled in cash.
 carrying value of receivables  net of allowance for doubtful accounts and customer credits  represents their estimated net realizable value.
 provisions for doubtful accounts evaluated monthly basis recorded based on historical collection experience age of receivables specific customer information economic conditions.
 review outstanding balances on account-specific basis.
 reserves provided for accounts receivable in excess of 90 days outstanding.
 past due receivable balances are written-off when collection efforts unsuccessful collecting amounts due.
 following table reflects activity in allowance for doubtful accounts for years ended december 31:.
 restricted cash and marketable securities as of december 31 , 2016  had $ 90.5 million restricted cash and marketable securities $ 62. 6 million supports our insurance programs for workers 2019 compensation , commercial general liability commercial auto liability.
 additionally we obtain funds through issuance of tax-exempt bonds for financing qualifying expenditures at landfills  transfer stations collection recycling centers.
 funds deposited directly into trust accounts by bonding authorities at time of issuance.
 use of these funds is contractually restricted  not ability to use funds for general operating purposes classified as restricted cash and marketable securities in our consolidated balance sheets.
 in normal course business we may be required to provide financial assurance to governmental agencies of other entities in connection with municipal residential collection contracts  closure post- closure of landfills environmental remediation environmental permits business licenses permits as financial guarantee of performance.
 at several landfills  satisfy financial assurance requirements by depositing cash into restricted trust funds or escrow accounts.
 property and equipment record property and equipment at cost.
 expenditures for major additions improvements to facilities capitalized  maintenance repairs charged to expense as incurred.
 when property is retired or

| 2016           | 2015           | 2014
---------------------------- | -------------- | -------------- | --------------
balance at beginning of year | $ 46.7         | $ 38.9         | $ 38.3
additions charged to expense | 20.4           | 22.7           | 22.6
accounts written-off         | -23.1 ( 23.1 ) | -14.9 ( 14.9 ) | -22.0 ( 22.0 )
balance at end of year       | $ 44.0         | $ 46.7         | $ 38.9


input costs for board and resin expected to be flat operating costs expected decrease.
 european consumer packaging net sales in 2013 were $ 380 million compared with $ 380 million in 2012 $ 375 million in 2011.
 operating profits in 2013 were $ 100 million compared with $ 99 million in 2012 $ 93 million in 2011.
 sales volumes 2013 decreased from 2012 in european and russian markets.
 average sales price realizations higher in russian market lower in europe.
 input costs flat year-over-year.
 planned maintenance downtime costs higher in 2013 than 2012.
 first quarter of 2014 sales volumes compared with fourth quarter 2013 expected to flat.
 average sales price realizations expected higher in russia and europe.
 input costs expected increase for wood and energy decrease for purchased pulp.
 no maintenance outages scheduled for first quarter kwidzyn mill additional costs with rebuild of coated board machine.
 asian consumer packaging net sales were $ 1. 1 billion in 2013 compared with $ 830 million in 2012 $ 855 million in 2011.
 operating profits in 2013 loss of $ 2 million compared with gains $ 4 million in 2012 $ 35 million in 2011.
 sales volumes increased in 2013 compared with 2012 reflecting ramp-up of new coated paperboard machine installed in 2012.
 average sales price realizations lower reflecting competitive pressure on sales prices squeezed margins created unfavorable product mix.
 lower input costs offset by higher freight costs.
 2012 start-up costs for new coated paperboard machine impacted operating profits.
 first quarter of 2014 sales volumes expected to increase slightly.
 average sales price realizations expected flat reflecting competitive pressures.
 input costs expected higher for pulp  energy chemicals.
business drive margin improvement through operational excellence better distribution our distribution business one of north america leading business-to-business distributors to manufacturers facility managers printers providing customized solutions to improve efficiency reduce costs deliver results.
 customer demand sensitive to changes economic conditions consumer behavior segment specific activity including corporate advertising promotional spending government spending domestic manufacturing activity.
 distribution 2019s margins stable across economic cycle.
 providing customers best choice for value in products supply chain services key competitive factor.
 efficient customer service cost-effective logistics focused working capital management key factors in segment profitability.
 distribution.
 2013 annual sales decreased 6% ( 6 % ) from 2012 decreased 15% ( 15 % ) from 2011.
 operating profits 2013 loss of $ 389 million ( gain of $ 43 million excluding goodwill impairment charges reorganization costs ) compared with $ 22 million ( $ 71 million excluding reorganization costs ) in 2012 $ 34 million ( $ 86 million excluding reorganization costs ) annual sales of printing papers graphic arts supplies equipment totaled $ 3. 2 billion in 2013 compared with $ 3. 5 billion in 2012 $ 4. 0 billion in 2011 reflecting declining demand discontinuation of distribution agreement with large manufacturer of graphic supplies.
 trade margins percent of sales for printing papers down from 2012 and 2011.
 revenue from packaging products flat at $ 1. 6 billion in 2013 2012 2011 despite decline of large high-tech customer's business.
 packaging margins remained flat to 2012 level up from 2011.
 facility supplies annual revenue was $ 845 million in 2013 down from $ 944 million in 2012 $ 981 million in 2011.
 operating profits 2013 included goodwill impairment charge of $ 400 million reorganization costs for severance professional services asset write-downs of $ 32 million.
operating profits in 2012 and 2011 included reorganization costs $ 49 million $ 52 million , respectively.
 looking to 2014 first quarter , operating profits will seasonally lower but continue reflect benefits of strategic cost reduction initiatives.

in millions      | 2013         | 2012   | 2011
---------------- | ------------ | ------ | ------
sales            | $ 5650       | $ 6040 | $ 6630
operating profit | -389 ( 389 ) | 22     | 34


yogurt business in china entered new yoplait license agreement with purchaser for use yoplait brand.
 recorded pre-tax gain of $ 5. 4 million.
 fourth quarter of fiscal 2018  acquired blue buffalo pet products , inc.
 ( 201cblue buffalo 201d ) for aggregate purchase price of $ 8. 0 billion  including $ 103. 0 million consideration for net debt repaid at time acquisition.
 definitive agreement plan of merger subsidiary of general mills merged into blue buffalo blue buffalo surviving merger as wholly owned subsidiary of general mills.
 merger agreement equity holders blue buffalo received $ 40. 00 per share in cash.
 financed transaction with combination $ 6. 0 billion in debt , $ 1. 0 billion in equity  cash on hand.
 in fiscal 2019  recorded acquisition integration costs of $ 25. 6 million in sg&a expenses.
 in fiscal 2018  recorded acquisition transaction and integration costs of $ 34. 0 million in sg&a expenses $ 49. 9 million in interest net related to debt issued to finance acquisition.
 consolidated blue buffalo into consolidated balance sheets recorded goodwill of $ 5. 3 billion  indefinite-lived intangible asset for blue buffalo brand of $ 2. 7 billion  finite-lived customer relationship asset of $ 269. 0 million.
 goodwill primarily attributable to future growth opportunities intangible assets not qualify for separate recognition.
 goodwill included in pet reporting unit not deductible for tax purposes.
 fourth quarter of fiscal 2019 recorded adjustments to purchase accounting liabilities resulted in $ 5. 6 million increase to goodwill.
 consolidated results of blue buffalo reported as pet operating segment on one-month lag.
unaudited supplemental pro forma information presented if acquired blue buffalo beginning fiscal 2017 fiscal year.
 fiscal 2017 pro forma amounts include transaction integration costs $ 83. 9 million purchase accounting adjustment to record inventory at fair value $ 52. 7 million.
 fiscal 2017 and fiscal 2018 pro forma amounts include interest expense of $ 238. 7 million on debt issued finance transaction amortization expense of $ 13. 5 million based on estimated fair value useful life of customer relationships intangible asset.
 pro forma amounts include increase to cost of sales by $ 1. 6 million in fiscal 2017 $ 5. 1 million in fiscal 2018 reflect impact of using lifo method inventory valuation on blue buffalo 2019s historical operating results.
 pro forma amounts include related tax effects of $ 125. 1 million in fiscal 2017 $ 14. 5 million in fiscal 2018.
 unaudited pro forma amounts not indicative of results acquisition occurred beginning fiscal 2017 or future results.
 note.
 restructuring , impairment  other exit costs asset impairments in fiscal 2019  recorded $ 192. 6 million charge related to impairment of progresso , food good  mountain high brand intangible assets restructuring impairment other exit costs.
 see note 6 for additional information.
 fiscal 2019  recorded $ 14. 8 million charge in restructuring, impairment  other exit costs related to impairment of certain manufacturing assets in north america retail asia & latin america segments.

in millions                                | unaudited fiscal year 2018 | unaudited fiscal year 2017
------------------------------------------ | -------------------------- | --------------------------
net sales                                  | $ 17057.4                  | $ 16772.9
net earnings attributable to general mills | 2252.4                     | 1540.2


at december 31.
 table summarizes our restricted cash and marketable securities as of december.
 we own 19. 9% ( 19. 9 % ) interest in company  issues financial surety bonds to secure capping  closure post-closure obligations for companies in solid waste industry.
 we account for this investment under cost method of accounting.
 no identified events or changes in circumstances significant adverse effect on fair value of investment.
 investee company and parent company investee had written surety bonds for us relating to our landfill operations for capping closure post-closure  of $ 855. 0 million and $ 775. 2 million outstanding as of december 31 , 2010 and 2009 , respectively.
 reimbursement obligations under bonds secured by indemnity agreement with investee and letters of credit totaling $ 45. 0 million and $ 67. 4 million as of december 31 , 2010 and 2009 .
 off-balance sheet arrangements no off-balance sheet debt or similar obligations other than operating leases financial assurances discussed not classified as debt.
 no transactions or obligations with related parties not disclosed consolidated into or reflected in reported financial position or results of operations.
 not guaranteed any third-party debt.
 guarantees we enter into contracts in normal course of business include indemnification clauses.
 indemnifications relating to known liabilities recorded in consolidated financial statements based on best estimate of required future payments.
 certain indemnifications relate to contingent events or occurrences imposition of additional taxes due to change in tax law or adverse interpretation of tax law indemnifications made in divestiture agreements indemnify buyer for liabilities relate to our activities prior to divestiture may become known in future.
do not believe contingent obligations material effect on our consolidated financial position  results of operations or cash flows.
 entered into agreements with property owners to guarantee value of property adjacent to our landfills.
 agreements have varying terms.
 do not believe these contingent obligations material effect on our consolidated financial position results of operations cash flows.
 other matters our business activities conducted in context of developing changing statutory regulatory framework.
 governmental regulation of waste management industry requires us to obtain retain numerous governmental permits to conduct various aspects operations.
 these permits subject to revocation  modification denial.
 costs and other capital expenditures required to obtain or retain applicable permits comply with applicable regulations could be significant.
 any revocation , modification denial of permits could have material adverse effect on us.
 republic services , inc.
 notes to consolidated financial statements  continued

| 2010    | 2009
----------------------------------------------- | ------- | -------
financing proceeds                              | $ 39.8  | $ 93.1
capping closure and post-closure obligations    | 61.8    | 62.4
self-insurance                                  | 63.8    | 65.1
other                                           | 7.4     | 19.9
total restricted cash and marketable securities | $ 172.8 | $ 240.5


december 31 , 2008  2007 2006  included ( in millions ) :.
 included in gain on disposition , adjustment or impairment of acquired assets obligations for 2008 is favorable adjustment to certain liabilities of acquired companies due to changes in circumstances surrounding liabilities subsequent related measurement period.
 included in gain disposition 2006 is sale of former centerpulse austin land and facilities for gain of $ 5. 1 million favorable settlement of two pre- acquisition contingent liabilities.
 gains offset by $ 13. 4 million impairment charge for centerpulse tradename trademark intangibles in europe operating segment.
 in-process research and development charges for 2008 related to acquisition of abbott spine.
-process research development charges for 2007 related to acquisitions of endius and orthosoft.
 consulting professional fees to third- party integration consulting in areas tax  compliance  logistics human resources legal fees related to matters involving acquired businesses.
 cash and equivalents 2013 consider all highly liquid investments with original maturity of three months or less to be cash equivalents.
 carrying amounts reported in balance sheet for cash and equivalents valued at cost  approximates fair value.
 restricted cash of cash held in escrow related to certain insurance coverage.
 inventories 2013 inventories net of allowances for obsolete slow-moving goods stated at lower of cost or market  cost determined on first-in first-out basis.
 property , plant and equipment 2013 property plant equipment carried at cost less accumulated depreciation.
 depreciation computed using straight-line method based on estimated useful lives of ten to forty years for buildings and improvements three to eight years for machinery and equipment.
 maintenance and repairs expensed as incurred.
accordance with statement of financial accounting standards ( 201csfas 201d ) no.
 144 , 201caccounting for impairment or disposal of long-lived assets, 201d we review property , plant equipment for impairment whenever events or changes circumstances indicate carrying value of asset may not be recoverable.
 impairment loss recognized when estimated future undiscounted cash flows to asset less than its carrying amount.
 impairment loss measured as amount carrying amount of asset exceeds fair value.
 software costs 2013 capitalize certain computer software software development costs in developing or obtaining computer software for internal use when preliminary project stage completed probable software will be used as intended.
 capitalized software costs include external direct costs of materials services developing obtaining computer software compensation related benefits for employees directly associated with software project.
 capitalized software costs included in property  plant equipment on balance sheet amortized straight-line basis when software ready for intended use over estimated useful lives of software approximate three to seven years.
 instruments 2013 instruments are hand-held devices used by orthopaedic surgeons during total joint replacement other surgical procedures.
 instruments recognized as long-lived assets included in property , plant equipment.
 undeployed instruments carried at cost  net of allowances for excess and obsolete instruments.
 instruments in field carried at cost less accumulated depreciation.
 depreciation computed using straight-line method based on average estimated useful lives determined to associated product life cycles primarily five years.
 review instruments for impairment in accordance with sfas no.
 144.
 depreciation of instruments recognized as selling , general and administrative expense.
 goodwill 2013 account for goodwill in accordance with sfas no.
 142 , 201cgoodwill other intangible assets.201d goodwill not amortized subject to annual impairment tests.
 goodwill assigned to reporting units.
 perform annual impairment tests by comparing each reporting unit 2019s fair value to carrying amount determine potential impairment.
 fair value reporting unit and implied fair value of goodwill determined based discounted cash flow analysis.
 significant assumptions incorporated into discounted cash flow analyses estimated growth rates risk-adjusted discount rates.
 perform test in fourth quarter of year.
 if fair value of reporting unit less than carrying value impairment loss recorded to extent implied fair value of reporting unit goodwill less than carrying value.
 intangible assets 2013 account for intangible assets in accordance with sfas no.
 142.
 intangible assets initially measured at fair value.
 determined fair value of intangible assets by fair value of z i m m e r h o l d i n g s , i n c.
 2 0 0 8 f o r m 1 0 - k a n n u a l r e p o r t notes to consolidated financial statements ( continued ) %%transmsg*** transmitting job : c48761 pcn : 044000000 ***%%pcmsg|44 |00007|yes|no|02/24/2009 06:10|0|0|page valid, no graphics -- color : d|

| 2008           | 2007           | 2006
------------------------------------------------------------------------------- | -------------- | -------------- | ----------------
gain on disposition adjustment or impairment of acquired assets and obligations | $ -9.0 ( 9.0 ) | $ -1.2 ( 1.2 ) | $ -19.2 ( 19.2 )
consulting and professional fees                                                | 10.1           | 1.0            | 8.8
employee severance and retention                                                | 1.9            | 1.6            | 3.3
information technology integration                                              | 0.9            | 2.6            | 3.0
in-process research & development                                               | 38.5           | 6.5            | 2.9
integration personnel                                                           | 2013           | 2013           | 2.5
facility and employee relocation                                                | 7.5            | 2013           | 1.0
distributor acquisitions                                                        | 7.3            | 4.1            | 2013
sales agent and lease contract terminations                                     | 8.1            | 5.4            | 0.2
other                                                                           | 3.2            | 5.2            | 3.6
acquisition integration and other                                               | $ 68.5         | $ 25.2         | $ 6.1


company determines adjustment for taxes on international operations based difference between statutory tax rate earnings in each foreign jurisdiction and enacted rate of 19. 0% ( 19. 0 % ) , 19. 3% ( 19. 3 % ) and 20. 0% ( 20. 0 % ) at december 31 , 2018 , 2017  2016 .
 benefit to company 2019s effective income tax rate from taxes international operations relates to benefits from lower-taxed global operations due to use global funding structures and tax holiday in singapore.
 impact decreased from 2017 to 2018 of decrease in u. s.
 federal tax with adoption of asu 2016-09 in 2017  excess tax benefits deficiencies from share-based payment transactions recognized as income tax expense benefit in company 2019s consolidated statements of income.
 impact of tax reform act including transition tax  re-measurement of u. s.
 deferred tax assets liabilities from 35% ( 35 % ) to 21% ( 21 % ) withholding tax accruals allocation of tax benefit between continuing operations and discontinued operations related to utilization of foreign tax credits.

years ended december 31                                        | 2018             | 2017             | 2016
-------------------------------------------------------------- | ---------------- | ---------------- | ----------------
statutory tax rate                                             | 19.0% ( 19.0 % ) | 19.3% ( 19.3 % ) | 20.0% ( 20.0 % )
u.s . state income taxes net of u.s . federal benefit          | -0.4 ( 0.4 )     | -1.5 ( 1.5 )     | 0.4
taxes on international operations ( 1 )                        | -7.3 ( 7.3 )     | -30.3 ( 30.3 )   | -12.2 ( 12.2 )
nondeductible expenses                                         | 2.7              | 3.4              | 1.4
adjustments to prior year tax requirements                     | 0.9              | 2.0              | -1.2 ( 1.2 )
adjustments to valuation allowances                            | 3.8              | -1.8 ( 1.8 )     | -2.2 ( 2.2 )
change in uncertain tax positions                              | 0.9              | 1.6              | 3.2
excess tax benefits related to shared based compensation ( 2 ) | -3.6 ( 3.6 )     | -8.0 ( 8.0 )     | 2014
u.s . tax reform impact ( 3 )                                  | 7.1              | 51.2             | 2014
loss on disposition                                            | -10.2 ( 10.2 )   | 2014             | 2014
other 2014 net                                                 | -1.2 ( 1.2 )     | 0.6              | 1.2
effective tax rate                                             | 11.7% ( 11.7 % ) | 36.5% ( 36.5 % ) | 10.6% ( 10.6 % )


largest operators of open-loop closed-loop retail electronic payments networks largest operators networks are visa  mastercard american express discover  jcb diners club.
 exception of discover  primarily operates in united states other network operators multi- national or global providers of payments network services.
 based on payments volume total volume number of transactions number of cards in circulation visa is largest retail electronic payments network in world.
 chart compares our network with major competitors for calendar year 2007 : company payments volume volume transactions cards ( billions ) billions ) billions ) millions ) visa inc. 1.
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 $ 2457 $ 3822 50. 3 1592.
 1 visa inc.
 figures as reported in filings.
 source : nilson report issue 902 ( may 2008 ) issue 903 ( may 2008 ).
 note visa inc.
 figures exclude visa europe.
 figures for competitors include european operations.
 visa figures include visa  visa electron  interlink brands.
 visa cards include plus proprietary cards proprietary plus cash volume not included.
 domestic china figures excluded.
 mastercard figures include pin-based debit card figures on mastercard cards not maestro or cirrus figures.
 china commercial funds transfers excluded.
 american express discover include business from third-party issuers.
 jcb figures for april 2006 through march 2007 cards outlets as of september 2007.
 jcb total transaction figures estimates.
primary operations we generate revenue from transaction processing services we offer to customers.
 customers deliver visa products and payment services to consumers merchants based on product platforms we define and manage.
 payments network management is core part of our operations  ensures our payments system provides safe , efficient  consistent  interoperable service to cardholders , merchants  financial institutions worldwide.
 transaction processing services core processing services core processing services involve routing of payment information and related data to facilitate authorization , clearing settlement of transactions between visa issuers  financial institutions issue visa cards to cardholders , and acquirers , financial institutions offer visa network connectivity payments acceptance services to merchants.
 in  we offer range of value-added processing services to support customers 2019 visa programs promote growth security of visa payments network.
 authorization is process of approving or declining transaction before purchase finalized or cash disbursed.
 clearing is process of delivering final transaction data from acquirer to issuer for posting to cardholder 2019s account , calculation of certain fees and charges apply to issuer and acquirer involved in transaction  conversion of transaction amounts to the

company          | payments volume ( billions ) | total volume ( billions ) | total transactions ( billions ) | cards ( millions )
---------------- | ---------------------------- | ------------------------- | ------------------------------- | ------------------
visa inc. ( 1 )  | $ 2457                       | $ 3822                    | 50.3                            | 1592
mastercard       | 1697                         | 2276                      | 27.0                            | 916
american express | 637                          | 647                       | 5.0                             | 86
discover         | 102                          | 119                       | 1.6                             | 57
jcb              | 55                           | 61                        | 0.6                             | 58
diners club      | 29                           | 30                        | 0.2                             | 7


consolidated net cash flows used for investing activities were $ 4. 2 billion in 2010 compared with $ 3. 2 billion in 2009.
 net investing activities for related primarily to net purchases of fixed maturities for 2010 included acquisitions of rain and hail and jerneh insurance.
 consolidated net cash flows from financing activities were $ 732 million in 2010 compared with net cash flows $ 321 million in 2009.
 net cash flows from for financing in 2010 and 2009 included dividends paid on common shares of $ 435 million and $ 388 million respectively.
 net cash flows from financing activ ities in 2010 included net proceeds of $ 699 million from issuance of long-term debt $ 1 billion in reverse repurchase agreements $ 300 million in credit facility borrowings.
 partially offset by repayment of $ 659 million in debt and share repurchases settled in 2010 of $ 235 million.
 for 2009  net cash flows for financing activities included net pro- ceeds from issuance of $ 500 million in long-term debt net repayment of debt and reverse repurchase agreements of $ 466 million.
 internal and external forces influence financial condition results of operations cash flows.
 claim settle- ments  premium levels investment returns may be impacted by changing rates inflation and other economic conditions.
 significant periods of time to several years or may lapse between occurrence of insured loss reporting loss and settlement of liability for loss.
 utilize reverse repurchase agreements as low-cost alternative for short-term funding needs.
 use instruments limited basis to address short-term cash timing differences without disrupting investment portfolio holdings settle transactions with future operating cash flows.
december 31 , 2010  $ 1 billion reverse repurchase agreements outstanding ( refer to short-term debt ).
 in addition to cash from operations  routine sales investments financing arrangements agreements with bank provider implemented two international multi-currency notional cash pooling programs to enhance cash management efficiency during short-term timing mismatches between expected inflows and outflows cash by currency.
 each program participating ace entities establish deposit accounts in different currencies with bank provider each day credit or debit balances every account notionally translated into single currency ( u. s.
 dollars ) notionally pooled.
 bank extends overdraft credit to any participating ace entity as needed provided overall notionally-pooled balance of all accounts in each pool at end of each day is at least zero.
 actual cash balances not physically converted not co-mingled between legal entities.
 ace entities may incur overdraft balances to address short-term timing mismatches overdraft balances incurred under program by ace entity guaranteed by ace limited ( up to $ 150 million aggregate ).
 revolving credit facility allows for same day drawings to fund net pool overdraft should participating ace entities withdraw contributed funds from pool.
 capital resources capital resources consist of funds deployed or available to to support business operations.
 following table summarizes components of capital resources at december 31 , 2010  and 2009.
 ratios of debt to total capitalization and debt plus trust preferred securities to total capitalization increased temporarily due to increase short-term debt.
 expect ratios will decline next six to nine months as repay short-term debt.
believe financial strength provides us flexibility capacity to obtain available funds externally through debt or equity financing on short-term and long-term basis.
 our ability to access capital markets dependent on ,, market conditions and perceived financial strength.
 we have accessed both debt and equity markets from time to time.

( in millions of u.s . dollars except for percentages )               | 2010             | 2009
--------------------------------------------------------------------- | ---------------- | ----------------
short-term debt                                                       | $ 1300           | $ 161
long-term debt                                                        | 3358             | 3158
total debt                                                            | 4658             | 3319
trust preferred securities                                            | 309              | 309
total shareholders 2019 equity                                        | 22974            | 19667
total capitalization                                                  | $ 27941          | $ 23295
ratio of debt to total capitalization                                 | 16.7% ( 16.7 % ) | 14.2% ( 14.2 % )
ratio of debt plus trust preferred securities to total capitalization | 17.8% ( 17.8 % ) | 15.6% ( 15.6 % )


table of contents capital deployment program subject to market economic conditions  applicable legal requirements other relevant factors.
 capital deployment program not obligate us to continue dividend for fixed period payment of dividends may be suspended at at our discretion.
 stock performance graph stock performance graph related information not deemed 201csoliciting material 201d or 201cfiled 201d with securities and exchange commission  nor information incorporated into future filings under securities act of 1933 or exchange act , each as amended except to extent we specifically incorporate it by reference into filing.
 stock performance graph compares our cumulative total stockholder return on annual basis on our common stock with cumulative total return on standard and poor 2019s 500 stock index amex airline index from december 9 , 2013 ( aag common stock ) through december 31 , 2015.
 comparison assumes $ 100 invested on december 9 , 2013 in aag common stock and in each foregoing indices assumes reinvestment of dividends.
 stock performance on graph represents historical stock performance not indicative of future stock price performance.
 purchases of equity securities by issuer and affiliated purchasers since july 2014 board of directors approved several share repurchase programs aggregating $ 7. 0 billion of authority of as of december 31 , 2015 , $ 2. 4 billion remained unused under repurchase programs

| 12/9/2013 | 12/31/2013 | 12/31/2014 | 12/31/2015
----------------------------- | --------- | ---------- | ---------- | ----------
american airlines group inc . | $ 100     | $ 103      | $ 219      | $ 175
amex airline index            | 100       | 102        | 152        | 127
s&p 500                       | 100       | 102        | 114        | 113


notes consolidated financial statements 2014 continued ) note 10 2014shareholders 2019 equity on april 23, 2010 board of directors approved share repurchase program authorized purchase of up to $ 100. 0 million of global payments 2019 stock in open market or as otherwise determined by us subject to market conditions business opportunities other factors.
 under authorization repurchased 2382890 shares of common stock at cost of $ 100. 0 million  average of $ 41. 97 per share including commissions.
 repurchased shares held as treasury stock.
 $ 13. 0 million remaining under authorization from original share repurchase program initiated fiscal 2007.
 repurchased shares retired available for future issuance.
 did not repurchase shares under plan in fiscal 2010.
 authorization has no expiration date may be suspended or terminated any time.
 note 11 2014share-based awards and options as of may 31 , 2010 four share-based employee compensation plans.
 for all share-based awards granted after june 1, 2006 compensation expense recognized on straight-line basis.
 fair value of share- based awards granted prior to june 1 , 2006 amortized as compensation expense on accelerated basis from date of grant.
 non-qualified stock options and restricted stock granted to officers key employees directors under global payments inc.
 2000 long-term incentive plan  amended and restated ( 201c2000 plan 201d ) global payments inc.
 amended and restated 2005 incentive plan ( 201c2005 plan 201d ) amended and restated 2000 non-employee director stock option plan ( 201cdirector plan 201d ) collectively 201cplans 201d ).
 effective with adoption of 2005 plan no future grants under 2000 plan.
shares available for future grant as of may 31 , 2010 are 2. 7 million for 2005 plan and 0. 4 million for director plan.
 certain executives granted performance-based restricted stock units ( 201crsu 201ds ).
 rsus represent right to earn shares of global stock if performance measures achieved during grant year.
 target number of rsus and target performance measures set by compensation committee.
 rsus converted to stock grant only if company 2019s performance fiscal year exceeds pre-established goals table summarizes share-based compensation cost charged to income for all stock options granted employee stock purchase plan  iii restricted stock program.
 total income tax benefit recognized for share-based compensation in accompanying statements of income presented.
 stock options options granted at 100% ( ) of fair market value on date of grant have 10-year terms.
 stock options granted vest one year after date of grant with respect to 25% ( 25 % ) of shares granted additional 25% ( 25 % ) after two years additional 25% ( 25 % ) after three years remaining 25% ( 25 % ) after four years.
 plans provide for accelerated vesting under certain conditions.
 historically issued new shares to satisfy exercise of options.

| 2010           | 2009           | 2008
----------------------------- | -------------- | -------------- | --------------
share-based compensation cost | $ 18.1         | $ 14.6         | $ 13.8
income tax benefit            | $ -6.3 ( 6.3 ) | $ -5.2 ( 5.2 ) | $ -4.9 ( 4.9 )


south america.
 approximately 26% ( 26 % ) of 2017 net sales to international markets.
 segment sells directly through own sales force and indirectly through independent manufacturers 2019 representatives  primarily to wholesalers  home centers  mass merchandisers industrial distributors.
 sales to home depot and lowe 2019s comprised 23% ( 23 % ) of net sales of plumbing segment in 2017.
 segment 2019s chief competitors include delta ( owned by masco ) kohler , pfister spectrum brands ) american standard ( lixil group ) insinkerator ( by emerson electronic company ) imported private-label brands.
 doors.
 doors segment manufactures sells fiberglass and steel entry door systems under therma-tru brand urethane millwork product lines under fypon brand.
 segment benefits from long-term trend away from traditional materials wood steel aluminum toward energy-efficient durable synthetic materials.
 therma-tru products include fiberglass and steel residential entry door patio door systems primarily for sale in u. s.
 canada.
 segment principal customers are home centers , millwork building products wholesale distributors specialty dealers provide products to residential new construction market remodeling and renovation markets.
 sales to home depot and lowe 2019s comprised approximately 14% ( 14 % ) of net sales of doors segment in 2017.
 segment 2019s competitors include masonite , jeld-wen  plastpro pella.
 security.
 security segment 2019s products consist of locks , safety and security devices  electronic security products manufactured sourced distributed primarily under master lock brand fire resistant safes , security containers commercial cabinets manufactured distributed under sentrysafe brand.
 segment sells products principally in u. s. canada  europe central america japan australia.
 approximately 25% ( 25 % ) of 2017 net sales to international markets.
 this segment manufactures sells key-controlled combination padlocks  bicycle cable locks built-in locker locks door hardware  automotive  trailer towing locks  electronic access control solutions other specialty safety security devices for consumer use to hardware  home center retail outlets.
 segment sells lock systems fire resistant safes to locksmiths industrial institutional users original equipment manufacturers.
 sales to home depot lowe 2019s comprised approximately 18% ( 18 % ) of net sales of security segment in 2017.
 master lock competes with abus , w.
 brady , hampton  kwikset ( owned by spectrum brands ) schlage ( owned by allegion ) assa abloy various imports  sentrysafe competes with first alert , magnum  fortress  stack-on fire king.
 annual net sales for last three fiscal years for each business segments were as follows : ( in millions ) 2017 2016 2015.
 for additional financial information for business segments refer to note 18 , 201cinformation on business segments , 201d to consolidated financial statements in item 8 of this annual report other information raw materials.
 table below indicates principal raw materials used by each segments.
 these materials available from number of sources.
 volatility in prices of commodities energy used in making distributing products impacts cost of manufacturing products.

( in millions ) | 2017     | 2016     | 2015
--------------- | -------- | -------- | --------
cabinets        | $ 2467.1 | $ 2397.8 | $ 2173.4
plumbing        | 1720.8   | 1534.4   | 1414.5
doors           | 502.9    | 473.0    | 439.1
security        | 592.5    | 579.7    | 552.4
total           | $ 5283.3 | $ 4984.9 | $ 4579.4


page 59 of 94 notes to consolidated financial statements ball corporation subsidiaries 13.
 debt interest costs continued ) long-term debt obligations outstanding at december 31 , 2007 maturities of $ 127. 1 million , $ 160 million  $ 388. 4 million  $ 625. 1 million $ 550. 3 million for years ending december 31 , 2008 through 2012  $ 456. 1 million thereafter.
 ball provides letters of credit business to secure liabilities industrial development revenue bonds self-insurance arrangements.
 letters of credit outstanding at december 31 , 2007 and 2006 were $ 41 million and $ 52. 4 million  respectively.
 notes payable senior credit facilities guaranteed full unconditional joint basis by company 2019s domestic wholly owned subsidiaries.
 certain foreign denominated tranches of senior credit facilities similarly guaranteed by company 2019s wholly owned foreign subsidiaries.
 note 22 contains further details condensed consolidating financial information for company segregating guarantor subsidiaries and non-guarantor subsidiaries.
 company not in default of loan agreement at december 31, 2007 met all debt payment obligations.
.
 note agreements , bank credit agreement industrial development revenue bond agreements contain restrictions relating to dividend payments share repurchases investments financial ratios guarantees incurrence of additional indebtedness.
 on march 27 , 2006  ball expanded senior secured credit facilities with addition $ 500 million term d loan facility due in installments through october 2011.
 march 27 , 2006  ball issued at price of 99. 799 percent $ 450 million of 6. 625% ( 6. 625 % ) senior notes ( effective yield to maturity of 6. 65 percent ) due in march 2018.
 proceeds from financings used to refinance existing.
debt with ball corporation debt lower interest rates acquire north american plastic container net assets from alcan reduce seasonal working capital debt.
 see note 3 for further details acquisitions. october 13, 2005  ball refinanced senior secured credit facilities extend debt maturities lower interest rate spreads provide company additional borrowing capacity for future growth.
 third and fourth quarters of 2005 ball redeemed 7. 75% ( 7. 75 % ) senior notes due august 2006.
 refinancing senior note redemptions resulted in debt refinancing charge of $ 19. 3 million ( $ 12. 3 million after tax ) related call premium unamortized debt issuance costs.
 summary of total interest cost paid accrued:.
 ( a ) includes $ 6. 6 million paid in 2005 redemption of company 2019s senior senior subordinated notes.

( $ in millions )                       | 2007         | 2006         | 2005
--------------------------------------- | ------------ | ------------ | ------------
interest costs before refinancing costs | $ 155.8      | $ 142.5      | $ 102.4
debt refinancing costs                  | 2013         | 2013         | 19.3
total interest costs                    | 155.8        | 142.5        | 121.7
amounts capitalized                     | -6.4 ( 6.4 ) | -8.1 ( 8.1 ) | -5.3 ( 5.3 )
interest expense                        | $ 149.4      | $ 134.4      | $ 116.4
interest paid during the year ( a )     | $ 153.9      | $ 125.4      | $ 138.5


exiting business in japan economic weakness in asia political unrest in thailand offset by growth in new zealand emerging markets.
 reinsurance commissions  fees other revenue increased 48% ( 48 % ) due to benfield merger partially offset by unfavorable foreign currency translation.
 organic revenue even with 2008 growth in domestic treaty business higher pricing offset by greater client retention declines in investment banking facultative placements.
 operating income increased $ 54 million or 6% ( 6 % ) from 2008 to $ 900 million in 2009.
 2009 operating income margins segment were 14. 3% ( 14. 3 % ) up 60 basis points from 13. 7% ( 13. 7 % ) in 2008.
 contributing to increased operating income margins were merger with benfield lower e&o costs due to insurance recoveries pension curtailment gain of $ 54 million in 2009 versus curtailment loss of $ 6 million in 2008 declines in anti-corruption compliance initiative costs of $ 35 million restructuring savings other cost savings initiatives.
 partially offset by increase of $ 140 million in restructuring costs $ 95 million of lower fiduciary investment income benfield integration costs higher amortization of intangible assets in merger unfavorable foreign currency translation.
 consulting.
 consulting segment generated 17% ( 17 % ) of consolidated total revenues in 2009 provides broad range of human capital consulting services consulting services.
 health and benefits advises clients about structure fund administer employee benefit programs attract retain motivate employees.
 benefits consulting include health and welfare  executive benefits  workforce strategies productivity  absence management  benefits administration  data-driven health  compliance  employee commitment  investment advisory elective benefits services.
.
retirement specializes in global actuarial services  defined contribution consulting  investment consulting tax and erisa consulting  pension administration.
 3.
 compensation focuses on compensatory advisory/counsel including : compensation planning design  executive reward strategies  salary survey benchmarking  market share studies sales force effectiveness  special expertise in financial services technology industries.
 4.
 strategic human capital delivers advice to complex global organizations on talent , change organizational effectiveness issues  including talent strategy acquisition  executive on-boarding  performance management  leadership assessment development  communication strategy  workforce training change management.
 outsourcing offers employment processing  performance improvement  benefits administration other employment-related services.
 beginning in late 2008 continuing throughout 2009 , disruption in global credit markets deterioration of financial markets created significant uncertainty in marketplace.
 prolonged economic downturn adversely impacting clients 2019 financial condition levels of business activities in industries geographies where we operate.
 believe majority of practices well positioned to manage through this time, challenges reducing demand for services depressing price of services having adverse effect on our new business results of operations.

years ended december 31,        | 2009             | 2008             | 2007
------------------------------- | ---------------- | ---------------- | ----------------
segment revenue                 | $ 1267           | $ 1356           | $ 1345
segment operating income        | 203              | 208              | 180
segment operating income margin | 16.0% ( 16.0 % ) | 15.3% ( 15.3 % ) | 13.4% ( 13.4 % )