| _id | dd4bb7270 |
| title |  |
| text | page 73 of 98 notes to consolidated financial statements ball corporation and subsidiaries 15 .
shareholders 2019 equity at december 31 , 2006 , the company had 550 million shares of common stock and 15 million shares of preferred stock authorized , both without par value .
preferred stock includes 120000 authorized but unissued shares designated as series a junior participating preferred stock .

under the company 2019s shareholder rights agreement dated july 26 , 2006 , one preferred stock purchase right ( right ) is attached to each outstanding share of ball corporation common stock .
subject to adjustment , each right entitles the registered holder to purchase from the company one one-thousandth of a share of series a junior participating preferred stock at an exercise price of $ 185 per right .

if a person or group acquires 10 percent or more of the company 2019s outstanding common stock ( or upon occurrence of certain other events ) , the rights ( other than those held by the acquiring person ) become exercisable and generally entitle the holder to purchase shares of ball corporation common stock at a 50 percent discount .
the rights , which expire in 2016 , are redeemable by the company at a redemption price of $ 0.001 per right and trade with the common stock .

exercise of such rights would cause substantial dilution to a person or group attempting to acquire control of the company without the approval of ball 2019s board of directors .
the rights would not interfere with any merger or other business combinations approved by the board of directors .
the company reduced its share repurchase program in 2006 to $ 45.7 million , net of issuances , compared to $ 358.1 million net repurchases in 2005 and $ 50 million in 2004 .

the net repurchases in 2006 did not include a forward contract entered into in december 2006 for the repurchase of 1200000 shares .
the contract was settled on january 5 , 2007 , for $ 51.9 million in cash .
in connection with the employee stock purchase plan , the company contributes 20 percent of up to $ 500 of each participating employee 2019s monthly payroll deduction toward the purchase of ball corporation common stock .

company contributions for this plan were $ 3.2 million in 2006 , $ 3.2 million in 2005 and $ 2.7 million in 2004 .
accumulated other comprehensive earnings ( loss ) the activity related to accumulated other comprehensive earnings ( loss ) was as follows : ( $ in millions ) foreign currency translation pension and postretirement items , net of tax effective financial derivatives , net of tax accumulated comprehensive earnings ( loss ) .

notwithstanding the 2005 distribution pursuant to the jobs act , management 2019s intention is to indefinitely reinvest foreign earnings .
therefore , no taxes have been provided on the foreign currency translation component for any period .
the change in the minimum pension liability is presented net of related tax expense of $ 2.9 million for 2006 and related tax benefits of $ 27.3 million and $ 20.8 million for 2005 and 2004 , respectively .

the change in the effective financial derivatives is presented net of related tax expense of $ 5.7 million for 2006 , related tax benefit of $ 10.7 million for 2005 and related tax benefit of $ 0.2 million for 2004.

 |
| table | ( $ in millions ) | foreign currency translation | pension and other postretirement items net of tax | effective financial derivatives net of tax | accumulated other comprehensive earnings ( loss )
----------------- | ---------------------------- | ------------------------------------------------- | ------------------------------------------ | -------------------------------------------------
december 31 2003  | $ 80.7                       | $ -93.1 ( 93.1 )                                  | $ 11.0                                     | $ -1.4 ( 1.4 )
2004 change       | 68.2                         | -33.2 ( 33.2 )                                    | -0.4 ( 0.4 )                               | 34.6
december 31 2004  | 148.9                        | -126.3 ( 126.3 )                                  | 10.6                                       | 33.2
2005 change       | -74.3 ( 74.3 )               | -43.6 ( 43.6 )                                    | -16.0 ( 16.0 )                             | -133.9 ( 133.9 )
december 31 2005  | 74.6                         | -169.9 ( 169.9 )                                  | -5.4 ( 5.4 )                               | -100.7 ( 100.7 )
2006 change       | 57.2                         | 8.0                                               | 6.0                                        | 71.2
december 31 2006  | $ 131.8                      | $ -161.9 ( 161.9 )                                | $ 0.6                                      | $ -29.5 ( 29.5 ) |


| _id | dd4c63502 |
| title |  |
| text | based on the results of the second step of testing , at december 31 , 2008 , the company recorded a $ 9.6 billion pretax ( $ 8.7 billion after-tax ) goodwill impairment charge in the fourth quarter of 2008 , representing most of the goodwill allocated to these reporting units .

the primary cause for the goodwill impairment at december 31 , 2008 in the above reporting units was rapid deterioration in the financial markets , as well as in the global economic outlook particularly during the period beginning mid-november through year-end 2008 .
the more significant fair value adjustments in the pro forma purchase price allocation in the second step of testing were to fair value loans and debt and were made to identify and value identifiable intangibles .

the adjustments to measure the assets , liabilities and intangibles were for the purpose of measuring the implied fair value of goodwill and such adjustments are not reflected in the consolidated balance sheet .
the following table shows reporting units with goodwill balances and the excess of fair value as a percentage over allocated book value as of december 31 , 2009 .
in millions of dollars reporting unit ( 1 ) fair value as a % (  % ) of allocated book value goodwill .

( 1 ) local consumer lending 2014other is excluded from the table as there is no goodwill allocated to it .
while no impairment was noted in step one of the company 2019s local consumer lending 2014cards reporting unit impairment test at november 30 , 2009 , goodwill present in that reporting unit may be particularly sensitive to further deterioration in economic conditions .

under the market approach for valuing this reporting unit , the earnings multiples and transaction multiples were selected from multiples obtained using data from guideline companies and acquisitions .
the selection of the actual multiple considers operating performance and financial condition such as return on equity and net income growth of local consumer lending 2014cards as compared to the guideline companies and acquisitions .

for the valuation under the income approach , the company utilized a discount rate , which it believes reflects the risk and uncertainty related to the projected cash flows , and selected 2012 as the terminal year .
small deterioration in the assumptions used in the valuations , in particular the discount rate and growth rate assumptions used in the net income projections , could significantly affect the company 2019s impairment evaluation and , hence , results .

if the future were to differ adversely from management 2019s best estimate of key economic assumptions and associated cash flows were to decrease by a small margin , the company could potentially experience future material impairment charges with respect to $ 4683 million of goodwill remaining in our local consumer lending 2014 cards reporting unit .

any such charges , by themselves , would not negatively affect the company 2019s tier 1 , tier 1 common and total capital regulatory ratios , its tangible common equity or the company 2019s liquidity position.

 |
| table | reporting unit ( 1 )                    | fair value as a % (  % ) of allocated book value | goodwill
--------------------------------------- | ------------------------------------------------ | --------
north america regional consumer banking | 174% ( 174 % )                                   | $ 2453
emea regional consumer banking          | 163                                              | 255
asia regional consumer banking          | 303                                              | 5533
latin america regional consumer banking | 215                                              | 1352
securities and banking                  | 203                                              | 8784
transaction services                    | 2079                                             | 1573
brokerage and asset management          | 161                                              | 759
local consumer lending 2014cards        | 112                                              | 4683 |


| _id | dd4bb6d3e |
| title |  |
| text | notes to consolidated financial statements ( continued ) 17 .
pension plans and postretirement health care and life insurance benefit plans ( continued ) benefit payments the following table sets forth amounts of benefits expected to be paid over the next ten years from the company 2019s pension and postretirement plans as of december 31 , 2004: .

18 .
stock compensation plans on may 18 , 2000 , the shareholders of the hartford approved the hartford incentive stock plan ( the 201c2000 plan 201d ) , which replaced the hartford 1995 incentive stock plan ( the 201c1995 plan 201d ) .
the terms of the 2000 plan were substantially similar to the terms of the 1995 plan except that the 1995 plan had an annual award limit and a higher maximum award limit .

under the 2000 plan , awards may be granted in the form of non-qualified or incentive stock options qualifying under section 422a of the internal revenue code , performance shares or restricted stock , or any combination of the foregoing .
in addition , stock appreciation rights may be granted in connection with all or part of any stock options granted under the 2000 plan .
in december 2004 , the 2000 plan was amended to allow for grants of restricted stock units effective as of january 1 , 2005 .

the aggregate number of shares of stock , which may be awarded , is subject to a maximum limit of 17211837 shares applicable to all awards for the ten-year duration of the 2000 plan .
all options granted have an exercise price equal to the market price of the company 2019s common stock on the date of grant , and an option 2019s maximum term is ten years and two days .

certain options become exercisable over a three year period commencing one year from the date of grant , while certain other options become exercisable upon the attainment of specified market price appreciation of the company 2019s common shares .
for any year , no individual employee may receive an award of options for more than 1000000 shares .
as of december 31 , 2004 , the hartford had not issued any incentive stock options under the 2000 plan .

performance awards of common stock granted under the 2000 plan become payable upon the attainment of specific performance goals achieved over a period of not less than one nor more than five years , and the restricted stock granted is subject to a restriction period .
on a cumulative basis , no more than 20% ( 20 % ) of the aggregate number of shares which may be awarded under the 2000 plan are available for performance shares and restricted stock awards .

also , the maximum award of performance shares for any individual employee in any year is 200000 shares .
in 2004 , 2003 and 2002 , the company granted shares of common stock of 315452 , 333712 and 40852 with weighted average prices of $ 64.93 , $ 38.13 and $ 62.28 , respectively , related to performance share and restricted stock awards .
in 1996 , the company established the hartford employee stock purchase plan ( 201cespp 201d ) .

under this plan , eligible employees of the hartford may purchase common stock of the company at a 15% ( 15 % ) discount from the lower of the closing market price at the beginning or end of the quarterly offering period .
the company may sell up to 5400000 shares of stock to eligible employees under the espp .
in 2004 , 2003 and 2002 , 345262 , 443467 and 408304 shares were sold , respectively .

the per share weighted average fair value of the discount under the espp was $ 9.31 , $ 11.96 , and $ 11.70 in 2004 , 2003 and 2002 , respectively .
additionally , during 1997 , the hartford established employee stock purchase plans for certain employees of the company 2019s international subsidiaries .
under these plans , participants may purchase common stock of the hartford at a fixed price at the end of a three-year period .
the activity under these programs is not material.

 |
| table | | pension benefits | other postretirement benefits
--------- | ---------------- | -----------------------------
2005      | $ 125            | $ 30
2006      | 132              | 31
2007      | 143              | 31
2008      | 154              | 33
2009      | 166              | 34
2010-2014 | 1052             | 193
total     | $ 1772           | $ 352 |


| _id | dd4c0a39e |
| title |  |
| text | advance auto parts , inc .
and subsidiaries notes to the consolidated financial statements 2013 ( continued ) december 29 , 2007 , december 30 , 2006 and december 31 , 2005 ( in thousands , except per share data ) 11 .
stock repurchase program : during fiscal 2007 , the company's board of directors authorized a new stock repurchase program of up to $ 500000 of the company's common stock plus related expenses .

the new program cancelled and replaced the remaining portion of the previous $ 300000 stock repurchase program .
the program allows the company to repurchase its common stock on the open market or in privately negotiated transactions from time to time in accordance with the requirements of the securities and exchange commission .

during fiscal 2007 , the company repurchased 8341 shares of common stock at an aggregate cost of $ 285869 , or an average price of $ 34.27 per share , of which 1330 shares of common stock were repurchased under the previous $ 300000 stock repurchase program .
as of december 29 , 2007 , 77 shares have been repurchased at an aggregate cost of $ 2959 and remained unsettled .
during fiscal 2007 , the company retired 6329 shares previously repurchased under the stock repurchase programs .

at december 29 , 2007 , the company had $ 260567 remaining under the current stock repurchase program .
subsequent to december 29 , 2007 , the company repurchased 4563 shares of common stock at an aggregate cost of $ 155350 , or an average price of $ 34.04 per share .
during fiscal 2006 , the company retired 5117 shares of common stock which were previously repurchased under the company 2019s prior stock repurchase program .

these shares were repurchased during fiscal 2006 and fiscal 2005 at an aggregate cost of $ 192339 , or an average price of $ 37.59 per share .
12 .
income taxes : as a result of the adoption of fin 48 on december 31 , 2006 , the company recorded an increase of $ 2275 to the liability for unrecognized tax benefits and a corresponding decrease in its balance of retained earnings .

the following table summarizes the activity related to our unrecognized tax benefits for the fiscal year ended december 29 , 2007: .

as of december 29 , 2007 the entire amount of unrecognized tax benefits , if recognized , would reduce the company 2019s annual effective tax rate .
with the adoption of fin 48 , the company provides for interest and penalties as a part of income tax expense .
during fiscal 2007 , the company accrued potential penalties and interest of $ 709 and $ 1827 , respectively , related to these unrecognized tax benefits .

as of december 29 , 2007 , the company has recorded a liability for potential penalties and interest of $ 1843 and $ 4421 , respectively .
prior to the adoption of fin 48 , the company classified interest associated with tax contingencies in interest expense .
the company has not provided for any penalties associated with tax contingencies unless considered probable of assessment .
the company does not expect its unrecognized tax benefits to change significantly over the next 12 months .

during the next 12 months , it is possible the company could conclude on $ 2000 to $ 3000 of the contingencies associated with unrecognized tax uncertainties due mainly to settlements and expiration of statute of limitations ( including tax benefits , interest and penalties ) .
the majority of these resolutions would be achieved through the completion of current income tax examinations.

 |
| table | balance at december 31 2006                             | $ 16453
------------------------------------------------------- | --------------
gross increases related to prior period tax positions   | 1279
gross decreases related to prior period tax positions   | -1853 ( 1853 )
gross increases related to current period tax positions | 5340
settlements                                             | -539 ( 539 )
expiration of statute of limitations                    | -271 ( 271 )
balance at december 29 2007                             | $ 20409 |


| _id | dd4c1bfb8 |
| title |  |
| text | year ended december 31 , 2006 compared to year ended december 31 , 2005 net revenues increased $ 149.6 million , or 53.2% ( 53.2 % ) , to $ 430.7 million in 2006 from $ 281.1 million in 2005 .
this increase was the result of increases in both our net sales and license revenues as noted in the product category table below. .

net sales increased $ 143.7 million , or 53.0% ( 53.0 % ) , to $ 415.0 million for the year ended december 31 , 2006 from $ 271.3 million during the same period in 2005 as noted in the table above .

the increase in net sales primarily reflects : 2022 $ 26.9 million of footwear product sales , primarily football cleats introduced in the second quarter of 2006 , and baseball cleats introduced in the fourth quarter of 2006 ; 2022 continued unit volume growth of our existing products , such as coldgear ae compression products , primarily sold to existing retail customers due to additional retail stores and expanded floor space ; 2022 growth in the average selling price of apparel products within all

selling price of apparel products within all categories ; 2022 increased women 2019s and youth market penetration by leveraging current customer relationships ; and 2022 product introductions subsequent to december 31 , 2005 within all product categories , most significantly in our compression and training products .

license revenues increased $ 5.9 million , or 60.8% ( 60.8 % ) , to $ 15.7 million for the year ended december 31 , 2006 from $ 9.8 million during the same period in 2005 .
this increase in license revenues was a result of increased sales by our licensees due to increased distribution , continued unit volume growth , new product offerings and new licensing agreements , which included distribution of products to college bookstores and golf pro shops .

gross profit increased $ 79.7 million to $ 215.6 million in 2006 from $ 135.9 million in 2005 .
gross profit as a percentage of net revenues , or gross margin , increased approximately 180 basis points to 50.1% ( 50.1 % ) in 2006 from 48.3% ( 48.3 % ) in 2005 .

this increase in gross margin was primarily driven by the following : 2022 lower product costs as a result of variations in product mix and greater supplier discounts for increased volume and lower cost sourcing arrangements , accounting for an approximate 170 basis point increase ; 2022 decreased close-out sales in the 2006 period compared to the 2005 period , accounting for an approximate 70 basis point increase ; 2022 lower customer incentives as a percentage of net revenues , primarily driven by

percentage of net revenues , primarily driven by changes to certain customer agreements which decreased discounts while increasing certain customer marketing expenditures recorded in selling , general and administrative expenses , accounting for an approximate 70 basis point increase;

 |
| table | ( in thousands )   | year ended december 31 , 2006 | year ended december 31 , 2005 | year ended december 31 , $ change | year ended december 31 , % (  % ) change
------------------ | ----------------------------- | ----------------------------- | --------------------------------- | ----------------------------------------
men 2019s          | $ 255681                      | $ 189596                      | $ 66085                           | 34.9% ( 34.9 % )
women 2019s        | 85695                         | 53500                         | 32195                             | 60.2% ( 60.2 % )
youth              | 31845                         | 18784                         | 13061                             | 69.5% ( 69.5 % )
apparel            | 373221                        | 261880                        | 111341                            | 42.5% ( 42.5 % )
footwear           | 26874                         | 2014                          | 26874                             | 2014
accessories        | 14897                         | 9409                          | 5488                              | 58.3% ( 58.3 % )
total net sales    | 414992                        | 271289                        | 143703                            | 53.0% ( 53.0 % )
license revenues   | 15697                         | 9764                          | 5933                              | 60.8% ( 60.8 % )
total net revenues | $ 430689                      | $ 281053                      | $ 149636                          | 53.2% ( 53.2 % ) |


| _id | dd4c52f04 |
| title |  |
| text | transactions arising from all matching buy/sell arrangements entered into before april 1 , 2006 will continue to be reported as separate sale and purchase transactions .
the adoption of eitf issue no .
04-13 and the change in the accounting for nontraditional derivative instruments had no effect on net income .
the amounts of revenues and cost of revenues recognized after april 1 , 2006 are less than the amounts that would have been recognized under previous accounting practices .
sfas no .

sfas no .
123 ( revised 2004 ) 2013 in december 2004 , the fasb issued sfas no .
123 ( r ) , 2018 2018share-based payment , 2019 2019 as a revision of sfas no .
123 , 2018 2018accounting for stock-based compensation . 2019 2019 this statement requires entities to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the grant date .

that cost is recognized over the period during which an employee is required to provide service in exchange for the award , usually the vesting period .
in addition , awards classified as liabilities are remeasured at fair value each reporting period .
marathon had previously adopted the fair value method under sfas no .
123 for grants made , modified or settled on or after january 1 , 2003 .
sfas no .

sfas no .
123 ( r ) also requires a company to calculate the pool of excess tax benefits available to absorb tax deficiencies recognized subsequent to adopting the statement .
in november 2005 , the fasb issued fsp no .
123r-3 , 2018 2018transition election related to accounting for the tax effects of share-based payment awards , 2019 2019 to provide an alternative transition election ( the 2018 2018short-cut method 2019 2019 ) to account for the tax effects of share-based payment awards to employees .

marathon elected the long-form method to determine its pool of excess tax benefits as of january 1 , 2006 .
marathon adopted sfas no .
123 ( r ) as of january 1 , 2006 , for all awards granted , modified or cancelled after adoption and for the unvested portion of awards outstanding at january 1 , 2006 .
at the date of adoption , sfas no .
123 ( r ) requires that an assumed forfeiture rate be applied to any unvested awards and that awards classified as liabilities be measured at fair value .

prior to adopting sfas no .
123 ( r ) , marathon recognized forfeitures as they occurred and applied the intrinsic value method to awards classified as liabilities .
the adoption did not have a significant effect on marathon 2019s consolidated results of operations , financial position or cash flows .
sfas no .
151 2013 effective january 1 , 2006 , marathon adopted sfas no .
151 , 2018 2018inventory costs 2013 an amendment of arb no .

43 , chapter 4 . 2019 2019 this statement requires that items such as idle facility expense , excessive spoilage , double freight and re-handling costs be recognized as a current-period charge .
the adoption did not have a significant effect on marathon 2019s consolidated results of operations , financial position or cash flows .
sfas no .
154 2013 effective january 1 , 2006 , marathon adopted sfas no .
154 , 2018 2018accounting changes and error corrections 2013 a replacement of apb opinion no .

20 and fasb statement no .
3 . 2019 2019 sfas no .
154 requires companies to recognize ( 1 ) voluntary changes in accounting principle and ( 2 ) changes required by a new accounting pronouncement , when the pronouncement does not include specific transition provisions , retrospectively to prior periods 2019 financial statements , unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change .
fin no .

fin no .
47 2013 in march 2005 , the fasb issued fasb interpretation ( 2018 2018fin 2019 2019 ) no .
47 , 2018 2018accounting for conditional asset retirement obligations 2013 an interpretation of fasb statement no .
143 . 2019 2019 this interpretation clarifies that an entity is required to recognize a liability for a legal obligation to perform asset retirement activities when the retirement is conditional on a future event if the liability 2019s fair value can be reasonably estimated .

if the liability 2019s fair value cannot be reasonably estimated , then the entity must disclose ( 1 ) a description of the obligation , ( 2 ) the fact that a liability has not been recognized because the fair value cannot be reasonably estimated and ( 3 ) the reasons why the fair value cannot be reasonably estimated .
fin no .
47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation .
marathon adopted fin no .

marathon adopted fin no .
47 as of december 31 , 2005 .
a charge of $ 19 million , net of taxes of $ 12 million , related to adopting fin no .
47 was recognized as a cumulative effect of a change in accounting principle in 2005 .
at the time of adoption , total assets increased $ 22 million and total liabilities increased $ 41 million .
the pro forma net income and net income per share effect as if fin no .
47 had been applied during 2005 and 2004 is not significantly different than amounts reported .

the following summarizes the total amount of the liability for asset retirement obligations as if fin no .
47 had been applied during all periods presented .
the pro forma impact of the adoption of fin no .
47 on these unaudited pro forma liability amounts has been measured using the information , assumptions and interest rates used to measure the obligation recognized upon adoption of fin no .
47 .
( in millions ) .

sfas no .
153 2013 marathon adopted sfas no .
153 , 2018 2018exchanges of nonmonetary assets 2013 an amendment of apb opinion no .
29 , 2019 2019 on a prospective basis as of july 1 , 2005 .
this amendment eliminates the apb opinion no .
29 exception for fair value recognition of nonmonetary exchanges of similar productive assets and replaces it with an exception for exchanges of nonmonetary assets that do not have commercial substance .
fsp no .

fsp no .
fas 19-1 2013 effective january 1 , 2005 , marathon adopted fsp no .
fas 19-1 , 2018 2018accounting for suspended well costs , 2019 2019 which amended the guidance for suspended exploratory well costs in sfas no .
19 , 2018 2018financial accounting and reporting by oil and gas producing companies . 2019 2019 sfas no .
19 requires costs of drilling exploratory wells to be capitalized pending determination of whether the well has found proved reserves .
when a classification of proved

 |
| table | december 31 2003 | $ 438
---------------- | -----
december 31 2004 | 527
december 31 2005 | 711 |


| _id | dd4bf4666 |
| title |  |
| text | 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 the related credit exposure , we continually monitor the credit worthiness of the financial institutions where we have deposits .

concentrations of credit risk with respect to trade accounts receivable are limited due to the wide variety of customers and markets in which we provide services , as well as the dispersion of our operations across many geographic areas .
we provide services to small-container , large-container , municipal and residential , and energy services customers in the united states and puerto rico .

we perform ongoing credit evaluations of our customers , but generally do not require collateral to support customer receivables .
we establish an allowance for doubtful accounts based on various factors including the credit risk of specific customers , age of receivables outstanding , historical trends , economic conditions and other information .

accounts receivable , net accounts receivable represent receivables from customers for collection , transfer , recycling , disposal , energy services and other services .
our receivables are recorded when billed or when the related revenue is earned , if earlier , and represent claims against third parties that will be settled in cash .
the carrying value of our receivables , net of the allowance for doubtful accounts and customer credits , represents their estimated net realizable value .

provisions for doubtful accounts are evaluated on a monthly basis and are recorded based on our historical collection experience , the age of the receivables , specific customer information and economic conditions .
we also review outstanding balances on an account-specific basis .
in general , reserves are provided for accounts receivable in excess of 90 days outstanding .
past due receivable balances are written-off when our collection efforts have been unsuccessful in collecting amounts due .

the following table reflects the activity in our allowance for doubtful accounts for the years ended december 31: .

restricted cash and marketable securities as of december 31 , 2017 , we had $ 141.1 million of restricted cash and marketable securities of which $ 71.4 million supports our insurance programs for workers 2019 compensation , commercial general liability , and commercial auto liability .
additionally , we obtain funds through the issuance of tax-exempt bonds for the purpose of financing qualifying expenditures at our landfills , transfer stations , collection and recycling centers .

the funds are deposited directly into trust accounts by the bonding authorities at the time of issuance .
as the use of these funds is contractually restricted , and we do not have the ability to use these funds for general operating purposes , they are classified as restricted cash and marketable securities in our consolidated balance sheets .

in the normal course of business , we may be required to provide financial assurance to governmental agencies and a variety of other entities in connection with municipal residential collection contracts , closure or post- closure of landfills , environmental remediation , environmental permits , and business licenses and permits as a financial guarantee of our performance .

at several of our landfills , we satisfy financial assurance requirements by depositing cash into restricted trust funds or escrow accounts .
property and equipment we record property and equipment at cost .
expenditures for major additions and improvements to facilities are capitalized , while maintenance and repairs are charged to expense as incurred .
when property is retired or

 |
| table | | 2017           | 2016           | 2015
---------------------------- | -------------- | -------------- | --------------
balance at beginning of year | $ 44.0         | $ 46.7         | $ 38.9
additions charged to expense | 30.6           | 20.4           | 22.7
accounts written-off         | -35.7 ( 35.7 ) | -23.1 ( 23.1 ) | -14.9 ( 14.9 )
balance at end of year       | $ 38.9         | $ 44.0         | $ 46.7 |


| _id | dd4bdbcc4 |
| title |  |
| text | scheduled maturities of our marketable securities are as follows: .

as of may 27 , 2018 , we did not any have cash and cash equivalents pledged as collateral for derivative contracts .
as of may 27 , 2018 , $ 0.9 million of certain accounts receivable were pledged as collateral against a foreign uncommitted line of credit .
the fair value and carrying amounts of long-term debt , including the current portion , were $ 14169.7 million and $ 14268.8 million , respectively , as of may 27 , 2018 .

the fair value of long-term debt was estimated using market quotations and discounted cash flows based on our current incremental borrowing rates for similar types of instruments .
long-term debt is a level 2 liability in the fair value hierarchy .
risk management activities as a part of our ongoing operations , we are exposed to market risks such as changes in interest and foreign currency exchange rates and commodity and equity prices .

to manage these risks , we may enter into various derivative transactions ( e.g. , futures , options , and swaps ) pursuant to our established policies .
commodity price risk many commodities we use in the production and distribution of our products are exposed to market price risks .
we utilize derivatives to manage price risk for our principal ingredients and energy costs , including grains ( oats , wheat , and corn ) , oils ( principally soybean ) , dairy products , natural gas , and diesel fuel .

our primary objective when entering into these derivative contracts is to achieve certainty with regard to the future price of commodities purchased for use in our supply chain .
we manage our exposures through a combination of purchase orders , long-term contracts with suppliers , exchange-traded futures and options , and over-the-counter options and swaps .

we offset our exposures based on current and projected market conditions and generally seek to acquire the inputs at as close to our planned cost as possible .
we use derivatives to manage our exposure to changes in commodity prices .
we do not perform the assessments required to achieve hedge accounting for commodity derivative positions .
accordingly , the changes in the values of these derivatives are recorded currently in cost of sales in our consolidated statements of earnings .

although we do not meet the criteria for cash flow hedge accounting , we believe that these instruments are effective in achieving our objective of providing certainty in the future price of commodities purchased for use in our supply chain .
accordingly , for purposes of measuring segment operating performance these gains and losses are reported in unallocated corporate items outside of segment operating results until such time that the exposure we are managing affects earnings .

at that time we reclassify the gain or loss from unallocated corporate items to segment operating profit , allowing our operating segments to realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility , which remains in unallocated corporate items.

 |
| table | in millions              | available for sale cost | available for sale fair value
------------------------ | ----------------------- | -----------------------------
under 1 year ( current ) | $ 25.4                  | $ 25.4
equity securities        | 0.3                     | 3.5
total                    | $ 25.7                  | $ 28.9 |


| _id | dd4c3ecde |
| title |  |
| text | arconic and its subsidiaries file income tax returns in the u.s .
federal jurisdiction and various states and foreign jurisdictions .
with a few minor exceptions , arconic is no longer subject to income tax examinations by tax authorities for years prior to 2006 .
all u.s .
tax years prior to 2016 have been audited by the internal revenue service .
various state and foreign jurisdiction tax authorities are in the process of examining arconic 2019s income tax returns for various tax years through 2015 .

a reconciliation of the beginning and ending amount of unrecognized tax benefits ( excluding interest and penalties ) was as follows: .

for all periods presented , a portion of the balance at end of year pertains to state tax liabilities , which are presented before any offset for federal tax benefits .
the effect of unrecognized tax benefits , if recorded , that would impact the annual effective tax rate for 2016 , 2015 , and 2014 would be approximately 6% ( 6 % ) , 7% ( 7 % ) , and 4% ( 4 % ) , respectively , of pretax book income .

arconic does not anticipate that changes in its unrecognized tax benefits will have a material impact on the statement of consolidated operations during 2017 ( see tax in note l for a matter for which no reserve has been recognized ) .
it is arconic 2019s policy to recognize interest and penalties related to income taxes as a component of the provision for income taxes on the accompanying statement of consolidated operations .

in 2016 , 2015 , and 2014 , arconic did not recognize any interest or penalties .
due to the expiration of the statute of limitations , settlements with tax authorities , and refunded overpayments , arconic recognized interest income of $ 1 in 2015 but did not recognize any interest income in 2016 or 2014 .
as of december 31 , 2016 and 2015 , the amount accrued for the payment of interest and penalties was $ 2 and $ 1 , respectively .
s .

s .
receivables sale of receivables programs arconic has an arrangement with three financial institutions to sell certain customer receivables without recourse on a revolving basis .
the sale of such receivables is completed through the use of a bankruptcy remote special purpose entity , which is a consolidated subsidiary of arconic .
this arrangement provides for minimum funding of $ 200 up to a maximum of $ 400 for receivables sold .

on march 30 , 2012 , arconic initially sold $ 304 of customer receivables in exchange for $ 50 in cash and $ 254 of deferred purchase price under this arrangement .
arconic has received additional net cash funding of $ 300 for receivables sold ( $ 1758 in draws and $ 1458 in repayments ) since the program 2019s inception , including $ 100 ( $ 500 in draws and $ 400 in repayments ) in 2016 .
no draws or repayments occurred in 2015 .

no draws or repayments occurred in 2015 .
as of december 31 , 2016 and 2015 , the deferred purchase price receivable was $ 83 and $ 249 , respectively , which was included in other receivables on the accompanying consolidated balance sheet .
the deferred purchase price receivable is reduced as collections of the underlying receivables occur ; however , as this is a revolving program , the sale of new receivables will result in an increase in the deferred purchase price receivable .

the net change in the deferred purchase price receivable was reflected in the ( increase ) decrease in receivables line item on the accompanying statement of consolidated cash flows .
this activity is reflected as an operating cash flow because the related customer receivables are the result of an operating activity with an insignificant , short-term interest rate risk.

 |
| table | december 31,                                    | 2016     | 2015     | 2014
----------------------------------------------- | -------- | -------- | --------
balance at beginning of year                    | $ 18     | $ 7      | $ 8
additions for tax positions of the current year | 12       | -        | -
additions for tax positions of prior years      | -        | 14       | 4
reductions for tax positions of prior years     | -        | -2 ( 2 ) | -3 ( 3 )
settlements with tax authorities                | -1 ( 1 ) | -        | -1 ( 1 )
expiration of the statute of limitations        | -1 ( 1 ) | -1 ( 1 ) | -
foreign currency translation                    | -        | -        | -1 ( 1 )
balance at end of year                          | $ 28     | $ 18     | $ 7 |


| _id | dd4c38ce4 |
| title |  |
| text | management 2019s discussion and analysis of financial condition and results of operations ( continued ) the following results drove changes in ccg operating income by approximately the amounts indicated: .

1 higher gross margin from higher ccg platform revenue was driven by higher average selling prices on notebook and desktop platforms , offset by lower desktop and notebook platform unit sales .
2 lower gross margin from lower ccg platform revenue was driven by lower desktop and notebook platform unit sales , partially offset by higher average selling prices on desktop , notebook , and tablet platforms .

data center group segment product overview the dcg operating segment offers platforms designed to provide leading energy-efficient performance for all server , network , and storage applications .
in addition , dcg focuses on lowering the total cost of ownership on other specific workload- optimizations for the enterprise , cloud service providers , and communications service provider market segments .

in 2016 , we launched the following platforms with an array of functionalities and advancements : 2022 intel ae xeon ae processor e5 v4 family , the foundation for high performing clouds and delivers energy-efficient performance for server , network , and storage workloads .

2022 intel xeon processor e7 v4 family , targeted at platforms requiring four or more cpus ; this processor family delivers high performance and is optimized for real-time analytics and in-memory computing , along with industry-leading reliability , availability , and serviceability .

2022 intel ae xeon phi 2122 product family , formerly code-named knights landing , with up to 72 high-performance intel processor cores , integrated memory and fabric , and a common software programming model with intel xeon processors .
the intel xeon phi product family is designed for highly parallel compute and memory bandwidth-intensive workloads .

intel xeon phi processors are positioned to increase the performance of supercomputers , enabling trillions of calculations per second , and to address emerging data analytics and artificial intelligence solutions .

in 2017 , we expect to release our next generation of intel xeon processors for compute , storage , and network ; a next-generation intel xeon phi processor optimized for deep learning ; and a suite of single-socket products , including next-generation intel xeon e3 processors , next-generation intel atom processors , and next-generation intel xeon-d processors for dense solutions.

 |
| table | ( in millions ) | operating income reconciliation
--------------- | -----------------------------------------------------------------------------------------
$ 10646         | 2016 ccg operating income
1250            | lower ccg platform unit cost
905             | lower ccg operating expense
625             | higher gross margin from ccg platform revenue1
-645 ( 645 )    | higher factory start-up costs primarily driven by the ramp of our 10nm process technology
345             | other
$ 8166          | 2015 ccg operating income
-2060 ( 2060 )  | higher ccg platform unit costs
-1565 ( 1565 )  | lower gross margin from ccg platform revenue2
435             | lower factory start-up costs primarily driven by the ramp of our 14nm process technology
430             | lower production costs primarily on our 14nm products treated as period charges in 2014
375             | lower operating expense
224             | other
$ 10327         | 2014 ccg operating income |


| _id | dd4ba91e8 |
| title |  |
| text | entergy texas , inc .
management's financial discussion and analysis net revenue 2008 compared to 2007 net revenue consists of operating revenues net of : 1 ) fuel , fuel-related expenses , and gas purchased for resale , 2 ) purchased power expenses , and 3 ) other regulatory charges .
following is an analysis of the change in net revenue comparing 2008 to 2007 .
amount ( in millions ) .

the volume/weather variance is primarily due to decreased usage during the unbilled sales period .
see "critical accounting estimates" below and note 1 to the financial statements for further discussion of the accounting for unbilled revenues .
the reserve equalization variance is primarily due to lower reserve equalization revenue related to changes in the entergy system generation mix compared to the same period in 2007 .

the securitization transition charge variance is primarily due to the issuance of securitization bonds .
in june 2007 , entergy gulf states reconstruction funding i , a company wholly-owned and consolidated by entergy texas , issued securitization bonds and with the proceeds purchased from entergy texas the transition property , which is the right to recover from customers through a transition charge amounts sufficient to service the securitization bonds .

see note 5 to the financial statements for additional information regarding the securitization bonds .
the fuel recovery variance is primarily due to a reserve for potential rate refunds made in the first quarter 2007 as a result of a puct ruling related to the application of past puct rulings addressing transition to competition in texas .
the other variance is primarily caused by various operational effects of the jurisdictional separation on revenues and fuel and purchased power expenses .

gross operating revenues , fuel and purchased power expenses , and other regulatory charges gross operating revenues increased $ 229.3 million primarily due to the following reasons : an increase of $ 157 million in fuel cost recovery revenues due to higher fuel rates and increased usage , partially offset by interim fuel refunds to customers for fuel cost recovery over-collections through november 2007 .
the refund was distributed over a two-month period beginning february 2008 .

the interim refund and the puct approval is discussed in note 2 to the financial statements ; an increase of $ 37.1 million in affiliated wholesale revenue primarily due to increases in the cost of energy ; an increase in transition charge amounts collected from customers to service the securitization bonds as discussed above .

see note 5 to the financial statements for additional information regarding the securitization bonds ; and implementation of an interim surcharge to collect $ 10.3 million in under-recovered incremental purchased capacity costs incurred through july 2007 .
the surcharge was collected over a two-month period beginning february 2008 .
the incremental capacity recovery rider and puct approval is discussed in note 2 to the financial statements.

 |
| table | | amount ( in millions )
-------------------------------- | ----------------------
2007 net revenue                 | $ 442.3
volume/weather                   | -4.6 ( 4.6 )
reserve equalization             | -3.3 ( 3.3 )
securitization transition charge | 9.1
fuel recovery                    | 7.5
other                            | -10.1 ( 10.1 )
2008 net revenue                 | $ 440.9 |


| _id | dd4bbdb16 |
| title |  |
| text | table of contents performance graph the following performance graph shows the cumulative total return to a holder of the company 2019s common stock , assuming dividend reinvestment , compared with the cumulative total return , assuming dividend reinvestment , of the standard & poor ( "s&p" ) 500 index and the dow jones us financials index during the period from december 31 , 2010 through december 31 , 2015. .

 |
| table | | 12/10  | 12/11  | 12/12  | 12/13  | 12/14  | 12/15
----------------------------- | ------ | ------ | ------ | ------ | ------ | ------
e*trade financial corporation | 100.00 | 49.75  | 55.94  | 122.75 | 151.59 | 185.25
s&p 500 index                 | 100.00 | 102.11 | 118.45 | 156.82 | 178.29 | 180.75
dow jones us financials index | 100.00 | 87.16  | 110.56 | 148.39 | 170.04 | 170.19 |


| _id | dd4bd52b6 |
| title |  |
| text | page 30 of 94 are included in capital spending amounts .
another example is the company 2019s decision in 2007 to contribute an additional $ 44.5 million ( $ 27.3 million ) to its pension plans as part of its overall debt reduction plan .
based on this , our consolidated free cash flow is summarized as follows: .

based on information currently available , we estimate cash flows from operating activities for 2008 to be approximately $ 650 million , capital spending to be approximately $ 350 million and free cash flow to be in the $ 300 million range .
capital spending of $ 259.9 million ( net of $ 48.6 million in insurance recoveries ) in 2007 was below depreciation and amortization expense of $ 281 million .

we continue to invest capital in our best performing operations , including projects to increase custom can capabilities , improve beverage can and end making productivity and add more beverage can capacity in europe , as well as expenditures in the aerospace and technologies segment .
of the $ 350 million of planned capital spending for 2008 , approximately $ 180 million will be spent on top-line sales growth projects .

debt facilities and refinancing interest-bearing debt at december 31 , 2007 , decreased $ 93.1 million to $ 2358.6 million from $ 2451.7 million at december 31 , 2006 .
the 2007 debt decrease from 2006 was primarily attributed to debt payments offset by higher foreign exchange rates .
at december 31 , 2007 , $ 705 million was available under the company 2019s multi-currency revolving credit facilities .

the company also had $ 345 million of short-term uncommitted credit facilities available at the end of the year , of which $ 49.7 million was outstanding .
on october 13 , 2005 , ball refinanced its senior secured credit facilities and during the third and fourth quarters of 2005 , ball redeemed its 7.75% ( 7.75 % ) senior notes due august 2006 primarily through the drawdown of funds under the new credit facilities .

the refinancing and redemption resulted in a pretax debt refinancing charge of $ 19.3 million ( $ 12.3 million after tax ) to reflect the call premium associated with the senior notes and the write off of unamortized debt issuance costs .
the company has a receivables sales agreement that provides for the ongoing , revolving sale of a designated pool of trade accounts receivable of ball 2019s north american packaging operations , up to $ 250 million .

the agreement qualifies as off-balance sheet financing under the provisions of statement of financial accounting standards ( sfas ) no .
140 , as amended by sfas no .
156 .
net funds received from the sale of the accounts receivable totaled $ 170 million and $ 201.3 million at december 31 , 2007 and 2006 , respectively , and are reflected as a reduction of accounts receivable in the consolidated balance sheets .

the company was not in default of any loan agreement at december 31 , 2007 , and has met all payment obligations .
the u.s .
note agreements , bank credit agreement and industrial development revenue bond agreements contain certain restrictions relating to dividends , investments , financial ratios , guarantees and the incurrence of additional indebtedness .

additional details about the company 2019s receivables sales agreement and debt are available in notes 7 and 13 , respectively , accompanying the consolidated financial statements within item 8 of this report.

 |
| table | ( $ in millions )                               | 2007             | 2006             | 2005
----------------------------------------------- | ---------------- | ---------------- | ----------------
cash flows from operating activities            | $ 673.0          | $ 401.4          | $ 558.8
incremental pension funding net of tax          | 27.3             | 2013             | 2013
capital spending                                | -308.5 ( 308.5 ) | -279.6 ( 279.6 ) | -291.7 ( 291.7 )
proceeds for replacement of fire-damaged assets | 48.6             | 61.3             | 2013
free cash flow                                  | $ 440.4          | $ 183.1          | $ 267.1 |


| _id | dd4b9306e |
| title |  |
| text | the company 2019s 2017 reported tax rate includes $ 160.9 million of net tax benefits associated with the tax act , $ 6.2 million of net tax benefits on special gains and charges , and net tax benefits of $ 25.3 million associated with discrete tax items .

in connection with the company 2019s initial analysis of the impact of the tax act , as noted above , a provisional net discrete tax benefit of $ 160.9 million was recorded in the period ended december 31 , 2017 , which includes $ 321.0 million tax benefit for recording deferred tax assets and liabilities at the u.s .
enacted tax rate , and a net expense for the one-time transition tax of $ 160.1 million .
while the company was able to make an estimate of the impact of the reduction in the u.s .

rate on deferred tax assets and liabilities and the one-time transition tax , it may be affected by other analyses related to the tax act , as indicated above .
special ( gains ) and charges represent the tax impact of special ( gains ) and charges , as well as additional tax benefits utilized in anticipation of u.s .
tax reform of $ 7.8 million .

tax reform of $ 7.8 million .
during 2017 , the company recorded a discrete tax benefit of $ 39.7 million related to excess tax benefits , resulting from the adoption of accounting changes regarding the treatment of tax benefits on share-based compensation .
the extent of excess tax benefits is subject to variation in stock price and stock option exercises .
in addition , the company recorded net discrete expenses of $ 14.4 million related to recognizing adjustments from filing the 2016 u.s .

federal income tax return and international adjustments due to changes in estimates , partially offset by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in state tax matters .
during 2016 , the company recognized net expense related to discrete tax items of $ 3.9 million .
the net expenses were driven primarily by recognizing adjustments from filing the company 2019s 2015 u.s .

federal income tax return , partially offset by settlement of international tax matters and remeasurement of certain deferred tax assets and liabilities resulting from the application of updated tax rates in international jurisdictions .
net expense was also impacted by adjustments to deferred tax asset and liability positions and the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-u.s .
jurisdictions .

jurisdictions .
during 2015 , the company recognized net benefits related to discrete tax items of $ 63.3 million .
the net benefits were driven primarily by the release of $ 20.6 million of valuation allowances , based on the realizability of foreign deferred tax assets and the ability to recognize a worthless stock deduction of $ 39.0 million for the tax basis in a wholly-owned domestic subsidiary .

a reconciliation of the beginning and ending amount of gross liability for unrecognized tax benefits is as follows: .

the total amount of unrecognized tax benefits , if recognized would have affected the effective tax rate by $ 47.1 million as of december 31 , 2017 , $ 57.5 million as of december 31 , 2016 and $ 59.2 million as of december 31 , 2015 .
the company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes .
during 2017 , 2016 and 2015 the company released $ 0.9 million , $ 2.9 million and $ 1.4 million related to interest and penalties , respectively .

the company had $ 9.3 million , $ 10.2 million and $ 13.1 million of accrued interest , including minor amounts for penalties , at december 31 , 2017 , 2016 , and 2015 , respectively.

 |
| table | ( millions )                                                 | 2017           | 2016         | 2015
------------------------------------------------------------ | -------------- | ------------ | ------------
balance at beginning of year                                 | $ 75.9         | $ 74.6       | $ 78.7
additions based on tax positions related to the current year | 3.2            | 8.8          | 5.8
additions for tax positions of prior years                   | -              | 2.1          | 0.9
reductions for tax positions of prior years                  | -4.9 ( 4.9 )   | -1.0 ( 1.0 ) | -8.8 ( 8.8 )
reductions for tax positions due to statute of limitations   | -14.0 ( 14.0 ) | -5.5 ( 5.5 ) | -1.6 ( 1.6 )
settlements                                                  | -10.8 ( 10.8 ) | -2.0 ( 2.0 ) | -4.2 ( 4.2 )
assumed in connection with acquisitions                      | 10.0           | -            | 8.0
foreign currency translation                                 | 2.1            | -1.1 ( 1.1 ) | -4.2 ( 4.2 )
balance at end of year                                       | $ 61.5         | $ 75.9       | $ 74.6 |


| _id | dd4bd4532 |
| title |  |
| text | 57management's discussion and analysis of financial condition and results of operations facility include covenants relating to net interest coverage and total debt-to-book capitalization ratios .
the company was in compliance with the terms of the 3-year credit facility at december 31 , 2005 .
the company has never borrowed under its domestic revolving credit facilities .
utilization of the non-u.s .

utilization of the non-u.s .
credit facilities may also be dependent on the company's ability to meet certain conditions at the time a borrowing is requested .

contractual obligations , guarantees , and other purchase commitments contractual obligations summarized in the table below are the company's obligations and commitments to make future payments under debt obligations ( assuming earliest possible exercise of put rights by holders ) , lease payment obligations , and purchase obligations as of december 31 , 2005 .
payments due by period ( 1 ) ( in millions ) total 2006 2007 2008 2009 2010 thereafter .

( 1 ) amounts included represent firm , non-cancelable commitments .
debt obligations : at december 31 , 2005 , the company's long-term debt obligations , including current maturities and unamortized discount and issue costs , totaled $ 4.0 billion , as compared to $ 5.0 billion at december 31 , 2004 .
a table of all outstanding long-term debt securities can be found in note 4 , ""debt and credit facilities'' to the company's consolidated financial statements .

as previously discussed , the decrease in the long- term debt obligations as compared to december 31 , 2004 , was due to the redemptions and repurchases of $ 1.0 billion principal amount of outstanding securities during 2005 .
also , as previously discussed , the remaining $ 118 million of 7.6% ( 7.6 % ) notes due january 1 , 2007 were reclassified to current maturities of long-term debt .

lease obligations : the company owns most of its major facilities , but does lease certain office , factory and warehouse space , land , and information technology and other equipment under principally non-cancelable operating leases .
at december 31 , 2005 , future minimum lease obligations , net of minimum sublease rentals , totaled $ 1.2 billion .
rental expense , net of sublease income , was $ 254 million in 2005 , $ 217 million in 2004 and $ 223 million in 2003 .

purchase obligations : the company has entered into agreements for the purchase of inventory , license of software , promotional agreements , and research and development agreements which are firm commitments and are not cancelable .
the longest of these agreements extends through 2015 .
total payments expected to be made under these agreements total $ 992 million .

commitments under other long-term agreements : the company has entered into certain long-term agreements to purchase software , components , supplies and materials from suppliers .
most of the agreements extend for periods of one to three years ( three to five years for software ) .
however , generally these agreements do not obligate the company to make any purchases , and many permit the company to terminate the agreement with advance notice ( usually ranging from 60 to 180 days ) .

if the company were to terminate these agreements , it generally would be liable for certain termination charges , typically based on work performed and supplier on-hand inventory and raw materials attributable to canceled orders .

the company's liability would only arise in the event it terminates the agreements for reasons other than ""cause.'' in 2003 , the company entered into outsourcing contracts for certain corporate functions , such as benefit administration and information technology related services .
these contracts generally extend for 10 years and are expected to expire in 2013 .
the total payments under these contracts are approximately $ 3 billion over 10 years ; however , these contracts can be terminated .

termination would result in a penalty substantially less than the annual contract payments .
the company would also be required to find another source for these services , including the possibility of performing them in-house .

as is customary in bidding for and completing network infrastructure projects and pursuant to a practice the company has followed for many years , the company has a number of performance/bid bonds and standby letters of credit outstanding , primarily relating to projects of government and enterprise mobility solutions segment and the networks segment .
these instruments normally have maturities of up to three years and are standard in the

 |
| table | ( in millions )               | payments due by period ( 1 ) total | payments due by period ( 1 ) 2006 | payments due by period ( 1 ) 2007 | payments due by period ( 1 ) 2008 | payments due by period ( 1 ) 2009 | payments due by period ( 1 ) 2010 | payments due by period ( 1 ) thereafter
----------------------------- | ---------------------------------- | --------------------------------- | --------------------------------- | --------------------------------- | --------------------------------- | --------------------------------- | ---------------------------------------
long-term debt obligations    | $ 4033                             | $ 119                             | $ 1222                            | $ 200                             | $ 2                               | $ 529                             | $ 1961
lease obligations             | 1150                               | 438                               | 190                               | 134                               | 109                               | 84                                | 195
purchase obligations          | 992                                | 418                               | 28                                | 3                                 | 2                                 | 2                                 | 539
total contractual obligations | $ 6175                             | $ 975                             | $ 1440                            | $ 337                             | $ 113                             | $ 615                             | $ 2695 |


| _id | dd4b8d254 |
| title |  |
| text | aeronautics 2019 operating profit for 2011 increased $ 132 million , or 9% ( 9 % ) , compared to 2010 .
the increase primarily was attributable to approximately $ 115 million of higher operating profit on c-130 programs due to increased volume and the retirement of risks ; increased volume and risk retirements on f-16 programs of about $ 50 million and c-5 programs of approximately $ 20 million ; and about $ 70 million due to risk retirements on other aeronautics sustainment activities in 2011 .

these increases partially were offset by a decline in operating profit of approximately $ 75 million on the f-22 program and f-35 development contract primarily due to lower volume and about $ 55 million on other programs , including f-35 lrip , primarily due to lower profit rate adjustments in 2011 compared to 2010 .
adjustments not related to volume , including net profit rate adjustments described above , were approximately $ 90 million higher in 2011 compared to 2010 .

backlog backlog decreased in 2012 compared to 2011 mainly due to lower orders on f-35 contracts and c-130 programs , partially offset by higher orders on f-16 programs .
backlog increased in 2011 compared to 2010 mainly due to higher orders on f-35 contracts , which partially were offset by higher sales volume on the c-130 programs .
trends we expect aeronautics will experience a mid single digit percentage range decline in net sales for 2013 as compared to 2012 .

a decrease in net sales from a decline in f-16 and c-130j aircraft deliveries is expected to be partially offset by an increase in net sales volume on f-35 lrip contracts .
operating profit is projected to decrease at a high single digit percentage range from 2012 levels due to the expected decline in net sales as well as changes in aircraft mix , resulting in a slight decline in operating margins between the years .

information systems & global solutions our is&gs business segment provides management services , integrated information technology solutions , and advanced technology systems and expertise across a broad spectrum of applications for civil , defense , intelligence , and other government customers .
is&gs has a portfolio of many smaller contracts as compared to our other business segments .

is&gs has been impacted by the continuing downturn in the federal information technology budgets and the impact of the continuing resolution that was effective on october 1 , 2012 , the start of the u.s .
government 2019s fiscal year .
is&gs 2019 operating results included the following ( in millions ) : .

2012 compared to 2011 is&gs 2019 net sales for 2012 decreased $ 535 million , or 6% ( 6 % ) , compared to 2011 .
the decrease was attributable to lower net sales of approximately $ 485 million due to the substantial completion of various programs during 2011 ( primarily jtrs ; odin ; and u.k .

census ) ; and about $ 255 million due to lower volume on numerous other programs ( primarily hanford ; warfighter information network-tactical ( win-t ) ; command , control , battle management and communications ( c2bmc ) ; and transportation worker identification credential ( twic ) ) .

partially offsetting the decreases were higher net sales of approximately $ 140 million from qtc , which was acquired early in the fourth quarter of 2011 ; and about $ 65 million from increased activity on numerous other programs , primarily federal cyber security programs and persistent threat detection system ( ptds ) operational support .
is&gs 2019 operating profit for 2012 decreased $ 66 million , or 8% ( 8 % ) , compared to 2011 .

the decrease was attributable to lower operating profit of approximately $ 50 million due to the favorable impact of the odin contract completion in 2011 ; about $ 25 million due to an increase in reserves for performance issues related to an international airborne surveillance system in 2012 ; and approximately $ 20 million due to lower volume on certain programs ( primarily c2bmc and win-t ) .

partially offsetting the decreases was an increase in operating profit due to higher risk retirements of approximately $ 15 million from the twic program ; and about $ 10 million due to increased activity on numerous other programs , primarily federal cyber security programs and ptds operational support .
operating profit for the jtrs program was comparable as a decrease in volume was offset by a decrease in reserves .

adjustments not related to volume , including net profit booking rate adjustments and other matters described above , were approximately $ 20 million higher for 2012 compared to 2011.

 |
| table | | 2012           | 2011           | 2010
------------------- | -------------- | -------------- | --------------
net sales           | $ 8846         | $ 9381         | $ 9921
operating profit    | 808            | 874            | 814
operating margins   | 9.1% ( 9.1 % ) | 9.3% ( 9.3 % ) | 8.2% ( 8.2 % )
backlog at year-end | 8700           | 9300           | 9700 |


| _id | dd4bee9d2 |
| title |  |
| text | the following table sets forth information concerning increases in the total number of our aap stores during the past five years : beginning stores new stores ( 1 ) stores closed ending stores ( 1 ) does not include stores that opened as relocations of previously existing stores within the same general market area or substantial renovations of stores .

our store-based information systems , which are designed to improve the efficiency of our operations and enhance customer service , are comprised of a proprietary pos system and electronic parts catalog , or epc , system .
information maintained by our pos system is used to formulate pricing , marketing and merchandising strategies and to replenish inventory accurately and rapidly .

our pos system is fully integrated with our epc system and enables our store team members to assist our customers in their parts selection and ordering based on the year , make , model and engine type of their vehicles .
our centrally-based epc data management system enables us to reduce the time needed to ( i ) exchange data with our vendors and ( ii ) catalog and deliver updated , accurate parts information .

our epc system also contains enhanced search engines and user-friendly navigation tools that enhance our team members' ability to look up any needed parts as well as additional products the customer needs to complete an automotive repair project .
if a hard-to-find part or accessory is not available at one of our stores , the epc system can determine whether the part is carried and in-stock through our hub or pdq ae networks or can be ordered directly from one of our vendors .

available parts and accessories are then ordered electronically from another store , hub , pdq ae or directly from the vendor with immediate confirmation of price , availability and estimated delivery time .
we also support our store operations with additional proprietary systems and customer driven labor scheduling capabilities .
our store-level inventory management system provides real-time inventory tracking at the store level .

with the store-level system , store team members can check the quantity of on-hand inventory for any sku , adjust stock levels for select items for store specific events , automatically process returns and defective merchandise , designate skus for cycle counts and track merchandise transfers .
our stores use radio frequency hand-held devices to help ensure the accuracy of our inventory .

our standard operating procedure , or sop , system is a web-based , electronic data management system that provides our team members with instant access to any of our standard operating procedures through a comprehensive on-line search function .
all of these systems are tightly integrated and provide real-time , comprehensive information to store personnel , resulting in improved customer service levels , team member productivity and in-stock availability .

purchasing for virtually all of the merchandise for our stores is handled by our merchandise teams located in three primary locations : 2022 store support center in roanoke , virginia ; 2022 regional office in minneapolis , minnesota ; and 2022 global sourcing office in taipei , taiwan .
our roanoke team is primarily responsible for the parts categories and our minnesota team is primarily responsible for accessories , oil and chemicals .
our global sourcing team works closely with both teams .

in fiscal 2011 , we purchased merchandise from approximately 500 vendors , with no single vendor accounting for more than 9% ( 9 % ) of purchases .
our purchasing strategy involves negotiating agreements with most of our vendors to purchase merchandise over a specified period of time along with other terms , including pricing , payment terms and volume .

the merchandising team has developed strong vendor relationships in the industry and , in a collaborative effort with our vendor partners , utilizes a category management process where we manage the mix of our product offerings to meet customer demand .
we believe this process , which develops a customer-focused business plan for each merchandise category , and our global sourcing operation are critical to improving comparable store sales , gross margin and inventory productivity. .

the following table sets forth information concerning increases in the total number of our aap stores during the past five years : beginning stores new stores ( 1 ) stores closed ending stores ( 1 ) does not include stores that opened as relocations of previously existing stores within the same general market area or substantial renovations of stores .

our store-based information systems , which are designed to improve the efficiency of our operations and enhance customer service , are comprised of a proprietary pos system and electronic parts catalog , or epc , system .
information maintained by our pos system is used to formulate pricing , marketing and merchandising strategies and to replenish inventory accurately and rapidly .

our pos system is fully integrated with our epc system and enables our store team members to assist our customers in their parts selection and ordering based on the year , make , model and engine type of their vehicles .
our centrally-based epc data management system enables us to reduce the time needed to ( i ) exchange data with our vendors and ( ii ) catalog and deliver updated , accurate parts information .

our epc system also contains enhanced search engines and user-friendly navigation tools that enhance our team members' ability to look up any needed parts as well as additional products the customer needs to complete an automotive repair project .
if a hard-to-find part or accessory is not available at one of our stores , the epc system can determine whether the part is carried and in-stock through our hub or pdq ae networks or can be ordered directly from one of our vendors .

available parts and accessories are then ordered electronically from another store , hub , pdq ae or directly from the vendor with immediate confirmation of price , availability and estimated delivery time .
we also support our store operations with additional proprietary systems and customer driven labor scheduling capabilities .
our store-level inventory management system provides real-time inventory tracking at the store level .

with the store-level system , store team members can check the quantity of on-hand inventory for any sku , adjust stock levels for select items for store specific events , automatically process returns and defective merchandise , designate skus for cycle counts and track merchandise transfers .
our stores use radio frequency hand-held devices to help ensure the accuracy of our inventory .

our standard operating procedure , or sop , system is a web-based , electronic data management system that provides our team members with instant access to any of our standard operating procedures through a comprehensive on-line search function .
all of these systems are tightly integrated and provide real-time , comprehensive information to store personnel , resulting in improved customer service levels , team member productivity and in-stock availability .

purchasing for virtually all of the merchandise for our stores is handled by our merchandise teams located in three primary locations : 2022 store support center in roanoke , virginia ; 2022 regional office in minneapolis , minnesota ; and 2022 global sourcing office in taipei , taiwan .
our roanoke team is primarily responsible for the parts categories and our minnesota team is primarily responsible for accessories , oil and chemicals .
our global sourcing team works closely with both teams .

in fiscal 2011 , we purchased merchandise from approximately 500 vendors , with no single vendor accounting for more than 9% ( 9 % ) of purchases .
our purchasing strategy involves negotiating agreements with most of our vendors to purchase merchandise over a specified period of time along with other terms , including pricing , payment terms and volume .

the merchandising team has developed strong vendor relationships in the industry and , in a collaborative effort with our vendor partners , utilizes a category management process where we manage the mix of our product offerings to meet customer demand .
we believe this process , which develops a customer-focused business plan for each merchandise category , and our global sourcing operation are critical to improving comparable store sales , gross margin and inventory productivity.

 |
| table | | 2011     | 2010     | 2009       | 2008       | 2007
---------------- | -------- | -------- | ---------- | ---------- | ----------
beginning stores | 3369     | 3264     | 3243       | 3153       | 2995
new stores ( 1 ) | 95       | 110      | 75         | 109        | 175
stores closed    | -4 ( 4 ) | -5 ( 5 ) | -54 ( 54 ) | -19 ( 19 ) | -17 ( 17 )
ending stores    | 3460     | 3369     | 3264       | 3243       | 3153 |


| _id | dd4bca352 |
| title |  |
| text | proved reserves can be added as expansions are permitted , funding is approved and certain stipulations of the joint venture agreement are satisfied .
the following table sets forth changes in estimated quantities of net proved bitumen reserves for the year 2008 .
estimated quantities of proved bitumen reserves ( millions of barrels ) 2008 .

( a ) revisions were driven primarily by price and the impact of the new royalty regime discussed below .
the above estimated quantity of net proved bitumen reserves is a forward-looking statement and is based on a number of assumptions , including ( among others ) commodity prices , volumes in-place , presently known physical data , recoverability of bitumen , industry economic conditions , levels of cash flow from operations , and other operating considerations .

to the extent these assumptions prove inaccurate , actual recoveries could be different than current estimates .
for a discussion of the proved bitumen reserves estimation process , see item 7 .
management 2019s discussion and analysis of financial condition and results of operations 2013 critical accounting estimates 2013 estimated net recoverable reserve quantities 2013 proved bitumen reserves .

operations at the aosp are not within the scope of statement of financial accounting standards ( 201csfas 201d ) no .
25 , 201csuspension of certain accounting requirements for oil and gas producing companies ( an amendment of financial accounting standards board ( 201cfasb 201d ) statement no .
19 ) , 201d sfas no .

19 ) , 201d sfas no .
69 , 201cdisclosures about oil and gas producing activities ( an amendment of fasb statements 19 , 25 , 33 and 39 ) , 201d and securities and exchange commission ( 201csec 201d ) rule 4-10 of regulation s-x ; therefore , bitumen production and reserves are not included in our supplementary information on oil and gas producing activities .

the sec has recently issued a release amending these disclosure requirements effective for annual reports on form 10-k for fiscal years ending on or after december 31 , 2009 , see item 7 .
management 2019s discussion and analysis of financial condition and results of operations 2013 accounting standards not yet adopted for additional information .
prior to our acquisition of western , the first fully-integrated expansion of the existing aosp facilities was approved in 2006 .

expansion 1 , which includes construction of mining and extraction facilities at the jackpine mine , expansion of treatment facilities at the existing muskeg river mine , expansion of the scotford upgrader and development of related infrastructure , is anticipated to begin operations in late 2010 or 2011 .
when expansion 1 is complete , we will have more than 50000 bpd of net production and upgrading capacity in the canadian oil sands .

the timing and scope of future expansions and debottlenecking opportunities on existing operations remain under review .
during 2008 , the alberta government accepted the project 2019s application to have a portion of the expansion 1 capital costs form part of the muskeg river mine 2019s allowable cost recovery pool .
due to commodity price declines in the year , royalties for 2008 were one percent of the gross mine revenue .

commencing january 1 , 2009 , the alberta royalty regime has been amended such that royalty rates will be based on the canadian dollar ( 201ccad 201d ) equivalent monthly average west texas intermediate ( 201cwti 201d ) price .
royalty rates will rise from a minimum of one percent to a maximum of nine percent under the gross revenue method and from a minimum of 25 percent to a maximum of 40 percent under the net revenue method .

under both methods , the minimum royalty is based on a wti price of $ 55.00 cad per barrel and below while the maximum royalty is reached at a wti price of $ 120.00 cad per barrel and above , with a linear increase in royalty between the aforementioned prices .
the above discussion of the oil sands mining segment includes forward-looking statements concerning the anticipated completion of aosp expansion 1 .

factors which could affect the expansion project include transportation logistics , availability of materials and labor , unforeseen hazards such as weather conditions , delays in obtaining or conditions imposed by necessary government and third-party approvals and other risks customarily associated with construction projects .

refining , marketing and transportation refining we own and operate seven refineries in the gulf coast , midwest and upper great plains regions of the united states with an aggregate refining capacity of 1.016 million barrels per day ( 201cmmbpd 201d ) of crude oil .
during 2008

 |
| table | ( millions of barrels )              | 2008
------------------------------------ | ----------
beginning of year                    | 421
revisions ( a )                      | -30 ( 30 )
extensions discoveries and additions | 6
production                           | -9 ( 9 )
end of year                          | 388 |


| _id | dd4be481a |
| title |  |
| text | management 2019s discussion and analysis of financial condition and results of operations ( continued ) liquidity and capital resources snap-on 2019s growth has historically been funded by a combination of cash provided by operating activities and debt financing .

snap-on believes that its cash from operations and collections of finance receivables , coupled with its sources of borrowings and available cash on hand , are sufficient to fund its currently anticipated requirements for scheduled debt payments ( including the march 2014 repayment of $ 100.0 million of 5.85% ( 5.85 % ) unsecured notes upon maturity ) , payments of interest and dividends , new receivables originated by our financial services businesses , capital expenditures , working capital ,

, capital expenditures , working capital , restructuring activities , the funding of pension plans , and funding for additional share repurchases and acquisitions , if any .

due to snap-on 2019s credit rating over the years , external funds have been available at an acceptable cost .
as of the close of business on february 7 , 2014 , snap-on 2019s long-term debt and commercial paper were rated , respectively , a3 and p-2 by moody 2019s investors service ; a- and a-2 by standard & poor 2019s ; and a- and f2 by fitch ratings .

snap-on believes that its current credit arrangements are sound and that the strength of its balance sheet affords the company the financial flexibility to respond to both internal growth opportunities and those available through acquisitions .
however , snap-on cannot provide any assurances of the availability of future financing or the terms on which it might be available , or that its debt ratings may not decrease .

the following discussion focuses on information included in the accompanying consolidated balance sheets .
as of 2013 year end , working capital ( current assets less current liabilities ) of $ 1080.8 million increased $ 1.0 million from $ 1079.8 million as of 2012 year end .
the following represents the company 2019s working capital position as of 2013 and 2012 year end : ( amounts in millions ) 2013 2012 .

cash and cash equivalents of $ 217.6 million as of 2013 year end compared to cash and cash equivalents of $ 214.5 million at 2012 year end .

the $ 3.1 million net increase in cash and cash equivalents includes the impacts of ( i ) $ 508.8 million of cash from collections of finance receivables ; ( ii ) $ 392.6 million of cash generated from operations , net of $ 24.3 million of discretionary cash contributions to the company 2019s pension plans ; ( iii ) $ 29.2 million of cash proceeds from stock purchase and option plan exercises ; and ( iv ) $ 8.4 million of cash proceeds from the sale of property and equipment .

these increases in cash and cash equivalents were largely offset by ( i ) the funding of $ 651.3 million of new finance receivables ; ( ii ) dividend payments to shareholders of $ 92.0 million ; ( iii ) the repurchase of 926000 shares of the company 2019s common stock for $ 82.6 million ; ( iv ) the funding of $ 70.6 million of capital expenditures ; and ( v ) the may 2013 acquisition of challenger for a cash purchase price of $ 38.2 million .

of the $ 217.6 million of cash and cash equivalents as of 2013 year end , $ 124.3 million was held outside of the united states .
snap-on considers these non-u.s .
funds as permanently invested in its foreign operations to ( i ) provide adequate working capital ; ( ii ) satisfy various regulatory requirements ; and/or ( iii ) take advantage of business expansion opportunities as they arise ; as such , the company does not presently expect to repatriate these funds to fund its u.s .

operations or obligations .
the repatriation of cash from certain foreign subsidiaries could have adverse net tax consequences on the company should snap-on be required to pay and record u.s .
income taxes and foreign withholding taxes on funds that were previously considered permanently invested .
alternatively , the repatriation of such cash from certain other foreign subsidiaries could result in favorable net tax consequences for the company .

snap-on periodically evaluates opportunities to repatriate certain foreign cash amounts to the extent that it does not incur additional unfavorable net tax consequences .
46 snap-on incorporated

 |
| table | ( amounts in millions )                                | 2013             | 2012
------------------------------------------------------ | ---------------- | ----------------
cash and cash equivalents                              | $ 217.6          | $ 214.5
trade and other accounts receivable 2013 net           | 531.6            | 497.9
finance receivables 2013 net                           | 374.6            | 323.1
contract receivables 2013 net                          | 68.4             | 62.7
inventories 2013 net                                   | 434.4            | 404.2
other current assets                                   | 169.6            | 166.6
total current assets                                   | 1796.2           | 1669.0
notes payable and current maturities of long-term debt | -113.1 ( 113.1 ) | -5.2 ( 5.2 )
accounts payable                                       | -155.6 ( 155.6 ) | -142.5 ( 142.5 )
other current liabilities                              | -446.7 ( 446.7 ) | -441.5 ( 441.5 )
total current liabilities                              | -715.4 ( 715.4 ) | -589.2 ( 589.2 )
working capital                                        | $ 1080.8         | $ 1079.8 |


| _id | dd4c5dbb6 |
| title |  |
| text | future minimum lease payments for all non-cancelable operating leases at may 31 , 2013 were as follows : fiscal years ending may 31: .

we are party to a number of claims and lawsuits incidental to our business .
in our opinion , the liabilities , if any , which may ultimately result from the outcome of such matters , individually or in the aggregate , are not expected to have a material adverse impact on our financial position , liquidity or results of operations .
operating taxes we define operating taxes as taxes that are unrelated to income taxes , such as sales , property , value-add and other business taxes .

during the course of operations , we must interpret the meaning of various operating tax matters in the united states and in the foreign jurisdictions in which we do business .
taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to such operating tax matters , which could result in the payment of additional taxes in those jurisdictions .

as of may 31 , 2013 and 2012 , we did not have liabilities for contingencies related to operating tax items based on management 2019s best estimate given our history with similar matters and interpretations of current laws and regulations .
bin/ica agreements we have entered into sponsorship or depository and processing agreements with certain banks .

these agreements allow us to use the banks 2019 identification numbers , referred to as bank identification number ( 201cbin 201d ) for visa transactions and interbank card association ( 201cica 201d ) number for mastercard transactions , to clear credit card transactions through visa and mastercard .
certain of such agreements contain financial covenants , and we were in compliance with all such covenants as of may 31 , 2013 .

our canadian visa sponsorship , which was originally obtained through a canadian financial institution , expired in march 2011 .
we have filed an application with the office of the superintendent of financial institutions canada ( 201cosfi 201d ) for the formation of a wholly owned loan company in canada which would serve as our financial institution sponsor .

on december 12 , 2012 , the loan company received a restricted order to commence and carry on business from osfi which will enable the loan company to become a direct visa member at such time that global payments concludes the appropriate bin transfer process with visa .
in march 2011 , we obtained temporary direct participation in the visa canada system , while the loan company application was pending .
we anticipate that the bin transfer process with visa will be completed by september 30 , 2013.

 |
| table | 2014                                | $ 11057
----------------------------------- | -------
2015                                | 8985
2016                                | 7378
2017                                | 6700
2018                                | 6164
thereafter                          | 16812
total future minimum lease payments | $ 57096 |


| _id | dd4befcce |
| title |  |
| text | interest expense .

interest incurred increased $ .5 as interest expense associated with financing the lu'an joint venture was mostly offset by favorable impacts from currency , a lower average interest rate on the debt portfolio , and a lower average debt balance .
capitalized interest decreased 31% ( 31 % ) , or $ 6.0 , due to a decrease in the carrying value of projects under construction , primarily driven by the lu'an project in asia .

other non-operating income ( expense ) , net other non-operating income ( expense ) , net of $ 66.7 increased $ 61.6 , primarily due to lower pension settlement losses , higher non-service pension income , and higher interest income on cash and cash items .
the prior year included pension settlement losses of $ 43.7 ( $ 33.2 after-tax , or $ .15 per share ) primarily in connection with the transfer of certain pension assets and payment obligations to an insurer for our u.s .
salaried and hourly plans .

salaried and hourly plans .
in fiscal year 2019 , we recognized a pension settlement loss of $ 5.0 ( $ 3.8 after-tax , or $ .02 per share ) associated with the u.s .
supplementary pension plan during the second quarter .
net income and net income margin net income of $ 1809.4 increased 18% ( 18 % ) , or $ 276.5 , primarily due to impacts from the u.s .
tax cuts and jobs act , positive pricing , and favorable volumes .
net income margin of 20.3% ( 20.3 % ) increased 310 bp .

adjusted ebitda and adjusted ebitda margin adjusted ebitda of $ 3468.0 increased 11% ( 11 % ) , or $ 352.5 , primarily due to positive pricing and higher volumes , partially offset by unfavorable currency .
adjusted ebitda margin of 38.9% ( 38.9 % ) increased 400 bp , primarily due to higher volumes , positive pricing , and the india contract modification .
the india contract modification contributed 80 bp .

effective tax rate the effective tax rate equals the income tax provision divided by income from continuing operations before taxes .
the effective tax rate was 21.0% ( 21.0 % ) and 26.0% ( 26.0 % ) in fiscal years 2019 and 2018 , respectively .
the current year rate was lower primarily due to impacts related to the enactment of the u.s .
tax cuts and jobs act ( the 201ctax act" ) in 2018 , which significantly changed existing u.s .

tax laws , including a reduction in the federal corporate income tax rate from 35% ( 35 % ) to 21% ( 21 % ) , a deemed repatriation tax on unremitted foreign earnings , as well as other changes .
as a result of the tax act , our income tax provision reflects discrete net income tax costs of $ 43.8 and $ 180.6 in fiscal years 2019 and 2018 , respectively .
the current year included a cost of $ 56.2 ( $ .26 per share ) for the reversal of a benefit recorded in 2018 related to the u.s .

taxation of deemed foreign dividends .
we recorded this reversal based on regulations issued in 2019 .
the 2019 reversal was partially offset by a favorable adjustment of $ 12.4 ( $ .06 per share ) that was recorded as we completed our estimates of the impacts of the tax act .
this adjustment is primarily related to foreign tax items , including the deemed repatriation tax for foreign tax redeterminations .

in addition , the current year rate included a net gain on the exchange of two equity affiliates of $ 29.1 , which was not a taxable transaction .
the higher 2018 expense resulting from the tax act was partially offset by a $ 35.7 tax benefit from the restructuring of foreign subsidiaries , a $ 9.1 benefit from a foreign audit settlement agreement , and higher excess tax benefits on share-based compensation .

the adjusted effective tax rate was 19.4% ( 19.4 % ) and 18.6% ( 18.6 % ) in fiscal years 2019 and 2018 , respectively .
the lower prior year rate was primarily due to the $ 9.1 benefit from a foreign audit settlement agreement and higher excess tax benefits on share-based compensation.

 |
| table | | 2019    | 2018
--------------------------- | ------- | -------
interest incurred           | $ 150.5 | $ 150.0
less : capitalized interest | 13.5    | 19.5
interest expense            | $ 137.0 | $ 130.5 |


| _id | dd4c5304e |
| title |  |
| text | ( b ) as of december 31 , 2014 , the total amount authorized under the stock repurchase program was $ 5.5 billion and we had remaining authorization of $ 738 million for future repurchases under our common stock repurchase program , which will expire on february 3 , 2016 .

under the stock repurchase program , management is authorized to purchase shares of the company's common stock from time to time through open market purchases or privately negotiated transactions at prevailing prices as permitted by securities laws and other legal requirements , and subject to stock price , business and market conditions and other factors .
we have been funding and expect to continue to fund stock repurchases through a combination of cash on hand and cash generated by operations .

in the future , we may also choose to fund our stock repurchase program under our revolving credit facility or future financing transactions .
there were no repurchases of our series a and b common stock during the three months ended december 31 , 2014 .
the company first announced its stock repurchase program on august 3 , 2010 .

stock performance graph the following graph sets forth the cumulative total shareholder return on our series a common stock , series b common stock and series c common stock as compared with the cumulative total return of the companies listed in the standard and poor 2019s 500 stock index ( 201cs&p 500 index 201d ) and a peer group of companies comprised of cbs corporation class b common stock , scripps network interactive , inc. , time warner , inc. , twenty-first century fox , inc .

class a common stock ( news corporation class a common stock prior to june 2013 ) , viacom , inc .
class b common stock and the walt disney company .
the graph assumes $ 100 originally invested on december 31 , 2009 in each of our series a common stock , series b common stock and series c common stock , the s&p 500 index , and the stock of our peer group companies , including reinvestment of dividends , for the years ended december 31 , 2010 , 2011 , 2012 , 2013 and 2014 .

december 31 , december 31 , december 31 , december 31 , december 31 , december 31 .

equity compensation plan information information regarding securities authorized for issuance under equity compensation plans will be set forth in our definitive proxy statement for our 2015 annual meeting of stockholders under the caption 201csecurities authorized for issuance under equity compensation plans , 201d which is incorporated herein by reference.

 |
| table | | december 312009 | december 312010 | december 312011 | december 312012 | december 312013 | december 312014
---------- | --------------- | --------------- | --------------- | --------------- | --------------- | ---------------
disca      | $ 100.00        | $ 135.96        | $ 133.58        | $ 206.98        | $ 294.82        | $ 224.65
discb      | $ 100.00        | $ 138.79        | $ 133.61        | $ 200.95        | $ 290.40        | $ 233.86
disck      | $ 100.00        | $ 138.35        | $ 142.16        | $ 220.59        | $ 316.21        | $ 254.30
s&p 500    | $ 100.00        | $ 112.78        | $ 112.78        | $ 127.90        | $ 165.76        | $ 184.64
peer group | $ 100.00        | $ 118.40        | $ 135.18        | $ 182.38        | $ 291.88        | $ 319.28 |