| _id | dd4bc12fc |
| title |  |
| text | cash flows from operations .

in fiscal 2018 , cash provided by operations was $ 2.8 billion compared to $ 2.4 billion in fiscal 2017 .
the $ 426 million increase was primarily driven by the $ 462 million increase in net earnings and the $ 736 million change in current assets and liabilities , partially offset by a $ 688 million change in deferred income taxes .
the change in deferred income taxes was primarily related to the $ 638 million provisional benefit from revaluing our net u.s .

deferred tax liabilities to reflect the new u.s .
corporate tax rate as a result of the tcja .
the $ 736 million change in current assets and liabilities was primarily due to changes in accounts payable of $ 476 million related to the extension of payment terms and timing of payments , and $ 264 million of changes in other current liabilities primarily driven by changes in income taxes payable , trade and advertising accruals , and incentive accruals .

we strive to grow core working capital at or below the rate of growth in our net sales .
for fiscal 2018 , core working capital decreased 27 percent , compared to a net sales increase of 1 percent .
in fiscal 2017 , core working capital increased 9 percent , compared to a net sales decline of 6 percent , and in fiscal 2016 , core working capital decreased 41 percent , compared to net sales decline of 6 percent .

in fiscal 2017 , our operations generated $ 2.4 billion of cash , compared to $ 2.8 billion in fiscal 2016 .
the $ 349 million decrease was primarily driven by a $ 493 million change in current assets and liabilities .
the $ 493 million change in current assets and liabilities was primarily due to changes in other current liabilities driven by changes in income taxes payable , a decrease in incentive accruals , and changes in trade and advertising accruals due to reduced spending .

the change in current assets and liabilities was also impacted by the timing of accounts payable .
additionally , we recorded a $ 14 million loss on a divestiture during fiscal 2017 , compared to a $ 148 million net gain on divestitures during fiscal 2016 , and classified the related cash flows as investing activities.

 |
| table | in millions                                                                                | fiscal year 2018 | fiscal year 2017 | fiscal year 2016
----------------------------------------------------------------------------------------------- | ---------------- | ---------------- | ----------------
net earnings including earnings attributable to redeemable and noncontrollinginterests          | $ 2163.0         | $ 1701.1         | $ 1736.8
depreciation and amortization                                                                   | 618.8            | 603.6            | 608.1
after-taxearnings from joint ventures                                                           | -84.7 ( 84.7 )   | -85.0 ( 85.0 )   | -88.4 ( 88.4 )
distributions of earnings from joint ventures                                                   | 113.2            | 75.6             | 75.1
stock-based compensation                                                                        | 77.0             | 95.7             | 89.8
deferred income taxes                                                                           | -504.3 ( 504.3 ) | 183.9            | 120.6
pension and other postretirement benefit plan contributions                                     | -31.8 ( 31.8 )   | -45.4 ( 45.4 )   | -47.8 ( 47.8 )
pension and other postretirement benefit plan costs                                             | 4.6              | 35.7             | 118.1
divestitures loss ( gain )                                                                      | -                | 13.5             | -148.2 ( 148.2 )
restructuring impairment and other exit costs                                                   | 126.0            | 117.0            | 107.2
changes in current assets and liabilities excluding the effects of acquisitions anddivestitures | 542.1            | -194.2 ( 194.2 ) | 298.5
other net                                                                                | -182.9 ( 182.9 ) | -86.3 ( 86.3 )   | -105.6 ( 105.6 )
net cash provided by operating activities                                                       | $ 2841.0         | $ 2415.2         | $ 2764.2 |


| _id | dd497774e |
| title |  |
| text | the fair value of the psu award at the date of grant is amortized to expense over the performance period , which is typically three years after the date of the award , or upon death , disability or reaching the age of 58 .
as of december 31 , 2017 , pmi had $ 34 million of total unrecognized compensation cost related to non-vested psu awards .
this cost is recognized over a weighted-average performance cycle period of two years , or upon death , disability or reaching the age of 58 .

during the years ended december 31 , 2017 , and 2016 , there were no psu awards that vested .
pmi did not grant any psu awards during note 10 .
earnings per share : unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and therefore are included in pmi 2019s earnings per share calculation pursuant to the two-class method .
basic and diluted earnings per share ( 201ceps 201d ) were calculated using the following: .

for the 2017 , 2016 and 2015 computations , there were no antidilutive stock options.

 |
| table | ( in millions )                                                                        | for the years ended december 31 , 2017 | for the years ended december 31 , 2016 | for the years ended december 31 , 2015
-------------------------------------------------------------------------------------- | -------------------------------------- | -------------------------------------- | --------------------------------------
net earnings attributable to pmi                                                       | $ 6035                                 | $ 6967                                 | $ 6873
less distributed and undistributed earnings attributable to share-based payment awards | 14                                     | 19                                     | 24
net earnings for basic and diluted eps                                                 | $ 6021                                 | $ 6948                                 | $ 6849
weighted-average shares for basic eps                                                  | 1552                                   | 1551                                   | 1549
plus contingently issuable performance stock units ( psus )                            | 1                                      | 2014                                   | 2014
weighted-average shares for diluted eps                                                | 1553                                   | 1551                                   | 1549 |


| _id | dd4981082 |
| title |  |
| text | entergy corporation notes to consolidated financial statements ( d ) the bonds are subject to mandatory tender for purchase from the holders at 100% ( 100 % ) of the principal amount outstanding on october 1 , 2003 and will then be remarketed .
( e ) on june 1 , 2002 , entergy louisiana remarketed $ 55 million st .
charles parish pollution control revenue refunding bonds due 2030 , resetting the interest rate to 4.9% ( 4.9 % ) through may 2005 .

( f ) the bonds are subject to mandatory tender for purchase from the holders at 100% ( 100 % ) of the principal amount outstanding on june 1 , 2005 and will then be remarketed .
( g ) the fair value excludes lease obligations , long-term doe obligations , and other long-term debt and includes debt due within one year .
it is determined using bid prices reported by dealer markets and by nationally recognized investment banking firms .

the annual long-term debt maturities ( excluding lease obligations ) and annual cash sinking fund requirements for debt outstanding as of december 31 , 2002 , for the next five years are as follows ( in thousands ) : .

not included are other sinking fund requirements of approximately $ 30.2 million annually , which may be satisfied by cash or by certification of property additions at the rate of 167% ( 167 % ) of such requirements .
in december 2002 , when the damhead creek project was sold , the buyer of the project assumed all obligations under the damhead creek credit facilities and the damhead creek interest rate swap agreements .

in november 2000 , entergy's non-utility nuclear business purchased the fitzpatrick and indian point 3 power plants in a seller-financed transaction .
entergy issued notes to nypa with seven annual installments of approximately $ 108 million commencing one year from the date of the closing , and eight annual installments of $ 20 million commencing eight years from the date of the closing .
these notes do not have a stated interest rate , but have an implicit interest rate of 4.8% ( 4.8 % ) .

in accordance with the purchase agreement with nypa , the purchase of indian point 2 resulted in entergy's non-utility nuclear business becoming liable to nypa for an additional $ 10 million per year for 10 years , beginning in september 2003 .
this liability was recorded upon the purchase of indian point 2 in september 2001 .
covenants in the entergy corporation 7.75% ( 7.75 % ) notes require it to maintain a consolidated debt ratio of 65% ( 65 % ) or less of its total capitalization .

if entergy's debt ratio exceeds this limit , or if entergy or certain of the domestic utility companies default on other credit facilities or are in bankruptcy or insolvency proceedings , an acceleration of the facility's maturity may occur .
in january 2003 , entergy paid in full , at maturity , the outstanding debt relating to the top of iowa wind project .

capital funds agreement pursuant to an agreement with certain creditors , entergy corporation has agreed to supply system energy with sufficient capital to : fffd maintain system energy's equity capital at a minimum of 35% ( 35 % ) of its total capitalization ( excluding short-term debt ) ; fffd permit the continued commercial operation of grand gulf 1 ; fffd pay in full all system energy indebtedness for borrowed money when due ; and fffd enable system energy to make payments on specific system energy

energy to make payments on specific system energy debt , under supplements to the agreement assigning system energy's rights in the agreement as security for the specific debt.

 |
| table | 2003 | $ 1150786
---- | ---------
2004 | $ 925005
2005 | $ 540372
2006 | $ 139952
2007 | $ 475288 |


| _id | dd4b894d8 |
| title |  |
| text | item 5 .
market for the registrant 2019s common equity , related stockholder matters and issuer purchases of equity securities the following graph compares annual total return of our common stock , the standard & poor 2019s 500 composite stock index ( 201cs&p 500 index 201d ) and our peer group ( 201cloews peer group 201d ) for the five years ended december 31 , 2016 .

the graph assumes that the value of the investment in our common stock , the s&p 500 index and the loews peer group was $ 100 on december 31 , 2011 and that all dividends were reinvested. .

( a ) the loews peer group consists of the following companies that are industry competitors of our principal operating subsidiaries : chubb limited ( name change from ace limited after it acquired the chubb corporation on january 15 , 2016 ) , w.r .
berkley corporation , the chubb corporation ( included through january 15 , 2016 when it was acquired by ace limited ) , energy transfer partners l.p. , ensco plc , the hartford financial services group , inc. , kinder morgan energy partners , l.p .

( included through november 26 , 2014 when it was acquired by kinder morgan inc. ) , noble corporation , spectra energy corp , transocean ltd .
and the travelers companies , inc .
dividend information we have paid quarterly cash dividends in each year since 1967 .
regular dividends of $ 0.0625 per share of loews common stock were paid in each calendar quarter of 2016 and 2015.

 |
| table | | 2011  | 2012   | 2013   | 2014   | 2015   | 2016
---------------------- | ----- | ------ | ------ | ------ | ------ | ------
loews common stock     | 100.0 | 108.91 | 129.64 | 113.59 | 104.47 | 128.19
s&p 500 index          | 100.0 | 116.00 | 153.57 | 174.60 | 177.01 | 198.18
loews peer group ( a ) | 100.0 | 113.39 | 142.85 | 150.44 | 142.44 | 165.34 |


| _id | dd4c1fcb2 |
| title |  |
| text | the aes corporation notes to consolidated financial statements 2014 ( continued ) december 31 , 2017 , 2016 , and 2015 the total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax benefits within 12 months of december 31 , 2017 is estimated to be between $ 5 million and $ 15 million , primarily relating to statute of limitation lapses and tax exam settlements .

the following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for the periods indicated ( in millions ) : .

the company and certain of its subsidiaries are currently under examination by the relevant taxing authorities for various tax years .
the company regularly assesses the potential outcome of these examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded .

while it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position , we believe we have appropriately accrued for our uncertain tax benefits .
however , audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits and the range of anticipated increases or decreases in unrecognized tax benefits are subject to significant uncertainty .

it is possible that the ultimate outcome of current or future examinations may exceed our provision for current unrecognized tax benefits in amounts that could be material , but cannot be estimated as of december 31 , 2017 .
our effective tax rate and net income in any given future period could therefore be materially impacted .
21 .

21 .
discontinued operations due to a portfolio evaluation in the first half of 2016 , management decided to pursue a strategic shift of its distribution companies in brazil , sul and eletropaulo , to reduce the company's exposure to the brazilian distribution market .

eletropaulo 2014 in november 2017 , eletropaulo converted its preferred shares into ordinary shares and transitioned the listing of those shares into the novo mercado , which is a listing segment of the brazilian stock exchange with the highest standards of corporate governance .
upon conversion of the preferred shares into ordinary shares , aes no longer controlled eletropaulo , but maintained significant influence over the business .
as a result , the company deconsolidated eletropaulo .

after deconsolidation , the company's 17% ( 17 % ) ownership interest is reflected as an equity method investment .
the company recorded an after-tax loss on deconsolidation of $ 611 million , which primarily consisted of $ 455 million related to cumulative translation losses and $ 243 million related to pension losses reclassified from aocl .
in december 2017 , all the remaining criteria were met for eletropaulo to qualify as a discontinued operation .

therefore , its results of operations and financial position were reported as such in the consolidated financial statements for all periods presented .
eletropaulo's pre-tax loss attributable to aes , including the loss on deconsolidation , for the years ended december 31 , 2017 and 2016 was $ 633 million and $ 192 million , respectively .
eletropaulo's pre-tax income attributable to aes for the year ended december 31 , 2015 was $ 73 million .

prior to its classification as discontinued operations , eletropaulo was reported in the brazil sbu reportable segment .
sul 2014 the company executed an agreement for the sale of sul , a wholly-owned subsidiary , in june 2016 .
the results of operations and financial position of sul are reported as discontinued operations in the consolidated financial statements for all periods presented .

upon meeting the held-for-sale criteria , the company recognized an after-tax loss of $ 382 million comprised of a pre-tax impairment charge of $ 783 million , offset by a tax benefit of $ 266 million related to the impairment of the sul long lived assets and a tax benefit of $ 135 million for deferred taxes related to the investment in sul .
prior to the impairment charge , the carrying value of the sul asset group of $ 1.6 billion was greater than its approximate fair value less costs to sell .

however , the impairment charge was limited to the carrying value of the long lived assets of the sul disposal group .
on october 31 , 2016 , the company completed the sale of sul and received final proceeds less costs to sell of $ 484 million , excluding contingent consideration .
upon disposal of sul , the company incurred an additional after-tax

 |
| table | december 31,                                | 2017     | 2016       | 2015
------------------------------------------- | -------- | ---------- | ----------
balance at january 1                        | $ 352    | $ 364      | $ 384
additions for current year tax positions    | 2014     | 2          | 2
additions for tax positions of prior years  | 2        | 1          | 12
reductions for tax positions of prior years | -5 ( 5 ) | -1 ( 1 )   | -7 ( 7 )
effects of foreign currency translation     | 2014     | 2014       | -3 ( 3 )
settlements                                 | 2014     | -13 ( 13 ) | -17 ( 17 )
lapse of statute of limitations             | -1 ( 1 ) | -1 ( 1 )   | -7 ( 7 )
balance at december 31                      | $ 348    | $ 352      | $ 364 |


| _id | dd4b88fc4 |
| title |  |
| text | risks related to our common stock our stock price is extremely volatile .
the trading price of our common stock has been extremely volatile and may continue to be volatile in the future .

many factors could have an impact on our stock price , including fluctuations in our or our competitors 2019 operating results , clinical trial results or adverse events associated with our products , product development by us or our competitors , changes in laws , including healthcare , tax or intellectual property laws , intellectual property developments , changes in reimbursement or drug pricing , the existence or outcome of litigation or government proceedings , including the sec/doj investigation ,

, including the sec/doj investigation , failure to resolve , delays in resolving or other developments with respect to the issues raised in the warning letter , acquisitions or other strategic transactions , and the perceptions of our investors that we are not performing or meeting expectations .

the trading price of the common stock of many biopharmaceutical companies , including ours , has experienced extreme price and volume fluctuations , which have at times been unrelated to the operating performance of the companies whose stocks were affected .
anti-takeover provisions in our charter and bylaws and under delaware law could make a third-party acquisition of us difficult and may frustrate any attempt to remove or replace our current management .

our corporate charter and by-law provisions may discourage certain types of transactions involving an actual or potential change of control that might be beneficial to us or our stockholders .

our bylaws provide that special meetings of our stockholders may be called only by the chairman of the board , the president , the secretary , or a majority of the board of directors , or upon the written request of stockholders who together own of record 25% ( 25 % ) of the outstanding stock of all classes entitled to vote at such meeting .
our bylaws also specify that the authorized number of directors may be changed only by resolution of the board of directors .

our charter does not include a provision for cumulative voting for directors , which may have enabled a minority stockholder holding a sufficient percentage of a class of shares to elect one or more directors .
under our charter , our board of directors has the authority , without further action by stockholders , to designate up to 5 shares of preferred stock in one or more series .

the rights of the holders of common stock will be subject to , and may be adversely affected by , the rights of the holders of any class or series of preferred stock that may be issued in the future .
because we are a delaware corporation , the anti-takeover provisions of delaware law could make it more difficult for a third party to acquire control of us , even if the change in control would be beneficial to stockholders .

we are subject to the provisions of section 203 of the delaware general laws , which prohibits a person who owns in excess of 15% ( 15 % ) of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% ( 15 % ) of our outstanding voting stock , unless the merger or combination is approved in a prescribed manner .
item 1b .
unresolved staff comments .
item 2 .
properties .

unresolved staff comments .
item 2 .
properties .
we conduct our primary operations at the owned and leased facilities described below .
location operations conducted approximate square feet expiration new haven , connecticut corporate headquarters and executive , sales , research and development offices 514000 2030 dublin , ireland global supply chain , distribution , and administration offices 160000 owned .

we believe that our administrative office space is adequate to meet our needs for the foreseeable future .
we also believe that our research and development facilities and our manufacturing facilities , together with third party manufacturing facilities , will be adequate for our on-going activities .
in addition to the locations above , we also lease space in other u.s .
locations and in foreign countries to support our operations as a global organization.

 |
| table | location                | operations conducted                                                        | approximatesquare feet | leaseexpirationdates
----------------------- | --------------------------------------------------------------------------- | ---------------------- | --------------------
new haven connecticut   | corporate headquarters and executive sales research and development offices | 514000                 | 2030
dublin ireland          | global supply chain distribution and administration offices                 | 160000                 | owned
athlone ireland         | commercial research and development manufacturing                           | 80000                  | owned
lexington massachusetts | research and development offices                                            | 81000                  | 2019
bogart georgia          | commercial research and development manufacturing                           | 70000                  | owned
smithfield rhode island | commercial research and development manufacturing                           | 67000                  | owned
zurich switzerland      | regional executive and sales offices                                        | 69000                  | 2025 |


| _id | dd4c5093e |
| title |  |
| text | as of december 31 , 2015 , the future minimum payments due under the lease financing obligation were as follows ( in thousands ) : years ending december 31 .

upon completion of construction in 2013 , we evaluated the de-recognition of the asset and liability under the sale-leaseback accounting guidance .
we concluded that we had forms of continued economic involvement in the facility , and therefore did not meet with the provisions for sale-leaseback accounting .

therefore , the lease is accounted for as a financing obligation and lease payments will be attributed to ( 1 ) a reduction of the principal financing obligation ; ( 2 ) imputed interest expense ; and ( 3 ) land lease expense ( which is considered an operating lease and a component of cost of goods sold and operating expenses ) representing an imputed cost to lease the underlying land of the building .

in addition , the underlying building asset is depreciated over the building 2019s estimated useful life of 30 years .
at the conclusion of the initial lease term , we will de-recognize both the net book values of the asset and the remaining financing obligation .

purchase commitments we outsource most of our manufacturing and supply chain management operations to third-party contract manufacturers , who procure components and assemble products on our behalf based on our forecasts in order to reduce manufacturing lead times and ensure adequate component supply .
we issue purchase orders to our contract manufacturers for finished product and a significant portion of these orders consist of firm non- cancelable commitments .

in addition , we purchase strategic component inventory from certain suppliers under purchase commitments that in some cases are non-cancelable , including integrated circuits , which are consigned to our contract manufacturers .
as of december 31 , 2015 , we had non-cancelable purchase commitments of $ 43.9 million to our contract manufacturers and suppliers .
we have provided restricted deposits to our third-party contract manufacturers and vendors to secure our obligations to purchase inventory .

we had $ 2.3 million in restricted deposits as of december 31 , 2015 and december 31 , 2014 .
restricted deposits are classified in other assets in our accompanying consolidated balance sheets .
guarantees we have entered into agreements with some of our direct customers and channel partners that contain indemnification provisions relating to potential situations where claims could be alleged that our products infringe the intellectual property rights of a third party .

we have at our option and expense the ability to repair any infringement , replace product with a non-infringing equivalent-in-function product or refund our customers

 |
| table | 2016                                                | $ 5754
--------------------------------------------------- | ----------------
2017                                                | 5933
2018                                                | 6113
2019                                                | 6293
2020                                                | 6477
thereafter                                          | 18810
total payments                                      | 49380
less : interest and land lease expense              | -30463 ( 30463 )
total payments under facility financing obligations | 18917
property reverting to landlord                      | 23629
present value of obligation                         | 42546
less current portion                                | -1336 ( 1336 )
long-term portion of obligation                     | $ 41210 |


| _id | dd4bcc332 |
| title |  |
| text | our international networks segment owns and operates the following television networks , which reached the following number of subscribers via pay television services as of december 31 , 2013 : global networks international subscribers ( millions ) regional networks international subscribers ( millions ) .

( a ) number of subscribers corresponds to the collective sum of the total number of subscribers to each of the sbs nordic broadcast networks in sweden , norway , and denmark subject to retransmission agreements with pay television providers .
( b ) number of subscribers corresponds to dmax pay television networks in the u.k. , austria , switzerland and ireland .

our international networks segment also owns and operates free-to-air television networks which reached 285 million cumulative viewers in europe and the middle east as of december 31 , 2013 .
our free-to-air networks include dmax , fatafeat , quest , real time , giallo , frisbee , focus and k2 .
similar to u.s .

similar to u.s .
networks , the primary sources of revenue for international networks are fees charged to operators who distribute our networks , which primarily include cable and dth satellite service providers , and advertising sold on our television networks .
international television markets vary in their stages of development .

some markets , such as the u.k. , are more advanced digital television markets , while others remain in the analog environment with varying degrees of investment from operators to expand channel capacity or convert to digital technologies .
common practice in some markets results in long-term contractual distribution relationships , while customers in other markets renew contracts annually .

distribution revenue for our international networks segment is largely dependent on the number of subscribers that receive our networks or content , the rates negotiated in the agreements , and the market demand for the content that we provide .

advertising revenue is dependent upon a number of factors including the development of pay and free-to-air television markets , the number of subscribers to and viewers of our channels , viewership demographics , the popularity of our programming , and our ability to sell commercial time over a group of channels .
in certain markets , our advertising sales business operates with in-house sales teams , while we rely on external sales representation services in other markets .

in developing television markets , we expect that advertising revenue growth will result from continued subscriber and viewership growth , our localization strategy , and the shift of advertising spending from traditional analog networks to channels in the multi-channel environment .

in relatively mature markets , such as western europe , growth in advertising revenue will come from increasing viewership and pricing of advertising on our existing television networks and the launching of new services , both organic and through acquisitions .
during 2013 , distribution , advertising and other revenues were 50% ( 50 % ) , 47% ( 47 % ) and 3% ( 3 % ) , respectively , of total net revenues for this segment .

on january 21 , 2014 , we entered into an agreement with tf1 to acquire a controlling interest in eurosport international ( "eurosport" ) , a leading pan-european sports media platform , by increasing our ownership stake from 20% ( 20 % ) to 51% ( 51 % ) for cash of approximately 20ac253 million ( $ 343 million ) subject to working capital adjustments .
due to regulatory constraints the acquisition initially excludes eurosport france , a subsidiary of eurosport .

we will retain a 20% ( 20 % ) equity interest in eurosport france and a commitment to acquire another 31% ( 31 % ) ownership interest beginning 2015 , contingent upon resolution of all regulatory matters .
the flagship eurosport network focuses on regionally popular sports such as tennis , skiing , cycling and motor sports and reaches 133 million homes across 54 countries in 20 languages .

eurosport 2019s brands and platforms also include eurosport hd ( high definition simulcast ) , eurosport 2 , eurosport 2 hd ( high definition simulcast ) , eurosport asia-pacific , and eurosportnews .
the acquisition is intended to increase the growth of eurosport and enhance our pay television offerings in europe .
tf1 will have the right to put the entirety of its remaining 49% ( 49 % ) non-controlling interest to us for approximately two and a half years after completion of this acquisition .

the put has a floor value equal to the fair value at the acquisition date if exercised in the 90 day period beginning on july 1 , 2015 and is subsequently priced at fair value if exercised in the 90 day period beginning on july 1 , 2016 .
we expect the acquisition to close in the second quarter of 2014 subject to obtaining necessary regulatory approvals.

 |
| table | global networks discovery channel | internationalsubscribers ( millions ) 271 | regional networks discovery kids | internationalsubscribers ( millions ) 76
--------------------------------- | ----------------------------------------- | -------------------------------- | ----------------------------------------
animal planet                     | 200                                       | sbs nordic ( a )                 | 28
tlc real time and travel & living | 162                                       | dmax ( b )                       | 16
discovery science                 | 81                                        | discovery history                | 14
investigation discovery           | 74                                        | shed                             | 12
discovery home & health           | 64                                        | discovery en espanol ( u.s. )    | 5
turbo                             | 52                                        | discovery familia ( u.s. )       | 4
discovery world                   | 23                                        | gxt                              | 4 |


| _id | dd4bedfe6 |
| title |  |
| text | gain on previously held equity interest on 30 december 2014 , we acquired our partner 2019s equity ownership interest in a liquefied atmospheric industrial gases production joint venture in north america for $ 22.6 , which increased our ownership from 50% ( 50 % ) to 100% ( 100 % ) .
the transaction was accounted for as a business combination , and subsequent to the acquisition , the results were consolidated within our industrial gases 2013 americas segment .

we recorded a gain of $ 17.9 ( $ 11.2 after-tax , or $ .05 per share ) as a result of revaluing our previously held equity interest to fair value as of the acquisition date .
refer to note 6 , business combination , to the consolidated financial statements for additional details .
other income ( expense ) , net items recorded to other income ( expense ) , net arise from transactions and events not directly related to our principal income earning activities .

the detail of other income ( expense ) , net is presented in note 23 , supplemental information , to the consolidated financial statements .
2017 vs .
2016 other income ( expense ) , net of $ 121.0 increased $ 71.6 , primarily due to income from transition services agreements with versum and evonik , income from the sale of assets and investments , including a gain of $ 12.2 ( $ 7.6 after-tax , or $ .03 per share ) resulting from the sale of a parcel of land , and a favorable foreign exchange impact .

2016 vs .
2015 other income ( expense ) , net of $ 49.4 increased $ 3.9 , primarily due to lower foreign exchange losses , favorable contract settlements , and receipt of a government subsidy .
fiscal year 2015 included a gain of $ 33.6 ( $ 28.3 after tax , or $ .13 per share ) resulting from the sale of two parcels of land .
no other individual items were significant in comparison to fiscal year 2015 .
interest expense .

2017 vs .
2016 interest incurred decreased $ 8.3 as the impact from a lower average debt balance of $ 26 was partially offset by the impact from a higher average interest rate on the debt portfolio of $ 19 .
the change in capitalized interest was driven by a decrease in the carrying value of projects under construction , primarily as a result of our decision to exit from the energy-from-waste business .
2016 vs .
2015 interest incurred decreased $ 4.0 .

2015 interest incurred decreased $ 4.0 .
the decrease primarily resulted from a stronger u.s .
dollar on the translation of foreign currency interest of $ 6 , partially offset by a higher average debt balance of $ 2 .
the change in capitalized interest was driven by a decrease in the carrying value of projects under construction , primarily as a result of our exit from the energy-from-waste business .

other non-operating income ( expense ) , net other non-operating income ( expense ) , net of $ 29.0 in fiscal year 2017 primarily resulted from interest income on cash and time deposits , which are comprised primarily of proceeds from the sale of pmd .
interest income was included in "other income ( expense ) , net" in 2016 and 2015 .
interest income in previous periods was not material .

loss on extinguishment of debt on 30 september 2016 , in anticipation of the spin-off of emd , versum issued $ 425.0 of notes to air products , who then exchanged these notes with certain financial institutions for $ 418.3 of air products 2019 outstanding commercial paper .
this noncash exchange , which was excluded from the consolidated statements of cash flows , resulted in a loss of $ 6.9 ( $ 4.3 after-tax , or $ .02 per share ) .

in september 2015 , we made a payment of $ 146.6 to redeem 3000000 unidades de fomento ( 201cuf 201d ) series e 6.30% ( 6.30 % ) bonds due 22 january 2030 that had a carrying value of $ 130.0 and resulted in a net loss of $ 16.6 ( $ 14.2 after-tax , or $ .07 per share ) .

 |
| table | | 2017    | 2016    | 2015
--------------------------- | ------- | ------- | -------
interest incurred           | $ 139.6 | $ 147.9 | $ 151.9
less : capitalized interest | 19.0    | 32.7    | 49.1
interest expense            | $ 120.6 | $ 115.2 | $ 102.8 |


| _id | dd496d938 |
| title |  |
| text | entergy new orleans , 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 due to an increase in electricity usage in the service territory in 2008 compared to the same period in 2007 .
entergy new orleans estimates that approximately 141000 electric customers and 93000 gas customers have returned since hurricane katrina and are taking service as of december 31 , 2008 , compared to approximately 132000 electric customers and 86000 gas customers as of december 31 , 2007 .

billed retail electricity usage increased a total of 184 gwh compared to the same period in 2007 , an increase of 4% ( 4 % ) .
the net gas revenue variance is primarily due to an increase in base rates in march and november 2007 .
refer to note 2 to the financial statements for a discussion of the base rate increase .

the rider revenue variance is due primarily to higher total revenue and a storm reserve rider effective march 2007 as a result of the city council's approval of a settlement agreement in october 2006 .
the approved storm reserve has been set to collect $ 75 million over a ten-year period through the rider and the funds will be held in a restricted escrow account .
the settlement agreement is discussed in note 2 to the financial statements .

the base revenue variance is primarily due to a base rate recovery credit , effective january 2008 .
the base rate credit is discussed in note 2 to the financial statements .

gross operating revenues and fuel and purchased power expenses gross operating revenues increased primarily due to : an increase of $ 58.9 million in gross wholesale revenue due to increased sales to affiliated customers and an increase in the average price of energy available for resale sales ; an increase of $ 47.7 million in electric fuel cost recovery revenues due to higher fuel rates and increased electricity usage ; and an increase of $ 22 million in gross gas revenues due to higher fuel recovery

in gross gas revenues due to higher fuel recovery revenues and increases in gas base rates in march 2007 and november 2007 .

fuel and purchased power increased primarily due to increases in the average market prices of natural gas and purchased power in addition to an increase in demand.

 |
| table | | amount ( in millions )
---------------- | ----------------------
2007 net revenue | $ 231.0
volume/weather   | 15.5
net gas revenue  | 6.6
rider revenue    | 3.9
base revenue     | -11.3 ( 11.3 )
other            | 7.0
2008 net revenue | $ 252.7 |


| _id | dd4985452 |
| title |  |
| text | at december 31 , 2015 and 2014 , we had a modest working capital surplus .
this reflects a strong cash position that provides enhanced liquidity in an uncertain economic environment .
in addition , we believe we have adequate access to capital markets to meet any foreseeable cash requirements , and we have sufficient financial capacity to satisfy our current liabilities .
cash flows .

operating activities cash provided by operating activities decreased in 2015 compared to 2014 due to lower net income and changes in working capital , partially offset by the timing of tax payments .
federal tax law provided for 100% ( 100 % ) bonus depreciation for qualified investments made during 2011 and 50% ( 50 % ) bonus depreciation for qualified investments made during 2012-2013 .

as a result , the company deferred a substantial portion of its 2011-2013 income tax expense , contributing to the positive operating cash flow in those years .
congress extended 50% ( 50 % ) bonus depreciation for 2014 , but this extension occurred in december , and the related benefit was realized in 2015 , rather than 2014 .
similarly , in december of 2015 , congress extended bonus depreciation through 2019 , which delayed the benefit of 2015 bonus depreciation into 2016 .

bonus depreciation will be at a rate of 50% ( 50 % ) for 2015 , 2016 and 2017 , 40% ( 40 % ) for 2018 and 30% ( 30 % ) for 2019 .
higher net income in 2014 increased cash provided by operating activities compared to 2013 , despite higher income tax payments .
2014 income tax payments were higher than 2013 primarily due to higher income , but also because we paid taxes previously deferred by bonus depreciation .

investing activities higher capital investments in locomotives and freight cars , including $ 327 million in early lease buyouts , which we exercised due to favorable economic terms and market conditions , drove the increase in cash used in investing activities in 2015 compared to 2014 .

higher capital investments , including the early buyout of the long-term operating lease of our headquarters building for approximately $ 261 million , drove the increase in cash used in investing activities in 2014 compared to 2013 .
significant investments also were made for new locomotives , freight cars and containers , and capacity and commercial facility projects .

capital investments in 2014 also included $ 99 million for the early buyout of locomotives and freight cars under long-term operating leases , which we exercised due to favorable economic terms and market conditions.

 |
| table | millions                                | 2015           | 2014           | 2013
--------------------------------------- | -------------- | -------------- | --------------
cash provided by operating activities   | $ 7344         | $ 7385         | $ 6823
cash used in investing activities       | -4476 ( 4476 ) | -4249 ( 4249 ) | -3405 ( 3405 )
cash used in financing activities       | -3063 ( 3063 ) | -2982 ( 2982 ) | -3049 ( 3049 )
net change in cash and cash equivalents | $ -195 ( 195 ) | $ 154          | $ 369 |


| _id | dd4c098ea |
| title |  |
| text | the railroad collected approximately $ 18.8 billion and $ 16.3 billion of receivables during the years ended december 31 , 2011 and 2010 , respectively .
upri used certain of these proceeds to purchase new receivables under the facility .
the costs of the receivables securitization facility include interest , which will vary based on prevailing commercial paper rates , program fees paid to banks , commercial paper issuing costs , and fees for unused commitment availability .

the costs of the receivables securitization facility are included in interest expense and were $ 4 million and $ 6 million for 2011 and 2010 , respectively .
prior to adoption of the new accounting standard , the costs of the receivables securitization facility were included in other income and were $ 9 million for 2009 .
the investors have no recourse to the railroad 2019s other assets , except for customary warranty and indemnity claims .

creditors of the railroad do not have recourse to the assets of upri .
in august 2011 , the receivables securitization facility was renewed for an additional 364-day period at comparable terms and conditions .
contractual obligations and commercial commitments as described in the notes to the consolidated financial statements and as referenced in the tables below , we have contractual obligations and commercial commitments that may affect our financial condition .

based on our assessment of the underlying provisions and circumstances of our contractual obligations and commercial commitments , including material sources of off-balance sheet and structured finance arrangements , other than the risks that we and other similarly situated companies face with respect to the condition of the capital markets ( as described in item 1a of part ii of this report ) , there is no known trend , demand , commitment , event , or uncertainty that is reasonably likely to occur that

that is reasonably likely to occur that would have a material adverse effect on our consolidated results of operations , financial condition , or liquidity .

in addition , our commercial obligations , financings , and commitments are customary transactions that are similar to those of other comparable corporations , particularly within the transportation industry .
the following tables identify material obligations and commitments as of december 31 , 2011 : payments due by december 31 , contractual obligations after millions total 2012 2013 2014 2015 2016 2016 other .

[a] excludes capital lease obligations of $ 1874 million and unamortized discount of $ 364 million .
includes an interest component of $ 5120 million .
[b] includes leases for locomotives , freight cars , other equipment , and real estate .
[c] represents total obligations , including interest component of $ 685 million .

[d] purchase obligations include locomotive maintenance contracts ; purchase commitments for fuel purchases , locomotives , ties , ballast , and rail ; and agreements to purchase other goods and services .
for amounts where we cannot reasonably estimate the year of settlement , they are reflected in the other column .
[e] includes estimated other post retirement , medical , and life insurance payments and payments made under the unfunded pension plan for the next ten years .

no amounts are included for funded pension obligations as no contributions are currently required .
[f] future cash flows for income tax contingencies reflect the recorded liability for unrecognized tax benefits , including interest and penalties , as of december 31 , 2011 .
where we can reasonably estimate the years in which these liabilities may be settled , this is shown in the table .
for amounts where we cannot reasonably estimate the year of settlement , they are reflected in the other column.

 |
| table | contractual obligationsmillions    | total   | payments due by december 31 2012 | payments due by december 31 2013 | payments due by december 31 2014 | payments due by december 31 2015 | payments due by december 31 2016 | payments due by december 31 after 2016 | payments due by december 31 other
---------------------------------- | ------- | -------------------------------- | -------------------------------- | -------------------------------- | -------------------------------- | -------------------------------- | -------------------------------------- | ---------------------------------
debt [a]                           | $ 12516 | $ 538                            | $ 852                            | $ 887                            | $ 615                            | $ 652                            | $ 8972                                 | $ -
operating leases [b]               | 4528    | 525                              | 489                              | 415                              | 372                              | 347                              | 2380                                   | -
capital lease obligations [c]      | 2559    | 297                              | 269                              | 276                              | 276                              | 262                              | 1179                                   | -
purchase obligations [d]           | 5137    | 2598                             | 568                              | 560                              | 276                              | 245                              | 858                                    | 32
other post retirement benefits [e] | 249     | 26                               | 26                               | 26                               | 26                               | 26                               | 119                                    | -
income tax contingencies [f]       | 107     | 31                               | -                                | -                                | -                                | -                                | -                                      | 76
total contractualobligations       | $ 25096 | $ 4015                           | $ 2204                           | $ 2164                           | $ 1565                           | $ 1532                           | $ 13508                                | $ 108 |


| _id | dd4bf5a52 |
| title |  |
| text | ( 1 ) the cumulative total return assumes reinvestment of dividends .
( 2 ) the total return is weighted according to market capitalization of each company at the beginning of each year .

( f ) purchases of equity securities by the issuer and affiliated purchasers we have not repurchased any of our common stock since the company filed its initial registration statement on march 16 , ( g ) securities authorized for issuance under equity compensation plans a description of securities authorized for issuance under our equity compensation plans will be incorporated herein by reference to the proxy statement for the 2012 annual meeting of stockholders to be filed within 120 days after the end of

to be filed within 120 days after the end of the company 2019s fiscal year .

item 6 .
selected financial data .

( 1 ) long-term debt does not include amounts payable to our former parent as of and before december 31 , 2010 , as these amounts were due upon demand and included in current liabilities .
( 2 ) free cash flow is a non-gaap financial measure and represents cash from operating activities less capital expenditures .
see liquidity and capital resources in item 7 for more information on this measure.

 |
| table | ( $ in millions except per share amounts ) | year ended december 31 2011 | year ended december 31 2010 | year ended december 31 2009 | year ended december 31 2008 | year ended december 31 2007
------------------------------------------ | --------------------------- | --------------------------- | --------------------------- | --------------------------- | ---------------------------
sales and service revenues                 | $ 6575                      | $ 6723                      | $ 6292                      | $ 6189                      | $ 5692
goodwill impairment                        | 290                         | 0                           | 0                           | 2490                        | 0
operating income ( loss )                  | 110                         | 248                         | 211                         | -2354 ( 2354 )              | 447
net earnings ( loss )                      | -94 ( 94 )                  | 135                         | 124                         | -2420 ( 2420 )              | 276
total assets                               | 6001                        | 5203                        | 5036                        | 4760                        | 7658
long-term debt ( 1 )                       | 1830                        | 105                         | 283                         | 283                         | 283
total long-term obligations                | 3757                        | 1559                        | 1645                        | 1761                        | 1790
free cash flow ( 2 )                       | 331                         | 168                         | -269 ( 269 )                | 121                         | 364
basic earnings ( loss ) per share          | $ -1.93 ( 1.93 )            | $ 2.77                      | $ 2.54                      | $ -49.61 ( 49.61 )          | $ 5.65
diluted earnings ( loss ) per share        | $ -1.93 ( 1.93 )            | $ 2.77                      | $ 2.54                      | $ -49.61 ( 49.61 )          | $ 5.65 |


| _id | dd4ba2226 |
| title |  |
| text | visa indemnification our payment services business issues and acquires credit and debit card transactions through visa u.s.a .
inc .
card association or its affiliates ( visa ) .
in october 2007 , visa completed a restructuring and issued shares of visa inc .
common stock to its financial institution members ( visa reorganization ) in contemplation of its initial public offering ( ipo ) .
as part of the visa reorganization , we received our proportionate share of class b visa inc .

common stock allocated to the u.s .
members .
prior to the ipo , the u.s .
members , which included pnc , were obligated to indemnify visa for judgments and settlements related to certain specified litigation .
as a result of the acquisition of national city , we became party to judgment and loss sharing agreements with visa and certain other banks .

the judgment and loss sharing agreements were designed to apportion financial responsibilities arising from any potential adverse judgment or negotiated settlements related to the specified litigation .
in september 2014 , visa funded $ 450 million into its litigation escrow account and reduced the conversion rate of visa b to a shares .
we continue to have an obligation to indemnify visa for judgments and settlements for the remaining specified litigation .

recourse and repurchase obligations as discussed in note 2 loan sale and servicing activities and variable interest entities , pnc has sold commercial mortgage , residential mortgage and home equity loans/ lines of credit directly or indirectly through securitization and loan sale transactions in which we have continuing involvement .
one form of continuing involvement includes certain recourse and loan repurchase obligations associated with the transferred assets .

commercial mortgage loan recourse obligations we originate and service certain multi-family commercial mortgage loans which are sold to fnma under fnma 2019s delegated underwriting and servicing ( dus ) program .
we participated in a similar program with the fhlmc .
under these programs , we generally assume up to a one-third pari passu risk of loss on unpaid principal balances through a loss share arrangement .

at december 31 , 2014 and december 31 , 2013 , the unpaid principal balance outstanding of loans sold as a participant in these programs was $ 12.3 billion and $ 11.7 billion , respectively .
the potential maximum exposure under the loss share arrangements was $ 3.7 billion at december 31 , 2014 and $ 3.6 billion at december 31 , 2013 .
we maintain a reserve for estimated losses based upon our exposure .

the reserve for losses under these programs totaled $ 35 million and $ 33 million as of december 31 , 2014 and december 31 , 2013 , respectively , and is included in other liabilities on our consolidated balance sheet .
if payment is required under these programs , we would not have a contractual interest in the collateral underlying the mortgage loans on which losses occurred , although the value of the collateral is taken into account in determining our share of such losses .

our exposure and activity associated with these recourse obligations are reported in the corporate & institutional banking segment .
table 150 : analysis of commercial mortgage recourse obligations .

residential mortgage loan and home equity loan/ line of credit repurchase obligations while residential mortgage loans are sold on a non-recourse basis , we assume certain loan repurchase obligations associated with mortgage loans we have sold to investors .
these loan repurchase obligations primarily relate to situations where pnc is alleged to have breached certain origination covenants and representations and warranties made to purchasers of the loans in the respective purchase and sale agreements .

repurchase obligation activity associated with residential mortgages is reported in the residential mortgage banking segment .
in the fourth quarter of 2013 , pnc reached agreements with both fnma and fhlmc to resolve their repurchase claims with respect to loans sold between 2000 and 2008 .
pnc paid a total of $ 191 million related to these settlements .

pnc 2019s repurchase obligations also include certain brokered home equity loans/lines of credit that were sold to a limited number of private investors in the financial services industry by national city prior to our acquisition of national city .
pnc is no longer engaged in the brokered home equity lending business , and our exposure under these loan repurchase obligations is limited to repurchases of loans sold in these transactions .

repurchase activity associated with brokered home equity loans/lines of credit is reported in the non-strategic assets portfolio segment .
214 the pnc financial services group , inc .
2013 form 10-k

 |
| table | in millions                                  | 2014 | 2013
-------------------------------------------- | ---- | --------
january 1                                    | $ 33 | $ 43
reserve adjustments net                      | 2    | -9 ( 9 )
losses 2013 loan repurchases and settlements |      | -1 ( 1 )
december 31                                  | $ 35 | $ 33 |


| _id | dd4bb8b20 |
| title |  |
| text | amount of commitment expiration per period other commercial commitments after millions of dollars total 2010 2011 2012 2013 2014 2014 .

[a] none of the credit facility was used as of december 31 , 2009 .
[b] $ 400 million of the sale of receivables program was utilized at december 31 , 2009 .
[c] includes guaranteed obligations related to our headquarters building , equipment financings , and affiliated operations .
[d] none of the letters of credit were drawn upon as of december 31 , 2009 .
off-balance sheet arrangements sale of receivables 2013 the railroad transfers most of its accounts receivable to union pacific receivables , inc .

( upri ) , a bankruptcy-remote subsidiary , as part of a sale of receivables facility .
upri sells , without recourse on a 364-day revolving basis , an undivided interest in such accounts receivable to investors .
the total capacity to sell undivided interests to investors under the facility was $ 600 million and $ 700 million at december 31 , 2009 and 2008 , respectively .

the value of the outstanding undivided interest held by investors under the facility was $ 400 million and $ 584 million at december 31 , 2009 and 2008 , respectively .
during 2009 , upri reduced the outstanding undivided interest held by investors due to a decrease in available receivables .
the value of the undivided interest held by investors is not included in our consolidated financial statements .

the value of the undivided interest held by investors was supported by $ 817 million and $ 1015 million of accounts receivable held by upri at december 31 , 2009 and 2008 , respectively .
at december 31 , 2009 and 2008 , the value of the interest retained by upri was $ 417 million and $ 431 million , respectively .
this retained interest is included in accounts receivable in our consolidated financial statements .

the interest sold to investors is sold at carrying value , which approximates fair value , and there is no gain or loss recognized from the transaction .
the value of the outstanding undivided interest held by investors could fluctuate based upon the availability of eligible receivables and is directly affected by changing business volumes and credit risks , including default and dilution .

if default or dilution ratios increase one percent , the value of the outstanding undivided interest held by investors would not change as of december 31 , 2009 .
should our credit rating fall below investment grade , the value of the outstanding undivided interest held by investors would be reduced , and , in certain cases , the investors would have the right to discontinue the facility .

the railroad services the sold receivables ; however , the railroad does not recognize any servicing asset or liability , as the servicing fees adequately compensate us for these responsibilities .
the railroad collected approximately $ 13.8 billion and $ 17.8 billion during the years ended december 31 , 2009 and 2008 , respectively .
upri used certain of these proceeds to purchase new receivables under the facility .

the costs of the sale of receivables program are included in other income and were $ 9 million , $ 23 million , and $ 35 million for 2009 , 2008 , and 2007 , respectively .
the costs include interest , which will vary based on prevailing commercial paper rates , program fees paid to banks , commercial paper issuing costs , and fees for unused commitment availability .

the decrease in the 2009 costs was primarily attributable to lower commercial paper rates and a decrease in the outstanding interest held by investors.

 |
| table | other commercial commitmentsmillions of dollars | total  | amount of commitment expiration per period 2010 | amount of commitment expiration per period 2011 | amount of commitment expiration per period 2012 | amount of commitment expiration per period 2013 | amount of commitment expiration per period 2014 | amount of commitment expiration per period after 2014
----------------------------------------------- | ------ | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | -----------------------------------------------------
credit facilities [a]                           | $ 1900 | $ -                                             | $ -                                             | $ 1900                                          | $ -                                             | $ -                                             | $ -
sale of receivables [b]                         | 600    | 600                                             | -                                               | -                                               | -                                               | -                                               | -
guarantees [c]                                  | 416    | 29                                              | 76                                              | 24                                              | 8                                               | 214                                             | 65
standby letters of credit [d]                   | 22     | 22                                              | -                                               | -                                               | -                                               | -                                               | -
total commercial commitments                    | $ 2938 | $ 651                                           | $ 76                                            | $ 1924                                          | $ 8                                             | $ 214                                           | $ 65 |


| _id | dd4bed5aa |
| title |  |
| text | the environmental liability includes costs for remediation and restoration of sites , as well as for ongoing monitoring costs , but excludes any anticipated recoveries from third parties .
cost estimates are based on information available for each site , financial viability of other potentially responsible parties , and existing technology , laws , and regulations .
we believe that we have adequately accrued for our ultimate share of costs at sites subject to joint and several liability .

however , the ultimate liability for remediation is difficult to determine because of the number of potentially responsible parties involved , site-specific cost sharing arrangements with other potentially responsible parties , the degree of contamination by various wastes , the scarcity and quality of volumetric data related to many of the sites , and the speculative nature of remediation costs .

estimates may also vary due to changes in federal , state , and local laws governing environmental remediation .
we do not expect current obligations to have a material adverse effect on our results of operations or financial condition .
guarantees 2013 at december 31 , 2006 , we were contingently liable for $ 464 million in guarantees .
we have recorded a liability of $ 6 million for the fair value of these obligations as of december 31 , 2006 .

we entered into these contingent guarantees in the normal course of business , and they include guaranteed obligations related to our headquarters building , equipment financings , and affiliated operations .
the final guarantee expires in 2022 .
we are not aware of any existing event of default that would require us to satisfy these guarantees .
we do not expect that these guarantees will have a material adverse effect on our consolidated financial condition , results of operations , or liquidity .

indemnities 2013 our maximum potential exposure under indemnification arrangements , including certain tax indemnifications , can range from a specified dollar amount to an unlimited amount , depending on the nature of the transactions and the agreements .

due to uncertainty as to whether claims will be made or how they will be resolved , we cannot reasonably determine the probability of an adverse claim or reasonably estimate any adverse liability or the total maximum exposure under these indemnification arrangements .
we do not have any reason to believe that we will be required to make any material payments under these indemnity provisions .

income taxes 2013 as previously reported in our form 10-q for the quarter ended september 30 , 2005 , the irs has completed its examinations and issued notices of deficiency for tax years 1995 through 2002 .
among their proposed adjustments is the disallowance of tax deductions claimed in connection with certain donations of property .

in the fourth quarter of 2005 , the irs national office issued a technical advice memorandum which left unresolved whether the deductions were proper , pending further factual development .
we continue to dispute the donation issue , as well as many of the other proposed adjustments , and will contest the associated tax deficiencies through the irs appeals process , and , if necessary , litigation .

in addition , the irs is examining the corporation 2019s federal income tax returns for tax years 2003 and 2004 and should complete their exam in 2007 .
we do not expect that the ultimate resolution of these examinations will have a material adverse effect on our consolidated financial statements .
11 .
other income other income included the following for the years ended december 31 : millions of dollars 2006 2005 2004 .

 |
| table | millions of dollars                          | 2006       | 2005       | 2004
-------------------------------------------- | ---------- | ---------- | ----------
rental income                                | $ 83       | $ 59       | $ 55
net gain on non-operating asset dispositions | 72         | 135        | 69
interest income                              | 29         | 17         | 10
sale of receivables fees                     | -33 ( 33 ) | -23 ( 23 ) | -11 ( 11 )
non-operating environmental costs and other  | -33 ( 33 ) | -43 ( 43 ) | -35 ( 35 )
total                                        | $ 118      | $ 145      | $ 88 |


| _id | dd4c133c2 |
| title |  |
| text | goodwill is reviewed annually during the fourth quarter for impairment .
in addition , the company performs an impairment analysis of other intangible assets based on the occurrence of other factors .
such factors include , but are not limited to , significant changes in membership , state funding , medical contracts and provider networks and contracts .
an impairment loss is recognized if the carrying value of intangible assets exceeds the implied fair value .

medical claims liabilities medical services costs include claims paid , claims reported but not yet paid , or inventory , estimates for claims incurred but not yet received , or ibnr , and estimates for the costs necessary to process unpaid claims .

the estimates of medical claims liabilities are developed using standard actuarial methods based upon historical data for payment patterns , cost trends , product mix , sea- sonality , utilization of healthcare services and other rele- vant factors including product changes .
these estimates are continually reviewed and adjustments , if necessary , are reflected in the period known .
management did not change actuarial methods during the years presented .

management believes the amount of medical claims payable is reasonable and adequate to cover the company 2019s liability for unpaid claims as of december 31 , 2006 ; however , actual claim payments may differ from established estimates .
revenue recognition the company 2019s medicaid managed care segment gener- ates revenues primarily from premiums received from the states in which it operates health plans .
the company receives a fixed premium per member per month pursuant to our state contracts .

the company generally receives premium payments during the month it provides services and recognizes premium revenue during the period in which it is obligated to provide services to its members .
some states enact premium taxes or similar assessments , collectively premium taxes , and these taxes are recorded as general and administrative expenses .
some contracts allow for additional premium related to certain supplemen- tal services provided such as maternity deliveries .

revenues are recorded based on membership and eligibility data provided by the states , which may be adjusted by the states for updates to this data .
these adjustments have been immaterial in relation to total revenue recorded and are reflected in the period known .
the company 2019s specialty services segment generates revenues under contracts with state programs , healthcare organizations and other commercial organizations , as well as from our own subsidiaries on market-based terms .

revenues are recognized when the related services are provided or as ratably earned over the covered period of service .
premium and services revenues collected in advance are recorded as unearned revenue .
for performance-based contracts the company does not recognize revenue subject to refund until data is sufficient to measure performance .

premiums and service revenues due to the company are recorded as premium and related receivables and are recorded net of an allowance based on historical trends and management 2019s judgment on the collectibility of these accounts .

as the company generally receives payments during the month in which services are provided , the allowance is typically not significant in comparison to total revenues and does not have a material impact on the pres- entation of the financial condition or results of operations .
activity in the allowance for uncollectible accounts for the years ended december 31 is summarized below: .

significant customers centene receives the majority of its revenues under con- tracts or subcontracts with state medicaid managed care programs .
the contracts , which expire on various dates between june 30 , 2007 and december 31 , 2011 , are expected to be renewed .

contracts with the states of georgia , indiana , kansas , texas and wisconsin each accounted for 15% ( 15 % ) , 15% ( 15 % ) , 10% ( 10 % ) , 17% ( 17 % ) and 16% ( 16 % ) , respectively , of the company 2019s revenues for the year ended december 31 , 2006 .
reinsurance centene has purchased reinsurance from third parties to cover eligible healthcare services .

the current reinsurance program covers 90% ( 90 % ) of inpatient healthcare expenses in excess of annual deductibles of $ 300 to $ 500 per member , up to an annual maximum of $ 2000 .
centene 2019s medicaid managed care subsidiaries are responsible for inpatient charges in excess of an average daily per diem .
in addition , bridgeway participates in a risk-sharing program as part of its contract with the state of arizona for the reimbursement of certain contract service costs beyond a monetary threshold .

reinsurance recoveries were $ 3674 , $ 4014 , and $ 3730 , in 2006 , 2005 , and 2004 , respectively .
reinsurance expenses were approximately $ 4842 , $ 4105 , and $ 6724 in 2006 , 2005 , and 2004 , respectively .
reinsurance recoveries , net of expenses , are included in medical costs .
other income ( expense ) other income ( expense ) consists principally of investment income and interest expense .

investment income is derived from the company 2019s cash , cash equivalents , restricted deposits and investments.

 |
| table | | 2006         | 2005         | 2004
--------------------------------------- | ------------ | ------------ | ------------
allowances beginning of year            | $ 343        | $ 462        | $ 607
amounts charged to expense              | 512          | 80           | 407
write-offs of uncollectible receivables | -700 ( 700 ) | -199 ( 199 ) | -552 ( 552 )
allowances end of year                  | $ 155        | $ 343        | $ 462 |


| _id | dd49737c0 |
| title |  |
| text | abiomed , inc .
and subsidiaries notes to consolidated financial statements 2014 ( continued ) note 14 .
income taxes ( continued ) on april 1 , 2007 , the company adopted financial interpretation fin no .
48 , accounting for uncertainty in income taxes 2014an interpretation of fasb statement no .
109 ( 201cfin no .
48 201d ) , which clarifies the accounting for uncertainty in income taxes recognized in an enterprise 2019s financial statements in accordance with fasb statement no .

109 , accounting for income taxes .
fin no .
48 prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return .
fin no .
48 also provides guidance on derecognition , classification , interest and penalties , accounting in interim periods , disclosure , and transition and defines the criteria that must be met for the benefits of a tax position to be recognized .

as a result of its adoption of fin no .
48 , the company recorded the cumulative effect of the change in accounting principle of $ 0.3 million as a decrease to opening retained earnings and an increase to other long-term liabilities as of april 1 , 2007 .
this adjustment related to state nexus for failure to file tax returns in various states for the years ended march 31 , 2003 , 2004 , and 2005 .
the company initiated a voluntary disclosure plan , which it completed in fiscal year 2009 .

the company elected to recognize interest and/or penalties related to income tax matters in income tax expense in its consolidated statements of operations .
as of march 31 , 2009 , the company had remitted all outstanding amounts owed to each of the states in connection with the outstanding taxes owed at march 31 , 2008 .
as such , the company had no fin no .
48 liability at march 31 , 2009 .

48 liability at march 31 , 2009 .
on a quarterly basis , the company accrues for the effects of uncertain tax positions and the related potential penalties and interest .
it is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of the unrecognized tax positions will increase or decrease during the next 12 months ; however , it is not expected that the change will have a significant effect on the company 2019s results of operations or financial position .

a reconciliation of the beginning and ending balance of unrecognized tax benefits , excluding accrued interest recorded at march 31 , 2009 ( in thousands ) is as follows: .

the company and its subsidiaries are subject to u.s .
federal income tax , as well as income tax of multiple state and foreign jurisdictions .
the company has accumulated significant losses since its inception in 1981 .
all tax years remain subject to examination by major tax jurisdictions , including the federal government and the commonwealth of massachusetts .

however , since the company has net operating loss and tax credit carry forwards which may be utilized in future years to offset taxable income , those years may also be subject to review by relevant taxing authorities if the carry forwards are utilized .
note 15 .

note 15 .
commitments and contingencies the company 2019s acquisition of impella provided that abiomed was required to make contingent payments to impella 2019s former shareholders as follows : 2022 upon fda approval of the impella 2.5 device , a payment of $ 5583333 2022 upon fda approval of the impella 5.0 device , a payment of $ 5583333 , and 2022 upon the sale of 1000 units of impella 2019s products worldwide , a payment of $ 5583334 .

the two milestones related to sales and fda approval of the impella 2.5 device were achieved and paid prior to march 31 , 2009 .
in april 2009 , the company received fda 510 ( k ) clearance of its impella 5.0 product , triggering an obligation to pay the milestone related to the impella 5.0 device .
in may 2009 , the company paid $ 1.8 million of this final milestone in cash and elected to pay the remaining amount through the issuance of approximately 664612 shares of common stock.

 |
| table | balance at march 31 2008                                                          | $ 168
--------------------------------------------------------------------------------- | ------------
reductions for tax positions for closing of the applicable statute of limitations | -168 ( 168 )
balance at march 31 2009                                                          | $ 2014 |


| _id | dd4bd91a4 |
| title |  |
| text | us in a position to handle demand changes .
we will also continue utilizing industrial engineering techniques to improve productivity .
2022 fuel prices 2013 uncertainty about the economy makes fuel price projections difficult , and we could see volatile fuel prices during the year , as they are sensitive to global and u.s .
domestic demand , refining capacity , geopolitical events , weather conditions and other factors .

to reduce the impact of fuel price on earnings , we will continue to seek recovery from our customers through our fuel surcharge programs and to expand our fuel conservation efforts .
2022 capital plan 2013 in 2011 , we plan to make total capital investments of approximately $ 3.2 billion , including expenditures for positive train control ( ptc ) , which may be revised if business conditions warrant or if new laws or regulations affect our ability to generate sufficient returns on these investments .

( see further discussion in this item 7 under liquidity and capital resources 2013 capital plan. ) 2022 positive train control 2013 in response to a legislative mandate to implement ptc by the end of 2015 , we expect to spend approximately $ 250 million during 2011 on developing ptc .
we currently estimate that ptc will cost us approximately $ 1.4 billion to implement by the end of 2015 , in accordance with rules issued by the federal railroad administration ( fra ) .

this includes costs for installing the new system along our tracks , upgrading locomotives to work with the new system , and adding digital data communication equipment so all the parts of the system can communicate with each other .
during 2011 , we plan to begin testing the technology to evaluate its effectiveness .
2022 financial expectations 2013 we remain cautious about economic conditions , but anticipate volume to increase from 2010 levels .

in addition , we expect volume , price , and productivity gains to offset expected higher costs for fuel , labor inflation , depreciation , casualty costs , and property taxes to drive operating ratio improvement .
results of operations operating revenues millions 2010 2009 2008 % (  % ) change 2010 v 2009 % (  % ) change 2009 v 2008 .

freight revenues are revenues generated by transporting freight or other materials from our six commodity groups .
freight revenues vary with volume ( carloads ) and average revenue per car ( arc ) .
changes in price , traffic mix and fuel surcharges drive arc .

we provide some of our customers with contractual incentives for meeting or exceeding specified cumulative volumes or shipping to and from specific locations , which we record as a reduction to freight revenues based on the actual or projected future shipments .
we recognize freight revenues as freight moves from origin to destination .
we allocate freight revenues between reporting periods based on the relative transit time in each reporting period and recognize expenses as we incur them .

other revenues include revenues earned by our subsidiaries , revenues from our commuter rail operations , and accessorial revenues , which we earn when customers retain equipment owned or controlled by us or when we perform additional services such as switching or storage .
we recognize other revenues as we perform services or meet contractual obligations .
freight revenues and volume levels for all six commodity groups increased during 2010 as a result of economic improvement in many market sectors .

we experienced particularly strong volume growth in automotive , intermodal , and industrial products shipments .
core pricing gains and higher fuel surcharges also increased freight revenues and drove a 6% ( 6 % ) improvement in arc .
freight revenues and volume levels for all six commodity groups decreased during 2009 , reflecting continued economic weakness .
we experienced the largest volume declines in automotive and industrial

 |
| table | millions         | 2010    | 2009    | 2008    | % (  % ) change 2010 v 2009 | % (  % ) change 2009 v 2008
---------------- | ------- | ------- | ------- | --------------------------- | ---------------------------
freight revenues | $ 16069 | $ 13373 | $ 17118 | 20% ( 20 % )                | ( 22 ) % (  % )
other revenues   | 896     | 770     | 852     | 16                          | -10 ( 10 )
total            | $ 16965 | $ 14143 | $ 17970 | 20% ( 20 % )                | ( 21 ) % (  % ) |


| _id | dd4baef9e |
| title |  |
| text | equity compensation plan information the plan documents for the plans described in the footnotes below are included as exhibits to this form 10-k , and are incorporated herein by reference in their entirety .
the following table provides information as of dec .
31 , 2006 regarding the number of shares of ppg common stock that may be issued under ppg 2019s equity compensation plans .

plan category securities exercise of outstanding options , warrants and rights weighted- average exercise price of outstanding warrants and rights number of securities remaining available for future issuance under equity compensation ( excluding securities reflected in column ( a ) ) equity compensation plans approved by security holders ( 1 ) 9413216 $ 58.35 10265556 equity compensation plans not approved by security holders ( 2 ) , ( 3 ) 2089300 $ 70.00 2014 .

( 1 ) equity compensation plans approved by security holders include the ppg industries , inc .
stock plan , the ppg omnibus plan , the ppg industries , inc .
executive officers 2019 long term incentive plan , and the ppg industries inc .
long term incentive plan .
( 2 ) equity compensation plans not approved by security holders include the ppg industries , inc .
challenge 2000 stock plan .

challenge 2000 stock plan .
this plan is a broad- based stock option plan under which the company granted to substantially all active employees of the company and its majority owned subsidiaries on july 1 , 1998 , the option to purchase 100 shares of the company 2019s common stock at its then fair market value of $ 70.00 per share .
options became exercisable on july 1 , 2003 , and expire on june 30 , 2008 .
there were 2089300 shares issuable upon exercise of options outstanding under this plan as of dec .

31 , 2006 .
( 3 ) excluded from the information presented here are common stock equivalents held under the ppg industries , inc .
deferred compensation plan , the ppg industries , inc .
deferred compensation plan for directors and the ppg industries , inc .
directors 2019 common stock plan , none of which are equity compensation plans .
as supplemental information , there were 491168 common stock equivalents held under such plans as of dec .
31 , 2006 .
item 6 .

31 , 2006 .
item 6 .
selected financial data the information required by item 6 regarding the selected financial data for the five years ended dec .
31 , 2006 is included in exhibit 99.2 filed with this form 10-k and is incorporated herein by reference .

this information is also reported in the eleven-year digest on page 72 of the annual report under the captions net sales , income ( loss ) before accounting changes , cumulative effect of accounting changes , net income ( loss ) , earnings ( loss ) per common share before accounting changes , cumulative effect of accounting changes on earnings ( loss ) per common share , earnings ( loss ) per common share , earnings ( loss ) per common share 2013 assuming dilution , dividends per share , total assets and

dilution , dividends per share , total assets and long-term debt for the years 2002 through 2006 .

item 7 .
management 2019s discussion and analysis of financial condition and results of operations performance in 2006 compared with 2005 performance overview our sales increased 8% ( 8 % ) to $ 11.0 billion in 2006 compared to $ 10.2 billion in 2005 .
sales increased 4% ( 4 % ) due to the impact of acquisitions , 2% ( 2 % ) due to increased volumes , and 2% ( 2 % ) due to increased selling prices .

cost of sales as a percentage of sales increased slightly to 63.7% ( 63.7 % ) compared to 63.5% ( 63.5 % ) in 2005 .
selling , general and administrative expense increased slightly as a percentage of sales to 17.9% ( 17.9 % ) compared to 17.4% ( 17.4 % ) in 2005 .
these costs increased primarily due to higher expenses related to store expansions in our architectural coatings operating segment and increased advertising to promote growth in our optical products operating segment .

other charges decreased $ 81 million in 2006 .
other charges in 2006 included pretax charges of $ 185 million for estimated environmental remediation costs at sites in new jersey and $ 42 million for legal settlements offset in part by pretax earnings of $ 44 million for insurance recoveries related to the marvin legal settlement and to hurricane rita .

other charges in 2005 included pretax charges of $ 132 million related to the marvin legal settlement net of related insurance recoveries of $ 18 million , $ 61 million for the federal glass class action antitrust legal settlement , $ 34 million of direct costs related to the impact of hurricanes rita and katrina , $ 27 million for an asset impairment charge in our fine chemicals operating segment and $ 19 million for debt refinancing costs .

other earnings increased $ 30 million in 2006 due to higher equity earnings , primarily from our asian fiber glass joint ventures , and higher royalty income .
net income and earnings per share 2013 assuming dilution for 2006 were $ 711 million and $ 4.27 , respectively , compared to $ 596 million and $ 3.49 , respectively , for 2005 .

net income in 2006 included aftertax charges of $ 106 million , or 64 cents a share , for estimated environmental remediation costs at sites in new jersey and louisiana in the third quarter ; $ 26 million , or 15 cents a share , for legal settlements ; $ 23 million , or 14 cents a share for business restructuring ; $ 17 million , or 10 cents a share , to reflect the net increase in the current value of the company 2019s obligation relating to asbestos claims under the ppg settlement arrangement ; and

claims under the ppg settlement arrangement ; and aftertax earnings of $ 24 million , or 14 cents a share for insurance recoveries .

net income in 2005 included aftertax charges of $ 117 million , or 68 cents a share for legal settlements net of insurance ; $ 21 million , or 12 cents a share for direct costs related to the impact of hurricanes katrina and rita ; $ 17 million , or 10 cents a share , related to an asset impairment charge related to our fine chemicals operating segment ; $ 12 million , or 7 cents a share , for debt refinancing cost ; and $ 13 million , or 8 cents a share , to reflect the net increase in the current 2006

, to reflect the net increase in the current 2006 ppg annual report and form 10-k 19 4282_txt to be issued options , number of

 |
| table | plan category                                                          | numberof securities to be issued upon exercise of outstanding options warrants and rights ( a ) | weighted- average exercise price of outstanding options warrants and rights ( b ) | number of securities remaining available for future issuance under equity compensation plans ( excluding securities reflected in column ( a ) ) ( c )
---------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------
equity compensation plans approved by security holders ( 1 )           | 9413216                                                                                | $ 58.35                                                                           | 10265556
equity compensation plans not approved by security holders ( 2 ) ( 3 ) | 2089300                                                                                | $ 70.00                                                                           | 2014
total                                                                  | 11502516                                                                                | $ 60.57                                                                           | 10265556 |


| _id | dd4c093a4 |
| title |  |
| text | equity in net earnings of affiliated companies equity income from the m-i swaco joint venture in 2010 represents eight months of equity income through the closing of the smith transaction .
interest expense interest expense of $ 298 million in 2011 increased by $ 91 million compared to 2010 primarily due to the $ 4.6 billion of long-term debt that schlumberger issued during 2011 .

interest expense of $ 207 million in 2010 decreased by $ 14 million compared to 2009 primarily due to a decline in the weighted average borrowing rates , from 3.9% ( 3.9 % ) to 3.2% ( 3.2 % ) .
research & engineering and general & administrative expenses , as a percentage of revenue , were as follows: .

although research & engineering decreased as a percentage of revenue in 2011 as compared to 2010 and in 2010 compared to 2009 , it has increased in absolute dollars by $ 154 million and $ 117 million , respectively .
these increases in absolute dollars were driven in large part by the impact of the smith acquisition .
income taxes the schlumberger effective tax rate was 24.4% ( 24.4 % ) in 2011 , 17.3% ( 17.3 % ) in 2010 , and 19.6% ( 19.6 % ) in 2009 .

the schlumberger effective tax rate is sensitive to the geographic mix of earnings .
when the percentage of pretax earnings generated outside of north america increases , the schlumberger effective tax rate will generally decrease .
conversely , when the percentage of pretax earnings generated outside of north america decreases , the schlumberger effective tax rate will generally increase .

the effective tax rate for both 2011 and 2010 was impacted by the charges and credits described in note 3 to the consolidated financial statements .
excluding the impact of these charges and credits , the effective tax rate in 2011 was 24.0% ( 24.0 % ) compared to 20.6% ( 20.6 % ) in 2010 .

this increase in the effective tax rate , excluding the impact of the charges and credits , was primarily attributable to the fact that schlumberger generated a larger proportion of its pretax earnings in north america in 2011 as compared to 2010 as a result of improved market conditions and the effect of a full year 2019s activity from the acquired smith businesses .

the effective tax rate for 2009 was also impacted by the charges and credits described in note 3 to the consolidated financial statements , but to a much lesser extent .
excluding charges and credits , the effective tax rate in 2010 was 20.6% ( 20.6 % ) compared to 19.2% ( 19.2 % ) in 2009 .

this increase is largely attributable to the geographic mix of earnings as well as the inclusion of four months 2019 results from the acquisition of smith , which served to increase the schlumberger effective tax charges and credits schlumberger recorded significant charges and credits in continuing operations during 2011 , 2010 and 2009 .
these charges and credits , which are summarized below , are more fully described in note 3 to the consolidated financial statements.

 |
| table | | 2011           | 2010           | 2009
------------------------ | -------------- | -------------- | --------------
research & engineering   | 2.7% ( 2.7 % ) | 3.3% ( 3.3 % ) | 3.5% ( 3.5 % )
general & administrative | 1.1% ( 1.1 % ) | 1.1% ( 1.1 % ) | 1.1% ( 1.1 % ) |


| _id | dd4c5ee94 |
| title |  |
| text | notes to consolidated financial statements 2014 ( continued ) these acquisitions have been recorded using the purchase method of accounting , and accordingly , the purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition .
the operating results of each acquisition are included in our consolidated statements of income from the dates of each acquisition .

fiscal 2008 during fiscal 2008 , we acquired a portfolio of merchants that process discover transactions and the rights to process discover transactions for our existing and new merchants .
as a result of this acquisition , we will now process discover transactions similarly to how we currently process visa and mastercard transactions .
the purpose of this acquisition was to offer merchants a single point of contact for discover , visa and mastercard card processing .

during fiscal 2008 , we acquired a majority of the assets of euroenvios money transfer , s.a .
and euroenvios conecta , s.l. , which we collectively refer to as lfs spain .
lfs spain consisted of two privately- held corporations engaged in money transmittal and ancillary services from spain to settlement locations primarily in latin america .
the purpose of the acquisition was to further our strategy of expanding our customer base and market share by opening additional branch locations .

during fiscal 2008 , we acquired a series of money transfer branch locations in the united states .
the purpose of these acquisitions was to increase the market presence of our dolex-branded money transfer offering .
the following table summarizes the preliminary purchase price allocations of these business acquisitions ( in thousands ) : .

the customer-related intangible assets have amortization periods of up to 14 years .
the contract-based intangible assets have amortization periods of 3 to 10 years .
these business acquisitions were not significant to our consolidated financial statements and accordingly , we have not provided pro forma information relating to these acquisitions .

in addition , during fiscal 2008 , we acquired a customer list and long-term merchant referral agreement in our canadian merchant services channel for $ 1.7 million .
the value assigned to the customer list of $ 0.1 million was expensed immediately .
the remaining value was assigned to the merchant referral agreement and is being amortized on a straight-line basis over its useful life of 10 years.

 |
| table | | total
----------------------------------------- | --------------
goodwill                                  | $ 13536
customer-related intangible assets        | 4091
contract-based intangible assets          | 1031
property and equipment                    | 267
other current assets                      | 502
total assets acquired                     | 19427
current liabilities                       | -2347 ( 2347 )
minority interest in equity of subsidiary | -486 ( 486 )
net assets acquired                       | $ 16594 |