| _id | dd4ba75b4 |
| title |  |
| text | foodservice sales volumes increased in 2012 compared with 2011 .
average sales margins were higher reflecting the realization of sales price increases for the pass-through of earlier cost increases .
raw material costs for board and resins were lower .
operating costs and distribution costs were both higher .
the u.s .
shorewood business was sold december 31 , 2011 and the non-u.s .

business was sold in january looking ahead to the first quarter of 2013 , coated paperboard sales volumes are expected to increase slightly from the fourth quarter of 2012 .
average sales price realizations are expected to be slightly lower , but margins should benefit from a more favorable product mix .
input costs are expected to be higher for energy and wood .
no planned main- tenance outages are scheduled in the first quarter .

in january 2013 the company announced the perma- nent shutdown of a coated paperboard machine at the augusta mill with an annual capacity of 140000 tons .
foodservice sales volumes are expected to increase .
average sales margins are expected to decrease due to the realization of sales price decreases effective with our january contract open- ers .
input costs for board and resin are expected to be lower and operating costs are also expected to decrease .

european consumer packaging net sales in 2012 were $ 380 million compared with $ 375 million in 2011 and $ 345 million in 2010 .
operating profits in 2012 were $ 99 million compared with $ 93 million in 2011 and $ 76 million in 2010 .
sales volumes in 2012 increased from 2011 .
average sales price realizations were higher in russian markets , but were lower in european markets .
input costs decreased , primarily for wood , and planned maintenance downtime costs were lower in 2012 than in 2011 .

looking forward to the first quarter of 2013 , sales volumes are expected to decrease in both europe and russia .
average sales price realizations are expected to be higher in russia , but be more than offset by decreases in europe .
input costs are expected to increase for wood and chemicals .
no maintenance outages are scheduled for the first quarter .
asian consumer packaging net sales were $ 830 million in 2012 compared with $ 855 million in 2011 and $ 705 million in 2010 .

operating profits in 2012 were $ 4 million compared with $ 35 million in 2011 and $ 34 million in 2010 .
sales volumes increased in 2012 compared with 2011 partially due to the start-up of a new coated paperboard machine .
average sales price realizations were significantly lower , but were partially offset by lower input costs for purchased pulp .
start-up costs for a new coated paperboard machine adversely impacted operating profits in 2012 .

in the first quarter of 2013 , sales volumes are expected to increase slightly .
average sales price realizations for folding carton board and bristols board are expected to be lower reflecting increased competitive pressures and seasonally weaker market demand .
input costs should be higher for pulp and chemicals .
however , costs related to the ramp-up of the new coated paperboard machine should be lower .

distribution xpedx , our distribution business , is one of north america 2019s leading business-to-business distributors to manufacturers , facility managers and printers , providing customized solutions that are designed to improve efficiency , reduce costs and deliver results .

customer demand is generally sensitive to changes in economic conditions and consumer behavior , along with segment specific activity including corpo- rate advertising and promotional spending , government spending and domestic manufacturing activity .
distribution 2019s margins are relatively stable across an economic cycle .
providing customers with the best choice for value in both products and supply chain services is a key competitive factor .

addition- ally , efficient customer service , cost-effective logis- tics and focused working capital management are key factors in this segment 2019s profitability .
distribution .

distr ibut ion 2019s 2012 annual sales decreased 9% ( 9 % ) from 2011 , and decreased 10% ( 10 % ) from 2010 .
operating profits in 2012 were $ 22 million ( $ 71 million exclud- ing reorganization costs ) compared with $ 34 million ( $ 86 million excluding reorganization costs ) in 2011 and $ 78 million in 2010 .

annual sales of printing papers and graphic arts supplies and equipment totaled $ 3.5 billion in 2012 compared with $ 4.0 billion in 2011 and $ 4.2 billion in 2010 , reflecting declining demand and the exiting of unprofitable businesses .
trade margins as a percent of sales for printing papers were relatively even with both 2011 and 2010 .
revenue from packaging prod- ucts was flat at $ 1.6 billion in both 2012 and 2011 and up slightly compared to $ 1.5 billion in 2010 .

pack- aging margins increased in 2012 from both 2011 and 2010 , reflecting the successful execution of strategic sourcing initiatives .
facility supplies annual revenue was $ 0.9 billion in 2012 , down compared to $ 1.0 bil- lion in 2011 and 2010 .
operating profits in 2012 included $ 49 million of reorganization costs for severance , professional services and asset write-downs compared with $ 52

 |
| table | in millions      | 2012   | 2011   | 2010
---------------- | ------ | ------ | ------
sales            | $ 6040 | $ 6630 | $ 6735
operating profit | 22     | 34     | 78 |


| _id | dd4bdbf80 |
| title |  |
| text | host hotels & resorts , inc. , host hotels & resorts , l.p. , and subsidiaries notes to consolidated financial statements 2014 ( continued ) cash paid for income taxes , net of refunds received , was $ 40 million , $ 15 million , and $ 9 million in 2017 , 2016 , and 2015 , respectively .
a reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows ( in millions ) : .

all of such uncertain tax position amounts , if recognized , would impact our reconciliation between the income tax provision calculated at the statutory u.s .
federal income tax rate of 35% ( 35 % ) ( 21% ( 21 % ) beginning with calendar year 2018 ) and the actual income tax provision recorded each year .
as of december 31 , 2017 , the tax years that remain subject to examination by major tax jurisdictions generally include 2014-2017 .

there were no material interest or penalties recorded for the years ended december 31 , 2017 , 2016 , and 2015 .
7 .
leases taxable reit subsidiaries leases we lease substantially all of our hotels to a wholly owned subsidiary that qualifies as a taxable reit subsidiary due to federal income tax restrictions on a reit 2019s ability to derive revenue directly from the operation and management of a hotel .

ground leases as of december 31 , 2017 , all or a portion of 26 of our hotels are subject to ground leases , generally with multiple renewal options , all of which are accounted for as operating leases .
for lease agreements with scheduled rent increases , we recognize the lease expense ratably over the term of the lease .
certain of these leases contain provisions for the payment of contingent rentals based on a percentage of sales in excess of stipulated amounts .

other lease information we also have leases on facilities used in our former restaurant business , all of which we subsequently subleased .
these leases and subleases contain one or more renewal options , generally for five- or ten-year periods .
the restaurant leases are accounted for as operating leases .
our contingent liability related to these leases is $ 9 million as of december 31 , 2017 .
we , however , consider the likelihood of any material funding related to these leases to be remote .

our leasing activity also includes those entered into by our hotels for various types of equipment , such as computer equipment , vehicles and telephone systems .
equipment leases are accounted for either as operating or capital leases , depending upon the characteristics of the particular lease arrangement .
equipment leases that are characterized as capital leases are classified as furniture and equipment and are depreciated over the life of the lease .

the amortization expense applicable to capitalized leases is included in depreciation expense.

 |
| table | | 2017 | 2016
---------------------- | ---- | ----
balance at january 1   | $ 11 | $ 11
balance at december 31 | $ 11 | $ 11 |


| _id | dd4c3b1d8 |
| title |  |
| text | morgan stanley notes to consolidated financial statements 2014 ( continued ) senior debt securities often are denominated in various non-u.s .
dollar currencies and may be structured to provide a return that is equity-linked , credit-linked , commodity-linked or linked to some other index ( e.g. , the consumer price index ) .
senior debt also may be structured to be callable by the company or extendible at the option of holders of the senior debt securities .

debt containing provisions that effectively allow the holders to put or extend the notes aggregated $ 2902 million at december 31 , 2015 and $ 2175 million at december 31 , 2014 .
in addition , in certain circumstances , certain purchasers may be entitled to cause the repurchase of the notes .
the aggregated value of notes subject to these arrangements was $ 650 million at december 31 , 2015 and $ 551 million at december 31 , 2014 .

subordinated debt and junior subordinated debentures generally are issued to meet the capital requirements of the company or its regulated subsidiaries and primarily are u.s .
dollar denominated .
during 2015 , morgan stanley capital trusts vi and vii redeemed all of their issued and outstanding 6.60% ( 6.60 % ) capital securities , respectively , and the company concurrently redeemed the related underlying junior subordinated debentures .
senior debt 2014structured borrowings .

senior debt 2014structured borrowings .
the company 2019s index-linked , equity-linked or credit-linked borrowings include various structured instruments whose payments and redemption values are linked to the performance of a specific index ( e.g. , standard & poor 2019s 500 ) , a basket of stocks , a specific equity security , a credit exposure or basket of credit exposures .

to minimize the exposure resulting from movements in the underlying index , equity , credit or other position , the company has entered into various swap contracts and purchased options that effectively convert the borrowing costs into floating rates based upon libor .
the company generally carries the entire structured borrowings at fair value .
the swaps and purchased options used to economically hedge the embedded features are derivatives and also are carried at fair value .

changes in fair value related to the notes and economic hedges are reported in trading revenues .
see note 3 for further information on structured borrowings .
subordinated debt and junior subordinated debentures .
included in the long-term borrowings are subordinated notes of $ 10404 million having a contractual weighted average coupon of 4.45% ( 4.45 % ) at december 31 , 2015 and $ 8339 million having a contractual weighted average coupon of 4.57% ( 4.57 % ) at december 31 , 2014 .

junior subordinated debentures outstanding by the company were $ 2870 million at december 31 , 2015 having a contractual weighted average coupon of 6.22% ( 6.22 % ) at december 31 , 2015 and $ 4868 million at december 31 , 2014 having a contractual weighted average coupon of 6.37% ( 6.37 % ) at december 31 , 2014 .

maturities of the subordinated and junior subordinated notes range from 2022 to 2067 , while maturities of certain junior subordinated debentures can be extended to 2052 at the company 2019s option .
asset and liability management .

asset and liability management .
in general , securities inventories that are not financed by secured funding sources and the majority of the company 2019s assets are financed with a combination of deposits , short-term funding , floating rate long-term debt or fixed rate long-term debt swapped to a floating rate .
fixed assets are generally financed with fixed rate long-term debt .

the company uses interest rate swaps to more closely match these borrowings to the duration , holding period and interest rate characteristics of the assets being funded and to manage interest rate risk .
these swaps effectively convert certain of the company 2019s fixed rate borrowings into floating rate obligations .
in addition , for non-u.s .

in addition , for non-u.s .
dollar currency borrowings that are not used to fund assets in the same currency , the company has entered into currency swaps that effectively convert the borrowings into u.s .
dollar obligations .
the company 2019s use of swaps for asset and liability management affected its effective average borrowing rate .
effective average borrowing rate. .

 |
| table | | 2015           | 2014           | 2013
----------------------------------------------------------------------------------------- | -------------- | -------------- | --------------
weighted average coupon of long-term borrowings at period-end ( 1 )                       | 4.0% ( 4.0 % ) | 4.2% ( 4.2 % ) | 4.4% ( 4.4 % )
effective average borrowing rate for long-term borrowings after swaps at period-end ( 1 ) | 2.1% ( 2.1 % ) | 2.3% ( 2.3 % ) | 2.2% ( 2.2 % ) |


| _id | dd4c0c5ea |
| title |  |
| text | russia and europe .
average sales price realizations for uncoated freesheet paper decreased in both europe and russia , reflecting weak economic conditions and soft market demand .
in russia , sales prices in rubles increased , but this improvement is masked by the impact of the currency depreciation against the u.s .
dollar .
input costs were significantly higher for wood in both europe and russia , partially offset by lower chemical costs .

planned maintenance downtime costs were $ 11 million lower in 2014 than in 2013 .
manufacturing and other operating costs were favorable .
entering 2015 , sales volumes in the first quarter are expected to be seasonally weaker in russia , and about flat in europe .
average sales price realizations for uncoated freesheet paper are expected to remain steady in europe , but increase in russia .
input costs should be lower for oil and wood , partially offset by higher chemicals costs .

indian papers net sales were $ 178 million in 2014 , $ 185 million ( $ 174 million excluding excise duties which were included in net sales in 2013 and prior periods ) in 2013 and $ 185 million ( $ 178 million excluding excise duties ) in 2012 .

operating profits were $ 8 million ( a loss of $ 12 million excluding a gain related to the resolution of a legal contingency ) in 2014 , a loss of $ 145 million ( a loss of $ 22 million excluding goodwill and trade name impairment charges ) in 2013 and a loss of $ 16 million in 2012 .
average sales price realizations improved in 2014 compared with 2013 due to the impact of price increases implemented in 2013 .
sales volumes were flat , reflecting weak economic conditions .

input costs were higher , primarily for wood .
operating costs and planned maintenance downtime costs were lower in 2014 .
looking ahead to the first quarter of 2015 , sales volumes are expected to be seasonally higher .
average sales price realizations are expected to decrease due to competitive pressures .
asian printing papers net sales were $ 59 million in 2014 , $ 90 million in 2013 and $ 85 million in 2012 .
operating profits were $ 0 million in 2014 and $ 1 million in both 2013 and 2012 .
u.s .

u.s .
pulp net sales were $ 895 million in 2014 compared with $ 815 million in 2013 and $ 725 million in 2012 .
operating profits were $ 57 million in 2014 compared with $ 2 million in 2013 and a loss of $ 59 million in 2012 .
sales volumes in 2014 increased from 2013 for both fluff pulp and market pulp reflecting improved market demand .
average sales price realizations increased significantly for fluff pulp , while prices for market pulp were also higher .
input costs for wood and energy were higher .

input costs for wood and energy were higher .
operating costs were lower , but planned maintenance downtime costs were $ 1 million higher .
compared with the fourth quarter of 2014 , sales volumes in the first quarter of 2015 , are expected to decrease for market pulp , but be slightly higher for fluff pulp .
average sales price realizations are expected to to be stable for fluff pulp and softwood market pulp , while hardwood market pulp prices are expected to improve .
input costs should be flat .

input costs should be flat .
planned maintenance downtime costs should be about $ 13 million higher than in the fourth quarter of 2014 .
consumer packaging demand and pricing for consumer packaging products correlate closely with consumer spending and general economic activity .
in addition to prices and volumes , major factors affecting the profitability of consumer packaging are raw material and energy costs , freight costs , manufacturing efficiency and product mix .

consumer packaging net sales in 2014 decreased 1% ( 1 % ) from 2013 , but increased 7% ( 7 % ) from 2012 .
operating profits increased 11% ( 11 % ) from 2013 , but decreased 34% ( 34 % ) from 2012 .
excluding sheet plant closure costs , costs associated with the permanent shutdown of a paper machine at our augusta , georgia mill and costs related to the sale of the shorewood business , 2014 operating profits were 11% ( 11 % ) lower than in 2013 , and 30% ( 30 % ) lower than in 2012 .

benefits from higher average sales price realizations and a favorable mix ( $ 60 million ) were offset by lower sales volumes ( $ 11 million ) , higher operating costs ( $ 9 million ) , higher planned maintenance downtime costs ( $ 12 million ) , higher input costs ( $ 43 million ) and higher other costs ( $ 7 million ) .

in addition , operating profits in 2014 include $ 8 million of costs associated with sheet plant closures , while operating profits in 2013 include costs of $ 45 million related to the permanent shutdown of a paper machine at our augusta , georgia mill and $ 2 million of costs associated with the sale of the shorewood business .
consumer packaging .

north american consumer packaging net sales were $ 2.0 billion in 2014 compared with $ 2.0 billion in 2013 and $ 2.0 billion in 2012 .
operating profits were $ 92 million ( $ 100 million excluding sheet plant closure costs ) in 2014 compared with $ 63 million ( $ 110 million excluding paper machine shutdown costs and costs related to the sale of the shorewood business ) in 2013 and $ 165 million ( $ 162 million excluding a gain associated with the sale of the shorewood business in 2012 ) .

coated paperboard sales volumes in 2014 were lower than in 2013 reflecting weaker market demand .
the business took about 41000 tons of market-related downtime in 2014 compared with about 24000 tons in 2013 .
average sales price realizations increased year-

 |
| table | in millions      | 2014   | 2013   | 2012
---------------- | ------ | ------ | ------
sales            | $ 3403 | $ 3435 | $ 3170
operating profit | 178    | 161    | 268 |


| _id | dd4b9fe5e |
| title |  |
| text | the weighted average fair value of options granted during 2010 , 2009 and 2008 was estimated to be $ 7.84 , $ 7.18 and $ 3.84 , respectively , using the black-scholes option pricing model with the assumptions below: .

at december 31 , 2010 and 2009 , the total unrecognized compensation cost related to non-vested stock awards is $ 129.3 million and $ 93.5 million , respectively , which is expected to be recognized in pre-tax income over a weighted average period of 1.7 years as of both year ends .
the company granted a total of 1.5 million restricted stock awards at prices ranging from $ 25.76 to $ 28.15 on various dates in 2010 .
these awards vest annually over three years .

these awards vest annually over three years .
the company also granted 0.9 million performance restricted stock units during 2010 .
these performance restricted stock units have been granted at the maximum achievable level and the number of shares that can vest is based on specific revenue and ebitda goals for periods from 2010 through 2012 .
during 2009 , we granted 0.5 million shares of restricted stock at a price of $ 22.55 that vest annually over 3 years .

on october 1 , 2009 , the company granted 0.4 million restricted stock units at a price of $ 24.85 per share that vested over six months .
on march 20 , 2008 , we granted 0.4 million shares of restricted stock at a price of $ 38.75 that were to vest quarterly over 2 years .
on july 2 , 2008 , 0.2 million of these shares were canceled and assumed by lps .
the remaining unvested restricted shares were converted by the conversion factor of 1.7952 .

these awards vested as of october 1 , 2009 , under the change in control provisions due to the metavante acquisition .
on october 27 , 2008 , we granted 0.8 million shares of restricted stock at a price of $ 14.35 that vest annually over 3 years .
as of december 31 , 2010 and 2009 , we have approximately 2.2 million and 1.4 million unvested restricted shares remaining .
as of december 31 , 2010 we also have 0.6 million of restricted stock units that have not vested .

share repurchase plans on october 25 , 2006 , our board of directors approved a plan authorizing repurchases of up to $ 200.0 million worth of our common stock ( the 201cold plan 201d ) .
on april 17 , 2008 , our board of directors approved a plan authorizing repurchases of up to an additional $ 250.0 million worth of our common stock ( the 201cnew plan 201d ) .

under the new plan we repurchased 5.8 million shares of our stock for $ 226.2 million , at an average price of $ 38.97 for the year ended december 31 , 2008 .
during the year ended december 31 , 2008 , we also repurchased an additional 0.2 million shares of our stock for $ 10.0 million at an average price of $ 40.56 under the old plan .
during 2007 , the company repurchased 1.6 million shares at an average price of $ 49.15 under the old plan .

on february 4 , 2010 our board of directors approved a plan authorizing repurchases of up to 15.0 million shares of our common stock in the open market , at prevailing market prices or in privately negotiated transactions , through january 31 , 2013 .
we repurchased 1.4 million shares of our common stock for $ 32.2 million , at an average price of $ 22.97 through march 31 , 2010 .
no additional shares were repurchased under this plan during the year ended december 31 , 2010 .

approximately 13.6 million shares of our common stock remain available to repurchase under this plan as of december 31 , 2010 .
on may 25 , 2010 , our board of directors authorized a leveraged recapitalization plan to repurchase up to $ 2.5 billion of our common stock at a price range of $ 29.00 2014 $ 31.00 per share of common stock through a modified 201cdutch auction 201d tender offer ( the 201ctender offer 201d ) .
the tender offer commenced on july 6 , 2010 and expired on august 3 , 2010 .

the tender offer was oversubscribed at $ 29.00 , resulting in the purchase of 86.2 million shares , including 6.4 million shares underlying previously unexercised stock options .
the repurchased shares were added to treasury stock .
fidelity national information services , inc .
and subsidiaries notes to consolidated financial statements 2014 ( continued ) %%transmsg*** transmitting job : g26369 pcn : 087000000 ***%%pcmsg|87 |00008|yes|no|03/28/2011 17:32|0|0|page is valid , no graphics -- color : n|

 |
| table | | 2010             | 2009             | 2008
---------------------------------------- | ---------------- | ---------------- | ----------------
risk free interest rate                  | 1.1% ( 1.1 % )   | 2.3% ( 2.3 % )   | 2.8% ( 2.8 % )
volatility                               | 35.6% ( 35.6 % ) | 35.0% ( 35.0 % ) | 26.0% ( 26.0 % )
dividend yield                           | 0.7% ( 0.7 % )   | 1.0% ( 1.0 % )   | 1.0% ( 1.0 % )
weighted average expected life ( years ) | 4.4              | 5.0              | 5.3 |


| _id | dd4bc9326 |
| title |  |
| text | the following is a list of distribution locations including the approximate square footage and if the location is leased or owned: .

longview , texas ( c ) 63000 owned ( a ) the frankfort , new york , distribution center began receiving merchandise in fourth quarter of fiscal 2018 , and is expected to begin shipping merchandise to stores in the first quarter of fiscal 2019 .
( b ) the leased distribution center in hagerstown is treated as an extension of the existing owned hagerstown location and is not considered a separate distribution center .
( c ) this is a mixing center designed to process certain high-volume bulk products .

the company 2019s store support center occupies approximately 260000 square feet of owned building space in brentwood , tennessee , and the company 2019s merchandising innovation center occupies approximately 32000 square feet of leased building space in nashville , tennessee .
the company also leases approximately 8000 square feet of building space for the petsense corporate headquarters , located in scottsdale , arizona .
item 3 .

item 3 .
legal proceedings the company is involved in various litigation matters arising in the ordinary course of business .
the company believes that any estimated loss related to such matters has been adequately provided for in accrued liabilities to the extent probable and reasonably estimable .
accordingly , the company currently expects these matters will be resolved without material adverse effect on its consolidated financial position , results of operations or cash flows .
item 4 .

item 4 .
mine safety disclosures not applicable.

 |
| table | distribution facility location | approximate square footage | owned/leased facility
------------------------------ | -------------------------- | ---------------------
frankfort new york ( a )       | 924000                     | owned
franklin kentucky              | 833000                     | owned
pendleton indiana              | 764000                     | owned
macon georgia                  | 684000                     | owned
waco texas                     | 666000                     | owned
casa grande arizona            | 650000                     | owned
hagerstown maryland ( b )      | 482000                     | owned
hagerstown maryland ( b )      | 309000                     | leased
waverly nebraska               | 592000                     | owned
seguin texas ( c )             | 71000                      | owned
lakewood washington            | 64000                      | leased
longview texas ( c )           | 63000                      | owned |


| _id | dd4c4af66 |
| title |  |
| text | annual maturities as of december 31 , 2006 are scheduled as follows: .

1 in addition , holders of our $ 400.0 4.50% ( 4.50 % ) notes may require us to repurchase their 4.50% ( 4.50 % ) notes for cash at par in march 2008 .
these notes will mature in 2023 if not converted or repurchased .

redemption of long-term debt in august 2005 , we redeemed the remainder of our 7.875% ( 7.875 % ) senior unsecured notes with an aggregate principal amount of $ 250.0 at maturity for a total cost of $ 258.6 , which included the principal amount of the notes , accrued interest to the redemption date , and a prepayment penalty of $ 1.4 .
to redeem these notes we used the proceeds from the sale and issuance in july 2005 of $ 250.0 floating rate senior unsecured notes due 2008 .

floating rate senior unsecured notes in december 2006 , we exchanged all of our $ 250.0 floating rate notes due 2008 for $ 250.0 aggregate principal amount floating rate notes due 2010 .
the new floating rate notes mature on november 15 , 2010 and bear interest at a per annum rate equal to three-month libor plus 200 basis points , 125 basis points less than the interest rate on the old floating rate notes .

in connection with the exchange , we made an early participation payment of $ 41.25 ( actual amount ) in cash per $ 1000 ( actual amount ) principal amount of old floating rate notes for a total payment of $ 10.3 .
in accordance with eitf issue no .

in accordance with eitf issue no .
96-19 , debtor 2019s accounting for a modification or exchange of debt instruments ( 201ceitf 96-19 201d ) , this transaction is treated as an exchange of debt for accounting purposes because the present value of the remaining cash flows under the terms of the original instrument are not substantially different from those of the new instrument .

the new floating rate notes are reflected on our consolidated balance sheet net of the $ 10.3 early participation payment , which is amortized over the life of the new floating rate notes as a discount , using an effective interest method , and recorded in interest expense .
direct fees associated with the exchange of $ 3.5 were reflected in interest expense .

4.25% ( 4.25 % ) and 4.50% ( 4.50 % ) convertible senior notes in november 2006 , we exchanged $ 400.0 of our 4.50% ( 4.50 % ) convertible senior notes due 2023 ( the 201c4.50% ( 201c4.50 % ) notes 201d ) for $ 400.0 aggregate principal amount of 4.25% ( 4.25 % ) convertible senior notes due 2023 ( the 201c4.25% ( 201c4.25 % ) notes 201d ) .

as required by eitf 96-19 , this exchange is treated as an extinguishment of the 4.50% ( 4.50 % ) notes and an issuance of 4.25% ( 4.25 % ) notes for accounting purposes because the present value of the remaining cash flows plus the fair value of the embedded conversion option under the terms of the original instrument are substantially different from those of the new instrument .

as a result , the 4.25% ( 4.25 % ) notes are reflected on our consolidated balance sheet at their fair value at issuance , or $ 477.0 .
we recorded a non-cash charge in the fourth quarter of 2006 of $ 77.0 reflecting the difference between the fair value of the new debt and the carrying value of the old debt .

the difference between fair value and carrying value will be amortized through march 15 , 2012 , which is the first date holders may require us to repurchase the 4.25% ( 4.25 % ) notes , resulting in a reduction of reported interest expense in future periods .
we also recorded a non-cash charge of $ 3.8 for the extinguishment of unamortized debt issuance costs related to the exchanged 4.50% ( 4.50 % ) notes .

our 4.25% ( 4.25 % ) notes are convertible into our common stock at a conversion price of $ 12.42 per share , subject to adjustment in specified circumstances including any payment of cash dividends on our common stock .

the conversion rate of the new notes is also subject to adjustment for certain events arising from stock splits and combinations , stock dividends , certain cash dividends and certain other actions by us that modify our capital notes to consolidated financial statements 2014 ( continued ) ( amounts in millions , except per share amounts ) %%transmsg*** transmitting job : y31000 pcn : 072000000 ***%%pcmsg|72 |00009|yes|no|02/28/2007 01:12|0|0|page is valid , no graphics -- color : d|

 |
| table | 2007                 | $ 2.6
-------------------- | --------
20081                | 2.8
2009                 | 257.0
2010                 | 240.9
2011                 | 500.0
thereafter           | 1247.9
total long-term debt | $ 2251.2 |


| _id | dd4bb3648 |
| title |  |
| text | fair value of financial instruments we believe that the fair values of current assets and current liabilities approximate their reported carrying amounts .
the fair values of non-current financial assets , liabilities and derivatives are shown in the following table. .

we value notes and other receivables based on the expected future cash flows dis- counted at risk-adjusted rates .
we determine valuations for long-term debt and other long-term liabilities based on quoted market prices or expected future payments dis- counted at risk-adjusted rates .
derivative instruments during 2003 , we entered into an interest rate swap agreement under which we receive a floating rate of interest and pay a fixed rate of interest .

the swap modifies our interest rate exposure by effectively converting a note receivable with a fixed rate to a floating rate .
the aggregate notional amount of the swap is $ 92 million and it matures in 2010 .
the swap is classified as a fair value hedge under fas no .
133 , 201caccounting for derivative instruments and hedging activities 201d ( 201cfas no .

133 201d ) , and the change in the fair value of the swap , as well as the change in the fair value of the underlying note receivable , is recognized in interest income .
the fair value of the swap was a $ 1 million asset at year-end 2005 , and a $ 3 million liability at year-end 2004 .
the hedge is highly effective , and therefore , no net gain or loss was reported during 2005 , 2004 , and 2003 .
during 2005 , we entered into two interest rate swap agreements to manage the volatil- ity of the u.s .

treasury component of the interest rate risk associated with the forecasted issuance our series f senior notes and the exchange of our series c and e senior notes for new series g senior notes .
both swaps were designated as cash flow hedges under fas no .
133 and were terminated upon pricing of the notes .
both swaps were highly effective in offsetting fluctuations in the u.s .
treasury component .
thus , there was no net gain or loss reported in earnings during 2005 .

the total amount for these swaps was recorded in other comprehensive income and was a net loss of $ 2 million during 2005 , which will be amortized to interest expense using the interest method over the life of the notes .
at year-end 2005 , we had six outstanding interest rate swap agreements to manage interest rate risk associated with the residual interests we retain in conjunction with our timeshare note sales .

historically , we were required by purchasers and/or rating agen- cies to utilize interest rate swaps to protect the excess spread within our sold note pools .
the aggregate notional amount of the swaps is $ 380 million , and they expire through 2022 .
these swaps are not accounted for as hedges under fas no .
133 .
the fair value of the swaps is a net asset of $ 5 million at year-end 2005 , and a net asset of approximately $ 3 million at year-end 2004 .

we recorded a $ 2 million net gain during 2005 and 2004 , and a $ 3 million net gain during 2003 .
during 2005 , 2004 , and 2003 , we entered into interest rate swaps to manage interest rate risk associated with forecasted timeshare note sales .
during 2005 , one swap was designated as a cash flow hedge under fas no .
133 and was highly effective in offsetting interest rate fluctuations .
the amount of the ineffectiveness is immaterial .

the amount of the ineffectiveness is immaterial .
the second swap entered into in 2005 did not qualify for hedge accounting .
the non-qualifying swaps resulted in a loss of $ 3 million during 2005 , a gain of $ 2 million during 2004 and a loss of $ 4 million during 2003 .
these amounts are included in the gains from the sales of timeshare notes receivable .

during 2005 , 2004 , and 2003 , we entered into forward foreign exchange contracts to manage the foreign currency exposure related to certain monetary assets .
the aggregate dollar equivalent of the notional amount of the contracts is $ 544 million at year-end 2005 .
the forward exchange contracts do not qualify as hedges in accordance with fas no .
133 .
the fair value of the forward contracts is a liability of $ 2 million at year-end 2005 and zero at year-end 2004 .

we recorded a $ 26 million gain during 2005 and a $ 3 million and $ 2 million net loss during 2004 and 2003 , respectively , relating to these forward foreign exchange contracts .
the net gains and losses for all years were offset by income and losses recorded from translating the related monetary assets denominated in foreign currencies into u.s .
dollars .

dollars .
during 2005 , 2004 , and 2003 , we entered into foreign exchange option and forward contracts to hedge the potential volatility of earnings and cash flows associated with variations in foreign exchange rates .
the aggregate dollar equivalent of the notional amounts of the contracts is $ 27 million at year-end 2005 .
these contracts have terms of less than one year and are classified as cash flow hedges .
changes in their fair values are recorded as a component of other comprehensive income .

the fair value of the option contracts is approximately zero at year-end 2005 and 2004 .
during 2004 , it was deter- mined that certain derivatives were no longer effective in offsetting the hedged item .
thus , cash flow hedge accounting treatment was discontinued and the ineffective con- tracts resulted in a loss of $ 1 million , which was reported in earnings for 2004 .
the remaining hedges were highly effective and there was no net gain or loss reported in earnings for 2005 , 2004 , and 2003 .

as of year-end 2005 , there were no deferred gains or losses on existing contracts accumulated in other comprehensive income that we expect to reclassify into earnings over the next year .
during 2005 , we entered into forward foreign exchange contracts to manage currency exchange rate volatility associated with certain investments in foreign operations .
one contract was designated as a hedge in the net investment of a foreign operation under fas no .
133 .

133 .
the hedge was highly effective and resulted in a $ 1 million net loss in the cumulative translation adjustment at year-end 2005 .
certain contracts did not qualify as hedges under fas no .
133 and resulted in a gain of $ 3 million for 2005 .
the contracts offset the losses associated with translation adjustments for various investments in for- eign operations .

the contracts have an aggregate dollar equivalent of the notional amounts of $ 229 million and a fair value of approximately zero at year-end 2005 .
contingencies guarantees we issue guarantees to certain lenders and hotel owners primarily to obtain long-term management contracts .
the guarantees generally have a stated maximum amount of funding and a term of five years or less .

the terms of guarantees to lenders generally require us to fund if cash flows from hotel operations are inadequate to cover annual debt service or to repay the loan at the end of the term .
the terms of the guarantees to hotel owners generally require us to fund if the hotels do not attain specified levels of 5 0 | m a r r i o t t i n t e r n a t i o n a l , i n c .
2 0 0 5

 |
| table | ( $ in millions )                              | 2005 carrying amount | 2005 fair value | 2005 carrying amount | fair value
---------------------------------------------- | -------------------- | --------------- | -------------------- | ----------
notes and other long-term assets               | $ 1374               | $ 1412          | $ 1702               | $ 1770
long-term debt and other long-term liabilities | $ 1636               | $ 1685          | $ 848                | $ 875
derivative instruments                         | $ 6                  | $ 6             | $ 2014               | $ 2014 |


| _id | dd4c14862 |
| title |  |
| text | 10-k altria ar release tuesday , february 27 , 2018 10:00pm andra design llc verdicts have been appealed , there remains a risk that such relief may not be obtainable in all cases .
this risk has been substantially reduced given that 47 states and puerto rico limit the dollar amount of bonds or require no bond at all .

as discussed below , however , tobacco litigation plaintiffs have challenged the constitutionality of florida 2019s bond cap statute in several cases and plaintiffs may challenge state bond cap statutes in other jurisdictions as well .
such challenges may include the applicability of state bond caps in federal court .
states , including florida , may also seek to repeal or alter bond cap statutes through legislation .
although altria group , inc .

although altria group , inc .
cannot predict the outcome of such challenges , it is possible that the consolidated results of operations , cash flows or financial position of altria group , inc. , or one or more of its subsidiaries , could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome of one or more such challenges .
altria group , inc .

altria group , inc .
and its subsidiaries record provisions in the consolidated financial statements for pending litigation when they determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated .
at the present time , while it is reasonably possible that an unfavorable outcome in a case may occur , except to the extent discussed elsewhere in this note 18 .

contingencies : ( i ) management has concluded that it is not probable that a loss has been incurred in any of the pending tobacco-related cases ; ( ii ) management is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome in any of the pending tobacco-related cases ; and ( iii ) accordingly , management has not provided any amounts in the consolidated financial statements for unfavorable outcomes , if any .
litigation defense costs are expensed as incurred .

altria group , inc .
and its subsidiaries have achieved substantial success in managing litigation .
nevertheless , litigation is subject to uncertainty and significant challenges remain .
it is possible that the consolidated results of operations , cash flows or financial position of altria group , inc. , or one or more of its subsidiaries , could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation .

altria group , inc .
and each of its subsidiaries named as a defendant believe , and each has been so advised by counsel handling the respective cases , that it has valid defenses to the litigation pending against it , as well as valid bases for appeal of adverse verdicts .
each of the companies has defended , and will continue to defend , vigorously against litigation challenges .
however , altria group , inc .

however , altria group , inc .
and its subsidiaries may enter into settlement discussions in particular cases if they believe it is in the best interests of altria group , inc .
to do so .
overview of altria group , inc .

and/or pm usa tobacco- related litigation types and number of cases : claims related to tobacco products generally fall within the following categories : ( i ) smoking and health cases alleging personal injury brought on behalf of individual plaintiffs ; ( ii ) smoking and health cases primarily alleging personal injury or seeking court-supervised programs for ongoing medical monitoring and purporting to be brought on behalf of a class of individual plaintiffs , including cases in which the aggregated

, including cases in which the aggregated claims of a number of individual plaintiffs are to be tried in a single proceeding ; ( iii ) health care cost recovery cases brought by governmental ( both domestic and foreign ) plaintiffs seeking reimbursement for health care expenditures allegedly caused by cigarette smoking and/or disgorgement of profits ; ( iv ) class action suits alleging that the uses of the terms 201clights 201d and 201cultra lights 201d constitute deceptive and unfair trade practices ,

constitute deceptive and unfair trade practices , common law or statutory fraud , unjust enrichment , breach of warranty or violations of the racketeer influenced and corrupt organizations act ( 201crico 201d ) ; and ( v ) other tobacco-related litigation described below .

plaintiffs 2019 theories of recovery and the defenses raised in pending smoking and health , health care cost recovery and 201clights/ultra lights 201d cases are discussed below .
the table below lists the number of certain tobacco-related cases pending in the united states against pm usa and , in some instances , altria group , inc .
as of december 31 , 2017 , 2016 and .

( 1 ) does not include 2414 cases brought by flight attendants seeking compensatory damages for personal injuries allegedly caused by exposure to environmental tobacco smoke ( 201cets 201d ) .
the flight attendants allege that they are members of an ets smoking and health class action in florida , which was settled in 1997 ( broin ) .

the terms of the court-approved settlement in that case allowed class members to file individual lawsuits seeking compensatory damages , but prohibited them from seeking punitive damages .
also , does not include individual smoking and health cases brought by or on behalf of plaintiffs in florida state and federal courts following the decertification of the engle case ( discussed below in smoking and health litigation - engle class action ) .

( 2 ) includes as one case the 30 civil actions that were to be tried in six consolidated trials in west virginia ( in re : tobacco litigation ) .
pm usa is a defendant in nine of the 30 cases .
the parties have agreed to resolve the cases for an immaterial amount and have so notified the court .
( 3 ) see health care cost recovery litigation - federal government 2019s lawsuit below .

international tobacco-related cases : as of january 29 , 2018 , pm usa is a named defendant in 10 health care cost recovery actions in canada , eight of which also name altria group , inc .
as a defendant .
pm usa and altria group , inc .
are also named defendants in seven smoking and health class actions filed in various canadian provinces .
see guarantees and other similar matters below for a discussion of the distribution agreement between altria group , inc .

and pmi that provides for indemnities for certain liabilities concerning tobacco products.

 |
| table | | 2017 | 2016 | 2015
----------------------------------------------------------------------- | ---- | ---- | ----
individual smoking and health cases ( 1 )                               | 92   | 70   | 65
smoking and health class actions and aggregated claims litigation ( 2 ) | 4    | 5    | 5
health care cost recovery actions ( 3 )                                 | 1    | 1    | 1
201clights/ultra lights 201d class actions                              | 3    | 8    | 11 |


| _id | dd4b9362c |
| title |  |
| text | f-80 www.thehartford.com the hartford financial services group , inc .
notes to consolidated financial statements ( continued ) 14 .
commitments and contingencies ( continued ) future minimum lease commitments as of december 31 , 2016 operating leases .

[1] excludes expected future minimum sublease income of approximately $ 2 , $ 2 , $ 2 , $ 2 , $ 0 and $ 0 in 2017 , 2018 , 2019 , 2020 , 2021 and thereafter respectively .
the company 2019s lease commitments consist primarily of lease agreements for office space , automobiles , and office equipment that expire at various dates .

unfunded commitments as of december 31 , 2016 , the company has outstanding commitments totaling $ 1.6 billion , of which $ 1.2 billion is committed to fund limited partnership and other alternative investments , which may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses .
additionally , $ 313 of the outstanding commitments relate to various funding obligations associated with private placement securities .

the remaining outstanding commitments of $ 95 relate to mortgage loans the company is expecting to fund in the first half of 2017 .
guaranty funds and other insurance-related assessments in all states , insurers licensed to transact certain classes of insurance are required to become members of a guaranty fund .

in most states , in the event of the insolvency of an insurer writing any such class of insurance in the state , the guaranty funds may assess its members to pay covered claims of the insolvent insurers .
assessments are based on each member 2019s proportionate share of written premiums in the state for the classes of insurance in which the insolvent insurer was engaged .
assessments are generally limited for any year to one or two percent of the premiums written per year depending on the state .

some states permit member insurers to recover assessments paid through surcharges on policyholders or through full or partial premium tax offsets , while other states permit recovery of assessments through the rate filing process .
liabilities for guaranty fund and other insurance-related assessments are accrued when an assessment is probable , when it can be reasonably estimated , and when the event obligating the company to pay an imposed or probable assessment has occurred .

liabilities for guaranty funds and other insurance- related assessments are not discounted and are included as part of other liabilities in the consolidated balance sheets .
as of december 31 , 2016 and 2015 the liability balance was $ 134 and $ 138 , respectively .
as of december 31 , 2016 and 2015 amounts related to premium tax offsets of $ 34 and $ 44 , respectively , were included in other assets .

derivative commitments certain of the company 2019s derivative agreements contain provisions that are tied to the financial strength ratings , as set by nationally recognized statistical agencies , of the individual legal entity that entered into the derivative agreement .

if the legal entity 2019s financial strength were to fall below certain ratings , the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and in certain instances enable the counterparties to terminate the agreements and demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement .
the settlement amount is determined by netting the derivative positions transacted under each agreement .

if the termination rights were to be exercised by the counterparties , it could impact the legal entity 2019s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity .
the aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of december 31 , 2016 was $ 1.4 billion .

of this $ 1.4 billion , the legal entities have posted collateral of $ 1.7 billion in the normal course of business .
in addition , the company has posted collateral of $ 31 associated with a customized gmwb derivative .
based on derivative market values as of december 31 , 2016 , a downgrade of one level below the current financial strength ratings by either moody 2019s or s&p would not require additional assets to be posted as collateral .

based on derivative market values as of december 31 , 2016 , a downgrade of two levels below the current financial strength ratings by either moody 2019s or s&p would require additional $ 10 of assets to be posted as collateral .
these collateral amounts could change as derivative market values change , as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated .
the nature of the collateral that we post , when required , is primarily in the form of u.s .

treasury bills , u.s .
treasury notes and government agency securities .
guarantees in the ordinary course of selling businesses or entities to third parties , the company has agreed to indemnify purchasers for losses arising subsequent to the closing due to breaches of representations and warranties with respect to the business or entity being sold or with respect to covenants and obligations of the company and/or its subsidiaries .

these obligations are typically subject to various time limitations , defined by the contract or by operation of law , such as statutes of limitation .
in some cases , the maximum potential obligation is subject to contractual limitations , while in other cases such limitations are not specified or applicable .
the company does not expect to make any payments on these guarantees and is not carrying any liabilities associated with these guarantees.

 |
| table | | operating leases
-------------------------------- | ----------------
2017                             | $ 42
2018                             | 35
2019                             | 28
2020                             | 20
2021                             | 10
thereafter                       | 28
total minimum lease payments [1] | $ 163 |


| _id | dd4c57946 |
| title |  |
| text | 38| | duke realty corporation annual report 2012 is dependent upon a number of factors including the availability of credit to potential buyers to purchase properties at prices that we consider acceptable .
although we believe that we have demonstrated our ability to generate significant liquidity through the disposition of non-strategic properties , potential future adverse changes to general market and economic conditions could negatively impact our further ability to dispose of such properties .

transactions with unconsolidated entities transactions with unconsolidated partnerships and joint ventures also provide a source of liquidity .
from time to time we will sell properties to unconsolidated entities , while retaining a continuing interest in that entity , and receive proceeds commensurate to those interests that we do not own .

additionally , unconsolidated entities will from time to time obtain debt financing and will distribute to us , and our joint venture partners , all or a portion of the proceeds from such debt financing .

uses of liquidity our principal uses of liquidity include the following : 2022 property investment ; 2022 leasing/capital costs ; 2022 dividends and distributions to shareholders and unitholders ; 2022 long-term debt maturities ; 2022 opportunistic repurchases of outstanding debt and preferred stock ; and 2022 other contractual obligations .

property investment we continue to pursue an asset repositioning strategy that involves increasing our investment concentration in industrial and medical office properties while reducing our investment concentration in suburban .

office properties .
pursuant to this strategy , we evaluate development and acquisition opportunities based upon market outlook , including general economic conditions , supply and long-term growth potential .

our ability to make future property investments , along with being dependent upon identifying suitable acquisition and development opportunities , is also dependent upon our continued access to our longer-term sources of liquidity , including issuances of debt or equity securities as well as generating cash flow by disposing of selected properties .

leasing/capital costs tenant improvements and leasing commissions related to the initial leasing of newly completed or vacant space in acquired properties are referred to as first generation expenditures .
such expenditures are included within development of real estate investments and other deferred leasing costs in our consolidated statements of cash flows .

tenant improvements and leasing costs to re-let rental space that had been previously under lease to tenants are referred to as second generation expenditures .
building improvements that are not specific to any tenant but serve to improve integral components of our real estate properties are also second generation expenditures .
one of our principal uses of our liquidity is to fund the second generation leasing/capital expenditures of our real estate investments .

as illustrated in the tables below , we have significantly reduced such expenditures in 2012 as a direct result of repositioning our investment concentration in office properties in accordance with our asset strategy .
the following is a summary of our second generation capital expenditures by type of expenditure ( in thousands ) :

 |
| table | | 2012    | 2011    | 2010
------------------------------------- | ------- | ------- | -------
second generation tenant improvements | $ 26643 | $ 50079 | $ 36676
second generation leasing costs       | 31059   | 38130   | 39090
building improvements                 | 6182    | 11055   | 12957
total                                 | $ 63884 | $ 99264 | $ 88723 |


| _id | dd4bc93f8 |
| title |  |
| text | ireland .
holdings ireland , everest dublin holdings , ireland re and ireland insurance conduct business in ireland and are subject to taxation in ireland .
aavailable information .

aavailable information .
the company 2019s annual reports on form 10-k , quarterly reports on form 10-q , current reports on form 8-k , proxy statements and amendments to those reports are available free of charge through the company 2019s internet website at http://www.everestre.com as soon as reasonably practicable after such reports are electronically filed with the securities and exchange commission ( the 201csec 201d ) .
item 1a .

item 1a .
risk factors in addition to the other information provided in this report , the following risk factors should be considered when evaluating an investment in our securities .
if the circumstances contemplated by the individual risk factors materialize , our business , financial condition and results of operations could be materially and adversely affected and the trading price of our common shares could decline significantly .

risks relating to our business fluctuations in the financial markets could result in investment losses .
prolonged and severe disruptions in the overall public and private debt and equity markets , such as occurred during 2008 , could result in significant realized and unrealized losses in our investment portfolio .
although financial markets have significantly improved since 2008 , they could deteriorate in the future .

there could also be disruption in individual market sectors , such as occurred in the energy sector in recent years .
such declines in the financial markets could result in significant realized and unrealized losses on investments and could have a material adverse impact on our results of operations , equity , business and insurer financial strength and debt ratings .
our results could be adversely affected by catastrophic events .

we are exposed to unpredictable catastrophic events , including weather-related and other natural catastrophes , as well as acts of terrorism .
any material reduction in our operating results caused by the occurrence of one or more catastrophes could inhibit our ability to pay dividends or to meet our interest and principal payment obligations .
by way of illustration , during the past five calendar years , pre-tax catastrophe losses , net of reinsurance , were as follows: .

our losses from future catastrophic events could exceed our projections .
we use projections of possible losses from future catastrophic events of varying types and magnitudes as a strategic underwriting tool .
we use these loss projections to estimate our potential catastrophe losses in certain geographic areas and decide on the placement of retrocessional coverage or other actions to limit the extent of potential losses in a given geographic area .

these loss projections are approximations , reliant on a mix of quantitative and qualitative processes , and actual losses may exceed the projections by a material amount , resulting in a material adverse effect on our financial condition and results of operations.

 |
| table | calendar year:          | pre-tax catastrophe losses
----------------------- | --------------------------
( dollars in millions ) |
2018                    | $ 1800.2
2017                    | 1472.6
2016                    | 301.2
2015                    | 53.8
2014                    | 56.3 |


| _id | dd4c56e56 |
| title |  |
| text | the fair value measurements of the borrowings under our credit agreement and receivables facility are classified as level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market , including interest rates on recent financing transactions with similar terms and maturities .
we estimated the fair value by calculating the upfront cash payment a market participant would require at december 31 , 2016 to assume these obligations .

the fair value of our notes is classified as level 1 within the fair value hierarchy since it is determined based upon observable market inputs including quoted market prices in an active market .
the fair value of our euro notes is determined based upon observable market inputs including quoted market prices in a market that is not active , and therefore is classified as level 2 within the fair value hierarchy .
note 12 .

note 12 .
commitments and contingencies operating leases we are obligated under noncancelable operating leases for corporate office space , warehouse and distribution facilities , trucks and certain equipment .
the future minimum lease commitments under these leases at december 31 , 2016 are as follows ( in thousands ) : years ending december 31: .

rental expense for operating leases was approximately $ 211.5 million , $ 168.4 million and $ 148.5 million during the years ended december 31 , 2016 , 2015 and 2014 , respectively .
we guarantee the residual values of the majority of our truck and equipment operating leases .
the residual values decline over the lease terms to a defined percentage of original cost .

in the event the lessor does not realize the residual value when a piece of equipment is sold , we would be responsible for a portion of the shortfall .
similarly , if the lessor realizes more than the residual value when a piece of equipment is sold , we would be paid the amount realized over the residual value .
had we terminated all of our operating leases subject to these guarantees at december 31 , 2016 , our portion of the guaranteed residual value would have totaled approximately $ 59.0 million .

we have not recorded a liability for the guaranteed residual value of equipment under operating leases as the recovery on disposition of the equipment under the leases is expected to approximate the guaranteed residual value .
litigation and related contingencies we have certain contingencies resulting from litigation , claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business .

we currently expect that the resolution of such contingencies will not materially affect our financial position , results of operations or cash flows.

 |
| table | 2017                          | $ 200450
----------------------------- | ---------
2018                          | 168926
2019                          | 136462
2020                          | 110063
2021                          | 82494
thereafter                    | 486199
future minimum lease payments | $ 1184594 |


| _id | dd4970318 |
| title |  |
| text | ( in millions ) 2010 2009 2008 .

operating activities net cash provided by operating activities increased by $ 374 million to $ 3547 million in 2010 as compared to 2009 .
the increase primarily was attributable to an improvement in our operating working capital balances of $ 570 million as discussed below , and $ 187 million related to lower net income tax payments , as compared to 2009 .
partially offsetting these improvements was a net reduction in cash from operations of $ 350 million related to our defined benefit pension plan .

this reduction was the result of increased contributions to the pension trust of $ 758 million as compared to 2009 , partially offset by an increase in the cas costs recovered on our contracts .
operating working capital accounts consists of receivables , inventories , accounts payable , and customer advances and amounts in excess of costs incurred .

the improvement in cash provided by operating working capital was due to a decline in 2010 accounts receivable balances compared to 2009 , and an increase in 2010 customer advances and amounts in excess of costs incurred balances compared to 2009 .
these improvements partially were offset by a decline in accounts payable balances in 2010 compared to 2009 .

the decline in accounts receivable primarily was due to higher collections on various programs at electronic systems , is&gs , and space systems business areas .
the increase in customer advances and amounts in excess of costs incurred primarily was attributable to an increase on government and commercial satellite programs at space systems and air mobility programs at aeronautics , partially offset by a decrease on various programs at electronic systems .

the decrease in accounts payable was attributable to the timing of accounts payable activities across all segments .
net cash provided by operating activities decreased by $ 1248 million to $ 3173 million in 2009 as compared to 2008 .
the decline primarily was attributable to an increase in our contributions to the defined benefit pension plan of $ 1373 million as compared to 2008 and an increase in our operating working capital accounts of $ 147 million .

partially offsetting these items was the impact of lower net income tax payments in 2009 as compared to 2008 in the amount of $ 319 million .

the decline in cash provided by operating working capital primarily was due to growth of receivables on various programs in the ms2 and gt&l lines of business at electronic systems and an increase in inventories on combat aircraft programs at aeronautics , which partially were offset by increases in customer advances and amounts in excess of costs incurred on government satellite programs at space systems and the timing of accounts payable activities .

investing activities capital expenditures 2013 the majority of our capital expenditures relate to facilities infrastructure and equipment that are incurred to support new and existing programs across all of our business segments .
we also incur capital expenditures for it to support programs and general enterprise it infrastructure .
capital expenditures for property , plant and equipment amounted to $ 820 million in 2010 , $ 852 million in 2009 , and $ 926 million in 2008 .

we expect that our operating cash flows will continue to be sufficient to fund our annual capital expenditures over the next few years .
acquisitions , divestitures and other activities 2013 acquisition activities include both the acquisition of businesses and investments in affiliates .
amounts paid in 2010 of $ 148 million primarily related to investments in affiliates .
we paid $ 435 million in 2009 for acquisition activities , compared with $ 233 million in 2008 .

in 2010 , we received proceeds of $ 798 million from the sale of eig , net of $ 17 million in transaction costs ( see note 2 ) .
there were no material divestiture activities in 2009 and 2008 .
during 2010 , we increased our short-term investments by $ 171 million compared to an increase of $ 279 million in 2009 .

financing activities share activity and dividends 2013 during 2010 , 2009 , and 2008 , we repurchased 33.0 million , 24.9 million , and 29.0 million shares of our common stock for $ 2483 million , $ 1851 million , and $ 2931 million .
of the shares we repurchased in 2010 , 0.9 million shares for $ 63 million were repurchased in december but settled and were paid for in january 2011 .

in october 2010 , our board of directors approved a new share repurchase program for the repurchase of our common stock from time-to-time , up to an authorized amount of $ 3.0 billion ( see note 12 ) .
under the program , we have discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable law and regulation .

we repurchased a total of 11.2 million shares under the program for $ 776 million , and as of december 31 , 2010 , there remained $ 2224 million available for additional share repurchases .
in connection with their approval of the new share repurchase program , our board terminated our previous share repurchase program .
cash received from the issuance of our common stock in connection with stock option exercises during 2010 , 2009 , and 2008 totaled $ 59 million , $ 40 million , and $ 250 million .

those activities resulted in the issuance of 1.4 million shares , 1.0 million shares , and 4.7 million shares during the respective periods.

 |
| table | ( in millions )                           | 2010           | 2009           | 2008
----------------------------------------- | -------------- | -------------- | --------------
net cash provided by operating activities | $ 3547         | $ 3173         | $ 4421
net cash used for investing activities    | -319 ( 319 )   | -1518 ( 1518 ) | -907 ( 907 )
net cash used for financing activities    | -3363 ( 3363 ) | -1476 ( 1476 ) | -3938 ( 3938 ) |


| _id | dd4bb05e2 |
| title |  |
| text | american tower corporation and subsidiaries notes to consolidated financial statements 2014 ( continued ) basis step-up from corporate restructuring represents the tax effects of increasing the basis for tax purposes of certain of the company 2019s assets in conjunction with its spin-off from american radio systems corporation , its former parent company .

at december 31 , 2003 , the company had net federal and state operating loss carryforwards available to reduce future taxable income of approximately $ 0.9 billion and $ 1.5 billion , respectively .
if not utilized , the company 2019s net operating loss carryforwards expire as follows ( in thousands ) : .

sfas no .
109 , 201caccounting for income taxes , 201d requires that companies record a valuation allowance when it is 201cmore likely than not that some portion or all of the deferred tax assets will not be realized . 201d at december 31 , 2003 , the company has provided a valuation allowance of approximately $ 156.7 million , primarily related to net state deferred tax assets , capital loss carryforwards and the lost tax benefit and costs associated with our tax refund claims .

the company has not provided a valuation allowance for the remaining net deferred tax assets , primarily its tax refund claims and federal net operating loss carryforwards , as management believes the company will be successful with its tax refund claims and have sufficient time to realize these federal net operating loss carryforwards during the twenty-year tax carryforward period .

the company intends to recover a portion of its deferred tax asset through its tax refund claims , related to certain federal net operating losses , filed during 2003 as part of a tax planning strategy implemented in 2002 .
the recoverability of its remaining net deferred tax asset has been assessed utilizing stable state ( no growth ) projections based on its current operations .

the projections show a significant decrease in depreciation and interest expense in the later years of the carryforward period as a result of a significant portion of its assets being fully depreciated during the first fifteen years of the carryforward period and debt repayments reducing interest expense .
accordingly , the recoverability of the net deferred tax asset is not dependent on material improvements to operations , material asset sales or other non-routine transactions .

based on its current outlook of future taxable income during the carryforward period , management believes that the net deferred tax asset will be realized .
the realization of the company 2019s deferred tax assets will be dependent upon its ability to generate approximately $ 1.0 billion in taxable income from january 1 , 2004 to december 31 , 2023 .

if the company is unable to generate sufficient taxable income in the future , or carry back losses as described above , it will be required to reduce its net deferred tax asset through a charge to income tax expense , which would result in a corresponding decrease in stockholders 2019 equity .
depending on the resolution of the verestar bankruptcy proceedings described in note 2 , the company may be entitled to a worthless stock or bad debt deduction for its investment in verestar .

no income tax benefit has been provided for these potential deductions due to the uncertainty surrounding the bankruptcy proceedings .
13 .
stockholders 2019 equity preferred stock as of december 31 , 2003 the company was authorized to issue up to 20.0 million shares of $ .01 par value preferred stock .
as of december 31 , 2003 and 2002 there were no preferred shares issued or outstanding.

 |
| table | years ended december 31, | federal  | state
------------------------ | -------- | ---------
2004 to 2008             | $ 1451   | $ 483578
2009 to 2013             | 12234    | 66666
2014 to 2018             | 10191    | 235589
2019 to 2023             | 903010   | 728139
total                    | $ 926886 | $ 1513972 |


| _id | dd4b9ed6a |
| title |  |
| text | analog devices , inc .
notes to consolidated financial statements 2014 ( continued ) depreciation expense for property , plant and equipment was $ 134.5 million , $ 130.1 million and $ 114.1 million in fiscal 2016 , 2015 and 2014 , respectively .
the company reviews property , plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable .

recoverability of these assets is determined by comparison of their carrying amount to the future undiscounted cash flows the assets are expected to generate over their remaining economic lives .
if such assets are considered to be impaired , the impairment to be recognized in earnings equals the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price , if any , or a value determined by utilizing a discounted cash flow technique .

if such assets are not impaired , but their useful lives have decreased , the remaining net book value is depreciated over the revised useful life .
we have not recorded any material impairment charges related to our property , plant and equipment in fiscal 2016 , fiscal 2015 or fiscal 2014 .
f .

f .
goodwill and intangible assets goodwill the company evaluates goodwill for impairment annually , as well as whenever events or changes in circumstances suggest that the carrying value of goodwill may not be recoverable .
the company tests goodwill for impairment at the reporting unit level ( operating segment or one level below an operating segment ) on an annual basis on the first day of the fourth quarter ( on or about august 1 ) or more frequently if indicators of impairment exist .

for the company 2019s latest annual impairment assessment that occurred as of july 31 , 2016 , the company identified its reporting units to be its seven operating segments .
the performance of the test involves a two-step process .
the first step of the quantitative impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values , including goodwill .

the company determines the fair value of its reporting units using a weighting of the income and market approaches .
under the income approach , the company uses a discounted cash flow methodology which requires management to make significant estimates and assumptions related to forecasted revenues , gross profit margins , operating income margins , working capital cash flow , perpetual growth rates , and long-term discount rates , among others .

for the market approach , the company uses the guideline public company method .
under this method the company utilizes information from comparable publicly traded companies with similar operating and investment characteristics as the reporting units , to create valuation multiples that are applied to the operating performance of the reporting unit being tested , in order to obtain their respective fair values .

in order to assess the reasonableness of the calculated reporting unit fair values , the company reconciles the aggregate fair values of its reporting units determined , as described above , to its current market capitalization , allowing for a reasonable control premium .

if the carrying amount of a reporting unit , calculated using the above approaches , exceeds the reporting unit 2019s fair value , the company performs the second step of the goodwill impairment test to determine the amount of impairment loss .
the second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit 2019s goodwill with the carrying value of that reporting unit .
there was no impairment of goodwill in any of the fiscal years presented .

the company 2019s next annual impairment assessment will be performed as of the first day of the fourth quarter of the fiscal year ending october 28 , 2017 ( fiscal 2017 ) unless indicators arise that would require the company to reevaluate at an earlier date .
the following table presents the changes in goodwill during fiscal 2016 and fiscal 2015: .

( 1 ) amount in fiscal 2015 represents changes to goodwill as a result of finalizing the acquisition accounting related to the hittite acquisition .
( 2 ) represents goodwill related to other acquisitions that were not material to the company on either an individual or aggregate basis .
intangible assets the company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of assets may not be recoverable .

recoverability of these assets is determined by comparison of their carrying value to the estimated future undiscounted cash flows the assets are expected to generate over their remaining

 |
| table | | 2016           | 2015
------------------------------------------------------- | -------------- | --------------
balance at beginning of year                            | $ 1636526      | $ 1642438
acquisition of hittite ( note 6 ) ( 1 )                 | 2014           | -1105 ( 1105 )
goodwill adjustment related to other acquisitions ( 2 ) | 44046          | 3663
foreign currency translation adjustment                 | -1456 ( 1456 ) | -8470 ( 8470 )
balance at end of year                                  | $ 1679116      | $ 1636526 |


| _id | dd49889a4 |
| title |  |
| text | goodwill goodwill represents the excess of the solexa purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed .
the company believes that the acquisition of solexa will produce the following significant benefits : 2022 increased market presence and opportunities .
the combination of the company and solexa should increase the combined company 2019s market presence and opportunities for growth in revenue , earnings and stockholder return .

the company believes that the solexa technology is highly complementary to the company 2019s own portfolio of products and services and will enhance the company 2019s capabilities to service its existing customers , as well as accelerate the develop- ment of additional technologies , products and services .

the company believes that integrating solexa 2019s capabilities with the company 2019s technologies will better position the company to address the emerging biomarker research and development and in-vitro and molecular diag- nostic markets .
the company began to recognize revenue from products shipped as a result of this acquisition during the first quarter of 2007 .
2022 operating efficiencies .

2022 operating efficiencies .
the combination of the company and solexa provides the opportunity for potential economies of scale and cost savings .
the company believes that these primary factors support the amount of goodwill recognized as a result of the purchase price paid for solexa , in relation to other acquired tangible and intangible assets , including in-process research and development .

the following unaudited pro forma information shows the results of the company 2019s operations for the specified reporting periods as though the acquisition had occurred as of the beginning of that period ( in thousands , except per share data ) : year ended december 30 , year ended december 31 .

the pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisition taken place as of the beginning of the periods presented , or the results that may occur in the future .
the pro forma results exclude the $ 303.4 million non-cash acquired ipr&d charge recorded upon the closing of the acquisition during the first quarter of 2007 .

investment in solexa on november 12 , 2006 , the company entered into a definitive securities purchase agreement with solexa in which the company invested approximately $ 50 million in solexa in exchange for 5154639 newly issued shares of solexa common stock in conjunction with the merger of the two companies .
this investment was valued at $ 67.8 million as of december 31 , 2006 , which represented a market value of $ 13.15 per share of solexa common stock .

this investment was eliminated as part of the company 2019s purchase accounting upon the closing of the merger on january 26 , 2007 .
illumina , inc .
notes to consolidated financial statements 2014 ( continued )

 |
| table | | year ended december 30 2007 | year ended december 31 2006
------------------------------------- | --------------------------- | ---------------------------
revenue                               | $ 366854                    | $ 187103
net income ( loss )                   | $ 17388                     | $ -38957 ( 38957 )
net income ( loss ) per share basic   | $ 0.32                      | $ -0.68 ( 0.68 )
net income ( loss ) per share diluted | $ 0.29                      | $ -0.68 ( 0.68 ) |


| _id | dd4b94ff4 |
| title |  |
| text | 82 | 2017 form 10-k a reconciliation of the beginning and ending amount of gross unrecognized tax benefits for uncertain tax positions , including positions impacting only the timing of tax benefits , follows .
reconciliation of unrecognized tax benefits:1 years a0ended a0december a031 .

1 foreign currency impacts are included within each line as applicable .
2 includes cash payment or other reduction of assets to settle liability .
we classify interest and penalties on income taxes as a component of the provision for income taxes .
we recognized a net provision for interest and penalties of $ 38 million , $ 34 million and $ 20 million during the years ended december 31 , 2017 , 2016 and 2015 , respectively .

the total amount of interest and penalties accrued was $ 157 million and $ 120 million as of december a031 , 2017 and 2016 , respectively .
on january 31 , 2018 , we received a revenue agent 2019s report from the irs indicating the end of the field examination of our u.s .
income tax returns for 2010 to 2012 .

income tax returns for 2010 to 2012 .
in the audits of 2007 to 2012 including the impact of a loss carryback to 2005 , the irs has proposed to tax in the united states profits earned from certain parts transactions by csarl , based on the irs examination team 2019s application of the 201csubstance-over-form 201d or 201cassignment-of-income 201d judicial doctrines .
we are vigorously contesting the proposed increases to tax and penalties for these years of approximately $ 2.3 billion .

we believe that the relevant transactions complied with applicable tax laws and did not violate judicial doctrines .
we have filed u.s .
income tax returns on this same basis for years after 2012 .
based on the information currently available , we do not anticipate a significant increase or decrease to our unrecognized tax benefits for this matter within the next 12 months .

we currently believe the ultimate disposition of this matter will not have a material adverse effect on our consolidated financial position , liquidity or results of operations .
with the exception of a loss carryback to 2005 , tax years prior to 2007 are generally no longer subject to u.s .
tax assessment .
in our major non-u.s .

tax assessment .
in our major non-u.s .
jurisdictions including australia , brazil , china , germany , japan , mexico , switzerland , singapore and the u.k. , tax years are typically subject to examination for three to ten years .
due to the uncertainty related to the timing and potential outcome of audits , we cannot estimate the range of reasonably possible change in unrecognized tax benefits in the next 12 months.

 |
| table | ( millions of dollars )                                       | years ended december 31 , 2017 | years ended december 31 , 2016
------------------------------------------------------------- | ------------------------------ | ------------------------------
balance at january 1,                                         | $ 1032                         | $ 968
additions for tax positions related to current year           | 270                            | 73
additions for tax positions related to prior years            | 20                             | 55
reductions for tax positions related to prior years           | -27 ( 27 )                     | -36 ( 36 )
reductions for settlements2                                   | -9 ( 9 )                       | -24 ( 24 )
reductions for expiration of statute of limitations           | 2014                           | -4 ( 4 )
balance at december 31,                                       | $ 1286                         | $ 1032
amount that if recognized would impact the effective tax rate | $ 1209                         | $ 963 |


| _id | dd4ba90f8 |
| title |  |
| text | 2011 compared to 2010 is&gs 2019 net sales for 2011 decreased $ 540 million , or 5% ( 5 % ) , compared to 2010 .
the decrease primarily was attributable to lower volume of approximately $ 665 million due to the absence of the dris program that supported the 2010 u.s .
census and a decline in activities on the jtrs program .
this decrease partially was offset by increased net sales on numerous programs .
is&gs 2019 operating profit for 2011 increased $ 60 million , or 7% ( 7 % ) , compared to 2010 .

operating profit increased approximately $ 180 million due to volume and the retirement of risks in 2011 and the absence of reserves recognized in 2010 on numerous programs ( including among others , odin ( about $ 60 million ) and twic and automated flight service station programs ) .
the increases in operating profit partially were offset by the absence of the dris program and a decline in activities on the jtrs program of about $ 120 million .

adjustments not related to volume , including net profit rate adjustments described above , were approximately $ 130 million higher in 2011 compared to 2010 .
backlog backlog decreased in 2012 compared to 2011 primarily due to the substantial completion of various programs in 2011 ( primarily odin , u.k .
census , and jtrs ) .
the decrease in backlog during 2011 compared to 2010 mainly was due to declining activities on the jtrs program and several other smaller programs .

trends we expect is&gs 2019 net sales to decline in 2013 in the mid single digit percentage range as compared to 2012 primarily due to the continued downturn in federal information technology budgets .
operating profit is expected to decline in 2013 in the mid single digit percentage range consistent with the expected decline in net sales , resulting in margins that are comparable with 2012 results .

missiles and fire control our mfc business segment provides air and missile defense systems ; tactical missiles and air-to-ground precision strike weapon systems ; fire control systems ; mission operations support , readiness , engineering support , and integration services ; logistics and other technical services ; and manned and unmanned ground vehicles .

mfc 2019s major programs include pac-3 , thaad , multiple launch rocket system ( mlrs ) , hellfire , javelin , joint air-to-surface standoff missile ( jassm ) , apache fire control system ( apache ) , sniper ae , low altitude navigation and targeting infrared for night ( lantirn ae ) , and sof clss .
mfc 2019s operating results included the following ( in millions ) : .

2012 compared to 2011 mfc 2019s net sales for 2012 were comparable to 2011 .
net sales decreased approximately $ 130 million due to lower volume and risk retirements on various services programs , and about $ 60 million due to lower volume from fire control systems programs ( primarily sniper ae ; lantirn ae ; and apache ) .

the decreases largely were offset by higher net sales of approximately $ 95 million due to higher volume from tactical missile programs ( primarily javelin and hellfire ) and approximately $ 80 million for air and missile defense programs ( primarily pac-3 and thaad ) .
mfc 2019s operating profit for 2012 increased $ 187 million , or 17% ( 17 % ) , compared to 2011 .

the increase was attributable to higher risk retirements and volume of about $ 95 million from tactical missile programs ( primarily javelin and hellfire ) ; increased risk retirements and volume of approximately $ 60 million for air and missile defense programs ( primarily thaad and pac-3 ) ; and about $ 45 million from a resolution of contractual matters .
partially offsetting these increases was lower risk retirements and volume on various programs , including $ 25 million for services programs .

adjustments not related to volume , including net profit booking rate adjustments and other matters described above , were approximately $ 145 million higher for 2012 compared to 2011.

 |
| table | | 2012             | 2011             | 2010
------------------- | ---------------- | ---------------- | ----------------
net sales           | $ 7457           | $ 7463           | $ 6930
operating profit    | 1256             | 1069             | 973
operating margins   | 16.8% ( 16.8 % ) | 14.3% ( 14.3 % ) | 14.0% ( 14.0 % )
backlog at year-end | 14700            | 14400            | 12800 |


| _id | dd4c5f290 |
| title |  |
| text | united parcel service , inc .
and subsidiaries notes to consolidated financial statements 2014 ( continued ) ups class b common stock on the first or the last day of each quarterly period .
employees purchased 1.8 , 1.9 , and 2.0 million shares at average prices of $ 64.20 , $ 66.64 , and $ 64.54 per share during 2007 , 2006 , and 2005 , respectively .

compensation cost is measured for the fair value of employees 2019 purchase rights under our discounted employee stock purchase plan using the black-scholes option pricing model .
the weighted average assumptions used and the calculated weighted average fair value of employees 2019 purchase rights granted , are as follows: .

* includes the 10% ( 10 % ) discount from the market price .
expected volatilities are based on the historical price volatility on our publicly-traded class b shares .
the expected dividend yield is based on the recent historical dividend yields for our stock , taking into account changes in dividend policy .
the risk-free interest rate is based on the term structure of interest rates on u.s .
treasury securities at the time of the option grant .

the expected life represents the three month option period applicable to the purchase rights .
note 12 .
segment and geographic information we report our operations in three segments : u.s .
domestic package operations , international package operations , and supply chain & freight operations .
package operations represent our most significant business and are broken down into regional operations around the world .

regional operations managers are responsible for both domestic and export operations within their geographic area .
u.s .
domestic package domestic package operations include the time-definite delivery of letters , documents , and packages throughout the united states .

international package international package operations include delivery to more than 200 countries and territories worldwide , including shipments wholly outside the united states , as well as shipments with either origin or distribution outside the united states .
our international package reporting segment includes the operations of our europe , asia , and americas operating segments .

supply chain & freight supply chain & freight includes our forwarding and logistics operations , ups freight , and other aggregated business units .
our forwarding and logistics business provides services in more than 175 countries and territories worldwide , and includes supply chain design and management , freight distribution , customs brokerage , mail and consulting services .
ups freight offers a variety of ltl and tl services to customers in north america .

other aggregated business units within this segment include mail boxes , etc .
( the franchisor of mail boxes , etc .
and the ups store ) and ups capital.

 |
| table | | 2007               | 2006               | 2005
----------------------------------------------- | ------------------ | ------------------ | ------------------
expected dividend yield                         | 2.13% ( 2.13 % )   | 1.79% ( 1.79 % )   | 1.62% ( 1.62 % )
risk-free interest rate                         | 4.60% ( 4.60 % )   | 4.59% ( 4.59 % )   | 2.84% ( 2.84 % )
expected life in years                          | 0.25               | 0.25               | 0.25
expected volatility                             | 16.26% ( 16.26 % ) | 15.92% ( 15.92 % ) | 15.46% ( 15.46 % )
weighted average fair value of purchase rights* | $ 9.80             | $ 10.30            | $ 9.46 |


| _id | dd4c0d9f4 |
| title |  |
| text | contractual obligations the following table includes aggregated information about citigroup 2019s contractual obligations that impact its short- and long-term liquidity and capital needs .
the table includes information about payments due under specified contractual obligations , aggregated by type of contractual obligation .
it includes the maturity profile of the company 2019s consolidated long-term debt , operating leases and other long-term liabilities .

the company 2019s capital lease obligations are included in purchase obligations in the table .
citigroup 2019s contractual obligations include purchase obligations that are enforceable and legally binding for the company .
for the purposes of the table below , purchase obligations are included through the termination date of the respective agreements , even if the contract is renewable .

many of the purchase agreements for goods or services include clauses that would allow the company to cancel the agreement with specified notice ; however , that impact is not included in the table ( unless citigroup has already notified the counterparty of its intention to terminate the agreement ) .

other liabilities reflected on the company 2019s consolidated balance sheet include obligations for goods and services that have already been received , litigation settlements , uncertain tax positions , as well as other long-term liabilities that have been incurred and will ultimately be paid in cash .
excluded from the following table are obligations that are generally short term in nature , including deposit liabilities and securities sold under agreements to repurchase .

the table also excludes certain insurance and investment contracts subject to mortality and morbidity risks or without defined maturities , such that the timing of payments and withdrawals is uncertain .
the liabilities related to these insurance and investment contracts are included on the consolidated balance sheet as insurance policy and claims reserves , contractholder funds , and separate and variable accounts .

citigroup 2019s funding policy for pension plans is generally to fund to the minimum amounts required by the applicable laws and regulations .
at december 31 , 2008 , there were no minimum required contributions , and no contributions are currently planned for the u.s .
pension plans .
accordingly , no amounts have been included in the table below for future contributions to the u.s .
pension plans .
for the non-u.s .

pension plans .
for the non-u.s .
plans , discretionary contributions in 2009 are anticipated to be approximately $ 167 million and this amount has been included in purchase obligations in the table below .
the estimated pension plan contributions are subject to change , since contribution decisions are affected by various factors , such as market performance , regulatory and legal requirements , and management 2019s ability to change funding policy .

for additional information regarding the company 2019s retirement benefit obligations , see note 9 to the consolidated financial statements on page 144. .

( 1 ) for additional information about long-term debt and trust preferred securities , see note 20 to the consolidated financial statements on page 169 .
( 2 ) relates primarily to accounts payable and accrued expenses included in other liabilities in the company 2019s consolidated balance sheet .
also included are various litigation settlements.

 |
| table | in millions of dollars at year end                                                | contractual obligations by year 2009 | contractual obligations by year 2010 | contractual obligations by year 2011 | contractual obligations by year 2012 | contractual obligations by year 2013 | contractual obligations by year thereafter
--------------------------------------------------------------------------------- | ------------------------------------ | ------------------------------------ | ------------------------------------ | ------------------------------------ | ------------------------------------ | ------------------------------------------
long-term debt obligations ( 1 )                                                  | $ 88472                              | $ 41431                              | $ 42112                              | $ 27999                              | $ 25955                              | $ 133624
operating lease obligations                                                       | 1470                                 | 1328                                 | 1134                                 | 1010                                 | 922                                  | 3415
purchase obligations                                                              | 2214                                 | 750                                  | 700                                  | 444                                  | 395                                  | 1316
other liabilities reflected on the company 2019s consolidated balance sheet ( 2 ) | 38221                                | 792                                  | 35                                   | 36                                   | 38                                   | 3193
total                                                                             | $ 130377                             | $ 44301                              | $ 43981                              | $ 29489                              | $ 27310                              | $ 141548 |