| _id | dd4c0ce78 |
| title |  |
| text | net cash flows provided by operating activities of $ 704.4 million for 2016 increased $ 154.7 million from 2015 due primarily to ( 1 ) improved operating performance and ( 2 ) lower supplier payments in 2016 compared to 2015 , partially offset by ( 1 ) the impact of excess tax benefits from stock plans , primarily due to our increased stock price , and ( 2 ) an increase in accounts receivable due to increased sales , primarily in the united states .

net cash flows provided by operating activities of $ 549.7 million for 2015 decreased $ 472.6 million from 2014 due primarily to ( 1 ) the $ 750.0 million upfront payment received from medtronic under a litigation settlement agreement , and ( 2 ) a higher bonus payout in 2015 associated with 2014 performance .

these decreases were partially offset by ( 1 ) income tax payments of $ 224.5 million made in 2014 related to the medtronic settlement , ( 2 ) improved operating performance in 2015 , and ( 3 ) the $ 50.0 million charitable contribution made in 2014 to the edwards lifesciences foundation .
net cash used in investing activities of $ 211.7 million in 2016 consisted primarily of capital expenditures of $ 176.1 million and $ 41.3 million for the acquisition of intangible assets .

net cash used in investing activities of $ 316.1 million in 2015 consisted primarily of a $ 320.1 million net payment associated with the acquisition of cardiaq , and capital expenditures of $ 102.7 million , partially offset by net proceeds from investments of $ 119.6 million .
net cash used in investing activities of $ 633.0 million in 2014 consisted primarily of net purchases of investments of $ 527.4 million and capital expenditures of $ 82.9 million .

net cash used in financing activities of $ 268.5 million in 2016 consisted primarily of purchases of treasury stock of $ 662.3 million , partially offset by ( 1 ) net proceeds from the issuance of debt of $ 222.1 million , ( 2 ) proceeds from stock plans of $ 103.3 million , and ( 3 ) the excess tax benefit from stock plans of $ 64.3 million .

net cash used in financing activities of $ 158.6 million in 2015 consisted primarily of purchases of treasury stock of $ 280.1 million , partially offset by ( 1 ) proceeds from stock plans of $ 87.2 million , and ( 2 ) the excess tax benefit from stock plans of $ 41.3 million .

net cash used in financing activities of $ 153.0 million in 2014 consisted primarily of purchases of treasury stock of $ 300.9 million , partially offset by ( 1 ) proceeds from stock plans of $ 113.3 million , and ( 2 ) the excess tax benefit from stock plans of $ 49.4 million ( including the realization of previously unrealized excess tax benefits ) .
a summary of all of our contractual obligations and commercial commitments as of december 31 , 2016 were as follows ( in millions ) : .

( a ) the amount included in 2018 2018less than 1 year 2019 2019 reflects anticipated contributions to our various pension plans .
anticipated contributions beyond one year are not determinable .
the total accrued benefit liability for our pension plans recognized as of december 31 , 2016 was $ 50.1 million .
this amount is impacted

 |
| table | contractual obligations                        | payments due by period total | payments due by period less than1 year | payments due by period 1-3years | payments due by period 4-5years | payments due by period after 5years
---------------------------------------------- | ---------------------------- | -------------------------------------- | ------------------------------- | ------------------------------- | -----------------------------------
debt                                           | $ 825.0                      | $ 2014                                 | $ 825.0                         | $ 2014                          | $ 2014
operating leases                               | 72.6                         | 22.3                                   | 24.9                            | 8.8                             | 16.6
interest on debt                               | 30.8                         | 16.4                                   | 14.4                            | 2014                            | 2014
pension obligations ( a )                      | 6.1                          | 6.1                                    | 2014                            | 2014                            | 2014
capital commitment obligations ( b )           | 0.6                          | 0.3                                    | 0.3                             | 2014                            | 2014
purchase and other commitments                 | 16.4                         | 13.7                                   | 2.7                             | 2014                            | 2014
total contractual cash obligations ( c ) ( d ) | $ 951.5                      | $ 58.8                                 | $ 867.3                         | $ 8.8                           | $ 16.6 |


| _id | dd4c1f136 |
| title |  |
| text | indemnification and repurchase claims are typically settled on an individual loan basis through make-whole payments or loan repurchases ; however , on occasion we may negotiate pooled settlements with investors .
in connection with pooled settlements , we typically do not repurchase loans and the consummation of such transactions generally results in us no longer having indemnification and repurchase exposure with the investor in the transaction .

for the first and second-lien mortgage balances of unresolved and settled claims contained in the tables below , a significant amount of these claims were associated with sold loans originated through correspondent lender and broker origination channels .

in certain instances when indemnification or repurchase claims are settled for these types of sold loans , we have recourse back to the correspondent lenders , brokers and other third-parties ( e.g. , contract underwriting companies , closing agents , appraisers , etc. ) .
depending on the underlying reason for the investor claim , we determine our ability to pursue recourse with these parties and file claims with them accordingly .

our historical recourse recovery rate has been insignificant as our efforts have been impacted by the inability of such parties to reimburse us for their recourse obligations ( e.g. , their capital availability or whether they remain in business ) or factors that limit our ability to pursue recourse from these parties ( e.g. , contractual loss caps , statutes of limitations ) .

origination and sale of residential mortgages is an ongoing business activity , and , accordingly , management continually assesses the need to recognize indemnification and repurchase liabilities pursuant to the associated investor sale agreements .
we establish indemnification and repurchase liabilities for estimated losses on sold first and second-lien mortgages for which indemnification is expected to be provided or for loans that are expected to be repurchased .

for the first and second- lien mortgage sold portfolio , we have established an indemnification and repurchase liability pursuant to investor sale agreements based on claims made , demand patterns observed to date and/or expected in the future , and our estimate of future claims on a loan by loan basis .

to estimate the mortgage repurchase liability arising from breaches of representations and warranties , we consider the following factors : ( i ) borrower performance in our historically sold portfolio ( both actual and estimated future defaults ) , ( ii ) the level of outstanding unresolved repurchase claims , ( iii ) estimated probable future repurchase claims , considering information about file requests , delinquent and liquidated loans , resolved and unresolved mortgage insurance rescission notices

unresolved mortgage insurance rescission notices and our historical experience with claim rescissions , ( iv ) the potential ability to cure the defects identified in the repurchase claims ( 201crescission rate 201d ) , and ( v ) the estimated severity of loss upon repurchase of the loan or collateral , make-whole settlement , or indemnification .

see note 24 commitments and guarantees in the notes to consolidated financial statements in item 8 of this report for additional information .
the following tables present the unpaid principal balance of repurchase claims by vintage and total unresolved repurchase claims for the past five quarters .
table 28 : analysis of quarterly residential mortgage repurchase claims by vintage dollars in millions december 31 september 30 june 30 march 31 december 31 .

the pnc financial services group , inc .
2013 form 10-k 79

 |
| table | dollars in millions          | december 31 2012 | september 30 2012 | june 30 2012 | march 31 2012 | december 312011
---------------------------- | ---------------- | ----------------- | ------------ | ------------- | ---------------
2004 & prior                 | $ 11             | $ 15              | $ 31         | $ 10          | $ 11
2005                         | 8                | 10                | 19           | 12            | 13
2006                         | 23               | 30                | 56           | 41            | 28
2007                         | 45               | 137               | 182          | 100           | 90
2008                         | 7                | 23                | 49           | 17            | 18
2008 & prior                 | 94               | 215               | 337          | 180           | 160
2009 2013 2012               | 38               | 52                | 42           | 33            | 29
total                        | $ 132            | $ 267             | $ 379        | $ 213         | $ 189
fnma fhlmc and gnma % (  % ) | 94% ( 94 % )     | 87% ( 87 % )      | 86% ( 86 % ) | 88% ( 88 % )  | 91% ( 91 % ) |


| _id | dd4bd4a32 |
| title |  |
| text | mastercard incorporated notes to consolidated financial statements 2014continued the municipal bond portfolio is comprised of tax exempt bonds and is diversified across states and sectors .
the portfolio has an average credit quality of double-a .
the short-term bond funds invest in fixed income securities , including corporate bonds , mortgage-backed securities and asset-backed securities .
the company holds investments in ars .
interest on these securities is exempt from u.s .

interest on these securities is exempt from u.s .
federal income tax and the interest rate on the securities typically resets every 35 days .
the securities are fully collateralized by student loans with guarantees , ranging from approximately 95% ( 95 % ) to 98% ( 98 % ) of principal and interest , by the u.s .
government via the department of education .
beginning on february 11 , 2008 , the auction mechanism that normally provided liquidity to the ars investments began to fail .

since mid-february 2008 , all investment positions in the company 2019s ars investment portfolio have experienced failed auctions .
the securities for which auctions have failed have continued to pay interest in accordance with the contractual terms of such instruments and will continue to accrue interest and be auctioned at each respective reset date until the auction succeeds , the issuer redeems the securities or they mature .
during 2008 , ars were reclassified as level 3 from level 2 .

as of december 31 , 2010 , the ars market remained illiquid , but issuer call and redemption activity in the ars student loan sector has occurred periodically since the auctions began to fail .
during 2010 and 2009 , the company did not sell any ars in the auction market , but there were calls at par .
the table below includes a roll-forward of the company 2019s ars investments from january 1 , 2009 to december 31 , 2010 .
significant unobservable inputs ( level 3 ) ( in millions ) .

the company evaluated the estimated impairment of its ars portfolio to determine if it was other-than- temporary .

the company considered several factors including , but not limited to , the following : ( 1 ) the reasons for the decline in value ( changes in interest rates , credit event , or market fluctuations ) ; ( 2 ) assessments as to whether it is more likely than not that it will hold and not be required to sell the investments for a sufficient period of time to allow for recovery of the cost basis ; ( 3 ) whether the decline is substantial ; and ( 4 ) the historical and anticipated duration of the events

historical and anticipated duration of the events causing the decline in value .

the evaluation for other-than-temporary impairments is a quantitative and qualitative process , which is subject to various risks and uncertainties .
the risks and uncertainties include changes in credit quality , market liquidity , timing and amounts of issuer calls and interest rates .
as of december 31 , 2010 , the company believed that the unrealized losses on the ars were not related to credit quality but rather due to the lack of liquidity in the market .
the company believes that it is more

 |
| table | | significant unobservable inputs ( level 3 ) ( in millions )
------------------------------------------------- | -----------------------------------------------------------
fair value december 31 2008                       | $ 192
calls at par                                      | -28 ( 28 )
recovery of unrealized losses due to issuer calls | 5
increase in fair value                            | 11
fair value december 31 2009                       | 180
calls at par                                      | -94 ( 94 )
recovery of unrealized losses due to issuer calls | 13
increase in fair value                            | 7
fair value december 31 2010                       | $ 106 |


| _id | dd4bd84e8 |
| title |  |
| text | notes to consolidated financial statements minority partner approves the annual budget , receives a detailed monthly reporting package from us , meets with us on a quarterly basis to review the results of the joint venture , reviews and approves the joint venture 2019s tax return before filing , and approves all leases that cover more than a nominal amount of space relative to the total rentable space at each property we do not consolidate the joint venture as we consider these to be substantive

venture as we consider these to be substantive participation rights .

our joint venture agreements also contain certain pro- tective rights such as the requirement of partner approval to sell , finance or refinance the property and the payment of capital expenditures and operating expenditures outside of the approved budget or operating plan .

the table below provides general information on each joint venture as of december 31 , 2009 ( in thousands ) : property partner ownership interest economic interest square feet acquired acquisition price ( 1 ) 1221 avenue of the americas ( 2 ) rgii 45.00% ( 45.00 % ) 45.00% ( 45.00 % ) 2550 12/03 $ 1000000 1515 broadway ( 3 ) sitq 55.00% ( 55.00 % ) 68.45% ( 68.45 % ) 1750 05/02 $ 483500 .

the meadows ( 10 ) onyx 50.00% ( 50.00 % ) 50.00% ( 50.00 % ) 582 09/07 $ 111500 388 and 390 greenwich street ( 11 ) sitq 50.60% ( 50.60 % ) 50.60% ( 50.60 % ) 2600 12/07 $ 1575000 27 201329 west 34th street ( 12 ) sutton 50.00% ( 50.00 % ) 50.00% ( 50.00 % ) 41 01/06 $ 30000 1551 20131555 broadway ( 13 ) sutton 10.00% ( 10.00 % ) 10.00% ( 10.00 % ) 26 07/05 $ 80100 717 fifth avenue ( 14 ) sutton/nakash 32.75% ( 32.75 % ) 32.75% ( 32.75 % ) 120 09/06 $ 251900 ( 1 ) acquisition price represents the actual

( 1 ) acquisition price represents the actual or implied purchase price for the joint venture .

( 2 ) we acquired our interest from the mcgraw-hill companies , or mhc .
mhc is a tenant at the property and accounted for approximately 14.7% ( 14.7 % ) of the property 2019s annualized rent at december 31 , 2009 .
we do not manage this joint venture .

we do not manage this joint venture .
( 3 ) under a tax protection agreement established to protect the limited partners of the partnership that transferred 1515 broadway to the joint venture , the joint venture has agreed not to adversely affect the limited partners 2019 tax positions before december 2011 .
one tenant , whose leases primarily ends in 2015 , represents approximately 77.4% ( 77.4 % ) of this joint venture 2019s annualized rent at december 31 , 2009 .

( 4 ) effective november 2006 , we deconsolidated this investment .
as a result of the recapitalization of the property , we were no longer the primary beneficiary .
both partners had the same amount of equity at risk and neither partner controlled the joint venture .
( 5 ) we invested approximately $ 109.5 million in this asset through the origination of a loan secured by up to 47% ( 47 % ) of the interests in the property 2019s ownership , with an option to convert the loan to an equity interest .

certain existing members have the right to re-acquire approximately 4% ( 4 % ) of the property 2019s equity .
these interests were re-acquired in december 2008 and reduced our interest to 42.95% ( 42.95 % ) ( 6 ) effective april 2007 , we deconsolidated this investment .
as a result of the recapitalization of the property , we were no longer the primary beneficiary .
both partners had the same amount of equity at risk and neither partner controlled the joint venture .

( 7 ) we have the ability to syndicate our interest down to 14.79% ( 14.79 % ) .
( 8 ) we , along with gramercy , together as tenants-in-common , acquired a fee interest in 2 herald square .
the fee interest is subject to a long-term operating lease .
( 9 ) we , along with gramercy , together as tenants-in-common , acquired a fee and leasehold interest in 885 third avenue .
the fee and leasehold interests are subject to a long-term operating lease .

( 10 ) we , along with onyx acquired the remaining 50% ( 50 % ) interest on a pro-rata basis in september 2009 .
( 11 ) the property is subject to a 13-year triple-net lease arrangement with a single tenant .
( 12 ) effective may 2008 , we deconsolidated this investment .
as a result of the recapitalization of the property , we were no longer the primary beneficiary .
both partners had the same amount of equity at risk and neither partner controlled the joint venture .

( 13 ) effective august 2008 , we deconsolidated this investment .
as a result of the sale of 80% ( 80 % ) of our interest , the joint venture was no longer a vie .
( 14 ) effective september 2008 , we deconsolidated this investment .
as a result of the recapitalization of the property , we were no longer the primary beneficiary.

 |
| table | property                            | partner                    | ownership interest | economic interest  | square feet | acquired | acquisition price ( 1 )
----------------------------------- | -------------------------- | ------------------ | ------------------ | ----------- | -------- | -----------------------
1221 avenue of the americas ( 2 )   | rgii                       | 45.00% ( 45.00 % ) | 45.00% ( 45.00 % ) | 2550        | 12/03    | $ 1000000
1515 broadway ( 3 )                 | sitq                       | 55.00% ( 55.00 % ) | 68.45% ( 68.45 % ) | 1750        | 05/02    | $ 483500
100 park avenue                     | prudential                 | 49.90% ( 49.90 % ) | 49.90% ( 49.90 % ) | 834         | 02/00    | $ 95800
379 west broadway                   | sutton                     | 45.00% ( 45.00 % ) | 45.00% ( 45.00 % ) | 62          | 12/05    | $ 19750
21 west 34thstreet ( 4 )            | sutton                     | 50.00% ( 50.00 % ) | 50.00% ( 50.00 % ) | 30          | 07/05    | $ 22400
800 third avenue ( 5 )              | private investors          | 42.95% ( 42.95 % ) | 42.95% ( 42.95 % ) | 526         | 12/06    | $ 285000
521 fifth avenue                    | cif                        | 50.10% ( 50.10 % ) | 50.10% ( 50.10 % ) | 460         | 12/06    | $ 240000
one court square                    | jp morgan                  | 30.00% ( 30.00 % ) | 30.00% ( 30.00 % ) | 1402        | 01/07    | $ 533500
1604-1610 broadway ( 6 )            | onyx/sutton                | 45.00% ( 45.00 % ) | 63.00% ( 63.00 % ) | 30          | 11/05    | $ 4400
1745 broadway ( 7 )                 | witkoff/sitq/lehman bros . | 32.26% ( 32.26 % ) | 32.26% ( 32.26 % ) | 674         | 04/07    | $ 520000
1 and 2 jericho plaza               | onyx/credit suisse         | 20.26% ( 20.26 % ) | 20.26% ( 20.26 % ) | 640         | 04/07    | $ 210000
2 herald square ( 8 )               | gramercy                   | 55.00% ( 55.00 % ) | 55.00% ( 55.00 % ) | 354         | 04/07    | $ 225000
885 third avenue ( 9 )              | gramercy                   | 55.00% ( 55.00 % ) | 55.00% ( 55.00 % ) | 607         | 07/07    | $ 317000
16 court street                     | cif                        | 35.00% ( 35.00 % ) | 35.00% ( 35.00 % ) | 318         | 07/07    | $ 107500
the meadows ( 10 )                  | onyx                       | 50.00% ( 50.00 % ) | 50.00% ( 50.00 % ) | 582         | 09/07    | $ 111500
388 and 390 greenwich street ( 11 ) | sitq                       | 50.60% ( 50.60 % ) | 50.60% ( 50.60 % ) | 2600        | 12/07    | $ 1575000
27-29 west 34thstreet ( 12 )        | sutton                     | 50.00% ( 50.00 % ) | 50.00% ( 50.00 % ) | 41          | 01/06    | $ 30000
1551-1555 broadway ( 13 )           | sutton                     | 10.00% ( 10.00 % ) | 10.00% ( 10.00 % ) | 26          | 07/05    | $ 80100
717 fifth avenue ( 14 )             | sutton/nakash              | 32.75% ( 32.75 % ) | 32.75% ( 32.75 % ) | 120         | 09/06    | $ 251900 |


| _id | dd4bb42d2 |
| title |  |
| text | notes to consolidated financial statements the firm permanently reinvests eligible earnings of certain foreign subsidiaries and , accordingly , does not accrue any u.s .
income taxes that would arise if such earnings were repatriated .
as of december 2012 and december 2011 , this policy resulted in an unrecognized net deferred tax liability of $ 3.75 billion and $ 3.32 billion , respectively , attributable to reinvested earnings of $ 21.69 billion and $ 20.63 billion , respectively .

unrecognized tax benefits the firm recognizes tax positions in the financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position .
a position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement .

a liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements .
as of december 2012 and december 2011 , the accrued liability for interest expense related to income tax matters and income tax penalties was $ 374 million and $ 233 million , respectively .

the firm recognized $ 95 million , $ 21 million and $ 28 million of interest and income tax penalties for the years ended december 2012 , december 2011 and december 2010 , respectively .
it is reasonably possible that unrecognized tax benefits could change significantly during the twelve months subsequent to december 2012 due to potential audit settlements , however , at this time it is not possible to estimate any potential change .

the table below presents the changes in the liability for unrecognized tax benefits .
this liability is included in 201cother liabilities and accrued expenses . 201d see note 17 for further information. .

related deferred income tax asset 1 685 569 972 net unrecognized tax benefit 2 $ 1552 $ 1318 $ 1109 1 .
included in 201cother assets . 201d see note 12 .
2 .
if recognized , the net tax benefit would reduce the firm 2019s effective income tax rate .
194 goldman sachs 2012 annual report

 |
| table | in millions                                                  | as of december 2012 | as of december 2011 | as of december 2010
------------------------------------------------------------ | ------------------- | ------------------- | -------------------
balance beginning of year                                    | $ 1887              | $ 2081              | $ 1925
increases based on tax positions related to the current year | 190                 | 171                 | 171
increases based on tax positions related to prior years      | 336                 | 278                 | 162
decreases related to tax positions of prior years            | -109 ( 109 )        | -41 ( 41 )          | -104 ( 104 )
decreases related to settlements                             | -35 ( 35 )          | -638 ( 638 )        | -128 ( 128 )
acquisitions/ ( dispositions )                               | -47 ( 47 )          | 47                  | 56
exchange rate fluctuations                                   | 15                  | -11 ( 11 )          | -1 ( 1 )
balance end of year                                          | $ 2237              | $ 1887              | $ 2081
related deferred income tax asset1                           | 685                 | 569                 | 972
net unrecognized tax benefit2                                | $ 1552              | $ 1318              | $ 1109 |


| _id | dd497f354 |
| title |  |
| text | 62 general mills amounts recorded in accumulated other comprehensive loss unrealized losses from interest rate cash flow hedges recorded in aoci as of may 27 , 2012 , totaled $ 73.6 million after tax .
these deferred losses are primarily related to interest rate swaps that we entered into in contemplation of future borrowings and other financ- ing requirements and that are being reclassified into net interest over the lives of the hedged forecasted transac- tions .

unrealized losses from foreign currency cash flow hedges recorded in aoci as of may 27 , 2012 , were $ 1.7 million after-tax .
the net amount of pre-tax gains and losses in aoci as of may 27 , 2012 , that we expect to be reclassified into net earnings within the next 12 months is $ 14.0 million of expense .

credit-risk-related contingent features certain of our derivative instruments contain provisions that require us to maintain an investment grade credit rating on our debt from each of the major credit rat- ing agencies .
if our debt were to fall below investment grade , the counterparties to the derivative instruments could request full collateralization on derivative instru- ments in net liability positions .

the aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position on may 27 , 2012 , was $ 19.9 million .
we have posted col- lateral of $ 4.3 million in the normal course of business associated with these contracts .
if the credit-risk-related contingent features underlying these agreements had been triggered on may 27 , 2012 , we would have been required to post an additional $ 15.6 million of collateral to counterparties .

concentrations of credit and counterparty credit risk during fiscal 2012 , wal-mart stores , inc .
and its affili- ates ( wal-mart ) accounted for 22 percent of our con- solidated net sales and 30 percent of our net sales in the u.s .
retail segment .
no other customer accounted for 10 percent or more of our consolidated net sales .
wal- mart also represented 6 percent of our net sales in the international segment and 7 percent of our net sales in the bakeries and foodservice segment .

as of may 27 , 2012 , wal-mart accounted for 26 percent of our u.s .
retail receivables , 5 percent of our international receiv- ables , and 9 percent of our bakeries and foodservice receivables .
the five largest customers in our u.s .

the five largest customers in our u.s .
retail segment accounted for 54 percent of its fiscal 2012 net sales , the five largest customers in our international segment accounted for 26 percent of its fiscal 2012 net sales , and the five largest customers in our bakeries and foodservice segment accounted for 46 percent of its fis- cal 2012 net sales .

we enter into interest rate , foreign exchange , and cer- tain commodity and equity derivatives , primarily with a diversified group of highly rated counterparties .
we continually monitor our positions and the credit rat- ings of the counterparties involved and , by policy , limit the amount of credit exposure to any one party .
these transactions may expose us to potential losses due to the risk of nonperformance by these counterparties ; however , we have not incurred a material loss .

we also enter into commodity futures transactions through vari- ous regulated exchanges .
the amount of loss due to the credit risk of the coun- terparties , should the counterparties fail to perform according to the terms of the contracts , is $ 19.5 million against which we do not hold collateral .
under the terms of master swap agreements , some of our transactions require collateral or other security to support financial instruments subject to threshold levels of exposure and counterparty credit risk .

collateral assets are either cash or u.s .
treasury instruments and are held in a trust account that we may access if the counterparty defaults .
note 8 .
debt notes payable the components of notes payable and their respective weighted-average interest rates at the end of the periods were as follows: .

to ensure availability of funds , we maintain bank credit lines sufficient to cover our outstanding short- term borrowings .
commercial paper is a continuing source of short-term financing .
we have commercial paper programs available to us in the united states and europe .
in april 2012 , we entered into fee-paid commit- ted credit lines , consisting of a $ 1.0 billion facility sched- uled to expire in april 2015 and a $ 1.7 billion facility

 |
| table | in millions            | may 27 2012 notes payable | may 27 2012 weighted- average interest rate | may 27 2012 notespayable | weighted-averageinterest rate
---------------------- | ------------------------- | ------------------------------------------- | ------------------------ | -----------------------------
u.s . commercial paper | $ 412.0                   | 0.2% ( 0.2 % )                              | $ 192.5                  | 0.2% ( 0.2 % )
financial institutions | 114.5                     | 10.0                                        | 118.8                    | 11.5
total                  | $ 526.5                   | 2.4% ( 2.4 % )                              | $ 311.3                  | 4.5% ( 4.5 % ) |


| _id | dd4b9045e |
| title |  |
| text | 18 .
allowance for credit losses .

( 1 ) reclassified to conform to the current period 2019s presentation .
( 2 ) 2009 primarily includes reductions to the loan loss reserve of approximately $ 543 million related to securitizations , approximately $ 402 million related to the sale or transfers to held-for-sale of u.s .
real estate lending loans , and $ 562 million related to the transfer of the u.k .
cards portfolio to held-for-sale .

cards portfolio to held-for-sale .
2008 primarily includes reductions to the loan loss reserve of approximately $ 800 million related to fx translation , $ 102 million related to securitizations , $ 244 million for the sale of the german retail banking operation , $ 156 million for the sale of citicapital , partially offset by additions of $ 106 million related to the cuscatl e1n and bank of overseas chinese acquisitions .

2007 primarily includes reductions to the loan loss reserve of $ 475 million related to securitizations and transfers to loans held-for-sale , and reductions of $ 83 million related to the transfer of the u.k .
citifinancial portfolio to held-for-sale , offset by additions of $ 610 million related to the acquisitions of egg , nikko cordial , grupo cuscatl e1n and grupo financiero uno .

( 3 ) represents additional credit loss reserves for unfunded corporate lending commitments and letters of credit recorded in other liabilities on the consolidated balance sheet.

 |
| table | in millions of dollars                                                                 | 2009               | 2008 ( 1 )         | 2007 ( 1 )
-------------------------------------------------------------------------------------- | ------------------ | ------------------ | ----------------
allowance for loan losses at beginning of year                                         | $ 29616            | $ 16117            | $ 8940
gross credit losses                                                                    | -32784 ( 32784 )   | -20760 ( 20760 )   | -11864 ( 11864 )
gross recoveries                                                                       | 2043               | 1749               | 1938
net credit ( losses ) recoveries ( ncls )                                              | $ -30741 ( 30741 ) | $ -19011 ( 19011 ) | $ -9926 ( 9926 )
ncls                                                                                | $ 30741            | $ 19011            | $ 9926
net reserve builds ( releases )                                                        | 5741               | 11297              | 6550
net specific reserve builds ( releases )                                               | 2278               | 3366               | 356
total provision for credit losses                                                      | $ 38760            | $ 33674            | $ 16832
other net ( 2 )                                                                        | -1602 ( 1602 )     | -1164 ( 1164 )     | 271
allowance for loan losses at end of year                                               | $ 36033            | $ 29616            | $ 16117
allowance for credit losses on unfunded lending commitments at beginning of year ( 3 ) | $ 887              | $ 1250             | $ 1100
provision for unfunded lending commitments                                             | 244                | -363 ( 363 )       | 150
allowance for credit losses on unfunded lending commitments at end of year ( 3 )       | $ 1157             | $ 887              | $ 1250
total allowance for loans leases and unfunded lending commitments                      | $ 37190            | $ 30503            | $ 17367 |


| _id | dd4bb14b0 |
| title |  |
| text | 2022 asset utilization 2013 in response to economic conditions and lower revenue in 2009 , we implemented productivity initiatives to improve efficiency and reduce costs , in addition to adjusting our resources to reflect lower demand .
although varying throughout the year , our resource reductions included removing from service approximately 26% ( 26 % ) of our road locomotives and 18% ( 18 % ) of our freight car inventory by year end .

we also reduced shift levels at most rail facilities and closed or significantly reduced operations in 30 of our 114 principal rail yards .
these demand-driven resource adjustments and our productivity initiatives combined to reduce our workforce by 10% ( 10 % ) .
2022 fuel prices 2013 as the economy worsened during the third and fourth quarters of 2008 , fuel prices dropped dramatically , reaching $ 33.87 per barrel in december 2008 , a near five-year low .

throughout 2009 , crude oil prices generally increased , ending the year around $ 80 per barrel .
overall , our average fuel price decreased by 44% ( 44 % ) in 2009 , reducing operating expenses by $ 1.3 billion compared to 2008 .
we also reduced our consumption rate by 4% ( 4 % ) during the year , saving approximately 40 million gallons of fuel .

the use of newer , more fuel efficient locomotives ; increased use of distributed locomotive power ; fuel conservation programs ; and improved network operations and asset utilization all contributed to this improvement .
2022 free cash flow 2013 cash generated by operating activities totaled $ 3.2 billion , yielding free cash flow of $ 515 million in 2009 .
free cash flow is defined as cash provided by operating activities , less cash used in investing activities and dividends paid .

free cash flow is not considered a financial measure under accounting principles generally accepted in the united states ( gaap ) by sec regulation g and item 10 of sec regulation s-k .
we believe free cash flow is important in evaluating our financial performance and measures our ability to generate cash without additional external financings .
free cash flow should be considered in addition to , rather than as a substitute for , cash provided by operating activities .

the following table reconciles cash provided by operating activities ( gaap measure ) to free cash flow ( non-gaap measure ) : millions of dollars 2009 2008 2007 .

2010 outlook 2022 safety 2013 operating a safe railroad benefits our employees , our customers , our shareholders , and the public .
we will continue using a multi-faceted approach to safety , utilizing technology , risk assessment , quality control , and training , and by engaging our employees .
we will continue implementing total safety culture ( tsc ) throughout our operations .
tsc is designed to establish , maintain , reinforce , and promote safe practices among co-workers .

this process allows us to identify and implement best practices for employee and operational safety .
reducing grade-crossing incidents is a critical aspect of our safety programs , and we will continue our efforts to maintain , upgrade , and close crossings ; install video cameras on locomotives ; and educate the public about crossing safety through our own programs , various industry programs , and other activities .

2022 transportation plan 2013 to build upon our success in recent years , we will continue evaluating traffic flows and network logistic patterns , which can be quite dynamic from year-to-year , to identify additional opportunities to simplify operations , remove network variability and improve network efficiency and asset utilization .
we plan to adjust manpower and our locomotive and rail car fleets to

 |
| table | millions of dollars                   | 2009           | 2008           | 2007
------------------------------------- | -------------- | -------------- | --------------
cash provided by operating activities | $ 3234         | $ 4070         | $ 3277
cash used in investing activities     | -2175 ( 2175 ) | -2764 ( 2764 ) | -2426 ( 2426 )
dividends paid                        | -544 ( 544 )   | -481 ( 481 )   | -364 ( 364 )
free cash flow                        | $ 515          | $ 825          | $ 487 |


| _id | dd4c4249c |
| title |  |
| text | american tower corporation and subsidiaries notes to consolidated financial statements when they are determined uncollectible .
such determination includes analysis and consideration of the particular conditions of the account .
changes in the allowances were as follows for the years ended december 31 , ( in thousands ) : .

functional currency 2014as a result of changes to the organizational structure of the company 2019s subsidiaries in latin america in 2010 , the company determined that effective january 1 , 2010 , the functional currency of its foreign subsidiary in brazil is the brazilian real .
from that point forward , all assets and liabilities held by the subsidiary in brazil are translated into u.s .
dollars at the exchange rate in effect at the end of the applicable reporting period .

revenues and expenses are translated at the average monthly exchange rates and the cumulative translation effect is included in equity .
the change in functional currency from u.s .
dollars to brazilian real gave rise to an increase in the net value of certain non-monetary assets and liabilities .
the aggregate impact on such assets and liabilities was $ 39.8 million with an offsetting increase in accumulated other comprehensive income during the year ended december 31 , 2010 .

as a result of the renegotiation of the company 2019s agreements with grupo iusacell , s.a .
de c.v .
( 201ciusacell 201d ) , which included , among other changes , converting iusacell 2019s contractual obligations to the company from u.s .
dollars to mexican pesos , the company determined that effective april 1 , 2010 , the functional currency of certain of its foreign subsidiaries in mexico is the mexican peso .

from that point forward , all assets and liabilities held by those subsidiaries in mexico are translated into u.s .
dollars at the exchange rate in effect at the end of the applicable reporting period .
revenues and expenses are translated at the average monthly exchange rates and the cumulative translation effect is included in equity .
the change in functional currency from u.s .
dollars to mexican pesos gave rise to a decrease in the net value of certain non-monetary assets and liabilities .

the aggregate impact on such assets and liabilities was $ 33.6 million with an offsetting decrease in accumulated other comprehensive income .
the functional currency of the company 2019s other foreign operating subsidiaries is also the respective local currency .
all assets and liabilities held by the subsidiaries are translated into u.s .
dollars at the exchange rate in effect at the end of the applicable fiscal reporting period .

revenues and expenses are translated at the average monthly exchange rates .
the cumulative translation effect is included in equity as a component of accumulated other comprehensive income .
foreign currency transaction gains and losses are recognized in the consolidated statements of operations and are the result of transactions of a subsidiary being denominated in a currency other than its functional currency .

cash and cash equivalents 2014cash and cash equivalents include cash on hand , demand deposits and short-term investments , including money market funds , with remaining maturities of three months or less when acquired , whose cost approximates fair value .

restricted cash 2014the company classifies as restricted cash all cash pledged as collateral to secure obligations and all cash whose use is otherwise limited by contractual provisions , including cash on deposit in reserve accounts relating to the commercial mortgage pass-through certificates , series 2007-1 issued in the company 2019s securitization transaction and the secured cellular site revenue notes , series 2010-1 class c , series 2010-2 class c and series 2010-2 class f , assumed by the company as

series 2010-2 class f , assumed by the company as a result of the acquisition of certain legal entities from unison holdings , llc and unison site management ii , l.l.c .

( collectively , 201cunison 201d ) .

 |
| table | | 2012             | 2011             | 2010
-------------------------------------- | ---------------- | ---------------- | ----------------
balance as of january 1                | $ 24412          | $ 22505          | $ 28520
current year increases                 | 8028             | 17008            | 16219
write-offs net of recoveries and other | -12034 ( 12034 ) | -15101 ( 15101 ) | -22234 ( 22234 )
balance as of december 31              | $ 20406          | $ 24412          | $ 22505 |


| _id | dd496d7c6 |
| title |  |
| text | credit facility , which was amended in 2013 and 2012 .
in march 2014 , the company 2019s credit facility was further amended to extend the maturity date to march 2019 .
the amount of the aggregate commitment is $ 3.990 billion ( the 201c2014 credit facility 201d ) .

the 2014 credit facility permits the company to request up to an additional $ 1.0 billion of borrowing capacity , subject to lender credit approval , increasing the overall size of the 2014 credit facility to an aggregate principal amount not to exceed $ 4.990 billion .
interest on borrowings outstanding accrues at a rate based on the applicable london interbank offered rate plus a spread .

the 2014 credit facility requires the company not to exceed a maximum leverage ratio ( ratio of net debt to earnings before interest , taxes , depreciation and amortization , where net debt equals total debt less unrestricted cash ) of 3 to 1 , which was satisfied with a ratio of less than 1 to 1 at december 31 , 2014 .
the 2014 credit facility provides back-up liquidity , funds ongoing working capital for general corporate purposes and funds various investment opportunities .

at december 31 , 2014 , the company had no amount outstanding under the 2014 credit facility .
commercial paper program .
on october 14 , 2009 , blackrock established a commercial paper program ( the 201ccp program 201d ) under which the company could issue unsecured commercial paper notes ( the 201ccp notes 201d ) on a private placement basis up to a maximum aggregate amount outstanding at any time of $ 3.0 billion .

blackrock increased the maximum aggregate amount that could be borrowed under the cp program to $ 3.5 billion in 2011 and to $ 3.785 billion in 2012 .
in april 2013 , blackrock increased the maximum aggregate amount for which the company could issue unsecured cp notes on a private-placement basis up to a maximum aggregate amount outstanding at any time of $ 3.990 billion .
the cp program is currently supported by the 2014 credit facility .
at december 31 , 2014 , blackrock had no cp notes outstanding .

long-term borrowings the carrying value and fair value of long-term borrowings estimated using market prices at december 31 , 2014 included the following : ( in millions ) maturity amount unamortized discount carrying value fair value .

long-term borrowings at december 31 , 2013 had a carrying value of $ 4.939 billion and a fair value of $ 5.284 billion determined using market prices at the end of december 2013 .
2024 notes .
in march 2014 , the company issued $ 1.0 billion in aggregate principal amount of 3.50% ( 3.50 % ) senior unsecured and unsubordinated notes maturing on march 18 , 2024 ( the 201c2024 notes 201d ) .

the net proceeds of the 2024 notes were used to refinance certain indebtedness which matured in the fourth quarter of 2014 .
interest is payable semi-annually in arrears on march 18 and september 18 of each year , or approximately $ 35 million per year .
the 2024 notes may be redeemed prior to maturity at any time in whole or in part at the option of the company at a 201cmake-whole 201d redemption price .

the 2024 notes were issued at a discount of $ 3 million that is being amortized over the term of the notes .
the company incurred approximately $ 6 million of debt issuance costs , which are being amortized over the term of the 2024 notes .
at december 31 , 2014 , $ 6 million of unamortized debt issuance costs was included in other assets on the consolidated statement of financial condition .
2015 and 2022 notes .

2015 and 2022 notes .
in may 2012 , the company issued $ 1.5 billion in aggregate principal amount of unsecured unsubordinated obligations .
these notes were issued as two separate series of senior debt securities , including $ 750 million of 1.375% ( 1.375 % ) notes maturing in june 2015 ( the 201c2015 notes 201d ) and $ 750 million of 3.375% ( 3.375 % ) notes maturing in june 2022 ( the 201c2022 notes 201d ) .

net proceeds were used to fund the repurchase of blackrock 2019s common stock and series b preferred from barclays and affiliates and for general corporate purposes .
interest on the 2015 notes and the 2022 notes of approximately $ 10 million and $ 25 million per year , respectively , is payable semi-annually on june 1 and december 1 of each year , which commenced december 1 , 2012 .

the 2015 notes and 2022 notes may be redeemed prior to maturity at any time in whole or in part at the option of the company at a 201cmake-whole 201d redemption price .

the 201cmake-whole 201d redemption price represents a price , subject to the specific terms of the 2015 and 2022 notes and related indenture , that is the greater of ( a ) par value and ( b ) the present value of future payments that will not be paid because of an early redemption , which is discounted at a fixed spread over a comparable treasury security .
the 2015 notes and 2022 notes were issued at a discount of $ 5 million that is being amortized over the term of the notes .

the company incurred approximately $ 7 million of debt issuance costs , which are being amortized over the respective terms of the 2015 notes and 2022 notes .
at december 31 , 2014 , $ 4 million of unamortized debt issuance costs was included in other assets on the consolidated statement of financial condition .
2021 notes .
in may 2011 , the company issued $ 1.5 billion in aggregate principal amount of unsecured unsubordinated obligations .

these notes were issued as two separate series of senior debt securities , including $ 750 million of 4.25% ( 4.25 % ) notes maturing in may 2021 and $ 750 million of floating rate notes ( 201c2013 floating rate notes 201d ) , which were repaid in may 2013 at maturity .
net proceeds of this offering were used to fund the repurchase of blackrock 2019s series b preferred from affiliates of merrill lynch & co. , inc .
( 201cmerrill lynch 201d ) .
interest

 |
| table | ( in millions )                   | maturity amount | unamortized discount | carrying value | fair value
--------------------------------- | --------------- | -------------------- | -------------- | ----------
1.375% ( 1.375 % ) notes due 2015 | $ 750           | $ 2014               | $ 750          | $ 753
6.25% ( 6.25 % ) notes due 2017   | 700             | -1 ( 1 )             | 699            | 785
5.00% ( 5.00 % ) notes due 2019   | 1000            | -2 ( 2 )             | 998            | 1134
4.25% ( 4.25 % ) notes due 2021   | 750             | -3 ( 3 )             | 747            | 825
3.375% ( 3.375 % ) notes due 2022 | 750             | -3 ( 3 )             | 747            | 783
3.50% ( 3.50 % ) notes due 2024   | 1000            | -3 ( 3 )             | 997            | 1029
total long-term borrowings        | $ 4950          | $ -12 ( 12 )         | $ 4938         | $ 5309 |


| _id | dd4c1a4c4 |
| title |  |
| text | interest expense .

2014 vs .
2013 interest incurred decreased $ 9.5 .
the decrease was primarily due to a lower average interest rate on the debt portfolio which reduced interest by $ 13 , partially offset by a higher average debt balance which increased interest by $ 6 .
the change in capitalized interest was driven by a higher carrying value in construction in progress .
2013 vs .
2012 interest incurred increased $ 13.7 .

2012 interest incurred increased $ 13.7 .
the increase was driven primarily by a higher average debt balance for $ 41 , partially offset by a lower average interest rate on the debt portfolio of $ 24 .
the change in capitalized interest was driven by a decrease in project spending and a lower average interest rate .
effective tax rate the effective tax rate equals the income tax provision divided by income from continuing operations before taxes .

refer to note 22 , income taxes , to the consolidated financial statements for details on factors affecting the effective tax rate .
2014 vs .
2013 on a gaap basis , the effective tax rate was 27.0% ( 27.0 % ) and 22.8% ( 22.8 % ) in 2014 and 2013 , respectively .

the effective tax rate was higher in the current year primarily due to the goodwill impairment charge of $ 305.2 , which was not deductible for tax purposes , and the chilean tax reform enacted in september 2014 which increased income tax expense by $ 20.6 .
these impacts were partially offset by an income tax benefit of $ 51.6 associated with losses from transactions and a tax election in a non-u.s .
subsidiary .

subsidiary .
the prior year rate included income tax benefits of $ 73.7 related to the business restructuring and cost reduction plans and $ 3.7 for the advisory costs .
refer to note 4 , business restructuring and cost reduction actions ; note 9 , goodwill ; note 22 , income taxes ; and note 23 , supplemental information , to the consolidated financial statements for details on these transactions .

on a non-gaap basis , the effective tax rate was 24.0% ( 24.0 % ) and 24.2% ( 24.2 % ) in 2014 and 2013 , respectively .
2013 vs .
2012 on a gaap basis , the effective tax rate was 22.8% ( 22.8 % ) and 21.9% ( 21.9 % ) in 2013 and 2012 , respectively .
the effective rate in 2013 includes income tax benefits of $ 73.7 related to the business restructuring and cost reduction plans and $ 3.7 for the advisory costs .

the effective rate in 2012 includes income tax benefits of $ 105.0 related to the business restructuring and cost reduction plans , $ 58.3 related to the second quarter spanish tax ruling , and $ 3.7 related to the customer bankruptcy charge , offset by income tax expense of $ 43.8 related to the first quarter spanish tax settlement and $ 31.3 related to the gain on the previously held equity interest in da nanomaterials .

refer to note 4 , business restructuring and cost reduction actions ; note 5 , business combinations ; note 22 , income taxes ; and note 23 , supplemental information , to the consolidated financial statements for details on these transactions .
on a non-gaap basis , the effective tax rate was 24.2% ( 24.2 % ) in both 2013 and 2012 .

discontinued operations during the second quarter of 2012 , the board of directors authorized the sale of our homecare business , which had previously been reported as part of the merchant gases operating segment .
in 2012 , we sold the majority of our homecare business to the linde group for sale proceeds of 20ac590 million ( $ 777 ) and recognized a gain of $ 207.4 ( $ 150.3 after-tax , or $ .70 per share ) .

in addition , an impairment charge of $ 33.5 ( $ 29.5 after-tax , or $ .14 per share ) was recorded to write down the remaining business , which was primarily in the united kingdom and ireland , to its estimated net realizable value .
in 2013 , we recorded an additional charge of $ 18.7 ( $ 13.6 after-tax , or $ .06 per share ) to update our estimate of the net realizable value .

in 2014 , a gain of $ 3.9 was recognized for the sale of the remaining homecare business and settlement of contingencies on the sale to the linde group .
refer to note 3 , discontinued operations , to the consolidated financial statements for additional details on this business.

 |
| table | | 2014    | 2013    | 2012
--------------------------- | ------- | ------- | -------
interest incurred           | $ 158.1 | $ 167.6 | $ 153.9
less : capitalized interest | 33.0    | 25.8    | 30.2
interest expense            | $ 125.1 | $ 141.8 | $ 123.7 |


| _id | dd4c043ae |
| title |  |
| text | 74 2013 ppg annual report and form 10-k 22 .
separation and merger transaction on january 28 , 2013 , the company completed the previously announced separation of its commodity chemicals business and merger of its wholly-owned subsidiary , eagle spinco inc. , with a subsidiary of georgia gulf corporation in a tax ef ficient reverse morris trust transaction ( the 201ctransaction 201d ) .

pursuant to the merger , eagle spinco , the entity holding ppg's former commodity chemicals business , became a wholly-owned subsidiary of georgia gulf .
the closing of the merger followed the expiration of the related exchange offer and the satisfaction of certain other conditions .
the combined company formed by uniting georgia gulf with ppg's former commodity chemicals business is named axiall corporation ( 201caxiall 201d ) .
ppg holds no ownership interest in axiall .

ppg holds no ownership interest in axiall .
ppg received the necessary ruling from the internal revenue service and as a result this transaction was generally tax free to ppg and its shareholders in the united states and canada .
under the terms of the exchange offer , 35249104 shares of eagle spinco common stock were available for distribution in exchange for shares of ppg common stock accepted in the offer .

following the merger , each share of eagle spinco common stock automatically converted into the right to receive one share of axiall corporation common stock .
accordingly , ppg shareholders who tendered their shares of ppg common stock as part of this offer received 3.2562 shares of axiall common stock for each share of ppg common stock accepted for exchange .

ppg was able to accept the maximum of 10825227 shares of ppg common stock for exchange in the offer , and thereby , reduced its outstanding shares by approximately 7% ( 7 % ) .
the completion of this exchange offer was a non-cash financing transaction , which resulted in an increase in "treasury stock" at a cost of $ 1.561 billion based on the ppg closing stock price on january 25 , 2013 .

under the terms of the transaction , ppg received $ 900 million of cash and 35.2 million shares of axiall common stock ( market value of $ 1.8 billion on january 25 , 2013 ) which was distributed to ppg shareholders by the exchange offer as described above .
in addition , ppg received $ 67 million in cash for a preliminary post-closing working capital adjustment under the terms of the transaction agreements .

the net assets transferred to axiall included $ 27 million of cash on the books of the business transferred .
in the transaction , ppg transferred environmental remediation liabilities , defined benefit pension plan assets and liabilities and other post-employment benefit liabilities related to the commodity chemicals business to axiall .

during the first quarter of 2013 , ppg recorded a gain of $ 2.2 billion on the transaction reflecting the excess of the sum of the cash proceeds received and the cost ( closing stock price on january 25 , 2013 ) of the ppg shares tendered and accepted in the exchange for the 35.2 million shares of axiall common stock over the net book value of the net assets of ppg's former commodity chemicals business .

the transaction resulted in a net partial settlement loss of $ 33 million associated with the spin out and termination of defined benefit pension liabilities and the transfer of other post-retirement benefit liabilities under the terms of the transaction .

the company also incurred $ 14 million of pretax expense , primarily for professional services related to the transaction in 2013 as well as approximately $ 2 million of net expense related to certain retained obligations and post-closing adjustments under the terms of the transaction agreements .
the net gain on the transaction includes these related losses and expenses .

the results of operations and cash flows of ppg's former commodity chemicals business for january 2013 and the net gain on the transaction are reported as results from discontinued operations for the year -ended december 31 , 2013 .
in prior periods presented , the results of operations and cash flows of ppg's former commodity chemicals business have been reclassified from continuing operations and presented as results from discontinued operations .

ppg will provide axiall with certain transition services for up to 24 months following the closing date of the transaction .
these services include logistics , purchasing , finance , information technology , human resources , tax and payroll processing .
the net sales and income before income taxes of the commodity chemicals business that have been reclassified and reported as discontinued operations are presented in the table below: .

income from discontinued operations , net of tax $ 2197 $ 228 $ 250 less : net income attributable to non- controlling interests , discontinued operations $ 2014 $ ( 13 ) $ ( 13 ) net income from discontinued operations ( attributable to ppg ) $ 2197 $ 215 $ 237 during 2012 , $ 21 million of business separation costs are included within "income from discontinued operations , net." notes to the consolidated financial statements

 |
| table | millions                                                                            | year-ended 2013 | year-ended 2012 | year-ended 2011
----------------------------------------------------------------------------------- | --------------- | --------------- | ---------------
net sales                                                                           | $ 108           | $ 1688          | $ 1732
income from operations before income tax                                            | $ 2014          | $ 345           | $ 376
net gain from separation and merger of commodity chemicals business                 | 2192            | 2014            | 2014
income tax expense                                                                  | -5 ( 5 )        | 117             | 126
income from discontinued operations net of tax                                      | $ 2197          | $ 228           | $ 250
less : net income attributable to non-controlling interests discontinued operations | $ 2014          | $ -13 ( 13 )    | $ -13 ( 13 )
net income from discontinued operations ( attributable to ppg )                     | $ 2197          | $ 215           | $ 237 |


| _id | dd4ba002a |
| title |  |
| text | stock option gains previously deferred by those participants pursuant to the terms of the deferred compensation plan and earnings on those deferred amounts .
as a result of certain provisions of the american jobs creation act , participants had the opportunity until december 31 , 2005 to elect to withdraw amounts previously deferred .
11 .
lease commitments the company leases certain of its facilities , equipment and software under various operating leases that expire at various dates through 2022 .

the lease agreements frequently include renewal and escalation clauses and require the company to pay taxes , insurance and maintenance costs .
total rental expense under operating leases was approximately $ 43 million in fiscal 2007 , $ 45 million in fiscal 2006 and $ 44 million in fiscal 2005 .
the following is a schedule of future minimum rental payments required under long-term operating leases at november 3 , 2007 : fiscal years operating leases .

12 .
commitments and contingencies tentative settlement of the sec 2019s previously announced stock option investigation in the company 2019s 2004 form 10-k filing , the company disclosed that the securities and exchange com- mission ( sec ) had initiated an inquiry into its stock option granting practices , focusing on options that were granted shortly before the issuance of favorable financial results .

on november 15 , 2005 , the company announced that it had reached a tentative settlement with the sec .
at all times since receiving notice of this inquiry , the company has cooperated with the sec .
in november 2005 , the company and its president and ceo , mr .
jerald g .
fishman , made an offer of settlement to the staff of the sec .
the settlement has been submitted to the commission for approval .
there can be no assurance a final settlement will be so approved .

the sec 2019s inquiry focused on two separate issues .
the first issue concerned the company 2019s disclosure regarding grants of options to employees and directors prior to the release of favorable financial results .
specifically , the issue related to options granted to employees ( including officers ) of the company on november 30 , 1999 and to employees ( including officers ) and directors of the company on november 10 , 2000 .

the second issue concerned the grant dates for options granted to employees ( including officers ) in 1998 and 1999 , and the grant date for options granted to employees ( including officers ) and directors in 2001 .

specifically , the settlement would conclude that the appropriate grant date for the september 4 , 1998 options should have been september 8th ( which is one trading day later than the date that was used to price the options ) ; the appropriate grant date for the november 30 , 1999 options should have been november 29th ( which is one trading day earlier than the date that was used ) ; and the appropriate grant date for the july 18 , 2001 options should have been july 26th ( which is five trading days

have been july 26th ( which is five trading days after the original date ) .

analog devices , inc .
notes to consolidated financial statements 2014 ( continued )

 |
| table | fiscal years | operating leases
------------ | ----------------
2008         | $ 30774
2009         | $ 25906
2010         | $ 13267
2011         | $ 5430
2012         | $ 3842
later years  | $ 12259
total        | $ 91478 |


| _id | dd4b8d844 |
| title |  |
| text | entergy new orleans , inc .
management's financial discussion and analysis results of operations net income ( loss ) 2004 compared to 2003 net income increased $ 20.2 million primarily due to higher net revenue .
2003 compared to 2002 entergy new orleans had net income of $ 7.9 million in 2003 compared to a net loss in 2002 .
the increase was due to higher net revenue and lower interest expense , partially offset by higher other operation and maintenance expenses and depreciation and amortization expenses .

net revenue 2004 compared to 2003 net revenue , which is entergy new orleans' measure of gross margin , consists of operating revenues net of : 1 ) fuel , fuel-related , and purchased power expenses and 2 ) other regulatory credits .
following is an analysis of the change in net revenue comparing 2004 to 2003. .

the increase in base rates was effective june 2003 .
the rate increase is discussed in note 2 to the domestic utility companies and system energy financial statements .
the volume/weather variance is primarily due to increased billed electric usage of 162 gwh in the industrial service sector .
the increase was partially offset by milder weather in the residential and commercial sectors .

the 2004 deferrals variance is due to the deferral of voluntary severance plan and fossil plant maintenance expenses in accordance with a stipulation approved by the city council in august 2004 .
the stipulation allows for the recovery of these costs through amortization of a regulatory asset .
the voluntary severance plan and fossil plant maintenance expenses are being amortized over a five-year period that became effective january 2004 and january 2003 , respectively .

the formula rate plan is discussed in note 2 to the domestic utility companies and system energy financial statements .
the price applied to unbilled electric sales variance is due to an increase in the fuel price applied to unbilled sales.

 |
| table | | ( in millions )
---------------------------------------- | ---------------
2003 net revenue                         | $ 208.3
base rates                               | 10.6
volume/weather                           | 8.3
2004 deferrals                           | 7.5
price applied to unbilled electric sales | 3.7
other                                    | 0.6
2004 net revenue                         | $ 239.0 |


| _id | dd4bb3512 |
| title |  |
| text | masco corporation notes to consolidated financial statements ( continued ) o .
segment information ( continued ) ( 1 ) included in net sales were export sales from the u.s .
of $ 229 million , $ 241 million and $ 246 million in 2012 , 2011 and 2010 , respectively .
( 2 ) excluded from net sales were intra-company sales between segments of approximately two percent of net sales in each of 2012 , 2011 and 2010 .

( 3 ) included in net sales were sales to one customer of $ 2143 million , $ 1984 million and $ 1993 million in 2012 , 2011 and 2010 , respectively .
such net sales were included in the following segments : cabinets and related products , plumbing products , decorative architectural products and other specialty products .
( 4 ) net sales from the company 2019s operations in the u.s .
were $ 5793 million , $ 5394 million and $ 5618 million in 2012 , 2011 and 2010 , respectively .

( 5 ) net sales , operating ( loss ) profit , property additions and depreciation and amortization expense for 2012 , 2011 and 2010 excluded the results of businesses reported as discontinued operations in 2012 , 2011 and 2010 .
( 6 ) included in segment operating profit ( loss ) for 2012 was an impairment charge for other intangible assets as follows : other specialty products 2013 $ 42 million .

included in segment operating ( loss ) profit for 2011 were impairment charges for goodwill and other intangible assets as follows : cabinets and related products 2013 $ 44 million ; plumbing products 2013 $ 1 million ; decorative architectural products 2013 $ 75 million ; and other specialty products 2013 $ 374 million .

included in segment operating ( loss ) profit for 2010 were impairment charges for goodwill and other intangible assets as follows : plumbing products 2013 $ 1 million ; and installation and other services 2013 $ 697 million .
( 7 ) general corporate expense , net included those expenses not specifically attributable to the company 2019s segments .

( 8 ) the charge for litigation settlement , net in 2012 primarily relates to a business in the installation and other services segment and in 2011 relates to business units in the cabinets and related products and the other specialty products segments .
( 9 ) long-lived assets of the company 2019s operations in the u.s .
and europe were $ 2795 million and $ 567 million , $ 2964 million and $ 565 million , and $ 3684 million and $ 617 million at december 31 , 2012 , 2011 and 2010 , respectively .

( 10 ) segment assets for 2012 and 2011 excluded the assets of businesses reported as discontinued operations in the respective years .
p .
severance costs as part of the company 2019s continuing review of its operations , actions were taken during 2012 , 2011 and 2010 to respond to market conditions .
the company recorded charges related to severance and early retirement programs of $ 36 million , $ 17 million and $ 14 million for the years ended december 31 , 2012 , 2011 and 2010 , respectively .

such charges are principally reflected in the statement of operations in selling , general and administrative expenses and were paid when incurred .
q .
other income ( expense ) , net other , net , which is included in other income ( expense ) , net , was as follows , in millions: .

other items , net , included realized foreign currency transaction losses of $ 2 million , $ 5 million and $ 2 million in 2012 , 2011 and 2010 , respectively , as well as other miscellaneous items.

 |
| table | | 2012     | 2011     | 2010
------------------------------------------------ | -------- | -------- | --------
income from cash and cash investments            | $ 6      | $ 8      | $ 6
other interest income                            | 1        | 1        | 1
income from financial investments net ( note e ) | 24       | 73       | 9
other items net                                  | -4 ( 4 ) | -5 ( 5 ) | -9 ( 9 )
total other net                                  | $ 27     | $ 77     | $ 7 |


| _id | dd4bbc7ca |
| title |  |
| text | 35% ( 35 % ) due primarily to certain undistributed foreign earnings for which no u.s .
taxes are provided because such earnings are intended to be indefinitely reinvested outside the u.s .
as of september 24 , 2011 , the company had deferred tax assets arising from deductible temporary differences , tax losses , and tax credits of $ 3.2 billion , and deferred tax liabilities of $ 9.2 billion .

management believes it is more likely than not that forecasted income , including income that may be generated as a result of certain tax planning strategies , together with future reversals of existing taxable temporary differences , will be sufficient to fully recover the deferred tax assets .
the company will continue to evaluate the realizability of deferred tax assets quarterly by assessing the need for and amount of a valuation allowance .

the internal revenue service ( the 201cirs 201d ) has completed its field audit of the company 2019s federal income tax returns for the years 2004 through 2006 and proposed certain adjustments .
the company has contested certain of these adjustments through the irs appeals office .
the irs is currently examining the years 2007 through 2009 .
all irs audit issues for years prior to 2004 have been resolved .
in addition , the company is subject to audits by state , local , and foreign tax authorities .

management believes that adequate provisions have been made for any adjustments that may result from tax examinations .
however , the outcome of tax audits cannot be predicted with certainty .
if any issues addressed in the company 2019s tax audits are resolved in a manner not consistent with management 2019s expectations , the company could be required to adjust its provision for income taxes in the period such resolution occurs .

liquidity and capital resources the following table presents selected financial information and statistics as of and for the three years ended september 24 , 2011 ( in millions ) : .

cash , cash equivalents and marketable securities increased $ 30.6 billion or 60% ( 60 % ) during 2011 .
the principal components of this net increase was the cash generated by operating activities of $ 37.5 billion , which was partially offset by payments for acquisition of property , plant and equipment of $ 4.3 billion , payments for acquisition of intangible assets of $ 3.2 billion and payments made in connection with business acquisitions , net of cash acquired , of $ 244 million .

the company believes its existing balances of cash , cash equivalents and marketable securities will be sufficient to satisfy its working capital needs , capital asset purchases , outstanding commitments and other liquidity requirements associated with its existing operations over the next 12 months .
the company 2019s marketable securities investment portfolio is invested primarily in highly rated securities and its policy generally limits the amount of credit exposure to any one issuer .

the company 2019s investment policy requires investments to generally be investment grade with the objective of minimizing the potential risk of principal loss .
as of september 24 , 2011 and september 25 , 2010 , $ 54.3 billion and $ 30.8 billion , respectively , of the company 2019s cash , cash equivalents and marketable securities were held by foreign subsidiaries and are generally based in u.s .
dollar-denominated holdings .
amounts held by foreign subsidiaries are generally subject to u.s .

income taxation on repatriation to the u.s .
capital assets the company 2019s capital expenditures were $ 4.6 billion during 2011 , consisting of approximately $ 614 million for retail store facilities and $ 4.0 billion for other capital expenditures , including product tooling and manufacturing

 |
| table | | 2011    | 2010    | 2009
----------------------------------------------- | ------- | ------- | -------
cash cash equivalents and marketable securities | $ 81570 | $ 51011 | $ 33992
accounts receivable net                         | $ 5369  | $ 5510  | $ 3361
inventories                                     | $ 776   | $ 1051  | $ 455
working capital                                 | $ 17018 | $ 20956 | $ 20049
annual operating cash flow                      | $ 37529 | $ 18595 | $ 10159 |


| _id | dd4b928a8 |
| title |  |
| text | u.s .
equity securities and international equity securities categorized as level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year .
for u.s .
equity securities and international equity securities not traded on an active exchange , or if the closing price is not available , the trustee obtains indicative quotes from a pricing vendor , broker or investment manager .

these securities are categorized as level 2 if the custodian obtains corroborated quotes from a pricing vendor or categorized as level 3 if the custodian obtains uncorroborated quotes from a broker or investment manager .
commingled equity funds categorized as level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year .

for commingled equity funds not traded on an active exchange , or if the closing price is not available , the trustee obtains indicative quotes from a pricing vendor , broker or investment manager .
these securities are categorized as level 2 if the custodian obtains corroborated quotes from a pricing vendor .

fixed income investments categorized as level 2 are valued by the trustee using pricing models that use verifiable observable market data ( e.g. , interest rates and yield curves observable at commonly quoted intervals and credit spreads ) , bids provided by brokers or dealers or quoted prices of securities with similar characteristics .
fixed income investments are categorized at level 3 when valuations using observable inputs are unavailable .

the trustee obtains pricing based on indicative quotes or bid evaluations from vendors , brokers or the investment manager .
commodities are traded on an active commodity exchange and are valued at their closing prices on the last trading day of the certain commingled equity funds , consisting of equity mutual funds , are valued using the nav.aa thenavaa valuations are based on the underlying investments and typically redeemable within 90 days .

private equity funds consist of partnership and co-investment funds .
the navaa is based on valuation models of the underlying securities , which includes unobservable inputs that cannot be corroborated using verifiable observable market data .
these funds typically have redemption periods between eight and 12 years .
real estate funds consist of partnerships , most of which are closed-end funds , for which the navaa is based on valuationmodels and periodic appraisals .

these funds typically have redemption periods between eight and 10 years .
hedge funds consist of direct hedge funds forwhich thenavaa is generally based on the valuation of the underlying investments .
redemptions in hedge funds are based on the specific terms of each fund , and generally range from a minimum of one month to several months .

contributions and expected benefit payments the funding of our qualified defined benefit pension plans is determined in accordance with erisa , as amended by the ppa , and in a manner consistent with cas and internal revenue code rules .
there were no material contributions to our qualified defined benefit pension plans during 2017 .

we will make contributions of $ 5.0 billion to our qualified defined benefit pension plans in 2018 , including required and discretionary contributions.as a result of these contributions , we do not expect any material qualified defined benefit cash funding will be required until 2021.we plan to fund these contributions using a mix of cash on hand and commercial paper .

while we do not anticipate a need to do so , our capital structure and resources would allow us to issue new debt if circumstances change .
the following table presents estimated future benefit payments , which reflect expected future employee service , as of december 31 , 2017 ( in millions ) : .

defined contribution plans wemaintain a number of defined contribution plans , most with 401 ( k ) features , that cover substantially all of our employees .
under the provisions of our 401 ( k ) plans , wematchmost employees 2019 eligible contributions at rates specified in the plan documents .
our contributions were $ 613 million in 2017 , $ 617 million in 2016 and $ 393 million in 2015 , the majority of which were funded using our common stock .

our defined contribution plans held approximately 35.5 million and 36.9 million shares of our common stock as of december 31 , 2017 and 2016.

 |
| table | | 2018   | 2019   | 2020   | 2021   | 2022   | 2023 2013 2027
---------------------------------------- | ------ | ------ | ------ | ------ | ------ | --------------
qualified defined benefit pension plans  | $ 2450 | $ 2480 | $ 2560 | $ 2630 | $ 2700 | $ 14200
retiree medical and life insurance plans | 180    | 180    | 180    | 180    | 180    | 820 |


| _id | dd4980c68 |
| title |  |
| text | equity compensation plan information the following table presents the equity securities available for issuance under our equity compensation plans as of december 31 , 2017 .

equity compensation plan information plan category number of securities to be issued upon exercise of outstanding options , warrants and rights ( 1 ) weighted-average exercise price of outstanding options , warrants and rights number of securities remaining available for future issuance under equity compensation plans ( excluding securities reflected in column ( a ) ) ( a ) ( b ) ( c ) equity compensation plans approved by security holders 448859 $ 0.00 4087587 equity compensation plans not approved by

4087587 equity compensation plans not approved by security holders ( 2 ) 2014 2014 2014 .

( 1 ) includes grants made under the huntington ingalls industries , inc .
2012 long-term incentive stock plan ( the "2012 plan" ) , which was approved by our stockholders on may 2 , 2012 , and the huntington ingalls industries , inc .
2011 long-term incentive stock plan ( the "2011 plan" ) , which was approved by the sole stockholder of hii prior to its spin-off from northrop grumman corporation .
of these shares , 27123 were stock rights granted under the 2011 plan .

in addition , this number includes 28763 stock rights , 3075 restricted stock rights , and 389898 restricted performance stock rights granted under the 2012 plan , assuming target performance achievement .
( 2 ) there are no awards made under plans not approved by security holders .
item 13 .

item 13 .
certain relationships and related transactions , and director independence information as to certain relationships and related transactions and director independence will be incorporated herein by reference to the proxy statement for our 2018 annual meeting of stockholders , to be filed within 120 days after the end of the company 2019s fiscal year .
item 14 .

item 14 .
principal accountant fees and services information as to principal accountant fees and services will be incorporated herein by reference to the proxy statement for our 2018 annual meeting of stockholders , to be filed within 120 days after the end of the company 2019s fiscal year.

 |
| table | plan category                                                    | number of securities to be issued upon exercise of outstanding options warrants and rights ( 1 ) ( a ) ( b ) | weighted-average exercise price of outstanding optionswarrants and rights | number of securities remaining available for future issuance under equity compensation plans ( excluding securitiesreflected in column ( a ) ) ( c )
---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
equity compensation plans approved by security holders           | 448859                                                                                | $ 0.00                                                                    | 4087587
equity compensation plans not approved by security holders ( 2 ) | 2014                                                                                | 2014                                                                      | 2014
total                                                            | 448859                                                                                | $ 0.00                                                                    | 4087587 |


| _id | dd4c4bb3c |
| title |  |
| text | market risk management 2013 equity and other investment equity investment risk is the risk of potential losses associated with investing in both private and public equity markets .
in addition to extending credit , taking deposits , securities underwriting and trading financial instruments , we make and manage direct investments in a variety of transactions , including management buyouts , recapitalizations and growth financings in a variety of industries .

we also have investments in affiliated and non-affiliated funds that make similar investments in private equity and in debt and equity-oriented hedge funds .
the economic and/or book value of these investments and other assets such as loan servicing rights are directly affected by changes in market factors .
the primary risk measurement for equity and other investments is economic capital .
economic capital is a common measure of risk for credit , market and operational risk .

it is an estimate of the potential value depreciation over a one year horizon commensurate with solvency expectations of an institution rated single-a by the credit rating agencies .
given the illiquid nature of many of these types of investments , it can be a challenge to determine their fair values .
see note 7 fair value in the notes to consolidated financial statements in item 8 of this report for additional information .
various pnc business units manage our equity and other investment activities .

our businesses are responsible for making investment decisions within the approved policy limits and associated guidelines .
a summary of our equity investments follows : table 54 : equity investments summary in millions december 31 december 31 .

( a ) the december 31 , 2013 amount has been updated to reflect the first quarter 2014 adoption of asu 2014-01 related to investments in low income housing tax credits .
blackrock pnc owned approximately 35 million common stock equivalent shares of blackrock equity at december 31 , 2014 , accounted for under the equity method .
the primary risk measurement , similar to other equity investments , is economic capital .

the business segments review section of this item 7 includes additional information about blackrock .
tax credit investments included in our equity investments are direct tax credit investments and equity investments held by consolidated partnerships which totaled $ 2.6 billion at both december 31 , 2014 and december 31 , 2013 .
these equity investment balances include unfunded commitments totaling $ 717 million and $ 802 million at december 31 , 2014 and december 31 , 2013 , respectively .

these unfunded commitments are included in other liabilities on our consolidated balance sheet .
note 2 loan sale and servicing activities and variable interest entities in the notes to consolidated financial statements in item 8 of this report has further information on tax credit investments .
private equity the private equity portfolio is an illiquid portfolio comprised of mezzanine and equity investments that vary by industry , stage and type of investment .

private equity investments carried at estimated fair value totaled $ 1.6 billion at december 31 , 2014 and $ 1.7 billion at december 31 , 2013 .
as of december 31 , 2014 , $ 1.1 billion was invested directly in a variety of companies and $ .5 billion was invested indirectly through various private equity funds .
included in direct investments are investment activities of two private equity funds that are consolidated for financial reporting purposes .

the noncontrolling interests of these funds totaled $ 212 million as of december 31 , 2014 .
the interests held in indirect private equity funds are not redeemable , but pnc may receive distributions over the life of the partnership from liquidation of the underlying investments .

see item 1 business 2013 supervision and regulation and item 1a risk factors of this report for discussion of the potential impacts of the volcker rule provisions of dodd-frank on our interests in and sponsorship of private funds covered by the volcker rule .
our unfunded commitments related to private equity totaled $ 140 million at december 31 , 2014 compared with $ 164 million at december 31 , 2013 .
the pnc financial services group , inc .
2013 form 10-k 93

 |
| table | in millions                  | december 312014 | december 312013
---------------------------- | --------------- | ---------------
blackrock                    | $ 6265          | $ 5940
tax credit investments ( a ) | 2616            | 2572
private equity               | 1615            | 1656
visa                         | 77              | 158
other                        | 155             | 234
total                        | $ 10728         | $ 10560 |


| _id | dd4b8c016 |
| title |  |
| text | marathon oil corporation notes to consolidated financial statements ( g ) this obligation relates to a lease of equipment at united states steel 2019s clairton works cokemaking facility in pennsylvania .
we are the primary obligor under this lease .
under the financial matters agreement , united states steel has assumed responsibility for all obligations under this lease .
this lease is an amortizing financing with a final maturity of 2012 .

( h ) these notes are senior secured notes of marathon oil canada corporation .
the notes are secured by substantially all of marathon oil canada corporation 2019s assets .
in january 2008 , we provided a full and unconditional guarantee covering the payment of all principal and interest due under the senior notes .
( i ) these obligations as of december 31 , 2009 include $ 36 million related to assets under construction at that date for which a capital lease will commence upon completion of construction .

the amounts currently reported are based upon the percent of construction completed as of december 31 , 2009 and therefore do not reflect future minimum lease obligations of $ 164 million related to the asset .
( j ) payments of long-term debt for the years 2010 - 2014 are $ 102 million , $ 246 million , $ 1492 million , $ 287 million and $ 802 million .
united steel is due to pay $ 17 million in 2010 , $ 161 million in 2011 , $ 19 million in 2012 , and $ 11 for year 2014 .

( k ) in the event of a change in control , as defined in the related agreements , debt obligations totaling $ 662 million at december 31 , 2009 , may be declared immediately due and payable .
( l ) see note 16 for information on interest rate swaps .
20 .
asset retirement obligations the following summarizes the changes in asset retirement obligations : ( in millions ) 2009 2008 .

asset retirement obligations as of december 31 ( a ) $ 1102 $ 965 ( a ) includes asset retirement obligation of $ 3 and $ 2 million classified as short-term at december 31 , 2009 , and 2008.

 |
| table | ( in millions )                                                           | 2009       | 2008
------------------------------------------------------------------------- | ---------- | ------------
asset retirement obligations as of january 1                              | $ 965      | $ 1134
liabilities incurred including acquisitions                               | 14         | 30
liabilities settled                                                       | -65 ( 65 ) | -94 ( 94 )
accretion expense ( included in depreciation depletion and amortization ) | 64         | 66
revisions to previous estimates                                           | 124        | 24
held for sale                                                             | -          | -195 ( 195 )
asset retirement obligations as of december 31 ( a )                      | $ 1102     | $ 965 |


| _id | dd4bbb096 |
| title |  |
| text | entergy corporation and subsidiaries notes to financial statements ( a ) consists of pollution control revenue bonds and environmental revenue bonds , some of which are secured by collateral first mortgage bonds .
( b ) these notes do not have a stated interest rate , but have an implicit interest rate of 4.8% ( 4.8 % ) .
( c ) pursuant to the nuclear waste policy act of 1982 , entergy 2019s nuclear owner/licensee subsidiaries have contracts with the doe for spent nuclear fuel disposal service .

the contracts include a one-time fee for generation prior to april 7 , 1983 .
entergy arkansas is the only entergy company that generated electric power with nuclear fuel prior to that date and includes the one-time fee , plus accrued interest , in long-term debt .

( d ) see note 10 to the financial statements for further discussion of the waterford 3 lease obligation and entergy louisiana 2019s acquisition of the equity participant 2019s beneficial interest in the waterford 3 leased assets and for further discussion of the grand gulf lease obligation .
( e ) this note does not have a stated interest rate , but has an implicit interest rate of 7.458% ( 7.458 % ) .

( f ) the fair value excludes lease obligations of $ 57 million at entergy louisiana and $ 34 million at system energy , and long-term doe obligations of $ 182 million at entergy arkansas , and includes debt due within one year .
fair values are classified as level 2 in the fair value hierarchy discussed in note 15 to the financial statements and are based on prices derived from inputs such as benchmark yields and reported trades .

the annual long-term debt maturities ( excluding lease obligations and long-term doe obligations ) for debt outstanding as of december 31 , 2016 , for the next five years are as follows : amount ( in thousands ) .

in november 2000 , entergy 2019s non-utility nuclear business purchased the fitzpatrick and indian point 3 power plants in a seller-financed transaction .
as part of the purchase agreement with nypa , entergy recorded a liability representing the net present value of the payments entergy would be liable to nypa for each year that the fitzpatrick and indian point 3 power plants would run beyond their respective original nrc license expiration date .

in october 2015 , entergy announced a planned shutdown of fitzpatrick at the end of its fuel cycle .
as a result of the announcement , entergy reduced this liability by $ 26.4 million pursuant to the terms of the purchase agreement .
in august 2016 , entergy entered into a trust transfer agreement with nypa to transfer the decommissioning trust funds and decommissioning liabilities for the indian point 3 and fitzpatrick plants to entergy .

as part of the trust transfer agreement , the original decommissioning agreements were amended , and the entergy subsidiaries 2019 obligation to make additional license extension payments to nypa was eliminated .
in the third quarter 2016 , entergy removed the note payable of $ 35.1 million from the consolidated balance sheet .
entergy louisiana , entergy mississippi , entergy texas , and system energy have obtained long-term financing authorizations from the ferc that extend through october 2017 .

entergy arkansas has obtained long-term financing authorization from the apsc that extends through december 2018 .
entergy new orleans has obtained long-term financing authorization from the city council that extends through june 2018 .

capital funds agreement pursuant to an agreement with certain creditors , entergy corporation has agreed to supply system energy with sufficient capital to : 2022 maintain system energy 2019s equity capital at a minimum of 35% ( 35 % ) of its total capitalization ( excluding short- term debt ) ;

 |
| table | | amount ( in thousands )
---- | -----------------------
2017 | $ 307403
2018 | $ 828084
2019 | $ 724899
2020 | $ 795000
2021 | $ 1674548 |