| _id | dd4badf40 |
| title |  |
| text | human capital management strategic imperative entergy engaged in a strategic imperative intended to optimize the organization through a process known as human capital management .
in july 2013 management completed a comprehensive review of entergy 2019s organization design and processes .
this effort resulted in a new internal organization structure , which resulted in the elimination of approximately 800 employee positions .

entergy incurred approximately $ 110 million in costs in 2013 associated with this phase of human capital management , primarily implementation costs , severance expenses , pension curtailment losses , special termination benefits expense , and corporate property , plant , and equipment impairments .
in december 2013 , entergy deferred for future recovery approximately $ 45 million of these costs , as approved by the apsc and the lpsc .

see note 2 to the financial statements for details of the deferrals and note 13 to the financial statements for details of the restructuring charges .
liquidity and capital resources this section discusses entergy 2019s capital structure , capital spending plans and other uses of capital , sources of capital , and the cash flow activity presented in the cash flow statement .
capital structure entergy 2019s capitalization is balanced between equity and debt , as shown in the following table. .

( a ) calculation excludes the arkansas , louisiana , and texas securitization bonds , which are non-recourse to entergy arkansas , entergy louisiana , and entergy texas , respectively .
net debt consists of debt less cash and cash equivalents .
debt consists of notes payable and commercial paper , capital lease obligations , and long-term debt , including the currently maturing portion .

capital consists of debt , common shareholders 2019 equity , and subsidiaries 2019 preferred stock without sinking fund .
net capital consists of capital less cash and cash equivalents .

entergy uses the debt to capital ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating entergy 2019s financial condition because the securitization bonds are non-recourse to entergy , as more fully described in note 5 to the financial statements .

entergy also uses the net debt to net capital ratio excluding securitization bonds in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating entergy 2019s financial condition because net debt indicates entergy 2019s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand .
long-term debt , including the currently maturing portion , makes up most of entergy 2019s total debt outstanding .

following are entergy 2019s long-term debt principal maturities and estimated interest payments as of december 31 , 2013 .
to estimate future interest payments for variable rate debt , entergy used the rate as of december 31 , 2013 .
the amounts below include payments on the entergy louisiana and system energy sale-leaseback transactions , which are included in long-term debt on the balance sheet .
entergy corporation and subsidiaries management's financial discussion and analysis

 |
| table | | 2013               | 2012
------------------------------------------------------------ | ------------------ | ------------------
debt to capital                                              | 57.9% ( 57.9 % )   | 58.7% ( 58.7 % )
effect of excluding securitization bonds                     | ( 1.6% ( 1.6 % ) ) | ( 1.8% ( 1.8 % ) )
debt to capital excluding securitization bonds ( a )         | 56.3% ( 56.3 % )   | 56.9% ( 56.9 % )
effect of subtracting cash                                   | ( 1.5% ( 1.5 % ) ) | ( 1.1% ( 1.1 % ) )
net debt to net capital excluding securitization bonds ( a ) | 54.8% ( 54.8 % )   | 55.8% ( 55.8 % ) |


| _id | dd4b8f9b4 |
| title |  |
| text | management 2019s priorities management has re-evaluated its priorities following the appointment of its new ceo in september 2011 .

management is focused on the following priorities : 2022 execution of our geographic concentration strategy to maximize shareholder value through disciplined capital allocation including : 2022 platform expansion in brazil , chile , colombia , and the united states , 2022 platform development in turkey , poland , and the united kingdom , 2022 corporate debt reduction , and 2022 a return of capital to shareholders , including our intent to initiate a dividend in 2012 ; 2022 closing the sales of businesses

in 2012 ; 2022 closing the sales of businesses for which we have signed agreements with counterparties and prudently exiting select non-strategic markets ; 2022 optimizing profitability of operations in the existing portfolio ; 2022 integration of dpl into our portfolio ; 2022 implementing a management realignment of our businesses under two business lines : utilities and generation , and achieving cost savings through the alignment of overhead costs with business requirements , systems automation and

business requirements , systems automation and optimal allocation of business development spending ; and 2022 completion of an approximately 2400 mw construction program and the integration of new projects into existing businesses .

during the year ended december 31 , 2011 , the following projects commenced commercial operations : project location fuel aes equity interest ( percent , rounded ) aes solar ( 1 ) .
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various solar 62 50% ( 50 % ) .

trinidad ( 3 ) .
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trinidad gas 394 10% ( 10 % ) ( 1 ) aes solar energy ltd .
is a joint venture with riverstone holdings and is accounted for as an equity method investment .
plants that came online during the year include : kalipetrovo , ugento , soemina , francavilla fontana , latina , cocomeri , francofonte , scopeto , sabaudia , aprilla-1 , siracusa 1-3 complex , manduria apollo and rinaldone .
( 2 ) joint venture with i.c .
energy .

( 2 ) joint venture with i.c .
energy .
( 3 ) an equity method investment held by aes .
key trends and uncertainties our operations continue to face many risks as discussed in item 1a . 2014risk factors of this form 10-k .
some of these challenges are also described below in 201ckey drivers of results in 2011 201d .
we continue to monitor our operations and address challenges as they arise .

operations in august 2010 , the esti power plant , a 120 mw run-of-river hydroelectric power plant in panama , was taken offline due to damage to its tunnel infrastructure .
aes panama is partially covered for business

 |
| table | project         | location | fuel  | gross mw | aes equity interest ( percent rounded )
--------------- | -------- | ----- | -------- | ---------------------------------------
aes solar ( 1 ) | various  | solar | 62       | 50% ( 50 % )
angamos         | chile    | coal  | 545      | 71% ( 71 % )
changuinola     | panama   | hydro | 223      | 100% ( 100 % )
kumkoy ( 2 )    | turkey   | hydro | 18       | 51% ( 51 % )
laurel mountain | us-wv    | wind  | 98       | 100% ( 100 % )
maritza         | bulgaria | coal  | 670      | 100% ( 100 % )
sao joaquim     | brazil   | hydro | 3        | 24% ( 24 % )
trinidad ( 3 )  | trinidad | gas   | 394      | 10% ( 10 % ) |


| _id | dd498329c |
| title |  |
| text | edwards lifesciences corporation notes to consolidated financial statements ( continued ) 13 .
common stock ( continued ) the company also maintains the nonemployee directors stock incentive compensation program ( the 2018 2018nonemployee directors program 2019 2019 ) .

under the nonemployee directors program , upon a director 2019s initial election to the board , the director receives an initial grant of stock options or restricted stock units equal to a fair market value on grant date of $ 0.2 million , not to exceed 20000 shares .
these grants vest over three years from the date of grant , subject to the director 2019s continued service .

in addition , annually each nonemployee director may receive up to 40000 stock options or 16000 restricted stock units of the company 2019s common stock , or a combination thereof , provided that in no event may the total value of the combined annual award exceed $ 0.2 million .
these grants generally vest over one year from the date of grant .
under the nonemployee directors program , an aggregate of 2.8 million shares of the company 2019s common stock has been authorized for issuance .

the company has an employee stock purchase plan for united states employees and a plan for international employees ( collectively 2018 2018espp 2019 2019 ) .
under the espp , eligible employees may purchase shares of the company 2019s common stock at 85% ( 85 % ) of the lower of the fair market value of edwards lifesciences common stock on the effective date of subscription or the date of purchase .

under the espp , employees can authorize the company to withhold up to 12% ( 12 % ) of their compensation for common stock purchases , subject to certain limitations .
the espp is available to all active employees of the company paid from the united states payroll and to eligible employees of the company outside the united states , to the extent permitted by local law .
the espp for united states employees is qualified under section 423 of the internal revenue code .

the number of shares of common stock authorized for issuance under the espp was 13.8 million shares .
the fair value of each option award and employee stock purchase subscription is estimated on the date of grant using the black-scholes option valuation model that uses the assumptions noted in the following tables .
the risk-free interest rate is estimated using the u.s .
treasury yield curve and is based on the expected term of the award .

expected volatility is estimated based on a blend of the weighted-average of the historical volatility of edwards lifesciences 2019 stock and the implied volatility from traded options on edwards lifesciences 2019 stock .
the expected term of awards granted is estimated from the vesting period of the award , as well as historical exercise behavior , and represents the period of time that awards granted are expected to be outstanding .

the company uses historical data to estimate forfeitures and has estimated an annual forfeiture rate of 6.0% ( 6.0 % ) .
the black-scholes option pricing model was used with the following weighted-average assumptions for options granted during the following periods : option awards .

 |
| table | | 2016           | 2015           | 2014
------------------------------- | -------------- | -------------- | --------------
average risk-free interest rate | 1.1% ( 1.1 % ) | 1.4% ( 1.4 % ) | 1.5% ( 1.5 % )
expected dividend yield         | none           | none           | none
expected volatility             | 33% ( 33 % )   | 30% ( 30 % )   | 31% ( 31 % )
expected life ( years )         | 4.5            | 4.6            | 4.6
fair value per share            | $ 31.00        | $ 18.13        | $ 11.75 |


| _id | dd4bb284c |
| title |  |
| text | result of the effects of the costa concordia incident and the continued instability in the european eco- nomic landscape .
however , we continue to believe in the long term growth potential of this market .
we estimate that europe was served by 102 ships with approximately 108000 berths at the beginning of 2008 and by 117 ships with approximately 156000 berths at the end of 2012 .

there are approximately 9 ships with an estimated 25000 berths that are expected to be placed in service in the european cruise market between 2013 and 2017 .

the following table details the growth in the global , north american and european cruise markets in terms of cruise guests and estimated weighted-average berths over the past five years : global cruise guests ( 1 ) weighted-average supply of berths marketed globally ( 1 ) north american cruise guests ( 2 ) weighted-average supply of berths marketed in north america ( 1 ) european cruise guests weighted-average supply of berths marketed in europe ( 1 ) .

( 1 ) source : our estimates of the number of global cruise guests , and the weighted-average supply of berths marketed globally , in north america and europe are based on a combination of data that we obtain from various publicly available cruise industry trade information sources including seatrade insider and cruise line international association ( 201cclia 201d ) .

in addition , our estimates incorporate our own statistical analysis utilizing the same publicly available cruise industry data as a base .
( 2 ) source : cruise line international association based on cruise guests carried for at least two consecutive nights for years 2008 through 2011 .
year 2012 amounts represent our estimates ( see number 1 above ) .
( 3 ) source : clia europe , formerly european cruise council , for years 2008 through 2011 .

year 2012 amounts represent our estimates ( see number 1 above ) .
other markets in addition to expected industry growth in north america and europe as discussed above , we expect the asia/pacific region to demonstrate an even higher growth rate in the near term , although it will continue to represent a relatively small sector compared to north america and europe .
competition we compete with a number of cruise lines .

our princi- pal competitors are carnival corporation & plc , which owns , among others , aida cruises , carnival cruise lines , costa cruises , cunard line , holland america line , iberocruceros , p&o cruises and princess cruises ; disney cruise line ; msc cruises ; norwegian cruise line and oceania cruises .
cruise lines compete with other vacation alternatives such as land-based resort hotels and sightseeing destinations for consumers 2019 leisure time .

demand for such activities is influenced by political and general economic conditions .
com- panies within the vacation market are dependent on consumer discretionary spending .

operating strategies our principal operating strategies are to : 2022 protect the health , safety and security of our guests and employees and protect the environment in which our vessels and organization operate , 2022 strengthen and support our human capital in order to better serve our global guest base and grow our business , 2022 further strengthen our consumer engagement in order to enhance our revenues , 2022 increase the awareness and market penetration of our brands globally , 2022 focus on cost

of our brands globally , 2022 focus on cost efficiency , manage our operating expenditures and ensure adequate cash and liquid- ity , with the overall goal of maximizing our return on invested capital and long-term shareholder value , 2022 strategically invest in our fleet through the revit ad alization of existing ships and the transfer of key innovations across each brand , while prudently expanding our fleet with the new state-of-the-art cruise ships recently delivered and on order , 2022 capitalize on

delivered and on order , 2022 capitalize on the portability and flexibility of our ships by deploying them into those markets and itineraries that provide opportunities to optimize returns , while continuing our focus on existing key markets , 2022 further enhance our technological capabilities to service customer preferences and expectations in an innovative manner , while supporting our strategic focus on profitability , and part i 0494.indd 13 3/27/13 12:52 pm

 |
| table | year | global cruise guests ( 1 ) | weighted-average supply of berths marketed globally ( 1 ) | north american cruise guests ( 2 ) | weighted-average supply of berths marketed in north america ( 1 ) | european cruise guests | weighted-average supply of berths marketed in europe ( 1 )
---- | -------------------------- | --------------------------------------------------------- | ---------------------------------- | ----------------------------------------------------------------- | ---------------------- | ----------------------------------------------------------
2008 | 17184000                   | 347000                                                    | 10093000                           | 219000                                                            | 4500000                | 120000
2009 | 17340000                   | 363000                                                    | 10198000                           | 222000                                                            | 5000000                | 131000
2010 | 18800000                   | 391000                                                    | 10781000                           | 232000                                                            | 5540000                | 143000
2011 | 20227000                   | 412000                                                    | 11625000                           | 245000                                                            | 5894000                | 149000
2012 | 20823000                   | 425000                                                    | 12044000                           | 254000                                                            | 6040000                | 152000 |


| _id | dd4be27ae |
| title |  |
| text | adjusted net income of $ 4.6 billion translated into adjusted earnings of $ 5.79 per diluted share , a best- ever performance .
f0b7 freight revenues 2013 our freight revenues increased 7% ( 7 % ) year-over-year to $ 19.8 billion driven by volume growth of 2% ( 2 % ) , higher fuel surcharge revenue , and core pricing gains .
growth in frac sand , coal , and intermodal shipments more than offset declines in grain , crude oil , finished vehicles , and rock shipments .

f0b7 fuel prices 2013 our average price of diesel fuel in 2017 was $ 1.81 per gallon , an increase of 22% ( 22 % ) from 2016 , as both crude oil and conversion spreads between crude oil and diesel increased in 2017 .
the higher price resulted in increased operating expenses of $ 334 million ( excluding any impact from year- over-year volume growth ) .
gross-ton miles increased 5% ( 5 % ) , which also drove higher fuel expense .

our fuel consumption rate , computed as gallons of fuel consumed divided by gross ton-miles in thousands , improved 2% ( 2 % ) .
f0b7 free cash flow 2013 cash generated by operating activities totaled $ 7.2 billion , yielding free cash flow of $ 2.2 billion after reductions of $ 3.1 billion for cash used in investing activities and $ 2 billion in dividends , which included a 10% ( 10 % ) increase in our quarterly dividend per share from $ 0.605 to $ 0.665 declared and paid in the fourth quarter of 2017 .

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 gaap by sec regulation g and item 10 of sec regulation s-k and may not be defined and calculated by other companies in the same manner .

we believe free cash flow is important to management and investors 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 ) : .

2018 outlook f0b7 safety 2013 operating a safe railroad benefits all our constituents : our employees , customers , shareholders and the communities we serve .
we will continue using a multi-faceted approach to safety , utilizing technology , risk assessment , training and employee engagement , quality control , and targeted capital investments .

we will continue using and expanding the deployment of total safety culture and courage to care throughout our operations , which allows us to identify and implement best practices for employee and operational safety .

we will continue our efforts to increase detection of rail defects ; improve or close crossings ; and educate the public and law enforcement agencies about crossing safety through a combination of our own programs ( including risk assessment strategies ) , industry programs and local community activities across our network .
f0b7 network operations 2013 in 2018 , we will continue to align resources with customer demand , maintain an efficient network , and ensure surge capability of our assets .

f0b7 fuel prices 2013 fuel price projections for crude oil and natural gas continue to fluctuate in the current environment .
we again could see volatile fuel prices during the year , as they are sensitive to global and u.s .
domestic demand , refining capacity , geopolitical events , weather conditions and other factors .
as prices fluctuate , there will be a timing impact on earnings , as our fuel surcharge programs trail increases or decreases in fuel price by approximately two months .

lower fuel prices could have a positive impact on the economy by increasing consumer discretionary spending that potentially could increase demand for various consumer products that we transport .
alternatively , lower fuel prices could likely have a negative impact on other commodities such as coal and domestic drilling-related shipments.

 |
| table | millions                              | 2017           | 2016           | 2015
------------------------------------- | -------------- | -------------- | --------------
cash provided by operating activities | $ 7230         | $ 7525         | $ 7344
cash used in investing activities     | -3086 ( 3086 ) | -3393 ( 3393 ) | -4476 ( 4476 )
dividends paid                        | -1982 ( 1982 ) | -1879 ( 1879 ) | -2344 ( 2344 )
free cash flow                        | $ 2162         | $ 2253         | $ 524 |


| _id | dd4bb016e |
| title |  |
| text | table of contents company stock performance the following graph shows a comparison of cumulative total shareholder return , calculated on a dividend reinvested basis , for the company , the s&p 500 index , the s&p information technology index and the dow jones u.s .
technology supersector index for the five years ended september 26 , 2015 .
the graph assumes $ 100 was invested in each of the company 2019s common stock , the s&p 500 index , the s&p information technology index and the dow jones u.s .

technology supersector index as of the market close on september 24 , 2010 .
note that historic stock price performance is not necessarily indicative of future stock price performance .
* $ 100 invested on 9/25/10 in stock or index , including reinvestment of dividends .
data points are the last day of each fiscal year for the company 2019scommon stock and september 30th for indexes .
copyright a9 2015 s&p , a division of mcgraw hill financial .
all rights reserved .
copyright a9 2015 dow jones & co .

copyright a9 2015 dow jones & co .
all rights reserved .
september september september september september september .

apple inc .
| 2015 form 10-k | 21

 |
| table | | september 2010 | september 2011 | september 2012 | september 2013 | september 2014 | september 2015
-------------------------------------------- | -------------- | -------------- | -------------- | -------------- | -------------- | --------------
apple inc .                                  | $ 100          | $ 138          | $ 229          | $ 170          | $ 254          | $ 294
s&p 500 index                                | $ 100          | $ 101          | $ 132          | $ 157          | $ 188          | $ 187
s&p information technology index             | $ 100          | $ 104          | $ 137          | $ 147          | $ 190          | $ 194
dow jones u.s . technology supersector index | $ 100          | $ 103          | $ 134          | $ 141          | $ 183          | $ 183 |


| _id | dd4bb5efc |
| title |  |
| text | fair value of the tangible assets and identifiable intangible assets acquired , was $ 17.7 million .
goodwill resulted primarily from the company 2019s expectation of synergies from the integration of sigma-c 2019s technology with the company 2019s technology and operations .
virtio corporation , inc .
( virtio ) the company acquired virtio on may 15 , 2006 in an all-cash transaction .
reasons for the acquisition .

reasons for the acquisition .
the company believes that its acquisition of virtio will expand its presence in electronic system level design .
the company expects the combination of the company 2019s system studio solution with virtio 2019s virtual prototyping technology will help accelerate systems to market by giving software developers the ability to begin code development earlier than with prevailing methods .
purchase price .

purchase price .
the company paid $ 9.1 million in cash for the outstanding shares of virtio , of which $ 0.9 million was deposited with an escrow agent and which will be paid to the former stockholders of virtio pursuant to the terms of an escrow agreement .
in addition , the company had a prior investment in virtio of approximately $ 1.7 million .
the total purchase consideration consisted of: .

acquisition-related costs of $ 0.7 million consist primarily of legal , tax and accounting fees , estimated facilities closure costs and employee termination costs .
as of october 31 , 2006 , the company had paid $ 0.3 million of the acquisition-related costs .
the $ 0.4 million balance remaining at october 31 , 2006 primarily consists of professional and tax-related service fees and facilities closure costs .

under the agreement with virtio , the company has also agreed to pay up to $ 4.3 million over three years to the former stockholders based upon achievement of certain sales milestones .
this contingent consideration is considered to be additional purchase price and will be an adjustment to goodwill when and if payment is made .

additionally , the company has also agreed to pay $ 0.9 million in employee retention bonuses which will be recognized as compensation expense over the service period of the applicable employees .
assets acquired .
the company has performed a preliminary valuation and allocated the total purchase consideration to the assets and liabilities acquired , including identifiable intangible assets based on their respective fair values on the acquisition date .

the company acquired $ 2.5 million of intangible assets consisting of $ 1.9 million in existing technology , $ 0.4 million in customer relationships and $ 0.2 million in non-compete agreements to be amortized over five to seven years .
additionally , the company acquired tangible assets of $ 5.5 million and assumed liabilities of $ 3.2 million .

goodwill , representing the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the merger , was $ 6.7 million .
goodwill resulted primarily from the company 2019s expectation of synergies from the integration of virtio 2019s technology with the company 2019s technology and operations .
hpl technologies , inc .
( hpl ) the company acquired hpl on december 7 , 2005 in an all-cash transaction .
reasons for the acquisition .

reasons for the acquisition .
the company believes that the acquisition of hpl will help solidify the company 2019s position as a leading electronic design automation vendor in design for manufacturing ( dfm )

 |
| table | | ( in thousands )
-------------------------- | ----------------
cash paid                  | $ 9076
prior investment in virtio | 1664
acquisition-related costs  | 713
total purchase price       | $ 11453 |


| _id | dd4c521c6 |
| title |  |
| text | in some cases , indemnification obligations of the types described above arise under arrangements entered into by predecessor companies for which we become responsible as a result of the acquisition .
pursuant to their bylaws , pnc and its subsidiaries provide indemnification to directors , officers and , in some cases , employees and agents against certain liabilities incurred as a result of their service on behalf of or at the request of pnc and its subsidiaries .

pnc and its subsidiaries also advance on behalf of covered individuals costs incurred in connection with certain claims or proceedings , subject to written undertakings by each such individual to repay all amounts advanced if it is ultimately determined that the individual is not entitled to indemnification .

we generally are responsible for similar indemnifications and advancement obligations that companies we acquire had to their officers , directors and sometimes employees and agents at the time of acquisition .
we advanced such costs on behalf of several such individuals with respect to pending litigation or investigations during 2012 .
it is not possible for us to determine the aggregate potential exposure resulting from the obligation to provide this indemnity or to advance such costs .

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

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

the judgment and loss sharing agreements were designed to apportion financial responsibilities arising from any potential adverse judgment or negotiated settlements related to the specified litigation .
in july 2012 , visa funded $ 150 million into their litigation escrow account and reduced the conversion rate of visa b to a shares .

we continue to have an obligation to indemnify visa for judgments and settlements for the remaining specified litigation , therefore we may have additional exposure to the specified visa litigation .

recourse and repurchase obligations as discussed in note 3 loan sale and servicing activities and variable interest entities , pnc has sold commercial mortgage , residential mortgage and home equity loans directly or indirectly through securitization and loan sale transactions in which we have continuing involvement .
one form of continuing involvement includes certain recourse and loan repurchase obligations associated with the transferred assets .

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

at december 31 , 2012 and december 31 , 2011 , the unpaid principal balance outstanding of loans sold as a participant in these programs was $ 12.8 billion and $ 13.0 billion , respectively .
the potential maximum exposure under the loss share arrangements was $ 3.9 billion at december 31 , 2012 and $ 4.0 billion at december 31 , 2011 .
we maintain a reserve for estimated losses based upon our exposure .

the reserve for losses under these programs totaled $ 43 million and $ 47 million as of december 31 , 2012 and december 31 , 2011 , respectively , and is included in other liabilities on our consolidated balance sheet .
if payment is required under these programs , we would not have a contractual interest in the collateral underlying the mortgage loans on which losses occurred , although the value of the collateral is taken into account in determining our share of such losses .

our exposure and activity associated with these recourse obligations are reported in the corporate & institutional banking segment .
table 154 : analysis of commercial mortgage recourse obligations .

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

residential mortgage loans covered by these loan repurchase obligations include first and second-lien mortgage loans we have sold through agency securitizations , non-agency securitizations , and loan sale transactions .
as discussed in note 3 loans sale and servicing activities and 228 the pnc financial services group , inc .
2013 form 10-k

 |
| table | in millions                                  | 2012     | 2011
-------------------------------------------- | -------- | --------
january 1                                    | $ 47     | $ 54
reserve adjustments net                      | 4        | 1
losses 2013 loan repurchases and settlements | -8 ( 8 ) | -8 ( 8 )
december 31                                  | $ 43     | $ 47 |


| _id | dd4b8c25a |
| title |  |
| text | operating income ( loss ) by segment is summarized below: .

the increase in total operating income was driven by the following : 2022 operating income in our north america operating segment decreased $ 52.5 million to $ 408.4 million in 2016 from $ 461.0 million in 2015 primarily due to decreases in gross margin discussed above in the consolidated results of operations and $ 17.0 million in expenses related to the liquidation of the sports authority , comprised of $ 15.2 million in bad debt expense and $ 1.8 million of in-store fixture impairment .

in addition , this decrease reflects the movement of $ 11.1 million in expenses resulting from a strategic shift in headcount supporting our global business from our connected fitness operating segment to north america .
this decrease is partially offset by the increases in revenue discussed above in the consolidated results of operations .

2022 operating income in our emea operating segment increased $ 8.3 million to $ 11.4 million in 2016 from $ 3.1 million in 2015 primarily due to sales growth discussed above and reductions in incentive compensation .
this increase was offset by investments in sports marketing and infrastructure for future growth .

2022 operating income in our asia-pacific operating segment increased $ 31.9 million to $ 68.3 million in 2016 from $ 36.4 million in 2015 primarily due to sales growth discussed above and reductions in incentive compensation .
this increase was offset by investments in our direct-to-consumer business and entry into new territories .

2022 operating loss in our latin america operating segment increased $ 3.3 million to $ 33.9 million in 2016 from $ 30.6 million in 2015 primarily due to increased investments to support growth in the region and the economic challenges in brazil during the period .
this increase in operating loss was offset by sales growth discussed above and reductions in incentive compensation .

2022 operating loss in our connected fitness segment decreased $ 24.5 million to $ 36.8 million in 2016 from $ 61.3 million in 2015 primarily driven by sales growth discussed above .

seasonality historically , we have recognized a majority of our net revenues and a significant portion of our income from operations in the last two quarters of the year , driven primarily by increased sales volume of our products during the fall selling season , including our higher priced cold weather products , along with a larger proportion of higher margin direct to consumer sales .
the level of our working capital generally reflects the seasonality and growth in our business .

we generally expect inventory , accounts payable and certain accrued expenses to be higher in the second and third quarters in preparation for the fall selling season.

 |
| table | ( in thousands )       | year ended december 31 , 2016 | year ended december 31 , 2015 | year ended december 31 , $ change | year ended december 31 , % (  % ) change
---------------------- | ----------------------------- | ----------------------------- | --------------------------------- | ----------------------------------------
north america          | $ 408424                      | $ 460961                      | $ -52537 ( 52537 )                | ( 11.4 ) % (  % )
emea                   | 11420                         | 3122                          | 8298                              | 265.8
asia-pacific           | 68338                         | 36358                         | 31980                             | 88.0
latin america          | -33891 ( 33891 )              | -30593 ( 30593 )              | -3298 ( 3298 )                    | 10.8
connected fitness      | -36820 ( 36820 )              | -61301 ( 61301 )              | 24481                             | 39.9
total operating income | $ 417471                      | $ 408547                      | $ 8924                            | 2.2% ( 2.2 % ) |


| _id | dd497a156 |
| title |  |
| text | the estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed , including a reconciliation to the total purchase consideration , are as follows ( in thousands ) : .

goodwill of $ 203.8 million arising from the acquisition , included in the asia-pacific segment , was attributable to expected growth opportunities in australia and new zealand , as well as growth opportunities and operating synergies in integrated payments in our existing asia-pacific and north america markets .
goodwill associated with this acquisition is not deductible for income tax purposes .
the customer-related intangible assets have an estimated amortization period of 15 years .

the acquired technology has an estimated amortization period of 15 years .
the trade name has an estimated amortization period of 5 years .
note 3 2014 settlement processing assets and obligations funds settlement refers to the process of transferring funds for sales and credits between card issuers and merchants .
for transactions processed on our systems , we use our internal network to provide funding instructions to financial institutions that in turn fund the merchants .

we process funds settlement under two models , a sponsorship model and a direct membership model .
under the sponsorship model , we are designated as a merchant service provider by mastercard and an independent sales organization by visa , which means that member clearing banks ( 201cmember 201d ) sponsor us and require our adherence to the standards of the payment networks .
in certain markets , we have sponsorship or depository and clearing agreements with financial institution sponsors .

these agreements allow us to route transactions under the members 2019 control and identification numbers to clear credit card transactions through mastercard and visa .
in this model , the standards of the payment networks restrict us from performing funds settlement or accessing merchant settlement funds , and , instead , require that these funds be in the possession of the member until the merchant is funded .

under the direct membership model , we are members in various payment networks , allowing us to process and fund transactions without third-party sponsorship .
in this model , we route and clear transactions directly through the card brand 2019s network and are not restricted from performing funds settlement .
otherwise , we process these transactions similarly to how we process transactions in the sponsorship model .

we are required to adhere to the standards of the payment networks in which we are direct members .
we maintain relationships with financial institutions , which may also serve as our member sponsors for other card brands or in other markets , to assist with funds settlement .
timing differences , interchange fees , merchant reserves and exception items cause differences between the amount received from the payment networks and the amount funded to the merchants .

these intermediary balances arising in our settlement process for direct merchants are reflected as settlement processing assets and obligations on our consolidated balance sheets .
settlement processing assets and obligations include the components outlined below : 2022 interchange reimbursement .
our receivable from merchants for the portion of the discount fee related to reimbursement of the interchange fee .
global payments inc .
| 2017 form 10-k annual report 2013 77

 |
| table | cash                                       | $ 45826
------------------------------------------ | ----------------
customer-related intangible assets         | 42721
acquired technology                        | 27954
trade name                                 | 2901
other assets                               | 2337
deferred income tax assets ( liabilities ) | -9788 ( 9788 )
other liabilities                          | -49797 ( 49797 )
total identifiable net assets              | 62154
goodwill                                   | 203828
total purchase consideration               | $ 265982 |


| _id | dd4c1d2be |
| title |  |
| text | table of contents certain union-represented american mainline employees are covered by agreements that are not currently amendable .
until those agreements become amendable , negotiations for jcbas will be conducted outside the traditional rla bargaining process described above , and , in the meantime , no self-help will be permissible .
the piedmont mechanics and stock clerks and the psa dispatchers have agreements that are now amendable and are engaged in traditional rla negotiations .

none of the unions representing our employees presently may lawfully engage in concerted refusals to work , such as strikes , slow-downs , sick-outs or other similar activity , against us .
nonetheless , there is a risk that disgruntled employees , either with or without union involvement , could engage in one or more concerted refusals to work that could individually or collectively harm the operation of our airline and impair our financial performance .
for more discussion , see part i , item 1a .

for more discussion , see part i , item 1a .
risk factors 2013 201cunion disputes , employee strikes and other labor-related disruptions may adversely affect our operations . 201d aircraft fuel our operations and financial results are significantly affected by the availability and price of jet fuel .

based on our 2016 forecasted mainline and regional fuel consumption , we estimate that , as of december 31 , 2015 , a one cent per gallon increase in aviation fuel price would increase our 2016 annual fuel expense by $ 44 million .
the following table shows annual aircraft fuel consumption and costs , including taxes , for our mainline operations for 2015 and 2014 ( gallons and aircraft fuel expense in millions ) .

year gallons average price per gallon aircraft fuel expense percent of total mainline operating expenses .

total fuel expenses for our wholly-owned and third-party regional carriers operating under capacity purchase agreements of american were $ 1.2 billion and $ 2.0 billion for the years ended december 31 , 2015 and 2014 , respectively .
as of december 31 , 2015 , we did not have any fuel hedging contracts outstanding to hedge our fuel consumption .

as such , and assuming we do not enter into any future transactions to hedge our fuel consumption , we will continue to be fully exposed to fluctuations in fuel prices .
our current policy is not to enter into transactions to hedge our fuel consumption , although we review that policy from time to time based on market conditions and other factors .
fuel prices have fluctuated substantially over the past several years .
we cannot predict the future availability , price volatility or cost of aircraft fuel .

natural disasters , political disruptions or wars involving oil-producing countries , changes in fuel-related governmental policy , the strength of the u.s .
dollar against foreign currencies , changes in access to petroleum product pipelines and terminals , speculation in the energy futures markets , changes in aircraft fuel production capacity , environmental concerns and other unpredictable events may result in fuel supply shortages , additional fuel price volatility and cost increases in the future .

see part i , item 1a .
risk factors 2013 201cour business is dependent on the price and availability of aircraft fuel .

continued periods of high volatility in fuel costs , increased fuel prices and significant disruptions in the supply of aircraft fuel could have a significant negative impact on our operating results and liquidity . 201d insurance we maintain insurance of the types that we believe are customary in the airline industry , including insurance for public liability , passenger liability , property damage , and all-risk coverage for damage to our aircraft .

principal coverage includes liability for injury to members of the public , including passengers , damage to

 |
| table | year | gallons | average price pergallon | aircraft fuel expense | percent of total mainline operating expenses
---- | ------- | ----------------------- | --------------------- | --------------------------------------------
2015 | 3611    | $ 1.72                  | $ 6226                | 21.6% ( 21.6 % )
2014 | 3644    | 2.91                    | 10592                 | 33.2% ( 33.2 % ) |


| _id | dd4c53260 |
| title |  |
| text | american tower corporation and subsidiaries notes to consolidated financial statements brazil acquisition 2014on march 1 , 2011 , the company acquired 100% ( 100 % ) of the outstanding shares of a company that owned 627 communications sites in brazil for $ 553.2 million , which was subsequently increased to $ 585.4 million as a result of acquiring 39 additional communications sites during the year ended december 31 , 2011 .

during the year ended december 31 , 2012 , the purchase price was reduced to $ 585.3 million after certain post- closing purchase price adjustments .
the allocation of the purchase price was finalized during the year ended december 31 , 2012 .

the following table summarizes the allocation of the aggregate purchase consideration paid and the amounts of assets acquired and liabilities assumed based upon their estimated fair value at the date of acquisition ( in thousands ) : final purchase price allocation ( 1 ) preliminary purchase price allocation ( 2 ) .

( 1 ) reflected in the consolidated balance sheets herein .
( 2 ) reflected in the consolidated balance sheets in the form 10-k for the year ended december 31 , 2011 .
( 3 ) includes approximately $ 7.7 million of accounts receivable , which approximates the value due to the company under certain contractual arrangements .
( 4 ) consists of customer-related intangibles of approximately $ 250.0 million and network location intangibles of approximately $ 118.0 million .

the customer-related intangibles and network location intangibles are being amortized on a straight-line basis over periods of up to 20 years .
( 5 ) other long-term liabilities includes contingent amounts of approximately $ 30.0 million primarily related to uncertain tax positions related to the acquisition and non-current assets includes $ 24.0 million of the related indemnification asset .
( 6 ) the company expects that the goodwill recorded will be deductible for tax purposes .

the goodwill was allocated to the company 2019s international rental and management segment .
brazil 2014vivo acquisition 2014on march 30 , 2012 , the company entered into a definitive agreement to purchase up to 1500 towers from vivo s.a .
( 201cvivo 201d ) .
pursuant to the agreement , on march 30 , 2012 , the company purchased 800 communications sites for an aggregate purchase price of $ 151.7 million .

on june 30 , 2012 , the company purchased the remaining 700 communications sites for an aggregate purchase price of $ 126.3 million , subject to post-closing adjustments .
in addition , the company and vivo amended the asset purchase agreement to allow for the acquisition of up to an additional 300 communications sites by the company , subject to regulatory approval .

on august 31 , 2012 , the company purchased an additional 192 communications sites from vivo for an aggregate purchase price of $ 32.7 million , subject to post-closing adjustments.

 |
| table | | final purchase price allocation ( 1 ) | preliminary purchase price allocation ( 2 )
----------------------------------- | ------------------------------------- | -------------------------------------------
current assets ( 3 )                | $ 9922                                | $ 9922
non-current assets                  | 71529                                 | 98047
property and equipment              | 83539                                 | 86062
intangible assets ( 4 )             | 368000                                | 288000
current liabilities                 | -5536 ( 5536 )                        | -5536 ( 5536 )
other non-current liabilities ( 5 ) | -38519 ( 38519 )                      | -38519 ( 38519 )
fair value of net assets acquired   | $ 488935                              | $ 437976
goodwill ( 6 )                      | 96395                                 | 147459 |


| _id | dd4c4d522 |
| title |  |
| text | page 24 of 100 financial condition , liquidity and capital resources cash flows and capital expenditures liquidity our primary sources of liquidity are cash provided by operating activities and external committed borrowings .

we believe that cash flows from operations and cash provided by short-term and committed revolver borrowings , when necessary , will be sufficient to meet our ongoing operating requirements , scheduled principal and interest payments on debt , dividend payments and anticipated capital expenditures .
the following summarizes our cash flows: .

cash flows provided by operating activities in 2010 included a use of $ 250 million related to a change in accounting for our accounts receivable securitization program .
at december 31 , 2009 , the amount of accounts receivable sold under the securitization program was $ 250 million and , under the previous accounting guidance , this amount was presented in the consolidated balance sheet as a reduction of accounts receivable as a result of the true sale of receivables .

however , upon the company 2019s adoption of new prospective accounting guidance effective january 1 , 2010 , the amount of accounts receivable sold is not reflected as a reduction of accounts receivable on the balance sheet at december 31 , 2010 , resulting in a $ 250 million increase in accounts receivable and a corresponding working capital outflow from operating activities in the statement of cash flows .
there were no accounts receivable sold under the securitization program at december 31 , 2010 .

excluding the $ 250 million impact of additional accounts receivable from the change in accounting discussed above , cash flows provided by operations were $ 765.2 million in 2010 compared to $ 559.7 million in 2009 and $ 627.6 million in 2008 .
the significant improvement in 2010 was primarily due to higher earnings and favorable working capital changes , partially offset by higher pension funding .

lower operating cash flows in 2009 compared to 2008 were the result of working capital increases and higher pension funding and income tax payments during the year , offset by the payment of approximately $ 70 million to a customer for a legal settlement .
management performance measures the following financial measurements are on a non-u.s .
gaap basis and should be considered in connection with the consolidated financial statements within item 8 of this report .
non-u.s .

non-u.s .
gaap measures should not be considered in isolation and should not be considered superior to , or a substitute for , financial measures calculated in accordance with u.s .
gaap .
a presentation of earnings in accordance with u.s .
gaap is available in item 8 of this report .

gaap is available in item 8 of this report .
free cash flow management internally uses a free cash flow measure : ( 1 ) to evaluate the company 2019s operating results , ( 2 ) to plan stock buyback levels , ( 3 ) to evaluate strategic investments and ( 4 ) to evaluate the company 2019s ability to incur and service debt .
free cash flow is not a defined term under u.s .
gaap , and it should not be inferred that the entire free cash flow amount is available for discretionary expenditures .

the company defines free cash flow as cash flow from operating activities less additions to property , plant and equipment ( capital spending ) .
free cash flow is typically derived directly from the company 2019s cash flow statements ; however , it may be adjusted for items that affect comparability between periods.

 |
| table | ( $ in millions )                                                                         | 2010             | 2009             | 2008
----------------------------------------------------------------------------------------- | ---------------- | ---------------- | ----------------
cash flows provided by ( used in ) operating activities including discontinued operations | $ 515.2          | $ 559.7          | $ 627.6
cash flows provided by ( used in ) investing activities including discontinued operations | -110.2 ( 110.2 ) | -581.4 ( 581.4 ) | -418.0 ( 418.0 )
cash flows provided by ( used in ) financing activities                                   | -459.6 ( 459.6 ) | 100.8            | -205.5 ( 205.5 ) |


| _id | dd4bad842 |
| title |  |
| text | entergy texas , inc .
and subsidiaries management 2019s financial discussion and analysis gross operating revenues , fuel and purchased power expenses , and other regulatory charges gross operating revenues increased primarily due to the base rate increases and the volume/weather effect , as discussed above .

fuel and purchased power expenses increased primarily due to an increase in demand coupled with an increase in deferred fuel expense as a result of lower fuel refunds in 2011 versus 2010 , partially offset by a decrease in the average market price of natural gas .
other regulatory charges decreased primarily due to the distribution in the first quarter 2011 of $ 17.4 million to customers of the 2007 rough production cost equalization remedy receipts .

see note 2 to the financial statements for further discussion of the rough production cost equalization proceedings .
2010 compared to 2009 net revenue consists of operating revenues net of : 1 ) fuel , fuel-related expenses , and gas purchased for resale , 2 ) purchased power expenses , and 3 ) other regulatory charges ( credits ) .
following is an analysis of the change in net revenue comparing 2010 to 2009 .
amount ( in millions ) .

the net wholesale revenue variance is primarily due to increased sales to municipal and co-op customers due to the addition of new contracts .
the volume/weather variance is primarily due to increased electricity usage primarily in the residential and commercial sectors , resulting from a 1.5% ( 1.5 % ) increase in customers , coupled with the effect of more favorable weather on residential sales .
billed electricity usage increased a total of 777 gwh , or 5% ( 5 % ) .

the rough production cost equalization variance is due to an additional $ 18.6 million allocation recorded in the second quarter of 2009 for 2007 rough production cost equalization receipts ordered by the puct to texas retail customers over what was originally allocated to entergy texas prior to the jurisdictional separation of entergy gulf states , inc .
into entergy gulf states louisiana and entergy texas , effective december 2007 , as discussed in note 2 to the financial statements .

the retail electric price variance is primarily due to rate actions , including an annual base rate increase of $ 59 million beginning august 2010 as a result of the settlement of the december 2009 rate case .
see note 2 to the financial statements for further discussion of the rate case settlement .
the securitization transition charge variance is due to the issuance of securitization bonds .

in november 2009 , entergy texas restoration funding , llc , a company wholly-owned and consolidated by entergy texas , issued securitization bonds and with the proceeds purchased from entergy texas the transition property , which is the right to recover from customers through a transition charge amounts sufficient to service the securitization bonds .
the securitization transition charge is offset with a corresponding increase in interest on long-term debt with no impact on net income .

see note 5 to the financial statements for further discussion of the securitization bond issuance.

 |
| table | | amount ( in millions )
---------------------------------- | ----------------------
2009 net revenue                   | $ 485.1
net wholesale revenue              | 27.7
volume/weather                     | 27.2
rough production cost equalization | 18.6
retail electric price              | 16.3
securitization transition charge   | 15.3
purchased power capacity           | -44.3 ( 44.3 )
other                              | -5.7 ( 5.7 )
2010 net revenue                   | $ 540.2 |


| _id | dd4b92b32 |
| title |  |
| text | the black-scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable .
in addition , option valuation models require the input of highly subjective assumptions , including the expected stock price volatility .

because the company 2019s employee stock options have characteristics significantly different from those of traded options , and because changes in the subjective input assumptions can materially affect the fair value estimate , in management 2019s opinion , the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options .
the fair value of the rsus was determined based on the market value at the date of grant .

the total fair value of awards vested during 2008 , 2007 , and 2006 was $ 35384 , $ 17840 , and $ 9413 , respectively .
the total stock based compensation expense calculated using the black-scholes option valuation model in 2008 , 2007 , and 2006 was $ 38872 , $ 22164 , and $ 11913 , respectively.the aggregate intrinsic values of options outstanding and exercisable at december 27 , 2008 were $ 8.2 million and $ 8.2 million , respectively .

the aggregate intrinsic value of options exercised during the year ended december 27 , 2008 was $ 0.6 million .
aggregate intrinsic value represents the positive difference between the company 2019s closing stock price on the last trading day of the fiscal period , which was $ 19.39 on december 27 , 2008 , and the exercise price multiplied by the number of options exercised .

as of december 27 , 2008 , there was $ 141.7 million of total unrecognized compensation cost related to unvested share-based compensation awards granted to employees under the stock compensation plans .
that cost is expected to be recognized over a period of five years .
employee stock purchase plan the shareholders also adopted an employee stock purchase plan ( espp ) .
up to 2000000 shares of common stock have been reserved for the espp .

shares will be offered to employees at a price equal to the lesser of 85% ( 85 % ) of the fair market value of the stock on the date of purchase or 85% ( 85 % ) of the fair market value on the enrollment date .
the espp is intended to qualify as an 201cemployee stock purchase plan 201d under section 423 of the internal revenue code .

during 2008 , 2007 , and 2006 , 362902 , 120230 , and 124693 shares , respectively were purchased under the plan for a total purchase price of $ 8782 , $ 5730 , and $ 3569 , respectively .
at december 27 , 2008 , approximately 663679 shares were available for future issuance .
10 .
earnings per share the following table sets forth the computation of basic and diluted net income per share:

 |
| table | | 2008             | 2007             | 2006
---------------------------------------------- | ---------------- | ---------------- | ----------------
weighted average fair value of options granted | $ 18.47          | $ 33.81          | $ 20.01
expected volatility                            | 0.3845           | 0.3677           | 0.3534
dividend yield                                 | 3.75% ( 3.75 % ) | 0.76% ( 0.76 % ) | 1.00% ( 1.00 % )
expected life of options in years              | 6.0              | 6.0              | 6.3
risk-free interest rate                        | 2% ( 2 % )       | 4% ( 4 % )       | 5% ( 5 % ) |


| _id | dd4b981e0 |
| title |  |
| text | until the hedged transaction is recognized in earnings .
changes in the fair value of the derivatives that are attributable to the ineffective portion of the hedges , or of derivatives that are not considered to be highly effective hedges , if any , are immediately recognized in earnings .
the aggregate notional amount of our outstanding foreign currency hedges at december 31 , 2012 and 2011 was $ 1.3 billion and $ 1.7 billion .

the aggregate notional amount of our outstanding interest rate swaps at december 31 , 2012 and 2011 was $ 503 million and $ 450 million .
derivative instruments did not have a material impact on net earnings and comprehensive income during 2012 , 2011 , and 2010 .
substantially all of our derivatives are designated for hedge accounting .
see note 15 for more information on the fair value measurements related to our derivative instruments .

stock-based compensation 2013 compensation cost related to all share-based payments including stock options and restricted stock units is measured at the grant date based on the estimated fair value of the award .
we generally recognize the compensation cost ratably over a three-year vesting period .
income taxes 2013 we periodically assess our tax filing exposures related to periods that are open to examination .

based on the latest available information , we evaluate our tax positions to determine whether the position will more likely than not be sustained upon examination by the internal revenue service ( irs ) .
if we cannot reach a more-likely-than-not determination , no benefit is recorded .
if we determine that the tax position is more likely than not to be sustained , we record the largest amount of benefit that is more likely than not to be realized when the tax position is settled .

we record interest and penalties related to income taxes as a component of income tax expense on our statements of earnings .
interest and penalties are not material .
accumulated other comprehensive loss 2013 changes in the balance of accumulated other comprehensive loss , net of income taxes , consisted of the following ( in millions ) : postretirement benefit plan adjustments other , net accumulated comprehensive .

the postretirement benefit plan adjustments are shown net of tax benefits at december 31 , 2012 , 2011 , and 2010 of $ 7.4 billion , $ 6.1 billion , and $ 4.9 billion .
these tax benefits include amounts recognized on our income tax returns as current deductions and deferred income taxes , which will be recognized on our tax returns in future years .
see note 7 and note 9 for more information on our income taxes and postretirement plans .

recent accounting pronouncements 2013 effective january 1 , 2012 , we retrospectively adopted new guidance issued by the financial accounting standards board by presenting total comprehensive income and the components of net income and other comprehensive loss in two separate but consecutive statements .

the adoption of this guidance resulted only in a change in how we present other comprehensive loss in our consolidated financial statements and did not have any impact on our results of operations , financial position , or cash flows.

 |
| table | | postretirement benefit plan adjustments | other net    | accumulated other comprehensive loss
----------------------------------- | --------------------------------------- | ------------ | ------------------------------------
balance at january 1 2010           | $ -8564 ( 8564 )                        | $ -31 ( 31 ) | $ -8595 ( 8595 )
other comprehensive ( loss ) income | -430 ( 430 )                            | 15           | -415 ( 415 )
balance at december 31 2010         | -8994 ( 8994 )                          | -16 ( 16 )   | -9010 ( 9010 )
other comprehensive loss            | -2192 ( 2192 )                          | -55 ( 55 )   | -2247 ( 2247 )
balance at december 31 2011         | -11186 ( 11186 )                        | -71 ( 71 )   | -11257 ( 11257 )
other comprehensive ( loss ) income | -2346 ( 2346 )                          | 110          | -2236 ( 2236 )
balance at december 31 2012         | $ -13532 ( 13532 )                      | $ 39         | $ -13493 ( 13493 ) |


| _id | dd4c1107c |
| title |  |
| text | management 2019s discussion and analysis 144 jpmorgan chase & co./2010 annual report compared with $ 57 million for 2009 .
decreases in cio and mort- gage banking var for 2010 were again driven by the decline in market volatility and position changes .
the decline in mortgage banking var at december 31 , 2010 , reflects management 2019s deci- sion to reduce risk given market volatility at the time .

the firm 2019s average ib and other var diversification benefit was $ 59 million or 37% ( 37 % ) of the sum for 2010 , compared with $ 82 million or 28% ( 28 % ) of the sum for 2009 .
the firm experienced an increase in the diversification benefit in 2010 as positions changed and correla- tions decreased .
in general , over the course of the year , var expo- sure can vary significantly as positions change , market volatility fluctuates and diversification benefits change .

var back-testing the firm conducts daily back-testing of var against its market risk- related revenue , which is defined as the change in value of : princi- pal transactions revenue for ib and cio ( less private equity gains/losses and revenue from longer-term cio investments ) ; trading-related net interest income for ib , cio and mortgage bank- ing ; ib brokerage commissions , underwriting fees or other revenue ; revenue from syndicated lending facilities that the firm intends to distribute ; and

that the firm intends to distribute ; and mortgage fees and related income for the firm 2019s mortgage pipeline and warehouse loans , msrs , and all related hedges .

daily firmwide market risk 2013related revenue excludes gains and losses from dva .
the following histogram illustrates the daily market risk 2013related gains and losses for ib , cio and mortgage banking positions for 2010 .
the chart shows that the firm posted market risk 2013related gains on 248 out of 261 days in this period , with 12 days exceeding $ 210 million .

the inset graph looks at those days on which the firm experienced losses and depicts the amount by which the 95% ( 95 % ) confidence-level var ex- ceeded the actual loss on each of those days .
during 2010 , losses were sustained on 13 days , none of which exceeded the var measure .

daily ib and other market risk-related gains and losses ( 95% ( 95 % ) confidence-level var ) year ended december 31 , 2010 average daily revenue : $ 87 million $ in millions $ in millions daily ib and other var less market risk-related losses the following table provides information about the gross sensitivity of dva to a one-basis-point increase in jpmorgan chase 2019s credit spreads .

this sensitivity represents the impact from a one-basis-point parallel shift in jpmorgan chase 2019s entire credit curve .
as credit curves do not typically move in a parallel fashion , the sensitivity multiplied by the change in spreads at a single maturity point may not be representative of the actual revenue recognized .
debit valuation adjustment sensitivity 1 basis point increase in december 31 , ( in millions ) jpmorgan chase 2019s credit spread .

 |
| table | december 31 ( in millions ) | 1 basis point increase in jpmorgan chase 2019s credit spread
--------------------------- | ------------------------------------------------------------
2010                        | $ 35
2009                        | $ 39 |


| _id | dd4b962d2 |
| title |  |
| text | recognition of deferred revenue related to sanofi-aventis 2019 $ 85.0 million up-front payment decreased in 2010 compared to 2009 due to the november 2009 amendments to expand and extend the companies 2019 antibody collaboration .

in connection with the november 2009 amendment of the discovery agreement , sanofi-aventis is funding up to $ 30 million of agreed-upon costs incurred by us to expand our manufacturing capacity at our rensselaer , new york facilities , of which $ 23.4 million was received or receivable from sanofi-aventis as of december 31 , 2010 .

revenue related to these payments for such funding from sanofi-aventis is deferred and recognized as collaboration revenue prospectively over the related performance period in conjunction with the recognition of the original $ 85.0 million up-front payment .
as of december 31 , 2010 , $ 79.8 million of the sanofi-aventis payments was deferred and will be recognized as revenue in future periods .
in august 2008 , we entered into a separate velocigene ae agreement with sanofi-aventis .

in 2010 and 2009 , we recognized $ 1.6 million and $ 2.7 million , respectively , in revenue related to this agreement .

bayer healthcare collaboration revenue the collaboration revenue we earned from bayer healthcare , as detailed below , consisted of cost sharing of regeneron vegf trap-eye development expenses , substantive performance milestone payments , and recognition of revenue related to a non-refundable $ 75.0 million up-front payment received in october 2006 and a $ 20.0 million milestone payment received in august 2007 ( which , for the purpose of revenue recognition , was not considered substantive ) .

years ended bayer healthcare collaboration revenue december 31 .

cost-sharing of our vegf trap-eye development expenses with bayer healthcare increased in 2010 compared to 2009 due to higher internal development activities and higher clinical development costs in connection with our phase 3 copernicus trial in crvo .
in the fourth quarter of 2010 , we earned two $ 10.0 million substantive milestone payments from bayer healthcare for achieving positive 52-week results in the view 1 study and positive 6-month results in the copernicus study .

in july 2009 , we earned a $ 20.0 million substantive performance milestone payment from bayer healthcare in connection with the dosing of the first patient in the copernicus study .
in connection with the recognition of deferred revenue related to the $ 75.0 million up-front payment and $ 20.0 million milestone payment received in august 2007 , as of december 31 , 2010 , $ 47.0 million of these payments was deferred and will be recognized as revenue in future periods .

technology licensing revenue in connection with our velocimmune ae license agreements with astrazeneca and astellas , each of the $ 20.0 million annual , non-refundable payments were deferred upon receipt and recognized as revenue ratably over approximately the ensuing year of each agreement .
in both 2010 and 2009 , we recognized $ 40.0 million of technology licensing revenue related to these agreements .

in addition , in connection with the amendment and extension of our license agreement with astellas , in august 2010 , we received a $ 165.0 million up-front payment , which was deferred upon receipt and will be recognized as revenue ratably over a seven-year period beginning in mid-2011 .
as of december 31 , 2010 , $ 176.6 million of these technology licensing payments was deferred and will be recognized as revenue in future periods .

net product sales in 2010 and 2009 , we recognized as revenue $ 25.3 million and $ 18.4 million , respectively , of arcalyst ae net product sales for which both the right of return no longer existed and rebates could be reasonably estimated .

the company had limited historical return experience for arcalyst ae beginning with initial sales in 2008 through the end of 2009 ; therefore , arcalyst ae net product sales were deferred until the right of return no longer existed and rebates could be reasonably estimated .
effective in the first quarter of 2010 , the company determined that it had

 |
| table | bayer healthcare collaboration revenue                                           | bayer healthcare collaboration revenue |
-------------------------------------------------------------------------------- | -------------------------------------- | ------
( in millions )                                                                  | 2010                                   | 2009
cost-sharing of regeneron vegf trap-eye development expenses                     | $ 45.5                                 | $ 37.4
substantive performance milestone payments                                       | 20.0                                   | 20.0
recognition of deferred revenue related to up-front and other milestone payments | 9.9                                    | 9.9
total bayer healthcare collaboration revenue                                     | $ 75.4                                 | $ 67.3 |


| _id | dd4bab1f0 |
| title |  |
| text | connection with this matter could have a material adverse impact on our consolidated cash flows and results of operations .
item 4 .
submission of matters to a vote of security holders on november 14 , 2008 , our stockholders voted to approve our merger with allied waste industries , inc .
at a special meeting held for that purpose .
results of the voting at that meeting are as follows: .

( 1 ) to issue shares of republic common stock and other securities convertible into or exercisable for shares of republic common stock , contemplated by the agreement and plan of merger , dated as of june 22 , 2008 , as amended july 31 , 2008 , among republic , rs merger wedge , inc , a wholly owned subsidiary of republic , formed for the purpose of the merger , and allied waste industries , inc .
.
.

.
.
141728743 297976 156165 ( 2 ) to adjourn the special meeting , if necessary , to solicit additional proxies in favor of the foregoing proposal .
.
.
.
.
.
.
.
.
.
.
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134081897 8068370 32617 %%transmsg*** transmitting job : p14076 pcn : 035000000 ***%%pcmsg|33 |00022|yes|no|02/28/2009 17:08|0|0|page is valid , no graphics -- color : d|

 |
| table | | affirmative | against | abstentions
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | ------- | -----------
( 1 ) to issue shares of republic common stock and other securities convertible into or exercisable for shares of republic common stock contemplated by the agreement and plan of merger dated as of june 22 2008 as amended july 31 2008 among republic rs merger wedge inc a wholly owned subsidiary of republic formed for the purpose of the merger and allied waste industries inc . | 141728743   | 297976  | 156165
( 2 ) to adjourn the special meeting if necessary to solicit additional proxies in favor of the foregoing proposal                                                                                | 134081897   | 8068370 | 32617 |


| _id | dd4c397b6 |
| title |  |
| text | we are continuing to invest in people and infrastructure to grow our presence in lines of businesses globally where we see an opportunity for ace to grow market share at reasonable terms .
we are also continuing to invest in our enterprise risk management capability , our systems and data environment , and our research and development capabilities .

critical accounting estimates our consolidated financial statements include amounts that , either by their nature or due to requirements of accounting princi- ples generally accepted in the u.s .
( gaap ) , are determined using best estimates and assumptions .
while we believe that the amounts included in our consolidated financial statements reflect our best judgment , actual amounts could ultimately materi- ally differ from those currently presented .

we believe the items that require the most subjective and complex estimates are : 2022 unpaid loss and loss expense reserves , including long-tail asbestos and environmental ( a&e ) reserves ; 2022 future policy benefits reserves ; 2022 valuation of value of business acquired ( voba ) and amortization of deferred policy acquisition costs and voba ; 2022 the assessment of risk transfer for certain structured insurance and reinsurance contracts ; 2022 reinsurance recoverable , including a provision for

recoverable , including a provision for uncollectible reinsurance ; 2022 impairments to the carrying value of our investment portfolio ; 2022 the valuation of deferred tax assets ; 2022 the valuation of derivative instruments related to guaranteed minimum income benefits ( gmib ) ; and 2022 the valuation of goodwill .

we believe our accounting policies for these items are of critical importance to our consolidated financial statements .

the following discussion provides more information regarding the estimates and assumptions required to arrive at these amounts and should be read in conjunction with the sections entitled : prior period development , asbestos and environmental and other run-off liabilities , reinsurance recoverable on ceded reinsurance , investments , net realized gains ( losses ) , and other income and expense items .

unpaid losses and loss expenses as an insurance and reinsurance company , we are required , by applicable laws and regulations and gaap , to establish loss and loss expense reserves for the estimated unpaid portion of the ultimate liability for losses and loss expenses under the terms of our policies and agreements with our insured and reinsured customers .

the estimate of the liabilities includes provisions for claims that have been reported but unpaid at the balance sheet date ( case reserves ) and for future obligations from claims that have been incurred but not reported ( ibnr ) at the balance sheet date ( ibnr may also include a provision for additional devel- opment on reported claims in instances where the case reserve is viewed to be potentially insufficient ) .

the reserves provide for liabilities that exist for the company as of the balance sheet date .
the loss reserve also includes an estimate of expenses associated with processing and settling these unpaid claims ( loss expenses ) .
at december 31 , 2008 , our gross unpaid loss and loss expense reserves were $ 37.2 billion and our net unpaid loss and loss expense reserves were $ 24.2 billion .

with the exception of certain structured settlements , for which the timing and amount of future claim payments are reliably determi- nable , our loss reserves are not discounted for the time value of money .
in connection with such structured settlements , we carry reserves of $ 106 million ( net of discount ) .
the table below presents a roll-forward of our unpaid losses and loss expenses for the indicated periods .
( in millions of u.s .
dollars ) losses reinsurance recoverable net losses .

 |
| table | ( in millions of u.s . dollars )                 | gross losses   | reinsurance recoverable | net losses
------------------------------------------------ | -------------- | ----------------------- | --------------
balance at december 31 2006                      | $ 35517        | $ 13509                 | $ 22008
losses and loss expenses incurred                | 10831          | 3480                    | 7351
losses and loss expenses paid                    | -9516 ( 9516 ) | -3582 ( 3582 )          | -5934 ( 5934 )
other ( including foreign exchange revaluation ) | 280            | 113                     | 167
balance at december 31 2007                      | 37112          | 13520                   | 23592
losses and loss expenses incurred                | 10944          | 3341                    | 7603
losses and loss expenses paid                    | -9899 ( 9899 ) | -3572 ( 3572 )          | -6327 ( 6327 )
other ( including foreign exchange revaluation ) | -1367 ( 1367 ) | -387 ( 387 )            | -980 ( 980 )
losses and loss expenses acquired                | 386            | 33                      | 353
balance at december 31 2008                      | $ 37176        | $ 12935                 | $ 24241 |


| _id | dd4986424 |
| title |  |
| text | mastercard incorporated notes to consolidated financial statements 2014 ( continued ) ( in thousands , except percent and per share data ) on june 24 , 2008 , mastercard entered into a settlement agreement ( the 201camerican express settlement 201d ) with american express company ( 201camerican express 201d ) relating to the u.s .
federal antitrust litigation between mastercard and american express .
the american express settlement ended all existing litigation between mastercard and american express .

under the terms of the american express settlement , mastercard is obligated to make 12 quarterly payments of up to $ 150000 per quarter beginning in the third quarter of 2008 .
mastercard 2019s maximum nominal payments will total $ 1800000 .
the amount of each quarterly payment is contingent on the performance of american express 2019s u.s .
global network services business .
the quarterly payments will be in an amount equal to 15% ( 15 % ) of american express 2019s u.s .

global network services billings during the quarter , up to a maximum of $ 150000 per quarter .
if , however , the payment for any quarter is less than $ 150000 , the maximum payment for subsequent quarters will be increased by the difference between $ 150000 and the lesser amount that was paid in any quarter in which there was a shortfall .
mastercard assumes american express will achieve these financial hurdles .

mastercard recorded the present value of $ 1800000 , at a 5.75% ( 5.75 % ) discount rate , or $ 1649345 for the year ended december 31 , 2008 .
in 2003 , mastercard entered into a settlement agreement ( the 201cu.s .
merchant lawsuit settlement 201d ) related to the u.s .
merchant lawsuit described under the caption 201cu.s .
merchant and consumer litigations 201d in note 20 ( legal and regulatory proceedings ) and contract disputes with certain customers .
under the terms of the u.s .

under the terms of the u.s .
merchant lawsuit settlement , the company was required to pay $ 125000 in 2003 and $ 100000 annually each december from 2004 through 2012 .
in addition , in 2003 , several other lawsuits were initiated by merchants who opted not to participate in the plaintiff class in the u.s .
merchant lawsuit .
the 201copt-out 201d merchant lawsuits were not covered by the terms of the u.s .
merchant lawsuit settlement and all have been individually settled .

we recorded liabilities for certain litigation settlements in prior periods .
total liabilities for litigation settlements changed from december 31 , 2006 , as follows: .

see note 20 ( legal and regulatory proceedings ) for additional discussion regarding the company 2019s legal proceedings.

 |
| table | balance as of december 31 2006                          | $ 476915
------------------------------------------------------- | ------------------
provision for litigation settlements ( note 20 )        | 3400
interest accretion on u.s . merchant lawsuit            | 38046
payments                                                | -113925 ( 113925 )
balance as of december 31 2007                          | 404436
provision for discover settlement                       | 862500
provision for american express settlement               | 1649345
provision for other litigation settlements              | 6000
interest accretion on u.s . merchant lawsuit settlement | 32879
interest accretion on american express settlement       | 44300
payments on american express settlement                 | -300000 ( 300000 )
payments on discover settlement                         | -862500 ( 862500 )
payment on u.s . merchant lawsuit settlement            | -100000 ( 100000 )
other payments and accretion                            | -662 ( 662 )
balance as of december 31 2008                          | $ 1736298 |


| _id | dd4b8f0b8 |
| title |  |
| text | performance based restricted stock awards is generally recognized using the accelerated amortization method with each vesting tranche valued as a separate award , with a separate vesting date , consistent with the estimated value of the award at each period end .
additionally , compensation expense is adjusted for actual forfeitures for all awards in the period that the award was forfeited .

compensation expense for stock options is generally recognized on a straight-line basis over the requisite service period .
maa presents stock compensation expense in the consolidated statements of operations in "general and administrative expenses" .
effective january 1 , 2017 , the company adopted asu 2016-09 , improvements to employee share- based payment accounting , which allows employers to make a policy election to account for forfeitures as they occur .

the company elected this option using the modified retrospective transition method , with a cumulative effect adjustment to retained earnings , and there was no material effect on the consolidated financial position or results of operations taken as a whole resulting from the reversal of previously estimated forfeitures .
total compensation expense under the stock plan was approximately $ 10.8 million , $ 12.2 million and $ 6.9 million for the years ended december 31 , 2017 , 2016 and 2015 , respectively .

of these amounts , total compensation expense capitalized was approximately $ 0.2 million , $ 0.7 million and $ 0.7 million for the years ended december 31 , 2017 , 2016 and 2015 , respectively .
as of december 31 , 2017 , the total unrecognized compensation expense was approximately $ 14.1 million .
this cost is expected to be recognized over the remaining weighted average period of 1.2 years .

total cash paid for the settlement of plan shares totaled $ 4.8 million , $ 2.0 million and $ 1.0 million for the years ended december 31 , 2017 , 2016 and 2015 , respectively .
information concerning grants under the stock plan is listed below .
restricted stock in general , restricted stock is earned based on either a service condition , performance condition , or market condition , or a combination thereof , and generally vests ratably over a period from 1 year to 5 years .

service based awards are earned when the employee remains employed over the requisite service period and are valued on the grant date based upon the market price of maa common stock on the date of grant .
market based awards are earned when maa reaches a specified stock price or specified return on the stock price ( price appreciation plus dividends ) and are valued on the grant date using a monte carlo simulation .

performance based awards are earned when maa reaches certain operational goals such as funds from operations , or ffo , targets and are valued based upon the market price of maa common stock on the date of grant as well as the probability of reaching the stated targets .
maa remeasures the fair value of the performance based awards each balance sheet date with adjustments made on a cumulative basis until the award is settled and the final compensation is known .

the weighted average grant date fair value per share of restricted stock awards granted during the years ended december 31 , 2017 , 2016 and 2015 , was $ 84.53 , $ 73.20 and $ 68.35 , respectively .
the following is a summary of the key assumptions used in the valuation calculations for market based awards granted during the years ended december 31 , 2017 , 2016 and 2015: .

the risk free rate was based on a zero coupon risk-free rate .
the minimum risk free rate was based on a period of 0.25 years for the years ended december 31 , 2017 , 2016 and 2015 .
the maximum risk free rate was based on a period of 3 years for the years ended december 31 , 2017 , 2016 and 2015 .
the dividend yield was based on the closing stock price of maa stock on the date of grant .
volatility for maa was obtained by using a blend of both historical and implied volatility calculations .

historical volatility was based on the standard deviation of daily total continuous returns , and implied volatility was based on the trailing month average of daily implied volatilities interpolating between the volatilities implied by stock call option contracts that were closest to the terms shown and closest to the money .
the minimum volatility was based on a period of 3 years , 2 years and 1 year for the years ended december 31 , 2017 , 2016 and 2015 , respectively .

the maximum volatility was based on a period of 1 year , 1 year and 2 years for the years ended december 31 , 2017 , 2016 and 2015 , respectively .
the requisite service period is based on the criteria for the separate programs according to the vesting schedule.

 |
| table | | 2017                                    | 2016                                    | 2015
------------------------ | --------------------------------------- | --------------------------------------- | ---------------------------------------
risk free rate           | 0.65% ( 0.65 % ) - 1.57% ( 1.57 % )     | 0.49% ( 0.49 % ) - 1.27% ( 1.27 % )     | 0.10% ( 0.10 % ) - 1.05% ( 1.05 % )
dividend yield           | 3.573% ( 3.573 % )                      | 3.634% ( 3.634 % )                      | 3.932% ( 3.932 % )
volatility               | 20.43% ( 20.43 % ) - 21.85% ( 21.85 % ) | 18.41% ( 18.41 % ) - 19.45% ( 19.45 % ) | 15.41% ( 15.41 % ) - 16.04% ( 16.04 % )
requisite service period | 3 years                                 | 3 years                                 | 3 years |


| _id | dd4ba043a |
| title |  |
| text | during fiscal 2006 , we repurchased 19 million shares of common stock for an aggregate purchase price of $ 892 million , of which $ 7 million settled after the end of our fiscal year .
in fiscal 2005 , we repurchased 17 million shares of common stock for an aggregate purchase price of $ 771 million .
a total of 146 million shares were held in treasury at may 28 , 2006 .
we also used cash from operations to repay $ 189 million in outstanding debt in fiscal 2006 .

in fiscal 2005 , we repaid nearly $ 2.2 billion of debt , including the purchase of $ 760 million principal amount of our 6 percent notes due in 2012 .
fiscal 2005 debt repurchase costs were $ 137 million , consisting of $ 73 million of noncash interest rate swap losses reclassified from accumulated other comprehen- sive income , $ 59 million of purchase premium and $ 5 million of noncash unamortized cost of issuance expense .
capital structure in millions may 28 , may 29 .

we have $ 2.1 billion of long-term debt maturing in the next 12 months and classified as current , including $ 131 million that may mature in fiscal 2007 based on the put rights of those note holders .
we believe that cash flows from operations , together with available short- and long- term debt financing , will be adequate to meet our liquidity and capital needs for at least the next 12 months .

on october 28 , 2005 , we repurchased a significant portion of our zero coupon convertible debentures pursuant to put rights of the holders for an aggregate purchase price of $ 1.33 billion , including $ 77 million of accreted original issue discount .
these debentures had an aggregate prin- cipal amount at maturity of $ 1.86 billion .
we incurred no gain or loss from this repurchase .

as of may 28 , 2006 , there were $ 371 million in aggregate principal amount at matu- rity of the debentures outstanding , or $ 268 million of accreted value .
we used proceeds from the issuance of commercial paper to fund the purchase price of the deben- tures .
we also have reclassified the remaining zero coupon convertible debentures to long-term debt based on the october 2008 put rights of the holders .

on march 23 , 2005 , we commenced a cash tender offer for our outstanding 6 percent notes due in 2012 .
the tender offer resulted in the purchase of $ 500 million principal amount of the notes .
subsequent to the expiration of the tender offer , we purchased an additional $ 260 million prin- cipal amount of the notes in the open market .
the aggregate purchases resulted in the debt repurchase costs as discussed above .

our minority interests consist of interests in certain of our subsidiaries that are held by third parties .
general mills cereals , llc ( gmc ) , our subsidiary , holds the manufac- turing assets and intellectual property associated with the production and retail sale of big g ready-to-eat cereals , progresso soups and old el paso products .

in may 2002 , one of our wholly owned subsidiaries sold 150000 class a preferred membership interests in gmc to an unrelated third-party investor in exchange for $ 150 million , and in october 2004 , another of our wholly owned subsidiaries sold 835000 series b-1 preferred membership interests in gmc in exchange for $ 835 million .

all interests in gmc , other than the 150000 class a interests and 835000 series b-1 interests , but including all managing member inter- ests , are held by our wholly owned subsidiaries .
in fiscal 2003 , general mills capital , inc .
( gm capital ) , a subsidiary formed for the purpose of purchasing and collecting our receivables , sold $ 150 million of its series a preferred stock to an unrelated third-party investor .

the class a interests of gmc receive quarterly preferred distributions at a floating rate equal to ( i ) the sum of three- month libor plus 90 basis points , divided by ( ii ) 0.965 .
this rate will be adjusted by agreement between the third- party investor holding the class a interests and gmc every five years , beginning in june 2007 .

under certain circum- stances , gmc also may be required to be dissolved and liquidated , including , without limitation , the bankruptcy of gmc or its subsidiaries , failure to deliver the preferred distributions , failure to comply with portfolio requirements , breaches of certain covenants , lowering of our senior debt rating below either baa3 by moody 2019s or bbb by standard & poor 2019s , and a failed attempt to remarket the class a inter- ests as a result of a breach of gmc 2019s obligations to

a result of a breach of gmc 2019s obligations to assist in such remarketing .

in the event of a liquidation of gmc , each member of gmc would receive the amount of its then current capital account balance .
the managing member may avoid liquidation in most circumstances by exercising an option to purchase the class a interests .
the series b-1 interests of gmc are entitled to receive quarterly preferred distributions at a fixed rate of 4.5 percent per year , which is scheduled to be reset to a new fixed rate through a remarketing in october 2007 .

beginning in october 2007 , the managing member of gmc may elect to repurchase the series b-1 interests for an amount equal to the holder 2019s then current capital account balance plus any applicable make-whole amount .
gmc is not required to purchase the series b-1 interests nor may these investors put these interests to us .

the series b-1 interests will be exchanged for shares of our perpetual preferred stock upon the occurrence of any of the following events : our senior unsecured debt rating falling below either ba3 as rated by moody 2019s or bb- as rated by standard & poor 2019s or fitch , inc.

 |
| table | in millions                       | may 282006 | may 292005
--------------------------------- | ---------- | ----------
notes payable                     | $ 1503     | $ 299
current portion of long-term debt | 2131       | 1638
long-term debt                    | 2415       | 4255
total debt                        | 6049       | 6192
minority interests                | 1136       | 1133
stockholders 2019 equity          | 5772       | 5676
total capital                     | $ 12957    | $ 13001 |