| _id | dd4c03814 |
| title |  |
| text | morgan stanley notes to consolidated financial statements 2014 ( continued ) consumer price index ) .
senior debt also may be structured to be callable by the company or extendible at the option of holders of the senior debt securities .
debt containing provisions that effectively allow the holders to put or extend the notes aggregated $ 1175 million at december 31 , 2013 and $ 1131 million at december 31 , 2012 .

in addition , separate agreements are entered into by the company 2019s subsidiaries that effectively allow the holders to put the notes aggregated $ 353 million at december 31 , 2013 and $ 1895 million at december 31 , 2012 .
subordinated debt and junior subordinated debentures generally are issued to meet the capital requirements of the company or its regulated subsidiaries and primarily are u.s .
dollar denominated .
senior debt 2014structured borrowings .

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

to minimize the exposure resulting from movements in the underlying index , equity , credit or other position , the company has entered into various swap contracts and purchased options that effectively convert the borrowing costs into floating rates based upon libor .
these instruments are included in the preceding table at their redemption values based on the performance of the underlying indices , baskets of stocks , or specific equity securities , credit or other position or index .

the company carries either the entire structured borrowing at fair value or bifurcates the embedded derivative and carries it at fair value .
the swaps and purchased options used to economically hedge the embedded features are derivatives and also are carried at fair value .
changes in fair value related to the notes and economic hedges are reported in trading revenues .
see note 4 for further information on structured borrowings .
subordinated debt and junior subordinated debentures .

included in the company 2019s long-term borrowings are subordinated notes of $ 9275 million having a contractual weighted average coupon of 4.69% ( 4.69 % ) at december 31 , 2013 and $ 5845 million having a weighted average coupon of 4.81% ( 4.81 % ) at december 31 , 2012 .

junior subordinated debentures outstanding by the company were $ 4849 million at december 31 , 2013 and $ 4827 million at december 31 , 2012 having a contractual weighted average coupon of 6.37% ( 6.37 % ) at both december 31 , 2013 and december 31 , 2012 .
maturities of the subordinated and junior subordinated notes range from 2014 to 2067 .
maturities of certain junior subordinated debentures can be extended to 2052 at the company 2019s option .
asset and liability management .

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

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

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

( 1 ) included in the weighted average and effective average calculations are non-u.s .
dollar interest rates .
other .
the company , through several of its subsidiaries , maintains funded and unfunded committed credit facilities to support various businesses , including the collateralized commercial and residential mortgage whole loan , derivative contracts , warehouse lending , emerging market loan , structured product , corporate loan , investment banking and prime brokerage businesses.

 |
| table | | 2013           | 2012           | 2011
----------------------------------------------------------------------------------------- | -------------- | -------------- | --------------
weighted average coupon of long-term borrowings at period-end ( 1 )                       | 4.4% ( 4.4 % ) | 4.4% ( 4.4 % ) | 4.0% ( 4.0 % )
effective average borrowing rate for long-term borrowings after swaps at period-end ( 1 ) | 2.2% ( 2.2 % ) | 2.3% ( 2.3 % ) | 1.9% ( 1.9 % ) |


| _id | dd4be43d8 |
| title |  |
| text | amount of commitment expiration per period other commercial commitments after millions total 2012 2013 2014 2015 2016 2016 .

[a] none of the credit facility was used as of december 31 , 2011 .
[b] $ 100 million of the receivables securitization facility was utilized at december 31 , 2011 , which is accounted for as debt .
the full program matures in august 2012 .
[c] includes guaranteed obligations related to our headquarters building , equipment financings , and affiliated operations .
[d] none of the letters of credit were drawn upon as of december 31 , 2011 .

off-balance sheet arrangements guarantees 2013 at december 31 , 2011 , we were contingently liable for $ 325 million in guarantees .
we have recorded a liability of $ 3 million for the fair value of these obligations as of december 31 , 2011 and 2010 .
we entered into these contingent guarantees in the normal course of business , and they include guaranteed obligations related to our headquarters building , equipment financings , and affiliated operations .
the final guarantee expires in 2022 .

the final guarantee expires in 2022 .
we are not aware of any existing event of default that would require us to satisfy these guarantees .
we do not expect that these guarantees will have a material adverse effect on our consolidated financial condition , results of operations , or liquidity .
other matters labor agreements 2013 in january 2010 , the nation 2019s largest freight railroads began the current round of negotiations with the labor unions .

generally , contract negotiations with the various unions take place over an extended period of time .
this round of negotiations was no exception .
in september 2011 , the rail industry reached agreements with the united transportation union .
on november 5 , 2011 , a presidential emergency board ( peb ) appointed by president obama issued recommendations to resolve the disputes between the u.s .
railroads and 11 unions that had not yet reached agreements .

since then , ten unions reached agreements with the railroads , all of them generally patterned on the recommendations of the peb , and the unions subsequently ratified these agreements .
the railroad industry reached a tentative agreement with the brotherhood of maintenance of way employees ( bmwe ) on february 2 , 2012 , eliminating the immediate threat of a national rail strike .
the bmwe now will commence ratification of this tentative agreement by its members .

inflation 2013 long periods of inflation significantly increase asset replacement costs for capital-intensive companies .
as a result , assuming that we replace all operating assets at current price levels , depreciation charges ( on an inflation-adjusted basis ) would be substantially greater than historically reported amounts .

derivative financial instruments 2013 we may use derivative financial instruments in limited instances to assist in managing our overall exposure to fluctuations in interest rates and fuel prices .
we are not a party to leveraged derivatives and , by policy , do not use derivative financial instruments for speculative purposes .

derivative financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged , both at inception and throughout the hedged period .
we formally document the nature and relationships between the hedging instruments and hedged items at inception , as well as our risk-management objectives , strategies for undertaking the various hedge transactions , and method of assessing hedge effectiveness .

changes in the fair market value of derivative financial instruments that do not qualify for hedge accounting are charged to earnings .
we may use swaps , collars , futures , and/or forward contracts to mitigate the risk of adverse movements in interest rates and fuel prices ; however , the use of these derivative financial instruments may limit future benefits from favorable price movements.

 |
| table | other commercial commitmentsmillions    | total  | amount of commitment expiration per period 2012 | amount of commitment expiration per period 2013 | amount of commitment expiration per period 2014 | amount of commitment expiration per period 2015 | amount of commitment expiration per period 2016 | amount of commitment expiration per period after 2016
--------------------------------------- | ------ | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | -----------------------------------------------------
credit facilities [a]                   | $ 1800 | $ -                                             | $ -                                             | $ -                                             | $ 1800                                          | $ -                                             | $ -
receivables securitization facility [b] | 600    | 600                                             | -                                               | -                                               | -                                               | -                                               | -
guarantees [c]                          | 325    | 18                                              | 8                                               | 214                                             | 12                                              | 13                                              | 60
standby letters of credit [d]           | 24     | 24                                              | -                                               | -                                               | -                                               | -                                               | -
total commercialcommitments             | $ 2749 | $ 642                                           | $ 8                                             | $ 214                                           | $ 1812                                          | $ 13                                            | $ 60 |


| _id | dd4bd7caa |
| title |  |
| text | our operating cash flows are significantly impacted by the seasonality of our businesses .
we typically generate most of our operating cash flow in the third and fourth quarters of each year .
in june 2015 , we issued $ 900 million of senior notes in a registered public offering .
the senior notes consist of two tranches : $ 400 million of five-year notes due 2020 with a coupon of 3% ( 3 % ) and $ 500 million of ten-year notes due 2025 with a coupon of 4% ( 4 % ) .

we used the proceeds from the senior notes offering to pay down our revolving credit facility and for general corporate purposes .
on december 31 , 2017 , the outstanding amount of the senior notes , net of underwriting commissions and price discounts , was $ 892.6 million .
cash flows below is a summary of cash flows for the years ended december 31 , 2017 , 2016 and 2015 .
( in millions ) 2017 2016 2015 .

net cash provided by operating activities was $ 600.3 million in 2017 compared to $ 650.5 million in 2016 and $ 429.2 million in 2015 .
the $ 50.2 million decrease in cash provided by operating activities from 2017 to 2016 was primarily due to higher build in working capital , primarily driven by higher inventory purchases in 2017 , partially offset by a higher net income .

the $ 221.3 million increase in cash provided by operating activities from 2015 to 2016 was primarily due to a reduction in working capital in 2016 compared to 2015 and higher net income .
net cash used in investing activities was $ 287.7 million in 2017 compared to $ 385.1 million in 2016 and $ 766.6 million in 2015 .
the decrease of $ 97.4 million from 2016 to 2017 was primarily due lower cost of acquisitions of $ 115.1 million , partially offset by $ 15.7 million of higher capital expenditures .

the decrease of $ 381.5 million from 2015 to 2016 was primarily due the decrease in cost of acquisitions of $ 413.1 million , partially offset by $ 20.8 million of higher capital spending .
net cash used in financing activities was $ 250.1 million in 2017 compared to net cash used in financing activities of $ 250.4 million in 2016 and net cash provided by in financing activities of $ 398.8 million in 2015 .

the change of $ 649.2 million in 2016 compared to 2015 was primarily due to $ 372.8 million of higher share repurchases and lower net borrowings of $ 240.8 million .
pension plans subsidiaries of fortune brands sponsor their respective defined benefit pension plans that are funded by a portfolio of investments maintained within our benefit plan trust .
in 2017 , 2016 and 2015 , we contributed $ 28.4 million , zero and $ 2.3 million , respectively , to qualified pension plans .

in 2018 , we expect to make pension contributions of approximately $ 12.8 million .
as of december 31 , 2017 , the fair value of our total pension plan assets was $ 656.6 million , representing funding of 79% ( 79 % ) of the accumulated benefit obligation liability .
for the foreseeable future , we believe that we have sufficient liquidity to meet the minimum funding that may be required by the pension protection act of 2006 .

foreign exchange we have operations in various foreign countries , principally canada , china , mexico , the united kingdom , france , australia and japan .
therefore , changes in the value of the related currencies affect our financial statements when translated into u.s .
dollars.

 |
| table | ( in millions )                                       | 2017             | 2016             | 2015
----------------------------------------------------- | ---------------- | ---------------- | ----------------
net cash provided by operating activities             | $ 600.3          | $ 650.5          | $ 429.2
net cash used in investing activities                 | -287.7 ( 287.7 ) | -385.1 ( 385.1 ) | -766.6 ( 766.6 )
net cash ( used in ) provided by financing activities | -250.1 ( 250.1 ) | -250.4 ( 250.4 ) | 398.8
effect of foreign exchange rate changes on cash       | 9.0              | -2.0 ( 2.0 )     | -14.8 ( 14.8 )
net increase in cash and cash equivalents             | $ 71.5           | $ 13.0           | $ 46.6 |


| _id | dd4c19a56 |
| title |  |
| text | in emerging markets , such as ghana , india , nigeria and uganda , wireless networks tend to be significantly less advanced than those in the united states , and initial voice networks continue to be deployed in underdeveloped areas .
a majority of consumers in these markets still utilize basic wireless services , predominantly on feature phones , while advanced device penetration remains low .
in more developed urban locations within these markets , early-stage data network deployments are underway .

carriers are focused on completing voice network build-outs while also investing in initial data networks as wireless data usage and smartphone penetration within their customer bases begin to accelerate .
in markets with rapidly evolving network technology , such as south africa and most of the countries in latin america where we do business , initial voice networks , for the most part , have already been built out , and carriers are focused on 3g and 4g network build outs .

consumers in these regions are increasingly adopting smartphones and other advanced devices , and , as a result , the usage of bandwidth-intensive mobile applications is growing materially .
recent spectrum auctions in these rapidly evolving markets have allowed incumbent carriers to accelerate their data network deployments and have also enabled new entrants to begin initial investments in data networks .

smartphone penetration and wireless data usage in these markets are growing rapidly , which typically requires that carriers continue to invest in their networks in order to maintain and augment their quality of service .
finally , in markets with more mature network technology , such as germany and france , carriers are focused on deploying 4g data networks to account for rapidly increasing wireless data usage among their customer base .

with higher smartphone and advanced device penetration and significantly higher per capita data usage , carrier investment in networks is focused on 4g coverage and capacity .
we believe that the network technology migration we have seen in the united states , which has led to significantly denser networks and meaningful new business commencements for us over a number of years , will ultimately be replicated in our less advanced international markets .

as a result , we expect to be able to leverage our extensive international portfolio of approximately 104470 communications sites and the relationships we have built with our carrier customers to drive sustainable , long-term growth .
we have master lease agreements with certain of our tenants that provide for consistent , long-term revenue and reduce the likelihood of churn .

our master lease agreements build and augment strong strategic partnerships with our tenants and have significantly reduced colocation cycle times , thereby providing our tenants with the ability to rapidly and efficiently deploy equipment on our sites .
property operations new site revenue growth .
during the year ended december 31 , 2016 , we grew our portfolio of communications real estate through the acquisition and construction of approximately 45310 sites .

in a majority of our asia , emea and latin america markets , the revenue generated from newly acquired or constructed sites resulted in increases in both tenant and pass-through revenues ( such as ground rent or power and fuel costs ) and expenses .

we continue to evaluate opportunities to acquire communications real estate portfolios , both domestically and internationally , to determine whether they meet our risk-adjusted hurdle rates and whether we believe we can effectively integrate them into our existing portfolio. .

property operations expenses .
direct operating expenses incurred by our property segments include direct site level expenses and consist primarily of ground rent and power and fuel costs , some or all of which may be passed through to our tenants , as well as property taxes , repairs and maintenance .

these segment direct operating expenses exclude all segment and corporate selling , general , administrative and development expenses , which are aggregated into one line item entitled selling , general , administrative and development expense in our consolidated statements of operations .

in general , our property segments 2019 selling , general , administrative and development expenses do not significantly increase as a result of adding incremental tenants to our sites and typically increase only modestly year-over-year .
as a result , leasing additional space to new tenants on our sites provides significant incremental cash flow .

we may , however , incur additional segment selling , general , administrative and development expenses as we increase our presence in our existing markets or expand into new markets .
our profit margin growth is therefore positively impacted by the addition of new tenants to our sites but can be temporarily diluted by our development activities.

 |
| table | new sites ( acquired or constructed ) | 2016  | 2015  | 2014
------------------------------------- | ----- | ----- | ----
u.s .                                 | 65    | 11595 | 900
asia                                  | 43865 | 2330  | 1560
emea                                  | 665   | 4910  | 190
latin america                         | 715   | 6535  | 5800 |


| _id | dd4bf398c |
| title |  |
| text | management 2019s discussion and analysis liquidity risk management liquidity is of critical importance to financial institutions .
most of the recent failures of financial institutions have occurred in large part due to insufficient liquidity .
accordingly , the firm has in place a comprehensive and conservative set of liquidity and funding policies to address both firm-specific and broader industry or market liquidity events .

our principal objective is to be able to fund the firm and to enable our core businesses to continue to serve clients and generate revenues , even under adverse circumstances .
we manage liquidity risk according to the following principles : excess liquidity .
we maintain substantial excess liquidity to meet a broad range of potential cash outflows and collateral needs in a stressed environment .
asset-liability management .

asset-liability management .
we assess anticipated holding periods for our assets and their expected liquidity in a stressed environment .
we manage the maturities and diversity of our funding across markets , products and counterparties , and seek to maintain liabilities of appropriate tenor relative to our asset base .
contingency funding plan .
we maintain a contingency funding plan to provide a framework for analyzing and responding to a liquidity crisis situation or periods of market stress .

this framework sets forth the plan of action to fund normal business activity in emergency and stress situations .
these principles are discussed in more detail below .
excess liquidity our most important liquidity policy is to pre-fund our estimated potential cash and collateral needs during a liquidity crisis and hold this excess liquidity in the form of unencumbered , highly liquid securities and cash .

we believe that the securities held in our global core excess would be readily convertible to cash in a matter of days , through liquidation , by entering into repurchase agreements or from maturities of reverse repurchase agreements , and that this cash would allow us to meet immediate obligations without needing to sell other assets or depend on additional funding from credit-sensitive markets .

as of december 2012 and december 2011 , the fair value of the securities and certain overnight cash deposits included in our gce totaled $ 174.62 billion and $ 171.58 billion , respectively .
based on the results of our internal liquidity risk model , discussed below , as well as our consideration of other factors including , but not limited to , a qualitative assessment of the condition of the financial markets and the firm , we believe our liquidity position as of december 2012 was appropriate .

the table below presents the fair value of the securities and certain overnight cash deposits that are included in our gce .
average for the year ended december in millions 2012 2011 .

the u.s .
dollar-denominated excess is composed of ( i ) unencumbered u.s .
government and federal agency obligations ( including highly liquid u.s .
federal agency mortgage-backed obligations ) , all of which are eligible as collateral in federal reserve open market operations and ( ii ) certain overnight u.s .
dollar cash deposits .
the non-u.s .

dollar cash deposits .
the non-u.s .
dollar-denominated excess is composed of only unencumbered german , french , japanese and united kingdom government obligations and certain overnight cash deposits in highly liquid currencies .
we strictly limit our excess liquidity to this narrowly defined list of securities and cash because they are highly liquid , even in a difficult funding environment .

we do not include other potential sources of excess liquidity , such as less liquid unencumbered securities or committed credit facilities , in our gce .
goldman sachs 2012 annual report 81

 |
| table | in millions                  | average for theyear ended december 2012 | average for theyear ended december 2011
---------------------------- | --------------------------------------- | ---------------------------------------
u.s . dollar-denominated     | $ 125111                                | $ 125668
non-u.s . dollar-denominated | 46984                                   | 40291
total                        | $ 172095                                | $ 165959 |


| _id | dd4bae530 |
| title |  |
| text | entergy corporation and subsidiaries notes to financial statements as of december 31 , 2008 , system energy had future minimum lease payments ( reflecting an implicit rate of 5.13% ( 5.13 % ) ) , which are recorded as long-term debt as follows : amount ( in thousands ) .

 |
| table | | amount ( in thousands )
------------------------------------------- | -----------------------
2009                                        | $ 47760
2010                                        | 48569
2011                                        | 49437
2012                                        | 49959
2013                                        | 50546
years thereafter                            | 103890
total                                       | 350161
less : amount representing interest         | 54857
present value of net minimum lease payments | $ 295304 |


| _id | dd4b9ac88 |
| title |  |
| text | humana inc .
notes to consolidated financial statements 2014 ( continued ) in any spe transactions .
the adoption of fin 46 or fin 46-r did not have a material impact on our financial position , results of operations , or cash flows .
in december 2004 , the fasb issued statement no .
123r , share-based payment , or statement 123r , which requires companies to expense the fair value of employee stock options and other forms of stock-based compensation .

this requirement represents a significant change because fixed-based stock option awards , a predominate form of stock compensation for us , were not recognized as compensation expense under apb 25 .
statement 123r requires the cost of the award , as determined on the date of grant at fair value , be recognized over the period during which an employee is required to provide service in exchange for the award ( usually the vesting period ) .

the grant-date fair value of the award will be estimated using option-pricing models .
we are required to adopt statement 123r no later than july 1 , 2005 under one of three transition methods , including a prospective , retrospective and combination approach .
we previously disclosed on page 67 the effect of expensing stock options under a fair value approach using the black-scholes pricing model for 2004 , 2003 and 2002 .

we currently are evaluating all of the provisions of statement 123r and the expected effect on us including , among other items , reviewing compensation strategies related to stock-based awards , selecting an option pricing model and determining the transition method .
in march 2004 , the fasb issued eitf issue no .
03-1 , or eitf 03-1 , the meaning of other-than- temporary impairment and its application to certain investments .

eitf 03-1 includes new guidance for evaluating and recording impairment losses on certain debt and equity investments when the fair value of the investment security is less than its carrying value .
in september 2004 , the fasb delayed the previously scheduled third quarter 2004 effective date until the issuance of additional implementation guidance , expected in 2005 .
upon issuance of a final standard , we will evaluate the impact on our consolidated financial position and results of operations .
3 .

3 .
acquisitions on february 16 , 2005 , we acquired careplus health plans of florida , or careplus , as well as its affiliated 10 medical centers and pharmacy company .
careplus provides medicare advantage hmo plans and benefits to medicare eligible members in miami-dade , broward and palm beach counties .
this acquisition enhances our medicare market position in south florida .

we paid approximately $ 450 million in cash including estimated transaction costs , subject to a balance sheet settlement process with a nine month claims run-out period .
we currently are in the process of allocating the purchase price to the net tangible and intangible assets .
on april 1 , 2004 , we acquired ochsner health plan , or ochsner , from the ochsner clinic foundation .

ochsner is a louisiana health benefits company offering network-based managed care plans to employer-groups and medicare eligible members .
this acquisition enabled us to enter a new market with significant market share which should facilitate new sales opportunities in this and surrounding markets , including houston , texas .
we paid $ 157.1 million in cash , including transaction costs .
the fair value of the tangible assets ( liabilities ) as of the acquisition date are as follows: .

 |
| table | | ( in thousands )
-------------------------------------------- | ----------------
cash and cash equivalents                    | $ 15270
investment securities                        | 84527
premiums receivable and other current assets | 20616
property and equipment and other assets      | 6847
medical and other expenses payable           | -71063 ( 71063 )
other current liabilities                    | -21604 ( 21604 )
other liabilities                            | -82 ( 82 )
net tangible assets acquired                 | $ 34511 |


| _id | dd4bfe2a6 |
| title |  |
| text | performance graph the following graph compares the yearly change in the cumulative total stockholder return for our last five full fiscal years , based upon the market price of our common stock , with the cumulative total return on a nasdaq composite index ( u.s .
companies ) and a peer group , the nasdaq medical equipment-sic code 3840-3849 index , which is comprised of medical equipment companies , for that period .

the performance graph assumes the investment of $ 100 on march 31 , 2006 in our common stock , the nasdaq composite index ( u.s .
companies ) and the peer group index , and the reinvestment of any and all dividends. .

this graph is not 201csoliciting material 201d under regulation 14a or 14c of the rules promulgated under the securities exchange act of 1934 , is not deemed filed with the securities and exchange commission and is not to be incorporated by reference in any of our filings under the securities act of 1933 , as amended , or the exchange act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing .

transfer agent american stock transfer & trust company , 59 maiden lane , new york , ny 10038 , is our stock transfer agent.

 |
| table | | 3/31/2006 | 3/31/2007 | 3/31/2008 | 3/31/2009 | 3/31/2010 | 3/31/2011
------------------------------------------- | --------- | --------- | --------- | --------- | --------- | ---------
abiomed inc                                 | 100       | 105.89    | 101.86    | 37.98     | 80.00     | 112.64
nasdaq composite index                      | 100       | 103.50    | 97.41     | 65.33     | 102.49    | 118.86
nasdaq medical equipment sic code 3840-3849 | 100       | 88.78     | 84.26     | 46.12     | 83.47     | 91.35 |


| _id | dd4bb1d3e |
| title |  |
| text | to determine stock-based compensation expense , the grant date fair value is applied to the options granted with a reduction for estimated forfeitures .
we recognize compensation expense for stock options on a straight-line basis over the specified vesting period .
at december 31 , 2013 and 2012 , options for 10204000 and 12759000 shares of common stock were exercisable at a weighted-average price of $ 89.46 and $ 90.86 , respectively .

the total intrinsic value of options exercised during 2014 , 2013 and 2012 was $ 90 million , $ 86 million and $ 37 million , respectively .
cash received from option exercises under all incentive plans for 2014 , 2013 and 2012 was approximately $ 215 million , $ 208 million and $ 118 million , respectively .
the tax benefit realized from option exercises under all incentive plans for 2014 , 2013 and 2012 was approximately $ 33 million , $ 31 million and $ 14 million , respectively .

shares of common stock available during the next year for the granting of options and other awards under the incentive plans were 17997353 at december 31 , 2014 .
total shares of pnc common stock authorized for future issuance under equity compensation plans totaled 19017057 shares at december 31 , 2014 , which includes shares available for issuance under the incentive plans and the employee stock purchase plan ( espp ) as described below .

during 2014 , we issued approximately 2.4 million shares from treasury stock in connection with stock option exercise activity .
as with past exercise activity , we currently intend to utilize primarily treasury stock for any future stock option exercises .
awards granted to non-employee directors in 2014 , 2013 and 2012 include 21490 , 27076 and 25620 deferred stock units , respectively , awarded under the outside directors deferred stock unit plan .

a deferred stock unit is a phantom share of our common stock , which is accounted for as a liability until such awards are paid to the participants in cash .
as there are no vesting or service requirements on these awards , total compensation expense is recognized in full for these awards on the date of grant .

incentive/performance unit share awards and restricted stock/share unit awards the fair value of nonvested incentive/performance unit share awards and restricted stock/share unit awards is initially determined based on prices not less than the market value of our common stock on the date of grant .
the value of certain incentive/performance unit share awards is subsequently remeasured based on the achievement of one or more financial and other performance goals .

the personnel and compensation committee ( 201cp&cc 201d ) of the board of directors approves the final award payout with respect to certain incentive/performance unit share awards .
these awards have either a three-year or a four-year performance period and are payable in either stock or a combination of stock and cash .
restricted stock/share unit awards have various vesting periods generally ranging from 3 years to 5 years .

beginning in 2013 , we incorporated several enhanced risk- related performance changes to certain long-term incentive compensation programs .
in addition to achieving certain financial performance metrics on both an absolute basis and relative to our peers , final payout amounts will be subject to reduction if pnc fails to meet certain risk-related performance metrics as specified in the award agreements .

however , the p&cc has the discretion to waive any or all of this reduction under certain circumstances .
the weighted-average grant date fair value of incentive/ performance unit share awards and restricted stock/unit awards granted in 2014 , 2013 and 2012 was $ 80.79 , $ 64.77 and $ 60.68 per share , respectively .

the total fair value of incentive/performance unit share and restricted stock/unit awards vested during 2014 , 2013 and 2012 was approximately $ 119 million , $ 63 million and $ 55 million , respectively .
we recognize compensation expense for such awards ratably over the corresponding vesting and/or performance periods for each type of program .

table 121 : nonvested incentive/performance unit share awards and restricted stock/share unit awards 2013 rollforward shares in thousands nonvested incentive/ performance unit shares weighted- average grant date fair value nonvested restricted stock/ weighted- average grant date fair value .

the pnc financial services group , inc .
2013 form 10-k 185

 |
| table | shares in thousands december 31 2013 | nonvested incentive/ performance unit shares 1647 | weighted-averagegrant datefair value $ 63.49 | nonvested restricted stock/ share units 3483 | weighted-averagegrant datefair value $ 62.70
------------------------------------ | ------------------------------------------------- | -------------------------------------------- | -------------------------------------------- | --------------------------------------------
granted                              | 723                                               | 79.90                                        | 1276                                         | 81.29
vested/released                      | -513 ( 513 )                                      | 63.64                                        | -962 ( 962 )                                 | 62.32
forfeited                            | -20 ( 20 )                                        | 69.18                                        | -145 ( 145 )                                 | 69.44
december 31 2014                     | 1837                                              | $ 69.84                                      | 3652                                         | $ 69.03 |


| _id | dd49707dc |
| title |  |
| text | the company had net realized capital losses for 2015 of $ 184.1 million .
in 2015 , the company recorded $ 102.2 million of other-than-temporary impairments on fixed maturity securities , $ 45.6 million of losses due to fair value re-measurements and $ 36.3 million of net realized capital losses from sales of fixed maturity and equity securities .

in 2014 , net realized capital gains were $ 84.0 million due to $ 121.7 million of gains from fair value re-measurements on fixed maturity and equity securities and $ 1.9 million of net realized capital gains from sales of fixed maturity and equity securities , partially offset by $ 39.5 million of other-than- temporary impairments on fixed maturity securities .

in 2013 , net realized capital gains were $ 300.2 million due to $ 258.9 million of gains due to fair value re-measurements on fixed maturity and equity securities and $ 42.4 million of net realized capital gains from sales of fixed maturity and equity securities , partially offset by $ 1.1 million of other-than-temporary impairments on fixed maturity securities .

the company 2019s cash and invested assets totaled $ 17.7 billion at december 31 , 2015 , which consisted of 87.4% ( 87.4 % ) fixed maturities and cash , of which 91.4% ( 91.4 % ) were investment grade ; 8.2% ( 8.2 % ) equity securities and 4.4% ( 4.4 % ) other invested assets .
the average maturity of fixed maturity securities was 4.1 years at december 31 , 2015 , and their overall duration was 3.0 years .

as of december 31 , 2015 , the company did not have any direct investments in commercial real estate or direct commercial mortgages or any material holdings of derivative investments ( other than equity index put option contracts as discussed in item 8 , 201cfinancial statements and supplementary data 201d - note 4 of notes to consolidated financial statements ) or securities of issuers that are experiencing cash flow difficulty to an extent that the company 2019s management believes could threaten the

2019s management believes could threaten the issuer 2019s ability to meet debt service payments , except where other-than-temporary impairments have been recognized .

the company 2019s investment portfolio includes structured commercial mortgage-backed securities ( 201ccmbs 201d ) with a book value of $ 264.9 million and a market value of $ 266.3 million .
cmbs securities comprising more than 70% ( 70 % ) of the december 31 , 2015 market value are rated aaa by standard & poor 2019s financial services llc ( 201cstandard & poor 2019s 201d ) .

furthermore , securities comprising more than 90% ( 90 % ) of the market value are rated investment grade by standard & poor 2019s .
the following table reflects investment results for the company for the periods indicated: .

pre-tax pre-tax pre-tax pre-tax realized net unrealized net average investment effective capital ( losses ) capital gains ( dollars in millions ) investments ( 1 ) income ( 2 ) yield gains ( 3 ) ( losses ) 17430.8$ 473.8$ 2.72% ( 2.72 % ) ( 184.1 ) $ ( 194.0 ) $ 16831.9 530.6 3.15% ( 3.15 % ) 84.0 20.3 16472.5 548.5 3.33% ( 3.33 % ) 300.2 ( 467.2 ) 16220.9 600.2 3.70% ( 3.70 % ) 164.4 161.0 15680.9 620.0 3.95% ( 3.95 % ) 6.9 106.6 ( 1 ) average of the beginning and ending carrying values of investments and

and ending carrying values of investments and cash , less net funds held , future policy benefit reserve , and non-interest bearing cash .

bonds , common stock and redeemable and non-redeemable preferred stocks are carried at market value .
common stock which are actively managed are carried at fair value .
( 2 ) after investment expenses , excluding realized net capital gains ( losses ) .
( 3 ) included in 2015 , 2014 , 2013 , 2012 and 2011 are fair value re-measurements of ( $ 45.6 ) million , $ 121.7 million , $ 258.9 million , $ 118.1 million and ( $ 4.4 ) million , respectively.

 |
| table | ( dollars in millions ) | december 31 , average investments ( 1 ) | december 31 , pre-tax investment income ( 2 ) | december 31 , pre-tax effective yield | december 31 , pre-tax realized net capital ( losses ) gains ( 3 ) | december 31 , pre-tax unrealized net capital gains ( losses )
----------------------- | --------------------------------------- | --------------------------------------------- | ------------------------------------- | ----------------------------------------------------------------- | -------------------------------------------------------------
2015                    | $ 17430.8                               | $ 473.8                                       | 2.72% ( 2.72 % )                      | $ -184.1 ( 184.1 )                                                | $ -194.0 ( 194.0 )
2014                    | 16831.9                                 | 530.6                                         | 3.15% ( 3.15 % )                      | 84.0                                                              | 20.3
2013                    | 16472.5                                 | 548.5                                         | 3.33% ( 3.33 % )                      | 300.2                                                             | -467.2 ( 467.2 )
2012                    | 16220.9                                 | 600.2                                         | 3.70% ( 3.70 % )                      | 164.4                                                             | 161.0
2011                    | 15680.9                                 | 620.0                                         | 3.95% ( 3.95 % )                      | 6.9                                                               | 106.6 |


| _id | dd4c05bc8 |
| title |  |
| text | segment includes awe and our share of earnings for our investment in ula , which provides expendable launch services to the u.s .
government .
space systems 2019 operating results included the following ( in millions ) : .

2016 compared to 2015 space systems 2019 net sales in 2016 increased $ 304 million , or 3% ( 3 % ) , compared to 2015 .

the increase was attributable to net sales of approximately $ 410 million from awe following the consolidation of this business in the third quarter of 2016 ; and approximately $ 150 million for commercial space transportation programs due to increased launch-related activities ; and approximately $ 70 million of higher net sales for various programs ( primarily fleet ballistic missiles ) due to increased volume .

these increases were partially offset by a decrease in net sales of approximately $ 340 million for government satellite programs due to decreased volume ( primarily sbirs and muos ) and the wind-down or completion of mission solutions programs .
space systems 2019 operating profit in 2016 increased $ 118 million , or 10% ( 10 % ) , compared to 2015 .

the increase was primarily attributable to a non-cash , pre-tax gain of approximately $ 127 million related to the consolidation of awe ; and approximately $ 80 million of increased equity earnings from joint ventures ( primarily ula ) .
these increases were partially offset by a decrease of approximately $ 105 million for government satellite programs due to lower risk retirements ( primarily sbirs , muos and mission solutions programs ) and decreased volume .

adjustments not related to volume , including net profit booking rate adjustments , were approximately $ 185 million lower in 2016 compared to 2015 .
2015 compared to 2014 space systems 2019 net sales in 2015 decreased $ 97 million , or 1% ( 1 % ) , compared to 2014 .

the decrease was attributable to approximately $ 335 million lower net sales for government satellite programs due to decreased volume ( primarily aehf ) and the wind-down or completion of mission solutions programs ; and approximately $ 55 million for strategic missile and defense systems due to lower volume .

these decreases were partially offset by higher net sales of approximately $ 235 million for businesses acquired in 2014 ; and approximately $ 75 million for the orion program due to increased volume .
space systems 2019 operating profit in 2015 decreased $ 16 million , or 1% ( 1 % ) , compared to 2014 .
operating profit increased approximately $ 85 million for government satellite programs due primarily to increased risk retirements .

this increase was offset by lower operating profit of approximately $ 65 million for commercial satellite programs due to performance matters on certain programs ; and approximately $ 35 million due to decreased equity earnings in joint ventures .
adjustments not related to volume , including net profit booking rate adjustments and other matters , were approximately $ 105 million higher in 2015 compared to 2014 .

equity earnings total equity earnings recognized by space systems ( primarily ula ) represented approximately $ 325 million , $ 245 million and $ 280 million , or 25% ( 25 % ) , 21% ( 21 % ) and 24% ( 24 % ) of this business segment 2019s operating profit during 2016 , 2015 and backlog backlog increased in 2016 compared to 2015 primarily due to the addition of awe 2019s backlog .

backlog decreased in 2015 compared to 2014 primarily due to lower orders for government satellite programs and the orion program and higher sales on the orion program .

trends we expect space systems 2019 2017 net sales to decrease in the mid-single digit percentage range as compared to 2016 , driven by program lifecycles on government satellite programs , partially offset by the recognition of awe net sales for a full year in 2017 versus a partial year in 2016 following the consolidation of awe in the third quarter of 2016 .
operating profit

 |
| table | | 2016             | 2015             | 2014
------------------ | ---------------- | ---------------- | ----------------
net sales          | $ 9409           | $ 9105           | $ 9202
operating profit   | 1289             | 1171             | 1187
operating margin   | 13.7% ( 13.7 % ) | 12.9% ( 12.9 % ) | 12.9% ( 12.9 % )
backlog atyear-end | $ 18900          | $ 17400          | $ 20300 |


| _id | dd4bce3c6 |
| title |  |
| text | new term loan a facility , with the remaining unpaid principal amount of loans under the new term loan a facility due and payable in full at maturity on june 6 , 2021 .
principal amounts outstanding under the new revolving loan facility are due and payable in full at maturity on june 6 , 2021 , subject to earlier repayment pursuant to the springing maturity date described above .

in addition to paying interest on outstanding principal under the borrowings , we are obligated to pay a quarterly commitment fee at a rate determined by reference to a total leverage ratio , with a maximum commitment fee of 40% ( 40 % ) of the applicable margin for eurocurrency loans .

in july 2016 , breakaway four , ltd. , as borrower , and nclc , as guarantor , entered into a supplemental agreement , which amended the breakaway four loan to , among other things , increase the aggregate principal amount of commitments under the multi-draw term loan credit facility from 20ac590.5 million to 20ac729.9 million .
in june 2016 , we took delivery of seven seas explorer .
to finance the payment due upon delivery , we had export credit financing in place for 80% ( 80 % ) of the contract price .

the associated $ 373.6 million term loan bears interest at 3.43% ( 3.43 % ) with a maturity date of june 30 , 2028 .
principal and interest payments shall be paid semiannually .
in december 2016 , nclc issued $ 700.0 million aggregate principal amount of 4.750% ( 4.750 % ) senior unsecured notes due december 2021 ( the 201cnotes 201d ) in a private offering ( the 201coffering 201d ) at par .

nclc used the net proceeds from the offering , after deducting the initial purchasers 2019 discount and estimated fees and expenses , together with cash on hand , to purchase its outstanding 5.25% ( 5.25 % ) senior notes due 2019 having an aggregate outstanding principal amount of $ 680 million .
the redemption of the 5.25% ( 5.25 % ) senior notes due 2019 was completed in january 2017 .

nclc will pay interest on the notes at 4.750% ( 4.750 % ) per annum , semiannually on june 15 and december 15 of each year , commencing on june 15 , 2017 , to holders of record at the close of business on the immediately preceding june 1 and december 1 , respectively .

nclc may redeem the notes , in whole or part , at any time prior to december 15 , 2018 , at a price equal to 100% ( 100 % ) of the principal amount of the notes redeemed plus accrued and unpaid interest to , but not including , the redemption date and a 201cmake-whole premium . 201d nclc may redeem the notes , in whole or in part , on or after december 15 , 2018 , at the redemption prices set forth in the indenture governing the notes .

at any time ( which may be more than once ) on or prior to december 15 , 2018 , nclc may choose to redeem up to 40% ( 40 % ) of the aggregate principal amount of the notes at a redemption price equal to 104.750% ( 104.750 % ) of the face amount thereof with an amount equal to the net proceeds of one or more equity offerings , so long as at least 60% ( 60 % ) of the aggregate principal amount of the notes issued remains outstanding following such redemption .

the indenture governing the notes contains covenants that limit nclc 2019s ability ( and its restricted subsidiaries 2019 ability ) to , among other things : ( i ) incur or guarantee additional indebtedness or issue certain preferred shares ; ( ii ) pay dividends and make certain other restricted payments ; ( iii ) create restrictions on the payment of dividends or other distributions to nclc from its restricted subsidiaries ; ( iv ) create liens on certain assets to secure debt ; ( v ) make certain

assets to secure debt ; ( v ) make certain investments ; ( vi ) engage in transactions with affiliates ; ( vii ) engage in sales of assets and subsidiary stock ; and ( viii ) transfer all or substantially all of its assets or enter into merger or consolidation transactions .

the indenture governing the notes also provides for events of default , which , if any of them occurs , would permit or require the principal , premium ( if any ) , interest and other monetary obligations on all of the then-outstanding notes to become due and payable immediately .
interest expense , net for the year ended december 31 , 2016 was $ 276.9 million which included $ 34.7 million of amortization of deferred financing fees and a $ 27.7 million loss on extinguishment of debt .

interest expense , net for the year ended december 31 , 2015 was $ 221.9 million which included $ 36.7 million of amortization of deferred financing fees and a $ 12.7 million loss on extinguishment of debt .
interest expense , net for the year ended december 31 , 2014 was $ 151.8 million which included $ 32.3 million of amortization of deferred financing fees and $ 15.4 million of expenses related to financing transactions in connection with the acquisition of prestige .

certain of our debt agreements contain covenants that , among other things , require us to maintain a minimum level of liquidity , as well as limit our net funded debt-to-capital ratio , maintain certain other ratios and restrict our ability to pay dividends .
substantially all of our ships and other property and equipment are pledged as collateral for certain of our debt .
we believe we were in compliance with these covenants as of december 31 , 2016 .

the following are scheduled principal repayments on long-term debt including capital lease obligations as of december 31 , 2016 for each of the next five years ( in thousands ) : .

we had an accrued interest liability of $ 32.5 million and $ 34.2 million as of december 31 , 2016 and 2015 , respectively.

 |
| table | year       | amount
---------- | ---------
2017       | $ 560193
2018       | 554846
2019       | 561687
2020       | 1153733
2021       | 2193823
thereafter | 1490322
total      | $ 6514604 |


| _id | dd4b936f4 |
| title |  |
| text | for fiscal year 2005 , the effective tax rate includes the impact of $ 11.6 million tax expense associated with repatriation of approximately $ 185.0 million of foreign earnings under the provisions of the american jobs creation act of 2004 .
for fiscal year 2004 , the effective tax rate reflects the tax benefit derived from higher earnings in low-tax jurisdictions .

during fiscal year 2006 , primarily due to a tax accounting method change , there was a decrease of $ 83.2 million in the current deferred tax assets , and a corresponding increase in non-current deferred tax assets .
in the third quarter of fiscal year 2006 , we changed our tax accounting method on our tax return for fiscal year 2005 with respect to the current portion of deferred revenue to follow the recognition of revenue under u.s .
generally accepted accounting principles .

generally accepted accounting principles .
this accounting method change , as well as other adjustments made to our taxable income upon the filing of the fiscal year 2005 tax return , resulted in an increase in our operating loss ( nol ) carryforwards .
in may 2006 , the tax increase prevention and reconciliation act of 2005 was enacted , which provides a three-year exception to current u.s .
taxation of certain foreign intercompany income .
this provision will first apply to synopsys in fiscal year 2007 .

management estimates that had such provisions been applied for fiscal 2006 , our income tax expense would have been reduced by approximately $ 3 million .
in december 2006 , the tax relief and health care act of 2006 was enacted , which retroactively extended the research and development credit from january 1 , 2006 .
as a result , we will record an expected increase in our fiscal 2006 research and development credit of between $ 1.5 million and $ 1.8 million in the first quarter of fiscal 2007 .

revision of prior year financial statements .
as part of our remediation of the material weakness in internal control over financial reporting identified in fiscal 2005 relating to accounting for income taxes we implemented additional internal control and review procedures .
through such procedures , in the fourth quarter of fiscal 2006 , we identified four errors totaling $ 8.2 million which affected our income tax provision in fiscal years 2001 through 2005 .

we concluded that these errors were not material to any prior year financial statements .
although the errors are not material to prior periods , we elected to revise prior year financial statements to correct such errors .
the fiscal periods in which the errors originated , and the resulting change in provision ( benefit ) for income taxes for each year , are reflected in the following table : year ended october 31 ( in thousands ) .

the errors were as follows : ( 1 ) synopsys inadvertently provided a $ 1.4 million tax benefit for the write- off of goodwill relating to an acquisition in fiscal 2002 ; ( 2 ) synopsys did not accrue interest and penalties for certain foreign tax contingency items in the amount of $ 3.2 million ; ( 3 ) synopsys made certain computational errors relating to foreign dividends of $ 2.3 million ; and ( 4 ) synopsys did not record a valuation allowance relating to certain state tax credits of $ 1.3 million .

as result of this revision , non-current deferred tax assets decreased by $ 8.1 million and current taxes payable increased by $ 0.2 million .
retained earnings decreased by $ 8.2 million and additional paid in capital decreased by $ 0.1 million .
see item 9a .
controls and procedures for a further discussion of our remediation of the material weakness .
tax effects of stock awards .

tax effects of stock awards .
in november 2005 , fasb issued a staff position ( fsp ) on fas 123 ( r ) -3 , transition election related to accounting for the tax effects of share-based payment awards .
effective upon issuance , this fsp describes an alternative transition method for calculating the tax effects of share-based compensation pursuant to sfas 123 ( r ) .

the alternative transition method includes simplified methods to establish the beginning balance of the additional paid-in capital pool ( apic pool ) related to the tax effects of employee stock based compensation , and to determine the subsequent impact on the apic pool and the statement of cash flows of the tax effects of employee share-based compensation

 |
| table | 2001  | 2002   | 2003   | 2004           | 2005
----- | ------ | ------ | -------------- | ------
$ 205 | $ 1833 | $ 5303 | $ -748 ( 748 ) | $ 1636 |


| _id | dd4bbe0d4 |
| title |  |
| text | table of contents company stock performance the following graph shows a five-year comparison of cumulative total shareholder return , calculated on a dividend reinvested basis , for the company , the s&p 500 index , the s&p computer hardware index , and the dow jones u.s .
technology supersector index .
the graph assumes $ 100 was invested in each of the company 2019s common stock , the s&p 500 index , the s&p computer hardware index , and the dow jones u.s .

technology supersector index as of the market close on september 30 , 2008 .
data points on the graph are annual .
note that historic stock price performance is not necessarily indicative of future stock price performance .
fiscal year ending september 30 .
copyright 2013 s&p , a division of the mcgraw-hill companies inc .
all rights reserved .
copyright 2013 dow jones & co .
all rights reserved .
*$ 100 invested on 9/30/08 in stock or index , including reinvestment of dividends .

september 30 , september 30 , september 30 , september 30 , september 30 , september 30 .

 |
| table | | september 30 2008 | september 30 2009 | september 30 2010 | september 30 2011 | september 30 2012 | september 30 2013
----------------------------------------- | ----------------- | ----------------- | ----------------- | ----------------- | ----------------- | -----------------
apple inc .                               | $ 100             | $ 163             | $ 250             | $ 335             | $ 589             | $ 431
s&p 500 index                             | $ 100             | $ 93              | $ 103             | $ 104             | $ 135             | $ 161
s&p computer hardware index               | $ 100             | $ 118             | $ 140             | $ 159             | $ 255             | $ 197
dow jones us technology supersector index | $ 100             | $ 111             | $ 124             | $ 128             | $ 166             | $ 175 |


| _id | dd4baf534 |
| title |  |
| text | notes to consolidated financial statements 2013 ( continued ) ( amounts in millions , except per share amounts ) guarantees we have guaranteed certain obligations of our subsidiaries relating principally to operating leases and uncommitted lines of credit of certain subsidiaries .

as of december 31 , 2018 and 2017 , the amount of parent company guarantees on lease obligations was $ 824.5 and $ 829.2 , respectively , the amount of parent company guarantees primarily relating to uncommitted lines of credit was $ 349.1 and $ 308.8 , respectively , and the amount of parent company guarantees related to daylight overdrafts , primarily utilized to manage intra-day overdrafts due to timing of transactions under cash pooling arrangements without resulting in incremental borrowings , was $

resulting in incremental borrowings , was $ 207.8 and $ 182.2 , respectively .

in the event of non-payment by the applicable subsidiary of the obligations covered by a guarantee , we would be obligated to pay the amounts covered by that guarantee .
as of december 31 , 2018 , there were no material assets pledged as security for such parent company guarantees .
contingent acquisition obligations the following table details the estimated future contingent acquisition obligations payable in cash as of december 31 .

1 we have entered into certain acquisitions that contain both redeemable noncontrolling interests and call options with similar terms and conditions .
the estimated amounts listed would be paid in the event of exercise at the earliest exercise date .
we have certain redeemable noncontrolling interests that are exercisable at the discretion of the noncontrolling equity owners as of december 31 , 2018 .

these estimated payments of $ 24.9 are included within the total payments expected to be made in 2019 , and will continue to be carried forward into 2020 or beyond until exercised or expired .
redeemable noncontrolling interests are included in the table at current exercise price payable in cash , not at applicable redemption value , in accordance with the authoritative guidance for classification and measurement of redeemable securities .

the majority of these payments are contingent upon achieving projected operating performance targets and satisfying other conditions specified in the related agreements and are subject to revision in accordance with the terms of the respective agreements .
see note 5 for further information relating to the payment structure of our acquisitions .

legal matters we are involved in various legal proceedings , and subject to investigations , inspections , audits , inquiries and similar actions by governmental authorities arising in the normal course of business .
the types of allegations that arise in connection with such legal proceedings vary in nature , but can include claims related to contract , employment , tax and intellectual property matters .

we evaluate all cases each reporting period and record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount , or potential range , of loss can be reasonably estimated .
in certain cases , we cannot reasonably estimate the potential loss because , for example , the litigation is in its early stages .

while any outcome related to litigation or such governmental proceedings in which we are involved cannot be predicted with certainty , management believes that the outcome of these matters , individually and in the aggregate , will not have a material adverse effect on our financial condition , results of operations or cash flows .

as previously disclosed , on april 10 , 2015 , a federal judge in brazil authorized the search of the records of an agency 2019s offices in s e3o paulo and brasilia , in connection with an ongoing investigation by brazilian authorities involving payments potentially connected to local government contracts .
the company had previously investigated the matter and taken a number of remedial and disciplinary actions .

the company has been in the process of concluding a settlement related to these matters with government agencies , and that settlement was fully executed in april 2018 .
the company has previously provided for such settlement in its consolidated financial statements.

 |
| table | | 2019   | 2020   | 2021   | 2022   | 2023   | thereafter | total
--------------------------------------------------------------------- | ------ | ------ | ------ | ------ | ------ | ---------- | -------
deferred acquisition payments                                         | $ 65.7 | $ 20.0 | $ 23.6 | $ 4.7  | $ 10.2 | $ 2.7      | $ 126.9
redeemable noncontrolling interests and call options with affiliates1 | 30.1   | 30.6   | 42.9   | 5.7    | 3.5    | 2.5        | 115.3
total contingent acquisition payments                                 | $ 95.8 | $ 50.6 | $ 66.5 | $ 10.4 | $ 13.7 | $ 5.2      | $ 242.2 |


| _id | dd4b88aa6 |
| title |  |
| text | notes to consolidated financial statements at december 31 , 2007 , future minimum rental payments required under operating leases for continuing operations that have initial or remaining noncancelable lease terms in excess of one year , net of sublease rental income , most of which pertain to real estate leases , are as follows : ( millions ) .

aon corporation

 |
| table | 2008                            | $ 317
------------------------------- | ------
2009                            | 275
2010                            | 236
2011                            | 214
2012                            | 191
later years                     | 597
total minimum payments required | $ 1830 |


| _id | dd4c3b2b4 |
| title |  |
| text | ( v ) bankruptcy , insolvency , or other similar proceedings , ( vi ) our inability to pay debts , ( vii ) judgment defaults of $ 15 million or more , ( viii ) customary erisa and environmental defaults , ( ix ) actual or asserted invalidity of any material provision of the loan documentation or impairment of a portion of the collateral , ( x ) failure of subordinated indebtedness to be validly and sufficiently subordinated , and ( xi ) a change of control .

borrowings under the credit agreement accrue interest at variable rates , which depend on the type ( u.s .
dollar or canadian dollar ) and duration of the borrowing , plus an applicable margin rate .
the weighted-average interest rates , including the effect of interest rate swap agreements , on borrowings outstanding against our senior secured credit facility at december 31 , 2010 and 2009 were 3.97% ( 3.97 % ) and 4.53% ( 4.53 % ) , respectively .

borrowings against the senior secured credit facility totaled $ 590.1 million and $ 595.7 million at december 31 , 2010 and 2009 , respectively , of which $ 50.0 million and $ 7.5 million were classified as current maturities , respectively .
we also incur commitment fees on the unused portion of our revolving credit facility ranging from 0.38% ( 0.38 % ) to 0.50% ( 0.50 % ) .

as part of the consideration for business acquisitions completed during 2010 , 2009 and 2008 , we issued promissory notes totaling approximately $ 5.5 million , $ 1.2 million and $ 1.6 million , respectively .
the notes bear interest at annual rates of 2.0% ( 2.0 % ) to 4.0% ( 4.0 % ) , and interest is payable at maturity or in monthly installments .
note 6 .

note 6 .
derivative instruments and hedging activities we are exposed to market risks , including the effect of changes in interest rates , foreign currency exchange rates and commodity prices .
under our current policies , we use derivatives to manage our exposure to variable interest rates on our credit agreement , but we do not attempt to hedge our foreign currency and commodity price risks .
we do not hold or issue derivatives for trading purposes .

at december 31 , 2010 , we had interest rate swap agreements in place to hedge a portion of the variable interest rate risk on our variable rate term loans , with the objective of minimizing the impact of interest rate fluctuations and stabilizing cash flows .

beginning on the effective dates of the interest rate swap agreements , on a monthly basis through the maturity date , we have paid and will pay the fixed interest rate and have received and will receive payment at a variable rate of interest based on the london interbank offered rate ( 201clibor 201d ) on the notional amount .
the interest rate swap agreements qualify as cash flow hedges , and we have elected to apply hedge accounting for these swap agreements .

as a result , the effective portion of changes in the fair value of the interest rate swap agreements is recorded in other comprehensive income and is reclassified to interest expense when the underlying interest payment has an impact on earnings .
the ineffective portion of changes in the fair value of the interest rate swap agreements is reported in interest expense .
the following table summarizes the terms of our interest rate swap agreements as of december 31 , 2010: .

* includes applicable margin of 2.25% ( 2.25 % ) per annum currently in effect under the credit agreement as of december 31 , 2010 , the fair market value of the $ 200 million notional amount swap was a liability of $ 1.4 million , included in other accrued expenses on our consolidated balance sheet .
the fair market value of the other swap contracts was an asset of $ 4.8 million , included in other assets on our consolidated balance sheet as of december 31 , 2010 .

as of december 31 , 2009 , the fair market value of the interest rate swap contracts was a liability of $ 10.2 million and was included in other accrued expenses ( $ 5.0 million ) and other noncurrent liabilities ( $ 5.2 million ) on our consolidated balance sheet.

 |
| table | notional amount | effective date  | maturity date   | fixed interest rate*
--------------- | --------------- | --------------- | --------------------
$ 200000000     | april 14 2008   | april 14 2011   | 4.99% ( 4.99 % )
$ 250000000     | october 14 2010 | october 14 2015 | 3.81% ( 3.81 % )
$ 100000000     | april 14 2011   | october 14 2013 | 3.34% ( 3.34 % ) |


| _id | dd4bfadae |
| title |  |
| text | republic services , inc .
notes to consolidated financial statements 2014 ( continued ) charges or other amounts due that are probable at settlement .
the aggregate cash surrender value of these life insurance policies was $ 90.5 million and $ 77.1 million as of december 31 , 2015 and 2014 , respectively , and is classified in other assets in our consolidated balance sheets .

the dcp liability was $ 83.3 million and $ 76.3 million as of december 31 , 2015 and 2014 , respectively , and is classified in other long-term liabilities in our consolidated balance sheets .
employee stock purchase plan republic employees are eligible to participate in an employee stock purchase plan .
the plan allows participants to purchase our common stock for 95% ( 95 % ) of its quoted market price on the last day of each calendar quarter .

for the years ended december 31 , 2015 , 2014 and 2013 , issuances under this plan totaled 141055 shares , 139941 shares and 142217 shares , respectively .
as of december 31 , 2015 , shares reserved for issuance to employees under this plan totaled 0.6 million and republic held employee contributions of approximately $ 1.4 million for the purchase of common stock .
12 .

12 .
stock repurchases and dividends stock repurchases stock repurchase activity during the years ended december 31 , 2015 and 2014 follows ( in millions except per share amounts ) : .

as of december 31 , 2015 , 0.1 million repurchased shares were pending settlement and $ 3.7 million were unpaid and included within our accrued liabilities .
in october 2015 , our board of directors added $ 900.0 million to the existing share repurchase authorization , which now extends through december 31 , 2017 .
share repurchases under the program may be made through open market purchases or privately negotiated transactions in accordance with applicable federal securities laws .

while the board of directors has approved the program , the timing of any purchases , the prices and the number of shares of common stock to be purchased will be determined by our management , at its discretion , and will depend upon market conditions and other factors .
the share repurchase program may be extended , suspended or discontinued at any time .
as of december 31 , 2015 , the october 2015 repurchase program had remaining authorized purchase capacity of $ 855.5 million .

in december 2015 , our board of directors changed the status of 71272964 treasury shares to authorized and unissued .
in doing so , the number of our issued shares was reduced by the stated amount .
our accounting policy is to deduct the par value from common stock and to reflect the excess of cost over par value as a deduction from additional paid-in capital .

the change in unissued shares resulted in a reduction of $ 2295.3 million in treasury stock , $ 0.6 million in common stock , and $ 2294.7 million in additional paid-in capital .
there was no effect on our total stockholders 2019 equity position as a result of the change .
dividends in october 2015 , our board of directors approved a quarterly dividend of $ 0.30 per share .

cash dividends declared were $ 404.3 million , $ 383.6 million and $ 357.3 million for the years ended december 31 , 2015 , 2014 and 2013 , respectively .
as of december 31 , 2015 , we recorded a quarterly dividend payable of $ 103.7 million to shareholders of record at the close of business on january 4 , 2016.

 |
| table | | 2015    | 2014
------------------------------- | ------- | -------
number of shares repurchased    | 9.8     | 11.1
amount paid                     | $ 404.7 | $ 400.4
weighted average cost per share | $ 41.39 | $ 35.92 |


| _id | dd4b9c222 |
| title |  |
| text | management 2019s discussion and analysis we believe our credit ratings are primarily based on the credit rating agencies 2019 assessment of : 2030 our liquidity , market , credit and operational risk management practices ; 2030 the level and variability of our earnings ; 2030 our capital base ; 2030 our franchise , reputation and management ; 2030 our corporate governance ; and 2030 the external operating environment , including , in some cases , the assumed level of government or other systemic support .

certain of our derivatives have been transacted under bilateral agreements with counterparties who may require us to post collateral or terminate the transactions based on changes in our credit ratings .
we assess the impact of these bilateral agreements by determining the collateral or termination payments that would occur assuming a downgrade by all rating agencies .

a downgrade by any one rating agency , depending on the agency 2019s relative ratings of us at the time of the downgrade , may have an impact which is comparable to the impact of a downgrade by all rating agencies .

we allocate a portion of our gcla to ensure we would be able to make the additional collateral or termination payments that may be required in the event of a two-notch reduction in our long-term credit ratings , as well as collateral that has not been called by counterparties , but is available to them .

the table below presents the additional collateral or termination payments related to our net derivative liabilities under bilateral agreements that could have been called at the reporting date by counterparties in the event of a one-notch and two-notch downgrade in our credit ratings. .

$ in millions 2014 2013 additional collateral or termination payments for a one-notch downgrade $ 1072 $ 911 additional collateral or termination payments for a two-notch downgrade 2815 2989 cash flows as a global financial institution , our cash flows are complex and bear little relation to our net earnings and net assets .

consequently , we believe that traditional cash flow analysis is less meaningful in evaluating our liquidity position than the liquidity and asset-liability management policies described above .
cash flow analysis may , however , be helpful in highlighting certain macro trends and strategic initiatives in our businesses .
year ended december 2014 .
our cash and cash equivalents decreased by $ 3.53 billion to $ 57.60 billion at the end of 2014 .

we used $ 22.53 billion in net cash for operating and investing activities , which reflects an initiative to reduce our balance sheet , and the funding of loans receivable .
we generated $ 19.00 billion in net cash from financing activities from an increase in bank deposits and net proceeds from issuances of unsecured long-term borrowings , partially offset by repurchases of common stock .
year ended december 2013 .

year ended december 2013 .
our cash and cash equivalents decreased by $ 11.54 billion to $ 61.13 billion at the end of 2013 .
we generated $ 4.54 billion in net cash from operating activities .
we used net cash of $ 16.08 billion for investing and financing activities , primarily to fund loans receivable and repurchases of common stock .
year ended december 2012 .
our cash and cash equivalents increased by $ 16.66 billion to $ 72.67 billion at the end of 2012 .

we generated $ 9.14 billion in net cash from operating and investing activities .
we generated $ 7.52 billion in net cash from financing activities from an increase in bank deposits , partially offset by net repayments of unsecured and secured long-term borrowings .
78 goldman sachs 2014 annual report

 |
| table | $ in millions                                                           | as of december 2014 | as of december 2013
----------------------------------------------------------------------- | ------------------- | -------------------
additional collateral or termination payments for a one-notch downgrade | $ 1072              | $ 911
additional collateral or termination payments for a two-notch downgrade | 2815                | 2989 |


| _id | dd4bf3770 |
| title |  |
| text | adobe systems incorporated notes to consolidated financial statements ( continued ) foreign currency translation we translate assets and liabilities of foreign subsidiaries , whose functional currency is their local currency , at exchange rates in effect at the balance sheet date .
we translate revenue and expenses at the monthly average exchange rates .
we include accumulated net translation adjustments in stockholders 2019 equity as a component of accumulated other comprehensive income .

property and equipment we record property and equipment at cost less accumulated depreciation and amortization .
property and equipment are depreciated using the straight-line method over their estimated useful lives ranging from 1 to 5 years for computers and equipment , 1 to 6 years for furniture and fixtures and up to 35 years for buildings .
leasehold improvements are amortized using the straight-line method over the lesser of the remaining respective lease term or useful lives .

goodwill , purchased intangibles and other long-lived assets we review our goodwill for impairment annually , or more frequently , if facts and circumstances warrant a review .
we completed our annual impairment test in the second quarter of fiscal 2009 and determined that there was no impairment .
goodwill is assigned to one or more reporting segments on the date of acquisition .

we evaluate goodwill for impairment by comparing the fair value of each of our reporting segments to its carrying value , including the associated goodwill .
to determine the fair values , we use the market approach based on comparable publicly traded companies in similar lines of businesses and the income approach based on estimated discounted future cash flows .
our cash flow assumptions consider historical and forecasted revenue , operating costs and other relevant factors .

we amortize intangible assets with finite lives over their estimated useful lives and review them for impairment whenever an impairment indicator exists .
we continually monitor events and changes in circumstances that could indicate carrying amounts of our long-lived assets , including our intangible assets may not be recoverable .

when such events or changes in circumstances occur , we assess recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows .
if the future undiscounted cash flows are less than the carrying amount of these assets , we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets .
we did not recognize any intangible asset impairment charges in fiscal 2009 , 2008 or 2007 .

our intangible assets are amortized over their estimated useful lives of 1 to 13 years as shown in the table below .
amortization is based on the pattern in which the economic benefits of the intangible asset will be consumed .
weighted average useful life ( years ) .

software development costs capitalization of software development costs for software to be sold , leased , or otherwise marketed begins upon the establishment of technological feasibility , which is generally the completion of a working prototype that has been certified as having no critical bugs and is a release candidate .
amortization begins once the software is ready for its intended use , generally based on the pattern in which the economic benefits will be consumed .

to date , software development costs incurred between completion of a working prototype and general availability of the related product have not been material .
revenue recognition our revenue is derived from the licensing of software products , consulting , hosting services and maintenance and support .
primarily , we recognize revenue when persuasive evidence of an arrangement exists , we have delivered the product or performed the service , the fee is fixed or determinable and collection is probable.

 |
| table | | weighted average useful life ( years )
------------------------------------ | --------------------------------------
purchased technology                 | 7
localization                         | 1
trademarks                           | 7
customer contracts and relationships | 10
other intangibles                    | 2 |


| _id | dd4bdfc34 |
| title |  |
| text | intangible assets such as patents , customer-related intangible assets and other intangible assets with finite useful lives are amortized on a straight-line basis over their estimated economic lives .
the weighted-average useful lives approximate the following: .

recoverability of intangible assets with finite useful lives is assessed in the same manner as property , plant and equipment as described above .
income taxes : for purposes of the company 2019s consolidated financial statements for periods prior to the spin-off , income tax expense has been recorded as if the company filed tax returns on a stand-alone basis separate from ingersoll rand .

this separate return methodology applies the accounting guidance for income taxes to the stand-alone financial statements as if the company was a stand-alone enterprise for the periods prior to the spin-off .
therefore , cash tax payments and items of current and deferred taxes may not be reflective of the company 2019s actual tax balances prior to or subsequent to the spin-off .

cash paid for income taxes , net of refunds for the twelve months ended december 31 , 2016 and 2015 was $ 10.4 million and $ 80.6 million , respectively .
the 2016 net cash income taxes paid includes a refund of $ 46.2 million received from the canadian tax authorities .
the income tax accounts reflected in the consolidated balance sheet as of december 31 , 2016 and 2015 include income taxes payable and deferred taxes allocated to the company at the time of the spin-off .

the calculation of the company 2019s income taxes involves considerable judgment and the use of both estimates and allocations .
deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities , applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse .

the company recognizes future tax benefits , such as net operating losses and tax credits , to the extent that realizing these benefits is considered in its judgment to be more likely than not .
the company regularly reviews the recoverability of its deferred tax assets considering its historic profitability , projected future taxable income , timing of the reversals of existing temporary differences and the feasibility of its tax planning strategies .

where appropriate , the company records a valuation allowance with respect to a future tax benefit .
product warranties : standard product warranty accruals are recorded at the time of sale and are estimated based upon product warranty terms and historical experience .
the company assesses the adequacy of its liabilities and will make adjustments as necessary based on known or anticipated warranty claims , or as new information becomes available .

revenue recognition : revenue is recognized and earned when all of the following criteria are satisfied : ( a ) persuasive evidence of a sales arrangement exists ; ( b ) the price is fixed or determinable ; ( c ) collectability is reasonably assured ; and ( d ) delivery has occurred or service has been rendered .
delivery generally occurs when the title and the risks and rewards of ownership have transferred to the customer .

both the persuasive evidence of a sales arrangement and fixed or determinable price criteria are deemed to be satisfied upon receipt of an executed and legally binding sales agreement or contract that clearly defines the terms and conditions of the transaction including the respective obligations of the parties .
if the defined terms and conditions allow variability in all or a component of the price , revenue is not recognized until such time that the price becomes fixed or determinable .

at the point of sale , the company validates the existence of an enforceable claim that requires payment within a reasonable amount of time and assesses the collectability of that claim .
if collectability is not deemed to be reasonably assured , then revenue recognition is deferred until such time that collectability becomes probable or cash is received .
delivery is not considered to have occurred until the customer has taken title and assumed the risks and rewards of ownership .

service and installation revenue are recognized when earned .
in some instances , customer acceptance provisions are included in sales arrangements to give the buyer the ability to ensure the delivered product or service meets the criteria established in the order .
in these instances , revenue recognition is deferred until the acceptance terms specified in the arrangement are fulfilled through customer acceptance or a demonstration that established criteria have been satisfied .

if uncertainty exists about customer acceptance , revenue is not recognized until acceptance has occurred .
the company offers various sales incentive programs to our customers , dealers , and distributors .
sales incentive programs do not preclude revenue recognition , but do require an accrual for the company 2019s best estimate of expected activity .

examples of the sales incentives that are accrued for as a contra receivable and sales deduction at the point of sale include , but are not limited to , discounts ( i.e .
net 30 type ) , coupons , and rebates where the customer does not have to provide any additional requirements to receive the discount .
sales returns and customer disputes involving a question of quantity or price are also accounted for as a

 |
| table | customer relationships       | 25 | years
---------------------------- | -- | -----
trademarks                   | 25 | years
completed technology/patents | 10 | years
other                        | 25 | years |


| _id | dd4bb5506 |
| title |  |
| text | stock price performance the following graph shows a comparison of the cumulative total return on our common stock , the standard & poor 2019s 500 index and the standard & poor 2019s retail index .
the graph assumes that the value of an investment in our common stock and in each such index was $ 100 on december 31 , 2011 , and that any dividends have been reinvested .

the comparison in the graph below is based solely on historical data and is not intended to forecast the possible future performance of our common stock .
comparison of cumulative total return among advance auto parts , inc. , s&p 500 index and s&p retail index company/index december 31 , december 29 , december 28 , january 3 , january 2 , december 31 .

 |
| table | company/index      | december 31 2011 | december 29 2012 | december 28 2013 | january 3 2015 | january 2 2016 | december 31 2016
------------------ | ---------------- | ---------------- | ---------------- | -------------- | -------------- | ----------------
advance auto parts | $ 100.00         | $ 102.87         | $ 158.46         | $ 228.88       | $ 217.49       | $ 244.64
s&p 500 index      | 100.00           | 114.07           | 152.98           | 174.56         | 177.01         | 198.18
s&p retail index   | 100.00           | 122.23           | 178.55           | 196.06         | 245.31         | 256.69 |


| _id | dd4ba4ad0 |
| title |  |
| text | management 2019s discussion and analysis 132 jpmorgan chase & co./2010 annual report unpaid principal balance due to negative amortization of option arms was $ 24 million and $ 78 million at december 31 , 2010 and 2009 , respectively .
the firm estimates the following balances of option arm loans will experience a recast that results in a payment increase : $ 72 million in 2011 , $ 241 million in 2012 and $ 784 million in 2013 .

the firm did not originate option arms and new originations of option arms were discontinued by washington mutual prior to the date of jpmorgan chase 2019s acquisition of its banking operations .
subprime mortgages at december 31 , 2010 were $ 11.3 billion , compared with $ 12.5 billion at december 31 , 2009 .
the decrease was due to paydowns and charge-offs on delinquent loans , partially offset by the addition of loans as a result of the adoption of the accounting guidance related to vies .

late-stage delinquencies remained elevated but continued to improve , albeit at a slower rate during the second half of the year , while early-stage delinquencies stabilized at an elevated level during this period .
nonaccrual loans improved largely as a result of the improvement in late-stage delinquencies .
charge-offs reflected modest improvement .
auto : auto loans at december 31 , 2010 , were $ 48.4 billion , compared with $ 46.0 billion at december 31 , 2009 .

delinquent and nonaccrual loans have decreased .
in addition , net charge-offs have declined 52% ( 52 % ) from the prior year .
provision expense de- creased due to favorable loss severity as a result of a strong used- car market nationwide and reduced loss frequency due to the tightening of underwriting criteria in earlier periods .
the auto loan portfolio reflected a high concentration of prime quality credits .

business banking : business banking loans at december 31 , 2010 , were $ 16.8 billion , compared with $ 17.0 billion at december 31 , 2009 .
the decrease was primarily a result of run-off of the washington mutual portfolio and charge-offs on delinquent loans .
these loans primarily include loans which are highly collateralized , often with personal loan guarantees .
nonaccrual loans continued to remain elevated .

nonaccrual loans continued to remain elevated .
after having increased during the first half of 2010 , nonaccrual loans as of december 31 , 2010 , declined to year-end 2009 levels .
student and other : student and other loans at december 31 , 2010 , including loans held-for-sale , were $ 15.3 billion , compared with $ 16.4 billion at december 31 , 2009 .
other loans primarily include other secured and unsecured consumer loans .

delinquencies reflected some stabilization in the second half of 2010 , but remained elevated .
charge-offs during 2010 remained relatively flat with 2009 levels reflecting the impact of elevated unemployment levels .
purchased credit-impaired loans : pci loans at december 31 , 2010 , were $ 72.8 billion compared with $ 81.2 billion at december 31 , 2009 .
this portfolio represents loans acquired in the washing- ton mutual transaction that were recorded at fair value at the time of acquisition .

that fair value included an estimate of credit losses expected to be realized over the remaining lives of the loans , and therefore no allowance for loan losses was recorded for these loans as of the acquisition date .
the firm regularly updates the amount of principal and interest cash flows expected to be collected for these loans .
probable decreases in expected loan principal cash flows would trigger the recognition of impairment through the provision for loan losses .

probable and significant increases in expected cash flows ( e.g. , decreased principal credit losses , the net benefit of modifications ) would first reverse any previously recorded allowance for loan losses , with any remaining increase in the expected cash flows recognized prospectively in interest income over the remaining estimated lives of the underlying loans .

during 2010 , management concluded as part of the firm 2019s regular assessment of the pci pools that it was probable that higher expected principal credit losses would result in a decrease in expected cash flows .
accordingly , the firm recognized an aggregate $ 3.4 billion impairment related to the home equity , prime mortgage , option arm and subprime mortgage pci portfolios .

as a result of this impairment , the firm 2019s allowance for loan losses for the home equity , prime mortgage , option arm and subprime mortgage pci portfolios was $ 1.6 billion , $ 1.8 billion , $ 1.5 billion and $ 98 million , respectively , at december 31 , 2010 , compared with an allowance for loan losses of $ 1.1 billion and $ 491 million for the prime mortgage and option arm pci portfolios , respectively , at december 31 , 2009 .

approximately 39% ( 39 % ) of the option arm borrowers were delinquent , 5% ( 5 % ) were making interest-only or negatively amortizing payments , and 56% ( 56 % ) were making amortizing payments .
approximately 50% ( 50 % ) of current borrowers are subject to risk of payment shock due to future payment recast ; substantially all of the remaining loans have been modified to a fixed rate fully amortizing loan .

the cumulative amount of unpaid interest added to the unpaid principal balance of the option arm pci pool was $ 1.4 billion and $ 1.9 billion at de- cember 31 , 2010 and 2009 , respectively .
the firm estimates the following balances of option arm pci loans will experience a recast that results in a payment increase : $ 1.2 billion in 2011 , $ 2.7 billion in 2012 and $ 508 million in 2013 .

the following table provides a summary of lifetime loss estimates included in both the nonaccretable difference and the allowance for loan losses .
principal charge-offs will not be recorded on these pools until the nonaccretable difference has been fully depleted .
lifetime loss estimates ( a ) ltd liquidation losses ( b ) .

( a ) includes the original nonaccretable difference established in purchase accounting of $ 30.5 billion for principal losses only .
the remaining nonaccretable difference for principal losses only was $ 14.1 billion and $ 21.1 billion at december 31 , 2010 and 2009 , respectively .
all probable increases in principal losses and foregone interest subsequent to the purchase date are reflected in the allowance for loan losses .

( b ) life-to-date ( 201cltd 201d ) liquidation losses represent realization of loss upon loan resolution.

 |
| table | december 31 ( in millions ) | lifetime loss estimates ( a ) 2010 | lifetime loss estimates ( a ) 2009 | lifetime loss estimates ( a ) 2010 | 2009
--------------------------- | ---------------------------------- | ---------------------------------- | ---------------------------------- | ------
option arms                 | $ 11588                            | $ 10650                            | $ 4860                             | $ 1744
home equity                 | 14698                              | 13138                              | 8810                               | 6060
prime mortgage              | 4870                               | 4240                               | 1495                               | 794
subprime mortgage           | 3732                               | 3842                               | 1250                               | 796
total                       | $ 34888                            | $ 31870                            | $ 16415                            | $ 9394 |