Trading Risk and Return Daily Trading-Related Revenue and VAR
## Table 0 ##
The graph above shows daily trading-related revenue and VAR excluding the discrete writedowns on our super senior CDO exposure for the twelve months ended December 31, 2007.
Excluding these writedowns, actual losses exceeded daily trading VAR fourteen times in the twelve months ended December 31, 2007 and losses did not exceed daily trading VAR in the twelve months ended December 31, 2006.
The losses that exceeded daily trading VAR for the twelve months ended December 31, 2007, occurred during the market disruption which took place during the second half of 2007.
The sudden increase in market volatility during this period produced a large number of price changes that exceeded the 99th percentile of the three year history used for our VAR calculations.
Table 28 presents average, high and low daily trading VAR for the twelve months ended December 31, 2007 and 2006.
The increase in average VAR from 2006 was driven by the increased market volatility during the second half of 2007.
In particular, with the dislocation in structured and credit products, many credit spreads used in the calculation of VAR increased by unprecedented amounts.
In addition, many trading assets became extremely illiquid which required changes in assumptions to properly incorporate them in the VAR model as was the case with our CDO exposure for which we have updated our model at various times during the second half of 2007.
In periods of stress, the GRC members communicate daily to discuss losses, VAR limit excesses and the impact to regulatory capital.
As a result of this process, the lines of business may selectively reduce risk.
Where economically feasible, positions are sold or macro economic hedges are executed to reduce the exposure.
Stress Testing Because the very nature of a VAR model suggests results can exceed our estimates, we also “stress test” our portfolio.
Stress testing estimates the value change in our trading portfolio that may result from abnormal market movements.
Various types of stress tests are run regularly against the overall trading portfolio and individual businesses.
Historical scenarios simulate the impact of price changes which occurred during a set of extended historical market events.
The results of these scenarios are reported daily to management.
During the twelve months ended December 31, 2007, the largest daily losses among these scenarios ranged from $9 million to $529 million.
Table 28 Trading Activities Market Risk(1)
(1) Excludes our discrete writedowns on super senior CDO exposure.
For more information on the CDO writedowns and the impact of the market disruption on the Corporation’s results, see the CDO discussion beginning on page 53.
(2) The high and low for the total portfolio may not equal the sum of the individual components as the highs or lows of the individual portfolios may have occurred on different trading days.
(3) For a discussion of the VAR related to the credit derivatives that economically hedge the loan portfolio, see Industry Concentrations beginning on page 79.
The table above does not include credit protection purchased to manage our counterparty credit risk.
During the three months ended December 31, 2007, the average VAR of this protection was $9 million.
Notes to the Consolidated Financial Statements On March 18, 2008, PPG completed a public offering of $600 million in aggregate principal amount of its 5.75% Notes due 2013 (the “2013 Notes”), $700 million in aggregate principal amount of its 6.65% Notes due 2018 (the “2018 Notes”) and $250 million in aggregate principal amount of its 7.70% Notes due 2038 (the “2038 Notes” and, together with the 2013 Notes and the 2018 Notes, the “Notes”).
The Notes were offered by the Company pursuant to its existing shelf registration.
The proceeds of this offering of $1,538 million (net of discount and issuance costs) and additional borrowings of Notes to the Consolidated Financial Statements On March 18, 2008, PPG completed a public offering of $600 million in aggregate principal amount of its 5.75% Notes due 2013 (the ¡°2013 Notes¡±), $700 million in aggregate principal amount of its 6.65% Notes due 2018 (the ¡°2018 Notes¡±) and $250 million in aggregate principal amount of its 7.70% Notes due 2038 (the ¡°2038 Notes¡± and, together with the 2013 Notes and the 2018 Notes, the ¡°Notes¡±).
The Notes were offered by the Company pursuant to its existing shelf registration.
The proceeds of this offering of $1,538 million (net of discount and issuance costs) and additional borrowings of $195 million under the €650 million revolving credit facility were used to repay existing debt, including certain short-term debt and the amounts outstanding under the €1 billion bridge loan.
No further amounts can be borrowed under the €1 billion bridge loan.
The discount and issuance costs related to the Notes, which totaled $12 million, will be amortized to interest expense over the respective lives of the Notes.
Short-term debt outstanding as of December 31, 2008 and 2007, was as follows:
## Table 1 ##
(1) Borrowings under this facility have a term of 30 days and can be rolled over monthly until the facility expires in 2010.
PPG is in compliance with the restrictive covenants under its various credit agreements, loan agreements and indentures.
The Company¡¯s revolving credit agreements include a financial ratio covenant.
The covenant requires that the amount of total indebtedness not exceed 60% of the Company¡¯s total capitalization excluding the portion of accumulated other comprehensive income (loss) related to pensions and other postretirement benefit adjustments.
As of December 31, 2008, total indebtedness was 45% of the Company¡¯s total capitalization excluding the portion of accumulated other comprehensive income (loss) related to pensions and other postretirement benefit adjustments.
Additionally, substantially all of the Company¡¯s debt agreements contain customary crossdefault provisions.
Those provisions generally provide that a default on a debt service payment of $10 million or more for longer than the grace period provided (usually 10 days) under one agreement may result in an event of default under other agreements.
None of the Company¡¯s primary debt obligations are secured or guaranteed by the Company¡¯s affiliates.
Interest payments in 2008, 2007 and 2006 totaled $228 million, $102 million and $90 million, respectively.
Rental expense for operating leases was $267 million, $188 million and $161 million in 2008, 2007 and 2006, respectively.
The primary leased assets include paint stores, transportation equipment, warehouses and other distribution facilities, and office space, including the Company¡¯s corporate headquarters located in Pittsburgh, Pa.
Minimum lease commitments for operating leases that have initial or remaining lease terms in excess of one year as of December 31, 2008, are (in millions) $126 in 2009, $107 in 2010, $82 in 2011, $65 in 2012, $51 in 2013 and $202 thereafter.
The Company had outstanding letters of credit of $82 million as of December 31, 2008.
The letters of credit secure the Company¡¯s performance to third parties under certain self-insurance programs and other commitments made in the ordinary course of business.
As of December 31, 2008 and 2007 guarantees outstanding were $70 million.
The guarantees relate primarily to debt of certain entities in which PPG has an ownership interest and selected customers of certain of the Company¡¯s businesses.
A portion of such debt is secured by the assets of the related entities.
The carrying values of these guarantees were $9 million and $3 million as of December 31, 2008 and 2007, respectively, and the fair values were $40 million and $17 million, as of December 31, 2008 and 2007, respectively.
The Company does not believe any loss related to these letters of credit or guarantees is likely.10.
Financial Instruments, Excluding Derivative Financial Instruments Included in PPG¡¯s financial instrument portfolio are cash and cash equivalents, cash held in escrow, marketable equity securities, company-owned life insurance and short- and long-term debt instruments.
The fair values of the financial instruments approximated their carrying values, in the aggregate, except for long-term debt.
Long-term debt (excluding capital lease obligations), had carrying and fair values totaling $3,122 million and $3,035 million, respectively, as of December 31, 2008.
The corresponding amounts as of December 31, 2007, were $1,201 million and $1,226 million, respectively.
The fair values of the debt instruments were based on discounted cash flows and interest rates currently available to the Company for instruments of the same remaining maturities.
In 2016, advertising revenue increased by 13% compared to 2015.
Foreign exchange effect did not have a material impact on advertising revenue in 2016.
The substantial majority of our advertising revenue was generated from our owned and operated platform.
Advertising revenue generated from the sale of our advertising products on our owned and operated platform in 2016 was $1.99 billion as compared to $1.80 billion in 2015.
Advertising revenue generated from the sale of our advertising products placed on third-party publishers’ websites, applications and other offerings in 2016 was $260.2 million as compared to $194.2 million in 2015, which increase was driven, in part, by the acquisition of TellApart in May 2015 and from the growth of sales in our organically-built advertising network, Twitter Audience Platform.
The overall increase in advertising revenue was primarily attributable to a 152% increase in the number of ad engagements offset by a 55% decrease in average cost per ad engagement in 2016 compared to 2015.
The increase in ad engagements was driven by continued adoption of auto-play video and an increase in ad load.
The decrease in average cost per ad engagement was due primarily to the shift to auto-play video, which delivers more engagement at a much lower average cost per engagement than click-to-play video ads and decreases in same-format prices for most of our other advertising products.
Advertising revenue continued to be driven by growth in demand for our advertising products, particularly video as well as growth in our advertising base.
Strength from our video ad format, however, was offset by year-over-year declines in revenue generated from our traditional Promoted Tweet ad format.
In 2016, data licensing and other revenue increased by 26% compared to 2015.
The increase was primarily attributable to growth in mobile advertising exchange services and to a lesser extent an increase in data licensing fees from the offering of data products.
Cost of Revenue Cost of revenue includes infrastructure costs, other direct costs including content costs, amortization of acquired intangible assets and amortization of capitalized labor costs for internally developed software, allocated facilities costs, as well as traffic acquisition costs, or TAC.
Infrastructure costs consist primarily of data center costs related to our co-located facilities, which include lease and hosting costs, related support and maintenance costs and energy and bandwidth costs; as well as depreciation of servers and networking equipment; and personnel-related costs, including salaries, benefits and stock-based compensation, for our operations teams.
TAC consists of costs we incur with third parties in connection with the sale to advertisers of our advertising products that we place on third-party publishers’ websites, applications or other offerings collectively resulting from acquisitions, and from our organically-built advertising network, Twitter Audience Platform.
Many of the elements of our cost of revenue are fixed, and cannot be reduced in the near term.
## Table 2 ##
2017 Compared to 2016.
In 2017, cost of revenue decreased by $71.0 million compared to 2016.
The decrease was attributable to a $48.6 million decrease in restructuring expenses, a $45.3 million decrease in infrastructure costs, a $42.7 million decrease in TAC substantially due to the decrease in advertising revenue generated from TellApart (which we deprecated in 2017), and a $3.5 million decrease in personnel-related costs.
These decreases were offset by a $55.5 million increase in other direct costs that is primarily driven by an increase in content costs, and a $13.6 million increase in depreciation and amortization expense primarily related to additional internally developed software, server and networking equipment.2016 Compared to 2015.
In 2016, cost of revenue, which included TAC of $141.6 million, increased by $203.0 million compared to 2015.
The increase was primarily attributable to a $63.4 million increase in networking, hosting and data center costs related to our co-located facilities, a $54.6 million increase in depreciation expense related to additional server and networking equipment and amortization of acquired intangible assets, a $47.9 million increase in restructuring expenses as a result of lease write-offs, a $40.0 million increase in other direct costs, and a $19.7 million increase in TAC.
The increases were offset by a $22.6 million decrease in personnel-related costs, mainly driven by a decrease in average employee headcount and compensation expense.

<table><tr><td></td><td colspan="6"> Twelve Months Ended December 31</td></tr><tr><td></td><td colspan="3"> 2007  VAR</td><td colspan="3">2006 VAR</td></tr><tr><td>(Dollars in millions)</td><td>Average</td><td> High<sup>-2</sup></td><td> Low<sup>-2</sup></td><td>Average</td><td>High -2</td><td>Low<sup>-2</sup></td></tr><tr><td>Foreign exchange</td><td>$7.2</td><td>$25.3</td><td>$3.8</td><td>$8.2</td><td>$22.9</td><td>$3.1</td></tr><tr><td>Interest rate</td><td>13.9</td><td>31.9</td><td>6.6</td><td>18.5</td><td>50.0</td><td>7.3</td></tr><tr><td>Credit</td><td>39.5</td><td>69.9</td><td>23.4</td><td>26.8</td><td>36.7</td><td>18.4</td></tr><tr><td>Real estate/mortgage</td><td>14.1</td><td>23.5</td><td>5.7</td><td>8.4</td><td>12.7</td><td>4.7</td></tr><tr><td>Equities</td><td>24.6</td><td>45.8</td><td>9.6</td><td>18.8</td><td>39.6</td><td>9.9</td></tr><tr><td>Commodities</td><td>7.2</td><td>10.7</td><td>3.7</td><td>6.1</td><td>9.9</td><td>3.4</td></tr><tr><td>Portfolio diversification</td><td>-53.9</td><td>–</td><td>–</td><td>-45.5</td><td>–</td><td>–</td></tr><tr><td> Total market-based trading portfolio<sup>-3</sup></td><td>$52.6</td><td>$91.5</td><td>$32.9</td><td>$41.3</td><td>$59.8</td><td>$26.0</td></tr></table>
<table><tr><td><i>(Millions)</i></td><td>2008</td><td>2007</td></tr><tr><td>€1 billion bridge loan agreement, 5.2%</td><td>$—</td><td>$1,047</td></tr><tr><td>U.S. commercial paper, 5.3% as of Dec. 31, 2008</td><td>222</td><td>617</td></tr><tr><td>€650 million revolving credit facility, weighted average 2.9% as of Dec. 31, 2008<sup>-1</sup></td><td>200</td><td>—</td></tr><tr><td>Other, weighted average 4.0% as of Dec. 31, 2008</td><td>362</td><td>154</td></tr><tr><td><i></i> <i>Total</i></td><td>$784</td><td>$1,818</td></tr></table>
<table><tr><td></td><td colspan="3">Year Ended December 31,</td><td rowspan="2">2016 to 2017 % Change</td><td rowspan="2">2015 to 2016 % Change</td></tr><tr><td></td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td></td><td colspan="3">(in thousands)</td><td></td><td></td></tr><tr><td>Cost of revenue</td><td>$861,242</td><td>$932,240</td><td>$729,256</td><td>-8%</td><td>28%</td></tr><tr><td>Cost of revenue as a percentage of revenue</td><td>35%</td><td>37%</td><td>33%</td><td></td><td></td></tr></table>

Question: what was the percentage change in interest payments from 2006 to 2007?