NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 8—Commitments and Contingencies (Continued) provide renewal options for terms of 3 to 7 additional years.
Leases for retail space are for terms of 5 to 20 years, the majority of which are for 10 years, and often contain multi-year renewal options.
As of September 29, 2007, the Company’s total future minimum lease payments under noncancelable operating leases were $1.4 billion, of which $1.1 billion related to leases for retail space.
Rent expense under all operating leases, including both cancelable and noncancelable leases, was $151 million, $138 million, and $140 million in 2007, 2006, and 2005, respectively.
Future minimum lease payments under noncancelable operating leases having remaining terms in excess of one year as of September 29, 2007, are as follows (in millions):
## Table 0 ##
Accrued Warranty and Indemnifications The Company offers a basic limited parts and labor warranty on its hardware products.
The basic warranty period for hardware products is typically one year from the date of purchase by the end-user.
The Company also offers a 90-day basic warranty for its service parts used to repair the Company’s hardware products.
The Company provides currently for the estimated cost that may be incurred under its basic limited product warranties at the time related revenue is recognized.
Factors considered in determining appropriate accruals for product warranty obligations include the size of the installed base of products subject to warranty protection, historical and projected warranty claim rates, historical and projected cost-per-claim, and knowledge of specific product failures that are outside of the Company’s typical experience.
The Company assesses the adequacy of its preexisting warranty liabilities and adjusts the amounts as necessary based on actual experience and changes in future estimates.
For products accounted for under subscription accounting pursuant to SOP No.97-2, the Company recognizes warranty expense as incurred.
The Company periodically provides updates to its applications and system software to maintain the software’s compliance with specifications.
The estimated cost to develop such updates is accounted for as warranty costs that are recognized at the time related software revenue is recognized.
Factors considered in determining appropriate accruals related to such updates include the number of units delivered, the number of updates expected to occur, and the historical cost and estimated future cost of the resources necessary to develop these updates.
M&T BANK CORPORATION AND SUBSIDIARIES Notes to Financial Statements — (Continued) (a) Net interest income is the difference between actual taxable-equivalent interest earned on assets and interest paid on liabilities by a segment and a funding charge (credit) based on the Company’s internal funds transfer pricing methodology.
Segments are charged a cost to fund any assets (e. g.  loans) and are paid a funding credit for any funds provided (e. g.  deposits).
The taxable-equivalent adjustment aggregated $20,833,000 in 2007, $19,667,000 in 2006 and $17,311,000 in 2005 and is eliminated in “All Other” net interest income and income tax expense (benefit).
(b) Including the impact in the “All Other” category of the merger-related expenses described in note 2.
The Business Banking segment provides deposit, lending, cash management and other financial services to small businesses and professionals through the Company’s banking office network and several other delivery channels, including business banking centers, telephone banking, Internet banking and automated teller machines.
The Commercial Banking segment provides a wide range of credit products and banking services to middle-market and large commercial customers, largely within the markets the Company serves.
Among the services provided by this segment are commercial lending and leasing, letters of credit, deposit products and cash management services.
The Commercial Real Estate segment provides credit services which are secured by various types of multifamily residential and commercial real estate and deposit services to its customers.
Activities of this segment include the origination, sales and servicing of commercial real estate loans.
The Discretionary Portfolio segment includes securities, residential mortgage loans and other assets; short-term and long-term borrowed funds; brokered certificates of deposit and interest rate swap agreements related thereto; and offshore branch deposits.
This segment also provides foreign exchange services to customers.
The Residential Mortgage Banking segment originates and services residential mortgage loans for consumers and sells substantially all of those loans in the secondary market to investors or to the Discretionary Portfolio segment.
The segment periodically purchases servicing rights to loans that have been originated by other entities.
This segment also originates and services loans to developers of residential real estate properties.
Residential mortgage loans held for sale are included in the Residential Mortgage Banking segment.
The Retail Banking segment offers a variety of services to consumers through several delivery channels that include banking offices, automated teller machines, telephone banking and Internet banking.
The “All Other” category includes other operating activities of the Company that are not directly attributable to the reported segments as determined in accordance with SFAS No.131, the difference between the provision for credit losses and the calculated provision allocated to the reportable segments, goodwill and core deposit and other intangible assets resulting from acquisitions of financial institutions, M&T’s equity in the earnings of BLG, merger-related expenses resulting from acquisitions, the net impact of the Company’s internal funds transfer pricing methodology, eliminations of transactions between reportable segments, certain nonrecurring transactions, the residual effects of unallocated support systems and general and administrative expenses, and the impact of interest rate risk management strategies.
The amount of intersegment activity eliminated in arriving at consolidated totals was included in the “All Other” category as follows:
## Table 1 ##
The Company conducts substantially all of its operations in the United States.
There are no transactions with a single customer that in the aggregate result in revenues that exceed ten percent of consolidated total revenues.
Table 23 QUARTERLY TRENDS
## Table 2 ##
(a) Excludes impact of merger-related gains and expenses and net securities transactions.
(b) Excludes amortization and balances related to goodwill and core deposit and other intangible assets and merger-related gains and expenses which, except in the calculation of the efficiency ratio, are net of applicable income tax effects.
A reconciliation of net income and net operating income appears in Table 24.
(c) The difference between total assets and total tangible assets, and common shareholders’ equity and tangible common shareholders’ equity, represents goodwill, core deposit and other intangible assets, net of applicable deferred tax balances.
A reconciliation of such balances appears in Table 24.
higher level of resell agreements in 2010 as compared with 2009 and 2008 was due, in part, to the need to fulfill collateral requirements associated with certain municipal deposits.
Agreements to resell securities, of which there were none outstanding at the 2010 and 2009 year-ends, are accounted for similar to collateralized loans, with changes in market value of the collateral monitored by the Company to ensure sufficient coverage.
The amounts of investment securities and other earning assets held by the Company are influenced by such factors as demand for loans, which generally yield more than investment securities and other earning assets, ongoing repayments, the levels of deposits, and management of balance sheet size and resulting capital ratios.
The most significant source of funding for the Company is core deposits.
During 2010 and prior years, the Company considered noninterest-bearing deposits, interest-bearing transaction accounts, savings deposits and domestic time deposits under $100,000 as core deposits.
The Company’s branch network is its principal source of core deposits, which generally carry lower interest rates than wholesale funds of comparable maturities.
Certificates of deposit under $100,000 generated on a nationwide basis by M&T Bank, N. A.  were also included in core deposits.
Average core deposits totaled $43.6 billion in 2010, up from $39.1 billion in 2009 and $31.7 billion in 2008.
The K Bank acquisition transaction added $491 million of core deposits on November 5, 2010, while the acquisition transactions in 2009 added $3.8 billion of core deposits on the respective acquisition dates.
Average core deposits of M&T Bank, N. A.  were $217 million in 2010, $337 million in 2009 and $274 million in 2008.
Excluding deposits obtained in the acquisition transactions, the growth in core deposits from 2008 to 2009 and from 2009 to 2010 was due, in part, to the lack of attractive alternative investments available to the Company’s customers resulting from lower interest rates and from the economic environment in the U. S.  The low interest rate environment has resulted in a shift in customer savings trends, as average time deposits have continued to decline, while average noninterest-bearing deposits and savings deposits have increased.
Funding provided by core deposits represented 73% of average earning assets in 2010, compared with 66% and 55% in 2009 and 2008, respectively.
Table 8 summarizes average core deposits in 2010 and percentage changes in the components of such deposits over the past two years.
Table 8 AVERAGE CORE DEPOSITS

<table><tr><td>2008</td><td>$155</td></tr><tr><td>2009</td><td>172</td></tr><tr><td>2010</td><td>173</td></tr><tr><td>2011</td><td>160</td></tr><tr><td>2012</td><td>148</td></tr><tr><td>Thereafter</td><td>617</td></tr><tr><td>Total minimum lease payments</td><td>$1,425</td></tr></table>
<table><tr><td></td><td colspan="3">Year Ended December 31</td></tr><tr><td></td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td></td><td colspan="3">(In thousands)</td></tr><tr><td>Revenues</td><td>$-49,800</td><td>$-70,789</td><td>$-70,698</td></tr><tr><td>Expenses</td><td>-14,119</td><td>-20,760</td><td>-18,445</td></tr><tr><td>Income taxes (benefit)</td><td>-14,519</td><td>-20,357</td><td>-21,262</td></tr><tr><td>Net income (loss)</td><td>-21,162</td><td>-29,672</td><td>-30,991</td></tr></table>
<table><tr><td></td><td colspan="4">2010 Quarters</td><td colspan="4"> 2009 Quarters</td></tr><tr><td> Earnings and dividends</td><td>Fourth</td><td>Third</td><td>Second</td><td>First</td><td>Fourth</td><td>Third</td><td>Second</td><td> First</td></tr><tr><td><i>Amounts in thousands, except per share</i></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest income (taxable-equivalent basis)</td><td>$688,855</td><td>$691,765</td><td>$690,889</td><td>$682,309</td><td>$698,556</td><td>$706,388</td><td>$682,637</td><td>$659,445</td></tr><tr><td>Interest expense</td><td>108,628</td><td>116,032</td><td>117,557</td><td>120,052</td><td>133,950</td><td>152,938</td><td>175,856</td><td>206,705</td></tr><tr><td>Net interest income</td><td>580,227</td><td>575,733</td><td>573,332</td><td>562,257</td><td>564,606</td><td>553,450</td><td>506,781</td><td>452,740</td></tr><tr><td>Less: provision for credit losses</td><td>85,000</td><td>93,000</td><td>85,000</td><td>105,000</td><td>145,000</td><td>154,000</td><td>147,000</td><td>158,000</td></tr><tr><td>Other income</td><td>286,938</td><td>289,899</td><td>273,557</td><td>257,706</td><td>265,890</td><td>278,226</td><td>271,649</td><td>232,341</td></tr><tr><td>Less: other expense</td><td>469,274</td><td>480,133</td><td>476,068</td><td>489,362</td><td>478,451</td><td>500,056</td><td>563,710</td><td>438,346</td></tr><tr><td>Income before income taxes</td><td>312,891</td><td>292,499</td><td>285,821</td><td>225,601</td><td>207,045</td><td>177,620</td><td>67,720</td><td>88,735</td></tr><tr><td>Applicable income taxes</td><td>102,319</td><td>94,619</td><td>90,967</td><td>68,723</td><td>64,340</td><td>44,161</td><td>11,318</td><td>19,581</td></tr><tr><td>Taxable-equivalent adjustment</td><td>6,130</td><td>5,865</td><td>6,105</td><td>5,923</td><td>5,887</td><td>5,795</td><td>5,214</td><td>4,933</td></tr><tr><td>Net income</td><td>$204,442</td><td>$192,015</td><td>$188,749</td><td>$150,955</td><td>$136,818</td><td>$127,664</td><td>$51,188</td><td>$64,221</td></tr><tr><td>Net income available to common shareholders-diluted</td><td>$189,678</td><td>$176,789</td><td>$173,597</td><td>$136,431</td><td>$122,910</td><td>$113,894</td><td>40,516</td><td>54,618</td></tr><tr><td>Per common share data</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic earnings</td><td>$1.59</td><td>$1.49</td><td>$1.47</td><td>$1.16</td><td>$1.05</td><td>$.97</td><td>$.36</td><td>$.49</td></tr><tr><td>Diluted earnings</td><td>1.59</td><td>1.48</td><td>1.46</td><td>1.15</td><td>1.04</td><td>.97</td><td>.36</td><td>.49</td></tr><tr><td>Cash dividends</td><td>$.70</td><td>$.70</td><td>$.70</td><td>$.70</td><td>$.70</td><td>$.70</td><td>$.70</td><td>$.70</td></tr><tr><td>Average common shares outstanding</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>118,613</td><td>118,320</td><td>118,054</td><td>117,765</td><td>117,506</td><td>117,370</td><td>113,218</td><td>110,439</td></tr><tr><td>Diluted</td><td>119,503</td><td>119,155</td><td>118,878</td><td>118,256</td><td>117,672</td><td>117,547</td><td>113,521</td><td>110,439</td></tr><tr><td> Performance ratios, annualized</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Return on</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Average assets</td><td>1.18%</td><td>1.12%</td><td>1.11%</td><td>.89%</td><td>.79%</td><td>.73%</td><td>.31%</td><td>.40%</td></tr><tr><td>Average common shareholders’ equity</td><td>10.03%</td><td>9.56%</td><td>9.67%</td><td>7.86%</td><td>7.09%</td><td>6.72%</td><td>2.53%</td><td>3.61%</td></tr><tr><td>Net interest margin on average earning assets (taxable-equivalent basis)</td><td>3.85%</td><td>3.87%</td><td>3.84%</td><td>3.78%</td><td>3.71%</td><td>3.61%</td><td>3.43%</td><td>3.19%</td></tr><tr><td>Nonaccrual loans to total loans and leases, net of unearned discount</td><td>2.38%</td><td>2.16%</td><td>2.13%</td><td>2.60%</td><td>2.56%</td><td>2.35%</td><td>2.11%</td><td>2.05%</td></tr><tr><td>Efficiency ratio(a)</td><td>54.08%</td><td>54.95%</td><td>54.77%</td><td>57.82%</td><td>54.62%</td><td>57.21%</td><td>61.93%</td><td>60.82%</td></tr><tr><td> Net operating (tangible) results(b)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net operating income (in thousands)</td><td>$196,235</td><td>$200,225</td><td>$197,752</td><td>$160,953</td><td>$150,776</td><td>$128,761</td><td>$100,805</td><td>$75,034</td></tr><tr><td>Diluted net operating income per common share</td><td>1.52</td><td>1.55</td><td>1.53</td><td>1.23</td><td>1.16</td><td>.98</td><td>.79</td><td>.59</td></tr><tr><td>Annualized return on</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Average tangible assets</td><td>1.20%</td><td>1.24%</td><td>1.23%</td><td>1.00%</td><td>.92%</td><td>.78%</td><td>.64%</td><td>.50%</td></tr><tr><td>Average tangible common shareholders’ equity</td><td>18.43%</td><td>19.58%</td><td>20.36%</td><td>17.34%</td><td>16.73%</td><td>14.87%</td><td>12.08%</td><td>9.36%</td></tr><tr><td>Efficiency ratio(a)</td><td>52.55%</td><td>53.40%</td><td>53.06%</td><td>55.88%</td><td>52.69%</td><td>55.21%</td><td>60.03%</td><td>58.68%</td></tr><tr><td> Balance sheet data</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td><i>In millions, except per share</i></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Average balances</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets(c)</td><td>$68,502</td><td>$67,811</td><td>$68,334</td><td>$68,883</td><td>$68,919</td><td>$69,154</td><td>$66,984</td><td>$64,766</td></tr><tr><td>Total tangible assets(c)</td><td>64,869</td><td>64,167</td><td>64,679</td><td>65,216</td><td>65,240</td><td>65,462</td><td>63,500</td><td>61,420</td></tr><tr><td>Earning assets</td><td>59,737</td><td>59,066</td><td>59,811</td><td>60,331</td><td>60,451</td><td>60,900</td><td>59,297</td><td>57,509</td></tr><tr><td>Investment securities</td><td>7,541</td><td>7,993</td><td>8,376</td><td>8,172</td><td>8,197</td><td>8,420</td><td>8,508</td><td>8,490</td></tr><tr><td>Loans and leases, net of unearned discount</td><td>51,141</td><td>50,835</td><td>51,278</td><td>51,948</td><td>52,087</td><td>52,320</td><td>50,554</td><td>48,824</td></tr><tr><td>Deposits</td><td>49,271</td><td>47,530</td><td>47,932</td><td>47,394</td><td>47,365</td><td>46,720</td><td>43,846</td><td>41,487</td></tr><tr><td>Common shareholders’ equity(c)</td><td>7,582</td><td>7,444</td><td>7,302</td><td>7,136</td><td>6,957</td><td>6,794</td><td>6,491</td><td>6,212</td></tr><tr><td>Tangible common shareholders’ equity(c)</td><td>3,949</td><td>3,800</td><td>3,647</td><td>3,469</td><td>3,278</td><td>3,102</td><td>3,007</td><td>2,866</td></tr><tr><td>At end of quarter</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets(c)</td><td>$68,021</td><td>$68,247</td><td>$68,154</td><td>$68,439</td><td>$68,880</td><td>$68,997</td><td>$69,913</td><td>$64,883</td></tr><tr><td>Total tangible assets(c)</td><td>64,393</td><td>64,609</td><td>64,505</td><td>64,778</td><td>65,208</td><td>65,312</td><td>66,215</td><td>61,544</td></tr><tr><td>Earning assets</td><td>59,434</td><td>59,388</td><td>59,368</td><td>59,741</td><td>59,928</td><td>59,993</td><td>61,044</td><td>56,823</td></tr><tr><td>Investment securities</td><td>7,151</td><td>7,663</td><td>8,098</td><td>8,105</td><td>7,781</td><td>7,634</td><td>8,155</td><td>7,687</td></tr><tr><td>Loans and leases, net of unearned discount</td><td>51,990</td><td>50,792</td><td>51,061</td><td>51,444</td><td>51,937</td><td>52,204</td><td>52,715</td><td>48,918</td></tr><tr><td>Deposits</td><td>49,805</td><td>48,655</td><td>47,523</td><td>47,538</td><td>47,450</td><td>46,862</td><td>46,755</td><td>42,477</td></tr><tr><td>Common shareholders’ equity, net of undeclared preferred dividends(c)</td><td>7,611</td><td>7,488</td><td>7,360</td><td>7,177</td><td>7,017</td><td>6,879</td><td>6,669</td><td>6,329</td></tr><tr><td>Tangible common shareholders’ equity(c)</td><td>3,983</td><td>3,850</td><td>3,711</td><td>3,516</td><td>3,345</td><td>3,194</td><td>2,971</td><td>2,990</td></tr><tr><td>Equity per common share</td><td>63.54</td><td>62.69</td><td>61.77</td><td>60.40</td><td>59.31</td><td>58.22</td><td>56.51</td><td>56.95</td></tr><tr><td>Tangible equity per common share</td><td>33.26</td><td>32.23</td><td>31.15</td><td>29.59</td><td>28.27</td><td>27.03</td><td>25.17</td><td>26.90</td></tr><tr><td> Market price per common share</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>High</td><td>$87.87</td><td>$95.00</td><td>$96.15</td><td>$85.00</td><td>$69.89</td><td>$67.46</td><td>$61.87</td><td>$59.08</td></tr><tr><td>Low</td><td>72.03</td><td>81.08</td><td>74.11</td><td>66.32</td><td>59.09</td><td>50.33</td><td>43.50</td><td>29.11</td></tr><tr><td>Closing</td><td>87.05</td><td>81.81</td><td>84.95</td><td>79.38</td><td>66.89</td><td>62.32</td><td>50.93</td><td>45.24</td></tr></table>

Question: as of september 29 , 2007 , what percent of the company 2019s total future minimum lease payments under noncancelable operating leases were related to leases for retail space?
Answer: 0.78571