value policies at the underlying fund generally require the fund to utilize pricing/valuation information from third-party sources, including independent appraisals.
However, in some instances, current valuation information for illiquid securities or securities in markets that are not active may not be available from any third-party source or fund management may conclude that the valuations that are available from third-party sources are not reliable.
In these instances, fund management may perform model-based analytical valuations that could be used as an input to value these investments.
Derivative Instruments and Hedging Activities.
The Company does not use derivative financial instruments for trading or speculative purposes.
The Company uses derivative financial instruments primarily for purposes of hedging exposures to fluctuations in foreign currency exchange rates of certain assets and liabilities, and market exposures for certain seed investments.
However, certain consolidated sponsored investment funds may also utilize derivatives as a part of their investment strategy.
Changes in the fair value of the Company’s derivative financial instruments are recognized in earnings and, where applicable, are offset by the corresponding gain or loss on the related foreign-denominated assets or liabilities or hedged investments, on the consolidated statements of income.
The Company may also use financial instruments designated as net investment hedges for accounting purposes to hedge net investments in international subsidiaries whose functional currency is not U. S.  dollars.
The gain or loss from revaluing accounting hedges of net investments in foreign operations at the spot rate is deferred and reported within accumulated other comprehensive income on the consolidated statements of financial condition.
The Company reassesses the effectiveness of its net investment hedge on a quarterly basis.
Recent Accounting Pronouncements Not Yet Adopted in 2017 Revenue from Contracts with Customers.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”).
ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance.
The guidance also changes the accounting for certain contract costs and revises the criteria for determining if an entity is acting as a principal or agent in certain arrangements.
The key changes in the standard that impact the Company’s revenue recognition relate to the presentation of certain revenue contracts and associated contract costs.
The most significant of these changes relates to the presentation of certain distribution costs, which are currently presented net against revenues (contra-revenue) and will be presented as an expense on a gross basis.
The Company adopted ASU 2014-09 effective January 1, 2018 on a full retrospective basis, which will require 2016 and 2017 to be restated in future filings.
The cumulative effect adjustment to the 2016 opening retained earnings was not material.
The Company currently expects the net gross up to revenue to be approximately $1 billion with a corresponding gross up to expense for both 2016 and 2017.
Recognition and Measurement of Financial Instruments.
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”).
ASU 2016-01 amends guidance on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in certain equity securities.
ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments.
The reclassification of unrealized gains (losses) on equity securities within accumulated other comprehensive income to retained earnings was not material upon adoption effective January 1, 2018.
Leases.
In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which requires lessees to recognize assets and liabilities arising from most operating leases on the consolidated statements of financial condition.
The Company expects to record assets and liabilities for its current operating leases upon adoption of ASU 2016-02 and does not expect the adoption to have a material impact on its results of operations or cash flows.
ASU 2016-02 is effective for the Company on January 1, 2019, and the Company intends to apply the practical expedients allowed by the standard upon transition.
Cash Flow Classification.
In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which amends and clarifies the current guidance to reduce diversity in practice of the classification of certain cash receipts and payments in the consolidated statements of cash flows.
The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated statement of cash flows.
ASU 2016-15 is effective for the Company on January 1, 2018.
The Company must apply the guidance retrospectively to all periods presented.3.
Investments A summary of the carrying value of total investments is as follows:
## Table 0 ##
(1) Equity method investments primarily include BlackRock’s direct investments in certain BlackRock sponsored investment funds.
Company may sell or transfer its interest, which may need approval by the general partner of the underlying funds.
Due to the nature of the investments in this category, the Company reduces its investment by distributions that are received through the realization of the underlying assets of the funds.
It is estimated that the underlying assets of these funds will be liquidated over a weighted-average period of approximately five years at both December 31, 2017 and 2016.
The total remaining unfunded commitments to other third-party funds were $20 million and $16 million at December 31, 2017 and 2016, respectively.
The Company had contractual obligations to the consolidated funds of $23 million and $24 million at December 31, 2017 and 2016, respectively 7.
Derivatives and Hedging The Company maintains a program to enter into swaps to hedge against market price and interest rate exposures with respect to certain seed investments in sponsored investment products.
At December 31, 2017, the Company had outstanding total return swaps with an aggregate notional value of approximately $587 million.
At December 31, 2016, the Company had outstanding total return swaps and interest rate swaps with aggregate notional values of approximately $572 million and $42 million, respectively.
Gains (losses) on total return swaps are recorded in nonoperating income (expense) and were $(118) million, $(31) million and $11 million for 2017, 2016 and 2015, respectively.
Gains (losses) on the interest rate swaps are recorded in nonoperating income (expense) and were not material for 2017, 2016 and 2015.
The Company has entered into a derivative, providing credit protection to a counterparty of approximately $17 million, representing the Company’s maximum risk of loss with respect to the provision of credit protection.
The Company carries the derivative at fair value based on the expected discounted future cash outflows under the arrangement.
The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange movements.
At December 31, 2017 and 2016, the Company had outstanding forward foreign currency exchange contracts with aggregate notional values of approximately $1.5 billion and $107 million, respectively.
Gains (losses) on the forward foreign currency exchange contracts are recorded in other general and administration expense and were $63 million for 2017.
Gains (losses) on the forward foreign currency exchange contracts were not material to the consolidated statements of income for 2016 and 2015.
The Company consolidates certain sponsored investment funds, which may utilize derivative instruments as a part of the funds’ investment strategies.
The change in fair value of such derivatives, which is recorded in nonoperating income (expense), was not material for 2017, 2016 and 2015.
The fair value of the outstanding derivatives mentioned above were not material to the consolidated statements of financial condition at December 31, 2017 and 2016.
See Note 12, Borrowings, for more information on the Company’s net investment hedge.8.
Property and Equipment Property and equipment consists of the following:
## Table 1 ##
N/A – Not Applicable Qualifying software costs of approximately $60 million, $50 million and $48 million have been capitalized within equipment and computer software during 2017, 2016 and 2015, respectively, and are being amortized over an estimated useful life of three years.
Depreciation and amortization expense was $132 million, $124 million and $115 million for 2017, 2016 and 2015, respectively.9.
Goodwill Goodwill activity during 2017 and 2016 was as follows:
## Table 2 ##
(1) In 2017, the $121 million increase includes $91 million of goodwill related to the First Reserve Transaction, which expanded the Company’s energy and power infrastructure platform and $30 million of goodwill related to the Cachematrix Transaction, which enhanced the Company’s technology and cash management capabilities.
The total consideration paid for the First Reserve Transaction was approximately $193 million, including $120 million of contingent consideration at fair value at time of close.
The total consideration paid for the Cachematrix Transaction was approximately $38 million, including $9 million of contingent consideration at fair value at time
11.
Other Assets The Company accounts for its interest in PennyMac as an equity method investment, which is included in other assets on the consolidated statements of financial condition.
The carrying value and fair value of the Company’s interest (approximately 20% or 16 million shares and non-public units) was approximately $342 million and $348 million, respectively, at December 31, 2017 and approximately $301 million and $259 million, respectively, at December 31, 2016.
The fair value of the Company’s interest reflected the PennyMac stock price at December 31, 2017 and 2016, respectively (a Level 1 input).
The fair value of the Company’s interest in the non-public units held of PennyMac is based on the stock price of the PennyMac public securities at December 31, 2017 and 2016.12.
Borrowings Short-Term Borrowings 2017 Revolving Credit Facility.
The Company’s credit facility has an aggregate commitment amount of $4.0 billion and was amended in April 2017 to extend the maturity date to April 2022 (the “2017 credit facility”).
The 2017 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, increasing the overall size of the 2017 credit facility to an aggregate principal amount not to exceed $5.0 billion.
Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread.
The 2017 credit facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at December 31, 2017.
The 2017 credit facility provides back-up liquidity to fund ongoing working capital for general corporate purposes and various investment opportunities.
At December 31, 2017, the Company had no amount outstanding under the 2017 credit facility.
Commercial Paper Program.
The Company can issue unsecured commercial paper notes (the “CP Notes”) on a private-placement basis up to a maximum aggregate amount outstanding at any time of $4.0 billion.
The commercial paper program is currently supported by the 2017 credit facility.
At December 31, 2017, BlackRock had no CP Notes outstanding.
Long-Term Borrowings The carrying value and fair value of long-term borrowings estimated using market prices and foreign exchange rates at December 31, 2017 included the following:
## Table 3 ##
Long-term borrowings at December 31, 2016 had a carrying value of $4.9 billion and a fair value of $5.2 billion determined using market prices at the end of December 2016.2027 Notes.
In March 2017, the Company issued $700 million in aggregate principal amount of 3.20% senior unsecured and unsubordinated notes maturing on March 15, 2027 (the “2027 Notes”).
Interest is payable semi-annually on March 15 and September 15 of each year, commencing September 15, 2017, and is approximately $22 million per year.
The 2027 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price.
The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2027 Notes.
In April 2017, the net proceeds of the 2027 Notes were used to fully repay $700 million in aggregate principal amount outstanding of 6.25% notes prior to their maturity in September 2017.11.
Other Assets The Company accounts for its interest in PennyMac as an equity method investment, which is included in other assets on the consolidated statements of financial condition.
The carrying value and fair value of the Company¡¯s interest (approximately 20% or 16 million shares and non-public units) was approximately $342 million and $348 million, respectively, at December 31, 2017 and approximately $301 million and $259 million, respectively, at December 31, 2016.
The fair value of the Company¡¯s interest reflected the PennyMac stock price at December 31, 2017 and 2016, respectively (a Level 1 input).
The fair value of the Company¡¯s interest in the non-public units held of PennyMac is based on the stock price of the PennyMac public securities at December 31, 2017 and 2016.12.
Borrowings Short-Term Borrowings 2017 Revolving Credit Facility.
The Company¡¯s credit facility has an aggregate commitment amount of $4.0 billion and was amended in April 2017 to extend the maturity date to April 2022 (the ¡°2017 credit facility¡±).
The 2017 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, increasing the overall size of the 2017 credit facility to an aggregate principal amount not to exceed $5.0 billion.
Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread.
The 2017 credit facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at December 31, 2017.
The 2017 credit facility provides back-up liquidity to fund ongoing working capital for general corporate purposes and various investment opportunities.
At December 31, 2017, the Company had no amount outstanding under the 2017 credit facility.
Commercial Paper Program.
The Company can issue unsecured commercial paper notes (the ¡°CP Notes¡±) on a private-placement basis up to a maximum aggregate amount outstanding at any time of $4.0 billion.
The commercial paper program is currently supported by the 2017 credit facility.
At December 31, 2017, BlackRock had no CP Notes outstanding.
Long-Term Borrowings The carrying value and fair value of long-term borrowings estimated using market prices and foreign exchange rates at December 31, 2017 included the following:
Long-term borrowings at December 31, 2016 had a carrying value of $4.9 billion and a fair value of $5.2 billion determined using market prices at the end of December 2016.2027 Notes.
In March 2017, the Company issued $700 million in aggregate principal amount of 3.20% senior unsecured and unsubordinated notes maturing on March 15, 2027 (the ¡°2027 Notes¡±).
Interest is payable semi-annually on March 15 and September 15 of each year, commencing September 15, 2017, and is approximately $22 million per year.
The 2027 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a ¡°make-whole¡± redemption price.
The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2027 Notes.
In April 2017, the net proceeds of the 2027 Notes were used to fully repay $700 million in aggregate principal amount outstanding of 6.25% notes prior to their maturity in September 2017.2025 Notes.
In May 2015, the Company issued €700 million of 1.25% senior unsecured notes maturing on May 6, 2025 (the ¡°2025 Notes¡±).
The notes are listed on the New York Stock Exchange.
The net proceeds of the 2025 Notes were used for general corporate purposes, including refinancing of outstanding indebtedness.
Interest of approximately $9 million per year based on current exchange rates is payable annually on May 6 of each year.
The 2025 Notes may be redeemed in whole or in part prior to maturity at any time at the option of the Company at a ¡°make-whole¡± redemption price.
The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2025 Notes.
Upon conversion to U. S.  dollars the Company designated the €700 million debt offering as a net investment hedge to offset its currency exposure relating to its net investment in certain euro functional currency operations.
A loss of $64 million (net of a tax benefit of $38 million), a gain of $14 million (net of tax of $8 million), and a gain of $19 million (net of tax of $11 million) were recognized in other comprehensive income for 2017, 2016 and 2015, respectively.
No hedge ineffectiveness was recognized during 2017, 2016, and 2015.2024 Notes.
In March 2014, the Company issued $1.0 billion in aggregate principal amount of 3.50% senior unsecured and unsubordinated notes maturing on March 18, 2024 (the ¡°2024 Notes¡±).
The net proceeds of the 2024 Notes were
Item 6.
Selected Financial Data The selected financial data presented below have been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-K.
## Table 4 ##
(1) BlackRock’s related party revenue includes fees for services provided to registered investment companies that it manages, which include mutual funds and exchange-traded funds, as a result of the Company’s advisory relationship.
In addition, equity method investments are considered related parties due to the Company’s influence over the financial and operating policies of the investee.
See Note 16, Related Party Transactions, to the consolidated financial statements for more information.
(2) Income tax expense for 2017 reflects $1.2 billion of net tax benefit related to the 2017 Tax Cuts and Jobs Act.
See Note 21, Income Taxes, to the consolidated financial statements for more information.
(3) Participating preferred stock is considered to be a common stock equivalent for purposes of earnings per share calculations.
(4) Book value amounts for 2017, 2016 and 2015 reflect Total BlackRock stockholders’ equity divided by total common and preferred shares outstanding at December 31 of the respective year-end.
Book value amounts for 2014 and 2013 reflect Total BlackRock stockholders’ equity, excluding appropriated retained deficit of $19 million for 2014 and appropriated retained earnings of $22 million for 2013, divided by total common and preferred shares outstanding at December 31 of the respective year-end.

<table><tr><td>(in millions)</td><td>December 31,2017</td><td>December 31,2016</td></tr><tr><td>Available-for-sale investments</td><td>$103</td><td>$80</td></tr><tr><td>Held-to-maturity investments</td><td>102</td><td>51</td></tr><tr><td>Trading investments:</td><td></td><td></td></tr><tr><td>Consolidated sponsored investment funds:</td><td></td><td></td></tr><tr><td>Debt securities</td><td>267</td><td>246</td></tr><tr><td>Equity securities</td><td>245</td><td>219</td></tr><tr><td>Other equity and debt securities</td><td>267</td><td>101</td></tr><tr><td>Deferred compensation plan mutual funds</td><td>56</td><td>59</td></tr><tr><td>Total trading investments</td><td>835</td><td>625</td></tr><tr><td>Other investments:</td><td></td><td></td></tr><tr><td>Equity method investments<sup>-1</sup></td><td>816</td><td>730</td></tr><tr><td>Cost method investments<sup>-2</sup></td><td>93</td><td>91</td></tr><tr><td>Carried interest<sup>-3</sup></td><td>32</td><td>18</td></tr><tr><td>Total other investments</td><td>941</td><td>839</td></tr><tr><td>Total investments</td><td>$1,981</td><td>$1,595</td></tr></table>
<table><tr><td></td><td rowspan="2">Estimated useful life-in years</td><td colspan="2">December 31,</td></tr><tr><td>(in millions)</td><td>2017</td><td>2016</td></tr><tr><td>Property and equipment:</td><td></td><td></td><td></td></tr><tr><td>Land</td><td>N/A</td><td>$6</td><td>$6</td></tr><tr><td>Building</td><td>39</td><td>33</td><td>33</td></tr><tr><td>Building improvements</td><td>15</td><td>29</td><td>29</td></tr><tr><td>Leasehold improvements</td><td>1-15</td><td>504</td><td>476</td></tr><tr><td>Equipment and computer software</td><td>3</td><td>444</td><td>411</td></tr><tr><td>Other transportation equipment</td><td>10</td><td>134</td><td>135</td></tr><tr><td>Furniture and fixtures</td><td>7</td><td>67</td><td>65</td></tr><tr><td>Construction in progress</td><td>N/A</td><td>33</td><td>5</td></tr><tr><td>Total</td><td></td><td>1,250</td><td>1,160</td></tr><tr><td>Less: accumulated depreciation and amortization</td><td></td><td>658</td><td>601</td></tr><tr><td>Property and equipment, net</td><td></td><td>$592</td><td>$559</td></tr></table>
<table><tr><td>(in millions)</td><td>2017</td><td>2016</td></tr><tr><td>Beginning of year balance</td><td>$13,118</td><td>$13,123</td></tr><tr><td>Acquisitions<sup>-1</sup></td><td>121</td><td>14</td></tr><tr><td>Goodwill adjustments related to Quellos<sup>-2</sup></td><td>-19</td><td>-19</td></tr><tr><td>End of year balance</td><td>$13,220</td><td>$13,118</td></tr></table>
<table><tr><td>(in millions)</td><td>MaturityAmount</td><td>Unamortized Discount and Debt Issuance Costs</td><td>Carrying Value</td><td>Fair Value</td></tr><tr><td>5.00% Notes due 2019</td><td>$1,000</td><td>$-1</td><td>$999</td><td>$1,051</td></tr><tr><td>4.25% Notes due 2021</td><td>750</td><td>-3</td><td>747</td><td>792</td></tr><tr><td>3.375% Notes due 2022</td><td>750</td><td>-4</td><td>746</td><td>774</td></tr><tr><td>3.50% Notes due 2024</td><td>1,000</td><td>-6</td><td>994</td><td>1,038</td></tr><tr><td>1.25% Notes due 2025</td><td>841</td><td>-6</td><td>835</td><td>864</td></tr><tr><td>3.20% Notes due 2027</td><td>700</td><td>-7</td><td>693</td><td>706</td></tr><tr><td>Total Long-term Borrowings</td><td>$5,041</td><td>$-27</td><td>$5,014</td><td>$5,225</td></tr></table>
<table><tr><td>(in millions, except per share data)</td><td>2017</td><td>2016</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Income statement data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenue</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Related parties<sup>-1</sup></td><td>$7,948</td><td>$7,058</td><td>$7,084</td><td>$6,994</td><td>$6,260</td></tr><tr><td>Other third parties</td><td>4,543</td><td>4,097</td><td>4,317</td><td>4,087</td><td>3,920</td></tr><tr><td>Total revenue</td><td>12,491</td><td>11,155</td><td>11,401</td><td>11,081</td><td>10,180</td></tr><tr><td>Expense</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Restructuring charge</td><td>—</td><td>76</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Other operating expenses</td><td>7,219</td><td>6,509</td><td>6,737</td><td>6,607</td><td>6,323</td></tr><tr><td>Total expense</td><td>7,219</td><td>6,585</td><td>6,737</td><td>6,607</td><td>6,323</td></tr><tr><td>Operating income</td><td>5,272</td><td>4,570</td><td>4,664</td><td>4,474</td><td>3,857</td></tr><tr><td>Total nonoperating income (expense)</td><td>5</td><td>-110</td><td>-62</td><td>-79</td><td>116</td></tr><tr><td>Income before income taxes</td><td>5,277</td><td>4,460</td><td>4,602</td><td>4,395</td><td>3,973</td></tr><tr><td>Income tax expense<sup>-2</sup></td><td>270</td><td>1,290</td><td>1,250</td><td>1,131</td><td>1,022</td></tr><tr><td>Net income</td><td>5,007</td><td>3,170</td><td>3,352</td><td>3,264</td><td>2,951</td></tr><tr><td>Less: Net income (loss) attributable to noncontrolling interests</td><td>37</td><td>-2</td><td>7</td><td>-30</td><td>19</td></tr><tr><td>Net income attributable to BlackRock, Inc.</td><td>$4,970</td><td>$3,172</td><td>$3,345</td><td>$3,294</td><td>$2,932</td></tr><tr><td>Per share data:<sup>-3</sup></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic earnings</td><td>$30.65</td><td>$19.29</td><td>$20.10</td><td>$19.58</td><td>$17.23</td></tr><tr><td>Diluted earnings</td><td>$30.23</td><td>$19.04</td><td>$19.79</td><td>$19.25</td><td>$16.87</td></tr><tr><td>Book value<sup>-4</sup></td><td>$197.61</td><td>$178.38</td><td>$172.12</td><td>$164.06</td><td>$156.69</td></tr><tr><td>Cash dividends declared and paid per share</td><td>$10.00</td><td>$9.16</td><td>$8.72</td><td>$7.72</td><td>$6.72</td></tr></table>

Question: What is the growing rate of Total expense in the years with the least Other operating expenses?
Answer: 0.04492