Table of Contents Hologic, Inc.  Notes to Consolidated Financial Statements (continued) (In thousands, except per share data) Cytyc, headquartered in Marlborough, Massachusetts, is a diversified diagnostic and medical device company that designs, develops, manufactures, and markets innovative and clinically effective diagnostics and surgical products.
Cytyc products cover a range of cancer and women’s health applications, including cervical cancer screening, prenatal diagnostics, treatment of excessive menstrual bleeding and radiation treatment of early-stage breast cancer.
Upon the close of the merger, Cytyc shareholders received an aggregate of 132,038 shares of Hologic common stock and approximately $2,094,800 in cash.
In connection with the close of the merger, the Company entered into a credit agreement relating to a senior secured credit facility (the “Credit Agreement”) with Goldman Sachs Credit Partners L. P.  and certain other lenders, in which the lenders committed to provide, in the aggregate, senior secured financing of up to approximately $2,550,000 to pay for the cash portion of the merger consideration, repayment of existing debt of Cytyc, expenses relating to the merger and working capital following the completion of the merger.
As of the closing of the merger, the Company borrowed $2,350,000 under this Credit Agreement.
See Note 5 for further discussion.
The aggregate purchase price of approximately $6,156,900 included $2,094,800 in cash; 132,038 shares of Hologic common stock at an estimated fair value of $3,671,500; 16,465 of fully vested stock options granted to Cytyc employees in exchange for their vested Cytyc stock options, with an estimated fair value of approximately $241,400; the fair value of Cytyc’s outstanding convertible notes assumed in the merger of approximately $125,000; and approximately $24,200 of direct acquisition costs.
There are no potential contingent consideration arrangements payable to the former Cytyc shareholders in connection with this transaction.
The Company measured the fair value of the 132,038 shares of the Company common stock issued as consideration in connection with the merger under EITF 99-12.
The Company determined the measurement date to be May 20, 2007, the date the transaction was announced, as the number of shares to be issued according to the exchange ratio was fixed without subsequent revision.
The Company valued the securities based on the average market price a few days before and after the measurement date.
The weighted average stock price was determined to be $27.81.
(i) Purchase price The purchase price is as follows:
## Table 0 ##
Table of Contents Item 6.
Selected Financial Data.
The following selected financial data should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K, beginning on page F-1.
In the first and fourth quarters of fiscal 2008, we acquired Cytyc Corporation (“Cytyc”) and Third Wave Technologies, Inc.  (“Third Wave”), respectively.
In the fourth quarter of fiscal 2007, we acquired BioLucent, Inc.  (“BioLucent).
In fiscal 2006, we acquired AEG Elektrofotografie (“AEG”), R2 Technology, Inc.  (“R2”) and Suros Surgical, Inc.  (“Suros”), and we also acquired the intellectual property relating to Fischer Imaging Corporation’s mammography business.
Results of operations for each of these businesses are included in our consolidated financial statements from the date of acquisition.
Effective in fiscal 2006, we began to record stock-based compensation expense associated with the fair value of stock options in accordance with U.
S . generally accepted accounting principles.
## Table 1 ##
of the MammoSite Radiation Therapy System, a $23.6 million increase in breast biopsy device sales and an increase of $21.5 million in product sales of the MammoPad breast cushion.
Partially offsetting these increases was a decrease of $6.4 million in digital array sales to an OEM as we phase out of selling these arrays to third parties.
The MammoSite system was acquired in connection with our merger with Cytyc in October 2007 and the MammoPad breast cushion was acquired in connection with our BioLucent acquisition in September 2007.
The increase in our digital mammography product sales was primarily attributable to an increase in the number of Selenia systems and related components sold, including our CAD software.
In fiscal 2008, we sold 1,678 digital mammography systems compared to 1,189 systems in fiscal 2007.
This revenue was partially offset by a decrease in average selling prices primarily attributable to increased competition, higher dealer sales, changes in product configuration and increased multi-system sales.
We attribute the increase in digital mammography system sales primarily to the growing acceptance of our Selenia mammography system and of digital mammography in general.
Diagnostics product sales were $474.6 million in fiscal 2008, due to the inclusion of Cytyc results for 49 of the 52 weeks in the current year as well as 9 weeks of Third Wave revenues of approximately $5.9 million.
Cytyc Diagnostic sales include our ThinPrep and Rapid products.
GYN Surgical product sales were $219.3 million in fiscal 2008, due to the inclusion of Cytyc results for 49 of the 52 weeks in the current year.
These sales include our NovaSure system.
Skeletal Health product sales increased 11% in fiscal 2008 compared to fiscal 2007, primarily due to a $10.8 million increase in mini C-arm sales worldwide, partially offset by a $2.0 million decrease in extremity MRI sales and a $1.2 million decrease in bone densitometry product sales.
The increase in mini C-arm sales was primarily due to an increase in the number of units sold and, to a lesser extent, an increase in the average selling prices related to the commercialization of a new and enhanced product version.
The decrease in extremity MRI sales was due to a decrease in the number of systems sold.
The decrease in bone densitometry sales was primarily due to a decrease in the number of used bone densitometry systems and upgrades sold and a decrease in the average selling prices of our bone densitometry systems in the United States, partially offset by an increase in the number of bone densitometry systems sold internationally.
We believe the decrease in our domestic osteoporosis assessment average selling prices reflected a decline in market conditions due in part to a reduction in reimbursement for osteoporosis assessment exams.
In fiscal 2008, approximately 80% of product sales were generated in the United States, 12% in Europe, 4% in Asia, and 4% in other international markets.
In fiscal 2007, approximately 75% of product sales were generated in the United States, 15% in Europe, 5% in Asia, and 5% in other international markets.
The increase in the percentage of product sales generated in the United States in fiscal 2008 is primarily due to the additional product sales from Cytyc, which had a higher percentage of its product sales from the United States than our historical businesses.
Service and Other Revenues.
## Table 2 ##
Service and other revenues increased 57% in fiscal 2008 compared to fiscal 2007.
This increase was primarily due to an increase in service and other revenues of $49.8 million in our Breast Health segment, primarily due to an increase in service contract revenues, and the inclusion of service and other revenues of $10.3 million from the Diagnostics segment as a result of the inclusion of Cytyc results for 49 of the 52 weeks in fiscal 2008.
We believe that the increase in our Breast Health service and other revenues reflected the growth in our installed base of systems and detectors.
remarketing proceeds and the lease balance, up to the maximum recourse amount of $90.8 million (“residual value guarantee”).
In August 1999, we entered into a five-year lease agreement for our other two office buildings that currently serve as our corporate headquarters in San Jose, California.
Under the agreement, we have the option to purchase the buildings at any time during the lease term for the lease balance, which is approximately $142.5 million.
The lease is subject to standard covenants including liquidity, leverage and profitability ratios that are reported to the lessor quarterly.
As of November 28, 2003, we were in compliance with all covenants.
In the case of a default, the lessor may demand we purchase the buildings for an amount equal to the lease balance, or require that we remarket or relinquish the buildings.
The agreement qualifies for operating lease accounting treatment under SFAS 13 and, as such, the buildings and the related obligation are not included on our balance sheet.
We utilized this type of financing because it allows us to access bank-provided funding at the most favorable rates and allows us to maintain our cash balances for other corporate purposes.
At the end of the lease term, we can purchase the buildings for the lease balance, remarket or relinquish the buildings.
If we choose to remarket or are required to do so upon relinquishing the buildings, we are bound to arrange the sale of the buildings to an unrelated party and will be required to pay the lessor any shortfall between the net remarketing proceeds and the lease balance, up to the maximum recourse amount of $132.6 million (“residual value guarantee”).
There were no changes in the agreement or level of obligations from the end of fiscal 2002.
We are in the process of evaluating alternative financing methods at expiration of the lease in fiscal 2004 and believe that several suitable financing options will be available to us.
As of November 28, 2003, future minimum lease payments under noncancelable operating leases and future minimum sublease income under noncancelable subleases are as follows:
## Table 3 ##
Royalties We have certain royalty commitments associated with the shipment and licensing of certain products.
Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the underlying revenue.
Royalty expense, which was recorded under our cost of products revenue on our consolidated statements of income, was approximately $14.5 million, $14.4 million and $14.1 million in fiscal 2003, 2002 and 2001, respectively.
Guarantees We adopted FIN 45 at the beginning of our fiscal year 2003.
See “Guarantees” and “Recent Accounting Pronouncements” in Note 1 of our Notes to Consolidated Financial Statements for further information regarding FIN 45.
Legal Actions In early 2002, International Typeface Corporation (“ITC”) and Agfa Monotype Corporation (“AMT”), companies which have common ownership and management, each charged, by way of informal letters to Adobe, that Adobe's distribution of font software, which generates ITC and AMT typefaces, breaches its contracts with ITC and AMT, respectively, pursuant to which Adobe licensed certain rights with respect to ITC and AMT typefaces.
AMT and ITC further charged that Adobe violated the Digital Millennium Copyright Act (“DMCA”) with respect to, or induced or contributed to, the infringement of copyrights in, ITC’s and AMT's TrueType font software.
MetLife, Inc.  Notes to the Consolidated Financial Statements — (Continued) The following table presents the gross notional amount of derivative financial instruments by maturity at December 31, 2010
## Table 4 ##
Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches).
In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional principal amount.
These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date.
The Company utilizes interest rate swaps in fair value, cash flow and non- qualifying hedging relationships.
The Company also enters into basis swaps to better match the cash flows from assets and related liabilities.
In a basis swap, both legs of the swap are floating with each based on a different index.
Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party.
A single net payment is usually made by one counterparty at each due date.
Basis swaps are included in interest rate swaps in the preceding table.
The Company utilizes basis swaps in non-qualifying hedging relationships.
Inflation swaps are used as an economic hedge to reduce inflation risk generated from inflation-indexed liabilities.
Inflation swaps are included in interest rate swaps in the preceding table.
The Company utilizes inflation swaps in non-qualifying hedging relationships.
Implied volatility swaps are used by the Company primarily as economic hedges of interest rate risk associated with the Company’s investments in mortgage-backed securities.
In an implied volatility swap, the Company exchanges fixed payments for floating payments that are linked to certain market volatility measures.
If implied volatility rises, the floating payments that the Company receives will increase, and if implied volatility falls, the floating payments that the Company receives will decrease.
Implied volatility swaps are included in interest rate swaps in the preceding table.
The Company utilizes implied volatility swaps in non-qualifying hedging relationships.
The Company purchases interest rate caps and floors primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches), as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively.
In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors.
The Company utilizes interest rate caps and floors in non-qualifying hedging relationships.
In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts.
The Company enters into exchange- traded futures with regulated futures commission merchants that are members of the exchange.
Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring and to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance.
The Company utilizes exchange-traded interest rate futures in non-qualifying hedging relationships.
Swaptions are used by the Company to hedge interest rate risk associated with the Company’s long-term liabilities and invested assets.
A swaption is an option to enter into a swap with a forward starting effective date.
In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions.
The Company pays a premium for purchased swaption
PUBLIC STORAGE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2009 ($24.6 million liquidation preference less $0.8 million of original issuance costs), and exceeded the aggregate repurchase cost of $17.5 million by approximately $6.2 million.
For purposes of determining net income per share, income allocated to our preferred shareholders was reduced by the $6.2 million for the year ended December 31, 2009.
During November and December 2008, we repurchased certain of our Cumulative Preferred Shares in privately negotiated transactions as follows: Series Y – 849,100 Preferred Shares at a total cost of $14,091,000, Series K – 1,409,756 depositary shares, each representing 1/1,000 of a share of our Cumulative Preferred Shares at a total cost of $23,786,000, Series L – 933,400 depositary shares, each representing 1/1,000 of a share of our Cumulative Preferred Shares at a total cost of $14,626,000 and Series M – 934,647 depositary shares, each representing 1/1,000 of a share of our Cumulative Preferred Shares at a total cost of $14,375,000.
The carrying value of the shares repurchased totaled $100.8 million ($103.2 million liquidation preference less $2.4 million of original issuance costs) exceeded the aggregate repurchase cost of $66.9 million by approximately $33.9 million.
For purposes of determining net income per share, income allocated to our preferred shareholders was reduced by the $33.9 million for the year ended December 31, 2008.
During 2007, we issued two series of Cumulative Preferred Shares: Series M – issued January 9, 2007, net proceeds totaling $484,767,000 and Series N – issued July 2, 2007, net proceeds totaling $167,125,000.
In December 2006, we called for redemption our Series T and Series U Cumulative Preferred Shares, at par.
The aggregated redemption value of $302,150,000 of these two series was repaid in January 2007.
Equity Shares, Series A At December 31, 2009 and 2008, we had 8,377,193 depositary shares outstanding, each representing 1/1,000 of an Equity Share, Series A.
The Equity Shares, Series A rank on parity with our common shares and junior to the Cumulative Preferred Shares with respect to general preference rights and have a liquidation amount which cannot exceed $24.50 per share.
Distributions with respect to each depositary share shall be the lesser of: (i) five times the per share dividend on our common shares or (ii) $2.45 per annum.
We have no obligation to pay distributions on the depositary shares if no distributions are paid to common shareholders.
During the years ended December 31, 2009, 2008 and 2007, we paid quarterly distributions to the holders of the Equity Shares, Series A of $0.6125 per share for each of the quarters ended March 31, June 30, September 30 and December 31.
Except in order to preserve the Company’s Federal income tax status as a REIT, we may not redeem the depositary shares representing the Equity Shares, Series A before March 31, 2010.
On or after March 31, 2010, we may, at our option, redeem the depositary shares at $24.50 per depositary share.
If the Company fails to preserve its Federal income tax status as a REIT, each of the depositary shares will be convertible at the option of the shareholder into .956 common shares.
The depositary shares are otherwise not convertible into common shares.
Holders of depositary shares vote as a single class with holders of our common shares on shareholder matters, but the depositary shares have the equivalent of one-tenth of a vote per depositary share.
See Note 15 “Subsequent Events” for further discussion regarding the Equity Shares, Series A.

<table><tr><td>Cash portion of consideration</td><td>$2,094,800</td></tr><tr><td>Fair value of securities issued</td><td>3,671,500</td></tr><tr><td>Fair value of vested options exchanged</td><td>241,400</td></tr><tr><td>Fair value of Cytyc’s outstanding convertible notes</td><td>125,000</td></tr><tr><td>Direct acquisition costs</td><td>24,200</td></tr><tr><td>Total estimated purchase price</td><td>$6,156,900</td></tr></table>
<table><tr><td></td><td colspan="5">Fiscal Years Ended</td></tr><tr><td></td><td>September 26, 2009</td><td>September 27, 2008</td><td>September 29, 2007</td><td>September 30, 2006</td><td>September 24, 2005</td></tr><tr><td></td><td colspan="5">(In thousands, except per share data)</td></tr><tr><td> <i>Consolidated Statement of Operations Data</i></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Product sales</td><td>$1,426,986</td><td>$1,502,447</td><td>$628,854</td><td>$388,111</td><td>$229,075</td></tr><tr><td>Service and other revenues</td><td>210,148</td><td>172,052</td><td>109,514</td><td>74,569</td><td>58,609</td></tr><tr><td></td><td>1,637,134</td><td>1,674,499</td><td>738,368</td><td>462,680</td><td>287,684</td></tr><tr><td>Costs and Expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cost of product sales</td><td>470,295</td><td>535,082</td><td>267,470</td><td>188,443</td><td>116,478</td></tr><tr><td>Cost of product sales—amortization of intangible assets</td><td>155,519</td><td>95,310</td><td>11,262</td><td>5,011</td><td>1,153</td></tr><tr><td>Cost of product sales—impairment of intangibles</td><td>4,065</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Cost of service and other revenues</td><td>149,769</td><td>151,589</td><td>114,307</td><td>75,921</td><td>58,181</td></tr><tr><td>Research and development</td><td>94,328</td><td>81,421</td><td>44,381</td><td>28,113</td><td>18,508</td></tr><tr><td>Selling and marketing</td><td>238,977</td><td>261,524</td><td>85,520</td><td>56,239</td><td>34,200</td></tr><tr><td>General and administrative</td><td>148,825</td><td>147,405</td><td>62,092</td><td>42,176</td><td>26,533</td></tr><tr><td>Amortization of intangible assets</td><td>51,210</td><td>25,227</td><td>5,584</td><td>1,631</td><td>—</td></tr><tr><td>Impairment of goodwill</td><td>2,340,023</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Impairment of intangible assets</td><td>—</td><td>2,900</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net gain on sale of intellectual property</td><td>—</td><td>—</td><td>—</td><td>-5,093</td><td>—</td></tr><tr><td>Acquired in-process research and development</td><td>—</td><td>565,200</td><td>—</td><td>19,900</td><td>—</td></tr><tr><td>Restructuring charges</td><td>797</td><td>6,383</td><td>—</td><td>—</td><td>—</td></tr><tr><td></td><td>3,653,808</td><td>1,872,041</td><td>590,616</td><td>412,341</td><td>255,053</td></tr><tr><td>(Loss) income from operations</td><td>-2,016,674</td><td>-197,542</td><td>147,752</td><td>50,339</td><td>32,631</td></tr><tr><td>Interest income</td><td>1,161</td><td>4,528</td><td>2,815</td><td>4,082</td><td>2,219</td></tr><tr><td>Interest expense</td><td>-69,502</td><td>-84,912</td><td>-2,511</td><td>-1,230</td><td>-376</td></tr><tr><td>Other (expense) income, net</td><td>-3,660</td><td>-1,215</td><td>433</td><td>32</td><td>221</td></tr><tr><td>(Loss) income before income taxes</td><td>-2,088,675</td><td>-279,141</td><td>148,489</td><td>53,223</td><td>34,695</td></tr><tr><td>Provision for income taxes</td><td>87,562</td><td>106,476</td><td>53,911</td><td>25,800</td><td>6,439</td></tr><tr><td>Net (loss) income</td><td>$-2,176,237</td><td>$-385,617</td><td>$94,578</td><td>$27,423</td><td>$28,256</td></tr></table>
<table><tr><td></td><td colspan="6"> Years Ended</td></tr><tr><td></td><td colspan="2">September 27, 2008</td><td colspan="2">September 29, 2007</td><td colspan="2"> Change</td></tr><tr><td></td><td> Amount</td><td>% of Total Revenue</td><td> Amount</td><td>% of Total Revenue</td><td> Amount</td><td> %</td></tr><tr><td><i>Service and Other Revenues</i></td><td>$172,052</td><td>10%</td><td>$109,514</td><td>15%</td><td>$62,538</td><td>57%</td></tr></table>
<table><tr><td>Fiscal Year</td><td>Future Minimum Lease Payments</td><td>Future Minimum Sublease Income</td></tr><tr><td>2004</td><td>$29,454</td><td>$5,859</td></tr><tr><td>2005</td><td>20,746</td><td>5,798</td></tr><tr><td>2006</td><td>16,796</td><td>5,839</td></tr><tr><td>2007</td><td>12,188</td><td>3,819</td></tr><tr><td>2008</td><td>9,596</td><td>1,678</td></tr><tr><td>Thereafter</td><td>20,900</td><td>2,811</td></tr><tr><td>Total</td><td>$109,680</td><td>$25,804</td></tr></table>
<table><tr><td></td><td colspan="5"> Remaining Life</td></tr><tr><td></td><td> One Year or   Less</td><td> After One Year   Through Five   Years</td><td> After Five Years   Through Ten   Years</td><td> After Ten   Years</td><td> Total</td></tr><tr><td></td><td colspan="5"> (In millions)</td></tr><tr><td>Interest rate swaps</td><td>$4,970</td><td>$14,491</td><td>$16,403</td><td>$18,939</td><td>$54,803</td></tr><tr><td>Interest rate floors</td><td>—</td><td>13,048</td><td>7,318</td><td>3,500</td><td>23,866</td></tr><tr><td>Interest rate caps</td><td>5,000</td><td>28,436</td><td>1,976</td><td>—</td><td>35,412</td></tr><tr><td>Interest rate futures</td><td>9,385</td><td>—</td><td>—</td><td>—</td><td>9,385</td></tr><tr><td>Interest rate options</td><td>1,853</td><td>5,206</td><td>1,702</td><td>—</td><td>8,761</td></tr><tr><td>Interest rate forwards</td><td>9,409</td><td>860</td><td>105</td><td>—</td><td>10,374</td></tr><tr><td>Synthetic GICs</td><td>4,397</td><td>—</td><td>—</td><td>—</td><td>4,397</td></tr><tr><td>Foreign currency swaps</td><td>3,262</td><td>5,857</td><td>5,999</td><td>2,508</td><td>17,626</td></tr><tr><td>Foreign currency forwards</td><td>10,337</td><td>24</td><td>20</td><td>62</td><td>10,443</td></tr><tr><td>Currency futures</td><td>493</td><td>—</td><td>—</td><td>—</td><td>493</td></tr><tr><td>Currency options</td><td>5,426</td><td>—</td><td>—</td><td>—</td><td>5,426</td></tr><tr><td>Non-derivative hedging instruments</td><td>169</td><td>—</td><td>—</td><td>—</td><td>169</td></tr><tr><td>Credit default swaps</td><td>111</td><td>10,197</td><td>649</td><td>—</td><td>10,957</td></tr><tr><td>Credit forwards</td><td>90</td><td>—</td><td>—</td><td>—</td><td>90</td></tr><tr><td>Equity futures</td><td>8,794</td><td>—</td><td>—</td><td>—</td><td>8,794</td></tr><tr><td>Equity options</td><td>20,856</td><td>3,346</td><td>9,486</td><td>—</td><td>33,688</td></tr><tr><td>Variance swaps</td><td>1,411</td><td>1,795</td><td>14,493</td><td>323</td><td>18,022</td></tr><tr><td>Total rate of return swaps</td><td>1,492</td><td>55</td><td>—</td><td>—</td><td>1,547</td></tr><tr><td>Total</td><td>$87,455</td><td>$83,315</td><td>$58,151</td><td>$25,332</td><td>$254,253</td></tr></table>

Question: What is the growing rate of Service and other revenues in the years with the least Product sales?
Answer: 0.27231