The Company recognizes accrued interest and penalties related to tax positions as a component of income tax expense and accounts for sales tax collected from customers and remitted to taxing authorities on a net basis.
Allowance for Funds Used During Construction AFUDC is a non-cash credit to income with a corresponding charge to utility plant that represents the cost of borrowed funds or a return on equity funds devoted to plant under construction.
The regulated utility subsidiaries record AFUDC to the extent permitted by the PUCs.
The portion of AFUDC attributable to borrowed funds is shown as a reduction of interest, net in the accompanying Consolidated Statements of Operations.
Any portion of AFUDC attributable to equity funds would be included in other income (expenses) in the accompanying Consolidated Statements of Operations.
AFUDC is summarized in the following table for the years ended December 31:
## Table 0 ##
Environmental Costs The Company’s water and wastewater operations are subject to U. S.  federal, state, local and foreign requirements relating to environmental protection, and as such, the Company periodically becomes subject to environmental claims in the normal course of business.
Environmental expenditures that relate to current operations or provide a future benefit are expensed or capitalized as appropriate.
Remediation costs that relate to an existing condition caused by past operations are accrued, on an undiscounted basis, when it is probable that these costs will be incurred and can be reasonably estimated.
Remediation costs accrued amounted to $1 and $2 as of December 31, 2015 and 2014, respectively.
The accrual relates entirely to a conservation agreement entered into by a subsidiary of the Company with the National Oceanic and Atmospheric Administration (“NOAA”) requiring the Company to, among other provisions, implement certain measures to protect the steelhead trout and its habitat in the Carmel River watershed in the State of California.
The Company has agreed to pay $1 annually from 2010 to 2016.
The Company’s inception-to-date costs related to the NOAA agreement were recorded in regulatory assets in the accompanying Consolidated Balance Sheets as of December 31, 2015 and 2014 and are expected to be fully recovered from customers in future rates.
Derivative Financial Instruments The Company uses derivative financial instruments for purposes of hedging exposures to fluctuations in interest rates.
These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures.
The Company does not enter into derivative contracts for speculative purposes and does not use leveraged instruments.
All derivatives are recognized on the balance sheet at fair value.
On the date the derivative contract is entered into, the Company may designate the derivative as a hedge of the fair value of a recognized asset or liability (fair-value hedge) or a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge).
Changes in the fair value of a fair-value hedge, along with the gain or loss on the underlying hedged item, are recorded in current-period earnings.
The effective portion of gains and losses on cash-flow hedges are recorded in other comprehensive income, until earnings are affected by the variability of cash flows.
Any ineffective portion of designated hedges is recognized in current-period earnings.
Cash flows from derivative contracts are included in net cash provided by operating activities in the accompanying Consolidated Statements of Cash Flows.
Note 14 – Postretirement Plans The majority of our employees have earned benefits under defined benefit pension plans.
Nonunion and the majority of union employees that had participated in defined benefit pension plans will transition to a company-funded defined contribution retirement savings plan in 2016.
We fund our major pension plans through trusts.
Pension assets are placed in trust solely for the benefit of the plans’ participants, and are structured to maintain liquidity that is sufficient to pay benefit obligations as well as to keep pace over the long-term with the growth of obligations for future benefit payments.
We also have other postretirement benefits (OPB) other than pensions which consist principally of health care coverage for eligible retirees and qualifying dependents, and to a lesser extent, life insurance to certain groups of retirees.
Retiree health care is provided principally until age 65 for approximately half those retirees who are eligible for health care coverage.
Certain employee groups, including employees covered by most United Auto Workers bargaining agreements, are provided lifetime health care coverage.
The funded status of the plans is measured as the difference between the plan assets at fair value and the projected benefit obligation (PBO).
We have recognized the aggregate of all overfunded plans in Other assets, and the aggregate of all underfunded plans in either Accrued retiree health care or Accrued pension plan liability, net.
The portion of the amount by which the actuarial present value of benefits included in the PBO exceeds the fair value of plan assets, payable in the next 12 months, is reflected in Accrued liabilities.
The components of net periodic benefit cost were as follows:
## Table 1 ##
In 2015, we recorded charges of $290 related to curtailments and other benefit changes associated with certain of our defined benefit plans.
Contractual Obligations The following table summarizes our known obligations to make future payments pursuant to certain contracts as of December 31, 2015, and the estimated timing thereof.
## Table 2 ##
(1) Includes interest on variable rate debt calculated based on interest rates at December 31, 2015.
Variable rate debt was 3% of our total debt at December 31, 2015.
(2) Excludes income tax matters.
As of December 31, 2015, our net liability for income taxes payable, including uncertain tax positions, was $1,177 million.
We are not able to reasonably estimate the timing of future cash flows related to uncertain tax positions.
Pension and Other Postretirement Benefits Pension cash requirements are based on an estimate of our minimum funding requirements, pursuant to ERISA regulations, although we may make additional discretionary contributions.
Estimates of other postretirement benefits are based on both our estimated future benefit payments and the estimated contributions to plans that are funded through trusts.
Purchase Obligations Purchase obligations represent contractual agreements to purchase goods or services that are legally binding; specify a fixed, minimum or range of quantities; specify a fixed, minimum, variable, or indexed price provision; and specify approximate timing of the transaction.
Purchase obligations include amounts recorded as well as amounts that are not recorded on the Consolidated Statements of Financial Position.
Purchase Obligations Not Recorded on the Consolidated Statements of Financial Position Production related purchase obligations not recorded on the Consolidated Statements of Financial Position include agreements for inventory procurement, tooling costs, electricity and natural gas contracts, property, plant and equipment, and other miscellaneous production related obligations.
The most significant obligation relates to inventory procurement contracts.
We have entered into certain significant inventory procurement contracts that specify determinable prices and quantities, and long-term delivery timeframes.
In addition, we purchase raw materials on behalf of our suppliers.
These agreements require suppliers and vendors to be prepared to build and deliver items in sufficient time to meet our production schedules.
The need for such arrangements with suppliers and vendors arises from the extended production planning horizon for many of our products.
A significant portion of these inventory commitments is supported by firm contracts and/or has historically resulted in settlement through reimbursement from customers for penalty payments to the supplier should the customer not take delivery.
These amounts are also included in our forecasts of costs for program and contract accounting.
Some inventory procurement contracts may include escalation adjustments.
In these limited cases, we have included our best estimate of the effect of the escalation adjustment in the amounts disclosed in the table above.
Note 12 – Arrangements with Off-Balance Sheet Risk We enter into arrangements with off-balance sheet risk in the normal course of business, primarily in the form of guarantees.
The following table provides quantitative data regarding our third party guarantees.
The maximum potential payments represent a “worst-case scenario,” and do not necessarily reflect amounts that we expect to pay.
Estimated proceeds from collateral and recourse represent the anticipated values of assets we could liquidate or receive from other parties to offset our payments under guarantees.
The carrying amount of liabilities represents the amount included in Accrued liabilities.
## Table 3 ##
Contingent Repurchase Commitments The repurchase price specified in contingent repurchase commitments is generally lower than the expected fair value at the specified repurchase date.
Estimated proceeds from collateral/recourse in the table above represent the lower of the contracted repurchase price or the expected fair value of each aircraft at the specified repurchase date.
Indemnifications to ULA In 2006, we agreed to indemnify ULA through December 31, 2020 against potential non-recoverability and non-allowability of $1,360 of Boeing Delta launch program inventory included in contributed assets plus $1,860 of inventory subject to an inventory supply agreement which ends on March 31, 2021.
Since inception, ULA has consumed $1,253 of the $1,360 of inventory that was contributed by us and has yet to consume $107.
Under the inventory supply agreement, we have recorded revenues and cost of sales of $1,367 through December 31, 2015.
ULA has made payments of $1,740 to us under the inventory supply agreement and we have made $71 of indemnification payments to ULA.
We agreed to indemnify ULA against potential losses that ULA may incur in the event ULA is unable to obtain certain additional contract pricing from the USAF for four satellite missions.
We believe ULA is entitled to additional contract pricing.
In December 2008, ULA submitted a claim to the USAF to re-price the contract value for two satellite missions.
In March 2009, the USAF issued a denial of that claim.
In June 2009, ULA filed a notice of appeal, and in October 2009, ULA filed a complaint before the Armed Services Board of Contract Appeals (ASBCA) for a contract adjustment for the price of the two satellite missions.
In September 2009, the USAF exercised its option for a third satellite mission.
During the third quarter of 2010, ULA submitted a claim to the USAF to re-price the contract value of the third mission.
The USAF did not exercise an option for a fourth mission prior to the expiration of the contract.
In March 2011, ULA filed a notice of appeal before the ASBCA, seeking to re-price the third mission.
On November 20, 2013, the ASBCA denied USAF motions for summary judgment against ULA in large part, leaving ULA’s claims against the USAF substantially intact.
The hearing before the ASBCA concluded on December 20, 2013.
The parties filed their final post-hearing briefs in May 2014.
The ASBCA may now issue a decision at any time.
If ULA is ultimately unsuccessful in obtaining additional pricing, we may be responsible for an

<table><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Allowance for other funds used during construction</td><td>$13</td><td>$9</td><td>$13</td></tr><tr><td>Allowance for borrowed funds used during construction</td><td>8</td><td>6</td><td>6</td></tr></table>
<table><tr><td></td><td colspan="3">Pension</td><td colspan="3">Other Postretirement Benefits</td></tr><tr><td>Years ended December 31,</td><td>2015</td><td>2014</td><td>2013</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Service cost</td><td>$1,764</td><td>$1,661</td><td>$1,886</td><td>$140</td><td>$129</td><td>$148</td></tr><tr><td>Interest cost</td><td>2,990</td><td>3,058</td><td>2,906</td><td>248</td><td>289</td><td>263</td></tr><tr><td>Expected return on plan assets</td><td>-4,031</td><td>-4,169</td><td>-3,874</td><td>-8</td><td>-8</td><td>-6</td></tr><tr><td>Amortization of prior service costs/(credits)</td><td>196</td><td>177</td><td>196</td><td>-136</td><td>-144</td><td>-180</td></tr><tr><td>Recognized net actuarial loss</td><td>1,577</td><td>1,020</td><td>2,231</td><td>31</td><td>8</td><td>95</td></tr><tr><td>Settlement/curtailment/other losses</td><td>290</td><td>461</td><td>104</td><td>10</td><td>1</td><td></td></tr><tr><td>Net periodic benefit cost</td><td>$2,786</td><td>$2,208</td><td>$3,449</td><td>$285</td><td>$275</td><td>$320</td></tr><tr><td>Net periodic benefit cost included in Earnings from operations</td><td>$2,366</td><td>$3,215</td><td>$3,036</td><td>$288</td><td>$287</td><td>$353</td></tr></table>
<table><tr><td>(Dollars in millions)</td><td>Total</td><td>Lessthan 1year</td><td>1-3years</td><td>3-5years</td><td>After 5years</td></tr><tr><td>Long-term debt (including current portion)</td><td>$9,922</td><td>$1,186</td><td>$996</td><td>$2,358</td><td>$5,382</td></tr><tr><td>Interest on debt<sup>-1</sup></td><td>5,580</td><td>459</td><td>849</td><td>718</td><td>3,554</td></tr><tr><td>Pension and other postretirement cash requirements</td><td>14,146</td><td>640</td><td>1,718</td><td>4,222</td><td>7,566</td></tr><tr><td>Capital lease obligations</td><td>157</td><td>55</td><td>76</td><td>16</td><td>10</td></tr><tr><td>Operating lease obligations</td><td>1,529</td><td>244</td><td>405</td><td>277</td><td>603</td></tr><tr><td>Purchase obligations not recorded on the Consolidated Statements of Financial Position</td><td>123,100</td><td>43,471</td><td>31,741</td><td>24,465</td><td>23,423</td></tr><tr><td>Purchase obligations recorded on the Consolidated Statements of Financial Position</td><td>16,580</td><td>15,358</td><td>824</td><td>125</td><td>273</td></tr><tr><td>Total contractual obligations<sup>-2</sup></td><td>$171,014</td><td>$61,413</td><td>$36,609</td><td>$32,181</td><td>$40,811</td></tr></table>
<table><tr><td></td><td colspan="2">MaximumPotentialPayments</td><td colspan="2">EstimatedProceeds fromCollateral/Recourse</td><td colspan="2">CarryingAmount ofLiabilities</td></tr><tr><td>December 31,</td><td>2015</td><td>2014</td><td>2015</td><td>2014</td><td>2015</td><td>2014</td></tr><tr><td>Contingent repurchase commitments</td><td>$1,529</td><td>$1,375</td><td>$1,510</td><td>$1,364</td><td>$7</td><td>$5</td></tr><tr><td>Indemnifications to ULA:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Contributed Delta program launch inventory</td><td>107</td><td>114</td><td></td><td></td><td></td><td></td></tr><tr><td>Contract pricing</td><td>261</td><td>261</td><td></td><td></td><td>7</td><td>7</td></tr><tr><td>Other Delta contracts</td><td>231</td><td>150</td><td></td><td></td><td>5</td><td></td></tr><tr><td>Other indemnifications</td><td></td><td>63</td><td></td><td></td><td></td><td>20</td></tr><tr><td>Credit guarantees</td><td>30</td><td>30</td><td>27</td><td>27</td><td>2</td><td>2</td></tr></table>

Question: In which section the sum of Service cost has the highest value?
Answer: Pension