Fair value, which is primarily based on quoted market price of the related trust preferred securities at December 31, 2007 and 2006, was $250.8 million and $316.3 million, respectively, for the 6.20% junior subordinated debt securities and $221.2 million for the 7.85% junior subordinated debt securities at December 31, 2006.
Interest expense incurred in connection with these junior subordinated notes was $35.3 million, $37.4 million and $37.4 million for the years ended December 31, 2007, 2006 and 2005, respectively.
Capital Trust II is a wholly-owned finance subsidiary of Holdings.
Capital Trust was dissolved upon the completion of the redemption of the trust preferred securities on November 15, 2007.
Holdings considers that the mechanisms and obligations relating to the trust preferred securities, taken together, constitute a full and unconditional guarantee by Holdings of Capital Trust II’s payment obligations with respect to their trust preferred securities.
Capital Trust II will redeem all of the outstanding trust preferred securities when the junior subordinated debt securities are paid at maturity on March 29, 2034.
The Company may elect to redeem the junior subordinated debt securities, in whole or in part, at any time on or after March 30, 2009.
If such an early redemption occurs, the outstanding trust preferred securities would also be proportionately redeemed.
There are certain regulatory and contractual restrictions on the ability of Holdings’ operating subsidiaries to transfer funds to Holdings in the form of cash dividends, loans or advances.
The insurance laws of the State of Delaware, where Holdings’ direct insurance subsidiaries are domiciled, require regulatory approval before those subsidiaries can pay dividends or make loans or advances to Holdings that exceed certain statutory thresholds.
In addition, the terms of Holdings’ Credit Facility (discussed in Note 5) require Everest Re, Holdings’ principal insurance subsidiary, to maintain a certain statutory surplus level as measured at the end of each fiscal year.
At December 31, 2007, $2,595.1 million of the $3,269.7 million in net assets of Holdings’ consolidated subsidiaries were subject to the foregoing regulatory restrictions.9 .
L E T T E R S O F C R E D I T The Company has arrangements available for the issuance of letters of credit, which letters are generally collateralized by the Company’s cash and investments.
The Company’s agreement with Citibank is a bilateral letter of credit agreement only.
On November 6, 2007 the Citibank bilateral letter of credit agreement was decreased by $50.0 million to $300.0 million.
All other terms of this agreement remain the same.
The Company’s other facility, the Wachovia Group Credit Facility, involves a syndicate of lenders (see Note 5 of the Group Credit Facility), with Wachovia acting as administrative agent.
The Citibank Holdings Credit Facility involves a syndicate of lenders (see Note 5 of the Holdings Credit Facility), with Citibank acting as administrative agent.
At December 31, 2007 and 2006, letters of credit for $491.1 million and $460.0 million, respectively, were issued and outstanding.
The letters of credit collateralize reinsurance obligations of the Company’s non-U.
S.  operations.
The following table summarizes the Company’s letters of credit at December 31, 2007.
## Table 0 ##
Incurred Losses and LAE.
The following table presents the incurred losses and LAE for the U. S.  Reinsurance segment for the periods indicated.
## Table 1 ##
(Some amounts may not reconcile due to rounding. )
The current year’s attritional loss ratio improved by 7.9 points due to results from increased property quota share business.
We experienced $181.7 million of catastrophe loss development in 2006 which did not recur in 2007, which contributed another 14.6 points.
In addition, we had a greater amount of favorable reserve development related to prior years, which provided 7.0 points of improvement.
These favorable factors were partially mitigated by an 18.6 point increase driven by asbestos reserve strengthening.
Incurred losses and LAE decreased 42.5% to $851.2 million for 2006 compared to $1,479.6 million for 2005, primarily due to significantly reduced catastrophe losses, principally within the treaty property unit and decreased earned premiums.
The segment loss ratio improved by 39.6 points for 2006 compared to 2005.
The factors driving this change were a favorable 35.8 point decrease in catastrophe losses and a 5.1 point decrease in the attritional loss ratio.
Segment Expenses.
Commission and brokerage expenses increased by 9.8% to $327.2 million for 2007 from $298.1 million in 2006, principally due to an $18.9 million increase in contingent commissions and somewhat higher base ceding commissions, generally.
Segment other underwriting expenses for 2007 increased to $33.3 million from $24.9 million for 2006, principally due to the allocation of certain corporate charges to segments, which had been previously retained in corporate expenses.
Commission and brokerage decreased by 16.8% to $298.1 million in 2006 from $358.1 million in 2005, principally due to decreased earned premium volume and the mix of business.
Segment other underwriting expenses for 2006 increased nominally to $24.9 million from $24.0 million for 2005.
Contractual Obligations.
The following table shows our contractual obligations for the period indicated:
## Table 2 ##
(1) Interest expense on 6.6% long term notes is assumed to be fixed through contractual term.
(2) Loss and LAE reserves represent our best estimate of losses from claim and related settlement costs.
Both the amounts and timing of such payments are estimates, and the inherent variability of resolving claims as well as changes in market conditions make the timing of cash flows uncertain.
Therefore, the ultimate amount and timing of loss and LAE payments could differ from our estimates.
The contractual obligations for senior notes, long term notes and junior subordinated debt are the responsibility of Holdings.
We have sufficient cash flow, liquidity, investments and access to capital markets to satisfy these obligations.
Holdings generally depends upon dividends from Everest Re, its operating insurance subsidiary for its funding, capital contributions from Group or access to the capital markets.
Our various operating insurance and reinsurance subsidiaries have sufficient cash flow, liquidity and investments to settle outstanding reserves for losses and LAE.
Management believes that we, and each of our entities, have sufficient financial resources or ready access thereto, to meet all obligations.
Dividends.
During 2007, 2006 and 2005, we declared and paid shareholder dividends of $121.4 million, $39.0 million and $25.4 million, respectively.
As an insurance holding company, we are partially dependent on dividends and other permitted payments from our subsidiaries to pay cash dividends to our shareholders.
The payment of dividends to Group by Holdings and to Holdings by Everest Re is subject to Delaware regulatory restrictions and the payment of dividends to Group by Bermuda Re is subject to Bermuda insurance regulatory restrictions.
Management expects that, absent extraordinary catastrophe losses, such restrictions should not affect Everest Re’s ability to declare and pay dividends sufficient to support Holdings’ general corporate needs and that Holdings and Bermuda Re will have the ability to declare and pay dividends sufficient to support Group’s general corporate needs.
For the years ended December 31, 2007, 2006 and 2005, Everest Re paid dividends to Holdings of $245.0 million, $100.0 million and $75.0 million, respectively.
For the years ended December 31, 2007, 2006 and 2005, Bermuda Re paid dividends to Group of $0.0 million, $60.0 million and $45.0 million, respectively.
See ITEM 1, “Business – Regulatory Matters – Dividends” and Note 16 of Notes to Consolidated Financial Statements.
Application of New Accounting Standards.
In November 2005, the FASB issued FASB Staff Position (“FSP”) FAS 115-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments” (“FAS 115-1”), which is effective for reporting periods beginning after December 15, 2005.
FAS 115-1 addresses the determination as to when an investment is considered impaired, whether the impairment is other than temporary and the measurement of an impairment loss.
FAS 115-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses not recognized as other-than-temporary impairments.
The Company adopted FAS 115-1 prospectively effective January 1, 2006.
The Company believes that all unrealized losses in its investment portfolio are temporary in nature.
Item 6.
SELECTED FINANCIAL DATA The following table sets forth selected historical financial data of PCA (dollars in thousands, except per share data).
The information contained in the table should be read in conjunction with the disclosures in “Part II, Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 8.
Financial Statements and Supplementary Data” of this Form 10-K.
## Table 3 ##
(a) On October 25, 2013, we acquired Boise Inc.  (Boise).
The 2013 consolidated earnings results include Boise for the period of October 25 through December 31, 2013.
(b) EBITDA represents income before interest (interest expense and interest income), income tax provision (benefit), and depreciation, amortization, and depletion.
We present EBITDA because it provides a means to evaluate our performance on an ongoing basis using the same measure that is used by our management and because it is frequently used by investors and other interested parties in the evaluation of companies.
EBITDA, however, is not a measure of our liquidity or financial performance under generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income, income from operations, or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.
The use of EBITDA instead of net income has limitations as an analytical tool, including the inability to determine profitability; the exclusion of interest expense, interest income, and associated significant cash requirements; and the exclusion of depreciation, amortization, and depletion, which represent significant and unavoidable operating costs, given the level of our indebtedness and the capital expenditures needed to maintain our businesses.
Our measures of EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.
Any analysis of non-GAAP financial measures should be done in conjunction with results presented in accordance with GAAP.
The non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such.
See “Reconciliations of NonGAAP Financial Measures to Reported Amounts” included in this Item 7 for a reconciliation of non-GAAP measures to the most comparable GAAP measure.
expense was primarily a result of lower capitalized interest ($6.3 million) related primarily to the Counce, Tennessee linerboard mill and Valdosta, Georgia linerboard mill major energy projects and additional interest expense ($2.1 million) related to PCA’s term loan of $150.0 million borrowed in October 2011.
PCA’s effective tax rate was 57.0% for the year ended December 31, 2012, which included a 22.5% higher rate from amending our 2009 tax return in 2012 related to alternative energy tax credits as described in Note 6, Alternative Energy Tax Credits, of the Notes to Consolidated Financial Statements in “Part II, Item 8.
Financial Statements and Supplementary Data” of this Form 10-K.
Excluding the amendment, the 2012 effective tax rate would have been 34.5% for the year ended December 31, 2012, compared to 35.1% for the year ended December 31, 2011.
The effective tax rate varies from the U. S.  federal statutory tax rate of 35.0% principally due to the impact of the alternative energy tax credits in 2012, state and local income taxes and the domestic manufacturers’ deduction.
PCA had no material changes to its reserve for unrecognized tax benefits under ASC 740, “Income Taxes,” during 2012.
Liquidity and Capital Resources Sources and Uses of Cash Our primary sources of liquidity are net cash provided by operating activities and available borrowing capacity under our revolving credit facility.
We ended the year with $191.0 million of cash and $331.0 million of unused borrowing capacity under the revolving credit facility, net of letters of credit.
Currently, our primary uses of cash are for operations, capital expenditures, debt service (including voluntary payments of debt), and declared common stock dividends, which we expect to be able to fund from these sources.
We believe that net cash generated from operating activities, cash on hand, available borrowings under our revolving credit facility and available capital through access to capital markets will be adequate to meet our liquidity and capital requirements, including payments of any declared common stock dividends for the foreseeable future.
As our debt or credit facilities become due, we will need to repay, extend or replace such facilities.
Our ability to do so will be subject to future economic conditions and financial, business, and other factors, many of which are beyond our control.
Below is a summary table of our cash flows, followed by a discussion of our sources and uses of cash through operating activities, investing activities, and financing activities (dollars in millions):
## Table 4 ##
Our foreign operations are not material to our financial position or results of operations.
At December 31, 2013, we had $7.1 million of cash and short-term investments held in operations outside of the United States.
We indefinitely reinvest our earnings in operations outside the United States; however, if foreign earnings were repatriated at a future date, we would need to accrue and pay taxes.
It is not practicable to determine the amount of unrecognized deferred tax liability on these undistributed earnings because the actual tax liability, if any, is dependent on circumstances existing when the repatriation occurs.
Item 11.
EXECUTIVE COMPENSATION Information with respect to executive compensation required by this Item 11 will be included in PCA’s Proxy Statement under the captions “Compensation Discussion and Analysis,” “Executive Officer and Director Compensation” (including all subcaptions and tables thereunder) and “Board Committees — Compensation Committee” and is incorporated herein by reference.
Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information with respect to security ownership of certain beneficial owners and management required by this Item 12 will be included in PCA’s Proxy Statement under the caption “Ownership of Our Stock” and is incorporated herein by reference.

<table><tr><td>Bank</td><td></td><td>Commitment</td><td>In Use</td><td>Date of Expiry</td></tr><tr><td>Citibank-Bilateral Letter of Credit Agreement</td><td></td><td>$ 300,000</td><td>$ 46,968</td><td>08/03/2008</td></tr><tr><td></td><td></td><td></td><td>29,979</td><td>12/31/2008</td></tr><tr><td></td><td></td><td></td><td>50,789</td><td>12/31/2010</td></tr><tr><td></td><td></td><td></td><td>36,165</td><td>12/31/2011</td></tr><tr><td colspan="2">Total Citibank Bilateral Agreement</td><td>$ 300,000</td><td>$ 163,901</td><td></td></tr><tr><td>Citibank Holdings Credit Facility</td><td></td><td>$ 150,000</td><td>$ 17,204</td><td>12/31/2008</td></tr><tr><td colspan="2">Total Citibank Holdings Credit Facility</td><td>$ 150,000</td><td>$ 17,204</td><td></td></tr><tr><td>Wachovia Group Credit Facility</td><td>Tranche One</td><td>$ 350,000</td><td>$ 22,038</td><td>05/09/2008</td></tr><tr><td></td><td>Tranche Two</td><td>500,000</td><td>287,995</td><td>12/31/2008</td></tr><tr><td colspan="2">Total Wachovia Group Credit Facility</td><td>$ 850,000</td><td>$ 310,033</td><td></td></tr><tr><td>Total letters of credit</td><td></td><td>$ 1,300,000</td><td>$ 491,138</td><td></td></tr></table>
<table><tr><td></td><td colspan="9">Years Ended December 31,</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td colspan="3">2007</td><td colspan="3">2006</td><td colspan="3">2005</td><td colspan="3">2007/2006 Variance</td><td colspan="3">2006/2005 Variance</td></tr><tr><td></td><td>Current</td><td>Prior</td><td>Total</td><td>Current</td><td>Prior</td><td>Total</td><td>Current</td><td>Prior</td><td>Total</td><td>Current</td><td>Prior</td><td>Total</td><td>Current</td><td>Prior</td><td>Total</td></tr><tr><td>(Dollars in millions)</td><td>Year</td><td>Years</td><td>Incurred</td><td>Year</td><td>Years</td><td>Incurred</td><td>Year</td><td>Years</td><td>Incurred</td><td>Year</td><td>Years</td><td>Incurred</td><td>Year</td><td>Years</td><td>Incurred</td></tr><tr><td>Attritional</td><td>$ 583.9</td><td>$ -139.9</td><td>$ 443.9</td><td>$ 683.6</td><td>$ -50.4</td><td>$ 633.2</td><td>$ 824.3</td><td>$ -63.3</td><td>$ 760.9</td><td>$ -99.7</td><td>$ -89.5</td><td>$ -189.3</td><td>$ -140.7</td><td>$ 12.9</td><td>$ -127.7</td></tr><tr><td>Catastrophes</td><td>0.1</td><td>-5.0</td><td>-4.9</td><td>8.9</td><td>181.7</td><td>190.6</td><td>634.6</td><td>72.5</td><td>707.2</td><td>-8.8</td><td>-186.7</td><td>-195.5</td><td>-625.7</td><td>109.2</td><td>-516.6</td></tr><tr><td>A&E</td><td>-</td><td>266.4</td><td>266.4</td><td>-</td><td>27.4</td><td>27.4</td><td>-</td><td>11.5</td><td>11.5</td><td>-</td><td>239.0</td><td>239.0</td><td>-</td><td>15.9</td><td>15.9</td></tr><tr><td>Total segment</td><td>$ 584.0</td><td>$ 121.4</td><td>$ 705.4</td><td>$ 692.5</td><td>$ 158.7</td><td>$ 851.2</td><td>$ 1,458.8</td><td>$ 20.7</td><td>$ 1,479.6</td><td>$ -108.5</td><td>$ -37.3</td><td>$ -145.8</td><td>$ -766.3</td><td>$ 138.0</td><td>$ -628.4</td></tr><tr><td>Loss ratio</td><td>45.5%</td><td>9.5%</td><td>55.0%</td><td>54.1%</td><td>12.4%</td><td>66.4%</td><td>104.5%</td><td>1.5%</td><td>106.0%</td><td>-8.6</td><td>-2.9</td><td>-11.4</td><td>-50.4</td><td>10.9</td><td>-39.6</td></tr><tr><td colspan="3">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
<table><tr><td></td><td>Payments due by period</td></tr><tr><td>(Dollars in millions)</td><td>Total</td><td>Less than 1 year</td><td>1-3 years</td><td>3-5 years</td><td>More than 5 years</td></tr><tr><td>8.75% Senior notes</td><td>$ 200.0</td><td>$ -</td><td>$ 200.0</td><td>$ -</td><td>$ -</td></tr><tr><td>5.40% Senior notes</td><td>250.0</td><td>-</td><td>-</td><td>-</td><td>250.0</td></tr><tr><td>Junior subordinated debt</td><td>329.9</td><td>-</td><td>-</td><td>-</td><td>329.9</td></tr><tr><td>6.6% Long term notes</td><td>400.0</td><td>-</td><td>-</td><td>-</td><td>400.0</td></tr><tr><td>Interest expense-1</td><td>2,243.0</td><td>77.2</td><td>145.7</td><td>119.5</td><td>1,900.6</td></tr><tr><td>Employee benefit plans</td><td>2.4</td><td>2.4</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Operating lease agreements</td><td>32.0</td><td>8.5</td><td>16.3</td><td>3.7</td><td>3.5</td></tr><tr><td>Gross reserve for losses and LAE-2</td><td>9,040.6</td><td>2,053.2</td><td>3,232.3</td><td>1,077.1</td><td>2,678.1</td></tr><tr><td>Total</td><td>$ 12,497.9</td><td>$ 2,141.3</td><td>$ 3,594.3</td><td>$ 1,200.3</td><td>$ 5,562.0</td></tr></table>
<table><tr><td></td><td colspan="5">Year Ended December 31</td></tr><tr><td></td><td>2013 (a)</td><td>2012</td><td>2011</td><td>2010</td><td>2009</td></tr><tr><td>Statement of Income Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net Sales</td><td>$3,665,308</td><td>$2,843,877</td><td>$2,620,111</td><td>$2,435,606</td><td>$2,147,589</td></tr><tr><td>Net Income</td><td>436,283</td><td>163,820</td><td>158,027</td><td>205,435</td><td>265,895</td></tr><tr><td>Net income per common share:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>— basic</td><td>4.52</td><td>1.70</td><td>1.59</td><td>2.02</td><td>2.62</td></tr><tr><td>— diluted</td><td>4.47</td><td>1.68</td><td>1.57</td><td>2.00</td><td>2.60</td></tr><tr><td>Weighted average common shares outstanding:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>— basic</td><td>96,579</td><td>96,384</td><td>99,281</td><td>101,678</td><td>101,577</td></tr><tr><td>— diluted</td><td>97,547</td><td>97,497</td><td>100,376</td><td>102,608</td><td>102,358</td></tr><tr><td>Earnings, before interest, taxes, depreciation, and amortization (EBITDA) (b)</td><td>$675,400</td><td>$614,201</td><td>$436,383</td><td>$341,680</td><td>$503,671</td></tr><tr><td>Cash dividends declared per common share</td><td>1.51</td><td>1.00</td><td>0.80</td><td>0.60</td><td>0.60</td></tr><tr><td>Balance Sheet Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$5,199,974</td><td>$2,453,768</td><td>$2,412,499</td><td>$2,225,910</td><td>$2,152,840</td></tr><tr><td>Total debt obligations</td><td>2,572,749</td><td>819,498</td><td>830,280</td><td>680,601</td><td>680,878</td></tr><tr><td>Stockholders' equity</td><td>1,313,015</td><td>969,461</td><td>928,910</td><td>1,009,001</td><td>898,845</td></tr></table>
<table><tr><td></td><td colspan="3">Year Ended December 31</td></tr><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>Net cash provided by (used for):</td><td></td><td></td><td></td></tr><tr><td>Operating activities</td><td>$608.2</td><td>$404.2</td><td>$345.5</td></tr><tr><td>Investing activities</td><td>-1,411.4</td><td>-107.5</td><td>-350.1</td></tr><tr><td>Financing activities</td><td>786.8</td><td>-245.6</td><td>-35.6</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents</td><td>$-16.4</td><td>$51.1</td><td>$-40.2</td></tr></table>

Question: In the year with the most Net Sales in Table 0, what is the growth rate of Operating activities in Table 1?
Answer: 0.5047