The Company orders components for its products and builds inventory in advance of product shipments.
Because the Company’s markets are volatile and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and produce or order from third-parties excess or insufficient inventories of particular products or components.
The Company’s operating results and financial condition in the past have been and may in the future be materially adversely affected by the Company’s ability to manage its inventory levels and outstanding purchase commitments and to respond to short-term shifts in customer demand patterns.
Gross margin declined in 2004 to 27.3% of net sales from 27.5% of net sales in 2003.
The Company’s gross margin during 2004 declined due to an increase in mix towards lower margin iPod and iBook sales, pricing actions on certain Power Macintosh G5 models that were transitioned during the beginning of 2004, higher warranty costs on certain portable Macintosh products, and higher freight and duty costs during 2004.
These unfavorable factors were partially offset by an increase in direct sales and a 39% year-over-year increase in higher margin software sales.
Operating Expenses Operating expenses for each of the last three fiscal years are as follows (in millions, except for percentages):
## Table 0 ##
Research and Development (R&D) The Company recognizes that focused investments in R&D are critical to its future growth and competitive position in the marketplace and are directly related to timely development of new and enhanced products that are central to the Company’s core business strategy.
The Company has historically relied upon innovation to remain competitive.
R&D expense amounted to approximately 4% of total net sales during 2005 down from 6% and 8% of total net sales in 2004 and 2003, respectively.
This decrease is due to the significant increase of 68% in total net sales of the Company for 2005.
Although R&D expense decreased as a percentage of total net sales in 2005, actual expense for R&D in 2005 increased $45 million or 9% from 2004, which follows an $18 million or 4% increase in 2004 compared to 2003.
The overall increase in R&D expense relates primarily to increased headcount and support for new product development activities and the impact of employee salary increases in 2005.
R&D expense does not include capitalized software development costs of approximately $29.7 million related to the development of Mac OS X Tiger during 2005; $4.5 million related to the development of Mac OS X Tiger and $2.3 million related to the development of FileMaker Pro 7 in 2004; and $14.7 million related to the development of Mac OS X Panther in 2003.
Further information related to the Company’s capitalization of software development costs may be found in Part II, Item 8 of this Form 10-K at Note 1 of Notes to Consolidated Financial Statements.
Selling, General, and Administrative Expense (SG&A) Expenditures for SG&A increased $438 million or 31% during 2005 compared to 2004.
These increases are due primarily to the Company’s continued expansion of its Retail segment in both domestic and international markets, a current year increase in discretionary spending on marketing and advertising, and higher direct and channel selling expenses resulting from the increase in net sales and employee salary
Table IV Outstanding Loans and Leases (1)
## Table 1 ##
(1) 2013, 2012, 2011 and 2010 are presented in accordance with consolidation guidance that was effective January 1, 2010.
(2) Includes pay option loans of $4.4 billion, $6.7 billion, $9.9 billion, $11.8 billion and $13.4 billion, and non-U.
S.  residential mortgage loans of $0, $93 million, $85 million, $90 million and $552 million at December 31, 2013, 2012, 2011, 2010 and 2009, respectively.
The Corporation no longer originates pay option loans (3) Includes dealer financial services loans of $38.5 billion, $35.9 billion, $43.0 billion, $43.3 billion and $41.6 billion; consumer lending loans of $2.7 billion, $4.7 billion, $8.0 billion, $12.4 billion and $19.7 billion; U. S.  securities-based lending loans of $31.2 billion, $28.3 billion, $23.6 billion, $16.6 billion and $12.9 billion; non-U.
S.  consumer loans of $4.7 billion, $8.3 billion, $7.6 billion, $8.0 billion and $8.0 billion; student loans of $4.1 billion, $4.8 billion, $6.0 billion, $6.8 billion and $10.8 billion; and other consumer loans of $1.0 billion, $1.2 billion, $1.5 billion, $3.2 billion and $4.2 billion at December 31, 2013, 2012, 2011, 2010 and 2009, respectively.
(4) Includes consumer finance loans of $1.2 billion, $1.4 billion, $1.7 billion, $1.9 billion and $2.3 billion; consumer leases of $606 million, $34 million, $0, $0 and $0; consumer overdrafts of $176 million, $177 million, $103 million, $88 million and $144 million; and other non-U.
S.  consumer loans of $5 million, $5 million, $929 million, $803 million and $709 million at December 31, 2013, 2012, 2011, 2010 and 2009, respectively.
(5) Consumer loans accounted for under the fair value option were residential mortgage loans of $2.0 billion, $1.0 billion and $2.2 billion, and home equity loans of $147 million, $0 and $0 at December 31, 2013, 2012 and 2011, respectively.
There were no consumer loans accounted for under the fair value option prior to 2011.
Commercial loans accounted for under the fair value option were U. S.  commercial loans of $1.5 billion, $2.3 billion, $2.2 billion, $1.6 billion and $3.0 billion; commercial real estate loans of $0, $0, $0, $79 million and $90 million; and non-U.
S.  commercial loans of $6.4 billion, $5.7 billion, $4.4 billion, $1.7 billion and $1.9 billion at December 31, 2013, 2012, 2011, 2010 and 2009, respectively.
(6) Includes U. S.  small business commercial loans, including card-related products, of $13.3 billion, $12.6 billion, $13.3 billion, $14.7 billion and $17.5 billion at December 31, 2013, 2012, 2011, 2010 and 2009, respectively.
(7) Includes U. S.  commercial real estate loans of $46.3 billion, $37.2 billion, $37.8 billion, $46.9 billion and $66.5 billion, and non-U.
S.  commercial real estate loans of $1.6 billion, $1.5 billion, $1.8 billion, $2.5 billion and $3.0 billion at December 31, 2013, 2012, 2011, 2010 and 2009, respectively
Note 25.
Commitments and Guarantees Commitments In our Aviation segment, we had committed to provide financing assistance on $2,116 million of future customer acquisitions of aircraft equipped with our engines, including commitments made to airlines in 2012 for future sales under our GE90 and GEnx engine campaigns.
The GECAS business of GE Capital had placed multiple-year orders for various Boeing, Airbus and other aircraft with list prices approximating $25,735 million and secondary orders with airlines for used aircraft of approximately $1,098 million at December 31, 2012.
Product Warranties We provide for estimated product warranty expenses when we sell the related products.
Because warranty estimates are forecasts that are based on the best available information—mostly historical claims experience—claims costs may differ from amounts provided.
An analysis of changes in the liability for product warranties follows.
## Table 2 ##
Guarantees At December 31, 2012, we were committed under the following guarantee arrangements beyond those provided on behalf of VIEs.
See Note 24.
T CREDIT SUPPORT.
We have provided $3,292 million of credit support on behalf of certain customers or associated companies, predominantly joint ventures and partnerships, using arrangements such as standby letters of credit and performance guarantees.
These arrangements enable these customers and associated companies to execute transactions or obtain desired financing arrangements with third parties.
Should the customer or associated company fail to perform under the terms of the transaction or financing arrangement, we would be required to perform on their behalf.
Under most such arrangements, our guarantee is secured, usually by the asset being purchased or financed, or possibly by certain other assets of the customer or associated company.
The length of these credit support arrangements parallels the length of the related financing arrangements or transactions.
The liability for such credit support was $41 million at December 31, 2012.
T INDEMNIFICATION AGREEMENTS.
We have agreements that require us to fund up to $140 million at December 31, 2012 under residual value guarantees on a variety of leased equipment.
Under most of our residual value guarantees, our commitment is secured by the leased asset.
The liability for these indemnification agreements was $25 million at December 31, 2012.
In connection with the transfer of the NBCU business to Comcast, we have provided guarantees, on behalf of NBCU LLC, for the acquisition of sports programming that are triggered only in the event NBCU LLC fails to meet its payment commitments.
At December 31, 2012, our indemnification under these arrangements was $7,468 million.
This amount was determined based on our current ownership share of NBCU LLC and will change proportionately based on any future changes to our ownership share.
Comcast has agreed to indemnify us for $383 million related to their proportionate share of pre-existing NBCU LLC guarantees.
The liability for our NBCU LLC indemnification agreements was $151 million at December 31, 2012.
At December 31, 2012, we also had $2,771 million of other indemnification commitments, substantially all of which relate to standard representations and warranties in sales of other businesses or assets.
T CONTINGENT CONSIDERATION.
These are agreements to provide additional consideration to a buyer or seller in a business combination if contractually specified conditions related to the acquisition or disposition are achieved.
Adjustments to the proceeds from our sale of GE Money Japan are further discussed in Note 2.
All other potential payments related to contingent consideration are insignificant.
Our guarantees are provided in the ordinary course of business.
We underwrite these guarantees considering economic, liquidity and credit risk of the counterparty.
We believe that the likelihood is remote that any such arrangements could have a significant adverse effect on our financial position, results of operations or liquidity.
We record liabilities for guarantees at estimated fair value, generally the amount of the premium received, or if we do not receive a premium, the amount based on appraisal, observed market values or discounted cash flows.
Any associated expected recoveries from third parties are recorded as other receivables, not netted against the liabilities.
LENNAR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) balance sheets.
The activity in the Company’s loan origination liabilities for the years ended November 30, 2010 and 2009 was as follows:
## Table 3 ##
Adjustments to pre-existing provision for losses from changes in estimates for the year ended November 30, 2010 and 2009 include an adjustment for additional repurchase requests that were received beyond the estimated provision that was recorded due to an increase in potential issues identified by certain investors.
Loans for which the Company has the positive intent and ability to hold to maturity consist of mortgage loans carried at lower of cost, net of unamortized discounts or fair value on a nonrecurring basis.
Discounts are amortized over the estimated lives of the loans using the interest method.
The Company also provides an allowance for loan losses.
The provision recorded and the adequacy of the related allowance is determined by the Company’s management’s continuing evaluation of the loan portfolio in light of past loan loss experience, credit worthiness and nature of underlying collateral, present economic conditions and other factors considered relevant by the Company’s management.
Anticipated changes in economic factors, which may influence the level of the allowance, are considered in the evaluation by the Company’s management when the likelihood of the changes can be reasonably determined.
While the Company’s management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary as a result of future economic and other conditions that may be beyond management’s control.
Rialto Investments Loans Receivable—Revenue Recognition All of the acquired loans for which (1) there was evidence of credit quality deterioration since origination and (2) for which it was deemed probable that the Company would be unable to collect all contractually required principal and interest payments were accounted under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (“ASC 310-30”).
For loans accounted for under ASC 310-30, management determined upon acquisition the loan’s value based on extensive due diligence on each of the loans, the underlying properties and the borrowers.
The Company determined fair value by discounting the cash flows expected to be collected adjusted for factors that a market participant would consider when determining fair value.
Factors considered in the valuation were projected cash flows for the loans, type of loan and related collateral, classification status and current discount rates.
Since the estimates are based on projections, all estimates are subjective and can change due to unexpected changes in economic conditions and loan performance.
Under ASC 310-30, loans were pooled together according to common risk characteristics.
A pool is then accounted for as a single asset with a single component interest rate and as aggregate expectation of cash flows.
The excess of the cash flows expected to be collected from the loans receivable at acquisition over the initial investment for those loans receivable is referred to as the accretable yield and is recognized in interest income over the expected life of the pools primarily using the effective yield method.
The difference between contractually required payments at acquisition and the cash flows expected to be collected is referred to as the nonaccretable difference.
Changes in the expected cash flows of loans receivable from the date of acquisition will either impact the accretable yield or result in a charge to the provision for loan losses in the period in which the changes become probable.
Prepayments are treated as a reduction of cash flows expected to be collected and a reduction of contractually required payments such that the nonaccretable difference is not affected.
Subsequent significant decreases to the expected cash flows will generally result in a charge to the provision for loan losses, 86

<table><tr><td></td><td>September 24,  2005</td><td>September 25,  2004</td><td>September 27,  2003</td></tr><tr><td>Research and development</td><td>$534</td><td>$489</td><td>$471</td></tr><tr><td>Percentage of net sales</td><td>4%</td><td>6%</td><td>8%</td></tr><tr><td>Selling, general, and administrative expenses</td><td>$1,859</td><td>$1,421</td><td>$1,212</td></tr><tr><td>Percentage of net sales</td><td>13%</td><td>17%</td><td>20%</td></tr><tr><td>Restructuring costs</td><td>$—</td><td>$23</td><td>$26</td></tr></table>
<table><tr><td></td><td colspan="5">December 31</td></tr><tr><td>(Dollars in millions)</td><td>2013</td><td>2012</td><td>2011</td><td>2010</td><td>2009</td></tr><tr><td>Consumer</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage<sup>-2</sup></td><td>$248,066</td><td>$252,929</td><td>$273,228</td><td>$270,901</td><td>$256,748</td></tr><tr><td>Home equity</td><td>93,672</td><td>108,140</td><td>124,856</td><td>138,161</td><td>149,361</td></tr><tr><td>U.S. credit card</td><td>92,338</td><td>94,835</td><td>102,291</td><td>113,785</td><td>49,453</td></tr><tr><td>Non-U.S. credit card</td><td>11,541</td><td>11,697</td><td>14,418</td><td>27,465</td><td>21,656</td></tr><tr><td>Direct/Indirect consumer<sup>-3</sup></td><td>82,192</td><td>83,205</td><td>89,713</td><td>90,308</td><td>97,236</td></tr><tr><td>Other consumer<sup>-4</sup></td><td>1,977</td><td>1,628</td><td>2,688</td><td>2,830</td><td>3,110</td></tr><tr><td>Total consumer loans excluding loans accounted for under the fair value option</td><td>529,786</td><td>552,434</td><td>607,194</td><td>643,450</td><td>577,564</td></tr><tr><td>Consumer loans accounted for under the fair value option<sup>-5</sup></td><td>2,164</td><td>1,005</td><td>2,190</td><td>—</td><td>—</td></tr><tr><td>Total consumer</td><td>531,950</td><td>553,439</td><td>609,384</td><td>643,450</td><td>577,564</td></tr><tr><td>Commercial</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. commercial<sup>-6</sup></td><td>225,851</td><td>209,719</td><td>193,199</td><td>190,305</td><td>198,903</td></tr><tr><td>Commercial real estate<sup>-7</sup></td><td>47,893</td><td>38,637</td><td>39,596</td><td>49,393</td><td>69,447</td></tr><tr><td>Commercial lease financing</td><td>25,199</td><td>23,843</td><td>21,989</td><td>21,942</td><td>22,199</td></tr><tr><td>Non-U.S. commercial</td><td>89,462</td><td>74,184</td><td>55,418</td><td>32,029</td><td>27,079</td></tr><tr><td>Total commercial loans excluding loans accounted for under the fair value option</td><td>388,405</td><td>346,383</td><td>310,202</td><td>293,669</td><td>317,628</td></tr><tr><td>Commercial loans accounted for under the fair value option<sup>-5</sup></td><td>7,878</td><td>7,997</td><td>6,614</td><td>3,321</td><td>4,936</td></tr><tr><td>Total commercial</td><td>396,283</td><td>354,380</td><td>316,816</td><td>296,990</td><td>322,564</td></tr><tr><td>Total loans and leases</td><td>$928,233</td><td>$907,819</td><td>$926,200</td><td>$940,440</td><td>$900,128</td></tr></table>
<table><tr><td>(In millions)</td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Balance at January 1</td><td>$1,507</td><td>$1,405</td><td>$1,641</td></tr><tr><td>Current-year provisions</td><td>611</td><td>866</td><td>491</td></tr><tr><td>Expenditures</td><td>-723</td><td>-881</td><td>-710</td></tr><tr><td>Other changes</td><td>-12</td><td>117</td><td>-17</td></tr><tr><td>Balance at December 31</td><td>$1,383</td><td>$1,507</td><td>$1,405</td></tr></table>
<table><tr><td></td><td colspan="2">November 30,</td></tr><tr><td></td><td>2010</td><td>2009</td></tr><tr><td></td><td colspan="2">(In thousands)</td></tr><tr><td>Loan origination liabilities, beginning of year</td><td>$9,518</td><td>$5,271</td></tr><tr><td>Provision for losses issued during the period</td><td>416</td><td>303</td></tr><tr><td>Adjustments to pre-existing provision for losses from changes in estimates</td><td>2,901</td><td>14,109</td></tr><tr><td>Payments/settlements</td><td>-2,963</td><td>-10,165</td></tr><tr><td>Loan origination liabilities, end of year</td><td>$9,872</td><td>$9,518</td></tr></table>

Question: What is the growing rate of Total consumer in the years with the least Home equity?
Answer: -0.03883