Also during 2006, the Entities acquired approximately $4.8 billion of International Paper debt obligations for cash, resulting in a total of approximately $5.2 billion of International Paper debt obligations held by the Entities at December 31, 2006.
The various agreements entered into in connection with these transactions provide that International Paper has, and intends to effect, a legal right to offset its obligation under these debt instruments with its investments in the Entities.
Accordingly, for financial reporting purposes, International Paper has offset approximately $5.2 billion of Class B interests in the Entities against $5.3 billion of International Paper debt obligations held by these Entities at December 31, 2014 and 2013.
Despite the offset treatment, these remain debt obligations of International Paper.
Remaining borrowings of $50 million and $67 million at December 31, 2014 and 2013, respectively, are included in floating rate notes due 2014 – 2019 in the summary of long-term debt in Note 13.
Additional debt related to the above transaction of $107 million and $79 million is included in short-term notes in the summary of long-term debt in Note 13 at December 31, 2014 and 2013.
The use of the above entities facilitated the monetization of the credit enhanced Timber Notes in a cost effective manner by increasing the borrowing capacity and lowering the interest rate, while providing for the offset accounting treatment described above.
Additionally, the monetization structure preserved the tax deferral that resulted from the 2006 forestlands sales.
The Company recognized a $1.4 billion deferred tax liability in connection with the 2006 forestlands sale, which will be settled with the maturity of the Timber Notes in the third quarter of 2016 (unless extended).
During 2011 and 2012, the credit ratings for two letter of credit banks that support $1.5 billion of Timber Notes were downgraded below the specified threshold.
These letters of credit were successfully replaced by other qualifying institutions.
Fees of $10 million were incurred during 2012 in connection with these replacements.
During 2012, an additional letter of credit bank that supports $707 million of Timber Notes was downgraded below the specified threshold.
In December 2012, the Company and the third-party managing member agreed to a continuing replacement waiver for these letters of credit, terminable upon 30 days notice.
Activity between the Company and the Entities was as follows:
## Table 0 ##
(a) The net expense related to the Company’s interest in the Entities is included in Interest expense, net in the accompanying consolidated statement of operations, as International Paper has and intends to effect its legal right to offset as discussed above.
(b) The cash receipts are equity distributions from the Entities to International Paper.
(c) The semi-annual payments are related to interest on the associated debt obligations discussed above.
Based on an analysis of the Entities discussed above under guidance that considers the potential magnitude of the variability in the structures and which party has a controlling financial interest, International Paper determined that it is not the primary beneficiary of the Entities, and therefore, should not consolidate its investments in these entities.
It was also determined that the source of variability in the structure is the value of the Timber Notes, the assets most significantly impacting the structure’s economic performance.
The credit quality of the Timber Notes is supported by irrevocable letters of credit obtained by third-party buyers which are 100% cash collateralized.
International Paper analyzed which party has control over the economic performance of each entity, and concluded International Paper does not have control over significant decisions surrounding the Timber Notes and letters of credit and therefore is not the primary beneficiary.
The Company’s maximum exposure to loss equals the value of the Timber Notes; however, an analysis performed by the Company concluded the likelihood of this exposure is remote.
International Paper also held variable interests in financing entities that were used to monetize long-term notes received from the sale of forestlands in 2002.  International Paper transferred notes (the Monetized Notes, with an original maturity of 10 years from inception) and cash of approximately $500 million to these entities in exchange for preferred interests, and accounted for the transfers as a sale of the notes with no associated gain or loss.
In the same period, the entities acquired approximately $500 million of International Paper debt obligations for cash.
International Paper has no obligation to make any further capital contributions to these entities and did not provide any financial support that was not previously contractually required during the years ended December 31, 2014, 2013 or 2012.
During 2012, $252 million of the 2002 Monetized Notes matured.
Cash receipts upon maturity were used to pay the associated debt obligations.
Effective June 1, 2012, International Paper liquidated its interest in the 2002 financing entities.
In connection with the acquisition of Temple-Inland in February 2012, two special purpose entities became wholly-owned subsidiaries of International Paper.
NORTHROP GRUMMAN CORPORATION -31- Protection Security System, Saudi Arabian American Oil Company, Netcents DKO, F-22 and several other programs, partially offset by higher volume on Encore II and Trailer Mounted Support System programs.
The lower civil sales volume is primarily due to the sale of the County of San Diego contract, which reduced sales by $70 million as compared to the same period in 2010, lower volume on the ENM program and completion of the Treasury Communications System program in 2010.
Operating income for 2011 increased $10 million, or 1 percent, and operating margin rate increased to 9.7 percent from 9.0 percent.
The increase is primarily driven by improved performance on several civil programs, including the Virginia Information Technologies Agency Outsource contract and the effect of the sale of the County of San Diego contract, partially offset by the lower sales volume in defense programs described above.
TECHNICAL SERVICES
## Table 1 ##
2012 - Technical Services sales for 2012 decreased $174 million, or 5 percent, as compared with 2011.
The decrease was primarily due to reduced volume from portfolio shaping of approximately $70 million as we focus our operations into core areas, lower KC-10 logistics activity of approximately $60 million and lower ICBM logistics and modernization activity of approximately $50 million.
Operating income for 2012 increased $8 million, or 3 percent, and operating margin rate increased to 8.9 percent from 8.1 percent.
The higher operating income and operating margin rate were primarily due to improved performance on the KC-10 program, partially offset by lower sales volume as described above.2011 - Technical Services sales for 2011 decreased $512 million, or 14 percent, as compared with 2010.
The decrease is primarily due to $606 million lower sales in defense and government systems, primarily due to the reduced participation in the NSTec joint venture.
Effective January 1, 2011, the company reduced its participation in this joint venture and deconsolidated it, resulting in no sales recorded for the joint venture for 2011, compared with sales of $579 million in 2010.
The decrease was partially offset by increased activity on the KC-10 program, which began in February 2010.
Operating income for 2011 increased $11 million, or 4 percent, and operating margin rate increased to 8.1 percent from 6.7 percent.
The increase in operating margin rate is primarily due to effects of the change in participation in the NSTec joint venture and performance improvements on several logistics and modernization and defense programs, partially offset by unfavorable program performance on KC-10.
PRODUCT AND SERVICE ANALYSIS
## Table 2 ##
(1) Product and service costs do not include an allocation of general and administrative expenses.2012 - Product costs as a percentage of product sales decreased 90 basis points for the year ended December 31, 2012, compared to 2011.
This improvement reflects higher margins on combat avionics at Electronic Systems.
Service costs as a percentage of service sales decreased 100 basis points for the year ended December 31, 2012, compared to 2011.
This improvement reflects higher service margins in all four business segments.
The
NORTHROP GRUMMAN CORPORATION -36- Contractual Obligations The following table presents our contractual obligations as of December 31, 2012, and the estimated timing of future cash payments:
## Table 3 ##
(1) A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable and legally binding on us and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction.
These amounts are primarily comprised of open purchase order commitments to vendors and subcontractors pertaining to funded contracts.
(2) Other long-term liabilities primarily consist of total accrued environmental reserves, deferred compensation, and other miscellaneous liabilities, of which $88 million is related to environmental reserves recorded in other current liabilities.
It excludes obligations for uncertain tax positions of $175 million, as the timing of such payments, if any, cannot be reasonably estimated.
Further details regarding long-term debt and operating leases can be found in Notes 10 and 12, respectively, to the consolidated financial statements in Part II, Item 8.
CRITICALACCOUNTING POLICIES, ESTIMATES, AND JUDGMENTS Revenue Recognition Overview – We derive the majority of our business from long-term contracts for development, production and support activities for the U. S.  Government.
These contracts are accounted for in conformity with GAAP for construction-type and production-type contracts and federal government contractors, generally using the percentageof-completion method accounting.
We classify contract revenues as product or service depending on the predominant attributes of the contract.
We consider the nature of these contracts and the types of products and services provided when determining the proper accounting method for a particular contract.
Percentage-of-Completion Accounting – The use of the percentage-of-completion method requires us to make reasonably dependable estimates for the design, manufacture, and delivery of our products and services.
We generally recognize revenues from our long-term contracts under the cost-to-cost or the units-of-delivery measures of the percentage-of-completion method of accounting.
The percentage-of-completion method recognizes revenue as work on a contract progresses.
Most of our contracts use the cost-to-cost method, where revenue is calculated based on the percentage of total costs incurred in relation to total estimated costs at completion of the contract.
The unitsof-delivery measure recognizes revenues as deliveries are made to the customer, generally using unit sales values.
Under both of these methods of percentage-of-completion accounting, we estimate profit as the difference between total estimated revenue and total estimated cost of a contract at completion, and recognize that profit as costs are incurred or as units are delivered.
Certain contracts contain provisions for price redetermination or for cost and/or performance incentives.
These amounts are included in sales when they are reasonably estimable.
Amounts representing un-priced change orders, claims, requests for equitable adjustment, or recovery of costs in excess of limitations in funding are included in estimated contract revenue only when they are reliably estimable and realization is probable.
Changes in estimates of contract revenues, costs, or profits are recognized using the cumulative catch-up method of accounting.
This method recognizes, in the current period, the cumulative effect of the changes on current and prior periods.
Revenue and profit on future periods of contract performance are recognized as if the revised estimate had been used since contract inception.
If it is determined that a loss will result from the performance of a contract, the entire amount of the estimable future loss is charged against income in the period the loss is identified.
Loss provisions are first offset against costs that are included in unbilled accounts receivable or inventoried costs, and any remaining amount is reflected in liabilities.
NORTHROP GRUMMAN CORPORATION -61- The changes in the carrying amounts of goodwill for the years ended December 31, 2012 and 2011, were as follows:
## Table 4 ##
Segment Realignments On January 1, 2012, the company transferred its missile business (principally the ICBM program), from Aerospace Systems to Technical Services.
In connection with this realignment, $51 million of goodwill was transferred from Aerospace Systems to Technical Services and is reflected in the amounts above for all years presented.
Purchased Intangible Assets As of December 31, 2012 and 2011, gross contract, program, and other intangible assets were $1.8 billion and accumulated amortization was $1.7 billion.
Net contract, program, and other intangible assets were $137 million, at December 31, 2012, and $155 million at December 31, 2011.
Amortization expense for 2012, 2011, and 2010, was $36 million, $37 million, and $71 million, respectively.
The company’s purchased intangible assets are being amortized on a straight-line basis over an aggregate weightedaverage period of 17 years and are included in other non-current assets in the consolidated statements of financial position.
As of December 31, 2012, the expected future amortization of purchased intangibles for each of the next five years is $30 million in 2013, $18 million in 2014, $17 million in 2015, $11 million in 2016, and $10 million in 2017.9.
FAIR VALUE OF FINANCIAL INSTRUMENTS The following table presents the fair value information for those assets and liabilities measured at fair value on a recurring basis:
## Table 5 ##
There were no transfers of financial instruments between the three levels of fair value hierarchy during the years ended December 31, 2012 and 2011.
The carrying value of cash and cash equivalents approximate fair value.
Investments in Marketable Securities The company holds a portfolio of marketable securities to partially fund long-term deferred compensation programs, consisting of equity securities that are classified as either trading or available-for-sale, which can be liquidated without restriction.
These assets are recorded at fair value and are valued using Level 1 inputs (quoted market prices).
In addition, the company occasionally holds short-term investments classified as held-to-maturity that are recorded at cost.
As of December 31, 2012, marketable securities of $261 million were included in other non-current assets in the consolidated statements of financial position.
As of December 31, 2011, marketable securities of $250 million were included in prepaid expenses and other current assets and $223 million were included in other noncurrent assets in the consolidated statements of financial position.

Tables referenced above, in order (Table 0 first):
<table><tr><td>In millions</td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Revenue (loss) (a)</td><td>$38</td><td>$45</td><td>$49</td></tr><tr><td>Expense (a)</td><td>72</td><td>79</td><td>90</td></tr><tr><td>Cash receipts (b)</td><td>22</td><td>33</td><td>36</td></tr><tr><td>Cash payments (c)</td><td>73</td><td>84</td><td>87</td></tr></table>
<table><tr><td></td><td colspan="3">Year Ended December 31</td></tr><tr><td>$ in millions</td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Sales</td><td>$3,019</td><td>$3,193</td><td>$3,705</td></tr><tr><td>Operating income</td><td>268</td><td>260</td><td>249</td></tr><tr><td>Operating margin rate</td><td>8.9%</td><td>8.1%</td><td>6.7%</td></tr></table>
<table><tr><td></td><td colspan="3">Year Ended December 31</td></tr><tr><td>$ in millions</td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Product sales</td><td>$13,838</td><td>$15,073</td><td>$16,091</td></tr><tr><td>Product costs<sup>-1</sup></td><td>10,415</td><td>11,491</td><td>12,558</td></tr><tr><td>% of product sales</td><td>75.3%</td><td>76.2%</td><td>78.0%</td></tr><tr><td>Service sales</td><td>11,380</td><td>11,339</td><td>12,052</td></tr><tr><td>Service costs<sup>-1</sup></td><td>9,223</td><td>9,295</td><td>10,291</td></tr><tr><td>% of service sales</td><td>81.0%</td><td>82.0%</td><td>85.4%</td></tr></table>
<table><tr><td>$ in millions</td><td>Total</td><td>2013</td><td>2014 -2015</td><td>2016 -2017</td><td>2018 andbeyond</td></tr><tr><td>Long-term debt</td><td>$ 3,924</td><td>$ 5</td><td>$ 855</td><td>$113</td><td>$2,951</td></tr><tr><td>Interest payments on long-term debt</td><td>2,485</td><td>207</td><td>401</td><td>356</td><td>1,521</td></tr><tr><td>Operating leases</td><td>1,071</td><td>274</td><td>435</td><td>233</td><td>129</td></tr><tr><td>Purchase obligations<sup>-1</sup></td><td>6,907</td><td>4,187</td><td>2,364</td><td>177</td><td>179</td></tr><tr><td>Other long-term liabilities<sup>-2</sup></td><td>878</td><td>88</td><td>242</td><td>100</td><td>448</td></tr><tr><td>Total contractual obligations</td><td>$15,265</td><td>$4,761</td><td>$4,297</td><td>$979</td><td>$5,228</td></tr></table>
<table><tr><td>$ in millions</td><td>AerospaceSystems</td><td>ElectronicSystems</td><td>InformationSystems</td><td>TechnicalServices</td><td>Total</td></tr><tr><td>Balance as of December 31, 2010</td><td>$3,801</td><td>$2,402</td><td>$5,248</td><td>$925</td><td>$12,376</td></tr><tr><td>Businesses sold</td><td>—</td><td>-2</td><td>—</td><td>—</td><td>-2</td></tr><tr><td>Balance as of December 31, 2011</td><td>$3,801</td><td>$2,400</td><td>$5,248</td><td>$925</td><td>$12,374</td></tr><tr><td>Businesses acquired, sold and other</td><td>-43</td><td>10</td><td>39</td><td>51</td><td>57</td></tr><tr><td>Balance as of December 31, 2012</td><td>$3,758</td><td>$2,410</td><td>$5,287</td><td>$976</td><td>$12,431</td></tr></table>
<table><tr><td></td><td colspan="2">December 31, 2012</td><td colspan="2">December 31, 2011</td></tr><tr><td>$ in millions</td><td>CarryingValue</td><td>FairValue</td><td>CarryingValue</td><td>FairValue</td></tr><tr><td>Financial Assets (Liabilities)</td><td></td><td></td><td></td><td></td></tr><tr><td>Marketable Securities</td><td></td><td></td><td></td><td></td></tr><tr><td>Trading</td><td>$ 259</td><td>$ 259</td><td>$ 219</td><td>$ 219</td></tr><tr><td>Available-for-sale</td><td>3</td><td>3</td><td>4</td><td>4</td></tr><tr><td>Held-to-maturity time deposits</td><td>—</td><td>—</td><td>250</td><td>250</td></tr><tr><td>Derivatives</td><td>-1</td><td>-1</td><td>7</td><td>7</td></tr><tr><td>Long-term debt, including current portion</td><td>-3,935</td><td>-4,834</td><td>-3,940</td><td>-4,675</td></tr></table>

Question: What is the average amount of Service costs of Year Ended December 31 2010, and Balance as of December 31, 2011 of AerospaceSystems ?
Answer: 7046
Reasoning program: add(10291.0,3801.0), divide(#0,const_2)