Research and Development We are committed to investing in highly productive research and development capabilities, particularly in electro-mechanical systems.
Our research and development ("R&D") expenditures were approximately $48.3 million, $47.3 million and $45.2 million for the years ended December 31, 2017, 2016 and 2015, respectively.
We concentrate on developing technology innovations that will deliver growth through the introduction of new products and solutions, and also on driving continuous improvements in product cost, quality, safety and sustainability.
We manage our R&D team as a global group with an emphasis on a global collaborative approach to identify and develop new technologies and worldwide product platforms.
We are organized on a regional basis to leverage expertise in local standards and configurations.
In addition to regional engineering centers in each geographic region, we also operate a global engineering center of excellence in Bangalore, India.
Seasonality Our business experiences seasonality that varies by product line.
Because more construction and do-it-yourself projects occur during the second and third calendar quarters of each year in the Northern Hemisphere, our security product sales, typically, are higher in those quarters than in the first and fourth calendar quarters.
However, our Interflex business typically experiences higher sales in the fourth calendar quarter due to project timing.
Revenue by quarter for the years ended December 31, 2017, 2016 and 2015 are as follows:
## Table 0 ##
Employees We currently have approximately 10,000 employees.
Environmental Regulation We have a dedicated environmental program that is designed to reduce the utilization and generation of hazardous materials during the manufacturing process as well as to remediate identified environmental concerns.
As to the latter, we are currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former production facilities.
The Company regularly evaluates its remediation programs and considers alternative remediation methods that are in addition to, or in replacement of, those currently utilized by the Company based upon enhanced technology and regulatory changes.
We are sometimes a party to environmental lawsuits and claims and have received notices of potential violations of environmental laws and regulations from the U. S.  Environmental Protection Agency (the "EPA") and similar state authorities.
We have also been identified as a potentially responsible party ("PRP") for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites.
For all such sites, there are other PRPs and, in most instances, our involvement is minimal.
In estimating our liability, we have assumed that we will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable.
The ability of other PRPs to participate has been taken into account, based on our understanding of the parties’ financial condition and probable contributions on a per site basis.
Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.
We incurred $3.2 million, $23.3 million, and $4.4 million of expenses during the years ended December 31, 2017, 2016, and 2015, respectively, for environmental remediation at sites presently or formerly owned or leased by us.
As of December 31, 2017 and 2016, we have recorded reserves for environmental matters of $28.9 million and $30.6 million.
Of these amounts $8.9 million and $9.6 million, respectively, relate to remediation of sites previously disposed by us.
Given the evolving nature of environmental laws, regulations and technology, the ultimate cost of future compliance is uncertain.
PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements 20.
FAIR VALUE OF ASSETS AND LIABILITIES (continued)
## Table 1 ##
(1) Other represents the impact of consolidation or deconsolidation of funds and reclasses of certain assets between reporting categories.
(2) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.
(3) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.
(4) Separate account assets represent segregated funds that are invested for certain customers.
Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts.
Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statement of Financial Position.
Includes reclassifications to conform to current period presentation.
Transfers—Transfers into Level 3 for Fixed Maturities Available for Sale—Asset-Backed securities and Trading Account Assets Supporting Insurance Liabilities—Asset-Backed securities include $4,583 million and $188 million, respectively for the year ended December 31, 2009, resulting from the Company’s conclusion that the market for asset-backed securities collateralized by sub-prime mortgages was an inactive market, as discussed above.
Transfers into Level 3 for Fixed Maturities, Available for Sale—Commercial Mortgage-Backed securities for the year ended December 31, 2009 is primarily the result of over-riding the third party pricing information downward with internally developed valuations for certain securities held in the Japanese insurance operations portfolio.
Transfers into Level 3 for Commercial Mortgage and Other Loans for the year ended December 31, 2009 is primarily due to downward credit migration of these loans.
The downgrade in loans has resulted in the utilization of higher credit spreads, that are internally developed and not observable in the market place.
This increase in credit spreads is now considered a significant input in the fair value calculation for these loans.
Transfers out of Level 3 for Other Trading Account Assets—Asset Backed securities were primarily the result of the use of third party pricing for the securities purchased under TALF.
In the first quarter of 2009, these assets were valued internally using a model.
Other transfers out of Level 3 were typically due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate.
Other transfers into Level 3 were primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes (that could not be validated) when previously, information from third party pricing services (that could be validated) was utilized.
PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements The international business primarily uses reinsurance to obtain experience with respect to certain new product offerings and to a lesser extent, to manage risk and volatility as necessary.
Reinsurance ceded arrangements do not discharge the Company as the primary insurer.
Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements.
Reinsurance premiums, commissions, expense reimbursements, benefits and reserves related to reinsured long-duration contracts under coinsurance arrangements are accounted for over the life of the underlying reinsured contracts using assumptions consistent with those used to account for the underlying contracts.
Coinsurance arrangements contrast with the Company’s yearly renewable term arrangements, where only mortality risk is transferred to the reinsurer and premiums are paid to the reinsurer to reinsure that risk.
The mortality risk that is reinsured under yearly renewable term arrangements represents the difference between the stated death benefits in the underlying reinsured contracts and the corresponding reserves or account value carried by the Company on those same contracts.
The premiums paid to the reinsurer are based upon negotiated amounts, not on the actual premiums paid by the underlying contract holders to the Company.
As yearly renewable term arrangements are usually entered into by the Company with the expectation that the contracts will be inforce for the lives of the underlying policies, they are considered to be long-duration reinsurance contracts.
The cost of reinsurance related to short-duration reinsurance contracts is accounted for over the reinsurance contract period.
The tables presented below exclude amounts pertaining to the Company’s discontinued operations.
Reinsurance amounts included in the Consolidated Statements of Operations for premiums, policy charges and fees and policyholders’ benefits for the years ended December 31, were as follows:
## Table 2 ##
Reinsurance recoverables at December 31, are as follows:

Tables referenced above, in order (Table 0 first):
<table><tr><td></td><td>First Quarter</td><td>Second Quarter</td><td>Third Quarter</td><td>Fourth Quarter</td></tr><tr><td>2017</td><td>23%</td><td>26%</td><td>25%</td><td>26%</td></tr><tr><td>2016</td><td>22%</td><td>26%</td><td>26%</td><td>26%</td></tr><tr><td>2015</td><td>22%</td><td>25%</td><td>26%</td><td>27%</td></tr></table>
<table><tr><td></td><td colspan="5">Year Ended December 31, 2009</td></tr><tr><td></td><td> Other Assets</td><td>Separate Account Assets -4</td><td>Future Policy Benefits</td><td>Long-term Debt</td><td>Other Liabilities</td></tr><tr><td></td><td colspan="5">(in millions)</td></tr><tr><td>Fair Value, beginning of period</td><td>$26</td><td>$19,780</td><td>$-3,229</td><td>$-324</td><td>$-139</td></tr><tr><td>Total gains or (losses) (realized/unrealized):</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Included in earnings:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Realized investment gains (losses), net</td><td>0</td><td>0</td><td>3,313</td><td>0</td><td>77</td></tr><tr><td>Asset management fees and other income</td><td>0</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Interest credited to policyholders’ account balances</td><td>0</td><td>-7,368</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Included in other comprehensive income (loss)</td><td>0</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Net investment income</td><td>0</td><td>0</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Purchases, sales, issuances and settlements</td><td>1</td><td>479</td><td>-139</td><td>-429</td><td>56</td></tr><tr><td>Other-1</td><td>0</td><td>0</td><td>0</td><td>324</td><td>0</td></tr><tr><td>Transfers into Level 3-2</td><td>0</td><td>559</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Transfers out of Level 3-2</td><td>0</td><td>-398</td><td>0</td><td>0</td><td>0</td></tr><tr><td>Fair Value, end of period</td><td>$27</td><td>$13,052</td><td>$-55</td><td>$-429</td><td>$-6</td></tr><tr><td>Unrealized gains (losses) for the period relating to those Level 3 assets and liabilities that were still held at the end of theperiod(3):</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Included in earnings:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Realized investment gains (losses), net</td><td>$0</td><td>$0</td><td>$3,208</td><td>$0</td><td>$77</td></tr><tr><td>Asset management fees and other income</td><td>$0</td><td>$0</td><td>$0</td><td>$0</td><td>$0</td></tr><tr><td>Interest credited to policyholders’ account balances</td><td>$0</td><td>$-7,582</td><td>$0</td><td>$0</td><td>$0</td></tr><tr><td>Included in other comprehensive income (loss)</td><td>$0</td><td>$0</td><td>$0</td><td>$0</td><td>$0</td></tr></table>
<table><tr><td></td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td></td><td colspan="3">(in millions)</td></tr><tr><td>Direct premiums</td><td>$27,996</td><td>$29,666</td><td>$27,444</td></tr><tr><td>Reinsurance assumed</td><td>2,147</td><td>1,134</td><td>272</td></tr><tr><td>Reinsurance ceded</td><td>-1,622</td><td>-1,507</td><td>-1,479</td></tr><tr><td>Premiums</td><td>$28,521</td><td>$29,293</td><td>$26,237</td></tr><tr><td>Direct policy charges and fees</td><td>$5,127</td><td>$5,026</td><td>$4,648</td></tr><tr><td>Reinsurance assumed</td><td>1,179</td><td>1,425</td><td>918</td></tr><tr><td>Reinsurance ceded</td><td>-334</td><td>-272</td><td>-151</td></tr><tr><td>Policy charges and fees</td><td>$5,972</td><td>$6,179</td><td>$5,415</td></tr><tr><td>Direct policyholder benefits</td><td>$29,242</td><td>$31,012</td><td>$27,458</td></tr><tr><td>Reinsurance assumed</td><td>3,107</td><td>2,732</td><td>809</td></tr><tr><td>Reinsurance ceded</td><td>-1,722</td><td>-2,157</td><td>-1,534</td></tr><tr><td>Policyholders’ benefits</td><td>$30,627</td><td>$31,587</td><td>$26,733</td></tr></table>

Question: considering the years 2016-2017 , what is the increase observed in the research and development expenditures?
Answer: 0.02114
Reasoning program: divide(48.3,47.3), subtract(#0,const_1)