13.
RENTALS AND LEASES The Company leases sales and administrative office facilities, distribution centers, research and manufacturing facilities, as well as vehicles and other equipment under operating leases.
Total rental expense under the Company’s operating leases was $239 million in 2017 and $221 million in both 2016 and 2015.
As of December 31, 2017, identifiable future minimum payments with non-cancelable terms in excess of one year were:
## Table 0 ##
The Company enters into operating leases for vehicles whose non-cancelable terms are one year or less in duration with month-to-month renewal options.
These leases have been excluded from the table above.
The Company estimates payments under such leases will approximate $62 million in 2018.
These vehicle leases have guaranteed residual values that have historically been satisfied by the proceeds on the sale of the vehicles.14.
RESEARCH AND DEVELOPMENT EXPENDITURES Research expenditures that relate to the development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred.
Such costs were $201 million in 2017, $189 million in 2016 and $191 million in 2015.
The Company did not participate in any material customer sponsored research during 2017, 2016 or 2015.15.
COMMITMENTS AND CONTINGENCIES The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters and lawsuits.
The Company is also subject to various claims and contingencies related to income taxes, which are discussed in Note 12.
The Company also has contractual obligations including lease commitments, which are discussed in Note 13.
The Company records liabilities where a contingent loss is probable and can be reasonably estimated.
If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount.
The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred.
Insurance Globally, the Company has insurance policies with varying deductibility levels for property and casualty losses.
The Company is insured for losses in excess of these deductibles, subject to policy terms and conditions and has recorded both a liability and an offsetting receivable for amounts in excess of these deductibles.
The Company is self-insured for health care claims for eligible participating employees, subject to certain deductibles and limitations.
The Company determines its liabilities for claims on an actuarial basis.
Litigation and Environmental Matters The Company and certain subsidiaries are party to various lawsuits, claims and environmental actions that have arisen in the ordinary course of business.
These include from time to time antitrust, commercial, patent infringement, product liability and wage hour lawsuits, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other operating or closed facilities.
The Company has established accruals for certain lawsuits, claims and environmental matters.
The Company currently believes that there is not a reasonably possible risk of material loss in excess of the amounts accrued related to these legal matters.
Because litigation is inherently uncertain, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of recorded liabilities.
A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded.
The Company currently believes that such future charges related to suits and legal claims, if any, would not have a material adverse effect on the Company’s consolidated financial position.
Environmental Matters The Company is currently participating in environmental assessments and remediation at approximately 45 locations, the majority of which are in the U. S. , and environmental liabilities have been accrued reflecting management’s best estimate of future costs.
Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities.
In 2005, average earning assets increased $487 million, or 12%, including increases of $250 million, or 8%, in average residential mortgage loans and $228 million, or 25%, in average home equity loans.
Average consumer deposits increased $90 million, or 1%, compared to 2004.
Treasury encompasses the securities portfolio, short-term investments, wholesale funding activities, such as borrowings and the funding center.
The income or loss for the funding center, which includes the impact of derivative financial instruments used for risk management purposes, represents the interest rate risk component of People’s net interest income as calculated by People’s funds transfer pricing model (“FTP”), to derive each operating segment’s net interest income.
Under this process, a money desk (the funding center) buys funds from liability-generating business lines (such as consumer deposits) and sells funds to asset-generating business lines (such as commercial lending).
The price at which funds are bought and sold on any given day is set by People’s treasury group and is based on the wholesale cost to People’s of assets and liabilities with similar maturities.
Liability-generating businesses sell newly originated liabilities to the money desk and recognize a funding credit, while asset-generating businesses buy funding for newly originated assets from the money desk and recognize a funding charge.
Once funding for an asset is purchased from or a liability is sold to the money desk, the price that is set by the treasury group will remain with that asset or liability until it matures or reprices, which effectively transfers responsibility for managing interest rate risk to the treasury group.
## Table 1 ##
Treasury’s loss from continuing operations in 2006 compared to 2005 reflects $27.4 million of net security losses, partially offset by a $16.8 million improvement in net interest income and the income from People’s investment in bank-owned life insurance (“BOLI”) of $9.1 million ($13.7 million on a taxable-equivalent basis).
The improvement in net interest income reflects the funding center’s net spread loss declining by $31.8 million, partially offset by a $15.0 million decline in treasury’s net spread income.
The reduction in treasury’s net spread income reflects a $934 million decline in average securities and an increase in the FTP charge for funding the BOLI investment (with no offsetting interest income as BOLI income is recorded in non-interest income).
The improvement in the funding center’s net spread loss reflects the rising interest rate environment and the asset sensitive position of People’s balance sheet.
Average earning assets decreased $887 million, or 50%, reflecting a $934 million, or 54%, decline in average securities from 2005 given People’s sale of its debt securities portfolio during 2006 as part of restructuring activities to better position People’s balance sheet for the prevailing interest rate environment.
The debt securities portfolio totaled $27 million at December 31, 2006, compared to $1.3 billion at December 31, 2005, reflecting the sale of approximately $1.1 billion of securities and the substitution of securities with higheryielding loans.
Average securities comprised 8% of average earning assets in 2006, compared to 17% in 2005.
Average Balance, Interest and Yield/Rate Analysis
## Table 2 ##
The income or loss for the funding center represents the IRR component of People’s United’s net interest income as calculated by its FTP model in deriving each operating segment’s net interest income.
Under this process, the funding center buys funds from liability-generating business lines, such as retail deposits, and sells funds to asset-generating business lines, such as commercial lending.
The price at which funds are bought and sold on any given day is set by People’s United’s Treasury group and is based on the wholesale cost to People’s United of assets and liabilities with similar maturities.
Liability-generating businesses sell newly-originated liabilities to the funding center and recognize a funding credit, while asset-generating businesses buy funding for newly-originated assets from the funding center and recognize a funding charge.
Once funding for an asset is purchased from or a liability is sold to the funding center, the price that is set by the Treasury group will remain with that asset or liability until it matures or reprices, which effectively transfers responsibility for managing IRR to the Treasury group.

Tables referenced above, in order (Table 0 first):
<table><tr><td>2018</td><td>$ 131</td></tr><tr><td>2019</td><td>115</td></tr><tr><td>2020</td><td>96</td></tr><tr><td>2021</td><td>86</td></tr><tr><td>2022</td><td>74</td></tr><tr><td>Thereafter</td><td>115</td></tr><tr><td>Total</td><td>$ 617</td></tr></table>
<table><tr><td> Years ended December 31 (in millions)</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Net interest income (loss)</td><td>$-26.2</td><td>$-43.0</td><td>$-88.4</td></tr><tr><td>Non-interest income:</td><td></td><td></td><td></td></tr><tr><td>Fee-based revenues</td><td>—</td><td>0.5</td><td>—</td></tr><tr><td>Net security losses</td><td>-27.4</td><td>—</td><td>-4.5</td></tr><tr><td>Bank-owned life insurance</td><td>9.1</td><td>3.3</td><td>—</td></tr><tr><td>Other non-interest income</td><td>0.1</td><td>0.3</td><td>0.1</td></tr><tr><td>Total non-interest income</td><td>-18.2</td><td>4.1</td><td>-4.4</td></tr><tr><td>Non-interest expense</td><td>0.5</td><td>1.4</td><td>0.2</td></tr><tr><td>Loss before income tax expense</td><td>-44.9</td><td>-40.3</td><td>-93.0</td></tr><tr><td>Income tax benefit</td><td>-18.9</td><td>-15.3</td><td>-32.5</td></tr><tr><td>Loss from continuing operations</td><td>$-26.0</td><td>$-25.0</td><td>$-60.5</td></tr><tr><td>Average earning assets</td><td>$878.5</td><td>$1,765.9</td><td>$2,403.8</td></tr><tr><td>Average liabilities</td><td>234.1</td><td>282.5</td><td>480.8</td></tr><tr><td>Year end assets</td><td>469.0</td><td>1,553.2</td><td>2,086.8</td></tr></table>
<table><tr><td></td><td colspan="3">2006</td><td colspan="3">2005</td><td colspan="3"> 2004</td></tr><tr><td> Years ended December 31 (dollars in millions)</td><td> Average Balance</td><td> Interest</td><td>Yield/ Rate</td><td> Average Balance</td><td> Interest</td><td>Yield/ Rate</td><td>Average Balance</td><td>Interest</td><td> Yield/ Rate</td></tr><tr><td>Earning assets:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Short-term investments</td><td>$106.6</td><td>$5.3</td><td>4.97%</td><td>$54.5</td><td>$1.5</td><td>2.86%</td><td>$198.0</td><td>$2.3</td><td>1.19%</td></tr><tr><td>Securities purchased under agreements to resell</td><td>16.6</td><td>0.8</td><td>4.98</td><td>22.8</td><td>1.0</td><td>4.22</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Securities -1</td><td>803.8</td><td>30.0</td><td>3.74</td><td>1,737.8</td><td>60.3</td><td>3.47</td><td>2,248.0</td><td>72.5</td><td>3.23</td></tr><tr><td>Loans:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage</td><td>3,758.8</td><td>185.2</td><td>4.93</td><td>3,413.3</td><td>154.7</td><td>4.53</td><td>3,163.4</td><td>137.7</td><td>4.35</td></tr><tr><td>Commercial</td><td>2,135.7</td><td>146.5</td><td>6.86</td><td>1,825.5</td><td>108.7</td><td>5.95</td><td>1,437.6</td><td>73.3</td><td>5.10</td></tr><tr><td>Commercial real estate finance</td><td>1,765.1</td><td>126.0</td><td>7.14</td><td>1,790.5</td><td>116.2</td><td>6.49</td><td>1,760.7</td><td>105.0</td><td>5.96</td></tr><tr><td>Consumer</td><td>1,288.3</td><td>88.3</td><td>6.85</td><td>1,203.3</td><td>65.8</td><td>5.47</td><td>1,035.0</td><td>46.7</td><td>4.51</td></tr><tr><td>Total loans</td><td>8,947.9</td><td>546.0</td><td>6.10</td><td>8,232.6</td><td>445.4</td><td>5.41</td><td>7,396.7</td><td>362.7</td><td>4.90</td></tr><tr><td>Total earning assets</td><td>$9,874.9</td><td>$582.1</td><td>5.90%</td><td>$10,047.7</td><td>$508.2</td><td>5.06%</td><td>$9,842.7</td><td>$437.5</td><td>4.45%</td></tr><tr><td>Funding liabilities:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deposits:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Non-interest-bearing deposits</td><td>$2,090.7</td><td>$—</td><td>—%</td><td>$2,142.0</td><td>$—</td><td>—%</td><td>$2,043.7</td><td>$—</td><td>—%</td></tr><tr><td>Savings, interest-bearing checking and money market</td><td>3,464.3</td><td>49.2</td><td>1.42</td><td>4,023.4</td><td>42.6</td><td>1.06</td><td>4,274.7</td><td>34.4</td><td>0.81</td></tr><tr><td>Time</td><td>3,308.7</td><td>128.8</td><td>3.89</td><td>2,648.8</td><td>72.6</td><td>2.74</td><td>2,271.5</td><td>50.9</td><td>2.24</td></tr><tr><td>Total core deposits</td><td>8,863.7</td><td>178.0</td><td>2.01</td><td>8,814.2</td><td>115.2</td><td>1.31</td><td>8,589.9</td><td>85.3</td><td>0.99</td></tr><tr><td>Non-core deposits</td><td>118.4</td><td>2.1</td><td>1.85</td><td>167.2</td><td>2.3</td><td>1.40</td><td>198.5</td><td>1.4</td><td>0.69</td></tr><tr><td>Total deposits</td><td>8,982.1</td><td>180.1</td><td>2.01</td><td>8,981.4</td><td>117.5</td><td>1.31</td><td>8,788.4</td><td>86.7</td><td>0.99</td></tr><tr><td>Borrowings:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Federal funds purchased</td><td>158.2</td><td>7.6</td><td>4.78</td><td>250.5</td><td>7.9</td><td>3.19</td><td>249.6</td><td>3.2</td><td>1.25</td></tr><tr><td>FHLB advances</td><td>47.2</td><td>2.4</td><td>5.15</td><td>50.3</td><td>1.4</td><td>2.73</td><td>176.1</td><td>9.4</td><td>5.32</td></tr><tr><td>Repurchase agreements</td><td>—</td><td>—</td><td>—</td><td>1.7</td><td>0.1</td><td>2.41</td><td>36.1</td><td>1.0</td><td>2.91</td></tr><tr><td>Total borrowings</td><td>205.4</td><td>10.0</td><td>4.87</td><td>302.5</td><td>9.4</td><td>3.11</td><td>461.8</td><td>13.6</td><td>2.94</td></tr><tr><td>Subordinated notes</td><td>105.0</td><td>9.6</td><td>9.10</td><td>121.2</td><td>11.3</td><td>9.29</td><td>146.5</td><td>13.4</td><td>9.16</td></tr><tr><td>Total</td><td>9,292.5</td><td></td><td></td><td>9,405.1</td><td></td><td></td><td>9,396.7</td><td></td><td></td></tr><tr><td>Funding liabilities allocated to discontinued operations -2</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-203.6</td><td>-3.6</td><td>1.77</td></tr><tr><td>Total funding liabilities</td><td>$9,292.5</td><td>$199.7</td><td>2.15%</td><td>$9,405.1</td><td>$138.2</td><td>1.47%</td><td>$9,193.1</td><td>$110.1</td><td>1.20%</td></tr><tr><td>Excess of earning assets over funding liabilities</td><td>$582.4</td><td></td><td></td><td>$642.6</td><td></td><td></td><td>$649.6</td><td></td><td></td></tr><tr><td>Net interest income/spread</td><td></td><td>$382.4</td><td>3.75%</td><td></td><td>$370.0</td><td>3.59%</td><td></td><td>$327.4</td><td>3.25%</td></tr><tr><td>Net interest margin</td><td></td><td></td><td>3.87%</td><td></td><td></td><td>3.68%</td><td></td><td></td><td>3.33%</td></tr></table>

Question: what is the percentage change in the r&d expenses from 2016 to 2017?
Answer: 0.06349
Reasoning program: subtract(201,189), divide(#0,189)