note 9 2014goodwill and other intangibles , net goodwill the following table outlines the activity in the carrying value of the company 2019s goodwill , which is all assigned to the company 2019s trading and investing segment ( dollars in thousands ) : .

                            | trading & investing
--------------------------- | -------------------
balance at december 31 2011 | $ 1934232
activity                    | 2014
balance at december 31 2012 | 1934232
impairment of goodwill      | -142423 ( 142423 )
balance at december 31 2013 | $ 1791809

goodwill is evaluated for impairment on an annual basis and when events or changes indicate the carrying value of an asset exceeds its fair value and the loss may not be recoverable .
at december 31 , 2013 and 2012 , the company 2019s trading and investing segment had two reporting units ; market making and retail brokerage .
at the end of june 2013 , the company decided to exit its market making business .
based on this decision in the second quarter of 2013 , the company conducted an interim goodwill impairment test for the market making reporting unit , using the expected sale structure of the market making business .
this structure assumed a shorter period of cash flows related to an order flow arrangement , compared to prior estimates of fair value .
based on the results of the first step of the goodwill impairment test , the company determined that the carrying value of the market making reporting unit , including goodwill , exceeded the fair value for that reporting unit as of june 30 , 2013 .
the company proceeded to the second step of the goodwill impairment test to measure the amount of goodwill impairment .
as a result of the evaluation , it was determined that the entire carrying amount of goodwill allocated to the market making reporting unit was impaired , and the company recognized a $ 142.4 million impairment of goodwill during the second quarter of 2013 .
for the year ended december 31 , 2013 , the company performed its annual goodwill assessment for the retail brokerage reporting unit , electing to qualitatively assess whether it was more likely than not that the fair value was less than the carrying value .
as a result of this assessment , the company determined that the first step of the goodwill impairment test was not necessary , and concluded that goodwill was not impaired at december 31 , 2013 .
at december 31 , 2013 , goodwill is net of accumulated impairment losses of $ 142.4 million related to the trading and investing segment and $ 101.2 million in the balance sheet management segment .
at december 31 , 2012 , goodwill is net of accumulated impairment losses of $ 101.2 million in the balance sheet management segment.


maturities of debt the scheduled maturities of the outstanding debt balances , excluding debt fair value adjustments as of december 31 , 2014 , are summarized as follows ( in millions ) : .

year       | total
---------- | -------
2015       | $ 2717
2016       | 1684
2017       | 3059
2018       | 2328
2019       | 2819
thereafter | 28422
total      | $ 41029

_______ interest rates , interest rate swaps and contingent debt the weighted average interest rate on all of our borrowings was 5.02% ( 5.02 % ) during 2014 and 5.08% ( 5.08 % ) during 2013 .
information on our interest rate swaps is contained in note 13 .
for information about our contingent debt agreements , see note 12 .
subsequent event subsequent to december 31 , 2014 , additional ep trust i preferred securities were converted , primarily consisting of 969117 ep trust i preferred securities converted on january 14 , 2015 , into ( i ) 697473 of our class p common stock ; ( ii ) approximately $ 24 million in cash ; and ( iii ) 1066028 in warrants .
9 .
share-based compensation and employee benefits share-based compensation kinder morgan , inc .
class p shares stock compensation plan for non-employee directors we have a stock compensation plan for non-employee directors , in which our eligible non-employee directors participate .
the plan recognizes that the compensation paid to each eligible non-employee director is fixed by our board , generally annually , and that the compensation is payable in cash .
pursuant to the plan , in lieu of receiving some or all of the cash compensation , each eligible non-employee director may elect to receive shares of class p common stock .
each election will be generally at or around the first board meeting in january of each calendar year and will be effective for the entire calendar year .
an eligible director may make a new election each calendar year .
the total number of shares of class p common stock authorized under the plan is 250000 .
during 2014 , 2013 and 2012 , we made restricted class p common stock grants to our non-employee directors of 6210 , 5710 and 5520 , respectively .
these grants were valued at time of issuance at $ 220000 , $ 210000 and $ 185000 , respectively .
all of the restricted stock grants made to non-employee directors vest during a six-month period .
table of contents


equity compensation plan information the following table presents the equity securities available for issuance under our equity compensation plans as of december 31 , 2014 .
equity compensation plan information plan category number of securities to be issued upon exercise of outstanding options , warrants and rights ( 1 ) weighted-average exercise price of outstanding options , warrants and rights ( 2 ) number of securities remaining available for future issuance under equity compensation plans ( excluding securities reflected in column ( a ) ) ( a ) ( b ) ( c ) equity compensation plans approved by security holders 1955024 $ 36.06 4078093 equity compensation plans not approved by security holders ( 3 ) 2014 2014 2014 .

plan category                                                    | number of securities to be issued upon exercise of outstanding options warrants and rights ( 1 ) ( a ) ( b ) | weighted-average exercise price of outstanding optionswarrants and rights ( 2 ) | number of securities remaining available for future issuance under equity compensation plans ( excluding securitiesreflected in column ( a ) ) ( c )
---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
equity compensation plans approved by security holders           | 1955024                                                                                | $ 36.06                                                                         | 4078093
equity compensation plans not approved by security holders ( 3 ) | 2014                                                                                | 2014                                                                            | 2014
total                                                            | 1955024                                                                                | $ 36.06                                                                         | 4078093

( 1 ) includes grants made under the huntington ingalls industries , inc .
2012 long-term incentive stock plan ( the "2012 plan" ) , which was approved by our stockholders on may 2 , 2012 , and the huntington ingalls industries , inc .
2011 long-term incentive stock plan ( the "2011 plan" ) , which was approved by the sole stockholder of hii prior to its spin-off from northrop grumman corporation .
of these shares , 644321 were subject to stock options , 539742 were subject to outstanding restricted performance stock rights , and 63022 were stock rights granted under the 2011 plan .
in addition , this number includes 33571 stock rights , 11046 restricted stock rights and 663322 restricted performance stock rights granted under the 2012 plan , assuming target performance achievement .
( 2 ) this is the weighted average exercise price of the 644321 outstanding stock options only .
( 3 ) there are no awards made under plans not approved by security holders .
item 13 .
certain relationships and related transactions , and director independence information as to certain relationships and related transactions and director independence will be incorporated herein by reference to the proxy statement for our 2015 annual meeting of stockholders to be filed within 120 days after the end of the company 2019s fiscal year .
item 14 .
principal accountant fees and services information as to principal accountant fees and services will be incorporated herein by reference to the proxy statement for our 2015 annual meeting of stockholders to be filed within 120 days after the end of the company 2019s fiscal year .
this proof is printed at 96% ( 96 % ) of original size this line represents final trim and will not print


management 2019s discussion and analysis jpmorgan chase & co./2009 annual report 130 the following histogram illustrates the daily market risk 2013related gains and losses for ib and consumer/cio positions for 2009 .
the chart shows that the firm posted market risk 2013related gains on 227 out of 261 days in this period , with 69 days exceeding $ 160 million .
the inset graph looks at those days on which the firm experienced losses and depicts the amount by which the 95% ( 95 % ) confidence level var exceeded the actual loss on each of those days .
losses were sustained on 34 days during 2009 and exceeded the var measure on one day due to high market volatility in the first quarter of 2009 .
under the 95% ( 95 % ) confidence interval , the firm would expect to incur daily losses greater than that pre- dicted by var estimates about twelve times a year .
the following table provides information about the gross sensitivity of dva to a one-basis-point increase in jpmorgan chase 2019s credit spreads .
this sensitivity represents the impact from a one-basis-point parallel shift in jpmorgan chase 2019s entire credit curve .
as credit curves do not typically move in a parallel fashion , the sensitivity multiplied by the change in spreads at a single maturity point may not be representative of the actual revenue recognized .
debit valuation adjustment sensitivity 1 basis point increase in ( in millions ) jpmorgan chase credit spread .

( in millions )  | 1 basis point increase in jpmorgan chase credit spread
---------------- | ------------------------------------------------------
december 31 2009 | $ 39
december 31 2008 | $ 37

loss advisories and drawdowns loss advisories and drawdowns are tools used to highlight to senior management trading losses above certain levels and initiate discus- sion of remedies .
economic value stress testing while var reflects the risk of loss due to adverse changes in normal markets , stress testing captures the firm 2019s exposure to unlikely but plausible events in abnormal markets .
the firm conducts economic- value stress tests using multiple scenarios that assume credit spreads widen significantly , equity prices decline and significant changes in interest rates across the major currencies .
other scenar- ios focus on the risks predominant in individual business segments and include scenarios that focus on the potential for adverse movements in complex portfolios .
scenarios were updated more frequently in 2009 and , in some cases , redefined to reflect the signifi- cant market volatility which began in late 2008 .
along with var , stress testing is important in measuring and controlling risk .
stress testing enhances the understanding of the firm 2019s risk profile and loss potential , and stress losses are monitored against limits .
stress testing is also utilized in one-off approvals and cross-business risk measurement , as well as an input to economic capital allocation .
stress-test results , trends and explanations based on current market risk positions are reported to the firm 2019s senior management and to the lines of business to help them better measure and manage risks and to understand event risk 2013sensitive positions.


j.p .
morgan chase & co .
/ 2003 annual report 49 off 2013balance sheet arrangements and contractual cash obligations special-purpose entities special-purpose entities ( 201cspes 201d ) , special-purpose vehicles ( 201cspvs 201d ) , or variable-interest entities ( 201cvies 201d ) , are an important part of the financial markets , providing market liquidity by facili- tating investors 2019 access to specific portfolios of assets and risks .
spes are not operating entities ; typically they are established for a single , discrete purpose , have a limited life and have no employees .
the basic spe structure involves a company selling assets to the spe .
the spe funds the asset purchase by selling securities to investors .
to insulate investors from creditors of other entities , including the seller of the assets , spes are often structured to be bankruptcy-remote .
spes are critical to the functioning of many investor markets , including , for example , the market for mortgage-backed securities , other asset-backed securities and commercial paper .
jpmorgan chase is involved with spes in three broad categories of transactions : loan securi- tizations ( through 201cqualifying 201d spes ) , multi-seller conduits , and client intermediation .
capital is held , as appropriate , against all spe-related transactions and related exposures such as deriva- tive transactions and lending-related commitments .
the firm has no commitments to issue its own stock to support any spe transaction , and its policies require that transactions with spes be conducted at arm 2019s length and reflect market pric- ing .
consistent with this policy , no jpmorgan chase employee is permitted to invest in spes with which the firm is involved where such investment would violate the firm 2019s worldwide rules of conduct .
these rules prohibit employees from self- dealing and prohibit employees from acting on behalf of the firm in transactions with which they or their family have any significant financial interest .
for certain liquidity commitments to spes , the firm could be required to provide funding if the credit rating of jpmorgan chase bank were downgraded below specific levels , primarily p-1 , a-1 and f1 for moody 2019s , standard & poor 2019s and fitch , respectively .
the amount of these liquidity commitments was $ 34.0 billion at december 31 , 2003 .
if jpmorgan chase bank were required to provide funding under these commitments , the firm could be replaced as liquidity provider .
additionally , with respect to the multi-seller conduits and structured commercial loan vehicles for which jpmorgan chase bank has extended liq- uidity commitments , the bank could facilitate the sale or refi- nancing of the assets in the spe in order to provide liquidity .
of these liquidity commitments to spes , $ 27.7 billion is included in the firm 2019s total other unfunded commitments to extend credit included in the table on the following page .
as a result of the consolidation of multi-seller conduits in accordance with fin 46 , $ 6.3 billion of these commitments are excluded from the table , as the underlying assets of the spe have been included on the firm 2019s consolidated balance sheet .
the following table summarizes certain revenue information related to vies with which the firm has significant involvement , and qualifying spes: .

year ended december 31 2003 ( in millions ) | year ended december 31 2003 vies | year ended december 31 2003 ( a ) | year ended december 31 2003 spes | total
------------------------------------------- | -------------------------------- | --------------------------------- | -------------------------------- | ------
revenue                                     | $ 79                             |                                   | $ 979                            | $ 1058

( a ) includes consolidated and nonconsolidated asset-backed commercial paper conduits for a consistent presentation of 2003 results .
the revenue reported in the table above represents primarily servicing fee income .
the firm also has exposure to certain vie vehicles arising from derivative transactions with vies ; these transactions are recorded at fair value on the firm 2019s consolidated balance sheet with changes in fair value ( i.e. , mark-to-market gains and losses ) recorded in trading revenue .
such mtm gains and losses are not included in the revenue amounts reported in the table above .
for a further discussion of spes and the firm 2019s accounting for spes , see note 1 on pages 86 201387 , note 13 on pages 100 2013103 , and note 14 on pages 103 2013106 of this annual report .
contractual cash obligations in the normal course of business , the firm enters into various con- tractual obligations that may require future cash payments .
contractual obligations at december 31 , 2003 , include long-term debt , trust preferred capital securities , operating leases , contractual purchases and capital expenditures and certain other liabilities .
for a further discussion regarding long-term debt and trust preferred capital securities , see note 18 on pages 109 2013111 of this annual report .
for a further discussion regarding operating leases , see note 27 on page 115 of this annual report .
the accompanying table summarizes jpmorgan chase 2019s off 2013 balance sheet lending-related financial instruments and signifi- cant contractual cash obligations , by remaining maturity , at december 31 , 2003 .
contractual purchases include commit- ments for future cash expenditures , primarily for services and contracts involving certain forward purchases of securities and commodities .
capital expenditures primarily represent future cash payments for real estate 2013related obligations and equip- ment .
contractual purchases and capital expenditures at december 31 , 2003 , reflect the minimum contractual obligation under legally enforceable contracts with contract terms that are both fixed and determinable .
excluded from the following table are a number of obligations to be settled in cash , primarily in under one year .
these obligations are reflected on the firm 2019s consolidated balance sheet and include deposits ; federal funds purchased and securities sold under repurchase agreements ; other borrowed funds ; purchases of debt and equity instruments that settle within standard market timeframes ( e.g .
regular-way ) ; derivative payables that do not require physical delivery of the underlying instrument ; and certain purchases of instruments that resulted in settlement failures.


american tower corporation and subsidiaries notes to consolidated financial statements 2014 ( continued ) the 7.50% ( 7.50 % ) notes mature on may 1 , 2012 and interest is payable semi-annually in arrears on may 1 and november 1 each year beginning may 1 , 2004 .
the company may redeem the 7.50% ( 7.50 % ) notes after may 1 , 2008 .
the initial redemption price on the 7.50% ( 7.50 % ) notes is 103.750% ( 103.750 % ) of the principal amount , subject to a ratable decline after may 1 of the following year to 100% ( 100 % ) of the principal amount in 2010 and thereafter .
the company may also redeem up to 35% ( 35 % ) of the 7.50% ( 7.50 % ) notes any time prior to february 1 , 2007 ( at a price equal to 107.50% ( 107.50 % ) of the principal amount of the notes plus accrued and unpaid interest , if any ) , with the net cash proceeds of certain public equity offerings within sixty days after the closing of any such offering .
the 7.50% ( 7.50 % ) notes rank equally with the 5.0% ( 5.0 % ) convertible notes and its 93 20448% ( 20448 % ) notes and are structurally and effectively junior to indebtedness outstanding under the credit facilities , the ati 12.25% ( 12.25 % ) notes and the ati 7.25% ( 7.25 % ) notes .
the indenture for the 7.50% ( 7.50 % ) notes contains certain covenants that restrict the company 2019s ability to incur more debt ; guarantee indebtedness ; issue preferred stock ; pay dividends ; make certain investments ; merge , consolidate or sell assets ; enter into transactions with affiliates ; and enter into sale leaseback transactions .
6.25% ( 6.25 % ) notes redemption 2014in february 2004 , the company completed the redemption of all of its outstanding $ 212.7 million principal amount of 6.25% ( 6.25 % ) notes .
the 6.25% ( 6.25 % ) notes were redeemed pursuant to the terms of the indenture at 102.083% ( 102.083 % ) of the principal amount plus unpaid and accrued interest .
the total aggregate redemption price was $ 221.9 million , including $ 4.8 million in accrued interest .
the company will record a charge of $ 7.1 million in the first quarter of 2004 from the loss on redemption and write-off of deferred financing fees .
other debt repurchases 2014from january 1 , 2004 to march 11 , 2004 , the company repurchased $ 36.2 million principal amount of its 5.0% ( 5.0 % ) notes for approximately $ 36.1 million in cash and made a $ 21.0 million voluntary prepayment of term loan a under its credit facilities .
giving effect to the issuance of the 7.50% ( 7.50 % ) notes and the use of the net proceeds to redeem all of the outstanding 6.25% ( 6.25 % ) notes ; repurchases of $ 36.2 million principal amount of the 5.0% ( 5.0 % ) notes ; and a voluntary prepayment of $ 21.0 million of the term a loan under the credit facilities ; the company 2019s aggregate principal payments of long- term debt , including capital leases , for the next five years and thereafter are as follows ( in thousands ) : year ending december 31 .

2004                                                                          | $ 73684
----------------------------------------------------------------------------- | ------------------
2005                                                                          | 109435
2006                                                                          | 145107
2007                                                                          | 688077
2008                                                                          | 808043
thereafter                                                                    | 1875760
total cash obligations                                                        | 3700106
accreted value of original issue discount of the ati 12.25% ( 12.25 % ) notes | -339601 ( 339601 )
accreted value of the related warrants                                        | -44247 ( 44247 )
total                                                                         | $ 3316258

atc mexico holding 2014in january 2004 , mr .
gearon exercised his previously disclosed right to require the company to purchase his 8.7% ( 8.7 % ) interest in atc mexico .
giving effect to the january 2004 exercise of options described below , the company owns an 88% ( 88 % ) interest in atc mexico , which is the subsidiary through which the company conducts its mexico operations .
the purchase price for mr .
gearon 2019s interest in atc mexico is subject to review by an independent financial advisor , and is payable in cash or shares of the company 2019s class a common stock , at the company 2019s option .
the company intends to pay the purchase price in shares of its class a common stock , and closing is expected to occur in the second quarter of 2004 .
in addition , the company expects that payment of a portion of the purchase price will be contingent upon atc mexico meeting certain performance objectives.


holders of grupo gondi manage the joint venture and we provide technical and commercial resources .
we believe the joint venture is helping us to grow our presence in the attractive mexican market .
we have included the financial results of the joint venture in our corrugated packaging segment since the date of formation .
we are accounting for the investment on the equity method .
on january 19 , 2016 , we completed the packaging acquisition .
the entities acquired provide value-added folding carton and litho-laminated display packaging solutions .
we believe the transaction has provided us with attractive and complementary customers , markets and facilities .
we have included the financial results of the acquired entities in our consumer packaging segment since the date of the acquisition .
on october 1 , 2015 , we completed the sp fiber acquisition .
the transaction included the acquisition of mills located in dublin , ga and newberg , or , which produce lightweight recycled containerboard and kraft and bag paper .
the newberg mill also produced newsprint .
as part of the transaction , we also acquired sp fiber's 48% ( 48 % ) interest in green power solutions of georgia , llc ( fffdgps fffd ) , which we consolidate .
gps is a joint venture providing steam to the dublin mill and electricity to georgia power .
subsequent to the transaction , we announced the permanent closure of the newberg mill due to the decline in market conditions of the newsprint business and our need to balance supply and demand in our containerboard system .
we have included the financial results of the acquired entities in our corrugated packaging segment since the date of the acquisition .
see fffdnote 2 .
mergers , acquisitions and investment fffdtt of the notes to consolidated financial statements for additional information .
see also item 1a .
fffdrisk factors fffd fffdwe may be unsuccessful in making and integrating mergers , acquisitions and investments and completing divestitures fffd .
business .

( in millions ) | year ended september 30 , 2018 | year ended september 30 , 2017 | year ended september 30 , 2016
--------------- | ------------------------------ | ------------------------------ | ------------------------------
net sales       | $ 16285.1                      | $ 14859.7                      | $ 14171.8
segment income  | $ 1685.0                       | $ 1193.5                       | $ 1226.2

in fiscal 2018 , we continued to pursue our strategy of offering differentiated paper and packaging solutions that help our customers win .
we successfully executed this strategy in fiscal 2018 in a rapidly changing cost and price environment .
net sales of $ 16285.1 million for fiscal 2018 increased $ 1425.4 million , or 9.6% ( 9.6 % ) , compared to fiscal 2017 .
the increase was primarily a result of an increase in corrugated packaging segment sales , driven by higher selling price/mix and the contributions from acquisitions , and increased consumer packaging segment sales , primarily due to the contribution from acquisitions ( primarily the mps acquisition ) .
these increases were partially offset by the absence of net sales from hh&b in fiscal 2018 due to the sale of hh&b in april 2017 and lower land and development segment sales compared to the prior year period due to the timing of real estate sales as we monetize the portfolio and lower merchandising display sales in the consumer packaging segment .
segment income increased $ 491.5 million in fiscal 2018 compared to fiscal 2017 , primarily due to increased corrugated packaging segment income .
with respect to segment income , we experienced higher levels of cost inflation during fiscal 2018 as compared to fiscal 2017 , which was partially offset by recycled fiber deflation .
the primary inflationary items were freight costs , chemical costs , virgin fiber costs and wage and other costs .
productivity improvements in fiscal 2018 more than offset the net impact of cost inflation .
while it is difficult to predict specific inflationary items , we expect higher cost inflation to continue through fiscal 2019 .
our corrugated packaging segment increased its net sales by $ 695.1 million in fiscal 2018 to $ 9103.4 million from $ 8408.3 million in fiscal 2017 .
the increase in net sales was primarily due to higher corrugated selling price/mix and higher corrugated volumes ( including acquisitions ) , which were partially offset by lower net sales from recycling operations due to lower recycled fiber costs , lower sales related to the deconsolidation of a foreign joint venture in fiscal 2017 and the impact of foreign currency .
north american box shipments increased 4.1% ( 4.1 % ) on a per day basis in fiscal 2018 compared to fiscal 2017 .
segment income attributable to the corrugated packaging segment in fiscal 2018 increased $ 454.0 million to $ 1207.9 million compared to $ 753.9 million in fiscal 2017 .
the increase was primarily due to higher selling price/mix , lower recycled fiber costs and productivity improvements which were partially offset by higher levels of cost inflation and other items , including increased depreciation and amortization .
our consumer packaging segment increased its net sales by $ 838.9 million in fiscal 2018 to $ 7291.4 million from $ 6452.5 million in fiscal 2017 .
the increase in net sales was primarily due to an increase in net sales from acquisitions ( primarily the mps acquisition ) and higher selling price/mix partially offset by the absence of net sales from hh&b in fiscal 2018 due to the hh&b sale in april 2017 and lower volumes .
segment income attributable to


notes to consolidated financial statements 2014 ( continued ) ( amounts in millions , except per share amounts ) withholding taxes on temporary differences resulting from earnings for certain foreign subsidiaries which are permanently reinvested outside the u.s .
it is not practicable to determine the amount of unrecognized deferred tax liability associated with these temporary differences .
pursuant to the provisions of fasb interpretation no .
48 , accounting for uncertainty in income taxes ( 201cfin 48 201d ) , the following table summarizes the activity related to our unrecognized tax benefits: .

                                                                     | 2008           | 2007
-------------------------------------------------------------------- | -------------- | ----------------
balance at beginning of period                                       | $ 134.8        | $ 266.9
increases as a result of tax positions taken during a prior year     | 22.8           | 7.9
decreases as a result of tax positions taken during a prior year     | -21.3 ( 21.3 ) | -156.3 ( 156.3 )
settlements with taxing authorities                                  | -4.5 ( 4.5 )   | -1.0 ( 1.0 )
lapse of statutes of limitation                                      | -1.7 ( 1.7 )   | -2.4 ( 2.4 )
increases as a result of tax positions taken during the current year | 18.7           | 19.7
balance at end of period                                             | $ 148.8        | $ 134.8

included in the total amount of unrecognized tax benefits of $ 148.8 as of december 31 , 2008 , is $ 131.8 of tax benefits that , if recognized , would impact the effective tax rate and $ 17.1 of tax benefits that , if recognized , would result in adjustments to other tax accounts , primarily deferred taxes .
the total amount of accrued interest and penalties as of december 31 , 2008 and 2007 is $ 33.5 and $ 33.6 , of which $ 0.7 and $ 9.2 is included in the 2008 and 2007 consolidated statement of operations , respectively .
in accordance with our accounting policy , interest and penalties accrued on unrecognized tax benefits are classified as income taxes in the consolidated statements of operations .
we have not elected to change this classification with the adoption of fin 48 .
with respect to all tax years open to examination by u.s .
federal and various state , local , and non-u.s .
tax authorities , we currently anticipate that the total unrecognized tax benefits will decrease by an amount between $ 45.0 and $ 55.0 in the next twelve months , a portion of which will affect the effective tax rate , primarily as a result of the settlement of tax examinations and the lapsing of statutes of limitation .
this net decrease is related to various items of income and expense , including transfer pricing adjustments and restatement adjustments .
for this purpose , we expect to complete our discussions with the irs appeals division regarding the years 1997 through 2004 within the next twelve months .
we also expect to effectively settle , within the next twelve months , various uncertainties for 2005 and 2006 .
in december 2007 , the irs commenced its examination for the 2005 and 2006 tax years .
in addition , we have various tax years under examination by tax authorities in various countries , such as the u.k. , and in various states , such as new york , in which we have significant business operations .
it is not yet known whether these examinations will , in the aggregate , result in our paying additional taxes .
we have established tax reserves that we believe to be adequate in relation to the potential for additional assessments in each of the jurisdictions in which we are subject to taxation .
we regularly assess the likelihood of additional tax assessments in those jurisdictions and adjust our reserves as additional information or events require .
on may 1 , 2007 , the irs completed its examination of our 2003 and 2004 income tax returns and proposed a number of adjustments to our taxable income .
we have appealed a number of these items .
in addition , during the second quarter of 2007 , there were net reversals of tax reserves , primarily related to previously unrecognized tax benefits related to various items of income and expense , including approximately $ 80.0 for certain worthless securities deductions associated with investments in consolidated subsidiaries , which was a result of the completion of the tax examination.


aeronautics 2019 operating profit for 2012 increased $ 69 million , or 4% ( 4 % ) , compared to 2011 .
the increase was attributable to higher operating profit of approximately $ 105 million from c-130 programs due to an increase in risk retirements ; about $ 50 million from f-16 programs due to higher aircraft deliveries partially offset by a decline in risk retirements ; approximately $ 50 million from f-35 production contracts due to increased production volume and risk retirements ; and about $ 50 million from the completion of purchased intangible asset amortization on certain f-16 contracts .
partially offsetting the increases was lower operating profit of about $ 90 million from the f-35 development contract primarily due to the inception-to-date effect of reducing the profit booking rate in the second quarter of 2012 ; approximately $ 50 million from decreased production volume and risk retirements on the f-22 program partially offset by a resolution of a contractual matter in the second quarter of 2012 ; and approximately $ 45 million primarily due to a decrease in risk retirements on other sustainment activities partially offset by various other aeronautics programs due to increased risk retirements and volume .
operating profit for c-5 programs was comparable to 2011 .
adjustments not related to volume , including net profit booking rate adjustments and other matters described above , were approximately $ 30 million lower for 2012 compared to 2011 .
backlog backlog decreased in 2013 compared to 2012 mainly due to lower orders on f-16 , c-5 , and c-130 programs , partially offset by higher orders on the f-35 program .
backlog decreased in 2012 compared to 2011 mainly due to lower orders on f-35 and c-130 programs , partially offset by higher orders on f-16 programs .
trends we expect aeronautics 2019 net sales to increase in 2014 in the mid-single digit percentage range as compared to 2013 primarily due to an increase in net sales from f-35 production contracts .
operating profit is expected to increase slightly from 2013 , resulting in a slight decrease in operating margins between the years due to program mix .
information systems & global solutions our is&gs business segment provides advanced technology systems and expertise , integrated information technology solutions , and management services across a broad spectrum of applications for civil , defense , intelligence , and other government customers .
is&gs has a portfolio of many smaller contracts as compared to our other business segments .
is&gs has been impacted by the continued downturn in federal information technology budgets .
is&gs 2019 operating results included the following ( in millions ) : .

                    | 2013           | 2012           | 2011
------------------- | -------------- | -------------- | --------------
net sales           | $ 8367         | $ 8846         | $ 9381
operating profit    | 759            | 808            | 874
operating margins   | 9.1% ( 9.1 % ) | 9.1% ( 9.1 % ) | 9.3% ( 9.3 % )
backlog at year-end | 8300           | 8700           | 9300

2013 compared to 2012 is&gs 2019 net sales decreased $ 479 million , or 5% ( 5 % ) , for 2013 compared to 2012 .
the decrease was attributable to lower net sales of about $ 495 million due to decreased volume on various programs ( command and control programs for classified customers , ngi , and eram programs ) ; and approximately $ 320 million due to the completion of certain programs ( such as total information processing support services , the transportation worker identification credential ( twic ) , and odin ) .
the decrease was partially offset by higher net sales of about $ 340 million due to the start-up of certain programs ( such as the disa gsm-o and the national science foundation antarctic support ) .
is&gs 2019 operating profit decreased $ 49 million , or 6% ( 6 % ) , for 2013 compared to 2012 .
the decrease was primarily attributable to lower operating profit of about $ 55 million due to certain programs nearing the end of their lifecycles , partially offset by higher operating profit of approximately $ 15 million due to the start-up of certain programs .
adjustments not related to volume , including net profit booking rate adjustments and other matters , were comparable for 2013 compared to 2012 compared to 2011 is&gs 2019 net sales for 2012 decreased $ 535 million , or 6% ( 6 % ) , compared to 2011 .
the decrease was attributable to lower net sales of approximately $ 485 million due to the substantial completion of various programs during 2011 ( primarily jtrs ; odin ; and u.k .
census ) ; and about $ 255 million due to lower volume on numerous other programs ( primarily hanford;


management 2019s discussion and analysis net interest income 2013 versus 2012 .
net interest income on the consolidated statements of earnings was $ 3.39 billion for 2013 , 13% ( 13 % ) lower than 2012 .
the decrease compared with 2012 was primarily due to lower average yields on financial instruments owned , at fair value , partially offset by lower interest expense on financial instruments sold , but not yet purchased , at fair value and collateralized financings .
2012 versus 2011 .
net interest income on the consolidated statements of earnings was $ 3.88 billion for 2012 , 25% ( 25 % ) lower than 2011 .
the decrease compared with 2011 was primarily due to lower average yields on financial instruments owned , at fair value and collateralized agreements .
see 201cstatistical disclosures 2014 distribution of assets , liabilities and shareholders 2019 equity 201d for further information about our sources of net interest income .
operating expenses our operating expenses are primarily influenced by compensation , headcount and levels of business activity .
compensation and benefits includes salaries , discretionary compensation , amortization of equity awards and other items such as benefits .
discretionary compensation is significantly impacted by , among other factors , the level of net revenues , overall financial performance , prevailing labor markets , business mix , the structure of our share-based compensation programs and the external environment .
the table below presents our operating expenses and total staff ( which includes employees , consultants and temporary staff ) . .

$ in millions                                    | year ended december 2013 | year ended december 2012 | year ended december 2011
------------------------------------------------ | ------------------------ | ------------------------ | ------------------------
compensation and benefits                        | $ 12613                  | $ 12944                  | $ 12223
brokerage clearing exchange anddistribution fees | 2341                     | 2208                     | 2463
market development                               | 541                      | 509                      | 640
communications and technology                    | 776                      | 782                      | 828
depreciation and amortization                    | 1322                     | 1738                     | 1865
occupancy                                        | 839                      | 875                      | 1030
professional fees                                | 930                      | 867                      | 992
insurance reserves1                              | 176                      | 598                      | 529
other expenses                                   | 2931                     | 2435                     | 2072
total non-compensation expenses                  | 9856                     | 10012                    | 10419
total operating expenses                         | $ 22469                  | $ 22956                  | $ 22642
total staff at period-end                        | 32900                    | 32400                    | 33300

1 .
related revenues are included in 201cmarket making 201d in the consolidated statements of earnings .
goldman sachs 2013 annual report 45


stock performance graph * $ 100 invested on 11/17/11 in our stock or 10/31/11 in the relevant index , including reinvestment of dividends .
fiscal year ending december 31 , 2014 .
( 1 ) delphi automotive plc ( 2 ) s&p 500 2013 standard & poor 2019s 500 total return index ( 3 ) automotive supplier peer group 2013 russell 3000 auto parts index , including american axle & manufacturing , borgwarner inc. , cooper tire & rubber company , dana holding corp. , delphi automotive plc , dorman products inc. , federal-mogul corp. , ford motor co. , fuel systems solutions inc. , general motors co. , gentex corp. , gentherm inc. , genuine parts co. , johnson controls inc. , lkq corp. , lear corp. , meritor inc. , remy international inc. , standard motor products inc. , stoneridge inc. , superior industries international , trw automotive holdings corp. , tenneco inc. , tesla motors inc. , the goodyear tire & rubber co. , tower international inc. , visteon corp. , and wabco holdings inc .
company index november 17 , december 31 , december 31 , december 31 , december 31 .

company index                        | november 17 2011 | december 31 2011 | december 31 2012 | december 31 2013 | december 31 2014
------------------------------------ | ---------------- | ---------------- | ---------------- | ---------------- | ----------------
delphi automotive plc ( 1 )          | $ 100.00         | $ 100.98         | $ 179.33         | $ 285.81         | $ 350.82
s&p 500 ( 2 )                        | 100.00           | 100.80           | 116.93           | 154.80           | 175.99
automotive supplier peer group ( 3 ) | 100.00           | 89.27            | 110.41           | 166.46           | 178.05

dividends on february 26 , 2013 , the board of directors approved the initiation of dividend payments on the company's ordinary shares .
the board of directors declared a regular quarterly cash dividend of $ 0.17 per ordinary share that was paid in each quarter of 2013 .
in january 2014 , the board of directors increased the quarterly dividend rate to $ 0.25 per ordinary share , which was paid in each quarter of 2014 .
in addition , in january 2015 , the board of directors declared a regular quarterly cash dividend of $ 0.25 per ordinary share , payable on february 27 , 2015 to shareholders of record at the close of business on february 18 , 2015.


the aes corporation notes to consolidated financial statements 2014 ( continued ) december 31 , 2011 , 2010 , and 2009 ( 1 ) weighted average interest rate at december 31 , 2011 .
( 2 ) the company has interest rate swaps and interest rate option agreements in an aggregate notional principal amount of approximately $ 3.6 billion on non-recourse debt outstanding at december 31 , 2011 .
the swap agreements economically change the variable interest rates on the portion of the debt covered by the notional amounts to fixed rates ranging from approximately 1.44% ( 1.44 % ) to 6.98% ( 6.98 % ) .
the option agreements fix interest rates within a range from 1.00% ( 1.00 % ) to 7.00% ( 7.00 % ) .
the agreements expire at various dates from 2016 through 2028 .
( 3 ) multilateral loans include loans funded and guaranteed by bilaterals , multilaterals , development banks and other similar institutions .
( 4 ) non-recourse debt of $ 704 million and $ 945 million as of december 31 , 2011 and 2010 , respectively , was excluded from non-recourse debt and included in current and long-term liabilities of held for sale and discontinued businesses in the accompanying consolidated balance sheets .
non-recourse debt as of december 31 , 2011 is scheduled to reach maturity as set forth in the table below : december 31 , annual maturities ( in millions ) .

december 31,            | annual maturities ( in millions )
----------------------- | ---------------------------------
2012                    | $ 2152
2013                    | 1389
2014                    | 1697
2015                    | 851
2016                    | 2301
thereafter              | 7698
total non-recourse debt | $ 16088

as of december 31 , 2011 , aes subsidiaries with facilities under construction had a total of approximately $ 1.4 billion of committed but unused credit facilities available to fund construction and other related costs .
excluding these facilities under construction , aes subsidiaries had approximately $ 1.2 billion in a number of available but unused committed revolving credit lines to support their working capital , debt service reserves and other business needs .
these credit lines can be used in one or more of the following ways : solely for borrowings ; solely for letters of credit ; or a combination of these uses .
the weighted average interest rate on borrowings from these facilities was 14.75% ( 14.75 % ) at december 31 , 2011 .
on october 3 , 2011 , dolphin subsidiary ii , inc .
( 201cdolphin ii 201d ) , a newly formed , wholly-owned special purpose indirect subsidiary of aes , entered into an indenture ( the 201cindenture 201d ) with wells fargo bank , n.a .
( the 201ctrustee 201d ) as part of its issuance of $ 450 million aggregate principal amount of 6.50% ( 6.50 % ) senior notes due 2016 ( the 201c2016 notes 201d ) and $ 800 million aggregate principal amount of 7.25% ( 7.25 % ) senior notes due 2021 ( the 201c7.25% ( 201c7.25 % ) 2021 notes 201d , together with the 2016 notes , the 201cnotes 201d ) to finance the acquisition ( the 201cacquisition 201d ) of dpl .
upon closing of the acquisition on november 28 , 2011 , dolphin ii was merged into dpl with dpl being the surviving entity and obligor .
the 2016 notes and the 7.25% ( 7.25 % ) 2021 notes are included under 201cnotes and bonds 201d in the non-recourse detail table above .
see note 23 2014acquisitions and dispositions for further information .
interest on the 2016 notes and the 7.25% ( 7.25 % ) 2021 notes accrues at a rate of 6.50% ( 6.50 % ) and 7.25% ( 7.25 % ) per year , respectively , and is payable on april 15 and october 15 of each year , beginning april 15 , 2012 .
prior to september 15 , 2016 with respect to the 2016 notes and july 15 , 2021 with respect to the 7.25% ( 7.25 % ) 2021 notes , dpl may redeem some or all of the 2016 notes or 7.25% ( 7.25 % ) 2021 notes at par , plus a 201cmake-whole 201d amount set forth in


table of contents notes to consolidated financial statements of american airlines group inc .
information generated by market transactions involving comparable assets , as well as pricing guides and other sources .
the current market for the aircraft , the maintenance condition of the aircraft and the expected proceeds from the sale of the assets , among other factors , were considered .
the market approach was utilized to value certain intangible assets such as airport take off and landing slots when sufficient market information was available .
the income approach was primarily used to value intangible assets , including customer relationships , marketing agreements , certain international route authorities , and the us airways tradename .
the income approach indicates value for a subject asset based on the present value of cash flows projected to be generated by the asset .
projected cash flows are discounted at a required market rate of return that reflects the relative risk of achieving the cash flows and the time value of money .
the cost approach , which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility , was used , as appropriate , for certain assets for which the market and income approaches could not be applied due to the nature of the asset .
the cost to replace a given asset reflects the estimated reproduction or replacement cost for the asset , less an allowance for loss in value due to depreciation .
the fair value of us airways 2019 dividend miles loyalty program liability was determined based on the weighted average equivalent ticket value of outstanding miles which were expected to be redeemed for future travel at december 9 , 2013 .
the weighted average equivalent ticket value contemplates differing classes of service , domestic and international itineraries and the carrier providing the award travel .
pro-forma impact of the merger the company 2019s unaudited pro-forma results presented below include the effects of the merger as if it had been consummated as of january 1 , 2012 .
the pro-forma results include the depreciation and amortization associated with the acquired tangible and intangible assets , lease and debt fair value adjustments , the elimination of any deferred gains or losses , adjustments relating to reflecting the fair value of the loyalty program liability and the impact of income changes on profit sharing expense , among others .
in addition , the pro-forma results below reflect the impact of higher wage rates related to memorandums of understanding with us airways 2019 pilots that became effective upon closing of the merger , as well as the elimination of the company 2019s reorganization items , net and merger transition costs .
however , the pro-forma results do not include any anticipated synergies or other expected benefits of the merger .
accordingly , the unaudited pro-forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of january 1 , 2012 .
december 31 , ( in millions ) .

           | december 31 2013 ( in millions )
---------- | --------------------------------
revenue    | $ 40678
net income | 2526

5 .
basis of presentation and summary of significant accounting policies ( a ) basis of presentation the consolidated financial statements for the full years of 2015 and 2014 and the period from december 9 , 2013 to december 31 , 2013 include the accounts of the company and its wholly-owned subsidiaries .
for the periods prior to december 9 , 2013 , the consolidated financial statements do not include the accounts of us airways group .
all significant intercompany transactions have been eliminated .
the preparation of financial statements in accordance with accounting principles generally accepted in the united states ( gaap ) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities , revenues and expenses , and the disclosure of contingent assets and liabilities at the date of the financial statements .
actual results could differ from those estimates .
the most significant areas


securities have historically returned approximately 10% ( 10 % ) annually over long periods of time , while u.s .
debt securities have returned approximately 6% ( 6 % ) annually over long periods .
application of these historical returns to the plan 2019s allocation ranges for equities and bonds produces a result between 7.25% ( 7.25 % ) and 8.75% ( 8.75 % ) and is one point of reference , among many other factors , that is taken into consideration .
we also examine the plan 2019s actual historical returns over various periods and consider the current economic environment .
recent experience is considered in our evaluation with appropriate consideration that , especially for short time periods , recent returns are not reliable indicators of future returns .
while annual returns can vary significantly ( actual returns for 2012 , 2011 , and 2010 were +15.29% ( +15.29 % ) , +.11% ( +.11 % ) , and +14.87% ( +14.87 % ) , respectively ) , the selected assumption represents our estimated long-term average prospective returns .
acknowledging the potentially wide range for this assumption , we also annually examine the assumption used by other companies with similar pension investment strategies , so that we can ascertain whether our determinations markedly differ from others .
in all cases , however , this data simply informs our process , which places the greatest emphasis on our qualitative judgment of future investment returns , given the conditions existing at each annual measurement date .
taking into consideration all of these factors , the expected long-term return on plan assets for determining net periodic pension cost for 2012 was 7.75% ( 7.75 % ) , the same as it was for 2011 .
after considering the views of both internal and external capital market advisors , particularly with regard to the effects of the recent economic environment on long-term prospective fixed income returns , we are reducing our expected long-term return on assets to 7.50% ( 7.50 % ) for determining pension cost for under current accounting rules , the difference between expected long-term returns and actual returns is accumulated and amortized to pension expense over future periods .
each one percentage point difference in actual return compared with our expected return causes expense in subsequent years to increase or decrease by up to $ 8 million as the impact is amortized into results of operations .
we currently estimate a pretax pension expense of $ 73 million in 2013 compared with pretax expense of $ 89 million in 2012 .
this year-over-year expected decrease reflects the impact of favorable returns on plan assets experienced in 2012 as well as the effects of the lower discount rate required to be used in the table below reflects the estimated effects on pension expense of certain changes in annual assumptions , using 2013 estimated expense as a baseline .
table 27 : pension expense - sensitivity analysis change in assumption ( a ) estimated increase to 2013 pension expense ( in millions ) .

change in assumption ( a )                                   | estimatedincrease to 2013pensionexpense ( in millions )
------------------------------------------------------------ | -------------------------------------------------------
.5% ( .5 % ) decrease in discount rate                       | $ 21
.5% ( .5 % ) decrease in expected long-term return on assets | $ 19
.5% ( .5 % ) increase in compensation rate                   | $ 2

( a ) the impact is the effect of changing the specified assumption while holding all other assumptions constant .
our pension plan contribution requirements are not particularly sensitive to actuarial assumptions .
investment performance has the most impact on contribution requirements and will drive the amount of required contributions in future years .
also , current law , including the provisions of the pension protection act of 2006 , sets limits as to both minimum and maximum contributions to the plan .
we do not expect to be required by law to make any contributions to the plan during 2013 .
we maintain other defined benefit plans that have a less significant effect on financial results , including various nonqualified supplemental retirement plans for certain employees , which are described more fully in note 15 employee benefit plans in the notes to consolidated financial statements in item 8 of this report .
the pnc financial services group , inc .
2013 form 10-k 77


management 2019s discussion and analysis 120 jpmorgan chase & co./2014 annual report wholesale credit portfolio the firm 2019s wholesale businesses are exposed to credit risk through underwriting , lending and trading activities with and for clients and counterparties , as well as through various operating services such as cash management and clearing activities .
a portion of the loans originated or acquired by the firm 2019s wholesale businesses is generally retained on the balance sheet .
the firm distributes a significant percentage of the loans it originates into the market as part of its syndicated loan business and to manage portfolio concentrations and credit risk .
the wholesale credit environment remained favorable throughout 2014 driving an increase in client activity .
growth in loans retained was driven primarily by activity in commercial banking , while growth in lending-related commitments reflected increased activity in both the corporate & investment bank and commercial banking .
discipline in underwriting across all areas of lending continues to remain a key point of focus , consistent with evolving market conditions and the firm 2019s risk management activities .
the wholesale portfolio is actively managed , in part by conducting ongoing , in-depth reviews of client credit quality and transaction structure , inclusive of collateral where applicable ; and of industry , product and client concentrations .
during the year , wholesale criticized assets decreased from 2013 , including a reduction in nonaccrual loans by 40% ( 40 % ) .
wholesale credit portfolio december 31 , credit exposure nonperforming ( d ) .

december 31 , ( in millions )                                        | december 31 , 2014 | december 31 , 2013 | 2014   | 2013
-------------------------------------------------------------------- | ------------------ | ------------------ | ------ | ----------
loans retained                                                       | $ 324502           | $ 308263           | $ 599  | $ 821
loans held-for-sale                                                  | 3801               | 11290              | 4      | 26
loans at fair value                                                  | 2611               | 2011               | 21     | 197
loans 2013 reported                                                  | 330914             | 321564             | 624    | 1044
derivative receivables                                               | 78975              | 65759              | 275    | 415
receivables from customers and other ( a )                           | 28972              | 26744              | 2014   | 2014
total wholesale credit-related assets                                | 438861             | 414067             | 899    | 1459
lending-related commitments ( b )                                    | 472056             | 446232             | 103    | 206
total wholesale credit exposure                                      | $ 910917           | $ 860299           | $ 1002 | $ 1665
credit portfolio management derivatives notional net ( c )           | $ -26703 ( 26703 ) | $ -27996 ( 27996 ) | $ 2014 | $ -5 ( 5 )
liquid securities and other cash collateral held against derivatives | -19604 ( 19604 )   | -14435 ( 14435 )   | na     | na

receivables from customers and other ( a ) 28972 26744 2014 2014 total wholesale credit- related assets 438861 414067 899 1459 lending-related commitments ( b ) 472056 446232 103 206 total wholesale credit exposure $ 910917 $ 860299 $ 1002 $ 1665 credit portfolio management derivatives notional , net ( c ) $ ( 26703 ) $ ( 27996 ) $ 2014 $ ( 5 ) liquid securities and other cash collateral held against derivatives ( 19604 ) ( 14435 ) na na ( a ) receivables from customers and other include $ 28.8 billion and $ 26.5 billion of margin loans at december 31 , 2014 and 2013 , respectively , to prime and retail brokerage customers ; these are classified in accrued interest and accounts receivable on the consolidated balance sheets .
( b ) includes unused advised lines of credit of $ 105.2 billion and $ 102.0 billion as of december 31 , 2014 and 2013 , respectively .
an advised line of credit is a revolving credit line which specifies the maximum amount the firm may make available to an obligor , on a nonbinding basis .
the borrower receives written or oral advice of this facility .
the firm may cancel this facility at any time by providing the borrower notice or , in some cases , without notice as permitted by law .
( c ) represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures ; these derivatives do not qualify for hedge accounting under u.s .
gaap .
for additional information , see credit derivatives on page 127 , and note 6 .
( d ) excludes assets acquired in loan satisfactions.


new accounting pronouncements information regarding new accounting pronouncements is included in note 1 to the consolidated financial statements .
financial condition and liquidity the company generates significant ongoing cash flow .
increases in long-term debt have been used , in part , to fund share repurchase activities and acquisitions .
on november 15 , 2007 , 3m ( safety , security and protection services business ) announced that it had entered into a definitive agreement for 3m 2019s acquisition of 100 percent of the outstanding shares of aearo holding corp .
e83a a global leader in the personal protection industry that manufactures and markets personal protection and energy absorbing products e83a for approximately $ 1.2 billion .
the sale is expected to close towards the end of the first quarter of 2008 .
at december 31 .

( millions )                                           | 2007   | 2006   | 2005
------------------------------------------------------ | ------ | ------ | ------
total debt                                             | $ 4920 | $ 3553 | $ 2381
less : cash cash equivalents and marketable securities | 2955   | 2084   | 1072
net debt                                               | $ 1965 | $ 1469 | $ 1309

cash , cash equivalents and marketable securities at december 31 , 2007 totaled approximately $ 3 billion , helped by strong cash flow generation and by the timing of debt issuances .
at december 31 , 2006 , cash balances were higher due to the significant pharmaceuticals sales proceeds received in december 2006 .
3m believes its ongoing cash flows provide ample cash to fund expected investments and capital expenditures .
the company has sufficient access to capital markets to meet currently anticipated growth and acquisition investment funding needs .
the company does not utilize derivative instruments linked to the company 2019s stock .
however , the company does have contingently convertible debt that , if conditions for conversion are met , is convertible into shares of 3m common stock ( refer to note 10 in this document ) .
the company 2019s financial condition and liquidity are strong .
various assets and liabilities , including cash and short-term debt , can fluctuate significantly from month to month depending on short-term liquidity needs .
working capital ( defined as current assets minus current liabilities ) totaled $ 4.476 billion at december 31 , 2007 , compared with $ 1.623 billion at december 31 , 2006 .
working capital was higher primarily due to increases in cash and cash equivalents , short-term marketable securities , receivables and inventories and decreases in short-term debt and accrued income taxes .
the company 2019s liquidity remains strong , with cash , cash equivalents and marketable securities at december 31 , 2007 totaling approximately $ 3 billion .
primary short-term liquidity needs are provided through u.s .
commercial paper and euro commercial paper issuances .
as of december 31 , 2007 , outstanding total commercial paper issued totaled $ 349 million and averaged $ 1.249 billion during 2007 .
the company believes it unlikely that its access to the commercial paper market will be restricted .
in june 2007 , the company established a medium-term notes program through which up to $ 3 billion of medium-term notes may be offered , with remaining shelf borrowing capacity of $ 2.5 billion as of december 31 , 2007 .
on april 30 , 2007 , the company replaced its $ 565-million credit facility with a new $ 1.5-billion five-year credit facility , which has provisions for the company to request an increase of the facility up to $ 2 billion ( at the lenders 2019 discretion ) , and providing for up to $ 150 million in letters of credit .
as of december 31 , 2007 , there are $ 110 million in letters of credit drawn against the facility .
at december 31 , 2007 , available short-term committed lines of credit internationally totaled approximately $ 67 million , of which $ 13 million was utilized .
debt covenants do not restrict the payment of dividends .
the company has a "well-known seasoned issuer" shelf registration statement , effective february 24 , 2006 , to register an indeterminate amount of debt or equity securities for future sales .
the company intends to use the proceeds from future securities sales off this shelf for general corporate purposes .
at december 31 , 2007 , certain debt agreements ( $ 350 million of dealer remarketable securities and $ 87 million of esop debt ) had ratings triggers ( bbb-/baa3 or lower ) that would require repayment of debt .
the company has an aa credit rating , with a stable outlook , from standard & poor 2019s and an aa1 credit rating , with a negative outlook , from moody 2019s investors service .
in addition , under the $ 1.5-billion five-year credit facility agreement , 3m is required to maintain its ebitda to interest ratio as of the end of each fiscal quarter at not less than 3.0 to 1 .
this is calculated ( as defined in the agreement ) as the ratio of consolidated total ebitda for the four consecutive quarters then ended to total interest expense on all funded debt for the same period .
at december 31 , 2007 , this ratio was approximately 35 to 1.


in july , 2002 , marathon received a notice of enforcement from the state of texas for alleged excess air emissions from its yates gas plant and production operations on its kloh lease .
a settlement of this matter was finalized in 2004 , with marathon and its co-owners paying a civil penalty of $ 74000 and the donation of land as a supplemental environmental project in lieu of a further penalty of $ 74000 .
marathon is owner of a 38% ( 38 % ) interest in the facilities .
in may , 2003 , marathon received a consolidated compliance order & notice or potential penalty from the state of louisiana for alleged various air permit regulatory violations .
this matter was settled for a civil penalty of $ 148628 and awaits formal closure with the state .
in august of 2004 , the west virginia department of environmental protection ( 2018 2018wvdep 2019 2019 ) submitted a draft consent order to map regarding map 2019s handling of alleged hazardous waste generated from tank cleanings in the state of west virginia .
the proposed order seeks a civil penalty of $ 337900 .
map has met with the wvdep and discussions are ongoing in an attempt to resolve this matter .
item 4 .
submission of matters to a vote of security holders not applicable .
part ii item 5 .
market for registrant 2019s common equity and related stockholder matters and issuer purchases of equity securities the principal market on which the company 2019s common stock is traded is the new york stock exchange .
the company 2019s common stock is also traded on the chicago stock exchange and the pacific exchange .
information concerning the high and low sales prices for the common stock as reported in the consolidated transaction reporting system and the frequency and amount of dividends paid during the last two years is set forth in 2018 2018selected quarterly financial data ( unaudited ) 2019 2019 on page f-41 .
as of january 31 , 2005 , there were 58340 registered holders of marathon common stock .
the board of directors intends to declare and pay dividends on marathon common stock based on the financial condition and results of operations of marathon oil corporation , although it has no obligation under delaware law or the restated certificate of incorporation to do so .
in determining its dividend policy with respect to marathon common stock , the board will rely on the financial statements of marathon .
dividends on marathon common stock are limited to legally available funds of marathon .
the following table provides information about purchases by marathon and its affiliated purchaser during the fourth quarter ended december 31 , 2004 of equity securities that are registered by marathon pursuant to section 12 of the exchange act : issuer purchases of equity securities .

                       | ( a )                                        | ( b )                        | ( c )                                                                                | ( d )
---------------------- | -------------------------------------------- | ---------------------------- | -------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------
period                 | total number of shares purchased ( 1 ) ( 2 ) | average price paid per share | total number of shares purchased as part of publicly announced plans or programs ( 1 ) | maximum number of shares that may yet be purchased under the plans or programs
10/01/04 2013 10/31/04 | 6015                                         | $ 40.51                      | n/a                                                                                | n/a
11/01/04 2013 11/30/04 | 5145                                         | $ 38.94                      | n/a                                                                                | n/a
12/01/04 2013 12/31/04 | 34526                                        | $ 37.07                      | n/a                                                                                | n/a
total:                 | 45686                                        | $ 37.73                      | n/a                                                                                | n/a

( 1 ) 42749 shares were repurchased in open-market transactions under the marathon oil corporation dividend reinvestment and direct stock purchase plan ( the 2018 2018plan 2019 2019 ) by the administrator of the plan .
stock needed to meet the requirements of the plan are either purchased in the open market or issued directly by marathon .
( 2 ) 2936 shares of restricted stock were delivered by employees to marathon , upon vesting , to satisfy tax withholding requirements .
item 6 .
selected financial data see page f-49 through f-51.


security ownership of 5% ( 5 % ) holders , directors , nominees and executive officers shares of common stock percent of common stock name of beneficial owner beneficially owned ( 1 ) outstanding .

name of beneficial owner                                               | shares of common stock beneficially owned ( 1 ) |            | percent of common stock outstanding
---------------------------------------------------------------------- | ----------------------------------------------- | ---------- | -----------------------------------
fidelity investments                                                   | 56583870                                        | -2 ( 2 )   | 6.49% ( 6.49 % )
steven p . jobs                                                        | 5546451                                         |            | *
william v . campbell                                                   | 112900                                          | -3 ( 3 )   | *
timothy d . cook                                                       | 13327                                           | -4 ( 4 )   | *
millard s . drexler                                                    | 230000                                          | -5 ( 5 )   | *
tony fadell                                                            | 288702                                          | -6 ( 6 )   | *
albert a . gore jr .                                                   | 70000                                           | -7 ( 7 )   | *
ronald b . johnson                                                     | 1450620                                         | -8 ( 8 )   | *
arthur d . levinson                                                    | 365015                                          | -9 ( 9 )   | *
peter oppenheimer                                                      | 14873                                           | -10 ( 10 ) | *
eric e . schmidt                                                       | 12284                                           | -11 ( 11 ) | *
jerome b . york                                                        | 90000                                           | -12 ( 12 ) | *
all current executive officers and directors as a group ( 14 persons ) | 8352396                                         | -13 ( 13 ) | 1.00% ( 1.00 % )

all current executive officers and directors as a group ( 14 persons ) 8352396 ( 13 ) 1.00% ( 1.00 % ) ( 1 ) represents shares of the company 2019s common stock held and options held by such individuals that were exercisable at the table date or within 60 days thereafter .
this does not include options or restricted stock units that vest more than 60 days after the table date .
( 2 ) based on a form 13g/a filed february 14 , 2007 by fmr corp .
fmr corp .
lists its address as 82 devonshire street , boston , ma 02109 , in such filing .
( 3 ) includes 110000 shares of the company 2019s common stock that mr .
campbell has the right to acquire by exercise of stock options .
( 4 ) excludes 600000 unvested restricted stock units .
( 5 ) includes 40000 shares of the company 2019s common stock that mr .
drexler holds indirectly and 190000 shares of the company 2019s common stock that mr .
drexler has the right to acquire by exercise of stock options .
( 6 ) includes 275 shares of the company 2019s common stock that mr .
fadell holds indirectly , 165875 shares of the company 2019s common stock that mr .
fadell has the right to acquire by exercise of stock options within 60 days after the table date , 1157 shares of the company 2019s common stock held by mr .
fadell 2019s spouse , and 117375 shares of the company 2019s common stock that mr .
fadell 2019s spouse has the right to acquire by exercise of stock options within 60 days after the table date .
excludes 210000 unvested restricted stock units held by mr .
fadell and 40000 unvested restricted stock units held by mr .
fadell 2019s spouse .
( 7 ) consists of 70000 shares of the company 2019s common stock that mr .
gore has the right to acquire by exercise of stock options .
( 8 ) includes 1300000 shares of the company 2019s common stock that mr .
johnson has the right to acquire by exercise of stock options and excludes 450000 unvested restricted stock units .
( 9 ) includes 2000 shares of the company 2019s common stock held by dr .
levinson 2019s spouse and 110000 shares of the company 2019s common stock that dr .
levinson has the right to acquire by exercise of stock options .
( 10 ) excludes 450000 unvested restricted stock units.


contractual obligations we summarize our enforceable and legally binding contractual obligations at september 30 , 2018 , and the effect these obligations are expected to have on our liquidity and cash flow in future periods in the following table .
certain amounts in this table are based on management fffds estimates and assumptions about these obligations , including their duration , the possibility of renewal , anticipated actions by third parties and other factors , including estimated minimum pension plan contributions and estimated benefit payments related to postretirement obligations , supplemental retirement plans and deferred compensation plans .
because these estimates and assumptions are subjective , the enforceable and legally binding obligations we actually pay in future periods may vary from those presented in the table. .

( in millions )                                                                   | payments due by period total | payments due by period fiscal 2019 | payments due by period fiscal 2020and 2021 | payments due by period fiscal 2022and 2023 | payments due by period thereafter
--------------------------------------------------------------------------------- | ---------------------------- | ---------------------------------- | ------------------------------------------ | ------------------------------------------ | ---------------------------------
long-term debt including current portionexcluding capital lease obligations ( 1 ) | $ 6039.0                     | $ 726.6                            | $ 824.8                                    | $ 1351.0                                   | $ 3136.6
operating lease obligations ( 2 )                                                 | 615.8                        | 132.1                              | 199.9                                      | 118.4                                      | 165.4
capital lease obligations ( 3 )                                                   | 152.5                        | 5.0                                | 6.7                                        | 2.7                                        | 138.1
purchase obligations and other ( 4 ) ( 5 ) ( 6 )                                  | 2210.5                       | 1676.6                             | 224.1                                      | 114.9                                      | 194.9
total                                                                             | $ 9017.8                     | $ 2540.3                           | $ 1255.5                                   | $ 1587.0                                   | $ 3635.0

( 1 ) includes only principal payments owed on our debt assuming that all of our long-term debt will be held to maturity , excluding scheduled payments .
we have excluded $ 205.2 million of fair value of debt step-up , deferred financing costs and unamortized bond discounts from the table to arrive at actual debt obligations .
see fffdnote 13 .
debt fffd fffd of the notes to consolidated financial statements for information on the interest rates that apply to our various debt instruments .
( 2 ) see fffdnote 14 .
operating leases fffd of the notes to consolidated financial statements for additional information .
( 3 ) the fair value step-up of $ 18.5 million is excluded .
see fffdnote 13 .
debt fffd fffd capital lease and other indebtednesstt fffd of the notes to consolidated financial statements for additional information .
( 4 ) purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms , including : fixed or minimum quantities to be purchased ; fixed , minimum or variable price provision ; and the approximate timing of the transaction .
purchase obligations exclude agreements that are cancelable without penalty .
( 5 ) we have included in the table future estimated minimum pension plan contributions and estimated benefit payments related to postretirement obligations , supplemental retirement plans and deferred compensation plans .
our estimates are based on factors , such as discount rates and expected returns on plan assets .
future contributions are subject to changes in our underfunded status based on factors such as investment performance , discount rates , returns on plan assets and changes in legislation .
it is possible that our assumptions may change , actual market performance may vary or we may decide to contribute different amounts .
we have excluded $ 247.8 million of multiemployer pension plan withdrawal liabilities recorded as of september 30 , 2018 due to lack of definite payout terms for certain of the obligations .
see fffdnote 4 .
retirement plans fffd multiemployer plans fffd of the notes to consolidated financial statements for additional information .
( 6 ) we have not included the following items in the table : fffd an item labeled fffdother long-term liabilities fffd reflected on our consolidated balance sheet because these liabilities do not have a definite pay-out scheme .
fffd $ 158.4 million from the line item fffdpurchase obligations and other fffd for certain provisions of the financial accounting standards board fffds ( fffdfasb fffd ) accounting standards codification ( fffdasc fffd ) 740 , fffdincome taxes fffd associated with liabilities for uncertain tax positions due to the uncertainty as to the amount and timing of payment , if any .
in addition to the enforceable and legally binding obligations presented in the table above , we have other obligations for goods and services and raw materials entered into in the normal course of business .
these contracts , however , are subject to change based on our business decisions .
expenditures for environmental compliance see item 1 .
fffdbusiness fffd fffd governmental regulation fffd environmental and other matters fffd , fffdbusiness fffd fffd governmental regulation fffd cercla and other remediation costs fffd , and fffd fffdbusiness fffd fffd governmental regulation fffd climate change fffd for a discussion of our expenditures for environmental compliance.


14 .
capital stock and earnings per share we are authorized to issue 250 million shares of preferred stock , none of which were issued or outstanding as of december 31 , 2009 .
the numerator for both basic and diluted earnings per share is net earnings available to common stockholders .
the denominator for basic earnings per share is the weighted average number of common shares outstanding during the period .
the denominator for diluted earnings per share is weighted average shares outstanding adjusted for the effect of dilutive stock options and other equity awards .
the following is a reconciliation of weighted average shares for the basic and diluted share computations for the years ending december 31 ( in millions ) : .

                                                                       | 2009  | 2008  | 2007
---------------------------------------------------------------------- | ----- | ----- | -----
weighted average shares outstanding for basic net earnings per share   | 215.0 | 227.3 | 235.5
effect of dilutive stock options and other equity awards               | 0.8   | 1.0   | 2.0
weighted average shares outstanding for diluted net earnings per share | 215.8 | 228.3 | 237.5

weighted average shares outstanding for basic net earnings per share 215.0 227.3 235.5 effect of dilutive stock options and other equity awards 0.8 1.0 2.0 weighted average shares outstanding for diluted net earnings per share 215.8 228.3 237.5 for the year ended december 31 , 2009 , an average of 14.3 million options to purchase shares of common stock were not included in the computation of diluted earnings per share as the exercise prices of these options were greater than the average market price of the common stock .
for the years ended december 31 , 2008 and 2007 , an average of 11.2 million and 3.1 million options , respectively , were not included .
during 2009 , we repurchased approximately 19.8 million shares of our common stock at an average price of $ 46.56 per share for a total cash outlay of $ 923.7 million , including commissions .
in april 2008 , we announced that our board of directors authorized a $ 1.25 billion share repurchase program which was originally set to expire on december 31 , 2009 .
in september 2009 , the board of directors extended this program to december 31 , 2010 .
approximately $ 211.1 million remains authorized for future repurchases under this plan .
15 .
segment data we design , develop , manufacture and market orthopaedic reconstructive implants , dental implants , spinal implants , trauma products and related surgical products which include surgical supplies and instruments designed to aid in surgical procedures and post-operation rehabilitation .
we also provide other healthcare-related services .
revenue related to these services currently represents less than 1 percent of our total net sales .
we manage operations through three major geographic segments 2013 the americas , which is comprised principally of the united states and includes other north , central and south american markets ; europe , which is comprised principally of europe and includes the middle east and africa ; and asia pacific , which is comprised primarily of japan and includes other asian and pacific markets .
this structure is the basis for our reportable segment information discussed below .
management evaluates reportable segment performance based upon segment operating profit exclusive of operating expenses pertaining to global operations and corporate expenses , share-based compensation expense , settlement , certain claims , acquisition , integration , realignment and other expenses , net curtailment and settlement , inventory step-up , in-process research and development write-offs and intangible asset amortization expense .
global operations include research , development engineering , medical education , brand management , corporate legal , finance , and human resource functions and u.s .
and puerto rico-based manufacturing operations and logistics .
intercompany transactions have been eliminated from segment operating profit .
management reviews accounts receivable , inventory , property , plant and equipment , goodwill and intangible assets by reportable segment exclusive of u.s .
and puerto rico-based manufacturing operations and logistics and corporate assets .
z i m m e r h o l d i n g s , i n c .
2 0 0 9 f o r m 1 0 - k a n n u a l r e p o r t notes to consolidated financial statements ( continued ) %%transmsg*** transmitting job : c55340 pcn : 060000000 ***%%pcmsg|60 |00007|yes|no|02/24/2010 01:32|0|0|page is valid , no graphics -- color : d|


edwards lifesciences corporation notes to consolidated financial statements ( continued ) 7 .
acquisitions ( continued ) transaction closed on january 23 , 2017 , and the consideration paid included the issuance of approximately 2.8 million shares of the company 2019s common stock ( fair value of $ 266.5 million ) and cash of $ 86.2 million .
the company recognized in 201ccontingent consideration liabilities 201d a $ 162.9 million liability for the estimated fair value of the contingent milestone payments .
the fair value of the contingent milestone payments will be remeasured each quarter , with changes in the fair value recognized within operating expenses on the consolidated statements of operations .
for further information on the fair value of the contingent milestone payments , see note 10 .
in connection with the acquisition , the company placed $ 27.6 million of the purchase price into escrow to satisfy any claims for indemnification made in accordance with the merger agreement .
any funds remaining 15 months after the acquisition date will be disbursed to valtech 2019s former shareholders .
acquisition-related costs of $ 0.6 million and $ 4.1 million were recorded in 201cselling , general , and administrative expenses 201d during the years ended december 31 , 2017 and 2016 , respectively .
prior to the close of the transaction , valtech spun off its early- stage transseptal mitral valve replacement technology program .
concurrent with the closing , the company entered into an agreement for an exclusive option to acquire that program and its associated intellectual property for approximately $ 200.0 million , subject to certain adjustments , plus an additional $ 50.0 million if a certain european regulatory approval is obtained within 10 years of the acquisition closing date .
the option expires two years after the closing date of the transaction , but can be extended by up to one year depending on the results of certain clinical trials .
valtech is a developer of a transcatheter mitral and tricuspid valve repair system .
the company plans to add this technology to its portfolio of mitral and tricuspid repair products .
the acquisition was accounted for as a business combination .
tangible and intangible assets acquired were recorded based on their estimated fair values at the acquisition date .
the excess of the purchase price over the fair value of net assets acquired was recorded to goodwill .
the following table summarizes the fair values of the assets acquired and liabilities assumed ( in millions ) : .

current assets                            | $ 22.7
----------------------------------------- | --------------
property and equipment net                | 1.2
goodwill                                  | 316.5
developed technology                      | 109.2
ipr&d                                     | 87.9
other assets                              | 0.8
current liabilities assumed               | -5.1 ( 5.1 )
deferred income taxes                     | -17.6 ( 17.6 )
total purchase price                      | 515.6
less : cash acquired                      | -4.3 ( 4.3 )
total purchase price net of cash acquired | $ 511.3

goodwill includes expected synergies and other benefits the company believes will result from the acquisition .
goodwill was assigned to the company 2019s rest of world segment and is not deductible for tax purposes .
ipr&d has been capitalized at fair value as an intangible asset with an indefinite life and will be assessed for impairment in subsequent periods .
the fair value of the ipr&d was determined using the income approach .
this approach determines fair value based on cash flow projections which are discounted to present value using a risk-adjusted rate of return .
the discount rates used to determine the fair value of the ipr&d ranged from 18.0% ( 18.0 % ) to 20.0% ( 20.0 % ) .
completion of successful design developments , bench testing , pre-clinical studies


impairment of long-lived assets , goodwill and intangible assets - we assess our long-lived assets for impairment based on statement 144 , 201caccounting for the impairment or disposal of long-lived assets . 201d a long-lived asset is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may exceed its fair value .
fair values are based on the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the assets .
we assess our goodwill and intangible assets for impairment at least annually based on statement 142 , 201cgoodwill and other intangible assets . 201d there were no impairment charges resulting from the july 1 , 2007 , impairment tests and no events indicating an impairment have occurred subsequent to that date .
an initial assessment is made by comparing the fair value of the operations with goodwill , as determined in accordance with statement 142 , to the book value of each reporting unit .
if the fair value is less than the book value , an impairment is indicated , and we must perform a second test to measure the amount of the impairment .
in the second test , we calculate the implied fair value of the goodwill by deducting the fair value of all tangible and intangible net assets of the operations with goodwill from the fair value determined in step one of the assessment .
if the carrying value of the goodwill exceeds this calculated implied fair value of the goodwill , we will record an impairment charge .
at december 31 , 2007 , we had $ 600.7 million of goodwill recorded on our consolidated balance sheet as shown below. .

                | ( thousands of dollars )
--------------- | ------------------------
oneok partners  | $ 431418
distribution    | 157953
energy services | 10255
other           | 1099
total goodwill  | $ 600725

( thousands of dollars ) intangible assets with a finite useful life are amortized over their estimated useful life , while intangible assets with an indefinite useful life are not amortized .
all intangible assets are subject to impairment testing .
our oneok partners segment had $ 443.0 million of intangible assets recorded on our consolidated balance sheet as of december 31 , 2007 , of which $ 287.5 million is being amortized over an aggregate weighted-average period of 40 years , while the remaining balance has an indefinite life .
during 2006 , we recorded a goodwill and asset impairment related to oneok partners 2019 black mesa pipeline of $ 8.4 million and $ 3.6 million , respectively , which were recorded as depreciation and amortization .
the reduction to our net income , net of minority interests and income taxes , was $ 3.0 million .
in the third quarter of 2005 , we made the decision to sell our spring creek power plant , located in oklahoma , and exit the power generation business .
in october 2005 , we concluded that our spring creek power plant had been impaired and recorded an impairment expense of $ 52.2 million .
this conclusion was based on our statement 144 impairment analysis of the results of operations for this plant through september 30 , 2005 , and also the net sales proceeds from the anticipated sale of the plant .
the sale was completed on october 31 , 2006 .
this component of our business is accounted for as discontinued operations in accordance with statement 144 .
see 201cdiscontinued operations 201d on page 46 for additional information .
our total unamortized excess cost over underlying fair value of net assets accounted for under the equity method was $ 185.6 million as of december 31 , 2007 and 2006 .
based on statement 142 , this amount , referred to as equity method goodwill , should continue to be recognized in accordance with apb opinion no .
18 , 201cthe equity method of accounting for investments in common stock . 201d accordingly , we included this amount in investment in unconsolidated affiliates on our accompanying consolidated balance sheets .
pension and postretirement employee benefits - we have defined benefit retirement plans covering certain full-time employees .
we sponsor welfare plans that provide postretirement medical and life insurance benefits to certain employees who retire with at least five years of service .
our actuarial consultant calculates the expense and liability related to these plans and uses statistical and other factors that attempt to anticipate future events .
these factors include assumptions about the discount rate , expected return on plan assets , rate of future compensation increases , age and employment periods .
in determining the projected benefit obligations and costs , assumptions can change from period to period and result in material changes in the costs and liabilities we recognize .
see note j of the notes to consolidated financial statements in this annual report on form 10-k for additional information.