liabilities and related insurance receivables where applicable , or make such estimates for matters previously not susceptible of reasonable estimates , such as a significant judicial ruling or judgment , significant settlement , significant regulatory development or changes in applicable law .
a future adverse ruling , settlement or unfavorable development could result in future charges that could have a material adverse effect on the company 2019s results of operations or cash flows in any particular period .
a specific factor that could increase the company 2019s estimate of its future asbestos-related liabilities is the pending congressional consideration of legislation to reform asbestos- related litigation and pertinent information derived from that process .
for a more detailed discussion of the legal proceedings involving the company and associated accounting estimates , see the discussion in note 11 to the consolidated financial statements of this annual report on form 10-k .
item 1b .
unresolved staff comments .
item 2 .
properties .
3m 2019s general offices , corporate research laboratories , and certain division laboratories are located in st .
paul , minnesota .
in the united states , 3m has 15 sales offices in 12 states and operates 59 manufacturing facilities in 23 states .
internationally , 3m has 173 sales offices .
the company operates 80 manufacturing and converting facilities in 29 countries outside the united states .
3m owns substantially all of its physical properties .
3m 2019s physical facilities are highly suitable for the purposes for which they were designed .
because 3m is a global enterprise characterized by substantial intersegment cooperation , properties are often used by multiple business segments .
item 3 .
legal proceedings .
discussion of legal matters is incorporated by reference from part ii , item 8 , note 11 , 201ccommitments and contingencies 201d , of this document , and should be considered an integral part of part i , item 3 , 201clegal proceedings 201d .
item 4 .
submission of matters to a vote of security holders .
none in the quarter ended december 31 , 2005 .
part ii item 5 .
market for registrant 2019s common equity , related stockholder matters and issuer purchases of equity securities .
equity compensation plans 2019 information is incorporated by reference from part iii , item 12 , security ownership of certain beneficial owners and management , of this document , and should be considered an integral part of item 5 .
at january 31 , 2006 , there were approximately 125823 shareholders of record .
3m 2019s stock is listed on the new york stock exchange , inc .
( nyse ) , pacific exchange , inc. , chicago stock exchange , inc. , and the swx swiss exchange .
cash dividends declared and paid totaled $ .42 per share for each quarter of 2005 , and $ .36 per share for each quarter of 2004 .
stock price comparisons follow : stock price comparisons ( nyse composite transactions ) ( per share amounts ) quarter second quarter quarter fourth quarter year .

( per share amounts ) | first quarter | second quarter | third quarter | fourth quarter | year
--------------------- | ------------- | -------------- | ------------- | -------------- | -------
2005 high             | $ 87.45       | $ 86.21        | $ 76.74       | $ 79.84        | $ 87.45
2005 low              | 80.73         | $ 72.25        | 70.41         | 69.71          | 69.71
2004 high             | $ 86.20       | $ 90.29        | $ 90.11       | $ 83.03        | $ 90.29
2004 low              | 74.35         | 80.90          | 77.20         | 73.31          | 73.31


notes to consolidated financial statements 2014 ( continued ) fiscal years ended may 27 , 2007 , may 28 , 2006 , and may 29 , 2005 columnar amounts in millions except per share amounts 6 .
impairment of debt and equity securities during fiscal 2005 , the company determined that the carrying values of its investments in two unrelated equity method investments , a bio-fuels venture and a malt venture , were other-than-temporarily impaired and therefore recognized pre-tax impairment charges totaling $ 71.0 million ( $ 65.6 million after tax ) .
during fiscal 2006 , the company recognized additional impairment charges totaling $ 75.8 million ( $ 73.1 million after tax ) of its investments in the malt venture and an unrelated investment in a foreign prepared foods business , due to further declines in the estimated proceeds from the disposition of these investments .
the investment in a foreign prepared foods business was disposed of in fiscal 2006 .
the extent of the impairments was determined based upon the company 2019s assessment of the recoverability of its investments based primarily upon the expected proceeds of planned dispositions of the investments .
during fiscal 2007 , the company completed the disposition of the equity method investment in the malt venture for proceeds of approximately $ 24 million , including notes and other receivables totaling approximately $ 7 million .
this transaction resulted in a pre-tax gain of approximately $ 4 million , with a related tax benefit of approximately $ 4 million .
these charges and the subsequent gain on disposition are reflected in equity method investment earnings ( loss ) in the consolidated statements of earnings .
the company held , at may 28 , 2006 , subordinated notes in the original principal amount of $ 150 million plus accrued interest of $ 50.4 million from swift foods .
during the company 2019s fourth quarter of fiscal 2005 , swift foods effected changes in its capital structure .
as a result of those changes , the company determined that the fair value of the subordinated notes was impaired .
from the date on which the company initially determined that the value of the notes was impaired through the second quarter of fiscal 2006 , the company believed the impairment of this available-for-sale security to be temporary .
as such , the company had reduced the carrying value of the note by $ 35.4 million and recorded cumulative after-tax charges of $ 21.9 million in accumulated other comprehensive income as of the end of the second quarter of fiscal 2006 .
during the second half of fiscal 2006 , due to the company 2019s consideration of current conditions related to the debtor 2019s business and changes in the company 2019s intended holding period for this investment , the company determined that the impairment was other-than-temporary .
accordingly , the company reduced the carrying value of the notes to approximately $ 117 million and recognized impairment charges totaling $ 82.9 million in selling , general and administrative expenses , including the reclassification of the cumulative after-tax charges of $ 21.9 million from accumulated other comprehensive income , in fiscal 2006 .
during the second quarter of fiscal 2007 , the company closed on the sale of these notes for approximately $ 117 million , net of transaction expenses , resulting in no additional gain or loss .
7 .
inventories the major classes of inventories are as follows: .

                            | 2007     | 2006
--------------------------- | -------- | --------
raw materials and packaging | $ 1154.2 | $ 985.0
work in progress            | 95.2     | 97.4
finished goods              | 1008.1   | 923.6
supplies and other          | 91.0     | 124.6
total                       | $ 2348.5 | $ 2130.6

raw materials and packaging includes grain , fertilizer , crude oil , and other trading and merchandising inventory of $ 691.0 million and $ 542.1 million as of the end of fiscal year 2007 and 2006 , respectively.


in january 2016 , the company issued $ 800 million of debt securities consisting of a $ 400 million aggregate principal three year fixed rate note with a coupon rate of 2.00% ( 2.00 % ) and a $ 400 million aggregate principal seven year fixed rate note with a coupon rate of 3.25% ( 3.25 % ) .
the proceeds were used to repay a portion of the company 2019s outstanding commercial paper , repay the remaining term loan balance , and for general corporate purposes .
the company 2019s public notes and 144a notes may be redeemed by the company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium .
upon the occurrence of a change of control accompanied by a downgrade of the notes below investment grade rating , within a specified time period , the company would be required to offer to repurchase the public notes and 144a notes at a price equal to 101% ( 101 % ) of the aggregate principal amount thereof , plus any accrued and unpaid interest to the date of repurchase .
the public notes and 144a notes are senior unsecured and unsubordinated obligations of the company and rank equally with all other senior and unsubordinated indebtedness of the company .
the company entered into a registration rights agreement in connection with the issuance of the 144a notes .
subject to certain limitations set forth in the registration rights agreement , the company has agreed to ( i ) file a registration statement ( the 201cexchange offer registration statement 201d ) with respect to registered offers to exchange the 144a notes for exchange notes ( the 201cexchange notes 201d ) , which will have terms identical in all material respects to the new 10-year notes and new 30-year notes , as applicable , except that the exchange notes will not contain transfer restrictions and will not provide for any increase in the interest rate thereon in certain circumstances and ( ii ) use commercially reasonable efforts to cause the exchange offer registration statement to be declared effective within 270 days after the date of issuance of the 144a notes .
until such time as the exchange offer registration statement is declared effective , the 144a notes may only be sold in accordance with rule 144a or regulation s of the securities act of 1933 , as amended .
private notes the company 2019s private notes may be redeemed by the company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium .
upon the occurrence of specified changes of control involving the company , the company would be required to offer to repurchase the private notes at a price equal to 100% ( 100 % ) of the aggregate principal amount thereof , plus any accrued and unpaid interest to the date of repurchase .
additionally , the company would be required to make a similar offer to repurchase the private notes upon the occurrence of specified merger events or asset sales involving the company , when accompanied by a downgrade of the private notes below investment grade rating , within a specified time period .
the private notes are unsecured senior obligations of the company and rank equal in right of payment with all other senior indebtedness of the company .
the private notes shall be unconditionally guaranteed by subsidiaries of the company in certain circumstances , as described in the note purchase agreements as amended .
other debt during 2015 , the company acquired the beneficial interest in the trust owning the leased naperville facility resulting in debt assumption of $ 100.2 million and the addition of $ 135.2 million in property , plant and equipment .
certain administrative , divisional , and research and development personnel are based at the naperville facility .
cash paid as a result of the transaction was $ 19.8 million .
the assumption of debt and the majority of the property , plant and equipment addition represented non-cash financing and investing activities , respectively .
the remaining balance on the assumed debt was settled in december 2017 and was reflected in the "other" line of the table above at december 31 , 2016 .
covenants and future maturities the company is in compliance with all covenants under the company 2019s outstanding indebtedness at december 31 , 2017 .
as of december 31 , 2017 , the aggregate annual maturities of long-term debt for the next five years were : ( millions ) .

2018 | $ 550
---- | -----
2019 | 397
2020 | 300
2021 | 1017
2022 | 497


part ii item 5 2014market for registrant 2019s common equity and related stockholder matters ( a ) market information .
the common stock of the company is currently traded on the new york stock exchange ( nyse ) under the symbol 2018 2018aes 2019 2019 .
the following tables set forth the high and low sale prices for the common stock as reported by the nyse for the periods indicated .
price range of common stock .

2001 first quarter | high $ 60.15 | low $ 41.30 | 2000 first quarter | high $ 44.72 | low $ 34.25
------------------ | ------------ | ----------- | ------------------ | ------------ | -----------
second quarter     | 52.25        | 39.95       | second quarter     | 49.63        | 35.56
third quarter      | 44.50        | 12.00       | third quarter      | 70.25        | 45.13
fourth quarter     | 17.80        | 11.60       | fourth quarter     | 72.81        | 45.00

( b ) holders .
as of march 2 , 2002 , there were 9967 record holders of the company 2019s common stock , par value $ 0.01 per share .
( c ) dividends .
under the terms of the company 2019s corporate revolving loan and letters of credit facility of $ 850 million entered into with a commercial bank syndicate and other bank agreements , the company is currently limited in the amount of cash dividends it is allowed to pay .
in addition , the company is precluded from paying cash dividends on its common stock under the terms of a guaranty to the utility customer in connection with the aes thames project in the event certain net worth and liquidity tests of the company are not met .
the company has met these tests at all times since making the guaranty .
the ability of the company 2019s project subsidiaries to declare and pay cash dividends to the company is subject to certain limitations in the project loans , governmental provisions and other agreements entered into by such project subsidiaries .
such limitations permit the payment of cash dividends out of current cash flow for quarterly , semiannual or annual periods only at the end of such periods and only after payment of principal and interest on project loans due at the end of such periods , and in certain cases after providing for debt service reserves.


2022 selling costs increased $ 5.4 million to $ 17.1 million in 2005 from $ 11.7 million in 2004 .
this increase was due to increased headcount in our sales force and startup costs associated with our international growth initiatives .
as a percentage of net revenues , selling costs increased to 6.1% ( 6.1 % ) in 2005 from 5.7% ( 5.7 % ) in 2004 due to the increased costs described above .
2022 payroll and related costs ( excluding those specifically related to marketing and selling ) increased $ 8.6 million to $ 26.9 million in 2005 , from $ 18.3 million in 2004 .
the increase during 2005 was due to the following initiatives : we began to build our team to design and source our footwear line , which we expect to offer for the fall 2006 season , we added personnel to our information technology team to support our company-wide initiative to upgrade our information systems , we incurred equity compensation costs , we added personnel to operate our 3 new retail outlet stores , and we invested in the personnel needed to enhance our compliance function and operate as a public company .
as a percentage of net revenues , payroll and related costs ( excluding those specifically related to marketing and selling ) increased to 9.6% ( 9.6 % ) in 2005 from 8.9% ( 8.9 % ) in 2004 due to the items described above .
2022 other corporate costs increased $ 7.2 million to $ 25.5 million in 2005 , from $ 18.3 million in 2004 .
this increase was attributable to higher costs in support of our footwear initiative , freight and duty related to increased canada sales , expansion of our leased corporate office space and distribution facility , and necessary costs associated with being a public company .
as a percentage of net revenues , other corporate costs were 9.1% ( 9.1 % ) in 2005 , which is a slight increase from 8.9% ( 8.9 % ) in 2004 due to the items noted above .
income from operations increased $ 10.5 million , or 41.4% ( 41.4 % ) , to $ 35.9 million in 2005 from $ 25.4 million in 2004 .
income from operations as a percentage of net revenues increased to 12.7% ( 12.7 % ) in 2005 from 12.4% ( 12.4 % ) in 2004 .
this increase was a result of an increase in gross margin partially offset by an increase in selling , general and administrative expenses as a percentage of net revenues .
interest expense , net increased $ 1.6 million to $ 2.9 million in 2005 from $ 1.3 million in 2004 .
this increase was primarily due to higher average borrowings and a higher effective interest rate under our revolving credit facility prior to being repaid in november 2005 with proceeds from the initial public offering .
provision for income taxes increased $ 5.5 million to $ 13.3 million in 2005 from $ 7.8 million in 2004 .
for the year ended december 31 , 2005 our effective tax rate was 40.2% ( 40.2 % ) compared to 32.3% ( 32.3 % ) in 2004 .
this increase was primarily due to an increase in our effective state tax rate , which reflected reduced state tax credits earned as a percentage of income before taxes .
net income increased $ 3.4 million to $ 19.7 million in 2005 from $ 16.3 million in 2004 , as a result of the factors described above .
year ended december 31 , 2004 compared to year ended december 31 , 2003 net revenues increased $ 89.8 million , or 77.8% ( 77.8 % ) , to $ 205.2 million in 2004 from $ 115.4 million in 2003 .
the increase was a result of increases in both our net sales and license revenues as noted in the product category table below. .

( in thousands )   | year ended december 31 , 2004 | year ended december 31 , 2003 | year ended december 31 , $ change | year ended december 31 , % (  % ) change
------------------ | ----------------------------- | ----------------------------- | --------------------------------- | ----------------------------------------
mens               | $ 151962                      | $ 92197                       | $ 59765                           | 64.8% ( 64.8 % )
womens             | 28659                         | 10968                         | 17691                             | 161.3% ( 161.3 % )
youth              | 12705                         | 8518                          | 4187                              | 49.2% ( 49.2 % )
accessories        | 7548                          | 2072                          | 5476                              | 264.3% ( 264.3 % )
total net sales    | 200874                        | 113755                        | 87119                             | 76.6% ( 76.6 % )
license revenues   | 4307                          | 1664                          | 2643                              | 158.8% ( 158.8 % )
total net revenues | $ 205181                      | $ 115419                      | $ 89762                           | 77.8% ( 77.8 % )


the following is a reconciliation of the total amounts of unrecognized tax benefits for the year : ( in thousands ) .

unrecognized tax benefit 2014january 1 2008                        | $ 7928
------------------------------------------------------------------ | --------------
ansoft unrecognized tax benefit 2014acquired july 31 2008          | 3525
gross increases 2014tax positions in prior period                  | 2454
gross decreases 2014tax positions in prior period                  | -1572 ( 1572 )
gross increases 2014tax positions in current period                | 2255
reductions due to a lapse of the applicable statute of limitations | -1598 ( 1598 )
changes due to currency fluctuation                                | -259 ( 259 )
settlements                                                        | -317 ( 317 )
unrecognized tax benefit 2014december 31 2008                      | $ 12416

included in the balance of unrecognized tax benefits at december 31 , 2008 are $ 5.6 million of tax benefits that , if recognized , would affect the effective tax rate .
also included in the balance of unrecognized tax benefits at december 31 , 2008 are $ 5.0 million of tax benefits that , if recognized , would result in a decrease to goodwill recorded in purchase business combinations , and $ 1.9 million of tax benefits that , if recognized , would result in adjustments to other tax accounts , primarily deferred taxes .
the company believes it is reasonably possible that uncertain tax positions of approximately $ 2.6 million as of december 31 , 2008 will be resolved within the next twelve months .
the company recognizes interest and penalties related to unrecognized tax benefits as income tax expense .
related to the uncertain tax benefits noted above , the company recorded interest of $ 171000 during 2008 .
penalties recorded during 2008 were insignificant .
in total , as of december 31 , 2008 , the company has recognized a liability for penalties of $ 498000 and interest of $ 1.8 million .
the company is subject to taxation in the u.s .
and various states and foreign jurisdictions .
the company 2019s 2005 through 2008 tax years are open to examination by the internal revenue service .
the 2005 and 2006 federal returns are currently under examination .
the company also has various foreign subsidiaries with tax filings under examination , as well as numerous foreign and state tax filings subject to examination for various years .
10 .
pension and profit-sharing plans the company has 401 ( k ) /profit-sharing plans for all qualifying full-time domestic employees that permit participants to make contributions by salary reduction pursuant to section 401 ( k ) of the internal revenue code .
the company makes matching contributions on behalf of each eligible participant in an amount equal to 100% ( 100 % ) of the first 3% ( 3 % ) and an additional 25% ( 25 % ) of the next 5% ( 5 % ) , for a maximum total of 4.25% ( 4.25 % ) of the employee 2019s compensation .
the company may make a discretionary profit sharing contribution in the amount of 0% ( 0 % ) to 5% ( 5 % ) based on the participant 2019s eligible compensation , provided the employee is employed at the end of the year and has worked at least 1000 hours .
the qualifying domestic employees of the company 2019s ansoft subsidiary , acquired on july 31 , 2008 , also participate in a 401 ( k ) plan .
there is no matching employer contribution associated with this plan .
the company also maintains various defined contribution pension arrangements for its international employees .
expenses related to the company 2019s retirement programs were $ 3.7 million in 2008 , $ 4.7 million in 2007 and $ 4.1 million in 2006 .
11 .
non-compete and employment agreements employees of the company have signed agreements under which they have agreed not to disclose trade secrets or confidential information and , where legally permitted , that restrict engagement in or connection with any business that is competitive with the company anywhere in the world while employed by the company ( and


pension plan assets pension assets include public equities , government and corporate bonds , cash and cash equivalents , private real estate funds , private partnerships , hedge funds , and other assets .
plan assets are held in a master trust and overseen by the company's investment committee .
all assets are externally managed through a combination of active and passive strategies .
managers may only invest in the asset classes for which they have been appointed .
the investment committee is responsible for setting the policy that provides the framework for management of the plan assets .
the investment committee has set the minimum and maximum permitted values for each asset class in the company's pension plan master trust for the year ended december 31 , 2018 , as follows: .

u.s . equities          | range 15 | range - | range 36% ( 36 % )
----------------------- | -------- | ------- | ------------------
international equities  | 10       | -       | 29% ( 29 % )
fixed income securities | 25       | -       | 50% ( 50 % )
alternative investments | 10       | -       | 25% ( 25 % )

the general objectives of the company's pension asset strategy are to earn a rate of return over time to satisfy the benefit obligations of the plans , meet minimum erisa funding requirements , and maintain sufficient liquidity to pay benefits and address other cash requirements within the master trust .
specific investment objectives include reducing the volatility of pension assets relative to benefit obligations , achieving a competitive , total investment return , achieving diversification between and within asset classes , and managing other risks .
investment objectives for each asset class are determined based on specific risks and investment opportunities identified .
decisions regarding investment policies and asset allocation are made with the understanding of the historical and prospective return and risk characteristics of various asset classes , the effect of asset allocations on funded status , future company contributions , and projected expenditures , including benefits .
the company updates its asset allocations periodically .
the company uses various analytics to determine the optimal asset mix and considers plan obligation characteristics , duration , liquidity characteristics , funding requirements , expected rates of return , regular rebalancing , and the distribution of returns .
actual allocations to each asset class could vary from target allocations due to periodic investment strategy changes , short-term market value fluctuations , the length of time it takes to fully implement investment allocation positions , such as real estate and other alternative investments , and the timing of benefit payments and company contributions .
taking into account the asset allocation ranges , the company determines the specific allocation of the master trust's investments within various asset classes .
the master trust utilizes select investment strategies , which are executed through separate account or fund structures with external investment managers who demonstrate experience and expertise in the appropriate asset classes and styles .
the selection of investment managers is done with careful evaluation of all aspects of performance and risk , demonstrated fiduciary responsibility , investment management experience , and a review of the investment managers' policies and processes .
investment performance is monitored frequently against appropriate benchmarks and tracked to compliance guidelines with the assistance of third party consultants and performance evaluation tools and metrics .
plan assets are stated at fair value .
the company employs a variety of pricing sources to estimate the fair value of its pension plan assets , including independent pricing vendors , dealer or counterparty-supplied valuations , third- party appraisals , and appraisals prepared by the company's investment managers or other experts .
investments in equity securities , common and preferred , are valued at the last reported sales price when an active market exists .
securities for which official or last trade pricing on an active exchange is available are classified as level 1 .
if closing prices are not available , securities are valued at the last trade price , if deemed reasonable , or a broker's quote in a non-active market , and are typically categorized as level 2 .
investments in fixed-income securities are generally valued by independent pricing services or dealers who make markets in such securities .
pricing methods are based upon market transactions for comparable securities and various relationships between securities that are generally recognized by institutional traders , and fixed-income securities typically are categorized as level 2.


during fiscal 2013 , we entered into an asr with a financial institution to repurchase an aggregate of $ 125 million of our common stock .
in exchange for an up-front payment of $ 125 million , the financial institution committed to deliver a number of shares during the asr 2019s purchase period , which ended on march 30 , 2013 .
the total number of shares delivered under this asr was 2.5 million at an average price of $ 49.13 per share .
during fiscal 2013 , in addition to shares repurchased under the asr , we repurchased and retired 1.1 million shares of our common stock at a cost of $ 50.3 million , or an average of $ 44.55 per share , including commissions .
note 10 2014share-based awards and options non-qualified stock options and restricted stock have been granted to officers , key employees and directors under the global payments inc .
2000 long-term incentive plan , as amended and restated ( the 201c2000 plan 201d ) , the global payments inc .
amended and restated 2005 incentive plan ( the 201c2005 plan 201d ) , the amended and restated 2000 non-employee director stock option plan ( the 201cdirector stock option plan 201d ) , and the global payments inc .
2011 incentive plan ( the 201c2011 plan 201d ) ( collectively , the 201cplans 201d ) .
there were no further grants made under the 2000 plan after the 2005 plan was effective , and the director stock option plan expired by its terms on february 1 , 2011 .
there will be no future grants under the 2000 plan , the 2005 plan or the director stock option the 2011 plan permits grants of equity to employees , officers , directors and consultants .
a total of 7.0 million shares of our common stock was reserved and made available for issuance pursuant to awards granted under the 2011 plan .
the following table summarizes share-based compensation expense and the related income tax benefit recognized for stock options , restricted stock , performance units , tsr units , and shares issued under our employee stock purchase plan ( each as described below ) .
2015 2014 2013 ( in millions ) .

                                 | 2015           | 2014 ( in millions ) | 2013
-------------------------------- | -------------- | -------------------- | --------------
share-based compensation expense | $ 21.1         | $ 29.8               | $ 18.4
income tax benefit               | $ -6.9 ( 6.9 ) | $ -7.1 ( 7.1 )       | $ -5.6 ( 5.6 )

we grant various share-based awards pursuant to the plans under what we refer to as our 201clong-term incentive plan . 201d the awards are held in escrow and released upon the grantee 2019s satisfaction of conditions of the award certificate .
restricted stock and restricted stock units we grant restricted stock and restricted stock units .
restricted stock awards vest over a period of time , provided , however , that if the grantee is not employed by us on the vesting date , the shares are forfeited .
restricted shares cannot be sold or transferred until they have vested .
restricted stock granted before fiscal 2015 vests in equal installments on each of the first four anniversaries of the grant date .
restricted stock granted during fiscal 2015 will either vest in equal installments on each of the first three anniversaries of the grant date or cliff vest at the end of a three-year service period .
the grant date fair value of restricted stock , which is based on the quoted market value of our common stock at the closing of the award date , is recognized as share-based compensation expense on a straight-line basis over the vesting period .
performance units certain of our executives have been granted up to three types of performance units under our long-term incentive plan .
performance units are performance-based restricted stock units that , after a performance period , convert into common shares , which may be restricted .
the number of shares is dependent upon the achievement of certain performance measures during the performance period .
the target number of performance units and any market-based performance measures ( 201cat threshold , 201d 201ctarget , 201d and 201cmaximum 201d ) are set by the compensation committee of our board of directors .
performance units are converted only after the compensation committee certifies performance based on pre-established goals .
80 2013 global payments inc .
| 2015 form 10-k annual report


in september 2015 , the company entered into treasury lock hedges with a total notional amount of $ 1.0 billion , reducing the risk of changes in the benchmark index component of the 10-year treasury yield .
the company designated these derivatives as cash flow hedges .
on october 13 , 2015 , in conjunction with the pricing of the $ 4.5 billion senior notes , the company terminated these treasury lock contracts for a cash settlement payment of $ 16 million , which was recorded as a component of other comprehensive earnings and will be reclassified as an adjustment to interest expense over the ten years during which the related interest payments that were hedged will be recognized in income .
foreign currency risk we are exposed to foreign currency risks that arise from normal business operations .
these risks include the translation of local currency balances of foreign subsidiaries , transaction gains and losses associated with intercompany loans with foreign subsidiaries and transactions denominated in currencies other than a location's functional currency .
we manage the exposure to these risks through a combination of normal operating activities and the use of foreign currency forward contracts and non- derivative investment hedges .
contracts are denominated in currencies of major industrial countries .
our exposure to foreign currency exchange risks generally arises from our non-u.s .
operations , to the extent they are conducted in local currency .
changes in foreign currency exchange rates affect translations of revenues denominated in currencies other than the u.s .
dollar .
during the years ended december 31 , 2017 , 2016 and 2015 , we generated approximately $ 1830 million , $ 1909 million and $ 1336 million , respectively , in revenues denominated in currencies other than the u.s .
dollar .
the major currencies to which our revenues are exposed are the brazilian real , the euro , the british pound sterling and the indian rupee .
a 10% ( 10 % ) move in average exchange rates for these currencies ( assuming a simultaneous and immediate 10% ( 10 % ) change in all of such rates for the relevant period ) would have resulted in the following increase or ( decrease ) in our reported revenues for the years ended december 31 , 2017 , 2016 and 2015 ( in millions ) : .

currency                   | 2017  | 2016  | 2015
-------------------------- | ----- | ----- | -----
pound sterling             | $ 42  | $ 47  | $ 34
euro                       | 35    | 38    | 33
real                       | 39    | 32    | 29
indian rupee               | 14    | 12    | 10
total increase or decrease | $ 130 | $ 129 | $ 106

while our results of operations have been impacted by the effects of currency fluctuations , our international operations' revenues and expenses are generally denominated in local currency , which reduces our economic exposure to foreign exchange risk in those jurisdictions .
revenues included $ 16 million favorable and $ 100 million unfavorable and net earnings included $ 2 million favorable and $ 10 million unfavorable , respectively , of foreign currency impact during 2017 and 2016 resulting from changes in the u.s .
dollar during these years compared to the preceding year .
in 2018 , we expect minimal foreign currency impact on our earnings .
our foreign exchange risk management policy permits the use of derivative instruments , such as forward contracts and options , to reduce volatility in our results of operations and/or cash flows resulting from foreign exchange rate fluctuations .
we do not enter into foreign currency derivative instruments for trading purposes or to engage in speculative activity .
we do periodically enter into foreign currency forward exchange contracts to hedge foreign currency exposure to intercompany loans .
we did not have any of these derivatives as of december 31 , 2017 .
the company also utilizes non-derivative net investment hedges in order to reduce the volatility in the income statement caused by the changes in foreign currency exchange rates ( see note 11 of the notes to consolidated financial statements ) .


interest payments increased in 2015 primarily due to a higher level of debt outstanding .
interest payments remained relatively flat in 2014 .
the increase in income tax payments in 2015 was primarily due to higher taxable income from operations offset by the timing of certain tax deductions .
the decrease in income tax payments in 2014 was primarily due to the settlement of tax disputes and the repatriation of foreign earnings in 2013 .
the decrease was partially offset by higher taxable income from operations and the net impact of the economic stimulus legis- lation in 2014 .
we expect income tax payments to increase in 2016 primarily due to higher taxable income from operations .
investing activities net cash used in investing activities in 2015 consisted primarily of cash paid for capital expenditures , intangible assets , acquisitions and the purchases of investments , which was partially offset by proceeds from the sales of businesses and investments .
net cash used in investing activities in 2014 consisted primarily of cash paid for capital expenditures and intangible assets .
net cash used in investing activities in 2013 con- sisted primarily of cash paid for capital expenditures , acquisitions and construction of real estate properties , purchases of investments , and cash paid for intangible assets .
capital expenditures our most significant recurring investing activity has been capital expenditures in our cable communications segment , and we expect that this will continue in the future .
the table below summarizes the capital expenditures we incurred in our cable communications segment in 2015 , 2014 and 2013. .

year ended december 31 ( in millions ) | 2015   | 2014   | 2013
-------------------------------------- | ------ | ------ | ------
cable distribution system              | $ 2424 | $ 2047 | $ 1819
customer premise equipment             | 3698   | 3397   | 2990
other equipment                        | 756    | 613    | 527
buildings and building improvements    | 156    | 97     | 67
total                                  | $ 7034 | $ 6154 | $ 5403

cable communications capital expenditures increased in 2015 and 2014 primarily due to increased spending on customer premise equipment related to our x1 platform and wireless gateways , our continued investment in network infrastructure to increase network capacity , increased investment in support capital as we expand our cloud-based initiatives , and our continued investment to expand business services .
capital expenditures in our nbcuniversal segments increased 13.5% ( 13.5 % ) to $ 1.4 billion in 2015 and 5.3% ( 5.3 % ) to $ 1.2 billion in 2014 primarily due to continued investment in our universal theme parks , including a purchase of land in 2015 .
our capital expenditures for 2016 are focused on the continued deployment of our x1 platform and cloud dvr technology , acceleration of wireless gateways , network infrastructure to increase network capacity , and the expansion of business services .
capital expenditures for subsequent years will depend on numerous factors , including acquisitions , competition , changes in technology , regulatory changes , the timing and rate of deployment of new services , and the capacity required for existing services .
in addition , we expect to con- tinue to invest in existing and new attractions at our universal theme parks .
we are developing a universal theme park in beijing , china .
we expect the development of this park to continue in 2016 .
cash paid for intangible assets in 2015 , 2014 and 2013 , cash paid for intangible assets consisted primarily of expenditures for software .
comcast 2015 annual report on form 10-k 64


aon has certain contractual contingent guarantees for premium payments owed by clients to certain insurance companies .
the maximum exposure with respect to such contractual contingent guarantees was approximately $ 48 million at december 31 , 2011 .
aon has provided commitments to fund certain limited partnerships in which it has an interest in the event that the general partners request funding .
some of these commitments have specific expiration dates and the maximum potential funding under these commitments was $ 64 million at december 31 , 2011 .
during 2011 , the company funded $ 15 million of these commitments .
aon expects that as prudent business interests dictate , additional guarantees and indemnifications may be issued from time to time .
17 .
related party transactions during 2011 , the company , in the ordinary course of business , provided retail brokerage , consulting and financial advisory services to , and received wholesale brokerage services from , an entity that is controlled by one of the company 2019s stockholders .
these transactions were negotiated at an arms-length basis and contain customary terms and conditions .
during 2011 , commissions and fee revenue from these transactions was approximately $ 9 million .
18 .
segment information the company has two reportable operating segments : risk solutions and hr solutions .
unallocated income and expenses , when combined with the operating segments and after the elimination of intersegment revenues and expenses , total to the amounts in the consolidated financial statements .
reportable operating segments have been determined using a management approach , which is consistent with the basis and manner in which aon 2019s chief operating decision maker ( 2018 2018codm 2019 2019 ) uses financial information for the purposes of allocating resources and assessing performance .
the codm assesses performance based on operating segment operating income and generally accounts for intersegment revenue as if the revenue were from third parties and at what management believes are current market prices .
the company does not present net assets by segment as this information is not reviewed by the codm .
risk solutions acts as an advisor and insurance and reinsurance broker , helping clients manage their risks , via consultation , as well as negotiation and placement of insurance risk with insurance carriers through aon 2019s global distribution network .
hr solutions partners with organizations to solve their most complex benefits , talent and related financial challenges , and improve business performance by designing , implementing , communicating and administering a wide range of human capital , retirement , investment management , health care , compensation and talent management strategies .
aon 2019s total revenue is as follows ( in millions ) : .

years ended december 31  | 2011       | 2010       | 2009
------------------------ | ---------- | ---------- | ----------
risk solutions           | $ 6817     | $ 6423     | $ 6305
hr solutions             | 4501       | 2111       | 1267
intersegment elimination | -31 ( 31 ) | -22 ( 22 ) | -26 ( 26 )
total operating segments | 11287      | 8512       | 7546
unallocated              | 2014       | 2014       | 49
total revenue            | $ 11287    | $ 8512     | $ 7595


shareholder return performance the line graph below compares the annual percentage change in ball corporation fffds cumulative total shareholder return on its common stock with the cumulative total return of the dow jones containers & packaging index and the s&p composite 500 stock index for the five-year period ended december 31 , 2012 .
it assumes $ 100 was invested on december 31 , 2007 , and that all dividends were reinvested .
the dow jones containers & packaging index total return has been weighted by market capitalization .
total return to stockholders ( assumes $ 100 investment on 12/31/07 ) total return analysis .

                             | 12/31/2007 | 12/31/2008 | 12/31/2009 | 12/31/2010 | 12/31/2011 | 12/31/2012
---------------------------- | ---------- | ---------- | ---------- | ---------- | ---------- | ----------
ball corporation             | $ 100.00   | $ 93.28    | $ 117.01   | $ 155.14   | $ 164.09   | $ 207.62
dj us containers & packaging | $ 100.00   | $ 61.55    | $ 84.76    | $ 97.78    | $ 96.27    | $ 107.76
s&p 500                      | $ 100.00   | $ 61.51    | $ 75.94    | $ 85.65    | $ 85.65    | $ 97.13

source : bloomberg l.p .
aecharts


notes to the consolidated financial statements union pacific corporation and subsidiary companies for purposes of this report , unless the context otherwise requires , all references herein to the 201ccorporation 201d , 201cupc 201d , 201cwe 201d , 201cus 201d , and 201cour 201d mean union pacific corporation and its subsidiaries , including union pacific railroad company , which will be separately referred to herein as 201cuprr 201d or the 201crailroad 201d .
1 .
nature of operations operations and segmentation 2013 we are a class i railroad that operates in the united states .
we have 32094 route miles , linking pacific coast and gulf coast ports with the midwest and eastern united states gateways and providing several corridors to key mexican gateways .
we serve the western two- thirds of the country and maintain coordinated schedules with other rail carriers for the handling of freight to and from the atlantic coast , the pacific coast , the southeast , the southwest , canada , and mexico .
export and import traffic is moved through gulf coast and pacific coast ports and across the mexican and canadian borders .
the railroad , along with its subsidiaries and rail affiliates , is our one reportable operating segment .
although revenues are analyzed by commodity group , we analyze the net financial results of the railroad as one segment due to the integrated nature of our rail network .
the following table provides revenue by commodity group : millions of dollars 2009 2008 2007 .

millions of dollars      | 2009    | 2008    | 2007
------------------------ | ------- | ------- | -------
agricultural             | $ 2666  | $ 3174  | $ 2605
automotive               | 854     | 1344    | 1458
chemicals                | 2102    | 2494    | 2287
energy                   | 3118    | 3810    | 3134
industrial products      | 2147    | 3273    | 3077
intermodal               | 2486    | 3023    | 2925
total freight revenues   | $ 13373 | $ 17118 | $ 15486
other revenues           | 770     | 852     | 797
total operating revenues | $ 14143 | $ 17970 | $ 16283

although our revenues are principally derived from customers domiciled in the united states , the ultimate points of origination or destination for some products transported are outside the united states .
basis of presentation 2013 the consolidated financial statements are presented in accordance with accounting principles generally accepted in the united states of america ( gaap ) as codified in the financial accounting standards board ( fasb ) accounting standards codification ( asc ) .
subsequent events evaluation 2013 we evaluated the effects of all subsequent events through february 5 , 2010 , the date of this report , which is concurrent with the date we file this report with the u.s .
securities and exchange commission ( sec ) .
2 .
significant accounting policies change in accounting principle 2013 we have historically accounted for rail grinding costs as a capital asset .
beginning in the first quarter of 2010 , we will change our accounting policy for rail grinding costs


note 11 2013 stock-based compensation during 2014 , 2013 and 2012 , we recorded non-cash stock-based compensation expense totaling $ 164 million , $ 189 million and $ 167 million , which is included as a component of other unallocated , net on our statements of earnings .
the net impact to earnings for the respective years was $ 107 million , $ 122 million and $ 108 million .
as of december 31 , 2014 , we had $ 91 million of unrecognized compensation cost related to nonvested awards , which is expected to be recognized over a weighted average period of 1.6 years .
we received cash from the exercise of stock options totaling $ 308 million , $ 827 million and $ 440 million during 2014 , 2013 and 2012 .
in addition , our income tax liabilities for 2014 , 2013 and 2012 were reduced by $ 215 million , $ 158 million , $ 96 million due to recognized tax benefits on stock-based compensation arrangements .
stock-based compensation plans under plans approved by our stockholders , we are authorized to grant key employees stock-based incentive awards , including options to purchase common stock , stock appreciation rights , restricted stock units ( rsus ) , performance stock units ( psus ) or other stock units .
the exercise price of options to purchase common stock may not be less than the fair market value of our stock on the date of grant .
no award of stock options may become fully vested prior to the third anniversary of the grant and no portion of a stock option grant may become vested in less than one year .
the minimum vesting period for restricted stock or stock units payable in stock is three years .
award agreements may provide for shorter or pro-rated vesting periods or vesting following termination of employment in the case of death , disability , divestiture , retirement , change of control or layoff .
the maximum term of a stock option or any other award is 10 years .
at december 31 , 2014 , inclusive of the shares reserved for outstanding stock options , rsus and psus , we had 19 million shares reserved for issuance under the plans .
at december 31 , 2014 , 7.8 million of the shares reserved for issuance remained available for grant under our stock-based compensation plans .
we issue new shares upon the exercise of stock options or when restrictions on rsus and psus have been satisfied .
the following table summarizes activity related to nonvested rsus during 2014 : number of rsus ( in thousands ) weighted average grant-date fair value per share .

                              | number of rsus ( in thousands ) | weighted average grant-date fair value pershare
----------------------------- | ------------------------------- | -----------------------------------------------
nonvested at december 31 2011 | 4302                            | $ 78.25
granted                       | 1987                            | 81.93
vested                        | -1299 ( 1299 )                  | 80.64
forfeited                     | -168 ( 168 )                    | 79.03
nonvested at december 31 2012 | 4822                            | $ 79.10
granted                       | 1356                            | 89.24
vested                        | -2093 ( 2093 )                  | 79.26
forfeited                     | -226 ( 226 )                    | 81.74
nonvested at december 31 2013 | 3859                            | $ 82.42
granted                       | 745                             | 146.85
vested                        | -2194 ( 2194 )                  | 87.66
forfeited                     | -84 ( 84 )                      | 91.11
nonvested at december 31 2014 | 2326                            | $ 97.80

rsus are valued based on the fair value of our common stock on the date of grant .
employees who are granted rsus receive the right to receive shares of stock after completion of the vesting period ; however , the shares are not issued and the employees cannot sell or transfer shares prior to vesting and have no voting rights until the rsus vest , generally three years from the date of the award .
employees who are granted rsus receive dividend-equivalent cash payments only upon vesting .
for these rsu awards , the grant-date fair value is equal to the closing market price of our common stock on the date of grant less a discount to reflect the delay in payment of dividend-equivalent cash payments .
we recognize the grant-date fair value of rsus , less estimated forfeitures , as compensation expense ratably over the requisite service period , which beginning with the rsus granted in 2013 is shorter than the vesting period if the employee is retirement eligible on the date of grant or will become retirement eligible before the end of the vesting period.


abiomed , inc .
and subsidiaries notes to consolidated financial statements 2014 ( continued ) note 8 .
goodwill and in-process research and development ( continued ) the company has no accumulated impairment losses on goodwill .
the company performed a step 0 qualitative assessment during the annual impairment review for fiscal 2015 as of october 31 , 2014 and concluded that it is not more likely than not that the fair value of the company 2019s single reporting unit is less than its carrying amount .
therefore , the two-step goodwill impairment test for the reporting unit was not necessary in fiscal 2015 .
as described in note 3 .
201cacquisitions , 201d in july 2014 , the company acquired ecp and ais and recorded $ 18.5 million of ipr&d .
the estimated fair value of the ipr&d was determined using a probability-weighted income approach , which discounts expected future cash flows to present value .
the projected cash flows from the expandable catheter pump technology were based on certain key assumptions , including estimates of future revenue and expenses , taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development .
the company used a discount rate of 22.5% ( 22.5 % ) and cash flows that have been probability adjusted to reflect the risks of product commercialization , which the company believes are appropriate and representative of market participant assumptions .
the carrying value of the company 2019s ipr&d assets and the change in the balance for the year ended march 31 , 2015 is as follows : march 31 , ( in $ 000 2019s ) .

                                    | march 31 2015 ( in $ 000 2019s )
----------------------------------- | --------------------------------
beginning balance                   | $ 2014
additions                           | 18500
foreign currency translation impact | -3789 ( 3789 )
ending balance                      | $ 14711

note 9 .
stockholders 2019 equity class b preferred stock the company has authorized 1000000 shares of class b preferred stock , $ .01 par value , of which the board of directors can set the designation , rights and privileges .
no shares of class b preferred stock have been issued or are outstanding .
stock repurchase program in november 2012 , the company 2019s board of directors authorized a stock repurchase program for up to $ 15.0 million of its common stock .
the company financed the stock repurchase program with its available cash .
during the year ended march 31 , 2013 , the company repurchased 1123587 shares for $ 15.0 million in open market purchases at an average cost of $ 13.39 per share , including commission expense .
the company completed the purchase of common stock under this stock repurchase program in january 2013 .
note 10 .
stock award plans and stock-based compensation stock award plans the company grants stock options and restricted stock awards to employees and others .
all outstanding stock options of the company as of march 31 , 2015 were granted with an exercise price equal to the fair market value on the date of grant .
outstanding stock options , if not exercised , expire 10 years from the date of grant .
the company 2019s 2008 stock incentive plan ( the 201cplan 201d ) authorizes the grant of a variety of equity awards to the company 2019s officers , directors , employees , consultants and advisers , including awards of unrestricted and restricted stock , restricted stock units , incentive and nonqualified stock options to purchase shares of common stock , performance share awards and stock appreciation rights .
the plan provides that options may only be granted at the current market value on the date of grant .
each share of stock issued pursuant to a stock option or stock appreciation right counts as one share against the maximum number of shares issuable under the plan , while each share of stock issued


reasonably possible that such matters will be resolved in the next twelve months , but we do not anticipate that the resolution of these matters would result in any material impact on our results of operations or financial position .
foreign jurisdictions have statutes of limitations generally ranging from 3 to 5 years .
years still open to examination by foreign tax authorities in major jurisdictions include australia ( 2003 onward ) , canada ( 2002 onward ) , france ( 2006 onward ) , germany ( 2005 onward ) , italy ( 2005 onward ) , japan ( 2002 onward ) , puerto rico ( 2005 onward ) , singapore ( 2003 onward ) , switzerland ( 2006 onward ) and the united kingdom ( 2006 onward ) .
our tax returns are currently under examination in various foreign jurisdictions .
the most significant foreign tax jurisdiction under examination is the united kingdom .
it is reasonably possible that such audits will be resolved in the next twelve months , but we do not anticipate that the resolution of these audits would result in any material impact on our results of operations or financial position .
13 .
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 , 2008 .
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 ) : .

                                                                       | 2008  | 2007  | 2006
---------------------------------------------------------------------- | ----- | ----- | -----
weighted average shares outstanding for basic net earnings per share   | 227.3 | 235.5 | 243.0
effect of dilutive stock options and other equity awards               | 1.0   | 2.0   | 2.4
weighted average shares outstanding for diluted net earnings per share | 228.3 | 237.5 | 245.4

weighted average shares outstanding for basic net earnings per share 227.3 235.5 243.0 effect of dilutive stock options and other equity awards 1.0 2.0 2.4 weighted average shares outstanding for diluted net earnings per share 228.3 237.5 245.4 for the year ended december 31 , 2008 , an average of 11.2 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 , 2007 and 2006 , an average of 3.1 million and 7.6 million options , respectively , were not included .
during 2008 , we repurchased approximately 10.8 million shares of our common stock at an average price of $ 68.72 per share for a total cash outlay of $ 737.0 million , including commissions .
in april 2008 , we announced that our board of directors authorized a $ 1.25 billion share repurchase program which expires december 31 , 2009 .
approximately $ 1.13 billion remains authorized under this plan .
14 .
segment data we design , develop , manufacture and market orthopaedic and dental reconstructive implants , spinal implants , trauma products and related surgical products which include surgical supplies and instruments designed to aid in orthopaedic 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 operating 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 and other expenses , 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 8 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 : c48761 pcn : 058000000 ***%%pcmsg|58 |00011|yes|no|02/24/2009 19:25|0|0|page is valid , no graphics -- color : d|


fleet automation approximately 66% ( 66 % ) of our residential routes have been converted to automated single driver trucks .
by converting our residential routes to automated service , we reduce labor costs , improve driver productivity and create a safer work environment for our employees .
additionally , communities using automated vehicles have higher participation rates in recycling programs , thereby complementing our initiative to expand our recycling capabilities .
fleet conversion to compressed natural gas ( cng ) approximately 12% ( 12 % ) of our fleet operates on natural gas .
we expect to continue our gradual fleet conversion to cng , our preferred alternative fuel technology , as part of our ordinary annual fleet replacement process .
we believe a gradual fleet conversion is most prudent to realize the full value of our previous fleet investments .
approximately 50% ( 50 % ) of our replacement vehicle purchases during 2013 were cng vehicles .
we believe using cng vehicles provides us a competitive advantage in communities with strict clean emission objectives or initiatives that focus on protecting the environment .
although upfront costs are higher , we expect that using natural gas will reduce our overall fleet operating costs through lower fuel expenses .
standardized maintenance based on an industry trade publication , we operate the eighth largest vocational fleet in the united states .
as of december 31 , 2013 , our average fleet age in years , by line of business , was as follows : approximate number of vehicles average age .

            | approximate number of vehicles | average age
----------- | ------------------------------ | -----------
residential | 7600                           | 7
commercial  | 4300                           | 6
industrial  | 3600                           | 9
total       | 15500                          | 7

through standardization of core functions , we believe we can minimize variability in our maintenance processes resulting in higher vehicle quality while extending the service life of our fleet .
we believe operating a more reliable , safer and efficient fleet will lower our operating costs .
we have completed implementation of standardized maintenance programs for approximately 45% ( 45 % ) of our fleet maintenance operations as of december 31 , 2013 .
cash utilization strategy key components of our cash utilization strategy include increasing free cash flow and improving our return on invested capital .
our definition of free cash flow , which is not a measure determined in accordance with united states generally accepted accounting principles ( u.s .
gaap ) , is cash provided by operating activities less purchases of property and equipment , plus proceeds from sales of property and equipment as presented in our consolidated statements of cash flows .
for a discussion and reconciliation of free cash flow , you should read the 201cfree cash flow 201d section of our management 2019s discussion and analysis of financial condition and results of operations contained in item 7 of this form 10-k .
we believe free cash flow drives shareholder value and provides useful information regarding the recurring cash provided by our operations .
free cash flow also demonstrates our ability to execute our cash utilization strategy , which includes investments in acquisitions and returning a majority of free cash flow to our shareholders through dividends and share repurchases .
we are committed to an efficient capital structure and maintaining our investment grade rating .
we manage our free cash flow by ensuring that capital expenditures and operating asset levels are appropriate in light of our existing business and growth opportunities , as well as by closely managing our working capital , which consists primarily of accounts receivable , accounts payable , and accrued landfill and environmental costs.


stock price performance the following graph shows a comparison of the cumulative total return on our common stock , the standard & poor's 500 index and the standard & poor's 500 retail index .
the graph assumes that the value of an investment in our common stock and in each such index was $ 100 on december 30 , 2006 , and that any dividends have been reinvested .
the comparison in the graph below is based solely on historical data and is not intended to forecast the possible future performance of our common stock .
comparison of cumulative total return among advance auto parts , inc. , s&p 500 index and s&p 500 retail index company/index advance auto parts s&p 500 index s&p retail index december 30 , $ 100.00 100.00 100.00 december 29 , $ 108.00 104.24 january 3 , $ 97.26 january 2 , $ 116.01 january 1 , $ 190.41 101.84 december 31 , $ 201.18 104.81 .

company/index      | december 30 2006 | december 29 2007 | january 3 2009 | january 2 2010 | january 1 2011 | december 31 2011
------------------ | ---------------- | ---------------- | -------------- | -------------- | -------------- | ----------------
advance auto parts | $ 100.00         | $ 108.00         | $ 97.26        | $ 116.01       | $ 190.41       | $ 201.18
s&p 500 index      | 100.00           | 104.24           | 65.70          | 78.62          | 88.67          | 88.67
s&p retail index   | 100.00           | 82.15            | 58.29          | 82.36          | 101.84         | 104.81

stock price performance the following graph shows a comparison of the cumulative total return on our common stock , the standard & poor's 500 index and the standard & poor's 500 retail index .
the graph assumes that the value of an investment in our common stock and in each such index was $ 100 on december 30 , 2006 , and that any dividends have been reinvested .
the comparison in the graph below is based solely on historical data and is not intended to forecast the possible future performance of our common stock .
comparison of cumulative total return among advance auto parts , inc. , s&p 500 index and s&p 500 retail index company/index advance auto parts s&p 500 index s&p retail index december 30 , $ 100.00 100.00 100.00 december 29 , $ 108.00 104.24 january 3 , $ 97.26 january 2 , $ 116.01 january 1 , $ 190.41 101.84 december 31 , $ 201.18 104.81


entergy corporation and subsidiaries management 2019s financial discussion and analysis a result of the entergy louisiana and entergy gulf states louisiana business combination , results of operations for 2015 also include two items that occurred in october 2015 : 1 ) a deferred tax asset and resulting net increase in tax basis of approximately $ 334 million and 2 ) a regulatory liability of $ 107 million ( $ 66 million net-of-tax ) as a result of customer credits to be realized by electric customers of entergy louisiana , consistent with the terms of the stipulated settlement in the business combination proceeding .
see note 2 to the financial statements for further discussion of the business combination and customer credits .
results of operations for 2015 also include the sale in december 2015 of the 583 mw rhode island state energy center for a realized gain of $ 154 million ( $ 100 million net-of-tax ) on the sale and the $ 77 million ( $ 47 million net-of-tax ) write-off and regulatory charges to recognize that a portion of the assets associated with the waterford 3 replacement steam generator project is no longer probable of recovery .
see note 14 to the financial statements for further discussion of the rhode island state energy center sale .
see note 2 to the financial statements for further discussion of the waterford 3 write-off .
results of operations for 2014 include $ 154 million ( $ 100 million net-of-tax ) of charges related to vermont yankee primarily resulting from the effects of an updated decommissioning cost study completed in the third quarter 2014 along with reassessment of the assumptions regarding the timing of decommissioning cash flows and severance and employee retention costs .
see note 14 to the financial statements for further discussion of the charges .
results of operations for 2014 also include the $ 56.2 million ( $ 36.7 million net-of-tax ) write-off in 2014 of entergy mississippi 2019s regulatory asset associated with new nuclear generation development costs as a result of a joint stipulation entered into with the mississippi public utilities staff , subsequently approved by the mpsc , in which entergy mississippi agreed not to pursue recovery of the costs deferred by an mpsc order in the new nuclear generation docket .
see note 2 to the financial statements for further discussion of the new nuclear generation development costs and the joint stipulation .
net revenue utility following is an analysis of the change in net revenue comparing 2015 to 2014 .
amount ( in millions ) .

                                                  | amount ( in millions )
------------------------------------------------- | ----------------------
2014 net revenue                                  | $ 5735
retail electric price                             | 187
volume/weather                                    | 95
waterford 3 replacement steam generator provision | -32 ( 32 )
miso deferral                                     | -35 ( 35 )
louisiana business combination customer credits   | -107 ( 107 )
other                                             | -14 ( 14 )
2015 net revenue                                  | $ 5829

the retail electric price variance is primarily due to : 2022 formula rate plan increases at entergy louisiana , as approved by the lpsc , effective december 2014 and january 2015 ; 2022 an increase in energy efficiency rider revenue primarily due to increases in the energy efficiency rider at entergy arkansas , as approved by the apsc , effective july 2015 and july 2014 , and new energy efficiency riders at entergy louisiana and entergy mississippi that began in the fourth quarter 2014 ; and 2022 an annual net rate increase at entergy mississippi of $ 16 million , effective february 2015 , as a result of the mpsc order in the june 2014 rate case .
see note 2 to the financial statements for a discussion of rate and regulatory proceedings.


acquired is represented by allied 2019s infrastructure of market-based collection routes and its related integrated waste transfer and disposal channels , whose value has been included in goodwill .
all of the goodwill and other intangible assets resulting from the allied acquisition are not deductible for income tax purposes .
pro forma information the consolidated financial statements presented for republic include the operating results of allied from december 5 , 2008 , the date of the acquisition .
the following pro forma information is presented assuming the acquisition had been completed as of january 1 , 2008 .
the unaudited pro forma information presented has been prepared for illustrative purposes and is not intended to be indicative of the results of operations that would have actually occurred had the acquisition been consummated at the beginning of the periods presented or of future results of the combined operations .
furthermore , the pro forma results do not give effect to all cost savings or incremental costs that occur as a result of the integration and consolidation of the acquisition ( in millions , except share and per share amounts ) .
year ended december 31 , ( unaudited ) .

                           | year ended december 31 2008 ( unaudited )
-------------------------- | -----------------------------------------
revenue                    | $ 9362.2
net income                 | 285.7
basic earnings per share   | 0.76
diluted earnings per share | 0.75

the unaudited pro forma financial information includes adjustments for amortization of identifiable intangible assets , accretion of discounts to fair value associated with debt , environmental , self-insurance and other liabilities , accretion of capping , closure and post-closure obligations and amortization of the related assets , and provision for income taxes .
restructuring charges as a result of the 2008 allied acquisition , we committed to a restructuring plan related to our corporate overhead and other administrative and operating functions .
the plan included closing our corporate office in florida , consolidating administrative functions to arizona , the former headquarters of allied , and reducing staffing levels .
the plan also included closing and consolidating certain operating locations and terminating certain leases .
during the years ended december 31 , 2010 and 2009 , we incurred $ 11.4 million , net of adjustments , and $ 63.2 million , respectively , of restructuring and integration charges related to our integration of allied .
these charges and adjustments primarily related to severance and other employee termination and relocation benefits and consulting and professional fees .
substantially all the charges are recorded in our corporate segment .
we do not expect to incur additional charges to complete our plan .
we expect that the remaining charges will be paid during 2011 .
republic services , inc .
notes to consolidated financial statements , continued


entergy corporation and subsidiaries management 2019s financial discussion and analysis net revenue utility following is an analysis of the change in net revenue comparing 2014 to 2013 .
amount ( in millions ) .

                            | amount ( in millions )
--------------------------- | ----------------------
2013 net revenue            | $ 5524
retail electric price       | 135
asset retirement obligation | 56
volume/weather              | 36
miso deferral               | 16
net wholesale revenue       | -29 ( 29 )
other                       | -3 ( 3 )
2014 net revenue            | $ 5735

the retail electric price variance is primarily due to : 2022 increases in the energy efficiency rider at entergy arkansas , as approved by the apsc , effective july 2013 and july 2014 .
energy efficiency revenues are offset by costs included in other operation and maintenance expenses and have minimal effect on net income ; 2022 the effect of the apsc 2019s order in entergy arkansas 2019s 2013 rate case , including an annual base rate increase effective january 2014 offset by a miso rider to provide customers credits in rates for transmission revenue received through miso ; 2022 a formula rate plan increase at entergy mississippi , as approved by the mspc , effective september 2013 ; 2022 an increase in entergy mississippi 2019s storm damage rider , as approved by the mpsc , effective october 2013 .
the increase in the storm damage rider is offset by other operation and maintenance expenses and has no effect on net income ; 2022 an annual base rate increase at entergy texas , effective april 2014 , as a result of the puct 2019s order in the september 2013 rate case ; and 2022 a formula rate plan increase at entergy louisiana , as approved by the lpsc , effective december 2014 .
see note 2 to the financial statements for a discussion of rate proceedings .
the asset retirement obligation affects net revenue because entergy records a regulatory debit or credit for the difference between asset retirement obligation-related expenses and trust earnings plus asset retirement obligation- related costs collected in revenue .
the variance is primarily caused by increases in regulatory credits because of decreases in decommissioning trust earnings and increases in depreciation and accretion expenses and increases in regulatory credits to realign the asset retirement obligation regulatory assets with regulatory treatment .
the volume/weather variance is primarily due to an increase of 3129 gwh , or 3% ( 3 % ) , in billed electricity usage primarily due to an increase in sales to industrial customers and the effect of more favorable weather on residential sales .
the increase in industrial sales was primarily due to expansions , recovery of a major refining customer from an unplanned outage in 2013 , and continued moderate growth in the manufacturing sector .
the miso deferral variance is primarily due to the deferral in 2014 of the non-fuel miso-related charges , as approved by the lpsc and the mpsc , partially offset by the deferral in april 2013 , as approved by the apsc , of costs incurred from march 2010 through december 2012 related to the transition and implementation of joining the miso


12 .
brokerage receivables and brokerage payables the company has receivables and payables for financial instruments sold to and purchased from brokers , dealers and customers , which arise in the ordinary course of business .
citi is exposed to risk of loss from the inability of brokers , dealers or customers to pay for purchases or to deliver the financial instruments sold , in which case citi would have to sell or purchase the financial instruments at prevailing market prices .
credit risk is reduced to the extent that an exchange or clearing organization acts as a counterparty to the transaction and replaces the broker , dealer or customer in question .
citi seeks to protect itself from the risks associated with customer activities by requiring customers to maintain margin collateral in compliance with regulatory and internal guidelines .
margin levels are monitored daily , and customers deposit additional collateral as required .
where customers cannot meet collateral requirements , citi may liquidate sufficient underlying financial instruments to bring the customer into compliance with the required margin level .
exposure to credit risk is impacted by market volatility , which may impair the ability of clients to satisfy their obligations to citi .
credit limits are established and closely monitored for customers and for brokers and dealers engaged in forwards , futures and other transactions deemed to be credit sensitive .
brokerage receivables and brokerage payables consisted of the following: .

in millions of dollars                                      | december 31 , 2018 | december 31 , 2017
----------------------------------------------------------- | ------------------ | ------------------
receivables from customers                                  | $ 14415            | $ 19215
receivables from brokers dealers and clearing organizations | 21035              | 19169
total brokerage receivables ( 1 )                           | $ 35450            | $ 38384
payables to customers                                       | $ 40273            | $ 38741
payables to brokers dealers and clearing organizations      | 24298              | 22601
total brokerage payables ( 1 )                              | $ 64571            | $ 61342

total brokerage payables ( 1 ) $ 64571 $ 61342 ( 1 ) includes brokerage receivables and payables recorded by citi broker-dealer entities that are accounted for in accordance with the aicpa accounting guide for brokers and dealers in securities as codified in asc 940-320.


b .
investments .
fixed maturity and equity security investments available for sale , at market value , reflect unrealized appreciation and depreciation , as a result of temporary changes in market value during the period , in shareholders 2019 equity , net of income taxes in 201caccumulated other comprehensive income ( loss ) 201d in the consolidated balance sheets .
fixed maturity and equity securities carried at fair value reflect fair value re- measurements as net realized capital gains and losses in the consolidated statements of operations and comprehensive income ( loss ) .
the company records changes in fair value for its fixed maturities available for sale , at market value through shareholders 2019 equity , net of taxes in accumulated other comprehensive income ( loss ) since cash flows from these investments will be primarily used to settle its reserve for losses and loss adjustment expense liabilities .
the company anticipates holding these investments for an extended period as the cash flow from interest and maturities will fund the projected payout of these liabilities .
fixed maturities carried at fair value represent a portfolio of convertible bond securities , which have characteristics similar to equity securities and at times , designated foreign denominated fixed maturity securities , which will be used to settle loss and loss adjustment reserves in the same currency .
the company carries all of its equity securities at fair value except for mutual fund investments whose underlying investments are comprised of fixed maturity securities .
for equity securities , available for sale , at fair value , the company reflects changes in value as net realized capital gains and losses since these securities may be sold in the near term depending on financial market conditions .
interest income on all fixed maturities and dividend income on all equity securities are included as part of net investment income in the consolidated statements of operations and comprehensive income ( loss ) .
unrealized losses on fixed maturities , which are deemed other-than-temporary and related to the credit quality of a security , are charged to net income ( loss ) as net realized capital losses .
short-term investments are stated at cost , which approximates market value .
realized gains or losses on sales of investments are determined on the basis of identified cost .
for non- publicly traded securities , market prices are determined through the use of pricing models that evaluate securities relative to the u.s .
treasury yield curve , taking into account the issue type , credit quality , and cash flow characteristics of each security .
for publicly traded securities , market value is based on quoted market prices or valuation models that use observable market inputs .
when a sector of the financial markets is inactive or illiquid , the company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value .
retrospective adjustments are employed to recalculate the values of asset-backed securities .
each acquisition lot is reviewed to recalculate the effective yield .
the recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition .
outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities .
conditional prepayment rates , computed with life to date factor histories and weighted average maturities , are used to effect the calculation of projected and prepayments for pass-through security types .
other invested assets include limited partnerships and rabbi trusts .
limited partnerships are accounted for under the equity method of accounting , which can be recorded on a monthly or quarterly lag .
c .
uncollectible receivable balances .
the company provides reserves for uncollectible reinsurance recoverable and premium receivable balances based on management 2019s assessment of the collectability of the outstanding balances .
such reserves are presented in the table below for the periods indicated. .

( dollars in thousands )                        | years ended december 31 , 2014 | years ended december 31 , 2013
----------------------------------------------- | ------------------------------ | ------------------------------
reinsurance receivables and premium receivables | $ 29497                        | $ 29905


as a result of the transaction , we recognized a net gain of approximately $ 1.3 billion , including $ 1.2 billion recognized in 2016 .
the net gain represents the $ 2.5 billion fair value of the shares of lockheed martin common stock exchanged and retired as part of the exchange offer , plus the $ 1.8 billion one-time special cash payment , less the net book value of the is&gs business of about $ 3.0 billion at august 16 , 2016 and other adjustments of about $ 100 million .
in 2017 , we recognized an additional gain of $ 73 million , which reflects certain post-closing adjustments , including certain tax adjustments and the final determination of net working capital .
we classified the operating results of our former is&gs business as discontinued operations in our consolidated financial statements in accordance with u.s .
gaap , as the divestiture of this business represented a strategic shift that had a major effect on our operations and financial results .
however , the cash flows generated by the is&gs business have not been reclassified in our consolidated statements of cash flows as we retained this cash as part of the transaction .
the operating results , prior to the august 16 , 2016 divestiture date , of the is&gs business that have been reflected within net earnings from discontinued operations for the year ended december 31 , 2016 are as follows ( in millions ) : .

net sales                                                 | $ 3410
--------------------------------------------------------- | --------------
cost of sales                                             | -2953 ( 2953 )
severance charges                                         | -19 ( 19 )
gross profit                                              | 438
other income net                                          | 16
operating profit                                          | 454
earnings from discontinued operations before income taxes | 454
income tax expense                                        | -147 ( 147 )
net gain on divestiture of discontinued operations        | 1205
net earnings from discontinued operations                 | $ 1512

the operating results of the is&gs business reported as discontinued operations are different than the results previously reported for the is&gs business segment .
results reported within net earnings from discontinued operations only include costs that were directly attributable to the is&gs business and exclude certain corporate overhead costs that were previously allocated to the is&gs business .
as a result , we reclassified $ 82 million in 2016 of corporate overhead costs from the is&gs business to other unallocated , net on our consolidated statement of earnings .
additionally , we retained all assets and obligations related to the pension benefits earned by former is&gs business salaried employees through the date of divestiture .
therefore , the non-service portion of net pension costs ( e.g. , interest cost , actuarial gains and losses and expected return on plan assets ) for these plans have been reclassified from the operating results of the is&gs business segment and reported as a reduction to the fas/cas pension adjustment .
these net pension costs were $ 54 million for the year ended december 31 , 2016 .
the service portion of net pension costs related to is&gs business 2019s salaried employees that transferred to leidos were included in the operating results of the is&gs business classified as discontinued operations because such costs are no longer incurred by us .
significant severance charges related to the is&gs business were historically recorded at the lockheed martin corporate office .
these charges have been reclassified into the operating results of the is&gs business , classified as discontinued operations , and excluded from the operating results of our continuing operations .
the amount of severance charges reclassified were $ 19 million in 2016 .
financial information related to cash flows generated by the is&gs business , such as depreciation and amortization , capital expenditures , and other non-cash items , included in our consolidated statement of cash flows for the years ended december 31 , 2016 were not significant.


credit agency ratings our long-term debt credit ratings as of february 16 , 2007 were ba3 with negative outlook , b creditwatch negative and b with negative outlook , as reported by moody 2019s investors service , standard & poor 2019s and fitch ratings , respectively .
a downgrade in our credit ratings could adversely affect our ability to access capital and could result in more stringent covenants and higher interest rates under the terms of any new indebtedness .
contractual obligations the following summarizes our estimated contractual obligations at december 31 , 2006 , and their effect on our liquidity and cash flow in future periods: .

                                           | 2007  | 2008  | 2009    | 2010    | 2011    | thereafter | total
------------------------------------------ | ----- | ----- | ------- | ------- | ------- | ---------- | --------
long-term debt1                            | $ 2.6 | $ 2.8 | $ 257.0 | $ 240.9 | $ 500.0 | $ 1247.9   | $ 2251.2
interest payments                          | 122.0 | 116.1 | 107.1   | 93.6    | 75.1    | 74.1       | 588.0
non-cancelable operating lease obligations | 292.3 | 265.2 | 237.4   | 207.9   | 181.9   | 861.2      | 2045.9
contingent acquisition payments2           | 47.2  | 34.2  | 20.8    | 2.5     | 2.0     | 3.1        | 109.8

contingent acquisition payments 2 47.2 34.2 20.8 2.5 2.0 3.1 109.8 1 holders of our $ 400.0 4.50% ( 4.50 % ) notes may require us to repurchase their notes for cash at par in march 2008 .
these notes will mature in 2023 if not converted or repurchased .
2 we have structured certain acquisitions with additional contingent purchase price obligations in order to reduce the potential risk associated with negative future performance of the acquired entity .
all payments are contingent upon achieving projected operating performance targets and satisfying other conditions specified in the related agreements and are subject to revisions as the earn-out periods progress .
see note 18 to the consolidated financial statements for further information .
we have not included obligations under our pension and postretirement benefit plans in the contractual obligations table .
our funding policy regarding our funded pension plan is to contribute amounts necessary to satisfy minimum pension funding requirements plus such additional amounts from time to time as are determined to be appropriate to improve the plans 2019 funded status .
the funded status of our pension plans is dependent upon many factors , including returns on invested assets , level of market interest rates and levels of voluntary contributions to the plans .
declines in long-term interest rates have had a negative impact on the funded status of the plans .
for 2007 , we do not expect to contribute to our domestic pension plans , and expect to contribute $ 20.6 to our foreign pension plans .
we have not included our deferred tax obligations in the contractual obligations table as the timing of any future payments in relation to these obligations is uncertain .
derivatives and hedging activities we periodically enter into interest rate swap agreements and forward contracts to manage exposure to interest rate fluctuations and to mitigate foreign exchange volatility .
in may of 2005 , we terminated all of our long-term interest rate swap agreements covering the $ 350.0 6.25% ( 6.25 % ) senior unsecured notes and $ 150.0 of the $ 500.0 7.25% ( 7.25 % ) senior unsecured notes .
in connection with the interest rate swap termination , our net cash receipts were $ 1.1 , which is recorded as an offset to interest expense over the remaining life of the related debt .
we have entered into foreign currency transactions in which various foreign currencies are bought or sold forward .
these contracts were entered into to meet currency requirements arising from specific transactions .
the changes in value of these forward contracts have been recorded in other income or expense .
as of december 31 , 2006 and 2005 , we had contracts covering $ 0.2 and $ 6.2 , respectively , of notional amount of currency and the fair value of the forward contracts was negligible .
the terms of the 4.50% ( 4.50 % ) notes include two embedded derivative instruments and the terms of our 4.25% ( 4.25 % ) notes and our series b preferred stock each include one embedded derivative instrument .
the fair value of these derivatives on december 31 , 2006 was negligible .
the interpublic group of companies , inc .
and subsidiaries management 2019s discussion and analysis of financial condition and results of operations 2014 ( continued ) ( amounts in millions , except per share amounts ) %%transmsg*** transmitting job : y31000 pcn : 036000000 ***%%pcmsg|36 |00005|yes|no|02/28/2007 01:12|0|0|page is valid , no graphics -- color : d|


humana inc .
notes to consolidated financial statements 2014 ( continued ) the total intrinsic value of stock options exercised during 2007 was $ 133.9 million , compared with $ 133.7 million during 2006 and $ 57.8 million during 2005 .
cash received from stock option exercises for the years ended december 31 , 2007 , 2006 , and 2005 totaled $ 62.7 million , $ 49.2 million , and $ 36.4 million , respectively .
total compensation expense related to nonvested options not yet recognized was $ 23.6 million at december 31 , 2007 .
we expect to recognize this compensation expense over a weighted average period of approximately 1.6 years .
restricted stock awards restricted stock awards are granted with a fair value equal to the market price of our common stock on the date of grant .
compensation expense is recorded straight-line over the vesting period , generally three years from the date of grant .
the weighted average grant date fair value of our restricted stock awards was $ 63.59 , $ 54.36 , and $ 32.81 for the years ended december 31 , 2007 , 2006 , and 2005 , respectively .
activity for our restricted stock awards was as follows for the year ended december 31 , 2007 : shares weighted average grant-date fair value .

                                               | shares           | weighted average grant-date fair value
---------------------------------------------- | ---------------- | --------------------------------------
nonvested restricted stock at december 31 2006 | 1107455          | $ 45.86
granted                                        | 852353           | 63.59
vested                                         | -51206 ( 51206 ) | 56.93
forfeited                                      | -63624 ( 63624 ) | 49.65
nonvested restricted stock at december 31 2007 | 1844978          | $ 53.61

the fair value of shares vested during the years ended december 31 , 2007 , 2006 , and 2005 was $ 3.4 million , $ 2.3 million , and $ 0.6 million , respectively .
total compensation expense related to nonvested restricted stock awards not yet recognized was $ 44.7 million at december 31 , 2007 .
we expect to recognize this compensation expense over a weighted average period of approximately 1.4 years .
there are no other contractual terms covering restricted stock awards once vested.