blackrock n 96 n notes in april 2009 , the company acquired $ 2 million of finite- lived management contracts with a five-year estimated useful life associated with the acquisition of the r3 capital partners funds .
in december 2009 , in conjunction with the bgi trans- action , the company acquired $ 163 million of finite- lived management contracts with a weighted-average estimated useful life of approximately 10 years .
estimated amortization expense for finite-lived intangible assets for each of the five succeeding years is as follows : ( dollar amounts in millions ) .

2010 | $ 160
---- | -----
2011 | 157
2012 | 156
2013 | 155
2014 | 149

indefinite-lived acquired management contracts on september 29 , 2006 , in conjunction with the mlim transaction , the company acquired indefinite-lived man- agement contracts valued at $ 4477 million consisting of $ 4271 million for all retail mutual funds and $ 206 million for alternative investment products .
on october 1 , 2007 , in conjunction with the quellos transaction , the company acquired $ 631 million in indefinite-lived management contracts associated with alternative investment products .
on october 1 , 2007 , the company purchased the remain- ing 20% ( 20 % ) of an investment manager of a fund of hedge funds .
in conjunction with this transaction , the company recorded $ 8 million in additional indefinite-lived management contracts associated with alternative investment products .
on december 1 , 2009 , in conjunction with the bgi transaction , the company acquired $ 9785 million in indefinite-lived management contracts valued consisting primarily for exchange traded funds and common and collective trusts .
indefinite-lived acquired trade names/trademarks on december 1 , 2009 , in conjunction with the bgi transaction , the company acquired trade names/ trademarks primarily related to ishares valued at $ 1402.5 million .
the fair value was determined using a royalty rate based primarily on normalized marketing and promotion expenditures to develop and support the brands globally .
13 .
borrowings short-term borrowings 2007 facility in august 2007 , the company entered into a five-year $ 2.5 billion unsecured revolving credit facility ( the 201c2007 facility 201d ) , which permits the company to request an additional $ 500 million of borrowing capacity , subject to lender credit approval , up to a maximum of $ 3.0 billion .
the 2007 facility requires the company not to exceed a maximum leverage ratio ( ratio of net debt to earnings before interest , taxes , depreciation and amortiza- tion , where net debt equals total debt less domestic unrestricted cash ) of 3 to 1 , which was satisfied with a ratio of less than 1 to 1 at december 31 , 2009 .
the 2007 facility provides back-up liquidity , funds ongoing working capital for general corporate purposes and funds various investment opportunities .
at december 31 , 2009 , the company had $ 200 million outstanding under the 2007 facility with an interest rate of 0.44% ( 0.44 % ) and a maturity date during february 2010 .
during february 2010 , the company rolled over $ 100 million in borrowings with an interest rate of 0.43% ( 0.43 % ) and a maturity date in may 2010 .
lehman commercial paper inc .
has a $ 140 million participation under the 2007 facility ; however blackrock does not expect that lehman commercial paper inc .
will honor its commitment to fund additional amounts .
bank of america , a related party , has a $ 140 million participation under the 2007 facility .
in december 2007 , in order to support two enhanced cash funds that blackrock manages , blackrock elected to procure two letters of credit under the existing 2007 facility in an aggregate amount of $ 100 million .
in decem- ber 2008 , the letters of credit were terminated .
commercial paper program on october 14 , 2009 , blackrock established a com- mercial paper program ( the 201ccp program 201d ) under which the company may issue unsecured commercial paper notes ( the 201ccp notes 201d ) on a private placement basis up to a maximum aggregate amount outstanding at any time of $ 3 billion .
the proceeds of the commercial paper issuances were used for the financing of a portion of the bgi transaction .
subsidiaries of bank of america and barclays , as well as other third parties , act as dealers under the cp program .
the cp program is supported by the 2007 facility .
the company began issuance of cp notes under the cp program on november 4 , 2009 .
as of december 31 , 2009 , blackrock had approximately $ 2 billion of out- standing cp notes with a weighted average interest rate of 0.20% ( 0.20 % ) and a weighted average maturity of 23 days .
since december 31 , 2009 , the company repaid approxi- mately $ 1.4 billion of cp notes with proceeds from the long-term notes issued in december 2009 .
as of march 5 , 2010 , blackrock had $ 596 million of outstanding cp notes with a weighted average interest rate of 0.18% ( 0.18 % ) and a weighted average maturity of 38 days .
japan commitment-line in june 2008 , blackrock japan co. , ltd. , a wholly owned subsidiary of the company , entered into a five billion japanese yen commitment-line agreement with a bank- ing institution ( the 201cjapan commitment-line 201d ) .
the term of the japan commitment-line was one year and interest accrued at the applicable japanese short-term prime rate .
in june 2009 , blackrock japan co. , ltd .
renewed the japan commitment-line for a term of one year .
the japan commitment-line is intended to provide liquid- ity and flexibility for operating requirements in japan .
at december 31 , 2009 , the company had no borrowings outstanding on the japan commitment-line .
convertible debentures in february 2005 , the company issued $ 250 million aggregate principal amount of convertible debentures ( the 201cdebentures 201d ) , due in 2035 and bearing interest at a rate of 2.625% ( 2.625 % ) per annum .
interest is payable semi- annually in arrears on february 15 and august 15 of each year , and commenced august 15 , 2005 .
prior to february 15 , 2009 , the debentures could have been convertible at the option of the holder at a decem- ber 31 , 2008 conversion rate of 9.9639 shares of common stock per one dollar principal amount of debentures under certain circumstances .
the debentures would have been convertible into cash and , in some situations as described below , additional shares of the company 2019s common stock , if during the five business day period after any five consecutive trading day period the trading price per debenture for each day of such period is less than 103% ( 103 % ) of the product of the last reported sales price of blackrock 2019s common stock and the conversion rate of the debentures on each such day or upon the occurrence of certain other corporate events , such as a distribution to the holders of blackrock common stock of certain rights , assets or debt securities , if the company becomes party to a merger , consolidation or transfer of all or substantially all of its assets or a change of control of the company .
on february 15 , 2009 , the debentures became convertible into cash at any time prior to maturity at the option of the holder and , in some situations as described below , additional shares of the company 2019s common stock at the current conversion rate .
at the time the debentures are tendered for conver- sion , for each one dollar principal amount of debentures converted , a holder shall be entitled to receive cash and shares of blackrock common stock , if any , the aggregate value of which ( the 201cconversion value 201d ) will be deter- mined by multiplying the applicable conversion rate by the average of the daily volume weighted average price of blackrock common stock for each of the ten consecutive trading days beginning on the second trading day imme- diately following the day the debentures are tendered for conversion ( the 201cten-day weighted average price 201d ) .
the company will deliver the conversion value to holders as follows : ( 1 ) an amount in cash ( the 201cprincipal return 201d ) equal to the lesser of ( a ) the aggregate conversion value of the debentures to be converted and ( b ) the aggregate principal amount of the debentures to be converted , and ( 2 ) if the aggregate conversion value of the debentures to be converted is greater than the principal return , an amount in shares ( the 201cnet shares 201d ) , determined as set forth below , equal to such aggregate conversion value less the principal return ( the 201cnet share amount 201d ) .
the number of net shares to be paid will be determined by dividing the net share amount by the ten-day weighted average price .
in lieu of delivering fractional shares , the company will deliver cash based on the ten-day weighted average price .
the conversion rate for the debentures is subject to adjustments upon the occurrence of certain corporate events , such as a change of control of the company , 193253ti_txt.indd 96 4/2/10 1:18 pm


repurchase programs .
we utilized cash generated from operating activities , $ 57.0 million in cash proceeds received from employee stock compensation plans and borrowings under credit facilities to fund the repurchases .
during 2008 , we borrowed $ 330.0 million from our existing credit facilities to fund stock repurchases and partially fund the acquisition of abbott spine .
we may use excess cash or further borrow from our credit facilities to repurchase additional common stock under the $ 1.25 billion program which expires december 31 , 2009 .
we have a five year $ 1350 million revolving , multi- currency , senior unsecured credit facility maturing november 30 , 2012 ( the 201csenior credit facility 201d ) .
we had $ 460.1 million outstanding under the senior credit facility at december 31 , 2008 , and an availability of $ 889.9 million .
the senior credit facility contains provisions by which we can increase the line to $ 1750 million and request that the maturity date be extended for two additional one-year periods .
we and certain of our wholly owned foreign subsidiaries are the borrowers under the senior credit facility .
borrowings under the senior credit facility are used for general corporate purposes and bear interest at a libor- based rate plus an applicable margin determined by reference to our senior unsecured long-term credit rating and the amounts drawn under the senior credit facility , at an alternate base rate , or at a fixed rate determined through a competitive bid process .
the senior credit facility contains customary affirmative and negative covenants and events of default for an unsecured financing arrangement , including , among other things , limitations on consolidations , mergers and sales of assets .
financial covenants include a maximum leverage ratio of 3.0 to 1.0 and a minimum interest coverage ratio of 3.5 to 1.0 .
if we fall below an investment grade credit rating , additional restrictions would result , including restrictions on investments , payment of dividends and stock repurchases .
we were in compliance with all covenants under the senior credit facility as of december 31 , 2008 .
commitments under the senior credit facility are subject to certain fees , including a facility and a utilization fee .
the senior credit facility is rated a- by standard & poor 2019s ratings services and is not rated by moody 2019s investors 2019 service , inc .
notwithstanding recent interruptions in global credit markets , as of the date of this report , we believe our access to our senior credit facility has not been impaired .
in october 2008 , we funded a portion of the acquisition of abbott spine with approximately $ 110 million of new borrowings under the senior credit facility .
each of the lenders under the senior credit facility funded its portion of the new borrowings in accordance with its commitment percentage .
we also have available uncommitted credit facilities totaling $ 71.4 million .
management believes that cash flows from operations , together with available borrowings under the senior credit facility , are sufficient to meet our expected working capital , capital expenditure and debt service needs .
should investment opportunities arise , we believe that our earnings , balance sheet and cash flows will allow us to obtain additional capital , if necessary .
contractual obligations we have entered into contracts with various third parties in the normal course of business which will require future payments .
the following table illustrates our contractual obligations ( in millions ) : contractual obligations total 2009 thereafter .

contractual obligations        | total    | 2009   | 2010 and 2011 | 2012 and 2013 | 2014 and thereafter
------------------------------ | -------- | ------ | ------------- | ------------- | -------------------
long-term debt                 | $ 460.1  | $ 2013 | $ 2013        | $ 460.1       | $ 2013
operating leases               | 149.3    | 38.2   | 51.0          | 30.2          | 29.9
purchase obligations           | 56.8     | 47.7   | 7.6           | 1.5           | 2013
long-term income taxes payable | 116.9    | 2013   | 69.6          | 24.9          | 22.4
other long-term liabilities    | 237.0    | 2013   | 30.7          | 15.1          | 191.2
total contractual obligations  | $ 1020.1 | $ 85.9 | $ 158.9       | $ 531.8       | $ 243.5

long-term income taxes payable 116.9 2013 69.6 24.9 22.4 other long-term liabilities 237.0 2013 30.7 15.1 191.2 total contractual obligations $ 1020.1 $ 85.9 $ 158.9 $ 531.8 $ 243.5 critical accounting estimates our financial results are affected by the selection and application of accounting policies and methods .
significant accounting policies which require management 2019s judgment are discussed below .
excess inventory and instruments 2013 we must determine as of each balance sheet date how much , if any , of our inventory may ultimately prove to be unsaleable or unsaleable at our carrying cost .
similarly , we must also determine if instruments on hand will be put to productive use or remain undeployed as a result of excess supply .
reserves are established to effectively adjust inventory and instruments to net realizable value .
to determine the appropriate level of reserves , we evaluate current stock levels in relation to historical and expected patterns of demand for all of our products and instrument systems and components .
the basis for the determination is generally the same for all inventory and instrument items and categories except for work-in-progress inventory , which is recorded at cost .
obsolete or discontinued items are generally destroyed and completely written off .
management evaluates the need for changes to valuation reserves based on market conditions , competitive offerings and other factors on a regular basis .
income taxes 2013 we estimate income tax expense and income tax liabilities and assets by taxable jurisdiction .
realization of deferred tax assets in each taxable jurisdiction is dependent on our ability to generate future taxable income sufficient to realize the benefits .
we evaluate deferred tax assets on an ongoing basis and provide valuation allowances if it is determined to be 201cmore likely than not 201d that the deferred tax benefit will not be realized .
federal income taxes are provided on the portion of the income of foreign subsidiaries that is expected to be remitted to the u.s .
we operate within numerous taxing jurisdictions .
we are subject to regulatory z i m m e r h o l d i n g s , i n c .
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in 2006 , our board of directors approved a projected $ 3.2 billion expansion of our garyville , louisiana refinery by 180 mbpd to 425 mbpd , which will increase our total refining capacity to 1.154 million barrels per day ( 2018 2018mmbpd 2019 2019 ) .
we recently received air permit approval from the louisiana department of environmental quality for this project and construction is expected to begin in mid-2007 , with startup planned for the fourth quarter of 2009 .
we have also commenced front-end engineering and design ( 2018 2018feed 2019 2019 ) for a potential heavy oil upgrading project at our detroit refinery , which would allow us to process increased volumes of canadian oil sands production , and are undertaking a feasibility study for a similar upgrading project at our catlettsburg refinery .
marketing we are a supplier of gasoline and distillates to resellers and consumers within our market area in the midwest , the upper great plains and southeastern united states .
in 2006 , our refined product sales volumes ( excluding matching buy/sell transactions ) totaled 21.5 billion gallons , or 1.401 mmbpd .
the average sales price of our refined products in aggregate was $ 77.76 per barrel for 2006 .
the following table sets forth our refined product sales by product group and our average sales price for each of the last three years .
refined product sales ( thousands of barrels per day ) 2006 2005 2004 .

( thousands of barrels per day )     | 2006    | 2005    | 2004
------------------------------------ | ------- | ------- | -------
gasoline                             | 804     | 836     | 807
distillates                          | 375     | 385     | 373
propane                              | 23      | 22      | 22
feedstocks and special products      | 106     | 96      | 92
heavy fuel oil                       | 26      | 29      | 27
asphalt                              | 91      | 87      | 79
total ( a )                          | 1425    | 1455    | 1400
average sales price ( $ per barrel ) | $ 77.76 | $ 66.42 | $ 49.53

( a ) includes matching buy/sell volumes of 24 mbpd , 77 mbpd and 71 mbpd in 2006 , 2005 and 2004 .
on april 1 , 2006 , we changed our accounting for matching buy/sell arrangements as a result of a new accounting standard .
this change resulted in lower refined product sales volumes for the remainder of 2006 than would have been reported under the previous accounting practices .
see note 2 to the consolidated financial statements .
the wholesale distribution of petroleum products to private brand marketers and to large commercial and industrial consumers and sales in the spot market accounted for 71 percent of our refined product sales volumes in 2006 .
we sold 52 percent of our gasoline volumes and 89 percent of our distillates volumes on a wholesale or spot market basis .
half of our propane is sold into the home heating market , with the balance being purchased by industrial consumers .
propylene , cumene , aromatics , aliphatics , and sulfur are domestically marketed to customers in the chemical industry .
base lube oils , maleic anhydride , slack wax , extract and pitch are sold throughout the united states and canada , with pitch products also being exported worldwide .
we market asphalt through owned and leased terminals throughout the midwest , the upper great plains and southeastern united states .
our customer base includes approximately 800 asphalt-paving contractors , government entities ( states , counties , cities and townships ) and asphalt roofing shingle manufacturers .
we blended 35 mbpd of ethanol into gasoline in 2006 .
in 2005 and 2004 , we blended 35 mbpd and 30 mbpd of ethanol .
the expansion or contraction of our ethanol blending program will be driven by the economics of the ethanol supply and changes in government regulations .
we sell reformulated gasoline in parts of our marketing territory , primarily chicago , illinois ; louisville , kentucky ; northern kentucky ; and milwaukee , wisconsin , and we sell low-vapor-pressure gasoline in nine states .
as of december 31 , 2006 , we supplied petroleum products to about 4200 marathon branded retail outlets located primarily in ohio , michigan , indiana , kentucky and illinois .
branded retail outlets are also located in florida , georgia , minnesota , wisconsin , west virginia , tennessee , virginia , north carolina , pennsylvania , alabama and south carolina .
sales to marathon brand jobbers and dealers accounted for 14 percent of our refined product sales volumes in 2006 .
ssa sells gasoline and diesel fuel through company-operated retail outlets .
sales of refined products through these ssa retail outlets accounted for 15 percent of our refined product sales volumes in 2006 .
as of december 31 , 2006 , ssa had 1636 retail outlets in nine states that sold petroleum products and convenience store merchandise and services , primarily under the brand names 2018 2018speedway 2019 2019 and 2018 2018superamerica . 2019 2019 ssa 2019s revenues from the sale of non-petroleum merchandise totaled $ 2.7 billion in 2006 , compared with $ 2.5 billion in 2005 .
profit levels from the sale


we prepare estimates of research and development costs for projects in clinical development , which include direct costs and allocations of certain costs such as indirect labor , non-cash compensation expense , and manufacturing and other costs related to activities that benefit multiple projects , and , under our collaboration with bayer healthcare , the portion of bayer healthcare 2019s vegf trap-eye development expenses that we are obligated to reimburse .
our estimates of research and development costs for clinical development programs are shown below : project costs year ended december 31 , increase ( decrease ) ( in millions ) 2009 2008 .

project costs ( in millions )                     | project costs 2009 | 2008    | ( decrease )
------------------------------------------------- | ------------------ | ------- | ------------
arcalyst ae                                       | $ 67.7             | $ 39.2  | $ 28.5
vegf trap-eye                                     | 109.8              | 82.7    | 27.1
aflibercept                                       | 23.3               | 32.1    | -8.8 ( 8.8 )
regn88                                            | 36.9               | 21.4    | 15.5
other antibody candidates in clinical development | 74.4               | 27.4    | 47.0
other research programs & unallocated costs       | 86.7               | 72.1    | 14.6
total research and development expenses           | $ 398.8            | $ 274.9 | $ 123.9

for the reasons described above in results of operations for the years ended december 31 , 2010 and 2009 , under the caption 201cresearch and development expenses 201d , and due to the variability in the costs necessary to develop a pharmaceutical product and the uncertainties related to future indications to be studied , the estimated cost and scope of the projects , and our ultimate ability to obtain governmental approval for commercialization , accurate and meaningful estimates of the total cost to bring our product candidates to market are not available .
similarly , we are currently unable to reasonably estimate if our product candidates will generate material product revenues and net cash inflows .
in 2008 , we received fda approval for arcalyst ae for the treatment of caps , a group of rare , inherited auto-inflammatory diseases that affect a very small group of people .
we currently do not expect to generate material product revenues and net cash inflows from the sale of arcalyst ae for the treatment of caps .
selling , general , and administrative expenses selling , general , and administrative expenses increased to $ 52.9 million in 2009 from $ 48.9 million in 2008 .
in 2009 , we incurred ( i ) higher compensation expense , ( ii ) higher patent-related costs , ( iii ) higher facility-related costs due primarily to increases in administrative headcount , and ( iv ) higher patient assistance costs related to arcalyst ae .
these increases were partly offset by ( i ) lower marketing costs related to arcalyst ae , ( ii ) a decrease in administrative recruitment costs , and ( iii ) lower professional fees related to various corporate matters .
cost of goods sold during 2008 , we began recognizing revenue and cost of goods sold from net product sales of arcalyst ae .
cost of goods sold in 2009 and 2008 was $ 1.7 million and $ 0.9 million , respectively , and consisted primarily of royalties and other period costs related to arcalyst ae commercial supplies .
in 2009 and 2008 , arcalyst ae shipments to our customers consisted of supplies of inventory manufactured and expensed as research and development costs prior to fda approval in 2008 ; therefore , the costs of these supplies were not included in costs of goods sold .
other income and expense investment income decreased to $ 4.5 million in 2009 from $ 18.2 million in 2008 , due primarily to lower yields on , and lower balances of , cash and marketable securities .
in addition , in 2009 and 2008 , deterioration in the credit quality of specific marketable securities in our investment portfolio subjected us to the risk of not being able to recover these securities 2019 carrying values .
as a result , in 2009 and 2008 , we recognized charges of $ 0.1 million and $ 2.5 million , respectively , related to these securities , which we considered to be other than temporarily impaired .
in 2009 and 2008 , these charges were either wholly or partly offset by realized gains of $ 0.2 million and $ 1.2 million , respectively , on sales of marketable securities during the year.


contributions and future benefit payments we expect to make contributions of $ 28.1 million to our defined benefit , other postretirement , and postemployment benefits plans in fiscal 2009 .
actual 2009 contributions could exceed our current projections , as influenced by our decision to undertake discretionary funding of our benefit trusts versus other competing investment priorities and future changes in government requirements .
estimated benefit payments , which reflect expected future service , as appropriate , are expected to be paid from fiscal 2009-2018 as follows : in millions defined benefit pension postretirement benefit plans gross payments medicare subsidy receipts postemployment benefit ......................................................................................................................................................................................... .

in millions    | defined benefit pension plans | other postretirement benefit plans gross payments | medicare subsidy receipts | postemployment benefit plans
-------------- | ----------------------------- | ------------------------------------------------- | ------------------------- | ----------------------------
2009           | $ 176.3                       | $ 56.0                                            | $ -6.1 ( 6.1 )            | $ 16.6
2010           | 182.5                         | 59.9                                              | -6.7 ( 6.7 )              | 17.5
2011           | 189.8                         | 63.3                                              | -7.3 ( 7.3 )              | 18.1
2012           | 197.5                         | 67.0                                              | -8.0 ( 8.0 )              | 18.8
2013           | 206.6                         | 71.7                                              | -8.7 ( 8.7 )              | 19.4
2014 2013 2018 | 1187.3                        | 406.8                                             | -55.3 ( 55.3 )            | 106.3

defined contribution plans the general mills savings plan is a defined contribution plan that covers salaried and nonunion employees .
it had net assets of $ 2309.9 million as of may 25 , 2008 and $ 2303.0 million as of may 27 , 2007.this plan is a 401 ( k ) savings plan that includes a number of investment funds and an employee stock ownership plan ( esop ) .
we sponsor another savings plan for certain hourly employees with net assets of $ 16.0 million as of may 25 , 2008 .
our total recognized expense related to defined contribution plans was $ 61.9 million in fiscal 2008 , $ 48.3 million in fiscal 2007 , and $ 45.5 million in fiscal 2006 .
the esop originally purchased our common stock principally with funds borrowed from third parties and guaranteed by us.the esop shares are included in net shares outstanding for the purposes of calculating eps .
the esop 2019s third-party debt was repaid on june 30 , 2007 .
the esop 2019s only assets are our common stock and temporary cash balances.the esop 2019s share of the total defined contribution expense was $ 52.3 million in fiscal 2008 , $ 40.1 million in fiscal 2007 , and $ 37.6 million in fiscal 2006 .
the esop 2019s expensewas calculated by the 201cshares allocated 201dmethod .
the esop used our common stock to convey benefits to employees and , through increased stock ownership , to further align employee interests with those of stockholders.wematched a percentage of employee contributions to the general mills savings plan with a base match plus a variable year end match that depended on annual results .
employees received our match in the form of common stock .
our cash contribution to the esop was calculated so as to pay off enough debt to release sufficient shares to make our match .
the esop used our cash contributions to the plan , plus the dividends received on the esop 2019s leveraged shares , to make principal and interest payments on the esop 2019s debt .
as loan payments were made , shares became unencumbered by debt and were committed to be allocated .
the esop allocated shares to individual employee accounts on the basis of the match of employee payroll savings ( contributions ) , plus reinvested dividends received on previously allocated shares .
the esop incurred net interest of less than $ 1.0 million in each of fiscal 2007 and 2006 .
the esop used dividends of $ 2.5 million in fiscal 2007 and $ 3.9 million in 2006 , along with our contributions of less than $ 1.0 million in each of fiscal 2007 and 2006 to make interest and principal payments .
the number of shares of our common stock allocated to participants in the esop was 5.2 million as of may 25 , 2008 , and 5.4 million as of may 27 , 2007 .
annual report 2008 81


be adjusted by reference to a grid ( the 201cpricing grid 201d ) based on the consolidated leverage ratio and ranges between 1.00% ( 1.00 % ) to 1.25% ( 1.25 % ) for adjusted libor loans and 0.00% ( 0.00 % ) to 0.25% ( 0.25 % ) for alternate base rate loans .
the weighted average interest rate under the outstanding term loans and revolving credit facility borrowings was 1.6% ( 1.6 % ) and 1.3% ( 1.3 % ) during the years ended december 31 , 2016 and 2015 , respectively .
the company pays a commitment fee on the average daily unused amount of the revolving credit facility and certain fees with respect to letters of credit .
as of december 31 , 2016 , the commitment fee was 15.0 basis points .
since inception , the company incurred and deferred $ 3.9 million in financing costs in connection with the credit agreement .
3.250% ( 3.250 % ) senior notes in june 2016 , the company issued $ 600.0 million aggregate principal amount of 3.250% ( 3.250 % ) senior unsecured notes due june 15 , 2026 ( the 201cnotes 201d ) .
the proceeds were used to pay down amounts outstanding under the revolving credit facility .
interest is payable semi-annually on june 15 and december 15 beginning december 15 , 2016 .
prior to march 15 , 2026 ( three months prior to the maturity date of the notes ) , the company may redeem some or all of the notes at any time or from time to time at a redemption price equal to the greater of 100% ( 100 % ) of the principal amount of the notes to be redeemed or a 201cmake-whole 201d amount applicable to such notes as described in the indenture governing the notes , plus accrued and unpaid interest to , but excluding , the redemption date .
on or after march 15 , 2026 ( three months prior to the maturity date of the notes ) , the company may redeem some or all of the notes at any time or from time to time at a redemption price equal to 100% ( 100 % ) of the principal amount of the notes to be redeemed , plus accrued and unpaid interest to , but excluding , the redemption date .
the indenture governing the notes contains covenants , including limitations that restrict the company 2019s ability and the ability of certain of its subsidiaries to create or incur secured indebtedness and enter into sale and leaseback transactions and the company 2019s ability to consolidate , merge or transfer all or substantially all of its properties or assets to another person , in each case subject to material exceptions described in the indenture .
the company incurred and deferred $ 5.3 million in financing costs in connection with the notes .
other long term debt in december 2012 , the company entered into a $ 50.0 million recourse loan collateralized by the land , buildings and tenant improvements comprising the company 2019s corporate headquarters .
the loan has a seven year term and maturity date of december 2019 .
the loan bears interest at one month libor plus a margin of 1.50% ( 1.50 % ) , and allows for prepayment without penalty .
the loan includes covenants and events of default substantially consistent with the company 2019s credit agreement discussed above .
the loan also requires prior approval of the lender for certain matters related to the property , including transfers of any interest in the property .
as of december 31 , 2016 and 2015 , the outstanding balance on the loan was $ 42.0 million and $ 44.0 million , respectively .
the weighted average interest rate on the loan was 2.0% ( 2.0 % ) and 1.7% ( 1.7 % ) for the years ended december 31 , 2016 and 2015 , respectively .
the following are the scheduled maturities of long term debt as of december 31 , 2016 : ( in thousands ) .

2017                                         | $ 27000
-------------------------------------------- | --------
2018                                         | 27000
2019                                         | 63000
2020                                         | 25000
2021                                         | 86250
2022 and thereafter                          | 600000
total scheduled maturities of long term debt | $ 828250
current maturities of long term debt         | $ 27000


estimates of synthetic crude oil reserves are prepared by glj petroleum consultants of calgary , canada , third-party consultants .
their reports for all years are filed as exhibits to this annual report on form 10-k .
the team lead responsible for the estimates of our osm reserves has 34 years of experience in petroleum engineering and has conducted surface mineable oil sands evaluations since 1986 .
he is a member of spe , having served as regional director from 1998 through 2001 .
the second team member has 13 years of experience in petroleum engineering and has conducted surface mineable oil sands evaluations since 2009 .
both are registered practicing professional engineers in the province of alberta .
audits of estimates third-party consultants are engaged to provide independent estimates for fields that comprise 80 percent of our total proved reserves over a rolling four-year period for the purpose of auditing the in-house reserve estimates .
we met this goal for the four- year period ended december 31 , 2012 .
we established a tolerance level of 10 percent such that initial estimates by the third-party consultants are accepted if they are within 10 percent of our internal estimates .
should the third-party consultants 2019 initial analysis fail to reach our tolerance level , both our team and the consultants re-examine the information provided , request additional data and refine their analysis if appropriate .
this resolution process is continued until both estimates are within 10 percent .
in the very limited instances where differences outside the 10 percent tolerance cannot be resolved by year end , a plan to resolve the difference is developed and our senior management is informed .
this process did not result in significant changes to our reserve estimates in 2012 or 2011 .
there were no third-party audits performed in 2010 .
during 2012 , netherland , sewell & associates , inc .
( "nsai" ) prepared a certification of december 31 , 2011 reserves for the alba field in e.g .
the nsai summary report is filed as an exhibit to this annual report on form 10-k .
members of the nsai team have many years of industry experience , having worked for large , international oil and gas companies before joining nsai .
the senior technical advisor has a bachelor of science degree in geophysics and over 15 years of experience in the estimation of and evaluation of reserves .
the second member has a bachelor of science degree in chemical engineering and master of business administration along with over 3 years of experience in estimation and evaluation of reserves .
both are licensed in the state of texas .
ryder scott company ( "ryder scott" ) performed audits of several of our fields in 2012 and 2011 .
their summary reports on audits performed in 2012 and 2011 are filed as exhibits to this annual report on form 10-k .
the team lead for ryder scott has over 20 years of industry experience , having worked for a major international oil and gas company before joining ryder scott .
he has a bachelor of science degree in mechanical engineering , is a member of spe where he served on the oil and gas reserves committee and is a registered professional engineer in the state of texas .
changes in proved undeveloped reserves as of december 31 , 2012 , 571 mmboe of proved undeveloped reserves were reported , an increase of 176 mmboe from december 31 , 2011 .
the following table shows changes in total proved undeveloped reserves for 2012 : ( mmboe ) .

beginning of year                          | 395
------------------------------------------ | ----------
revisions of previous estimates            | -13 ( 13 )
improved recovery                          | 2
purchases of reserves in place             | 56
extensions discoveries and other additions | 201
transfer to proved developed               | -70 ( 70 )
end of year                                | 571

significant additions to proved undeveloped reserves during 2012 include 56 mmboe due to acquisitions in the eagle ford shale .
development drilling added 124 mmboe in the eagle ford , 35 mmboe in the bakken and 15 mmboe in the oklahoma resource basins shale play .
a gas sharing agreement signed with the libyan government in 2012 added 19 mmboe .
additionally , 30 mmboe were transferred from proved undeveloped to proved developed reserves in the eagle ford and 14 mmboe in the bakken shale plays due to producing wells .
costs incurred in 2012 , 2011 and 2010 relating to the development of proved undeveloped reserves , were $ 1995 million $ 1107 million and $ 1463 million .
a total of 27 mmboe was booked as a result of reliable technology .
technologies included statistical analysis of production performance , decline curve analysis , rate transient analysis , reservoir simulation and volumetric analysis .
the statistical nature of production performance coupled with highly certain reservoir continuity or quality within the reliable technology areas and sufficient proved undeveloped locations establish the reasonable certainty criteria required for booking reserves.


devon energy corporation and subsidiaries notes to consolidated financial statements 2013 ( continued ) debt maturities as of december 31 , 2015 , excluding premiums and discounts , are as follows ( millions ) : .

2016       | $ 976
---------- | -------
2017       | 2014
2018       | 875
2019       | 1100
2020       | 414
thereafter | 9763
total      | $ 13128

credit lines devon has a $ 3.0 billion senior credit facility .
the maturity date for $ 30 million of the senior credit facility is october 24 , 2017 .
the maturity date for $ 164 million of the senior credit facility is october 24 , 2018 .
the maturity date for the remaining $ 2.8 billion is october 24 , 2019 .
amounts borrowed under the senior credit facility may , at the election of devon , bear interest at various fixed rate options for periods of up to twelve months .
such rates are generally less than the prime rate .
however , devon may elect to borrow at the prime rate .
the senior credit facility currently provides for an annual facility fee of $ 3.8 million that is payable quarterly in arrears .
as of december 31 , 2015 , there were no borrowings under the senior credit facility .
the senior credit facility contains only one material financial covenant .
this covenant requires devon 2019s ratio of total funded debt to total capitalization , as defined in the credit agreement , to be no greater than 65% ( 65 % ) .
the credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in the accompanying consolidated financial statements .
also , total capitalization is adjusted to add back noncash financial write-downs such as full cost ceiling impairments or goodwill impairments .
as of december 31 , 2015 , devon was in compliance with this covenant with a debt-to- capitalization ratio of 23.7% ( 23.7 % ) .
commercial paper devon 2019s senior credit facility supports its $ 3.0 billion of short-term credit under its commercial paper program .
commercial paper debt generally has a maturity of between 1 and 90 days , although it can have a maturity of up to 365 days , and bears interest at rates agreed to at the time of the borrowing .
the interest rate is generally based on a standard index such as the federal funds rate , libor or the money market rate as found in the commercial paper market .
as of december 31 , 2015 , devon 2019s outstanding commercial paper borrowings had a weighted-average borrowing rate of 0.63% ( 0.63 % ) .
issuance of senior notes in june 2015 , devon issued $ 750 million of 5.0% ( 5.0 % ) senior notes due 2045 that are unsecured and unsubordinated obligations .
devon used the net proceeds to repay the floating rate senior notes that matured on december 15 , 2015 , as well as outstanding commercial paper balances .
in december 2015 , in conjunction with the announcement of the powder river basin and stack acquisitions , devon issued $ 850 million of 5.85% ( 5.85 % ) senior notes due 2025 that are unsecured and unsubordinated obligations .
devon used the net proceeds to fund the cash portion of these acquisitions.


2015 compared to 2014 when compared to 2014 , costs of revenue in 2015 increased $ 41 million .
this increase included a constant currency increase in expenses of approximately $ 238 million , or 8.9% ( 8.9 % ) , partially offset by a positive impact of approximately $ 197 million from the effects of foreign currency fluctuations .
the constant currency growth was comprised of a $ 71 million increase in commercial solutions , which included the impact from the encore acquisition which closed in july 2014 , a $ 146 million increase in research & development solutions , which included the incremental impact from the businesses that quest contributed to q2 solutions , and a $ 21 million increase in integrated engagement services .
the decrease in costs of revenue as a percent of revenues for 2015 was primarily as a result of an improvement in constant currency profit margin in the commercial solutions , research & development solutions and integrated engagement services segments ( as more fully described in the segment discussion later in this section ) .
for 2015 , this constant currency profit margin expansion was partially offset by the effect from a higher proportion of consolidated revenues being contributed by our lower margin integrated engagement services segment when compared to 2014 as well as a negative impact from foreign currency fluctuations .
selling , general and administrative expenses , exclusive of depreciation and amortization .

( dollars in millions )                     | year ended december 31 , 2016 | year ended december 31 , 2015 | year ended december 31 , 2014
------------------------------------------- | ----------------------------- | ----------------------------- | -----------------------------
selling general and administrative expenses | $ 1011                        | $ 815                         | $ 781
% (  % ) of revenues                        | 18.8% ( 18.8 % )              | 18.8% ( 18.8 % )              | 18.8% ( 18.8 % )

2016 compared to 2015 the $ 196 million increase in selling , general and administrative expenses in 2016 included a constant currency increase of $ 215 million , or 26.4% ( 26.4 % ) , partially offset by a positive impact of approximately $ 19 million from the effects of foreign currency fluctuations .
the constant currency growth was comprised of a $ 151 million increase in commercial solutions , which includes $ 158 million from the merger with ims health , partially offset by a decline in the legacy service offerings , a $ 32 million increase in research & development solutions , which includes the incremental impact from the businesses that quest contributed to q2 solutions , a $ 3 million increase in integrated engagement services , and a $ 29 million increase in general corporate and unallocated expenses , which includes $ 37 million from the merger with ims health .
the constant currency increase in general corporate and unallocated expenses in 2016 was primarily due to higher stock-based compensation expense .
2015 compared to 2014 the $ 34 million increase in selling , general and administrative expenses in 2015 included a constant currency increase of $ 74 million , or 9.5% ( 9.5 % ) , partially offset by a positive impact of approximately $ 42 million from the effects of foreign currency fluctuations .
the constant currency growth was comprised of a $ 14 million increase in commercial solutions , which included the impact from the encore acquisition which closed in july 2014 , a $ 40 million increase in research & development solutions , which included the incremental impact from the businesses that quest contributed to q2 solutions , a $ 4 million increase in integrated engagement services , and a $ 14 million increase in general corporate and unallocated expenses .
the constant currency increase in general corporate and unallocated expenses in 2015 was primarily due to higher stock-based compensation expense and costs associated with the q2 solutions transaction.


backlog backlog decreased in 2015 compared to 2014 primarily due to sales being recognized on several multi-year programs ( such as hmsc , nisc iii , ciog and nsf asc ) related to prior year awards and a limited number of large new business awards .
backlog decreased in 2014 compared to 2013 primarily due to lower customer funding levels and declining activities on direct warfighter support programs impacted by defense budget reductions .
trends we expect is&gs 2019 2016 net sales to decline in the high-single digit percentage range as compared to 2015 , primarily driven by key loss contracts in an increasingly competitive environment , along with volume contraction on the segment 2019s major contracts .
operating profit is expected to decline at a higher percentage range in 2016 , as compared to net sales percentage declines , driven by higher margin program losses and re-compete programs awarded at lower margins .
accordingly , 2016 margins are expected to be lower than 2015 results .
missiles and fire control our mfc business segment provides air and missile defense systems ; tactical missiles and air-to-ground precision strike weapon systems ; logistics ; fire control systems ; mission operations support , readiness , engineering support and integration services ; manned and unmanned ground vehicles ; and energy management solutions .
mfc 2019s major programs include pac-3 , thaad , multiple launch rocket system , hellfire , jassm , javelin , apache , sniper ae , low altitude navigation and targeting infrared for night ( lantirn ae ) and sof clss .
mfc 2019s operating results included the following ( in millions ) : .

                    | 2015             | 2014             | 2013
------------------- | ---------------- | ---------------- | ----------------
net sales           | $ 6770           | $ 7092           | $ 6795
operating profit    | 1282             | 1344             | 1379
operating margins   | 18.9% ( 18.9 % ) | 19.0% ( 19.0 % ) | 20.3% ( 20.3 % )
backlog at year-end | $ 15500          | $ 13300          | $ 14300

2015 compared to 2014 mfc 2019s net sales in 2015 decreased $ 322 million , or 5% ( 5 % ) , compared to the same period in 2014 .
the decrease was attributable to lower net sales of approximately $ 345 million for air and missile defense programs due to fewer deliveries ( primarily pac-3 ) and lower volume ( primarily thaad ) ; and approximately $ 85 million for tactical missile programs due to fewer deliveries ( primarily guided multiple launch rocket system ( gmlrs ) ) and joint air-to-surface standoff missile , partially offset by increased deliveries for hellfire .
these decreases were partially offset by higher net sales of approximately $ 55 million for energy solutions programs due to increased volume .
mfc 2019s operating profit in 2015 decreased $ 62 million , or 5% ( 5 % ) , compared to 2014 .
the decrease was attributable to lower operating profit of approximately $ 100 million for fire control programs due primarily to lower risk retirements ( primarily lantirn and sniper ) ; and approximately $ 65 million for tactical missile programs due to lower risk retirements ( primarily hellfire and gmlrs ) and fewer deliveries .
these decreases were partially offset by higher operating profit of approximately $ 75 million for air and missile defense programs due to increased risk retirements ( primarily thaad ) .
adjustments not related to volume , including net profit booking rate adjustments and other matters , were approximately $ 60 million lower in 2015 compared to 2014 .
2014 compared to 2013 mfc 2019s net sales increased $ 297 million , or 4% ( 4 % ) , in 2014 as compared to 2013 .
the increase was primarily attributable to higher net sales of approximately $ 180 million for air and missile defense programs primarily due to increased volume for thaad ; about $ 115 million for fire control programs due to increased deliveries ( including apache ) ; and about $ 125 million for various other programs due to increased volume .
these increases were partially offset by lower net sales of approximately $ 115 million for tactical missile programs due to fewer deliveries ( primarily high mobility artillery rocket system and army tactical missile system ) .
mfc 2019s operating profit decreased $ 35 million , or 3% ( 3 % ) , in 2014 as compared to 2013 .
the decrease was primarily attributable to lower operating profit of about $ 20 million for tactical missile programs due to net warranty reserve adjustments for various programs ( including jassm and gmlrs ) and fewer deliveries ; and approximately $ 45 million for various other programs due to lower risk retirements .
the decreases were offset by higher operating profit of approximately $ 20 million for air and missile defense programs due to increased volume ( primarily thaad and pac-3 ) ; and about


earnings were remitted as dividends after payment of all deferred taxes .
as more than 90% ( 90 % ) of the undistributed earnings are in countries with a statutory tax rate of 24% ( 24 % ) or higher , we do not generate a disproportionate amount of taxable income in countries with very low tax rates .
a reconciliation of the beginning and ending amount of the unrecognized tax benefits is as follows: .

unrecognized tax benefits                       | 2013         | 2012           | 2011
----------------------------------------------- | ------------ | -------------- | --------------
balance at beginning of year                    | $ 110.8      | $ 126.4        | $ 197.8
additions for tax positions of the current year | 12.7         | 44.5           | 16.3
additions for tax positions of prior years      | 9.0          | 2.3            | 5.7
reductions for tax positions of prior years     | -.5 ( .5 )   | -46.9 ( 46.9 ) | -72.4 ( 72.4 )
settlements                                     | -1.4 ( 1.4 ) | -11.0 ( 11.0 ) | -15.6 ( 15.6 )
statute of limitations expiration               | -8.0 ( 8.0 ) | -3.7 ( 3.7 )   | -4.8 ( 4.8 )
foreign currency translation                    | 1.7          | -.8 ( .8 )     | -.6 ( .6 )
balance at end of year                          | $ 124.3      | $ 110.8        | $ 126.4

at 30 september 2013 and 2012 , we had $ 124.3 and $ 110.8 of unrecognized tax benefits , excluding interest and penalties , of which $ 63.1 and $ 56.9 , respectively , would impact the effective tax rate if recognized .
interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense and totaled $ 2.4 in 2013 , $ ( 26.1 ) in 2012 , and $ ( 2.4 ) in 2011 .
our accrued balance for interest and penalties was $ 8.1 and $ 7.2 in 2013 and 2012 , respectively .
we were challenged by the spanish tax authorities over income tax deductions taken by certain of our spanish subsidiaries during fiscal years 2005 20132011 .
in november 2011 , we reached a settlement with the spanish tax authorities for 20ac41.3 million ( $ 56 ) in resolution of all tax issues under examination .
this settlement increased our income tax expense for the fiscal year ended 30 september 2012 by $ 43.8 ( $ .20 per share ) and had a 3.3% ( 3.3 % ) impact on our effective tax rate .
as a result of this settlement , we recorded a reduction in unrecognized tax benefits of $ 6.4 for tax positions taken in prior years and $ 11.0 for settlements .
on 25 january 2012 , the spanish supreme court released its decision in favor of our spanish subsidiary related to certain tax transactions for years 1991 and 1992 , a period before we controlled this subsidiary .
as a result , in the second quarter of 2012 , we recorded a reduction in income tax expense of $ 58.3 ( $ .27 per share ) , resulting in a 4.4% ( 4.4 % ) reduction in our effective tax rate for the fiscal year ended 30 september 2012 .
as a result of this ruling , we recorded a reduction in unrecognized tax benefits of $ 38.3 for tax positions taken in prior years .
during the third quarter of 2012 , our unrecognized tax benefits increased $ 33.3 as a result of certain tax positions taken in conjunction with the disposition of our homecare business .
when resolved , these benefits will be recognized in 201cincome from discontinued operations , net of tax 201d on our consolidated income statements and will not impact our effective tax rate .
for additional information , see note 3 , discontinued operations .
in the third quarter of 2011 , a u.s .
internal revenue service audit over tax years 2007 and 2008 was completed , resulting in a decrease in unrecognized tax benefits of $ 36.0 and a favorable impact to earnings of $ 23.9 .
this included a tax benefit of $ 8.9 ( $ .04 per share ) recognized in income from discontinued operations for fiscal year 2011 , as it relates to the previously divested u.s .
healthcare business .
we are also currently under examination in a number of tax jurisdictions , some of which may be resolved in the next twelve months .
as a result , it is reasonably possible that a change in the unrecognized tax benefits may occur during the next twelve months .
however , quantification of an estimated range cannot be made at this time.


to determine stock-based compensation expense , the grant- date fair value is applied to the options granted with a reduction for estimated forfeitures .
we recognize compensation expense for stock options on a straight-line basis over the pro rata vesting period .
at december 31 , 2011 and 2010 , options for 12337000 and 13397000 shares of common stock were exercisable at a weighted-average price of $ 106.08 and $ 118.21 , respectively .
the total intrinsic value of options exercised during 2012 , 2011 and 2010 was $ 37 million , $ 4 million and $ 5 million .
cash received from option exercises under all incentive plans for 2012 , 2011 and 2010 was approximately $ 118 million , $ 41 million and $ 15 million , respectively .
the actual tax benefit realized for tax deduction purposes from option exercises under all incentive plans for 2012 , 2011 and 2010 was approximately $ 41 million , $ 14 million and $ 5 million , respectively .
there were no options granted in excess of market value in 2012 , 2011 or 2010 .
shares of common stock available during the next year for the granting of options and other awards under the incentive plans were 29192854 at december 31 , 2012 .
total shares of pnc common stock authorized for future issuance under equity compensation plans totaled 30537674 shares at december 31 , 2012 , which includes shares available for issuance under the incentive plans and the employee stock purchase plan ( espp ) as described below .
during 2012 , we issued approximately 1.7 million shares from treasury stock in connection with stock option exercise activity .
as with past exercise activity , we currently intend to utilize primarily treasury stock for any future stock option exercises .
awards granted to non-employee directors in 2012 , 2011 and 2010 include 25620 , 27090 and 29040 deferred stock units , respectively , awarded under the outside directors deferred stock unit plan .
a deferred stock unit is a phantom share of our common stock , which requires liability accounting treatment until such awards are paid to the participants as cash .
as there are no vesting or service requirements on these awards , total compensation expense is recognized in full on awarded deferred stock units on the date of grant .
incentive/performance unit share awards and restricted stock/unit awards the fair value of nonvested incentive/performance unit share awards and restricted stock/unit awards is initially determined based on prices not less than the market value of our common stock price on the date of grant .
the value of certain incentive/ performance unit share awards is subsequently remeasured based on the achievement of one or more financial and other performance goals generally over a three-year period .
the personnel and compensation committee of the board of directors approves the final award payout with respect to incentive/performance unit share awards .
restricted stock/unit awards have various vesting periods generally ranging from 36 months to 60 months .
beginning in 2012 , we incorporated several risk-related performance changes to certain incentive compensation programs .
in addition to achieving certain financial performance metrics relative to our peers , the final payout amount will be subject to a negative adjustment if pnc fails to meet certain risk-related performance metrics as specified in the award agreement .
however , the p&cc has the discretion to reduce any or all of this negative adjustment under certain circumstances .
these awards have a three-year performance period and are payable in either stock or a combination of stock and cash .
additionally , performance-based restricted share units were granted in 2012 to certain of our executives in lieu of stock options , with generally the same terms and conditions as the 2011 awards of the same .
the weighted-average grant-date fair value of incentive/ performance unit share awards and restricted stock/unit awards granted in 2012 , 2011 and 2010 was $ 60.68 , $ 63.25 and $ 54.59 per share , respectively .
we recognize compensation expense for such awards ratably over the corresponding vesting and/or performance periods for each type of program .
table 130 : nonvested incentive/performance unit share awards and restricted stock/unit awards 2013 rollforward shares in thousands nonvested incentive/ performance unit shares weighted- average date fair nonvested restricted stock/ shares weighted- average date fair .

shares in thousands december 31 2011 | nonvested incentive/ performance unit shares 830 | weighted-averagegrantdate fairvalue $ 61.68 | nonvested restricted stock/ unit shares 2512 | weighted-averagegrantdate fairvalue $ 54.87
------------------------------------ | ------------------------------------------------ | ------------------------------------------- | -------------------------------------------- | -------------------------------------------
granted                              | 465                                              | 60.70                                       | 1534                                         | 60.67
vested                               | -100 ( 100 )                                     | 64.21                                       | -831 ( 831 )                                 | 45.47
forfeited                            | -76 ( 76 )                                       | 60.27                                       | -154 ( 154 )                                 | 60.51
december 31 2012                     | 1119                                             | $ 61.14                                     | 3061                                         | $ 60.04

in the chart above , the unit shares and related weighted- average grant-date fair value of the incentive/performance awards exclude the effect of dividends on the underlying shares , as those dividends will be paid in cash .
at december 31 , 2012 , there was $ 86 million of unrecognized deferred compensation expense related to nonvested share- based compensation arrangements granted under the incentive plans .
this cost is expected to be recognized as expense over a period of no longer than five years .
the total fair value of incentive/performance unit share and restricted stock/unit awards vested during 2012 , 2011 and 2010 was approximately $ 55 million , $ 52 million and $ 39 million , respectively .
the pnc financial services group , inc .
2013 form 10-k 203


fhlb advances and other borrowings fhlb advances 2014the company had $ 0.7 billion in floating-rate and $ 0.2 billion in fixed-rate fhlb advances at both december 31 , 2013 and 2012 .
the floating-rate advances adjust quarterly based on the libor .
during the year ended december 31 , 2012 , $ 650.0 million of fixed-rate fhlb advances were converted to floating-rate for a total cost of approximately $ 128 million which was capitalized and will be amortized over the remaining maturities using the effective interest method .
in addition , during the year ended december 31 , 2012 , the company paid down in advance of maturity $ 1.0 billion of its fhlb advances and recorded $ 69.1 million in losses on the early extinguishment .
this loss was recorded in the gains ( losses ) on early extinguishment of debt line item in the consolidated statement of income ( loss ) .
the company did not have any similar transactions for the years ended december 31 , 2013 and 2011 .
as a condition of its membership in the fhlb atlanta , the company is required to maintain a fhlb stock investment currently equal to the lesser of : a percentage of 0.12% ( 0.12 % ) of total bank assets ; or a dollar cap amount of $ 20 million .
additionally , the bank must maintain an activity based stock investment which is currently equal to 4.5% ( 4.5 % ) of the bank 2019s outstanding advances at the time of borrowing .
the company had an investment in fhlb stock of $ 61.4 million and $ 67.4 million at december 31 , 2013 and 2012 , respectively .
the company must also maintain qualified collateral as a percent of its advances , which varies based on the collateral type , and is further adjusted by the outcome of the most recent annual collateral audit and by fhlb 2019s internal ranking of the bank 2019s creditworthiness .
these advances are secured by a pool of mortgage loans and mortgage-backed securities .
at december 31 , 2013 and 2012 , the company pledged loans with a lendable value of $ 3.9 billion and $ 4.8 billion , respectively , of the one- to four-family and home equity loans as collateral in support of both its advances and unused borrowing lines .
other borrowings 2014prior to 2008 , etbh raised capital through the formation of trusts , which sold trust preferred securities in the capital markets .
the capital securities must be redeemed in whole at the due date , which is generally 30 years after issuance .
each trust issued floating rate cumulative preferred securities ( 201ctrust preferred securities 201d ) , at par with a liquidation amount of $ 1000 per capital security .
the trusts used the proceeds from the sale of issuances to purchase floating rate junior subordinated debentures ( 201csubordinated debentures 201d ) issued by etbh , which guarantees the trust obligations and contributed proceeds from the sale of its subordinated debentures to e*trade bank in the form of a capital contribution .
the most recent issuance of trust preferred securities occurred in 2007 .
the face values of outstanding trusts at december 31 , 2013 are shown below ( dollars in thousands ) : trusts face value maturity date annual interest rate .

trusts                               | face value | maturity date | annual interest rate
------------------------------------ | ---------- | ------------- | ------------------------------------------------
etbh capital trust ii                | $ 5000     | 2031          | 10.25% ( 10.25 % )
etbh capital trust i                 | 20000      | 2031          | 3.75% ( 3.75 % ) above 6-month libor
etbh capital trust v vi viii         | 51000      | 2032          | 3.25%-3.65% ( 3.25%-3.65 % ) above 3-month libor
etbh capital trust vii ix 2014xii    | 65000      | 2033          | 3.00%-3.30% ( 3.00%-3.30 % ) above 3-month libor
etbh capital trust xiii 2014xviii xx | 77000      | 2034          | 2.45%-2.90% ( 2.45%-2.90 % ) above 3-month libor
etbh capital trust xix xxi xxii      | 60000      | 2035          | 2.20%-2.40% ( 2.20%-2.40 % ) above 3-month libor
etbh capital trust xxiii 2014xxiv    | 45000      | 2036          | 2.10% ( 2.10 % ) above 3-month libor
etbh capital trust xxv 2014xxx       | 110000     | 2037          | 1.90%-2.00% ( 1.90%-2.00 % ) above 3-month libor
total                                | $ 433000   |               |


z i m m e r h o l d i n g s , i n c .
a n d s u b s i d i a r i e s 2 0 0 3 f o r m 1 0 - k notes to consolidated financial statements ( continued ) the unaudited pro forma results for 2003 include events or changes in circumstances indicate that the carrying $ 90.4 million of expense related to centerpulse hip and knee value of an asset may not be recoverable .
an impairment loss litigation , $ 54.4 million of cash income tax benefits as a result would be recognized when estimated future cash flows of centerpulse electing to carry back its 2002 u.s .
federal net relating to the asset are less than its carrying amount .
operating loss for 5 years versus 10 years , which resulted in depreciation of instruments is recognized as selling , general more losses being carried forward to future years and less and administrative expense , consistent with the classification tax credits going unutilized due to the shorter carry back of instrument cost in periods prior to january 1 , 2003 .
period and an $ 8.0 million gain on sale of orquest inc. , an prior to january 1 , 2003 , undeployed instruments were investment previously held by centerpulse .
the unaudited carried as a prepaid expense at cost , net of allowances for pro forma results are not necessarily indicative either of the obsolescence ( $ 54.8 million , net , at december 31 , 2002 ) , and results of operations that actually would have resulted had recognized in selling , general and administrative expense in the exchange offers been in effect at the beginning of the the year in which the instruments were placed into service .
respective years or of future results .
the new method of accounting for instruments was adopted to recognize the cost of these important assets of the transfx company 2019s business within the consolidated balance sheet on june 25 , 2003 , the company acquired the transfx and meaningfully allocate the cost of these assets over the external fixation system product line from immedica , inc .
periods benefited , typically five years .
for approximately $ 14.8 million cash , which has been the effect of the change during the year ended allocated primarily to goodwill and technology based december 31 , 2003 was to increase earnings before intangible assets .
the company has sold the transfx cumulative effect of change in accounting principle by product line since early 2001 under a distribution agreement $ 26.8 million ( $ 17.8 million net of tax ) , or $ 0.08 per diluted with immedica .
share .
the cumulative effect adjustment of $ 55.1 million ( net of income taxes of $ 34.0 million ) to retroactively apply the implex corp .
new capitalization method as if applied in years prior to 2003 on march 2 , 2004 , the company entered into an is included in earnings during the year ended december 31 , amended and restated merger agreement relating to the 2003 .
the pro forma amounts shown on the consolidated acquisition of implex corp .
( 2018 2018implex 2019 2019 ) , a privately held statement of earnings have been adjusted for the effect of orthopaedics company based in new jersey , for cash .
each the retroactive application on depreciation and related share of implex stock will be converted into the right to income taxes .
receive cash having an aggregate value of approximately $ 108.0 million at closing and additional cash earn-out 5 .
inventories payments that are contingent on the growth of implex inventories at december 31 , 2003 and 2002 , consist of product sales through 2006 .
the net value transferred at the following ( in millions ) : closing will be approximately $ 89 million , which includes .

                                   | 2003    | 2002
---------------------------------- | ------- | -------
finished goods                     | $ 384.3 | $ 206.7
raw materials and work in progress | 90.8    | 50.9
inventory step-up                  | 52.6    | 2013
inventories net                    | $ 527.7 | $ 257.6

made by zimmer to implex pursuant to their existing alliance raw materials and work in progress 90.8 50.9 arrangement , escrow and other items .
the acquisition will be inventory step-up 52.6 2013 accounted for under the purchase method of accounting .
inventories , net $ 527.7 $ 257.6 reserves for obsolete and slow-moving inventory at4 .
change in accounting principle december 31 , 2003 and 2002 were $ 47.4 million and instruments are hand held devices used by orthopaedic $ 45.5 million , respectively .
provisions charged to expense surgeons during total joint replacement and other surgical were $ 11.6 million , $ 6.0 million and $ 11.9 million for the procedures .
effective january 1 , 2003 , instruments are years ended december 31 , 2003 , 2002 and 2001 , respectively .
recognized as long-lived assets and are included in property , amounts written off against the reserve were $ 11.7 million , plant and equipment .
undeployed instruments are carried at $ 7.1 million and $ 8.5 million for the years ended cost , net of allowances for obsolescence .
instruments in the december 31 , 2003 , 2002 and 2001 , respectively .
field are carried at cost less accumulated depreciation .
following the acquisition of centerpulse , the company depreciation is computed using the straight-line method established a common approach for estimating excess based on average estimated useful lives , determined inventory and instruments .
this change in estimate resulted principally in reference to associated product life cycles , in a charge to earnings of $ 3.0 million after tax in the fourth primarily five years .
in accordance with sfas no .
144 , the quarter .
company reviews instruments for impairment whenever


part a0iii item a010 .
directors , executive officers and corporate governance for the information required by this item a010 with respect to our executive officers , see part a0i , item 1 .
of this report .
for the other information required by this item a010 , see 201celection of directors , 201d 201cnominees for election to the board of directors , 201d 201ccorporate governance 201d and 201csection a016 ( a ) beneficial ownership reporting compliance , 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference .
the proxy statement for our 2019 annual meeting will be filed within 120 a0days after the end of the fiscal year covered by this annual report on form 10-k .
item a011 .
executive compensation for the information required by this item a011 , see 201ccompensation discussion and analysis , 201d 201ccompensation committee report , 201d and 201cexecutive compensation 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference .
item a012 .
security ownership of certain beneficial owners and management and related stockholder matters for the information required by this item a012 with respect to beneficial ownership of our common stock , see 201csecurity ownership of certain beneficial owners and management 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference .
the following table sets forth certain information as of december a031 , 2018 regarding our equity plans : plan category number of securities to be issued upon exercise of outstanding options , warrants and rights ( 1 ) weighted-average exercise price of outstanding options , warrants and rights number of securities remaining available for future issuance under equity compensation plans ( excluding securities reflected in column ( a ) ( b ) ( c ) equity compensation plans approved by security holders 1471449 $ 136.62 3578241 ( 1 ) the number of securities in column ( a ) include 22290 shares of common stock underlying performance stock units if maximum performance levels are achieved ; the actual number of shares , if any , to be issued with respect to the performance stock units will be based on performance with respect to specified financial and relative stock price measures .
item a013 .
certain relationships and related transactions , and director independence for the information required by this item a013 , see 201ccertain transactions 201d and 201ccorporate governance 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference .
item a014 .
principal accounting fees and services for the information required by this item a014 , see 201caudit and non-audit fees 201d and 201caudit committee pre-approval procedures 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference. .

plan category                                          | number of securitiesto be issued uponexercise ofoutstanding options warrants and rights ( 1 ) ( a ) ( b ) | weighted-averageexercise price ofoutstanding options warrants and rights | number of securitiesremaining available forfuture issuance underequity compensationplans ( excludingsecurities reflected in column ( a ) ) ( c )
------------------------------------------------------ | --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------
equity compensation plans approved by security holders | 1471449                                                                                | $ 136.62                                                                 | 3578241

part a0iii item a010 .
directors , executive officers and corporate governance for the information required by this item a010 with respect to our executive officers , see part a0i , item 1 .
of this report .
for the other information required by this item a010 , see 201celection of directors , 201d 201cnominees for election to the board of directors , 201d 201ccorporate governance 201d and 201csection a016 ( a ) beneficial ownership reporting compliance , 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference .
the proxy statement for our 2019 annual meeting will be filed within 120 a0days after the end of the fiscal year covered by this annual report on form 10-k .
item a011 .
executive compensation for the information required by this item a011 , see 201ccompensation discussion and analysis , 201d 201ccompensation committee report , 201d and 201cexecutive compensation 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference .
item a012 .
security ownership of certain beneficial owners and management and related stockholder matters for the information required by this item a012 with respect to beneficial ownership of our common stock , see 201csecurity ownership of certain beneficial owners and management 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference .
the following table sets forth certain information as of december a031 , 2018 regarding our equity plans : plan category number of securities to be issued upon exercise of outstanding options , warrants and rights ( 1 ) weighted-average exercise price of outstanding options , warrants and rights number of securities remaining available for future issuance under equity compensation plans ( excluding securities reflected in column ( a ) ( b ) ( c ) equity compensation plans approved by security holders 1471449 $ 136.62 3578241 ( 1 ) the number of securities in column ( a ) include 22290 shares of common stock underlying performance stock units if maximum performance levels are achieved ; the actual number of shares , if any , to be issued with respect to the performance stock units will be based on performance with respect to specified financial and relative stock price measures .
item a013 .
certain relationships and related transactions , and director independence for the information required by this item a013 , see 201ccertain transactions 201d and 201ccorporate governance 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference .
item a014 .
principal accounting fees and services for the information required by this item a014 , see 201caudit and non-audit fees 201d and 201caudit committee pre-approval procedures 201d in the proxy statement for our 2019 annual meeting , which information is incorporated herein by reference.


stock performance graph the following line-graph presentation compares our cumulative shareholder returns with the standard & poor 2019s information technology index and the standard & poor 2019s 500 stock index for the past five years .
the line graph assumes the investment of $ 100 in our common stock , the standard & poor 2019s information technology index , and the standard & poor 2019s 500 stock index on may 31 , 2002 and assumes reinvestment of all dividends .
comparison of 5 year cumulative total return* among global payments inc. , the s&p 500 index and the s&p information technology index 5/02 5/03 5/04 5/05 5/06 5/07 global payments inc .
s&p 500 s&p information technology * $ 100 invested on 5/31/02 in stock or index-including reinvestment of dividends .
fiscal year ending may 31 .
global payments s&p 500 information technology .

            | global payments | s&p 500  | s&p information technology
----------- | --------------- | -------- | --------------------------
may 31 2002 | $ 100.00        | $ 100.00 | $ 100.00
may 31 2003 | 94.20           | 91.94    | 94.48
may 31 2004 | 129.77          | 108.79   | 115.24
may 31 2005 | 193.30          | 117.75   | 116.29
may 31 2006 | 260.35          | 127.92   | 117.14
may 31 2007 | 224.24          | 157.08   | 144.11

issuer purchases of equity securities on april 5 , 2007 , our board of directors authorized repurchases of our common stock in an amount up to $ 100 million .
the board has authorized us to purchase shares from time to time as market conditions permit .
there is no expiration date with respect to this authorization .
no amounts have been repurchased during the fiscal year ended may 31 , 2007.


hologic , inc .
notes to consolidated financial statements ( continued ) ( in thousands , except per share data ) restructuring accrual as a result of the cytyc merger , the company assumed previous cytyc management approved restructuring plans designed to reduce future operating expenses by consolidating its mountain view , california operations into its existing operations in costa rica and massachusetts as well as restructuring plans relating to cytyc 2019s historical acquisitions completed in march 2007 .
in connection with these plans , the company assumed a total liability of approximately $ 4658 .
during the twelve months ended september 27 , 2008 , the company did not incur any additional restructuring costs related to retention costs for these employees .
as a result of the third wave acquisition , the company assumed previous third wave management approved restructuring plans designed to reduce future operating expenses .
in connection with these plans , the company assumed a total liability related to termination benefits of approximately $ 7509 .
the company did not incur any additional restructuring costs related to retention costs for these employees from the date of acquisition through september 27 , 2008 .
we anticipate that these costs will be paid in full during fiscal 2009 .
additionally , the company recorded a liability related to the cytyc merger in accordance with eitf 95-3 as detailed below , primarily related to the termination of certain employees as well as minimum inventory purchase commitments and other contractual obligations for which business activities have been discontinued .
during the twelve months ended september 27 , 2008 the company incurred approximately $ 6.4 million of expense related to the resignation of the chairman of the board of directors , which is not included in the table below ( see note 12 ) .
changes in the restructuring accrual for the twelve months ended september 27 , 2008 were as follows : twelve months ended september 27 , 2008 termination benefits .

other                                    | twelve months ended september 27 2008 other | twelve months ended september 27 2008
---------------------------------------- | ------------------------------------------- | -------------------------------------
beginning balance                        | $ 2014                                      | $ 105
cytyc balance acquired october 22 2007   | 2014                                        | 4658
third wave balance acquired july 24 2008 | 261                                         | 7029
provided for under eitf no . 95-3        | 1820                                        | 1020
adjustments                              | -382 ( 382 )                                | -270 ( 270 )
payments                                 | -817 ( 817 )                                | -11233 ( 11233 )
ending balance                           | $ 882                                       | $ 1309

as of the dates of acquisition of aeg elektrofotografie gmbh ( 201caeg 201d ) , r2 technology , inc .
( 201cr2 201d ) and suros surgical , inc .
( 201csuros 201d ) ( see note 3 ) , management of the company implemented and finalized plans to involuntarily terminate certain employees of the acquired companies .
these plans resulted in a liability for costs associated with an employee severance arrangement of approximately $ 3135 in accordance with eitf issue no .
95-3 , recognition of liabilities in connection with a purchase business combination .
as of september 29 , 2007 , all amounts other than $ 105 had been paid .
the company had made full payment on this remaining liability as of september 27 , 2008 .
advertising costs advertising costs are charged to operations as incurred .
the company does not have any direct-response advertising .
advertising costs , which include trade shows and conventions , were approximately $ 15281 , $ 6683 and $ 5003 for fiscal 2008 , 2007 and 2006 , respectively , and were included in selling and marketing expense in the consolidated statements of operations.


available , we do not expect any transactions to have a significant impact on our reported income tax expense .
in connection with the completion of the reorganization , we will reevaluate the ability to realize our deferred tax assets related to u.s .
operations under the new aon uk corporate structure and we may recognize a non-cash , deferred tax expense upon the conclusion of this evaluation .
based on information currently available , we do not expect the additional deferred tax expense , if any , to be significant .
the reorganization will result in additional ongoing costs to us .
the completion of the reorganization will result in an increase in some of our ongoing expenses and require us to incur some new expenses .
some costs , including those related to employees in our u.k .
offices and holding board meetings in the u.k. , are expected to be higher than would be the case if our principal executive offices were not relocated to the u.k. .
we also expect to incur new expenses , including professional fees and sdrt in connection with settlement of equity-based awards under our stock or share incentive plans , to comply with u.k .
corporate and tax laws .
item 1b .
unresolved staff comments .
item 2 .
properties .
we have offices in various locations throughout the world .
substantially all of our offices are located in leased premises .
we maintain our corporate headquarters at 200 e .
randolph street in chicago , illinois , where we occupy approximately 355000 square feet of space under an operating lease agreement that expires in 2013 .
there are two five-year renewal options at current market rates .
we own one building at pallbergweg 2-4 , amsterdam , the netherlands ( 150000 square feet ) .
the following are additional significant leased properties , along with the occupied square footage and expiration. .

property:                                                  | occupied square footage | lease expiration dates
---------------------------------------------------------- | ----------------------- | ----------------------
4 overlook point and other locations lincolnshire illinois | 1224000                 | 2014 2013 2019
2601 research forest drive the woodlands texas             | 414000                  | 2020
dlf city and unitech cyber park gurgaan india              | 383000                  | 2012 2013 2014
2300 discovery drive orlando florida                       | 364000                  | 2020
devonshire square and other locations london uk            | 327000                  | 2018 2013 2023
199 water street new york new york                         | 319000                  | 2018
7201 hewitt associates drive charlotte north carolina      | 218000                  | 2015

7201 hewitt associates drive , charlotte , north carolina .
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218000 2015 the locations in lincolnshire , illinois , the woodlands , texas , orlando , florida , and charlotte north carolina , each of which were acquired as part of the hewitt acquisition in 2010 , are primarily dedicated to our hr solutions segment .
the other locations listed above house personnel from each of our business segments .
in november 2011 , aon entered into an agreement to lease 190000 square feet in a new building to be constructed in london , united kingdom .
the agreement is contingent upon the completion of the building construction .
aon expects to move into the new building in 2015 when it exercises an early break option at the devonshire square location.


our international crude oil production is relatively sweet and is generally sold in relation to the brent crude benchmark .
the differential between wti and brent average prices widened significantly in 2011 and remained in 2012 in comparison to almost no differential in 2010 .
natural gas 2013 a significant portion of our natural gas production in the lower 48 states of the u.s .
is sold at bid-week prices or first-of-month indices relative to our specific producing areas .
average henry hub settlement prices for natural gas were lower in 2012 than in recent years .
a decline in average settlement date henry hub natural gas prices began in september 2011 and continued into 2012 .
although prices stabilized in late 2012 , they have not increased appreciably .
our other major natural gas-producing regions are e.g .
and europe .
in the case of e.g .
our natural gas sales are subject to term contracts , making realizations less volatile .
because natural gas sales from e.g .
are at fixed prices , our worldwide reported average natural gas realizations may not fully track market price movements .
natural gas prices in europe have been significantly higher than in the u.s .
oil sands mining the osm segment produces and sells various qualities of synthetic crude oil .
output mix can be impacted by operational problems or planned unit outages at the mines or upgrader .
sales prices for roughly two-thirds of the normal output mix will track movements in wti and one-third will track movements in the canadian heavy sour crude oil marker , primarily wcs .
in 2012 , the wcs discount from wti had increased , putting downward pressure on our average realizations .
the operating cost structure of the osm operations is predominantly fixed and therefore many of the costs incurred in times of full operation continue during production downtime .
per-unit costs are sensitive to production rates .
key variable costs are natural gas and diesel fuel , which track commodity markets such as the canadian alberta energy company ( "aeco" ) natural gas sales index and crude oil prices , respectively .
the table below shows average benchmark prices that impact both our revenues and variable costs. .

benchmark                                                | 2012    | 2011    | 2010
-------------------------------------------------------- | ------- | ------- | -------
wti crude oil ( dollars per bbl )                        | $ 94.15 | $ 95.11 | $ 79.61
wcs ( dollars per bbl ) ( a )                            | $ 73.18 | $ 77.97 | $ 65.31
aeco natural gas sales index ( dollars per mmbtu ) ( b ) | $ 2.39  | $ 3.68  | $ 3.89

wcs ( dollars per bbl ) ( a ) $ 73.18 $ 77.97 $ 65.31 aeco natural gas sales index ( dollars per mmbtu ) ( b ) $ 2.39 $ 3.68 $ 3.89 ( a ) monthly pricing based upon average wti adjusted for differentials unique to western canada .
( b ) monthly average day ahead index .
integrated gas our ig operations include production and marketing of products manufactured from natural gas , such as lng and methanol , in e.g .
world lng trade in 2012 has been estimated to be 240 mmt .
long-term , lng continues to be in demand as markets seek the benefits of clean burning natural gas .
market prices for lng are not reported or posted .
in general , lng delivered to the u.s .
is tied to henry hub prices and will track with changes in u.s .
natural gas prices , while lng sold in europe and asia is indexed to crude oil prices and will track the movement of those prices .
we have a 60 percent ownership in an lng production facility in e.g. , which sells lng under a long-term contract at prices tied to henry hub natural gas prices .
gross sales from the plant were 3.8 mmt , 4.1 mmt and 3.7 mmt in 2012 , 2011 and 2010 .
we own a 45 percent interest in a methanol plant located in e.g .
through our investment in ampco .
gross sales of methanol from the plant totaled 1.1 mmt , 1.0 mmt and 0.9 mmt in 2012 , 2011 and 2010 .
methanol demand has a direct impact on ampco 2019s earnings .
because global demand for methanol is rather limited , changes in the supply-demand balance can have a significant impact on sales prices .
world demand for methanol in 2012 has been estimated to be 49 mmt .
our plant capacity of 1.1 mmt is about 2 percent of world demand.


entergy texas , inc .
management's financial discussion and analysis dividends or other distributions on its common stock .
currently , all of entergy texas' retained earnings are available for distribution .
sources of capital entergy texas' sources to meet its capital requirements include : internally generated funds ; cash on hand ; debt or preferred stock issuances ; and bank financing under new or existing facilities .
entergy texas may refinance or redeem debt prior to maturity , to the extent market conditions and interest and dividend rates are favorable .
all debt and common and preferred stock issuances by entergy texas require prior regulatory approval .
preferred stock and debt issuances are also subject to issuance tests set forth in its corporate charter , bond indentures , and other agreements .
entergy texas has sufficient capacity under these tests to meet its foreseeable capital needs .
entergy gulf states , inc .
filed with the ferc an application , on behalf of entergy texas , for authority to issue up to $ 200 million of short-term debt , up to $ 300 million of tax-exempt bonds , and up to $ 1.3 billion of other long- term securities , including common and preferred or preference stock and long-term debt .
on november 8 , 2007 , the ferc issued orders granting the requested authority for a two-year period ending november 8 , 2009 .
entergy texas' receivables from or ( payables to ) the money pool were as follows as of december 31 for each of the following years: .

2008             | 2007             | 2006             | 2005
---------------- | ---------------- | ---------------- | ----------------
( in thousands ) | ( in thousands ) | ( in thousands ) | ( in thousands )
( $ 50794 )      | $ 154176         | $ 97277          | $ 136545

see note 4 to the financial statements for a description of the money pool .
entergy texas has a credit facility in the amount of $ 100 million scheduled to expire in august 2012 .
as of december 31 , 2008 , $ 100 million was outstanding on the credit facility .
in february 2009 , entergy texas repaid its credit facility with the proceeds from the bond issuance discussed below .
on june 2 , 2008 and december 8 , 2008 , under the terms of the debt assumption agreement between entergy texas and entergy gulf states louisiana that is discussed in note 5 to the financial statements , entergy texas paid at maturity $ 148.8 million and $ 160.3 million , respectively , of entergy gulf states louisiana first mortgage bonds , which results in a corresponding decrease in entergy texas' debt assumption liability .
in december 2008 , entergy texas borrowed $ 160 million from its parent company , entergy corporation , under a $ 300 million revolving credit facility pursuant to an inter-company credit agreement between entergy corporation and entergy texas .
this borrowing would have matured on december 3 , 2013 .
entergy texas used these borrowings , together with other available corporate funds , to pay at maturity the portion of the $ 350 million floating rate series of first mortgage bonds due december 2008 that had been assumed by entergy texas , and that bond series is no longer outstanding .
in january 2009 , entergy texas repaid its $ 160 million note payable to entergy corporation with the proceeds from the bond issuance discussed below .
in january 2009 , entergy texas issued $ 500 million of 7.125% ( 7.125 % ) series mortgage bonds due february 2019 .
entergy texas used a portion of the proceeds to repay its $ 160 million note payable to entergy corporation , to repay the $ 100 million outstanding on its credit facility , and to repay short-term borrowings under the entergy system money pool .
entergy texas intends to use the remaining proceeds to repay on or prior to maturity approximately $ 70 million of obligations that had been assumed by entergy texas under the debt assumption agreement with entergy gulf states louisiana and for other general corporate purposes.