billion at december 31 , 2008 and december 31 , 2007 , respectively .
securities and other marketable assets held as collateral amounted to $ 27 billion and $ 54 billion , the majority of which collateral is held to reimburse losses realized under securities lending indemnifications .
the decrease from the prior year is in line with the decrease in the notional amount of these indemnifications , which are collateralized .
additionally , letters of credit in favor of the company held as collateral amounted to $ 503 million and $ 370 million at december 31 , 2008 and december 31 , 2007 , respectively .
other property may also be available to the company to cover losses under certain guarantees and indemnifications ; however , the value of such property has not been determined .
performance risk citigroup evaluates the performance risk of its guarantees based on the assigned referenced counterparty internal or external ratings .
where external ratings are used , investment-grade ratings are considered to be baa/bbb and above , while anything below is considered non-investment grade .
the citigroup internal ratings are in line with the related external rating system .
on certain underlying referenced credits or entities , ratings are not available .
such referenced credits are included in the 201cnot-rated 201d category .
the maximum potential amount of the future payments related to guarantees and credit derivatives sold is determined to be the notional amount of these contracts , which is the par amount of the assets guaranteed .
presented in the table below is the maximum potential amount of future payments classified based upon internal and external credit ratings as of december 31 , 2008 .
as previously mentioned , the determination of the maximum potential future payments is based on the notional amount of the guarantees without consideration of possible recoveries under recourse provisions or from collateral held or pledged .
such amounts bear no relationship to the anticipated losses , if any , on these guarantees. .

in billions of dollars                             | maximum potential amount of future payments investment grade | maximum potential amount of future payments non-investment grade | maximum potential amount of future payments not rated | maximum potential amount of future payments total
-------------------------------------------------- | ------------------------------------------------------------ | ---------------------------------------------------------------- | ----------------------------------------------------- | -------------------------------------------------
financial standby letters of credit                | $ 49.2                                                       | $ 28.6                                                           | $ 16.4                                                | $ 94.2
performance guarantees                             | 5.7                                                          | 5.0                                                              | 5.6                                                   | 16.3
derivative instruments deemed to be guarantees     | 2014                                                         | 2014                                                             | 67.9                                                  | 67.9
guarantees of collection of contractual cash flows | 2014                                                         | 2014                                                             | 0.3                                                   | 0.3
loans sold with recourse                           | 2014                                                         | 2014                                                             | 0.3                                                   | 0.3
securities lending indemnifications                | 2014                                                         | 2014                                                             | 47.6                                                  | 47.6
credit card merchant processing                    | 2014                                                         | 2014                                                             | 56.7                                                  | 56.7
custody indemnifications and other                 | 18.5                                                         | 3.1                                                              | 2014                                                  | 21.6
total                                              | $ 73.4                                                       | $ 36.7                                                           | $ 194.8                                               | $ 304.9

credit derivatives a credit derivative is a bilateral contract between a buyer and a seller under which the seller sells protection against the credit risk of a particular entity ( 201creference entity 201d or 201creference credit 201d ) .
credit derivatives generally require that the seller of credit protection make payments to the buyer upon the occurrence of predefined credit events ( commonly referred to as 201csettlement triggers 201d ) .
these settlement triggers are defined by the form of the derivative and the reference credit and are generally limited to the market standard of failure to pay on indebtedness and bankruptcy of the reference credit and , in a more limited range of transactions , debt restructuring .
credit derivative transactions referring to emerging market reference credits will also typically include additional settlement triggers to cover the acceleration of indebtedness and the risk of repudiation or a payment moratorium .
in certain transactions , protection may be provided on a portfolio of referenced credits or asset-backed securities .
the seller of such protection may not be required to make payment until a specified amount of losses has occurred with respect to the portfolio and/or may only be required to pay for losses up to a specified amount .
the company makes markets in and trades a range of credit derivatives , both on behalf of clients as well as for its own account .
through these contracts , the company either purchases or writes protection on either a single name or a portfolio of reference credits .
the company uses credit derivatives to help mitigate credit risk in its corporate loan portfolio and other cash positions , to take proprietary trading positions , and to facilitate client transactions .
the range of credit derivatives sold includes credit default swaps , total return swaps and credit options .
a credit default swap is a contract in which , for a fee , a protection seller ( guarantor ) agrees to reimburse a protection buyer ( beneficiary ) for any losses that occur due to a credit event on a reference entity .
if there is no credit default event or settlement trigger , as defined by the specific derivative contract , then the guarantor makes no payments to the beneficiary and receives only the contractually specified fee .
however , if a credit event occurs and in accordance with the specific derivative contract sold , the guarantor will be required to make a payment to the beneficiary .
a total return swap transfers the total economic performance of a reference asset , which includes all associated cash flows , as well as capital appreciation or depreciation .
the protection buyer ( beneficiary ) receives a floating rate of interest and any depreciation on the reference asset from the protection seller ( guarantor ) , and in return the protection seller receives the cash flows associated with the reference asset , plus any appreciation .
thus , the beneficiary will be obligated to make a payment any time the floating interest rate payment according to the total return swap agreement and any depreciation of the reference asset exceed the cash flows associated with the underlying asset .
a total return swap may terminate upon a default of the reference asset subject to the provisions in the related total return swap agreement between the protection seller ( guarantor ) and the protection buyer ( beneficiary ) .


system energy resources , inc .
management's financial discussion and analysis operating activities cash flow from operations increased by $ 232.1 million in 2004 primarily due to income tax refunds of $ 70.6 million in 2004 compared to income tax payments of $ 230.9 million in 2003 .
the increase was partially offset by money pool activity , as discussed below .
in 2003 , the domestic utility companies and system energy filed , with the irs , a change in tax accounting method notification for their respective calculations of cost of goods sold .
the adjustment implemented a simplified method of allocation of overhead to the production of electricity , which is provided under the irs capitalization regulations .
the cumulative adjustment placing these companies on the new methodology resulted in a $ 430 million deduction for system energy on entergy's 2003 income tax return .
there was no cash benefit from the method change in 2003 .
in 2004 system energy realized $ 144 million in cash tax benefit from the method change .
this tax accounting method change is an issue across the utility industry and will likely be challenged by the irs on audit .
cash flow from operations decreased by $ 124.8 million in 2003 primarily due to the following : 2022 an increase in federal income taxes paid of $ 74.0 million in 2003 compared to 2002 ; 2022 the cessation of the entergy mississippi ggart .
system energy collected $ 21.7 million in 2003 and $ 40.8 million in 2002 from entergy mississippi in conjunction with the ggart , which provided for the acceleration of entergy mississippi's grand gulf purchased power obligation .
the mpsc authorized cessation of the ggart effective july 1 , 2003 .
see note 2 to the domestic utility companies and system energy financial statements for further discussion of the ggart ; and 2022 money pool activity , as discussed below .
system energy's receivables from the money pool were as follows as of december 31 for each of the following years: .

2004             | 2003             | 2002             | 2001
---------------- | ---------------- | ---------------- | ----------------
( in thousands ) | ( in thousands ) | ( in thousands ) | ( in thousands )
$ 61592          | $ 19064          | $ 7046           | $ 13853

money pool activity used $ 42.5 million of system energy's operating cash flows in 2004 , used $ 12.0 million in 2003 , and provided $ 6.8 million in 2002 .
see note 4 to the domestic utility companies and system energy financial statements for a description of the money pool .
investing activities net cash used for investing activities was practically unchanged in 2004 compared to 2003 primarily because an increase in construction expenditures caused by a reclassification of inventory items to capital was significantly offset by the maturity of $ 6.5 million of other temporary investments that had been made in 2003 , which provided cash in 2004 .
the increase of $ 16.2 million in net cash used in investing activities in 2003 was primarily due to the following : 2022 the maturity in 2002 of $ 22.4 million of other temporary investments that had been made in 2001 , which provided cash in 2002 ; 2022 an increase in decommissioning trust contributions and realized change in trust assets of $ 8.2 million in 2003 compared to 2002 ; and 2022 other temporary investments of $ 6.5 million made in 2003 .
partially offsetting the increases in net cash used in investing activities was a decrease in construction expenditures of $ 22.1 million in 2003 compared to 2002 primarily due to the power uprate project in 2002.


republic services , inc .
notes to consolidated financial statements 2014 ( continued ) in december 2008 , the board of directors amended and restated the republic services , inc .
2006 incentive stock plan ( formerly known as the allied waste industries , inc .
2006 incentive stock plan ( the 2006 plan ) ) .
allied 2019s stockholders approved the 2006 plan in may 2006 .
the 2006 plan was amended and restated in december 2008 to reflect that republic services , inc .
is the new sponsor of the plan , that any references to shares of common stock is to shares of common stock of republic services , inc. , and to adjust outstanding awards and the number of shares available under the plan to reflect the acquisition .
the 2006 plan , as amended and restated , provides for the grant of non-qualified stock options , incentive stock options , shares of restricted stock , shares of phantom stock , stock bonuses , restricted stock units , stock appreciation rights , performance awards , dividend equivalents , cash awards , or other stock-based awards .
awards granted under the 2006 plan prior to december 5 , 2008 became fully vested and nonforfeitable upon the closing of the acquisition .
awards may be granted under the 2006 plan , as amended and restated , after december 5 , 2008 only to employees and consultants of allied waste industries , inc .
and its subsidiaries who were not employed by republic services , inc .
prior to such date .
at december 31 , 2012 , there were approximately 15.5 million shares of common stock reserved for future grants under the 2006 plan .
stock options we use a binomial option-pricing model to value our stock option grants .
we recognize compensation expense on a straight-line basis over the requisite service period for each separately vesting portion of the award , or to the employee 2019s retirement eligible date , if earlier .
expected volatility is based on the weighted average of the most recent one year volatility and a historical rolling average volatility of our stock over the expected life of the option .
the risk-free interest rate is based on federal reserve rates in effect for bonds with maturity dates equal to the expected term of the option .
we use historical data to estimate future option exercises , forfeitures ( at 3.0% ( 3.0 % ) for each of the period presented ) and expected life of the options .
when appropriate , separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes .
the weighted-average estimated fair values of stock options granted during the years ended december 31 , 2012 , 2011 and 2010 were $ 4.77 , $ 5.35 and $ 5.28 per option , respectively , which were calculated using the following weighted-average assumptions: .

                              | 2012             | 2011             | 2010
----------------------------- | ---------------- | ---------------- | ----------------
expected volatility           | 27.8% ( 27.8 % ) | 27.3% ( 27.3 % ) | 28.6% ( 28.6 % )
risk-free interest rate       | 0.8% ( 0.8 % )   | 1.7% ( 1.7 % )   | 2.4% ( 2.4 % )
dividend yield                | 3.2% ( 3.2 % )   | 2.7% ( 2.7 % )   | 2.9% ( 2.9 % )
expected life ( in years )    | 4.5              | 4.4              | 4.3
contractual life ( in years ) | 7.0              | 7.0              | 7.0


table of contents interest expense , net of capitalized interest decreased $ 129 million , or 18.1% ( 18.1 % ) , in 2014 from the 2013 period primarily due to a $ 63 million decrease in special charges recognized period-over-period as further described below , as well as refinancing activities that resulted in $ 65 million less interest expense recognized in 2014 .
in 2014 , american recognized $ 29 million of special charges relating to non-cash interest accretion on bankruptcy settlement obligations .
in 2013 , american recognized $ 48 million of special charges relating to post-petition interest expense on unsecured obligations pursuant to the plan and penalty interest related to american 2019s 10.5% ( 10.5 % ) secured notes and 7.50% ( 7.50 % ) senior secured notes .
in addition , in 2013 american recorded special charges of $ 44 million for debt extinguishment costs incurred as a result of the repayment of certain aircraft secured indebtedness , including cash interest charges and non-cash write offs of unamortized debt issuance costs .
as a result of the 2013 refinancing activities and the early extinguishment of american 2019s 7.50% ( 7.50 % ) senior secured notes in 2014 , american recognized $ 65 million less interest expense in 2014 as compared to the 2013 period .
other nonoperating expense , net of $ 153 million in 2014 consisted principally of net foreign currency losses of $ 92 million and early debt extinguishment charges of $ 48 million .
other nonoperating expense , net of $ 84 million in 2013 consisted principally of net foreign currency losses of $ 55 million and early debt extinguishment charges of $ 29 million .
other nonoperating expense , net increased $ 69 million , or 81.0% ( 81.0 % ) , during 2014 primarily due to special charges recognized as a result of early debt extinguishment and an increase in foreign currency losses driven by the strengthening of the u.s .
dollar in foreign currency transactions , principally in latin american markets .
american recorded a $ 43 million special charge for venezuelan foreign currency losses in 2014 .
see part ii , item 7a .
quantitative and qualitative disclosures about market risk for further discussion of our cash held in venezuelan bolivars .
in addition , american 2019s nonoperating special items included $ 48 million in special charges in the 2014 primarily related to the early extinguishment of american 2019s 7.50% ( 7.50 % ) senior secured notes and other indebtedness .
reorganization items , net reorganization items refer to revenues , expenses ( including professional fees ) , realized gains and losses and provisions for losses that are realized or incurred as a direct result of the chapter 11 cases .
the following table summarizes the components included in reorganization items , net on american 2019s consolidated statement of operations for the year ended december 31 , 2013 ( in millions ) : .

                                                                          | 2013
------------------------------------------------------------------------- | ------
labor-related deemed claim ( 1 )                                          | $ 1733
aircraft and facility financing renegotiations and rejections ( 2 ) ( 3 ) | 320
fair value of conversion discount ( 4 )                                   | 218
professional fees                                                         | 199
other                                                                     | 170
total reorganization items net                                            | $ 2640

( 1 ) in exchange for employees 2019 contributions to the successful reorganization , including agreeing to reductions in pay and benefits , american agreed in the plan to provide each employee group a deemed claim , which was used to provide a distribution of a portion of the equity of the reorganized entity to those employees .
each employee group received a deemed claim amount based upon a portion of the value of cost savings provided by that group through reductions to pay and benefits as well as through certain work rule changes .
the total value of this deemed claim was approximately $ 1.7 billion .
( 2 ) amounts include allowed claims ( claims approved by the bankruptcy court ) and estimated allowed claims relating to ( i ) the rejection or modification of financings related to aircraft and ( ii ) entry of orders treated as unsecured claims with respect to facility agreements supporting certain issuances of special facility revenue bonds .
the debtors recorded an estimated claim associated with the rejection or modification of a financing or facility agreement when the applicable motion was filed with the bankruptcy court to reject or modify


long-term borrowings the carrying value and fair value of long-term borrowings estimated using market prices at december 31 , 2013 included the following : ( in millions ) maturity amount unamortized discount carrying value fair value .

( in millions )                   | maturity amount | unamortized discount | carrying value | fair value
--------------------------------- | --------------- | -------------------- | -------------- | ----------
3.50% ( 3.50 % ) notes due 2014   | $ 1000          | $ 2014               | $ 1000         | $ 1029
1.375% ( 1.375 % ) notes due 2015 | 750             | 2014                 | 750            | 759
6.25% ( 6.25 % ) notes due 2017   | 700             | -2 ( 2 )             | 698            | 812
5.00% ( 5.00 % ) notes due 2019   | 1000            | -2 ( 2 )             | 998            | 1140
4.25% ( 4.25 % ) notes due 2021   | 750             | -3 ( 3 )             | 747            | 799
3.375% ( 3.375 % ) notes due 2022 | 750             | -4 ( 4 )             | 746            | 745
total long-term borrowings        | $ 4950          | $ -11 ( 11 )         | $ 4939         | $ 5284

long-term borrowings at december 31 , 2012 had a carrying value of $ 5.687 billion and a fair value of $ 6.275 billion determined using market prices at the end of december 2012 .
2015 and 2022 notes .
in may 2012 , the company issued $ 1.5 billion in aggregate principal amount of unsecured unsubordinated obligations .
these notes were issued as two separate series of senior debt securities including $ 750 million of 1.375% ( 1.375 % ) notes maturing in june 2015 ( the 201c2015 notes 201d ) and $ 750 million of 3.375% ( 3.375 % ) notes maturing in june 2022 ( the 201c2022 notes 201d ) .
net proceeds were used to fund the repurchase of blackrock 2019s common stock and series b preferred from barclays and affiliates and for general corporate purposes .
interest on the 2015 notes and the 2022 notes of approximately $ 10 million and $ 25 million per year , respectively , is payable semi-annually on june 1 and december 1 of each year , which commenced december 1 , 2012 .
the 2015 notes and 2022 notes may be redeemed prior to maturity at any time in whole or in part at the option of the company at a 201cmake-whole 201d redemption price .
the 201cmake-whole 201d redemption price represents a price , subject to the specific terms of the 2015 and 2022 notes and related indenture , that is the greater of ( a ) par value and ( b ) the present value of future payments that will not be paid because of an early redemption , which is discounted at a fixed spread over a comparable treasury security .
the 2015 notes and 2022 notes were issued at a discount of $ 5 million that is being amortized over the term of the notes .
the company incurred approximately $ 7 million of debt issuance costs , which are being amortized over the respective terms of the 2015 notes and 2022 notes .
at december 31 , 2013 , $ 5 million of unamortized debt issuance costs was included in other assets on the consolidated statement of financial condition .
2013 and 2021 notes .
in may 2011 , the company issued $ 1.5 billion in aggregate principal amount of unsecured unsubordinated obligations .
these notes were issued as two separate series of senior debt securities including $ 750 million of 4.25% ( 4.25 % ) notes maturing in may 2021 and $ 750 million of floating rate notes ( 201c2013 floating rate notes 201d ) , which were repaid in may 2013 at maturity .
net proceeds of this offering were used to fund the repurchase of blackrock 2019s series b preferred from affiliates of merrill lynch & co. , inc .
( 201cmerrill lynch 201d ) .
interest on the 4.25% ( 4.25 % ) notes due in 2021 ( 201c2021 notes 201d ) is payable semi-annually on may 24 and november 24 of each year , which commenced november 24 , 2011 , and is approximately $ 32 million per year .
the 2021 notes may be redeemed prior to maturity at any time in whole or in part at the option of the company at a 201cmake-whole 201d redemption price .
the 2021 notes were issued at a discount of $ 4 million that is being amortized over the term of the notes .
the company incurred approximately $ 7 million of debt issuance costs for the $ 1.5 billion note issuances , which are being amortized over the respective terms of the notes .
at december 31 , 2013 , $ 3 million of unamortized debt issuance costs was included in other assets on the consolidated statement of financial condition .
in may 2011 , in conjunction with the issuance of the 2013 floating rate notes , the company entered into a $ 750 million notional interest rate swap maturing in 2013 to hedge the future cash flows of its obligation at a fixed rate of 1.03% ( 1.03 % ) .
during the second quarter of 2013 , the interest rate swap matured and the 2013 floating rate notes were fully repaid .
2012 , 2014 and 2019 notes .
in december 2009 , the company issued $ 2.5 billion in aggregate principal amount of unsecured and unsubordinated obligations .
these notes were issued as three separate series of senior debt securities including $ 0.5 billion of 2.25% ( 2.25 % ) notes , which were repaid in december 2012 , $ 1.0 billion of 3.50% ( 3.50 % ) notes and $ 1.0 billion of 5.0% ( 5.0 % ) notes maturing in december 2014 and 2019 , respectively .
net proceeds of this offering were used to repay borrowings under the cp program , which was used to finance a portion of the acquisition of barclays global investors ( 201cbgi 201d ) from barclays on december 1 , 2009 ( the 201cbgi transaction 201d ) , and for general corporate purposes .
interest on the 2014 notes and 2019 notes of approximately $ 35 million and $ 50 million per year , respectively , is payable semi-annually in arrears on june 10 and december 10 of each year .
these notes may be redeemed prior to maturity at any time in whole or in part at the option of the company at a 201cmake-whole 201d redemption price .
these notes were issued collectively at a discount of $ 5 million , which is being amortized over the respective terms of the notes .
the company incurred approximately $ 13 million of debt issuance costs , which are being amortized over the respective terms of these notes .
at december 31 , 2013 , $ 4 million of unamortized debt issuance costs was included in other assets on the consolidated statement of financial condition .
2017 notes .
in september 2007 , the company issued $ 700 million in aggregate principal amount of 6.25% ( 6.25 % ) senior unsecured and unsubordinated notes maturing on september 15 , 2017 ( the 201c2017 notes 201d ) .
a portion of the net proceeds of the 2017 notes was used to fund the initial cash payment for the acquisition of the fund of funds business of quellos and the remainder was used for general corporate purposes .
interest is payable semi-annually in arrears on march 15 and september 15 of each year , or approximately $ 44 million per year .
the 2017 notes may be redeemed prior


abiomed , inc .
and subsidiaries notes to consolidated financial statements 2014 ( continued ) ( 7 ) commitments and contingencies the company applies the disclosure provisions of fin no .
45 , guarantor 2019s accounting and disclosure requirements for guarantees , including guarantees of indebtedness of others , and interpretation of fasb statements no .
5 , 57 and 107 and rescission of fasb interpretation no .
34 ( fin no .
45 ) to its agreements that contain guarantee or indemnification clauses .
these disclosure provisions expand those required by sfas no .
5 accounting for contingencies , by requiring that guarantors disclose certain types of guarantees , even if the likelihood of requiring the guarantor 2019s performance is remote .
the following is a description of arrangements in which the company is a guarantor .
product warranties 2014the company routinely accrues for estimated future warranty costs on its product sales at the time of sale .
the ab5000 and bvs products are subject to rigorous regulation and quality standards .
operating results could be adversely effected if the actual cost of product failures exceeds the estimated warranty provision .
patent indemnifications 2014in many sales transactions , the company indemnifies customers against possible claims of patent infringement caused by the company 2019s products .
the indemnifications contained within sales contracts usually do not include limits on the claims .
the company has never incurred any material costs to defend lawsuits or settle patent infringement claims related to sales transactions .
under the provisions of fin no .
45 , intellectual property indemnifications require disclosure only .
as of march 31 , 2006 , the company had entered into leases for its facilities , including its primary operating facility in danvers , massachusetts , with terms through fiscal 2010 .
the danvers lease may be extended , at the company 2019s option , for two successive additional periods of five years each with monthly rent charges to be determined based on then current fair rental values .
the company 2019s lease for its aachen location expires in august 2008 unless an option to extend for an additional four years is exercised by the company .
in december 2005 we closed our office facility in the netherlands , recording a charge of approximately $ 58000 for the remaining lease term .
total rent expense under these leases , included in the accompanying consolidated statements of operations approximated $ 821000 , $ 824000 and $ 1262000 for the fiscal years ended march 31 , 2004 , 2005 and 2006 , respectively .
future minimum lease payments under all significant non-cancelable operating leases as of march 31 , 2006 are approximately as follows ( in thousands ) : fiscal year ending march 31 , operating leases .

fiscal year ending march 31,        | operating leases
----------------------------------- | ----------------
2007                                | 1703
2008                                | 1371
2009                                | 1035
2010                                | 710
total future minimum lease payments | $ 4819

from time-to-time , the company is involved in legal and administrative proceedings and claims of various types .
while any litigation contains an element of uncertainty , management , in consultation with the company 2019s general counsel , presently believes that the outcome of each such other proceedings or claims which are pending or known to be threatened , or all of them combined , is not expected to have a material adverse effect on the company 2019s financial position , cash flow and results .
on may 15 , 2006 richard a .
nazarian , as selling stockholder representative , filed a demand for arbitration ( subsequently amended ) with the boston office of the american arbitration association


changes in proved undeveloped reserves as of december 31 , 2013 , 627 mmboe of proved undeveloped reserves were reported , an increase of 56 mmboe from december 31 , 2012 .
the following table shows changes in total proved undeveloped reserves for 2013 : ( mmboe ) .

beginning of year                          | 571
------------------------------------------ | ------------
revisions of previous estimates            | 4
improved recovery                          | 7
purchases of reserves in place             | 16
extensions discoveries and other additions | 142
dispositions                               | -4 ( 4 )
transfer to proved developed               | -109 ( 109 )
end of year                                | 627

significant additions to proved undeveloped reserves during 2013 included 72 mmboe in the eagle ford and 49 mmboe in the bakken shale plays due to development drilling .
transfers from proved undeveloped to proved developed reserves included 57 mmboe in the eagle ford , 18 mmboe in the bakken and 7 mmboe in the oklahoma resource basins due to producing wells .
costs incurred in 2013 , 2012 and 2011 relating to the development of proved undeveloped reserves , were $ 2536 million , $ 1995 million and $ 1107 million .
a total of 59 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 .
projects can remain in proved undeveloped reserves for extended periods in certain situations such as large development projects which take more than five years to complete , or the timing of when additional gas compression is needed .
of the 627 mmboe of proved undeveloped reserves at december 31 , 2013 , 24 percent of the volume is associated with projects that have been included in proved reserves for more than five years .
the majority of this volume is related to a compression project in e.g .
that was sanctioned by our board of directors in 2004 .
the timing of the installation of compression is being driven by the reservoir performance with this project intended to maintain maximum production levels .
performance of this field since the board sanctioned the project has far exceeded expectations .
estimates of initial dry gas in place increased by roughly 10 percent between 2004 and 2010 .
during 2012 , the compression project received the approval of the e.g .
government , allowing design and planning work to progress towards implementation , with completion expected by mid-2016 .
the other component of alba proved undeveloped reserves is an infill well approved in 2013 and to be drilled late 2014 .
proved undeveloped reserves for the north gialo development , located in the libyan sahara desert , were booked for the first time as proved undeveloped reserves in 2010 .
this development , which is anticipated to take more than five years to be developed , is being executed by the operator and encompasses a continuous drilling program including the design , fabrication and installation of extensive liquid handling and gas recycling facilities .
anecdotal evidence from similar development projects in the region led to an expected project execution of more than five years from the time the reserves were initially booked .
interruptions associated with the civil unrest in 2011 and third-party labor strikes in 2013 have extended the project duration .
there are no other significant undeveloped reserves expected to be developed more than five years after their original booking .
as of december 31 , 2013 , future development costs estimated to be required for the development of proved undeveloped liquid hydrocarbon , natural gas and synthetic crude oil reserves related to continuing operations for the years 2014 through 2018 are projected to be $ 2894 million , $ 2567 million , $ 2020 million , $ 1452 million and $ 575 million .
the timing of future projects and estimated future development costs relating to the development of proved undeveloped liquid hydrocarbon , natural gas and synthetic crude oil reserves are forward-looking statements and are based on a number of assumptions , including ( among others ) commodity prices , presently known physical data concerning size and character of the reservoirs , economic recoverability , technology developments , future drilling success , industry economic conditions , levels of cash flow from operations , production experience and other operating considerations .
to the extent these assumptions prove inaccurate , actual recoveries , timing and development costs could be different than current estimates.


location approximate size ( sq .
ft. ) segment majority owned or leased .

location               | approximatesize ( sq . ft. ) | segment                                | majorityowned orleased
---------------------- | ---------------------------- | -------------------------------------- | ----------------------
hamilton new zealand   | 96000                        | global institutional global industrial | owned
calgary alberta canada | 94000                        | global energy                          | owned
kwinana australia      | 87000                        | global institutional global industrial | owned
revesby australia      | 87000                        | global institutional global industrial | owned
yangsan korea          | 85000                        | global energy global industrial        | owned
cisterna italy         | 80000                        | global industrial                      | owned
rovigo italy           | 77000                        | global institutional                   | owned
cuautitlan mexico      | 76000                        | global institutional global industrial | owned
barueri brazil         | 75000                        | global institutional global industrial | leased
mullingar ireland      | 74000                        | global institutional global industrial | leased
mosta malta            | 73000                        | global institutional                   | leased

generally , our manufacturing facilities are adequate to meet our existing in-house production needs .
we continue to invest in our plant sites to maintain viable operations and to add capacity as necessary to meet business imperatives .
most of our manufacturing plants also serve as distribution centers .
in addition , we operate distribution centers around the world , most of which are leased , and utilize third party logistics service providers to facilitate the distribution of our products and services .
at year end 2016 ecolab 2019s corporate headquarters was comprised of three adjacent multi-storied buildings located in downtown st .
paul , minnesota .
the main 19-story building was constructed to our specifications and is leased through june 30 , 2018 .
the second building is leased through 2019 .
the company intends to vacate the current leased buildings in 2018 .
the third building is owned .
ecolab acquired the 17-story north tower from the travelers indemnity company in downtown st .
paul , minnesota on august 4 , 2015 .
this building became the corporate headquarters in 2017 .
a 90 acre campus in eagan , minnesota is owned and provides for future growth .
the eagan facility houses a significant research and development center , a data center and training facilities as well as several of our administrative functions .
we also have a significant business presence in naperville , illinois , where our water and paper operating segment maintain their principal administrative offices and research center .
as discussed in part ii , item 8 , note 6 , 201cdebt and interest 201d of this form 10-k , the company acquired the beneficial interest in the trust owning these facilities during 2015 .
our energy operating segment maintains administrative and research facilities in sugar land , texas and additional research facilities in fresno , texas .
in december 2013 , we announced the construction of a new 133000 square-foot headquarters building adjacent to the existing sugar land operations which was completed in early 2016 and renovation of the existing 45000 square-foot research facilities in sugar land .
significant regional administrative and/or research facilities are located in leiden , netherlands , campinas , brazil , and pune , india , which we own , and in monheim , germany , singapore , shanghai , china , and zurich , switzerland , which we lease .
we also have a network of small leased sales offices in the united states and , to a lesser extent , in other parts of the world .
item 3 .
legal proceedings .
discussion of legal proceedings is incorporated by reference from part ii , item 8 , note 15 , 201ccommitments and contingencies , 201d of this form 10-k and should be considered an integral part of part i , item 3 , 201clegal proceedings . 201d other environmental-related legal proceedings are discussed at part i , item 1 ( c ) above , under the heading 201cenvironmental and regulatory considerations 201d and is incorporated herein by reference .
item 4 .
mine safety disclosures .
not applicable.


part ii item 5 : market for registrant 2019s common equity , related stockholder matters and issuer purchases of equity securities motorola 2019s common stock is listed on the new york and chicago stock exchanges .
the number of stockholders of record of motorola common stock on january 31 , 2008 was 79907 .
information regarding securities authorized for issuance under equity compensation plans is incorporated by reference to the information under the caption 201cequity compensation plan information 201d of motorola 2019s proxy statement for the 2008 annual meeting of stockholders .
the remainder of the response to this item incorporates by reference note 16 , 201cquarterly and other financial data ( unaudited ) 201d of the notes to consolidated financial statements appearing under 201citem 8 : financial statements and supplementary data 201d .
the following table provides information with respect to acquisitions by the company of shares of its common stock during the quarter ended december 31 , 2007 .
issuer purchases of equity securities period ( a ) total number of shares purchased ( 1 ) ( 2 ) ( b ) average price paid per share ( 1 ) ( 3 ) ( c ) total number of shares purchased as part of publicly announced plans or programs ( 2 ) ( d ) maximum number ( or approximate dollar value ) of shares that may yet be purchased under the plans or programs ( 2 ) .

period               | ( a ) total number of shares purchased ( 1 ) ( 2 ) | ( b ) average price paid per share ( 1 ) ( 3 ) | ( c ) total number of shares purchased as part of publicly announced plans or programs ( 2 ) | ( d ) maximum number ( or approximate dollar value ) of shares that may yet be purchased under the plans or programs ( 2 )
-------------------- | -------------------------------------------------- | ---------------------------------------------- | -------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------
9/30/07 to 10/26/07  | 2972951                                            | $ 18.84                                        | 2964225                                                                                | $ 4267375081
10/27/07 to 11/23/07 | 5709917                                            | $ 17.23                                        | 5706600                                                                                | $ 4169061854
11/24/07 to 12/31/07 | 25064045                                           | $ 16.04                                        | 25064045                                                                                | $ 3767061887
total                | 33746913                                           | $ 16.49                                        | 33734870                                                                                |

( 1 ) in addition to purchases under the 2006 stock repurchase program ( as defined below ) , included in this column are transactions under the company 2019s equity compensation plans involving the delivery to the company of 12043 shares of motorola common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock granted to company employees .
( 2 ) through actions taken on july 24 , 2006 and march 21 , 2007 , the board of directors has authorized the company to repurchase an aggregate amount of up to $ 7.5 billion of its outstanding shares of common stock over a period ending in june 2009 , subject to market conditions ( the 201c2006 stock repurchase program 201d ) .
( 3 ) average price paid per share of common stock repurchased under the 2006 stock repurchase program is execution price , excluding commissions paid to brokers.


table of contents the company receives a foreign tax credit ( 201cftc 201d ) against its u.s .
tax liability for foreign taxes paid by the company including payments from its separate account assets .
the separate account ftc is estimated for the current year using information from the most recent filed return , adjusted for the change in the allocation of separate account investments to the international equity markets during the current year .
the actual current year ftc can vary from the estimates due to actual ftcs passed through by the mutual funds .
the company recorded benefits of $ 16 , $ 11 and $ 17 related to separate account ftc in the years ended december 31 , 2008 , december 31 , 2007 and december 31 , 2006 , respectively .
these amounts included benefits related to true- ups of prior years 2019 tax returns of $ 4 , $ 0 and $ 7 in 2008 , 2007 and 2006 respectively .
the company 2019s unrecognized tax benefits increased by $ 15 during 2008 as a result of tax positions taken on the company 2019s 2007 tax return and expected to be taken on its 2008 tax return , bringing the total unrecognized tax benefits to $ 91 as of december 31 , 2008 .
this entire amount , if it were recognized , would affect the effective tax rate .
earnings ( losses ) per common share the following table represents earnings per common share data for the past three years : for additional information on earnings ( losses ) per common share see note 2 of notes to consolidated financial statements .
outlooks the hartford provides projections and other forward-looking information in the 201coutlook 201d sections within md&a .
the 201coutlook 201d sections contain many forward-looking statements , particularly relating to the company 2019s future financial performance .
these forward-looking statements are estimates based on information currently available to the company , are made pursuant to the safe harbor provisions of the private securities litigation reform act of 1995 and are subject to the precautionary statements set forth in the introduction to md&a above .
actual results are likely to differ , and in the past have differed , materially from those forecast by the company , depending on the outcome of various factors , including , but not limited to , those set forth in each 201coutlook 201d section and in item 1a , risk factors .
outlook during 2008 , the company has been negatively impacted by conditions in the global financial markets and economic conditions in general .
as these conditions persist in 2009 , the company would anticipate that it would continue to be negatively impacted , including the effect of rating downgrades that have occurred and those that could occur in the future .
see risk factors in item 1a .
retail in the long-term , management continues to believe the market for retirement products will expand as individuals increasingly save and plan for retirement .
demographic trends suggest that as the 201cbaby boom 201d generation matures , a significant portion of the united states population will allocate a greater percentage of their disposable incomes to saving for their retirement years due to uncertainty surrounding the social security system and increases in average life expectancy .
near-term , the industry and the company are experiencing lower variable annuity sales as a result of recent market turbulence and uncertainty in the u.s .
financial system .
current market pressures are also increasing the expected claim costs , the cost and volatility of hedging programs , and the level of capital needed to support living benefit guarantees .
some companies have already begun to increase the price of their guaranteed living benefits and change the level of guarantees offered .
in 2009 , the company intends to adjust pricing levels and take certain actions to reduce the risks in its variable annuity product features in order to address the risks and costs associated with variable annuity benefit features in the current economic environment and explore other risk limiting techniques such as increased hedging or other reinsurance structures .
competitor reaction , including the extent of competitor risk limiting strategies , is difficult to predict and may result in a decline in retail 2019s market share .
significant declines in equity markets and increased equity market volatility are also likely to continue to impact the cost and effectiveness of our gmwb hedging program .
continued equity market volatility could result in material losses in our hedging program .
for more information on the gmwb hedging program , see the equity risk management section within capital markets risk management .
during periods of volatile equity markets , policyholders may allocate more of their variable account assets to the fixed account options and fixed annuities may see increased deposits .
in the fourth quarter of 2008 , the company has seen an increase in fixed .

                                                                                | 2008             | 2007   | 2006
------------------------------------------------------------------------------------------- | ---------------- | ------ | ------
basic earnings ( losses ) per share                                                         | $ -8.99 ( 8.99 ) | $ 9.32 | $ 8.89
diluted earnings ( losses ) per share                                                       | $ -8.99 ( 8.99 ) | $ 9.24 | $ 8.69
weighted average common shares outstanding ( basic )                                        | 306.7            | 316.3  | 308.8
weighted average common shares outstanding and dilutive potential common shares ( diluted ) | 306.7            | 319.1  | 315.9

weighted average common shares outstanding and dilutive potential common shares ( diluted ) 306.7 319.1 315.9


notes to consolidated financial statements ( continued ) note 8 2014commitments and contingencies ( continued ) provide renewal options for terms of 3 to 7 additional years .
leases for retail space are for terms of 5 to 20 years , the majority of which are for 10 years , and often contain multi-year renewal options .
as of september 29 , 2007 , the company 2019s total future minimum lease payments under noncancelable operating leases were $ 1.4 billion , of which $ 1.1 billion related to leases for retail space .
rent expense under all operating leases , including both cancelable and noncancelable leases , was $ 151 million , $ 138 million , and $ 140 million in 2007 , 2006 , and 2005 , respectively .
future minimum lease payments under noncancelable operating leases having remaining terms in excess of one year as of september 29 , 2007 , are as follows ( in millions ) : fiscal years .

2008                         | $ 155
---------------------------- | ------
2009                         | 172
2010                         | 173
2011                         | 160
2012                         | 148
thereafter                   | 617
total minimum lease payments | $ 1425

accrued warranty and indemnifications the company offers a basic limited parts and labor warranty on its hardware products .
the basic warranty period for hardware products is typically one year from the date of purchase by the end-user .
the company also offers a 90-day basic warranty for its service parts used to repair the company 2019s hardware products .
the company provides currently for the estimated cost that may be incurred under its basic limited product warranties at the time related revenue is recognized .
factors considered in determining appropriate accruals for product warranty obligations include the size of the installed base of products subject to warranty protection , historical and projected warranty claim rates , historical and projected cost-per-claim , and knowledge of specific product failures that are outside of the company 2019s typical experience .
the company assesses the adequacy of its preexisting warranty liabilities and adjusts the amounts as necessary based on actual experience and changes in future estimates .
for products accounted for under subscription accounting pursuant to sop no .
97-2 , the company recognizes warranty expense as incurred .
the company periodically provides updates to its applications and system software to maintain the software 2019s compliance with specifications .
the estimated cost to develop such updates is accounted for as warranty costs that are recognized at the time related software revenue is recognized .
factors considered in determining appropriate accruals related to such updates include the number of units delivered , the number of updates expected to occur , and the historical cost and estimated future cost of the resources necessary to develop these updates.


humana inc .
notes to consolidated financial statements 2014 ( continued ) amortization expense for other intangible assets was approximately $ 75 million in 2017 , $ 77 million in 2016 , and $ 93 million in 2015 .
the following table presents our estimate of amortization expense for each of the five next succeeding fiscal years: .

                                  | ( in millions )
--------------------------------- | ---------------
for the years ending december 31, |
2018                              | $ 64
2019                              | 54
2020                              | 52
2021                              | 19
2022                              | 16


note 6 : inventories we use the last-in , first-out ( lifo ) method for the majority of our inventories located in the continental u.s .
other inventories are valued by the first-in , first-out ( fifo ) method .
fifo cost approximates current replacement cost .
inventories measured using lifo must be valued at the lower of cost or market .
inventories measured using fifo must be valued at the lower of cost or net realizable value .
inventories at december 31 consisted of the following: .

                                        | 2018           | 2017
--------------------------------------- | -------------- | --------
finished products                       | $ 988.1        | $ 1211.4
work in process                         | 2628.2         | 2697.7
raw materials and supplies              | 506.5          | 488.8
total ( approximates replacement cost ) | 4122.8         | 4397.9
increase ( reduction ) to lifo cost     | -11.0 ( 11.0 ) | 60.4
inventories                             | $ 4111.8       | $ 4458.3

inventories valued under the lifo method comprised $ 1.57 billion and $ 1.56 billion of total inventories at december 31 , 2018 and 2017 , respectively .
note 7 : financial instruments financial instruments that potentially subject us to credit risk consist principally of trade receivables and interest- bearing investments .
wholesale distributors of life-science products account for a substantial portion of our trade receivables ; collateral is generally not required .
we seek to mitigate the risk associated with this concentration through our ongoing credit-review procedures and insurance .
a large portion of our cash is held by a few major financial institutions .
we monitor our exposures with these institutions and do not expect any of these institutions to fail to meet their obligations .
major financial institutions represent the largest component of our investments in corporate debt securities .
in accordance with documented corporate risk-management policies , we monitor the amount of credit exposure to any one financial institution or corporate issuer .
we are exposed to credit-related losses in the event of nonperformance by counterparties to risk-management instruments but do not expect any counterparties to fail to meet their obligations given their high credit ratings .
we consider all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents .
the cost of these investments approximates fair value .
our equity investments are accounted for using three different methods depending on the type of equity investment : 2022 investments in companies over which we have significant influence but not a controlling interest are accounted for using the equity method , with our share of earnings or losses reported in other-net , ( income ) expense .
2022 for equity investments that do not have readily determinable fair values , we measure these investments at cost , less any impairment , plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer .
any change in recorded value is recorded in other-net , ( income ) expense .
2022 our public equity investments are measured and carried at fair value .
any change in fair value is recognized in other-net , ( income ) expense .
we review equity investments other than public equity investments for indications of impairment on a regular basis .
our derivative activities are initiated within the guidelines of documented corporate risk-management policies and are intended to offset losses and gains on the assets , liabilities , and transactions being hedged .
management reviews the correlation and effectiveness of our derivatives on a quarterly basis.


reduced administrative expense .
in connection with this project , we eliminated 749 positions .
we incurred $ 54.7 million of net expenses , most of which was cash .
we recorded $ 0.4 million of restructuring charges relating to this action in fiscal 2018 , restructuring charges were reduced by $ 0.4 million in fiscal 2017 , and we incurred $ 54.7 million of restructuring charges in fiscal 2016 .
this action was completed in fiscal 2018 .
in fiscal 2015 , we announced project century ( century ) which initially involved a review of our north american manufacturing and distribution network to streamline operations and identify potential capacity reductions .
in fiscal 2016 , we broadened the scope of century to identify opportunities to streamline our supply chain outside of north america .
as part of century , in the second quarter of fiscal 2016 , we approved a restructuring plan to close manufacturing facilities in our europe & australia segment supply chain located in berwick , united kingdom and east tamaki , new zealand .
these actions affected 287 positions and we incurred $ 31.8 million of net expenses related to these actions , of which $ 12 million was cash .
we recorded $ 1.8 million of restructuring charges relating to these actions in fiscal 2017 and $ 30.0 million in fiscal 2016 .
these actions were completed in fiscal 2017 .
as part of century , in the first quarter of fiscal 2016 , we approved a restructuring plan to close our west chicago , illinois cereal and dry dinner manufacturing plant in our north america retail segment supply chain .
this action affected 484 positions , and we incurred $ 109.3 million of net expenses relating to this action , of which $ 21 million was cash .
we recorded $ 6.9 million of restructuring charges relating to this action in fiscal 2018 , $ 23.2 million in fiscal 2017 and $ 79.2 million in fiscal 2016 .
this action was completed in fiscal 2018 .
as part of century , in the first quarter of fiscal 2016 , we approved a restructuring plan to close our joplin , missouri snacks plant in our north america retail segment supply chain .
this action affected 125 positions , and we incurred $ 8.0 million of net expenses relating to this action , of which less than $ 1 million was cash .
we recorded $ 1.4 million of restructuring charges relating to this action in fiscal 2018 , $ 0.3 million in fiscal 2017 , and $ 6.3 million in fiscal 2016 .
this action was completed in fiscal 2018 .
we paid cash related to restructuring initiatives of $ 53.6 million in fiscal 2018 , $ 107.8 million in fiscal 2017 , and $ 122.6 million in fiscal 2016 .
in addition to restructuring charges , we expect to incur approximately $ 130 million of project-related costs , which will be recorded in cost of sales , all of which will be cash .
we recorded project-related costs in cost of sales of $ 11.3 million in fiscal 2018 , $ 43.9 million in fiscal 2017 , and $ 57.5 million in fiscal 2016 .
we paid cash for project-related costs of $ 10.9 million in fiscal 2018 , $ 46.9 million in fiscal 2017 , and $ 54.5 million in fiscal 2016 .
we expect these activities to be completed in fiscal 2019 .
restructuring charges and project-related costs are classified in our consolidated statements of earnings as follows: .

in millions                                      | fiscal 2018 | fiscal 2017 | fiscal 2016
------------------------------------------------ | ----------- | ----------- | -----------
cost of sales                                    | $ 14.0      | $ 41.5      | $ 78.4
restructuring impairment and other exit costs    | 68.7        | 182.6       | 151.4
total restructuring charges                      | 82.7        | 224.1       | 229.8
project-related costs classified in cost ofsales | $ 11.3      | $ 43.9      | $ 57.5


46 d e v o n e n e r g y a n n u a l r e p o r t 2 0 0 4 contents of gas produced , transportation availability and costs and demand for the various products derived from oil , natural gas and ngls .
substantially all of devon 2019s revenues are attributable to sales , processing and transportation of these three commodities .
consequently , our financial results and resources are highly influenced by price volatility .
estimates for devon 2019s future production of oil , natural gas and ngls are based on the assumption that market demand and prices will continue at levels that allow for profitable production of these products .
there can be no assurance of such stability .
most of our canadian production is subject to government royalties that fluctuate with prices .
thus , price fluctuations can affect reported production .
also , our international production is governed by payout agreements with the governments of the countries in which we operate .
if the payout under these agreements is attained earlier than projected , devon 2019s net production and proved reserves in such areas could be reduced .
estimates for our future processing and transport of oil , natural gas and ngls are based on the assumption that market demand and prices will continue at levels that allow for profitable processing and transport of these products .
there can be no assurance of such stability .
the production , transportation , processing and marketing of oil , natural gas and ngls are complex processes which are subject to disruption from many causes .
these causes include transportation and processing availability , mechanical failure , human error , meteorological events including , but not limited to , hurricanes , and numerous other factors .
the following forward-looking statements were prepared assuming demand , curtailment , producibility and general market conditions for devon 2019s oil , natural gas and ngls during 2005 will be substantially similar to those of 2004 , unless otherwise noted .
unless otherwise noted , all of the following dollar amounts are expressed in u.s .
dollars .
amounts related to canadian operations have been converted to u.s .
dollars using a projected average 2005 exchange rate of $ 0.82 u.s .
to $ 1.00 canadian .
the actual 2005 exchange rate may vary materially from this estimate .
such variations could have a material effect on the following estimates .
though we have completed several major property acquisitions and dispositions in recent years , these transactions are opportunity driven .
thus , the following forward-looking data excludes the financial and operating effects of potential property acquisitions or divestitures , except as discussed in 201cproperty acquisitions and divestitures , 201d during the year 2005 .
the timing and ultimate results of such acquisition and divestiture activity is difficult to predict , and may vary materially from that discussed in this report .
geographic reporting areas for 2005 the following estimates of production , average price differentials and capital expenditures are provided separately for each of the following geographic areas : 2022 the united states onshore ; 2022 the united states offshore , which encompasses all oil and gas properties in the gulf of mexico ; 2022 canada ; and 2022 international , which encompasses all oil and gas properties that lie outside of the united states and canada .
year 2005 potential operating items the estimates related to oil , gas and ngl production , operating costs and dd&a set forth in the following paragraphs are based on estimates for devon 2019s properties other than those that have been designated for possible sale ( see 201cproperty acquisitions and divestitures 201d ) .
therefore , the following estimates exclude the results of the potential sale properties for the entire year .
oil , gas and ngl production set forth in the following paragraphs are individual estimates of devon 2019s oil , gas and ngl production for 2005 .
on a combined basis , devon estimates its 2005 oil , gas and ngl production will total 217 mmboe .
of this total , approximately 92% ( 92 % ) is estimated to be produced from reserves classified as 201cproved 201d at december 31 , 2004 .
oil production we expect our oil production in 2005 to total 60 mmbbls .
of this total , approximately 95% ( 95 % ) is estimated to be produced from reserves classified as 201cproved 201d at december 31 , 2004 .
the expected production by area is as follows: .

                       | ( mmbbls )
---------------------- | ----------
united states onshore  | 12
united states offshore | 10
canada                 | 12
international          | 26

oil prices 2013 fixed through various price swaps , devon has fixed the price it will receive in 2005 on a portion of its oil production .
the following table includes information on this fixed-price production by area .
where necessary , the prices have been adjusted for certain transportation costs that are netted against the prices recorded by devon.


d u k e r e a l t y c o r p o r a t i o n 2 8 2 0 0 2 a n n u a l r e p o r t notes to consolidated financial statements the company recognizes income on long-term construction contracts where the company serves as a general contractor on the percentage of completion method .
using this method , profits are recorded on the basis of the company 2019s estimates of the percentage of completion of individual contracts , commencing when progress reaches a point where experience is sufficient to estimate final results with reasonable accuracy .
that portion of the estimated earnings is accrued on the basis of the company 2019s estimates of the percentage of completion based on contract expenditures incurred and work performed .
property sales gains from sales of depreciated property are recognized in accordance with statement of financial accounting standards ( 201csfas 201d ) no .
66 , and are included in earnings from sales of land and depreciable property dispositions , net of impairment adjustment , in the statement of operations if identified as held for sale prior to adoption of sfas 144 and in discontinued operations if identified as held for sale after adoption of sfas 144 .
gains or losses from the sale of property which is considered held for sale in dclp are recognized in accordance with sfas 66 and are included in construction management and development activity income in the statement of operations .
net income per common share basic net income per common share is computed by dividing net income available for common shares by the weighted average number of common shares outstanding for the period .
diluted net income per share is computed by dividing the sum of net income available for common shares and minority interest in earnings of unitholders , by the sum of the weighted average number of common shares and units outstanding and dilutive potential common shares for the period .
the following table reconciles the components of basic and diluted net income per share ( in thousands ) : the series d convertible preferred stock and the series g convertible preferred limited partner units were anti-dilutive for the years ended december 31 , 2002 , 2001 and 2000 ; therefore , no conversion to common shares is included in weighted dilutive potential common shares .
in september 2002 , the company redeemed the series g convertible preferred units at their par value of $ 35.0 million .
a joint venture partner in one of the company 2019s unconsolidated companies has the option to convert a portion of its ownership to company common shares ( see discussion in investments in unconsolidated companies section ) .
the effect of the option on earnings per share was dilutive for the year ended december 31 , 2001 ; therefore , conversion to common shares is included in weighted dilutive potential common shares .
federal income taxes the company has elected to be taxed as a real estate investment trust ( 201creit 201d ) under the internal revenue code .
to qualify as a reit , the company must meet a number of organizational and operational requirements , including a requirement that it currently distribute at least 90% ( 90 % ) of its taxable income to its stockholders .
management intends to continue to adhere to these requirements and to maintain the company 2019s reit status .
as a reit , the company is entitled to a tax deduction for some or all of the dividends it pays to its shareholders .
accordingly , the company generally will not be subject to federal income taxes as long as it distributes an amount equal to or in excess of its taxable income currently to its stockholders .
a reit generally is subject to federal income taxes on any taxable income that is not currently distributed to its shareholders .
if the company fails to qualify as a reit in any taxable year , it will be subject to federal income taxes and may not be able to qualify as a reit for four subsequent taxable years .
reit qualification reduces , but does not eliminate , the amount of state and local taxes paid by the company .
in addition , the company 2019s financial statements include the operations of taxable corporate subsidiaries that are not entitled to a dividends paid deduction and are subject to corporate federal , state and local income taxes .
as a reit , the company may also be subject to certain federal excise taxes if it engages in certain types of transactions. .

                                                                                | 2002     | 2001     | 2000
----------------------------------------------------------------------------------- | -------- | -------- | --------
basic net income available for common shares                                        | $ 161272 | $ 229967 | $ 212958
joint venture partner convertible ownership net income                              | 2014     | 3423     | 2014
minority interest in earnings of common unitholders                                 | 18568    | 32463    | 32071
diluted net income available for common shares and dilutive potential common shares | $ 179840 | $ 265853 | $ 245029
weighted average number of common shares outstanding                                | 133981   | 129660   | 126836
weighted average partnership units outstanding                                      | 15442    | 18301    | 19070
joint venture partner convertible ownership common share equivalents                | 2014     | 2092     | 2014
dilutive shares for stock-based compensation plans                                  | 1416     | 1657     | 1535
weighted average number of common shares and dilutive potential common shares       | 150839   | 151710   | 147441


action commenced by the california attorney general , we are providing customers with greater transparency into the pricing of this product and other alternatives offered by us for addressing their foreign exchange requirements .
although we believe such disclosures will address customer interests for increased transparency , over time such action may result in pressure on our pricing of this product or result in clients electing other foreign exchange execution options , which would have an adverse impact on the revenue from , and profitability of , this product for us .
we may be exposed to customer claims , financial loss , reputational damage and regulatory scrutiny as a result of transacting purchases and redemptions relating to the unregistered cash collateral pools underlying our securities lending program at a net asset value of $ 1.00 per unit rather than a lower net asset value based upon market value of the underlying portfolios .
a portion of the cash collateral received by customers under our securities lending program is invested in cash collateral pools that we manage .
interests in these cash collateral pools are held by unaffiliated customers and by registered and unregistered investment funds that we manage .
our cash collateral pools that are money market funds registered under the investment company act of 1940 are required to maintain , and have maintained , a constant net asset value of $ 1.00 per unit .
the remainder of our cash collateral pools are collective investment funds that are not required to be registered under the investment company act .
these unregistered cash collateral pools seek , but are not required , to maintain , and transact purchases and redemptions at , a constant net asset value of $ 1.00 per unit .
our securities lending operations consist of two components ; a direct lending program for third-party investment managers and asset owners , the collateral pools for which we refer to as direct lending collateral pools ; and investment funds with a broad range of investment objectives that are managed by ssga and engage in securities lending , which we refer to as ssga lending funds .
the following table shows the aggregate net asset values of the unregistered direct lending collateral pools and the aggregate net asset value of the unregistered collateral pools underlying the ssga lending funds , in each case based on a constant net asset value of $ 1.00 per ( in billions ) december 31 , 2009 december 31 , 2008 december 31 , 2007 ( 1 ) .

( in billions )                                | december 31 2009 | december 31 2008 | december 31 2007 ( 1 )
---------------------------------------------- | ---------------- | ---------------- | ----------------------
direct lending collateral pools                | $ 85             | $ 85             | $ 150
collateral pools underlying ssga lending funds | 24               | 31               | 44

( 1 ) certain of the ssga lending funds were participants in the direct lending collateral pools until october 2008 .
the direct lending collateral pool balances at december 31 , 2007 related to ssga lending funds have been included within the ssga lending fund balances and excluded from the direct lending collateral pool balances presented above.


act of 1933 , as amended , and section 1145 of the united states code .
no underwriters were engaged in connection with such issuances .
during the three months ended december 31 , 2008 , we issued an aggregate of 7173456 shares of our common stock upon conversion of $ 147.1 million principal amount of our 3.00% ( 3.00 % ) notes .
pursuant to the terms of the indenture , holders of the 3.00% ( 3.00 % ) notes receive 48.7805 shares of our common stock for every $ 1000 principal amount of notes converted .
in connection with the conversions , we paid such holders an aggregate of approximately $ 3.7 million , calculated based on the accrued and unpaid interest on the notes and the discounted value of the future interest payments on the notes .
all shares were issued in reliance on the exemption from registration set forth in section 3 ( a ) ( 9 ) of the securities act of 1933 , as amended .
no underwriters were engaged in connection with such issuances .
issuer purchases of equity securities during the three months ended december 31 , 2008 , we repurchased 2784221 shares of our common stock for an aggregate of $ 79.4 million , including commissions and fees , pursuant to our publicly announced stock repurchase program , as follows : period total number of shares purchased ( 1 ) average price paid per share total number of shares purchased as part of publicly announced plans or programs approximate dollar value of shares that may yet be purchased under the plans or programs ( in millions ) .

period               | total number of shares purchased ( 1 ) | average price paid per share | total number of shares purchased as part of publicly announced plans or programs | approximate dollar value of shares that may yet be purchased under the plans orprograms ( in millions )
-------------------- | -------------------------------------- | ---------------------------- | -------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------
october 2008         | 1379180                                | $ 30.51                      | 1379180                                                                          | $ 1005.3
november 2008        | 1315800                                | $ 26.51                      | 1315800                                                                          | $ 970.4
december 2008        | 89241                                  | $ 27.32                      | 89241                                                                            | $ 967.9
total fourth quarter | 2784221                                | $ 28.53                      | 2784221                                                                          | $ 967.9

( 1 ) repurchases made pursuant to the $ 1.5 billion stock repurchase program approved by our board of directors in february 2008 .
under this program , our management is authorized to purchase shares from time to time through open market purchases or privately negotiated transactions at prevailing prices as permitted by securities laws and other legal requirements , and subject to market conditions and other factors .
to facilitate repurchases , we make purchases pursuant to a trading plan under rule 10b5-1 of the exchange act , which allows us to repurchase shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods .
this program may be discontinued at any time .
as reflected in the above table , in the fourth quarter of 2008 , we significantly reduced purchases of common stock under our stock repurchase program based on the downturn in the economy and the disruptions in the financial and credit markets .
subsequent to december 31 , 2008 , we repurchased approximately 28000 shares of our common stock for an aggregate of $ 0.8 million , including commissions and fees , pursuant to this program .
we expect to continue to manage the pacing of the program in the future in response to general market conditions and other relevant factors.


fortron industries llc .
fortron is a leading global producer of pps , sold under the fortron ae brand , which is used in a wide variety of automotive and other applications , especially those requiring heat and/or chemical resistance .
fortron's facility is located in wilmington , north carolina .
this venture combines the sales , marketing , distribution , compounding and manufacturing expertise of celanese with the pps polymer technology expertise of kureha america inc .
cellulose derivatives strategic ventures .
our cellulose derivatives ventures generally fund their operations using operating cash flow and pay dividends based on each ventures' performance in the preceding year .
in 2014 , 2013 and 2012 , we received cash dividends of $ 115 million , $ 92 million and $ 83 million , respectively .
although our ownership interest in each of our cellulose derivatives ventures exceeds 20% ( 20 % ) , we account for these investments using the cost method of accounting because we determined that we cannot exercise significant influence over these entities due to local government investment in and influence over these entities , limitations on our involvement in the day-to-day operations and the present inability of the entities to provide timely financial information prepared in accordance with generally accepted accounting principles in the united states of america ( "us gaap" ) .
2022 other equity method investments infraservs .
we hold indirect ownership interests in several german infraserv groups that own and develop industrial parks and provide on-site general and administrative support to tenants .
our ownership interest in the equity investments in infraserv affiliates are as follows : as of december 31 , 2014 ( in percentages ) .

                                  | as of december 31 2014 ( in percentages )
--------------------------------- | -----------------------------------------
infraserv gmbh & co . gendorf kg  | 39
infraserv gmbh & co . hoechst kg  | 32
infraserv gmbh & co . knapsack kg | 27

research and development our businesses are innovation-oriented and conduct research and development activities to develop new , and optimize existing , production technologies , as well as to develop commercially viable new products and applications .
research and development expense was $ 86 million , $ 85 million and $ 104 million for the years ended december 31 , 2014 , 2013 and 2012 , respectively .
we consider the amounts spent during each of the last three fiscal years on research and development activities to be sufficient to execute our current strategic initiatives .
intellectual property we attach importance to protecting our intellectual property , including safeguarding our confidential information and through our patents , trademarks and copyrights , in order to preserve our investment in research and development , manufacturing and marketing .
patents may cover processes , equipment , products , intermediate products and product uses .
we also seek to register trademarks as a means of protecting the brand names of our company and products .
patents .
in most industrial countries , patent protection exists for new substances and formulations , as well as for certain unique applications and production processes .
however , we do business in regions of the world where intellectual property protection may be limited and difficult to enforce .
confidential information .
we maintain stringent information security policies and procedures wherever we do business .
such information security policies and procedures include data encryption , controls over the disclosure and safekeeping of confidential information and trade secrets , as well as employee awareness training .
trademarks .
aoplus ae , aoplus ae2 , aoplus ae3 , ateva ae , avicor ae , britecoat ae , celanese ae , celanex ae , celcon ae , celfx 2122 , celstran ae , celvolit ae , clarifoil ae , duroset ae , ecovae ae , factor ae , fortron ae , gur ae , hostaform ae , impet ae , mowilith ae , nutrinova ae , qorus 2122 , riteflex ae , sunett ae , tcx 2122 , thermx ae , tufcor ae , vantage ae , vantageplus 2122 , vantage ae2 , vectra ae , vinamul ae , vitaldose ae , zenite ae and certain other branded products and services named in this document are registered or reserved trademarks or service marks owned or licensed by celanese .
the foregoing is not intended to be an exhaustive or comprehensive list of all registered or reserved trademarks and service marks owned or licensed by celanese .
fortron ae is a registered trademark of fortron industries llc.


considered to be the primary beneficiary of either entity and have therefore deconsolidated both entities .
at december 31 , 2010 , we held a 36% ( 36 % ) interest in juniperus which is accounted for using the equity method of accounting .
our potential loss at december 31 , 2010 is limited to our investment of $ 73 million in juniperus , which is recorded in investments in the consolidated statements of financial position .
we have not provided any financing to juniperus other than previously contractually required amounts .
juniperus and jchl had combined assets and liabilities of $ 121 million and $ 22 million , respectively , at december 31 , 2008 .
for the year ended december 31 , 2009 , we recognized $ 36 million of pretax income from juniperus and jchl .
we recognized $ 16 million of after-tax income , after allocating the appropriate share of net income to the non-controlling interests .
we previously owned an 85% ( 85 % ) economic equity interest in globe re limited ( 2018 2018globe re 2019 2019 ) , a vie , which provided reinsurance coverage for a defined portfolio of property catastrophe reinsurance contracts underwritten by a third party for a limited period which ended june 1 , 2009 .
we consolidated globe re as we were deemed to be the primary beneficiary .
in connection with the winding up of its operations , globe re repaid its $ 100 million of short-term debt and our equity investment from available cash in 2009 .
we recognized $ 2 million of after-tax income from globe re in 2009 , taking into account the share of net income attributable to non-controlling interests .
globe re was fully liquidated in the third quarter of 2009 .
review by segment general we serve clients through the following segments : 2022 risk solutions ( formerly risk and insurance brokerage services ) acts as an advisor and insurance and reinsurance broker , helping clients manage their risks , via consultation , as well as negotiation and placement of insurance risk with insurance carriers through our global distribution network .
2022 hr solutions ( formerly consulting ) partners with organizations to solve their most complex benefits , talent and related financial challenges , and improve business performance by designing , implementing , communicating and administering a wide range of human capital , retirement , investment management , health care , compensation and talent management strategies .
risk solutions .

years ended december 31, | 2010             | 2009             | 2008
------------------------ | ---------------- | ---------------- | ----------------
revenue                  | $ 6423           | $ 6305           | $ 6197
operating income         | 1194             | 900              | 846
operating margin         | 18.6% ( 18.6 % ) | 14.3% ( 14.3 % ) | 13.7% ( 13.7 % )

the demand for property and casualty insurance generally rises as the overall level of economic activity increases and generally falls as such activity decreases , affecting both the commissions and fees generated by our brokerage business .
the economic activity that impacts property and casualty insurance is described as exposure units , and is most closely correlated with employment levels , corporate revenue and asset values .
during 2010 we continued to see a 2018 2018soft market 2019 2019 , which began in 2007 , in our retail brokerage product line .
in a soft market , premium rates flatten or decrease , along with commission revenues , due to increased competition for market share among insurance carriers or increased underwriting capacity .
changes in premiums have a direct and potentially material impact on the insurance brokerage industry , as commission revenues are generally based on a percentage of the


the segment had operating earnings of $ 709 million in 2007 , compared to operating earnings of $ 787 million in 2006 .
the decrease in operating earnings was primarily due to a decrease in gross margin , driven by : ( i ) lower net sales of iden infrastructure equipment , and ( ii ) continued competitive pricing pressure in the market for gsm infrastructure equipment , partially offset by : ( i ) increased net sales of digital entertainment devices , and ( ii ) the reversal of reorganization of business accruals recorded in 2006 relating to employee severance which were no longer needed .
sg&a expenses increased primarily due to the expenses from recently acquired businesses , partially offset by savings from cost-reduction initiatives .
r&d expenditures decreased primarily due to savings from cost- reduction initiatives , partially offset by expenditures by recently acquired businesses and continued investment in digital entertainment devices and wimax .
as a percentage of net sales in 2007 as compared to 2006 , gross margin , sg&a expenses , r&d expenditures and operating margin all decreased .
in 2007 , sales to the segment 2019s top five customers represented approximately 43% ( 43 % ) of the segment 2019s net sales .
the segment 2019s backlog was $ 2.6 billion at december 31 , 2007 , compared to $ 3.2 billion at december 31 , 2006 .
in the home business , demand for the segment 2019s products depends primarily on the level of capital spending by broadband operators for constructing , rebuilding or upgrading their communications systems , and for offering advanced services .
during the second quarter of 2007 , the segment began shipping digital set-tops that support the federal communications commission ( 201cfcc 201d ) 2014 mandated separable security requirement .
fcc regulations mandating the separation of security functionality from set-tops went into effect on july 1 , 2007 .
as a result of these regulations , many cable service providers accelerated their purchases of set-tops in the first half of 2007 .
additionally , in 2007 , our digital video customers significantly increased their purchases of the segment 2019s products and services , primarily due to increased demand for digital entertainment devices , particularly hd/dvr devices .
during 2007 , the segment completed the acquisitions of : ( i ) netopia , inc. , a broadband equipment provider for dsl customers , which allows for phone , tv and fast internet connections , ( ii ) tut systems , inc. , a leading developer of edge routing and video encoders , ( iii ) modulus video , inc. , a provider of mpeg-4 advanced coding compression systems designed for delivery of high-value video content in ip set-top devices for the digital video , broadcast and satellite marketplaces , ( iv ) terayon communication systems , inc. , a provider of real-time digital video networking applications to cable , satellite and telecommunication service providers worldwide , and ( v ) leapstone systems , inc. , a provider of intelligent multimedia service delivery and content management applications to networks operators .
these acquisitions enhance our ability to provide complete end-to-end systems for the delivery of advanced video , voice and data services .
in december 2007 , motorola completed the sale of ecc to emerson for $ 346 million in cash .
enterprise mobility solutions segment the enterprise mobility solutions segment designs , manufactures , sells , installs and services analog and digital two-way radio , voice and data communications products and systems for private networks , wireless broadband systems and end-to-end enterprise mobility solutions to a wide range of enterprise markets , including government and public safety agencies ( which , together with all sales to distributors of two-way communication products , are referred to as the 201cgovernment and public safety market 201d ) , as well as retail , energy and utilities , transportation , manufacturing , healthcare and other commercial customers ( which , collectively , are referred to as the 201ccommercial enterprise market 201d ) .
in 2008 , the segment 2019s net sales represented 27% ( 27 % ) of the company 2019s consolidated net sales , compared to 21% ( 21 % ) in 2007 and 13% ( 13 % ) in 2006 .
( dollars in millions ) 2008 2007 2006 2008 20142007 2007 20142006 years ended december 31 percent change .

( dollars in millions ) | years ended december 31 2008 | years ended december 31 2007 | years ended december 31 2006 | years ended december 31 2008 20142007 | 2007 20142006
----------------------- | ---------------------------- | ---------------------------- | ---------------------------- | ------------------------------------- | -------------
segment net sales       | $ 8093                       | $ 7729                       | $ 5400                       | 5% ( 5 % )                            | 43% ( 43 % )
operating earnings      | 1496                         | 1213                         | 958                          | 23% ( 23 % )                          | 27% ( 27 % )

segment results 20142008 compared to 2007 in 2008 , the segment 2019s net sales increased 5% ( 5 % ) to $ 8.1 billion , compared to $ 7.7 billion in 2007 .
the 5% ( 5 % ) increase in net sales reflects an 8% ( 8 % ) increase in net sales to the government and public safety market , partially offset by a 2% ( 2 % ) decrease in net sales to the commercial enterprise market .
the increase in net sales to the government and public safety market was primarily driven by : ( i ) increased net sales outside of north america , and ( ii ) the net sales generated by vertex standard co. , ltd. , a business the company acquired a controlling interest of in january 2008 , partially offset by lower net sales in north america .
on a geographic basis , the segment 2019s net sales were higher in emea , asia and latin america and lower in north america .
65management 2019s discussion and analysis of financial condition and results of operations %%transmsg*** transmitting job : c49054 pcn : 068000000 ***%%pcmsg|65 |00024|yes|no|02/24/2009 12:31|0|0|page is valid , no graphics -- color : n|


page 22 of 100 in addition to worldview-3 , some of the segment 2019s other high-profile contracts include : the james webb space telescope , a successor to the hubble space telescope ; the joint polar satellite system , the next-generation satellite weather monitoring system ; the global precipitation measurement-microwave imager , which will play an essential role in the earth 2019s weather and environmental forecasting ; and a number of antennas and sensors for the joint strike fighter .
segment earnings in 2010 as compared to 2009 increased by $ 8.4 million due to favorable fixed-price program performance and higher sales , partially offset by the program reductions described above .
segment earnings in 2009 were down $ 14.8 million compared to 2008 , primarily attributable to the winding down of several large programs and overall reduced program activity .
on february 15 , 2008 , ball completed the sale of its shares in bsg to qinetiq pty ltd for approximately $ 10.5 million , including cash sold of $ 1.8 million .
the subsidiary provided services to the australian department of defense and related government agencies .
after an adjustment for working capital items , the sale resulted in a pretax gain of $ 7.1 million .
sales to the u.s .
government , either directly as a prime contractor or indirectly as a subcontractor , represented 96 percent of segment sales in 2010 , 94 percent in 2009 and 91 percent in 2008 .
contracted backlog for the aerospace and technologies segment at december 31 , 2010 and 2009 , was $ 989 million and $ 518 million , respectively .
the increase in backlog is primarily due to the awards of the worldview-3 and joint polar satellite system ( jpss ) contracts .
comparisons of backlog are not necessarily indicative of the trend of future operations .
discontinued operations 2013 plastic packaging , americas in august 2010 , we completed the sale of our plastics packaging business and received gross proceeds of $ 280 million .
this amount included $ 15 million of contingent consideration recognized at closing but did not include preliminary closing adjustments totaling $ 18.5 million paid in the fourth quarter .
the sale of our plastics packaging business included five u.s .
plants that manufactured polyethylene terephthalate ( pet ) bottles and preforms and polypropylene bottles , as well as associated customer contracts and other related assets .
our plastics business employed approximately 1000 people and had sales of $ 635 million in 2009 .
the manufacturing plants were located in ames , iowa ; batavia , illinois ; bellevue , ohio ; chino , california ; and delran , new jersey .
the research and development operations were based in broomfield and westminster , colorado .
the following table summarizes the operating results for the discontinued operations for the years ended december 31: .

( $ in millions )                               | 2010             | 2009           | 2008
----------------------------------------------- | ---------------- | -------------- | ------------
net sales                                       | $ 318.5          | $ 634.9        | $ 735.4
earnings from operations                        | $ 3.5            | $ 19.6         | $ 18.2
gain on sale of business                        | 8.6              | 2212           | 2212
loss on asset impairment                        | -107.1 ( 107.1 ) | 2212           | 2212
loss on business consolidation activities ( a ) | -10.4 ( 10.4 )   | -23.1 ( 23.1 ) | -8.3 ( 8.3 )
gain on disposition                             | 2212             | 4.3            | 2212
tax benefit ( provision )                       | 30.5             | -3.0 ( 3.0 )   | -5.3 ( 5.3 )
discontinued operations net of tax              | $ -74.9 ( 74.9 ) | $ -2.2 ( 2.2 ) | $ 4.6

( a ) includes net charges recorded to reflect costs associated with the closure of plastics packaging manufacturing plants .
additional segment information for additional information regarding our segments , see the business segment information in note 2 accompanying the consolidated financial statements within item 8 of this report .
the charges recorded for business consolidation activities were based on estimates by ball management and were developed from information available at the time .
if actual outcomes vary from the estimates , the differences will be reflected in current period earnings in the consolidated statement of earnings and identified as business consolidation gains and losses .
additional details about our business consolidation activities and associated costs are provided in note 5 accompanying the consolidated financial statements within item 8 of this report.