jpmorgan chase & co./2009 annual report 181 the following table shows the current credit risk of derivative receivables after netting adjustments , and the current liquidity risk of derivative payables after netting adjustments , as of december 31 , 2009. .

december 31 2009 ( in millions )                       | derivative receivables | derivative payables
------------------------------------------------------ | ---------------------- | --------------------
gross derivative fair value                            | $ 1565518              | $ 1519183
nettingadjustment 2013 offsetting receivables/payables | -1419840 ( 1419840 )   | -1419840 ( 1419840 )
nettingadjustment 2013 cash collateral received/paid   | -65468 ( 65468 )       | -39218 ( 39218 )
carrying value on consolidated balance sheets          | $ 80210                | $ 60125

in addition to the collateral amounts reflected in the table above , at december 31 , 2009 , the firm had received and posted liquid secu- rities collateral in the amount of $ 15.5 billion and $ 11.7 billion , respectively .
the firm also receives and delivers collateral at the initiation of derivative transactions , which is available as security against potential exposure that could arise should the fair value of the transactions move in the firm 2019s or client 2019s favor , respectively .
furthermore , the firm and its counterparties hold collateral related to contracts that have a non-daily call frequency for collateral to be posted , and collateral that the firm or a counterparty has agreed to return but has not yet settled as of the reporting date .
at december 31 , 2009 , the firm had received $ 16.9 billion and delivered $ 5.8 billion of such additional collateral .
these amounts were not netted against the derivative receivables and payables in the table above , because , at an individual counterparty level , the collateral exceeded the fair value exposure at december 31 , 2009 .
credit derivatives credit derivatives are financial instruments whose value is derived from the credit risk associated with the debt of a third-party issuer ( the reference entity ) and which allow one party ( the protection purchaser ) to transfer that risk to another party ( the protection seller ) .
credit derivatives expose the protection purchaser to the creditworthiness of the protection seller , as the protection seller is required to make payments under the contract when the reference entity experiences a credit event , such as a bankruptcy , a failure to pay its obligation or a restructuring .
the seller of credit protection receives a premium for providing protection but has the risk that the underlying instrument referenced in the contract will be subject to a credit event .
the firm is both a purchaser and seller of protection in the credit derivatives market and uses these derivatives for two primary purposes .
first , in its capacity as a market-maker in the dealer/client business , the firm actively risk manages a portfolio of credit derivatives by purchasing and selling credit protection , pre- dominantly on corporate debt obligations , to meet the needs of customers .
as a seller of protection , the firm 2019s exposure to a given reference entity may be offset partially , or entirely , with a contract to purchase protection from another counterparty on the same or similar reference entity .
second , the firm uses credit derivatives to mitigate credit risk associated with its overall derivative receivables and traditional commercial credit lending exposures ( loans and unfunded commitments ) as well as to manage its exposure to residential and commercial mortgages .
see note 3 on pages 156--- 173 of this annual report for further information on the firm 2019s mortgage-related exposures .
in accomplishing the above , the firm uses different types of credit derivatives .
following is a summary of various types of credit derivatives .
credit default swaps credit derivatives may reference the credit of either a single refer- ence entity ( 201csingle-name 201d ) or a broad-based index , as described further below .
the firm purchases and sells protection on both single- name and index-reference obligations .
single-name cds and index cds contracts are both otc derivative contracts .
single- name cds are used to manage the default risk of a single reference entity , while cds index are used to manage credit risk associated with the broader credit markets or credit market segments .
like the s&p 500 and other market indices , a cds index is comprised of a portfolio of cds across many reference entities .
new series of cds indices are established approximately every six months with a new underlying portfolio of reference entities to reflect changes in the credit markets .
if one of the reference entities in the index experi- ences a credit event , then the reference entity that defaulted is removed from the index .
cds can also be referenced against spe- cific portfolios of reference names or against customized exposure levels based on specific client demands : for example , to provide protection against the first $ 1 million of realized credit losses in a $ 10 million portfolio of exposure .
such structures are commonly known as tranche cds .
for both single-name cds contracts and index cds , upon the occurrence of a credit event , under the terms of a cds contract neither party to the cds contract has recourse to the reference entity .
the protection purchaser has recourse to the protection seller for the difference between the face value of the cds contract and the fair value of the reference obligation at the time of settling the credit derivative contract , also known as the recovery value .
the protection purchaser does not need to hold the debt instrument of the underlying reference entity in order to receive amounts due under the cds contract when a credit event occurs .
credit-linked notes a credit linked note ( 201ccln 201d ) is a funded credit derivative where the issuer of the cln purchases credit protection on a referenced entity from the note investor .
under the contract , the investor pays the issuer par value of the note at the inception of the transaction , and in return , the issuer pays periodic payments to the investor , based on the credit risk of the referenced entity .
the issuer also repays the investor the par value of the note at maturity unless the reference entity experiences a specified credit event .
in that event , the issuer is not obligated to repay the par value of the note , but rather , the issuer pays the investor the difference between the par value of the note


the aes corporation notes to consolidated financial statements 2014 ( continued ) december 31 , 2011 , 2010 , and 2009 may require the government to acquire an ownership interest and the current expectation of future losses .
our evaluation indicated that the long-lived assets were no longer recoverable and , accordingly , they were written down to their estimated fair value of $ 24 million based on a discounted cash flow analysis .
the long-lived assets had a carrying amount of $ 66 million prior to the recognition of asset impairment expense .
kelanitissa is a build- operate-transfer ( bot ) generation facility and payments under its ppa are scheduled to decline over the ppa term .
it is possible that further impairment charges may be required in the future as kelanitissa gets closer to the bot date .
kelanitissa is reported in the asia generation reportable segment .
asset impairment expense for the year ended december 31 , 2010 consisted of : ( in millions ) .

                               | 2010 ( in millions )
------------------------------ | --------------------
southland ( huntington beach ) | $ 200
tisza ii                       | 85
deepwater                      | 79
other                          | 25
total                          | $ 389

southland 2014in september 2010 , a new environmental policy on the use of ocean water to cool generation facilities was issued in california that requires generation plants to comply with the policy by december 31 , 2020 and would require significant capital expenditure or plants 2019 shutdown .
the company 2019s huntington beach gas-fired generation facility in california , which is part of aes 2019 southland business , was impacted by the new policy .
the company performed an asset impairment test and determined the fair value of the asset group using a discounted cash flow analysis .
the carrying value of the asset group of $ 288 million exceeded the fair value of $ 88 million resulting in the recognition of asset impairment expense of $ 200 million for the year ended december 31 , 2010 .
southland is reported in the north america generation reportable segment .
tisza ii 2014during the third quarter of 2010 , the company entered into annual negotiations with the offtaker of tisza ii .
as a result of these preliminary negotiations , as well as the further deterioration of the economic environment in hungary , the company determined that an indicator of impairment existed at september 30 , 2010 .
thus , the company performed an asset impairment test and determined that based on the undiscounted cash flow analysis , the carrying amount of the tisza ii asset group was not recoverable .
the fair value of the asset group was then determined using a discounted cash flow analysis .
the carrying value of the tisza ii asset group of $ 160 million exceeded the fair value of $ 75 million resulting in the recognition of asset impairment expense of $ 85 million during the year ended december 31 , 2010 .
deepwater 2014in 2010 , deepwater , our 160 mw petcoke-fired merchant power plant located in texas , experienced deteriorating market conditions due to increasing petcoke prices and diminishing power prices .
as a result , deepwater incurred operating losses and was shut down from time to time to avoid negative operating margin .
in the fourth quarter of 2010 , management concluded that , on an undiscounted cash flow basis , the carrying amount of the asset group was no longer recoverable .
the fair value of deepwater was determined using a discounted cash flow analysis and $ 79 million of impairment expense was recognized .
deepwater is reported in the north america generation reportable segment.


schedule iii page 6 of 6 host hotels & resorts , inc. , and subsidiaries host hotels & resorts , l.p. , and subsidiaries real estate and accumulated depreciation december 31 , 2018 ( in millions ) ( b ) the change in accumulated depreciation and amortization of real estate assets for the fiscal years ended december 31 , 2018 , 2017 and 2016 is as follows: .

balance at december 31 2015          | $ 5666
------------------------------------ | ------------
depreciation and amortization        | 572
dispositions and other               | -159 ( 159 )
depreciation on assets held for sale | -130 ( 130 )
balance at december 31 2016          | 5949
depreciation and amortization        | 563
dispositions and other               | -247 ( 247 )
depreciation on assets held for sale | 7
balance at december 31 2017          | 6272
depreciation and amortization        | 546
dispositions and other               | -344 ( 344 )
depreciation on assets held for sale | -101 ( 101 )
balance at december 31 2018          | $ 6373

( c ) the aggregate cost of real estate for federal income tax purposes is approximately $ 10458 million at december 31 , 2018 .
( d ) the total cost of properties excludes construction-in-progress properties.


news corporation notes to the consolidated financial statements consideration transferred over the fair value of the net tangible and intangible assets acquired was recorded as goodwill .
the allocation is as follows ( in millions ) : assets acquired: .

cash                          | $ 108
----------------------------- | ------
other current assets          | 28
intangible assets             | 216
deferred income taxes         | 153
goodwill                      | 552
other non-current assets      | 69
total assets acquired         | $ 1126
liabilities assumed:          |
current liabilities           | $ 50
deferred income taxes         | 52
borrowings                    | 129
other non-current liabilities | 3
total liabilities assumed     | 234
net assets acquired           | $ 892

the acquired intangible assets relate to the license of the realtor.com ae trademark , which has a fair value of approximately $ 116 million and an indefinite life , and customer relationships , other tradenames and certain multiple listing service agreements with an aggregate fair value of approximately $ 100 million , which are being amortized over a weighted-average useful life of approximately 15 years .
the company also acquired technology , primarily associated with the realtor.com ae website , that has a fair value of approximately $ 39 million , which is being amortized over 4 years .
the acquired technology has been recorded in property , plant and equipment , net in the consolidated balance sheets as of the date of acquisition .
move had u.s .
federal net operating loss carryforwards ( 201cnols 201d ) of $ 947 million ( $ 332 million tax-effected ) at the date of acquisition .
the nols are subject to limitations as promulgated under section 382 of the internal revenue code of 1986 , as amended ( the 201ccode 201d ) .
section 382 of the code limits the amount of acquired nols that we can use on an annual basis to offset future u.s .
consolidated taxable income .
valuation allowances and unrecognized tax benefits were recorded against these nols in the amount of $ 484 million ( $ 170 million tax- effected ) as part of the purchase price allocation .
accordingly , the company expected approximately $ 463 million of nols could be utilized , and recorded a net deferred tax asset of $ 162 million as part of the purchase price allocation .
as a result of management 2019s plan to dispose of its digital education business , the company increased its estimated utilization of move 2019s nols by $ 167 million ( $ 58 million tax-effected ) and released valuation allowances equal to that amount .
upon filing its fiscal 2015 federal income tax return , the company reduced move 2019s nols by $ 298 million which represents the amount expected to expire unutilized due to the section 382 limitation discussed above .
as of june 30 , 2016 , the remaining move nols expected to be utilized are $ 573 million ( $ 201 million tax-effected ) .
the utilization of these nols is dependent on generating sufficient u.s .
taxable income prior to expiration which begins in varying amounts starting in 2021 .
the deferred tax assets established for move 2019s nols , net of valuation allowance and unrecognized tax benefits , are included in non- current deferred tax assets on the balance sheets.


consolidated income statement review our consolidated income statement is presented in item 8 of this report .
net income for 2012 was $ 3.0 billion compared with $ 3.1 billion for 2011 .
revenue growth of 8 percent and a decline in the provision for credit losses were more than offset by a 16 percent increase in noninterest expense in 2012 compared to 2011 .
further detail is included in the net interest income , noninterest income , provision for credit losses and noninterest expense portions of this consolidated income statement review .
net interest income table 2 : net interest income and net interest margin year ended december 31 dollars in millions 2012 2011 .

year ended december 31dollars in millions | 2012             | 2011
----------------------------------------- | ---------------- | ----------------
net interest income                       | $ 9640           | $ 8700
net interest margin                       | 3.94% ( 3.94 % ) | 3.92% ( 3.92 % )

changes in net interest income and margin result from the interaction of the volume and composition of interest-earning assets and related yields , interest-bearing liabilities and related rates paid , and noninterest-bearing sources of funding .
see the statistical information ( unaudited ) 2013 average consolidated balance sheet and net interest analysis and analysis of year-to-year changes in net interest income in item 8 of this report and the discussion of purchase accounting accretion of purchased impaired loans in the consolidated balance sheet review in this item 7 for additional information .
the increase in net interest income in 2012 compared with 2011 was primarily due to the impact of the rbc bank ( usa ) acquisition , organic loan growth and lower funding costs .
purchase accounting accretion remained stable at $ 1.1 billion in both periods .
the net interest margin was 3.94% ( 3.94 % ) for 2012 and 3.92% ( 3.92 % ) for 2011 .
the increase in the comparison was primarily due to a decrease in the weighted-average rate accrued on total interest- bearing liabilities of 29 basis points , largely offset by a 21 basis point decrease on the yield on total interest-earning assets .
the decrease in the rate on interest-bearing liabilities was primarily due to the runoff of maturing retail certificates of deposit and the redemption of additional trust preferred and hybrid capital securities during 2012 , in addition to an increase in fhlb borrowings and commercial paper as lower-cost funding sources .
the decrease in the yield on interest-earning assets was primarily due to lower rates on new loan volume and lower yields on new securities in the current low rate environment .
with respect to the first quarter of 2013 , we expect net interest income to decline by two to three percent compared to fourth quarter 2012 net interest income of $ 2.4 billion , due to a decrease in purchase accounting accretion of up to $ 50 to $ 60 million , including lower expected cash recoveries .
for the full year 2013 , we expect net interest income to decrease compared with 2012 , assuming an expected decline in purchase accounting accretion of approximately $ 400 million , while core net interest income is expected to increase in the year-over-year comparison .
we believe our net interest margin will come under pressure in 2013 , due to the expected decline in purchase accounting accretion and assuming that the current low rate environment continues .
noninterest income noninterest income totaled $ 5.9 billion for 2012 and $ 5.6 billion for 2011 .
the overall increase in the comparison was primarily due to an increase in residential mortgage loan sales revenue driven by higher loan origination volume , gains on sales of visa class b common shares and higher corporate service fees , largely offset by higher provision for residential mortgage repurchase obligations .
asset management revenue , including blackrock , totaled $ 1.2 billion in 2012 compared with $ 1.1 billion in 2011 .
this increase was primarily due to higher earnings from our blackrock investment .
discretionary assets under management increased to $ 112 billion at december 31 , 2012 compared with $ 107 billion at december 31 , 2011 driven by stronger average equity markets , positive net flows and strong sales performance .
for 2012 , consumer services fees were $ 1.1 billion compared with $ 1.2 billion in 2011 .
the decline reflected the regulatory impact of lower interchange fees on debit card transactions partially offset by customer growth .
as further discussed in the retail banking portion of the business segments review section of this item 7 , the dodd-frank limits on interchange rates were effective october 1 , 2011 and had a negative impact on revenue of approximately $ 314 million in 2012 and $ 75 million in 2011 .
this impact was partially offset by higher volumes of merchant , customer credit card and debit card transactions and the impact of the rbc bank ( usa ) acquisition .
corporate services revenue increased by $ .3 billion , or 30 percent , to $ 1.2 billion in 2012 compared with $ .9 billion in 2011 due to higher commercial mortgage servicing revenue and higher merger and acquisition advisory fees in 2012 .
the major components of corporate services revenue are treasury management revenue , corporate finance fees , including revenue from capital markets-related products and services , and commercial mortgage servicing revenue , including commercial mortgage banking activities .
see the product revenue portion of this consolidated income statement review for further detail .
the pnc financial services group , inc .
2013 form 10-k 39


improvements are amortized using the straight-line method over the lesser of the remaining respective lease term or estimated useful lives ranging from 1 to 15 years .
goodwill , purchased intangibles and other long-lived assets we review our goodwill for impairment annually , or more frequently , if facts and circumstances warrant a review .
we completed our annual impairment test in the second quarter of fiscal 2011 and determined that there was no impairment .
in the fourth quarter of fiscal 2011 , we announced changes to our business strategy which resulted in a reduction of forecasted revenue for certain of our products .
we performed an update to our goodwill impairment test for the enterprise reporting unit and determined there was no impairment .
goodwill is assigned to one or more reporting segments on the date of acquisition .
we evaluate goodwill for impairment by comparing the fair value of each of our reporting segments to its carrying value , including the associated goodwill .
to determine the fair values , we use the market approach based on comparable publicly traded companies in similar lines of businesses and the income approach based on estimated discounted future cash flows .
our cash flow assumptions consider historical and forecasted revenue , operating costs and other relevant factors .
we amortize intangible assets with finite lives over their estimated useful lives and review them for impairment whenever an impairment indicator exists .
we continually monitor events and changes in circumstances that could indicate carrying amounts of our long-lived assets , including our intangible assets may not be recoverable .
when such events or changes in circumstances occur , we assess recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows .
if the future undiscounted cash flows are less than the carrying amount of these assets , we recognize an impairment loss based on any excess of the carrying amount over the fair value of the assets .
we did not recognize any intangible asset impairment charges in fiscal 2011 , 2010 or 2009 .
our intangible assets are amortized over their estimated useful lives of 1 to 13 years .
amortization is based on the pattern in which the economic benefits of the intangible asset will be consumed .
the weighted average useful lives of our intangibles assets was as follows: .

                                     | weighted averageuseful life ( years )
------------------------------------ | -------------------------------------
purchased technology                 | 6
customer contracts and relationships | 10
trademarks                           | 7
acquired rights to use technology    | 9
localization                         | 1
other intangibles                    | 3

weighted average useful life ( years ) software development costs capitalization of software development costs for software to be sold , leased , or otherwise marketed begins upon the establishment of technological feasibility , which is generally the completion of a working prototype that has been certified as having no critical bugs and is a release candidate .
amortization begins once the software is ready for its intended use , generally based on the pattern in which the economic benefits will be consumed .
to date , software development costs incurred between completion of a working prototype and general availability of the related product have not been material .
internal use software we capitalize costs associated with customized internal-use software systems that have reached the application development stage .
such capitalized costs include external direct costs utilized in developing or obtaining the applications and payroll and payroll-related expenses for employees , who are directly associated with the development of the applications .
capitalization of such costs begins when the preliminary project stage is complete and ceases at the point in which the project is substantially complete and is ready for its intended purpose .
table of contents adobe systems incorporated notes to consolidated financial statements ( continued )


notes to consolidated financial statements 2014 ( continued ) the risk-free interest rate is based on the yield of a zero coupon united states treasury security with a maturity equal to the expected life of the option from the date of the grant .
our assumption on expected volatility is based on our historical volatility .
the dividend yield assumption is calculated using our average stock price over the preceding year and the annualized amount of our current quarterly dividend .
we based our assumptions on the expected lives of the options on our analysis of the historical exercise patterns of the options and our assumption on the future exercise pattern of options .
restricted stock shares awarded under the restricted stock program , issued under the 2000 plan and 2005 plan , are held in escrow and released to the grantee upon the grantee 2019s satisfaction of conditions of the grantee 2019s restricted stock agreement .
the grant date fair value of restricted stock awards is based on the quoted fair market value of our common stock at the award date .
compensation expense is recognized ratably during the escrow period of the award .
grants of restricted shares are subject to forfeiture if a grantee , among other conditions , leaves our employment prior to expiration of the restricted period .
grants of restricted shares generally vest one year after the date of grant with respect to 25% ( 25 % ) of the shares granted , an additional 25% ( 25 % ) after two years , an additional 25% ( 25 % ) after three years , and the remaining 25% ( 25 % ) after four years .
the following table summarizes the changes in non-vested restricted stock awards for the years ended may 31 , 2010 and 2009 ( share awards in thousands ) : shares weighted average grant-date fair value .

                          | shares       | weighted average grant-date fair value
------------------------- | ------------ | --------------------------------------
non-vested at may 31 2008 | 518          | $ 39
granted                   | 430          | 43
vested                    | -159 ( 159 ) | 39
forfeited                 | -27 ( 27 )   | 41
non-vested at may 31 2009 | 762          | 42
granted                   | 420          | 42
vested                    | -302 ( 302 ) | 41
forfeited                 | -167 ( 167 ) | 43
non-vested at may 31 2010 | 713          | 42

the weighted average grant-date fair value of share awards granted in the year ended may 31 , 2008 was $ 38 .
the total fair value of share awards vested during the years ended may 31 , 2010 , 2009 and 2008 was $ 12.4 million , $ 6.2 million and $ 4.1 million , respectively .
we recognized compensation expense for restricted stock of $ 12.1 million , $ 9.0 million , and $ 5.7 million in the years ended may 31 , 2010 , 2009 and 2008 .
as of may 31 , 2010 , there was $ 21.1 million of total unrecognized compensation cost related to unvested restricted stock awards that is expected to be recognized over a weighted average period of 2.5 years .
employee stock purchase plan we have an employee stock purchase plan under which the sale of 2.4 million shares of our common stock has been authorized .
employees may designate up to the lesser of $ 25000 or 20% ( 20 % ) of their annual compensation for the purchase of stock .
the price for shares purchased under the plan is 85% ( 85 % ) of the market value on the last day of the quarterly purchase period .
as of may 31 , 2010 , 0.9 million shares had been issued under this plan , with 1.5 million shares reserved for future issuance.


notes to consolidated financial statements the following table sets forth the activity related to the 2005 restructuring plan liabilities .
( millions ) .

balance at january 1 2005    | $ 2014
---------------------------- | ------------
expensed in 2005             | 141
cash payments in 2005        | -23 ( 23 )
foreign currency revaluation | -2 ( 2 )
balance at december 31 2005  | 116
expensed in 2006             | 155
cash payments in 2006        | -141 ( 141 )
foreign currency revaluation | 4
balance at december 31 2006  | 134
expensed in 2007             | 38
cash payments in 2007        | -110 ( 110 )
foreign currency revaluation | 1
balance at december 31 2007  | $ 63

aon 2019s unpaid restructuring liabilities are included in both accounts payable and accrued liabilities and other non-current liabilities in the consolidated statements of financial position .
aon corporation


equity compensation plan information the following table presents the equity securities available for issuance under our equity compensation plans as of december 31 , 2015 .
equity compensation plan information plan category number of securities to be issued upon exercise of outstanding options , warrants and rights ( 1 ) weighted-average exercise price of outstanding options , warrants and rights ( 2 ) number of securities remaining available for future issuance under equity compensation plans ( excluding securities reflected in column ( a ) ) ( a ) ( b ) ( c ) equity compensation plans approved by security holders 1424356 $ 33.90 4281952 equity compensation plans not approved by security holders ( 3 ) 2014 2014 2014 .

plan category                                                    | number of securities to be issued upon exercise of outstanding options warrants and rights ( 1 ) ( a ) ( b ) | weighted-average exercise price of outstanding optionswarrants and rights ( 2 ) | number of securities remaining available for future issuance under equity compensation plans ( excluding securitiesreflected in column ( a ) ) ( c )
---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
equity compensation plans approved by security holders           | 1424356                                                                                | $ 33.90                                                                         | 4281952
equity compensation plans not approved by security holders ( 3 ) | 2014                                                                                | 2014                                                                            | 2014
total                                                            | 1424356                                                                                | $ 33.90                                                                         | 4281952

( 1 ) includes grants made under the huntington ingalls industries , inc .
2012 long-term incentive stock plan ( the "2012 plan" ) , which was approved by our stockholders on may 2 , 2012 , and the huntington ingalls industries , inc .
2011 long-term incentive stock plan ( the "2011 plan" ) , which was approved by the sole stockholder of hii prior to its spin-off from northrop grumman corporation .
of these shares , 533397 were subject to stock options and 54191 were stock rights granted under the 2011 plan .
in addition , this number includes 35553 stock rights , 10279 restricted stock rights , and 790936 restricted performance stock rights granted under the 2012 plan , assuming target performance achievement .
( 2 ) this is the weighted average exercise price of the 533397 outstanding stock options only .
( 3 ) there are no awards made under plans not approved by security holders .
item 13 .
certain relationships and related transactions , and director independence information as to certain relationships and related transactions and director independence will be incorporated herein by reference to the proxy statement for our 2016 annual meeting of stockholders , to be filed within 120 days after the end of the company 2019s fiscal year .
item 14 .
principal accountant fees and services information as to principal accountant fees and services will be incorporated herein by reference to the proxy statement for our 2016 annual meeting of stockholders , to be filed within 120 days after the end of the company 2019s fiscal year.


during 2014 , 2013 and 2012 , netherland , sewell & associates , inc .
( "nsai" ) prepared a certification of the prior year's reserves for the alba field in e.g .
the nsai summary reports are filed as an exhibit to this annual report on form 10-k .
members of the nsai team have multiple years of industry experience , having worked for large , international oil and gas companies before joining nsai .
the senior technical advisor has over 35 years of practical experience in petroleum geosciences , with over 15 years experience in the estimation and evaluation of reserves .
the second team member has over 10 years of practical experience in petroleum engineering , with 5 years experience in the estimation and evaluation of reserves .
both are registered professional engineers in the state of texas .
ryder scott company ( "ryder scott" ) also performed audits of the prior years' reserves of several of our fields in 2014 , 2013 and 2012 .
their summary reports are filed as exhibits to this annual report on form 10-k .
the team lead for ryder scott has over 20 years of industry experience , having worked for a major international oil and gas company before joining ryder scott .
he is a member of spe , where he served on the oil and gas reserves committee , and is a registered professional engineer in the state of texas .
changes in proved undeveloped reserves as of december 31 , 2014 , 728 mmboe of proved undeveloped reserves were reported , an increase of 101 mmboe from december 31 , 2013 .
the following table shows changes in total proved undeveloped reserves for 2014 : ( mmboe ) .

beginning of year                          | 627
------------------------------------------ | ------------
revisions of previous estimates            | 1
improved recovery                          | 1
purchases of reserves in place             | 4
extensions discoveries and other additions | 227
dispositions                               | -29 ( 29 )
transfers to proved developed              | -103 ( 103 )
end of year                                | 728

significant additions to proved undeveloped reserves during 2014 included 121 mmboe in the eagle ford and 61 mmboe in the bakken shale plays due to development drilling .
transfers from proved undeveloped to proved developed reserves included 67 mmboe in the eagle ford , 26 mmboe in the bakken and 1 mmboe in the oklahoma resource basins due to development drilling and completions .
costs incurred in 2014 , 2013 and 2012 relating to the development of proved undeveloped reserves , were $ 3149 million , $ 2536 million and $ 1995 million .
a total of 102 mmboe was booked as extensions , discoveries or other additions due to the application of reliable technology .
technologies included statistical analysis of production performance , decline curve analysis , pressure and 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 proved 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 728 mmboe of proved undeveloped reserves at december 31 , 2014 , 19 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 in the second quarter of 2015 .
proved undeveloped reserves for the north gialo development , located in the libyan sahara desert , were booked for the first time in 2010 .
this development , which is anticipated to take more than five years to develop , is executed by the operator and encompasses a multi-year 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 lead to an expected project execution time frame 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 and civil unrest in 2013-2014 have also extended the project duration .
as of december 31 , 2014 , future development costs estimated to be required for the development of proved undeveloped crude oil and condensate , ngls , natural gas and synthetic crude oil reserves related to continuing operations for the years 2015 through 2019 are projected to be $ 2915 million , $ 2598 million , $ 2493 million , $ 2669 million and $ 2745 million.


the pnc financial services group , inc .
2013 form 10-k 65 liquidity and capital management liquidity risk has two fundamental components .
the first is potential loss assuming we were unable to meet our funding requirements at a reasonable cost .
the second is the potential inability to operate our businesses because adequate contingent liquidity is not available .
we manage liquidity risk at the consolidated company level ( bank , parent company and nonbank subsidiaries combined ) to help ensure that we can obtain cost-effective funding to meet current and future obligations under both normal 201cbusiness as usual 201d and stressful circumstances , and to help ensure that we maintain an appropriate level of contingent liquidity .
management monitors liquidity through a series of early warning indicators that may indicate a potential market , or pnc-specific , liquidity stress event .
in addition , management performs a set of liquidity stress tests over multiple time horizons with varying levels of severity and maintains a contingency funding plan to address a potential liquidity stress event .
in the most severe liquidity stress simulation , we assume that our liquidity position is under pressure , while the market in general is under systemic pressure .
the simulation considers , among other things , the impact of restricted access to both secured and unsecured external sources of funding , accelerated run-off of customer deposits , valuation pressure on assets and heavy demand to fund committed obligations .
parent company liquidity guidelines are designed to help ensure that sufficient liquidity is available to meet our parent company obligations over the succeeding 24-month period .
liquidity-related risk limits are established within our enterprise liquidity management policy and supporting policies .
management committees , including the asset and liability committee , and the board of directors and its risk committee regularly review compliance with key established limits .
in addition to these liquidity monitoring measures and tools described above , we also monitor our liquidity by reference to the liquidity coverage ratio ( lcr ) which is further described in the supervision and regulation section in item 1 of this report .
pnc and pnc bank calculate the lcr on a daily basis and as of december 31 , 2018 , the lcr for pnc and pnc bank exceeded the fully phased-in requirement of 100% ( 100 % ) .
we provide additional information regarding regulatory liquidity requirements and their potential impact on us in the supervision and regulation section of item 1 business and item 1a risk factors of this report .
sources of liquidity our largest source of liquidity on a consolidated basis is the customer deposit base generated by our banking businesses .
these deposits provide relatively stable and low-cost funding .
total deposits increased to $ 267.8 billion at december 31 , 2018 from $ 265.1 billion at december 31 , 2017 driven by growth in interest-bearing deposits partially offset by a decrease in noninterest-bearing deposits .
see the funding sources section of the consolidated balance sheet review in this report for additional information related to our deposits .
additionally , certain assets determined by us to be liquid as well as unused borrowing capacity from a number of sources are also available to manage our liquidity position .
at december 31 , 2018 , our liquid assets consisted of short-term investments ( federal funds sold , resale agreements , trading securities and interest-earning deposits with banks ) totaling $ 22.1 billion and securities available for sale totaling $ 63.4 billion .
the level of liquid assets fluctuates over time based on many factors , including market conditions , loan and deposit growth and balance sheet management activities .
our liquid assets included $ 2.7 billion of securities available for sale and trading securities pledged as collateral to secure public and trust deposits , repurchase agreements and for other purposes .
in addition , $ 4.9 billion of securities held to maturity were also pledged as collateral for these purposes .
we also obtain liquidity through various forms of funding , including long-term debt ( senior notes , subordinated debt and fhlb borrowings ) and short-term borrowings ( securities sold under repurchase agreements , commercial paper and other short-term borrowings ) .
see note 10 borrowed funds and the funding sources section of the consolidated balance sheet review in this report for additional information related to our borrowings .
total senior and subordinated debt , on a consolidated basis , decreased due to the following activity : table 24 : senior and subordinated debt .

in billions          | 2018
-------------------- | ------------
january 1            | $ 33.3
issuances            | 4.5
calls and maturities | -6.8 ( 6.8 )
other                | -.1 ( .1 )
december 31          | $ 30.9


credit commitments and lines of credit the table below summarizes citigroup 2019s credit commitments : in millions of dollars u.s .
outside of u.s .
december 31 , december 31 .

in millions of dollars                                                         | u.s .    | outside ofu.s . | december 312018 | december 31 2017
------------------------------------------------------------------------------ | -------- | --------------- | --------------- | ----------------
commercial and similar letters of credit                                       | $ 823    | $ 4638          | $ 5461          | $ 5000
one- to four-family residential mortgages                                      | 1056     | 1615            | 2671            | 2674
revolving open-end loans secured by one- to four-family residential properties | 10019    | 1355            | 11374           | 12323
commercial real estate construction and land development                       | 9565     | 1728            | 11293           | 11151
credit card lines                                                              | 605857   | 90150           | 696007          | 678300
commercial and other consumer loan commitments                                 | 185849   | 102918          | 288767          | 272655
other commitments and contingencies                                            | 2560     | 761             | 3321            | 3071
total                                                                          | $ 815729 | $ 203165        | $ 1018894       | $ 985174

the majority of unused commitments are contingent upon customers maintaining specific credit standards .
commercial commitments generally have floating interest rates and fixed expiration dates and may require payment of fees .
such fees ( net of certain direct costs ) are deferred and , upon exercise of the commitment , amortized over the life of the loan or , if exercise is deemed remote , amortized over the commitment period .
commercial and similar letters of credit a commercial letter of credit is an instrument by which citigroup substitutes its credit for that of a customer to enable the customer to finance the purchase of goods or to incur other commitments .
citigroup issues a letter on behalf of its client to a supplier and agrees to pay the supplier upon presentation of documentary evidence that the supplier has performed in accordance with the terms of the letter of credit .
when a letter of credit is drawn , the customer is then required to reimburse citigroup .
one- to four-family residential mortgages a one- to four-family residential mortgage commitment is a written confirmation from citigroup to a seller of a property that the bank will advance the specified sums enabling the buyer to complete the purchase .
revolving open-end loans secured by one- to four-family residential properties revolving open-end loans secured by one- to four-family residential properties are essentially home equity lines of credit .
a home equity line of credit is a loan secured by a primary residence or second home to the extent of the excess of fair market value over the debt outstanding for the first mortgage .
commercial real estate , construction and land development commercial real estate , construction and land development include unused portions of commitments to extend credit for the purpose of financing commercial and multifamily residential properties as well as land development projects .
both secured-by-real-estate and unsecured commitments are included in this line , as well as undistributed loan proceeds , where there is an obligation to advance for construction progress payments .
however , this line only includes those extensions of credit that , once funded , will be classified as total loans , net on the consolidated balance sheet .
credit card lines citigroup provides credit to customers by issuing credit cards .
the credit card lines are cancelable by providing notice to the cardholder or without such notice as permitted by local law .
commercial and other consumer loan commitments commercial and other consumer loan commitments include overdraft and liquidity facilities as well as commercial commitments to make or purchase loans , purchase third-party receivables , provide note issuance or revolving underwriting facilities and invest in the form of equity .
other commitments and contingencies other commitments and contingencies include committed or unsettled regular-way reverse repurchase agreements and all other transactions related to commitments and contingencies not reported on the lines above .
unsettled reverse repurchase and securities lending agreements and unsettled repurchase and securities borrowing agreements in addition , in the normal course of business , citigroup enters into reverse repurchase and securities borrowing agreements , as well as repurchase and securities lending agreements , which settle at a future date .
at december 31 , 2018 , and 2017 , citigroup had $ 36.1 billion and $ 35.0 billion unsettled reverse repurchase and securities borrowing agreements , respectively , and $ 30.7 billion and $ 19.1 billion unsettled repurchase and securities lending agreements , respectively .
for a further discussion of securities purchased under agreements to resell and securities borrowed , and securities sold under agreements to repurchase and securities loaned , including the company 2019s policy for offsetting repurchase and reverse repurchase agreements , see note 11 to the consolidated financial statements.


mastercard incorporated notes to consolidated financial statements 2014 ( continued ) ( in thousands , except percent and per share data ) note 17 .
commitments at december 31 , 2008 , the company had the following future minimum payments due under non-cancelable agreements : capital leases operating leases sponsorship , licensing & .

           | total    | capital leases | operating leases | sponsorship licensing & other
---------- | -------- | -------------- | ---------------- | -----------------------------
2009       | $ 372320 | $ 8435         | $ 40327          | $ 323558
2010       | 140659   | 2758           | 18403            | 119498
2011       | 80823    | 1978           | 11555            | 67290
2012       | 50099    | 1819           | 9271             | 39009
2013       | 50012    | 36837          | 7062             | 6113
thereafter | 21292    | 2014           | 19380            | 1912
total      | $ 715205 | $ 51827        | $ 105998         | $ 557380

included in the table above are capital leases with imputed interest expense of $ 9483 and a net present value of minimum lease payments of $ 42343 .
in addition , at december 31 , 2008 , $ 92300 of the future minimum payments in the table above for leases , sponsorship , licensing and other agreements was accrued .
consolidated rental expense for the company 2019s office space , which is recognized on a straight line basis over the life of the lease , was approximately $ 42905 , $ 35614 and $ 31467 for the years ended december 31 , 2008 , 2007 and 2006 , respectively .
consolidated lease expense for automobiles , computer equipment and office equipment was $ 7694 , $ 7679 and $ 8419 for the years ended december 31 , 2008 , 2007 and 2006 , respectively .
in january 2003 , mastercard purchased a building in kansas city , missouri for approximately $ 23572 .
the building is a co-processing data center which replaced a back-up data center in lake success , new york .
during 2003 , mastercard entered into agreements with the city of kansas city for ( i ) the sale-leaseback of the building and related equipment which totaled $ 36382 and ( ii ) the purchase of municipal bonds for the same amount which have been classified as municipal bonds held-to-maturity .
the agreements enabled mastercard to secure state and local financial benefits .
no gain or loss was recorded in connection with the agreements .
the leaseback has been accounted for as a capital lease as the agreement contains a bargain purchase option at the end of the ten-year lease term on april 1 , 2013 .
the building and related equipment are being depreciated over their estimated economic life in accordance with the company 2019s policy .
rent of $ 1819 is due annually and is equal to the interest due on the municipal bonds .
the future minimum lease payments are $ 45781 and are included in the table above .
a portion of the building was subleased to the original building owner for a five-year term with a renewal option .
as of december 31 , 2008 , the future minimum sublease rental income is $ 4416 .
note 18 .
obligations under litigation settlements on october 27 , 2008 , mastercard and visa inc .
( 201cvisa 201d ) entered into a settlement agreement ( the 201cdiscover settlement 201d ) with discover financial services , inc .
( 201cdiscover 201d ) relating to the u.s .
federal antitrust litigation amongst the parties .
the discover settlement ended all litigation between the parties for a total of $ 2750000 .
in july 2008 , mastercard and visa had entered into a judgment sharing agreement that allocated responsibility for any judgment or settlement of the discover action between the parties .
accordingly , the mastercard share of the discover settlement was $ 862500 , which was paid to discover in november 2008 .
in addition , in connection with the discover settlement , morgan stanley , discover 2019s former parent company , paid mastercard $ 35000 in november 2008 , pursuant to a separate agreement .
the net impact of $ 827500 is included in litigation settlements for the year ended december 31 , 2008.


notes to consolidated financial statements 2013 ( continued ) ( amounts in millions , except per share amounts ) guarantees we have guaranteed certain obligations of our subsidiaries relating principally to operating leases and credit facilities of certain subsidiaries .
the amount of parent company guarantees on lease obligations was $ 410.3 and $ 385.1 as of december 31 , 2012 and 2011 , respectively , and the amount of parent company guarantees primarily relating to credit facilities was $ 283.4 and $ 327.5 as of december 31 , 2012 and 2011 , respectively .
in the event of non-payment by the applicable subsidiary of the obligations covered by a guarantee , we would be obligated to pay the amounts covered by that guarantee .
as of december 31 , 2012 , there were no material assets pledged as security for such parent company guarantees .
contingent acquisition obligations the following table details the estimated future contingent acquisition obligations payable in cash as of december 31 .

                                                                      | 2013         | 2014         | 2015         | 2016         | 2017   | thereafter | total
--------------------------------------------------------------------- | ------------ | ------------ | ------------ | ------------ | ------ | ---------- | ------------
deferred acquisition payments                                         | $ 26.0       | $ 12.4       | $ 9.7        | $ 46.4       | $ 18.9 | $ 2.0      | $ 115.4
redeemable noncontrolling interests and call options with affiliates1 | 20.5         | 43.8         | 32.9         | 5.7          | 2.2    | 10.6       | 115.7
total contingent acquisition payments                                 | 46.5         | 56.2         | 42.6         | 52.1         | 21.1   | 12.6       | 231.1
less : cash compensation expense included above                       | -0.7 ( 0.7 ) | -0.6 ( 0.6 ) | -0.8 ( 0.8 ) | -0.2 ( 0.2 ) | 0.0    | 0.0        | -2.3 ( 2.3 )
total                                                                 | $ 45.8       | $ 55.6       | $ 41.8       | $ 51.9       | $ 21.1 | $ 12.6     | $ 228.8

1 we have entered into certain acquisitions that contain both redeemable noncontrolling interests and call options with similar terms and conditions .
we have certain redeemable noncontrolling interests that are exercisable at the discretion of the noncontrolling equity owners as of december 31 , 2012 .
these estimated payments of $ 16.4 are included within the total payments expected to be made in 2013 , and will continue to be carried forward into 2014 or beyond until exercised or expired .
redeemable noncontrolling interests are included in the table at current exercise price payable in cash , not at applicable redemption value in accordance with the authoritative guidance for classification and measurement of redeemable securities .
the estimated amounts listed would be paid in the event of exercise at the earliest exercise date .
see note 6 for further information relating to the payment structure of our acquisitions .
all payments are contingent upon achieving projected operating performance targets and satisfying other conditions specified in the related agreements and are subject to revisions as the earn-out periods progress .
legal matters we are involved in various legal proceedings , and subject to investigations , inspections , audits , inquiries and similar actions by governmental authorities , arising in the normal course of business .
we evaluate all cases each reporting period and record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount , or potential range , of loss can be reasonably estimated .
in certain cases , we cannot reasonably estimate the potential loss because , for example , the litigation is in its early stages .
while any outcome related to litigation or such governmental proceedings in which we are involved cannot be predicted with certainty , management believes that the outcome of these matters , individually and in the aggregate , will not have a material adverse effect on our financial condition , results of operations or cash flows .
note 15 : recent accounting standards impairment of indefinite-lived intangible assets in july 2012 , the financial accounting standards board ( 201cfasb 201d ) issued amended guidance to simplify impairment testing of indefinite-lived intangible assets other than goodwill .
the amended guidance permits an entity to first assess qualitative factors to determine whether it is 201cmore likely than not 201d that the indefinite-lived intangible asset is impaired .
if , after assessing qualitative factors , an entity concludes that it is not 201cmore likely than not 201d that the indefinite-lived intangible


dish network corporation notes to consolidated financial statements - continued 9 .
acquisitions dbsd north america and terrestar transactions on march 2 , 2012 , the fcc approved the transfer of 40 mhz of aws-4 wireless spectrum licenses held by dbsd north america and terrestar to us .
on march 9 , 2012 , we completed the dbsd transaction and the terrestar transaction , pursuant to which we acquired , among other things , certain satellite assets and wireless spectrum licenses held by dbsd north america and terrestar .
in addition , during the fourth quarter 2011 , we and sprint entered into a mutual release and settlement agreement ( the 201csprint settlement agreement 201d ) pursuant to which all issues then being disputed relating to the dbsd transaction and the terrestar transaction were resolved between us and sprint , including , but not limited to , issues relating to costs allegedly incurred by sprint to relocate users from the spectrum then licensed to dbsd north america and terrestar .
the total consideration to acquire the dbsd north america and terrestar assets was approximately $ 2.860 billion .
this amount includes $ 1.364 billion for the dbsd transaction , $ 1.382 billion for the terrestar transaction , and the net payment of $ 114 million to sprint pursuant to the sprint settlement agreement .
see note 16 for further information .
as a result of these acquisitions , we recognized the acquired assets and assumed liabilities based on our estimates of fair value at their acquisition date , including $ 102 million in an uncertain tax position in 201clong-term deferred revenue , distribution and carriage payments and other long-term liabilities 201d on our consolidated balance sheets .
subsequently , in the third quarter 2013 , this uncertain tax position was resolved and $ 102 million was reversed and recorded as a decrease in 201cincome tax ( provision ) benefit , net 201d on our consolidated statements of operations and comprehensive income ( loss ) for the year ended december 31 , 2013 .
10 .
discontinued operations as of december 31 , 2013 , blockbuster had ceased all material operations .
accordingly , our consolidated balance sheets , consolidated statements of operations and comprehensive income ( loss ) and consolidated statements of cash flows have been recast to present blockbuster as discontinued operations for all periods presented and the amounts presented in the notes to our consolidated financial statements relate only to our continuing operations , unless otherwise noted .
during the years ended december 31 , 2013 , 2012 and 2011 , the revenue from our discontinued operations was $ 503 million , $ 1.085 billion and $ 974 million , respectively .
201cincome ( loss ) from discontinued operations , before income taxes 201d for the same periods was a loss of $ 54 million , $ 62 million and $ 3 million , respectively .
in addition , 201cincome ( loss ) from discontinued operations , net of tax 201d for the same periods was a loss of $ 47 million , $ 37 million and $ 7 million , respectively .
as of december 31 , 2013 , the net assets from our discontinued operations consisted of the following : december 31 , 2013 ( in thousands ) .

                                                   | as of december 31 2013 ( in thousands )
-------------------------------------------------- | ---------------------------------------
current assets from discontinued operations        | $ 68239
noncurrent assets from discontinued operations     | 9965
current liabilities from discontinued operations   | -49471 ( 49471 )
long-term liabilities from discontinued operations | -19804 ( 19804 )
net assets from discontinued operations            | $ 8929


equity equity at december 31 , 2014 was $ 6.6 billion , a decrease of $ 1.6 billion from december 31 , 2013 .
the decrease resulted primarily due to share repurchases of $ 2.3 billion , $ 273 million of dividends to shareholders , and an increase in accumulated other comprehensive loss of $ 760 million , partially offset by net income of $ 1.4 billion .
the $ 760 million increase in accumulated other comprehensive loss from december 31 , 2013 , primarily reflects the following : 2022 negative net foreign currency translation adjustments of $ 504 million , which are attributable to the strengthening of the u.s .
dollar against certain foreign currencies , 2022 an increase of $ 260 million in net post-retirement benefit obligations , 2022 net derivative gains of $ 5 million , and 2022 net investment losses of $ 1 million .
review by segment general we serve clients through the following segments : 2022 risk solutions acts as an advisor and insurance and reinsurance broker , helping clients manage their risks , via consultation , as well as negotiation and placement of insurance risk with insurance carriers through our global distribution network .
2022 hr solutions partners with organizations to solve their most complex benefits , talent and related financial challenges , and improve business performance by designing , implementing , communicating and administering a wide range of human capital , retirement , investment management , health care , compensation and talent management strategies .
risk solutions .

years ended december 31 ( millions except percentage data ) | 2014             | 2013             | 2012
----------------------------------------------------------- | ---------------- | ---------------- | ----------------
revenue                                                     | $ 7834           | $ 7789           | $ 7632
operating income                                            | 1648             | 1540             | 1493
operating margin                                            | 21.0% ( 21.0 % ) | 19.8% ( 19.8 % ) | 19.6% ( 19.6 % )

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 2014 , pricing was flat on average globally , and we would still consider this to be a "soft market." 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 premiums paid by insureds .
additionally , continuing through 2014 , we faced difficult conditions as a result of continued weakness in the global economy , the repricing of credit risk and the deterioration of the financial markets .
weak economic conditions in many markets around the globe have reduced our customers' demand for our retail brokerage and reinsurance brokerage products , which have had a negative impact on our operational results .
risk solutions generated approximately 65% ( 65 % ) of our consolidated total revenues in 2014 .
revenues are generated primarily through fees paid by clients , commissions and fees paid by insurance and reinsurance companies , and investment income on funds held on behalf of clients .
our revenues vary from quarter to quarter throughout the year as a result of the timing of our clients' policy renewals , the net effect of new and lost business , the timing of services provided to our clients , and the income we earn on investments , which is heavily influenced by short-term interest rates .
we operate in a highly competitive industry and compete with many retail insurance brokerage and agency firms , as well as with individual brokers , agents , and direct writers of insurance coverage .
specifically , we address the highly specialized


entergy louisiana , llc management's financial discussion and analysis net revenue 2008 compared to 2007 net revenue consists of operating revenues net of : 1 ) fuel , fuel-related expenses , and gas purchased for resale , 2 ) purchased power expenses , and 3 ) other regulatory charges .
following is an analysis of the change in net revenue comparing 2008 to 2007 .
amount ( in millions ) .

                         | amount ( in millions )
------------------------ | ----------------------
2007 net revenue         | $ 991.1
retail electric price    | -17.1 ( 17.1 )
purchased power capacity | -12.0 ( 12.0 )
net wholesale revenue    | -7.4 ( 7.4 )
other                    | 4.6
2008 net revenue         | $ 959.2

the retail electric price variance is primarily due to the cessation of the interim storm recovery through the formula rate plan upon the act 55 financing of storm costs and a credit passed on to customers as a result of the act 55 storm cost financing , partially offset by increases in the formula rate plan effective october 2007 .
refer to "hurricane rita and hurricane katrina" and "state and local rate regulation" below for a discussion of the interim recovery of storm costs , the act 55 storm cost financing , and the formula rate plan filing .
the purchased power capacity variance is due to the amortization of deferred capacity costs effective september 2007 as a result of the formula rate plan filing in may 2007 .
purchased power capacity costs are offset in base revenues due to a base rate increase implemented to recover incremental deferred and ongoing purchased power capacity charges .
see "state and local rate regulation" below for a discussion of the formula rate plan filing .
the net wholesale revenue variance is primarily due to provisions recorded for potential rate refunds related to the treatment of interruptible load in pricing entergy system affiliate sales .
gross operating revenue and , fuel and purchased power expenses gross operating revenues increased primarily due to an increase of $ 364.7 million in fuel cost recovery revenues due to higher fuel rates offset by decreased usage .
the increase was partially offset by a decrease of $ 56.8 million in gross wholesale revenue due to a decrease in system agreement rough production cost equalization credits .
fuel and purchased power expenses increased primarily due to increases in the average market prices of natural gas and purchased power , partially offset by a decrease in the recovery from customers of deferred fuel costs.


a summary of the company 2019s significant contractual obligations as of december 31 , 2015 , follows : contractual obligations .

( millions )                                         | total   | payments due by year 2016 | payments due by year 2017 | payments due by year 2018 | payments due by year 2019 | payments due by year 2020 | payments due by year after 2020
---------------------------------------------------- | ------- | ------------------------- | ------------------------- | ------------------------- | ------------------------- | ------------------------- | -------------------------------
long-term debt including current portion ( note 10 ) | $ 9878  | $ 1125                    | $ 744                     | $ 993                     | $ 622                     | $ 1203                    | $ 5191
interest on long-term debt                           | 2244    | 174                       | 157                       | 153                       | 149                       | 146                       | 1465
operating leases ( note 14 )                         | 943     | 234                       | 191                       | 134                       | 86                        | 72                        | 226
capital leases ( note 14 )                           | 59      | 11                        | 6                         | 4                         | 3                         | 3                         | 32
unconditional purchase obligations and other         | 1631    | 1228                      | 160                       | 102                       | 54                        | 56                        | 31
total contractual cash obligations                   | $ 14755 | $ 2772                    | $ 1258                    | $ 1386                    | $ 914                     | $ 1480                    | $ 6945

long-term debt payments due in 2016 and 2017 include floating rate notes totaling $ 126 million ( classified as current portion of long-term debt ) , and $ 96 million ( included as a separate floating rate note in the long-term debt table ) , respectively , as a result of put provisions associated with these debt instruments .
interest projections on both floating and fixed rate long-term debt , including the effects of interest rate swaps , are based on effective interest rates as of december 31 , 2015 .
unconditional purchase obligations are defined as an agreement to purchase goods or services that is enforceable and legally binding on the company .
included in the unconditional purchase obligations category above are certain obligations related to take or pay contracts , capital commitments , service agreements and utilities .
these estimates include both unconditional purchase obligations with terms in excess of one year and normal ongoing purchase obligations with terms of less than one year .
many of these commitments relate to take or pay contracts , in which 3m guarantees payment to ensure availability of products or services that are sold to customers .
the company expects to receive consideration ( products or services ) for these unconditional purchase obligations .
contractual capital commitments are included in the preceding table , but these commitments represent a small part of the company 2019s expected capital spending in 2016 and beyond .
the purchase obligation amounts do not represent the entire anticipated purchases in the future , but represent only those items for which the company is contractually obligated .
the majority of 3m 2019s products and services are purchased as needed , with no unconditional commitment .
for this reason , these amounts will not provide a reliable indicator of the company 2019s expected future cash outflows on a stand-alone basis .
other obligations , included in the preceding table within the caption entitled 201cunconditional purchase obligations and other , 201d include the current portion of the liability for uncertain tax positions under asc 740 , which is expected to be paid out in cash in the next 12 months .
the company is not able to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease over time ; therefore , the long-term portion of the net tax liability of $ 208 million is excluded from the preceding table .
refer to note 8 for further details .
as discussed in note 11 , the company does not have a required minimum cash pension contribution obligation for its u.s .
plans in 2016 and company contributions to its u.s .
and international pension plans are expected to be largely discretionary in future years ; therefore , amounts related to these plans are not included in the preceding table .
financial instruments the company enters into foreign exchange forward contracts , options and swaps to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies and certain intercompany financing transactions .
the company manages interest rate risks using a mix of fixed and floating rate debt .
to help manage borrowing costs , the company may enter into interest rate swaps .
under these arrangements , the company agrees to exchange , at specified intervals , the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount .
the company manages commodity price risks through negotiated supply contracts , price protection agreements and forward contracts.


stockholder return performance graph the following graph compares the cumulative 5-year total stockholder return on our common stock relative to the cumulative total return of the nasdaq composite index and the s&p 400 information technology index .
the graph assumes that the value of the investment in our common stock on january 2 , 2010 and in each index on december 31 , 2009 ( including reinvestment of dividends ) was $ 100 and tracks it each year thereafter on the last day of cadence 2019s fiscal year through january 3 , 2015 and , for each index , on the last day of the calendar comparison of 5 year cumulative total return* among cadence design systems , inc. , the nasdaq composite index , and s&p 400 information technology cadence design systems , inc .
nasdaq composite s&p 400 information technology 12/28/13 1/3/151/1/11 12/31/11 12/29/121/2/10 *$ 100 invested on 1/2/10 in stock or 12/31/09 in index , including reinvestment of dividends .
indexes calculated on month-end basis .
copyright a9 2014 s&p , a division of the mcgraw-hill companies inc .
all rights reserved. .

                               | 1/2/2010 | 1/1/2011 | 12/31/2011 | 12/29/2012 | 12/28/2013 | 1/3/2015
------------------------------ | -------- | -------- | ---------- | ---------- | ---------- | --------
cadence design systems inc .   | 100.00   | 137.90   | 173.62     | 224.37     | 232.55     | 314.36
nasdaq composite               | 100.00   | 117.61   | 118.70     | 139.00     | 196.83     | 223.74
s&p 400 information technology | 100.00   | 128.72   | 115.22     | 135.29     | 173.25     | 187.84

the stock price performance included in this graph is not necessarily indicative of future stock price performance.


were more than offset by higher raw material and energy costs ( $ 312 million ) , increased market related downtime ( $ 187 million ) and other items ( $ 30 million ) .
com- pared with 2003 , higher 2005 earnings in the brazilian papers , u.s .
coated papers and u.s .
market pulp busi- nesses were offset by lower earnings in the u.s .
un- coated papers and the european papers businesses .
the printing papers segment took 995000 tons of downtime in 2005 , including 540000 tons of lack-of-order down- time to align production with customer demand .
this compared with 525000 tons of downtime in 2004 , of which 65000 tons related to lack-of-orders .
printing papers in millions 2005 2004 2003 .

in millions      | 2005   | 2004   | 2003
---------------- | ------ | ------ | ------
sales            | $ 7860 | $ 7670 | $ 7280
operating profit | $ 552  | $ 581  | $ 464

uncoated papers sales totaled $ 4.8 billion in 2005 compared with $ 5.0 billion in 2004 and 2003 .
sales price realizations in the united states averaged 4.4% ( 4.4 % ) higher in 2005 than in 2004 , and 4.6% ( 4.6 % ) higher than 2003 .
favorable pricing momentum which began in 2004 carried over into the beginning of 2005 .
demand , however , began to weaken across all grades as the year progressed , resulting in lower price realizations in the second and third quarters .
however , prices stabilized as the year ended .
total shipments for the year were 7.2% ( 7.2 % ) lower than in 2004 and 4.2% ( 4.2 % ) lower than in 2003 .
to continue matching our productive capacity with customer demand , the business announced the perma- nent closure of three uncoated freesheet machines and took significant lack-of-order downtime during the period .
demand showed some improvement toward the end of the year , bolstered by the introduction our new line of vision innovation paper products ( vip technologiestm ) , with improved brightness and white- ness .
mill operations were favorable compared to last year , and the rebuild of the no .
1 machine at the east- over , south carolina mill was completed as planned in the fourth quarter .
however , the favorable impacts of improved mill operations and lower overhead costs were more than offset by record high input costs for energy and wood and higher transportation costs compared to 2004 .
the earnings decline in 2005 compared with 2003 was principally due to lower shipments , higher down- time and increased costs for wood , energy and trans- portation , partially offset by lower overhead costs and favorable mill operations .
average sales price realizations for our european operations remained relatively stable during 2005 , but averaged 1% ( 1 % ) lower than in 2004 , and 6% ( 6 % ) below 2003 levels .
sales volumes rose slightly , up 1% ( 1 % ) in 2005 com- pared with 2004 and 5% ( 5 % ) compared to 2003 .
earnings were lower than in 2004 , reflecting higher wood and energy costs and a compression of margins due to un- favorable foreign currency exchange movements .
earn- ings were also adversely affected by downtime related to the rebuild of three paper machines during the year .
coated papers sales in the united states were $ 1.6 bil- lion in 2005 , compared with $ 1.4 billion in 2004 and $ 1.3 billion in 2003 .
the business reported an operating profit in 2005 versus a small operating loss in 2004 .
the earnings improvement was driven by higher average sales prices and improved mill operations .
price realiza- tions in 2005 averaged 13% ( 13 % ) higher than 2004 .
higher input costs for raw materials and energy partially offset the benefits from improved prices and operations .
sales volumes were about 1% ( 1 % ) lower in 2005 versus 2004 .
market pulp sales from our u.s .
and european facilities totaled $ 757 million in 2005 compared with $ 661 mil- lion and $ 571 million in 2004 and 2003 , respectively .
operating profits in 2005 were up 86% ( 86 % ) from 2004 .
an operating loss had been reported in 2003 .
higher aver- age prices and sales volumes , lower overhead costs and improved mill operations in 2005 more than offset in- creases in raw material , energy and chemical costs .
u.s .
softwood and hardwood pulp prices improved through the 2005 first and second quarters , then declined during the third quarter , but recovered somewhat toward year end .
softwood pulp prices ended the year about 2% ( 2 % ) lower than 2004 , but were 15% ( 15 % ) higher than 2003 , while hardwood pulp prices ended the year about 15% ( 15 % ) higher than 2004 and 10% ( 10 % ) higher than 2003 .
u.s .
pulp sales volumes were 12% ( 12 % ) higher than in 2004 and 19% ( 19 % ) higher than in 2003 , reflecting increased global demand .
euro- pean pulp volumes increased 15% ( 15 % ) and 2% ( 2 % ) compared with 2004 and 2003 , respectively , while average sales prices increased 4% ( 4 % ) and 11% ( 11 % ) compared with 2004 and 2003 , respectively .
brazilian paper sales were $ 684 million in 2005 com- pared with $ 592 million in 2004 and $ 540 million in 2003 .
sales volumes for uncoated freesheet paper , coated paper and wood chips were down from 2004 , but average price realizations improved for exported un- coated freesheet and coated groundwood paper grades .
favorable currency translation , as yearly average real exchange rates versus the u.s .
dollar were 17% ( 17 % ) higher in 2005 than in 2004 , positively impacted reported sales in u.s .
dollars .
average sales prices for domestic un- coated paper declined 4% ( 4 % ) in local currency versus 2004 , while domestic coated paper prices were down 3% ( 3 % ) .
operating profits in 2005 were down 9% ( 9 % ) from 2004 , but were up 2% ( 2 % ) from 2003 .
earnings in 2005 were neg- atively impacted by a weaker product and geographic sales mix for both uncoated and coated papers , reflecting increased competition and softer demand , particularly in the printing , commercial and editorial market segments.


note 9 .
commitments and contingencies operating leases we are obligated under noncancelable operating leases for corporate office space , warehouse and distribution facilities , trucks and certain equipment .
the future minimum lease commitments under these leases at december 31 , 2009 are as follows ( in thousands ) : years ending december 31: .

2010                          | $ 55178
----------------------------- | --------
2011                          | 45275
2012                          | 36841
2013                          | 30789
2014                          | 22094
thereafter                    | 59263
future minimum lease payments | $ 249440

rental expense for operating leases was approximately $ 57.2 million , $ 49.0 million and $ 26.6 million during the years ended december 31 , 2009 , 2008 and 2007 , respectively .
we guarantee the residual values of the majority of our truck and equipment operating leases .
the residual values decline over the lease terms to a defined percentage of original cost .
in the event the lessor does not realize the residual value when a piece of equipment is sold , we would be responsible for a portion of the shortfall .
similarly , if the lessor realizes more than the residual value when a piece of equipment is sold , we would be paid the amount realized over the residual value .
had we terminated all of our operating leases subject to these guarantees at december 31 , 2009 , the guaranteed residual value would have totaled approximately $ 27.8 million .
litigation and related contingencies in december 2005 and may 2008 , ford global technologies , llc filed complaints with the international trade commission against us and others alleging that certain aftermarket parts imported into the u.s .
infringed on ford design patents .
the parties settled these matters in april 2009 pursuant to a settlement arrangement that expires in september 2011 .
pursuant to the settlement , we ( and our designees ) became the sole distributor in the united states of aftermarket automotive parts that correspond to ford collision parts that are covered by a united states design patent .
we have paid ford an upfront fee for these rights and will pay a royalty for each such part we sell .
the amortization of the upfront fee and the royalty expenses are reflected in cost of goods sold on the accompanying consolidated statements of income .
we also have certain other contingencies resulting from litigation , claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business .
we currently expect that the resolution of such contingencies will not materially affect our financial position , results of operations or cash flows .
note 10 .
business combinations on october 1 , 2009 , we acquired greenleaf auto recyclers , llc ( 201cgreenleaf 201d ) from ssi for $ 38.8 million , net of cash acquired .
greenleaf is the entity through which ssi operated its late model automotive parts recycling business .
we recorded a gain on bargain purchase for the greenleaf acquisition totaling $ 4.3 million , which is


february 2018 which had no remaining authority .
at december 31 , 2018 , we had remaining authority to issue up to $ 6.0 billion of debt securities under our shelf registration .
receivables securitization facility 2013 as of december 31 , 2018 , and 2017 , we recorded $ 400 million and $ 500 million , respectively , of borrowings under our receivables facility , as secured debt .
( see further discussion of our receivables securitization facility in note 11 ) .
16 .
variable interest entities we have entered into various lease transactions in which the structure of the leases contain variable interest entities ( vies ) .
these vies were created solely for the purpose of doing lease transactions ( principally involving railroad equipment and facilities ) and have no other activities , assets or liabilities outside of the lease transactions .
within these lease arrangements , we have the right to purchase some or all of the assets at fixed prices .
depending on market conditions , fixed-price purchase options available in the leases could potentially provide benefits to us ; however , these benefits are not expected to be significant .
we maintain and operate the assets based on contractual obligations within the lease arrangements , which set specific guidelines consistent within the railroad industry .
as such , we have no control over activities that could materially impact the fair value of the leased assets .
we do not hold the power to direct the activities of the vies and , therefore , do not control the ongoing activities that have a significant impact on the economic performance of the vies .
additionally , we do not have the obligation to absorb losses of the vies or the right to receive benefits of the vies that could potentially be significant to the vies .
we are not considered to be the primary beneficiary and do not consolidate these vies because our actions and decisions do not have the most significant effect on the vie 2019s performance and our fixed-price purchase options are not considered to be potentially significant to the vies .
the future minimum lease payments associated with the vie leases totaled $ 1.7 billion as of december 31 , 2018 .
17 .
leases we lease certain locomotives , freight cars , and other property .
the consolidated statements of financial position as of december 31 , 2018 , and 2017 included $ 1454 million , net of $ 912 million of accumulated depreciation , and $ 1635 million , net of $ 953 million of accumulated depreciation , respectively , for properties held under capital leases .
a charge to income resulting from the depreciation for assets held under capital leases is included within depreciation expense in our consolidated statements of income .
future minimum lease payments for operating and capital leases with initial or remaining non-cancelable lease terms in excess of one year as of december 31 , 2018 , were as follows : millions operating leases capital leases .

millions                                | operatingleases | capitalleases
--------------------------------------- | --------------- | -------------
2019                                    | $ 419           | $ 148
2020                                    | 378             | 155
2021                                    | 303             | 159
2022                                    | 272             | 142
2023                                    | 234             | 94
later years                             | 1040            | 200
total minimum lease payments            | $ 2646          | $ 898
amount representing interest            | n/a             | -144 ( 144 )
present value of minimum lease payments | n/a             | $ 754

approximately 97% ( 97 % ) of capital lease payments relate to locomotives .
rent expense for operating leases with terms exceeding one month was $ 397 million in 2018 , $ 480 million in 2017 , and $ 535 million in 2016 .
when cash rental payments are not made on a straight-line basis , we recognize variable rental expense on a straight-line basis over the lease term .
contingent rentals and sub-rentals are not significant .
18 .
commitments and contingencies asserted and unasserted claims 2013 various claims and lawsuits are pending against us and certain of our subsidiaries .
we cannot fully determine the effect of all asserted and unasserted claims on our consolidated results of operations , financial condition , or liquidity .
to the extent possible , we have recorded


management 2019s discussion and analysis 110 jpmorgan chase & co .
/ 2008 annual report the allowance for credit losses increased $ 13.7 billion from the prior year to $ 23.8 billion .
the increase included $ 4.1 billion of allowance related to noncredit-impaired loans acquired in the washington mutual transaction and the related accounting conformity provision .
excluding held-for-sale loans , loans carried at fair value , and pur- chased credit-impaired consumer loans , the allowance for loan losses represented 3.62% ( 3.62 % ) of loans at december 31 , 2008 , compared with 1.88% ( 1.88 % ) at december 31 , 2007 .
the consumer allowance for loan losses increased $ 10.5 billion from the prior year as a result of the washington mutual transaction and increased allowance for loan loss in residential real estate and credit card .
the increase included additions to the allowance for loan losses of $ 4.7 billion driven by higher estimated losses for residential mort- gage and home equity loans as the weak labor market and weak overall economic conditions have resulted in increased delinquencies , while continued weak housing prices have driven a significant increase in loss severity .
the allowance for loan losses related to credit card increased $ 4.3 billion from the prior year primarily due to the acquired allowance and subsequent conforming provision for loan loss related to the washington mutual bank acquisition and an increase in provision for loan losses of $ 2.3 billion in 2008 over 2007 , as higher estimated net charge-offs are expected in the port- folio resulting from the current economic conditions .
the wholesale allowance for loan losses increase of $ 3.4 billion from december 31 , 2007 , reflected the effect of a weakening credit envi- ronment and the transfer of $ 4.9 billion of funded and unfunded leveraged lending commitments to retained loans from held-for-sale .
to provide for the risk of loss inherent in the firm 2019s process of extending credit , an allowance for lending-related commitments is held for both wholesale and consumer , which is reported in other lia- bilities .
the wholesale component is computed using a methodology similar to that used for the wholesale loan portfolio , modified for expected maturities and probabilities of drawdown and has an asset- specific component and a formula-based component .
for a further discussion on the allowance for lending-related commitment see note 15 on pages 178 2013180 of this annual report .
the allowance for lending-related commitments for both wholesale and consumer was $ 659 million and $ 850 million at december 31 , 2008 and 2007 , respectively .
the decrease reflects the reduction in lending-related commitments at december 31 , 2008 .
for more information , see page 102 of this annual report .
the following table presents the allowance for loan losses and net charge-offs ( recoveries ) by business segment at december 31 , 2008 and 2007 .
net charge-offs ( recoveries ) december 31 , allowance for loan losses year ended .

december 31 , ( in millions )  | december 31 , 2008 | december 31 , 2007 | 2008     | 2007
------------------------------ | ------------------ | ------------------ | -------- | --------
investment bank                | $ 3444             | $ 1329             | $ 105    | $ 36
commercial banking             | 2826               | 1695               | 288      | 44
treasury & securities services | 74                 | 18                 | -2 ( 2 ) | 2014
asset management               | 191                | 112                | 11       | -8 ( 8 )
corporate/private equity       | 10                 | 2014               | 2014     | 2014
total wholesale                | 6545               | 3154               | 402      | 72
retail financial services      | 8918               | 2668               | 4877     | 1350
card services                  | 7692               | 3407               | 4556     | 3116
corporate/private equity       | 9                  | 5                  | 2014     | 2014
total consumer 2013 reported   | 16619              | 6080               | 9433     | 4466
credit card 2013 securitized   | 2014               | 2014               | 3612     | 2380
total consumer 2013 managed    | 16619              | 6080               | 13045    | 6846
total                          | $ 23164            | $ 9234             | $ 13477  | $ 6918


liquidity and capital resources we currently expect to fund all of our cash requirements which are reasonably foreseeable for 2018 , including scheduled debt repayments , new investments in the business , share repurchases , dividend payments , possible business acquisitions and pension contributions , with cash from operating activities , and as needed , additional short-term and/or long-term borrowings .
we continue to expect our operating cash flow to remain strong .
as of december 31 , 2017 , we had $ 211 million of cash and cash equivalents on hand , of which $ 151 million was held outside of the as of december 31 , 2016 , we had $ 327 million of cash and cash equivalents on hand , of which $ 184 million was held outside of the u.s .
as of december 31 , 2015 , we had $ 26 million of deferred tax liabilities for pre-acquisition foreign earnings associated with the legacy nalco entities and legacy champion entities that we intended to repatriate .
these liabilities were recorded as part of the respective purchase price accounting of each transaction .
the remaining foreign earnings were repatriated in 2016 , reducing the deferred tax liabilities to zero at december 31 , 2016 .
as of december 31 , 2017 we had a $ 2.0 billion multi-year credit facility , which expires in november 2022 .
the credit facility has been established with a diverse syndicate of banks .
there were no borrowings under our credit facility as of december 31 , 2017 or 2016 .
the credit facility supports our $ 2.0 billion u.s .
commercial paper program and $ 2.0 billion european commercial paper program .
combined borrowing under these two commercial paper programs may not exceed $ 2.0 billion .
at year-end , we had no amount outstanding under the european commercial paper program and no amount outstanding under the u.s .
commercial paper program .
additionally , we have uncommitted credit lines of $ 660 million with major international banks and financial institutions to support our general global funding needs .
most of these lines are used to support global cash pooling structures .
approximately $ 643 million of these credit lines were available for use as of year-end 2017 .
bank supported letters of credit , surety bonds and guarantees total $ 198 million and represent commercial business transactions .
we do not have any other significant unconditional purchase obligations or commercial commitments .
as of december 31 , 2017 , our short-term borrowing program was rated a-2 by standard & poor 2019s and p-2 by moody 2019s .
as of december 31 , 2017 , standard & poor 2019s and moody 2019s rated our long-term credit at a- ( stable outlook ) and baa1 ( stable outlook ) , respectively .
a reduction in our credit ratings could limit or preclude our ability to issue commercial paper under our current programs , or could also adversely affect our ability to renew existing , or negotiate new , credit facilities in the future and could increase the cost of these facilities .
should this occur , we could seek additional sources of funding , including issuing additional term notes or bonds .
in addition , we have the ability , at our option , to draw upon our $ 2.0 billion of committed credit facility .
we are in compliance with our debt covenants and other requirements of our credit agreements and indentures .
a schedule of our various obligations as of december 31 , 2017 are summarized in the following table: .

( millions )              | total   | payments due by period less than 1 year | payments due by period 2-3 years | payments due by period 4-5 years | payments due by period more than 5 years
------------------------- | ------- | --------------------------------------- | -------------------------------- | -------------------------------- | ----------------------------------------
notes payable             | $ 15    | $ 15                                    | $ -                              | $ -                              | $ -
one-time transition tax   | 160     | 13                                      | 26                               | 26                               | 95
long-term debt            | 7303    | 549                                     | 696                              | 1513                             | 4545
capital lease obligations | 5       | 1                                       | 1                                | 1                                | 2
operating leases          | 617     | 131                                     | 211                              | 160                              | 115
interest*                 | 2753    | 242                                     | 436                              | 375                              | 1700
total                     | $ 10853 | $ 951                                   | $ 1370                           | $ 2075                           | $ 6457

* interest on variable rate debt was calculated using the interest rate at year-end 2017 .
during the fourth quarter of 2017 , we recorded a one-time transition tax related to enactment of the tax act .
the expense is primarily related to the one-time transition tax , which is payable over eight years .
as discussed further in note 12 , this balance is a provisional amount and is subject to adjustment during the measurement period of up to one year following the enactment of the tax act , as provided by recent sec guidance .
as of december 31 , 2017 , our gross liability for uncertain tax positions was $ 68 million .
we are not able to reasonably estimate the amount by which the liability will increase or decrease over an extended period of time or whether a cash settlement of the liability will be required .
therefore , these amounts have been excluded from the schedule of contractual obligations.