entergy mississippi may refinance , redeem , or otherwise retire debt and preferred stock prior to maturity , to the extent market conditions and interest and dividend rates are favorable .
all debt and common and preferred stock issuances by entergy mississippi require prior regulatory approval . a0 a0preferred stock and debt issuances are also subject to issuance tests set forth in its corporate charter , bond indenture , and other agreements . a0 a0entergy mississippi has sufficient capacity under these tests to meet its foreseeable capital needs .
entergy mississippi 2019s receivables from the money pool were as follows as of december 31 for each of the following years. .

2017             | 2016             | 2015             | 2014
---------------- | ---------------- | ---------------- | ----------------
( in thousands ) | ( in thousands ) | ( in thousands ) | ( in thousands )
$ 1633           | $ 10595          | $ 25930          | $ 644

see note 4 to the financial statements for a description of the money pool .
entergy mississippi has four separate credit facilities in the aggregate amount of $ 102.5 million scheduled to expire may 2018 .
no borrowings were outstanding under the credit facilities as of december a031 , 2017 . a0 a0in addition , entergy mississippi is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to miso .
as of december a031 , 2017 , a $ 15.3 million letter of credit was outstanding under entergy mississippi 2019s uncommitted letter of credit facility .
see note 4 to the financial statements for additional discussion of the credit facilities .
entergy mississippi obtained authorizations from the ferc through october 2019 for short-term borrowings not to exceed an aggregate amount of $ 175 million at any time outstanding and long-term borrowings and security issuances .
see note 4 to the financial statements for further discussion of entergy mississippi 2019s short-term borrowing limits .
entergy mississippi , inc .
management 2019s financial discussion and analysis state and local rate regulation and fuel-cost recovery the rates that entergy mississippi charges for electricity significantly influence its financial position , results of operations , and liquidity .
entergy mississippi is regulated and the rates charged to its customers are determined in regulatory proceedings .
a governmental agency , the mpsc , is primarily responsible for approval of the rates charged to customers .
formula rate plan in march 2016 , entergy mississippi submitted its formula rate plan 2016 test year filing showing entergy mississippi 2019s projected earned return for the 2016 calendar year to be below the formula rate plan bandwidth .
the filing showed a $ 32.6 million rate increase was necessary to reset entergy mississippi 2019s earned return on common equity to the specified point of adjustment of 9.96% ( 9.96 % ) , within the formula rate plan bandwidth .
in june 2016 the mpsc approved entergy mississippi 2019s joint stipulation with the mississippi public utilities staff .
the joint stipulation provided for a total revenue increase of $ 23.7 million .
the revenue increase includes a $ 19.4 million increase through the formula rate plan , resulting in a return on common equity point of adjustment of 10.07% ( 10.07 % ) .
the revenue increase also includes $ 4.3 million in incremental ad valorem tax expenses to be collected through an updated ad valorem tax adjustment rider .
the revenue increase and ad valorem tax adjustment rider were effective with the july 2016 bills .
in march 2017 , entergy mississippi submitted its formula rate plan 2017 test year filing and 2016 look-back filing showing entergy mississippi 2019s earned return for the historical 2016 calendar year and projected earned return for the 2017 calendar year to be within the formula rate plan bandwidth , resulting in no change in rates .
in june 2017 , entergy mississippi and the mississippi public utilities staff entered into a stipulation that confirmed that entergy


the following is a schedule of future minimum rental payments required under long-term operating leases at october 30 , 2010 : fiscal years operating leases .

fiscal years | operating leases
------------ | ----------------
2011         | $ 21871
2012         | 12322
2013         | 9078
2014         | 6381
2015         | 5422
later years  | 30655
total        | $ 85729

12 .
commitments and contingencies from time to time in the ordinary course of the company 2019s business , various claims , charges and litigation are asserted or commenced against the company arising from , or related to , contractual matters , patents , trademarks , personal injury , environmental matters , product liability , insurance coverage and personnel and employment disputes .
as to such claims and litigation , the company can give no assurance that it will prevail .
the company does not believe that any current legal matters will have a material adverse effect on the company 2019s financial position , results of operations or cash flows .
13 .
retirement plans the company and its subsidiaries have various savings and retirement plans covering substantially all employees .
the company maintains a defined contribution plan for the benefit of its eligible u.s .
employees .
this plan provides for company contributions of up to 5% ( 5 % ) of each participant 2019s total eligible compensation .
in addition , the company contributes an amount equal to each participant 2019s pre-tax contribution , if any , up to a maximum of 3% ( 3 % ) of each participant 2019s total eligible compensation .
the total expense related to the defined contribution plan for u.s .
employees was $ 20.5 million in fiscal 2010 , $ 21.5 million in fiscal 2009 and $ 22.6 million in fiscal 2008 .
the company also has various defined benefit pension and other retirement plans for certain non-u.s .
employees that are consistent with local statutory requirements and practices .
the total expense related to the various defined benefit pension and other retirement plans for certain non-u.s .
employees was $ 11.7 million in fiscal 2010 , $ 10.9 million in fiscal 2009 and $ 13.9 million in fiscal 2008 .
during fiscal 2009 , the measurement date of the plan 2019s funded status was changed from september 30 to the company 2019s fiscal year end .
non-u.s .
plan disclosures the company 2019s funding policy for its foreign defined benefit pension plans is consistent with the local requirements of each country .
the plans 2019 assets consist primarily of u.s .
and non-u.s .
equity securities , bonds , property and cash .
the benefit obligations and related assets under these plans have been measured at october 30 , 2010 and october 31 , 2009 .
analog devices , inc .
notes to consolidated financial statements 2014 ( continued )


fair value of financial instruments the carrying amounts shown for the company 2019s cash and cash equivalents , accounts receivable and accounts payable approximate fair value because of the short term maturity of those instruments .
the fair value of the long term debt approximates its carrying value based on the variable nature of interest rates and current market rates available to the company .
the fair value of foreign currency forward contracts is based on the net difference between the u.s .
dollars to be received or paid at the contracts 2019 settlement date and the u.s .
dollar value of the foreign currency to be sold or purchased at the current forward exchange rate .
recently issued accounting standards in june 2011 , the financial accounting standards board ( 201cfasb 201d ) issued an accounting standards update which eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders 2019 equity .
it requires an entity to present total comprehensive income , which includes the components of net income and the components of other comprehensive income , either in a single continuous statement or in two separate but consecutive statements .
in december 2011 , the fasb issued an amendment to this pronouncement which defers the specific requirement to present components of reclassifications of other comprehensive income on the face of the income statement .
these pronouncements are effective for financial statements issued for fiscal years , and interim periods within those years , beginning after december 15 , 2011 .
the company believes the adoption of these pronouncements will not have a material impact on its consolidated financial statements .
in may 2011 , the fasb issued an accounting standards update which clarifies requirements for how to measure fair value and for disclosing information about fair value measurements common to accounting principles generally accepted in the united states of america and international financial reporting standards .
this guidance is effective for interim and annual periods beginning on or after december 15 , 2011 .
the company believes the adoption of this guidance will not have a material impact on its consolidated financial statements .
3 .
inventories inventories consisted of the following: .

( in thousands )  | december 31 , 2011 | december 31 , 2010
----------------- | ------------------ | ------------------
finished goods    | $ 323606           | $ 214524
raw materials     | 803                | 831
total inventories | $ 324409           | $ 215355

4 .
acquisitions in july 2011 , the company acquired approximately 400.0 thousand square feet of office space comprising its corporate headquarters for $ 60.5 million .
the acquisition included land , buildings , tenant improvements and third party lease-related intangible assets .
as of the purchase date , 163.6 thousand square feet of the 400.0 thousand square feet acquired was leased to third party tenants .
these leases had remaining lease terms ranging from 9 months to 15 years on the purchase date .
the company intends to occupy additional space as it becomes available .
since the acquisition , the company has invested $ 2.2 million in additional improvements .
the acquisition included the assumption of a $ 38.6 million loan secured by the property and the remaining purchase price was paid in cash funded primarily by a $ 25.0 million term loan borrowed in may 2011 .
the carrying value of the assumed loan approximated its fair value on the date of the acquisition .
refer to note 7 for


entergy arkansas , inc .
management's financial discussion and analysis results of operations net income 2004 compared to 2003 net income increased $ 16.2 million due to lower other operation and maintenance expenses , a lower effective income tax rate for 2004 compared to 2003 , and lower interest charges .
the increase was partially offset by lower net revenue .
2003 compared to 2002 net income decreased $ 9.6 million due to lower net revenue , higher depreciation and amortization expenses , and a higher effective income tax rate for 2003 compared to 2002 .
the decrease was substantially offset by lower other operation and maintenance expenses , higher other income , and lower interest charges .
net revenue 2004 compared to 2003 net revenue , which is entergy arkansas' measure of gross margin , consists of operating revenues net of : 1 ) fuel , fuel-related , and purchased power expenses and 2 ) other regulatory credits .
following is an analysis of the change in net revenue comparing 2004 to 2003. .

                             | ( in millions )
---------------------------- | ---------------
2003 net revenue             | $ 998.7
deferred fuel cost revisions | -16.9 ( 16.9 )
other                        | -3.4 ( 3.4 )
2004 net revenue             | $ 978.4

deferred fuel cost revisions includes the difference between the estimated deferred fuel expense and the actual calculation of recoverable fuel expense , which occurs on an annual basis .
deferred fuel cost revisions decreased net revenue due to a revised estimate of fuel costs filed for recovery at entergy arkansas in the march 2004 energy cost recovery rider , which reduced net revenue by $ 11.5 million .
the remainder of the variance is due to the 2002 energy cost recovery true-up , made in the first quarter of 2003 , which increased net revenue in 2003 .
gross operating revenues , fuel and purchased power expenses , and other regulatory credits gross operating revenues increased primarily due to : 2022 an increase of $ 20.7 million in fuel cost recovery revenues due to an increase in the energy cost recovery rider effective april 2004 ( fuel cost recovery revenues are discussed in note 2 to the domestic utility companies and system energy financial statements ) ; 2022 an increase of $ 15.5 million in grand gulf revenues due to an increase in the grand gulf rider effective january 2004 ; 2022 an increase of $ 13.9 million in gross wholesale revenue primarily due to increased sales to affiliated systems ; 2022 an increase of $ 9.5 million due to volume/weather primarily resulting from increased usage during the unbilled sales period , partially offset by the effect of milder weather on billed sales in 2004.


6 .
principal transactions citi 2019s principal transactions revenue consists of realized and unrealized gains and losses from trading activities .
trading activities include revenues from fixed income , equities , credit and commodities products and foreign exchange transactions that are managed on a portfolio basis characterized by primary risk .
not included in the table below is the impact of net interest revenue related to trading activities , which is an integral part of trading activities 2019 profitability .
for additional information regarding principal transactions revenue , see note a04 to the consolidated financial statements for information about net interest revenue related to trading activities .
principal transactions include cva ( credit valuation adjustments on derivatives ) and fva ( funding valuation adjustments ) on over-the-counter derivatives .
these adjustments are discussed further in note 24 to the consolidated financial statements .
the following table presents principal transactions revenue: .

in millions of dollars          | 2018   | 2017   | 2016
------------------------------- | ------ | ------ | ------
interest rate risks ( 1 )       | $ 5186 | $ 5301 | $ 4229
foreign exchange risks ( 2 )    | 1423   | 2435   | 1699
equity risks ( 3 )              | 1346   | 525    | 330
commodity and other risks ( 4 ) | 662    | 425    | 899
credit products and risks ( 5 ) | 445    | 789    | 700
total                           | $ 9062 | $ 9475 | $ 7857

( 1 ) includes revenues from government securities and corporate debt , municipal securities , mortgage securities and other debt instruments .
also includes spot and forward trading of currencies and exchange-traded and over-the-counter ( otc ) currency options , options on fixed income securities , interest rate swaps , currency swaps , swap options , caps and floors , financial futures , otc options and forward contracts on fixed income securities .
( 2 ) includes revenues from foreign exchange spot , forward , option and swap contracts , as well as foreign currency translation ( fx translation ) gains and losses .
( 3 ) includes revenues from common , preferred and convertible preferred stock , convertible corporate debt , equity-linked notes and exchange-traded and otc equity options and warrants .
( 4 ) primarily includes revenues from crude oil , refined oil products , natural gas and other commodities trades .
( 5 ) includes revenues from structured credit products.


power purchase contracts dominion has entered into contracts for long-term purchases of capacity and energy from other utilities , qualifying facilities and independent power producers .
as of december 31 , 2002 , dominion had 42 non-utility purchase contracts with a com- bined dependable summer capacity of 3758 megawatts .
the table below reflects dominion 2019s minimum commitments as of december 31 , 2002 under these contracts. .

( millions )               | commitment capacity | commitment other
-------------------------- | ------------------- | ----------------
2003                       | $ 643               | $ 44
2004                       | 635                 | 29
2005                       | 629                 | 22
2006                       | 614                 | 18
2007                       | 589                 | 11
later years                | 5259                | 113
total                      | 8369                | 237
present value of the total | $ 4836              | $ 140

capacity and other purchases under these contracts totaled $ 691 million , $ 680 million and $ 740 million for 2002 , 2001 and 2000 , respectively .
in 2001 , dominion completed the purchase of three gener- ating facilities and the termination of seven long-term power purchase contracts with non-utility generators .
dominion recorded an after-tax charge of $ 136 million in connection with the purchase and termination of long-term power purchase contracts .
cash payments related to the purchase of three gener- ating facilities totaled $ 207 million .
the allocation of the pur- chase price was assigned to the assets and liabilities acquired based upon estimated fair values as of the date of acquisition .
substantially all of the value was attributed to the power pur- chase contracts which were terminated and resulted in a charge included in operation and maintenance expense .
fuel purchase commitments dominion enters into long-term purchase commitments for fuel used in electric generation and natural gas for purposes other than trading .
estimated payments under these commitments for the next five years are as follows : 2003 2014$ 599 million ; 2004 2014$ 311 million ; 2005 2014$ 253 million ; 2006 2014$ 205 mil- lion ; 2007 2014$ 89 million ; and years beyond 2007 2014$ 215 mil- lion .
these purchase commitments include those required for regulated operations .
dominion recovers the costs of those pur- chases through regulated rates .
the natural gas purchase com- mitments of dominion 2019s field services operations are also included , net of related sales commitments .
in addition , dominion has committed to purchase certain volumes of nat- ural gas at market index prices determined in the period the natural gas is delivered .
these transactions have been designated as normal purchases and sales under sfas no .
133 .
natural gas pipeline and storage capacity commitments dominion enters into long-term commitments for the purchase of natural gas pipeline and storage capacity for purposes other than trading .
estimated payments under these commitments for the next five years are as follows : 2003 2014$ 34 million ; 2004 2014$ 23 million ; 2005 2014$ 13 million .
there were no signifi- cant commitments beyond 2005 .
production handling and firm transportation commitments in connection with its gas and oil production operations , dominion has entered into certain transportation and produc- tion handling agreements with minimum commitments expected to be paid in the following years : 2003 2014$ 23 million ; 2004 2014$ 57 million ; 2005 2014$ 56 million ; 2006 2014$ 53 million ; 2007 2014$ 44 million ; and years after 2007 2014$ 68 million .
lease commitments dominion leases various facilities , vehicles , aircraft and equip- ment under both operating and capital leases .
future minimum lease payments under operating and capital leases that have initial or remaining lease terms in excess of one year as of december 31 , 2002 are as follows : 2003 2014$ 94 million ; 2004 2014 $ 94 million ; 2005 2014$ 82 million ; 2006 2014$ 67 million ; 2007 2014 $ 62 million ; and years beyond 2007 2014$ 79 million .
rental expense included in other operations and maintenance expense was $ 84 million , $ 75 million and $ 107 million for 2002 , 2001 , and 2000 , respectively .
as of december 31 , 2002 , dominion , through certain sub- sidiaries , has entered into agreements with special purpose enti- ties ( lessors ) in order to finance and lease several new power generation projects , as well as its corporate headquarters and air- craft .
the lessors have an aggregate financing commitment from equity and debt investors of $ 2.2 billion , of which $ 1.6 billion has been used for total project costs to date .
dominion , in its role as construction agent for the lessors , is responsible for com- pleting construction by a specified date .
in the event a project is terminated before completion , dominion has the option to either purchase the project for 100 percent of project costs or terminate the project and make a payment to the lessor of approximately but no more than 89.9 percent of project costs .
upon completion of each individual project , dominion has use of the project assets subject to an operating lease .
dominion 2019s lease payments to the lessors are sufficient to provide a return to the investors .
at the end of each individual project 2019s lease term , dominion may renew the lease at negotiated amounts based on project costs and current market conditions , subject to investors 2019 approval ; purchase the project at its original construction cost ; or sell the project , on behalf of the lessor , to an independent third party .
if the project is sold and the proceeds from the sale are insufficient to repay the investors , dominion may be required to make a payment to the lessor up to an amount rang- ing from 81 percent to 85 percent of the project cost depending 85d o m i n i o n 2019 0 2 a n n u a l r e p o r t


total debt total debt at july 1 , 2006 was $ 1762692000 , of which approximately 75% ( 75 % ) was at fixed rates averaging 6.0% ( 6.0 % ) with an average life of 19 years , and the remainder was at floating rates averaging 5.2% ( 5.2 % ) .
certain loan agreements contain typical debt covenants to protect noteholders , including provisions to maintain the company 2019s long-term debt to total capital ratio below a specified level .
sysco was in compliance with all debt covenants at july 1 , 2006 .
the fair value of sysco 2019s total long-term debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the company for debt of the same remaining maturities .
the fair value of total long-term debt approximated $ 1669999000 at july 1 , 2006 and $ 1442721000 at july 2 , 2005 , respectively .
as of july 1 , 2006 and july 2 , 2005 , letters of credit outstanding were $ 60000000 and $ 76817000 , respectively .
9 .
leases although sysco normally purchases assets , it has obligations under capital and operating leases for certain distribution facilities , vehicles and computers .
total rental expense under operating leases was $ 100690000 , $ 92710000 , and $ 86842000 in fiscal 2006 , 2005 and 2004 , respectively .
contingent rentals , subleases and assets and obligations under capital leases are not significant .
aggregate minimum lease payments by fiscal year under existing non-capitalized long-term leases are as follows: .

            | amount
----------- | ----------
2007        | $ 56499000
2008        | 46899000
2009        | 39904000
2010        | 33329000
2011        | 25666000
later years | 128981000

2007 ************************************************************************* $ 56499000 2008 ************************************************************************* 46899000 2009 ************************************************************************* 39904000 2010 ************************************************************************* 33329000 2011 ************************************************************************* 25666000 later years********************************************************************* 128981000 10 .
employee benefit plans sysco has defined benefit and defined contribution retirement plans for its employees .
also , the company contributes to various multi-employer plans under collective bargaining agreements and provides certain health care benefits to eligible retirees and their dependents .
sysco maintains a qualified retirement plan ( retirement plan ) that pays benefits to employees at retirement , using formulas based on a participant 2019s years of service and compensation .
the defined contribution 401 ( k ) plan provides that under certain circumstances the company may make matching contributions of up to 50% ( 50 % ) of the first 6% ( 6 % ) of a participant 2019s compensation .
sysco 2019s contributions to this plan were $ 21898000 in 2006 , $ 28109000 in 2005 , and $ 27390000 in 2004 .
in addition to receiving benefits upon retirement under the company 2019s defined benefit plan , participants in the management incentive plan ( see 2018 2018management incentive compensation 2019 2019 under 2018 2018stock based compensation plans 2019 2019 ) will receive benefits under a supplemental executive retirement plan ( serp ) .
this plan is a nonqualified , unfunded supplementary retirement plan .
in order to meet its obligations under the serp , sysco maintains life insurance policies on the lives of the participants with carrying values of $ 153659000 at july 1 , 2006 and $ 138931000 at july 2 , 2005 .
these policies are not included as plan assets or in the funded status amounts in the table below .
sysco is the sole owner and beneficiary of such policies .
projected benefit obligations and accumulated benefit obligations for the serp were $ 327450000 and $ 238599000 , respectively , as of july 1 , 2006 and $ 375491000 and $ 264010000 , respectively , as of july 2 , 2005 .
the company made cash contributions to its pension plans of $ 73764000 and $ 220361000 in fiscal years 2006 and 2005 , respectively , including $ 66000000 and $ 214000000 in voluntary contributions to the retirement plan in fiscal 2006 and 2005 , respectively .
in fiscal 2006 , the company 2019s voluntary contribution to the retirement plan represented the maximum tax-deductible amount .
in fiscal 2005 , the company made a voluntary contribution of $ 134000000 in the fourth quarter in addition to the $ 80000000 %%transmsg*** transmitting job : h39408 pcn : 049000000 *** %%pcmsg|47 |00011|yes|no|09/06/2006 17:22|0|1|page is valid , no graphics -- color : n|


the following table provides the minimum annual future rental commitment under operating leases that have initial or remaining non-cancelable lease terms over the next five years and thereafter: .

           | amount
---------- | ------
2019       | $ 17
2020       | 15
2021       | 12
2022       | 11
2023       | 6
thereafter | 80

the company has a series of agreements with various public entities ( the 201cpartners 201d ) to establish certain joint ventures , commonly referred to as 201cpublic-private partnerships . 201d under the public-private partnerships , the company constructed utility plant , financed by the company , and the partners constructed utility plant ( connected to the company 2019s property ) , financed by the partners .
the company agreed to transfer and convey some of its real and personal property to the partners in exchange for an equal principal amount of industrial development bonds ( 201cidbs 201d ) , issued by the partners under a state industrial development bond and commercial development act .
the company leased back the total facilities , including portions funded by both the company and the partners , under leases for a period of 40 years .
the leases related to the portion of the facilities funded by the company have required payments from the company to the partners that approximate the payments required by the terms of the idbs from the partners to the company ( as the holder of the idbs ) .
as the ownership of the portion of the facilities constructed by the company will revert back to the company at the end of the lease , the company has recorded these as capital leases .
the lease obligation and the receivable for the principal amount of the idbs are presented by the company on a net basis .
the carrying value of the facilities funded by the company recognized as a capital lease asset was $ 147 million and $ 150 million as of december 31 , 2018 and 2017 , respectively , which is presented in property , plant and equipment on the consolidated balance sheets .
the future payments under the lease obligations are equal to and offset by the payments receivable under the idbs .
as of december 31 , 2018 , the minimum annual future rental commitment under the operating leases for the portion of the facilities funded by the partners that have initial or remaining non-cancelable lease terms in excess of one year included in the preceding minimum annual rental commitments are $ 4 million in 2019 through 2023 , and $ 59 million thereafter .
note 20 : segment information the company 2019s operating segments are comprised of the revenue-generating components of its businesses for which separate financial information is internally produced and regularly used by management to make operating decisions and assess performance .
the company operates its businesses primarily through one reportable segment , the regulated businesses segment .
the company also operates market-based businesses that provide a broad range of related and complementary water and wastewater services within non-reportable operating segments , collectively referred to as the market-based businesses .
the regulated businesses segment is the largest component of the company 2019s business and includes 20 subsidiaries that provide water and wastewater services to customers in 16 states .
the company 2019s primary market-based businesses include the homeowner services group , which provides warranty protection programs to residential and smaller commercial customers ; the military services group , which provides water and wastewater services to the u.s .
government on military installations ; and keystone , which provides water transfer services for shale natural gas exploration and production companies.


hollyfrontier corporation notes to consolidated financial statements continued .

           | ( in thousands )
---------- | ----------------
2018       | $ 148716
2019       | 132547
2020       | 119639
2021       | 107400
2022       | 102884
thereafter | 857454
total      | $ 1468640

transportation and storage costs incurred under these agreements totaled $ 140.5 million , $ 135.1 million and $ 137.7 million for the years ended december 31 , 2017 , 2016 and 2015 , respectively .
these amounts do not include contractual commitments under our long-term transportation agreements with hep , as all transactions with hep are eliminated in these consolidated financial statements .
we have a crude oil supply contract that requires the supplier to deliver a specified volume of crude oil or pay a shortfall fee for the difference in the actual barrels delivered to us less the specified barrels per the supply contract .
for the contract year ended august 31 , 2017 , the actual number of barrels delivered to us was substantially less than the specified barrels , and we recorded a reduction to cost of goods sold and accumulated a shortfall fee receivable of $ 26.0 million during this period .
in september 2017 , the supplier notified us they are disputing the shortfall fee owed and in october 2017 notified us of their demand for arbitration .
we offset the receivable with payments of invoices for deliveries of crude oil received subsequent to august 31 , 2017 , which is permitted under the supply contract .
we believe the disputes and claims made by the supplier are without merit .
in march , 2006 , a subsidiary of ours sold the assets of montana refining company under an asset purchase agreement ( 201capa 201d ) .
calumet montana refining llc , the current owner of the assets , has submitted requests for reimbursement of approximately $ 20.0 million pursuant to contractual indemnity provisions under the apa for various costs incurred , as well as additional claims related to environmental matters .
we have rejected most of the claims for payment , and this matter is scheduled for arbitration beginning in july 2018 .
we have accrued the costs we believe are owed pursuant to the apa , and we estimate that any reasonably possible losses beyond the amounts accrued are not material .
note 20 : segment information effective fourth quarter of 2017 , we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business .
accordingly , our tulsa refineries 2019 lubricants operations , previously reported in the refining segment , are now combined with the operations of our petro-canada lubricants business ( acquired february 1 , 2017 ) and reported in the lubricants and specialty products segment .
our prior period segment information has been retrospectively adjusted to reflect our current segment presentation .
our operations are organized into three reportable segments , refining , lubricants and specialty products and hep .
our operations that are not included in the refining , lubricants and specialty products and hep segments are included in corporate and other .
intersegment transactions are eliminated in our consolidated financial statements and are included in eliminations .
corporate and other and eliminations are aggregated and presented under corporate , other and eliminations column .
the refining segment represents the operations of the el dorado , tulsa , navajo , cheyenne and woods cross refineries and hfc asphalt ( aggregated as a reportable segment ) .
refining activities involve the purchase and refining of crude oil and wholesale and branded marketing of refined products , such as gasoline , diesel fuel and jet fuel .
these petroleum products are primarily marketed in the mid-continent , southwest and rocky mountain regions of the united states .
hfc asphalt operates various asphalt terminals in arizona , new mexico and oklahoma.


royal caribbean cruises ltd .
15 from two to 17 nights throughout south america , the caribbean and europe .
additionally , we announced that majesty of the seas will be redeployed from royal caribbean international to pullmantur in 2016 .
pullmantur serves the contemporary segment of the spanish , portuguese and latin american cruise mar- kets .
pullmantur 2019s strategy is to attract cruise guests from these target markets by providing a variety of cruising options and onboard activities directed at couples and families traveling with children .
over the last few years , pullmantur has systematically increased its focus on latin america and has expanded its pres- ence in that market .
in order to facilitate pullmantur 2019s ability to focus on its core cruise business , on march 31 , 2014 , pullmantur sold the majority of its interest in its non-core busi- nesses .
these non-core businesses included pullmantur 2019s land-based tour operations , travel agency and 49% ( 49 % ) interest in its air business .
in connection with the sale agreement , we retained a 19% ( 19 % ) interest in each of the non-core businesses as well as 100% ( 100 % ) ownership of the aircraft which are being dry leased to pullmantur air .
see note 1 .
general and note 6 .
other assets to our consolidated financial statements under item 8 .
financial statements and supplementary data for further details .
cdf croisi e8res de france we currently operate two ships with an aggregate capacity of approximately 2800 berths under our cdf croisi e8res de france brand .
cdf croisi e8res de france offers seasonal itineraries to the mediterranean , europe and caribbean .
during the winter season , zenith is deployed to the pullmantur brand for sailings in south america .
cdf croisi e8res de france is designed to serve the contemporary segment of the french cruise market by providing a brand tailored for french cruise guests .
tui cruises tui cruises is a joint venture owned 50% ( 50 % ) by us and 50% ( 50 % ) by tui ag , a german tourism and shipping com- pany , and is designed to serve the contemporary and premium segments of the german cruise market by offering a product tailored for german guests .
all onboard activities , services , shore excursions and menu offerings are designed to suit the preferences of this target market .
tui cruises operates three ships , mein schiff 1 , mein schiff 2 and mein schiff 3 , with an aggregate capacity of approximately 6300 berths .
in addition , tui cruises currently has three newbuild ships on order at the finnish meyer turku yard with an aggregate capacity of approximately 7500 berths : mein schiff 4 , scheduled for delivery in the second quarter of 2015 , mein schiff 5 , scheduled for delivery in the third quarter of 2016 and mein schiff 6 , scheduled for delivery in the second quarter of 2017 .
in november 2014 , we formed a strategic partnership with ctrip.com international ltd .
( 201cctrip 201d ) , a chinese travel service provider , to operate a new cruise brand known as skysea cruises .
skysea cruises will offer a custom-tailored product for chinese cruise guests operating the ship purchased from celebrity cruises .
the new cruise line will begin service in the second quarter of 2015 .
we and ctrip each own 35% ( 35 % ) of the new company , skysea holding , with the balance being owned by skysea holding management and a private equity fund .
industry cruising is considered a well-established vacation sector in the north american market , a growing sec- tor over the long term in the european market and a developing but promising sector in several other emerging markets .
industry data indicates that market penetration rates are still low and that a significant portion of cruise guests carried are first-time cruisers .
we believe this presents an opportunity for long-term growth and a potential for increased profitability .
the following table details market penetration rates for north america and europe computed based on the number of annual cruise guests as a percentage of the total population : america ( 1 ) europe ( 2 ) .

year | north america ( 1 ) | europe ( 2 )
---- | ------------------- | --------------
2010 | 3.1% ( 3.1 % )      | 1.1% ( 1.1 % )
2011 | 3.4% ( 3.4 % )      | 1.1% ( 1.1 % )
2012 | 3.3% ( 3.3 % )      | 1.2% ( 1.2 % )
2013 | 3.4% ( 3.4 % )      | 1.2% ( 1.2 % )
2014 | 3.5% ( 3.5 % )      | 1.3% ( 1.3 % )

( 1 ) source : our estimates are based on a combination of data obtained from publicly available sources including the interna- tional monetary fund and cruise lines international association ( 201cclia 201d ) .
rates are based on cruise guests carried for at least two consecutive nights .
includes the united states of america and canada .
( 2 ) source : our estimates are based on a combination of data obtained from publicly available sources including the interna- tional monetary fund and clia europe , formerly european cruise council .
we estimate that the global cruise fleet was served by approximately 457000 berths on approximately 283 ships at the end of 2014 .
there are approximately 33 ships with an estimated 98650 berths that are expected to be placed in service in the global cruise market between 2015 and 2019 , although it is also possible that ships could be ordered or taken out of service during these periods .
we estimate that the global cruise industry carried 22.0 million cruise guests in 2014 compared to 21.3 million cruise guests carried in 2013 and 20.9 million cruise guests carried in 2012 .
part i


rights each holder of a share of outstanding common stock also holds one share purchase right ( a "right" ) for each share of common stock .
each right entitles the holder to purchase from the company one half of one-hundredth of a share of series a junior participating preferred stock , $ 0.01 par value ( the "junior preferred shares" ) , of the company at a price of $ 135 per one half of one-hundredth of a junior preferred share ( the "purchase price" ) .
the rights are not exercisable until the earlier of acquisition by a person or group of 15% ( 15 % ) or more of the outstanding common stock ( an "acquiring person" ) or the announcement of an intention to make or commencement of a tender offer or exchange offer , the consummation of which would result in the beneficial ownership by a person or group of 15% ( 15 % ) or more of the outstanding common stock .
in the event that any person or group becomes an acquiring person , each holder of a right other than the acquiring person will thereafter have the right to receive upon exercise that number of shares of common stock having a market value of two times the purchase price and , in the event that the company is acquired in a business combination transaction or 50% ( 50 % ) or more of its assets are sold , each holder of a right will thereafter have the right to receive upon exercise that number of shares of common stock of the acquiring company which at the time of the transaction will have a market value of two times the purchase price .
under certain specified circumstances , the board of directors of the company may cause the rights ( other than rights owned by such person or group ) to be exchanged , in whole or in part , for common stock or junior preferred shares , at an exchange rate of one share of common stock per right or one half of one-hundredth of a junior preferred share per right .
at any time prior to the acquisition by a person or group of beneficial ownership of 15% ( 15 % ) or more of the outstanding common stock , the board of directors of the company may redeem the rights in whole at a price of $ 0.01 per right .
common stock reserved for future issuance at december 31 , 2003 , the company has reserved shares of common stock for future issuance under all equity compensation plans as follows ( shares in thousands ) : p .
significant revenue arrangements the company has formed strategic collaborations with major pharmaceutical companies in the areas of drug discovery , development , and commercialization .
research and development agreements provide the company with financial support and other valuable resources for research programs and development of clinical drug candidates , product development and marketing and sales of products .
collaborative research and development agreements in the company's collaborative research , development and commercialization programs the company seeks to discover , develop and commercialize major pharmaceutical products in conjunction with and supported by the company's collaborators .
collaborative research and development arrangements provide research funding over an initial contract period with renewal and termination options that vary by agreement .
the agreements also include milestone payments based on the achievement or the occurrence of a designated event .
the agreements may also contain development reimbursement provisions , royalty rights or profit sharing rights and manufacturing options .
the terms of each agreement vary .
the company has entered into significant research and development collaborations with large pharmaceutical companies .
p .
significant revenue arrangements novartis in may 2000 , the company and novartis pharma ag ( "novartis" ) entered into an agreement to collaborate on the discovery , development and commercialization of small molecule drugs directed at targets in the kinase protein family .
under the agreement , novartis agreed to pay the company an up-front payment of $ 15000000 made upon signing of the agreement , up to $ 200000000 in product research funding over six .

common stock under stock and option plans    | 21829
-------------------------------------------- | -----
common stock under the vertex purchase plan  | 249
common stock under the vertex 401 ( k ) plan | 125
total                                        | 22203


jpmorgan chase & co./2012 annual report 119 implementing further revisions to the capital accord in the u.s .
( such further revisions are commonly referred to as 201cbasel iii 201d ) .
basel iii revised basel ii by , among other things , narrowing the definition of capital , and increasing capital requirements for specific exposures .
basel iii also includes higher capital ratio requirements and provides that the tier 1 common capital requirement will be increased to 7% ( 7 % ) , comprised of a minimum ratio of 4.5% ( 4.5 % ) plus a 2.5% ( 2.5 % ) capital conservation buffer .
implementation of the 7% ( 7 % ) tier 1 common capital requirement is required by january 1 , in addition , global systemically important banks ( 201cgsibs 201d ) will be required to maintain tier 1 common requirements above the 7% ( 7 % ) minimum in amounts ranging from an additional 1% ( 1 % ) to an additional 2.5% ( 2.5 % ) .
in november 2012 , the financial stability board ( 201cfsb 201d ) indicated that it would require the firm , as well as three other banks , to hold the additional 2.5% ( 2.5 % ) of tier 1 common ; the requirement will be phased in beginning in 2016 .
the basel committee also stated it intended to require certain gsibs to hold an additional 1% ( 1 % ) of tier 1 common under certain circumstances , to act as a disincentive for the gsib from taking actions that would further increase its systemic importance .
currently , no gsib ( including the firm ) is required to hold this additional 1% ( 1 % ) of tier 1 common .
in addition , pursuant to the requirements of the dodd-frank act , u.s .
federal banking agencies have proposed certain permanent basel i floors under basel ii and basel iii capital calculations .
the following table presents a comparison of the firm 2019s tier 1 common under basel i rules to its estimated tier 1 common under basel iii rules , along with the firm 2019s estimated risk-weighted assets .
tier 1 common under basel iii includes additional adjustments and deductions not included in basel i tier 1 common , such as the inclusion of aoci related to afs securities and defined benefit pension and other postretirement employee benefit ( 201copeb 201d ) plans .
the firm estimates that its tier 1 common ratio under basel iii rules would be 8.7% ( 8.7 % ) as of december 31 , 2012 .
the tier 1 common ratio under both basel i and basel iii are non- gaap financial measures .
however , such measures are used by bank regulators , investors and analysts as a key measure to assess the firm 2019s capital position and to compare the firm 2019s capital to that of other financial services companies .
december 31 , 2012 ( in millions , except ratios ) .

tier 1 common under basel i rules                                                         | $ 140342
----------------------------------------------------------------------------------------- | --------------
adjustments related to aoci for afs securities and defined benefit pension and opeb plans | 4077
all other adjustments                                                                     | -453 ( 453 )
estimated tier 1 common under basel iii rules                                             | $ 143966
estimated risk-weighted assets under basel iii rules ( a )                                | $ 1647903
estimated tier 1 common ratio under basel iii rules ( b )                                 | 8.7% ( 8.7 % )

estimated risk-weighted assets under basel iii rules ( a ) $ 1647903 estimated tier 1 common ratio under basel iii rules ( b ) 8.7% ( 8.7 % ) ( a ) key differences in the calculation of risk-weighted assets between basel i and basel iii include : ( 1 ) basel iii credit risk rwa is based on risk-sensitive approaches which largely rely on the use of internal credit models and parameters , whereas basel i rwa is based on fixed supervisory risk weightings which vary only by counterparty type and asset class ; ( 2 ) basel iii market risk rwa reflects the new capital requirements related to trading assets and securitizations , which include incremental capital requirements for stress var , correlation trading , and re-securitization positions ; and ( 3 ) basel iii includes rwa for operational risk , whereas basel i does not .
the actual impact on the firm 2019s capital ratios upon implementation could differ depending on final implementation guidance from the regulators , as well as regulatory approval of certain of the firm 2019s internal risk models .
( b ) the tier 1 common ratio is tier 1 common divided by rwa .
the firm 2019s estimate of its tier 1 common ratio under basel iii reflects its current understanding of the basel iii rules based on information currently published by the basel committee and u.s .
federal banking agencies and on the application of such rules to its businesses as currently conducted ; it excludes the impact of any changes the firm may make in the future to its businesses as a result of implementing the basel iii rules , possible enhancements to certain market risk models , and any further implementation guidance from the regulators .
the basel iii capital requirements are subject to prolonged transition periods .
the transition period for banks to meet the tier 1 common requirement under basel iii was originally scheduled to begin in 2013 , with full implementation on january 1 , 2019 .
in november 2012 , the u.s .
federal banking agencies announced a delay in the implementation dates for the basel iii capital requirements .
the additional capital requirements for gsibs will be phased in starting january 1 , 2016 , with full implementation on january 1 , 2019 .
management 2019s current objective is for the firm to reach , by the end of 2013 , an estimated basel iii tier i common ratio of 9.5% ( 9.5 % ) .
additional information regarding the firm 2019s capital ratios and the federal regulatory capital standards to which it is subject is presented in supervision and regulation on pages 1 20138 of the 2012 form 10-k , and note 28 on pages 306 2013 308 of this annual report .
broker-dealer regulatory capital jpmorgan chase 2019s principal u.s .
broker-dealer subsidiaries are j.p .
morgan securities llc ( 201cjpmorgan securities 201d ) and j.p .
morgan clearing corp .
( 201cjpmorgan clearing 201d ) .
jpmorgan clearing is a subsidiary of jpmorgan securities and provides clearing and settlement services .
jpmorgan securities and jpmorgan clearing are each subject to rule 15c3-1 under the securities exchange act of 1934 ( the 201cnet capital rule 201d ) .
jpmorgan securities and jpmorgan clearing are also each registered as futures commission merchants and subject to rule 1.17 of the commodity futures trading commission ( 201ccftc 201d ) .
jpmorgan securities and jpmorgan clearing have elected to compute their minimum net capital requirements in accordance with the 201calternative net capital requirements 201d of the net capital rule .
at december 31 , 2012 , jpmorgan securities 2019 net capital , as defined by the net capital rule , was $ 13.5 billion , exceeding the minimum requirement by


unit shipments increased 49% ( 49 % ) to 217.4 million units in 2006 , compared to 146.0 million units in 2005 .
the overall increase was driven by increased unit shipments of products for gsm , cdma and 3g technologies , partially offset by decreased unit shipments of products for iden technology .
for the full year 2006 , unit shipments by the segment increased in all regions .
due to the segment 2019s increase in unit shipments outpacing overall growth in the worldwide handset market , which grew approximately 20% ( 20 % ) in 2006 , the segment believes that it expanded its global handset market share to an estimated 22% ( 22 % ) for the full year 2006 .
in 2006 , asp decreased approximately 11% ( 11 % ) compared to 2005 .
the overall decrease in asp was driven primarily by changes in the geographic and product-tier mix of sales .
by comparison , asp decreased approximately 10% ( 10 % ) in 2005 and increased approximately 15% ( 15 % ) in 2004 .
asp is impacted by numerous factors , including product mix , market conditions and competitive product offerings , and asp trends often vary over time .
in 2006 , the largest of the segment 2019s end customers ( including sales through distributors ) were china mobile , verizon , sprint nextel , cingular , and t-mobile .
these five largest customers accounted for approximately 39% ( 39 % ) of the segment 2019s net sales in 2006 .
besides selling directly to carriers and operators , the segment also sold products through a variety of third-party distributors and retailers , which accounted for approximately 38% ( 38 % ) of the segment 2019s net sales .
the largest of these distributors was brightstar corporation .
although the u.s .
market continued to be the segment 2019s largest individual market , many of our customers , and more than 65% ( 65 % ) of the segment 2019s 2006 net sales , were outside the u.s .
the largest of these international markets were china , brazil , the united kingdom and mexico .
home and networks mobility segment the home and networks mobility segment designs , manufactures , sells , installs and services : ( i ) digital video , internet protocol ( 201cip 201d ) video and broadcast network interactive set-tops ( 201cdigital entertainment devices 201d ) , end-to- end video delivery solutions , broadband access infrastructure systems , and associated data and voice customer premise equipment ( 201cbroadband gateways 201d ) to cable television and telecom service providers ( collectively , referred to as the 201chome business 201d ) , and ( ii ) wireless access systems ( 201cwireless networks 201d ) , including cellular infrastructure systems and wireless broadband systems , to wireless service providers .
in 2007 , the segment 2019s net sales represented 27% ( 27 % ) of the company 2019s consolidated net sales , compared to 21% ( 21 % ) in 2006 and 26% ( 26 % ) in 2005 .
( dollars in millions ) 2007 2006 2005 2007 20142006 2006 20142005 years ended december 31 percent change .

( dollars in millions ) | years ended december 31 2007 | years ended december 31 2006 | years ended december 31 2005 | years ended december 31 2007 20142006 | 2006 20142005
----------------------- | ---------------------------- | ---------------------------- | ---------------------------- | ------------------------------------- | ---------------
segment net sales       | $ 10014                      | $ 9164                       | $ 9037                       | 9% ( 9 % )                            | 1% ( 1 % )
operating earnings      | 709                          | 787                          | 1232                         | ( 10 ) % (  % )                       | ( 36 ) % (  % )

segment results 20142007 compared to 2006 in 2007 , the segment 2019s net sales increased 9% ( 9 % ) to $ 10.0 billion , compared to $ 9.2 billion in 2006 .
the 9% ( 9 % ) increase in net sales reflects a 27% ( 27 % ) increase in net sales in the home business , partially offset by a 1% ( 1 % ) decrease in net sales of wireless networks .
net sales of digital entertainment devices increased approximately 43% ( 43 % ) , reflecting increased demand for digital set-tops , including hd/dvr set-tops and ip set-tops , partially offset by a decline in asp due to a product mix shift towards all-digital set-tops .
unit shipments of digital entertainment devices increased 51% ( 51 % ) to 15.2 million units .
net sales of broadband gateways increased approximately 6% ( 6 % ) , primarily due to higher net sales of data modems , driven by net sales from the netopia business acquired in february 2007 .
net sales of wireless networks decreased 1% ( 1 % ) , primarily driven by lower net sales of iden and cdma infrastructure equipment , partially offset by higher net sales of gsm infrastructure equipment , despite competitive pricing pressure .
on a geographic basis , the 9% ( 9 % ) increase in net sales reflects higher net sales in all geographic regions .
the increase in net sales in north america was driven primarily by higher sales of digital entertainment devices , partially offset by lower net sales of iden and cdma infrastructure equipment .
the increase in net sales in asia was primarily due to higher net sales of gsm infrastructure equipment , partially offset by lower net sales of cdma infrastructure equipment .
the increase in net sales in emea was , primarily due to higher net sales of gsm infrastructure equipment , partially offset by lower demand for iden and cdma infrastructure equipment .
net sales in north america continue to comprise a significant portion of the segment 2019s business , accounting for 52% ( 52 % ) of the segment 2019s total net sales in 2007 , compared to 56% ( 56 % ) of the segment 2019s total net sales in 2006 .
60 management 2019s discussion and analysis of financial condition and results of operations


synopsys , inc .
notes to consolidated financial statements 2014 ( continued ) and other electronic applications markets .
the company believes the acquisition will expand its technology portfolio , channel reach and total addressable market by adding complementary products and expertise for fpga solutions and rapid asic prototyping .
purchase price .
synopsys paid $ 8.00 per share for all outstanding shares including certain vested options of synplicity for an aggregate cash payment of $ 223.3 million .
additionally , synopsys assumed certain employee stock options and restricted stock units , collectively called 201cstock awards . 201d the total purchase consideration consisted of: .

                                                    | ( in thousands )
--------------------------------------------------- | ----------------
cash paid net of cash acquired                      | $ 180618
fair value of assumed vested or earned stock awards | 4169
acquisition related costs                           | 8016
total purchase price consideration                  | $ 192803

acquisition related costs consist primarily of professional services , severance and employee related costs and facilities closure costs of which $ 6.8 million have been paid as of october 31 , 2009 .
fair value of stock awards assumed .
an aggregate of 4.7 million shares of synplicity stock options and restricted stock units were exchanged for synopsys stock options and restricted stock units at an exchange ratio of 0.3392 per share .
the fair value of stock options assumed was determined using a black-scholes valuation model .
the fair value of stock awards vested or earned of $ 4.2 million was included as part of the purchase price .
the fair value of unvested awards of $ 5.0 million will be recorded as operating expense over the remaining service periods on a straight-line basis .
purchase price allocation .
the company allocated $ 80.0 million of the purchase price to identifiable intangible assets to be amortized over two to seven years .
in-process research and development expense related to these acquisitions was $ 4.8 million .
goodwill , representing the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired , was $ 120.3 million and will not be amortized .
goodwill primarily resulted from the company 2019s expectation of cost synergies and sales growth from the integration of synplicity 2019s technology with the company 2019s technology and operations to provide an expansion of products and market reach .
fiscal 2007 acquisitions during fiscal year 2007 , the company completed certain purchase acquisitions for cash .
the company allocated the total purchase considerations of $ 54.8 million ( which included acquisition related costs of $ 1.4 million ) to the assets and liabilities acquired , including identifiable intangible assets , based on their respective fair values at the acquisition dates , resulting in aggregate goodwill of $ 36.6 million .
acquired identifiable intangible assets of $ 14.3 million are being amortized over two to nine years .
in-process research and development expense related to these acquisitions was $ 3.2 million.


entergy corporation and subsidiaries management 2019s financial discussion and analysis the volume/weather variance is primarily due to an increase of 1402 gwh , or 1% ( 1 % ) , in billed electricity usage , including an increase in industrial usage and the effect of more favorable weather .
the increase in industrial sales was primarily due to expansion in the chemicals industry and the addition of new customers , partially offset by decreased demand primarily due to extended maintenance outages for existing chemicals customers .
the waterford 3 replacement steam generator provision is due to a regulatory charge of approximately $ 32 million recorded in 2015 related to the uncertainty associated with the resolution of the waterford 3 replacement steam generator project .
see note 2 to the financial statements for a discussion of the waterford 3 replacement steam generator prudence review proceeding .
the miso deferral variance is primarily due to the deferral in 2014 of non-fuel miso-related charges , as approved by the lpsc and the mpsc .
the deferral of non-fuel miso-related charges is partially offset in other operation and maintenance expenses .
see note 2 to the financial statements for further discussion of the recovery of non-fuel miso-related charges .
the louisiana business combination customer credits variance is due to a regulatory liability of $ 107 million recorded by entergy in october 2015 as a result of the entergy gulf states louisiana and entergy louisiana business combination .
consistent with the terms of the stipulated settlement in the business combination proceeding , electric customers of entergy louisiana will realize customer credits associated with the business combination ; accordingly , in october 2015 , entergy recorded a regulatory liability of $ 107 million ( $ 66 million net-of-tax ) .
see note 2 to the financial statements for further discussion of the business combination and customer credits .
entergy wholesale commodities following is an analysis of the change in net revenue comparing 2015 to 2014 .
amount ( in millions ) .

                                               | amount ( in millions )
---------------------------------------------- | ----------------------
2014 net revenue                               | $ 2224
nuclear realized price changes                 | -310 ( 310 )
vermont yankee shutdown in december 2014       | -305 ( 305 )
nuclear volume excluding vermont yankee effect | 20
other                                          | 37
2015 net revenue                               | $ 1666

as shown in the table above , net revenue for entergy wholesale commodities decreased by approximately $ 558 million in 2016 primarily due to : 2022 lower realized wholesale energy prices , primarily due to significantly higher northeast market power prices in 2014 , and lower capacity prices in 2015 ; and 2022 a decrease in net revenue as a result of vermont yankee ceasing power production in december 2014 .
the decrease was partially offset by higher volume in the entergy wholesale commodities nuclear fleet , excluding vermont yankee , resulting from fewer refueling outage days in 2015 as compared to 2014 , partially offset by more unplanned outage days in 2015 as compared to 2014.


american tower corporation and subsidiaries notes to consolidated financial statements 2014 ( continued ) 12 .
impairments , net loss on sale of long-lived assets , restructuring and merger related expense the significant components reflected in impairments , net loss on sale of long-lived assets , restructuring and merger related expense in the accompanying consolidated statements of operations include the following : impairments and net loss on sale of long-lived assets 2014during the years ended december 31 , 2005 , 2004 and 2003 , the company recorded impairments and net loss on sale of long-lived assets ( primarily related to its rental and management segment ) of $ 19.1 million , $ 22.3 million and $ 28.3 million , respectively .
2022 non-core asset impairment charges 2014during the years ended december 31 , 2005 and 2004 respectively , the company sold a limited number of non-core towers and other non-core assets and recorded impairment charges to write-down these and other non-core assets to net realizable value .
during the year ended december 31 , 2003 , the company sold approximately 300 non-core towers and certain other non-core assets and recorded impairment charges to write-down these and other non-core assets to net realizable value .
as a result , the company recorded impairment charges and net losses of approximately $ 16.8 million , $ 17.7 million and $ 19.1 million for the years ended december 31 , 2005 , 2004 and 2003 , respectively .
2022 construction-in-progress impairment charges 2014for the year ended december 31 , 2005 , 2004 and 2003 , the company wrote-off approximately $ 2.3 million , $ 4.6 million and $ 9.2 million , respectively , of construction-in-progress costs , primarily associated with sites that it no longer planned to build .
restructuring expense 2014during the year ended december 31 , 2005 , the company made cash payments against its previous accrued restructuring liability in the amount of $ 0.8 million .
during the year ended december 31 , 2004 , the company incurred employee separation costs of $ 0.8 million and decreased its lease terminations and other facility closing costs liability by $ 0.1 million .
during the year ended december 31 , 2003 , the company incurred employee separation costs primarily associated with a reorganization of certain functions within its rental and management segment and increased its accrued restructuring liability by $ 2.3 million .
such charges are reflected in impairments , net loss on sale of long-lived assets , restructuring and merger related expense in the accompanying consolidated statement of operations for the years ended december 31 , 2004 and 2003 .
the following table displays activity with respect to the accrued restructuring liability for the years ended december 31 , 2003 , 2004 and 2005 ( in thousands ) .
the accrued restructuring liability is reflected in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of december 31 , 2005 and liability january 1 , restructuring expense payments liability as december 31 , restructuring expense payments liability december 31 , restructuring expense payments liability december 31 .

                                                    | liability as of january 1 2003 | 2003 restructuring expense | 2003 cash payments | liability as of december 31 2003 | 2004 restructuring expense | 2004 cash payments | liability as of december 31 2004 | 2005 restructuring expense | 2005 cash payments | liability as of december 31 2005
--------------------------------------------------- | ------------------------------ | -------------------------- | ------------------ | -------------------------------- | -------------------------- | ------------------ | -------------------------------- | -------------------------- | ------------------ | --------------------------------
employee separations                                | $ 1639                         | $ 1919                     | $ -1319 ( 1319 )   | $ 2239                           | $ 823                      | $ -2397 ( 2397 )   | $ 665                            | $ 84                       | $ -448 ( 448 )     | $ 301
lease terminations and other facility closing costs | 1993                           | 347                        | -890 ( 890 )       | 1450                             | -131 ( 131 )               | -888 ( 888 )       | 431                              | 12                         | -325 ( 325 )       | 118
total                                               | $ 3632                         | $ 2266                     | $ -2209 ( 2209 )   | $ 3689                           | $ 692                      | $ -3285 ( 3285 )   | $ 1096                           | $ 96                       | $ -773 ( 773 )     | $ 419

there were no material changes in estimates related to this accrued restructuring liability during the year ended december 31 , 2005 .
the company expects to pay the balance of these employee separation liabilities prior to the end of 2006 .
additionally , the company continues to negotiate certain lease terminations associated with this restructuring liability .
merger related expense 2014during the year ended december 31 , 2005 , the company assumed certain obligations , as a result of the merger with spectrasite , inc. , primarily related to employee separation costs of former


air mobility sales declined by $ 535 million primarily due to c-130j deliveries ( 12 in 2006 compared to 15 in 2005 ) and lower volume on the c-5 program .
combat aircraft sales increased by $ 292 million mainly due to higher f-35 and f-22 volume , partially offset by reduced volume on f-16 programs .
other aeronautics programs sales increased by $ 83 million primarily due to higher volume in sustainment services activities .
operating profit for the segment increased 21% ( 21 % ) in 2007 compared to 2006 .
operating profit increases in combat aircraft more than offset decreases in other aeronautics programs and air mobility .
combat aircraft operating profit increased $ 326 million mainly due to improved performance on f-22 and f-16 programs .
air mobility and other aeronautics programs declined $ 77 million due to lower operating profit in support and sustainment activities .
operating profit for the segment increased 20% ( 20 % ) in 2006 compared to 2005 .
operating profit increased in both combat aircraft and air mobility .
combat aircraft increased $ 114 million , mainly due to higher volume on the f-35 and f-22 programs , and improved performance on f-16 programs .
the improvement for the year was also attributable in part to the fact that in 2005 , operating profit included a reduction in earnings on the f-35 program .
air mobility operating profit increased $ 84 million , mainly due to improved performance on c-130j sustainment activities in 2006 .
backlog decreased in 2007 as compared to 2006 primarily as a result of sales volume on the f-35 program .
this decrease was offset partially by increased orders on the f-22 and c-130j programs .
electronic systems electronic systems 2019 operating results included the following : ( in millions ) 2007 2006 2005 .

( in millions )     | 2007    | 2006    | 2005
------------------- | ------- | ------- | ------
net sales           | $ 11143 | $ 10519 | $ 9811
operating profit    | 1410    | 1264    | 1078
backlog at year-end | 21200   | 19700   | 18600

net sales for electronic systems increased by 6% ( 6 % ) in 2007 compared to 2006 .
sales increased in missiles & fire control ( m&fc ) , maritime systems & sensors ( ms2 ) , and platform , training & energy ( pt&e ) .
m&fc sales increased $ 258 million mainly due to higher volume in fire control systems and air defense programs , which more than offset declines in tactical missile programs .
ms2 sales grew $ 254 million due to volume increases in undersea and radar systems activities that were offset partially by decreases in surface systems activities .
pt&e sales increased $ 113 million , primarily due to higher volume in platform integration activities , which more than offset declines in distribution technology activities .
net sales for electronic systems increased by 7% ( 7 % ) in 2006 compared to 2005 .
higher volume in platform integration activities led to increased sales of $ 329 million at pt&e .
ms2 sales increased $ 267 million primarily due to surface systems activities .
air defense programs contributed to increased sales of $ 118 million at m&fc .
operating profit for the segment increased by 12% ( 12 % ) in 2007 compared to 2006 , representing an increase in all three lines of business during the year .
operating profit increased $ 70 million at pt&e primarily due to higher volume and improved performance on platform integration activities .
ms2 operating profit increased $ 32 million due to higher volume on undersea and tactical systems activities that more than offset lower volume on surface systems activities .
at m&fc , operating profit increased $ 32 million due to higher volume in fire control systems and improved performance in tactical missile programs , which partially were offset by performance on certain international air defense programs in 2006 .
operating profit for the segment increased by 17% ( 17 % ) in 2006 compared to 2005 .
operating profit increased by $ 74 million at ms2 mainly due to higher volume on surface systems and undersea programs .
pt&e operating profit increased $ 61 million mainly due to improved performance on distribution technology activities .
higher volume on air defense programs contributed to a $ 52 million increase in operating profit at m&fc .
the increase in backlog during 2007 over 2006 resulted primarily from increased orders for certain tactical missile programs and fire control systems at m&fc and platform integration programs at pt&e.


entergy corporation and subsidiaries notes to financial statements ( a ) consists of pollution control revenue bonds and environmental revenue bonds , some of which are secured by collateral first mortgage bonds .
( b ) these notes do not have a stated interest rate , but have an implicit interest rate of 4.8% ( 4.8 % ) .
( c ) pursuant to the nuclear waste policy act of 1982 , entergy 2019s nuclear owner/licensee subsidiaries have contracts with the doe for spent nuclear fuel disposal service .
the contracts include a one-time fee for generation prior to april 7 , 1983 .
entergy arkansas is the only entergy company that generated electric power with nuclear fuel prior to that date and includes the one-time fee , plus accrued interest , in long-term ( d ) see note 10 to the financial statements for further discussion of the waterford 3 and grand gulf lease obligations .
( e ) the fair value excludes lease obligations of $ 149 million at entergy louisiana and $ 97 million at system energy , long-term doe obligations of $ 181 million at entergy arkansas , and the note payable to nypa of $ 95 million at entergy , and includes debt due within one year .
fair values are classified as level 2 in the fair value hierarchy discussed in note 16 to the financial statements and are based on prices derived from inputs such as benchmark yields and reported trades .
the annual long-term debt maturities ( excluding lease obligations and long-term doe obligations ) for debt outstanding as of december 31 , 2013 , for the next five years are as follows : amount ( in thousands ) .

     | amount ( in thousands )
---- | -----------------------
2014 | $ 385373
2015 | $ 1110566
2016 | $ 270852
2017 | $ 766801
2018 | $ 1324616

in november 2000 , entergy 2019s non-utility nuclear business purchased the fitzpatrick and indian point 3 power plants in a seller-financed transaction .
entergy issued notes to nypa with seven annual installments of approximately $ 108 million commencing one year from the date of the closing , and eight annual installments of $ 20 million commencing eight years from the date of the closing .
these notes do not have a stated interest rate , but have an implicit interest rate of 4.8% ( 4.8 % ) .
in accordance with the purchase agreement with nypa , the purchase of indian point 2 in 2001 resulted in entergy becoming liable to nypa for an additional $ 10 million per year for 10 years , beginning in september 2003 .
this liability was recorded upon the purchase of indian point 2 in september 2001 .
in july 2003 a payment of $ 102 million was made prior to maturity on the note payable to nypa .
under a provision in a letter of credit supporting these notes , if certain of the utility operating companies or system energy were to default on other indebtedness , entergy could be required to post collateral to support the letter of credit .
entergy gulf states louisiana , entergy louisiana , entergy mississippi , entergy texas , and system energy have obtained long-term financing authorizations from the ferc that extend through october 2015 .
entergy arkansas has obtained long-term financing authorization from the apsc that extends through december 2015 .
entergy new orleans has obtained long-term financing authorization from the city council that extends through july 2014 .
capital funds agreement pursuant to an agreement with certain creditors , entergy corporation has agreed to supply system energy with sufficient capital to : 2022 maintain system energy 2019s equity capital at a minimum of 35% ( 35 % ) of its total capitalization ( excluding short- term debt ) ;


108 / sl green realty corp .
2017 annual report espp provides for eligible employees to purchase the common stock at a purchase price equal to 85% ( 85 % ) of the lesser of ( 1 ) a0the market value of the common stock on the first day of the offer- ing period or ( 2 ) a0the market value of the common stock on the last day of the offering period .
the espp was approved by our stockholders at our 2008 annual meeting of stockholders .
as of december a031 , 2017 , 104597 a0shares of our common stock had been issued under the espp .
available for issuance , subject to adjustment upon a merger , reorganization , stock split or other similar corporate change .
the company filed a registration statement on form a0s-8 with the sec with respect to the espp .
the common stock is offered for purchase through a series of successive offering periods .
each offering period will be three months in duration and will begin on the first day of each calendar quarter , with the first a0offering period having commenced on january a01 , 2008 .
the 15 .
accumulated other comprehensive income the following tables set forth the changes in accumulated other comprehensive income ( loss ) by component as of december a031 , 2017 , 2016 and 2015 ( in thousands ) : sl a0green 2019s share net unrealized of joint venture net unrealized gain on net unrealized gain on derivative gain on derivative marketable instruments ( 1 ) instruments ( 2 ) securities total .

                                                                 | net unrealized gain on derivative instruments ( 1 ) | sl green 2019s share of joint venture net unrealized gain on derivative instruments ( 2 ) | net unrealized gain on marketable securities | total
---------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------------------- | ----------------
balance at december 31 2014                                      | $ -9498 ( 9498 )                                    | $ -95 ( 95 )                                                                              | $ 2613                                       | $ -6980 ( 6980 )
other comprehensive loss before reclassifications                | -11143 ( 11143 )                                    | -1714 ( 1714 )                                                                            | -610 ( 610 )                                 | -13467 ( 13467 )
amounts reclassified from accumulated other comprehensive income | 10481                                               | 1217                                                                                | 2014                                         | 11698
balance at december 31 2015                                      | -10160 ( 10160 )                                    | -592 ( 592 )                                                                              | 2003                                         | -8749 ( 8749 )
other comprehensive income before reclassifications              | 13534                                               | 1160                                                                                | 3517                                         | 18211
amounts reclassified from accumulated other comprehensive income | 9222                                                | 3453                                                                                | 2014                                         | 12675
balance at december 31 2016                                      | 12596                                               | 4021                                                                                | 5520                                         | 22137
other comprehensive ( loss ) income before reclassifications     | -1618 ( 1618 )                                      | 233                                                                                | -1348 ( 1348 )                               | -2733 ( 2733 )
amounts reclassified from accumulated other comprehensive income | 1564                                                | 766                                                                                | -3130 ( 3130 )                               | -800 ( 800 )
balance at december 31 2017                                      | $ 12542                                             | $ 5020                                                                                | $ 1042                                       | $ 18604

( 1 ) amount reclassified from accumulated other comprehensive income ( loss ) is included in interest expense in the respective consolidated statements of operations .
as of december a031 , 2017 and 2016 , the deferred net losses from these terminated hedges , which is included in accumulated other comprehensive loss relating to net unrealized loss on derivative instrument , was $ 3.2 a0million and $ 7.1 a0million , respectively .
( 2 ) amount reclassified from accumulated other comprehensive income ( loss ) is included in equity in net income from unconsolidated joint ventures in the respective consolidated statements of operations .
16 .
fair value measurements we are required to disclose fair value information with regard to our financial instruments , whether or not recognized in the consolidated balance sheets , for which it is practical to estimate fair value .
the fasb guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date .
we measure and/or disclose the estimated fair value of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity 2019s own assumptions about market participant assumptions .
this hierarchy consists of three broad levels : level a01 2014 quoted prices ( unadjusted ) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date ; level a02 2014 inputs other than quoted prices included within level a01 , that are observable for the asset or liability , either directly or indirectly ; and level a03 2014 unobservable inputs for the asset or liability that are used when little or no market data is available .
we follow this hierarchy for our assets and liabilities measured at fair value on a recurring and nonrecurring basis .
in instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy , the level in the fair value hierarchy within which the entire fair value measure- ment falls is based on the lowest level of input that is significant to the fair value measurement in its entirety .
our assessment of the significance of the particular input to the fair value mea- surement in its entirety requires judgment and considers factors specific to the asset or liability.


contractual obligations fis 2019 long-term contractual obligations generally include its long-term debt , interest on long-term debt , lease payments on certain of its property and equipment and payments for data processing and maintenance .
for more descriptive information regarding the company's long-term debt , see note 13 in the notes to consolidated financial statements .
the following table summarizes fis 2019 significant contractual obligations and commitments as of december 31 , 2012 ( in millions ) : less than 1-3 3-5 more than total 1 year years years 5 years .

                                    | total    | less than 1 year | 1-3 years | 3-5 years | more than 5 years
----------------------------------- | -------- | ---------------- | --------- | --------- | -----------------
long-term debt                      | $ 4385.5 | $ 153.9          | $ 757.1   | $ 2274.5  | $ 1200.0
interest ( 1 )                      | 1137.6   | 200.4            | 372.9     | 288.8     | 275.5
operating leases                    | 226.6    | 55.0             | 96.2      | 46.4      | 29.0
data processing and maintenance     | 246.7    | 131.7            | 78.9      | 28.4      | 7.7
other contractual obligations ( 2 ) | 100.7    | 18.8             | 52.0      | 10.6      | 19.3
total                               | $ 6097.1 | $ 559.8          | $ 1357.1  | $ 2648.7  | $ 1531.5

( 1 ) these calculations assume that : ( a ) applicable margins remain constant ; ( b ) all variable rate debt is priced at the one-month libor rate in effect as of december 31 , 2012 ; ( c ) no new hedging transactions are effected ; ( d ) only mandatory debt repayments are made ; and ( e ) no refinancing occurs at debt maturity .
( 2 ) amount includes the payment for labor claims related to fis' former item processing and remittance operations in brazil ( see note 3 to the consolidated financial statements ) and amounts due to the brazilian venture partner .
fis believes that its existing cash balances , cash flows from operations and borrowing programs will provide adequate sources of liquidity and capital resources to meet fis 2019 expected short-term liquidity needs and its long-term needs for the operations of its business , expected capital spending for the next 12 months and the foreseeable future and the satisfaction of these obligations and commitments .
off-balance sheet arrangements fis does not have any off-balance sheet arrangements .
item 7a .
quantitative and qualitative disclosure about market risks market risk we are exposed to market risks primarily from changes in interest rates and foreign currency exchange rates .
we use certain derivative financial instruments , including interest rate swaps and foreign currency forward exchange contracts , to manage interest rate and foreign currency risk .
we do not use derivatives for trading purposes , to generate income or to engage in speculative activity .
interest rate risk in addition to existing cash balances and cash provided by operating activities , we use fixed rate and variable rate debt to finance our operations .
we are exposed to interest rate risk on these debt obligations and related interest rate swaps .
the notes ( as defined in note 13 to the consolidated financial statements ) represent substantially all of our fixed-rate long-term debt obligations .
the carrying value of the notes was $ 1950.0 million as of december 31 , 2012 .
the fair value of the notes was approximately $ 2138.2 million as of december 31 , 2012 .
the potential reduction in fair value of the notes from a hypothetical 10 percent increase in market interest rates would not be material to the overall fair value of the debt .
our floating rate long-term debt obligations principally relate to borrowings under the fis credit agreement ( as also defined in note 13 to the consolidated financial statements ) .
an increase of 100 basis points in the libor rate would increase our annual debt service under the fis credit agreement , after we include the impact of our interest rate swaps , by $ 9.3 million ( based on principal amounts outstanding as of december 31 , 2012 ) .
we performed the foregoing sensitivity analysis based on the principal amount of our floating rate debt as of december 31 , 2012 , less the principal amount of such debt that was then subject to an interest rate swap converting such debt into fixed rate debt .
this sensitivity analysis is based solely on


at december 31 , 2012 , total future minimum commitments under existing non-cancelable operat- ing leases and purchase obligations were as follows: .

in millions                | 2013   | 2014  | 2015  | 2016  | 2017  | thereafter
-------------------------- | ------ | ----- | ----- | ----- | ----- | ----------
lease obligations          | $ 198  | $ 136 | $ 106 | $ 70  | $ 50  | $ 141
purchase obligations ( a ) | 3213   | 828   | 722   | 620   | 808   | 2654
total                      | $ 3411 | $ 964 | $ 828 | $ 690 | $ 858 | $ 2795

( a ) includes $ 3.6 billion relating to fiber supply agreements entered into at the time of the company 2019s 2006 transformation plan forestland sales and in conjunction with the 2008 acquis- ition of weyerhaeuser company 2019s containerboard , packaging and recycling business .
rent expense was $ 231 million , $ 205 million and $ 210 million for 2012 , 2011 and 2010 , respectively .
guarantees in connection with sales of businesses , property , equipment , forestlands and other assets , interna- tional paper commonly makes representations and warranties relating to such businesses or assets , and may agree to indemnify buyers with respect to tax and environmental liabilities , breaches of representations and warranties , and other matters .
where liabilities for such matters are determined to be probable and subject to reasonable estimation , accrued liabilities are recorded at the time of sale as a cost of the transaction .
environmental proceedings international paper has been named as a potentially responsible party in environmental remediation actions under various federal and state laws , includ- ing the comprehensive environmental response , compensation and liability act ( cercla ) .
many of these proceedings involve the cleanup of hazardous substances at large commercial landfills that received waste from many different sources .
while joint and several liability is authorized under cercla and equivalent state laws , as a practical matter , liability for cercla cleanups is typically allocated among the many potential responsible parties .
remedial costs are recorded in the consolidated financial statements when they become probable and reasonably estimable .
international paper has estimated the probable liability associated with these matters to be approximately $ 92 million in the aggregate at december 31 , 2012 .
one of the matters referenced above is a closed wood treating facility located in cass lake , minneso- ta .
during 2009 , in connection with an environmental site remediation action under cercla , international paper submitted to the epa a site remediation feasi- bility study .
in june 2011 , the epa selected and published a proposed soil remedy at the site with an estimated cost of $ 46 million .
the overall remediation reserve for the site is currently $ 48 mil- lion to address this selection of an alternative for the soil remediation component of the overall site remedy .
in october 2011 , the epa released a public statement indicating that the final soil remedy deci- sion would be delayed .
in the unlikely event that the epa changes its proposed soil remedy and approves instead a more expensive clean-up alternative , the remediation costs could be material , and sig- nificantly higher than amounts currently recorded .
in october 2012 , the natural resource trustees for this site provided notice to international paper and other potentially responsible parties of their intent to per- form a natural resource damage assessment .
it is premature to predict the outcome of the assessment or to estimate a loss or range of loss , if any , which may be incurred .
in addition to the above matters , other remediation costs typically associated with the cleanup of hazardous substances at the company 2019s current , closed or formerly-owned facilities , and recorded as liabilities in the balance sheet , totaled approximately $ 46 million at december 31 , 2012 .
other than as described above , completion of required remedial actions is not expected to have a material effect on our consolidated financial statements .
the company is a potentially responsible party with respect to the allied paper , inc./portage creek/ kalamazoo river superfund site ( kalamazoo river superfund site ) in michigan .
the epa asserts that the site is contaminated primarily by pcbs as a result of discharges from various paper mills located along the river , including a paper mill formerly owned by st .
regis .
the company is a successor in interest to st .
regis .
international paper has not received any orders from the epa with respect to the site and is in the process of collecting information from the epa and other parties relative to the kalamazoo river superfund site to evaluate the extent of its liability , if any , with respect to the site .
accordingly , it is pre- mature to estimate a loss or range of loss with respect to this site .
also in connection with the kalamazoo river superfund site , the company was named as a defendant by georgia-pacific consumer products lp , fort james corporation and georgia pacific llc in a contribution and cost recovery action for alleged pollution at the kalamazoo river super- fund site .
the suit seeks contribution under cercla for $ 79 million in costs purportedly expended by plaintiffs as of the filing of the com- plaint , and for future remediation costs .
the suit alleges that a mill , during the time it was allegedly owned and operated by st .
regis , discharged pcb contaminated solids and paper residuals resulting from paper de-inking and recycling .
also named as defendants in the suit are ncr corporation and weyerhaeuser company .
in mid-2011 , the suit was


failure to comply with the financial and other covenants under our credit facilities , as well as the occurrence of certain material adverse events , would constitute defaults and would allow the lenders under our credit facilities to accelerate the maturity of all indebtedness under the related agreements .
this could also have an adverse impact on the availability of financial assurances .
in addition , maturity acceleration on our credit facilities constitutes an event of default under our other debt instruments , including our senior notes , and , therefore , our senior notes would also be subject to acceleration of maturity .
if such acceleration were to occur , we would not have sufficient liquidity available to repay the indebtedness .
we would likely have to seek an amendment under our credit facilities for relief from the financial covenants or repay the debt with proceeds from the issuance of new debt or equity , or asset sales , if necessary .
we may be unable to amend our credit facilities or raise sufficient capital to repay such obligations in the event the maturities are accelerated .
financial assurance we are required to provide financial assurance to governmental agencies and a variety of other entities under applicable environmental regulations relating to our landfill operations for capping , closure and post-closure costs , and related to our performance under certain collection , landfill and transfer station contracts .
we satisfy these financial assurance requirements by providing surety bonds , letters of credit , insurance policies or trust deposits .
the amount of the financial assurance requirements for capping , closure and post-closure costs is determined by applicable state environmental regulations .
the financial assurance requirements for capping , closure and post-closure costs may be associated with a portion of the landfill or the entire landfill .
generally , states will require a third-party engineering specialist to determine the estimated capping , closure and post- closure costs that are used to determine the required amount of financial assurance for a landfill .
the amount of financial assurance required can , and generally will , differ from the obligation determined and recorded under u.s .
gaap .
the amount of the financial assurance requirements related to contract performance varies by contract .
additionally , we are required to provide financial assurance for our insurance program and collateral for certain performance obligations .
we do not expect a material increase in financial assurance requirements during 2010 , although the mix of financial assurance instruments may change .
these financial instruments are issued in the normal course of business and are not debt of our company .
since we currently have no liability for these financial assurance instruments , they are not reflected in our consolidated balance sheets .
however , we record capping , closure and post-closure liabilities and self-insurance liabilities as they are incurred .
the underlying obligations of the financial assurance instruments , in excess of those already reflected in our consolidated balance sheets , would be recorded if it is probable that we would be unable to fulfill our related obligations .
we do not expect this to occur .
off-balance sheet arrangements we have no off-balance sheet debt or similar obligations , other than financial assurance instruments and operating leases that are not classified as debt .
we do not guarantee any third-party debt .
free cash flow we define free cash flow , which is not a measure determined in accordance with u.s .
gaap , as cash provided by operating activities less purchases of property and equipment , plus proceeds from sales of property and equipment as presented in our consolidated statements of cash flows .
our free cash flow for the years ended december 31 , 2009 , 2008 and 2007 is calculated as follows ( in millions ) : .

                                              | 2009             | 2008             | 2007
--------------------------------------------- | ---------------- | ---------------- | ----------------
cash provided by operating activities         | $ 1396.5         | $ 512.2          | $ 661.3
purchases of property and equipment           | -826.3 ( 826.3 ) | -386.9 ( 386.9 ) | -292.5 ( 292.5 )
proceeds from sales of property and equipment | 31.8             | 8.2              | 6.1
free cash flow                                | $ 602.0          | $ 133.5          | $ 374.9