eastman notes to the audited consolidated financial statements accumulated other comprehensive income ( loss ) ( dollars in millions ) cumulative translation adjustment unfunded additional minimum pension liability unrecognized loss and prior service cost , net of unrealized gains ( losses ) on cash flow hedges unrealized losses on investments accumulated comprehensive income ( loss ) balance at december 31 , 2004 155 ( 248 ) -- ( 8 ) ( 2 ) ( 103 ) .

( dollars in millions )                       | cumulative translation adjustment$ | unfundedadditionalminimum pension liability$ | unrecognized loss and prior service cost net of taxes$ | unrealized gains ( losses ) on cash flow hedges$ | unrealized losses on investments$ | accumulated other comprehensive income ( loss ) $
--------------------------------------------- | ---------------------------------- | -------------------------------------------- | ------------------------------------------------------ | ------------------------------------------------ | --------------------------------- | -------------------------------------------------
balance at december 31 2004                   | 155                                | -248 ( 248 )                                 | --                                                     | -8 ( 8 )                                         | -2 ( 2 )                          | -103 ( 103 )
period change                                 | -94 ( 94 )                         | -7 ( 7 )                                     | --                                                     | 3                                                | 1                                 | -97 ( 97 )
balance at december 31 2005                   | 61                                 | -255 ( 255 )                                 | --                                                     | -5 ( 5 )                                         | -1 ( 1 )                          | -200 ( 200 )
period change                                 | 60                                 | 48                                           | --                                                     | -1 ( 1 )                                         | --                                | 107
pre-sfas no . 158 balance at december 31 2006 | 121                                | -207 ( 207 )                                 | --                                                     | -6 ( 6 )                                         | -1 ( 1 )                          | -93 ( 93 )
adjustments to apply sfas no . 158            | --                                 | 207                                          | -288 ( 288 )                                           | --                                               | --                                | -81 ( 81 )
balance at december 31 2006                   | 121                                | --                                           | -288 ( 288 )                                           | -6 ( 6 )                                         | -1 ( 1 )                          | -174 ( 174 )

pre-sfas no .
158 balance at december 31 , 2006 121 ( 207 ) -- ( 6 ) ( 1 ) ( 93 ) adjustments to apply sfas no .
158 -- 207 ( 288 ) -- -- ( 81 ) balance at december 31 , 2006 121 -- ( 288 ) ( 6 ) ( 1 ) ( 174 ) except for cumulative translation adjustment , amounts of other comprehensive income ( loss ) are presented net of applicable taxes .
because cumulative translation adjustment is considered a component of permanently invested , unremitted earnings of subsidiaries outside the united states , no taxes are provided on such amounts .
15 .
share-based compensation plans and awards 2002 omnibus long-term compensation plan eastman's 2002 omnibus long-term compensation plan provides for grants to employees of nonqualified stock options , incentive stock options , tandem and freestanding stock appreciation rights ( 201csar 2019s 201d ) , performance shares and various other stock and stock-based awards .
the 2002 omnibus plan provides that options can be granted through may 2 , 2007 , for the purchase of eastman common stock at an option price not less than 100 percent of the per share fair market value on the date of the stock option's grant .
there is a maximum of 7.5 million shares of common stock available for option grants and other awards during the term of the 2002 omnibus plan .
director long-term compensation plan eastman's 2002 director long-term compensation plan provides for grants of nonqualified stock options and restricted shares to nonemployee members of the board of directors .
shares of restricted stock are granted upon the first day of the directors' initial term of service and nonqualified stock options and shares of restricted stock are granted each year following the annual meeting of stockholders .
the 2002 director plan provides that options can be granted through the later of may 1 , 2007 , or the date of the annual meeting of stockholders in 2007 for the purchase of eastman common stock at an option price not less than the stock's fair market value on the date of the grant.


2016 , as well as significant sponsorship and other marketing agreements entered into during the period after december 31 , 2016 through the date of this report : ( in thousands ) .

2017                                                | $ 176138
--------------------------------------------------- | ---------
2018                                                | 166961
2019                                                | 142987
2020                                                | 124856
2021                                                | 118168
2022 and thereafter                                 | 626495
total future minimum sponsorship and other payments | $ 1355605

total future minimum sponsorship and other payments $ 1355605 the amounts listed above are the minimum compensation obligations and guaranteed royalty fees required to be paid under the company 2019s sponsorship and other marketing agreements .
the amounts listed above do not include additional performance incentives and product supply obligations provided under certain agreements .
it is not possible to determine how much the company will spend on product supply obligations on an annual basis as contracts generally do not stipulate specific cash amounts to be spent on products .
the amount of product provided to the sponsorships depends on many factors including general playing conditions , the number of sporting events in which they participate and the company 2019s decisions regarding product and marketing initiatives .
in addition , the costs to design , develop , source and purchase the products furnished to the endorsers are incurred over a period of time and are not necessarily tracked separately from similar costs incurred for products sold to customers .
in connection with various contracts and agreements , the company has agreed to indemnify counterparties against certain third party claims relating to the infringement of intellectual property rights and other items .
generally , such indemnification obligations do not apply in situations in which the counterparties are grossly negligent , engage in willful misconduct , or act in bad faith .
based on the company 2019s historical experience and the estimated probability of future loss , the company has determined that the fair value of such indemnifications is not material to its consolidated financial position or results of operations .
from time to time , the company is involved in litigation and other proceedings , including matters related to commercial and intellectual property disputes , as well as trade , regulatory and other claims related to its business .
other than as described below , the company believes that all current proceedings are routine in nature and incidental to the conduct of its business , and that the ultimate resolution of any such proceedings will not have a material adverse effect on its consolidated financial position , results of operations or cash flows .
on february 10 , 2017 , a shareholder filed a securities case in the united states district court for the district of maryland ( the 201ccourt 201d ) against the company , the company 2019s chief executive officer and the company 2019s former chief financial officer ( brian breece v .
under armour , inc. ) .
on february 16 , 2017 , a second shareholder filed a securities case in the court against the same defendants ( jodie hopkins v .
under armour , inc. ) .
the plaintiff in each case purports to represent a class of shareholders for the period between april 21 , 2016 and january 30 , 2017 , inclusive .
the complaints allege violations of section 10 ( b ) ( and rule 10b-5 ) of the securities exchange act of 1934 , as amended ( the 201cexchange act 201d ) and section 20 ( a ) control person liability under the exchange act against the officers named in the complaints .
in general , the allegations in each case concern disclosures and statements made by


part i item 1 entergy corporation , utility operating companies , and system energy louisiana parishes in which it holds non-exclusive franchises .
entergy louisiana's electric franchises expire during 2009-2036 .
entergy mississippi has received from the mpsc certificates of public convenience and necessity to provide electric service to areas within 45 counties , including a number of municipalities , in western mississippi .
under mississippi statutory law , such certificates are exclusive .
entergy mississippi may continue to serve in such municipalities upon payment of a statutory franchise fee , regardless of whether an original municipal franchise is still in existence .
entergy new orleans provides electric and gas service in the city of new orleans pursuant to city ordinances ( except electric service in algiers , which is provided by entergy louisiana ) .
these ordinances contain a continuing option for the city of new orleans to purchase entergy new orleans' electric and gas utility properties .
entergy texas holds a certificate of convenience and necessity from the puct to provide electric service to areas within approximately 24 counties in eastern texas , and holds non-exclusive franchises to provide electric service in approximately 65 incorporated municipalities .
entergy texas typically is granted 50-year franchises .
entergy texas' electric franchises expire during 2009-2045 .
the business of system energy is limited to wholesale power sales .
it has no distribution franchises .
property and other generation resources generating stations the total capability of the generating stations owned and leased by the utility operating companies and system energy as of december 31 , 2008 , is indicated below: .

company                       | owned and leased capability mw ( 1 ) total | owned and leased capability mw ( 1 ) gas/oil | owned and leased capability mw ( 1 ) nuclear | owned and leased capability mw ( 1 ) coal | owned and leased capability mw ( 1 ) hydro
----------------------------- | ------------------------------------------ | -------------------------------------------- | -------------------------------------------- | ----------------------------------------- | ------------------------------------------
entergy arkansas              | 4999                                       | 1883                                         | 1839                                         | 1207                                      | 70
entergy gulf states louisiana | 3574                                       | 2240                                         | 971                                          | 363                                       | -
entergy louisiana             | 5854                                       | 4685                                         | 1169                                         | -                                         | -
entergy mississippi           | 3224                                       | 2804                                         | -                                            | 420                                       | -
entergy new orleans           | 745                                        | 745                                          | -                                            | -                                         | -
entergy texas                 | 2543                                       | 2274                                         | -                                            | 269                                       | -
system energy                 | 1139                                       | -                                            | 1139                                         | -                                         | -
total                         | 22078                                      | 14631                                        | 5118                                         | 2259                                      | 70

( 1 ) "owned and leased capability" is the dependable load carrying capability as demonstrated under actual operating conditions based on the primary fuel ( assuming no curtailments ) that each station was designed to utilize .
the entergy system's load and capacity projections are reviewed periodically to assess the need and timing for additional generating capacity and interconnections .
these reviews consider existing and projected demand , the availability and price of power , the location of new load , and the economy .
summer peak load in the entergy system service territory has averaged 21039 mw from 2002-2008 .
due to changing use patterns , peak load growth has nearly flattened while annual energy use continues to grow .
in the 2002 time period , the entergy system's long-term capacity resources , allowing for an adequate reserve margin , were approximately 3000 mw less than the total capacity required for peak period demands .
in this time period entergy met its capacity shortages almost entirely through short-term power purchases in the wholesale spot market .
in the fall of 2002 , the entergy system began a program to add new resources to its existing generation portfolio and began a process of issuing


abiomed , inc .
and subsidiaries notes to consolidated financial statements 2014 ( continued ) note 3 .
acquisitions ( continued ) including the revenues of third-party licensees , or ( ii ) the company 2019s sale of ( a ) ecp , ( b ) all or substantially all of ecp 2019s assets , or ( c ) certain of ecp 2019s patent rights , the company will pay to syscore the lesser of ( x ) one-half of the profits earned from such sale described in the foregoing item ( ii ) , after accounting for the costs of acquiring and operating ecp , or ( y ) $ 15.0 million ( less any previous milestone payment ) .
ecp 2019s acquisition of ais gmbh aachen innovative solutions in connection with the company 2019s acquisition of ecp , ecp acquired all of the share capital of ais gmbh aachen innovative solutions ( 201cais 201d ) , a limited liability company incorporated in germany , pursuant to a share purchase agreement dated as of june 30 , 2014 , by and among ecp and ais 2019s four individual shareholders .
ais , based in aachen , germany , holds certain intellectual property useful to ecp 2019s business , and , prior to being acquired by ecp , had licensed such intellectual property to ecp .
the purchase price for the acquisition of ais 2019s share capital was approximately $ 2.8 million in cash , which was provided by the company , and the acquisition closed immediately prior to abiomed europe 2019s acquisition of ecp .
the share purchase agreement contains representations , warranties and closing conditions customary for transactions of its size and nature .
purchase price allocation the acquisition of ecp and ais was accounted for as a business combination .
the purchase price for the acquisition has been allocated to the assets acquired and liabilities assumed based on their estimated fair values .
the acquisition-date fair value of the consideration transferred is as follows : acquisition date fair value ( in thousands ) .

                                | total acquisition date fair value ( in thousands )
------------------------------- | --------------------------------------------------
cash consideration              | $ 15750
contingent consideration        | 6000
total consideration transferred | $ 21750


we may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness , which may not be successful .
our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition , operating performance and our ability to receive dividend payments from our subsidiaries , which is subject to prevailing economic and competitive conditions , regulatory approval and certain financial , business and other factors beyond our control .
we may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on our indebtedness .
if our cash flows and capital resources are insufficient to fund our debt service obligations , we may be forced to reduce or delay investments and capital expenditures , or to sell assets , seek additional capital or restructure or refinance our indebtedness .
these alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations .
in addition , the terms of existing or future debt instruments may restrict us from adopting some of these alternatives .
our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time .
any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants , which could further restrict our business operations .
in addition , any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating , which could harm our ability to incur additional indebtedness .
if our cash flows and available cash are insufficient to meet our debt service obligations , we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations .
we may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them , and these proceeds may not be adequate to meet any debt service obligations then due .
item 1b .
unresolved staff comments item 2 .
properties a summary of our significant locations at december 31 , 2012 is shown in the following table .
all facilities are leased , except for 165000 square feet of our office in alpharetta , georgia .
square footage amounts are net of space that has been sublet or part of a facility restructuring. .

location               | approximate square footage
---------------------- | --------------------------
alpharetta georgia     | 254000
jersey city new jersey | 107000
arlington virginia     | 102000
menlo park california  | 91000
sandy utah             | 66000
new york new york      | 39000
chicago illinois       | 25000

all of our facilities are used by either our trading and investing or balance sheet management segments , in addition to the corporate/other category .
all other leased facilities with space of less than 25000 square feet are not listed by location .
in addition to the significant facilities above , we also lease all 30 e*trade branches , ranging in space from approximately 2500 to 8000 square feet .
we believe our facilities space is adequate to meet our needs in 2013.


humana inc .
notes to consolidated financial statements 2014 ( continued ) 15 .
stockholders 2019 equity dividends the following table provides details of dividend payments , excluding dividend equivalent rights , in 2015 , 2016 , and 2017 under our board approved quarterly cash dividend policy : payment amount per share amount ( in millions ) .

paymentdate | amountper share | totalamount ( in millions )
----------- | --------------- | ---------------------------
2015        | $ 1.14          | $ 170
2016        | $ 1.16          | $ 172
2017        | $ 1.49          | $ 216

on november 2 , 2017 , the board declared a cash dividend of $ 0.40 per share that was paid on january 26 , 2018 to stockholders of record on december 29 , 2017 , for an aggregate amount of $ 55 million .
declaration and payment of future quarterly dividends is at the discretion of our board and may be adjusted as business needs or market conditions change .
stock repurchases in september 2014 , our board of directors replaced a previous share repurchase authorization of up to $ 1 billion ( of which $ 816 million remained unused ) with an authorization for repurchases of up to $ 2 billion of our common shares exclusive of shares repurchased in connection with employee stock plans , which expired on december 31 , 2016 .
under the share repurchase authorization , shares may have been purchased from time to time at prevailing prices in the open market , by block purchases , through plans designed to comply with rule 10b5-1 under the securities exchange act of 1934 , as amended , or in privately-negotiated transactions ( including pursuant to accelerated share repurchase agreements with investment banks ) , subject to certain regulatory restrictions on volume , pricing , and timing .
pursuant to the merger agreement , after july 2 , 2015 , we were prohibited from repurchasing any of our outstanding securities without the prior written consent of aetna , other than repurchases of shares of our common stock in connection with the exercise of outstanding stock options or the vesting or settlement of outstanding restricted stock awards .
accordingly , as announced on july 3 , 2015 , we suspended our share repurchase program .
on february 14 , 2017 , we and aetna agreed to mutually terminate the merger agreement .
we also announced that the board had approved a new authorization for share repurchases of up to $ 2.25 billion of our common stock exclusive of shares repurchased in connection with employee stock plans , expiring on december 31 , 2017 .
on february 16 , 2017 , we entered into an accelerated share repurchase agreement , the february 2017 asr , with goldman , sachs & co .
llc , or goldman sachs , to repurchase $ 1.5 billion of our common stock as part of the $ 2.25 billion share repurchase program referred to above .
on february 22 , 2017 , we made a payment of $ 1.5 billion to goldman sachs from available cash on hand and received an initial delivery of 5.83 million shares of our common stock from goldman sachs based on the then current market price of humana common stock .
the payment to goldman sachs was recorded as a reduction to stockholders 2019 equity , consisting of a $ 1.2 billion increase in treasury stock , which reflected the value of the initial 5.83 million shares received upon initial settlement , and a $ 300 million decrease in capital in excess of par value , which reflected the value of stock held back by goldman sachs pending final settlement of the february 2017 asr .
upon settlement of the february 2017 asr on august 28 , 2017 , we received an additional 0.84 million shares as determined by the average daily volume weighted-average share price of our common stock during the term of the agreement of $ 224.81 , bringing the total shares received under this program to 6.67 million .
in addition , upon settlement we reclassified the $ 300 million value of stock initially held back by goldman sachs from capital in excess of par value to treasury stock .
subsequent to settlement of the february 2017 asr , we repurchased an additional 3.04 million shares in the open market , utilizing the remaining $ 750 million of the $ 2.25 billion authorization prior to expiration.


december 31 , 2011 , the company recognized a decrease of $ 3 million of tax-related interest and penalties and had approximately $ 16 million accrued at december 31 , 2011 .
note 12 derivative instruments and fair value measurements the company is exposed to certain market risks such as changes in interest rates , foreign currency exchange rates , and commodity prices , which exist as a part of its ongoing business operations .
management uses derivative financial and commodity instruments , including futures , options , and swaps , where appropriate , to manage these risks .
instruments used as hedges must be effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the contract .
the company designates derivatives as cash flow hedges , fair value hedges , net investment hedges , and uses other contracts to reduce volatility in interest rates , foreign currency and commodities .
as a matter of policy , the company does not engage in trading or speculative hedging transactions .
total notional amounts of the company 2019s derivative instruments as of december 28 , 2013 and december 29 , 2012 were as follows: .

( millions )                        | 2013   | 2012
----------------------------------- | ------ | ------
foreign currency exchange contracts | $ 517  | $ 570
interest rate contracts             | 2400   | 2150
commodity contracts                 | 361    | 320
total                               | $ 3278 | $ 3040

following is a description of each category in the fair value hierarchy and the financial assets and liabilities of the company that were included in each category at december 28 , 2013 and december 29 , 2012 , measured on a recurring basis .
level 1 2014 financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market .
for the company , level 1 financial assets and liabilities consist primarily of commodity derivative contracts .
level 2 2014 financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability .
for the company , level 2 financial assets and liabilities consist of interest rate swaps and over-the-counter commodity and currency contracts .
the company 2019s calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve .
over-the-counter commodity derivatives are valued using an income approach based on the commodity index prices less the contract rate multiplied by the notional amount .
foreign currency contracts are valued using an income approach based on forward rates less the contract rate multiplied by the notional amount .
the company 2019s calculation of the fair value of level 2 financial assets and liabilities takes into consideration the risk of nonperformance , including counterparty credit risk .
level 3 2014 financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement .
these inputs reflect management 2019s own assumptions about the assumptions a market participant would use in pricing the asset or liability .
the company did not have any level 3 financial assets or liabilities as of december 28 , 2013 or december 29 , 2012.


other taxes decreased in 2001 because its utility operations in virginia became subject to state income taxes in lieu of gross receipts taxes effective january 2001 .
in addition , dominion recognized higher effective rates for foreign earnings and higher pretax income in relation to non-conventional fuel tax credits realized .
dominion energy 2002 2001 2000 ( millions , except per share amounts ) .

( millions except pershare amounts )    | 2002   | 2001   | 2000
--------------------------------------- | ------ | ------ | ------
operating revenue                       | $ 5940 | $ 6144 | $ 4894
operating expenses                      | 4520   | 4749   | 3939
net income contribution                 | 770    | 723    | 489
earnings per share contribution         | $ 2.72 | $ 2.86 | $ 2.07
electricity supplied* ( million mwhrs ) | 101    | 95     | 83
gas transmission throughput ( bcf )     | 597    | 553    | 567

* amounts presented are for electricity supplied by utility and merchant generation operations .
operating results 2014 2002 dominion energy contributed $ 2.72 per diluted share on net income of $ 770 million for 2002 , a net income increase of $ 47 million and an earnings per share decrease of $ 0.14 over 2001 .
net income for 2002 reflected lower operating revenue ( $ 204 million ) , operating expenses ( $ 229 million ) and other income ( $ 27 million ) .
interest expense and income taxes , which are discussed on a consolidated basis , decreased $ 50 million over 2001 .
the earnings per share decrease reflected share dilution .
regulated electric sales revenue increased $ 179 million .
favorable weather conditions , reflecting increased cooling and heating degree-days , as well as customer growth , are estimated to have contributed $ 133 million and $ 41 million , respectively .
fuel rate recoveries increased approximately $ 65 million for 2002 .
these recoveries are generally offset by increases in elec- tric fuel expense and do not materially affect income .
partially offsetting these increases was a net decrease of $ 60 million due to other factors not separately measurable , such as the impact of economic conditions on customer usage , as well as variations in seasonal rate premiums and discounts .
nonregulated electric sales revenue increased $ 9 million .
sales revenue from dominion 2019s merchant generation fleet decreased $ 21 million , reflecting a $ 201 million decline due to lower prices partially offset by sales from assets acquired and constructed in 2002 and the inclusion of millstone operations for all of 2002 .
revenue from the wholesale marketing of utility generation decreased $ 74 million .
due to the higher demand of utility service territory customers during 2002 , less production from utility plant generation was available for profitable sale in the wholesale market .
revenue from retail energy sales increased $ 71 million , reflecting primarily customer growth over the prior year .
net revenue from dominion 2019s electric trading activities increased $ 33 million , reflecting the effect of favorable price changes on unsettled contracts and higher trading margins .
nonregulated gas sales revenue decreased $ 351 million .
the decrease included a $ 239 million decrease in sales by dominion 2019s field services and retail energy marketing opera- tions , reflecting to a large extent declining prices .
revenue associated with gas trading operations , net of related cost of sales , decreased $ 112 million .
the decrease included $ 70 mil- lion of realized and unrealized losses on the economic hedges of natural gas production by the dominion exploration & pro- duction segment .
as described below under selected information 2014 energy trading activities , sales of natural gas by the dominion exploration & production segment at market prices offset these financial losses , resulting in a range of prices contemplated by dominion 2019s overall risk management strategy .
the remaining $ 42 million decrease was due to unfavorable price changes on unsettled contracts and lower overall trading margins .
those losses were partially offset by contributions from higher trading volumes in gas and oil markets .
gas transportation and storage revenue decreased $ 44 million , primarily reflecting lower rates .
electric fuel and energy purchases expense increased $ 94 million which included an increase of $ 66 million associated with dominion 2019s energy marketing operations that are not sub- ject to cost-based rate regulation and an increase of $ 28 million associated with utility operations .
substantially all of the increase associated with non-regulated energy marketing opera- tions related to higher volumes purchased during the year .
for utility operations , energy costs increased $ 66 million for pur- chases subject to rate recovery , partially offset by a $ 38 million decrease in fuel expenses associated with lower wholesale mar- keting of utility plant generation .
purchased gas expense decreased $ 245 million associated with dominion 2019s field services and retail energy marketing oper- ations .
this decrease reflected approximately $ 162 million asso- ciated with declining prices and $ 83 million associated with lower purchased volumes .
liquids , pipeline capacity and other purchases decreased $ 64 million , primarily reflecting comparably lower levels of rate recoveries of certain costs of transmission operations in the cur- rent year period .
the difference between actual expenses and amounts recovered in the period are deferred pending future rate adjustments .
other operations and maintenance expense decreased $ 14 million , primarily reflecting an $ 18 million decrease in outage costs due to fewer generation unit outages in the current year .
depreciation expense decreased $ 11 million , reflecting decreases in depreciation associated with changes in the esti- mated useful lives of certain electric generation property , par- tially offset by increased depreciation associated with state line and millstone operations .
other income decreased $ 27 million , including a $ 14 mil- lion decrease in net realized investment gains in the millstone 37d o m i n i o n 2019 0 2 a n n u a l r e p o r t


troubled debt restructurings ( tdrs ) a tdr is a loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulty .
tdrs result from our loss mitigation activities , and include rate reductions , principal forgiveness , postponement/reduction of scheduled amortization , and extensions , which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral .
additionally , tdrs also result from borrowers that have been discharged from personal liability through chapter 7 bankruptcy and have not formally reaffirmed their loan obligations to pnc .
in those situations where principal is forgiven , the amount of such principal forgiveness is immediately charged off .
some tdrs may not ultimately result in the full collection of principal and interest , as restructured , and result in potential incremental losses .
these potential incremental losses have been factored into our overall alll estimate .
the level of any subsequent defaults will likely be affected by future economic conditions .
once a loan becomes a tdr , it will continue to be reported as a tdr until it is ultimately repaid in full , the collateral is foreclosed upon , or it is fully charged off .
we held specific reserves in the alll of $ .4 billion and $ .5 billion at december 31 , 2014 and december 31 , 2013 , respectively , for the total tdr portfolio .
table 67 : summary of troubled debt restructurings in millions december 31 december 31 .

in millions              | december 312014 | december 312013
------------------------ | --------------- | ---------------
total consumer lending   | $ 2041          | $ 2161
total commercial lending | 542             | 578
total tdrs               | $ 2583          | $ 2739
nonperforming            | $ 1370          | $ 1511
accruing ( a )           | 1083            | 1062
credit card              | 130             | 166
total tdrs               | $ 2583          | $ 2739

( a ) accruing tdr loans have demonstrated a period of at least six months of performance under the restructured terms and are excluded from nonperforming loans .
loans where borrowers have been discharged from personal liability through chapter 7 bankruptcy and have not formally reaffirmed their loan obligations to pnc and loans to borrowers not currently obligated to make both principal and interest payments under the restructured terms are not returned to accrual status .
table 68 quantifies the number of loans that were classified as tdrs as well as the change in the recorded investments as a result of the tdr classification during 2014 , 2013 , and 2012 , respectively .
additionally , the table provides information about the types of tdr concessions .
the principal forgiveness tdr category includes principal forgiveness and accrued interest forgiveness .
these types of tdrs result in a write down of the recorded investment and a charge-off if such action has not already taken place .
the rate reduction tdr category includes reduced interest rate and interest deferral .
the tdrs within this category result in reductions to future interest income .
the other tdr category primarily includes consumer borrowers that have been discharged from personal liability through chapter 7 bankruptcy and have not formally reaffirmed their loan obligations to pnc , as well as postponement/reduction of scheduled amortization and contractual extensions for both consumer and commercial borrowers .
in some cases , there have been multiple concessions granted on one loan .
this is most common within the commercial loan portfolio .
when there have been multiple concessions granted in the commercial loan portfolio , the principal forgiveness concession was prioritized for purposes of determining the inclusion in table 68 .
for example , if there is principal forgiveness in conjunction with lower interest rate and postponement of amortization , the type of concession will be reported as principal forgiveness .
second in priority would be rate reduction .
for example , if there is an interest rate reduction in conjunction with postponement of amortization , the type of concession will be reported as a rate reduction .
in the event that multiple concessions are granted on a consumer loan , concessions resulting from discharge from personal liability through chapter 7 bankruptcy without formal affirmation of the loan obligations to pnc would be prioritized and included in the other type of concession in the table below .
after that , consumer loan concessions would follow the previously discussed priority of concessions for the commercial loan portfolio .
138 the pnc financial services group , inc .
2013 form 10-k


united kingdom .
bermuda re 2019s uk branch conducts business in the uk and is subject to taxation in the uk .
bermuda re believes that it has operated and will continue to operate its bermuda operation in a manner which will not cause them to be subject to uk taxation .
if bermuda re 2019s bermuda operations were to become subject to uk income tax , there could be a material adverse impact on the company 2019s financial condition , results of operations and cash flow .
ireland .
holdings ireland and ireland re conduct business in ireland and are subject to taxation in ireland .
available information .
the company 2019s annual reports on form 10-k , quarterly reports on form 10-q , current reports on form 8- k , proxy statements and amendments to those reports are available free of charge through the company 2019s internet website at http://www.everestre.com as soon as reasonably practicable after such reports are electronically filed with the securities and exchange commission ( the 201csec 201d ) .
item 1a .
risk factors in addition to the other information provided in this report , the following risk factors should be considered when evaluating an investment in our securities .
if the circumstances contemplated by the individual risk factors materialize , our business , financial condition and results of operations could be materially and adversely affected and the trading price of our common shares could decline significantly .
risks relating to our business fluctuations in the financial markets could result in investment losses .
prolonged and severe disruptions in the public debt and equity markets , such as occurred during 2008 , could result in significant realized and unrealized losses in our investment portfolio .
for the year ended december 31 , 2008 , we incurred $ 695.8 million of realized investment gains and $ 310.4 million of unrealized investment losses .
although financial markets significantly improved during 2009 and 2010 , they could deteriorate in the future and again result in substantial realized and unrealized losses , which could have a material adverse impact on our results of operations , equity , business and insurer financial strength and debt ratings .
our results could be adversely affected by catastrophic events .
we are exposed to unpredictable catastrophic events , including weather-related and other natural catastrophes , as well as acts of terrorism .
any material reduction in our operating results caused by the occurrence of one or more catastrophes could inhibit our ability to pay dividends or to meet our interest and principal payment obligations .
subsequent to april 1 , 2010 , we define a catastrophe as an event that causes a loss on property exposures before reinsurance of at least $ 10.0 million , before corporate level reinsurance and taxes .
prior to april 1 , 2010 , we used a threshold of $ 5.0 million .
by way of illustration , during the past five calendar years , pre-tax catastrophe losses , net of contract specific reinsurance but before cessions under corporate reinsurance programs , were as follows: .

calendar year:          | pre-tax catastrophe losses
----------------------- | --------------------------
( dollars in millions ) |
2010                    | $ 571.1
2009                    | 67.4
2008                    | 364.3
2007                    | 160.0
2006                    | 287.9


part i item 1 entergy corporation , domestic utility companies , and system energy employment litigation ( entergy corporation , entergy arkansas , entergy gulf states , entergy louisiana , entergy mississippi , entergy new orleans , and system energy ) entergy corporation and the domestic utility companies are defendants in numerous lawsuits that have been filed by former employees alleging that they were wrongfully terminated and/or discriminated against on the basis of age , race , sex , and/or other protected characteristics .
entergy corporation and the domestic utility companies are vigorously defending these suits and deny any liability to the plaintiffs .
however , no assurance can be given as to the outcome of these cases , and at this time management cannot estimate the total amount of damages sought .
included in the employment litigation are two cases filed in state court in claiborne county , mississippi in december 2002 .
the two cases were filed by former employees of entergy operations who were based at grand gulf .
entergy operations and entergy employees are named as defendants .
the cases make employment-related claims , and seek in total $ 53 million in alleged actual damages and $ 168 million in punitive damages .
entergy subsequently removed both proceedings to the federal district in jackson , mississippi .
entergy cannot predict the ultimate outcome of this proceeding .
research spending entergy is a member of the electric power research institute ( epri ) .
epri conducts a broad range of research in major technical fields related to the electric utility industry .
entergy participates in various epri projects based on entergy's needs and available resources .
the domestic utility companies contributed $ 1.6 million in 2004 , $ 1.5 million in 2003 , and $ 2.1 million in 2002 to epri .
the non-utility nuclear business contributed $ 3.2 million in 2004 and $ 3 million in both 2003 and 2002 to epri .
employees employees are an integral part of entergy's commitment to serving its customers .
as of december 31 , 2004 , entergy employed 14425 people .
u.s .
utility: .

entergy arkansas           | 1494
-------------------------- | -----
entergy gulf states        | 1641
entergy louisiana          | 943
entergy mississippi        | 793
entergy new orleans        | 403
system energy              | -
entergy operations         | 2735
entergy services           | 2704
entergy nuclear operations | 3245
other subsidiaries         | 277
total full-time            | 14235
part-time                  | 190
total entergy              | 14425

approximately 4900 employees are represented by the international brotherhood of electrical workers union , the utility workers union of america , and the international brotherhood of teamsters union.


zimmer holdings , inc .
2013 form 10-k annual report notes to consolidated financial statements ( continued ) fees paid to collaborative partners .
where contingent milestone payments are due to third parties under research and development arrangements , the milestone payment obligations are expensed when the milestone results are achieved .
litigation 2013 we record a liability for contingent losses , including future legal costs , settlements and judgments , when we consider it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated .
special items 2013 we recognize expenses resulting directly from our business combinations , employee termination benefits , certain r&d agreements , certain contract terminations , consulting and professional fees and asset impairment or loss on disposal charges connected with global restructuring , operational and quality excellence initiatives , and other items as 201cspecial items 201d in our consolidated statement of earnings .
201cspecial items 201d included ( in millions ) : .

for the years ended december 31,                                                 | 2013    | 2012         | 2011
-------------------------------------------------------------------------------- | ------- | ------------ | ------
impairment/loss on disposal of assets                                            | $ 10.9  | $ 14.6       | $ 8.4
consulting and professional fees                                                 | 99.1    | 90.1         | 26.0
employee severance and retention including share-based compensation acceleration | 14.2    | 8.2          | 23.1
dedicated project personnel                                                      | 34.0    | 15.1         | 3.2
certain r&d agreements                                                           | 0.8     | 2013         | 2013
relocated facilities                                                             | 3.6     | 1.8          | 2013
distributor acquisitions                                                         | 0.4     | 0.8          | 2.0
certain litigation matters                                                       | 26.9    | 13.7         | 0.1
contract terminations                                                            | 3.9     | 6.6          | 6.3
contingent consideration adjustments                                             | 9.0     | -2.8 ( 2.8 ) | 2013
accelerated software amortization                                                | 6.0     | 4.5          | 2013
other                                                                            | 7.9     | 2.8          | 6.1
special items                                                                    | $ 216.7 | $ 155.4      | $ 75.2

impairment/ loss on disposal of assets relates to impairment of intangible assets that were acquired in business combinations or impairment of or a loss on the disposal of other assets .
consulting and professional fees relate to third-party consulting , professional fees and contract labor related to our quality and operational excellence initiatives , third-party consulting fees related to certain information system implementations , third-party integration consulting performed in a variety of areas such as tax , compliance , logistics and human resources for our business combinations , third-party fees related to severance and termination benefits matters and legal fees related to certain product liability matters .
our quality and operational excellence initiatives are company- wide and include improvements in quality , distribution , sourcing , manufacturing and information technology , among other areas .
in 2013 , 2012 and 2011 , we eliminated positions as we reduced management layers , restructured certain areas , announced closures of certain facilities , and commenced initiatives to focus on business opportunities that best support our strategic priorities .
in 2013 , 2012 and 2011 , approximately 170 , 400 and 500 positions , respectively , from across the globe were affected by these actions .
as a result of these changes in our work force and headcount reductions in connection with acquisitions , we incurred expenses related to severance benefits , redundant salaries as we worked through transition periods , share-based compensation acceleration and other employee termination-related costs .
the majority of these termination benefits were provided in accordance with our existing or local government policies and are considered ongoing benefits .
these costs were accrued when they became probable and estimable and were recorded as part of other current liabilities .
the majority of these costs were paid during the year they were incurred .
dedicated project personnel expenses include the salary , benefits , travel expenses and other costs directly associated with employees who are 100 percent dedicated to our operational and quality excellence initiatives or integration of acquired businesses .
certain r&d agreements relate to agreements with upfront payments to obtain intellectual property to be used in r&d projects that have no alternative future use in other projects .
relocated facilities expenses are the moving costs and the lease expenses incurred during the relocation period in connection with relocating certain facilities .
over the past few years we have acquired a number of u.s .
and foreign-based distributors .
we have incurred various costs related to the consummation and integration of those businesses .
certain litigation matters relate to costs and adjustments recognized during the year for the estimated or actual settlement of various legal matters , including royalty disputes , patent litigation matters , commercial litigation matters and matters arising from our acquisitions of certain competitive distributorships in prior years .
contract termination costs relate to terminated agreements in connection with the integration of acquired companies and changes to our distribution model as part of business restructuring and operational excellence initiatives .
the terminated contracts primarily relate to sales agents and distribution agreements .
contingent consideration adjustments represent the changes in the fair value of contingent consideration obligations to be paid to the prior owners of acquired businesses .
accelerated software amortization is the incremental amortization resulting from a reduction in the estimated life of certain software .
in 2012 , we approved a plan to replace certain software .
as a result , the estimated economic useful life of the existing software was decreased to represent the period of time expected to implement replacement software .
as a result , the amortization from the shortened life of this software is substantially higher than the previous amortization being recognized .
cash and cash equivalents 2013 we consider all highly liquid investments with an original maturity of three months or less to be cash equivalents .
the carrying amounts reported in the balance sheet for cash and cash equivalents are valued at cost , which approximates their fair value.


amount of commitment expiration per period other commercial commitments after millions total 2013 2014 2015 2016 2017 2017 .

other commercial commitmentsmillions    | total  | amount of commitment expiration per period 2013 | amount of commitment expiration per period 2014 | amount of commitment expiration per period 2015 | amount of commitment expiration per period 2016 | amount of commitment expiration per period 2017 | amount of commitment expiration per period after 2017
--------------------------------------- | ------ | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | ----------------------------------------------- | -----------------------------------------------------
credit facilities [a]                   | $ 1800 | $ -                                             | $ -                                             | $ 1800                                          | $ -                                             | $ -                                             | $ -
receivables securitization facility [b] | 600    | 600                                             | -                                               | -                                               | -                                               | -                                               | -
guarantees [c]                          | 307    | 8                                               | 214                                             | 12                                              | 30                                              | 10                                              | 33
standby letters of credit [d]           | 25     | 24                                              | 1                                               | -                                               | -                                               | -                                               | -
total commercialcommitments             | $ 2732 | $ 632                                           | $ 215                                           | $ 1812                                          | $ 30                                            | $ 10                                            | $ 33

[a] none of the credit facility was used as of december 31 , 2012 .
[b] $ 100 million of the receivables securitization facility was utilized at december 31 , 2012 , which is accounted for as debt .
the full program matures in july 2013 .
[c] includes guaranteed obligations related to our headquarters building , equipment financings , and affiliated operations .
[d] none of the letters of credit were drawn upon as of december 31 , 2012 .
off-balance sheet arrangements guarantees 2013 at december 31 , 2012 , we were contingently liable for $ 307 million in guarantees .
we have recorded a liability of $ 2 million for the fair value of these obligations as of december 31 , 2012 and 2011 .
we entered into these contingent guarantees in the normal course of business , and they include guaranteed obligations related to our headquarters building , equipment financings , and affiliated operations .
the final guarantee expires in 2022 .
we are not aware of any existing event of default that would require us to satisfy these guarantees .
we do not expect that these guarantees will have a material adverse effect on our consolidated financial condition , results of operations , or liquidity .
other matters labor agreements 2013 approximately 86% ( 86 % ) of our 45928 full-time-equivalent employees are represented by 14 major rail unions .
during the year , we concluded the most recent round of negotiations , which began in 2010 , with the ratification of new agreements by several unions that continued negotiating into 2012 .
all of the unions executed similar multi-year agreements that provide for higher employee cost sharing of employee health and welfare benefits and higher wages .
the current agreements will remain in effect until renegotiated under provisions of the railway labor act .
the next round of negotiations will begin in early 2015 .
inflation 2013 long periods of inflation significantly increase asset replacement costs for capital-intensive companies .
as a result , assuming that we replace all operating assets at current price levels , depreciation charges ( on an inflation-adjusted basis ) would be substantially greater than historically reported amounts .
derivative financial instruments 2013 we may use derivative financial instruments in limited instances to assist in managing our overall exposure to fluctuations in interest rates and fuel prices .
we are not a party to leveraged derivatives and , by policy , do not use derivative financial instruments for speculative purposes .
derivative financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged , both at inception and throughout the hedged period .
we formally document the nature and relationships between the hedging instruments and hedged items at inception , as well as our risk-management objectives , strategies for undertaking the various hedge transactions , and method of assessing hedge effectiveness .
changes in the fair market value of derivative financial instruments that do not qualify for hedge accounting are charged to earnings .
we may use swaps , collars , futures , and/or forward contracts to mitigate the risk of adverse movements in interest rates and fuel prices ; however , the use of these derivative financial instruments may limit future benefits from favorable price movements .
market and credit risk 2013 we address market risk related to derivative financial instruments by selecting instruments with value fluctuations that highly correlate with the underlying hedged item .
we manage credit risk related to derivative financial instruments , which is minimal , by requiring high credit standards for counterparties and periodic settlements .
at december 31 , 2012 and 2011 , we were not required to provide collateral , nor had we received collateral , relating to our hedging activities.


we have adequate access to capital markets to meet any foreseeable cash requirements , and we have sufficient financial capacity to satisfy our current liabilities .
cash flows millions 2014 2013 2012 .

cash flowsmillions                     | 2014           | 2013           | 2012
-------------------------------------- | -------------- | -------------- | --------------
cash provided by operating activities  | $ 7385         | $ 6823         | $ 6161
cash used in investing activities      | -4249 ( 4249 ) | -3405 ( 3405 ) | -3633 ( 3633 )
cash used in financing activities      | -2982 ( 2982 ) | -3049 ( 3049 ) | -2682 ( 2682 )
net change in cash and cashequivalents | $ 154          | $ 369          | $ -154 ( 154 )

operating activities higher net income in 2014 increased cash provided by operating activities compared to 2013 , despite higher income tax payments .
2014 income tax payments were higher than 2013 primarily due to higher income , but also because we paid taxes previously deferred by bonus depreciation ( discussed below ) .
higher net income in 2013 increased cash provided by operating activities compared to 2012 .
in addition , we made payments in 2012 for past wages as a result of national labor negotiations , which reduced cash provided by operating activities in 2012 .
lower tax benefits from bonus depreciation ( as discussed below ) partially offset the increases .
federal tax law provided for 100% ( 100 % ) bonus depreciation for qualified investments made during 2011 and 50% ( 50 % ) bonus depreciation for qualified investments made during 2012-2013 .
as a result , the company deferred a substantial portion of its 2011-2013 income tax expense , contributing to the positive operating cash flow in those years .
congress extended 50% ( 50 % ) bonus depreciation for 2014 , but this extension occurred in december and did not have a significant benefit on our income tax payments during 2014 .
investing activities higher capital investments , including the early buyout of the long-term operating lease of our headquarters building for approximately $ 261 million , drove the increase in cash used in investing activities compared to 2013 .
significant investments also were made for new locomotives , freight cars and containers , and capacity and commercial facility projects .
capital investments in 2014 also included $ 99 million for the early buyout of locomotives and freight cars under long-term operating leases , which we exercised due to favorable economic terms and market conditions .
lower capital investments in locomotives and freight cars in 2013 drove the decrease in cash used in investing activities compared to 2012 .
included in capital investments in 2012 was $ 75 million for the early buyout of 165 locomotives under long-term operating and capital leases during the first quarter of 2012 , which we exercised due to favorable economic terms and market conditions.


item 7 .
management 2019s discussion and analysis of financial condition and results of operations the following discussion and analysis is based primarily on the consolidated financial statements of welltower inc .
for the periods presented and should be read together with the notes thereto contained in this annual report on form 10-k .
other important factors are identified in 201citem 1 2014 business 201d and 201citem 1a 2014 risk factors 201d above .
executive summary company overview welltower inc .
( nyse : hcn ) , an s&p 500 company headquartered in toledo , ohio , is driving the transformation of health care infrastructure .
the company invests with leading seniors housing operators , post- acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people 2019s wellness and overall health care experience .
welltowertm , a real estate investment trust ( 201creit 201d ) , owns interests in properties concentrated in major , high-growth markets in the united states , canada and the united kingdom , consisting of seniors housing and post-acute communities and outpatient medical properties .
our capital programs , when combined with comprehensive planning , development and property management services , make us a single-source solution for acquiring , planning , developing , managing , repositioning and monetizing real estate assets .
the following table summarizes our consolidated portfolio for the year ended december 31 , 2016 ( dollars in thousands ) : type of property net operating income ( noi ) ( 1 ) percentage of number of properties .

type of property          | net operating income ( noi ) ( 1 ) | percentage of noi  | number of properties
------------------------- | ---------------------------------- | ------------------ | --------------------
triple-net                | $ 1208860                          | 50.3% ( 50.3 % )   | 631
seniors housing operating | 814114                             | 33.9% ( 33.9 % )   | 420
outpatient medical        | 380264                             | 15.8% ( 15.8 % )   | 262
totals                    | $ 2403238                          | 100.0% ( 100.0 % ) | 1313

( 1 ) excludes our share of investments in unconsolidated entities and non-segment/corporate noi .
entities in which we have a joint venture with a minority partner are shown at 100% ( 100 % ) of the joint venture amount .
business strategy our primary objectives are to protect stockholder capital and enhance stockholder value .
we seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth .
to meet these objectives , we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type , relationship and geographic location .
substantially all of our revenues are derived from operating lease rentals , resident fees and services , and interest earned on outstanding loans receivable .
these items represent our primary sources of liquidity to fund distributions and depend upon the continued ability of our obligors to make contractual rent and interest payments to us and the profitability of our operating properties .
to the extent that our customers/partners experience operating difficulties and become unable to generate sufficient cash to make payments to us , there could be a material adverse impact on our consolidated results of operations , liquidity and/or financial condition .
to mitigate this risk , we monitor our investments through a variety of methods determined by the type of property .
our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property , review of obligor/ partner creditworthiness , property inspections , and review of covenant compliance relating to licensure , real estate taxes , letters of credit and other collateral .
our internal property management division actively manages and monitors the outpatient medical portfolio with a comprehensive process including review of tenant relations , lease expirations , the mix of health service providers , hospital/health system relationships , property performance


recourse and repurchase obligations as discussed in note 3 loan sale and servicing activities and variable interest entities , pnc has sold commercial mortgage , residential mortgage and home equity loans directly or indirectly through securitization and loan sale transactions in which we have continuing involvement .
one form of continuing involvement includes certain recourse and loan repurchase obligations associated with the transferred assets .
commercial mortgage loan recourse obligations we originate , close and service certain multi-family commercial mortgage loans which are sold to fnma under fnma 2019s delegated underwriting and servicing ( dus ) program .
we participated in a similar program with the fhlmc .
under these programs , we generally assume up to a one-third pari passu risk of loss on unpaid principal balances through a loss share arrangement .
at december 31 , 2013 and december 31 , 2012 , the unpaid principal balance outstanding of loans sold as a participant in these programs was $ 11.7 billion and $ 12.8 billion , respectively .
the potential maximum exposure under the loss share arrangements was $ 3.6 billion at december 31 , 2013 and $ 3.9 billion at december 31 , 2012 .
we maintain a reserve for estimated losses based upon our exposure .
the reserve for losses under these programs totaled $ 33 million and $ 43 million as of december 31 , 2013 and december 31 , 2012 , respectively , and is included in other liabilities on our consolidated balance sheet .
if payment is required under these programs , we would not have a contractual interest in the collateral underlying the mortgage loans on which losses occurred , although the value of the collateral is taken into account in determining our share of such losses .
our exposure and activity associated with these recourse obligations are reported in the corporate & institutional banking segment .
table 152 : analysis of commercial mortgage recourse obligations .

in millions                                  | 2013     | 2012
-------------------------------------------- | -------- | --------
january 1                                    | $ 43     | $ 47
reserve adjustments net                      | -9 ( 9 ) | 4
losses 2013 loan repurchases and settlements | -1 ( 1 ) | -8 ( 8 )
december 31                                  | $ 33     | $ 43

residential mortgage loan and home equity repurchase obligations while residential mortgage loans are sold on a non-recourse basis , we assume certain loan repurchase obligations associated with mortgage loans we have sold to investors .
these loan repurchase obligations primarily relate to situations where pnc is alleged to have breached certain origination covenants and representations and warranties made to purchasers of the loans in the respective purchase and sale agreements .
for additional information on loan sales see note 3 loan sale and servicing activities and variable interest entities .
our historical exposure and activity associated with agency securitization repurchase obligations has primarily been related to transactions with fnma and fhlmc , as indemnification and repurchase losses associated with fha and va-insured and uninsured loans pooled in gnma securitizations historically have been minimal .
repurchase obligation activity associated with residential mortgages is reported in the residential mortgage banking segment .
in the fourth quarter of 2013 , pnc reached agreements with both fnma and fhlmc to resolve their repurchase claims with respect to loans sold between 2000 and 2008 .
pnc paid a total of $ 191 million related to these settlements .
pnc 2019s repurchase obligations also include certain brokered home equity loans/lines of credit that were sold to a limited number of private investors in the financial services industry by national city prior to our acquisition of national city .
pnc is no longer engaged in the brokered home equity lending business , and our exposure under these loan repurchase obligations is limited to repurchases of loans sold in these transactions .
repurchase activity associated with brokered home equity loans/lines of credit is reported in the non-strategic assets portfolio segment .
indemnification and repurchase liabilities are initially recognized when loans are sold to investors and are subsequently evaluated by management .
initial recognition and subsequent adjustments to the indemnification and repurchase liability for the sold residential mortgage portfolio are recognized in residential mortgage revenue on the consolidated income statement .
since pnc is no longer engaged in the brokered home equity lending business , only subsequent adjustments are recognized to the home equity loans/lines indemnification and repurchase liability .
these adjustments are recognized in other noninterest income on the consolidated income statement .
214 the pnc financial services group , inc .
2013 form 10-k


the diluted earnings per share calculation excludes stock options , sars , restricted stock and units and performance units and stock that were anti-dilutive .
shares underlying the excluded stock options and sars totaled 10.3 million , 10.2 million and 0.7 million for the years ended december 31 , 2016 , 2015 and 2014 , respectively .
for the years ended december 31 , 2016 and 2015 , respectively , 4.5 million and 5.3 million shares of restricted stock and restricted stock units and performance units and performance stock were excluded .
10 .
supplemental cash flow information net cash paid for interest and income taxes was as follows for the years ended december 31 , 2016 , 2015 and 2014 ( in thousands ) : .

                                     | 2016               | 2015     | 2014
------------------------------------ | ------------------ | -------- | --------
interest net of capitalized interest | $ 252030           | $ 222088 | $ 197383
income taxes net of refunds received | $ -39293 ( 39293 ) | $ 41108  | $ 342741

eog's accrued capital expenditures at december 31 , 2016 , 2015 and 2014 were $ 388 million , $ 416 million and $ 972 million , respectively .
non-cash investing activities for the year ended december 31 , 2016 , included $ 3834 million in non-cash additions to eog's oil and gas properties related to the yates transaction ( see note 17 ) .
non-cash investing activities for the year ended december 31 , 2014 included non-cash additions of $ 5 million to eog's oil and gas properties as a result of property exchanges .
11 .
business segment information eog's operations are all crude oil and natural gas exploration and production related .
the segment reporting topic of the asc establishes standards for reporting information about operating segments in annual financial statements .
operating segments are defined as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker , or decision-making group , in deciding how to allocate resources and in assessing performance .
eog's chief operating decision-making process is informal and involves the chairman of the board and chief executive officer and other key officers .
this group routinely reviews and makes operating decisions related to significant issues associated with each of eog's major producing areas in the united states , trinidad , the united kingdom and china .
for segment reporting purposes , the chief operating decision maker considers the major united states producing areas to be one operating segment.


put options we currently have outstanding put option agreements with other shareholders of our air products san fu company , ltd .
and indura s.a .
subsidiaries .
the put options give the shareholders the right to sell stock in the subsidiaries based on pricing terms in the agreements .
refer to note 17 , commitments and contingencies , to the consolidated financial statements for additional information .
due to the uncertainty of whether these options would be exercised and the related timing , we excluded the potential payments from the contractual obligations table .
pension benefits we sponsor defined benefit pension plans that cover a substantial portion of our worldwide employees .
the principal defined benefit pension plans 2014the u.s .
salaried pension plan and the u.k .
pension plan 2014were closed to new participants in 2005 and were replaced with defined contribution plans .
over the long run , the shift to defined contribution plans is expected to reduce volatility of both plan expense and contributions .
for 2013 , the fair market value of pension plan assets for our defined benefit plans as of the measurement date increased to $ 3800.8 from $ 3239.1 in 2012 .
the projected benefit obligation for these plans as of the measurement date was $ 4394.0 and $ 4486.5 in 2013 and 2012 , respectively .
refer to note 16 , retirement benefits , to the consolidated financial statements for comprehensive and detailed disclosures on our postretirement benefits .
pension expense .

                                                                     | 2013           | 2012           | 2011
-------------------------------------------------------------------- | -------------- | -------------- | --------------
pension expense                                                      | $ 169.7        | $ 120.4        | $ 114.1
special terminations settlements and curtailments ( included above ) | 19.8           | 8.2            | 1.3
weighted average discount rate                                       | 4.0% ( 4.0 % ) | 5.0% ( 5.0 % ) | 5.0% ( 5.0 % )
weighted average expected rate of return on plan assets              | 7.7% ( 7.7 % ) | 8.0% ( 8.0 % ) | 8.0% ( 8.0 % )
weighted average expected rate of compensation increase              | 3.8% ( 3.8 % ) | 3.9% ( 3.9 % ) | 4.0% ( 4.0 % )

2013 vs .
2012 the increase in pension expense , excluding special items , was primarily attributable to the 100 bp decrease in weighted average discount rate , resulting in higher amortization of actuarial losses .
the increase was partially offset by a higher expected return on plan assets and contributions in 2013 .
special items of $ 19.8 primarily included $ 12.4 for pension settlement losses and $ 6.9 for special termination benefits relating to the 2013 business restructuring and cost reduction plan .
2012 vs .
2011 pension expense in 2012 , excluding special items , was comparable to 2011 expense as a result of no change in the weighted average discount rate from year to year .
2014 outlook pension expense is estimated to be approximately $ 140 to $ 145 , excluding special items , in 2014 , a decrease of $ 5 to $ 10 from 2013 , resulting primarily from an increase in discount rates , partially offset by unfavorable impacts associated with changes in mortality and inflation assumptions .
pension settlement losses of $ 10 to $ 25 are expected , dependent on the timing of retirements .
in 2014 , pension expense will include approximately $ 118 for amortization of actuarial losses compared to $ 143 in 2013 .
net actuarial gains of $ 370.4 were recognized in 2013 , resulting primarily from an approximately 65 bp increase in the weighted average discount rate as well as actual asset returns above expected returns .
actuarial gains/losses are amortized into pension expense over prospective periods to the extent they are not offset by future gains or losses .
future changes in the discount rate and actual returns on plan assets , different from expected returns , would impact the actuarial gains/losses and resulting amortization in years beyond 2014 .
pension funding pension funding includes both contributions to funded plans and benefit payments for unfunded plans , which are primarily non-qualified plans .
with respect to funded plans , our funding policy is that contributions , combined with appreciation and earnings , will be sufficient to pay benefits without creating unnecessary surpluses .
in addition , we make contributions to satisfy all legal funding requirements while managing our capacity to benefit from tax deductions attributable to plan contributions .
with the assistance of third party actuaries , we analyze the liabilities and demographics of each plan , which help guide the level of contributions .
during 2013 and 2012 , our cash contributions to funded plans and benefit payments for unfunded plans were $ 300.8 and $ 76.4 , respectively .
contributions for 2013 include voluntary contributions for u.s .
plans of $ 220.0.


although many clients use both active and passive strategies , the application of these strategies differs greatly .
for example , clients may use index products to gain exposure to a market or asset class pending reallocation to an active manager .
this has the effect of increasing turnover of index aum .
in addition , institutional non-etp index assignments tend to be very large ( multi- billion dollars ) and typically reflect low fee rates .
this has the potential to exaggerate the significance of net flows in institutional index products on blackrock 2019s revenues and earnings .
equity year-end 2012 equity aum of $ 1.845 trillion increased by $ 285.4 billion , or 18% ( 18 % ) , from the end of 2011 , largely due to flows into regional , country-specific and global mandates and the effect of higher market valuations .
equity aum growth included $ 54.0 billion in net new business and $ 3.6 billion in new assets related to the acquisition of claymore .
net new business of $ 54.0 billion was driven by net inflows of $ 53.0 billion and $ 19.1 billion into ishares and non-etp index accounts , respectively .
passive inflows were offset by active net outflows of $ 18.1 billion , with net outflows of $ 10.0 billion and $ 8.1 billion from fundamental and scientific active equity products , respectively .
passive strategies represented 84% ( 84 % ) of equity aum with the remaining 16% ( 16 % ) in active mandates .
institutional investors represented 62% ( 62 % ) of equity aum , while ishares , and retail and hnw represented 29% ( 29 % ) and 9% ( 9 % ) , respectively .
at year-end 2012 , 63% ( 63 % ) of equity aum was managed for clients in the americas ( defined as the united states , caribbean , canada , latin america and iberia ) compared with 28% ( 28 % ) and 9% ( 9 % ) managed for clients in emea and asia-pacific , respectively .
blackrock 2019s effective fee rates fluctuate due to changes in aum mix .
approximately half of blackrock 2019s equity aum is tied to international markets , including emerging markets , which tend to have higher fee rates than similar u.s .
equity strategies .
accordingly , fluctuations in international equity markets , which do not consistently move in tandem with u.s .
markets , may have a greater impact on blackrock 2019s effective equity fee rates and revenues .
fixed income fixed income aum ended 2012 at $ 1.259 trillion , rising $ 11.6 billion , or 1% ( 1 % ) , relative to december 31 , 2011 .
growth in aum reflected $ 43.3 billion in net new business , excluding the two large previously mentioned low-fee outflows , $ 75.4 billion in market and foreign exchange gains and $ 3.0 billion in new assets related to claymore .
net new business was led by flows into domestic specialty and global bond mandates , with net inflows of $ 28.8 billion , $ 13.6 billion and $ 3.1 billion into ishares , non-etp index and model-based products , respectively , partially offset by net outflows of $ 2.2 billion from fundamental strategies .
fixed income aum was split between passive and active strategies with 48% ( 48 % ) and 52% ( 52 % ) , respectively .
institutional investors represented 74% ( 74 % ) of fixed income aum while ishares and retail and hnw represented 15% ( 15 % ) and 11% ( 11 % ) , respectively .
at year-end 2012 , 59% ( 59 % ) of fixed income aum was managed for clients in the americas compared with 33% ( 33 % ) and 8% ( 8 % ) managed for clients in emea and asia- pacific , respectively .
multi-asset class component changes in multi-asset class aum ( dollar amounts in millions ) 12/31/2011 net new business acquired market /fx app ( dep ) 12/31/2012 .

( dollar amounts in millions ) | 12/31/2011 | net new business | net acquired | market /fx app ( dep ) | 12/31/2012
------------------------------ | ---------- | ---------------- | ------------ | ---------------------- | ----------
asset allocation               | $ 126067   | $ 1575           | $ 78         | $ 12440                | $ 140160
target date/risk               | 49063      | 14526            | 2014         | 6295                   | 69884
fiduciary                      | 50040      | -284 ( 284 )     | 2014         | 7948                   | 57704
multi-asset                    | $ 225170   | $ 15817          | $ 78         | $ 26683                | $ 267748

multi-asset class aum totaled $ 267.7 billion at year-end 2012 , up 19% ( 19 % ) , or $ 42.6 billion , reflecting $ 15.8 billion in net new business and $ 26.7 billion in portfolio valuation gains .
blackrock 2019s multi-asset class team manages a variety of bespoke mandates for a diversified client base that leverages our broad investment expertise in global equities , currencies , bonds and commodities , and our extensive risk management capabilities .
investment solutions might include a combination of long-only portfolios and alternative investments as well as tactical asset allocation overlays .
at december 31 , 2012 , institutional investors represented 66% ( 66 % ) of multi-asset class aum , while retail and hnw accounted for the remaining aum .
additionally , 58% ( 58 % ) of multi-asset class aum is managed for clients based in the americas with 37% ( 37 % ) and 5% ( 5 % ) managed for clients in emea and asia-pacific , respectively .
flows reflected ongoing institutional demand for our advice in an increasingly


management 2019s discussion and analysis of financial condition and results of operations ( continued ) liquidity and capital resources snap-on 2019s growth has historically been funded by a combination of cash provided by operating activities and debt financing .
snap-on believes that its cash from operations and collections of finance receivables , coupled with its sources of borrowings and available cash on hand , are sufficient to fund its currently anticipated requirements for payments of interest and dividends , new loans originated by our financial services businesses , capital expenditures , working capital , restructuring activities , the funding of pension plans , and funding for additional share repurchases and acquisitions , if any .
due to snap-on 2019s credit rating over the years , external funds have been available at an acceptable cost .
as of the close of business on february 8 , 2013 , snap-on 2019s long-term debt and commercial paper were rated , respectively , baa1 and p-2 by moody 2019s investors service ; a- and a-2 by standard & poor 2019s ; and a- and f2 by fitch ratings .
snap-on believes that its current credit arrangements are sound and that the strength of its balance sheet affords the company the financial flexibility to respond to both internal growth opportunities and those available through acquisitions .
however , snap-on cannot provide any assurances of the availability of future financing or the terms on which it might be available , or that its debt ratings may not decrease .
the following discussion focuses on information included in the accompanying consolidated balance sheets .
as of 2012 year end , working capital ( current assets less current liabilities ) of $ 1079.8 million increased $ 132.9 million from $ 946.9 million at 2011 year end .
the following represents the company 2019s working capital position as of 2012 and 2011 year end : ( amounts in millions ) 2012 2011 .

( amounts in millions )                      | 2012             | 2011
-------------------------------------------- | ---------------- | ----------------
cash and cash equivalents                    | $ 214.5          | $ 185.6
trade and other accounts receivable 2013 net | 497.9            | 463.5
finance receivables 2013 net                 | 323.1            | 277.2
contract receivables 2013 net                | 62.7             | 49.7
inventories 2013 net                         | 404.2            | 386.4
other current assets                         | 166.6            | 168.3
total current assets                         | 1669.0           | 1530.7
notes payable                                | -5.2 ( 5.2 )     | -16.2 ( 16.2 )
accounts payable                             | -142.5 ( 142.5 ) | -124.6 ( 124.6 )
other current liabilities                    | -441.5 ( 441.5 ) | -443.0 ( 443.0 )
total current liabilities                    | -589.2 ( 589.2 ) | -583.8 ( 583.8 )
working capital                              | $ 1079.8         | $ 946.9

cash and cash equivalents of $ 214.5 million as of 2012 year end compared to cash and cash equivalents of $ 185.6 million at 2011 year end .
the $ 28.9 million increase in cash and cash equivalents includes the impacts of ( i ) $ 329.3 million of cash generated from operations , net of $ 73.0 million of cash contributions ( including $ 54.7 million of discretionary contributions ) to the company 2019s domestic pension plans ; ( ii ) $ 445.5 million of cash from collections of finance receivables ; ( iii ) $ 46.8 million of proceeds from stock purchase and option plan exercises ; and ( iv ) $ 27.0 million of cash proceeds from the sale of a non-strategic equity investment at book value .
these increases in cash and cash equivalents were partially offset by ( i ) the funding of $ 569.6 million of new finance originations ; ( ii ) dividend payments of $ 81.5 million ; ( iii ) the funding of $ 79.4 million of capital expenditures ; and ( iv ) the repurchase of 1180000 shares of the company 2019s common stock for $ 78.1 million .
of the $ 214.5 million of cash and cash equivalents as of 2012 year end , $ 81.4 million was held outside of the united states .
snap-on considers these non-u.s .
funds as permanently invested in its foreign operations to ( i ) provide adequate working capital ; ( ii ) satisfy various regulatory requirements ; and/or ( iii ) take advantage of business expansion opportunities as they arise ; as such , the company does not presently expect to repatriate these funds to fund its u.s .
operations or obligations .
the repatriation of cash from certain foreign subsidiaries could have adverse net tax consequences on the company should snap-on be required to pay and record u.s .
income taxes and foreign withholding taxes on funds that were previously considered permanently invested .
alternatively , the repatriation of such cash from certain other foreign subsidiaries could result in favorable net tax consequences for the company .
snap-on periodically evaluates opportunities to repatriate certain foreign cash amounts to the extent that it does not incur additional unfavorable net tax consequences .
44 snap-on incorporated


illumina , inc .
notes to consolidated financial statements 2014 ( continued ) advertising costs the company expenses advertising costs as incurred .
advertising costs were approximately $ 440000 for 2003 , $ 267000 for 2002 and $ 57000 for 2001 .
income taxes a deferred income tax asset or liability is computed for the expected future impact of differences between the financial reporting and tax bases of assets and liabilities , as well as the expected future tax benefit to be derived from tax loss and credit carryforwards .
deferred income tax expense is generally the net change during the year in the deferred income tax asset or liability .
valuation allowances are established when realizability of deferred tax assets is uncertain .
the effect of tax rate changes is reflected in tax expense during the period in which such changes are enacted .
foreign currency translation the functional currencies of the company 2019s wholly owned subsidiaries are their respective local currencies .
accordingly , all balance sheet accounts of these operations are translated to u.s .
dollars using the exchange rates in effect at the balance sheet date , and revenues and expenses are translated using the average exchange rates in effect during the period .
the gains and losses from foreign currency translation of these subsidiaries 2019 financial statements are recorded directly as a separate component of stockholders 2019 equity under the caption 2018 2018accumulated other comprehensive income . 2019 2019 stock-based compensation at december 28 , 2003 , the company has three stock-based employee and non-employee director compensation plans , which are described more fully in note 5 .
as permitted by sfas no .
123 , accounting for stock-based compensation , the company accounts for common stock options granted , and restricted stock sold , to employees , founders and directors using the intrinsic value method and , thus , recognizes no compensation expense for options granted , or restricted stock sold , with exercise prices equal to or greater than the fair value of the company 2019s common stock on the date of the grant .
the company has recorded deferred stock compensation related to certain stock options , and restricted stock , which were granted prior to the company 2019s initial public offering with exercise prices below estimated fair value ( see note 5 ) , which is being amortized on an accelerated amortiza- tion methodology in accordance with financial accounting standards board interpretation number ( 2018 2018fin 2019 2019 ) 28 .
pro forma information regarding net loss is required by sfas no .
123 and has been determined as if the company had accounted for its employee stock options and employee stock purchases under the fair value method of that statement .
the fair value for these options was estimated at the dates of grant using the fair value option pricing model ( black scholes ) with the following weighted-average assumptions for 2003 , 2002 and 2001 : year ended year ended year ended december 28 , december 29 , december 30 , 2003 2002 2001 weighted average risk-free interest rate******* 3.03% ( 3.03 % ) 3.73% ( 3.73 % ) 4.65% ( 4.65 % ) expected dividend yield********************* 0% ( 0 % ) 0% ( 0 % ) 0% ( 0 % ) weighted average volatility ****************** 103% ( 103 % ) 104% ( 104 % ) 119% ( 119 % ) estimated life ( in years ) ********************** 5 5 5 .

                                               | year ended december 28 2003 | year ended december 29 2002 | year ended december 30 2001
---------------------------------------------- | --------------------------- | --------------------------- | ---------------------------
weighted average risk-free interest rate       | 3.03% ( 3.03 % )            | 3.73% ( 3.73 % )            | 4.65% ( 4.65 % )
expected dividend yield                        | 0% ( 0 % )                  | 0% ( 0 % )                  | 0% ( 0 % )
weighted average volatility                    | 103% ( 103 % )              | 104% ( 104 % )              | 119% ( 119 % )
estimated life ( in years )                    | 5                           | 5                           | 5
weighted average fair value of options granted | $ 3.31                      | $ 4.39                      | $ 7.51


average age ( yrs. ) highway revenue equipment owned leased total .

highway revenue equipment       | owned | leased | total | averageage ( yrs. )
------------------------------- | ----- | ------ | ----- | -------------------
containers                      | 26629 | 28306  | 54935 | 7.1
chassis                         | 15182 | 25951  | 41133 | 8.9
total highway revenue equipment | 41811 | 54257  | 96068 | n/a

capital expenditures our rail network requires significant annual capital investments for replacement , improvement , and expansion .
these investments enhance safety , support the transportation needs of our customers , and improve our operational efficiency .
additionally , we add new locomotives and freight cars to our fleet to replace older , less efficient equipment , to support growth and customer demand , and to reduce our impact on the environment through the acquisition of more fuel-efficient and low-emission locomotives .
2014 capital program 2013 during 2014 , our capital program totaled $ 4.1 billion .
( see the cash capital expenditures table in management 2019s discussion and analysis of financial condition and results of operations 2013 liquidity and capital resources 2013 financial condition , item 7. ) 2015 capital plan 2013 in 2015 , we expect our capital plan to be approximately $ 4.3 billion , which will include expenditures for ptc of approximately $ 450 million and may include non-cash investments .
we may revise our 2015 capital plan if business conditions warrant or if new laws or regulations affect our ability to generate sufficient returns on these investments .
( see discussion of our 2015 capital plan in management 2019s discussion and analysis of financial condition and results of operations 2013 2015 outlook , item 7. ) equipment encumbrances 2013 equipment with a carrying value of approximately $ 2.8 billion and $ 2.9 billion at december 31 , 2014 , and 2013 , respectively served as collateral for capital leases and other types of equipment obligations in accordance with the secured financing arrangements utilized to acquire or refinance such railroad equipment .
as a result of the merger of missouri pacific railroad company ( mprr ) with and into uprr on january 1 , 1997 , and pursuant to the underlying indentures for the mprr mortgage bonds , uprr must maintain the same value of assets after the merger in order to comply with the security requirements of the mortgage bonds .
as of the merger date , the value of the mprr assets that secured the mortgage bonds was approximately $ 6.0 billion .
in accordance with the terms of the indentures , this collateral value must be maintained during the entire term of the mortgage bonds irrespective of the outstanding balance of such bonds .
environmental matters 2013 certain of our properties are subject to federal , state , and local laws and regulations governing the protection of the environment .
( see discussion of environmental issues in business 2013 governmental and environmental regulation , item 1 , and management 2019s discussion and analysis of financial condition and results of operations 2013 critical accounting policies 2013 environmental , item 7. ) item 3 .
legal proceedings from time to time , we are involved in legal proceedings , claims , and litigation that occur in connection with our business .
we routinely assess our liabilities and contingencies in connection with these matters based upon the latest available information and , when necessary , we seek input from our third-party advisors when making these assessments .
consistent with sec rules and requirements , we describe below material pending legal proceedings ( other than ordinary routine litigation incidental to our business ) , material proceedings known to be contemplated by governmental authorities , other proceedings arising under federal , state , or local environmental laws and regulations ( including governmental proceedings involving potential fines , penalties , or other monetary sanctions in excess of $ 100000 ) , and such other pending matters that we may determine to be appropriate.