2322 t .
r o w e p r i c e g r o u p a n n u a l r e p o r t 2 0 1 1 c o n t r a c t u a l o b l i g at i o n s the following table presents a summary of our future obligations ( in a0millions ) under the terms of existing operating leases and other contractual cash purchase commitments at december 31 , 2011 .
other purchase commitments include contractual amounts that will be due for the purchase of goods or services to be used in our operations and may be cancelable at earlier times than those indicated , under certain conditions that may involve termination fees .
because these obligations are generally of a normal recurring nature , we expect that we will fund them from future cash flows from operations .
the information presented does not include operating expenses or capital expenditures that will be committed in the normal course of operations in 2012 and future years .
the information also excludes the $ 4.7 a0million of uncertain tax positions discussed in note 9 to our consolidated financial statements because it is not possible to estimate the time period in which a payment might be made to the tax authorities. .

                               | total | 2012  | 2013-14 | 2015-16 | later
------------------------------ | ----- | ----- | ------- | ------- | -----
noncancelable operating leases | $ 185 | $ 31  | $ 63    | $ 57    | $ 34
other purchase commitments     | 160   | 112   | 38      | 10      | -
total                          | $ 345 | $ 143 | $ 101   | $ 67    | $ 34

we also have outstanding commitments to fund additional contributions to investment partnerships in which we have an existing investment totaling $ 42.5 a0million at december 31 , 2011 .
c r i t i c a l a c c o u n t i n g p o l i c i e s the preparation of financial statements often requires the selection of specific accounting methods and policies from among several acceptable alternatives .
further , significant estimates and judgments may be required in selecting and applying those methods and policies in the recognition of the assets and liabilities in our balance sheet , the revenues and expenses in our statement of income , and the information that is contained in our significant accounting policies and notes to consolidated financial statements .
making these estimates and judgments requires the analysis of information concerning events that may not yet be complete and of facts and circumstances that may change over time .
accordingly , actual amounts or future results can differ materially from those estimates that we include currently in our consolidated financial statements , significant accounting policies , and notes .
we present those significant accounting policies used in the preparation of our consolidated financial statements as an integral part of those statements within this 2011 annual report .
in the following discussion , we highlight and explain further certain of those policies that are most critical to the preparation and understanding of our financial statements .
other than temporary impairments of available-for-sale securities .
we generally classify our investment holdings in sponsored mutual funds and the debt securities held for investment by our savings bank subsidiary as available-for-sale .
at the end of each quarter , we mark the carrying amount of each investment holding to fair value and recognize an unrealized gain or loss as a component of comprehensive income within the statement of stockholders 2019 equity .
we next review each individual security position that has an unrealized loss or impairment to determine if that impairment is other than temporary .
in determining whether a mutual fund holding is other than temporarily impaired , we consider many factors , including the duration of time it has existed , the severity of the impairment , any subsequent changes in value , and our intent and ability to hold the security for a period of time sufficient for an anticipated recovery in fair value .
subject to the other considerations noted above , with respect to duration of time , we believe a mutual fund holding with an unrealized loss that has persisted daily throughout the six months between quarter-ends is generally presumed to have an other than temporary impairment .
we may also recognize an other than temporary loss of less than six months in our statement of income if the particular circumstances of the underlying investment do not warrant our belief that a near-term recovery is possible .
an impaired debt security held by our savings bank subsidiary is considered to have an other than temporary loss that we will recognize in our statement of income if the impairment is caused by a change in credit quality that affects our ability to recover our amortized cost or if we intend to sell the security or believe that it is more likely than not that we will be required to sell the security before recovering cost .
minor impairments of 5% ( 5 % ) or less are generally considered temporary .
other than temporary impairments of equity method investments .
we evaluate our equity method investments , including our investment in uti , for impairment when events or changes in circumstances indicate that the carrying value of the investment exceeds its fair value , and the decline in fair value is other than temporary .
goodwill .
we internally conduct , manage and report our operations as one investment advisory business .
we do not have distinct operating segments or components that separately constitute a business .
accordingly , we attribute goodwill to a single reportable business segment and reporting unit 2014our investment advisory business .
we evaluate the carrying amount of goodwill in our balance sheet for possible impairment on an annual basis in the third quarter of each year using a fair value approach .
goodwill would be considered impaired whenever our historical carrying amount exceeds the fair value of our investment advisory business .
our annual testing has demonstrated that the fair value of our investment advisory business ( our market capitalization ) exceeds our carrying amount ( our stockholders 2019 equity ) and , therefore , no impairment exists .
should we reach a different conclusion in the future , additional work would be performed to ascertain the amount of the non-cash impairment charge to be recognized .
we must also perform impairment testing at other times if an event or circumstance occurs indicating that it is more likely than not that an impairment has been incurred .
the maximum future impairment of goodwill that we could incur is the amount recognized in our balance sheet , $ 665.7 a0million .
stock options .
we recognize stock option-based compensation expense in our consolidated statement of income using a fair value based method .
fair value methods use a valuation model for shorter-term , market-traded financial instruments to theoretically value stock option grants even though they are not available for trading and are of longer duration .
the black- scholes option-pricing model that we use includes the input of certain variables that are dependent on future expectations , including the expected lives of our options from grant date to exercise date , the volatility of our underlying common shares in the market over that time period , and the rate of dividends that we will pay during that time .
our estimates of these variables are made for the purpose of using the valuation model to determine an expense for each reporting period and are not subsequently adjusted .
unlike most of our expenses , the resulting charge to earnings using a fair value based method is a non-cash charge that is never measured by , or adjusted based on , a cash outflow .
provision for income taxes .
after compensation and related costs , our provision for income taxes on our earnings is our largest annual expense .
we operate in numerous states and countries through our various subsidiaries , and must allocate our income , expenses , and earnings under the various laws and regulations of each of these taxing jurisdictions .
accordingly , our provision for income taxes represents our total estimate of the liability that we have incurred in doing business each year in all of our locations .
annually , we file tax returns that represent our filing positions with each jurisdiction and settle our return liabilities .
each jurisdiction has the right to audit those returns and may take different positions with respect to income and expense allocations and taxable earnings determinations .
from time to time , we may also provide for estimated liabilities associated with uncertain tax return filing positions that are subject to , or in the process of , being audited by various tax authorities .
because the determination of our annual provision is subject to judgments and estimates , it is likely that actual results will vary from those recognized in our financial statements .
as a result , we recognize additions to , or reductions of , income tax expense during a reporting period that pertain to prior period provisions as our estimated liabilities are revised and actual tax returns and tax audits are settled .
we recognize any such prior period adjustment in the discrete quarterly period in which it is determined .
n e w ly i s s u e d b u t n o t y e t a d o p t e d a c c o u n t i n g g u i d a n c e in may 2011 , the fasb issued amended guidance clarifying how to measure and disclose fair value .
we do not believe the adoption of such amended guidance on january 1 , 2012 , will have a significant effect on our consolidated financial statements .
we have also considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our consolidated statements , including that which we have not yet adopted .
we do not believe that any such guidance will have a material effect on our financial position or results of operation.


fair value of financial instruments : the company 2019s financial instruments include cash and cash equivalents , marketable securities , accounts receivable , certain investments , accounts payable , borrowings , and derivative contracts .
the fair values of cash and cash equivalents , accounts receivable , accounts payable , and short-term borrowings and current portion of long-term debt approximated carrying values because of the short-term nature of these instruments .
available-for-sale marketable securities and investments , in addition to certain derivative instruments , are recorded at fair values as indicated in the preceding disclosures .
for its long-term debt the company utilized third-party quotes to estimate fair values ( classified as level 2 ) .
information with respect to the carrying amounts and estimated fair values of these financial instruments follow: .

( millions )                             | december 31 2012 carrying value | december 31 2012 fair value | december 31 2012 carrying value | fair value
---------------------------------------- | ------------------------------- | --------------------------- | ------------------------------- | ----------
long-term debt excluding current portion | $ 4916                          | $ 5363                      | $ 4484                          | $ 5002

the fair values reflected above consider the terms of the related debt absent the impacts of derivative/hedging activity .
the carrying amount of long-term debt referenced above is impacted by certain fixed-to-floating interest rate swaps that are designated as fair value hedges and by the designation of fixed rate eurobond securities issued by the company as hedging instruments of the company 2019s net investment in its european subsidiaries .
3m 2019s fixed-rate bonds were trading at a premium at december 31 , 2012 and 2011 due to the low interest rates and tightening of 3m 2019s credit spreads.


f0b7 free cash flow 2013 cash generated by operating activities totaled $ 6.2 billion , reduced by $ 3.6 billion for cash used in investing activities and a 37% ( 37 % ) increase in dividends paid , yielding free cash flow of $ 1.4 billion .
free cash flow is defined as cash provided by operating activities ( adjusted for the reclassification of our receivables securitization facility ) , less cash used in investing activities and dividends paid .
free cash flow is not considered a financial measure under accounting principles generally accepted in the u.s .
( gaap ) by sec regulation g and item 10 of sec regulation s-k and may not be defined and calculated by other companies in the same manner .
we believe free cash flow is important to management and investors in evaluating our financial performance and measures our ability to generate cash without additional external financings .
free cash flow should be considered in addition to , rather than as a substitute for , cash provided by operating activities .
the following table reconciles cash provided by operating activities ( gaap measure ) to free cash flow ( non-gaap measure ) : millions 2012 2011 2010 .

millions                                                                                | 2012           | 2011           | 2010
----------------------------------------------------------------------------------------- | -------------- | -------------- | --------------
cash provided by operating activities                                                     | $ 6161         | $ 5873         | $ 4105
receivables securitization facility [a]                                                   | -              | -              | 400
cash provided by operating activities adjusted for the receivables securitizationfacility | 6161           | 5873           | 4505
cash used in investing activities                                                         | -3633 ( 3633 ) | -3119 ( 3119 ) | -2488 ( 2488 )
dividends paid                                                                            | -1146 ( 1146 ) | -837 ( 837 )   | -602 ( 602 )
free cash flow                                                                            | $ 1382         | $ 1917         | $ 1415

[a] effective january 1 , 2010 , a new accounting standard required us to account for receivables transferred under our receivables securitization facility as secured borrowings in our consolidated statements of financial position and as financing activities in our consolidated statements of cash flows .
the receivables securitization facility is included in our free cash flow calculation to adjust cash provided by operating activities as though our receivables securitization facility had been accounted for under the new accounting standard for all periods presented .
2013 outlook f0b7 safety 2013 operating a safe railroad benefits our employees , our customers , our shareholders , and the communities we serve .
we will continue using a multi-faceted approach to safety , utilizing technology , risk assessment , quality control , training and employee engagement , and targeted capital investments .
we will continue using and expanding the deployment of total safety culture throughout our operations , which allows us to identify and implement best practices for employee and operational safety .
derailment prevention and the reduction of grade crossing incidents are critical aspects of our safety programs .
we will continue our efforts to increase rail defect detection ; improve or close crossings ; and educate the public and law enforcement agencies about crossing safety through a combination of our own programs ( including risk assessment strategies ) , various industry programs and local community activities across our network .
f0b7 network operations 2013 we will continue focusing on our six critical initiatives to improve safety , service and productivity during 2013 .
we are seeing solid contributions from reducing variability , continuous improvements , and standard work .
resource agility allows us to respond quickly to changing market conditions and network disruptions from weather or other events .
the railroad continues to benefit from capital investments that allow us to build capacity for growth and harden our infrastructure to reduce failure .
f0b7 fuel prices 2013 uncertainty about the economy makes projections of fuel prices difficult .
we again could see volatile fuel prices during the year , as they are sensitive to global and u.s .
domestic demand , refining capacity , geopolitical events , weather conditions and other factors .
to reduce the impact of fuel price on earnings , we will continue seeking cost recovery from our customers through our fuel surcharge programs and expanding our fuel conservation efforts .
f0b7 capital plan 2013 in 2013 , we plan to make total capital investments of approximately $ 3.6 billion , including expenditures for positive train control ( ptc ) , which may be revised if business conditions warrant or if new laws or regulations affect our ability to generate sufficient returns on these investments .
( see further discussion in this item 7 under liquidity and capital resources 2013 capital plan. )


except for long-term debt , the carrying amounts of the company 2019s other financial instruments are measured at fair value or approximate fair value due to the short-term nature of these instruments .
asset retirement obligations 2014the company records all known asset retirement obligations within other current liabilities for which the liability 2019s fair value can be reasonably estimated , including certain asbestos removal , asset decommissioning and contractual lease restoration obligations .
the changes in the asset retirement obligation carrying amounts during 2011 , 2010 and 2009 were as follows : ( $ in millions ) retirement obligations .

( $ in millions )                                          | asset retirement obligations
---------------------------------------------------------- | ----------------------------
balance at january 1 2009                                  | $ 3
accretion expense                                          | 0
payment of asset retirement obligation                     | 0
balance at december 31 2009                                | 3
obligation relating to the future retirement of a facility | 17
accretion expense                                          | 0
payment of asset retirement obligation                     | 0
balance at december 31 2010                                | 20
obligation relating to the future retirement of a facility | 5
accretion expense                                          | 0
payment of asset retirement obligation                     | 0
balance at december 31 2011                                | $ 25

the company also has known conditional asset retirement obligations related to assets currently in use , such as certain asbestos remediation and asset decommissioning activities to be performed in the future , that were not reasonably estimable as of december 31 , 2011 and 2010 , due to insufficient information about the timing and method of settlement of the obligation .
accordingly , the fair value of these obligations has not been recorded in the consolidated financial statements .
environmental remediation and/or asset decommissioning of the relevant facilities may be required when the company ceases to utilize these facilities .
in addition , there may be conditional environmental asset retirement obligations that the company has not yet discovered .
income taxes 2014income tax expense and other income tax related information contained in the financial statements for periods before the spin-off are presented as if the company filed its own tax returns on a stand-alone basis , while similar information for periods after the spin-off reflect the company 2019s positions to be filed in its own tax returns in the future .
income tax expense and other related information are based on the prevailing statutory rates for u.s .
federal income taxes and the composite state income tax rate for the company for each period presented .
state and local income and franchise tax provisions are allocable to contracts in process and , accordingly , are included in general and administrative expenses .
deferred income taxes are recorded when revenues and expenses are recognized in different periods for financial statement purposes than for tax return purposes .
deferred tax asset or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect .
determinations of the expected realizability of deferred tax assets and the need for any valuation allowances against these deferred tax assets were evaluated based upon the stand-alone tax attributes of the company , and an $ 18 million valuation allowance was deemed necessary as of december 31 , 2011 .
no valuation allowance was deemed necessary as of december 31 , 2010 .
uncertain tax positions meeting the more-likely-than-not recognition threshold , based on the merits of the position , are recognized in the financial statements .
we recognize the amount of tax benefit that is greater than 50% ( 50 % ) likely to be realized upon ultimate settlement with the related tax authority .
if a tax position does not meet the minimum statutory threshold to avoid payment of penalties , we recognize an expense for the amount of the penalty in the period the tax position is claimed or expected to be claimed in our tax return .
penalties , if probable and reasonably estimable , are recognized as a component of income tax expense .
we also recognize accrued interest related to uncertain tax positions in income tax expense .
the timing and amount of accrued interest is determined by the applicable tax law associated with an underpayment of income taxes .
see note 12 : income taxes .
under existing gaap , changes in accruals associated with uncertainties are recorded in earnings in the period they are determined.


( $ 66 million net-of-tax ) as a result of customer credits to be realized by electric customers of entergy louisiana , consistent with the terms of the stipulated settlement in the business combination proceeding .
see note 2 to the financial statements for further discussion of the business combination and customer credits .
results of operations for 2015 also include the sale in december 2015 of the 583 mw rhode island state energy center for a realized gain of $ 154 million ( $ 100 million net-of-tax ) on the sale and the $ 77 million ( $ 47 million net-of-tax ) write-off and regulatory charges to recognize that a portion of the assets associated with the waterford 3 replacement steam generator project is no longer probable of recovery .
see note 14 to the financial statements for further discussion of the rhode island state energy center sale .
see note 2 to the financial statements for further discussion of the waterford 3 replacement steam generator prudence review proceeding .
net revenue utility following is an analysis of the change in net revenue comparing 2016 to 2015 .
amount ( in millions ) .

                                                | amount ( in millions )
----------------------------------------------- | ----------------------
2015 net revenue                                | $ 5829
retail electric price                           | 289
louisiana business combination customer credits | 107
volume/weather                                  | 14
louisiana act 55 financing savings obligation   | -17 ( 17 )
other                                           | -43 ( 43 )
2016 net revenue                                | $ 6179

the retail electric price variance is primarily due to : 2022 an increase in base rates at entergy arkansas , as approved by the apsc .
the new rates were effective february 24 , 2016 and began billing with the first billing cycle of april 2016 .
the increase included an interim base rate adjustment surcharge , effective with the first billing cycle of april 2016 , to recover the incremental revenue requirement for the period february 24 , 2016 through march 31 , 2016 .
a significant portion of the increase was related to the purchase of power block 2 of the union power station ; 2022 an increase in the purchased power and capacity acquisition cost recovery rider for entergy new orleans , as approved by the city council , effective with the first billing cycle of march 2016 , primarily related to the purchase of power block 1 of the union power station ; 2022 an increase in formula rate plan revenues for entergy louisiana , implemented with the first billing cycle of march 2016 , to collect the estimated first-year revenue requirement related to the purchase of power blocks 3 and 4 of the union power station ; and 2022 an increase in revenues at entergy mississippi , as approved by the mpsc , effective with the first billing cycle of july 2016 , and an increase in revenues collected through the storm damage rider .
see note 2 to the financial statements for further discussion of the rate proceedings .
see note 14 to the financial statements for discussion of the union power station purchase .
the louisiana business combination customer credits variance is due to a regulatory liability of $ 107 million recorded by entergy in october 2015 as a result of the entergy gulf states louisiana and entergy louisiana business combination .
consistent with the terms of the stipulated settlement in the business combination proceeding , electric customers of entergy louisiana will realize customer credits associated with the business combination ; accordingly , in october 2015 , entergy recorded a regulatory liability of $ 107 million ( $ 66 million net-of-tax ) .
these costs are being entergy corporation and subsidiaries management 2019s financial discussion and analysis


shares of common stock issued , in treasury , and outstanding were ( in thousands of shares ) : .

                                                                   | shares issued | treasury shares | shares outstanding
------------------------------------------------------------------ | ------------- | --------------- | ------------------
balance at december 29 2013                                        | 376832        | 2014            | 376832
exercise of stock options issuance of other stock awards and other | 178           | 2014            | 178
balance at december 28 2014                                        | 377010        | 2014            | 377010
exercise of warrants                                               | 20480         | 2014            | 20480
issuance of common stock to sponsors                               | 221666        | 2014            | 221666
acquisition of kraft foods group inc .                             | 592898        | 2014            | 592898
exercise of stock options issuance of other stock awards and other | 2338          | -413 ( 413 )    | 1925
balance at january 3 2016                                          | 1214392       | -413 ( 413 )    | 1213979
exercise of stock options issuance of other stock awards and other | 4555          | -2058 ( 2058 )  | 2497
balance at december 31 2016                                        | 1218947       | -2471 ( 2471 )  | 1216476

note 13 .
financing arrangements we routinely enter into accounts receivable securitization and factoring programs .
we account for transfers of receivables pursuant to these programs as a sale and remove them from our consolidated balance sheet .
at december 31 , 2016 , our most significant program in place was the u.s .
securitization program , which was amended in may 2016 and originally entered into in october of 2015 .
under the program , we are entitled to receive cash consideration of up to $ 800 million ( which we elected to reduce to $ 500 million , effective february 21 , 2017 ) and a receivable for the remainder of the purchase price ( the 201cdeferred purchase price 201d ) .
this securitization program utilizes a bankruptcy- remote special-purpose entity ( 201cspe 201d ) .
the spe is wholly-owned by a subsidiary of kraft heinz and its sole business consists of the purchase or acceptance , through capital contributions of receivables and related assets , from a kraft heinz subsidiary and subsequent transfer of such receivables and related assets to a bank .
although the spe is included in our consolidated financial statements , it is a separate legal entity with separate creditors who will be entitled , upon its liquidation , to be satisfied out of the spe's assets prior to any assets or value in the spe becoming available to kraft heinz or its subsidiaries .
the assets of the spe are not available to pay creditors of kraft heinz or its subsidiaries .
this program expires in may 2017 .
in addition to the u.s .
securitization program , we have accounts receivable factoring programs denominated in australian dollars , new zealand dollars , british pound sterling , euros , and japanese yen .
under these programs , we generally receive cash consideration up to a certain limit and a receivable for the deferred purchase price .
there is no deferred purchase price associated with the japanese yen contract .
related to these programs , our aggregate cash consideration limit , after applying applicable hold-backs , was $ 245 million u.s .
dollars at december 31 , 2016 .
generally , each of these programs automatically renews annually until terminated by either party .
the cash consideration and carrying amount of receivables removed from the consolidated balance sheets in connection with the above programs were $ 904 million at december 31 , 2016 and $ 267 million at january 3 , 2016 .
the fair value of the deferred purchase price for the programs was $ 129 million at december 31 , 2016 and $ 583 million at january 3 , 2016 .
the deferred purchase price is included in sold receivables on the consolidated balance sheets and had a carrying value which approximated its fair value at december 31 , 2016 and january 3 , 2016 .
the proceeds from these sales are recognized on the consolidated statements of cash flows as a component of operating activities .
we act as servicer for these arrangements and have not recorded any servicing assets or liabilities for these arrangements as of december 31 , 2016 and january 3 , 2016 because they were not material to the financial statements.


the following table sets forth information concerning increases in the total number of our aap stores during the past five years: .

                 | 2012 | 2011     | 2010     | 2009       | 2008
---------------- | ---- | -------- | -------- | ---------- | ----------
beginning stores | 3460 | 3369     | 3264     | 3243       | 3153
new stores ( 1 ) | 116  | 95       | 110      | 75         | 109
stores closed    | 2014 | -4 ( 4 ) | -5 ( 5 ) | -54 ( 54 ) | -19 ( 19 )
ending stores    | 3576 | 3460     | 3369     | 3264       | 3243

( 1 ) does not include stores that opened as relocations of previously existing stores within the same general market area or substantial renovations of stores .
store technology .
our store-based information systems are comprised of a proprietary and integrated point of sale , electronic parts catalog , or epc , and store-level inventory management system ( collectively "store system" ) .
information maintained by our store system is used to formulate pricing , marketing and merchandising strategies and to replenish inventory accurately and rapidly .
our fully integrated system enables our store team members to assist our customers in their parts selection and ordering based on the year , make , model and engine type of their vehicles .
our store system provides real-time inventory tracking at the store level allowing store team members to check the quantity of on-hand inventory for any sku , adjust stock levels for select items for store specific events , automatically process returns and defective merchandise , designate skus for cycle counts and track merchandise transfers .
if a hard-to-find part or accessory is not available at one of our stores , the store system can determine whether the part is carried and in-stock through our hub or pdq ae networks or can be ordered directly from one of our vendors .
available parts and accessories are then ordered electronically from another store , hub , pdq ae or directly from the vendor with immediate confirmation of price , availability and estimated delivery time .
our centrally-based epc data management system enables us to reduce the time needed to ( i ) exchange data with our vendors and ( ii ) catalog and deliver updated , accurate parts information .
we also support our store operations with additional proprietary systems and customer driven labor scheduling capabilities .
all of these systems are tightly integrated and provide real-time , comprehensive information to store personnel , resulting in improved customer service levels , team member productivity and in-stock availability .
we plan to start rolling out a new and enhanced epc in fiscal 2013 which is expected to simplify and improve the customer experience .
among the improvements is a more efficient way to systematically identify add-on sales to ensure our customers have what they need to complete their automotive repair project .
store support center merchandising .
purchasing for virtually all of the merchandise for our stores is handled by our merchandise teams located in three primary locations : 2022 store support center in roanoke , virginia ; 2022 regional office in minneapolis , minnesota ; and 2022 global sourcing office in taipei , taiwan .
our roanoke team is primarily responsible for the parts categories and our minnesota team is primarily responsible for accessories , oil and chemicals .
our global sourcing team works closely with both teams .
in fiscal 2012 , we purchased merchandise from approximately 450 vendors , with no single vendor accounting for more than 9% ( 9 % ) of purchases .
our purchasing strategy involves negotiating agreements with most of our vendors to purchase merchandise over a specified period of time along with other terms , including pricing , payment terms and volume .
the merchandising team has developed strong vendor relationships in the industry and , in a collaborative effort with our vendor partners , utilizes a category management process where we manage the mix of our product offerings to meet customer demand .
we believe this process , which develops a customer-focused business plan for each merchandise category , and our global sourcing operation are critical to improving comparable store sales , gross margin and inventory productivity.


conditions and changes to regulatory capital requirements under basel iii capital standards .
beginning in 2014 , other comprehensive income related to available for sale securities ( as well as pension and other post-retirement plans ) are included in pnc 2019s regulatory capital ( subject to a phase-in schedule ) and , therefore will affect pnc 2019s regulatory capital ratios .
for additional information , see the supervision and regulation section in item 1 2013 business and the capital portion of the balance sheet review section in this item 7 of this report .
the duration of investment securities was 2.9 years at december 31 , 2013 .
we estimate that , at december 31 , 2013 , the effective duration of investment securities was 3.0 years for an immediate 50 basis points parallel increase in interest rates and 2.8 years for an immediate 50 basis points parallel decrease in interest rates .
comparable amounts at december 31 , 2012 were 2.3 years and 2.2 years , respectively .
we conduct a quarterly comprehensive security-level impairment assessment on all securities .
for securities in an unrealized loss position , we determine whether the loss represents otti .
for debt securities that we neither intend to sell nor believe we will be required to sell prior to expected recovery , we recognize the credit portion of otti charges in current earnings and include the noncredit portion of otti in net unrealized gains ( losses ) on otti securities on our consolidated statement of comprehensive income and net of tax in accumulated other comprehensive income ( loss ) on our consolidated balance sheet .
during 2013 and 2012 we recognized otti credit losses of $ 16 million and $ 111 million , respectively .
substantially all of the credit losses related to residential mortgage-backed and asset-backed securities collateralized by non-agency residential loans .
if current housing and economic conditions were to deteriorate from current levels , and if market volatility and illiquidity were to deteriorate from current levels , or if market interest rates were to increase or credit spreads were to widen appreciably , the valuation of our investment securities portfolio could be adversely affected and we could incur additional otti credit losses that would impact our consolidated income statement .
additional information regarding our investment securities is included in note 8 investment securities and note 9 fair value in the notes to consolidated financial statements included in item 8 of this report .
loans held for sale table 15 : loans held for sale in millions december 31 december 31 .

in millions                                          | december 312013 | december 312012
---------------------------------------------------- | --------------- | ---------------
commercial mortgages at fair value                   | $ 586           | $ 772
commercial mortgages at lower of cost or fair value  | 281             | 620
total commercial mortgages                           | 867             | 1392
residential mortgages at fair value                  | 1315            | 2096
residential mortgages at lower of cost or fair value | 41              | 124
total residential mortgages                          | 1356            | 2220
other                                                | 32              | 81
total                                                | $ 2255          | $ 3693

for commercial mortgages held for sale designated at fair value , we stopped originating these and continue to pursue opportunities to reduce these positions .
at december 31 , 2013 , the balance relating to these loans was $ 586 million compared to $ 772 million at december 31 , 2012 .
for commercial mortgages held for sale carried at lower of cost or fair value , we sold $ 2.8 billion in 2013 compared to $ 2.2 billion in 2012 .
all of these loan sales were to government agencies .
total gains of $ 79 million were recognized on the valuation and sale of commercial mortgage loans held for sale , net of hedges , in 2013 , and $ 41 million in 2012 .
residential mortgage loan origination volume was $ 15.1 billion in 2013 compared to $ 15.2 billion in 2012 .
substantially all such loans were originated under agency or federal housing administration ( fha ) standards .
we sold $ 14.7 billion of loans and recognized related gains of $ 568 million in 2013 .
the comparable amounts for 2012 were $ 13.8 billion and $ 747 million , respectively .
interest income on loans held for sale was $ 157 million in 2013 and $ 168 million in 2012 .
these amounts are included in other interest income on our consolidated income statement .
additional information regarding our loan sale and servicing activities is included in note 3 loan sales and servicing activities and variable interest entities and note 9 fair value in our notes to consolidated financial statements included in item 8 of this report .
goodwill and other intangible assets goodwill and other intangible assets totaled $ 11.3 billion at december 31 , 2013 and $ 10.9 billion at december 31 , 2012 .
the increase of $ .4 billion was primarily due to additions to and changes in value of mortgage and other loan servicing rights .
see additional information regarding our goodwill and intangible assets in note 10 goodwill and other intangible assets included in the notes to consolidated financial statements in item 8 of this report .
44 the pnc financial services group , inc .
2013 form 10-k


american tower corporation and subsidiaries notes to consolidated financial statements 2014 ( continued ) company is currently unable to estimate the impact of the amount of such changes , if any , to previously recorded uncertain tax positions .
a reconciliation of the beginning and ending amount of unrecognized tax benefits for the year ending december 31 , 2007 is as follows ( in thousands ) : .

balance at january 1 2007                                     | $ 183953
------------------------------------------------------------- | ------------------
additions based on tax positions related to the current year  | 2598
additions for tax positions of prior years                    | 5412
reductions for tax positions of prior years                   | -120016 ( 120016 )
cash advance in connection with proposed settlement           | -6682 ( 6682 )
settlements with taxing authorities                           | -5372 ( 5372 )
reductions as a result of the lapse of statute of limitations | -669 ( 669 )
balance as of december 31 2007                                | $ 59224

during the year ended december 31 , 2007 , the company recorded penalties and tax-related interest income of $ 2.5 million and interest income from tax refunds of $ 1.5 million for the year ended december 31 , 2007 .
as of december 31 , 2007 and january 1 , 2007 , the total unrecognized tax benefits included in other long-term liabilities in the consolidated balance sheets was $ 29.6 million and $ 34.3 million , respectively .
as of december 31 , 2007 and january 1 , 2007 , the total amount of accrued income tax-related interest and penalties included in other long-term liabilities in the consolidated balance sheets was $ 30.7 million and $ 33.2 million , respectively .
in the fourth quarter of 2007 , the company entered into a tax amnesty program with the mexican tax authority .
as of december 31 , 2007 , the company had met all of the administrative requirements of the program , which enabled the company to recognize certain tax benefits .
this was confirmed by the mexican tax authority on february 5 , 2008 .
these benefits include a reduction of uncertain tax benefits of $ 5.4 million along with penalties and interest of $ 12.5 million related to 2002 , all of which reduced income tax expense .
in connection with the above program , the company paid $ 6.7 million to the mexican tax authority as a settlement offer for other uncertain tax positions related to 2003 and 2004 .
this offer is currently under review by the mexican tax authority ; the company cannot yet determine the specific timing or the amount of any potential settlement .
during 2007 , the statute of limitations on certain unrecognized tax benefits lapsed , which resulted in a $ 0.7 million decrease in the liability for uncertain tax benefits , all of which reduced the income tax provision .
the company files numerous consolidated and separate income tax returns , including u.s .
federal and state tax returns and foreign tax returns in mexico and brazil .
as a result of the company 2019s ability to carry forward federal and state net operating losses , the applicable tax years remain open to examination until three years after the applicable loss carryforwards have been used or expired .
however , the company has completed u.s .
federal income tax examinations for tax years up to and including 2002 .
the company is currently undergoing u.s .
federal income tax examinations for tax years 2004 and 2005 .
additionally , it is subject to examinations in various u.s .
state jurisdictions for certain tax years , and is under examination in brazil for the 2001 through 2006 tax years and mexico for the 2002 tax year .
sfas no .
109 , 201caccounting for income taxes , 201d requires that companies record a valuation allowance when it is 201cmore likely than not that some portion or all of the deferred tax assets will not be realized . 201d at december 31 , 2007 , the company has provided a valuation allowance of approximately $ 88.2 million , including approximately


valuation techniques 2013 cash equivalents are mostly comprised of short-term money-market instruments and are valued at cost , which approximates fair value .
u.s .
equity securities and international equity securities categorized as level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year .
for u.s .
equity securities and international equity securities not traded on an active exchange , or if the closing price is not available , the trustee obtains indicative quotes from a pricing vendor , broker , or investment manager .
these securities are categorized as level 2 if the custodian obtains corroborated quotes from a pricing vendor or categorized as level 3 if the custodian obtains uncorroborated quotes from a broker or investment manager .
commingled equity funds are public investment vehicles valued using the net asset value ( nav ) provided by the fund manager .
the nav is the total value of the fund divided by the number of shares outstanding .
commingled equity funds are categorized as level 1 if traded at their nav on a nationally recognized securities exchange or categorized as level 2 if the nav is corroborated by observable market data ( e.g. , purchases or sales activity ) .
fixed income securities categorized as level 2 are valued by the trustee using pricing models that use verifiable observable market data ( e.g .
interest rates and yield curves observable at commonly quoted intervals ) , bids provided by brokers or dealers , or quoted prices of securities with similar characteristics .
private equity funds , real estate funds , hedge funds , and fixed income securities categorized as level 3 are valued based on valuation models that include significant unobservable inputs and cannot be corroborated using verifiable observable market data .
valuations for private equity funds and real estate funds are determined by the general partners , while hedge funds are valued by independent administrators .
depending on the nature of the assets , the general partners or independent administrators use both the income and market approaches in their models .
the market approach consists of analyzing market transactions for comparable assets while the income approach uses earnings or the net present value of estimated future cash flows adjusted for liquidity and other risk factors .
commodities categorized as level 1 are traded on an active commodity exchange and are valued at their closing prices on the last trading day of the year .
commodities categorized as level 2 represent shares in a commingled commodity fund valued using the nav , which is corroborated by observable market data .
contributions and expected benefit payments we generally determine funding requirements for our defined benefit pension plans in a manner consistent with cas and internal revenue code rules .
in 2012 , we made contributions of $ 3.6 billion related to our qualified defined benefit pension plans .
we plan to make contributions of approximately $ 1.5 billion related to the qualified defined benefit pension plans in 2013 .
in 2012 , we made contributions of $ 235 million related to our retiree medical and life insurance plans .
we expect no required contributions related to the retiree medical and life insurance plans in 2013 .
the following table presents estimated future benefit payments , which reflect expected future employee service , as of december 31 , 2012 ( in millions ) : .

                                         | 2013   | 2014   | 2015   | 2016   | 2017   | 2018 - 2022
---------------------------------------- | ------ | ------ | ------ | ------ | ------ | -----------
qualified defined benefit pension plans  | $ 1900 | $ 1970 | $ 2050 | $ 2130 | $ 2220 | $ 12880
retiree medical and life insurance plans | 200    | 210    | 220    | 220    | 220    | 1080

defined contribution plans we maintain a number of defined contribution plans , most with 401 ( k ) features , that cover substantially all of our employees .
under the provisions of our 401 ( k ) plans , we match most employees 2019 eligible contributions at rates specified in the plan documents .
our contributions were $ 380 million in 2012 , $ 378 million in 2011 , and $ 379 million in 2010 , the majority of which were funded in our common stock .
our defined contribution plans held approximately 48.6 million and 52.1 million shares of our common stock as of december 31 , 2012 and 2011.


management 2019s discussion and analysis 150 jpmorgan chase & co./2012 annual report wholesale credit portfolio as of december 31 , 2012 , wholesale exposure ( cib , cb and am ) increased by $ 70.9 billion from december 31 , 2011 , primarily driven by increases of $ 52.1 billion in lending- related commitments and $ 30.2 billion in loans due to increased client activity across most regions and most businesses .
the increase in loans was due to growth in cb and am .
these increases were partially offset by a $ 17.5 billion decrease in derivative receivables , primarily related to the decline in the u.s .
dollar , and tightening of credit spreads ; these changes resulted in reductions to interest rate , credit derivative , and foreign exchange balances .
wholesale credit portfolio december 31 , credit exposure nonperforming ( c ) ( d ) .

december 31 , ( in millions )                                        | december 31 , 2012 | december 31 , 2011 | 2012         | 2011
-------------------------------------------------------------------- | ------------------ | ------------------ | ------------ | ------------
loans retained                                                       | $ 306222           | $ 278395           | $ 1434       | $ 2398
loans held-for-sale                                                  | 4406               | 2524               | 18           | 110
loans at fair value                                                  | 2555               | 2097               | 93           | 73
loans 2013 reported                                                  | 313183             | 283016             | 1545         | 2581
derivative receivables                                               | 74983              | 92477              | 239          | 297
receivables from customers and other ( a )                           | 23648              | 17461              | 2014         | 2014
total wholesale credit-related assets                                | 411814             | 392954             | 1784         | 2878
lending-related commitments                                          | 434814             | 382739             | 355          | 865
total wholesale credit exposure                                      | $ 846628           | $ 775693           | $ 2139       | $ 3743
credit portfolio management derivatives notional net ( b )           | $ -27447 ( 27447 ) | $ -26240 ( 26240 ) | $ -25 ( 25 ) | $ -38 ( 38 )
liquid securities and other cash collateral held against derivatives | -13658 ( 13658 )   | -21807 ( 21807 )   | na           | na

receivables from customers and other ( a ) 23648 17461 2014 2014 total wholesale credit- related assets 411814 392954 1784 2878 lending-related commitments 434814 382739 355 865 total wholesale credit exposure $ 846628 $ 775693 $ 2139 $ 3743 credit portfolio management derivatives notional , net ( b ) $ ( 27447 ) $ ( 26240 ) $ ( 25 ) $ ( 38 ) liquid securities and other cash collateral held against derivatives ( 13658 ) ( 21807 ) na na ( a ) receivables from customers and other primarily includes margin loans to prime and retail brokerage customers ; these are classified in accrued interest and accounts receivable on the consolidated balance sheets .
( b ) represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures ; these derivatives do not qualify for hedge accounting under u.s .
gaap .
excludes the synthetic credit portfolio .
for additional information , see credit derivatives on pages 158 2013159 , and note 6 on pages 218 2013227 of this annual report .
( c ) excludes assets acquired in loan satisfactions .
( d ) prior to the first quarter of 2012 , reported amounts had only included defaulted derivatives ; effective in the first quarter of 2012 , reported amounts in all periods include both defaulted derivatives as well as derivatives that have been risk rated as nonperforming.


notes to consolidated financial statements the components of accumulated other comprehensive loss , net of related tax , are as follows: .

( millions ) as of december 31       | 2007           | 2006             | 2005
------------------------------------ | -------------- | ---------------- | ----------------
net derivative gains ( losses )      | $ 24           | $ 15             | $ -11 ( 11 )
net unrealized investment gains      | 76             | 73               | 52
net foreign exchange translation     | 284            | 118              | -119 ( 119 )
postretirement plans                 | -1110 ( 1110 ) | -1216 ( 1216 )   | -1077 ( 1077 )
accumulated other comprehensive loss | $ -726 ( 726 ) | $ -1010 ( 1010 ) | $ -1155 ( 1155 )

aon corporation


page 27 of 100 other liquidity items cash payments required for long-term debt maturities , rental payments under noncancellable operating leases , purchase obligations and other commitments in effect at december 31 , 2010 , are summarized in the following table: .

( $ in millions )                         | payments due by period ( a ) total | payments due by period ( a ) less than1 year | payments due by period ( a ) 1-3 years | payments due by period ( a ) 3-5 years | payments due by period ( a ) more than5 years
----------------------------------------- | ---------------------------------- | -------------------------------------------- | -------------------------------------- | -------------------------------------- | ---------------------------------------------
long-term debt including capital leases   | $ 2750.1                           | $ 34.5                                       | $ 188.3                                | $ 367.1                                | $ 2160.2
interest payments on long-term debt ( b ) | 1267.5                             | 160.5                                        | 316.4                                  | 304.2                                  | 486.4
operating leases                          | 93.2                               | 31.1                                         | 37.1                                   | 16.6                                   | 8.4
purchase obligations ( c )                | 6586.9                             | 2709.5                                       | 3779.4                                 | 98.0                                   | 2212
total payments on contractual obligations | $ 10697.7                          | $ 2935.6                                     | $ 4321.2                               | $ 785.9                                | $ 2655.0

total payments on contractual obligations $ 10697.7 $ 2935.6 $ 4321.2 $ 785.9 $ 2655.0 ( a ) amounts reported in local currencies have been translated at the year-end 2010 exchange rates .
( b ) for variable rate facilities , amounts are based on interest rates in effect at year end and do not contemplate the effects of hedging instruments .
( c ) the company 2019s purchase obligations include contracted amounts for aluminum , steel and other direct materials .
also included are commitments for purchases of natural gas and electricity , aerospace and technologies contracts and other less significant items .
in cases where variable prices and/or usage are involved , management 2019s best estimates have been used .
depending on the circumstances , early termination of the contracts may or may not result in penalties and , therefore , actual payments could vary significantly .
the table above does not include $ 60.1 million of uncertain tax positions , the timing of which is uncertain .
contributions to the company 2019s defined benefit pension plans , not including the unfunded german plans , are expected to be in the range of $ 30 million in 2011 .
this estimate may change based on changes in the pension protection act and actual plan asset performance , among other factors .
benefit payments related to these plans are expected to be $ 71.4 million , $ 74.0 million , $ 77.1 million , $ 80.3 million and $ 84.9 million for the years ending december 31 , 2011 through 2015 , respectively , and a total of $ 483.1 million for the years 2016 through 2020 .
payments to participants in the unfunded german plans are expected to be between $ 21.8 million ( 20ac16.5 million ) to $ 23.2 million ( 20ac17.5 million ) in each of the years 2011 through 2015 and a total of $ 102.7 million ( 20ac77.5 million ) for the years 2016 through 2020 .
for the u.s .
pension plans in 2011 , we changed our return on asset assumption to 8.00 percent ( from 8.25 percent in 2010 ) and our discount rate assumption to an average of 5.55 percent ( from 6.00 percent in 2010 ) .
based on the changes in assumptions , pension expense in 2011 is anticipated to be relatively flat compared to 2010 .
a reduction of the expected return on pension assets assumption by a quarter of a percentage point would result in an estimated $ 2.9 million increase in the 2011 global pension expense , while a quarter of a percentage point reduction in the discount rate applied to the pension liability would result in an estimated $ 3.5 million of additional pension expense in 2011 .
additional information regarding the company 2019s pension plans is provided in note 14 accompanying the consolidated financial statements within item 8 of this report .
annual cash dividends paid on common stock were 20 cents per share in 2010 , 2009 and 2008 .
total dividends paid were $ 35.8 million in 2010 , $ 37.4 million in 2009 and $ 37.5 million in 2008 .
on january 26 , 2011 , the company 2019s board of directors approved an increase in the quarterly dividends to 7 cents per share .
share repurchases our share repurchases , net of issuances , totaled $ 506.7 million in 2010 , $ 5.1 million in 2009 and $ 299.6 million in 2008 .
on november 2 , 2010 , we acquired 2775408 shares of our publicly held common stock in a private transaction for $ 88.8 million .
on february 17 , 2010 , we entered into an accelerated share repurchase agreement to buy $ 125.0 million of our common shares using cash on hand and available borrowings .
we advanced the $ 125.0 million on february 22 , 2010 , and received 4323598 shares , which represented 90 percent of the total shares as calculated using the previous day 2019s closing price .
the agreement was settled on may 20 , 2010 , and the company received an additional 398206 shares .
net repurchases in 2008 included a $ 31 million settlement on january 7 , 2008 , of a forward contract entered into in december 2007 for the repurchase of 1350000 shares .
from january 1 through february 24 , 2011 , ball repurchased an additional $ 143.3 million of its common stock.


cash and cash equivalents cash equivalents include highly-liquid investments with a maturity of three months or less when purchased .
accounts receivable and allowance for doubtful accounts accounts receivable are carried at the invoiced amounts , less an allowance for doubtful accounts , and generally do not bear interest .
the company estimates the balance of allowance for doubtful accounts by analyzing accounts receivable balances by age and applying historical write-off and collection trend rates .
the company 2019s estimates include separately providing for customer receivables based on specific circumstances and credit conditions , and when it is deemed probable that the balance is uncollectible .
account balances are written off against the allowance when it is determined the receivable will not be recovered .
the company 2019s allowance for doubtful accounts balance also includes an allowance for the expected return of products shipped and credits related to pricing or quantities shipped of $ 15 million , $ 14 million and $ 15 million as of december 31 , 2017 , 2016 , and 2015 , respectively .
returns and credit activity is recorded directly to sales as a reduction .
the following table summarizes the activity in the allowance for doubtful accounts: .

( millions )      | 2017           | 2016           | 2015
----------------- | -------------- | -------------- | --------------
beginning balance | $ 67.6         | $ 75.3         | $ 77.5
bad debt expense  | 17.1           | 20.1           | 25.8
write-offs        | -15.7 ( 15.7 ) | -24.6 ( 24.6 ) | -21.9 ( 21.9 )
other ( a )       | 2.5            | -3.2 ( 3.2 )   | -6.1 ( 6.1 )
ending balance    | $ 71.5         | $ 67.6         | $ 75.3

( a ) other amounts are primarily the effects of changes in currency translations and the impact of allowance for returns and credits .
inventory valuations inventories are valued at the lower of cost or net realizable value .
certain u.s .
inventory costs are determined on a last-in , first-out ( 201clifo 201d ) basis .
lifo inventories represented 39% ( 39 % ) and 40% ( 40 % ) of consolidated inventories as of december 31 , 2017 and 2016 , respectively .
all other inventory costs are determined using either the average cost or first-in , first-out ( 201cfifo 201d ) methods .
inventory values at fifo , as shown in note 5 , approximate replacement cost .
property , plant and equipment property , plant and equipment assets are stated at cost .
merchandising and customer equipment consists principally of various dispensing systems for the company 2019s cleaning and sanitizing products , dishwashing machines and process control and monitoring equipment .
certain dispensing systems capitalized by the company are accounted for on a mass asset basis , whereby equipment is capitalized and depreciated as a group and written off when fully depreciated .
the company capitalizes both internal and external costs of development or purchase of computer software for internal use .
costs incurred for data conversion , training and maintenance associated with capitalized software are expensed as incurred .
expenditures for major renewals and improvements , which significantly extend the useful lives of existing plant and equipment , are capitalized and depreciated .
expenditures for repairs and maintenance are charged to expense as incurred .
upon retirement or disposition of plant and equipment , the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income .
depreciation is charged to operations using the straight-line method over the assets 2019 estimated useful lives ranging from 5 to 40 years for buildings and leasehold improvements , 3 to 20 years for machinery and equipment , 3 to 15 years for merchandising and customer equipment and 3 to 7 years for capitalized software .
the straight-line method of depreciation reflects an appropriate allocation of the cost of the assets to earnings in proportion to the amount of economic benefits obtained by the company in each reporting period .
depreciation expense was $ 586 million , $ 561 million and $ 560 million for 2017 , 2016 and 2015 , respectively.


11 .
borrowings short-term borrowings the carrying value of short-term borrowings at december 31 , 2012 and 2011 , included $ 100 million under the 2012 revolving credit facility and $ 100 million under the 2011 revolving credit facility , respectively .
2012 revolving credit facility .
in march 2011 , the company entered into a five-year $ 3.5 billion unsecured revolving credit facility ( the 201c2011 credit facility 201d ) .
in march 2012 , the 2011 credit facility was amended to extend the maturity date by one year to march 2017 and in april 2012 the amount of the aggregate commitment was increased to $ 3.785 billion ( the 201c2012 credit facility 201d ) .
the 2012 credit facility permits the company to request an additional $ 1.0 billion of borrowing capacity , subject to lender credit approval , increasing the overall size of the 2012 credit facility to an aggregate principal amount not to exceed $ 4.785 billion .
interest on borrowings outstanding accrues at a rate based on the applicable london interbank offered rate plus a spread .
the 2012 credit facility requires the company not to exceed a maximum leverage ratio ( ratio of net debt to ebitda , where net debt equals total debt less unrestricted cash ) of 3 to 1 , which was satisfied with a ratio of less than 1 to 1 at december 31 , 2012 .
the 2012 credit facility provides back-up liquidity , funds ongoing working capital for general corporate purposes and funds various investment opportunities .
at december 31 , 2012 , the company had $ 100 million outstanding under this facility with an interest rate of 1.085% ( 1.085 % ) and a maturity during january 2013 .
during january 2013 , the company rolled over the $ 100 million in borrowings at an interest rate of 1.085% ( 1.085 % ) and a maturity during february 2013 .
during february 2013 , the company rolled over the $ 100 million in borrowings at an interest rate of 1.075% ( 1.075 % ) and a maturity during march 2013 .
commercial paper program .
on october 14 , 2009 , blackrock established a commercial paper program ( the 201ccp program 201d ) under which the company could issue unsecured commercial paper notes ( the 201ccp notes 201d ) on a private placement basis up to a maximum aggregate amount outstanding at any time of $ 3.0 billion .
on may 13 , 2011 , blackrock increased the maximum aggregate amount that may be borrowed under the cp program to $ 3.5 billion .
on may 17 , 2012 , blackrock increased the maximum aggregate amount to $ 3.785 billion .
the cp program is currently supported by the 2012 credit facility .
as of december 31 , 2012 and december 31 , 2011 , blackrock had no cp notes outstanding .
long-term borrowings the carrying value and fair value of long-term borrowings estimated using market prices at december 31 , 2012 included the following : ( dollar amounts in millions ) maturity amount unamortized discount carrying value fair value .

( dollar amounts in millions )    | maturity amount | unamortized discount | carrying value | fair value
--------------------------------- | --------------- | -------------------- | -------------- | ----------
floating rate notes due 2013      | $ 750           | $ 2014               | $ 750          | $ 750
3.50% ( 3.50 % ) notes due 2014   | 1000            | 2014                 | 1000           | 1058
1.375% ( 1.375 % ) notes due 2015 | 750             | 2014                 | 750            | 762
6.25% ( 6.25 % ) notes due 2017   | 700             | -3 ( 3 )             | 697            | 853
5.00% ( 5.00 % ) notes due 2019   | 1000            | -2 ( 2 )             | 998            | 1195
4.25% ( 4.25 % ) notes due 2021   | 750             | -4 ( 4 )             | 746            | 856
3.375% ( 3.375 % ) notes due 2022 | 750             | -4 ( 4 )             | 746            | 801
total long-term borrowings        | $ 5700          | $ -13 ( 13 )         | $ 5687         | $ 6275


entergy arkansas , inc .
and subsidiaries management 2019s financial discussion and analysis results of operations net income 2016 compared to 2015 net income increased $ 92.9 million primarily due to higher net revenue and lower other operation and maintenance expenses , partially offset by a higher effective income tax rate and higher depreciation and amortization expenses .
2015 compared to 2014 net income decreased $ 47.1 million primarily due to higher other operation and maintenance expenses , partially offset by higher net revenue .
net revenue 2016 compared to 2015 net revenue consists of operating revenues net of : 1 ) fuel , fuel-related expenses , and gas purchased for resale , 2 ) purchased power expenses , and 3 ) other regulatory charges ( credits ) .
following is an analysis of the change in net revenue comparing 2016 to 2015 .
amount ( in millions ) .

                      | amount ( in millions )
--------------------- | ----------------------
2015 net revenue      | $ 1362.2
retail electric price | 161.5
other                 | -3.2 ( 3.2 )
2016 net revenue      | $ 1520.5

the retail electric price variance is primarily due to an increase in base rates , as approved by the apsc .
the new base rates were effective february 24 , 2016 and began billing with the first billing cycle of april 2016 .
the increase includes an interim base rate adjustment surcharge , effective with the first billing cycle of april 2016 , to recover the incremental revenue requirement for the period february 24 , 2016 through march 31 , 2016 .
a significant portion of the increase is related to the purchase of power block 2 of the union power station .
see note 2 to the financial statements for further discussion of the rate case .
see note 14 to the financial statements for further discussion of the union power station purchase.


equity compensation plan information the following table presents the equity securities available for issuance under our equity compensation plans as of december 31 , 2018 .
equity compensation plan information plan category number of securities to be issued upon exercise of outstanding options , warrants and rights ( 1 ) weighted-average exercise price of outstanding options , warrants and rights number of securities remaining available for future issuance under equity compensation plans ( excluding securities reflected in column ( a ) ) ( a ) ( b ) ( c ) equity compensation plans approved by security holders 399165 $ 0.00 3995600 equity compensation plans not approved by security holders ( 2 ) 2014 2014 2014 .

plan category                                                    | number of securities to be issued upon exercise of outstanding options warrants and rights ( 1 ) ( a ) ( b ) | weighted-average exercise price of outstanding optionswarrants and rights | number of securities remaining available for future issuance under equity compensation plans ( excluding securitiesreflected in column ( a ) ) ( c )
---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
equity compensation plans approved by security holders           | 399165                                                                                | $ 0.00                                                                    | 3995600
equity compensation plans not approved by security holders ( 2 ) | 2014                                                                                | 2014                                                                      | 2014
total                                                            | 399165                                                                                | $ 0.00                                                                    | 3995600

( 1 ) includes grants made under the huntington ingalls industries , inc .
2012 long-term incentive stock plan ( the "2012 plan" ) , which was approved by our stockholders on may 2 , 2012 , and the huntington ingalls industries , inc .
2011 long-term incentive stock plan ( the "2011 plan" ) , which was approved by the sole stockholder of hii prior to its spin-off from northrop grumman corporation .
of these shares , 27123 were stock rights granted under the 2011 plan .
in addition , this number includes 31697 stock rights , 5051 restricted stock rights , and 335293 restricted performance stock rights granted under the 2012 plan , assuming target performance achievement .
( 2 ) there are no awards made under plans not approved by security holders .
item 13 .
certain relationships and related transactions , and director independence information as to certain relationships and related transactions and director independence will be incorporated herein by reference to the proxy statement for our 2019 annual meeting of stockholders , to be filed within 120 days after the end of the company 2019s fiscal year .
item 14 .
principal accountant fees and services information as to principal accountant fees and services will be incorporated herein by reference to the proxy statement for our 2019 annual meeting of stockholders , to be filed within 120 days after the end of the company 2019s fiscal year.


nbcuniversal media , llc consolidated statement of comprehensive income .

year ended december 31 ( in millions )                                       | 2015         | 2014         | 2013
---------------------------------------------------------------------------- | ------------ | ------------ | ------------
net income                                                                   | $ 3624       | $ 3297       | $ 2122
deferred gains ( losses ) on cash flow hedges net                            | -21 ( 21 )   | 25           | -5 ( 5 )
employee benefit obligations net                                             | 60           | -106 ( 106 ) | 95
currency translation adjustments net                                         | -121 ( 121 ) | -62 ( 62 )   | -41 ( 41 )
comprehensive income                                                         | 3542         | 3154         | 2171
net ( income ) loss attributable to noncontrolling interests                 | -210 ( 210 ) | -182 ( 182 ) | -154 ( 154 )
other comprehensive ( income ) loss attributable to noncontrolling interests | 29           | 2014         | 2014
comprehensive income attributable to nbcuniversal                            | $ 3361       | $ 2972       | $ 2017

see accompanying notes to consolidated financial statements .
147 comcast 2015 annual report on form 10-k


entergy corporation and subsidiaries notes to financial statements ( a ) consists of pollution control revenue bonds and environmental revenue bonds .
( b ) the bonds are secured by a series of collateral first mortgage bonds .
( c ) in december 2005 , entergy corporation sold 10 million equity units with a stated amount of $ 50 each .
an equity unit consisted of ( 1 ) a note , initially due february 2011 and initially bearing interest at an annual rate of 5.75% ( 5.75 % ) , and ( 2 ) a purchase contract that obligated the holder of the equity unit to purchase for $ 50 between 0.5705 and 0.7074 shares of entergy corporation common stock on or before february 17 , 2009 .
entergy paid the holders quarterly contract adjustment payments of 1.875% ( 1.875 % ) per year on the stated amount of $ 50 per equity unit .
under the terms of the purchase contracts , entergy attempted to remarket the notes in february 2009 but was unsuccessful , the note holders put the notes to entergy , entergy retired the notes , and entergy issued 6598000 shares of common stock in the settlement of the purchase contracts .
( d ) pursuant to the nuclear waste policy act of 1982 , entergy's nuclear owner/licensee subsidiaries have contracts with the doe for spent nuclear fuel disposal service .
the contracts include a one-time fee for generation prior to april 7 , 1983 .
entergy arkansas is the only entergy company that generated electric power with nuclear fuel prior to that date and includes the one-time fee , plus accrued interest , in long-term ( e ) the fair value excludes lease obligations , long-term doe obligations , and the note payable to nypa , and includes debt due within one year .
it is determined using bid prices reported by dealer markets and by nationally recognized investment banking firms .
( f ) entergy gulf states louisiana remains primarily liable for all of the long-term debt issued by entergy gulf states , inc .
that was outstanding on december 31 , 2008 and 2007 .
under a debt assumption agreement with entergy gulf states louisiana , entergy texas assumed approximately 46% ( 46 % ) of this long-term debt .
the annual long-term debt maturities ( excluding lease obligations ) for debt outstanding as of december 31 , 2008 , for the next five years are as follows : amount ( in thousands ) .

     | amount ( in thousands )
---- | -----------------------
2009 | $ 516019
2010 | $ 763036
2011 | $ 897367
2012 | $ 3625459
2013 | $ 579461

in november 2000 , entergy's non-utility nuclear business purchased the fitzpatrick and indian point 3 power plants in a seller-financed transaction .
entergy issued notes to nypa with seven annual installments of approximately $ 108 million commencing one year from the date of the closing , and eight annual installments of $ 20 million commencing eight years from the date of the closing .
these notes do not have a stated interest rate , but have an implicit interest rate of 4.8% ( 4.8 % ) .
in accordance with the purchase agreement with nypa , the purchase of indian point 2 in 2001 resulted in entergy's non-utility nuclear business becoming liable to nypa for an additional $ 10 million per year for 10 years , beginning in september 2003 .
this liability was recorded upon the purchase of indian point 2 in september 2001 , and is included in the note payable to nypa balance above .
in july 2003 , a payment of $ 102 million was made prior to maturity on the note payable to nypa .
under a provision in a letter of credit supporting these notes , if certain of the utility operating companies or system energy were to default on other indebtedness , entergy could be required to post collateral to support the letter of credit .
covenants in the entergy corporation notes require it to maintain a consolidated debt ratio of 65% ( 65 % ) or less of its total capitalization .
if entergy's debt ratio exceeds this limit , or if entergy or certain of the utility operating companies default on other indebtedness or are in bankruptcy or insolvency proceedings , an acceleration of the notes' maturity dates may occur .
entergy gulf states louisiana , entergy louisiana , entergy mississippi , entergy texas , and system energy have received ferc long-term financing orders authorizing long-term securities issuances .
entergy arkansas has


as of may 26 , 2019 , we expect to pay approximately $ 2.0 million of unrecognized tax benefit liabilities and accrued interest within the next 12 months .
we are not able to reasonably estimate the timing of future cash flows beyond 12 months due to uncertainties in the timing of tax audit outcomes .
the remaining amount of our unrecognized tax liability was classified in other liabilities .
we report accrued interest and penalties related to unrecognized tax benefit liabilities in income tax expense .
for fiscal 2019 , we recognized $ 0.5 million of tax-related net interest and penalties , and had $ 26.0 million of accrued interest and penalties as of may 26 , 2019 .
for fiscal 2018 , we recognized a net benefit of $ 3.1 million of tax-related net interest and penalties , and had $ 27.3 million of accrued interest and penalties as of may 27 , 2018 .
note 15 .
leases , other commitments , and contingencies our leases are generally for warehouse space and equipment .
rent expense under all operating leases from continuing operations was $ 184.9 million in fiscal 2019 , $ 189.4 million in fiscal 2018 , and $ 188.1 million in fiscal 2017 .
some operating leases require payment of property taxes , insurance , and maintenance costs in addition to the rent payments .
contingent and escalation rent in excess of minimum rent payments and sublease income netted in rent expense were insignificant .
noncancelable future lease commitments are : in millions operating leases capital leases .

in millions                                      | operating leases | capital leases
------------------------------------------------ | ---------------- | --------------
fiscal 2020                                      | $ 120.0          | $ 0.2
fiscal 2021                                      | 101.7            | 0.1
fiscal 2022                                      | 85.0             | -
fiscal 2023                                      | 63.8             | -
fiscal 2024                                      | 49.1             | -
after fiscal 2024                                | 63.0             | -
total noncancelable future lease commitments     | $ 482.6          | $ 0.3
less : interest                                  |                  | -
present value of obligations under capitalleases |                  | $ 0.3

depreciation on capital leases is recorded as depreciation expense in our results of operations .
as of may 26 , 2019 , we have issued guarantees and comfort letters of $ 681.6 million for the debt and other obligations of consolidated subsidiaries , and guarantees and comfort letters of $ 133.9 million for the debt and other obligations of non-consolidated affiliates , mainly cpw .
in addition , off-balance sheet arrangements are generally limited to the future payments under non-cancelable operating leases , which totaled $ 482.6 million as of may 26 , 2019 .
note 16 .
business segment and geographic information we operate in the packaged foods industry .
our operating segments are as follows : north america retail ; convenience stores & foodservice ; europe & australia ; asia & latin america ; and pet .
our north america retail operating segment reflects business with a wide variety of grocery stores , mass merchandisers , membership stores , natural food chains , drug , dollar and discount chains , and e-commerce grocery providers .
our product categories in this business segment are ready-to-eat cereals , refrigerated yogurt , soup , meal kits , refrigerated and frozen dough products , dessert and baking mixes , frozen pizza and pizza snacks , grain , fruit and savory snacks , and a wide variety of organic products including refrigerated yogurt , nutrition bars , meal kits , salty snacks , ready-to-eat cereal , and grain snacks.


kimco realty corporation and subsidiaries notes to consolidated financial statements , continued other 2014 in connection with the construction of its development projects and related infrastructure , certain public agencies require posting of performance and surety bonds to guarantee that the company 2019s obligations are satisfied .
these bonds expire upon the completion of the improvements and infrastructure .
as of december 31 , 2010 , there were approximately $ 45.3 million in performance and surety bonds outstanding .
as of december 31 , 2010 , the company had accrued $ 3.8 million in connection with a legal claim related to a previously sold ground-up development project .
the company is currently negotiating with the plaintiff to settle this claim and believes that the prob- able settlement amount will approximate the amount accrued .
the company is subject to various other legal proceedings and claims that arise in the ordinary course of business .
management believes that the final outcome of such matters will not have a material adverse effect on the financial position , results of operations or liquidity of the company .
23 .
incentive plans : the company maintains two equity participation plans , the second amended and restated 1998 equity participation plan ( the 201cprior plan 201d ) and the 2010 equity participation plan ( the 201c2010 plan 201d ) ( collectively , the 201cplans 201d ) .
the prior plan provides for a maxi- mum of 47000000 shares of the company 2019s common stock to be issued for qualified and non-qualified options and restricted stock grants .
the 2010 plan provides for a maximum of 5000000 shares of the company 2019s common stock to be issued for qualified and non-qualified options , restricted stock , performance awards and other awards , plus the number of shares of common stock which are or become available for issuance under the prior plan and which are not thereafter issued under the prior plan , subject to certain conditions .
unless otherwise determined by the board of directors at its sole discretion , options granted under the plans generally vest ratably over a range of three to five years , expire ten years from the date of grant and are exercisable at the market price on the date of grant .
restricted stock grants generally vest ( i ) 100% ( 100 % ) on the fourth or fifth anniversary of the grant , ( ii ) ratably over three or four years or ( iii ) over three years at 50% ( 50 % ) after two years and 50% ( 50 % ) after the third year .
performance share awards may provide a right to receive shares of restricted stock based on the company 2019s performance relative to its peers , as defined , or based on other performance criteria as determined by the board of directors .
in addition , the plans provide for the granting of certain options and restricted stock to each of the company 2019s non-employee directors ( the 201cindependent directors 201d ) and permits such independent directors to elect to receive deferred stock awards in lieu of directors 2019 fees .
the company accounts for stock options in accordance with fasb 2019s compensation 2014stock compensation guidance which requires that all share based payments to employees , including grants of employee stock options , be recognized in the statement of operations over the service period based on their fair values .
the fair value of each option award is estimated on the date of grant using the black-scholes option pricing formula .
the assump- tion for expected volatility has a significant affect on the grant date fair value .
volatility is determined based on the historical equity of common stock for the most recent historical period equal to the expected term of the options plus an implied volatility measure .
the more significant assumptions underlying the determination of fair values for options granted during 2010 , 2009 and 2008 were as follows : year ended december 31 , 2010 2009 2008 .

2009                                                | year ended december 31 2010 2009 | year ended december 31 2010 2009 | year ended december 31 2010
--------------------------------------------------- | -------------------------------- | -------------------------------- | ---------------------------
weighted average fair value of options granted      | $ 3.82                           | $ 3.16                           | $ 5.73
weighted average risk-free interest rates           | 2.40% ( 2.40 % )                 | 2.54% ( 2.54 % )                 | 3.13% ( 3.13 % )
weighted average expected option lives ( in years ) | 6.25                             | 6.25                             | 6.38
weighted average expected volatility                | 37.98% ( 37.98 % )               | 45.81% ( 45.81 % )               | 26.16% ( 26.16 % )
weighted average expected dividend yield            | 4.21% ( 4.21 % )                 | 5.48% ( 5.48 % )                 | 4.33% ( 4.33 % )


impairment of long-lived assets based on the projection of undiscounted cash flows whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable .
in the event such cash flows are not expected to be sufficient to recover the recorded value of the assets , the assets are written down to their estimated fair values ( see note 5 ) .
asset retirement obligations 2014effective january 1 , 2003 , the company adopted statement of financial accounting standards ( 2018 2018sfas 2019 2019 ) no .
143 , 2018 2018accounting for asset retirement obligations . 2019 2019 sfas no .
143 requires the company to record the fair value of a legal liability for an asset retirement obligation in the period in which it is incurred .
when a new liability is recorded the company will capitalize the costs of the liability by increasing the carrying amount of the related long-lived asset .
the liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset .
upon settlement of the liability , the company settles the obligation for its recorded amount or incurs a gain or loss upon settlement .
the company 2019s retirement obligations covered by sfas no .
143 include primarily active ash landfills , water treatment basins and the removal or dismantlement of certain plant and equipment .
as of december 31 , 2003 and 2002 , the company had recorded liabilities of approximately $ 29 million and $ 15 million , respectively , related to asset retirement obligations .
there are no assets that are legally restricted for purposes of settling asset retirement obligations .
upon adoption of sfas no .
143 , the company recorded an additional liability of approximately $ 13 million , a net asset of approximately $ 9 million , and a cumulative effect of a change in accounting principle of approximately $ 2 million , after income taxes .
amounts recorded related to asset retirement obligations during the years ended december 31 , 2003 were as follows ( in millions ) : .

balance at december 31 2002                                               | $ 15
------------------------------------------------------------------------- | --------
additional liability recorded from cumulative effect of accounting change | 13
accretion expense                                                         | 2
change in the timing of estimated cash flows                              | -1 ( 1 )
balance at december 31 2003                                               | $ 29

proforma net ( loss ) income and ( loss ) earnings per share have not been presented for the years ended december 31 , 2002 and 2001 because the proforma application of sfas no .
143 to prior periods would result in proforma net ( loss ) income and ( loss ) earnings per share not materially different from the actual amounts reported for those periods in the accompanying consolidated statements of operations .
had sfas 143 been applied during all periods presented the asset retirement obligation at january 1 , 2001 , december 31 , 2001 and december 31 , 2002 would have been approximately $ 21 million , $ 23 million and $ 28 million , respectively .
included in other long-term liabilities is the accrual for the non-legal obligations for removal of assets in service at ipalco amounting to $ 361 million and $ 339 million at december 31 , 2003 and 2002 , respectively .
deferred financing costs 2014financing costs are deferred and amortized over the related financing period using the effective interest method or the straight-line method when it does not differ materially from the effective interest method .
deferred financing costs are shown net of accumulated amortization of $ 202 million and $ 173 million as of december 31 , 2003 and 2002 , respectively .
project development costs 2014the company capitalizes the costs of developing new construction projects after achieving certain project-related milestones that indicate the project 2019s completion is probable .
these costs represent amounts incurred for professional services , permits , options , capitalized interest , and other costs directly related to construction .
these costs are transferred to construction in progress when significant construction activity commences , or expensed at the time the company determines that development of a particular project is no longer probable ( see note 5 ) .


19 .
income taxes ( continued ) capital loss carryforwards of $ 69 million and $ 90 million , which were acquired in the bgi transaction and will expire on or before 2013 .
at december 31 , 2012 and 2011 , the company had $ 95 million and $ 95 million of valuation allowances for deferred income tax assets , respectively , recorded on the consolidated statements of financial condition .
the year- over-year increase in the valuation allowance primarily related to certain foreign deferred income tax assets .
goodwill recorded in connection with the quellos transaction has been reduced during the period by the amount of tax benefit realized from tax-deductible goodwill .
see note 9 , goodwill , for further discussion .
current income taxes are recorded net in the consolidated statements of financial condition when related to the same tax jurisdiction .
as of december 31 , 2012 , the company had current income taxes receivable and payable of $ 102 million and $ 121 million , respectively , recorded in other assets and accounts payable and accrued liabilities , respectively .
as of december 31 , 2011 , the company had current income taxes receivable and payable of $ 108 million and $ 102 million , respectively , recorded in other assets and accounts payable and accrued liabilities , respectively .
the company does not provide deferred taxes on the excess of the financial reporting over tax basis on its investments in foreign subsidiaries that are essentially permanent in duration .
the excess totaled $ 2125 million and $ 1516 million as of december 31 , 2012 and 2011 , respectively .
the determination of the additional deferred income taxes on the excess has not been provided because it is not practicable due to the complexities associated with its hypothetical calculation .
the following tabular reconciliation presents the total amounts of gross unrecognized tax benefits : year ended december 31 , ( dollar amounts in millions ) 2012 2011 2010 .

( dollar amounts in millions )                           | year ended december 31 , 2012 | year ended december 31 , 2011 | year ended december 31 , 2010
-------------------------------------------------------- | ----------------------------- | ----------------------------- | -----------------------------
balance at january 1                                     | $ 349                         | $ 307                         | $ 285
additions for tax positions of prior years               | 4                             | 22                            | 10
reductions for tax positions of prior years              | -1 ( 1 )                      | -1 ( 1 )                      | -17 ( 17 )
additions based on tax positions related to current year | 69                            | 46                            | 35
lapse of statute of limitations                          | 2014                          | 2014                          | -8 ( 8 )
settlements                                              | -29 ( 29 )                    | -25 ( 25 )                    | -2 ( 2 )
positions assumed in acquisitions                        | 12                            | 2014                          | 4
balance at december 31                                   | $ 404                         | $ 349                         | $ 307

included in the balance of unrecognized tax benefits at december 31 , 2012 , 2011 and 2010 , respectively , are $ 250 million , $ 226 million and $ 194 million of tax benefits that , if recognized , would affect the effective tax rate .
the company recognizes interest and penalties related to income tax matters as a component of income tax expense .
related to the unrecognized tax benefits noted above , the company accrued interest and penalties of $ 3 million during 2012 and in total , as of december 31 , 2012 , had recognized a liability for interest and penalties of $ 69 million .
the company accrued interest and penalties of $ 10 million during 2011 and in total , as of december 31 , 2011 , had recognized a liability for interest and penalties of $ 66 million .
the company accrued interest and penalties of $ 8 million during 2010 and in total , as of december 31 , 2010 , had recognized a liability for interest and penalties of $ 56 million .
pursuant to the amended and restated stock purchase agreement , the company has been indemnified by barclays for $ 73 million and guggenheim for $ 6 million of unrecognized tax benefits .
blackrock is subject to u.s .
federal income tax , state and local income tax , and foreign income tax in multiple jurisdictions .
tax years after 2007 remain open to u.s .
federal income tax examination , tax years after 2005 remain open to state and local income tax examination , and tax years after 2006 remain open to income tax examination in the united kingdom .
with few exceptions , as of december 31 , 2012 , the company is no longer subject to u.s .
federal , state , local or foreign examinations by tax authorities for years before 2006 .
the internal revenue service ( 201cirs 201d ) completed its examination of blackrock 2019s 2006 and 2007 tax years in march 2011 .
in november 2011 , the irs commenced its examination of blackrock 2019s 2008 and 2009 tax years , and while the impact on the consolidated financial statements is undetermined , it is not expected to be material .
in july 2011 , the irs commenced its federal income tax audit of the bgi group , which blackrock acquired in december 2009 .
the tax years under examination are 2007 through december 1 , 2009 , and while the impact on the consolidated financial statements is undetermined , it is not expected to be material .
the company is currently under audit in several state and local jurisdictions .
the significant state and local income tax examinations are in california for tax years 2004 through 2006 , new york city for tax years 2007 through 2008 , and new jersey for tax years 2003 through 2009 .
no state and local income tax audits cover years earlier than 2007 except for california , new jersey and new york city .
no state and local income tax audits are expected to result in an assessment material to the consolidated financial statements.