worldwide wholesale distribution channels the following table presents the number of doors by geographic location in which products distributed by our wholesale segment were sold to consumers in our primary channels of distribution as of april 2 , 2016: .

location           | number of doors
------------------ | ---------------
the americas ( a ) | 7741
europe ( b )       | 5625
asia ( c )         | 136
total              | 13502

( a ) includes the u.s. , canada , and latin america .
( b ) includes the middle east .
( c ) includes australia and new zealand .
we have three key wholesale customers that generate significant sales volume .
during fiscal 2016 , sales to our largest wholesale customer , macy's , inc .
( "macy's" ) , accounted for approximately 11% ( 11 % ) and 25% ( 25 % ) of our total net revenues and total wholesale net revenues , respectively .
further , during fiscal 2016 , sales to our three largest wholesale customers , including macy's , accounted for approximately 24% ( 24 % ) and 53% ( 53 % ) of our total net revenues and total wholesale net revenues , respectively .
our products are sold primarily by our own sales forces .
our wholesale segment maintains its primary showrooms in new york city .
in addition , we maintain regional showrooms in milan , paris , london , munich , madrid , stockholm , and panama .
shop-within-shops .
as a critical element of our distribution to department stores , we and our licensing partners utilize shop-within-shops to enhance brand recognition , to permit more complete merchandising of our lines by the department stores , and to differentiate the presentation of our products .
as of april 2 , 2016 , we had approximately 25000 shop-within-shops in our primary channels of distribution dedicated to our wholesale products worldwide .
the size of our shop-within-shops ranges from approximately 100 to 9200 square feet .
shop-within-shop fixed assets primarily include items such as customized freestanding fixtures , wall cases and components , decorative items , and flooring .
we normally share in the cost of building out these shop-within-shops with our wholesale customers .
basic stock replenishment program .
basic products such as knit shirts , chino pants , oxford cloth shirts , select accessories , and home products can be ordered by our wholesale customers at any time through our basic stock replenishment program .
we generally ship these products within two to five days of order receipt .
our retail segment our retail segment sells directly to customers throughout the world via our 493 retail stores , totaling approximately 3.8 million square feet , and 583 concession-based shop-within-shops , as well as through our various e-commerce sites .
the extension of our direct-to-consumer reach is one of our primary long-term strategic goals .
we operate our retail business using an omni-channel retailing strategy that seeks to deliver an integrated shopping experience with a consistent message of our brands and products to our customers , regardless of whether they are shopping for our products in one of our physical stores or online .
ralph lauren stores our ralph lauren stores feature a broad range of apparel , accessories , watch and jewelry , fragrance , and home product assortments in an atmosphere reflecting the distinctive attitude and image of the ralph lauren , polo , double rl , and denim & supply brands , including exclusive merchandise that is not sold in department stores .
during fiscal 2016 , we opened 22 new ralph lauren stores and closed 21 stores .
our ralph lauren stores are primarily situated in major upscale street locations and upscale regional malls , generally in large urban markets.


international networks international networks generated revenues of $ 1637 million during 2012 , which represented 37% ( 37 % ) of our total consolidated revenues .
our international networks segment principally consists of national and pan-regional television networks .
this segment generates revenue from operations in virtually every pay-television market in the world through an infrastructure that includes operational centers in london , singapore and miami .
discovery channel , animal planet and tlc lead the international networks 2019 portfolio of television networks .
international networks has one of the largest international distribution platforms of networks with as many as fourteen networks in more than 200 countries and territories around the world .
at december 31 , 2012 , international networks operated over 180 unique distribution feeds in over 40 languages with channel feeds customized according to language needs and advertising sales opportunities .
international networks also has free-to-air networks in the u.k. , germany , italy and spain and continues to pursue international expansion .
our international networks segment owns and operates the following television networks which reached the following number of subscribers as of december 31 , 2012 : global networks international subscribers ( millions ) regional networks international subscribers ( millions ) .

global networks discovery channel | internationalsubscribers ( millions ) 246 | regional networks dmax        | internationalsubscribers ( millions ) 90
--------------------------------- | ----------------------------------------- | ----------------------------- | ----------------------------------------
animal planet                     | 183                                       | discovery kids                | 61
tlc real time and travel & living | 174                                       | quest                         | 26
discovery science                 | 75                                        | discovery history             | 13
investigation discovery           | 63                                        | shed                          | 12
discovery home & health           | 57                                        | discovery en espanol ( u.s. ) | 5
turbo                             | 42                                        | discovery familia ( u.s )     | 4
discovery world                   | 27                                        |                               |

on december 21 , 2012 , our international networks segment acquired 20% ( 20 % ) equity ownership interests in eurosport , a european sports satellite and cable network , and a portfolio of pay television networks from tf1 , a french media company , for $ 264 million , including transaction costs .
we have a call right that enables us to purchase a controlling interest in eurosport starting december 2014 and for one year thereafter .
if we exercise our call right , tf1 will have the right to put its remaining interest to us for one year thereafter .
the arrangement is intended to increase the growth of eurosport , which focuses on niche but regionally popular sports such as tennis , skiing , cycling and skating , and enhance our pay television offerings in france .
on december 28 , 2012 , we acquired switchover media , a group of five italian television channels with children's and entertainment programming .
( see note 3 to the accompanying consolidated financial statements. ) education education generated revenues of $ 105 million during 2012 , which represented 2% ( 2 % ) of our total consolidated revenues .
education is comprised of curriculum-based product and service offerings .
this segment generates revenues primarily from subscriptions charged to k-12 schools for access to an online suite of curriculum-based vod tools , professional development services , digital textbooks and , to a lesser extent , student assessments and publication of hardcopy curriculum-based content .
our education business also participates in global brand and content licensing and engages in partnerships with leading non-profits , corporations , foundations and trade associations .
content development our content development strategy is designed to increase viewership , maintain innovation and quality leadership , and provide value for our network distributors and advertising customers .
our content is sourced from a wide range of third-party producers , which include some of the world 2019s leading nonfiction production companies as well as independent producers .
our production arrangements fall into three categories : produced , coproduced and licensed .
substantially all produced content includes content that we engage third parties to develop and produce , while we retain editorial control and own most or all of the rights , in exchange for paying all development and production costs .
coproduced content refers to program rights that we have collaborated with third parties to finance and develop because at times world-wide rights are not available for acquisition or we save costs by collaborating with third parties .
licensed content is comprised of films or series that have been previously produced by third parties.


property and equipment property and equipment are recorded at cost .
the company provides for depreciation and amortization on a straight-line basis over the following estimated useful lives: .

land improvements                | 20
-------------------------------- | -----
buildings                        | 39-40
furniture fixtures and equipment | 3-10

improvements of leased properties are amortized over the shorter of the life of the applicable lease term or the estimated useful life of the asset .
impairment of long-lived assets when indicators of impairment are present , the company evaluates the carrying value of long-lived assets , other than goodwill , in relation to the operating performance and future cash flows or the appraised values of the underlying assets .
in accordance with sfas 144 , 201caccounting for the impairment or disposal of long-lived assets , 201d the company reviews for impairment stores open more than two years for which current cash flows from operations are negative .
impairment results when the carrying value of the assets exceeds the undiscounted future cash flows over the life of the lease .
the company 2019s estimate of undiscounted future cash flows over the lease term is based upon historical operations of the stores and estimates of future store profitability which encompasses many factors that are subject to variability and difficult to predict .
if a long-lived asset is found to be impaired , the amount recognized for impairment is equal to the difference between the carrying value and the asset 2019s fair value .
the fair value is estimated based primarily upon future cash flows ( discounted at the company 2019s credit adjusted risk-free rate ) or other reasonable estimates of fair market value .
assets to be disposed of are adjusted to the fair value less the cost to sell if less than the book value .
the company recorded impairment charges included in sg&a expense of approximately $ 0.2 million in the 2007 predecessor period , $ 9.4 million in 2006 and $ 0.6 million in 2005 to reduce the carrying value of certain of its stores 2019 assets as deemed necessary due to negative sales trends and cash flows at these locations .
the majority of the 2006 charges were recorded pursuant to certain strategic initiatives discussed in note 3 .
goodwill and other intangible assets the company amortizes intangible assets over their estimated useful lives unless such lives are deemed indefinite .
amortizable intangible assets are tested for impairment based on undiscounted cash flows , and , if impaired , written down to fair value based on either discounted cash flows or appraised values .
intangible assets with indefinite lives are tested annually for impairment and written down to fair value as required .
no impairment of intangible assets has been identified during any of the periods presented.


equipment and energy .

                 | 2013    | 2012    | 2011
---------------- | ------- | ------- | -------
sales            | $ 451.1 | $ 420.1 | $ 400.6
operating income | 65.5    | 44.6    | 62.8

2013 vs .
2012 sales of $ 451.1 increased primarily from higher lng project activity .
operating income of $ 65.5 increased from the higher lng project activity .
the sales backlog for the equipment business at 30 september 2013 was $ 402 , compared to $ 450 at 30 september 2012 .
it is expected that approximately $ 250 of the backlog will be completed during 2014 .
2012 vs .
2011 sales of $ 420.1 increased 5% ( 5 % ) , or $ 19.5 , reflecting higher air separation unit ( asu ) activity .
operating income of $ 44.6 decreased 29% ( 29 % ) , or $ 18.2 , reflecting lower lng project activity .
the sales backlog for the equipment business at 30 september 2012 was $ 450 , compared to $ 334 at 30 september 2011 .
other operating income ( loss ) primarily includes other expense and income that cannot be directly associated with the business segments , including foreign exchange gains and losses .
also included are lifo inventory valuation adjustments , as the business segments use fifo , and the lifo pool valuation adjustments are not allocated to the business segments .
other also included stranded costs resulting from discontinued operations , as these costs were not reallocated to the businesses in 2012 .
2013 vs .
2012 other operating loss was $ 4.7 , compared to $ 6.6 in the prior year .
the current year includes an unfavorable lifo adjustment versus the prior year of $ 11 .
the prior year loss included stranded costs from discontinued operations of $ 10 .
2012 vs .
2011 other operating loss was $ 6.6 , compared to $ 39.3 in the prior year , primarily due to a reduction in stranded costs , a decrease in the lifo adjustment as a result of decreases in inventory values , and favorable foreign exchange , partially offset by gains on asset sales in the prior year.


cross-border outstandings cross-border outstandings , as defined by bank regulatory rules , are amounts payable to state street by residents of foreign countries , regardless of the currency in which the claim is denominated , and local country claims in excess of local country obligations .
these cross-border outstandings consist primarily of deposits with banks , loan and lease financing and investment securities .
in addition to credit risk , cross-border outstandings have the risk that , as a result of political or economic conditions in a country , borrowers may be unable to meet their contractual repayment obligations of principal and/or interest when due because of the unavailability of , or restrictions on , foreign exchange needed by borrowers to repay their obligations .
cross-border outstandings to countries in which we do business which amounted to at least 1% ( 1 % ) of our consolidated total assets were as follows as of december 31: .

( in millions )                 | 2008   | 2007    | 2006
------------------------------- | ------ | ------- | ------
united kingdom                  | $ 5836 | $ 5951  | $ 5531
australia                       | 2044   | 3567    | 1519
canada                          | 2014   | 4565    | 2014
germany                         | 2014   | 2944    | 2696
total cross-border outstandings | $ 7880 | $ 17027 | $ 9746

the total cross-border outstandings presented in the table represented 5% ( 5 % ) , 12% ( 12 % ) and 9% ( 9 % ) of our consolidated total assets as of december 31 , 2008 , 2007 and 2006 , respectively .
aggregate cross-border outstandings to countries which totaled between .75% ( .75 % ) and 1% ( 1 % ) of our consolidated total assets at december 31 , 2008 amounted to $ 3.45 billion ( canada and germany ) .
there were no cross-border outstandings to countries which totaled between .75% ( .75 % ) and 1% ( 1 % ) of our consolidated total assets as of december 31 , 2007 .
aggregate cross-border outstandings to countries which totaled between .75% ( .75 % ) and 1% ( 1 % ) of our consolidated total assets at december 31 , 2006 amounted to $ 1.05 billion ( canada ) .
capital regulatory and economic capital management both use key metrics evaluated by management to assess whether our actual level of capital is commensurate with our risk profile , is in compliance with all regulatory requirements , and is sufficient to provide us with the financial flexibility to undertake future strategic business initiatives .
regulatory capital our objective with respect to regulatory capital management is to maintain a strong capital base in order to provide financial flexibility for our business needs , including funding corporate growth and supporting customers 2019 cash management needs , and to provide protection against loss to depositors and creditors .
we strive to maintain an optimal level of capital , commensurate with our risk profile , on which an attractive return to shareholders will be realized over both the short and long term , while protecting our obligations to depositors and creditors and satisfying regulatory requirements .
our capital management process focuses on our risk exposures , our capital position relative to our peers , regulatory capital requirements and the evaluations of the major independent credit rating agencies that assign ratings to our public debt .
our capital committee , working in conjunction with our asset and liability committee , referred to as alco , oversees the management of regulatory capital , and is responsible for ensuring capital adequacy with respect to regulatory requirements , internal targets and the expectations of the major independent credit rating agencies .
the primary regulator of both state street and state street bank for regulatory capital purposes is the federal reserve .
both state street and state street bank are subject to the minimum capital requirements established by the federal reserve and defined in the federal deposit insurance corporation improvement act


36 duke realty corporation annual report 2013 leasing/capital costs tenant improvements and lease-related costs pertaining to our initial leasing of newly completed space , or vacant space in acquired properties , are referred to as first generation expenditures .
such first generation expenditures for tenant improvements are included within "development of real estate investments" in our consolidated statements of cash flows , while such expenditures for lease-related costs are included within "other deferred leasing costs." cash expenditures related to the construction of a building's shell , as well as the associated site improvements , are also included within "development of real estate investments" in our consolidated statements of cash flows .
tenant improvements and leasing costs to re-let rental space that we previously leased to tenants are referred to as second generation expenditures .
building improvements that are not specific to any tenant but serve to improve integral components of our real estate properties are also second generation expenditures .
one of our principal uses of our liquidity is to fund the second generation leasing/capital expenditures of our real estate investments .
the following table summarizes our second generation capital expenditures by type of expenditure ( in thousands ) : .

                                             | 2013     | 2012     | 2011
-------------------------------------------- | -------- | -------- | --------
second generation tenant improvements        | $ 39892  | $ 26643  | $ 50079
second generation leasing costs              | 38617    | 31059    | 38130
building improvements                        | 13289    | 6182     | 11055
total second generation capital expenditures | $ 91798  | $ 63884  | $ 99264
development of real estate investments       | $ 427355 | $ 264755 | $ 162070
other deferred leasing costs                 | $ 35376  | $ 27772  | $ 26311

second generation tenant improvements and leasing costs increased due to a shift in industrial leasing volume from renewal leases to second generation leases ( see data in the key performance indicators section of management's discussion and analysis of financial condition and results of operations ) , which are generally more capital intensive .
additionally , although the overall renewal volume was lower , renewals for office leases , which are generally more capital intensive than industrial leases , increased from 2012 .
during 2013 , we increased our investment across all product types in non-tenant specific building improvements .
the increase in capital expenditures for the development of real estate investments was the result of our increased focus on wholly owned development projects .
we had wholly owned properties under development with an expected cost of $ 572.6 million at december 31 , 2013 , compared to projects with an expected cost of $ 468.8 million and $ 124.2 million at december 31 , 2012 and 2011 , respectively .
cash outflows for real estate development investments were $ 427.4 million , $ 264.8 million and $ 162.1 million for december 31 , 2013 , 2012 and 2011 , respectively .
we capitalized $ 31.3 million , $ 30.4 million and $ 25.3 million of overhead costs related to leasing activities , including both first and second generation leases , during the years ended december 31 , 2013 , 2012 and 2011 , respectively .
we capitalized $ 27.1 million , $ 20.0 million and $ 10.4 million of overhead costs related to development activities , including construction , development and tenant improvement projects on first and second generation space , during the years ended december 31 , 2013 , 2012 and 2011 , respectively .
combined overhead costs capitalized to leasing and development totaled 35.7% ( 35.7 % ) , 31.1% ( 31.1 % ) and 20.6% ( 20.6 % ) of our overall pool of overhead costs at december 31 , 2013 , 2012 and 2011 , respectively .
further discussion of the capitalization of overhead costs can be found herein , in the discussion of general and administrative expenses in the comparison sections of management's discussion and analysis of financial condition and results of operations.


the containerboard group ( a division of tenneco packaging inc. ) notes to combined financial statements ( continued ) april 11 , 1999 5 .
pension and other benefit plans ( continued ) the funded status of the group 2019s allocation of defined benefit plans , excluding the retirement plan , reconciles with amounts recognized in the 1998 statements of assets and liabilities and interdivision account as follows ( in thousands ) : actuarial present value at september 30 , 1998 2014 .

vested benefit obligation                      | $ -98512 ( 98512 )
---------------------------------------------- | --------------------
accumulated benefit obligation                 | -108716 ( 108716 )
projected benefit obligation                   | $ -108716 ( 108716 )
plan assets at fair value at september 30 1998 | 146579
unrecognized transition liability              | -1092 ( 1092 )
unrecognized net gain                          | -14623 ( 14623 )
unrecognized prior service cost                | 13455
prepaid pension cost at december 31 1998       | $ 35603

the weighted average discount rate used in determining the actuarial present value of the benefit obligations was 7.00% ( 7.00 % ) for the year ended december 31 , 1998 .
the weighted average expected long-term rate of return on plan assets was 10% ( 10 % ) for 1998 .
middle management employees participate in a variety of incentive compensation plans .
these plans provide for incentive payments based on the achievement of certain targeted operating results and other specific business goals .
the targeted operating results are determined each year by senior management of packaging .
the amounts charged to expense for these plans were $ 1599000 for the period ended april 11 , 1999 .
in june , 1992 , tenneco initiated an employee stock purchase plan ( 2018 2018espp 2019 2019 ) .
the plan allows u.s .
and canadian employees of the group to purchase tenneco inc .
common stock through payroll deductions at a 15% ( 15 % ) discount .
each year , an employee in the plan may purchase shares with a discounted value not to exceed $ 21250 .
the weighted average fair value of the employee purchase right , which was estimated using the black-scholes option pricing model and the assumptions described below except that the average life of each purchase right was assumed to be 90 days , was $ 6.31 for the period ended december 31 , 1998 .
the espp was terminated as of september 30 , 1996 .
tenneco adopted a new employee stock purchase plan effective april 1 , 1997 .
under the respective espps , tenneco sold 36883 shares to group employees for the period ended april 11 , 1999 .
in december , 1996 , tenneco adopted the 1996 stock ownership plan , which permits the granting of a variety of awards , including common stock , restricted stock , performance units , stock appreciation rights , and stock options to officers and employees of tenneco .
tenneco can issue up to 17000000 shares of common stock under this plan , which will terminate december 31 , 2001 .
the april 11 , 1999 , fair market value of the options granted was calculated using tenneco 2019s stock price at the grant date and multiplying the amount by the historical percentage of past black-scholes pricing values fair value ( approximately 25% ( 25 % ) ) .
the fair value of each stock option issued by tenneco to the group in prior periods was estimated on the date of grant using the black-sholes option pricing model using the following ranges of weighted average assumptions for grants during the past three


table of contents the following table discloses purchases of shares of our common stock made by us or on our behalf during the fourth quarter of 2015 .
period total number of shares purchased average price paid per share total number of shares not purchased as part of publicly announced plans or programs ( a ) total number of shares purchased as part of publicly announced plans or programs approximate dollar value of shares that may yet be purchased under the plans or programs ( b ) .

period        | total numberof sharespurchased | averageprice paidper share | total number ofshares notpurchased as part ofpublicly announcedplans or programs ( a ) | total number ofshares purchased aspart of publiclyannounced plans orprograms | approximate dollarvalue of shares thatmay yet be purchasedunder the plans orprograms ( b )
------------- | ------------------------------ | -------------------------- | -------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------
october 2015  | 1658771                        | $ 62.12                    | 842059                                                                                | 816712                                                                       | $ 2.0 billion
november 2015 | 2412467                        | $ 71.08                    | 212878                                                                                | 2199589                                                                      | $ 1.8 billion
december 2015 | 7008414                        | $ 70.31                    | 980                                                                                | 7007434                                                                      | $ 1.3 billion
total         | 11079652                       | $ 69.25                    | 1055917                                                                                | 10023735                                                                     | $ 1.3 billion

( a ) the shares reported in this column represent purchases settled in the fourth quarter of 2015 relating to ( i ) our purchases of shares in open-market transactions to meet our obligations under stock-based compensation plans , and ( ii ) our purchases of shares from our employees and non-employee directors in connection with the exercise of stock options , the vesting of restricted stock , and other stock compensation transactions in accordance with the terms of our stock-based compensation plans .
( b ) on july 13 , 2015 , we announced that our board of directors approved our purchase of $ 2.5 billion of our outstanding common stock ( with no expiration date ) , which was in addition to the remaining amount available under our $ 3 billion program previously authorized .
during the third quarter of 2015 , we completed our purchases under the $ 3 billion program .
as of december 31 , 2015 , we had $ 1.3 billion remaining available for purchase under the $ 2.5 billion program.


part iii item 10 .
directors , and executive officers and corporate governance .
pursuant to section 406 of the sarbanes-oxley act of 2002 , we have adopted a code of ethics for senior financial officers that applies to our principal executive officer and principal financial officer , principal accounting officer and controller , and other persons performing similar functions .
our code of ethics for senior financial officers is publicly available on our website at www.hologic.com .
we intend to satisfy the disclosure requirement under item 5.05 of current report on form 8-k regarding an amendment to , or waiver from , a provision of this code by posting such information on our website , at the address specified above .
the additional information required by this item is incorporated by reference to our definitive proxy statement for our annual meeting of stockholders to be filed with the securities and exchange commission within 120 days after the close of our fiscal year .
item 11 .
executive compensation .
the information required by this item is incorporated by reference to our definitive proxy statement for our annual meeting of stockholders to be filed with the securities and exchange commission within 120 days after the close of our fiscal year .
item 12 .
security ownership of certain beneficial owners and management and related stockholder matters .
we maintain a number of equity compensation plans for employees , officers , directors and others whose efforts contribute to our success .
the table below sets forth certain information as of the end of our fiscal year ended september 27 , 2008 regarding the shares of our common stock available for grant or granted under stock option plans and equity incentives that ( i ) were approved by our stockholders , and ( ii ) were not approved by our stockholders .
the number of securities and the exercise price of the outstanding securities have been adjusted to reflect our two-for-one stock splits effected on november 30 , 2005 and april 2 , 2008 .
equity compensation plan information plan category number of securities to be issued upon exercise of outstanding options , warrants and rights 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 ) ) equity compensation plans approved by security holders .
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15370814 $ 16.10 19977099 equity compensation plans not approved by security holders ( 1 ) .
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582881 $ 3.79 2014 .

plan category                                                    | number of securities to be issued upon exercise of outstanding options warrants and rights ( a ) | weighted-average exercise price of outstanding options warrants and rights ( b ) | number of securities remaining available for future issuance under equity compensation plans ( excluding securities reflected in column ( a ) ) ( c )
---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------
equity compensation plans approved by security holders           | 15370814                                                                                | $ 16.10                                                                          | 19977099
equity compensation plans not approved by security holders ( 1 ) | 582881                                                                                | $ 3.79                                                                           | 2014
total                                                            | 15953695                                                                                | $ 15.65                                                                          | 19977099

( 1 ) includes the following plans : 1997 employee equity incentive plan and 2000 acquisition equity incentive plan .
a description of each of these plans is as follows : 1997 employee equity incentive plan .
the purposes of the 1997 employee equity incentive plan ( the 201c1997 plan 201d ) , adopted by the board of directors in may 1997 , are to attract and retain key employees , consultants and advisors , to provide an incentive for them to assist us in achieving long-range performance goals , and to enable such person to participate in our long-term growth .
in general , under the 1997 plan , all employees


page 73 of 98 notes to consolidated financial statements ball corporation and subsidiaries 15 .
shareholders 2019 equity at december 31 , 2006 , the company had 550 million shares of common stock and 15 million shares of preferred stock authorized , both without par value .
preferred stock includes 120000 authorized but unissued shares designated as series a junior participating preferred stock .
under the company 2019s shareholder rights agreement dated july 26 , 2006 , one preferred stock purchase right ( right ) is attached to each outstanding share of ball corporation common stock .
subject to adjustment , each right entitles the registered holder to purchase from the company one one-thousandth of a share of series a junior participating preferred stock at an exercise price of $ 185 per right .
if a person or group acquires 10 percent or more of the company 2019s outstanding common stock ( or upon occurrence of certain other events ) , the rights ( other than those held by the acquiring person ) become exercisable and generally entitle the holder to purchase shares of ball corporation common stock at a 50 percent discount .
the rights , which expire in 2016 , are redeemable by the company at a redemption price of $ 0.001 per right and trade with the common stock .
exercise of such rights would cause substantial dilution to a person or group attempting to acquire control of the company without the approval of ball 2019s board of directors .
the rights would not interfere with any merger or other business combinations approved by the board of directors .
the company reduced its share repurchase program in 2006 to $ 45.7 million , net of issuances , compared to $ 358.1 million net repurchases in 2005 and $ 50 million in 2004 .
the net repurchases in 2006 did not include a forward contract entered into in december 2006 for the repurchase of 1200000 shares .
the contract was settled on january 5 , 2007 , for $ 51.9 million in cash .
in connection with the employee stock purchase plan , the company contributes 20 percent of up to $ 500 of each participating employee 2019s monthly payroll deduction toward the purchase of ball corporation common stock .
company contributions for this plan were $ 3.2 million in 2006 , $ 3.2 million in 2005 and $ 2.7 million in 2004 .
accumulated other comprehensive earnings ( loss ) the activity related to accumulated other comprehensive earnings ( loss ) was as follows : ( $ in millions ) foreign currency translation pension and postretirement items , net of tax effective financial derivatives , net of tax accumulated comprehensive earnings ( loss ) .

( $ in millions ) | foreign currency translation | pension and other postretirement items net of tax | effective financial derivatives net of tax | accumulated other comprehensive earnings ( loss )
----------------- | ---------------------------- | ------------------------------------------------- | ------------------------------------------ | -------------------------------------------------
december 31 2003  | $ 80.7                       | $ -93.1 ( 93.1 )                                  | $ 11.0                                     | $ -1.4 ( 1.4 )
2004 change       | 68.2                         | -33.2 ( 33.2 )                                    | -0.4 ( 0.4 )                               | 34.6
december 31 2004  | 148.9                        | -126.3 ( 126.3 )                                  | 10.6                                       | 33.2
2005 change       | -74.3 ( 74.3 )               | -43.6 ( 43.6 )                                    | -16.0 ( 16.0 )                             | -133.9 ( 133.9 )
december 31 2005  | 74.6                         | -169.9 ( 169.9 )                                  | -5.4 ( 5.4 )                               | -100.7 ( 100.7 )
2006 change       | 57.2                         | 8.0                                               | 6.0                                        | 71.2
december 31 2006  | $ 131.8                      | $ -161.9 ( 161.9 )                                | $ 0.6                                      | $ -29.5 ( 29.5 )

notwithstanding the 2005 distribution pursuant to the jobs act , management 2019s intention is to indefinitely reinvest foreign earnings .
therefore , no taxes have been provided on the foreign currency translation component for any period .
the change in the minimum pension liability is presented net of related tax expense of $ 2.9 million for 2006 and related tax benefits of $ 27.3 million and $ 20.8 million for 2005 and 2004 , respectively .
the change in the effective financial derivatives is presented net of related tax expense of $ 5.7 million for 2006 , related tax benefit of $ 10.7 million for 2005 and related tax benefit of $ 0.2 million for 2004.


based on the results of the second step of testing , at december 31 , 2008 , the company recorded a $ 9.6 billion pretax ( $ 8.7 billion after-tax ) goodwill impairment charge in the fourth quarter of 2008 , representing most of the goodwill allocated to these reporting units .
the primary cause for the goodwill impairment at december 31 , 2008 in the above reporting units was rapid deterioration in the financial markets , as well as in the global economic outlook particularly during the period beginning mid-november through year-end 2008 .
the more significant fair value adjustments in the pro forma purchase price allocation in the second step of testing were to fair value loans and debt and were made to identify and value identifiable intangibles .
the adjustments to measure the assets , liabilities and intangibles were for the purpose of measuring the implied fair value of goodwill and such adjustments are not reflected in the consolidated balance sheet .
the following table shows reporting units with goodwill balances and the excess of fair value as a percentage over allocated book value as of december 31 , 2009 .
in millions of dollars reporting unit ( 1 ) fair value as a % (  % ) of allocated book value goodwill .

reporting unit ( 1 )                    | fair value as a % (  % ) of allocated book value | goodwill
--------------------------------------- | ------------------------------------------------ | --------
north america regional consumer banking | 174% ( 174 % )                                   | $ 2453
emea regional consumer banking          | 163                                              | 255
asia regional consumer banking          | 303                                              | 5533
latin america regional consumer banking | 215                                              | 1352
securities and banking                  | 203                                              | 8784
transaction services                    | 2079                                             | 1573
brokerage and asset management          | 161                                              | 759
local consumer lending 2014cards        | 112                                              | 4683

( 1 ) local consumer lending 2014other is excluded from the table as there is no goodwill allocated to it .
while no impairment was noted in step one of the company 2019s local consumer lending 2014cards reporting unit impairment test at november 30 , 2009 , goodwill present in that reporting unit may be particularly sensitive to further deterioration in economic conditions .
under the market approach for valuing this reporting unit , the earnings multiples and transaction multiples were selected from multiples obtained using data from guideline companies and acquisitions .
the selection of the actual multiple considers operating performance and financial condition such as return on equity and net income growth of local consumer lending 2014cards as compared to the guideline companies and acquisitions .
for the valuation under the income approach , the company utilized a discount rate , which it believes reflects the risk and uncertainty related to the projected cash flows , and selected 2012 as the terminal year .
small deterioration in the assumptions used in the valuations , in particular the discount rate and growth rate assumptions used in the net income projections , could significantly affect the company 2019s impairment evaluation and , hence , results .
if the future were to differ adversely from management 2019s best estimate of key economic assumptions and associated cash flows were to decrease by a small margin , the company could potentially experience future material impairment charges with respect to $ 4683 million of goodwill remaining in our local consumer lending 2014 cards reporting unit .
any such charges , by themselves , would not negatively affect the company 2019s tier 1 , tier 1 common and total capital regulatory ratios , its tangible common equity or the company 2019s liquidity position.


notes to consolidated financial statements ( continued ) 17 .
pension plans and postretirement health care and life insurance benefit plans ( continued ) benefit payments the following table sets forth amounts of benefits expected to be paid over the next ten years from the company 2019s pension and postretirement plans as of december 31 , 2004: .

          | pension benefits | other postretirement benefits
--------- | ---------------- | -----------------------------
2005      | $ 125            | $ 30
2006      | 132              | 31
2007      | 143              | 31
2008      | 154              | 33
2009      | 166              | 34
2010-2014 | 1052             | 193
total     | $ 1772           | $ 352

18 .
stock compensation plans on may 18 , 2000 , the shareholders of the hartford approved the hartford incentive stock plan ( the 201c2000 plan 201d ) , which replaced the hartford 1995 incentive stock plan ( the 201c1995 plan 201d ) .
the terms of the 2000 plan were substantially similar to the terms of the 1995 plan except that the 1995 plan had an annual award limit and a higher maximum award limit .
under the 2000 plan , awards may be granted in the form of non-qualified or incentive stock options qualifying under section 422a of the internal revenue code , performance shares or restricted stock , or any combination of the foregoing .
in addition , stock appreciation rights may be granted in connection with all or part of any stock options granted under the 2000 plan .
in december 2004 , the 2000 plan was amended to allow for grants of restricted stock units effective as of january 1 , 2005 .
the aggregate number of shares of stock , which may be awarded , is subject to a maximum limit of 17211837 shares applicable to all awards for the ten-year duration of the 2000 plan .
all options granted have an exercise price equal to the market price of the company 2019s common stock on the date of grant , and an option 2019s maximum term is ten years and two days .
certain options become exercisable over a three year period commencing one year from the date of grant , while certain other options become exercisable upon the attainment of specified market price appreciation of the company 2019s common shares .
for any year , no individual employee may receive an award of options for more than 1000000 shares .
as of december 31 , 2004 , the hartford had not issued any incentive stock options under the 2000 plan .
performance awards of common stock granted under the 2000 plan become payable upon the attainment of specific performance goals achieved over a period of not less than one nor more than five years , and the restricted stock granted is subject to a restriction period .
on a cumulative basis , no more than 20% ( 20 % ) of the aggregate number of shares which may be awarded under the 2000 plan are available for performance shares and restricted stock awards .
also , the maximum award of performance shares for any individual employee in any year is 200000 shares .
in 2004 , 2003 and 2002 , the company granted shares of common stock of 315452 , 333712 and 40852 with weighted average prices of $ 64.93 , $ 38.13 and $ 62.28 , respectively , related to performance share and restricted stock awards .
in 1996 , the company established the hartford employee stock purchase plan ( 201cespp 201d ) .
under this plan , eligible employees of the hartford may purchase common stock of the company at a 15% ( 15 % ) discount from the lower of the closing market price at the beginning or end of the quarterly offering period .
the company may sell up to 5400000 shares of stock to eligible employees under the espp .
in 2004 , 2003 and 2002 , 345262 , 443467 and 408304 shares were sold , respectively .
the per share weighted average fair value of the discount under the espp was $ 9.31 , $ 11.96 , and $ 11.70 in 2004 , 2003 and 2002 , respectively .
additionally , during 1997 , the hartford established employee stock purchase plans for certain employees of the company 2019s international subsidiaries .
under these plans , participants may purchase common stock of the hartford at a fixed price at the end of a three-year period .
the activity under these programs is not material.


advance auto parts , inc .
and subsidiaries notes to the consolidated financial statements 2013 ( continued ) december 29 , 2007 , december 30 , 2006 and december 31 , 2005 ( in thousands , except per share data ) 11 .
stock repurchase program : during fiscal 2007 , the company's board of directors authorized a new stock repurchase program of up to $ 500000 of the company's common stock plus related expenses .
the new program cancelled and replaced the remaining portion of the previous $ 300000 stock repurchase program .
the program allows the company to repurchase its common stock on the open market or in privately negotiated transactions from time to time in accordance with the requirements of the securities and exchange commission .
during fiscal 2007 , the company repurchased 8341 shares of common stock at an aggregate cost of $ 285869 , or an average price of $ 34.27 per share , of which 1330 shares of common stock were repurchased under the previous $ 300000 stock repurchase program .
as of december 29 , 2007 , 77 shares have been repurchased at an aggregate cost of $ 2959 and remained unsettled .
during fiscal 2007 , the company retired 6329 shares previously repurchased under the stock repurchase programs .
at december 29 , 2007 , the company had $ 260567 remaining under the current stock repurchase program .
subsequent to december 29 , 2007 , the company repurchased 4563 shares of common stock at an aggregate cost of $ 155350 , or an average price of $ 34.04 per share .
during fiscal 2006 , the company retired 5117 shares of common stock which were previously repurchased under the company 2019s prior stock repurchase program .
these shares were repurchased during fiscal 2006 and fiscal 2005 at an aggregate cost of $ 192339 , or an average price of $ 37.59 per share .
12 .
income taxes : as a result of the adoption of fin 48 on december 31 , 2006 , the company recorded an increase of $ 2275 to the liability for unrecognized tax benefits and a corresponding decrease in its balance of retained earnings .
the following table summarizes the activity related to our unrecognized tax benefits for the fiscal year ended december 29 , 2007: .

balance at december 31 2006                             | $ 16453
------------------------------------------------------- | --------------
gross increases related to prior period tax positions   | 1279
gross decreases related to prior period tax positions   | -1853 ( 1853 )
gross increases related to current period tax positions | 5340
settlements                                             | -539 ( 539 )
expiration of statute of limitations                    | -271 ( 271 )
balance at december 29 2007                             | $ 20409

as of december 29 , 2007 the entire amount of unrecognized tax benefits , if recognized , would reduce the company 2019s annual effective tax rate .
with the adoption of fin 48 , the company provides for interest and penalties as a part of income tax expense .
during fiscal 2007 , the company accrued potential penalties and interest of $ 709 and $ 1827 , respectively , related to these unrecognized tax benefits .
as of december 29 , 2007 , the company has recorded a liability for potential penalties and interest of $ 1843 and $ 4421 , respectively .
prior to the adoption of fin 48 , the company classified interest associated with tax contingencies in interest expense .
the company has not provided for any penalties associated with tax contingencies unless considered probable of assessment .
the company does not expect its unrecognized tax benefits to change significantly over the next 12 months .
during the next 12 months , it is possible the company could conclude on $ 2000 to $ 3000 of the contingencies associated with unrecognized tax uncertainties due mainly to settlements and expiration of statute of limitations ( including tax benefits , interest and penalties ) .
the majority of these resolutions would be achieved through the completion of current income tax examinations.


year ended december 31 , 2006 compared to year ended december 31 , 2005 net revenues increased $ 149.6 million , or 53.2% ( 53.2 % ) , to $ 430.7 million in 2006 from $ 281.1 million in 2005 .
this increase was the result of increases in both our net sales and license revenues as noted in the product category table below. .

( in thousands )   | year ended december 31 , 2006 | year ended december 31 , 2005 | year ended december 31 , $ change | year ended december 31 , % (  % ) change
------------------ | ----------------------------- | ----------------------------- | --------------------------------- | ----------------------------------------
men 2019s          | $ 255681                      | $ 189596                      | $ 66085                           | 34.9% ( 34.9 % )
women 2019s        | 85695                         | 53500                         | 32195                             | 60.2% ( 60.2 % )
youth              | 31845                         | 18784                         | 13061                             | 69.5% ( 69.5 % )
apparel            | 373221                        | 261880                        | 111341                            | 42.5% ( 42.5 % )
footwear           | 26874                         | 2014                          | 26874                             | 2014
accessories        | 14897                         | 9409                          | 5488                              | 58.3% ( 58.3 % )
total net sales    | 414992                        | 271289                        | 143703                            | 53.0% ( 53.0 % )
license revenues   | 15697                         | 9764                          | 5933                              | 60.8% ( 60.8 % )
total net revenues | $ 430689                      | $ 281053                      | $ 149636                          | 53.2% ( 53.2 % )

net sales increased $ 143.7 million , or 53.0% ( 53.0 % ) , to $ 415.0 million for the year ended december 31 , 2006 from $ 271.3 million during the same period in 2005 as noted in the table above .
the increase in net sales primarily reflects : 2022 $ 26.9 million of footwear product sales , primarily football cleats introduced in the second quarter of 2006 , and baseball cleats introduced in the fourth quarter of 2006 ; 2022 continued unit volume growth of our existing products , such as coldgear ae compression products , primarily sold to existing retail customers due to additional retail stores and expanded floor space ; 2022 growth in the average selling price of apparel products within all categories ; 2022 increased women 2019s and youth market penetration by leveraging current customer relationships ; and 2022 product introductions subsequent to december 31 , 2005 within all product categories , most significantly in our compression and training products .
license revenues increased $ 5.9 million , or 60.8% ( 60.8 % ) , to $ 15.7 million for the year ended december 31 , 2006 from $ 9.8 million during the same period in 2005 .
this increase in license revenues was a result of increased sales by our licensees due to increased distribution , continued unit volume growth , new product offerings and new licensing agreements , which included distribution of products to college bookstores and golf pro shops .
gross profit increased $ 79.7 million to $ 215.6 million in 2006 from $ 135.9 million in 2005 .
gross profit as a percentage of net revenues , or gross margin , increased approximately 180 basis points to 50.1% ( 50.1 % ) in 2006 from 48.3% ( 48.3 % ) in 2005 .
this increase in gross margin was primarily driven by the following : 2022 lower product costs as a result of variations in product mix and greater supplier discounts for increased volume and lower cost sourcing arrangements , accounting for an approximate 170 basis point increase ; 2022 decreased close-out sales in the 2006 period compared to the 2005 period , accounting for an approximate 70 basis point increase ; 2022 lower customer incentives as a percentage of net revenues , primarily driven by changes to certain customer agreements which decreased discounts while increasing certain customer marketing expenditures recorded in selling , general and administrative expenses , accounting for an approximate 70 basis point increase;


transactions arising from all matching buy/sell arrangements entered into before april 1 , 2006 will continue to be reported as separate sale and purchase transactions .
the adoption of eitf issue no .
04-13 and the change in the accounting for nontraditional derivative instruments had no effect on net income .
the amounts of revenues and cost of revenues recognized after april 1 , 2006 are less than the amounts that would have been recognized under previous accounting practices .
sfas no .
123 ( revised 2004 ) 2013 in december 2004 , the fasb issued sfas no .
123 ( r ) , 2018 2018share-based payment , 2019 2019 as a revision of sfas no .
123 , 2018 2018accounting for stock-based compensation . 2019 2019 this statement requires entities to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the grant date .
that cost is recognized over the period during which an employee is required to provide service in exchange for the award , usually the vesting period .
in addition , awards classified as liabilities are remeasured at fair value each reporting period .
marathon had previously adopted the fair value method under sfas no .
123 for grants made , modified or settled on or after january 1 , 2003 .
sfas no .
123 ( r ) also requires a company to calculate the pool of excess tax benefits available to absorb tax deficiencies recognized subsequent to adopting the statement .
in november 2005 , the fasb issued fsp no .
123r-3 , 2018 2018transition election related to accounting for the tax effects of share-based payment awards , 2019 2019 to provide an alternative transition election ( the 2018 2018short-cut method 2019 2019 ) to account for the tax effects of share-based payment awards to employees .
marathon elected the long-form method to determine its pool of excess tax benefits as of january 1 , 2006 .
marathon adopted sfas no .
123 ( r ) as of january 1 , 2006 , for all awards granted , modified or cancelled after adoption and for the unvested portion of awards outstanding at january 1 , 2006 .
at the date of adoption , sfas no .
123 ( r ) requires that an assumed forfeiture rate be applied to any unvested awards and that awards classified as liabilities be measured at fair value .
prior to adopting sfas no .
123 ( r ) , marathon recognized forfeitures as they occurred and applied the intrinsic value method to awards classified as liabilities .
the adoption did not have a significant effect on marathon 2019s consolidated results of operations , financial position or cash flows .
sfas no .
151 2013 effective january 1 , 2006 , marathon adopted sfas no .
151 , 2018 2018inventory costs 2013 an amendment of arb no .
43 , chapter 4 . 2019 2019 this statement requires that items such as idle facility expense , excessive spoilage , double freight and re-handling costs be recognized as a current-period charge .
the adoption did not have a significant effect on marathon 2019s consolidated results of operations , financial position or cash flows .
sfas no .
154 2013 effective january 1 , 2006 , marathon adopted sfas no .
154 , 2018 2018accounting changes and error corrections 2013 a replacement of apb opinion no .
20 and fasb statement no .
3 . 2019 2019 sfas no .
154 requires companies to recognize ( 1 ) voluntary changes in accounting principle and ( 2 ) changes required by a new accounting pronouncement , when the pronouncement does not include specific transition provisions , retrospectively to prior periods 2019 financial statements , unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change .
fin no .
47 2013 in march 2005 , the fasb issued fasb interpretation ( 2018 2018fin 2019 2019 ) no .
47 , 2018 2018accounting for conditional asset retirement obligations 2013 an interpretation of fasb statement no .
143 . 2019 2019 this interpretation clarifies that an entity is required to recognize a liability for a legal obligation to perform asset retirement activities when the retirement is conditional on a future event if the liability 2019s fair value can be reasonably estimated .
if the liability 2019s fair value cannot be reasonably estimated , then the entity must disclose ( 1 ) a description of the obligation , ( 2 ) the fact that a liability has not been recognized because the fair value cannot be reasonably estimated and ( 3 ) the reasons why the fair value cannot be reasonably estimated .
fin no .
47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation .
marathon adopted fin no .
47 as of december 31 , 2005 .
a charge of $ 19 million , net of taxes of $ 12 million , related to adopting fin no .
47 was recognized as a cumulative effect of a change in accounting principle in 2005 .
at the time of adoption , total assets increased $ 22 million and total liabilities increased $ 41 million .
the pro forma net income and net income per share effect as if fin no .
47 had been applied during 2005 and 2004 is not significantly different than amounts reported .
the following summarizes the total amount of the liability for asset retirement obligations as if fin no .
47 had been applied during all periods presented .
the pro forma impact of the adoption of fin no .
47 on these unaudited pro forma liability amounts has been measured using the information , assumptions and interest rates used to measure the obligation recognized upon adoption of fin no .
47 .
( in millions ) .

december 31 2003 | $ 438
---------------- | -----
december 31 2004 | 527
december 31 2005 | 711

sfas no .
153 2013 marathon adopted sfas no .
153 , 2018 2018exchanges of nonmonetary assets 2013 an amendment of apb opinion no .
29 , 2019 2019 on a prospective basis as of july 1 , 2005 .
this amendment eliminates the apb opinion no .
29 exception for fair value recognition of nonmonetary exchanges of similar productive assets and replaces it with an exception for exchanges of nonmonetary assets that do not have commercial substance .
fsp no .
fas 19-1 2013 effective january 1 , 2005 , marathon adopted fsp no .
fas 19-1 , 2018 2018accounting for suspended well costs , 2019 2019 which amended the guidance for suspended exploratory well costs in sfas no .
19 , 2018 2018financial accounting and reporting by oil and gas producing companies . 2019 2019 sfas no .
19 requires costs of drilling exploratory wells to be capitalized pending determination of whether the well has found proved reserves .
when a classification of proved


republic services , inc .
notes to consolidated financial statements 2014 ( continued ) high quality financial institutions .
such balances may be in excess of fdic insured limits .
to manage the related credit exposure , we continually monitor the credit worthiness of the financial institutions where we have deposits .
concentrations of credit risk with respect to trade accounts receivable are limited due to the wide variety of customers and markets in which we provide services , as well as the dispersion of our operations across many geographic areas .
we provide services to small-container , large-container , municipal and residential , and energy services customers in the united states and puerto rico .
we perform ongoing credit evaluations of our customers , but generally do not require collateral to support customer receivables .
we establish an allowance for doubtful accounts based on various factors including the credit risk of specific customers , age of receivables outstanding , historical trends , economic conditions and other information .
accounts receivable , net accounts receivable represent receivables from customers for collection , transfer , recycling , disposal , energy services and other services .
our receivables are recorded when billed or when the related revenue is earned , if earlier , and represent claims against third parties that will be settled in cash .
the carrying value of our receivables , net of the allowance for doubtful accounts and customer credits , represents their estimated net realizable value .
provisions for doubtful accounts are evaluated on a monthly basis and are recorded based on our historical collection experience , the age of the receivables , specific customer information and economic conditions .
we also review outstanding balances on an account-specific basis .
in general , reserves are provided for accounts receivable in excess of 90 days outstanding .
past due receivable balances are written-off when our collection efforts have been unsuccessful in collecting amounts due .
the following table reflects the activity in our allowance for doubtful accounts for the years ended december 31: .

                             | 2017           | 2016           | 2015
---------------------------- | -------------- | -------------- | --------------
balance at beginning of year | $ 44.0         | $ 46.7         | $ 38.9
additions charged to expense | 30.6           | 20.4           | 22.7
accounts written-off         | -35.7 ( 35.7 ) | -23.1 ( 23.1 ) | -14.9 ( 14.9 )
balance at end of year       | $ 38.9         | $ 44.0         | $ 46.7

restricted cash and marketable securities as of december 31 , 2017 , we had $ 141.1 million of restricted cash and marketable securities of which $ 71.4 million supports our insurance programs for workers 2019 compensation , commercial general liability , and commercial auto liability .
additionally , we obtain funds through the issuance of tax-exempt bonds for the purpose of financing qualifying expenditures at our landfills , transfer stations , collection and recycling centers .
the funds are deposited directly into trust accounts by the bonding authorities at the time of issuance .
as the use of these funds is contractually restricted , and we do not have the ability to use these funds for general operating purposes , they are classified as restricted cash and marketable securities in our consolidated balance sheets .
in the normal course of business , we may be required to provide financial assurance to governmental agencies and a variety of other entities in connection with municipal residential collection contracts , closure or post- closure of landfills , environmental remediation , environmental permits , and business licenses and permits as a financial guarantee of our performance .
at several of our landfills , we satisfy financial assurance requirements by depositing cash into restricted trust funds or escrow accounts .
property and equipment we record property and equipment at cost .
expenditures for major additions and improvements to facilities are capitalized , while maintenance and repairs are charged to expense as incurred .
when property is retired or


scheduled maturities of our marketable securities are as follows: .

in millions              | available for sale cost | available for sale fair value
------------------------ | ----------------------- | -----------------------------
under 1 year ( current ) | $ 25.4                  | $ 25.4
equity securities        | 0.3                     | 3.5
total                    | $ 25.7                  | $ 28.9

as of may 27 , 2018 , we did not any have cash and cash equivalents pledged as collateral for derivative contracts .
as of may 27 , 2018 , $ 0.9 million of certain accounts receivable were pledged as collateral against a foreign uncommitted line of credit .
the fair value and carrying amounts of long-term debt , including the current portion , were $ 14169.7 million and $ 14268.8 million , respectively , as of may 27 , 2018 .
the fair value of long-term debt was estimated using market quotations and discounted cash flows based on our current incremental borrowing rates for similar types of instruments .
long-term debt is a level 2 liability in the fair value hierarchy .
risk management activities as a part of our ongoing operations , we are exposed to market risks such as changes in interest and foreign currency exchange rates and commodity and equity prices .
to manage these risks , we may enter into various derivative transactions ( e.g. , futures , options , and swaps ) pursuant to our established policies .
commodity price risk many commodities we use in the production and distribution of our products are exposed to market price risks .
we utilize derivatives to manage price risk for our principal ingredients and energy costs , including grains ( oats , wheat , and corn ) , oils ( principally soybean ) , dairy products , natural gas , and diesel fuel .
our primary objective when entering into these derivative contracts is to achieve certainty with regard to the future price of commodities purchased for use in our supply chain .
we manage our exposures through a combination of purchase orders , long-term contracts with suppliers , exchange-traded futures and options , and over-the-counter options and swaps .
we offset our exposures based on current and projected market conditions and generally seek to acquire the inputs at as close to our planned cost as possible .
we use derivatives to manage our exposure to changes in commodity prices .
we do not perform the assessments required to achieve hedge accounting for commodity derivative positions .
accordingly , the changes in the values of these derivatives are recorded currently in cost of sales in our consolidated statements of earnings .
although we do not meet the criteria for cash flow hedge accounting , we believe that these instruments are effective in achieving our objective of providing certainty in the future price of commodities purchased for use in our supply chain .
accordingly , for purposes of measuring segment operating performance these gains and losses are reported in unallocated corporate items outside of segment operating results until such time that the exposure we are managing affects earnings .
at that time we reclassify the gain or loss from unallocated corporate items to segment operating profit , allowing our operating segments to realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility , which remains in unallocated corporate items.


arconic and its subsidiaries file income tax returns in the u.s .
federal jurisdiction and various states and foreign jurisdictions .
with a few minor exceptions , arconic is no longer subject to income tax examinations by tax authorities for years prior to 2006 .
all u.s .
tax years prior to 2016 have been audited by the internal revenue service .
various state and foreign jurisdiction tax authorities are in the process of examining arconic 2019s income tax returns for various tax years through 2015 .
a reconciliation of the beginning and ending amount of unrecognized tax benefits ( excluding interest and penalties ) was as follows: .

december 31,                                    | 2016     | 2015     | 2014
----------------------------------------------- | -------- | -------- | --------
balance at beginning of year                    | $ 18     | $ 7      | $ 8
additions for tax positions of the current year | 12       | -        | -
additions for tax positions of prior years      | -        | 14       | 4
reductions for tax positions of prior years     | -        | -2 ( 2 ) | -3 ( 3 )
settlements with tax authorities                | -1 ( 1 ) | -        | -1 ( 1 )
expiration of the statute of limitations        | -1 ( 1 ) | -1 ( 1 ) | -
foreign currency translation                    | -        | -        | -1 ( 1 )
balance at end of year                          | $ 28     | $ 18     | $ 7

for all periods presented , a portion of the balance at end of year pertains to state tax liabilities , which are presented before any offset for federal tax benefits .
the effect of unrecognized tax benefits , if recorded , that would impact the annual effective tax rate for 2016 , 2015 , and 2014 would be approximately 6% ( 6 % ) , 7% ( 7 % ) , and 4% ( 4 % ) , respectively , of pretax book income .
arconic does not anticipate that changes in its unrecognized tax benefits will have a material impact on the statement of consolidated operations during 2017 ( see tax in note l for a matter for which no reserve has been recognized ) .
it is arconic 2019s policy to recognize interest and penalties related to income taxes as a component of the provision for income taxes on the accompanying statement of consolidated operations .
in 2016 , 2015 , and 2014 , arconic did not recognize any interest or penalties .
due to the expiration of the statute of limitations , settlements with tax authorities , and refunded overpayments , arconic recognized interest income of $ 1 in 2015 but did not recognize any interest income in 2016 or 2014 .
as of december 31 , 2016 and 2015 , the amount accrued for the payment of interest and penalties was $ 2 and $ 1 , respectively .
s .
receivables sale of receivables programs arconic has an arrangement with three financial institutions to sell certain customer receivables without recourse on a revolving basis .
the sale of such receivables is completed through the use of a bankruptcy remote special purpose entity , which is a consolidated subsidiary of arconic .
this arrangement provides for minimum funding of $ 200 up to a maximum of $ 400 for receivables sold .
on march 30 , 2012 , arconic initially sold $ 304 of customer receivables in exchange for $ 50 in cash and $ 254 of deferred purchase price under this arrangement .
arconic has received additional net cash funding of $ 300 for receivables sold ( $ 1758 in draws and $ 1458 in repayments ) since the program 2019s inception , including $ 100 ( $ 500 in draws and $ 400 in repayments ) in 2016 .
no draws or repayments occurred in 2015 .
as of december 31 , 2016 and 2015 , the deferred purchase price receivable was $ 83 and $ 249 , respectively , which was included in other receivables on the accompanying consolidated balance sheet .
the deferred purchase price receivable is reduced as collections of the underlying receivables occur ; however , as this is a revolving program , the sale of new receivables will result in an increase in the deferred purchase price receivable .
the net change in the deferred purchase price receivable was reflected in the ( increase ) decrease in receivables line item on the accompanying statement of consolidated cash flows .
this activity is reflected as an operating cash flow because the related customer receivables are the result of an operating activity with an insignificant , short-term interest rate risk.


management 2019s discussion and analysis of financial condition and results of operations ( continued ) the following results drove changes in ccg operating income by approximately the amounts indicated: .

( in millions ) | operating income reconciliation
--------------- | -----------------------------------------------------------------------------------------
$ 10646         | 2016 ccg operating income
1250            | lower ccg platform unit cost
905             | lower ccg operating expense
625             | higher gross margin from ccg platform revenue1
-645 ( 645 )    | higher factory start-up costs primarily driven by the ramp of our 10nm process technology
345             | other
$ 8166          | 2015 ccg operating income
-2060 ( 2060 )  | higher ccg platform unit costs
-1565 ( 1565 )  | lower gross margin from ccg platform revenue2
435             | lower factory start-up costs primarily driven by the ramp of our 14nm process technology
430             | lower production costs primarily on our 14nm products treated as period charges in 2014
375             | lower operating expense
224             | other
$ 10327         | 2014 ccg operating income

1 higher gross margin from higher ccg platform revenue was driven by higher average selling prices on notebook and desktop platforms , offset by lower desktop and notebook platform unit sales .
2 lower gross margin from lower ccg platform revenue was driven by lower desktop and notebook platform unit sales , partially offset by higher average selling prices on desktop , notebook , and tablet platforms .
data center group segment product overview the dcg operating segment offers platforms designed to provide leading energy-efficient performance for all server , network , and storage applications .
in addition , dcg focuses on lowering the total cost of ownership on other specific workload- optimizations for the enterprise , cloud service providers , and communications service provider market segments .
in 2016 , we launched the following platforms with an array of functionalities and advancements : 2022 intel ae xeon ae processor e5 v4 family , the foundation for high performing clouds and delivers energy-efficient performance for server , network , and storage workloads .
2022 intel xeon processor e7 v4 family , targeted at platforms requiring four or more cpus ; this processor family delivers high performance and is optimized for real-time analytics and in-memory computing , along with industry-leading reliability , availability , and serviceability .
2022 intel ae xeon phi 2122 product family , formerly code-named knights landing , with up to 72 high-performance intel processor cores , integrated memory and fabric , and a common software programming model with intel xeon processors .
the intel xeon phi product family is designed for highly parallel compute and memory bandwidth-intensive workloads .
intel xeon phi processors are positioned to increase the performance of supercomputers , enabling trillions of calculations per second , and to address emerging data analytics and artificial intelligence solutions .
in 2017 , we expect to release our next generation of intel xeon processors for compute , storage , and network ; a next-generation intel xeon phi processor optimized for deep learning ; and a suite of single-socket products , including next-generation intel xeon e3 processors , next-generation intel atom processors , and next-generation intel xeon-d processors for dense solutions.


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

                                 | amount ( in millions )
-------------------------------- | ----------------------
2007 net revenue                 | $ 442.3
volume/weather                   | -4.6 ( 4.6 )
reserve equalization             | -3.3 ( 3.3 )
securitization transition charge | 9.1
fuel recovery                    | 7.5
other                            | -10.1 ( 10.1 )
2008 net revenue                 | $ 440.9

the volume/weather variance is primarily due to decreased usage during the unbilled sales period .
see "critical accounting estimates" below and note 1 to the financial statements for further discussion of the accounting for unbilled revenues .
the reserve equalization variance is primarily due to lower reserve equalization revenue related to changes in the entergy system generation mix compared to the same period in 2007 .
the securitization transition charge variance is primarily due to the issuance of securitization bonds .
in june 2007 , entergy gulf states reconstruction funding i , a company wholly-owned and consolidated by entergy texas , issued securitization bonds and with the proceeds purchased from entergy texas the transition property , which is the right to recover from customers through a transition charge amounts sufficient to service the securitization bonds .
see note 5 to the financial statements for additional information regarding the securitization bonds .
the fuel recovery variance is primarily due to a reserve for potential rate refunds made in the first quarter 2007 as a result of a puct ruling related to the application of past puct rulings addressing transition to competition in texas .
the other variance is primarily caused by various operational effects of the jurisdictional separation on revenues and fuel and purchased power expenses .
gross operating revenues , fuel and purchased power expenses , and other regulatory charges gross operating revenues increased $ 229.3 million primarily due to the following reasons : an increase of $ 157 million in fuel cost recovery revenues due to higher fuel rates and increased usage , partially offset by interim fuel refunds to customers for fuel cost recovery over-collections through november 2007 .
the refund was distributed over a two-month period beginning february 2008 .
the interim refund and the puct approval is discussed in note 2 to the financial statements ; an increase of $ 37.1 million in affiliated wholesale revenue primarily due to increases in the cost of energy ; an increase in transition charge amounts collected from customers to service the securitization bonds as discussed above .
see note 5 to the financial statements for additional information regarding the securitization bonds ; and implementation of an interim surcharge to collect $ 10.3 million in under-recovered incremental purchased capacity costs incurred through july 2007 .
the surcharge was collected over a two-month period beginning february 2008 .
the incremental capacity recovery rider and puct approval is discussed in note 2 to the financial statements.


table of contents performance graph the following performance graph shows the cumulative total return to a holder of the company 2019s common stock , assuming dividend reinvestment , compared with the cumulative total return , assuming dividend reinvestment , of the standard & poor ( "s&p" ) 500 index and the dow jones us financials index during the period from december 31 , 2010 through december 31 , 2015. .

                              | 12/10  | 12/11  | 12/12  | 12/13  | 12/14  | 12/15
----------------------------- | ------ | ------ | ------ | ------ | ------ | ------
e*trade financial corporation | 100.00 | 49.75  | 55.94  | 122.75 | 151.59 | 185.25
s&p 500 index                 | 100.00 | 102.11 | 118.45 | 156.82 | 178.29 | 180.75
dow jones us financials index | 100.00 | 87.16  | 110.56 | 148.39 | 170.04 | 170.19


page 30 of 94 are included in capital spending amounts .
another example is the company 2019s decision in 2007 to contribute an additional $ 44.5 million ( $ 27.3 million ) to its pension plans as part of its overall debt reduction plan .
based on this , our consolidated free cash flow is summarized as follows: .

( $ in millions )                               | 2007             | 2006             | 2005
----------------------------------------------- | ---------------- | ---------------- | ----------------
cash flows from operating activities            | $ 673.0          | $ 401.4          | $ 558.8
incremental pension funding net of tax          | 27.3             | 2013             | 2013
capital spending                                | -308.5 ( 308.5 ) | -279.6 ( 279.6 ) | -291.7 ( 291.7 )
proceeds for replacement of fire-damaged assets | 48.6             | 61.3             | 2013
free cash flow                                  | $ 440.4          | $ 183.1          | $ 267.1

based on information currently available , we estimate cash flows from operating activities for 2008 to be approximately $ 650 million , capital spending to be approximately $ 350 million and free cash flow to be in the $ 300 million range .
capital spending of $ 259.9 million ( net of $ 48.6 million in insurance recoveries ) in 2007 was below depreciation and amortization expense of $ 281 million .
we continue to invest capital in our best performing operations , including projects to increase custom can capabilities , improve beverage can and end making productivity and add more beverage can capacity in europe , as well as expenditures in the aerospace and technologies segment .
of the $ 350 million of planned capital spending for 2008 , approximately $ 180 million will be spent on top-line sales growth projects .
debt facilities and refinancing interest-bearing debt at december 31 , 2007 , decreased $ 93.1 million to $ 2358.6 million from $ 2451.7 million at december 31 , 2006 .
the 2007 debt decrease from 2006 was primarily attributed to debt payments offset by higher foreign exchange rates .
at december 31 , 2007 , $ 705 million was available under the company 2019s multi-currency revolving credit facilities .
the company also had $ 345 million of short-term uncommitted credit facilities available at the end of the year , of which $ 49.7 million was outstanding .
on october 13 , 2005 , ball refinanced its senior secured credit facilities and during the third and fourth quarters of 2005 , ball redeemed its 7.75% ( 7.75 % ) senior notes due august 2006 primarily through the drawdown of funds under the new credit facilities .
the refinancing and redemption resulted in a pretax debt refinancing charge of $ 19.3 million ( $ 12.3 million after tax ) to reflect the call premium associated with the senior notes and the write off of unamortized debt issuance costs .
the company has a receivables sales agreement that provides for the ongoing , revolving sale of a designated pool of trade accounts receivable of ball 2019s north american packaging operations , up to $ 250 million .
the agreement qualifies as off-balance sheet financing under the provisions of statement of financial accounting standards ( sfas ) no .
140 , as amended by sfas no .
156 .
net funds received from the sale of the accounts receivable totaled $ 170 million and $ 201.3 million at december 31 , 2007 and 2006 , respectively , and are reflected as a reduction of accounts receivable in the consolidated balance sheets .
the company was not in default of any loan agreement at december 31 , 2007 , and has met all payment obligations .
the u.s .
note agreements , bank credit agreement and industrial development revenue bond agreements contain certain restrictions relating to dividends , investments , financial ratios , guarantees and the incurrence of additional indebtedness .
additional details about the company 2019s receivables sales agreement and debt are available in notes 7 and 13 , respectively , accompanying the consolidated financial statements within item 8 of this report.


the company 2019s 2017 reported tax rate includes $ 160.9 million of net tax benefits associated with the tax act , $ 6.2 million of net tax benefits on special gains and charges , and net tax benefits of $ 25.3 million associated with discrete tax items .
in connection with the company 2019s initial analysis of the impact of the tax act , as noted above , a provisional net discrete tax benefit of $ 160.9 million was recorded in the period ended december 31 , 2017 , which includes $ 321.0 million tax benefit for recording deferred tax assets and liabilities at the u.s .
enacted tax rate , and a net expense for the one-time transition tax of $ 160.1 million .
while the company was able to make an estimate of the impact of the reduction in the u.s .
rate on deferred tax assets and liabilities and the one-time transition tax , it may be affected by other analyses related to the tax act , as indicated above .
special ( gains ) and charges represent the tax impact of special ( gains ) and charges , as well as additional tax benefits utilized in anticipation of u.s .
tax reform of $ 7.8 million .
during 2017 , the company recorded a discrete tax benefit of $ 39.7 million related to excess tax benefits , resulting from the adoption of accounting changes regarding the treatment of tax benefits on share-based compensation .
the extent of excess tax benefits is subject to variation in stock price and stock option exercises .
in addition , the company recorded net discrete expenses of $ 14.4 million related to recognizing adjustments from filing the 2016 u.s .
federal income tax return and international adjustments due to changes in estimates , partially offset by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in state tax matters .
during 2016 , the company recognized net expense related to discrete tax items of $ 3.9 million .
the net expenses were driven primarily by recognizing adjustments from filing the company 2019s 2015 u.s .
federal income tax return , partially offset by settlement of international tax matters and remeasurement of certain deferred tax assets and liabilities resulting from the application of updated tax rates in international jurisdictions .
net expense was also impacted by adjustments to deferred tax asset and liability positions and the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-u.s .
jurisdictions .
during 2015 , the company recognized net benefits related to discrete tax items of $ 63.3 million .
the net benefits were driven primarily by the release of $ 20.6 million of valuation allowances , based on the realizability of foreign deferred tax assets and the ability to recognize a worthless stock deduction of $ 39.0 million for the tax basis in a wholly-owned domestic subsidiary .
a reconciliation of the beginning and ending amount of gross liability for unrecognized tax benefits is as follows: .

( millions )                                                 | 2017           | 2016         | 2015
------------------------------------------------------------ | -------------- | ------------ | ------------
balance at beginning of year                                 | $ 75.9         | $ 74.6       | $ 78.7
additions based on tax positions related to the current year | 3.2            | 8.8          | 5.8
additions for tax positions of prior years                   | -              | 2.1          | 0.9
reductions for tax positions of prior years                  | -4.9 ( 4.9 )   | -1.0 ( 1.0 ) | -8.8 ( 8.8 )
reductions for tax positions due to statute of limitations   | -14.0 ( 14.0 ) | -5.5 ( 5.5 ) | -1.6 ( 1.6 )
settlements                                                  | -10.8 ( 10.8 ) | -2.0 ( 2.0 ) | -4.2 ( 4.2 )
assumed in connection with acquisitions                      | 10.0           | -            | 8.0
foreign currency translation                                 | 2.1            | -1.1 ( 1.1 ) | -4.2 ( 4.2 )
balance at end of year                                       | $ 61.5         | $ 75.9       | $ 74.6

the total amount of unrecognized tax benefits , if recognized would have affected the effective tax rate by $ 47.1 million as of december 31 , 2017 , $ 57.5 million as of december 31 , 2016 and $ 59.2 million as of december 31 , 2015 .
the company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes .
during 2017 , 2016 and 2015 the company released $ 0.9 million , $ 2.9 million and $ 1.4 million related to interest and penalties , respectively .
the company had $ 9.3 million , $ 10.2 million and $ 13.1 million of accrued interest , including minor amounts for penalties , at december 31 , 2017 , 2016 , and 2015 , respectively.


57management's discussion and analysis of financial condition and results of operations facility include covenants relating to net interest coverage and total debt-to-book capitalization ratios .
the company was in compliance with the terms of the 3-year credit facility at december 31 , 2005 .
the company has never borrowed under its domestic revolving credit facilities .
utilization of the non-u.s .
credit facilities may also be dependent on the company's ability to meet certain conditions at the time a borrowing is requested .
contractual obligations , guarantees , and other purchase commitments contractual obligations summarized in the table below are the company's obligations and commitments to make future payments under debt obligations ( assuming earliest possible exercise of put rights by holders ) , lease payment obligations , and purchase obligations as of december 31 , 2005 .
payments due by period ( 1 ) ( in millions ) total 2006 2007 2008 2009 2010 thereafter .

( in millions )               | payments due by period ( 1 ) total | payments due by period ( 1 ) 2006 | payments due by period ( 1 ) 2007 | payments due by period ( 1 ) 2008 | payments due by period ( 1 ) 2009 | payments due by period ( 1 ) 2010 | payments due by period ( 1 ) thereafter
----------------------------- | ---------------------------------- | --------------------------------- | --------------------------------- | --------------------------------- | --------------------------------- | --------------------------------- | ---------------------------------------
long-term debt obligations    | $ 4033                             | $ 119                             | $ 1222                            | $ 200                             | $ 2                               | $ 529                             | $ 1961
lease obligations             | 1150                               | 438                               | 190                               | 134                               | 109                               | 84                                | 195
purchase obligations          | 992                                | 418                               | 28                                | 3                                 | 2                                 | 2                                 | 539
total contractual obligations | $ 6175                             | $ 975                             | $ 1440                            | $ 337                             | $ 113                             | $ 615                             | $ 2695

( 1 ) amounts included represent firm , non-cancelable commitments .
debt obligations : at december 31 , 2005 , the company's long-term debt obligations , including current maturities and unamortized discount and issue costs , totaled $ 4.0 billion , as compared to $ 5.0 billion at december 31 , 2004 .
a table of all outstanding long-term debt securities can be found in note 4 , ""debt and credit facilities'' to the company's consolidated financial statements .
as previously discussed , the decrease in the long- term debt obligations as compared to december 31 , 2004 , was due to the redemptions and repurchases of $ 1.0 billion principal amount of outstanding securities during 2005 .
also , as previously discussed , the remaining $ 118 million of 7.6% ( 7.6 % ) notes due january 1 , 2007 were reclassified to current maturities of long-term debt .
lease obligations : the company owns most of its major facilities , but does lease certain office , factory and warehouse space , land , and information technology and other equipment under principally non-cancelable operating leases .
at december 31 , 2005 , future minimum lease obligations , net of minimum sublease rentals , totaled $ 1.2 billion .
rental expense , net of sublease income , was $ 254 million in 2005 , $ 217 million in 2004 and $ 223 million in 2003 .
purchase obligations : the company has entered into agreements for the purchase of inventory , license of software , promotional agreements , and research and development agreements which are firm commitments and are not cancelable .
the longest of these agreements extends through 2015 .
total payments expected to be made under these agreements total $ 992 million .
commitments under other long-term agreements : the company has entered into certain long-term agreements to purchase software , components , supplies and materials from suppliers .
most of the agreements extend for periods of one to three years ( three to five years for software ) .
however , generally these agreements do not obligate the company to make any purchases , and many permit the company to terminate the agreement with advance notice ( usually ranging from 60 to 180 days ) .
if the company were to terminate these agreements , it generally would be liable for certain termination charges , typically based on work performed and supplier on-hand inventory and raw materials attributable to canceled orders .
the company's liability would only arise in the event it terminates the agreements for reasons other than ""cause.'' in 2003 , the company entered into outsourcing contracts for certain corporate functions , such as benefit administration and information technology related services .
these contracts generally extend for 10 years and are expected to expire in 2013 .
the total payments under these contracts are approximately $ 3 billion over 10 years ; however , these contracts can be terminated .
termination would result in a penalty substantially less than the annual contract payments .
the company would also be required to find another source for these services , including the possibility of performing them in-house .
as is customary in bidding for and completing network infrastructure projects and pursuant to a practice the company has followed for many years , the company has a number of performance/bid bonds and standby letters of credit outstanding , primarily relating to projects of government and enterprise mobility solutions segment and the networks segment .
these instruments normally have maturities of up to three years and are standard in the