AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 19.
SUBSEQUENT EVENTS 12.25% Senior Subordinated Discount Notes and Warrants Offering—In January 2003, the Company issued 808,000 units, each consisting of (1) $1,000 principal amount at maturity of the 12.25% senior subordinated discount notes due 2008 of a wholly owned subsidiary of the Company (ATI Notes) and (2) a warrant to purchase 14.0953 shares of Class A common stock of the Company, for gross proceeds of $420.0 million.
The gross offering proceeds were allocated between the ATI Notes ($367.4 million) and the fair value of the warrants ($52.6 million).
Net proceeds from the offering aggregated approximately $397.0 million and were or will be used for the purposes described below under Amended and Restated Loan Agreement.
The ATI Notes accrue no cash interest.
Instead, the accreted value of each ATI Note will increase between the date of original issuance and maturity (August 1, 2008) at a rate of 12.25% per annum.
The 808,000 warrants that were issued together with the ATI Notes each represent the right to purchase 14.0953 shares of Class A common stock at $0.01 per share.
The warrants are exercisable at any time on or after January 29, 2006 and will expire on August 1, 2008.
As of the issuance date, the warrants represented approximately 5.5% of the Company’s outstanding common stock (assuming exercise of all warrants).
The indenture governing the ATI Notes contains covenants that, among other things, limit the ability of the issuer subsidiary and its guarantors to incur or guarantee additional indebtedness, create liens, pay dividends or make other equity distributions, enter into agreements restricting the restricted subsidiaries’ ability to pay dividends, purchase or redeem capital stock, make investments and sell assets or consolidate or merge with or into other companies.
The ATI Notes rank junior in right of payment to all existing and future senior indebtedness, including all indebtedness outstanding under the credit facilities, and are structurally senior in right of payment to all existing and future indebtedness of the Company.
Amended and Restated Loan Agreement—On February 21, 2003, the Company completed an amendment to its credit facilities.
The amendment provides for the following: ?
Prepayment of a Portion of Outstanding Term Loans.
The Company agreed to prepay an aggregate of $200.0 million of the term loans outstanding under the credit facilities from a portion of the net proceeds of the ATI Notes offering completed in January 2003.
This prepayment consisted of a $125.0 million prepayment of the term loan A and a $75.0 million prepayment of the term loan B, each to be applied to reduce future scheduled principal payments.
Giving effect to the prepayment of $200.0 million of term loans under the credit facility and the issuance of the ATI Notes as discussed above as well as the paydown of debt from net proceeds of the sale of MTN ($24.5 million in February 2003), the Company’s aggregate principal payments of longterm debt, including capital leases, for the next five years and thereafter are as follows (in thousands):
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Table of Contents NORTHROP GRUMMAN CORPORATION
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Plan Assumptions On a weighted-average basis, the following assumptions were used to determine the benefit obligations and the net periodic benefit cost:
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The discount rate is generally based on the yield on high-quality corporate fixed-income investments.
At the end of each year, the discount rate is primarily determined using the results of bond yield curve models based on a portfolio of high quality bonds matching the notional cash inflows with the expected benefit payments for each significant benefit plan.
The assumptions used for pension benefits are consistent with those used for retiree medical and life insurance benefits.
The long-term rate of return on plan assets used for the medical and life benefits are reduced to allow
Table of Contents NORTHROP GRUMMAN CORPORATION SFAS No.142 – Goodwill and Other Intangible Assets, the company performed its required annual impairment test for goodwill using a discounted cash flow analysis supported by comparative market multiples to determine the fair values of its businesses versus their book values.
The test as of November 30, 2008, indicated that the book values for Shipbuilding and Space Technology exceeded the fair values of these businesses.
The impairment charge is primarily driven by adverse equity market conditions that caused a decrease in current market multiples and the company’s stock price as of November 30, 2008, compared with the test performed as of November 30, 2007.
The charge reduces goodwill recorded in connection with acquisitions made in 2001 and 2002 and does not impact the company’s normal business operations.
Prior to recording the goodwill impairment charges at Shipbuilding and Space Technology, the company tested the purchased intangible assets and other long-lived assets at both of these businesses as required by SFAS No.144 – Accounting for the Impairment or Disposal of Long-lived Assets , and the carrying value of these assets were determined not to be impaired.
Operating (Loss) Income The company considers operating income to be an important measure for evaluating its operating performance and, as is typical in the industry, defines operating income as revenues less the related cost of producing the revenues and general and administrative expenses.
Operating income for the company is further evaluated for each of the business segments in which the company operates.
Management of the company internally manages its operations by reference to “segment operating income.
” Segment operating income is defined as operating income before unallocated expenses and net pension adjustment, both of which do not affect the segments, and the reversal of royalty income, which is classified as other income for financial reporting purposes.
Segment operating income is one of the key metrics management uses to evaluate operating performance.
Segment operating income is not, however, a measure of financial performance under U. S.  GAAP, and may not be defined and calculated by other companies in the same manner.
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Segment Operating (Loss) Income 2008 – Segment operating loss for the year ended December 31, 2008, was $145 million as compared with segment operating income of $3.1 billion in 2007.
The decrease was primarily due to the goodwill impairment charge totaling $3.1 billion at Shipbuilding and Space Technology.
See the Segment Operating Results section below for further information.2007 – Segment operating income for the year ended December 31, 2007, increased $278 million, or 10 percent, as compared with 2006.
Total segment operating income was 9.8 percent and 9.5 percent of total sales and service revenues for the years ended December 31, 2007, and 2006, respectively.
See the Segment Operating Results section below for further information.
Unallocated Expenses 2008 – Unallocated expenses for the year ended December 31, 2008, decreased $47 million, or 23 percent, as compared with the same period in 2007.
The decrease was primarily due to $88 million in higher legal and investigative provisions recorded in 2007, partially offset by an increase in environmental, health and welfare, and other unallocated corporate costs in 2008.
Table of Contents NORTHROP GRUMMAN CORPORATION New Awards The value of new contract awards during the year ended December 31, 2008, was approximately $48.3 billion.
Significant new awards during this period include $5.6 billion for the Virginia -class Block III submarine programs, $5.1 billion for the Gerald R.  Ford (CVN 78) aircraft carrier, $1.4 billion for the DDG 1000 Zumwalt-class destroyer, $1.2 billion for the BAMS Unmanned Aircraft System program, $402 million for the VIS IDIQ, $385 million for the ICBM program, and various restricted programs.
On February 29, 2008, the company won a $1.5 billion contract award by the U. S.  Air Force as an initial step to replace its aerial refueling tanker fleet.
The losing bidder for the contract protested the award decision by the U. S.  Air Force.
In the fourth quarter, the company reduced total backlog by $1.5 billion to reflect the termination of the U. S.  Air Force refueling tanker program.
The value of new contract awards during the year ended December 31, 2007, was approximately $35.1 billion.
Significant new awards during this period include $2.4 billion for NPOESS, $2.2 billion for LHA-6, $1 billion for LPD-25, $875 million for the Flats Sequencing Systems/ Postal Automation program, $636 million for the UCAS-D, $628 million for the DDG 1000 Zumwalt-class destroyer program, $607 million for the ICBM program, $272 million for the JRDC program, $234 million for the F-22 program, and various restricted programs.
LIQUIDITY AND CAPITAL RESOURCES The company endeavors to ensure the most efficient conversion of operating results into cash for deployment in growing its businesses and maximizing shareholder value.
The company actively manages its capital resources through working capital improvements, capital expenditures, strategic business acquisitions, investment in independent research and development, debt repayments, required and voluntary pension contributions, and returning cash to its shareholders through dividend payments and repurchases of common stock.
Company management uses various financial measures to assist in capital deployment decision making including net cash provided by operations, free cash flow, net debt-to-equity, and net debt-to-capital.
Management believes these measures are useful to investors in assessing the company’s financial performance.
The table below summarizes key components of cash flow provided by operating activities.

<table><tr><td>2003</td><td>$268,496</td></tr><tr><td>2004</td><td>131,262</td></tr><tr><td>2005</td><td>195,082</td></tr><tr><td>2006</td><td>538,479</td></tr><tr><td>2007</td><td>1,065,437</td></tr><tr><td>Thereafter</td><td>1,408,783</td></tr><tr><td>Total</td><td>$3,607,539</td></tr></table>
<table><tr><td></td><td colspan="2">Pension Benefits</td><td colspan="2">Medical and Life Benefits</td></tr><tr><td><i>$ in millions</i></td><td> 2008</td><td>2007</td><td> 2008</td><td>2007</td></tr><tr><td> Amounts Recorded in Accumulated Other Comprehensive Loss</td><td></td><td></td><td></td><td></td></tr><tr><td>Net actuarial loss</td><td>$-5,509</td><td>$-975</td><td>$-539</td><td>$-429</td></tr><tr><td>Prior service cost and net transition obligation</td><td>-287</td><td>-254</td><td>357</td><td>452</td></tr><tr><td>Income tax benefits related to above items</td><td>2,286</td><td>479</td><td>72</td><td>-9</td></tr><tr><td>Unamortized benefit plan costs</td><td>$-3,510</td><td>$-750</td><td>$-110</td><td>$14</td></tr></table>
<table><tr><td></td><td colspan="2">December 31,</td></tr><tr><td><i>$ in millions</i></td><td> 2008</td><td>2007</td></tr><tr><td>Projected benefit obligation</td><td>$19,926</td><td>$1,772</td></tr><tr><td>Accumulated benefit obligation</td><td>18,217</td><td>1,407</td></tr><tr><td>Fair value of plan assets</td><td>16,036</td><td>722</td></tr></table>
<table><tr><td></td><td colspan="2">Pension Benefits</td><td colspan="2">Medical and  Life Benefits</td></tr><tr><td></td><td> 2008</td><td>2007</td><td> 2008</td><td>2007</td></tr><tr><td> Assumptions Used to Determine Benefit Obligation at December 31</td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rate</td><td>6.25%</td><td>6.22%</td><td>6.25%</td><td>6.12%</td></tr><tr><td>Rate of compensation increase</td><td>4.00%</td><td>4.25%</td><td></td><td></td></tr><tr><td>Initial health care cost trend rate assumed for the next year</td><td></td><td></td><td>7.50%</td><td>8.00%</td></tr><tr><td>Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)</td><td></td><td></td><td>5.00%</td><td>5.00%</td></tr><tr><td>Year that the rate reaches the ultimate trend rate</td><td></td><td></td><td>2014</td><td>2012</td></tr><tr><td> Assumptions Used to Determine Benefit Cost for the Year Ended December 31</td><td></td><td></td><td></td><td></td></tr><tr><td>Discount rate</td><td>6.22%</td><td>5.97%</td><td>6.12%</td><td>5.91%</td></tr><tr><td>Expected long-term return on plan assets</td><td>8.50%</td><td>8.50%</td><td>6.85%</td><td>6.75%</td></tr><tr><td>Rate of compensation increase</td><td>4.25%</td><td>4.25%</td><td></td><td></td></tr><tr><td>Initial health care cost trend rate assumed for the next year</td><td></td><td></td><td>8.00%</td><td>8.75%</td></tr><tr><td>Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)</td><td></td><td></td><td>5.00%</td><td>5.00%</td></tr><tr><td>Year that the rate reaches the ultimate trend rate</td><td></td><td></td><td>2012</td><td>2010</td></tr></table>
<table><tr><td></td><td colspan="3">Year Ended December 31</td></tr><tr><td><i>$ in millions</i></td><td> 2008</td><td>2007</td><td>2006</td></tr><tr><td>Segment operating (loss) income</td><td>$-145</td><td>$3,115</td><td>$2,837</td></tr><tr><td>Unallocated expenses</td><td>-159</td><td>-206</td><td>-287</td></tr><tr><td>Net pension adjustment</td><td>263</td><td>127</td><td>-37</td></tr><tr><td>Royalty income adjustment</td><td>-70</td><td>-18</td><td>-19</td></tr><tr><td>Total operating (loss) income</td><td>$-111</td><td>$3,018</td><td>$2,494</td></tr></table>

Question: What was the average of the Accumulated benefit obligation in the years where Projected benefit obligation is positive? (in million)
Answer: 9812