diff --git a/c/common/transform.h b/c/common/transform.h
index b279c04..456c12d 100755
--- a/c/common/transform.h
+++ b/c/common/transform.h
@@ -1,4 +1,4 @@
-/* transforms is a part of ABI, nut not API.
+/* transforms is a part of ABI, but not API.
 
    It means that there are some functions that are supposed to be in "common"
    library, but header itself is not placed into include/brotli. This way,
diff --git a/c/common/version.h b/c/common/version.h
index 38946e6..435371c 100644
--- a/c/common/version.h
+++ b/c/common/version.h
@@ -14,13 +14,13 @@
    BrotliEncoderVersion methods. */
 
 /* Semantic version, calculated as (MAJOR << 24) | (MINOR << 12) | PATCH */
-#define BROTLI_VERSION 0x1000002
+#define BROTLI_VERSION 0x1000003
 
 /* This macro is used by build system to produce Libtool-friendly soname. See
    https://www.gnu.org/software/libtool/manual/html_node/Libtool-versioning.html
  */
 
 /* ABI version, calculated as (CURRENT << 24) | (REVISION << 12) | AGE */
-#define BROTLI_ABI_VERSION 0x1002000
+#define BROTLI_ABI_VERSION 0x1003000
 
 #endif  /* BROTLI_COMMON_VERSION_H_ */
diff --git a/c/enc/backward_references_hq.c b/c/enc/backward_references_hq.c
index f2f9918..62c6ba2 100644
--- a/c/enc/backward_references_hq.c
+++ b/c/enc/backward_references_hq.c
@@ -18,6 +18,7 @@
 #include "./find_match_length.h"
 #include "./literal_cost.h"
 #include "./memory.h"
+#include "./params.h"
 #include "./prefix.h"
 #include "./quality.h"
 
@@ -25,9 +26,7 @@
 extern "C" {
 #endif
 
-#define BROTLI_SIMPLE_DISTANCE_ALPHABET_SIZE ( \
-    BROTLI_NUM_DISTANCE_SHORT_CODES + (2 * BROTLI_LARGE_MAX_DISTANCE_BITS))
-/* BROTLI_SIMPLE_DISTANCE_ALPHABET_SIZE == 74 */
+#define BROTLI_MAX_EFFECTIVE_DISTANCE_ALPHABET_SIZE 544
 
 static const float kInfinity = 1.7e38f;  /* ~= 2 ^ 127 */
 
@@ -76,7 +75,8 @@
 typedef struct ZopfliCostModel {
   /* The insert and copy length symbols. */
   float cost_cmd_[BROTLI_NUM_COMMAND_SYMBOLS];
-  float cost_dist_[BROTLI_SIMPLE_DISTANCE_ALPHABET_SIZE];
+  float* cost_dist_;
+  uint32_t distance_alphabet_size;
   /* Cumulative costs of literals per position in the stream. */
   float* literal_costs_;
   float min_cost_cmd_;
@@ -84,14 +84,18 @@
 } ZopfliCostModel;
 
 static void InitZopfliCostModel(
-    MemoryManager* m, ZopfliCostModel* self, size_t num_bytes) {
+    MemoryManager* m, ZopfliCostModel* self, const BrotliDistanceParams* dist,
+    size_t num_bytes) {
   self->num_bytes_ = num_bytes;
   self->literal_costs_ = BROTLI_ALLOC(m, float, num_bytes + 2);
+  self->cost_dist_ = BROTLI_ALLOC(m, float, dist->alphabet_size);
+  self->distance_alphabet_size = dist->alphabet_size;
   if (BROTLI_IS_OOM(m)) return;
 }
 
 static void CleanupZopfliCostModel(MemoryManager* m, ZopfliCostModel* self) {
   BROTLI_FREE(m, self->literal_costs_);
+  BROTLI_FREE(m, self->cost_dist_);
 }
 
 static void SetCost(const uint32_t* histogram, size_t histogram_size,
@@ -135,7 +139,7 @@
                                            size_t last_insert_len) {
   uint32_t histogram_literal[BROTLI_NUM_LITERAL_SYMBOLS];
   uint32_t histogram_cmd[BROTLI_NUM_COMMAND_SYMBOLS];
-  uint32_t histogram_dist[BROTLI_SIMPLE_DISTANCE_ALPHABET_SIZE];
+  uint32_t histogram_dist[BROTLI_MAX_EFFECTIVE_DISTANCE_ALPHABET_SIZE];
   float cost_literal[BROTLI_NUM_LITERAL_SYMBOLS];
   size_t pos = position - last_insert_len;
   float min_cost_cmd = kInfinity;
@@ -167,7 +171,7 @@
           cost_literal);
   SetCost(histogram_cmd, BROTLI_NUM_COMMAND_SYMBOLS, BROTLI_FALSE,
           cost_cmd);
-  SetCost(histogram_dist, BROTLI_SIMPLE_DISTANCE_ALPHABET_SIZE, BROTLI_FALSE,
+  SetCost(histogram_dist, self->distance_alphabet_size, BROTLI_FALSE,
           self->cost_dist_);
 
   for (i = 0; i < BROTLI_NUM_COMMAND_SYMBOLS; ++i) {
@@ -210,7 +214,7 @@
   for (i = 0; i < BROTLI_NUM_COMMAND_SYMBOLS; ++i) {
     cost_cmd[i] = (float)FastLog2(11 + (uint32_t)i);
   }
-  for (i = 0; i < BROTLI_SIMPLE_DISTANCE_ALPHABET_SIZE; ++i) {
+  for (i = 0; i < self->distance_alphabet_size; ++i) {
     cost_dist[i] = (float)FastLog2(20 + (uint32_t)i);
   }
   self->min_cost_cmd_ = (float)FastLog2(11);
@@ -505,7 +509,9 @@
         uint32_t distnumextra;
         float dist_cost;
         size_t max_match_len;
-        PrefixEncodeCopyDistance(dist_code, 0, 0, &dist_symbol, &distextra);
+        PrefixEncodeCopyDistance(
+            dist_code, params->dist.num_direct_distance_codes,
+            params->dist.distance_postfix_bits, &dist_symbol, &distextra);
         distnumextra = dist_symbol >> 10;
         dist_cost = base_cost + (float)distnumextra +
             ZopfliCostModelGetDistanceCost(model, dist_symbol & 0x3FF);
@@ -566,7 +572,6 @@
   uint32_t offset = nodes[0].u.next;
   size_t i;
   size_t gap = 0;
-  BROTLI_UNUSED(params);
   for (i = 0; offset != BROTLI_UINT32_MAX; i++) {
     const ZopfliNode* next = &nodes[pos + offset];
     size_t copy_length = ZopfliNodeCopyLength(next);
@@ -584,7 +589,7 @@
           BROTLI_MIN(size_t, block_start + pos, max_backward_limit);
       BROTLI_BOOL is_dictionary = TO_BROTLI_BOOL(distance > max_distance + gap);
       size_t dist_code = ZopfliNodeDistanceCode(next);
-      InitCommand(&commands[i], insert_length,
+      InitCommand(&commands[i], &params->dist, insert_length,
           copy_length, (int)len_code - (int)copy_length, dist_code);
 
       if (!is_dictionary && dist_code > 0) {
@@ -663,7 +668,7 @@
   size_t lz_matches_offset = 0;
   nodes[0].length = 0;
   nodes[0].u.cost = 0;
-  InitZopfliCostModel(m, &model, num_bytes);
+  InitZopfliCostModel(m, &model, &params->dist, num_bytes);
   if (BROTLI_IS_OOM(m)) return 0;
   ZopfliCostModelSetFromLiteralCosts(
       &model, position, ringbuffer, ringbuffer_mask);
@@ -788,7 +793,7 @@
   orig_num_commands = *num_commands;
   nodes = BROTLI_ALLOC(m, ZopfliNode, num_bytes + 1);
   if (BROTLI_IS_OOM(m)) return;
-  InitZopfliCostModel(m, &model, num_bytes);
+  InitZopfliCostModel(m, &model, &params->dist, num_bytes);
   if (BROTLI_IS_OOM(m)) return;
   for (i = 0; i < 2; i++) {
     BrotliInitZopfliNodes(nodes, num_bytes + 1);
diff --git a/c/enc/backward_references_inc.h b/c/enc/backward_references_inc.h
index 967545d..38a48d3 100644
--- a/c/enc/backward_references_inc.h
+++ b/c/enc/backward_references_inc.h
@@ -89,8 +89,8 @@
           dist_cache[0] = (int)sr.distance;
           FN(PrepareDistanceCache)(hasher, dist_cache);
         }
-        InitCommand(commands++, insert_length, sr.len, sr.len_code_delta,
-            distance_code);
+        InitCommand(commands++, &params->dist, insert_length,
+            sr.len, sr.len_code_delta, distance_code);
       }
       *num_literals += insert_length;
       insert_length = 0;
diff --git a/c/enc/command.h b/c/enc/command.h
index 0526815..6075dfe 100644
--- a/c/enc/command.h
+++ b/c/enc/command.h
@@ -13,6 +13,7 @@
 #include "../common/platform.h"
 #include <brotli/types.h>
 #include "./fast_log.h"
+#include "./params.h"
 #include "./prefix.h"
 
 #if defined(__cplusplus) || defined(c_plusplus)
@@ -116,7 +117,8 @@
 } Command;
 
 /* distance_code is e.g. 0 for same-as-last short code, or 16 for offset 1. */
-static BROTLI_INLINE void InitCommand(Command* self, size_t insertlen,
+static BROTLI_INLINE void InitCommand(Command* self,
+    const BrotliDistanceParams* dist, size_t insertlen,
     size_t copylen, int copylen_code_delta, size_t distance_code) {
   /* Don't rely on signed int representation, use honest casts. */
   uint32_t delta = (uint8_t)((int8_t)copylen_code_delta);
@@ -126,7 +128,8 @@
      npostfix and ndirect were 0, they are only recomputed later after the
      clustering if needed. */
   PrefixEncodeCopyDistance(
-      distance_code, 0, 0, &self->dist_prefix_, &self->dist_extra_);
+      distance_code, dist->num_direct_distance_codes,
+      dist->distance_postfix_bits, &self->dist_prefix_, &self->dist_extra_);
   GetLengthCode(
       insertlen, (size_t)((int)copylen + copylen_code_delta),
       TO_BROTLI_BOOL((self->dist_prefix_ & 0x3FF) == 0), &self->cmd_prefix_);
@@ -140,21 +143,24 @@
   GetLengthCode(insertlen, 4, BROTLI_FALSE, &self->cmd_prefix_);
 }
 
-static BROTLI_INLINE uint32_t CommandRestoreDistanceCode(const Command* self) {
-  if ((self->dist_prefix_ & 0x3FF) < BROTLI_NUM_DISTANCE_SHORT_CODES) {
+static BROTLI_INLINE uint32_t CommandRestoreDistanceCode(
+    const Command* self, const BrotliDistanceParams* dist) {
+  if ((self->dist_prefix_ & 0x3FF) <
+      BROTLI_NUM_DISTANCE_SHORT_CODES + dist->num_direct_distance_codes) {
     return self->dist_prefix_ & 0x3FF;
   } else {
+    uint32_t dcode = self->dist_prefix_ & 0x3FF;
     uint32_t nbits = self->dist_prefix_ >> 10;
     uint32_t extra = self->dist_extra_;
-    /* It is assumed that the distance was first encoded with NPOSTFIX = 0 and
-       NDIRECT = 0, so the code itself is of this form:
-         BROTLI_NUM_DISTANCE_SHORT_CODES + 2 * (nbits - 1) + prefix_bit
-       Therefore, the following expression results in (2 + prefix_bit). */
-    uint32_t prefix = (self->dist_prefix_ & 0x3FF) + 4u -
-        BROTLI_NUM_DISTANCE_SHORT_CODES - 2u * nbits;
-    /* Subtract 4 for offset (Chapter 4.) and
-       increase by BROTLI_NUM_DISTANCE_SHORT_CODES - 1  */
-    return (prefix << nbits) + extra + BROTLI_NUM_DISTANCE_SHORT_CODES - 4u;
+    uint32_t postfix_mask = (1U << dist->distance_postfix_bits) - 1U;
+    uint32_t hcode = (dcode - dist->num_direct_distance_codes -
+        BROTLI_NUM_DISTANCE_SHORT_CODES) >>
+        dist->distance_postfix_bits;
+    uint32_t lcode = (dcode - dist->num_direct_distance_codes -
+        BROTLI_NUM_DISTANCE_SHORT_CODES) & postfix_mask;
+    uint32_t offset = ((2U + (hcode & 1U)) << nbits) - 4U;
+    return ((offset + extra) << dist->distance_postfix_bits) + lcode +
+        dist->num_direct_distance_codes + BROTLI_NUM_DISTANCE_SHORT_CODES;
   }
 }
 
diff --git a/c/enc/encode.c b/c/enc/encode.c
index 4fd28d0..563c827 100644
--- a/c/enc/encode.c
+++ b/c/enc/encode.c
@@ -171,26 +171,6 @@
   }
 }
 
-static void RecomputeDistancePrefixes(Command* cmds,
-                                      size_t num_commands,
-                                      uint32_t num_direct_distance_codes,
-                                      uint32_t distance_postfix_bits) {
-  size_t i;
-  if (num_direct_distance_codes == 0 && distance_postfix_bits == 0) {
-    return;
-  }
-  for (i = 0; i < num_commands; ++i) {
-    Command* cmd = &cmds[i];
-    if (CommandCopyLen(cmd) && cmd->cmd_prefix_ >= 128) {
-      PrefixEncodeCopyDistance(CommandRestoreDistanceCode(cmd),
-                               num_direct_distance_codes,
-                               distance_postfix_bits,
-                               &cmd->dist_prefix_,
-                               &cmd->dist_extra_);
-    }
-  }
-}
-
 /* Wraps 64-bit input position to 32-bit ring-buffer position preserving
    "not-a-first-lap" feature. */
 static uint32_t WrapPosition(uint64_t position) {
@@ -587,13 +567,6 @@
   BROTLI_DCHECK(*storage_ix <= 14);
   last_bytes = (uint16_t)((storage[1] << 8) | storage[0]);
   last_bytes_bits = (uint8_t)(*storage_ix);
-  if (params->dist.num_direct_distance_codes != 0 ||
-      params->dist.distance_postfix_bits != 0) {
-    RecomputeDistancePrefixes(commands,
-                              num_commands,
-                              params->dist.num_direct_distance_codes,
-                              params->dist.distance_postfix_bits);
-  }
   if (params->quality <= MAX_QUALITY_FOR_STATIC_ENTROPY_CODES) {
     BrotliStoreMetaBlockFast(m, data, wrapped_last_flush_pos,
                              bytes, mask, is_last, params,
@@ -663,6 +636,8 @@
 }
 
 static void ChooseDistanceParams(BrotliEncoderParams* params) {
+  /* NDIRECT, NPOSTFIX must be both zero for qualities
+     up to MIN_QUALITY_FOR_BLOCK_SPLIT == 3. */
   uint32_t num_direct_distance_codes = 0;
   uint32_t distance_postfix_bits = 0;
   uint32_t alphabet_size;
@@ -782,9 +757,8 @@
   memcpy(s->saved_dist_cache_, s->dist_cache_, sizeof(s->saved_dist_cache_));
 }
 
-BrotliEncoderState* BrotliEncoderCreateInstance(brotli_alloc_func alloc_func,
-                                                brotli_free_func free_func,
-                                                void* opaque) {
+BrotliEncoderState* BrotliEncoderCreateInstance(
+    brotli_alloc_func alloc_func, brotli_free_func free_func, void* opaque) {
   BrotliEncoderState* state = 0;
   if (!alloc_func && !free_func) {
     state = (BrotliEncoderState*)malloc(sizeof(BrotliEncoderState));
@@ -912,7 +886,8 @@
   uint64_t max_distance = last_processed_pos < max_backward_distance ?
       last_processed_pos : max_backward_distance;
   uint64_t cmd_dist = (uint64_t)s->dist_cache_[0];
-  uint32_t distance_code = CommandRestoreDistanceCode(last_command);
+  uint32_t distance_code = CommandRestoreDistanceCode(last_command,
+                                                      &s->params.dist);
   if (distance_code < BROTLI_NUM_DISTANCE_SHORT_CODES ||
       distance_code - (BROTLI_NUM_DISTANCE_SHORT_CODES - 1) == cmd_dist) {
     if (cmd_dist <= max_distance) {
diff --git a/java/org/brotli/wrapper/dec/BrotliDecoderChannel.java b/java/org/brotli/wrapper/dec/BrotliDecoderChannel.java
index c9a752a..6dfe8f2 100644
--- a/java/org/brotli/wrapper/dec/BrotliDecoderChannel.java
+++ b/java/org/brotli/wrapper/dec/BrotliDecoderChannel.java
@@ -58,8 +58,8 @@
       int result = 0;
       while (dst.hasRemaining()) {
         int outputSize = decode();
-        if (outputSize == -1) {
-          return result == 0 ? -1 : result;
+        if (outputSize <= 0) {
+          return result == 0 ? outputSize : result;
         }
         result += consume(dst);
       }
diff --git a/research/BUILD b/research/BUILD
index 211b3e7..9da08c2 100755
--- a/research/BUILD
+++ b/research/BUILD
@@ -35,3 +35,10 @@
         ":sieve",
     ],
 )
+
+cc_binary(
+    name = "brotli_decoder",
+    srcs = ["brotli_decoder.c"],
+    linkstatic = 1,
+    deps = ["//:brotlidec"],
+)
diff --git a/research/brotli_decoder.c b/research/brotli_decoder.c
new file mode 100644
index 0000000..b1d556d
--- /dev/null
+++ b/research/brotli_decoder.c
@@ -0,0 +1,93 @@
+/* Copyright 2018 Google Inc. All Rights Reserved.
+
+   Distributed under MIT license.
+   See file LICENSE for detail or copy at https://opensource.org/licenses/MIT
+*/
+
+#include <stdio.h>
+#include <stdlib.h>
+#include <unistd.h>
+
+#include <brotli/decode.h>
+
+#define BUFFER_SIZE (1u << 20)
+
+typedef struct Context {
+  FILE* fin;
+  FILE* fout;
+  uint8_t* input_buffer;
+  uint8_t* output_buffer;
+  BrotliDecoderState* decoder;
+} Context;
+
+void init(Context* ctx) {
+  ctx->fin = 0;
+  ctx->fout = 0;
+  ctx->input_buffer = 0;
+  ctx->output_buffer = 0;
+  ctx->decoder = 0;
+}
+
+void cleanup(Context* ctx) {
+  if (ctx->decoder) BrotliDecoderDestroyInstance(ctx->decoder);
+  if (ctx->output_buffer) free(ctx->output_buffer);
+  if (ctx->input_buffer) free(ctx->input_buffer);
+  if (ctx->fout) fclose(ctx->fout);
+  if (ctx->fin) fclose(ctx->fin);
+}
+
+void fail(Context* ctx, const char* message) {
+  fprintf(stderr, "%s\n", message);
+  exit(1);
+}
+
+int main(int argc, char** argv) {
+  Context ctx;
+  BrotliDecoderResult result = BROTLI_DECODER_RESULT_NEEDS_MORE_INPUT;
+  size_t available_in;
+  const uint8_t* next_in;
+  size_t available_out = BUFFER_SIZE;
+  uint8_t* next_out;
+  init(&ctx);
+
+  ctx.fin = fdopen(STDIN_FILENO, "rb");
+  if (!ctx.fin) fail(&ctx, "can't open input file");
+  ctx.fout = fdopen(STDOUT_FILENO, "wb");
+  if (!ctx.fout) fail(&ctx, "can't open output file");
+  ctx.input_buffer = (uint8_t*)malloc(BUFFER_SIZE);
+  if (!ctx.input_buffer) fail(&ctx, "out of memory / input buffer");
+  ctx.output_buffer = (uint8_t*)malloc(BUFFER_SIZE);
+  if (!ctx.output_buffer) fail(&ctx, "out of memory / output buffer");
+  ctx.decoder = BrotliDecoderCreateInstance(0, 0, 0);
+  if (!ctx.decoder) fail(&ctx, "out of memory / decoder");
+  BrotliDecoderSetParameter(ctx.decoder, BROTLI_DECODER_PARAM_LARGE_WINDOW, 1);
+
+  next_out = ctx.output_buffer;
+  while (1) {
+    if (result == BROTLI_DECODER_RESULT_NEEDS_MORE_INPUT) {
+      if (feof(ctx.fin)) break;
+      available_in = fread(ctx.input_buffer, 1, BUFFER_SIZE, ctx.fin);
+      next_in = ctx.input_buffer;
+      if (ferror(ctx.fin)) break;
+    } else if (result == BROTLI_DECODER_RESULT_NEEDS_MORE_OUTPUT) {
+      fwrite(ctx.output_buffer, 1, BUFFER_SIZE, ctx.fout);
+      if (ferror(ctx.fout)) break;
+      available_out = BUFFER_SIZE;
+      next_out = ctx.output_buffer;
+    } else {
+      break;
+    }
+    result = BrotliDecoderDecompressStream(
+        ctx.decoder, &available_in, &next_in, &available_out, &next_out, 0);
+  }
+  if (next_out != ctx.output_buffer) {
+    fwrite(ctx.output_buffer, 1, next_out - ctx.output_buffer, ctx.fout);
+  }
+  if ((result == BROTLI_DECODER_RESULT_NEEDS_MORE_OUTPUT) || ferror(ctx.fout)) {
+    fail(&ctx, "failed to write output");
+  } else if (result != BROTLI_DECODER_RESULT_SUCCESS) {
+    fail(&ctx, "corrupt input");
+  }
+  cleanup(&ctx);
+  return 0;
+}