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gross profit for plant nutrition north america was favorably impacted by higher sales volumes and lower per-unit product costs , which were partially offset by increased per-unit shipping and handling costs and higher depreciation expense during 2017. a $ 61.6 million decrease in salt segment gross margin partially offset the combined plant nutrition business ' increase . the decrease resulted from lower sales volumes , increased per-unit product and increased shipping and handling costs , and higher depreciation expense . gross profit & gross margin commentary : 2015 – 2016 gross profit : decreased 9 % , or $ 30.6 million ; gross margin decreased 4 percentage points to 26 % from 30 % salt gross profit declined $ 17.1 million primarily due to reduced sales prices and higher per-unit production costs . the decrease was partially offset by lower logistics costs . the plant nutrition business , on a combined basis , contributed $ 10.8 million to the decrease in gross profit primarily due to lower average sales prices realized in our plant nutrition north america segment , partially offset by the inclusion of the results from produquímica following the acquisition in october 2016. in addition , plant nutrition north america experienced higher per-unit shipping and handling costs . other expenses and income commentary : 2016 – 2017 sg & a : increased $ 42.5 million , which represented a 1.3 percentage points of sales increase to 12.3 % from 11.0 % the increase in sg & a expense was primarily due to the full year inclusion of produquímica in our operating results in 2017 and approximately $ 2 million in higher corporate depreciation related to a significant software system upgrade . in addition , we incurred charges of approximately $ 2 million related to ongoing restructuring activities primarily impacting corporate sg & a . interest expense : increased $ 18.8 million to $ 52.9 million the increase was primarily due to our higher aggregate debt level driven by the acquisition of produquímica , which was partially offset by lower interest rates due to the refinancing of our term loans and revolving credit facility in april 2016. net ( earnings ) loss in equity investee : increased from a loss of $ 1.4 million to earnings of $ 0.8 million the $ 0.8 million of earnings in 2017 represents our share of fermavi eletroquímica ltda . 's ( “ fermavi ” ) net earnings . as a result of the full acquisition of produquímica , we hold a 50 % interest in fermavi , which was previously held by produquímica . the $ 1.4 million loss in 2016 was primarily comprised of our share of produquímica 's net loss based on our initial 35 % equity interest in produquímica prior to the full acquisition . gain from remeasurement of equity method investment we recognized a gain of $ 59.3 million in 2016 related to our previously held equity investment in produquímica , which was remeasured to fair value upon our full acquisition of the business in october 2016. other expense ( income ) , net : increased $ 3.3 million to $ 4.4 million the increase was primarily due to foreign exchange losses of $ 7.1 million in 2017 , compared to losses of $ 0.1 million in 2016. the increase was partially offset by the inclusion of $ 3.0 million of refinancing fees in 2016 and increased interest income in 2017. income tax expense : increased $ 25.4 million to $ 60.0 million income tax expense and our income tax rate increased in 2017 due to the impact of u.s. tax reform , which resulted in an increase in tax expense of $ 46.8 million , and due to a tax settlement agreement . these increases were partially offset by the release of valuation allowances related to our brazil business . our effective tax rate was 58 % in 2017 and 18 % in 2016. our effective tax rates were impacted by u.s. tax reform and a tax settlement agreement in 2017 and the non-taxable gain recognized from the remeasurement of our previously held equity investment in produquímica in 2016. replace_table_token_38_th compass minerals international , inc. our income tax provision in both periods differs from the u.s. statutory rate primarily due to u.s. statutory depletion , domestic manufacturing deductions , state income taxes , foreign income , mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes . other expenses and income commentary : 2015 – 2016 sg & a : increased $ 16.2 million , which represented a 1.1 percentage points of sales increase to 9.9 % from 11.0 % the increase in expense was due to the inclusion of produquímica 's results and higher expenses in our plant nutrition north america segment due to the $ 3.1 million partial impairment of our wolf trax trade name and corporate restructuring costs . this increase was partially offset by a decrease of $ 2.0 million in corporate professional services and a decrease of $ 1.8 million in marketing expenses in our plant nutrition north america and salt segments . interest expense : increased $ 12.6 million to $ 34.1 million the increase was primarily due to our higher aggregate debt level driven by the acquisition of produquímica , which was partially offset by lower interest rates due to the refinancing of our term loans and revolving credit facility in april 2016. net ( earnings ) loss in equity investee : loss of $ 1.4 million the $ 1.4 million in 2016 was primarily comprised of our share of produquímica 's net loss based on our initial 35 % equity interest in produquímica prior to the full acquisition . story_separator_special_tag net cash flows provided by operating activities were $ 167.3 million . » net earnings were $ 162.7 million which included a non-cash remeasurement gain of $ 59.3 million related to the acquisition of produquímica . » non-cash depreciation and amortization expense was $ 90.3 million . » working capital items were a use of operating cash flows of $ 31.7 million . net cash flows provided by operating activities were $ 137.9 million . » net earnings were $ 159.2 million . » non-cash depreciation and amortization expense was $ 78.3 million . » working capital items were a use of operating cash flows of $ 111.0 million . investing activities : net cash flows used by investing activities were $ 119.0 million . » included $ 114.1 million of capital expenditures . net cash flows used by investing activities were $ 467.8 million . » included $ 182.2 million of capital expenditures and cash payments of $ 4.7 million relating to our previously held equity investment and $ 277.7 million for the full acquisition of produquímica . net cash flows used by investing activities were $ 335.4 million . » included $ 217.6 million of capital expenditures and an equity investment of $ 116.4 million . financing activities : net cash flows used by financing activities were $ 73.4 million . » included net proceeds from issuance of debt of $ 38.7 million , payments of dividends of $ 97.5 million and payments of $ 14.7 million related to contingent consideration from the produquímica acquisition . net cash flows provided by financing activities were $ 314.6 million . » included net proceeds from issuance of debt of $ 416.7 million , payments of dividends of $ 94.1 million and payments of $ 8.5 million related to the refinancing of debt . net cash flows provided by financing activities were $ 14.2 million . » primarily related to new debt used to finance the produquímica investment of $ 100 million , partially offset by the payment of dividends of $ 89.4 million . replace_table_token_46_th compass minerals international , inc. story_separator_special_tag style= `` font-family : inherit ; font-size:8pt ; `` > we lease property and equipment under non-cancelable operating and capital leases for varying periods . ( c ) we have contracts to purchase certain amounts of electricity , equipment and raw materials . in addition , we have minimum throughput commitments in certain depots and warehouses . ( d ) note 8 to our consolidated financial statements provides additional information . ( e ) note 11 to our consolidated financial statements provides additional information . sensitivity analysis related to ebitda and adjusted ebitda management uses a variety of measures to evaluate our performance . while our consolidated financial statements , taken as a whole , provide an understanding of our overall results of operations , financial condition and cash flows , we analyze components of the consolidated financial statements to identify certain trends and evaluate specific performance areas . in addition to using u.s. generally accepted accounting principles ( “ gaap ” ) financial measures , such as gross profit , net earnings and cash flows generated by operating activities , management uses ebitda and adjusted ebitda . both ebitda and adjusted ebitda are non-gaap financial measures used to evaluate the operating performance of our core business operations because our resource allocation , financing methods and cost of capital , and income tax positions are managed at a corporate level , apart from the activities of the operating segments , and the operating facilities are located in different taxing jurisdictions , which can cause considerable variation in net earnings . we also use ebitda and adjusted ebitda to assess our operating performance and return on capital against other companies , and to evaluate potential acquisitions or other capital projects . ebitda and adjusted ebitda are not calculated under u.s. gaap and should not be considered in isolation or as a substitute for net earnings , cash flows or other financial data prepared in accordance with u.s. gaap or as a measure of our overall profitability or liquidity . ebitda and adjusted ebitda exclude interest expense , income taxes and depreciation and amortization , each of which are an essential element of our cost structure and can not be eliminated . furthermore , adjusted ebitda excludes other cash and non-cash items , including restructuring costs , refinancing costs and other ( income ) expense . our borrowings are a significant component of our capital structure and interest expense is a continuing cost of debt . we are also required to pay income taxes , a required and ongoing consequence of our operations . we have a significant investment in capital assets and depreciation and amortization reflect the utilization of those assets in order to generate revenues . consequently , any measure that excludes these elements has material limitations . while ebitda and adjusted ebitda are frequently used as measures of operating performance , these terms are not necessarily comparable to similarly titled measures of other companies due to the potential inconsistencies in the method of calculation . replace_table_token_49_th compass minerals international , inc. the calculation of ebitda and adjusted ebitda as used by management is set forth in the table below ( in millions ) . replace_table_token_50_th in 2017 , we incurred charges of $ 4.3 million related to ongoing restructuring activities . key adjustments in 2016 included a gain of $ 59.3 million related to the remeasurement of our previously held equity investment in produquímica ( see note 3 to our consolidated financial statements ) and $ 8.4 million of costs in connection with the acquisition of produquímica , primarily related to the step-up of finished goods inventory to fair value , which was recorded in product cost as the inventory was sold . in the fourth quarter of 2016 , we also partially wrote-down a trade name acquired in our wolf trax acquisition . ebitda also includes other

capital resources we believe our primary sources of liquidity will continue to be cash flow from operations and borrowings under our revolving credit facility . we believe that our current banking syndicate is secure and believe we will have access to our entire revolving credit facility . we expect that ongoing requirements for debt service and committed or sustaining capital expenditures will primarily be funded from these sources . our debt service obligations could , under certain circumstances , materially affect our financial condition and prevent us from fulfilling our debt obligations . see item 1a. , “ risk factors – our indebtedness and ability to pay our indebtedness could adversely affect our business and financial condition. ” furthermore , cmi is a holding company with no operations of its own and is dependent on its subsidiaries for cash flow . as discussed in note 9 to our consolidated financial statements , at december 31 , 2017 , we had $ 1.37 billion of outstanding indebtedness consisting of $ 250.0 million under our 4.875 % notes , $ 1.01 billion of borrowings outstanding under our senior secured credit facilities ( consisting of term loans and a revolving credit facility ) , including $ 168.9 million borrowed against our revolving credit facility , and $ 112.9 million of debt related to our produquímica business in brazil . letters of credit totaling $ 8.4 million as of december 31 , 2017 , reduced available borrowing capacity under the revolving credit facility to $ 122.7 million .

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text. ```gross profit for plant nutrition north america was favorably impacted by higher sales volumes and lower per-unit product costs , which were partially offset by increased per-unit shipping and handling costs and higher depreciation expense during 2017. a $ 61.6 million decrease in salt segment gross margin partially offset the combined plant nutrition business ' increase . the decrease resulted from lower sales volumes , increased per-unit product and increased shipping and handling costs , and higher depreciation expense . gross profit & gross margin commentary : 2015 – 2016 gross profit : decreased 9 % , or $ 30.6 million ; gross margin decreased 4 percentage points to 26 % from 30 % salt gross profit declined $ 17.1 million primarily due to reduced sales prices and higher per-unit production costs . the decrease was partially offset by lower logistics costs . the plant nutrition business , on a combined basis , contributed $ 10.8 million to the decrease in gross profit primarily due to lower average sales prices realized in our plant nutrition north america segment , partially offset by the inclusion of the results from produquímica following the acquisition in october 2016. in addition , plant nutrition north america experienced higher per-unit shipping and handling costs . other expenses and income commentary : 2016 – 2017 sg & a : increased $ 42.5 million , which represented a 1.3 percentage points of sales increase to 12.3 % from 11.0 % the increase in sg & a expense was primarily due to the full year inclusion of produquímica in our operating results in 2017 and approximately $ 2 million in higher corporate depreciation related to a significant software system upgrade . in addition , we incurred charges of approximately $ 2 million related to ongoing restructuring activities primarily impacting corporate sg & a . interest expense : increased $ 18.8 million to $ 52.9 million the increase was primarily due to our higher aggregate debt level driven by the acquisition of produquímica , which was partially offset by lower interest rates due to the refinancing of our term loans and revolving credit facility in april 2016. net ( earnings ) loss in equity investee : increased from a loss of $ 1.4 million to earnings of $ 0.8 million the $ 0.8 million of earnings in 2017 represents our share of fermavi eletroquímica ltda . 's ( “ fermavi ” ) net earnings . as a result of the full acquisition of produquímica , we hold a 50 % interest in fermavi , which was previously held by produquímica . the $ 1.4 million loss in 2016 was primarily comprised of our share of produquímica 's net loss based on our initial 35 % equity interest in produquímica prior to the full acquisition . gain from remeasurement of equity method investment we recognized a gain of $ 59.3 million in 2016 related to our previously held equity investment in produquímica , which was remeasured to fair value upon our full acquisition of the business in october 2016. other expense ( income ) , net : increased $ 3.3 million to $ 4.4 million the increase was primarily due to foreign exchange losses of $ 7.1 million in 2017 , compared to losses of $ 0.1 million in 2016. the increase was partially offset by the inclusion of $ 3.0 million of refinancing fees in 2016 and increased interest income in 2017. income tax expense : increased $ 25.4 million to $ 60.0 million income tax expense and our income tax rate increased in 2017 due to the impact of u.s. tax reform , which resulted in an increase in tax expense of $ 46.8 million , and due to a tax settlement agreement . these increases were partially offset by the release of valuation allowances related to our brazil business . our effective tax rate was 58 % in 2017 and 18 % in 2016. our effective tax rates were impacted by u.s. tax reform and a tax settlement agreement in 2017 and the non-taxable gain recognized from the remeasurement of our previously held equity investment in produquímica in 2016. replace_table_token_38_th compass minerals international , inc. our income tax provision in both periods differs from the u.s. statutory rate primarily due to u.s. statutory depletion , domestic manufacturing deductions , state income taxes , foreign income , mining and withholding taxes and interest expense recognition differences for tax and financial reporting purposes . other expenses and income commentary : 2015 – 2016 sg & a : increased $ 16.2 million , which represented a 1.1 percentage points of sales increase to 9.9 % from 11.0 % the increase in expense was due to the inclusion of produquímica 's results and higher expenses in our plant nutrition north america segment due to the $ 3.1 million partial impairment of our wolf trax trade name and corporate restructuring costs . this increase was partially offset by a decrease of $ 2.0 million in corporate professional services and a decrease of $ 1.8 million in marketing expenses in our plant nutrition north america and salt segments . interest expense : increased $ 12.6 million to $ 34.1 million the increase was primarily due to our higher aggregate debt level driven by the acquisition of produquímica , which was partially offset by lower interest rates due to the refinancing of our term loans and revolving credit facility in april 2016. net ( earnings ) loss in equity investee : loss of $ 1.4 million the $ 1.4 million in 2016 was primarily comprised of our share of produquímica 's net loss based on our initial 35 % equity interest in produquímica prior to the full acquisition . story_separator_special_tag net cash flows provided by operating activities were $ 167.3 million . » net earnings were $ 162.7 million which included a non-cash remeasurement gain of $ 59.3 million related to the acquisition of produquímica . » non-cash depreciation and amortization expense was $ 90.3 million . » working capital items were a use of operating cash flows of $ 31.7 million . net cash flows provided by operating activities were $ 137.9 million . » net earnings were $ 159.2 million . » non-cash depreciation and amortization expense was $ 78.3 million . » working capital items were a use of operating cash flows of $ 111.0 million . investing activities : net cash flows used by investing activities were $ 119.0 million . » included $ 114.1 million of capital expenditures . net cash flows used by investing activities were $ 467.8 million . » included $ 182.2 million of capital expenditures and cash payments of $ 4.7 million relating to our previously held equity investment and $ 277.7 million for the full acquisition of produquímica . net cash flows used by investing activities were $ 335.4 million . » included $ 217.6 million of capital expenditures and an equity investment of $ 116.4 million . financing activities : net cash flows used by financing activities were $ 73.4 million . » included net proceeds from issuance of debt of $ 38.7 million , payments of dividends of $ 97.5 million and payments of $ 14.7 million related to contingent consideration from the produquímica acquisition . net cash flows provided by financing activities were $ 314.6 million . » included net proceeds from issuance of debt of $ 416.7 million , payments of dividends of $ 94.1 million and payments of $ 8.5 million related to the refinancing of debt . net cash flows provided by financing activities were $ 14.2 million . » primarily related to new debt used to finance the produquímica investment of $ 100 million , partially offset by the payment of dividends of $ 89.4 million . replace_table_token_46_th compass minerals international , inc. story_separator_special_tag style= `` font-family : inherit ; font-size:8pt ; `` > we lease property and equipment under non-cancelable operating and capital leases for varying periods . ( c ) we have contracts to purchase certain amounts of electricity , equipment and raw materials . in addition , we have minimum throughput commitments in certain depots and warehouses . ( d ) note 8 to our consolidated financial statements provides additional information . ( e ) note 11 to our consolidated financial statements provides additional information . sensitivity analysis related to ebitda and adjusted ebitda management uses a variety of measures to evaluate our performance . while our consolidated financial statements , taken as a whole , provide an understanding of our overall results of operations , financial condition and cash flows , we analyze components of the consolidated financial statements to identify certain trends and evaluate specific performance areas . in addition to using u.s. generally accepted accounting principles ( “ gaap ” ) financial measures , such as gross profit , net earnings and cash flows generated by operating activities , management uses ebitda and adjusted ebitda . both ebitda and adjusted ebitda are non-gaap financial measures used to evaluate the operating performance of our core business operations because our resource allocation , financing methods and cost of capital , and income tax positions are managed at a corporate level , apart from the activities of the operating segments , and the operating facilities are located in different taxing jurisdictions , which can cause considerable variation in net earnings . we also use ebitda and adjusted ebitda to assess our operating performance and return on capital against other companies , and to evaluate potential acquisitions or other capital projects . ebitda and adjusted ebitda are not calculated under u.s. gaap and should not be considered in isolation or as a substitute for net earnings , cash flows or other financial data prepared in accordance with u.s. gaap or as a measure of our overall profitability or liquidity . ebitda and adjusted ebitda exclude interest expense , income taxes and depreciation and amortization , each of which are an essential element of our cost structure and can not be eliminated . furthermore , adjusted ebitda excludes other cash and non-cash items , including restructuring costs , refinancing costs and other ( income ) expense . our borrowings are a significant component of our capital structure and interest expense is a continuing cost of debt . we are also required to pay income taxes , a required and ongoing consequence of our operations . we have a significant investment in capital assets and depreciation and amortization reflect the utilization of those assets in order to generate revenues . consequently , any measure that excludes these elements has material limitations . while ebitda and adjusted ebitda are frequently used as measures of operating performance , these terms are not necessarily comparable to similarly titled measures of other companies due to the potential inconsistencies in the method of calculation . replace_table_token_49_th compass minerals international , inc. the calculation of ebitda and adjusted ebitda as used by management is set forth in the table below ( in millions ) . replace_table_token_50_th in 2017 , we incurred charges of $ 4.3 million related to ongoing restructuring activities . key adjustments in 2016 included a gain of $ 59.3 million related to the remeasurement of our previously held equity investment in produquímica ( see note 3 to our consolidated financial statements ) and $ 8.4 million of costs in connection with the acquisition of produquímica , primarily related to the step-up of finished goods inventory to fair value , which was recorded in product cost as the inventory was sold . in the fourth quarter of 2016 , we also partially wrote-down a trade name acquired in our wolf trax acquisition . ebitda also includes other ``` Narrative : capital resources we believe our primary sources of liquidity will continue to be cash flow from operations and borrowings under our revolving credit facility . we believe that our current banking syndicate is secure and believe we will have access to our entire revolving credit facility . we expect that ongoing requirements for debt service and committed or sustaining capital expenditures will primarily be funded from these sources . our debt service obligations could , under certain circumstances , materially affect our financial condition and prevent us from fulfilling our debt obligations . see item 1a. , “ risk factors – our indebtedness and ability to pay our indebtedness could adversely affect our business and financial condition. ” furthermore , cmi is a holding company with no operations of its own and is dependent on its subsidiaries for cash flow . as discussed in note 9 to our consolidated financial statements , at december 31 , 2017 , we had $ 1.37 billion of outstanding indebtedness consisting of $ 250.0 million under our 4.875 % notes , $ 1.01 billion of borrowings outstanding under our senior secured credit facilities ( consisting of term loans and a revolving credit facility ) , including $ 168.9 million borrowed against our revolving credit facility , and $ 112.9 million of debt related to our produquímica business in brazil . letters of credit totaling $ 8.4 million as of december 31 , 2017 , reduced available borrowing capacity under the revolving credit facility to $ 122.7 million .

the european commission , or ec , has granted orphan medicinal product designation to edasalonexent for the treatment of dmd . we initiated a global phase 3 trial of edasalonexent for the treatment of dmd in september 2018 , which we refer to as the polarisdmd trial . the polarisdmd trial is designed to evaluate the efficacy and safety of edasalonexent for registration purposes , with top-line results expected in the second quarter of 2020. our goal is to submit a new drug application for edasalonexent for the treatment of dmd in early 2021. polarisdmd is currently enrolling patients with enrollment expected to be completed in 2019. the trial design was informed by discussions with the fda , as well as input from treating physicians , families of boys affected by dmd and patient advocacy organizations . the polarisdmd trial is a randomized , double-blind , placebo-controlled trial , and we anticipate enrolling approximately 125 patients between the ages of four and seven ( up to eighth birthday ) , regardless of mutation type , who have not been on steroids for at least six months . the primary efficacy endpoint is change in north star ambulatory assessment , or nsaa , score after 12 months of treatment with edasalonexent compared to placebo . key secondary endpoints are the age-appropriate timed function tests : time to stand , 4-stair climb and 10-meter walk/run . assessments of growth , cardiac and bone health are also included in the trial . this month , we are initiating a new open-label extension trial called the galaxydmd trial , in which we plan to enroll all of the boys currently participating in the movedmd open-label extension , and which will also provide the boys who complete the 12-month polarisdmd trial with the opportunity to receive open-label edasalonexent treatment . the galaxydmd trial is designed to provide longer term safety data to support registration filings . our movedmd phase 1/2 trial enrolled ambulatory boys four to seven years old with a genetically confirmed diagnosis of dmd who were steroid naive or had not used steroids for at least six months prior to the trial . boys enrolled in the trial were not limited to any specific dystrophin mutations and the 31 boys in the trial had 26 different dystrophin mutations . the movedmd trial was designed to be conducted in three sequential parts , phase 1 and phase 2 , both of which are completed , and an open-label extension , which is on-going . in phase 1 of the movedmd trial , we assessed the safety , tolerability and pharmacokinetics of edasalonexent in 17 patients , following seven days of dosing , and 82 we reported in january 2016 that all three doses of edasalonexent tested were generally well tolerated with no safety signals observed and there were no serious adverse events and no drug discontinuations . in the phase 2 portion of the trial , we assessed the effects of edasalonexent using magnetic resonance imaging , or mri , t2 as an early biomarker at 12 weeks , and announced in january 2017 that the primary efficacy endpoint of average change from baseline to week 12 in the mri t2 composite measure of lower leg muscles for the pooled edasalonexent treatment groups compared to placebo was not met , although we observed directionally positive results in the 100/mg/kg/day edasalonexent treatment group that were not statistically significant . subsequently , in the open-label extension of the movedmd trial , we observed statistically significant improvement in the rate of change in lower leg composite mri t2 through 12 , 24 , 36 and 48 weeks on 100 mg/kg of edasalonexent treatment compared to the off-treatment control period . we have completed key efficacy and safety assessments from the movedmd trial . in the ongoing open-label extension of the movedmd trial through 72 weeks of oral 100 mg/kg/day edasalonexent treatment , we observed preserved muscle function and consistent improvements in all four assessments of muscle function : nsaa score , time to stand , 4-stair climb and 10-meter walk/run , compared to the rates of change in the control period for boys prior to receiving edasalonexent treatment . additionally , supportive changes in non-effort-based measures of muscle health were seen , supporting the durability of edasalonexent treatment effects . specifically , we observed , in the 100 mg/kg/day treatment group , that all four muscle enzymes tested ( creatine kinase , alanine aminotransferase , aspartate aminotransferase and lactate dehydrogenase ) were significantly decreased compared to baseline following edasalonexent treatment at 12 weeks and later time points through 72 weeks ( p < 0.05 ) . through 72 weeks of treatment , edasalonexent continued to be well tolerated with no safety signals observed in the movedmd trial . boys treated with edasalonexent continued to follow age-appropriate growth curves with age-appropriate increases in weight and height and overall body mass index trended down to age-normative values . we also observed that the heart rate of the boys significantly decreased toward age-normative values with over a year and a half period of edasalonexent treatment . in addition to edasalonexent , we have developed cat-5571 as a potential treatment for cystic fibrosis , or cf . cat-5571 is an oral small molecule that is designed to activate autophagy , a mechanism for recycling cellular components and digesting pathogens , which is important for host defenses and is depressed in cf . we have completed investigational new drug , or ind , application-enabling activities for cat-5571 . story_separator_special_tag general and administrative expenses general and administrative expenses increased by $ 0.4 million to $ 9.3 million for the year ended december 31 , 2018 from $ 8.9 million for the year ended december 31 , 2017 , an increase of 5 % . the increase in general and administrative expenses was attributable to a $ 0.8 million increase in employee compensation due to one-time performance bonuses awarded to general and administrative employees that were not awarded bonuses in 2017 , a $ 0.1 million increase in the general and administrative portion of insurance and facilities expense , and a $ 0.1 million increase in delaware franchise tax . these increases were partially offset by a $ 0.6 million decrease in consulting and professional services due to cost cutting associated with a strategic shift and restructuring . other income ( expense ) , net other income ( expense ) , net increased by $ 0.8 million for the year ended december 31 , 2018 compared to the year ended december 31 , 2017 due to a decrease in interest expense of $ 0.4 million due to principal payments made on our credit facility , an increase in other income of $ 0.1 million due 88 partially to the net gain realized on assets sold in consolidation of our facilities and an increase of $ 0.3 million in interest and investment income due to an increase in our interest-bearing assets following our june 2018 financing . story_separator_special_tag the number and characteristics of future product candidates that we pursue and their development requirements ; the outcome , timing and costs of seeking regulatory approvals ; the costs of commercialization activities for any of our product candidates that receive marketing approval to the extent such costs are not the responsibility of any future collaborators , including the costs and timing of establishing product sales , marketing , distribution and manufacturing capabilities ; subject to receipt of marketing approval , revenue , if any , received from commercial sales of our product candidates ; our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure ; the costs of preparing , filing and prosecuting patent applications , maintaining and protecting our intellectual property rights and defending against intellectual property related claims ; and the costs of operating as a public company . identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming , expensive and uncertain process that takes years to complete , and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales . in addition , our product candidates , if approved , may not achieve commercial success . our commercial revenues , if any , will be derived from sales of medicines that we do not expect to be commercially available for several years , if at all . accordingly , we will need to continue to rely on additional financing to achieve our business objectives . adequate additional financing may not be available to us on acceptable terms , or at all . until such time , if ever , as we can generate substantial product revenues , we expect to finance our cash needs through a combination of equity offerings , debt financings , collaborations , strategic alliances and licensing arrangements . we do not have any committed external source of funds . to the extent that we raise additional capital through the sale of equity or convertible debt securities , our stockholders ' ownership interests will be diluted , and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders ' rights . additional debt financing , if available , would result in increased fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions , such as incurring additional debt , making capital expenditures or declaring dividends , that could adversely impact our ability to conduct our business . if we raise funds through collaborations , strategic alliances or licensing arrangements with third parties , we may have to relinquish valuable rights to our technologies , future revenue streams , research programs or product candidates or to grant licenses on terms that may not be favorable to us . if we are unable to raise additional funds through equity or debt financings when needed , we may be required to delay , limit , reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves . 91 cash flows comparison of the years ended december 31 , 2018 and 2017 the following table provides information regarding our cash flows for the years ended december 31 , 2018 and 2017 ( in thousands ) : replace_table_token_3_th net cash used in operating activities net cash used in operating activities was $ 23.5 million for the year ended december 31 , 2018 and consisted primarily of a net loss of $ 25.9 million adjusted for non-cash items , including stock-based compensation expense of $ 1.8 million , depreciation and amortization expense of $ 0.1 million , other non-cash items of $ 0.1 million and a net decrease in operating assets of $ 0.7 million , which resulted primarily from increases in accounts payable and accrued expenses . these were partially offset by a gain on disposal of property and equipment of $ 0.3 million . net cash used in operating activities was $ 26.8 million for the year ended december 31 , 2017 and consisted primarily of a net loss of $ 27.4 million adjusted for non-cash items , including stock-based compensation expense of $ 2.0 million , depreciation and amortization expense of $ 0.3 million , non-cash interest expense of $ 0.2 million , and a net increase in operating assets of $ 1.9 million , which resulted

liquidity and capital resources from our inception through december 31 , 2018 , we have raised an aggregate of $ 245.2 million , of which $ 92.9 million was from private placements of preferred stock , $ 69.0 million represented gross proceeds from our ipo , $ 11.5 million represented gross proceeds from our september 2016 registered direct offering , $ 19.0 million represented gross proceeds from our atm offering programs , $ 42.0 million represented gross proceeds from our june 2018 financing , $ 10.0 million was from a secured debt financing and $ 0.8 million was from common stock option and warrant exercises . as of december 31 , 2018 , we had $ 37.6 million in cash , cash equivalents and short-term investments . following december 31 , 2018 , we raised an additional $ 20.0 million in gross proceeds from our february 2019 financing and $ 2.1 million in gross proceeds under our atm offering program we have not generated any revenue from product sales to date . we have incurred significant annual net operating losses in every year since our inception and expect to incur net operating losses in 2019 and for the foreseeable future . as of december 31 , 2018 , we had an accumulated deficit of $ 197.3 million . we expect to continue to incur significant expenses and operating losses for the next several years . our net losses may fluctuate significantly from quarter to quarter and year to year . we anticipate that our expenses will increase significantly if and to the extent that we continue to develop and conduct clinical trials with respect to edasalonexent and other product candidates ; initiate and continue research , preclinical and clinical development efforts for our other product candidates and potential product candidates ; maintain , expand and protect our intellectual property portfolio ; establish a commercial infrastructure to support the marketing and sale of certain of our product candidates ; hire additional personnel , such as clinical , regulatory , quality control and scientific personnel ; and operate as a public company .

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text. ```the european commission , or ec , has granted orphan medicinal product designation to edasalonexent for the treatment of dmd . we initiated a global phase 3 trial of edasalonexent for the treatment of dmd in september 2018 , which we refer to as the polarisdmd trial . the polarisdmd trial is designed to evaluate the efficacy and safety of edasalonexent for registration purposes , with top-line results expected in the second quarter of 2020. our goal is to submit a new drug application for edasalonexent for the treatment of dmd in early 2021. polarisdmd is currently enrolling patients with enrollment expected to be completed in 2019. the trial design was informed by discussions with the fda , as well as input from treating physicians , families of boys affected by dmd and patient advocacy organizations . the polarisdmd trial is a randomized , double-blind , placebo-controlled trial , and we anticipate enrolling approximately 125 patients between the ages of four and seven ( up to eighth birthday ) , regardless of mutation type , who have not been on steroids for at least six months . the primary efficacy endpoint is change in north star ambulatory assessment , or nsaa , score after 12 months of treatment with edasalonexent compared to placebo . key secondary endpoints are the age-appropriate timed function tests : time to stand , 4-stair climb and 10-meter walk/run . assessments of growth , cardiac and bone health are also included in the trial . this month , we are initiating a new open-label extension trial called the galaxydmd trial , in which we plan to enroll all of the boys currently participating in the movedmd open-label extension , and which will also provide the boys who complete the 12-month polarisdmd trial with the opportunity to receive open-label edasalonexent treatment . the galaxydmd trial is designed to provide longer term safety data to support registration filings . our movedmd phase 1/2 trial enrolled ambulatory boys four to seven years old with a genetically confirmed diagnosis of dmd who were steroid naive or had not used steroids for at least six months prior to the trial . boys enrolled in the trial were not limited to any specific dystrophin mutations and the 31 boys in the trial had 26 different dystrophin mutations . the movedmd trial was designed to be conducted in three sequential parts , phase 1 and phase 2 , both of which are completed , and an open-label extension , which is on-going . in phase 1 of the movedmd trial , we assessed the safety , tolerability and pharmacokinetics of edasalonexent in 17 patients , following seven days of dosing , and 82 we reported in january 2016 that all three doses of edasalonexent tested were generally well tolerated with no safety signals observed and there were no serious adverse events and no drug discontinuations . in the phase 2 portion of the trial , we assessed the effects of edasalonexent using magnetic resonance imaging , or mri , t2 as an early biomarker at 12 weeks , and announced in january 2017 that the primary efficacy endpoint of average change from baseline to week 12 in the mri t2 composite measure of lower leg muscles for the pooled edasalonexent treatment groups compared to placebo was not met , although we observed directionally positive results in the 100/mg/kg/day edasalonexent treatment group that were not statistically significant . subsequently , in the open-label extension of the movedmd trial , we observed statistically significant improvement in the rate of change in lower leg composite mri t2 through 12 , 24 , 36 and 48 weeks on 100 mg/kg of edasalonexent treatment compared to the off-treatment control period . we have completed key efficacy and safety assessments from the movedmd trial . in the ongoing open-label extension of the movedmd trial through 72 weeks of oral 100 mg/kg/day edasalonexent treatment , we observed preserved muscle function and consistent improvements in all four assessments of muscle function : nsaa score , time to stand , 4-stair climb and 10-meter walk/run , compared to the rates of change in the control period for boys prior to receiving edasalonexent treatment . additionally , supportive changes in non-effort-based measures of muscle health were seen , supporting the durability of edasalonexent treatment effects . specifically , we observed , in the 100 mg/kg/day treatment group , that all four muscle enzymes tested ( creatine kinase , alanine aminotransferase , aspartate aminotransferase and lactate dehydrogenase ) were significantly decreased compared to baseline following edasalonexent treatment at 12 weeks and later time points through 72 weeks ( p < 0.05 ) . through 72 weeks of treatment , edasalonexent continued to be well tolerated with no safety signals observed in the movedmd trial . boys treated with edasalonexent continued to follow age-appropriate growth curves with age-appropriate increases in weight and height and overall body mass index trended down to age-normative values . we also observed that the heart rate of the boys significantly decreased toward age-normative values with over a year and a half period of edasalonexent treatment . in addition to edasalonexent , we have developed cat-5571 as a potential treatment for cystic fibrosis , or cf . cat-5571 is an oral small molecule that is designed to activate autophagy , a mechanism for recycling cellular components and digesting pathogens , which is important for host defenses and is depressed in cf . we have completed investigational new drug , or ind , application-enabling activities for cat-5571 . story_separator_special_tag general and administrative expenses general and administrative expenses increased by $ 0.4 million to $ 9.3 million for the year ended december 31 , 2018 from $ 8.9 million for the year ended december 31 , 2017 , an increase of 5 % . the increase in general and administrative expenses was attributable to a $ 0.8 million increase in employee compensation due to one-time performance bonuses awarded to general and administrative employees that were not awarded bonuses in 2017 , a $ 0.1 million increase in the general and administrative portion of insurance and facilities expense , and a $ 0.1 million increase in delaware franchise tax . these increases were partially offset by a $ 0.6 million decrease in consulting and professional services due to cost cutting associated with a strategic shift and restructuring . other income ( expense ) , net other income ( expense ) , net increased by $ 0.8 million for the year ended december 31 , 2018 compared to the year ended december 31 , 2017 due to a decrease in interest expense of $ 0.4 million due to principal payments made on our credit facility , an increase in other income of $ 0.1 million due 88 partially to the net gain realized on assets sold in consolidation of our facilities and an increase of $ 0.3 million in interest and investment income due to an increase in our interest-bearing assets following our june 2018 financing . story_separator_special_tag the number and characteristics of future product candidates that we pursue and their development requirements ; the outcome , timing and costs of seeking regulatory approvals ; the costs of commercialization activities for any of our product candidates that receive marketing approval to the extent such costs are not the responsibility of any future collaborators , including the costs and timing of establishing product sales , marketing , distribution and manufacturing capabilities ; subject to receipt of marketing approval , revenue , if any , received from commercial sales of our product candidates ; our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure ; the costs of preparing , filing and prosecuting patent applications , maintaining and protecting our intellectual property rights and defending against intellectual property related claims ; and the costs of operating as a public company . identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming , expensive and uncertain process that takes years to complete , and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales . in addition , our product candidates , if approved , may not achieve commercial success . our commercial revenues , if any , will be derived from sales of medicines that we do not expect to be commercially available for several years , if at all . accordingly , we will need to continue to rely on additional financing to achieve our business objectives . adequate additional financing may not be available to us on acceptable terms , or at all . until such time , if ever , as we can generate substantial product revenues , we expect to finance our cash needs through a combination of equity offerings , debt financings , collaborations , strategic alliances and licensing arrangements . we do not have any committed external source of funds . to the extent that we raise additional capital through the sale of equity or convertible debt securities , our stockholders ' ownership interests will be diluted , and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders ' rights . additional debt financing , if available , would result in increased fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions , such as incurring additional debt , making capital expenditures or declaring dividends , that could adversely impact our ability to conduct our business . if we raise funds through collaborations , strategic alliances or licensing arrangements with third parties , we may have to relinquish valuable rights to our technologies , future revenue streams , research programs or product candidates or to grant licenses on terms that may not be favorable to us . if we are unable to raise additional funds through equity or debt financings when needed , we may be required to delay , limit , reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves . 91 cash flows comparison of the years ended december 31 , 2018 and 2017 the following table provides information regarding our cash flows for the years ended december 31 , 2018 and 2017 ( in thousands ) : replace_table_token_3_th net cash used in operating activities net cash used in operating activities was $ 23.5 million for the year ended december 31 , 2018 and consisted primarily of a net loss of $ 25.9 million adjusted for non-cash items , including stock-based compensation expense of $ 1.8 million , depreciation and amortization expense of $ 0.1 million , other non-cash items of $ 0.1 million and a net decrease in operating assets of $ 0.7 million , which resulted primarily from increases in accounts payable and accrued expenses . these were partially offset by a gain on disposal of property and equipment of $ 0.3 million . net cash used in operating activities was $ 26.8 million for the year ended december 31 , 2017 and consisted primarily of a net loss of $ 27.4 million adjusted for non-cash items , including stock-based compensation expense of $ 2.0 million , depreciation and amortization expense of $ 0.3 million , non-cash interest expense of $ 0.2 million , and a net increase in operating assets of $ 1.9 million , which resulted ``` Narrative : liquidity and capital resources from our inception through december 31 , 2018 , we have raised an aggregate of $ 245.2 million , of which $ 92.9 million was from private placements of preferred stock , $ 69.0 million represented gross proceeds from our ipo , $ 11.5 million represented gross proceeds from our september 2016 registered direct offering , $ 19.0 million represented gross proceeds from our atm offering programs , $ 42.0 million represented gross proceeds from our june 2018 financing , $ 10.0 million was from a secured debt financing and $ 0.8 million was from common stock option and warrant exercises . as of december 31 , 2018 , we had $ 37.6 million in cash , cash equivalents and short-term investments . following december 31 , 2018 , we raised an additional $ 20.0 million in gross proceeds from our february 2019 financing and $ 2.1 million in gross proceeds under our atm offering program we have not generated any revenue from product sales to date . we have incurred significant annual net operating losses in every year since our inception and expect to incur net operating losses in 2019 and for the foreseeable future . as of december 31 , 2018 , we had an accumulated deficit of $ 197.3 million . we expect to continue to incur significant expenses and operating losses for the next several years . our net losses may fluctuate significantly from quarter to quarter and year to year . we anticipate that our expenses will increase significantly if and to the extent that we continue to develop and conduct clinical trials with respect to edasalonexent and other product candidates ; initiate and continue research , preclinical and clinical development efforts for our other product candidates and potential product candidates ; maintain , expand and protect our intellectual property portfolio ; establish a commercial infrastructure to support the marketing and sale of certain of our product candidates ; hire additional personnel , such as clinical , regulatory , quality control and scientific personnel ; and operate as a public company .

in 2012 the fulfill program generated $ 1.4 million of 22 operating income . we expect the contribution of our fulfill program to generate operating income between $ 2.5 million and $ 3.0 million in 2013. the refractory segment introduced a new , fourth generation lacam ® laser measurement system and expect additional lacam ® sales in 2013. we also signed an agreement with united steel company b.s.c . ( sulb ) to perform all refractory maintenance at a greenfield steel mill in bahrain that started up in the third quarter of 2012. minteq , working with other refractory companies , is responsible for coordinating refractory maintenance of the steel furnaces and other steel production vessels . we generated approximately $ 3 million in revenue from this contract in 2012 and we expect to generate between $ 8 million- $ 10 million per year of revenue over the 3 year term of the contract . the company 's balance sheet as of december 31 , 2012 continues to be very strong . cash , cash equivalents and short-term investments at december 31 , 2012 were approximately $ 468 million . our cash flows from operations were approximately $ 139 million in 2012. in addition , we had available lines of credit of $ 183.5 million , our debt to equity ratio was 0.10 , and our current ratio was 3.1. we face some significant risks and challenges in the future : · the industries we serve , primarily paper , steel , construction and automotive , have been adversely affected by the uncertain global economic climate , primarily in europe . although these markets have stabilized , our global business could be adversely affected by further decreases in economic activity . our refractories segment primarily serves the steel industry . although north american production improved slightly in 2012 as compared with the prior year , we saw declines in european steel production and it remains below 2008 levels . in the paper industry , which is served by our paper pcc product line , 2012 production levels for printing and writing papers within north america and europe , our two largest markets were 5 % and 4 % below the prior year . in addition , our processed minerals and specialty pcc product lines are affected by the domestic building and construction markets and the automotive market . housing starts in 2012 averaged approximately 781 thousand units , and were up 28 % from 2011 levels . housing starts were at a peak rate of 2.1 million units in 2005 . · some of our customers may experience mill shutdowns due to further consolidations , or may face liquidity issues , or bankruptcy , which could deteriorate the aging of our accounts receivable , increase our bad debt exposure and possibly trigger impairment of assets or realignment of our businesses . · consolidations and rationalizations in the paper and steel industries concentrate purchasing power in the hands of fewer customers , increasing pricing pressure on suppliers such as us . · most of our paper pcc sales are subject to long-term contracts that may be terminated pursuant to their terms , or may be renewed on terms less favorable to us . · we are subject to volatility in pricing and supply availability of our key raw materials used in our paper pcc product line and refractory product line . · we continue to rely on china for a portion of our supply of magnesium oxide in the refractories segment , which may be subject to uncertainty in availability and cost . · fluctuations in energy costs have an impact on all of our businesses . · changes in the fair market value of our pension assets , rates of return on assets , and discount rates could continue to have a significant impact on our net periodic pension costs as well as our funding status . · as we expand our operations abroad we face the inherent risks of doing business in many foreign countries , including foreign exchange risk , import and export restrictions , and security concerns . · the company 's operations , particularly in the mining and environmental areas ( discharges , emissions and greenhouse gases ) , are subject to regulation by federal , state and foreign authorities and may be subject to , and presumably will be required to comply with , additional laws , regulations and guidelines which may be adopted in the future . during the second quarter of 2011 , m-real corporation announced plans to divest its alizay paper mill in france . since that time , the mill has not been operating . in january 2013 , double a paper company announced it had acquired the alizay mill . while there can be no assurance , we expect to negotiate a contract and the paper mill to resume operations in the second half of 2013. in 2011 , sales from our alizay mill were approximately $ 7 million . during the third quarter of 2011 , newpage corporation filed for chapter 11 bankruptcy protection . in 2012 , the company did business with five newpage mills , including operating three satellite pcc facilities at newpage locations . in december 2012 , newpage emerged from the bankruptcy process and the company continues to supply pcc to these mills . annual sales to newpage locations in 2012 were approximately $ 22 million . the company has evaluated these facilities for impairment of assets and , based upon the information currently available and probability-weighted cash flows of various potential outcomes , has determined that no impairment charge was required in the fourth quarter . 23 outlook looking forward , we remain cautious about the state of the global economy , particularly in europe , and the impact it will have on our product lines . story_separator_special_tag · allowance for doubtful accounts : substantially all of our accounts receivable are due from companies in the paper , construction and steel industries . accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future . such allowance is established through a charge to the provision for bad debt expenses . we recorded bad debt expenses of $ 1.0 million , $ 0.9 million and $ 0.1 million in 2012 , 2011 and 2010 , respectively . in addition to specific allowances established for bankrupt customers , we also analyze the collection history and financial condition of our other customers considering current industry conditions and determine whether an allowance needs to be established or adjusted . · property , plant and equipment , goodwill , intangible and other long-lived assets : property , plant and equipment are depreciated over their useful lives . useful lives are based on management 's estimates of the period that the assets can generate revenue , which does not necessarily coincide with the remaining term of a customer 's contractual obligation to purchase products made using those assets . our sales of pcc are predominately pursuant to long-term evergreen contracts , initially ten years in length , with paper mills at which we operate satellite pcc plants . the terms of many of these agreements have been extended , often in connection with an expansion of the satellite pcc plant . failure of a pcc customer to renew an agreement or continue to purchase pcc from our facility could result in an impairment of assets or accelerated depreciation at such facility . · valuation of long-lived assets , goodwill and other intangible assets : we assess the possible impairment of long-lived assets and identifiable amortizable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable . goodwill is reviewed for impairment at least annually . factors we consider important that could trigger an impairment review include the following : significant under-performance relative to historical or projected future operating results ; significant changes in the manner of use of the acquired assets or the strategy for the overall business ; significant negative industry or economic trends ; market capitalization below invested capital . the goodwill balance for each reporting unit as of december 31 , 2012 and 2011 , respectively , was as follows : replace_table_token_20_th annually , the company performs a qualitative assessment for each of its reporting units to determine if the two step process for impairment testing is required . if the company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount , the company then evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level . step one involves a ) developing the fair value of total invested capital of each reporting unit in which goodwill is assigned ; and b ) comparing the fair value of total invested capital for each reporting unit to its carrying amount , to determine if 29 there is goodwill impairment . should the carrying amount for a reporting unit exceed its fair value , then the step one test is failed , and the magnitude of any goodwill impairment is determined under step two . the amount of impairment loss is determined in step two by comparing the implied fair value of reporting unit goodwill with the carrying amount of goodwill . the company has three reporting units ; pcc , processed minerals and refractories . we identify our reporting units by assessing whether the components of our operating segments constitute businesses for which discrete financial information is available and management regularly reviews the operating results of those components . in the fourth quarter of 2012 , the company performed a qualitative assessment of each of its reporting units and determined it was not more likely than not that the fair value of each of its reporting units was less than their carrying values . · accounting for income taxes : as part of the process of preparing our consolidated financial statements , we are required to estimate our income taxes in each of the jurisdictions in which we operate . this process involves estimating current tax expense together with assessing temporary differences resulting from differing treatments of items for tax and accounting purposes . these differences result in deferred tax assets and liabilities , which are included in the consolidated balance sheet . we must then assess the likelihood that our deferred tax assets will be recovered from future taxable income , and to the extent we believe that recovery is not likely , we must establish a valuation allowance . to the extent we establish a valuation allowance or change this allowance in a period , we must include an expense within the tax provision in the consolidated statements of operations . deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years . such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities , as well as from net operating loss . we evaluate the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources , including reversal of taxable temporary differences and forecasted operating earnings . these sources of income inherently rely heavily on estimates . we use our historical experience and business forecasts to provide insight . amounts recorded for deferred tax assets , net of valuation allowances , were $ 47.5 million and $ 44.4 million at december 31 , 2012 and 2011 , respectively . such year-end 2012 amounts are expected to be fully recoverable within the applicable statutory expiration periods . to the extent we do not consider it more likely than not that a deferred tax asset will be recovered , a

liquidity and capital resources cash flows provided from operations in 2012 were used principally to fund $ 52.1 million of capital expenditures , and repurchase $ 25.9 million in treasury shares . cash provided from operating activities totaled $ 139.9 million in 2012 as compared with $ 133.7 million in 2011. the increase in cash from operating activities was primarily due to higher net income and lower income tax payments which were partially offset by increased pension plan funding . included in cash flow from operations was pension plan funding of approximately $ 17.0 million , $ 6.6 million and $ 8.5 million for the years ended december 31 , 2012 , 2011 and 2010 , respectively . trade working capital is defined as trade accounts receivable , trade accounts payable and inventories . our total days of trade working capital increased to 59 days from 55 days in 2011 primarily due to higher receivables and lower payables in our refractories segment . the funding status of the company 's pension plans was approximately 66 % at december 31 , 2012 and we have met all minimum funding requirements . the funding status at december 31 , 2011 was 70 % . the reduction in our funding status was due to a large increase in the projected benefit obligation from a change in the discount rate . in 2011 , the company 's board of directors authorized the company 's management to repurchase , at its discretion , up to $ 75 million of additional shares over a two-year period . as of december 31 , 2012 , 633,575 shares have been repurchased under this program for $ 30.7 million , or an average price of approximately $ 48.38 per share . on january 23 , 2013 , the company 's board of directors declared a regular quarterly dividend on its common stock of $ 0.05 per share .

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text. ```in 2012 the fulfill program generated $ 1.4 million of 22 operating income . we expect the contribution of our fulfill program to generate operating income between $ 2.5 million and $ 3.0 million in 2013. the refractory segment introduced a new , fourth generation lacam ® laser measurement system and expect additional lacam ® sales in 2013. we also signed an agreement with united steel company b.s.c . ( sulb ) to perform all refractory maintenance at a greenfield steel mill in bahrain that started up in the third quarter of 2012. minteq , working with other refractory companies , is responsible for coordinating refractory maintenance of the steel furnaces and other steel production vessels . we generated approximately $ 3 million in revenue from this contract in 2012 and we expect to generate between $ 8 million- $ 10 million per year of revenue over the 3 year term of the contract . the company 's balance sheet as of december 31 , 2012 continues to be very strong . cash , cash equivalents and short-term investments at december 31 , 2012 were approximately $ 468 million . our cash flows from operations were approximately $ 139 million in 2012. in addition , we had available lines of credit of $ 183.5 million , our debt to equity ratio was 0.10 , and our current ratio was 3.1. we face some significant risks and challenges in the future : · the industries we serve , primarily paper , steel , construction and automotive , have been adversely affected by the uncertain global economic climate , primarily in europe . although these markets have stabilized , our global business could be adversely affected by further decreases in economic activity . our refractories segment primarily serves the steel industry . although north american production improved slightly in 2012 as compared with the prior year , we saw declines in european steel production and it remains below 2008 levels . in the paper industry , which is served by our paper pcc product line , 2012 production levels for printing and writing papers within north america and europe , our two largest markets were 5 % and 4 % below the prior year . in addition , our processed minerals and specialty pcc product lines are affected by the domestic building and construction markets and the automotive market . housing starts in 2012 averaged approximately 781 thousand units , and were up 28 % from 2011 levels . housing starts were at a peak rate of 2.1 million units in 2005 . · some of our customers may experience mill shutdowns due to further consolidations , or may face liquidity issues , or bankruptcy , which could deteriorate the aging of our accounts receivable , increase our bad debt exposure and possibly trigger impairment of assets or realignment of our businesses . · consolidations and rationalizations in the paper and steel industries concentrate purchasing power in the hands of fewer customers , increasing pricing pressure on suppliers such as us . · most of our paper pcc sales are subject to long-term contracts that may be terminated pursuant to their terms , or may be renewed on terms less favorable to us . · we are subject to volatility in pricing and supply availability of our key raw materials used in our paper pcc product line and refractory product line . · we continue to rely on china for a portion of our supply of magnesium oxide in the refractories segment , which may be subject to uncertainty in availability and cost . · fluctuations in energy costs have an impact on all of our businesses . · changes in the fair market value of our pension assets , rates of return on assets , and discount rates could continue to have a significant impact on our net periodic pension costs as well as our funding status . · as we expand our operations abroad we face the inherent risks of doing business in many foreign countries , including foreign exchange risk , import and export restrictions , and security concerns . · the company 's operations , particularly in the mining and environmental areas ( discharges , emissions and greenhouse gases ) , are subject to regulation by federal , state and foreign authorities and may be subject to , and presumably will be required to comply with , additional laws , regulations and guidelines which may be adopted in the future . during the second quarter of 2011 , m-real corporation announced plans to divest its alizay paper mill in france . since that time , the mill has not been operating . in january 2013 , double a paper company announced it had acquired the alizay mill . while there can be no assurance , we expect to negotiate a contract and the paper mill to resume operations in the second half of 2013. in 2011 , sales from our alizay mill were approximately $ 7 million . during the third quarter of 2011 , newpage corporation filed for chapter 11 bankruptcy protection . in 2012 , the company did business with five newpage mills , including operating three satellite pcc facilities at newpage locations . in december 2012 , newpage emerged from the bankruptcy process and the company continues to supply pcc to these mills . annual sales to newpage locations in 2012 were approximately $ 22 million . the company has evaluated these facilities for impairment of assets and , based upon the information currently available and probability-weighted cash flows of various potential outcomes , has determined that no impairment charge was required in the fourth quarter . 23 outlook looking forward , we remain cautious about the state of the global economy , particularly in europe , and the impact it will have on our product lines . story_separator_special_tag · allowance for doubtful accounts : substantially all of our accounts receivable are due from companies in the paper , construction and steel industries . accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future . such allowance is established through a charge to the provision for bad debt expenses . we recorded bad debt expenses of $ 1.0 million , $ 0.9 million and $ 0.1 million in 2012 , 2011 and 2010 , respectively . in addition to specific allowances established for bankrupt customers , we also analyze the collection history and financial condition of our other customers considering current industry conditions and determine whether an allowance needs to be established or adjusted . · property , plant and equipment , goodwill , intangible and other long-lived assets : property , plant and equipment are depreciated over their useful lives . useful lives are based on management 's estimates of the period that the assets can generate revenue , which does not necessarily coincide with the remaining term of a customer 's contractual obligation to purchase products made using those assets . our sales of pcc are predominately pursuant to long-term evergreen contracts , initially ten years in length , with paper mills at which we operate satellite pcc plants . the terms of many of these agreements have been extended , often in connection with an expansion of the satellite pcc plant . failure of a pcc customer to renew an agreement or continue to purchase pcc from our facility could result in an impairment of assets or accelerated depreciation at such facility . · valuation of long-lived assets , goodwill and other intangible assets : we assess the possible impairment of long-lived assets and identifiable amortizable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable . goodwill is reviewed for impairment at least annually . factors we consider important that could trigger an impairment review include the following : significant under-performance relative to historical or projected future operating results ; significant changes in the manner of use of the acquired assets or the strategy for the overall business ; significant negative industry or economic trends ; market capitalization below invested capital . the goodwill balance for each reporting unit as of december 31 , 2012 and 2011 , respectively , was as follows : replace_table_token_20_th annually , the company performs a qualitative assessment for each of its reporting units to determine if the two step process for impairment testing is required . if the company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount , the company then evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level . step one involves a ) developing the fair value of total invested capital of each reporting unit in which goodwill is assigned ; and b ) comparing the fair value of total invested capital for each reporting unit to its carrying amount , to determine if 29 there is goodwill impairment . should the carrying amount for a reporting unit exceed its fair value , then the step one test is failed , and the magnitude of any goodwill impairment is determined under step two . the amount of impairment loss is determined in step two by comparing the implied fair value of reporting unit goodwill with the carrying amount of goodwill . the company has three reporting units ; pcc , processed minerals and refractories . we identify our reporting units by assessing whether the components of our operating segments constitute businesses for which discrete financial information is available and management regularly reviews the operating results of those components . in the fourth quarter of 2012 , the company performed a qualitative assessment of each of its reporting units and determined it was not more likely than not that the fair value of each of its reporting units was less than their carrying values . · accounting for income taxes : as part of the process of preparing our consolidated financial statements , we are required to estimate our income taxes in each of the jurisdictions in which we operate . this process involves estimating current tax expense together with assessing temporary differences resulting from differing treatments of items for tax and accounting purposes . these differences result in deferred tax assets and liabilities , which are included in the consolidated balance sheet . we must then assess the likelihood that our deferred tax assets will be recovered from future taxable income , and to the extent we believe that recovery is not likely , we must establish a valuation allowance . to the extent we establish a valuation allowance or change this allowance in a period , we must include an expense within the tax provision in the consolidated statements of operations . deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years . such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities , as well as from net operating loss . we evaluate the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources , including reversal of taxable temporary differences and forecasted operating earnings . these sources of income inherently rely heavily on estimates . we use our historical experience and business forecasts to provide insight . amounts recorded for deferred tax assets , net of valuation allowances , were $ 47.5 million and $ 44.4 million at december 31 , 2012 and 2011 , respectively . such year-end 2012 amounts are expected to be fully recoverable within the applicable statutory expiration periods . to the extent we do not consider it more likely than not that a deferred tax asset will be recovered , a ``` Narrative : liquidity and capital resources cash flows provided from operations in 2012 were used principally to fund $ 52.1 million of capital expenditures , and repurchase $ 25.9 million in treasury shares . cash provided from operating activities totaled $ 139.9 million in 2012 as compared with $ 133.7 million in 2011. the increase in cash from operating activities was primarily due to higher net income and lower income tax payments which were partially offset by increased pension plan funding . included in cash flow from operations was pension plan funding of approximately $ 17.0 million , $ 6.6 million and $ 8.5 million for the years ended december 31 , 2012 , 2011 and 2010 , respectively . trade working capital is defined as trade accounts receivable , trade accounts payable and inventories . our total days of trade working capital increased to 59 days from 55 days in 2011 primarily due to higher receivables and lower payables in our refractories segment . the funding status of the company 's pension plans was approximately 66 % at december 31 , 2012 and we have met all minimum funding requirements . the funding status at december 31 , 2011 was 70 % . the reduction in our funding status was due to a large increase in the projected benefit obligation from a change in the discount rate . in 2011 , the company 's board of directors authorized the company 's management to repurchase , at its discretion , up to $ 75 million of additional shares over a two-year period . as of december 31 , 2012 , 633,575 shares have been repurchased under this program for $ 30.7 million , or an average price of approximately $ 48.38 per share . on january 23 , 2013 , the company 's board of directors declared a regular quarterly dividend on its common stock of $ 0.05 per share .

combined sales to academic and governmental customers increased 2 % in 2019 and 8 % in 2018 , with the effect of foreign currency translation decreasing sales by 1 % in 2019 and increasing sales by 1 % in 2018. sales to academic and governmental customers are highly dependent on when institutions receive funding to purchase our instrument systems and , as such , sales growth rates can vary significantly from period to period . operating income was $ 708 million in 2019 , a decrease of 4 % as compared to 2018. this decrease can be attributed to lower sales volume , the effect of foreign currency translation and $ 10 million of severance-related costs in connection with a reduction in workforce that occurred in early 2019 , offset by lower variable incentive compensation costs . 27 operating income increased 12 % in 2018 as compared to 2017. this increase was primarily a result of the effect of higher sales volume achieved in 2018 , as well as the effect of approximately $ 33 million of facility closure , litigation and intellectual property payment charges from 2017 that did not recur in 2018. the company 's effective tax rates were 12.7 % , 13.0 % and 96.8 % for 2019 , 2018 and 2017 , respectively . net income per diluted share was $ 8.69 , $ 7.65 and $ 0.25 in 2019 , 2018 and 2017 , respectively . in 2018 , the company settled a pension plan obligation and incurred a $ 46 million expense which reduced the net income per diluted share by $ 0.39. in 2017 , the company incurred a $ 550 million income tax provision related to the 2017 tax cuts and jobs act ( “ 2017 tax act ” ) which reduced the net income per diluted share by $ 6.82 , and excluding the 2017 tax act income tax provision , the company 's effective tax rate in 2017 would have been 11.0 % . the company generated $ 643 million , $ 604 million and $ 698 million of net cash flows from operations in 2019 , 2018 and 2017 , respectively . the increase in operating cash flow in 2019 was primarily a result of payments made in 2018 that did not recur , including $ 103 million of income tax payments made in the u.s. relating to the company 's estimated 2017 transition tax liability and 2018 estimated tax payments , a $ 15 million litigation settlement payment and $ 11 million of contributions to certain defined benefit pension plans . included in the 2019 net cash flow from operations is $ 29 million of income tax payments made in the u.s. in relation to the 2017 transition tax liability . over the next three years , the company is required to make annual u.s. federal tax payments of approximately $ 38 million to tax authorities in connection with the company 's estimated remaining transition tax liabilities of $ 404 million under the 2017 tax act . the final 60 % of the total liability is required to be paid over a three-year period beginning in 2023. cash flows used in investing activities included capital expenditures related to property , plant , equipment and software capitalization of $ 164 million , $ 96 million and $ 85 million in 2019 , 2018 and 2017 , respectively . in 2019 , $ 68 million of capital expenditures paid related to the expansion of the company 's precision chemistry consumable operations in the u.s. the company has incurred $ 85 million of costs for this facility through the end of 2019. in 2018 , the company acquired the sole intellectual property rights to the desorption electrospray ionization ( “ desi ” ) imaging technology for $ 30 million in cash and a future contractual obligation to pay a minimum royalty of $ 3 million over the remaining life of the patent . desi is a mass spectrometry imaging technique that is used to develop medical therapies . in january 2019 , the company 's board of directors authorized the company to repurchase up to $ 4 billion of its outstanding common stock over a two-year period . during 2019 , 2018 and 2017 , the company repurchased 11.1 million , 6.8 million and 1.8 million shares of the company 's outstanding common stock at a cost of $ 2.5 billion , $ 1.3 billion and $ 323 million , respectively , under the january 2019 authorization and other previously announced programs . as of december 31 , 2019 , the company has a total of $ 1.7 billion authorized for future repurchases . the company believes that it has the financial flexibility to fund these share repurchases given current cash and investment levels and debt borrowing capacity , as well as to invest in research , technology and business acquisitions to further grow the company 's sales and profits . in september 2019 , the company issued fixed interest rate senior unsecured notes with an aggregate principal amount of $ 500 million , of which $ 200 million of the outstanding notes matures in seven years and the remaining $ 300 million matures in 10 years . the company used the proceeds from the issuance of these senior unsecured notes to repay other outstanding debt and for general corporate purposes . during 2019 and 2018 , the company entered into $ 260 million and $ 300 million , respectively , of u.s.-to-euro interest rate cross-currency swap agreements that hedge the company 's net investment in its euro denominated net assets , bringing the total currency interest rate cross-currency swap agreement notional value to $ 560 million at december 31 , 2019. as a result of entering into these agreements , the company lowered its net interest expense by $ 12 million and $ 3 million during 2019 and 2018 , respectively . story_separator_special_tag contractual obligations and commercial commitments the following is a summary of the company 's known contractual obligations as of december 31 , 2019 ( in thousands ) : replace_table_token_10_th ( 1 ) does not include normal purchases made in the ordinary course of business and uncertain tax positions discussed below . ( 2 ) the interest rates applicable to the 2017 credit agreement are , at the company 's option , equal to either the alternate base rate ( which is a rate per annum equal to the greatest of ( a ) the prime rate in effect on such day , ( b ) the federal reserve bank of new york rate on such day plus 1/2 of 1 % per annum and ( c ) the adjusted libo rate on such day ( or if such day is not a business day , the immediately preceding business day ) for a deposit in u.s. dollars with a maturity of one month plus 1 % per annum ) or the applicable 1 , 2 , 3 or 6 month adjusted libo rate or euribo rate for euro-denominated loans , in each case , plus an interest rate margin based upon the company 's leverage ratio , which can range between 0 and 12.5 basis points for alternate base rate loans and between 80 and 112.5 basis points for libo rate or euribo rate loans . the facility fee on the 2017 credit agreement ranges between 7.5 and 25 basis points per annum , based on the leverage ratio , of the amount of the revolving facility commitments and the outstanding term loan . the 2017 credit agreement requires that the company comply with an interest coverage ratio test of not less than 3.50:1 as of the end of any fiscal quarter for any period of four consecutive fiscal quarters and a leverage ratio test of not more than 3.50:1 as of the end of any fiscal quarter . in addition , the 2017 credit agreement includes negative covenants , affirmative covenants , representations and warranties and events of default that are customary for investment grade credit facilities . as of december 31 , 2019 , the company was in compliance with all such covenants . 36 the following is a summary of the company 's known commercial commitments as of december 31 , 2019 ( in thousands ) : replace_table_token_11_th from time to time , the company and its subsidiaries are involved in various litigation matters arising in the ordinary course of business . the company believes it has meritorious arguments in its current litigation matters and believes any outcome , either individually or in the aggregate , will not be material to the company 's financial position or results of operations . the company has long-term liabilities for deferred employee compensation , including pension and supplemental executive retirement plans . the payments related to the supplemental retirement plan are not included above since they are dependent upon when the employee retires or leaves the company and whether the employee elects lump-sum or annuity payments . during fiscal year 2020 , the company expects to contribute approximately $ 3 million to $ 6 million to the company 's defined benefit plans . the company has contingent consideration for an earnout pertaining to its july 2014 acquisition of the net assets of medimass research , development and service kft . ( “ medimass ” ) . the earnout payments are not included above since they are dependent upon many factors that can not be predicted with any certainty . the estimated fair value of the contingent consideration as of december 31 , 2019 is $ 3 million . the company licenses certain technology and software from third parties . future minimum license fees payable under existing license agreements as of december 31 , 2019 are immaterial . the company enters into licensing arrangements with third parties that require future milestone or royalty payments contingent upon future events . upon the achievement of certain milestones in existing agreements , the company could make additional future payments of up to $ 7 million , as well as royalties on future net sales . it is not possible to predict with reasonable certainty whether these milestones will be achieved or the timing for achievement . as a result , these potential payments are not included in the table above . the company has not paid any dividends and has no plans , at this time , to pay any dividends in the future . off-balance sheet arrangements the company has not created , and is not party to , any special-purpose or off-balance sheet entities for the purpose of raising capital , incurring debt or operating parts of its business that are not consolidated ( to the extent of the company 's ownership interest therein ) into the consolidated financial statements . the company has not entered into any transactions with unconsolidated entities whereby it has subordinated retained interests , derivative instruments or other contingent arrangements that expose the company to material continuing risks , contingent liabilities or any other obligation under a variable interest in an unconsolidated entity that provides financing , liquidity , market risk or credit risk support to the company . the company enters into standard indemnification agreements in its ordinary course of business . pursuant to these agreements , the company indemnifies , holds harmless and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party , generally the company 's business partners or customers , in connection with patent , copyright or other intellectual property infringement claims by any third party with respect to its current products , as well as claims relating to property damage or personal injury resulting from the performance of services by the company or its subcontractors . the maximum potential amount of future payments the company could be required to make under these indemnification agreements is unlimited

cash flow from operating activities net cash provided by operating activities was $ 643 million , $ 604 million and $ 698 million in 2019 , 2018 and 2017 , respectively . the changes within net cash provided by operating activities include the following significant changes in the sources and uses of net cash provided by operating activities , aside from the changes in net income : the changes in accounts receivable were primarily attributable to timing of payments made by customers and timing of sales . days sales outstanding was 77 days at december 31 , 2019 , 74 days at december 31 , 2018 and 71 days at 2017 . 33 the changes in inventory were primarily attributable to new product launches and the increase in safety stock in advance of brexit . the changes in accounts payable and other current liabilities were the result of timing of payments to vendors . in addition , the change in 2019 as compared to 2018 includes $ 29 million and $ 103 million , respectively , of income tax payments made in the u.s. relating to the company 's estimated 2017 tax reform liability and 2018 estimated income tax payments and a $ 15 million litigation settlement payment . net cash provided from deferred revenue and customer advances results from annual increases in new service contracts as a higher installed base of customers renew annual service contracts . other changes were attributable to variation in the timing of various provisions , expenditures , prepaid income taxes and accruals in other current assets , other assets , other liabilities , and income tax expenses related to the 2017 tax act . in addition , in 2018 , the company made $ 11 million of contributions to certain defined benefit pension plans .

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text. ```combined sales to academic and governmental customers increased 2 % in 2019 and 8 % in 2018 , with the effect of foreign currency translation decreasing sales by 1 % in 2019 and increasing sales by 1 % in 2018. sales to academic and governmental customers are highly dependent on when institutions receive funding to purchase our instrument systems and , as such , sales growth rates can vary significantly from period to period . operating income was $ 708 million in 2019 , a decrease of 4 % as compared to 2018. this decrease can be attributed to lower sales volume , the effect of foreign currency translation and $ 10 million of severance-related costs in connection with a reduction in workforce that occurred in early 2019 , offset by lower variable incentive compensation costs . 27 operating income increased 12 % in 2018 as compared to 2017. this increase was primarily a result of the effect of higher sales volume achieved in 2018 , as well as the effect of approximately $ 33 million of facility closure , litigation and intellectual property payment charges from 2017 that did not recur in 2018. the company 's effective tax rates were 12.7 % , 13.0 % and 96.8 % for 2019 , 2018 and 2017 , respectively . net income per diluted share was $ 8.69 , $ 7.65 and $ 0.25 in 2019 , 2018 and 2017 , respectively . in 2018 , the company settled a pension plan obligation and incurred a $ 46 million expense which reduced the net income per diluted share by $ 0.39. in 2017 , the company incurred a $ 550 million income tax provision related to the 2017 tax cuts and jobs act ( “ 2017 tax act ” ) which reduced the net income per diluted share by $ 6.82 , and excluding the 2017 tax act income tax provision , the company 's effective tax rate in 2017 would have been 11.0 % . the company generated $ 643 million , $ 604 million and $ 698 million of net cash flows from operations in 2019 , 2018 and 2017 , respectively . the increase in operating cash flow in 2019 was primarily a result of payments made in 2018 that did not recur , including $ 103 million of income tax payments made in the u.s. relating to the company 's estimated 2017 transition tax liability and 2018 estimated tax payments , a $ 15 million litigation settlement payment and $ 11 million of contributions to certain defined benefit pension plans . included in the 2019 net cash flow from operations is $ 29 million of income tax payments made in the u.s. in relation to the 2017 transition tax liability . over the next three years , the company is required to make annual u.s. federal tax payments of approximately $ 38 million to tax authorities in connection with the company 's estimated remaining transition tax liabilities of $ 404 million under the 2017 tax act . the final 60 % of the total liability is required to be paid over a three-year period beginning in 2023. cash flows used in investing activities included capital expenditures related to property , plant , equipment and software capitalization of $ 164 million , $ 96 million and $ 85 million in 2019 , 2018 and 2017 , respectively . in 2019 , $ 68 million of capital expenditures paid related to the expansion of the company 's precision chemistry consumable operations in the u.s. the company has incurred $ 85 million of costs for this facility through the end of 2019. in 2018 , the company acquired the sole intellectual property rights to the desorption electrospray ionization ( “ desi ” ) imaging technology for $ 30 million in cash and a future contractual obligation to pay a minimum royalty of $ 3 million over the remaining life of the patent . desi is a mass spectrometry imaging technique that is used to develop medical therapies . in january 2019 , the company 's board of directors authorized the company to repurchase up to $ 4 billion of its outstanding common stock over a two-year period . during 2019 , 2018 and 2017 , the company repurchased 11.1 million , 6.8 million and 1.8 million shares of the company 's outstanding common stock at a cost of $ 2.5 billion , $ 1.3 billion and $ 323 million , respectively , under the january 2019 authorization and other previously announced programs . as of december 31 , 2019 , the company has a total of $ 1.7 billion authorized for future repurchases . the company believes that it has the financial flexibility to fund these share repurchases given current cash and investment levels and debt borrowing capacity , as well as to invest in research , technology and business acquisitions to further grow the company 's sales and profits . in september 2019 , the company issued fixed interest rate senior unsecured notes with an aggregate principal amount of $ 500 million , of which $ 200 million of the outstanding notes matures in seven years and the remaining $ 300 million matures in 10 years . the company used the proceeds from the issuance of these senior unsecured notes to repay other outstanding debt and for general corporate purposes . during 2019 and 2018 , the company entered into $ 260 million and $ 300 million , respectively , of u.s.-to-euro interest rate cross-currency swap agreements that hedge the company 's net investment in its euro denominated net assets , bringing the total currency interest rate cross-currency swap agreement notional value to $ 560 million at december 31 , 2019. as a result of entering into these agreements , the company lowered its net interest expense by $ 12 million and $ 3 million during 2019 and 2018 , respectively . story_separator_special_tag contractual obligations and commercial commitments the following is a summary of the company 's known contractual obligations as of december 31 , 2019 ( in thousands ) : replace_table_token_10_th ( 1 ) does not include normal purchases made in the ordinary course of business and uncertain tax positions discussed below . ( 2 ) the interest rates applicable to the 2017 credit agreement are , at the company 's option , equal to either the alternate base rate ( which is a rate per annum equal to the greatest of ( a ) the prime rate in effect on such day , ( b ) the federal reserve bank of new york rate on such day plus 1/2 of 1 % per annum and ( c ) the adjusted libo rate on such day ( or if such day is not a business day , the immediately preceding business day ) for a deposit in u.s. dollars with a maturity of one month plus 1 % per annum ) or the applicable 1 , 2 , 3 or 6 month adjusted libo rate or euribo rate for euro-denominated loans , in each case , plus an interest rate margin based upon the company 's leverage ratio , which can range between 0 and 12.5 basis points for alternate base rate loans and between 80 and 112.5 basis points for libo rate or euribo rate loans . the facility fee on the 2017 credit agreement ranges between 7.5 and 25 basis points per annum , based on the leverage ratio , of the amount of the revolving facility commitments and the outstanding term loan . the 2017 credit agreement requires that the company comply with an interest coverage ratio test of not less than 3.50:1 as of the end of any fiscal quarter for any period of four consecutive fiscal quarters and a leverage ratio test of not more than 3.50:1 as of the end of any fiscal quarter . in addition , the 2017 credit agreement includes negative covenants , affirmative covenants , representations and warranties and events of default that are customary for investment grade credit facilities . as of december 31 , 2019 , the company was in compliance with all such covenants . 36 the following is a summary of the company 's known commercial commitments as of december 31 , 2019 ( in thousands ) : replace_table_token_11_th from time to time , the company and its subsidiaries are involved in various litigation matters arising in the ordinary course of business . the company believes it has meritorious arguments in its current litigation matters and believes any outcome , either individually or in the aggregate , will not be material to the company 's financial position or results of operations . the company has long-term liabilities for deferred employee compensation , including pension and supplemental executive retirement plans . the payments related to the supplemental retirement plan are not included above since they are dependent upon when the employee retires or leaves the company and whether the employee elects lump-sum or annuity payments . during fiscal year 2020 , the company expects to contribute approximately $ 3 million to $ 6 million to the company 's defined benefit plans . the company has contingent consideration for an earnout pertaining to its july 2014 acquisition of the net assets of medimass research , development and service kft . ( “ medimass ” ) . the earnout payments are not included above since they are dependent upon many factors that can not be predicted with any certainty . the estimated fair value of the contingent consideration as of december 31 , 2019 is $ 3 million . the company licenses certain technology and software from third parties . future minimum license fees payable under existing license agreements as of december 31 , 2019 are immaterial . the company enters into licensing arrangements with third parties that require future milestone or royalty payments contingent upon future events . upon the achievement of certain milestones in existing agreements , the company could make additional future payments of up to $ 7 million , as well as royalties on future net sales . it is not possible to predict with reasonable certainty whether these milestones will be achieved or the timing for achievement . as a result , these potential payments are not included in the table above . the company has not paid any dividends and has no plans , at this time , to pay any dividends in the future . off-balance sheet arrangements the company has not created , and is not party to , any special-purpose or off-balance sheet entities for the purpose of raising capital , incurring debt or operating parts of its business that are not consolidated ( to the extent of the company 's ownership interest therein ) into the consolidated financial statements . the company has not entered into any transactions with unconsolidated entities whereby it has subordinated retained interests , derivative instruments or other contingent arrangements that expose the company to material continuing risks , contingent liabilities or any other obligation under a variable interest in an unconsolidated entity that provides financing , liquidity , market risk or credit risk support to the company . the company enters into standard indemnification agreements in its ordinary course of business . pursuant to these agreements , the company indemnifies , holds harmless and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party , generally the company 's business partners or customers , in connection with patent , copyright or other intellectual property infringement claims by any third party with respect to its current products , as well as claims relating to property damage or personal injury resulting from the performance of services by the company or its subcontractors . the maximum potential amount of future payments the company could be required to make under these indemnification agreements is unlimited ``` Narrative : cash flow from operating activities net cash provided by operating activities was $ 643 million , $ 604 million and $ 698 million in 2019 , 2018 and 2017 , respectively . the changes within net cash provided by operating activities include the following significant changes in the sources and uses of net cash provided by operating activities , aside from the changes in net income : the changes in accounts receivable were primarily attributable to timing of payments made by customers and timing of sales . days sales outstanding was 77 days at december 31 , 2019 , 74 days at december 31 , 2018 and 71 days at 2017 . 33 the changes in inventory were primarily attributable to new product launches and the increase in safety stock in advance of brexit . the changes in accounts payable and other current liabilities were the result of timing of payments to vendors . in addition , the change in 2019 as compared to 2018 includes $ 29 million and $ 103 million , respectively , of income tax payments made in the u.s. relating to the company 's estimated 2017 tax reform liability and 2018 estimated income tax payments and a $ 15 million litigation settlement payment . net cash provided from deferred revenue and customer advances results from annual increases in new service contracts as a higher installed base of customers renew annual service contracts . other changes were attributable to variation in the timing of various provisions , expenditures , prepaid income taxes and accruals in other current assets , other assets , other liabilities , and income tax expenses related to the 2017 tax act . in addition , in 2018 , the company made $ 11 million of contributions to certain defined benefit pension plans .

the timing and amount of these investments vary based on the rate at which we add new clients , add new personnel and scale our application development and other activities . many of these investments will occur in advance of experiencing any direct benefit from them which will make it difficult to determine if we are effectively allocating our resources . we expect these investments to increase our costs on an absolute basis , but as we grow our number of clients and our related revenues , we anticipate that we will gain economies of scale and increased operating leverage . as a result , we expect our gross and operating margins will improve over the long term . as our business has grown , we have become increasingly subject to the risks arising from adverse changes in domestic and global economic conditions . if general economic conditions were to deteriorate further , including declines in private sector employment growth and business productivity , increases in the unemployment rate and changes in interest rates , we may experience delays in our sales cycles , increased pressure from prospective customers to offer discounts and increased pressure from existing customers to renew expiring recurring revenue agreements for lower amounts . our interest income on funds held for clients continues to be negatively impacted by historically low interest rates . 32 our operating subsidiary paylocity corporation was incorporated in july 1997 as an illinois corporation . in november 2013 , we formed paylocity holding corporation , a delaware corporation , of which paylocity corporation is now a wholly-owned subsidiary . paylocity holding corporation had no operations prior to the restructuring . all of our business operations have historically been , and are currently , conducted by paylocity corporation , and the financial results presented herein are entirely attributable to the results of its operations . key metrics we regularly review a number of metrics , including the following key metrics , to evaluate our business , measure our performance , identify trends affecting our business , formulate financial projections and make strategic decisions . recurring revenue growth our recurring revenue model and high annual revenue retention rates provide significant visibility into our future operating results and cash flow from operations . this visibility enables us to better manage and invest in our business . recurring revenue , which is comprised of recurring fees and interest income on funds held for clients , increased from $ 72.8 million in fiscal 2013 to $ 101.9 million in fiscal 2014 , representing a 40 % year-over-year increase . recurring revenue increased from $ 101.9 million in fiscal 2014 to $ 144.1 million in fiscal 2015 , representing a 41 % year-over-year increase . recurring revenue represented 94 % of total revenue in each of the fiscal years ended 2013 , 2014 , and 2015. client count growth we believe there is a significant opportunity to grow our business by increasing our number of clients . we have increased our number of clients from approximately 6,850 as of june 30 , 2013 to approximately 10,350 as of june 30 , 2015 , representing a compound annual growth rate of approximately 23 % . the table below sets forth our client count for the periods indicated , rounded to the nearest fifty . replace_table_token_6_th the rate at which we add clients is highly variable period-to-period and highly seasonal as many clients switch solutions during the first calendar quarter of each year . although many clients have multiple divisions , segments or locations , we only count such clients once for these purposes . annual revenue retention rate our annual revenue retention rate has been in excess of 92 % during each of the past three fiscal years . we calculate our annual revenue retention rate as our total revenue for the preceding 12 months , less the annualized value of revenue lost during the preceding 12 months , divided by our total revenue for the preceding 12 months . we calculate the annualized value of revenue lost by summing the recurring fees paid by lost clients over the previous twelve months prior to their termination if they have been a client for a minimum of twelve months . for those lost clients who became clients within the last twelve months , we sum the recurring fees for the period that they have been a client and then annualize the amount . we exclude interest income on funds held for clients from the revenue retention calculation . we believe that our annual revenue retention rate is an important metric to measure overall client satisfaction and the general quality of our product and service offerings . recurring fees from new clients we calculate recurring fees from new clients as the percentage of year-to-date recurring fees from all clients on our solutions which had not been on or used any of our solutions for a full year as of the start of the current fiscal year . we believe recurring fees from new clients is an important metric to measure the expansion of our existing client base as well as the growth in our client base . our recurring fees from new clients for fiscal 2013 and 2014 were 44 % and for fiscal 2015 was 45 % . adjusted gross profit , adjusted recurring gross profit and adjusted ebitda we disclose adjusted gross profit , adjusted recurring gross profit and adjusted ebitda because we use them to evaluate our performance , and we believe adjusted gross profit , adjusted recurring gross profit and adjusted ebitda assist in the comparison of our performance across reporting periods by excluding certain items that we do not believe are indicative of our core operating performance . we believe these metrics are used in the financial community , and we present it to enhance investors ' understanding of our operating performance and cash flows . story_separator_special_tag the increase was also attributable to $ 0.8 million of stock-based compensation associated with our broad based ipo grant to all employees . research and development replace_table_token_14_th research and development for the year ended june 30 , 2015 increased by $ 9.5 million , or 92 % , to $ 19.9 million from $ 10.4 million for the year ended june 30 , 2014. research and development costs increased in fiscal 2015 primarily due to $ 7.5 million of additional employee-related expenses related to 64 additional development personnel and $ 2.2 million of stock-based compensation associated with our equity incentive plan . this was offset by an increase of $ 0.2 million in our capitalized internal-use software costs . research and development for the year ended june 30 , 2014 increased by $ 3.5 million , or 52 % , to $ 10.4 million from $ 6.8 million for the year ended june 30 , 2013. research and development costs increased in fiscal 2014 primarily due to $ 5.1 million of additional employee-related expenses related to 27 additional development personnel , $ 0.6 million of stock-based compensation associated with our broad based ipo grant to all employees and $ 0.5 million related to the one-time founder funded bonus pay-outs . this was offset by an increase of $ 2.7 million in our capitalized internal-use software costs as we developed significant additional functionality in our human capital management applications during the year . general and administrative replace_table_token_15_th general and administrative expenses for the year ended june 30 , 2015 increased by $ 10.8 million , or 49 % , to $ 32.8 million from $ 22.0 million for the year ended june 30 , 2014. general and administrative expenses increased primarily as a result of $ 5.0 million of additional employee-related expenses relating to 30 additional personnel , $ 2.0 million of additional stock-based 39 compensation costs , $ 1.5 million of increased occupancy costs incurred as a result of our requirement for additional office space , $ 0.8 million of amortization expense of the customer relationship and non-compete intangibles associated with acquisitions of both of our resellers , $ 0.7 million of increased insurance costs associated with being a public company , and $ 0.3 million in additional professional fees . general and administrative expenses for the year ended june 30 , 2014 increased by $ 9.9 million , or 82 % , to $ 22.0 million from $ 12.1 million for the year ended june 30 , 2013. general and administrative expenses increased primarily as a result of $ 4.3 million of additional employee-related expenses relating to 18 additional personnel , $ 2.1 million of additional stock-based compensation costs associated with ipo related grants of options and restricted stock units , $ 1.7 million in additional professional fees and $ 0.6 million of increased occupancy costs incurred as a result of our requirement for additional office space . other income ( expense ) replace_table_token_16_th * not meaningful other income ( expense ) for the year ended june 30 , 2015 decreased by $ 0.1 million as compared to the year ended june 30 , 2014. other income for the year ended june 30 , 2015 primarily consists of interest income earned on our cash and cash equivalents partially offset by loss on the disposal of property and equipment . other income ( expense ) for the year ended june 30 , 2014 increased by $ 0.2 million as compared to the year ended june 30 , 2013. other income for the year ended june 30 , 2014 primarily consisted of interest income earned on our cash and cash equivalents , partially offset by interest expense incurred on our note payable and other debt , which was repaid in full in march 2014. income tax ( benefit ) expense replace_table_token_17_th * not meaningful income tax ( benefit ) expense for the year ended june 30 , 2015 decreased by $ 0.2 million , as compared to the year ended june 30 , 2014 primarily due to the recognition of a deferred tax asset valuation allowance during the year ended june 30 , 2014 related to net deferred tax balances generated in prior years . income tax ( benefit ) expense for the year ended june 30 , 2014 increased by $ 0.9 million , as compared to the year ended june 30 , 2013 primarily due to the expiration of federal research and development tax credit allowances resulting in a $ 0.5 million decline in amount claimed and an increase in non-deductible expenses as a result of our growing business . the company also recognized a valuation allowance as of june 30 , 2014 on substantially all of its net deferred tax assets , many of which were generated in the three month period ended june 30 , 2014 , given its determination that it was more likely than not that the company would not recognize the benefits of its net operating loss carryforwards prior to their expiration . see note 11 of the notes to consolidated financial statements included in part ii , item 8 : “financial statements and supplementary data” of this annual report on form 10-k for further details on the valuation allowance and a reconciliation of the u.s. federal statutory rate to the effective tax rate . critical accounting policies and significant judgments and estimates in preparing our financial statements and accounting for the underlying transactions and balances in accordance with gaap , we apply various accounting policies that require our management to make estimates , judgments and assumptions that affect the amounts reported in our financial statements . we consider the policies discussed below as critical to understanding our financial statements , as their application places the most significant demands on management 's judgment . management bases its estimates , judgments and assumptions on historical experience , current economic and industry conditions and on various other factors deemed to be reasonable under the circumstances ,

cash flows the following table sets forth data regarding cash flows for the periods indicated : replace_table_token_20_th operating activities net cash provided by operating activities was $ 6.2 million , $ 7.2 million and $ 11.1 million for the years ended june 30 , 2013 , 2014 and 2015 , respectively . the increase in net cash provided by operating activities from fiscal 2014 to fiscal 2015 was primarily due to improved operating results after adjusting for non-cash items including stock-based compensation and depreciation and amortization . the increase in net cash provided by operating activities from fiscal 2013 to fiscal 2014 was the primarily the result of the change of $ 2.3 million in operating assets and liabilities partially offset by the increase in net loss and increases in non-cash items including stock-based compensation and depreciation and amortization . investing activities net cash used in investing activities was $ 98.6 million , $ 78.8 million and $ 199.2 million , for the years ended june 30 , 2013 , 2014 and 2015 , respectively . changes in net cash used in investing activities are significantly influenced by the amount of funds held for clients at the end of a reporting period . changes in the amount of funds held for client from period to period will vary substantially . our payroll processing activities involves the movement of significant funds from the account of an employer to employees and relevant taxing authorities . during the year ended june 30 , 2015 we processed almost $ 54 billion in payroll transactions .

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text. ```the timing and amount of these investments vary based on the rate at which we add new clients , add new personnel and scale our application development and other activities . many of these investments will occur in advance of experiencing any direct benefit from them which will make it difficult to determine if we are effectively allocating our resources . we expect these investments to increase our costs on an absolute basis , but as we grow our number of clients and our related revenues , we anticipate that we will gain economies of scale and increased operating leverage . as a result , we expect our gross and operating margins will improve over the long term . as our business has grown , we have become increasingly subject to the risks arising from adverse changes in domestic and global economic conditions . if general economic conditions were to deteriorate further , including declines in private sector employment growth and business productivity , increases in the unemployment rate and changes in interest rates , we may experience delays in our sales cycles , increased pressure from prospective customers to offer discounts and increased pressure from existing customers to renew expiring recurring revenue agreements for lower amounts . our interest income on funds held for clients continues to be negatively impacted by historically low interest rates . 32 our operating subsidiary paylocity corporation was incorporated in july 1997 as an illinois corporation . in november 2013 , we formed paylocity holding corporation , a delaware corporation , of which paylocity corporation is now a wholly-owned subsidiary . paylocity holding corporation had no operations prior to the restructuring . all of our business operations have historically been , and are currently , conducted by paylocity corporation , and the financial results presented herein are entirely attributable to the results of its operations . key metrics we regularly review a number of metrics , including the following key metrics , to evaluate our business , measure our performance , identify trends affecting our business , formulate financial projections and make strategic decisions . recurring revenue growth our recurring revenue model and high annual revenue retention rates provide significant visibility into our future operating results and cash flow from operations . this visibility enables us to better manage and invest in our business . recurring revenue , which is comprised of recurring fees and interest income on funds held for clients , increased from $ 72.8 million in fiscal 2013 to $ 101.9 million in fiscal 2014 , representing a 40 % year-over-year increase . recurring revenue increased from $ 101.9 million in fiscal 2014 to $ 144.1 million in fiscal 2015 , representing a 41 % year-over-year increase . recurring revenue represented 94 % of total revenue in each of the fiscal years ended 2013 , 2014 , and 2015. client count growth we believe there is a significant opportunity to grow our business by increasing our number of clients . we have increased our number of clients from approximately 6,850 as of june 30 , 2013 to approximately 10,350 as of june 30 , 2015 , representing a compound annual growth rate of approximately 23 % . the table below sets forth our client count for the periods indicated , rounded to the nearest fifty . replace_table_token_6_th the rate at which we add clients is highly variable period-to-period and highly seasonal as many clients switch solutions during the first calendar quarter of each year . although many clients have multiple divisions , segments or locations , we only count such clients once for these purposes . annual revenue retention rate our annual revenue retention rate has been in excess of 92 % during each of the past three fiscal years . we calculate our annual revenue retention rate as our total revenue for the preceding 12 months , less the annualized value of revenue lost during the preceding 12 months , divided by our total revenue for the preceding 12 months . we calculate the annualized value of revenue lost by summing the recurring fees paid by lost clients over the previous twelve months prior to their termination if they have been a client for a minimum of twelve months . for those lost clients who became clients within the last twelve months , we sum the recurring fees for the period that they have been a client and then annualize the amount . we exclude interest income on funds held for clients from the revenue retention calculation . we believe that our annual revenue retention rate is an important metric to measure overall client satisfaction and the general quality of our product and service offerings . recurring fees from new clients we calculate recurring fees from new clients as the percentage of year-to-date recurring fees from all clients on our solutions which had not been on or used any of our solutions for a full year as of the start of the current fiscal year . we believe recurring fees from new clients is an important metric to measure the expansion of our existing client base as well as the growth in our client base . our recurring fees from new clients for fiscal 2013 and 2014 were 44 % and for fiscal 2015 was 45 % . adjusted gross profit , adjusted recurring gross profit and adjusted ebitda we disclose adjusted gross profit , adjusted recurring gross profit and adjusted ebitda because we use them to evaluate our performance , and we believe adjusted gross profit , adjusted recurring gross profit and adjusted ebitda assist in the comparison of our performance across reporting periods by excluding certain items that we do not believe are indicative of our core operating performance . we believe these metrics are used in the financial community , and we present it to enhance investors ' understanding of our operating performance and cash flows . story_separator_special_tag the increase was also attributable to $ 0.8 million of stock-based compensation associated with our broad based ipo grant to all employees . research and development replace_table_token_14_th research and development for the year ended june 30 , 2015 increased by $ 9.5 million , or 92 % , to $ 19.9 million from $ 10.4 million for the year ended june 30 , 2014. research and development costs increased in fiscal 2015 primarily due to $ 7.5 million of additional employee-related expenses related to 64 additional development personnel and $ 2.2 million of stock-based compensation associated with our equity incentive plan . this was offset by an increase of $ 0.2 million in our capitalized internal-use software costs . research and development for the year ended june 30 , 2014 increased by $ 3.5 million , or 52 % , to $ 10.4 million from $ 6.8 million for the year ended june 30 , 2013. research and development costs increased in fiscal 2014 primarily due to $ 5.1 million of additional employee-related expenses related to 27 additional development personnel , $ 0.6 million of stock-based compensation associated with our broad based ipo grant to all employees and $ 0.5 million related to the one-time founder funded bonus pay-outs . this was offset by an increase of $ 2.7 million in our capitalized internal-use software costs as we developed significant additional functionality in our human capital management applications during the year . general and administrative replace_table_token_15_th general and administrative expenses for the year ended june 30 , 2015 increased by $ 10.8 million , or 49 % , to $ 32.8 million from $ 22.0 million for the year ended june 30 , 2014. general and administrative expenses increased primarily as a result of $ 5.0 million of additional employee-related expenses relating to 30 additional personnel , $ 2.0 million of additional stock-based 39 compensation costs , $ 1.5 million of increased occupancy costs incurred as a result of our requirement for additional office space , $ 0.8 million of amortization expense of the customer relationship and non-compete intangibles associated with acquisitions of both of our resellers , $ 0.7 million of increased insurance costs associated with being a public company , and $ 0.3 million in additional professional fees . general and administrative expenses for the year ended june 30 , 2014 increased by $ 9.9 million , or 82 % , to $ 22.0 million from $ 12.1 million for the year ended june 30 , 2013. general and administrative expenses increased primarily as a result of $ 4.3 million of additional employee-related expenses relating to 18 additional personnel , $ 2.1 million of additional stock-based compensation costs associated with ipo related grants of options and restricted stock units , $ 1.7 million in additional professional fees and $ 0.6 million of increased occupancy costs incurred as a result of our requirement for additional office space . other income ( expense ) replace_table_token_16_th * not meaningful other income ( expense ) for the year ended june 30 , 2015 decreased by $ 0.1 million as compared to the year ended june 30 , 2014. other income for the year ended june 30 , 2015 primarily consists of interest income earned on our cash and cash equivalents partially offset by loss on the disposal of property and equipment . other income ( expense ) for the year ended june 30 , 2014 increased by $ 0.2 million as compared to the year ended june 30 , 2013. other income for the year ended june 30 , 2014 primarily consisted of interest income earned on our cash and cash equivalents , partially offset by interest expense incurred on our note payable and other debt , which was repaid in full in march 2014. income tax ( benefit ) expense replace_table_token_17_th * not meaningful income tax ( benefit ) expense for the year ended june 30 , 2015 decreased by $ 0.2 million , as compared to the year ended june 30 , 2014 primarily due to the recognition of a deferred tax asset valuation allowance during the year ended june 30 , 2014 related to net deferred tax balances generated in prior years . income tax ( benefit ) expense for the year ended june 30 , 2014 increased by $ 0.9 million , as compared to the year ended june 30 , 2013 primarily due to the expiration of federal research and development tax credit allowances resulting in a $ 0.5 million decline in amount claimed and an increase in non-deductible expenses as a result of our growing business . the company also recognized a valuation allowance as of june 30 , 2014 on substantially all of its net deferred tax assets , many of which were generated in the three month period ended june 30 , 2014 , given its determination that it was more likely than not that the company would not recognize the benefits of its net operating loss carryforwards prior to their expiration . see note 11 of the notes to consolidated financial statements included in part ii , item 8 : “financial statements and supplementary data” of this annual report on form 10-k for further details on the valuation allowance and a reconciliation of the u.s. federal statutory rate to the effective tax rate . critical accounting policies and significant judgments and estimates in preparing our financial statements and accounting for the underlying transactions and balances in accordance with gaap , we apply various accounting policies that require our management to make estimates , judgments and assumptions that affect the amounts reported in our financial statements . we consider the policies discussed below as critical to understanding our financial statements , as their application places the most significant demands on management 's judgment . management bases its estimates , judgments and assumptions on historical experience , current economic and industry conditions and on various other factors deemed to be reasonable under the circumstances , ``` Narrative : cash flows the following table sets forth data regarding cash flows for the periods indicated : replace_table_token_20_th operating activities net cash provided by operating activities was $ 6.2 million , $ 7.2 million and $ 11.1 million for the years ended june 30 , 2013 , 2014 and 2015 , respectively . the increase in net cash provided by operating activities from fiscal 2014 to fiscal 2015 was primarily due to improved operating results after adjusting for non-cash items including stock-based compensation and depreciation and amortization . the increase in net cash provided by operating activities from fiscal 2013 to fiscal 2014 was the primarily the result of the change of $ 2.3 million in operating assets and liabilities partially offset by the increase in net loss and increases in non-cash items including stock-based compensation and depreciation and amortization . investing activities net cash used in investing activities was $ 98.6 million , $ 78.8 million and $ 199.2 million , for the years ended june 30 , 2013 , 2014 and 2015 , respectively . changes in net cash used in investing activities are significantly influenced by the amount of funds held for clients at the end of a reporting period . changes in the amount of funds held for client from period to period will vary substantially . our payroll processing activities involves the movement of significant funds from the account of an employer to employees and relevant taxing authorities . during the year ended june 30 , 2015 we processed almost $ 54 billion in payroll transactions .

we charge customers for our consulting services on a time-and-materials basis and we recognize that revenue as services are performed . we typically invoice customers annually in advance for annual and multi-year subscriptions and invoice in advance or on a time-and-materials basis for professional services . we record amounts invoiced for portions of annual subscription periods that have not occurred or services that have not been performed as deferred revenue on our consolidated balance sheet . we sell our solutions primarily through our direct sales force , which leverages our relationships with technology vendors , professional services firms and business process outsourcers . in particular , our solution integrates with sap 's erp solutions . in the fourth quarter of 2018 , sap became part of the reseller channel that we use in the ordinary course of business . sap has the ability to resell our solutions , as an sap solution-extension ( “ solex ” ) , for which we receive a percentage of the revenues . our ability to maximize the lifetime value of our customer relationships will depend , in part , on the willingness of customers to purchase additional user licenses and products from us . we rely on our sales and customer 39 success teams to support and grow our existing customers by maintaining high customer satisfaction and educating customers on the value all our products provide . the length of our sales cycle depends on the size of a potential customer and contract , as well as the type of solution or product being purchased . the sales cycle for our global enterprise customers is generally longer than that of our mid-market customers . in addition , the length of the sales cycle tends to increase for larger contracts and for more complex , strategic products like intercompany hub . as we continue to focus on increasing our average contract size and selling more strategic products , we expect our sales cycle to lengthen and become less predictable , which could cause variability in our results for any particular period . we have historically signed a high percentage of agreements with new customers , as well as renewal agreements with existing customers , in the fourth quarter of each year and usually during the last month of the quarter . this can be attributed to buying patterns typical in the software industry . as the terms of most of our customer agreements are measured in full year increments , agreements initially entered into during the fourth quarter or last month of any quarter will generally come up for renewal at that same time in subsequent years . this seasonality is reflected in our revenues , though the impact to overall annual or quarterly revenues is minimal due to the fact that we recognize subscription revenue ratably over the term of the customer contract . for the years ended december 31 , 2020 , 2019 , and 2018 , we had revenues totaling $ 351.7 million , $ 289.0 million , and $ 227.8 million , respectively , and we incurred net losses attributable to blackline , inc. of $ 46.9 million , $ 32.5 million , and $ 28.7 million , respectively . covid-19 update in december 2019 , the emergence of a novel coronavirus , or covid-19 , was reported and in march 2020 , the world health organization , or who , characterized covid-19 as a pandemic . we responded to the pandemic by creating an executive task force to monitor the covid-19 situation daily , immediately restricted non-essential travel and enabled work-from-home protocols . shortly thereafter , and in line with guidance provided by government agencies and international organizations , we restricted all travel , mandated a work-from-home policy across our global workforce , and moved all in-person customer-facing events to virtual ones . we expect these restrictions to stay in effect during the first half of 2021. we also responded with covid-19 customer-relief programs to help our community of global accounting and finance professionals in these challenging times . we have offered free access to our entire training library . we also offered the task management and reporting modules complimentary for six months to existing customers to enable a more effective remote close . in addition , we announced complimentary coaching sessions with our existing customers . we have been recognized by the stevie international business awards and the ceo world awards for our commitment to helping ensure business continuity and fostering well-being for both customers and employees in response to , and throughout the covid-19 pandemic . we have continued to see purchasing decisions being deferred due to covid-19 and a reduction on new business pipeline and large deals . moreover , we have experienced and expect to continue to experience delays in deals in emea and north america mid-market , as well as large digital transformation deals . we further expect delays in deals arising out of our sap partnership , all which will impact our customers and prospects , and our financial results for fiscal 2021. we have also seen a decrease in travel-related expenses and advertising and trade show expenses . the broader implications of the global emergence of covid-19 on our business , operating results , and overall financial performance remain uncertain and depend on certain developments , including the duration and spread of the outbreak , impact on our customers and our sales cycles , impact on our partners and employees , and impact on the economic environment and financial markets , all of which are uncertain and can not be predicted . we are conducting business as usual with certain limitations to employee travel , employee work locations , and marketing events , among other modifications . we have observed other companies taking precautionary and preemptive actions to address covid-19 , and the effects it has had and is expected to have on business and the economy . story_separator_special_tag 46 research and development replace_table_token_10_th the increase in research and development expenses for the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was primarily due to a $ 14.9 million increase in salaries , benefits , and stock-based compensation ; a $ 2.7 million increase in computer software expenses ; and a $ 1.8 million increase in professional services expense . these increases were partially offset by a $ 5.6 million increase in capitalized software costs , which resulted in a decrease in net expenses , and a $ 0.6 million decrease in travel-related costs . the increase in salaries , benefits , and stock-based compensation was primarily driven by a 33 % increase in average headcount from the year ended december 31 , 2019 to the year ended december 31 , 2020. the increase in computer software expenses was primarily driven by our migration to the public cloud and the purchase of additional software licenses driven by an increase in average research and development headcount . the increase in professional services expense was primarily driven by external consultant fees as part of our investment in products , features , and functionality buildouts . capitalized software costs increased due to significant new enhancement initiatives related to the functionality of our solutions . travel-related expenses decreased primarily as a result of covid-19 travel restrictions . general and administrative replace_table_token_11_th the increase in general and administrative expenses for the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was primarily due to an $ 8.8 million increase in salaries , benefits , and stock-based compensation ; $ 4.7 million of transaction-related costs ; and a $ 2.2 million increase in professional services expense . these increases were partially offset by a $ 0.8 million decrease in travel-related expenses . the increase in salaries , benefits , and stock-based compensation was primarily driven by an 18 % increase in average headcount from the year ended december 31 , 2019 to the year ended december 31 , 2020. transaction-related costs in the period related to the rimilia acquisition , which closed in october 2020. travel-related expenses decreased primarily as a result of covid-19 travel restrictions . interest income year ended december 31 , change 2020 2019 $ % ( in thousands , except percentages ) interest income $ 4,502 $ 6,128 $ ( 1,626 ) ( 27 ) % the decrease in interest income during the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was primarily due to a decrease in average interest rates , partially offset by interest earned on higher cash balances in the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 . 47 interest expense year ended december 31 , change 2020 2019 $ % ( in thousands , except percentages ) interest expense $ 23,311 $ 8,650 $ 14,661 169 % the increase in interest expense during the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was primarily due to increased amortization of the debt discount on the notes . the notes were issued in the third quarter of 2019 and , as such , there was less amortization in 2019 as compared to a full year in 2020. the increase was also , to a lesser extent , related to increased interest accrued during the period on the outstanding balance on the notes in the year ended december 31 , 2020 , compared to the year ended december 31 , 2019. provision for income taxes replace_table_token_12_th we are subject to federal and state income taxes in the united states and taxes in foreign jurisdictions . for the year ended december 31 , 2020 , our annual estimated effective tax rate differed from the u.s. federal statutory rate of 21 % primarily as a result of state taxes , foreign taxes , and changes in our valuation allowance for domestic income taxes . for the years ended december 31 , 2020 and 2019 , we recorded $ 0.7 million and $ 1.7 million in income tax expense , respectively . the decrease in income tax expense for the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was attributable to 2020 tax benefits associated with our international operations . for the year ended december 31 , 2020 , we continued to maintain a full valuation allowance on our u.s. federal and state net deferred tax assets as it was more likely than not that those deferred tax assets will not be realized . liquidity and capital resources at december 31 , 2020 , our principal sources of liquidity were an aggregate of $ 542.6 million of cash and cash equivalents and marketable securities , which primarily consist of short-term , investment-grade u.s. treasury securities , corporate bonds , and commercial paper . in october 2020 , we completed the acquisition of rimilia and paid $ 121.4 million . we had $ 500.0 million aggregate principal amount of notes outstanding at december 31 , 2020. during the quarter ended december 31 , 2020 , the stock price condition allowing holders of the notes to convert was met . as a result , holders have the option to convert their notes at any time during the calendar quarter ending march 31 , 2021. we have the ability to settle the notes in cash , shares of our common stock , or a combination of cash and shares of our common stock at our election . from january 1 , 2021 , through the date of this filing , we have not received any conversion requests for our notes . it is our current intent to settle any such conversions through combination settlement , which involves repayment of the principal portion in

net cash provided by operating activities our net loss and cash flows from operating activities are significantly influenced by our investments in headcount and infrastructure to support anticipated growth . in recent periods , our net loss has generally been significantly greater than our use of cash for operating activities due to our subscription-based revenue model in which billings occur in advance of revenue recognition , as well as the substantial amount of non-cash charges which we incur . non-cash charges primarily include depreciation and amortization , stock-based compensation , non-cash lease expense , amortization of debt discount and issuance costs , and deferred taxes . for the year ended december 31 , 2020 , cash provided by operations was $ 54.7 million , resulting from net non-cash expenses of $ 97.5 million , partially offset by our net loss of $ 39.4 million and net cash flow used as a result of changes in operating assets and liabilities of $ 3.4 million . the $ 3.4 million of net cash flows used as a result of changes in our operating assets and liabilities reflected the following : a $ 12.4 million increase in other assets ; a $ 5.7 million increase in accounts receivable ; a $ 5.3 million increase in prepaid expenses and other current assets ; a $ 5.0 million decrease in operating lease liabilities ; and a $ 4.4 million decrease in accounts payable . these changes in our operating assets and liabilities were partially offset by the following : a $ 26.4 million increase in deferred revenue as a result of the growth of our customer and user bases ; and a $ 3.1 million increase in accrued expenses and other current liabilities . for the year ended december 31 , 2019 , cash provided by operations was $ 29.7 million , resulting from net non-cash expenses of $ 68.2 million , partially offset by our net loss of $ 32.1 million and net cash flow used as a result of changes in operating assets and liabilities of $ 6.3 million .

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text. ```we charge customers for our consulting services on a time-and-materials basis and we recognize that revenue as services are performed . we typically invoice customers annually in advance for annual and multi-year subscriptions and invoice in advance or on a time-and-materials basis for professional services . we record amounts invoiced for portions of annual subscription periods that have not occurred or services that have not been performed as deferred revenue on our consolidated balance sheet . we sell our solutions primarily through our direct sales force , which leverages our relationships with technology vendors , professional services firms and business process outsourcers . in particular , our solution integrates with sap 's erp solutions . in the fourth quarter of 2018 , sap became part of the reseller channel that we use in the ordinary course of business . sap has the ability to resell our solutions , as an sap solution-extension ( “ solex ” ) , for which we receive a percentage of the revenues . our ability to maximize the lifetime value of our customer relationships will depend , in part , on the willingness of customers to purchase additional user licenses and products from us . we rely on our sales and customer 39 success teams to support and grow our existing customers by maintaining high customer satisfaction and educating customers on the value all our products provide . the length of our sales cycle depends on the size of a potential customer and contract , as well as the type of solution or product being purchased . the sales cycle for our global enterprise customers is generally longer than that of our mid-market customers . in addition , the length of the sales cycle tends to increase for larger contracts and for more complex , strategic products like intercompany hub . as we continue to focus on increasing our average contract size and selling more strategic products , we expect our sales cycle to lengthen and become less predictable , which could cause variability in our results for any particular period . we have historically signed a high percentage of agreements with new customers , as well as renewal agreements with existing customers , in the fourth quarter of each year and usually during the last month of the quarter . this can be attributed to buying patterns typical in the software industry . as the terms of most of our customer agreements are measured in full year increments , agreements initially entered into during the fourth quarter or last month of any quarter will generally come up for renewal at that same time in subsequent years . this seasonality is reflected in our revenues , though the impact to overall annual or quarterly revenues is minimal due to the fact that we recognize subscription revenue ratably over the term of the customer contract . for the years ended december 31 , 2020 , 2019 , and 2018 , we had revenues totaling $ 351.7 million , $ 289.0 million , and $ 227.8 million , respectively , and we incurred net losses attributable to blackline , inc. of $ 46.9 million , $ 32.5 million , and $ 28.7 million , respectively . covid-19 update in december 2019 , the emergence of a novel coronavirus , or covid-19 , was reported and in march 2020 , the world health organization , or who , characterized covid-19 as a pandemic . we responded to the pandemic by creating an executive task force to monitor the covid-19 situation daily , immediately restricted non-essential travel and enabled work-from-home protocols . shortly thereafter , and in line with guidance provided by government agencies and international organizations , we restricted all travel , mandated a work-from-home policy across our global workforce , and moved all in-person customer-facing events to virtual ones . we expect these restrictions to stay in effect during the first half of 2021. we also responded with covid-19 customer-relief programs to help our community of global accounting and finance professionals in these challenging times . we have offered free access to our entire training library . we also offered the task management and reporting modules complimentary for six months to existing customers to enable a more effective remote close . in addition , we announced complimentary coaching sessions with our existing customers . we have been recognized by the stevie international business awards and the ceo world awards for our commitment to helping ensure business continuity and fostering well-being for both customers and employees in response to , and throughout the covid-19 pandemic . we have continued to see purchasing decisions being deferred due to covid-19 and a reduction on new business pipeline and large deals . moreover , we have experienced and expect to continue to experience delays in deals in emea and north america mid-market , as well as large digital transformation deals . we further expect delays in deals arising out of our sap partnership , all which will impact our customers and prospects , and our financial results for fiscal 2021. we have also seen a decrease in travel-related expenses and advertising and trade show expenses . the broader implications of the global emergence of covid-19 on our business , operating results , and overall financial performance remain uncertain and depend on certain developments , including the duration and spread of the outbreak , impact on our customers and our sales cycles , impact on our partners and employees , and impact on the economic environment and financial markets , all of which are uncertain and can not be predicted . we are conducting business as usual with certain limitations to employee travel , employee work locations , and marketing events , among other modifications . we have observed other companies taking precautionary and preemptive actions to address covid-19 , and the effects it has had and is expected to have on business and the economy . story_separator_special_tag 46 research and development replace_table_token_10_th the increase in research and development expenses for the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was primarily due to a $ 14.9 million increase in salaries , benefits , and stock-based compensation ; a $ 2.7 million increase in computer software expenses ; and a $ 1.8 million increase in professional services expense . these increases were partially offset by a $ 5.6 million increase in capitalized software costs , which resulted in a decrease in net expenses , and a $ 0.6 million decrease in travel-related costs . the increase in salaries , benefits , and stock-based compensation was primarily driven by a 33 % increase in average headcount from the year ended december 31 , 2019 to the year ended december 31 , 2020. the increase in computer software expenses was primarily driven by our migration to the public cloud and the purchase of additional software licenses driven by an increase in average research and development headcount . the increase in professional services expense was primarily driven by external consultant fees as part of our investment in products , features , and functionality buildouts . capitalized software costs increased due to significant new enhancement initiatives related to the functionality of our solutions . travel-related expenses decreased primarily as a result of covid-19 travel restrictions . general and administrative replace_table_token_11_th the increase in general and administrative expenses for the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was primarily due to an $ 8.8 million increase in salaries , benefits , and stock-based compensation ; $ 4.7 million of transaction-related costs ; and a $ 2.2 million increase in professional services expense . these increases were partially offset by a $ 0.8 million decrease in travel-related expenses . the increase in salaries , benefits , and stock-based compensation was primarily driven by an 18 % increase in average headcount from the year ended december 31 , 2019 to the year ended december 31 , 2020. transaction-related costs in the period related to the rimilia acquisition , which closed in october 2020. travel-related expenses decreased primarily as a result of covid-19 travel restrictions . interest income year ended december 31 , change 2020 2019 $ % ( in thousands , except percentages ) interest income $ 4,502 $ 6,128 $ ( 1,626 ) ( 27 ) % the decrease in interest income during the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was primarily due to a decrease in average interest rates , partially offset by interest earned on higher cash balances in the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 . 47 interest expense year ended december 31 , change 2020 2019 $ % ( in thousands , except percentages ) interest expense $ 23,311 $ 8,650 $ 14,661 169 % the increase in interest expense during the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was primarily due to increased amortization of the debt discount on the notes . the notes were issued in the third quarter of 2019 and , as such , there was less amortization in 2019 as compared to a full year in 2020. the increase was also , to a lesser extent , related to increased interest accrued during the period on the outstanding balance on the notes in the year ended december 31 , 2020 , compared to the year ended december 31 , 2019. provision for income taxes replace_table_token_12_th we are subject to federal and state income taxes in the united states and taxes in foreign jurisdictions . for the year ended december 31 , 2020 , our annual estimated effective tax rate differed from the u.s. federal statutory rate of 21 % primarily as a result of state taxes , foreign taxes , and changes in our valuation allowance for domestic income taxes . for the years ended december 31 , 2020 and 2019 , we recorded $ 0.7 million and $ 1.7 million in income tax expense , respectively . the decrease in income tax expense for the year ended december 31 , 2020 , compared to the year ended december 31 , 2019 , was attributable to 2020 tax benefits associated with our international operations . for the year ended december 31 , 2020 , we continued to maintain a full valuation allowance on our u.s. federal and state net deferred tax assets as it was more likely than not that those deferred tax assets will not be realized . liquidity and capital resources at december 31 , 2020 , our principal sources of liquidity were an aggregate of $ 542.6 million of cash and cash equivalents and marketable securities , which primarily consist of short-term , investment-grade u.s. treasury securities , corporate bonds , and commercial paper . in october 2020 , we completed the acquisition of rimilia and paid $ 121.4 million . we had $ 500.0 million aggregate principal amount of notes outstanding at december 31 , 2020. during the quarter ended december 31 , 2020 , the stock price condition allowing holders of the notes to convert was met . as a result , holders have the option to convert their notes at any time during the calendar quarter ending march 31 , 2021. we have the ability to settle the notes in cash , shares of our common stock , or a combination of cash and shares of our common stock at our election . from january 1 , 2021 , through the date of this filing , we have not received any conversion requests for our notes . it is our current intent to settle any such conversions through combination settlement , which involves repayment of the principal portion in ``` Narrative : net cash provided by operating activities our net loss and cash flows from operating activities are significantly influenced by our investments in headcount and infrastructure to support anticipated growth . in recent periods , our net loss has generally been significantly greater than our use of cash for operating activities due to our subscription-based revenue model in which billings occur in advance of revenue recognition , as well as the substantial amount of non-cash charges which we incur . non-cash charges primarily include depreciation and amortization , stock-based compensation , non-cash lease expense , amortization of debt discount and issuance costs , and deferred taxes . for the year ended december 31 , 2020 , cash provided by operations was $ 54.7 million , resulting from net non-cash expenses of $ 97.5 million , partially offset by our net loss of $ 39.4 million and net cash flow used as a result of changes in operating assets and liabilities of $ 3.4 million . the $ 3.4 million of net cash flows used as a result of changes in our operating assets and liabilities reflected the following : a $ 12.4 million increase in other assets ; a $ 5.7 million increase in accounts receivable ; a $ 5.3 million increase in prepaid expenses and other current assets ; a $ 5.0 million decrease in operating lease liabilities ; and a $ 4.4 million decrease in accounts payable . these changes in our operating assets and liabilities were partially offset by the following : a $ 26.4 million increase in deferred revenue as a result of the growth of our customer and user bases ; and a $ 3.1 million increase in accrued expenses and other current liabilities . for the year ended december 31 , 2019 , cash provided by operations was $ 29.7 million , resulting from net non-cash expenses of $ 68.2 million , partially offset by our net loss of $ 32.1 million and net cash flow used as a result of changes in operating assets and liabilities of $ 6.3 million .

new risk factors emerge from time to time and it is not possible for management to predict all such risk factors , nor can we assess the impact of all such risk factors on our business or the extent to which any factor , or combination of factors , may cause actual results to differ materially from those contained in any forward-looking statements . given these risks and uncertainties , investors should not place undue reliance on forward-looking statements as a prediction of actual results . investors should also refer to our quarterly reports on form 10-q for future periods and current reports on form 8-k as we file them with the sec , and to other materials we may furnish to the public from time to time through forms 8-k or otherwise . overview we are an externally advised and managed real estate investment company that owns a diverse portfolio of income-producing properties and land held for development . the company 's portfolio of income-producing properties includes residential apartment communities , office buildings and other commercial properties . our investment strategy includes acquiring existing income-producing properties as well as developing new properties on land already owned or acquired for a specific development project . we acquire land primarily in in-fill locations or high-growth suburban markets . we are an active buyer and seller of real estate and during 2015 we acquired $ 130 million and sold $ 118 million of land and income-producing properties . as of december 31 , 2015 , we owned 7,983 units in 48 residential apartment communities , eight commercial properties comprising approximately 1.9 million rentable square feet , and a golf course . in addition , we own 3,665 acres of land held for development . the company currently owns income-producing properties and land in ten states as well as in the u.s. virgin islands . 20 we finance our acquisitions primarily through operating cash flow , proceeds from the sale of land and income-producing properties and debt financing primarily in the form of property-specific first-lien mortgage loans from commercial banks and institutional lenders . we finance our development projects principally with short-term , variable interest rate construction loans that are converted to long-term , fixed rate amortizing mortgages when the development project is completed and occupancy has been stabilized . the company will , from time to time , also enter into partnerships with various investors to acquire income-producing properties or land and to sell interests in certain of its wholly-owned properties . when the company sells assets , it may carry a portion of the sales price generally in the form of a short-term , interest bearing seller-financed note receivable . the company generates operating revenues primarily by leasing apartment units to residents and leasing office , retail and industrial space to commercial tenants . the company has historically engaged in and may continue to engage in certain business transactions with related parties , including but not limited to asset acquisition and dispositions . transactions involving related parties can not be presumed to be carried out on an arm 's length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities . related party transactions may not always be favorable to our business and may include terms , conditions and agreements that are not necessarily beneficial to or in our best interest . since april 30 , 2011 , pillar is the company 's external advisor and cash manager under a contractual arrangement that is reviewed annually by our board of directors . pillar 's duties include , but are not limited to , locating , evaluating and recommending real estate and real estate-related investment opportunities . pillar also arranges , for tci 's benefit , debt and equity financing with third party lenders and investors . pillar also serves as an advisor and cash manager to arl and iot . as the contractual advisor , pillar is compensated by tci under an advisory agreement that is more fully described in part iii , item 10 . “ directors , executive officers and corporate governance – the advisor ” . tci has no employees . employees of pillar render services to tci in accordance with the terms of the advisory agreement . effective since january 1 , 2011 , regis manages our commercial properties and provides brokerage services . regis is entitled to receive a fee for its property management and brokerage services . see part iii , item 10 . “ directors , executive officers and corporate governance – property management and real estate brokerage ” . the company contracts with third-party companies to lease and manage our apartment communities . critical accounting policies we present our financial statements in accordance with generally accepted accounting principles in the united states ( “ gaap ” ) . the accompanying consolidated financial statements include our accounts , our subsidiaries , generally all of which are wholly-owned , and all entities in which we have a controlling interest . arrangements that are not controlled through voting or similar rights are accounted for as a variable interest entity ( vie ) , in accordance with the provisions and guidance of asc topic 810 “ consolidation ” , whereby we have determined that we are a primary beneficiary of the vie and meet certain criteria of a sole general partner or managing member as identified in accordance with emerging issues task force ( “ eitf ” ) issue 04-5 , investor 's accounting for an investment in a limited partnership when the investor is the sole general partner and the limited partners have certain rights ( “ eitf 04-5 ” ) . story_separator_special_tag the acquired property portfolio consists of properties that we acquired but have not held for the entire period for both periods being compared . developed properties in the lease-up phase consist of completed projects that are being leased-up . as we complete each phase of the project , we lease-up that phase and include those revenues in our continued operations . once a developed property becomes leased-up ( 80 % or more ) and is held the entire period for both years under comparison , it is considered to be included in the same property portfolio . income-producing properties that we have sold during the year are reclassified to discontinued operations for all periods presented . the other segment consists of revenue and operating expenses related to the notes receivable and corporate entities . the following discussion is based on our consolidated statements of operations for the twelve months ended december 31 , 2015 , 2014 , and 2013 as included in item 8 . “ financial statements and supplementary data ” . the prior year 's property portfolios have been adjusted for subsequent sales . continuing operations relates to income-producing properties that were held during those years as adjusted for sales in the subsequent years . 24 at december 31 , 2015 , 2014 and 2013 , we owned or had interests in a portfolio of 57 , 45 and 45 income-producing properties , respectively . the total property portfolio represents all income-producing properties held as of december 31 for the year presented . sales subsequent to year end represent properties that were held as of year-end for the years presented , but sold in subsequent years . continued operations represents all properties that have not been reclassed to discontinued operations as of december 31 , 2015 for the year presented . the table below shows the number of income-producing properties held by year : replace_table_token_10_th comparison of the year ended december 31 , 2015 to the same year ended 2014 : for the twelve months ended december 31 , 2015 , we reported net loss applicable to common shares of ( $ 8.5 ) million or ( $ 0.98 ) per diluted earnings per share , as compared to a net income applicable to common shares of $ 40.6 million or $ 4.74 per diluted earnings per share for the same year ended 2014. the current year net loss applicable to common shares of ( $ 8.5 ) million includes gain on land sales of $ 18.9 million and net income from discontinued operations of $ .9 million , as compared to the prior year net income applicable to common shares of $ 40.6 million which includes gain on land sales of $ 0.6 million and net income from discontinued operations of $ 37.9 million . revenues rental and other property revenues were $ 102.2 million for the twelve months ended december 31 , 2015. this represents an increase of $ 26.3 million , as compared to the prior year revenues of $ 75.9 million . this increase in revenues is mainly due to the addition of several properties to the apartment portfolio and the commercial portfolio . the change by segment is reflected in an increase in the apartment portfolio of $ 16.1 million and an increase in the commercial portfolio of $ 10.2 million . our apartment portfolio continues to excel in the current economic conditions with occupancies averaging over 94 % and increasing rental rates . we have been able to surpass expectations due to the high-quality product offered , strength of our management team and our commitment to our tenants . the increase in the commercial segment is due to a high rise in the occupancy rate of the commercial complexes , in 2015 the average occupancy rate was over 86 % . our commercial portfolio is performing significantly better than in previous periods and we anticipate that it will continue to improve as the company has been successful in attracting high-quality tenants and expects to continue to see the benefits of those new leases in the future . we continue to work aggressively to attract new tenants and strive for continuous improvement of our properties in order to maintain our existing tenants . expenses property operating expenses were $ 52.3 million for the twelve months ended december 31 , 2015 . this represents an increase of $ 12.9 million , as compared to the prior year operating expenses of $ 39.4 million . this change , by segment , is an increase in the apartment portfolio of $ 8.3 million and an increase in the commercial portfolio of $ 4.6 million . within the apartment portfolio there was an increase of $ 5.9 million in the acquired properties portfolio and an increase of $ 2.4 million in the same property portfolio . within the commercial portfolio there was an increase of $ 3.6 million in the acquired properties portfolio and an increase of $ 1.0 million in the same store properties . the increase in the apartment portfolio was due to the acquisition of new properties throughout the year . the increase in the commercial portfolio was due to an acquisition of a property within the year and an increase in real estate taxes . depreciation and amortization expenses were $ 21.3 million for the twelve months ended december 31 , 2015. this represents an increase of $ 3.9 million as compared to prior year depreciation of $ 17.4 million . within the apartment and commercial portfolios , the majority of this change is due to the acquisition of new properties and an increase in tenant improvements and repairs projects . general and administrative expenses were $ 5.5 million dollars for the twelve months ended december 31 , 2015. this represents a decrease of $ 1.7 million , as compared to the prior year general and administrative expenses of $ 7.2 million . this change is mainly due to a decrease in the

cash flow summary the following summary discussion of our cash flows is based on the consolidated statements of cash flows in part ii , item 8 . “ consolidated financial statements and supplementary data ” and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below ( dollars in thousands ) : replace_table_token_13_th the primary use of cash for operations is daily operating costs , general and administrative expenses , advisory fees , and land holding costs . our primary source of cash from operating activities is from rental income on properties . our primary cash outlays for investing activities are for construction and development , acquisition of land and income-producing properties , and capital improvements to existing properties . our primary sources of cash from investing activities are from the proceeds on the sale of land and income-producing properties . we received more proceeds from land sales in the current period than in the prior period . in addition , we acquired 12 residential properties and one commercial property . our primary sources of cash from financing activities are from proceeds on notes payables . our primary cash outlays are for recurring debt payments and payments on maturing notes payable . the proceeds from new financings in the current period allowed us to pay down more debt , as compared to the prior period .

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.

Write a concise summary of the following text delimited by triple backquotes. Return your response as a narrative which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text. ```new risk factors emerge from time to time and it is not possible for management to predict all such risk factors , nor can we assess the impact of all such risk factors on our business or the extent to which any factor , or combination of factors , may cause actual results to differ materially from those contained in any forward-looking statements . given these risks and uncertainties , investors should not place undue reliance on forward-looking statements as a prediction of actual results . investors should also refer to our quarterly reports on form 10-q for future periods and current reports on form 8-k as we file them with the sec , and to other materials we may furnish to the public from time to time through forms 8-k or otherwise . overview we are an externally advised and managed real estate investment company that owns a diverse portfolio of income-producing properties and land held for development . the company 's portfolio of income-producing properties includes residential apartment communities , office buildings and other commercial properties . our investment strategy includes acquiring existing income-producing properties as well as developing new properties on land already owned or acquired for a specific development project . we acquire land primarily in in-fill locations or high-growth suburban markets . we are an active buyer and seller of real estate and during 2015 we acquired $ 130 million and sold $ 118 million of land and income-producing properties . as of december 31 , 2015 , we owned 7,983 units in 48 residential apartment communities , eight commercial properties comprising approximately 1.9 million rentable square feet , and a golf course . in addition , we own 3,665 acres of land held for development . the company currently owns income-producing properties and land in ten states as well as in the u.s. virgin islands . 20 we finance our acquisitions primarily through operating cash flow , proceeds from the sale of land and income-producing properties and debt financing primarily in the form of property-specific first-lien mortgage loans from commercial banks and institutional lenders . we finance our development projects principally with short-term , variable interest rate construction loans that are converted to long-term , fixed rate amortizing mortgages when the development project is completed and occupancy has been stabilized . the company will , from time to time , also enter into partnerships with various investors to acquire income-producing properties or land and to sell interests in certain of its wholly-owned properties . when the company sells assets , it may carry a portion of the sales price generally in the form of a short-term , interest bearing seller-financed note receivable . the company generates operating revenues primarily by leasing apartment units to residents and leasing office , retail and industrial space to commercial tenants . the company has historically engaged in and may continue to engage in certain business transactions with related parties , including but not limited to asset acquisition and dispositions . transactions involving related parties can not be presumed to be carried out on an arm 's length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities . related party transactions may not always be favorable to our business and may include terms , conditions and agreements that are not necessarily beneficial to or in our best interest . since april 30 , 2011 , pillar is the company 's external advisor and cash manager under a contractual arrangement that is reviewed annually by our board of directors . pillar 's duties include , but are not limited to , locating , evaluating and recommending real estate and real estate-related investment opportunities . pillar also arranges , for tci 's benefit , debt and equity financing with third party lenders and investors . pillar also serves as an advisor and cash manager to arl and iot . as the contractual advisor , pillar is compensated by tci under an advisory agreement that is more fully described in part iii , item 10 . “ directors , executive officers and corporate governance – the advisor ” . tci has no employees . employees of pillar render services to tci in accordance with the terms of the advisory agreement . effective since january 1 , 2011 , regis manages our commercial properties and provides brokerage services . regis is entitled to receive a fee for its property management and brokerage services . see part iii , item 10 . “ directors , executive officers and corporate governance – property management and real estate brokerage ” . the company contracts with third-party companies to lease and manage our apartment communities . critical accounting policies we present our financial statements in accordance with generally accepted accounting principles in the united states ( “ gaap ” ) . the accompanying consolidated financial statements include our accounts , our subsidiaries , generally all of which are wholly-owned , and all entities in which we have a controlling interest . arrangements that are not controlled through voting or similar rights are accounted for as a variable interest entity ( vie ) , in accordance with the provisions and guidance of asc topic 810 “ consolidation ” , whereby we have determined that we are a primary beneficiary of the vie and meet certain criteria of a sole general partner or managing member as identified in accordance with emerging issues task force ( “ eitf ” ) issue 04-5 , investor 's accounting for an investment in a limited partnership when the investor is the sole general partner and the limited partners have certain rights ( “ eitf 04-5 ” ) . story_separator_special_tag the acquired property portfolio consists of properties that we acquired but have not held for the entire period for both periods being compared . developed properties in the lease-up phase consist of completed projects that are being leased-up . as we complete each phase of the project , we lease-up that phase and include those revenues in our continued operations . once a developed property becomes leased-up ( 80 % or more ) and is held the entire period for both years under comparison , it is considered to be included in the same property portfolio . income-producing properties that we have sold during the year are reclassified to discontinued operations for all periods presented . the other segment consists of revenue and operating expenses related to the notes receivable and corporate entities . the following discussion is based on our consolidated statements of operations for the twelve months ended december 31 , 2015 , 2014 , and 2013 as included in item 8 . “ financial statements and supplementary data ” . the prior year 's property portfolios have been adjusted for subsequent sales . continuing operations relates to income-producing properties that were held during those years as adjusted for sales in the subsequent years . 24 at december 31 , 2015 , 2014 and 2013 , we owned or had interests in a portfolio of 57 , 45 and 45 income-producing properties , respectively . the total property portfolio represents all income-producing properties held as of december 31 for the year presented . sales subsequent to year end represent properties that were held as of year-end for the years presented , but sold in subsequent years . continued operations represents all properties that have not been reclassed to discontinued operations as of december 31 , 2015 for the year presented . the table below shows the number of income-producing properties held by year : replace_table_token_10_th comparison of the year ended december 31 , 2015 to the same year ended 2014 : for the twelve months ended december 31 , 2015 , we reported net loss applicable to common shares of ( $ 8.5 ) million or ( $ 0.98 ) per diluted earnings per share , as compared to a net income applicable to common shares of $ 40.6 million or $ 4.74 per diluted earnings per share for the same year ended 2014. the current year net loss applicable to common shares of ( $ 8.5 ) million includes gain on land sales of $ 18.9 million and net income from discontinued operations of $ .9 million , as compared to the prior year net income applicable to common shares of $ 40.6 million which includes gain on land sales of $ 0.6 million and net income from discontinued operations of $ 37.9 million . revenues rental and other property revenues were $ 102.2 million for the twelve months ended december 31 , 2015. this represents an increase of $ 26.3 million , as compared to the prior year revenues of $ 75.9 million . this increase in revenues is mainly due to the addition of several properties to the apartment portfolio and the commercial portfolio . the change by segment is reflected in an increase in the apartment portfolio of $ 16.1 million and an increase in the commercial portfolio of $ 10.2 million . our apartment portfolio continues to excel in the current economic conditions with occupancies averaging over 94 % and increasing rental rates . we have been able to surpass expectations due to the high-quality product offered , strength of our management team and our commitment to our tenants . the increase in the commercial segment is due to a high rise in the occupancy rate of the commercial complexes , in 2015 the average occupancy rate was over 86 % . our commercial portfolio is performing significantly better than in previous periods and we anticipate that it will continue to improve as the company has been successful in attracting high-quality tenants and expects to continue to see the benefits of those new leases in the future . we continue to work aggressively to attract new tenants and strive for continuous improvement of our properties in order to maintain our existing tenants . expenses property operating expenses were $ 52.3 million for the twelve months ended december 31 , 2015 . this represents an increase of $ 12.9 million , as compared to the prior year operating expenses of $ 39.4 million . this change , by segment , is an increase in the apartment portfolio of $ 8.3 million and an increase in the commercial portfolio of $ 4.6 million . within the apartment portfolio there was an increase of $ 5.9 million in the acquired properties portfolio and an increase of $ 2.4 million in the same property portfolio . within the commercial portfolio there was an increase of $ 3.6 million in the acquired properties portfolio and an increase of $ 1.0 million in the same store properties . the increase in the apartment portfolio was due to the acquisition of new properties throughout the year . the increase in the commercial portfolio was due to an acquisition of a property within the year and an increase in real estate taxes . depreciation and amortization expenses were $ 21.3 million for the twelve months ended december 31 , 2015. this represents an increase of $ 3.9 million as compared to prior year depreciation of $ 17.4 million . within the apartment and commercial portfolios , the majority of this change is due to the acquisition of new properties and an increase in tenant improvements and repairs projects . general and administrative expenses were $ 5.5 million dollars for the twelve months ended december 31 , 2015. this represents a decrease of $ 1.7 million , as compared to the prior year general and administrative expenses of $ 7.2 million . this change is mainly due to a decrease in the ``` Narrative : cash flow summary the following summary discussion of our cash flows is based on the consolidated statements of cash flows in part ii , item 8 . “ consolidated financial statements and supplementary data ” and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below ( dollars in thousands ) : replace_table_token_13_th the primary use of cash for operations is daily operating costs , general and administrative expenses , advisory fees , and land holding costs . our primary source of cash from operating activities is from rental income on properties . our primary cash outlays for investing activities are for construction and development , acquisition of land and income-producing properties , and capital improvements to existing properties . our primary sources of cash from investing activities are from the proceeds on the sale of land and income-producing properties . we received more proceeds from land sales in the current period than in the prior period . in addition , we acquired 12 residential properties and one commercial property . our primary sources of cash from financing activities are from proceeds on notes payables . our primary cash outlays are for recurring debt payments and payments on maturing notes payable . the proceeds from new financings in the current period allowed us to pay down more debt , as compared to the prior period .

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