Table:
|  | Fiscal 2018 | Fiscal 2017 | % Change |
| --- | --- | --- | --- |
|  |  | (in millions) |  |
| Sales | $ 670.7 | $  578.6 | 16 % |
| Operating income | 60.4 | 39.8 | 52 |
| Adjusted EBITDA | 73.3 | 48.8 | 50 |
Paragraphs:
Cubic Transportation Systems
Sales: CTS sales increased 16% to $670.7 million in 2018 compared to $578.6 million in 2017 and were higher in North America and the U.K., but were slightly lower in Australia. Sales in 2018 were higher in the U.S. primarily due to system development on the New York New Fare Payment System contract, which was awarded in October 2017. Increased work on both development and service contracts, including work on new change orders in London also increased CTS sales for the year. Sales were also positively impacted in the U.K. and Australia due to the impact of exchange rates. The average exchange rates between the prevailing currencies in our foreign operations and the U.S. dollar resulted in an increase in CTS sales of $12.4 million for 2018 compared to 2017, primarily due to the strengthening of the British Pound against the U.S. dollar.
Amortization of Purchased Intangibles: Amortization of purchased intangibles included in the CTS operating results totaled $5.2 million in 2018 and $5.7 million in 2017.
Operating Income: CTS operating income increased 52% in 2018 to $60.4 million compared to $39.8 million in 2017. For 2018, operating income was higher from increased volumes of system development work and services, including work on new projects and change orders, primarily in North America and the U.K. Operating income was also higher due to operational efficiencies and reductions in R&D spending. R&D expenses for CTS in 2017 included $6.4 million of system development expenses related to our anticipated contract with the New York Metropolitan Transit Authority that was awarded in early fiscal 2018; such expenses incurred in 2018 on this contract are classified as cost of sales. During the first quarter of fiscal year 2018 CTS implemented our new enterprise resource planning (ERP) system, and as a result began depreciating the cost of certain capitalized software into its operating results. This resulted in a decrease in operating income of $4.2 million between fiscal 2017 and fiscal 2018. The average exchange rates between the prevailing currency in our foreign operations and the U.S. dollar resulted in an increase in CTS operating income of $2.2 million for 2018 compared to 2017.
Adjusted EBITDA: CTS Adjusted EBITDA increased 50% to $73.3 million in 2018 compared to $48.8 million in 2017 primarily due to the same items described in the operating income section above. The increase in Adjusted EBITDA was primarily driven by the same factors that drove the increase in operating income described above excluding the increase in depreciation and decrease in amortization which are excluded from Adjusted EBITDA.
Question:
What resulted in a higher operating income?
Answer: increased volumes of system development work and services, including work on new projects and change orders, primarily in North America and the U.K. Operating income was also higher due to operational efficiencies and reductions in R&D spending