11. Segment Information and Geographic Area Information
The following table sets forth certain geographic financial information for fiscal 2019, fiscal 2018 and fiscal 2017. Geographic net sales are determined based on our sales from our various operational locations.

                                         |                | Fiscal Year Ended |
---------------------------------------- | -------------- | ----------------- | --------------
(Dollars in Millions)                    | April 27, 2019 | April 28, 2018    | April 29, 2017
Net Sales:                               |                |                   |
U.S.                                     | $540.5         | $487.5            | $506.9
Malta                                    | 148.5          | 184.0             | 155.5
China                                    | 113.7          | 117.3             | 127.7
Canada                                   | 101.6          | 54.4              | —
Other                                    | 96.0           | 65.1              | 26.4
Total Net Sales                          | $1,000.3       | $908.3            | $816.5
Property, Plant and Equipment, Net:      |                |                   |
U.S.                                     | $83.9          | $63.3             | $44.9
Malta                                    | 33.0           | 36.8              | 26.4
Belgium                                  | 22.1           | 25.0              | —
China                                    | 18.6           | 7.2               | 5.9
Other                                    | 34.3           | 29.9              | 13.4
Total Property, Plant and Equipment, Net | $191.9         | $162.2            | $90.6


Results of Continuing Operations
The analysis presented below is organized to provide the information we believe will facilitate an understanding of our historical performance and relevant trends going forward, and should be read in conjunction with our Consolidated Financial Statements, including the notes thereto, in Item 8 "Financial Statements and Supplementary Data" of this Annual Report on Form 10 - K.
The following table sets forth, for the periods indicated, certain data derived from our Consolidated Statements of Operations (in thousands):

                                                       | Year Ended December 31, |
------------------------------------------------------ | ----------------------- | ---------
                                                       | 2019                    | 2018
Sales                                                  | $788,948                | $718,892
Gross profit                                           | 315,652                 | 365,607
Operating expenses                                     | 261,264                 | 194,054
Operating income from continuing operations            | 54,388                  | 171,553
Other income (expense), net                            | 12,806                  | 823
Income from continuing operations before income taxes  | 67,194                  | 172,376
Provision for income taxes                             | 10,699                  | 25,227
Income from continuing operations, net of income taxes | $ 56,495                | $ 147,149


Commitments and Contractual Obligations
As of June 30, 2019, we have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows:
1) Includes interest up to maturity and principal payments. Please see note 10 "Long-Term Debt" for more details.
(2) Net of $30.7 million of sublease income to be received from properties which we have subleased to third parties.

                                |            |                             | Payments due between        |                             |
------------------------------- | ---------- | --------------------------- | --------------------------- | --------------------------- | -----------------------
                                | Total      | July 1, 2019— June 30, 2020 | July 1, 2020— June 30, 2022 | July 1, 2022— June 30, 2024 | July 1, 2024 and beyond
Long-term debt obligations (1)  | $3,408,565 | $147,059                    | $292,156                    | $1,045,567                  | $1,923,783
Operating lease obligations (2) | 318,851    | 72,853                      | 106,394                     | 59,441                      | 80,163
Purchase obligations            | 11,280     | 8,364                       | 2,747                       | 169                         | —
                                | $3,738,696 | $228,276                    | $401,297                    | $1,105,177                  | $2,003,946


8. Directors and Key Management remuneration
The remuneration of Directors is disclosed in the Directors’ remuneration report on pages 64 to 74:
Key Management compensation
During the year to 31 March 2019, Key Management comprised the members of the OLT and the Non-Executive Directors (2018: OLT and the Non-Executive Directors). The remuneration of all Key Management (including Directors) was as follows:

                             | 2019 | 2018
---------------------------- | ---- | ----
                             | £m   | £m
Short-term employee benefits | 5.3  | 4.9
Share-based payments         | 3.5  | 2.6
Termination benefits         | –    | 0.1
Pension contributions        | 0.2  | 0.2
Total                        | 9.0  | 7.8


A.4.1 Orders and revenue by region
Positive currency translation effects added one percentage point each to order and revenue growth; portfolio transactions had only minimal effects on volume growth year-over-year. The resulting ratio of orders to revenue (book-to-bill) for Siemens in fiscal 2019 was a strong 1.13, again well above 1. The order backlog was € 146 billion as of September 30, 2019, a new high.
1 As defined by the International Monetary Fund.
Orders related to external customers were clearly up year-overyear on growth in nearly all industrial businesses, led by Mobility. Gas and Power, Siemens Healthineers, Smart Infrastructure and SGRE all posted clear growth, while orders declined slightly in Digital Industries. Volume from large orders for Industrial Businesses overall was up substantially due to a sharp increase at Mobility, but also due to a significant increase in SGRE and Gas and Power. Growth in emerging markets was driven by orders from China, and from Russia where Mobility won a € 1.2 billion contract for high-speed trains including maintenance.
Order development was mixed in the Europe, C. I. S., Africa, Middle East region. The majority of industrial businesses posted order growth, led by double-digit growth in Mobility, which won several large contracts in the year under review. This increase was more than offset by a substantial decline in SGRE due mainly to a lower volume from large orders and a decrease in Digital Industries. In contrast to the region overall, orders were up clearly in Germany, driven by sharp growth in Gas and Power which recorded, among others, a large high voltage direct current (HVDC) order. Mobility recorded a significant increase in order intake in Germany, while the other industrial businesses posted declines.
Orders in the Americas region were up significantly year-over-year, benefiting from positive currency translation effects. Double-digit growth in nearly all industrial businesses was led by SGRE and Mobility with particularly sharp increases. The pattern of order development in the U. S. was largely the same as in the Americas region.
In the Asia, Australia region, orders also rose significantly due to growth in nearly all industrial businesses. The primary growth driver was SGRE, which recorded a sharply higher volume from large orders, including two large orders for offshore wind-farms
including service in Taiwan totaling € 2.3 billion. Orders for Mobility dropped substantially compared to the prior year. Clear growth in China included a majority of industrial businesses.

                                      |        | Fiscal year |        | % Change
------------------------------------- | ------ | ----------- | ------ | --------
(in millions of €)                    | 2019   | 2018        | Actual | Comp.
Europe, C. I. S., Africa, Middle East | 46,086 | 46,495      | (1)%   | (1)%
therein: Germany                      | 12,021 | 11,254      | 7%     | 7%
Americas                              | 29,812 | 25,060      | 19%    | 14%
therein: U.S.                         | 21,166 | 18,106      | 17%    | 10%
Asia, Australia                       | 22,101 | 19,742      | 12%    | 11%
therein: China                        | 8,989  | 8,459       | 6%     | 6%
Siemens                               | 97,999 | 91,296      | 7%     | 6%
therein: emerging markets1            | 31,720 | 30,564      | 4%     | 4%


Item 6. Selected Consolidated Financial Data
The following table presents selected consolidated financial data as of and for the five-year period ended December 31, 2019. Our past results of operations are not necessarily indicative of our future results of operations. The following selected consolidated financial data is qualified in its entirety by, and should be read in conjunction with, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto included elsewhere herein.
Consolidated Statement of Operations Data:

                                                                           |          |          | Year Ended December 31,               |          |
-------------------------------------------------------------------------- | -------- | -------- | ------------------------------------- | -------- | --------
                                                                           | 2019     | 2018     | 2017                                  | 2016     | 2015
                                                                           |          |          | (In thousands, except per share data) |          |
Revenues                                                                   | $111,412 | $111,322 | $106,524                              | $114,263 | $123,961
Income from operations                                                     | 9,464    | 8,238    | 4,545                                 | 10,186   | 3,820
Income from continuing operations, net of taxes                            | 4,155    | 4,661    | 1,592                                 | 6,007    | 8,523
Income from discontinued operations, net of taxes                          | —        | —        | 1,938                                 | 624      | 2,341
Net income                                                                 | $4,155   | $4,661   | $3,530                                | $6,631   | $10,864
Income per share—basic:                                                    |          |          |                                       |          |
Continuing operations                                                      | $0.35    | $0.38    | $0.12                                 | $0.43    | $0.58
Discontinued operations                                                    | —        | —        | 0.15                                  | 0.04     | 0.16
Net income per share                                                       | $0.35    | $0.38    | $0.27                                 | $0.47    | $0.74
Income per share—diluted:                                                  |          |          |                                       |          |
Continuing operations                                                      | $0.35    | $0.37    | $0.12                                 | $0.43    | $0.58
Discontinued operations                                                    | —        | —        | 0.15                                  | 0.04     | 0.16
Net income per share                                                       | $0.35    | $0.37    | $0.27                                 | $0.47    | $0.74
Shares used in per share calculation from continuing operations —basic     | 11,809   | 12,323   | 12,882                                | 13,997   | 14,722
Shares used in per share calculation from discontinued operations —basic   | 11,809   | 12,323   | 12,882                                | 13,997   | 14,722
Shares used in per share calculation from continuing operations—diluted    | 12,035   | 12,510   | 12,894                                | 13,997   | 14,722
Shares used in per share calculation from discontinuing operations—diluted | 12,035   | 12,510   | 12,894                                | 13,997   | 14,722


Deferred income taxes are recorded for differences in the basis of assets and liabilities for financial reporting purposes and tax reporting purposes. Deferred tax assets (liabilities) were comprised of the following:
At January 3, 2020, the Company had state net operating losses of $77 million and state tax credits of $7 million. Both will begin to expire in fiscal 2020; however, the Company expects to utilize $24 million and $7 million of these state net operating losses and state tax credits, respectively. The Company also had foreign net operating losses of $44 million, which do not expire. The Company expects to utilize $9 million of these foreign net operating losses.
Our valuation allowance for deferred tax assets was $20 million and $28 million as of January 3, 2020 and December 28, 2018, respectively. The valuation allowance decreased by $8 million primarily due to the sale of the commercial cybersecurity business and releases related to the expected utilization of certain carryover attributes, partially offset by an increase related to foreign withholding taxes.

                                                | January 3, 2020 | December 28, 2018
----------------------------------------------- | --------------- | -----------------
                                                | (in millions)   |
Operating lease liabilities                     | $115            | $—
Accrued vacation and bonuses                    | 54              | 48
Reserves                                        | 46              | 57
Deferred compensation                           | 26              | 25
Credits and net operating losses carryovers     | 25              | 31
Vesting stock awards                            | 18              | 20
Accumulated other comprehensive loss            | 12              | —
Deferred rent and tenant allowances             | 4               | 18
Investments                                     | 2               | 18
Deferred gain                                   | —               | 20
Other                                           | 9               | 13
Total deferred tax assets                       | 311             | 250
Valuation allowance                             | (20)            | (28)
Deferred tax assets, net of valuation allowance | 291             | 222
Purchased intangible assets                     | $(339)          | $(326)
Operating lease right-of-use assets             | (103)           | —
Deferred revenue                                | (17)            | (40)
Employee benefit contributions                  | (6)             | (4)
Accumulated other comprehensive income          | —               | (6)
Partnership interest                            | —               | (2)
Other                                           | (10)            | (14)
Total deferred tax liabilities                  | (475)           | (392)
Net deferred tax liabilities                    | $(184)          | $(170)


Note 10 – Income taxes
The provision (benefit) for income taxes consists of the following:

                                     | For the Years Ended December 31, |
------------------------------------ | -------------------------------- | -------
                                     | 2019                             | 2018
Current:                             |                                  |
Federal                              | $ (27)                           | $ (13 )
State and local                      | 276                              | 249
Total current                        | 249                              | 236
Deferred                             | 533                              | (461)
Provision (benefit) for income taxes | $ 782                            | $ (225)


Equity, liabilities and net debt in the consolidated financial statements
Equity amounts to €2,735 million (30/9/2018: €3,074 million), while liabilities amounts to €11,762 million (30/9/2018: €12,132 million). Net debt related to continuing operations decreased by €0.2 billion in the adjusted year-on-year comparison and amounted to €2.9 billion as of 30 September 2019 (30/09/2018: €3.1 billion).
1 Adjustment of previous year according to explanation in notes
2 Shown in the balance sheet under other financial assets (current).
3 Adjusted for the effects of discontinued operations.

€ million                                    | 30/9/2018 1 | 30/9/2018 adjusted3 | 30/9/2019
-------------------------------------------- | ----------- | ------------------- | ---------
Equity                                       | 3,074       | 3,074               | 2,735
Liabilities                                  | 12,132      | 12,132              | 11,762
Net debt                                     | 2,710       | 3,102               | 2,858
Financial liabilities (incl. finance leases) | 4,010       | 4,010               | 3,369
Cash and cash equivalents                    | 1,298       | 906                 | 500
Short-term financial investments2            | 2           | 2                   | 11


(c) Additional Segment Information
The majority of our assets as of July 27, 2019 and July 28, 2018 were attributable to our U.S. operations. In fiscal 2019, 2018, and 2017, no single customer accounted for 10% or more of revenue.
Property and equipment information is based on the physical location of the assets. The following table presents property and equipment information for geographic areas (in millions):

                             | July 27, 2019 | July 28, 2018 | July 29, 2017
---------------------------- | ------------- | ------------- | -------------
Property and equipment, net: |               |               |
United States                | $2,266        | $2,487        | $2,711
International                | 523           | 519           | 611
Total                        | $2,789        | $3,006        | $3,322


NOTE 2. RIGHT-OF-USE ASSETS
The Company leases many assets, including land, buildings, houses, motor vehicles, machinery and equipment. Leases typically run up to a period of 5 years, some with an option to renew the lease after the end of the non-cancelable period. Lease payments are renegotiated on a periodic basis; timing is depending on the region and type of lease. The Company has not entered into any sub-lease arrangements.
Right-of-use assets

                                            | Land and buildings | Motor vehicles | Other machinery and equipment | Total
------------------------------------------- | ------------------ | -------------- | ----------------------------- | -------
Balance January 1, 2019                     | 23,579             | 1,488          | 620                           | 25,687
Additions                                   | 6,475              | 1,588          | 16                            | 8,079
Transfer from property, plant and equipment | 459                | –              | –                             | 459
Modifications and reassessments             | 75                 | 31             | (24)                          | 82
Retirements                                 | –                  | –              | –                             | –
Depreciation for the year                   | (6,057)            | (1,008)        | (268)                         | (7,333)
Foreign currency translation effect         | 518                | 43             | 12                            | 573
Balance December 31, 2019                   | 25,049             | 2,142          | 356                           | 27,547


EXECUTIVE OFFICERS OF THE REGISTRANT
Executive officers of our Company are appointed by the Board of Directors and serve at the discretion of the Board. The following table sets forth certain information with respect to all executive officers of our Company.
CHRISTOPHER H. ATAYAN has served in various senior executive positions with the Company since March 2006, including his service as Chairman of the Board since January 2008 and Chief Executive Officer since October 2006, and has been a director of the Company since 2004. Mr. Atayan has served as the Senior Managing Director of Slusser Associates, a private equity and investment banking firm, since 1988, and has been engaged in private equity and investment banking since 1982. He also serves on the Board of Eastek Holdings, LLC, a manufacturing company.
ANDREW C. PLUMMER has served as our President and Chief Operating Officer since October 2018, as our Chief Financial Officer since January 2007, and as our Secretary from January 2007 to October 2018. From 2004 to 2007, Mr. Plummer served our company in various roles including Acting Chief Financial Officer, Corporate Controller, and Manager of SEC Compliance. Prior to joining our company in 2004, Mr. Plummer practiced public accounting, primarily with the accounting firm Deloitte and Touche, LLP (now Deloitte).
CHARLES J. SCHMADERER has served as the Company’s Vice President and Corporate Controller since April 2018 and as Secretary since October 2018. From 2006 to 2018, Mr. Schmaderer served the Company in various roles including as the Vice President of Financial Reporting and Assistant Secretary, and as the Director of Financial and SEC Reporting. Prior to joining AMCON in 2006, Mr. Schmaderer practiced public accounting, primarily with the accounting firm Grant Thornton, LLP and also holds a Master of Business Administration (MBA).

Name                  | Age | Position
--------------------- | --- | --------------------------------------------------------
Christopher H. Atayan | 59  | Chairman of the Board, Chief Executive Officer, Director
Andrew C. Plummer     | 45  | President, Chief Financial Officer, Director
Charles J. Schmaderer | 50  | Vice President, Corporate Controller, Secretary


Accounts Receivable
The following is a summary of Accounts receivable (in thousands):

                                | June 30,
2019 | June 30,
2018
------------------------------- | ------------- | -------------
Accounts receivable             | $201,365      | $225,167
Allowance for doubtful accounts | (1,054)       | (1,478)
Allowance for product returns   | (25,897)      | (11,266)
Accounts receivable, net        | $174,414      | $212,423


Financial position and cash flow
Capital expenditure and cash flow
Net operating cash inflow was $4,709,000, which was $4,081,000 lower than last year. The reduction in operating revenue was offset by lower operational costs. However, net cash was impacted by the increase in trail to upfront revenue mix. In addition, as a result of the loss position reported for FY18, the Group received a net tax refund of $2,327,000 during the year, compared to the prior year net tax paid of $172,000.
Net investing cash outflows for the year was $12,337,000. The $7,755,000 decrease in spend in investing activities relates to the Group’s controlling interest acquisition of iMoney in December 2017.
Net financing cash outflows for the 2019 year totalled $3,471,000. This included $2,839,000 lease payments and $497,000 interest expense related to leases. The material decrease against the prior year comparative period relates to $32,918,000 paid in share buy-backs and dividends in the prior period.

CASH FLOW SUMMARY                             | 2019 $’000 | 2018 $’000 RESTATED | CHANGE
--------------------------------------------- | ---------- | ------------------- | ------
Net cash provided  from operating  activities | 4,709      | 8,790               | 46%
Net cash used in  investing activities        | (12,337)   | (20,092)            | (39%)
Net cash used in financing activities         | (3,471)    | (36,014)            | (90%)
Net change in cash and cash equivalent        | (11,099)   | (47,316)            | (77%)


Interest expense includes the following (in millions):
The remaining period over which the unamortized debt discount will be recognized as non-cash interest expense is 7.88 years, 5.88 years, and 17.88 years for the 2017 Senior Convertible Debt, 2015 Senior Convertible Debt and 2017 Junior Convertible Debt, respectively.
In November 2017, the Company called for redemption $14.6 million in principal value of the remaining outstanding 2007 Junior Subordinated Convertible Debt (2007 Junior Convertible Debt) with an effective redemption date of December 15, 2017 for which substantially all holders submitted requests to convert. Prior to the call, conversion requests were received in both the second and third quarters of fiscal 2018. Total conversions for fiscal 2018 were for a principal amount of $32.5 million for which the Company settled the principal amount in cash and issued 0.5 million shares of its common stock in respect of the conversion value in excess of the principal amount for the conversions occurring prior to the redemption notice and $41.0  of redemption. A loss on total conversions was recorded for $2.2 million.
In June 2017, the Company exchanged, in privately negotiated transactions, $111.3 million aggregate principal amount of its 2007 Junior Convertible Debt for (i) $111.3 million principal amount of 2017 Junior Convertible Debt with a market value of $119.3 million plus (ii) the issuance of 3.2 million shares of the Company's common stock with a value of $254.6 million, of which $56.3 million was allocated to the fair value of the liability and $321.1 million was allocated to the reacquisition of the equity component for total consideration of $374.0 million. The transaction resulted in a loss on settlement of the 2007 Junior Convertible Debt of approximately $13.8 million, which represented the difference between the fair value of the liability component at time of repurchase and the sum of the carrying values of the debt component and any unamortized debt issuance costs. The debt discount on the new 2017 Junior Convertible Debt was the difference between the par value and the fair value of the debt resulting in a debt discount of $55.1 million which will be amortized to interest expense using the effective interest method over the term of the debt.
In February 2017, the Company issued the 2017 Senior Convertible Debt and 2017 Junior Convertible Debt for net proceeds of $2.04 billion and $567.7 million, respectively. In connection with the issuance of these instruments, the Company incurred issuance costs of $33.7 million, of which $17.8 million and $3.4 million was recorded as convertible debt issuance costs related to the 2017 Senior Convertible Debt and 2017 Junior Convertible Debt, respectively, and will be amortized using the effective interest method over the term of the debt. The balance of $12.5 million in fees was recorded to equity. Interest on both instruments is payable semi-annually on February 15 and August 15 of each year.
In February 2015, the Company issued the 2015 Senior Convertible Debt for net proceeds of approximately $1.69 billion. In connection with the issuance, the Company incurred issuance costs of $30.3 million, of which $20.4 million was recorded as debt issuance costs and will be amortized using the effective interest method over the term of the debt. The balance of $9.9 million was recorded to equity.
The Company utilized the proceeds from the issuances of the 2017 Senior Convertible Debt, 2017 Junior Convertible Debt, and 2015 Senior Convertible Debt to reduce amounts borrowed under its Credit Facility and to settle a portion of the 2007 Junior Convertible Debt in privately negotiated transactions. In February 2017 and February 2015, the Company settled $431.3 million and $575.0 million, respectively, in aggregate principal of its 2007 Junior Convertible Debt. The February 2015 repurchase consisted solely of cash. In February 2017, the Company used cash of $431.3 million and an aggregate of 12.0 million in shares of the Company's common stock valued at $862.7 million for total consideration of $1.29 billion to repurchase $431.3 million of the 2007 Junior Convertible Debt, of which $188.0 million was allocated to the liability component and $1.11 billion was allocated to the equity component. In addition, in February 2017, there was an inducement fee of $5.0 million which was recorded in the consolidated statements of income in loss on settlement of debt. The consideration transferred in February 2015 was $1.13 billion, of which $238.3 million was allocated to the liability component and $896.3 million was allocated to the equity component. In the case of both settlements of the 2007 Junior Convertible Debt, the consideration was allocated to the liability and equity components using the equivalent rate that reflected the borrowing rate for a similar nonconvertible debt prior to the retirement. The transactions resulted in a loss on settlement of debt of approximately $43.9 million and $50.6 million in fiscal 2017 and fiscal 2015, respectively, which represented, in each case, the difference between the fair value of the liability component at time of repurchase and the sum of the carrying values of the debt component and any unamortized debt issuance costs.

                                                      |        | Year Ended March 31, |
----------------------------------------------------- | ------ | -------------------- | ------
                                                      | 2019   | 2018                 | 2017
Debt issuance amortization                            | $12.9  | $3.1                 | $2.4
Debt discount amortization                            | 2.2    | —                    | —
Interest expense                                      | 291.8  | 6.6                  | 40.4
Total interest expense on Senior Secured Indebtedness | 306.9  | 9.7                  | 42.8
Debt issuance amortization                            | 3.6    | 3.5                  | 2.1
Debt discount amortization                            | 112.4  | 106.1                | 56.1
Coupon interest expense                               | 77.1   | 77.3                 | 44.5
Total interest expense on Convertible Debt            | 193.1  | 186.9                | 102.7
Other interest expense                                | 2.9    | 2.4                  | 0.8
Total interest expense                                | $502.9 | $199.0               | $146.3


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share data)
NOTE 9 — Accrued Expenses and Other Liabilities
The components of accrued expenses and other liabilities are as follows:

                                             | As of December 31, |
-------------------------------------------- | ------------------ | -------
                                             | 2019               | 2018
Accrued product-related costs                | $4,464             | $4,377
Accrued income taxes                         | 7,903              | 6,914
Accrued property and other taxes             | 1,574              | 1,976
Accrued professional fees                    | 1,599              | 3,350
Contract liabilities                         | 2,877              | 1,981
Dividends payable                            | 1,299              | 1,310
Remediation reserves                         | 11,444             | 11,274
Other accrued liabilities                    | 5,218              | 6,165
Total accrued expenses and other liabilities | $36,378            | $37,347


Restricted Share Units
The following table illustrates the number and WASP on date of award, and movements in, restricted share units (“RSUs”) and cash-based awards granted under the 2015 LTIP:
RSUs and cash-based awards have a vesting period between two to five years, with no award vesting within the first 12 months of the grant.

                                     | Year-ended 31 March 2019 |         | Year-ended 31 March 2018 |
------------------------------------ | ------------------------ | ------- | ------------------------ | -------
                                     | Number                   | WASP    | Number                   | WASP
Restricted share units               | 000’s                    | £ pence | 000’s                    | £ pence
Outstanding at the start of the year | 14,840                   | 316.09  | 15,350                   | 215.92
Awarded                              | 8,749                    | 478.44  | 6,337                    | 453.14
Forfeited                            | (1,421)                  | 426.11  | (1,421)                  | 284.15
Released                             | (6,822)                  | 309.77  | (5,426)                  | 218.49
Outstanding at the end of the year   | 15,346                   | 401.27  | 14,840                   | 316.09


2019 Annual LTI Grants. Except for Messrs. Dev, Trezise and Andrews, the Committee granted annual LTI
awards to our named executives in February 2019 at amounts substantially similar to the awards granted to
them in 2018. Mr. Dev’s 2019 LTI target was increased to $2,700,000, as previously approved by the Committee
upon his promotion to CFO in November 2018. Mr. Andrews’ 2019 LTI target was increased to $750,000, as
previously approved by the Committee following a review of compensation benchmarking in November 2018. In
February 2019, the Committee reviewed the compensation benchmarking data for all executive officers and
increased Mr. Trezise’s LTI target to $800,000 and left unchanged the LTI target for our other NEOs.
On February 28, 2019, the Committee granted our named executives the following number of (i) restricted shares or RSUs that will vest over a three-year period principally in exchange for continued service (“time-vested restricted shares or RSUs”), (ii) performance-based restricted shares or RSUs that will vest in two equal installments on March 1 of each of 2021 and 2022 based on attainment during the 2019 Performance Period, as defined above, of an Adjusted EBITDA Run Rate target of 0.0% (the “Performance-Vested Shares or RSUs”), as described further above:
(1) Represents the number of restricted shares or RSUs granted in 2019.
(2) As discussed further above, the actual number of shares that vest in the future may be lower or higher, depending on the level of performance achieved.
(3) Dividends on the shares of restricted stock (or, with respect to RSUs, dividend equivalents) will not be paid while unvested, but will accrue and paid or be forfeited in tandem with the vesting of the related shares or RSUs.
(4) For purposes of these grants, we determined both the number of time-vested and performance-based restricted shares or RSUs by dividing the total grant value granted to the executive by the volume-weighted average closing price of a share of our common stock over the 15-trading-day period ending five trading days prior to the grant date (“VWAP”), rounding to the nearest whole share. However, as noted previously, for purposes of reporting these awards in the Summary Compensation Table, our shares of time-vested restricted stock or RSUs are valued based on the closing price of our common stock on the date of grant and our shares of performance-based restricted stock or RSUs are valued as of the grant date based on probable outcomes, as required by applicable accounting and SEC disclosure rules. See footnote 2 to the Summary Compensation Table for more information.
(5) Mr. Storey’s annual grant was in the form of RSUs.

                     |                                       | 2019 Annual LTI Grants |                                             |                |
-------------------- | ------------------------------------- | ---------------------- | ------------------------------------------- | -------------- | --------------------
                     | Time-vested Restricted Shares or RSUs |                        | Performance-based Restricted Shares or RSUs |                |
Named Officer        | No. of Shares(1)(3)                   | Grant Value(1)         | No. of Shares(2)(3)                         | Grant Value(4) | Total Grant Value(4)
Current Executives:  |                                       |                        |                                             |                |
Jeffrey K. Storey(5) | 358,884                               | $5,040,000             | 538,328                                     | $7,560,000     | $12,600,000
Indraneel Dev        | 76,904                                | 1,080,000              | 115,356                                     | 1,620,000      | 2,700,000
Stacey W. Goff       | 56,966                                | 800,000                | 85,449                                      | 1,200,000      | 2,000,000
Scott A. Trezise     | 22,786                                | 320,000                | 34,180                                      | 480,000        | 800,000
Shaun. C. Andrews    | 21,362                                | 300,000                | 32,043                                      | 450,000        | 750,000


AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
23. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Selected quarterly financial data for the years ended December 31, 2019 and 2018 is as follows (in millions, except per share data):
(1) Represents Operating expenses, exclusive of Depreciation, amortization and accretion, Selling, general, administrative and development expense, and Other operating expenses.

                                                                                |           | Three Months Ended |               |              |
------------------------------------------------------------------------------------------- | --------- | ------------------ | ------------- | ------------ | ------------------------
                                                                                | March 31, | June 30,           | September 30, | December 31, | Year Ended, December 31,
2019:                                                                                |           |                    |               |              |
Operating revenues                                                                          | $1,813.4  | $1,889.6           | $1,953.6      | $1,923.7     | $7,580.3
Costs of operations (1)                                                                     | 543.4     | 563.3              | 559.9         | 550.2        | 2,216.8
Operating income                                                                            | 614.9     | 683.9              | 728.3         | 661.3        | 2,688.4
Net income                                                                                | 407.6     | 434.3              | 505.3         | 569.4        | 1,916.6
Net income attributable to American Tower Corporation stockholders                          | 397.4     | 429.1              | 498.6         | 562.7        | 1,887.8
Net income attributable to American Tower Corporation common stockholders                   | 397.4     | 429.1              | 498.6         | 562.7        | 1,887.8
Basic net income per share attributable to American Tower Corporation common stockholders   | 0.90      | 0.97               | 1.13          | 1.27         | 4.27
Diluted net income per share attributable to American Tower Corporation common stockholders | 0.89      | 0.96               | 1.12          | 1.26         | 4.24


The following table presents a rollforward of our restructuring liability as of September 30, 2019, which is included within accrued compensation and other current liabilities within our Consolidated Balance Sheet, (in millions):
Certain restructuring costs are based upon estimates. Actual amounts paid may ultimately differ from these estimates. If additional costs are incurred or recognized amounts exceed costs, such changes in estimates will be recognized when incurred.

                                 | Restructuring Liability Employee Separation and other | Restructuring Liability Consulting Costs
-------------------------------- | ----------------------------------------------------- | ----------------------------------------
Balance as of October 1, 2017    | $ 1.0                                                 | $  —
Accrued costs                    | 4.2                                                   | 0.8
Cash payments                    | (4.6)                                                 | (0.5)
Balance as of September 30, 2018 | $  0.6                                                | $  0.3
Accrued costs                    | 7.5                                                   | 7.9
Cash payments                    | (6.1)                                                 | (7.4)
Balance as of September 30, 2019 | $  2.0                                                | $  0.8


Long-term Incentive Program Performance Share Awards
During the year ended December 31, 2017, pursuant to the Company’s 2016 Incentive Plan, the Company granted long-term incentive program performance share awards (“LTIP performance shares”). These LTIP performance shares are earned, if at all, based upon the achievement, over a specified period that must not be less than one year and is typically a three-year performance period, of performance goals related to (i) the compound annual growth over the performance period in the sales for the Company as determined by the Company, and (ii) the cumulative operating income or EBITDA over the performance period as determined by the Company. Up to 200% of the LTIP performance shares may be earned upon achievement of performance goals equal to or exceeding the maximum target levels for the performance goals over the performance period. On a quarterly basis, management
A summary of the nonvested LTIP performance shares is as follows:
During the year ended December 31, 2019, the Company revised the expected attainment rates for outstanding LTIP performance shares due to changes in forecasted sales and operating income, resulting in additional stock-based compensation expense of approximately $3.7 million.

                               | Number of Shares at Expected Attainment | Weighted Average Grant Date Fair Value
------------------------------ | --------------------------------------- | --------------------------------------
Nonvested at December 31, 2018 | 540,697                                 | $19.83
Forfeited                      | -56,567                                 | 18.80
Change in expected attainment  | 185,339                                 | 20.09
Nonvested at December 31, 2019 | 669,469                                 | $20.12


Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents, and marketable securities increased by $485.5 million to $2,455.2 million as at December 31, 2019 from $ 1,969.7 million as at December 31, 2018, primarily as a result of proceeds from the public offering in September 2019, cash provided by our operating activities, and proceeds from the exercise of stock options.
Cash equivalents and marketable securities include money market funds, repurchase agreements, term deposits, U.S. and Canadian federal bonds, corporate bonds, and commercial paper, all maturing within the 12 months from December 31, 2019.
The following table summarizes our total cash, cash equivalents and marketable securities as at December 31, 2019 and 2018 as well as our operating, investing and financing activities for the years ended December 31, 2019 and 2018:
Cash Flows From Operating Activities
Our largest source of operating cash is from subscription solutions. These payments are typically paid to us at the beginning of the applicable subscription period, except for our Shopify Plus merchants who typically pay us at the end of their monthly billing cycle. We also generate significant cash flows from our Shopify Payments processing fee arrangements, which are received on a daily basis as transactions are processed. Our primary uses of cash from operating activities are for third-party payment processing fees, employee-related expenditures, advancing funds to merchants through Shopify Capital, marketing programs, third-party shipping and fulfillment partners, outsourced hosting costs, and leased facilities.
For the year ended December 31, 2019, cash provided by operating activities was $70.6 million. This was primarily as a result of our net loss of $124.8 million, which once adjusted for $158.5 million of stock-based compensation expense, $35.7 million of amortization and depreciation, a $37.9 million increase in deferred income taxes, a $15.9 million increase of our provision for uncollectible merchant cash advances and loans, and an unrealized foreign exchange loss of $3.2 million, contributed $50.4 million of positive cash flows. Additional cash of $162.9 million resulted from the following increases in operating liabilities: $84.6 million in accounts payable and accrued liabilities due to indirect taxes payable, payroll liabilities, and payment processing and interchange fees; $64.6 million in income tax assets and liabilities; $12.3 million in deferred revenue due to the growth in sales of our subscription solutions along with the acquisition of 6RS; and $1.5 million increase in net lease liabilities. These were offset by $142.8 million of cash used resulting from the following increases in operating assets: $74.2 million in merchant cash advances and loans as we continued to grow Shopify Capital; $56.2 million in trade and other receivables; and $12.4 million in other current assets driven primarily by an increase in prepaid expenses, forward contract assets designated for hedge accounting, and deposits.
For the year ended December 31, 2018, cash provided by operating activities was $9.3 million. This was primarily as a result of our net loss of $64.6 million, which once adjusted for $95.7 million of stock-based compensation expense, $27.1 million of amortization and depreciation, a $5.9 million increase of our provision for uncollectible merchant cash advances, and an unrealized foreign exchange loss of $1.3 million, contributed $65.4 million of positive cash flows. Additional cash of $38.1 million resulted from the following increases in operating liabilities: $20.6 million in accounts payable and accrued liabilities; $9.0 million in deferred revenue; and $8.4 million in lease liabilities. These were offset by $94.2 million of cash used resulting from the following increases in operating assets: $50.7 million in merchant cash advances and loans; $32.6 million in trade and other receivables; and $10.8 million in other current assets.
Cash Flows From Investing Activities
Cash flows used in investing activities are primarily related to the purchase and sale of marketable securities, business acquisitions, purchases of leasehold improvements and furniture and fixtures to support our expanding infrastructure and workforce, purchases of computer equipment, and software development costs eligible for capitalization.
Net cash used in investing activities in the year ended December 31, 2019 was $ 569.5 million, which was driven by $265.5 million used to make business acquisitions, most of which was for the 6RS acquisition on October 17, 2019, net purchases of $241.6 million in marketable securities, $ 56.8 million used to purchase property and equipment, which primarily consisted of expenditures on leasehold improvements, and $5.6 million used for purchasing and developing software to add functionality to our platform and support our expanding merchant base.
Net cash used in investing activities in the year ended December 31, 2018 was $810.6 million, reflecting net purchases of $749.7 million in marketable securities. Cash used in investing activities also included $28.0 million used to purchase property and equipment, which primarily consisted of expenditures on leasehold improvements, $19.4 million used to make business acquisitions, and $13.6 million used for purchasing and developing software.
Cash Flows From Financing Activities
To date, cash flows from financing activities have related to proceeds from private placements, public offerings, and exercises of stock options.
Net cash provided by financing activities in the year ended December 31, 2019 was $736.4 million driven mainly by the $688.0 million raised by our September 2019 public offering, and $48.3 million in proceeds from the issuance of Class A subordinate voting shares and Class B multiple voting shares as a result of stock option exercises. This compares to $1,072.2 million for the same period in 2018 of which $1,041.7 million was raised by our February and December 2018 public offerings while the remaining $30.5 million related to stock option exercises.

                                                                 | Years ended December 31, |
---------------------------------------------------------------- | ------------------------ | ----------
                                                                 | 2019                     | 2018
                                                                 | (in thousands)           |
Cash, cash equivalents and marketable securities (end of period) | $2,455,194               | 1,969,670
Net cash provided by (used in):                                  |                          |
Operating activities                                             | $70,615                  | $9,324
Investing activities                                             | (569,475)                | (810,633)
Financing activities                                             | 736,351                  | 1,072,182
Effect of foreign exchange on cash and cash equivalents          | 1,742                    | (1,867)
Net increase in cash and cash equivalents                        | 239,233                  | 269,006
Change in marketable securities                                  | 246,291                  | 762,625
Net increase in cash, cash equivalents and marketable securities | $485,524                 | $1,031,631


Free Cash Flow. Free cash flow represents net cash provided by operating activities minus capital expenditures and capitalized software development costs. Free cash flow is a measure used by management to understand and evaluate our core operating performance and trends and to generate future operating plans.
The exclusion of capital expenditures and amounts capitalized for internally-developed software facilitates comparisons of our operating performance on a period-to-period basis and excludes items that we do not consider to be indicative of our core operating performance. Free cash flow is not a measure calculated in accordance with GAAP. We believe that free cash flow provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Nevertheless, our use of free cash flow has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. You should consider free cash flow alongside our other GAAP-based financial performance measures, net cash provided by operating activities, and our other GAAP financial results. The following table presents a reconciliation of free cash flow to net cash for operating activities, the most directly comparable GAAP measure, for each of the periods indicated (in thousands):

                                          |          | Year Ended December 31, |
----------------------------------------- | -------- | ----------------------- | --------
                                          | 2019     | 2018                    | 2017
Net cash provided by operating activities | $10,317  | $3,295                  | $4,863
Capital expenditures                      | (5,269)  | (1,721)                 | (1,667)
Capitalized software development costs    | (7,819)  | (8,499)                 | (6,160)
Free cash flow                            | $(2,771) | $(6,925)                | $(2,964)


8 EXPENSES BY NATURE
Note: (a) Transaction costs primarily consist of bank handling fees, channel and distribution costs.
(b) During the year ended 31 December 2019, the Group incurred expenses for the purpose of research and development of approximately RMB30,387 million (2018: RMB22,936 million), which comprised employee benefits expenses of approximately RMB24,478 million (2018: RMB19,088 million).
During the year ended 31 December 2019, employee benefits expenses included the share-based compensation expenses of approximately RMB10,500 million (2018: RMB7,900 million).
No significant development expenses had been capitalised for the years ended 31 December 2019 and 2018.
(c) Included the amortisation charges of intangible assets mainly in respect of media contents.
During the year ended 31 December 2019, amortisation of intangible assets included the amortisation of intangible assets resulting from business combinations of approximately RMB1,051 million (2018: RMB524 million).

                                                                                | 2019        | 2018
------------------------------------------------------------------------------------------------------------------ | ----------- | -----------
                                                                                | RMB’Million | RMB’Million
Transaction costs (Note (a))                                                                                | 85,702      | 69,976
Employee benefits expenses (Note (b) and Note 13)                                                                  | 53,123      | 42,153
Content costs (excluding amortisation of intangible assets)                                                        | 48,321      | 39,061
Amortisation of intangible assets (Note (c) and Note 20)                                                           | 28,954      | 25,616
Bandwidth and server custody fees (excluding depreciation of right-of-use assets)                                  | 16,284      | 15,818
Depreciation of property, plant and equipment, investment properties and right-of-use assets (Note 16 and Note 18) | 15,623      | 8,423
Promotion and advertising expenses                                                                                | 16,405      | 19,806
Travelling and entertainment expenses                                                                              | 1,773       | 1,450
Auditor’s remuneration                                                                                |             |
– Audit and audit-related services                                                                                | 105         | 110
– Non-audit services                                                                                | 43          | 26


The following table provides detail of amounts reclassified from AOCL:
(1) These accumulated other comprehensive components are included in our derivative and hedging activities. See Note 15, “Derivatives and Hedging Activities,” of the Notes to Consolidated Financial Statements for additional details.

(In millions)                                                     | 2019   | 2018   | 2017   | Location of Amount Reclassified from AOCL
----------------------------------------------------------------- | ------ | ------ | ------ | -----------------------------------------
Defined benefit pension plans and other post-employment benefits: |        |        |        |
Prior service credits                                             | $ 0.1  | $0.3   | $ 1.3  |
Actuarial losses                                                  | (4.9)  | (3.1)  | (10.0) |
Total pre-tax amount                                              | (4.8)  | (2.8)  | (8.7)  | Other (expense) income, net
Tax benefit                                                       | 1.2    | 0.7    | 2.5    |
Net of tax                                                        | (3.6)  | (2.1)  | (6.2)  |
Net gains (losses) on cash flow hedging derivatives:(1)           |        |        |        |
Foreign currency forward contracts                                | 1.6    | 0.2    | 0.9    | Cost of sales
Interest rate and currency swaps                                  | —      | —      | (3.4)  |
Treasury locks                                                    | 0.1    | 0.1    | 0.1    | Interest expense, net
Total pre-tax amount                                              | 1.7    | 0.3    | (2.4)  |
Tax (expense) benefit                                             | (0.6)  | (0.1)  | 0.8    |
Net of tax                                                        | 1.1    | 0.2    | (1.6)  |
Total reclassifications for the period                            | (2.5 ) | (1.9 ) | (7.8 ) |


Deferred Compensation Plan
The Company has a non-qualified, unfunded deferred compensation plan, which provides certain key employees, including executive officers, with the ability to defer the receipt of compensation in order to accumulate funds for retirement on a tax deferred basis. The Company does not make contributions to the plan or guarantee returns on the investments. The Company is responsible for the plan’s administrative expenses. Participants’ deferrals and investment gains and losses remain as the Company’s liabilities and the underlying assets are subject to claims of general creditors.
The liabilities for compensation deferred under the plan are recorded at fair value in each reporting period. Changes in the fair value of the liabilities are included in operating expense on the Consolidated Statements of Operations. The Company manages the risk of changes in the fair value of the liabilities by electing to match the liabilities with investments in corporate-owned life insurance policies, mutual funds and money market funds that offset a substantial portion of the exposure. The investments are recorded at the cash surrender value of the corporate-owned life insurance policies, and at the fair value of the mutual funds and money market funds, which are classified as trading securities. Changes in the cash surrender value of the corporate-owned life insurance policies and the fair value of mutual fund and money market fund investments are included in interest and other income, net on the Consolidated Statements of Operations. The following table summarizes the deferred compensation plan balances on the Consolidated Balance Sheets (in thousands):

                                                                | December 31, |
--------------------------------------------------------------- | ------------ | -------
                                                                | 2019         | 2018
Deferred compensation plan asset components:                    |              |
Cash surrender value of corporate-owned life insurance policies | $16,883      | $13,103
Fair value of mutual funds and money market funds               | 21,975       | 18,867
Total                                                           | $38,858      | $31,970
Deferred compensation plan assets reported in:                  |              |
Other long-term assets                                          | $38,858      | $31,970
Deferred compensation plan liabilities reported in:             |              |
Accrued compensation and related benefits (short-term)          | $425         | $447
Other long-term liabilities                                     | 39,665       | 32,283
Total                                                           | $40,090      | $32,730


The following securities have been excluded from the calculation of diluted weighted average common shares outstanding as the inclusion of these securities would have an anti-dilutive effect:
Participating securities are composed of certain stock options granted under the 2015 Plan, and previously granted under the 2009 Equity Incentive Plan, that may be exercised before the options have vested. Unvested shares have a non-forfeitable right to dividends. Unvested shares issued as a result of early exercise are subject to repurchase by us upon termination of employment or services at the original exercise price. The common stock subject to repurchase is no longer classified as participating securities when shares revert to common stock outstanding as the awards vest and our repurchase right lapses.
Our redeemable noncontrolling interest relates to our 85% equity ownership interest in OpenEye. The OpenEye stockholder agreement contains a put option that gives the minority OpenEye stockholders the right to sell their OpenEye shares to us based on the fair value of the shares. The OpenEye stockholder agreement also contains a call option that gives us the right to purchase the remaining OpenEye shares from the minority OpenEye stockholders based on the fair value of the shares. The put and call options can each be exercised beginning in the first quarter of 2023. This redeemable noncontrolling interest is considered temporary equity and we report it between liabilities and stockholders’ equity in the consolidated balance sheets. The amount of the net income or loss attributable to redeemable noncontrolling interests is recorded in the consolidated statements of operations.

                                   |         | Year Ended December 31, |
---------------------------------- | ------- | ----------------------- | -------
                                   | 2019    | 2018                    | 2017
Stock options                      | 223,259 | 229,294                 | 258,917
Restricted stock awards            | —       | —                       | 129
Restricted stock units             | 136,600 | 148,175                 | 188,050
Common stock subject to repurchase | 250     | 957                     | 13,281


5. Other operating expenses
The expenses from logistics services provided by METRO LOGISTICS to companies intended for sale and non-group companies are offset by income from logistics services, which are reported under other operating income.

€ million                                | 2017/2018 | 2018/2019
---------------------------------------- | --------- | ---------
Expenses from logistics services         | 272       | 254
Losses from the disposal of fixed assets | 4         | 6
Impairment losses on goodwill            | 0         | 3
Miscellaneous                            | 17        | 17
                                         | 293       | 279


Sufficiency of Cash Resources The following table sets forth selected information regarding our financial condition:
Our net working capital position improved $18.0 million as of December 31, 2019 compared to December 31, 2018 primarily as a result of the elimination in 2019 of the quarterly dividend of approximately $27.6 million and a decrease in accrued compensation of $7.4 million.
These reductions in the working capital deficit were offset in part by the recognition of current lease liabilities of $6.2 million at December 31, 2019 as part of the adoption on January 1, 2019 of ASU No. 2016- 02, Leases. Working capital was also impacted by a decline in accounts receivable of $13.1 million compared to December 31, 2018.
Our most significant use of funds in 2020 is expected to be for: (i) interest payments on our indebtedness of between $125.0 million and $130.0 million and principal payments on debt of $18.4 million; and (ii) capital expenditures of between $195.0 million and $205.0 million.
Based on available cash, we may utilize a portion of the dividend savings to reduce our longterm debt or repurchase additional amounts of our Senior Notes in the open market or in private transactions if such purchases can be made on economically favorable terms. In the future, our ability to use cash may be limited by our other expected uses of cash and our ability to incur additional debt will be limited by our existing and future debt agreements.
We believe that cash flows from operating activities, together with our existing cash and borrowings available under our revolving credit facility, will be sufficient for at least the next twelve months to fund our current anticipated uses of cash.
After that, our ability to fund these expected uses of cash and to comply with the financial covenants under our debt agreements will depend on the results of future operations, performance and cash flow. Our ability to fund these expected uses from the results of future operations will be subject to prevailing economic conditions and to financial, business, regulatory, legislative and other factors, many of which are beyond our control.
We may be unable to access the cash flows of our subsidiaries since certain of our subsidiaries are parties to credit or other borrowing agreements, or subject to statutory or regulatory restrictions, that restrict the payment of dividends or making intercompany loans and investments, and those subsidiaries are likely to continue to be subject to such restrictions and prohibitions for the foreseeable future.
In addition, future agreements that our subsidiaries may enter into governing the terms of indebtedness may restrict our subsidiaries’ ability to pay dividends or advance cash in any other manner to us.
To the extent that our business plans or projections change or prove to be inaccurate, we may require additional financing or require financing sooner than we currently anticipate. Sources of additional financing may include commercial bank borrowings, other strategic debt financing, sales of nonstrategic assets, vendor financing or the private or public sales of equity and debt securities.
There can be no assurance that we will be able to generate sufficient cash flows from operations in the future, that anticipated revenue growth will be realized, or that future borrowings or equity issuances will be available in amounts sufficient to provide adequate sources of cash to fund our expected uses of cash. Failure to obtain adequate financing, if necessary, could require us to significantly reduce our operations or level of capital expenditures, which could have a material adverse effect on our financial condition and the results of operations.

                                 |          | December 31,
-------------------------------- | -------- | ------------
(In thousands, except for ratio) | 2019     | 2018
Cash and cash equivalents        | $ 12,395 | $ 9,599
Working capital (deficit)        | (67,429) | (85,471)
Current ratio                    | 0.72     | 0.70


Summarized financial information of Hilli LLC
The most significant impacts of Hilli LLC VIE's operations on our consolidated statements of income and consolidated statements of cash flows, as of December 31, 2019 and 2018, are as follows:

(in thousands of $)                                                     | 2019      | 2018
----------------------------------------------------------------------- | --------- | --------
Statement of income                                                     |           |
Liquefaction services revenue                                           | 218,096   | 127,625
Realized and unrealized (losses)/gains on the oil derivative instrument | (26,001)  | 16,767
Statement of cash flows                                                 |           |
Net debt repayments                                                     | (243,513) | (30,300)
Net debt receipts                                                       | 129,454   | —


17. Personnel expenses
Personnel expenses can be broken down as follows:
Wages and salaries include expenses relating to restructuring measures and severance payments of €23 million (2017/18: €19 million). The variable remuneration rose from €52 million in financial year 2017/18 to €81 million in financial year 2018/19. Wages and salaries also include expenses for long-term remuneration components totalling €7 million (2017/18: €16 million).

€ million                                                                                | 2017/2018 | 2018/2019
--------------------------------------------------------------------------------------------- | --------- | ---------
Wages and salaries                                                                            | 2,173     | 2,264
Social security expenses, expenses for post-employment benefits and related employee benefits | 552       | 552
thereof for post-employment benefits                                                          | (43)      | (41)
                                                                                | 2,725     | 2,816


A summary of our outstanding debt as of December 31, 2018, is as follows (amounts in millions):
Refer to Note 13 of the notes to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further disclosures regarding our debt obligations.

           |                       |                                                   | December 31, 2018
---------- | --------------------- | ------------------------------------------------- | -------------------
           | Gross Carrying Amount | Unamortized Discount and Deferred Financing Costs | Net Carrying Amount
2021 Notes | 650                   | (3)                                               | 647
2022 Notes | 400                   | (3)                                               | 397
2026 Notes | 850                   | (8)                                               | 842
2027 Notes | 400                   | (5)                                               | 395
2047 Notes | 400                   | (10)                                              | 390
Total debt | $2,700                | $(29)                                             | $2,671


Unfunded Status
The following table presents the unfunded status of the Combined Pension Plan and post-retirement benefit plans:
The current portion of our post-retirement benefit obligations is recorded on our consolidated balance sheets in accrued expenses and other current liabilities-salaries and benefits.

                                       | Combined Pension Plan    |                       | Post-Retirement Benefit Plans |
-------------------------------------- | ------------------------ | --------------------- | ----------------------------- | -------
                                       | Years Ended December 31, |                       | Years Ended December 31,      |
                                       | 2019                     | 2018                  | 2019                          | 2018
                                       |                          | (Dollars in millions) |                               |
Benefit obligation                     | $(12,217)                | (11,594)              | (3,037)                       | (2,977)
Fair value of plan assets              | 10,493                   | 10,033                | 13                            | 18
Unfunded status                        | (1,724)                  | (1,561)               | (3,024)                       | (2,959)
Current portion of unfunded status     | —                        | —                     | (224)                         | (252)
Non-current portion of unfunded status | $(1,724)                 | (1,561)               | (2,800)                       | (2,707)


Note 17. Other Accrued Expenses and Current Liabilities
Other accrued expenses and current liabilities consisted of the following (in thousands):

                                                        | December 31, |
------------------------------------------------------- | ------------ | -------
                                                        | 2019         | 2018
Accrued purchases                                       | $4,328       | $1,679
Accrued legal and professional fees                     | 3,860        | 3,380
Accrued customer-acquisition advertising costs (Note 1) | 3,745        | 2,831
Deferred Symphony acquisition purchase price (Note 4)   | 3,517        | 3,394
Accrued roadside assistance claim costs                 | 1,709        | 1,330
Accrued telephone charges                               | 1,605        | 2,000
Financial derivatives (Note 12)                         | 251          | 2,859
Accrued restructuring (Note 5)                          | 56           | 976
Accrued rent (Note 3)                                   | —            | 3,283
Other                                                   | 10,259       | 9,503
                                                        | $29,330      | $31,235


Software Development Costs
We capitalize purchased software upon acquisition if it is accounted for as internal-use software or if it meets the future alternative use criteria. We capitalize incurred labor costs for software development from the time technological feasibility of the software is established, or when the preliminary project phase is completed in the case of internal-use software, until the software is available for general release. Research and development costs and other computer software maintenance costs related to software development are expensed as incurred.
We estimate the useful life of our capitalized software and amortize its value over that estimated life. If the actual useful life is shorter than our estimated useful life, we will amortize the remaining book value over the remaining useful life or the asset may be deemed to be impaired and, accordingly, a write-down of the value of the asset may be recorded as a charge to earnings.
Upon the availability for general release, we commence amortization of the capitalized software costs on a product by product basis. Amortization of capitalized software is recorded using the greater of (i) the ratio of current revenues to total and anticipated future revenues for the applicable product or (ii) the straightline method over the remaining estimated economic life, which is estimated to be three to five years.
At each balance sheet date, the unamortized capitalized costs of a software product are compared with the net realizable value of that product. The net realizable value is the estimated future gross revenues from that product reduced by the estimated future costs of completing and disposing of that product, including the costs of performing maintenance and client support required to satisfy our responsibility set forth at the time of sale.
The amount by which the unamortized capitalized costs of a software product exceed the net realizable value of that asset is written off. If we determine that the value of the capitalized software could not be recovered, a write-down of the value of the capitalized software to its recoverable value is recorded as a charge to earnings. The unamortized balances of capitalized software were as follows:

                                | December 31, |
------------------------------- | ------------ | ---------
(In thousands)                  | 2019         | 2018
Software development costs      | $428,641     | $317,637
Less: accumulated amortization  | (184,712)    | (107,977)
Software development costs, net | $243,929     | $209,660


Stock Options
The following table summarizes activity involving stock option awards for the year ended December 31, 2019:
The aggregate intrinsic value of our options outstanding and exercisable at December 31, 2019 was less than $1 million. The weighted-average remaining contractual term for such options was 0.18 years.
During 2019, we received net cash proceeds of less than $1 million in connection with our option exercises. The tax benefit realized from these exercises was less than $1 million. The total intrinsic value of options exercised for the years ended December 31, 2019, 2018 and 2017, was less than $1 million each year.

                                                 | Number of options | Weighted-Average Exercise Price
------------------------------------------------ | ----------------- | -------------------------------
                                                 | (in thousands)    |
Outstanding and Exercisable at December 31, 2018 | 543               | $27.46
Exercised                                        | (6)               | 11.38
Forfeited/Expired                                | (68)              | 24.78
Outstanding and Exercisable at December 31, 2019 | 469               | 28.04


13. Stock-Based Compensation:
Under the 2014 RSU Plan, we may grant restricted stock units of up to an aggregate of 3,000 units. Each unit converts to one share of the Company’s stock at the
time of vesting. The fair value of RSU awards is determined at the closing market price of the Company’s common stock at the date of grant. For the years ended March
31, 2018 and 2019, there were 292 and 315 awards, respectively, granted from this plan. Restricted stock activity during the year ended 2019 is as follows:
Performance-based awards vest one year after the grant date. Service-based awards vest as to one-third annually with the requisite service periods beginning on
the grant date. Awards are amortized over their respective grade-vesting periods. The total unrecognized compensation costs related to unvested stock awards expected
to be recognized over the vesting period, approximately three years, was $1,476 at March 31, 2019.
We have four fixed stock option plans. Under the 2004 Stock Option Plan, as amended, we may grant options to employees for the purchase of up to an aggregate
of 10,000 shares of common stock. Under the 2004 Non-Employee Directors’ Stock Option Plan, as amended, we may grant options for the purchase of up to an
aggregate of 1,000 shares of common stock. No awards were made under these two plans after August 1, 2013. Under the 2014 Stock Option Plan, we can grant options
to employees for the purchase of up to an aggregate of 10,000 shares of common stock. Under the 2014 Non-Employee Directors’ Stock Option Plan, as amended, we can
grant options to our directors for the purchase of up to an aggregate of 1,000 shares of common stock. Under all plans, the exercise price of each option shall not be less
than the market price of our stock on the date of grant and an option’s maximum term is 10 years. Options granted under the 2004 Stock Option Plan and the 2014 Stock
Option Plan vest as to 25% annually and options granted under the 2004 Non-Employee Directors’ Stock Option Plan and the 2014 Non-Employee Director’s Stock
Option Plan vest as to one-third annually. Requisite service periods related to all plans begin on the grant date. As of March 31, 2019, there were 12,447 shares of
common stock available for future issuance under all of the plans, consisting of options available to be granted and options currently outstanding.

                             | March 31, 2019   |
---------------------------- | ---------------- | ------------------------------------------------
                             | Number of shares | Weighted-Average Grant Date Fair Value per Share
Non-vested at March 31, 2018 | 358              | $16.27
Granted                      | 315              | 15.28
Vested                       | (172)            | 16.27
Cancelled and forfeited      | (68)             | 16.27
Non-vested at March 31, 2019 | 433              | $15.55


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share data)
We employ a liability-driven investment strategy whereby a mix of equity and fixed-income investments are used to pursue a derisking strategy which over time seeks to reduce interest rate mismatch risk and other risks while achieving a return that matches or exceeds the growth in projected pension plan liabilities. Risk tolerance is established through careful consideration of plan liabilities and funded status. The investment portfolio primarily contains a diversified mix of equity and fixed-income investments. Other assets such as private equity are used modestly to enhance long-term returns while improving portfolio diversification. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and asset/liability studies at regular intervals.
The following table summarizes the fair values of our pension plan assets:
(1) Comprised of common stocks of companies in various industries. The Pension Plan fund manager may shift investments from value to growth strategies or vice-versa, from small cap to large cap stocks or vice-versa, in order to meet the Pension Plan's investment objectives, which are to provide for a reasonable amount of long-term growth of capital without undue exposure to volatility, and protect the assets from erosion of purchasing power.
(2) Comprised of investment grade short-term investment and money-market funds.
(3) Comprised of partnerships that invest in various U.S. and international industries.
(4) Comprised of long-term government bonds with a minimum maturity of 10 years and zero-coupon Treasury securities ("Treasury Strips") with maturities greater than 20 years.
(5) Comprised predominately of investment grade U.S. corporate bonds with maturities greater than 10 years and U.S. high-yield corporate bonds; emerging market debt (local currency sovereign bonds, U.S. dollar-denominated sovereign bonds and U.S. dollar-denominated corporate bonds); and U.S. bank loans.
(6) Comprised of investments in securities of U.S. and non-U.S. real estate investment trusts (REITs), real estate operating companies and other companies that are principally engaged in the real estate industry and of investments in global private direct commercial real estate. Investments can be redeemed immediately following the valuation date with a notice of at least fifteen business days before valuation.
(7) Comprised of investments that are measured at fair value using the NAV per share practical expedient. In accordance with the provisions of ASC 820-10, these investments have not been classified in the fair value hierarchy. The fair value amount not leveled is presented to allow reconciliation of the fair value hierarchy to total fund pension plan assets.

                                     | As of December 31, |
------------------------------------ | ------------------ | --------
                                     | 2019               | 2018
Equity securities - U.S. holdings(1) | $24,586            | $20,469
Equity funds - U.S. holdings(1) (7)  | —                  | 54
Bond funds - government(4) (7)       | 33,991             | 19,146
Bond funds - other(5) (7)            | 207,901            | 202,393
Real estate(6) (7)                   | 2,979              | 2,652
Cash and cash equivalents(2)         | 5,700              | 5,866
Partnerships(3)                      | 7,539              | 9,172
Total fair value of plan assets      | $282,696           | $259,752


(5) Earnings Per Share
Basic earnings per share is computed by dividing Net earnings attributable to Black Knight by the weighted-average number of shares of common stock outstanding during the period.
For the periods presented, potentially dilutive securities include unvested restricted stock awards and the shares of BKFS Class B common stock prior to the Distribution. For the year ended December 31, 2017, the numerator in the diluted net earnings per share calculation is adjusted to reflect our income tax expense at an expected effective tax rate assuming the conversion of the shares of BKFS Class B common stock into shares of BKFS Class A common stock on a one-for-one basis prior to the Distribution. The effective tax rate for the year ended December 31, 2017 was (16.7)%, including the effect of the benefit related to the revaluation of our net deferred income tax liability and certain other discrete items recorded during 2017. For the year ended December 31, 2017, the denominator includes approximately 63.1 million shares of BKFS Class B common stock outstanding prior to the Distribution. The denominator also includes the dilutive effect of approximately 0.9 million, 0.6 million and 0.6 million shares of unvested restricted shares of common stock for the years ended December 31, 2019, 2018 and 2017, respectively.
The shares of BKFS Class B common stock did not share in the earnings or losses of Black Knight and were, therefore, not participating securities. Accordingly, basic and diluted net earnings per share of BKFS Class B common stock have not been presented.
The computation of basic and diluted earnings per share is as follows (in millions, except per share amounts):

                                                                               |        | Year ended December 31, |
------------------------------------------------------------------------------ | ------ | ----------------------- | ------
                                                                               | 2019   | 2018                    | 2017
Basic:                                                                         |        |                         |
Net earnings attributable to Black Knight                                      | $108.8 | $168.5                  | $182.3
Shares used for basic net earnings per share:                                  |        |                         |
Weighted average shares of common stock outstanding                            | 147.7  | 147.6                   | 88.7
Basic net earnings per share                                                   | $0.74  | $1.14                   | $2.06
Diluted:                                                                       |        |                         |
Earnings before income taxes and equity in losses of unconsolidated affiliates |        |                         | $192.4
Income tax benefit excluding the effect of noncontrolling interests            |        |                         | (32.2)
Net earnings                                                                   |        |                         | $224.6
Net earnings attributable to Black Knight                                      | $108.8 | $168.5                  |
Shares used for diluted net earnings per share:                                |        |                         |
Weighted average shares of common stock outstanding                            | 147.7  | 147.6                   | 88.7
Dilutive effect of unvested restricted shares of common                        |        |                         |
stock                                                                          | 0.9    | 0.6                     | 0.6
Weighted average shares of BKFS Class B common stock outstanding               | —      | —                       | 63.1
Weighted average shares of common stock, diluted                               | 148.6  | 148.2                   | 152.4
Diluted net earnings per share                                                 | $0.73  | $1.14                   | $1.47


Revenue stream
The Company generates revenue primarily from the sales of equipment and sales of spares & service. The products and services described by nature in Note 1, can be part of all revenue streams.
The proceeds resulting from the patent litigation & arbitration settlements (€159 million) are included in the equipment revenue stream.

                         | Year ended December 31, |
------------------------ | ----------------------- | ---------
(EUR thousand)           | 2018                    | 2019
Equipment revenue        | 631,504                 | 1,068,645
Spares & service revenue | 186,577                 | 215,215
Total                    | 818,081                 | 1,283,860


The Company continually reviews the adequacy of our valuation allowance and recognizes the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be realized in accordance with ASC 740, Income Taxes. Due to our recent decrease in revenue and profitability for 2019, and all other positive and negative objective evidence considered as part of our analysis, our ability to consider other subjective evidence such as projections for future growth is limited when evaluating whether our deferred tax assets will be realized. As such, the Company was no longer able to conclude that it was more likely than not that our domestic deferred tax assets would be realized and a valuation allowance against our domestic deferred tax assets was established in the third quarter of 2019. The amount of the deferred tax assets considered realizable may be adjusted in future periods in the event that sufficient evidence is present to support a conclusion that it is more likely than not that all or a portion of our domestic deferred tax assets will be realized.
As of December 31, 2019, the Company had gross deferred tax assets totaling $56.2 million offset by a valuation allowance totaling $48.6 million. Of the valuation allowance, $42.8 million was established in the current year primarily related to our domestic deferred tax assets. The remaining $5.8 million established in prior periods related to state research and development credit carryforwards and foreign net operating loss and research and development credit carryforwards where we lack sufficient activity to realize those deferred tax assets. The remaining $7.6 million in deferred tax assets that were not offset by a valuation allowance are located in various foreign jurisdictions where the Company believes it is more likely than not we will realize these deferred tax assets.
Supplemental balance sheet information related to deferred tax assets is as follows:
As of December 31, 2019 and 2018, the deferred tax assets for foreign and domestic loss carry-forwards, research and development tax credits, unamortized research and development costs and state credit carryforwards totaled $41.3 million and $28.8 million, respectively. As of December 31, 2019, $19.1 million of these deferred tax assets will expire at various times between 2020 and 2039. The remaining deferred tax assets will either amortize through 2029 or carryforward indefinitely.
As of December 31, 2019 and 2018, respectively, our cash and cash equivalents were $73.8 million and $105.5 million and short-term investments were $33.2 million and $3.2 million, which provided available short-term liquidity of $107.0 million and $108.7 million. Of these amounts, our foreign subsidiaries held cash of $52.3 million and $87.1 million, respectively, representing approximately 48.9% and 80.1% of available short-term liquidity, which is used to fund on-going liquidity needs of these subsidiaries. We intend to permanently reinvest these funds outside the U.S. except to the extent any of these funds can be repatriated without withholding tax and our current business plans do not indicate a need to repatriate to fund domestic operations. However, if all of these funds were repatriated to the U.S. or used for U.S. operations, certain amounts could be subject to tax. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practical to determine the amount of funds subject to unrecognized deferred tax liability.
During 2019, 2018 and 2017, no income tax benefit or expense was recorded for stock options exercised as an adjustment to equity.

               |                     |                     | December 31, 2019
-------------- | ------------------- | ------------------- | ------------------------
(In thousands) | Deferred Tax Assets | Valuation Allowance | Deferred Tax Assets, net
Domestic       | $46,266             | $(46,266)           | $ —
International  | 9,911               | (2,350)             | 7,561
Total          | $56,177             | $(48,616)           | $7,561


Liquidity risk
Our policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.
Our liquidity needs are affected by many factors, some of which are based on the normal on-going operations of the business, and others that relate to the uncertainties of the global economy and the semiconductor industry. Although our cash requirements fluctuate based on the timing and extent of these factors, we believe that cash generated from operations, together with our principal sources of liquidity are sufficient to satisfy our current requirements, including our expected capital expenditures in 2020.
We intend to return cash to our shareholders on a regular basis in the form of dividend payments and, subject to our actual and anticipated liquidity requirements and other relevant factors, share buybacks.
The following table summarizes the Company’s contractual and other obligations as at December 31, 2019.
Total short-term lines of credit amounted to €150 million at December 31, 2019. The amount outstanding at December 31, 2019 was nil and the undrawn portion totaled €150 million. The standby revolving credit facility of €150 million with a consortium of banks will be available through December 16, 2023.
For the majority of purchase commitments, the Company has flexible delivery schedules depending on the market conditions, which allows the Company, to a certain extent, to delay delivery beyond originally planned delivery schedules.

                                          | Total   | Less than 1 year | 1-5 years | More than 5 years
----------------------------------------- | ------- | ---------------- | --------- | -----------------
Accounts payable                          | 119,712 | 119,712          | —         | —
Income tax payable                        | 34,599  | 34,599           | —         | —
Accrued expenses and other payables       | 149,843 | 149,843          | —         | —
Lease liabilities                         | 24,261  | 6,977            | 14,726    | 2,558
Pension liabilities                       | 7,734   | 333              | 2,544     | 4,857
Purchase obligations:                     |         |                  |           |
Purchase commitments to suppliers         | 100,694 | 99,546           | 1,148     | —
Capital expenditure and other commitments | 43,692  | 40,745           | 2,947     | —
Total contractual obligations             | 480,535 | 451,755          | 21,365    | 7,415