Utilization of the net operating loss and tax credit carry forwards are subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of the net operating loss before utilization. The Company does not expect the limitation to result in a reduction in the total amount utilizable.
The Company is subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. As of December 31, 2019 and 2018, the Company had $67.0 million and $41.2 million of unrecognized tax benefits, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
At December 31, 2019, the total amount of gross unrecognized tax benefits was $67.0 million, of which $31.9 million would affect the Company’s effective tax rate if recognized. The Company does not have any tax positions as of December 31, 2019 for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within the following 12 months. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2019 and 2018, respectively, the Company has accrued $5.2 million and $3.1 million related to interest and penalties, respectively.
The material jurisdictions in which the Company is subject to potential examination include the United States and Ireland. The Company believes that adequate amounts have been reserved for these jurisdictions. For the United States, the Company is currently under examination by the Internal Revenue Service ("IRS") for fiscal 2015 to 2017. For state and non-U.S. tax returns, the Company is generally no longer subject to tax examinations for years prior to 2014.

                                                         |         | December 31, |
-------------------------------------------------------- | ------- | ------------ | -------
                                                         | 2019    | 2018         | 2017
Balance at beginning of year                             | $41,198 | $29,938      | $35,584
Reductions based on tax positions related to prior year  | (207)   | (820)        | (6,335)
Additions based on tax positions related to prior year   | 9,562   | 263          | 108
Additions based on tax positions related to current year | 16,517  | 11,860       | 9,289
Reductions due to tax authorities’ settlements           | —       | (43)         | (8,603)
Reductions due to expiration of statutes of limitation   | (45)    | —            | (105)
Balance at end of year                                   | $67,025 | $41,198      | $29,938


Cost of Services Cost of services decreased $204 million, or 1.9%, during 2019 compared to 2018, primarily due to lower access costs resulting from a decline in voice connections, as well as lower employee-related costs associated with the lower headcount resulting from the Voluntary Separation Program, offset by an increase in regulatory fees.
Cost of Wireless Equipment Cost of wireless equipment increased $173 million, or 3.8%, during 2019 compared to 2018, primarily driven by a shift to higher priced units in the mix of wireless devices sold and an increase in the number of wireless devices sold.
Selling, General and Administrative Expense Selling, general and administrative expense increased $499 million, or 6.5%, during 2019 compared to 2018, due to increases in advertising expenses and sales commission expense, which were partially offset by decreases in employee-related costs resulting from the Voluntary Separation Program. The increase in sales commission expense was primarily due to a lower net deferral of commission costs in 2019 as compared to 2018 as a result of the adoption of Topic 606 on January 1, 2018 using a modified retrospective approach.
Depreciation and Amortization Expense Depreciation and amortization expense decreased $153 million, or 3.6%, during 2019 compared to 2018, driven by the change in the mix of total Verizon depreciable assets and Business’s usage of those assets.

                                             |          |          | (dollars in millions) Increase/ (Decrease) |
-------------------------------------------- | -------- | -------- | ------------------------------------------ | ------
Years Ended December 31,                     | 2019     | 2018     | 2019 vs. 2018                              |
Cost of services                             | $10,655  | $10,859  | $(204)                                     | (1.9)%
Cost of wireless equipment                   | 4,733    | 4,560    | 173                                        | 3.8
Selling, general and administrative expense  | 8,188    | 7,689    | 499                                        | 6.5
Depreciation and amortization expense        | 4,105    | 4,258    | (153)                                      | (3.6)
Total Operating Expenses                     | $ 27,681 | $ 27,366 | $ 315                                      | 1.2


30. EMPLOYEE BENEFIT PLANS (cont.)
The fair value of the plan assets were allocated as follows between the various types of investments:
Plan assets are valued at the measurement date of December 31 each year.
The investments are made in accordance with the Statement of Investment Policies and Procedures. The Statement of Investment Policies and Procedures is reviewed on an annual basis by the Management Level Pension Fund Investment Committee with approval of the policy being provided by the Audit Committee.

As at December 31,                       | 2019  | 2018
---------------------------------------- | ----- | -----
Equity securities                        |       |
Canada                                   | 22.3% | 20.8%
United States                            | 19.8% | 12.7%
International (other than United States) | 14.1% | 18.1%
Fixed income instruments                 |       |
Canada                                   | 41.2% | 45.7%
Cash and cash equivalents                |       |
Canada                                   | 2.6%  | 2.7%


Key Operating Metrics and Non-GAAP Financial Measures
We collect and analyze operating and financial data to evaluate the health of our business, allocate our

resources, and assess our performance. In addition to revenue, net loss, and other results under  generally accepted accounting principles (GAAP), the following table sets forth key operating metrics and non-GAAP financial measures we use to evaluate our business. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business, and to facilitate comparisons of our performance to that of other payment processors. Each of these metrics and measures excludes the effect of our processing agreement with Starbucks which transitioned to another payments solutions provider in the fourth quarter of 2016. As we do not expect transactions with Starbucks to recur, we believe it is useful to exclude Starbucks activity to clearly show the impact Starbucks has had on our financial results historically. Our agreements with other sellers generally provide both those sellers and us the unilateral right to terminate such agreements at any time, without fine or

penalty.
Gross Payment Volume (GPV)
We define GPV as the total dollar amount of all card payments processed by sellers using Square, net of refunds. Additionally, GPV includes Cash App activity related to peer-to-peer payments sent from a credit card and Cash for Business. As described above, GPV excludes card payments processed for Starbucks
Adjusted Revenue
Adjusted Revenue is a non-GAAP financial measure that we define as our total net revenue less transaction-based costs and bitcoin costs, and we add back the impact of the acquired deferred revenue adjustment, which was written down to fair value in purchase. This measure is also adjusted to eliminate the effect of activity with Starbucks, which ceased using our payments solutions altogether in the fourth quarter of 2016, and we believe that providing Adjusted Revenue metrics that exclude the impact of our agreement with Starbucks is useful to investors.

                                        |            |          | Year Ended December 31,                           |           |
--------------------------------------- | ---------- | -------- | ------------------------------------------------- | --------- | ---------
                                        | 2018       | 2017     | 2016                                              | 2015      | 2014
                                        |            |          | (in thousands, except for GPV and per share data) |           |
Gross Payment Volume (GPV)(in millions) | $84,654    | $65,343  | $49,683                                           | $35,643   | $23,780
Adjusted Revenue                        | $1,587,641 | $983,963 | $686,618                                          | $452,168  | $276,310
Adjusted EBITDA                         | $256,523   | $139,009 | $44,887                                           | $(41,115) | $(67,741)
Adjusted Net Income (Loss) Per Share:   |            |          |                                                   |           |
Basic                                   | $0.55      | $0.30    | $0.04                                             | $(0.39)   | $(0.62)
Diluted                                 | $0.47      | $0.27    | $0.04                                             | $(0.39)   | $(0.62)


Assumptions
Weighted average actuarial assumptions used to determine costs for the plans for each period were as follows:
The weighted-average expected long-term rate of return for the plan assets is 3.3%. The weighted-average expected longterm rate of return on plan assets is based on the interest rates guaranteed under the insurance contracts, and the expected rate of return appropriate for each category of assets weighted for the distribution within the diversified investment fund. The assumptions used for the plans are based upon customary rates and practices for the location of the plans. Factors such as asset class allocations, long-term rates of return (actual and expected), and results of periodic asset liability modeling studies are considered when constructing the long-term rate of return assumption for our defined benefit pension plans.

                                                 |      | Fiscal Year Ended January 31, |
------------------------------------------------ | ---- | ----------------------------- | ----
                                                 | 2019 | 2018                          | 2017
Discount rate                                    | 2.5% | 2.4%                          | 3.2%
Expected long-term rate of return on plan assets | 3.3% | 3.3%                          | 4.3%
Rate of compensation increase                    | 2.3% | 2.3%                          | 2.2%


Golden Ridge
In November 2018, we acquired substantially all of the assets comprising the business of Golden Ridge Rice Mills, LLC, now conducting business as Golden Ridge Rice Mills, Inc. (Golden Ridge). The primary activity of the business is the operation of a rice mill in Wynne, Arkansas. We acquired the business as part of our strategy to vertically integrate in order to leverage our proprietary technologies for producing SRB and derivative products. The acquisition has been accounted for as a business combination. The results of Golden Ridge’s operations are included in our consolidated financial statements beginning November 28, 2018. In 2018, we incurred $0.1 million of Golden Ridge acquisition-related costs which are included in selling, general and administrative expenses.
The purchase price for Golden Ridge was subject to adjustment if the estimated working capital with respect to the assets purchased and the liabilities assumed at the time of closing was different than the actual closing working capital, as defined in the purchase agreement. We revised our preliminary estimate of the working capital adjustment as indicated in the table below. The following table summarizes the purchase price allocation as of closing and as revised (in thousands, except share and per share amounts).
The 1,666,667 shares issued at closing of our purchase of Golden Ridge included 380,952 shares that were deposited in an escrow account to be used to satisfy any indemnification obligations of the seller that may arise. As of December 31, 2018, the 380,952 shares remained in escrow. In July 2019, we reached an agreement to settle the $0.6 million working capital adjustment receivable and other claims with the sellers of Golden Ridge. As a result, (i) 340,000 shares of common stock held in the escrow account ($1.0 million fair value as of both the settlement date and the November 28, 2018, acquisition date) were returned to us and retired, (ii) the remaining $0.4 million note payable we owed to a seller was cancelled and (iii) certain open grain purchase contracts with entities related to a seller were terminated. We recorded a gain on the noncash settlement of $0.8 million in the third quarter of 2019, which is included in other income. In connection with the foregoing, a settlement agreement was entered into among the parties. All shares of common stock were distributed and the escrow agreement was terminated.

                                                                               | Estimated at Acquisition and as of December 31, 2018 | Adjustments                | Final as of December 31, 2019
------------------------------------------------------------------------------ | ---------------------------------------------------- | -------------------------- | -----------------------------
1,666,667 shares of common stock, at fair value of $3.00 per share at closing  | $                          5,000                     | $                        - | $                      5,000
Golden Ridge financial liabilities paid for the seller                         | 2,661                                                | -                          | 2,661
Cash                                                                           | 250                                                  | -                          | 250
Note payable to seller                                                         | 609                                                  | -                          | 609
Working capital adjustment to purchase price                                   | (1,147)                                              | 584                        | (563)
Total fair value of consideration transferred                                  | 7,373                                                | 584                        | 7,957
Cash                                                                           | 409                                                  | (63)                       | 346
Accounts receivable                                                            | 1,587                                                | 87                         | 1,674
Inventories                                                                    | 103                                                  | -                          | 103
Property and equipment                                                         | 5,092                                                | -                          | 5,092
Accounts payable                                                               | (222)                                                | 110                        | (112)
Commodities payable                                                            | (2,559)                                              | 432                        | (2,127)
Accrued liabilities                                                            | (12)                                                 | 12                         | -
Lease liabilities                                                              | (104)                                                | -                          | (104)
Equipment notes payable                                                        | (99)                                                 | 6                          | (93)
Net recognized amounts of identifiable assets acquired and liabilities assumed | 4,195                                                | 584                        | 4,779
Goodwill                                                                       | $ 3,178                                              | $                      -   | $ 3,178


Restricted Stock Units
A summary of the RSU transactions for the year ended December 31, 2019 are as follows (number of shares in millions):
During 2019, the Company awarded 2.6 million RSUs to certain officers and employees of the Company that vest upon the achievement of certain performance criteria and market conditions. The number of units expected to vest is evaluated each reporting period and compensation expense is recognized for those units for which achievement of the performance criteria is considered probable. Compensation expense for RSUs with market conditions are recognized based on the grant date fair value irrespective of the achievement of the condition.
As of December 31, 2019, unrecognized compensation expense, net of estimated forfeitures related to non-vested RSUs granted under the Amended and Restated SIP with service, performance and market conditions, was $60.9 million, $10.1 million and $3.9 million, respectively.
For RSUs with time-based service conditions, expense is being recognized over the vesting period; for RSUs with performance criteria, expense is recognized over the period during which the performance criteria is expected to be achieved; for RSUs with market conditions expense is recognized over the period in which the condition is assessed irrespective of whether it would be achieved or not.
Unrecognized compensation cost related to awards with certain performance criteria that are not expected to be achieved is not included here. Total compensation expense related to performance-based, service-based, and market-based RSUs was $69.8 million for the year ended December 31, 2019, which included $48.4 million for RSUs with time-based service conditions that were granted in 2019 and prior that are expected to vest.

                                              | Number of Shares | Weighted-Average Grant
Date Fair Value
--------------------------------------------- | ---------------- | --------------------------------------
Nonvested shares of RSUs at December 31, 2018 | 8.6              | $16.59
Granted                                       | 5.4              | 21.64
Achieved                                      | 0.2              | 24.46
Released                                      | (4.8)            | 14.41
Canceled                                      | (0.5)            | 19.74
Nonvested shares of RSUs at December 31, 2019 | 8.9              | 20.84


Selected Quarterly Financial Data (Unaudited)
Selected quarterly financial data is as follows (in millions, except per share amounts):
(1) In the quarter ended January 26, 2018, our provision for income taxes included significant charges attributable to United States tax reform.
(2) The quarters of fiscal 2018 have been adjusted for our retrospective adoption of the new accounting standard Revenue from Contracts with Customers (ASC 606).

                                     |               |                  | Quarter Ended (2) |
------------------------------------ | ------------- | ---------------- | ----------------- | --------------
                                     | July 28, 2017 | October 27, 2017 | January 26, 2018  | April 27, 2018
Net revenues                         | $ 1,321       | $ 1,415          | $ 1,539           | $ 1,644
Gross profit                         | $ 824         | $ 900            | $ 956             | $ 1,029
Provision for income taxes (1)       | $ 14          | $ 48             | $ 983             | $ 38
Net income (loss)                    | $ 131         | $ 174            | $(479 )           | $ 290
Net income (loss) per share, basic   | $ 0.49        | $ 0.65           | $(1.79 )          | $ 1.09
Net income (loss) per share, diluted | $ 0.47        | $ 0.63           | $(1.79 )          | $ 1.06


The following table details the Company’s sales by operating segment for fiscal years ended September 30, 2019 and 2018. The Company’s sales by geographic area based on the location of where the products were shipped or services rendered are as follows:
Substantially all Americas amounts are United States.

2019       | Americas | Europe                 | Asia   | Total   | % of total
---------- | -------- | ---------------------- | ------ | ------- | ----------
           |          | (Amounts in thousands) |        |         |
TS         | $67,728  | $3,285                 | $646   | $71,159 | 90%
HPP        | 5,294    | 771                    | 1,837  | 7,902   | 10%
Total      | $72,522  | $4,056                 | $2,483 | $79,061 | 100%
% of total | 92%      | 5%                     | 3%     | 100%    |
2018       |          |                        |        |         |
TS         | $52,034  | $9,059                 | $1,344 | $62,437 | 86%
HPP        | 8,424    | 1,266                  | 789    | 10,479  | 14%
Total      | $60,458  | $10,325                | $2,133 | $72,916 | 100%
% of total | 83%      | 14%                    | 3%     | 100%    |


The Company has adopted five share option schemes, namely, the Pre-IPO Option Scheme, the Post-IPO Option Scheme I, the Post-IPO Option Scheme II, the Post-IPO Option Scheme III and the Post-IPO Option Scheme IV. The Pre-IPO Option Scheme, the Post-IPO Option Scheme I, the Post-IPO Option Scheme II and the Post-IPO Option Scheme III expired on 31 December 2011, 23 March 2014, 16 May 2017 and 13 May 2019 respectively.
As at 31 December 2019, there were a total of 20,722,380 outstanding share options granted to a director of the Company, details of which are as follows:
1. For options granted with exercisable date determined based on the grant date of options, the first 20% of the total options can be exercised 1 year after the grant date, and each 20% of the total options will become exercisable in each subsequent year.
2. For options granted with exercisable date determined based on the grant date of options, the first 25% of the total options can be exercised 1 year after the grant date, and each 25% of the total options will become exercisable in each subsequent year.
3. The closing price immediately before the date on which the options were granted on 4 April 2019 was HKD378.
4. No options were cancelled or lapsed during the year.

                    |               |                      | Number of share options |                           |                        |                |
------------------- | ------------- | -------------------- | ----------------------- | ------------------------- | ---------------------- | -------------- | ---------------------------------------
Name of director    | Date of grant | As at 1 January 2019 | Granted during the year | Exercised during the year | As at 31 December 2019 | Exercise price | Exercise period
                    |               |                      |                         |                           |                        | HKD            |
Lau Chi Ping Martin | 25 March 2014 | 5,000,000            | -                       | -                         | 5,000,000              | 114.52         | 25 March 2015 to 24 March 2021 (Note 2)
                    | 21 March 2016 | 3,750,000            | -                       | -                         | 3,750,000              | 158.10         | 21 March 2017 to 20 March 2023 (Note 2)
                    | 24 March 2017 | 5,250,000            | -                       | -                         | 5,250,000              | 225.44         | 24 March 2018 to 23 March 2024 (Note 2)
                    | 9 April 2018  | 3,215,800            | -                       | -                         | 3,215,800              | 410.00         | 9 April 2019 to 8 April 2025 (Note 2)
                    | 4 April 2019  | -                    | 3,506,580 (Note 3)      | -                         | 3,506,580              | 376.00         | 4 April 2020 to 3 April 2026 (Note 2)
                    | Total:        | 17,215,800           | 3,506,580               | -                         | 20,722,380             |                |


The aggregate cash payments required to be paid on or about the closing date were funded with the proceeds of $7.945 billion of term loans and $400 million of funds borrowed under our revolving credit facility together with other available funds, which included $1.825 billion borrowed from Level 3 Parent, LLC. For additional information regarding CenturyLink’s financing of the Level 3 acquisition see Note 7—Long-Term Debt and Credit Facilities.
We recognized the assets and liabilities of Level 3 based on the fair value of the acquired tangible and intangible assets and assumed liabilities of Level 3 as of November 1, 2017, the consummation date of the acquisition, with the excess aggregate consideration recorded as goodwill. The estimation of such fair values and the estimation of lives of depreciable tangible assets and amortizable intangible assets required significant judgment. We completed our final fair value determination during the fourth quarter of 2018, which differed from those reflected in our consolidated financial statements at December 31, 2017.
In connection with receiving approval from the U.S. Department of Justice to complete the Level 3 acquisition we agreed to divest certain Level 3 network assets. All of those assets were sold by December 31, 2018. The proceeds from these sales were included in the proceeds from sale of property, plant and equipment in our consolidated statements of cash flows. No gain or loss was recognized with these transactions.
As of October 31, 2018, the aggregate consideration exceeded the aggregate estimated fair value of the acquired assets and assumed liabilities by $11.2 billion, which we have recognized as goodwill. The goodwill is attributable to strategic benefits, including enhanced financial and operational scale, market diversification and leveraged combined networks that we expect to realize. None of the goodwill associated with this acquisition is deductible for income tax purposes.
The following is our assignment of the aggregate consideration:
(1) Includes accounts receivable, which had a gross contractual value of $884 million on November 1, 2017 and October 31, 2018.
(2) The weighted-average amortization period for the acquired intangible assets is approximately 12.0 years.
On the acquisition date, we assumed Level 3’s contingencies. For more information on our contingencies, see Note 19—Commitments, Contingencies and Other Items.

                                                                    | Adjusted November 1, 2017 Balance as of December 31, 2017 | Purchase Price Adjustments | Adjusted November 1, 2017 Balance as of October 31, 2018
------------------------------------------------------------------- | --------------------------------------------------------- | -------------------------- | --------------------------------------------------------
                                                                    |                                                           | (Dollars in millions)      |
Cash,accounts receivable and other current assets(1)                | $3,317                                                    | (26)                       | 3,291
Property, plant and equipment                                       | 9,311                                                     | 157                        | 9,468
Identifiable intangible assets(2)                                   |                                                           |                            |
Customer relationships                                              | 8,964                                                     | (533)                      | 8,431
Other                                                               | 391                                                       | (13)                       | 378
Other non current assets                                            | 782                                                       | 216                        | 998
Current liabilities, excluding current maturities of long-term debt | (1,461)                                                   | (32)                       | (1,493)
Current maturities of long-term debt                                | (7)                                                       | —                          | (7)
Long-term debt                                                      | (10,888)                                                  | —                          | (10,888)
Deferred revenue and other liabilities                              | (1,629)                                                   | (114)                      | (1,743)
Goodwill                                                            | 10,837                                                    | 340                        | 11,177
Total estimated aggregate consideration                             | $19,617                                                   | (5)                        | 19,612


Fiscal 2018 Acquisitions
Allocation of the purchase consideration for acquisitions completed in fiscal 2018 is summarized as follows (in millions):
On July 31, 2017, we completed our acquisition of privately held Viptela Inc. (“Viptela”), a provider of software-defined wide area networking products. Revenue from the Viptela acquisition has been included in our Infrastructure Platforms product category.
On September 22, 2017, we completed our acquisition of privately held Springpath, Inc. (“Springpath”), a hyperconvergence software company. Revenue from the Springpath acquisition has been included in our Infrastructure Platforms product category.
On February 1, 2018, we completed our acquisition of publicly held BroadSoft, Inc. (“BroadSoft”), a cloud calling and contact center solutions company. Revenue from the BroadSoft acquisition has been included in our Applications product category.
On May 10, 2018, we completed our acquisition of privately held Accompany, a provider of an AI-driven relationship intelligence platform. Results from the Accompany acquisition has been included in our Applications product category.
The total purchase consideration related to our acquisitions completed during fiscal 2018 consisted of cash consideration and vested share-based awards assumed. The total cash and cash equivalents acquired from these acquisitions was approximately $187 million.

Fiscal 2018            | Purchase Consideration | Net Tangible Assets Acquired (Liabilities Assumed) | Purchased Intangible Assets | Goodwill
---------------------- | ---------------------- | -------------------------------------------------- | --------------------------- | --------
Viptela                | $497                   | $(18)                                              | $180                        | $335
Springpath             | 248                    | (11)                                               | 160                         | 99
BroadSoft              | 2,179                  | 353                                                | 430                         | 1,396
Accompany              | 222                    | 6                                                  | 55                          | 161
Others (four in total) | 72                     | 4                                                  | 42                          | 26
Total                  | $3,218                 | $334                                               | $867                        | $2,017


The following table reconciles the theoretical corporation tax expense to the reported tax expense using the UK corporation tax rate. The reconciling items represent the impact of rate differentials in tax jurisdictions and the impact of non-taxable benefits and non-deductible expenses arising from differences between the local tax base and the reported Financial Statements.
The Group’s taxation strategy is published at www.sophos.com/en-us/medialibrary/PDFs/legal/sophos-group-tax-poli
The Group’s taxation strategy is published at www.sophos.com/en-us/medialibrary/PDFs/legal/sophos-group-tax-policyfy19. pdf and is aligned to its business strategy and operational needs. Oversight of taxation is within the remit of the Audit and Risk Committee. The Chief Financial Officer is responsible for tax strategy supported by a global team of tax professionals. Sophos strives for an open and transparent relationship with all revenue authorities and is vigilant in ensuring that the Group complies with current tax legislation. The Group proactively seeks to agree arm’s length pricing with tax authorities to mitigate tax risks of significant cross-border operations. The Group actively engages with policy makers, tax administrators, industry bodies and international institutions to provide informed input on proposed tax measures, so that it and they can understand how those proposals would affect the Group. However, a tax authority may seek adjustment to the filing position adopted by a Group company and it is accepted that interpretation of complex regulations may lead to additional tax being assessed. Uncertain tax positions are monitored regularly and a provision made in the accounts where appropriate.

                                                                                | Year-ended 31 March 2019 | Year-ended 31 March 2018 Restated See note 2
----------------------------------------------------------------------------------------------------------------- | ------------------------ | --------------------------------------------
                                                                                | $M                       | $M
Profit / (loss) for the year before taxation                                                                      | 53.6                     | (41.0)
Loss for the year before taxation multiplied by the standard rate of corporation tax in the UK of 19% (2018: 19%) | 10.2                     | (7.7)
Effects of:                                                                                |                          |
Adjustments in respect of previous years                                                                          | 0.8                      | 7.1
Change in tax rate during the year                                                                                | 1.4                      | 3.6
Expenses not deductible for tax purposes                                                                          | 11.8                     | 9.4
Losses not recognised                                                                                | (0.9)                    | –
Higher tax rates on overseas earnings                                                                             | 7.7                      | 3.8
Research and development and other tax credits                                                                    | (1.9)                    | (0.6)
Impact of US tax reform on deferred tax                                                                           | –                        | 5.4
Other movements                                                                                | (2.4)                    | (1.1)
Charge for taxation on profit / (loss) for the year                                                               | 26.7                     | 19.9


This section highlights the Group’s transactions with its related parties, such as its subsidiaries and Key Management Personnel.
During the reporting period and previous reporting periods, Woolworths Group Limited advanced loans to, received and repaid loans from, and provided treasury, accounting, legal, taxation, and administrative services to other entities within the Group.
Entities within the Group also exchanged goods and services in sale and purchase transactions. All transactions occurred on the basis of normal commercial terms and conditions. Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.
All transactions with directors and Key Management Personnel (including their related parties) were conducted on an arm’s length basis in the ordinary course of business and under normal terms and conditions for customers and employees. Related parties of Key Management Personnel who are employees received normal employee benefits on standard terms and conditions.
The total remuneration for Key Management Personnel of the Group is as follows:
Details of equity instruments provided as compensation to Key Management Personnel and shares issued on exercise of these instruments, together with the terms and conditions of the instruments, are disclosed in the Remuneration Report.

                             | 2019       | 2018
---------------------------- | ---------- | ----------
                             | $          | $
Short-term employee benefits | 12,175,184 | 14,217,931
Post employment benefits     | 322,733    | 297,319
Other long-term benefits     | 161,569    | 139,776
Share-based payments         | 9,177,425  | 6,594,300
                             | 21,836,911 | 21,249,326


6. Inventories
Inventories at April 30, 2019 and 2018, respectively, consisted of the following (in thousands):
For the year ended April 30, 2018, the Company recorded a non-cash write-down of approximately $5.6 million of inventory. Inventory write-down resulted from two principal factors: (1) adoption by satellite manufacturers of policies precluding the use of parts and components over ten years old. This policy was unanticipated and resulted in reduced likelihood of FEI being able to use inventory that exceeds that threshold, and (2) changing technology associated with the advanced analog-to-digital converters which enables direct synthesis of certain frequencies for which FEI previously provided frequency conversion technology, reducing the likelihood that some parts and components associated with frequency conversion will be usable. Additionally, the Company’s new inventory reserve policy resulted in a charge of $1.1 million in the fiscal year ended April 30, 2019. Inventory reserves included in inventory were $6.6 million and $5.5 million for the fiscal years ended April 30, 2019 and 2018, respectively.

                                  | 2019    | 2018
--------------------------------- | ------- | --------
Raw Materials and Component Parts | $11,600 | $ 16,206
Work in Progress                  | 8,896   | 8,216
Finished Goods                    | 2,860   | 1,764
                                  | $23,356 | $ 26,186


GasLog Ltd. and its Subsidiaries
Notes to the consolidated financial statements (Continued)
For the years ended December 31, 2017, 2018 and 2019
(All amounts expressed in thousands of U.S. Dollars, except share and per share data)
22. Share-Based Compensation (Continued)
Movement in RCUs and PCUs
The summary of RCUs and PCUs is presented below:
The total expense recognized in respect of share-based compensation for the year ended December 31, 2019 was $5,107 (December 31, 2018: $5,216 and December 31, 2017: $4,565). The total accrued cash distribution as of December 31, 2019 is $1,176 (December 31, 2018: $1,265).

                                    | Number of awards | Weighted average contractual life | Aggregate fair value
----------------------------------- | ---------------- | --------------------------------- | --------------------
RCUs                                |                  |                                   |
Outstanding as of January 1, 2018   | 67,475           | 1.38                              | 1,429
Granted during the year             | 24,608           | —                                 | 576
Vested during the year              | (16,999)         | —                                 | (410)
Outstanding as of December 31, 2018 | 75,084           | 1.25                              | 1,595
Granted during the year             | 26,308           | —                                 | 605
Vested during the year              | (24,925)         | —                                 | (410)
Outstanding as of December 31, 2019 | 76,467           | 1.26                              | 1,790
PCUs                                |                  |                                   |
Outstanding as of January 1, 2018   | 67,475           | 1.38                              | 1,429
Granted during the year             | 24,608           | —                                 | 576
Vested during the year              | (16,999)         | —                                 | (410)
Outstanding as of December 31, 2018 | 75,084           | 1.25                              | 1,595
Granted during the year             | 26,308           | —                                 | 605
Vested during the year              | (24,925)         | —                                 | (410)
Outstanding as of December 31, 2019 | 76,467           | 1.26                              | 1,790


Diluted earnings per share. Diluted earnings per share for fiscal 2019 and 2018, as well as information as to the effects of special events that occurred in the indicated periods, as previously discussed and detailed below, were as follows (dollars in millions):
(1) We believe the non-GAAP presentation of diluted earnings per share excluding special tax items, consisting of those related to Tax Reform and a change in our permanent reinvestment assertions related to undistributed earnings of two foreign subsidiaries, as well as restructuring costs and the one-time employee bonus, provide additional insight over the change from the comparative reporting periods by eliminating the effects of special or unusual items. In addition, the Company believes that its diluted earnings per share, as adjusted, enhances the ability of investors to analyze the Company’s operating performance and supplements, but does not replace, its diluted earnings per share calculated in accordance with U.S. GAAP.
Diluted earnings per share increased to $3.50 in fiscal 2019 from $0.38 in fiscal 2018 primarily as a result of increased net income due to the factors discussed above and a reduction in diluted shares outstanding due to repurchase activity under the Company's stock repurchase plans.

                                                       | 2019   | 2018
------------------------------------------------------ | ------ | -----
Diluted earnings per share, as reported (GAAP)         | $3.50  | $0.38
Restructuring costs, net of tax                        | 0.05   | —
U.S. Tax Reform                                        | 0.23   | 2.46
Accumulated foreign earnings assertion                 | (0.35) |
One-time employee bonus, net of tax                    | —      | 0.39
Diluted earnings per share, as adjusted (non-GAAP) (1) | $3.43  | $3.23


NOTE 5—PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consists of the following as of December 31, 2019 and 2018:
Depreciation for the years ended December 31, 2019 and December 31, 2018 was $870,000 and $704,000, respectively. Cost basis of assets disposed for the years ended December 31, 2019 and December 31, 2018 was $31,000 and $773,000, respectively. The disposals in 2018 were primarily a result of relocating our corporate offices and writing off the fully amortized leasehold improvements related to our former office.

                                                | 2019         | 2018
----------------------------------------------- | ------------ | ------------
Cost:                                           |              |
Computers, peripheral and scientific equipment  | $1,654,000   | $1,350,000
Software                                        | 2,131,000    | 1,749,000
Leasehold improvements                          | 310,000      | 294,000
Office furniture and equipment                  | 424,000      | 391,000
                                                | 4,519,000    | 3,784,000
Less: Accumulated depreciation and amortization | (2,634,000 ) | (1,797,000 )
Property and equipment, net                     | $ 1,885,000  | $1,987,000


Other Acquisitions, Divestitures and Investments
On June 15, 2018, we acquired all the outstanding minority interests in a third party for $6.9 million. We initially acquired a controlling interest in the third party in April 2015. Therefore, this transaction was treated as an equity transaction, and the cash payment is reported as part of cash flow from financing activities in the consolidated statement of cash flows for the year ended December 31, 2018.
On April 2, 2018, we sold substantially all of the assets of the Allscripts’ business providing hospitals and health systems document and other content management software and services generally known as “OneContent” to Hyland Software, Inc., an Ohio corporation (“Hyland”). Allscripts acquired the OneContent business during the fourth quarter of 2017 through the acquisition of the EIS Business (as defined below). Certain assets of Allscripts relating to the OneContent business were excluded from the transaction and retained by Allscripts.
In addition, Hyland assumed certain liabilities related to the OneContent business. The total consideration for the OneContent business was $260 million, which was subject to certain adjustments for liabilities assumed by Hyland and net working capital. We realized a pre-tax gain upon sale of $177.9 million which is included in the “Gain on sales of businesses, net” line in our consolidated statements of operations for the year ended December 31, 2018.
On March 15, 2018, we contributed certain assets and liabilities of our Strategic Sourcing business unit, acquired as part of the acquisition of the EIS Business in 2017, into a new entity together with $2.7 million of cash as additional consideration. In exchange for our contributions, we obtained a 35.7% interest in the new entity, which was valued at $4.0 million, and is included in Other assets in our consolidated balance sheet as of December 31, 2018.
This investment is accounted for under the equity method of accounting. As a result of this transaction, we recognized an initial pre-tax loss of $0.9 million and $4.7 million in additional losses due to measurement period adjustments upon the finalization of carve-out balances, mainly related to accounts receivable. These losses are included on the “Gain on sale of businesses, net” line in our consolidated statements of operations for the year ended December 31, 2018.
On February 6, 2018, we acquired all of the common stock of a cloud-based analytics software platform provider for a purchase price of $8.0 million in cash. The allocation of the consideration is as follows: $1.1 million of intangible assets related to technology; $0.6 million to customer relationships; $6.6 million of goodwill; $0.8 million to accounts receivable; deferred revenue of $0.6 million and $0.5 million of long-term deferred income tax liabilities.
The allocation was finalized in the fourth quarter of 2018. The acquired intangible asset related to technology will be amortized over 8 years using a method that approximates the pattern of economic benefits to be gained from the intangible asset. The customer relationship was amortized over one year. The goodwill is not deductible for tax purposes. The results of operations of this acquisition were not material to our consolidated financial statements.
The following table summarizes our other equity investments which are included in other assets in the accompanying consolidated balance sheets: (1) Allscripts share of the earnings of our equity method investees is reported based on a one quarter lag.
During 2018, we acquired certain non-marketable equity securities of two third parties and entered into a commercial agreement with one of the third parties for total consideration of $11.7 million. During 2018, we also acquired a $1.8 million non-marketable convertible note of a third party. These investments are recorded in the Other asset caption within the consolidated balance sheets.
It is not practicable to estimate the fair value of our equity investments primarily because of their illiquidity and restricted marketability as of December 31, 2019. The factors we considered in trying to determine fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and the issuer’s subsequent or planned raises of capital.

                                               |                                          |               | Carrying Value at |
---------------------------------------------- | ---------------------------------------- | ------------- | ----------------- | -----------------
(In thousands, except for number of investees) | Number of Investees at December 31, 2019 | Original Cost | December 31, 2019 | December 31, 2018
Equity method investments (1)                  | 5                                        | $ 7,407       | $ 11,332          | $ 10,667
Cost less impairment                           | 9                                        | 43,874        | 32,462            | 25,923
Total long-term equity investments             | 14                                       | $ 51,281      | $ 43,794          | $ 36,590


Employee Stock Purchase Plan
Eligible employees are offered shares through a 24-month offering period, which consists of four consecutive 6-month purchase periods. Employees may purchase a limited number of shares of the Company’s stock at a discount of up to 15% of the lesser of the market value at the beginning of the offering period or the end of each 6-month purchase period. On September 13, 2018, the ESPP was amended to increase the shares reserved for issuance by 2 million shares of common stock. As of April 26, 2019, 7 million shares were available for issuance. The following table summarizes activity related to the purchase rights issued under the ESPP (in millions):

                                 |                | Year Ended     |
-------------------------------- | -------------- | -------------- | --------------
                                 | April 26, 2019 | April 27, 2018 | April 28, 2017
Shares issued under the ESPP     | 3              | 4              | 4
Proceeds from issuance of shares | $ 96           | $ 85           | $ 80


NOTE 7—ACCOUNTS RECEIVABLE
The components of accounts receivable are as follows (in thousands):
Amounts billed include $60.3 million and $80.5 million due on U.S. federal government contracts at September 30, 2019 and 2018, respectively. As further described in Note 2, effective October 1, 2018, the component of accounts receivable that consisted of unbilled contract receivables as reported under ASC 605 has been reclassified as contract assets under ASC 606.
In our normal course of business, we may sell trade receivables to financial institutions as a cash management technique. We do not retain financial or legal obligations for these receivables that would result in material losses. Our ongoing involvement is limited to the remittance of customer payments to the financial institutions with respect to the sold trade receivables; therefore, our sold trade receivables are not included in our Consolidated Balance Sheet in any period presented. As of September 30, 2019, we sold $31.1 million of outstanding trade receivables to financial institutions.

                                         | September 30, |
---------------------------------------- | ------------- | ----------
                                         | 2019          | 2018
Accounts receivable                      |               |
Billed                                   | $  127,406    | $  156,948
Unbilled                                 | —             | 242,877
Allowance for doubtful accounts          | (1,392)       | (1,324)
Total accounts receivable                | 126,014       | 398,501
Less estimated amounts not currently due | —             | (6,134)
Current accounts receivable              | $  126,014    | $ 392,367


10. Accrued Liabilities
Accrued liabilities at April 30, 2019 and 2018, respectively, consisted of the following (in thousands):

                                | 2019   | 2018
------------------------------- | ------ | ------
Vacation and other compensation | $1,659 | $1,433
Incentive compensation          | 346    | 411
Payroll taxes                   | 155    | 113
Deferred revenue                | -      | 68
Warranty reserve                | 529    | 520
Commissions                     | 378    | 307
Other                           | 504    | 564
                                | $3,571 | $3,416


Note 6: Equity Method Investments
The following table provides a reconciliation of equity method investments to the Company's Consolidated Balance Sheets (amounts in thousands):
TOKIN's Joint Ventures - NYC and NTS
As noted in Note 2, “Acquisitions,” on April 19, 2017, the Company completed its acquisition of the remaining 66% economic interest in TOKIN and TOKIN became a 100% owned subsidiary of KEMET. TOKIN had two investments at the time of acquisition: NYC and NTS. The Company accounts for both investments using the equity method due to the related nature of operations and the Company's ability to influence management decisions.
NYC was established in 1966 by TOKIN and Mitsui Mining and Smelting Co., Ltd (“Mitsui”). NYC was established to commercialize yttrium oxides and the Company owns 30% of NYC's stock. The carrying amount of the Company's equity investment in NYC was $8.2 million and $8.1 million as of March 31, 2019 and 2018, respectively.
NTS was established in 2004 by TOKIN, however subsequent to its formation, TOKIN sold 67% of its stock. NTS provides world-class electronic devices by utilizing global procurement networks and the Company owns 33% of NTS' stock. During the year ended March 31, 2019, a significant portion of NTS' sales were TOKIN’s products. The carrying amount of the Company's equity investment in NTS was $1.2 million and $1.0 million as of March 31, 2019 and 2018, respectively.

                                                                  | March 31, |
----------------------------------------------------------------- | --------- | -------
                                                                  | 2019      | 2018
Nippon Yttrium Co., Ltd ("NYC")                                   | $8,215    | $8,148
NT Sales Co., Ltd ("NTS")                                         | 1,218     | 998
Novasentis                                                        | 977       | 2,870
KEMET Jianghai Electronics Components Co., Ltd (“KEMET Jianghai”) | 2,515     | —
                                                                  | $12,925   | $12,016


The difference between the tax provision at the statutory federal income tax rate and the tax provision as a percentage of income before income taxes (effective tax rate) for each period was as follows:
The majority of the increase in our effective tax rate in 2019 compared to 2018 was driven by one-time benefits that occurred in 2018.
The majority of the decrease in our effective tax rate in 2018 compared to 2017 resulted from initial tax expense from Tax Reform and the tax impacts from the ISecG divestiture that we had in 2017, but not in 2018. The reduction of the U.S. statutory rate, combined with the net impact of the enactment or repeal of specific tax law provisions through Tax Reform, drove the remaining decrease in our effective tax rate in 2018.
We derive the effective tax rate benefit attributed to non-U.S. income taxed at different rates primarily from our operations in China, Hong Kong, Ireland, and Israel. The statutory tax rates in these jurisdictions range from 12.5% to 25.0%. In addition, we are subject to reduced tax rates in China and Israel as long as we conduct certain eligible activities and make certain capital investments. These conditional reduced tax rates expire at various dates through 2026 and we expect to apply for renewals upon expiration.

Years Ended                                  | Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017
-------------------------------------------- | ------------ | ------------ | ------------
Statutory federal income tax rate            | 21.0%        | 21.0%        | 35.0%
Increase (reduction) in rate resulting from: |              |              |
Non-U.S. income taxed at different rates     | (3.7)        | (3.6)        | (7.6)
Research and development tax credits         | (2.3)        | (2.7)        | (2.3)
Domestic manufacturing deduction benefit     | —            | —            | (1.3)
Foreign derived intangible income benefit    | (3.2)        | (3.7)        | —
Tax Reform                                   | —            | (1.3)        | 26.8
ISecG divestiture                            | —            | —            | 3.3
Other                                        | 0.7          | (0.1)        | (1.1)
Effective tax rate                           | 12.5%        | 9.7%         | 52.8%


3. Restructuring and Other Charges, Net
Net restructuring and other charges consisted of the following:

                                     |       |               | Fiscal
------------------------------------ | ----- | ------------- | ------
                                     | 2019  | 2018          | 2017
                                     |       | (in millions) |
Restructuring charges, net           | $ 255 | $ 140         | $ 146
Gain on divestiture                  | —     | (2)           | —
Other charges (credits), net         | —     | (12)          | 1
Restructuring and other charges, net | $ 255 | $ 126         | $ 147


Note 13. INCOME TAXES
In the year ended December 29, 2019, our income tax provision of $26.6 million on a profit before income taxes and equity in earnings (losses) of unconsolidated investees of $26.0 million was primarily due to tax expense in foreign jurisdictions that were profitable. In the year ended December 30, 2018, our income tax provision of $1.0 million on a loss before income taxes and equity in earnings of unconsolidated investees of $898.7 million was primarily due to tax expense in foreign jurisdictions that were profitable, offset by tax benefit related to release of valuation allowance in a foreign jurisdiction, and by a release of tax reserves due to lapse of statutes of limitation.
The geographic distribution of income (loss) from continuing operations before income taxes and equity earnings (losses) of unconsolidated investees and the components of provision for income taxes are summarized below:

                                                                                |                   | Fiscal Year       |
------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | ----------------- | -----------------
(In thousands)                                                                                | December 29, 2019 | December 30, 2018 | December 31, 2017
Geographic distribution of income (loss) from continuing operations before income taxes and equity in earnings of unconsolidated investees: |                   |                   |
U.S. loss                                                                                | $(84,071)         | $(778,316)        | $(1,242,000)
Non-U.S. income (loss)                                                                                | 110,040           | (120,355)         | 41,250
Income (loss) before income taxes and equity in earnings (loss) of unconsolidated investees                                                 | $25,969           | $(898,671)        | $(1,200,750)
Provision for income taxes:                                                                                |                   |                   |
Current tax (expense) benefit                                                                                |                   |                   |
Federal                                                                                | $(328)            | $(1,155)          | $6,816
State                                                                                | (370)             | (553)             | 6,575
Foreign                                                                                | (24,588)          | (4,100)           | (12,074)
Total current tax (expense) benefit                                                                                | (25,286)          | (5,808)           | 1,317
Deferred tax (expense) benefit                                                                                |                   |                   |
Federal                                                                                | (100)             | —                 | —
State                                                                                | —                 | —                 | 1,450
Foreign                                                                                | (1,245)           | 4,798             | 1,177
Total deferred tax (expense) benefit                                                                                | (1,345)           | 4,798             | 2,627
(Provision for) benefit from income taxes                                                                                | (26,631)          | $(1,010)          | $3,944


Foreign Currency Risk
The Group is exposed to translation and transaction foreign exchange risk. Several other currencies in addition to the reporting currency of US dollar are used, including sterling and the euro. The Group experiences currency exchange differences arising upon retranslation of monetary items (primarily short-term inter-Company balances and long-term borrowings), which are recognised as an expense in the period the difference occurs. The Group endeavours to match cash inflows and outflows in the various currencies; the Group typically invoices its customers in their local currency and pays its local expenses in local currency, as a means to mitigate this risk.
The Group is also exposed to exchange differences arising from the translation of its subsidiaries’ Financial Statements into the Group’s reporting currency of US dollar, with the corresponding exchange differences taken directly to equity.
The following table illustrates the movement that ten per cent in the value of sterling or the euro against the US dollar would have had on the Group’s profit or loss for the period and on the Group’s equity as at the end of the period.
Any foreign exchange variance would be recognised as unrealised foreign exchange in the Consolidated Statement of Profit or Loss and have no impact on cash flows.

                                            | Year-ended 31 March 2019 | Year-ended 31 March 2018
------------------------------------------- | ------------------------ | ------------------------
                                            | $M                       | $M
10% movement in sterling to US dollar value |                          |
Profit or loss                              | 1.7                      | 5.1
Equity                                      | 33.8                     | 37.4
10% movement in euro to US dollar value     |                          |
Profit or loss                              | 1.5                      | 7.5
Equity                                      | (9.8)                    | (10.8)


15. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
During the quarter ended December 31, 2019, we purchased a group annuity contract to transfer the pension benefit obligations and annuity administration for a select group of retirees or their beneficiaries to an annuity provider. As a result of the transfer of the pension liability to the annuity provider and other lump sum payments to participants of the Pension Plans, we recognized a non-cash pension settlement charge of $6.7 million during the quarter ended December 31, 2019.
In 2019, we recognized a gain on extinguishment of debt from the partial repurchase of our Senior Notes of $0.3 million, $1.1 million and $3.1 million during the quarters ended June 30, 2019, September 30, 2019, and December 31, 2019, respectively.
As part of our integration efforts of FairPoint and continued cost saving initiatives, we incurred severance costs of $8.7 million during the quarter ended December 31, 2019.

                                                      |           | Quarter Ended                            |               |
----------------------------------------------------- | --------- | ---------------------------------------- | ------------- | ------------
2019                                                  | March 31, | June 30,                                 | September 30, | December 31,
                                                      |           | (In thousands, except per share amounts) |               |
Net revenues                                          | $338,649  | $333,532                                 | $333,326      | $331,035
Operating income                                      | $16,720   | $14,300                                  | $23,542       | $26,719
Net income (loss) attributable to common stockholders | $(7,265)  | $(7,387)                                 | $257          | $(5,988)
Basic and diluted earnings (loss) per share           | $(0.11)   | $(0.10)                                  | $—            | $(0.08)


4. SEGMENT INFORMATION
During the 2019 and 2018 financial years, the Group operated wholly within one business segment being the operation and management of storage centres in Australia and New Zealand.
The Managing Director is the Group’s chief operating decision maker and monitors the operating results on a portfolio wide basis. Monthly management reports are evaluated based upon the overall performance of NSR consistent with the presentation within the consolidated financial statements. The Group’s financing (including finance costs and finance income) are managed on a Group basis and not allocated to operating segments.
The operating results presented in the statement of profit or loss represent the same segment information as reported in internal management information.
The revenue information above excludes interest income and is based on the location of storage centres.

                                | 2019    | 2018
------------------------------- | ------- | -------
                                | $'000   | $'000
Revenue from external customers |         |
Australia                       | 144,621 | 129,431
New Zealand                     | 13,036  | 8,912
Total                           | 157,657 | 138,343


Discussion of the Results of Operations for the years ended December 31, 2019, 2018, and 2017
Revenues
Subscription Solutions
Subscription solutions revenues increased $177.2 million, or 38.1%, for the year ended December 31, 2019 compared to the same period in 2018. Subscription solutions revenues increased $155.0 million, or 50.0%, for the year ended December 31, 2018 compared to the same period in 2017. The increase in both periods was primarily a result of growth in MRR driven by the higher number of merchants using our platform.
Merchant Solutions
Merchant solutions revenues increased $327.7 million, or 53.9%, for the year ended December 31, 2019 compared to the same period in 2018. The increase in merchant solutions revenues was primarily a result of Shopify Payments revenue growing by $239.6 million, or 53.3%, in 2019 compared to the same period in 2018. This increase was a result of an increase in the number of merchants using our platform, continued expansion into new geographical regions, and an increase in adoption of Shopify Payments by our merchants, which drove $9.1 billion of additional GMV facilitated using Shopify Payments in 2019 compared to the same period in 2018. For the year ended December 31, 2019, the Shopify Payments penetration rate was 42.1%, resulting in GMV of $25.7 billion that was facilitated using Shopify Payments. This compares to a penetration rate of 40.4%, resulting in GMV of $16.6 billion that was facilitated using Shopify Payments in the same period in 2018. As at December 31, 2019 Shopify Payments adoption among our merchants was as follows: United States, 91%; Canada, 90%; Australia, 89%; United Kingdom, 88%; Ireland, 84%; New Zealand, 76%; and other countries where Shopify Payments is available, 70%. Merchant solutions revenues increased $327.7 million, or 53.9%, for the year ended December 31, 2019 compared to the same period in 2018. The increase in merchant solutions revenues was primarily a result of Shopify Payments revenue growing by $239.6 million, or 53.3%, in 2019 compared to the same period in 2018. This increase was a result of an increase in the number of merchants using our platform, continued expansion into new geographical regions, and an increase in adoption of Shopify Payments by our merchants, which drove $9.1 billion of additional GMV facilitated using Shopify Payments in 2019 compared to the same period in 2018. For the year ended December 31, 2019, the Shopify Payments penetration rate was 42.1%, resulting in GMV of $25.7 billion that was facilitated using Shopify Payments. This compares to a penetration rate of 40.4%, resulting in GMV of $16.6 billion that was facilitated using Shopify Payments in the same period in 2018. As at December 31, 2019 Shopify Payments adoption among our merchants was as follows: United States, 91%; Canada, 90%; Australia, 89%; United Kingdom, 88%; Ireland, 84%; New Zealand, 76%; and other countries where Shopify Payments is available, 70%.
In addition to the increase in revenue from Shopify Payments, revenue from transaction fees, referral fees from partners, Shopify Capital, and Shopify Shipping increased during the year ended December 31, 2019 compared to the same period in 2018, as a result of the increase in GMV facilitated through our platform.
Merchant solutions revenues increased $245.0 million, or 67.4%, for the year ended December 31, 2018 compared to the same period in 2017. The increase in merchant solutions revenues was primarily a result of Shopify Payments revenue growing by $176.0 million, or 64.4%. Additionally, revenue from transaction fees, referral fees from partners, Shopify Capital, and Shopify Shipping increased for the year ended December 31, 2018 compared to the same period in 2017.

                        | Years ended December 31,           |            |          | 2019 vs 2018 | 2018 vs 2017
----------------------- | ---------------------------------- | ---------- | -------- | ------------ | ------------
                        | 2019                               | 2018       | 2017     | % Change     | % Change
                        | (in thousands, except percentages) |            |          |              |
Revenues:               |                                    |            |          |              |
Subscription solutions  | $642,241                           | $464,996   | $310,031 | 38.1%        | 50.0%
Merchant solutions      | 935,932                            | 608,233    | 363,273  | 53.9%        | 67.4%
                        | $1,578,173                         | $1,073,229 | $673,304 | 47.0%        | 59.4%
Percentage of revenues: |                                    |            |          |              |
Subscription solutions  | 40.7%                              | 43.3%      | 46.0%    |              |
Merchant solutions      | 59.3 %                             | 56.7 %     | 54.0 %   |              |
Total revenues          | 100.0 %                            | 100.0 %    | 100.0 %  |              |


GAINS (LOSSES) ON EQUITY INVESTMENTS AND INTEREST AND OTHER, NET
GAINS (LOSSES) ON EQUITY INVESTMENTS, NET
Ongoing mark-to-market net gains and losses reported in 2019 and 2018 were primarily driven by ASML Holding N.V. (ASML) and Cloudera Inc. (Cloudera). During 2019 we sold our equity investment in ASML.
In 2019, we recognized $293 million in observable price adjustments primarily from one investment.
During 2018, we recognized an impairment charge of $290 million in our equity method investment in IMFT. During 2017, we recognized impairment charges in our investments of Cloudera for $278 million and Unisoc for $308 million.
Major drivers of sales of equity investments and other in 2019 were dividends of $632 million from McAfee and a gain of $107 million from our sale of our non-controlling interest in IMFT. In 2017, we recognized $3.4 billion in realized gains on sales of a portion of our interest in ASML.
INTEREST AND OTHER, NET
We recognized a higher net gain in interest and other in 2019 compared to 2018, primarily due to lower loss on debt conversions and larger divestiture gains in 2019 compared to 2018.
We recognized a net gain in interest and other in 2018 compared to a net loss in 2017, primarily due to lower losses on debt conversions, higher assets under construction resulting in more capitalized interest, and larger divestiture gains in 2018 compared to 2017.

Years Ended                                                        | Dec 28, | Dec 29, | Dec 30,
------------------------------------------------------------------ | ------- | ------- | -------
(In Millions)                                                      | 2019    | 2018    | 2017
Ongoing mark-to market adjustments on marketable equity securities | $277    | $(129)  | $ —
Observable price adjustments on non-marketable equity securities   | 293     | 202     | —
Impairment charges                                                 | (122)   | (424)   | (833)
Sale of equity investments and other                               | 1,091   | 226     | 3,484
Gains (losses) one equity investments, net                         | $1,539  | $(125)  | $2,651
Interest and other, net                                            | $484    | $126    | $(349)


Cash and cash equivalents decreased by $78.9 million during the year ended March 31, 2019, as compared to an increase of $177.1 million during the year ended March 31, 2018 and an increase of $44.8 million during the year ended March 31, 2017 as follows (amounts in thousands):
(1) Fiscal years ended March 31, 2018 and 2017 adjusted due to the adoption of ASC 606.
(2) Fiscal year ended March 31, 2018 adjusted due to the adoption of ASC 606.
Operating Cash Flow Activities
During fiscal years 2019, 2018, and 2017, cash provided by operating activities totaled $131.7 million, $120.8 million, and $71.7 million, respectively. During fiscal year 2019, cash provided by operating activities was positively impacted by our net income of $206.6 million, a $7.7 million increase in accounts payable, and a $1.0 million decrease in accrued income taxes. Operating cash flows were negatively impacted by a $70.6 million decrease in other operating liabilities, a $42.8 million increase in inventories, an $8.9 million increase in accounts receivable, and a $4.4 million increase in prepaid expenses and other assets. The decrease in other operating liabilities was driven by a $46.3 million decrease in accruals for TOKIN anti-trust fines and a $7.8 million decrease in restructuring liabilities. The increase in inventory is due to increased customer demand.
During fiscal year 2018, cash provided by operating activities was positively impacted by our net income of $254.1 million. Excluding the acquired balances from TOKIN, operating cash flows were also positively impacted by a $30.2 million decrease in accounts receivable, a $4.3 million decrease in prepaid expenses and other assets, and a $1.3 million increase in accrued income taxes. Excluding the acquired balances from TOKIN, operating cash flows were negatively impacted by a $16.1 million decrease in accounts payable and a $13.8 million increase in inventories.
During fiscal year 2017, cash provided by operating activities was positively impacted by our net income of $47.2 million, a $16.8 million decrease in inventories, a $6.2 million increase in accounts payable, and a $1.7 million increase in other operating liabilities. Operating cash flows were negatively impacted by a $2.6 million increase in accounts receivable and a $1.8 million increase in prepaid expenses and other assets.
Investing Cash Flow Activities
During fiscal years 2019, 2018, and 2017, cash provided by (used in) investing activities totaled $(147.0) million, $102.4 million, and $(25.6) million, respectively. During fiscal year 2019, cash used in investing activities included capital expenditures of $146.1 million, primarily related to expanding capacity at our manufacturing facilities in Mexico, Portugal, China, Thailand and Japan, as well as information technology projects in the United States and Mexico. $16.3 million of the $146.1 million in capital expenditures were related to the Customer Capacity Agreements. Additionally, the Company invested $4.0 million in the form of capital contributions to KEMET Jianghai and Novasentis. Offsetting these uses of cash, we had asset sales of $2.3 million and received dividends of $0.8 million.
During fiscal year 2018, cash provided by investing activities was primarily due to $164.0 million in net cash received attributable to the bargain purchase of TOKIN. Additionally, we had proceeds from asset sales of $3.6 million and received dividends of $2.7 million. This was partially offset by capital expenditures of $65.0 million, primarily related to expanding capacity at our manufacturing facilities in Mexico, Portugal, China, Thailand and Japan, as well as for information technology projects in the United States and Mexico. In addition, the Company invested $3.0 million in the form of capital contributions to Novasentis.
During fiscal year 2017, cash used in investing activities was primarily due to capital expenditures of $25.6 million, primarily related to expanding capacity at our manufacturing facilities in Mexico, Italy, Portugal, and China.
Financing Cash Flow Activities
During fiscal years 2019, 2018, and 2017, cash used in financing activities totaled $56.7 million, $55.8 million, and $0.1 million, respectively. During fiscal year 2019, the Company received $281.8 million in proceeds from the TOKIN Term Loan Facility, net of discount, bank issuance costs, and other indirect issuance costs, $13.4 million in proceeds from advances from customers, as described in the earlier section titled "Customer Advances", received proceeds on an interest free loan from the Portuguese Government of $1.1 million, and received $0.5 million in cash proceeds from the exercise of stock options. The Company made $344.5 million in payments on long term debt, including two quarterly principal payments on the Term Loan Credit Agreement of $4.3 million, for a total of $8.6 million, $323.4 million to repay the remaining balance on the Term Loan Credit Agreement, and one principal payment on the TOKIN Term Loan Facility of $12.4 million. An early payment premium on the Term Loan Credit Agreement used $3.2 million in cash. Lastly, the Company paid two quarterly cash dividends for a total of $5.8 million.
During fiscal year 2018, cash used in financing activities was impacted by the following payments: (i) $353.0 million to pay off the remaining outstanding balance of the 10.5% Senior Notes, (ii) $33.9 million to repay the remaining outstanding balance of the revolving line of credit, and (iii) three quarterly principal payments on the Term Loan Credit Agreement for $4.3 million each, for a total of $12.9 million. The Company received $329.7 million in proceeds from the Term Loan Credit Agreement, net of discount, bank issuance costs, and other indirect issuance costs, received proceeds from the exercise of stock warrants and stock options for $8.8 million and $5.2 million, respectively, and received $0.3 million in proceeds on an interest free loan from the Portuguese Government.
During fiscal year 2017, the Company made $0.1 million in net payments on long-term debt, had cash outflows of $1.1 million for the purchase of treasury stock, and received $1.1 million from the exercise of stock options.

                                                                       |           | Fiscal Years Ended March 31, |
---------------------------------------------------------------------- | --------- | ---------------------------- | --------
                                                                       | 2019      | 2018                         | 2017
Net cash provided by (used in) operating activities (1)                | $131,731  | $120,761                     | $71,667
Net cash provided by (used in) investing activities                    | (147,012) | 102,364                      | (25,598)
Net cash provided by (used in) financing activities                    | (56,657)  | (55,798)                     | (125)
Effect of foreign currency fluctuations on cash (2)                    | (6,990)   | 9,745                        | (1,174)
Net increase (decrease) in cash, cash equivalents, and restricted cash | $(78,928) | $177,072                     | $44,770


11. Reportable Segments, Geographic Information and Major Customers
Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in assessing performance and allocating resources. The Company uses an internal management reporting system, which provides important financial data to evaluate performance and allocate the Company’s resources on a regional basis. Net sales for the segments are attributed to the region in which the product is manufactured or the service is performed. The services provided, manufacturing processes used, class of customers serviced and order fulfillment processes used are similar and generally interchangeable across the segments. A segment’s performance is evaluated based upon its operating income (loss). A segment’s operating income (loss) includes its net sales less cost of sales and selling and administrative expenses, but excludes corporate and other expenses. Corporate and other expenses  fiscal 2019 and the $13.5 million one-time employee bonus paid to full-time, non-executive employees during fiscal 2018 due to the Company's ability to access overseas cash as a result of Tax Reform (the "one-time employee bonus"). These costs are not allocated to the segments, as management excludes such costs when assessing the performance of the segments. Inter-segment transactions are generally recorded at amounts that approximate arm’s length transactions. The accounting policies for the segments are the same as for the Company taken as a whole.
Information about the Company’s three reportable segments for fiscal 2019, 2018 and 2017 is as follows (in thousands):

                                    | 2019       | 2018       | 2017
----------------------------------- | ---------- | ---------- | ----------
Net sales:                          |            |            |
AMER                                | $1,429,308 | $1,218,944 | $1,166,346
APAC                                | 1,557,205  | 1,498,010  | 1,279,261
EMEA                                | 309,933    | 281,489    | 192,829
Elimination of inter-segment sales  | (132,012)  | (124,935)  | (110,384)
                                    | 3,164,434  | 2,873,508  | 2,528,052
Operating income (loss):            |            |            |
AMER                                | $57,780    | $38,637    | $41,924
APAC                                | 208,178    | 213,935    | 200,103
EMEA                                | 4,475      | 1,447      | (6,197)
Corporate and other costs           | (128,378)  | (135,736)  | (105,922)
                                    | $142,055   | $118,283   | $129,908
Other income (expense):             |            |            |
Interest expense                    | $(12,853)  | $(12,226)  | $(13,578)
Interest income                     | 1,949      | 4,696      | 5,042
Miscellaneous, net                  | (5,196)    | (3,143)    | 451
Income before income taxes          | $125,955   | $107,610   | $121,823


ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
NOTE 13. INTANGIBLE ASSETS
Intangible assets consisted of the following as of December 31, 2019 and 2018:
At December 31, 2019, the weighted average remaining useful life of intangibles subject to amortization was approximately 11.2 years.

December 31, 2019      | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount
---------------------- | --------------------- | ------------------------ | -------------------
Technology             | $83,368               | $(14,250)                | $69,118
Customer relationships | 108,995               | (18,197)                 | 90,798
Trademarks and other   | 26,888                | (2,793)                  | 24,095
Total                  | $219,251              | $(35,240)                | $184,011
December 31, 2018      | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount
Technology             | $39,879               | $(7,927)                 | $31,952
Customer relationships | 35,509                | (13,484)                 | 22,025
Trademarks and other   | 2,501                 | (1,568)                  | 933
Total                  | $77,889               | $(22,979)                | $  54,910


NOTE 11 - STOCK CAPITAL (Cont.)
Private placements and public offerings: (Cont.)
The New Warrants have not been registered under the Securities Act of 1933, as amended (the Securities Act), or state securities laws. The shares issuable upon exercise of the New Warrants have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333- 233349). The Exercised Shares have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333225995). The issuance of the Exercised Shares and New Warrants is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act.
Since its inception the Company has raised approximately $64,000, net in cash in consideration for issuances of Common Stock and warrants in private placements and public offerings as well as proceeds from warrants exercises.
Warrants:
The following table sets forth the number, exercise price and expiration date of Company warrants outstanding as of December 31, 2019:

                   | Outstanding as of December 31, | Exercise | Exercisable
------------------ | ------------------------------ | -------- | -----------
Issuance Date      | 2019                           | price    | Through
Aug 2007- Jan 2011 | 2,016,666                      | 3 - 4.35 | Nov-2022
Jun-2018           | 458,202                        | 9        | Dec-2020
Jun-2018           | 1,158,000                      | 7        | Dec-2021
Aug - 2019         | 842,000                        | 7        | Dec-2021
Total              | 4,474,868                      |          |


Item 16C. Principal Accountant Fees and Services
Our principal accountant for 2019 and 2018 was KPMG LLP, Chartered Professional Accountants. The following table shows the fees Teekay and our subsidiaries paid or accrued for audit and other services provided by KPMG LLP for 2019 and 2018.
(1) Audit fees represent fees for professional services provided in connection with the audits of our consolidated financial statements and effectiveness of internal control over financial reporting, reviews of our quarterly consolidated financial statements and audit services provided in connection with other statutory or regulatory filings for Teekay or our subsidiaries including professional services in connection with the review of our regulatory filings for public offerings of our subsidiaries.
Audit fees for 2019 and 2018 include approximately $928,300 and $859,000, respectively, of fees paid to KPMG LLP by Teekay LNG that were approved by the Audit Committee of the Board of Directors of the general partner of Teekay LNG. Audit fees for 2019 and 2018 include approximately $588,200 and $517,000, respectively, of fees paid to KPMG LLP by our subsidiary Teekay Tankers that were approved by the Audit Committee of the Board of Directors of Teekay Tankers.
(2) Audit-related fees consisted primarily of accounting consultations, employee benefit plan audits, services related to business acquisitions, divestitures and other attestation services. (3) For 2019 and 2018, tax fees principally included corporate tax compliance fees.
The Audit Committee has the authority to pre-approve audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees. Engagements for proposed services either may be separately pre-approved by the Audit Committee or entered into pursuant to detailed pre-approval policies and procedures established by the Audit Committee, as long as the Audit Committee is informed on a timely basis of any engagement entered into on that basis.
The Audit Committee separately pre-approved all engagements and fees paid to our principal accountants in 2019 and 2018.

Fees (in thousands of U.S. dollars) | 2019  | 2018
----------------------------------- | ----- | -----
Audit Fees (1)                      | 2,723 | 2,529
Audit-Related Fees (2)              | 33    | 59
Tax Fees (3)                        | 23    | 32
Total                               | 2,779 | 2,620
                                    |       |


3.3 Fair value estimation (continued)                                                       If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments mainly include:
Dealer quotes for similar instruments;
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves; and
Other techniques, such as discounted cash flow analysis, are used to determine fair value for financial instruments.
During the year ended 31 December 2019, there was 1 transfer between level 1 and 2 for recurring fair value measurements. For transfers in and out of level 3 measurements see the following table, which presents the changes of financial instruments in level 3 for the years ended 31 December 2019 and 2018:

                                                                                | Financial assets |             | Financial liabilities |
------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | ----------- | --------------------- | -----------
                                                                                | 2019             | 2018        | 2019                  | 2018
                                                                                | RMB’Million      | RMB’Million | RMB’Million           | RMB’Million
Opening balance – IAS 39                                                                                |                  | 77,131      |                       | 2,154
Adjustment on adoption of IFRS 9                                                                                |                  | 22,976      |                       | –
Opening balance – IFRS 9                                                                                | 83,934           | 100,107     | 4,466                 | 2,154
Additions                                                                                | 39,116           | 51,185      | 75                    | 3,301
Business combination                                                                                | –                | –           | (977)                 | –
Disposals/Settlements                                                                                | (6,714)          | (9,899)     | (1,193)               | –
Transfers                                                                                | (4,552)          | (93,151)    | –                     | –
Changes in fair value recognised in other comprehensive income                                                                        | 328              | 261         | –                     | –
Changes in fair value recognised in profit or loss*                                                                                | 9,241            | 30,485      | (463)                 | (1,063)
Currency translation differences                                                                                | 1,740            | 4,946       | (35)                  | 74
Closing balance                                                                                | 123,093          | 83,934      | 1,873                 | 4,466
* Includes unrealised gains or (losses) recognised in profit or loss attributable to balances held at the end of the reporting period | 3,265            | 6,861       | (463)                 | (1,063)


Item 6. Selected Financial Data
Five Years Ended July 27, 2019 (in millions, except per-share amounts)
(1) In the second quarter of fiscal 2019, we completed the sale of the Service Provider Video Software Solutions (SPVSS) business. As a result, revenue from the SPVSS business will not recur in future periods. We recognized an immaterial gain from this transaction. Revenue for the years ended July 27, 2019 and July 28, 2018 include SPVSS revenue of $168 million and $903 million, respectively.
(2) In connection with the Tax Cuts and Jobs Act (“the Tax Act”), we recorded an $872 million charge which was the reversal of the previously recorded benefit associated with the U.S. taxation of deemed foreign dividends recorded in fiscal 2018 as a result of a retroactive final U.S. Treasury regulation issued during the fourth quarter of fiscal 2019. See Note 17 to the Consolidated Financial Statements.
(3) In fiscal 2018, Cisco recorded a provisional tax expense of $10.4 billion related to the enactment of the Tax Act comprised of $8.1 billion of U.S. transition tax, $1.2 billion of foreign withholding tax, and $1.1 billion re-measurement of net deferred tax assets and liabilities (DTA).
(4) In the second quarter of fiscal 2016, Cisco completed the sale of the SP Video CPE Business. As a result, revenue from this portion of the Service Provider Video product category did not recur in future periods. The sale resulted in a pre-tax gain of $253 million net of certain transaction costs. The years ended July 30, 2016 and July 25, 2015 include SP Video CPE Business revenue of $504 million and $1,846 million, respectively.
(5) In fiscal 2016 Cisco recognized total tax benefits of $593 million for the following: i) the Internal Revenue Service (IRS) and Cisco settled all outstanding items related to Cisco’s federal income tax returns for fiscal 2008 through fiscal 2010, as a result of which Cisco recorded a net tax benefit of $367 million; and ii) the Protecting Americans from Tax Hikes Act of 2015 reinstated the U.S. federal research and development (R&D) tax credit permanently, as a result of which Cisco recognized tax benefits of $226 million, of which $81 million related to fiscal 2015 R&D expenses.
At the beginning of fiscal 2019, we adopted Accounting Standards Codification (ASC) 606, a new accounting standard related to revenue recognition, using the modified retrospective method to those contracts that were not completed as of July 28, 2018. See Note 2 to the Consolidated Financial Statements for the impact of this adoption.
No other factors materially affected the comparability of the information presented above.

Years Ended                                  | July 27, 2019 (1)(2) | July 28, 2018 (1)(3) | July 29, 2017 | July 30, 2016 (4)(5) | July 25, 2015 (4)
-------------------------------------------- | -------------------- | -------------------- | ------------- | -------------------- | -----------------
Revenue                                      | $51,904              | $49,330              | $48,005       | $49,247              | $49,161
Net income                                   | $11,621              | $110                 | $9,609        | $10,739              | $8,981
Net income per share—basic                   | $2.63                | $0.02                | $1.92         | $2.13                | $1.76
Net income per share—diluted                 | $2.61                | $0.02                | $1.90         | $2.11                | $1.75
Shares used in per-share calculation—basic   | 4,419                | 4,837                | 5,010         | 5,053                | 5,104
Shares used in per-share calculation—diluted | 4,453                | 4,881                | 5,049         | 5,088                | 5,146
Cash dividends declared per common share     | $1.36                | $1.24                | $1.10         | $0.94                | $0.80
Net cash provided by operating activities    | $15,831              | $13,666              | $13,876       | $13,570              | $12,552