AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
Information about receivables, contract assets and contract liabilities from contracts with tenants is as follows:
(1) Prior-period amounts adjusted with the adoption of the new lease accounting guidance, as applicable.
(2) Excludes $56.7 million and $55.0 million of capital contributions related to DAS networks as of December 31, 2019 and 2018, respectively.
(3) Excludes $300.2 million and $313.6 million of capital contributions related to DAS networks as of December 31, 2019 and 2018, respectively.
The Company records unearned revenue when payments are received from tenants in advance of the completion of the Company’s performance obligations. Long-term unearned revenue is included in Other non-current liabilities. During the year ended December 31, 2019, the Company recognized $62.2 million of revenue that was included in the Unearned revenue balance as of December 31, 2018. During the year ended December 31, 2018, the Company recognized $44.4 million of revenue that was included in the Unearned revenue balance as of January 1, 2018. The Company also recognized revenues of $59.2 million and $55.4 million during the years ended December 31, 2019 and December 31, 2018, respectively, for capital contributions related to DAS networks. There was $0.4 million of revenue recognized from Other non-current liabilities during each of the years ended December 31, 2019 and 2018. $59.2 million and $55.4 million during the years ended December 31, 2019 and December 31, 2018, respectively, for capital contributions related to DAS networks. There was $0.4 million of revenue recognized from Other non-current liabilities during each of the years ended December 31, 2019 and 2018.
$59.2 million and $55.4 million during the years ended December 31, 2019 and December 31, 2018, respectively, for capital
contributions related to DAS networks. There was $0.4 million of revenue recognized from Other non-current liabilities during
each of the years ended December 31, 2019 and 2018.

                                              | December 31, 2019 | December 31, 2018 (1)
--------------------------------------------- | ----------------- | ---------------------
Accounts receivable                           | $80.5             | $92.6
Prepaids and other current assets             | 8.3               | 7.7
Notes receivable and other non-current assets | 21.3              | 22.2
Unearned revenue (2)                          | 35.0              | 35.0
Other non-current liabilities (3)             | 79.0              | 54.1


2016 Collective Bargaining Negotiations
During 2016, we adopted changes to our defined benefit pension plans and other postretirement benefit plans to reflect the agreed upon terms and conditions of the collective bargaining agreements ratified in June 2016. The impact includes a net increase to Accumulated other comprehensive income of $2.9 billion (net of taxes of $1.8 billion).
The amount recorded in Accumulated other comprehensive income will be reclassified to net periodic benefit cost on a straight-line basis over the average remaining service period of the respective plans’ participants, which, on a weighted-average basis, is 12.2 years for defined benefit pension plans and 7.8 years for other postretirement benefit plans.
The above-noted reclassification resulted in a decrease to net periodic benefit cost and increase to pre-tax income of approximately $658 million during 2019, 2018 and 2017, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets follows:
Information for pension plans with an accumulated benefit obligation in excess of plan assets follows:

                               |          | (dollars in millions)
------------------------------ | -------- | ---------------------
At December 31,                | 2019     | 2018
Projected benefit obligation   | $ 21,190 | $ 19,510
Accumulated benefit obligation | 21,134   | 19,461
Fair value of plan assets      | 19,388   | 17,757


Due To/From Related Parties, Net
Amounts due to and from related parties, net as of the periods presented consisted of the following (table in millions):
(1) Includes an immaterial amount related to our current operating lease liabilities due to related parties as of January 31, 2020.
We also recognized an immaterial amount related to non-current operating lease liabilities due to related parties. This amount has been included in operating lease liabilities on the consolidated balance sheet as of January 31, 2020.
Amounts included in due from related parties, net, excluding DFS and tax obligations, includes the current portion of amounts due to and due from related parties. Amounts included in due from related parties, net are generally settled in cash within 60 days of each quarter-end.

                                       | January 31, 2020 | February 1, 2019
-------------------------------------- | ---------------- | ----------------
Due from related parties, current      | $1,618           | $1,248
Due to related parties, current(1)     | 161              | 158
Due from related parties, net, current | $1,457           | $1,090


ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
We have established an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends, and other information.
Accounts Receivable and Allowance for Doubtful Accounts — Accounts receivable are recorded at net realizable value. We maintain a credit approval process and we make significant judgments in connection with assessing our customers’ ability to pay. Despite this assessment, from time to time, our customers are unable to meet their payment obligations. We continuously monitor our customers’ credit worthiness and use our judgment in establishing a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that we have identified. While such credit losses have historically been within our expectations and the provisions established, there is no assurance that we will continue to experience the same credit loss rates that we have in the past. For example, in the fourth quarter, we increased our allowance for doubtful accounts by $4.2 million relating to a customer exposure in China resulting from economic softness and funding delays causing uncertainty in large program timing which uncertainty is now exacerbated by the spreading Coronavirus. A significant change in the liquidity or financial position of our customers could have a material adverse impact on the collectability of accounts receivable and our future operating results.
Changes in allowance for doubtful accounts are summarized as follows:

                                           | Years Ended December 31, |
------------------------------------------ | ------------------------ | ------
                                           | 2019                     | 2018
Balances at beginning of period            | $1,856                   | $1,748
Additions from acquisition                 | 1,884                    | 416
Additions - charged to expense             | 4,207                    | 109
Deductions - write-offs, net of recoveries | (202)                    | (417)
Balances at end of period                  | $7,745                   | $1,856


Year ended December 31, 2019 compared with the year ended December 31, 2018:
Revenue in 2019 is derived from license agreements that we entered into with third-parties following negotiations pursuant to our patent licensing and enforcement program. The revenue decrease is primarily due to timing of revenues, as further described in "Item 1. Business" - "Licensing and Enforcement - Current Activities, Post 2013".
Cost of revenues includes contingent legal fees directly associated with our licensing and enforcement programs. Cost of revenues primarily decreased in proportion to the decrease in revenues.
Operating expenses consists of sales and marketing, general and administrative, and research and development. Selling, general and administrative expenses ("SG&A") consisted primarily of legal fees incurred in operations and employee headcount related expenses. These comprise approximately 60% of total SG&A expense. Litigation expenses increased $3.0 million to $19.4 million in 2019 compared to 2018 and are primarily due to the timing of various outstanding litigation actions. See "Item 3. Legal Proceedings". Employee headcount related expenses decreased $2.0 million to $3.6 million in 2019 compared to 2018, primarily due to lower incentive bonuses.
Research and development expense remained flat between years.
Other expense decreased in 2019 as we no longer have exposure from the warrant liability, and included $0.7 million related to the sale of our investment in JVP, offset by $0.3 million of net interest income.
Income tax provision (benefit) is primarily a function of income (loss) before income, state income tax expense (benefit) and federal benefit of foreign derived intangible tax benefit related to 2018.

For the Years Ended December 31,    |         |       |         |
----------------------------------- | ------- | ----- | ------- | --------
                                    | 2019    | 2018  | Change  | % Change
(In millions, except percentages)   |         |       |         |
Revenues                            | $13.2   | $82.3 | $(69.1) | (84)%
Cost of revenues                    | 1.9     | 15.3  | (13.4)  | (88)%
Gross profit                        | 11.3    | 67.0  | (55.7)  | (83)%
Gross margin                        | 86 %    | 81 %  |         |
Operating expenses:                 |         |       |         |
Selling, general and administrative | 31.7    | 32.2  | (0.5)   | (2)%
Research and development            | 2.0     | 2.1   | (0.1)   | (5)%
Total operating expenses            | 33.7    | 34.3  | (0.6)   | (2)%
Other expense                       | (0.3)   | (4.0) | 3.7     | (93)%
Income (loss) before income taxes   | (22.7)  | 28.7  | (51.4)  | (179)%
Income tax provision (benefit)      | (6.2)   | 8.0   | (14.2)  | (178)%
Net income (loss)                   | $(16.5) | $20.7 | $(37.2) | (180)%


Impairment of Goodwill
We recorded a goodwill impairment charge of $1.9 million in the fourth quarter of 2019, reducing the goodwill balance to zero at that time. We also recorded a goodwill impairment charge of $14.7 million in the third quarter of 2018. Refer to Note 2 and Note 6 of the accompanying consolidated financial statements for additional information on these goodwill impairment charges.

                         | Years Ended December 31, |                        | Change    |
------------------------ | ------------------------ | ---------------------- | --------- | -----
                         | 2019                     | 2018                   | $         | %
                         |                          | (dollars in thousands) |           |
Impairment of goodwill   | $1,910                   | $14,740                | $(12,830) | (87%)
Percent of revenues, net | 4%                       | 26%                    |           |


6. Other Balance Sheet Account Details
Allowance for Doubtful Accounts
The following table presents the changes in the allowance for doubtful accounts (in thousands):

                                                   | December 31, 2019 | December 31, 2018
-------------------------------------------------- | ----------------- | -----------------
Allowance for doubtful accounts, beginning balance | $319              | $983
Increase (decrease) of provision                   | (72)              | (26)
Write-offs                                         | (195)             | (638)
Allowance for doubtful accounts, ending balance    | $52               | $319


Constant underlying earnings per share
Constant underlying earnings per share (constant underlying EPS) is calculated as underlying profit attributable to shareholders’ equity at constant exchange rates and excluding the impact of both translational hedges and price growth in excess of 26% per year in hyperinflationary economies divided by the diluted average number of ordinary share units. This measure reflects the underlying earnings for each ordinary share unit of the Group in constant exchange rates.
The reconciliation of underlying profit attributable to shareholders’ equity to constant underlying earnings attributable to shareholders’ equity and the calculation of constant underlying EPS is as follows:
(a) Restated following adoption of IFRS 16. See note 1 and note 24 for further details.
(b) See note 7.
(c) See pages 28 and 29 for further details.

                                                                                | € million | € million
-------------------------------------------------------------------------------------- | --------- | -------------
                                                                                | 2019      | 2018
                                                                                |           | (Restated)(a)
Underlying profit attributable to shareholders’ equity(b)                              | 6,688     | 6,345
Impact of translation from current to constant exchange rates and translational hedges | 13        | 46
Impact of price growth in excess of 26% per year in hyperinflationary economies(c)     | (108)     | (10)
Constant underlying earnings attributable to shareholders’ equity                      | 6,593     | 6,381
Diluted combined average number of share units (millions of units)                     | 2,626.7   | 2,694.8
Constant underlying EPS (€)                                                            | 2.51      | 2.37


Share buybacks
On 28 January 2019, Vodafone announced the commencement of a new irrevocable and non-discretionary share buy-back programme. The sole purpose of the programme was to reduce the issued share capital of Vodafone and thereby avoid any change in Vodafone’s issued share capital as a result of the maturing of the second tranche of the mandatory convertible bond (‘MCB’) in February 2019.
In order to satisfy the second tranche of the MCB, 799.1 of million shares were reissued from treasury shares on 25 February 2019 at a conversion price of £1.8021. This reflected the conversion price at issue (£2.1730) adjusted for the pound sterling equivalent of aggregate dividends paid from August 2016 to February 2019.
The share buyback programme started in February 2019 and is expected to complete by 20 May 2019. Details of the shares purchased under the programme, including those purchased under irrevocable instructions, are shown below.

                       | Number of shares purchased | Average price paid per share inclusive of transaction costs | Total number of shares purchased under publicly announced share buyback programme | Maximum number of shares that may yet be purchased under the programme
---------------------- | -------------------------- | ----------------------------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------------------------------
Date of share purchase | 000s                       | Pence                                                       | 000s                                                                              | 000s
February 2019          | 14,529                     | 135.17                                                      | 14,529                                                                            | 784,539
March 2019             | 305,099                    | 140.56                                                      | 319,628                                                                           | 479,440
April 2019             | 290,570                    | 142.20                                                      | 610,198                                                                           | 188,870
May 2019 (to date)     | 116,228                    | 140.11                                                      | 726,426                                                                           | 72,642
Total                  | 726,426                    | 141.04                                                      | 726,426                                                                           | 72,642


The long-term rate of return assumption represents the expected average rate of earnings on the funds invested or to be invested to provide for the benefits included in the benefit obligations. That assumption is determined based on a number of factors, including historical market index returns, the anticipated long-term asset allocation of the plans, historical plan return data, plan expenses, and the potential to outperform market index returns.
We have the responsibility to formulate the investment policies and strategies for the plans’ assets. Our overall policies and strategies include: maintain the highest possible return commensurate with the level of assumed risk, and preserve benefit security for the plans’ participants.
We do not direct the day-to-day operations and selection process of individual securities and investments and, accordingly, we have retained the professional services of investment management organizations to fulfill those tasks. The investment management organizations have investment discretion over the assets placed under their management. We provide each investment manager with specific investment guidelines by asset class.

                                                                                |      | Years Ended September 30, |
---------------------------------------------------------------------------------------------------------- | ---- | ------------------------- | ----
                                                                                | 2019 | 2018                      | 2017
Weighted-average assumptions used to determine benefit obligation at September 30:                         |      |                           |
Discount rate                                                                                | 2.5% | 3.6%                      | 3.3%
Rate of compensation increase                                                                              | 3.1% | 3.3%                      | 3.2%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended September 30: |      |                           |
Discount rate                                                                                | 3.6% | 3.3%                      | 3.0%
Expected return on plan assets                                                                             | 5.7% | 6.8%                      | 6.8%
Rate of compensation increase                                                                              | 3.3% | 3.2%                      | 3.1%


A segment-level summary of the goodwill allocation is presented below.
The recoverable amount of the group’s intangible assets has been assessed based on value-in-use calculations. The value in use is calculated using a discounted cash flow methodology covering a four year period plus terminal value.
Cash flow forecasts

Cash flow forecasts are post-tax and based on the most recent financial projections covering a maximum of five years. Financial projections are based on assumptions that represent management’s best estimates.
Revenue growth rates

Revenue growth rates used are based on management’s latest four-year plan. Four-year growth rates averaged between 8.8% to 12.1% for these CGUs (Board & Systems - Americas 8.8%, Board & Systems - EMEA 12.1% and Parts Analytics and Search 11.8%). Sensitivity testing was performed on these CGUs and a reasonably possible decline in these rates would not cause the carrying value of any of these CGUs to exceed its recoverable amount.
Terminal value

The terminal value calculated after year four is determined using the perpetual growth model, having regard to the weighted average cost of capital (WACC) and terminal growth factor appropriate to each CGU. Terminal growth rates used in the financial projections was 2.0%.
Discount rates

Discount rates used are WACC and include a premium for market risks appropriate to each country in which the CGU operates. WACCs averaged 8.9% (Board & Systems - Americas 9.1%, Board & Systems - EMEA 8.6% and Parts Analytics and Search 9.1%).
Sensitivity  Any reasonable change to the above key assumptions would not cause the carrying value of any of the remaining CGU’s to materially exceed its recoverable amount.
Accounting policy for intangible assets
Goodwill

Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Intellectual property

Significant costs associated with intellectual property are deferred and amortised on a straight-line basis over the period of their expected benefit, being their finite life of 5 to 10 years.
Customer relationships

Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their expected benefit, being their finite life of 10 to 15 years.
Software intangibles

Software intangibles arise from costs associated with the direct development and implementation on an internal project on new and existing software utilised by the group which demonstrates the technical feasibility of providing future economic benefits and amortised on a straight-line basis over the period of their expected benefit, being their finite life of 2 to 5 years.
Accounting policy for intangible assets

                           | Consolidated |
-------------------------- | ------------ | ------
                           | 2019         | 2018
                           | US$000       | US$000
Goodwill                   |              |
Board & Systems - Americas | 10,672       | 8,324
Board & Systems - EMEA     | 5,383        | 5,383
Parts Analytics and Search | 13,444       | 13,444
Total                      | 29,499       | 27,151


Disaggregated Revenue
The Company has disaggregated revenue from contracts with customers into categories which depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Consequently, the disaggregation below is based on contract type.
Since the terms within these contract types are generally standard in nature, the Company does not believe that further disaggregation would result in increased insight into the economic factors impacting revenue and cash flows.
The following table shows the Company's shipping revenues disaggregated by nature of the charter arrangement for the years ended December 31, 2019 and 2018:
(1) Voyage charter revenues include approximately $10,152 and $7,600 of revenue related to short-term time charter contracts for the years ended December 31, 2019 and 2018, respectively.

                                    | Years Ended December 31, |
----------------------------------- | ------------------------ | --------
                                    | 2019                     | 2018
Time and bareboat charter revenues  | $263,683                 | $213,923
Voyage charter revenues(1)          | 33,275                   | 83,542
Contracts of affreightment revenues | 58,589                   | 68,698
Total shipping revenues             | $355,547                 | $366,163


Opening Balance Sheet Adjustment on January 1, 2018
As a result of applying the modified retrospective method to adopt ASC 606, the following amounts on our Consolidated Balance Sheet were adjusted as of January 1, 2018 to reflect the cumulative effect adjustment to the opening balance of Retained earnings (in millions):

                                          | As reported December 31, 2017 | Adjustments for ASC 606 adoption | Adjusted January 1, 2018
----------------------------------------- | ----------------------------- | -------------------------------- | ------------------------
Trade receivables, net                    | $201.8                        | $(6.2)                           | $195.6
Prepaid expenses and other current assets | 44.6                          | 11.8                             | 56.4
Receivables from related parties          | 18.1                          | (3.7)                            | 14.4
Computer software, net                    | 416.8                         | 1.8                              | 418.6
Deferred contract costs, net              | 136.1                         | 13.3                             | 149.4
Other non-current assets                  | 104.0                         | 3.3                              | 107.3
Total assets                              | 3,655.9                       | 20.3                             | 3,676.2
Deferred revenues (current)               | 59.6                          | (1.9)                            | 57.7
Deferred revenues (non-current)           | 100.7                         | 6.8                              | 107.5
Deferred income taxes                     | 224.6                         | 4.2                              | 228.8
Total liabilities                         | 1,947.1                       | 9.1                              | 1,956.2
Retained earnings                         | 201.4                         | 11.2                             | 212.6
Total equity                              | 1,708.8                       | 11.2                             | 1,720.0
Total liabilities and equity              | 3,655.9                       | 20.3                             | 3,676.2


VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and / or Manager:

                                                                                |                                                                 |                                                                        | (` lakh)
------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------
Particulars of Remuneration                                                                       | Name of MD/WTD/Manager                                          |                                                                        |
                                                                                | Rajesh Gopinathan Chief Executive Officer and Managing Director | N Ganapathy Subramaniam Chief Operating Officer and Executive Director | Total Amount
Gross salary                                                                                |                                                                 |                                                                        |
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961               | 115.74                                                          | 109.02                                                                 | 224.76
(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961                                    | 126.76                                                          | 13.30                                                                  | 140.06
(c) Profits in lieu of salary under Section 17(3) of the Income-tax Act, 1961                     | -                                                               | -                                                                      | -
2. Stock Option                                                                                | -                                                               | -                                                                      | -
3.Sweat Equity                                                                                | -                                                               | -                                                                      | -
4.Commission                                                                                | 1,300.00                                                        | 900.00                                                                 | 2,200.00
as % of profit                                                                                | 0.03                                                            | 0.02                                                                   | 0.05
5.Others, Allowances                                                                              | 60.35                                                           | 138.76                                                                 | 199.11
Total (A)                                                                                | 1,602.85                                                        | 1,161.08                                                               | 2,763.93
Ceiling as per the Act (@ 10% of profits calculated under Section 198 of the Companies Act, 2013) |                                                                 |                                                                        | 404,348.06


Ernst & Young LLP
Ernst & Young LLP fees incurred by us for fiscal 2018 and 2019 were as follows:
Audit Fees: Audit fees for fiscal 2018 and 2019 were for professional services rendered in connection with audits of our consolidated financial statements, statutory audits of our subsidiary companies, quarterly reviews, and assistance with documents that we filed with the SEC (including our Forms 10-Q and 8-K) for periods covering fiscal 2018 and 2019.
Audit-Related Fees: Audit-related fees for 2018 and 2019 were for professional services rendered in connection with consultations with management on various accounting matters, including audit of financial
statements of a carve-out entity and sell-side due diligence with respect to our previously announced Spin-Off.
Tax Fees: Tax fees for 2018 and 2019 were for tax compliance and consulting services.
All Other Fees: Other fees in 2018 and 2019 were for access to technical accounting services.

Services           | 2018 ($)  | 2019 ($)
------------------ | --------- | ----------
Audit Fees         | 5,859,755 | 5,024,093
Audit-Related Fees | 137,420   | 3,178,737
Tax Fees           | 1,440,168 | 2,346,879
All Other Fees     | 11,200    | 10,955
Total              | 7,448,544 | 10,560,664


INCOME TAX EXPENSE
Below is a summary of the difference between income tax expense computed by applying the statutory income tax rate to income before income tax expense and the actual income tax expense for the year.
Our effective income tax rate this year was 25.8% compared to 26.9% for 2018. The effective income tax rate for 2019 was lower than the statutory tax rate primarily as a result of a reduction to the Alberta corporate income tax rate over a four-year period.
Cash income taxes paid increased this year primarily as a result of the timing of installment payments.

                                                          | Years ended December31 |
--------------------------------------------------------- | ---------------------- | -----
(In millions of dollars, except tax rates)                | 2019                   | 2018
Statutory income tax rate                                 | 26.7%                  | 26.7%
Income before income tax expense                          | 2,755                  | 2,817
Computed income tax expense                               | 736                    | 752
Increase (decrease) in income tax expense resulting from: |                        |
Non-deductible stock-based compensation                   | –                      | 5
Non-deductible portion of equity losses                   | 7                      | 1
Income tax adjustment, legislative tax change             | (23)                   | -
Non-taxable portion of capital gains                      | (2)                    | (9)
Other items                                               | (6)                    | 9
Total income tax expense                                  | 712                    | 758
Effective income tax rate                                 | 25.8%                  | 26.9%
Cash income taxes paid                                    | 400                    | 370


Restructuring costs — Restructuring charges include costs resulting from the exploration of strategic alternatives (the “Strategic Alternatives Evaluation”) in 2019, and a plan that management initiated to reduce our general and administrative costs. Restructuring charges in 2018 also include costs related to the evaluation of potential alternatives with respect to the Qdoba brand (the “Qdoba Evaluation”), which resulted in the Qdoba Sale. Refer to Note 10, Discontinued Operations, for information regarding the Qdoba Sale.
The following is a summary of the costs incurred in connection with these activities during each fiscal year ( in thousands):
(1)  Strategic Alternative Evaluation costs are primarily related to third party advisory services.
(2)  Qdoba Evaluation consulting costs are primarily related to third party advisory services and retention compensation.

                                      | 2019   | 2018    | 2017
------------------------------------- | ------ | ------- | ------
Employee severance and related costs  | $7,169 | $7,845  | $724
Strategic Alternatives Evaluation (1) | 1,286  | —       | —
Qdoba Evaluation (2)                  | —      | 2,211   | 2,592
Other                                 | —      | 591     | 315
                                      | $8,455 | $10,647 | $3,631


Computer Equipment, Software, Furniture, and Leasehold Improvements, Net
Computer equipment, software, and furniture are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the lease term. Depreciation expense was $59.2 million in fiscal 2019, $67.6 million in fiscal 2018, and $73.1 million in fiscal 2017
Computer equipment, software, furniture, leasehold improvements and the related accumulated depreciation at January 31 were as follows:
Costs incurred for computer software developed or obtained for internal use are capitalized for application development activities, if material, and immediately expensed for preliminary project activities and post-implementation activities. These capitalized costs are amortized over the software’s expected useful life, which is generally three years.

                                                                                | 2019    | 2018
-------------------------------------------------------------------------------------- | ------- | -------
Computer hardware, at cost                                                             | $190.2  | $217.1
Computer software, at cost                                                             | 66.7    | 72.6
Leasehold improvements, land and buildings, at cost                                    | 247.8   | 228.9
Furniture and equipment, at cost                                                       | 67.2    | 63.4
Computer software, hardware, leasehold improvements, furniture, and equipment, at cost | 571.9   | 582.0
Less: Accumulated depreciation                                                         | (422.2) | (437.0)
Computer software, hardware, leasehold improvements, furniture, and equipment, net     | $149.7  | $145.0


11. Share-Based Compensation
As of March 31, 2019, the Company has four share-based compensation plans and an employee share purchase plan. Prior to the Company’s initial public offering (IPO) in November 2015, the Company granted share-based awards under three share option plans, which were the Mimecast Limited 2007 Key Employee Share Option Plan (the 2007 Plan), the Mimecast Limited 2010 EMI Share Option Scheme (the 2010 Plan), and the Mimecast Limited Approved Share Option Plan (the Approved Plan) (the 2007 Plan, the 2010 Plan and the Approved Plan, collectively, the Historical Plans).
Upon the closing of the IPO, the Mimecast Limited 2015 Share Option and Incentive Plan (the 2015 Plan) and the 2015 Employee Share Purchase Plan (the ESPP) became effective. Subsequent to the IPO, grants of share-based awards have been made under the 2015 Plan and no further grants under the Historical Plans are permitted.
The 2015 Plan allows the compensation committee to make equity-based incentive awards to our officers, employees, non-employee directors and consultants. Initially a total of 5.5 million ordinary shares were reserved for the issuance of awards under the 2015 Plan. This number is subject to adjustment in the event of a share split, share dividend or other change in our capitalization.
The 2015 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1st by 5% of the outstanding number of ordinary shares on the immediately preceding December 31 or such lesser number of shares as determined by the board of directors.
Under the 2015 Plan, the share option price may not be less than the fair market value of the ordinary shares on the date of grant and the term of each share option may not exceed 10 years from the date of grant. Share options typically vest over 4 years, but vesting provisions can vary based on the discretion of the board of directors.
The Company settles share option exercises under the 2015 Plan through newly issued shares. The Company’s ordinary shares underlying any awards that are forfeited, canceled, withheld upon exercise of an option, or settlement of an award to cover the exercise price or tax withholding, or otherwise terminated other than by exercise will be added back to the shares available for issuance under the 2015 Plan.
Initially, a total of 1.1 million shares of the Company's ordinary shares were reserved for future issuance under the ESPP. This number is subject to change in the event of a share split, share dividend or other change in capitalization. The ESPP may be terminated or amended by the board of directors at any time.
The ESPP permits eligible employees to purchase shares by authorizing payroll deductions from 1% to 10% of his or her eligible compensation during an offering period, a duration of six months. Unless an employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase shares on the last day of the offering period at a price equal to 85% of the fair market value of the shares on the first business day or last business day of the offering period, whichever is lower.
Share-based compensation expense recognized under the 2015 Plan, Historical Plans and ESPP in the accompanying consolidated statements of operations was as follows:
In certain situations, the board of directors has approved modifications to employee share option agreements, including acceleration of vesting or the removal of exercise restrictions for share options for which the service-based vesting has been satisfied, which resulted in additional share-based compensation expense. The total modification expense in the years ended March 31, 2019, 2018 and 2017 was $3.2 million, $0.5 million and $3.0 million, respectively.

                                       |         | Year ended March 31, |
-------------------------------------- | ------- | -------------------- | -------
                                       | 2019    | 2018                 | 2017
Cost of revenue                        | $1,684  | $1,053               | $1,353
Research and development               | 6,199   | 2,555                | 1,873
Sales and marketing                    | 7,856   | 4,477                | 4,719
General and administrative             | 10,215  | 3,649                | 2,349
Total share-based compensation expense | $25,954 | $11,734              | $10,294


Note 11: Property and Equipment
Property and equipment, net, consist of the following:
Depreciation expense, including amortization of capital leases, during fiscal years 2019, 2018, and 2017, was $182.1 million, $165.2 million, and $152.3 million, respectively.

                                                | June 30, 2019  | June 24, 2018
----------------------------------------------- | -------------- | -------------
                                                | (in thousands) |
Manufacturing and engineering equipment         | $1,039,454     | $911,140
Building sand improvements                      | 664,061        | 530,032
Computer and computer-related equipment         | 190,974        | 182,451
Office equipment, furniture and fixtures        | 82,115         | 66,378
Land                                            | 46,155         | 46,155
                                                | 2,022,759      | 1,736,156
Less: accumulated depreciation and amortization | (963,682)      | (833,609)
                                                | $1,059,077     | $902,547


Note 10. Intangible Assets and Goodwill
Intangible assets consist of the following (in millions):

                                    |              | March 31, 2019           |
----------------------------------- | ------------ | ------------------------ | ----------
                                    | Gross Amount | Accumulated Amortization | Net Amount
Core and developed technology       | $7,413.0     | $(1,112.9)               | $6,300.1
Customer-related                    | 917.1        | (544.0)                  | 373.1
In-process research and development | 7.7          | —                        | 7.7
Distribution rights                 | 0.3          | (0.2)                    | 0.1
Other                               | 7.3          | (2.7)                    | 4.6
Total                               | $8,345.4     | $(1,659.8)               | $6,685.6


FY19 EAIP Payout Results:
(1) Calculated in FY19 plan exchange rates and excludes stock-based compensation expense, charges related to the amortization of intangible assets, restructuring, separation, transition and other related expenses, contract liabilities fair value adjustment, acquisition-related costs and certain litigation settlement gains.
(2) Calculated in FY19 plan exchange rates and excludes contract liabilities fair value adjustment.

Weighted Average Company Performance Funding |                       |                         |                       |                       |
-------------------------------------------- | --------------------- | ----------------------- | --------------------- | --------------------- | -----------
Company Performance Metric                   | Target ($) (millions) | Threshold ($)(millions) | Actual ($) (millions) | Threshold Funding (%) | Funding (%)
Non-GAAP Operating Income                    | 1,630                 | 1,428                   | 1,427(1)              | 40                    | 0.0
Non-GAAP Revenue                             | 4,943                 | 4,760                   | 4,804(2)              | 40                    | 71.2
FY19 Funding                                 | .                     | .                       | .                     | .                     | 35.6


35 Related party transactions (continued)
Balances outstanding between the Group and members of Peel at 31 December 2019 and 31 December 2018 are shown below:
Under the terms of the Group’s acquisition of intu Trafford Centre from Peel in 2011, Peel has provided a guarantee in respect of Section 106 planning obligation liabilities at Barton Square which at 31 December 2019 totalled £13.0 million (2018: £12.4 million).
The net investment in finance leases above relate to three advertising services agreements related to digital screens with Peel Advertising Limited (a member of Peel) under which Peel will procure advertising on behalf of the Group. The minimum fixed payments in these agreements have been classified as a finance lease.
During the year intu shareholders approved, at a General Meeting held on 31 May 2019, the sale to the Peel Group of a 30.96 acre site near intu Braehead known as King George V docks (West) and additional plots of adjacent ancillary land for cash consideration of £6.1 million.
Other transactions
During the year, the Group sold a wholly owned subsidiary, which holds a plot of sundry land near intu Xanadú, to the intu Xanadú joint venture for consideration of £8.6 million. Consideration includes cash consideration of £4.3 million and a retained interest in the entity through the intu Xanadú joint venture. The cash flow statement records a net inflow of £4.0 million comprising the cash consideration less cash in the business of £0.3 million.

£m                              | 2019  | 2018
------------------------------- | ----- | -----
Net investment in finance lease | 0.8   | 1.2
Amounts owed by members of Peel | 0.3   | 0.3
Amounts owed to members of Peel | (0.1) | (0.1)


DEVELOPMENT OF GROSS DOMESTIC PRODUCT IN IMPORTANT WORLD REGIONS AND GERMANY
Year-on-year change in %
Real GDP growth corrected for purchasing power. Source: Oxford Economics
1 The previous year’s figures may slightly deviate from the Annual Report 2017/18, since retrospective corrections are being made by the data provider.
2 Outlook.

                              | 20181 | 20192
----------------------------- | ----- | -----
World                         | 3.6   | 2.9
Germany                       | 1.5   | 0.6
Western Europe (excl.Germany) | 1.9   | 1.3
Russia                        | 2.3   | 1.1
Eastern Europe (excl.Russia)  | 4.1   | 3.6
Asia                          | 5.6   | 4.9


Stock option and stock appreciation right (SAR) activity under the Company's stock incentive plans in the three years ended March 31, 2019 is set forth below:
The total intrinsic value of options and SARs exercised during the years ended March 31, 2019, 2018 and 2017 was $8.3 million, $7.4 million and $9.6 million, respectively. This intrinsic value represents the difference between the fair market value of the Company's common stock on the date of exercise and the exercise price of each equity award.
The aggregate intrinsic value of options and SARs outstanding at March 31, 2019 was $14.9 million. The aggregate intrinsic value of options and SARS exercisable at March 31, 2019 was $14.8 million. The aggregate intrinsic values were calculated based on the closing price of the Company's common stock of $82.96 per share on March 29, 2019.
As of March 31, 2019 and March 31, 2018, the number of option and SAR shares exercisable was 278,591 and 224,022, respectively, and the weighted average exercise price per share was $30.03 and $29.96, respectively.
There were no stock options granted in the years ended March 31, 2019, 2018 and 2017

                              | Number of Shares | Weighted Average Exercise Price per Share
----------------------------- | ---------------- | -----------------------------------------
Outstanding at March 31, 2016 | 913,508          | $33.00
Exercised                     | (437,906)        | 34.34
Forfeited or expired          | (42,485)         | 34.26
Outstanding at March 31, 2017 | 433,117          | 31.51
Exercised                     | (131,666)        | 31.75
Forfeited or expired          | (17,111)         | 34.73
Outstanding at March 31, 2018 | 284,340          | 31.21
Assumed upon acquisition      | 141,751          | 25.86
Exercised                     | (140,118)        | 27.67
Forfeited or expired          | (4,091)          | 39.62
Outstanding at March 31, 2019 | 281,882          | $30.16


Restricted Stock Grants—During 2019 and 2018, the Company granted 0.321 and 0.410 shares, respectively, of restricted stock to certain employee and director participants under its share-based compensation plans. Restricted stock grants generally vest over a period of 1 to 4 years. The Company recorded $72.5, $109.7 and $63.0 of compensation expense related to outstanding shares of restricted stock held by employees and directors during 2019, 2018 and 2017, respectively. In 2018, this expense included $29.4 associated with accelerated vesting due to the passing of our former executive chairman. A summary of the Company’s nonvested shares activity for 2019 and 2018 is as follows:
At December 31, 2019, there was $77.9 of total unrecognized compensation expense related to nonvested awards granted to both employees and directors under the Company’s share-based compensation plans. That cost is expected to be recognized over a weighted-average period of 1.8 years. Unrecognized compensation expense related to nonvested shares of restricted stock grants is recorded as a reduction to additional paid-in capital in stockholder’s equity at December 31, 2019.
Employee Stock Purchase Plan—During 2019, 2018 and 2017, participants of the ESPP purchased 0.021, 0.020 and 0.020 shares, respectively, of Roper’s common stock for total consideration of $6.8, $5.4, and $4.2, respectively. All of these shares were purchased from Roper’s treasury shares.

                               | Number of shares | Weighted-average grant date fair value
------------------------------ | ---------------- | --------------------------------------
Nonvested at December 31, 2017 | 0.859            | $ 187.01
Granted                        | 0.410            | 278.29
Vested                         | (0.492)          | 204.24
Forfeited                      | (0.038)          | 191.51
Nonvested at December 31, 2018 | 0.739            | $ 225.93
Granted                        | 0.321            | 318.75
Vested                         | (0.290)          | 209.05
Forfeited                      | (0.061)          | 225.23
Nonvested at December 31, 2019 | 0.709            | $ 275.00


Other non-current assets
Other non-current assets consisted of the following:
* As adjusted to reflect the impact of the full retrospective adoption of IFRS 15. See Note 2 for further details.
As of June 30, 2019 and 2018, the Group had certificates of deposit and time deposits totaling $3.7 million and $3.7 million which were classified as long-term and were included in security deposits. Included in the Group’s other non-current assets balance as of June 30, 2019 and 2018 were $7.1 million and $6.6 million respectively, of restricted cash used for commitments of standby letters of credit related to facility leases and were not available for the Group’s use in its operations.

                                 | As of June 30,        |
-------------------------------- | --------------------- | ------------
                                 | 2019                  | 2018
                                 | (U.S. $ in thousands) |
                                 |                       | *As Adjusted
Marketable equity securities     | $58,932               | $—
Non-marketable equity securities | 3,000                 | —
Security deposits                | 5,010                 | 5,248
Other                            | 9,703                 | 8,218
                                 | $76,645               | $13,466


Cash Flows
Operating Activities: For 2019, cash provided by operating activities was due primarily to cash generated by our operations and the effect of working capital adjustments, which included a $2.43 billion decrease in receivables due to a lower level of net sales and a $1.53 billion increase in inventory due to higher levels of work in process and raw materials inventories.
For 2018, cash provided by operating activities was due primarily to cash generated by our operations and the effect of working capital adjustments, which included a $1.73 billion increase in receivables due to a higher level of net sales.
For 2017, cash provided by operating activities was due primarily to cash generated by our operations and the effect of working capital adjustments, which included a $1.65 billion increase in receivables due to a higher level of net sales, $361 million of payments attributed to intercompany balances in connection with the Inotera Acquisition, and a $456 million increase in accounts payable and accrued expenses.
Investing Activities: For 2019, net cash used for investing activities consisted primarily of $9.03 billion of expenditures for property, plant, and equipment (net of partner contributions) and $1.17 billion of net outflows from sales, maturities, and purchases of available-for-sale securities.
For 2018, net cash used for investing activities consisted primarily of $7.99 billion of expenditures for property, plant, and equipment (net of partner contributions), partially offset by $164 million of net inflows from sales, maturities, and purchases of available-for-sale securities.
For 2017, net cash used for investing activities consisted primarily of $4.73 billion of expenditures for property, plant, and equipment (net of partner contributions), $2.63 billion of net cash paid for the Inotera Acquisition (net of $361 million of payments attributed to intercompany balances with Inotera included in operating activities), and $269 million of net outflows from sales, maturities, and purchases of available-for-sale securities.
Financing Activities: For 2019, net cash used for financing activities consisted primarily of $2.66 billion for the acquisition of 67 million shares of treasury stock under our $10 billion share repurchase authorization and cash payments to reduce our debt, including $1.65 billion to settle conversions of notes, $728 million to prepay the 2022 Term Loan B, $316 million for IMFT member debt repayments, and $643 million for scheduled repayment of other notes and capital leases. Cash used for financing activities was partially offset by net proceeds of $3.53 billion from the aggregate issuance of the 2024 Notes, 2026 Notes, 2027 Notes, 2029 Notes, and 2030 Notes.
For 2018, net cash used for financing activities consisted primarily of cash payments to reduce our debt, including $9.42 billion to prepay or repurchase debt and settle conversions of notes and $774 million for scheduled repayment of other notes and capital leases. Cash used for financing activities was partially offset by net proceeds of $1.36 billion from the issuance of 34 million shares of our common stock for $41.00 per share in a public offering and $1.01 billion of proceeds from IMFT member debt.
For 2017, net cash provided by financing activities consisted primarily of $2.48 billion of net proceeds from the 2021 MSTW Term Loan, and $795 million of net proceeds from the 2021 MSAC Term Loan, partially offset by $1.63 billion to repurchase notes, repayments of $381 million of capital lease obligations, repayments of $550 million of other debt and convertible notes, and payments of $519 million on equipment purchase contracts.
See "Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Debt."

For the year ended                                                                          | 2019     | 2018    | 2017
------------------------------------------------------------------------------------------- | -------- | ------- | -------
Net cash provided by operating activities                                                   | $13,189  | $17,400 | $8,153
Net cash provided by (used for) investing activities                                        | (10,085) | (8,216) | (7,537)
Net cash provided by (used for) financing activities                                        | (2,438)  | (7,776) | 349
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash | 26       | (37)    | (12)
Net increase in cash, cash equivalents, and restricted cash                                 | $692     | $1,371  | $953


Impairment test for goodwill
Goodwill is allocated to the appropriate cash-generating unit (‘CGU’) based on the smallest identifiable group of assets that generates cash inflows independently in relation to the specific goodwill. The recoverable amount of the CGU is determined from value-in-use calculations that use cash flow projections from the latest three-year plan. The carrying value of CGUs is the sum of goodwill, property, plant and equipment and intangibles and is as follows:

        | 2019  | (Restated) 2018
------- | ----- | ---------------
        | £m    | £m
Digital | 327.6 | 342.6
Webzone | 6.6   | 6.9
Total   | 334.2 | 349.5


7. LOANS PAYABLE
Plan B, a subsidiary of the Company, entered into a business loan agreement, prior to being acquired by the Company, with Tri Counties Bank dated March 14, 2014, in the original amount of $131 bearing interest at 4.95%. The loan agreement called for monthly payments of $2 and was scheduled to mature on March 14, 2019. Proceeds from the loan were used to purchase a pile driver and related equipment and is secured by the equipment. The loan was fully paid off during the year ended December 31, 2019.
Plan B entered into a business loan agreement prior to being acquired by the Company, with Tri Counties Bank dated April 9, 2014, in the original amount of $250 bearing interest at 4.95%. The loan agreement calls for monthly payments of $5 and was scheduled to mature on April 9, 2019. Proceeds from the loan were used to purchase racking inventory and related equipment. The loan was secured by the inventory and equipment. The loan was fully paid off during the year ended December 31, 2019.
On January 5, 2016, the Company entered into a loan agreement for the acquisition of a pile driver in the principal amount of $182 bearing interest at 5.5%. The loan agreement calls for monthly payments of $4 and is scheduled to mature on January 15, 2020. The loan is secured by the equipment. The outstanding balance at December 31, 2019, is $4.
On September 8, 2016, the Company entered into a loan agreement for the acquisition of a pile driver in the principal amount of $174 bearing interest at 5.5%. The loan agreement calls for monthly payments of $4 and is scheduled to mature on September 15, 2020. The loan is secured by the equipment. The outstanding balance at December 31, 2019, is $36.
On November 14, 2016, the Company entered into a 0% interest loan agreement for the acquisition of an excavator in the principal amount of $59. The loan agreement calls for monthly payments of $1 and is scheduled to mature on November 13, 2020. The loan is secured by the equipment. The outstanding balance at December 31, 2019, is $13.
On December 23, 2016, the Company entered into a loan agreement for the acquisition of modular office systems and related furniture in the principal amount of $172 bearing interest at 4.99%. The loan agreement calls for 16 quarterly payments of $12 and is scheduled to mature in September 2020. The loan is secured by the equipment. The outstanding balance at December 31, 2019, is $35.
As of December 31, 2019 and 2018, loans payable are summarized as follows:

                                             | 2019 | 2018
-------------------------------------------- | ---- | -----
Business loan agreement dated March 14, 2014 | -    | 7
Business loan agreement dated April 9, 2014  | -    | 19
Equipment notes payable                      | 88   | 241
Subtotal                                     | 88   | 267
Less: Current position                       | (88) | (179)
Long-term position                           | -    | $88


DEBT DERIVATIVES
We use cross-currency interest rate agreements (debt derivatives) to manage risks from fluctuations in foreign exchange rates associated with our US dollar-denominated senior notes and debentures, lease liabilities, credit facility borrowings, and US CP borrowings. We designate the debt derivatives related to our senior notes and debentures and lease liabilities as hedges for accounting purposes against the foreign exchange risk associated with specific debt instruments. Debt derivatives related to our credit facility and US CP borrowings have not been designated as hedges for accounting purposes.
1 Converting from a fixed US$ coupon rate to a weighted average Cdn$ fixed rate.
Settlement of debt derivatives related to senior notes We did not settle any debt derivatives related to senior notes during 2019.
In April 2018, we settled the debt derivatives related to the repayment of the entire outstanding principal amount of our US$1.4 billion ($1.8 billion) 6.8% senior notes otherwise due in August 2018. See “Sources and Uses of Cash” for more information.

                                                               |                                  | US$           |             | Hedging effect                      |
-------------------------------------------------------------- | -------------------------------- | ------------- | ----------- | ----------------------------------- | -----------------
(In millions of dollars, except interest rates) Effective date | Principal/ Notional amount (US$) | Maturity date | Coupon rate | Fixed hedged (Cdn$) interest rate 1 | Equivalent (Cdn$)
2019 issuances                                                 |                                  |               |             |                                     |
April 30, 2019                                                 | 1,250                            | 2049          | 4.350%      | 4.173%                              | 1,676
November 12, 2019                                              | 1,000                            | 2049          | 3.700%      | 3.996%                              | 1,308
2018 issuances                                                 |                                  |               |             |                                     |
February 8, 2018                                               | 750                              | 2048          | 4.300%      | 4.193%                              | 938


The following table sets forth, for the periods indicated, our working capital:
Working Capital consists of current assets net of current liabilities. Working capital decreased $0.4 million to $12.3 million at December 31, 2019 compared with $12.7 million at December 31, 2018. The decrease was primarily a result of an increase of cash, accounts receivable, and inventory offset by an increase in accounts payable, accrued expenses and current operating lease liabilities.
We normally carry three to four weeks of finished goods inventory. The average duration of our accounts receivable is approximately 25 days.
For the year ended December 31, 2019 our capital resources consisted of primarily $9.5 million cash on hand and $33.0 million available under our credit facilities, net of $2.0 million reserved for two letters of credit. For the year ended December 31, 2018, our capital resources consisted primarily of $7.5 million cash on hand and $30.0 million available under our credit facilities. The Credit Facilities will mature in May 2024.
We borrowed $72.3 million under our credit facilities during 2019, of which $18.5 million was repaid prior to the end of the year. As of December 31, 2019, we had $54.5 million of debt outstanding (including $0.7 million of debt issuance costs) under our credit facilities. There was no debt outstanding under the credit facilities as of December 31, 2018.

                                                            | For the Twelve Months Ended December 31, |
----------------------------------------------------------- | ---------------------------------------- | -------
                                                            | 2019                                     | 2018
                                                            | (Dollars in thousands)                   |
Cash and cash equivalents                                   | 9,472                                    | 7,554
Accounts receivable, net of allowance for doubtful accounts | 18,581                                   | 12,327
Inventories, net                                            | 12,542                                   | 9,317
Prepaid expenses                                            | 3,276                                    | 1,078
Other current assets                                        | 10,453                                   | 682
Accounts payable                                            | (18,668)                                 | (9,166)
Accrued expenses                                            | (22,133)                                 | (9,051)
Current operating lease liabilities                         | (1,185)                                  | —
Total Working Capital                                       | $12,338                                  | $12,741


The following highlights net sales by geographic location (amounts in thousands):
(1) Revenues are attributed to countries or regions based on the location of the customer. Net Sales to one customer, TTI, Inc., exceeded 10% of total net sales as follows: $184.3 million, $133.5 million and $104.4 million in fiscal years 2019, 2018 and 2017, respectively.
(2) No country included in this caption exceeded 3% of consolidated net sales for fiscal years 2019, 2018 and 2017.
(3) Fiscal years ended March 31, 2018 and 2017 adjusted due to the adoption of ASC 606.

                            |            | Fiscal Years Ended March 31,(1) |
--------------------------- | ---------- | ------------------------------- | --------
                            | 2019       | 2018                            | 2017
United States               | $292,980   | $233,133                        | $198,250
Hong Kong                   | 188,102    | 169,073                         | 121,813
Germany                     | 124,805    | 105,548                         | 104,755
Europe (2) (3)              | 76,149     | 64,248                          | 63,863
China                       | 173,148    | 163,016                         | 71,223
Taiwan                      | 88,853     | 78,728                          | 9,147
Asia Pacific (2)            | 47,233     | 36,647                          | 26,878
Japan                       | 178,502    | 170,282                         | 3,565
United Kingdom              | 42,472     | 37,038                          | 33,837
Netherlands                 | 44,065     | 39,684                          | 32,478
Malaysia                    | 33,748     | 28,165                          | 15,177
Singapore                   | 19,417     | 17,267                          | 15,565
Italy                       | 15,551     | 17,905                          | 15,376
Hungary                     | 12,245     | 13,254                          | 18,856
Mexico                      | 44,267     | 23,915                          | 22,424
Other Countries (2)         | 1,281      | 2,278                           | 4,131
Total Non-United States (3) | 1,089,838  | 967,048                         | 559,088
                            | $1,382,818 | $1,200,181                      | $757,338


NOTE 7 - continued
Lease payments not recognized as a liability The Group has elected not to recognize a lease liability for short-term leases (leases of an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The expenses relating to payments not recognized as a lease liability are insignificant.
Administrative expenses The total outflow for leases, USD 2.9m, is presented as “Depreciation” of USD 2.5m and “Financial expenses” (interest) of USD 0.4m, in contrast to the recording of an operating lease charge of a materially equivalent figure within the line item “Administrative expenses” under IAS 17.
Financial expenses
Financial expenses for the reporting periods:

USDm                                                                            | 2019 | 2018 | 2017
------------------------------------------------------------------------------- | ---- | ---- | ----
Interest expenses:                                                              | -    | -    | -
Financial expenses arising from lease liabilities regarding right-of-use assets | 2.4  | 2.3  | 1.8
Other financial expenses                                                        | 39.5 | 37.0 | 38.8
Total                                                                           | 41.9 | 39.3 | 40.6


5. Earnings per Common Share
The calculations of basic and diluted earnings per common share for the years ended June 30, 2019, 2018 and 2017 were as follows:

                                                                                |        | Years Ended June 30, |
-------------------------------------------------------------------------------------------- | ------ | -------------------- | -----
(in millions, except per share data)                                                         | 2019   | 2018                 | 2017
Net income                                                                                | $167.0 | $188.5               | $47.0
Less: earnings and dividends allocated to participating securities                           | (1.9)  | (1.7)                | (0.3)
Earnings available for common shareholders used in calculation of basic earnings per share   | $165.1 | $186.8               | $46.7
Weighted average number of common shares outstanding, basic                                  | 47.7   | 47.2                 | 47.0
Basic earnings per common share                                                              | $3.46  | $3.96                | $0.99
Net income                                                                                | $167.0 | $188.5               | $47.0
Less: earnings and dividends allocated to participating securities                           | (1.9)  | (1.7)                | (0.3)
Earnings available for common shareholders used in calculation of diluted earnings per share | $165.1 | $186.8               | $46.7
Weighted average number of common shares outstanding, basic                                  | 47.7   | 47.2                 | 47.0
Effect of shares issuable under share-based compensation plans                               | 0.4    | 0.4                  | 0.1
Weighted average number of common shares outstanding, diluted                                | 48.1   | 47.6                 | 47.1
Diluted earnings per common share                                                            | $3.43  | $3.92                | $0.99


COMPENSATION DISCUSSION AND ANALYSIS
IV. Our 2019 Compensation Program and Components of Pay The table below shows (i) the length of the “protected period” afforded to officers following a change of control and (ii) the multiple of salary and bonus payment and years of welfare benefits to which officers will be entitled if change of control benefits become payable under our agreements and related policies:
For more information on change of control arrangements applicable to our executives, including our rationale for
providing these benefits, see “Executive Compensation—Potential Termination Payments—Payments Made
Upon a Change of Control.” For information on change of control severance benefits payable to our junior
officers and managers, see “—Severance Benefits” in the next subsection below.

                 | Protected Period | Multiple of Annual Cash Compensation | Years of Welfare Benefits
---------------- | ---------------- | ------------------------------------ | -------------------------
CEO              | 2 years          | 3 times                              | 3 years
Other Executives | 1.5 years        | 2 times                              | 2 years
Other Officers   | 1 year           | 1 time                               | 1 year


Cash and Cash Equivalents and Restricted Cash: Cash equivalents include short-term highly liquid investments and are classified as Level 1 in the fair value hierarchy described below. Restricted cash represents cash received from customers to settle invoices sold under accounts receivable purchase agreements that is contractually required to be set aside. The restrictions will lapse when the cash is remitted to the purchaser of the receivables. Restricted cash is also classified as Level 1 in the fair value hierarchy described below.
As of September 28, 2019 and September 29, 2018, cash and cash equivalents and restricted cash consisted of the following (in thousands):

                                                    | 2019    | 2018
--------------------------------------------------- | ------- | -------
Cash                                                | $85,688 | $99,197
Money market funds and other                        | 138,073 | 198,072
Restricted cash                                     | 2,493   | 417
Total cash and cash equivalents and restricted cash | 226,254 | 297,686


The valuation allowance activity for the years ended September 30, 2019, 2018, and 2017 is as follows:
The Company completed an Internal Revenue Code Section 382 analysis of the loss carry forwards in 2009 and determined then that all of the Company’s loss carry forwards are utilizable and not restricted under Section 382. The Company has not updated its Section 382 analysis subsequent to 2009 and does not believe there have been any events subsequent to 2009 that would impact the analysis.
The Company is required to recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applies the interpretation to all tax positions for which the statute of limitations remained open. The Company had no liability for unrecognized tax benefits and did not recognize any interest or penalties during the years ended September 30, 2019, 2018, or 2017.
The Company is subject to income taxes in the U.S. federal jurisdiction, and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local, income tax examinations by tax authorities for fiscal years ending prior to 2004. We are generally subject to U.S. federal and state tax examinations for all tax years since 2003 due to our net operating loss carryforwards and the utilization of the carryforwards in years still open under statute. During the year ended September 30, 2018, the Company was examined by the U.S. Internal Revenue Service for fiscal year 2016. This examination resulted in no adjustments. The Company changed its fiscal year end in 2007 from March 31 to September 30.

Year Ended         | Balance at Beginning of Year | Income Tax Expense (Benefit) | Reversal for State NOL Expiration and Utilization | Balance at End of Year
------------------ | ---------------------------- | ---------------------------- | ------------------------------------------------- | ----------------------
September 30, 2019 | $104,858                     | $10,448                      | $(68,292)                                         | $47,014
September 30, 2018 | 159,154                      | 79,377                       | (133,673)                                         | 104,858
September 30, 2017 | 322,404                      | (32,154)                     | (131,096)                                         | 159,154


C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD
Note: For more information, please refer to the Corporate Governance Report.

Particulars of Remuneration                                                         | Key Managerial Personnel               |                                     |
----------------------------------------------------------------------------------- | -------------------------------------- | ----------------------------------- | ------
                                                                                | Ramakrishnan V Chief Financial Officer | Rajendra Moholkar Company Secretary | Total
1. Gross salary                                                                     |                                        |                                     |
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 | 72.06                                  | 21.66                               | 93.72
(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961                      | 43.54                                  | 1.20                                | 44.74
(c) Profits in lieu of salary under Section 17(3) of the Income-tax Act, 1961       | -                                      | -                                   | -
2. Stock Option                                                                     | -                                      | -                                   | -
3. Sweat Equity                                                                     | -                                      | -                                   | -
4. Commission                                                                       | -                                      | -                                   | -
as % of profit                                                                      | -                                      | -                                   | -
5. Others, Allowances                                                               | 297.47                                 | 117.29                              | 414.76
Total                                                                               | 413.07                                 | 140.15                              | 553.22


Movement of options during the year ended 30 June 2018:
The weighted average fair value of options granted during the year was nil (2018: nil) as there were none issued during the year.
The weighted average share price for share options exercised during the period was $3.57 (2018: $3.90).
The weighted average remaining contractual life for share options outstanding at the end of the period was 1.68 years (2018: 2.47 years).
The weighted average remaining contractual life for share options outstanding at the end of the period was 1.68 years (2018: 2.47 years).

Grant Date                      | Exercise Date | Expiry Date    | Exercise Price $ | No. of Options at Beg. of Year | Options Exercised or Lapsed | No. of Options at End of Year
------------------------------- | ------------- | -------------- | ---------------- | ------------------------------ | --------------------------- | -----------------------------
2 Jul 2012                      | 2 Jul 2015    | 2 Jul 2017     | 0.92             | 40,000                         | (40,000)                    | -
2 Jul 2013                      | 2 Jul 2016    | 30 Sept 2018 1 | 0.92             | 295,000                        | (220,000)                   | 75,000
2 Jul 2014                      | 2 Jul 2017    | 2 Jul 2019     | 1.30             | 875,000                        | (405,000)                   | 470,000
2 Jul 2015                      | 2 Jul 2018    | 2 Jul 2020     | 2.67             | 1,000,000                      | -                           | 1,000,000
22 Dec 2016                     | 31 Aug 2019   | 22 Dec 2021    | 3.59             | 1,323,730                      | -                           | 1,323,730
Total                           |               |                |                  | 3,533,730                      | (665,000)                   | 2,868,730
Weighted average exercise price |               |                |                  |                                | $1.15                       | $2.82


Common Stock Outstanding
The following represents the common stock outstanding for the fiscal year ended:
(1) During fiscal years 2018, 2017 and 2016, the Company’s Board of Directors authorized the repurchase of $350.0 million, $450.0 million and $400.0 million, respectively, of the Company’s common stock under share repurchase programs, which were repurchased during fiscal years 2019, 2018 and 2017, respectively.

                                                       |              | Fiscal Year Ended August 31, |
------------------------------------------------------ | ------------ | ---------------------------- | ------------
                                                       | 2019         | 2018                         | 2017
Common stock outstanding:                              |              |                              |
Beginning balances                                     | 164,588,172  | 177,727,653                  | 186,998,472
Shares issued upon exercise of stock options           | 11,348       | 30,832                       | 172,620
Shares issued under employee stock purchase plan       | 1,282,042    | 1,105,400                    | 1,228,316
Vesting of restricted stock                            | 1,983,261    | 2,727,229                    | 2,102,049
Purchases of treasury stock under employee stock plans | (489,836)    | (793,052)                    | (550,096)
Treasury shares purchased(1)                           | (13,854,607) | (16,209,890)                 | (12,223,708)
Ending balances                                        | 153,520,380  | 164,588,172                  | 177,727,653


Liquidity and Capital Resources
As of December 31, 2019 and 2018, we had cash and cash equivalents of $343.6 million and $566.3 million, respectively. We finance our operations primarily through sales to our customers and a majority of our customers are billed monthly. For customers with annual or multi-year contracts and those who opt for annual invoicing, we generally invoice only one annual period in advance and all invoicing occurs at the start of the respective subscription period. Revenue is deferred for such advanced billings. We also finance our operations from proceeds from issuance of stock under our stock plans, and proceeds from issuance of debt. We believe that our operations and existing liquidity sources will satisfy our cash requirements for at least the next 12 months
Our future capital requirements will depend on many factors, including revenue growth and costs incurred to support customer growth, acquisitions and expansions, sales and marketing, research and development, increased general and administrative expenses to support the anticipated growth in our operations, and capital equipment required to support our growing headcount and in support of our co-location data center facilities. Our capital expenditures in future periods are expected to grow in line with our business. We continually evaluate our capital needs and may decide to raise additional capital to fund the growth of our business, to further strengthen our balance sheet, or for general corporate purposes through public or private equity offerings or through additional debt financing. We also may in the future make investments in or acquire businesses or technologies that could require us to seek additional equity or debt financing. Access to additional capital may not be available, or on favorable terms
The table below provides selected cash flow information for the periods indicated (in thousands)

                                                                       |            | Year ended December 31, |
---------------------------------------------------------------------- | ---------- | ----------------------- | --------
                                                                       | 2019       | 2018                    | 2017
Net cash provided by operating activities                              | $64,846    | $72,130                 | $41,165
Net cash used in investing activities                                  | (296,780)  | (83,448)                | (26,387)
Net cash provided by financing activities                              | 9,042      | 397,255                 | 6,783
Effect of exchange rate changes                                        | 169        | (800)                   | (724)
Net (decrease) increase in cash, cash equivalents, and restricted cash | $(222,723) | 385,137                 | 20,837


FOURTH QUARTER HIGHLIGHTS
BCE operating revenues grew by 1.6% in Q4 2019, compared to Q4 2018, driven by growth in Bell Wireless and Bell Media, while Bell Wireline remained stable year over year. The year-over-year increase reflected both higher service and product revenues of 0.9% and 5.7%, respectively.
BCE net earnings increased by 12.6% in Q4 2019, compared to Q4 2018, mainly due to higher adjusted EBITDA, lower other expense and lower severance, acquisition and other costs. This was partly offset by higher depreciation and amortization expense and finance costs. The adoption of IFRS 16 did not have a significant impact on net earnings.
BCE adjusted EBITDA increased by 4.8% in Q4 2019, compared to Q4 2018, driven by growth across all three of our segments. This resulted in an adjusted EBITDA margin of 39.7% in the quarter, up 1.2 pts over Q4 2018, primarily due to the favourable impact from the adoption of IFRS 16 in 2019.
Bell Wireless operating revenues increased by 3.6% in Q4 2019, compared to Q4 2018, driven by higher service and product revenues. Service revenues grew by 1.6% year over year due to continued growth in both our postpaid and prepaid subscriber base along with rate increases and a greater mix of customers subscribing to higher-value monthly plans including unlimited data plans. This was moderated by greater sales of premium handsets along with the impact of higher value monthly plans, and lower data overage driven by increased customer adoption of unlimited data plans. Product revenues grew by 7.4% year over year, driven by increased sales of premium handsets and the impact of higher-value monthly plans in our sales mix.
Bell Wireless adjusted EBITDA increased by 7.4% in Q4 2019, compared to the same period last year, mainly driven by the flow-through of higher revenues, partially offset by higher operating expenses of 1.4% year over year. The increase in operating expenses was primarily due to higher product cost of goods sold from greater mix of premium handsets and increased handset costs, higher network operating costs to support the growth in our subscriber base and data consumption and higher bad debt expense driven by the growth in revenues. This was offset in part by the favourable impact from the adoption of IFRS 16 in 2019. Adjusted EBITDA margin, based on wireless operating revenues, of 37.9% increased by 1.4 pts over Q4 2018, mainly due to the impact from the adoption of IFRS 16, greater service revenue flow-through and promotional spending discipline during the holiday season, moderated by higher low-margin product sales in our total revenue base.
Bell Wireline operating revenues remained unchanged in Q4 2019, compared to Q4 2018, resulting from stable year-over-year service revenue which increased 0.1%, as the continued expansion of our retail Internet and IPTV subscriber bases, residential rate increases, contribution from the federal election and higher business solution services revenue were offset by ongoing subscriber erosion in voice and satellite TV, greater acquisition, retention and bundle discounts on residential services to match competitor promotions, lower TV pay-per-view revenues and a decline in IP connectivity revenues due in part to migration to Internet based services. Product revenues were relatively stable year over year, declining 0.6% or $1 million.
Bell Wireline adjusted EBITDA grew by 1.5% in Q4 2019, compared to Q4 2018, mainly due to lower operating costs of 1.1%, driven by the favourable impact from the adoption of IFRS 16 in 2019 and continued effective cost containment. Adjusted EBITDA margin increased 0.6 pts to 43.3% in Q4 2019, compared to Q4 2018, mainly due to the favourable impact from the adoption of IFRS 16 in 2019.
Bell Media operating revenues increased by 3.4% in Q4 2019, compared to the same period last year, driven by increased subscriber revenues from the continued growth in Crave due to higher subscribers along with rate increases following the launch of our enhanced Crave service in November 2018 and also reflected the favourability from BDU contract renewals. Advertising revenues declined modestly in Q4 2019, compared to Q4 2018, from lower conventional TV advertising revenues and ongoing market softness in radio, partially offset by continued growth in specialty TV and OOH advertising revenues.
Bell Media adjusted EBITDA increased by 16.5% in Q4 2019, compared to the same period last year, driven by higher operating revenues coupled with stable operating expenses as the favourable impact from the adoption of IFRS 16 in 2019 was offset by the growth in programming and content costs related to higher sports broadcast rights costs and ongoing Crave content expansion.
BCE capital expenditures of $1,153 million in Q4 2019 increased by $179 million over Q4 2018 and corresponded to a capital intensity ratio of 18.3% compared to 15.7% last year. The growth in capital investments was driven by increases across all three of our segments. Wireline capital spending was $96 million higher year over year, mainly due to the timing of our spending, driven by the roll-out of fixed WTTP to rural locations in Ontario and Québec. Capital spending at Bell Wireless was 7 MD&A Selected annual and quarterly information BCE Inc. 2019 Annual Report 87 up $78 million in Q4 2019 over Q4 2018, due to the timing of our spending compared to Q4 2018 as we continue to invest in wireless small cells to expand capacity to support subscriber growth, and increase speeds, coverage and signal quality, as well as to expand data fibre backhaul in preparation for 5G technology. Bell Media capital investments increased $5 million compared to Q4 2018 mainly related to continued investment in digital platforms.
BCE severance, acquisition and other costs of $28  million in Q4 2019 decreased by $30 million, compared to Q4 2018, mainly due to lower acquisition and other costs.
BCE depreciation of $865 million in Q4 2019 increased by $66 million, year over year, mainly due to the adoption of IFRS 16.
BCE amortization was $228 million in Q4 2019, up from $216 million in Q4 2018, mainly due to a higher asset base.
BCE interest expense was $286 million in Q4 2019, up from $259 million in Q4 2018, mainly as a result of the adoption of IFRS 16 and higher average debt levels.
BCE other expense of $119 million in Q4 2019 decreased by $39 million, year over year, mainly due to lower impairment charges at our Bell Media segment and higher gains on investments which included BCE’s obligation to repurchase at fair value the minority interest in one of BCE’s subsidiaries, partly offset by higher net mark-to-market losses on derivatives used to economically hedge equity settled share-based compensation plans.
BCE income taxes of $243 million in Q4 2019 decreased by $1 million, compared to Q4 2018, mainly as a result of a higher value of uncertain tax positions favourably resolved in Q4 2019, partly offset by higher taxable income.
BCE net earnings attributable to common shareholders of $672 million in Q4 2019, or $0.74 per share, were higher than the $606 million, or $0.68 per share, reported in Q4 2018. The year-over-year increase was mainly due to higher adjusted EBITDA, lower other expense and lower severance, acquisition and other costs. This was partly offset by higher depreciation and amortization expense and finance costs. The adoption of IFRS 16 did not have a significant impact on net earnings. Adjusted net earnings remained stable at $794 million in Q4 2019, compared to Q4 2018, and adjusted EPS decreased to $0.88, from $0.89 in Q4 2018.
BCE cash flows from operating activities was $2,091 million in Q4 2019 compared to $1,788 million in Q4 2018. The increase is mainly attributable to higher adjusted EBITDA, which reflects the favourable impact from the adoption of IFRS 16, a voluntary DB pension plan contribution of nil in 2019 compared to $240 million paid in 2018, an increase in operating assets and liabilities, and lower interest paid, partly offset by higher income taxes paid.
BCE free cash flow generated in Q4 2019 was $894 million, compared to $1,022 million in Q4 2018. The decrease was mainly attributable to higher capital expenditures, partly offset by higher cash flows from operating activities, excluding voluntary DB pension plan contributions and acquisition and other costs paid.

OPERATING REVENUES           | Q4 2019 | Q4 2018 | $ CHANGE | % CHANGE
---------------------------- | ------- | ------- | -------- | --------
Bell Wireless                | 2,493   | 2,407   | 86       | 3.6%
Bell Wireline                | 3,138   | 3,137   | 1        | –
Bell Media                   | 879     | 850     | 29       | 3.4%
Inter-segment eliminations   | (194)   | (179)   | (15)     | (8.4%)
Total BCE operating revenues | 6,316   | 6,215   | 101      | 1.6%


As at 31 December 2019, the Group had net debt of RMB15,552 million, compared to net debt of RMB7,173 million as at 30 September 2019. The sequential increase in indebtedness mainly reflected payments for M&A initiatives and media contents, as well as the consolidation of indebtedness at Halti, partly offset by strong free cash flow generation.
As at 31 December 2019, the Group had net debt of RMB15,552 million, compared to net debt of RMB7,173 million as at 30 September 2019. The sequential increase in indebtedness mainly reflected payments for M&A initiatives and media contents, as well as the consolidation of indebtedness at Halti, partly offset by strong free cash flow generation.
For the fourth quarter of 2019, the Group had free cash flow of RMB37,896 million. This was a result of net cash flow generated from operating activities of RMB50,604 million, offset by payments for capital expenditure of RMB12,708 million.

                                                                               | Audited           | Unaudited
------------------------------------------------------------------------------ | ----------------- | ------------
                                                                               | 31 December       | 30 September
                                                                               | 2019              | 2019
                                                                               | (RMB in millions) |
Cash and cash equivalents                                                      | 132,991           | 145,607
Term deposits and others                                                       | 72,270            | 54,499
                                                                               | 205,261           | 200,106
Borrowings                                                                     | (126,952)         | (112,148)
Notes payable                                                                  | (93,861)          | (95,131)
Net debt                                                                       | (15,552)          | (7,173)
Fair value of our stakes in listed investee companies (excluding subsidiaries) | 419,818           | 352,656


Notes to Consolidated Financial Statements - (Continued) Fiscal Years Ended May 26, 2019, May 27, 2018, and May 28, 2017 (columnar dollars in millions except per share amounts)  10. EARNINGS PER SHARE
Basic earnings per share is calculated on the basis of weighted average outstanding shares of common stock. Diluted earnings per share is computed on the basis of basic weighted average outstanding shares of common stock adjusted for the dilutive effect of stock options, restricted stock unit awards, and other dilutive securities. During the second quarter of fiscal 2019, we issued 77.5 million shares of our common stock out of treasury to the former shareholders of Pinnacle pursuant to the terms of the Merger Agreement. In addition, we issued 16.3 million shares of our common stock, par value $5.00 per share, in an underwritten public offering in connection with the financing of the Pinnacle acquisition, with net proceeds of $555.7 million (see Note 2).
The following table reconciles the income and average share amounts used to compute both basic and diluted earnings per share:
For fiscal 2019, 2018, and 2017, there were 2.0 million, 1.3 million, and 0.8 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive.

                                                                                | 2019   | 2018   | 2017
---------------------------------------------------------------------------------------------------------------- | ------ | ------ | ------
Net income available to Conagra Brands, Inc. common stockholders:                                                |        |        |
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders                       | $680.2 | $794.1 | $544.1
Income (loss) from discontinued operations, net of tax, attributable to Conagra Brands, Inc. common stockholders | (1.9)  | 14.3   | 95.2
Net income attributable to Conagra Brands, Inc. common stockholders                                              | $678.3 | $808.4 | $639.3
Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated                   | —      | —      | 0.8
Net income available to Conagra Brands, Inc. common stockholders                                                 | $678.3 | $808.4 | $638.5
Weighted average shares outstanding:                                                                             |        |        |
Basic weighted average shares outstanding                                                                        | 444.0  | 403.9  | 431.9
Add: Dilutive effect of stock options, restricted stock unit awards, and other dilutive securities               | 1.6    | 3.5    | 4.1
Diluted weighted average shares outstanding                                                                      | 445.6  | 407.4  | 436.0