The tax effects of temporary differences in the recognition of income and expense for tax and financial reporting purposes that give rise to significant portions of the net deferred tax asset (liability) are as follows (in millions):
As of December 31, 2019 and 2018, the Company had approximately $521.9 million and $768.9 million, respectively, of federal NOL carryforwards, before reduction for unrecognized tax benefits, which are subject to annual limitations prescribed in Section 382 of the Internal Revenue Code. The decrease is due to current year utilization. If not utilized, a portion of the NOLs will expire in varying amounts from 2024 to 2036; however, a small portion of the NOL that was generated after December 31, 2017 is carried forward indefinitely.
As of December 31, 2019 and 2018, the Company had approximately $134.5 million and $83.7 million, respectively, of federal credit carryforwards, before consideration of valuation allowance or reduction for unrecognized tax benefits, which are subject to annual limitations prescribed in Section 383 of the Internal Revenue Code. If not utilized, the credits will expire in varying amounts from 2028 to 2039.
As of December 31, 2019 and 2018, the Company had approximately $825.8 million and $801.0 million, respectively, of state NOL carryforwards, before consideration of valuation allowance or reduction for unrecognized tax benefits. If not utilized, a portion of the NOLs will expire in varying amounts starting in 2020.
Certain states have adopted the federal rule allowing unlimited NOL carryover for NOLs generated in tax years beginning after December 31, 2017. Therefore, a portion of the state NOLs generated after 2017 carry forward indefinitely. As of December 31, 2019 and 2018, the Company had $138.6 million and $115.8 million, respectively, of state credit carryforwards before consideration of valuation allowance or reduction for unrecognized tax benefits. If not utilized, a portion of the credits will begin to expire in varying amounts starting in 2020.
As of December 31, 2019 and 2018, the Company had approximately $757.1 million and $734.4 million, respectively, of foreign NOL carryforwards, before consideration of valuation allowance. If not utilized, a portion of the NOLs will begin to expire in varying amounts starting in 2020. A significant portion of these NOLs will expire by 2025.
As of December 31, 2019 and 2018, the Company had $76.8 million and $68.8 million, respectively, of foreign credit carryforwards before consideration of valuation allowance. If not utilized, the majority of these credits will expire by 2026.
The Company continues to maintain a valuation allowance of $186.3 million on a portion of its Japan NOLs, which expire in varying amounts from 2020 to 2024. In addition to the valuation allowance mentioned above on Japan NOLs, the Company continues to maintain a full valuation allowance on its U.S. state deferred tax assets, and a valuation allowance on foreign NOLs and tax credits in certain other foreign jurisdictions.

                                                               | As of December 31, |
-------------------------------------------------------------- | ------------------ | -------
                                                               | 2019               | 2018
Net operating loss and tax credit carryforwards                | $612.9             | $584.9
163 (j) interest expense carryforward                          | 49.3               | —
Tax-deductible goodwill and amortizable intangibles            | (48.6)             | (29.4)
Capitalization of research and development expenses            | 42.7               | —
Reserves and accruals                                          | 27.5               | 57.4
Property, plant and equipment                                  | (81.2)             | (63.5)
Inventories                                                    | 22.0               | 20.2
Undistributed earnings of foreign subsidiaries                 | (63.7)             | (48.7)
Share-based compensation                                       | 10.3               | 7.7
Pension                                                        | 26.3               | 24.3
Other                                                          | 8.0                | 6.0
Deferred tax assets and liabilities before valuation allowance | 605.5              | 558.9
  Valuation allowance                                          | (357.9)            | (347.5)
Net deferred tax asset                                         | $247.6             | $211.4


OPERATING AND FINANCIAL RESULTS
(1) Fiscal 2019 average foreign exchange rate used for translation was 1.3255 USD/CDN.
(2) Fiscal 2018 was restated to comply with IFRS 15 and to reflect a change in accounting policy. For further details, please consult the "Accounting policies" section.
(3) Fiscal 2019 actuals are translated at the average foreign exchange rate of fiscal 2018 which was 1.2773 USD/CDN.
REVENUE Fiscal 2019 revenue increased by 22.4% (17.9% in constant currency). In local currency, revenue amounted to US$782.3 million compared to US$662.3 million for fiscal 2018. The increase resulted mainly from: • the impact of the MetroCast acquisition completed on January 4, 2018 which was included in revenue for only an eight-month period in the prior year; • rate increases; • continued growth in Internet service customers; and • the FiberLight acquisition completed in the first quarter of fiscal 2019; partly offset by • a decrease in video service customers. Excluding the MetroCast and FiberLight acquisitions, revenue in constant currency increased by 5.2% for fiscal 2019.
OPERATING EXPENSES Fiscal 2019 operating expenses increased by 19.5% (15.2% in constant currency) mainly as a result of: • the impact of the MetroCast acquisition which was included in operating expenses for only an eight-month period in the prior year; • programming rate increases; • the FiberLight acquisition completed in the first quarter of fiscal 2019; • higher compensation expenses due to higher headcount to support growth; and • higher marketing initiatives to drive primary service units growth; partly offset by • the prior year's non-recurring costs of $3.1 million (US$2.5 million) related to hurricane Irma.
ADJUSTED EBITDA Fiscal 2019 adjusted EBITDA increased by 26.1% (21.5% in constant currency). In local currency, adjusted EBITDA amounted to US$351.3 million compared to US$288.4 million for fiscal 2018. The increase was mainly due to the impact of the MetroCast and FiberLight acquisitions combined with strong organic growth. Excluding the MetroCast and FiberLight acquisitions and the prior year's non-recurring costs of $3.1 million ($US2.5 million) related to hurricane Irma, adjusted EBITDA in constant currency increased by 5.7% for fiscal 2019.
CAPITAL INTENSITY AND ACQUISITIONS OF PROPERTY, PLANT AND EQUIPMENT Fiscal 2019 acquisitions of property, plant and equipment decreased by 9.4% (12.4% in constant currency) mainly due to: • the acquisition of several dark fibres throughout south Florida from FiberLight, LLC for a consideration of $21.2 million (US$16.8 million) during the second quarter of fiscal 2018; partly offset by • additional capital expenditures related to the impact of the MetroCast acquisition; and • additional capital expenditures related to the expansion in Florida. Fiscal 2019 capital intensity reached 18.6% compared to 25.1% for fiscal 2018 mainly as a result of lower capital expenditures combined with revenue growth.

Years ended August 31,                        | 2019 (1)  | 2018 (2) | Change | Change in constant currency (3) | Foreign exchange impact (3)
--------------------------------------------- | --------- | -------- | ------ | ------------------------------- | ---------------------------
(in thousands of dollars, except percentages) | $         | $        | %      | %                               | $
Revenue                                       | 1,036,853 | 847,372  | 22.4   | 17.9                            | 37,433
Operating expenses                            | 571,208   | 478,172  | 19.5   | 15.2                            | 20,522
Adjusted EBITDA                               | 465,645   | 369,200  | 26.1   | 21.5                            | 16,911
Adjusted EBITDA Margin                        | 44.9%     | 43.6%    |        |                                 |
Acquisitions of property, plant and equipment | 192,605   | 212,580  | (9.4)  | (12.4)                          | 6,332
Capital intensity                             | 18.6%     | 25.1%    |        |                                 |


Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is traded on the New York Stock Exchange under the symbol "MEI." The following is a tabulation of high and low sales prices for the periods presented and cash dividends declared per share.
On June 13, 2019, the Board of Directors declared a dividend of $0.11 per share of common stock, payable on July 26, 2019, to holders of record on July 12, 2019. As of June 18, 2019, the number of record holders of our common stock was 397.

                                 | High   | Low    | Dividends
Declared Per
Share
-------------------------------- | ------ | ------ | ----------------------------
Fiscal Year Ended April 27, 2019 |        |        |
First Quarter                    | $45.45 | $37.70 | $0.11
Second Quarter                   | 41.30  | 27.65  | 0.11
Third Quarter                    | 33.98  | 20.99  | 0.11
Fourth Quarter                   | 32.22  | 25.11  | 0.11
Fiscal Year Ended April 28, 2018 |        |        |
First Quarter                    | $44.95 | $36.05 | $0.09
Second Quarter                   | 46.75  | 36.75  | 0.09
Third Quarter                    | 48.44  | 39.00  | 0.11
Fourth Quarter                   | 42.10  | 36.95  | 0.11


Uncertain Tax Positions
In accordance with authoritative guidance, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.
The following table reconciles the beginning and ending amount of unrecognized tax benefits for the fiscal years ended September 30, 2019, 2018,and 2017 (amounts shown in thousands):
Of the total unrecognized tax benefits at September 30, 2019, $1.6 million will impact the Company’s effective tax rate. The Company does not anticipate that there will be a substantial change in unrecognized tax benefits within the next twelve months.
The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of September 30, 2019, no accrued interest or penalties related to uncertain tax positions are recorded in the consolidated financial statements.
The Company is subject to income taxation in the U.S. at the federal and state levels. All tax years are subject to examination by U.S., California, and other state tax authorities due to the carryforward of unutilized net operating losses and tax credits. The Company is also subject to foreign income taxes in the countries in which it operates. The Company’s U.S. federal tax return for the year ended September 30, 2017 is currently under examination. To our knowledge, the Company is not currently under examination by any other taxing authorities.

                                                             | 2019   | 2018   | 2017
------------------------------------------------------------ | ------ | ------ | ------
Gross unrecognized tax benefits at the beginning of the year | $1,321 | $1,181 | $—
Additions from tax positions taken in the current year       | 213    | 140    | 140
Additions from tax positions taken in prior years            | 73     | —      | 1,041
Reductions from tax positions taken in prior years           | —      | —      | —
Tax settlements                                              | —      | —      | —
Gross unrecognized tax benefits at end of the year           | $1,607 | $1,321 | $1,181


2. Property and equipment:
Property and equipment consisted of the following (in thousands):
Depreciation and amortization expense related to property and equipment and finance leases was $80.2 million, $81.2 million and $75.9 million, for 2019, 2018 and 2017, respectively.
The Company capitalizes the compensation cost of employees directly involved with its construction activities. In 2019, 2018 and 2017, the Company capitalized compensation costs of $10.7 million, $10.5 million and $9.7 million respectively. These amounts are included in system infrastructure costs.
Exchange agreement
In 2019, 2018 and 2017 the Company exchanged certain used network equipment and cash consideration for new network equipment. The fair value of the new network equipment received was estimated to be $3.3 million, $3.2 million and $9.1 million resulting in gains of $1.0 million, $1.0 million and $3.9 million respectively. The estimated fair value of the equipment received was based upon the cash consideration price the Company pays for the new network equipment on a standalone basis (Level 3).
Installment payment agreement
The Company has entered into an installment payment agreement (“IPA”) with a vendor. Under the IPA the Company may purchase network equipment in exchange for interest free note obligations each with a twenty-four month term. There are no payments under each note obligation for the first six months followed by eighteen equal installment payments for the remaining eighteen month term. As of December 31, 2019 and December 31, 2018, there was $12.5 million and $11.2 million, respectively, of note obligations outstanding under the IPA, secured by the related equipment. The Company recorded the assets purchased and the present value of the note obligation utilizing an imputed interest rate. The resulting discounts totaling $0.4 million and $0.4 million as of December 31, 2019 and December 31, 2018, respectively, under the note obligations are being amortized over the note term using the effective interest rate method.

                                               | December 31, |
---------------------------------------------- | ------------ | ---------
                                               | 2019         | 2018
Owned assets:                                  |              |
Network equipment                              | $566,936     | $538,761
Leasehold improvements                         | 227,388      | 214,495
System infrastructure                          | 134,726      | 124,018
Software                                       | 10,035       | 9,963
Office and other equipment                     | 18,169       | 16,711
Building                                       | 1,252        | 1,277
Land                                           | 106          | 108
                                               | 958,612      | 905,333
Less—Accumulated depreciation and amortization | (790,033)    | (736,356)
                                               | 168,579      | 168,977
Assets under finance leases:                   |              |
IRUs                                           | 408,170      | 395,170
Less—Accumulated depreciation and amortization | (207,820)    | (188,822)
                                               | 200,350      | 206,348
Property and equipment, net                    | $368,929     | $375,325


Free Cash Flow
The following provides a reconciliation of free cash flow, as used in this annual report, to its most directly comparable U.S. GAAP financial measures:
Management believes that the free cash flow measure provides useful information to investors regarding our financial condition because it is a measure of cash generated which management evaluates for alternative uses. It is management’s current intention to use excess cash to fund investments in capital equipment, acquisition opportunities and consistent dividend payments. Free cash flow is not a U.S. GAAP financial measure and should not be considered in isolation of, or as a substitute for, cash flows calculated in accordance with U.S. GAAP.

                                                                                |         | Fiscal Year |
--------------------------------------------------------------------------------- | ------- | ----------- | -------
($ in millions)                                                                   | 2019    | 2018        | 2017
Net cash provided from operating activities                                       | $232.4  | $209.2      | $130.3
Purchases of property, plant, equipment and software                              | (180.3) | (135.0)     | (98.5)
Acquisition of businesses, net of cash acquired                                   | (79.0)  | (13.3)      | (35.3)
Proceeds from divestiture of business                                             | —       | —           | 12.0
Proceeds from disposals of property, plant and equipment and assets held for sale | 0.4     | 1.9         | 2.5
Proceeds from note receivable from sale of equity method investment               | —       | 6.3         | 6.3
Proceeds from insurance recovery                                                  | 11.4    | —           | —
Dividends paid                                                                    | (38.6)  | (34.4)      | (34.1)
Free cash flow                                                                    | $(53.7) | $34.7       | $(16.8)


Cash Flow Hedges
The Company has interest rate swap agreements to hedge the cash flows of a portion of its variable rate senior secured term loans (the "Variable Rate Loans"). The objective of these instruments is to reduce variability in the forecasted interest payments of the Company's Variable Rate Loans, which is based on the LIBOR rate. Under the terms of the interest rate swap agreements, the Company will receive monthly variable interest payments based on the one-month LIBOR rate and will pay interest at a fixed rate.
In February 2018, the Company entered into interest rate swap agreements to hedge the cash flows of an additional $250 million of its Variable Rate Loans. The interest rate swap agreements on $1.1 billion of the Company's Variable Rate Loans had a maturity date of December 2021 and a fixed interest rate of 1.08%.
The interest rate swap agreements on $300 million and $250 million of the Company's Variable Rate Loans both had a maturity date of August 2022 and fixed interest rates of 1.66% and 2.59%, respectively. The counterparties to these agreements are financial institutions.
In September 2018, the Company terminated its existing interest rate swaps. The net derivative gain of $60 million related to the discontinued cash flow hedge remained within accumulated other comprehensive loss and is being reclassified into earnings over the remaining life of the original hedge as the hedged variable rate debt impacts earnings.
Additionally, in September 2018, the Company entered into new interest rate swap agreements to hedge the cash flows of $1.5 billion of the Company's Variable Rate Loans. These interest rate swap agreements have a maturity date of August 2025 and a fixed interest rate of 3.00%.
The interest rate swap transactions were accounted for as cash flow hedges. The gain (loss) on the swap is reported as a component of other comprehensive income (loss) and is reclassified into earnings when the interest payments on the underlying hedged items impact earnings. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective.
The effect of the Company's cash flow hedges on other comprehensive (loss) income and earnings for the periods presented was as follows:
The Company expects to reclassify gains of $1 million from accumulated other comprehensive loss into earnings during the next 12 months.

                                                                                |                 | Year Ended        |
------------------------------------------------------------------------------------------------------------------------------------ | --------------- | ----------------- | -----------------
                                                                                | January 3, 2020 | December 28, 2018 | December 29, 2017
                                                                                |                 | (in millions)     |
Total interest expense, net presented in the consolidated statements of income in which the effects of cash flow hedges are recorded | $133            | $138              | $140
Amount recognized in other comprehensive (loss) income                                                                               | $(55)           | $(7)              | $10
Amount reclassified from accumulated other comprehensive loss into earnings during the next 12 months.                               | (7)             | (6)               | —


The following table shows select line items that were materially impacted by the adoption of ASC Topics 606 and 340-40 on Autodesk’s Consolidated Balance Sheet as of January 31, 2019:
(1) Short term and long term "contract assets" under ASC Topic 606 are included within "Prepaid expenses and other current assets" and "Other assets", respectively, on the Consolidated Balance Sheet
(2) Included in the "Accumulated deficit" adjustment is $179.4 million for the cumulative effect adjustment of adopting ASC Topic 606 and 340-40 on the opening balance as of February 1, 2018.
Adoption of the standard had no impact to net cash provided by or (used in) operating, financing, or investing activities on the Company’s Consolidated Statements of Cash Flows

                                              | As reported | Impact from the adoption of ASC 606 and 340-40 | As adjusted
--------------------------------------------- | ----------- | ---------------------------------------------- | -----------
ASSETS                                        |             |                                                |
Current assets:                               |             |                                                |
Accounts receivable, net                      | $474.3      | $73.4                                          | $547.7
Prepaid expenses and other current assets (1) | 192.1       | (79.4)                                         | 112.7
Deferred income taxes, net                    | 65.3        | 7.0                                            | 72.3
Other assets (1)                              | 337.8       | (17.9)                                         | 319.9
LIABILITIES AND STOCKHOLDERS’ DEFICIT         |             |                                                |
Current liabilities:                          |             |                                                |
Deferred revenue                              | 1,763.3     | 140.6                                          | 1,903.9
Other accrued liabilities                     | 142.3       | 1.7                                            | 144.0
Long-term deferred revenue                    | 328.1       | 37.2                                           | 365.3
Long-term income taxes payable                | 21.5        | (0.2)                                          | 21.3
Long-term deferred income taxes               | 79.8        | (6.7)                                          | 73.1
Stockholders’ deficit:                        |             |                                                |
Accumulated deficit (2)                       | $(2,147.4)  | $(189.5)                                       | $(2,336.9)


b. Employee Performance Rights Plan
The Employee Performance Rights Plan (the Rights Plan) was approved by shareholders at the Company’s AGM on 23 November 2017. Under the Rights Plan, awards are made to eligible executives and other management personnel who have an impact on the Group’s performance. Rights Plan awards are granted in the form of performance rights over shares, which vest over a period of three years subject to meeting performance measures and continuous employment with the Company. Each performance right is to subscribe for one ordinary share upon vesting and, when issued, the shares will rank equally with other shares.
Performance rights issued under the Employee Performance Rights Plan are valued on the same basis as those issued to KMP, which is described in Note 16(d).
1. The vesting date for rights granted on 2 July 2017 and 2 July 2018 is the date on which the Board notifies the executive that the rights have vested, after the outcomes for the measurement period have been determined and satisfaction of performance conditions have been assessed. This is likely to be 31 August 2020 and 31 August 2021 respectively.
No performance rights vested or lapsed during the financial year. The number of performance rights issued and outstanding at 30 June 2018 was 355,316, consisting solely of the performance rights granted on 2 July 2017.
The weighted average contractual life of outstanding performance rights at the end of the financial year is 1.77 years (2018: 2.17 years).

Performance rights issued and outstanding at 30 June 2019 |               |                        |                |
--------------------------------------------------------- | ------------- | ---------------------- | -------------- | --------------------------
Grant Date                                                | Vesting Date1 | Fair Value per Right $ | Rights Granted | No. of Rights at 30/6/2019
2 Jul 2017                                                | 31 Aug 2020   | 3.815                  | 355,316        | 355,316
2 Jul 2018                                                | 31 Aug 2021   | 3.01                   | 530,652        | 530,652
Total                                                     |               |                        | 885,968        | 885,968


Operating Segment Results
Currently, we have three reportable segments—Activision, Blizzard, and King. Our operating segments are consistent with the manner in which our operations are reviewed and managed by our Chief Executive Officer, who is our chief operating decision maker (“CODM”). The CODM reviews segment performance exclusive of: the impact of the change in deferred revenues and related cost of revenues with respect to certain of our online-enabled games; share-based compensation expense; amortization of intangible assets as a result of purchase price accounting; fees and other expenses (including legal fees, expenses, and accruals) related to acquisitions, associated integration activities, and financings; certain restructuring and related costs; and certain other non-cash charges. The CODM does not review any information regarding total assets on an operating segment basis, and accordingly, no disclosure is made with respect thereto.
Our operating segments are also consistent with our internal organizational structure, the way we assess operating performance and allocate resources, and the availability of separate financial information. We do not aggregate operating segments.
Information on the reportable segment net revenues and segment operating income are presented below (amounts in millions):
(1) Intersegment revenues reflect licensing and service fees charged between segments.

                                     |            |          |        | For the Year Ended December 31, 2018
------------------------------------ | ---------- | -------- | ------ | ------------------------------------
                                     | Activision | Blizzard | King   | Total
Segment Revenues                     |            |          |        |
Net revenues from external customers | $2,458     | $2,238   | $2,086 | $6,782
Intersegment net revenues (1)        | —          | 53       | —      | 53
Segment net revenues                 | $2,458     | $2,291   | $2,086 | $6,835
Segment operating income             | $1,011     | $685     | $750   | $2,446


Intangible assets
Intangible assets include the value assigned to completed technologies, customer relationships, and trade names. The estimated useful lives for all of these intangible assets, range from two to seven years. Intangible assets as of September 30, 2019 and 2018 are summarized as follows(amounts shown in thousands, except for years):
Amortization expense related to acquired intangible assets was $7.0 million, $4.0 million, and $0.6 million for fiscal years ended September 30, 2019, 2018, and 2017, respectively and is recorded in acquisition-related costs and expenses in the consolidated statements of operations.

September 30, 2019:     | Weighted Average Amortization Period | Cost    | Accumulated Amortization | Net
----------------------- | ------------------------------------ | ------- | ------------------------ | -------
Completed technologies  | 6.4 years                            | $20,341 | $7,104                   | $13,237
Customer relationships  | 4.8 years                            | 17,628  | 6,701                    | 10,927
Trade names             | 4.5 years                            | 618     | 377                      | 241
Total intangible assets |                                      | $38,587 | $14,182                  | $24,405


Liquidity and Capital Resources
In assessing our short term and long term liquidity, management reviews and analyzes our current cash balances, short-term investments, accounts receivable, accounts payable, accrued liabilities, capital expenditure and operating expense commitments, and required finance lease, interest and debt payments and other obligations. In assessing our short term and long term liquidity, management reviews and analyzes our current cash balances, short-term investments, accounts receivable, accounts payable, accrued liabilities, capital expenditure and operating expense commitments, and required finance lease, interest and debt payments and other obligations.
The following table sets forth our consolidated cash flows.
Net Cash Provided By Operating Activities. Our primary source of operating cash is receipts from our customers who are billed on a monthly basis for our services. Our primary uses of operating cash are payments made to our vendors, employees and interest payments made to our finance lease vendors and our note holders. Our changes in cash provided by operating activities are primarily due to changes in our operating profit and changes in our interest payments. Cash provided by operating activities for 2019, 2018 and 2017 includes interest payments on our note obligations of $38.0 million, $32.7 million and $30.8 million, respectively.
Net Cash Used In Investing Activities. Our primary use of investing cash is for purchases of property and equipment. These amounts were $47.0 million, $49.9 million and $45.8 million for 2019, 2018 and 2017, respectively. The annual changes in purchases of property and equipment are primarily due to the timing and scope of our network expansion activities including geographic expansion and adding buildings to our network. In 2019, 2018 and 2017 we obtained $11.3 million, $9.9 million and $9.0 million, respectively, of network equipment and software in non-cash exchanges for notes payable under an installment payment agreement.
Net Cash Provided By (Used In) Financing Activities. Our primary uses of cash for financing activities are for dividend payments, stock purchases and principal payments under our finance lease obligations. Amounts paid under our stock buyback program were $6.6 million for 2018 and $1.8 million for 2017. There were no stock purchases for 2019. During 2019, 2018 and 2017 we paid $112.6 million, $97.9 million and $81.7 million, respectively, for our quarterly dividend payments. Our quarterly dividend payments have increased due to regular quarterly increases in our quarterly dividend per share amounts. Principal payments under our finance lease obligations were $9.1 million, $10.3 million and $11.2 million for 2019, 2018 and 2017, respectively, and are impacted by the timing and extent of our network expansion activities. Our financing activities also include proceeds from and repayments of our debt offerings. In June 2019 we received net proceeds of $152.1 million from the issuance of our €135.0 million of 2024 Notes. In August 2018 we received net proceeds of $69.9 million from the issuance of our $70.0 million of senior secured notes. Total installment payment agreement principal payments were $10.0 million, $9.4 million and $3.8 million for 2019, 2018 and 2017, respectively.

                                                     |           | Year Ended December 31, |
---------------------------------------------------- | --------- | ----------------------- | ----------
                                                     | 2019      | 2018                    | 2017
                                                     |           | (in thousands)          |
Net cash provided by operating activities            | $ 148,809 | $ 133,921               | $ 111,702
Net cash used in investing activities                | (46,958)  | (49,937)                | (45,801)
Net cash provided by (used in) financing activities  | 22,020    | (52,545)                | (97,267)
Effect of exchange rates on cash                     | (542)     | (2,357)                 | 4,058
Net increase (decrease) in cash and cash equivalents |           |                         |
during the year                                      | $ 123,329 | $ 29,082                | $ (27,308)


SG&A costs during fiscal 2018 were $222.0 million, an increase of $5.7 million compared to the $216.3 million of SG&A during fiscal 2017. The following table shows the components of SG&A costs for the twelve months ended October 31, 2018 and 2017.
Regarding the table above, the change in start-up expense in any particular period relates to the stage of the start-up process in which a facility under construction is in during the period. Non-construction related expenses, such as labor, training and office-related expenses for a facility under construction are recorded as start-up expense until the facility begins operations. As a facility moves closer to actual start-up, the expenses incurred for labor, training, etc. increase. As a result, amounts classified as start-up expenses will increase period over period until the facility begins production. Once production begins, the expenses from that point forward are recorded as costs of goods sold. The increase in legal expenses was primarily attributable to our ongoing defense of the litigation described in “Part II, Item 3. Legal Proceedings” of this Form 10-K. The increases in trainee expense and administrative salaries were primarily attributable to increases in personnel that coincide with the Company's growth plans. The decrease in bonus expense, payouts of which are based on profitability, was the result of profitability not reaching the required levels for payout of that incentive. The decrease in ESOP expense, payouts of which are based on profitability, was attributable to the difference in the level of profitability between fiscal 2018 and 2017. The increase in all other SG&A expenses was the result of a net increase in various other categories of SG&A costs.

Selling, General and Administrative Costs (in thousands) |                                      |                                      |
-------------------------------------------------------- | ------------------------------------ | ------------------------------------ | --------------------
Description                                              | Twelve months ended October 31, 2018 | Twelve months ended October 31, 2017 | Increase/(Decrease)
Start-up expense (Tyler, Texas complex)                  | $13,394                              | $403                                 | $ 12,991
Legal services expense                                   | 17,573                               | 7,879                                | 9,694
All other SG&A                                           | 68,863                               | 61,847                               | 7,016
Administrative salary expense                            | 42,288                               | 36,193                               | 6,095
Trainee expense                                          | 21,553                               | 16,182                               | 5,371
Charter aircraft expense                                 | 2,167                                | 900                                  | 1,267
Depreciation expense - machinery and equipment           | 5,801                                | 4,555                                | 1,246
Stock compensation expense                               | 15,702                               | 16,952                               | (1,250)
Marketing expense                                        | 32,624                               | 34,272                               | (1,648)
Start-up expense (St. Pauls, North Carolina complex)     | —                                    | 4,022                                | (4,022)
Bonus award program expense                              | —                                    | 15,098                               | (15,098)
Employee Stock Ownership Plan ("ESOP") expense           | 2,000                                | 18,000                               | (16,000)
Total SG&A                                               | $221,965                             | $216,303                             | $ 5,662


The following table summarizes the potentially dilutive common shares that were excluded from diluted weighted-average common shares outstanding because including them would have had an anti-dilutive effect (in thousands):
Since the Company expects to settle the principal amount of its outstanding convertible senior notes in cash and any excess in cash or shares of the Company’s Class A Common Stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s Class A Common Stock for a given period exceeds the conversion price of $81.45 per share for the Notes.

                                                                         |       | Year Ended December 31, |
------------------------------------------------------------------------ | ----- | ----------------------- | ------
                                                                         | 2019  | 2018                    | 2017
Shares of common stock issuable under equity incentive plans outstanding | 6,832 | 8,943                   | 10,806
Convertible senior notes                                                 | 1,905 | 79                      | -
Potential common shares excluded from diluted net loss per share         | 8,737 | 9,022                   | 10,806


29 Employee Share Ownership Plan (ESOP)
The cost of shares in intu properties plc held by the Trustee of the ESOP operated by the Company is accounted for as a deduction from equity.
The purpose of the ESOP is to acquire and hold shares which will be transferred to employees in the future under the Group’s employee incentive arrangements as described in note 7 including joint ownership of shares in its role as Trustee of the Joint Share Ownership Plan. During 2019, no dividends in respect of these shares have been waived by agreement (2018: £1.6 million).

               |                | 2019  |                | 2018
-------------- | -------------- | ----- | -------------- | -----
               | Shares million | £m    | Shares million | £m
At 1 January   | 11.2           | 37.0  | 11.6           | 39.1
Acquisitions   | 0.2            | 0.1   | 0.6            | 0.9
Disposals      | (1.1)          | (3.5) | (1.0)          | (3.0)
At 31 December | 10.3           | 33.6  | 11.2           | 37.0


The components of our income tax provision for the years ended December 31, 2019, 2018 and 2017 are as follows (in thousands):
As a result of a loss in a foreign location, we have a net operating loss carry-forward (“NOL”) of approximately $0.3 million
available to offset future income. All $0.3 million of the NOL expires in 2025. We have established a valuation allowance for this
NOL because the ability to utilize it is not more likely than not.
We have tax credit carry-forwards of approximately $5.1 million available to offset future state tax. These tax credit carry-forwards
expire in 2020 to 2029. These credits represent a deferred tax asset of $4.0 million after consideration of the federal benefit of state tax
deductions. A valuation allowance of $1.8 million has been established for these credits because the ability to use them is not more
likely than not.
At December 31, 2019 we had approximately $58.2 million of undistributed earnings and profits. The undistributed earnings and
profits are considered previously taxed income and would not be subject to U.S. income taxes upon repatriation of those earnings, in
the form of dividends. The undistributed earnings and profits are considered to be permanently reinvested, accordingly no provision
for local withholdings taxes have been provided, however, upon repatriation of those earnings, in the form of dividends, we could be
subject to additional local withholding taxes.

                                   |              | Year Ended December 31,    |
---------------------------------- | ------------ | -------------------------- | --------
                                   | 2019         | 2018                       | 2017
Current:                           |              |                            |
Federal                            | $ 18,682     | $ 22,606                   | $ 53,998
State                              | 5,711        | 6,182                      | 6,595
Foreign                            | 7,323        | 7,018                      | 6,185
                                   | 31,716       | 35,806                     | 66,778
Deferred:                          |              |                            |
Federal                            | (863 )       | (3,127 )                   | 1,590
State                              | (326 )       | (674 )                     | 35
Foreign                            | (212 )       | (464 )                     | (51 )
                                   | (1,401 )     | (4,265 )                   | 1,574
Total                              | $ 30,315     | $ 31,541                   | $ 68,352


Contractual Obligations
The following table summarizes our significant contractual obligations at March 31, 2019, and the effect such obligations are expected to have on our liquidity and cash flows in future periods (in millions):
(1) Operating lease obligations include $18.1 million of future lease payments which is recorded as a liability on the balance sheet as of March 31, 2019. This obligation is due under an operating lease from our acquisition of Atmel for a building in San Jose, California.
(2) Capital purchase obligations represent commitments for construction or purchases of property, plant and equipment. These obligations were not recorded as liabilities on our balance sheet as of March 31, 2019, as we have not yet received the related goods or taken title to the property.
(3) Other purchase obligations and commitments include payments due under various types of licenses and outstanding purchase commitments with our wafer foundries.
(4) The Term Loan Facility matures on May 29, 2025.
(5) For purposes of this table, we have assumed that the principal of our 2023 revolving loans outstanding at March 31, 2019 will be paid on May 18, 2023, which is the maturity date of such borrowings.
(6) For purposes of this table, we have assumed that the principal of our 2017 senior convertible debt will be paid on February 15, 2027, which is the maturity date of such debt.
(7) For purposes of this table, we have assumed that the principal of our 2015 Senior Convertible Debt will be paid on February 15, 2025, which is the maturity date of such debt.
(8) For purposes of this table, we have assumed that the principal of our 2017 Junior Convertible Debt will be paid on February 15, 2037, which is the maturity date of such debt.
(9) For purposes of this table, pension obligations due in more than 5 years represent the expected pension payments from 2025 through 2029. It excludes pension obligations subsequent to 2029.
(10) During fiscal 2018, we recognized a provisionary one-time transition tax on accumulated unrepatriated foreign earnings, estimated at $644.7 million, as a result of the recent U.S. tax reform. As of December 31, 2018, with the conclusion of the measurement period in accordance with SAB 118, we increased this amount by $13.1 million to $657.8 million, of which we expect cash payments of approximately $280.7 million after offsets by the utilization of various tax attribute carryforwards in the United States. Our first payment on this obligation of $35.0 million was made in the quarter ended September 30, 2018 and we expect future cash payments of approximately $245.7 million. This tax is to be paid over a period of eight years, with 8% of the transition tax paid each year for fiscal 2019 through fiscal 2023, and 15%, 20%, and 25%, respectively, to be paid during fiscal 2024, 2025, and 2026.
(11) The contractual obligations do not include amounts related to uncertain tax positions because reasonable estimates cannot be made.
Purchase orders or contracts for the purchase of raw materials and other goods and services, with the exception of commitments to our wafer foundries, are not included in the table above. We are not able to determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase orders may represent authorizations to purchase rather than binding agreements. For the purpose of this table, contractual obligations for the purchase of goods or services are defined as agreements that are enforceable and legally binding on us and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Our purchase orders are based on our current manufacturing needs and are fulfilled by our vendors with short time horizons. We do not have significant agreements for the purchase of raw materials or other goods specifying minimum quantities or set prices that exceed our expected requirements for three months. We also enter into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.
The expected timing of payment of the obligations discussed above is estimated based on current information. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.

                                               |           |                  | Payments Due by Period |             |
---------------------------------------------- | --------- | ---------------- | ---------------------- | ----------- | -----------------
                                               | Total     | Less than 1 year | 1 – 3 years            | 3 – 5 years | More than 5 years
Operating lease obligations (1)                | $167.1    | $49.0            | $68.4                  | $27.1       | $22.6
Capital purchase obligations (2)               | 18.8      | 18.8             | —                      | —           | —
Other purchase obligations and commitments (3) | 205.6     | 194.9            | 10.5                   | 0.2         | —
Term Loan Facility (4)                         | 2,435.4   | 72.5             | 174.7                  | 174.4       | 2,013.8
Revolving Credit Facility (5)                  | 3,879.0   | 147.0            | 294.0                  | 3,438.0     | —
2023 and 2021 Senior Notes                     | 2,293.0   | 82.5             | 1,145.5                | 1,065.0     | —
2017 Senior Convertible Debt (6)               | 2,339.1   | 33.6             | 67.3                   | 67.3        | 2,170.9
2015 Senior Convertible Debt (7)               | 1,893.2   | 28.0             | 56.1                   | 56.1        | 1,753.0
2017 Junior Convertible Debt (8)               | 964.0     | 15.4             | 30.9                   | 30.9        | 886.8
Pension obligations (9)                        | 20.7      | 1.3              | 3.4                    | 4.1         | 11.9
Transition tax obligation (10)                 | 245.7     | 9.9              | 44.9                   | 64.6        | 126.3
Total contractual obligations (11)             | $14,461.6 | $652.9           | $1,895.7               | $4,927.7    | $6,985.3


The failed-sale-leaseback accounting treatment had the following effects on our consolidated results of operations for the years ended December 31, 2018 and 2017:
After factoring in the costs to sell the data centers and colocation business, excluding the impact from the failed-sale-leaseback accounting treatment, the sale resulted in a $20 million gain as a result of the aggregate value of the proceeds we received exceeding the carrying value of the assets sold and liabilities assumed. Based on the fair market values of the failed-sale-leaseback assets, the failed-sale-leaseback accounting treatment resulted in a loss of $102 million as a result of the requirement to treat a certain amount of the pre-tax cash proceeds from the sale of the assets as though it were the result of a financing obligation. The combined net loss of $82 million was included in selling, general and administrative expenses in our consolidated statement of operations for the year ended December 31, 2017.
Effective November 3, 2016, which is the date we entered into the agreement to sell a portion of our data centers and colocation business, we ceased recording depreciation of the property, plant and equipment to be sold and amortization of the business’s intangible assets in accordance with applicable accounting rules. Otherwise, we estimate that we would have recorded additional depreciation and amortization expense of $67 million from January 1, 2017 through May 1, 2017.
Upon adopting ASU 2016-02, accounting for the failed sale leaseback is no longer applicable based on our facts and circumstances, and the real estate assets and corresponding financing obligation were derecognized from our consolidated financial statements. Please see “Leases” (ASU 2016-02) in Note 1— Background and Summary of Significant Accounting Policies for additional information on the impact the new lease standard will have on the accounting for the failed-sale-leaseback.

                                                                                | Positive (Negative) Impact to Net Income |
-------------------------------------------------------------------------------------------- | ---------------------------------------- | -----
                                                                                | December 31,                             |
                                                                                | 2018                                     | 2017
                                                                                | (Dollars in millions)                    |
Increase in revenue                                                                          | $74                                      | 49
Decrease in cost of sales                                                                    | 22                                       | 15
Increase in loss on sale of business included in selling, general and administrative expense | —                                        | (102)
Increase in depreciation expense (one-time)                                                  | —                                        | (44)
Increase in depreciation expense (ongoing)                                                   | (69)                                     | (47)
Increase in interest expense                                                                 | (55)                                     | (39)
Decrease in income tax expense                                                               | 7                                        | 65
Decrease in net income                                                                       | $(21)                                    | (103)


Contractual Obligations and Contingent Liabilities and Commitments
Our principal commitments consist primarily of obligations under operating and financing leases, which include among others, certain leases of our offices, colocations and servers as well as contractual commitment related network infrastructure and data center operations. The following table summarizes our commitments to settle contractual obligations in cash as of December 31, 2019:
(1) Finance leases are related to servers and network infrastructure and our data center operations.
As of December 31, 2019, we had severance agreements with certain employees which would require us to pay up to approximately $6.4 million if all such employees were terminated from employment with our Company following a triggering event (e.g., change of control) as defined in the severance agreements.

                                               | Payments Due by Year Ending December 31, 2020 |            |             |             |
---------------------------------------------- | --------------------------------------------- | ---------- | ----------- | ----------- | --------------
(In thousands)                                 | Total                                         | Year 1 (1) | Years 2 & 3 | Years 4 & 5 | Beyond 5 Years
Operating leases, including imputed interest   | 12,807                                        | 3,519      | 5,102       | 4,186       | —
Finance leases, including imputed interest (1) | 2,165                                         | 1,423      | 736         | 6           | —
Total contractual obligations                  | $ 14,972                                      | $ 4,942    | $ 5,838     | $ 4,192     | $ —


AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
Additional information relating to the total assets of the Company’s operating segments is as follows for the years ended December 31,:
(1) Total assets in each of the Company’s property segments includes the Right-of-use asset recognized in connection with the Company’s adoption of the new lease accounting standard.
(2) Balances are translated at the applicable period end exchange rate, which may impact comparability between periods.
(3) Balances include corporate assets such as cash and cash equivalents, certain tangible and intangible assets and income tax accounts that have not been allocated to specific segments.

                           | 2019 (1)  | 2018      | 2017
-------------------------- | --------- | --------- | ---------
U.S. property              | $22,624.6 | $18,782.0 | $19,032.6
Asia property (2)          | 5,307.8   | 4,938.8   | 4,770.8
Africa property (2)        | 4,711.1   | 1,929.7   | 1,673.4
Europe property (2)        | 1,535.3   | 1,438.1   | 1,540.2
Latin America property (2) | 8,125.5   | 5,594.7   | 5,868.4
Services                   | 26.8      | 46.3      | 42.3
Other (3)                  | 470.5     | 280.8     | 286.6
Total assets               | $42,801.6 | $33,010.4 | $33,214.3


Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following at December 31, 2019 and 2018 (in thousands):
(1) In November 2014 and February 2016, we entered into a term loan agreement and a convertible loan agreement, respectively, with Clean Energy Collective, LLC (“CEC”). Our term loan bears interest at 16% per annum, and our convertible loan bears interest at 10% per annum. In November 2018, we amended the terms of the loan agreements to (i) extend their maturity to June 2020, (ii) waive the conversion features on our convertible loan, and (iii) increase the frequency of interest payments, subject to certain conditions. In January 2019, CEC finalized certain restructuring arrangements, which resulted in a dilution of our ownership interest in CEC and the loss of our representation on the company’s board of managers. As a result of such restructuring, CEC no longer qualified to be accounted for under the equity method. As of December 31, 2019, the aggregate balance outstanding on the loans was $23.9 million and was presented within “Prepaid expenses and other current assets.” As of December 31, 2018, the aggregate balance outstanding on the loans was $22.8 million and was presented within “Notes receivable, affiliate.”
(2) See Note 9. “Derivative Financial Instruments” to our consolidated financial statements for discussion of our derivative instruments.

                                          | 2019     | 2018
----------------------------------------- | -------- | --------
Prepaid expenses                          | $137,927 | $90,981
Prepaid income taxes .                    | 47,811   | 59,319
Indirect tax receivables .                | 29,908   | 26,327
Restricted cash                           | 13,697   | 19,671
Notes receivable (1)                      | 23,873   | 5,196
Derivative instruments (2) .              | 1,199    | 2,364
Other current assets                      | 22,040   | 39,203
Prepaid expenses and other current assets | $276,455 | $243,061


Summary cash flow information is set forth below for the years ended December 31, (in millions):
We use our cash flows to fund our operations and investments in our business, including tower maintenance and improvements, communications site construction and managed network installations and tower and land acquisitions. Additionally, we use our cash flows to make distributions, including distributions of our REIT taxable income to maintain our qualification for taxation as a REIT under the Code. We may also repay or repurchase our existing indebtedness or equity from time to time. We typically fund our international expansion efforts primarily through a combination of cash on hand, intercompany debt and equity contributions.
In April 2019, Tata Teleservices and Tata Sons Limited, two of our minority holders in India, delivered notice of exercise
of their put options with respect to their remaining combined holdings in our Indian subsidiary, ATC TIPL (see note 15 to our
consolidated financial statements included in this Annual Report). Accordingly, we expect to pay an amount equivalent to INR
24.8 billion (approximately $347.6 million at the December 31, 2019 exchange rate) to redeem the put shares in the first half of
2020, subject to regulatory approval. In connection with the closing of the Eaton Towers Acquisition,
In April 2019, Tata Teleservices and Tata Sons Limited, two of our minority holders in India, delivered notice of exercise of their put options with respect to their remaining combined holdings in our Indian subsidiary, ATC TIPL (see note 15 to our consolidated financial statements included in this Annual Report). Accordingly, we expect to pay an amount equivalent to INR 24.8 billion (approximately $347.6 million at the December 31, 2019 exchange rate) to redeem the put shares in the first half of 2020, subject to regulatory approval. In connection with the closing of the Eaton Towers Acquisition,  In April 2019, Tata Teleservices and Tata Sons Limited, two of our minority holders in India, delivered notice of exercise of their put options with respect to their remaining combined holdings in our Indian subsidiary, ATC TIPL (see note 15 to our consolidated financial statements included in this Annual Report). Accordingly, we expect to pay an amount equivalent to INR 24.8 billion (approximately $347.6 million at the December 31, 2019 exchange rate) to redeem the put shares in the first half of 2020, subject to regulatory approval. In connection with the closing of the Eaton Towers Acquisition, we entered into an agreement with MTN to acquire MTN’s noncontrolling interests in each of our joint ventures in Ghana and Uganda for total consideration of approximately $523.0 million. The transaction is expected to close in the first quarter of 2020, subject to regulatory approval and other closing conditions. In April 2019, Tata Teleservices and Tata Sons Limited, two of our minority holders in India, delivered notice of exercise of their put options with respect to their remaining combined holdings in our Indian subsidiary, ATC TIPL (see note 15 to our consolidated financial statements included in this Annual Report). Accordingly, we expect to pay an amount equivalent to INR 24.8 billion (approximately $347.6 million at the December 31, 2019 exchange rate) to redeem the put shares in the first half of 2020, subject to regulatory approval. In connection with the closing of the Eaton Towers Acquisition
As of December 31, 2019, we had total outstanding indebtedness of $24.2 billion, with a current portion of $2.9 billion. During the year ended December 31, 2019, we generated sufficient cash flow from operations to fund our capital expenditures and debt service obligations, as well as our required distributions. We believe the cash generated by operating activities during the year ending December 31, 2020, together with our borrowing capacity under our credit facilities and cash on hand, will be sufficient to fund our required distributions, capital expenditures, debt service obligations (interest and principal repayments) and signed acquisitions. As of December 31, 2019, we had $1.3 billion of cash and cash equivalents held by our foreign subsidiaries, of which $583.0 million was held by our joint ventures. While certain subsidiaries may pay us interest or principal on intercompany debt, it has not been our practice to repatriate earnings from our foreign subsidiaries primarily due to our ongoing expansion efforts and related capital needs. However, in the event that we do repatriate any funds, we may be required to accrue and pay certain taxes.

                                                                                | 2019      | 2018      | 2017
---------------------------------------------------------------------------------------------------------- | --------- | --------- | ---------
Net cash provided by (used for):                                                                           |           |           |
Operating activities                                                                                | $3,752.6  | $3,748.3  | $2,925.6
Investing activities                                                                                | (3,987.5) | (2,749.5) | (2,800.9)
Financing activities                                                                                | 521.7     | (607.7)   | (113.0)
Net effect of changes in foreign currency exchange rates on cash and cash equivalents, and restricted cash | (13.7)    | (41.1)    | 6.7
Net increase in cash and cash equivalents, and restricted cash                                             | $273.1    | $350.0    | $18.4


Orders for Digital Industries declined due to lower demand in the short-cycle factory automation and motion control businesses, which faced increasingly adverse market conditions during the course of the fiscal year, particularly in the automotive and machine building industries. These declines were only partly offset by clear growth in the process automation business and a moderate increase in the software business, which was due to positive currency translation effects and new volume from recent acquisitions, particularly including Mendix.
The latter two businesses were also the drivers for revenue growth, as year-overyear revenue growth for the short-cycle businesses in the first half of fiscal 2019 gave way to declines in the second half. On a geographic basis, orders declined in the regions Europe, C. I. S., Africa, Middle East and in the Americas, only partly offset by an increase in the Asia, Australia region. Revenue rose in all three reporting regions. The software business strengthened its contribution to Adjusted EBITA with a double-digit increase.
Higher expenses related to new cloud-based offerings were partly offset by a € 50 million gain from the sale of an equity investment. The process automation business showed a moderate increase in Adjusted EBITA, due mainly to higher revenue. Nevertheless, Adjusted EBITA for Digital Industries overall came in slightly lower year-over-year due to clear declines in the short-cycle businesses. Severance charges were € 92 million in fiscal 2019, up from € 75 million a year earlier. Digital Industries’ order backlog was € 5 billion at the end of the fiscal year, of which € 4 billion are expected to be converted into revenue in fiscal 2020.
Digital Industries achieved its results in a market environment that lost momentum in the course of fiscal 2019. In particular, demand for investment goods eroded notably in the second half of the fiscal year. All regions were impacted by the slowdown, and countries with strong focus on investment goods and strong export ties to China suffered notably. While process industries still benefited from positive development of raw material prices, discrete industries faced headwinds from low demand including destocking effects. The automotive industry was hit by production cuts in Europe and weak demand in China. This, among other factors, also impacted the machine building industry, particularly affecting customers in Germany and Japan.
Production
growth in the pharmaceutical and chemicals industries flattened
during the course of fiscal 2019, due in part to spillover effects from the automotive industry on related chemicals segments. The food and beverage industry grew modestly and global electronics and semiconductor production expanded but prices were under pressure. For fiscal 2020, the market environment for Digital Industries is expected to weaken further. Manufacturing investments are expected to decrease at least moderately but then begin to stabilize in the second half of fiscal 2020. An overall decline in investment sentiment caused by global trade tensions, among other factors, dampens short-term expectations and fuels increasing cautiousness for investments globally. A weakening of growth in China could lead to spillover effects in other Asian
countries and also in Europe.

                           |        | Fiscal year |        | % Change
-------------------------- | ------ | ----------- | ------ | --------
(in millions of €)         | 2019   | 2018        | Actual | Comp.
Orders                     | 15,944 | 16,287      | (2) %  | (4) %
Revenue                    | 16,087 | 15,587      | 3 %    | 2 %
therein: software business | 4,039  | 3,560       | 13%    | 8%
Adjusted EBITA             | 2,880  | 2,898       | (1) %  |
Adjusted EBITA margin      | 17.9 % | 18.6 %      |        |


Finite-lived Intangible Assets
Other intangible assets, net consisted of the following:
The remaining $152 of intangible asset at December 31, 2019 is expected to be amortized in 2020.

                                                      |          | December 31,
----------------------------------------------------- | -------- | ------------
                                                      | 2019     | 2018
Recipes                                               | $ 44     | $ 44
Customer lists and other customer related intangibles | 4,529    | 4,529
Customer relationships                                | 985      | 985
Trade names                                           | 2,248    | 2,248
Formula                                               | 438      | 438
                                                      | 8,244    | 8,244
Accumulated amortization                              | (8,092 ) | (7,900 )
Intangible assets, net                                | $ 152    | $ 344


The following table presents the components of impairment and other charges, net, in each fiscal year (in thousands):
Restructuring costs decreased by $2.2 million as a result of lower severance expenses, as our general and administrative cost reduction initiative came to its conclusion as planned. Costs of closed restaurants and other increased by $3.8 million, primarily due to a $3.5 million charge recorded in 2019 related to the write- off of software development costs associated with a discontinued technology project. Gains on disposition of property and equipment, net, increased by $7.9 million, primarily due to a $5.7 million gain related to a sale of property and a$0.8 million gain related to an eminent domain transaction in 2019.
Refer to Note 9, Impairment and Other Charges, Net, of the notes to the consolidated financial statements for additional information regarding these charges.

                                                             | 2019    | 2018
------------------------------------------------------------ | ------- | -------
Restructuring costs                                          | $8,455  | $10,647
Costs of closed restaurants and other                        | 8,628   | 4,803
(Gains) losses on disposition of property and equipment, net | (6,244) | 1,627
Accelerated depreciation                                     | 1,616   | 1,130
Operating restaurant impairment charges                      | —       | 211
                                                             | $12,455 | $18,418


Item 6. Selected Financial Data
The following selected consolidated financial data set forth below was derived from our historical audited consolidated financial statements and should be read in conjunction with Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8 – Financial Statements and Supplementary Data, and other financial data included elsewhere in this Annual Report on Form 10-K. Our historical results of operations are not indicative of our future results of operations.
(2) Fiscal 2018 and 2017 have been adjusted for our retrospective adoption of the new accounting standard Revenue from Contracts with Customers (ASC 606). Refer to Note 7 – Revenue of the Notes to Consolidated Financial Statements for details.

                                                              | April 26, 2019 | April 27, 2018 (2) | April 28, 2017 (2) | April 29, 2016 | April 24, 2015
------------------------------------------------------------- | -------------- | ------------------ | ------------------ | -------------- | --------------
                                                              |                |                    |                    | (In millions)  |
Cash, cash equivalents and short-term investments             | $ 3,899        | $ 5,391            | $ 4,921            | $ 5,303        | $ 5,326
Working capital                                               | $ 1,743        | $ 3,421            | $ 2,178            | $ 2,786        | $ 4,064
Total assets                                                  | $ 8,741        | $ 9,991            | $ 9,562            | $ 10,037       | $ 9,401
Total debt                                                    | $ 1,793        | $ 1,926            | $ 1,993            | $ 2,339        | $ 1,487
Total deferred revenue and financed unearned services revenue | $ 3,668        | $ 3,363            | $ 3,213            | $ 3,385        | $ 3,197
Total stockholders' equity                                    | $ 1,090        | $ 2,276            | $ 2,949            | $ 2,881        | $ 3,414


Results of Operations
Consolidated Results
Total Revenue
Total revenue for 2019 decreased 23% as compared to 2018 primarily due to pricing declines resulting from the challenging memory market environment in 2019. Sales of DRAM products for 2019 decreased 28% as compared to 2018 primarily due to declines in average selling prices of approximately 30% resulting from supply and demand imbalances, customer inventory corrections, and CPU shortages. Sales of NAND products for 2019 decreased 12% as compared to 2018 primarily due to declines in average selling prices in the mid-40% range resulting from supply and demand imbalances, which were partially offset by significant increases in sales volumes. In addition, demand for our NAND products was adversely affected by the transition from SATA SSDs to NVMe SSDs. The higher NAND sales volumes in 2019 were driven by increases in sales of high-value mobile managed NAND products as well as discrete NAND products enabled by our execution in ramping 64- and 96-layer TLC 3D NAND.
Total revenue for 2018 increased 50% as compared to 2017. Higher revenue in 2018 for both DRAM and NAND as compared to 2017 were driven by strong execution in delivering high-value products featuring our 1Xnm DRAM and 64-layer 3D NAND technologies combined with strong demand for products across our primary markets. Sales of DRAM products for 2018 increased 64% from 2017 primarily due to an increase in average selling prices of approximately 35% and an increase in sales volumes of approximately 20% as a result of strong market conditions, particularly for cloud, enterprise, mobile, and graphics markets, combined with increased sales into high-value markets. Sales of NAND products for 2018 increased 20% from 2017 despite declines in average selling prices primarily due to an increase in sales volumes of approximately 30% driven by increases in sales of high-value SSD and mobile managed NAND products enabled by strong demand and our execution in delivering 3D NAND products.
Overall Gross Margin
Our overall gross margin percentage decreased to 46% for 2019 from 59% for 2018 primarily due to declines in average selling prices partially offset by cost reductions resulting from strong execution in delivering products featuring advanced technologies and from continuous improvement initiatives to reduce production costs. Underutilization of IMFT assets adversely impacted our gross margin by a per-quarter average of approximately $100 million in 2019 and $65 million in 2018, and we anticipate the adverse impact of underutilization at IMFT to increase to approximately $150 million per quarter beginning in the first quarter of 2020.
We continue to evaluate planned technology node transitions, capital spending and re-use rates for NAND equipment. Based on our preliminary assessment, we anticipate changing the depreciable life of our NAND equipment from five to seven years beginning in the first quarter of 2020. We anticipate this change will reduce our depreciation expense included in cost of goods sold for the first quarter of 2020 by approximately $80 million, increasing to approximately $100 to $150 million per quarter for the remainder of 2020.
Our overall gross margin percentage increased to 59% for 2018 from 42% for 2017 primarily due to favorable market conditions across key markets combined with strong execution in delivering products featuring advanced technologies, including 1Xnm DRAM and 64-layer 3D NAND, enabling manufacturing cost reductions. For 2018 as compared to 2017, pricing for DRAM products increased while manufacturing costs declined and, for NAND products, manufacturing cost reductions outpaced declines in average selling prices.

For the year ended                                     | 2019    | 2019 | 2018    | 2018 | 2017    | 2017
------------------------------------------------------ | ------- | ---- | ------- | ---- | ------- | ----
Revenue                                                | $23,406 | 100% | $30,391 | 100% | $20,322 | 100%
Cost of goods sold                                     | 12,704  | 54%  | 12,500  | 41%  | 11,886  | 58%
Gross margin                                           | 10,702  | 46%  | 17,891  | 59%  | 8,436   | 42%
Selling, general, and administrative                   | 836     | 4%   | 813     | 3%   | 743     | 4%
Research and development                               | 2,441   | 10%  | 2,141   | 7%   | 1,824   | 9%
Other operating (income) expense, net                  | 49      | —%   | (57)    | —%   | 1       | —%
Operating income                                       | 7,376   | 32%  | 14,994  | 49%  | 5,868   | 29%
Interest income (expense), net                         | 77      | —%   | (222)   | (1)% | (560)   | (3)%
Other non-operating income (expense), net              | (405)   | (2)% | (465)   | (2)% | (112)   | (1)%
Income tax (provision) benefit                         | (693)   | (3)% | (168)   | (1)% | (114)   | (1)%
Equity in net income (loss) of equity method investees | 3       | —%   | (1)     | —%   | 8       | —%
Net income attributable to noncontrolling interests    | (45)    | —%   | (3)     | —%   | (1)     | —%
Net income attributable to Micron                      | $6,313  | 27%  | $14,135 | 47%  | $5,089  | 25%


A summary of option activity under all of the Company’s equity incentive plans at December 31, 2019 and changes during the period then ended is presented in the following table:
There were no options granted for the year ended December 31, 2019 and 2018. The total intrinsic value of options exercised during year ended December 31, 2019, 2018 and 2017 were $215.5 million, $74.6 million, and $41.2 million, respectively.

                                                    | Number of Options Outstanding (in thousands) | Weighted- Average Exercise Price Per Share | Weighted- Average Contractual Term (in Years) | Aggregate Intrinsic Value (in thousands)
--------------------------------------------------- | -------------------------------------------- | ------------------------------------------ | --------------------------------------------- | ----------------------------------------
Outstanding at December 31, 2016                    | 7,384                                        | $10.59                                     | 5.3                                           | $74,065
Granted                                             | 25                                           | 23.99                                      |                                               |
Exercised                                           | (1,722)                                      | 10.39                                      |                                               |
Canceled/Forfeited                                  | (401)                                        | 16.04                                      |                                               |
Outstanding at December 31, 2017                    | 5,286                                        | $10.30                                     | 4.2                                           | $201,480
Granted                                             | -                                            | -                                          |                                               |
Exercised                                           | (1,138)                                      | 8.17                                       |                                               |
Canceled/Forfeited                                  | (17)                                         | 18.79                                      |                                               |
Outstanding at December 31, 2018                    | 4,131                                        | $10.86                                     | 3.3                                           | $295,921
Granted                                             | -                                            | -                                          |                                               |
Exercised                                           | (1,742)                                      | 8.53                                       |                                               |
Canceled/Forfeited                                  | (132)                                        | 2.73                                       |                                               |
Outstanding at December 31, 2019                    | 2,257                                        | $13.13                                     | 2.5                                           | $351,428
Vested and expected to vest as of December 31, 2019 | 2,259                                        | $13.13                                     | 2.5                                           | $351,362
Excercisable as of December 31, 2019                | 2,243                                        | $13.10                                     | 2.5                                           | $349,002


Reporting Channels and Whistleblower Protection
To ensure that our conduct meets relevant legal requirements and the highest ethical standards under the Ethics Code, TSMC provides multiple channels for reporting business conduct concerns.
First of all, our Audit Committee approved and we have implemented the “Complaint Policy and Procedures for Certain Accounting and Legal Matters” and “Procedures for Ombudsman System” that allow employees or any whistleblowers with relevant evidence to report any financial, legal, or ethical irregularities anonymously through either the Ombudsman or directly to the Audit Committee.
TSMC maintains additional internal reporting channels for our employees. To foster an open culture of ethics compliance, we encourage our employees and the third parties we do business with to report any suspected noncompliance with law or relevant TSMC policy.
TSMC treats any complaint and the investigation thereof in a confidential and sensitive manner, and strictly prohibits any form of retaliation against any individual who in good faith reports or helps with the investigation of any complaint. Due to the open reporting channels, TSMC receives reports on various issues from employees and external parties such as our customers and suppliers from time to time. Below is a summary of the Number of Reported Incidents.
Note 1: Among the 205 cases, 132 were related to employee relationship, 47 cases related to other matters (e.g. employee’s individual interest or private matters), and 26 cases related to ethical matters.
Note 2: One case involved an employee who requested a supplier to reserve a hotel and pay advance accommodation fees during his business trip, actions which violate TSMC policy, and the employee was disciplined. Another case involved an employee who abused his work relationship by requesting a supplier to make a personal loan to the employee, a severe violation of our Ethics Code, and the employee was terminated.
Note 3: After the investigation by TSMC’s Sexual Harassment Investigation Committee, four employees involved in confirmed cases of sexual harassment received severe discipline from the Company.

Year                                                 | FY 2016 | FY 2017 | FY 2018 | FY 2019
---------------------------------------------------- | ------- | ------- | ------- | ------------
Total reported cases                                 | 116     | 113     | 150     | 205 (Note 1)
Ethics-related cases                                 | 16      | 20      | 14      | 26
Cases investigated and verified as ethics violations | 2       | 4       | 1       | 2 (Note 2)
Sexual Harassment Investigation Committees Formed    | 5       | 7       | 3       | 4
Cases investigated and verified as violations        | 5       | 3       | 3       | 4 (Note 3)


Discontinued Operations
In December 2015, we completed the wind down of engineering, manufacturing and sales of our solar inverter product line (the "inverter business"). Accordingly, the results of our inverter business have been reflected as “Income (loss) from discontinued operations, net of income taxes” on our Consolidated Statements of Operations for all periods presented herein.
The effect of our sales of the remaining extended inverter warranties to our customers continues to be reflected in deferred revenue in our Consolidated Balance Sheets. Deferred revenue for extended inverter warranties and the associated costs of warranty service will be reflected in Sales and Cost of goods sold, respectively, from continuing operations in future periods in our Consolidated Statement of Operations, as the deferred revenue is earned and the associated services are rendered. Extended warranties related to the inverter product line are no longer offered.
In May 2019, we divested our grid-tied central solar inverter repair and service operation. In conjunction with the divesture, the initial product warranty for the previously sold grid-tied central solar inverters was transferred to the buyer. Accordingly, a gain of $8.6 million net of tax expense of $2.4 million was recognized in Other income (expense) and Provision (benefit) for income taxes, respectively, in our discontinued operations for the year December 31, 2019. Operating income from discontinued operations for the year ended December 31, 2019 and 2018, also includes the impacts of changes in our estimated product warranty liability, the recovery of accounts receivable and foreign exchange gain or (losses).
Income (loss) from discontinued operations, net of income taxes (in thousands):

                                                                | Years Ended December 31, |
--------------------------------------------------------------- | ------------------------ | -------
                                                                | 2019                     | 2018
Sales                                                           | $  —                     | $  —
Cost of sales                                                   | (901)                    | (88)
Total operating expense                                         | 1,022                    | 96
Operating income (loss) from discontinued operations            | (121)                    | (8)
Other income (expense)                                          | 10,895                   | (24)
Income (loss) from discontinued operations before income taxes  | 10,774                   | (32)
Provision (benefit) for income taxes                            | 2,294                    | 6
Income (loss) from discontinued operations, net of income taxes | $ 8,480                  | $  (38)


AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
17. OTHER OPERATING EXPENSE
Other operating expense consists primarily of impairment charges, net losses on sales or disposals of assets and other operating expense items. The Company records impairment charges to write down certain assets to their net realizable value after an indicator of impairment is identified and subsequent analysis determines that the asset is either partially recoverable or not recoverable. These assets consisted primarily of towers and related assets, which are typically assessed on an individual basis, network location intangibles, which relate directly to towers, and tenant-related intangibles, which are assessed on a tenant basis. Net losses on sales or disposals of assets primarily relate to certain non-core towers, other assets and miscellaneous items. Other operating expenses includes acquisition-related costs and integration costs.
Impairment charges included the following for the years ended December 31,:
(1) For the year ended December 31, 2018, impairment charges on tower and network location intangible assets included $258.3 million in India primarily related to carrier consolidation-driven churn events. In addition, the Company fully impaired the tenant relationship for Aircel Ltd., which resulted in an impairment charge of $107.3 million.
(2) During the year ended December 31, 2017, $81.0 million of impairment charges on tower and network location intangible assets and all impairment charges on tenant relationships were related to carrier consolidation-driven churn in India.
(3) For the year ended December 31, 2019, amount includes impairment charges related to right-of-use assets and land easements.

                                             | 2019  | 2018 (1) | 2017 (2)
-------------------------------------------- | ----- | -------- | --------
Tower and network location intangible assets | $77.4 | $284.9   | $108.7
Tenant relationships                         | —     | 107.3    | 100.1
Other (3)                                    | 16.8  | 1.8      | 2.6
Total impairment charges                     | $94.2 | $394.0   | $211.4


1 Effective January 1, 2019, we adopted IFRS 16, with the ongoing impacts of this standard included in our results prospectively from that date. Our 2018 and 2017 results have not been restated for the effects of IFRS 16. See “Accounting Policies”. 2 As defined. See “Key Performance Indicators”.
3 Adjusted EBITDA, adjusted EBITDA margin, and adjusted net income are non-GAAP measures and should not be considered substitutes or alternatives for GAAP measures. These are not defined terms under IFRS and do not have standard meanings, so may not be a reliable way to compare us to other companies. See “Non-GAAP Measures and Related Performance Measures” for information about these measures, including how we calculate them.
Revenue Consolidated revenue increased by 5% in 2018, reflecting revenue growth of 7% in Wireless and 1% in both Cable and Media. Wireless revenue increased as a result of the increased mix of subscribers on higher-rate plans from our various brands and an increase in sales of higher-value devices.
Cable revenue increased by 1% as the increase in Internet revenue from the general movement of customers to higher speed and usage tiers of our Internet offerings was partially offset by the decrease in legacy Television subscribers and the impact of Phone pricing packages. Media revenue increased by 1% as a result of higher revenue at the Toronto Blue Jays, including a distribution from Major League Baseball, and higher Sportsnet and other network subscription revenue, partially offset by lower advertising revenue.
Adjusted EBITDA Consolidated adjusted EBITDA increased in 2018 to $5,983 million, reflecting increases in Wireless, Cable, and Media. Wireless adjusted EBITDA increased 10% as a result of the strong flow-through of service revenue growth, partially offset by higher expenditures associated with increased subscriber volumes and costs of devices.
Cable adjusted EBITDA increased by 3% in 2018 as a result of strong Internet revenue growth, the ongoing product mix shift to higher-margin Internet services, and various cost efficiency and productivity initiatives. Media adjusted EBITDA increased 54% primarily as a result of the increase in revenue as discussed above and lower operating expenses from improvements made to our cost structure across the divisions.
Net income and adjusted net income Net income and adjusted net income both increased in 2018 primarily as a result of higher adjusted EBITDA, partially offset by higher depreciation and amortization. Net income increased to $2,059 million in 2018 from $1,845 million in 2017 and adjusted net income increased to $2,241 million in 2018 from $1,902 million in 2017.
2018 FULL-YEAR RESULTS COMPARED TO 2017

2018 FULL-YEAR RESULTS COMPARED TO 2017         |                         |                         |
----------------------------------------------- | ----------------------- | ----------------------- | -----------------------
                                                | Years ended December 31 | Years ended December 31 | Years ended December 31
(In millions of dollars, except margins)        | 2018 1                  | 2017 1                  | %Chg
Revenue                                         |                         |                         |
Wireless                                        | 9,200                   | 8,569                   | 7
Cable                                           | 3,932                   | 3,894                   | 1
Media                                           | 2,168                   | 2,153                   | 1
Corporate items and intercompany eliminations 2 | (204)                   | (247)                   | (17
Revenue                                         | 15,096                  | 14,369                  | 5
Total service revenue 2                         | 12,974                  | 12,550                  | 3
Adjusted EBITDA 3                               |                         |                         |
Wireless                                        | 4,090                   | 3,726                   | 10
Cable                                           | 1,874                   | 1,819                   | 3
Media                                           | 196                     | 127                     | 54
Corporate items and intercompany eliminations   | (177)                   | (170)                   | 4
Adjusted EBITDA 3                               | 5,983                   | 5,502                   | 9
Adjusted EBITDA margin 3                        | 39.6%                   | 38.3%                   |
Net income                                      | 2,059                   | 1,845                   | 12
Adjusted net income 3                           | 2,241                   | 1,902                   | 18


Lines of Credit
The following table summarizes our available lines of credit and committed and uncommitted lines of credit, including the revolving credit facility discussed above, and the amounts available under our accounts receivable securitization programs.
(1) Includes total borrowings under the accounts receivable securitization programs, the revolving credit facility and borrowings under lines of credit available to several subsidiaries.
(2) Of the total available lines of credit, $1,137.4 million were committed as of December 31, 2019.

                                   | December 31, |
---------------------------------- | ------------ | ---------
(In millions)                      | 2019         | 2018
Used lines of credit (1)           | $ 98.9       | $ 232.8
Unused lines of credit             | 1,245.2      | 1,135.3
Total available lines of credit(2) | $ 1,344.1    | $ 1,368.1


The Group’s revenue mainly comprises the sale of goods in-store and online, and hospitality and leisure services. Revenue is recognised when control of the goods has transferred to the customer or when the service is provided at an amount that reflects the consideration to which the Group expects to be entitled.
For sale of goods in-store, control of the goods transfers to the customer at the point the customer purchases the goods in-store. For sale of goods online, control of the goods transfers to the customer at the point the goods are delivered to, or collected by, the customer. Where payment for the goods is received prior to control transferring to the customer, revenue recognition is deferred in contract liabilities within trade and other payables in the Consolidated Statement of Financial Position until the goods have been delivered to, or collected by, the customer.
Woolworths Rewards points granted by the Group provide customers with a material right to a discount on future purchases. The amounts allocated to Woolworths Rewards points are deferred in contract liabilities within trade and other payables in the Consolidated Statement of Financial Position until redeemed by the customer.

                                 | 2019     | 2018
-------------------------------- | -------- | --------
                                 | 53 WEEKS | 52 WEEKS
                                 | $M       | $M
Sale of goods in-store           | 54,720   | 52,533
Sale of goods online             | 2,534    | 1,883
Leisure and hospitality services | 1,671    | 1,612
Other                            | 1,059    | 916
Total                            | 59,984   | 56,944