Pro forma consolidated results of operations
The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the acquisitions of MOI and GP had been completed on January 1, 2018. The pro forma information includes adjustments to depreciation expense for property and equipment acquired and amortization expense for the intangible assets acquired and the elimination of transaction expenses recognized in each period. Transaction-related expenses associated with the acquisition and excluded from pro forma income from continuing operations were $1.0 million for the year ended December 31, 2019. There were no transaction-related expenses associated with the acquisition for the year ended December 31, 2018. The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations or the combined business had the acquisitions of MOI and GP occurred on January 1, 2018, or the results of future operations of the combined business. For instance, planned or expected operational synergies following the acquisition are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below.

                                  | Years Ended December 31, |
--------------------------------- | ------------------------ | -----------
                                  | 2019                     | 2018
                                  | (unaudited)              | (unaudited)
Revenue                           | $72,576,902              | $60,249,896
Income from continuing operations | $6,912,802               | $1,559,008


Note 15. Deferred Charges and Other Assets
Deferred charges and other assets consisted of the following (in thousands):

                                                    | December 31, |
--------------------------------------------------- | ------------ | -------
                                                    | 2019         | 2018
Trade accounts receivable, net, noncurrent (Note 2) | $26,496      | $15,948
Equity method investments (Note 1)                  | 9,254        | 9,702
Net deferred tax assets, noncurrent (Note 20)       | 6,774        | 5,797
Rent and other deposits                             | 6,106        | 5,687
Value added tax receivables, net, noncurrent        | 592          | 519
Other                                               | 6,723        | 5,711
                                                    | $55,945      | $43,364


2019 Compared to 2018
Net Sales. Net sales increased 9%, or $651 million, in 2019 compared to 2018. Net sales of products (hardware and software) increased 8% and net sales of services increased 20% in 2019 compared to 2018. Our net sales by operating segment for 2019 and 2018 were as follows (dollars in thousands):

             | 2019       | 2018       | %Change
------------ | ---------- | ---------- | -------
NorthAmerica | $6,024,305 | $5,362,981 | 12%
EMEA         | 1,526,644  | 1,530,241  | —
APAC         | 180,241    | 186,914    | (4%)
Consolidated | $7,731,190 | $7,080,136 | 9%


The amortized cost and fair value of cash equivalents, investments, and restricted investments with contractual maturities as of June 30, 2019, are as follows:
The Company has the ability, if necessary, to liquidate its investments in order to meet the Company’s liquidity needs in the next 12 months. Accordingly, those investments with contractual maturities greater than 12 months from the date of purchase nonetheless are classified as short-term on the accompanying Consolidated Balance Sheets.

                                      | Cost       | Fair Value
------------------------------------- | ---------- | --------------
                                      |            | (in thousands)
Due in one year or less               | $4,842,996 | $4,844,145
Due after one year through five years | 331,707    | 333,019
Due in more than five years           | 41,612     | 41,756
                                      | $5,216,315 | $5,218,920


Depreciation and Amortization
Depreciation and amortization includes the following (in millions):
Computer software amortization for the year ended December 31, 2018 includes accelerated amortization of $1.7 million related to certain internally developed software. Deferred contract costs amortization for the years ended December 31, 2019, 2018 and 2017 includes accelerated amortization of $6.2 million, $3.4 million and $3.3 million, respectively.

                        |        | Year ended December 31, |
----------------------- | ------ | ----------------------- | ------
                        | 2019   | 2018                    | 2017
Computer software       | $97.3  | $94.5                   | $84.0
Other intangible assets | 59.3   | 57.2                    | 67.8
Deferred contract costs | 42.9   | 32.9                    | 25.7
Property and equipment  | 36.7   | 32.4                    | 29.0
Total                   | $236.2 | $217.0                  | $206.5


NOTE 13 - TAXES ON INCOME
B. Deferred income taxes:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets are as follows:
As of December 31, 2019, the Company has provided a full valuation allowances of $19,911 in respect of deferred tax assets resulting from tax loss carryforward and other temporary differences. Management currently believes that because the Company has a history of losses, it is more likely than not that the deferred tax regarding the loss carryforward and other temporary differences will not be realized in the foreseeable future.

                                                  | December 31         |
------------------------------------------------- | ------------------- | --------
                                                  | 2019                | 2 0 1 8
                                                  | U.S. $ in thousands |
Operating loss carryforward                       | 73,260              | 57,768
Net deferred tax asset before valuation allowance | 19,911              | 15,916
Valuation allowance                               | (19,911)            | (15,916)
Net deferred tax asset                            | 795                 | 772


In 2019, Global Financing delivered external revenue of $1,400 million and total revenue of $2,632 million, with a decrease in gross margin of 2.7 points to 58.8 percent. Total pre-tax income of $1,055 million decreased 22.5 percent compared to 2018 and return on equity decreased 5.0 points to 25.8 percent.
Global Financing total revenue decreased 17.8 percent compared to the prior year. This was due to a decrease in internal revenue of 23.5 percent, driven by decreases in internal used equipment sales (down 27.4 percent to $862 million) and internal financing (down 12.6 percent to $370 million). External revenue declined 11.9 percent due to decreases in external financing (down 8.5 percent to $1,120 million) and external used equipment sales (down 23.4 percent to $281 million).
The decrease in internal financing revenue was due to lower average asset balances, partially offset by higher asset yields. The decrease in external financing revenue reflects the wind down of the OEM IT commercial financing operations.
Sales of used equipment represented 43.4 percent and 48.5 percent of Global Financing’s revenue for the years ended December 31, 2019 and 2018, respectively. The decrease in 2019 was due to a lower volume of internal used equipment sales. The gross profit margin on used sales was 52.2 percent and 54.2 percent for the years ended December 31, 2019 and 2018, respectively. The decrease in the gross profit margin was driven by lower margins on internal used equipment sales.
Global Financing pre-tax income decreased 22.5 percent year to year primarily driven by a decrease in gross profit ($422 million), partially offset by a decrease in total expense ($115 million), which was mainly driven by a decline in IBM shared expenses in line with the segment’s performance, a lower provision for credit losses and a gain from the sale of certain commercial financing capabilities in the first quarter of 2019.
The decrease in return on equity from 2018 to 2019 was primarily due to lower net income. Refer to page 45 for the details of the after-tax income and return on equity calculations.

($ in millions)                 |        |        |
------------------------------- | ------ | ------ | -------------------------
For the year ended December 31: | 2019   | 2018   | Yr.-to-Yr. Percent Change
External revenue                | $1,400 | $1,590 | (11.9) %
Internal revenue                | 1,232  | 1,610  | (23.5)
Total revenue                   | $2,632 | $3,200 | (17.8) %
Pre-tax income                  | $1,055 | $1,361 | (22.5) %


H. Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted-average number of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of common stock outstanding and potentially dilutive securities outstanding during the period, as calculated using the treasury stock method. Potentially dilutive securities primarily include unvested restricted stock units (“RSUs”), including PSU awards, and stock options, including purchase options under VMware’s employee stock purchase plan, which included Pivotal’s employee stock purchase plan through the date of acquisition. Securities are excluded from the computation of diluted net income per share if their effect would be anti-dilutive. VMware uses the two-class method to calculate net income per share as both classes share the same rights in dividends; therefore, basic and diluted earnings per share are the same for both classes.
The following table sets forth the weighted-average common share equivalents of Class A common stock that were excluded from the diluted net income per share calculations during the periods presented because their effect would have been anti-dilutive (shares in thousands):

                          | For the Year Ended |                  |
------------------------- | ------------------ | ---------------- | ----------------
                          | January 31, 2020   | February 1, 2019 | February 2, 2018
Anti-dilutive securities: |                    |                  |
Employee stock options    | 34                 | 50               | 51
Restricted stock units    | 315                | 255              | 140
Total                     | 349                | 305              | 191


Geographic Information
The following table is a summary of our long-lived assets which include property and equipment, net and right of use assets based on the physical location of the assets (in thousands):

              | December 31, | December 31,
------------- | ------------ | ------------
              | 2019         | 2018
United States | $35,964      | $5,525
Japan         | 2,689        | 1,108
Other         | 2,017        | 629
Total         | $40,670      | $7,262


The Credit Agreement and 2026 Notes contain certain customary affirmative covenants and negative covenants that limit or restrict, subject to certain exceptions, the incurrence of liens, indebtedness of subsidiaries, mergers, advances, investments, acquisitions, transactions with affiliates, change in nature of business, and the sale of the assets. In addition, the Credit Agreement and 2026 Notes contain certain customary mandatory prepayment provisions. The Company is also required to maintain a consolidated leverage ratio at or below a specified amount and an interest coverage ratio at or above a specified amount. As specified in the Credit Agreement and 2026 Notes agreement, if certain events occur and continue, the Company may be required to repay all amounts outstanding under the Credit Facility and 2026 Notes. As of December 31, 2019, and at all times during the period, the Company was in compliance with its financial debt covenants.
Total debt is comprised of the following (in thousands):

                                             | December 31, |
-------------------------------------------- | ------------ | ---------
                                             | 2019         | 2018
Term loans                                   | $756,060     | $284,959
Revolving credit facility                    | 239,000      | —
5.750% Senior Notes, due August 2026         | 400,000      | 400,000
Debt issuance costs                          | (21,905 )    | (13,203 )
Total debt                                   | 1,373,155    | 671,756
Less current portion of term credit facility | 38,950       | 23,747
Less current portion of debt issuance costs  | (4,802 )     | (2,980 )
Total long-term debt                         | $1,339,007   | $650,989


Exposures The maximum credit risk exposure of the group’s financial assets at the balance sheet date is as follows:
The carrying amount excludes £445m (2017/18: £317m, 2016/17: £360m) of non-current trade and other receivables which relate to non-financial assets, and £1,456m (2017/18: £1,496m, 2016/17: £1,106m) of prepayments, deferred contract costs and other receivables.

                              | Notes | 2019  | 2018  | 2017
----------------------------- | ----- | ----- | ----- | -----
At 31 March Notes             |       | £m    | £m    | £m
Derivative financial assets   |       | 1,592 | 1,509 | 2,246
Investments                   | 23    | 3,268 | 3,075 | 1,564
Trade and other receivables a | 17    | 1,766 | 2,518 | 2,729
Contract assets               | 6     | 1,602 | –     | –
Cash and cash equivalents     | 24    | 1,666 | 528   | 528
                              |       | 9,894 | 7,630 | 7,067


4. Debtors
Amounts owed by Group undertakings are non-interest-bearing, unsecured and have no fixed date of repayment.

                                   | 2019  | 2018
---------------------------------- | ----- | -----
                                   | £m    | £m
Amounts owed by Group undertakings | 414.7 | 439.9
Deferred tax asset                 | 1.2   | 0.8
Total                              | 415.9 | 440.7


NOTE 13—GUARANTEES AND CONTINGENCIES
We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows:
(1) Includes interest up to maturity and principal payments. Please see note 10 "Long-Term Debt" for more details
(2) Net of $30.7 million of sublease income to be received from properties which we have subleased to third parties.

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


The following table shows the activity of our U.S. and international plan assets, which are measured at fair value using Level 3 inputs.
(1) Balances as of December 31, 2018 have been revised from our 2018 Form 10-K filing to reflect changes in leveling classification of specific funds. These reclassifications did not impact the fair value of any of our pension plan assets.
(2) Purchases of Level 3 assets in 2018 primarily represent the purchase of bulk annuity contracts (buy-ins) in some of our international plans.

                                                   | December 31, |
-------------------------------------------------- | ------------ | -------
(In millions)                                      | 2019         | 2018
Balance at beginning of period(1)                  | $ 150.1      | $ 71.5
Gains (losses) on assets still held at end of year | 16.8         | (16.0)
Purchases, sales, issuance, and settlements(2)     | 8.3          | 103.7
Transfers in and/or out of Level 3                 | —            | 1.0
Foreign exchange gain (loss)                       | 5.0          | (10.1)
Balance at end of period(1)                        | $ 180.2      | $ 150.1


REVENUE
(1) For the three-month period ended August 31, 2019, the average foreign exchange rate used for translation was 1.3222 USD/CDN.
(2) Fiscal 2018 was restated to comply with IFRS 15 and to reflect a change in accounting policy as well as to reclassify results from Cogeco Peer 1 as discontinued operations. For further details, please consult the "Accounting policies" and "Discontinued operations" sections.
(3) Fiscal 2019 actuals are translated at the average foreign exchange rate of the comparable period of fiscal 2018 which was 1.3100 USD/CDN.
Fiscal 2019 fourth-quarter revenue increased by 3.1% (2.7% in constant currency) resulting from: • growth in the American broadband services segment mainly due to strong organic growth and the FiberLight acquisition. • stable revenue in the Canadian broadband services segment mainly as a result of: ◦ rate increases; partly offset by ◦ decreases in video and telephony services customers compared to the same period of the prior year primarily due to issues resulting from the implementation of a new customer management system in the second half of fiscal 2018.

Three months ended August 31,                 | 2019 (1) | 2018 (2) | Change | Change in constant currency (3) | Foreign exchange impact (3)
--------------------------------------------- | -------- | -------- | ------ | ------------------------------- | ---------------------------
(in thousands of dollars, except percentages) | $        | $        | %      | %                               | $ $
Canadian broadband services                   | 319,935  | 319,741  | 0.1    | 0.1                             | -
American broadband services                   | 263,738  | 246,443  | 7.0    | 6.0                             | 2,427
                                              | 583,673  | 566,184  | 3.1    | 2.7                             | 2,427


Volatility in average selling prices for our semiconductor memory and storage products may adversely affect our business.
We have experienced significant volatility in our average selling prices, including dramatic declines as noted in the table below, and may continue to experience such volatility in the future. In some prior periods, average selling prices for our products have been below our manufacturing costs and we may experience such circumstances in the future. Average selling prices for our products that decline faster than our costs could have a material adverse effect on our business, results of operations, or financial condition.

               | DRAM                                          | NAND
-------------- | --------------------------------------------- | -----
               | (percentage change in average selling prices) |
2019 from 2018 | (30)%                                         | (44)%
2018 from 2017 | 37%                                           | (8)%
2017 from 2016 | 19%                                           | (7)%
2016 from 2015 | (35)%                                         | (19)%
2015 from 2014 | (11)%                                         | (15)%


As described in Note 7, the acquisition of Norstel resulted in the recognition of $43 million in goodwill which has been included in the ADG segment to align the goodwill of the acquired Company with the segment under which the related activities will be reported.
As of the end of the third quarters of 2019 and 2018, the Company performed its annual impairment test. The Company did not elect to perform a qualitative assessment. The impairment test was conducted following a two-step process. In the first step, the Company compared the fair value of the reporting units tested to their carrying value. Based upon the first step of the goodwill impairment test, no impairment was recorded since the fair value of the reporting units exceeded their carrying value.
Goodwill as at December 31, 2019 and 2018 is net of accumulated impairment losses of $102 million, of which $96 million relates to the MDG segment and $6 million to Others. In 2019, 2018 and 2017, no impairment loss was recorded by the Company.

                             | Automotive and Discrete Group (ADG) | Microcontrollers and Digital ICs Group (MDG) | Analog, MEMS & Sensors Group AMS) | Total
---------------------------- | ----------------------------------- | -------------------------------------------- | --------------------------------- | -----
December 31, 2017            | —                                   | 121                                          | 2                                 | 123
Foreign currency translation | —                                   | (2)                                          | —                                 | (2)
December 31, 2018            | —                                   | 119                                          | 2                                 | 121
Business combination         | 43                                  | —                                            | —                                 | 43
Foreign currency translation | —                                   | (2)                                          | —                                 | (2)
December 31, 2019            | 43                                  | 117                                          | 2                                 | 162


Total Shareholder Return Awards
During the years ended December 31, 2019, 2018, and 2017, pursuant to the 2016 Incentive Plan, the Company granted total shareholder return awards (“TSRs”). TSRs are performance shares that are earned, if at all, based upon the Company’s total shareholder return as compared to a group of peer companies over a three-year performance period. The award payout can range from 0% to 200%. To determine the grant date fair value of the TSRs, a Monte Carlo simulation model is used. The Company recognizes compensation expense for the TSRs over a three-year performance period based on the grant date fair value.
The grant date fair value of the TSRs was estimated using the following weighted-average assumptions:

                        |       | Years Ended December 31, |
----------------------- | ----- | ------------------------ | -----
                        | 2019  | 2018                     | 2017
Expected life (years)   | 2.8   | 2.9                      | 2.9
Interest rate           | 2.5%  | 2.4%                     | 1.5%
Volatility              | 29.3% | 28.0%                    | 26.5%
Expected dividend yield | —     | —                        | —


21. Subsidiaries
The advances given to subsidiaries were interest-free and unsecured with settlement neither planned nor likely to occur in the foreseeable future.
The deemed investment in a subsidiary, Singtel Group Treasury Pte. Ltd. (“SGT”), arose from financial guarantees provided by the Company for loans drawn down by SGT prior to 1 April 2010.
The significant subsidiaries of the Group are set out in Note 44.1 to Note 44.3.

                                      |               | Company       |
------------------------------------- | ------------- | ------------- | ------------
                                      | 31 March 2019 | 31 March 2018 | 1 April 2017
                                      | S$ Mil        | S$ Mil        | S$ Mil
Unquoted equity shares, at cost       | 14,259.7      | 13,676.4      | 11,001.2
Shareholders' advances                | 5,733.0       | 5,733.0       | 6,423.3
Deemed investment in a subsidiary     | 32.5          | 32.5          | 32.5
                                      | 20,025.2      | 19,441.9      | 17,457.0
Less: Allowance for impairment losses | (16.0)        | (16.0)        | (16.0)
                                      | 20,009.2      | 19,425.9      | 17,441.0


INTEREST EXPENSE
The components of interest expense are as follows:
Interest expense, including administrative and other fees, was $25,633 for 2019 compared with $30,890 in 2018. The decrease in interest expense was primarily associated with the impact of the refinancing of our term loan at the end of 2018 and interest capitalized during 2019 due to vessels under construction.

                                             | Years Ended December 31, |
-------------------------------------------- | ------------------------ | -------
                                             | 2019                     | 2018
Interest before impact of interest rate caps | $25,633                  | $30,709
Impact of interest rate caps                 | —                        | 181
Interest expense                             | $25,633                  | $30,890


Comparison of Fiscal Year Ended September 27, 2019 to Fiscal Year Ended September 28, 2018
Revenue. In fiscal year 2019, our revenue decreased by $70.7 million, or 12.4%, to $499.7 million from $570.4 million for fiscal year 2018. Revenue from our primary markets, the percentage of change between the years and revenue by primary markets expressed as a percentage of total revenue were (in thousands, except percentages):
In fiscal year 2019, our Telecom market revenue decreased by $42.0 million, or 18.8%, compared to fiscal year 2018. The decrease was primarily due to the full year effect of our May 2018 sale of the Japan-based long-range optical subassembly business (the "LR4 Business"), lower sales of carrier-based optical semiconductor products to our Asia customer base, as well as lower sales of products targeting fiber to the home applications.
In fiscal year 2019, our Data Center market revenue decreased by $48.0 million, or 29.6%, compared to fiscal year 2018. The decrease was primarily due to lower revenue related to sales of legacy optical products and lasers, partially offset by the recognition of $7.0 million of licensing revenue during the fiscal year ended September 27, 2019.
In fiscal year 2019, our I&D market revenues increased by $19.3 million, or 10.4%, compared to fiscal year 2018. The increase was related to higher revenue from sales across the product portfolio.

                     | Fiscal Years |           |
-------------------- | ------------ | --------- | --------
                     | 2019         | 2018      | % Change
Telecom              | $180,938     | $ 222,940 | (18.8)%
Data Center          | 114,132      | 162,098   | (29.6)%
Industrial & Defense | 204,638      | 185,360   | 10.4 %
Total                | $499,708     | $ 570,398 | (12.4)%
Telecom              | 36.2%        | 39.1%     |
Data Center          | 22.8%        | 28.4%     |
Industrial & Defense | 41.0%        | 32.5%     |
 Total               | 100.0%       | 100.0%    |


10.2. Assets held for sale
On 21 December 2018, the Group entered into an agreement for the divestment of a component of freehold investment property in Melbourne, Victoria for $1m. This has been included within fair value adjustments in the statement of profit or loss. This transaction settled on 15 January 2019.
On 28 June 2019, the Group entered into an agreement for the sale of commercial investment property in Dunedin, New Zealand for NZD $1.3m less cost of sale of NZD $0.1m (AUD $1.2m less cost of sale of $0.1m). This has resulted in an unrealised gain of NZD $1.2m (AUD $1.1m) on the asset’s carrying value. This has been included within fair value adjustments in the statement of profit or loss.
As at 1 July 2018, the Group held a contractual agreement for the sale of the land and buildings of the Croydon self-storage centre for $5.8m, less cost of sale of $0.1m. This resulted in this asset being classified as held for sale. Due to unforeseen circumstances outside of the Group’s control this transaction did not proceed. At 30 June 2019 the asset has been classified as freehold investment property and is no longer held for sale.

                                                    |       | 2019    | 2018
--------------------------------------------------- | ----- | ------- | -------
                                                    | Notes | $'000   | $'000
Current assets                                      |       |         |
Opening balance at 1 July                           |       | 5,713   | 5,713
Item reclassified from freehold investment property | 10.4  | 2,068   | 4,400
Item reclassified to freehold investment property   | 10.4  | (5,713) |
Disposals during the year                           |       | (961)   | (4,400)
Total assets held for sale                          |       | 1,107   | 5,713


ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
See Note 3 of our Notes to Consolidated Financial Statements for a discussion of 2019 and 2018 acquisitions.
Results of Operations
Revenues increased $9.0 million, or 61%, in 2019 compared to the prior year, with overall growth supported by the acquisition of Golden Ridge in November 2018, and MGI Grain in April 2019. Food product revenues increased 97% year over year, primarily due to the addition of new products for human consumption from Golden Ridge and MGI Grain. Animal feed product revenues increased 10%. Animal feed product growth was primarily due to increased buying from our existing SRB customer base.
Gross profit percentage decreased 23.8 percentage points to negative 3.6% in 2019 from 20.2% in the prior year. The decrease in gross profit was primarily attributable to operating losses at Golden Ridge due to an unfavorable contract to sell medium grain rice entered into by the seller of the mill and low levels of plant utilization in the latter half of the year while the mill was going through a planned upgrade cycle. With this project completed in early January 2020, we expect to see improved productivity and a positive contribution margin from Golden Ridge in 2020.
Selling, general and administrative (SG&A) expenses were $13.7 million in 2019, compared to $11.2 million in 2018, an increase of $2.5 million, or 22.4%. Outside services increased $1.1 million in 2019, compared to the prior year, primarily as a result of higher outside accounting, legal and professional fees associated with the acquisition of Golden Ridge and MGI Grain. Salary, wages and benefit related expenses increased $1.1 million in 2019, compared to the prior year, driven substantially by equity grants and outside labor costs. Bad debt expense increased $0.2 million and rent expense increased $0.1 million in 2019, compared to the prior year.
Other, net was $0.9 million for 2019 compared to $0.2 million in 2018. This increase was primarily related to the settlement of a net working capital dispute and other issues with the seller of Golden Ridge.

                                             | Years Ended December 31 |          | Change
-------------------------------------------- | ----------------------- | -------- | -------
                                             | 2019                    | 2018     | %
                                             | (in thousands)          |          |
Revenues                                     | $23,713                 | $14,762  | 60.6
Cost of goods sold                           | 24,574                  | 11,780   | (108.6)
Gross profit (loss)                          | (861)                   | 2,982    |
Gross profit %                               | -3.6%                   | 20.2%    |
Selling, general and administrative expenses | 13,696                  | 11,194   | (22.4)
Loss from operations                         | (14,557)                | (8,212)  | (77.3)
Other income (expense):                      | (96)                    | (12)     |
Interest expense                             | 50                      | -        |
Other, net                                   | 868                     | 168      |
Total other (expense) income                 | 822                     | 156      |
Loss before income taxes                     | $(13,735)               | $(8,056) |


Item 10. Directors, Executive Officers and Corporate Governance.
Executive Officers and Directors
The following sets forth certain information with respect to our executive officers and directors..
Garo H. Armen, PhD, Executive Chairman, is one of our founders and joined us in September 2004. Garo H. Armen is Chairman and Chief Executive Officer of Agenus
Inc., a biotechnology company he co-founded in 1994. From mid-2002 through 2004, he also served as Chairman of the Board of the biopharmaceutical company Elan
Corporation, plc, which he successfully restructured. Prior to Agenus Inc., Dr. Armen established Armen Partners, a money management firm specializing in biotechnology and
pharmaceutical companies and was the architect of the widely publicized creation of the Immunex Lederle oncology business in 1993. Earlier, he was a senior vice president of
research at Dean Witter Reynolds, having begun his career on Wall Street as an analyst and investment banker at EF Hutton. In 2002, Dr. Armen founded the Children of
Armenia Fund, a nonprofit organization dedicated to significantly rebuilding and revitalizing impoverished rural Armenian towns to provide immediate and sustainable benefits
to children and youth. He received the Ellis Island Medal of Honor in 2004 for his humanitarian efforts, and received the Sabin Humanitarian Award from the Sabin Vaccine
Institute in 2006 for his achievements in biotechnology and progressing medical research. Dr. Armen was also the Ernst & Young 2002 New York City Biotechnology
Entrepreneur of the Year, and received a Wings of Hope Award in 2005 from The Melanoma Research Foundation for his ongoing commitment to the melanoma community. Dr.
Armen received a PhD in physical chemistry from the Graduate Center, City University of New York, after which he worked as a research fellow at Brookhaven National
Laboratories in Long Island, NY. Dr. Armen brings to our Board a deep historical and practical knowledge of the business of the Company and its technologies, as well as
years of expertise in the financial and biopharmaceutical arenas.

Name               | Age | Position (s)
------------------ | --- | --------------------------------------------
Garo H. Armen      | 67  | Executive Chairman of the Board of Directors
Alexander K. Arrow | 49  | Chief Financial Officer
Robert B. Stein    | 69  | Director
Khalil Barrage     | 55  | Director
Brian J. Corvese   | 62  | Director
Josh Silverman     | 49  | Director


13. Other investments
The Group holds a number of other listed and unlisted investments, mainly comprising managed funds, loan notes, deposits and government bonds.
Accounting policies
Other investments comprising debt and equity instruments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, including transaction costs.
Debt securities that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost using the effective interest method, less any impairment. Debt securities that do not meet the criteria for amortised cost are measured at fair value through profit and loss.
Equity securities are classified and measured at fair value through other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following derecognition of the investment. See note 1 “Basis of preparation” for previous measurement categories applicable to the comparative balances at 31 March 2018
Debt securities include loan notes of US$nil (2018: US$2.5 billion (€2.0 billion) issued by Verizon Communications Inc. as part of the Group’s disposal of its interest in Verizon Wireless all of which is recorded within non-current assets and €0.8 billion (2018: €0.9 billion) issued by VodafoneZiggo Holding B.V.
1  Items are measured at fair value and the valuation basis is level 2 classification, which comprises items where fair value is determined from inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
2  Items are measured at amortised cost and the carrying amount approximates fair value.

                                    | 2019 | 2018
----------------------------------- | ---- | -----
                                    | €m   | €m
Included within non-current assets: |      |
Equity securities1                  | 48   | 47
Debt securities2                    | 822  | 3,157
                                    | 870  | 3,204


Equity Compensation Plan Information
The following table summarizes share and exercise price information for our equity compensation plans as of December 31, 2019.
(1) Includes 105,000 shares of our common stock issuable upon exercise of outstanding stock options and 340,000 shares issuable upon vesting of outstanding restricted stock units.
(2) Represents an individual option grant to our Chairman and Chief Executive Officer outside of, and prior to the establishment of, the 2013 Stock Incentive Plan in October 2013 referred to in the above table. The option agreement pertaining to such option grant contain customary anti-dilution provisions.
(3) Does not take into account outstanding restricted stock units as these awards have no exercise price.
Our 2013 Stock Incentive Plan (“2013 Plan”) provides for the grant of any or all of the following types of awards: (a) stock options, (b) restricted stock, (c) deferred stock, (d) stock appreciation rights, and (e) other stock-based awards including restricted stock units. Awards under the 2013 Plan may be granted singly, in combination, or in tandem. Subject to standard anti-dilution adjustments as provided in the 2013 Plan, the 2013 Plan provides for an aggregate of 2,600,000 shares of our common stock to be available for distribution pursuant to the 2013 Plan. The Compensation Committee (or the Board of Directors) will generally have the authority to administer the 2013 Plan, determine participants who will be granted awards under the 2013 Plan, the size and types of awards, the terms and conditions of awards and the form and content of the award agreements representing awards. Awards under the 2013 Plan may be granted to our employees, directors and consultants. As of December 31, 2019, there were options to purchase an aggregate of 605,000 shares of common stock outstanding and 340,000 shares issuable upon vesting of outstanding restricted stock units granted under the 2013 Plan, and a balance of 1,780,505 shares of common stock are reserved for issuance under the 2013 Plan.

                                                           | Number of securities to be issued upon exercise of outstanding options and rights | Weighted-average exercise price of outstanding options and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a))
---------------------------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------
                                                           | (a)                                                                               | (b)                                                               | (c)
Equity compensation plans approved by security holders     | 445,000(1)                                                                        | $2.34(3)                                                          | 1,780,505
Equity compensation plans not approved by security holders | 500,000(2)                                                                        | $1.19                                                             | —
Total                                                      | 945,000                                                                           | $1.39(3)                                                          | 1,780,505


Cash used in investing activities
Detail of the cash used in investing activities is included below for each year (dollars in millions).
2019 vs. 2018. The $8.8 million higher spend on investing activities during 2019 compared to 2018 was primarily related to an increase in capitalized costs associated with various internally-developed software projects, such as mobile application development and transaction processing, an increase in hardware costs primarily associated with our growing infrastructure needs and an increase in leasehold improvements associated with security build outs of expanded office space.
2018 vs. 2017. We had net cash used in investing activities of $6.6 million during 2018 compared to $4.1 million during 2017. The higher spend in 2018 was primarily related to an increase in software expenditures, most of which were capitalized costs related to internally-developed software, which consisted primarily of merchant experience enhancements and mobile application development. This activity was partially offset by lower infrastructure expenditures in 2018 compared to 2017, as we did not have any material changes to our leased premises during 2018.

                                              |       | Year Ended December 31, |
--------------------------------------------- | ----- | ----------------------- | ----
                                              | 2019  | 2018                    | 2017
Software                                      | $12.7 | $5.4                    | $2.3
Computer hardware                             | 1.2   | 0.8                     | 0.8
Leasehold improvements                        | 0.9   | 0.2                     | 0.5
Furniture                                     | 0.6   | 0.2                     | 0.5
Purchases of property, equipment and software | $15.4 | $6.6                    | $4.1


NET DEBT
The term net debt does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers.
We define net debt as debt due within one year plus long-term debt and 50% of preferred shares, less cash and cash equivalents, as shown in BCE’s consolidated statements of financial position. We include 50% of outstanding preferred shares in our net debt as it is consistent with the treatment by certain credit rating agencies.
We consider net debt to be an important indicator of the company’s financial leverage because it represents the amount of debt that is not covered by available cash and cash equivalents. We believe that certain investors and analysts use net debt to determine a company’s financial leverage.
Net debt has no directly comparable IFRS financial measure, but rather is calculated using several asset and liability categories from the statements of financial position, as shown in the following table.

                                    | 2019   | 2018
----------------------------------- | ------ | ------
Debt due within one year            | 3,881  | 4,645
Long-term debt                      | 22,415 | 19,760
50% of outstanding preferred shares | 2,002  | 2,002
Cash and cash equivalents           | (145)  | (425)
Net debt                            | 28,153 | 25,982


6. Called up share capital
Accounting policies
Equity instruments issued by the Company are recorded at the amount of the proceeds received, net of direct issuance costs.
Notes: 1 At 31 March 2019 there were 50,000 (2018: 50,000) 7% cumulative fixed rate shares of £1 each in issue
2 At 31 March 2019 the Group held 1,584,882,610 (2018: 2,139,038,029) treasury shares with a nominal value of €264 million (2018: €356 million). The market value of shares held was €2,566 million (2018: €4,738 million). During the year, 45,657,750 (2018: 53,026,317) treasury shares were reissued under Group share schemes. On 25 August 2017, 729,077,001 treasury shares were issued in settlement of tranche 1 of a maturing subordinated mandatory convertible bond issued on 19 February 2016. On 25 February 2019, 799,067,749 treasury shares were issued in settlement of tranche 2 of the maturing subordinated mandatory convertible bond. On 5 March 2019 the Group announced the placing of subordinated mandatory convertible bonds totalling £1.72 billion with a 2 year maturity date in 2021 and £1.72 billion with a 3 year maturity date due in 2022. The bonds are convertible into a total of 2,547,204,739 ordinary shares with a conversion price of £1.3505 per share. For further details see note 20 “Borrowings and capital resources” in the consolidated financial statements.
3 Represents US share awards and option scheme awards.

                                                                              |                | 2019  |                | 2018
----------------------------------------------------------------------------- | -------------- | ----- | -------------- | -----
                                                                              | Number         | €m    | Number         | €m
Ordinary shares of 2020⁄21 US cents each allotted, issued and fully paid:1, 2 |                |       |                |
1 April                                                                       | 28,814,803,308 | 4,796 | 28,814,142,848 | 4,796
Allotted during the year3                                                     | 454,870        | –     | 660,460        | –
31 March                                                                      | 28,815,258,178 | 4,796 | 28,814,803,308 | 4,796


The $252.5 million of valuation allowance as of September 27, 2019 relates primarily to federal and state NOLs, tax credit carryforwards and a partial valuation allowance on tax credits in Canada of $19.0 million whose recovery is not considered more likely than not. The$243.1 million of valuation allowance as of September 28, 2018 related primarily to federal and state NOLs, tax credit carryforwards and a partial valuation allowance on tax credits in Canada of$13.6 million whose recovery is not considered more likely than not. The change during the fiscal year endedSeptember 27, 2019 of $9.4 million primarily relates to the reduction of our NOLs due to section 382 limitations, the changes in our temporary differences, and the lower U.S federal tax rate.
Our effective tax rates differ from the federal and statutory rate as follows:
For fiscal years 2019, 2018 and 2017, the effective tax rates on $423.2 million, $155.2 million and $49.5 million, respectively, of pre-tax loss from continuing operations were 9.3%, 13.8% and (203.8)%, respectively.
For fiscal year 2019, the effective tax rate was primarily impacted by a change in our NOL carryforward due to an adjustment in our Section 382 limitation from a prior period acquisition and the immediate recognition of the current and deferred income tax effects totaling $39.8 million from an intra-entity transfer of a license for intellectual property to a higher taxed jurisdiction that received a tax basis step-up.
For fiscal year 2018, the effective tax rate was primarily impacted by the Tax Cuts and Jobs Act (the "Tax Act"). The effective income tax rates for fiscal years 2019, 2018 and 2017 were also impacted by a lower income tax rate in many foreign jurisdictions in which our foreign subsidiaries operate, changes in valuation allowance, research and development tax credits, and a fair market value adjustment of warrant liabilities.
All earnings of foreign subsidiaries, other than our M/A-COM Technology Solutions International Limited Cayman Islands subsidiary ("Cayman Islands subsidiary"), are considered indefinitely reinvested for the periods presented. During fiscal year 2019 we changed our position for our Cayman Islands subsidiary to no longer have its earnings permanently reinvested.
Although a foreign subsidiary would typically have to accrue for foreign withholding tax liabilities associated with undistributed earnings, Cayman Islands has no withholding tax under domestic law, therefore, we did not accrue for foreign withholding tax.
During fiscal year 2019 we finalized our calculation of the one-time deemed repatriation of gross foreign earnings and profits, totaling $156.8 million, which resulted in approximately $86.7 million in U.S. taxable income for the year ended September 28, 2018 with Grand Cayman and Ireland accounting for$ 59.7 million and $25.6 million, respectively. Due to the fact that we are in a full U.S. valuation allowance, this one-time deemed repatriation had no impact on our tax expense for fiscal year 2018.
Our fiscal year 2019 tax provision incorporated changes required by the Tax Act. Some of these changes include a new limitation on the deductible interest expense, inclusion of Global Intangible Low Taxed Income earned by controlled foreign corporations, computation of the new base erosion anti-abuse minimum tax, repealing the performance-based compensation exception to section 162(m) and revising the definition of a covered employee.

                                   |        | Fiscal Years |
---------------------------------- | ------ | ------------ | --------
                                   | 2019   | 2018         | 2017
Federal statutory rate             | 21.0%  | 24.5%        | 35.0%
Foreign rate differential          | 1.6    | 5.1          | 31.9
State taxes net of federal benefit | 0.9    | 0.8          | 0.2
Warrant liabilities                | —      | 4.4          | (1.8)
Change in valuation allowance      | (2.4)  | 34.0         | (270.0)
Research and development credits   | 1.4    | 9.0          | 12.8
Provision to return adjustments    | 0.3    | 8.3          | (4.0)
Section 382 adjustment             | (19.3) | —            | —
Nondeductible compensation expense | (0.6)  | 1.4          | (4.1)
Global Intangible Low Taxed Income | (2.9)  | —            | —
Nondeductible legal fees           | —      | 0.9          | (3.9)
2017 tax reform                    | —      | (73.7)       | —
Intra-entity license transfer      | 9.4    | —            | —
Other permanent differences        | (0.1)  | (0.9)        | 0.1
Effective income tax rate          | 9.3%   | 13.8%        | (203.8)%


Cash Flows
The following table summarizes our cash flows for the periods indicated:
Operating Activities
Our primary source of cash from operating activities has been cash collections from our customers. We expect cash inflows from operating activities to be primarily affected by increases in total bookings. Our primary uses of cash from operating activities have been for domain registration costs paid to registries, software licensing fees related to third-party email and productivity solutions, personnel costs, discretionary marketing and advertising costs, technology and development costs and interest payments. We expect cash outflows from operating activities to be affected by the timing of payments we make to registries and increases in personnel and other operating costs as we continue to grow our business and increase our international presence.
Net cash provided by operating activities increased $163.6 million from $559.8 million in 2018 to $723.4 million in 2019, primarily driven by our bookings growth as well as increased interest income.
Investing Activities
Our investing activities primarily consist of strategic acquisitions and purchases of property and equipment to support the overall growth of our business and our increased international presence. We expect our investing cash flows to be affected by the timing of payments we make for capital expenditures and the strategic acquisition or other growth opportunities we decide to pursue.
Net cash used in investing activities decreased $119.5 million from $254.8 million in 2018 to $135.3 million in 2019, primarily due to a $106.9 million decrease in business acquisitions.
Financing Activities
Our financing activities primarily consist of long-term debt borrowings, the repayment of principal on long-term debt, stock option exercises and share repurchases.
Net cash from financing activities decreased $503.9 million from $47.0 million provided in 2018 to $456.9 million used in 2019, primarily resulting from $458.6 million of share repurchases in 2019, a $44.4 million increase in acquisition contingent consideration payments and $13.2 million of financing-related costs paid in 2019.

                                                             | Year Ended December 31, |         |
------------------------------------------------------------ | ----------------------- | ------- | ---------
                                                             | 2019                    | 2018    | 2017
Net cash provided by operating activities                    | $723.4                  | $559.8  | $475.6
Net cash used in investing activities                        | (135.3)                 | (254.8) | (1,570.1)
Net cash provided by (used in) financing activities          | (456.9)                 | 47.0    | 1,107.5
Effect of exchange rate changes on cash and cash equivalents | (0.8)                   | (2.3)   | 3.6
Net increase in cash and cash equivalents                    | $130.4                  | $349.7  | $16.6


The following table provides a reconciliation from U.S. GAAP Net income to non-GAAP Adjusted net income (amounts in thousands):
(1) Fiscal years ending March 31, 2018 and 2017 adjusted due to the adoption of ASC 606.
(2) $0.9 million in costs incurred during fiscal year 2018 related to the relocation of the Company's tantalum powder facility equipment from Carson City, Nevada to its existing Matamoros, Mexico plant were reclassified from “Plant start-up costs” to “Restructuring charges” during fiscal year 2019.

                                                            |          | Fiscal Years Ended March 31, |
----------------------------------------------------------- | -------- | ---------------------------- | --------
                                                            | 2019     | 2018                         | 2017
Net income (GAAP) (1)                                       | $206,587 | $254,127                     | $47,157
Non-GAAP adjustments:                                       |          |                              |
Equity (income) loss from equity method investments         | 3,304    | (76,192)                     | (41,643)
Acquisition (gain) loss                                     | —        | (130,880)                    | —
Change in value of TOKIN options                            | —        | —                            | (10,700)
(Gain) loss on write down and disposal of long-lived assets | 1,660    | (992)                        | 10,671
Restructuring charges (2)                                   | 8,779    | 14,843                       | 5,404
R&D grant reimbursements and grant income                   | (4,559)  | —                            | —
ERP integration costs/IT transition costs                   | 8,813    | 80                           | 7,045
Stock-based compensation                                    | 12,866   | 7,657                        | 4,720
Legal expenses/fines related to antitrust class actions     | 11,896   | 16,636                       | 2,640
Net foreign exchange (gain) loss                            | (7,230)  | 13,145                       | (3,758)
TOKIN investment-related expenses                           | —        | —                            | 1,101
Plant start-up costs (2)                                    | (927)    | 929                          | 427
Amortization included in interest expense                   | 1,872    | 2,467                        | 761
Income tax effect of non-GAAP adjustments                   | (50,012) | (30)                         | (741)
Loss on early extinguishment of debt                        | 15,946   | 486                          | —
Adjusted net income (non-GAAP) (1)                          | $208,995 | $102,276                     | $23,084


Note 8 Property and Equipment, net
The following table details our property and equipment, net.
(1) Upon adoption of ASU 2016-02, $28.3 million of assets that were included in property and equipment, net as of December 31, 2018 are now included in other non-current assets on our Consolidated Balance Sheets as of December 31, 2019. These assets were related to capital leases, primarily for warehouse, office and small manufacturing facilities, IT equipment and automobiles, which are now ROU assets. Refer to Note 4, “Leases,” of the Notes to Consolidated Financial Statements for additional information on our ROU assets.

December 31,                              |           |
----------------------------------------- | --------- | ---------
(In millions)                             | 2019      | 2018(1)
Land and improvements                     | $ 50.7    | $ 41.2
Buildings                                 | 747.0     | 728.6
Machinery and equipment                   | 2,453.2   | 2,325.7
Other property and equipment              | 141.3     | 135.6
Construction-in-progress                  | 127.9     | 155.1
Property and equipment, gross             | 3,520.1   | 3,386.2
Accumulated depreciation and amortization | (2,378.2) | (2,350.0)
Property and equipment, net               | $ 1,141.9 | $ 1,036.2


Note A: Beginning from June 2015, the Company accounts for its investment in FARADAY as an associate given the fact that the Company obtained the ability to exercise significant influence over FARADAY through representation on its Board of Directors.
Note B: WINAICO SOLAR PROJEKT 1 GMBH and WINAICO IMMOBILIEN GMBH are joint ventures to the Company.
Note C: The Company follows international accounting practices in equity accounting for limited partnerships and uses the equity method to account for these investees.
The carrying amount of investments accounted for using the equity method for which there are published price quotations amounted to NT$1,733 million and NT$1,750 million, as of December 31, 2018 and 2019, respectively. The fair value of these investments were NT$1,621 million and NT$2,244 million, as of December 31, 2018 and 2019, respectively.

As of December 31,                          |                    |                                          |                    |
------------------------------------------- | ------------------ | ---------------------------------------- | ------------------ | ----------------------------------------
                                            | 2018               |                                          | 2019               |
Investee companies                          | Amount             | Percentage of ownership or voting rights | Amount             | Percentage of ownership or voting rights
                                            | NT$ (In Thousands) |                                          | NT$ (In Thousands) |
Listed companies                            |                    |                                          |                    |
CLIENTRON CORP.                             | $249,663           | 22.39                                    | $276,515           | 21.90
FARADAY TECHNOLOGY CORP. (FARADAY) (Note A) | 1,483,111          | 13.78                                    | 1,473,028          | 13.78
Unlisted companies                          |                    |                                          |                    |
MTIC HOLDINGS PTE. LTD.                     | 3,026              | 45.44                                    | 18,157             | 45.44
WINAICO IMMOBILIEN GMBH (Note B)            | —                  | 44.78                                    | —                  | 44.78
PURIUMFIL INC.                              | —                  | —                                        | 7,164              | 44.45
UNITECH CAPITAL INC.                        | 568,005            | 42.00                                    | 642,660            | 42.00
TRIKNIGHT CAPITAL CORPORATION               | 1,520,575          | 40.00                                    | 2,281,631          | 40.00
HSUN CHIEH INVESTMENT CO., LTD.             | 1,608,551          | 36.49                                    | 1,686,502          | 36.49
YANN YUAN INVESTMENT CO., LTD.              | 2,032,013          | 30.87                                    | 2,761,821          | 30.87
HSUN CHIEH CAPITAL CORP.                    | 161,319            | 30.00                                    | 122,060            | 30.00
VSENSE CO., LTD.                            | 31,544             | 26.89                                    | 592                | 25.90
UNITED LED CORPORATION HONG KONG LIMITED    | 167,953            | 25.14                                    | 121,973            | 25.14
TRANSLINK CAPITAL PARTNERS I, L.P. (Note C) | 120,440            | 10.38                                    | 172,414            | 10.38
WINAICO SOLAR PROJEKT 1 GMBH (Note B)       | —                  | 50.00                                    | —                  | —
YUNG LI INVESTMENTS, INC.                   | 2,213              | 45.16                                    | —                  | —
Total                                       | $7,948,413         |                                          | $9,564,517         |


Item 6. SELECTED FINANCIAL DATA
You should read the following selected consolidated financial data for the five-year period ended March 31, 2019 in conjunction with our consolidated financial statements and notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Items 7 and 8 of this Form 10-K. Our consolidated statements of income data for each of the years in the three-year period ended March 31, 2019, and the balance sheet data as of March 31, 2019 and 2018, are derived from our audited consolidated financial statements, included in Item 8 of this Form 10-K. The statement of income data for the years ended March 31, 2016 and 2015 and balance sheet data as of March 31, 2017, 2016 and 2015 have been derived from our audited consolidated financial statements not included herein (in the tables below all amounts are in millions, except per share data).
(1) Refer to Note 2 to our consolidated financial statements for an explanation of our material business combinations during fiscal 2019 and fiscal 2017.
(2) Refer to Note 4 to our consolidated financial statements for a discussion of the special charges and other, net.
(3) Refer to Note 12 Debt and Credit Facility for further discussion.

                                                                              |           |           | Year ended March 31, |           |
----------------------------------------------------------------------------- | --------- | --------- | -------------------- | --------- | ---------
                                                                              | 2019 (1)  | 2018      | 2017 (1)             | 2016      | 2015
Consolidated Statements of Income data:                                       |           |           |                      |           |
Net sales                                                                     | $5,349.5  | $3,980.8  | $3,407.8             | $2,173.3  | $2,147.0
Special charges and other, net (2)                                            | $33.7     | $17.5     | $98.6                | $4.0      | $2.8
Loss on settlement of debt (3)                                                | $(12.6)   | $(16.0)   | $(43.9)              | $—        | $(50.6)
Net income from continuing operations                                         | $355.9    | $255.4    | $170.6               | $323.9    | $365.3
Basic net income per common share from continuing operations                  | $1.51     | $1.10     | $0.79                | $1.59     | $1.84
Diluted net income per common share from continuing operations                | $1.42     | $1.03     | $0.73                | $1.49     | $1.65
Dividends declared per common share                                           | $1.457    | $1.449    | $1.441               | $1.433    | $1.425
Consolidated Balance Sheets data:                                             |           |           |                      |           |
Total assets                                                                  | $18,350.0 | $8,257.2  | $7,686.9             | $5,537.9  | $4,780.7
Net long-term debt and capital lease obligations, less current maturities (3) | $8,956.0  | $1,769.1  | $2,912.1             | $2,465.8  | $1,840.0
Microchip Technology stockholders' equity                                     | $ 5,287.5 | $ 3,279.8 | $3,270.7             | $ 2,150.9 | $ 2,044.7


Results of Continuing Operations
The following table sets forth certain operational data as a percentage of net sales for the fiscal years indicated:

                                           |        | Year Ended March 31, |
------------------------------------------ | ------ | -------------------- | ------
                                           | 2019   | 2018                 | 2017
Net sales                                  | 100.0% | 100.0%               | 100.0%
Cost of sales                              | 45.2   | 39.2                 | 48.4
Gross profit                               | 54.8   | 60.8                 | 51.6
Research and development                   | 15.4   | 13.3                 | 16.0
Selling, general and administrative        | 12.8   | 11.4                 | 14.7
Amortization of acquired intangible assets | 12.6   | 12.2                 | 9.9
Special charges and other, net             | 0.6    | 0.4                  | 2.9
Operating income                           | 13.4%  | 23.5%                | 8.1%


Net Sales
The following table presents our net sales and the percentage of total net sales by segment:

                         |          | Fiscal          |          |
------------------------ | -------- | --------------- | -------- | -----
                         | 2019     |                 | 2018     |
                         |          | ($ in millions) |          |
Transportation Solutions | $  7,821 | 58 %            | $ 8,290  | 59 %
Industrial Solutions     | 3,954    | 30              | 3,856    | 28
Communications Solutions | 1,673    | 12              | 1,842    | 13
Total                    | $ 13,448 | 100 %           | $ 13,988 | 100 %


AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
2018 Transactions
During the year ended December 31, 2019, the allocation of the final purchase price for the acquisition of Idea Cellular Infrastructure Services Limited was finalized with no material post-closing adjustments. During the year ended December 31, 2019, there were no material post-closing adjustments that impacted other 2018 acquisitions.
Pro Forma Consolidated Results (Unaudited)
The following table presents the unaudited pro forma financial results as if the 2019 acquisitions had occurred on January 1, 2018 and the 2018 acquisitions had occurred on January 1, 2017. The pro forma results do not include any anticipated cost synergies, costs or other integration impacts. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the transactions been completed on the dates indicated, nor are they indicative of the future operating results of the Company.

                                                                                | Year Ended December 31, |
----------------------------------------------------------------------------------- | ----------------------- | --------
                                                                                | 2019                    | 2018
Pro forma revenues                                                                  | $7,904.2                | $7,936.0
Pro forma net income attributable to American Tower Corporation common stockholders | $1,844.9                | $1,122.6
Pro forma net income per common share amounts:                                      |                         |
Basic net income attributable to American Tower Corporation common stockholders     | $4.17                   | $2.55
Diluted net income attributable to American Tower Corporation common stockholders   | $4.14                   | $2.53


GreenSky, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (United States Dollars in thousands, except per share data, unless otherwise stated)
The following table reflects the impact of consolidation of GS Holdings into the Consolidated Statements of Operations for the years indicated.

                                  | Year Ended December 31, |
--------------------------------- | ----------------------- | --------
                                  | 2019                    | 2018
Total revenue                     | $529,646                | $414,673
Total costs and expenses          | 408,693                 | 261,883
Operating profit                  | 120,953                 | 152,790
Total other income (expense), net | (22,297)                | (19,276)
Net income                        | $98,656                 | $133,514


ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
The following table summarizes the estimated preliminary fair values of the assets acquired and liabilities assumed from the acquisition in 2019:

                                        | Preliminary: September 10, 2019 | Measurement Period Adjustments | Preliminary: December 31, 2019
--------------------------------------- | ------------------------------- | ------------------------------ | ------------------------------
Accounts and other receivable, net      | $  128,221                      | $  -                           | $  128,221
Inventories                             | 140,678                         | (900)                          | 139,778
Property and equipment                  | 65,016                          | (1,984)                        | 63,032
Operating lease right-of-use assets     | 60,217                          | (144)                          | 60,073
Goodwill                                | 143,262                         | (30,222)                       | 113,040
Intangible assets                       | 125,000                         | (1,000)                        | 124,000
Deferred income tax assets              | 14,767                          | (14,767)                       | —
Other assets                            | 61,511                          | 2,507                          | 64,018
Total assets acquired                   | 738,672                         | (46,510)                       | 692,162
Accounts payable                        | 144,652                         | 50                             | 144,702
Operating lease liability               | 59,634                          | 477                            | 60,111
Pension liability                       | 48,494                          | 192                            | 48,686
Deferred income tax liabilities         | 37,218                          | (31,372)                       | 5,846
Other liabilities                       | 80,876                          | (9,312)                        | 71,564
Total liabilities assumed               | 370,874                         | (39,965)                       | 330,909
Total fair value of net assets acquired | $367,798                        | $  (6,545)                     | $361,253


Non-Operating Income, net: Non-operating income, net consists primarily of interest income, net foreign currency exchange losses, the noncontrolling interests in the net profits of our majority-owned subsidiaries (primarily Oracle Financial Services Software Limited and Oracle Corporation Japan) and net other income, including net recognized gains and losses related to all of our investments, net unrealized gains and losses related to the small portion of our investment portfolio related to our deferred compensation plan, net unrealized gains and losses related to certain equity securities and non-service net periodic pension income (losses).
On a constant currency basis, our non-operating income, net decreased in fiscal 2019 compared to fiscal 2018 primarily due to decreases in other income, net in fiscal 2019 , which was primarily attributable to realized gains on the sale of certa in marketable securities during fiscal 2018 , and lower interest income in fiscal 2019 primarily due to lower average cash, cash equivalent and marketable securities balances during fiscal 2019 .

                                   |        |        | Year Ended May 31, |
---------------------------------- | ------ | ------ | ------------------ | ------
                                   |        |        | Percent Change     |
(Dollars in millions)              | 2019   | Actual | Constant           | 2018
Interest income                    | $1,092 | -9%    | -9%                | $1,203
Foreign currency losses, net       | (111)  | 50%    | 62%                | (74)
Noncontrolling interests in income | (152)  | 12%    | 12%                | (135)
Other income, net                  | (14)   | -107%  | -42%               | 191
Total non-operating income, net    | $815   | -31%   | -31%               | $1,185


Unrecognized Tax Benefits
Current accounting guidance contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits during fiscal 2019, 2018, and 2017 is as follows:
Included in the unrecognized tax benefits at fiscal 2019 and 2018 is $38.2 million and $36.7 million, respectively, that if recognized, would result in a reduction of our effective tax rate. The amounts differ from the long-term liability recorded of $20.1 million and $16.8 million as of fiscal 2019 and 2018, respectively, due to accrued interest and penalties, as well as unrecognized tax benefits of French and Italian entities that are recorded against deferred tax asset balances without valuation allowance.
We believe that events that could occur in the next 12 months and cause a change in unrecognized tax benefits include, but are not limited to, the following: • commencement, continuation or completion of examinations of our tax returns by the U.S. or foreign taxing authorities; and • expiration of statutes of limitation on our tax returns.
The calculation of unrecognized tax benefits involves dealing with uncertainties in the application of complex global tax regulations. Uncertainties include, but are not limited to, the impact of legislative, regulatory and judicial developments, transfer pricing and the application of withholding taxes. We regularly assess our tax positions in light of legislative, bilateral tax treaty, regulatory and judicial developments in the countries in which we do business. We determined that an estimate of the range of reasonably possible change in the amounts of unrecognized tax benefits within the next 12 months cannot be made.

                                                                                |                   | Fiscal Year       |
-------------------------------------------------------------------------------- | ----------------- | ----------------- | -----------------
(In thousands)                                                                   | December 29, 2019 | December 30, 2018 | December 31, 2017
Balance, beginning of year                                                       | $103,884          | $105,959          | $82,253
Additions for tax positions related to the current year                          | 2,517             | 2,404             | 2,478
Additions for tax positions from prior years                                     | 1,624             | 451               | 22,151
Reductions for tax positions from prior years/statute of limitations expirations | (416)             | (2,468)           | (1,460)
Foreign exchange (gain) loss                                                     | (668)             | (2,462)           | 537
Balance at the end of the period                                                 | $106,941          | $103,884          | $105,959


Comparison of 2019 and 2018
Revenue
We generate substantially all of our revenue from sales of subscriptions, including domain registrations and renewals, hosting and presence products and business applications. Our subscription terms average one year, but can range from monthly terms to multi-annual terms of up to ten years depending on the product. We generally collect the full amount of subscription fees at the time of sale, while revenue is recognized over the period in which the performance obligations are satisfied, which is generally over the contract term. Revenue is presented net of refunds, and we maintain a reserve to provide for refunds granted to customers
Domains revenue primarily consists of revenue from the sale of domain registration subscriptions, domain add-ons and aftermarket domain sales. Domain registrations provide a customer with the exclusive use of a domain during the applicable contract term. After the contract term expires, unless renewed, the customer can no longer access the domain.
Hosting and presence revenue primarily consists of revenue from the sale of subscriptions for our website hosting products, website building products, website security products and online visibility products.
Business applications revenue primarily consists of revenue from the sale of subscriptions for third-party productivity applications, email accounts, email marketing tools and telephony solutions.
The following table presents our revenue for the periods indicated:
The 12.3% increase in total revenue was driven by growth in total customers and ARPU as well as having a full year of revenue from MSH in 2019, partially offset by the impact of movements in foreign currency exchange rates. The increase in customers impacted each of our revenue lines, as the additional customers purchased subscriptions across our product portfolio.
Domains. The 10.8% increase in domains revenue was primarily driven by the increase in domains under management from 77.6 million as of December 31, 2018 to 79.6 million as of December 31, 2019, increased aftermarket domain sales and international growth
Hosting and presence. The 10.7% increase in hosting and presence revenue was primarily driven by increased revenue from our website building and website security products as well as our acquisition of MSH.
Business applications. The 20.8% increase in business applications was primarily driven by increased customer adoption of our email, productivity and telephony solutions.

                      | Year Ended December 31, |           |           | 2019 to 2018 |          | 2018 to 2017 |
--------------------- | ----------------------- | --------- | --------- | ------------ | -------- | ------------ | --------
                      | 2019                    | 2018      | 2017      | $ change     | % change | $ change     | % change
Domains               | $ 1,351.6               | $ 1,220.3 | $ 1,057.2 | $ 131.3      | 11 %     | $ 163.1      | 15 %
Hosting and presence  | 1,126.5                 | 1,017.6   | 847.9     | 108.9        | 11 %     | 169.7        | 20 %
Business applications | 510.0                   | 422.2     | 326.8     | 87.8         | 21 %     | 95.4         | 29 %
Total revenue         | $ 2,988.1               | $ 2,660.1 | $ 2,231.9 | $ 328.0      | 12 %     | $ 428.2      | 19 %


GreenSky, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (United States Dollars in thousands, except per share data, unless otherwise stated)
Details of the Company’s deferred tax assets and liabilities are as follows:
As of December 31, 2019, the Company had net operating loss carryforwards (“NOLs”) of $4.7 million, of which approximately $3.9 million have an indefinite life. NOLs of $0.8 million will begin to expire in 2030. As of December 31, 2019, the Company had federal and state tax credit carryforwards of $0.2 million and $0.5 million, respectively, which will begin to expire in 2028 and 2038. The Company believes as of December 31, 2019, it is more likely than not that the results of future operations will generate sufficient taxable income to realize the NOLs and tax credits and, as such, no valuation allowance was recorded.

                                                 | Year Ended December 31, |
------------------------------------------------ | ----------------------- | --------
                                                 | 2019                    | 2018
Deferred tax assets:                             |                         |
Investment in partnership                        | $358,024                | $299,466
Net operating loss carryforwards and tax credits | 5,160                   | 5,634
Other                                            | 1,657                   | 1,879
Total                                            | 364,841                 | 306,979
Valuation allowance                              | —                       | —
Total deferred tax assets                        | 364,841                 | 306,979
Total deferred tax liabilities                   | —                       | —
Deferred tax assets, net                         | $364,841                | $306,979


Contractual Obligations
The following table summarizes, as of December 31, 2019, our contractual obligations over the next five years for the property lease entered into during the year ended 2018, the VPN arrangement with Avira and the asset purchase from IBM:

                                |                  | Payments due by Period (In thousands) |
------------------------------- | ---------------- | ------------------------------------- | ------
Contractual Obligations         | Less Than 1 Year | 2-5 Years                             | Total
Operating Lease Obligations:    | $773             | $2,055                                | $2,828
Other Long-Term Liabilities:    |                  |                                       |
Finjan Mobile future commitment | 650              | —                                     | 650
Finjan Blue future commitment   | 2,000            | 2,000                                 | 4,000
Total                           | $3,423           | $4,055                                | $7,478


Employee Share Ownership Plan
UK employees are eligible to participate in the Employee Share Ownership Plan (ESOP). The aim of the ESOP is to encourage increased shareholding in the Company by all UK employees and so there are no performance conditions. Employees are invited to join the ESOP when an offer is made each year. Individuals save for 12 months during the accumulation period and subscribe for shares at the lower of the price at the beginning and the end of the accumulation period under HMRC rules. The Company provides a matching share for each share purchased by the individual.
Shares issued under the ESOP have been measured using the Present Economic Value (PEV) valuation methodology. The relevant disclosures in respect of the Employee Share Ownership Plans are set out below.
The accumulation period for the 2019 ESOP ends in September 2020, therefore some figures are projections.

                        | 2015 Grant  | 2016 Grant  | 2017 Grant  | 2018 Grant  | 2019 Grant
----------------------- | ----------- | ----------- | ----------- | ----------- | -----------
Grant date              | 1st October | 1st October | 1st October | 1st October | 1st October
Exercise price          | 2,797.0p    | 4,477.3p    | 5,496.7p    | 7,240.0p    | 7,835.0p
Number of employees     | 1,038       | 1,040       | 1,229       | 1,294       | 1,318
Shares under scheme     | 34,449      | 22,173      | 22,411      | 16,687      | 16,820
Vesting period          | 3 years     | 3 years     | 3 years     | 3 years     | 3 years
Expected volatility     | 21%         | 21%         | 21%         | 19%         | 21%
Risk free interest rate | 0.4%        | 0.1%        | 0.4%        | 0.8%        | 0.5%
Expected dividend yield | 2.5%        | 2.5%        | 2.3%        | 2.0%        | 1.8%
Fair value              | 2,931.3p    | 4,696.7p    | 5,799.0p    | 7,623.7p    | 8,305.1p


NOTE 3 - SHORT TERM INVESTMENTS
The Company's short term investments are classified as below with maturities of twelve months or less, unrealized gains and losses were immaterial for the periods presented:

             | December 31    |
------------ | -------------- | -------
             | 2019           | 2018
             | (in thousands) |
Government   | $1,012         | $—
Asset Backed | 4,854          | 1,786
Industrial   | 5,034          | 2,381
Financial    | 6,879          | 7,136
             | $17,779        | $11,303


Selling, General and Administrative Expense
NM—Not meaningful
Total selling, general and administrative (SG&A) expense increased 6.4 percent in 2019 versus 2018, driven primarily by the following factors: • Higher spending (5 points) driven by Red Hat spending (5 points); and • Higher acquisition-related charges and amortization of acquired intangible assets associated with the Red Hat acquisition (3 points); partially offset by • The effects of currency (2 points).
Operating (non-GAAP) expense increased 3.4 percent year to year primarily driven by the same factors excluding the acquisition-related charges and amortization of acquired intangible assets associated with the Red Hat transaction.

($ in millions)                                                  |         |         |
---------------------------------------------------------------- | ------- | ------- | -------------------------
For the year ended December 31:                                  | 2019    | 2018    | Yr.-to-Yr. Percent Change
Selling, general and administrative expense                      |         |         |
Selling, general and administrative—other                        | $17,099 | $16,438 | 4.0%
Advertising and promotional expense                              | 1,647   | 1,466   | 12.3
Workforce rebalancing charges                                    | 555     | 598     | (7.2)
Amortization of acquired intangible assets                       | 762     | 435     | 74.9
Stock-based compensation                                         | 453     | 361     | 25.2
Bad debt expense                                                 | 89      | 67      | 32.5
Total consolidated selling, general and administrative expense   | $20,604 | $19,366 | 6.4%
Non-operating adjustments                                        |         |         |
Amortization of acquired intangible assets                       | (762)   | (435)   | 74.9
Acquisition-related charges                                      | (282)   | (15)    | NM
Operating (non-GAAP) selling, general and administrative expense | $19,560 | $18,915 | 3.4%


Foreign Sales
Revenues in each of the Company’s segments include sales to foreign governments or to companies located in foreign countries. For the years ended April 30, 2019 and 2018, revenues, based on the location of the procurement entity and excluding intersegment sales, were derived from the following countries (in thousands):

            | 2019   | 2018
----------- | ------ | -------
Belgium     | $49    | $64
France      | 40     | 154
China       | 359    | 512
Russia      | 2      | 302
Germany     | 36     | 143
Italy       | 159    | 110
South Korea | -      | 314
Singapore   | 215    | 376
Other       | 525    | 469
            | $1,361 | $ 2,444


Results of Operations
The following table sets forth, as a percentage of total revenues, the results from our operations for the periods indicated.

                           | 2019   | 2018
-------------------------- | ------ | ------
Revenues                   | 100.0% | 100.0%
Cost of revenues           | 10.6   | 11.0
Gross profit               | 89.4   | 89.0
Operating expenses:        |        |
Sales and marketing        | 54.2   | 52.6
Product development        | 6.2    | 8.1
General and administrative | 20.5   | 20.9
Total operating expenses   | 80.9   | 81.6
Income from operations     | 8.5    | 7.4
Other income (loss), net   | (0.5)  | —
Income before income taxes | 8.0    | 7.4
Income tax expense         | 4.3    | 3.2
Net income                 | 3.7%   | 4.2%


Cost of Revenue, Gross Profit and Gross Margin
Cost of revenue
Cost of products revenue is primarily comprised of cost of third-party manufacturing services and cost of inventory for the hardware component of our products. Cost of products revenue also includes warehouse personnel costs, shipping costs, inventory write-downs, certain allocated facilities and information technology infrastructure costs, and expenses associated with logistics and quality control.
Cost of services revenue is primarily comprised of personnel costs for our technical support, training and professional service teams. Cost of services revenue also includes the costs of inventory used to provide hardware replacements to end- customers under PCS contracts and certain allocated facilities and information technology infrastructure costs.
A summary of our cost of revenue is as follows (dollars in thousands):

                      | Years Ended December 31, |         | Increase (Decrease) |
--------------------- | ------------------------ | ------- | ------------------- | -------
                      | 2019                     | 2018    | Amount              | Percent
Cost of revenue:      |                          |         |                     |
Products              | $29,816                  | $34,066 | $(4,250)            | (12)%
Services              | 19,065                   | 17,830  | 1,235               | 7%
Total cost of revenue | $48,881                  | $51,896 | $(3,015)            | (6)%


The number of options outstanding and exercisable as at 31 March was as follows:
The weighted average market value per ordinary share for PSP options exercised in 2019 was 445.0p (2018: n/a). The PSP awards outstanding at 31 March 2019 have a weighted average remaining vesting period of 0.8 years (2018: 1.2 years) and a weighted average contractual life of 7.6 years (2018: 8.2 years).

                              | 2019      | 2018
----------------------------- | --------- | ---------
                              | Number    | Number
Outstanding at 1 April        | 3,104,563 | 2,682,738
Options granted in the year   | 452,695   | 1,188,149
Dividend shares awarded       | 9,749     | –
Options forfeited in the year | (105,213) | (766,324)
Options exercised in the year | (483,316) | –
Outstanding at 31 March       | 2.978,478 | 3,104,563
Exercisable at 31 March       | 721,269   | –