Datasets:

zxying

/

findsum-5k

like 0

a second phase 1 clinical trial evaluating jzp-386 was initiated in the first quarter of 2015 with data expected in the second quarter of 2015 which will inform the next steps in the development of the program . 73 deuterated ivacaftor is a potential treatment for cystic fibrosis . cystic fibrosis is a life-threatening , hereditary genetic disease that primarily affects the lungs and digestive system . the cause is a defect in the gene that encodes for cystic fibrosis transmembrane conductance regulator , a protein which regulates components of sweat , mucus and digestion . according to the cystic fibrosis foundation , an estimated 70,000 people worldwide have cystic fibrosis . many people with the disease can now live into their 30s and beyond . we intend to advance the program into clinical evaluation in 2015. we plan to continue to seek to identify compounds that can be improved through selective deuterium substitution and believe we are capable of identifying one to two novel deuterated compounds per year that we can advance into preclinical development while concurrently progressing our existing pipeline . since our inception in 2006 , we have devoted substantially all of our resources to our research and development efforts , including activities to develop our dce platform , or deuterated chemical entity platform , and our core capabilities in deuterium chemistry , identify potential product candidates , undertake non-clinical studies and clinical trials , manufacture product in compliance with current good manufacturing practices , provide general and administrative support for these operations and establish our intellectual property . we have generated an accumulated deficit of $ 145.3 million since inception through december 31 , 2014 and will require substantial additional capital to fund our research and development . we do not have any products approved for sale and have not generated any revenue from product sales . we have funded our operations primarily through the public offering and private placement of our equity , debt financing and funding from collaborations . in the first quarter of 2014 , we completed the sale of 6,649,690 shares of common stock in our initial public offering , or ipo , at a price to the public of $ 14.00 per share , resulting in net proceeds to us of $ 83.1 million after deducting underwriting discounts and commissions of $ 6.5 million and offering costs of $ 3.5 million . we have incurred net losses in each year from our inception in 2006 through 2014. our net losses were $ 31.7 million , $ 6.1 million and $ 20.4 million for the years ended december 31 , 2014 , 2013 and 2012 , respectively . we do not expect to be profitable for the year ending december 31 , 2015. substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations . we expect to continue to incur significant expenses and increasing operating losses for at least the next several years . we expect our expenses will increase substantially in connection with our ongoing activities as we : continue to develop and conduct additional non-clinical studies and clinical trials with respect to ctp-354 ; initiate and continue research , non-clinical and clinical development efforts for our other product candidates and potential product candidates ; seek to identify additional product candidates ; seek marketing approvals for our product candidates that successfully complete clinical trials ; establish sales , marketing , distribution and other commercial infrastructure in the future to commercialize various products for which we may obtain marketing approval ; require the manufacture of larger quantities of product candidates for clinical development and potentially commercialization ; maintain , expand and protect our intellectual property portfolio ; hire additional personnel ; add equipment and physical infrastructure to support our research and development ; and continue to implement the infrastructure necessary to support our product development and help us comply with our obligations as a public company . 74 we do not expect to generate revenue from product sales unless and until we , or our collaborators , successfully complete development and obtain marketing approval for one or more of our product candidates , which we expect will take a number of years and is subject to significant uncertainty . we have developed the internal capability to manufacture up to low kilogram quantities of deuterated active pharmaceutical ingredients for use in phase 1 clinical trials . however , to date , almost all of our manufacturing activities have been performed by third parties . additionally , we currently utilize third-party contract research organizations to carry out our clinical development activities and we do not yet have a sales organization . if we obtain , or believe that we are likely to obtain , marketing approval for any of our product candidates for which we retain commercialization rights , we expect to incur significant commercialization expenses related to product sales , marketing , manufacturing and distribution . we expect to seek to fund our operations through a combination of equity offerings , debt financings and additional collaborations and licensing arrangements for at least the next several years . however , we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all . our failure to raise capital or enter into such other arrangements as and when needed would force us to delay , limit , reduce or terminate our research and development programs and could have a material adverse effect on our financial condition and our ability to develop our products . we will need to generate significant revenues to achieve sustained profitability and we may never do so . collaborations we have entered into a number of collaborations for the research , development and commercialization of deuterated compounds . story_separator_special_tag the duration , costs , and timing of clinical trials and development of our product candidates will depend on a variety of factors , including : the scope and rate of progress of our ongoing as well as any additional clinical trials and other research and development activities ; results from ongoing as well as any additional clinical trials and research and development activities ; significant and changing government regulation ; the terms and timing and receipt of any regulatory approvals ; the performance of our collaborators ; our ability to manufacture , market , commercialize and achieve market acceptance for any of our product candidates that we are developing or may develop in the future ; and the expense and success of filing , prosecuting , defending and enforcing any patent claims and other intellectual property rights . a change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate . for example , if the fda or another regulatory authority were to require us to conduct clinical trials or other research and development activities beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate , or if we experience significant delays in enrollment in any of our clinical trials , we could be required to expend significant additional financial resources and time on the completion of clinical development . research and development activities are central to our business model . product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development , primarily due to the increased size and duration of later-stage clinical trials . we expect research and development costs to increase significantly for the foreseeable future as our product candidate development programs progress but we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization . there are numerous factors associated with the successful commercialization of any of our product candidates , including future trial design and various regulatory requirements , many of which can not be determined with accuracy at this time based on our stage of development . additionally , future commercial and regulatory factors beyond our control will impact our clinical development programs and plans . general and administrative expenses general and administrative expenses consist primarily of salaries and related costs for personnel , including stock-based compensation and travel expenses for our employees in executive , operational , finance , legal , business development and human resource functions . other general and administrative expenses include facility-related costs , depreciation and other expenses not allocated to research and development expense and professional fees for directors , accounting and legal services and expenses associated with obtaining and maintaining patents . 79 we anticipate that our general and administrative expenses will increase in the future as our pipeline grows and matures . additionally , if and when we believe a regulatory approval of the first product candidate that we intend to commercialize on our own appears likely , we anticipate an increase in payroll and related expenses as a result of our preparation for commercial operations , especially as it relates to the sales , marketing and distribution of our product candidates . investment income investment income consists of interest income earned on cash equivalents and investments . interest and other expense interest and other expense consists primarily of interest expense on amounts outstanding under our debt facility with hercules , amortization of debt discount and the re-measurement gain or loss associated with the change in the fair value of the preferred stock warrant liability . critical accounting policies and significant judgments and estimates our management 's discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements , which have been prepared in accordance with u.s. generally accepted accounting principles . the preparation of these financial statements requires us to make judgments and estimates that affect the reported amounts of assets , liabilities , revenues , and expenses and the disclosure of contingent assets and liabilities in our financial statements . we base our estimates on historical experience , known trends and events , and various other factors that are believed to be reasonable under the circumstances . actual results may differ from these estimates under different assumptions or conditions . on an ongoing basis , we evaluate our judgments and estimates in light of changes in circumstances , facts and experience . the effects of material revisions in estimates , if any , will be reflected in the consolidated financial statements prospectively from the date of change in estimates . while our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this annual report on form 10-k , we believe the following accounting policies used in the preparation of our financial statements require the most significant judgments and estimates : revenue recognition ; accrued research and development expense ; and stock-based compensation . revenue recognition we have primarily generated revenue through arrangements with collaborators for the development and commercialization of product candidates . collaboration revenue the terms of our collaboration and license agreements have typically contained multiple elements , or deliverables , which have included licenses , or options to obtain licenses , to product candidates , referred to as exclusive licenses , as well as research and development activities to be performed by us on behalf of the collaborator related to the licensed product candidates . payments that we may receive under these agreements include non-refundable upfront license fees , payment for research and development activities , payments based upon achievement of specified milestones , payment upon exercise of license rights or options to license product candidates and royalties on any resulting product sales

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources we have incurred cumulative losses and negative cash flows from operations since our inception in april 2006 , and as of december 31 , 2014 , we had an accumulated deficit of $ 145.3 million . we anticipate that we will continue to incur losses for at least the next several years . we expect that our research and development and general and administrative expenses will continue to increase and , as a result , we will need additional capital to fund our operations , which we may raise through a combination of equity offerings , debt financings and additional collaborations and licensing arrangements . we have financed our operations to date primarily through the public offering and private placement of our equity , debt financing and funding from collaborations . as of december 31 , 2014 we had cash and cash equivalents and investments of $ 79.2 million . cash in excess of immediate requirements is invested in accordance with our investment policy , primarily with a view to liquidity and capital preservation . currently , our funds are held in u.s. government-backed securities and money market mutual funds consisting of u.s. government-backed securities . cash flows the following table sets forth the primary sources and uses of cash for each of the periods set forth below : replace_table_token_10_th comparison of the years ended december 31 , 2014 , 2013 and 2012 operating activities . during the years ended december 31 , 2014 , 2013 and 2012 , our operating activities used cash of $ 29.8 million , provided cash of $ 13.0 million and used cash of $ 26.4 million , respectively . the cash provided by or used for operating activities generally approximates our net ( loss ) income adjusted for non-cash items and changes in operating assets and liabilities .

casino operators continue to try to broaden their appeal by focusing on investments in the addition of non-gaming amenities to their facilities , which could impact casino operator 's capital allocation . factors affecting comparability our consolidated financial statements included in this report that present our financial condition and results of operations reflect the following transactions and events : in december 2014 , we acquired all of the outstanding capital stock of multimedia games , a gaming manufacturer and supplier to the gaming industry . the results contributed by the multimedia games business from the date of consummation on december 19 , 2014 to december 31 , 2014 are reflected in our games segment and consolidated financial statements . we incurred significant acquisition-related expenses , which are reflected in operating expenses for the year ended december 31 , 2014. in addition , amortization expense increased due to the purchase price allocation , which included definite-lived intangible assets with relatively short amortization periods . in december 2014 , to effect the merger , we entered into the credit facilities and issued the notes and we used a portion of these proceeds to repay the outstanding amounts owed under prior credit facilities of $ 210.0 million and $ 35.0 million for gca and multimedia games , respectively ( the `` prior credit facilities `` ) . as a result , we expensed $ 2.7 million of related debt issuance costs and fees to `` loss on extinguishment of debt `` associated with the prior credit facilities of gca and multimedia games that were in effect prior to the consummation of the merger ( the `` prior credit facilities `` ) . we recorded an asset impairment charge of approximately $ 3.1 million in the fourth quarter of 2014 related to certain definite-lived intangible assets . in april 2014 , we acquired all of the outstanding capital stock of newave , a supplier of compliance , audit and data efficiency software to the gaming industry . we believe this acquisition complements our integrated solutions . the newave acquisition did not have a material impact on our results of operations and financial condition . in march 2014 , our contract with caesars entertainment expired and was not renewed . as such , our cash advance and atm revenues and cost of revenues were impacted for the remainder of the year . as a result of the above transactions and events , the results of operations and earnings per share in the periods covered by the consolidated financial statements may not be directly comparable . principal sources of revenues and expenses our principal sources of revenues include : cash advance revenues include amounts comprised of transaction fees assessed to gaming patrons in connection with credit card cash access and pos debit card transactions and are recognized at the time 46 the transactions are authorized . such fees are based on a combination of a fixed amount plus a percentage of the face amount of the credit card cash access or pos debit card transaction amount . atm revenues include amounts comprised of transaction fees in the form of cardholder surcharges assessed to gaming patrons in connection with atm cash withdrawals at the time the transactions are authorized and reverse interchange fees paid to us by the patrons ' issuing banks . cardholder surcharges are recognized as revenue when a transaction is initiated and reverse interchange fees are recognized as revenue on a monthly basis based on the total transactions occurring during the month . the cardholder surcharges assessed to gaming patrons in connection with atm cash withdrawals are currently a fixed dollar amount and not a percentage of the transaction amount . check services revenues include amounts principally comprised of check warranty revenues and are generally based upon a percentage of the face amount of checks warranted and are recognized when the warranty services are invoked and performed . these fees are paid to us by gaming establishments which may , in turn , pass the fees onto their patrons . games revenues include amounts comprised of gaming operations , equipment sales , central determinant system operations and maintenance and service arrangements from the acquired multimedia games business . we recognize revenue when evidence of an arrangement exists , services have been rendered or products are delivered , the price is fixed or determinable and collectability is reasonably assured . other revenues include amounts derived from the sale of cash access devices , such as fully integrated kiosks and jackpot kiosks and the provision of certain professional services , software licensing , and certain other ancillary fees associated with the sale , installation and maintenance of those devices ; central credit revenues that are based upon either a flat monthly unlimited usage fee or a variable fee structure driven by the volume of patron credit histories generated ; and ancillary marketing , database and internet gaming activities . our principal costs and expenses include : cost of revenues ( exclusive of depreciation and amortization ) include amounts directly related to the generation of revenue and comprise : commissions paid to gaming establishments in connection with credit card cash access , pos debit card and atm transactions ( which are expected to increase as a percentage of revenue as new contracts are signed or existing contracts are renewed ) , and interchange fees paid to credit card associations and payment networks for services they provide in routing transactions through their networks as well as fees paid to participate in various payment networks to support our atm services . these interchange fees are determined by the card associations and payment networks at their sole discretion , and are subject to increase at their discretion from time to time . many of our cash access contracts enable us to pass through the amount of any increase in interchange or processing fees to our gaming establishment customers , who may in turn pass through these increases to patrons . story_separator_special_tag our games related inventory primarily consists of component parts , completed player terminals and back-office computer equipment and is stated at fair value as a result of the merger . however , our games segment historically 52 accounted for inventory at lower of cost ( first in , first out ) or market . the cost of inventory includes cost of materials , labor , overhead and freight . goodwill . we had approximately $ 857.9 million of goodwill on our consolidated balance sheet at december 31 , 2014 resulting from acquisitions of other businesses . of this amount , $ 669.5 million resulted from the merger and the remaining $ 188.4 million was subject to our annual goodwill impairment testing . we test for impairment annually on a reporting unit basis , as of october 1 , or more often under certain circumstances . the annual impairment test is completed using either : a qualitative step 0 assessment based on reviewing relevant events and circumstances ; or a quantitative step 1 assessment using an income approach that discounts future cash flows based on the estimated future results of the reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists . if the fair value of a reporting unit is less than its carrying amount , we use the step 2 assessment to determine the impairment . our most recent annual assessment was performed as of october 1 , 2014 , following which it was determined that no impairment adjustment was necessary . the annual evaluation of goodwill and other non-amortizing intangible assets requires the use of estimates about future operating results of each reporting unit to determine their estimated fair value . changes in forecasted operations can materially affect these estimates , which could materially affect our results of operations . our reporting units are identified as operating segments or one level below an operating segment . reporting units must : ( a ) engage in business activities from which they earn revenues and incur expenses ; ( b ) have operating results that are regularly reviewed by our chief operating decision maker to ascertain the resources to be allocated to the segment and assess its performance ; and ( c ) have discrete financial information available . as of december 31 , 2014 , our reporting units included : cash advance , atm , check services , games , fully integrated kiosk sales and services , central credit , and anti-money laundering and tax compliance software . the use of different assumptions , estimates or judgments in either step of the goodwill impairment testing process , such as the estimated future cash flows of our reporting units , the discount rate used to discount such cash flows , or the estimated fair value of the reporting units ' tangible and intangible assets and liabilities , could significantly increase or decrease the estimated fair value of a reporting unit or its net assets , and therefore , impact the related impairment charge , if any . at the annual impairment test date , the above-noted conclusion that no indication of goodwill impairment existed at the test date would not have changed had the test been conducted assuming : 1 ) a 100 basis point increase in the discount rate used to discount the aggregate estimated cash flows of our reporting units to their net present value in determining their estimated fair values ( without any change in the aggregate estimated cash flows of our reporting units ) , or 2 ) a 100 basis point decrease in the estimated sales growth rate or terminal period growth rate without a change in the discount rate of each reporting unit . other intangible assets . we have approximately $ 436.8 million in net unamortized other intangible assets on our consolidated balance sheet at december 31 , 2014. of this amount , $ 401.7 million resulted from the merger , which consists of customer relationships , developed technology , contract rights , trade names and trademarks . our other intangible assets consist primarily of customer contracts ( rights to provide payments and games services to gaming establishment customers ) acquired through business combinations , capitalized software development costs and the acquisition cost of our patent related to the 3-in-1 rollover technology acquired in 2005 , which expires in 2018. customer contracts require us to make renewal assumptions , which impact the estimated useful lives of such assets . capitalized software development costs require us to make certain judgments as to the stages of development and costs eligible for capitalization . capitalized software costs placed in service are amortized over their useful lives , generally not to exceed five years . we review intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . such events or circumstances include , but are not limited to , a significant decrease in the fair value of the underlying business or market price of the asset , a significant adverse change in legal factors or business climate that could affect the value of an asset , or a current period operating or cash flow loss combined with a history of operating or cash flow losses . we group intangible assets for impairment analysis at the lowest level for which identifiable cash flows are 53 largely independent of the cash flows of other assets and liabilities . recoverability of intangible assets is measured by a comparison of the carrying amount of the asset to future , net cash flows expected to be generated by the asset , undiscounted and without interest . if such assets are considered to be impaired , the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets . income taxes . we are subject to income taxes

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash resources our cash balance , cash flows and credit facilities are expected to be sufficient to meet our recurring operating commitments and to fund our planned capital expenditures for the foreseeable future . cash and cash equivalents at december 31 , 2014 included cash in non-u.s. jurisdictions of approximately $ 14.8 million . generally , these funds are available for operating and investment purposes within the jurisdiction in which they reside , but are subject to taxation in the u.s. upon repatriation . we provide cash settlement services to our customers . these services involve the movement of funds between the various parties associated with cash access transactions . these activities result in a balance due to us at the end of each business day that we recoup over the next few business days and classify as settlement receivables . these activities also result in a balance due to our customers at the end of each business day that we remit over the next few business days and classify as settlement liabilities . as of december 31 , 2014 , we had $ 43.3 million in settlement receivables for which we received payment in january 2015. as of december 31 , 2014 , we had $ 119.2 million in settlement liabilities due to our customers for these settlement services that were paid in january 2015. as the timing of cash received from settlement receivables and payment of settlement liabilities may differ , the total amount of cash held by us will fluctuate throughout the year . as of december 31 , 2014 and 2013 , the net cash available after considering settlement amounts was $ 13.2 million and $ 7.5 million , respectively . 57 cash flows the following table summarizes our cash flows for the years ended december 31 , 2014 , 2013 and 2012 ( in thousands ) : replace_table_token_8_th cash flows provided by operating activities were $ 24.5 million , $ 4.3 million and $ 157.5 million , for the years ended december 31 , 2014 , 2013 and 2012 , respectively .

the decrease is primarily attributed to a decrease in revenue from product sales of $ 631,853 , or 56 % , to $ 495,086 for the year ended december 31 , 2017 from $ 1,126,939 for the year ended december 31 , 2016. the decrease is due to a lower volume of residential and commercial units sold in 2017. additionally , the decline is attributable to a $ 211,767 decline in grants and rebates revenue that decreased to $ 120,905 , or 64 % for the year ended december 31 , 2017 compared to $ 332,672 for the year ended december 31 , 2016. grants and rebates relating to equipment and the related installation are deferred and amortized in a manner consistent with the depreciation expense of the related assets over their useful lives . the ability to secure grant revenues is typically unpredictable and , therefore , uncertain . we have not recently received any new grants and , as a result , the 2017 revenue is related to the amortization of previous grants . 24 charging service revenue company-owned charging stations was $ 1,186,710 for the year ended december 31 , 2017 compared to $ 1,144,016 for the year ended december 31 , 2016 , a slight increase of $ 42,694 , or 4 % . total revenue from warranty revenue and network fees was $ 359,216 for the year ended december 31 , 2017 , compared to $ 380,884 the year ended december 31 , 2016 a decrease of $ 21,668 , or 6 % . the decrease is primarily attributable to a lower volume of residential and commercial units sold in 2017. other revenue decreased by $ 3,070 to $ 338,440 for the year ended december 31 , 2017 as compared to $ 341,510 for the year ended december 31 , 2016. the decrease was primarily attributable to a decrease of $ 175,978 in charging revenue from host-owned stations as a result of property owners converting their charging stations from host-owned to company-owned . this decrease was almost fully offset by the sale of low carbon fuel standard credits that amounted to $ 172,908 during the year ended december 31 , 2017. cost of revenues cost of revenues primarily consists of depreciation of installed charging stations , amortization of the blink network infrastructure , the cost of charging station goods and related services sold , repairs and maintenance , electricity reimbursements and revenue share payments to hosts when we are the primary obligor in the revenue share arrangement . cost of revenues for the year ended december 31 , 2017 were $ 1,454,686 as compared to $ 2,813,680 for the year ended december 31 , 2016 , a decrease of $ 1,358,994 , or 48 % , primarily due to a reduction in depreciation and amortization expense that declined to $ 380,309 for the year ended december 31 , 2017 as compared to $ 805,607 for the year ended december 31 , 2016 , as the underlying assets became fully depreciated during 2017. warranty and repairs and maintenance costs decreased by $ 379,367 , or 109 % , to a benefit of $ 32,890 during the year ended december 31 , 2017 from $ 346,477 during the year ended december 31 , 2016. the decrease was primarily attributable to a decrease in warranty expenses of $ 340,828 as a result of us bringing our warranty service in-house in 2017. network costs were $ 302,645 for the year ended december 31 , 2017 compared to $ 511,438 for the year ended december 31 , 2016 , a decrease of $ 208,793 , or 41 % . this decrease is attributed to renegotiated contracts with service providers . there is a degree of variability in our gross margins related to charging services revenues from period to period primarily due to ( i ) the mix of revenue share payment arrangements , ( ii ) electricity reimbursements , and ( iii ) the costs of maintaining charging stations not currently in operation . any variability in our gross margins related to equipment sales depends on the mix of products sold . lastly , due to a decrease in the volume of residential and commercial units sold in 2017 , cost of product sales decreased by $ 264,307 to $ 237,422 during the year ended december 31 , 2017 as compared to $ 501,729 during 2016. operating expenses operating expenses consist of selling , marketing , advertising , payroll , administrative , finance and professional expenses . compensation expense increased by $ 1,101,949 , or 23 % , from $ 4,879,612 ( consisting of approximately $ 4.1 million of cash compensation and approximately $ 0.8 million of non-cash compensation ) for the year ended december 31 , 2016 to $ 5,981,561 ( consisting of approximately $ 2.9 million of cash compensation and approximately $ 3.1 million of non-cash compensation ) for the year ended december 31 , 2017. the increase is primarily attributed to an increase in non-cash compensation of $ 1.9 million due to increased equity-based board fees and commissions during 2017. this is partially offset by a decrease in salary and other payroll expenses of $ 724,750 due to a reduction in head count in 2017. other operating expenses consist primarily of rent and second generation product development expenses . other operating expenses decreased by $ 546,853 , or 38 % , from $ 1,451,683 for the year ended december 31 , 2016 to $ 904,830 for the year ended december 31 , 2017. the decrease was primarily attributable to a decrease in product development costs related to second generation charging stations of $ 338,979 to $ 162,190 during the year ended december 31 , 2017 from $ 501,168 during the year ended december 31 , 2016. additionally , there was a decrease in rent expense of $ 135,514 to $ 105,246 during the year ended december 31 , 2017 from $ 240,760 during the year ended december story_separator_special_tag 73,529 shares of common stock were issued to jmj financial as repayment of a $ 250,000 advance pursuant to a letter agreement between the company and the counterparty , dated february 1 , 2018. the 147,058 five-year warrants to purchase common stock with an exercise price of $ 4.25 were issued to jmj financial on april 9 , 2018 . 141,176 shares of common stock were issued to jns power & control systems , inc. ( “ jns ” ) as payment of $ 600,000 in connection with an asset purchase agreement entered into with the counterparty on february 2 , 2018 in settlement of litigation . 23,529 shares of common stock were issued to jns to be held in escrow as security for the $ 100,000 payment to be paid within six months of the closing of the public offering . at the time the $ 100,000 payment is made by the company , the 23,529 shares currently held in escrow will be cancelled . 17,132 shares of common stock were issued to genweb2 as repayment of a $ 58,250 debt pursuant to a letter agreement between the company and the counterparty , dated february 12 , 2018 . 2,353 shares of common stock were issued as payment of $ 10,000 to russ klenet & associates , inc. pursuant to the settlement and release agreement between the company and the counterparty , dated december 29 , 2016 . 17,647 shares of common stock were issued as payment of $ 75,000 owed to wilson sonsini goodrich & rosati pursuant to a settlement agreement between the company and the counterparty , dated june 8 , 2017 . 29 119,700 shares of common stock were issued to schafer & weiner , pllc as part of a repayment of a $ 406,981.47 debt pursuant to a letter agreement between the company and the counterparty . the 239,400 five-year warrants to purchase common stock with an exercise price of $ 4.25 were issued to schafer & weiner , pllc on april 9 , 2018 . 1,882 shares of common stock were issued to ibis co. in connection with an introduction to an investor . 550,000 shares of common stock were issued pursuant to letter agreements , dated december 6 , 2017 and december 7 , 2017 signed by the two holders of the series a convertible preferred stock ( “ series a preferred shares ” ) ( mr. farkas , our executive chairman is receiving 500,000 shares of common stock and ira feintuch , our chief operating officer is receiving 50,000 shares of common stock ) to convert 11,000,000 series a preferred shares issued and outstanding as of february 13 , 2018. as of march 28 , 2018 , there are no longer any series a preferred shares outstanding . 886,119 shares of common stock were issued to mr. farkas pursuant to the december 6 , 2017 letter agreement . 13,721 shares of common stock were issued to mr. farkas as payment of $ 46,651 in board fees owed to mr. farkas . 223,456 shares of common stock were issued to mr. farkas as payment of $ 712,500 in shares of common stock owed to mr. farkas for the period of december 1 , 2015 through may 31 , 2017 pursuant to the third amendment to executive employment agreement between the company and mr. farkas , dated june 15 , 2017 ( the “ third amendment ” ) and pursuant to a conversion agreement between the company and mr. farkas , dated august 23 , 2017 . 153,039 shares of common stock were issued to mr. farkas as payment of $ 375,000 in shares of common stock owed to mr. farkas for accrued commissions on hardware sales and revenue from charging stations for the period of november 2015 through march 2017 pursuant to the third amendment and $ 145,334 in shares of common stock owed to mr. farkas for accrued commissions on hardware sales and revenue from charging stations for the period of april 2017 through february 13 , 2018 pursuant to an oral agreement between the company and mr. farkas . this oral agreement was reached pursuant to section 7 ( b ) of the third amendment . in total 1,776,335 restricted shares of the company 's common stock were issued to mr. farkas . 26,500 shares of common stock were issued to mr. feintuch pursuant to the december 7 , 2017 letter agreement . 17,487 shares of common stock were issued to mr. feintuch as payment of $ 43,555 in shares of common stock owed to mr. feintuch which represents 25 % of the accrued commissions on hardware sales and revenue from charging stations for the period of november 2015 through march 2017 owed to mr. feintuch pursuant to the compensation agreement between the company and mr. feintuch , dated june 16 , 2017 and $ 15,902 in shares of common stock owed to mr. feintuch which represents 25 % of the accrued commissions on hardware sales and revenue from charging stations for the period of april 2017 through february 13 , 2018 owed to mr. feintuch pursuant to an oral agreement between the company and mr. feintuch . this oral agreement was reached pursuant to section 3 ( b ) of the compensation agreement . in total 93,987 restricted shares of the company 's common stock were issued to mr. feintuch . 360,441 shares of common stock were issued to ardour capital investments , llc ( “ ardour ” ) ( an entity of which mr. farkas owns less than 5 % ) in placement agent fees related to the $ 3,500,000 lent by jmj financial ( “ jmj ” ) to the company between october 2016 and october 2017. this share amount also includes placement agent fees owed to ardour in connection with a separate $ 250,000 lent by jmj to the company on january 22 , 2018 . 1,167 shares of common stock were issued to ardour in connection

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources during the year ended december 31 , 2017 , we financed our activities from proceeds derived from debt and equity financing . a significant portion of the funds raised from the sale of capital stock have been used to cover working capital needs and personnel , office expenses and various consulting and professional fees . for the year ended december 31 , 2017 and 2016 , we used cash of $ 2,548,661 and $ 2,749,023 , respectively , in operations . our cash use for the year ended december 31 , 2017 was primarily attributable to our net loss of $ 75,363,496 , adjusted for net non-cash expenses in the aggregate amount of $ 58,138,853 , partially offset by $ 14,675,982 of net cash provided by changes in the levels of operating assets and liabilities . our cash use for the year ended december 31 , 2016 was primarily attributable to our net loss of $ 7,699,127 , adjusted for net non-cash expenses in the aggregate amount of $ 2,031,537 partially offset by $ 2,918,567 of net cash provided by changes in the levels of operating assets and liabilities . during the year ended december 31 , 2017 , cash used in investing activities was $ 23,169 , which was used to purchase charging stations and other fixed assets . net cash used in investing activities was $ 80,463 during the year ended december 31 , 2016 , which was used to purchase charging stations and other fixed assets .

our strategy is to continue to build on our position in the private mi market , expand our customer base and grow our insured portfolio of high-quality residential loans by focusing on long-term customer relationships , disciplined and proactive risk selection and pricing , fair and transparent claims payment practices , responsive customer service , financial strength and profitability . our common stock trades on the nasdaq under the symbol `` nmih . `` we discuss below our results of operations for the periods presented , as well as the conditions and trends that have impacted or are expected to impact our business and results , including customer development , new insurance writings , the composition of our insurance portfolio , reinsurance among other factors . 47 conditions and trends impacting our business customer development we have important relationships with customers across all categories and allocation profiles , including national accounts and regional accounts , and centralized and decentralized lenders . our sales and marketing efforts are broadly focused on expanding our presence with existing customers and activating new customer relationships . we consider an activation to be the point at which we have signed a master policy , established it connectivity and generated a first application or first niw from a customer . during the year ended december 31 , 2018 , we activated 121 lenders , compared to 127 and 173 for the years ended december 31 , 2017 and december 31 , 2016 , respectively . we also continued to expand our business with existing customers , deepening our existing relationships and capturing what we believe to be an increasing portion of their annual mi volume . at december 31 , 2018 , we had 1,374 master policies and 1,005 active customer relationships , compared to 1,267 and 841 , respectively , as of december 31 , 2017 and 1,131 and 715 , respectively , as of december 31 , 2016 . new insurance written , insurance-in-force and risk-in-force niw is the aggregate unpaid principal balance of mortgages underpinning new policies written during a given period . our niw is affected by the overall size of the mortgage origination market and the volume of high-ltv mortgage originations , which tend to be generated to a greater extent in purchase originations as compared to refinancings . our niw is also affected by the percentage of such high-ltv originations covered by private versus government mi or other alternative credit enhancement structures and our share of the private mi market . niw , together with persistency , drives our iif . iif is the aggregate unpaid principal balance of the mortgages we insure , as reported to us by servicers at a given date , and represents the sum total of niw from all prior periods less principal payments on insured mortgages and policy cancellations ( including for prepayment , nonpayment of premiums , coverage rescission and claim payments ) . rif is related to iif and represents the aggregate amount of coverage we provide on all outstanding policies at a given date . rif is calculated as the sum total of the coverage percentage of each individual policy in our portfolio applied to the unpaid principal balance of such insured mortgage . rif is affected by iif and the ltv profile of our insured mortgages , with lower ltv loans generally having a lower coverage percentage and higher ltv loans having a higher coverage percentage . gross rif represents rif before consideration of reinsurance . net rif is gross rif net of ceded reinsurance . net premiums written and net premiums earned we set our premium rates on individual policies based on the risk characteristics of the underlying mortgage loans and borrowers , and in accordance with our filed rates and applicable rating rules . on june 4 , 2018 , we introduced a proprietary risk-based pricing platform , which we refer to as rate gps sm . rate gps considers a broad range of individual variables , including property type , type of loan product , borrower credit characteristics , and lender and market factors , and provides us with the ability to set and charge premium rates commensurate with the underlying risk of each loan that we insure . we introduced rate gps in june 2018 to replace our previous rate card pricing system . while we expect most of our new business will be priced through rate gps , we also continue to offer a rate card pricing option to a limited number of lender customers who require a rate card for operational reasons . we believe the introduction and utilization of rate gps provides us with a more granular and analytical approach to evaluating and pricing risk , and that this approach enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns . premiums are generally fixed for the duration of our coverage of the underlying loans . net premiums written are equal to gross premiums written minus ceded premiums written under our reinsurance arrangements , less premium refunds . as a result , net premiums written are generally influenced by : niw ; premium rates and the mix of premium payment type , which are either single , monthly or annual premiums , as described below ; cancellation rates of our insurance policies , which are impacted by payments or prepayments on mortgages , refinancings ( which are affected by prevailing mortgage interest rates as compared to interest rates on loans underpinning our in-force policies ) , levels of claims payments and home prices ; and cession of premiums under third-party reinsurance arrangements . premiums are paid either by the borrower ( bpmi ) or the lender ( lpmi ) in a single payment at origination ( single premium ) , on a monthly installment basis ( monthly premium ) or on an annual installment basis ( annual premium ) . story_separator_special_tag the claims expenses consist of the estimated cost of the claim administration process , including legal and other fees , as well as other general expenses of administering the claims settlement process 55 reserves are established by estimating the number of loans in default that will result in a claim payment , which is referred to as claim frequency , and the amount of the claim payment expected to be paid on each such loan in default , which is referred to as claim severity . claim frequency and severity estimates are established based on historical observed experience regarding certain loan factors , such as age of the default , cure rates , size of the loan and estimated change in property value . reserves are released the month in which a loan in default is brought current by the borrower , which is referred to as a cure . adjustments to reserve estimates are reflected in the period in which the adjustment is made . reserves are also ceded to reinsurers under the qsr transactions . we will not cede claims to reinsurers under the iln transactions unless losses exceed the respective retained coverage layers . reserves are not established for future claims on insured loans which are not currently in default . based on our experience and industry data , we believe that claims incidence for mortgage insurance is generally highest in the third through sixth years after loan origination . as of december 31 , 2018 , over 85 % of our primary iif related to business written since january 1 , 2016. although the claims experience on our iif to date has been modest , we expect incurred claims to increase as a greater amount of our existing insured portfolio reaches its anticipated period of highest claim frequency . additionally , our pool insurance agreement with fannie mae contains a claim deductible through which fannie mae absorbs specified losses before we are obligated to pay any claims . we have not established any pool reserves for claims or ibnr to date . the actual claims we incur as our portfolio matures are difficult to predict and depend on the specific characteristics of our current in-force book ( including the credit score and dti of the borrower , the ltv ratio of the mortgage and geographic concentrations , among others ) , as well as the risk profile of new business we write in the future . in addition , claims experience will be affected by future macroeconomic factors such as housing prices , interest rates , unemployment rates and other events , such as natural disasters . to date , our claims experience is developing at a slower pace than historical trends indicate , as a result of high quality underwriting , a strong macroeconomic environment and a favorable housing market . for additional discussion of our reserves , see item 8 , `` financial statements and supplementary data - notes to consolidated financial statements - note 7 , reserves for insurance claims and claim expenses . `` we insure mortgages for homes in areas that have been impacted by recent natural disasters . we do not provide coverage for property or casualty claims related to physical damage of a home underpinning an insured mortgage . we experienced an increase in nods on insured loans in areas impacted by such disasters in the fourth quarter of 2017 , the first quarter of 2018 and the fourth quarter of 2018. our ultimate claims exposure for loans in areas impacted by natural disasters will depend on the number of nods received , proximate cause of each default , cure rate of the nod population , and potential repair cost curtailment for appropriate claims on damaged properties as permitted under our master policy . cure rates on loan defaults following natural disasters are influenced by the adequacy of homeowners and other hazard insurance carried on a related property , gse-sponsored forbearance and other assistance programs , and a borrower 's access to aid from government entities and private organizations , in addition to other factors which generally impact cure rates in unaffected areas . in 2018 , we experienced higher cure rates on our nod population in disaster-affected areas as compared to our nod population in unaffected areas . 56 the following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claims expenses . replace_table_token_18_th ( 1 ) related to ceded losses recoverable on the qsr transactions , included in `` other assets `` on the consolidated balance sheets . see item 8 , `` financial statements and supplementary data - notes to consolidated financial statements - note 6 , reinsurance , `` for additional information . ( 2 ) related to insured loans with their most recent defaults occurring in the current year . for example , if a loan had defaulted in a prior year and subsequently cured and later re-defaulted in the current year , that default would be included in the current year . amounts are presented net of reinsurance . ( 3 ) related to insured loans with defaults occurring in prior years , which have been continuously in default since that time . amounts are presented net of reinsurance . the `` claims incurred `` section of the table above shows claims and claim expenses incurred on nods for current and prior years , including ibnr reserves and is presented net of reinsurance . the amount of claims incurred for current year nods represents the estimated amount to be ultimately paid on such loans in default . the decreases during the periods presented in reserves held for prior year defaults represent favorable development and are generally the result of nod cures and ongoing analysis of recent loss development trends . we may increase or decrease our original estimates as we gather additional information about individual defaults and claims , and continue to observe and analyze loss

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash provided by financing activities was $ 80.9 million for the year ended december 31 , 2018 and relates to the $ 79.2 million of net cash proceeds raised in the common stock offering we completed in march 2018 , as well as additional cash received in connection with the exercise of vested stock options and warrants , partially offset by net cash paid in connection with the extinguishment of the 2015 term loan and establishment of the 2018 term loan and 2018 revolving credit facility . cash used in financing activities was $ 3.2 million and $ 1.7 million for the years ended december 31 , 2017 and 2016 , respectively , and primarily relates to taxes paid on the net share settlement of equity awards for certain employees . holding company liquidity and capital resources nmih serves as the holding company for our insurance subsidiaries and does not have any significant operations of its own . nmih 's principal liquidity demands include funds for : ( i ) payment of certain corporate expenses ; ( ii ) payment of certain reimbursable expenses of its insurance subsidiaries ; ( iii ) payment of principal and interest related to the 2018 term loan and 2018 revolving credit facility ; ( iv ) tax payments to the internal revenue service ; ( v ) capital support for its subsidiaries ; and ( vi ) payment of dividends , if any , on its common stock . nmih is not subject to any limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in delaware . delaware law provides that dividends are only payable out of a corporation 's surplus or recent net profits ( subject to certain limitations ) . 64 as of december 31 , 2018 , nmih had $ 64.3 million of cash and investments . nmih 's principal source of net cash is investment income . nmih also has access to $ 85 million of undrawn revolving credit capacity under the 2018 revolving credit facility and $ 2.7 million of ordinary course dividend capacity from re one .

key events in october 2014 , we amended and restated our certificate of incorporation to increase our authorized share count to 450,000,000 shares of stock , including 400,000,000 shares of common stock and 50,000,000 shares of preferred stock , each with a par value $ 0.01 per share and to split our common stock 224.9835679 for 1. unless otherwise noted herein , historic share data has been adjusted to give effect to the stock split . in october 2014 , we completed our initial public offering ( “ipo” ) of 6,764,705 shares of common stock ( including the full exercise of the underwriters ' overallotment option to purchase an additional 882,352 shares ) at a price of $ 16.00 per share . 37 during fiscal 2015 , we completed three follow-on offerings of our common stock . all shares were offered by our selling shareholders and , in each case , included the full exercise of the underwriters ' overallotment option . the timing and share activity for each of these offerings is summarized below : replace_table_token_6_th ( 1 ) we utilized 248,412 treasury shares in partial satisfaction of the shares provided by option exercise in the may 2015 offering . in december 2015 , the oak hill funds sold 2,500,000 shares of common stock to the public . as of january 31 , 2016 , the oak hill funds owned approximately 18 % of our outstanding stock and certain members of our board of directors and our management owned approximately 1 % of our outstanding stock . the remaining 81 % was owned by the public . during fiscal 2015 , we entered into a new senior secured credit facility that provides a $ 150,000 term loan facility and a $ 350,000 revolving credit facility ( the “credit facility” ) . the proceeds of the credit facility were used to refinance in full the outstanding balance of a prior credit facility of $ 430,000 and to pay related interest and expenses . as a result of the refinancing , we expect to have lower interest expense . key measures of our performance we monitor and analyze a number of key performance measures to manage our business and evaluate financial and operating performance . these measures include : comparable store sales . comparable store sales are a year-over-year comparison of sales at stores open at the end of the period which have been open for at least 18 months as of the beginning of each of the fiscal years . it is a key performance indicator used within the industry and is indicative of acceptance of our initiatives as well as local economic and consumer trends . our comparable stores consisted of 59 , 57 and 55 stores as of the end of fiscal 2015 , fiscal 2014 and fiscal 2013 , respectively . fiscal 2015 comparable store sales exclude sales from our williamsville ( buffalo ) , new york location , which closed and relocated in the third quarter of fiscal 2015 , and our farmingdale location , which closed on february 8 , 2015. fiscal 2014 comparable store sales exclude sales from our kensington/bethesda , maryland ( “bethesda” ) location , which closed on august 12 , 2014. new store openings . our ability to expand our business and reach new customers is influenced by the opening of additional stores in both new and existing markets . the success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models . our new locations typically open with sales volumes in excess of their run-rate levels , which we refer to as a “honeymoon” effect . we expect our new store volumes in year two to be 10 % to 20 % lower and our margins on store-level ebitda ( excluding allocated marketing costs ) to be up to four percentage points lower in the second full year of operations than our year one targets , and to grow in line with the rest of our comparable store base thereafter . as a result of the substantial revenues associated with each new store and the seasonality of our business , the number and timing of new store openings will result in significant fluctuations in quarterly results . 38 non-gaap financial measures in addition to the results provided in accordance with generally accepted accounting principles ( “gaap” ) , we provide non-gaap measures which present operating results on an adjusted basis . these are supplemental measures of performance that are not required by or presented in accordance with gaap and include store-level ebitda , store-level ebitda margin , adjusted ebitda and adjusted ebitda margin . these non-gaap measures do not represent and should not be considered as an alternative to net income or cash flows from operations , as determined in accordance with gaap , and our calculations thereof may not be comparable to similarly entitled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with gaap . although we use these non-gaap measures to assess the operating performance of our business , they have significant limitations as an analytical tool because they exclude certain material costs . for example , adjusted ebitda does not take into account a number of significant items , including our interest expense and depreciation and amortization expense . because adjusted ebitda does not account for these expenses , its utility as a measure of our operating performance has material limitations . in addition , adjusted ebitda excludes pre-opening costs and adjustments for changes in the accruals for deferred amusement revenue and ticket liability , which we expect customers to redeem in future periods and which may be important in analyzing our gaap results . story_separator_special_tag there is a 20-year carry-forward on general business credits and amt credits can be carried forward indefinitely . the general business credits do not begin to expire until 2035 and are expected to be utilized in 2016 based on current enacted tax laws . as of january 31 , 2016 , we have no federal net operating loss carryforwards , and $ 64,127 of state net operating loss carryforwards . included in state net operating loss carryforwards is approximately $ 13,875 of state net operating loss carryforwards related to excess stock compensation that will be recorded in additional paid in capital when realized as a reduction in taxes payable . generally , state net operating losses can be carried forward 20 years . state operating loss carryforwards do not begin to expire until 2018. as of january 31 , 2016 , we could not conclude that it was more likely than not that all of our state net operating loss carryforwards , when considered on a state by state basis , will be fully utilized prior to their expiration . included in our total valuation allowance is $ 798 related to state net operating losses that may not be realized . 48 fiscal 2014 compared to fiscal 2013 results of operations the following table sets forth selected data in thousands of dollars and as a percentage of total revenues ( unless otherwise noted ) for the periods indicated . all information is derived from the accompanying consolidated statements of comprehensive income . replace_table_token_12_th ( 1 ) “comparable store sales” ( year-over-year comparison of stores operating at the end of the fiscal period and open at least 18 months as of the beginning of each of the fiscal years ) is a key performance indicator used within the industry and is indicative of acceptance of our initiatives as well as local economic and consumer trends . fiscal 2014 comparable stores exclude our bethesda location , which permanently closed on august 12 , 2014 . 49 ( 2 ) our fiscal 2014 store count excludes our bethesda location . our new store openings during the last two fiscal years were as follows : replace_table_token_13_th reconciliations of non-gaap financial measures—ebitda and adjusted ebitda the following table reconciles net income to ebitda and adjusted ebitda for the following years : replace_table_token_14_th ( 1 ) represents the net book value of assets ( less proceeds received ) disposed of during the period . primarily relates to assets replaced in ongoing operation of business . ( 2 ) represents the effect of foreign currency transaction losses related to our store in canada . ( 3 ) represents expenses incurred to reimburse our board of directors and certain non-recurring payments to management and compensation consultants . ( 4 ) primarily represents costs related to capital market transactions and store closure costs . ( 5 ) represents stock compensation expense under our 2010 stock incentive plan and 2014 stock incentive plan . ( 6 ) represents costs incurred prior to the opening of our new stores . ( 7 ) represents increases or ( decreases ) to accrued liabilities established for future amusement games play and the fulfillment of tickets won by customers on our redemption games . 50 reconciliations of non-gaap financial measures – store-level ebitda the following table reconciles ebitda to store-level ebitda for the following years : replace_table_token_15_th capital additions the following table represents total accrual-based additions to property and equipment . capital additions do not include any reductions for tenant improvement allowances received or receivable from landlords . replace_table_token_16_th revenues total revenues increased $ 111,172 , or 17.5 % , to $ 746,751 in fiscal 2014 compared to total revenues of $ 635,579 in fiscal 2013. the increased revenues were derived from the following sources : comparable stores $ 41,954 non-comparable stores 70,241 other ( 1,023 ) total $ 111,172 comparable store revenue increased $ 41,954 , or 7.3 % in fiscal 2014 compared to fiscal 2013. comparable walk-in revenues , which accounted for 87.7 % of comparable store revenue for fiscal 2014 , increased $ 38,921 , or 7.8 % compared to fiscal 2013. comparable store special events revenues , which accounted for 12.3 % of consolidated comparable store revenue for fiscal 2014 , increased $ 3,033 , or 4.2 % compared to fiscal 2013. the increase in comparable store revenue over prior year is attributable to our brand strength , increased consumer prosperity , and favorability due to weather . our brand strength can be credited to many factors including a more contemporary feel at our stores , the addition of and focus on sports viewing , and media efficiencies which encompasses the success of our “new news” program , which features our new offerings in each of the “eat drink play and watch” pillars through national advertising and the utilization of new media outlets . 51 food sales at comparable stores increased by $ 7,376 , or 3.8 % , to $ 200,156 for fiscal 2014 from $ 192,780 in the comparable period in 2013. beverage sales at comparable stores increased by $ 8,429 , or 9.6 % , to $ 95,937 for fiscal 2014 from $ 87,508 in the comparable period in 2013. sales growth was led by amusement and other revenues . comparable store amusement and other revenues for fiscal 2014 increased by $ 26,149 , or 8.9 % , to $ 319,107 from $ 292,958 in the 2013 comparison period . the growth over 2013 in amusement sales was driven by increased national advertising highlighting our amusement products , our “half-price game play” on wednesdays offer and power card up-sell initiatives . the non-comparable store revenue increased by a total of $ 70,241 , or 110.5 % , for fiscal 2014 compared to the comparable period in 2013. the increase in non-comparable store revenue was primarily driven by 374 additional store weeks contributed by our 2013 and 2014 store openings compared to fiscal 2013 , and partially offset

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and cash flows the primary source of cash flow is from our operating activities and availability under the revolving credit facility . store-level variability , quarterly fluctuations , seasonality and inflation we have historically operated stores varying in size and have experienced significant variability among stores in volumes , operating results and net investment costs . we also expect seasonality to be a factor in the operation or results of the business in the future with higher first and fourth quarter revenues associated with the spring and year-end holidays . these quarters will continue to be susceptible to the impact of severe weather on customer traffic and sales during that period . our third quarter , which encompasses the back-to-school fall season , has historically had lower revenues as compared to the other quarters . we expect that volatile economic conditions will continue to exert pressure on both supplier pricing and consumer spending related to entertainment and dining alternatives . although there is no assurance that our cost of products will remain stable or that federal or state minimum wage rates will not increase beyond amounts currently legislated , the effects of any supplier price increases or minimum wage rate increases are expected to be partially offset by selected menu price increases where competitively appropriate . 42 fiscal 2015 compared to fiscal 2014 results of operations . the following table sets forth selected data , in thousands of dollars and as a percentage of total revenues ( unless otherwise noted ) for the periods indicated . all information is derived from the accompanying consolidated statements of comprehensive income . replace_table_token_7_th ( 1 ) “comparable store sales” ( year-over-year comparison of stores operating at the end of the fiscal period and open at least 18 months as of the beginning of each of the fiscal years ) is a key performance indicator used within the industry and is indicative of acceptance of our initiatives as well as local economic and consumer trends .

as of december 31 , 2013 , we have spent ( i ) $ 35.9 million in capital expenditures ( of which $ 27.5 million has been or will be funded by the federal stimulus grant ) in connection with our build of ten new segments of fiber-optic , middle-mile broadband infrastructure in upstate new york and parts of pennsylvania and vermont ; ( ii ) $ 7.6 million in capital expenditures ( of which $ 5.3 million has been or will be funded by the federal stimulus grant ) in connection with our last-mile broadband infrastructure buildout in the navajo nation across arizona , new mexico and utah ; and ( iii ) $ 44.1 million in capital expenditures ( of which $ 30.9 million has been or will be funded by the federal stimulus grant ) in connection with our fiber-optic middle mile network buildout to provide broadband and transport services to over 340 community anchor institutions in vermont . the results of our new york and vermont stimulus projects are included in our `` u.s. wireline `` segment and the results of our navajo stimulus project are included in our `` u.s. wireless `` segment . the new york and navajo stimulus projects were completed during 2013. the vermont stimulus project will be completed during the latter half of 2014 and we anticipate that it will incur an additional $ 3.0 million of capital expenditures of which $ 2.1 million is expected to be funded by the federal stimulus grants . mobility fund as part of the federal communications commission 's ( `` fcc `` ) reform of its universal service fund ( `` usf `` ) program , which previously provided support to carriers seeking to offer telecommunications services in high-cost areas and to low-income households , the fcc created two new funds , including the mobility fund , a one-time award meant to support wireless coverage in underserved geographic areas in the united states . in august 2013 , we received fcc final approval for approximately $ 47.0 million of mobility fund support to our alltel business ( the `` alltel mobility funds `` ) and $ 21.7 million of mobility fund support to our wholesale wireless business ( the `` wholesale mobility funds `` and collectively with the alltel mobility funds , the `` mobility funds `` ) , to expand voice and broadband networks in certain geographic areas in order to offer either 3g or 4g coverage . as part of the receipt of the mobility funds , we committed to comply with certain additional fcc construction and other requirements . in connection with our application for the mobility funds , we issued approximately $ 29.8 million in letters of credit to the universal service administrative company ( `` usac `` ) in june 2013 to secure these obligations . if we fail to comply with any of the terms and conditions upon which the mobility funds were granted , or if we lose eligibility for the mobility funds , usac will be entitled to draw the entire amount of the letter of credit applicable to the affected project plus penalties and may disqualify us from the receipt of additional mobility fund support . in connection with our sale of our alltel business on september 20 , 2013 , we notified the fcc and usac that we would no longer be eligible to perform under the terms and conditions of the alltel mobility funds . at that time , usac chose not to draw any amounts under our letters of credit securing the alltel mobility funds and we made a cash payment of approximately $ 4.6 million in penalty fees to usac . we terminated $ 19.9 million of the letters of credit securing our alltel mobility funds upon receipt of the returned letters of credit from usac and were reimbursed for these penalty fees by at & t mobility llc in january 2014. we began the construction of our wholesale mobility funds projects during the fourth quarter of 2013 and its results are included in our `` u.s. wireless `` segment . as of december 31 , 2013 , we have received approximately $ 7.3 million in wholesale mobility funds . of these funds , $ 1.1 million has been recorded as an offset to the cost of the property , plant and equipment associated with these projects and , consequentially , a reduction of the future depreciation expense , $ 2.4 million is recorded within other current liabilities while the remaining $ 3.8 million is recorded within other long-term liabilities in our consolidated balance sheet as of december 31 , 2013. the presentation of current versus long-term is based on the timing of the expected usage of the funds which will reduce future operation expenses . 33 results of operations : years ended december 31 , 2012 and 2013 replace_table_token_9_th 34 u.s. wireless revenue . the substantial majority of u.s. wireless revenue consists of wholesale revenue . for the years ended december 31 , 2012 and 2013 , wholesale revenue represented 98 % and 97 % of total u.s. wireless revenue , respectively . in addition , u.s. wireless revenue also includes a small amount of retail revenues generated by our operations in certain smaller rural markets already covered by our wholesale network in the western united states . wholesale revenue is generated from providing mobile voice or data services to the customers of other wireless carriers , the provision of network switching services and certain transport services using our wireless networks . wholesale wireless revenue is primarily driven by the number of sites and base stations we operate , the amount of voice and data traffic from the subscribers of other carriers that each of these sites generates , and the rates we are paid from our carrier customers for carrying that traffic . story_separator_special_tag in addition , we recorded $ 1.1 million and $ 0.6 million relating to our discontinued operations for the years ended december 31 , 2012 and 2013 and $ 28.9 million relating to the gain on the alltel sale . net income attributable to atlantic tele-network , inc. stockholders . net income attributable to atlantic tele-network , inc. stockholders increased to $ 311.7 million for the year ended december 31 , 2013 from $ 48.9 million for the year ended december , 2012. included within these amounts was $ 4.6 million and $ 28.1 million , net of non-controlling interests , relating to discontinued operations for the years ended december 31 , 2013 and 2012 , respectively . for the year ended december 31 , 2013 , net income attributable to atlantic tele-network , inc. stockholders also included a gain on the sale of discontinued operations of $ 278.2 million , net of tax and non-controlling interests . on a per share basis , net income increased to $ 19.71 per diluted share from $ 3.13 per diluted share for the years ended december 31 , 2013 and 2012 , respectively . included within net income per diluted share was $ 0.29 and $ 1.80 of net income per diluted share of discontinued operations for the years ended december 31 , 2013 and 2012 , respectively . the year ended december 31 , 2013 also includes net income per diluted share of $ 17.59 relating to the gain on the sale of our discontinued operations . 39 results of operations years ended december 31 , 2011 and 2012 replace_table_token_10_th u.s. wireless revenue . our u.s. wireless revenue increased to $ 102.8 million for the year ended december 31 , 2012 from $ 98.7 million for the year ended december 31 , 2011 , an increase of $ 4.1 million or 4.2 % . the increase was a result of an increase in data traffic in our wholesale markets . 40 international wireless revenue . international wireless revenue increased by $ 8.5 million , or 11 % , to $ 81.5 million for the year ended december 31 , 2012 , from $ 73.0 million for the year ended december 31 , 2011. this increase primarily resulted from our completion of the bermuda merger in 2011 and a $ 2.4 million increase in wireless revenues in guyana as a result of increased voice and data usage . wireline revenue . wireline revenue increased by $ 0.5 million , or 1 % , to $ 85.5 million for the year ended december 31 , 2012 from $ 85.0 million for the year ended december 31 , 2011. in guyana , a $ 3.1 million decrease in international long-distance revenue was offset by data revenue growth from our newly built fiber optic submarine cable . wireline revenue in the u.s. remained relatively consistent compared with the previous year as we saw increased revenue from our upstate new york wholesale transport service business . we continued to add business customers in the u.s. for our voice and data services ; however , the overall revenue increase was offset by a decline in the residential data business in vermont and new hampshire , including dial-up internet services . equipment and other revenue . equipment and other revenue increased by $ 1.9 million , or 30 % , to $ 8.0 million for the year ended december 31 , 2012 , up from $ 6.1 million for the year ended december 31 , 2011. the increase was the result of an increase in smart-phone sales in our international integrated telephony segment which reported an increase in equipment and other revenue of $ 0.9 million . we also had an increase in our equipment and other revenue in our island wireless segment primarily due to the bermuda merger , completed in may 2011. termination and access fee expenses . termination and access fees decreased by $ 0.9 million , or 1.5 % , from $ 57.7 million for the year ended december 31 , 2011 to $ 56.8 million for the year ended december 31 , 2012. our island wireless segment recorded a decrease in its termination and access fees of $ 1.4 million primarily driven by the realized synergies of our bermuda merger in 2011. termination and access fees in our international integrated telephony segment decreased by $ 1.0 million as a result of a decrease in voice traffic volume and a reduction in bad debt expense . these decreases were partially offset by the termination and access fees in our u.s. wireline segment increased by approximately $ 1.7 million as a result of the expansion of our wholesale transport networks in vermont and new york state . engineering and operations expenses . engineering and operations expenses increased by $ 6.3 million , or 19 % , from $ 33.7 million for the year ended december 31 , 2011 to $ 40.0 million for the year ended december 31 , 2012. engineering and operations increased primarily as a result of the continued expansion of our u.s. wireless and international integrated telephony networks which resulted in increases in engineering and operations expenses of $ 2.6 million and $ 2.1 million , respectively . the remainder of the increase was the result of the completion of our bermuda merger in may 2011 and the expansion of networks and new services being offered in our international subsidiaries . sales and marketing expenses . sales and marketing expenses decreased by $ 1.2 million , or 6.2 % , from $ 20.2 million for the year ended december 31 , 2011 to $ 19.0 million for the year ended december 31 , 2012. the decrease was primarily within our island wireless segment which experienced an increase in its sales and marketing expenses during 2011 in connection with the bermuda merger and cost reductions during 2012 in other island wireless businesses . equipment expenses . equipment expenses increased by $ 3.6 million

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

sources of cash total liquidity at december 31 , 2013. as of december 31 , 2013 , we had approximately $ 434.6 million in cash , cash equivalents and restricted cash , an increase of $ 297.8 million from the december 31 , 2012 balance of $ 136.6 million . this increase was primarily the result of the alltel sale , which yielded proceeds net of transaction costs and payments made to alltel 's minority shareholders of $ 764.6 million , offset by $ 256.8 million paid in taxes and the repayment of our outstanding long-term debt of $ 272.1 million . cash provided by operations . cash used by operating activities was $ 112.0 million for the year ended december 31 , 2013 as compared to cash provided by operating activities of $ 187.5 million for the year ended december 31 , 2012 , a decrease of $ 299.5 million . the decrease was predominantly driven by decreases in ( i ) our net income of $ 11.0 million ( net of the gain on the sale of discontinued operations ) , ( ii ) cash provided by our discontinued operations of $ 53.2 million and ( iii ) accrued taxes , net of prepaid taxes , which decreased by $ 334.3 million , primarily as a result of the gain on our alltel sale . these fluctuations were partially offset by an increase in non-cash charges including deferred income taxes , our unrealized loss on our interest rate derivative contracts which were terminated during 2013 and the amortization of our debt discount and issuance costs which was accelerated as a result of the repayment of our term loan debt . cash used in investing activities . cash provided by investing activities was $ 643.1 million for the year ended december 31 , 2013 which included $ 718.8 million in proceeds from the sale of our alltel business ( net of escrowed proceeds of $ 78.0 million ) and $ 1.5 million in proceeds from the sale of certain network assets partially offset by our capital expenditures from our continuing operations of $ 69.3 million and capital expenditures within our discontinued operations .

transactions with the affiliated companies were made in the ordinary course of business , and management believes that sales to the affiliated companies do not involve more than normal credit risk . we are nearing completion of the expansion project , which involves the expansion of kinpak 's manufacturing and warehouse facilities in montgomery , alabama . see “ business - recent developments ” in item 1 of this report for additional information . the tax cuts and jobs act , which was enacted on december 22 , 2017 , changes united states tax law significantly . the most important change affecting ocean bio-chem , inc. is the reduction in the united states corporate income tax rate from 35 % to 21 % , effective january 1 , 2018. among other things , the reduction in the corporate tax rate resulted in a substantial decrease in our deferred tax liabilities , which is discussed in more detail below under “ results of operations – provision for income taxes . ” 6 our operating results for 2016 were adversely affected by professional fees and expenses related to litigation against a competitor in which we and the competitor each claimed that the other was engaged in false advertising and related violations of law ( the “ advertising litigation ” ) . following a trial in which it was determined that neither party was liable to the other , the advertising litigation was concluded . our professional fees and expenses related to the advertising litigation were approximately $ 1,146,000 in 2016. as the advertising litigation was concluded in 2016 , we had no expenses related to the advertising litigation during 2017. critical accounting estimates : the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the united states of america requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . actual results could differ from those estimates and assumptions . we have identified the following as critical accounting estimates , which are defined as those that are reflective of significant judgments and uncertainties , are the most pervasive and important to the presentation of our financial condition and results of operations and , if subject to different assumptions and conditions , could lead to materially different results . collectability of trade accounts receivable in the ordinary course of business , we grant non-interest bearing trade credit to our unaffiliated customers on terms that range from 30 to 180 days . in an effort to reduce our credit risk , we perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and aging of receivables , as well as our customers ' creditworthiness , as determined by our review of their current credit information . we generally do not require collateral on trade accounts receivable . we maintain an allowance for doubtful accounts based on expected collectability of the trade accounts receivable , after considering our historical collection experience , the length of time an account is outstanding , the financial position of the customer if known and information provided by credit rating services . the adequacy of this allowance is reviewed each reporting period and adjusted as necessary . our allowance for doubtful accounts was approximately $ 79,000 and $ 75,000 at december 31 , 2017 and 2016 , respectively , which was approximately 1.6 % and 1.5 % of gross accounts receivable at december 31 , 2017 and 2016 , respectively . if the financial condition of our customers were to deteriorate , resulting in increased uncertainty as to their ability to make payments , or if unexpected events or significant future changes in trends were to occur , we may be required to increase the allowance or incur a bad debt expense . in this regard , we incurred a bad debt expense of approximately $ 199,000 in 2017 , most of which resulted from a customer 's bankruptcy . inventories our inventories primarily are composed of raw materials and finished goods and are stated at the lower of cost or net realizable value , using the first-in , first-out method . net realizable value is the estimated selling prices in the ordinary course of business , less reasonably predictable costs of completion , disposal and transportation . we maintain a reserve for slow moving and obsolete inventory to reflect the diminution in value resulting from product obsolescence , damage or other issues affecting marketability in an amount equal to the difference between the cost of the inventory and its estimated net realizable value . the adequacy of this reserve is reviewed each reporting period and adjusted as necessary . we regularly compare inventory quantities on hand against historical usage or forecasts related to specific items in order to evaluate obsolescence and excessive quantities . in assessing historical usage , we also qualitatively assess business trends to evaluate the reasonableness of using historical information as an estimate of future usage . our slow moving and obsolete inventory reserve was $ 274,295 and $ 268,159 at december 31 , 2017 and 2016 , respectively . income taxes we account for income taxes under the asset and liability method . under this method , deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . story_separator_special_tag we assess the remaining useful life and recoverability of intangible assets having finite lives ( patents and royalty rights ) whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable . such events or circumstances may include , for example , the occurrence of an adverse change with respect to a product line that utilizes the intangible assets . significant judgments in this area involve determining whether such an event or circumstance has occurred . any impairment loss , if indicated , equals the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset . results of operations : the following table provides a summary of our financial results for the years ended december 31 , 2017 and 2016 : replace_table_token_1_th 8 net sales for the year ended december 31 , 2017 increased by approximately $ 2,728,000 or 7.5 % , as compared to the year ended december 31 , 2016. the net sales increase principally is attributable to sales of our marine products to two of our largest customers . in addition , we experienced sales growth generally with respect to a wide range of customers , including mass merchandisers , large home improvement and marine/sports retail chains , and online retailers . cost of goods sold in creased by approximately $ 2,105,000 or 9.4 % in 2017 , as compared to 2016. the increase in cost of goods sold is principally a result of increased sales volume , higher raw material costs on our winterizing products and higher manufacturing costs . gross profit increased by approximately $ 623,000 or 4.5 % during 2017 , as compared to 2016. as a percentage of net sales , gross profit decreased to 37.2 % in 2017 from 38.3 % in 2016. the increase in gross profit in 2017 is primarily attributable to increased sales volume . the decrease in gross profit as a percentage of net sales during 2017 is principally a result of lower profit margins on sales of our winterizing products due to both lower sales prices and higher raw material costs . advertising and promotion expense increased by approximately $ 407,000 or 13.0 % during 2017 , as compared to 2016. as a percentage of net sales , advertising and promotion expense increased to 9.1 % in 2017 compared to 8.6 % in 2016. the increase in advertising and promotion expense is primarily a result of increases in customer cooperative advertising allowances provided to select customers and other marketing expenses . selling and administrative expenses decreased by approximately $ 363,000 or 4.7 % , during 2017 , as compared to 2016. the decrease reflects the conclusion of the advertising litigation in 2016. in 2016 , legal fees and expenses related to the advertising litigation were approximately $ 1,146,000. this decrease was partially offset by increased employee compensation expenses ( including salaries , commissions and stock awards ) ; bad debt expense of approximately $ 199,000 , of which approximately $ 188,000 resulted from a customer 's bankruptcy ; and increased costs of computer programming and other information technology services . as a percentage of net sales , selling and administrative expenses decreased to 18.7 % in 2017 from 21.2 % in 2016. interest income , net for the year ended december 31 , 2017 was approximately $ 2,000 ; for the year ended december 31 , 2016 , interest expense , net was approximately $ 18,000. interest income in 2017 was generated principally by an escrow account in which a portion of the funds relating to an industrial development bond financing were deposited pending our utilization of such funds in connection with the expansion project . the interest income was offset principally by interest under an earlier term loan that matured on july 6 , 2017 ; we paid all remaining principal and interest on the maturity date . the term loan also was the source of our primary interest obligation in 2016. provision for income taxes increased by approximately $ 91,000 for the year ended december 31 , 2017 , or 29.2 % of our pretax income , compared to approximately $ 983,000 in the year ended december 31 , 2016 , or 31.9 % of our pretax income . the increase in our provision for income taxes , which principally was due to the increase in our operating income , was offset in part by the benefit reflecting the reduction of our u.s. corporate income tax rate from 34 % to 21 % under the tax cuts and jobs act . we revalued our net deferred tax liabilities to give effect to the reduction in the corporate income tax rate , which resulted in an approximately $ 91,000 tax benefit . for additional information , see note 8 to the consolidated financial statements included in this report . story_separator_special_tag times , serif ; font-size : 10pt `` > some of our assets and liabilities are denominated in canadian dollars and are subject to currency exchange rate fluctuations . we do not engage in currency hedging and address currency risk as a pricing issue . for the year ended december 31 , 2017 , we recorded $ 1,496 in foreign currency translation adjustments ( decreasing shareholders ' equity by $ 1,496 ) . during the past few years , we have introduced a number of new products . at times , new product introductions have required us to increase our overall inventory and have resulted in lower inventory turnover rates . the effects of reduced inventory turnover have not been material to our overall operations . we believe that all capital required to fund any inventory increases will continue to be provided by operations and , if necessary , our current revolving line of credit or a renewal or replacement of the facility . however , we can not assure that we will be able to secure such a renewal or replacement of

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources : our cash balance was approximately $ 2,418,000 at december 31 , 2017 compared to approximately $ 4,070,000 at december 31 , 2016. the following table summarizes our cash flows for the years ended december 31 , 2017 and 2016 : replace_table_token_2_th 9 net cash provided by operating activities for the year ended december 31 , 2017 decreased by approximately $ 97,000 or 3.2 % , as compared to the year ended december 31 , 2016. the comparative decrease is attributable to changes in working capital ( excluding cash ) of approximately $ 1,099,000 for the year ended december 31 , 2017 as compared to changes of approximately $ 344,000 during the year ended december 31 , 2016. these changes were mostly offset by an increase in net income of approximately $ 508,000 combined with an increase of noncash expenses of approximately $ 158,000 during the year ended december 31 , 2017 as compared to the year ended december 31 , 2016. inventories , net were approximately $ 9,074,000 and $ 8,601,000 at december 31 , 2017 and 2016 , respectively , representing an increase of approximately $ 473,000 or 5.5 % in 2017. the 2017 increase in inventories reflects anticipated demand in the first quarter of 2018. net trade accounts receivable at december 31 , 2017 aggregated approximately $ 4,964,000 , an increase of approximately $ 32,000 or 0.7 % compared to approximately $ 4,932,000 in net trade accounts receivable outstanding at december 31 , 2016. receivables due from affiliated companies aggregated approximately $ 1,584,000 at december 31 , 2017 , an increase of approximately $ 394,000 , or 33.1 % over receivables due from affiliated companies of approximately $ 1,190,000 at december 31 , 2016. net cash used in investing activities for the year ended december 31 , 2017 increased by approximately $ 7,579,000 ,

during the initial two-years of the collaboration period , pfizer reimbursed us for certain costs incurred in the development of the licensed products , including fte-based research payments . following the conclusion of the initial collaboration , without extension by pfizer , we had no further substantive performance obligations to pfizer under the agreement , and we recognized the remaining $ 12.6 million of deferred revenue related to the up-front fee in june 2011. subsequently , in august 2013 , we entered into an amendment to the pfizer agreement , in accordance with which pfizer made two $ 1.5 million non-refundable annual license maintenance payments to us in august 2013 and august 2014 and we agreed to certain performance obligations to pfizer for the period 59 starting from the effective date of the amendment . pfizer was also obligated to pay to us contingent milestone-based payments upon the occurrence of certain defined development , commercialization , and sales-based milestones . collaboration and license revenue related to the pfizer agreement during the years ended december 31 , 2014 and 2015 was $ 1.4 million and $ 1.3 million , respectively , reflecting the amortization of the annual license maintenance payments received over the estimated expected period of our performance obligations which was estimated to conclude in august 2015. on april 2 , 2015 , pfizer notified us that it was exercising its right to terminate the research and license agreement effective june 1 , 2015. accordingly , we revised the expected period of performance to end on june 1 , 2015 , and the deferred revenue balance was fully amortized as of that date . we are currently negotiating with pfizer regarding rights to use certain manufacturing materials . in september 2013 , we entered into a license and collaboration agreement with isu abxis pursuant to which we licensed our proprietary human factor ix products to isu abxis for initial development in south korea . under the agreement , isu abxis is responsible for development and manufacturing of the licensed products through phase 1/2 clinical trials . until the completion of phase 1 development , isu abxis also has a right of first refusal with respect to commercialization rights for the licensed products in south korea . isu abxis paid us an up-front signing fee of $ 1.75 million and is obligated to pay to us contingent milestone-based payments on the occurrence of certain defined development events , none of which have been achieved as of december 31 , 2015. collaboration and license revenue related to the isu abxis agreement during the years ended december 31 , 2014 and 2015 was $ 0.4 million and $ 0.4 million , respectively , that reflect the amortization of the up-front fee over the estimated period of our performance obligations , that are estimated to conclude in august 2017. we had a deferred revenue balance of $ 0.7 million as of december 31 , 2015 related to the isu abxis collaboration . on august 20 , 2015 , we completed the business combination between old catalyst and targacept in accordance with the terms of the agreement and plan of merger , dated as of march 5 , 2015 , as amended on may 6 and may 13 , 2015 ( the “merger agreement” ) . also on august 20 , 2015 , in connection with , and prior to the completion of , the merger , we effected a 7-for-1 reverse stock split of our common stock ( the “reverse stock split” ) and changed our name to “catalyst biosciences , inc.” immediately prior to and in connection with the merger , each share of old catalyst preferred stock outstanding was converted into shares of old catalyst common stock at ratios determined in accordance with the old catalyst certificate of incorporation then in effect . under the terms of the merger agreement , at the effective time of the merger , we issued shares of our common stock to old catalyst stockholders , at an exchange rate of 0.0382 shares of common stock , after taking into account the reverse stock split , in exchange for each share of old catalyst common stock outstanding immediately prior to the merger . the exchange rate was calculated by a formula that was determined through arms-length negotiations between targacept and old catalyst . immediately after the merger , there were 11,416,984 shares of our common stock outstanding , and the former old catalyst equity holders beneficially owned approximately 59 % of our common stock . the merger was accounted for as a reverse asset acquisition . we have no products approved for commercial sale and have not generated any revenue from product sales . from inception to december 31 , 2015 , we have raised net cash proceeds of approximately $ 217.4 million , primarily from private placements of convertible preferred stock and the proceeds from the merger in addition to issuances of shares of common stock and warrants and payments received under collaboration agreements . the cash proceeds raised do not include the redeemable convertible notes which are held in restricted cash . we have never been profitable and have incurred significant operating losses in each year since inception . our net losses were $ 14.8 million and $ 6.6 million for years ended december 31 , 2015 and 2014 , respectively . as of december 31 , 2015 , we had an accumulated deficit of $ 131.0 million . substantially all of our operating losses 60 resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations . our operating costs have decreased since 2012 due to the termination of the research activities under the pfizer agreement and other agreements , a restructuring of our operations that included a reduction in work force , and the focusing of our research programs . story_separator_special_tag ( 3 ) we had unrecognized tax benefits in the amount of $ 1.3 million as of december 31 , 2015 related to uncertain tax positions . however , there is uncertainty regarding when these benefits will require settlement so these amounts were not included in the contractual obligations table above . off-balance sheet arrangements we do not have any off-balance sheet arrangements . critical accounting polices and estimates the preparation of financial statements and related disclosures in conformity with u.s. generally accepted accounting principles ( “gaap” ) and the company 's discussion and analysis of its financial condition and operating results require the company 's management to make judgments , assumptions and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes . our significant accounting policies and methods used in preparation of the company 's consolidated financial statements are described in note 2 “summary of significant accounting policies” of the notes to consolidated financial statements of this annual report on form 10-k. management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities . actual results may differ from these estimates , and such differences may be material . 68 management believes the company 's critical accounting policies and estimates discussed below are critical to understanding its historical and future performance , as these policies relate to the more significant areas involving management 's judgments and estimates . revenue recognition we generate revenue from collaboration agreements pursuant to which we seek the development and commercialization of our product candidates . collaboration agreements provide for the payment to us of up-front license fees , success-based milestone payments , fte-based payments for research services and royalties on any future sales of commercialized products that result from the collaboration . our performance obligations under our remaining collaboration agreement include licenses of intellectual property rights , obligations to provide research and development services , related clinical drug supply and regulatory approval services , and obligations to participate on certain development and or commercialization committees with the collaborators . payments of up-front license fees are recorded as deferred revenue in our balance sheet and are recognized as contract revenue over our estimated period of performance in a manner consistent with the terms of the research and development obligations contained in the respective collaboration agreement . we regularly review the estimated periods of performance related to our collaboration agreements based on the progress made under each arrangement . our estimates of our performance period may change over the course of the agreement term . such a change could have a material impact on the amount of revenue we record in future periods . payments to us for research and development and regulatory approval services are recognized as the services are performed , in accordance with the respective contract terms . payments for such services may be made to or by us based on the number of full-time equivalent researchers assigned to the collaboration project and the related research and development expenses incurred . revenue recognition for multiple element revenue arrangements will have deliverables associated with the arrangement divided into separate units of accounting provided that ( i ) a delivered item has value to the customer on a standalone basis and ( ii ) if the arrangement includes a general right of return relative to the delivered item , delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor . as a biotechnology company with unique and specialized technological undelivered performance obligations associated with our collaborations , our multiple element arrangements have in the past often involved deliverables and consideration that do not meet the criteria for having stand-alone value . such deliverables and consideration must be accounted for under a single unit of accounting along with other arrangement deliverables and consideration that do not have stand-alone value and are recognized as revenue over the estimated period that the performance obligations are to be performed . the revenue is recognized on a proportional performance basis when the levels of the performance obligations under an arrangement can be reasonably estimated and on a straight-line basis when they can not . we also adopted guidance that permits the recognition of revenue contingent upon the achievement of a milestone in its entirety , in the period in which the milestone is achieved , only if the milestone meets certain criteria and is considered to be substantive . as such , we plan to recognize revenue in the period in which the milestone is achieved , only if the milestone is considered to be substantive based on the following criteria : the milestone is commensurate with either ( i ) the vendor 's performance to achieve the milestone , or ( ii ) the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from the vendor 's performance to achieve the milestone ; the milestone relates solely to past performance ; and the milestone is reasonable relative to all of the deliverables and payment terms ( including other potential milestone consideration ) within the arrangement . 69 accrued research and development expenses we record accrued expenses for estimated costs of our research and development activities conducted by external service providers , which include the conduct of preclinical studies and clinical trials and contract manufacturing activities . we record the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced , and includes these costs in accrued liabilities in the balance sheet and within research and development expense in the consolidated statement of operations . these costs are a significant component of our research and development expenses . we record accrued expenses for these costs based on the estimated amount of

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources on august 20 , 2015 , we completed our merger with targacept , which provided $ 41.2 million in cash , cash equivalents and short-term investments . prior to that time , our operations had been financed primarily by net proceeds from the sale of convertible preferred stock , and the issuance of convertible notes . as of december 31 , 2015 , we had $ 32.5 million of cash , cash equivalents and short-term investments . we have an accumulated deficit of $ 131.0 million as of december 31 , 2015. our primary uses of cash are to fund operating expenses , including research and development expenditures and general and administrative expenditures . cash used to fund operating expenses is impacted by the timing of when we pay these expenses , as reflected in the change in its outstanding accounts payable and accrued expenses . we believe that our existing capital resources will be sufficient to meet our projected operating requirements for at least the next 12 months . we have based this estimate on assumptions that may prove to be wrong , and we could utilize our available capital resources sooner than we currently expect . we plan to continue to fund losses from operations and capital funding needs through future equity and or debt financings , as well as potential additional collaborations or strategic partnerships with other companies . the sale of additional equity or convertible debt could result in additional dilution to our stockholders . the incurrence of indebtedness would result in debt service obligations and could result in operating and financing covenants that would restrict our operations . we can provide no assurance that financing will be available in the amounts we need or on terms acceptable to us , if at all . if we are not able to secure adequate additional funding we may be forced to delay , make reductions in spending , extend payment terms with suppliers , liquidate assets where possible , and or suspend or curtail planned programs . any of these actions could materially harm our business .

services revenues services revenues are derived from professional services that include developing , implementing , integrating , automating and extending business processes , technology infrastructure , and software applications . professional services revenues are recognized over time as services are rendered . most of our projects are performed on a time and materials basis , while a portion of our revenues is derived from projects performed on a fixed fee or fixed fee percent complete basis . for time and material projects , revenues are recognized and billed by multiplying the number of hours our professionals expend in the performance of the project by the hourly rates . for fixed fee contracts , revenues are recognized and billed by multiplying the established fixed rate per time period by the number of time periods elapsed . for fixed fee percent complete projects , revenues are generally recognized using an input method based on the ratio of hours expended to total estimated hours . fixed fee percent complete engagements represented approximately 7 % of our services revenues for the year ended december 31 , 2019 compared to 8 % for each of the years ended december 31 , 2018 and 2017 . on most projects , we are reimbursed for out-of-pocket expenses including travel and other project-related expenses . these reimbursements are included as a component of the transaction price of the respective professional services contract . the aggregate amount of reimbursed expenses will fluctuate depending on the location of our clients , the total number of our projects that require travel , and whether our arrangements with our clients provide for the reimbursement of such expenses . in conjunction with services provided , we occasionally receive referral fees under partner programs . these referral fees are recognized at a point in time when earned and recorded within services revenues . software and hardware revenues software and hardware revenues are derived from sales of third-party software and hardware resales , in which we are considered the agent , and sales of internally developed software , in which we are considered the principal . revenues from sales of third-party software and hardware are recorded on a net basis , while revenues from internally developed software sales are recorded on a gross basis . software and hardware revenues are expected to fluctuate depending on our clients ' demand for these products . there are no significant cancellation or termination-type provisions for our software and hardware sales . contracts for our professional services provide for a general right , to the client or us , to cancel or terminate the contract within a given period of time ( generally 10 to 30 days ' notice is required ) . the client is responsible for any time and expenses incurred up to the date of cancellation or termination of the contract . cost of revenues cost of revenues consists of costs of services and software and hardware costs . costs of services consists primarily of cash and non-cash compensation and benefits ( including bonuses and non-cash compensation related to equity awards ) , costs associated with subcontractors , reimbursable expenses and other project-related expenses . cost of revenues does not include depreciation of 21 assets used in the production of revenues which are primarily personal computers , servers , and other information technology related equipment . upon adoption of asc topic 606 on january 1 , 2018 , sales of third-party software and hardware were presented on a net basis , and as such , third-party software and hardware costs are no longer presented within cost of revenue in the current and prior year . our cost of services as a percentage of services revenues is affected by the utilization rates of our professionals ( defined as the percentage of our professionals ' time billed to clients divided by the total available hours in the respective period ) , the salaries we pay our professionals , and the average billing rate we receive from our clients . if a project ends earlier than scheduled , we retain professionals in advance of receiving project assignments , or demand for our services declines , our utilization rate will decline and adversely affect our cost of services as a percentage of services revenues . selling , general , and administrative expenses selling , general and administrative ( “ sg & a ” ) expenses are primarily composed of sales-related costs , general and administrative salaries , stock compensation expense , office costs , recruiting expense , variable compensation costs , marketing costs and other miscellaneous expenses . we have access to sales leads generated by our software vendors whose products we use to design and implement solutions for our clients . these relationships enable us to optimize our selling costs and sales cycle times and increase win rates through leveraging our partners ' marketing efforts and endorsements . plans for growth and acquisitions our goal is to continue to build one of the leading information technology consulting firms by expanding our relationships with existing and new clients and through the continuation of our disciplined acquisition strategy . our future growth plan includes expanding our business with a primary focus on customers in the united states , both organically and through acquisitions . we also intend to further leverage and expand our offshore capabilities to support our future growth and provide our clients flexible options for project delivery . when analyzing revenue growth by base business compared to acquired companies in the results of operations section below , revenue attributable to base business includes revenue from an acquired company that has been owned for a full four quarters after the date of acquisition . story_separator_special_tag third-party software and hardware revenues are recognized and invoiced when the company fulfills its obligation to arrange the sale , which occurs when the purchase order with the vendor is executed and the customer has access to the software or the hardware has been shipped to the customer . internally developed software revenues are recognized and invoiced when control is transferred to the customer , which occurs when the software has been made available to the customer and the license term has commenced . revenues from third-party software and hardware sales are recorded on a net basis , while revenues from internally developed software sales are recorded on a gross basis . there are no significant cancellation or termination-type provisions for the company 's software and hardware sales , and the term between invoicing and payment due date is not significant . arrangements with clients may contain multiple promises such as delivery of software , hardware , professional services or post-contract support services . these promises are accounted for as separate performance obligations if they are distinct . for arrangements with clients that contain multiple performance obligations , the transaction price is allocated to the separate performance obligations based on estimated relative standalone selling price , which is estimated by the expected cost plus a margin approach , taking into consideration market conditions and competitive factors . since the duration of contracts that contain multiple performance obligations is typically short given contract cancellation provisions , the allocation of the transaction price to the separate performance obligations is not considered a significant estimate . revenues are presented net of taxes assessed by governmental authorities . sales taxes are generally collected and subsequently remitted on all software and hardware sales and certain services transactions as appropriate . allowance for doubtful accounts is based upon specific identification of likely and probable losses . each accounting period , accounts receivable is evaluated for risk associated with a client 's inability to make contractual payments , historical experience and other currently available information . billed and unbilled receivables that are specifically identified as being at risk are provided for with a charge to revenue or bad debts as appropriate in the period the risk is identified . considerable judgment is used in assessing the ultimate realization of these receivables , including reviewing the financial stability of the client , evaluating the successful mitigation of service delivery disputes , and gauging current market conditions . if the evaluation of service delivery issues or a client 's ability to pay is incorrect , future reductions to revenue or bad debt expense may be incurred . purchase accounting and related fair value measurements the company allocates the purchase price , including contingent consideration , of our acquisitions to the assets and liabilities acquired , including identifiable intangible assets , based on their respective fair values at the date of acquisition . such fair market value assessments are primarily based on third-party valuations using assumptions developed by management that require significant judgments and estimates that can change materially as additional information becomes available . the purchase 28 price allocated to intangibles is based on unobservable factors , including but not limited to , projected revenues , expenses , customer attrition rates , royalty rates , a weighted average cost of capital , among others . the weighted average cost of capital uses a market participant 's cost of equity and after-tax cost of debt and reflects the risks inherent in the cash flows . the approach to valuing the initial contingent consideration associated with the purchase price also uses similar unobservable factors such as projected revenues and expenses over the term of the contingent earn-out period , discounted for the period over which the contingent consideration is measured , and volatility rates . based upon these assumptions , the initial contingent consideration is then valued using a monte carlo simulation . the company finalizes the purchase price allocation once certain initial accounting valuation estimates are finalized , and no later than 12 months following the acquisition date . convertible debt in accordance with accounting for debt with conversion and other options , the company bifurcated the principal amount of the notes issued on september 11 , 2018 into liability and equity components . the initial liability component of the notes was valued based on the contractual cash flows discounted at an appropriate comparable market non-convertible debt borrowing rate at the date of issuance of 5.7 % . the equity component representing the conversion option and calculated as the residual amount of the proceeds was recorded as an increase in additional paid-in capital within stockholders ' equity , partially offset by the associated deferred tax effect . the amount recorded within additional paid-in capital is not to be remeasured as long as it continues to meet the conditions for equity classification . the resulting debt discount is being amortized to interest expense using the effective interest method over the period from the issuance date through the contractual maturity date of september 15 , 2023. the company utilizes the treasury stock method to calculate the effects of the notes on diluted earnings per share . in connection with the issuance of the notes , the company entered into notes hedges with the option counterparties . the notes hedges provide the company with the option to acquire , on a net settlement basis , shares of common stock equal to the number of shares of common stock that notionally underlie the notes and corresponds to the conversion price of the notes . if the company elects cash settlement and exercises the notes hedges , the aggregate amount of cash received from the option counterparties will cover the aggregate amount of cash that the company would be required to pay to the holders of the notes , less the principal amount thereof . the notes hedges do not meet the criteria for separate accounting as a derivative as they are indexed to the

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

net cash provided by operating activities net cash provided by operating activities for the year ended december 31 , 2019 was $ 78.0 million compared to $ 68.6 million for the year ended december 31 , 2018 . for the year ended december 31 , 2019 , the components of operating cash flows were net income of $ 37.1 million plus net non-cash charges of $ 45.0 million and investments in net operating assets of $ 4.2 million . the primary components of operating cash flows for the year ended december 31 , 2018 were net income of $ 24.6 million plus net non-cash charges of $ 40.8 million and reductions in net operating assets of $ 3.2 million . net cash used in investing activities during the year ended december 31 , 2019 , we used $ 11.1 million for acquisitions and $ 9.3 million to purchase property and equipment and to develop software . during the year ended december 31 , 2018 , we used $ 26.6 million for acquisitions and $ 4.7 million to purchase property and equipment and to develop software . net cash ( used in ) provided by financing activities for the year ended december 31 , 2019 , we used $ 20.6 million to repurchase shares of our common stock through the stock repurchase program , used $ 7.3 million to remit taxes withheld as part of a net share settlement of restricted stock vesting and used $ 4.3 million to settle the contingent consideration for the purchase of southport . we also received proceeds from sales of stock through the employee stock purchase plan of $ 0.2 million . for the year ended december 31 , 2018 , we received $ 138.9 million of proceeds from the issuance of the notes , net of issuance costs , received $ 12.1 million of proceeds from the sale of the notes warrants and paid $ 20.7 million for the privately negotiated notes hedges .

these facility consolidation activities were completed during fiscal 2015 , therefore the increase in gross margin percentage in 2016 was primarily due to our on-going efforts to enhance operational efficiencies in the newly consolidated facilities and return gross margin percentage to historic averages . gross margin decreased 8.4 % to $ 558.4 million in fiscal 2015 as compared to $ 609.6 million in fiscal 2014 . as a percentage of sales , gross margin decreased to 47.7 % in fiscal 2015 from 49.8 % in fiscal 2014 . the decline in gross margin was due to increased costs related to facility consolidation activities in the americas due to duplicate labor and facilities expenses as well as operating inefficiencies following the facility moves , such as additional freight costs and excess inventory and scrap charges . research and development expenses decreased to $ 35.8 million in fiscal 2016 from $ 36.7 million in fiscal 2015 . the decrease in r & d spending in fiscal 2016 compared to the prior year was primarily due to efficiency gains within the r & d function and the strengthening of the u.s. dollar , which were partially offset by an increase in our investment in new products within the ids segment to drive top line growth . research and development expenses increased to $ 36.7 million in fiscal 2015 from $ 35.0 million in fiscal 2014 . the increase in r & d spending was a result of our innovation development initiative to realign the r & d processes in order to accelerate new 16 product innovation , increased investments in emerging technologies such as rfid and sensing technologies , and increased investments in other new products . selling , general and administrative ( “ sg & a ” ) expenses include selling costs directly attributed to the ids and wps segments , as well as administrative expenses including finance , information technology , human resources and legal . sg & a expenses decreased 4.2 % to $ 405.1 million in fiscal 2016 compared to $ 422.7 million in fiscal 2015 . the decrease in sg & a expense from the prior year is primarily due to the strengthening of the u.s. dollar , reduced amortization expense of $ 3.0 million and our continued efforts to control general and administrative costs , which were partially offset by an increase to incentive-based compensation . sg & a expense decreased to $ 422.7 million in fiscal 2015 compared to $ 452.2 million in fiscal 2014 . the decline was primarily due to the strengthening of the u.s. dollar , and to a lesser extent , reduced amortization expense of $ 5.8 million , an amendment to our u.s.-based post-retirement medical benefit plan that resulted in a $ 4.3 million curtailment gain , and our focused efforts to reduce expenses . this decline was partially offset by continued investments in sales personnel within the ids segment and increased spending in the wps segment for both on-line and traditional print advertising . in fiscal 2014 , the company announced a restructuring plan to consolidate facilities in the americas , europe and asia . the company implemented this restructuring plan to enhance customer service , improve efficiency of our operations and reduce operating expenses . restructuring activities related to facility consolidation activities extended into fiscal 2015 and were complete at the end of the fiscal year . in connection with this plan , the company incurred restructuring charges of $ 16.8 million in fiscal 2015. these charges consisted of $ 5.4 million of employee separation costs , $ 5.2 million of facility closure related costs , $ 2.0 million of contract termination costs , and $ 4.2 million of non-cash asset write-offs . the charges for employee separation costs consisted of severance pay , outplacement services , medical and other benefits . non-cash asset write-offs consisted mainly of fixed assets written off in conjunction with facility consolidations . of the $ 16.8 million recognized in fiscal 2015 , $ 12.1 million was incurred within the ids segment and $ 4.7 million was incurred within the wps segment . restructuring charges were $ 15.0 million in fiscal 2014 and consisted of $ 9.3 million of employee separation costs , $ 4.4 million of facility closure related costs , $ 1.0 million of contract termination costs , and $ 0.3 million of non-cash asset write-offs associated with the restructuring plan announced in february 2013 to reorganize into global product-based business platforms and reduce our global cost structure . of the $ 15.0 million recognized in fiscal 2014 , $ 9.0 million was incurred within the ids segment and $ 6.0 million was incurred within the wps segment . the company performed its annual goodwill impairment assessment on may 1 , 2016 , and subsequently concluded that the fair value of the goodwill was substantially in excess of its carrying value at 20 % or greater for all of the reporting units . no impairment charges were recorded in fiscal 2016. in conjunction with the goodwill impairment analysis , management also concluded that no other long-lived assets were impaired . the company 's annual goodwill impairment assessment performed in fiscal 2015 indicated the wps americas and wps apac reporting units were impaired . in conjunction with the goodwill impairment analysis , management concluded that other long-lived assets were impaired . impairment charges were $ 46.9 million in fiscal 2015 , which consisted of $ 37.1 million in goodwill charges associated with the wps americas and wps apac reporting units and $ 9.8 million related to the impairment of certain other long-lived assets . the company 's annual goodwill impairment assessment performed in fiscal 2014 indicated that the peopleid reporting unit was impaired . in conjunction with the goodwill impairment analysis , management concluded that other long-lived assets were impaired . story_separator_special_tag operating leases — the leases generally are entered into for investments in facilities such as manufacturing facilities , warehouses and office space , computer equipment and company vehicles . purchase commitments — the company has purchase commitments for materials , supplies , services , and property , plant and equipment as part of the ordinary conduct of its business . in the aggregate , such commitments are not in excess of current market prices and are not material to the financial position of the company . due to the proprietary nature of many of the company 's materials and processes , certain supply contracts contain penalty provisions for early termination . the company does not believe a material amount of penalties will be incurred under these contracts based upon historical experience and current expectations . other contractual obligations — the company does not have material financial guarantees or other contractual commitments that are reasonably likely to adversely affect liquidity . payments due under contractual obligations the company 's future commitments at july 31 , 2016 , for long-term debt , operating lease obligations , purchase obligations , interest obligations , tax obligations and other obligations are as follows ( dollars in thousands ) : replace_table_token_10_th ( 1 ) purchase obligations include all open purchase orders as of july 31 , 2016 . ( 2 ) other obligations represent expected payments under the company 's u.s. postretirement medical plan and international pension plans as disclosed in note 4 to the consolidated financial statements , under item 8 of this report . 24 inflation and changing prices essentially all of the company 's revenue is derived from the sale of its products and services in competitive markets . because prices are influenced by market conditions , it is not always possible to fully recover cost increases through pricing . changes in product mix from year to year , timing differences in instituting price changes , and the large amount of part numbers make it impracticable to accurately define the impact of inflation on profit margins . critical accounting estimates management 's discussion and analysis of the company 's financial condition and results of operations are based upon the company 's consolidated financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets , liabilities , revenues and expenses , and related disclosure of contingent assets and liabilities . the company bases these estimates and judgments on historical experience and on various other assumptions that are believed to be reasonable under the circumstances . actual results may differ from these estimates and judgments . the company believes the following accounting estimates are most critical to an understanding of its financial statements . estimates are considered to be critical if they meet both of the following criteria : ( 1 ) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made , and ( 2 ) material changes in the estimates are reasonably likely from period to period . for a detailed discussion on the application of these and other accounting estimates , refer to note 1 to the company 's consolidated financial statements . income taxes we operate in numerous taxing jurisdictions and are subject to regular examinations by u.s. federal , state and non-u.s. taxing authorities . our income tax positions are based on research and interpretations of the income tax laws and rulings in each of the jurisdictions in which we do business . due to the ambiguity of laws and rulings in each jurisdiction , the differences and interplay in tax laws between those jurisdictions , the uncertainty of how underlying facts may be construed and the inherent uncertainty in estimating the final resolution of complex tax audit matters , our estimates of income tax liabilities may differ from actual payments or assessments . while we have support for the positions we take on our tax returns , taxing authorities may assert interpretations of laws and facts and may challenge cross-jurisdictional transactions . the company generally re-evaluates the technical merits of its tax positions and recognizes an uncertain tax benefit when ( i ) there is completion of a tax audit ; ( ii ) there is a change in applicable tax law including a tax case ruling or legislative guidance ; or ( iii ) there is an expiration of the statute of limitations . the gross liability for unrecognized tax benefits , excluding interest and penalties , was $ 15.3 million and $ 21.1 million as of july 31 , 2016 and 2015 , respectively , of which the entire amount would reduce our effective income tax rate if recognized . accrued interest and penalties related to unrecognized tax benefits were $ 4.3 million and $ 4.2 million at july 31 , 2016 and 2015 , respectively . we recognize interest and penalties related to unrecognized tax benefits in income tax expense ( benefit ) on the consolidated statement of earnings . we believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $ 3.9 million in the next twelve months as a result of the resolution of worldwide tax matters , tax audit settlements , amended tax filings , and or statute expirations , which would be the maximum amount that would be recognized through the consolidated statements of earnings as an income tax benefit . we recorded a valuation allowance for a portion of our deferred tax assets related to net operating loss and tax credit carryforwards ( `` carryforwards `` ) and certain temporary differences in the amount of $ 38.0 million at july 31 , 2016 , and $ 39.9 million at july 31 , 2015 , based on the projected profitability of the entity in the respective tax

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

net cash used in investing activities was $ 15.4 million during fiscal 2016 , compared to $ 14.4 million in the prior year . current year capital expenditures were $ 17.1 million compared to $ 26.7 million in the prior year due to the completion of facility consolidation activities in fiscal 2015. prior year capital expenditures were offset by $ 6.2 million in cash received for certain assets sold as part of facility consolidation activities , and $ 6.1 million in net cash received from the die-cut divestiture . net cash used in financing activities was $ 99.6 million during fiscal 2016 , compared to $ 32.2 million during the prior year . the increase in cash used in financing activities was primarily due to improved operating performance and cash flow resulting in decreased net borrowings , which were partially offset by $ 23.6 million of share repurchases in fiscal 2016. the effect of fluctuations in exchange rates increased cash balances by $ 2.8 million in fiscal 2016 primarily due to cash balances held in currencies that appreciated against the u.s. dollar during the current fiscal year . fiscal 2015 vs. 2014 net cash provided by operating activities decreased slightly to $ 93.3 million during fiscal 2015 compared to $ 93.4 million in the prior year . the prior year results included discontinued operations , which generated approximately $ 2.7 million in cash from operating activities . therefore , there was an increase in cash flow from operating activities from continuing operations of $ 2.6 million . this increase was primarily due to a change in working capital of $ 36.0 million , largely offset by the decrease in segment profit of $ 33.4 million .

entegris derives most of its revenue from the sale of products and services to the semiconductor and related industries . the company 's customers consist primarily of semiconductor manufacturers , semiconductor equipment and materials suppliers as well as thin film transistor-liquid crystal display ( tft-lcd ) and hard disk manufacturers , which are served through direct sales efforts , as well as sales and distribution relationships , in the united states , asia , europe and the middle east . 37 the company offers a diverse product portfolio which includes more than 17,000 standard and customized products that it believes provide the most comprehensive offering of contamination control solutions and microenvironment products and services to maintain the purity and integrity of critical materials used by the semiconductor and other high-technology industries . certain of these products are unit-driven and consumable products that rely on the level of semiconductor manufacturing activity to drive growth , while others are capital-expenditure driven and rely on expansion of manufacturing capacity to drive growth . the company 's unit-driven and consumable products includes membrane-based liquid filters and housings , metal-based gas filters , resin-based gas purifiers , wafer shippers , disk-shipping containers and test assembly and packaging products and consumable graphite and silicon carbide components used in plasma etch , ion implant and chemical vapor deposition processes in semiconductor manufacturing . the company 's capital expense-driven products include components , systems and subsystems that use electro-mechanical , pressure differential and related technologies to permit semiconductor and other electronics manufacturers to monitor and control the flow and condition of process liquids used in these manufacturing processes , and process carriers that protect the integrity of in-process wafers . key operating factors key factors , which management believes have the largest impact on the overall results of operations of entegris , inc. , include : level of sales since a significant portion of the company 's product costs ( except for raw materials , purchased components and direct labor ) are largely fixed in the short-to-medium term , an increase or decrease in sales affects gross profits and overall profitability significantly . also , increases or decreases in sales and operating profitability affect certain costs such as incentive compensation and commissions , which are highly variable in nature . the company 's sales are subject to the effects of industry cyclicality , technological change , substantial competition , pricing pressures and foreign currency fluctuation . variable margin on sales the company 's variable margin on sales is determined by selling prices and the costs of manufacturing and raw materials . this is affected by a number of factors , which include the company 's sales mix , purchase prices of raw material ( especially polymers , stainless steel and purchased components ) , competition , both domestic and international , direct labor costs , and the efficiency of the company 's production operations , among others . fixed cost structure . the company 's operations include a number of large fixed or semi-fixed cost components , which include salaries , indirect labor and benefits , facility costs , lease expense , and depreciation and amortization . it is not possible to vary these costs easily in the short-term as volumes fluctuate . accordingly , increases or decreases in sales volume can have a large effect on the usage and productivity of these cost components , resulting in a large impact on the company 's profitability . overall summary of financial results for the year ended december 31 , 2012 the company 's financial results for 2012 reflected the lower capital spending levels and sluggish production rates in the semiconductor industry that began in the latter half of 2011. total net sales for the year ended december 31 , 2012 were $ 715.9 million , down $ 33.4 million , or 4 % , from sales of $ 749.3 million for the year ended december 31 , 2011. sales in 2012 showed modest quarterly growth from late 2011 levels before declining in the latter half of the year . the sales decrease in 2012 included unfavorable foreign currency translation effects of $ 8.5 million related to the year-over-year weakening of most international currencies versus the u.s. dollar , most notably the euro . excluding this factor , net sales fell approximately 3 % in 2012 when compared to 2011. the year-over-year sales decrease , along with a slightly unfavorable sales mix , accounted for lower gross profits in 2012. these factors , along with lower levels of factory utilization , underlie the gross margin rate for 2012 of 42.9 % compared to 43.5 % a year ago . 38 operating costs , consisting of selling , general and administrative ( sg & a ) and engineering , research and development ( er & d ) costs , increased 5 % for the year ended december 31 , 2012 when compared to the year-ago period . included in sg & a for the year ended december 31 , 2012 was a $ 3.9 million charge associated with a ceo succession and transition plan . the company 's effective tax rate was 31.0 % in 2012 compared to 3.3 % in 2011. tax expense in 2011 included a $ 41.0 million benefit associated with a decrease in the company 's u.s. deferred tax asset valuation allowance , primarily accounting for the year-to-year increase in the effective tax rate . as a result of the aforementioned factors , net income attributable to the company for 2012 was $ 68.8 million , or $ 0.50 per diluted share , compared to net income attributable to the company of $ 123.8 million , or $ 0.91 per diluted share , in 2011. during 2012 , the company 's operating activities provided cash flow of $ 115.2 million . story_separator_special_tag gross profit gross profit for 2012 decreased by $ 18.5 million , to $ 307.4 million , a decrease of 6 % from $ 325.9 million for 2011. the gross margin rate for 2012 was 42.9 % versus 43.5 % for 2011. the year-over-year sales decrease accounted for the company 's lower gross profit in 2012. the reduction in gross profit related to a slightly unfavorable sales mix was offset by improved levels of factory utilization , primarily at the company 's microenvironments segment , and higher royalty revenue . selling , general and administrative expenses selling , general and administrative ( sg & a ) expenses for 2012 increased $ 6.6 million , or 5 % , to $ 147.4 million from $ 140.8 million in 2011. sg & a expenses , as a percent of net sales , increased to 20.6 % from 18.8 % a year earlier , reflecting both the decrease in net sales and increase in sg & a expenditure levels . the increase in sg & a expenses includes a $ 3.9 million charge associated with compensation to which the company 's former chief executive officer was entitled in connection with a succession and transition plan , a $ 1.4 million increase in consultants ' fees , and a $ 1.3 million increase in the provision for bad debts . other employee costs , which make up about two-thirds of sg & a expenses , were flat as lower accruals for incentive compensation were offset by increases in other employee cost categories , most notably benefit costs . the increase in sg & a costs was partially offset by favorable foreign currency translation effects of $ 1.4 million . included in the twelve-month period ended december 31 , 2011 was a $ 0.7 million gain associated with the pension curtailment of the company 's japan defined benefit pension plan . refer to note 13 to the company 's consolidated financial statements for further discussion . 43 engineering , research and development expenses engineering , research and development ( er & d ) expenses related to the support of current product lines and the development of new products and manufacturing technologies increased by $ 3.0 million , or 6 % , to $ 50.9 million in 2012 compared to $ 48.0 million in 2011. er & d expenses as a percent of net sales were 7.1 % compared to 6.4 % a year ago , reflecting both the increase in er & d expenditure levels and decrease in net sales . the increase in er & d expense mainly reflects higher employee costs ( $ 0.6 million ) and a general increase in overall er & d expense levels related to the support of current product lines and the development of new products and manufacturing technologies . moving into 2013 , the company intends to invest in its core membrane and coatings technologies to continue to create differentiated and high-value , unit-driven products for the most advanced and demanding semiconductor applications . in addition , the company is committed to the er & d spending and capital investment needed to sustain its initiative in 450 mm wafer handling as that technology is adopted over the next several years . amortization of intangible assets amortization of intangible assets was $ 9.6 million in 2012 compared to $ 10.2 million for 2011. the decline reflects the absence of amortization expense for certain acquired developed technology and trade name assets that became fully amortized in 2011 or 2012. other income , net other income was $ 0.2 million in 2012 compared to other income of $ 1.7 million in 2011. in 2012 , other income includes a $ 1.5 million gain recorded in the second quarter related to the remeasurement of the previously held 50 % equity investment in a taiwan joint venture entity in which the company acquired a 100 % interest in april 2012. the other income was partially offset by $ 1.4 million of foreign currency transaction losses related to the remeasurement of yen-denominated assets and liabilities held by the company . in 2011 , other income primarily relates to a $ 1.5 million gain recorded in connection with the sale of an equity investment . income tax expense the company recorded income tax expense of $ 30.9 million in 2012 compared to an income tax expense of $ 4.2 million in 2011. the company 's effective tax rate was 31.0 % in 2012 , compared to 3.3 % in 2011. in 2012 , the company 's effective tax rate was lower than the u.s. statutory rate of 35 % primarily due to lower rates in various foreign jurisdictions compared to the u.s. statutory rate . in 2011 , the company 's effective tax rate was lower than the u.s. statutory rate of 35 % due mainly to the $ 41.0 million reduction of tax expense related to the decrease in the company 's deferred tax asset valuation allowance . management concluded it is more likely than not that the company would realize the u.s. net deferred tax assets and thereby released the valuation allowance on most of its u.s. deferred tax assets . the $ 41.0 million of benefit to tax expense comprises $ 19.8 million from the u.s. utilization of deferred tax assets during the year , $ 0.2 million from the utilization of foreign deferred tax assets and $ 21.0 million attributed to the release of the valuation allowance at december 31 , 2011. equity in net income of affiliates the company recorded equity in the net income of affiliates of $ 3 thousand in 2012 compared to equity in the net income of affiliates of $ 0.5 million in 2011. during 2012 , the company acquired the remaining 50 % of entegris precision technologies corporation ( ept ) in taiwan , an entity in which it had previously owned a 50 % equity interest accounted for under the equity method .

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources the company has historically financed its operations and capital requirements through cash flow from its operating activities , long-term loans , lease financing and borrowings under domestic and international short-term lines of credit . in fiscal 2000 and 2009 , the company raised capital via public offerings of its common stock . operating activities net cash flow provided by operating activities totaled $ 115.2 million for the year ended december 31 , 2012. cash generated by the company 's operations included net income of $ 68.8 million , as adjusted for the impact of various non-cash charges , primarily depreciation and amortization of $ 37.6 million and share-based 51 compensation expense of $ 9.9 million . the net impact on cash flow from operations from changes in operating assets reduced cash otherwise generated by the company 's operations . working capital was $ 486.1 million at december 31 , 2012 , which included $ 350.4 million in cash and cash equivalents and short-term investments , an increase from $ 410.4 million as of december 31 , 2011 , which included $ 273.6 million in cash and cash equivalents . accounts receivable decreased by $ 13.2 million during 2012 , or $ 10.6 million net of foreign currency translation adjustments . this decrease reflects the year-over-year decline sales of the company 's products and an improvement in the company 's collections as reflected in its days sales outstanding measure ( dso ) . the company 's dso was 51 days at december 31 , 2012 compared to 60 days at the beginning of the year . inventories at december 31 , 2012 increased by $ 5.2 million from a year earlier , or $ 6.1 million after taking into account the impact of foreign currency translation adjustments and the provision for excess and obsolete inventory . the increase mainly reflects higher levels of finished goods . accounts payable and accrued expenses were $ 9.2 million higher than a year ago , or $ 6.3 million net of foreign currency translation adjustments .

41 business results and highlights in 2012 , activision blizzard 's consolidated net revenues were $ 4.9 billion and consolidated net income was $ 1.1 billion , resulting in diluted earnings per common share of $ 1.01. the company grew net revenues , operating income , and earnings per share as compared to 2011. we also generated $ 1.3 billion in cash from operating activities in 2012. also , according to the npd group with respect to north america , gfk chart-track with respect to europe , and activision blizzard internal estimates , during 2012 : in north america and europe combined , including toys and accessories , activision publishing was the # 1 console and handheld publisher for the calendar year with the # 1 and # 3 best-selling franchises—call of duty® and skylanders . activision blizzard reported record digital revenues for the calendar year and was the # 1 third-party interactive entertainment western digital publisher . for the calendar year , in aggregate across all platforms in the u.s. and europe , activision publishing 's call of duty : black ops ii was the # 1 best-selling title in dollars and call of duty : modern warfare® 3 was the # 9 best-selling title in dollars . in both north america and europe , including toys and accessories , skylanders giants™ was the # 1 best-selling kids ' title in dollars for the fourth quarter . additionally , for the calendar year , in north america and europe combined , including toys and accessories , skylanders giants was the # 5 best-selling game in dollars , and skylanders spyro 's adventure® was the # 4 best-selling game in dollars . for the calendar year , blizzard entertainment had two top-10 pc games in north america and europe . diablo iii was the # 1 best-selling pc game at retail , breaking pc-game sales records with more than 12 million copies sold worldwide through december 31 , 2012 , and world of warcraft : mists of pandaria® was the # 3 best-selling pc game at retail . product release highlights the following games and content packs , among other titles , were released during the year ended december 31 , 2012 : 007™ legends family guy : back to the multiverse angry birds™ trilogy ice age™ continental drift arctic games battleship® men in black : alien crisis™ cabela's® dangerous hunts 2013 prototype® 2 cabela 's hunting expeditions skylanders giants call of duty : black ops ii the amazing spider-man™ call of duty modern warfare 3 content collection # 1 transformers™ : fall of cybertron™ call of duty : modern warfare 3 content collection # 2 transformers prime™ call of duty : modern warfare 3 content collection # 3 wipeout 3 call of duty : modern warfare 3 content collection # 4 world of warcraft : mists of pandaria diablo iii on january 29 , 2013 , activision released revolution , the first downloadable map pack for call of duty : black ops ii , ( `` revolution `` ) on the xbox 360. revolution is expected to be available on other platforms during the first quarter of 2013 . 42 starcraft ii : heart of the swarm™ , the first expansion to blizzard 's real-time strategy game starcraft ii : wings of liberty® , is expected to be available in stores and online beginning march 12 , 2013. international operations international sales are a fundamental part of our business . net revenues from international sales accounted for approximately 50 % , 50 % , and 46 % of our total consolidated net revenues for the years ended december 31 , 2012 , 2011 and 2010 , respectively . we maintain significant operations in the united states ( `` u.s. `` ) , canada , the united kingdom ( `` u.k. `` ) , france , germany , ireland , italy , sweden , spain , the netherlands , australia , south korea and china . an important element of our international strategy is to develop content that is specifically directed toward local cultures and customs . our international business is subject to risks typical of an international business , including , but not limited to , foreign currency exchange rate volatility and changes in local economies . accordingly , our future results could be materially and adversely affected by changes in foreign currency exchange rates and changes in local economies . management 's overview of business trends online content and digital downloads we provide our products through both retail channels and digital online delivery methods . many of our video games that are available through retailers as physical `` boxed `` software products , such as dvds , are also available by direct digital download over the internet ( both from websites that we own and from others owned by third parties ) . in addition , we offer players downloadable content as add-ons to our products ( e.g . , new multi-player content packs ) , generally for a one-time fee . we also offer subscription-based services for world of warcraft , which are digitally delivered and hosted by blizzard 's proprietary online-game related service , battle.net . in 2011 , activision launched call of duty elite , a digital service that provides both free and paid subscription-based content and features for call of duty : modern warfare 3 . in conjunction with the release of call of duty : black ops ii , all of the call of duty elite service features for that game were made available for free . this free service does not include downloadable map packs , which are sold separately , either a la carte as individual map packs or as part of a discounted season pass bundle . story_separator_special_tag activision 's operating income increased in 2011 as compared to 2010 , primarily due to a more focused release of products that delivered higher operating margins ; increased digital sales of call of duty 's digital content , resulting in high operating margins ; and reduction of operating expenses resulting from the 2011 restructuring . these positive impacts on operating income were partially offset by an increase in sales and marketing expenses to support the launch of skylanders spyro 's adventure , call of duty : modern warfare 3 and call of duty elite and additional litigation activities and settlement of lawsuits . blizzard blizzard 's operating income increased in 2012 as compared to 2011 , primarily due to higher revenues as described above . the increase was partially offset by higher cost of sales as a result of higher net revenues , higher sales and marketing costs to support the launch of diablo iii and world of warcraft : mists of pandaria , and higher general and administrative costs from additional accrued bonuses reflecting our strong 2012 financial performance . blizzard 's operating income decreased in 2011 as compared to 2010 , primarily due to lower revenues as discussed above . these negative impacts on operating income were partially offset by a decrease in sales and marketing expenses , as higher sales and marketing expenses were incurred in 2010 to support the release of starcraft ii : wings of liberty in the third quarter and world of warcraft : cataclysm in the fourth quarter ; and lower customer support costs incurred . non-gaap financial measures the analysis of revenues by distribution channel is presented both on a gaap ( including the impact from change in deferred revenues ) and non-gaap ( excluding the impact from change in deferred revenues ) basis . we use this non-gaap measure internally when evaluating our operating performance , when planning , forecasting and analyzing future periods , and when assessing the performance of our management team . we believe this is appropriate because this non-gaap measure enables an analysis of performance based on the timing of actual transactions with our customers , 49 which is consistent with the way the company is measured by investment analysts and industry data sources , and facilitates comparison of operating performance between periods . in addition , excluding the impact from change in deferred net revenue provides a much more timely indication of trends in our sales and other operating results . while we believe that this non-gaap measure is useful in evaluating our business , this information should be considered as supplemental in nature and is not meant to be considered in isolation from , as a substitute for , or as more important than , the related financial information prepared in accordance with gaap . in addition , this non-gaap financial measure may not be the same as any non-gaap measure presented by another company . this non-gaap financial measure has limitations in that it does not reflect all of the items associated with our gaap revenues . we compensate for the limitations resulting from the exclusion of the change in deferred revenues by considering the impact of that item separately and by considering our gaap , as well as non-gaap , revenues . results of operations—years ended december 31 , 2012 , 2011 , and 2010 non-gaap financial measures the following table provides reconciliation between gaap and non-gaap net revenues by distribution channel for the years ended december 31 , 2012 , 2011 , and 2010 ( amounts in millions ) : replace_table_token_8_th ( 1 ) we currently define revenues from digital online channels as revenues from subscriptions and memberships , licensing royalties , value-added services , downloadable content , and digitally distributed products . ( 2 ) we have determined that some of our game 's online functionality represents an essential component of gameplay and as a result a more-than-inconsequential separate deliverable . as such , we are required to recognize the revenues of these game titles over the estimated service periods , which may range from a minimum of five months to a maximum of less than a year . in the table above , we present the amount of net revenues for each period as a result of this accounting treatment . ( 3 ) total non-gaap net revenues presented also represents our total operating segment net revenues . 50 the increase in gaap net revenues from retail channels for 2012 as compared to 2011 was the result of sales from the skylanders franchise ( both from the launch of skylanders giants in the fourth quarter of 2012 and the full-year revenues from skylanders spyro 's adventure , which was launched in the fourth quarter of 2011 ) and revenues from diablo iii and world of warcraft : mists of pandaria . the increase was partially offset by lower catalog sales of call of duty and other titles , and lower catalog revenues generated from world of warcraft : cataclysm and starcraft ii : wings of liberty , which were released in 2010. the increase in gaap net revenues from retail channels for 2011 as compared to 2010 was the result of the strong performance of the call of duty franchise , recognition of deferred revenues from the 2010 launches of starcraft ii : wings of liberty and world of warcraft : cataclysm , and revenues generated from the launch of skylanders spyro 's adventure , partially offset by the release of fewer key titles . the decrease in gaap net revenues from digital online channels for 2012 as compared to 2011 was primarily due to lower revenues from world of warcraft subscriptions and lower net revenues from call of duty downloadable content packs released in 2012 for call of duty : modern warfare 3 , in comparison to downloadable content packs released in 2011 for call of duty® : black ops . the decrease was partially offset by the full

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources sources of liquidity ( amounts in millions ) replace_table_token_21_th replace_table_token_22_th cash flows provided by operating activities the primary drivers of cash flows provided by operating activities included the collection of customer receivables generated by the sale of our products and digital and subscription revenues , partially offset by payments to vendors for the manufacturing , distribution and marketing of our products , payments to third-party developers and intellectual property holders , tax liabilities , and payments to our workforce . a significant operating use of our cash relates to our continued focus on customer service for our subscribers and investment in software development and intellectual property licenses . cash flows provided by operating activities were higher for 2012 as compared to 2011 , and were lower for 2011 as compared to 2010. our source of cash inflow varies with our release schedule . for example , blizzard 's major releases of starcraft ii and world of warcraft : cataclysm during 2010 , and blizzard 's major releases of diablo iii and world of warcraft : mist of pandaria during 2012 contributed to the higher cash inflows for 2010 and 2012 as compared to 2011 , when there were no major releases from blizzard . additionally , the strong performance of activision 's skylanders franchise and call of duty : black ops ii contributed to strong operating cash flows in 2012. cash flows provided by ( used in ) investing activities the primary drivers of cash flows used in investing activities have typically included capital expenditures , acquisitions and the net effect of purchases and sales/maturities of short-term investments . cash flows provided by investing activities were lower for 2012 as compared to 2011 , primarily due to decreased proceeds from the maturity of investments , partially offset by higher purchases of short-term investments . in 2012 , proceeds from the maturity of investments were $ 444 million , the majority of which consisted of u.s. treasury and other government agency securities , while the purchase of short-term investments totaled $ 503 million . further , capital expenditures , primarily related to property and equipment , were $ 73 million .

our cguard eps received ce mark approval in the european union in march 2013 , and we launched its release on a limited basis in october 2014. in january 2015 , a new version of cguard , with a rapid exchange delivery system , received ce mark approval in europe and in september 2015 , we announced the full market launch of cguard eps in europe . subsequently , we launched cguard eps in russia and certain countries in latin america and asia , and , in january 2018 , received regulatory approval to commercialize cguard eps in india . if we receive sufficient proceeds from future financings , we plan to develop cguard eps with a smaller delivery catheter ( 5 french gauge ) , which we intend to submit for ce mark approval within three calendar quarters of receiving such proceeds . we can not give any assurance that we will receive sufficient ( or any ) proceeds from any such financings or the timing of such financings , if ever . in addition , such additional financings may be costly or difficult to complete . 49 our mguard prime eps is marketed for use in patients with acute coronary syndromes , notably acute myocardial infarction ( heart attack ) and saphenous vein graft coronary interventions ( bypass surgery ) . mguard prime eps combines micronet with a bare-metal cobalt-chromium based stent . we market and sell mguard prime eps for the treatment of coronary disease in the european union . mguard prime eps received ce mark approval in the european union in october 2010 for improving luminal diameter and providing embolic protection . however , as a result of a shift in industry preferences away from bare-metal stents in favor of drug-eluting ( drug-coated ) stents , in 2014 we decided to curtail further development of this product in order to focus on the development of a drug-eluting stent product , mguard des . due to limited resources , though , our efforts have been limited to testing drug-eluting stents manufactured by potential partners for compatibility with micronet and seeking to incorporate micronet onto a drug-eluting stent manufactured by a potential partner . we are also developing a neurovascular flow diverter , nguard , which is an endovascular device that directs blood flow away from cerebral aneurysms in order to ultimately seal the aneurysms . our flow diverter would utilize an open cell , highly flexible metal scaffold to which micronet would be attached . we have completed initial pre-clinical testing of this product in both simulated bench models and standard in vivo pre-clinical models . however , as we plan to focus our resources on the further expansion of our sales and marketing activities for cguard eps and mguard prime eps and , provided that we have sufficient resources , the development of cguard eps with a smaller delivery catheter ( 5 french gauge ) and its submission for ce mark approval , we do not intend to resume further development of nguard until at least the third quarter of 2018. we also intend to develop a pipeline of other products and additional applications by leveraging our micronet technology to new applications to improve peripheral vascular and neurovascular procedures , such as the treatment of the superficial femoral artery disease , vascular disease below the knee and neurovascular stenting to seal aneurysms in the brain . presently , none of our products may be sold or marketed in the united states . recent events effective as of 5:00 p.m. eastern time on february 7 , 2018 , we amended our certificate of incorporation in order to effectuate a 1-for-35 reverse stock split of our outstanding shares of common stock . critical accounting policies we prepared our consolidated financial statements in accordance with u.s. generally accepted accounting principles ( “ u.s . gaap ” ) . u.s. gaap represents a comprehensive set of accounting and disclosure rules and requirements , and applying these rules and requirements requires management judgments and estimates including , in certain circumstances , choices between acceptable u.s. gaap alternatives . the following is a discussion of our most critical accounting policies , judgments and uncertainties that are inherent in our application of u.s. gaap . use of estimates the preparation of financial statements in conformity with u.s. gaap requires management to make estimates using assumptions that affect the reported amounts of assets and liabilities , the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods . actual results could differ from those estimates . 50 as applicable to these consolidated financial statements , the most significant estimates and assumptions relate to inventory valuations , share-based compensation and legal contingencies . functional currency the currency of the primary economic environment in which our operations and the operations of our subsidiaries are conducted is the u.s. dollar ( “ $ ” or “ dollar ” ) . accordingly , our and our subsidiaries ' functional currency is the u.s. dollar . the dollar figures are determined as follows : transactions and balances originally denominated in dollars are presented in their original amounts . balances in foreign currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances , respectively . the resulting translation gains or losses are recorded as financial income or expense , as appropriate . for transactions reflected in the statements of operations in foreign currencies , the exchange rates at transaction dates are used . depreciation and changes in inventories and other changes deriving from non-monetary items are based on historical exchange rates . story_separator_special_tag cash provided by financing activities for the twelve months ended december 31 , 2017 was $ 4,633,000 , compared to $ 11,703,000 during the same period in 2016. the principal source of the cash provided by financing activities during the twelve months ended december 31 , 2017 , was the funds received from our march 2017 offering of preferred stock and warrants that resulted in approximately $ 6,072,000 of aggregate net proceeds , as well as funds received from the november 2017 series d private placement that resulted in approximately $ 750,000 of aggregate net proceeds , offset by loan repayments of $ 2,179,000. the principal source of the cash provided by financing activities during the twelve months ended december 31 , 2016 was the funds received from the issuance of preferred stock and warrants in a public offering closed on july 7 , 2016 , as well issuance of shares and warrants in a concurrent public offering and private placement closed on march 21 , 2016 , for approximately $ 14,365,000 of net proceeds , offset by loan repayments of $ 2,648,000. as of december 31 , 2017 , our current assets exceeded our current liabilities by a multiple of 2.1. current assets decreased by $ 3,477,000 during the period and current liabilities decreased by $ 2,296,000 during the period . as a result , our working capital decreased by $ 1,181,000 to $ 2,673,000 at december 31 , 2017. off balance sheet arrangements we have no off-balance sheet transactions , arrangements , obligations ( including contingent obligations ) , or other relationships with unconsolidated entities or other persons that have , or may have , a material effect on our financial condition , changes in financial condition , revenues or expenses , results of operations , liquidity , capital expenditures or capital resources . recent accounting pronouncements in july 2017 , the fasb issued asu 2017-11 , earnings per share ( topic 260 ) ; distinguishing liabilities from equity ( topic 480 ) ; derivatives and hedging ( topic 815 ) : ( part i ) accounting for certain financial instruments with down round features , ( part ii ) replacement of the indefinite deferral for mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests with a scope exception . asu 2017-11 allows companies to exclude a down round feature when determining whether a financial instrument ( or embedded conversion feature ) is considered indexed to the entity 's own stock . as a result , financial instruments ( or embedded conversion features ) with down round features may no longer be required to be accounted for as derivative liabilities . a company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward . for equity-classified freestanding financial instruments , an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share . for convertible instruments with embedded conversion features containing down round provisions , entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings . the guidance in asu 2017-11 is effective for fiscal years beginning after december 15 , 2018 , and interim periods within those fiscal years . early adoption is permitted , and the guidance is to be applied using a full or modified retrospective approach . we are currently evaluating the impact this asu will have on our consolidated financial statements . 56 the fasb has issued the following standards that we have determined will not have a material impact on its consolidated financial statements upon their adoption : in may 2017 , the fasb issued asu 2017-9 on changes to terms and conditions of share-based payment awards . the amendment provides guidance about which changes to terms or conditions of a share-based payment award require an entity to apply modification accounting . the guidance is effective for the fiscal year beginning on january 1 , 2018 , including interim periods within that year ( early adoption is permitted ) . we do not anticipate that such guidance will have a material impact on our consolidated financial statements . in may 2014 , the fasb issued accounting standards codification ( “ asc ” ) 606 , revenue from contracts with customers . the objective of the new revenue standard is to provide a single , comprehensive revenue recognition model for all contracts with customers to improve comparability within industries , across industries , and across capital markets . the revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized . the underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services , based on a five step model that includes the identification of the contract with the customer and the performance obligations in the contract , determination of the transaction price , allocation of the transaction price to the performance obligations in the contract and recognizing revenue when ( or as ) the entity satisfies a performance obligation . the revenue standard is effective for annual periods beginning on or after december 15 , 2017. we will adopt the standard using the modified retrospective method . in january 2016 , the fasb issued asu 2016-01 , recognition and measurement of financial assets and financial liabilities , which addresses certain aspects of recognition , measurement , presentation and disclosure of financial instruments . the new standard is effective for annual periods and interim periods beginning after december 15 , 2017 , and upon adoption , an entity should apply the amendments by means of a cumulative-effect adjustment to the balance

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources we had an accumulated deficit as of december 31 , 2017 of $ 140 million , as well as a net loss of $ 8,438,000 and negative operating cash flows . we expect to continue incurring losses and negative cash flows from operations until our products ( primarily cguard eps ) reach commercial profitability . as a result of these expected losses and negative cash flows from operations , along with our current cash position , we only have sufficient resources to fund operations for a period of up to four months from the date of filing of this annual report on form 10-k. therefore , there is substantial doubt about our ability to continue as a going concern . our plans include the continued commercialization of our products and raising capital through the sale of additional equity securities , debt or capital inflows from strategic partnerships . there are no assurances , however , that we will be successful in obtaining the level of financing needed for our operations . if we are unsuccessful in commercializing our products and raising capital , we may need to reduce activities , curtail or cease operations . on october 23 , 2013 , we entered into a loan and security agreement with hercules technology growth capital , inc. ( “ hercules ” ) , which was subsequently amended on november 19 , 2013 , july 23 , 2014 , and june 13 , 2016 , pursuant to which we received a loan of $ 10 million , before deduction of issuance costs . interest on the loan was determined on a daily basis at a variable rate equal to the greater of either ( i ) 10.5 % , or ( ii ) the sum of ( a ) 10.5 % plus ( b ) the prime rate minus 5.5 % .

the european commission has granted orphan drug designation to eg-1962 for treatment of asah . in july 2016 , we commenced the phase 3 newton 2 study for eg-1962 . newton 2 is a multi-center , multi-national , randomized , double-blind , placebo-controlled , parallel-group study comparing the efficacy and safety of eg-1962 to standard of care oral nimodipine in adults with an asah . the primary endpoint of the newton 2 study is the proportion of subjects with a favorable clinical outcome ( a score of 6 – 8 on the gose ) at day 90. the key secondary endpoint is the subject 's score on moca . we expect the results of an interim analysis of newton 2 to be completed in early 2018. depending on the results of the interim analysis , the study may continue to full data readout , in which case we expect the results of the study to be available in late 2018. the final results of the newton 2 study , if positive , are expected to form the basis for a marketing application to the fda and other global health regulatory authorities for the approval of eg-1962 for the treatment of asah . in the united states , we plan to use the fda section 505 ( b ) ( 2 ) regulatory pathway . our phase 1/2 clinical study of eg-1962 in north america , which we refer to as our newton north america study , met its primary and secondary endpoints of safety , tolerability , defining the mtd and pharmacokinetics . the results of the principal exploratory efficacy endpoint from the 90-day follow-up demonstrated that 60 % ( 27 of 45 ) of patients treated with eg-1962 experienced a favorable clinical outcome ( a score of 6-8 on the gose ) versus 28 % ( 5 of 18 ) of patients treated with the standard of care oral nimodipine . at the final assessment , of the 45 patients treated with eg-1962 , 29 % ( 13 of 45 ) of patients achieved the highest clinical outcome score ( gose=8 , upper good recovery ) versus 6 % ( 1 of 18 ) patients treated with the standard of care oral nimodipine . a phase 1 study of the safety , pharmacokinetics and clinical outcomes of eg-1962 administered intracisternally , or directly into the basal cisterns of the brain is open for enrollment for patients with asah who do not receive an evd but remain at risk for delayed neurological complications following surgical repair of a ruptured aneurysm . this study is a multicenter , randomized , controlled , open-label study in which nine patients are expected to receive eg-1962 via intracisternal administration and three patients are expected to receive standard of care oral nimodipine . we expect data to be available from this study during 2017. in addition to eg-1962 , we are using our precisa development platform to develop additional product candidates targeting other acute , serious conditions where limited or no current approved therapies exist . we are developing our second product candidate , eg-1964 , as a prophylactic treatment in the management of csdh , to prevent recurrent bleeding on the surface of the brain . a csdh is a liquefied hematoma that has accumulated on the surface of the brain in an area referred to as the subdural space and is often caused by minor head trauma . following neurosurgical intervention to drain the hematoma , bleeding in the subdural space typically recurs in 3 % to 33 % of patients at which point another costly and risky surgical intervention is required . eg-1964 contains aprotinin , a serine protease inhibitor isolated from the lungs and pancreas which was approved to reduce bleeding after cardiac surgery . aprotinin works by slowing the breakdown of blood clots . we are in the process of formulating eg-1964 to deliver a high concentration of aprotinin directly to the subdural space by way of a single administration at the time of initial neurosurgical intervention with sustained drug exposure over 21 to 28 days . if approved , we expect that eg-1964 can become the standard of care as a prophylactic treatment in the management of csdh to prevent recurrent bleeding . we intend to complete formulation development activities and commence non-clinical studies of eg-1964 in 2017. based on the results of those studies , in 2018 , we may submit to the fda a request for authorization to investigate a new drug in human clinical studies , known as an ind , for eg-1964 . from our inception in 2009 , we have devoted substantially all of our efforts to business planning , engaging regulatory , manufacturing and other technical consultants , developing operating assets , planning and executing clinical trials and raising capital . we have never been profitable and have incurred net losses in each year since inception . our net losses were $ 38.8 million , $ 28.1 million and $ 12.2 million for the years ended december 31 , 2016 , 2015 and 2014 respectively . as of december 31 , 2016 , we had an accumulated deficit of approximately $ 101.0 million . substantially all of our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations . we expect to continue to incur significant expenses and increasing operating losses for at least the next several years . our net losses may fluctuate significantly from quarter to quarter and year to year . story_separator_special_tag cash used in investing activities was $ 0.7 million , $ 1.3 million and $ 0.9 million for the years ended december 31 , 2016 , 2015 and 2014 , respectively , which in each period relates entirely to purchases of property and equipment . net cash provided by financing activities net cash provided by financing activities of $ 9.1 million for the year ended december 31 , 2016 was primarily due to the receipt of net proceeds from the issuance of debt of $ 10.8 million less payments of our existing debt obligations of $ 1.5 million and deferred offering costs of $ 0.5 million . net cash provided by financing activities of $ 139.5 million for the year ended december 31 , 2015 was primarily due to the proceeds from the issuance of common stock of $ 82.8 million , preferred stock of $ 52.4 million and debt of $ 3.0 million . net cash provided by financing activities of $ 16.5 million for the year ended december 31 , 2014 was primarily due to the proceeds from sales of our preferred stock $ 14.9 million and debt of $ 3.0 million . operating capital requirements we expect that our primary uses of capital will continue to be third-party clinical research , development and manufacturing services , compensation and related expenses , laboratory and related supplies , legal and other regulatory expenses and general administrative costs . we believe that our existing cash and cash equivalents as of december 31 , 2016 , will be sufficient to meet our anticipated cash requirements through the full data readout of the newton 2 trial of eg-1962 for the treatment of asah which is anticipated to occur in late 2018. our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties , and actual results could vary materially as a result of a number of factors . we have based this estimate on assumptions that may prove to be wrong , and we could utilize our available capital resources sooner than we currently expect . our future capital requirements are difficult to forecast and will depend on many factors , including : page | 69 index the initiation , progress , timing , costs and results of the clinical trials for our product candidates to meet regulatory approval , particularly whether the fda requires us to complete a second phase 3 trials for eg-1962 or requires changes to the anticipated design of our phase 3 program for eg-1962 , such as changes in the required control arm of any such trial ; the outcome of planned interactions with the fda and other non-u.s. health authorities that may alter our proposed phase 3 program for eg-1962 that is required to meet the standards of a marketing authorization approval in asah ; the clinical development plans we establish for these product candidates ; the number and characteristics of product candidates that we develop or may acquire or in-license ; the cost of filing , prosecuting , defending and enforcing our patent claims and other intellectual property rights ; the cost of defending intellectual property disputes , including patent infringement actions brought by third parties against us or our product candidates ; the effect of competing technological and market developments ; the cost and timing of completion of both clinical and commercial-scale manufacturing activities , which may be outsourced ; and the cost of establishing sales , marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own . please see the section titled “ risk factors ” elsewhere in this annual report for additional risks associated with our substantial capital requirements . until such time , if ever , that we generate product revenue , we expect to finance our cash needs through a combination of public or private equity offerings , debt financings and research collaboration and license agreements . we may be unable to raise capital or enter into such other arrangements when needed or on favorable terms or at all . our failure to raise capital or enter into such other arrangements as and when needed may have a negative impact on our financial condition and our ability to develop our product candidates . contractual obligations and commitments the following is a summary of our contractual obligations as of the date indicated : replace_table_token_9_th this table above does not include ( a ) any milestone payments which may become payable to third parties under our license agreements as the timing and likelihood of such payments are not known , or ( b ) contracts that are entered into in the ordinary course of business which are not material in the aggregate in any period presented above . purchase commitments we have no material non-cancelable purchase commitments with service providers as we have generally contracted on a cancelable , purchase order basis . page | 70 index milestone and royalty-based commitments pursuant to the evonik agreement , in exchange for the license , the company agreed to make milestone payments totaling up to $ 14.75 million upon the achievement of certain development , regulatory and sales milestones detailed in the evonik agreement . we paid $ 0.25 million upon execution of the evonik agreement . in august 2016 , we paid a milestone of $ 1.0 million after we dosed the first patient in the phase 3 clinical trial of eg-1962 . in addition , the evonik agreement calls for the company to pay royalties on sales of certain products based on a mid-single digit percentage of net sales . the evonik agreement provides for the reduction of royalties in certain circumstances . jobs act on april 5 , 2012 , the jobs act was enacted . section 107 of the jobs act provides that an “ emerging

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources since our inception and through december 31 , 2016 , we have raised aggregate net proceeds of $ 185.5 million to fund our operations , primarily $ 82.8 million from the sale of common stock in our ipo , $ 87.5 million from the sale of preferred stock and $ 15.0 million from a loan . as of december 31 , 2016 , we had total cash and cash equivalents of $ 106.4 million as compared to $ 130.2 million as of december 31 , 2015. the $ 23.8 million decrease in total cash , net of proceeds from new debt of $ 10.8 million , was due primarily to funding of operations , which mainly consisted of research and development activities , general and administrative expenses and payments for debt principal reduction offset by proceeds from the issuance of debt . on october 6 , 2015 , we completed the ipo of our common stock for aggregate gross proceeds of approximately $ 92.5 million . we received approximately $ 82.8 million in net proceeds after deducting underwriting discounts and commissions and other offering costs of approximately $ 9.7 million . in connection with the ipo , all preferred stock was converted into common stock . there is no preferred stock outstanding as of december 31 , 2016 , nor are there any preferred stock dividends accrued or payable . hercules loan and security agreement on august 28 , 2014 , we entered into a loan and security agreement with hercules technology growth capital , inc. , ( the “ original loan agreement ” ) . the original loan agreement provided funding for an aggregate principal amount of up to $ 10.0 million in three separate term loans . the first term loan was funded on august 28 , 2014 in the amount of $ 3.0 million .

the surcharge mechanism protects our net income on such sales except for the lag effect discussed above . however , surcharges have had a dilutive effect on our gross margin and operating margin percentages as described later in this report . approximately 25 percent of our net sales are sales to customers under firm price sales arrangements . firm price sales arrangements involve a risk of profit margin fluctuations , particularly when raw material prices are volatile . in order to reduce the risk of fluctuating profit margins on these sales , we enter into commodity forward contracts to purchase certain critical raw materials necessary to produce the related products sold . firm price sales arrangements generally include certain annual purchasing commitments and consumption schedules agreed to by the customers at selling prices based on raw material prices at the time the arrangements are established . if a customer fails to meet the volume commitments ( or the consumption schedule deviates from the agreed-upon terms of the firm price sales arrangements ) , the company may need to absorb the gains or losses associated with the commodity forward contracts on a temporary basis . gains or losses associated with commodity forward contracts are reclassified to earnings/loss when earnings are impacted by the hedged transaction . because we value most of our inventory under the lifo costing methodology , changes in the cost of raw materials and production activities are recognized in cost of sales in the current period attempting to match the most recently incurred costs with revenues . gains and or losses on the commodity forward contracts are reclassified from other comprehensive income together with the actual purchase price of the underlying commodities when the underlying commodities are purchased and recorded in inventory . to the extent that the total purchase price of the commodities , inclusive of the gains or losses on the commodity forward contracts , are higher or lower relative to the beginning of year costs , our cost of goods sold reflects such amounts . accordingly , the gains and or losses associated with commodity forward contracts may not impact the same period that the firm price sales arrangements revenue is recognized , and comparisons of gross profit from period to period may be impacted . these firm price sales arrangements are expected to continue as we look to strengthen our long-term customer relationships by expanding , renewing and , in certain cases , extending to a longer term , our customer long-term arrangements . we produce hundreds of grades of materials , with a wide range of pricing and profit levels depending on the grade . in addition , our product mix within a period is subject to the fluctuating order patterns of our customers as well as decisions we may make on participation in certain products based on available capacity including the impacts of capacity commitments we may have under existing customer agreements . while we expect to see positive contribution from a more favorable product mix in our margin performance over time , the impact by period may fluctuate , and period to period comparisons may vary . net pension expense net pension expense , as we define it below , includes the net periodic benefit costs related to both our pension and other postretirement plans . the net periodic benefit costs are determined annually based on beginning of year balances and are recorded ratably throughout the fiscal year , unless a significant re-measurement event occurs . the following is a summary of the net periodic benefit costs for the years ended june 30 , 2019 , 2018 and 2017 : replace_table_token_8_th in september 2016 , we announced changes to retirement plans we offer to certain employees . benefits accrued to eligible participants of our largest qualified defined benefit pension plan and certain non-qualified pension plans were frozen effective december 31 , 2016. approximately 1,900 affected employees were transitioned to the company 's 401 ( k ) plan that has been in effect for eligible employees since 2012 , when the pension plan was closed to new entrants . we recognized the plan freeze during fiscal year 2017 as a curtailment , since it eliminated the accrual for a significant number of participants for all of their future services . we also made a voluntary pension contribution of $ 100.0 million to the affected plan in october 2016 . 19 the service cost component of net pension expense represents the estimated cost of future pension liabilities earned associated with active employees . the pension earnings , interest and deferrals ( “ pension eid ” ) is comprised of the expected return on plan assets , interest costs on the projected benefit obligations of the plans and amortization of actuarial gains and losses and prior service costs . net pension expense is recorded in accounts that are included in both the cost of sales and selling , general and administrative expenses based on the function of the associated employees and in other income ( expense ) , net . the following is a summary of the classification of net pension expense for the years ended june 30 , 2019 , 2018 and 2017 : replace_table_token_9_th as of june 30 , 2019 and 2018 , amounts capitalized in gross inventory were $ 1.7 million and $ 1.7 million , respectively . operating performance overview we believe fiscal year 2019 was a successful year as strong execution of our commercial and manufacturing strategies combined with growing market demand across most markets resulted in our best operating income performance since fiscal year 2013. we made significant progress in the following areas : we expanded customer relationships through market share gains with new and existing customers based on the strength of our solutions focused customer approach . through the ongoing implementation of the carpenter operating model , we have unlocked incremental capacity through efficiency and productivity improvements across our sao and pep businesses . story_separator_special_tag sales to the medical market increased 40 percent to $ 175.3 million from fiscal year 2017. excluding surcharge revenue , sales increased 29 percent on 19 percent higher shipment volume . the results reflect improved product mix for higher value solutions , market share gains with key customers and the positive impact of supply chain inventory rebuilding for titanium materials within the orthopedic and cardiology sub-markets . sales to the energy market of $ 146.5 million reflected a 6 percent increase from fiscal year 2017. excluding surcharge revenue , sales increased 6 percent . the results were driven by an increase in the oil and gas sub-market , particularly rental and replacement activity through our amega west services ( “ amega west ” ) business offset by weaker demand for materials used in power generation applications , which has been significantly impacted by depressed industrial gas turbine industry conditions . transportation market sales increased 9 percent from fiscal year 2017 to $ 157.0 million . excluding surcharge revenue , sales increased 4 percent on 1 percent higher shipment volume . the results reflect a strengthening mix of medium and heavy-duty truck applications , partially offset by softer demand in light duty vehicles applications . industrial and consumer market sales increased 22 percent to $ 364.9 million for fiscal year 2018. excluding surcharge revenue , sales increased 14 percent on 7 percent higher shipment volume . the results reflect the impact of stronger demand for materials used in industrial applications due in part to a moderate increase in recovery of oil and gas activity . 26 gross profit gross profit in fiscal year 2018 increased to $ 382.3 million , or 17.7 percent of net sales from $ 300.8 million , or 16.7 percent of net sales for fiscal year 2017. excluding the impact of the surcharge revenue , our gross margin in fiscal year 2018 was 21.3 percent compared to 19.3 percent in fiscal year 2017. the results reflect the impact of stronger demand and improved product mix coupled with operating cost improvements compared to fiscal year 2017. our surcharge mechanism is structured to recover increases in raw material costs , although in certain cases with a lag effect as discussed above . while the surcharge generally protects the absolute gross profit dollars , it does have a dilutive effect on gross margin as a percent of sales . the following represents a summary of the dilutive impact of the surcharge on gross margin . we present and discuss these financial measures because management believes removing the impact of surcharge provides a more consistent and meaningful basis for comparing results of operations from period to period . see the section “ non-gaap financial measures ” below for further discussion of these financial measures . replace_table_token_19_th selling , general and administrative expenses selling , general and administrative expenses in fiscal year 2018 were $ 193.0 million , or 8.9 percent of net sales ( 10.8 percent of net sales excluding surcharge revenue ) , compared to $ 176.1 million , or 9.8 percent of net sales ( 11.3 percent of net sales excluding surcharge revenue ) , in fiscal year 2017. selling , general and administrative expenses increased in fiscal year 2018 primarily due to higher variable compensation expense partially offset by lower pension expense compared to fiscal year 2017. operating income our operating income in fiscal year 2018 increased to $ 189.3 million , or 8.8 percent of net sales as compared with $ 121.5 million , or 6.8 percent in net sales in fiscal year 2017. excluding surcharge revenue and special items , adjusted operating margin was 10.6 percent for the fiscal year 2018 and 8.0 percent for fiscal year 2017. the increase in the operating margin reflects the stronger demand and improved product mix coupled with operating cost improvements partially offset by higher variable compensation expense compared to fiscal year 2017. operating income has been impacted by special items . the following presents our operating income and operating margin , in each case excluding the impact of surcharge on net sales and the loss on divestiture of business . we present and discuss these financial measures because management believes removing the impact of these items provides a more consistent and meaningful basis for comparing results of operations from period to period . see the section “ non-gaap financial measures ” below for further discussion of these financial measures . 27 replace_table_token_20_th interest expense fiscal year 2018 interest expense was $ 28.3 million compared to $ 29.8 million in fiscal year 2017. we have used interest rate swaps to achieve a level of floating rate debt to fixed rate debt . interest expense for fiscal year 2018 includes net gains from interest rate swaps of $ 0.4 million compared with $ 1.8 million of net gains from interest rate swaps for fiscal year 2017. capitalized interest reduced interest expense by $ 2.8 million for fiscal year 2018 compared to $ 1.3 million in fiscal year 2017. other expense , net other expense , net for fiscal year 2018 was $ 0.8 million as compared with other expense , net of $ 21.5 million for fiscal year 2017. the company adopted the provisions of asu 2017-07 , compensation - retirement benefits ( topic 715 ) , effective july 1 , 2018 on a retrospective basis . for fiscal year ended june 30 , 2018 , $ 0.1 million and $ 2.0 million have been reclassified from cost of goods sold and selling , general and administrative expenses , respectively , to other income ( expense ) , net on the consolidated statements of income . for fiscal year ended june 30 , 2017 , $ 16.5 million and $ 7.8 million have been reclassified from cost of goods sold and selling , general and administrative expenses , respectively , to other income ( expense ) , net on the consolidated statements of income . see note 2 to our consolidated

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and financial resources we ended fiscal year 2019 with $ 27.0 million of cash and cash equivalents , a decrease of $ 29.2 million from fiscal year 2018 . during fiscal year 2019 our cash provided from operating activities was $ 232.4 million as compared with $ 209.2 million in fiscal year 2018 . our free cash flow , which we define under “ non-gaap financial measures ” below , was negative $ 53.7 million as compared to positive $ 34.7 million for the same period a year ago . included in the free cash flow results during the current period is the acquisition of a business , lpw technology ltd. , for a cash purchase price of $ 79.0 million . during the prior fiscal year , we acquired a business , mb calram llc , for a cash purchase price of $ 13.3 million . the free cash flow results also reflect higher capital spending levels in the current period as we increased our investment in key growth initiatives during fiscal year 2019. capital expenditures for property , plant , equipment and software were $ 180.3 million for fiscal year 2019 as compared to $ 135.0 million for fiscal year 2018. in fiscal year 2020 , we expect capital expenditures to be approximately $ 170 million.

the applicable margins are determined by certain financial covenant performance as defined in the credit agreement . at december 31 , 2020 the base rate option and libor option applicable to line of credit borrowings were 3.25 % and 2.00 % , respectively . the credit agreement is collateralized by certain assets of the company and contains financial and operating covenants that we are in compliance with as of december 31 , 2020. for more information on our indebtedness see note 7 to our consolidated financial statements beginning on page f-1 of this annual report on form 10-k. funds held for customers and customer funds obligations we maintain trust accounts with financial institutions , which allows our customers to outsource their tax remittance functions to us . we have legal ownership over the accounts utilized for this purpose . funds held for customers represent cash and cash equivalents that , based upon our intent , are restricted solely for satisfying the obligations to remit funds relating to our tax remittance services . funds held for customers are not commingled with our operating funds . 52 customer funds obligations represent our contractual obligations to remit collected funds to satisfy customer tax payments . customer funds obligations are reported as a current liability on our consolidated balance sheets as the obligations are expected to be settled within one year . cash flows related to changes in customer funds obligations are presented as cash flows from financing activities . off-balance sheet arrangements we do not have any off-balance sheet arrangements , as defined by applicable regulations of the sec , that are reasonably likely to have a current or future material effect on our financial condition , results of operations , liquidity , capital expenditures or capital resources . contractual obligations and commitments our contractual obligations and commitments as of december 31 , 2020 are summarized in the table below : replace_table_token_23_th ( 1 ) on january 7 , 2020 , the company acquired a 60 % controlling interest in systax , a provider of brazilian transaction tax content and software . the company has a contractual purchase commitment to acquire the remaining 40 % equity interest incrementally between 2021 through 2024. future purchase commitment payments for these incremental acquisition amounts are based on a multiple of systax revenue and earnings before interest , depreciation , amortization and income taxes performance at the end of 2020 , 2022 and 2023 , whereby the company will have full ownership after the final transaction in 2024. see notes 1 and 2 to our consolidated financial statements beginning on page f-1 of this annual report on form 10-k. critical accounting policies and estimates the preparation of these consolidated financial statements in accordance with gaap requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements , as well as the reported amounts of revenue and expenses during the reporting periods . these estimates , assumptions and judgments are necessary because future events and their effects on our consolidated financial statements can not be determined with certainty , and are made based on our historical experience and on other assumptions that we believe to be reasonable under the circumstances . these estimates may change as new events occur or additional information is obtained , and we may periodically be faced with uncertainties , the outcomes of which are not within our control and may not be known for a prolonged period of time . because the use of estimates is inherent in the financial reporting process , actual results could materially differ from those estimates . the policies and estimates discussed below are considered by management to be critical to an understanding of our consolidated financial statements because their application places the most significant demands on management 's judgment . specific risks for these critical accounting policies are described in the following sections . for all of these policies , we caution that future events rarely develop exactly as forecast , and such estimates routinely require adjustment . we have reviewed these critical accounting policies and estimates and related disclosures with our audit committee . our discussion of critical accounting policies and estimates is intended to supplement , not duplicate , our summary of significant accounting policies so that readers will have greater insight into the uncertainties involved in applying our critical accounting policies and estimates . for a summary of our significant accounting policies , see note 1 to our consolidated financial statements beginning on page f-1 of this annual report on form 10-k. 53 revenue recognition revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected to be received in exchange for those products or services . we enter into contracts that can include various combinations of products and services , which are generally capable of being distinct and accounted for as separate performance obligations . revenue is recognized net of allowance for subscription and non-renewal cancellations and any taxes collected from customers , which are subsequently remitted to governmental authorities . licenses for on-premise software subscriptions provide the customer with a right to use the software as it exists when made available to the customer . customers purchase a subscription to these licenses , which includes the related software and tax content updates and product support . the updates and support , which are part of the subscription agreement , are essential to the continued utility of the software . story_separator_special_tag prior to these elections , the income and loss from these entities was reported on the company 's u.s. federal and most state income tax returns in addition to being reported on a foreign jurisdiction tax return regardless of whether or not the earnings were repatriated . we record deferred income taxes using the liability method . we recognize deferred tax assets and liabilities for future tax consequences of events that have been previously recognized in the consolidated financial statements and tax returns . the measurement of deferred tax assets and liabilities is based on provisions of the enacted tax law . the effects of future changes in tax laws or rates are not anticipated . a valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized . we record uncertain tax positions in accordance with asc 740 , income taxes , on the basis of a two-step process whereby : ( i ) management determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position , and ( ii ) for those tax positions that meet the more likely than not recognition threshold , management recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority . the impact as a result of the application of asc 740 is reflected in the 57 consolidated financial statements . the company assesses its income tax positions and records tax benefits or expense based upon management 's evaluation of the facts , circumstances , and information available at the reporting date . recent accounting pronouncements a discussion of recent accounting pronouncements is included in note 1 to our consolidated financial statements beginning on page f-1 of this annual report on form 10-k. jobs act as a company with less than $ 1.07 billion in revenue during our last fiscal year , we qualify as an “ emerging growth company , ” as defined in the jobs act . an emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable to public companies . these provisions include : ● not being required to comply with the auditor attestation requirements of section 404 of the sarbanes-oxley act ; ● reduced disclosure obligations regarding executive compensation in our periodic reports , proxy statements and registration statements ; and ● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved . we may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the completion of our offering . however , if certain events occur prior to the end of such five-year period , including if we become a “ large accelerated filer , ” our annual gross revenues exceed $ 1.07 billion , or we issue more than $ 1.0 billion of non-convertible debt in any three-year period , we will cease to be an emerging growth company prior to the end of such five-year period . we have elected to take advantage of certain of the reduced disclosure obligations in this annual report on form 10-k and may elect to take advantage of other reduced reporting requirements in future filings . as a result , the information that we provide to our stockholders may be different from what you might receive from other public reporting companies in which you hold equity interests . in addition , under the jobs act , emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies . ​ 58 ​ ​ item 7a . quantitative and qualitative disclosures about market risk interest rate risk we had cash and cash equivalents of $ 303.1 million and $ 75.9 million as of december 31 , 2020 and 2019 , respectively . we maintain our cash and cash equivalents in deposit accounts and money market funds with financial institutions . due to the short-term nature of these instruments , we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates . declines in interest rates , however , would reduce future interest income . the company has no outstanding bank debt at december 31 , 2020. any debt we incur in the future may bear interest at variable rates . foreign currency exchange rate risk our revenues and expenses are primarily denominated in u.s. dollars . for our foreign operations , the majority of our revenues and expenses are denominated in other currencies , such as the canadian dollar , euro , british pound , swedish krona , indian rupee and brazilian real . decreases in the relative value of the u.s. dollar as compared to these currencies may negatively affect our revenues and other operating results as expressed in u.s. dollars . for the years ended december 31 , 2020 , 2019 and 2018 , approximately 1 % of our revenues were generated in currencies other than u.s. dollars in each respective period . we have experienced and will continue to experience fluctuations in our net income ( loss ) as a result of transaction gains or losses related to revaluing certain current asset and current liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded . we have historically recognized immaterial amounts of foreign currency gains and losses in each of the periods presented . we may in the future hedge selected significant transactions denominated in currencies other than the u.s. dollar as we expand our international operations and our risk grows . for example , our acquisition of the controlling interest in systax in january

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources as of december 31 , 2020 , we had cash and cash equivalents of $ 303.1 million and retained earnings of $ 21.9 million . prior to july 31 , 2020 , our primary sources of capital had been from sales of our solutions and proceeds from bank lending facilities . on july 31 , 2020 , we received $ 423.0 million in proceeds , net of underwriting fees and commissions , from the sale of 23,812,216 shares of our class a common stock and used a portion of the proceeds to pay off the $ 175.0 million term loan facility . as a result , we have no outstanding bank debt after such redemption . the net proceeds remaining after payment of offering costs are being used for working capital and other corporate purposes . we believe that our existing cash resources and our $ 100 million bank line of credit will be sufficient to meet our capital requirements and fund our operations for at least the next 12 months . however , if these sources are insufficient to satisfy our liquidity requirements , we may seek to sell additional equity or debt securities or borrow from our banks . if we raise additional funds by issuing equity securities , our stockholders will experience dilution . debt financing , if available , may involve covenants restricting our operations or our ability to incur additional debt . any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders . additional financing may not be available at all , or in amounts or on terms unacceptable to us . historical cash flows years ended december 31 , 2020 and 2019 the following table presents a summary of our cash flows for the periods indicated : replace_table_token_21_th ​ operating activities . cash provided by operating activities was $ 59.5 million in 2020 compared to $ 92.5 million in 2019 , a decrease of $ 33.0 million .

13 gross profit percentage by segment : replace_table_token_5_th ( 1 ) includes gross profit from direct hire placements , which all associated costs are recorded as selling , general and administrative expenses . selling , general and administrative expenses selling , general and administrative expenses include the following categories : · compensation and benefits in the operating divisions , which includes salaries , wages and commissions earned by the company 's employment consultants and branch managers on permanent and temporary placements . · administrative compensation , which includes salaries , wages , payroll taxes and employee benefits associated with general management and the operation of the finance , legal , human resources and information technology functions . · occupancy costs , which includes office rent , depreciation and amortization , and other office operating expenses . · recruitment advertising , which includes the cost of identifying job applicants . · other selling , general and administrative expenses , which includes travel , bad debt expense , fees for outside professional services and other corporate-level expenses such as business insurance and taxes . the company 's largest selling , general and administrative expense is for compensation in the operating divisions . most of the company 's sales agents and recruiters are paid on a commission basis and receive advances against future commissions . when commissions are earned , prior advances are applied against them and the sales agent or recruiter is paid the net amount . the company recognizes the full amount as commission expense , and advance expense is reduced by the amount recovered . thus , the company 's advance expense represents the net amount of advances paid , less amounts applied against commissions , plus commission accruals for billed but uncollected revenue . selling , general and administrative expenses for the year ended september 30 , 2016 , increased by approximately $ 6.1 million to approximately $ 19.9 million as compared to the prior year of approximately $ 13.8 million . the increase was primarily related to the general selling , general and administrative expenses of agile , access and paladin following their acquisitions by the company . acquisition , integration and restructuring charges acquisition , integration and restructuring charges , legal expenses , travel expenses , finder 's fees , severance agreements and other expenses that the company has expensed as incurred and related to various transactions the company has or expects to execute . the company expects to have these expenses each quarter while we continue our growth strategy , however these expenses would not necessarily be incurred by the company on a recurring basis in normal operations , without acquisitions . 14 the acquisition , integration and restructuring charges for the year ended september 30 , 2016 , increased approximately $ 329,000 or 88 % compared with the prior year as the company continues to evaluate potential acquisitions and perform due diligence , and complete the acquisitions of paladin and access during the year . depreciation expense depreciation expense for the year ended september 30 , 2016 , increased $ 155,000 , or 88 % compared with the prior year , primarily as a result of the acquisitions and the depreciation of their property and equipment . amortization expense amortization expense for the year ended september 30 , 2016 , increased $ 1,088,000 , or 243 % compared with the prior year , primarily as a result of the acquisitions and the related amortization of their identified intangible assets . change in derivative liability change in derivative liability for the year ended september 30 , 2016 , decreased to $ 0 , compared with the prior year as a result of the brio loan being fully converted to stock in the prior year . change in contingent consideration at the time the company makes an acquisition , the company estimates contingent consideration , such as earn-outs or other guarantees that could affect the purchase price when the contingency is resolved . contingent consideration is evaluated by management each quarter or when the contingency is resolved . the change in contingent consideration with respect to the company 's acquisitions was approximately $ 1,581,000 during the year ended september 30 , 2016. the change was related to an $ 1,956,000 gain recognized from the reduction in access contingent consideration as a result of a decrease in expected ebitda , offset by a $ 375,000 loss recognized for the increase in paladin expected contingent consideration as a result of an increase in their expected ebitda . loss on extinguishment of debt loss on the extinguishment of debt for the year ended september 30 , 2016 , decreased to $ 0 , compared with the prior year as the debt was converted during the prior year . interest expense interest expense for the year ended september 30 , 2016 , increased $ 1,058,000 , or 194 % compared with the prior year primarily as a result of a new lender , the interest expense for acquisition payments and higher average borrowings during fiscal year 2016. story_separator_special_tag above ebitda covenant levels , and lender 's adjustment in accordance with the preceding sentence , have been established by lender based on borrower 's operations as conducted on september 1 , 2016 , and that any material change to such operations , whether by strategic acquisition or otherwise , will necessitate an adjustment by lender of the above ebitda covenant levels , and that lender will make such adjustments in lender 's permitted discretion . as of september 30 , 2016 , the company was in compliance with the ebitda covenant and all other administrative covenants . at september 30 , 2016 , there was approximately $ 1,250,000 available on the line of credit . the interest expense related to the lines of credit for the years ended september 30 , 2016 and 2015 approximated $ 723,000 and $ 347,000 , respectively . story_separator_special_tag the company did not record any impairment during the years ended september 30 , 2016 and 2015. stock-based compensation the company accounts for stock-based awards to employees in accordance with applicable accounting principles , which requires compensation expense related to share-based transactions , including employee stock options , to be measured and recognized in the financial statements based on a determination of the fair value of the stock options . the grant date fair value is determined using the black-scholes-merton ( `` black-scholes `` ) pricing model . for all employee stock options , we recognize expense over the requisite service period on an accelerated basis over the employee 's requisite service period ( generally the vesting period of the equity grant ) . the company 's option pricing model requires the input of highly subjective assumptions , including the expected stock price volatility , expected term , and forfeiture rate . any changes in these highly subjective assumptions significantly impact stock-based compensation expense . options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles . such options are valued using the black-scholes option pricing model . see note 9 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation . upon the exercise of options , it is the company 's policy to issue new shares rather than utilizing treasury shares . segment data the company has two operating business segments a ) contract staffing services , and b ) direct hire placement . these operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations . operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance . other factors , including type of business , type of employee , length of employment and revenue recognition are considered in determining these operating segments . recent accounting pronouncements in september 2015 , the fasb issued asu 2015-16 - business combinations , which requires adjustments to provisional amounts recorded in business combinations to be recognized in the reporting period in which they are identified either separately on the face of the income statement or in the notes to the financial statements . asu 2015-16 is effective for annual reporting periods beginning after december 15 , 2015 and any interim periods within that period , and early adoption is permitted . we are currently evaluating asu 2015-16 to determine if this guidance will have a material impact on our financial position , results of operations or cash flows . in may 2014 , the fasb issued authoritative guidance that provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance , including industry-specific revenue guidance . the new guidance requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services . it also requires additional disclosure about the nature , amount , timing and uncertainty of revenue and cash flows arising from customer contracts , including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract . the guidance permits companies to either apply the requirements retrospectively to all prior periods presented , or apply the requirements in the year of adoption , through a cumulative adjustment . the amended guidance also requires additional quantitative and qualitative disclosures . in march 2016 , amended guidance was issued to clarify implementation guidance on principal versus agent consideration . in april 2016 an amendment provided clarifications on determining whether a promised license provides a customer with a right to use or a right to access an entity 's intellectual property . in may 2016 an amendment provided narrow scope improvements and practical expedients to reduce the potential diversity , cost and complexity of applying new revenue standard . these amendments , as well as the original guidance , are all effective for annual and interim periods beginning after december 15 , 2017. the new standard will be effective for the company beginning january 1 , 2018 and the company intends to implement the standard with the modified retrospective approach , which recognizes the cumulative effect of application recognized on that date . the company is in the process of evaluating the impact of adoption of this guidance on its financial statements . 21 in november 2015 , the fasb issued authoritative guidance which changes how deferred taxes are classified on a company 's balance sheet . the new guidance eliminates the current requirement for companies to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet . instead , companies will be required to classify all deferred tax assets and liabilities as noncurrent . the new guidance is effective for annual reporting periods beginning after december 15 , 2016. early adoption is permitted for all entities as of the beginning of an interim or annual reporting period . the guidance may be applied either prospectively , for all deferred tax assets and liabilities , or retrospectively ( i.e . , by reclassifying the comparative balance sheet ) . if applied prospectively , entities are required to include a statement that prior periods were not retrospectively adjusted . if applied retrospectively , entities are also required to include quantitative information about the effects of the change on prior periods . except for balance sheet classification requirements related to deferred tax assets and liabilities , the company does not expect this guidance to have an effect on its financial statements . the company is in the process of evaluating the impact of adoption of this guidance on its financial statements .

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources the following table sets forth certain consolidated statements of cash flows data ( in thousands ) : replace_table_token_6_th 15 as of september 30 , 2016 , the company had cash of approximately $ 2,528,000 , which was a decrease of approximately $ 3,404,000 from approximately $ 5,932,000 at september 30 , 2015. negative working capital at september 30 , 2016 was approximately $ ( 597,000 ) , as compared to working capital of approximately $ 5,636,000 for september 30 , 2015. the cash has been used primarily in the acquisitions of several entities . the company 's current ratio was approximately 96 % , a decrease of approximately 80 % from the prior year . shareholders ' equity as of september 30 , 2016 , was approximately $ 24,533,000 which represented approximately 53 % of total assets . at the company 's option , approximately $ 500,000 of its current liabilities related to the acquisitions can be paid in stock at market price , instead of cash . the net income for the year ended september 30 , 2016 , was approximately $ 1,173,000. net cash provided by ( used in ) operating activities for the years ended september 30 , 2016 and 2015 was approximately $ 723,000 and $ ( 650,000 ) , respectively . the fluctuation is due to the significant increase in accounts payable and offset by the reduction of accrued compensation and other current items . in addition to non-cash related expense for depreciation , amortization and stock compensation . net cash used in investing activities for the years ended september 30 , 2016 and 2015 was ( $ 9,515,000 ) and ( $ 2,762,000 ) respectively . the primary use of cash was for the acquisitions of access and paladin during the year ended september 30 , 2016. net cash flow provided by financing activities for the years ended september 30 , 2016 and 2015 was approximately $ 5,388,000 and $ 9,176,000 , respectively . fluctuations in financing activities are attributable to the level of net borrowings and the proceeds of the subordinated debt . all of the company 's office facilities are leased .

further , the availability of supplies in california differs greatly from year to year due to natural hydrological variability . over the last decade , california struggled through an historic drought featuring record-low winter precipitation . then , following a series of strong storms that delivered record amounts of rain and snow during the 2016-2017 winter , state officials declared an end to the drought . yet , the 2017-2018 winter has delivered few precipitation events and , through february 2018 , 82 % of the state is again abnormally dry according to the us drought monitor . the rapid swings between wet and dry years challenges california 's traditional supply system and supports the need for reliable storage and local supply . southern california water providers are presently pursuing investments in storage , supply and infrastructure to meet long-term demand given the variety of challenges and limitations faced by the state 's traditional infrastructure . the cadiz water project is a local supply option in southern california that could help address the region 's water supply challenges by providing new reliable supply and local groundwater storage opportunities ( see `` water resource development `` below ) in both dry and wet years . following a multi-year california environmental quality act ( `` ceqa `` ) review and permitting process , the water project received permits that allow the capture and conservation of 2.5 million acre-feet of groundwater over 50 years in accordance with the terms of a groundwater management plan approved by san bernardino county , the public agency responsible for groundwater use at the project area . our current working capital requirements relate largely to the final development activities associated with the water project and those activities consistent with the water project related to further development of our land and agricultural assets . while we continue to believe that the ultimate implementation of the water project will provide the primary source of our future cash flow , we also believe there is significant additional value in our underlying agricultural assets . demand for agricultural land with water rights is at an all-time high ; therefore , in addition to our water project proposal , we are engaged in agricultural joint ventures at the cadiz/fenner property that put some of the groundwater currently being lost to evaporation from the underlying aquifer system to immediate beneficial use . we have farmed portions of the cadiz/fenner property since the late 1980s relying on groundwater from the aquifer system for irrigation and the site is well suited for various permanent and seasonal crops . presently , the property has 2,100 acres leased for cultivation of a variety of crops , including citrus , dried-on-the-vine raisins and seasonal vegetables . we also continue to explore additional uses of our land and water resource assets , including the marketing of our approved desert tortoise land conservation bank , which is located on our properties outside the water project area , and other long-term legacy uses of our properties , such as habitat conservation and cultural development . 23 w ater resource development the water project is designed to capture and conserve billions of gallons of renewable native groundwater currently being lost to evaporation from the aquifer system underlying our cadiz/fenner property , and provide a new reliable water supply for approximately 400,000 people in southern california . in this first phase , phase 1 , the total quantity of groundwater to be recovered and conveyed to water project participants will not exceed a long-term annual average of 50,000 acre-feet per year for 50 years . the water project also offers participants in phase 1 the ability to carry-over their annual supply and store it in the groundwater basin from year to year . a second phase of the water project , phase ii , will offer up to one million acre-feet of storage capacity that can be used to hold water supplies imported to the project area . water project facilities required for phase i primarily include , among other things : · high-yield wells designed to efficiently recover available native groundwater from beneath the water project area ; · a water conveyance pipeline to deliver water from the well-field to the colorado river aqueduct ( `` cra `` ) for further delivery to project participants ; and · an energy source to provide power to the well-field , pipeline and pumping facilities . if an imported water storage component of the project is ultimately implemented in phase ii , the following additional facilities would be required , among other things : · facilities to pump water through the conveyance pipeline from the cra to the water project well-field and or through the company 's pipeline from cadiz to barstow , ca ; and · spreading basins , which are shallow settling ponds that will be configured to efficiently percolate water from the ground surface down to the water table using subsurface storage capacity for the storage of water . phase i phase i has been fully reviewed and permitted in accordance with the california environmental quality act ( ceqa ) . in may 2016 , all permits and approvals were sustained in the california court of appeal and are no longer subject to further litigation . as a result , the project presently is permitted to provide an average of 50,000 acre-feet of water for 50 years to meet municipal and industrial ( m & i ) water needs in southern california . story_separator_special_tag the net loss totaled $ 33.9 million for the year ended december 31 , 2017 , compared with a net loss of $ 26.3 million for the year ended december 31 , 2016. the higher loss in 2017 was primarily related to a $ 3.5 million loss on extinguishment of debt and $ 2.6 million in unrealized losses recorded for warrant liabilities . the higher 2017 loss was also related to an increase in stock compensation resulting from the vesting of milestone shares earned by employees , an increase in cash bonus awards to employees , and an increase in general and administrative expense due to pre-construction engineering activities in connection with the water project . 29 our primary expenses are our ongoing overhead costs associated with the development of the water project ( i.e . , general and administrative expense ) and our interest expense . we will continue to incur non-cash expense in connection with our management and director equity incentive compensation plans . revenues . revenue totaled $ 437 thousand during the year ended december 31 , 2017 , compared to $ 412 thousand during the year ended december 31 , 2016. the 2017 revenue is primarily related to rental income from the fvf lease ( see `` agricultural development `` , above ) . general and administrative expenses . general and administrative expenses during the year ended december 31 , 2017 , totaled $ 12.8 million compared with $ 9.3 million for the year ended december 31 , 2016. non-cash compensation costs related to stock and option awards are included in general and administrative expenses . general and administrative expenses , exclusive of stock-based compensation costs , totaled $ 10.5 million for the year ended december 31 , 2017 , compared with $ 8.0 million for the year ended december 31 , 2016. the increase in general and administrative expense in 2017 was primarily due to pre-construction engineering activities in connection with the water project and an increase in cash bonus awards to employees . compensation costs from stock and option awards for the year ended december 31 , 2017 , totaled $ 2.3 million compared with $ 1.3 million for the year ended december 31 , 2016. the higher 2017 expense primarily reflects the vesting of milestone shares earned by employees and consultants of the company . depreciation . depreciation expense totaled $ 274 thousand for the year ended december 31 , 2017 , and $ 292 thousand for the year ended december 31 , 2016. interest expense , net . net interest expense totaled $ 17.7 million during the year ended december 31 , 2017 , compared to $ 14.9 million during 2016. the following table summarizes the components of net interest expense for the two periods ( in thousands ) : replace_table_token_3_th 30 the interest on outstanding debt increased from $ 9.7 million to $ 11.3 million due to compounded interest on a larger credit facility associated with our may 2017 debt refinancing . additionally , during the year ended december 31 , 2017 , the company recorded net unrealized losses on warrants of $ 2.6 million , which included $ 3.1 million in unrealized losses related to the issuance of shares to former lenders ( see note 8 to the consolidated financial statements , `` common stock `` ) and $ 508 thousand in unrealized gains related to our may 2017 debt refinancing . ( see note 6 to the consolidated financial statements , `` long-term debt `` ) . story_separator_special_tag id= `` trgrrtftohtmltab `` style= `` font-size : 1px ; width : 9pt ; display : inline-block `` > prior debt refinancings . in april 2016 , we entered into a note purchase agreement with new and existing investors ( the `` investors `` ) . pursuant to the agreement , we issued approximately $ 10.0 million of our 7.00 % convertible senior notes due 2020 ( `` 2020 notes ) in aggregate principal and accrued interest . the proceeds from the issuance of the 2020 notes ( such 2020 notes , the `` new notes `` ) , are used for general working capital purposes . the 2020 notes accrue interest at 7.00 % per year , with no principal or interest payments due prior to maturity on march 5 , 2020. the 2020 notes , including original principal and accrued interest , are convertible at any time into the company 's common stock at a price of $ 6.75 per share , pursuant to the terms of the indenture dated as of december 10 , 2015 , by and between the company and us bank national association ( the `` indenture `` ) , under which the new notes were issued . as a result of this transaction , we recorded a debt discount in the amount of $ 2.0 million which is the difference between the proceeds from this transaction and the principal and accrued interest of new notes on the day of the issuance . in addition , based on the conversion rate of $ 6.75 per share , the fair value of the shares receivable on conversion exceed the $ 8.0 million in net proceeds ; therefore , a beneficial conversion feature was recorded in the amount of $ 1.48 million . this amount was recorded as additional debt discount with a corresponding amount recorded as additional paid-in capital . such debt discount is accreted to the redemption value of the instrument over the remaining term of the loan . furthermore , we incurred $ 400 thousand in placement agent fees which was recorded as additional debt discount and is being amortized over the remaining term of the loan . in november 2016 , we entered into an agreement with our then senior lenders which ( i ) extended the maturity date of our secured senior debt from september 2017 to september 2019 and ( ii ) permits us to satisfy the cash interest payment obligations

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

debt refinancings . in may 2017 , we entered into a new $ 60 million credit agreement ( `` credit agreement '' ) with funds affiliated with apollo global management , llc ( `` apollo '' ) that replaced and refinanced our then existing $ 45 million senior secured mortgage debt ( `` prior senior secured debt '' ) and provided $ 15 million of new senior debt to fund immediate construction related expenditures ( `` new senior secured debt '' ) . the new senior secured debt will mature on the earliest of ( a ) the four year anniversary of the closing date , and ( b ) the `` springing maturity date '' , which is defined as the date which is 91 days prior to the maturity date of the 7.00 % convertible senior notes of cadiz due 2020 ( the `` new convertible notes '' ) that were issued in december 2015 and april 2016 pursuant to the new convertible notes indenture as defined in the credit agreement , if on the 91 st day preceding the maturity date of the new convertible notes , the 5-day vwap , as defined in the credit agreement , is less than 120 % of the then applicable conversion rate , as defined in the new convertible notes indenture , and at least $ 10,000,000 in original principal amount of the new convertible notes is outstanding ( ( a ) or ( b ) , as applicable , the `` maturity date '' ) . interest on the new senior secured debt is due quarterly on each march 31 , june 30 , september 30 and december 31 ( each an `` interest date '' ) beginning on june 30 , 2017. interest on the new senior secured debt will ( i ) accrete to the outstanding principal amount at a rate per annum equal to 6 % ( the `` pik rate '' ) compounded quarterly on each interest date and ( ii ) accrue on the outstanding principal amount at a rate per annum equal to 2 % ( the `` cash rate '' ) .

some debt securities have deferred interest whereby some portion of the interest payment is added to the principal balance so that the interest is paid , together with the principal , at maturity . this form of deferred interest is often called pik interest . typically , our equity investments consist of common stock , preferred stock , limited liability company interests , or warrants to purchase the foregoing . often , these equity investments occur in connection with our original investment , recapitalizing a business , or refinancing existing debt . during the year ended september 30 , 2020 , we invested $ 131.2 million in six new portfolio companies and extended $ 18.8 million in investments to existing portfolio companies . in addition , during the year ended september 30 , 2020 , we exited eleven portfolio companies through early payoffs or a restructure . we received a total of $ 78.8 million in combined net proceeds and principal repayments from the aforementioned portfolio company exits as well as principal repayments by existing portfolio companies during the year ended september 30 , 2020. this activity resulted in a net decrease in our overall portfolio by five portfolio companies to 48 and a net increase of $ 66.2 million in our portfolio at cost since september 30 , 2019. from our initial public offering in august 2001 through september 30 , 2020 , we have made 553 different loans to , or investments in , 246 companies for a total of approximately $ 2.1 billion , before giving effect to principal repayments on investments and divestitures . during the year ended september 30 , 2020 , the following significant transactions occurred : proprietary investments in october 2019 , we invested $ 14.0 million in universal survey center , inc. through secured first lien debt . in december 2019 , we invested $ 24.0 million in café zupas through secured first lien debt . in january 2020 , we invested an additional $ 5.5 million in lignetics , inc. , an existing portfolio company , through a combination of secured second lien debt and preferred equity . in july 2020 , we sold $ 6.0 million of our debt investment in lignetics , inc. at par . in january 2020 , we sold our investment in the mochi ice cream company ( “mochi” ) , which resulted in a realized gain of approximately $ 2.5 million . in connection with the sale , we received net cash proceeds of approximately $ 9.7 million , including the repayment of our debt investment of $ 6.8 million at par . in january 2020 , we exited our investment in meridian rack & pinion , inc. ( “meridian” ) , with a fair value of $ 0 as of december 31 , 2019 and recorded a realized loss of $ 5.6 million . in february 2020 , we invested $ 19.0 million in american trailer rental group llc through a combination of secured second lien debt and common equity . 62 in march 2020 , our investments in xmedius america , inc. and xmedius solutions inc. paid off at par for combined net proceeds of $ 14.9 million . in may 2020 , we invested $ 30.0 million in magpul industries corp. through secured second lien debt . in may 2020 , we invested $ 23.5 million in als education , llc through secured first lien debt . in may 2020 , we sold our investment in travel sentry , inc. for net proceeds of $ 6.1 million , which resulted in a $ 0.1 million realized loss . in may 2020 , our debt investment in canopy safety brands , llc paid off at par for net proceeds of $ 3.8 million . in july 2020 , our investment in universal survey center , inc. paid off at par for net proceeds of $ 14.1 million . in conjunction with the payoff , we received a prepayment fee of $ 0.3 million . in august 2020 , we invested $ 20.7 million in aerospace engineering , llc through secured first lien debt . syndicated investments in october 2019 , we invested an additional $ 3.0 million in medical solutions holdings , inc. , an existing portfolio company , through secured second lien debt . in october 2019 , our investment in digicert holdings , inc. paid off at par for net proceeds of $ 2.4 million . in december 2019 , our investment in ldiscovery , llc paid off at par for net proceeds of $ 5.0 million . in december 2019 , our investment in united pf holdings , llc paid off at par for net proceeds of $ 3.1 million . in conjunction with the payoff , we received a prepayment fee of $ 0.1 million . in december 2019 , we recorded a net realized loss of $ 4.4 million related to our investment in new trident holdcorp , inc. ( “new trident” ) which filed for bankruptcy protection in february 2019. in june 2020 , our investment in discoverorg , llc paid off at par for net proceeds of $ 3.3 million . in conjunction with the payoff , we received a prepayment fee of $ 33 thousand . refer to note 15— subsequent events in the accompanying consolidated financial statements included elsewhere in this annual report for portfolio activity occurring subsequent to september 30 , 2020. capital raising we have been able to meet our capital needs through extensions of and increases to our line of credit under the credit facility and by accessing the capital markets in the form of public equity offerings of common stock and public debt offerings . story_separator_special_tag as of september 30 , 2018 , one portfolio company , fdf was on non-accrual status , with an aggregate debt cost basis of approximately $ 26.9 million , or 6.9 % of the cost basis of all debt investments in our portfolio . other income increased by 162.9 % during the year ended september 30 , 2019 , as compared to the prior year , primarily due to an increase in success fees and prepayment penalties received . for the year ended september 30 , 2019 , other income consisted primarily of $ 1.9 million in success fees recognized , $ 1.2 million in prepayment fees received , and $ 1.1 million in dividend income . for the year ended september 30 , 2018 , other income consisted primarily of $ 0.6 million in prepayment fees received , $ 0.5 million in dividend income , and $ 0.4 million in success fees recognized . as of september 30 , 2019 and 2018 , no single investment represented greater than 10 % of the total investment portfolio at fair value . expenses expenses , net of any non-contractual , unconditional and irrevocable credits to fees from the adviser , increased $ 3.0 million , or 13.2 % , for the year ended september 30 , 2019 as compared to the prior year period . this increase was primarily due to a $ 2.2 million increase in interest expense on borrowings . interest expense increased by 37.2 % during the year ended september 30 , 2019 , as compared to the prior year , primarily due to the issuance of $ 57.5 million aggregate principal amount of the 2023 notes in november 2018 and an increase in the effective interest rate on our credit facility . we incurred $ 3.2 million in interest expense related to the 2023 notes during the year ended september 30 , 2019 versus no such amounts in the prior year period . the weighted average balance outstanding on our credit facility decreased during the year ended september 30 , 2019 compared to the prior year period with the issuance of the 2023 notes . the weighted average balance outstanding during the year ended september 30 , 2019 , was $ 71.5 million , as compared to $ 114.7 million in the prior year , a decrease of 37.7 % . the effective interest rate on our credit facility , including unused commitment fees incurred but excluding the impact of deferred financing costs , was 6.8 % during the year ended september 30 , 2019 , compared to 5.1 % during the prior year . the increase in the effective interest rate was driven by an increase in libor as compared to the prior year period and an increase in unused commitment fees paid in the current year period , partially offset by a decrease in the marginal interest rate on our credit facility effective march 9 , 2018. the net base management fee earned by the adviser decreased by $ 0.3 million , or 5.6 % , during the year ended september 30 , 2019 , as compared to the prior year , resulting primarily from an increase in credits from the adviser year over year , which are driven mainly by origination fees on new deals closed during the year . 72 the net income-based incentive fee increased by $ 0.6 million , or 17.4 % , for the year ended september 30 , 2019 , as compared to the prior year , due to higher pre-incentive fee net investment income , partially offset by an increase in net assets , which drives the hurdle rate , over the prior year . our board of directors accepted a non-contractual , unconditional and irrevocable credit from the adviser of $ 1.5 million to reduce the income-based incentive fee to the extent net investment income did not cover 100.0 % of our distributions to common stockholders during the year ended september 30 , 2019. the credit granted during the year ended september 30 , 2018 , totaled $ 1.7 million . the base management , loan servicing and incentive fees , and associated non-contractual , unconditional and irrevocable credits , are computed quarterly , as described under “transactions with the adviser” in note 4— related party transactions of the accompanying notes to consolidated financial statements and are summarized in the following table : replace_table_token_18_th ( a ) average total assets subject to the base management fee is defined as total assets , including investments made with proceeds of borrowings , less any uninvested cash or cash equivalents resulting from borrowings , valued at the end of the two most recently completed quarters within the respective years and adjusted appropriately for any share issuances or repurchases during the period . ( b ) reflected , on a gross basis , as a line item on our accompanying consolidated statement of operations located elsewhere in this annual report . realized loss and unrealized appreciation net realized loss on investments for the year ended september 30 , 2019 , we recorded a net realized loss on investments of $ 16.4 million , which resulted primarily from the restructuring of our investment in fdf in december 2018 and the associated recognition of a $ 26.9 million net realized loss , partially offset by the sale of our investment in adc in august 2019 for an $ 8.7 million realized gain . for the year ended september 30 , 2018 , we recorded a net realized loss on investments of $ 26.1 million , which resulted primarily from the restructure of our investment in sunshine media holdings ( “sunshine” ) , previously 73 on non-accrual status , and the associated recognition of a $ 28.2 million realized loss . this was partially offset by a $ 0.7 million realized gain from the sale of a portion of our equity investment in funko acquisition holdings , llc and a $ 0.6 million realized

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources operating activities our cash flows from operating activities are primarily generated from the interest payments on debt securities that we receive from our portfolio companies , as well as net proceeds received through repayments or sales of our investments . we utilize this cash primarily to fund new investments , make interest payments on our credit facility , make distributions to our stockholders , pay management and administrative fees to the adviser and administrator , and for other operating expenses . net cash used in operating activities for the year ended september 30 , 2020 was $ 46.1 million as compared to net cash provided by operating activities of $ 9.3 million for the year ended september 30 , 2019. the change was primarily due to a decrease in principal repayments and net proceeds from sales of investments . repayments and net proceeds from sales were $ 78.8 million during the year ended september 30 , 2020 compared to $ 131.1 million during the year ended september 30 , 2019. net cash provided by operating activities for the year ended september 30 , 2019 was $ 9.3 million as compared to net cash used in operating activities of $ 17.8 million for the year ended september 30 , 2018. the change was primarily due to an increase in principal repayments and net proceeds from sales of investments partially offset by an increase in purchases of investments year over year . repayments and net proceeds from sales were $ 131.1 million during the year ended september 30 , 2019 compared to $ 67.9 million during the year ended september 30 , 2018. purchases of investments were $ 147.1 million during the year ended september 30 , 2019 , compared to $ 106.6 million during the year ended september 30 , 2018. as of september 30 , 2020 , we had loans to , syndicated participations in or equity investments in 48 companies , with an aggregate cost basis of approximately $ 494.6 million .

the total number of apartment units under development , costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions ( such as the cost of labor and construction materials ) , competition and local government regulation ; ▪ debt financing and other capital required by the company may not be available or may only be available on adverse terms ; ▪ labor and materials required for maintenance , repair , capital expenditure or development may be more expensive than anticipated ; ▪ occupancy levels and market rents may be adversely affected by national and local economic and market conditions including , without limitation , new construction and excess inventory of multifamily and single family housing , increasing portions of single family housing stock being converted to rental use , rental housing subsidized by the government , other government programs that favor single family rental housing or owner occupied housing over multifamily rental housing , governmental regulations , slow or negative employment growth and household formation , the availability of low-interest mortgages or the availability of mortgages requiring little or no down payment for single family home buyers , changes in social preferences and the potential for geopolitical instability , all of which are beyond the company 's control ; and ▪ additional factors as discussed in part i of this annual report on form 10-k , particularly those under “ item 1a . risk factors ” . forward-looking statements and related uncertainties are also included in the notes to consolidated financial statements in this report . overview equity residential ( “ eqr ” ) , a maryland real estate investment trust ( “ reit ” ) formed in march 1993 , is an s & p 500 company focused on the acquisition , development and management of high quality apartment properties in top united states growth markets . erp operating limited partnership ( “ erpop ” ) , an illinois limited partnership , was formed in may 1993 to conduct the multifamily residential property business of equity residential . eqr has elected to be taxed as a reit . references to the “ company , ” “ we , ” “ us ” or “ our ” mean collectively eqr , erpop and those entities/subsidiaries owned or controlled by eqr and or erpop . references to the “ operating partnership ” mean collectively erpop and those entities/subsidiaries owned or controlled by erpop . eqr is the general partner of , and as of december 31 , 2015 owned an approximate 96.2 % ownership interest in , erpop . all of the company 's property ownership , development and related business operations are conducted through the operating partnership and eqr has no material assets or liabilities other than its investment in erpop . eqr issues equity from time to time but does not have any indebtedness as all debt is incurred by the operating partnership . the operating partnership holds substantially all of the assets of the company , including the company 's ownership interests in its joint ventures . the operating partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity . the company 's corporate headquarters is located in chicago , illinois and as of december 31 , 2015 , the company also operated property management offices in each of its core markets and two of its non-core markets . as of december 31 , 2015 , the company had approximately 3,500 employees who provided real estate operations , leasing , legal , financial , accounting , acquisition , disposition , development and other support functions . 39 business objectives and operating and investing strategies the company invests in high quality apartment communities located in strategically targeted markets with the goal of maximizing our risk adjusted total return ( operating income plus capital appreciation ) on invested capital . we seek to maximize the income and capital appreciation of our properties by investing in markets that are characterized by conditions favorable to multifamily property operations and appreciation . we are focused on the six core coastal , high barrier to entry markets of boston , new york , washington d.c. , southern california ( including los angeles , orange county and san diego ) , san francisco and seattle . these markets generally feature one or more of the following characteristics that allow us to increase rents : ▪ high barriers to entry where , because of land scarcity or government regulation , it is difficult or costly to build new apartment properties , creating limits on new supply ; ▪ high home ownership costs ; ▪ strong economic growth leading to job growth and household formation , which in turn leads to high demand for our apartments ; ▪ urban core locations with an attractive quality of life leading to high resident demand and retention ; and ▪ favorable demographics contributing to a larger pool of target residents with a high propensity to rent apartments . our operating focus is on balancing occupancy and rental rates to maximize our revenue while exercising tight cost control to generate the highest possible return to our shareholders . revenue is maximized by attracting qualified prospects to our properties , cost-effectively converting these prospects into new residents and keeping our residents satisfied so they will renew their leases upon expiration . while we believe that it is our high-quality , well-located assets that bring our customers to us , it is the customer service and superior value provided by our on-site personnel that keeps them renting with us and recommending us to their friends . we use technology to engage our customers in the way that they want to be engaged . many of our residents utilize our web-based resident portal which allows them to sign and renew their leases , review their accounts and make payments , provide feedback and make service requests on-line . story_separator_special_tag results of operations in conjunction with our business objectives and operating strategy , the company continued to invest in apartment properties located in our high barrier to entry/core markets and sell apartment properties located in our low barrier to entry/non-core markets during the years ended december 31 , 2015 and december 31 , 2014 . in summary , we : year ended december 31 , 2015 : ▪ acquired four consolidated apartment properties consisting of 625 apartment units for $ 296.0 million at a weighted average cap rate ( see definition below ) of 4.5 % and three contiguous land parcels for $ 27.8 million ; and ▪ sold eight consolidated apartment properties consisting of 1,857 apartments units as well as a 193,230 square foot medical office building for $ 513.3 million at a weighted average cap rate of 5.3 % generating an unlevered internal rate of return ( `` irr `` ) , inclusive of indirect management costs , of 13.4 % . year ended december 31 , 2014 : ▪ acquired four consolidated apartment properties consisting of 1,011 apartment units for $ 363.2 million at a weighted average cap rate of 4.8 % and two land parcels for $ 28.8 million ; ▪ acquired two consolidated apartment properties , one that had just completed lease up and the other which was still in lease up , consisting of 342 apartment units for $ 106.6 million and are expected to stabilize at a 6.4 % yield on cost and a 4.9 % yield on cost , respectively ; ▪ acquired the 95 % equity interest it did not own in one previously unconsolidated development project with a stabilized real estate value of $ 87.5 million and an adjusted purchase price of $ 64.2 million ; ▪ sold ten consolidated apartment properties consisting of 3,092 apartments units for $ 467.0 million at a weighted average cap rate of 6.1 % generating an unlevered irr , inclusive of management costs , of 8.9 % and three land parcels for $ 62.6 million ; and ▪ sold one unconsolidated property for $ 62.5 million ( sales price listed is the gross sales price and eqr owned an 85 % interest ) . the company 's primary financial measure for evaluating each of its apartment communities is net operating income ( “ noi ” ) . noi represents rental income less direct property operating expenses ( including real estate taxes and insurance ) as well as an allocation of indirect property management costs . the company believes that noi is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the company 's apartment communities . the cap rate is generally the first year noi yield ( net of replacements ) on the company 's investment . properties that the company owned and were stabilized ( see definition below ) for all of both 2015 and 2014 ( the “ 2015 same store properties ” ) , which represented 96,286 apartment units , impacted the company 's results of operations . properties that the company owned for all of both 2014 and 2013 as well as the 18,465 stabilized apartment units acquired in the archstone 43 acquisition that are owned and managed by the company ( the “ 2014 same store properties ” ) , which represented 97,911 apartment units , also impacted the company 's results of operations . both the 2015 same store properties and 2014 same store properties are discussed in the following paragraphs . the following tables provide a rollforward of the apartment units included in same store properties and a reconciliation of apartment units included in same store properties to those included in total properties for the year ended december 31 , 2015 : replace_table_token_9_th replace_table_token_10_th note : properties are considered `` stabilized `` when they have achieved 90 % occupancy for three consecutive months . properties are included in same store when they are stabilized for all of the current and comparable periods presented . ( 1 ) represents one property containing 285 apartment units ( playa pacifica in hermosa beach , ca ) which was removed from the same store portfolio due to a major renovation in which significant portions of the property are being taken offline for extended time periods . as of december 31 , 2015 , the property had 129 apartment units removed from service and an occupancy of only 27.9 % . this property will not return to the same store portfolio until it is stabilized for all of the current and comparable periods presented . ( 2 ) includes properties in various stages of lease-up and properties where lease-up has been completed but the properties were not stabilized for the comparable periods presented . ( 3 ) includes three properties containing 853 apartment units acquired on february 27 , 2013 in conjunction with the archstone acquisition that are owned by the company but the entire projects are master leased to a third party corporate housing provider and the company earns monthly net rental income . the company 's acquisition , disposition and completed development activities also impacted overall results of operations for the years ended december 31 , 2015 and 2014 . the impacts of these activities are discussed in greater detail in the following paragraphs . comparison of the year ended december 31 , 2015 to the year ended december 31 , 2014 for the year ended december 31 , 2015 , the company reported diluted earnings per share/unit of $ 2.36 compared to $ 1.73 44 per share/unit for the year ended december 31 , 2014 . the difference is primarily due to approximately $ 122.3 million in higher gains on property sales as well as improved operations in 2015 vs. 2014 . for the year ended december 31 , 2015 , income from continuing operations increased approximately $ 250.5 million when compared to the year

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources eqr issues public equity from time to time and guarantees certain debt of the operating partnership . eqr does not have any indebtedness as all debt is incurred by the operating partnership . as of january 1 , 2015 , the company had approximately $ 40.1 million of cash and cash equivalents and it had $ 2.12 billion available under its revolving credit facility ( net of $ 43.8 million which was restricted/dedicated to support letters of credit and net of $ 333.0 million outstanding ) . after taking into effect the various transactions discussed in the following paragraphs and the net cash provided by operating activities , the company 's cash and cash equivalents balance at december 31 , 2015 was approximately $ 42.3 million and the amount available on its revolving credit facility was $ 2.07 billion ( net of $ 45.1 million which was restricted/dedicated to support letters of credit and net of $ 387.5 million outstanding on the commercial paper program ) . during the year ended december 31 , 2015 , the company generated proceeds from various transactions , which included the following : ▪ disposed of eight consolidated properties and a 193,230 square foot medical office building , receiving net proceeds of approximately $ 504.7 million ; ▪ issued $ 450.0 million of ten-year 3.375 % fixed rate public notes , receiving net proceeds of $ 447.5 million before underwriting fees , hedge termination costs and other expenses , at an all-in effective interest rate of 3.81 % ; ▪ issued $ 300.0 million of thirty-year 4.50 % fixed rate public notes , receiving net proceeds of $ 298.9 million before 50 underwriting fees and other expenses , at an all-in effective interest rate of 4.55 % ; ▪ received approximately $ 51.0 million in distributions from the residual jv as a result of the winddown/sale of remaining assets owned by the residual jv and litigation settlements received by the residual jv ; and ▪ issued approximately 1.5 million common shares related to share option exercises and espp purchases and received net proceeds of $ 63.9 million , which were contributed to the capital of the operating partnership in exchange for

cole capital is contractually responsible for managing the affairs of the managed reits on a day-to-day basis , identifying and making acquisitions and investments on the managed reits ' behalf , and recommending to each of the managed reit 's respective board of directors an approach for providing investors with liquidity . cole capital receives compensation and reimbursement for services relating to these services . substantially all of our rei segment is conducted through the op . we are the sole general partner and holder of 97.4 % of the common equity interests in the op as of december 31 , 2014 , with the remaining 2.6 % common equity interests owned by certain unaffiliated investors . under the lpa , after holding units of limited partner interests in the op for a period of one year , unless otherwise consented to by us , holders of op units have the right to redeem the op units for the cash value of a corresponding number of shares of our common stock or , at our option , a corresponding number of shares of our common stock . the remaining rights of the holders of op units are limited , however , and do not include the ability to replace the general partner or to approve the sale , purchase or refinancing of the op 's assets . substantially all of the cole capital segment is conducted through cca , an arizona corporation and a wholly owned subsidiary of the op . cca is treated as a trs under the internal revenue code . prior to january 8 , 2014 , we retained the former manager to manage our affairs on a day-to-day basis with the exception of certain acquisition , accounting and portfolio management services performed by our employees . in august 2013 , our board of directors determined that it is in the best interests of us and our stockholders to become self-managed and we completed our transition to self-management on january 8 , 2014. see note 20 – related party transactions and arrangements to the consolidated financial statements . as of december 31 , 2014 , we owned 4,648 properties consisting of 103.1 million square feet , which were 99.3 % leased with a weighted-average remaining lease term of 11.8 years . in constructing our portfolio , we are committed to diversification by industry , tenant and geography . as of december 31 , 2014 , rental revenues derived from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 46.9 % ( we have attributed the rating of each parent company to its wholly owned subsidiary for purposes of this disclosure ) . our strategy encompasses receiving the majority of our revenue from investment grade and creditworthy tenants as we further acquire properties and enter into or assume lease arrangements . 48 recent mergers and major acquisitions and sales arct iv merger on july 1 , 2013 , we entered into an agreement and plan of merger , as amended on october 6 , 2013 and october 11 , 2013 , with arct iv , and certain subsidiaries of each company . the arct iv merger agreement provided for the merger of arct iv with and into a subsidiary of the op , which was consummated on january 3 , 2014. fortress portfolio acquisition on july 24 , 2013 , arc and another related entity , on behalf of the company and certain other entities sponsored directly or indirectly by arc , entered into a purchase and sale agreement with affiliates of funds managed by fortress for the purchase of 196 properties owned by fortress , for an aggregate contract purchase price of $ 972.5 million . of the 196 properties , 120 properties were allocated to and assigned by us . on october 1 , 2013 , we closed on 41 of the 120 properties with a total purchase price of $ 200.3 million , exclusive of closing costs . during the year ended december 31 , 2014 , we closed the acquisition of the remaining 79 properties in the fortress portfolio for an aggregate contract purchase price of $ 400.9 million , exclusive of closing costs . inland portfolio acquisition on august 8 , 2013 , arc and another related entity , on behalf of the company and certain other entities sponsored directly or indirectly by arc , entered into a purchase and sale agreement with inland for the purchase of the equity interests of 67 companies owned by inland for an aggregate contract purchase price of $ 2.3 billion . of the 67 companies , the equity interests of 10 companies holding in the aggregate 33 properties were acquired , in total , by us from inland for a purchase price of $ 501.0 million . as of december 31 , 2014 , we had closed on 32 of the 33 properties for a total purchase price of $ 288.2 million , exclusive of closing costs . the company will not close on the remaining one property . cole merger on october 22 , 2013 , arcp and a wholly-owned subsidiary entered into an agreement and plan of merger with cole , a publicly traded maryland corporation . the cole merger agreement provided for the merger of cole with and into arcp 's wholly owned subsidiary . the cole merger was consummated on february 7 , 2014. ccpt merger on march 17 , 2014 , arcp and a wholly-owned subsidiary entered into an agreement and plan of merger with ccpt , a maryland corporation . the ccpt merger agreement provided for the merger of ccpt with and into the wholly owned subsidiary of arcp . story_separator_special_tag the company recorded $ 3.3 million in impairment charges on real estate investments from continuing operations during the year ended december 31 , 2013 , but did not record any impairment on real estate investments from discontinued operations during that year . the company did not record any impairment on real estate investments from continuing operations during the year ended december 31 , 2012 , but did record $ 0.6 million of impairment charges from discontinued operations during that year . goodwill the company will evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value , by reporting unit , may not be recoverable . the company 's annual testing date is during the fourth quarter . the company tests goodwill for impairment by first comparing the carrying value of net assets to the fair value of each reporting unit . if the fair value is determined to be less than the carrying value or if qualitative factors indicate that it is more likely than not that goodwill is impaired , a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value . the company estimates the fair value of the reporting units using discounted cash flows and relevant competitor multiples . the evaluation of goodwill for potential impairment requires the company 's management to exercise significant judgment and to make certain assumptions . the use of different judgments and assumptions could result in different conclusions . the company tested the goodwill allocated to the cole capital segment for impairment during the three months ended december 31 , 2014 using an income approach . the assumptions utilized in the evaluation of the impairment of goodwill under the income approach include revenue growth rates , cash flows , earnings before income taxes , tax rates , capital expenditures , the weighted average cost of capital ( “ wacc ” ) and expected long-term growth rates ( residual growth rate ) . the assumptions which have the most significant effect on our valuations derived using a discounted cash flows methodology are : ( 1 ) revenue growth rate , ( 2 ) cash flow assumptions and ( 3 ) the discount rate . the cash flows utilized in the income approach are based on our most recent budgets , forecasts , and business plans as well as various growth rate assumptions for years beyond the current business plan period . long-term growth rates represent the expected long-term growth rate for the reporting unit , considering the industry in which we operate and the global economy . discount rate assumptions are based on an assessment of the risk inherent in the future revenue streams and cash flows and our wacc . the risk adjusted discount rate used represents the estimated wacc for our reporting unit . the carrying value of the cole capital reporting unit exceeded the estimated fair value at december 31 , 2014 and therefore the second step of the goodwill impairment analysis was performed to compute the amount of the impairment . as a result , the company recorded an impairment charge of $ 223.1 million during the three months ended december 31 , 2014 . 52 the company also tested the goodwill allocated to the rei segment for impairment during the three months ended december 31 , 2014 using a market approach . the assumptions utilized in the market approach include the selection of comparable companies , which are subject to change based on the economic characteristics of our reporting unit . adjusted funds from operations and funds from operations , each non-gaap supplemental financial performance measures , multiples for market comparable companies for the current and future fiscal periods were used to estimate the fair value of the reporting unit by applying those multiples to the projected financial information prepared by management . the carrying value of the rei reporting unit was $ 19.3 billion at december 31 , 2014 . the estimated fair value of the reporting unit exceeded its carrying value by 5 % . as such , no goodwill impairment was recorded during the three months ended december 31 , 2014 on the rei reporting segment . this reporting unit remains at risk for future impairment if the projected operating results are not met or other inputs into the fair value measurement change . we continue to monitor actual results versus forecasted results and external factors that may impact the fair value of the reporting unit . factors we are monitoring that may impact the fair value of the reporting unit include , but are not limited to , market comparable company multiples , interest rates , and global economic conditions . intangible assets the company evaluates intangible assets , which primarily consists of dealer manager and advisory contracts with the managed reits , for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable . the company will test intangible assets for impairment by first comparing the carrying value of the asset group to the undiscounted future cash flows expected from the use of the assets and their eventual disposition . in the event that such expected undiscounted future cash flows do not exceed the carrying amount , the company will adjust the intangible assets to their respective fair values and recognize an impairment loss .. the company will estimate the fair value the intangible assets using a discounted cash flow model specific to the managed reits that were included in the initial value of the intangible assets as of the cole acquisition date . the evaluation of goodwill for potential impairment requires the company 's management to exercise significant judgment and to make certain assumptions . the use of different judgments and assumptions could result in different conclusions . during the three months ended december 31 , 2014 , as a result

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows for the year ended december 31 , 2014 during the year ended december 31 , 2014 , net cash provided by operating activities was $ 502.9 million . the level of cash flows used in or provided by operating activities is affected by acquisition and transaction costs , the timing of interest payments , as well as the receipt of scheduled rent payments . cash flows provided by operating activities during the year ended december 31 , 2014 were mainly due to adjusted net income of $ 806.6 million ( net loss of $ 1.0 billion adjusted for non-cash items including the issuance of op units , depreciation and amortization , gain on sale of properties , equity-based compensation , gain on derivative instruments and gain on the early extinguishment of debt totaling $ 1.8 billion , in the aggregate ) , offset by a decrease in accounts payable and accrued expenses of $ 16.3 million , a decrease in prepaid and other assets of $ 97.1 million and a decrease in deferred rent , derivative and other liabilities of $ 99.9 million . net cash used in investing activities for the year ended december 31 , 2014 was $ 2.6 billion , primarily related to the total cash consideration of $ 756.2 million for the arct iv merger , cole merger and ccpt merger and $ 3.5 billion in the acquisition of 1,107 properties . the net cash used in investing activities was partially offset by the proceeds from the sale of properties of $ 1.6 billion , combined with the proceeds from the sale of investment securities of $ 159.8 million . net cash provided by financing activities was $ 2.4 billion during the year ended december 31 , 2014 related to proceeds from the issuance of corporate bonds of $ 2.5 billion , proceeds from mortgage notes payable of $ 1.0 billion and proceeds from the issuance of common stock of $ 1.6 billion .

we work with the management teams or financial sponsors to seek investments with historical cash flows , asset collateral or contracted pro-forma cash flows . we currently have nine origination strategies in which we make investments : ( 1 ) lending in private equity sponsored transactions , ( 2 ) lending directly to companies not owned by private equity firms , ( 3 ) control investments in corporate operating companies , ( 4 ) control investments in financial companies , ( 5 ) investments in structured credit , ( 6 ) real estate investments , ( 7 ) investments in syndicated debt , ( 8 ) aircraft leasing and ( 9 ) online lending . we continue to evaluate other origination strategies in the ordinary course of business with no specific top-down allocation to any single origination strategy . 64 lending in private equity sponsored transactions – we make loans to companies which are controlled by leading private equity firms . this debt can take the form of first lien , second lien , unitranche or unsecured loans . in making these investments , we look for a diversified customer base , recurring demand for the product or service , barriers to entry , strong historical cash flow and experienced management teams . these loans typically have significant equity subordinate to our loan position . historically , this strategy has comprised approximately 50 % -60 % of our business , but more recently it is less than 50 % of our business . lending directly to companies – we provide debt financing to companies owned by non-private equity firms , the company founder , a management team or a family . here , in addition to the strengths we look for in a sponsored transaction , we also look for the alignment with the management team with significant invested capital . this strategy often has less competition than the private equity sponsor strategy because such company financing needs are not easily addressed by banks and often require more diligence preparation . direct lending can result in higher returns and lower leverage than sponsor transactions and may include warrants or equity to us . historically , this strategy has comprised approximately 5 % -15 % of our business , but more recently it is less than 5 % of our business . control investments in corporate operating companies – this strategy involves acquiring controlling stakes in non-financial operating companies . our investments in these companies are generally structured as a combination of yield-producing debt and equity . we provide enhanced certainty of closure to our counterparties , give the seller personal liquidity and generally look for management to continue on in their current roles . this strategy has comprised approximately 10 % -15 % of our business . control investments in financial companies – this strategy involves acquiring controlling stakes in financial companies , including consumer direct lending , sub-prime auto lending and other strategies . our investments in these companies are generally structured as a combination of yield-producing debt and equity . these investments are often structured in a tax-efficient ric-compliant partnership , enhancing returns . this strategy has comprised approximately 5 % -15 % of our business . investments in structured credit – we make investments in clos , generally taking a significant position in the subordinated interests ( equity ) of the clos . the clos include a diversified portfolio of broadly syndicated loans and do not have direct exposure to real estate , mortgages , debt or consumer based debt . the clos in which we invest are managed by top-tier collateral managers that have been thoroughly diligenced prior to investment . this strategy has comprised approximately 10 % -20 % of our business . real estate investments – we make investments in real estate through our wholly-owned tax-efficient real estate investment trust ( “ reit ” ) nprc , the surviving entity of the may 23 , 2016 merger with aprc and uprc . our real estate investments are in various classes of fully developed and occupied real estate properties that generate current yields . we seek to identify properties that have historically high occupancy and steady cash flow generation . nprc co-invests with established and experienced property managers that manage such properties after acquisition . this investment strategy has comprised approximately 5 % -10 % of our business . investments in syndicated debt – on an opportunistic basis , we make investments in loans and high yield bonds that have been sold to a syndicate of buyers . here we look for investments with attractive risk-adjusted returns after we have completed a fundamental credit analysis . these investments are purchased with a long term , buy-and-hold outlook and we look to provide significant structuring input by providing anchoring orders . this strategy has comprised approximately 5 % -10 % of our business . aircraft leasing – we invest in debt as well as equity in aircraft assets subject to commercial leases to credit-worthy airlines across the globe . these investments present attractive return opportunities due to cash flow consistency from long-lived assets coupled with hard asset collateral . we seek to deliver risk-adjusted returns with strong downside protection by analyzing relative value characteristics across the spectrum of aircraft types of all vintages . our target portfolio includes both in-production and out-of-production jet and turboprop aircraft and engines , operated by airlines across the globe . this strategy comprised approximately 1 % of our business . online lending – we make investments in loans originated by certain consumer loan and small and medium sized business ( “ sme ” ) loan facilitators . we purchase each loan in its entirety ( i.e . , a “ whole loan ” ) . the borrowers are consumers and smes . the loans are typically serviced by the facilitators of the loans . this investment strategy has comprised approximately 4 % -7 % of our business . story_separator_special_tag on october 21 , 2015 , aderant north american , inc. repaid the $ 7,000 loan receivable to us . on october 30 , 2015 , we restructured our investment in cp energy . concurrent with the restructuring , we exchanged our $ 86,965 senior secured loan and $ 15,924 subordinated loan for series b redeemable preferred stock in cp energy . on october 30 , 2015 , we restructured our investment in freedom marine . concurrent with the restructuring , we exchanged our $ 32,500 senior secured loans for additional membership interest in freedom marine . on november 16 , 2015 and november 25 , 2015 , we sold our $ 14,755 debt investment in american gilsonite company ( “ american gilsonite ” ) . we realized a loss of $ 4,127 on the sale . on november 30 , 2015 , tolt solutions , inc. repaid the $ 96,382 loan receivable to us . on december 23 , 2015 , stauber performance ingredients , inc. repaid the $ 16,811 loan receivable to us . on january 21 , 2016 , we sold 100 % of our cifc funding 2011-i , ltd. class e and class d notes with a cost basis of $ 29,004. we realized a gain of $ 3,911 on the sale . on march 22 , 2016 and march 24 , 2016 , united sporting company , inc. partially repaid the $ 17,391 loan receivable to us . during the year ended june 30 , 2016 , we sold our $ 16,100 debt investment in icon health and fitness , inc ( “ icon ” ) . we realized a loss of $ 1,170 on the sale . during the year ended june 30 , 2016 , our remaining investment in new century transportation , inc. was written-off for tax purposes and a loss of $ 187 was realized . during the year ended june 30 , 2016 , our remaining investment in wind river resources corporation ( “ wind river ” ) was written-off for tax purposes and a loss of $ 3,000 was realized . during the period from may 3 , 2016 through may 10 , 2016 , we collectively sold 72.10 % of the outstanding principal balance of the senior secured term loan a investment in trinity for $ 25,000. there was no gain or loss realized on the sale . on may 31 , 2016 , we sold our investment in harbortouch payments , llc ( “ harbortouch ” ) for total consideration of $ 328,032 , including fees and escrowed amounts . prior to the sale , $ 154,382 of senior secured term loan b loan outstanding was 73 converted to preferred equity . we received a repayment of $ 146,989 loans receivable to us and $ 157,639 of proceeds related to the equity investment . we recorded a realized loss of $ 5,419 related to the sale . we also received a $ 5,145 prepayment premium for early repayment of the outstanding loans , which was recorded as interest income in the year ended june 30 , 2016 and a $ 12,909 advisory fee for the transaction , which was recorded as other income in the year ended june 30 , 2016. in addition , there is $ 5,350 being held in escrow which will be recognized as additional realized gain if and when it is received . concurrent with the sale , we made a $ 27,500 second lien secured investment in harbortouch . during the year ended june 30 , 2016 , we received partial repayments of $ 115,532 of our loans previously outstanding and $ 12,396 as a return of capital on our equity investment in nprc . during the period from july 1 , 2015 through may 23 , 2016 , we received a partial repayment of $ 29,703 of our loan previously outstanding with aprc and recorded $ 11,016 of dividend income from aprc in connection with the sale of its vista palma sola ( “ vista ” ) property . during the period from july 1 , 2015 through may 23 , 2016 , we received a partial repayment of $ 7,567 of our loan previously outstanding with uprc . the following table provides a summary of our investment activity for each quarter within the three years ending june 30 , 2016 : replace_table_token_11_th ( 1 ) includes investments in new portfolio companies , follow-on investments in existing portfolio companies , refinancings and pik interest . ( 2 ) includes sales , scheduled principal payments , prepayments and refinancings . investment valuation in determining the range of values for debt instruments , except clos and debt investments in controlling portfolio companies , management and the independent valuation firm estimated corporate and security credit ratings and identified corresponding yields to maturity for each loan from relevant market data . a discounted cash flow analysis was then prepared using the appropriate yield to maturity as the discount rate , to determine a range of values . in determining the range of values for debt investments of controlled companies and equity investments , the enterprise value was determined by applying earnings before income tax , depreciation and amortization ( “ ebitda ” ) multiples , the discounted cash flow technique , net income and or book value multiples for similar guideline public companies and or similar recent investment transactions . for stressed equity investments , a liquidation analysis was prepared . during the year ended june 30 , 2016 , we changed the valuation methodology for our reits portfolio ( american property reit corp. ( “ aprc ” ) , national property reit corp. ( “ nprc ” ) , and united property reit corp. ( “ uprc ” ) ) from averaging the net asset value and dividend yield method to averaging the net asset value and discounted cash flow method utilizing capitalization rates for similar guideline companies and or similar recent investment transactions

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

debt issuances and redemptions during the three months ended june 30 , 2016 , we issued $ 13,573 aggregate principal amount of prospect capital internotes® for net proceeds of $ 13,403 . these notes were issued with stated interest rates of 5.50 % with a weighted average interest rate of 5.50 % . these notes mature between april 15 , 2021 and june 15 , 2021 . the following table summarizes the prospect capital internotes® issued during the three months ended june 30 , 2016 . tenor at origination ( in years ) principal amount interest rate range weighted average interest rate maturity date range 5 $ 13,573 5.50 % 5.50 % april 15 , 2021 – june 15 , 2021 during the three months ended june 30 , 2016 , we repaid $ 3,300 aggregate principal amount of prospect capital internotes® at par in accordance with the survivor 's option , as defined in the internotes® offering prospectus . as a result of these transactions , we recorded a loss in the amount of the difference between the reacquisition price and the net carrying amount of the notes , net of the proportionate amount of unamortized debt issuance costs . the net gain on the extinguishment of prospect capital internotes® in the three months ended june 30 , 2016 was $ 310 . on june 16 , 2016 , we entered into an at-the-market program with fbr capital markets & co. through which we could sell , by means of at-the-market offerings , from time to time , up to $ 100,000 in aggregate principal amount of our existing 2024 notes . during the period from june 28 , 2016 to june 30 , 2016 , we issued $ 1,380 in aggregate principal amount of our 2024 notes for net proceeds of $ 1,247 after commissions and offering costs . equity issuances on april 21 , 2016 , may 19 , 2016 and june 23 , 2016 , we issued 324,060 , 338,027 and 331,367 shares of our common stock in connection with the dividend reinvestment plan , respectively .

reorganization of gross sales by categories and brand in 2019 although there were no changes to mattel 's commercial operations that impacted its operating segments , in the first quarter of 2019 , mattel modified its reporting structure for revenues , as outlined below , and reorganized its regional sales reporting structure within the international segment . prior period amounts have been reclassified to conform to the current period presentation . gross sales by categories are presented as follows : dolls —including brands such as barbie , american girl , enchantimals , and polly pocket . infant , toddler , and preschool —including brands such as fisher-price and thomas & friends , power wheels , fireman sam , and shimmer and shine ( nickelodeon ) . vehicles —including brands such as hot wheels , matchbox , and cars ( disney pixar ) . action figures , building sets , and games —including brands such as mega , uno , toy story ( disney pixar ) , jurassic world ( nbcuniversal ) , and wwe . 28 the following table provides a summary of mattel 's consolidated gross sales by categories , along with supplemental information by brand for the years ended december 31 , 2018 and 2017 , based on mattel 's current reporting structure for revenues : replace_table_token_3_th the following table provides a summary of mattel 's consolidated gross sales by brand results for the years ended december 31 , 2018 and 2017 , as presented in mattel 's annual report on form 10-k/a for the year ended december 31 , 2018 : replace_table_token_4_th 29 results of operations 2019 compared to 2018 consolidated results net sales for 2019 were $ 4.50 billion , as compared to $ 4.51 billion in 2018 . net loss for 2019 was $ 213.5 million , or $ 0.62 loss per share , as compared to a net loss of $ 533.3 million , or $ 1.55 loss per share , in 2018 , primarily due to higher gross profit and lower selling and administrative expenses . net loss for 2019 included the impact of approximately $ 38 million related to the inclined sleeper product recalls , of which approximately $ 6 million was a reduction to net sales , approximately $ 22 million was included in cost of sales , and approximately $ 10 million was included in other selling and administrative expenses . net loss for 2018 includes a sales reversal of approximately $ 30 million and bad debt expense , net of approximately $ 32 million as a result of the toys `` r `` us liquidation . the following table provides a summary of mattel 's consolidated results for 2019 and 2018 : replace_table_token_5_th n/m - not meaningful 30 sales net sales for 2019 were $ 4.50 billion as compared to $ 4.51 billion in 2018 . the following table provides a summary of mattel 's consolidated gross sales by categories , along with supplemental information by brand for 2019 and 2018 : replace_table_token_6_th ( a ) mattel modified its reporting structure for revenues in the first quarter of 2019 to disclose revenues by categories . gross sales were $ 5.06 billion in 2019 , as compared to $ 5.08 billion in 2018 , with an unfavorable impact from changes in currency exchange rates of 2 percentage point s. gross sales in 2018 included the toys `` r `` us sales reversal of approximately $ 30 million . the decrease in gross sales was primarily due to lower sales of infant , toddler , and preschool , substantially offset by higher sales of action figures , building sets , and games . gross sales of dolls remained flat year-over-year , with declines of american girl products , primarily driven by lower sales in proprietary retail and direct channels , substantially offset by higher sales of barbie products , primarily driven by strong brand pos momentum in concert with barbie 's 60th anniversary . of the 11 % decrease in infant , toddler , and preschool gross sales , 5 % was due to lower sales of fisher-price friends products , primarily driven by the rationalization of licensing partnerships , and 4 % was due to lower sales of fisher-price and thomas & friends products . of the 3 % increase in vehicles gross sales , 8 % was due to higher sales of hot wheels products , primarily due to higher sales of diecast cars , and tracks and playsets products , partially offset by lower sales of cars products of 3 % and lower sales of jurassic world products of 1 % following their movie launches in prior years . of the 14 % increase in action figures , building sets , and games gross sales , 22 % was due to initial sales of toy story 4 products coinciding with its 2019 theatrical release , partially offset by lower sales of jurassic world products of 8 % following the movie launch in the prior year . 31 cost of sales cost of sales as a percentage of net sales was 56.0 % in 2019 , as compared to 60.2 % in 2018 . cost of sales in 2019 included the impact of approximately $ 22 million related to the inclined sleeper product recalls . cost of sales decreased by $ 192.3 million , or 7 % , to $ 2.52 billion in 2019 from $ 2.72 billion in 2018 , as compared to flat net sales . within cost of sales , product and other costs decreased by $ 149.8 million , or 7 % , to $ 2.00 billion in 2019 from $ 2.15 billion in 2018 ; freight and logistics expenses decreased by $ 38.8 million , or 11 % , to $ 305.4 million in 2019 from $ 344.2 million in 2018 ; and royalty expense decreased by $ 3.7 million , or 2 % , to $ 220.2 million in 2019 from $ 224.0 story_separator_special_tag seasonal financing see item 8 `` financial statements and supplementary data—note 5 to the consolidated financial statements—seasonal financing and debt . `` credit rating in 2019 , fitch maintained mattel 's long-term credit rating of b- and changed its outlook from negative to positive . in 2019 , moody 's maintained mattel 's long-term credit rating of b1 , with a stable outlook . in 2019 , standard & poor 's maintained mattel 's long-term credit rating of bb- , with a negative outlook . financial position mattel 's cash and equivalents increased $ 35.5 million to $ 630.0 million at december 31 , 2019 , as compared to $ 594.5 million at december 31 , 2018 . the increase was primarily due to cash provided by operating activities , partially offset by capital expenditures and debt issuance costs related to refinancing of senior notes . accounts receivable decreased $ 33.7 million to $ 936.4 million at december 31 , 2019 , as compared to $ 970.1 million at december 31 , 2018 . the decrease in accounts receivable was primarily due to lower fourth quarter sales . inventory decreased $ 47.4 million to $ 495.5 million at december 31 , 2019 , as compared to $ 542.9 million at december 31 , 2018 . the decrease in inventory was primarily due to tighter inventory control and better demand management , and lower product costs as a result of structural simplification cost savings . accounts payable and accrued liabilities remained flat at $ 1.23 billion at december 31 , 2019 and 2018 . the change in accounts payable and accrued liabilities was due to the establishment of short term lease liabilities in 2019 upon adoption of the new lease standard offset by lower accounts payable as a result of timing of payments . as of december 31 , 2019 and 2018 , mattel had $ 0 and $ 4.2 million , respectively , of short-term borrowings outstanding . 38 a summary of mattel 's capitalization is as follows : replace_table_token_10_th total long-term debt remained flat at $ 2.8 billion at december 31 , 2019 . mattel used the proceeds from the issuance of $ 600.0 million aggregate principal amount of 5.875 % senior unsecured notes due december 15 , 2027 ( `` 2019 senior notes `` ) to redeem and retire its $ 250.0 million of 2010 senior notes due october 2020 and $ 350.0 million of 2016 senior notes due august 2021 . stockholders ' equity decreased $ 175.2 million to $ 491.7 million at december 31 , 2019 , as compared to $ 666.9 million at december 31 , 2018 , primarily due to the net loss for the year . off-balance sheet arrangements mattel is required to provide standby letters of credit to support certain obligations that arise in the ordinary course of business and may choose to provide letters of credit in place of posting cash collateral . although the letters of credit are off-balance sheet , the majority of the obligations in which they relate are reflected as liabilities in the consolidated balance sheets . outstanding letters of credit totaled approximately $ 57 million as of december 31 , 2019 . commitments in the normal course of business , mattel enters into debt agreements , and contractual arrangements to obtain and protect mattel 's right to create and market certain products and for future purchases of goods and services to ensure availability and timely delivery . these arrangements include commitments for royalty payments pursuant to licensing agreements , which routinely contain provisions for guarantees or minimum expenditures during the terms of the contracts , and future inventory and service purchases . mattel also has defined benefit and postretirement benefit plans , which require future cash contributions and benefit payments . additionally , mattel routinely enters into noncancelable lease agreements for premises and equipment used , which contain minimum rental payments . 39 the following table summarizes mattel 's contractual commitments and obligations : replace_table_token_11_th liabilities for uncertain tax positions for which a cash tax payment is not expected to be made in the next twelve months are classified as other noncurrent liabilities . due to the uncertainty about the periods in which examinations will be completed and limited information related to current audits , mattel is not able to make reasonably reliable estimates of the periods in which cash settlements will occur with taxing authorities for the noncurrent liabilities . litigation the content of item 8 `` financial statements and supplementary data—note 12 to the consolidated financial statements—commitments and contingencies—litigation `` is hereby incorporated by reference in this item 7. effects of inflation inflation rates in the u.s. and in major foreign countries where mattel does business have not had a significant impact on its results of operations or financial position during 2019 or 2018 . mattel receives some protection from the impact of inflation from high turnover of inventories and its ability , under certain circumstances and at certain times , to pass on higher prices to its customers . employee savings plan mattel sponsors a 401 ( k ) savings plan , the mattel , inc. personal investment plan ( the `` plan `` ) , for its domestic employees . contributions to the plan include voluntary contributions by eligible employees and employer automatic and matching contributions by mattel . the plan allows employees to allocate both their voluntary contributions and their employer automatic and matching contributions to a variety of investment funds , including a fund that is invested in mattel common stock ( the `` mattel stock fund `` ) . employees are not required to allocate any of their plan account balance to the mattel stock fund , allowing employees to limit or eliminate their exposure to market changes in mattel 's stock price . furthermore , the plan limits the percentage of the employee 's total account balance that may be allocated to the mattel stock fund to 25

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources mattel 's primary sources of liquidity are its cash and equivalents balances , including access to earnings of its foreign subsidiaries , short-term borrowing facilities , including its $ 1.60 billion senior secured revolving credit facilities ( `` the senior secured revolving credit facilities '' ) , and issuances of long-term debt securities . cash flows from operating activities could be negatively impacted by decreased demand for mattel 's products , which could result from factors such as adverse economic conditions and changes in public and consumer preferences , or by increased costs associated with manufacturing and distribution of products or shortages in raw materials or component parts . additionally , mattel 's ability to issue long-term debt and obtain seasonal financing could be adversely affected by factors such as global economic crises and tight credit environments , an inability to meet its debt covenant requirements and its senior secured revolving credit facility covenants , or a deterioration of mattel 's credit ratings . mattel 's ability to conduct its operations could be negatively impacted should these or other adverse conditions affect its primary sources of liquidity . 36 of mattel 's $ 630.0 million in cash and equivalents as of december 31 , 2019 , approximately $ 338 million was held by foreign subsidiaries . mattel has several liquidity options to fund its operations and obligations ; such obligations may include investing and financing activities such as debt service , dividends , and share repurchases . cash flows generated by its worldwide operations , the senior secured revolving credit facilities , alternative forms of financing , and access to capital markets are available to fund mattel 's operations and obligations . the u.s. tax act , enacted on december 22 , 2017 , provides mattel with a reduced cost to access the earnings of its foreign subsidiaries .

the act provides for modest sequester relief in fy14 and provides the dod additional stability and flexibility to entertain multi-year contracts . while we monitor the budget process as it relates to programs in which we participate , we can not predict the ultimate impact of future dod budgets , which tend to fluctuate year-by-year and program-by-program . as a result , some of the budget reductions and program cancellations may negatively impact programs in which we participate . in our ground defense market , we anticipate ground vehicle upgrades and modernization programs to continue to be funded over the next five years , although the timing is uncertain following years of rapid growth from the supplemental defense budgets and the ongoing draw down of our forces from overseas operations . additionally , we expect to benefit from increased funding levels on c4isr , electronic warfare , unmanned systems , and communications programs within our aerospace defense market . in our naval defense market , we expect continued funding for the u.s. shipbuilding program , particularly as it relates to production on the cvn-79 ford class aircraft carrier . commercial aerospace approximately 17 % of our revenue is derived from the global commercial aerospace market , including the commercial jet , regional jet , and commercial helicopter markets . our primary focus in this market is oem products and services for commercial jets where we provide a combination of flight control and utility actuation systems , sensors , and other sophisticated electronics , as well as shot and laser peening services , to our primary customers , in boeing and airbus . shot and laser peening are also utilized on highly stressed components of turbine engine fan blades , landing gear , and aircraft structures . the largest driver of our commercial aerospace business is oem parts , which is highly dependent on new aircraft production . industry data supports a solid increase in commercial aircraft deliveries over the next few years , as 2011 marked the first year in a multi-year production up-cycle for the commercial aerospace market . in the current cycle , oem-oriented companies are expected to perform well , due to planned increases in production by boeing and airbus , on both legacy and new aircraft , with record-high backlogs on the latter . in addition , according to the international air transport association ( iata ) , air travel continues to be robust and is likely to reach almost 3.3 billion passenger miles in 2014 , although air freight is likely to remain relatively flat . as such , following a solid performance over the past three years , the commercial aerospace business is expected to continue its growth in 2014. industry experts also expect a modest growth outlook for both regional and business jets . oil and gas approximately 18 % of our revenue is derived from the oil and gas market . we have a diverse offering of products to the oil and gas market , including critical-function valves , valve systems , large process vessels , control electronics , and surface treatment services on highly stressed metal components . late in 2012 , we expanded our offering to service the emerging shale oil and gas market , including hydraulic fracturing ( fracking ) techniques , and are now able to support upstream , midstream and downstream product offerings . we also maintain a significant mro business that has been growing steadily for our pressure-relief valve technologies as refineries opportunistically service or upgrade equipment that has been operating at full capacity in recent years . in 2013 , our oil and gas revenues were diversified between the upstream production , processing and environmental solutions business , our global mro business , and our large capital projects business . 27 the most prevalent driver impacting this market is capital spending by refiners for maintenance , upgrades , capacity expansion , safety improvements , and compliance with environmental regulations , which is experienced by both our domestic and international customers . refiner profitability and global crude oil prices in general will impact their capital spending levels . in 2013 , the oil and gas market continued to be hampered by a reduction in new capital equipment orders due to a lack of capital spending , particularly in international markets , despite a strong rebound in mro activity . crude oil prices , based on west texas intermediate ( wti ) , averaged slightly less than $ 98/bbl in 2013 , reflecting generally moderate economic activity in the u.s. and europe and increasing north american supply . wti crude oil prices are forecasted to average $ 93/bbl in 2014 and $ 90/bbl during 2015 , according to the energy information administration ( eia ) , reflecting higher total crude oil production in 2013 despite ongoing uncertainty in several international markets . eia expects the discount of the wti crude oil price to brent crude oil to average $ 12/bbl in 2014. this increase in the projected wti discount reflects increasing uncertainty of the existing refinery infrastructure 's ability to absorb growing production of light sweet crude oil in north america at current prices . looking ahead , we believe a base level of maintenance capital spending will result in continued mro demand . furthermore , as global economies continue to rebound , we anticipate a modest turnaround in our large capital projects business . this includes our complete coker deheading system , which enables safer coke drum operation during the refining process . we also will look to capitalize on opportunities in the emerging shale oil and gas market , where we supply energy production and processing equipment and environmental solutions . longer term , as global dependence on natural resources persists , oil exploration deepens , and transport requirements widen , we anticipate additional opportunities will arise for energy products . story_separator_special_tag the increase in pension expense was primarily due to a decrease in the discount rate of our pension benefit obligation . interest expense interest expense increased $ 5 million to $ 26 million in 2012 , primarily due to higher average debt levels and borrowing rates compared to the same period in 2011. effective tax rate our effective tax rates for 2012 and 2011 were 31.8 % , and 28.9 % , respectively . the increase in the effective tax rate in 2012 , as compared to 2011 , is primarily due to a $ 4.1 million research and development tax credit recognized in 2011 that did not recur in the current year period . net earnings net earnings decreased $ 26 million to $ 92 million in 2012 , as compared to the prior year period , primarily due to the impacts of the strike and additional investments on the ap1000 program within our flow control segment , restructuring costs in our surface technologies segment , and higher interest expense and effective tax rates discussed above . 33 comprehensive income pension and postretirement adjustments for 2012 , the $ 16 million pension and postretirement loss in other comprehensive income was mainly due to the actuarial loss resulting from the annual year-end remeasurement . this was driven by a decrease in the cw plan discount rate from 4.5 % to 4.0 % and was partially offset by favorable asset return performance . foreign currency translation adjustments the increase in foreign currency translation adjustments to comprehensive income of $ 44 million , to $ 26 million in comprehensive income , for the twelve months ended december 31 , 2012 is primarily due to an increase in the canadian , british pound , and euro exchange rates during the twelve month period ended december 31 , 2012 as compared to an decrease in the canadian , british pound , and euro exchange rate during the twelve month period ended december 31 , 2011. backlog and new orders backlog decreased 2 % to $ 1,654 million at december 31 , 2012 from $ 1,695 million at december 31 , 2011. new orders decreased $ 48 million in 2012 as compared to the prior year period , primarily due to the timing of funding on certain naval defense programs and lower demand of capital refinery projects and services in the oil and gas market . acquisitions , net of divestitures , contributed $ 86 million of incremental new orders . results by business segment flow control the following tables summarize sales , operating income and margin , and new orders , and certain items impacting comparability within the flow control segment . replace_table_token_11_th ( 1 ) on august 24 , 2012 , workers at emd 's cheswick , pennsylvania facility went on strike . the financial impacts of the strike were an $ 18 million and $ 6 million shift in revenue and operating income , respectively , from 2012 to 2013 , due to the temporary suspension of work and an additional $ 5 million unfavorable impact to operating income as a result of unrecoverable absorption of overhead costs . on september 24 , 2012 , the company ratified an agreement with the union to end the strike . 34 components of sales and operating income growth ( decrease ) : replace_table_token_12_th year ended december 31 , 2013 compared to year ended december 31 , 2012 sales sales increased $ 204 million , or 19 % , to $ 1,300 million , as compared to the prior year period , primarily due to the incremental impact of our cimarron , phönix , and ap services acquisitions , which contributed $ 135 million , $ 53 million , and $ 17 million , of incremental sales , respectively . sales in the defense market increased 6 % due to increased production on the cvn -79 aircraft carrier program , the ramping up of production on the virginia class submarine program , and a new shipboard helicopter handling systems contract . this was partially offset by lower levels of production on the ddg-1000 and ddg-51 destroyer programs , and completion of production on the advanced arresting gear program . sales in the commercial market increased 24 % , primarily due to the incremental impact of our cimarron and phönix acquisitions , which favorably impacted sales in the oil and gas market , as well as our ap services acquisition , which favorably impacted sales in the power generation market . in the power generation market , excluding the impact of our ap services acquisition , higher sales of instrumentation and control products and deliveries of our spent fuel management netco snap-in® product used in existing operating reactors , more than offset competitive pressure from low natural gas prices and fewer plant outages . sales in the oil and gas market were essentially flat , excluding the impact of phönix and cimarron acquisitions , as increased pressure relief valve sales were mostly offset by lower levels of production for international capital refinery products . in the general industrial market , lower sales were primarily due to a previously announced customer loss . operating income operating income increased $ 38 million , or 48 % , to $ 117 million , and operating margin increased 180 basis points to 9.0 % . acquisitions contributed $ 9 million of incremental operating income . excluding the items impacting comparability noted in the first table above and the contributions from acquisitions , operating income was essentially flat as higher compensation costs partially offset improved performance in our oil and gas division as a result of in-sourcing cimarron manufacturing . backlog and new orders backlog decreased $ 29 million to $ 1,059 million as compared to the prior year period . new orders increased $ 256 million to $ 1,234 million , from the prior year period , primarily due to incremental new orders from acquisitions of $ 210 million .

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

debt issuances on february 26 , 2013 , the corporation issued $ 400 million of senior notes ( the `` 2013 notes '' ) . the 2013 notes consist of $ 225 million of 3.70 % senior notes that mature on february 26 , 2023 , $ 100 million of 3.85 % senior notes that mature on february 26 , 2025 , and $ 75 million of 4.05 % senior notes that mature on february 26 , 2028. an additional $ 100 million of 4.11 % senior notes were issued on september 26 , 2013 that mature on september 26 , 2028. the 2013 notes are senior unsecured obligations , equal in right of payment to the corporation 's existing senior indebtedness . the corporation , at its option , can prepay at any time all or any part of the 2013 notes , subject to a make-whole payment in accordance with the terms of the note purchase agreement . in connection with the issuance of the 2013 notes , the corporation paid customary fees that have been deferred and are being amortized over the term of the 2013 notes . under the terms of the note purchase agreement , the corporation is required to maintain certain financial ratios , the most restrictive of which is a debt to capitalization limit of 60 % . the debt to capitalization ratio is calculated using the same formula for all of the corporation 's debt agreements and is a measure of the corporation 's indebtedness ( as defined per the notes purchase agreement and credit agreement ) to capitalization , where capitalization equals debt plus equity . the corporation had the ability to borrow additional debt of $ 1.3 billion without violating our debt to capitalization covenant . the 2013 notes also contain a cross default provision with respect to the corporation 's other senior indebtedness . in september 2013 , we repaid the $ 125 million 2003 senior notes that had matured .

factors that may materially affect such forward-looking statements and projections include : adverse developments in economic conditions and , particularly , in conditions in the automotive and transportation industries ; volatility in the capital , credit and commodities markets ; our inability to successfully execute on our growth strategy ; the outcome or timing of our previously announced comprehensive review of strategic alternatives to maximize shareholder value ; increased competition ; reduced demand for some of our products as a result of improved safety features on vehicles , insurance company influence , new business models or new methods of travel ; risks of the loss or change in purchasing levels of any of our significant customers or the consolidation of msos , distributors and or body shops ; our reliance on our distributor network and third-party delivery services for the distribution and export of certain of our products ; credit risk exposure from our customers ; price increases or business interruptions in our supply of raw materials ; failure to develop and market new products and manage product life cycles ; 34 business disruptions , security threats and security breaches , including security risks to our information technology systems ; risks associated with our outsourcing strategies ; risks associated with our non-u.s. operations ; currency-related risks ; terrorist acts , conflicts , wars , natural disasters , pandemics and other health crises that may materially adversely affect our business , financial condition and results of operations ; risks associated with the united kingdom 's withdrawal from the european union ; failure to comply with the anti-corruption laws of the united states and various international jurisdictions ; failure to comply with anti-terrorism laws and regulations and applicable trade embargoes ; risks associated with protecting data privacy ; significant environmental liabilities and costs as a result of our current and past operations or products , including operations or products related to our business prior to our acquisition of dupont performance coatings ; transporting certain materials that are inherently hazardous due to their toxic nature ; litigation and other commitments and contingencies ; ability to recruit and retain the experienced and skilled personnel we need to compete ; unexpected liabilities under any pension plans applicable to our employees ; work stoppages , union negotiations , labor disputes and other matters associated with our labor force ; our ability to protect and enforce intellectual property rights ; intellectual property infringement suits against us by third parties ; our ability to realize the anticipated benefits of any acquisitions and divestitures ; our joint ventures ' ability to operate according to our business strategy should our joint venture partners fail to fulfill their obligations ; risk that the insurance we maintain may not fully cover all potential exposures ; risks associated with changes in tax rates or regulations , including unexpected impacts of the new u.s. tcja legislation , which may differ with further regulatory guidance and changes in our current interpretations and assumptions ; our substantial indebtedness ; our ability to obtain additional capital on commercially reasonable terms may be limited ; any statements of belief and any statements of assumptions underlying any of the foregoing ; other factors disclosed in this annual report on form 10-k and our other filings with the securities and exchange commission ; and other factors beyond our control . these cautionary statements should not be construed by you to be exhaustive and are made only as of the date of this annual report on form 10-k. we undertake no obligation to update or revise any forward-looking statements , whether as a result of new information , future events or otherwise . overview we are a leading global manufacturer , marketer and distributor of high performance coatings systems . we have over a 150 -year heritage in the coatings industry and are known for manufacturing high-quality products with well-recognized brands supported by market-leading technology and customer service . our diverse global footprint of 48 manufacturing facilities , four technology centers , 54 customer training centers and approximately 14,000 people allows us to meet the needs of customers in over 130 countries . we serve our customer base through an extensive sales force and technical support organization , as well as through approximately 4,000 independent , locally based distributors . 35 we operate our business in two operating segments , performance coatings and transportation coatings . our segments are based on the type and concentration of customers served , service requirements , methods of distribution and major product lines . through our performance coatings segment , we provide high-quality liquid and powder coatings solutions to a fragmented and local customer base . we are one of only a few suppliers with the technology to provide precise color matching and highly durable coatings systems . the end-markets within this segment are refinish and industrial . through our transportation coatings segment , we provide advanced coating technologies to oems of light and commercial vehicles . these increasingly global customers require a high level of technical support coupled with cost-effective , environmentally responsible , coatings systems that can be applied with a high degree of precision , consistency and speed . the end-markets within this segment are light vehicle and commercial vehicle . business highlights general business highlights our net sales decreased 4.6 % for the year ended december 31 , 2019 compared to the year ended december 31 , 2018 , primarily driven by a net decrease in volumes of 4.8 % , which included the impacts of the sale of our consolidated joint venture net of acquisitions , which contributed to a decrease of 1.1 % in volumes , as well as the impacts of unfavorable foreign currency translation of 3.0 % . partially offsetting the decline in volumes during the period was an increase in higher average selling prices and product mix of 3.2 % . story_separator_special_tag , primarily related to the weakening of the euro and chinese renminbi compared to the u.s. dollar interest expense , net replace_table_token_11_th interest expense , net increased primarily due to the following : n increases in average interest rates due to libor increases on our variable rate debt over the comparable period n increase associated with imputed interest on higher average lease liability balances resulting from the new accounting standard adopted on january 1 , 2019 , which were lower under the historical standard , from $ 2.6 million during 2018 to $ 3.5 million during 2019 partially offset by : n weakening of the euro compared to the u.s. dollar of 2.4 % n favorable impacts of our derivative instruments and full year impacts of the 2018 refinancing other ( income ) expense , net replace_table_token_12_th other income , net in 2019 and other expense , net in 2018 changed due to the following : n reduction in debt extinguishment and refinancing related costs of $ 9.3 million , from $ 9.5 million to $ 0.2 million during 2018 and 2019 , respectively n increase in other miscellaneous income , net of $ 9.0 million , from $ 3.8 million during 2018 to $ 12.8 million during 2019 n reduction in foreign exchange losses , net of $ 0.9 million , from $ 9.2 million during 2018 to $ 8.3 million during 2019 42 provision for income taxes replace_table_token_13_th replace_table_token_14_th ( 1 ) primarily related to earnings in bermuda , germany , luxembourg , and switzerland . ( 2 ) $ 14.4 million relates to an adjustment for certain tax attributes for which the company has determined are no longer realizable . this is mostly offset by a tax benefit of $ 12.7 million for the decrease to the valuation allowance on the tax attributes previously recorded as a result of changes under u.s. tax reform . ( 3 ) primarily related to the realizability of certain interest carryforwards . segment results the company 's products and operations are managed and reported in two operating segments : performance coatings and transportation coatings . see note 20 to the consolidated financial statements included elsewhere in this annual report on form 10-k for additional information . performance coatings segment net sales replace_table_token_15_th net sales decreased due to the following : n lower organic volumes across both end-markets as industrial production trends provided an unfavorable impact on most regions , while refinish was mostly stable n unfavorable impacts of currency translation , due primarily to the weakening of the euro , chinese renminbi , brazilian real and argentine peso compared to the u.s. dollar n negative impacts as a result of the sale of a consolidated joint venture interest within our industrial end-market , as noted in note 3 to the consolidated financial statements included elsewhere in this annual report on form 10-k partially offset by : n higher average selling prices across both end-markets and all regions 43 adjusted ebit replace_table_token_16_th 2019 compared to 2018 adjusted ebit increased due to the following : n higher average selling prices across both end-markets and all regions n lower operating expenses across both end-markets resulting from operational efficiencies associated with our cost savings initiatives as well as lower costs to support net sales partially offset by : n lower organic volumes across both end-markets and all regions n higher raw materials costs across both end-markets n unfavorable impacts of currency translation , due primarily to the weakening of the euro , chinese renminbi and argentine peso compared to the u.s. dollar 2018 compared to 2017 adjusted ebit increased due to the following : n increases in sales volumes , including the impacts of acquisitions during 2018 n higher average selling prices across all regions and end-markets n favorable currency translation primarily related to the strengthening of the euro and chinese renminbi compared to the u.s. dollar partially offset by : n higher raw material costs across all regions and end-markets n increased amortization expense associated with definite-lived intangible assets from acquisitions within our industrial end-market during 2018 transportation coatings segment net sales replace_table_token_17_th net sales decreased due to the following : n lower organic volumes across all regions within our light vehicle end-market , partially offset by an increase in volumes within our commercial vehicle end-market which saw lower selling prices due to adverse changes in product mix n unfavorable currency translation primarily related to the weakening of the euro , chinese renminbi and brazilian real compared to the u.s. dollar partially offset by : n higher average selling prices across all regions and within our light vehicle end-market , partially offset by lower prices within our commercial vehicle end-market 44 adjusted ebit replace_table_token_18_th 2019 compared to 2018 adjusted ebit increased due to the following : n higher average selling prices within our light vehicle end-market , partially offset by lower prices within our commercial vehicle end-market which realized lower average selling prices due to adverse changes in product mix n lower operating expenses across both end-markets resulting from operational efficiencies associated with our cost savings initiatives as well as lower costs to support net sales partially offset by : n lower sales volumes within our light vehicle end-market , partially offset by an increase in volumes within our commercial vehicle end-market n slightly higher raw materials costs across both end-markets 2018 compared to 2017 adjusted ebit decreased due to the following : n higher raw materials costs n lower average selling prices across both end-markets , primarily driven by the light vehicle end-market in china n unfavorable impacts of currency exchange related to the weakening of certain currencies in latin america compared to the u.s. dollar partially offset by : n increases in sales volumes in our north america and latin america commercial vehicle end-markets story_separator_special_tag cash on hand , cash flow from operations and available borrowing capacity under our senior secured credit facilities . based on our forecasts , we believe that

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our primary sources of liquidity are cash on hand , cash flow from operations and available borrowing capacity under our senior secured credit facilities . at december 31 , 2019 , availability under the revolving credit facility was $ 361.2 million , net of $ 38.8 million in letters of credit outstanding . all such availability may be utilized without violating any covenants under the credit agreement governing such facility or the indentures governing the senior notes . at december 31 , 2019 , we had $ 16.9 million of outstanding borrowings under other lines of credit . our remaining available borrowing capacity under other lines of credit in certain non-u.s. jurisdictions totaled $ 6.5 million . we , or our affiliates , at any time and from time to time , may purchase shares of our common stock , the senior notes or other indebtedness . any such purchases may be made through the open market or privately negotiated transactions with third parties or pursuant to one or more redemption , tender or exchange offers or otherwise , upon such terms and at such prices , as well as with such consideration , as we , or any of our affiliates , may determine . 45 cash flows years ended december 31 , 2019 and 2018 replace_table_token_19_th year ended december 31 , 2019 net cash provided by operating activities net cash provided by operating activities for the year ended december 31 , 2019 was $ 573.1 million . net income adjusted for non-cash items ( depreciation , amortization and other non-cash items ) generated cash of $ 658.2 million . this was partially offset by changes in operating assets and liabilities of $ 85.1 million . the most significant drivers were increases in prepaid expenses and other assets of $ 118.9 million due to business incentive payments and payments for employee retention , as well as accounts receivables of $ 10.1 million due to timing of collections .

we manage the pricing volatility of our natural gas purchases with natural gas forward swap contracts up to 36 months in advance of purchases , helping to reduce the impact of short-term spot market price volatility . we focus on building intrinsic value by improving our ebitda and by improving our asset quality . we can employ our operating cash flow and other sources of liquidity to pay dividends , re-invest in our business , pay down debt and make acquisitions . our goal is to achieve $ 500 million in ebitda by 2018. salt segment highlights salt segment sales were $ 849.0 million , a decrease of 15 % from 2014 primarily due to mild winter weather in the fourth quarter of 2015. salt segment average selling price increased 2 % from 2014. replace_table_token_30_th compass minerals international , inc. 2015 form 10-k salt segment volumes were down 17 % from 2014. our operating results are impacted by the winter weather in the markets we serve . we assess the severity of winter weather compared to recent averages , using official government snow data and comparisons of our sales volumes to historical trends and other relevant data . our assessment of the frequency of winter events in the three past winter weather seasons in the markets we serve are summarized below ( a ) : 2013 near average in the first quarter above average in the fourth quarter 2014 above average in first quarter below average in the fourth quarter 2015 slightly above average in the first quarter significantly below average in the fourth quarter ( a ) the number of snow events reported may not directly correlate to compass minerals ' deicing results due to a variety of factors , including the relative significance to each city we serve within our market regions . the weather data should be used only as an indicator of year-to-year variations in winter weather conditions in our markets . general salt is indispensable and enormously versatile with thousands of reported uses . in addition , there are no known cost-effective alternatives for most high-volume uses . as a result , our cash flows from salt have not been materially impacted through a variety of economic cycles . we are among the lowest-cost salt producers in our markets due to our high-grade quality salt deposits , which are among the most extensive in the world , and through the use of effective mining techniques and efficient production processes . since the highway deicing business accounts for nearly half of our annual sales , our business is seasonal , therefore results and cash flows will vary depending on the severity of the winter weather in our markets . deicing products , consisting of deicing salt and magnesium chloride used by highway deicing and consumer and industrial customers , constitute a significant portion of our salt segment sales . we use inventory management practices to respond to the varying level of sales demand , which impacts our production volumes , the resulting per-ton cost of inventory , and ultimately profit margins , particularly during the second and third quarters when we build our inventory levels for the upcoming winter . net earnings are typically lower during the second and third quarters than in the first and fourth quarters . not only does the weather affect our highway and consumer and industrial deicing salt sales volumes and resulting gross profit and cash flows , but it also impacts our inventory levels , which influences production volume , the resulting cost per ton , and ultimately our profit margins . plant nutrition segment highlights plant nutrition sales were $ 238.4 million , a decrease of 12 % from 2014 , primarily due to weakness in the agriculture market . plant nutrition average selling price increased by 12 % from 2014. plant nutrition volumes decreased 21 % from 2014 driven by weakness in the agriculture market . per-unit costs have been unfavorably impacted in 2015 by purchased kcl used to supplement the raw mineral feedstock produced through solar-evaporation at our ogden , utah , facility . general our plant nutrition segment includes sales of specialty plant nutrition products including sop and micronutrient and other products under our wolf trax product line . sop , a specialty potassium fertilizer product which is also an ingredient in specialty fertilizer blends , is used as a potassium source for both high-value and chloride-sensitive crops and turf . the yields and quality of many high-value or chloride-sensitive crops are generally better when sop is used as a potassium nutrient rather than kcl . our sop product is marketed under the brand name protassium+ . our wolf trax product line is produced using proprietary and patented technologies . many factors influence the fertilizer market such as world grain and food supply , changes in consumer diets , general levels of economic activity , governmental food programs , and governmental agriculture and energy policies in the u.s. and around the world . economic factors may impact the amount or type of crop grown in certain locations , or the type or amount of fertilizer product used . worldwide consumption of potash and other crop nutrients has increased in response to growing populations and the need for additional food supplies . we expect the long-term demand for potassium and other plant nutrients to continue to grow as arable land per capita decreases , thereby necessitating crop yield efficiencies . our domestic sales of protassium+ are concentrated in the western and southeastern u.s. where the crops and soil conditions favor the use of low-chloride potassium nutrients , such as sop . consequently , weather patterns and field conditions in these locations can impact the amount of plant nutrient sales volumes . additionally , the demand for and market price of protassium+ may be affected by the broader potash market and the economics of the specialty crops sop serves . story_separator_special_tag in december 2015 , we completed the acquisition of a 35 % equity stake in produquímica , one of brazil 's leading manufacturers and distributors of specialty plant nutrients . the all-cash transaction was valued at r $ 452.4 million ( approximately $ 114.1 million u.s. dollars at closing ) , subject to customary post-closing adjustments . we acquired 6 % of the common shares at closing and have approximately 29 % of preferred shares that will be converted to common shares upon the settlement of certain post-closing adjustments , including possible additional consideration . the additional consideration will be based upon 2015 adjusted ebitda , as defined in the agreements . terms of the investment provide an opportunity for the company to acquire the remainder of produquímica by early 2019 at the latest . as a holding company , cmi 's investments in its operating subsidiaries constitute substantially all of its assets . consequently , our subsidiaries conduct all of our consolidated operations and own substantially all of our operating assets . the principal source of the cash needed to pay our obligations is the cash generated from our subsidiaries ' operations and their borrowings . our subsidiaries are not obligated to make funds available to cmi . furthermore , we must remain in compliance with the terms of our senior secured credit facilities , including the total leverage ratio and interest coverage ratio , in order to make payments on our 4.875 % senior notes or pay dividends to our stockholders . we must also comply with the terms of our indenture , which limits the amount of dividends we can pay to our stockholders . we are in compliance with our debt covenants as of december 31 , 2015. see note 10 to our consolidated financial statements for a discussion of our outstanding debt . historically , our cash flows from operating activities have generally been adequate to fund our basic operating requirements ; ongoing debt service ; and sustaining investment in property , plant and equipment . we have also used cash generated from operations to fund capital expenditures which strengthen our operational position , pay dividends , fund smaller acquisitions and repay our debt . we have been able to manage our cash flows generated and used across the company to permanently reinvest earnings in our foreign jurisdictions or efficiently repatriate those funds to the u.s. as of december 31 , 2015 , we had $ 54.4 million of cash and cash equivalents ( in the consolidated balance sheets ) that was either held directly or indirectly by foreign subsidiaries . due in large part to the seasonality of our deicing salt business , we experience large changes in our working capital requirements from quarter to quarter . typically , our consolidated working capital requirements are the highest in the fourth quarter and lowest in the replace_table_token_37_th compass minerals international , inc. 2015 form 10-k second quarter . when needed , we fund short-term working capital requirements by accessing our $ 125 million revolving line of credit ( `` revolving credit facility `` ) . due to our ability to generate adequate levels of domestic cash flow on an annual basis , it is our current intention to permanently reinvest our foreign earnings outside of the u.s. however , if we were to repatriate our foreign earnings to the u.s. , we may be required to accrue and pay u.s. taxes in accordance with the applicable u.s. tax rules and regulations as a result of the repatriation . we review our tax circumstances on a regular basis with the intent of optimizing cash accessibility and minimizing tax expense . in addition , the amount of permanently reinvested earnings is influenced by , among other things , the profits generated by our foreign subsidiaries and the amount of investment in those same subsidiaries . the profits generated by our domestic and foreign subsidiaries are , to some extent , impacted by the values charged on the transfer of our products between them . we calculate values charged on transfers based on guidelines established by a multi-national organization which publishes accepted tax guidelines recognized in all of the jurisdictions in which we operate , and those calculated values are the basis upon which our subsidiary income taxes , profits and cash flows are realized . some of our calculated values have been approved by taxing authorities for certain periods , while the values for those same periods or different periods have been challenged by the same or other taxing authorities . while we believe our calculations are proper and consistent with the accepted guidelines , we can make no assurance that the final resolution of these matters with all of the relevant taxing authorities will be consistent with our existing calculations and resulting financial statements . additionally , the timing for settling these challenges may not occur for many years . we currently expect the outcome of these matters will not have a material impact on our results of operations . however , it is possible the resolution could impact the amount of earnings attributable to our domestic and foreign subsidiaries , which could impact the amount of permanently reinvested earnings and the tax-efficient access to consolidated cash on hand in all jurisdictions , as well as future cash flows from operations . see note 8 to our consolidated financial statements for a discussion regarding our canadian tax reassessments . as part of the produquímica investment , the majority shareholders have a put option that may be exercised in october of 2016 , 2017 or 2018 to sell the remaining equity stake in produquímica . the funding and closing of the acquisition would occur early the following year , subject to regulatory review . we also have a call option that is exercisable in october 2018. the option exercise price is based on full-year ebitda at a multiple of 9.4x ( 2016 ) , 9.3x ( 2017

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

capital resources we believe our primary sources of liquidity will continue to be cash flow from operations and borrowings under our revolving credit facility . we believe that our current banking syndicate is secure and believe we will have access to our entire revolving credit facility . we expect that ongoing requirements for debt service and committed or sustaining capital expenditures will primarily be funded from these sources . see note 4 to our consolidated financial statements for a discussion of cash received related to a tornado that struck our mine and evaporation plant in goderich , ontario , in august 2011. our debt service obligations could , under certain circumstances , materially affect our financial condition and prevent us from fulfilling our debt obligations . see item 1a. , `` risk factors – our indebtedness could adversely affect our financial condition and impair our ability to operate our business . '' furthermore , cmi is a holding company with no operations of its own and is dependent on its subsidiaries for cash flows . as discussed in note 10 to the consolidated financial statements , at december 31 , 2015 , we had $ 727.0 million of outstanding indebtedness consisting of $ 250.0 million 4.875 % senior notes due 2024 and $ 477.0 million of borrowings outstanding under our senior secured credit agreement ( `` credit agreement '' ) , including $ 4.5 million borrowed against our revolving credit facility . letters of credit totaling $ 5.6 million reduced available borrowing capacity under the revolving credit facility to $ 114.9 million .

economic uncertainty as well as increasing health insurance premiums , deductibles and co-payments have resulted and may continue to result in cost-conscious consumers focusing on acute care rather than wellness , which has and may continue to adversely affect demand for our products and procedures . furthermore , governments and other third-party payors around the world facing tightening budgets could move to further reduce the reimbursement rates or the scope of coverage offered , which could adversely affect sales of our products . if the current adverse macroeconomic conditions continue , our business and prospects may be negatively impacted . in march 2010 , significant reforms to the healthcare system were adopted as law in the united states . the law includes provisions that , among other things , reduce and or limit medicare reimbursement , require all individuals to have health insurance ( with limited exceptions ) and imposes new and or increased taxes . specifically , the law requires the medical device industry to subsidize healthcare reform in the form of a 2.3 % excise tax on united states sales of certain medical devices effective january 1 , 2013. since the effective date of the medical device excise tax , the company has incurred $ 21.9 million and $ 15.7 million in fiscal 2014 and 2013 , respectively , of excise tax expense related to the domestic sales of its medical device products . the law also includes regulatory mandates and other measures designed to constrain medical costs , as well as stringent reporting requirements of financial relationships between medical device manufacturers and physicians and hospitals . compliance with the healthcare legislation , including these reporting requirements and the excise tax , has imposed significant additional administrative and financial burdens on us . various healthcare reform proposals have also emerged at the state level and in various foreign countries . the healthcare reform legislation and these proposals could reduce medical procedure volumes and impact the demand for our products or the prices at which we sell our products . in addition , the excise tax has increased our cost of doing business . these reforms , cost containment measures and new taxes , including the uncertainty in the medical community regarding their nature and effect , could also have an adverse effect on our customers ' purchasing decisions regarding our products and treatments and could harm our business , results of operations , financial condition and prospects . we operate in a highly regulated industry and other governmental actions may adversely affect our business , operations or financial condition , including , without limitation : new laws , regulations or judicial decisions , or new interpretations of existing laws , regulations or decisions , related to healthcare availability , methods of delivery and payment for healthcare products and services ; changes in the fda and foreign regulatory approval processes that may delay or prevent the approval of new products and result in lost market opportunity ; changes in fda and foreign regulations that may require additional safety monitoring , labeling changes , restrictions on product distribution or use , or other measures after the introduction of our products to market , any of which could increase our costs of doing business , adversely affect the future permitted uses of approved products , or otherwise adversely affect the market for our products and treatments ; new laws , regulations and judicial decisions affecting pricing or marketing practices ; and changes in the tax laws relating to our operations , including those associated with the recently adopted healthcare reform law discussed above . professional societies , government agencies , practice management groups , private health/science foundations , and organizations involved in healthcare issues may publish guidelines , recommendations or studies to the healthcare and patient communities from time to time . recommendations of government agencies or these other groups/organizations may relate to such matters as usage , cost-effectiveness , and use of related preventative services and treatments/therapies . recommendations , guidelines or studies that are followed by patients and healthcare providers could result in decreased reimbursement or use of our products . for example , in november 2012 , the american congress of obstetrics and gynecologists , known as the acog , released updates in which they have recommended less frequent cervical cancer screening similar to guidelines released in march 2012 by the u.s. preventative services task force , known as the uspstf , and the american cancer society . however , the uspstf recommendations now also include hpv co-testing for certain patient populations , an update from their draft guidelines in october 2011. overall , we believe that these guidelines have contributed to an increase in testing intervals in the u.s. for cervical cancer screening , resulting in fewer such tests being performed . over the last few years , including in october 2014 , there have been periodic significant fluctuations in foreign currencies relative to the u.s. dollar . the ongoing fluctuations of the value of the u.s. dollar may cause our products to be less competitive in international markets and may impact sales and profitability over time . a majority of our international sales are denominated in foreign currencies . given the uncertainty in the worldwide financial markets , foreign currency fluctuations may be significant in the future and we may experience a material adverse effect on our international revenues and operating results . 41 acquisitions fiscal 2012 acquisition : gen-probe incorporated on august 1 , 2012 , we completed the acquisition of gen-probe for $ 3.97 billion , which was funded through available cash and financing consisting of senior secured credit facilities and senior notes resulting in aggregate proceeds of $ 3.48 billion , net of discounts . gen-probe 's revenue and pre-tax loss from continuing operations for the period from the acquisition date to september 29 , 2012 were $ 89.5 million and $ 47.7 million , respectively . story_separator_special_tag the measurement period for this contingent consideration ended in the second quarter of fiscal 2013 , and as such , there were no charges in fiscal 2014. impairment of goodwill . during the fourth quarter of fiscal 2013 , as a result of our company-wide annual budgeting and forecasting process and a full re-evaluation of our existing product development efforts and cost structure , we reduced our short term and long term revenue forecasts and determined that indicators of impairment existed in our molecular diagnostics reporting unit . the updated forecast , which reflected pricing pressures , for revenue and profitability was lower than those expected at the time of the gen-probe acquisition . as such , the fair value of this reporting unit declined . as a result of performing step 2 of the goodwill impairment test , which requires the completion of a hypothetical purchase price allocation to determine the fair value of the implied goodwill , we recorded a $ 1.1 billion goodwill impairment charge . for additional information , refer to note 2— “ intangible assets and goodwill ” to the consolidated financial statements contained in item 15 of this annual report . gain on sale of intellectual property . in the first quarter of fiscal 2013 , we recorded a net gain of $ 53.9 million related to the sale of our makena asset to k-v pharmaceutical company , or kv . on august 4 , 2012 , kv and certain of its subsidiaries filed voluntary petitions for reorganization under chapter 11 of title 11 of the united states code in the united states bankruptcy court for the southern district of new york . at that time , kv still owed us $ 95.0 million . in december 2012 , we executed a settlement agreement with kv and released kv from all claims in consideration of a $ 60.0 million payment . we recorded this payment , net of certain costs , in the first quarter of fiscal 2013. for additional information , please refer to note 7 contained in item 15 of this annual report . restructuring and divestiture charges . in the fourth quarter of fiscal 2012 , in connection with our acquisition of gen-probe , we implemented a restructuring action to consolidate our diagnostics operations by decreasing headcount and closing our legacy molecular diagnostics operations in madison , wisconsin . we also finalized our decision to transfer production of our interventional breast products from our indianapolis facility to our costa rica facility . in fiscal 2013 and in the first quarter of fiscal 2014 , we implemented cost containment measures that primarily resulted in headcount reductions . in the second , third and fourth quarters of fiscal 2014 , we terminated certain personnel at our hitec imaging operation in germany , and as part of ongoing management changes and structural refinement , we terminated certain executives and employees on a worldwide basis . pursuant to u.s. generally accepted accounting principles , the related severance and benefit charges are being recognized either ratably over the respective required employee service periods or when benefits become probable for contractual and statutory benefits , and other charges are being recognized as incurred . in fiscal 2014 and 2013 , we recorded aggregate charges of $ 51.7 million and $ 32.8 million , respectively , from these actions . the charges recorded in fiscal 2014 primarily related to severance and benefits and include a $ 3.1 million impairment charge to record certain buildings at our warstein , germany location to their estimated fair value . in addition , these charges include a loss on divestiture of $ 5.3 million related to the sale of our mri breast coils product line in the fourth quarter of fiscal 2014. the charges in fiscal 2013 primarily related to severance and benefits . in addition , in fiscal 2013 we recorded a net gain of $ 0.6 million primarily related to the sale 48 of our lifecodes business in the second quarter of fiscal 2013. for additional information , please refer to note 4 contained in item 15 of this annual report . interest income . years ended september 27 , 2014 september 28 , 2013 change amount amount amount % interest income $ 1.3 $ 1.3 $ — — % interest income remained flat in fiscal 2014 compared to fiscal 2013. interest expense . years ended september 27 , 2014 september 28 , 2013 change amount amount amount % interest expense $ ( 220.6 ) $ ( 281.1 ) $ 60.5 ( 21.5 ) % interest expense consists primarily of the cash interest costs and the related amortization of the debt discount and deferred financing costs on our outstanding debt . the decrease in interest expense in fiscal 2014 compared to fiscal 2013 was primarily due to principal payments in fiscal 2013 and 2014 , which included $ 325.0 million of voluntary pre-payments , of amounts borrowed under our credit agreement , lower weighted-average interest rates due to refinancing both the term loan a and term loan b facilities , and the redemption of $ 405.0 million in principal amount of our 2.00 % convertible notes due 2037 , or the 2007 notes , in december 2013. these decreases were partially offset by additional interest expense from the accretion of principal on our 2.00 % convertible notes due 2043 , or the 2013 notes , at 4.0 % annually . debt extinguishment loss . years ended september 27 , 2014 september 28 , 2013 change amount amount amount % debt extinguishment loss $ ( 7.4 ) $ ( 9.2 ) $ 1.8 ( 19.6 ) % in the second quarter of fiscal 2014 , we refinanced the term loan b facility of our credit agreement and voluntarily prepaid $ 25.0 million of principal . in connection with this transaction , we recorded a debt extinguishment loss of $ 4.5 million for the write off of the pro-rata share of the

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources at september 27 , 2014 , we had $ 946.2 million of working capital , and our cash and cash equivalents totaled $ 736.1 million . our cash and cash equivalents balance decreased by $ 86.4 million during fiscal 2014 principally due to principal payments on our outstanding debt and capital expenditures partially offset by cash generated from operations and net proceeds from stock option exercises . in fiscal 2014 , our operating activities provided us with $ 508.4 million of cash , which included net income of $ 17.3 million , non-cash charges for depreciation and amortization aggregating $ 523.2 million , non-cash interest expense of $ 68.7 million related to our outstanding debt , stock-based compensation expense of $ 50.0 million , asset impairment charges of $ 38.4 million , and debt extinguishment losses of $ 7.4 million . these adjustments to net income were partially offset by a decrease in net deferred tax liabilities of $ 243.1 million , primarily from the amortization of intangible assets . cash provided by operations included a net cash inflow of $ 44.5 million from changes in our operating assets and liabilities . changes in our operating assets and liabilities were driven primarily by a decrease in prepaid income taxes of $ 22.4 million due to the timing of payments versus their utilization for our tax liability , a decrease in prepaid expenses and other assets of $ 17.3 million , an increase in deferred revenue of $ 15.1 million primarily due to an increase in our installed base of digital mammography systems , an increase in accrued expenses and other liabilities of $ 14.7 million primarily due to a net increase in bonus and benefits accruals , and restructuring and professional fees , partially offset by contingent consideration payments and lower accrued interest on our debt based on the timing of payments . these cash flow increases were partially offset by an increase in inventories of $ 44.7 million for expected demand and to build up our safety stock of instruments and assays primarily in our diagnostics business .

over the next twelve months , we anticipate both access to and receipt of several sources of liquidity , including cash flows from operations , and sales of preferred stock pursuant to an at-the-market shelf registration . we routinely have ongoing discussions with existing and potential new lenders to refinance current debt on a longer term basis and , in recent periods , have refinanced shorter term acquisition debt , including seller notes , with traditional longer term mortgage notes , some of which have been executed under government guaranteed lending programs . during 2016 , we anticipate net proceeds of approximately $ 9.1 million on the refinancing of existing debt with such government guaranteed lending programs . at december 31 , 2015 , we had $ 125.5 million in indebtedness of which the current portion is $ 51.0 million . we anticipate our operating cash requirements in 2016 as being less than in 2015 due to the completion of the transition . we expect sufficient funds for our operations , scheduled debt service , at least through the next twelve months . we have been successful in recent years in raising new equity capital and believe , based on recent discussions , that these markets will continue to be available to us for raising capital in 2016 and beyond . we believe our long-term liquidity needs will be satisfied by these same sources , as well as borrowings as required to refinance indebtedness . on march 24 , 2016 , the company received a commitment to refinance the bentonville , heritage park and river valley credit facility , the little rock credit facility , and the northridge , woodland hills and abington credit facility for a combined total of $ 25.4 million of debt , subject to definitive documentation and certain closing conditions . on march 24 , 2016 , the company also obtained a lender commitment to extend the maturity date of the georgetown and sumter credit facility from september 2016 to june 2017 subject to definitive documentation and certain closing conditions . on march 29 , 2016 , the company obtained a lender commitment to extend the maturity date of the quail creek credit facility from september 2016 to september 2018 subject to definitive documentation and certain closing conditions . for a more detailed discussion , see note 3 - liquidity and profitability and note 14 preferred stock and dividends , located in part ii , item 8. , notes to consolidated financial statements . acquisitions the company had no acquisitions during the years ended december 31 , 2015 or 2014 . divestitures for information regarding the company 's divestitures , please refer to note 11 - discontinued operations , located in part ii , item 8. , notes to consolidated financial statements of this annual report on form 10-k. the following table summarizes the activity of discontinued operations for the years ended december 31 , 2015 and 2014 : 34 replace_table_token_7_th critical accounting policies we prepare our financial statements in accordance with accounting principles generally accepted in the united states ( `` gaap `` ) . the preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets , liabilities , revenues and expenses . on an ongoing basis we review our judgments and estimates , including , but not limited to , those related to doubtful accounts , income taxes , stock compensation , intangible assets and loss contingencies . we base our estimates on historical experience , business knowledge and on various other assumptions that we believe to be reasonable under the circumstances at the time . actual results may vary from our estimates . these estimates are evaluated by management and revised as circumstances change . we believe that the following represents our critical accounting policies . consolidation of entities in which we have determined to have a controlling financial interest arrangements with other business enterprises are evaluated , and those in which adcare is determined to have controlling financial interest are consolidated . guidance is provided by financial accounting standards board accounting standards codification ( `` asc `` ) topic 810-10 , consolidation—overall , which addresses the consolidation of business enterprises to which the usual condition of consolidation ( ownership of a majority voting interest ) does not apply . this interpretation focuses on controlling financial interests that may be achieved through arrangements that do not involve voting interests . it concludes that , in absences of clear control through voting interests , a company 's exposure ( variable interest ) to the economic risks and potential rewards from the variable interest entity 's assets and activities are the best evidence of control . if an enterprise holds the power to direct and right to receive benefits of an entity , it would be considered the primary beneficiary . the primary beneficiary is required to consolidate the assets , liabilities and results of operations of the variable interest entity in its financial statements . on november 20 , 2015 , riverchase village adk , llc ( “ riverchase ” ) completed the previously announced sale to an unrelated third party of the riverchase village facility , an assisted living facility located in hoover , alabama , for a purchase price ( as subsequently amended ) of $ 6.9 million . riverchase was a consolidating variable interest entity of the company which is owned by christopher f. brogdon , a former director of the company and a greater than 5 % beneficial holder of the company 's common stock . riverchase financed the acquisition of the riverchase village facility using the proceeds of the riverchase bonds , as to which the company was a guarantor . in connection with the sale of the riverchase village facility , the riverchase bonds were repaid in full and the company was released from its guaranty . story_separator_special_tag we have been successful in recent years in raising new equity capital and believe , based on recent discussions , that these markets will continue to be available to us for raising capital in 2016 and beyond . we believe our long-term liquidity needs will be satisfied by these same sources , as well as borrowings as required to refinance indebtedness ( for a more detailed discussion , see note 3 - liquidity and profitability , located in part ii , item 8. , notes to consolidated financial statements ) . the following table presents selected data from our consolidated statement of cash flows for the periods presented : 39 replace_table_token_9_th year ended december 31 , 2015 story_separator_special_tag # 000000 ; padding-left:2px ; padding-top:2px ; padding-bottom:2px ; padding-right:2px ; `` > financial covenant measurement period min/max financial covenant required financial covenant metric achieved future financial covenant metric required community bank - mountain trace nursing adk , llc - usda $ 4,507 subsidiary minimum debt service coverage ratio quarterly 1.0 0.5 * 1.0 privatebank - mortgage note - valley river nursing , llc ; park heritage nursing , llc ; benton nursing , llc $ 7,359 operator minimum ebitdar ( 000s ) quarterly $ 265 $ 36 * $ 265 guarantor minimum debt service coverage ratio annual 1.0 0.4 * 1.0 private bank - mortgage note - little rock hc & r nursing , llc $ 11,399 operator minimum ebitdar ( 000s ) quarterly $ 450 $ 23 * $ 450 guarantor minimum debt service coverage ratio annual 1.0 0.4 * 1.0 guarantor maximum annual leverage ratio annual 11 222 * 11 privatebank - mortgage note - aph & r property holdings , llc ; northridge hc & r property holdings , llc ; woodland hills hc property holdings , llc $ 11,816 operator minimum ebitdar ( 000s ) quarterly $ 495 $ ( 601 ) * $ 495 guarantor minimum debt service coverage ratio annual 1.0 0.4 * 1.0 guarantor maximum annual leverage ratio annual 11.0 222 * 11.0 privatebank - mortgage note - georgetown hc & r property holdings , llc ; sumter valley hc & r property holdings , llc $ 9,149 operator minimum debt service coverage ratio quarterly 1.8 1.1 * 1.8 guarantor minimum debt service coverage ratio annual 1.0 0.4 * 1.0 guarantor maximum annual leverage ratio annual 11 222 * 11 congressional bank - mortgage note - qc property holdings , llc $ 5,000 subsidiary minimum fixed charge coverage ratio quarterly 1.1 ( 0.5 ) * 1.1 subsidiary minimum debt service coverage ratio annual 1.5 ( 1.1 ) * 1.5 * waiver or amendment for violation of covenant obtained . receivables our operations could be adversely affected if we experience significant delays in receipt of rental income from our operators . our future liquidity will continue to be dependent upon the relative amounts of current assets ( principally cash and accounts receivable ) 42 and current liabilities ( principally accounts payable and accrued expenses ) . in that regard , accounts receivable can have a significant impact on our liquidity . accounts receivable totaled $ 8.8 million at december 31 , 2015 compared to $ 24.3 million at december 31 , 2014 , of which $ 8.0 million and $ 24.2 million , respectively , related to patient care receivables from our legacy operations . the allowance for bad debt was $ 12.5 million and $ 6.7 million at december 31 , 2015 and 2014 , respectively . we continually evaluate the adequacy of our bad debt reserves based on aging of older balances , payment terms and historical collection trends after facility operations transfer to third-party operators . we continue to evaluate and implement additional processes to strengthen our collection efforts and reduce the incidence of uncollectible accounts . off-balance sheet arrangements letters of credit there were $ 0.4 million and $ 3.8 million of outstanding letters of credit at december 31 , 2015 and 2014 , respectively , that are pledged as collateral of borrowing capacity on the privatebank revolver . operating leases the company leases a total of eleven skilled nursing facilities under non-cancelable leases , most of which have rent escalation clauses and provisions for payments of real estate taxes , insurance and maintenance costs ; each of the skilled nursing facilities that are leased by the company are subleased to and operated by third-party operators . the company also leases certain office space located in atlanta , georgia . future minimum lease payments for each of the next five years ending december 31 , are as follows : replace_table_token_12_th the company has also entered into lease agreements for various equipment used in its day-to-day operations . these leases are included in future minimum lease payments above . for a detailed description of the company 's operating leases , please see note 7 - leases to our consolidated financial statements included in part ii , item 8. , `` financial statements and supplementary data `` . leased and subleased facilities to third-party operators in connection with the company 's transition to a self-managed real estate investment company , thirty-five facilities ( twenty-four owned by us and eleven leased to us ) are leased or subleased on a triple net basis , meaning that the lessee ( i.e . , the new third-party operator of the property ) is obligated under the lease or sublease , as applicable , for all liabilities of the property in respect to insurance , taxes and facility maintenance , as well as the lease or sublease payments , as applicable . future minimum lease receivables for each of the next five years ending december 31 , are as follows : 43 replace_table_token_13_th the following is a summary of the company 's leases and subleases to third-parties and which comprise the future minimum lease receivable of the company . each lease or sublease is structured as a `` triple-net `` lease . for those facilities where the

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

net cash used in operating activities —continuing operations for the year ended december 31 , 2015 , was approximately $ 11.7 million consisting primarily of our loss from operations less changes in working capital , and noncash charges ( primarily depreciation and amortization , share-based compensation , rent revenue in excess of cash received , and amortization of debt discounts and related deferred financing costs ) all primarily the result of routine operating activity . net cash used in operating activities—discontinued operations was approximately $ 6.1 million due primarily to a $ 18.5 million decrease in accounts payable and accrued liabilities offset by noncash charges . net cash used in investing activities —continuing operations for the year ended december 31 , 2015 , was approximately $ 5.7 million . this is primarily the result of a increase in restricted cash deposits offset by lower capital expenditures . net cash provided by investing activities—discontinued operations was approximately $ 15.6 million primarily due to proceeds of $ 13.9 million related to the sale of companions , bentonville , and riverchase . net cash provided by financing activities —continuing operations was approximately $ 12.7 million for the year ended december 31 , 2015 . this is primarily the result of cash proceeds received from additional debt borrowings and preferred stock issuances partially offset by repayments of existing debt obligations and payments of preferred stock dividends . net cash used in financing activities - discontinued operations was approximately $ 12.8 million due to the payoff of loans related to the entities sold , companions , bentonville , and riverchase . year ended december 31 , 2014 net cash used in operating activities —continuing operations for the year ended december 31 , 2014 , was $ 23.9 million consisting primarily of our loss from continuing operations less changes in working capital , and noncash charges ( primarily depreciation and amortization , share-based compensation , and amortization of debt discounts and related deferred financing costs ) all primarily the result of routine operating activity .

we view our average monthly unique users as a key indicator of the quality of our user experience , the effectiveness of our advertising and traffic acquisition , and the strength of our brand awareness . measuring unique users is important to us because our marketplace subscription revenue depends , in part , on our ability to provide dealers with connections to our users and exposure to our marketplace audience . we define connections as interactions between consumers and dealers on our marketplace through phone calls , email , managed text and chat , and clicks to access the dealer 's website or map directions to the dealership . replace_table_token_4_th monthly sessions we define monthly sessions as the number of distinct visits to our websites that take place each month within a given time frame , as measured and defined by google analytics . we calculate average monthly sessions as the sum of the monthly sessions in a given period , divided by the number of months in that period . a session is defined as beginning with the first page view from a computer or mobile device and ending at the earliest of when a user closes their browser window , after 30 minutes of inactivity , or at midnight eastern time each night . a session can be made up of multiple page views and visitor actions , such as performing a search , visiting vehicle detail pages , and connecting with a dealer . we believe the volume of sessions in a time period , when considered in conjunction with the number of unique users in that time period , is an indicator of consumer satisfaction and engagement with our marketplace . replace_table_token_5_th number of paying dealers a paying dealer is a dealer , based on a distinct associated inventory feed , that subscribes to our enhanced or featured listing product at the end of a defined period . we believe that the number of paying dealers is indicative of the value proposition of our listing products , and our sales and marketing success , including our ability to retain paying dealers and develop new dealer relationships . replace_table_token_6_th 40 average annual revenue per subscribing dealer ( aarsd ) we measure the average annual revenue we receive from each paying dealer . we define aarsd , which is measured at the end of a defined period , as the total marketplace subscription revenue during the trailing 12 months divided by the average number of paying dealers during the same trailing 12-month period . we believe that our ability to grow aarsd is an indicator of the value proposition of our products and the return on investment , or roi , our paying dealers realize from our products . increases in aarsd , which we believe reflect the value of exposure to our engaged audience in relation to subscription cost , are driven by our ability to grow the volume of connections to our users and the quality of those connections , which result in increased opportunity to upsell package levels and cross-sell additional products to our paying dealers . replace_table_token_7_th adjusted ebitda we define adjusted ebitda as net income ( loss ) , adjusted to exclude : depreciation and amortization , stock‑based compensation expense , other ( income ) expense , net , the ( benefit from ) provision for income taxes , and certain one‑time , non‑recurring items , if and when applicable . we monitor and have presented adjusted ebitda in this annual report on form 10-k as a non‑gaap financial measure to supplement the financial information we present on a gaap basis to provide investors with additional information regarding our financial results . adjusted ebitda , as a non‑gaap financial measure , should not be considered in isolation from , or as an alternative to , measures prepared in accordance with gaap . we consider , and you should consider , adjusted ebitda together with other operating and financial performance measures presented in accordance with gaap . also , our non‑gaap measure may not necessarily be comparable to similarly titled measures presented by other companies . we believe that adjusted ebitda is a key indicator of our operating results . for further explanation of the uses and limitations of this measure and a reconciliation of our adjusted ebitda to the most directly comparable gaap measure , net income , please see “ selected consolidated financial data — adjusted ebitda . ” components of consolidated statements of operations revenue our revenue is derived from two primary sources : ( i ) marketplace subscription revenue and ( ii ) advertising and other revenue , as described below . marketplace subscription revenue we offer three types of marketplace listing products to dealers : basic listing , which is free ; and enhanced or featured listing , which require a paid subscription under a monthly , quarterly , semiannual , or annual subscription basis . contractual subscriptions for customers generally auto‑renew on a monthly basis and are cancellable by dealers with 30‑days ' advance notice . we also offer listing dealers access to the dealer dashboard , which includes a performance summary , dealer insights tool , user review management platform , pricing tool , and market analysis tool . the pricing tool and market analysis tool are available only to paying dealers . in addition to listing inventory in the marketplace and providing access to the dealer dashboard , we offer enhanced and featured listing dealers other subscription advertising and customer acquisition products , including display advertising that appears in our marketplace and on other sites on the internet . this advertising can be targeted by geography , search history , and a number of other factors , and dealer search engine marketing , which helps dealers more effectively acquire customers through paid search , social media , and retargeted advertising . story_separator_special_tag $ 0.9 million increase in costs to improve the content on our websites , a $ 0.8 million increase for data center and hosting costs , and a $ 0.5 million increase in amortization of website development costs . operating expenses sales and marketing expenses replace_table_token_25_th sales and marketing expenses increased $ 82.0 million , or 53 % , in the year ended december 31 , 2017 compared to the year ended december 31 , 2016. this increase was due primarily to an increase in advertising costs of $ 61.0 million , a $ 12.8 million increase in salaries , commissions , and related expenses due to our increased revenue and a 21 % increase in headcount , a $ 2.0 million increase in expenses related to marketing events and activities , a $ 1.7 million increase in consulting fees , a $ 1.0 million increase in rent due to the expansion of our office space , and a $ 0.8 million increase in software subscriptions . the increase for the year ended december 31 , 2017 was also due to a $ 1.7 million increase in stock-based compensation expense primarily due to the recognition of expense related to rsus with a performance condition satisfied on the effectiveness of the registration statement for our ipo . although the performance-based vesting condition was satisfied , under the terms of the awards , the settlement of such vested rsus and the issuance of common stock with respect to such vested rsus will occur on april 10 , 2018 , one hundred eighty-one days after the satisfaction of the performance condition . product , technology , and development expenses replace_table_token_26_th 50 product , technology , and development expenses increased $ 11.0 million , or 96 % , in the year ended december 31 , 2017 compared to the year ended december 31 , 2016 . the increase was due primarily to an increase in salar ies and related employment expenses due to a 68 % increase in headcount to support our growth and product innovations . the increase for the year ended december 31 , 2017 was also due to a $ 1.7 million increase in stock-based compensation expense primarily du e to the recognition of expense related to rsus with a performance condition satisfied on the effectiveness of the registration statement for our ipo . general and administrative expenses replace_table_token_27_th general and administrative expenses increased $ 9.9 million , or 77 % , in the year ended december 31 , 2017 compared to the year ended december 31 , 2016. the change primarily reflected an increase of $ 5.0 million of salaries and employee-related costs as a result of our 81 % increase in headcount as we continued to grow our business and require additional personnel to support our expanded operations , a $ 1.4 million increase in payment processing and billing costs due to increased customer transactions with higher billings , a $ 1.1 million increase in external consulting and insurance fees driven by costs incurred to comply with public company requirements , and a $ 0.6 million increase in bad debt expense . the increase for the year ended december 31 , 2017 was also due to a $ 1.3 million increase in stock-based compensation expense primarily due to the recognition of expense related to rsus with a performance condition satisfied on the effectiveness of the registration statement for our ipo . depreciation and amortization expenses replace_table_token_28_th depreciation and amortization expenses increased $ 1.0 million , or 62 % , in the year ended december 31 , 2017 compared to the year ended december 31 , 2016 , due primarily to increased depreciation of additional leasehold improvements . other income , net replace_table_token_29_th 51 other income , net increased $ 0.2 million , or 51 % , in the year ended december 31 , 2017 compared to the year ended december 31 , 2016. the $ 0.5 million increase in interest income is primarily due to the investment of cash in certificates of deposit and money market funds arising from our increased cash from operations and the funds raised in ou r ipo . the $ 0.3 million de crease in other income ( expense ) is primarily due to losses on foreign currency transactions , primarily a result of the u.s. dollar weakening against the euro . provision for income taxes replace_table_token_30_th the provision for income taxes increased $ 0.2 million , or 8 % , in the year ended december 31 , 2017 compared to the year ended december 31 , 2016. in 2017 , we recorded a tax provision on earnings with an effective tax rate of 16.7 % compared to 27.4 % in 2016. our lower effective tax rate during 2017 is primarily the result of discrete items recorded including ipo deductible costs and higher excess tax deductions relating to stock-based compensation awards . our lower effective tax rate during 2017 was also driven by higher r & d tax credits . income ( loss ) from operations by segment replace_table_token_31_th nm — not meaningful u.s. income from operations increased $ 14.1 million , or 51 % , in the year ended december 31 , 2017 compared to the year ended december 31 , 2016. this increase was due to an increase in revenue of $ 111.6 million , offset in part by the increases in cost of revenue of $ 6.5 million and operating expenses of $ 91.0 million . international loss from operations increased $ 7.4 million in the year ended december 31 , 2017 compared to the year ended december 31 , 2016. the increase in international loss from operations reflects our continued investment into international markets and expansion into new countries . liquidity and capital resources cash , cash equivalents and investments at december 31 , 2018 and 2017 , our principal sources of liquidity were cash and cash equivalents of $ 34.9 million and $ 87.7 million , respectively and investments

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

sources and uses of cash our cash flows from operating , investing , and financing activities , as reflected in the consolidated statements of cash flows , are summarized in the following table : replace_table_token_32_th our operations have been financed primarily from operating activities , sales of preferred stock and our ipo . we generated cash from operating activities of $ 51.7 million during 2018 , $ 25.7 million during 2017 and $ 20.0 million during 2016 , and we expect to generate cash from operations for the foreseeable future . we believe that our existing sources of liquidity will be sufficient to fund our operations for at least the next 12 months from the date of the filing of this annual report on form 10-k. however , our future capital requirements will depend on many factors , including our rate of revenue growth , the expansion of our sales and marketing activities , the support of our product , technology , and development efforts , and the timing and extent of our investment in international markets . to the extent that existing cash , cash equivalents , and investments and cash from operations are insufficient to fund our future activities , we may need to raise additional funds through public or private equity or debt financing . additional funds may not be available on terms favorable to us , or at all .

the ngeniusone platform converges application and network performance management functionality into a single unified platform that delivers a top-down , serviced-focused perspective of performance characteristics of all infrastructure and application elements associated with service delivery . this product is based on our unique asi technology , which provides real-time performance analytics and operational intelligence . our key objectives have been to continue to gain market share in the wireless service provider market and to accelerate our enterprise growth by extending into the application performance management segment . a common component of both initiatives has been the acceptance of our unified services delivery management strategy . this strategy has been bolstered by our acquisitions and integration of both voice/video and packet flow or monitoring switch technology . during the first quarter of our fiscal year 2014 , management performed a review of its summation of revenue by industry . as a result , we changed our method of apportioning revenue to our revenue sectors , and the categorization of certain customers to different sectors . this change in the manner of describing fluctuations by sector will not affect our total net revenues , total product and service revenues , or revenue by geography . results overview we saw continued growth during the fiscal year ended march 31 , 2014 , with product revenue growth of 18 % and overall revenue growth of 13 % compared to the prior fiscal year . our diluted net income per share for the fiscal year ended march 31 , 2014 were $ 1.17 per share , representing a $ 0.21 , or 22 % , increase over the same period in the prior year . our business maintained strong gross profit margins . our gross margin for the fiscal year ended march 31 , 2014 remained flat at 79 % compared to the same period in the prior year . our success during the fiscal year ended march 31 , 2014 was the result of a few factors . first , within our traditional enterprise customer base , we have continued to create value with the product launch and successful traction of ngeniusone . during our fiscal year ended march 31 , 2014 , our product revenue grew 11 % in the enterprise sector . second , we continue to be successful in the service provider market driven by our success in lte , and voice over lte deployments and capturing new services being deployed over these 4g networks . during the fiscal year ended march 31 , 2014 our product revenue growth in the service provider sector was 22 % . additionally , in our packet flow switch product line , which complements our packet flow instrumentation product line , we were successful in executing our strategy and gaining market share . the natural integration of packet flow switch technology with our packet flow instrumentation provided unique opportunities and clear differentiation for our customer base . at march 31 , 2014 , we had cash , cash equivalents and marketable securities of $ 218.8 million . this represents an increase of $ 64.7 million over the previous fiscal year ended march 31 , 2013 . use of non-gaap financial measures we supplement the generally accepted accounting principles ( gaap ) financial measures we report in quarterly and annual earnings announcements , investor presentations and other investor communications by reporting the following non-gaap measures : non-gaap revenue , non-gaap net income and non-gaap net income per diluted share . non-gaap revenue eliminates the gaap effects of acquisitions by adding back revenue related to deferred revenue revaluation . non-gaap net income includes the foregoing adjustment and also removes inventory fair value adjustments , expenses related to the amortization of acquired intangible assets , share-based compensation , restructuring , certain expenses relating to acquisitions including compensation for post-combination services and business development charges , net of related income tax effects . non-gaap diluted net income per share also excludes these expenses as well as the related impact of all these adjustments on the provision for income taxes . these non-gaap measures are not in accordance with gaap , should not be considered an alternative for measures prepared in accordance with gaap ( revenue , net income and diluted net income per share ) , and may have limitations in that they do not reflect all our results of operations as determined in accordance with gaap . these non-gaap measures should 25 only be used to evaluate our results of operations in conjunction with the corresponding gaap measures . the presentation of non-gaap information is not meant to be considered superior to , in isolation from , or as a substitute for results prepared in accordance with gaap . management believes these non-gaap financial measures enhance the reader 's overall understanding of our current financial performance and its prospects for the future by providing a higher degree of transparency for certain financial measures and providing a level of disclosure that helps investors understand how we plan and measure our business . we believe that providing these non-gaap measures affords investors a view of our operating results that may be more easily compared to our peer companies and also enables investors to consider our operating results on both a gaap and non-gaap basis during and following the integration period of our acquisitions . presenting the gaap measures on their own may not be indicative of our core operating results . furthermore , management believes that the presentation of non-gaap measures when shown in conjunction with the corresponding gaap measures provide useful information to management and investors regarding present and future business trends relating to our financial condition and results of operations . story_separator_special_tag the 5 % , or $ 4.8 million , increase in international revenue is primarily due to an increase in our general enterprise sector in asia . we expect revenue from sales to customers outside the united states to continue to account for a significant portion of our total revenue in the future . in accordance with united states export control regulations we do not sell to , or do business with , countries subject to economic sanctions and export controls . 30 cost of revenue and gross profit cost of product revenue consists primarily of material components , manufacturing personnel expenses , packaging materials , overhead and amortization of capitalized software , acquired software and core technology . cost of service revenue consists primarily of personnel , material , overhead and support costs . replace_table_token_10_th product . the 12 % , or $ 5.5 million , increase in cost of product revenue was primarily due to the 18 % , or $ 35.5 million increase in product revenue for the fiscal year ended march 31 , 2014 when compared to the fiscal year ended march 31 , 2013 . in addition , there was a $ 641 thousand increase in employee related expenses due to increased headcount as well as increased incentive compensation , a $ 189 thousand increase in depreciation expense , a $ 154 thousand increase in allocated overhead , and a $ 152 thousand increase in testing services due to new product introduction for the fiscal year ended march 31 , 2014. these were partially offset by a $ 1.2 million decrease in amortization of intangible assets , a $ 453 thousand decrease in inventory fair value adjustment related to inventory recorded from the acquisition of onpath , and a $ 169 thousand decrease in obsolescence charges as we did not discontinue or make plans to discontinue , any product during the fiscal year ended march 31 , 2014. the product gross profit percentage increased by one percentage point to 78 % during the fiscal year ended march 31 , 2014 as compared to the same period in the prior year . average headcount in cost of product revenue was 32 and 29 for the years ended march 31 , 2014 and 2013 , respectively . service . the 18 % , or $ 5.0 million , increase in cost of service revenue was primarily due to a $ 3.5 million increase in employee related expenses resulting in part from increased headcount to support our growing installed base , as well as from increased share-based compensation and increased incentive compensation . in addition , there was a $ 889 thousand increase in cost of materials used to support customers under service contracts , a $ 320 thousand increase in software licenses , a $ 266 thousand increase in travel expenses , and a $ 200 thousand increase in allocated overhead . these increases were partially offset by a $ 348 thousand decrease in consulting expenses . the service gross profit percentage decreased by two percentage points to 79 % for the fiscal year ended march 31 , 2014 when compared to the fiscal year ended march 31 , 2013 . the 4 % , or $ 5.5 million , increase in service gross profit corresponds with the 7 % , or $ 10.6 million , increase in service revenue , offset by the 18 % , or $ 5.0 million , increase in cost of services . average headcount in cost of service revenue was 146 and 132 for the years ended march 31 , 2014 and 2013 , respectively . gross profit . our gross profit increase d 13 % , or $ 35.6 million . this increase is attributable to our increase in revenue of 13 % , or $ 46.1 million , partially offset by a $ 10.5 million , or 14 % , increase in cost of revenue . the gross margin percentage remained flat at 79 % during the fiscal year ended march 31 , 2014 when compared to the same period in the prior year . overall we expect our gross margin percentage to remain relatively flat in future periods with increased sales volumes offset by corresponding increases in product and service costs . 31 operating expenses replace_table_token_11_th research and development . research and development expenses consist primarily of personnel expenses , fees for outside consultants , overhead and related expenses associated with the development of new products and the enhancement of existing products . the 14 % , or $ 8.9 million , increase in research and development expenses is due to a $ 6.4 million increase in employee related expenses resulting in part from increased headcount as well as from increased share-based compensation and increased incentive compensation , an $ 818 thousand increase in non-recurring engineering expenses , an $ 804 thousand increase in depreciation expense , a $ 493 thousand increase in temporary hire expenses , a $ 358 thousand increase in travel expense , a $ 285 thousand increase in software licenses , a $ 222 thousand increase in computer supplies and a $ 183 thousand increase in research and development supplies . these expenses were partially offset by a $ 728 thousand decrease in deal related compensation related to the acquisition of simena and a $ 197 thousand decrease in meeting expenses . average headcount in research and development was 352 and 338 for the fiscal years ended march 31 , 2014 and 2013 , respectively . sales and marketing . sales and marketing expenses consist primarily of personnel expenses , including commissions , overhead and other expenses associated with selling activities and marketing programs such as trade shows , seminars , advertising , and new product launch activities . the 11 % , or $ 12.8 million , increase in total sales and marketing expenses was due to $ 6.0 million increase in employee related expenses resulting in part from increased headcount as well

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash provided by operating activities was $ 110.9 million during the fiscal year ended march 31 , 2014 , compared to $ 95.4 million of cash provided by operating activities in the fiscal year ended march 31 , 2013 . this $ 15.5 million increase was due in part to accounts receivable , which had a favorable impact in the fiscal year ended march 31 , 2014 as compared to the fiscal year ended march 31 , 2013. accounts receivable days sales outstanding was 47 days at march 31 , 2014 compared to 68 days at march 31 , 2013. in addition , there was an $ 8.5 million increase in profitability , a $ 5.3 million favorable impact from deferred revenue due to increased sales of our products , a $ 3.8 million increase from accounts payable , a $ 3.3 million increase from share-based compensation , a $ 1.3 million increase from deferred income taxes and a $ 563 thousand increase from income taxes payable . these increases were offset by an $ 8.2 million decrease as a result of an increase in inventory balances to support increases in sales volume , an $ 8.2 million decrease from prepaid expenses and other assets largely due to a $ 5.6 million increase from prepaid income taxes and $ 1.2 million from an increase in prepaid royalties , and a $ 4.0 million decrease from accrued compensation and other expenses during the fiscal year ended march 31 , 2014 when compared to the fiscal year ended march 31 , 2013 largely due to the timing of accruals and payments for incentive compensation as a result of an increase in the payout for fiscal year 2013 incentive compensation during the fiscal year ended march 31 , 2014 as compared to the payout for the fiscal year 2012 during the fiscal year ended march 31 , 2013 , as well as severance activities related to restructuring .

22 results of operati ons set forth below are our results of operations for the year ended december 31 , 2015 compared with the year ended december 31 , 2014 and the year ended december 31 , 2014 compared with the year ended december 31 , 2013. replace_table_token_4_th our results of operations discussed below include the impact of purchase price accounting adjustments associated with the july 2008 merger between our wholly owned subsidiary , vernon merger corporation , and xm satellite radio holdings inc. ( the “ merger ” ) . the purchase price accounting adjustments related to the merger , include the : ( i ) elimination of deferred revenue associated with the investment in xm canada , ( ii ) recognition of deferred subscriber revenues not recognized in purchase price accounting , and ( iii ) elimination of the benefit of deferred credits on executory contracts , which are primarily attributable to third party arrangements with an oem and programming providers . the deferred credits on executory contracts attributable to third party arrangements with an oem included in revenue share and royalties , subscriber acquisition costs , and sales and marketing concluded with the expiration of the acquired contract during 2013. the purchase price accounting adjustments related to programming providers concluded with the expiration of the acquired contract in june 2015. the impact of these purchase price accounting adjustments is detailed in our adjusted revenues and operating expenses tables on pages 37 through 38 of our glossary . total revenue subscriber revenue includes subscription , activation and other fees . · 2015 vs. 2014 : for the years ended december 31 , 2015 and 2014 , subscriber revenue was $ 3,824,793 and $ 3,554,302 , respectively , an increase of 8 % , or $ 270,491. the increase was primarily attributable to an 8 % increase in the daily weighted average number of subscribers and increases in certain of our self-pay subscription rates , partially offset by subscription discounts and limited channel plans offered in customer acquisition and retention programs . 23 · 2014 vs. 2013 : for the years ended december 31 , 2014 and 2013 , subscriber revenue was $ 3,554,302 and $ 3,284,660 , respectively , an increase of 8 % , or $ 269,642 . the increase was primarily attributable to a 6 % increase in the daily weighted average number of su bscribers , the inclusion of a full year of subscription revenue generated by our connected vehicle business and the increase in certain of our subscription rates beginning in january 2014. these increases were partially offset by subscription discounts and limited channel plans offered in customer acquisition and retention programs , a change in an agreement with an automaker and a rental car company , and an increasing number of lifetime subscription plans that ha d reached full revenue recognition . we expect subscriber revenues to increase based on the growth of our subscriber base , including the increases in certain of our subscription rates and the sale of additional services to subscribers . advertising revenue includes the sale of advertising on certain non-music channels . · 2015 vs. 2014 : for the years ended december 31 , 2015 and 2014 , advertising revenue was $ 122,292 and $ 100,982 , respectively , an increase of 21 % , or $ 21,310. the increase was primarily due to a greater number of advertising spots sold and transmitted as well as increases in rates charged per spot . · 2014 vs. 2013 : for the years ended december 31 , 2014 and 2013 , advertising revenue was $ 100,982 and $ 89,288 , respectively , an increase of 13 % , or $ 11,694. the increase was primarily due to a greater number of advertising spots sold and transmitted , as well as increases in rates charged per spot . we expect our advertising revenue to continue to grow as more advertisers are attracted to our national platform and growing subscriber base and as we launch additional non-music channels . equipment revenue includes revenue and royalties from the sale of satellite radios , components and accessories . · 2015 vs. 2014 : for the years ended december 31 , 2015 and 2014 , equipment revenue was $ 110,923 and $ 104,661 , respectively , an increase of 6 % , or $ 6,262. the increase was driven by royalties from higher oem production and sales to distributors , partially offset by lower direct to consumer sales . · 2014 vs. 2013 : for the years ended december 31 , 2014 and 2013 , equipment revenue was $ 104,661 and $ 80,573 , respectively , an increase of 30 % , or $ 24,088. the increase was driven by higher sales to distributors and royalties from oem production , partially offset by lower per unit revenue on direct to consumer sales . we expect equipment revenue to fluctuate based on oem production for which we receive royalty payments for our technology and , to a lesser extent , on the volume of equipment sales in our aftermarket and direct to consumer business . other revenue includes amounts earned from subscribers for the u.s. music royalty fee , revenue from our connected vehicle business and our canadian affiliate and ancillary revenues . · 2015 vs. 2014 : for the years ended december 31 , 2015 and 2014 , other revenue was $ 512,050 and $ 421,150 , respectively , an increase of 22 % , or $ 90,900. the increase was driven by revenues from the u.s. music royalty fee as the number of subscribers subject to the 13.9 % rate increased along with an overall increase in subscribers , higher revenue generated from our connected vehicle business , and increased revenue from our canadian affiliate . story_separator_special_tag our annual effective tax rate for the year ended december 31 , 2013 was 40.8 % , primarily as a result of non-deductible expenses related to the loss on change in value of derivatives . key operating metrics in this section , we present certain financial and operating performance measures that are not calculated and presented in accordance with generally accepted accounting principles in the united states ( “ non-gaap ” ) . these metrics include : average monthly revenue per subscriber , or arpu ; customer service and billing expenses , per average subscriber ; subscriber acquisition cost , or sac , per installation ; free cash flow ; and adjusted ebitda . these measures exclude the impact of share-based payment expense and certain purchase price accounting adjustments related to the merger , which include the : ( i ) elimination of deferred revenue associated with the investment in xm canada , ( ii ) recognition of deferred subscriber revenues not recognized in purchase price accounting , and ( iii ) elimination of the benefit of deferred credits on executory contracts , which are primarily attributable to third party arrangements with an oem and programming providers . additionally , when applicable , our adjusted ebitda and free cash flow metrics exclude the effect of any significant items that do not relate to the on-going performance of our business , such as settlements related to our historical use of pre-1972 sound recordings . we use these non-gaap financial measures to manage our business , to set operational goals and as a basis for determining performance-based compensation for our employees . free cash flow is a metric that our management and board of directors use to evaluate the cash generated by our operations , net of capital expenditures and other investment activity and significant items that do not relate to the on-going performance of our business . in a capital intensive business , with significant investments in satellites , we look at our operating cash flow , net of these investing cash outflows , to determine cash available for future subscriber acquisition and capital expenditures , to repurchase or retire debt , to acquire other companies and to evaluate our ability to return capital to stockholders . we believe free cash flow is an indicator of the long-term financial stability of our business . free cash flow , which is reconciled to “ net cash provided by operating activities , ” is a non-gaap financial measure . this measure can be calculated by deducting amounts under the captions “ additions to property and equipment ” , deducting or adding restricted and other investment activity and the return of capital from investment in unconsolidated entity from “ net cash provided by operating activities ” from the consolidated statements of cash flows , adjusted for any significant legal settlements . free cash flow should be used in conjunction with other gaap financial performance measures and may not be comparable to free cash flow measures presented by other companies . free cash flow should be viewed as a supplemental measure rather than an alternative measure of cash flows from operating activities , as determined in accordance with gaap . free cash flow is limited and does not represent remaining cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt maturities . we believe free cash flow provides useful supplemental information to investors regarding our current and projected cash flow , along with other gaap measures ( such as cash flows from operating and investing activities ) , to determine our financial condition , and to compare our operating performance to other communications , entertainment and media companies . we have excluded the $ 210,000 payment related to the pre-1972 sound recordings legal settlement from our free cash flow calculation in the year ended december 31 , 2015. we believe these non-gaap financial measures provide useful information to investors regarding our financial condition and results of operations . we believe investors find these non-gaap financial performance measures useful in evaluating our core trends because it provides a direct view of our underlying contractual costs . we believe investors use our current and projected adjusted ebitda to estimate our current or prospective enterprise value and to make investment decisions . by providing these non-gaap financial measures , together with the reconciliations to the most directly comparable gaap measure , we believe we are enhancing investors ' understanding of our business and our results of operations . 29 these non-gaap financial measures should be viewed in addition to , and not as an alternative for or superior to , our reported results prepared in accordance with gaap . in addition , these non-gaap financial measures may not be comparable to sim ilarly-titled measures by other companies . please refer to the glossary ( pages 36 through 40 ) for a further discussion of such non-gaap financial measures and reconciliations to the most directly comparable gaap measure . the following table contains our key operating metrics based on our adjusted results of operations for the years ended december 31 , 2015 , 2014 and 2013 . subscribers and subscription related revenues and expenses associated with our connected vehicle services are not included in our subscr iber count or subscriber-based operating metrics : replace_table_token_5_th ( a ) note : amounts may not sum as a result of rounding . subscribers . at december 31 , 2015 , we had approximately 29.6 million subscribers , an increase of approximately 2.3 million subscribers , or 8 % , from the approximate 27.3 million subscribers as of december 31 , 2014 . · 2015 vs. 2014 : for the years ended december 31 , 2015 and 2014 , net additions were 2,283 thousand and 1,752 thousand , respectively , an increase of 30 % , or 531 thousand . the increase in subscribers was primarily due to increases in original and

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

includes interest on outstanding debt . · 2015 vs. 2014 : for the years ended december 31 , 2015 and 2014 , interest expense was $ 299,103 and $ 269,010 , respectively , an increase of 11 % , or $ 30,093 . the increase was primarily due to higher average debt during the year ended december 31 , 2015 compared to the year ended december 31 , 2014. the increase was partially offset by lower average interest rates resulting from the redemption and conversion of higher interest rate debt during 2014 . · 2014 vs. 2013 : for the years ended december 31 , 2014 and 2013 , interest expense was $ 269,010 and $ 204,671 , respectively , an increase of 31 % , or $ 64,339. the increase was primarily due to higher average debt and a 27 reduction in interest capitalized following the launch of our fm -6 satellite . the increase was partially offset by lower average interest rates resulting from the redemption or repayment of higher interest rate debt throughout 2013. we expect interest expense to increase in future periods to the extent the amount of our total debt outstanding increases . loss on extinguishment of debt and credit facilities , net , includes losses incurred as a result of the conversion and retirement of certain debt . · 2015 vs. 2014 : there was no loss on extinguishment of debt and credit facilities for the years ended december 31 , 2015 and 2014 . · 2014 vs. 2013 : for the years ended december 31 , 2014 and 2013 , loss on extinguishment of debt and credit facilities , net , was $ 0 and $ 190,577 , respectively .

as of december 31 , 2004 , the company 's fleet included seven liquefied petroleum gas ( `` lpg `` ) carriers , four containerships and two multipurpose seariver vessels . each of the company 's vessels is owned by a separate wholly owned subsidiary of the company . the company generally employs its vessels on time charter , bareboat charter or spot charter . with time charters , the company receives a fixed charterhire per on-hire day and is responsible for meeting all the operating expenses of the vessels , such as crew costs , voyage expenses , insurance , repairs and maintenance . in the case of bareboat charters , the company receives a fixed charterhire per day for the vessel and the charterer is responsible for all the costs associated with the vessel 's operation during the bareboat charter period . in the case of voyage charters , the vessel is contracted only for a voyage between two ports : the company is paid for the cargo transported and pays all voyage costs . in all chartering arrangements , both shipowner and charterer will generally employ the services of one or more brokers , who are paid a commission on the total value of the daily charterhire or a lump sum payable under the charter party or contract . the level of the company 's revenues and expenses will vary from year to year depending on , inter alia , the number of vessels controlled by the company during each year and the charter rates of those vessels . shipping markets in 2004 , the market recovery accelerated in the small pressurised lpg sector . charter rates have increased substantially since december 31 , 2003 and the company is slowly able to take advantage of such better rates as the existing charters come for renewal . management feels that market strength will remain strong for the next twelve months . the company owns six small fully pressurised lpg carriers . the market for vlgc ( very large gas carrier ) was also quite strong in 2004 ; however , the company 's very large lpg carrier is fixed on a long-term charter until september 2006. vessel values of the lpg ships have also increased substantially and are currently as a whole in excess of book value . in january 2005 , the company received appraisals for its gas fleet from leading independent shipbrokers , which estimated the total gas fleet at approximately $ 60.7 million . in 2004 , the market for containerships remained very strong . market rates are substantially in excess of the current charter rates of the company 's container vessels . high freight rates and limited tonnage supply have also significantly driven up the prices of the second-hand containerships . to take advantage of this strong market , the container vessels were sold in january 2005 ( see subsequent events ) . accumulated deficit . as of december 31 , 2004 , the company 's accumulated deficit was $ 20,792,717. this amount consisted of total accumulated losses ( net of accumulated profits ) of $ 12,096,873 since the company 's inception and dividends declared of $ 8,695,844 over the same period . an additional $ 5,477,561 of dividends were paid and accounted for as a reduction of paid-in capital over the same period . the majority of such dividends were paid prior to 1994 when the company was a self-liquidating fund with a dividend policy based on cash flow generation . as a result of the company 's accumulated deficit position , the stock dividend declared and issued in 2004 was accounted for as a reduction in additional paid-in capital . 10 results of operations for the years ended december 31 , 2004 and december 31 , 2003 significant events during 2004 on may 13 , 2004 , the vlasov group sold all of its 4,168,000 shares of common stock of mc shipping ( approximately 47.78 % ) to v. investments and navalmar . as of may 14 , 2004 , v. investments limited , v. ships group ltd. , v holdings limited , greysea limited , close securities limited , close investment partners limited , navalmar ( uk ) limited , bogazzi fimpar spa , and enrico bogazzi filed a joint form 13d to report that they might be deemed to have shared beneficial ownership of 4,308,790 common shares , which represented approximately 49.39 % of the common stock outstanding . following the purchase of additional shares in the open market by navalmar in the later part of 2004 , v. investments and navalmar control now over 50 % of the outstanding stock of the company . as a result of the above , a number of changes took place in management and the board of directors of the company ( see item 10 - directors and executive officers of the registrant ) and the company incurred significant non-recurring general and administrative expenses ( see below : costs and expenses ) . on october 11 , 2004 , the company entered into a $ 45,000,000 long-term debt agreement with fortis bank in order to refinance all of its outstanding debt including its 11.25 % senior notes due 2008. following the prepayment of its debt , the company recorded a net loss on extinguishment of debt of $ 1,107,369 in the 4 th quarter of 2004 ( see note 5. long term debt ) . the refinancing is expected to provide substantial interest expenses savings in the next few years . story_separator_special_tag interest income totalled $ 110,603 in 2003 , a decrease from interest income of $ 127,559 in 2002. the decrease in interest earnings was due to the reduction in the general level of interest rates and lower cash balances . in 2003 , the company repurchased notes having a total face value of $ 7,000,000 and recorded a gain of $ 2,620,477 on the transaction . in 2002 , the company repurchased notes having a total face value of $ 180,000 and recorded a gain of $ 94,598 on the transactions . the repurchased notes have been retired . the company recognised a $ 1,785,253 gain on the sale of four container vessels in july 2003 . 15 net income the net income for the year ended december 31 , 2003 was $ 3,091,155 as compared to a net income of $ 2,241,906 , for the year ended december 31 , 2002. impact of inflation management believes that inflation did not have a material impact upon the company 's business during the year ended december 31 , 2003. critical accounting policies and estimates the preparation of the company 's financial statements in accordance with accounting principles generally accepted in the united states requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . the following is a discussion of the accounting policies applied by the company that are considered to involve a higher degree of judgment in their application . in accordance with sfas 144 `` accounting for the impairment or disposal of long-lived assets `` , the company 's vessels are regularly reviewed for impairment . the company performs the impairment valuations at the individual vessel level pursuant to paragraph 10 of sfas 144. to consider whether there is an impairment indicator , the company compares the book value and the market value of each vessel at the end of each quarterly reporting period . at year end , the market value used by the company is equal to the average of the appraisals provided by two leading independent shipbrokers . appraisals are based on the technical specifications of each vessel , but are not based on a physical inspection of the vessel . at quarter end , the market values are assessed by the president on the basis of market information , shipping newsletters , sale of comparable vessels reported in the press , informal discussions with shipbrokers or unsolicited proposals received from third parties for the vessels . whenever a vessel market value is above its book value , the company considers there is no indication of impairment . whenever a vessel market value is below its book value , the company considers there is a potential impairment and performs a recoverability test . the company estimates the undiscounted future cash flows attributable to the vessel in order to determine if the book value of such vessel is recoverable . the assumptions used to determine whether the sum of undiscounted cash flows expected to result from the use and eventual disposition of the vessel exceeds the carrying value involve a considerable degree of judgment on the part of management . actual results could differ from those estimates , which could have a material effect on the recoverability of the vessels . the most significant assumptions are : - the time of final disposal corresponds to the estimated useful life of the vessel : 25 years for a container vessel or 30 years for a gas vessel . these assumptions are identical to the ones used for depreciation purposes . - the estimated value at time of disposal is the estimated scrapping price , calculated as lightweight of the vessel in tons times a certain price per ton , conservatively estimated by management relative to market price . - the projected increase in costs and in revenues is equal to the current inflation rate . - the charter rates used in such computations are estimated by the president on the basis of past historical rates and modulated by his assessment of current and expected future economic and industry trends . they are subjective as they correspond to the company 's best estimate of an average long term rate . 16 - the maintenance of the vessel is estimated at one dry-dock every 2.5 years , alternating intermediate and special survey dry-docks , - days on hire are estimated at a level consistent with the company 's on-hire statistics ( see - revenues - results of operations - management discussion and analysis section ) . if the book value of the vessel exceeds the estimated undiscounted future cash flows attributable to the vessel , the company recognizes an impairment loss equal to the excess of the book value over the market value as defined above . story_separator_special_tag the company has issued a guarantee in relation to the fortis loan ( see note 5 to the consolidated financial statements in item 8 ) . off-balance sheet financial arrangements the company had no off-balance sheet financial arrangements as of december 31 , 2004. contingencies in june 2001 , the company sold the 1984-built container vessel maersk tampa to a non-affiliated company with the maersk charter attached . the buyer had the option to give the vessel back on charter to the company in november 2004 for 12 months at a daily rate of $ 17,900 , then a second option in november 2005 for a period of 6 months at a daily rate of $ 17,500. the first option was not exercised . the aggregate amount of the company 's commitment under the second option is approximately $ 3,182,000 as follows : 2005 $ 542,000 2006 $ 2,640,000 total $ 3,182,000 these amounts do not take into consideration any revenues the company would earn from chartering out the vessel to

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and sources of capital liquidity the company had $ 11,629,896 in cash available on december 31 , 2004 as compared to $ 16,446,582 at december 31 , 2003. in addition , on december 31 , 2004 , deposits totalling $ 5,000,000 ( december 31 , 2003 - $ 615,455 ) were pledged to guarantee the company 's performance under the fortis loan agreement . this $ 5,000,000 deposit was released by the bank on january 20 , 2005 following the prepayment of $ 15,000,000 under the fortis loan ( see subsequent events ) . it should be noted that $ 1,255,280 were deposited in vessel operating accounts which are directly operated by the vessel technical managers ( $ 2,005,913 in 2003 ) . the ratio of current assets to current liabilities decreased from 1.79 at december 31 , 2003 to 1 . 18 at december 31 , 2004. the decrease is due for the most part to increase in the current portion of long-term debt , following the refinancing of the company 's existing debt in october 2004 ( see note 5. long term debt ) . investing activities the company did not sell or buy any vessels in 2004. operating activities the company generatedcash flows from operations of $ 6,521,090 in 2004 compared to $ 5,086,297 in 2003. in 2004 , the company dry-docked three vessels for a total cost of $ 368,579. in 2003 , the company dry-docked 8 vessels for a total cost of $ 4.8 million .

we generated revenue of $ 132.9 million , $ 102.7 million and $ 78.8 million during the years ended december 31 , 2020 , 2019 , and 2018 , respectively , representing growth of 29 % in 2020 and 30 % in 2019. excluding the impact of the 2017 acquisition of simply measured , inc. , or simply measured , our organic growth rate in 2020 and 2019 was 36 % and 44 % , respectively . this organic growth rate excludes the impact of revenue generated from legacy simply measured products as well as revenue from the transition of legacy customers to our platform up to an amount equal to such customers ' prior spend on legacy simply measured products . this organic growth rate includes all incremental revenue generated above such prior spend from the sale of additional or higher-priced products and users and profiles to legacy customers of simply measured . in 2020 , software subscriptions contributed 99 % of our revenue . we generated net losses of $ 31.7 million , $ 46.8 million , and $ 20.9 million during the years ended december 31 , 2020 , 2019 , and 2018 , respectiv ely . our net losses include stock-based compensation expense of $ 11.1 million , $ 25.3 million and $ 0.1 million in the years ended december 31 , 2020 , 2019 , and 2018 , respectively . the higher stock-based compensation expense in 2019 was primarily due to the vesting of rsus in connection with our ipo in december 2019. we expect to continue investing in the growth of our business and , as a result , generate net losses for the foreseeable future . covid-19 in december 2019 , a novel coronavirus disease ( “ covid-19 ” ) was identified . on march 11 , 2020 , the world health organization characterized covid-19 as a pandemic . the extent of the impact of covid-19 on our operational and financial performance and financial position will depend on certain developments , including the duration and spread of the outbreak and the governmental responses to address the pandemic and any re-emergence of covid-19 , impact on our customers and sales cycles and impact on our employees , all of which are uncertain and can not be predicted . given the importance of our technology platform and heightened market awareness of social media as a strategic communications channel , our operational and financial performance were not materially impacted by covid-19 during the year ended december 31 , 2020. our recent ipo in december 2019 resulted in $ 134.3 million net procee ds , as well as an additional $ 10.0 million of net proceeds received in january 2020 as a result of our sale of over-allotment shares to the underwriters of the company 's ipo , all of wh ich strengthened our liquidity position prior to the pandemic . the $ 42.1 million in net proceeds from our equity follow-on offering in august 2020 has further strengthened our liquidity position . we believe that over the long term , we will continue to see strong demand for our technology platform ; however , the duration and spread of the pandemic could impact our customers ' marketing or 59 social media budgets or ability to pay for existing subscriptions , particularly in the industries most impacted by covid-19 . we will continue to monitor the potential impact of covid-19 ; however , at this time , the extent to which the pandemic may impact our financial condition or results of operations is uncertain . key factors affecting our performance acquiring new customers we are focused on continuing to organically grow our customer base by increasing demand for our platform and penetrating our addressable market . we have invested , and expect to continue to invest , heavily in expanding our sales force and marketing efforts to acquire new customers . currently , we have more than 26,000 customers . we calculate the lifetime value of our customers and associated customer acquisition costs for a particular year by comparing ( i ) gross profit from net new organic arr for the year divided by one minus the estimated subscription renewal rate to ( ii ) total sales and marketing expense incurred in the preceding year . on this basis , we estimate that for each of 2020 and 2019 , the calculated lifetime value of our customers has exceeded six times the associated cost of acquiring them . this calculation assumes the actual subscription renewal rate for the period will remain consistent in future years . while we believe this assumption is reasonable based on our historic data and experience , subscription renewal rates may vary year-to-year , and the lifetime value of our customers may decline or fluctuate between periods . moreover , our sales and marketing expense reflects the amortization of sales commissions , which are deferred and amortized over a three-year period in accordance with gaap . if all sales commissions incurred in the year were expensed and not amortized , the result would not have a material impact on the lifetime value of our customers . see “ —key business metrics—organic arr ” for more information on how we define and calculate organic arr . expanding within our current customer base we believe that there is a substantial and largely untapped opportunity for organic growth within our existing customer base . customers often begin by purchasing a small number of user subscriptions and then expand over time , increasing the number of users or social profiles , as well as purchasing additional product modules . customers may then expand use-cases between various departments to drive collaboration across their organizations . our sales and customer success efforts include encouraging organizations to expand use-cases to more fully realize the value from the broader adoption of our platform throughout an organization . story_separator_special_tag the increase in stock-based compensation was due to the initial expense related to employee rsus vesting as a result of the completion of our ipo on december 17 , 2019. operating expenses research and development replace_table_token_19_th 71 the increase in research and development expense for the year ended december 31 , 2019 compared to the year ended december 31 , 2018 was primarily due to the following : change ( in thousands ) stock-based compensation expense $ 2,262 other 371 research and development $ 2,633 the increase in stock-based compensation was due to the initial expense related to employee rsus vesting as a result of the completion of our ipo on december 17 , 2019. sales and marketing replace_table_token_20_th the increase in sales and marketing expense for the year ended december 31 , 2019 compared to the year ended december 31 , 2018 was primarily due to the following : change ( in thousands ) personnel costs $ 9,748 stock-based compensation expense 8,682 other 1,174 sales and marketing $ 19,604 personnel costs increased primarily as a result of a 31 % increase in headcount as we continue to expand our sales teams to grow our customer base , as well as additional sales commission expense due to the year over year sales growth , which increased the amortization of contract acquisition costs . the increase in stock-based compensation was due to the initial expense related to employee rsus vesting as a result of the completion of our ipo on december 17 , 2019. general and administrative replace_table_token_21_th 72 the increase in general and administrative expense for the year ended december 31 , 2019 compared to the year ended december 31 , 2018 was primarily due to the following : change ( in thousands ) stock-based compensation expense $ 13,219 personnel costs 2,755 bad debt expense 1,415 rent expense 1,101 other 2,503 general and administrative $ 20,993 stock-based compensation expense increased $ 9.4 million as the result of restricted stock award and restricted stock unit grants to our chairman and chief executive officer that immediately vested in june and december 2019 , respectively . the remaining increase in stock-based compensation was due to the initial expense related to employee rsus vesting as a result of the completion of our ipo on december 17 , 2019. personnel costs increased primarily as a result of a 72 % increase in headcount as we continue to grow our business . bad debt expense increased due to higher accounts receivable balances and the attrition of customers acquired in the simply measured acquisition . rent expense increased due to renting additional office space . interest income ( expense ) , net replace_table_token_22_th the increase in net interest income was driven by interest earned on cash deposits , as well as a decrease in interest expense related to line of credit borrowings . other income replace_table_token_23_th the increase in other income is due to sublease rental income from our seattle , washington and san francisco , california offices . 73 income tax expense years ended december 31 , change 2019 2018 amount % ( dollars in thousands ) income tax expense $ 66 $ 22 $ 44 n/m ( 1 ) percentage of total revenue — % — % _ ( 1 ) calculated metric is not meaningful . the increase in income tax expense is due to the provision related to foreign income taxes . non-gaap financial measures in addition to our results determined in accordance with u.s. generally accepted accounting principles , or gaap , we believe the following non-gaap measures are useful in evaluating our operating performance . we use the below non-gaap financial information , collectively , to evaluate our ongoing operations and for internal planning and forecasting purposes . we believe that non-gaap financial information , when taken collectively , may be helpful to investors because it provides consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business , operating results or future outlook . however , non-gaap financial information is presented for supplemental informational purposes only , has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with gaap . in addition , other companies , including companies in our industry , may calculate non-gaap financial measures differently or may use other measures to evaluate their performance , all of which could reduce the usefulness of our non-gaap financial measures as tools for comparison . investors are encouraged to review the related gaap financial measures and the reconciliation of these non-gaap financial measures to their most directly comparable gaap financial measures , and not to rely on any single financial measure to evaluate our business . replace_table_token_24_th non-gaap operating loss we define non-gaap operating loss as gaap loss from operations , excluding stock-based compensation expense . we believe non-gaap operating loss provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations , as this non-gaap financial measure eliminates the effect of stock-based compensation , which is often unrelated to overall operating performance , particularly given the impact of stock-based compensation expense recognized in december 2019 upon the completion of the ipo . 74 replace_table_token_25_th non-gaap net loss we define non-gaap net loss as gaap net loss and comprehensive loss , excluding stock-based compensation expense . we believe non-gaap net loss provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations , as this non-gaap financial measure eliminates the effect of stock-based compensation , which is often unrelated to overall operating performance , particularly given the impact of stock-based compensation expense recognized in december 2019 upon the completion of the ipo . replace_table_token_26_th non-gaap net loss per share we define non-gaap net loss per share as gaap net loss per share attributable to common shareholders , basic and diluted , excluding stock-based

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our liquidity and capital resources were not materially impacted by the covid-19 pandemic and the governmental responses to address the pandemic and the related economic impact during the year ended december 31 , 2020. for further discussion regarding the future potential impacts of covid-19 and the related economic impacts on our liquidity and capital resources , see “ risk factors—risks related to our business model and operations—the effects of the covid-19 pandemic are unpredictable and may materially affect our customers and how we operate our business , and the duration and extent to which the pandemic continues ( including any reemergence of covid-19 ) to threaten our future results of operations and overall financial performance remains uncertain. ” as of december 31 , 2020 , our principal sources of liquidity were cash and cash equivalents of $ 114.5 million , marketable securities of $ 49.4 million , and net accounts receivable of $ 17.2 million . we have generated losses from operations and negative cash flows from operations , as evidenced by our accumulated deficit and statement of cash flows . we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future due to the investments in our business we intend to make as described above . we may experience greater than anticipated operating losses in the short- and long-term if the covid-19 pandemic and the governmental responses to address the pandemic and any re-emergence of covid-19 persist for a prolonged period of time . the impact of the covid-19 pandemic on our customers and our operations going forward remains uncertain , and we continue to proactively monitor our liquidity position . prior to our ipo in december 2019 , we financed our operations primarily through private issuance of equity securities and line of credit borrowings . in our ipo , we received net proceeds of $ 134.3 million after deducting underwriting discounts and commissions of $ 10.5 million and offering expenses of $ 5.2 million . see notes 1 , 7 and 8 to our audited consolidated financial statements for more information regarding these transactions .

because of contract payment schedules , limitations on funding and other contract terms , our sales and accounts receivable for this segment include amounts that have been earned but not yet billed . 21 corporate strategy our drive for 10 vision encompasses five strategic levers that are key to growing our business and achieving long-term success . since launching drive for 10 in 2011 , we made progress on each of the levers as follows : · maximizing value in our existing businesses by rationalizing standard beverage container and end capacity in north america and expanding specialty container production to meet current demand ; leveraging plant floor systems in our metal beverage facilities to improve efficiencies and reduce costs ; consolidating and or closing multiple metal beverage and metal food and aerosol packaging facilities ; relocating our european headquarters to zurich , switzerland , to gain business , customer and supplier efficiencies ; and implementing cost-out and value-in initiatives across all of our businesses ; · expanding further into new products and capabilities by expanding into extruded aluminum aerosol manufacturing with our mexican acquisition in december 2012 and the installation of a new extruded aluminum aerosol line in our deforest , wisconsin , facility during 2014 ; and successfully commercializing extruded aluminum aerosol packaging that utilizes a significant amount of recycled material ; · aligning ourselves with the right customers and markets by investing capital to meet double-digit volume growth for specialty beverage containers throughout our global network , which now represent over 27 percent of our global beverage packaging mix , and the introduction of next generation aluminum bottle-shaping technology in north america for a customer under a long term arrangement that is scheduled to start up at the end of the first quarter 2015 ; · broadening our geographic reach with new investments in a metal beverage manufacturing facility in myanmar , as well as an extruded aluminum aerosol manufacturing facility in india , and the award of a south korean environmental instrument in our aerospace business ; and · leveraging our technological expertise in packaging innovation , including the introduction of next-generation aluminum bottle-shaping technologies , the introduction of a new steel aerosol manufacturing technology starting up in mid-2015 and a joint effort between our aerospace business , nasa and the japan aerospace exploration agency to collect science data on the earth 's rain and snowfall via the global precipitation measurement ( gpm ) microwave imager , as well as other technologies to maintain our competitive advantage today and in the future . these ongoing business developments help us stay close to our customers while expanding and or sustaining our industry positions with major beverage , food , personal care , household products and aerospace customers . results of operations consolidated sales and earnings replace_table_token_7_th the increase in net sales in 2014 compared to 2013 was due primarily to higher metal beverage container sales volumes and higher aerospace program revenues , partially offset by lower north american food and household product volumes . net earnings were favorably impacted by higher metal beverage container sales volumes , lower cost of sales as a percentage of net sales , lower depreciation expense , lower interest expense and a lower tax rate in 2014 , partially offset by lower north american food and household product volumes , unfavorable tinplate service center manufacturing performance in the u.s. , higher debt refinancing costs and higher selling , general and administrative costs in 2014. the decrease in net sales in 2013 compared to 2012 was driven largely by lower demand for standard 12-ounce aluminum beverage containers in the u.s. , partially offset by specialty can growth in the americas and higher sales volumes in europe , brazil and the prc . earnings were flat compared to 2012 with lower standard 12-ounce volumes in the u.s. and higher selling , general and administrative expenses being offset by higher specialty can volumes in the americas and improved cost management in our global packaging operations . 22 cost of sales ( excluding depreciation and amortization ) cost of sales , excluding depreciation and amortization , was $ 6,903.5 million in 2014 compared to $ 6,875.4 million in 2013 and $ 7,174.0 million in 2012. these amounts represented 80.6 percent , 81.2 percent and 82.1 percent of consolidated net sales for those three years , respectively . depreciation and amortization depreciation and amortization expense was $ 280.9 million in 2014 compared to $ 299.9 million in 2013 and $ 282.9 million in 2012. these amounts represented 3.3 percent , 3.5 percent and 3.2 percent of consolidated net sales for those three years , respectively . lower expense in 2014 compared to 2013 was largely due to the completion of depreciation for certain acquired european assets . the higher expense in 2013 compared to 2012 was primarily due to capital spending in excess of historical levels and changes in currency exchange rates . selling , general and administrative selling , general and administrative ( sg & a ) expenses were $ 466.5 million in 2014 compared to $ 418.6 million in 2013 and $ 385.5 million in 2012. these amounts represented 5.4 percent , 4.9 percent and 4.4 percent of consolidated net sales for those three years , respectively . the increase in sg & a in 2014 compared to 2013 was primarily due to higher incentive compensation and employee benefit costs and other individually insignificant higher costs . the higher expenses in 2013 compared to 2012 were largely related to the reassessment of certain expenses in europe from cost of sales to sg & a in light of the relocation of the european headquarters . interest expense consolidated interest expense was $ 193.0 million in 2014 compared to $ 211.8 million in 2013 and $ 194.9 million in 2012. excluding debt refinancing costs , interest expense in 2014 was lower than in 2013 due primarily to lower average debt levels and lower average borrowing rates . story_separator_special_tag based on the above definitions , our calculation of comparable ebit is summarized below : replace_table_token_13_th our calculations of comparable ebitda , the comparable ebit to interest coverage ratio and the net debt to comparable ebitda ratio are summarized below : replace_table_token_14_th 29 our calculation of comparable earnings is summarized below : replace_table_token_15_th ( a ) 2012 amounts have been revised for the prior period correction of deferred taxes ; further details are included in note 1 to the consolidated financial statements within item 8 of this annual report . free cash flow management internally uses a free cash flow measure : ( 1 ) to evaluate the company 's operating results , ( 2 ) to evaluate strategic investments , ( 3 ) to plan stock buyback and dividend levels and ( 4 ) to evaluate the company 's ability to incur and service debt . free cash flow is not a defined term under u.s. gaap , and it should not be inferred that the entire free cash flow amount is available for discretionary expenditures . the company defines free cash flow as cash flow from operating activities less capital expenditures . free cash flow is typically derived directly from the company 's consolidated statement of cash flows ; however , it may be adjusted for items that affect comparability between periods . based on the above definition , our consolidated free cash flow is summarized as follows : replace_table_token_16_th based on information currently available , we estimate cash flows from operating activities for 2015 to be in the range of $ 1 billion , capital expenditures to be approximately $ 400 million and free cash flow to be in the range of $ 600 million . in 2015 , we intend to utilize our operating cash flow to fund our stock repurchases , dividend payments , growth capital projects and , to the extent available , acquisitions that meet our various criteria . of the total 2015 estimated capital expenditures , approximately $ 170 million was contractually committed as of december 31 , 2014 . 30 commitments cash payments required for long-term debt maturities , rental payments under noncancellable operating leases , purchase obligations and other commitments in effect at december 31 , 2014 , are summarized in the following table : replace_table_token_17_th ( a ) amounts reported in local currencies have been translated at year-end 2014 exchange rates . ( b ) for variable rate facilities , amounts are based on interest rates in effect at year end and do not contemplate the effects of any hedging instruments utilized by the company . ( c ) the company 's purchase obligations include contracted amounts for aluminum , steel and other direct materials . also included are commitments for purchases of natural gas and electricity , expenses related to aerospace and technologies contracts and other less significant items . in cases where variable prices and or usage are involved , management 's best estimates have been used . depending on the circumstances , early termination of the contracts may or may not result in penalties and , therefore , actual payments could vary significantly . the table above does not include $ 65.5 million of uncertain tax positions , the timing of which is unknown at this time . contributions to the company 's defined benefit pension plans , not including the unfunded german plans , are expected to be insignificant in 2015. this estimate may change based on changes in the pension protection act and actual plan asset performance and available company cash flow , among other factors . benefit payments related to these plans are expected to be $ 91.6 million , $ 94.9 million , $ 98.8 million , $ 102.1 million and $ 106.0 million for the years ending december 31 , 2015 through 2019 , respectively , and a total of $ 572.8 million for the years 2020 through 2024. payments to participants in the unfunded german plans are expected to be between $ 18 million and $ 20 million in each of the years 2015 through 2019 and a total of $ 87 million for the years 2020 through 2024. based on changes in return on asset and discount rate assumptions , as well as revisions based on plan experience studies , total pension expense in 2015 is anticipated to be approximately $ 7 million higher than in 2014 , excluding curtailment expenses . a reduction of the expected return on pension assets assumption by one quarter of a percentage point would result in an estimated $ 3.6 million increase in the 2015 pension expense , while a quarter of a percentage point reduction in the discount rate applied to the pension liability would result in an estimated $ 5.4 million of additional pension expense in 2015. additional information regarding the company 's pension plans is provided in note 14 accompanying the consolidated financial statements within item 8 of this annual report . due to the u.s. tax status of certain of ball 's subsidiaries in canada and the prc , the company annually provides u.s. taxes on foreign earnings in those subsidiaries , net of any estimated foreign tax credits . the company also provides deferred taxes on the undistributed earnings in its brazil investment related to its 10 percent indirectly held investment . current taxes are also provided on certain other undistributed earnings that are currently taxed in the u.s. net u.s. taxes provided for brazil , canada and prc earnings in 2014 , 2013 and 2012 were $ 11.8 million , $ 26.4 million and $ 14.5 million , respectively . management 's intention is to indefinitely reinvest undistributed earnings of ball 's remaining foreign investments and , as a result , no u.s. income or federal withholding tax provision has been made . the indefinite reinvestment assertion is supported by both long-term and short-term forecasts and u.s. financial requirements , including , but not limited to ,

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows and capital expenditures our primary sources of liquidity are cash provided by operating activities and external committed borrowings . we believe that cash flows from operations and cash provided by short-term , long-term and committed revolver borrowings , when necessary , will be sufficient to meet our ongoing operating requirements , scheduled principal and interest payments on debt , dividend payments , proposed acquisitions , including the announced , proposed acquisition of rexam , and anticipated capital expenditures . the following summarizes our cash flows : replace_table_token_12_th cash flows from operations in 2014 improved compared to 2013 due to higher net earnings and favorable working capital changes . the favorable working capital changes were primarily related to lower days sales outstanding , lower inventory days on hand and higher days payable outstanding . days sales outstanding decreased from 36 days to 34 days , inventory days on hand decreased from 53 days to 52 days and days payable outstanding increased from 51 days to 69 days . working capital changes in 2013 compared to 2012 were primarily related to higher days payable outstanding and lower days sales outstanding , partially offset by higher inventory days on hand . days payable outstanding increased from 47 days to 51 days , days sales outstanding decreased from 37 days to 36 days and inventory days on hand increased from 51 days to 53 days . we have entered into several regional uncommitted accounts receivable factoring programs with various financial institutions for certain accounts receivables of the company . the programs are accounted for as true sales of the receivables , without recourse to ball , and had combined limits of approximately $ 293 million at december 31 , 2014. a total of $ 197.6 million and $ 137.5 million were sold under these programs as of december 31 , 2014 and 2013 , respectively .

we are targeting a majority of the cost savings achieved to improve margins and earnings , while the remainder will be reinvested in high-growth digital business opportunities . 20 in fiscal years 2018 and 2017 , we recorded pre-tax restructuring charges of $ 29 million and $ 13 million , respectively , related to this program . these charges are reflected in restructuring and related charges on the consolidated statements of income and summarized in the following table : replace_table_token_5_th other activities in 2017 reflects leased facility consolidations contract termination costs , and the curtailment of certain defined benefit pension plans . amortization of intangibles : amortization of intangibles for fiscal year 2018 declined 3 % to $ 48 million , or 5 % on a constant currency basis compared with prior year . the decrease was a result of the completion of amortization of certain acquired intangible assets . interest expense : interest expense for fiscal year 2018 decreased $ 4 million to $ 13 million on a reported and constant currency basis . this decrease was due to lower average debt balances outstanding , partially offset by a higher average effective borrowing rate . foreign exchange transaction ( losses ) gains : we reported foreign exchange transaction losses of $ 13 million for fiscal year 2018 compared to gains of $ 0.4 million in the prior year . the losses in fiscal year 2018 were primarily due to the impact of the change in average foreign exchange rates as compared to the u.s. dollar on our intercompany and third-party accounts receivable and payable balances . provision for income taxes : the following table summarizes the effective tax rate for fiscal years 2018 and 2017 : replace_table_token_6_th on december 22 , 2017 , the u.s. government enacted comprehensive federal tax legislation originally known as the tax cuts and jobs act of 2017 ( the `` tax act `` ) . in december 2017 , the sec staff issued staff accounting bulletin no . 118 , income tax accounting implications of the tax cuts and jobs act ( `` sab 118 `` ) , which allows us to record provisional amounts related to the effect of the tax act during a measurement period not to extend beyond one year of the enactment date . as the tax act was passed in december 2017 , and ongoing guidance and accounting interpretation are expected over the 12 months following enactment , we consider the accounting of the transition tax , deferred tax re-measurements , and other items to be provisional due to the forthcoming guidance and our ongoing analysis of final data and tax positions . we expect to complete our analysis within the measurement period in accordance with sab 118 . 21 the effective tax rate was lower in fiscal 2018 as compared with fiscal 2017 due to the estimated net tax benefit from non-recurring items in the tax act and the effect of the german tax litigation in fiscal year 2017 as described below . estimated non-recurring items in the tax act reduced our income tax expense by $ 25 million ( $ 0.43/share ) or a reduction in our effective tax rate of 11.7 percentage points for fiscal year 2018. excluding the effect of the tax act , the rate was 21.9 % for fiscal year 2018. the rate excluding the benefit from the non-recurring items in the tax act was lower than the u.s. statutory rate for the year ended april 30 , 2018 , primarily due to lower rates applicable to non-u.s. earnings . german tax litigation expense : in fiscal 2017 , the german federal fiscal court affirmed a lower court decision disallowing deductions related to a stepped-up basis in certain assets . as a result , we incurred an income tax charge of approximately $ 49 million ( $ 0.85 per share ) . deferred tax benefit from u.k. statutory tax rate change : in fiscal year 2016 , the u.k. reduced its statutory rate to 19 % beginning april 1 , 2017 and 18 % beginning april 1 , 2020 , and in fiscal year 2017 , the u.k. further reduced its statutory rate beginning on april 1 , 2020 , from 18 % to 17 % . this resulted in a non-cash deferred tax benefit from the re-measurement of our applicable u.k. deferred tax balances of $ 6 million ( $ 0.10 per share ) in fiscal year 2016 and $ 3 million ( $ 0.04 per share ) in fiscal year 2017. the tax act on december 22 , 2017 , the u.s. government enacted comprehensive tax legislation . the tax act significantly revises the future ongoing u.s. corporate income tax system by , among other changes , the following : · lowering the u.s. federal corporate income tax rate to 21 % with a potentially lower rate for certain foreign derived income ; · accelerating deductions for certain business assets ; · changing the u.s. system from a worldwide tax system ; · requiring companies to pay a one-time transition tax on post-1986 unrepatriated cumulative non-u.s. earnings and profits ( `` e & p `` ) of foreign subsidiaries ; · eliminating certain deductions such as the domestic production deduction ; · establishing limitations on the deductibility of certain expenses including interest and executive compensation ; and · creating new taxes on certain foreign earnings . the key impacts for the period were the re-measurement of u.s. deferred tax balances to the new u.s. corporate tax rate and the accrual for the one-time transition tax liability . while we have not yet completed our assessment of the effects of the tax act , we are able to determine reasonable estimates for the impacts of these key items and reported provisional amounts for these items . in accordance with sab 118 , we are providing additional disclosures related to these provisional amounts . story_separator_special_tag provision for income taxes : the effective tax rate for fiscal year 2017 was 40.5 % , compared to 16.6 % in the prior year . the increase was due to the unfavorable german court decision described below . excluding the expense related to that decision , the rate for fiscal year 2017 would have been 14.9 % . the rate for fiscal year 2017 , excluding the german court decision , was lower than the prior year 's rate due to non-recurring foreign and domestic tax benefits and a favorable earnings mix , partially offset by the impact of non-cash deferred tax benefits related to legislation enacted in the u.k. in fiscal year 2016 , the u.k. reduced its statutory rate to 19 % beginning april 1 , 2017 , and 18 % beginning april 1 , 2020 , and in fiscal year 2017 , the u.k. further reduced its statutory rate beginning on april 1 , 2020 , from 18 % to 17 % . this resulted in a tax benefit from the re-measurement of our applicable u.k. deferred tax balances of $ 5.9 million in fiscal year 2016 and $ 2.6 million in fiscal year 2017 . 28 unfavorable german court decision in fiscal year 2003 , we reorganized several of our german subsidiaries into a new operating entity which enabled us to increase ( `` step-up `` ) the tax deductible net asset basis in certain assets and claim additional tax amortization deductions over 15 years beginning that fiscal year . in may 2012 , as part of its routine tax audit process , the german tax authorities challenged our tax position . in september 2014 , we filed an appeal with the local finance court . as required by german law , we paid all contested taxes and the related interest to avail ourselves of our right to defend our position . we made all required payments with cumulative total deposits of 56.6 million euros , including interest . in october 2014 , we received an unfavorable decision from the local finance court , which we appealed in january 2015 to the german federal fiscal court . on september 26 , 2016 , we learned that the court denied our appeal and its tax position . no further appeals are available . as a result , we forfeited our deposit and incurred an income tax charge of $ 49 million . this one-time charge is included in our income tax expense for fiscal year 2017. earnings per share : earnings per diluted share for fiscal year 2017 was $ 1.95 per share , compared to $ 2.48 per share in the prior year . the decrease was mainly driven by the impact of the unfavorable german court tax decision described above ( $ 0.85 per share ) , lower publishing revenue , the impact of a large backfile sale in the prior year ( $ 0.10 per share ) , a one-time charge related to the pension plan settlement ( $ 0.09 per share ) , lower non-cash deferred tax benefits related to changes in the u.k. corporate income tax rates ( $ 0.06 per share ) , technology spending for our erp and other related systems ( $ 0.08 per share ) , and the unfavorable impact of foreign exchange translation ( $ 0.04 per share ) . partially offsetting the decreases were the impact of the transition to time-based digital journal subscription agreements ( $ 0.38 per share ) , lower restructuring charges in the current year ( $ 0.17 per share ) , one-time tax benefits ( $ 0.12 per share ) , and favorable employment cost reductions . the favorable employment cost reductions include the benefit for changes in our retiree and long-term disability health plans ( $ 0.07 per share ) , a life insurance recovery in the current year ( $ 0.02 per share ) and a disability settlement charge in the prior year ( $ 0.03 per share ) . segment operating results : effective august 1 , 2016 , we completed a number of changes to our organizational structure that resulted in a change in how we manage our businesses , allocate resources , and measure performance . as a result , we revised our segments into three new reporting segments to reflect how management currently reviews financial information and makes operating decisions . all prior period amounts have been restated to reflect the new reporting segment structure . the new reporting structure consists of research ( journals and related content and services ) , publishing ( books and related content , course workflow , and test preparation ) , and solutions ( online program management , corporate learning , and professional assessment ) . 29 replace_table_token_12_th ( a ) adjusted to exclude the fiscal year 2017 and 2016 restructuring charges revenue : research revenue for fiscal year 2017 increased 3 % to $ 853.5 million , or 7 % on a constant currency basis . this increase was mainly driven by the following : · journal subscriptions revenue of $ 35 million due to the transition to time-based digital journal subscription agreements from issue-based ; · incremental revenue from the acquisition of atypon of $ 19 million ; and · author-funded access revenue growth of $ 7 million , reflecting new titles and increased business as well as growth associated with the journal of american heart association . these factors were partially offset by a decline in licensing , reprints , backfiles , and other of $ 6 million , primarily due to a large backfile sale in the prior year . excluding the transition to time-based revenue and the impact of foreign exchange , journal subscription revenue was consistent with the prior period . as of april 30 , 2017 , calendar year 2017 journal subscription renewals were 1 % higher than calendar year 2016 on a currency neutral basis , with approximately 97 %

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash provided by operating activities $ 381.8 high-single digit decline capital expenditures $ 150.7 modestly lower · wiley anticipates low-single digit revenue growth in research and solutions offset by a low-single digit revenue decline in publishing . · adjusted eps is expected to decline primarily due to increased investment in revenue growth initiatives , particularly in research and education services . · cash provided by operating activities reflects the impact of growth investments and substantially lower gains in working capital . · capital expenditures are expected to decline modestly with the completion of our headquarters transformation . increased investment is expected in areas of product development and business optimization . 33 liquidity and capital resources : principal sources of liquidity we believe that our operating cash flow , together with our revolving credit facilities and other available debt financing , will be adequate to meet our operating , investing , and financing needs in the foreseeable future , although there can be no assurance that continued or increased volatility in the global capital and credit markets will not impair our ability to access these markets on terms commercially acceptable . we do not have any off-balance-sheet debt . as of april 30 , 2018 , we had cash and cash equivalents of $ 169.8 million , of which approximately $ 147.9 million , or 87 % was located outside the u.s. maintenance of these cash and cash equivalent balances outside the u.s. does not have a material impact on the liquidity or capital resources of our operations . notwithstanding the tax act which generally eliminated federal income tax on future cash repatriation to the u.s. , cash repatriation may be subject to state and local taxes or withholding or similar taxes .

we use words such as “ anticipate , ” “ estimate , ” “ plan , ” “ project , ” “ continuing , ” “ ongoing , ” “ expect , ” “ believe , ” “ intend , ” “ may , ” “ will , ” “ should , ” “ could , ” and similar expressions to identify forward-looking statements . all forward-looking statements included in this report are based on information available to us on the date hereof and , except as required by law , we assume no obligation to update any such forward-looking statements . overview we are engaged in the business of developing , commercializing and licensing proprietary processes and technologies for the $ 350+ billion semiconductor industry . our lead technology , named mears silicon technology tm , or mst ® , is a thin film of reengineered silicon , typically 100 to 300 angstroms ( or approximately 20 to 60 silicon atomic unit cells ) thick . mst ® can be applied as a transistor channel enhancement to cmos-type transistors , the most widely used transistor type in the semiconductor industry . mst ® is our proprietary and patent-protected performance enhancement technology that we believe addresses a number of key engineering challenges facing the semiconductor industry . we believe that by incorporating mst ® , transistors can be smaller , with increased speed , reliability and energy efficiency . in addition , since mst ® is an additive and low cost technology , it can be deployed on an industrial scale , with machines commonly used in semiconductor manufacturing . we believe that mst ® can be widely incorporated into the most common types of semiconductor products , including analog , logic , optical and memory integrated circuits . we do not intend to design or manufacture integrated circuits directly . instead , we intend to develop and license technologies and processes that will offer the designers and manufacturers of integrated circuits a low-cost solution to the industry need for greater performance and lower power consumption . our customers and partners are expected to include : · foundries , which manufacture integrated circuits on behalf of fabless manufacturers ; · integrated device manufacturers , or idms , which are the fully integrated designers and manufacturers of integrated circuits ; · fabless semiconductor manufacturers , which are designers of integrated circuits who outsource the manufacture of their chips to foundries ; · original equipment manufacturers , or oems , that manufacture the epitaxial , or epi , machines used to deposit semiconductor layers , such as the mst ® onto the base silicon wafer ; and · electronic design automation companies , which make tools used throughout the industry to simulate performance of semiconductor products using different materials , design structures and process technologies . we intend to generate revenue through licensing arrangements whereby foundries and idms pay us a license fee for their use of mst ® technology in the manufacture of silicon wafers as well as a royalty for each silicon wafer or device that incorporates our mst ® technology . we also intend to enter into licensing arrangements with fabless semiconductor manufacturers pursuant to which we will charge them a royalty for each device they sell that incorporates our mst ® technology . we were organized as a delaware limited liability company under the name nanovis llc on november 26 , 2001. on march 13 , 2007 , we converted to a delaware corporation under the name mears technologies , inc. on january 12 , 2016 , we changed our name to atomera incorporated . on march 17 , 2015 , we completed the private placement of $ 14.75 million in senior secured convertible promissory notes , which we issued for cash consideration of $ 7.40 million and the exchange for previously issued promissory notes that at the time of exchange had principal and accrued interest in the aggregate amount of $ 7.35 million . on april 1 , 2016 we completed the private placement of an additional $ 5.96 million in senior secured convertible notes on the same terms as the promissory notes placed in march 2015. we refer to these promissory notes in this annual report as our “ secured notes . ” during october 2015 , we conducted a recapitalization of our outstanding options and warrants to purchase shares of our common stock . pursuant to the recapitalization , we offered all holders of our options and warrants as of december 31 , 2014 a one-time opportunity to exchange their options and warrants for shares of our common stock at a ratio of two options or warrants for one share of common stock regardless of exercise price . the offer resulted in 166,230 options and 601,861 warrants converting to a total of 384,045 shares of common stock . in connection with the recapitalization , we incurred a one-time non-cash charge of approximately $ 2.09 million in the fourth quarter of 2015 relating to our loss on the exchange of the options and warrants for the common stock . on december 11 , 2015 , we effected a 1-for-15 reverse stock split of our common stock . all historical share amounts and share price information presented in this report have been proportionally adjusted to reflect the impact of this reverse stock split . 17 on august 10 , 2016 , we closed our initial public offering of 3,680,000 share of common stock at a public offering price of $ 7.50 per share . the common stock included 480,000 shares sold as a result of the underwriter 's exercise in full of its overallotment option . story_separator_special_tag gross proceeds to us from this offering were $ 27,600,000 before deducting underwriting discounts , commissions and other offering expenses . in accordance with the terms of the secured notes , all principal plus accrued interest ( totaling approximately $ 23.5 million ) converted automatically upon consummation of the ipo into 6,264,659 million shares of common stock . results of operations for the years ended december 31 , 2016 and 2015 revenues . we have not commenced revenue-producing operations . operating expenses . operating expenses consist of research and development , general and administrative , and selling and marketing expenses . for the years ended december 31 , 2016 and 2015 our operating expenses totaled approximately $ 10.0 million and $ 5.5 million , respectively . research and development expense . to date , our operations have focused on the research , development , patent protection , and commercialization of our processes and technologies , including our proprietary and patent-protected mst ® performance enhancement technology . our research and development costs primarily consist of payroll and benefit costs for our engineering staff and costs of outsourced fabrication and metrology of semiconductor wafers incorporating our mst ® technology . the timing and amount of our outsourced fabrication and metrology is highly dependent on evaluations by our prospective customers and partners . as a result , the level of our research and development costs can vary significantly among accounting periods . for the years ended december 31 , 2016 and 2015 , we incurred approximately $ 4.0 million and $ 2.0 million , respectively , of research and development expense , an increase of approximately $ 2.0 million or 97 % . the increase in research and development expense is primarily due to an increase of approximately $ 939,000 in spending on outsourced fabrication and metrology to support increased engagements with potential customers evaluating our mst ® and an increase of approximately $ 783,000 in payroll expense reflecting an increase in engineering headcount and accrual of bonus expenses under a program implemented during 2016. we expect that engineering headcount in 2017 will remain at or above the level of 2016. general and administrative expense . general and administrative expenses consist primarily of payroll and benefit costs for administrative personnel , office-related costs and professional fees . general and administrative costs for the years ended december 2016 and 2015 were approximately $ 5.1 million and $ 3.4 million , respectively , representing an increase of approximately $ 1.7 million or 48 % . the increase in costs was primarily due to an increase of $ 2.8 million in compensation expense ( including an increase of $ 1.6 million in stock compensation expense ) resulting from the hiring of our chief executive officer in october 2015 and our chief financial officer in february 2016 , severance payments totaling approximately $ 208,000 to three employees in connection with moving our headquarters to california in 2016 , our commencement of compensation in both cash and equity of our non-employee directors after the ipo , payment of an ipo incentive bonus to our chief executive officer in the amount of $ 250,000 , accrual of approximately $ 429,000 in bonus expense in 2016 and approximately $ 1.4 million of equity compensation expense resulting from awards of restricted stock to certain directors and officers upon completion of the ipo . these increases were offset in part by a $ 1.5 million decrease in professional fees , reflecting a charge of approximately $ 1.0 million to general and administrative expense for the fair value of a warrant issued for strategic consulting services in 2015 , as well as the move of our former chief executive officer to the role of executive vice president of strategic business development and a $ 249,000 decrease in legal and accounting expense related to our recapitalization in 2015 whereas in 2016 the legal and accounting expenses related to our ipo were capitalized and offset against additional paid-in capital upon closing the offering . we anticipate that general and administrative expense in 2017 will increase from the 2016 level . selling and marketing expense . selling and marketing expenses consist primarily of salary and benefits for our sales and marketing personnel and business development consulting services . selling and marketing expenses for the years ended december 31 , 2016 and 2015 were approximately $ 901,000 and $ 36,000 , respectively . the increase of approximately $ 865,000 was primarily due to our former chief executive officer moving to the role of executive vice president of business development effective january 1 , 2016. of this $ 865,000 increase , approximately $ 418,000 consisted of increased stock compensation expense , primarily reflecting the grant of restricted stock to our executive vice president of business development as part of our ipo bonus and approximately $ 336,000 consisted of increased payroll expense resulting from the move of this executive from the role of ceo . due to increased engagement with potential customers , we expect selling and marketing expense in 2017 to increase from 2016 . 18 interest income and expense . interest income and interest expense for the periods indicated , consisted of the following ( in thousands ) : replace_table_token_3_th interest expense consists of interest accrued on our secured notes and the fair value of a warrant issued to the placement agent for our offering of the secured notes . we made no interest payments in the periods presented . the increase in interest expense in the year ended december 31 , 2016 compared to the year ended december 31 , 2015 was due to our issuance of approximately $ 5.96 million in principal amount of secured notes on april 1 , 2016. the warrant we issued to the placement agent in our offering of secured notes provided that the number of shares issuable upon exercise of the warrant would be adjusted and the exercise price of that warrant would be adjusted to equal the conversion price

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources as of december 2016 , we had total assets of approximately $ 26.9 million and a working capital of approximately $ 25.8 million . on august 10 , 2016 we consummated our ipo of 3,680,000 shares of common stock through which we raised net proceeds of approximately $ 24.7 million . in connection with the completion of the ipo , our secured notes were converted into 6,264,659 shares of common stock , thus extinguishing the debt associated with the secured notes . cash flows from operating , investing and financing activities : we believe that our available working capital is sufficient to fund our presently forecasted working capital requirements for , at least , the next 12 months following the date of the filing of this report , including securing one or more foundries , idms or fabless semiconductor manufacturers to qualify and license our mst ® technology and start full-scale industrial production of a device that incorporates our mst® technology . however , the semiconductor industry is generally slow to adopt new manufacturing process technologies and conducts long testing and qualification processes which we have limited ability to control . accordingly , we may require additional capital in order to get to full-scale industrial production of a device that incorporates our mst ® .

we are aggressively pursuing the profitable expansion opportunities that exist outside the us , including disciplined growth and scale in our more mature markets , and faster expansion in key emerging markets like china . our global consumer products group ( “cpg” ) represents another important profitable growth opportunity for us . during the second quarter , we successfully transitioned our packaged coffee and tea businesses to an in-house direct model , away from the previous distribution arrangement . this model now gives us total control over the sell-in and distribution to retailers of these products . we also aggressively pursued the opportunities beyond our more 22 traditional store experience to offer consumers new coffee and other products in multiple forms , across new categories , and through diverse channels , leveraging our strong brand and established retail store base . examples include the ongoing global expansion of our successful starbucks via ® ready brew product and starbucks- and tazo-branded k-cup ® portion packs which were added to the lineup at the start of fiscal 2012. cpg contributed 7 % of total net revenues in fiscal 2011. looking toward the future , we recently announced a reorganization of our leadership structure that took effect at the beginning of fiscal 2012. the new structure will enable us to accelerate our global , multi-brand , multi-channel strategy , and to leverage the talent , experience and expertise resident in our senior leadership team . in this new structure , one president will oversee all operations within each of three distinct regions with responsibility for the performance of company-operated stores , as well as for working with licensed and joint-venture business partners in each market within their respective region . the region president will also be responsible for working with starbucks global consumer products and foodservice teams to further develop those businesses and execute against our growth plan within the region . the three new regions will be 1 ) americas , inclusive of the us , canada , and latin america , 2 ) china and asia pacific , and 3 ) europe , middle east , and africa , collectively referred to as the emea region . fiscal 2012 — the view ahead for fiscal year 2012 , we expect moderate revenue growth driven by mid single-digit increased comparable store sales , new store openings and strong growth in the cpg business . licensed stores will comprise between one-half and two-thirds of new store openings in the americas , emea and china and asia pacific regions . we expect modest consolidated operating margin and eps improvement compared to fiscal 2011 , given our current revenue expectations , along with ongoing spend related to our expanding cpg in-house direct distribution model and higher commodity costs . we expect increased capital expenditures in fiscal 2012 compared to fiscal 2011 , reflecting additional investments in store renovations and in manufacturing capacity . operating segment overview through the end of fiscal 2011 , starbucks had three reportable operating segments : us , international , and cpg . our seattle 's best coffee operating segment is reported in “other , ” along with our digital ventures business and unallocated corporate expenses that pertain to corporate administrative functions that support our operating segments but are not specifically attributable to or managed by any segment and are not included in the reported financial results of the operating segments . the us and international segments both include company-operated stores and licensed retail stores . licensed stores generally have a higher operating margin than company-operated stores . under the licensed model , starbucks receives a reduced share of the total store revenues , but this is more than offset by the reduction in its share of costs as these are primarily borne by the licensee . the international segment has a higher relative share of licensed stores versus company-operated stores compared to the us segment ; however , the us segment has been operating significantly longer than the international segment and has developed deeper awareness of , and attachment to , the starbucks brand and stores among its customer base . as a result , the more mature us segment has significantly more stores , and higher total revenues than the international segment . average sales per store are also higher in the us due to various factors including length of time in market and local income levels . further , certain market costs , particularly occupancy costs , are lower in the us segment compared to the average for the international segment , which comprise a more diverse group of operations . as a result of the relative strength of the brand in the us segment , the number of stores , the higher unit volumes , and the lower market costs , the us segment , despite its higher relative percentage of company-operated stores , has a higher operating margin than the less-developed international segment . starbucks international store base continues to expand and we continue to focus on achieving sustainable growth from established international markets while at the same time investing in emerging markets , such as china . newer 23 international markets require a more extensive support organization , relative to the current levels of revenue and operating income . the cpg and seattle 's best coffee segments include packaged coffee and tea and other branded products operations worldwide , as well as the us foodservice business . in prior years through the first several months of fiscal 2011 , we sold a selection of starbucks and seattle 's best coffee branded packaged coffees and tazo ® teas in grocery and warehouse club stores throughout the us and to grocery stores in canada , the uk and other european countries through a distribution arrangement with kraft foods global , inc. kraft managed the distribution , marketing , advertising and promotion of these products as a part of that arrangement . story_separator_special_tag the increase in comparable store sales was due to a 5 % increase in transactions ( contributing approximately $ 78 million ) , and a 1 % increase in average value per transaction ( contributing approximately $ 21 million ) . cost of sales including occupancy costs as a percentage of total revenues decreased by 310 basis points compared to the prior year . the decrease was primarily driven by lower costs for food and beverage components resulting from supply chain efficiencies ( approximately 120 basis points ) . also contributing to the decrease were lower occupancy costs as a percentage of total net revenues ( approximately 120 basis points ) primarily due to sales leverage . store operating expenses as a percent of related retail revenues decreased 70 basis points primarily due to reduced impairments in fiscal 2010 compared to fiscal 2009. restructuring charges include lease exit and related costs associated with the actions to rationalize our global store portfolio . restructuring charges in fiscal 2010 decreased slightly from 2009 due to the completion of our restructuring efforts internationally by the end of fiscal 2010 . 32 global consumer products group replace_table_token_21_th cpg net revenues increased primarily due to the launch of starbucks via ® ready brew ( approximately $ 22 million ) and the extra week in fiscal 2010 ( approximately $ 16 million ) . operating margin decreased 480 basis points over the prior year due primarily to increased starbucks via ® ready brew launch expenses . other replace_table_token_22_th substantially all of net revenues in other are generated from the seattle 's best coffee operating segment . the increase in revenues for seattle 's best coffee was primarily due to sales to new national accounts ( contributing approximately $ 13 million ) . operating expenses included in other relate to seattle 's best coffee and digital ventures as well as expenses pertaining to corporate administrative functions that support our operating segments but are not specifically attributable to or managed by any segment and are not included in the reported financial results of the operating segments . total operating expenses increased $ 40.5 million primarily as a result of increased general and administrative expenses ( $ 80 million ) primarily due to higher performance-based compensation in 2010. this increase was partially offset by a decrease of $ 58 million in restructuring charges due to the completion of our restructuring activities within the non-store support organization . 33 summarized quarterly financial information ( unaudited ; in millions , except eps ) replace_table_token_23_th ( 1 ) includes pretax restructuring charges of $ 18.3 million , $ 7.9 million , $ 20.4 million and $ 6.4 million for the first , second , third and fourth fiscal quarters respectively . financial condition , liquidity and capital resources investment overview starbucks cash and short-term investments were $ 2.1 billion and $ 1.4 billion and as of october 2 , 2011 and october 3 , 2010 , respectively . as of october 2 , 2011 , approximately $ 367.5 million of cash was held in foreign subsidiaries . of our cash held in foreign subsidiaries , $ 69.5 million is denominated in the us dollar . we actively manage our cash and short-term investments in order to internally fund operating needs domestically and internationally , make scheduled interest and principal payments on our borrowings , and return cash to shareholders through common stock cash dividend payments and share repurchases . our short-term investments consisted predominantly of us treasury securities , commercial paper , corporate bonds , and us agency securities . also included in our short-term investment portfolio are certificates of deposit placed through an account registry service ( “cdars” ) , with maturities ranging from 91 days to one year , which we began investing into during the fourth quarter of fiscal year 2011. the principal amounts of the individual certificates of deposit do not exceed the federal deposit insurance corporation limits . our portfolio of long-term available for sale securities consists predominantly of high investment-grade corporate bonds , diversified among industries and individual issuers , as well as certificates of deposits placed through cdars with maturities greater than 1 year . we also have investments in auction rate securities ( “ars” ) , all of which are classified as long-term . ars totaling $ 28 million and $ 41 million were outstanding as of october 2 , 2011 and october 3 , 2010 , respectively . the reduction in ars was due to $ 16 million in redemptions during the fiscal year , with all redemptions done at par . while the ongoing auction failures will limit the liquidity of these ars investments for some period of time , we do not believe this will materially impact our ability to fund our working capital needs , capital expenditures , shareholder dividends or other business requirements . borrowing capacity starbucks previous $ 1 billion unsecured credit facility ( the “2005 credit facility” ) was available through november of 2010 , when we replaced the 2005 credit facility with a new $ 500 million unsecured credit facility ( the “2010 credit facility” ) with various banks , of which $ 100 million may be used for issuances of letters of credit . the 2010 credit facility is available for working capital , capital expenditures and other corporate purposes , including acquisitions and share repurchases and is currently set to mature in november 2014. starbucks has the option , subject to negotiation and agreement with the related banks , to increase the maximum commitment amount by an additional $ 500 million . the interest rate for any borrowings under the credit facility , based on starbucks current ratings and fixed charge coverage ratio , is 1.075 % over libor . the specific spread over libor will depend upon 34 our long-term credit ratings assigned by moody 's and standard & poor 's rating agencies and our fixed charge coverage ratio . as with the

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

use of cash we expect to use our cash and short-term investments , including any potential future borrowings under the credit facility and commercial paper program , to invest in our core businesses , including new product innovations and related marketing support , as well as other new business opportunities related to our core businesses . we believe that future cash flows generated from operations and existing cash and short-term investments both domestically and internationally will be sufficient to finance capital requirements for our core businesses in those respective markets as well as shareholder distributions for the foreseeable future . however , in the event that we need to repatriate all or a portion of our international cash to the us we would be subject to additional us income taxes . we may use our available cash resources to make proportionate capital contributions to our equity method and cost method investees . we may also seek strategic acquisitions to leverage existing capabilities and further build our business in support of our growth agenda . acquisitions may include increasing our ownership interests in our equity method and cost method investees . any decisions to increase such ownership interests will be driven by valuation and fit with our ownership strategy . significant new joint ventures , acquisitions and or other new business opportunities may require additional outside funding . other than normal operating expenses , cash requirements for fiscal 2012 are expected to consist primarily of capital expenditures for remodeling and refurbishment of , and equipment upgrades for , existing company-operated stores ; systems and technology investments in the stores and in the support infrastructure ; new company-operated stores ; and additional investments in manufacturing capacity .

we are currently working to integrate the zenprise products for mdm with our citrix cloudgateway product for managing mobile apps and data to offer our enterprise it customers comprehensive products that make it easier to manage and secure devices , apps and data , while allowing users to embrace mobile workstyles and access enterprise apps from virtually any device . we believe our mobility products will offer a comprehensive approach that can transform organizations into mobile enterprises with the security and control it requires , the ease of use and flexibility users desire , and the productivity business demands . our cloud networking products power mobile workstyles while altering the traditional economics of the datacenter by providing greater levels of flexibility of computing resources , especially with respect to servers , improving application performance and thereby reducing the amount of processing power involved , and allowing easy reconfiguration of servers by permitting storage and network infrastructure to be added-in virtually rather than physically . our cloud networking products are also enhancing our differentiation and driving customer interest around desktop virtualization as enterprises are finding good leverage in deploying these technologies together . in july 2012 , we acquired bytemobile , inc. , or bytemobile , a privately held leading provider of data and video optimization solutions for mobile network operators . the bytemobile acquisition has given us a strategic foothold in the core infrastructure of certain mobile operators which are experiencing rapid growth in network traffic , driven by the combination of new consumer devices , rich multimedia content , and high speed 3g , 4g and lte networks . our bytemobile smart capacity products combined with our citrix netscaler line of cloud networking products enhance our broader strategy of powering mobile workstyles and cloud services and allow us to offer mobile operators combined solutions that deliver a high quality user experience to mobile subscribers . our cloud platform products allow our customers to build scalable and reliable private and public cloud computing environments where customers can quickly and easily build cloud services within their existing infrastructure and provision hosted applications , desktops , services and infrastructure as a service , or iaas , from the cloud . online services division our online services division is focused on developing and marketing collaboration and data products . these products are primarily marketed via the web to large enterprises , medium and small businesses , prosumers and individuals . our online services division 's collaboration products offer secure and cost-effective solutions that allow users to host and actively participate in online meetings , webinars and training sessions remotely and reduce costs associated with business travel . in addition , we offer products that offer users a secure , simple and cost efficient way to access their desktops remotely and support over the internet on-demand . in the second quarter of 2012 , we acquired podio aps , or podio , a privately held provider of a cloud-based collaborative work platform . podio became part of our online services division and is a natural extension of our collaboration business , providing today 's mobile workforce an easy , secure and social way to come together and work as teams . our d ata sharing product , sharefile , makes it easy for businesses of all sizes to securely store , sync and share business documents and files , both inside and outside the company . sharefile 's centralized cloud storage capability also allows users to share files across multiple devices and access them from any location . reclassifications during the first quarter of 2012 , we performed a review of the presentation of certain of our revenue categories and adopted a revised presentation , which we believe is more comparable to those presented by other companies in our industry and better reflects our evolving product and service offerings . as a result , technical support , hardware maintenance and software updates revenues , which were previously presented in technical services and license updates are classified together as license updates and maintenance . a corresponding change was made to rename cost of services revenues to cost of services and maintenance revenues ; however , there was no change in classification . product training and certification and consulting services , which were previously presented in technical services , are classified together as professional services . product licenses has been renamed to product and licenses to more appropriately describe its composition of both software and hardware , however , there was no change in classification . the composition and classification of software as a service remained unchanged . this change in presentation will not affect our total net revenues , total cost of net revenues or gross margin . additionally , during the first quarter of 2012 , we revised our methodology for allocating certain it support costs to more closely align these costs to the employees directly utilizing the related assets and services and to reflect how management assesses the cost of headcount . as a result , certain it support costs have been reclassified from general and administrative expenses to cost of services and maintenance revenues , research and development expenses and sales , marketing and services expenses based on the headcount in each of these functional areas . this change in presentation will not affect our income from operations or cash flows . 32 conforming changes have been made for all prior periods presented . see note 2 to our consolidated financial statements for more information regarding the reclassifications described above . summary of results for the year ended december 31 , 2012 compared to the year ended december 31 , 2011 , we delivered the following financial performance : product and license revenue increased 11.6 % to $ 830.6 million ; software as a service revenue increased 18.9 % to $ 511.3 million ; license updates and maintenance revenue increased 19.7 % to $ 1,125.1 million ; professional services revenue increased 30.1 story_separator_special_tag we primarily sell our software products via electronic or paper licenses and typically require a purchase order from the distributor , reseller or end-user ( depending on the arrangement ) who have previously negotiated a master distribution or resale agreement and an executed product license agreement from the end-user . for appliance sales , our customary practice is to require a purchase order from distributors and resellers who have previously negotiated a master packaged product distribution or resale agreement . we typically recognize revenue upon shipment for our appliance sales . for maintenance , technical support , product training and consulting services , we require a purchase order and an executed agreement . for saas , we generally require the customer or the reseller to electronically accept the terms of an online services agreement or execute a contract . delivery has occurred and we have no remaining obligations . we consider delivery of licenses under electronic licensing agreements to have occurred when the related products are shipped and the end-user has been electronically provided the software activation keys that allow the end-user to take immediate possession of the product . for hardware appliance sales , our standard delivery method is free-on-board shipping point . consequently , we consider delivery of appliances to have occurred when the products are shipped pursuant to an agreement and purchase order . for saas , delivery occurs upon providing the users with their login id and password . for product training and consulting services , we fulfill our obligation when the services are performed . for license updates , maintenance and technical support , we assume that our obligation is satisfied ratably over the respective terms of the agreements , which are typically 12 to 24 months . for saas , we assume that our obligation is satisfied ratably over the respective terms of the agreements , which are typically 12 months . the fee is fixed or determinable . in the normal course of business , we do not provide customers with the right to a refund of any portion of their license fees or extended payment terms . the fees are considered fixed or determinable upon establishment of an arrangement that contains the final terms of the sale including description , quantity and price of each product or service purchased . for saas , the fee is considered fixed or determinable if it is not subject to refund or adjustment . collectability is probable . we determine collectability on a customer-by-customer basis and generally do not require collateral . we typically sell product licenses and license updates to distributors or resellers for whom there are histories of successful collection . new customers are typically subject to a credit review process that evaluates their financial position and ultimately their ability to pay . customers are also subject to an ongoing credit review process . 36 if we determine from the outset of an arrangement that collectability is not probable , revenue recognition is deferred until customer payment is received and the other parameters of revenue recognition described above have been achieved . management 's judgment is required in assessing the probability of collection , which is generally based on an evaluation of customer specific information , historical experience and economic market conditions . the majority of our product license revenue consists of revenue from the sale of stand-alone software products . stand-alone software sales generally include a perpetual license to our software and are subject to the industry specific software revenue recognition guidance . in accordance with this guidance , we allocate revenue to license updates related to our stand-alone software and any other undelivered elements of the arrangement based on vsoe of fair value of each element and such amounts are deferred until the applicable delivery criteria and other revenue recognition criteria described above have been met . the balance of the revenues , net of any discounts inherent in the arrangement , is recognized at the outset of the arrangement using the residual method as the product licenses are delivered . if management can not objectively determine the fair value of each undelivered element based on vsoe of fair value , revenue recognition is deferred until all elements are delivered , all services have been performed , or until fair value can be objectively determined . we also make certain judgments to record estimated reductions to revenue for customer programs and incentive offerings including volume-based incentives , at the time sales are recorded . our hardware appliances contain software components that are essential to the overall functionality of the products . for hardware appliance transactions entered into prior to january 1 , 2011 , revenue for arrangements with multiple elements , such as sales of products that included services , was allocated to each element using the residual method based on the vsoe of the fair value of the undelivered items pursuant to authoritative guidance . under the residual method , the amount of revenue allocated to delivered elements equals the total arrangement consideration less the aggregate fair value of any undelivered elements . if vsoe of one or more undelivered items does not exist , revenue from the entire arrangement is deferred and recognized at the earlier of : ( i ) delivery of those elements or ( ii ) when fair value can be established unless maintenance is the only undelivered element , in which case , the entire arrangement fee is recognized ratably over the contractual support period . for hardware appliance transactions entered into subsequent to january 1 , 2011 , the arrangement consideration is allocated to stand-alone software deliverables as a group and the non-software deliverables based on the relative selling prices of using the selling price hierarchy in the amended revenue recognition guidance . the selling price hierarchy for a deliverable is based on its vsoe if available , third-party evidence , or tpe , if vsoe is not available , or estimated selling price if

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources during 2012 , we generated operating cash flows of $ 818.5 million . these operating cash flows related primarily to net income of $ 352.5 million , adjusted for , among other things , non-cash charges , including depreciation and amortization expenses of $ 214.9 million and stock-based compensation expense of $ 149.9 million . also contributing to these cash inflows was an aggregate increase in operating assets and liabilities of $ 180.5 million , net of effects of acquisitions . our investing activities used $ 357.9 million of cash consisting primarily of cash paid for acquisitions of $ 487.2 million , the purchase of property and equipment of $ 123.0 million and $ 34.4 million in cash paid for licensing agreements and product related intangible assets and other investments . these investing cash outflows were partially offset by net sales of investments of $ 258.9 million . our financing activities used cash of $ 149.8 million primarily due to stock repurchases of $ 251.0 million . this financing cash outflow was partially offset by proceeds received from the issuance of common stock under our employee stock-based compensation plans of $ 108.4 million . during 2011 , we generated operating cash flows of $ 679.1 million . these operating cash flows related primarily to net income of $ 355.6 million , adjusted for , among other things , non-cash charges including depreciation and amortization expenses of $ 159.3 million and stock-based compensation expense of $ 92.9 million . also contributing to these cash inflows was an aggregate increase in operating assets and liabilities of $ 73.9 million , net of the effects of acquisitions .

our technology generates secure connections on a “zero-click” or “single-click” basis , significantly simplifying the deployment of secure real-time communication solutions by eliminating the need for end-users to enter any encryption information . our product gabriel secure communication platform , unlike other collaboration and communication products and services on the market today , does not require access to user 's confidential data and minimizes the threat of hacking and data mining . it enables individuals and organizations to maintain complete ownership and control over their personal and confidential data , secured within their own private network , while enabling authorized secure encrypted access from anywhere at any time . our gabriel collaboration suite is a set of applications that run on top of our gabriel secure communication platform . it enables seamless and secure cross-platform communications between user 's devices that have our software installed . our gabriel collaboration suite is available for download and free trial , for android , ios , windows , linux and mac os x platforms , at http : //www.gabrielsecure.com/ . we continue to enhance our products and add new functionality to our products . we will provide updates to new and existing customers as they are released to the general public . we have signed patent license agreements with avaya inc. , aastra usa , inc. , microsoft , mitel networks corporation , nec corporation and nec corporation of america , siemens enterprise communications gmbh & co. kg , and siemens enterprise communications inc. to license certain of our patents , for a one-time payment and or an ongoing royalty for all future sales through the expiration of the licensed patents with respect to certain current 26 and future ip-encrypted products . we have engaged ipvalue management inc. to assist us in commercializing our portfolio of patents on securing real-time communications over the internet . under the multi-year agreement , ipvalue will originate and assist us with negotiating transactions related to patent licensing worldwide with respect to certain third parties . our employees include the core development team behind our patent portfolio , technology and software . this team has worked together for over ten years and is the same team that invented and developed this technology while working at leidos , is a fortune 500® scientific , engineering and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world , in national security , energy and the environment , critical infrastructure and health . the team has continued its research and development work started at leidos , and expanded the set of patents we acquired in 2006 from leidos , into a larger portfolio with over 100 u.s. and international patents with over 75 pending applications . this portfolio now serves as the foundation of our licensing business and planned service offerings and is expected to generate the majority of our future revenue in license fees and royalties . we intend to continue our research and development efforts to further strengthen and expand our patent portfolio . see – operations – research and development expenses for a description of our research and development expenses for the past three fiscal years discussed below . we intend to continue using an outsourced and leveraged model to maintain efficiency and manage costs as we grow our licensing business by , for example , offering incentives to early licensing targets or asserting our rights for use of our patents . we also intend to expand our design pilot in participation with leading 4g/lte companies ( domain infrastructure providers , chipset manufacturers , service providers , and others ) and build our secure domain name registry . developments in the year ended december 31 , 2015 litigation we have one intellectual property infringement lawsuit pending against apple , inc. in the united states district court for the eastern district of texas , tyler division , pursuant to which we allege that this party infringes on certain of our patents . we seek damages and injunctive relief in all the complaints . virnetx inc. v. apple , inc. ( case 6:12-cv-00855-led ) – consolidated lead case on march 30 , 2015 , the united states court for the eastern district of texas , tyler division , issued an order finding substantial overlap between the remanded portions of the civil action case 6:10-cv-00417-led ( virnetx vs. cisco et . al . ) , and the ongoing civil action case 6:12-cv-00855-led ( virnetx inc. v. apple , inc. ) . the court consolidated the two civil actions under civil action case 6:12-cv-00855-led ( virnetx inc. v. apple , inc. ) and designated it as the lead case . the jury trial in this case was held on january 25 , 2016. on february 4 , 2016 , a jury in the united states court for the eastern district of texas , tyler division , awarded us $ 625.6 million in a verdict against apple corporation for infringing four of our us patents , marking it the second time a federal jury has found apple liable for infringing virnetx 's patented technology . the verdict includes royalties awarded to us based on an earlier patent infringement finding ( case 6:10-cv-00417-led ) against apple . the jury found that apple 's modified vpn on-demand , imessage and facetime services infringed virnetx 's patents and that apple 's infringement was willful . in addition to determining the royalty owed by apple for its prior infringement , this verdict also includes an award based on the jury 's finding that apple 's modified vpn on demand , imessage and facetime services have continued to infringe virnetx 's patents . in its order , issued on february 16 , 2016 , the court has set all post-trial motions for hearing on may 25 , 2016 at 10:00 a.m. in the united states court for the eastern district of texas , texarkana division . story_separator_special_tag in each of these cases , since delivery has occurred , we record the consideration as revenue when we have obtained a signed agreement , identified a fixed or determinable price , and determined that collectability is reasonably assured . current royalty payments : ongoing royalty payments cover a licensee 's obligations to us related to its sales of covered products in the current contractual reporting period . licensees that owe these current royalty payments are obligated to provide us with quarterly or semi-annual royalty reports that summarize their sales of covered products and their related royalty obligations to us . we expect to receive these royalty reports subsequent to the period in which our licensees ' underlying sales occurred . as a result , it is impractical for us to recognize revenue in the period in which the underlying sales occur , and , in most cases , we will recognize revenue in the period in which the royalty report is received and other revenue recognition criteria are met due to the fact that without royalty reports from our licensees , our visibility into our licensees ' sales is limited . non-refundable up-front fees and minimum fee contracts : for licenses that provide for non-refundable up-front or fixed minimum fees over their term , for which we have no future obligations or performance requirements , revenue is generally recognized over the license term . for licenses that provide for fees that are not fixed or determinable , including licenses that provide for extended payment terms and or payment of a significant portion of the fee after expiration of the license or more than 12 months after delivery , the fees are generally presumed not to be fixed or determinable , and revenue is deferred and recognized as earned , but not in advance of collection . non-royalty elements : elements that are not related to royalty revenue in nature , such as settlement fees , expense reimbursement , and damages , if any , are recorded as gain from settlement which is reflected as a separate line item within the operating expenses section in the consolidated statements of operations . deferred revenue in august 2013 we began receiving annual payments on a contract that requires payment to us over 4 years of $ 10,000 ( “august 2013 contract settlement” ) . from the inception of that license to december 31 , 2015 , we received cash totaling $ 7,500 , all of which is non-refundable . we recognized $ 1,500 , $ 1,167 and $ 1,833 of revenue related to the august 2013 contract settlement during the years ended december 31 , 2015 , 2014 and 2013 respectively . activity under the august 2013 contract settlement was as follows ( in thousands ) : replace_table_token_4_th royalty expense royalty expense for the years ended december 31 , 2015 , 2014 and 2013 was $ 5,265 , $ 6,100 and zero respectively , and was a result of our royalty agreement with leidos . there was no expense for the year ended december 31 , 2013. the agreement provides for revenue sharing and legal reimbursements related to attorney time and expenses incurred by leidos during discovery and other aspects of litigation matters that have been resolved . earnings per share basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of outstanding common shares during the period . diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued . during the years ended 2015 , 2014 and 2013 we incurred losses . therefore , the effect of any common stock equivalent is anti-dilutive during those periods . 31 concentration of credit risk and other risks and uncertainties our cash and cash equivalents are primarily maintained at two major financial institutions in the united states . a portion of those balances are insured by the federal deposit insurance corporation . during the year ended december 31 , 2015 , and 2014 we had , at times , funds which were uninsured . we do not believe that we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships with major financial institutions . we have not experienced any losses on our deposits of cash and cash equivalents . derivative instruments our series i warrants contained an anti-dilution provision which prevented them from being considered indexed to our stock . as a result , the warrants were required to be accounted for as derivative instruments . the remaining balance of series 1 warrants expired during the year ended december 31 , 2015. we recognize derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value . we record changes in the fair value ( i.e . , gains or losses ) of the derivatives in the accompanying consolidated statements of operations . impairment of long-lived assets we identify and record impairment losses on long-lived assets used in operations when events and changes in circumstances indicate that the carrying amount of an asset might not be recoverable , but not less than annually . recoverability is measured by comparison of the anticipated future net undiscounted cash flows to the related assets ' carrying value . if such assets are considered to be impaired , the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset . income taxes we account for income taxes using the asset and liability method . the asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax basis and financial

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources for the year ended december 31 , 2015 , our cash and cash equivalents totaled $ 8,726 and our short-term investments totaled $ 9,954 compared to $ 18,658 and $ 22,571 , respectively , for the year ended december 31 , 2014 and $ 19,173 and $ 19,815 respectively , as of december 31 , 2013. we expect that our cash and cash equivalents and short-term investments as of december 31 , 2015 will be sufficient to fund our current operations and provide working capital for general corporate purposes and legal expenses for the foreseeable future . we may undertake additional opportunities to seek to grow our business and as a result , we may seek to raise capital in some form within the next twelve months including the actions described below under “universal shelf registration and atm offering” . over the long term , we expect to derive the majority of our revenue from license fees and royalties associated with our patent portfolio , technology , software and secure domain name registry in the united states and other markets around the world . universal shelf registration and atm offering on august 21 , 2015 we filed a universal shelf registrationstatement with the u.s. securities and exchange commission enabling us to offer and sell from time to time up to $ 100 million of equity , debt or other types of securities .

we have a 19 strong focus on cost control and closely monitor market changes and our liquidity in order to proactively adjust our operating costs , discretionary capital spending , and dividend levels as needed . managing working capital in conjunction with fluctuating demand levels is likewise key . in addition , a long-standing component of our profit sharing incentive bonus plan is that it is linked to our worldwide and business unit performance which is designed to adjust compensation expense as profits change . we continue to maintain a strong balance sheet . our short-term liquidity available , represented as cash and cash equivalents plus the unused amount of our credit facility , was $ 63.7 million at june 30 , 2015 . in addition to the above discussion , management currently considers the following events , trends , and uncertainties to be most important to understanding our financial condition and operating performance : successful execution of the company 's restructuring plan is critical to the company 's future performance . the success of the restructuring initiatives is dependent on accomplishing the plan in a timely and effective manner . a critical component of the restructuring initiatives is the transfer of production among facilities which will result in some manufacturing inefficiencies and excess working capital during the transition period . the company 's restructuring plan is discussed below . we continue to focus on mitigating the impact of raw material commodity pricing pressures . due to the contract and project nature of the furniture markets , fluctuation in the demand for our products and variation in the gross margin on those projects is inherent to our business . effective management of our manufacturing capacity is and will continue to be critical to our success . see below for further details regarding current sales and open order trends . while both the hospitality and office furniture markets are expanding , we continue to see volatility in order rates which in turn can impact our operating results . globalization continues to reshape not only the markets in which we operate but also our key customers and competitors . in addition , demand is increasing for hospitality furniture manufactured in the u.s. , and we are shifting focus of underutilized manufacturing capacity to fill this need . employees throughout our business operations are an integral part of our ability to compete successfully , and the stability of the management team is critical to long-term share owner value . our career development and succession planning processes help to maintain stability in management . spin-off of kimball electronics reported as discontinued operations on october 31 , 2014 ( “ distribution date ” ) , we completed the previously announced spin-off of our electronic manufacturing services ( “ ems ” ) segment by distributing the related shares of kimball electronics , inc. ( “ kimball electronics ” ) , on a pro rata basis , to the company 's share owners of record as of october 22 , 2014 ( the “ record date ” ) . on the distribution date , each of the company 's share owners received three shares of kimball electronics for every four shares of the company held by such share owner on the record date . after the distribution date , the company does not beneficially own any kimball electronics shares and kimball electronics is an independent publicly traded company . in connection with the spin-off of kimball electronics , the company and kimball electronics entered into several agreements covering administrative and tax matters to provide or obtain services on a transitional basis , as needed , for varying periods after the spin-off . the administrative agreements cover various services such as information technology , human resources , taxation , and finance . the company expects all services to be substantially complete within one year after the spin-off . the company distributed $ 63 million of cash to kimball electronics , including the cash held by its foreign facilities , as kimball electronics began operation as an independent company . the cash distribution occurred in several installments immediately preceding the october 31 , 2014 spin-off date or shortly thereafter . the ems business was reclassified to discontinued operations for all periods presented . financial results of the discontinued operations were as follows : replace_table_token_7_th 20 fiscal year 2015 results of operations the following discussion of operating results is based on income from continuing operations and therefore excludes all income statement activity of the discontinued operations . replace_table_token_8_th replace_table_token_9_th fiscal year 2015 net sales were $ 600.9 million compared to fiscal year 2014 net sales of $ 543.8 million , or a 10.5 % increase . increased sales within the commercial , hospitality , government , and healthcare vertical markets more than offset lower sales within the finance and education vertical markets . increased volume and to a lesser extent the positive impact of price increases drove the net sales increase . our hospitality vertical market sales improved over the prior year on strength in sales of both custom and non-custom hospitality furniture . the sales increase in our commercial vertical market was broad based as business conditions remain strong in both day-to-day and project business fueled in part by new product and marketing initiatives . the government vertical market continued to show momentum as government sales steadily recover from recession levels . the sales decline in the finance vertical market was due in part to the trend toward smaller footprint offices and lower cost products being selected . vertical market sales levels can fluctuate depending on the mix of projects in a given year . in fiscal year 2015 we recorded income from continuing operations of $ 11.1 million , or $ 0.29 per class b diluted share , inclusive of $ 3.2 million , or $ 0.08 story_separator_special_tag the timing of severance plan payments is estimated based on the average remaining service life of employees . the fiscal year 2016 amount includes $ 0.7 million for severance payments recorded as a current liability . the timing of warranty payments is estimated based on historical data . the fiscal year 2016 amount includes $ 0.8 million for short-term warranty payments recorded as a current liability . ( d ) excludes $ 3.5 million of long-term unrecognized tax benefits and associated accrued interest and penalties along with deferred tax liabilities and miscellaneous other long-term tax liabilities which are not tied to a contractual obligation and for which the company can not make a reasonably reliable estimate of the period of future payments . ( e ) refer to note 5 - commitments and contingent liabilities of notes to consolidated financial statements for more information regarding operating leases and certain other long-term liabilities . ( f ) purchase obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms . the amounts listed above for purchase obligations include contractual commitments for items such as raw materials , supplies , capital expenditures , services , and software acquisitions/license commitments . cancellable purchase obligations that we intend to fulfill are also included in the purchase obligations amount listed above through fiscal year 2020. off-balance sheet arrangements we have no off-balance sheet arrangements other than standby letters of credit and operating leases entered into in the normal course of business . these arrangements do not have a material current effect and are not reasonably likely to have a material future effect on our financial condition , results of operations , liquidity , capital expenditures , or capital resources . see note 5 - commitments and contingent liabilities of notes to consolidated financial statements for more information on standby letters of credit . we do not have material exposures to trading activities of non-exchange traded contracts . 27 critical accounting policies kimball 's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the united states of america . these principles require the use of estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and related notes . actual results could differ from these estimates and assumptions . management uses its best judgment in the assumptions used to value these estimates , which are based on current facts and circumstances , prior experience , and other assumptions that are believed to be reasonable . management believes the following critical accounting policies reflect the more significant judgments and estimates used in preparation of our consolidated financial statements and are the policies that are most critical in the portrayal of our financial position and results of operations . management has discussed these critical accounting policies and estimates with the audit committee of the company 's board of directors and with the company 's independent registered public accounting firm . revenue recognition - we recognize revenue when persuasive evidence of an arrangement exists , delivery has occurred , the sales price is fixed or determinable , and collectability is reasonably assured . delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract . title and risk of loss are transferred upon shipment to or receipt at our customers ' locations , or in limited circumstances , as determined by other specific sales terms of the transaction . shipping and handling fees billed to customers are recorded as sales while the related shipping and handling costs are included in cost of goods sold . we recognize sales net of applicable sales tax . sales returns and allowances - based on estimated product returns and price concessions , a reserve for returns and allowances is recorded at the time of the sales , resulting in a reduction of revenue . these estimates may change over time causing the provisions to be adjusted accordingly . at june 30 , 2015 and june 30 , 2014 , the reserve for returns and allowances was $ 0.8 million and $ 1.3 million ( inclusive of kimball electronics ) , respectively . the returns and allowances reserve approximated 1 % to 2 % of gross trade receivables during fiscal years 2015 and 2014. allowance for doubtful accounts - our estimate for the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging , credit worthiness , payment history , and historical bad debt experience . management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable . the allowance for doubtful accounts at june 30 , 2015 and june 30 , 2014 was $ 1.0 million and $ 1.8 million ( inclusive of kimball electronics ) , respectively . during the two year period preceding june 30 , 2015 , this reserve approximated 1 % of gross trade accounts receivable prior to the spin-off , and approximated 2 % to 4 % of post-spin gross trade accounts receivable . self-insurance reserves - we are self-insured up to certain limits for auto and general liability , workers ' compensation , and certain employee health benefits such as medical , short-term disability , and dental with the related liabilities included in the accompanying financial statements . our policy is to estimate reserves based upon a number of factors including known claims , estimated incurred but not reported claims , and other analyses , which are based on historical information along with certain assumptions about future events . changes in assumptions for such matters as increased medical costs and changes in actual experience could cause these estimates to change and reserve levels to be adjusted accordingly . at june 30 ,

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our june 30 , 2014 balance sheet includes the discontinued operations resulting from the spin-off of kimball electronics while the june 30 , 2015 is post-spin and thus does not include the discontinued operations . likewise the cash flow statement includes kimball electronics activity up to the october 31 , 2014 completion date of the spin-off . our cash and cash equivalents position declined to $ 34.7 million at june 30 , 2015 from $ 136.6 million at june 30 , 2014 , primarily due to the transfer of $ 63.0 million of cash to kimball electronics in conjunction with the spin-off . the remaining decline in cash and cash equivalents was driven by capital expenditures , share repurchases , and dividends as discussed below . working capital at june 30 , 2015 was $ 44.4 million compared to working capital of $ 246.2 million at june 30 , 2014 . the current ratio was 1.4 at june 30 , 2015 and 2.0 at june 30 , 2014 . the change in working capital and current ratio was primarily driven by the spin-off of kimball electronics . kimball 's short-term liquidity available , represented as cash and cash equivalents plus the unused amount of our credit facility , totaled $ 63.7 million at june 30 , 2015 .

our marketed medicines are : orphan business unit ravicti ® ( glycerol phenylbutyrate ) oral liquid procysbi ® ( cysteamine bitartrate ) delayed-release capsules actimmune ® ( interferon gamma-1b ) ; marketed as imukin ® outside the united states , canada and japan buphenyl ® ( sodium phenylbutyrate ) tablets and powder ; marketed as ammonaps ® in certain european countries and japan quinsair ( levofloxacin inhalation solution ) rheumatology business unit krystexxa ® ( pegloticase ) rayos ® ( prednisone ) delayed-release tablets ; marketed as lodotra ® outside the united states primary care business unit pennsaid ® ( diclofenac sodium topical solution ) 2 % w/w , or pennsaid 2 % duexis ® ( ibuprofen/famotidine ) vimovo ® ( naproxen/esomeprazole magnesium ) migergot ® ( ergotamine tartrate & caffeine suppositories ) during the years ended december 31 , 2017 , 2016 and 2015 , we completed the following acquisitions and divestitures : on june 30 , 2017 , we completed our acquisition of certain rights to interferon gamma-1b from boehringer ingelheim international gmbh , or boehringer ingelheim international , in all territories outside of the united states , canada and japan . on june 23 , 2017 , we sold our european subsidiary that owned the marketing rights to procysbi ® ( cysteamine bitartrate ) delayed-release capsules and quinsair ( levofloxacin inhalation solution ) in europe , the middle east and africa , or emea , regions , or the chiesi divestiture , to chiesi farmaceutici s.p.a. , or chiesi . on may 8 , 2017 , we completed our acquisition of river vision development corp. , or river vision , which added the late development-stage rare disease biologic medicine candidate teprotumumab to our research and development pipeline . on october 25 , 2016 , we completed our acquisition of raptor pharmaceutical corp. , or raptor , which added the rare disease medicines procysbi and quinsair to our medicine portfolio . on january 13 , 2016 , we completed our acquisition of crealta holdings llc , or crealta , which added the rare disease medicine krystexxa and the primary care medicine migergot to our medicine portfolio . on may 7 , 2015 , we completed our acquisition of hyperion therapeutics , inc. , or hyperion , which added the rare disease medicines ravicti and buphenyl to our medicine portfolio . the consolidated financial statements presented herein include the results of operations of the acquired hyperion , crealta and raptor businesses from the applicable dates of acquisition . see note 4 of the notes to consolidated financial statements , included in item 15 of this annual report on form 10-k , for further details of our acquisitions and divestitures . 87 strategy our strategy is to continue the transformation of horizon pharma plc into a balanced , diversified , sustainable-growth biopharmaceutical company predominantly focused on rare disease medicines . we are executing on our strategy by accelerating the growth of our rare disease medicine portfolio through differentiated commercial strategies , business development efforts , and the expansion of our pipeline with post-marketing and development-stage programs . we are strongly committed to helping ensure patient access to their medicines and support services , and by investing in the further development of medicines for patients with rare or underserved diseases . orphan business unit the rare disease medicines in our orphan business unit are ravicti , procysbi , actimmune , buphenyl and quinsair . our strategy for ravicti is to drive growth through increased awareness and diagnosis of urea cycle disorders , and to drive conversion from older-generation nitrogen scavengers , such as generic forms of sodium phenylbutyrate , to ravicti , based on the medicine 's differentiated benefits . with respect to procysbi , our strategy is to drive conversion of patients from older-generation immediate-release capsules of cysteamine bitartrate to procysbi , increase the uptake of diagnosed but untreated patients and identify previously undiagnosed patients who are suitable for treatment . our strategy with respect to actimmune includes driving growth by increasing awareness and diagnosis of chronic granulomatous disease and increasing the length and persistence of treatment . with our may 2017 acquisition of river vision , we added the late-stage rare disease biologic medicine candidate teprotumumab to our pipeline . teprotumumab , which successfully completed a phase 2 clinical trial and is currently enrolling patients in a phase 3 confirmatory trial , targets the treatment of moderate-to-severe thyroid eye disease , a debilitating autoimmune condition that presents in patients with graves ' disease . our strategy for teprotumumab is to support its continued clinical development and pursue regulatory approval . the river vision acquisition further demonstrates our commitment to rare disease medicines and expands and diversifies our rare disease medicine pipeline to support sustainable longer-term growth . our phase 3 clinical trial evaluating teprotumumab for the treatment of moderate-to-severe active thyroid eye disease was initiated during the fourth quarter of 2017 , and we anticipate that data from the trial will be available during the second half of 2019. rheumatology business unit the rare disease medicine krystexxa is the primary marketed medicine in our rheumatology business unit . we are focused on optimizing and maximizing the peak sales potential of krystexxa by expanding our commercialization efforts , as well as investing in education , patient and physician outreach , and investigation programs that demonstrate krystexxa as an effective treatment of chronic refractory gout , or , uncontrolled gout , which is refractory ( unresponsive ) to conventional therapies . we believe that krystexxa represents a significant opportunity and potential growth driver for our rheumatology business unit . the rheumatology business unit also includes rayos/lodotra . primary care business unit our strategy for the primary care business unit , which includes pennsaid 2 % , duexis , vimovo and migergot , is to educate physicians about these clinically differentiated medicines and the benefits they offer . story_separator_special_tag during the year ended december 31 , 2017 , we completed the chiesi divestiture for an upfront payment of $ 72.5 million , which reflects $ 3.1 million of cash divested , with additional potential milestone payments based on sales thresholds , and we recorded a gain of $ 6.3 million on the divestiture . foreign exchange loss . during the year ended december 31 , 2017 , we reported a foreign exchange loss of $ 0.3 million . loss on debt extinguishment . during the year ended december 31 , 2017 , we entered into two refinancing amendments for our term loans . we accounted for a portion of the repayments under these refinancing amendments as a debt extinguishment and recorded a loss on debt extinguishment of $ 1.0 million in the consolidated statements of comprehensive loss , which reflected the write-off of the unamortized portion of debt discount and deferred financing costs previously incurred and a one percent prepayment penalty fee . benefit for income taxes . during the year ended december 31 , 2017 , we recorded a benefit for income taxes of $ 102.7 million compared to $ 61.3 million during the year ended december 31 , 2016. the increase in benefit for income taxes during the year ended december 31 , 2017 , compared to year ended december 31 , 2016 , was primarily due to a provisional $ 74.9 million net benefit recorded following the enactment in the united states of h.r . 1 , “ an act to provide for reconciliation pursuant to titles ii and v of the concurrent resolution on the budget for fiscal year 2018 ” , informally titled the tax cuts and jobs act , or the tax act , in december 2017 , which net benefit included a $ 134.2 million tax benefit from the revaluation of our u.s. net deferred tax liability based on the new u.s. federal tax rate of 21 percent , partially offset by the write-off of the $ 59.2 million deferred tax asset related to our u.s. interest expense carryforwards under section 163 ( j ) of the internal revenue code of 1986 , as amended , or the code . additionally , during the year ended december 31 , 2017 , we recorded an increase in pre-tax losses which resulted in an increase in the benefit for income taxes during the year . 93 during the year ended december 31 , 2017 , the first of three tranches of our outstanding performance stock unit awards , or psus , expired without payout as the minimum total compounded annual shareholder rate of return was not achieved . as a result , we wrote off to income tax expense $ 16.4 million of deferred tax assets related to previously recognized share-based compensation . during the years ended december 31 , 2017 , 2016 and 2015 , we recorded share-based compensation expense of $ 49.6 million , $ 48.6 million and $ 37.7 million , respectively , related to these psus . in relation to the remaining outstanding psus , if our share price is lower than $ 32.70 and $ 33.86 for the twenty trading days ending march 22 , 2018 and june 22 , 2018 , respectively , approximately $ 9.3 million and $ 8.4 million , respectively , of deferred tax assets at december 31 , 2017 , related to previously recognized share-based compensation expense will be charged to income tax expense . 94 year ended december 31 , 2016 compared to year ended december 31 , 2015 replace_table_token_12_th net sales . net sales increased $ 224.1 million , or 30 % , to $ 981.1 million during the year ended december 31 , 2016 , from $ 757.0 million during the year ended december 31 , 2015. the following table presents a summary of total net sales attributed to geographic sources for the years ended december 31 , 2016 and 2015 ( in thousands ) : replace_table_token_13_th 95 the following table reflects the components of net sales for the years ended december 31 , 2016 and 2015 ( in thousands ) : replace_table_token_14_th * percentage change is not meaningful . the increase in net sales during the year ended december 31 , 2016 was primarily due to the growth in net sales of pennsaid 2 % , the full-period recognition of ravicti sales in 2016 , compared to a partial period recognition in 2015 following the acquisition of hyperion in may 2015 , the recognition of krystexxa sales following the acquisition of crealta in january 2016 and the recognition of procysbi sales following the acquisition of raptor in october 2016 , offset by the $ 65.0 million litigation settlement with express scripts along with lower net sales of vimovo and duexis . pennsaid 2 % . net sales increased $ 157.4 million , or 107 % , to $ 304.4 million during the year ended december 31 , 2016 , from $ 147.0 million during the year ended december 31 , 2015. net sales increased by approximately $ 87.5 million due to higher net pricing and $ 69.9 million resulting from prescription volume growth . duexis . net sales decreased $ 16.6 million , or 9 % , to $ 173.7 million during the year ended december 31 , 2016 , from $ 190.3 million during the year ended december 31 , 2015. net sales decreased by approximately $ 50.4 million due to lower net pricing resulting from higher co-pay and other patient assistance , offset by an increase of approximately $ 33.8 million resulting from prescription volume growth . ravicti . net sales increased $ 64.7 million , or 74 % , to $ 151.5 million during the year ended december 31 , 2016 , from $ 86.8 million during the year ended december 31 , 2015. net sales increased by approximately $ 55.7 million resulting from prescription volume growth and $ 9.0 million due to higher net pricing .

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

net cash provided by financing activities during the years ended december 31 , 2017 , 2016 and 2015 , net cash provided by financing activities was $ 58.4 million , $ 657.1 million and $ 1,442.5 million , respectively . net cash provided by financing activities during the year ended december 31 , 2017 was primarily attributable to the net proceeds of $ 1,693.5 million from term loans , offset in part by repayment of term loans of $ 1,618.6 million . we refinanced our term loans during march 2017 and october 2017. the march 2017 refinancing loans replaced the $ 394.0 million 2015 term loan facility and the $ 375.0 million 2016 incremental loan facility and the october 2017 refinancing loans replaced the october 2017 refinanced loans . the march 2017 credit agreement resulted in an increase of $ 81.0 million of principal amount of our outstanding debt and the october 2017 refinancing loans did not result in any changes to the principal amount outstanding . additionally , during the year ended december 31 , 2017 , we paid $ 20.0 million relating to milestones in connection with a contingent consideration liability assumed in our acquisition of raptor . net cash provided by financing activities during 2016 was primarily related to $ 364.3 million of net proceeds received from borrowings under our 2016 incremental loan facility and $ 291.9 million of net proceeds received from borrowings under our 2024 senior notes . net cash provided by financing activities during 2015 was primarily attributable to $ 387.2 million of net proceeds received from borrowings under the exchangeable senior notes , $ 391.5 million net proceeds from the 2015 term loan facility , $ 462.3 million net proceeds from the 2023 senior notes and $ 475.7 million of net proceeds from the issuance of 17,652,500 ordinary shares in our 2015 public offering , partially offset by the repayment of the 2014 term loan facility and a partial repayment of the 2015 term loan facility , which resulted in a financing outflow of $ 299.0 million . 107 financial condition as of december 31 , 2017 compared to december 31 , 2016 accounts receivable , net .

partners that : ( a ) generates revenue , and ( b ) requires a lower cost structure compared to traditional pharmaceutical companies , thereby increasing our gross margins . 3. developing and acquiring on-line marketplaces such as supplementhunt.com and primesavingsclub.com that focus on certain market segments such as lower priced , soon to expire supplement business with the supplementhunt.com acquisition and with the select consumer product business through primesavingsclub.com among others in which we sell third party , brand or non-branded products . our products marketed products we currently market and sell over 35 products in the u.s. and more than 10 in multiple countries around the world through our 12 international commercial partners . we have five core products which we define as having more than $ 1.0 million in annual sales or rapidly growing product . the following represents these core products : 1. vesele® 2. urivarx® 3. fluticare® 4. apeaz® 5. diabasens® 6. prostagorx ® 7. sensum ® in addition , we currently expect to launch in the u.s. the following products in 2019 , subject to the applicable regulatory approvals , if required : 1. thermomax® is a hand cream with two strengths that provides up to eight hours of hand warming relief ( second quarter of 2019 ) ; 2. breastlift is a clinically tested cream to provide safe and natural way to firm sagging breasts ( second quarter of 2019 ) ; 3. healthifeet ® is a foot cream that provides foot warming relief ( second quarter of 2019 ) ; 4. mzs sleeping aid with hemp-derived thc-free oil and melatonin is in tincture form ( launched in first quarter of 2019 ) ; 5. trexar is a supplement to provide neuropathy support and enhanced sensation ( second quarter of 2019 ) ; 6. musclin ® is a proprietary supplement made of two fda generally recognized as safe ( gras ) approved ingredients designed to increase muscle mass , endurance and activity ( second half of 2019 ) . the main ingredient in musclin ® is a natural activator of the transient receptor potential cation channel , subfamily v , member 3 ( trpv3 ) channels on muscle fibers responsible to increase fibers width resulting in larger muscles ; 7. regenerum is a proprietary product containing two natural molecules : the first is an activator of the trpv3 channels resulting in the increase of muscle fiber width , and the second targets a different unknown receptor to build the muscle 's capacity for energy production and increases physical endurance , allowing longer and more intense exercise . regenerum is being developed for patients suffering from muscle wasting . we currently expect to launch this product in 2020 pending successful clinical trials in patients with muscle wasting or cachexia ; and 8. octiq is an expected fda ophthalmic otc monograph compliant product for the treatment of eye redness and eye lubrication ( late 2019/early 2020 ) . sales and marketing channels as discussed , we currently have four main sales and marketing channels making up the beyond human ® sales and marketing platform acquired in march 2016 , which has resulted in the significant revenue growth to $ 24.0 million in the year ended december 31 , 2018 compared with $ 8.8 million in the year ended december 31 , 2017. we feel that these channels complement each other to enhance the innovus pharmaceuticals , inc. brand and awareness of our customers and provide us with the ability to use our sales and marketing in the most efficient way possible in acquiring new customers and maintaining those current customers . print and direct mail marketing through our beyond hum an ® sales and marketing platform , we have access to advertise in the vast majority of newspapers and magazines on a regular basis . we have developed our own proprietary algorithm which allows us to target customers looking for specific health products allowing us to increase the return on our investment and reduce the cost to acquire new customers . during 2018 , we were able to expand our reach to canada with the approval of twelve of our products by health canada and successfully expand our beyond human ® sales and marketing platform . e-commerce we have an extensive on-line media channel through our amazon® , newegg® , walmart.com® , ebay® , wish.com , and walgreens.com sites in addition to our own innovuspharma.com site along with sites for each of our products individually . our expertise allows us to successfully drive product sales through proper marketing campaigns through third-party sites as well as through email marketing campaigns to increase traffic to our own sites . additionally , we have recognized that maintaining a proper e-commerce presence allows those customers who read our advertisements in the newspapers and magazine or receive our direct mail another avenue to purchase products . -22- retail/wholesale we are continuously introducing our products to varieties of retail and wholesale partners to enhance the brand and product awareness for our customers . in 2018 , we significantly increased our advertising expenses specifically in the print and direct mail marketing channel which , in turn , has had a direct positive impact to the success of products in retail . we intend to continue to demonstrate to our retail and wholesale partners the advantages of incorporating our products in their stores , especially due to our proprietary consumer targeted marketing approach that our print advertising allows us to achieve . international distribution we continue to work with our exclusive commercial partners outside of the u.s. that would be responsible for sales and marketing in those territories . we evaluate the performance of each of these partners to ensure a steady flow of consumer activity for each of our products . our strategy outside the u.s. is to partner with companies who can effectively market and sell our products in their countries through their direct marketing and sales teams . story_separator_special_tag in connection with the securities exchange agreement , the company issued a total of 40,481 shares of common stock in exchange for the settlement of principal due totaling $ 340,000. the fair value of the shares of common stock issued was based on the market price of our common stock on the date of the securities exchange agreements was determined to be $ 485,000. due to the settlement of the principal balance of $ 340,000 into shares of common stock , the transaction was recorded as a debt extinguishment and the fair value of the shares of common stock issued in excess of the settled principal balance totaling $ 145,000 and the unamortized debt discount as of the date of settlement of $ 3,000 were recorded as a loss on debt extinguishment in the accompanying condensed consolidated statement of operations . on november 30 , 2018 , the company entered into a securities exchange agreement with one of the february and march 2018 5 % notes payable holders . in connection with the securities exchange agreement , the company issued a total of 20,940 shares of common stock in exchange for the settlement of principal due totaling $ 143,000. the fair value of the shares of common stock issued was based on the market price of our common stock on the date of the securities exchange agreements was determined to be $ 231,000. due to the settlement of the principal balance of $ 143,000 into shares of common stock , the transaction was recorded as a debt extinguishment and the fair value of the shares of common stock issued in excess of the settled principal balance totaling $ 88,000 was recorded as a loss on debt extinguishment in the accompanying condensed consolidated statement of operations . july 2018 5 % note payable on july 19 , 2018 , the company entered into a securities purchase agreement with an unrelated third-party investor in which the investor loaned the company gross proceeds of $ 500,000 pursuant to 5 % promissory notes ( “ july 2018 5 % notes payable ” ) . the notes have an oid of $ 50,000 and require payments of $ 550,000 in principal . the notes bear interest at the rate of 5 % per annum and the principal amount and interest are payable at maturity on february 19 , 2019. in connection with the note , the company issued the investor restricted shares of common stock totaling 15,239 shares . the fair value of the restricted shares of common stock issued was based on the market price of our common stock on the date of issuance of the note . the allocation of the proceeds received to the restricted shares of common stock based on their relative fair value and the oid resulted in the company recording a debt discount of $ 226,000. the discount is being amortized to interest expense using the effective interest method over the term of the note . august 2018 notes payable on august 1 , 2018 , the company entered into a securities purchase agreement with two unrelated third-party investors in which the investors loaned the company gross proceeds of $ 1.0 million pursuant to a 0 % promissory note ( “ august 2018 notes payable ” ) . the notes have an oid of $ 200,000 and require twelve payments of $ 100,000 in principal per month through august 2019. the august 2018 notes payable bear no interest per annum . the effective interest rate is 20 % per annum for the notes . in connection with the august 2018 notes payable , we issued the investors restricted shares of common stock totaling 9,524 shares . the fair value of the restricted shares of common stock issued was based on the market price of our common stock on the date of issuance of the august 2018 notes payable . the allocation of the proceeds received to the restricted shares of common stock based on their relative fair value and the oid resulted in us recording a debt discount of $ 435,000. in connection with the financing , we issued 6,086 restricted shares to a third-party consultant . the fair value of the restricted shares of common stock issued of $ 100,000 was recorded as a debt discount to the carrying value of the august 2018 notes payable . the discount is being amortized to interest expense using the effective interest method over the term of the august 2018 notes payable . september 2018 5 % notes payable on september 12 , 2018 , the company entered into a securities purchase agreement with an unrelated third-party investor in which the investor loaned the company gross proceeds of $ 350,000 pursuant to 5 % promissory notes ( “ september 2018 5 % notes payable ” ) . the notes have an oid of $ 40,000 and require payments of $ 390,000 in principal . the notes bear interest at the rate of 5 % per annum and the principal amount and interest are payable in three installments on march 12 , 2019 , june 12 , 2019 and september 12 , 2019 for the note . in connection with the september 2018 5 % notes payable , the company issued the investor restricted shares of common stock totaling 9,524 shares . the fair value of the restricted shares of common stock issued was based on the market price of our common stock on the date of issuance of the september 2018 5 % notes payable . the allocation of the proceeds received to the restricted shares of common stock based on their relative fair value and the oid resulted in us recording a debt discount of $ 130,000. the discount is being amortized to interest expense using the effective interest method over the term of the note . october 2018 5 % notes payable on october 22 , 2018 , the company entered into a securities purchase agreement with an unrelated

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources historically , we have funded losses from operations through the sale of equity and issuance of debt instruments . combined with revenue , these funds have provided us with the capital to operate our business , to sell and support our products , attract and retain key personnel , and add new products to our portfolio . to date , we have experienced net losses each year since our inception . as of december 31 , 2018 , we had an accumulated deficit of $ 43.9 million and a working capital deficit of $ 2.3 million . as of march 29 , 2019 , we had approximately $ 1.7 million in cash and $ 0.6 million held by processors . although no assurances can be given , we currently plan to raise additional capital through the sale of equity or debt securities . we expect , however , that our existing capital resources , the proceeds received from the private placement offering and issuance of notes payable in the first quarter of 2019 totaling $ 2.7 million ( see note 11 in the accompanying consolidated financial statements included elsewhere in this annual report ) , revenue from sales of our products and upcoming new product launches and sales milestone payments from the commercial partners signed for our products , and equity instruments available to pay certain vendors and consultants , will be sufficient to allow us to continue our operations , commence the product development process and launch selected products through at least the next 12 months . in addition , the company 's ceo , who is also a significant shareholder , has deferred the remaining payment of his salary earned through june 30 , 2016 of $ 1.2 million and will continue to defer such compensation if payment would jeopardize the ability of the company to continue its operations .

due to the geographic concentration of our oil and natural gas properties in the williston basin , we believe the primary sources of opportunities , challenges and risks related to our business for both the short and long-term are : commodity prices for oil and natural gas ; transportation capacity ; availability and cost of services ; and availability of qualified personnel . our revenue , profitability and future growth rate depend substantially on factors beyond our control , such as economic , political and regulatory developments as well as competition from other sources of energy . prices for oil and natural gas can fluctuate widely in response to relatively minor changes in the global and regional supply of and demand for oil and natural gas , as well as market uncertainty , economic conditions and a variety of additional factors . since the inception of our oil and natural gas activities , commodity prices have experienced significant fluctuations and may fluctuate widely in the future . as a result of current oil prices , we have increased our planned 2017 capital expenditures as compared to 2016 , excluding acquisitions , and we are continuing to concentrate our drilling activities in certain areas that are the most economic in the williston basin . extended periods of low prices for oil or natural gas could materially and adversely affect our financial position , our results of operations , the quantities of oil and natural gas reserves that we can economically produce and our access to capital . in an effort to improve price realizations from the sale of our oil and natural gas , we manage our commodities marketing activities in-house , which enables us to market and sell our oil and natural gas to a broader array of potential purchasers . we enter into crude oil sales contracts with purchasers who have access to crude oil transportation capacity , utilize derivative financial 52 instruments to manage our commodity price risk and enter into physical delivery contracts to manage our price differentials . due to the availability of other markets and pipeline connections , we do not believe that the loss of any single oil or natural gas customer would have a material adverse effect on our results of operations or cash flows . additionally , we sell a significant amount of our crude oil production through gathering systems connected to multiple pipeline and rail facilities . these gathering systems , which originate at the wellhead , reduce the need to transport barrels by truck from the wellhead . currently , we are flowing approximately 90 % of our gross operated oil production through these gathering systems . please see “ item 1. business—marketing , transportation and major customers . ” our quarterly average net realized oil prices and average price differentials are shown in the tables below . replace_table_token_13_th replace_table_token_14_th replace_table_token_15_th ( 1 ) realized oil prices do not include the effect of derivative contract settlements . ( 2 ) price differential reflects the difference between realized oil prices and wti crude oil index prices . our market optionality on the crude oil gathering systems allows us to shift volumes between pipeline and rail markets in order to optimize price realizations . crude oil produced and sold in the williston basin has historically sold at a discount to wti due to transportation costs and takeaway capacity . in the past , there have been periods when this discount has substantially increased due to oil production in the area increasing to a point that it temporarily surpassed the available pipeline transportation , rail transportation and refining capacity in the area . expansions of both rail and pipeline facilities have reduced the prior constraint on oil transportation out of the williston basin and improved our price differentials received at the lease . in the first quarter of 2014 , our average price differentials relative to wti increased due to the pipeline market weakening as a result of refinery down time and increased u.s. and canadian production . in the second and third quarters of 2014 , stronger pipeline prices shifted more of our barrels towards the pipelines , but rail buyers had to compete with pipeline prices despite weaker brent differentials , resulting in price differentials relative to wti of approximately 9 % to 11 % . in the fourth quarter of 2014 , as wti crude oil prices declined , our price differentials increased as a percentage of wti but remained relatively flat in terms of the dollar per barrel discount to wti in the range of $ 9.00 to $ 10.50 per barrel of oil . in 2015 , our price differentials relative to wti strengthened as new pipelines opened to eastern canada and u.s. markets and transportation on rail gradually declined . in the first quarter of 2015 , as wti further declined , our price differentials continued to increase as a percentage of wti but decreased in terms of the dollar per barrel discount to wti to an average of $ 7.85 per barrel of oil . in the second quarter of 2015 , as wti improved , our price differentials returned to approximately 10 % as a percentage of wti and continued to decrease in terms of the dollar per barrel discount to wti to an average of $ 5.90 per barrel of oil . since the third quarter of 2015 , our price differentials have averaged less than $ 5.00 per barrel discount to wti . we expect differentials to improve as takeaway capacity in the williston basin will increase by over 500,000 barrels of oil per day if the dakota access pipeline is completed and put in service . we believe our large concentrated acreage position provides us with a multi-year inventory of drilling projects and requires forward planning visibility for obtaining services and necessary permits to drill wells . story_separator_special_tag well services operating expenses represent third-party working interest owners ' share of completion service costs , cost of goods sold and operating expenses incurred by ows . the $ 4.8 million decrease for the year ended december 31 , 2016 as compared to the year ended december 31 , 2015 was primarily attributable to the lower well completion activity , partially offset by ows completing opna wells with a higher average third-party working interest in the year ended december 31 , 2016 as compared to december 31 , 2015 . marketing , transportation and gathering expenses . marketing , transportation and gathering expenses increased $ 8.8 million year over year , or a $ 0.47 increase per boe , which was primarily attributable to a $ 10.3 million increase in costs related to bulk purchases coupled with a $ 0.4 million increase in natural gas gathering and processing expenses related to additional well connections on oms infrastructure and the start up of our natural gas processing plant in the third quarter of 2016 , offset by a decrease year over year of $ 1.2 million in the write down of our crude oil inventory to the lower of cost or market value at year-end and a $ 0.8 million decrease in oil transportation costs , primarily driven by lower trucking costs . excluding non-cash valuation adjustments and bulk purchases , our marketing , transportation and gathering expenses on a per boe basis remained relatively consistent at $ 1.60 and $ 1.62 for the years ended december 31 , 2016 and 2015 , respectively . production taxes . our production taxes for the years ended december 31 , 2016 and 2015 were 9.0 % and 9.6 % , respectively , as a percentage of oil and natural gas sales . the production tax rate decreased year over year primarily due to reduced extraction tax rates in north dakota beginning in january 2016. for the years ended december 31 , 2016 and 2015 , the percentage of our total production located in north dakota was approximately 92 % and 88 % , respectively . in 2015 , north dakota had a crude oil tax structure based on a 5 % production tax and a 6.5 % oil extraction tax , resulting in a combined tax rate of 11.5 % of crude oil revenues . in 2016 , the north dakota oil extraction tax was reduced to 5 % , resulting in a combined tax rate of 10 % of crude oil revenues . depreciation , depletion and amortization ( “ dd & a ” ) . dd & a expense decreased $ 9.0 million to $ 476.3 million for the year ended december 31 , 2016 as compared to the year ended december 31 , 2015 . the decrease in dd & a expense for the year ended december 31 , 2016 was primarily due to a decrease in the average dd & a rate to $ 25.84 per boe for the year ended december 31 , 2016 as compared to $ 26.34 per boe for the year ended december 31 , 2015 . the decrease in the dd & a rate was primarily due to lower well costs and higher recoverable reserves . rig termination . we did not early terminate any drilling rig contracts during the year ended december 31 , 2016. as a result of our lowered 2015 capital expenditure program , we elected to early terminate certain drilling rig contracts and recorded a rig termination expense of $ 3.9 million for the year ended december 31 , 2015 . impairment . during the years ended december 31 , 2016 and 2015 , we recorded total impairment charges of $ 4.7 million and $ 46.1 million , respectively . to adjust the carrying value of our properties held for sale to their estimated fair value , determined based on the expected sales price less costs to sell , we recorded impairment charges of $ 3.6 million and $ 9.4 million for the years ended december 31 , 2016 and 2015 , respectively . no other impairment charges of proved oil and gas or other properties were recorded in 2016 or 2015 . we also recorded non-cash impairment charges of $ 0.2 million and $ 14.4 million during the years ended december 31 , 2016 and 2015 , respectively , for unproved properties due to leases that expired during the period . as a result of periodic assessments of unproved properties not held-by-production , we recorded additional impairment charges of $ 0.9 million and $ 22.2 million related to acreage expiring in future periods because there were no plans to drill or extend the leases prior to their expiration . during the year ended december 31 , 2015 , these impairment charges included $ 15.2 million related to leases that expired during the year ended december 31 , 2016 . consequently , lower impairment charges for unproved properties were recorded during the year ended december 31 , 2016 as most leases that expired during the period had been previously impaired . in determining the amount of non-cash impairment charges for such periods , we considered the application of the factors described under “ critical accounting policies and estimates—impairment of proved properties ” and “ critical accounting policies and estimates—impairment of unproved properties . ” general and administrative ( “ g & a ” ) expenses . our g & a expenses increased $ 0.5 million for the year ended december 31 , 2016 from $ 92.5 million for the year ended december 31 , 2015 . ows g & a increased by $ 3.6 million primarily due to ows completing opna wells with a higher average third-party working interest during the year ended december 31 , 2016 as compared to the year ended december 31 , 2015 . excluding our intercompany elimination , gross ows g & a decreased $ 11.9 million . e & p g & a was

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows provided by financing activities net cash provided by financing activities was $ 844.3 million , $ 83.3 million and $ 158.8 million for the years ended december 31 , 2016 , 2015 and 2014 , respectively . for the year ended december 31 , 2016 , cash sourced through financing activities was provided by net proceeds from the issuance of our common stock , the issuance of our senior convertible notes , and the borrowings under our revolving credit facility , partially offset by the repurchase of a portion of our senior notes . for the year ended december 31 , 2015 , cash sourced through financing activities was provided by net proceeds from the issuance of our common stock , partially offset by net repayments on our revolving credit facility . for the year ended december 31 , 2014 , cash sourced through financing activities was provided by borrowings under our revolving credit facility . sale of common stock . on february 2 , 2016 , we completed a public offering of 39,100,000 shares of our common stock ( including 5,100,000 shares issued pursuant to the underwriters ' option to purchase additional common stock ) at a purchase price of $ 4.685 per share . we used the net proceeds from the offering of $ 182.8 million , after deducting underwriting discounts and commissions and offering expenses , for general corporate purposes .

replace_table_token_5_th * for 2019 , the pretax impact of the brokerage segment adjustments totals $ 10.4 million , with a corresponding adjustment to the provision for income taxes of $ 0.9 million relating to these items . the pretax impact of the risk management segment adjustments totals $ 5.5 million , with a corresponding adjustment to the provision for income taxes of $ 1.3 million relating to these items . the pretax impact of the corporate segment adjustments totals $ 17.9 million , with an adjustment to the benefit for income taxes of $ 3.9 million . for the corporate segment , the clean energy related adjustments are described on pages 47 to 48. for 2018 , the pretax impact of the brokerage segment adjustments totals $ 51.0 million , with a corresponding adjustment to the provision for income taxes of $ 12.9 million relating to these items . the pretax impact of the risk management segment adjustments totals $ ( 3.2 ) million , with a corresponding adjustment to the provision for income taxes of $ ( 1.0 ) million relating to these items . there was no pretax impact of the corporate segment adjustments , with an adjustment to the benefit for income taxes of $ 30.9 million . 27 reconciliation of non-gaap measures - pre-tax earnings and diluted net earnings per share ( in millions except share and per share data ) replace_table_token_6_th insurance market overview fluctuations in premiums charged by property/casualty underwriting enterprises have a direct and potentially material impact on the insurance brokerage industry . commission revenues are generally based on a percentage of the premiums paid by insureds and normally follow premium levels . insurance premiums are cyclical in nature and may vary widely based on market conditions . various factors , including competition for market share among underwriting enterprises , increased underwriting capacity and improved economies of scale following consolidations , can result in flat or reduced property/casualty premium rates ( a “ soft ” market ) . a soft market tends to put downward pressure on commission revenues . various countervailing factors , such as greater than anticipated loss experience , unexpected loss exposure and capital shortages , can result in increasing property/casualty premium rates ( a “ hard ” market ) . a hard market tends to favorably impact commission revenues . hard and soft markets may be broad-based or more narrowly focused across individual product lines or geographic areas . as markets 28 harden , buyers of insurance ( such as our brokerage clients ) , have historically tried to mitigate premium increases and the higher commissions these premiums generate , including by raising their deductibles and or reducing the overall amount of insurance coverage they purchase . as the market softens , or costs decrease , these trends have historically reversed . during a hard market , buyers may switch to negotiated fee in lieu of commission arrangements to compensate us for placing their risks , or may consider the alternative insurance market , which includes self-insurance , captives , rent-a-captives , risk retention groups and capital market solutions to transfer risk . according to industry estimates , these alternative markets now account for 50 % of the total u.s. commercial property/casualty market . our brokerage units are very active in these markets as well . while increased use by insureds of these alternative markets historically has reduced commission revenue to us , such trends generally have been accompanied by new sales and renewal increases in the areas of risk management , claims management , captive insurance and self-insurance services and related growth in fee revenue . inflation tends to increase the levels of insured values and risk exposures , resulting in higher overall premiums and higher commissions . however , the impact of hard and soft market fluctuations has historically had a greater impact on changes in premium rates , and therefore on our revenues , than inflationary pressures . we typically cite the council of insurance agents & brokers ( which we refer to as the ciab ) insurance pricing quarterly survey at this time as an indicator of the current insurance rate environment . the fourth quarter 2019 survey had not been published as of the filing date of this report . the first three 2019 quarterly surveys indicated that u.s. commercial property/casualty rates increased by 3.5 % , 5.2 % , and 6.2 % on average , for the first , second and third quarters of 2019 , respectively . we expect a similar trend to be noted when the ciab fourth quarter 2019 survey report is issued , which would signal continued price firming . the ciab represents the leading domestic and international insurance brokers , who write approximately 85 % of the commercial property/casualty premiums in the u.s. in 2020 , we expect increases in property/casualty rates and exposures greater than the modest increases observed during 2019. within our employee benefits and consulting brokerage operations , we believe that employment growth , a tightening labor market and the complexity surrounding the healthcare regulatory environment bode well for the continued demand of our solutions . in addition , our history of strong new business generation , solid retentions and enhanced value-added services for our carrier partners should all result in further organic growth opportunities around the world . internationally , pricing is increasing the most in our london specialty and canadian retail property/casualty markets , and is positive in our australian , new zealand and uk retail property/casualty markets . overall , we believe that in a positive rate environment with growing exposure units , our professionals can demonstrate their expertise and high-quality , value-added capabilities by strengthening our clients ' insurance portfolios . based on our experience , insurance carriers appear to be making rational pricing decisions . in lines and accounts where rate increases or decreases are warranted , the underwriters are pricing accordingly . story_separator_special_tag reconciliation of non-gaap information presented to gaap measures - this report includes tabular reconciliations to the most comparable gaap measures for adjusted revenues , adjusted compensation expense and adjusted operating expense , ebitdac , ebitdac margin , adjusted ebitdac , adjusted ebitdac margin , adjusted ebitdac ( before acquisitions ) , diluted net earnings per share ( as adjusted ) and organic revenue measures . brokerage segment the brokerage segment accounted for 68 % of our revenue in 2019. our brokerage segment is primarily comprised of retail and wholesale brokerage operations . our brokerage segment generates revenues by : ( i ) identifying , negotiating and placing all forms of insurance or reinsurance coverage , as well as providing risk-shifting , risk-sharing and risk-mitigation consulting services , principally related to property/casualty , life , health , welfare and disability insurance . we also provide these services through , or in conjunction with , other unrelated agents and brokers , consultants and management advisors . ( ii ) acting as an agent or broker for multiple underwriting enterprises by providing services such as sales , marketing , selecting , negotiating , underwriting , servicing and placing insurance coverage on their behalf . 32 ( iii ) providing consulting services related to health and welfare benefits , voluntary benefits , executive benefits , compensation , retirement planning , institutional investment and fiduciary , actuarial , compliance , private insurance exchange , human resource technology , communications and benefits administration . ( iv ) providing management and administrative services to captives , pools , risk-retention groups , healthcare exchanges , small underwriting enterprises , such as accounting , claims and loss processing assistance , feasibility studies , actuarial studies , data analytics and other administrative services . the primary source of revenues for our brokerage services is commissions from underwriting enterprises , based on a percentage of premiums paid by our clients , or fees received from clients based on an agreed level of service usually in lieu of commissions . commissions are fixed at the contract effective date and generally are based on a percentage of premiums for insurance coverage or employee headcount for employer sponsored benefit plans . commissions depend upon a large number of factors , including the type of risk being placed , the particular underwriting enterprise 's demand , the expected loss experience of the particular risk of coverage , and historical benchmarks surrounding the level of effort necessary for us to place and service the insurance contract . rather than being tied to the amount of premiums , fees are most often based on an expected level of effort to provide our services . in addition , under certain circumstances , both retail brokerage and wholesale brokerage services receive supplemental and contingent revenues . supplemental revenue is revenue paid by an underwriting enterprise that is above the base commission paid , is determined by the underwriting enterprise and is established annually in advance of the contractual period based on historical performance criteria . contingent revenue is revenue paid by an underwriting enterprise based on the overall profit and or volume of the business placed with that underwriting enterprise during a particular calendar year and is determined after the contractual period . litigation , regulatory and taxation matters irs investigation - a portion of our brokerage business includes the development and management of “ micro-captives , ” through operations we acquired in 2010 in our acquisition of the assets of tribeca strategic advisors ( which we refer to as tribeca ) . a “ captive ” is an underwriting enterprise that insures the risks of its owner , affiliates or a group of companies . micro-captives are captive underwriting enterprises that are subject to taxation only on net investment income under irc section 831 ( b ) . our micro-captive advisory services are under investigation by the internal revenue service ( which we refer to as irs ) . additionally , the irs has initiated audits for the 2012 tax year , and subsequent tax years , of over 100 of the micro-captive underwriting enterprises organized and or managed by us . among other matters , the irs is investigating whether we have been acting as a tax shelter promoter in connection with these operations . while the irs has not made specific allegations relating to our operations or the pre-acquisition activities of tribeca , an adverse determination could subject us to penalties and negatively affect our defense of the class action lawsuit described below . we may also experience lost earnings due to the negative effect of an extended irs investigation . from 2017 to 2019 , our micro-captive operations contributed less than $ 2.9 million of net earnings and less than $ 4.5 million of ebitdac to our consolidated results in any one year . due to the fact that the irs has not made any allegation against us , or completed all of its audits of our clients , we are not able to reasonably estimate the amount of any potential loss in connection with this investigation . class action lawsuit - on december 7 , 2018 , a class action lawsuit was filed against us , our subsidiary artex risk solutions , inc. ( which we refer to as artex ) and other defendants including tribeca , in the unites states district court for the district of arizona . the named plaintiffs are micro-captive clients of artex or tribeca and their related entities and owners who had irc section 831 ( b ) tax benefits disallowed by the irs . the complaint attempts to state various causes of action and alleges that the defendants defrauded the plaintiffs by marketing and managing micro-captives with the knowledge that the captives did not constitute bona fide insurance and thus would not qualify for tax benefits . the named plaintiffs are seeking to certify a class of all persons who were assessed back taxes , penalties or interest

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows from investing activities capital expenditures - capital expenditures were $ 138.8 million , $ 124.4 million and $ 129.2 million for 2019 , 2018 and 2017 , respectively , of which $ 11.8 million in 2017 related to expenditures on our new corporate headquarters building . in addition , 2019 and 2018 capital expenditures include amounts incurred related to investments made in information technology and software development projects . relating to the development of our new corporate headquarters , we received property tax related credits under a tax-increment financing note from rolling meadows , illinois and an illinois state edge tax credit . incentives from these two programs could total between $ 60.0 million and $ 90.0 million over a fifteen-year period . the net capital expenditures in 2017 primarily related to capitalized costs associated with expenditures on the implementation of new accounting and financial reporting systems and several other system initiatives that occurred in 2017. in 2020 , we expect total expenditures for capital improvements to be approximately $ 146.0 million , part of which is related to expenditures on office moves and expansions and updating computer systems and equipment . acquisitions - cash paid for acquisitions , net of cash and restricted cash acquired , was $ 1,266.8 million , $ 784.8 million and $ 376.1 million in 2019 , 2018 and 2017 , respectively . the increased use of cash for acquisitions in 2019 compared to 2018 was primarily due to an increase in the number and size of acquisitions in 2019 than occurred in 2018. the increased use of cash for acquisitions in 2018 compared to 2017 was primarily due to an increase in the number and size of acquisitions in 2018 than occurred in 2017 and we used less of our common stock to fund acquisitions in 2018. in addition , during 2019 , 2018 and 2017 we issued 1.9 million shares ( $ 166.1 million ) , 0.8 million shares ( $ 60.8 million ) and 1.0 million shares ( $ 59.6 million ) , respectively , of our common stock as payment for a portion of the total consideration paid for acquisitions and earnout payments .

financial operations revenue we expect that revenues we generate from the sales of our products will fluctuate from quarter to quarter . between 2008 and 2012 , we entered into joint development and collaboration agreements with animas and tandem , as well as other third parties under agreements that have since expired , under which we recognized development grant and other revenue received pursuant to that agreement ratably over the term of the development period . we recognize development milestones associated with each agreement as revenue upon achievement of each milestone if the milestone is considered substantive . cost of sales product cost of sales includes direct labor and materials costs related to each product sold or produced , including assembly , test labor and scrap , as well as factory overhead supporting our manufacturing operations . factory overhead includes facilities , material procurement and control , manufacturing engineering , quality assurance , supervision and management . these costs are primarily salary , fringe benefits , share-based compensation , facility expense , supplies and purchased services . a large portion of our costs are currently fixed due to our moderate level of production volumes compared to our potential capacity . all 47 of our manufacturing costs are included in product cost of sales . development and other cost of sales consists primarily of salaries , fringe , facilities , and supplies directly attributable to our development contracts . research and development our research and development expenses primarily consist of engineering and research expenses related to our continuous glucose monitoring technology , clinical trials , regulatory expenses , quality assurance programs , materials and products for clinical trials . research and development expenses are primarily related to employee compensation , including salary , fringe benefits , share-based compensation , and temporary employee expenses . we also incur significant expenses to operate our clinical trials including clinical site reimbursement , clinical trial product and associated travel expenses . our research and development expenses also include fees for design services , contractors and development materials . selling , general and administrative our selling , general and administrative expenses primarily consist of salary , fringe benefits and share-based compensation for our executive , financial , sales , marketing and administrative functions . other significant expenses include trade show expenses , sales samples , insurance , professional fees for our outside legal counsel and independent auditors , litigation expenses , patent application expenses and consulting expenses . results of operations fiscal year ended december 31 , 2013 compared to december 31 , 2012 revenue , cost of sales and gross profit product revenue increased $ 64.1 million to $ 157.1 million for the twelve months ended december 31 , 2013 , compared to $ 93.0 million for the twelve months ended december 31 , 2012 based primarily on increased sales volume , due , in part , to the commercial launch in october 2012 of the g4 platinum system . product cost of sales increased $ 9.8 million to $ 58.1 million for the twelve months ended december 31 , 2013 , compared to $ 48.3 million for the twelve months ended december 31 , 2012 primarily due to increased sales volume . the product gross profit of $ 99.0 million for the twelve months ended december 31 , 2013 increased $ 54.3 million compared to $ 44.7 million for the same period in 2012 , primarily due to increased revenue , and the greater sales mix of our higher margin g4 platinum system compared to our seven plus system . development grant and other revenues decreased $ 4.0 million to $ 2.9 million for the twelve months ended december 31 , 2013 , compared to $ 6.9 million for the twelve months ended december 31 , 2012 . development and other cost of sales decreased $ 3.2 million to $ 1.8 million for the twelve months ended december 31 , 2013 , compared to $ 5.0 million for the twelve months ended december 31 , 2012 . the decrease in revenues associated with development was primarily due to the termination of the roche agreement in february 2013 , and the completion of development activities under the collaboration agreement with edwards in the fourth quarter of 2012. the decrease in costs associated with development was primarily due to fewer development obligations during the period with respect to our collaboration and development arrangements . research and development . research and development expense increased $ 6.5 million to $ 44.8 million for the twelve months ended december 31 , 2013 , compared to $ 38.3 million for the twelve months ended december 31 , 2012 . the increase in research and development expense was primarily due to increased development efforts for our ambulatory products . significant elements of increased research and development expense included $ 3.0 million in additional salaries , bonus , and payroll related costs and $ 2.5 million in additional share-based compensation . selling , general and administrative . selling , general and administrative expense increased $ 20.2 million to $ 84.2 million for the twelve months ended december 31 , 2013 , compared to $ 64.0 million for the twelve months ended december 31 , 2012 . the increase was primarily due to higher selling and information technology costs to support revenue growth and the continued commercialization of our products . significant elements of increased selling , general , and administrative expenses included $ 7.3 million in additional salaries , bonus , and payroll related costs , $ 3.4 million in additional share-based compensation costs , $ 3.2 million in additional sales commissions , and $ 1.5 million in additional bad debt expense . interest expense . interest expense increased to $ 0.9 million for the twelve months ended december 31 , 2013 , compared to $ 0.2 million for the twelve months ended december 31 , 2012 . story_separator_special_tag revenue on product sales to distributors is generally recognized at the time of shipment , which is when title and risk of loss have been transferred to the distributor and there are no other post-shipment obligations . revenue is recognized based on contracted prices and invoices are either paid by check following the issuance of a 52 purchase order or letter of credit , or they are paid by wire at the time of placing the order . terms of distributor orders are generally freight on board ( “ fob ” ) shipping point ( free carrier ( “ fca ” ) shipping point for international orders ) . distributors do not have rights of return per their distribution agreement outside of our standard warranty . the distributors typically have a limited time frame to notify us of any missing , damaged , defective or non-conforming products . for any such products , we shall either , at our option , replace the portion of defective or non-conforming product at no additional cost to the distributor or cancel the order and refund any portion of the price paid to us at that time for the sale in question . we shipped product directly to certain distributors ' customers and recognized $ 23.4 million , $ 15.9 million and $ 14.5 million in revenue from these direct shipments , which represents 15 % , 16 % and 19 % of our total revenues for the twelve months ended december 31 , 2013 , 2012 and 2011 , respectively . with respect to other distributors that stock inventory of our product and fulfill orders from their inventory , we shipped product to these distributors and recognized $ 70.5 million , $ 30.7 million and $ 17.7 million in revenue from these arrangements , which represents 44 % , 31 % and 23 % of our total revenues for the twelve months ended december 31 , 2013 , 2012 and 2011 , respectively . we monitor shipments to , and on-hand inventory levels of , these distributors , and at december 31 , 2013 , these distributors had limited amounts of our product in their inventory . we have collaborative license and development arrangements with strategic partners for the development and commercialization of products utilizing our technologies . the terms of these agreements typically include multiple deliverables by us ( for example , license rights , provision of research and development services and manufacture of clinical materials ) in exchange for consideration to us of some combination of non-refundable license fees , funding of research and development activities , payments based upon achievement of clinical development milestones and royalties in the form of a designated percentage of product sales or profits . with the exception of royalties , these types of consideration are classified as development grant and other revenue in our consolidated statements of operations and are generally recognized over the service period except for substantive milestone payments , which are generally recognized when the milestone is achieved . in determining whether each milestone is substantive , we considered whether the consideration earned by achieving the milestone should ( i ) be commensurate with either ( a ) our performance to achieve the milestone or ( b ) the enhancement of value of the item delivered as a result of a specific outcome resulting from our performance to achieve the milestone , ( ii ) relate solely to past performance and ( iii ) be reasonable relative to all deliverables and payment terms in the arrangement . we recognize royalties as product revenue in the period in which we obtain the royalty report , which is necessary to determine the amount of royalties we are entitled to receive . non-refundable license fees are recognized as revenue when we have a contractual right to receive such payment , the contract price is fixed or determinable , the collection of the resulting receivable is reasonably assured and we have no further performance obligations under the license agreement . multiple element arrangements , such as license , development and other multiple element service arrangements , are analyzed to determine how the arrangement consideration should be allocated among the separate units of accounting , or whether they must be accounted for as a single unit of accounting . for transactions containing multiple element arrangements , we consider deliverables as separate units of accounting and recognize deliverables as revenue upon delivery only if ( i ) the deliverable has standalone value and ( ii ) if the arrangement includes a general right of return relative to the delivered item ( s ) , delivery or performance of the undelivered item ( s ) is probable and substantially controlled by us . we allocate consideration to the separate units of accounting using the relative selling price method , in which allocation of consideration is based on vendor-specific objective evidence ( “ vsoe ” ) if available , third-party evidence ( “ tpe ” ) , or if vsoe and tpe are not available , management 's best estimate of a standalone selling price for elements . we use judgment in estimating the value allocable to the deliverables in an agreement based on our estimate of the fair value or relative selling price attributable to the related deliverables and the consideration from such an agreement is typically recognized as product revenue or development grant and other revenue . for arrangements that are accounted for as a single unit of accounting , total payments under the arrangement are recognized as revenue on a straight-line basis over the period we expect to complete our performance obligations . we review the estimated period of our performance obligations on a periodic basis and update the recognition period as appropriate . the cumulative amount of revenue earned is limited to the cumulative amount of payments we are entitled to as of the period ending date . if we can not reasonably estimate when our

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources we are in the early commercialization stage and have incurred losses since our inception in may 1999. as of december 31 , 2013 , we had an accumulated deficit of $ 475.4 million and had working capital of $ 61.0 million . our cash , cash equivalents and short-term marketable securities totaled $ 54.6 million , excluding $ 1.0 million in restricted cash . to date , we have funded our operations primarily through offerings of equity securities and debt . in july 2013 , we were awarded a $ 4.0 million grant ( the `` helmsley grant '' ) from the leona m. and harry b. helmsley charitable trust ( the `` helmsley trust '' ) to accelerate the development of the sixth generation of our advanced glucose-sensing technologies ( the `` gen 6 sensor '' ) . the funding is milestone based and is contingent upon our meeting specific development milestones related to the gen 6 sensor over the next several years . upon the successful commercialization of the gen 6 sensor , we are obligated to either ( 1 ) make royalty payments of up to $ 2.0 million per year for four years , or ( 2 ) at our sole election , make a one-time $ 6.0 million royalty payment . net cash provided by/used in operating activities .

ivhtravel.com and its proprietary booking engine has over 1.1 million lodging choices globally and provides add-on capability for activities , rental car and cancellation protection with airfare , all on the technologically developed roadmap in 2019. ibc was born out of an independent hotelier 's frustration over being denied cost-effective access to enterprise hospitality services and software that served their large corporate competitors coupled with the inability to secure a global and robust guest loyalty program . instead of giving up independence , the founders of ibc hired a development team to create the patent-pending inndependent inncentives guest loyalty program . with the success of the patent-pending inncentives loyalty program ibc began adding hotel services and software specifically for independent and boutique hotels . these solutions address the following challenges : revpar and profitability optimization , operational management and soft brand benefits . revpar , or revenue per available room , is a hospitality performance metric that is calculated by dividing a hotels total guestroom revenue by the room count and the number of days in the period being measured or by multiplying the average daily rate by the occupancy . our technology division is broken into two business lines , international vacation hotels travel ( “ ivh ” ) and ibc hospitality technologies . each of these divisions customer base is very different , and the services provided to each customer base ranges dramatically . international vacation hotels travel ( “ ivh ” ) transactional business to consumer ( “ b-to-c ” ) a. ivh collect – ivh will charge the guests in full on booking and remit the payments to the hotel for all completed stays for rates contracted less the agreed upon commission . wire and ach fees will be paid by the hotel as applicable . b. hotel collect – the hotel will charge the guests in full upon arrival and ivh will invoice the hotel at the end of each month the agreed upon commission for the hotel guest stays completed . c. split – guest pays deposit to ivh equal to the commission , provides credit card details and pays the balance to the member upon arrival . in each of the above b-to-c revenue streams , ivh provides a proprietary internet website or customized proprietary internet landing pages for each of the hotel properties . ivh 's customer base is the guests who are booking the reservations , not the hotels that are contracted with ibc . guests go to ibc 's managed webpages to ultimately purchase their hotel accommodations using the proprietary ibc booking engine or visit www.ivhtravel.com or www.ibcinncentives.com . ivh obtains the guests from a variety of demand channels including direct marketing , retargeting , meta sites and direct internet searches . guests typically book their travel accommodations on either the home page of www.ivhtravel.com or www.ibcinncentives.com a customized landing page for meta-mid funnel reservations . when guests book using the proprietary ibc booking engine either directly on ivhtravel.com or a customized landing page or website or www.ibcinncentives.com or white label solution , ivh is the merchant of record . a merchant of record is the organization that assumes the overall liability and risk of the transaction and the financial institution holds the merchant of record liable to process the payments correctly from our guests . per the network requirements , guests must be well aware that they are purchasing from ivh as our website branding , customized guest confirmations , reminder guest email communications , logos , privacy information , terms of use all must be clearly describing ibc/ivh policies including 24-hour reservations support . additionally , fraud is a significant issue in the online hospitality industry . fraud primarily occurs when a person uses a stolen credit card or in a card not present environment . people often take time between losing a card or having one stolen , often thinking it will be found shortly . this vulnerable period gives thieves an opportunity to make several purchases before the card is cancelled . especially in a card not present environment similar to ivh/ibc 's environment , this is when a criminal uses the phone or an online website and manually gives the credit card information . this type of transaction is more vulnerable as there is no physical identification verification . 9 in addition , as a value-added service , ivh provides a 24/7/365 reservation service line ( 602-870-6929 ) where guests can call , email or chat via their website with a reservations agent to answer any questions about the accommodations or reservation . inquiries are generated from either the confirmation details provided to the guest or our website which lists our phone number , email and chat services . these inquires go directly to our ivh reservation service line , not the individual hotel properties . ibc business to business ( “ b-to-b ” ) ibc is a technology solutions provider to the global travel and tourism industry . ibc spans the breadth of the global travel ecosystem , providing key software and services to a broad range of travel suppliers and travel buyers . one of the main significant differences between our ibc technologies division and our ivh business is that ibc technology division 's customer is the hotel property and not the guest . ibc 's customer base is the hotel properties , not the guests who are staying at the hotel properties . story_separator_special_tag hotel property depreciation expense decreased significantly as we sold our ontario , california property during the fiscal year ended january 31 , 2018. hotel property depreciation expenses decreased by approximately $ 130,000 from approximately $ 1,187,000 reported for the twelve months ended january 31 , 2018 compared with approximately $ 1,317,000 for the twelve months ended january 31 , 2017. in the fiscal year ending january 31 , 2018 , the trust recaptured the depreciation not recognized while the hotel properties were in the discontinued operations – assets held for sale reporting classification . real estate and personal property taxes , insurance ground rent expense decreased slightly by approximately $ 21,000 , or 4.1 % , to approximately $ 488,000 for the twelve months ended january 31 , 2018 compared to approximately $ 509,000 for the twelve months ended january 31 , 2017. interest expenses increased as we refinanced one of our hotel property mortgages and added debt to purchase iht stock and partnership units from related and third parties . interest expense increased by $ 167,000 to approximately $ 657,000 during the fiscal year ended january 31 , 2018 compared with approximately $ 490,000 during the fiscal year ended january 31 , 2017 . 14 income tax expenses was approximately $ 341,000 for the twelve months ended january 31 , 2018 , an increase of approximately $ 569,000 from the prior fiscal year income tax benefit of approximately $ 228,000. increases in the income tax expense was due to the overall increased consolidated net income from continued and discontinued operations net of sales of ownership interests in our properties primarily based on the taxable profits derived from the sale of our ontario , california property . sales of ownership interests in our properties for tax purposes are considered income but under generally accepted accounting principles ( “ gaap ” ) , they are considered an increase in the trusts ' equity . ibc development segment general and administrative expenses include overhead charges for management , accounting , reservations support staff and hotel onboarding . general and administrative expenses of approximately $ 1,348,000 for the twelve months ended january 31 , 2018 increased approximately $ 265,000 from approximately $ 1,083,000 for the twelve months ended january 31 , 2017 primarily due to increased bad debt expenses , credit card expenses , support staff and hotel onboarding costs significantly increased . sales and marketing expense includes consultants , internet advertising , tradeshows and sales commissions expenses which increased by approximately $ 410,000 , from approximately $ 639,000 for the twelve months ended january 31 , 2017 to approximately $ 1,049,000 for the twelve months ended january 31 , 2018. as reservations income increases , sales and marketing expenses increase in order to acquire additional guests to book on our website . in addition , management added significant amount of sales and marketing resources . reservation acquisition costs included amounts owed to hotels for prepaid reservations from august 2017 – january 2018 and were approximately $ 234,000. since we changed our accounting policy starting august 1 , 2017 to record prepaid reservations on a gross basis , no reservation acquisition costs are included in the fiscal year ending january 31 , 2017 and for the first six months of the fiscal year ending january 31 , 2018. starting february 1 , 2018 , we plan on recording prepaid reservations on a net basis . depreciation expenses increased by $ 25,000 to approximately $ 104,000 for the fiscal year ended january 31 , 2018 as compared with approximately $ 79,000 for the fiscal year ended january 31 , 2017. as the ibc technologies division develops and adds additional fixed assets , depreciation expenses increased . over the past several fiscal years , the trust has made significant investment in ibc hotels , including its investment in the purchase of international vacation hotels for $ 1 million in january 2016. in the fiscal year ending january 31 , 2017 , the trust incurred approximately $ 1 million net operating loss from ibc hotels . in the fiscal year ending january 31 , 2018 , ibc hotels lost approximately $ 1.6 million excluding the write-off of the intangible assets . after assessing the totality of events and circumstances including the historical losses and projected losses , the trust determined that it is more likely than not that the fair value of ibc hotels is less than its carrying value . accordingly , management has decided to write down the entire amount of $ 500,000 of goodwill as of january 31 , 2018. amortization expenses primarily consists of amortization of intangibles related to our purchase of international vacation hotels in january 2016. amortization expense significantly increased as management determined that assets were impaired as of january 31 , 2018 as the trust determined that it is more likely than not that the fair value of the intangibles was significantly less than its carrying value . for the fiscal year ended january 31 , 2018 , we had approximately $ 433,000 of amortization expense compared with $ 67,000 of amortization expense for the fiscal year ended january 31 , 2017. revenue – discontinuing operations hotel operations & corporate overhead segment on june 2 , 2017 , the trust sold its ontario , california hotel to an unrelated third party for approximately $ 17.5 million , which the trust received in cash . total gain on sale was approximately $ 11.4 million . for the fiscal year ended january 31 , 2018 , our ontario , california hotel had approximately $ 1,471,000 of revenue consisting of approximately $ 1.4 million of room and other revenues and approximately $ 65,000 of food and beverage revenues . for the fiscal year ended january 31 , 2017 , our ontario , california hotel had approximately $ 3.85 million in room and other revenues and approximately $ 164,000 of food and beverage revenues . we anticipated exceeding our room and food and

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources overview – hotel operations & corporate overhead and ibc development segments our principal source of cash to meet our cash requirements , including distributions to our shareholders , is our share of the partnership 's cash flow , quarterly distributions from the albuquerque , new mexico and yuma , arizona properties and more recently , sales of non-controlling interests in certain of our hotels and the sale of hotel properties . the partnership 's principal source of revenue is hotel operations for the one hotel property it owns in tucson , arizona and the proceeds from the sale of the ontario , california property . our liquidity , including our ability to make distributions to our shareholders , will depend upon our ability , and the partnership 's ability , to generate sufficient cash flow from hotel operations and to service our debt . hotel operations are significantly affected by occupancy and room rates at the hotels . we anticipate occupancy and adr will be steady during this coming year ; capital improvements are expected to decrease from the prior year . with approximately $ 5,775,000 of cash and short term investments as of january 31 , 2018 and the availability of a $ 1,000,000 related party demand/revolving line of credit/promissory note and the availability of our two available advances to affiliate credit facilities for a total of $ 1,000,000 maximum borrowing capacity , we believe that we will have enough cash on hand to meet all of our financial obligations as they become due for at least the next twelve months from the issuance date of the these consolidated financial statements .

net interest and dividend income is the difference between the interest income earned on interest-earning assets and the interest paid on interest-bearing liabilities . interest-earning assets consist primarily of securities , commercial real estate loans , commercial and industrial loans and residential real estate loans . interest-bearing liabilities consist primarily of certificates of deposit and money market account , demand deposit accounts and savings account deposits , borrowings from the fhlbb and securities sold under repurchase agreements . the consolidated results of operations also depend on the provision for loan losses , noninterest income , and noninterest expense . noninterest expense includes salaries and employee benefits , occupancy expenses and other general and administrative expenses . noninterest income includes service fees and charges , income on bank-owned life insurance , and gains ( losses ) on securities . critical accounting policies . our accounting policies are disclosed in note 1 to our consolidated financial statements . given our current business strategy and asset/liability structure , the more critical policies are accounting for nonperforming loans , the allowance for loan losses and provision for loan losses , other than temporary impairment of securities , and the valuation of deferred taxes . in addition to the informational disclosure in the notes to the consolidated financial statements , our policy on each of these accounting policies is described in detail in the applicable sections of “ management 's discussion and analysis of financial condition and results of operations . ” senior management has discussed the development and selection of these accounting policies and the related disclosures with the audit committee of our board of directors . our general policy regarding recognition of interest on loans is to discontinue the accrual of interest when principal or interest payments are delinquent 90 days or more , or earlier if the loan is considered impaired . any unpaid amounts previously accrued on these loans are reversed from income . subsequent cash receipts are applied to the outstanding principal balance or to interest income if , in the judgment of management , collection of the principal balance is not in question . loans are returned to accrual status when they become current as to both principal and interest and when subsequent performance reduces the concern as to the collectability of principal and interest . loan fees and certain direct loan origination costs are deferred , and the net fee or cost is recognized as an adjustment to interest income over the estimated average lives of the related loans . the process of evaluating the loan portfolio , classifying loans and determining the allowance and provision is described in detail in part i under “ business – lending activities - allowance for loan losses . ” our methodology for assessing the allocation of the allowance consists of two key components , which are a specific allowance for impaired loans and an allowance for the remainder of the portfolio . measurement of impairment can be based on present value of expected future cash flows discounted at the loan 's effective interest rate , the loan 's observable market price or the fair value of the collateral , if the loan is collateral dependent . this evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change . the allocation of the allowance is also reviewed by management based upon our evaluation of then-existing economic and business conditions affecting our key lending areas and other conditions , such as new loan products , credit quality trends ( including trends in nonperforming loans expected to result from existing conditions ) , collateral values , loan volumes and concentrations , specific industry conditions within portfolio segments that existed as of the balance sheet date and the impact that such conditions were believed to have had on the collectability of the loan portfolio . although management believes it has established and maintained the allowance for loan losses at adequate levels , if management 's assumptions and judgments prove to be incorrect due to continued deterioration in economic , real estate and other conditions , and the allowance for loan losses is not adequate to absorb inherent losses , our earnings and capital could be significantly and adversely affected . on a quarterly basis , we review securities with a decline in fair value below the amortized cost of the investment to determine whether the decline in fair value is temporary or other than temporary . declines in the fair value of marketable equity securities below their cost that are deemed to be other than temporary based on the severity and duration of the impairment are reflected in earnings as realized losses . in estimating other than temporary impairment losses for securities , impairment is required to be recognized if ( 1 ) we intend to sell the security ; ( 2 ) it is “ more likely than not ” that we will be required to sell the security before recovery of its amortized cost basis ; or ( 3 ) for debt securities , the present value of expected cash flows is not sufficient to recover the entire amortized cost basis . for all impaired available for sale securities that we intend to sell , or more likely than not will be required to sell , the full amount of the other than temporary impairment is recognized through earnings . for other impaired debt securities , credit-related other than temporary impairment is recognized through earnings , while non-credit related other than temporary impairment is recognized in other comprehensive income , net of applicable taxes . 38 we must make certain estimates in determining income tax expense for financial statement purposes . these estimates occur in the calculation of the deferred tax assets and liabilities , which arise from the temporary differences between the tax basis and financial statement basis of our assets and liabilities . story_separator_special_tag the repurchase agreements had a weighted average cost of 3.06 % . the prepayments decreased the cost of funds and improved the net interest margin for the year ended december 31 , 2013. net interest and dividend income . net interest and dividend income increased $ 300,000 to $ 30.7 million for the year ended december 31 , 2013 as compared to $ 30.4 million for same period in 2012. the net interest margin , on a tax-equivalent basis , was 2.58 % and 2.53 % for the years ended december 31 , 2013 and 2012 , respectively . the increase in the net interest margin was due to the cost of interest-bearing liabilities decreasing 26 basis points , while the yield on average interest-bearing assets decreased 12 basis points , both occurring because of the low interest rate environment . provision ( credit ) for loan losses . the provision ( credit ) for loan losses is reviewed by management based upon our evaluation of then-existing economic and business conditions affecting our key lending areas and other conditions , such as new loan products , credit quality trends ( including trends in nonperforming loans expected to result from existing conditions ) , collateral values , loan volumes and concentrations , specific industry conditions within portfolio segments that existed as of the balance sheet date and the impact that such conditions were believed to have had on the collectability of the loan portfolio . 44 the amount of the credit provision for loan losses during the year ended december 31 , 2013 was based upon the changes that occurred in the loan portfolio during that same period . the changes in the loan portfolio , described in detail below , include increases in the balances of commercial real estate loans , commercial and industrial loans and residential real estate loans as well as the continuous improvement of the overall risk profile of the commercial loan portfolio . after evaluating these factors , we recorded a credit provision for loan losses of $ 256,000 for the year ended december 31 , 2013 , compared to $ 698,000 in provision expense for the same period in 2012. the allowance was $ 7.5 million at december 31 , 2013 and $ 7.8 million at december 31 , 2012 , respectively . the allowance for loan losses as a percentage of total loans was 1.17 % and 1.31 % at december 31 , 2013 and 2012 , respectively . commercial real estate loans increased $ 18.7 million to $ 264.5 million at december 31 , 2013 from $ 245.8 million at december 31 , 2012. commercial and industrial loans increased $ 9.5 million to $ 135.6 million at december 31 , 2013 from $ 126.1 million at december 31 , 2012. residential real estate loans increased $ 14.4 million to $ 234.1 million at december 31 , 2013. we consider residential real estate loans to contain less credit risk and market risk than commercial real estate and commercial and industrial loans . while the loan portfolio increased by $ 42.9 million to $ 630.0 million at december 31 , 2013 from $ 587.1 million at december 31 , 2012 , the portfolio also experienced an overall positive change in its risk profile throughout the year ended december 31 , 2013. impaired loans that previously carried higher allowances showed considerable improvement resulting in allowances on impaired loans decreasing $ 441,000 to $ 97,000 at december 31 , 2013 from $ 538,000 at december 31 , 2012. for the year ended december 31 , 2013 , we recorded net charge-offs of $ 79,000 compared to net charge-offs of $ 668,000 for the year ended december 31 , 2012. the year ended december 31 , 2013 net charge off was composed of charge-offs of $ 340,000 partially offset by recoveries of $ 261,000. the 2012 period was composed of charge-offs of $ 768,000 partially offset by recoveries of $ 100,000. although management believes it has established and maintained the allowance for loan losses at appropriate levels , future adjustments may be necessary if economic , real estate and other conditions differ substantially from the current operating environment . noninterest income . noninterest income decreased $ 1.7 million to $ 4.3 million for the year ended december 31 , 2013 compared to $ 6.0 million for the same period in 2012. the primary reason for the decrease in noninterest income was due to the net gains on the sales of securities being completely offset by prepayment expenses during the year ended december 31 , 2013 , whereas the 2012 period showed a net overall gain of $ 1.9 million in sales of securities after prepayment expenses . the net gains for the years ended december 31 , 2013 and 2012 were primarily the result of management selling mortgage-backed securities that were expected to prepay rapidly and decrease the expected yield . during 2013 , we also prepaid repurchase agreements in the amount of $ 43.3 million and incurred a prepayment expense of $ 3.4 million . the repurchase agreements had a weighted average cost of 2.99 % . during the last week of 2012 , we prepaid repurchase agreements in the amount of $ 28.0 million and incurred a prepayment expense of $ 1.0 million . the repurchase agreements had a weighted average cost of 3.06 % . the prepayments decreased the cost of funds and improved the net interest margin for the year ended december 31 , 2013. in addition , during the year ended december 31 , 2013 , we recorded gains on the proceeds of boli death benefits of $ 563,000 , as compared to $ 80,000 in the comparable 2012 period . service charges and fees decreased $ 177,000 to $ 2.4 million for the year ended december 31 , 2013 from $ 2.6 million for the year ended december 31 , 2012. the year ended included $ 156,000 related to a written risk

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources the term “ liquidity ” refers to our ability to generate adequate amounts of cash to fund loan originations , loan purchases , deposit withdrawals and operating expenses . our primary sources of liquidity are deposits , scheduled amortization and prepayments of loan principal and mortgage-backed securities , maturities and calls of investment securities and funds provided by our operations . we also can borrow funds from the fhlbb based on eligible collateral of loans and securities . outstanding borrowings from the fhlbb were $ 252.7 million at december 31 , 2013 , and $ 261.8 million at december 31 , 2012. at december 31 , 2013 , we had $ 83.0 million in available borrowing capacity with the fhlbb . we have the ability to increase our borrowing capacity with the fhlbb by pledging investment securities or loans . in addition , we have a $ 4.0 million line of credit with bbn at an interest rate determined and reset by bbn on a daily basis . at december 31 , 2013 , we did not have an outstanding balance under this line . there was $ 4.0 million outstanding under this line at december 31 , 2012. as part of our contract with bbn , we are required to maintain a reserve balance of $ 300,000 with bbn for our use of this line . in addition , we may enter into reverse repurchase agreements with approved broker-dealers . reverse repurchase agreements are agreements that allow us to borrow money using our securities as collateral . we also have outstanding at any time , a significant number of commitments to extend credit and provide financial guarantees to third parties .

through the operations at our marrero , louisiana facility , we produce a vacuum gas oil ( vgo ) product from used oil re-refining which is then sold via barge to crude refineries to be utilized as an intermediate feedstock in the refining process , as well as to the marine fuels market . . through the operations at our columbus , ohio facility we produce a base oil finished product which is then sold via truck or rail car to end users for blending , packaging and marketing of lubricants . refining and marketing - the refining and marketing segment generates revenues relating to the sales of finished products . the refining and marketing segment gathers hydrocarbon streams in the form of petroleum distillates , transmix and other chemical products that have become off-specification during the transportation or refining process . these feedstock streams are purchased from pipeline operators , refineries , chemical processing facilities and third-party providers , and then 50 processed at a third-party facility under our direction . the end products are typically three distillate petroleum streams ( gasoline blendstock , pygas and fuel oil cutterstock ) , which are sold to major oil companies or to large petroleum trading and blending companies . the end products are delivered by barge and truck to customers . recovery - the recovery segment is a generator solutions company for the proper recovery and management of hydrocarbon streams . we own and operate a fleet of trucks and other vehicles used for shipping and handling equipment and scrap materials . our revenues are affected by changes in various commodity prices including crude oil , natural gas , # 6 oil and metals . cost of revenues black oil - cost of revenues for our black oil segment are comprised primarily of feedstock purchases from a network of providers . other cost of revenues include processing costs , transportation costs , purchasing and receiving costs , analytical assessments , brokerage fees and commissions , and surveying and storage costs . refining and marketing - the refining and marketing segment incurs cost of revenues relating to the purchase of feedstock , purchasing and receiving costs , and inspection and processing of the feedstock into gasoline blendstock , pygas and fuel oil cutter by a third party . cost of revenues also includes broker 's fees , inspection and transportation costs . recovery - the recovery segment incurs cost of revenues relating to the purchase of hydrocarbon products , purchasing and receiving costs , and inspection . cost of revenues also includes broker 's fees , inspection and transportation costs . our cost of revenues are affected by changes in various commodity indices , including crude oil , natural gas , # 6 oil and metals . for example , if the price for crude oil increases , the cost of solvent additives used in the production of blended oil products , and fuel cost for transportation cost from third party providers will generally increase . similarly , if the price of crude oil falls , these costs may also decline . general and administrative expenses our general and administrative expenses consist primarily of salaries and other employee-related benefits for executive , administrative , legal , financial and information technology personnel , as well as outsourced and professional services , rent , utilities , and related expenses at our headquarters , as well as certain taxes . depreciation and amortization expenses our depreciation and amortization expenses are primarily related to the fixed assets and intangible assets acquired in connection with the vertex holdings , l.p. ( formerly vertex energy , l.p. ) , a texas limited partnership ( “ holdings ” ) , e-source holdings , llc ( “ e-source ” ) , omega refining , llc 's ( “ omega refining ” ) and warren ohio holdings co. , llc , f/k/a heartland group holdings , llc ( “ heartland ” ) , acadiana , nickco , ygriega and ses acquisitions . 51 results of operations for the three months ended december 31 , 2018 compared to the three months ended december 31 , 2017 set forth below are our results of operations for the three months ended december 31 , 2018 , as compared to the same period in 2017 . replace_table_token_3_th 52 each of our segments ' gross profit ( loss ) during the three months ended december 31 , 2018 and 2017 were as follows : replace_table_token_4_th revenues increased 1 % for the fourth quarter of 2018 , compared to the same period in 2017 , due primarily to higher commodity prices . total volume decreased 24 % and gross profit decreased 38 % for the three months ended december 31 , 2018 compared to same period in 2017 . additionally , our per barrel margin decreased 19 % relative to the three months ended december 31 , 2017 . the majority of this decrease was the result of the sharp drop in commodity prices during the fourth quarter of 2018 which resulted in compressed spreads during this period . notwithstanding the above , and the increase in cost of revenues for the fourth quarter of 2018 , which were a result of rising commodity prices during the first nine months of 2018 , versus the fourth quarter of 2017 , we believe that due to the combination of our fee structure change along with our increased third party supply we were able to make progress in lowering our cost of feedstock during the fourth quarter . this process takes time to implement and we anticipate seeing improvements to our margins during this first quarter of 2019 related to these changes . our black oil segment 's volume decreased approximately 8 % during the three months ended december 31 , 2018 compared to the same period in 2017 . story_separator_special_tag our revenues and cost of revenues are significantly impacted by fluctuations in commodity prices ; decreases in commodity prices typically result in decreases in revenue and cost of revenues . our gross profit is to a large extent a function of the market discount we are able to obtain in purchasing feedstock , as well as how efficiently management conducts operations . set forth below , we have disclosed a quarter-by-quarter summary of our statements of operations and statements of operations by segment information for the quarters ended december 31 , september 30 , june 30 , and march 31 , 2018 and 2017 , respectively . replace_table_token_7_th 59 replace_table_token_8_th the below graph charts our total quarterly revenue over time from march 31 , 2017 to december 31 , 2018 : story_separator_special_tag t > we had total liabilities of $ 33,171,401 as of december 31 , 2018 , including current liabilities of $ 16,995,611 and long-term liabilities of $ 16,175,790 , which included $ 14,402,179 of long-term debt representing the term loan with encina ( discussed below ) , and $ 1,481,692 of derivative liability related to warrants granted in connection with our series b and b1 preferred stock . we had working capital of $ 6,547,301 as of december 31 , 2018 , compared to working capital of $ 3,523,548 as of december 31 , 2017 . the increase in working capital is mainly due to the increase in our current assets in our operations . our future operating cash flows will vary based on a number of factors , many of which are beyond our control , including commodity prices , the cost of recovered oil , and the ability to turn our inventory . other factors that have affected and are expected to continue to affect earnings and cash flow are transportation , processing , and storage costs . over the long term , our operating cash flows will also be impacted by our ability to effectively manage our administrative and operating costs . additionally , we may incur future capital expenditures related to new refining facilities . the company financed insurance premiums through various financial institutions bearing interest rates from 4.00 % to 4.52 % . all such premium finance agreements have maturities of less than one year and have a balance of $ 999,152 at december 31 , 2018 . on march 1 , 2018 , the company obtained one capital lease . payments are $ 908 per month for the three years and the amount of the capital lease obligation was $ 22,390 at december 31 , 2018 . on may 29 , 2018 , the company obtained one capital lease . payments are $ 26,305 per quarter for four years and the amount of the capital lease obligation was $ 349,822 at december 31 , 2018 . credit and guaranty agreement and revolving credit facility with encina business credit , llc effective february 1 , 2017 , we , vertex operating , and substantially all of our other operating subsidiaries , other than e-source , entered into a credit agreement ( the “ ebc credit agreemen t ” ) with encina business credit , llc as agent ( the “ agent ” or “ ebc ” ) and encina business credit spv , llc and crowdout capital llc as lenders thereunder ( the “ ebc lenders ” ) . pursuant to the ebc credit agreement , and the terms thereof , the ebc lenders agreed to loan us up to $ 20 million , provided that the amount outstanding under the ebc credit agreement at any time can not exceed 50 % of the value of the operating plant facilities and related machinery and equipment owned by us ( not including e-source ) . 61 amounts borrowed under the ebc credit agreement bear interest at 12 % , 13 % or 14 % per annum , based on the ratio of ( a ) ( i ) consolidated ebitda for such applicable period minus ( ii ) capital expenditures made during such period , minus ( iii ) the aggregate amount of income taxes paid in cash during such period ( but not less than zero ) to ( b ) the sum of ( i ) debt service charges plus ( ii ) the aggregate amount of all dividend or other distributions paid on capital stock in cash for the most recently completed 12 month period ( which ratio falls into one of the three following tiers : less than 1 to 1 ; from 1 to 1 to less than 1.45 to 1 ; or equal to or greater than 1.45 to 1 , which together with the value below , determines which interest rate is applicable ) and average availability under the revolving credit agreement ( defined below ) ( which falls into two tiers : less than $ 2.5 million and greater than or equal to $ 2.5 million , which together with the calculation above , determines which interest rate is applicable ) , as described in greater detail in the ebc credit agreement ( increasing by 2 % per annum upon the occurrence of an event of default ) . interest on amounts borrowed under the ebc credit agreement is payable by us in arrears , on the first business day of each month , beginning on the first business day of the first full month following the closing , together with required $ 75,000 monthly principal repayments . we also have the right to make voluntary repayments of the amount owed under the ebc credit agreement in amounts equal to or greater than $ 100,000 , from time to time . the interest rate is 12 % at december 31 , 2018 . the ebc credit agreement terminates on february 1 , 2020 , on which date we are required to repay the outstanding balance owed thereunder and any accrued and unpaid interest thereon . the

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources the success of our current business operations has become more dependent on repairs , and maintenance to our facilities and our ability to make routine capital expenditures . we also must maintain relationships with feedstock suppliers and end product customers , and operate with efficient management of overhead costs . through these relationships , we have historically been able to achieve volume discounts in the procurement of our feedstock , thereby increasing the margins of our segments ' operations . the resulting operating cash flow is crucial to the viability and growth of our existing business lines . we had total assets of $ 84,160,408 as of december 31 , 2018 compared to $ 84,305,474 at december 31 , 2017 . this decrease was mainly due to increases in accumulated depreciation as a result of our depreciable assets being one year . total current assets as of december 31 , 2018 of $ 23,542,912 include cash and cash equivalents of $ 1,349,831 , current restricted cash of $ 1,500,000 , described below , accounts receivable , net , of $ 9,027,990 , federal income tax receivable of $ 137,212 , inventory of $ 8,091,397 , derivative commodity asset of $ 695,941 in connection with our commodity derivative instruments , and prepaid expenses of $ 2,740,541 .

we have expanded our portfolio of proprietary and licensed brands through acquisitions and by entering into license agreements for new brands or for additional products under previously licensed brands . our acquisitions have helped to broaden our product offerings , expand our ability to serve different tiers of distribution and add a retail component to our business . our acquisitions are part of our strategy to expand our product offerings and increase the portfolio of proprietary and licensed brands that we offer through different tiers of retail distribution and at a variety of price points . 30 we believe that both andrew marc and the wilsons outlet business leverage our core strength in outerwear and provide us with new avenues for growth . we also believe that these acquisitions complement our other licensed brands , g-iii owned labels and private label programs . we have used the capabilities of companies we acquired to help us expand our product offerings . the jessica howard dress operations we acquired expanded and complemented our dress business that began shipping under the calvin klein label in september 2006. we added to our dress business when we expanded our license with ellen tracy to include dresses and again when we entered into a license agreement for jessica simpson dresses . we continued to grow our dress business when we expanded our relationship with guess in 2010 to include dresses and added licenses in 2011 for dresses with each of vince camuto and kensie . we also intend to grow our jessica howard and eliza j brands and expand private label programs to further develop our dress business . when we acquired andrew marc , it was a supplier of fine outerwear and handbags for both men and women to upscale specialty and department stores . we have since expanded our product categories and product offerings for andrew marc , both in house and through licensing arrangements . we have expanded the distribution of outerwear by penetrating additional doors and selling into new channels of distribution . we enhanced our website for andrew marc ( www.andrewmarc.com ) to expand our online product offerings . we launched andrew marc and marc new york dress lines which began shipping in fall 2009 , leveraging our g-iii dress capabilities and our manufacturing sources . we added to the andrew marc family of brands by creating the marc moto brand , the marc moto offering contains vintage inspired product that embraces legendary style . it is a denim lifestyle collection targeted toward young , independent men . we began a program to license our andrew marc and marc new york brands and have entered into agreements to license these brands for women 's footwear , men 's accessories , women 's handbags , men 's cold weather accessories , men 's denim and related sportswear , eyewear , men 's dress shirts , men 's tailored clothing , men 's footwear , watches , neckwear and sweaters . we have entered into agreements that terminate the license agreements with respect to women 's handbags and men 's denim and related sportswear , and are now pursuing these initiatives in-house . our retail operations segment , which consists almost entirely of our wilsons outlet store business , had an operating loss during fiscal 2009 and fiscal 2010 , although it achieved an operating profit in fiscal 2011 and fiscal 2012. beginning in fiscal 2010 , we undertook the following initiatives to improve the performance of our outlet business : improve the merchandise mix of outerwear at our stores , with increased emphasis on leather outerwear and a stronger assortment of private label product ; emphasize presentation of product in our stores and training of our sales associates ; and incorporate an improved mix of private label and branded accessories . as a result of these initiatives , the amount of the operating loss in our retail segment was reduced in fiscal 2010 , and the retail segment achieved an operating profit in each of fiscal 2011 and 2012. we continue to believe that operation of the wilsons outlet stores is part of our core competency , as outerwear comprised about one-half of our net sales at wilsons in fiscal 2012. we expect to continue to implement and refine these initiatives with a view to creating a store concept that is capable of building growth and profitability over the long-term . during fiscal 2012 , we increased the number of our wilson outlet stores by 5 and opened 4 new andrew marc outlet stores . we expect to add approximately 14 new outlet stores in fiscal 2013. during the third quarter of fiscal 2011 , we formed a joint venture with the camuto group to operate footwear and accessory outlet stores under the name “vince camuto.” the camuto group provides product and merchandises the stores . we provide the infrastructure and expertise for operation of the stores , including real estate , distribution , information systems , finance and administration . both companies share equally in the capital costs of the joint venture . the joint venture opened the first vince camuto outlet store in april 2011 and , as of january 31 , 2012 , 11 of these stores were in operation . we are accounting for our share of this joint venture under the equity method . 31 in november 2011 , we entered into a license agreement granting us the retail rights to distribute and market calvin klein women 's performance apparel in the united states and china . we opened our first calvin klein performance store in scottsdale , arizona in february 2012 and expect to open approximately 2 additional stores in the u.s. in fiscal 2013. in march 2012 , we entered into a joint venture agreement with finity apparel retail limited to open and operate calvin klein performance retail stores in china and hong kong . story_separator_special_tag gross profit increased to $ 370.7 million , or 30.1 % of net sales , for fiscal 2012 from $ 351.0 million , or 33.0 % of net sales , for fiscal 2011. the gross profit in our wholesale licensed product segment increased to $ 223.0 million , or 26.5 % of net sales , in fiscal 2012 from $ 213.6 million , or 29.7 % of net sales , in the prior year . the gross profit in our wholesale non-licensed product segment increased to $ 72.1 million in fiscal 2012 , or 26 % of net sales , from $ 70.5 million , or 28.9 % of net sales , in fiscal 2011. the gross profit in our retail operations segment increased to $ 75.6 million , or 46.0 % of net sales , for fiscal 2012 from $ 67.0 million , or 47.1 % of net sales , for fiscal 2011. we experienced significant increases in wholesale product costs during the year and were not always able to increase selling prices to offset cost increases . the gross margins in all three segments were impacted by promotional activity throughout the year and also by the unseasonably warm weather in our fourth fiscal quarter , which resulted in lower discounted initial selling prices and additional markdown support . selling , general and administrative expenses increased to $ 277.0 million in fiscal 2012 from $ 248.4 million in the prior year . selling , general and administrative expenses increased primarily as a result of increases in personnel costs ( $ 8.3 million ) , advertising and promotion expenses ( $ 7.2 million ) and third party warehousing costs ( $ 5.2 million ) . personnel costs increased primarily as a result of the addition of new product lines as well as an 36 increase in personnel to staff additional outlet stores in our retail division , offset in part by reduced bonus payments as a result of lower profitability . advertising costs increased because sales of licensed product increased and we typically pay an advertising fee under our license agreements based on a percentage of sales of licensed product . we also experienced an increase in advertising chargebacks by customers . third party warehousing costs increased as a result of our increased shipping volume as well as higher inventory balances compared to last year . depreciation and amortization increased to $ 7.5 million in fiscal 2012 from $ 5.7 million in the prior year primarily as a result of leasehold improvements and fixtures added during fiscal 2011 for the additional showroom and office space we leased . equity loss in joint venture of $ 1.3 million in fiscal 2012 represents our share of the loss in the joint venture relating to the operation of vince camuto outlet stores . as this joint venture commenced operations in the fourth quarter of fiscal 2011 , there is no amount for this item in the prior year . interest and finance charges , net for fiscal 2012 increased to $ 5.7 million from $ 4.0 million in the prior year . our interest charges were higher because of higher average borrowings under our credit facility , primarily as a result of higher inventory levels . income tax expense for fiscal 2012 decreased to $ 29.6 million from $ 36.2 million in the prior year . the effective rate for fiscal 2012 was 37.4 % compared to an effective tax rate for fiscal 2011 of 39.0 % . the effective tax rate is lower primarily due to foreign tax savings realized during the current period . year ended january 31 , 2011 ( “fiscal 2011” ) compared to year ended january 31 , 2010 ( “fiscal 2010” ) net sales for fiscal 2011 increased to $ 1.06 billion from $ 800.9 million in the prior year . net sales of wholesale licensed product accounted for 67.6 % of our net sales in fiscal 2011 compared to 65.4 % of our net sales in fiscal 2010. excluding net sales in the retail segment , net sales of wholesale licensed product accounted for 74.6 % of net sales of wholesale product in fiscal 2011 and 73.5 % of net sales of wholesale product in fiscal 2010. net sales of wholesale licensed product increased to $ 718.5 million in fiscal 2011 from $ 523.6 million in fiscal 2010. this increase was primarily the result of an increase of $ 143.6 million in net sales of calvin klein licensed product , primarily attributable to increased sales of dresses and women 's sportswear , as well as increased net sales of $ 19.9 million in guess outerwear and $ 16.2 million in kenneth cole outerwear . net sales of wholesale non-licensed product increased to $ 244.0 million in fiscal 2011 from $ 188.3 million in fiscal 2010 , primarily due to increased net sales of $ 32.1 million in private label outerwear , $ 12.9 million in our andrew marc products and $ 10.8 million in our jessica howard/eliza j dresses . net sales of our retail operations increased to $ 142.3 million in fiscal 2011 from $ 126.6 million in fiscal 2010 primarily as a result of various performance improvement initiatives we implemented beginning in fiscal 2010 and continued in fiscal 2011 , as well as an increase in the number of stores in fiscal 2011. net sales resulting from new stores opened in fiscal 2011 were approximately $ 5.7 million . gross profit increased to $ 351.0 million , or 33.0 % of net sales , for fiscal 2011 from $ 266.9 million , or 33.3 % of net sales , in the prior year . the gross profit in our wholesale licensed product segment increased to $ 213.6 million , or 29.7 % of net sales , for fiscal 2011 from $ 156.2 million , or 29.8 % of net sales , in the prior year . the gross profit in our wholesale non-licensed product

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our primary operating cash requirements are to fund our seasonal buildup in inventories and accounts receivable , primarily during the second and third fiscal quarters each year . due to the seasonality of our business , we generally reach our peak borrowings under our asset-based credit facility during our third fiscal quarter . the primary sources to meet our operating cash requirements have been borrowings under this credit facility and cash generated from operations . we also raised cash from an offering of our common stock in december 2009 as described below . we had a net debt position of $ 5.4 million at january 31 , 2012 compared to cash of $ 10.0 million at january 31 , 2011. public offering in december 2009 , we sold 1,907,010 shares of our common stock , including 207,010 shares sold pursuant to the exercise of the underwriters ' over-allotment option , at a public offering price of $ 19.50 per share . we received net proceeds of $ 34.7 million from this offering after payment of the underwriting discount and expenses of the offering . the net proceeds we received were used for general corporate purposes to support the growth of our business . financing agreement we have a financing agreement with jpmorgan chase bank , n.a. , as agent for a consortium of banks . the financing agreement is a senior secured revolving credit facility . the financing agreement was amended in may 2010 to ( a ) increase the maximum line of credit from $ 250 million to $ 300 million , ( b ) reduce the interest rate on borrowings by 0.25 % to , at our option , the prime rate plus 0.50 % or libor plus 2.75 % , ( c ) extend the maturity of the loan from july 11 , 2011 to july 31 , 2013 , and ( d ) revise the maximum senior leverage ratio that we must maintain . the financing agreement provides for a maximum revolving line of credit of $ 300 million . amounts available under the line are subject to borrowing base formulas and over advances as specified in the financing agreement .

forward-looking statements include , among other things , the information concerning our possible future results of operations , business and growth strategies , financing plans , expectations that regulatory developments or other matters will not have a material adverse effect on our business or financial condition , our competitive position and the effects of competition , the projected growth of the industry in which we operate , and the benefits and synergies to be obtained from our completed and any future acquisitions , and statements of our goals and objectives , and other similar expressions concerning matters that are not historical facts . words such as “ may , ” “ will , ” “ should , ” “ could , ” “ would , ” “ predicts , ” “ potential , ” “ continue , ” “ expects , ” “ anticipates , ” “ future , ” “ intends , ” “ plans , ” “ believes , ” “ estimates , ” “ appears , ” “ projects ” and similar expressions , as well as statements in future tense , identify forward-looking statements . in evaluating those statements , you should specifically consider various factors , including the risks related to healthcare industry trends and those set forth herein in item 1a . risk factors . those factors may cause our actual results to differ materially from any of our forward-looking statements . 43 forward-looking statements should not be read as a guarantee of future performance or results , and will not necessarily be accurate indications of the times at , or by which , such performance or results will be achieved . forward-looking information is based on information available at the time and or our good faith belief with respect to future events , and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements . such factors include , among other things , the following : our ability to comply with the existing laws and government regulations , and or changes in laws and government regulations ; an increasing number of legislative initiatives have been passed into law that may result in major changes in the health care delivery system on a national or state level . legislation has already been enacted that has eliminated the penalty for failing to maintain health coverage that was part of the original patient protection and affordable care act ( the “ legislation ” ) . president trump has already taken executive actions : ( i ) requiring all federal agencies with authorities and responsibilities under the legislation to “ exercise all authority and discretion available to them to waiver , defer , grant exemptions from , or delay ” parts of the legislation that place “ unwarranted economic and regulatory burdens ” on states , individuals or health care providers ; ( ii ) the issuance of a final rule in june , 2018 by the department of labor to enable the formation of association health plans that would be exempt from certain legislation requirements such as the provision of essential health benefits ; ( iii ) the issuance of a final rule in august , 2018 by the department of labor , treasury , and health and human services to expand the availability of short-term , limited duration health insurance , ( iv ) eliminating cost-sharing reduction payments to insurers that would otherwise offset deductibles and other out-of-pocket expenses for health plan enrollees at or below 250 percent of the federal poverty level ; ( v ) relaxing requirements for state innovation waivers that could reduce enrollment in the individual and small group markets and lead to additional enrollment in short-term , limited duration insurance and association health plans ; ( vi ) the issuance of a final rule in june , 2019 by the departments of labor , treasury , and health and human services that would incentivize the use of health reimbursement arrangements by employers to permit employees to purchase health insurance in the individual market , and ; ( vii ) directing the issuance of federal rulemaking by executive agencies to increase transparency of healthcare price and quality information . the uncertainty resulting from these executive branch policies has led to reduced exchange enrollment in 2018 , 2019 and 2020 and is expected to further worsen the individual and small group market risk pools in future years . it is also anticipated that these and future policies may create additional cost and reimbursement pressures on hospitals , including ours . in addition , while attempts to repeal the entirety of the legislation have not been successful to date , a key provision of the legislation was repealed as part of the tax cuts and jobs act and on december 14 , 2018 , a federal u.s. district court judge in texas ruled the entire legislation is unconstitutional . that ruling was stayed and has been appealed . on december 18 , 2019 , the 5 th circuit court of appeals voted 2-1 to strike down the legislation individual mandate as unconstitutional and sent the case back to the u.s. district court in texas to determine which legislation provisions should be stricken with the mandate or whether the entire law is unconstitutional without the individual mandate . it is likely this matter will ultimately be appealed to the u.s. supreme court . we are unable to predict the final outcome of this matter which has caused greater uncertainty regarding the future status of the legislation . if all or any parts of the legislation are ultimately found to be unconstitutional , it could have a material adverse effect on our business , financial condition and results of operations . story_separator_special_tag in implementing the discount policy , we first attempt to qualify uninsured patients for governmental programs , charity care or any other discount program . if an uninsured patient does not qualify for these programs , the uninsured discount is applied . uncompensated care ( charity care and uninsured discounts ) : the following table shows the amounts recorded at our acute care hospitals for charity care and uninsured discounts , based on charges at established rates , for the years ended december 31 , 2019 , 2018 and 2017 : replace_table_token_5_th 47 the estimated cost of providing uncompensated care : the estimated cost of providing uncompensated care , as reflected below , were based on a calculation which multiplied the percentage of operating expenses for our acute care hospitals to gross charges for those hospitals by the above-mentioned total uncompensated care amounts . the percentage of cost to gross charges is calculated based on the total operating expenses for our acute care facilities divided by gross patient service revenue for those facilities . an increase in the level of uninsured patients to our facilities and the resulting adverse trends in the adjustments to net revenues and uncompensated care provided could have a material unfavorable impact on our future operating results . replace_table_token_6_th self-insured/other insurance risks : we provide for self-insured risks including general and professional liability claims , workers ' compensation claims and healthcare and dental claims . our estimated liability for self-insured professional and general liability claims is based on a number of factors including , among other things , the number of asserted claims and reported incidents , estimates of losses for these claims based on recent and historical settlement amounts , estimate of incurred but not reported claims based on historical experience , and estimates of amounts recoverable under our commercial insurance policies . all relevant information , including our own historical experience is used in estimating the expected amount of claims . while we continuously monitor these factors , our ultimate liability for professional and general liability claims could change materially from our current estimates due to inherent uncertainties involved in making this estimate . our estimated self-insured reserves are reviewed and changed , if necessary , at each reporting date and changes are recognized currently as additional expense or as a reduction of expense . in addition , we also : ( i ) own commercial health insurers headquartered in reno , nevada , and puerto rico and ; ( ii ) maintain self-insured employee benefits programs for employee healthcare and dental claims . the ultimate costs related to these programs/operations include expenses for claims incurred and paid in addition to an accrual for the estimated expenses incurred in connection with claims incurred but not yet reported . given our significant insurance-related exposure , there can be no assurance that a sharp increase in the number and or severity of claims asserted against us will not have a material adverse effect on our future results of operations . see note 8 to the consolidated financial statements-commitments and contingencies , for additional disclosure related to our professional and general liability , workers ' compensation liability and property insurance . long-lived assets : we review our long-lived assets for impairment whenever events or circumstances indicate that the carrying value of these assets may not be recoverable . the assessment of possible impairment is based on our ability to recover the carrying value of our asset based on our estimate of its undiscounted future cash flow . if the analysis indicates that the carrying value is not recoverable from future cash flows , the asset is written down to its estimated fair value and an impairment loss is recognized . fair values are determined based on estimated future cash flows using appropriate discount rates . goodwill and intangible assets : goodwill and indefinite-lived intangible assets are reviewed for impairment at the reporting unit level on an annual basis or sooner if the indicators of impairment arise . our judgments regarding the existence of impairment indicators are based on market conditions and operational performance of each reporting unit . we have designated october 1 st as our annual impairment assessment date for our goodwill and indefinite-lived intangible assets . we performed an impairment assessment as of october 1 , 2019 which indicated no impairment of goodwill . there were also no goodwill impairments during 2018 or 2017. our 2019 and 2018 financial results included aggregate pre-tax provisions for asset impairments of $ 98 million and $ 49 million , respectively , recorded in connection with foundations recovery network , l.l.c . ( “ foundations ” ) , which was acquired by us in 2015. these pre-tax provisions for asset impairments include : ( i ) a $ 124 million impairment provision to write-off the carrying value of the foundations ' tradename intangible asset ( $ 75 million recorded during 2019 and $ 49 million recorded during 2018 ) , and ; ( ii ) a $ 23 million impairment provision recorded during 2019 to reduce the carrying value of real property assets of certain foundations ' facilities . please see below in provision for asset impairment-foundations recovery network for additional information . future changes in the estimates used to conduct the impairment review , including profitability and market value projections , could indicate impairment in future periods potentially resulting in a write-off of a portion or all of our goodwill or indefinite-lived intangible assets . income taxes : deferred tax assets and liabilities are recognized for the amount of taxes payable or deductible in future years as a result of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements . we 48 believe that future income will enable us to realize our deferred tax assets net of recorded valuation allowances relating to state and foreign net operating loss carry-forwards , foreign tax credits , and interest deduction limitations . on

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

net cash provided by operating activities net cash provided by operating activities was $ 1.275 billion during 2018 as compared to $ 1.248 billion during 2017. the net increase of $ 27 million was primarily attributable to the following : a favorable change of $ 91 million due to an increase in net income plus/minus depreciation and amortization expense , stock-based compensation , a net gain on sales of assets , and provision for intangible asset impairment ; an unfavorable change of $ 48 million in accrued and deferred income taxes ; a favorable change of $ 40 million in other working capital accounts resulting primarily from changes in accrued expenses and due to timing of disbursements ; an unfavorable change of $ 18 million in accounts receivable ; an unfavorable change of $ 7 million in accrued insurance expense , net of commercial premiums paid , and ; $ 30 million of other combined net unfavorable changes . net cash used in investing activities net cash used in investing activities was $ 747 million during 2018 and $ 685 million during 2017. the factors contributing to the $ 747 million of net cash used in investing activities during 2018 are detailed above . 2017 : the $ 685 million of net cash used in investing activities during 2017 consisted of : $ 557 million spent on capital expenditures including capital expenditures for equipment , renovations and new projects at various existing facilities ; $ 64 million spent in connection with net cash outflows from forward exchange contracts that hedge our investment in the u.k. against movements in exchange rates ; $ 29 million spent on the purchase and implementation of information technology applications ; $ 23 million spent to acquire businesses and property ; $ 8 million spent to fund construction costs of a new , jointly owned behavioral health care facility , and ; $ 3 million spent to increase the statutorily required capital reserves of our commercial insurance subsidiary . net cash used in financing activities net cash used in financing activities was $ 492 million during 2018 and $ 519 million during 2017. the factors contributing to the $ 492 million of net cash used in financing activities during 2018 are detailed above .

for additional information relating to the proposed merger please see our form 8-k filed on december 7 , 2010. further information concerning the proposed merger was included in a joint proxy statement/prospectus contained in the registration statement on form s-4 that was filed with the sec on february 4 , 2011. legislative and regulatory update we continue to actively pursue a regulatory strategy that improves customer service and reduces the lag between our investments in infrastructure and the recovery of those investments through various rate mechanisms . if our rate design approvals are not approved , we will continue to work cooperatively with our regulators , legislators and others to create a framework that is conducive to our business goals and the interests of our customers and shareholders . the dodd-frank wall street reform and consumer protection act ( dodd-frank act ) was enacted in july 2010 , representing an overhaul of the framework for regulation of united states financial markets . we are currently evaluating the provisions of the dodd-frank act and the potential impact that it may have on us . glossary of key terms 28 however , we believe that an aspect of the dodd-frank act which requires that various regulatory agencies , including the sec and the commodities futures trading commission , establish additional regulations for participating in financial markets for hedging certain risks inherent in our business , including commodity and interest rate risks , may be applicable to us . as a result , the costs of participating in financial markets for hedging certain risks may be increased as a result of the new legislation . we may also incur additional costs associated with our compliance with new regulations and anticipated additional reporting and disclosure obligations . for additional information on our regulatory strategy see item 1 , “ business ” under the caption “ regulatory planning ” . customer growth initiatives relative to recent years , we continue to see higher than normal rates of unemployment , depressed housing markets with high inventories , significantly reduced new home construction and a slow-down in new commercial development . as a result , we experienced slight customer losses in our distribution operations and retail energy operations segments throughout 2010. we have largely offset t his trend by implementing customer attrition mitigation strategies to retain existing customers at all of our utilities . we expect a similar environment to prevail throughout 2011. we use a variety of targeted marketing programs to attract new customers and to retain existing customers . these efforts include working to add residential customers , multifamily complexes and commercial customers who use natural gas for purposes other than space heating , as well as evaluating and launching new natural gas related programs , products and services to enhance customer growth , mitigate customer attrition and increase operating revenues . these programs generally emphasize natural gas as the fuel of choice for customers and seek to expand the use of natural gas through a variety of promotional activities . natural gas price volatility the volatility of natural gas commodity prices have a significant impact on our customer rates , our long-term competitive position against other energy sources and the ability of our wholesale services segment to capture value from location and seasonal spreads . during 2008 and 2009 , daily henry hub spot market prices for natural gas in the united states were extremely volatile . however , during 2010 , the volatility of natural gas prices was lower than it has been for the last few years as a result of a robust natural gas supply , the weak economy and ample storage . our natural gas acquisition strategy is designed to secure sufficient supplies of natural gas to meet the needs of our utility customers and to hedge gas prices to effectively manage costs , reduce price volatility and maintain a competitive advantage . additionally , our hedging strategies and physical natural gas supplies in storage enable us to reduce earnings risk exposure due to higher gas costs . it is possible that natural gas prices will remain low for an extended period based on current levels of excess supply relative to market demand for natural gas , in part due to abundant sources of new shale natural gas reserves and the lack of demand by commercial and industrial enterprises . however , as economic conditions improve the demand for natural gas may increase , natural gas prices could rise and higher volatility could return to the natural gas markets . capital market plan our capital market plan for the remainder of 2011 includes successfully completing offerings of approximately $ 1 billion in long-term debt and $ 1.4 billion in common stock to finance the proposed nicor merger and maintaining our solid investment-grade credit ratings . for additional information on our credit facility and our capital market plan see “ liquidity and capital resources ” under the caption “ cash flow from financing activities ” and “ short-term debt ” . see also note 7 to our consolidated financial statements . hedges changes in commodity prices subject a significant portion of our operations to earnings variability . our non-utility businesses principally use physical and financial arrangements to reduce the risks associated with both weather-related seasonal fluctuations in market conditions and changing commodity prices . these economic hedges may not qualify , or are not designated for , hedge accounting treatment . as a result , our reported earnings for the wholesale services and retail energy operations segments reflect changes in the fair values of certain derivatives . these values may change significantly from period to period and are reflected as gains or losses within our operating revenues or our oci for those derivative instruments that qualify and are designated as accounting hedges . seasonality the operating revenues and ebit of our distribution operations , retail energy operations and wholesale services segments are seasonal . story_separator_special_tag also contributing to the higher operating cash flows was the return of cash collateral requirements posted during 2008 due to unrealized hedge losses resulting from the dramatic decline in natural gas prices during the second half of 2008 and into 2009. cash collateral requirements decreased $ 200 million for our derivative financial instrument activities at sequent and southstar due to the change in hedge values as forward nymex curve prices shifted downward in 2009 and as positions settled . story_separator_special_tag width= `` 1 % `` > p-2 f2 senior unsecured bbb+ baa1 a- ratings outlook negative stable stable subsequent to the announcement of our proposed merger with nicor , s & p placed our long-term debt ratings and our a- corporate credit ratings on credit watch with negative implications . the primary reason for this change is the increased leverage we will assume to complete the proposed merger and the uncertainties that exist with the proposed merger . s & p 's rating for our commercial paper was affirmed a-2 . moody 's and fitch each affirmed stable outlooks for their ratings of our debt obligations based on our sufficient equity as part of the financing for the proposed merger . glossary of key terms 37 our credit ratings depend largely on our financial performance , and a downgrade in our current ratings , particularly below investment grade , could adversely affect our borrowing costs and significantly limit our access to the commercial paper market . in addition , we would likely be required to pay a higher interest rate in future financings , and our potential pool of investors and funding sources could decrease . merger financing agreements in december 2010 , we amended our existing credit facility to allow for the closing of the proposed merger with nicor . additionally , in december 2010 , we entered into a $ 1.05 billion bridge facility . the bridge facility may be used to partially finance the cash portion of our proposed merger with nicor and pay related fees and expenses in the event that permanent financing is not available at the time of the closing of the proposed merger . the bridge facility matures 364 days after funds are borrowed and any repaid amounts under the bridge facility may not be re-borrowed . the interest rate applicable to the bridge facility is the higher of ( i ) at our option , a floating base rate or a floating eurodollar rate , in each case , plus an applicable margin ranging from 0.5 % to 2.5 % based on our credit rating , and the applicable interest rate option , and subject to a 0.25 % increase for each 90 day period that elapses after the closing of the bridge facility or ( ii ) the highest interest rate we or any of our subsidiaries are paying on any similar facility . as of december 31 , 2010 , we had no outstanding borrowings under our bridge facility . we do not currently plan to draw on our bridge facility to fund the proposed merger with nicor , as we anticipate having more permanent financing in place subsequent to receipt of all regulatory approvals . default provisions our debt instruments and other financial obligations include provisions that , if not complied with , could require early payment , additional collateral support or similar actions . our credit facility contains customary events of default , including , but not limited to , the failure to pay any interest or principal when due , the failure to furnish financial statements within the timeframe established by each debt facility , the failure to comply with certain affirmative and negative covenants , cross-defaults to certain other material indebtedness in excess of specified amounts , incorrect or misleading representations or warranties , insolvency or bankruptcy , fundamental change of control , the occurrence of certain employee retirement income security act events , judgments in excess of specified amounts and certain impairments to the guarantee . our credit facility contains certain non-financial covenants that , among other things , restrict liens and encumbrances , loans and investments , acquisitions , dividends and other restricted payments , asset dispositions , mergers and consolidations and other matters customarily restricted in such agreements . our credit facility also includes a financial covenant that does not permit our ratio , on a consolidated basis , of total debt to total capitalization to exceed 70 % ( excluding for these purposes , debt incurred to partially refinance the bridge facility during the period prior to funding under the bridge facility ) at the end of any fiscal month . this ratio , as defined within our debt agreements , includes standby letters of credit , performance/surety bonds and the exclusion of other comprehensive income pension adjustments . adjusting for these items , our ratio , on a consolidated basis , of total debt to total capitalization was 58 % at december 31 , 2010 and 57 % at december 31 , 2009. as of december 31 , 2010 and 2009 , we were in compliance with all of our existing debt provisions and covenants , both financial and non-financial . additionally , our bridge facility and term loan facility each contain the same financial covenant and similar non-financial covenants and default provisions ; however , these are not effective until we draw under these facilities . our ratio , on a consolidated basis , of total debt to total capitalization is typically greater at the beginning of the heating season as we make additional short-term borrowings to fund our natural gas purchases and meet our working capital requirements . we intend to maintain our capitalization ratio in a target range of 50 % to 60 % . accomplishing this capital structure objective and maintaining sufficient cash flow are necessary to maintain attractive credit ratings . the components of our capital structure , as calculated from our consolidated statements of financial

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flow from investing activities our net cash used in investing activities consisted primarily of pp & e expenditures . the majority of our pp & e expenditures are within our distribution operations and energy investment segments . our estimated pp & e expenditures for 2011 and our actual pp & e expenditures incurred in 2010 , 2009 and 2008 are shown within the following categories and are presented in the table below . · base business – new construction and infrastructure improvements at our distribution operations segment · regulatory infrastructure programs – programs that update or expand our distribution systems and liquefied natural gas facilities to improve system reliability and meet operational flexibility and growth . these programs include the pipeline replacement program and stride at atlanta gas light and elizabethtown gas ' utility infrastructure enhancements program . · hampton roads – virginia natural gas ' pipeline project , which connects its northern and southern systems · magnolia project – pipelines which diversify our sources of natural gas by connecting our georgia service territory to the elba island lng terminal · natural gas storage – salt-dome cavern expansions at golden triangle storage and jefferson island · other – primarily includes information technology and building and leasehold improvements replace_table_token_25_th ( 1 ) estimated pp & e expenditures our pp & e expenditures were $ 510 million for the year ended december 31 , 2010 , compared to $ 476 million for the same period in 2009. this increase of $ 34 million or 7 % was primarily due to a $ 19 million increase in expenditures for the construction of the golden triangle storage natural gas storage facility , $ 26 million in expenditures for elizabethtown gas ' utility infrastructure enhancements program and $ 84 million in expenditures for stride and $ 38 million in other capital projects in distribution operations . this was offset by reduced expenditures of $ 133 million for the hampton roads and magnolia projects , for which construction was substantially completed in 2009. the higher capital expenditures were further offset by $ 73 million in proceeds from the disposition of assets .

to supplement new store openings , we continue to expand high performing stores , increasing the square footage in 8 existing stores in fiscal 2017 for an average increase in square footage of 39 % . in fiscal 2017 , comparable store sales increased 0.2 % , although footwear experienced a mid-single digit comparable store sales gain . for fiscal 2018 , comparable store sales are expected to increase in the low-single digit range . we expect overall gross margin rate to be relatively flat , although merchandise margin is expected to decline as we start to incur freight costs associated with our store-to-home and e-commerce initiatives . logistics and store occupancy expenses are expected to decrease as a percentage of net sales due to leverage gained from comparable store sales . we expect operating , selling and administrative expenses to increase as a percentage of net sales in fiscal 2018. this is primarily due to expenses associated with our e-commerce initiative , including on-going development costs , third party support costs , pre-launch website marketing and additions to our digital team . we also expect to continue to generate sufficient cash to enable us to expand and remodel our store base , to enable capital expenditures including technology upgrade projects and to repurchase our common stock under our stock repurchase program . comparable store net sales data for the periods presented reflects sales for our traditional format hibbett sports and sports additions stores open throughout the period and the corresponding period of the prior fiscal year . if a store remodel , relocation or expansion results in the store being closed for a significant period of time , its sales are removed from the comparable store base until it has been open a full 12 months . when we begin sales through our e-commerce channel , we will recognize these sales as a component of comparable store sales . 26 executive summary following is a highlight of our financial results over the last three fiscal years : replace_table_token_8_th during fiscal 2017 , hibbett opened 65 new stores and closed 31 underperforming stores , bringing the store base to 1,078 in 35 states as of january 28 , 2017. inventory on a per store basis at january 28 , 2017 decreased by 4.0 % compared to the prior fiscal year . hibbett ended fiscal 2017 with $ 39.0 million of available cash and cash equivalents on the consolidated balance sheet and full availability under its $ 80.0 million unsecured credit facilities . recent accounting pronouncements see note 2 of item 8 of this annual report on form 10-k for the fiscal year ended january 28 , 2017 , for information regarding recent accounting pronouncements . results of operations the following table sets forth the percentage relationship to net sales of certain items included in our consolidated statements of operations for the periods indicated . replace_table_token_9_th note : columns may not sum due to rounding . 27 fiscal 2017 compared to fiscal 2016 net sales . net sales increased $ 29.9 million , or 3.2 % , to $ 973.0 million for fiscal 2017 from $ 943.1 million for fiscal 2016. furthermore : · we opened 65 hibbett sports stores while closing 31 underperforming hibbett sports stores for net addition of 34 stores in fiscal 2017. stores not in the comparable store net sales calculation accounted for $ 28.1 million of the increase in net sales . we expanded , remodeled or relocated 10 high performing stores . store openings and closings are reported net of relocations . · comparable store net sales for fiscal 2017 increased 0.2 % compared to fiscal 2016. during fiscal 2017 , 941 stores were included in the comparable store sales comparison . comparable store net sales were driven by gains in footwear , offset by declines in apparel and equipment . significant increases were achieved in basketball and lifestyle footwear , while college apparel , women 's activewear , baseball equipment , football equipment and fitness equipment experienced declines . in fiscal 2017 , we saw an increase in average ticket and a slight decrease in items per transaction . gross profit . cost of goods sold includes the cost of inventory , occupancy costs for stores and occupancy and operating costs for our wholesale and logistics facility . gross profit was $ 338.6 million , or 34.8 % of net sales , in fiscal 2017 , compared with $ 332.7 million , or 35.3 % of net sales , in fiscal 2016. furthermore : · merchandise gross margin decreased as a percentage of net sales due to increased markdowns and promotional activity needed to liquidate seasonal and aged inventory , as well as the negative effect of product mix due to higher footwear sales . · wholesale and logistics expenses remained flat as a percentage of net sales for fiscal 2017. increased data processing costs associated with our omni-channel initiative were offset by a decrease in freight and shipping expenses . · store occupancy expense increased 16 basis points as a percentage of net sales mainly due to de-leverage associated with lower comparable sales . store operating , selling and administrative expenses . store operating , selling and administrative expenses were $ 222.8 million , or 22.9 % of net sales , for fiscal 2017 , compared with $ 203.7 million , or 21.6 % of net sales , for fiscal 2016. furthermore : · total salary and benefit costs increased 75 basis points as a percentage of net sales due to de-leverage associated with lower comparable store sales , the hiring of our e-commerce team and the hiring of it support related to our omni-channel initiative . story_separator_special_tag significant judgment is required in determining our effective tax rate and in evaluating our tax position and changes in estimates could materially impact our results of operations and financial position . we account for uncertain tax positions in accordance with asc subtopic 740-10. the application of income tax law is inherently complex . laws and regulations in this area are voluminous and are often ambiguous . as such , we are required to make many subjective assumptions and judgments regarding our income tax exposures . interpretations of and guidance surrounding income tax laws and regulations change over time . as such , changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of operations . see `` part ii , item 8 , consolidated financial statements note 9 – income taxes `` for additional detail on our uncertain tax positions . legal proceedings and claims . estimated amounts for claims that are probable and can be reasonably estimated are recorded as liabilities in the consolidated balance sheets . the likelihood of a material change in these estimated accruals is dependent on new claims as they may arise and the favorable or unfavorable outcome of particular litigation . as additional information becomes available , we assess the potential liability related to pending litigation and revise estimates as appropriate . such revisions in estimates of the potential liability could materially impact our results of operations and financial position . see `` risk factors . `` impairment of long-lived assets . we continually evaluate whether events and circumstances have occurred that indicate the remaining balance of long-lived assets may be impaired and not recoverable . our policy is to adjust the remaining useful life of depreciable assets and to recognize any impairment loss on long-lived assets as a charge to current income when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable . impairment is assessed considering the estimated undiscounted cash flows over the asset 's remaining life . if estimated cash flows are insufficient to recover the investment , an impairment loss is recognized based on a comparison of the cost of the asset to fair value less any costs of disposition . evaluation of asset impairment requires significant judgment and estimates . see `` risk factors . `` 34 stock-based compensation . we measure stock-based compensation for all share-based awards granted based on the estimated fair value of those awards at grant date . the cost of restricted stock units and performance-based restricted stock units is determined using the fair value of our common stock on the date of grant . we use the black-scholes valuation model to estimate the fair value at the date of grant for options granted under our equity incentive plans and stock purchase rights associated with the employee stock purchase plan . stock-based compensation is expensed over the service period of the awards . performance-based awards are expensed based on the probability of achievement of the underlying target , which is estimated and adjusted as financial results dictate during the performance period . the black-scholes valuation model requires the input of assumptions and estimates which are regularly evaluated and updated when applicable . these include estimating the length of time vested stock options will be retained before being exercised ( expected term ) , the estimated volatility of our common stock price over the expected term and the risk-free interest rate based on the annual continuously compounded risk-free rate with a term equal to the option 's expected term . in addition , we estimate the number of awards that will ultimately not complete their vesting requirements ( forfeitures ) . changes in these assumptions and estimates can materially affect the estimate of fair value of stock-based compensation and consequently , the related expense recognized on the consolidated statements of operations . our stock option grants have a life of up to ten years and are not transferable . therefore , the actual fair value of a stock option grant may be different from our estimates . we believe that our estimates incorporate all relevant information and represent a reasonable approximation in light of the difficulties involved in valuing non-traded stock options . leases . we lease all our stores and certain equipment , including transportation and office equipment . we evaluate each lease at inception to determine whether the lease will be accounted for as an operating or capital lease . the term of the lease used for this evaluation includes renewal option periods only in instances in which the exercise of the renewal option can be reasonably assured and failure to exercise such option would result in an economic penalty . the majority of our stores are operating leases . many of our operating lease agreements contain rent holidays , rent escalation clauses and or contingent rent provisions . we recognize rent expense on a straight-line basis over the expected lease term , including cancelable option periods where failure to exercise such options would result in an economic penalty . we use a time period for our straight-line rent expense calculation that equals or exceeds the time period used for depreciation on leasehold improvements . in addition , the commencement date of the lease term is the earlier of the date when we become legally obligated for the rent payments or the date when we take possession of the building for initial setup of fixtures and merchandise . we make judgments regarding the probable term for each lease , which can impact the classification and accounting for a lease as capital or operating , the escalations in payments that are taken into consideration when calculating straight-line rent and the term over which landlord allowances received are amortized . these judgments may produce materially different amounts of depreciation , amortization and rent expense than would be reported in a specific period if different assumed lease terms were used

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our capital requirements relate primarily to new store openings , stock repurchases , facilities and systems to support company growth and working capital requirements . our working capital requirements are somewhat seasonal in nature and typically reach their peak near the end of the third and the beginning of the fourth quarters of our fiscal year . historically , we have funded our cash requirements primarily through our cash flow from operations and occasionally from borrowings under our revolving credit facilities . due to the low interest rates currently available , we are using excess cash on deposit to offset bank fees versus investing such funds in an equity market or in interest-bearing deposits . our consolidated statements of cash flows are summarized as follows ( in thousands ) : replace_table_token_10_th operating activities . cash flow from operations is seasonal in our business . typically , we use cash flow from operations to increase inventory in advance of peak selling seasons , such as winter holidays , the spring sales period and late summer back-to-school shopping . inventory levels are reduced in connection with higher sales during the peak selling seasons and this inventory reduction , combined with proportionately higher net income , typically produces a positive cash flow . net cash provided by operating activities was $ 78.7 million for fiscal 2017 compared with net cash provided by operating activities of $ 58.5 million and $ 102.4 million in fiscal 2016 and fiscal 2015 , respectively . the increase in net cash provided by operating activities for fiscal 2017 compared to fiscal 2016 and fiscal 2015 was impacted by the following : · net income provided cash of $ 61.1 million , $ 70.5 million and $ 73.6 million during fiscal 2017 , fiscal 2016 and fiscal 2015 , respectively .

24 selling , general and administrative expenses , as a percentage of sales , increased 0.5 % to 18.2 % in fiscal 2016 from 17.7 % in fiscal 2015. selling , general and administrative expenses are , for the most part , more fixed in nature . in dollar terms , overall selling , general and administrative expenses increased $ 8.4 million from fiscal 2015 , which consisted primarily of increased payroll costs , incremental costs related to new dealerships and higher infrastructure costs to support our growth , primarily in technology and compliance . provision for credit losses as a percentage of sales increased to 28.5 % ( 27.6 % excluding the effect of the increase in the allowance for credit losses made in the second quarter ) for fiscal 2016 compared to 25.5 % for fiscal 2015. net charge-offs as a percentage of average finance receivables increased to 31.3 % for fiscal 2016 compared to 27.8 % for the prior year . continuing macro-economic challenges and competitive conditions continue to put pressure on our customers and the resulting collections of our finance receivables , although the lower gas prices during fiscal 2016 have provided some relief to our customers . the company has implemented several operational initiatives ( including credit reporting and the use of gps units on vehicles ) to improve collections and continually pushes for improvements and better execution of its collection practices . the company believes that the proper execution of its business practices is the single most important determinant of credit loss experience and that the negative impact on credit losses in both the current and prior year periods resulting from negative macro-economic and competitive pressures has been somewhat mitigated by the improvements in oversight and accountability provided by the company 's investments in our corporate infrastructure within the collections area . interest expense for fiscal 2016 as a percentage of sales increased slightly to 0.7 % compared to 0.6 % for fiscal 2015 , due to higher average borrowings during the fiscal year 2016 ( $ 109.0 million compared to $ 102.2 million in the prior year ) . 2015 compared to 2014 total revenues increased $ 41.1 million , or 8.4 % , in fiscal 2015 , as compared to revenue growth of 5.3 % in fiscal 2014 , principally as a result of ( i ) revenue growth from dealerships that operated a full twelve months in both fiscal years ( $ 13.7 million ) , ( ii ) revenue growth from dealerships opened during the fiscal year ended april 30 , 2014 ( $ 20.4 million ) , and ( iii ) revenue from dealerships opened after april 30 , 2014 ( $ 7.0 million ) . the increase in revenue for fiscal 2015 is attributable to ( i ) a 9.9 % increase in retail unit volumes , and ( ii ) a 5.6 % increase in interest and other income . cost of sales , as a percentage of sales , remained flat at 57.7 % in fiscal 2015 from 57.8 % in fiscal 2014. the average retail sales price for fiscal 2015 was $ 9,680 , an $ 88 decrease over the prior fiscal year . average selling prices and top line sales levels in relation to wholesale volumes , resulting from credit loss experience , can have a significant effect on gross margin percentages . selling , general and administrative expenses , as a percentage of sales , decreased 0.4 % to 17.7 % in fiscal 2015 from 18.1 % in fiscal 2014. in dollar terms , overall selling , general and administrative expenses increased $ 5.2 million from fiscal 2014 , which consisted primarily of increased payroll costs , incremental costs related to new dealerships and higher infrastructure costs to support our growth , primarily in technology and compliance . provision for credit losses as a percentage of sales decreased to 25.5 % for fiscal 2015 compared to 27.4 % ( 25.7 % excluding the effect of the increase in the allowance for credit losses made in the third quarter ) for fiscal 2014. net charge-offs as a percentage of average finance receivables were 27.8 % for fiscal 2015 compared to 28.2 % for the prior year . the decrease primarily resulted from a lower frequency of losses , partially offset by an increase in the severity of losses . the higher severity of losses primarily resulted from lower wholesale values at time of repossession . 25 interest expense for fiscal 2015 as a percentage of sales decreased slightly to 0.6 % compared 0.7 % for fiscal 2014. lower average borrowings during the fiscal year 2015 ( $ 102.2 million compared to $ 103.0 million in the prior year ) were partially offset by higher interest rates on the company 's variable rate debt . financial condition the following table sets forth the major balance sheet accounts of the company at april 30 , 2016 , 2015 and 2014 ( in thousands ) : replace_table_token_7_th the following table shows receivables growth compared to revenue growth during each of the past three fiscal years . for fiscal year 2016 , revenue growth exceeded growth in net finance receivables primarily due to higher charge-offs and the resulting increase in wholesale sales , which weighed on finance receivables growth , while higher interest income augmented growth in revenue . the company currently anticipates going forward that the growth in finance receivables will generally be slightly higher than overall revenue growth on an annual basis due to overall term length increases partially offset by improvements in underwriting and collection procedures in an effort to reduce credit losses . the average term for installment sales contracts at april 30 , 2016 was 31.6 months compared to 30.2 months at april 30 , 2015. replace_table_token_8_th in fiscal 2016 , inventory decreased 12.8 % ( $ 4.4 million ) . story_separator_special_tag these negative macro-economic conditions have continued to affect our customers in the years since the recession and , in turn , have helped keep demand high for the types of vehicles we purchase . this increased demand , coupled with depressed levels of new vehicle sales in recent years , negatively impacted both the quality and the quantity of the used vehicle supply available to the company . management expects the tight supply of vehicles and resulting increases in vehicle purchase costs to continue , although some relief is expected as a result of steady increases in new car sales levels in recent periods . the company has devoted significant efforts to improving its purchasing processes to ensure adequate supply at appropriate prices , including expanding its purchasing territories to larger cities in close proximity to its dealerships and increasing its efforts to purchase vehicles from individuals at the dealership level as well as via the internet . the company has also increased the level of accountability for its purchasing agents including the establishment of sourcing and pricing guidelines . even with these efforts , the company expects gross margin percentages to remain under pressure over the near term . the company believes that the amount of credit available for the sub-prime auto industry has increased in recent years and management expects the availability of consumer credit within the automotive industry to be higher over the near term when compared to historical levels . this is expected to contribute to continued strong overall demand for most , if not all , of the vehicles the company purchases for resale . increased competition resulting from availability of funding to the sub-prime auto industry has contributed to lower down payments and longer terms , which have had a negative effect on collection percentages , liquidity and credit losses when compared to prior periods . macro-economic factors can have an effect on credit losses and resulting liquidity . general inflation , particularly within staple items such as groceries , as well as overall unemployment levels can have a significant effect on collection results and ultimately credit losses . the company has made improvements to its business processes within the last few years to strengthen controls and provide stronger infrastructure to support its collections efforts . the company anticipates that credit losses in the near term will be higher than historical ranges due to significant continued macro-economic challenges for the company 's customer base as well as increased competitive pressures . management continues to focus on improved execution at the dealership level , specifically as related to working individually with customers concerning collection issues . 29 the company has generally leased the majority of the properties where its dealerships are located . as of april 30 , 2016 , the company leased approximately 85 % of its dealership properties . the company expects to continue to lease the majority of the properties where its dealerships are located . the company 's revolving credit facilities generally restrict distributions by the company to its shareholders . the distribution limitations under the credit facilities allow the company to repurchase the company 's stock so long as : either ( a ) the aggregate amount of such repurchases does not exceed $ 40 million beginning october 8 , 2014 and the sum of borrowing bases combined minus the principal balances of all revolver loans after giving effect to such repurchases is equal to or greater than 30 % of the sum of the borrowing bases , or ( b ) the aggregate amount of such repurchases does not exceed 75 % of the consolidated net income of the company measured on a trailing twelve month basis ; provided that immediately before and after giving effect to the stock repurchases , at least 12.5 % of the aggregate funds committed under the credit facilities remain available . thus , although the company currently does routinely repurchase stock , the company is limited in its ability to pay dividends or make other distributions to its shareholders without the consent of the company 's lenders . at april 30 , 2016 , the company had approximately $ 602,000 of cash on hand and $ 61 million of availability under its revolving credit facilities ( see note f to the consolidated financial statements in item 8 ) . on a short-term basis , the company 's principal sources of liquidity include income from operations and borrowings under its revolving credit facilities . on a longer-term basis , the company expects its principal sources of liquidity to consist of income from operations and borrowings under revolving credit facilities or fixed interest term loans . the company 's revolving credit facilities mature in october 2017 and the company expects that it will be able to renew or refinance its revolving credit facilities on or before the date they mature . furthermore , while the company has no specific plans to issue debt or equity securities , the company believes , if necessary , it could raise additional capital through the issuance of such securities . the company expects to use cash from operations and borrowings to ( i ) grow its finance receivables portfolio , ( ii ) purchase property and equipment of approximately $ 2.2 million in the next 12 months in connection with refurbishing existing dealerships and adding new dealerships , subject to strong operating results , ( iii ) repurchase shares of common stock when favorable conditions exist and ( iv ) reduce debt to the extent excess cash is available . the company believes it will have adequate liquidity to continue to grow its revenues and to satisfy its capital needs for the foreseeable future . contractual payment obligations the following is a summary of the company 's contractual payment obligations as of april 30 , 2016 , including renewal periods under operating leases that are reasonably assured ( in thousands ) : replace_table_token_10_th the above excludes estimated interest payments

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

debt issuance costs . in april 2015 , the fasb issued asu 2015-03 , simplifying the presentation of debt issuance costs , to require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability , consistent with debt discounts , instead of as an asset . this accounting standard was implemented by the company in the third quarter of fiscal 2016. as a result of the application of this accounting standard , the company has provided additional disclosures in note f to the consolidated financial statements . 32 revenue recognition . in may 2014 , the fasb issued accounting standards update ( “ asu ” ) 2014-09 , revenue from contracts with customers ( topic 606 ) , which supersedes existing revenue recognition guidance . the new guidance in asu 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services . asu 2014-09 also requires additional disclosure about the nature , amount , timing and uncertainty of revenue and cash flows arising from customer contracts , including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract .

during 2018 , we entered into five separate interest rate swaps with rabobank with a total notional amount of $ 200.0 million to mitigate exposure to changing interest rates on our variable rate debts . as of december 31 , 2018 , we effectively fixed interest rates on $ 350.0 million of our $ 478.6 million outstanding debt balance at 4.26 % . see note 6 — interest rate swaps to our accompanying financial statements footnotes for further details on our interest rate swaps . during 2018 , we paid $ 25.6 million of dividends to our stockholders and repurchased $ 1.0 million of shares of common stock under our share purchase program . segment information we have three reportable segments : harvest , real estate and investment management . our harvest segment includes wholly-owned timber assets and associated timber sales , other revenues and related expenses . our real estate segment includes timberland sales , cost of timberland sales and large dispositions . our investment management segment includes investments in and income ( loss ) from unconsolidated joint ventures and asset management fee revenues earned for the management of these joint ventures . general and administrative expenses , along with other expense and income items , are not allocated among segments . for additional information , see note 15 - segment information to our accompanying consolidated financial statements . timber agreements a substantial portion of our timber sales is derived from the mahrt timber agreements under which we sell specified amounts of timber to westrock subject to market pricing adjustments . during the year ended december 31 , 2018 , westrock purchased approximately 479,000 tons under the mahrt timber agreements , which exceeded the minimum requirement of 408,000 tons . for each of the years ended december 31 , 2018 , 2017 and 2016 , approximately 17 % of our net timber sales revenue was derived from the mahrt timber agreements . see note 7 — commitments and contingencies to our accompanying consolidated financial statements for additional information regarding the material terms of the mahrt timber agreements . in connection with the carolinas midlands iii transaction that closed in june 2016 , we assumed the carolinas supply agreement which requires us to harvest and sell agreed-upon pulpwood volumes to ip , and ip is required to purchase such volume at defined market prices . during the year ended december 31 , 2018 , we sold approximately 145,000 tons under the carolinas supply agreement , which exceeded the 137,000 tons requirement . for the year ended december 31 , 2018 , approximately 5 % of our net timber sales revenue was derived from the carolinas supply agreement . general economic conditions and timber market factors impacting our business our operating results are influenced by a variety of factors , including timber prices ; the demand for pulp and paper products , lumber , panel , and other wood-related products ; the supply of timber ; and competition . timber prices can experience significant variations and have been historically volatile . the demand for timber and wood products is affected primarily by the level of new residential construction activity , repair and remodeling activity , the supply of manufactured timber products including imports , and , to a lesser extent , other commercial and industrial uses . the demand for timber also is affected by the demand for wood chips in the pulp and paper markets and for hardwood in the furniture and other hardwood industries . 37 the u.s. economy continued to improve in 2018 , finishing the tenth year of expansion . according to the u.s. bureau of economic analysis , the real gross domestic product increased 2.9 % in 2018 , up from a 2.2 % in 2017. housing supply lagged in 2018. in december 2018 , the u.s. census bureau estimated privately-owned housing starts to be 1.1 million for 2018 , 10.9 % below the 2017 level as estimated in december 2017. the supply of existing homes continued to tighten in 2018 and stayed below the long-term equilibrium level . demand for housing is expected to increase over the next few years due to stronger economic growth , pent-up demand , and improved demographics . according to the joint center for housing studies of harvard university , the total baseline demand for new housing in 2018-2028 is projected to be 15.1 million additional units , averaging 1.5 million units per year , well exceeding the current level of housing starts . we believe that the housing market will show modest improvement in 2019. previously announced capital improvements and expansions of mills in our regions are beginning to pay off with improved production levels and demand for our products , however , the surplus log inventory in the southern market will likely not allow for significant improvement in the south-wide average sawtimber pricing . we expect our 2019 harvest volumes to be up slightly from 2018 and our pulpwood and sawtimber prices to remain steady or improve modestly . we will continue to build on market and business diversity and leverage our relationships in key markets to garner additional quota and delivery opportunities . liquidity and capital resources overview cash flows generated from our operations are primarily used to fund recurring expenditures and distributions to our stockholders . the amount of distributions to common stockholders is determined by our board of directors and is dependent upon a number of factors , including funds deemed available for distribution based principally on our current and future projected operating cash flows , less capital requirements necessary to maintain our existing timberland portfolio . story_separator_special_tag other operating expenses increased to $ 6.3 million for the year ended december 31 , 2018 from $ 5.3 million for the year ended december 31 , 2017 , primarily as a result of a $ 0.4 million increase in cost basis removed related to expired leases and timber reservations , a $ 0.3 million increase in replanting costs on leased tracts , and a $ 0.3 million increase in road maintenance expenses . interest expense . interest expense increased to $ 16.3 million for the year ended december 31 , 2018 from $ 11.2 million for the year ended december 31 , 2017 primarily due to a $ 5.3 million net increase in interest and unused commitment fees on our variable rate debt , and a $ 1.7 million write-off of deferred financing costs due to debt repayment and the amendment of our credit agreement in august 2018 , offset by a $ 0.6 million decrease in interest rate swap payments and a $ 1.0 million increase in accrued patronage dividends . interest on outstanding debt increased primarily due to a 23 % increase in our weighted-average outstanding debt balance and higher libor rates . the higher average debt balance was mainly a result of borrowing $ 200.0 million to fund our investment in the triple t joint venture . see note 5 – notes payable and lines of credit to our accompanying consolidated financial statements for additional information regarding patronage refunds and the 2018 amended credit agreement . income ( loss ) from unconsolidated joint ventures . for the year ended december 31 , 2018 , we recognized $ 2.6 million of income from the dawsonville bluffs joint venture , which represents our portion of the joint venture 's net income of $ 5.3 million , generated primarily through the sale of hbu timberland and mitigation bank credits . for the year ended december 31 , 2018 , we recognized a $ 109.6 million loss from the triple t joint venture under the hlbv method of accounting . we expect the dawsonville bluffs joint venture will continue to generate earnings and cash flow over the near term as we continue to monetize this finite-life , $ 10.0 million investment . under hlbv , we anticipate incurring losses from the unconsolidated triple t joint venture equal to our book basis in the near term . net loss . our net loss increased to $ 122.0 million for the year ended december 31 , 2018 from $ 13.5 million for the year ended december 31 , 2017 primarily due to the $ 109.6 million loss allocated from the triple t joint venture , and a $ 5.1 million increase in interest expense , offset by a $ 4.9 million increase in operating income . our net loss per share for the years ended december 31 , 2018 and 2017 was $ 2.55 and $ 0.34 , respectively . we anticipate future net income or losses to fluctuate with timber prices , harvest volumes and mix , depletion rates , timberland sales , the performance of our joint ventures and interest expense based on our level and costs of current and future borrowings . comparison of the year ended december 31 , 2017 versus the year ended december 31 , 2016 revenues . revenues increased to $ 91.3 million for the year ended december 31 , 2017 from $ 81.9 million for the year ended december 31 , 2016 primarily due to an increase in timber sales revenue of $ 6.3 million and an increase in timberland sales revenue of $ 2.3 million , and an increase in other revenues of $ 0.9 million . gross timber sales revenue increased by 10 % , mainly due to a 6 % increase in harvest volume as well as an increase in delivered sales as a percentage of total volume . 74 % of our 2017 harvest volume came from delivered sales as compared to 64 % in 2016. details of timber sales by product for the years ended december 31 , 2016 and 2017 are shown in the following table : 46 replace_table_token_15_th ( 1 ) timber sales are presented on a gross basis . ( 2 ) includes chip-n-saw and sawtimber . ( 3 ) changes in timber sales revenue related to properties acquired or disposed within the last 12 months are attributed to volume change . timberland sales revenue increased to $ 14.8 million in 2017 from $ 12.5 million in 2016 as we sold more acres in 2017 at a higher sales price per acre . other revenues increased to $ 5.2 million in 2017 from $ 4.3 million due to $ 0.4 million of lease termination revenue received for terminating 1,100 acres of long-term timber leases and higher hunting lease income as result of prior year acquisitions . operating expenses . contract logging and hauling costs increased to $ 31.1 million for the year ended december 31 , 2017 from $ 25.9 million for the year ended december 31 , 2016 , an increase of 20 % , primarily as a result of a 22 % increase in delivered sales volume . depletion expense for 2017 was $ 29.0 million , comparable to 2016 , as a result of a 6 % increase in harvest volume offset by lower blended depletion rates . other operating expenses increased to $ 5.3 million for the year ended december 31 , 2017 from $ 5.0 million for the year ended december 31 , 2016 , primarily as a result of increases in property taxes due to having more acres under management . forestry management expenses increased to $ 6.8 million for the year ended december 31 , 2017 from $ 6.1 million for the year ended december 31 , 2016 due to increases in third-party manager costs as well as in operational staff compensation costs , reflecting the additional resources dedicated to managing a growing portfolio . general and administrative expenses

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

debt covenants the 2018 amended credit agreement contains , among others , the following financial covenants which : limit the ltv ratio to ( i ) 50 % at any time prior to the last day of the fiscal quarter corresponding to december 1 , 2021 , and ( ii ) 45 % at any time thereafter ; require that we maintain a fccr of not less than 1.05:1:00 ; require maintenance of a minimum liquidity balance of no less than $ 25.0 million at any time ; and limit the aggregate capital expenditures to 1 % of the value of the timberlands during any fiscal year . we were in compliance with the financial covenants of the 2018 amended credit agreement as of december 31 , 2018 . share repurchase program on august 7 , 2015 , our board of directors approved a share repurchase program for up to $ 30.0 million of our common stock at management 's discretion ( the `` srp '' ) . the program has no set duration and the board may discontinue or suspend the program at any time . during the year ended december 31 , 2018 , we repurchased 98,459 shares of our common stock at an average price of $ 10.16 per share for a total of approximately $ 1.0 million under the srp . all common stock purchases under the srp were made in open-market transactions and were funded with cash on-hand . as of december 31 , 2018 , we had 49.1 million shares of common stock outstanding and may repurchase up to an additional $ 18.7 million under the srp . we can borrow up to $ 30.0 million under the multi-draw term facility to repurchase our common stock . management believes that opportunistic repurchases of our common stock are a prudent use of capital resources . short-term liquidity and capital resources for the year ended december 31 , 2018 , net cash provided by operating activities was $ 29.8 million , a $ 2.4 million increase from the year ended december 31 , 2017 .

we evaluate each contingent payment on an individual basis to determine whether they are considered substantive milestones , specifically reviewing factors such as the degree of certainty in achieving the milestone , the research and development risk and other risks that must be overcome to achieve the milestone , as well as the level of effort and investment required and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement . this evaluation includes an assessment of whether ( a ) the consideration is commensurate with either ( 1 ) the entity 's performance to achieve the milestone , or ( 2 ) the enhancement of the value of the delivered item ( s ) as a result of a specific outcome resulting from the entity 's performance to achieve the milestone , ( b ) the consideration relates solely to past performance and ( c ) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement . revenues from milestones , if they are nonrefundable and deemed substantive , are recognized upon achievement of the milestones . to the extent that non-substantive milestones are achieved , and we have remaining deliverables , milestone payments are deferred and recognized as revenue over the estimated remaining performance period using the appropriate measure of progress as determined for each agreement . we recognize revenue associated with the non-substantive milestones upon achievement of the milestone if we have no remaining deliverables . during the years ended november 30 , 2019 , no milestone payments were received , no milestone revenues were recognized and no milestones were considered substantive . effective december 1 , 2019 , we adopted topic 606 , revenue from contracts with customers using the modified retrospective method , which was only applied to contracts that were not completed as of the adoption date . as of the adoption date , we had only one contract , a collaboration agreement with gilead , not completed . under topic 606 , we recognize revenue when its customer obtains control of promised goods or services , in an amount that reflects the consideration which we expect to receive in exchange for those goods or services . to determine revenue recognition for arrangements that we determine are within the scope of topic 606 , we perform the following five steps : ( i ) identify the contract ( s ) with a customer ; ( ii ) identify the performance obligations in the contract ; ( iii ) determine the transaction price ; ( iv ) allocate the transaction price to the performance obligations in the contract ; and ( v ) recognize revenue when ( or as ) we satisfy a performance obligation . 102 at contract inception , we assess the goods or services promised within each contract , whether each promised good or service is distinct , and determines those that are performance obligations . we then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied . we enter into collaboration agreements under which we may obtain upfront payments , milestone payments , royalty payments and other fees . promises under these arrangements may include research licenses , research services , including selection campaign research services for certain replacement targets , the obligation to share information during the research and the participation of alliance managers and in joint research committees , joint patent committees and joint steering committees . we assess these promises within the context of the agreements to determine the performance obligations . research and collaboration licenses : if a license is determined to be distinct from the other promises identified in the arrangement , we recognize revenue from upfront payments allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license . for licenses that are bundled with other promises , we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and , if over time , the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable , upfront payments . we evaluate the measure of proportional performance each reporting period and , if necessary , adjusts the measure of performance and related revenue recognition . milestone payments : at the inception of each arrangement that includes research , development , or regulatory milestone payments , we evaluate whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price . we use the most likely amount method for research , development and regulatory milestone payments . under the most likely amount method , an entity considers the single most likely amount in a range of possible consideration amounts . if it is probable that a significant revenue reversal would not occur , the associated milestone amount is included in the transaction price . sales-based milestones and royalties : for arrangements that include sales-based milestone or royalty payments based on the level of sales , and in which the license is deemed to be the predominant item to which the sales-based milestone or royalties relate to , we recognize revenue in the period in which the sales-based milestone is achieved and in the period in which the sales associated with the royalty occur . to date , we have not recognized any sales-based milestone or royalty revenue resulting from our collaboration arrangements . customer options : customer options , such as options granted to allow a licensee to extend a license or research term , to select additional research targets or to choose to research , develop and commercialize licensed compounds are evaluated at contract inception to determine whether those options provide a material right ( story_separator_special_tag we evaluate each contingent payment on an individual basis to determine whether they are considered substantive milestones , specifically reviewing factors such as the degree of certainty in achieving the milestone , the research and development risk and other risks that must be overcome to achieve the milestone , as well as the level of effort and investment required and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement . this evaluation includes an assessment of whether ( a ) the consideration is commensurate with either ( 1 ) the entity 's performance to achieve the milestone , or ( 2 ) the enhancement of the value of the delivered item ( s ) as a result of a specific outcome resulting from the entity 's performance to achieve the milestone , ( b ) the consideration relates solely to past performance and ( c ) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement . revenues from milestones , if they are nonrefundable and deemed substantive , are recognized upon achievement of the milestones . to the extent that non-substantive milestones are achieved , and we have remaining deliverables , milestone payments are deferred and recognized as revenue over the estimated remaining performance period using the appropriate measure of progress as determined for each agreement . we recognize revenue associated with the non-substantive milestones upon achievement of the milestone if we have no remaining deliverables . during the years ended november 30 , 2019 , no milestone payments were received , no milestone revenues were recognized and no milestones were considered substantive . effective december 1 , 2019 , we adopted topic 606 , revenue from contracts with customers using the modified retrospective method , which was only applied to contracts that were not completed as of the adoption date . as of the adoption date , we had only one contract , a collaboration agreement with gilead , not completed . under topic 606 , we recognize revenue when its customer obtains control of promised goods or services , in an amount that reflects the consideration which we expect to receive in exchange for those goods or services . to determine revenue recognition for arrangements that we determine are within the scope of topic 606 , we perform the following five steps : ( i ) identify the contract ( s ) with a customer ; ( ii ) identify the performance obligations in the contract ; ( iii ) determine the transaction price ; ( iv ) allocate the transaction price to the performance obligations in the contract ; and ( v ) recognize revenue when ( or as ) we satisfy a performance obligation . 102 at contract inception , we assess the goods or services promised within each contract , whether each promised good or service is distinct , and determines those that are performance obligations . we then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied . we enter into collaboration agreements under which we may obtain upfront payments , milestone payments , royalty payments and other fees . promises under these arrangements may include research licenses , research services , including selection campaign research services for certain replacement targets , the obligation to share information during the research and the participation of alliance managers and in joint research committees , joint patent committees and joint steering committees . we assess these promises within the context of the agreements to determine the performance obligations . research and collaboration licenses : if a license is determined to be distinct from the other promises identified in the arrangement , we recognize revenue from upfront payments allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license . for licenses that are bundled with other promises , we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and , if over time , the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable , upfront payments . we evaluate the measure of proportional performance each reporting period and , if necessary , adjusts the measure of performance and related revenue recognition . milestone payments : at the inception of each arrangement that includes research , development , or regulatory milestone payments , we evaluate whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price . we use the most likely amount method for research , development and regulatory milestone payments . under the most likely amount method , an entity considers the single most likely amount in a range of possible consideration amounts . if it is probable that a significant revenue reversal would not occur , the associated milestone amount is included in the transaction price . sales-based milestones and royalties : for arrangements that include sales-based milestone or royalty payments based on the level of sales , and in which the license is deemed to be the predominant item to which the sales-based milestone or royalties relate to , we recognize revenue in the period in which the sales-based milestone is achieved and in the period in which the sales associated with the royalty occur . to date , we have not recognized any sales-based milestone or royalty revenue resulting from our collaboration arrangements . customer options : customer options , such as options granted to allow a licensee to extend a license or research term , to select additional research targets or to choose to research , develop and commercialize licensed compounds are evaluated at contract inception to determine whether those options provide a material right (

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows the following table summarizes our cash flows during the periods indicated : replace_table_token_4_th operating activities net cash used in operating activities was $ 0.1 million for the year ended november 30 , 2020 and consisted of a decrease in net assets of $ 36.4 million and non-cash adjustments of $ 6.8 million , offset by our net loss of $ 43.2 million . the decrease in net assets consisted primarily of an increase in deferred revenue of $ 48.2 million related to proceeds received pursuant to the sanofi agreement and offset by revenue recognized pursuant to the sanofi agreement and the gilead agreement . the decrease in net assets was offset by an increase in contract assets of $ 7.5 related to unbilled revenue for gilead milestones and an increase in income tax receivables of $ 3.9 million related to nol carryback claims as a result of the cares act . non-cash adjustments primarily consisted of stock-based compensation expenses of $ 4.3 million and depreciation and amortization expenses of $ 2.2 million . net cash provided by operating activities was $ 0.6 million for the year ended november 30 , 2019 and consisted of a decrease in net assets of $ 19.5 million and non-cash adjustments of $ 2.8 million , offset by our net loss of $ 21.7 million . the decrease in net assets consisted primarily of an increase in deferred revenue of $ 16.9 million related to $ 48.0 million in proceeds received pursuant to the gilead agreement and offset by $ 31.1 million in revenue recognized pursuant to the celgene agreement and the gilead agreement and an increase in accrued and other liabilities of $ 2.4 million primarily related to an increase in accrued compensation from higher incentive compensation .

in order to increase our aum and expand our business , we must develop and market investment strategies that suit the investment needs of our target clients , and provide attractive returns over the long-term . the value and composition of our aum , and our ability to continue to attract clients , will depend on a variety of factors including , among other things : our ability to educate our target clients about our classic value investment strategies and provide them with exceptional client service ; the relative investment performance of our investment strategies , as compared to competing products and market indices ; competitive conditions in the investment management and broader financial services sectors ; general economic conditions ; investor sentiment and confidence ; and our decision to close strategies when we deem it to be in the best interests of our clients . for our institutional accounts , we are paid fees according to a schedule , which varies by investment strategy . the substantial majority of these accounts pay us management fees pursuant to a schedule in which the rate we earn on the aum declines as the amount of aum increases . 23 pursuant to our sub-investment advisory agreements with our retail clients , we are generally paid a management fee according to a schedule in which the rate we earn on the aum declines as the amount of aum increases . certain of these funds pay us fixed-rate management fees . due to the substantially larger account size of certain of these accounts , the average advisory fees we earn on them , as a percentage of aum , are lower than the advisory fees we earn on our institutional accounts . certain of our clients pay us fees according to the performance of their accounts relative to certain agreed-upon benchmarks , which results in a lower base fee , but allows us to earn higher fees if the relevant investment strategy outperforms the agreed-upon benchmark . the majority of advisory fees we earn on institutional accounts is based on the value of our aum at a specific date on a quarterly basis , either in arrears or advance . advisory fees on certain of our institutional accounts , and with respect to all of our retail accounts , are calculated based on the average of the monthly or daily market value . advisory fees are also generally adjusted for any cash flows into or out of a portfolio , where the cash flow represents greater than 10 % of the value of the portfolio . while a specific group of accounts may use the same fee rate , the method used to calculate the fee according to the fee rate schedule may differ as described above . our advisory fees may fluctuate based on a number of factors , including the following : changes in aum due to appreciation or depreciation of our investment portfolios , and the levels of the contribution and withdrawal of assets by new and existing clients ; distribution of aum among our investment strategies , which have differing fee schedules ; distribution of aum between institutional accounts and retail accounts , for which we generally earn lower overall advisory fees ; and the level of our performance with respect to accounts on which we are paid performance fees . expenses our expenses consist primarily of compensation and benefits expense , as well as general and administrative expense . our largest expense is compensation and benefits , which includes the salaries , bonuses , equity-based compensation , and related benefits and payroll costs attributable to our employee members and employees . compensation and benefits packages are benchmarked against relevant industry and geographic peer groups in order to attract and retain qualified personnel . general and administrative expense includes office rent and other expenses , professional and outside services fees , depreciation , and the costs associated with operating and maintaining our research , trading , and portfolio accounting systems . our occupancy-related costs and professional services expenses , in particular , generally increase or decrease in relative proportion to the overall size and scale of our business operations . we incur additional expenses associated with being a public company for , among other things , director and officer insurance , director fees , sec reporting and compliance ( including sarbanes-oxley and dodd-frank compliance ) , professional fees , transfer agent fees , and other similar expenses . our expenses may fluctuate due to a number of factors , including the following : variations in the level of total compensation expense due to , among other things , bonuses , awards of equity to our employees and employee members of our operating company , changes in our employee count and mix , and competitive factors ; and general and administrative expenses , such as rent , professional service fees and data-related costs , incurred , as necessary , to run our business . other income/ ( expense ) other income/ ( expense ) is derived primarily from investment income or loss arising from our consolidated subsidiaries , income or loss generated by our investments in third-party mutual funds , and interest income generated on our cash balances . other income/ ( expense ) is also affected by changes in our estimates of the liability due to our selling and converting shareholders associated with payments owed to them under the tax receivable agreement which was executed in connection with our reorganization and initial public offering on october 30 , 2007. as discussed further below under “ tax receivable agreement , ” this liability represents 85 % of the amount of cash savings , if any , in u.s. federal , state , and local income tax that we realize as a result of the amortization of the increases in tax basis generated from our acquisitions of our operating company 's units from our selling and converting shareholders . story_separator_special_tag average assets in institutional accounts increased $ 1.8 billion , or 15.9 % , to $ 13.1 billion for the year ended december 31 , 2013 , from $ 11.3 billion for the year ended december 31 , 2012 , and had weighted average fees of 0.580 % and 0.574 % for the years ended december 31 , 2013 and 2012 , respectively . weighted-average fee rates increased primarily due to the increase in performance fees recognized during 2013 , partially offset by a higher mix of assets in our expanded products and larger relationships , which generally carry lower fee rates . average assets in retail accounts increased $ 4.3 billion , or 119 % , to $ 7.9 billion for the year ended december 31 , 2013 , from $ 3.6 billion for the year ended december 31 , 2012 , and had weighted average fees of 0.252 % and 0.316 % for the years ended december 31 , 2013 and 2012 , respectively . the decrease in weighted average fees in retail accounts was due primarily to the full year impact of the vanguard assignment . year ended december 31 , 2012 versus december 31 , 2011 our total revenue decreased $ 6.7 million , or 8.1 % , to $ 76.3 million for the year ended december 31 , 2012 , from $ 83.0 million for the year ended december 31 , 2011 . this change was driven primarily by a $ 3.5 million decrease in performance fees recognized , as well as a shift in the mix of average aum between our institutional and retail strategies . for the year ended december 31 , 2012 , average assets in our institutional and retail strategies were 75.8 % and 24.2 % , respectively , of total average aum . for the year ended december 31 , 2011 , average assets in our institutional and retail strategies were 81.3 % and 18.7 % , respectively of total average aum . as discussed above , due to the substantially large account size of certain of our retail accounts , these accounts generally carry lower weighted average fee rates . this shift in mix was driven by retail inflows primarily associated with our assignment to manage 28 % of the vanguard windsor fund as of the beginning of august 2012 as well as net outflows in our institutional accounts . to the extent that we experience further shifts in average aum , our revenue could be affected . our weighted average fee rates were 0.512 % and 0.553 % for the years ended december 31 , 2012 and 2011 , respectively . this decrease was primarily due to the decrease of performance fees recognized in 2012 as noted above combined with the partial period impact of a higher mix of assets in our retail large cap expanded value strategy which carries a lower fee rate . average assets in institutional accounts decreased $ 0.9 billion , or 7.4 % , to $ 11.3 billion for the year ended december 31 , 2012 , from $ 12.2 billion for the year ended december 31 , 2011 , and had weighted average fees of 0.574 % and 0.591 % for the years ended december 31 , 2012 and 2011 , respectively . weighted average fee rates decreased primarily due to the decrease in performance fees recognized during 2012 , partially offset by a higher mix of assets in our global focused value strategy , which generally carries higher fee rates . average assets in retail accounts increased $ 0.8 billion , or 28.6 % , to $ 3.6 billion for the year ended december 31 , 2012 , from $ 2.8 billion for the year ended december 31 , 2011 , and had weighted average fees of 0.316 % and 0.389 % for the years ended december 31 , 2012 and 2011 , respectively . the decrease in weighted average fees in retail accounts was due primarily to partial period impact of the vanguard assignment . 30 expenses our operating expense is driven primarily by our compensation costs . the table below describes the components of our operating expense for the years ended december 31 , 2013 , 2012 , and 2011 . replace_table_token_11_th year ended december 31 , 2013 versus december 31 , 2012 total operating expense increased by $ 5.8 million , or 14.9 % , to $ 44.9 million for the year ended december 31 , 2013 , from $ 39.1 million for the year ended december 31 , 2012 . compensation and benefits expense increased by $ 5.1 million , or 16.0 % , to $ 36.8 million for the year ended december 31 , 2013 , from $ 31.8 million for the year ended december 31 , 2012 . this increase reflects an increase in salary , headcount and the discretionary bonus accrual . the $ 2.4 million increase in non-cash compensation was primarily due to a shift in compensation mix and the amortization associated with previously issued awards . we would expect non-cash compensation expense in subsequent years to depend on the size and composition of awards granted under our equity incentive plans . general and administrative expense increased by $ 0.8 million , or 10.3 % , to $ 8.1 million for the year ended december 31 , 2013 , from $ 7.3 million for the year ended december 31 , 2012 . this increase is primarily due to an increase in business activities during 2013. year ended december 31 , 2012 versus december 31 , 2011 total operating expense decreased by $ 6.1 million , or 13.5 % , to $ 39.1 million for the year ended december 31 , 2012 , from $ 45.2 million for the year ended december 31 , 2011 . this decrease was primarily attributable to one-time charges associated with the sublease of excess real estate and a charge related to certain employee departures , both realized in

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows year ended december 31 , 2013 versus december 31 , 2012 cash and cash equivalents increased $ 1.3 million to $ 33.9 million in 2013 compared to $ 32.6 million in 2012 . net cash provided by operating activities increased $ 12.5 million in 2013 to $ 44.5 million from $ 32.0 million in 2012 . the increase was primarily due to an increase in net income partially offset by changes in operating assets and liabilities and working capital . net cash used in investing activities was $ 1.8 million in 2013 compared to $ 0.1 million used in 2012 . the $ 1.7 million increase was primarily attributable to a $ 1.0 million increase in purchases from investments in deferred compensation , a $ 0.5 million decrease in proceeds from investments in our deferred compensation plan , and $ 0.2 million increase in purchases of property and equipment during 2013 . net cash used in financing activities increased $ 7.2 million in 2013 to $ 41.5 million from $ 34.3 million in 2012 . this increase is primarily due to a $ 5.0 million increase in the repurchase and retirement of class a common stock , class b units , and class b units options during 2013 . this increase also reflects a $ 2.4 million increase in distributions to non-controlling interests driven the increase in partnership tax allocation payments associated with increased taxable income in 2013. year ended december 31 , 2012 versus december 31 , 2011 cash and cash equivalents decreased $ 2.4 million to $ 32.6 million in 2012 compared to $ 35.1 million in 2011 . net cash provided by operating activities decreased $ 14.1 million in 2012 to $ 32.0 million from $ 46.1 million in 2011 . the decrease was primarily due to payments made in association with our tax receivable agreement during 2012 , combined with 2011 one-time charges that were paid in 2012 and a higher mix of cash compensation paid during the year .

in the third quarter of fiscal 2017 , we completed the application development stage of our enterprise resource planning ( `` erp `` ) system , and we began depreciating our investment in such system . we incurred increased depreciation and other operating expenses of approximately $ 25.0 million in the fiscal year ended april 29 , 2017 as compared to the fiscal year ended april 30 , 2016 , related to this implementation . intangible asset impairment . in fiscal 2006 , we extended our exclusive north american distribution relationship with sirona dental systems for sirona 's cerec 3d dental restorative system . at that time , we paid a $ 100.0 million distribution fee to extend the existing exclusive relationship for at least a 10-year period beginning in 2007. this distribution fee has been accounted for as an intangible asset that has been amortized since 2007. based on our november 2016 decision not to extend sales exclusivity for the full sirona portfolio of products , we recorded a pre-tax non-cash impairment charge of $ 36.3 million , or $ 23.0 million after taxes or $ 0.24 per diluted share in our dental segment in the third quarter of fiscal 2017 , related to the distribution fee associated with the cerec product component of this arrangement . animal health international acquisition . in june 2015 , we completed the acquisition of animal health international , inc. , a leading production animal health distribution company in the u.s. prior to our acquisition , animal health international , inc. generated sales and earnings before interest , income taxes , depreciation and amortization 31 of $ 1.5 billion and $ 68 million , respectively , during the 12 months ended march 2015. our acquisition more than doubled the revenue of our legacy animal health business , which was previously focused on the companion animal market . our animal health business now offers an expanded range of products and services to a broader base of customers in north america and the u.k. during fiscal 2016 , we incurred $ 10.4 million , or $ 0.11 per diluted share , on an after-tax basis , of transaction costs related to the acquisition of animal health international , inc. patterson medical sale . in august 2015 , we sold patterson medical for $ 716.9 million . see note 4 to the consolidated financial statements for additional information . story_separator_special_tag discontinued operations net loss from discontinued operations was $ 2.9 million in fiscal 2017 , compared to net income from discontinued operations of $ 1.5 million in fiscal 2016 . the net loss incurred during fiscal 2017 was due to a change in estimate of the tax impact of the sale of patterson medical . 33 fiscal 2016 compared to fiscal 2015 continuing operations net sales . consolidated net sales in fiscal 2016 were $ 5,386.7 million , an increase of 37.7 % from $ 3,910.9 million in fiscal 2015. the growth in sales includes a 35.7 % contribution from acquisitions and a 1.8 % unfavorable impact of changes in foreign currency exchange rates . dental segment sales rose 2.5 % to $ 2,476.2 million in fiscal 2016 from $ 2,415.0 million in fiscal 2015. the growth included a 1.3 % unfavorable impact from changes in foreign currency exchange rates . consumable sales increased 4.5 % . dental equipment and software sales decreased 1.4 % , driven by a 1.3 % unfavorable impact from changes in foreign currency exchange rates . other dental sales , consisting primarily of technical service parts and labor , software support services and artificial teeth , increased 4.7 % in fiscal 2016. animal health segment sales grew 96.5 % to $ 2,862.2 million in fiscal 2016 from $ 1,456.6 million in fiscal 2015. our acquisition of animal health international , inc. in fiscal 2016 drove most of the increase in sales , contributing $ 1,396.1 million in sales in fiscal 2016. consumables increased 101.4 % , driven almost entirely by sales from animal health international , inc. equipment and software sales increased 7.2 % , and other sales increased 17.3 % , with both increases driven by organic growth and partially offset by unfavorable impacts from changes in foreign currency exchange rates . gross profit . consolidated gross profit margin for fiscal 2016 decreased 250 basis points from the prior year to 24.6 % . the decrease in gross profit margin was predominantly the result of the inclusion of sales and cost of sales from animal health international , inc. in our results , as that business traditionally has lower gross margins than our historical businesses . operating expenses . consolidated operating expenses for fiscal 2016 were $ 975.0 million , a 29.0 % increase from the prior year of $ 756.0 million . operating expenses mainly increased due to the acquisition of animal health international , inc. and transaction-related costs . the consolidated operating expense ratio of 18.1 % decreased 120 basis points from the prior year , primarily due to the acquisition of animal health international , inc. , which has a lower operating expense ratio than our other business . operating income from continuing operations . operating income from continuing operations was $ 347.7 million , or 6.5 % of net sales , in fiscal 2016 , compared to $ 304.6 million , or 7.8 % of sales , in fiscal 2015. the decrease in operating income as a percent of net sales was mainly due to the inclusion of results of animal health international , inc. and transaction-related costs . dental segment operating income was $ 312.2 million for fiscal 2016 , an increase of $ 11.8 million from the prior year period . the increase was driven primarily by higher sales volumes . animal health segment operating income was $ 94.3 million for fiscal 2016 , an increase of $ 37.6 million from the prior year period . story_separator_special_tag receivables are written off when we determine the amounts to be uncollectible , typically upon customer bankruptcy or non-response to continuous collection efforts . the portions of receivable amounts that are not expected to be collected during the next twelve months are classified as long-term . patterson has a relatively large , dispersed customer base and no single customer accounts for more than 1 % of consolidated net sales . in addition , the equipment sold to customers under finance contracts generally serves as collateral for the contract and the customer provides a personal guarantee as well . patterson advantage loyalty program – patterson dental provides a point-based awards program to qualifying customers involving the issuance of “ patterson advantage dollars ” which can be used toward equipment and technology purchases . the program was initiated in january 2009 and runs on a calendar year schedule . patterson advantage dollars earned during a program year expire one year after the end of the program year . the cost and corresponding liability associated with the program is recognized as contra-revenue in accordance with asc topic 605-50 , “ revenue recognition-customer payments and incentives . ” as of april 29 , 2017 , we believe we have sufficient experience with the program to reasonably estimate the amount of patterson advantage dollars that will not be redeemed and thus have recorded a liability for 87 % of the maximum potential amount that could be redeemed . we use the redemption recognition method , and we recognize the estimated value of unused patterson advantage dollars as redemptions occur . breakage recognized was immaterial to all periods presented . inventory and reserves – inventory consists primarily of merchandise held for sale and is stated at the lower of cost or market . cost is determined using the last-in , first-out ( `` lifo `` ) method for all inventories , except for foreign inventories and manufactured inventories , which are valued using the first-in , first-out ( `` fifo `` ) method . we continually assess the valuation of inventories and reduce the carrying value of those inventories that are obsolete or in excess of forecasted usage to estimated realizable value . estimates are made of the net realizable value of such inventories based on analyses and assumptions including , but not limited to , historical usage , future demand and market requirements . goodwill and other indefinite-lived intangible assets – goodwill represents the excess of cost over the fair value of identifiable net assets of businesses acquired . we have two reporting units as of april 29 , 2017 ; dental and animal health . our corporate reportable segment 's assets and liabilities , and net sales and expenses , are allocated to the two reporting units . other indefinite-lived intangible assets include copyrights , trade names and trademarks . we evaluate goodwill at least annually . if we determine that the fair value of the reporting unit may be less than its carrying amount , we evaluate goodwill using a two-step impairment test . otherwise , we conclude that no impairment is indicated and we do not perform the two-step impairment test . in fiscal 2017 , we determined it was appropriate to perform a two-step impairment test . the first step of the goodwill impairment test compares the book value of a reporting unit , including goodwill , with its fair value , as determined by its discounted cash flows . if the book value of a reporting unit exceeds its fair value , 38 the second step of the impairment test is performed to determine the amount of goodwill impairment loss to be recorded . the determination of fair value involves uncertainties because it requires management to make assumptions and to apply judgment to estimate industry and economic factors and the profitability of future business strategies . patterson conducts impairment testing based on current business strategy in light of present industry and economic conditions , as well as future expectations . additionally , in assessing goodwill for impairment , the reasonableness of the implied control premium is considered based on market capitalizations and recent market transactions . other indefinite-lived intangible assets are assessed for impairment by comparing the carrying value of an asset with its fair value . if the carrying value exceeds fair value , an impairment loss is recognized in an amount equal to the excess . the determination of fair value involves assumptions , including projected revenues and gross profit levels , as well as consideration of any factors that may indicate potential impairment . in the fourth quarter of fiscal 2017 , management completed its annual goodwill and other indefinite-lived intangible asset impairment tests and determined there was no impairment , and that our dental reporting unit was not at risk of failing step 1. the animal health reporting unit has a higher level of sensitivity to impairment as management currently assesses the various estimates and assumptions used to conduct these tests . adverse changes to one or more of these estimates or assumptions could cause us to recognize a material impairment charge on this reporting unit . at april 29 , 2017 , the estimated fair value of the animal health reporting unit exceeded its book value by approximately 11 % . long-lived assets – long-lived assets , including definite-lived intangible assets , are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets . our definite-lived intangible assets primarily consist of customer lists . when impairment exists , the related assets are written down to fair value using level 3 inputs , as discussed further in note 9 to the consolidated financial statements . in fiscal 2017 , we recorded a non-cash impairment charge of $ 36.3 million related to a distribution agreement intangible asset . refer to note 3 to the consolidated

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash repatriation . in fiscal 2016 , we approved a one-time repatriation of approximately $ 200.0 million of foreign earnings . this one-time repatriation reduced the overall cost of funding the acquisition of animal health international , inc. in addition , certain foreign cash at patterson medical was required to be repatriated as part of the sale transaction . a continuing operations tax impact of $ 12.3 million from the repatriation was recorded during fiscal 2016. during fiscal 2017 , we recorded a $ 2.4 million tax benefit related to a change in estimate of the tax impact of the cash repatriation . see note 11 to the consolidated financial statements for additional information . results of operations the following table summarizes our results from continuing operations as a percent of sales from continuing operations : replace_table_token_7_th fiscal 2017 compared to fiscal 2016 continuing operations net sales . consolidated net sales in fiscal 2017 were $ 5,593.1 million , an increase of 3.8 % from $ 5,386.7 million in fiscal 2016 . the inclusion of animal health international , inc. results for approximately six additional weeks in fiscal 2017 had a 3.6 % favorable impact on sales , foreign exchange rate changes had an estimated 1.7 % unfavorable impact on fiscal 2017 sales , and one less week of results in fiscal 2017 had a 1.0 % unfavorable impact on sales , resulting in internal growth of 2.9 % . dental segment sales decreased 3.5 % to $ 2,390.2 million in fiscal 2017 from $ 2,476.2 million in fiscal 2016 . one less week of results in the current period had an estimated 1.1 % unfavorable impact on sales . adjusting for this difference in number of weeks , sales decreased 2.4 % . sales of consumables decreased 4.1 % , primarily due to having one less week of results in the current period and to a sales force realignment in the first quarter of fiscal 2017. dental equipment and software sales decreased 3.2 % , primarily due to a decrease in sales of digital products , partially offset by increased sales of core equipment .

we believe the amended ama provides an improved fee structure that provides aamc with the potential to grow management fee revenues while encouraging growth and performance at front yard , subject to certain performance thresholds and an aggregate fee cap aimed to prevent the management fees from increasing front yard 's general and administrative expenses above industry standards , based on the size of front yard 's gross real estate asset base . importantly , the amended ama also provides for a termination option that would , if exercised , provide an industry-standard termination fee to aamc that did not exist prior to the amendment , while providing front yard with the flexibility to further internalize if the front yard board of directors determines it is in its stockholders ' best interest to do so . for further details of the amended ama , refer to refer to note 6 , “ related-party transactions ” of the consolidated financial statements . full internalization of front yard 's property management during the first quarter of 2019 , the internalization of front yard 's property management function was completed with more than 14,000 of its rental properties managed on its internal platform . front yard now has direct control of leasing , renovation and turn management , vendor management , market analysis and other property management support functions , which has enhanced front yard 's ability to control costs and generate long-term returns to its stockholders . the transition to internal property management has also provided front yard with the opportunity to continue developing its brand and enhancing its residents ' experience . over time , we expect front yard to develop a nationally recognized brand that is known for consistent quality at affordable prices . we believe that with the completion of the internalization , front yard is well positioned to continue improving upon its operating efficiencies as it refines its internal property management platform and grows its rental portfolio , which , in turn , could benefit aamc with growing management fee revenues over time . continued liquidation of non-core assets we continued to manage front yard 's liquidation of its remaining non-core assets , including the full divestiture of its remaining mortgage loans in the fourth quarter of 2019. in addition , as of december 31 , 2019 , front yard 's real estate portfolio included 35 ( ) only 22 non-rental reo properties . we continually evaluate the performance of front yard 's sfr portfolio and market certain rental properties for sale that do not meet front yard 's strategic objectives , and we have identified 181 former rental properties for sale as of december 31 , 2019. these property sales allow front yard to improve its operating efficiency and recycle capital that may be used to purchase pools of stabilized rental homes at attractive yields , to repurchase common stock , to pay down debt or to utilize the proceeds for such other purposes as it determines will best serve its stockholders . optimization of financing in 2019 we have continued our efforts to optimize front yard 's financing structure during 2019. on april 5 , 2019 we assisted front yard in amending its loan agreement with nomura corporate funding americas , llc to , among other things , reduce the interest rate spread over one-month libor from 3.00 % to 2.30 % , improve certain advance rates and modify the facility 's fee structure , resulting in a net reduction of fees to front yard . in addition , on april 26 , 2019 , we assisted front yard in amending its repurchase agreement with credit suisse ag to reduce the interest rate spread over one-month libor from 3.00 % to 2.30 % for funding under the facility secured by rental properties and reduce the fee structure of the facility . these enhancements to front yard 's short-term facilities will result in interest savings while also providing front yard with additional flexibility in deploying its capital . development of new business for aamc during the second quarter of 2019 , front yard commenced a strategic alternatives review process designed to maximize its stockholder value . in light of this process , we appointed a new co-chief executive officer on january 13 , 2020 to serve as an additional resource for us and to be responsible for implementing new business . our potential new businesses are in the development stage under the leadership and direction of our new co-chief executive officer and may include asset management services , investments in real estate related assets or other businesses that leverage the experience of our new co-chief executive officer and our real estate asset acquisition and portfolio management teams . our incumbent co-chief executive officer has continued to focus on the business of front yard and the completion of its strategic alternatives review . on february 17 , 2020 , front yard 's strategic alternatives review was completed , culminating in front yard 's entry into an agreement and plan of merger with affiliates of amherst , providing for the acquisition of front yard by amherst . the merger is expected to close in the second quarter of 2020 , subject to the approval of the holders of a majority of front yard 's outstanding shares and the satisfaction of customary closing conditions . if notice of termination of the amended ama is given upon the consummation of the merger , a termination fee of approximately $ 46.3 million would become payable to us upon the effective date of such termination . story_separator_special_tag front yard 's operating results may be affected by various factors , including , but not limited to , the number and performance of front yard 's sfr properties , its ability to use financing to grow its sfr portfolio and its ability to control operating expenses . the extent to which we are successful in managing these factors for front yard affects our ability to generate management fees , which are our primary source of income . results of operations the following discussion compares our results of operations for the years ended december 31 , 2019 and 2018 . our results of operations for the periods presented are not indicative of our expected results in future periods . for discussion that compares our results of operations for the years ended december 31 , 2018 and 2017 , see “ item 7. management 's discussion and analysis of financial condition and results of operations - results of operations ” included within our annual report on form 10-k for the year ended december 31 , 2018 filed with the sec on february 27 , 2019 . 37 ( ) fiscal year ended december 31 , 2019 compared to fiscal year ended december 31 , 2018 management fees and expense reimbursements we recognized base management fees from front yard of $ 14.3 million for the year ended december 31 , 2019 compared to $ 14.6 million for the year ended december 31 , 2018 . the decrease in base management fees is primarily driven by ( i ) reductions in front yard 's average invested capital ( as defined in the former ama ) during the first four months of 2019 and ( ii ) the minimum base fee of $ 3.6 million per quarter becoming applicable beginning in may 2019. we earned conversion fees of $ 29,000 and $ 0.2 million for the years ended december 31 , 2019 and 2018 , respectively . this decrease is primarily due to fewer loans and reo properties converting to rental properties as we continue to pare the small number of remaining legacy assets of front yard . under the amended ama , we will no longer receive conversion fees from front yard . we recognized expense reimbursements due from front yard of $ 1.5 million for the year ended december 31 , 2019 compared to $ 1.2 million for the year ended december 31 , 2018 . expense reimbursements relate primarily to travel and and certain operating expenses in managing front yard 's business and the employment costs related to the general counsel dedicated to front yard . in addition , during 2019 , we accrued the reimbursement of a one-time bonus payable to an aamc employee on behalf of front yard . salaries and employee benefits salaries and employee benefits decreased to $ 17.0 million from $ 17.3 million for the years ended december 31 , 2019 and 2018 , respectively . this decrease is primarily due to decreased share-based compensation expense for awards granted to our employees , partially offset by increases in our employee headcount . legal and professional fees legal and professional fees increased to $ 3.6 million from $ 1.6 million for the years ended december 31 , 2019 and 2018 , respectively . this increase is primarily due to an increase in legal and consulting fees related to the negotiation and amendment of the asset management agreement . general and administrative expenses general and administrative expenses increased to $ 4.1 million from $ 3.6 million for the years ended december 31 , 2019 and 2018 , respectively . this increase is primarily due to increased occupancy costs related to new , larger office space to accommodate increased headcount and technology costs as we brought certain it functions in-house , partially offset by lower travel costs during 2019. change in fair value of front yard common stock the change in fair value of front yard common stock was $ 5.9 million compared to $ ( 5.1 ) million during the years ended december 31 , 2019 and 2018 , respectively . these changes in fair value were due solely to changes in the market price of front yard 's common stock as reported on the new york stock exchange at each reporting date . dividend income dividend income on shares of front yard common stock was $ 0.7 million and $ 1.0 million for the years ended december 31 , 2019 and 2018 , respectively . the amount of dividend income may vary with front yard 's financial performance , taxable income , liquidity needs and other factors deemed relevant by front yard 's board of directors . 38 ( ) story_separator_special_tag investing activities for the year ended december 31 , 2017 consisted of investments in short-term investments and property and equipment . net cash used in financing activities during the year ended december 31 , 2019 primarily related to shares withheld for taxes upon vesting of restricted stock . net cash used in financing activities for the years ended december 31 , 2018 and 2017 consisted primarily of repurchases of our common stock . off-balance sheet arrangements we had no off-balance sheet arrangements as of december 31 , 2019 or 2018 . recent accounting pronouncements see note 1 , “ organization and basis of presentation - recently issued accounting standards ” to our consolidated financial statements . critical accounting judgments accounting standards require information in financial statements about the risks and uncertainties inherent in significant estimates , and the application of generally accepted accounting principles involves the exercise of varying degrees of judgment . certain amounts included in or affecting our financial statements and related disclosures must be estimated , requiring us to make certain assumptions with respect to values or conditions that can not be known with certainty at the time our consolidated financial statements are prepared . these estimates and assumptions affect the amounts we report for our assets and liabilities and our revenues and

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources as of december 31 , 2019 , we had cash and cash equivalents of $ 20.0 million compared to $ 27.2 million as of december 31 , 2018 . the reduction in the cash and cash equivalents in 2019 was primarily due to the use of cash in the payment of ongoing employee compensation and benefits , dividends on preferred stock issued under the 2016 employee preferred stock program and general corporate expenses . at december 31 , 2019 , we also held $ 20.0 million in front yard common stock . we also continue to generate asset management fees from front yard under the amended ama . we believe these sources of liquidity are sufficient to enable us to meet anticipated short-term ( one year ) liquidity requirements . our only ongoing cash expenditures are salaries and employee benefits , legal and professional fees , lease obligations and other general and administrative expenses . between january 31 , 2020 and february 3 , 2020 , we received purported notices from holders of our series a shares requesting us to redeem an aggregate of $ 250,000,000 liquidation preference of our series a shares on march 15 , 2020. we do not have legally available funds to redeem all of the series a shares on march 15 , 2020. as a result , we do not believe , under the terms of the certificate , that we are obligated to redeem any of the series a shares under the certificate , and , on january 27 , 2020 , we filed a claim for declaratory relief in the superior court of the virgin islands ,division of st. croix , against luxor to confirm our interpretation of the certificate .

you should carefully review all of these factors , and you should be aware that there may be other factors that could cause these differences . these forward-looking statements were based on information , plans and estimates at the date of this annual report , and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors , new information , future events or other changes . although the company believes that the expectations reflected in such forward-looking statements are reasonable , actual results may differ materially from the results discussed in these forward-looking statements . readers are also urged to carefully review and consider the various disclosures made by the company , which attempt to advise interested parties of the factors that affect the company 's business . critical accounting policies management 's discussion and analysis of the company 's financial condition and results of operations is based on the consolidated financial statements which are prepared in accordance with accounting principles generally accepted in the united states of america . the preparation of such financial statements requires management to make estimates and assumptions that affect the reported amounts of assets , liabilities , revenues and expenses and related disclosure of contingent assets and liabilities . on an ongoing basis , management evaluates its estimates , including those related to the allowance for loan losses , goodwill , the valuation of mortgage servicing rights , and other-than-temporary impairment on securities . management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances , the results of which form the basis in making judgments about the carrying values of assets that are not readily apparent from other sources . actual results could differ from the amounts derived from management 's estimates and assumptions under different assumptions or conditions . the first bancorp - 2016 form 10-k - page 23 allowance for loan losses . management believes the allowance for loan losses requires the most significant estimates and assumptions used in the preparation of the consolidated financial statements . the allowance for loan losses is based on management 's evaluation of the level of the allowance required in relation to the estimated loss exposure in the loan portfolio . management believes the allowance for loan losses is a significant estimate and therefore regularly evaluates it to determine the appropriate level by taking into consideration factors such as prior loan loss experience , the character and size of the loan portfolio , business and economic conditions and management 's estimation of potential losses . the use of different estimates or assumptions could produce different provisions for loan losses . goodwill . management utilizes numerous techniques to estimate the value of various assets held by the company , including methods to determine the appropriate carrying value of goodwill as required under financial accounting standards board ( `` fasb `` ) accounting standards codification ( `` asc `` ) topic 350 `` intangibles – goodwill and other . `` goodwill from purchase acquisitions is subject to ongoing periodic evaluation for impairment . mortgage servicing rights . the valuation of mortgage servicing rights is a critical accounting policy which requires significant estimates and assumptions . the bank often sells mortgage loans it originates and retains the ongoing servicing of such loans , receiving a fee for these services , generally 0.25 % of the outstanding balance of the loan per annum . mortgage servicing rights are recognized at fair value when they are acquired through the sale of loans , and are reported in other assets . they are amortized into non-interest income in proportion to , and over the period of , the estimated future net servicing income of the underlying financial assets . the rights are subsequently carried at the lower of amortized cost or fair value . management uses an independent firm which specializes in the valuation of mortgage servicing rights to determine the fair value . the most important assumption is the anticipated loan prepayment rate , and increases in prepayment speed results in lower valuations of mortgage servicing rights . the valuation also includes an evaluation for impairment based upon the fair value of the rights , which can vary depending upon current interest rates and prepayment expectations , as compared to amortized cost . impairment is determined by stratifying rights by predominant characteristics , such as interest rates and terms . the use of different assumptions could produce a different valuation . all of the assumptions are based on standards the company believes would be utilized by market participants in valuing mortgage servicing rights and are consistently derived and or benchmarked against independent public sources . other-than-temporary impairment on securities . one of the significant estimates related to investment securities is the evaluation of other-than-temporary impairments . the evaluation of securities for other-than-temporary impairments is a quantitative and qualitative process , which is subject to risks and uncertainties and is intended to determine whether declines in the fair value of investments should be recognized in current period earnings . the risks and uncertainties include changes in general economic conditions , the issuer 's financial condition and or future prospects , the effects of changes in interest rates or credit spreads and the expected recovery period of unrealized losses . securities that are in an unrealized loss position are reviewed at least quarterly to determine if other-than-temporary impairment is present based on certain quantitative and qualitative factors and measures . story_separator_special_tag the company 's provision to the allowance for loan losses was $ 1.6 million in 2015 compared to $ 1.2 million in 2014. this was 0.10 % of average assets in 2015 , compared to 0.09 % of average assets for our peer group . the allowance for loan losses stood at 1.00 % of total loans as of december 31 , 2015 , compared to 1.13 % at december 31 , 2014. credit quality improved significantly in 2015. net loan chargeoffs were $ 2.0 million or 0.21 % of average loans , down $ 342,000 from net chargeoffs of $ 2.3 million or 0.26 % of average loans in 2014. non-performing assets stood at 0.57 % of total assets as of december 31 , 2015 compared to 0.97 % of total assets at december 31 , 2014. past-due loans were 0.84 % of total loans as of december 31 , 2015 , down significantly from 1.29 % of total loans as of december 31 , 2014. income taxes income taxes on operating earnings were $ 6.5 million for the year ended december 31 , 2016 , up $ 940,000 from the same period in 2015 . this is in line with the increase in the company 's level of income before taxes . income taxes on operating earnings were $ 5.5 million for the year ended december 31 , 2015 , up $ 948,000 from the same period in 2014 . this is in line with the increase in the company 's level of income before taxes . net income net income for 2016 was $ 18.0 million , up 11.1 % or $ 1.8 million from net income of $ 16.2 million that was posted in 2015 . earnings per share on a fully diluted basis were $ 1.66 , up $ 0.15 or 9.9 % from the $ 1.51 reported for the year ended december 31 , 2015 . net income for 2015 was $ 16.2 million , up 10.2 % or $ 1.5 million from net income of $ 14.7 million that was posted in 2014. earnings per share on a fully diluted basis were $ 1.51 , up $ 0.14 or 10.2 % from the $ 1.37 reported for the year ended december 31 , 2014. key ratios return on average assets in 2016 was 1.12 % , up from the 1.07 % and the 0.99 % posted in 2015 and 2014 , respectively . return on average tangible common equity was 12.42 % in 2016 , compared to 11.90 % in 2015 and 11.57 % in 2014 . in 2016 , the company 's dividend payout ratio ( dividends declared per share divided by earnings per share ) was 61.31 % , compared to 57.24 % in 2015 and 60.14 % in 2014 . the company 's efficiency ratio – a benchmark measure of the amount spent to generate a dollar of income – was 50.43 % in 2016 compared to 63.70 % for the bank 's peer group , on average . in 2015 , the company 's efficiency ratio was 54.26 % compared to 65.23 % for the bank 's peer group , on average . the first bancorp - 2016 form 10-k - page 30 investment management and fiduciary activities as of december 31 , 2016 , first advisors , the bank 's private banking and investment management division , had assets under management with a market value of $ 851.0 million , consisting of 1,031 trust accounts , estate accounts , agency accounts , and self-directed individual retirement accounts . this compares to december 31 , 2015 , when 1,041 accounts with a market value of $ 762.0 million were under management . assets and asset quality total assets of $ 1.713 billion at december 31 , 2016 increased 9.5 % or $ 148.1 million from $ 1.565 billion at december 31 , 2015 . the investment portfolio increased $ 61.9 million or 13.0 % over december 31 , 2015 , and the loan portfolio increased $ 82.9 million or 8.4 % . year-over-year , average assets were up $ 100.4 million in 2016 over 2015 . average loans in 2016 were $ 71.4 million higher than in 2015 , and average investments in 2016 were $ 22.2 million higher than in 2015 . credit quality continued to improve in 2016 . non-performing assets to total assets stood at 0.48 % at december 31 , 2016 , below 0.57 % of total assets at december 31 , 2015 and 0.97 % of total assets at december 31 , 2014 . in management 's opinion , the company 's long-standing approach to working with borrowers and ethical loan underwriting standards helps alleviate some of the payment problems on customers ' loans and minimizes actual loan losses . net chargeoffs in 2016 were $ 1.4 million or 0.13 % of average loans outstanding . this compares to net chargeoffs in 2015 of $ 2.0 million or 0.21 % of average loans outstanding and net charge offs for our ubpr peer group in 2016 of 0.10 % of average loans . residential real estate term loans represent 38.4 % of the total loan portfolio , and this loan category generally has a lower level of losses in comparison to other loan types . in 2016 , the loss ratio for residential mortgages was 0.08 % compared to 0.13 % for the entire loan portfolio . the company does not have a credit card portfolio or offer dealer consumer loans which generally carry more risk and potentially higher losses . the allowance for loan losses ended 2016 at $ 10.1 million and stood at 0.95 % of total loans outstanding compared to $ 9.9 million and 1.00 % of total loans outstanding at december 31 , 2015 . a $ 1.6 million provision for losses was made in 2016 and net charge offs totaled $ 1.4 million , resulting in the allowance for loan

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

capital resources shareholders ' equity as of december 31 , 2016 was $ 172.5 million , compared to $ 167.5 million as of december 31 , 2015 . capital at december 31 , 2016 was sufficient to meet the requirements of regulatory authorities . leverage capital of the company , or total shareholders ' equity divided by average total assets for the current quarter less goodwill and any net unrealized gain or loss on securities available for sale and postretirement benefits , stood at 8.71 % on december 31 , 2016 and 8.81 % at december 31 , 2015 . to be rated `` well-capitalized '' , regulatory requirements call for a minimum leverage capital ratio of 5.00 % . at december 31 , 2016 , the company had tier-one risk-based capital of 14.64 % and tier-two risk-based capital of 15.69 % , versus 14.70 % and 15.78 % , respectively , at december 31 , 2015 . to be rated `` well-capitalized '' , regulatory requirements call for minimum tier-one and tier-two risk-based capital ratios of 8.00 % and 10.00 % , respectively . the the first bancorp - 2016 form 10-k - page 48 company 's actual levels of capitalization were comfortably above the standards to be rated `` well-capitalized '' by regulatory authorities . during 2016 , the company declared cash dividends of $ 0.22 per share in the first quarter and $ 0.23 per share in the remaining three quarters , as well as a special dividend of $ 0.12 per share in the fourth quarter or $ 1.03 per share for the year .

players increasingly purchase our games as digital downloads , as opposed to purchasing physical discs , and engage with the live services we provide on an ongoing basis . our live services provide additional depth and engagement opportunities for our players and include microtransactions , extra content , subscriptions , and esports . our net revenue attributable to live services comprised 40 percent of our total net revenue during fiscal year 2018 and we expect that live services net revenue will continue to be material to our business . our most popular live service is the ultimate team mode associated with our sports franchises . ultimate team allows players to collect and trade current and former professional players in order to build and compete as a personalized team . net revenue from ultimate team represented approximately 21 percent of our total net revenue during fiscal year 2018 , a substantial portion of which was derived from fifa ultimate team . our digital transformation is also creating opportunities in platforms , business models and the way in which players engage with our games and services . for example , we have leveraged brands and assets from franchises typically associated with consoles and traditional pc gaming , such as fifa , madden nfl , the sims , simcity and star wars , to create mobile and pc games that are monetized through live services associated with the game . we also provide our ea access and origin access subscription services , which offer players access to a selection of ea games and other benefits for a monthly or annual fee . we significantly increased our digital net revenue from $ 2,409 million in fiscal year 2016 to $ 2,874 million in fiscal year 2017 and $ 3,450 million during fiscal year 2018. we expect this portion of our business to continue to grow through fiscal year 2019 and beyond as we continue to focus on developing and monetizing products and services that can be delivered digitally . technological infrastructure . as our digital business has grown , our games and services increasingly depend on the reliability , availability and security of our technological infrastructure . we are investing and expect to continue to invest in technology , hardware and software to support our games and services , including with respect to security protections . our industry is prone to , and our systems and networks are subject to , cyber-attacks , computer viruses , worms , phishing attacks , malicious software programs , and other information security incidents that seek to exploit , disable , damage , disrupt or gain access to our networks , our products and services , supporting technological infrastructure , intellectual property and other assets . we expect these threats to our systems and networks to continue . player network . we have made , and expect to continue to make , investments that strengthen our player network , which connects our players to each other and to the games they love . we are adopting consistent , cross-company methodologies to better understand our players ' needs and will continue to invest in technology that enables us to build personalized player relationships that can last for years instead of days or weeks by connecting our players to us and to each other . this connection allows us to market and deliver content and services for popular franchises like fifa , battlefield and star wars to our players more efficiently . that same foundation also enables new player-centric ways to discover and try new games and experiences , such as our subscription-based ea access and origin access services . concentration of sales among the most popular games . in all major segments of our industry , we see a large portion of games sales concentrated on the most popular titles . similarly , a significant portion of our revenue historically has been derived from games based on a few popular franchises , several of which we have released on an annual or bi-annual basis . in particular , we have historically derived a significant portion of our net revenue from our largest and most popular game , fifa , the annualized version of which is consistently one of the best-selling games in the marketplace . mobile and pc free-to-download games . the global adoption of mobile devices and a business model for those devices that allows consumers to try new games with no up-front cost , and that are monetized through the live service associated with the game , has led to significant growth in the mobile gaming industry . we expect this growth to continue during our 2019 fiscal year . likewise , the wide consumer acceptance of free-to-download , live service-based pc games played over the internet has broadened our consumer base . we expect revenue generated from mobile and pc free-to-download games to remain an important part of our business . recurring revenue sources . our business model includes revenue that we deem recurring in nature , such as revenue from our annualized titles ( such as fifa and madden nfl ) and associated live services , subscriptions and our ongoing mobile business . we have been able to forecast revenue from these areas of our business with greater relative confidence than for new games , services and business models . as we continue to leverage the digital transformation in our industry and incorporate new content models and modalities of play into our games , our goal is to continue to look for opportunities to expand the recurring portion of our business . net bookings . in order to improve transparency into our business , we disclose an operating performance metric , net bookings . net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period . story_separator_special_tag key indicators that we evaluate in determining gross versus net treatment include but are not limited to the following : the party responsible for delivery/fulfillment of the product or service to the end consumer the party responsible for the billing , collection of fees and refunds to the end consumer the storefront and terms of sale that govern the end consumer 's purchase of the product or service the party that sets the pricing with the end consumer and has credit risk based on evaluation of the above indicators , we have determined that generally the third party is considered the primary obligor to end consumers for the sale of our interactive software games . we therefore report revenue related to these arrangements net of the fees retained by the storefront . sales returns and allowances we reduce revenue for estimated future returns and price protection which may occur with our distributors and retailers ( “ channel partners ” ) . price protection represents our practice to provide our channel partners with a credit allowance to lower their wholesale price on a particular product that they have not resold to end consumers . the amount of the price protection is generally the difference between the old wholesale price and the new reduced wholesale price . in certain countries for our pc and console packaged goods software products , we also have a practice of allowing channel partners to return older software products in the channel in exchange for a credit allowance . as a general practice , we do not give cash refunds . when evaluating the adequacy of sales returns and price protection allowances , we analyze the following : historical credit allowances , current sell-through of our channel partners ' inventory of our software products , current trends in retail and the video game industry , changes in customer demand , acceptance of our software products , and other related factors . in addition , we monitor the volume of sales to our channel partners and their inventories , as substantial overstocking in the distribution channel could result in high returns or higher price protection in subsequent periods . in the future , actual returns and price protections may materially exceed our estimates as unsold software products in the distribution channels are exposed to rapid changes in consumer preferences , market conditions or technological obsolescence due to new platforms , product updates or competing software products . while we believe we can make reliable estimates regarding these matters , these estimates are inherently subjective . accordingly , if our estimates change , our returns and price protection allowances would change and would impact the total net revenue and related balance sheet accounts that we report . fair value estimates business combinations . we must estimate the fair value of assets acquired , liabilities and contingencies assumed , acquired in-process technology , and contingent consideration issued in a business combination . our assessment of the estimated fair value of each of these can have a material effect on our reported results as intangible assets are amortized over various estimated useful lives . furthermore , the estimated fair value assigned to an acquired asset or liability has a direct impact on the amount we recognize as goodwill , which is an asset that is not amortized . determining the fair value of assets acquired requires an assessment of the highest and best use or the expected price to sell the asset and the related expected future cash flows . determining the fair value of acquired in-process technology also requires an assessment of our expectations related to the use of that technology . determining the fair value of an assumed liability requires an assessment of the expected cost to transfer the liability . determining the fair value of contingent consideration requires an assessment of the probability-weighted expected future cash flows over the period in which the obligation is expected to be settled , and applying a discount rate that appropriately captures the risk associated with the obligation . the significant unobservable inputs used in the fair value measurement of the contingent consideration payable are forecasted earnings . significant changes in forecasted earnings would 28 result in significantly higher or lower fair value measurement . this fair value assessment is also required in periods subsequent to a business combination . such estimates are inherently difficult and subjective and can have a material impact on our consolidated financial statements . royalties and licenses our royalty expenses consist of payments to ( 1 ) content licensors , ( 2 ) independent software developers , and ( 3 ) co-publishing and distribution affiliates . license royalties consist of payments made to celebrities , professional sports organizations , movie studios and other organizations for our use of their trademarks , copyrights , personal publicity rights , content and or other intellectual property . royalty payments to independent software developers are payments for the development of intellectual property related to our games . co-publishing and distribution royalties are payments made to third parties for the delivery of products . royalty-based obligations with content licensors and distribution affiliates are either paid in advance and capitalized as prepaid royalties or are accrued as incurred and subsequently paid . these royalty-based obligations are generally expensed to cost of revenue generally at the greater of the contractual rate or an effective royalty rate based on the total projected net revenue for contracts with guaranteed minimums . significant judgment is required to estimate the effective royalty rate for a particular contract . because the computation of effective royalty rates requires us to project future revenue , it is inherently subjective as our future revenue projections must anticipate a number of factors , including ( 1 ) the total number of titles subject to the contract , ( 2 ) the timing of the release of these titles , ( 3 ) the number of software units and amount of extra content that

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash provided by investing activities increased $ 1,381 million during fiscal year 2018 as compared to fiscal year 2017 primarily driven by a $ 1,885 million increase in proceeds from the sales and maturities of short-term investments as a result of repositioning such investments in order to make offshore funds available for repatriation . this was partially offset by a $ 370 million decrease in the purchase of short-term investments and a payment of $ 150 million in connection with the acquisition of respawn . financing activities . cash used in financing activities decreased $ 86 million during fiscal year 2018 as compared to fiscal year 2017 primarily due to the repayment of $ 163 million of our formerly outstanding convertible notes in fiscal year 2017 without a corresponding transaction in fiscal year 2018 , offset by a $ 93 million increase in the repurchase and retirement of our common stock in the current year . comparison of fiscal year 2017 to fiscal year 2016 operating activities . cash provided by operating activities increased $ 113 million during fiscal year 2017 as compared to fiscal year 2016. the increase is primarily driven by a $ 385 million increase in sales related to fifa 17 , battlefield 1 , and titanfall 2 . this was partially offset by a $ 263 million decrease associated with a net increase in accounts receivable balances as of march 31 , 2017 as compared to march 31 , 2016 primarily due to the timing of game launches and higher digital sales during the three months ended march 31 , 2017. investing activities .

in 2017 , we received fast track designation and orphan drug designation from the u.s. food and drug administration ( “ fda ” ) for tavo in metastatic melanoma , which could qualify tavo for expedited fda review , a rolling biologics license application review and certain other benefits . we have completed monotherapy and combination programs and our current focus is to pursue clinical development programs with tavo , in combination with anti-pd-1 checkpoint inhibitors , in metastatic melanoma , triple negative breast cancer ( “ tnbc ” ) and squamous cell carcinoma head and neck ( “ scchn ” ) . the company intends to continue to pursue other ongoing or potential new trials and studies related to tavo , in various tumor types . in addition to tavo , we have identified and are developing new dna-encoded therapeutic candidates and tumor indications for use with our new visceral lesion applicator ( “ vla ” ) , to target deep visceral lesions , such as liver , lung , bladder , pancreatic and other difficult to treat visceral lesions . performance outlook we expect to use our available working capital in the near term primarily for the advancement of our existing and planned clinical programs , including performance of the keynote-695 and keynote-890 studies and , to a lesser extent , the continuation of our other clinical trials and studies . we anticipate our spending on clinical programs and the development of our next-generation oms ep device will continue throughout our current fiscal year , primarily in support of the keynote-695 and keynote-890 studies , while our spending on research and development programs will be prioritized , based on our focus on the keynote-695 and keynote-890 studies . we expect our cash-based general and administrative expenses to remain relatively flat in the near term , as we seek to continue to leverage internal resources and automate processes to decrease our outside services expenses . see “ results of operations ” below for more information . 53 results of operations for the year ended july 31 , 2020 compared to the year ended july 31 , 2019 the financial data for the years ended july 31 , 2020 and july 31 , 2019 is presented in the following table and the results of these two periods are included in the discussion thereafter . replace_table_token_1_th revenue we have not generated any revenue since our inception , and we do not anticipate generating meaningful revenue in the near term . research and development expenses our research and development expenses increased by approximately $ 6.7 million , from $ 18.4 million during the year ended july 31 , 2019 to $ 25.1 million during the year ended july 31 , 2020. this increase was primarily due to the following approximate increases : ( i ) $ 5.7 million in clinical trial-related costs to support our various clinical studies and costs for discovery research and product development ( ii ) $ 0.5 million in higher rent expense as a result of the adoption of asc 842 for our operating leases on august 1 , 2019 and ( iii ) $ 0.6 million increase in payroll and related benefits expenses , primarily due to additional headcount and merit increases . these increases were partially offset by a $ 0.1 million reduction in stock-based compensation expense for employees and consultants . general and administrative our general and administrative expenses increased by approximately $ 6.3 million , from $ 12.0 million during the year ended july 31 , 2019 , to $ 18.3 million during the year ended july 31 , 2020. this increase was largely due to the following approximate increases : ( i ) $ 4.8 million in legal costs primarily related to the alpha holdings litigation and the contested proxy ; ( ii ) $ 0.9 million in consulting costs , primarily due to business development and public relations ( iii ) $ 0.8 million in proxy costs primarily related to the company 's special meeting held in february 2020 and ( iv ) $ 0.5 million increase in payroll and related benefits expenses primarily due to additional headcount and merit increases . these increases were partially offset by a $ 0.5 million reduction in stock-based compensation expense for employees and consultants , and $ 0.2 million in travel and travel related expenses due to covid-19 restrictions . the company believes a significant portion of its legal costs related to the alpha holdings litigation are recoverable and are likely to be recovered . at this point , no amount for insurance recoveries has been recorded . other income , net other income , net , decreased by approximately $ 0.2 million from $ 0.4 million for the year ended july 31 , 2019 to $ 0.2 million for the year ended july 31 , 2020. this decrease was primarily due to reduced interest income as a result of lower cash balances as well as a lower return on our investments for these respective periods . 54 foreign currency exchange gain/ ( loss ) , net foreign currency exchange gain/ ( loss ) , net , increased by approximately $ 0.4 million from a loss of $ ( 0.3 ) million for the year ended july 31 , 2019 to a gain of $ 0.1 million for the year ended july 31 , 2020. the increase was primarily due to unrealized foreign currency transaction gains and losses recognized in connection with the australian subsidiary 's intercompany loan . income tax expense ( benefit ) in may 2020 , the company received $ 0.9 million in net proceeds from the sale of its new jersey net operating losses under the state of new jersey nol transfer program . story_separator_special_tag 58 alpha holdings on august 31 , 2018 , the company entered into a stock purchase agreement with alpha holdings , inc. ( “ alpha holdings ” ) , pursuant to which the company agreed to issue and sell to alpha holdings shares of its common stock equal to an aggregate amount of up to $ 15.0 million at a market purchase price of $ 15.00 per share , which was the closing price of the company 's common stock the day immediately before the agreement was executed by the parties . on october 9 , 2018 , the company received total proceeds , before expenses , of $ 8.0 million in cash from the offering and issued alpha holdings 533,333 shares of common stock . there were no underwriting or placement agent fees associated with the offering . on december 6 , 2018 , the company received total proceeds , before expenses , of $ 7.0 million in cash from the offering and issued alpha holdings 466,667 shares of common stock . there were no underwriting or placement agent fees associated with the offering . critical accounting policies accounting for long-lived assets we assess the impairment of long-lived assets , consisting of property and equipment , periodically and whenever events or circumstances indicate that the carrying value may not be recoverable . examples of such circumstances may include : ( 1 ) the asset 's ability to continue to generate income from operations and positive cash flow in future periods ; ( 2 ) loss of legal ownership or title to an asset ; ( 3 ) significant changes in our strategic business objectives and utilization of the assets ; and ( 4 ) the impact of significant negative industry or economic trends . if a change were to occur in any of these or similar factors , the likelihood of a material change in our net loss would increase . recoverability of assets to be held and used in operations is measured by a comparison of the carrying amount of an asset to the future net cash flows expected to be generated by the assets . although we believe the factors used by management to evaluate future net cash flows are reasonable , this evaluation requires a high degree of judgment , and results could vary if the actual amounts are materially different than management 's estimates . in addition , we base estimates of useful lives and related amortization or depreciation expense on our subjective estimate of the period the assets will generate revenue or otherwise be used by us . if long-lived assets are considered impaired , the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets . assets to be disposed of are reported at the lower of the carrying amount or fair value , less selling costs . equity-based awards the company grants equity-based awards ( typically stock options or restricted stock units ) under our stock-based compensation plan and outside of our stock-based compensation plan , with terms generally similar to the terms under our stock-based compensation plan . the company estimates the fair value of stock option awards using the black-scholes option valuation model . for employees , directors and consultants , the fair value of the award is measured on the grant date . the fair value amount is then recognized over the period during which services are required to be provided in exchange for the award , usually the vesting period . the black-scholes option valuation model requires the input of subjective assumptions , including price volatility of the underlying stock , risk-free interest rate , dividend yield , and expected life of the option . the company estimates the fair value of restricted stock unit awards based on the closing price of the company 's common stock on the date of issuance . 59 employee stock purchase plan employees may elect to participate in our stockholder approved employee stock purchase plan . the stock purchase plan allows for the purchase of our common stock at not less than 85 % of the lesser of ( i ) the fair market value of a share of stock on the beginning date of the offering period or ( ii ) the fair market value of a share of stock on the purchase date of the offering period , subject to a share and dollar limit as defined in the plan and subject to the applicable legal requirements . there are two 6-month offering periods during each fiscal year , ending on january 31 and july 31. in accordance with applicable accounting guidance , the fair value of awards under the stock purchase plan is calculated at the beginning of each offering period . we estimate the fair value of the awards using the black-scholes option valuation model . the black-scholes option valuation model requires the input of subjective assumptions , including price volatility of the underlying stock , risk-free interest rate , dividend yield , and the offering period . this fair value is then amortized at the beginning of the offering period . stock-based compensation expense is based on awards expected to be purchased at the beginning of the offering period , and therefore is reduced when participants withdraw during the offering period . australia research and development tax credit our australian , wholly-owned , subsidiary incurs research and development expenses , primarily in the course of conducting clinical trials . the australian research and development activities qualify for the australian government 's tax credit program , which provides a 41 % credit for qualifying research and development expenses . the tax credit does not depend on our generation of future taxable income or ongoing tax status or position . accordingly , the credit is not considered an element of income tax accounting under asc 740 and is recorded against qualifying research and development expenses

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources working capital the following table and subsequent discussion summarize our working capital as of each of the periods presented : replace_table_token_2_th current assets current assets as of july 31 , 2020 decreased by $ 5.7 million to $ 22.8 million , from $ 28.5 million as of july 31 , 2019. in february 2020 , the company received $ 28.0 million net proceeds from the china grand pharmaceutical and healthcare holdings limited ( “ cgp ” ) , and sirtex medical us holdings , inc. ( “ sirtex ” ) financing transaction . the proceeds from cgp and sirtex financing were offset by cash used to support our operations during the year ended july 31 , 2020. current liabilities current liabilities as of july 31 , 2020 increased by $ 4.7 million to $ 9.7 million , from $ 5.0 million as of july 31 , 2019. this increase was primarily due to an increase in accounts payable related to the alpha holdings litigation and contested proxy as well as the addition of operating lease liabilities to the balance sheet as a result of the adoption of asc 842. cash flow cash used in operating activities net cash used in operating activities for the year ended july 31 , 2020 was $ 33.1 million , as compared to $ 29.0 million for the year ended july 31 ,2019. the $ 4.1 million increase in cash used in operating activities was primarily attributable to an increase in cash used to support our operating activities , including but not limited to , our clinical trials , an increase in r & d activities , amounts for the alpha litigation and contested proxy and general working capital requirements .

during the year ended september 30 , 2019 , we had an average active community count of 166 , up 6.3 % from the prior year . we ended the year with an active community count of 166 . we continue to evaluate strategic opportunities to purchase land within our geographic footprint , balancing our desire to reduce leverage with land acquisition strategies that maximize the efficiency of capital employed . our asp for homes closed during the fiscal year ended september 30 , 2019 was $ 377.7 thousand , up 4.9 % compared to the prior year . the year-over-year increase in asp on closings was primarily a function of geographic mix and product shift , though we also benefited from pricing power in some markets . in addition , we ended fiscal 2019 with an asp of $ 389.4 thousand for our units in backlog , indicating that asp growth may continue in the near term . 27 homebuilding gross margin excluding impairments and abandonments and interest for the fiscal year ended september 30 , 2019 was 19.7 % , down from 21.2 % in the prior year . we experienced a softening of demand for new homes in early fiscal 2019 in many of our markets . we responded by offering price reductions and sales incentives in order to stimulate sales demand which has resulted in lower gross margins than the comparable prior year period . in addition , we also experienced some cost pressures related to labor and materials and a slight shift in geographic mix . we continue to take action to mitigate these pressures through our efforts to reduce construction costs , improve cycle time , and reduce incentives where feasible . sg & a for the fiscal year ended september 30 , 2019 was 11.6 % of total revenue compared with 11.8 % a year earlier . the decrease in sg & a as a percentage of total revenue was due to our continued focus on improving overhead cost management in relation to our revenue growth . capital efficiency , debt reduction , and share repurchases . we continue to employ a number of strategies to improve capital efficiency , including the use of option contracts , acquisition of shorter duration land parcels , and activation of previously land held for future development communities . in addition , during the first quarter of fiscal 2019 , our board of directors approved a share repurchase program that authorizes us to repurchase up to $ 50.0 million of our outstanding common stock . as part of this program , we repurchased a total of $ 34.6 million of our common stock during the first three quarters of 2019 through accelerated share repurchases ( asr ) , a 10b5-1 plan , and open market transactions . during fiscal 2019 , we also refinanced our unsecured senior notes due 2022 and repurchased $ 51.3 million of our senior notes , which generated approximately $ 15.0 million in annual interest savings ( see note 8 of the notes to our consolidated financial statements in this form 10-k for discussion of debt activity ) . we expect to reduce outstanding debt during fiscal 2020 by more than we did in fiscal 2019 , with a goal of having less than $ 1.0 billion of outstanding debt over time . seasonal and quarterly variability : our homebuilding operating cycle generally reflects escalating new order activity in the second and third fiscal quarters and increased closings in the third and fourth fiscal quarters . the following tables present new order and closings data for the periods presented : replace_table_token_8_th 28 results of continuing operations the following table summarizes certain key income statement metrics for the periods presented : replace_table_token_9_th ( a ) homebuilding gross margin for fiscal 2019 was impacted by $ 110.0 million of impairments primarily related to impairments recorded in the second quarter for certain projects in progress in california . ( b ) calculated as land sales and other gross profit ( loss ) divided by land sales and other revenue . land sales and other gross margin is shown as a significant negative percentage for fiscal 2019 due to the $ 38.6 million of impairments recorded in the second quarter related to land held for sale assets in california . ( c ) g & a was impacted in fiscal 2017 by a $ 2.7 million charge to write off a deposit on a legacy investment in a development site that we deemed uncollectible . ( d ) calculated as tax ( benefit ) expense for the period divided by ( loss ) income from continuing operations . due to a variety of factors , including the impact of discrete tax items on our effective tax rate , our income tax ( benefit ) expense is not always directly correlated to the amount of pretax ( loss ) income for the associated periods . 29 homebuilding operations data the following table summarizes net new orders and cancellation rates by reportable segment for the periods presented : replace_table_token_10_th net new orders for the year ended september 30 , 2019 increased to 5,576 , up 0.6 % from the year ended september 30 , 2018. the increase in net new orders was primarily driven by an increase in average active communities to 166 , up from 156 in the prior year . the slight increase also resulted from a lower cancellation rate in fiscal 2019. sales per active community per month were 2.8 for fiscal year 2019 compared to 3.0 for fiscal year 2018 , with no change in the west and slight decreases in the east and southeast segments . story_separator_special_tag future land and lot sales will depend on a variety of factors , including local market conditions , individual community performance , and changing strategic plans . operating ( loss ) income the table below summarizes operating ( loss ) income by reportable segment for the periods presented : replace_table_token_15_th ( a ) operating ( loss ) income for our east segment for the year ended september 30 , 2017 was impacted by a charge to g & a of $ 2.7 million related to the write-off of a deposit on a legacy investment in a development site that we deemed uncollectible . ( b ) corporate and unallocated operating loss includes amortization of capitalized interest and capitalized indirect costs , expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments , and certain other amounts that are not allocated to our operating segments . ( c ) operating ( loss ) income is impacted by impairment and abandonment charges incurred during the periods presented ( see note 5 of the notes to our consolidated financial statements in this form 10-k ) . our operating income decreased by $ 171.4 million to a loss of $ 89.9 million for the fiscal year ended september 30 , 2019 , compared to income of $ 81.5 million for fiscal 2018 . the decrease was primarily driven by the previously discussed decline in gross profit due to impairment charges recognized during the second quarter of fiscal 2019 , partially offset by lower sg & a costs compared to the prior year . commissions and g & a declined year-over-year as a percentage of total revenue by approximately 10 and 30 basis points . our operating income increased by $ 19.4 million to $ 81.5 million for the fiscal year ended september 30 , 2018 , compared to $ 62.1 million for fiscal 2017. the increase was primarily due to a $ 36.1 million increase in homebuilding profit , partially offset by a decrease in land sales and other gross profit , an increase in commissions expense on higher homebuilding revenue , and an increase in g & a costs due to overall business growth . however , commissions and g & a declined year-over-year as a percentage of total revenue by approximately 6 basis points and 44 basis points , respectively . also , as previously discussed , fiscal 2017 included a $ 2.7 million write-off of a deposit on a legacy investment in a development site that we deemed uncollectible . no such write-off was recognized during fiscal 2018. as a percentage of total revenue , our operating income was 3.9 % for fiscal 2018 compared to 3.2 % for fiscal 2017. below operating income , we had two noteworthy fluctuations between fiscal 2019 and fiscal 2018 as follows : ( 1 ) we experienced a decline in other expense , net , primarily attributable to a year-over-year decrease in interest costs not qualified for capitalization ; and ( 2 ) we recorded a loss of $ 24.9 million on the extinguishment of debt as compared to $ 27.8 million in the prior year due to the management of our debt portfolio . see the notes to our consolidated financial statements in this form 10-k for additional discussion of these matters . income taxes our income tax assets and liabilities and related effective tax rate are affected by various factors , the most significant of which is the valuation allowance recorded against a portion of our deferred tax assets . due to the effect of our valuation allowance adjustments beginning in fiscal 2008 , a comparison of our annual effective tax rates must consider the changes in our valuation allowance . as such , our effective tax rates have not been meaningful metrics , as our income tax expense/benefit was not directly correlated to the amount of pretax income or loss for the associated periods . beginning in fiscal 2016 , the company began using an annualized effective tax rate in interim periods to determine its income tax expense/benefit , which we believe more closely correlates with our periodic pretax income or loss . the annualized effective tax rate will continue to be impacted by discrete tax items . the income tax benefit recorded during the fiscal year ended september 30 , 2019 resulted from our loss from operations and the generation of additional federal tax credits . 35 the income tax expense recorded during our fiscal year ended september 30 , 2018 resulted from our income from operations and the remeasurement of deferred tax asset at the newly enacted 21.0 % federal tax rate , partially offset by the generation of federal tax credits and an additional benefit resulting from changes in our valuation allowance . the valuation allowance on all of our federal tax net operating losses and credits as well as portions of our state net losses was reduced due to our determination that it is more likely than not that these assets will be realized . the income tax expense recorded during our fiscal year ended september 30 , 2017 resulted from our income from operations , partially offset by the generation of federal tax credits and an additional benefit resulting from changes in our valuation allowance . our valuation allowance on our state net operating losses was reduced due to an increase in our estimate of utilization related to changes in our uncertain tax positions . refer to note 13 of the notes to consolidated financial statements in this form 10-k for a further discussion of our income taxes and valuation allowance changes . fiscal year ended september 30 , 2019 as compared to 2018 west segment : homebuilding revenue increased by 1.3 % for the fiscal year ended september 30 , 2019 compared to the prior fiscal year due to an increase in asp of 2.6 % , partially offset by a 1.2 % decrease in closings

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

debt in september 2019 , the company entered into an unsecured amortizing term loan agreement in an aggregate principal amount of $ 150.0 million maturing in september 2022 with annual repayment installment provisions and a fixed rate of 4.875 % . in september 2019 , we also issued and sold $ 350.0 million aggregate principal amount of 7.25 % unsecured senior notes due october 2029 at par ( before underwriting and other issuance costs ) through a private placement to qualified institutional buyers ( the 2029 notes ) . using the proceeds from the term loan agreement , the 2029 notes and cash on hand , we redeemed our outstanding 8.75 % unsecured senior notes due march 2022 of $ 500.0 million , and recorded a loss on debt extinguishment of $ 25.2 million , which was net of a $ 1.9 million non-cash write-off of debt issuance and discount costs . as a result , the company terminated , cancelled , and discharged all of its obligations under the 2022 notes . during fiscal 2019 , we also redeemed the following debt issuances , which resulted in a net reduction of our outstanding debt of $ 51.3 million after considering the issuances described above : ( 1 ) all of our unsecured senior notes due february 2023 , which had a balance of $ 24.8 million as of the beginning of the current fiscal year ; ( 2 ) $ 20.4 million of our unsecured senior notes due march 2025 , which had a balance of $ 250.0 million as of the beginning of the current fiscal year ; and ( 3 ) $ 6.0 million of our unsecured senior notes due october 2027 , which had a balance of $ 400.0 million as of the beginning of the current fiscal year . additionally , we redeemed $ 2.9 million of loans secured by real estate during the fiscal year . these redemptions resulted in a net loss on debt extinguishment of $ 0.3 million . we generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings .

in may 2011 , citadel issued 71,000,000 common shares to our sole officer gary deroos for services rendered . citadel recorded compensation expense of $ 3,550,000 according to the latest private placement per share amount of $ 0.05 given the common stock was not traded on an exchange . in july 2011 , citadel issued 11,000 common shares to a third party for consulting services . citadel recorded consulting expense in an amount equal to the fair market value of $ 1,100 according to the closing price on the date of issuance of $ 0.10 per share . in september 2011 , citadel increased its number of authorized common shares to 1,000,000,000. f-10 in september 2011 , citadel issued 100,000,000 shares of common stock to our sole officer gary deroos for services rendered . citadel recorded compensation expense in an amount equal to the fair market value of $ 13,500,000 according to the closing price of $ 0.135 per share on the date of issuance . in september 2011 , citadel issued 100,000 shares of common stock to a third party for consulting services . citadel recorded consulting expense in the amount equal to the fair market value of $ 14,500 according to the closing price of $ 0.145 per share on the date of issuance . note 3. income taxes income tax expense for the years ended september 30 , 2011 and 2010 is as follows : replace_table_token_9_th f-11 a reconciliation of the actual taxes to the statutory u.s. taxes for the period ended september 30 , 2011 and 2010 is as follows : replace_table_token_10_th as of september 30 , 2011 citadel has a current tax receivable of $ 7,713 and at september 30 , 2010 , citadel had a current tax liability of $ 62,405 . for the period of january 1 , 2009 through august 31 , 2009 , citadel was taxed as a sole proprietorship whereby components of income and expense were passed through and taxed at the owner level . deferred income taxes are not significant . note 4. subsequent events in november 2011 , citadel issued 3,000,000 shares of common stock to two third parties for consulting services . f-12 story_separator_special_tag the following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those financial statements appearing elsewhere in this form 10-k. this discussion contains forward-looking statements that involve significant risks and uncertainties . as a result of many factors , our actual results may differ materially from those anticipated in our forward-looking statements . general we have merchant-clients that use our terminals to process their credit card transaction which has allowed us to be profitable , even in our infancy . a further drop in u.s. economic activity beyond the severe slowdown since 2008 that has continued into much of 2011 will undoubtedly have an effect on our revenues , as we make our money principally on “residuals” . residuals are based off a pre-negotiated and contracted percentage rate for each transaction that our merchant-client incurs by its customers . although we have a standard contract , the rates at which we have negotiated with each of our merchant-clients may vary slightly . the main challenges we face are continued competition from new entrants into the industry , and limiting our exposure to any erosion of our client base as a result of any possible further deterioration of the economy . our other chief concern is competition . our industry has relatively low barriers to entry . we believe this may lead , in the near-term , to a further splintering of this market industry , but in the mid- to long-term will lead to a consolidation through mergers and acquisitions within this industry . we believe that by streamlining our operations into one public vehicle , we will be in a better position to maximize our value during this foreseen splintering , and then consolidating phases . executive overview our specific goal is to continue the expansion of our business by increasing our customer base of merchant-clients and continue to be on the lookout for acquisition targets . 10 results of operations revenues year ended september 30 , 2011 year ended september 30 , 2010 change % revenues $ 459,770 $ 337,288 $ 122,482 36.3 revenues increased by $ 122,482 , or 36.3 percent to $ 459,770 for the year ended september 30 , 2011 from $ 337,288 for the previous year ended september 30 , 2010. the revenue rate increased due to the number of clients and the visa/mastercard volume for our high volume customers . revenues are reported net of amounts paid to sponsor banks , as well as interchange and assessments paid to credit card associations ( mastercard and visa ) under revenue sharing agreements pursuant to which such parties receive payments based primarily on processing volume for particular groups of merchants . operating expenses year ended september 30 , 2011 year ended september 30 , 2010 change % operating expenses $ 24,913,836 $ 271,338 $ 24,642,498 9081 % our operating expenses increased from $ 271,338 for the year ended september 30 , 2010 to $ 24,913,836 for the year ended september 30 , 2011. our largest expenditure for both periods was executive compensation which consisted primarily of stock based compensation to our sole officer , mr. gary deroos of $ 24,445,000. story_separator_special_tag story_separator_special_tag in may 2011 , citadel issued 71,000,000 common shares to our sole officer gary deroos for services rendered . citadel recorded compensation expense of $ 3,550,000 according to the latest private placement per share amount of $ 0.05 given the common stock was not traded on an exchange . in july 2011 , citadel issued 11,000 common shares to a third party for consulting services . citadel recorded consulting expense in an amount equal to the fair market value of $ 1,100 according to the closing price on the date of issuance of $ 0.10 per share . in september 2011 , citadel increased its number of authorized common shares to 1,000,000,000. f-10 in september 2011 , citadel issued 100,000,000 shares of common stock to our sole officer gary deroos for services rendered . citadel recorded compensation expense in an amount equal to the fair market value of $ 13,500,000 according to the closing price of $ 0.135 per share on the date of issuance . in september 2011 , citadel issued 100,000 shares of common stock to a third party for consulting services . citadel recorded consulting expense in the amount equal to the fair market value of $ 14,500 according to the closing price of $ 0.145 per share on the date of issuance . note 3. income taxes income tax expense for the years ended september 30 , 2011 and 2010 is as follows : replace_table_token_9_th f-11 a reconciliation of the actual taxes to the statutory u.s. taxes for the period ended september 30 , 2011 and 2010 is as follows : replace_table_token_10_th as of september 30 , 2011 citadel has a current tax receivable of $ 7,713 and at september 30 , 2010 , citadel had a current tax liability of $ 62,405 . for the period of january 1 , 2009 through august 31 , 2009 , citadel was taxed as a sole proprietorship whereby components of income and expense were passed through and taxed at the owner level . deferred income taxes are not significant . note 4. subsequent events in november 2011 , citadel issued 3,000,000 shares of common stock to two third parties for consulting services . f-12 story_separator_special_tag the following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those financial statements appearing elsewhere in this form 10-k. this discussion contains forward-looking statements that involve significant risks and uncertainties . as a result of many factors , our actual results may differ materially from those anticipated in our forward-looking statements . general we have merchant-clients that use our terminals to process their credit card transaction which has allowed us to be profitable , even in our infancy . a further drop in u.s. economic activity beyond the severe slowdown since 2008 that has continued into much of 2011 will undoubtedly have an effect on our revenues , as we make our money principally on “residuals” . residuals are based off a pre-negotiated and contracted percentage rate for each transaction that our merchant-client incurs by its customers . although we have a standard contract , the rates at which we have negotiated with each of our merchant-clients may vary slightly . the main challenges we face are continued competition from new entrants into the industry , and limiting our exposure to any erosion of our client base as a result of any possible further deterioration of the economy . our other chief concern is competition . our industry has relatively low barriers to entry . we believe this may lead , in the near-term , to a further splintering of this market industry , but in the mid- to long-term will lead to a consolidation through mergers and acquisitions within this industry . we believe that by streamlining our operations into one public vehicle , we will be in a better position to maximize our value during this foreseen splintering , and then consolidating phases . executive overview our specific goal is to continue the expansion of our business by increasing our customer base of merchant-clients and continue to be on the lookout for acquisition targets . 10 results of operations revenues year ended september 30 , 2011 year ended september 30 , 2010 change % revenues $ 459,770 $ 337,288 $ 122,482 36.3 revenues increased by $ 122,482 , or 36.3 percent to $ 459,770 for the year ended september 30 , 2011 from $ 337,288 for the previous year ended september 30 , 2010. the revenue rate increased due to the number of clients and the visa/mastercard volume for our high volume customers . revenues are reported net of amounts paid to sponsor banks , as well as interchange and assessments paid to credit card associations ( mastercard and visa ) under revenue sharing agreements pursuant to which such parties receive payments based primarily on processing volume for particular groups of merchants . operating expenses year ended september 30 , 2011 year ended september 30 , 2010 change % operating expenses $ 24,913,836 $ 271,338 $ 24,642,498 9081 % our operating expenses increased from $ 271,338 for the year ended september 30 , 2010 to $ 24,913,836 for the year ended september 30 , 2011. our largest expenditure for both periods was executive compensation which consisted primarily of stock based compensation to our sole officer , mr. gary deroos of $ 24,445,000. story_separator_special_tag

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

capital resources and liquidity overview over the course of the past three years of operations , including the operations of our predecessor company , we have not seen large , sudden shifts in revenues , although because our business model is reliant on the size of consumer transactions , we have seen , over the past three years , a slight , general increase in revenues likely owing to gradual inflation . we have made no attempt to quantify the amount of increase in our revenue that is due to inflation , although we suspect that it tracks the u.s. bureau of labor statistics consumer price index of approximately 5 % over the past three years , owing to the breadth of goods and services in which credit cards are used . our primary source of liquidity is cash from operations . were our residuals from credit card processing transactions to drop steeply , we would not be able to quickly or automatically make up the liquidity through other sources . however , through the economic downtrend , our cash flow has remained steady and has had a slight uptrend . 11 while one of the strong current trends in the consumer credit markets is for the paying down of personal debt and the increase of personal savings among consumers , our management believes , based only upon our own activity and revenue data which it has observed , that this trend is most likely occurring in the form of paying off a larger portion of each respective consumers ' monthly credit card bills , and not through a reduced use of the card itself . our management 's belief is that consumers still use their credit cards for purchases in a slow economic climate ; even increasing the amount they spend on a credit card , as a way to manage their own contracted or uncertain cash flows . our only debt relates to advances from our president and we have no loans or leases on property or equipment . we do not own any real estate . revenues are generated by residuals from banks that we have contracts with .

full-year 2016 net income decreased 4 % to $ 343 million and diluted net income per share decreased 1 % to $ 2.67 . all three of the company 's reportable segments experienced revenue growth , led by protiviti which increased 9 % in 2016 on a same-day , constant-currency basis compared to last year . during the third quarter of 2016 , the company successfully implemented a new front-office customer relationship management ( `` crm `` ) system for all temporary and permanent staffing branches in the united states as well as a new project management system for its risk consulting and internal audit services segment . the conversions went smoothly , and the company estimates that the related disruption and out-of-pocket costs had an adverse impact to its revenue and net income per share for the year of $ 9 million and $ 0.05 , respectively . we believe that the company is well positioned in the current macroeconomic environment . the united states economic backdrop during 2016 was stable for the company as real gross domestic product ( gdp ) grew 1.6 % , while the unemployment rate declined from 5.0 % in december 2015 to 4.7 % in december 2016 . in the united states , the number of job openings has exceeded the number of hires since february 2015 , creating competition for skilled talent that increases the company 's value to clients . a number of professional occupations are nearing full employment , which is placing pressure on the supply of available talent and increasing our value to clients . the secular demand for temporary staffing is also ongoing . the number of temporary workers as a percentage of the overall u.s. workforce remains near an all-time high , a sign employers are building flexible staffing options into their human resource plans with increasing frequency . 13 protiviti has successfully diversified its service offerings , built a loyal and growing client base , and is seeing steady demand in all of its major consulting solutions . protiviti provides clients with consulting solutions in finance , technology , operations , data , analytics , governance , risk and internal audit . we monitor various economic indicators and business trends in all of the countries in which we operate to anticipate demand for the company 's services . we evaluate these trends to determine the appropriate level of investment , including personnel , which will best position the company for success in the current and future global macroeconomic environment . the company 's investments in headcount are typically structured to proactively support and align with expected revenue growth trends . as such , during 2016 , temporary and permanent staffing headcount was relatively consistent with prior year-end levels , while risk consulting and internal audit headcount increased . we have limited visibility into future revenues not only due to the dependence on macroeconomic conditions noted above , but also because of the relatively short duration of the company 's client engagements . accordingly , we typically assess headcount and other investments on at least a quarterly basis . that said , based on current trends and conditions , we expect headcount levels for our full-time staff to remain relatively flat for each of our reporting segments throughout the first quarter of 2017. capital expenditures in 2016 totaled $ 83 million , approximately 60 % of which represented investments in software initiatives and technology infrastructure , both of which are important to the company 's future growth opportunities . major software initiatives include upgrades to enterprise resource planning and project management applications and the continued implementation of a global crm application . infrastructure and computer hardware initiatives for the year of 2016 have focused on delivering mobile technology to the company 's professional staff , upgrading data networks , and enhancing video capabilities and telecommunication systems . our major software initiatives were substantially implemented in 2016 , therefore we expect reduced capital expenditures in 2017. capital expenditures also included amounts spent on tenant improvements and furniture and equipment in the company 's leased offices . we currently expect that 2017 capital expenditures will range from $ 65 million to $ 75 million . critical accounting policies and estimates as described below , the company 's most critical accounting policies and estimates are those that involve subjective decisions or assessments . accounts receivable allowances . the company maintains allowances for estimated losses resulting from ( i ) the inability of its customers to make required payments , ( ii ) temporary placement sales adjustments , and ( iii ) permanent placement candidates not remaining with the client through the 90-day guarantee period , commonly referred to as “ fall offs ” . the company establishes these allowances based on its review of customers ' credit profiles , historical loss statistics and current trends . the adequacy of these allowances is reviewed each reporting period . historically , the company 's actual losses and credits have been consistent with these allowances . as a percentage of gross accounts receivable , the company 's accounts receivable allowances totaled 4.5 % and 4.7 % as of december 31 , 2016 and 2015 , respectively . as of december 31 , 2016 , a five-percentage point deviation in the company 's accounts receivable allowances balance would have resulted in an increase or decrease in the allowance of $ 1.7 million . although future results can not always be predicted by extrapolating past results , management believes that it is reasonably likely that future results will be consistent with historical trends and experience . however , if the financial condition of the company 's customers were to deteriorate , resulting in an impairment of their ability to make payments , or if unexpected events or significant future changes in trends were to occur , additional allowances may be required . income tax assets and liabilities . story_separator_special_tag in the u.s. , 2016 revenues increased 2.0 % on an as reported basis and 1.9 % on a same-day basis , compared to 2015 . for the company 's international operations , 2016 revenues increased 4.2 % on an as reported basis and 6.9 % on a same-day , constant-currency basis , compared to 2015 . permanent placement staffing revenues were $ 419 million for the year ended december 31 , 2016 , decreasing by 0.5 % compared to revenues of $ 421 million for the year ended december 31 , 2015 . key drivers of permanent placement staffing revenues consist of the number of candidate placements and average fees earned per placement . on a same-day , constant-currency basis , permanent placement revenues increased 0.3 % for 2016 compared to 2015 . the decrease in as reported revenue was driven primarily by a decrease in number of placements , partially offset by an increase in average fees earned per placement . in the u.s. , 2016 revenues increased 0.3 % on an as reported basis and 0.1 % on a same-day basis , compared to 2015 . for the company 's international operations , 2016 revenues decreased 2.3 % on an as reported basis , and on a same-day , constant-currency basis increased 0.6 % , compared to 2015 . historically , demand for permanent placement services is even 17 more sensitive to economic and labor market conditions than demand for temporary and consulting staffing and this is expected to continue . risk consulting and internal audit services revenues were $ 804 million for the year ended december 31 , 2016 , increasing by 8.3 % compared to revenues of $ 743 million for the year ended december 31 , 2015 . key drivers of risk consulting and internal audit services revenues are the billable hours worked by consultants on client engagements and average hourly bill rates . on a same-day , constant-currency basis , risk consulting and internal audit services revenues increased 8.5 % for 2016 compared to 2015 , due primarily to an increase in number of hours worked , partially offset by a decrease in average hourly bill rates . in the u.s. , 2016 revenues increased 8.0 % on an as reported basis , or 7.9 % on a same-day basis , compared to 2015 . for the company 's international operations , 2016 revenues increased 9.6 % on an as reported basis and 11.7 % on a same-day , constant-currency basis , compared to 2015 . a reconciliation of the non-gaap year-over-year revenue growth rates to the as reported year-over-year revenue growth rates for the year ended december 31 , 2016 , is presented in the following table : replace_table_token_4_th gross margin . the company 's gross margin dollars were $ 2.16 billion for the year ended december 31 , 2016 , up 2.2 % from $ 2.11 billion for the year ended december 31 , 2015 . contributing factors for each reportable segment are discussed below in further detail . gross margin dollars from the company 's temporary and consultant staffing represent revenues less direct costs of services , which consist of payroll , payroll taxes and benefit costs for temporary employees , and reimbursable expenses . the key drivers of gross margin are : i ) pay/bill spreads , which represent the differential between wages paid to temporary employees and amounts billed to clients ; ii ) fringe costs , which are primarily composed of payroll taxes and benefit costs for temporary and consultant staffing employees ; and iii ) conversion revenues , which are earned when a temporary position converts to a permanent position with the company 's client . gross margin dollars for the company 's temporary and consultant staffing division were $ 1.51 billion for the year ended december 31 , 2016 , up 3.2 % from $ 1.46 billion for the year ended december 31 , 2015 . as a percentage of revenues , gross margin dollars for temporary and consultant staffing were 37.5 % in 2016 , up from 37.2 % in 2015 . this year-over-year improvement in gross margin percentage of 0.3 % was primarily attributable to higher pay/bill spreads and lower payroll taxes and workers compensation costs , partially offset by lower conversion revenues as a percentage of applicable revenue in 2016 compared to 2015 . gross margin dollars from permanent placement staffing represent revenues less reimbursable expenses . gross margin dollars for the company 's permanent placement staffing division were $ 419 million for the year ended december 31 , 2016 , down 0.5 % from $ 421 million for the year ended december 31 , 2015 . because reimbursable expenses for permanent placement staffing services are de minimis , the decrease in gross margin dollars is substantially explained by the decrease in revenues previously discussed . gross margin dollars for risk consulting and internal audit services represent revenues less direct costs of services , which consist primarily of professional staff payroll , payroll taxes , benefit costs and reimbursable expenses . the primary drivers of 18 risk consulting and internal audit services gross margin are : i ) the relative composition of and number of professional staff and their respective pay and bill rates ; and ii ) staff utilization , which is the relationship of time spent on client engagements in proportion to the total time available for the company 's risk consulting and internal audit services staff . gross margin dollars for the company 's risk consulting and internal audit division were $ 231 million for the year ended december 31 , 2016 , up 0.4 % from $ 230 million for the year ended december 31 , 2015 . as a percentage of revenues , gross margin dollars for risk consulting and internal audit services were 28.7 % in 2016 , down from 31.0 % in 2015 . the decline in 2016 gross margin percentage compared to 2015 was

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash and cash equivalents were $ 260 million , $ 225 million , and $ 287 million at december 31 , 2016 , 2015 and 2014 , respectively . operating activities provided $ 442 million during the year ended december 31 , 2016 , offset by $ 112 million and $ 288 million of net cash used in investing activities and financing activities , respectively . operating activities provided $ 438 million during the year ended december 31 , 2015 , offset by $ 118 million and $ 369 million of net cash used in investing activities and financing activities , respectively . operating activities provided $ 341 million during the year ended december 31 , 2014 , offset by $ 89 million and $ 230 million of net cash used in investing activities and financing activities , respectively . operating activities—net cash provided by operating activities for the year ended december 31 , 2016 , was $ 442 million . this was composed of net income of $ 343 million adjusted upward for non-cash items of $ 113 million , offset by net cash used in changes in working capital of $ 14 million . net cash provided by operating activities for the year ended december 31 , 2015 , was composed ofnet income of $ 358 million adjusted upward for non-cash items of $ 89 million , offset by net cash used in changes in working capital of $ 9 million .

examples include accounts maintained under the uniform gift to minors act ( ugma ) or uniform transfer to minors act ( utma ) , guardianship , conservatorship and trust arrangements and pension or profit plan for small business accounts . brokerage accounts — accounts maintained by the company on behalf of clients for securities brokerage activities . the primary types of brokerage accounts are cash accounts , margin accounts , ira accounts and beneficiary accounts . futures accounts are sub-accounts associated with a brokerage account for clients who wish to trade futures and or options on futures . cash accounts — brokerage accounts that do not have margin account approval . client assets — the total value of cash and securities in brokerage accounts . client cash and money market assets — the sum of all client cash balances , including client credit balances and client cash balances swept into insured deposit accounts or money market mutual funds . client credit balances — client cash held in brokerage accounts , excluding balances generated by client short sales on which no interest is paid . interest paid on client credit balances is a reduction of net interest revenue . client credit balances are included in “payable to clients” on our consolidated balance sheets . client margin balances — the total amount of cash loaned to clients in margin accounts . such loans are secured by client assets . interest earned on client margin balances is a component of net interest revenue . client margin balances are included in “receivable from clients , net” on our consolidated balance sheets . daily average revenue trades ( “darts” ) — total trades divided by the number of trading days in the period . this metric is also known as average client trades per day . ebitda — ebitda ( earnings before interest , taxes , depreciation and amortization ) is a non-gaap financial measure . we consider ebitda to be an important measure of our financial performance and of our ability to generate cash flows to service debt , fund capital expenditures and fund other corporate investing and financing activities . ebitda is used as the denominator in the consolidated leverage ratio calculation for covenant purposes under our holding company 's senior revolving credit facility . ebitda eliminates the non-cash effect of tangible asset depreciation and amortization and intangible asset amortization . ebitda should be considered in addition to , rather than as a substitute for , pre-tax income , net income and cash flows from operating activities . eps excluding amortization of intangible assets — earnings per share ( “eps” ) excluding amortization of intangible assets is a non-gaap financial measure . we define eps excluding amortization of intangible assets as earnings ( loss ) per share , adjusted to remove the after-tax effect of amortization of acquired intangible assets . we consider eps excluding amortization of intangible assets an important measure of our financial performance . amortization of acquired intangible assets is excluded because we believe it is not indicative of underlying business performance . eps excluding amortization of intangible assets should be considered in addition to , rather than as a substitute for , gaap earnings per share . eps from ongoing operations — eps from ongoing operations is a non-gaap financial measure . we define eps from ongoing operations as earnings ( loss ) per share , adjusted to remove any significant unusual gains or charges . we consider eps from ongoing operations an important measure of the financial performance of our ongoing business . unusual gains and charges are excluded because we believe they are not likely to be indicative of the ongoing operations of our business . eps from ongoing operations should be considered in addition to , rather than as a substitute for , gaap earnings per share . fee-based investment balances — client assets invested in money market mutual funds , other mutual funds and company programs such as advisordirect ® and amerivest , ® on which we earn fee revenues . fee revenues earned on these balances are included in investment product fees on our consolidated statements of income . funded accounts — all open client accounts with a total liquidation value greater than zero . 26 futures accounts — sub-accounts maintained by the company on behalf of clients for trading in futures and or options on futures . each futures account must be associated with a brokerage account . futures accounts are not counted separately for purposes of the company 's client account metrics . insured deposit account — the company is party to an insured deposit account ( “ida” ) agreement with td bank usa , n.a . ( “td bank usa” ) , td bank , n.a . and the toronto-dominion bank ( “td” ) . under the ida agreement , td bank usa and td bank , n.a . ( together , the “depository institutions” ) make available to clients of the company fdic-insured money market deposit accounts as either designated sweep vehicles or as non-sweep deposit accounts . the company provides marketing , recordkeeping and support services for the depository institutions with respect to the money market deposit accounts . in exchange for providing these services , the depository institutions pay the company an aggregate marketing fee based on the yield earned on the client ida assets , less the actual interest paid to clients , a servicing fee to the depository institutions and the cost of fdic insurance premiums . interest rate-sensitive assets — consist of spread-based assets and client cash invested in money market mutual funds . investment product fees — revenues earned on fee-based investment balances . investment product fees include fees earned on money market mutual funds , other mutual funds and through company programs such as advisordirect ® and amerivest ® . story_separator_special_tag significant judgment is required in making these estimates , and the actual cost of resolving a matter may ultimately differ materially from the amount accrued . valuation of guarantees we enter into guarantees in the ordinary course of business , primarily to meet the needs of our clients and to manage our asset-based revenues . we record a liability for the estimated fair value of the guarantee at its inception . if actual results differ significantly from these estimates , our results of operations could be materially affected . for further details regarding our guarantees , see the following sections under item 8 , financial statements and supplementary data — notes to consolidated financial statements : “guarantees” under note 15 — commitments and contingencies and “insured deposit account agreement” under note 19 — related party transactions . results of operations conditions in the u.s. equity markets significantly impact the volume of our clients ' trading activity . there is a direct correlation between the volume of our clients ' trading activity and our results of operations . we can not predict future trading volumes in the u.s. equity markets . if client trading activity increases , we expect that it would have a positive impact on our results of operations . if client trading activity declines , we expect that it would have a negative impact on our results of operations . changes in average balances , especially client margin , credit , insured deposit account and mutual fund balances , may significantly impact our results of operations . changes in interest rates also significantly impact our results of operations . we seek to mitigate interest rate risk by aligning the average duration of our interest-earning assets with that of our interest-bearing liabilities . we can not predict the direction of interest rates or the levels of client balances . if interest rates rise , we generally expect to earn a larger net interest spread . conversely , a falling interest rate environment generally would result in our earning a smaller net interest spread . financial performance metrics pre-tax income , net income , earnings per share and ebitda are key metrics we use in evaluating our financial performance . ebitda is a non-gaap financial measure . we consider ebitda to be an important measure of our financial performance and of our ability to generate cash flows to service debt , fund capital expenditures and fund other corporate investing and financing activities . ebitda is used as the denominator in the consolidated leverage ratio calculation for covenant purposes under our holding company 's senior revolving credit facility . ebitda eliminates the non-cash effect of tangible asset depreciation and amortization and intangible asset amortization . ebitda should be considered in addition to , rather than as a substitute for , pre-tax income , net income and cash flows from operating activities . 31 the following table sets forth ebitda in dollars and as a percentage of net revenues for the periods indicated , and provides reconciliations to net income , which is the most directly comparable gaap measure ( dollars in millions ) : replace_table_token_6_th our ebitda increased 17 % for fiscal 2013 compared to fiscal 2012 , primarily due to a 5 % increase in net revenues and $ 57 million of net gains on investments , while operating expenses were effectively unchanged . the increase in net revenues was primarily due to an 8 % increase in transaction-based revenues and a 3 % increase in asset-based revenues , partially offset by a 13 % decrease in other revenues . detailed analysis of our operating results is presented later in this discussion . our diluted earnings per share was $ 1.22 , $ 1.06 and $ 1.11 for fiscal years 2013 , 2012 and 2011 , respectively . higher ebitda was partially offset by a higher effective income tax rate for fiscal 2013 , resulting in a 15 % increase in net income compared to fiscal 2012. our effective income tax rate for fiscal 2012 was significantly lower than normal , primarily due to $ 19 million of favorable resolutions of state income tax matters and a $ 3 million benefit resulting from the reversal of a valuation allowance related to a capital loss carryover . these items favorably impacted diluted eps for fiscal 2012 by approximately four cents per share . based on our expectations for net revenues and expenses , we expect diluted earnings per share to range from $ 1.20 to $ 1.40 for fiscal year 2014. details regarding our fiscal year 2014 expectations for net revenues and expenses are presented later in this discussion . operating metrics our largest sources of revenues are asset-based revenues and transaction-based revenues . for fiscal 2013 , asset-based revenues and transaction-based revenues accounted for 55 % and 42 % of our net revenues , respectively . asset-based revenues consist of ( 1 ) net interest revenue , ( 2 ) insured deposit account fees and ( 3 ) investment product fees . the primary factors driving our asset-based revenues are average balances and average rates . average balances consist primarily of average client margin balances , average segregated cash balances , average client credit balances , average client insured deposit account balances , average fee-based investment balances and average securities borrowing and lending balances . average rates consist of the average interest rates and fees earned and paid on such balances . the primary factors driving our transaction-based revenues are total client trades and average commissions and transaction fees per trade . we also consider client account and client asset metrics , although we believe they are generally of less significance to our results of operations for any particular period than our metrics for asset-based and transaction-based revenues . asset-based revenue metrics we calculate the return on our interest-earning assets and our insured deposit account balances using a measure we refer to as net interest margin . net interest margin

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources as a holding company , td ameritrade holding corporation conducts substantially all of its business through its operating subsidiaries , principally its broker-dealer subsidiaries . we have historically financed our liquidity and capital needs primarily through the use of funds generated from subsidiary operations and from borrowings under our credit agreements . we have also issued common stock and long-term debt to finance mergers and acquisitions and for other corporate purposes . our liquidity needs during fiscal 2013 were financed primarily from our subsidiaries ' earnings , cash on hand and our parent company 's revolving credit facility . we repaid $ 250 million of 2.950 % senior notes due december 1 , 2012 with cash on hand . we financed our payment of a $ 0.50 per share special cash dividend on december 31 , 2012 by borrowing $ 275 million on our parent company 's revolving credit facility , which we repaid in full during fiscal 2013. we funded a portion of the repayment in part using $ 69 million of cash consideration we received in connection with knight capital group , inc. 's july 1 , 2013 merger with getco holding company , llc . for more information regarding the knight-getco merger , see note 7 — investments available-for-sale under item 8 , financial statements and supplementary data — notes to consolidated financial statements . we plan to finance our capital and liquidity needs in fiscal 2014 primarily from our subsidiaries ' earnings , cash on hand , and borrowings on our parent company and or broker-dealer revolving credit facilities . dividends from our subsidiaries are the primary source of liquidity for the parent company . some of our subsidiaries are subject to requirements of the securities and exchange commission ( “sec” ) , the financial industry regulatory authority ( “finra” ) , the commodity futures trading commission ( “cftc” ) , the national futures association ( “nfa” ) and other regulators relating to liquidity , capital standards and the use of client funds and securities , which may limit funds available for the payment of dividends to the parent company .

we completed patient enrollment in a phase 2 , randomized , double-blind , placebo-controlled clinical trial evaluating retaspimycin hcl in combination with docetaxel , a chemotherapy , compared to placebo and docetaxel in 226 patients with second- or third-line non-small cell lung cancer ( nsclc ) , who are naive to docetaxel treatment and have a history of heavy smoking . we stratified patients in our phase 2 trial by squamous cell carcinoma and adenocarcinoma based on results from our phase 1b trial in which we observed partial responses in patients with squamous cell carcinoma . in addition , we are prospectively evaluating a novel biomarker that we believe may be predictive of response . we expect to report topline overall survival data from this trial in the first half of 2013. we are also enrolling patients in a phase 1b/2 trial to explore the safety and efficacy of retaspimycin hcl in combination with everolimus , an inhibitor of the mammalian target of rapamycin ( mtor ) , pathway , in nsclc patients with a kras gene mutation . the objective of this phase 1b/2 trial is to determine the recommended dose for the combination treatment and to evaluate the safety and clinical activity of retaspimycin hcl in combination with everolimus . we expect to provide an update from this phase 1b/2 trial in the first half of 2013. in addition to our clinical stage programs , we have multiple innovative projects in earlier stages of development . through our internal discovery efforts , we also discovered ipi-940 , a novel , orally available inhibitor of faah . it is believed that inhibition of faah may enable the body to bolster its own analgesic and anti-inflammatory response , and may have applicability in a broad range of painful or inflammatory conditions . we are currently seeking potential partnering opportunities for our faah program . in june 2012 , we voluntarily stopped all company-sponsored clinical trials of saridegib , our lead hedgehog pathway inhibitor . strategic alliances millennium in july 2010 , we entered into a development and license agreement with intellikine , inc. , or intellikine , under which we obtained rights to discover , develop and commercialize pharmaceutical products targeting the delta and or gamma isoforms of pi3k , including ipi-145 . we paid intellikine a $ 13.5 million up-front license fee . the entirety of this fee was included as research and development expense in the year ended december 31 , 2010 , although $ 8.5 million of this fee was paid in january 2011. during the second half of 2011 , we paid intellikine $ 4.0 million in milestone payments associated with the initiation of two phase 1 studies of ipi-145 , which we recorded as research and development expense . in january 2012 , intellikine was acquired by takeda pharmaceutical company limited , or takeda , acting through its millennium business unit . we refer to our pi3k program licensor as millennium . in december 2012 , we amended and restated our development and license agreement with millennium . under the original agreement , we obtained worldwide development and commercialization rights to millennium 's portfolio of inhibitors of the delta and or gamma isoforms of pi3k for all indications , and we conducted a collaborative research program with millennium to identify compounds directed to pi3k-delta and or pi3k-gamma which meet certain selectivity criteria , with such research collaboration under the original agreement set to expire in july 2013. also under the original agreement , neither we nor millennium were permitted to research , develop or commercialize products directed pi3k-delta and or pi3k-gamma which meet certain selectivity criteria , other than the compounds subject to the collaboration , except that millennium was permitted to research , develop or commercialize such products that it was researching , developing or commercializing on its own or with a third party prior to its acquisition of intellikine . 45 under the terms of the amended and restated agreement , we retained our worldwide development and commercialization rights for products arising from the agreement for all therapeutic indications . we and millennium will no longer conduct the collaborative research program and the restrictions on each party 's ability to research , develop and commercialize products directed to the delta and or gamma isoforms of pi3k that meet certain selectivity criteria have terminated , subject , in the case of millennium , to the exclusive licenses granted to us under the amended and restated agreement . additionally , under the amended and restated agreement , millennium waived the option it had under the original agreement to convert , upon payment of an option fee , its royalty interest in u.s. sales of pi3k products and its right to receive certain milestone payments with respect to such products into the right to share in 50 % of profits and losses on u.s. development and commercialization of those pi3k products for which the first phase 2 clinical trial , as defined in the original agreement , was conducted in an oncology indication , and to participate in up to 30 % of the detailing effort for these products in the united states . in consideration of such waiver we have agreed to pay to millennium $ 15 million payable in installments . we have paid $ 1.7 million of the $ 15 million during the year ended december 31 , 2012. additionally , under the amended and restated agreement we have paid millennium a $ 5 million milestone payment associated with the initiation of our phase 2a clinical trial of ipi-145 in patients with mild , allergic asthma . under the terms of the original agreement , the initiation of the phase 2a trial in asthma would not have required a milestone payment . story_separator_special_tag financial overview revenue all of our revenue to date has been derived from license fees , the reimbursement of research and development costs , contract service revenue and milestone payments received from our collaboration partners . license fees were recognized as revenue ratably over the expected research and development period under our arrangement with mundipharma and purdue . because our agreements with mundipharma and purdue also provided for funding for our research and development efforts , we recognized this cost reimbursement as revenue in the period earned in proportion to our forecasted total expenses as compared to the total research funding budget for the year . in the future , we may generate revenue from a combination of product sales , research and development support services and milestone payments in connection with strategic relationships , and royalties resulting from the sales of products developed under licenses of our intellectual property . we expect that any potential future revenue we generate will fluctuate from year to year as a result of the timing and amount of license fees , research and development reimbursement , milestone and other payments earned under our collaborative or strategic relationships , and the amount and timing of payments that we earn upon the sale of our products , to the extent any are successfully commercialized . research and development expense we are a drug discovery and development company . our research and development expense primarily consists of the following : compensation of personnel associated with research activities ; clinical testing costs , including payments made to contract research organizations ; costs of purchasing laboratory supplies and materials ; costs of manufacturing product candidates for preclinical testing and clinical studies ; costs associated with the licensing of research and development programs ; preclinical testing costs , including costs of toxicology studies ; fees paid to external consultants ; fees paid to professional service providers for independent monitoring and analysis of our clinical trials ; costs for collaboration partners to perform research activities , including development milestones for which a payment is due when achieved ; depreciation of equipment ; and allocated costs of facilities . 50 general and administrative expense general and administrative expense primarily consists of compensation of personnel in executive , finance , accounting , legal , information technology infrastructure , corporate communications , corporate development , human resources and commercial functions . other costs include facilities costs not otherwise included in research and development expense , and professional fees for legal and accounting services . general and administrative expense also consists of the costs of maintaining our intellectual property portfolio . other income and expense interest and investment income typically consists of interest earned on cash , cash equivalents and available-for-sale securities , net of interest expense , and amortization of warrants . interest expense included amortization of the loan commitment asset from purdue entities , net , from april 2009 through november 2011 when we drew down the full $ 50 million loan available under the line of credit agreement . interest expense also included accrued interest on the long-term debt , including amortization of the debt discount , through september 7 , 2012 when the debt was extinguished . income from massachusetts tax incentive award represents the pro-rata amount earned for an award we received for headcount growth . critical accounting policies and significant judgments and estimates the following discussion and analysis of our financial condition and results of operations is based on our financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of these financial statements requires us to make judgments , estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes . on an ongoing basis , we evaluate our estimates , including those related to revenue recognition , accrued expenses , and assumptions in the valuation of stock-based compensation . we base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances . actual results could differ from those estimates . differences between actual and estimated results have not been material and are adjusted in the period they become known . we believe that the following accounting policies and estimates are most critical to understanding and evaluating our reported financial results . please refer to note 2 to our consolidated financial statements for a description of our significant accounting policies . revenue recognition to date , all of our revenue has been generated under research collaboration agreements . the terms of these research collaboration agreements may include payment to us of non-refundable , up-front license fees , funding or reimbursement of research and development efforts , milestone payments if specified objectives are achieved , and or royalties on product sales . on january 1 , 2011 , we adopted on a prospective basis a newly issued accounting standard related to multiple-deliverable revenue arrangements . we apply this standard to new revenue arrangements or material modifications of existing revenue arrangements . this standard eliminates the requirement to establish the fair value of undelivered products and services and instead provides for separate revenue recognition based upon our best estimate of the selling price for an undelivered item when there is no other means to determine the fair value of that undelivered item . under our strategic alliance with mundipharma and purdue , we recognized revenues from non-refundable , up-front license fees on a straight-line basis over the contracted or estimated period of performance , which was the research and development term . we regularly considered whether events warranted a change in the estimated period of performance under an agreement . such a change would have caused us to modify the period of time over which we recognized revenue from the up-front license fee on a prospective basis and would , in turn , result in changes in our quarterly and annual results . we recognized

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources we have not generated any revenue from the sale of drugs to date , and we do not expect to generate any such revenue for the next several years , if at all . we have instead relied on the proceeds from sales of equity securities , interest on investments , up-front license fees , expense reimbursement , milestones and cost sharing under our collaborations and debt to fund our operations . our available-for-sale debt securities primarily trade in liquid markets , and the average days to maturity of our portfolio , as of december 31 , 2012 , is less than six months . because our product candidates are in various stages of clinical and preclinical development and the outcome of these efforts is uncertain , we can not estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether , or when , we may achieve profitability . 56 our significant capital resources are as follows : december 31 , 2012 december 31 , 2011 ( in thousands ) cash , cash equivalents and available-for-sale securities $ 326,635 $ 115,937 working capital 311,086 88,995 replace_table_token_6_th cash flows the principal use of cash in operating activities in all periods presented was related to our research and development programs . on july 17 , 2012 , we , mundipharma , and purdue mutually agreed to terminate our strategic alliance agreements , and as a result , mundipharma discontinued all research and development funding thereafter . during the years ended december 31 , 2012 , 2011 and 2010 , we received research and development funding from mundipharma and purdue totaling $ 55 million , $ 85 million and $ 65 million , respectively .

furthermore , we launched the connected farm application for smartphone platforms which gives farmers an easy-to-use tool to capture field data for later viewing and analysis online , while also providing agronomists with access to additional data they can use to better assess the needs of their customers . in our mobile solutions segment , our acquisition of trucking industry enterprise software tmw systems will further expand our transportation and logistics reach . tmw 's software capability spans the entire surface transportation lifecycle , delivering visibility , control and decision support for the intricate relationships and complex processes involved in the movement of freight . tmw 's enterprise software currently integrates with trimble 's t & l solutions on many fleets and when combined will jointly serve more than 3,000 fleets around the world . 29 in our advanced devices segment , we introduced our next-generation uhf rfid reader module which is designed to be embedded into a wide variety of handheld , portable and stationary devices . the exceptionally small size and powerful performance of the mercury6e-micro yields increased efficiency , reduced development costs and time-to-market advantages for rfid applications . bringing existing technology to new geographic markets we continue to position ourselves in newer geographic markets that will serve as important sources of future growth . in our engineering and construction segment , we further expanded our network of sitech technology dealers during the year by adding new dealerships to serve geographic markets such as bahrain , kuwait , qatar , united arab emirates , tunisia and siberia . we also expanded coverage of our satellite-delivered trimble rtx technology to most of the world . this technology enables the trimble xfill service , a new technique in surveying that allows surveyors to continue working in the event the primary correction stream is not available . in our field solutions segment , our high-accuracy centerpoint rtx correction service is also now available worldwide for agriculture customers . this gps and glonass-enabled correction service is delivered via cellular communications and is currently certified for use in 38 countries on 5 continents . in our mobile solutions segment , we announced that holcim services ( south asia ) limited , a unit of holcim group , one of the largest global cement manufacturers , will deploy the trimble trako fleet management and visual cargo solutions in their outbound logistics fleet that transports cement to various destinations across india . our acquisition of plancal corporation ( headquartered in horgen , switzerland ) , a leading 3d cad/cae and erp software provider for the mechanical , electrical , and plumbing ( mep ) and hvac industries also helps to broaden our industry-leading bim to field solutions for mep and hvac contractors in western europe . we also continue to focus on expansion initiatives in africa , china , india , the middle-east , russia , south america and south east asia . recent development on february 11 , 2013 , our board of directors approved a 2-for-1 split of all outstanding shares of our common stock . each shareholder of record of our common stock on the close of business on march 6 , 2013 will be entitled to receive one additional share of common stock for every outstanding share held on the record date . the distribution of the new shares will occur on march 20 , 2013 and trading will begin on a split-adjusted basis on march 21 , 2013. all shares and per share information presented herein does not reflect the upcoming stock split . critical accounting policies and estimates our accounting policies are more fully described in note 2 of the notes to the consolidated financial statements . the preparation of financial statements and related disclosures in conformity with u.s. generally accepted accounting principles requires us to make judgments , assumptions , and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes to the consolidated financial statements . we consider the accounting polices described below to be our critical accounting policies . these critical accounting policies are impacted significantly by judgments , assumptions , and estimates used in the preparation of the consolidated financial statements , and actual results could differ materially from the amounts reported based on these policies . revenue recognition we recognize product revenue when persuasive evidence of an arrangement exists , shipment has occurred , the fee is fixed or determinable , and collectibility is reasonably assured . in instances where final acceptance of the product is specified by the customer or is uncertain , revenue is deferred until all acceptance criteria have been met . contracts and or customer purchase orders are used to determine the existence of an arrangement . shipping documents and customer acceptance , when applicable , are used to verify delivery . we assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment . we assess collectibility based primarily on the creditworthiness of the customer as determined by credit checks and analyses , as well as the customer 's payment history . revenue for orders is generally not recognized until the product is shipped and title has transferred to the buyer . we bear all costs and risks of loss or damage to the goods up to that point . our shipment terms for u.s. orders and international orders fulfilled from our european distribution center typically provide that title passes to the buyer upon delivery of the goods to the carrier named by the buyer at the named place or point . if no precise point is indicated by the buyer , delivery is deemed to occur when the carrier takes the goods into its charge from the place determined by us . other shipment terms may provide that title passes to the buyer upon delivery of the goods to the buyer . story_separator_special_tag replace_table_token_4_th basis of presentation we have a 52-53 week fiscal year , ending on the friday nearest to december 31 , which for fiscal 2012 was december 28 , 2012. fiscal 2012 , 2011 , and 2010 were all 52-week years . revenue beginning in the first quarter of fiscal 2012 , we have presented revenue separately for products , services and subscriptions . prior year amounts have been reclassified to conform to the current year presentation . in fiscal 2012 , total revenue increased by $ 396.0 million , or 24 % , to $ 2.04 billion from $ 1.64 billion in fiscal 2011. of this increase , product revenue increased $ 221.1 million , or 16 % , service revenue increased $ 103.8 million , or 65 % , and subscription revenue increased $ 71.2 million , or 51 % . the product and service revenue increase in fiscal 2012 as compared to fiscal 2011 was driven by organic growth and acquisitions not applicable in the prior periods including tekla and peoplenet which were both acquired in the third quarter of 2011. subscription revenue increased primarily due to organic growth and peoplenet . on a segment basis , the increase in fiscal 2012 was primarily due to stronger results from the engineering and construction , field solutions and mobile solutions segments . engineering and construction revenue increased $ 182.9 million , or 20 % , field solutions increased $ 68.2 million , or 16 % , mobile solutions increased $ 129.6 million , or 59 % , and advanced devices increased $ 15.3 million , or 15 % , as compared to fiscal 2011. revenue growth within engineering and construction was driven by growth from all main product categories , particularly sales of heavy and highway and vertical construction solutions , as well as the impact of acquisitions . field solutions revenue increased primarily due to continued strength in the agriculture market driven by continued strength in commodity prices and farmer income and to a lesser extent , a full year of revenue from tekla . mobile solutions revenue increased primarily due to peoplenet 's continued organic growth as well as the incremental impact of the peoplenet acquisition itself , which closed in the third quarter of fiscal 2011. to a lesser extent , the fourth quarter 2012 tmw acquisition also had an impact on mobile solutions revenue growth . advanced devices revenue increased primarily due to unusually stronger sales of timing devices related to cellular infrastructure build-outs and to a lesser extent , stronger sales of embedded devices . in fiscal 2011 , total revenue increased by $ 350.1 million , or 27 % , to $ 1.64 billion from $ 1.29 billion in fiscal 2010. of this increase , product revenue increased $ 255.5 million , or 23 % , service revenue increased $ 49.9 million , or 46 % , and subscription revenue increased $ 44.8 million , or 47 % . the product and service revenue increase in fiscal 2011 as compared to fiscal 2010 was driven by organic growth and acquisitions not applicable in the prior periods including tekla and peoplenet which were both acquired in the third quarter of 2011. subscription revenue increased primarily due to organic growth and peoplenet . on a segment basis , the increase in fiscal 2011 was primarily due to stronger results from the engineering and construction and field solutions segments . engineering and construction revenue increased $ 187.4 million , or 26 % , field solutions increased $ 95.6 million , or 30 % , mobile solutions increased $ 64.3 million , or 41 % , and advanced devices increased $ 2.8 million , or 3 % , as compared to fiscal 2010. revenue growth within engineering and construction was driven by strong organic growth due to expanded distribution , improved end user markets and acquisitions , including tekla . sales were strong in the u.s. and europe for heavy and highway and survey products . additionally , field solutions revenue increased primarily due to the increased demand 34 for agricultural products as relatively high commodity prices led to good farmer income and spending . mobile solutions revenue increased primarily due to the peoplenet acquisition and growth within the existing business , partially offset by the loss of a large customer in the second quarter of 2010 . * during fiscal 2012 , sales to customers in the united states represented 47 % , europe represented 22 % , asia pacific represented 16 % and other regions represented 15 % of our total revenue . during fiscal 2011 , sales to customers in the united states represented 45 % , europe represented 24 % , asia pacific represented 15 % , and other regions represented 16 % of our total revenue . during the 2010 fiscal year , sales to customers in the united states represented 46 % , europe represented 22 % , asia pacific represented 18 % , and other regions represented 14 % of our total revenue . we anticipate that sales to international customers will continue to account for a significant portion of our revenue . * no single customer accounted for 10 % or more of our total revenue in fiscal 2012 , 2011 and 2010. it is possible , however , that in future periods the failure of one or more large customers to purchase products in quantities anticipated by us may adversely affect the results of operations . gross margin our gross margin varies due to a number of factors including product mix , pricing , distribution channel , production volumes , new product start-up costs , and foreign currency translations . in fiscal 2012 , our gross margin increased by $ 216.6 million as compared to fiscal 2011 primarily due to the increase in total revenue . gross margin as a percentage of total revenue was 51.3 % in fiscal 2012 and 50.5 % in fiscal 2011. the

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash used in investing activities was $ 764.3 million for fiscal 2012 , as compared to $ 773.6 million for fiscal 2011 , primarily due to cash used for business and intangible asset acquisitions . fiscal 2012 acquisitions included tmw , sketchup , and other acquisitions . fiscal 2011 acquisitions included tekla , peoplenet and other acquisitions . cash used in investing activities was $ 773.6 million for fiscal 2011 , as compared to $ 156.4 million for fiscal 2010. the increase of $ 617.2 million was primarily due to higher cash used for business and intangible asset acquisitions in fiscal 2011 , with the largest cash requirement due to the tekla acquisition . financing activities cash provided by financing activities was $ 426.4 million for fiscal 2012 , as compared to $ 464.2 million during fiscal 2011. the decrease of $ 37.8 million was primarily due to a decrease in debt proceeds , net of repayments , primarily used for acquisitions , slightly offset by an increase in proceeds received from the issuance of common stock related to stock option exercises . cash provided by financing activities was $ 464.2 million for fiscal 2011 , as compared to cash used of $ 20.2 million during fiscal 2010. the increase of $ 484.3 million was primarily due to an increase in debt proceeds , net of repayments , primarily used for acquisitions , partially offset by the repurchase of common stock during fiscal 2010 which was not applicable in 2011. accounts receivable and inventory metrics replace_table_token_11_th accounts receivable days sales outstanding were down at 57 days at the end of fiscal 2012 , as compared to 58 days at the end of fiscal 2011. our accounts receivable days sales outstanding are calculated based on ending accounts receivable , net , divided by revenue for the fourth fiscal quarter , times a quarterly average of 91 days .

before july 15 , 2016 , the issuers may redeem up to 35 % of the aggregate principal amount of the 2019 notes with the net proceeds of certain equity offerings at a price equal to 104.8750 % of the aggregate principal amount thereof , plus accrued and unpaid interest to the date of redemption , provided that at least 65 % of the aggregate principal amount of the 2019 notes originally issued remains outstanding immediately after such redemption . on or after february 15 , 2017 , the issuers may redeem some or all of the 2017 notes at a price equal to 100.000 % of the principal amount of the 2017 notes , plus accrued and unpaid interest . if the issuers experience a change of control , the issuers must offer to purchase for cash all or any part of each holder 's 2019 notes and 2017 notes at a purchase price equal to 101 % of the principal amount of 2019 notes and 2017 notes , plus accrued and unpaid interest . on january 29 , 2014 , the issuers closed on the sale of $ 1.35 billion aggregate principal amount of 5.875 % senior notes due 2022 ( the “ 2022 notes ” ) pursuant to the purchase agreement , dated january 22 , 2014 ( the “ 2022 notes purchase agreement ” ) , by and among the issuers , icahn enterprises holdings , as guarantor , and jefferies llc , as initial purchaser ( the “ 2022 notes purchaser ” ) . the 2022 notes were priced at 100.000 % of their face amount . the net proceeds from the sale of the 92 2022 notes were approximately $ 1.34 billion after deducting the initial purchaser 's discount and commission and estimated fees and expenses related to the offering . interest on the 2022 notes will be payable on february 1and august 1 of each year , commencing august 1 , 2014. the 2022 notes purchase agreement contains customary representations , warranties and covenants of the parties and indemnification and contribution provisions whereby the issuers and the guarantor , on the one hand , and the 2022 notes purchaser , on the other , have agreed to indemnify each other against certain liabilities . see note 20 , `` subsequent events - icahn enterprises , `` for further discussion . results of operations consolidated financial results overview our operating businesses are managed on a decentralized basis . due to the structure of our business , we discuss the results of operations below by individual reportable segments . refer to note 4 , “ operating units , ” to the consolidated financial statements for a description of each of our reporting segments and note 15 , `` segment and geographic reporting , `` for a reconciliation of each of our reporting segment 's results of operations to our consolidated results . the following table summarizes total revenues , net income ( loss ) and net income ( loss ) attributable to icahn enterprises for each of our reporting segments and our holding company for the years ended december 31 , 2013 , 2012 and 2011. eliminations relate to the unrealized gains recorded by our investment segment for its investment in tropicana from the date of its acquisition of a controlling interest in tropicana through the date that its investment in tropicana was transferred to us . refer to note 4 , “ operating units , ” to the consolidated financial statements for further discussion . replace_table_token_7_th ( 1 ) we consolidated cvr effective may 4 , 2012 . 93 icahn enterprises holdings due to the structure of our business , the consolidated results of operations for icahn enterprises and icahn enterprises holdings are substantially the same . differences primarily relate to non-cash portions of interest expense , and are only reflected in the results of operations for our holding company . the following table summarizes total revenues , net income ( loss ) and net income ( loss ) attributable to icahn enterprises holdings for our holding company and the consolidated totals with respect to icahn enterprises holdings for the years ended december 31 , 2013 , 2012 and 2011. replace_table_token_8_th investment our investment segment is comprised of various private investment funds , including icahn partners l.p. ( `` icahn partners `` ) , icahn partners master fund lp , icahn partners master fund ii lp and icahn partners master fund iii lp ( collectively , the `` master funds `` , and together with icahn partners , the `` investment funds `` ) , through which we invest our proprietary capital . effective january 1 , 2014 , icahn partners master fund ii lp and icahn partners master fund iii lp were merged with and into icahn partners . we and certain of mr. icahn 's wholly owned affiliates are the sole investors in the investment funds . icahn onshore lp and icahn offshore lp ( together , the `` general partners `` ) act as the general partner of icahn partners and the master funds , respectively . the general partners provide investment advisory and certain administrative and back office services to the investment funds but do not provide such services to any other entities , individuals or accounts . interests in the investment funds are not offered to outside investors . mr. icahn , along with his affiliates ( excluding icahn enterprises and icahn enterprises holdings ) , makes investments in the investment funds . as of december 31 , 2013 and 2012 , the total fair market value of investments in the investment funds made by mr. icahn and his affiliates was approximately $ 4.7 billion and $ 3.5 billion , respectively . story_separator_special_tag in addition , as of december 31 , 2013 , as a result of purchasing common units of cvr refining as discussed below , icahn enterprises and icahn enterprises holdings owned approximately 4.0 % of the total outstanding common stock of cvr refining directly . equity offerings on january 23 , 2013 , cvr refining completed its initial public offering ( `` cvr refining ipo `` ) of its common units representing limited partner interests , resulting in gross proceeds of $ 600 million , before giving effect to underwriting discounts and other offering expenses . included in these proceeds is $ 100 million paid by us for the purchase of common units of cvr 98 refining in connection with the cvr refining ipo . additionally , on january 30 , 2013 , additional common units of cvr refining were issued pursuant to the underwriters ' exercise of their overallotment option , resulting in gross proceeds of $ 90 million , before giving effect to underwriting discounts and other offering costs . on may 20 , 2013 , cvr refining completed an underwritten offering of its common units representing limited partner interests , and on june 10 , 2013 issued additional common units pursuant to the underwriters ' exercise of their overallotment option , resulting in gross proceeds of $ 406 million before giving effect to underwriting discounts and offering expenses . in addition , we purchased approximately $ 62 million of common units of cvr refining in a privately negotiated transaction with cvr . cvr refining did not receive any of the proceeds from the sale of common units of cvr refining to us . on may 28 , 2013 , coffeyville resources , llc ( “ crllc ” ) , a wholly owned subsidiary of cvr , completed a secondary offering of common units of cvr partners . additionally , the underwriters were granted an option to purchase additional units at the public offering price , which expired unexercised at the end of the option period . the gross proceeds to crllc from this secondary offering were $ 302 million . cvr partners did not receive any of the proceeds from the sale of common units by crllc . major influences on results of operations our energy segment 's earnings and cash flows from its petroleum operations are primarily affected by the relationship between refined product prices and the prices for crude oil and other feedstocks . in the nitrogen fertilizer business , earnings and cash flows from operations are primarily affected by the relationship among nitrogen fertilizer product prices , on-stream factors and direct operating expenses . the prices of crude oil and other feedstocks and refined product prices are also affected by other factors , such as product pipeline capacity , local market conditions and the operating levels of competing refineries . crude oil costs and the prices of refined products have historically been subject to wide fluctuations . widespread expansion or upgrades of competitors ' facilities , price volatility , international political and economic developments and other factors are likely to continue to play an important role in refining industry economics . these factors can impact , among other things , the level of inventories in the market , resulting in price volatility and a reduction in product margins . moreover , the refining industry typically experiences seasonal fluctuations in demand for refined products , such as increases in the demand for gasoline during the summer driving season and for home heating oil during the winter , primarily in the northeast . in addition to current market conditions , there are long-term factors that may impact the demand for refined products . these factors include mandated renewable fuels standards , proposed climate change laws and regulations , and increased mileage standards for vehicles . the petroleum refining industry is also subject to the epa 's renewable fuel standard ( “ rfs ” ) , which requires it to blend “ renewable fuels ” with its transportation fuels or purchase renewable energy credits , known as renewable identification numbers ( `` rins `` ) , in lieu of blending . the epa is required to determine and publish the applicable annual renewable fuel percentage standards for each compliance year by november 30 for the forthcoming year . the percentage standards represent the ratio of renewable fuel volume to gasoline and diesel volume . on august 6 , 2013 , the epa announced the final 2013 renewable fuel percentage standard would be raised to 9.74 % . in 2013 , the wynnewood refinery was subject to the rfs for the first time , unless the wynnewood refinery receives a further extension of its `` hardship `` relief for 2013 based on the `` disproportionate economic impact `` of the rule on the wynnewood refinery . during 2013 , the cost of rins became extremely volatile as the epa 's proposed renewable fuel volume mandates approached the `` blend wall `` . the blend wall refers to limitations on adding increasing amounts of ethanol into the transportation fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as e10 ( gasoline containing 10 percent ethanol by volume ) . the epa has published the proposed volume mandates for 2014 , which are generally lower than the volumes for 2013 and lower than statutory mandates . the price of rins decreased significantly after the 2014 proposed mandate was published ; however , rin prices have remained volatile and have increased in 2014. the cost of rins for the year ended december 31 , 2013 and for the period may 5 , 2012 through december 31 , 2012 was approximately $ 181 million and $ 14 million , respectively . the future cost of rins for the petroleum business is difficult to estimate . in particular , the cost of rins is dependent upon a variety of factors , which include the availability of rins for

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

debt , '' to the consolidated financial statements , and to the allocation of the general partner interest , which is reflected as an aggregate 1.99 % general partner interest in the financial statements of icahn enterprises . in addition to the above , mr. icahn and his affiliates owned 101,872,909 , or approximately 87.9 % , of icahn enterprises ' outstanding depositary units as of december 31 , 2013 . we are a diversified holding company owning subsidiaries currently engaged in the following continuing operating businesses : investment , automotive , energy , metals , railcar , gaming , food packaging , real estate and home fashion . we also report the results of our holding company , which includes the results of certain subsidiaries of icahn enterprises and icahn enterprises holdings ( unless otherwise noted ) , and investment activity and expenses associated with the holding company . holding company icahn enterprises equity offerings on february 28 , 2013 , icahn enterprises entered into an underwriting agreement ( the “ february 2013 underwriting agreement ” ) with jefferies & company , inc. , providing for the issuance and purchase of an aggregate of 3,174,604 depositary units representing limited partner interests in icahn enterprises at a price to the public of $ 63.00 per depositary unit . the depositary units were delivered to the unitholders on march 6 , 2013. pursuant to the february 2013 underwriting agreement , icahn enterprises also granted jefferies & company , inc. a 30-day option to purchase up to 476,191 additional depositary units at the same public offering price , which expired unexercised .

the ultimate im pact of the pandemic and secondary social and economic effects on the company 's results of operations , financial position , liquidity and capital resources remains unclear and can not be reasonably determined or forecasted at this time . for a further discussion on the impact of the covid-19 pandemic on the company 's business , see “ liquidity , capital resources and financing activities ” and “ economic conditions ” included in this section and item 1a . risk factors . 33 from its formation in december 2017 through december 31 , 20 20 , t he company sold the following assets ( in thousands ) : replace_table_token_7_th manager in connection with the company 's separation from site centers , on july 1 , 2018 , the company entered into an external management agreement ( the “ external management agreement ” ) which , together with various property management agreements , governs the fees , terms and conditions pursuant to which site centers serves as the company 's manager . the company does not have any employees . in general , either the company or site centers may terminate these management agreements on june 30 , 2021 , or at the end of any six-month renewal period thereafter . pursuant to the external management agreement , the company pays site centers and certain of its subsidiaries a monthly asset management fee in an aggregate amount of 0.5 % per annum of the gross asset value of the company 's properties ( calculated in accordance with the terms of the external management agreement ) . the external management agreement also provides for the reimbursement of certain expenses incurred by site centers in connection with the services it provides to the company along with the payment of transaction-based fees to site centers in the event of any debt financings or change of control transactions . pursuant to the property management agreements , the company pays site centers and certain of its subsidiaries a monthly property management fee in an aggregate amount of 3.5 % and 5.5 % of the average gross monthly property revenue collected of the company 's continental u.s. properties and the puerto rico properties , respectively , during the most recent second or fourth quarter . the company agreed to pay an affiliate of site centers a supplemental monthly fee during the six-month periods ending december 31 , 2020 and june 30 , 2021 , in order to offset the decrease to the property management fee caused by the decrease in gross monthly property revenue collected in the second and fourth quarters of 2020 as a result of the covid-19 pandemic . 34 ( see note 12 “ transactions with site centers ” of the company 's consolidated financial statements included herein . ) the property management agreements also provide for the payment to site centers of certain leasing commissions and a disposition fee of 1 % of the gross sale s price of each asset sold by the company . retail environment and company fundamentals though leasing prospects are heavily dependent on local conditions , in general the company continues to see demand from tenants for its continental u.s. space , particularly as larger retailers incorporate omni-channel strategies that leverage brick and mortar infrastructure to drive incremental business . value-oriented larger tenants continue to take market share from conventional and national chain department stores . some conventional department stores and national chains have announced bankruptcies , store closures and or reduced expansion plans in recent years leading to a smaller overall number of tenants requiring large store formats . new demand for space at the company 's puerto rico properties is more limited , especially with respect to big box and national tenants as many of those tenants continue to evaluate their presence and operating plans on the island . the company believes that occupancy , leasing spreads and collection rates within the company 's puerto rico portfolio ( especially its enclosed malls ) are likely to continue to lag those at continental u.s. shopping centers in 2021 as a result of reduced leasing activity both before and during the covid-19 pandemic and the impact of curfews and greater operating restrictions in place in puerto rico for most of 2020 and early 2021. the decrease in the company 's continental u.s. occupancy rate during 2020 primarily was due to the disposition of higher occupancy properties and a combination of tenant expirations and tenant bankruptcies . the increase in the occupancy rate for the company 's puerto rico portfolio during 2020 primarily was due to the disposition of a property with a lower occupancy rate , as well as new net leasing activity in excess of bankruptcies and expirations . the company has a significant number of leases expiring in the near term and expects continued volatility and pressure on leasing spreads in both the continental u.s. and puerto rico as the company seeks to prioritize occupancy over rental rate growth . as discussed above , many of the company 's tenants have been impacted by various actions taken by federal , state and local governments to limit the spread of covid-19 . the company 's tenant categories most significantly impacted by covid-19 are theaters , entertainment and restaurants , which collectively account for 18 % of the company 's annualized base rents . operating results for the company are discussed below in “ comparison of 2020 and 2019 results of operations . ” the following table lists the company 's 10 largest tenants based on total annualized rental revenues as of december 31 , 2020 : replace_table_token_8_th ( a ) includes walmart and sam 's club ( b ) includes t.j. maxx , marshalls and homegoods ( c ) includes gap and old navy critical accounting policies the combined and consolidated financial statements of the company include the accounts of the company and all subsidiaries where the company has financial or operating control . story_separator_special_tag ( c ) the hurricane property insurance income is more fully described in “ contractual obligations and other commitments ” later in this section and note 10 , “ commitments and contingencies , ” to the company 's combined and consolidated financial statements included herein . ( d ) primarily represents legal , audit , tax and compliance services and director compensation . ( e ) the disposition of shopping centers accounts for $ 12.7 million in the reduction of depreciation expense . other income and expenses ( in thousands ) replace_table_token_16_th ( a ) at december 31 , 2020 and 2019 , the interest rate of the company 's mortgage loan was 4.1 % and 4.4 % per annum , respectively . the decrease in interest expense primarily was due to reductions in the amount of debt outstanding during the periods and a decrease in the benchmark interest rate . interest costs capitalized in conjunction with capital projects were $ 0.1 million and $ 1.1 million for the years ended december 31 , 2020 and 2019 , respectively , primarily related to restoration work in puerto rico . ( b ) debt extinguishment costs were incurred in both years in connection with the prepayment of the mortgage loan with asset sale proceeds primarily related to the write-off of unamortized deferred financing costs . in addition , in 2019 , included debt extinguishment costs of $ 12.7 million , primarily recorded in connection with the company 's mortgage loan refinancing in march 2019 . ( c ) related to the sale of six assets and one outparcel for the year ended december 31 , 2020 , and 10 assets and two outparcels for the year ended december 31 , 2019. net ( loss ) income ( in thousands ) 2020 2019 $ change net ( loss ) income $ ( 93,554 ) $ 46,749 $ ( 140,303 ) the decrease in net income primarily was attributable to impairment charges , the impact of the covid-19 pandemic on operating results and the sale of assets , primarily offset by the 2019 hurricane insurance income recorded combined with a decrease in debt extinguishments costs related to the mortgage loan refinancing in 2019. non-gaap financial measures funds from operations and operating funds from operations definition and basis of presentation the company believes that funds from operations , or ffo , and operating ffo , both non-gaap financial measures , provide additional and useful means to assess the financial performance of reits . ffo and operating ffo are frequently used by the real estate industry , as well as securities analysts , investors and other interested parties , to evaluate the performance of reits . the company also believes that ffo and operating ffo more appropriately measure the core operations of the company and provide benchmarks to its peer group . 40 ffo excludes gaap historical cost depreciation and amortization of real estate and real estate investments , which assume that the value of real estate assets diminishes ratably over time . historically , however , real estate values have risen or fallen with market conditions , and many companies use different depreciable lives and methods . because ffo excludes depreciation and amortization unique to real estate and gains and losses from property dispositions , it can provide a performance measure that , when compared year over year , reflects the impact on operations from trends in occupancy rates , rental rates , operating costs , interest costs and acquisition , disposition and development activities . this provides a perspective of the company 's financial performance not immediately apparent from net income determined in accordance with gaap . ffo is generally defined and calculated by the company as net income ( loss ) ( computed in accordance with gaap ) , adjusted to exclude ( i ) gains and losses from disposition of real estate property and related investments , which are presented net of taxes , if any , ( ii ) impairment charges on real estate property and related investments and ( iii ) certain non-cash items . these non-cash items principally include real property depreciation and amortization of intangibles . the company 's calculation of ffo is consistent with the definition of ffo provided by nareit . the company believes that certain charges and income recorded in its operating results are not comparable or reflective of its core operating performance . operating ffo is useful to investors as the company removes non-comparable charges and income to analyze the results of its operations and assess performance of the core operating real estate portfolio . as a result , the company also computes operating ffo and discusses it with the users of its financial statements , in addition to other measures such as net income ( loss ) determined in accordance with gaap and ffo . operating ffo is generally defined and calculated by the company as ffo excluding certain charges and gains that management believes are not comparable and indicative of the results of the company 's operating real estate portfolio . such adjustments include gains/losses on the early extinguishment of debt , net hurricane-related activity , transaction costs and other restructuring type costs . the disclosure of these charges and income is generally requested by users of the company 's financial statements . the adjustment for these charges and income may not be comparable to how other reits or real estate companies calculate their results of operations , and the company 's calculation of operating ffo differs from nareit 's definition of ffo . additionally , the company provides no assurances that these charges and income are non-recurring . these charges and income could be reasonably expected to recur in future results of operations . these measures of performance are used by the company for several business purposes and by other reits . the company uses ffo and or operating ffo in part ( i ) as a disclosure to improve

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flow activity the company 's cash flow activities are summarized as follows ( in thousands ) : replace_table_token_20_th changes in cash flow compared to the prior comparable period are described as follows : operating activities : cash provided by operating activities decreased $ 43.2 million primarily due to the following : impact of the covid-19 pandemic on contractual obligations received from tenants ; decrease in income due to asset sales and offset by a reduction in interest expense due to debt repayments . investing activities : cash provided by investing activities decreased $ 75.2 million due to the following : decrease in hurricane insurance proceeds of $ 107.7 million ; decrease in proceeds from dispositions of real estate of $ 24.4 million and decrease in payments for real estate improvements primarily related to puerto rico of $ 56.9 million . financing activities : cash used for financing activities decreased by $ 35.8 million primarily due to the following : decrease in net repayments to site centers of $ 33.6 million ; decrease in debt repayments , net of proceeds from the 2019 refinancing and loan costs of $ 6.3 million and offset by an increase in dividends paid of $ 4.1 million .

we record revenue from the sale of food and beverages as products are sold . royalties are accrued as earned and are calculated each period based on restaurant sales . franchise fees from individual franchise sales is recognized upon the opening of the franchised restaurant when all material obligations and initial services to be provided by us have been performed . area development fees are dependent upon the number of restaurants in the territory , as are our obligations under the area development agreement . consequently , as obligations are met , area development fees are recognized proportionally with expenses incurred with the opening of each new restaurant and any royalty-free periods . we record gift cards under a dick 's wings system-wide program . gift cards sold are recorded as a gift card liability . when redeemed , the gift card liability account is offset by recording the transaction as revenue . breakage income represents the value associated with the portion of gift cards sold that will most likely never be redeemed . based on our historical gift card redemption patterns and the fact that our gift cards have no expiration dates or dormancy fees , we can reasonably estimate the amount of gift card balances for which redemption is remote and record breakage income based on this estimate . we update our estimate of the breakage rate periodically and , if necessary , adjusts the gift card liability balance accordingly . investment in paradise on wings on january 20 , 2014 , we purchased a 50 % ownership interest in paradise on wings , which is the franchisor of the wing nutz brand of restaurants . a description of our investment in paradise on wings is set forth herein under note 4. investment in paradise on wings in our consolidated financial statements . we accounted for our investment in paradise on wings under the equity method of accounting in accordance with asc topic 323 , investments – equity method and joint ventures ( “ asc 323 ” ) . asc 323 provides that investments be accounted for under the equity method of accounting when the investor has the ability to exert significant influence , but not control , over the operating and financial policies of the investee . the determination of the level of influence that an investor has over each equity method investment involves consideration of such factors as the investor 's ownership interest , representation on the board of directors , participation in policy-making decisions and material intercompany transactions . investments accounted for under the equity method are recorded at the fair value amount of the investor 's initial investment on the balance sheet and adjusted each period for the investor 's share of the investee 's income or loss . the investor 's share of the income or losses from equity investments is reported as a component of other income / ( expense ) in the statements of operations . contributions paid to , and distributions received from , equity investees are recorded as additions or reductions , respectively , to the respective investment balance . 44 we review our investment in paradise on wings for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable in accordance with asc 323. the standard for determining whether an impairment must be recorded under asc 323 is whether an “ other-than-temporary ” decline in value of the investment has occurred . the evaluation and measurement of impairments under asc 323 involves quantitative and qualitative factors and circumstances surrounding the investment , such as recurring operating losses , credit defaults and subsequent rounds of financing . if an unrealized loss on the investment is considered to be other-than-temporary , the loss is recognized in the period the determination is made and the value of the investment is reduced by the amount of the loss . acquisition of seediv on december 19 , 2016 , we acquired all of the issued and outstanding membership interests of seediv . a description of our acquisition of seediv is set forth herein under note 5. acquisition of seediv in our consolidated financial statements . we determined that the acquisition of seediv constituted a business combination as defined by asc topic 805 , business combinations ( “ asc 805 ” ) . we also determined that the acquisition of seediv constituted a transaction involving entities under common control for the reasons set forth herein under note 5. acquisition of seediv in our consolidated financial statements . under asc 805 , the assets acquired and liabilities assumed from entities under common control are recorded at their acquisition date carrying value . the carrying value of the assets acquired and liabilities assumed were determined in accordance with the provisions of asc topic 820 , fair value measurements and disclosures . under asc 805 , the excess of the purchase price over the fair value of the assets acquired is typically recognized as goodwill . however , under asc 805 , the excess of the purchase price over the fair value of the assets acquired can not be recognized as goodwill in a transaction involving entities under common control . accordingly , we recognized such excess as seediv compensation expense in accordance with the provisions of asc 805 and included this amount under general and administrative expenses . pursuant to the provisions of asc 805 , acquisition-related transaction costs and acquisition-related restructuring charges were not included as components of consideration transferred but were accounted for as expenses in the period in which the costs were incurred . stock-based compensation we account for employee stock-based compensation in accordance with the fair value recognition provisions of asc topic 718 , compensation – stock compensation ( “ asc 718 ” ) . story_separator_special_tag we recognized a gain on write-off of liabilities of $ 251,238 for the year ended december 31 , 2017. we did not recognize any gains on the settlement of litigation for the year ended december 31 , 2016. we do not expect to recognize any additional gains on write-off of liabilities during the next 12 months . loss from investment in paradise on wings loss from investment in paradise on wings consists of our share of the loss from our 50 % ownership interest in paradise on wings that we purchased on january 20 , 2014. loss from investment in paradise on wings was $ 222,685 for the year ended december 31 , 2016. we did not incur any loss from investment in paradise on wings for the year ended december 31 , 2017. we recognized an impairment charge for the full value of our investment in paradise on wings during the year ended december 31 , 2016 and sold our 50 % ownership interest in paradise on wings on october 1 , 2017. paradise on wings incurred additional losses for each of our fiscal quarters during the period commencing january 1 , 2017 and ending october 1 , 2017. as a result of our recognition of the impairment charge for the full value of our investment in paradise on wings and the continued loss that paradise on wings incurred thereafter , we did not recognize any further losses from our investment in paradise on wings during the year ended december 31 , 2017. in addition , because we sold our 50 % ownership interest in paradise on wings on october 1 , 2017 , we do not expect to recognize additional income and losses from our investment in paradise on wings during the next 12 months . a description of our investment in paradise on wings is set forth herein under note 4. investment in paradise on wings in our consolidated financial statements . 50 gain on settlement of litigation gain on settlement of litigation consists of the gains that we recognized on judgments in legal proceedings and settlements of legal proceedings . we recognized a gain on settlement of litigation of $ 82,642 for the year ended december 31 , 2016. we did not recognize any gains on the settlement of litigation for the year ended december 31 , 2017. the gain that we recognized during the year ended december 31 , 2016 related to a partial settlement of the damages sought by santander bank in connection with a complaint filed in january 2015. a summary of these legal proceedings is set forth herein under note 16. judgments in legal proceedings in our consolidated financial statements . we do not expect to recognize any additional gains or losses on settlement of legal proceedings during the next 12 months . gain on settlement of liabilities gain on settlement of liabilities consists of the gain that we realized upon entering into a settlement agreement with guiseppe cala with respect to several legal proceedings that had been initiated between us and mr. cala in 2009 and breaches of a different settlement agreement entered into between us and mr. cala in 2010 with respect to the such legal proceedings . we recognized a gain on settlement of liabilities of $ 175,449 for the year ended december 31 , 2016. we did not recognize any gain on the settlement of liabilities for the year ended december 31 , 2017. a description of the current settlement agreement , the 2010 settlement agreement and the legal proceedings is set forth herein under note 16. judgments in legal proceedings in our consolidated financial statements . we do not expect to generate any additional gain on settlement of liabilities during the next 12 months . gain on write-off of accounts payable gain on write-off of accounts payable consists of the gain that we realized upon the write-off of accounts payable in the amount of $ 251,238 that had been outstanding for more than five years . the statute of limitations applicable to these payables expired during the year ended december 31 , 2017 and we had not received any communications from any of the applicable vendors during the past five years . we determined that the possibility that any vendor would contact us seeking payment for any of such accounts payable and recover a judgment for such payment was remote . accordingly , we concluded that the $ 251,238 of accounts payable should be written off as of december 31 , 2017. we did not have any gain on the write-off of accounts payable for the year ended december 31 , 2016. a summary of this write-off is set forth herein under note 14. commitments and contingencies – accounts payable in our consolidated financial statements . we do not expect to generate any additional gains on write-offs of accounts payable during the next 12 months . 51 gain on write-off of stock subscriptions payable gain on write-off of stock subscriptions payable consists of the gain that we realized upon the write-off of a stock subscription payable in the amount of $ 150,000 that accrued under a consulting agreement executed in september 2011. we determined that the probability that we would have to issue any shares of common stock to the consultant , or pay any other form of consideration to the consultant , was remote . accordingly , we concluded that the $ 150,000 of stock subscription payable should be written off as of december 31 , 2017. we did not have any gain on write-off of stock subscriptions payable for the year ended december 31 , 2016. a summary of this write-off is set forth herein under note 11. capital stock in our consolidated financial statements . we do not expect to generate any additional gains on write-offs of stock subscriptions payable during the next 12 months . net income / ( loss ) we generated net income of $ 344,740 during the year ended december

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources since our inception , we have funded our operations primarily through cash generated by our operations , private sales of equity securities and the use of short- and long-term debt . net cash provided by operating activities was $ 248,345 during the year ended december 31 , 2017. net cash used by operating activities was $ 10,087 during the year ended december 31 , 2016. the difference of $ 258,432 was due primarily to an improvement of $ 1,158,453 for net income , and increases of $ 205,903 for stock compensation expense , $ 82,642 for gain on settlement of litigation , $ 175,449 for gain on settlement of liabilities and $ 178,785 for contingent consideration . this was partially offset by decreases of $ 222,685 for loss on investment in paradise on wings , $ 348,143 for loss on impairment of investment in paradise on wings , $ 251,309 for other compensation expense incurred in connection with our acquisition of seediv , $ 175,703 for accounts payable and accrued liabilities , and increases of $ 251,238 for gain on write-off of accounts payable , $ 81,373 for accounts receivable , $ 39,117 for ad fund receivable , and $ 150,000 for gain on write-off of stock subscriptions payable . net cash provided by investing activities was $ 48,147 during the year ended december 31 , 2017 compared to $ 38,132 during the year ended december 31 , 2016. the increase of $ 10,015 for net cash provided by investing activities was due primarily a decrease of $ 498,907 for the issuance of notes receivable and an increase of $ 24,000 for sales of investment in paradise on wings . this was partially offset by a decrease of $ 474,335 for the repayment of notes receivable and an increase of $ 34,133 for purchases of fixed assets .

based on the results of the impairment analysis performed on the goodwill , indefinite-lived intangible assets and amortizable intangible assets , these assets were written down to their estimated fair value . during 2002 , we recorded restructuring and other related charges of approximately $ 5.0 million . these charges consist of approximately $ 2.8 million of involuntary severance related costs , approximately $ 1.4 million of lease termination costs , approximately $ 704,000 of fixed asset write-offs and approximately $ 54,000 of other costs . the details of each of these charges are explained further in management 's discussion and analysis of 2002 compared to 2001. during the fourth quarter of 2002 , we wrote down approximately $ 33.2 million of impaired long-lived assets related to the goodwill , indefinite-lived intangible assets , amortizable intangible assets and fixed assets associated with the vqs acquisition . based on the declining historical and forecasted operating results of vqs as they related to earlier estimates , the economic condition of the telecommunications industry as a whole , and our 18 % reduction of vqs workforce , the estimated value of vqs 's goodwill , indefinite-lived intangible assets , amortizable intangible assets and fixed assets had decreased . based on the results of the impairment analysis performed on the goodwill , indefinite-lived intangible assets , amortizable intangible assets and fixed assets , these assets were written-down to their fair value . it is reasonably possible that we may incur additional impairment charges for long-lived assets , including goodwill , in future reporting periods . during 2002 , we paid $ 37.9 million to extinguish $ 59.4 million face value of convertible debt . as a result , we recorded an extraordinary gain of $ 12.5 million , net of tax expense of $ 8.3 million . the board of directors approved a stock repurchase program in october 2001 , authorizing us to repurchase up to 2,500,000 shares of our outstanding common stock for an aggregate purchase price not to exceed $ 5.0 million . during 2002 , we paid $ 2.8 million to repurchase 515,000 shares of our 24 outstanding common stock . as of december 31 , 2002 , cumulative repurchases under the stock repurchase program totaled 915,000 shares for an aggregate purchase price of $ 4.7 million . it is reasonably possible that we will repurchase additional shares of our outstanding common stock in future reporting periods . on a sequential basis , second quarter revenues in 2001 decreased from the prior quarter by 37 % and third quarter revenues in 2001 decreased from the second quarter by 4 % . in the quarter ended december 31 , 2001 , due to the acquisition of the vqs business on november 30 , 2001 , we recorded a sequential increase in revenues over prior quarter of 35 % . the sequential increase in revenues continued in the first two quarters of 2002 as revenues increased by 31 % and 3 % , respectively , however , revenues decreased by 11 % in the third quarter and 25 % in the fourth quarter sequentially . as we continue to be in a broad-based economic slowdown affecting most technology sectors and communications in particular , the levels of revenue we will be able to achieve going forward will depend to a great extent upon how long this slowdown will continue . critical accounting policies our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states of america . the preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities , revenues and expenses , and related disclosure of contingent assets and liabilities . on an on-going basis , we evaluate our estimates , including those related to revenue recognition , accounts receivable , inventories , investments , long-lived assets and goodwill , income taxes , restructuring and other related charges , and accounting for acquisitions . we base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . we believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements : revenue recognition . our revenue from product sales is generally recognized upon shipment providing that persuasive evidence of an arrangement exists , the sales price is fixed or determinable , collection is reasonably assured and title and risk of loss have passed to the customer . if we have a future obligation to install the system or to obtain customer acceptance , revenues are deferred until this obligation has been met . we do not offer rights of return on sales made through our direct sales force . however , we do offer quarterly return rights to a limited number of our indirect channel customers that allow the indirect channel customer to rotate a percentage of their inventory based on their prior quarter purchases . we provide for these return rights each quarter by deferring revenue equal to the estimated return amount . different assumptions and estimates regarding the collectibility of accounts receivable could change the timing and amount of revenue recognized ; see our discussion below regarding accounts receivable . 25 our products are generally shipped together as a bundled hardware and software solution . we offer a warranty on all of our products that generally provides for us to repair or replace any defective product within eighteen to twenty-four months of the invoice date . story_separator_special_tag at december 31 , 2002 , the remaining accrued balance for this charge was approximately $ 64,000 and is included in the consolidated balance sheet classification , `` accrued expenses and other liabilities . `` we expect to utilize the remaining accrued balance during 2003. as a result of the reduction in headcount , we had certain fixed assets that were no longer being utilized . these fixed assets consisted primarily of computer equipment , furniture and fixtures , and machinery and equipment , and they have been disposed of or set aside for disposal . the total charge for the fixed assets that was recorded as restructuring and other related charges in 2002 was approximately $ 704,000 and there was no remaining accrual balance related to this charge as of december 31 , 2002. during 2001 , as part of our strategic repositioning , we recorded restructuring and related charges for the difference between the committed lease payments and the estimated sub-lease rental income for leased facilities that we were no longer occupying . during 2002 , we updated our estimates of the sub-lease rental income based on current market conditions and determined the difference from the committed lease payments was larger than originally estimated . as a result , we recorded additional restructuring and related charges of approximately $ 1.4 million related to these idle leased facilities . at december 31 , 2002 , the remaining accrued balance for this charge , including the charge that was originally booked in 2001 , was approximately $ 1.6 million and is included in the consolidated balance sheet classification , `` accrued expenses and other liabilities . `` we expect to utilize the majority of the remaining accrued balance over the next three years . additional costs of approximately $ 54,000 have been charged to restructuring and other related charges . these costs consist of both legal costs incurred and license fee payments made related to a software license that will no longer be utilized . at december 31 , 2002 , the remaining accrued balance for this charge was approximately $ 25,000 and is included in the consolidated balance sheet classification , `` accrued expenses and other liabilities . `` we expect to utilize the remaining accrued balance during 2003. impairment charge during the second quarter of 2002 , we wrote down approximately $ 39.3 million of impaired long-lived assets related to the goodwill , indefinite-lived intangible assets and amortizable intangible assets associated with the iml acquisition . as a result of our planned intention to reduce overall workforce , including iml employees , the discontinuation of certain iml products as a part of our generally available product offering , continued declining revenues for iml products and the economic condition of the clec industry and vodsl market , the estimated value of iml 's goodwill , indefinite-lived intangible assets and amortizable intangible assets had decreased . based on the results of the impairment analysis performed , these assets were written down to their estimated fair value . $ 2.9 million of this charge is included in the consolidated statement of operations classification , `` costs of revenues , `` as it relates to the write down of acquired completed technology . 31 during the fourth quarter of 2002 , we wrote down approximately $ 33.2 million of impaired long-lived assets related to the goodwill , indefinite-lived intangible assets , amortizable intangible assets and fixed assets associated with the vqs acquisition . based on the declining historical and forecasted operating results of vqs as they related to earlier estimates , the economic condition of the telecommunications industry as a whole , and our 18 % reduction of vqs workforce , the estimated value of vqs 's goodwill , indefinite-lived intangible assets , amortizable intangible assets and fixed assets had decreased . based on the results of the impairment analysis performed , these assets were written-down to their fair value . $ 3.1 million of this charge is included in the consolidated statement of operations classification , `` costs of revenues , `` as it relates to the write down of acquired completed technology . it is reasonably possible that we may incur additional impairment charges for goodwill , indefinite-lived intangible assets , amortizable intangible assets and fixed assets in future reporting periods . other income ( expense ) , net other expense , reflecting net interest income , non-operating gains or losses and foreign exchange gains and losses , decreased to $ 619,000 for 2002 compared to $ 9.6 million for 2001. the decrease in expense is primarily due to the reclassification , on july 1 , 2002 , of a u.s. dollar denominated intercompany debt on the books of a canadian subsidiary from short-term to long-term . as a result of this reclassification , the gain or loss generated by the remeasurement of the debt into u.s. dollars at each reporting period is now being recorded as a component of accumulated other comprehensive income ( loss ) within stockholders ' equity . interest income decreased to $ 2.2 million for 2002 from $ 12.6 million for 2001 due to the decrease in our cash , cash equivalents and marketable securities during 2002. interest expense decreased to $ 5.8 million for 2002 compared to $ 9.4 million for 2001 primarily due to our repurchase of $ 59.4 million face value of convertible debt . included in other income and expense for 2002 is $ 3.8 million foreign currency translation gain generated on the intercompany debt related to the iml transaction prior to the reclassification of the debt from short-term to long-term , $ 399,000 write-down to fair market value of minority investments and $ 5.8 million of interest expense related to the convertible notes , including $ 682,000 of amortization of convertible debt issuance costs . included in other income and expense for 2001 is a $ 4.7 million foreign currency translation loss generated on the intercompany debt related to the

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources as of december 31 , 2002 , our principal sources of liquidity included cash and cash equivalents of $ 56.8 million and marketable securities of $ 29.1 million . we also have access to a bank line of credit for working capital purposes that was established in may 1999 and amended on november 5 , 2002. the current amendment provides for a $ 10.0 million line of credit , with $ 5.0 million of this credit facility available to the company at any time and the remaining $ 5.0 million available to the company based on a borrowing base calculation . borrowings under our line of credit bear interest at the bank 's floating rate of prime . we are subject to certain covenants under the agreement . these covenants require the maintenance of a specific equity ratio , timely financial reporting to the bank and the maintenance of $ 10 million minimum balance depository and operating accounts with the bank . as of december 31 , 2002 , we were in violation of the minimum balance covenant related to the line of credit and we received a waiver from the bank . we have since brought our account balance into compliance with the limits defined in the covenant . at december 31 , 2002 , there were no amounts currently outstanding on this line of credit . this credit agreement is subject to renewal on may 13 , 2003. we do not have any off-balance sheet financing arrangements , other than property operating leases that are disclosed in the contractual obligations table below and in our consolidated financial statements , nor do we have any transactions , arrangements or other relationships with any special purpose entities . cash provided by ( used in ) operations for the years ended december 31 , 2002 , 2001 and 2000 was ( $ 24.1 million ) , ( $ 35.4 million ) and $ 14.6 million , respectively . we incurred a net loss of $ 98.5 million , $ 142.7 million and $ 27.7 million for the years ended december 31 , 2002 , 2001 and 2000 , respectively .

as generally used in the energy industry and in this annual report , the acronyms below have the following meanings : /d = per day mmbbls = million barrels bbtus = billion british thermal units mmbpd = million barrels per day bcf = billion cubic feet mmbtus = million british thermal units bpd = barrels per day mmcf = million cubic feet mbpd = thousand barrels per day tbtus = trillion british thermal units 64 cautionary statement regarding forward-looking information this annual report on form 10-k for the year ended december 31 , 2016 ( our “ annual report ” ) contains various forward-looking statements and information that are based on our beliefs and those of our general partner , as well as assumptions made by us and information currently available to us . when used in this document , words such as “ anticipate , ” “ project , ” “ expect , ” “ plan , ” “ seek , ” “ goal , ” “ estimate , ” “ forecast , ” “ intend , ” “ could , ” “ should , ” “ would , ” “ will , ” “ believe , ” “ may , ” “ potential ” and similar expressions and statements regarding our plans and objectives for future operations are intended to identify forward-looking statements . although we and our general partner believe that our expectations reflected in such forward-looking statements are reasonable , neither we nor our general partner can give any assurances that such expectations will prove to be correct . forward-looking statements are subject to a variety of risks , uncertainties and assumptions as described in more detail under part i , item 1a of this annual report . if one or more of these risks or uncertainties materialize , or if underlying assumptions prove incorrect , our actual results may vary materially from those anticipated , estimated , projected or expected . you should not put undue reliance on any forward-looking statements . the forward-looking statements in this annual report speak only as of the date hereof . except as required by federal and state securities laws , we undertake no obligation to publicly update or revise any forward-looking statements , whether as a result of new information , future events or any other reason . overview of business we are a publicly traded delaware limited partnership , the common units of which are listed on the new york stock exchange ( “ nyse ” ) under the ticker symbol “ epd . ” we were formed in april 1998 to own and operate certain natural gas liquids ( “ ngls ” ) related businesses of epco and are a leading north american provider of midstream energy services to producers and consumers of natural gas , ngls , crude oil , petrochemicals and refined products . our midstream energy operations currently include : natural gas gathering , treating , processing , transportation and storage ; ngl transportation , fractionation , storage , and export and import terminals ( including those used to export liquefied petroleum gases , or “ lpg , ” and ethane ) ; crude oil gathering , transportation , storage , and export and import terminals ; petrochemical and refined products transportation , storage , export and import terminals , and related services ; and a marine transportation business that operates primarily on the u.s. inland and intracoastal waterway systems . our assets currently include approximately 49,300 miles of pipelines ; 260 mmbbls of storage capacity for ngls , crude oil , petrochemicals and refined products ; and 14 bcf of natural gas storage capacity . we conduct substantially all of our business through epo and are owned 100 % by our limited partners from an economic perspective . enterprise gp manages our partnership and owns a non-economic general partner interest in us . like many publicly traded partnerships , we have no employees . all of our management , administrative and operating functions are performed by employees of epco pursuant to an administrative services agreement ( the “ asa ” ) or by other service providers . our historical operations are reported under five business segments : ( i ) ngl pipelines & services , ( ii ) crude oil pipelines & services , ( iii ) natural gas pipelines & services , ( iv ) petrochemical & refined products services and ( v ) offshore pipelines & services . our business segments are generally organized and managed according to the types of services rendered ( or technologies employed ) and products produced and or sold . on july 24 , 2015 , we completed the sale of our gulf of mexico operations ( the “ offshore business , ” which primarily consisted of our offshore pipelines & services segment ) to genesis energy , l.p. ( “ genesis ” ) . our offshore business served drilling and development regions , including deepwater production fields , in the northern gulf of mexico offshore alabama , louisiana , mississippi and texas . these operations included approximately 2,350 miles of offshore natural gas and crude oil pipelines and six offshore hub platforms . our consolidated financial statements reflect ownership of the offshore business through july 24 , 2015. for additional information regarding sale of the offshore business , see note 5 of the notes to consolidated financial statements included under part ii , item 8 of this annual report . 65 each of our remaining business segments benefits from the supporting role of our related marketing activities . the main purpose of our marketing activities is to support the utilization and expansion of assets across our midstream energy asset network by increasing the volumes handled by such assets , which results in additional fee-based earnings for each business segment . story_separator_special_tag haynesville outlook the rig count in the haynesville shale region has increased recently as ownership of large parcels of producing acreage has changed hands . the rig count for february 2017 is 30 , which represents a 19 rig increase from the low of 11 rigs recorded in february 2016. drilling in the haynesville has benefitted from technological advances , which have improved natural gas recoveries per well and resulted in better returns on capital . with natural gas futures prices currently at approximately $ 3.00 per mmbtu , we believe haynesville natural gas production has reached its low point , and that volumes will begin to gradually increase in 2017. haynesville production peaked in november 2011 at approximately 7.8 bcf/d and is currently 3.9 bcf/d . until haynesville volumes return to near historical peak production , there is excess capacity of midstream infrastructure available in the region . rockies outlook rig counts have increased in both the piceance basin and the jonah and pinedale fields , although rig counts are still at depressed levels . drilling activity in the piceance basin increased from 2 rigs in may 2016 to 5 rigs in february 2017 , and in the jonah and pinedale fields increased from a combined 4 rigs in november 2016 to 8 rigs in february 2017. furthermore , drilling activity in the san juan basin declined from 2 rigs in november 2015 to 1 rig in february 2017. current rig counts in these producing regions will not be enough to offset natural production declines ; however , since the natural gas produced from these areas is often rich in ngl content , the recent increase in ngl prices may spur increased drilling activity in these regions . in addition , drilling economics in these regions should benefit as enhanced completion technologies now being employed in the gulf coast and midcontinent areas become more widespread in the western rockies , thus increasing returns on incremental capital invested . the rockies benefit from adequate natural gas and ngl pipeline infrastructure , resulting in favorable netback prices , which help the region compete with other north american plays where takeaway capacity may be constrained . like in other areas , higher energy prices could encourage changes in ownership by producers , which could also improve rig counts . as a result of higher energy commodity prices in the past few months and continued positive sentiment towards price stability , we expect an increase in producer investment and drilling activity in and around our assets in the permian , eagle ford , haynesville and rockies regions . furthermore , we expect that our assets in these areas are going to be very competitive in supplying services for the resulting new production . we also believe that basins located closest to prime markets on the u.s. gulf coast will be preferred by producers due to more favorable economics as compared to other more distant areas ( mostly due to lower transportation costs ) . demand side observations overall demand for petroleum products continues to increase at rates that have generally exceeded economists ' expectations . we believe the u.s. is very well situated to meet growing global petroleum demand . with the recent improvement in crude oil prices , the u.s energy information administration reports that u.s. crude oil production has started to increase . as u.s. crude oil production recovers , we expect that some of these new domestic barrels will supplant more of the country 's crude oil imports . we also expect u.s. refineries to operate at higher utilization rates as a result of strong u.s. motor fuels demand and growing global demand . in addition , as u.s. crude oil supplies increase , we also expect crude oil exports to grow , with likely markets being central and south america , asia and western europe where the lighter u.s. crudes make good feedstocks for their refining facilities . 70 in december 2015 , the u.s. government lifted its ban on exporting domestically produced crude oil . we believe that this should be beneficial to the domestic energy industry in general and to enterprise in particular . our marine terminal assets and related infrastructure are strategically located on the u.s. gulf coast . these assets could benefit from concurrent imports and exports of various grades of crude oil as ( i ) refineries optimize their crude oil input slate , ( ii ) trading companies import and export different grades of crude oil depending on global and regional supply-demand factors , and ( iii ) producers optimize their production depending on market price signals . with significant crude oil export capabilities at freeport , texas city , on the houston ship channel and at beaumont , texas , lifting of the export ban should have a beneficial impact on our crude oil pipeline , storage and marine terminal assets ( without any significant capital expenditure ) . however , this outlook could be muted if there is a prolonged decline in domestic crude oil drilling and production , or if overseas crude markets become oversupplied for an extended period and thus discounted from a price standpoint when compared to the u.s. gulf coast . furthermore , as several new world scale ethylene plants begin operations in the u.s. through the early 2020s , we expect growing domestic demand for ethane , which could in turn drive upstream ngl production increases supported by producer investment and higher rig counts . we also expect that global demand for heavier ngls ( butanes and natural gasoline ) will continue to increase supported by rising global economic activity . with respect to natural gas demand , we expect it to continue to increase in the form of u.s. power generation demand , growing industrial demand , exports to mexico and as liquefied natural gas , or lng . we believe u.s. producers can provide ample supplies of natural gas at very competitive prices to

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash consideration -- -- 2,416.8 equity consideration -- 1,408.7 2,171.5 capital spending for property , plant and equipment , net : growth capital projects ( 1 ) 2,722.7 3,540.0 2,502.8 sustaining capital projects ( 2 ) 261.4 271.6 361.2 investments in unconsolidated affiliates 138.8 162.6 722.4 other investing activities 0.4 5.3 5.8 total capital spending $ 4,123.3 $ 6,444.7 $ 8,180.5 ( 1 ) growth capital projects either ( a ) result in new sources of cash flow due to enhancements of or additions to existing assets ( e.g. , additional revenue streams , cost savings resulting from debottlenecking of a facility , etc . ) or ( b ) expand our asset base through construction of new facilities that will generate additional revenue streams and cash flows . ( 2 ) sustaining capital expenditures are capital expenditures ( as defined by gaap ) resulting from improvements to existing assets . such expenditures serve to maintain existing operations but do not generate additional revenues or result in significant cost savings . fluctuations in our spending for growth capital projects and investments in unconsolidated affiliates are explained in large part by increases or decreases in spending on major expansion projects . our most significant growth capital expenditures for the year ended december 31 , 2016 involved projects at our mont belvieu complex . fluctuations in spending for sustaining capital projects are explained in large part by the timing and cost of pipeline integrity and similar projects . comparison of 2016 with 2015. we acquired efs midstream in july 2015 for approximately $ 2.1 billion in cash , which was payable in two installments . the initial payment of $ 1.1 billion was paid at closing in july 2015. the second and final installment of $ 1.0 billion was paid in july 2016 using a combination of cash on hand and proceeds from the issuance of short-term notes under epo 's commercial paper program .

the acquisition is expected to improve our growth opportunities by enhancing our product portfolio and improving our position in important growth markets , including the u.s. , mexico , turkey , and eastern europe . we expect to achieve favorable synergies and cost reductions . disposition of the specialty plastics business during the third quarter of 2014 , we completed the sale of substantially all of the assets in our specialty plastics business to a. schulman , inc. for $ 91.0 million in cash . the sale resulted in a gain of $ 54.9 million and net cash proceeds of $ 88.3 million . cash 19 proceeds were used to pay down the 7.785 % senior notes , as discussed below . this disposition was part of our value creation strategy , as we turn our focus to our core functional coatings and color businesses . acquisition of turkey assets during the third quarter of 2014 , the company acquired certain commercial assets of a reseller of our porcelain enamel products in turkey for a cash purchase price of $ 6.7 million . our porcelain enamel sales to this entity in 2013 were approximately $ 6.0 million . this action was an initial step to strengthen sales in growing geographic markets , such as turkey . 7.875 % senior note tender offer as discussed in note 8 , we completed a tender offer for our senior notes resulting in the purchase of $ 143.0 million of notes , with the remaining outstanding notes of $ 107.0 million being redeemed during the third quarter of 2014. new credit facility as discussed in note 8 , on july 31 , 2014 , the company entered into a new credit facility ( the “ new credit facility ” ) with pnc bank , national association ( “ pnc ” ) , as the administrative agent , the collateral agent and an issuer , jpmorgan chase bank , n.a . , as the syndication agent and an issuer , the other agents party thereto and various financial institutions as lenders ( the “ lenders ” ) . the new credit facility refinances and replaces the 2013 amended credit facility . the new credit facility consists of a $ 200 million secured revolving line of credit with a term of five years and a $ 300 million secured term loan facility with a term of seven years . up to $ 100 million of the revolving line of credit will be available to certain of the company 's subsidiaries in the form of revolving loans denominated in euros . under the terms of the new credit facility , the company is entitled , subject to the satisfaction of certain conditions , to request additional commitments under the revolving line of credit or term loans in the aggregate principal amount of up to $ 200 million to the extent that existing or new lenders agree to provide such additional commitments and or term loans . the refinancing of the 7.875 % senior notes and the 2013 amended credit facility reduced interest expense and further enhanced strategic flexibility . outlook during 2014 , the company made significant progress on its value creation strategy by reducing infrastructure costs , improving gross margins and reshaping the business portfolio . the company has renewed its strategic focus on its core glass-based coatings business by divesting its specialty plastics business and substantially all of the assets in our north america-based polymer additives assets in the second half of 2014. during the fourth quarter of 2014 , the company also made an investment in the core coatings business by successfully acquiring vetriceramici , a manufacturer of high end tile coatings . through the divestitures of specialty plastics and our no rth america -based polymer additives businesses , we realized net cash proceeds of $ 237.8 million , portions of which were used to pay down debt , as well as fund the acquisition of vetriceramici . at december 31 , 2014 , our cash balance was $ 140.5 million , which will provide financial flexibility to pursue additional strategic options in 2015. going into 2015 , we are focused on the successful integration of our acquisition of vetriceramici . we are focused on achieving the identified acquisition synergies and will continue to execute our value creation strategy including pursuing value-creating growth opportunities in our core performance materials businesses and pursuing opportunities to optimize our cost structure and make our business processes and systems more efficient , and optimize tax planning opportunities . during 2015 , we also expect to face some challenges , particularly as it pertains to foreign currency movements , specifically the euro , which we expect to have a significant negative impact on our 2015 reported operating results , relative to 2014 exchange rates . in 2014 , 45.0 % , of our net sales excluding precious metals originated from europe . the results of these business , as they are reported in u.s. dollars , would be adversely impacted by movement in the euro exchange rate , assuming foreign currency rates remain unchanged from current levels . in addition , the company anticipates continued pricing pressure in our performance coatings segment , principally related to our tile products . in 2014 , negative pricing impacted our performance coatings reportable segment sales by approximately $ 19.0 million . 20 in 2015 , we will continue our focus on divesting our europe-based polymer additives assets , including the antwerp , belgium dibenzoates manufacturing assets , and related polymer additives european headquarters and lab facilities . the assets associated with this facility are currently classified held-for-sale on our consolidated balance sheets , and we remain committed to the established plan to divest this asset . for 2015 , we expect sales growth of 10 – 12 % , including the addition of vetriceramici and excluding the adverse impact of the changes in foreign currency . story_separator_special_tag gross profit decreased from 2013 , and was driven by favorable sales volumes and mix of $ 4.3 million , lower product pricing impacts of $ 19.0 million , favorable raw material impacts of $ 12.2 million , lower manufacturing costs of $ 1.3 million and unfavorable foreign currency impacts of $ 2.2 million . replace_table_token_18_th net sales in 2014 decreased $ 11.8 million compared with 2013 due to lower sales in all regions . the decline in sales in europe was attributable lowe r sales of our porcelain enamel products , partially mitigated by higher sales of tile products , including 27 vetriceramici sales during december . the decline in sales in 2014 in latin america , compared to 2013 , was due to lower sales of our tile color and porcelain enamel products , partially mitigated by higher sales of digital inks products . the decline in asia pacific was driven by lower sales of tile products , primarily frits and glaze products , which was partially mitigated by higher sales of digital inks products . the decline in the united states was all attributable to porcelain enamel products . performance , colors and glass replace_table_token_19_th net sales excluding precious metals increased $ 21.2 million in 2014 compared with 2013 , with increases in all of our product lines . net sales excluding precious metals were impacte d by higher sales volumes of $ 21.8 million , unfavorable mix of $ 1.1 million , higher product pricing of $ 2.6 million and unfavorable foreign currency impacts of $ 2.1 million . gross profit in creased in 2014 , compared with 2013 , due to favorable sales volumes and mix of $ 17.8 million , higher product pricing impacts of $ 2.6 million , unfavorable raw material impacts of $ 6.7 million , l ower manufacturing costs of $ 9.2 million and unfavorable foreign currency impacts of $ 0.7 million . replace_table_token_20_th the increase in 2014 in net sales excluding precious metals of $ 21.2 million compared with 2013 reflected higher sales in all regions and in all product lines . pigments , powders and oxides replace_table_token_21_th 28 net sales excluding precious metals decreased in 2014 compared with 2013 , primarily due to the sale of our north american and asian metal powders business and exit of solar pastes , which comprised approximately $ 27.5 million of the decrease . the remainder of the decrease in net sales excluding precious metals of $ 8.1 million was primarily due to lower sales of our surface polishing materials in 2014 compared with 2013. gross profit declined in 2014 compared with 2013 and wa s primarily the result of exited and sold businesses , which contributed to $ 6.0 million of gross profit in the prior year that did n ot recur in the current year . the decrease in gross profit in 2014 was due to lower sales volumes and mix of $ 15.1 million , which was partially mitigated by favorable raw material impacts of $ 2.6 million and lower manufacturing costs of $ 5.0 million . replace_table_token_22_th the decrease in net sales excluding precious metals of $ 35.6 million in 2014 , compared with 2013 , was due to lower sales in the united states , latin america and asia pacific , which were partially mitigated by higher sales in europe . the decline in sales in the united states and asia pacific was primarily driven by the sale of our north american and asian metal powders business which contributed $ 27.5 million in the prior year that did not recur . also contributing to the decline in the u.s. was lower sales of our surface polishing materials . partially mitigating the decline in asia pacific were higher sales of ou r pigments products . the decline in latin america was driven by lower sales of our pigments products . comparison of the years ended december 31 , 2013 and 2012 performance coatings replace_table_token_23_th 29 sales increased in performance coatings primarily due to increased sales of our frits and glazes , porcelain enamel and digital ink products of $ 11.1 million , $ 6.4 million and $ 12.4 million , respectively . the higher sales were partially offset by a decline in colors of $ 19.3 million and other tile products of $ 6.3 million , including $ 2.2 million of lower sales volume due to the sale of our argentinian borate mine in 2013. sales were impacted by higher sales volumes of $ 3 0.1 million , favorable mix of $ 4.5 milli on , lower product pricing of $ 27.0 million and favorable foreign currency impacts of $ 6.1 million . gross profit increased from 2012 , and was driven by favorable sales volumes and mix of $ 9.5 million , lower product pricing of $ 30.9 million , lo wer manufacturing costs of $ 41.3 million and favorable foreign currency impacts of $ 1.5 million . replace_table_token_24_th the net sales increase of $ 6.7 million compared with 2012 reflected higher sales in all regions , except latin america . the increased sales in europe was attributable to higher sales of our porcelain enamels , digital inks and frits and glaze products , partially offset by lower sales of our color products . the decline in sales in latin america , compar ed to 2012 , was due to lower sales in all product lines except frits and glazes and digital inks . the increased sales in asia pacific were driven by higher sales of our frits and glazes , digital inks and porcelain enamels , partially offset by lower sales of color products . the united states remained relatively flat as compar ed to 2012 with a 2.4 % increase in porcelain enamel sales . performance colors and glass replace_table_token_25_th 30 net sales excluding precious metals increa sed compared with the prior year , primarily driven by sales of our decorative and industrial products , partially

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows from investing activities increased approximately $ 58.0 million in 2014 . the incre ase was driven primarily by ne t proceeds from the sales of our north america-based polymer additives assets and specialty plastics business of $ 149.5 million and $ 88.3 million , respectively , partially offset by cash outflows of $ 108.9 million for the acquisition of vetriceramici and $ 6.7 million to acquire certain commercial assets of a reseller of our porcelain enamel products in turkey . capital expenditures increase d $ 19.5 million in 2014 , compared with 2013. the higher capital expenditures were costs incurred for the ongoing project at our antwerp , belgium facility . financing activities . cash flows from financing activities increased $ 18.6 million in 2014 , compared with 2013. the increase was due to net borrowing s on our term loan facility of $ 300 .0 million , partially offset by the repayment of the 7.875 % senior notes of $ 260.5 million . further , we had a cash outflow of $ 44.4 million in 2014 , a decrease of $ 45.1 million compared with 2013 , related to repayment of debt outstanding under our accounts receivable securitization program that expired during the year , as well as our revolving credit facility that was amended during 2014. we have paid no dividends on our common stock since 2009 . 32 capital resources and liquidity major debt instruments that were outstanding during 2014 are described below . new credit facility on july 31 , 2014 , the company entered into a new credit facility ( the “ new credit facility ” ) with a group of lenders to refinance the majority of its then outs tanding debt , as discussed below . the new credit facility consists of a $ 200 million secured revolving line of credit with a term of five years and a $ 300 million secured term loan facility with a term of seven years . the new credit facility replaces the prior $ 250 million revolving credit facility and provided funding to repurchase the 7.875 % senior notes .

our front-office solutions seamlessly integrate voice , chat , e-mail , ecommerce and social media to optimize the customer engagement for our clients . in addition , we manage certain back-office processes for our clients to enhance their ability to obtain a customer-centric view of their relationships and maximize operating efficiencies . our delivery of integrated business processes via our onshore , offshore or work-from-home associates reduces operating costs and allows customer needs to be met more quickly and efficiently , resulting in higher satisfaction , brand loyalty and a stronger competitive position for our clients . grow – customer growth services we offer integrated sales and marketing solutions to help our clients boost revenue in new , fragmented or underpenetrated business-to-consumer or business-to-business markets . we deliver approximately $ 1 billion in client revenue annually via the acquisition , growth and retention of customers through a combination of our highly trained , client-dedicated sales professionals and our proprietary revana analytic multichannel platform tm . this platform continuously aggregates individual customer information across all channels into one holistic view so as to ensure more relevant and personalized communications . these communications are dynamically triggered to send the right message to the right customer at the right time via their preferred communication channel . the ability of our sales associates to be backed by a highly scalable , technology-enabled platform that delivers smarter , more targeted digital marketing messages over email , social networks , mobile , web , sms text , voice and chat results in higher conversion rates at a lower overall cost for our clients . based on the requirements of our clients , we provide our services both on an integrated cross-business and discrete basis . see note 3 to the notes to the consolidated financial statements for additional discussion regarding our segment information . our 2013 financial results in 2013 , our revenue increased 2.6 % to $ 1,193 million over the 2012 year , despite a decrease of 1.0 % or $ 12.1 million due to foreign currency fluctuations , primarily the australian dollar . revenue , adjusted for the $ 12.1 million decrease related to foreign exchange , $ 1.2 million of lost revenue due to a typhoon in the philippines during the third quarter , and a $ 37.6 million decrease related to the exit of our business in spain , increased by $ 81.1 million over the prior year . this increase was due to organic growth and revenue from recent acquisitions . our 2013 income from operations increased 29.1 % to $ 101.4 million or 8.5 % of revenue , from $ 78.5 million or 6.8 % of revenue in 2012. this increase is due to the benefits of increased capacity utilization , income from the recent acquisitions , organic revenue growth and the exit of our business in spain which caused large restructuring expenses in the prior year . these were partially offset by $ 5.1 million negative impact from foreign currency fluctuations , $ 3.5 million additional amortization of intangibles related to the acquisitions , $ 0.8 million negative impact from the lost revenue from the typhoon , and investments in sales and research and development . income from operations in 2013 included $ 4.4 million and $ 1.2 million of restructuring charges and asset impairments , respectively . income from operations in 2012 included $ 22.9 million and $ 3.0 million of restructuring charges and impairments , respectively . our offshore delivery centers serve clients based in north america and in other countries . our offshore delivery capacity spans five countries with 18,250 workstations and currently represents 63 % of our global delivery capabilities . revenue from services provided in these offshore locations was $ 490 million and represented 49 % of our revenue for 2013 , as compared to $ 506 million and 49 % of our revenue for 2012 , with both years excluding revenue from the five acquisitions . our cash flow from operations and available credit allowed us to finance a significant portion of our capital needs and stock repurchases through internally generated cash flows . at december 31 , 2013 , we had $ 158.0 million of cash and cash equivalents , total debt of $ 109.8 million , and a total debt to total capitalization ratio of 18.8 % . 23 we internally target capacity utilization in our delivery centers at 80 % to 90 % of our available workstations . as of december 31 , 2013 , the overall capacity utilization in our multi-client centers was 83 % . the table below presents workstation data for our multi-client centers as of december 31 , 2013 and 2012. dedicated and managed centers ( 4,550 and 2,545 workstations , at december 31 , 2013 and 2012 , respectively ) are excluded from the workstation data as unused workstations in these facilities are not available for sale . our utilization percentage is defined as the total number of utilized production workstations compared to the total number of available production workstations . we may change the designation of shared or dedicated centers based on the normal changes in our business environment and client needs . replace_table_token_4_th we continue to see demand from all geographic regions to utilize our offshore delivery capabilities and expect this trend to continue with our clients . in light of this trend , we plan to continue to selectively retain capacity and expand into new offshore markets . as we grow our offshore delivery capabilities and our exposure to foreign currency fluctuations increase , we continue to actively manage this risk via a multi-currency hedging program designed to minimize operating margin volatility . critical accounting policies and estimates management 's discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements , which have been prepared in accordance with accounting principles generally accepted in the u.s. ( “gaap” ) . story_separator_special_tag results of operations year ended december 31 , 2013 compared to december 31 , 2012 the tables included in the following sections are presented to facilitate an understanding of management 's discussion and analysis of financial condition and results of operations and present certain information by segment for the years ended december 31 , 2013 and 2012 ( amounts in thousands ) . all inter–company transactions between the reported segments for the periods presented have been eliminated . customer management services replace_table_token_6_th the change in revenue for the customer management services segment was attributable to a $ 68.5 million net increase in client programs offset by program completions of $ 52.2 million . revenue was further impacted by a $ 10.4 million reduction due to foreign currency fluctuations , primarily the australian dollar , a $ 37.6 million reduction related to the exit of our business in spain , and $ 1.2 million in lost revenue due to a typhoon in the third quarter of 2013. the operating income as a percentage of revenue increased to 8.5 % in 2013 as compared to 6.5 % in 2012. this increase in margin was primarily due to the improvement in utilization of our capacity , exit of our business in spain as described above and the reduction of restructuring expenses noted below . these increases were offset by a $ 6.6 million adverse impact from foreign currency fluctuations and a $ 0.8 million negative impact due to lost revenue from a typhoon . during 2013 and 2012 , we recorded $ 4.2 million and $ 8.2 million , respectively , in restructuring and impairment charges in various locations to better align our capacity and workforce with current business needs . in addition , during 2012 , we recorded $ 15.1 million in restructuring charges and $ 0.4 million in impairment charges as a result of our decision to exit spain . these items were offset during 2012 in part by a $ 4.6 million accrual release for salaries expense due to an authoritative ruling in spain related to the legally required cost of living adjustments for our employees ' salaries . 29 customer growth services replace_table_token_7_th the change in revenue for the customer growth services segment was due to the combination of net increase in client programs and the acquisition of webmetro in august 2013 of $ 20.0 million in an aggregate amount , offset by program completions of $ 19.8 million . the operating income as a percentage of revenue increased to 3.0 % in 2013 as compared to 2.2 % in 2012. increases in income were primarily driven by a $ 1.8 million charge related to the impairment of the trade-name intangible asset due to the rebranding of our direct alliance subsidiary to revana during the first quarter of 2012. there were also operational improvements and a shift in program mix to additional outcome-based higher margin programs . these increases were offset by net declines in client volumes , changes in pricing , the cost of ramping multiple clients and increases in amortization expense related to webmetro . included in the operating income was amortization related to acquired intangibles of $ 1.5 million and $ 0.7 million for the year ended december 31 , 2013 and 2012 , respectively . customer technology services replace_table_token_8_th the increase in revenue for the customer technology services segment was related to organic growth for eloyalty in consulting and managed services and the acquisition of tsg on december 31 , 2012. the operating income as a percentage of revenue decreased to 13.1 % in 2013 as compared to 16.2 % in 2012. this decrease was related to investments to integrate tsg , increases in sales and marketing expenses , and a $ 2.6 million increase in amortization expense related to tsg . included in the operating income was amortization related to acquired intangibles of $ 4.1 million and $ 1.8 million for the year ended december 31 , 2013 and 2012 , respectively . customer strategy services replace_table_token_9_th the increase in revenue for the customer strategy services segment was related to a combination of growth in operational consulting , analytics and learning innovations revenue , and the acquisitions of iknowtion , llc ( “iknowtion” ) and guidon performance solutions ( “guidon” ) during 2012 . 30 the operating income as a percentage of revenue increased to 5.6 % in the 2013 as compared to 0.7 % in 2012. this increase was related to the full integration of the businesses comprising the customer strategy services segment , including their leadership , consultants , the services portfolio and infrastructure , and a consolidation of their geographies and personnel realignment . this integration allowed for additional revenue to be generated as well as cost savings based on the realignment . the increase also included the impairment charges of $ 1.1 million recorded as a result of decreased revenues resulting from the deconsolidation of a subsidiary in the second quarter of 2013 ( see notes 24 and 6 of the notes to the consolidated financial statements for further details ) . included in the operating income was amortization expense related to acquired intangibles of $ 1.6 million and $ 1.2 million for the year ended december 31 , 2013 and 2012 , respectively . interest income ( expense ) for 2013 and 2012 , interest income decreased to $ 2.6 million in 2013 from $ 3.0 million in 2012. interest expense increased to $ 7.5 million during 2013 from $ 6.7 million for the comparable period in 2012 , due to higher average borrowings on our credit facility and additional accretion of deferred acquisition costs . other income ( expense ) , net included in the year ended december 31 , 2013 , was a $ 3.7 million charge related to the deconsolidation of a subsidiary ( see note 24 of the notes to the consolidated financial statements for further details ) . also included was a $ 1.9

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows from financing activities for the years 2013 , 2012 and 2011 , we reported net cash flows ( used in ) provided by financing activities of $ ( 70.7 ) million , $ ( 35.0 ) million and $ 15.9 million , respectively . the change from 2012 to 2013 was due to a decrease in net borrowings on our line of credit of $ 52.0 million , a decrease in proceeds received from other debt of $ 4.3 million and an increase in dividends paid to noncontrolling interests of $ 2.3 million . this increase in cash used in financing activities was offset against a decrease in cash used to repurchase common stock of $ 24.7 million . the change from 2011 to 2012 was due to a decrease in net borrowings on our line of credit of $ 20.0 million , an increase in cash used to repurchase common stock of $ 17.6 million and a decrease in cash received from the exercise of stock options of $ 13.4 million . 34 free cash flow free cash flow ( see “presentation of non-gaap measurements” above for the definition of free cash flow ) was $ 87.6 million , $ 66.4 million and $ 75.5 million for the years 2013 , 2012 and 2011 , respectively . the increase from 2012 to 2013 resulted primarily from the $ 31.1 million increase in cash flow from operating activities offset by a $ 9.8 million increase in capital expenditures , net of grant monies received . the decrease from 2011 to 2012 resulted primarily from the $ 6.9 million decrease in cash flow from operating activities and a $ 2.2 million increase in capital expenditures , net of grant monies received obligations and future capital requirements future maturities of our outstanding debt and contractual obligations as of december 31 , 2013 are summarized as follows ( amounts in thousands ) : replace_table_token_14_th ( 1 ) includes estimated interest payments based on the weighted-average interest rate , unused commitment fees , current interest rate swap arrangements , and outstanding debt as of december 31 , 2013 .

product sales resulting from fixed-price construction contracts are generated from multiple-element arrangements that require separate units of accounting and estimates regarding the fair value of individual elements . the company has determined that its multiple-element arrangements that qualify as separate units of accounting are ( 1 ) product sales and ( 2 ) installation services . there is objective and reliable evidence of fair value for both the product sales and installation services , 9 and allocation of arrangement consideration for each of these units is based on their relative fair values . each of these elements represents individual units of accounting , as the delivered item has value to a customer on a stand-alone basis . the company 's products are regularly sold on a stand-alone basis to customers which provides vendor-specific objective evidence of fair value . the fair value of installation services is separately calculated using expected costs of installation services . many times the value of installation services is calculated using price quotations from subcontractors to the company , who perform installation services on a stand-alone basis . assuming all other criteria for revenue recognition have been met , we recognize revenue for product sales at the date of shipment . product sales resulting from purchase orders involve a purchase order received by us from our dealers or our stocking distributor . this category includes product sales for standard products , as well as products which require some customization . these sales are recognized under the terms of the purchase order which generally are freight on board ( “fob” ) shipping point and do not include rights of return . accordingly , these sales are recognized at the time of shipment . allowance for doubtful accounts evaluation of the allowance for doubtful accounts involves management judgments and estimates . we evaluate the collectability of our trade accounts receivable based on a number of factors . in circumstances where management is aware of a customer 's inability to meet its financial obligations to us , or a project dispute makes it unlikely that all of the receivable owed by a customer will be collected , a specific reserve for bad debts is estimated and recorded to reduce the recognized receivable to the estimated amount we believe will ultimately be collected . in addition to specific customer identification of potential bad debts , a general reserve for bad debts is estimated and recorded based on our recent past loss history and an overall assessment of past due trade accounts receivable amounts outstanding . inventories the majority of inventories are valued at the lower of cost or market under the last-in , first-out ( “lifo” ) method . the lifo method allocates the most recent costs to cost of products sold , and , therefore , recognizes into operating results fluctuations in raw materials and other inventory costs more quickly than other methods . inventories at our international subsidiaries are measured on the first-in , first-out ( “fifo” ) method . pension benefits we sponsor pension plans covering all employees who met eligibility requirements as of april 30 , 2005. in february 2005 , our pension plans were amended as of april 30 , 2005. no further benefits have been , or will be , earned under the plans subsequent to the amendment date , and no additional participants have been , or will be , added to the plans . several statistical and other factors , which attempt to anticipate future events , are used in calculating the expense and liability related to the pension plans . these factors include assumptions about the discount rate used to calculate and determine benefit obligations and expected return on plan assets within certain guidelines . the actuarial assumptions used by us may differ materially from actual results due to changing market and economic conditions , higher or lower withdrawal rates , or longer or shorter life spans of participants . these differences may significantly affect the amount of pension income or expense recorded by us in future periods . results of operations sales for fiscal year 2011 were $ 100.0 million , an increase of 1 % from fiscal year 2010 sales of $ 99.1 million . domestic operations sales for fiscal year 2011 were $ 84.1 million , a decrease of 4 % from the prior year . sales in the domestic marketplace reflect lower sales of small and mid-sized projects due to the economic slowdown . international operations sales for fiscal year 2011 were $ 15.9 million , an increase of 38 % from the prior year , as the international marketplace continued to recover from the economic slowdown . sales for fiscal year 2010 were $ 99.1 million , a decrease of 4.7 % from fiscal year 2009 sales of $ 104.0 million . domestic operations sales for the year were $ 87.6 million , a decrease of 3.0 % from the prior year . the sales decline resulted from lower sales of small and mid-sized projects , as customers deferred placing these orders due to the recession , and lower sales from international operations . international operations sales for the year were $ 11.5 million , a decrease of 16.0 % from the prior year . the international laboratory furniture marketplace was hit particularly hard by the economic slowdown , but appeared to show signs of recovery late in the year as quotation activity increased . our order backlog was $ 65.7 million at april 30 , 2011 , as compared to $ 68.9 million at april 30 , 2010 , and $ 62.7 million at april 30 , 2009. gross profit represented 19.3 % , 21.6 % , and 20.6 % of sales in fiscal years 2011 , 2010 , and 2009 , respectively . story_separator_special_tag the decrease in gross profit margin for fiscal year 2011 was primarily due to increased competitive pricing in the marketplace and higher costs for 10 steel and epoxy resin raw materials . the increase in gross profit margin in fiscal year 2010 from fiscal year 2009 was primarily due to savings from alternative sources of raw materials and components , cost improvements , and increased manufacturing efficiencies in the first half of the year associated with higher production volumes . operating expenses were $ 16.1 million , $ 15.6 million , and $ 14.3 million in fiscal years 2011 , 2010 , and 2009 , respectively , and 16.1 % , 15.7 % , and 13.7 % of sales , respectively . the increase in operating expenses in fiscal year 2011 as compared to fiscal year 2010 resulted primarily from an increase in operating expenses of $ 433,000 for expanded international operations , an increase of $ 189,000 in sales and marketing expenses , an increase of $ 129,000 in depreciation expense , and an increase of $ 104,000 in stock option expense . these increases were partially offset by a decrease in pension expense of $ 251,000 and a decrease in bad debt expense of $ 101,000. the increase in operating expenses for fiscal year 2010 as compared to fiscal year 2009 resulted primarily from an increase of $ 1.0 million in pension expense , an increase of $ 219,000 in sales and marketing expenses , and an increase of $ 98,000 in depreciation expense . the impact of these items was partially offset by a decrease of $ 596,000 in compensation earned under performance incentive plans . other income was $ 4,000 and $ 1,000 in fiscal years 2011 and 2010 , respectively . other expense was $ 28,000 in fiscal year 2009. interest expense was $ 199,000 , $ 157,000 , and $ 280,000 in fiscal years 2011 , 2010 , and 2009 , respectively . the increase in interest expense for fiscal year 2011 was due to higher levels of bank borrowings . the decrease in interest expense for fiscal year 2010 from fiscal year 2009 was primarily from lower levels of bank borrowings . income tax expense of $ 864,000 , or 29.2 % of pretax earnings , was recorded for fiscal year 2011. income tax expense of $ 1,921,000 , or 33.9 % of pretax earnings , was recorded for fiscal year 2010. income tax expense of $ 2,264,000 , or 33.4 % of pretax earnings , was recorded in fiscal year 2009. the effective tax rate for each of these years is lower than the statutory rate due to the favorable impact of tax rates for the company 's international subsidiaries and the impact of state and federal tax credits . the lower effective tax rate for fiscal year 2011 also reflects the fact that a greater portion of pretax earnings were attributable to international subsidiaries which have lower rates . net earnings attributable to the noncontrolling interest related to our two subsidiaries that are not 100 % owned by the company were $ 248,000 , $ 178,000 , and $ 265,000 , for fiscal years 2011 , 2010 , and 2009 , respectively . the changes in the net earnings attributable to the noncontrolling interest for each year were due to changes in the levels of net income of the subsidiaries . net earnings in fiscal year 2011 were $ 1,850,000 , or $ 0.72 per diluted share . net earnings in fiscal year 2010 were $ 3,572,000 , or $ 1.39 per diluted share . net earnings in fiscal year 2009 were $ 4,247,000 , or $ 1.66 per diluted share . story_separator_special_tag impact on the company 's consolidated financial position or results of operations . in october 2009 , the fasb issued asu 2009-13 , “revenue recognition ( topic 605 ) – multiple-deliverable revenue arrangements – a consensus of the fasb emerging issues task force.” it updates the existing multiple-element revenue arrangements guidance currently included under fasb asc 605-25 , “revenue recognition , multiple-element arrangements.” the revised guidance primarily provides two significant changes : ( i ) eliminates the need for objective and reliable evidence of fair value for the undelivered element in order for a delivered item to be treated as a separate unit of accounting , and ( ii ) eliminates the residual method to allocate the arrangement consideration . in addition , the guidance expands the disclosure requirements for revenue recognition . asu 2009-13 is effective for fiscal years beginning on or after june 15 , 2010. the company adopted this standard effective may 1 , 2011. the company does not expect the adoption of this standard to have a significant impact on the company 's consolidated financial position or results of operations . in january 2010 , the fasb issued asu 2010-06 , “fair value measurements and disclosures ( topic 820 ) – improving disclosures about fair value measurements.” this update requires the following new disclosures : ( i ) the amounts of significant transfer in and out of level 1 and level 2 fair value measurements and a description of the reasons for the transfer ; and ( ii ) a reconciliation for fair value measurements using significant unobservable inputs ( level 3 ) , including separate information about purchases , sales , issuance , and settlements . the update also clarifies existing requirements about fair value measurement disclosures and disclosures about inputs and valuation techniques . the new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods , beginning after december 15 , 2009 , except for the reconciliation of level 3 activity , which is effective for fiscal years beginning after december 15 , 2010. the company adopted this guidance effective may 1 , 2010. the adoption of this standard did not have a significant impact on the company 's consolidated financial position or results of operations .

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our principal sources of liquidity have historically been funds generated from operating activities , supplemented as needed by borrowings under our revolving credit facility . additionally , certain machinery and equipment are financed by non-cancelable operating leases or capital leases . we believe that these sources of funds will be sufficient to support ongoing business requirements , including capital expenditures , through fiscal year 2012. at april 30 , 2011 , we had advances of $ 6.6 million outstanding under our unsecured $ 14 million revolving credit facility . the credit facility matures in july 2012. see note 3 of the notes to consolidated financial statements included in item 8 of this annual report for additional information concerning our credit facility . the following table summarizes the cash payment obligations for our lease arrangements and long-term loan as of april 30 , 2011 : payments due by period ( $ in thousands ) replace_table_token_3_th 11 most of our leases are for machinery and equipment and provide us with renewal and purchase options and certain early cancellation rights . we do not have any off balance sheet arrangements at april 30 , 2011. operating activities provided cash of $ 1.3 million in fiscal year 2011 , primarily from operating earnings and an increase in accounts payable , partially offset by increases in accounts receivable and inventory . operating activities provided cash of $ 4.5 million in fiscal year 2010 , primarily from operating earnings and an increase in accounts payable and other accrued expenses , partially offset by increases in accounts receivable and inventory . operating activities provided cash of $ 2.1 million in fiscal year 2009 , primarily from operating earnings and a decrease in prepaid income taxes , partially offset by increases in accounts receivable and inventory . the majority of the april 30 , 2011 accounts receivable balances are expected to be collected during the first quarter of fiscal year 2012 , with the exception of retention amounts on fixed-price contracts which are collected when the entire construction project is completed and all retention funds are paid by the owner .

in addition , the affordable care act imposed a 2.3 % excise tax on sales of medical devices , beginning in 2013. for the years ended december 31 , 2014 and 2013 , we paid medical device excise taxes of $ 12.7 million and $ 11.5 million , respectively , which is included in selling , general and administrative expenses . global economic conditions global economic conditions in recent years have had adverse impacts on market activities including , among other things , failure of financial institutions , falling asset values , diminished liquidity , reduced demand for products and services and significant fluctuations in foreign currency exchange rates . in response , we adjusted production levels and engaged in new restructuring activities . we continue to review and evaluate our manufacturing , warehousing and distribution processes to maximize efficiencies through the elimination of redundancies in our operations and the consolidation of facilities . although , on a consolidated basis , the economic conditions did not have a significant adverse impact on our financial position , results of operations or liquidity , healthcare policies and practice trends vary by country , and the impact of the global economic downturn was felt to varying degrees in each of our regional markets over the last several years . the continuation of the present broad economic trends of weak economic growth , constricted credit , public sector austerity measures in response to public budget deficits and foreign currency volatility , particularly the euro , could have a material adverse effect on our results of operations and our liquidity . hospitals in some regions of the united states experienced a decline in admissions , a weaker payor mix , and a reduction in elective procedures . consequently , hospitals took actions to reduce their costs , including limiting their capital spending . more recently , the economic environment has improved somewhat , but has not returned to pre-recession levels , and challenges persist , particularly in some european countries , as discussed below . approximately 94 % of our net revenues come from single-use products primarily used in critical care and surgical applications , and our sales volume could be negatively impacted if hospital admission rates or payor mix change as a result of continuing higher than normal unemployment rates ( and subsequent loss of insurance coverage by consumers ) . conversely , our sales volume could be positively impacted due to increases in the number of insured individuals as a result of the affordable care act , which has had the effect of facilitating medical insurance coverage for many persons who previously were not covered . europe continues to contend with considerable government debt and annual deficits , high levels of unemployment and the risk of deflation . these factors have resulted in austerity programs that have affected the healthcare sector in european countries . these austerity programs have resulted in delays in elective surgeries in a number of countries and reductions in health budgets . it is likely that funding for publicly funded healthcare institutions will continue to be affected if governments make further spending adjustments and enact healthcare reform measures to lower overall healthcare costs . the public healthcare systems in certain countries in western europe , most notably greece , spain , portugal and italy , have experienced significantly reduced liquidity due to recessionary conditions , which has resulted in a slowdown in payments to us . the slowdown has continued to affect the timing of collections from these customers . in asia , recovery from the global recession has varied by country . china announced plans for major healthcare investment directed to second tier cities ( newer cities resulting from china 's urbanization of the north and west regions of the country ) and hospitals , which may provide future growth opportunities for us . despite these growth opportunities , distributor sales to third parties slowed in 2014 , particularly in china , which could have an impact on this future growth . additionally , slow economic growth and continued pursuit of reimbursement cuts by the public hospital sector in japan is expected to limit growth in that market . in latin america , some highly regulated economies such as argentina and venezuela have experienced unusually high inflation rates and weakening currencies . this has impacted the budgets of the public healthcare systems resulting in delays in the importation of medical devices . although not a significant portion of our business , our operations in this region may be impacted by these factors . 36 results of operations the following comparisons exclude the impact of discontinued operations ( see note 18 to the consolidated financial statements included in this annual report on form 10-k for discussion of discontinued operations ) . certain financial information is presented on a rounded basis , which may cause minor differences . revenues replace_table_token_6_th comparison of 2014 and 2013 net revenues for the twelve months ended december 31 , 2014 increased 8.5 % to $ 1,839.8 million from $ 1,696.3 million in the twelve months ended december 31 , 2013. the $ 143.5 million increase in net revenues is largely due to the businesses acquired during 2013 and 2014 , which generated net revenues of $ 98.6 million , including $ 79.9 million , $ 16.6 million and $ 2.2 million generated by vidacare , mayo healthcare and ultimate , respectively . net revenues further benefited from price increases of $ 23.9 million , primarily in the asia , emea and surgical north america segments , new product sales of $ 14.8 million , primarily in the emea , anesthesia/respiratory north america , vascular north america and asia segments and higher sales volume of $ 12.3 million , primarily in the oem and emea segments . story_separator_special_tag in the first quarter of 2013 , we recorded a $ 4.5 million ipr & d charge pertaining to a research and development project associated with our acquisition of substantially all of the assets of axiom technology partners llc because technological feasibility had not yet been achieved and we determined that the subject technology had no future alternative use . long-lived asset impairment in the third quarter of 2013 , we recorded $ 3.5 million in impairment charges related to assets held for sale that had a carrying value in excess of their appraised fair value . for additional information regarding our restructuring programs and impairment charges , see note 4 to the consolidated financial statements included in this annual report on form 10-k. 41 interest income and expense replace_table_token_11_th interest expense increased for the twelve months ended december 31 , 2014 , compared to the corresponding period in 2013 , due to an increase of $ 96 million in average outstanding debt and an increase of 18 basis points in the average interest rate on outstanding debt during 2014. interest expense decreased for the twelve months ended december 31 , 2013 , compared to the corresponding period in 2012 , primarily because 2012 interest expense included amortization expense related to our termination of an interest rate swap ( approximately $ 11.1 million for the twelve months ended december 31 , 2012 ) . we terminated our agreement related to the interest rate swap , covering a notional amount of $ 350 million , in 2011. the unrealized losses within accumulated other comprehensive income associated with our interest rate swap were reclassified into our statement of income ( loss ) during 2012. story_separator_special_tag style= `` line-height:120 % ; padding-top:8px ; font-size:10pt ; `` > vascular north america vascular north america net revenues for the twelve months ended december 31 , 2013 increased $ 8.4 million compared to the corresponding period in 2012 , an increase of 3.8 % . the increase was primarily due to new product sales of $ 7.7 million , businesses acquired in 2013 , which added $ 2.4 million and price increases of $ 2.3 million . these increases in net revenues were partly offset by decreases in sales volume of existing products of $ 3.7 million and the unfavorable impact of foreign currency exchange rates of $ 0.3 million . vascular north america operating profit for the twelve months ended december 31 , 2013 decreased $ 2.2 million compared to the corresponding period in 2012 , a decrease of 8.6 % . the decrease was primarily due to the decline in sales volume of existing products , higher warehouse and freight costs , a decrease in sales of higher margin products and the excise tax associated with the affordable care act , partially offset by an increase in sales of new products , price increases and operating profit generated from businesses acquired in 2013. anesthesia/respiratory north america anesthesia/respiratory north america net revenues for the twelve months ended december 31 , 2013 increased $ 48.1 million compared to the corresponding period in 2012 , an increase of 26.7 % . the increase was primarily due to lma product sales of $ 52.0 million and new product sales of $ 3.0 million , partially offset by lower sales volume of $ 6.9 million . anesthesia/respiratory north america operating profit for the twelve months ended december 31 , 2013 increased $ 7.9 million compared to the corresponding period in 2012 , an increase of 56.0 % . the increase was primarily due to operating profit generated by lma product sales and an increase in sales of new products , partially offset by the decline in sales volume of existing products , higher raw material and manufacturing costs and the excise tax associated with the affordable care act . surgical north america surgical north america net revenues for the twelve months ended december 31 , 2013 increased $ 2.2 million compared to the corresponding period in 2012 , an increase of 1.5 % . the increase was primarily due to price increases of $ 4.4 million and sales of new products of $ 1.3 million , partially offset by a decline in sales volume of existing products of $ 2.7 million and the unfavorable impact of foreign currency exchange rates of $ 0.5 million . 45 surgical north america operating profit for the twelve months ended december 31 , 2013 decreased $ 0.2 million compared to the corresponding period in 2012 , a decrease of 0.6 % . the decrease was primarily due to a decline in volume of sales of existing products and the excise tax associated with the affordable care act , partially offset by improved pricing , sales of higher margin products and the favorable impact from the reversal of contingent consideration related to our axiom acquisition . emea emea net revenues for the twelve months ended december 31 , 2013 increased $ 47.1 million compared to the corresponding period in 2012 , an increase of 9.2 % . the increase was primarily due to businesses acquired in 2012 and 2013 , which added net revenues of $ 25.6 million , including $ 24.2 million generated by the lma business ; the favorable impact of foreign currency exchange rates of $ 11.6 million , price increases of $ 5.7 million , including increases resulting from distributor-to-direct conversions , new product sales of $ 2.9 million and higher sales volume of existing products of $ 1.3 million . emea segment operating profit for the twelve months ended december 31 , 2013 increased $ 22.1 million compared to the corresponding period in 2012 , an increase of 33.5 % . the increase in operating profit reflects lower manufacturing costs due to improved absorption and lower overhead costs as a result of process improvements , margin improvements driven by price increases resulting from distributor-to-direct conversions , as well as other price increases , the operating profit generated by the

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

loss on extinguishments of debt replace_table_token_12_th during the third quarter of 2013 , we refinanced our $ 775.0 million senior credit facility , which was comprised of a $ 375.0 million term loan and a $ 400.0 million revolving credit facility with a new $ 850.0 million senior credit facility consisting solely of a revolving credit facility . in connection with the refinancing , we recognized debt extinguishment costs of $ 1.3 million related to unamortized debt issuance costs resulting from the early repayment of the $ 375.0 million term loan . see note 8 to the consolidated financial statements included in this annual report on form 10-k for further information . taxes on income from continuing operations replace_table_token_13_th the effective income tax rate in 2014 was 13.0 % compared to 13.4 % in 2013. taxes on income from continuing operations in 2014 were $ 28.7 million compared to $ 23.5 million in 2013. the effective income tax rate for 2014 was impacted by a benefit from a shift in the mix of income to jurisdictions with lower statutory tax rates , tax benefits associated with u.s. federal tax return filings and , although to a lesser extent than 2013 , the realization of net tax benefits resulting from the expiration of statutes of limitation for u.s. state and foreign matters . the effective income tax rate in 2013 was 13.4 % compared to ( 9.9 ) % in 2012. taxes on income from continuing operations in 2013 were $ 23.5 million compared to $ 16.4 million in 2012. the effective income tax rate for 2013 was impacted by the realization of net tax benefits resulting from the expiration of statutes of limitation for u.s. federal and state and for foreign matters , tax benefits associated with u.s. and foreign tax return filings and the realization of tax benefits resulting from the resolution of a foreign tax matter . the effective income tax rate for 2012 was impacted by a $ 332 million goodwill impairment charge recorded in the first quarter 2012 , for which only $ 45 million was tax deductible .

for additional information on this transaction , see “ item 7 – management 's discussion and analysis of financial condition and results of operations – liquidity and capital resources ” and note 5 to the consolidated financial statements included elsewhere in this report . in august 2019 , we issued $ 350.0 million of 3.70 % senior notes due 2030 , and used the net proceeds , along with cash on hand , to complete a cash tender offer to purchase $ 100.0 million of the $ 375.0 million then outstanding aggregate principal amount of our 6.75 % senior notes due 2034 and to redeem $ 250.0 million of the $ 300.0 million then outstanding aggregate principal amount of our floating rate senior notes due 2021. a loss on extinguishment of debt of $ 31.4 million , primarily related to incremental consideration required to be paid to debtholders as a result of the interest rate differential over the remaining term as compared to current rates , was reported in twelve months 2019 as a result of the cash tender offer . see “ – liquidity and capital resources , ” below for further details . summary of financial results : consolidated net income attributable to common stockholders increased $ 127.1 million , or 54 % , to $ 363.9 million for twelve months 2019 from $ 236.8 million for twelve months 2018. the increase was driven by $ 128.7 million of lower reportable catastrophes ( reportable catastrophe losses , net of reinsurance and client profit sharing adjustments , and including reinstatement and other premiums ) and expansion in our global lifestyle segment , as well as full-year contributions from 40 twg . the increase was partially offset by a $ 163.9 million after-tax loss related to a change in the fair value of iké following the company 's decision to sell the business . global lifestyle net income increased $ 111.6 million , or 37 % , to $ 409.3 million for twelve months 2019 from $ 297.7 million for twelve months 2018 , primarily due to strong organic growth in mobile and full-year contributions from twg , partially offset by continued declines in global financial services and other . twg contributed approximately $ 130 million of full year net income to global lifestyle in 2019 compared to $ 74.7 million of income , excluding the $ 9.3 million after-tax benefit for client recoverables , for seven months in 2018. global lifestyle net earned premiums , fees and other income increased $ 1.91 billion to $ 7.09 billion for the twelve months 2019 compared with $ 5.18 billion for twelve months 2018 , primarily due to full-year contributions from twg and growth in connected living , primarily driven by growth in new mobile subscribers and higher trade-in volumes in our repairs and logistics business , and continued growth in global automotive . global housing net income increased $ 107.9 million , or 72 % , to $ 258.7 million for twelve months 2019 from $ 150.8 million for twelve months 2018 , primarily due to $ 128.8 million of lower reportable catastrophes . excluding reportable catastrophes , segment net income decreased , primarily driven by declines in lender-placed insurance , mostly from the reduction in loans tracked from a financially insolvent client and higher non-catastrophe loss experience in specialty and other . the decrease was partially offset by the absence of mortgage solutions losses in twelve months 2018 and growth in multifamily housing . global housing net earned premiums , fees and other income decreased $ 55.5 million to $ 2.03 billion for twelve months 2019 compared with $ 2.09 billion for twelve months 2018 , primarily due to the sale of mortgage solutions . excluding mortgage solutions , net earned premiums , fees and other income increased 3 % primarily due to growth in specialty and other and multifamily housing , partially offset by declines in lender-placed insurance , including the impact of additional catastrophe reinsurance . global preneed net income decreased $ 5.5 million , or 10 % , to $ 52.2 million for twelve months 2019 from $ 57.7 million for twelve months 2018 , primarily due to an out of period adjustment of $ 9.9 million related to a net over-capitalization of deferred acquisition costs occurring over a ten-year period . excluding this adjustment , segment net income increased primarily due to overall growth in the business and lower mortality . global preneed net earned premiums , fees and other income increased $ 11.4 million to $ 200.9 million for twelve months 2019 compared with $ 189.5 million for twelve months 2018 , primarily driven by growth in prefunded funeral policies and prior period sales of the final need product . critical factors affecting results our results depend on , among other things , the appropriateness of our product pricing , underwriting , the accuracy of our reserving methodology for future policyholder benefits and claims , the frequency and severity of reportable and non-reportable catastrophes , returns on and values of invested assets and our ability to manage our expenses and achieve expense savings . our results will also depend on our ability to profitably grow all of our businesses , in particular our connected living , multifamily housing and global automotive businesses , and manage the pace of declines in placement rates in our lender-placed insurance business and the north american credit insurance business in global financial services and other . factors affecting these items , including , but not limited to , conditions in financial markets , the global economy and the markets in which we operate , fluctuations in exchange rates and inflation , may have a material adverse effect on our results of operations or financial condition . for more information on these and other factors that could affect our results , see “ item 1a – risk factors . story_separator_special_tag while we have not been released from our contractual obligation to the policyholders , changes in and deviations from economic , mortality , morbidity , and withdrawal assumptions used in the calculation of these reserves will not directly affect our results of operations unless there is a default by the assuming reinsurer . deferred acquisition costs ( “ dac ” ) and value of business acquired ( “ voba ” ) only direct incremental costs associated with the successful acquisition of new or renewal insurance contracts are deferred to the extent that such costs are deemed recoverable from future premiums or gross profits . acquisition costs primarily consist of commissions and premium taxes . certain direct response advertising expenses are deferred when the primary purpose of the advertising is to elicit sales to customers who can be shown to have specifically responded to the advertising and the direct response advertising results in probable future benefits . premium deficiency testing is performed annually and generally reviewed quarterly . such testing involves the use of best estimate assumptions including the anticipation of investment income to determine if anticipated future policy premiums are adequate to recover all dac and related claims , benefits and expenses . to the extent a premium deficiency exists , it is recognized immediately by a charge to the consolidated statement of operations and a corresponding reduction in dac . if the premium deficiency is greater than unamortized dac , a loss ( and related liability ) is recorded for the excess deficiency . long duration contracts acquisition costs for pre-funded funeral life insurance policies issued prior to 2009 and certain life insurance policies no longer offered are deferred and amortized in proportion to anticipated premiums over the premium-paying period . these acquisition costs consist primarily of first year commissions paid to agents . for preneed investment-type annuities , preneed life insurance policies with discretionary death benefit growth issued after january 1 , 2009 , universal life insurance policies and investment-type annuities no longer offered , dac is amortized in proportion to the present value of estimated gross profits from investment , mortality , expense margins and surrender charges over the estimated life of the policy or contract . estimated gross profits include the impact of unrealized gains or losses on investments as if these gains or losses had been realized , with corresponding credits or charges included in accumulated other comprehensive income ( “ aoci ” ) . the assumptions used for the estimates are consistent with those used in computing the policy or contract liabilities . short duration contracts 45 acquisition costs relating to extended service contracts , vehicle service contracts , mobile device protection , credit insurance , lender-placed homeowners insurance and flood , multifamily housing and manufactured housing are amortized over the term of the contracts in relation to premiums earned . these acquisition costs consist primarily of advance commissions paid to agents . acquisition costs relating to disposed lines of business ( group term life , group disability , group dental and group vision ) consist primarily of compensation to sales representatives . such costs are deferred and amortized over the estimated terms of the underlying contracts . voba as part of the acquisition of businesses that sell long-term extended service contracts , such as warranty contracts sold by twg , and long-duration insurance contracts , such as life products , we establish an intangible asset related to voba , which represents the fair value of the expected future profits in unearned premium for insurance contracts acquired . for vehicle service contracts and extended service contracts such as those purchased in connection with the twg acquisition , the amount is determined using estimates , for premium earnings patterns , paid loss development patterns , expense loads , and discount rates applied to cash flows that include a provision for credit risk . for vehicle service contracts and extended service contracts , voba is amortized consistent with the premium earning patterns of the underlying in-force contracts . for limited payment policies , preneed life insurance policies , universal life policies and annuities , the valuation of voba at the time of acquisition is derived from similar assumptions to those used to establish the associated claim or benefit reserves and is amortized over the expected life of the policies . investments we regularly monitor our investment portfolio to ensure that investments that may be other-than-temporarily impaired are timely identified , properly valued and charged against earnings in the proper period . the determination that a security has incurred an other-than-temporary decline in value requires the judgment of management . assessment factors include , but are not limited to , the length of time and the extent to which the market value has been less than cost , the financial condition and rating of the issuer , whether any collateral is held , our intent and ability to retain the investment for a period of time sufficient to allow for recovery and our intent to sell or whether it is more likely than not that we will be required to sell for fixed maturity securities . inherently , there are risks and uncertainties involved in making these judgments . changes in circumstances and critical assumptions such as a continued weak economy , a more pronounced economic downturn or unforeseen events that affect one or more companies , industry sectors , or countries could result in additional impairments in future periods for other-than-temporary declines in value . the impairment of a fixed maturity security that we have the intent to sell or that we will more likely than not be required to sell is deemed other-than-temporary and is written down to its market value at the balance sheet date with the amount of the impairment reported as a realized loss in that period . for all other-than-temporarily impaired fixed maturity securities that do not meet either of these two criteria , we are required to analyze our ability

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

net cash provided by operating activities was $ 1.41 billion and $ 656.7 million for twelve months 2019 and twelve months 2018 , respectively . the increase in net cash provided by operating activities was primarily due to growth of our global lifestyle business that benefitted from the twg acquisition and organic growth in connected living from new and existing mobile protection programs domestically and internationally as well as a decrease in claim payments for reportable catastrophes . additionally , twelve months 2018 included a $ 41.5 million payment of an accrued indemnification liability related to the previous sale of our general agency business in the prior year . investing activities : 61 net cash used in investing activities was $ 619.8 million and $ 2.20 billion for twelve months 2019 and twelve months 2018 , respectively . the decrease in net cash used in investing activities was primarily due to the acquisition of twg in the second quarter 2018 when $ 1.49 billion of cash was used to fund a portion of the $ 2.47 billion purchase price . in addition , cash from our cies was lower due to the timing of clo structures launched in each year . for additional information , see note 9 to the consolidated financial statements included elsewhere in the report . the reductions in cash were partially offset by normal changes in our operating portfolio .

we continue to focus on our four key initiatives designed to allow us to drive profitable growth and to maximize value for shareholders , and thus better position ourselves to operate successfully in the current and future business environment . these four initiatives are : improving the consolidated operating margin . we continue to aggressively manage our cost structure and drive operating efficiencies which are expected to generate improving operating margins . we have already implemented significant actions to reduce costs during the last two years to manage challenging industry-wide preclinical market conditions . these actions have favorably impacted our margins in 2011. in the fourth quarter of 2011 , we implemented a headcount reduction of approximately 2 % , primarily in the preclinical services ( pcs ) business . this action is expected to generate annual savings of approximately $ 7.5 million beginning in 2012. improving free cash flow generation . we believe we have adequate capacity to support revenue growth in both business segments without significant additional investment for expansion . improved operating margins , elimination of operating losses with the sale of our phase i clinical business in 2011 and the closure of our pcs china facility in 2011 , and minimal requirements for capital expansion , should contribute to strong cash flow generation . we expect capital expenditures to be approximately $ 50 million in 2012 . 29 disciplined investment in growth businesses . we continue to maintain a disciplined focus on deployment of capital , investing in those areas of our existing business which will generate the greatest sales growth and profitability , such as genetically engineered models and services ( gems ) , discovery services ( ds ) , in vitro products and biopharmaceutical services . returning value to shareholders . we are repurchasing our stock with the intent to drive immediate shareholder value and earnings per share accretion . during 2011 , we repurchased 8.4 million shares . our weighted average shares outstanding for 2011 has decreased to 51.3 million shares from 62.6 million shares for 2010. as of december 31 , 2011 , we had $ 116.3 million remaining on our $ 750.0 million stock repurchase authorization . total net sales in 2011 were $ 1,142.6 million , an increase of 0.8 % from $ 1,133.4 million in 2010. the sales increase was due primarily to increased sales for rms partially offset by lower pcs sales . the effect of foreign currency translation had a positive impact on sales of 2.2 % . due to the timing of our fiscal year end , we periodically recognize a `` 53rd week `` in a fiscal year . the 53 rd week in 2011 contributed approximately 1.0 % to reported 2011 sales . our gross margin increased to 35.2 % of net sales in 2011 compared to 33.9 % of net sales in 2010 , due primarily to cost savings actions and the impact of increased rms sales . our operating income was $ 174.3 million for 2011 compared to an operating loss of $ 298.5 million for 2010. income from continuing operations , net of tax , was $ 115.5 million for 2011 compared to an operating loss of $ 334.1 million for 2010. the increase in operating income was primarily due to prior year items which include a goodwill impairment , asset impairments and the $ 30.0 million acquisition termination fee . for 2011 , diluted earnings per share attributable to common shareowners was $ 2.14 compared to a diluted loss per share of $ 5.38 in 2010. our capital expenditures totaled $ 49.1 million for 2011 , compared to $ 42.9 million for 2010. our planned capital expenditures in 2012 are approximately $ 50.0 million . net income attributable to common shareowners was $ 109.6 million in 2011 , compared to a net loss of $ 336.7 million in 2010. we report two segments : research models and services ( rms ) and preclinical services ( pcs ) , which reflects the manner in which our operating units are managed . our rms segment , which represented 61.7 % of net sales in 2011 , includes three categories : production of research models , research model services , and other products . research model services include four business units : genetically engineered models and services ( gems ) , research animal diagnostics ( rads ) , discovery services ( ds ) , and insourcing solutions ( is ) . other products includes our in vitro business and avian vaccine services . net sales for the rms segment increased 5.8 % compared to 2010 , primarily driven by higher sales of other products and research model services . the effect of foreign currency translation has a positive impact on sales of 2.7 % . we experienced increases in both the rms gross margin , to 42.1 % from 41.7 % , and operating margin to 29.2 % from 27.7 % last year , due mainly to the impact of cost savings and our fixed cost leverage with increased sales . our pcs segment , which represented 38.3 % of net sales in 2011 , includes services required to take a drug through the development process including discovery support , safety assessment and biopharmaceutical services . sales for this segment decreased 6.3 % from 2010 , driven by slower demand for preclinical services partially offset by favorable foreign currency , which increased sales growth by 1.5 % . we experienced an increase in the pcs gross margin to 24.0 % from 22.8 % in 2010 , due mainly to impairments in 2010 and cost savings in 2011 partially offset by the impact of sales mix and continued pricing pressure . story_separator_special_tag 33 as of december 31 , 2011 , earnings of non-u.s. subsidiaries considered to be indefinitely reinvested totaled $ 106.5 million . no provision for u.s. income taxes has been provided thereon . upon distribution of those earnings in the form of dividends or otherwise , we would be subject to both u.s. federal and state taxes and withholding taxes payable to the various foreign countries . it is our policy to indefinitely reinvest the earnings of our non-u.s. subsidiaries unless they can be repatriated in a manner that generates a tax benefit or an unforeseen cash need arises in the united states and the earnings can be repatriated in a manner that is substantially free of income taxes . it is not practicable to estimate the amount of additional income taxes payable on the earnings that are indefinitely reinvested in foreign operations . we are a worldwide business and operate in various tax jurisdictions where tax laws and tax rates are subject to change given the political and economic climate in these countries . we report and pay income taxes based upon operational results and applicable law . our current and deferred tax provision is based upon enacted tax rates in effect for the current and future periods . any significant fluctuation in tax rates or changes in tax laws and regulations or changes to interpretation of existing tax laws and regulations could cause our estimate of taxes to change resulting in either increases or decreases in our effective tax rate . we recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the tax position . the tax benefits recognized in our financial statements from such positions are measured based upon the largest benefit that has a greater than 50 % likelihood of being realized upon ultimate resolution . due to our size and the number of tax jurisdictions within which we conduct our global business operations , we are subject to income tax audits on a regular basis . as a result , we have tax reserves which are attributable to potential tax obligations around the world . we believe we have sufficiently provided for all audit exposures and assessments . resolutions of these audits or the expiration of the statute of limitations on the assessment of income taxes for any tax year may result in an increase or decrease to our effective tax rate . results of operations the following table summarizes historical results of operations as a percentage of net sales for the periods shown : replace_table_token_5_th 34 segment operations the following tables show the net sales and the percentage contribution of each of our reportable segments for the past three years . they also show cost of products sold and services provided , selling , general and administrative expenses , amortization of goodwill and intangibles and operating income by segment and as percentages of their respective segment net sales . replace_table_token_6_th 35 replace_table_token_7_th in our consolidated statements of income , we provide a breakdown of net sales and cost of sales between net products and services . such information is reported irrespective of the business segment from which the sales were generated . fiscal 2011 compared to fiscal 2010 net sales . net sales for the year ending december 31 , 2011 were $ 1,142.6 million , an increase of $ 9.2 million , or 0.8 % , from $ 1,133 million for the year ending december 25 , 2010 , due primarily to increased sales for rms and favorable foreign currency translation of 2.2 % partially offset by lower pcs sales . research models and services . for the year ending december 31 , 2011 , net sales for our rms segment were $ 705.4 million , an increase of $ 38.4 million , or 5.8 % , from $ 667.0 million for the year ending december 25 , 2010 , due primarily to higher other product sales , which include our avian and in vitro businesses , as well as research model services . the effect of favorable foreign currency translation increased sales by 2.7 % . preclinical services . for the year ending december 31 , 2011 , net sales for our pcs segment were $ 437.2 million , a decrease of $ 29.2 million , or 6.3 % , from $ 466.4 million for the year ending december 25 , 2010. the sales decrease was driven by reduced biopharmaceutical spending , which resulted in lower demand for our services and a shift in study mix , offset by favorable foreign currency translation of 1.5 % . cost of products sold and services provided . cost of products sold and services provided during 2011 was $ 740.4 million , a decrease of $ 8.3 million , or 1.1 % , from $ 748.7 million during 2010. cost of products sold and services provided during the year ending december 31 , 2011 was 64.8 % of net sales , compared to 66.1 % during the year ending december 25 , 2010. research models and services . cost of products sold and services provided for rms during 2011 was $ 408.1 million , an increase of $ 19.5 million , or 5.0 % , compared to $ 388.6 million in 2010. cost of products sold and services provided for the year ending december 31 , 2011 decreased to 57.9 % of net sales compared to 58.3 % of net sales for the year ending december 25 , 2010. the decrease in cost as a percentage of sales was due primarily to the impact of our cost-savings actions partially 36 offset by the large model inventory write-off . preclinical services . cost of services provided for the pcs segment during 2011 was $ 332.3 million , a decrease of $ 27.7 million , compared to $ 360.1 million

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources the following discussion analyzes liquidity and capital resources by operating , investing and financing activities as presented in our consolidated statements of cash flows . our principal sources of liquidity have been our cash flow from operations , our marketable securities and our revolving line of credit arrangements . on december 25 , 2010 , we had a $ 750 million credit agreement , which had a maturity date of august 26 , 2015 and provided for a $ 230 million term loan , a 133.8 million euro term loan and a $ 350 million revolving credit facility . on february 24 , 2011 , we amended the credit agreement , primarily to provide for an incremental $ 150 million term loan and to modify the leverage ratio used in calculating the interest rate applicable to amounts outstanding . on september 23 , 2011 , we amended and restated the credit agreement primarily to reduce the interest rate margin applicable to the term loans and the revolving loans based on our leverage ratio and extend the maturity date by approximately one year to september 2016. the current credit agreement provides for a $ 299.8 million term loan , a 69.4 million euro term loan and a $ 350 million revolving credit facility . under specified circumstances , we have the ability to increase the term loans and or revolving line of credit by up to $ 250 million in the aggregate . the term loans mature in 20 quarterly installments with the last installment due september 23 , 2016. the $ 350 million revolving facility also matures on september 23 , 2016 and requires no scheduled payment before that date . the book value of our term and revolving loans approximates fair value .

each software technology can be used individually or in combination with other technologies from our single platform suite . 34 our software licenses typically provide for a perpetual right to use our software and are sold on a per terabyte capacity basis , on a per-copy basis , as site licenses or as a solution set . during the fiscal year ended march 31 , 2017 , approximately 69 % of software license revenue was sold on a capacity basis . capacity based software licenses provide our customers with unlimited licenses of specified software products based on a defined level of terabytes of data under management . as a result , when we sell our platform through a capacity license , certain of the various commvault functionalities are bundled into one capacity based price . we anticipate that capacity based licenses will continue to account for the majority of our software license revenue for the near future . site licenses give the customer the additional right to deploy the software on a limited basis during a specified term . our primary solution sets in our software suite include virtual machine backup , recovery and cloud management ; endpoint data protection ; and email archive . these solution sets can be individually deployed or combined as part of a comprehensive data protection and information management solution . our solution sets are generally sold on a per unit basis such as per virtual machine for our virtual machine backup , recovery and cloud management solution set ; per mailbox for our email archive solution set and per user for our endpoint data protection solution set . historically , an insignificant amount of our revenue has been sold under subscription , or term based , license arrangements . in these arrangements , the customer generally has the right to use the software on either a capacity basis or per-copy or per-unit basis over a designated period of time . we expect revenue from these types of arrangements to become a more significant portion of our total revenue . the industry in which we currently operate continues to go through accelerating changes as the result of compounding data growth and the introduction of new technologies . we are continuing to pursue an aggressive product development program in both data and information management solutions . our data management solutions include not only traditional backup , but also new innovations in de-duplication , data movement , virtualization , snap-based backups and enterprise reporting . our information management innovations are primarily in the areas of archiving , ediscovery , records management , governance , operational reporting and compliance . we remain focused on both the data and information management trends in the marketplace and , in fact , a material portion of our existing research and development expenses are utilized toward the development of such new technologies discussed above . while we are confident in our ability to meet these changing industry demands with our commvault suite and potential future releases , the development , release and timing of any features or functionality remain at our sole discretion and our solutions or other technologies may not be widely adopted . given the nature of the industry in which we operate , our software applications are subject to obsolescence . as noted above , we continually develop and introduce updates to our existing software applications in order to keep pace with evolving industry technologies . in addition , we must address evolving industry standards , changing customer requirements and competitive software applications that may render our existing software applications obsolete . for each of our software applications , we provide full support for the current generally available release and one prior release . when we declare a product release obsolete , a customer notice is delivered twelve months prior to the effective date of obsolescence announcing continuation of full product support for the first six months . we provide an additional six months of extended assistance support in which we only provide existing workarounds or fixes that do not require additional development activity . we do not have existing plans to make any of our software products permanently obsolete . sources of revenues we derive a significant portion of our total revenues from sales of licenses of our software applications . we do not customize our software for a specific end-user customer . we sell our software applications to end-user customers both directly through our sales force and indirectly through our global network of value-added reseller partners , systems integrators , corporate resellers and original equipment manufacturers . our software revenue was 46 % of our total revenues for fiscal 2017 , 43 % for fiscal 2016 and 47 % for fiscal 2015 . in recent fiscal years , we generated approximately three-quarters of our software revenue from our existing customer base and approximately one-quarter of our software revenue from new customers . in addition , our total software revenue in any particular period is , to a certain extent , dependent upon our ability to generate revenues from large customer software deals , which we refer to as enterprise software transactions . enterprise software transactions ( transactions greater than $ 0.1 million ) represented approximately 56 % of our software revenue in fiscal 2017 , 53 % for fiscal 2016 and 56 % for fiscal 2015 . 35 software revenue generated through indirect distribution channels was 87 % of total software revenue in fiscal 2017 , 86 % in fiscal 2016 and 82 % in fiscal 2015 . software revenue generated through direct distribution channels was 13 % of total software revenue in fiscal 2017 , 14 % in fiscal 2016 and 18 % in fiscal 2015 . the dollar value of software revenue generated through indirect distribution channels increased approximately $ 34.8 million , or 16 % , in fiscal 2017 compared to fiscal 2016 . story_separator_special_tag expected volatility is calculated based on a blended approach that includes the implied volatility of our traded options with a remaining maturity greater than six months and the historical realized volatility of our common stock . the risk-free interest rate is determined by reference to u.s. treasury yield curve rates with a remaining term that is approximately the expected life assumed at the date of grant . forfeitures are estimated based on our historical analysis of actual stock option forfeitures . no options were granted during the fiscal year ended march 31 , 2017. the weighted average fair value of stock options granted was $ 15.20 per option during the year ended march 31 , 2016 . in addition , the weighted average fair value of restricted stock units awarded was $ 50.66 per share during the year ended march 31 , 2017 and $ 37.27 per share during the year ended march 31 , 2016 . in fiscal 2017 , we granted 115,000 performance restricted stock units ( `` psu `` ) to certain executives . vesting of these awards is contingent upon i ) the company meeting certain company-wide revenue and non-gaap performance goals ( performance-based ) in fiscal 2017 and ii ) the company 's customary service periods . the awards vest in three annual tranches and have a maximum potential to vest at 200 % ( 230 shares ) based on actual fiscal 2017 performance . the related stock-based compensation expense is determined based on the value of the underlying shares on the date of grant and is recognized over the vesting term using the accelerated method . during the interim financial periods , we estimate the probable number of psu 's that would vest until the ultimate achievement of the performance goals is known . 39 in fiscal 2017 , we granted 123,000 market performance stock units to certain executives . the vesting of these awards is contingent upon meeting certain total shareholder return ( tsr ) levels as compared to a market index over the next three years . the awards vest in three annual tranches and have a maximum potential to vest at 200 % ( 246 ,000 shares ) based on tsr performance . the related stock-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized using the accelerated method over the vesting term . the estimated fair value was calculated using a monte carlo simulation model . the weighted average fair value of the awards granted during the year was $ 57.28 . accounting for income taxes as part of the process of preparing our financial statements , we are required to estimate our income taxes in each of the jurisdictions in which we operate . this process involves estimating our actual current tax exposure , including assessing the risks associated with tax audits , and assessing temporary differences resulting from different treatment of items for tax and accounting purposes . these differences result in deferred tax assets and liabilities . as of march 31 , 2017 , we had net deferred tax assets of approximately $ 61.0 million , which were primarily related to stock-based compensation , deferred revenue and tax credits . we assess the likelihood that our deferred tax assets will be recovered from future taxable income , and to the extent that we believe recovery is not likely , we establish a valuation allowance . during the year ended march 31 , 2017 , we decreased the valuation allowance by $ 1.0 million against our deferred tax assets which now totals $ 1.8 million . all of the valuation allowance we have recorded at march 31 , 2017 is related to new jersey state research tax credits due to uncertainties related to the ability to utilize such state research tax credits before they expire . we based our valuation allowance on our estimates of taxable income by legal entity and the period over which our state research tax credits will be recoverable . at march 31 , 2017 , we have federal and state research tax credit ( `` r & d `` ) carryforwards of approximately $ 3.3 million and $ 3.2 million , respectively . the federal research tax credit carryforwards expire from 2025 through 2036 , and the state research tax credit carryforwards expire from 2017 through 2023. at march 31 , 2017 , we have federal alternative minimum tax credit carryforwards of $ 1.1 million . as of march 31 , 2017 , we had unrecognized tax benefits of $ 2.1 million , all of which , if recognized , would favorably affect the effective tax rate . in addition , we have accrued interest and penalties of $ 0.4 million related to the unrecognized tax benefits . interest and penalties , if any , related to unrecognized tax benefits are recorded in income tax expense . we conduct business globally and as a result , file income tax returns in the united states and in various state and foreign jurisdictions . in the normal course of business , we are subject to examination by taxing authorities throughout the world , including such major jurisdictions as the united states , australia , canada , germany , netherlands and united kingdom . there are currently active audits in the united kingdom , india , and new jersey . the following table summarizes the tax years in the major tax jurisdictions that remain subject to income tax examinations by tax authorities as of march 31 , 2017 . the years subject to income tax examination in our foreign jurisdictions cover the maximum time period with respect to these jurisdictions . due to nol carryforwards , in some cases the tax years continue to remain subject to examination with respect to such nols . tax jurisdiction years subject to income tax examination u.s. federal 2013 - present new jersey 2012 - present foreign

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

net cash provided by operating activities was $ 100.0 million in fiscal 2017 , $ 84.4 million in fiscal 2016 and $ 123.8 million in fiscal 2015 . in fiscal 2017 , cash generated by operating activities was primarily due to net income adjusted for the impact of non-cash charges and increases in deferred services revenue as a result of customer support agreements from new customers and renewal agreements with our installed customer base and an increase in accrued expenses , partially offset by an increase in accounts receivable . in fiscal 2016 , cash generated by operating activities was primarily due to net income adjusted for the impact of non-cash charges and increases in deferred services revenue as a result of customer support agreements from new customers and renewal agreements with our installed customer base . in fiscal 2015 , cash generated by operating activities was primarily due to net income adjusted for the impact of non-cash charges ; an increase in deferred services revenue ; and an increase in accrued liabilities . these increases were partially offset by an increase in accounts receivable and timing of cash receipts . 45 net cash used in investing activities was $ 28.0 million in fiscal 2017 , $ 62.2 million in fiscal 2016 and $ 90.0 million in fiscal 2015 . in fiscal 2017 , cash used in investing activities was related to $ 21.6 million of net purchases of short-term investments of u.s. treasury bills , and $ 6.4 million of capital expenditures as we continue to invest in and enhance our global infrastructure .

components of operating results revenue to date , our revenue has consisted of product sales revenue since september 2017 and upfront license fees , reimbursed research and development expenses and milestone payments from our strategic collaboration with celgene for tislelizumab entered in 2017 and our collaboration agreements with merck kgaa , darmstadt germany for pamiparib and lifirafenib entered in 2013. we do not expect to generate significant revenue from internally-developed drug candidates unless and until we successfully complete development and obtain regulatory approval for one or more of our drug candidates , which is subject to significant uncertainty . revenues from product sales are recognized when persuasive evidence of an arrangement exists , delivery has occurred and title of the product and associated risk of loss has transferred to the customer , the price is fixed or determinable , collection from the customer has been reasonably assured , and returns and allowances can be reasonably estimated . product sales are recorded net of estimated rebates , estimated product returns and other deductions . provisions for estimated reductions to revenue are provided for in the same period the related sales are recorded and are based on the sales terms , historical experience and trend analysis . we expect revenue from product sales to increase in 2018 as we expand our efforts to promote and obtain reimbursement for abraxane ® and revlimid ® and launch vidaza ® in china . we also record revenue from our collaboration and license agreements with celgene and merck kgaa , darmstadt germany . under each agreement , we have received upfront payments related to the license fee which was recognized upon the delivery of the license right . additionally , the reimbursement of remaining undelivered research and development services is recognized over the performance periods of the respective collaboration arrangements . in the case of the celgene arrangement , we will also receive research and development reimbursement revenue for the basket study trials that celgene opts into . see note 3 to our consolidated financial statements included in this annual report for a description of these agreements . expenses cost of sales cost of sales includes the acquisition costs of our commercial products . research and development expenses research and development expenses consist of the costs associated with our research and development activities , conducting preclinical studies and clinical trials and activities related to regulatory filings . our research and development expenses consist of : · expenses incurred under agreements with contract research organizations , or cros , contract manufacturing organizations , and consultants that conduct and support clinical trials and preclinical studies ; · costs of comparator drugs in certain of our clinical trials ; · costs associated with preclinical activities and development activities ; · costs associated with regulatory operations ; · employee‑related expenses , including salaries , benefits , travel and share‑based compensation expense for research and development personnel ; and 98 · other expenses , which include direct and allocated expenses for rent and maintenance of facilities , insurance and other supplies used in research and development activities . our current research and development activities mainly relate to the clinical advancement of our five internally-developed drug candidates mentioned above : · zanubrutinib , an investigational small molecule inhibitor of btk ; · tislelizumab , an investigational humanized monoclonal antibody against pd‑1 ; · pamiparib , an investigational small molecule inhibitor of parp1 and parp2 ; · lifirafenib , a novel small molecule inhibitor of both the monomer and dimer forms of braf ; and · bgb-a333 , an investigational humanized monoclonal antibody against pd-l1 . we expense research and development costs when we incur them . we record costs for certain development activities , such as clinical trials , based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment , clinical site activations or information our vendors provide to us . we expense the manufacturing costs of our internally-developed products that are used in clinical trials as they are incurred , as research and development expense . we do not allocate employee‑related costs , depreciation , rental and other indirect costs to specific research and development programs because these costs are deployed across multiple product programs under research and development and , as such , are separately classified as unallocated research and development expenses . at this time , it is difficult to estimate or know for certain , the nature , timing and estimated costs of the efforts that will be necessary to complete the development of our internally-developed drug candidates . we are also unable to predict when , if ever , material net cash inflows will commence from sales of our internally-developed drug candidates . this is due to the numerous risks and uncertainties associated with developing such drug candidates , including the uncertainty of : · successful enrollment in and completion of clinical trials ; · establishing an appropriate safety profile ; · establishing commercial manufacturing capabilities or making arrangements with third‑party manufacturers ; · receipt of marketing approvals from applicable regulatory authorities ; · successfully launching and commercializing our drug candidates , if and when approved , whether as monotherapies or in combination with our internally discovered drug candidates or third‑party products ; · obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our drug candidates ; · continued acceptable safety profiles of the products following approval ; · competition from competing products ; and · retention of key personnel . a change in the outcome of any of these variables with respect to the development of any of our drug candidates would significantly change the costs , timing and viability associated with the development of that drug candidate . research and development activities are central to our business model . story_separator_special_tag net cash provided by financing activities was $ 380.9 million for the year ended december 31 , 2016 , which was due to proceeds of $ 366.7 million from our initial and follow-on public offerings , net of offering costs , $ 12.0 million of long-term loan proceeds and $ 2.2 million of proceeds from the exercise of warrants and employee share options . net cash provided by financing activities was $ 103.2 million for the year ended december 31 , 2015 , which was primarily due to proceeds of $ 97.4 million from the issuance of series a-2 preferred shares to certain investors , $ 6.2 million of long-term loan proceeds from suzhou industrial park biotech development co. , ltd. and china construction bank and $ 0.1 million in proceeds from the exercise of employee stock options , partially offset by $ 0.3 million in the repayment of a short-term loan . 107 operating capital requirements we do not expect to generate significant revenue from product sales unless and until we obtain regulatory approval for and commercialize one of our current or future drug candidates . we have exclusive rights to distribute and promote celgene 's approved cancer therapies in china , for which we began recognizing revenue in the third quarter of 2017. we anticipate that we will continue to generate losses for the foreseeable future , and we expect our losses to increase as we continue the development of , and seek regulatory approvals for , our drug candidates , and prepare for commercialization and begin to commercialize any approved products . as a growing public company , we will continue to incur additional costs associated with our operations . in addition , we expect to incur significant commercialization expenses for product sales , marketing and manufacturing of our in-licensed drug products in china and , subject to obtaining regulatory approval , our drug candidates . accordingly , we anticipate that we will need substantial additional funding in connection with our continuing operations . based on our current operating plan , we expect that our existing cash , cash equivalents and short-term investments as of december 31 , 2017 , will enable us to fund our operating expenses and capital expenditures requirements for at least the next 12 months after the date that the financial statements included in this report are issued . we expect that our expenses will continue to increase substantially as we fund our ongoing research and clinical development efforts , including our ongoing and planned pivotal trials for zanubrutinib , tislelizumab and pamiparib , both in china and globally ; our other ongoing and planned clinical trials ; regulatory filing and registration of our late-stage drug candidates ; expansion of commercial operations in china and preparation for launch of our drug candidates globally ; business development and manufacturing activities ; and working capital and other general corporate purposes . we have based our estimates on assumptions that may prove to be wrong , and we may use our available capital resources sooner than we currently expect . because of the numerous risks and uncertainties associated with the development and commercialization of our drug candidates , we are unable to estimate the amounts of increased capital outlays and operating expenditures necessary to complete the development and commercialization of our drug candidates . our future capital requirements will depend on many factors , including : · the costs , timing and outcome of regulatory reviews and approvals ; · the ability of our drug candidates to progress through clinical development successfully ; · the initiation , progress , timing , costs and results of nonclinical studies and clinical trials for our other programs and potential drug candidates ; · the number and characteristics of the drug candidates we pursue ; · the costs of establishing commercial manufacturing capabilities or securing necessary supplies from third-party manufacturers ; · the costs of preparing , filing and prosecuting patent applications , maintaining and enforcing our intellectual property rights and defending intellectual property‑related claims ; · the costs of establishing and expanding our commercial operations and the success of those operations ; · the extent to which we acquire or in‑license other products and technologies ; and · our ability to maintain and establish collaboration arrangements on favorable terms , if at all . until such time , if ever , as we can generate substantial product revenue , we expect to finance our cash needs through a combination of equity offerings , debt financings , collaboration agreements , strategic alliances , licensing arrangements , government grants and other available sources . under sec rules , we currently qualify as a “ well-known seasoned issuer , ” which allows us to file shelf registration statements to register an unspecified amount of securities that are effective upon filing . on may 26 , 2017 , we filed such a shelf registration statement with the sec for the issuance of an unspecified amount of ordinary shares ( including in the form of adss ) , preferred shares , various series of debt 108 securities and or warrants to purchase any of such securities , either individually or in units , from time to time at prices and on terms to be determined at the time of any such offering . this registration statement was effective upon filing and will remain in effect for up to three years from filing . to the extent that we raise additional capital through the sale of equity or convertible debt securities , the ownership interest of our shareholders will be diluted , and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of adss or ordinary shares . debt financing , if available , may involve agreements that include covenants limiting or restricting our ability to take specific actions , such as incurring additional debt , making capital expenditures or declaring dividends and may require

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources since inception , we have incurred annual net losses and negative cash flows from our operations . substantially all of our losses have resulted from the funding of our research and development programs and selling , general and administrative expenses associated with our operations . we incurred net losses of $ 93.3 million , $ 119.2 million and $ 57.1 million for the years ended december 31 , 2017 , 2016 and 2015 , respectively . as of december 31 , 2017 , we had an accumulated deficit of $ 330.5 million . our operating activities provided $ 12.8 million for the year ended december 31 , 2017 and used $ 89.5 million and $ 39.8 million for the years ended december 31 , 2016 and 2015 , respectively . we have financed our operations principally through proceeds from public and private offerings of our securities and proceeds from our collaboration agreements with celgene and merck kgaa , darmstadt germany . during the year ended december 31 , 2017 , we raised an aggregate of $ 601.4 million , consisting of $ 188.5 million in net proceeds from a public offering of adss , $ 149.9 million in net proceeds from the sale of ordinary shares to celgene in connection with our collaboration agreement , and $ 263.0 million in up-front fees under our collaboration agreement with celgene . as of december 31 , 2017 , we had cash , cash equivalents and short-term investments of $ 837.5 million , including approximately $ 139.5 million of cash and cash equivalents and short-term investments held by our joint venture , beigene biologics , to build a commercial biologics facility in guangzhou , china and to fund research and development of biologics drug candidates in china .

we combine a broad portfolio of rf solutions , highly differentiated semiconductor technologies , deep systems-level expertise and scale manufacturing to supply a diverse group of customers in expanding markets , including smartphones and other mobile devices , defense and aerospace , wifi customer premises equipment , cellular base stations , optical networks , automotive connectivity , and smart home applications . within these markets , our products enable a broad range of leading-edge applications - from very-high-power wired and wireless infrastructure solutions to ultra-low-power smart home solutions . our products and technologies help transform how people around the world access their data , transact commerce , and interact with their communities . 33 qorvo employs more than 8,600 people . we have world-class manufacturing facilities , and our fabrication facility in richardson , texas , is a u.s. dod-accredited ‘ trusted source ' ( category 1a ) for gaas , gan and baw technologies . our design and manufacturing expertise covers many semiconductor process technologies , which we source both internally and through external suppliers . our primary wafer fabrication facilities are in texas , florida , north carolina and oregon , and our primary assembly and test facilities are in china , costa rica , germany and texas . we also operate design , sales and manufacturing facilities throughout asia , europe and north america . business segments we design , develop , manufacture and market our products to leading u.s. and international oems and odms in the following operating segments : mobile products ( mp ) - mp supplies cellular rf and wifi solutions into a variety of mobile devices , including smartphones , notebook computers , wearables , tablets , and cellular-based applications for the iot . mobile device manufacturers and mobile network operators are adopting new technologies to address the growing demand for data-intensive , increasingly cloud-based , distributed applications and for mobile devices with smaller form factors , improved signal quality , less heat and longer talk and standby times . new wireless communications standards are being deployed to utilize available spectrum more efficiently . carrier aggregation is being implemented , primarily in the downlink , to support wider bandwidths , increase data rates and improve network performance . these trends increase the complexity of smartphones , require more rf content and place a premium on performance , integration , systems-level expertise , and product and technology portfolio breadth , all of which are mp strengths . we offer a comprehensive product portfolio of baw and saw filters , pas , lnas , switches , multimode multi-band pas and transmit modules , rf power management ics , diversity receive modules , antenna switch modules , antenna tuning and control solutions , modules incorporating pas and duplexers and modules incorporating switches , pas and duplexers . infrastructure and defense products ( idp ) - idp is a leading global supplier of rf solutions with a diverse portfolio of solutions that `` connect and protect , `` spanning communications , network infrastructure and defense applications . these applications include high performance defense systems such as radar , electronic warfare and communication systems , wifi customer premises equipment for home and work , high speed connectivity in lte and 5g base stations , cloud connectivity via data center communications and telecom transport , automotive connectivity and smart home solutions . our idp products include high power gaas and gan pas , lnas , switches , cmos system-on-a-chip solutions , premium baw and saw filter solutions and various multi-chip and hybrid assemblies . as of april 1 , 2017 , our reportable segments are mp and idp . these business segments are based on the organizational structure and information reviewed by our chief executive officer , who is our chief operating decision maker ( `` codm `` ) , and are managed separately based on the end markets and applications they support . the codm allocates resources and evaluates the performance of each operating segment primarily based on operating income and operating income as a percentage of revenue . for financial information about the results of our operating segments for each of the last three fiscal years , see note 16 of the notes to the consolidated financial statements set forth in part ii , item 8 of this report . fiscal 2017 management summary our revenue increased 16.2 % in fiscal 2017 to $ 3,032.6 million compared to $ 2,610.7 million in fiscal 2016 , primarily due to higher demand for our cellular rf solutions in support of marquee smartphones and customers based in china and higher sales of our wireless infrastructure , defense and aerospace and wifi products . our gross margin for fiscal 2017 was 37.4 % compared to 40.2 % for fiscal 2016 . gross margin was adversely impacted in fiscal 2017 by an unfavorable change in product mix towards lower margin low-band power amplifier + duplexer ( `` pad `` ) modules , product cost reductions lagging normal average selling price erosion , lower factory utilization and unfavorable inventory adjustments primarily due to lower than expected manufacturing and assembly yields on the low-band pad modules in the second quarter of fiscal 2017. these adverse factors were partially offset by lower intangible amortization , stock-based compensation and other costs related to the business combination . 34 our operating income was $ 88.1 million in fiscal 2017 compared to $ 12.0 million in fiscal 2016 . this increase was primarily due to higher gross profit from higher revenue and lower intangible amortization , stock-based compensation and other costs related to the business combination in fiscal 2017 as compared to fiscal 2016 . our net loss per diluted share was $ 0.13 for fiscal 2017 as compared to net loss per diluted share of $ 0.20 for fiscal 2016 . we generated positive cash flow from operations of $ 776.8 million for fiscal 2017 as compared to $ 687.9 million for fiscal 2016 . story_separator_special_tag during fiscal 2016 , north carolina enacted legislation to reduce the corporate income tax rate from 5 % to 4 % and phase-in over a three-year period a single sales factor apportionment methodology . in addition , the company underwent operational changes to leverage existing resources and capabilities of its singapore subsidiary and consolidate operations and responsibilities associated with its foreign manufacturing operations and foreign customers in that singapore subsidiary . together these changes resulted in a significant decrease in the amount of future taxable income expected to be allocated to north carolina and other states in which the company 's net operating loss and credit carryovers exist . as a result , it was no longer more likely than not that the deferred tax assets related to those state net operating loss and credit carryovers for which a valuation 39 allowance is being provided will be realized before they expire . the foreign net operating losses relate to the china subsidiary that owns an assembly and test facility that became operational during fiscal 2016 , and which has incurred start-up losses since inception . the valuation allowance against net deferred tax assets decreased in fiscal 2015 by $ 129.5 million . the decrease was comprised of $ 135.7 million for domestic deferred tax assets for which realization was determined to be more likely than not with the increase in domestic deferred tax liabilities related to domestic amortizable intangible assets arising in connection with the business combination and other changes in the net deferred tax assets for foreign subsidiaries during the fiscal year , offset by an increase of $ 6.2 million related to deferred tax assets acquired in the business combination which are not more likely than not of being realized . at the end of fiscal 2015 , a $ 0.2 million valuation allowance remained against foreign net deferred tax assets and a $ 13.6 million valuation allowance remained against domestic deferred tax assets as it is more likely than not that the related deferred tax assets will not be realized , effectively increasing the domestic net deferred tax liabilities . as of april 1 , 2017 , we had federal loss carryovers of approximately $ 202.6 million that expire in fiscal years 2020 to 2036 if unused and state losses of approximately $ 209.3 million that expire in fiscal years 2018 to 2036 if unused . federal research credits of $ 104.8 million , federal foreign tax credits of $ 5.0 million , and state credits of $ 57.4 million may expire in fiscal years 2018 to 2037 , 2018 to 2027 , and 2018 to 2032 , respectively . federal alternative minimum tax credits of $ 3.2 million carry forward indefinitely . foreign losses in china of approximately $ 3.3 million and in the netherlands of approximately $ 55.4 million expire in fiscal year 2021 and fiscal years 2018 to 2026 , respectively . included in the amounts above are certain net operating losses and other tax attribute assets acquired in conjunction with the greenpeak acquisition during the current fiscal year and acquisitions of sirenza microdevices , inc. ; silicon wave , inc. ; amalfi semiconductor inc. ; and the business combination in prior years . the utilization of these acquired domestic tax assets is subject to certain annual limitations as required under internal revenue code section 382 and similar state income tax provisions . our gross unrecognized tax benefits totaled $ 90.6 million as of april 1 , 2017 , $ 69.1 million as of april 2 , 2016 , and $ 59.4 million as of march 28 , 2015 . of these amounts , $ 84.4 million ( net of federal benefit of state taxes ) , $ 64.2 million ( net of federal benefit of state taxes ) , and $ 55.0 million ( net of federal benefit of state taxes ) as of april 1 , 2017 , april 2 , 2016 , and march 28 , 2015 , respectively , represent the amounts of unrecognized tax benefits that , if recognized , would impact the effective tax rate in each of the fiscal years . it is our policy to recognize interest and penalties related to uncertain tax positions as a component of income tax expense . during fiscal years 2017 , 2016 and 2015 , we recognized $ 2.1 million , $ 1.6 million and $ 1.2 million , respectively , of interest and penalties related to uncertain tax positions . accrued interest and penalties related to unrecognized tax benefits totaled $ 7.1 million , $ 5.0 million and $ 3.4 million as of april 1 , 2017 , april 2 , 2016 and march 28 , 2015 , respectively . within the next 12 months , we believe it is reasonably possible that only a minimal amount of gross unrecognized tax benefits will be reduced as a result of reductions for tax positions taken in prior years where the only uncertainty was related to the timing of the tax deduction . stock-based compensation under financial accounting standards board ( `` fasb `` ) asc 718 , “ compensation – stock compensation , ” stock-based compensation cost is measured at the grant date , based on the estimated fair value of the award using an option pricing model for stock options ( black-scholes ) and market price for restricted stock units , and is recognized as expense over the employee 's requisite service period . as of april 1 , 2017 , total remaining unearned compensation cost related to unvested restricted stock units and options was $ 70.5 million , which will be amortized over the weighted-average remaining service period of approximately 1.2 years . 40 story_separator_special_tag style= `` font-family : inherit ; font-size:10pt ; `` > 2016 . this year-over-year increase was due primarily to improvement in working capital , partially offset by lower adjustments for non-cash items . the adjustments for non-cash items were lower due primarily to

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources cash generated by operations is our primary source of liquidity . as of april 1 , 2017 , we had working capital of approximately $ 1,042.8 million , including $ 545.5 million in cash and cash equivalents , compared to working capital of $ 1,135.4 million , including $ 425.9 million in cash and cash equivalents , as of april 2 , 2016 . our $ 545.5 million of total cash and cash equivalents as of april 1 , 2017 includes approximately $ 318.7 million held by our foreign subsidiaries . if the undistributed earnings of our foreign subsidiaries are needed in the u.s. , we may be required to accrue and pay u.s. taxes to repatriate . our current plans are to permanently reinvest the undistributed earnings of our foreign subsidiaries . stock repurchase on february 5 , 2015 , our board of directors authorized the repurchase of up to $ 200.0 million of our outstanding common stock from time to time on the open market or in privately negotiated transactions . on august 11 , 2015 , we announced completion of this program . on august 11 , 2015 , our board of directors authorized the repurchase of up to $ 400.0 million of our outstanding common stock from time to time on the open market or in privatelynegotiated transactions .

reimbursable expenses consist of amounts we incur on behalf of our customers in performing our fee-based services , but we pass such costs directly on to our customers without any additional markup . non-controlling interests represent the earnings of lenders one , a consolidated entity not owned by altisource and are included in revenue and reduced from net income to arrive at net income attributable to altisource . we have prepared our consolidated financial statements in accordance with accounting principles generally accepted in the united states of america ( “gaap” ) . altisource 's vision and growth initiatives since our separation from ocwen , altisource has become a company providing a full suite of mortgage , real estate and consumer debt services , leveraging our technology and global operations . our relationship with ocwen provided a foundation on which we built our business and remains an important priority for us . altisource 's vision has evolved to become the premier provider of real estate and mortgage marketplaces offering both distribution and content . within these industries , we are facilitating transactions related to home sales , home rentals , home maintenance , mortgage origination and mortgage servicing . the equator acquisition , with its marketplace , real estate and servicing transaction solutions , is in line with this vision and accelerates our evolution and growth . we believe there are significant growth opportunities for altisource in the real estate and mortgage markets , leveraging our distribution and transaction solutions . our strategic growth initiatives are : real estate market : · supporting ocwen 's growth · deploying hubzu to other institutions and the non-distressed home sales market 24 · providing property management , lease management and renovation management services to the single family rental market mortgage market : · maintaining and growing our services provided to ocwen as it continues to grow its residential loan servicing portfolio · growing our origination related services by providing services to the members of lenders one and ocwen 's origination platform · developing our next generation realservicing technology distribution and transaction solutions : · developing our next generation vendor , invoice and document management technologies through realtrans , realremit and realdoc stock repurchase plan in may 2012 , our shareholders approved a new stock repurchase program , which replaced the previous stock repurchase program . under the program , we are authorized to purchase up to 3.5 million shares of our common stock in the open market in addition to amounts previously purchased under the prior program . from authorization of the previous program in may 2010 through december 31 , 2013 , we have purchased approximately 3.7 million shares of our common stock in the open market at an average price of $ 63.04 per share . we purchased 1.2 million shares of common stock at an average price of $ 116.99 per share during the year ended december 31 , 2013 and 0.3 million shares at an average price of $ 63.25 per share during the year ended december 31 , 2012. as of december 31 , 2013 , approximately 2.3 million shares of common stock remain available for repurchase under the program . luxembourg law limits share repurchases to approximately the balance of altisource portfolio solutions s.a. ( unconsolidated parent company ) retained earnings , less shares repurchased . as of december 31 , 2013 , approximately $ 14 million was available to repurchase our common stock under luxembourg law . our senior secured term loan also limits the amount we can spend on share repurchases in any year and may prevent repurchases in certain circumstances . as of december 31 , 2013 , approximately $ 55 million was available to repurchase our common stock under our senior secured term loan . separation of residential asset businesses on december 21 , 2012 , we completed the capitalization and distribution of residential and aamc to our shareholders . see “ separation of the residential asset businesses ” in item 1 of part i , “ business . ” on december 24 , 2012 , the shares of residential and aamc were distributed to our shareholders of record as of december 17 , 2012 , in the form of a taxable pro rata stock distribution . our shareholders received a pro rata distribution of : · one share of residential common stock for every three shares of altisource common stock held ; · one share of aamc common stock for every 10 shares of altisource common stock held and · cash in lieu of fractional residential and aamc shares . residential is focused on acquiring and managing single family rental properties by acquiring portfolios of sub-performing and non-performing residential mortgage loans throughout the united states . aamc provides asset management and certain corporate governance services to residential . we are providing property management , lease management and renovation management services to residential . prior to the separation , we capitalized residential with $ 100 million of cash and aamc with $ 5 million of cash . we eliminated the assets and liabilities of residential and aamc from our consolidated balance sheet effective at the close of business on december 21 , 2012. as residential and aamc were development stage companies and had not yet commenced operations at the time of separation , these entities had no historical results of operations . we do not expect any negative impact on our future operations other than interest expense on the debt we borrowed in november 2012 to capitalize these entities . story_separator_special_tag in 2012 , we incurred higher professional services costs primarily as a result of the separation of the residential asset businesses . income from operations as a percentage of service revenue was 36 % , 40 % and 42 % for the years ended december 31 , 2013 , 2012 and 2011 , respectively . income from operations as a percentage of service revenue declined in 2013 as a result of lower gross margins and higher amortization expense from the 2013 homeward and rescap fee-based business acquisitions . in 2012 , income from operations as a percentage of service revenue declined as gross margins declined and sg & a grew at a higher pace than service revenue due to the 2012 costs associated with the separation of the residential asset businesses . financial services revenue revenue by service line was as follows for the years ended december 31 : replace_table_token_15_th n/m — not meaningful . we recognized service revenue of $ 92.5 million for the year ended december 31 , 2013 , a 45 % increase compared to the year ended december 31 , 2012 primarily due to increased charge-off mortgage collections and growth in customer relationship management revenues from the addition of two new clients during 2013 and expansion of services provided to existing clients . the increases were partially offset by lower credit card charge-off placements 33 from the continuing record low credit card delinquency rates . with respect to the charge-off mortgage business , we expanded our capabilities in connection with the rescap fee-based business transaction , and in the second quarter of 2013 , we began providing these services to the rescap loans serviced by ocwen and a greater portion of the other loans in the ocwen portfolio . we recognized service revenue of $ 64.0 million for the year ended december 31 , 2012 , an 8 % decrease compared to the year ended december 31 , 2011 due to a decline in service revenue from asset recovery management services . the decline was primarily due to the shift of existing services for one of the segment 's largest customers to a lower cost geography with corresponding lower fees from our customer for these services and a decline in total placements as a result of lower credit card delinquencies . partially offsetting this decline , service revenue in customer relationship management increased over the same periods . our global delivery platform consists of highly trained specialists in various geographic regions . the use of specialists in certain countries may result in lower commission rates paid by clients but results in higher margins principally due to the lower employee cost structure . certain of our financial services businesses are impacted by seasonality . asset recovery management revenue tends to be higher in the first quarter of each year as borrowers utilize tax refunds and bonuses to pay debts . cost of revenue and gross profit cost of revenue consists of the following for the years ended december 31 : replace_table_token_16_th n/m — not meaningful . cost of revenue for the year ended december 31 , 2013 of $ 55.3 million increased by 18 % compared to the year ended december 31 , 2012 , driven primarily by higher mortgage charge-off and customer relationship management employees in connection with new business . these increases were partially offset by lower outside fees and services . cost of revenue for the year ended december 31 , 2012 of $ 46.7 million decreased by 9 % compared to the year ended december 31 , 2011 , driven primarily by lower outside fees and services due to the reduction in account placements . in july 2011 , we purchased the assembled workforce of a sub-contractor in india that performs asset recovery services . for periods prior to the acquisition , the costs paid to the sub-contractor were included in outside fees and services . subsequent to the acquisition , these costs have been recorded according to the nature of the expenses and are included in compensation and benefits and technology and telecommunications expenses ( included in cost of revenue ) or occupancy related costs and other ( included in sg & a ) . gross profit as a percentage of service revenue was 41 % , 28 % and 29 % for the years ended december 31 , 2013 , 2012 and 2011 , respectively . in 2013 , gross profit as a percentage of service revenue increased due to growth of higher margin mortgage charge-off and customer relationship management services . in 2012 , gross profit as a percentage of service revenue remained flat compared to 2011 as we actively worked to manage our cost structure in that period of declining revenue . we principally managed our cost structure through a reduction in compensation and benefit costs both through a reduction in overall headcount as well as expanding our use of our global workforce . 34 selling , general and administrative expenses and income from operations we recognized sg & a of $ 15.6 million , $ 13.4 million and $ 15.6 million for the years ended december 31 , 2013 , 2012 and 2011 , respectively . sg & a increased in 2013 principally from a $ 3.8 million increase in amortization expense from the acquisition of the rescap fee-based businesses . in 2012 , sg & a expenses decreased principally from lower costs as a result of shifting work in our global delivery platform and from lower depreciation and amortization expense related to assets no longer utilized by financial services . income from operations as a percentage of service revenue was 24 % , 7 % and 6 % for the years ended december 31 , 2013 , 2012 and 2011 , respectively . income from operations as a percentage of service revenue increased in 2013 due to higher gross margins and slower sg & a growth , despite the increase in amortization expense from the acquisition of

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows from investing activities on march 29 , 2013 , we acquired the homeward fee-based business from ocwen for $ 75.8 million , after a working capital and net income adjustment . on april 12 , 2013 , we entered into an agreement with ocwen to establish additional terms related to the existing servicing arrangements between altisource and ocwen in connection with ocwen 's acquisition of certain mortgage servicing platform assets of rescap . the cash consideration paid by altisource to ocwen under the rescap agreement totaled $ 128.8 million . on november 15 , 2013 , we acquired equator for initial consideration of $ 63.4 million and up to $ 80 million in potential additional consideration ( the “earn out” ) . on february 15 , 2013 , ocwen repaid the $ 75.0 million loan that was borrowed from us in december 2012. capital expenditures for the years ended december 31 , 2013 , 2012 and 2011 were $ 34.1 million , $ 35.6 million and $ 16.4 million , respectively . capital expenditures in 2013 , 2012 and 2011 primarily related to facility build-outs and investments in infrastructure and the next generation of our realsuite software applications . capital expenditures in 2012 also included investments in a disaster recovery center that continued , to a lesser degree , in 2013. on march 31 , 2013 , we sold our 49 % interest in correspondent one s.a. ( “correspondent one” ) to ocwen for $ 12.6 million . during 2011 , we invested $ 15.0 million in correspondent one . cash flows from financing activities cash flows from financing activities for the year ended december 31 , 2013 primarily included activity associated with debt proceeds , debt issuance costs , share repurchases , stock option exercises and payments to non-controlling interests .

our gabriel collaboration suite is a set of applications that run on top of our gabriel secure communication platform . it enables seamless and secure cross-platform communications between user 's devices that have our software installed . our gabriel collaboration suite is available for download and free trial , for android , ios , windows , linux and mac os x platforms , at http : //www.gabrielsecure.com/ . we continue to enhance our products and add new functionality to our products . we will provide updates to new and existing customers as they are released to the general public . we have signed patent license agreements with avaya inc. , aastra usa , inc. , microsoft , mitel networks corporation , nec corporation and nec corporation of america , siemens enterprise communications gmbh & co. kg , and siemens enterprise communications inc. to license certain of our patents , for a one-time payment and or an ongoing royalty for all future sales through the expiration of the licensed patents with respect to certain current 29 and future ip-encrypted products . we have engaged ipvalue management inc. to assist us in commercializing our portfolio of patents on securing real-time communications over the internet . under the multi-year agreement , ipvalue will originate and assist us with negotiating transactions related to patent licensing worldwide with respect to certain third parties . our employees include the core development team behind our patent portfolio , technology and software . this team has worked together for over ten years and is the same team that invented and developed this technology while working at leidos , is a fortune 500® scientific , engineering and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world , in national security , energy and the environment , critical infrastructure and health . the team has continued its research and development work started at leidos , and expanded the set of patents we acquired in 2006 from leidos , into a larger portfolio with over 100 u.s. and international patents with over 50 pending applications . this portfolio now serves as the foundation of our licensing business and planned service offerings and is expected to generate the majority of our future revenue in license fees and royalties . we intend to continue our research and development efforts to further strengthen and expand our patent portfolio . see – operations – research and development expenses for a description of our research and development expenses for the past three fiscal years discussed below . we continue using an outsourced and leveraged model to maintain efficiency and manage costs as we grow our licensing business by , for example , offering incentives to early licensing targets or asserting our rights for use of our patents . we also intend to expand our design pilot in participation with leading 4g/lte companies ( domain infrastructure providers , chipset manufacturers , service providers , and others ) and build our secure domain name registry . developments in the year ended december 31 , 2016 litigation we have nine intellectual property infringement lawsuits pending in the united states district court for the eastern district of texas , tyler division , and united states court of appeals for the federal circuit ( “uscafc” ) . virnetx inc. v. apple , inc. ( case 6:12-cv-00855-led ) on march 30 , 2015 , the united states court for the eastern district of texas , tyler division , issued an order finding substantial overlap between the remanded portions of the civil action case 6:10-cv-00417-led ( virnetx vs. cisco et . al . ) , and the ongoing civil action case 6:12-cv-00855-led ( virnetx inc. v. apple , inc. ) . the court consolidated the two civil actions under civil action case 6:12-cv-00855-led ( virnetx inc. v. apple , inc. ) and designated it as the lead case . the jury trial in this case was held on january 25 , 2016. on february 4 , 2016 , a jury in the united states court for the eastern district of texas , tyler division , awarded us $ 625.6 million in a verdict against apple inc. for infringing four of our us patents , marking it the second time a federal jury has found apple liable for infringing virnetx 's patented technology . the verdict includes royalties awarded to us based on an earlier patent infringement finding ( case 6:10-cv-00417-led ) against apple . the jury found that apple 's modified vpn on-demand , imessage and facetime services infringed virnetx 's patents and that apple 's infringement was willful . in addition to determining the royalty owed by apple for its prior infringement , this verdict also includes an award based on the jury 's finding that apple 's modified vpn on demand , imessage and facetime services have continued to infringe virnetx 's patents . the post-trial hearing was held on may 25 , 2016 in the united states court for the eastern district of texas , texarkana division . on july 29 , 2016 , the court issued a new order , vacating its previous orders consolidating the cases ( case no . 6:10-cv-417 , docket no . 878 ( “apple i case” ) ; case no . 6:12-cv-855 , docket no . 220 ( “apple ii case” ) ) , ordering that the two cases be retried separately , and setting the retrial date for apple i case with jury selection to begin on september 26 , 2016. the court also ordered that the issue of willfulness in both cases is bifurcated and that the apple ii case will be retried after apple i case . events and developments subsequent to the order from the court are described to support apple i and apple ii matters . virnetx inc. v. cisco systems , inc. et al . story_separator_special_tag 33 critical accounting policies the preparation of financial statements in conformity with accounting principles generally accepted in the united states requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period . the critical accounting policies we employ in the preparation of our consolidated financial statements are those which involve impairment of long-lived assets , income taxes , fair value of financial instruments and stock-based compensation . basis of consolidation the consolidated financial statements include the accounts of virnetx holding corporation and our wholly-owned subsidiaries . all intercompany balances and transactions have been eliminated . use of estimates the preparation of consolidated financial statements in conformity with u.s. gaap requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes . actual results could differ materially from these estimates . on an ongoing basis , we evaluate our estimates , including those related to the fair values of financial instruments , fair values of stock-based awards , income taxes , and derivative liabilities , among others . we base our estimates on historical experience and on various other assumptions that are believed to be reasonable , the results of which form the basis for making judgments about the carrying values of assets and liabilities . revenue recognition we derive our revenue from patent licensing . the timing and amount of revenue recognized from each licensee depends upon a variety of factors , including the specific terms of each agreement and the nature of the deliverables and obligations . such agreements may be complex and include multiple elements . these agreements may include , without limitation , elements related to the settlement of past patent infringement liabilities , up-front and non-refundable license fees for the use of patents , patent licensing royalties on covered products sold by licensees , and the compensation structure and ownership of intellectual property rights associated with contractual technology development arrangements . licensing agreements are accounted for under the financial accounting standards board ( “fasb” ) revenue recognition guidance , “revenue arrangements with multiple deliverables.” this guidance requires consideration to be allocated to each element of an agreement that has stand-alone value using the relative fair value method . in other circumstances , such as those agreements involving consideration for past and expected future patent royalty obligations , after consideration of the particular facts and circumstances , the appropriate recording of revenue between periods may require the use of judgment . in all cases , revenue is only recognized after all the following criteria are met : ( 1 ) written agreements have been executed ; ( 2 ) delivery of technology or intellectual property rights has occurred or services have been rendered ; ( 3 ) fees are fixed or determinable ; and ( 4 ) collectability of fees is reasonably assured . patent license agreements : upon signing a patent license agreement , including licenses entered upon settlement of litigation , we provide the licensee permission to use our patented technology in specific applications . we account for patent license agreements in accordance with the guidance for revenue recognition for arrangements with multiple deliverables , with amounts allocated to each element based on their fair values . we have elected to utilize the leased-based model for revenue recognition with revenue being recognized over the expected period of benefit to the licensee . under our patent license agreements , we do or expect to typically receive one or a combination of the following forms of payment as consideration for permitting our licensees to use our patented inventions in specific applications and products : consideration for past sales : consideration related to a licensee 's product sales from prior periods may result from a negotiated agreement with a licensee that utilized our patented technology prior to signing a patent license agreement with us or from the resolution of a litigation , disagreement or arbitration with a licensee over the specific terms of an existing license agreement . we may also receive royalty for past sales in connection with the settlement of patent litigation where there was no prior patent license agreement . these amounts are negotiated , typically based upon application of a royalty rate to historical sales prior to the execution of the license agreement . in each of these cases , because delivery has occurred , we record the consideration as revenue when we have obtained a signed agreement , identified a fixed or determinable price , and determined that collectability is reasonably assured . 34 current royalty payments : ongoing royalty payments cover a licensee 's obligations to us related to its sales of covered products in the current contractual reporting period . licensees that owe these current royalty payments are obligated to provide us with quarterly or semi-annual royalty reports that summarize their sales of covered products and their related royalty obligations to us . we expect to receive these royalty reports subsequent to the period in which our licensees ' underlying sales occurred . as a result , it is impractical for us to recognize revenue in the period in which the underlying sales occur , and , in most cases , we will recognize revenue in the period in which the royalty report is received and other revenue recognition criteria are met due to the fact that without royalty reports from our licensees , our visibility into our licensees ' sales is limited . non-refundable up-front fees and minimum fee contracts : for licenses that provide for non-refundable up-front or fixed minimum fees over their term , for which we have no future obligations or performance requirements , revenue is generally recognized over the license term . for licenses that provide for fees that are not fixed or determinable

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources for the year ended december 31 , 2016 , our cash and cash equivalents totaled $ 6,627 and our short-term investments totaled $ 9,249 compared to $ 8,726 and $ 9,954 , respectively , for the year ended december 31 , 2015. we expect that our cash and cash equivalents and short-term investments as of december 31 , 2016 will be sufficient to fund our current operations and provide working capital for general corporate purposes and legal expenses for the foreseeable future . we may undertake additional opportunities to seek to grow our business and as a result , we may seek to raise capital in some form within the next twelve months including the actions described below under “universal shelf registration and atm offering” . over the long term , we expect to derive the majority of our revenue from license fees and royalties associated with our patent portfolio , technology , software and secure domain name registry in the united states and other markets around the world . universal shelf registration and atm offering in august 2015 , we filed a universal shelf registration statement with the sec enabling us to offer and sell from time to time up to $ 100 million of equity , debt or other types of securities .

we received net proceeds of approximately $ 163.0 million from the ipo , after deducting underwriters ' discounts and commissions of $ 12.6 million and offering costs of $ 3.7 million . prior to our ipo , our primary sources of capital were private placements of preferred stock , debt financing arrangements and revenue from sales of our products . since inception , we had raised a total of approximately $ 54.2 million in net proceeds from private placements of preferred stock . as of december 31 , 2020 , we had cash and cash 97 equivalents and short-term investments of $ 16 4.2 million , no long-term debt outstanding and an accumulated deficit of $ 2 7.4 million . for the year ended december 31 , 2020 , we generated revenue of $ 139.7 million , with a gross margin of 90.6 % and net income of $ 13.8 million , compared to revenue of $ 51.1 million , with a gross margin of 88.4 % and net loss of $ 1.2 million for the year ended december 31 , 2019. covid-19 in december 2019 , a novel strain of coronavirus , sars-cov-2 , was identified in wuhan , china . since then , sars-cov-2 , and the resulting disease , covid-19 , has spread to most countries , including all 50 states in the united states . in response to the pandemic , numerous state and local jurisdictions imposed and may continue to impose from time to time “ shelter-in-place ” orders , quarantines , executive orders and similar government orders and restrictions for their residents to control the spread of covid-19 . for example , in the united states , governmental authorities recommended , and in certain cases required , that elective , specialty and other procedures and appointments be suspended or canceled to avoid non-essential patient exposure to medical environments and potential infection with covid-19 and to focus limited resources and personnel capacity toward the treatment of covid-19 patients . similarly , in march 2020 , the governor of california , where our headquarters are located , issued a “ stay at home ” order limiting non-essential activities , travel and business operations . in december 2020 , the governor of california issued an additional regional “ stay at home ” order with tiered restrictions based on each region 's icu availability . such orders or restrictions resulted in reduced operations at our headquarters ( including our manufacturing facility ) , work stoppages , slowdowns and delays , travel restrictions and cancellation of events . taken as a whole , these orders and restrictions significantly decreased the number of procedures performed using our products , particularly during the second quarter of 2020 , and otherwise negatively impacted our operations , including new customer procurement and onboarding . in response to the impact of covid-19 , beginning in the second quarter of 2020 , we implemented a variety of measures to help us manage through its impact and position us to resume operations quickly and efficiently once these restrictions were lifted . these measures existed across several operational areas and included : continuing to build our team , including identifying and recruiting our next group of new sales representatives ; enhancing our physician outreach and training with the launch of our clot warrior academy consisting of a series of live webinars and an online education portal ; continuing to support procedures using our products both in-person and virtually ; adapting , expanding and improving our sales training programs and customer engagement to address the current environment ; continuing to expand our engineering infrastructure and focusing on organic opportunities ; producing approximately four months ' worth of inventory before temporarily suspending production in april 2020 ; continuing to protect and support our employees , including no layoffs , furloughs or compensation reductions to date ; executing a successful work-from-home strategy for administrative functions that includes launching various efficiency projects in information technology , accounting and operations ; monitoring and reviewing recent case studies of vte patients suffering from covid-19 ; initiating market assessment and commercial entry planning for our international expansion ; and accessing the remaining $ 10.0 million on our term loan on march 23 , 2020 , which was repaid in full along with all our long term-debt in august 2020. despite the negative impacts from covid-19 , for the year ended december 31 , 2020 , we completed our ipo and approximately 13,200 procedures were performed using our products , compared to approximately 4,600 98 procedures in the year ended december 31 , 2019 . during the second quarter of 2020 , we experienced disruptions to our procedure volume beginning in mid-march as a result of covid-19 , and weekly procedure volumes declined by approximately 40 % by mid-april when compared to weekly procedure volumes in early march . the decrease in procedure volume impacted dvt procedures and pe procedures relatively equally , with both types of procedures declining during this period . however , w e saw a recovery in procedure volume in june that was higher than our pre - covid-19 peak . during the third and fourth quarter s , we saw continued sequential growth beyond previous quarters . while we are encouraged by our third and fourth quarters results , we are aware that the actual and perceived impact of covid-19 is changing and can not be predicted . as a result , we can not assure you that our recent procedure volumes are indicative of future results or that we will not experience additional negative impacts associated with covid-19 , which could be significant . the covid-19 pandemic has negatively impacted our business , financial condition and results of operations by significantly decreasing and delaying the number of procedures performed using our products , and we expect the pandemic could continue to negatively impact our business , financial condition and results of operations . story_separator_special_tag from the exercise of stock options . net cash provided by financing activities for the year ended december 31 , 2018 of $ 26.8 million primarily relates to net proceeds of $ 26.9 million from the issuance of our series c convertible preferred stock and $ 0.2 million of debt financing costs . off-balance sheet arrangements we do not have any off-balance sheet arrangements , as defined by applicable regulations of the u.s. securities and exchange commission , that are reasonably likely to have a current or future material effect on our financial condition , results of operations , liquidity , capital expenditures or capital resources . contractual obligations and commitments the following table shows our contractual obligations due by period as of december 31 , 2020 : replace_table_token_12_th 106 critical accounting policies and estimates management 's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements , which have been prepared in accordance with u.s. gaap . the preparation of these consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets , liabilities , revenue , expenses and related disclosures . our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances , the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions and any such differences may be material . while our significant accounting policies are more fully described in the note 2 to our audited consolidated financial statements appearing elsewhere in this annual report on form 10-k , we believe the following discussion addresses our most critical accounting policies , which are those that are most important to our financial condition and results of operations and require our most difficult , subjective and complex judgments . revenue recognition on january 1 , 2019 , we adopted accounting standards codification ( “ asc ” ) 606 , revenue from contracts with customers , using the modified retrospective method applied to contracts which were not completed as of that date . revenue for reporting periods beginning after january 1 , 2019 are presented under asc 606 , while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under asc 605 , revenue recognition . under asc 606 , revenue is recognized when a customer obtains control of promised goods or services , in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services . to determine whether revenue recognition for arrangements is within the scope of asc 606 , we perform the following five steps : ( i ) identify the contract ( s ) with a customer ; ( ii ) identify the performance obligations in the contract ; ( iii ) determine the transaction price ; ( iv ) allocate the transaction price to the performance obligations in the contract ; and ( v ) recognize revenue when ( or as ) the entity satisfies a performance obligation . product sales of the flowtriever and clottriever systems are made to hospitals in the united states utilizing our direct sales force . revenue is comprised of product revenue net of returns , administration fees and sales rebates . performance obligation —we have revenue arrangements that consist of a single performance obligation , delivery of our products . the satisfaction of this performance obligation occurs with the transfer of control of our product to our customers , either upon shipment or delivery of the product . revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods . the amount of revenue that is recognized is based on the transaction price , which represents the invoiced amount and includes estimates of variable consideration such as rebate and administrative fees , where applicable . we provide a 30-day unconditional right of return period . we establish estimated provisions for returns at the time of sale based on historical experience . historically , the actual product returns have been immaterial to our consolidated financial statements . assuming all other revenue recognition criteria have been met , we recognize revenue for arrangements where the company has satisfied its performance obligation of delivering the product . for sales where our sales representatives hand deliver products directly to the hospital , control of the products transfers to the customer upon such hand delivery . for sales where products are shipped , control of the products transfers either upon shipment or delivery of the products to the customer , depending on the shipping terms and conditions . as of december 31 , 2020 and 2019 , we recorded $ 498,000 and $ 330,000 , respectively , of unbilled receivables , which are included in accounts receivable , net , in the accompanying consolidated balance sheets . 107 revenue for clottriever and flowtriever products as a percentage of total revenue was derived as follow : replace_table_token_13_th we offer payment terms to our customers of less than three months and these terms do not include a significant financing component . we exclude taxes assessed by governmental authorities on revenue-producing transactions from the measurement of the transaction price . we offer a standard warranty to all customers . we do not sell any warranties on a standalone basis . our warranty provides that its products are free of material defects and conform to specifications , and we offer to repair , replace or refund the purchase price of defective products . this assurance does not constitute a service and is not considered a separate performance obligation . we estimate warranty liabilities at the time of revenue recognition and record it as a charge to cost of goods sold . costs associated with

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources to date , our primary sources of capital have been the net proceeds we received through private placements of preferred stock , debt financing agreements , the sale of common stock in our ipo , and revenue from the sale of our products . on may 27 , 2020 , we completed our ipo , including the underwriters full exercise of their over-allotment option , selling 9,432,949 shares of our common stock at $ 19.00 per share . upon completion of our ipo , we received net proceeds of approximately $ 163.0 million , after deducting underwriting discounts and commissions and offering expenses . in august 2020 , we repaid in full the $ 30.0 million of principal owed under the credit facility with signature bank . as of december 31 , 2020 , we had cash and cash equivalents of $ 114 million , short-term investments of $ 50.0 million , and an accumulated deficit of $ 27.4 million . in september 2020 , we entered into a new revolving credit agreement with bank of america which provides for loans up to a maximum of $ 30 million . as of december 31 , 2020 , we had no principal outstanding under the credit agreement and the amount available to borrow was approximately $ 28.5 million . based on our current planned operations , we expect that our cash and cash equivalents and available borrowings will enable us to fund our operating expenses for at least 12 months from the date hereof . if our available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements including because of lower demand for our products as a result of the risks described in this annual report , we may seek to sell additional common or preferred equity or convertible debt securities , enter into an additional credit facility or another form of third-party funding or seek other debt financing .

in the core vonage branded business , we continued to allocate marketing investments from mass-reach vehicles like television to more ethnically-targeted and cost-efficient , in-person selling channels . these initiatives combined to offset the existing weakening in our premium domestic service , which reflects broad market trends . as a result , for 2013 , we delivered positive net line additions for the first time since 2008. we grew the penetration rate of our mobile extension service , which extends our home phone product to mobile phones , and we improved our standalone mobile app with quality and feature enhancements , including video calling and video voicemail . early in 2013 we announced a joint venture to launch service in brazil and we expect to enter this market with a phased launch in the second quarter of 2014. in late 2013 we acquired vocalocity , a leading provider of hosted voip services to small and medium businesses . recent developments acquisition of vocalocity . pursuant to the agreement and plan of merger ( the “ merger agreement ” ) dated october 9 , 2013 , by and among vocalocity inc. ( `` vocalocity `` ) , vista merger corp. , a delaware corporation and newly formed wholly-owned subsidiary of vonage ( “ merger sub ” ) , vonage and shareholder representative services , llc ( acting solely in its capacity as the representative , the “ representative ” ) . pursuant to the merger agreement , on november 15 , 2013 , merger sub merged with and into vocalocity , and vocalocity became a wholly-owned subsidiary of vonage ( the “ merger ” ) . vocalocity was acquired for $ 130,000 adjusted for $ 2,869 of excess cash as of the closing date and the increase in value of the 7,983 shares of vonage common stock from the signing date to the closing date of $ 1,298 , resulting in a total acquisition cost was $ 134,167 . we financed the transaction through $ 32,981 of cash and $ 75,000 from our credit facility . the acquisition of vocalocity immediately positions vonage as a leader in the smb hosted voip market . smb and soho services will be offered under the vonage business solutions brand . joint venture in brazil . we continue to make progress building the foundation to deliver voip services through our joint venture in brazil . the joint venture has completed network testing , finalized plans to host its billing platform , built out its management team , is currently performing integrated production testing , and has established and trained customer care centers . we are also implementing a change to the ownership structure of our joint venture . in late 2013 , our partner was unable to meet its capital call obligations resulting in the delivery of a notice to our partner in early 2014 that we would be exercising our dilution rights . as a result , our ownership level in the joint venture is expected to increase to more than 90 % . our joint venture partner continues to contribute to implementation steps and progress building the foundation to deliver voip services . we do not expect these funding issues to increase risk to our planned market entry in the second quarter of 2014. trends in our industry and key operating data a number of trends in our industry have a significant effect on our results of operations and are important to an understanding of our financial statements . competitive landscape . we face intense competition from traditional telephone companies , wireless companies , cable companies , and alternative voice communication providers . most traditional wireline and wireless telephone service providers and cable companies are substantially larger and better capitalized than we are 27 vonage annual report 2013 and have the advantage of a large existing customer base . in addition , because our competitors provide other services , they often choose to offer voip services or other voice services as part of a bundle that includes other products , such as internet access , cable television , and home telephone service , with an implied price for telephone service that may be significantly below ours . in addition , such competitors may in the future require new customers or existing customers making changes to their service to purchase voice services when purchasing high speed internet access . further , as wireless providers offer more minutes at lower prices , better coverage , and companion landline alternative services , their services have become more attractive to households as a replacement for wireline service . we also compete against alternative voice communication providers , such as magicjack , skype , and google voice . some of these service providers have chosen to sacrifice telephony revenue in order to gain market share and have offered their services at low prices or for free . as we continue to introduce applications that integrate different forms of voice and messaging services over multiple devices , we are facing competition from emerging competitors focused on similar integration , as well as from alternative voice communication providers . in addition , our competitors have partnered and may in the future partner with other competitors to offer products and services , leveraging their collective competitive positions . we also are subject to the risk of future disruptive technologies . in connection with our emphasis on the international long distance market , we face competition from low-cost international calling cards and voip providers in addition to traditional telephone companies , cable companies , and wireless companies . in connection with our vonage business solutions smb and soho markets , we face competition from the traditional telephone and cable companies discussed above , as well as from smb communications providers such as 8x8 , ring central , and other companies . broadband adoption . the number of united states households with broadband internet access has grown significantly . story_separator_special_tag > the cost of co-locating our regional data connection point equipment in third-party facilities owned by other telephone companies , internet service providers or collocation facility providers . > the cost of providing local number portability , which allows customers to move their existing telephone numbers from another provider to our service . only regulated telecommunications providers have access to the centralized number databases that facilitate this process . because we are not a regulated telecommunications provider , we must pay other telecommunications providers to process our local number portability requests . > the cost of complying with the fcc regulations regarding voip emergency services , which require us to provide enhanced emergency dialing capabilities to transmit 911 calls for all of our customers . > taxes that we pay on our purchase of telecommunications services from our suppliers or imposed by government agencies such as federal usf and related fees . > license fees for use of third party intellectual property . direct cost of goods sold . direct cost of goods sold primarily consists of costs that we incur when a customer first subscribes to our service . these costs include : > the cost of the equipment that we provide to customers who subscribe to our service through our direct sales channel in excess of activation fees when an activation fee is collected . the remaining cost of customer equipment is deferred up to the activation fee collected and amortized over the estimated average customer life . > the cost of the equipment that we sell directly to retailers . > the cost of shipping and handling for customer equipment , together with the installation manual , that we ship to customers . > the cost of certain products or services that we give customers as promotions . selling , general and administrative expense . selling , general and administrative expense includes : > compensation and benefit costs for all employees , which is the largest component of selling , general and administrative expense and includes customer care , research and development , network engineering and operations , sales and marketing , executive , legal , finance , and human resources personnel . > share-based expense related to share-based awards to employees , directors , and consultants . > outsourced labor related to customer care , kiosk and community based events teams , and retail in-store support activities . > product awareness advertising . > transaction fees paid to credit card , debit card , and ecp companies and other third party billers such as itunes , which may include a per transaction charge in addition to a percent of billings charge . > rent and related expenses . > professional fees for legal , accounting , tax , public relations , lobbying , and development activities . > acquisition related transaction and integration costs . > litigation settlements . marketing expense . marketing expense consists of : > advertising costs , which comprise a majority of our marketing expense and include online , television , direct mail , alternative media , promotions , sponsorships , and inbound and outbound telemarketing . > creative and production costs . > the costs to serve and track our online advertising . > certain amounts we pay to retailers for activation commissions . > the cost associated with our customer referral program . depreciation and amortization expenses . depreciation and amortization expenses include : > depreciation of our network equipment , furniture and fixtures , and employee computer equipment . > amortization of leasehold improvements and purchased and developed software . > amortization of intangible assets ( developed technology , customer relationships , non-compete agreements , patents , trademarks and trade names ) . > loss on disposal or impairment of property and equipment . loss from abandonment of software assets . loss from abandonment of software assets include : > impairment of investment in software assets . 30 vonage annual report 2013 other income ( expense ) other income ( expense ) consists of : > interest income on cash and cash equivalents . > interest expense on notes payable , patent litigation judgments and settlements , and capital leases . > amortization of debt related costs . > accretion of notes . > realized and unrealized gains ( losses ) on foreign currency . > gain ( loss ) on extinguishment of notes . > change in fair value of stock warrant . results of operation the following table sets forth , as a percentage of consolidated operating revenues , our consolidated statement of income for the periods indicated : replace_table_token_7_th 31 vonage annual report 2013 summary of results for the years ended december 31 , 2013 , 2012 , and 2011 replace_table_token_8_th ( 1 ) excludes depreciation and amortization of $ 14,892 , $ 15,115 , and $ 15,824 , respectively . 2013 compared to 2012 revenues . the decrease in revenues of $ 20,047 , or 2 % , was primarily driven by a decrease of $ 17,573 in monthly subscription fees resulting from rate plan mix , lower customer acquisitions on premium plans , prior year line losses , and retention activities partially offset by revenue from vocalocity since the acquisition that closed on november 15 , 2013. there was also a decrease in activation fees of $ 1,077 and a decrease in other revenue of $ 996 due to lower rates from our revenue sharing partners . there was an increase in credits issued to subscribers of $ 2,449 , a decrease in additional features revenue of $ 1,090 , and a decrease in international minutes of use revenue of $ 1,234. these decreases were offset by an increase in fees that we charged for disconnecting our service of $ 1,024 due to reinstatement of contracts for new customers beginning in february 2012 , and an increase in our regulatory fee revenue of $ 3,784 , which includes a decrease of $ 7,771 in

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash used in investing activities for 2013 of $ 120,985 was attributable to the acquisition of vocalocity of $ 100,057 , capital expenditures of $ 9,889 , and software acquisition and development of $ 12,291 , offset by a decrease in restricted cash of $ 1,252 due primarily to the return of part of the security deposit on our leased office property in holmdel , new jersey . cash used in investing activities for 2012 of $ 25,472 was attributable to capital expenditures of $ 13,763 and software acquisition and development of $ 12,987 , offset by a decrease in restricted cash of $ 1,278 due primarily to the return of part of the security deposit on our leased office property in holmdel , new jersey . cash used in investing activities for 2011 of $ 37,604 was attributable to capital expenditures of $ 12,636 , software acquisition and development of $ 22,292 , and purchase of intangible assets of $ 3,725 , offset by a decrease in restricted cash of $ 1,049 due primarily to the return of part of the security deposit on our leased office property in holmdel , new jersey . financing activities cash provided by financing activities for 2013 of $ 21,891 was primarily attributable to $ 75,000 borrowed under the 2013 revolving credit facility and $ 27,500 in proceeds from our 2013 credit facility , and $ 4,091 in net proceeds received from the exercise and cancellation of stock options partially offset by $ 23,334 in 2013 credit facility principal payments , $ 3,471 in capital lease and other liability payments , $ 56,294 in common stock repurchases , and $ 2,056 in 2013 credit facility debt related costs . cash used in financing activities for 2012 of $ 56,257 was primarily attributable to $ 28,333 in 2011 credit facility principal payments , $ 2,104 in capital lease payments , and $ 27,545 in common stock repurchases , offset by $ 1,725 in proceeds received from the exercise of stock options .

we also generate revenue from fees charged to both clients and freelancers for other services , such as for transacting payments through our work marketplace , premium offerings , purchases of connects , foreign currency exchange , and our upwork payroll offering . in addition , we provide a managed services offering where we engage freelancers to complete projects , directly invoice the client , and assume responsibility for work performed . on december 31 , 2019 , we adopted topic 606 effective as of january 1 , 2019 using the modified retrospective method . as a result , revenue results for the years ended december 31 , 2020 and 2019 are presented in accordance with this new revenue recognition standard while historical revenue results for reporting periods prior to 2019 are presented in conformity with amounts previously disclosed under the prior revenue recognition standard , topic 605. financial highlights for 2020 in march 2020 , the world health organization declared the outbreak of covid-19 to be a pandemic , which continues to spread throughout the united states and the world , and has resulted in governmental authorities implementing numerous measures to contain the virus , including travel bans and restrictions , shelter-in-place orders , and business limitations and shutdowns . the covid-19 pandemic and the resulting restrictions intended to prevent its spread have accelerated the secular shift toward remote and independent work , and , with our unique , remote-based business model , the covid-19 pandemic has not impacted our clients ' access to highly-skilled freelancers to complete short- and long-term projects on our work marketplace . in 2020 , we continued to identify opportunities to prioritize our advertising and marketing efforts in order to reach those new and existing clients seeking to engage with independent talent due to the covid-19 pandemic , as well as companies that have already embraced a remote work model . as a result of these efforts , our 2020 results were fueled by both existing and new clients , who used our work marketplace to address their changing business needs . we began to see the impact of the pandemic on our results at the end of the first quarter , when we experienced a temporary reduction in the growth rates of gsv and revenue . this trend continued into the beginning of the second quarter , driven by spend contraction by many of our clients , as the covid-19 pandemic continued to disrupt their businesses . these trends stabilized in the second half of the second quarter , and improved thereafter , contributing to an overall increase in the growth 55 rates of gsv and revenue in 2020. also , beginning in the second half of the second quarter of 2020 , we began to see an increase in client acquisition driven by the acceleration in the shift toward remote work , due in part to the covid-19 pandemic and the execution of our strategic initiatives . this increase in client acquisition continued to accelerate in the second half of 2020 and drove an increase in freelancer billings , which , in turn , drove an increase in marketplace revenue . as a result , our work marketplace enabled $ 2.5 billion of gsv in 2020 , $ 2.1 billion in 2019 , and $ 1.8 billion in 2018 , representing year-over-year increases of 21 % in 2020 and 19 % in 2019. we generated revenue of $ 373.6 million in 2020 , $ 300.6 million in 2019 , and $ 253.4 million in 2018 , representing year-over-year increases of 24 % in 2020 and 19 % in 2019. while we have not incurred significant disruptions to our business thus far from the covid-19 pandemic , at this time , we are unable to fully assess the aggregate impact it will have on our business due to various uncertainties , which include , but are not limited to , the duration of the pandemic , its effect on the economy , its impact to the businesses of our clients , actions that may be taken by governmental authorities related to the pandemic , and other factors identified in part i , item 1a “ risk factors ” in this annual report , including the risk factor titled “ our business experienced , and may again experience , an adverse impact from the ongoing covid-19 pandemic . in addition , users may reduce their use of our work marketplace following the covid-19 pandemic . ” additionally , while we have made significant investments to grow our business , including investments in sales and marketing to acquire new clients and drive brand awareness , in the fourth quarter of 2020 , we decided that it was no longer cost-effective for our sales team to sell our upwork business offering . we do not expect this decision to have a material impact on our marketplace revenue , as we will service those clients that we had previously targeted with our upwork business offering with our other marketplace offerings , such as upwork basic and plus . in 2020 , we also made significant investments in research and development to build new product features and launch new offerings and in operations and personnel , and we intend to continue to focus on these efforts . as a result , we generated a net loss of $ 22.9 million in 2020 compared to a net loss of $ 16.7 million in 2019. our adjusted ebitda was $ 14.0 million in 2020 , an increase of 89 % from 2019. adjusted ebitda is a financial measure that is not prepared in accordance with , and is not an alternative to , financial measures prepared in accordance with u.s. gaap . see the section titled “ selected consolidated financial data—non-gaap financial measures ” for a definition of adjusted ebitda and information regarding our use of adjusted ebitda and a reconciliation of net loss to adjusted ebitda . story_separator_special_tag marketplace revenue , which represents the majority of our total revenue , is primarily comprised of the service fees paid by freelancers as a percentage of the total amount that freelancers charge clients for services accessed through our work marketplace and , to a lesser extent , payment processing and administration fees paid by clients . in the fourth quarter of 2020 , we decided that it was no longer cost-effective for our sales team to sell our upwork business offering . we do not expect this decision to have a material impact on our marketplace revenue , as we will service those clients that we had previously targeted with our upwork business offering with our other marketplace offerings , such as upwork basic and plus . our upwork basic and plus offerings provide clients with access to freelancers with verified work history and client feedback on our work marketplace , the ability to instantly match with the right freelancers , and built-in collaboration features . for freelancers working with clients that are on our upwork basic and plus offerings , we have a tiered freelancer service fee schedule based on cumulative lifetime billings by the freelancer to each client . freelancers typically pay us 20 % of the first $ 500 , 10 % for the next $ 9,500 , and then 5 % for any amount over $ 10,000 they bill to each client through our work marketplace . we recognize revenue on sunday for the majority of our tiered freelancer service fees each week . to a lesser extent , we also generate revenue from freelancers through membership fees , purchases of connects , and withdrawal and other fees . in addition , we generate marketplace revenue from our upwork basic and plus offerings by charging clients a payment processing and administration fee . clients using our upwork basic offering pay a fee equal to 3 % of their client spend . we recognize revenue on monday for a substantial portion of our client fees each week . clients using our upwork plus offering pay a flat fee of approximately $ 50 per month for additional features and pay a fee equal to 3 % of their client spend unless they pay via ach ( in which case , provided all eligibility criteria are met , the fee is waived ) . to a lesser extent , we also generate revenue from clients through foreign currency exchange fees when clients choose to pay in currencies other than the u.s. dollar . our upwork enterprise and other premium offerings , which are designed for larger clients , include access to additional product features , premium access to top freelancers , professional services , custom reporting , and flexible payment terms . for our upwork enterprise offering , we charge clients a monthly or annual subscription fee and a service fee calculated as a percentage of the client 's spend on freelancer services , in addition to the service fees paid by freelancers . additionally , upwork enterprise clients can also subscribe to a compliance offering that includes worker classification services for an additional fee and may also choose to use our work marketplace to engage freelancers that were not originally sourced through our work marketplace for a lower fee percentage . one of our premium offerings , upwork payroll , is available to clients when freelancers are classified as employees for engagements on our work marketplace . the client enters into an upwork payroll agreement with us , and we separately contract 59 with unrelated third-party staffing providers that provide employment services to such clients . revenue from upwork payroll is currently immaterial . the covid-19 pandemic and the resulting restrictions intended to prevent its spread have accelerated the secular shift toward remote and independent work . in 2020 , we continued to identify opportunities to prioritize our advertising and marketing efforts in order to reach those new and existing clients seeking to engage with independent talent due to the covid-19 pandemic , as well as companies that have already embraced a remote work model . as a result of these efforts , coupled with our execution against strategic initiatives , our 2020 results were fueled by both existing and new clients , who used our work marketplace to address their changing business needs and drove an increase in freelancer billings , which , in turn , drove an increase in marketplace revenue . although the covid-19 pandemic did not have a material adverse impact on our financial results for the year ended december 31 , 2020 , we are continuously evaluating the nature of and extent to which the covid-19 pandemic will impact our business , operating results , and financial condition . managed services revenue . through our managed services offering , we are responsible for providing services and engaging freelancers directly or as employees of third-party staffing providers to perform services for clients on our behalf . the freelancers providing services in connection with our managed services include independent talent and agencies of varying sizes . under u.s. gaap , we are deemed to be the principal in these managed services arrangements and therefore recognize the entire gsv of managed services projects as managed services revenue , as compared to recognizing only the percentage of the client spend that we receive , as we do with our marketplace offerings . managed services revenue grew at a slower rate than our marketplace revenue in 2020 compared to 2019 , and we anticipate this trend to continue , as we primarily focus on increasing client usage of and spend on our marketplace offerings . cost of revenue and gross profit cost of revenue . cost of revenue consists primarily of the cost of payment processing fees , amounts paid to freelancers to deliver services for clients under our managed services offering , personnel-related costs for our services and support personnel , third-party hosting fees for our use

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows the following table summarizes our cash flows for the years ended december 31 , 2020 , 2019 , and 2018 ( in thousands ) : replace_table_token_22_th operating activities our largest source of cash from operating activities is revenue generated from our work marketplace . our primary uses of cash from operating activities are for personnel-related expenditures , marketing activities , including advertising , payment processing fees , amounts paid to freelancers to deliver services for clients under our managed services offering , and third-party hosting costs . in addition , because we are licensed as an internet escrow agent , our total cash and cash provided by operating activities may be impacted by the timing of the end of our fiscal quarter as discussed in the section titled “ —liquidity and capital resources—escrow funding requirements. ” net cash provided by operating activities during 2020 was $ 22.4 million , which resulted from non-cash charges of $ 43.0 million and net cash inflows of $ 2.2 million from changes in operating assets and liabilities , offset by a net loss of $ 22.9 million . the change in operating assets and liabilities primarily resulted from changes in trade and client receivables , accrued expenses , and other current and long-term liabilities . due to fluctuations in revenue and the number of transactions on our work marketplace , coupled with fluctuations in the timing of cash receipts and payments , our operating assets and liabilities will likely continue to fluctuate in the future . net cash provided by operating activities during 2019 was $ 1.1 million , which resulted from non-cash charges of $ 32.2 million , offset by a net loss of $ 16.7 million and net cash outflows of $ 14.4 million from changes in operating assets and liabilities . the change in operating assets and liabilities primarily resulted from the increase in trade and client receivables of $ 10.9 million .

net income in 2020 decreased to $ 356 million from $ 409 million in 2019. diluted earnings per share from continuing operations were $ 9.26 per share in 2020 compared to $ 10.38 per share in 2019. we generated $ 612 million of cash flow from operating activities in 2020 compared to $ 396 million in 2019. the 18 increase was primarily due to a decrease in working capital . in 2020 , we returned $ 118 million to shareholders through dividend payments and we used $ 100 million to purchase 0.4 million shares of stock under our share repurchase plans . overview of results results for the year were mixed and adversely impacted by the economic downturn caused by the covid-19 pandemic . the residential heating & cooling segment performed well in 2020 , with a 3 % increase in net sales and a $ 36 million decrease in segment profit compared to 2019 primarily due to the insurance proceeds received for lost profits in 2019. our commercial heating & cooling segment saw a decrease in net sales of 15 % and a $ 29 million decrease in segment profit compared to 2019 primarily due to lower sales volumes . sales in our refrigeration segment decreased 17 % and segment profit decreased $ 29 million compared to 2019 primarily due to lower sales volume and the loss of sales volume from our divested kysor warren business . results of operations the following table provides a summary of our financial results , including information presented as a percentage of net sales ( dollars in millions ) : replace_table_token_3_th year ended december 31 , 2020 compared to year ended december 31 , 2019 - consolidated results net sales net sales decreased 5 % in 2020 compared to 2019 , driven by lower sales volumes of 5 % and a 1 % decline related to the sale of our kysor warren business in the first quarter of 2019 , partially offset by improved combined price and mix of 1 % . the decrease in sales volume was primarily due to the impact of the covid-19 pandemic on our commercial and refrigeration segments . gross profit gross profit margins for 2020 increased 20 basis points ( “ bps ” ) to 28.6 % compared to 28.4 % in 2019. we saw margin increases of 90 bps from engineering and sourcing led cost reductions , 70 bps from lower commodity costs , and 20 bps from lower freight and distribution costs . these were partially offset by 120 bps from unfavorable combined price and mix , 30 bps from higher product warranties , and 10 bps from other product costs . 19 selling , general and administrative expenses sg & a expenses decreased by $ 30 million in 2020 compared to 2019. as a percentage of net sales , sg & a expenses decreased 10 bps from 15.4 % to 15.3 % in the same periods primarily due to lower discretionary expenditures . losses ( gains ) and other expenses , net losses ( gains ) and other expenses , net for 2020 and 2019 included the following ( in millions ) : replace_table_token_4_th the charges incurred related to the covid-19 pandemic related primarily to facility cleaning costs and sanitization supplies to ensure the health and safety of our employees . the net change in unrealized losses on unsettled futures contracts was due to changes in commodity prices relative to the unsettled futures contract prices . for more information on our derivatives , see note 10 in the notes to the consolidated financial statements . foreign currency exchange gains increased in 2020 primarily due to strengthening in foreign exchange rates in our primary markets . the special legal contingency charges in 2020 relate to outstanding legal settlements . the asbestos-related litigation relates to known and estimated future asbestos matters . the environmental liabilities relate to estimated remediation costs for contamination at some of our facilities . refer to note 5 in the notes to the consolidated financial statements for more information on litigation , including the asbestos-related litigation , and the environmental liabilities . restructuring charges restructuring charges were $ 10.8 million in 2020 compared to $ 10.3 million in 2019. the charges in 2020 related primarily to several cost reduction actions taken in response to the economic impact of the covid-19 pandemic on our business . these actions consisted of employee terminations for positions that were no longer needed to support the business , selective facility closures , and cancellations of certain sales and marketing activities . for more information on our restructuring activities , see note 8 in the notes to the consolidated financial statements . goodwill we performed a qualitative impairment analysis and noted no indicators of goodwill impairment for the year ended december 31 , 2020. we did not record any goodwill impairments in 2019 or 2020. refer to note 10 in the notes to the consolidated financial statements for more information on goodwill . asset impairments we did not have any impairments of assets related to continuing operations in 2020 or 2019 . 20 pension settlement in the second and fourth quarters of 2019 , we entered into agreements to purchase group annuity contracts and transfer certain pension assets and related pension benefit obligations to pacific life insurance company . we recognized $ 99.2 million of pension settlement charges related to these transactions . we did not have significant pension buyout activity in 2020. refer to note 11 in the notes to the consolidated financial statements for more information on pensions and employee benefit plans . income from equity method investments investments over which we do not exercise control but have significant influence are accounted for using the equity method of accounting . income from equity method investments was $ 16 million in 2020 compared to $ 13 million in 2019. the increase is due to improved operating performance at the joint ventures . story_separator_special_tag the following combined parent and guarantor subsidiaries financial information is presented as of and for the years ended december 31 , 2020 and 2019 ( in millions ) : replace_table_token_14_th replace_table_token_15_th off balance sheet arrangements an off-balance sheet arrangement is any transaction , agreement or other contractual arrangement involving an unconsolidated entity under which the company has : ( 1 ) made guarantees , ( 2 ) a retained or a contingent interest in transferred assets , ( 3 ) an obligation under derivative instruments classified as equity or ( 4 ) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing , liquidity , market risk or credit risk support to us , or that engages in leasing , hedging or research and development arrangements with us . we have no off-balance sheet arrangements that we believe may have a material current or future effect on our financial condition , liquidity or results of operations . 29 contractual obligations summarized below are our contractual obligations as of december 31 , 2020 and their expected impact on our liquidity and cash flows in future periods ( in millions ) : replace_table_token_16_th ( 1 ) contractual obligations related to finance leases are included as part of long-term debt . see note 14 for more information related to our long-term debt . ( 2 ) estimated interest payments are based on current contractual requirements and do not reflect seasonal changes in the balance of our domestic credit facility . ( 3 ) purchase obligations consist of inventory that is part of our third party logistics programs . the table above does not include pension , post-retirement benefit and warranty liabilities because it is not certain when these liabilities will be funded . for additional information regarding our contractual obligations , see note 5 of the notes to the consolidated financial statements . see note 11 of the notes to the consolidated financial statements for more information on our pension and post-retirement benefits obligations . fair value measurements fair value is the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date . fair value is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of our creditworthiness when valuing certain liabilities . our framework for measuring fair value is based on a three-level hierarchy for fair value measurements . the three-level fair value hierarchy for disclosure of fair value measurements is defined as follows : level 1 -quoted prices for identical instruments in active markets at the measurement date . level 2 - quoted prices for similar instruments in active markets ; quoted prices for identical or similar instruments in markets that are not active ; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date and for the anticipated term of the instrument . level 3 -valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable inputs that reflect the reporting entity 's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances . where available , the fair values were based upon quoted prices in active markets . however , if quoted prices were not available , then the fair values were based upon quoted prices for similar assets or liabilities or independently sourced market parameters , such as credit default swap spreads , yield curves , reported trades , broker/dealer quotes , interest rates and benchmark securities . for assets and liabilities without observable market activity , if any , the fair values were based upon discounted cash flow methodologies incorporating assumptions that , in our judgment , reflect the assumptions a marketplace participant would use . valuation adjustments to reflect either party 's creditworthiness and ability to pay were incorporated into our valuations , where appropriate , as of december 31 , 2020 and 2019 , the measurement dates . see note 17 of the notes to the consolidated financial statements for more information on the assets and liabilities measured at fair value . 30 market risk commodity price risk we enter into commodity futures contracts to stabilize prices expected to be paid for raw materials and parts containing high copper and aluminum content . these contracts are for quantities equal to or less than quantities expected to be consumed in future production . fluctuations in metal commodity prices impact the value of the futures contracts that we hold . when metal commodity prices rise , the fair value of our futures contracts increases . conversely , when commodity prices fall , the fair value of our futures contracts decreases . information about our exposure to metal commodity price market risks and a sensitivity analysis related to our metal commodity hedges is presented below ( in millions ) : replace_table_token_17_th refer to note 10 of the notes to the consolidated financial statements for additional information regarding our commodity futures contracts . interest rate risk our results of operations can be affected by changes in interest rates due to variable rates of interest on our debt facilities , cash , cash equivalents and short-term investments . a 10 % adverse movement in the levels of interest rates across the entire yield curve would have resulted in an increase to pre-tax interest expense of approximately $ 1.3 million , $ 3.9 million and $ 2.7 million for the years ended december 31 , 2020 , 2019 and 2018 , respectively . from time to time , we may use an interest rate swap hedging strategy to eliminate the variability of cash flows in a portion of our interest payments . this strategy , when employed , allows us to

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our working capital and capital expenditure requirements are generally met through internally generated funds , bank lines of credit and an asset securitization arrangement . working capital needs are generally greater in the first and second quarters due to the seasonal nature of our business cycle . statement of cash flows the following table summarizes our cash flow activity for the years ended december 31 , 2020 , 2019 and 2018 ( in millions ) : replace_table_token_12_th net cash provided by operating activities - net cash provided by operating activities increased $ 216 million to $ 612 million in 2020 compared to $ 396 million in 2019. the increase was primarily attributable to a decrease in working capital partially offset by a decrease in net income . net cash ( used in ) provided by investing activities - the net change in investing activities of $ 96 million were attributable to absence of cash inflows from insurance proceeds of $ 80 million to fund capital expenditures for the reconstruction of our marshalltown facility and $ 44 million of proceeds for the sales of our kysor warren business in 2019. capital expenditures were $ 79 million , $ 106 million and $ 95 million in 2020 , 2019 and 2018 , respectively . capital expenditures in 2020 were primarily related to the expansion of our manufacturing capacity and equipment and investments in systems and software to support the overall enterprise . net cash used in financing activities - net cash used in financing activities increased to $ 442 million in 2020 from $ 423 million in 2019. the increase is due to a decrease in borrowings and an increase in payments on our debt facilities , partially offset by lower share repurchases in 2020. during 2020 we repurchased $ 100 million of shares compared to $ 400 million of shares in 2019. we also returned $ 118 million to shareholders through dividend payments in 2020. for additional information on share repurchases , refer to note 6 in the notes to the consolidated financial statements .

24 the following table presents monthly sales results compared to the equivalent fiscal periods in 2019 : domestic system-wide same-store sales ( 1 ) compared to 2019 fiscal periods : replace_table_token_7_th the following table presents domestic capacity restrictions : domestic capacity restrictions as of december 30 , 2020 : % of domestic system 75 % capacity or social distancing 29 % 50 % - 66 % capacity 23 % 25 % - 33 % capacity 5 % off-premise only 39 % no restrictions 1 % temporarily closed 3 % total 100 % franchise and license revenue reductions in addition to the impacts that reduced sales had on franchise and licenses revenues , certain forms of franchise support resulted in reductions to these revenues throughout 2020 including : abatement of $ 6.0 million of royalties including $ 1.9 million in the first quarter , $ 3.1 million in the second quarter and $ 1.0 in the fourth quarter ; abatement of $ 1.3 million of advertising fees in the first quarter . cost savings initiatives in response to the covid-19 pandemic , we also implemented the following cost savings initiatives : suspended travel and canceled in-person field meetings ; placed holds on all open corporate and field positions ; significantly reduced restaurant level staffing across the company restaurant portfolio ; meaningfully reduced compensation for our board of directors and multiple levels of management ; and furloughed over 25 % of the employees at our corporate office , approximately half of which were subsequently separated from the company . we subsequently eased certain of these cost savings measures . for example , we have resumed recruiting for certain corporate and field positions , and the compensation reductions expired on june 25 , 2020. we also secured $ 2.6 million of federal tax credits in connection with wages paid to retained employees during the crisis under the coronavirus aid , relief , and economic security ( cares ) act . liquidity actions taken effective february 27 , 2020 , we suspended share repurchases , and effective march 16 , 2020 terminated our rule 10b5-1 plan in both cases in light of uncertain market conditions arising from the covid-19 pandemic . 25 due to the impact of the covid-19 pandemic , effective may 13 , 2020 and december 15 , 2020 , the company and certain of its subsidiaries entered into a second and third amendment , respectively , to the current credit facility which amended the credit agreement dated as of october 26 , 2017. see liquidity and capital resources - credit facility . as of december 30 , 2020 , the company was in compliance with its financial covenants related to the amended credit facility . on july 6 , 2020 , we closed on the issuance and sale of 8,000,000 shares of common stock . net proceeds of $ 69.6 million were received after deducting the underwriters ' discounts and commissions and offering expenses payable by the company and disbursed to pay down the outstanding balance on the credit facility . growing and revitalizing the brand over the last five years , our growth initiatives have led to 169 new restaurant openings . during 2020 , our franchisees opened 20 restaurants , of which eight are international franchised locations , including four in canada , two in mexico , and one each in indonesia and central america . our goal is to increase net restaurant growth through both domestic and international avenues . domestic growth will continue to focus on markets in which we have modest penetration . development agreements related to the sale of 113 of our company restaurants during 2018 and 2019 and recently enhanced development agreements in canada and the philippines are expected to stimulate both domestic and international growth over the next several years . a total of 22 remodels were completed during 2020 , consisting of 20 at franchised restaurants and two at company restaurants . eleven of these remodels were in our heritage image , which we launched in late 2013. this updated look reflects a more contemporary diner feel to further reinforce our america 's diner positioning . the remaining 11 restaurants updated to our heritage 2.0 image which features more attention-grabbing exterior elements while extending the relaxing interior elements from the original heritage program . as of the end of 2020 , approximately 91 % of the restaurants in the system have been remodeled to one of our two heritage images . balancing the use of cash though certain strategies have been impacted by the covid-19 pandemic , we are still focused in the longer term on balancing the use of cash between reinvesting in our base of company restaurants , growing and strengthening the brand and returning cash to shareholders . during 2020 , cash capital expenditures were $ 7.0 million . our real estate strategy is to redeploy proceeds from the sale of certain pieces of our owned real estate to acquire higher quality real estate underlying company and franchised restaurants . during 2020 , we generated $ 9.4 million of cash proceeds from the sale of real estate . prior to suspending share repurchases , during 2020 , we repurchased a total of 1.7 million shares of our common stock for $ 34.2 million . since initiating our share repurchase program in november 2010 , we have repurchased a total of 54.0 million shares of our common stock for $ 553.9 million . the company is prohibited from paying dividends and making stock repurchases and other general investments until the date of delivery of our financial statements for the fiscal quarter ending september 29 , 2021. see liquidity and capital resources - credit facility . in december 2019 , the board approved a new share repurchase authorization for $ 250 million . as of december 30 , 2020 , there was approximately $ 248.0 million remaining under our current repurchase authorization . story_separator_special_tag the consolidated leverage ratio covenant was waived until the fiscal quarter ending march 31 , 2021 , at which point the covenant level was to increase from 4.00x to 4.50x , stepping down to 4.25x in the second quarter of 2021 and 4.00x in the third fiscal quarter of 2021 and thereafter . in addition , the second amendment added a monthly minimum liquidity covenant , defined as the sum of unrestricted cash and revolver availability , ranging from $ 60 million to $ 70 million , commencing on may 13 , 2020 to may 26 , 2021. on december 15 , 2020 , we executed an additional amendment ( the “ third amendment ” ) to our credit agreement . commencing with the effective date of the third amendment until the date of delivery of the financial statements for the fiscal quarter ending december 29 , 2021 , the interest rate shall remain libor plus 3.00 % . as of the effective date of the third amendment , the accordion feature is removed , and the total credit facility commitment is $ 375 million and will be reduced to $ 350 million on july 1 , 2021. commencing with the effective date of the third amendment until the date of delivery of the financial statements for the fiscal quarter ending september 29 , 2021 , the company will continue to have supplemental monthly reporting obligations to its lenders and will be prohibited from paying dividends and making stock repurchases and other general investments . additionally , existing restrictions on capital expenditures of $ 10 million in the aggregate will remain in effect through march 31 , 2021 , at which point the restrictions will expand to $ 12 million in the aggregate through september 29 , 2021. the third amendment temporarily waives certain financial covenants . the consolidated fixed charge coverage ratio covenant is waived through march 31 , 2021 , at which point the covenant level will be a minimum of 1.00x , adjusting to 1.25x on july 1 , 2021 , and 1.50x on september 30 , 2021 and thereafter . the consolidated leverage ratio covenant is waived through march 31 , 2021 , at which point the covenant level will be a maximum of 5.25x , stepping down to 4.75x on july 1 , 2021 , and 4.00x on september 30 , 2021 and thereafter . in addition , the third amendment maintains a monthly minimum liquidity covenant , defined as the sum of unrestricted cash and revolver availability , of $ 70 million , commencing on the effective date until the date of delivery of the financial statements for the fiscal quarter ending september 29 , 2021. we were in compliance with all financial covenants as of december 30 , 2020. prior to considering the impact of our interest rate swaps , described below , the weighted-average interest rate on outstanding revolver loans was 3.15 % as of december 30 , 2020. taking into consideration our interest rate swaps that are designated as cash flow hedges , the weighted-average interest rate of outstanding revolver loans was 5.01 % as of december 30 , 2020. interest rate hedges we have interest rate swaps to hedge a portion of the forecasted cash flows of our floating rate debt . see part ii item 7a . quantitative and qualitative disclosures about market risk for details on our interest rate swaps . contractual obligations our future contractual obligations and commitments at december 30 , 2020 consisted of the following : replace_table_token_19_th 35 ( a ) interest obligations represent payments related to our long-term debt outstanding at december 30 , 2020. for long-term debt with variable rates , we have used the rate applicable at december 30 , 2020 to project interest over the periods presented in the table above , taking into consideration the impact of the interest rate swaps that are designated as cash flow hedges for the applicable periods . the finance lease obligation amounts above are inclusive of interest . ( b ) purchase obligations include amounts payable for company and franchised restaurants under purchase contracts for food and non-food products . many of these agreements do not obligate us to purchase any specific volumes and include provisions that would allow us to cancel such agreements with appropriate notice . for agreements with cancellation provisions , amounts included in the table above represent our estimate of purchase obligations during the periods presented if we were to cancel these contracts with appropriate notice . ( c ) unrecognized tax benefits are related to uncertain tax positions . as we are not able to reasonably estimate the timing or amount of these payments , the related balances have not been reflected in this table . off-balance sheet arrangements we do not have any off-balance sheet arrangements . critical accounting policies and estimates our reported results are impacted by the application of certain accounting policies that require us to make subjective or complex judgments . these judgments involve estimations of the effect of matters that are inherently uncertain and may significantly impact our quarterly or annual results of operations or financial condition . changes in the estimates and judgments could significantly affect our results of operations and financial condition and cash flows in future years . descriptions of what we consider to be our most significant critical accounting policies are as follows : self-insurance liabilities . we are self-insured for a portion of our losses related to certain medical plans , workers ' compensation , general , product and automobile insurance liability . in estimating these liabilities , we utilize independent actuarial estimates of expected losses , which are based on statistical analysis of historical data . our estimates of expected losses are adjusted over time based on changes to the actual costs of the underlying claims , which could result in additional expense or reversal of expense previously recorded . see note 2 to our consolidated financial statements

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources summary of cash flows our primary sources of liquidity and capital resources are cash generated from operations and borrowings under our credit facility ( as described below ) . principal uses of cash are operating expenses , capital expenditures and , prior to the second quarter of 2020 , the repurchase of shares of our common stock . the following table presents a summary of our sources and uses of cash and cash equivalents for the periods indicated : replace_table_token_17_th net cash flows used in operating activities were $ 3.1 million for the year ended december 30 , 2020 compared to net cash flows provided by operating activities of $ 43.3 million for the year ended december 25 , 2019. the decrease in cash flows provided by ( used in ) operating activities was primarily due to the impacts of the covid-19 pandemic and the timing of prior year accrual payments . net cash flows provided by operating activities were $ 43.3 million for the year ended december 25 , 2019 compared to $ 73.7 million for the year ended december 26 , 2018. the decrease in cash flows provided by operating activities was primarily due to the reduction in equivalent units and the related runoff of liabilities resulting from the sale of company restaurants . we believe that our estimated cash flows from operations for 2021 , combined with our capacity for additional borrowings under our credit facility , will enable us to meet our anticipated cash requirements and fund capital expenditures over the next twelve months . 33 net cash flows provided by investing activities were $ 4.7 million for the year ended december 30 , 2020. these cash flows are primarily proceeds from the sale of real estate of $ 9.4 million and proceeds from the sale of investments of $ 2.9 million , partially offset by capital expenditures of $ 7.0 million and investment purchases of $ 1.4 million .

while fiscal 2020 brought a net loss of $ 2,103,000 , we had approximately $ 1,000,000 of expense from non-cash inventory scrap as we continued to purge inventory from previous acquisitions . we also spent approximately $ 216,000 on pandemic expenses and $ 286,000 for the recruitment and training of key management positions . our bottom lines have suffered in recent years as we have tried to streamline our operations by addressing prior year acquisitions that have not served us well in poor market conditions . we expect to have access to capital as needed throughout fiscal 2021 through the sale of inventory and from the use our line of credit . on november 30 , 2020 we had $ 2,640,470 available on our line of credit . in 2020 , we were able to obtain $ 1,242,900 of funding from the small business administration 's paycheck protection program . these funds were fully forgiven in november 2020 and helped offset losses during the pandemic as we continued to employ our workforce in full . we also received three economic injury disaster loans for a total of $ 450,000. these loans have a 30 year payback period . despite the continued losses , our banking relationship has remained positive through transparency and continued communication . our ability to not overuse our line of credit in times of losses has provided us with the confidence that we can manage our cash use until market conditions improve and our product offering and dealer network grow . our working capital remained strong at approximately $ 4,137,000 in fiscal 2020 with a current ratio of 1.67. we also continue to maintain a debt to equity ratio below 1. we continue to put emphasis on reducing our inventory to more manageable levels to decrease carrying costs , implementing lean manufacturing practices , improving our inventory turnover , focusing our product offering , increasing our dealer network reach , and improving customer service . we do not foresee liquidity issues within the next twelve months . impact of covid-19 while the covid-19 pandemic had very little impact on our results of operations for the first quarter of fiscal 2020 , it did impact our results of operations for the rest of fiscal 2020 and we believe that it may continue to do so for the foreseeable future . from march 23 , 2020 until may 18 , 2020 the majority of our office staff in all three segments worked remotely with the exception of key operations support . at the height of the initial outbreak our workforce was down approximately 17 % due to self-quarantine . by the end of may 2020 our entire workforce had returned and operations have continued as normal with additional safety precautions in place . as covid-19 cases began to rise in november 2020 , we allowed employees that could perform their job functions remotely do so at their discretion . at this time approximately 75 % of our office staff is working remote at least part-time and this has had minimal effect on how we operate as a business . we expect that by the end of february 2021 remote employees will return full time to the office . future outbreaks could have a material effect on our operations and we are taking precautions to mitigate the spread of covid-19 . in our agricultural products segment , we did not experience any order cancellations ; however , calls for new whole goods slowed significantly in the second quarter of fiscal 2020 and many dealers held off on the shipping or pickup of their completed units . our sales levels were comparatively steady to the last few years in the third and fourth quarters of fiscal 2020 and we ultimately ended the year down 3.1 % on sales . prior to the initial lockdowns in march 2020 , we were anticipating an uptick in sales from recent years . we believe 2021 will bring better economic conditions for farmers because of stimulus payments received in 2020. we also believe that farmers were conservative in 2020 , using excess funds to pay down debt , and will be ready to spend in 2021 . 11 our modular buildings segment started fiscal 2020 with a more diverse backlog than we had at the beginning of fiscal 2019 ; however , we had some setbacks on site work as subcontractors were forced to quarantine after testing positive for covid-19 . our workers have been hesitant to travel during the pandemic and , as a result , we have had some challenges completing site work in the third and fourth quarters of fiscal 2020. because of covid-19 , many companies were hesitant to enter into long-term contracts in fiscal year 2020. as a result , our modular building rental fleet remained largely unused in fiscal 2020 which is evidenced by our decrease in lease revenue . our sales outlook for fiscal 2021 reflects a continued decrease in demand , but sales activity saw a moderate increase near the end of fiscal 2020. in our tools segment , oil prices dropped significantly at the start of the pandemic , which caused our sales to drop significantly in the second quarter of fiscal 2020. the diversification of our business with our new oem customer helped us get through the oil and gas industry lows during that time ; however , since oil and gas prices have not yet reached their pre-pandemic levels , we have not seen our sales levels from these customers return . story_separator_special_tag our core product offering going forward includes products that we feel have strong demand , favorable margins and flow through our facility efficiently . we believe the gross margin improvements are a strong indicator of our ability to succeed as agricultural conditions continue to improve . our agricultural products segment 's operating expenses for the 2020 fiscal year were $ 4,483,000 compared to $ 3,796,000 for the 2019 fiscal year , an increase of $ 687,000 , or 18.1 % . approximately $ 115,000 of this increase is due to the hiring of a new territory development manager to increase sales and strengthen our dealer network . we also incurred $ 116,000 of additional recruitment expense in fiscal 2020 when compared to fiscal 2019 related to hiring a new ceo , supply chain manager and product manager . we incurred approximately $ 73,000 of expense paying dual salaries as we transitioned these new roles . we also incurred approximately $ 148,000 of pandemic expense as we increased employee incentives for working during the pandemic , conducted sitewide covid-19 testing and provided supplies to help keep our employees safe . we also incurred approximately $ 300,000 of additional bonus expense in fiscal 2020 recruiting new management talent , rewarding retiring management , and accruing bonuses for operational improvements during this agricultural downturn . this segment 's operating expenses for the 2020 fiscal year were 34.3 % of sales compared to 28.1 % of sales for the 2019 fiscal year . total loss from operations for our agricultural products segment during the 2020 fiscal year was $ ( 2,318,000 ) compared to an operating loss of $ ( 1,599,000 ) for the 2019 fiscal year , an increase in loss of $ 719,000. modular buildings . our modular buildings segment 's net sales for the 2020 fiscal year were $ 6,993,000 compared to $ 7,260,000 for the 2019 fiscal year , a decrease of $ 267,000 , or 3.7 % . the decrease in sales was attributable to decreased operating lease activity in fiscal 2020 and a large construction project nearing completion . gross profit for the 2020 fiscal year was ( 3.7 ) % compared to 16.1 % during the 2019 fiscal year . the decreased gross profit was due to margin deterioration on a large construction contract for expenses that were unforeseen . operating expenses for the 2020 fiscal year were 14.8 % of sales compared to 13.3 % for the 2019 fiscal year . the increase in operating expenses was due to $ 35,000 of pandemic expense related to employee incentives during covid-19 lockdowns and supplies needed to mitigate the spread of covid-19 . total loss from operations from our modular buildings segment during the 2020 fiscal year was $ ( 1,295,000 ) compared to an operating income of $ 208,000 in the 2019 fiscal year , an increase in loss of $ 1,503,000. our expected profits on a large construction project eroded in fiscal 2020 , but we look forward to a fresh start in fiscal 2021. tools . our tools segment 's net sales for the 2020 fiscal year were $ 2,330,000 compared to $ 2,121,000 for the 2019 fiscal year , an increase of $ 209,000 , or 9.9 % . the increase is primarily due to the addition of a large oem customer in the fourth quarter of fiscal 2019. we had projected larger revenue increases ; however , the covid-19 pandemic had a negative effect on our existing customer base , mainly the oil and gas industries . these sales have not fully recovered to date and we have relied heavily on our oem customer in recent months . we are focused on expanding our portfolio of customers to help us diversify our business as different industries experience booms and busts . gross profit for the 2020 fiscal year was 21.3 % compared to 26.4 % for the 2019 fiscal year . our decreased gross margin for the twelve months is attributable to the hiring of a floor supervisor to help us manage the higher volumes of sales we were expecting with the addition of our oem customer . this position is a necessary one to manage increased volumes through our shop floor and we are continuing to find ways to increase volumes to cover the expenses of this position . operating expenses were $ 792,000 for the 2020 fiscal year compared to $ 666,000 for the 2019 fiscal year , an increase of $ 126,000 , or 18.9 % . this increase in operating expenses is due primarily to approximately $ 79,000 of additional costs related to implementation of our oem line and $ 33,000 of pandemic expense related to the retention of employees during the pandemic and supply costs associated with mitigating the spread of covid-19 . 15 trends and uncertainties we are subject to a number of trends and uncertainties that may affect our short-term or long-term liquidity , sales revenues , and operations . similar to other farm equipment manufacturers , we are affected by items unique to the farm industry , including fluctuations in farm income resulting from the change in commodity prices , crop damage caused by weather and insects , government farm programs , interest rate fluctuations , and other unpredictable variables . other uncertainties include our oem customers and the decisions they make regarding their current supply chain structure , inventory levels , and overall business conditions . management believes that our business is dependent on the farming industry for the bulk of our sales revenues . as such , our business tends to reap the benefits of increases in farm net income , as farmers tend to purchase equipment in lucrative times and forgo purchases in less profitable years . direct government payments have been increasing in the past two years and costs of agricultural production are increasing ; therefore , we anticipate that further increases in the value of production will benefit our business

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our main source of funds during the 2020 fiscal year was cash generated by financing activities . we received $ 1,242,900 of funding and forgiveness via a paycheck protection program loan and also $ 450,000 of funding from the economic injury disaster loan program in fiscal 2020. we did use approximately $ 856,000 of cash in operations in fiscal 2020 which was largely from costs of production for the agricultural products and modular building segments . we used approximately $ 693,000 of cash to update facilities and equipment which includes software and hardware related to information technology advances , office space updates , and manufacturing equipment improvements that enhance our efficiency . we have a bank midwest credit facility consisting of a $ 5,000,000 revolving line of credit , pursuant to which we had borrowed $ 2,359,530 , with $ 2,640,470 remaining , as of november 30 , 2020 , and one term loan , which had an outstanding principal balance of $ 2,350,593 as of november 30 , 2020. the revolving line of credit is being used for working capital purposes . we also have three economic injury disaster loans provided by the u.s. small business administration with an aggregate principal balance of $ 450,000 as of november 30 , 2020. our loans require us to comply with various covenants , including maintaining certain financial ratios and obtaining prior written consent from bank midwest forany investment in , acquisition of , or guaranty relating to another business or entity .

all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this annual report on form 10-k. company history our company was formed on april 9 , 2012 as phalanx , inc. , under the laws of the state of nevada and changed its name to toughbuilt industries , inc. on december 29 , 2015. business overview our company was formed to design , manufacture and distribute innovative tools and accessories to the building industry . the global tool market industry is a multibillion dollar business . toughbuilt 's business is based on development of innovative and state of the art products , primarily in tools and hardware category , with particular focus on building and construction industry with the ultimate goal of making life easier and more productive for the contractors and workers alike . toughbuilt 's current product line includes three major categories related to this field , with several additional categories in various stages of development , consisting of soft goods & kneepads and sawhorses & work products . governments and health organizations have identified an outbreak of a respiratory illness caused by a new coronavirus which has been named covid-19 . the world health organization has declared the outbreak a global pandemic . while the worst of the pandemic seems to have subsided in china , its country of original origin , we are seeing the virus spread and start to peak in other parts of the globe , including in the u.s. , which has caused massive closures of businesses and strain on shipping and freight systems world wide . since the outbreak , all of our chinese facilities were temporarily closed for a period of time . most of these facilities have been reopened . depending on the progression of the outbreak , our ability to obtain necessary supplies and ship finished products to customers may be partly or completely disrupted globally . also , our ability to maintain appropriate labor levels could be disrupted . if the coronavirus continues to progress , it could have a material negative impact on our results of operations and cash flow . jobs act on april 5 , 2012 , the jumpstart our business startups act of 2012 , or the jobs act , was enacted . section 107 of the jobs act provides that an “ emerging growth company ” can take advantage of the extended transition period provided in section 7 ( a ) ( 2 ) ( b ) of the securities act of 1933 , as amended , or the securities act , for complying with new or revised accounting standards . in other words , an “ emerging growth company ” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies . we are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the jobs act . subject to certain conditions set forth in the jobs act , as an “ emerging growth company , ” we intend to rely on certain of these exemptions from , without limitation , ( i ) providing an auditor 's attestation report on our system of internal controls over financial reporting pursuant to section 404 ( b ) of the sarbanes-oxley act and ( ii ) complying with any requirement that may be adopted by the public company accounting oversight board ( pcaob ) regarding mandatory audit firm rotation or a supplement to the auditor 's report providing additional information about the audit and the financial statements , known as the auditor discussion and analysis . we will remain an “ emerging growth company ” until the earliest of ( a ) the last day of our fiscal year following the fifth anniversary of the ipo , ( b ) the last day of the first fiscal year in which our annual gross revenues exceed $ 1.07 billion , ( c ) the last day of our fiscal year in which we are deemed to be a “ large accelerated filer ” as defined in rule 12b-2 under the securities exchange act of 1934 , or exchange act ( which would occur if the market value of our equity securities that is held by non-affiliates exceeds $ 700 million as of the last business day of our most recently completed second fiscal quarter ) , or ( d ) the date on which we have issued more than $ 1 billion in nonconvertible debt during the preceding three-year period . 16 for the year ended december 31 , 2019 for the year ended december 31 , 2019 compared to the year ended december 31 , 2018 revenues revenues , net of allowances , for the years ended december 31 , 2019 and 2018 were $ 19,090,071 and $ 15,289,400 , respectively , consisted of metal goods and soft goods sold to customers . revenues increased in 2019 over 2018 by $ 3,800,671 , or 24.9 % , primarily due to wide acceptance of our products in the tools industry and receipt of recurring sales orders for metal goods and soft goods from our existing customers and new customers , and introduction and sale of new soft goods products to our customers . cost of goods sold cost of goods sold for the years ended december 31 , 2019 and 2018 was $ 13,475,947 and $ 11,794,206 , respectively . cost of goods sold increased in 2019 over 2018 by $ 1,681,741 or 14.3 % , primarily due to the increase in materials cost of steel and plastics polyester to manufacture metal goods and soft goods and increase in labor cost in china . story_separator_special_tag the second note ( the “ series b note ” and with the series a note , collectively referred to as the “ notes ” ) has a principal amount of $ 4.78 million for which the investor paid $ 4.78 million in the form of a full recourse promissory note issued by the investor to the company ( the “ investor note ” ) secured by $ 4.78 million in cash or cash equivalents of the investor ( i.e : an original issue discount of approximately 15 % to the face amount of the series b note ) . no portion of the series b note may be converted into shares of our common stock ( the “ common stock ” ) until the corresponding portion of the investor note has been prepaid to the company in cash , at which point in time such portion of the series b note shall be deemed “ unrestricted ” . the investor note is subject to optional prepayment at any time at the option of the investor and mandatory prepayment , at the company 's option , subject to certain equity conditions , at any time 45 trading days after the effectiveness of a resale registration statement ( or otherwise the applicability of rule 144 promulgated under the securities act of 1933 , as amended ) . notwithstanding the foregoing , the company may not effect a mandatory prepayment if the shares underlying the series a note and the portion of the series b note that has become unrestricted exceeds 35 % of the market capitalization of the company . the notes are senior secured obligations of the company secured by a lien on all assets of the company , bear no interest ( unless an event default has occurred and is continuing ) and mature on december 31 , 2020. the notes will be convertible at $ 1.00 into a fixed number of shares ( the “ conversion shares ” ) . the notes are convertible at the holder 's option , in whole or in part , at any time after closing . the conversion price will be subject to adjustment for stock dividends , stock splits , anti-dilution and other customary adjustment events . the company shall repay the principal amount of the notes in 12 installments , with the first installment starting on february 1 , 2020 ( each , an “ installment date ” ) . installments 1-3 shall be 1/36th of the principal amount , installments 4-6 shall be 1/18th of the principal amount and installments 7-12 shall be 1/8th of the principal amount . the repayment amount shall be payable in cash , or , subject to the satisfaction of equity conditions , at the option of the company , in registered common stock or a combination of cash and registered common stock . however , if the 30-day volume weighted average price of the common stock ( the “ vwap ” ) of the company falls below 50 % of the [ market price ( as defined above ) ] 1 or the company fails to satisfy certain other equity conditions , the repayment amount is payable in shares of common stock only unless the investor ( s ) waive any applicable equity condition . if the company elects to satisfy all or any portion of an installment in shares of common stock , the company will predeliver such shares of common stock to the investor on the 23rd trading day prior to the applicable installment date , with a true-up of shares ( if necessary ) on the installment date . any excess shares of common stock shall be applied to subsequent installments . the shares used to meet a principal repayment ( “ installment shares ” ) would be valued at a conversion price calculated as the lesser of ( i ) 85 % of the arithmetic average of the three lowest daily vwaps of the 20 trading days prior to the payment date or ( ii ) 85 % of the vwap of the trading day prior to payment date ( “ installment price ” ) with a floor of $ 0.10 . 21 all amortization payments shall be subject to the investors ' right to ( a ) defer some or all of any installment payment to a subsequent installment date ; and ( b ) at any time during an installment period , convert up to four times the installment amount at the installment price ; provided shares received pursuant to such accelerated conversions shall be subject to a leak-out provision that solely limits sales of such shares received by the investor in such accelerated conversion ( and not any other sales ) to the greater of ( a ) $ 500,000 per trading day or ( b ) 40 % of the volume traded on a given day as reported by bloomberg lp . upon completion of a change of control , the holders may require the company to purchase any outstanding notes in cash at 125 % of par plus accrued but unpaid interest . the company shall have the right to redeem any and all amounts of the outstanding note at 125 % of the greater of ( a ) principal amount plus accrued but unpaid interest ( if any ) , or ( b ) conversion value plus accrued but unpaid interest ( if any ) provided the company has satisfied certain equity conditions . the company must give the investor ( s ) ninety ( 90 ) business days ' prior notice of any such redemption . prior to all outstanding amounts under the note being repaid in full , the company will not create any new encumbrances on any of its or its subsidiaries ' assets without the prior written consent of the lender , with a carveout for a working capital facility of which the details are to be determined .

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows net cash flows used in operating activities for the year ended december 31 , 2019 was $ 10,229,337 , attributable to a net loss of $ 4,300,969 , offset by depreciation expense of $ 225,426 , amortization of original issuance of debt discount and debt issuance cost and non-cash inducement cost for debt conversion of $ 626,546 , change in the fair value of warrant derivative of $ ( 5,251,852 ) , stock-based compensation expense of $ 336,637 , and net increase in operating assets of $ 1,768,059 , and net decrease in liabilities of $ 97,066. the company offered cash discounts to its customers and factors to accelerate payments of accounts receivable . in addition , the company negotiated extended payment terms with its suppliers , vendors and related parties to conserve its cash . net cash flows used in operating activities for the year ended december 31 , 2018 was $ 8,243,414 , attributable to a net loss of $ 27,651,412 , offset by depreciation expense of $ 120,723 , amortization of original issuance of debt discount and debt issuance cost and non-cash inducement cost for debt conversion of $ 5,278,132 , change in the fair value of warrant derivative of $ 14,336,425 , stock-based litigation settlement expense of $ 939,538 , stock-based compensation expense of $ 557,042 , stock issued in lieu of deferred salaries of $ 650,100 and net increase in operating assets of $ 1,154,073 , and net decrease in liabilities of $ 1,319,889. the company offered cash discounts to its customers and factors to accelerate payments of accounts receivable . in addition , the company negotiated extended payment terms with its suppliers , vendors and related parties to conserve its cash .

the decrease in net income from continuing operations was driven by an impairment of long-lived assets at silvertip of $ 250.8 million , higher operating costs at silvertip , which included a write-down of $ 64.6 million at silvertip of metal inventory as a result of lower than expected production levels , and lower production at rochester due to reduced placement rates caused by the planned commissioning of the new crusher configuration in the second half of 2019. this was partially offset by favorable fair value adjustments and realized gains related to the company 's equity investment in metalla and strong operating results at kensington . adjusted net loss was $ 54.6 million , or $ 0.25 per share , compared to $ 2.2 million , or $ 0.01 per share ( see “ non-gaap financial performance measures ” ) . net income ( loss ) from discontinued operations in respect of the san bartolomé mine and processing facility 's ( which was divested by the company in february 2018 , “ manquiri divestiture ” ) operating results , income increased $ 5.1 million . in february 2019 , the company recorded an adjustment to the gain from the manquiri divestiture following the release of a liability associated with the company 's post-closing indemnification obligations which were extinguished at that time . year ended december 31 , 2018 compared to year ended december 31 , 2017 revenue revenue decreased by $ 83.7 million as a result of fewer gold ( 15 % ) and silver ( 3 % ) ounces sold and an 8 % decrease in average realized silver prices , partially offset by an increase in average realized gold prices ( 1 % ) and sales from silvertip , which commenced commercial production in september 2018. the company sold 12.4 million silver ounces , 350,508 gold ounces , 4.4 million zinc pounds and 2.6 million lead pounds compared to 12.7 million silver ounces and 410,604 gold ounces in the prior year . gold contributed 68 % of sales , silver contributed 31 % , zinc contributed 1 % and lead contributed less than 1 % , compared to 70 % of sales from gold and 30 % from silver . costs applicable to sales costs applicable to sales remained comparable despite lower ounces sold due to a $ 26.7 million write-down of inventory at silvertip , higher costs applicable to sales per gold ounce at wharf and kensington , partially offset by lower costs applicable to sales per silver ounce at palmarejo . for a complete discussion of costs applicable to sales , see results of operations below . amortization amortization decreased $ 18.1 million , or 12 % , due to fewer ounces sold at all operating sites . expenses general and administrative expenses decreased $ 2.3 million , or 7 % , primarily due to lower compensation costs . exploration expense decreased $ 4.9 million , or 16 % , as a result of lower exploration costs at palmarejo , rochester , kensington and la preciosa as the company focused its exploration efforts on capitalized infill conversion drilling in 2018. pre-development , reclamation , and other expenses increased $ 1.1 million , or 6 % , of which $ 3.4 million is attributable to the write-down of property , plant and equipment at rochester . other income and expenses fair value adjustments , net , were a gain of $ 3.6 million due to a a net gain on equity securities of $ 3.0 million coupled with favorable fair value adjustment of zinc options . effective january 1 , 2018 , as a result of asu 2016-01 , changes in the fair value of equity investments are recognized as fair value adjustments instead of other comprehensive income ( loss ) in the consolidated statements of comprehensive income ( loss ) . interest expense ( net of capitalized interest of $ 1.2 million ) increased to $ 24.4 million from $ 16.4 million , due to higher average debt levels related to the 2024 senior notes and the facility ( each , as defined below ) . other , net was an expense of $ 24.7 million , as a result of the $ 18.6 million write-down of the receivable consideration from the manquiri divestiture , unfavorable foreign exchange rate movements , a write-down of $ 6.5 million related to the rmc receivable , partially offset by gains on the sale of non-core assets and investments in 2017 . 40 income and mining taxes the company 's income and mining tax ( expense ) benefit consisted of : replace_table_token_24_th income and mining tax benefit of approximately $ 16.8 million results in an effective tax rate of 26 % for 2018. this compares to income tax expense of $ 29.0 million or effective tax rate of 73 % for 2017. the company 's effective tax rate is impacted by multiple factors as illustrated above . the comparability of the company 's income and mining tax ( expense ) benefit for the reported periods was primarily impacted by ( i ) variations in our income before income taxes ; ( ii ) geographic distribution of that income ; ( iii ) foreign exchange rates ; ( iv ) mining taxes ; ( v ) the non-recognition of tax assets and ( vi ) the impact of specific transactions . therefore , the effective tax rate will fluctuate , sometimes significantly , year to year . the following table summarizes the components of the company 's income ( loss ) before tax and income and mining tax ( expense ) benefit : replace_table_token_25_th a valuation allowance is provided for deferred tax assets for which it is more likely than not that the related benefits will not be realized . story_separator_special_tag cash provided by operating activities decreased $ 177.1 million in the year ended december 31 , 2018 compared to the year ended december 31 , 2017 , primarily due to lower sales of gold and silver ( 15 % and 3 % , respectively ) at a lower operating margin per ounce . in addition , silvertip incurred higher than anticipated operating costs that included a $ 26.7 million write-down of metals inventory , and income and mining tax payments made by coeur mexicana in 2018 pertaining to 2017 palmarejo earnings . revenue for the year ended december 31 , 2018 decreased $ 83.7 million , $ 72.8 million of which was due to lower ounces sold and $ 10.9 million was due to lower average realized prices . cash used in investing activities from continuing operations net cash used in investing activities in the year ended december 31 , 2019 was $ 92.6 million compared to $ 102.0 million in the year ended december 31 , 2018 . cash used in investing activities decreased primarily due lower capital expenditures , partially offset by receipt of $ 19.0 million of proceeds under the manquiri notes receivable ( as defined in note 22 discontinued operations ) in 2018. the company had capital expenditures of $ 99.8 million in the year ended december 31 , 2019 compared with $ 140.8 million in the year ended december 31 , 2018 . capital expenditures in the year ended december 31 , 2019 were primarily related to underground development at silvertip , palmarejo , and kensington , a new thickener at palmarejo , poa 11 and the new crushing circuit , including the hpgr unit at rochester . capital expenditures in the year ended december 31 , 2018 were primarily related to pre-production capital spending and the new 220-person camp at silvertip , mining equipment at kensington and underground development at silvertip , palmarejo and kensington . 48 net cash used in investing activities in the year ended december 31 , 2018 was $ 102.0 million compared to net cash used in investing activities of $ 277.2 million in the year ended december 31 , 2017. cash used in investing activities decreased $ 175.2 million primarily due to the cash component of the silvertip acquisition consideration paid in 2017 , 2018 payments received totaling $ 19.0 million related to the manquiri divestiture , partially offset by a $ 4.0 million increase in capital expenditures . the company had capital expenditures of $ 140.8 million in the year ended december 31 , 2018 compared with $ 136.7 million in the year ended december 31 , 2017. capital expenditures in the year ended december 31 , 2018 were primarily related to pre-production capital spending at silvertip and underground development at silvertip , palmarejo , and kensington . capital expenditures in the year ended december 31 , 2017 were primarily related to underground development at palmarejo , silvertip and kensington , capitalized conversion drilling , and the stage iv leach pad expansion at rochester . cash used in financing activities from continuing operations net cash used in financing activities in the year ended december 31 , 2019 increased to $ 60.9 million compared to $ 5.2 million in the year ended december 31 , 2018 . during the year ended december 31 , 2019 , the company repaid $ 135.0 million , net , of outstanding amounts under the facility and made a payment of contingent consideration of $ 18.7 million associated with the silvertip acquisition , partially offset by net proceeds of approximately $ 123.1 million from the sale of 30.9 million shares through an “ at the market ” offering . during the year ended december 31 , 2018 , the company drew $ 35.0 million , net , from the facility to repay a debt obligation of silvertip and to finance working capital and general corporate purposes . as of december 31 , 2019 , there were no outstanding amounts under the facility . contractual obligations the following table summarizes the company 's contractual obligations at december 31 , 2019 and the effect such obligations are expected to have on its liquidity and cash flow in future periods . replace_table_token_33_th ( 1 ) the company had all $ 250.0 million available under the facility as of december 31 , 2019 . ( 2 ) the company has entered into various finance lease agreements for commitments primarily over the next five years . ( 3 ) reclamation and mine closure amounts represent the company 's estimate of the cash flows associated with its legal obligation to reclaim mining properties . this amount will decrease as reclamation work is completed . amounts shown on the table are undiscounted . ( 4 ) accrued government-mandated severance at the palmarejo complex . ( 5 ) the company is unable to reasonably estimate the timing of recognition of unrecognized tax benefits beyond 2019 due to uncertainties in the timing of the effective settlement of tax positions . 49 environmental compliance expenditures for the years ended december 31 , 2019 , 2018 , and 2017 , the company spent $ 8.2 million , $ 7.9 million , and $ 6.5 million , respectively , in connection with routine environmental compliance activities at its operating properties . the company estimates that environmental compliance expenditures during 2020 will be approximately $ 10.0 million . future environmental compliance expenditures will be determined by governmental regulations and the overall scope of the company 's operating and development activities . critical accounting policies and accounting developments listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates and assumptions involved and the magnitude of the asset , liability , revenue , and expense being reported . for a discussion of recent accounting pronouncements , see note 2 summary of significant accounting policies in the notes to the consolidated financial statements . revenue recognition

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

reduction in total debt 2 reflects the results of coeur 's deleveraging initiatives and improved financial performance during 2019 36 selected financial and operating results replace_table_token_20_th ( 1 ) see “ non-gaap financial performance measures. ” ( 2 ) includes capital leases . net of debt issuance costs and premium received . ( 3 ) reported production and financial results include operations through february 28 , 2018 . 37 consolidated financial results year ended december 31 , 2019 compared to year ended december 31 , 2018 revenue revenue increased by $ 85.6 million as a result of a 5 % increase in gold ounces sold combined with a 10 % increase in average realized gold prices and the inclusion of full-year sales from the jualin deposit at kensington and silvertip partially offset by 4 % fewer silver ounces sold . the company sold 367,650 gold ounces , 11.9 million silver ounces , 18.2 million zinc pounds and 16.5 million lead pounds compared to 350,508 gold ounces , 12.4 million silver ounces , 4.4 million zinc lead pounds and 2.6 million lead pounds in the prior year . gold contributed 69 % of sales , silver contributed 27 % , zinc contributed 2 % and lead contributed 2 % , compared to 68 % of sales from gold , 31 % from silver , 1 % from zinc and less than 1 % from lead . the following table summarizes consolidated metal sales : replace_table_token_21_th costs applicable to sales costs applicable to sales increased primarily due to higher sales volume at kensington , the inclusion of full-year sales from the jualin deposit at kensington and silvertip , a $ 64.6 million write-down of inventory at silvertip and higher unit costs at palmarejo , rochester and wharf , primarily due to lower production . for a complete discussion of costs applicable to sales , see results of operations below . amortization amortization increased $ 50.4 million , or 39 % , resulting from the inclusion of full-year sales at silvertip and higher sales at kensington . expenses general and administrative expenses increased $ 3.1 million , or 10 % , primarily due to higher employee related expenses and higher legal fees .

the technical nonwovens segment negatively impacted consolidated gross margin by approximately140 basis points , principally driven by commodity inflation and unfavorable product mix , partially offset by increased customer pricing , while the performance materials segment favorably impacted consolidated gross margin by approximately 90 basis points from improved segment mix , driven by higher margin sales from the acquired interface business since august 31 , 2018. operating income was $ 49.2 million , or 6.3 % of net sales in 2018 , compared to $ 66.2 million , or 9.5 % of net sales in 2017 ; operating margin declined due to the negative impact of lower gross margin of 400 basis points , partially offset by a 70 basis point reduction in selling , product development and administrative expenses . operating income in 2018 was favorably impacted by decreased cash incentive and stock compensation expenses of approximately $ 4.9 million , or 60 basis points , compared to 2017. the following items are included in operating income for 2018 and 2017 and impact the comparability of each year : replace_table_token_4_th net income was $ 34.9 million , or $ 2.02 per diluted share in 2018 , compared to $ 49.3 million , or $ 2.85 per diluted share in 2017 . story_separator_special_tag gross profit replace_table_token_7_th the decrease in gross margin by 400 basis points in 2018 compared to 2017 was primarily attributable to the thermal acoustical solutions segment which negatively impacted consolidated gross margin by approximately 350 basis points , primarily related to increased labor and overhead expenses of approximately 180 basis points , including outsourcing costs , overtime associated with new product launch activity and expedited freight expenses for customer deliveries caused by equipment downtime and other inefficiencies . increased commodity costs , primarily aluminum and tariffs , were approximately 80 basis points . finally , lower customer pricing on certain automotive parts reduced gross margin by approximately 40 basis points in 2018 compared to 2017. the technical nonwovens segment negatively impacted consolidated gross margin by approximately 140 basis points , primarily related to higher raw material commodity costs , unfavorable product mix and incremental restructuring related expenses of $ 1.5 million partially offset by the absence of the negative impact of $ 1.1 million of purchase accounting adjustments relating to inventory step up in 2017. the performance materials segment favorably impacted consolidated gross margin by approximately 90 basis points , driven by favorable segment mix , primarily related to the interface acquisition on august 31 , 2018 , as the performance materials segment was a larger proportion of consolidated net sales at greater gross margin than the other two segments in 2018 compared to 2017. the decrease in gross margin by 110 basis points in 2017 compared to 2016 was primarily attributable to the thermal acoustical solutions which negatively impacted consolidated gross margin by approximately 80 basis points , primarily related to increased overhead expenses including operational inefficiencies , increased raw material commodity costs and reduced customer pricing in 2017 compared to 2016. the technical nonwovens segment negatively impacted consolidated gross margin by approximately 20 basis points , primarily related to lower customer pricing , unfavorable mix and restructuring expenses , partially offset by lower raw material commodity costs and decreased purchase accounting adjustments relating to inventory step-up in 2017 compared to 2016. additionally , the performance materials segment negatively impacted consolidated gross margin by approximately 10 basis points primarily related to unfavorable mix on higher margin termination buys in 2016 and lower customer pricing in 2017. selling , product development and administrative expenses replace_table_token_8_th selling , product development and administrative expenses in 2018 increased by $ 6.3 million , but decreased 70 basis points as a percentage of net sales , compared to 2017. this increase in expenses was primarily related to the acquisition of interface on august 31 , 2018 , which contributed $ 10.6 million of expense during 2018 , including $ 3.4 million of intangible assets amortization expense . this increase was partially offset by decreased legacy selling , product development and administrative expenses of $ 4.3 million in 2018 compared to 2017. included in this decrease was lower cash incentive and stock compensation expense of $ 5.2 million , based on the company 's lower achievement of financial targets under its incentive programs , the absence of $ 1.6 million of expenses associated with the combination of the company 's former t/a metals and t/a fibers segments in 2017 , reduced corporate consulting expenses of $ 1.1 million and the absence of a 2017 non-cash long-lived asset impairment charge of $ 0.8 million in the performance materials segment . partially offsetting those reduced 2018 expenses was greater strategic initiatives expenses of $ 2.9 million , primarily related to the acquisition of interface , higher intangibles amortization expense of $ 1.4 million from tnw segment acquisitions and increased salaries and benefits of $ 0.7 million in 2018 compared to 2017. selling , product development and administrative expenses in 2017 increased by $ 13.8 million , or 16.6 % , compared to 2016. this increase was primarily related to the technical nonwovens segment due to the acquisitions of texel on july 7 , 2016 and gutsche on december 31 , 2016 resulting in an additional $ 13.0 million of selling , product development and administrative expenses , which included $ 2.9 million of incremental intangible amortization expense from tnw segment acquisitions . story_separator_special_tag this decrease to gross margin was partially offset by a $ 2.7 million decrease in selling product development and administrative expenses , or a 120 basis points decrease as a percentage of net sales , due to the absence of $ 1.2 million of expenses associated with the combination of the company 's former t/a metals and t/a fibers segments in 2017 , lower salaries and sales commissions of $ 0.6 million , primarily from savings realized on the segment combination , lower computer maintenance and support expenses of $ 0.4 million and decreased other administrative costs of $ 0.5 million in 2018 compared to 2017. segment net sales increased by $ 20.9 million , or 6.5 % , in 2017 compared to 2016. parts net sales increased by $ 20.2 million , or 6.8 % , in 2017 compared to 2016 , primarily due to increased global demand on lydall 's existing and new platforms . foreign currency translation had a favorable impact on parts net sales of $ 1.4 million , or 0.5 % , in 2017 compared to 2016. tooling net sales increased $ 0.7 million , or 3.1 % , compared to 2016 due to the timing of new product launches . foreign currency translation had a favorable impact on tooling sales of $ 0.3 million , or 1.1 % , in 2017 compared to 2016. the thermal acoustical solutions segment reported 2017 operating income of $ 53.1 million , or 15.5 % , of segment net sales , compared to $ 53.1 million , or 16.5 % of net sales in 2016. the decrease in operating margin of 100 basis 24 points was due to lower gross margin of 180 basis points due to higher raw material commodity costs , reduced customer pricing and increased overhead expenses including operational inefficiencies in 2017 compared to 2016. the decrease in gross margin was partially offset by lower segment selling , product development and administrative expenses of $ 1.0 million , or 80 basis points as a percentage of net sales , primarily due to the absence of a $ 3.5 million , or 110 basis points , settlement charge in the fourth quarter of 2016 in connection with a german cartel office investigation . this decrease to selling , product development and administrative expenses was partially offset by increased salaries of $ 1.2 million and $ 1.2 million of expenses associated with the combination of the company 's former t/a metals and t/a fibers segments in 2017 compared to 2016. overall , 2017 operating income and operating margin were negatively impacted by consolidation expenses of $ 1.4 million , or 40 basis points , and severance expenses of $ 0.7 million , or 20 basis points . foreign currency translation had a minimal impact on operating income in 2017 compared to 2016. corporate office expenses the decrease in corporate office expenses of $ 1.9 million in 2018 compared to 2017 was primarily due to decreased stock and cash incentive compensation expenses of $ 3.4 million based on lower achievement of certain financial targets . also , consulting expenses were lower in 2018 by $ 1.2 million , partially offset by increased corporate strategic initiatives expenses of $ 2.7 million , primarily related to acquisitions , in 2018 compared to 2017. the decrease in corporate office expenses of $ 0.5 million in 2017 compared to 2016 was primarily due to decreased strategic initiatives expenses of $ 2.8 million , partially offset by increased consulting expenses of $ 1.3 million , primarily related to organic growth initiatives , higher salaries of $ 0.5 million , increased recruiting expenses of $ 0.3 million and increases in other administrative expenses of $ 0.3 million in 2017 compared to 2016. liquidity and capital resources replace_table_token_14_th the company assesses its liquidity in terms of its ability to generate cash to fund operating , investing and financing activities . the principal source of liquidity is operating cash flows . in addition to operating cash flows , other significant factors that affect the overall management of liquidity include capital expenditures , investments in businesses , strategic transactions , income tax payments , debt service payments , outcomes of contingencies , foreign currency exchange rates , foreign cash repatriation and pension funding . the company manages worldwide cash requirements by considering available funds among domestic and foreign subsidiaries . the company expects to finance its 2019 operating cash and capital spending requirements from existing cash balances , cash provided by operating activities and through borrowings under the amended credit facility , as needed . at december 31 , 2018 , the company held $ 49.2 million in cash and cash equivalents , including $ 14.0 million in the u.s. with the remaining held by foreign subsidiaries . operating cash flows net cash provided by operating activities in 2018 was $ 44.7 million compared with $ 62.9 million in 2017. in 2018 , net income and non-cash adjustments were $ 72.9 million compared to $ 78.7 million in 2017. net operating assets and liabilities in 2018 increased $ 28.2 million since december 31 , 2017 , compared to an increase in net operating assets 25 and liabilities in 2017 of $ 15.8 million since december 31 , 2016. the increase in net operating assets and liabilities in 2018 was primarily due to increases of $ 7.1 million in accounts receivable and $ 6.0 million in inventories and a decrease of $ 5.1 million in accounts payable . also , contributions to the company 's defined benefit pension plans increased by $ 3.9 million in 2018 compared to 2017 for total contributions of $ 7.5 million in 2018. the increase in accounts receivable was primarily due to higher net sales within the performance materials segment as well as timing of customer receipts across segments . the increase in inventory was principally due to higher raw material inventories , primarily associated with strategic purchases within the technical nonwovens segment

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity cash was $ 49.2 million at december 31 , 2018 , compared to $ 59.9 million at december 31 , 2017. net cash provided by operations was $ 44.7 million in 2018 compared to $ 62.9 million in 2017. lower operating income and working capital expansion drove lower cash generation . on august 31 , 2018 , in connection with the interface acquisition , the company amended and restated its $ 175 million senior secured revolving credit agreement ( `` amended credit agreement '' ) and increased the available borrowing from $ 175 million to $ 450 million , added three additional lenders and extended the maturity date from july 7 , 2021 to august 31 , 2023. under the terms of the amended credit agreement , the lenders provided a term loan commitment of $ 200 million and revolving loans of up to $ 250 million . the amended credit agreement may be increased by an aggregate amount not to exceed $ 150 million through an accordion feature , subject to specified conditions . as of december 31 , 2018 , there was approximately $ 108 million of availability under the credit agreement . the company 's cash from operations and capacity under its amended credit agreement provide for sufficient cash availability to support organic growth programs and fund capital investments . outlook entering 2019 , demand is generally steady and the businesses are experiencing a stabilization of key raw material costs , but the company continues to monitor the uncertainties around governmental actions impacting global trade regulations . the company is executing on the integration of interface and expects consolidated ebitda growth in the first quarter of 2019 compared to the first quarter of 2018. with focused cost control and margin improvement plans across the businesses , and expected year over year raw material cost reductions , the company currently expects full year 2019 ebitda margin expansion .

overview activity for our accommodations and offshore products segments is primarily tied to the long-term outlook for commodity prices . in contrast , activity for our well site services and tubular services segments responds to shorter-term movements in oil and natural gas prices and , specifically , changes in north american drilling and completion activity . other factors that can affect our business and financial results include the general global economic environment and regulatory changes in the united states and internationally . generally , our oil sands and mining accommodations customers are making multi-billion dollar investments to develop their prospects , which have estimated reserve lives of 10 to in excess of 30 years and , consequently , these investments are dependent on those customers ' longer-term view of commodity demand and prices . oil sands development activity has increased in the past year and has had a positive impact on our accommodations segment . recent announcements of new and expanded oil sands projects will create the opportunity for extensions of existing accommodations contracts and incremental accommodations contracts for us in canada . in addition , several major oil companies and national oil companies have announced joint ventures to develop oil sands leases that should bode well for future oil sands investment and , as a result , demand for oil sands accommodations . our australian accommodations business is significantly influenced by increased metallurgical coal demand , especially from japan , china and india . metallurgical coal prices in china have strengthened recently and chinese metallurgical coal demand is expected to increase in 2012 compared to 2011 and could result in another annual metallurgical coal import record . we are expanding our australian accommodations capacity to meet this increasing demand . accommodations deployed to support onshore u.s. drilling activity in several of the active shale play regions have also favorably contributed to our results . our offshore products segment provides highly engineered products for offshore oil and natural gas drilling and production systems and facilities . sales of our offshore products and services depend primarily upon development of infrastructure for offshore production systems and subsea pipelines , repairs and upgrades of existing offshore drilling rigs and construction of new offshore drilling rigs and vessels . in this segment , we are particularly influenced by global deepwater drilling and production spending , which are driven largely by our customers ' longer-term outlook for oil and natural gas prices . in our well site services business segment , we predominantly provide rental tools and services and , to a lesser extent , land drilling services . our rental tools and services business provides equipment and service personnel utilized in the completion and initial production of new and recompleted wells . activity for the rental tools and services business is dependent primarily upon the level and complexity of drilling , completion and workover activity throughout north america . well complexity has increased as the number of productive zones completed in connection with horizontal drilling has increased . demand for our drilling services is driven by land drilling activity in our primary drilling markets in west texas , where we primarily drill oil wells , and in the rocky mountains area in the u.s. where we drill both oil and natural gas wells . through our tubular services segment , we distribute a broad range of casing and tubing used in the drilling and completion of oil and natural gas wells primarily in north america . accordingly , sales and gross margins in our tubular services segment depend upon the overall level of drilling activity , the types of wells being drilled , movements in global steel input prices and the overall industry level of octg inventory and pricing . historically , tubular services ' gross margin generally expands during periods of rising octg prices and contracts during periods of decreasing octg prices . 41 index to financial statements we have a diversified product and service offering , which has exposure to activities conducted throughout the oil and gas cycle . demand for our tubular services , land drilling and rental tools and services businesses is highly correlated to changes in the drilling rig count in the united states and , to a much lesser extent , canada . the table below sets forth a summary of north american rig activity , as measured by baker hughes incorporated , for the periods indicated . replace_table_token_8_th the rig count fell precipitously in the first half of 2009 in response to the impact of the global economic downturn which negatively impacted energy prices but has substantially recovered from its june 2009 low . the average north american rig count for the year ended december 31 , 2011 increased by 406 rigs , or 21 % , compared to the average for the year ended december 31 , 2010. a factor that influences the financial results for our accommodations segment is the exchange rate between the u.s. dollar and the canadian dollar and , to a lesser extent , the exchange rate between the u.s. dollar and the australian dollar . our accommodations segment has derived a majority of its revenues and operating income in canada and , more recently , australia . these revenues and profits are translated into u.s. dollars for u.s. gaap financial reporting purposes . for the year 2011 , the canadian dollar was valued at an average exchange rate of u.s. $ 1.01 compared to u.s. $ 0.97 for 2010 , an increase of 4 % . this strengthening of the canadian dollar had a positive impact on the translation of earnings generated from our canadian subsidiaries and , therefore , the financial results of our accommodations segment . for the year 2011 , the australian dollar was valued at average exchange rate of u.s. $ 1.03 compared to u.s. $ .92 for 2010 , an increase of 12 % . story_separator_special_tag consolidated revenues increased $ 303.7 million , or 14 % , in 2010 compared to 2009. our well site services segment revenues increased $ 170.9 million , or 56 % , in 2010 compared to 2009. this increase was primarily due to increased rental tools and services revenues and significantly increased rig utilization in our drilling services operations . our rental tools and services revenues increased $ 108.9 million , or 47 % , primarily due to increased demand for completion services with the increase in the u.s. rig count , a more favorable mix of higher value equipment , increased equipment utilization and improved pricing . our drilling services revenues increased $ 62.0 million , or 87 % , in 2010 compared to 2009 primarily as a result of increased utilization of our rigs . utilization of our drilling rigs increased from an average of approximately 37 % in 2009 to an average of approximately 71 % in 2010 . 46 index to financial statements our accommodations segment reported revenues in 2010 that were $ 56.3 million , or 12 % , above 2009. the increase in accommodations revenue resulted from increased activity at our large accommodation facilities supporting oil sands development activities in northern alberta , canada , the expansion of two of these facilities and the strengthening of the canadian dollar versus the u.s. dollar , partially offset by a $ 62.7 million decrease in third-party accommodations manufacturing revenues . our offshore products segment revenues decreased $ 80.5 million , or 16 % , in 2010 compared to 2009. this decrease was primarily due to lower starting backlog levels , a decrease in subsea pipeline revenues and rig and vessel equipment revenues driven principally by reductions in our customers ' spending caused by deferrals and delays of deepwater development projects and capital upgrades . tubular services segment revenues increased $ 157.0 million , or 19 % , in 2010 compared to 2009. this increase was a result of an increase in tons shipped from 330,800 in 2009 to 502,800 in 2010 driven by increased drilling activity , an increase of 172,000 tons , or 52 % , partially offset by a 22 % decrease in realized revenues per ton shipped in 2010. cost of sales and service . our consolidated cost of sales increased $ 234.1 million , or 14 % , in 2010 compared to 2009. this increase was primarily a result of increased cost of sales at our tubular services segment of $ 161.2 million , or 21 % , an increase at our well site services segment of $ 97.8 million , or 43 % , and an increase at our accommodations segment of $ 35.7 million , or 13 % , partially offset by a decrease in cost of sales at our offshore products segment of $ 60.6 million , or 16 % . our consolidated gross margin as a percentage of revenues was 22 % in both 2010 and 2009. our well site services segment cost of sales increased $ 97.8 million , or 43 % , in 2010 compared to 2009 as a result of a $ 50.5 million , or 30 % , increase in rental tools and services cost of sales and a $ 47.3 million , or 81 % , increase in drilling services cost of sales . our well site services segment gross margin as a percentage of revenues increased from 25 % in 2009 to 32 % in 2010. our rental tools and services gross margin as a percentage of revenues increased from 28 % in 2009 to 36 % in 2010 primarily due to a more favorable mix of higher value rentals and improved pricing along with improved fixed cost absorption as a result of increased rental tool utilization . our drilling services gross margin as a percentage of revenues increased from 18 % in 2009 to 21 % in 2010 primarily due to the increase in drilling activity levels . our accommodations segment cost of sales increased $ 35.7 million , or 13 % , in 2010 compared to 2009 primarily as a result of increased activity at our large accommodation facilities supporting oil sands development activities in northern alberta , canada , the expansion of two of these facilities and the strengthening of the canadian dollar versus the u.s. dollar , partially offset by a decrease in third-party accommodations manufacturing and installation costs . our accommodations segment gross margin as a percentage of revenues was 42 % in 2009 and 2010. our offshore products segment cost of sales decreased $ 60.6 million , or 16 % , in 2010 compared to 2009 primarily due to a decrease in subsea pipeline and rig and vessel equipment costs . our offshore products segment gross margin as a percentage of revenues was 26 % in both 2009 and 2010. tubular services segment cost of sales increased $ 161.2 million , or 21 % , in 2010 compared to 2009 primarily as a result of an increase in tons shipped driven by increased drilling activity , partially offset by lower priced octg inventory being sold . our tubular services segment gross margin as a percentage of revenues decreased from 7 % in 2009 to 5 % in 2010 primarily due to a larger portion of service related costs expensed on certain program work . selling , general and administrative expenses . sg & a expense increased $ 11.6 million , or 8 % , in 2010 compared to 2009 due primarily to an increased accrual for incentive bonuses , increased salaries , wages and benefits and an increase in our accommodations sg & a expenses as a result of the strengthening of the canadian dollar versus the u.s. dollar . sg & a was 6.3 % of revenues in 2010 compared to 6.6 % of revenues in 2009. depreciation and amortization . depreciation and amortization expense increased $ 6.1 million , or 5 % , in 2010

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources our primary liquidity needs are to fund capital expenditures , which in the past have included expanding our accommodations facilities , expanding and upgrading our offshore products manufacturing facilities and equipment , replacing and increasing rental tool assets , adding and upgrading drilling rigs , funding new product development and general working capital needs . in addition , capital has been used to fund strategic business acquisitions . our primary sources of funds have been cash flow from operations and proceeds from borrowings . see note 8 to the consolidated financial statements included in this annual report on form 10-k. cash totaling $ 215.9 million was provided by operations during the year ended december 31 , 2011 compared to cash totaling $ 230.9 million provided by operations during the year ended december 31 , 2010. during 2011 , $ 340.3 million was used to fund working capital , primarily due to increased investments in receivables and inventory in our tubular services and offshore products segments due to higher activity levels . during 2010 , $ 100.0 million was used to fund working capital , primarily due to increased investments in working capital for our tubular services and rental tools and services businesses and lower taxes payable , partially offset by a reduction in accounts receivable at our offshore products segment . cash was used in investing activities during the years ended december 31 , 2011 and 2010 in the amount of $ 489.0 million and $ 889.7 million , respectively . capital expenditures totaled $ 487.5 million and $ 182.2 million during the years ended december 31 , 2011 and 2010 , respectively . capital expenditures in both years consisted principally of purchases and installation of assets for our accommodations and well site services segments , and in particular for accommodations investments made in support of canadian oil sands developments and , in 2011 , australian mining related accommodations facilities .

this chart provides guidance to hcps and patients as to which options exist , and to payers ( including pharmacy benefit managers ) as to which methods they need to cover . in june 2020 , medi-span and first databank , two major drug information databases that payers consult for pricing and product information , granted phexxi a new classification in their databases and pricing compendia as the first and only “ vaginal ph modulator . ” we believe that a new category of contraception should be established for vaginal ph modulators such as phexxi to reflect this unique mechanism of action , and are working with the office of women 's health under the health resources and services administration to have the birth control chart updated accordingly . phexxi 's listing with medi-span and first databank , coupled with our timely response to payer clinical requests and our clinical presentation , enabled us to achieve coverage for 55 % of commercial lives at launch in september 2020. as of february 2021 , we have coverage for approximately 55.1 % of u.s. commercial lives , including approximately 8 million lives covered at no out-of-pocket cost and approximately 13.7 million lives covered under our december 2020 contract award from the u.s. department of veterans affairs . we continue to work to increase the number of lives covered . 74 additionally , on january 1 , 2021 , the u.s. medicaid population gained access to phexxi through evofem 's participation in the centers for disease control and prevention 's ( cdc ) medicaid national drug rebate program . medicaid provides health coverage to approximately 68 million members . we continue to monitor various non-financial metrics that we believe may be relevant in assessing our commercialization strategies for phexxi . these metrics include unit shipments from our warehouse to wholesale distributors , our wholesale distributors ' shipments to retail pharmacies , the number of hcps prescribing phexxi , the number of phexxi prescriptions and an increase in overall awareness of phexxi measured by monthly surveys conducted by an independent third-party research group among women at risk for pregnancy . available prescription data as of and through the week of february 12 , 2021 , indicates that more than 2,650 unique hcps have prescribed phexxi since its commercial launch , with approximately 4,250 prescriptions for the year ended december 31 , 2020 and approximately 2,900 prescriptions from january 1 , 2021 through february 12 , 2021. from commercial launch in september 2020 through january 2021 , monthly prescriptions for phexxi and the number of hcps prescribing phexxi have increased by an average of approximately 58 % and 50 % , respectively , on a monthly basis . additionally , during the year ended december 31 , 2020 and from january 1 , 2021 through february 26 , 2021 , approximately 6,350 and 6,430 units , respectively , were distributed by wholesalers to retail pharmacies . from february 1 , 2021 through february 26 , 2021 , we sold approximately 3,800 units of phexxi , our highest monthly sales figure since launch . evo100 : our sti preventive product candidate our lead product candidate , evo100 , is an antimicrobial vaginal gel under evaluation for the prevention of chlamydia and gonorrhea in women - two of the most pervasive stis in the united states . currently , there are no fda‑approved prescription products for the prevention of either of these commonly reported sexually transmitted infections ( stis ) . in december 2019 , we reported positive top-line results from our clinical trial amprevence . the trial enrolled 860 women at 50 sites in the united states for a four-month intervention period followed by a one-month follow-up period . amprevence met both its primary and secondary endpoints of reducing the risk of chlamydia and gonorrhea infection , respectively . in this landmark trial , the infection rate of chlamydia among women who used evo100 for the four-month study period was 4.9 % ( n=14/288 ) compared to 9.8 % among those who used placebo for four months ( n=28/287 ) ( p=0.024 ) , a relative risk reduction of 50 % in the primary endpoint . among the reported cases of gonorrhea infection , the infection rate was 0.7 % in the evo100 arm ( n=2/280 ) , compared to 3.2 % in the placebo arm ( n=9/277 ) ( p=0.03 ) , a relative risk reduction of 78 % in the secondary endpoint . the study further demonstrated that evo100 was generally safe and well tolerated . the number of adverse events was similar across both arms ( 7.2 % for evo100 and 7.5 % for placebo ) and no serious treatment-related adverse events were reported . in october 2020 , we initiated the phase 3 evoguard clinical trial . this randomized , placebo-controlled pivotal trial is designed to enroll 1,730 women with a prior chlamydia or gonorrhea infection and who are at risk for future infection . participants are enrolled for a 16-week interventional phase followed by a one-month follow-up period . we expect to complete enrollment in the fourth quarter of 2021 , and to report top-line evoguard results in mid-2022 . according to the cdc , any sexually active person can be infected with chlamydia and or gonorrhea , and many are asymptomatic . despite the cdc recommendation for condom use to prevent stis , u.s. rates of infection with chlamydia and gonorrhea climbed in 2018 for the fifth consecutive year . based on these reports , an estimated 78 million women 18-65 years of age who are sexually active in the united states could be at a risk for one of these stis . in december 2020 , the cdc updated its treatment guidelines for gonorrhea infections due to data demonstrating increasing resistance to the antibiotic azithromycin . the need for expanded preventive measures is clear . story_separator_special_tag the fair value of the baker notes issued , and the change in fair value of the baker notes at the reporting date , were determined using a monte carlo simulation-based model . monte carlo simulation was used to take into account several embedded features and factors including the future value of our common stock , a potential change of control event , the maturity term of the baker notes , the probability of an event of voluntary conversion of the baker notes , exercise of the put right , and exercise of our call right . fair value of stock options and warrants 79 the fair value of stock options and warrants issued in various financing transactions in connection with the merger and post- merger , the change in fair value of warrants as a result of modifications to these instruments , and mark-to-market adjustments for liability classified warrants were determined using the black-scholes option-pricing model based on the applicable assumptions , which include the exercise price of these options and warrants , time to expiration , expected volatility of our peer group of companies , risk-free interest rate and expected dividend . fair value of purchase rights the fair value of the rights granted to the purchasers to optionally purchase from the company up to $ 10.0 million of baker notes ( the baker purchase rights ) at the purchasers ' discretion at any time prior to the company receiving at least $ 100.0 million in aggregate gross proceeds from one or more sales of equity securities issued in connection with the baker bros. purchase agreement , as described in note 5- convertible notes , and the change in fair value of baker purchase rights upon exercise of such rights , was determined as the maximum of ( i ) the fair value of rights to purchase the additional $ 10.0 million baker notes and ; ( ii ) the fair value of the shares of on as-if converted basis , which was determined by the lattice model . the fair value of rights to purchase the accompanying 2,049,180 baker warrants ( as defined below ) was valued using a geske option-pricing model . the geske model was based on the applicable assumptions , including the underlying stock price , warrant exercise price , the exercise price of the rights to purchase the baker warrants , the term of the baker warrants , the term of the rights to purchase the baker warrants , expected volatility of the company 's peer group , risk-free interest rate and expected dividend . the fair value of the rights provided to the 2019 purchasers ( as defined below ) to optionally purchase from the company to issue and sell to each 2019 purchaser the shares of common stock and warrants as specified in the securities purchase agreement , dated april 10 , 2019 , with pdl biopharma , inc. , a delaware corporation ( pdl ) , funds discretionally managed by invesco ltd. ( invesco ) and funds managed by woodford investment management ltd. ( wim , collectively with invesco and pdl , the 2019 purchasers ) during the period beginning on april 11 , 2019 and ending on june 10 , 2019 ( the private placement purchase rights ) , and the change in fair value of the private placement purchase rights on june 5 , 2019 , was determined using a combination of a lattice model and black-scholes option-pricing model . the lattice model was used to determine the future value of our common stock . the black-scholes option-pricing model was based on the applicable assumptions , including the future value of the company 's common stock as determined by the lattice model , warrant exercise price , time to expiration , expected volatility of our peer group , risk-free interest rate and expected dividend . inventories inventories , consisting of purchased materials , direct labor and manufacturing overheads , are stated at the lower of cost , or net realizable value . cost is determined on a first-in , first-out basis . net realizable value is the estimated selling price in the ordinary course of business , less reasonably predictable costs of completion , disposal , and transportation . at each balance sheet date , we evaluate ending inventories for excess quantities , obsolescence , or shelf-life expiration . the evaluation includes an analysis of our current and future strategic plans , anticipated future sales , the price projections of future demand , and the remaining shelf life of goods on han d. to the extent that we determine there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for us to reasonably expect that it can sell those products prior to their expiration , we adjust the carrying value to estimated net realizable value . results of operations year ended december 31 , 2020 compared to year ended december 31 , 2019 ( in thousands ) : net product sales replace_table_token_2_th phexxi was approved in may 2020 , and commercially launched in september 2020. net product sales were $ 0.4 million for the year ended december 31 , 2020 . 80 cost of goods sold replace_table_token_3_th cost of goods sold was $ 0.5 million for the year ended december 31 , 2020 , which includes a $ 0.1 million one-time charge related to product labelling rework recorded as scrap costs . research and development expenses replace_table_token_4_th the overall decrease in research and development expenses was due to a $ 3.7 million reduction in outside services associated with the phexxi new drug application for the prevention of pregnancy that was resubmitted to the fda in the fourth quarter of 2019 and a $ 3.5 million reduction in clinical trial costs associated with the completion of the clinical phases of ampower and amprevence in december 2018 and 2019 , respectively . these aggregated decreases are partially offset by a $ 0.8

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows from operating activities . during the year ended december 2020 and 2019 , the primary use of cash , cash equivalents and restricted cash has been to fund development and commercialization of our lead product , phexxi , and to support selling and marketing , and general and administrative operations . cash flows from investing activities . during the year ended december 2020 , the change in net cash , cash equivalents and restricted cash provided by investing activities was primarily due to an $ 8.2 million cash inflow from maturities of short-term investments offset by $ 2.3 million in purchases of property and equipment . net cash , cash equivalents and restricted cash used in investing activities for the year ended december 2019 was primarily the purchase of short-term investments of $ 8.2 million . 83 cash flows from financing activities . during the year ended december 2020 , the primary source of cash , cash equivalents and restricted cash was provided from the sale of an aggregate of 31,700,000 shares of common stock for net proceeds of approximately $ 103.7 million , net of underwriting commissions , gross proceeds of $ 50.0 million from issuance of convertible notes and warrants , the sale of 676,656 shares of common stock under the at-the-market program for net proceeds of approximately $ 3.8 million in cash and cash equivalents ( including $ 0.3 million that was included in otherreceivables in the consolidated balance sheet at december 31 , 2019 ) , net of commissions , and the issuance of 150,353 shares of our common stock under the 2019 employee stock purchase plan ( espp ) and exercise of stock options with aggregate proceeds of $ 0.4 million .

on january 9 , 2020 , in connection with , and prior to the completion of , the merger , the company effected a 1-for-40 reverse stock split of its common stock ( the “ reverse stock split ” ) , private artara changed its name from “ artara therapeutics , inc. ” to “ artara subsidiary , inc. ” , and the company changed its name from “ proteon therapeutics , inc. ” to “ artara therapeutics , inc. ” in addition , immediately following the closing of the private placement ( defined below ) , all of the outstanding shares of the company 's series a preferred stock were converted into shares of the company 's common stock . under the terms of the merger agreement , the company issued shares of its common stock ( “ common stock ” ) to private artara 's stockholders , at an exchange ratio of 0.190756 shares of common stock , after taking into account the reverse stock split , for each share of private artara common stock outstanding immediately prior to the merger . the company assumed all of the outstanding and unexercised stock options of private artara , with such stock options now representing the right to purchase a number of shares of common stock equal to 0.190756 multiplied by the number of shares of private artara common stock previously represented by such private artara stock options . the company also assumed all of the unvested private artara restricted stock awards , which were exchanged for a number of shares of common stock equal to 0.190756 multiplied by the number of shares of private artara common stock previously represented by such private artara restricted stock awards and unvested to the same extent as such private artara restricted stock awards and subject to the same restrictions as such private artara restricted stock awards . the shares of common stock issued to the former stockholders of private artara were registered with the u.s. securities and exchange commission ( the “ sec ” ) on a registration statement on form s-4 ( reg . no . 333-234549 ) ( the “ registration statement ” ) . the shares of common stock listed on the nasdaq capital market , previously trading through the close of business on thursday , january 9 , 2020 under the ticker symbol “ prto , ” commenced trading on the nasdaq capital market , on a post-reverse stock split adjusted basis , under the ticker symbol “ tara , ” on friday , january 10 , 2020. the financial information included in this management 's discussion and analysis of financial condition and results of operations is that of the company ( referred to in this management 's discussion and analysis of financial condition and results of operations as “ proteon ” in order to avoid confusion ) prior to the merger because the merger was consummated after the period covered by the financial statements included in this annual report . accordingly , the historical financial information included in this annual report , unless otherwise indicated or as the context otherwise requires , is that of proteon prior to the merger . proteon overview as a result of the merger , our historic business operations ceased and our going forward operations will be those of private artara . accordingly , the results of operations reported for the years ended december 31 , 2019 and 2018 , in this management 's discussion and analysis are not indicative of the results of operations expected in 2020 and future years due to the termination of our historic business operations . 58 prior to the merger , we were a late-stage biopharmaceutical company focused on the development of novel , first-in-class pharmaceuticals to address the needs of patients with renal and vascular disease . we have never been profitable and , as of december 31 , 2019 , we had an accumulated deficit of $ 225.5 million . we incurred net losses of $ 15.0 million and $ 20.7 million for the years ended december 31 , 2019 and 2018 , respectively . prior to the merger , proteon was a biopharmaceutical company that has historically focused on the development of novel , first-in-class pharmaceuticals to address the medical needs of patients with kidney and vascular disease . proteon 's product candidate , vonapanitase , is a recombinant human elastase that proteon developed to improve vascular access outcomes in patients with chronic kidney disease , or ckd , undergoing or preparing for hemodialysis , a lifesaving treatment that can not be conducted without a functioning vascular access . prior to the merger , on march 28 , 2019 , proteon announced that its second phase 3 trial , patency-2 , for vonapanitase in radiocephalic fistulas did not meet its co-primary endpoints of fistula use for hemodialysis ( p=0.328 ) and secondary patency ( p=0.932 ) . the patency-2 clinical trial was the second of two randomized , double-blind phase 3 trials , comparing a 30 microgram dose of investigational vonapanitase to placebo . proteon reported top-line results for the first phase 3 clinical trial , patency-1 , in december 2016 and published these results in the journal of vascular surgery in january 2019. as in patency-1 , the patency-2 clinical trial enrolled patients with chronic kidney disease undergoing surgical creation of a radiocephalic fistula for hemodialysis . patients were randomized 2:1 , vonapanitase to placebo , and were followed for a period of twelve months . in march 2018 , proteon completed enrollment of a total of 603 treated patients at 39 centers in the u.s. and canada . story_separator_special_tag other general and administrative expenses also include professional fees for legal , patent review , consulting and accounting services as well as facility related costs , as well as expenses related to audit , legal , regulatory and tax-related services associated with maintaining compliance with proteon 's nasdaq listing and sec requirements , director and officer liability insurance premiums and investor relations costs associated with being a public company . investment income investment income consists of interest income earned on proteon 's cash , cash equivalents and marketable securities . other income ( expense ) , net other income ( expense ) , net consists of the gain realized from non-cash gains and losses from currency exchange rate fluctuations on transactions or balances denominated in a foreign currency . 60 critical accounting policies and significant judgments and estimates management 's discussion and analysis of proteon 's financial position and results of operations is based on its financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states of america , or gaap . the preparation of financial statements in conformity with gaap requires proteon to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes . on an ongoing basis , proteon evaluates estimates , which include estimates related to clinical trial accruals , stock-based compensation expense , and reported amounts of revenues and expenses during the reported period . proteon bases its estimates on historical experience and other market-specific or other relevant assumptions that proteon believes to be reasonable under the circumstances . actual results may differ materially from those estimates or assumptions . while our significant accounting policies are described in more detail in the notes to our consolidated financial statements and related notes appearing elsewhere in this annual report , we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements . stock-based compensation we issue stock-based awards to employees and non-employees . we account for our stock-based awards in accordance with fasb asc topic 718 , compensation—stock compensation , ( “ asc 718 ” ) . asc 718 requires all stock-based payments to employees , including grants of employee stock options and modifications to existing stock options , to be recognized in the consolidated statements of operations and comprehensive loss based on their fair values . we account for stock-based awards to non-employees in accordance with asc 718 , which requires the fair value of the award to be remeasured at fair value as the award vests . our stock-based awards are subject to service-based vesting conditions . compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award , which is generally the vesting term . compensation expense related to awards to non-employees with service-based vesting conditions is recognized on the then-current fair value at each financial reporting date prior to the measurement date over the associated service period of the award , which is generally the vesting term , using the accelerated attribution method . described below is the methodology we have utilized in measuring stock-based compensation expense . following the consummation of our ipo , stock option values have been determined based on the quoted market price of our common stock . we estimate the fair value of our stock-based awards to employees and non-employees using the black-scholes option pricing model , which requires the input of highly subjective assumptions , including ( i ) the expected volatility of our stock , ( ii ) the expected term of the award , ( iii ) the risk-free interest rate and ( iv ) expected dividends . during 2018 we began to estimate our volatility by using a blend of our stock price history , for the length of time we have market data for our stock and the historical volatility of similar public companies for the expected term of each grant . for these analyses , we select companies with comparable characteristics to ours including enterprise value , risk profiles , position within the industry , and with historical share price information sufficient to meet the expected life of the stock-based awards . we compute the historical volatility data using the daily closing prices for the selected companies ' shares during the equivalent period of the calculated expected term of our stock-based awards . we account for forfeitures as they occur . we estimate the expected life of our employee stock options using the “ simplified ” method , whereby , the expected life equals the average of the vesting term and the original contractual term of the option . the risk-free interest rates for periods within the expected life of the option were based on the u.s. treasury yield curve in effect during the period the options were granted . 61 results of operations comparison of the years ended december 31 , 2019 and 2018 the following table summarizes proteon 's results of operations for the years ended december 31 , 2019 and 2018 ( in thousands ) : replace_table_token_0_th research and development expenses . the following table identifies research and development expenses on both an external and internal basis for the years ended december 31 , 2019 and 2018 ( in thousands ) : replace_table_token_1_th during the year ended december 31 , 2019 , our total research and development expense decreased by $ 5.4 million compared to the year ended december 31 , 2018 primarily due to $ 3.6 million in decreased external expenses . the decrease of $ 3.6 million in external expenses was primarily driven by $ 2.5 million in decreased expenses for our completed clinical trials and $ 1.1 million in decreased expenses for our manufacturing expenses . our internal research and development expenses decreased by $ 1.8 million in

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources overview since our inception and through the year ended december 31 , 2019 , we had received $ 200.1 million in net proceeds comprised of $ 115.5 million from the issuance of private equity securities , $ 7.7 million from the issuance of convertible notes , $ 10.0 million from business development activities , $ 0.2 million from government grants , $ 62.5 million from our ipo and $ 4.2 million from the sale of common stock under our now-terminated atm program with cowen and company , llc . 62 liquidity as of december 31 , 2019 , the company had cash and cash equivalents of $ 6.2 million . the company had an accumulated deficit of $ 225.5 million as of december 31 , 2019. in connection with the merger , the company consummated the private placements , raising gross proceeds of $ 42.5 million . upon the consummation of the merger and the private placements , the post-merger combined company is expected to have cash of approximately $ 40.7 million . the company expects there will be no further material near term cash expenditures to fund the company 's vonapanitase clinical trials . from the date of the merger , the activities of the company will become those of private artara . the company is in the business of developing biopharmaceuticals , has no current or near term revenues . the company is incurring substantial clinical and other costs in its drug development efforts .

for the year ended december 31 , 2018 , we had no material lease renewals . 34 during 2019 , we will continue to invest funds toward the achievement of entitlements , permits , and maps for our land and for master project infrastructure and vertical development within our active commercial and industrial development . securing entitlements for our land is a long , arduous process that can take several years and often involves litigation . during the next few years , our net income will fluctuate from year-to-year based upon , among other factors , commodity prices , production within our farming segment , the timing of land sales and the leasing of land and or industrial space within our industrial developments , and equity in earnings realized from our unconsolidated joint ventures . this management 's discussion and analysis of financial condition and results of operations provides a narrative discussion of our results of operations . it contains the results of operations for each operating segment of the business and is followed by a discussion of our financial position . it is useful to read the business segment information in conjunction with note 16 ( reporting segments and related information ) of the notes to consolidated financial statements . critical accounting policies the preparation of our consolidated financial statements in accordance with generally accepted accounting principles in the united states , or gaap , requires us to make estimates and judgments that affect the reported amounts of assets , liabilities , revenues and expenses , and related disclosure of contingent assets and liabilities . we consider an accounting estimate to be critical if : ( 1 ) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made , and ( 2 ) changes in the estimates that are likely to occur from period to period , or use of different estimates that we reasonably could have used in the current period , would have a material impact on our financial condition or results of operations . on an on-going basis , we evaluate our estimates , including those related to revenue recognition , impairment of long-lived assets , capitalization of costs , allocation of costs related to land sales and leases , stock compensation , our future ability to utilize deferred tax assets , and defined benefit retirement plans . we base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . management has discussed the development and selection of these critical accounting estimates with the audit committee of our board of directors and the audit committee has reviewed the foregoing disclosure . in addition , there are other items within our financial statements that require estimation , but are not deemed critical as defined above . changes in estimates used in these and other items could have a material impact on our financial statements . see also note 1 ( summary of significant accounting policies ) of the notes to consolidated financial statements , which discusses accounting policies that we have selected from acceptable alternatives . we believe the following critical accounting policies reflect our more significant judgments and estimates used in the preparation of the consolidated financial statements : revenue recognition – the company 's revenue is primarily derived from lease revenue from our rental portfolio , royalty revenue from mineral leases , sales of farm crops , sales of water , and land sales . revenue from leases with rent concessions or fixed escalations is recognized on a straight-line basis over the initial term of the related lease unless there is a considerable risk as to collectability . the financial terms of leases are contractually defined . lease revenue is not accrued when a tenant vacates the premises and ceases to make rent payments or files for bankruptcy . royalty revenues are contractually defined as to the percentage of royalty and are tied to production and market prices . our royalty arrangements generally require payment on a monthly basis with the payment based on the previous month 's activity . we accrue monthly royalty revenues based upon estimates and adjust to actual as we receive payments . from time to time the company sells easements over its land . the easements are either in the form of rights of access granted for such things as utility corridors or are in the form of conservation easements that generally require the company to divest its rights to commercially develop a portion of its land , but do not result in a change in ownership of the land or restrict the company from continuing other revenue generating activities on the land . sales of conservation easements are accounted for in accordance with the five-step model under accounting standards codification topic 606 , or asc 606. the five-step model requires that we ( i ) identify the contract with the customer , ( ii ) identify the performance obligations in the contract , ( iii ) determine the transaction price , including variable consideration to the extent that it is probable that a significant future reversal will not occur , ( iv ) allocate the transaction price to the respective performance obligations in the contract , and ( v ) recognize revenue when ( or as ) we satisfy the performance obligation . since conservation easements generally do not impose any significant continuing performance obligations on the company , revenue from conservation easement sales are generally recognized in the period the sale has closed and consideration has been received . story_separator_special_tag the company and majestic have successfully leased 67 % of this distribution facility prior to its completion , with the tenant taking occupancy in q4 of 2019. this new construction is building on the success in 2018 of fully leasing a 480,000 square foot building in a partnership with majestic . a potential disadvantage to our development strategy is our distance from the ports of los angeles and long beach in comparison to the warehouse/distribution centers located in the inland empire , a large industrial area located east of los angeles , which continues its expansion eastward beyond riverside and san bernardino , to include perris , moreno valley , and beaumont . as development in the inland empire continues to move east and farther away from the ports , our potential disadvantage of our distance from the ports is being mitigated . strong demand for large distribution facilities is driving development farther east in a search for large entitled parcels . during 2018 , vacancy rates in the inland empire stayed flat at 3.9 % compared to 3.7 % in 2017. this industrial market continues to see available supply remain at historic low levels . construction declined slightly during the fourth quarter with 20.5 million square feet under construction compared to 20.7 million in 2017. this new supply is currently meeting growing industrial demand . the low vacancy rates have led to a year-over-year increase in lease rates of 7.3 % within the inland empire . as lease rates increase in the inland empire , we may begin to have greater pricing advantages due to our lower land basis . during 2018 , vacancy rates in the northern los angeles industrial market , which includes the san fernando valley and santa clarita valley , approximated 1.6 % . rents have been increasing for the past six years and will likely continue to rise in future years as the vacancy rate is at historic lows and quality industrial space remains hard to find . during 2018 , average asking rents increased 8.5 % compared with 2017 , which have surpassed the historical peak which was seen in late 2007. industrial demand remains high and infill industrial demand remains higher still . future quarters will likely see greater construction activity as rents hit new highs and vacancy rates are at historic lows . demand for industrial space in this market will also continue to be driven by domestic and global consumption levels . as industrial vacancy rates are at historic lows , industrial users seeking larger spaces are having to go further north into neighboring kern county and particularly , the trcc which has attracted increased attention as market conditions continue to tighten . in 2018 , the los angeles and long beach port container traffic recorded its highest container total ever with 17.54 million twenty-foot equivalent units , or teu 's , up 3.8 % from 2017. teu is a measure of a ship 's cargo carrying capacity . the dimensions of one teu are equal to that of a standard shipping container measuring 20 feet long by 8 feet tall . we expect the commercial/industrial segment to continue to experience costs , net of amounts capitalized , primarily related to professional service fees , marketing costs , commissions , planning costs , and staffing costs as we continue to pursue development opportunities . these costs are expected to remain consistent with current levels of expense with any variability in the future tied to specific absorption transactions in any given year . the actual timing and completion of development is difficult to predict due to the uncertainties of the market . infrastructure development and marketing activities and costs could continue over several years as we develop our land holdings . we will also continue to evaluate land resources to determine the highest and best uses for our land holdings . future sales of land are dependent on market circumstances and specific opportunities . our goal in the future is to increase land value and create future revenue growth through planning and development of commercial and industrial properties . 40 real estate – resort/residential we are in the preliminary stages of development ; hence , no revenues are attributed to this segment for these reporting periods . in 2018 , resort/residential segment expenses decreased $ 425,000 to $ 1,530,000 , or 22 % , when compared to $ 1,955,000 in 2017 . the reassignment of resources within the company translated to increases in qualifying costs , including payroll and overhead costs within resort/residential which in turn translated to an increase in costs being capitalized into our real estate development projects by $ 250,000 when compared to 2017. in addition , we experienced savings in professional services of $ 163,000 in 2018. in 2017 , resort/residential segment expenses increased $ 325,000 primarily due to reduced capitalization of payroll and overhead costs that in the prior years were identified to be incremental to our mixed use master plan development projects . our resort/residential segment activities in include land entitlement , land planning and pre-construction engineering and conservation activities . we have three major resort/residential communities within this segment : centennial , grapevine , and mv . for centennial , the board of supervisors in december 2018 , by a vote of 4-1 , affirmed the recommendation of the los angeles county regional planning commission and department of regional planning that centennial be approved . for grapevine , we are currently working with kern county to defend litigation related to the approved eir . for a more complete discussion of the litigation and approval process , please see note 14 ( commitments and contingencies ) to the notes to consolidated financial statements . for mv , we have a fully entitled project and received approval of tentative tract map 1 for our first four phases of development . the timing of mv development in the coming years will be dependent on the strength of

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources cash flow and liquidity our financial position allows us to pursue our strategies of land entitlement , development , and conservation . accordingly , we have established well-defined priorities for our available cash , including investing in core operating segments to achieve profitable future growth . we have historically funded our operations with cash flows from operating activities , investment proceeds , and short-term borrowings from our bank credit facilities . in the past , we have also issued common stock and used the proceeds for capital investment activities . to enhance shareholder value , we will continue to make investments in our real estate segments to secure land entitlement approvals , build infrastructure for our developments , ensure adequate future water supplies , and provide funds for general land development activities . within our farming segment , we will make investments as needed to improve efficiency and add capacity to its operations when it is profitable to do so . on october 4 , 2017 , the company commenced a rights offering to common shareholders for additional working capital for general corporate purposes , including to fund general infrastructure costs and the development of buildings at trcc , to continue forward with entitlement and permitting programs for the centennial and grapevine communities and costs related to the preparation of the development of mv . the rights offering concluded on october 27 , 2017 , with the company raising $ 89,701,000 , net of offering costs , from the sale of 5,000,000 shares at $ 18.00 per share . our cash and cash equivalents and marketable securities totaled approximately $ 79,657,000 at december 31 , 2018 , a decrease of $ 11,318,000 , or 12 % , from the corresponding amount at the end of 2017 .

this segment also includes customized paper conversion services of commercial printing paper for distribution to document centers and form printers . our broad geographic platform of operations coupled with the breadth of paper and graphics products , including our exclusive private brand offerings , provides a foundation to service national , regional and local customers across north america . publishing – the publishing segment sells and distributes coated and uncoated commercial printing papers to publishers , retailers , converters , printers and specialty businesses for use in magazines , catalogs , books , directories , gaming , couponing , retail inserts and direct mail . this segment also provides print management , procurement and supply chain management solutions to simplify paper and print procurement processes for its customers . packaging – the packaging segment provides standard as well as custom and comprehensive packaging solutions for customers based in north america and in key global markets . the business is strategically focused on higher growth industries including light industrial/general manufacturing , food processing and manufacturing , fulfillment and internet retail , as well as niche verticals based on geographical and functional expertise . veritiv 's packaging 26 professionals create customer value through supply chain solutions , structural and graphic packaging design and engineering , automation , workflow and equipment services , contract packaging , and kitting and fulfillment . facility solutions – the facility solutions segment sources and sells cleaning , break-room and other supplies such as towels , tissues , wipers and dispensers , can liners , commercial cleaning chemicals , soaps and sanitizers , sanitary maintenance supplies and equipment , safety and hazard supplies , and shampoos and amenities primarily in the u.s. , canada and mexico . veritiv is a leading distributor in the facility solutions segment . we offer a world class network of leading suppliers in all categories ; total cost of ownership solutions with re-merchandising , budgeting and compliance , inventory management , and consistent multi-local supply solutions ; and a sales-force trained to bring leading vertical expertise to all of the major north american geographies . the company also has a corporate & other category which includes certain assets and costs not primarily attributable to any of the reportable segments , as well as our veritiv logistics solutions business which provides transportation and warehousing solutions . the spin-off and merger on july 1 , 2014 ( the `` distribution date `` ) , international paper completed the previously announced spin-off of xpedx to the international paper shareholders ( the `` spin-off `` ) , forming a new public company called veritiv . immediately following the spin-off , uwwh merged with and into veritiv ( the `` merger `` ) . prior to the distribution date , veritiv 's financial position , results of operations and cash flows consisted of only the xpedx business of international paper and have been derived from international paper 's historical accounting records . the financial results of xpedx have been presented on a carve-out basis through the distribution date , while the financial results for veritiv , post spin-off , are prepared on a stand-alone basis . as such , the consolidated and combined statements of operations , consolidated and combined statements of comprehensive income ( loss ) and consolidated and combined statements of cash flows for the year ended december 31 , 2014 consist of : the combined results of operations of xpedx for the six months ended june 30 , 2014 on a carve-out basis , and the consolidated results of veritiv on a stand-alone basis for the six months ended december 31 , 2014 . the combined financial statements as of december 31 , 2013 and for the years ended december 31 , 2013 and 2012 consist entirely of the combined results of xpedx on a carve-out basis . for periods prior to the spin-off , the combined financial statements include expense allocations for certain functions previously provided by international paper . see note 1 of the notes to the consolidated and combined financial statements for further information . key performance measure adjusted ebitda is the primary financial performance measure veritiv uses to manage its businesses , to monitor its results of operations , to measure its performance against the abl facility and to incentivize its management . this common metric is intended to align shareholders , debt holders and management . adjusted ebitda is a non-gaap financial measure and is not an alternative to net income , operating income or any other measure prescribed by u.s. generally accepted accounting principles ( `` gaap `` ) . veritiv uses adjusted ebitda ( earnings before interest , income taxes , depreciation and amortization , restructuring charges ( income ) , non-restructuring stock-based compensation expense , lifo ( income ) expense , asset impairment charge , non-restructuring severance charges , gain on sale of joint venture , merger and integration expenses , income ( loss ) from discontinued operations , net of income taxes , fair value adjustments on the contingent liability associated with the tax receivable agreement ( `` tra `` ) and certain other adjustments ) because veritiv believes investors commonly use adjusted ebitda as a key financial metric for valuing companies such as veritiv . in addition , the credit agreement governing the abl facility ( as defined in the notes to the consolidated and combined financial statements ) permits the company to exclude these and other charges in calculating consolidated ebitda , as defined in the abl facility . the table below provides a reconciliation of veritiv 's net income ( loss ) determined in accordance with gaap to adjusted ebitda on a pro forma basis for the years ended december 31 , 2014 and 2013. the pro forma adjustments take into account the merger and the related financing as if they occurred on january 1 , 2013 , as well as purchase accounting adjustments and transaction costs related to the merger . story_separator_special_tag this increase was partially offset by a 7.2 % decrease in the net sales of legacy xpedx operations , due primarily to a 6.3 % decline in volume driven by ( i ) the loss of three large customers which comprised 2.8 % of the decline in sales and ( ii ) a continued decrease in volume at existing customers due to both structural demand decline and market price decreases for the products we sell . adjusted ebitda increased by $ 10.8 million as a result of the merger . the change in legacy xpedx adjusted ebitda during this period was minimal . comparison of the years ended december 31 , 2013 and december 31 , 2012 the net sales decrease is in line with a 1.6 % print market decline . volume increased due to increased share with customers in the book , retail insert and specialty segments . the price/mix decline was driven by deterioration in the coated free sheet and coated ground wood segments . the increase in adjusted ebitda was driven by a $ 1.7 million decline in incentive compensation and a $ 1.3 million decline in wages and benefits as a result of a reduction in headcount which was partially offset by a $ 0.4 million increase in various other expenses . packaging the table below presents selected data with respect to the packaging segment : replace_table_token_12_th the table below presents the components of the net sales change compared to the prior year : replace_table_token_13_th comparison of the years ended december 31 , 2014 and december 31 , 2013 net sales increased due primarily to the net sales contribution of $ 613.1 million from the merger , along with a 2.9 % increase in net sales of the legacy xpedx operations . this increase was due primarily to a 4.2 % increase in sales volume driven by higher sales at existing customers . this was partially offset by a 1.3 % unfavorable price mix variance driven primarily by growth in new business at lower margins . 34 adjusted ebitda increased by $ 50.2 million as a result of the merger . the legacy xpedx adjusted ebitda declined by $ 11.1 million as a result of ( i ) an $ 8.7 million increase in distribution expenses driven by an increase in sales volume and ( ii ) a $ 2.2 million decrease due primarily to lower pricing , and ( iii ) a $ 4.6 million increase in personnel expense . these cost increases were offset by a $ 4.4 million decline in various other expenses . comparison of the years ended december 31 , 2013 and december 31 , 2012 the increase in net sales was due primarily to increased sales volume to existing customers . the decrease in adjusted ebitda is due to ( i ) cost of sales rising faster than net sales which reduced adjusted ebitda by $ 4.7 million and ( ii ) an increase in distribution expenses of $ 4.4 million driven by the increase in packaging revenues as well as reductions in revenues in other segments which had the overall effect of increasing this segment 's share of distribution expenses . these negative variances were partially offset by a $ 3.0 million reduction in commissions and a $ 0.4 million decline in various other expenses . facility solutions the table below presents selected data with respect to the facility solutions segment . replace_table_token_14_th the table below presents the components of the net sales change compared to the prior year : replace_table_token_15_th comparison of the years ended december 31 , 2014 and december 31 , 2013 net sales increased due primarily to the net sales contribution of $ 322.8 million from the merger . this increase was offset by an 11.5 % decline in legacy xpedx net sales . the decline in legacy xpedx sales is primarily driven by customer attrition with five customers comprising 8.4 % of the decline . adjusted ebitda increased by $ 16.1 million as a result of the merger . the legacy xpedx adjusted ebitda increased by $ 3.1 million driven primarily by ( i ) a $ 10.8 million reduction in distribution expenses due to a reduction in sales volume , ( ii ) a $ 12.6 million impact from cost of products sold declining faster than net sales and ( iii ) a $ 1.4 million decline in selling and administrative costs primarily due to less sales commissions resulting from the decline in sales . these improvements were partially offset by a $ 21.7 million reduction in adjusted ebitda driven primarily by the decline in net sales volume . comparison of the years ended december 31 , 2013 and december 31 , 2012 the decrease in sales volume is due primarily to ( i ) $ 31.8 million in customer losses , ( ii ) management 's decision to reposition its distribution network , which reduced net sales by $ 8.2 million and ( iii ) volume declines at existing customers . the decrease in adjusted ebitda is due primarily to the decrease in net sales which reduced adjusted ebitda by $ 19.2 million , partially offset by ( i ) a $ 6.0 million decline in selling and administrative wages , benefits and incentive compensation , ( ii ) a $ 3.1 million decrease in distribution expenses driven by the decline in sales volumes , ( iii ) a $ 2.5 million decrease in commission costs , ( iv ) a $ 1.0 million decrease in travel and entertainment expenses , ( v ) a $ 1.0 million decline in bad debt expense and ( vi ) a $ 0.8 million decline in various other expenses . 35 corporate & other comparison of the years ended december 31 , 2014 and december 31 , 2013 adjusted ebitda decreased by $ 50.5 million as a result of the merger . the legacy xpedx adjusted ebitda improved by $ 17.9 million , driven

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

net cash provided by operating activities decreased by $ 47.2 million compared to last year . cash provided by operating activities in 2014 was negatively impacted by approximately $ 58.4 million of cash outflows for merger and integration expenses . 2013 compared with 2012 : net cash provided by operating activities decreased by $ 3.8 million due primarily to $ 13.2 million of lower income from continuing operations , adjusted to exclude non-cash items and deferred income taxes , partially offset by ( i ) a $ 7.6 million increase in cash generated by working capital and ( ii ) a $ 1.8 million decrease in cash used by discontinued operations for operating activities . investing activities 2014 compared with 2013 : net cash provided by investing activities increased by $ 6.7 million due primarily to the net cash acquired from the merger . this increase was partially offset by higher capital expenditures and lower proceeds from sales of assets as compared to last year . 2013 compared with 2012 : net cash provided by investing activities increased by $ 20.7 million due primarily to incremental proceeds from the sale of certain assets as compared to 2012 , along with lower capital expenditures . financing activities 2014 compared with 2013 : net cash provided by financing activities was $ 23.0 million compared to net cash used for financing activities of $ 76.6 million for the prior year period . the current year activity includes net proceeds from the new abl facility , as described below , partially offset by $ 493.1 million of net cash transfers to parent and $ 22.4 million of deferred financing fee payments related to the new abl facility . 2013 compared with 2012 : cash used in financing activities for the years ended december 31 , 2013 and 2012 primarily represents transactions between xpedx and international paper . these transactions were considered to be effectively settled for cash at the time the transaction was recorded .

these trends include clients increasingly expanding the focus of their brand strategies from national markets to pan-regional and global markets and integrating traditional and non-traditional marketing channels , as well as utilizing new communications technologies and emerging digital platforms . additionally , in an effort to gain greater efficiency and effectiveness from their total marketing expenditures , clients continue to require greater coordination of marketing activities . we believe these trends have benefited our business in the past and over the medium and long term will continue to provide a competitive advantage to us . in the near term , barring unforeseen events and excluding the impact of changes in foreign exchange rates , as a result of continued improvement in operating performance by many of our agencies and new business activities , we expect our 2017 revenue to increase modestly in excess of the weighted average nominal gdp growth in our major markets . we expect to continue to identify acquisition opportunities intended to build upon the core capabilities of our strategic business platforms , expand our operations in the high-growth and emerging markets and enhance our capabilities to leverage new technologies that are being used by marketers today . in addition , we continually evaluate our portfolio of businesses to identify non-strategic or under performing business for disposition . 9 given our size and breadth , we manage our business by monitoring several financial indicators . the key indicators that we focus on are revenue and operating expenses . we analyze revenue growth by reviewing the components and mix of the growth , including growth by principal regional market and marketing discipline , the impact from foreign currency fluctuations , growth from acquisitions and growth from our largest clients . operating expenses are comprised of : cost of services , selling , general and administrative , or sg & a , expenses and depreciation and amortization . in 2016 , revenue increased 1.9 % compared to 2015 . changes in foreign exchange rates reduced revenue 1.9 % , acquisitions , net of dispositions , increased revenue 0.3 % and organic growth increased revenue 3.5 % . across our principal regional markets , the changes in revenue were : north america increased 1.6 % , europe decreased 1.0 % , latin america increased 28.4 % and asia pacific increased 4.1 % . in north america , moderate growth in the united states and strong growth in canada was partially offset by the weakening of the canadian dollar against the u.s. dollar . in europe , growth in the u.k. , spain , russia and italy was offset by the weakening of the british pound and russian ruble against the u.s. dollar and negative performance in the netherlands . the increase in revenue in latin america was a result of our acquisition activity in brazil , which was partially offset by the weakening of most currencies in the region against the u.s. dollar , especially the brazilian real . in asia pacific , growth in the major economies in the region was also partially offset by the weakening of most currencies in the region against the u.s. dollar . the change in revenue in 2016 compared to 2015 , including the negative impact of currency changes , in our four fundamental disciplines was : advertising increased 4.7 % , crm decreased 3.6 % , public relations increased 3.4 % and specialty communications increased 3.9 % . we measure cost of services in two distinct categories : salary and service costs and occupancy and other costs . as a service business , salary and service costs make up the vast majority of our operating expenses and substantially all these costs comprise the essential components directly linked to the delivery of our services . salary and service costs include employee compensation and benefits , freelance labor and direct service costs , which include third-party supplier costs and client-related travel costs . occupancy and other costs consist of the indirect costs related to the delivery of our services , including office rent and other occupancy costs , equipment rent , technology costs , general office expenses and other expenses . sg & a expenses primarily consist of third-party marketing costs , professional fees and compensation and benefits and occupancy and other costs of our corporate and executive offices , which includes group-wide finance and accounting , treasury , legal and governance , human resource oversight and similar costs . operating expenses increased 1.5 % in 2016 compared to 2015 . salary and service costs , which tend to fluctuate with changes in revenue , increased $ 204.5 million , or 1.8 % , in 2016 compared to 2015 . occupancy and other costs , which are less directly linked to changes in revenue than salary and service costs , decreased $ 24.7 million , or 2.0 % , in 2016 compared to 2015 . operating margin in 2016 was 13.0 % , as compared to 12.7 % in 2015 . earnings before interest , taxes and amortization of intangible assets , or ebita , margin in 2016 was 13.8 % , as compared to 13.4 % in 2015 . net interest expense for 2016 increased $ 25.6 million to $ 167.1 million from $ 141.5 million in 2015 . interest expense increased $ 28.6 million to $ 209.7 million in 2016 , primarily resulting from the reduced benefit of the $ 1 billion fixed-to-floating interest rate swap on the 3.625 % senior notes due 2022 , or 2022 notes . in january 2016 , we settled the interest rate swap on the 2022 notes . by settling the swap , we were able to lock interest savings over the remaining term of the 2022 notes by reducing the effective rate to 2.7 % from 3.5 % . story_separator_special_tag some of our client arrangements include performance incentive provisions designed to link a portion of our revenue to our performance relative to quantitative and qualitative goals . we recognize performance incentives in revenue when the specific quantitative goals are achieved , or when our performance against qualitative goals is determined by the client . we may receive rebates or credits from certain vendors based on transactions entered into on behalf of clients . these rebates or credits are remitted to the clients or in certain international markets may be retained by us based on the terms of the client contract or local law . amounts passed on to clients are recorded as a liability and amounts retained by us are recorded as revenue when earned . in may 2014 , the fasb issued asu 2014-09 , revenue from contracts with customers ( “ asu 2014-09 ” ) , which will replace all existing revenue recognition guidance under u.s. gaap . on july 9 , 2015 , the fasb approved a one-year deferral of the effective date of asu 2014-09 to all annual and interim periods beginning after december 15 , 2017. asu 2014-09 provides for one of two methods of transition : retrospective application to each prior period presented or recognition of the cumulative effect of retrospective application of the new standard as of the beginning of the period of initial application . we plan to apply asu 2014-09 on january 1 , 2018. presently , we are not yet in a position to conclude on the transition method we will choose . based on our initial assessment , the impact of the application of the new standard will likely result in a change in the timing of our revenue recognition for performance incentives received from clients . performance incentives are currently recognized in revenue when specific quantitative goals are achieved , or when our performance against qualitative goals is determined by the client . under the new standard , we will be required to estimate the amount of the incentive that will be earned at the inception of the contract and recognize the incentive over the term of the contract . while performance incentives are not material to our revenue , this will result in an acceleration of revenue recognition for certain contract incentives compared to the current method . additionally , in certain of our businesses we record revenue as a principal and include certain third-party pass-through and out-of-pocket costs , which are billed to clients in connection with our services , in revenue . in march 2016 , the fasb issued further guidance on principal versus agent considerations . we are currently evaluating the impact of the principal versus agent guidance on our revenue and cost of services ; however , we do not expect the change , if any , to have a material effect on our results of operations . additional information about our revenue recognition policy appears in note 2 to the consolidated financial statements . share-based compensation the majority of our incentive based share awards represent restricted stock awards and performance restricted stock awards , or prsus . share-based compensation for these awards is determined and fixed on the grant date using the closing price of our common stock and we have assumed that substantially all the prsus will vest . share-based compensation expense of $ 93.4 million , $ 99.4 million and $ 93.5 million in 2016 , 2015 and 2014 , respectively , primarily resulted from restricted stock awards . information about our stock award plans can be found in note 9 to the consolidated financial statements . new accounting standards see note 20 for information on the adoption of new accounting standards and accounting standards not yet adopted . 14 results of operations - 2016 compared to 2015 ( in millions ) : replace_table_token_5_th ebita , which we define as earnings before interest , taxes and amortization of intangible assets , and ebita margin , which we define as ebita divided by revenue , are non-gaap financial measures . we use ebita and ebita margin as additional operating performance measures , which exclude the non-cash amortization expense of intangible assets , primarily consisting of intangible assets related to acquired businesses . the table above reconciles ebita and ebita margin to the u.s. gaap financial measures for the periods presented . we believe that ebita and ebita margin are useful measures for investors to evaluate the performance of our businesses . non-gaap financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with u.s. gaap . non-gaap financial measures reported by us may not be comparable to similarly titled amounts reported by other companies . revenue in 2016 , revenue increased $ 282.5 million to $ 15,416.9 million from $ 15,134.4 million in 2015 . changes in foreign exchange rates reduced revenue $ 283.8 million , acquisitions , net of dispositions , increased revenue $ 38.2 million and organic growth increased revenue $ 528.1 million . the components of revenue change in the united states ( “ domestic ” ) and the remainder of the world ( “ international ” ) were ( in millions ) : replace_table_token_6_th 15 the components and percentages are calculated as follows : the foreign exchange impact is calculated by translating the current period 's local currency revenue using the prior period average exchange rates to derive current period constant currency revenue ( in this case $ 15,700.7 million for the total column ) . the foreign exchange impact is the difference between the current period revenue in u.s. dollars and the current period constant currency revenue ( $ 15,416.9 million less $ 15,700.7 million for the total column ) . acquisitions , net of dispositions , is calculated by aggregating the prior period revenue of the acquired businesses , less the prior period revenue of any business that was disposed of in the current period .

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flow from operations $ 1,931.2 less : increase in operating capital ( 323.0 ) principal cash sources 1,608.2 uses capital expenditures $ ( 165.5 ) dividends paid to common shareholders ( 505.4 ) dividends paid to shareholders of noncontrolling interests ( 87.2 ) acquisition payments , including payment of contingent purchase price obligations and acquisition of additional noncontrolling interests , net of cash acquired ( 499.3 ) repurchases of common stock , net of proceeds from stock plans and tax benefits ( 554.2 ) principal cash uses ( 1,811.6 ) principal cash uses in excess of principal cash sources ( 203.4 ) foreign exchange rate changes ( 75.5 ) financing activities and other 352.9 increase in operating capital 323.0 increase in cash and cash equivalents $ 397.0 principal cash sources and principal cash uses amounts are non-gaap liquidity measures . these amounts exclude changes in working capital and other investing and financing activities , including commercial paper issuances and redemptions used to fund working capital changes . this presentation reflects the metrics used by us to assess our sources and uses of cash and was derived from our consolidated statement of cash flows . we believe that this presentation is meaningful to understand the primary sources and uses of our cash flow and the effect on our cash and cash equivalents . non-gaap liquidity measures should not be considered in isolation from , or as a substitute for , financial information presented in compliance with u.s. gaap . non-gaap liquidity measures as reported by us may not be comparable to similarly titled amounts reported by other companies . additional information regarding our cash flows can be found in our consolidated financial statements . 23 cash management our regional treasury centers in north america , europe and asia manage our cash and liquidity . each day , operations with excess funds invest these funds with their regional treasury center . likewise , operations that require funds borrow from their regional treasury center . the treasury centers aggregate the net position which is either invested with or borrowed from third parties .

no significant integration costs are anticipated in the future , as such the majority of the acquisition and integration related costs have been paid as of december 31 , 2011. since the wag acquisition , certain residual wag operations have been separately accounted for during the integration process . these operations relate to certain wag product revenues , the related operating costs and integration costs . we have presented such residual wag operations for purposes of providing comparable financial information for the impacted fiscal years ended 2010 and 2011. we will not provide this information going forward into 2012 , since 2011 represented a full year with these residual wag operations and will thus be more comparable to 2012. we expect such revenues and expenses that directly relate to wag products will gradually decrease over fiscal 2012. for additional information , see “note 5 – business combination” of the notes to consolidated financial statements , included in part iv , item 15 of this report . we may pursue additional acquisition opportunities in the future to increase our share of the aftermarket auto parts market or expand our product offering . executive summary for the fiscal year 2011 , the company generated net sales of $ 327.1 million , compared with $ 262.3 million for fiscal 2010 , representing an increase of 25 % . excluding $ 83.4 million and $ 39.1 million of net sales from wag in fiscal 2011 and 2010 , respectively , our net sales for fiscal 2011 and 2010 were $ 243.7 million and $ 223.2 million , respectively , for an increase of 9 % over the prior year . net loss for fiscal 2011 was $ 15.1 million , or $ 0.50 per share , which included a non-cash write-down of intangibles and restructuring charges related to wag of $ 3.4 million ( net of a $ 1.7 million tax benefit ) and $ 7.4 million , respectively , and $ 0.5 million of legal expenses to protect intellectual property . this compares to a net loss of $ 13.9 million , or $ 0.46 per share for fiscal 2010 , which included $ 3.1 million of restructuring charges related to wag , and $ 2.3 million of legal expenses to protect intellectual property . earnings per share for fiscal 2011 and 2010 also included amortization expense related to intangibles of $ 3.7 million or $ 0.12 per share and $ 2.8 million or $ 0.09 per share , respectively . we generated adjusted ebitda ( earnings before interest , taxes , depreciation , and amortization plus current year 's share-based compensation expense , legal costs to enforce intellectual property rights , restructuring expenses related to acquisition and a fiscal 2010 only charge for change in revenue recognition ) of $ 16.3 million in fiscal 2011 compared to $ 19.5 million in fiscal 2010. adjusted ebitda excludes share-based compensation expense of $ 2.6 million in fiscal 2011 and $ 2.7 million in fiscal 2010. adjusted ebitda is presented because such measure is used by rating agencies , securities analysts , investors and other parties in evaluating the company . it should not be considered , however , as an alternative to operating income as an indicator of the company 's operating performance or as an alternative cash flows as measures of the company 's overall liquidity as presented in the company 's consolidated financial statements . further , the adjusted ebitda measure shown for the company may not be comparable to similarly titled measures used by other companies . to understand revenue generation through our network of e-commerce websites , we monitor several key business metrics , including the following : unique visitors : a unique visitor to a particular website represents a user with a distinct ip address that visits that particular website . we define the total number of unique visitors in a given month as the sum of unique visitors to each of our websites during that month . we measure unique visitors to understand the volume of traffic to our websites and to track the effectiveness of our online marketing efforts . the number of unique visitors has historically varied based on a number of factors , including our marketing activities and seasonality . we believe an increase in unique visitors to our websites will result in an increase in the number of orders . we seek to increase the number of unique visitors to our websites by attracting repeat customers and improving search engine marketing and other internet marketing activities . total number of orders : we monitor the total number of orders as an indicator of future revenue trends . we recognize revenue associated with an order when the products have been delivered , consistent with our revenue recognition policy . average order value : average order value represents our net sales on a placed orders basis for a given period of time divided by the total number of orders recorded during the same period of time . we seek to increase the average order value as a means of increasing net sales . average order values vary depending upon a number of factors , including the components of our product offering , the order volume in certain online sales channels , macro-economic conditions , and the general level of competition online . 23 the tables below reconcile net ( loss ) income to consolidated adjusted ebitda and u.s. auto parts ( “usap” ) excluding the wag acquisition for the periods presented ( in thousands ) : replace_table_token_4_th replace_table_token_5_th basis of presentation net sales . online and offline sales represent two different sales channels for our products . we generate online net sales primarily through the sale of auto parts to individual consumers through our network of e-commerce websites and online marketplaces , including online advertising . e-commerce sales are derived from our network of websites , which are company owned and operated . story_separator_special_tag under asc 740 , deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases . deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled . when appropriate , a valuation reserve is established to reduce deferred tax assets , which include tax credits and loss carry forwards , to the amount that is more likely than not to be realized . the ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction . we consider the following possible sources of taxable income when assessing the realization of our deferred tax assets : future reversals of existing taxable temporary differences ; 27 future taxable income exclusive of reversing temporary differences and carryforwards ; taxable income in prior carryback years ; and tax-planning strategies . the assessment regarding whether a valuation allowance is required or should be adjusted also considers , among other matters , the nature , frequency and severity of recent losses of the combined usap and wag operations , forecasts of future profitability , the duration of statutory carryforward periods , our experience with tax attributes expiring unused and tax planning alternatives . in making such judgments , significant weight is given to evidence that can be objectively verified . concluding that a valuation allowance is not required is difficult when there is significant negative evidence that is objective and verifiable , such as cumulative losses in recent years . although we expect that the operations of the recently acquired wag business and our ability to achieve future profitability of these operations was enhanced by the cost reductions that occurred as a result of the acquisition and subsequent integration efforts , wag 's historic operating results remain relevant as they are reflective of the industry and the effect of economic conditions . the fundamental businesses and inherent risks in which the wag business operates did not change from those which existed prior to the acquisition . we utilized a three-year analysis of actual results as the primary measure of cumulative losses in recent years . however , because a substantial portion of those cumulative losses relate to impairment of intangible assets and goodwill , those three-year cumulative results are adjusted for the effect of these items . in addition , the near- and medium-term financial outlook is considered when assessing the need for a valuation allowance . the valuation of deferred tax assets requires judgment and assessment of the future tax consequences of events that have been recorded in the financial statements or in the tax returns , and our future profitability represents our best estimate of those future events . changes in our current estimates , due to unanticipated events or otherwise , could have a material effect on our financial condition and results of operations . prior to the acquisition of wag , the company concluded that it was more likely than not that we would realize the deferred tax assets in all jurisdictions . however , with the acquisition of wag in 2010 , based largely on the weight of the combined cumulative three-year adjusted loss position , it was determined that it was not more likely than not that the company would realize its net deferred tax assets as of january 1 , 2011. therefore , a valuation allowance of $ 18.3 million was recorded as of january 1 , 2011 , of which $ 4.7 million was recorded in relation to wag in connection with our acquisition in august 2010. based on the same determination , an additional valuation allowance of $ 5.7 million was recorded as of december 31 , 2011 , resulting in a valuation allowance balance of $ 22.8 million as of december 31 , 2011. if , in the future , we generate taxable income on a sustained basis in jurisdictions where we have recorded full valuation allowances , our conclusion regarding the need for full valuation allowances in these tax jurisdictions could change , resulting in the reversal of some or all of the valuation allowances . if our operations generate taxable income prior to reaching profitability on a sustained basis , we would reverse a portion of the valuation allowance related to the corresponding realized tax benefit for that period , without changing our conclusions on the need for a full valuation allowance against the remaining net deferred tax assets . at december 31 , 2011 , federal and state net operating loss ( “nol” ) carryforwards were $ 28.3 million and $ 42.2 million , respectively . federal nol carryforwards of $ 2.7 million were acquired in the acquisition of wag which are subject to internal revenue code section 382 and limited to an annual usage limitation of $ 135,000. additionally the tax benefit of $ 0.9 million of the federal and state nol carryforwards which was created by the exercise of stock options will be credited to additional paid-in-capital once recognized . federal nol carryforwards expire in 2029 and 2030 , while state nol carryforwards begin to expire in 2016. the state nol carryforwards expire in the respective tax years as follows ( in thousands ) : replace_table_token_6_th the company utilizes 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 it is more likely than not that the position will be sustained on audit , including resolution of related appeals or litigation processes . the second step is to measure the tax benefit as the largest amount which is more than 50 % likely of being realized

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

cash flows the following table summarizes the key cash flow metrics from our consolidated statements of cash flow for fiscal 2009 , fiscal 2010 and fiscal 2011 , respectively , ended : replace_table_token_28_th operating activities net cash provided by operating activities increased by approximately $ 12.1 million for fiscal 2011 , as compared to fiscal 2010. the increase over prior year was primarily due to a significant decrease in the purchase of inventory and an improvement in timing of payments on accounts payable . this was partially offset by an increase in accounts receivable and a reduction in net earnings in fiscal 2011 compared to 2010 , after adjusting for non-cash items such as depreciation , amortization , impairment loss on intangibles , share-based compensation and deferred income taxes . net cash provided by operating activities decreased by approximately $ 13.3 million for fiscal 2010 , as compared to fiscal 2009. the decrease was primarily due to an increase in purchase of inventory , which was offset by an improvement in timing of payments on accounts payable and net earnings in fiscal 2010 after adjusting for non-cash items such as depreciation and amortization and deferred income taxes . 36 investing activities net cash used in investing activities decreased by approximately $ 19.5 million for fiscal 2011 , as compared to fiscal 2010. the decrease was primarily due to the cash paid for the wag acquisition in fiscal 2010 , which was partially offset by net proceeds from the sale of marketable securities . net cash used in investing activities increased by approximately $ 13.0 million for fiscal 2010 , as compared to fiscal 2009. the increase was primarily due to our acquisition of wag and purchase of property and equipment , which was partially offset by proceeds from the sale of marketable securities .

allowance for doubtful accounts – our policy is to maintain allowances for estimated losses resulting from the inability of our customers to make required payments . credit limits for all customers are established based upon several factors , including but not limited to financial condition and stability , payment history , published credit reports and use of credit references . on a monthly basis , management performs various analyses to evaluate accounts receivable balances to ensure recorded amounts reflect estimated net realizable value . this review includes accounts receivable agings , other operating trends and relevant business conditions , including general economic factors , as they relate to the company 's domestic and international customers . when a customer 's account balance becomes past due , we initiate dialogue with the customer to determine the cause . if it is determined that the customer will be unable to meet its financial obligation to us , such as in the case of a bankruptcy filing , we record a specific allowance to reduce the related receivable to the amount we expect to recover given all of the information presently available . inventories – as a designer and manufacturer of high technology systems , we are exposed to a number of economic and industry factors that could result in portions of our inventories becoming either obsolete or in excess of anticipated usage . these factors include , but are not limited to , technological changes in our markets , our ability to meet changing customer requirements , competitive pressures in products and prices , and the availability of key components from our suppliers . our policy is to record inventory write-downs when conditions exist that suggest our inventories may be in excess of anticipated demand for our products and market conditions . we regularly evaluate the ability to realize the value of our inventories based upon a combination of factors including the following : historical usage rates , forecasted sales or usage , product end of life dates , estimated current and future market values and new product introductions . purchasing requirements and alternative usage avenues are explored within these processes to mitigate inventory exposure . when recorded , our write-downs are intended to reduce the carrying value of our inventories to their net realizable value and establish a new cost basis . deferred taxes– the company applies the asset and liability method in recording income taxes , under which deferred income tax assets and liabilities are determined , based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using currently enacted tax rates and laws . additionally , deferred tax assets are evaluated and a valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized . management continues to review the level of the valuation allowance on a quarterly basis . there can be no assurance that the company 's future operations will produce sufficient earnings so that the deferred tax assets can be fully utilized . intangible assets – there is a periodic review of intangible and other long-lived assets for impairment . this review consists of the analysis of events or changes in circumstances that would indicate the carrying amount of the assets may not be recoverable . recoverability is determined by comparing the forecasted future undiscounted net cash flows from the operations to which the assets relate , based on management 's best estimates using the appropriate assumptions and projections at the time , to the carrying amount of the assets . if the carrying value is determined to be in excess of future operating cash flows , the asset is considered impaired and a loss is recognized equal to the amount by which the carrying amount exceeds the estimated fair value of the assets . recently issued accounting pronouncements refer to note 1 of the notes to consolidated financial statements for a discussion of recently issued accounting pronouncements . page 18 discussion of operating results replace_table_token_3_th sales – sales in the balancer segment increased $ 1.3 million , or 15.7 % , to $ 9.3 million for fiscal 2012 compared to $ 8.0 million for fiscal 2011. this increase is primarily due to higher unit sales volumes in north america offset by decreases in unit sales volumes in asia and europe during the year . north american sales increased $ 1.5 million , or 45.9 % , in fiscal 2012 compared to fiscal 2011. sales into asia decreased $ 370,000 , or 9.7 % , in fiscal 2012 compared to the prior year . sales into europe decreased $ 14,000 , or 1.6 % , in fiscal 2012 compared to fiscal 2011. sales on other regions of the world increased $ 187,000 , or 162.3 % , during fiscal 2012 as compared to the prior year . the increases in north america and other regions of the world are primarily due to higher volumes of shipments as the worldwide automotive and industrial markets in these regions continue to recover from the global economic downturn . the decreases in asia and europe are due to a reduction in orders as economic growth in china is slowing and the uncertainty regarding the european economy continues to have a negative impact on manufacturing . the levels of demand for our balancer products in any of these geographic markets can not be forecasted with any certainty given current economic trends and the historical volatility experienced in this market . sales in the measurement segment increased $ 1.7 million , or 48.5 % , to $ 5.2 million in fiscal 2012 compared to $ 3.5 million in fiscal 2011. sales of laser-based distance measurement and dimensional-sizing products increased $ 772,000 , or 28.3 % , primarily due to a large , non-recurring sale during the fourth quarter of fiscal 2012. story_separator_special_tag sales of remote tank monitoring products increased $ 479,000 to $ 581,000 during fiscal 2012 due to the higher volume of shipments . sales of laser-based surface measurement products increased $ 439,000 , or 67.1 % , primarily due to the sale of two casi scatterometers . future sales of laser-based or ultrasonic measurement products can not be forecasted with any certainty given the historical volatility experienced in this market . sales in the balancer segment increased $ 3.3 million , or 71.5 % , to $ 8.0 million for fiscal 2011 compared to $ 4.7 million for fiscal 2010. this increase is primarily due to higher unit sales volumes in asia , north america and europe during the year . asia sales increased $ 1.8 million , or 93.5 % , in fiscal 2011 compared to fiscal 2010. north american sales increased $ 1.4 million , or 77.9 % , in fiscal 2011 compared to the prior year . european sales increased $ 108,000 , or 13.5 % , in fiscal 2011 compared to fiscal 2010. the increases across all geographies are primarily due to higher volumes of shipments as the worldwide automotive and industrial markets in these regions have begun to recover from the previous low levels due to the global economic downturn . page 19 sales in the measurement segment increased $ 1.3 million , or 63.1 % , to $ 3.5 million in fiscal 2011 compared to $ 2.1 million in fiscal 2010. sales of laser-based distance measurement and dimensional sizing products increased $ 1.1 million , or 67.1 % , primarily due to the higher volume of shipments in the current fiscal year resulting from the economic recovery in the commercial and industrial markets . sales of laser-based surface measurement products increased $ 160,000 , or 32.3 % , primarily due to the sale of a casi scatterometer and the september 30 , 2009 acquisition of optical dimensions which resulted in product sales of $ 202,000 during fiscal 2011. during fiscal 2011 , we started to ship our xact ultrasonic measurement product which resulted in $ 102,000 of revenues . gross margin – gross margin in fiscal 2012 decreased to 43.9 % compared to 48.8 % in fiscal 2011. this decrease was primarily due to higher inventory reserves associated with an end-of-life sbs balancer product , higher labor and overhead costs related to the increased sales volumes offset by a reduction in inventory component costs . gross margin in fiscal 2011 increased to 48.8 % compared to 44.7 % in fiscal 2010. this increase is primarily due to a shift in product sales mix with sales increasing in the measurement segment , which typically have higher gross margins than the balancer segment , and sales in the balancer segment rebounding positively in the north american market , which generally have slightly higher margins than asia due to the channel and distributor discounts required in asia . operating expenses – operating expenses increased $ 484,000 , or 8.3 % , to $ 6.3 million for fiscal 2012 compared to $ 5.8 million in fiscal 2011. general , administrative and sales expenses increased $ 670,000 , or 12.7 % , to $ 6.0 million in fiscal 2012 compared to $ 5.3 million in the prior year . this increase is due primarily to higher personnel costs , higher commissions related to the increased sales and higher sales and marketing expenses . research and development expenses decreased $ 186,000 , or 36.9 % , to $ 318,000 in fiscal 2012 compared to $ 504,000 in fiscal 2011. the decrease in research and development expense is primarily due to lower material costs associated with new product development related to existing product lines . operating expenses increased $ 1.0 million , or 21.7 % , to $ 5.8 million for fiscal 2011 compared to $ 4.8 million in fiscal 2010. general , administrative and sales expenses increased $ 1.1 million , or 26.6 % , to $ 5.3 million in fiscal 2011 compared to $ 4.2 million in the prior year . this increase is due primarily to higher commissions related to the increase in sales , higher stock-based compensation and higher expenses associated with an international trade show that occurs every two years . research and development expenses decreased $ 80,000 , or 13.7 % , to $ 504,000 in fiscal 2011 as compared to $ 585,000 in fiscal 2010. research and development expenses decreased primarily due to lower material costs associated with new product development . other income – other income consists of interest income , foreign currency exchange gain ( loss ) and other income ( expense ) . interest income was $ 2,000 , $ 4,000 and $ 11,000 in fiscal 2012 , 2011 and 2010 , respectively . interest income has decreased due to lower average cash and investment balances and lower interest rates . foreign currency exchange gain was $ 18,000 and $ 19,000 in fiscal 2012 and 2010 , respectively . foreign currency exchange loss was $ 10,000 in fiscal 2011. the foreign currency exchange gain ( loss ) fluctuated with the strength of foreign currencies against the u.s. dollar during the respective periods . other income consisted of an $ 18,000 gain on the sales of fixed assets for fiscal 2012. income tax provision – the effective tax rate in fiscal 2012 was 18.1 % . the effective tax rate on consolidated net income in fiscal 2012 differs from the federal statutory tax rate primarily due to the amount of income from foreign jurisdictions , changes in the deferred tax valuation allowance and certain expenses not being deductible for income tax reporting offset by tax credits related to research and experimentation expenses . the effective tax rate on consolidated net loss was ( 0.8 ) % for fiscal 2011. the company 's effective tax rate on consolidated net loss differs from the federal statutory rate primarily due to the amount of income

Write a concise summary of the following text delimited by triple quote marks. Return your response as a narrative which covers the key points highlighting the location, dates, entity names and account holder and financial information (when available) in chronological order of the text.

liquidity and capital resources the company 's working capital increased $ 432,000 to $ 7.9 million as of may 31 , 2012 compared to $ 7.5 million as of may 31 , 2011. cash and cash equivalents increased $ 16,000 from may 31 , 2011 to $ 2.8 million as of may 31 , 2012. cash provided by operating activities was $ 163,000 in fiscal 2012 as compared to cash used in operations of $ 559,000 in fiscal 2011. the increase is primarily due to increases in net income , decrease in inventory and an increase in accrued liabilities , offset by increases in accounts receivable and prepaid expenses and decreases in accounts payable . at may 31 , 2012 , accounts receivable increased $ 662,000 to $ 2.5 million compared to $ 1.8 million as of may 31 , 2011. the increase in accounts receivable is due to the increase in sales during fiscal 2012. inventories decreased $ 171,000 to $ 4.0 million as of may 31 , 2012 compared to $ 4.1 million at may 31 , 2011 due to increased inventory reserves related to an end-of-life sbs product . at may 31 , 2012 , total current liabilities increased $ 103,000 to $ 1.5 million as compared to $ 1.4 million at may 31 , 2011. the increase is primarily due to an increase in other accrued liabilities associated with a customer deposit on a future order offsetby lower accounts payables as compared to the prior year .