The fair value of the assets held by the U.K. pension plan by asset category are as follows:
The expected long-term rates of return on plan assets are equal to the yields to maturity of appropriate indices for government and corporate bonds and by adding a premium to the government bond return for equities. The expected rate of return on cash is the Bank of England base rate in force at the effective date.
Level 1 investments represent mutual funds for which a quoted market price is available on an active market. These investments primarily hold stocks or bonds, or a combination of stocks and bonds.

                  |                                                    |         |         | Fair value as of |                                                    |         |         |
----------------- | -------------------------------------------------- | ------- | ------- | ---------------- | -------------------------------------------------- | ------- | ------- | -------
                  | September 30, 2019                                 |         |         |                  | September 30, 2018                                 |         |         |
                  | Fair Value Measurements Using Inputs Considered as |         |         |                  | Fair Value Measurements Using Inputs Considered as |         |         |
Asset category    | Total                                              | Level 1 | Level 2 | Level 3          | Total                                              | Level 1 | Level 2 | Level 3
Cash on deposit   | $279                                               | $279    | $-      | $-               | $36                                                | $36     | $-      | $-
Pooled funds      | 7,959                                              | 7,959   | -       | -                | 8,234                                              | 8,234   | -       | -
Total plan assets | $8,238                                             | $8,238  | $-      | $-               | $8,270                                             | $8,270  | $-      | $-

fair value assets U. K. pension plan asset category
 expected long-term rates return on plan assets equal to yields maturity indices for government corporate bonds premium to government bond return for equities. expected rate return on cash Bank of England base rate effective date.
 Level 1 investments represent mutual funds quoted market price available active market. hold stocks or bonds combination.
 Fair value
 September 30, 2019 September 30, 2018
 Fair Value Measurements Inputs
 Asset category  Level 1 2 3
 Cash on deposit  $279
 Pooled funds  7,959  8,234
 Total plan assets $8,238


The following table presents the percentage relationship of our Consolidated Statement of Operations line items to our consolidated net revenues for the periods presented:
Net revenue. Total revenue increased $13.5 million, or 10.6%, in fiscal 2019 compared to fiscal 2018. Products revenue increased $5.3 million, or 15.7%, due to growth in third-party hardware sales and in on premise software sales, which grew more than 20% compared to the prior year.
Support, maintenance and subscription services revenue increased $6.4 million, or 9.3%, driven by growth in customers using our on premise software products that require the payment of support and maintenance along with continued increases in subscription based revenue, which increased 23.5% in fiscal 2019 compared to fiscal 2018.
Subscription based revenue comprised 17.7% of total consolidated revenues in 2019 compared to 15.8% in 2018. Professional services revenue increased $1.8 million, or 7.1%, as a result of growth in our customer base including installations of our traditional on premise and subscription based software solutions and increased responses to customer service requests.
Gross profit and gross profit margin. Our total gross profit increased $9.5 million, or 14.7%, in fiscal 2019 and total gross profit margin increased from 50.6% to 52.5%. Products gross profit decreased $0.1 million and gross profit margin decreased 3.3% to 18.4% primarily as a result of increased developed technology amortization.
Support, maintenance and subscription services gross profit increased $7.2 million and gross profit margin increased 310 basis points to 78.9% due to the scalable nature of our infrastructure supporting and hosting customers. Professional services gross profit increased $2.4 million and gross profit margin increased 7.7% to 26.9% due to increased revenue with lower costs from the restructuring of our professional services workforce during the first quarter of 2018 into a more efficient operating structure with limited use of contract labor.
Operating expenses Operating expenses, excluding the charges for legal settlements and restructuring, severance and other charges, increased $10.5 million, or 13.7%, in fiscal 2019 compared with fiscal 2018. As a percent of total revenue, operating expenses have increased 2.3% in fiscal 2019 compared with fiscal 2018.
Product development. Product development includes all expenses associated with research and development. Product development increased $9.9 million, or 35.4%, during fiscal 2019 as compared to fiscal 2018 primarily due to the reduction of cost capitalization. The products in our rGuest platform for which we had capitalized costs reached general availability by the beginning of the second quarter of fiscal 2019.
These products join our well established products with the application of agile development practices in a more dynamic development process that involves higher frequency releases of product features and functions. We capitalized $2.0 million of external use software development costs, and $0.3 million of internal use software development costs during fiscal 2019, with the full balance capitalized in Q1 fiscal 2019.
We capitalized approximately $8.9 million in total development costs during fiscal 2018. Total product development costs, including operating expenses and capitalized amounts, were $40.1 million during fiscal 2019 compared to $38.4 million in fiscal 2018. The $1.7 million increase is mostly due to continued expansion of our R&D teams and increased compensation expense as a result of bonus earnings.
Sales and marketing. Sales and marketing increased $1.6 million, or 8.7%, in fiscal 2019 compared with fiscal 2018. The change is due primarily to an increase of $1.6 million in incentive compensation related to an increase in sales, revenue and profitability during fiscal 2019.
General and administrative. General and administrative decreased $0.9 million, or 3.8%, in fiscal 2019 compared to fiscal 2018. The change is due primarily to reduced outside professional costs for legal and accounting services.
Depreciation of fixed assets. Depreciation of fixed assets decreased $0.1 million or 5% in fiscal 2019 as compared to fiscal 2018.
Amortization of intangibles. Amortization of intangibles increased $0.7 million, or 36.6%, in fiscal 2019 as compared to fiscal 2018 due to our remaining Guest suite of products being placed into service on June 30, 2018.
Restructuring, severance and other charges. Restructuring, severance, and other charges decreased $1.8 million due to non-recurring 2018 restructuring activities while charges for non-restructuring severance increased $1.2 million, resulting in a net decrease of $0.6 million during fiscal 2019. Our restructuring actions are discussed further in Note 4, Restructuring Charges.
Legal settlements. Legal settlements consist of settlements of employment and other business-related matters.

                                                         | Year ended March 31, |
-------------------------------------------------------- | -------------------- | ------
                                                         | 2019                 | 2018
Net revenue:                                             |                      |
Products                                                 | 27.7%                | 26.5%
Support, maintenance and subscription services           | 53.6                 | 54.2
Professional services                                    | 18.7                 | 19.3
Total net revenue                                        | 100.0                | 100.0
Cost of goods sold:                                      |                      |
Products, inclusive of developed technology amortization | 22.6                 | 20.7
Support, maintenance and subscription services           | 11.3                 | 13.1
Professional services                                    | 13.6                 | 15.6
Total net cost of goods sold                             | 47.5                 | 49.4
Gross profit                                             | 52.5                 | 50.6
Operating expenses:                                      |                      |
Product development                                      | 26.9                 | 21.9
Sales and marketing                                      | 13.9                 | 14.2
General and administrative                               | 16.4                 | 18.9
Depreciation of fixed assets                             | 1.8                  | 2.1
Amortization of intangibles                              | 1.8                  | 1.5
Restructuring, severance and other charges               | 0.8                  | 1.4
Legal settlements                                        | 0.1                  | 0.1
Operating loss                                           | (9.3)%               | (9.5)%

table relationship Consolidated Statement Operations items net revenues
. increased $13. 5 million. 6% 2019 2018. Products revenue increased $5. 3 million. 7% growth third-party hardware on premise software sales.
 Support maintenance subscription services revenue increased $6. 4 million. 3% growth premise software subscription revenue. 5% 2019.
 Subscription based revenue. 7% revenues 2019. 8% 2018. Professional services revenue increased $1. 8 million 7. 1% growth customer base increased responses service.
. increased $9. 5 million. 7% 2019 margin increased. to. 5%. Products profit decreased. 1 million margin decreased. 3% to. 4% increased technology amortization.
 Support maintenance subscription services profit increased $7. 2 million margin increased 310 78. infrastructure. Professional services profit increased $2. 4 million margin increased. 7%. 9% increased revenue lower costs restructuring.
 Operating increased $10. 5 million. 7% 2019. increased 2. 3% 2019.
. expenses research development.Product development increased $9. million. 4% 2019 cost capitalization. products rGuest platform availability second quarter 2019.
 agile development practices higher frequency releases. capitalized $2. million external software $0. 3 million internal full balance capitalized Q1 2019.
 capitalized $8. 9 million. $40. 1 million $38. 4 million 2018. $1. 7 million increase due expansion R&D increased compensation expense bonus earnings.
 Sales marketing. increased $1. 6 million. 7%. increase $1. 6 million incentive compensation sales revenue profitability.
 administrative. decreased $0. 9 million 3. 8%. reduced costs legal accounting services.
 Depreciation fixed assets. decreased $0. 1 million 5%.
 Amortization intangibles. increased $0. 7 million 36. 6% Guest suite products June 30, 2018.
 Restructuring severance charges. decreased $1. 8 million non-recurring 2018 restructuring increased $1. 2 million decrease $0. 6 million.restructuring actions Note 4.
 Legal settlements. employment business-related matters.
 Year ended March 31,
 Net revenue
 27. 7% 26. 5%
 Support maintenance subscription services 53. 54.
 Professional services 18. 19.
 revenue 100.
 Cost goods
 technology amortization 22.
 Support maintenance subscription services 11. 13.
 services. 15
 cost 47. 49.
 profit 52. 50.
 Operating expenses
 Product development 26. 21.
 Sales marketing 13. 14
 16. 18.
 Depreciation fixed assets.
 Amortization intangibles.
 Restructuring charges.
 Legal settlements.
 Operating loss.


Foreign Currency Exchange Rate Risk
As part of managing the exposure to changes in foreign currency exchange rates, we utilize cross-currency swap contracts and foreign currency forward contracts, a portion of which are designated as cash flow hedges. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in foreign currency exchange rates on intercompany and other cash transactions. We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with the cash flow hedge-designated instruments addressing foreign exchange risks will be reclassified into the Consolidated Statement of Operations within the next twelve months.
During fiscal 2015, we entered into cross-currency swap contracts with an aggregate notional value of €1,000 million to reduce our exposure to foreign currency exchange rate risk associated with certain intercompany loans. Under the terms of these contracts, which have been designated as cash flow hedges, we make interest payments in euros at 3.50% per annum and receive interest in U.S. dollars at a weighted-average rate of 5.33% per annum. Upon the maturity of these contracts in fiscal 2022, we will pay the notional value of the contracts in euros and receive U.S. dollars from our counterparties. In connection with the cross-currency swap contracts, both counterparties to each contract are required to provide cash collateral.
At fiscal year end 2019, these cross-currency swap contracts were in an asset position of $19 million and were recorded in other assets on the Consolidated Balance Sheet. The cross-currency swap contracts were in a liability position of $100 million and were recorded in other liabilities on the Consolidated Balance Sheet at fiscal year end 2018. At fiscal year end 2019 and 2018, collateral received from or paid to our counterparties approximated the derivative positions and was recorded in accrued and other current liabilities (when the contracts are in an asset position) or prepaid expenses and other current assets (when the contracts are in a liability position) on the Consolidated Balance Sheets. The impacts of these cross-currency swap contracts were as follows:
(1) Gains and losses excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses and gains generated as a result of re-measuring certain intercompany loans to the U.S. dollar.

                                                             |      | Fiscal        |
------------------------------------------------------------ | ---- | ------------- | ------
                                                             | 2019 | 2018          | 2017
                                                             |      | (in millions) |
Gains (losses) recorded in other comprehensive income (loss) | $ 53 | $  (25)       | $ (20)
Gains (losses) excluded from the hedging relationship (1)    | 66   | 21            | (58)

Foreign Currency Exchange Rate Risk
 managing utilize cross-currency swap forward contracts cash flow hedges. objective minimize impacts cash flows profitability exchange rates intercompany transactions. expect income (loss) flow hedge instruments reclassified into Consolidated Statement of Operations next twelve months.
 fiscal 2015, entered cross-currency swap contracts €1,000 million reduce foreign currency exchange rate risk intercompany loans. interest payments euros 3. 50% per annum receive interest U. S. dollars 5. 33% per annum. maturity contracts 2022 pay value euros receive U. S. dollars counterparties. counterparties required provide cash collateral.
 fiscal year end 2019 contracts position $19 million recorded other assets Consolidated Balance Sheet. liability position $100 million recorded other liabilities end 2018. collateral counterparties approximated positions recorded in accrued current liabilities prepaid expenses assets. impacts contracts
Gains losses excluded hedging relationship recognized in selling administrative expenses offset by re-measuring intercompany loans U. S. dollar.
 2019 2018 2017
 millions
 Gains (losses recorded income $ 53 (25)
 Gains excluded hedging relationship


4) Professional Service and Other:
Professional service and other revenues consist of revenues from consulting contracts and contracts to provide implementation, training and integration services (professional services). Other revenues consist of hardware revenues, which are grouped within the “Professional service and other” category because they are relatively immaterial to our service revenues. Professional services are typically performed after the purchase of new software licenses. Professional service and other revenues can vary from period to period based on the type of engagements as well as those implementations that are assumed by our partner network.
Cost of professional service and other revenues consists primarily of the costs of providing integration, configuration and training with respect to our various software products. The most significant components of these costs are personnel-related expenses, travel costs and third party subcontracting.
Professional service and other revenues decreased by $31.3 million or 9.9% during the year ended June 30, 2019 as compared to the prior fiscal year; down 7.4% after factoring the impact of $8.1 million of foreign exchange rate changes. Geographically, the overall change was attributable to a decrease in Americas of $19.0 million, a decrease in EMEA of $9.0 million and a decrease in Asia Pacific of $3.3 million.
Cost of Professional service and other revenues decreased by $28.8 million during the year ended June 30, 2019 as compared to the prior fiscal year as a result of a decrease in labour-related costs of approximately $29.0 million resulting primarily from a reduction in the use of external labour resources, partially offset by an increase in other miscellaneous costs of $0.2 million.
Overall, the gross margin percentage on Professional service and other revenues increased to approximately 21% from approximately 20%. This is the result of effectively executing our strategy of optimizing margins by being selective about the professional service engagements we accept.
Professional service and other revenues under proforma Topic 605 were not materially different from those under Topic 606 as discussed above.

                                                         |          |                            | Year Ended June 30, |                            |
-------------------------------------------------------- | -------- | -------------------------- | ------------------- | -------------------------- | --------
(In thousands)                                           | 2019     | Change increase (decrease) | 2018                | Change increase (decrease) | 2017
Professional Service and Other Revenues:                 |          |                            |                     |                            |
Americas                                                 | $132,426 | $(19,045)                  | $151,471            | $39,872                    | $111,599
EMEA                                                     | 122,861  | (8,982)                    | 131,843             | 29,601                     | 102,242
Asia Pacific                                             | 29,649   | (3,294)                    | 32,943              | 11,468                     | 21,475
Total Professional Service and Other Revenues            | 284,936  | (31,321)                   | 316,257             | 80,941                     | 235,316
Cost of Professional Service and Other Revenues          | 224,635  | (28,754)                   | 253,389             | 58,435                     | 194,954
GAAP-based Professional Service and Other Gross Profit   | $60,301  | $(2,567)                   | $62,868             | $22,506                    | $40,362
GAAP-based Professional Service and Other Gross Margin % | 21.2%    |                            | 19.9%               |                            | 17.2%
% Professional Service and Other Revenues by             |          |                            |                     |                            |
Geography:                                               |          |                            |                     |                            |
Americas                                                 | 46.5%    |                            | 47.9%               |                            | 47.4%
EMEA                                                     | 43.1%    |                            | 41.7%               |                            | 43.4%
Asia Pacific                                             | 10.4%    |                            | 10.4%               |                            | 9.2%

Professional Service Other
 revenues from consulting implementation training integration services. hardware immaterial to. performed after new software licenses. vary engagements implementations partner network.
 Cost integration configuration training software products. significant personnel-related expenses travel costs third party subcontracting.
 revenues decreased by $31. 3 million or 9. 9% ended June 30, 2019 down 7. 4% $8. 1 million foreign exchange rate changes. to decrease Americas $19. 0 million EMEA $9. 0 million Asia Pacific $3. 3 million.
 decreased by $28. 8 million June 30, 2019 decrease in labour-related costs $29. 0 million external labour resources offset by increase other miscellaneous costs $0. 2 million.
 gross margin percentage on increased to 21% from 20%. of optimizing margins professional service engagements.
 revenues under Topic 605 not different from Topic 606.
 Year Ended June 30,
2019 2018
 Professional Service Revenues
 Americas $132,426,045) $151,471 $39,872 $111,599
 EMEA 122,861 131,843 29,601 102,242
 Asia Pacific 29,649,294) 32,943 11,468 21,475
 Professional Service Revenues 284,936 (31,321 316,257 80,941 235,316
 Professional Service Revenues 224,635 (28,754 253,389 58,435 194,954
 GAAP Service Profit $60,301 $(2,567) $62,868 $22,506 $40,362
 Margin 21. 2%.
 Americas 46. 5%.
 EMEA.
 Asia Pacific.


Segment Data
Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses; for which separate financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance
of the individual segment and make decisions about resources to be allocated to the segment.
The Company derives its revenue from providing comprehensive electronics design, production and product management services. The chief operating decision maker evaluates performance and allocates resources on a segment basis. The Company’s operating segments consist of two segments – EMS and DMS, which are also the Company’s reportable segments. The segments are organized based on the economic profiles of the services performed, including manufacturing capabilities, market strategy, margins, return on capital and risk profiles.
The EMS segment is focused around leveraging IT, supply chain design and engineering, technologies largely centered on core electronics, utilizing the Company’s large scale manufacturing infrastructure and the ability to serve a broad range of end markets. The EMS segment is a high volume business that produces products at a quicker rate (i.e. cycle time) and in larger quantities and includes customers primarily in the automotive and transportation, capital equipment, cloud, computing and storage, defense and aerospace, industrial and energy, networking and telecommunications, print and retail, and smart home and appliances industries.
The DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, technologies and healthcare. The DMS segment includes customers primarily in the edge devices and accessories, healthcare, mobility and packaging industries.
Net revenue for the operating segments is attributed to the segment in which the service is performed. An operating segment’s performance is evaluated based on its pre-tax operating contribution, or segment income. Segment income is defined as net revenue less cost of revenue, segment selling, general and administrative expenses, segment research and development expenses and an allocation of corporate manufacturing expenses and selling, general and administrative expenses. Segment income does not include amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition and integration charges, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, restructuring of securities loss, goodwill impairment charges, business interruption and impairment charges, net, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations, other expense, interest income, interest expense, income tax expense or adjustment for net income (loss) attributable to noncontrolling interests.
Total segment assets are defined as accounts receivable, inventories, net, customer-related property, plant and equipment, intangible assets net of accumulated amortization and goodwill. All other non-segment assets are reviewed on a global basis by management. Transactions between operating segments are generally recorded at amounts that approximate those at which we would transact with third parties.
The following tables set forth operating segment information (in thousands):

                           | August 31, 2019 | August 31, 2018
-------------------------- | --------------- | ---------------
Total assets               |                 |
EMS                        | $4,353,465      | $3,456,866
DMS                        | 4,988,198       | 5,378,436
Other non-allocated assets | 3,628,812       | 3,210,339
                           | $12,970,475     | $12,045,641

 Operating segments components enterprise earn revenues expenses separate financial information results reviewed by chief decision
 resources.
 Company revenue electronics design production product management services. evaluates performance allocates resources. segments EMS DMS reportable. organized economic profiles manufacturing capabilities market strategy margins return on capital risk profiles.
 EMS segment IT supply chain design engineering core electronics large scale manufacturing infrastructure end markets. high volume. larger quantities customers automotive transportation capital equipment cloud computing storage defense aerospace industrial energy networking telecommunications print retail smart home appliances industries.
 DMS segment engineering solutions material sciences technologies healthcare. customers edge devices accessories healthcare mobility packaging industries.
 Net revenue attributed to segment. performance evaluated pre-tax operating contribution income. defined net revenue less cost revenue selling expenses research development expenses manufacturing expenses.Segment income amortization stock compensation restructuring distressed customer acquisition loss disposal settlement impairment restructuring goodwill business interruption discontinued operations sale interest tax noncontrolling interests.
 Total segment assets accounts receivable inventories customer-related property plant equipment intangible assets amortization goodwill. non assets reviewed. Transactions segments recorded third parties.
 tables segment information
 August 2019 August 2018
 Total assets
 $4,353,465 $3,456,866
 DMS 4,988,198 5,378,436
 non-allocated assets 3,628,812,339
 $12,970,475 $12,045,641


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share data)
NOTE 18 — Income Taxes
Earnings before income taxes consist of the following:

         |         | Years Ended December 31, |
-------- | ------- | ------------------------ | -------
         | 2019    | 2018                     | 2017
U.S.     | $15,103 | $30,815                  | $9,315
Non-U.S. | 35,163  | 27,288                   | 30,938
Total    | $50,266 | $58,103                  | $40,253

FINANCIAL STATEMENTS thousands
 18 Income Taxes
 Earnings
 Ended December 31,
 2018
. $15,103 $30,815 $9,315
 Non. 35,163 27,288 30,938
 $50,266 $58,103 $40,253


8. Debt and Interest Rate Swap
Debt The carrying amount of the Company's long-term debt consists of the following:
On May 12, 2017, the Company entered into a credit agreement with certain lenders and a collateral agent in connection with the acquisition of Exar (Note 3). The credit agreement provides for an initial secured term B loan facility (the “Initial Term Loan”) in an aggregate principal amount of $425.0 million. The credit agreement permits the Company to request incremental loans in an aggregate principal amount not to exceed the sum of $160.0 million (subject to adjustments for any voluntary prepayments), plus an unlimited amount that is subject to pro forma compliance with certain secured leverage ratio and total leverage ratio tests. Incremental loans are subject  to certain additional conditions, including obtaining additional commitments from the lenders then party to the credit agreement or new lenders.
Loans under the credit agreement bear interest, at the Company’s option, at a rate equal to either (i) ab ase rate equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one- three- or six-month interest period, plus 1.0% or (ii) an adjusted LIBOR rate, subject to a floor of 0.75%, in each case, plus an applicable margin of 2.50% in the case of LIBOR rate loans and 1.50% in the case of base rate loans. Commencing on September 30, 2017, the Initial Term Loan will amortize in equal quarterly installments equal to 0.25% of the original principal amount of the Initial Term Loan, with the balance payable on the maturity date. The Initial Term Loan has a term of seven years and will mature on May 12, 2024, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan must be repaid. The Company is also required to pay fees customary for a credit facility of this size and type.
The Company is required to make mandatory prepayments of the outstanding principal amount of term loans under the credit agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness. The Company has the right to prepay its term loans under the credit agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0% soft call premium applicable during the first six months for the loan term. The Company exercised its right to prepay and made aggregate payments of principal of $213.0 million to date through December 31, 2019.
The Company’s obligations under the credit agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the credit agreement. Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the subsidiary guarantors pursuant to a security agreement with the collateral agent.
The credit agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other indebtedness, covenant defaults, change in control defaults, judgment defaults, and bankruptcy and insolvency defaults. If an event of default exists, the lenders may require immediate payment of all obligations under the credit agreement, and may exercise certain other rights and remedies provided for under the credit agreement, the other loan documents and applicable law.
As of December 31, 2019 and 2018, the weighted average effective interest rate on long-term debt was approximately4 .9% and 4.6%, respectively.
The debt is carried at its principal amount, net of unamortized debt discount and issuance costs, and is not adjusted to fair value each period. The issuance date fair value of the liability component of the debt in the amount of $398.5 million was determined using a discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the term loan at a market interest rate for nonconvertible debt of 4.6%, which represents a Level 2 fair value measurement. The debt discount of $2.1 million and debt issuance costs of $6.0 million are being amortized to interest expense using the effective interest method from the issuance date through the contractual maturity date of the term loan of May 12, 2024.
During the year ended December 31, 2017, the Company recognized amortization of debt discount of $0.2 million and debt issuance costs of $0.6 million to interest expense.
The approximate fair value of the term loan as of December 31, 2019 and 2018 was $214.6 million and $268.1 million, respectively, which was estimated on the basis
of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy.
As of December 31, 2019 and 2018, the remaining principal balance on the term loan was $212.0 million and $262.0 million, respectively. The remaining principal
balance is due on May 12, 2024 at the maturity date on the term loan.

                                        | December 31, 2019 | December 31, 2018
--------------------------------------- | ----------------- | -----------------
                                        | (in thousands)    |
Principal                               | $212,000          | $262,000
Less:                                   |                   |
Unamortized debt discount               | (1,328)           | (1,630)
Unamortized debt issuance costs         | (3,763)           | (4,613)
Net carrying amount of long-term debt   | 206,909           | 255,757
Less: current portion of long-term debt | —                 | —
Long-term debt, non-current portion     | $206,909          | 255,757

. Debt Interest Rate Swap
 Company's long-term debt
 May 12, 2017 Company entered credit agreement lenders collateral agent acquisition Exar. agreement initial secured term B loan facility principal $425. 0 million. permits request incremental loans not exceed $160. 0 million adjustments voluntary unlimited amount compliance secured leverage ratio ratio tests. loans subject additional conditions commitments from lenders new.
 Loans bear interest rate equal rate federal funds rate plus 0. 50% prime rate adjusted LIBOR rate 1. 0% or adjusted LIBOR rate 0. 75% margin 2. 50% LIBOR rate 1. 50% base rate loans. Commencing September 30, 2017 Initial Term Loan quarterly installments 0. 25% original principal balance payable maturity date. seven years May 12, 2024 outstanding principal unpaid interest repaid. Company required pay fees credit facility.
Company required mandatory prepayments outstanding principal term loans credit agreement net cash proceeds disposition assets insurance proceeds casualty condemnation events excess cash flow beyond incurrence indebtedness. prepay term loans without premium penalty subject limitations 1. 0% soft call premium first six months. made payments principal $213. 0 million December 31, 2019.
 obligations guaranteed by domestic subsidiaries. obligations secured by assets subsidiary guarantors security agreement.
 credit agreement contains events default payment cross covenant change control judgment bankruptcy insolvency. lenders require immediate payment exercise other rights remedies.
 December 31, 2019 2018 weighted average effective interest rate long-term debt approximately4. 9% 4. 6%.
 debt carried principal amount net unamortized debt discount issuance costs not adjusted fair value. issuance date fair value liability component $398.million determined discounted cash flow analysis projected interest principal payments discounted issuance date loan market interest rate nonconvertible 4. 6% Level 2 fair value measurement. debt discount $2. 1 million issuance costs $6. million amortized interest expense issuance maturity May 12, 2024.
 December 31, 2017 recognized amortization debt discount $0. 2 million issuance costs $0. 6 million interest expense.
 approximate fair value loan December 31, 2019 2018 $214. 6 million $268. 1 million estimated
 Level 2.
 remaining principal balance $212. million $262. million.
 due May 12, 2024 maturity date.
 $212,000
 Unamortized debt discount (1,328)
 issuance costs (3,763)
 long-term debt 255,757


Sources and uses of cash
Cash flow movement for the year ended March 31, 2019 compared to year ended March 31, 2018
Net cash generated from operating activities in fiscal year 2019 was $75.0 million compared to $83.2 million in the in fiscal year 2018, a decrease of $8.2 million, or 9.9%, primarily due to decrease in working capital movement of $65.1 million, mainly attributable to increase in trade receivables by $88.5 million and increase in trade payables by $23.4 million and as a result of lower operating profit before exceptional item generated in fiscal year 2019 as compared to fiscal year 2018.
Net cash used in investing activities in fiscal year 2019 was $157.7 million compared to $185.4 million in fiscal year 2018, a decrease of $27.7 million, or 14.9%, primarily as a result of investment in restricted deposits amounting to $53.5 million in fiscal year 2019 and offset by the decrease in purchase of intangible film rights and content rights in fiscal year 2019 was $107.7 million, compared to $186.8 million in fiscal year 2018, decrease of $79.1 million, or 42.3%.
Net cash from financing activities in fiscal year 2019 was $84.1 million compared to $77.4 million in fiscal year 2018, an increase of $6.7 million, or 8.7%, primarily as a result of the proceeds from the issuance of share capital and an increase in short-term borrowings in fiscal year, 2019.
Cash flow movement for the year ended March 31, 2018 compared to year ended March 31, 2017
Net cash generated from operating activities in fiscal year 2018, was $83.2 million, compared to $99.0 million in fiscal year 2017, a decrease of $15.8 million, or 15.9%, primarily due to decrease in working capital movement of $24.3 million mainly attributable to increase in trade receivables to $19.1 million and decrease in trade payables by $5.4 million. The cash flow from operating activities has also decreased due to increase in interest and income tax paid in fiscal 2018 by 2.4 million and $2.9 million respectively. The aforesaid decrease is partially offset on account of deconsolidation of a subsidiary during the year.
Net cash used in investing activities in fiscal year 2018 was $185.4 million, compared to $175.2 million in fiscal year 2017, an increase of $10.2 million, or 5.8%, due to the change in mix of films released in fiscal year 2018. The purchase of intangible film rights and content rights in fiscal year 2018 was $186.8 million, compared to $173.5 million in fiscal year 2017, an increase of $13.3 million, or 7.7%.
Net cash generated from financing activities in fiscal year 2018 was $77.4 million, compared to $5.9 million in fiscal year 2017, an increase of $71.5 million, or 1,205.7%, primarily due proceeds from issue of share capital of $16.6 million, proceeds from sale of shares of a subsidiary of $40.2 million and share application money of 18.0 million.
Capital expenditures
In fiscal year 2019, the company invested over $264.3 million (of which cash outflow is $107.7 million) in film content, and in fiscal 2020 the company expects to invest approximately $150 to $160 million in film content.

                                      |            | Year Ended March 31, |
------------------------------------- | ---------- | -------------------- | ----------
                                      | 2019       | 2018                 | 2017
                                      |            | (in thousands)       |
Net cash from operating activities    | $74,966    | $83,243              | $98,993
Net cash used in investing activities | $(157,733) | $(185,420)           | $(175,191)
Net cash from financing activities    | $84,117    | $77,415              | $5,929

Sources uses cash
 March 31, 2019
 Net cash $75. 0 million $83. 2 million 2018 decrease $8. 2 million 9. 9% working capital $65. 1 million trade receivables $88. 5 million payables $23. 4 million lower operating profit.
 cash investing $157. 7 million $185. 4 million 2018 decrease $27. 7 million 14. restricted deposits $53. 5 million intangible film rights content rights $107. 7 million $186. 8 million 2018 $79. 1 million 42. 3%.
 cash financing $84. 1 million $77. 4 million 2018 increase $6. 7 million 8. 7% share capital short borrowings.
 March 31, 2018
 $83. 2 million $99. 0 million 2017 decrease $15. 8 million 15. working capital $24. 3 million trade receivables $19. 1 million trade payables $5. 4 million. cash flow decreased interest income tax 2. 4 million $2. 9 million. offset deconsolidation subsidiary.
investing 2018 $185. 4 million $175. 2 million 2017 increase $10. 2 million. 8% films. purchase film $186. 8 million $173. 5 million 2017 increase $13. 3 million 7. 7%.
 financing $77. 4 million $5. 9 million 2017 increase $71. 5 million. 7% share capital $16. 6 million sale subsidiary $40. 2 million share application money 18. million.
 2019 invested $264. 3 million cash outflow $107. 7 million film 2020 $150 $160 million.
 cash operating $74,966 $83,243 $98,993
 investing $(157,733)(185,420(175,191)
 financing $84,117 $77,415 $5,929


The following table summarizes our principal contractual obligations and sets forth the amounts of required or contingently required cash outlays in 2020 and future years:
(1) Current portion of long-term debt is exclusive of present value discounting for finance lease obligations of $1.7 million. The long-term debt is exclusive of capitalized lender fees of $22.2 million, present value discounting for finance lease obligations of $6.1 million, and debt discounts of $2.3 million.
(2) Includes interest payments required under our senior notes issuances and Amended Credit Facility only. The interest payments included above for our Term Loan A were calculated using the following assumptions: • interest rates based on stated LIBOR rates as of December 31, 2019; and • all non-US Dollar balances are converted using exchange rates as of December 31, 2019.
(3) Obligations related to defined benefit pension plans and other post-employment benefit plans have been excluded from the table above, due to factors such as the retirement of employees, the performance of plan assets and economic and actuarial assumptions, as it is not reasonably possible to estimate when these obligations will become due. Refer to Note 17, “Profit Sharing, Retirement Savings Plans and Defined Benefit Pension Plans,” and Note 18, “Other Post- Employment Benefits and Other Employee Benefit Plans,” of the Notes to Consolidated Financial Statements for additional information related to these plans.
Short-term Borrowings, Current Portion of Long-Term Debt and Long-Term Debt
Short-term borrowings, current portion of long-term debt and long-term debt represent the principal amount of the debt
required to be repaid in each period.
Operating Leases
The contractual operating lease obligations listed in the table above represent estimated future minimum annual rental commitments primarily under non-cancelable real and personal property leases as of December 31, 2019.
Other Principal Contractual Obligations
Other principal contractual obligations include agreements to purchase an estimated amount of goods, including raw materials, or services, including energy, in the normal course of business. These obligations are enforceable and legally binding and specify all significant terms, including fixed or minimum quantities to be purchased, minimum or variable price provisions and the approximate timing of the purchase. The amounts included in the table above represent estimates of the minimum amounts we are obligated to pay, or reasonably likely to pay under these agreements. We may purchase additional goods or services above the minimum requirements of these obligations and, as a result use additional cash.

                                                    |           |         | Payments Due by Years |           |
--------------------------------------------------- | --------- | ------- | --------------------- | --------- | ----------
(In millions)                                       | Total     | 2020    | 2021-2022             | 2023-2024 | Thereafter
Contractual Obligations                             |           |         |                       |           |
Short-term borrowings                               | $ 98.9    | $ 98.9  | $ —                   | $ —       | $ —
Current portion of long-term debt(1)                | 18.4      | 18.4    | —                     | —         | —
Long-term debt(1)                                   | 3,729.2   | —       | 938.9                 | 1,499.8   | 1,290.5
Total debt                                          | $ 3,846.5 | $ 117.3 | $ 938.9               | $ 1,499.8 | $ 1,290.5
Interest payments due on long-term debt(2)          | 1,057.2   | 180.4   | 342.7                 | 204.7     | 329.4
Operating leases                                    | 105.4     | 30.6    | 40.0                  | 18.7      | 16.1
First quarter 2020 quarterly cash dividend declared | 24.8      | 24.8    | —                     | —         | —
Other principal contractual obligations             | 86.2      | 35.6    | 31.4                  | 19.2      | —
Total contractual cash obligations(3)               | $ 5,120.1 | $ 388.7 | $ 1,353.0             | $ 1,742.4 | $ 1,636.0

table summarizes contractual obligations required cash outlays 2020 future
 long-term debt exclusive value discounting finance lease obligations $1. 7 million. capitalized fees $22. 2 million value discounting lease $6. 1 million debt discounts $2. 3 million.
 Includes interest payments senior notes Amended Credit Facility. interest payments calculated interest rates LIBOR rates December 31, 2019 non-US Dollar balances converted exchange rates 31, 2019.
 Obligations defined benefit pension plans post benefit plans excluded retirement performance assets economic actuarial assumptions. Note 17, Sharing Retirement Savings Plans Pension Plans Note 18 Financial Statements information.
 Short-term Borrowings Long-Term Debt Long
 principal
.
 Leases
 obligations estimated future annual rental commitments non-cancelable property leases December 31, 2019.
 Principal Contractual Obligations
 agreements purchase goods services energy.obligations enforceable binding specify terms fixed quantities price provisions timing. amounts represent estimates minimum amounts. purchase additional goods services above use additional cash.
 Payments Due Years
 millions 2020 2021-2022 2023-2024
 Contractual Obligations
 Short-term borrowings $ 98. $ 98.
 long-term 18.
 3,729. 938. 1,499. 1,290.
 Total debt $ 3,846. $ 117. 938. 1,499. 1,290.
 Interest payments long-term 1,057. 180. 342. 204. 329.
 Operating leases 105. 30. 40. 18. 16.
 First quarter 2020 quarterly cash dividend 24. 24.
 contractual obligations 86. 35. 31. 19.
 Total contractual cash obligations(3) $ 5,120. $ 388. $ 1,353. 1,742. $ 1,636.


(19) Income Taxes
As of December 31, 2019 and 2018, the components of deferred tax assets primarily relate to equity method investments, equity-based compensation, deferred revenues, interest rate swaps, employee benefits accruals and deferred compensation. As of December 31, 2019 and 2018, the components of deferred tax liabilities primarily relate to depreciation and amortization of intangible assets, property and equipment and deferred contract costs.
The significant components of deferred tax assets and liabilities consist of the following (in millions):

                                          | December 31, |
----------------------------------------- | ------------ | --------
                                          | 2019         | 2018
Deferred tax assets:                      |              |
Equity method investments                 | $25.7        | $—
Equity-based compensation                 | 12.6         | 9.2
Deferred revenues                         | 6.2          | 14.8
Interest rate swaps                       | 5.6          | —
Other                                     | 13.0         | 11.4
Total deferred tax assets                 | 63.1         | 35.4
Deferred tax liabilities:                 |              |
Goodwill and other intangibles            | (168.7)      | (178.9)
Deferred contract costs                   | (40.3)       | (41.9)
Property, equipment and computer software | (34.3)       | (28.0)
Other                                     | (5.1)        | (7.5)
Total deferred tax liabilities            | (248.4)      | (256.3)
Net deferred tax liability                | $(185.3)     | $(220.9)

Income Taxes
 December 31, 2019 2018 deferred tax assets equity investments compensation deferred revenues interest rate swaps employee benefits accruals compensation. liabilities depreciation amortization intangible assets property equipment deferred contract costs.
 Deferred tax assets
 Equity investments $25.
 Equity-based compensation.
 Deferred revenues.
 Interest rate swaps.
.
 deferred tax assets 63. 35.
 Deferred tax liabilities
 Goodwill intangibles (168.
 Deferred contract costs.
 Property equipment computer software.
.
 deferred tax liabilities (248. (256.
 Net deferred tax liability $(185. $(220.


GreenSky, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (United States Dollars in thousands, except per share data, unless otherwise stated)
Finance charge reversal liability
Our Bank Partners offer certain loan products that have a feature whereby the account holder is provided a promotional period to repay the loan principal balance in full without incurring a finance charge. For these loan products, we bill interest each month throughout the promotional period and, under the terms of the contracts with our Bank Partners, we are obligated to pay this billed interest to the Bank Partners if an account holder repays the loan balance in full within the promotional period. Therefore, the monthly process of billing interest on deferred loan products triggers a potential future finance charge reversal ("FCR") liability for the Company. The FCR component of our Bank Partner contracts qualifies as an embedded derivative. The FCR liability is not designated as a hedge for accounting purposes and, as such, changes in its fair value are recorded within cost of revenue in the Consolidated Statements of Operations.
The FCR liability is carried at fair value on a recurring basis in the Consolidated Balance Sheets and is estimated based on historical experience and management’s expectation of future FCR. The FCR liability is classified within Level 3 of the fair value hierarchy, as the primary component of the fair value is obtained from unobservable inputs based on the Company’s data, reasonably adjusted for assumptions that would be used by market participants. The following table reconciles the beginning and ending fair value measurements of our FCR liability during the periods indicated.
(1) Includes: (i) incentive payments from Bank Partners, which is the surplus of finance charges billed to borrowers over an agreedupon portfolio yield, a fixed servicing fee and realized net credit losses, (ii) cash received from recoveries on previously charged-off Bank Partner loans, and (iii) the proceeds received from transferring our rights to Charged-Off Receivables attributable to previously charged-off Bank Partner loans. We consider all monthly incentive payments from Bank Partners during the period to be related to billed finance charges on deferred interest products until monthly incentive payments exceed total billed finance charges on deferred products, which did not occur during any of the periods presented.
(2) Represents the reversal of previously billed finance charges associated with deferred payment loan principal balances that were repaid within the promotional period.
(3) A fair value adjustment is made based on the expected reversal percentage of billed finance charges (expected settlements), which is estimated at each reporting date. The fair value adjustment is recognized in cost of revenue in the Consolidated Statements of Operations.

                                                    |           | Year Ended December 31, |
--------------------------------------------------- | --------- | ----------------------- | ---------
                                                    | 2019      | 2018                    | 2017
Beginning balance                                   | $138,589  | $94,148                 | $68,064
Receipts(1)                                         | 159,527   | 129,153                 | 109,818
Settlements(2)                                      | (262,449) | (181,590)               | (127,029)
Fair value changes recognized in cost of revenue(3) | 170,368   | 96,878                  | 43,295
Ending balance                                      | $206,035  | $138,589                | $94,148

GreenSky, Inc. NOTES FINANCIAL STATEMENTS States Dollars thousands share data
 Finance charge reversal liability
 Bank Partners offer loan products promotional period repay loan principal balance without finance charge. bill interest obligated pay interest if repays. billing interest triggers future finance charge reversal liability. FCR derivative. liability not hedge changes fair value recorded cost revenue Consolidated Statements of Operations.
 FCR liability carried fair value recurring Balance Sheets estimated historical experience expectation future FCR. Level 3 fair value hierarchy obtained from unobservable inputs data adjusted assumptions. table reconciles beginning ending fair value measurements FCR liability.
 Includes incentive payments Bank Partners surplus finance charges fixed servicing fee net credit losses cash recoveries previously charged-off Bank Partner loans proceeds transferring rights Charged-Off Receivables.incentive payments Bank Partners deferred products.
 reversal charges deferred balances repaid.
 fair value adjustment reversal estimated reporting date. recognized revenue Consolidated Statements Operations.
 Ended December 31,
 2018 2017
 Beginning balance $138,589 $94,148 $68,064
 Receipts(1) 159,527 129,153 109,818
 Settlements(2) (262,449 (181,590) (127,029)
 Fair value changes cost revenue(3) 170,368 96,878 43,295
 Ending balance $206,035 $138,589 $94,148


10 Taxation (continued)
There are unrecognised deferred tax assets on the following temporary differences (presented below before the application of the relevant tax rate) due to uncertainty over the level of profits in the non-REIT elements of the Group in future periods:
The Company recognises no deferred tax asset or liability (2018: nil).

£m                                       | 2019  | 2018
---------------------------------------- | ----- | -----
Revenue losses – UK                      | 398.4 | 300.8
Capital losses – UK                      | 34.5  | 34.2
Derivative financial instruments         | 172.7 | 184.9
Other temporary differences              | 20.1  | 9.7
Total unrecognised temporary differences | 625.7 | 529.6

Taxation
 unrecognised deferred tax assets differences uncertainty profits non-REIT future
 Company no deferred tax asset liability.
 £m 2019
 Revenue losses 398. 300.
 Capital losses 34.
 financial instruments 172. 184.
 temporary differences 20. 9.
 unrecognised temporary differences 625. 529.


Dividends
The following table shows our total cash dividends paid in the years ended December 31:
On February 13, 2020, our Board of Directors declared a quarterly cash dividend of $0.16 per common share payable on March 20, 2020 to stockholders of record at the close of business on March 6, 2020. The estimated amount of this dividend payment is $24.8 million based on 154.7 million shares of our common stock issued and outstanding as of February 21, 2020.
The dividend payments discussed above are recorded as reductions to cash and cash equivalents and retained earnings on our Consolidated Balance Sheets. Our credit facility and our senior notes contain covenants that restrict our ability to declare or pay dividends and repurchase stock. However, we do not believe these covenants are likely to materially limit the future payment of quarterly cash dividends on our common stock. From time to time, we may consider other means of returning value to our stockholders based on our consolidated financial condition and results of operations. There is no guarantee that our Board of Directors will declare any further dividends.

(In millions, except per share amounts) | Total Cash Dividends Paid | Total Cash Dividends Paid Per Common Share
--------------------------------------- | ------------------------- | ------------------------------------------
2017                                    | $119.7                    | $0.64
2018                                    | 102.9                     | 0.64
2019                                    | 99.1                      | 0.64
Total                                   | $321.7                    |

 table shows cash dividends December 31
 February 13, 2020 Board Directors declared quarterly dividend $0. 16 per common share payable March 20, 2020 stockholders business March 6, 2020. estimated $24. 8 million 154. 7 million shares common stock February 21, 2020.
 dividend payments recorded cash equivalents retained earnings Consolidated Balance Sheets. credit facility senior notes covenants declare dividends repurchase stock. covenants limit future dividends. consider value financial condition. no guarantee Board declare dividends.
 Total Cash Dividends Paid Share
 2017 $119.
 2018.
 2019.
 $321.


Results of Operations: Years Ended December 31, 2018, versus Year Ended December 31, 2017 (Amounts in thousands, except percentages and per share amounts):
Capital Resources
Long-term debt was comprised of the following:
On February 12, 2019, we entered into an amended and restated five-year Credit Agreement with a group of banks (the "Credit Agreement") to extend the term of the facility. The Credit Agreement provides for a revolving credit facility of $300,000, which may be increased by $150,000 at the request of the Company, subject to the administrative agent's approval. This new unsecured credit facility replaces the prior $300,000 unsecured credit facility, which would have expired August 10, 2020. Borrowings of $50,000 under the prior credit agreement were refinanced into the Credit Agreement. The prior agreement was terminated as of February 12, 2019.
The Revolving Credit Facility includes a swing line sublimit of $15,000 and a letter of credit sublimit of $10,000. Borrowings under the Revolving Credit Facility bear interest at the base rate defined in the Credit Agreement. We also pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility. The commitment fee ranges from 0.20% to 0.30% based on the our total leverage ratio.
We have entered into interest rate swap agreements to fix interest rates on $50,000 of long-term debt through February 2024. The difference to be paid or received under the terms of the swap agreements is recognized as an adjustment to interest expense when settled.
We have historically funded our capital and operating needs primarily through cash flows from operating activities, supported by available credit under our Revolving Credit Facility. We believe that cash flows from operating activities and available borrowings under our Revolving Credit Facility will be adequate to fund our working capital needs, capital expenditures, and debt service requirements for at least the next twelve months. However, we may choose to pursue additional equity and debt financing to provide additional liquidity or to fund acquisitions.

                                    | As of December 31, |
----------------------------------- | ------------------ | --------
                                    | 2019               | 2018
Total credit facility               | $300,000           | $300,000
Balance Outstanding                 | $99,700            | $50,000
Standby letters of credit           | $1,800             | $1,940
Amount available                    | $198,500           | $248,060
Weighted-average interest rate      | 3.25%              | 3.10%
Commitment fee percentage per annum | 0.23%              | 0.20%

Operations Years Ended December 31, 2018 2017 thousands percentages per share
 Capital Resources
 Long-term debt
 February 12, 2019 five-year Credit Agreement banks extend term facility. revolving credit facility $300,000 increased $150,000 approval. replaces prior $300,000 expired August 10, 2020. Borrowings $50,000 prior refinanced. terminated February 12, 2019.
 Revolving Credit Facility includes swing line sublimit $15,000 letter credit sublimit $10,000. Borrowings bear interest base rate. quarterly commitment fee. fee ranges 0. 20% to. 30% leverage ratio.
 interest rate swap agreements fix $50,000 long-term debt February 2024. difference adjustment interest expense.
 funded capital operating needs cash flows supported credit Revolving Credit Facility. cash flows working capital expenditures debt service twelve months. pursue additional equity debt financing acquisitions.
 December 31,
 2019 2018
 Total credit facility $300,000
$99,700 $50,000
 $1,800 $1,940
 $198,500 $248,060
 interest. 25%. 10%
 Commitment fee.


ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands)
The accompanying notes are an integral part of the consolidated financial statements.

                                         |         | Years Ended December 31, |
---------------------------------------- | ------- | ------------------------ | -------
                                         | 2019    | 2018                     | 2017
Net income                               | $67,062 | $68,921                  | $5,135
Other comprehensive income (loss):       |         |                          |
Foreign currency translation adjustments | 1,034   | -15,261                  | 16,744
Total other comprehensive income (loss)  | 1,034   | (15,261 )                | 16,744
Comprehensive income                     | $68,096 | $53,660                  | $21,879

WORLDWIDE. SUBSIDIARIES STATEMENTS INCOME
 notes consolidated financial statements.
 Ended December 31,
 Net income $67,062 $68,921 $5,135
 income
 Foreign currency translation adjustments 1,034,261 16,744
 income
 Comprehensive income $68,096 $53,660 $21,879


According to the regulations of Taiwan Financial Supervisory Commission (FSC), UMC is required to appropriate a special reserve in the amount equal to the sum of debit elements under equity, such as unrealized loss on financial instruments and debit balance of exchange differences on translation of foreign operations, at every year-end. Such special reserve is prohibited from distribution. However, if any of the debit elements is reversed, the special reserve in the amount equal to the reversal may be released for earnings distribution or offsetting accumulated deficits.
The distribution of earnings for 2018 was approved by the stockholders’ meeting held on June 12, 2019, while the distribution of earnings for 2019 was approved by the Board of Directors’ meeting on April 27, 2020. The details of distribution are as follows:

                | Appropriation of earnings (in thousand NT dollars) Appropriation of earnings (in thousand NT dollars) |             | Cash dividend per share (NT dollars) |
--------------- | ----------------------------------------------------------------------------------------------------- | ----------- | ------------------------------------ | -----
                | 2018                                                                                | 2019        | 2018                                 | 2019
Legal reserve   | $707,299                                                                                | $963,947    |                                      |
Special reserve | 14,513,940                                                                                | (3,491,626) |                                      |
Cash dividends  | 6,916,105                                                                                | 9,765,155   | $0.58                                | $0.75

Taiwan Financial Supervisory Commission UMC special reserve equal debit elements equity unrealized loss financial instruments debit exchange differences foreign operations year-end. reserve prohibited distribution. reversed reserve released earnings distribution deficits.
 distribution earnings 2018 approved stockholders’ meeting June 12 2019 2019 Board Directors’ meeting April 27, 2020. details
 Appropriation earnings Cash dividend per share dollars
 2018 2019
 Legal reserve $707,299 $963,947
 Special reserve 14,513,940 (3,491,626)
 Cash dividends,105 9,765,155  $0.


GasLog Ltd. and its Subsidiaries
Notes to the consolidated financial statements (Continued)
For the years ended December 31, 2017, 2018 and 2019
(All amounts expressed in thousands of U.S. Dollars, except share and per share data)
10. Other Non-Current Assets
Other non-current assets consist of the following:
Cash collaterals on swaps represent cash deposited for the Group’s interest rate swaps being the difference between their fair value and an agreed threshold.

                          | As of December 31, |
------------------------- | ------------------ | ------
                          | 2018               | 2019
Various guarantees        | 451                | 388
Other long-term assets    | 2,092              | 1,613
Cash collaterals on swaps | —                  | 22,220
Total                     | 2,543              | 24,221

GasLog Ltd. Subsidiaries
 consolidated financial statements
 December 31, 2017 2018 2019
 amounts. Dollars
. Non-Current Assets
 Cash collaterals swaps interest rate swaps difference fair value threshold.
 December 31,
 2019
 guarantees
 long-term assets 1,613
 Cash collaterals swaps 22,220
 24,221


The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities are as follows:
As of December 31, 2019 and 2018, the Company had federal net operating loss carryforwards (“NOL”) of approximately $7,161,000 and $6,617,000, respectively. The
losses expire beginning in 2024. The Company has not performed a detailed analysis to determine whether an ownership change under IRC Section 382 has occurred. The effect
of an ownership change would be the imposition of annual limitation on the use of NOL carryforwards attributable to periods before the change Any limitation may result in
expiration of a portion of the NOL before utilization. As of December 31, 2019 and 2018, the Company had state and local net operating loss carryforwards of approximately
$7,153,000 and $6,609,000, respectively, to reduce future state tax liabilities also through 2035.
As of December 31, 2019 and 2018, the Company had Canadian NOL of approximately $1,111,000 and $1,070,000, respectively. The Canadian losses expire in stages
beginning in 2026. As of December 31, 2019 and 2018, the Company also has unclaimed Canadian federal scientific research and development investment tax credits, which are
available to reduce future federal taxes payable of approximately $0 and $0 respectively.
As of December 31, 2019 and 2018, the Company had Canadian NOL of approximately $1,111,000 and $1,070,000, respectively. The Canadian losses expire in stages beginning in 2026. As of December 31, 2019 and 2018, the Company also has unclaimed Canadian federal scientific research and development investment tax credits, which are available to reduce future federal taxes payable of approximately $0 and $0 respectively. As of December 31, 2019 and 2018, the Company had Canadian NOL of approximately $1,111,000 and $1,070,000, respectively. The Canadian losses expire in stages beginning in 2026. As of December 31, 2019 and 2018, the Company also has unclaimed Canadian federal scientific research and development investment tax credits, which are available to reduce future federal taxes payable of approximately $0 and $0 respectively. As of December 31, 2019 and 2018, the Company had Canadian NOL of approximately $1,111,000 and $1,070,000, respectively. The Canadian losses expire in stages beginning in 2026. As of December 31, 2019 and 2018, the Company also has unclaimed Canadian federal scientific research and development investment tax credits, which are available to reduce future federal taxes payable of approximately $0 and $0 respectively.
As a result of losses and uncertainty of future profit, the net deferred tax asset has been fully reserved. The net change in the valuation allowance during the years
ended December 31, 2019 and 2018 was an increase of $661,000 and $457,000, respectively
Foreign earnings are assumed to be permanently reinvested. U.S. Federal income taxes have not been provided on undistributed earnings of our foreign subsidiary.
The Company recognizes interest and penalties related to uncertain tax positions in selling, general and administrative expenses. The Company has not identified any
uncertain tax positions requiring a reserve as of December 31, 2019 and 2018.
The Company is required to file U.S. federal and state income tax returns. These returns are subject to audit by tax authorities beginning with the year ended December 31, 2014.

                                                      | 2019        | 2018
----------------------------------------------------- | ----------- | -----------
U.S. net operating loss carryforwards                 | 2,894,000   | 2,627,000
Stock compensation                                    | 784,000     | 359,000
Canadian Provincial income tax losses                 | 29,000      | 56,000
Canadian Provincial scientific investment tax credits | (4,000)     | -
                                                      | 3,703,000   | 3,042,000
Valuation allowance                                   | (3,703,000) | (3,042,000)
Net deferred tax assets                               | -           | -

tax effects temporary differences Company’s deferred tax assets liabilities
 December 31, 2019 2018 Company had federal net operating loss carryforwards $7,161,000 $6,617,000.
 losses expire 2024. analysis ownership change under IRC Section 382.
 ownership change annual limitation NOL carryforwards limitation
 expiration NOL before utilization. had state local net operating loss carryforwards
 $7,153,000 $6,609,000 reduce future state tax liabilities through 2035.
 Canadian NOL $1,111,000 $1,070,000. losses expire
 2026. unclaimed Canadian federal scientific research development investment tax credits
 reduce future federal taxes $0 $0.
 Canadian NOL $1,111,000 $1,070,000. losses expire 2026. unclaimed investment tax credits reduce future federal taxes $0 $0. $1,070,000. losses expire 2026. unclaimed Canadian federal scientific research investment tax credits reduce future federal taxes $0. Canadian NOL $1,111,000 $1,070,000.Canadian losses expire 2026. December 31, 2019 Company unclaimed Canadian federal scientific tax credits future taxes $0 $0.
 net deferred tax asset reserved. valuation allowance
 2019 2018 $661,000 $457,000
 Foreign earnings reinvested. Federal income taxes undistributed earnings foreign subsidiary.
 recognizes interest penalties uncertain tax positions.
 uncertain tax positions reserve December 31, 2019 2018.
 file. federal state income tax returns. audit December 31, 2014.
. net operating loss 2,894,000 2,627,000
 Stock compensation 784,000
 Provincial income tax losses 29,000
 scientific investment tax credits
 Valuation allowance
 Net deferred tax assets


For the fourth quarter of 2019, we reported a net income of $392 million, compared to a net income of $302 million and $418 million in the prior and year-ago quarters, respectively. The fourth quarter 2019 net income represented diluted earnings per share of $0.43 compared to $0.34 in the prior quarter and $0.46 in the prior-year quarter.
Net income attributable to parent company

                                          |                   | Three Months Ended       |
----------------------------------------- | ----------------- | ------------------------ | -----------------
                                          | December 31, 2019 | September 29, 2019       | December 31, 2018
                                          |                   | (Unaudited, in millions) |
Net income attributable to parent company | $392              | $302                     | $418
As percentage of net revenues             | 14.2%             | 11.8%                    | 15.8%

fourth quarter 2019 net income $392 million $302 $418 million. diluted earnings per share $0. 43 $0. 34. 46.
 Net income parent company
 Three Months Ended
 December 31, 2019 September 29, December 31, 2018
 Net income $392 $302 $418
 percentage net revenues 14. 2%. 8%.


Net financial result and taxes
1 Adjustment of previous year according to explanation in notes.
Net financial result The net financial result from continuing operations primarily comprises the interest result of €−119 million (2017/18: €−136 million) and the other financial result of €1 million (2017/18: €−2 million). Net interest result improved significantly as a result of more favourable refinancing terms.

€ million                                                              | 2017/2018 | 2018/2019
---------------------------------------------------------------------- | --------- | ---------
Earnings before interest and taxes EBIT                                | 713       | 828
Earnings share of non-operating companies recognised at equity         | 0         | 0
Other investment result                                                | 0         | −1
Interest income/expenses (interest result)                             | −136      | −119
Other financial result                                                 | −2        | 1
Net financial result                                                   | −137      | −119
Earnings before taxes EBT                                              | 576       | 709
Income taxes                                                           | −216      | −298
Profit or loss for the period from continuing operations               | 359       | 411
Profit or loss for the period from discontinued operations after taxes | −22       | −526
Profit or loss for the period                                          | 337       | −115

financial result taxes
 Adjustment previous year.
 interest €−119 million €−136 million financial €1 million €−2 million. improved favourable refinancing terms.
 2017/2018 2018/2019
 Earnings before interest taxes EBIT 713  828
 non-operating companies
 Interest income/expenses −136 −119
 −137 −119
 Earnings before taxes EBT 576 709
 −216 −298
 Profit loss continuing operations 359 411
 discontinued operations taxes −22 −526
 337 −115


The net deferred tax assets (liabilities) are comprised of the following (in thousands):
A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2019. Such objective evidence limits the ability to consider other subjective evidence such as its projections for future growth. On the basis of this evaluation, at December 31, 2019 and 2018, a valuation allowance of $24.6 million and $25.1 million, respectively, has been recorded.
As of December 31, 2019, the Company has accumulated federal and state net operating loss (“NOL”) carryforwards of $165.0 million and $134.3 million, respectively. Of the $165.0 million of federal NOL carryforwards, $57.9 million was generated before January 1, 2018 and is subject to the 20-year carryforward period (“pre-Tax Act losses”). The remaining $107.1 million (“post-Tax Act losses”) can be carried forward indefinitely but is subject to the 80% taxable income limitation. The pre-Tax Act U.S. federal and state net operating loss carryforwards will expire in varying amounts through 2037. The Company completed a Section 382 study for the period through March 31, 2019 and determined that a Section 382 ownership change occurred on December 31, 2017 subjecting all pre-Tax Act losses to a utilization limitation; however, such limitation is not expected to result in NOLs expiring unused. Any future annual limitation may result in the expiration of NOLs before utilization.
As of December 31, 2019 and 2018, the Company had combined foreign net operating loss carry-forwards available to reduce future taxable income of approximately $25.6 million and $25.5 million, respectively. As of December 31, 2019 and 2018, valuation allowances of $24.6 million and $25.1 million, respectively, had been recorded against the related deferred tax assets for those loss carry-forwards that are not more likely than not to be fully utilized in reducing future taxable income.

                                                  | As of December 31 |
------------------------------------------------- | ----------------- | --------
                                                  | 2019              | 2018
Deferred tax assets                               |                   |
Lease liability                                   | $4,295            | $278
AMT credit                                        | 9                 | 11
Accrued expenses                                  | 2,837             | 2,057
Deferred revenue                                  | —                 | 549
Net operating loss carryforward                   | 50,950            | 34,662
Other assets                                      | 6,967             | 2,343
Property and equipment                            | —                 | 123
Intangible assets                                 | 2,416             | 836
Valuation allowance                               | (24,637)          | (25,079)
Total net deferred tax assets                     | 42,837            | 15,780
Deferred tax liabilities                          |                   |
Deferred commissions                              | (4,308)           | (3,215)
Deferred revenue                                  | (336)             | —
Intangible assets                                 | (7,948)           | (7,295)
Property and equipment                            | (296)             | —
Debt discount                                     | (26,589)          | (4,986)
Right-of-use asset                                | (3,909)           | —
Deferred state taxes                              | (1,101)           | (1,233)
Other                                             | (352)             | —
Total deferred tax liabilities                    | (44,839)          | (16,729)
Total non-current deferred income tax liabilities | $(2,002)          | $(949)

deferred tax assets
 valuation allowance deferred tax assets evidence future taxable income. cumulative loss three-year December 31, 2019. limits projections future growth. December 31, 2019 2018 valuation allowance of $24. 6 million $25. 1 million recorded.
 federal state net operating loss carryforwards $165. 0 million $134. 3 million. $57. 9 million generated before January 1 2018 subject 20-year carryforward period. remaining $107. 1 million Act indefinitely 80% taxable income limitation. pre-Tax. carryforwards expire through 2037. Section 382 study ownership change December 31, 2017 pre-Tax Act losses utilization limitation NOLs. future limitation before utilization.
 December 31, 2019 2018 combined foreign net operating loss carry-forwards reduce future taxable income $25. 6 million $25. 5 million. valuation allowances of $24. 6 million $25.1 million recorded deferred tax assets income.
 December 31
 Deferred tax assets
 Lease liability $4,295 $278
 AMT credit
 Accrued expenses 2,837
 Deferred revenue
 loss carryforward 50,950 34,662
 Other assets 6,967
 Property equipment
 Intangible assets 2,416
 Valuation allowance (24,637
 deferred tax assets 42,837 15,780
 Deferred commissions (4,308)
 revenue
 Intangible assets
 Property equipment
 Debt discount,589
 Right-of-use asset
 Deferred state taxes
 deferred tax liabilities (44,839)
 non-current deferred income liabilities(2,002)


Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is listed on NASDAQ under the symbol ‘‘CSGS’’. On January 31, 2020, the number of holders of record of common stock was 126.
Stock Price Performance
The following graph compares the cumulative total stockholder return on our common stock, the Russell 2000 Index, and our Standard Industrial Classification (“SIC”) Code Index: Data Preparation and Processing Services during the indicated five-year period. The graph assumes that $100 was invested on December 31, 2014, in our common stock and in each of the two indexes, and that all dividends, if any, were reinvested.

                                         |         |         | As of December 31, |         |         |
---------------------------------------- | ------- | ------- | ------------------ | ------- | ------- | -------
                                         | 2014    | 2015    | 2016               | 2017    | 2018    | 2019
CSG Systems International, Inc.          | $100.00 | $146.72 | $200.85            | $185.42 | $137.31 | $227.96
Russell 2000 Index                       | 100.00  | 95.59   | 115.95             | 132.94  | 118.30  | 148.49
Data Preparation and Processing Services | 100.00  | 110.52  | 129.67             | 159.46  | 174.32  | 245.10

. Registrant’s Common Equity Stockholder Matters Issuer Purchases Securities
 common stock listed NASDAQ. January 31, 2020 holders 126.
 graph compares stockholder return common stock Russell 2000 Index Standard Industrial Classification Code Index Data Preparation Processing Services five-year period. $100 invested December 31, 2014, common stock indexes dividends reinvested.
 December
 2014 2015 2016 2019
 CSG Systems International. $100. $146. $200. $185. $137. $227.
 Russell 2000 Index. 95. 115. 148.
 Data Preparation Processing Services. 129. 174.


Sales by Category
In addition to the above reporting segments, we also report revenue for the following three categories – (1) Access & Aggregation, (2) Subscriber Solutions & Experience and (3) Traditional & Other Products.
The following tables disaggregates our revenue by major source for the years ended December 31, 2019, 2018 and 2017:
(1) Subscriber Solutions & Experience was formerly reported as Customer Devices. With the increasing focus on enhancing the customer experience for both our business and consumer broadband customers and the addition of SmartRG during the fourth quarter of 2018, Subscriber Solutions & Experience more accurately represents this revenue category.

                                      |                   |                    | 2019
------------------------------------- | ----------------- | ------------------ | --------
(In thousands)                        | Network Solutions | Services & Support | Total
Access & Aggregation                  | $289,980          | $58,894            | $348,874
Subscriber Solutions & Experience (1) | 144,651           | 8,269              | 152,920
Traditional & Other Products          | 20,595            | 7,672              | 28,267
Total                                 | $455,226          | $74,835            | $530,061

Sales by Category
 revenue categories Access & Aggregation Subscriber Solutions & Experience Traditional Other Products.
 revenue 2019 2018 2017:
 Subscriber Solutions & Experience Customer Devices. SmartRG represents.
 Network Solutions Services Support
 Access Aggregation $289,980 $58,894  $348,874
 Subscriber Solutions & Experience 144,651 8,269  152,920
 Traditional & Other Products 20,595  7,672 28,267
 Total $455,226  $74,835  $530,061


Consolidated Statements of Comprehensive Income (Loss)
(Amounts in thousands)
(1) Fiscal years ended March 31, 2018 and 2017 adjusted due to the adoption of ASC 606.
(2) Fiscal year ended March 31, 2018 adjusted due to the adoption of ASC 606.
See accompanying notes to consolidated financial statements.

                                                                |          | Fiscal Years Ended March 31, |
--------------------------------------------------------------- | -------- | ---------------------------- | --------
                                                                | 2019     | 2018                         | 2017
Net income (1)                                                  | $206,587 | $254,127                     | $47,157
Other comprehensive income (loss), net of tax:                  |          |                              |
Foreign currency translation gains (losses) (2)                 | (24,065) | 35,271                       | (15,284)
Defined benefit pension plans                                   | (927)    | 167                          | 163
Defined benefit post-retirement plan adjustments                | (86)     | (255)                        | 20
Equity interest in investee’s other comprehensive income (loss) | (11)     | 5,584                        | 1,440
Foreign exchange contracts                                      | (588)    | (1,753)                      | 3,274
Excluded component of fair value hedges                         | (2,249)  | —                            | —
Other comprehensive income (loss) (2)                           | (27,926) | 39,014                       | (10,387)
Total comprehensive income (1)                                  | $178,661 | $293,141                     | $36,770

Statements Income
 Fiscal years March 2018 2017 adjusted ASC 606.
 2018 ASC 606.
 statements.
 Fiscal Years
 2018
 Net income $206,587 $254,127 $47,157
 income net tax
 Foreign currency gains (24,065) 35,271 (15,284)
 benefit pension plans
 post-retirement plan adjustments
 Equity interest income 5,584 1,440
 Foreign exchange contracts (1,753) 3,274
 fair value hedges (2,249)
 comprehensive income (27,926) 39,014 (10,387
 income $178,661 $293,141 $36,770


Director Compensation
In 2019, we compensated each non-management director of our Company by granting to each such outside director 15,000 RSUs. The RSUs vested in equal amounts of 3,750 RSUs on each of March 15, 2019, June 15, 2019, September 15, 2019 and December 15, 2019. In addition, we pay our non-management directors cash director fees of $40,000 per annum ($10,000 per quarter). Non-management directors also receive additional cash compensation on an annual basis for serving on the following Board committees: The Audit Committee Chairperson receives $7,500 and members receive $5,000; the Chairperson and members of each of the Compensation Committee and Nominating and Corporate Governance Committee receive annual fees of $3,750 and $2,500, respectively.
In consideration for serving as the sole member of our Strategic Development Committee, in June 2013 we issued to Niv Harizman a five-year stock option to purchase 300,000 shares of our common stock, at an exercise price of $1.88 per share, which option vested 100,000 shares on the date of grant, 100,000 shares on the first anniversary of the date of grant and vested 100,000 shares on the second anniversary from the grant date. On June 17, 2018, Mr. Harizman exercised the aforementioned stock option on a net (cashless) exercise basis by delivering to us 181,936 shares of our common stock and he received 118,064 shares of our common stock.
The following table sets forth the compensation awarded to, earned by or paid to all persons who served as members of our board of directors (other than our Named Executive Officers) during the year ended December 31, 2019. No director who is also a Named Executive Officer received any compensation for services as a director in 2019.
(1) Represents directors’ fees payable in cash to each non-management director of $10,000 per quarter ($40,000 per annum) for 2019 plus additional cash fees for serving on Board committees as disclosed in the text above.
(2) The amounts included in this column represent the grant date fair value of restricted stock unit awards (RSUs) granted to directors, computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions see Note B[11] to our consolidated financial statements included in this Annual Report. The 15,000 RSUs granted to each non-management director vested on a quarterly basis beginning March 15, 2019. Each restricted stock unit represents the contingent right to receive one share of common stock.
(3) As of December 31, 2019, each of the above listed directors held outstanding stock options to purchase 35,000 shares of our common stock at an exercise price of $2.34 per share.
(4) Includes payment of dividends (dividend equivalent rights) on RSUs for 2019.

Name             | Fees earned or paid in cash ($) (1) | Stock Awards ($) (2) (3) | All other compensation ($) (4) | Total ($)
---------------- | ----------------------------------- | ------------------------ | ------------------------------ | ---------
Emanuel Pearlman | $ 50,000                            | $ 39,000                 | $ 750                          | $  89,750
Niv Harizman     | $ 46,250                            | $ 39,000                 | $ 750                          | $  86,000
Alison Hoffman   | $ 48,890                            | $ 39,000                 | $ 750                          | $ 88,640

Director Compensation
 2019 compensated non-management director 15,000 RSUs. vested 3,750 RSUs March June September December 15, 2019. non-management directors cash fees $40,000 per annum ($10,000 per quarter. receive additional cash compensation Board committees Audit Committee Chairperson $7,500 members $5,000 Chairperson Compensation Committee Nominating Corporate Governance Committee annual fees $3,750 $2,500.
 June 2013 issued Niv Harizman five-year stock option shares common stock $1. 88 per share vested 100,000 shares first anniversary second anniversary. June 17, 2018. Harizman exercised 181,936 shares common stock received 118,064 shares.
 table compensation board directors Officers December 31, 2019. No Named Executive Officer received compensation 2019.
 fees $10,000 per quarter ($40,000 per annum additional cash fees Board committees.
amounts restricted stock unit awards directors FASB ASC Topic 718. Note B[11] financial statements Annual Report. 15,000 RSUs non-management director quarterly March 15 2019. right share common stock.
 December 31, 2019 directors options purchase 35,000 shares common stock $2. 34 per share.
 Includes dividends RSUs 2019.
 Fees Stock Awards compensation Total
 Emanuel Pearlman $ 50,000 $ 39,000 750 89,750
 Niv Harizman $ 46,250 39,000
 Alison Hoffman $ 48,890 $ 39,000 750 88,640


Research and Development (“R&D”), Sales and Marketing, and General and Administrative (“G&A”) Expenses
R&D, sales and marketing, and G&A expenses are summarized in the following table (in millions, except percentages):
R&D Expenses R&D expenses increased due to higher headcount-related expenses and, to a lesser extent, higher acquisition-related costs, higher contracted services and higher discretionary spending.
We continue to invest in R&D in order to bring a broad range of products to market in a timely fashion. If we believe that we are unable to enter a particular market in a timely manner with internally developed products, we may purchase or license technology from other businesses, or we may partner with or acquire businesses as an alternative to internal R&D.
Sales and Marketing Expenses Sales and marketing expenses increased due to higher headcount-related expenses, higher discretionary spending and, to a lesser extent, higher contracted services and higher acquisition-related costs, partially offset by lower share-based compensation expense.
G&A Expenses G&A expenses decreased due to a benefit from the $400 million litigation settlement with Arista Networks and lower contracted services, partially offset by higher discretionary spending and higher headcount-related expenses.
Effect of Foreign Currency In fiscal 2019, foreign currency fluctuations, net of hedging, decreased the combined R&D, sales and marketing, and G&A expenses by approximately $233 million, or 1.3%, compared with fiscal 2018. In fiscal 2018, foreign currency fluctuations, net of hedging, increased the combined R&D, sales and marketing, and G&A expenses by approximately $93 million, or 0.5%, compared with fiscal 2017.

                           |               | Years Ended   |               |                     |
-------------------------- | ------------- | ------------- | ------------- | ------------------- | -------------------
                           | July 27, 2019 | July 28, 2018 | July 29, 2017 | Variance in Dollars | Variance in Percent
Research and development   | $ 6,577       | $ 6,332       | $6,059        | $245                | 4%
Percentage of revenue      | 12.7%         | 12.8%         | 12.6%         |                     |
Sales and marketing        | 9,571         | 9,242         | 9,184         | 329                 | 4%
Percentage of revenue      | 18.4%         | 18.7%         | 19.1%         |                     |
General and administrative | 1,827         | 2,144         | 1,993         | (317)               | (15)%
Percentage of revenue      | 3.5%          | 4.3%          | 4.2%          |                     |
Total                      | $17,975       | $17,718       | $17,236       | $257                | 1%
Percentage of revenue      | 34.6%         | 35.9%         | 35.9%         |                     |

Research Development Sales Marketing General Administrative Expenses
 summarized table millions
 R&D Expenses increased headcount expenses acquisition costs contracted services discretionary spending.
 R&D products market timely. If purchase license technology partner acquire R&D.
 Sales Marketing Expenses increased headcount expenses discretionary spending contracted services acquisition costs offset lower share-based compensation expense.
 G&A Expenses decreased $400 million settlement Arista Networks lower contracted services offset higher discretionary spending headcount-related expenses.
 Effect Foreign Currency 2019 foreign currency fluctuations decreased R&D sales marketing G&A expenses $233 million 1. 3% compared 2018. increased R&D expenses $93 million 0. 5% compared 2017.
 2019 29, 2017 Variance Dollars Percent
 Research development $ 6,577 $ 6,332 $6,059 $245 4%
 Percentage revenue.12. 8%. 6%
 Sales marketing 9,571 9,242 9,184 329 4%
 18. 4%. 7% 19. 1%
 1,827 2,144 1,993
. 5%. 3%. 2%
 $17,975 $17,718 $17,236 $257
. 6%.


Disaggregated Revenue
The table below includes the Company’s revenue for the fiscal year ended September 28, 2019 disaggregated by geographic reportable segment and market sector (in thousands):

                          |            | Fiscal Year Ended September 28, 2019 |          |
------------------------- | ---------- | ------------------------------------ | -------- | ----------
                          |            | Reportable Segment:                  |          |
                          | AMER       | APAC                                 | EMEA     | Total
Market Sector:            |            |                                      |          |
Healthcare/Life Sciences  | $488,851   | $602,922                             | $128,225 | $1,219,998
Industrial/Commercial     | 359,381    | 534,971                              | 86,868   | 981,220
Aerospace/Defense         | 317,558    | 186,486                              | 84,556   | 588,600
Communications            | 256,523    | 113,329                              | 4,764    | 374,616
     External revenue     | 1,422,313  | 1,437,708                            | 304,413  | 3,164,434
Inter-segment sales       | 6,995      | 119,497                              | 5,520    | 132,012
    Segment revenue       | $1,429,308 | $1,557,205                           | $309,933 | $3,296,446

Revenue
 2019 segment market sector
 APAC EMEA
 Healthcare Sciences $488,851 $602,922 $128,225 $1,219,998
 Industrial,381 534,971 86
 Aerospace 317,558 186,486 84,556,600
 Communications 256,523 113,329
 External revenue 1,422,313 1,437,708 304,413 3,164,434
 Inter-segment sales 6,995 119,497
 Segment revenue $1,429,308 $1,557,205 $309,933 $3,296,446