Effective Income Tax Rate
A reconciliation of the United States federal statutory income tax rate to our effective income tax rate is as follows:
In 2019 and 2018 we had pre-tax losses of $19,573 and $25,403, respectively, which are available for carry forward to offset future taxable income. We made determinations to provide full valuation allowances for our net deferred tax assets at the end of 2019 and 2018, including NOL carryforwards generated during the years, based on our evaluation of positive and negative evidence, including our history of operating losses and the uncertainty of generating future taxable income that would enable us to realize our deferred tax.

                                       | Year Ended        | Year Ended
-------------------------------------- | ----------------- | -----------------
                                       | December 31, 2018 | December 31, 2019
United States federal statutory rate   | 21.00%            | 21.00%
State taxes, net of federal benefit    | 1.99%             | (0.01)%
Valuation allowance                    | (21.96)%          | (24.33)%
Cumulative effect of accounting change | —                 | 2.07%
R&D Credit                             | 1.34%             | 1.53%
Other                                  | (0.38)%           | (0.27)%
Effective income tax rate              | 1.99%             | (0.01)%

Income Tax Rate
 reconciliation federal
 2019 2018 pre-tax losses $19,573 $25,403 available carry forward offset future taxable income. full valuation allowances net deferred tax assets 2019 2018 NOL carryforwards positive negative evidence operating losses uncertainty future taxable income deferred tax.
 December 31, 2018
 States federal statutory rate 21.
 State taxes federal benefit. 99%.
 Valuation allowance.
 effect accounting change 2.
 R&D Credit. 34%. 53%
.
 Effective income tax rate. 99%.


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)
18. Revenues from Contracts with Customers
The Group has recognized the following amounts relating to revenues:
Revenues from The Cool Pool Limited relate only to the pool revenues received from GasLog’s vessels operating in the Cool Pool and do not include the Net pool allocation to GasLog of ($4,264) for the year ended December 31, 2019 ($17,818 for the year ended December 31, 2018 and $7,254 for the year ended December 31, 2017), which is recorded as a separate line item in the Profit or Loss Statement.
Following the exit from the Cool Pool, management allocates revenues from time charters to two categories: (a) variable rate charters and (b) fixed rate charters. The variable rate charter category contains vessels operating in the LNG carrier spot and short-term market or those which have a variable rate of hire across the charter period.

                                                     |         | For the year ended December 31, |
---------------------------------------------------- | ------- | ------------------------------- | -------
                                                     | 2017    | 2018                            | 2019
Revenues from fixed rate time charters               | 485,961 | 515,324                         | 558,266
Revenues from variable rate time charters            | —       | —                               | 64,334
Revenues from The Cool Pool Limited (GasLog vessels) | 38,046  | 102,253                         | 45,253
Revenues from vessel management services             | 1,222   | 767                             | 784
Total                                                | 525,229 | 618,344                         | 668,637

GasLog Ltd. Subsidiaries
 consolidated financial statements
 years December 2017 2018 2019
 amounts U. S. Dollars except
. Revenues Contracts Customers
 Revenues Cool Pool Limited pool revenues vessels Net pool allocation GasLog ($4,264) 2019 ($17,818 2018 $7,254 2017) separate Profit Loss Statement.
 exit Cool Pool allocates revenues charters variable rate fixed rate charters. variable rate charter vessels LNG carrier-term market.
 December
 2017 2018 2019
 fixed rate charters 485,961 515,324,266
 variable rate charters 64,334
 Cool Pool Limited vessels 38,046 102,253 45,253
 vessel management services 1,222 767 784
 525,229 618,344 668,637


Our primary source of cash is receipts from revenue and, to a lesser extent, proceeds from participation in the employee stock purchase plan. The primary uses of cash are our stock repurchase program as described below, payroll-related expenses, general operating expenses including marketing, travel and office rent, and cost of revenue. Other uses of cash include business acquisitions, purchases of property and equipment and payments for taxes related to net share settlement of equity awards.
Cash Flows from Operating Activities
For fiscal 2019, net cash provided by operating activities of $4.42 billion was primarily comprised of net income adjusted for the net effect of non-cash items. The primary working capital sources of cash were net income coupled with an increase in deferred revenue, which was offset in large part by cash outflows due to an increase in prepaid expenses and other assets. The increase in deferred revenue was primarily driven by increases related to Digital Media offerings with cloud-enabled services and Digital Experience hosted services. The primary working capital use of cash was due to increases in prepaid expenses with certain vendors, sales commissions paid and capitalized, advanced payments related to income taxes and increase in long-term contract assets.
Cash Flows from Investing Activities
For fiscal 2019, net cash used for investing activities of $455.6 million was primarily due to purchases of property and equipment and our acquisition of the remaining equity interest in Allegorithmic. These cash outflows were offset primarily by proceeds from sales and maturities of short-term investments, net of purchases. See Note 3 of our Notes to Consolidated Financial Statements for more detailed information regarding our acquisitions.
Cash Flows from Financing Activities
For fiscal 2019, net cash used for financing activities was $2.95 billion primarily due to payments for our treasury stock repurchases and taxes related to net share settlement of equity awards, which were offset by proceeds from re-issuance of treasury stock for our employee stock purchase plan. See the section titled “Stock Repurchase Program” discussed below.
We expect to continue our investing activities, including short-term and long-term investments, facilities expansion and purchases of computer systems for research and development, sales and marketing, product support and administrative staff. Furthermore, cash reserves may be used to repurchase stock under our stock repurchase program and to strategically acquire companies, products or technologies that are complementary to our business.

(in millions)                                                          | 2019      | 2018      | 2017
---------------------------------------------------------------------- | --------- | --------- | ---------
Net cash provided by operating activities                              | $4,421.8  | $4,029.3  | $2,912.9
Net cash used for investing activities                                 | (455.6)   | (4,685.3) | (442.9)
Net cash used for financing activities                                 | (2,946.1) | (5.6)     | (1,183.7)
Effect of foreign currency exchange rates on cash and cash equivalents | (12.7)    | (1.7)     | 8.5
Net increase (decrease) in cash and cash equivalents                   | $1,007.4  | $(663.3)  | $1,294.8

primary source cash revenue employee stock purchase plan. uses stock repurchase program payroll expenses operating expenses rent cost revenue. Other uses include business acquisitions purchases property taxes share settlement equity awards.
 Cash Flows Operating Activities
 2019 net cash $4. 42 billion net income non-cash items. sources net income deferred revenue offset cash outflows prepaid expenses assets. revenue driven Digital Media services. prepaid expenses sales commissions advanced payments income taxes long-term contract assets.
 Cash Flows Investing Activities
 $455. 6 million due purchases property equipment equity interest Allegorithmic. offset sales maturities short-term investments. Note 3 Consolidated Financial Statements.
 Cash Flows Financing Activities
 net cash $2. 95 billion due treasury stock repurchases taxes settlement equity offset re-issuance treasury stock employee stock purchase plan. Repurchase.
continue investing long-term investments facilities expansion purchases computer systems research development sales marketing support staff. cash reserves repurchase stock companies products technologies complementary business.
 2019
 cash operating $4,421. $4,029. $2,912.
 investing (455. (4,685. (442.
 financing (2,946. (5. (1,183.
 foreign currency exchange rates cash equivalents (12.
 increase cash equivalents $1,007. $(663. $1,294.


25. Deferred income
The Group’s deferred income balances relate solely to revenue from contracts with customers.

            | 2019      | 2018
----------- | --------- | ---------
            | $ million | $ million
Current     | 53.2      | 55.2
Non-current | 13.6      | 14.4
            | 66.8      | 69.6

. Deferred income
 balances revenue contracts customers.
 2019 2018
 $ million
 53. 55.
 Non-current 13. 14.
 66. 69.


10. Operating Leases
The Company charters-in vessels from other vessel owners on time-charter-in and bareboat charter contracts, whereby the vessel owner provides use of the vessel to the Company, and, in the case of time-charter-in contracts, also operates the vessel for the Company. A timecharter- in contract is typically for a fixed period of time, although in certain cases the Company may have the option to extend the charter.
The Company typically pays the owner a daily hire rate that is fixed over the duration of the charter. The Company is generally not required to pay the daily hire rate for time-charters during periods the vessel is not able to operate.
With respect to time-charter- With respect to time-charter-in and bareboat charter contracts with an original term of more than one year, for the year ended December 31, 2019, the Company incurred $99.0 million of time-charter and bareboat hire expense related to these time-charter and bareboat charter contracts, of which $68.2 million was allocable to the lease component, and $30.8 million was allocable to the non-lease component.
The amounts allocable to the lease component approximate the cash paid for the amounts included in lease liabilities and are reflected as a reduction in operating cash flows for the year ended December 31, 2019. Three of Teekay Tankers' time-charter-in contracts each have an option to extend the charter for an additional one-year term.
Since it is not reasonably certain that Teekay Tankers will exercise the options, the lease components of the options are not recognized as part of the right-of-use assets and lease liabilities. As at December 31, 2019, the weighted-average remaining lease term and weighted-average discount rate for these time-charter-in and bareboat charter contracts were 2.6 years and 6.1%, respectively.
During the year ended December 31, 2019, Teekay Tankers chartered in two LR2 vessels and one Aframax vessel for periods of 24 months each, Teekay LNG extended the charter-in contract for one LNG carrier for a period of 21 months, and Teekay Parent extended the charterin contract for one FSO unit for a period of 12 months, which resulted in the Company recognizing right-of-use assets and lease liabilities totaling $47.7 million and $47.7 million, respectively.
A maturity analysis of the Company’s operating lease liabilities from time-charter-in and bareboat charter contracts (excluding short-term leases) at December 31, 2019 is as follows:
As at December 31, 2019, minimum commitments to be incurred by the Company under short-term time-charter-in contracts were approximately $4.3 million (2020). As at December 31, 2018, minimum commitments to be incurred by the Company under vessel operating leases by which the Company charters-in vessels were approximately $116.3 million (2019), $90.4 million (2020), $53.4 million (2021), $9.1 million (2022), $9.1 million (2023) and $5.6 million thereafter.

                                                        | Lease Commitment | Non-Lease Commitment | Total Commitment
------------------------------------------------------- | ---------------- | -------------------- | ----------------
                                                        | $                | $                    | $
Payments                                                |                  |                      |
2020                                                    | 69,617           | 37,089               | 106,706
2021                                                    | 54,195           | 26,948               | 81,143
2022                                                    | 22,978           | 8,189                | 31,167
2023                                                    | 9,227            | -                    | 9,227
2024                                                    | 5,713            | -                    | 5,713
Thereafter                                              | -                | -                    | -
Total payments                                          | 161,730          | 72,226               | 233,956
Less: imputed interest                                  | (13,128)         |                      |
Carrying value of operating lease liabilities           | 148,602          |                      |
Less current portion                                    | (61,431)         |                      |
Carrying value of long-term operating lease liabilities | 87,171           |                      |

. Operating Leases
 Company charters vessels from time-charter-in bareboat charter contracts owner provides use operates. timecharter contract fixed extend charter.
 pays owner daily hire rate fixed charter. not required pay daily hire rate time-charters during vessel.
 bareboat charter contracts more one year December 31, 2019 incurred $99. 0 million time-charter bareboat hire expense $68. 2 million lease $30. 8 million non-lease component.
 amounts lease approximate cash lease liabilities reduction in operating cash flows. Three Teekay Tankers' time-charter-in contracts option to extend charter additional one-year term.
 options lease not recognized right-of-use assets lease liabilities. December 31, 2019-average lease term discount rate for were 2. 6 years 6. 1%.
December 31, 2019 Teekay Tankers chartered two LR2 Aframax 24 months LNG LNG carrier 21 months Teekay Parent FSO 12 months right-of-use assets lease liabilities $47. 7 million $47. 7 million.
 maturity analysis lease liabilities time bareboat December 31, 2019
 minimum commitments contracts $4. 3 million (2020. December 31, 2018 commitments leases $116. 3 million $90. 4 million $53. 4 million $9. 1 million $9. 1 million (2023) $5. 6 million.
 Lease Non-Lease Commitment Commitment
 Payments
 2020 69,617 37,089 106,706
 2021 54,195
 2022 22,978
 2023
 2024
 payments 161,730 72,226 233,956
 imputed interest,128
 operating lease liabilities 148,602
portion (61,431)
 long-term liabilities 87,171


Net Revenues by Geographic Region
The following table details our consolidated net revenues by geographic region (amounts in millions):
(1) “EMEA” consists of the Europe, Middle East, and Africa geographic regions
Americas
The decrease in net revenues in the Americas region for 2019, as compared to 2018, was primarily due to lower revenues recognized from the Destiny franchise (reflecting our sale of the publishing rights for Destiny to Bungie in December 2018).
EMEA
The decrease in net revenues in the EMEA region for 2019, as compared to 2018, was primarily due to:
lower revenues recognized from the Destiny franchise; and lower revenues recognized from Call of Duty: Black Ops 4, which was released in October 2018, as compared to Call of Duty: WWII, which was released in November 2017.
Asia Pacific
The decrease in net revenues in the Asia Pacific region for 2019, as compared to 2018, was primarily due to:
lower revenues recognized from Hearthstone, primarily due to the prior year including additional digital content delivered in connection with the renewal of our contract with NetEase, Inc. in December 2018, with no equivalent transaction for the franchise in 2019; and lower revenues recognized from the Destiny franchise.
The decrease was partially offset by:• revenues recognized from Crash Team Racing Nitro-Fueled, which was released in June 2019; • revenues from Sekiro: Shadows Die Twice, which was released in March 2019; and • higher revenues recognized from Call of Duty: Modern Warfare, which was released in October 2019, as compared to Call of Duty: Black Ops 4.

                                   |        |        |                      |
---------------------------------- | ------ | ------ | -------------------- | --------
                                   | 2019   | 2018   | Increase/ (decrease) | % Change
Net revenues by geographic region: |        |        |                      |
Americas                           | $3,341 | $3,880 | $(539)               | (14)%
EMEA (1)                           | 2,239  | 2,618  | (379)                | (14)
Asia Pacific                       | 909    | 1,002  | (93)                 | (9)
Consolidated net revenues          | $6,489 | $7,500 | $(1,011)             | (13)

Net Revenues by Geographic Region
 table details consolidated net revenues by region
 “EMEA” Europe Middle East Africa
 Americas
 decrease net revenues Americas 2019 due to lower revenues Destiny franchise.
 EMEA
 decrease revenues due to
 lower revenues Destiny Call of Duty: Black Ops 4 October 2018 Call Duty November 2017.
 Asia Pacific
 decrease revenues due to
 lower revenues Hearthstone contract NetEase. no equivalent transaction 2019 lower revenues Destiny.
 decrease offset by revenues Crash Team Racing Nitro-Fueled June 2019 Sekiro: Shadows Die Twice March 2019 higher revenues Call of Duty: Modern Warfare October 2019.
 2019 2018 Increase (decrease % Change
 Net revenues by geographic region
 Americas $3,341 $3,880 $(539)
 EMEA 2,239 2,618
 Asia Pacific 909 1,002
revenues $6,489 $7,500


Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards. Significant components of the Company’s net deferred tax assets and liabilities were as follows:
The increase in the gross deferred tax assets and valuation allowance between fiscal year 2019 and 2018 is primarily due to increases in tax carryforwards.
Realization of the Company’s net deferred tax assets is based upon the weighting of available evidence, including such factors as the recent earnings history and expected future taxable income. The Company believes it is more likely than not that such deferred tax assets will be realized with the exception of $227.0 million primarily related to California deferred tax assets. At June 30, 2019, the Company continued to record a valuation allowance to offset the entire California deferred tax asset balance due to the single sales factor apportionment resulting in lower taxable income in California.
At June 30, 2019, the Company had federal net operating loss carryforwards of $109.8 million. The majority of these losses will begin to expire in fiscal year 2020, and are subject to limitation on their utilization.
At June 30, 2019, the Company had state net operating loss carryforwards of $58.5 million. If not utilized, these losses will begin to expire in fiscal year 2020 and are subject to limitation on their utilization.
At June 30, 2019, the Company had state tax credit carryforwards of $322.4 million. Substantially all of these credits can be carried forward indefinitely.

                                                  | June 30, 2019  | June 24, 2018
------------------------------------------------- | -------------- | -------------
                                                  | (in thousands) |
Deferred tax assets:                              |                |
Tax carry forwards                                | $231,390       | $206,073
Allowances and reserves                           | 97,671         | 118,559
Equity-based compensation                         | 14,661         | 16,189
Inventory valuation differences                   | 18,516         | 14,021
Prepaid cost sharing                              | 74,139         | 65,644
Outside basis differences of foreign subsidiaries | 16,260         | —
Other                                             | 17,972         | 16,514
Gross deferred tax assets                         | 470,609        | 437,000
Valuation allowance                               | (226,928)      | (199,839)
Net deferred tax assets                           | 243,681        | 237,161
Deferred tax liabilities:                         |                |
Intangible assets                                 | (9,883)        | (21,558)
Convertible debt                                  | (46,993)       | (60,252)
Capita assets                                     | (83,298)       | (61,429)
Amortization of goodwill                          | (11,299)       | (10,738)
Outside basis differences of foreign subsidiaries | —              | (6,656)
Other                                             | (8,752)        | (7,955)
Gross deferred tax liabilities                    | (160,225)      | (168,588)
Net deferred tax assets                           | $83,456        | $68,573

Deferred income taxes reflect differences assets liabilities carryforwards. net deferred tax assets liabilities
 increase gross deferred tax assets valuation allowance 2019 2018 due to tax carryforwards.
 Realization evidence recent earnings history future taxable income. assets $227. 0 million California deferred tax assets. 2019 valuation allowance offset California deferred tax asset balance single sales factor apportionment lower taxable income.
 federal net operating loss carryforwards $109. 8 million. losses expire 2020.
 state net operating loss carryforwards $58. 5 million. losses expire 2020.
 state tax credit carryforwards of $322. 4 million. credits carried forward indefinitely.
 Deferred tax assets
 Tax carry forwards $231,390 $206,073
 Allowances reserves 97,671 118,559
 Equity-based compensation 14,661 16,189
 Inventory valuation differences 18,516 14,021
Prepaid cost 74,139 65,644
 subsidiaries 16,260
 17,972
 deferred tax 470,609 437,000
 Valuation (226,928) (199,839)
 243,681 237,161
 Intangible,558
 Convertible debt (46,993),252)
,298
 Amortization goodwill (11,299),738
 subsidiaries
 deferred tax liabilities,225 (168,588)
 $83,456 $68,573


The Monte Carlo simulation assumptions used for the periods presented were as follows:
As of January 3, 2020, there was $12 million of unrecognized compensation cost, net of estimated forfeitures, which is expected to be recognized over a weighted average period of 1.7 years. The fair value of performance-based stock awards that vested in fiscal 2019, 2018 and 2017 was $9 million, $13 million, and $4 million, respectively.

                                        |                 | Year Ended        |
--------------------------------------- | --------------- | ----------------- | -----------------
                                        | January 3, 2020 | December 28, 2018 | December 29, 2017
Expected volatility                     | 22.02%          | 25.37%            | 27.19%
Risk free rate of return                | 2.39%           | 2.35%             | 1.53%
Weighted average grant date stock price | $62.66          | $65.00            | $53.73

Monte Carlo simulation assumptions
 January 3, 2020 $12 million unrecognized compensation cost. 7 years. performance stock awards 2019 2018 2017 $9 million $13 million $4 million.
 January 3 2020 December 28, 2018
 volatility 22. 37%. 19%
 Risk free return 2. 39%. 35%. 53%
 average stock price $62.


ACCOUNTING POLICY
We measure inventories, including wireless devices and merchandise for resale, at the lower of cost (determined on a weighted average cost basis for Wireless devices and accessories and a first-in, first-out basis for other finished goods and merchandise) and net realizable value. We reverse a previous writedown to net realizable value, not to exceed the original recognized cost, if the inventories later increase in value.
EXPLANATORY INFORMATION
Cost of equipment sales and merchandise for resale includes $2,496 million of inventory costs for 2019 (2018 – $2,515 million).

                                     | As at December 31 | As at December 31
------------------------------------ | ----------------- | -----------------
(In millions of dollars)             | 2019              | 2018
Wireless devices and accessories     | 380               | 399
Other finished goods and merchandise | 80                | 67
Total inventories                    | 460               | 466

ACCOUNTING POLICY
 measure inventories wireless devices merchandise resale lower cost net realizable value. reverse writedown net realizable value inventories increase.
 equipment sales merchandise resale $2,496 million inventory costs 2019 (2018 $2,515 million.
 Wireless devices accessories 380 399
 Other finished goods merchandise 80 67
 Total inventories 460 466


Issuer Purchases of Equity Securities
The following shares of the Company were repurchased during the quarter ended June 30, 2019:
(1) 250,000 shares were purchased through a publicly announced repurchase plan. There were no shares surrendered to the Company to satisfy tax withholding obligations in connection with employee restricted stock awards.
(2) Total stock repurchase authorizations approved by the Company’s Board of Directors as of February 17, 2015 were for 30.0 million shares. These authorizations have no specific dollar or share price targets and no expiration dates.

                         | Total Number of Shares Purchased (1) | Average Price of Share | Total Number of Shares Purchased as Part of Publicly Announced Plans (1) | Maximum Number of Shares that May Yet Be Purchased Under the Plans (2)
------------------------ | ------------------------------------ | ---------------------- | ------------------------------------------------------------------------ | ----------------------------------------------------------------------
April 1 - April 30, 2019 | —                                    | $—                     | —                                                                        | 3,732,713
May 1 - May 31, 2019     | 250,000                              | $134.35                | 250,000                                                                  | 3,482,713
June 1 - June 30, 2019   | —                                    | $—                     | —                                                                        | 3,482,713
Total                    | 250,000                              | $134.35                | 250,000                                                                  | 3,482,713

Issuer Purchases Equity Securities
 shares repurchased quarter June 30, 2019
 250,000 shares purchased repurchase plan. no shares surrendered tax obligations employee restricted stock awards.
 stock repurchase authorizations February 17, 2015 30. 0 million shares. authorizations no dollar price targets expiration dates.
 Total Number Shares Purchased Average Price Share Announced Plans Maximum Number Shares Purchased Plans
 April 1 - 30, 2019 3,732,713
 May 1 250,000 $134. 3,482,713
 June 1 30
.


Note 12. Convertible Notes
In December 2016, the Company entered into the Purchase Agreement with J.P. Morgan Securities LLC and Jefferies LLC, as representatives of the several initial purchasers named therein (collectively, the “Initial Purchasers”), to issue and sell $90,000 in aggregate principal amount of its 5.50% senior convertible notes due 2021 ("Convertible Notes") in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons pursuant to Regulation S under the Securities Act. In December 2016, the Company entered into a purchase agreement (the “Cambridge Purchase Agreement”) with Cambridge Equities, L.P. (“Cambridge”), an entity affiliated with Dr. Patrick Soon-Shiong, the Company’s Chairman and Chief Executive Officer, to issue and sell $10,000 in aggregate principal amount of the Convertible Notes in a private placement pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act. In December 2016, pursuant to the exercise of the overallotment by the Initial Purchasers, the Company issued an additional $7,000 principal amount of the Convertible Notes. The total net proceeds from this offering were approximately $102,714 ($9,917 from Cambridge and $92,797 from the Initial Purchasers) after deducting the Initial Purchasers’ discount and debt issuance costs of $4,286 in connection with the Convertible Notes offering.
On December 21, 2016, the Company entered into an indenture, relating to the issuance of the Convertible Notes (the “Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The interest rates are fixed at 5.50% per year, payable semi- annually on June 15 and December 15 of each year, beginning on June 15, 2017. The Convertible Notes will mature on December 15, 2021, unless earlier repurchased by the Company or converted pursuant to their terms.
In connection with the offering of the Convertible Notes, on December 15, 2016, the Company entered into a Second Amended and Restated Promissory Note which amended and restated the Amended and Restated Promissory Note, dated May 9, 2016, between the Company and NantCapital, to, among other things, extend the maturity date of the Promissory Note to June 15, 2022 and to subordinate such Promissory Note in right of payment to the Convertible Notes (see Note 20).
The initial conversion rate of the Convertible Notes is 82.3893 shares of common stock per $1 principal amount of Convertible Notes (which is equivalent to an initial conversion price of approximately $12.14 per share). Prior to the close of business on the business day immediately preceding September 15, 2021, the Convertible Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after March 31, 2017 (and only during such calendar quarter), if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of the Company’s common stock on such trading day is greater than or equal to 120% of the conversion price on such trading day; (2) during the five business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1 principal amount of the Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions as described in the Indenture agreement.
Upon conversion, the Convertible Notes will be settled in cash, shares of the Company’s common stock or any combination thereof at the Company’s option.
Upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to purchase all or a portion of the Convertible Notes in principal amounts of $1 or an integral multiple thereof, for cash at a price equal to 100% of the principal amount of the Convertible Notes to be purchased plus any accrued and unpaid interest to, but excluding, the fundamental change purchase date. The conversion rate will be subject to adjustment upon the occurrence of certain specified events.
On or after the date that is one year after the last date of original issuance of the Convertible Notes, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within the five trading days immediately preceding a conversion date is greater than or equal to 120% of the conversion price on each applicable trading day, the Company will make an interest make-whole payment to a converting holder (other than a conversion in connection with a make-whole fundamental change in which the conversion rate is adjusted) equal to the sum of the present values of the scheduled payments of interest that would have been made on the Convertible Notes to be converted had such Convertible Notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date if the Convertible Notes had not been so converted. The present values of the remaining interest payments will be computed using a discount rate equal to 2.0%. The Company may pay any interest make-whole payment either in cash or in shares of its common stock, at the Company’s election as described in the Indenture. On or after the date that is one year after the last date of original issuance of the Convertible Notes, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within the five trading days immediately preceding a conversion date is greater than or equal to 120% of the conversion price on each applicable trading day, the Company will make an interest make-whole payment to a converting holder (other than a conversion in connection with a make-whole fundamental change in which the conversion rate is adjusted) equal to the sum of the present values of the scheduled payments of interest that would have been made on the Convertible Notes to be converted had such Convertible Notes remained outstanding from the conversion date through the earlier of (i) the date that is three years after the conversion date and (ii) the maturity date if the Convertible Notes had not been so converted. The present values of the remaining interest payments will be computed using a discount rate equal to 2.0%. The Company may pay any interest make-whole payment either in cash or in shares of its common stock, at the Company’s election as described in the Indenture.
The Company accounts for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) by recording the liability and equity components of the convertible debt separately. The liability component is computed based on the fair value of a similar liability that does not include the conversion option. The liability component includes both the value of the embedded interest make-whole derivative and the carrying value of the Convertible Notes. The equity component is computed based on the total debt proceeds less the fair value of the liability component. The equity component is also recorded as debt discount and amortized as interest expense over the expected term of the Convertible Notes.
The liability component of the Convertible Notes on the date of issuance was computed as $83,079, consisting of the value of the embedded interest make-whole derivative of $1,499 and the carrying value of the Convertible Notes of $81,580. Accordingly, the equity component on the date of issuance was $23,921. If the debt is considered current at the balance sheet date, the liability component of the convertible notes will be classified as current liabilities and presented in current portion of convertible notes debt and the equity component of the convertible debt will be considered a redeemable security and presented as redeemable equity on the Company's Consolidated Balance Sheet.
Offering costs of $4,286 related to the issuance of the Convertible Notes were allocated to the liability and equity components in proportion to the allocation of the proceeds and accounted for as deferred financing offering costs and equity issuance costs, respectively. Approximately $972 of this amount was allocated to equity and the remaining $3,314 was capitalized as deferred financing offering costs.
The debt discounts and deferred financing offering costs on the Convertible Notes are being amortized to interest expense over the contractual terms of the Convertible Notes, using the effective interest method at an effective interest rate of 12.82%.
As of December 31, 2019, the remaining life of the Convertible Notes is approximately 24 months.
The following table summarizes how the issuance of the Convertible Notes is reflected in the Company's Consolidated Balance Sheets as of December 31, 2019 and 2018:
(Dollars in thousands, except per share amounts)

                                                                 | Related party | Others   | Total
---------------------------------------------------------------- | ------------- | -------- | --------
Balance as of December 31, 2019                                  |               |          |
Gross proceeds                                                   | $10,000       | $97,000  | $107,000
Unamortized debt discounts and deferred financing offering costs | (1,136)       | (12,352) | (13,488)
Net carrying amount                                              | $8,864        | $84,648  | $93,512
Balance as of December 31, 2018                                  |               |          |
Gross proceeds                                                   | $10,000       | $97,000  | $107,000
Unamortized debt discounts and deferred financing offering costs | (1,622)       | (17,567) | (19,189)
Net carrying amount                                              | $8,378        | $79,433  | $87,811

. Convertible Notes
 December 2016, Company Purchase Agreement J. P. Morgan Securities Jefferies LLC issue sell $90,000 5. 50% senior convertible notes due 2021 institutional buyers Rule 144A Securities Act 1933 non-U. S. persons Regulation S. December 2016, Company Cambridge Equities. Dr. Patrick Soon-Shiong Chairman issue sell $10,000 Convertible Notes exemption registration requirements Securities Act. December 2016, issued additional $7,000 Notes. net proceeds $102,714 ($9,917 Cambridge $92,797 Initial Purchasers Initial Purchasers’ discount debt issuance costs $4,286.
 December 21, 2016, Company entered indenture U. S. Bank National Association. interest rates fixed 5. 50% per year payable semi- annually June 15 December 15 beginning June 15, 2017.Convertible Notes mature December 15, 2021 unless repurchased or converted.
 offering December 15, 2016, Company entered Second Amended and Restated Promissory Note May 9 2016, NantCapital extend maturity to June 15, 2022 subordinate Promissory Note to Convertible Notes.
 initial conversion rate 82. 3893 shares common stock per $1 principal amount equivalent conversion price approximately $12. 14 per share. close business September 15, 2021 Convertible Notes convertible under circumstances quarter after March 31, 2017 if 20 trading days last reported sale price common stock greater than or equal 120% conversion price five business period trading price per $1 principal amount Convertible Notes less than 98% of last reported sale price common stock conversion rate (3) corporate transactions Indenture agreement.
 Notes settled in cash, shares common stock Company’s option.
fundamental change holders require Company purchase Convertible Notes $1 or for cash price equal to 100% principal amount plus accrued unpaid interest excluding fundamental change purchase date. conversion rate subject to adjustment events.
 one year after last date original issuance Notes if last reported sale price of Company’s common stock for 20 trading days 30 consecutive days conversion date greater than or equal to 120% of conversion price Company interest make-whole payment to converting holder equal to present values of scheduled payments interest Convertible Notes conversion date three years maturity date. present values remaining interest payments computed using discount rate equal to 2. 0%. Company pay interest make payment in cash or shares common stock election Indenture.one year after last issuance Convertible Notes if last sale price Company’s common stock 20 days 30 consecutive days conversion date greater than 120% conversion price Company interest payment to converting holder equal to present values scheduled payments interest Convertible Notes conversion date three years after maturity date. present values remaining interest payments computed using discount rate equal to 2. 0%. Company pay interest payment cash or shares common stock.
 accounts for convertible debt instruments settled cash upon conversion liability equity components separately. liability computed based fair value similar liability conversion option. includes interest-whole derivative carrying value Convertible Notes. equity computed total debt proceeds less fair value liability. recorded as debt discount amortized as interest expense over expected term Convertible Notes.
 liability component Convertible Notes date issuance computed as $83,079 interest-whole derivative $1,499 carrying value Notes $81,580.equity component issuance was $23,921. debt current liability convertible notes liabilities equity redeemable security equity Consolidated Balance Sheet.
 Offering costs $4,286 Convertible Notes allocated to liability equity deferred financing equity costs. $972 allocated equity $3,314 deferred financing costs.
 debt discounts deferred financing costs amortized to interest expense effective interest rate 12. 82%.
 2019 remaining life Convertible Notes 24 months.
 issuance Convertible Notes in Consolidated Balance Sheets December 2019
 Balance December 31, 2019
 Gross proceeds $10,000 $97,000 $107,000
 Unamortized debt discounts deferred financing costs (1
 Net carrying amount $8,864 $84,648 $93,512
 Balance December 31, 2018
 Gross proceeds $10,000 $97,000
Unamortized deferred financing (17,567 (19,189
 $8,378 $79,433


3. Property, Plant and Equipment
Property, plant and equipment as of September 28, 2019 and September 29, 2018 consisted of the following (in thousands):

                                            | 2019      | 2018
------------------------------------------- | --------- | ---------
Land, buildings and improvements            | $289,051  | $267,809
Machinery and equipment                     | 381,656   | 364,034
Computer hardware and software              | 136,227   | 130,645
Capital assets in progress                  | 49,599    | 38,469
Total property, plant and equipment, gross  | 856,533   | 800,957
Less: accumulated depreciation              | (472,309) | (459,651)
Total property, plant and equipment, net    | 384,224   | 341,306

. Property Plant Equipment
 September 2018
 Land buildings improvements $289,051 $267,809
 Machinery equipment 381,656 364,034
 Computer 136,227 130,645
 Capital assets 49,599 38,469
 856,533 800,957
 accumulated depreciation (472,309) (459,651
,224 341,306


Stock Options
Our stock options are generally exercisable in increments of either one-fourth or one-third per year beginning one year from the date of grant. Stock options issued after February 2014 expire eight years from the date of grant. Options issued prior to February 2014 expire six years from the date of grant. Option activity for 2019 is summarized as follows:
The total intrinsic value was $108 million, $446 million, and $198 million for options exercised in 2019, 2018, and 2017, respectively.

                                  | Number of Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life (In Years) | Aggregate Intrinsic Value
--------------------------------- | ---------------- | ----------------------------------------- | ------------------------------------------------------ | -------------------------
Outstanding as of August 30, 2018 | 18               | $23.38                                    |                                                        |
Granted                           | —                | 44.30                                     |                                                        |
Exercised                         | (5)              | 17.50                                     |                                                        |
Canceled or expired               | (1)              | 22.60                                     |                                                        |
Outstanding as of August 29, 2019 | 12               | 25.94                                     | 4.3                                                    | $220
Exercisable as of August 29, 2019 | 7                | $25.37                                    | 3.7                                                    | $143
Unvested as of August 29, 2019    | 5                | 26.94                                     | 5.5                                                    | 77

Options
 exercisable one-fourth or one-third per year grant. after February 2014 expire eight years grant. prior 2014 expire six years. activity 2019
 total intrinsic value $108 million $446 million $198 million options 2019 2018 2017.
 Shares Weighted-Average Exercise Price Per Share Contractual Life Intrinsic Value
 Outstanding as August 30, 2018 $23.
 Granted 44.
 Exercised 17.
 Canceled expired 22.
 Outstanding August 29, 2019 25. $220
 Exercisable August 29, $25. $143
 Unvested.


Acquisition of Fagerdala
On October 2, 2017, the Company acquired Fagerdala Singapore Pte Ltd., a manufacturer and fabricator of polyethylene foam based in Singapore, to join its Product Care division. We acquired 100% of Fagerdala shares for estimated consideration of S$144.7 million, or $106.2 million, net of cash acquired of $13.3 million, inclusive of purchase price adjustments which were finalized in the third quarter of 2018. We acquired Fagerdala to leverage its manufacturing footprint in Asia, experience in foam manufacturing and fabrication and commercial organization to expand our presence across multiple industries utilizing fulfillment to distribute goods.
The following table summarizes the consideration transferred to acquire Fagerdala and the final allocation of the purchase price among the assets acquired and liabilities assumed. price among the assets acquired and liabilities assumed.

                                          | Preliminary Allocation | Measurement Period | Final Allocation
----------------------------------------- | ---------------------- | ------------------ | -----------------------
(In millions)                             | As of October 2, 2017  | Adjustments        | As of December 31, 2018
Total consideration transferred           | $ 106.6                | $ (0.4)            | $ 106.2
Assets:                                   |                        |                    |
Cash and cash equivalents                 | 13.3                   | —                  | 13.3
Trade receivables, net                    | 22.4                   | —                  | 22.4
Inventories, net                          | 10.0                   | 0.1                | 10.1
Prepaid expenses and other current assets | 8.4                    | —                  | 8.4
Property and equipment, net               | 23.3                   | —                  | 23.3
Identifiable intangible assets, net       | 41.4                   | 0.7                | 42.1
Goodwill                                  | 39.3                   | (1.5)              | 37.8
Total assets                              | $ 158.1                | $ (0.7)            | $ 157.4
Liabilities:                              |                        |                    |
Short-term borrowings                     | 14.0                   | —                  | 14.0
Accounts payable                          | 6.9                    | —                  | 6.9
Other current liabilities                 | 15.1                   | (0.1)              | 15.0
Long-term debt, less current portion      | 3.8                    | —                  | 3.8
Non-current deferred taxes                | 11.7                   | (0.2)              | 11.5
Total liabilities                         | $ 51.5                 | $ (0.3)            | $ 51.2

Acquisition Fagerdala
 October 2 2017 acquired Fagerdala Singapore Pte. manufacturer fabricator polyethylene foam Singapore Product Care division. acquired 100% Fagerdala shares S$144. 7 million $106. 2 million cash $13. 3 million purchase price adjustments finalized third quarter 2018. acquired manufacturing footprint Asia experience foam manufacturing fabrication expand presence.
 table summarizes consideration Fagerdala final allocation purchase price assets acquired liabilities assumed.
 Preliminary Allocation Final Allocation
 October 2 2017 Adjustments December 31, 2018
 Total consideration transferred $ 106.
 Assets
 Cash equivalents 13.
 Trade receivables.
 Inventories.
 Prepaid expenses current assets.
 Property equipment.
 intangible assets 41.
 Goodwill.
 Total assets $ 158. 157.
 Liabilities
 Short-term borrowings 14.
 Accounts payable.6. 9
 liabilities 15. 1.
 Long-term debt less 3. 8
 Non-current deferred taxes 11. 7. 2) 11.
 liabilities 51.


The increase in Global Financing total revenue was driven by an increase in internal revenue, partially offset by a decrease in external revenue. Internal revenue grew 9.5 percent driven by increases in internal financing (up 17.6 percent) and internal used equipment sales (up 6.8 percent).
External revenue declined 6.3 percent due to a decrease in external used equipment sales (down 30.8 percent), partially offset by an increase in external financing (up 4.9 percent).
The increase in Global Financing pre-tax income was primarily driven by an increase in gross profit and a decrease in total expense.

($ in millions)                 |        |        |
------------------------------- | ------ | ------ | -------------------------
For the year ended December 31: | 2018   | 2017   | Yr.-to-Yr. Percent Change
Results of Operations           |        |        |
External revenue                | $1,590 | $1,696 | (6.3)%
Internal revenue                | 1,610  | 1,471  | 9.5
Total revenue                   | $3,200 | $3,168 | 1.0%
Pre-tax income                  | $1,361 | $1,278 | 6.5%

Global Financing revenue internal revenue external revenue. Internal revenue grew. percent financing. used equipment sales.
 External revenue declined. 3 percent equipment sales. offset financing. 9.
 increase Global Financing pre-tax income driven gross profit decrease expense.
 year December 31 2018 2017. Percent Change
 External revenue $1,590 $1,696.
 Internal revenue 1,610 1,471.
 Total revenue $3,200 $3,168.
 Pre-tax income $1,361 $1,278.


Statement of financial position
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Altium Limited has provided financial guarantees in respect of credit card facilities and office leases amounting to US$261,518 (2018: US$283,752).
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2019 and 30 June 2018.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June 2019 and 30 June 2018.
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in the relevant notes to the financial statements.

Parent                      |         |
--------------------------- | ------- | -------
                            | 2019    | 2018
                            | US$’000 | US$’000
Total current assets        | 121,041 | 73,202
Total assets                | 383,665 | 336,032
Total current liabilities   | 154,619 | 90,392
Total liabilities           | 155,521 | 92,364
Equity                      |         |
Contributed equity          | 126,058 | 125,635
Foreign currency reserve    | 2,607   | 2,783
Equity compensation reserve | 19,561  | 12,570
Retained profits            | 79,918  | 102,680
Total equity                | 228,144 | 243,668

financial position
 Guarantees parent entity debts subsidiaries
 Altium Limited guarantees credit card office leases US$261,518 (2018 US$283,752).
 no 30 June 2019 2018.
 2019.
 accounting policies consistent Group financial statements.
 US$’000
 assets 121,041 73,202
 383,665 336,032
 liabilities 154,619 90,392
 155,521 92,364
 Contributed equity 126,058 125,635
 Foreign currency reserve 2,607 2,783
 compensation reserve 19,561
 Retained profits 79,918 102,680
 equity 228,144 243,668


This section provides a summary of the capital management activity of the Group during the period, including the Group’s borrowings. The Group manages its liquidity requirements with a range of short-term money market loans, bank loans, and flexible debt instruments with varying maturities.
The Group manages its capital structure with the objective of enhancing long-term shareholder value through funding its business at an optimised weighted average cost of capital.
The Group returns capital to shareholders when consistent with its long-term capital structure objectives and where it will enhance shareholder value. In May 2019, the Group returned $1.7 billion of capital to shareholders through an off-market share buy-back. This resulted in the purchase of 58.7 million shares which were subsequently cancelled. The share buy-back complements dividends of $1.4 billion paid to shareholders this reporting period through the 2018 final and special dividends, and the 2019 interim dividend, with a total of $3.1 billion returned to shareholders, excluding franking credits.
The Group remains committed to solid investment grade credit ratings and a number of actions can be undertaken to support the credit profile including the sale of non-core assets, further working capital initiatives, and adjusting growth capital expenditure and the property leasing profile. The Group’s credit ratings (1) are BBB (stable outlook) according to S&P and Baa2 (stable outlook) according to Moody’s.
In March 2019, the $500 million domestic Medium Term Notes matured. It was refinanced in April 2019 with $400 million of Medium Term Notes issued to meet the Group’s new Green Bond Framework (Green Bonds). The Green Bonds have been issued for a five-year tenor, maturing in April 2024.
In November 2019, $320 million of undrawn syndicated bank loan facilities are due to mature. The Group intends to refinance this facility at maturity.
(1) These credit ratings have been issued by a credit rating agency which holds an Australian Financial Services Licence with an authorisation to issue credit ratings to wholesale clients only and are for the benefit of the Group’s debt providers.

                              | OPENING | NON‑CASH  | NET CASH  | CLOSING
----------------------------- | ------- | --------- | --------- | -------
                              | BALANCE | MOVEMENTS | MOVEMENTS | BALANCE
2019                          | $M      | $M        | $M        | $M
Current, unsecured            |         |           |           |
Short-term money market loans | 16      | 2         | 21        | 39
Bank loans                    | 88      | 5         | 142       | 235
Securities                    | 500     | –         | (500)     | –
Total current borrowings      | 604     | 7         | (337)     | 274
Non‑current, unsecured        |         |           |           |
Bank loans                    | 540     | 36        | 102       | 678
Securities                    | 1,668   | 110       | 400       | 2,178
Unamortised borrowing costs   | (9)     | 5         | –         | (4)
Finance leases                | –       | 6         | (3)       | 3
Total non‑current borrowings  | 2,199   | 157       | 499       | 2,855
Total                         | 2,803   | 164       | 162       | 3,129

capital management activity borrowings. manages liquidity short-term loans bank loans debt instruments varying maturities.
 capital long-term shareholder value optimised cost capital.
 returns capital objectives. May 2019 returned $1. 7 billion off-market share buy-back. 58. 7 million shares cancelled.-back complements dividends $1. 4 billion 2018 2019 interim dividend $3. 1 billion returned excluding franking credits.
 committed solid investment credit ratings sale non-core assets working capital initiatives adjusting growth capital expenditure property leasing profile. credit ratings BBB Baa2 Moody’s.
 March 2019 $500 million Medium Term Notes matured. refinanced April 2019 $400 million Medium Term Notes Green Bond Framework. five-year tenor maturing April 2024.
 November 2019 $320 million undrawn syndicated bank loan mature. intends refinance maturity.
 credit ratings issued Australian Licence debt providers.
OPENING NON‐CASH CASH CLOSING
 BALANCE
 2019 $M
 unsecured
 Short-term loans 16 21
 Bank loans 88 142
 Securities
 current borrowings 604 (337) 274
 Non‐current unsecured
 Bank loans 540 36 102 678
 Securities 1,668 110 400 2,178
 Unamortised borrowing costs
 Finance leases
 non‐current borrowings 2,199 157 499 2,855
 2,803 164 3


Note 14 – Employee Benefit Plans
Pension Benefit Plan
We maintain a defined benefit pension plan covering employees in certain foreign countries.
The pension benefit plan obligations and funded status as of December 31, 2019 and 2018, were as follows:
The accumulated benefit obligation was $43.9 million and $37.2 million as of December 31, 2019 and 2018, respectively. The increase in the accumulated benefit obligation and the actuarial loss was primarily attributable to a decrease in the discount rate during 2019.

(In thousands)                                      | 2019      | 2018
--------------------------------------------------- | --------- | ---------
Change in projected benefit obligation:             |           |
Projected benefit obligation at beginning of period | $37,245   | $34,893
Service cost                                        | 1,471     | 1,193
Interest cost                                       | 634       | 727
Actuarial loss - experience                         | 453       | 38
Actuarial loss - assumptions                        | 5,091     | 2,139
Benefit payments                                    | (166)     | (138)
Effects of foreign currency exchange rate changes   | (826)     | (1,607)
Projected benefit obligation at end of period       | 43,902    | 37,245
Change in plan assets:                              |           |
Fair value of plan assets at beginning of period    | 24,159    | 26,624
Actual gain (loss) on plan assets                   | 4,392     | (2,024)
Contributions                                       | —         | 688
Effects of foreign currency exchange rate changes   | (535)     | (1,129)
Fair value of plan assets at end of period          | 28,016    | 24,159
Unfunded status at end of period                    | $(15,886) | $(13,086)

14 Employee Benefit Plans
 Pension Plan
 defined benefit pension plan foreign countries.
 pension benefit obligations funded status December 31, 2019 2018
 accumulated benefit obligation $43. million $37. 2 million. increase loss discount rate 2019.
 Change projected benefit obligation
 $37,245 $34,893
 Service cost 1,471
 Interest cost 634
 Actuarial loss
 5,091 2,139
 Benefit payments (166)
 foreign currency exchange rate changes
 end 43,902 37,245
 Change plan assets
 24,159 26,624
 gain (loss) 4,392
 Effects foreign currency exchange rate changes
 28,016 24
 Unfunded status end period $(15,886) $(13,086)


Selling and Administrative Expenses. Selling and administrative expenses increased $124.2 million in 2019 compared to 2018. Our selling and administrative expenses by major expense type for 2019 and 2018 were as follows (dollars in thousands):
Selling and administrative expenses increased approximately 70 basis points as a percentage of net sales in 2019 compared to 2018. The increase in expenses reflects the addition of PCM to our North America and EMEA segments, effective August 30, 2019.
The addition of PCM and increased variable compensation resulting from increased sales and gross profit in 2019 compared to 2018 were the primary drivers for the $90.9 million increase in personnel costs. PCM was also the primary driver for year over year increases in facilities, travel and entertainment, and marketing expenses.
Depreciation and amortization expense increased approximately $8.8 million year over year, primarily due to additional amortization expense on newly acquired intangible assets.

                                             | 2019     | 2018     | Change
-------------------------------------------- | -------- | -------- | --------
Personnel costs, including teammate benefits | $684,837 | $593,955 | $90,882
Depreciation and amortization                | 46,209   | 37,458   | 8,751
Facility expenses                            | 30,945   | 26,396   | 4,549
Travel and entertainment                     | 28,402   | 25,656   | 2,746
Legal and professional fees                  | 16,839   | 16,103   | 736
Marketing                                    | 11,597   | 10,345   | 1,252
Other                                        | 61,908   | 46,616   | 15,292
Total                                        | $880,737 | $756,529 | $124,208

Selling Administrative Expenses. increased $124. 2 million 2019 2018.
 increased 70 points net sales. PCM North America EMEA segments August 30, 2019.
 increased variable compensation sales profit $90. 9 million increase personnel costs. facilities travel entertainment marketing expenses.
 Depreciation amortization expense increased $8. 8 million acquired intangible assets.
 2018
 Personnel costs benefits $684,837 $593,955 $90,882
 Depreciation amortization 46,209 37,458
 Facility expenses 30,945
 Travel entertainment 28,402 25,656
 Legal professional fees 16,839,103
 Marketing 11,597
 Other 61,908
 Total $880,737 $756,529 $124,208


Information about Contract Balances
Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of the Company's deferred revenue balance is related to services revenue, primarily customer support contracts.
In some arrangements the Company allows customers to pay for term based software licenses and products over the term of the software license. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables which are anticipated to be invoiced in the next twelve months are included in Accounts receivable on the consolidated balance sheet. Long term unbilled receivables are included in Other assets. The opening and closing balances of the Company’s accounts receivable, unbilled receivables, and deferred revenues are as follows:
The increase in accounts receivable is primarily a result of an increase in subscription software transactions that are recognized as revenue at the time of sale but paid for over time. The net increase in deferred revenue is primarily the result of an increase in deferred customer support revenue related to software and products revenue transactions and customer support renewals during fiscal 2019.
The amount of revenue recognized in the period that was included in the opening deferred revenue balance was $238,603 for the year ended March 31, 2019. The vast majority of this revenue consists of customer support arrangements. The amount of revenue recognized from performance obligations satisfied in prior periods was not material.
Notes to Consolidated Financial Statements — (Continued) (In thousands, except per share data)

                                     | Accounts Receivable | Unbilled Receivable (current) | Unbilled Receivable (long-term) | Deferred Revenue (current) | Deferred Revenue (long-term)
------------------------------------ | ------------------- | ----------------------------- | ------------------------------- | -------------------------- | ----------------------------
Opening Balance as of March 31, 2018 | $152,219            | $9,900                        | $4,380                          | $241,113                   | $84,661
Increase/(decrease), net             | 9,351               | 5,366                         | 2,836                           | (2,674)                    | 14,596
Ending Balance as of March 31, 2019  | $161,570            | $15,266                       | $7,216                          | $238,439                   | $99,257

Contract Balances
 collected services deferred revenue. Company deferred revenue related services primarily customer support contracts.
 pay term software licenses products over term. unbilled receivables. twelve months included in Accounts receivable. Long term unbilled receivables Other assets. opening closing balances accounts receivable unbilled receivables deferred revenues
 increase in accounts receivable subscription software transactions paid over time. increase deferred revenue deferred customer support revenue fiscal 2019.
 revenue recognized opening deferred revenue balance $238,603 year March 31, 2019. majority customer support arrangements. revenue performance obligations not material.
 Consolidated Financial Statements
 Accounts Receivable Unbilled Receivable-term Deferred Revenue
 Opening Balance as March 31, 2018 $152,219  $9,900  $4,380  $241,113 $84,661
9,351 5,366 2,836 14,596
 March $161,570,266 $238,439 $99,257


The movements below in foreign currency translation reserve and cashflow hedge reserve relating to the NSPT Group are presented within non-controlling interest in the Group’s consolidated statement of changes in equity.
Taxation impact on revaluation applies only to cash flow hedges held in NSNZPT, a sub-trust of NSPT, which is subject to New Zealand tax legislation. Deferred tax does not apply to any other cash flow hedges held in the NSPT Group under current Australian tax legislation.
The hedging reserve is used to record gains or losses on derivatives that are designated as cash flow hedges and recognised in other comprehensive income, as described in note 2(m). Amounts are reclassified to profit or loss in the period when the associated hedged transaction takes place.
On 24 June 2019, the Group reset the interest rates associated with AUD denominated interest rate swaps designated as cash flow hedges. This resulted in a cash outflow of $22.9m which reduced the Group’s financial liability as presented in note 9.8. In accordance with AASB 9 Financial instruments, as the nature of the underlying hedged instrument is unchanged the fair value of this outflow remains in the cash flow hedge reserve and will be amortised to the statement of profit or loss in future periods.
The cash flow hedge is included in non-controlling interest in the Consolidated Group and is not classified within other reserves.

NSPT Group                               |          |
---------------------------------------- | -------- | -------
                                         | 2019     | 2018
                                         | $'000    | $'000
Foreign currency translation reserve     |          |
Opening balance at 1 July                | (115)    | 232
Net investment hedge                     | (1,591)  | 1,007
Foreign exchange translation differences | 2,464    | (1,354)
Closing balance at 30 June               | 758      | (115)
Cash flow hedge reserve                  |          |
Opening balance at 1 July                | (2,073)  | (45)
Revaluation of derivatives               | (22,098) | (2,112)
Taxation impact on revaluation           | 290      | 84
Closing balance at 30 June               | (23,881) | (2,073)
Other reserves                           | (23,123) | (2,188)

movements foreign currency cashflow hedge reserve NSPT Group non-controlling interest changes equity.
 Taxation impact revaluation applies cash flow hedges NSNZPT sub-trust subject New Zealand tax legislation. Deferred tax other cash flow hedges NSPT Group Australian tax legislation.
 hedging reserve gains losses derivatives cash flow hedges. Amounts reclassified profit loss hedged transaction.
 24 June 2019 Group reset interest rates swaps cash flow hedges. cash outflow $22. 9m reduced financial liability. instrument fair value outflow remains hedge reserve amortised profit loss future.
 cash flow hedge non-controlling interest Consolidated Group not classified other reserves.
 NSPT Group
 Foreign currency translation reserve
 balance 1 July
 Net investment hedge
 Foreign exchange translation differences
 balance
 Cash flow hedge reserve
 Revaluation derivatives
 Taxation impact revaluation
30 June,881) (2,073)
 reserves,123,188


In the first quarter of 2019, the Company determined that certain revenue in the IT Services and Hardware segment associated with nonrecurring projects is better aligned with Infrastructure Solutions, rather than Consulting, where it was previously reported.  As a result, the Company reclassed revenue of $26.6 million and $12.3 million from Consulting to Infrastructure Solutions for the twelve months ended December 31, 2018 and 2017, respectively.  This reclassification of revenue had no impact on the Consolidated Statements of Operations
The following table presents revenues disaggregated by contract type

Year ended December 31,                                    |          |          |
---------------------------------------------------------- | -------- | -------- | --------
(dollars in millions)                                      | 2019     | 2018     | 2017
Entertainment and Communications                           |          |          |
Products and services transferred at a point in time       | $31.7    | $25.3    | $20.6
Products and services transferred over time                | 942.4    | 805.8    | 664.3
Intersegment revenue                                       | 21.6     | 22.3     | 21.2
Total Entertainment and Communications                     | 995.7    | 853.4    | 706.1
IT Services and Hardware                                   |          |          |
Products and services transferred at a point in time       | 138.7    | 142.9    | 80.8
Products and services transferred over time                | 423.9    | 404.2    | 300.0
Intersegment revenue                                       | 4.8      | 3.8      | 4.3
Total IT Services and Hardware                             | 567.4    | 550.9    | 385.1
Total Revenue                                              |          |          |
Total products and services transferred at a point in time | 170.4    | 168.2    | 101.4
Total products and services transferred over time          | 1,366.3  | 1210.0   | 964.3
Total revenue                                              | $1,536.7 | $1,378.2 | $1,065.7

first quarter 2019 Company determined revenue IT Services Hardware segment nonrecurring projects aligned Infrastructure Solutions Consulting. reclassed revenue $26. 6 million $12. 3 million Consulting Infrastructure Solutions months December 31, 2018 2017. reclassification Consolidated Statements Operations
 table presents revenues disaggregated contract type
 ended December 31,
 (dollars millions 2019 2018 2017
 Communications
 services transferred $31. 7 $25. 3 $20.
 942. 805. 8 664.
 21. 22. 21.
 995. 853. 706.
 138. 142. 80.
 423. 404. 300.
 4. 3. 4.
 IT Services Hardware 567. 550. 385.
 services transferred 170. 168. 101.
 1,366. 3 1210. 964.
 $1,536. 7 $1,378. 2 $1,065.


Market and Market Prices of Common Stock
During 2016 fiscal year and through February 22, 2017, our common stock was traded on the Nasdaq Capital Market under the symbol “ACUR”. On February 23, 2017, our common stock was delisted from the Nasdaq Capital Market due to our failure to comply with Nasdaq’s Listing Rule 5550(b)(1), which requires that we maintain $2.5 million in stockholders’ equity for continued listing (or meet the alternatives of market value of listed securities of $35 million or net income from continuing operations). NASDAQ had granted us a grace period through February 10, 2017, to regain compliance with Listing Rule 5550(b)(1), but we were unable to regain compliance within such period.
Commencing on February 23, 2017, our common stock was quoted on the OTCQB under the symbol “ACUR”, however commencing June 4, 2018 and lasting until July 2, 2018 it was quoted on the OTC Markets OTC Pink tier. The downgrade was a result of the late filing of our 2017 Annual Report on Form 10-K beyond any applicable grace periods. The Company regained compliance with the OTCQB and effective July 3, 2018 it was quoted on the OTCQB. However, commencing May 20, 2019 as a result of late filing of our 2018 Annual Report on Form 10-K our common stock was again relegated to the OTC Markets OTC Pink tier. The Company regained compliance with the OTCQB in March, 2020 and effective March 23, 2020 it was quoted on the OTCQB.
Set forth below for the period indicated are the high and low sales prices for our common stock in the OTC Market of OTCQB and Pink tier.
On March 27, 2020 the closing sales price of our common stock was $0.22.

Period                            |       | Sales Prices
--------------------------------- | ----- | ------------
                                  | High  | Low
2019 Fiscal Year                  |       |
First Quarter                     | $0.29 | $0.11
Second Quarter                    | 0.28  | 0.13
Third Quarter                     | 0.45  | 0.14
Fourth Quarter                    | 0.63  | 0.20
2020 Fiscal Year                  |       |
First Quarter thru March 27, 2020 | 0.47  | $0.12

Market Prices Common Stock
 2016 year February 22, 2017 common stock traded Nasdaq Capital Market “ACUR”. February 23, 2017 stock delisted Nasdaq Listing Rule 5550(b)(1) $2. 5 million stockholders’ equity listing market value $35 million net income operations. grace period February 10, 2017 regain compliance.
 February 23, 2017 stock quoted OTCQB June 4 2018 July 2, 2018 quoted OTC Markets Pink. downgrade late filing 2017 Annual Report Form 10-K. regained compliance July 3, 2018 quoted OTCQB. May 20, 2019 late 2018 Annual Report 10-K relegated OTC Markets Pink tier. regained compliance March 2020 23, quoted OTCQB.
 high low sales prices common stock.
 March 27, 2020 closing sales price $0. 22.
 2019 Fiscal Year
 First Quarter.
 Second.
 Third.
 Fourth Quarter..
 2020 Fiscal Year
 First Quarter March 27,.


Income Tax Expense (Benefit)
Significant components of the income tax expense (benefit) were as follows:

                                       |        | Fiscal        |
-------------------------------------- | ------ | ------------- | -----
                                       | 2019   | 2018          | 2017
                                       |        | (in millions) |
Current income tax expense (benefit):  |        |               |
U.S.:                                  |        |               |
Federal                                | $ (28) | $ 20          | $ (9)
State                                  | 2      | 21            | 9
Non-U.S.                               | 229    | 406           | 322
                                       | 203    | 447           | 322
Deferred income tax expense (benefit): |        |               |
U.S.:                                  |        |               |
Federal                                | (25)   | 499           | (119)
State                                  | (8)    | (30)          | (15)
Non-U.S.                               | (185)  | (1,260)       | (8)
                                       | (218)  | (791)         | (142)
Income tax expense (benefit)           | $ (15) | $ (344)       | $ 180

Income Tax Expense
 components
 2019 2018 2017
 millions
 Current income tax expense
.
 Federal (28) 20
 21
 Non. 229 406 322
 203 447 322
 Deferred income tax expense
.
 Federal (25) 499 (119)
 State (30)
 Non-U. (185) (1,260)
 (218) (791) (142)
 Income tax expense (benefit $ (15) (344) 180


13. Loss per Share
The following data shows the amounts used in computing loss per share and the effect on earnings and the weighted average number of shares of dilutive potential common shares.
Basic earnings (loss) per share is computed as net income available to common shareholders divided by the weighted average basic shares outstanding. The outstanding shares used to calculate the weighted average basic shares excludes 300,437, 334,817 and 490,355 of restricted shares and performance shares at March 31, 2019, 2018 and 2017, respectively, as these shares were issued but were not vested and, therefore, not considered outstanding for purposes of computing basic earnings per share at the balance sheet dates.
Diluted earnings (loss) per share includes the effect of all potentially dilutive securities on earnings per share. We have stock options, stock-settled appreciation rights ("SSARs"), unvested restricted shares and unvested performance shares that are potentially dilutive securities. When a loss is reported, the denominator of diluted earnings per share cannot be adjusted for the dilutive impact of sharebased compensation awards because doing so would be anti-dilutive.
In addition, when a net loss is reported, adjusting the denominator of diluted earnings per share would also be anti-dilutive to the loss per share, even if the entity has net income after adjusting for a discontinued operation. Therefore, for all periods presented, basic weighted-average shares outstanding were used in calculating the diluted net loss per share.

                                                                             |           | Year ended March 31, |
---------------------------------------------------------------------------- | --------- | -------------------- | ---------
(In thousands, except per share data)                                        | 2019      | 2018                 | 2017
Numerator:                                                                   |           |                      |
Net loss                                                                     | $(13,164) | $(8,350)             | $(11,721)
Denominator:                                                                 |           |                      |
Weighted average shares outstanding - basic and diluted                      | 23,037    | 22,801               | 22,615
Loss per share - basic and diluted:                                          |           |                      |
Net loss per share-basic and diluted                                         | $(0.57)   | $(0.37)              | $(0.52)
Anti-dilutive stock options, SSARs, restricted shares and performance shares | 1,433     | 756                  | 1,004

. Loss per Share
 data shows loss per share effect earnings dilutive shares.
 earnings (loss per share net income divided by average shares. outstanding shares 300,437 334,817 490,355 restricted performance shares at March 31, 2019 2018 2017 not vested.
 Diluted earnings (loss includes effect dilutive securities. stock options stock-settled appreciation rights unvested restricted shares performance shares dilutive. denominator diluted earnings per share dilutive impact compensation.
 net loss adjusting denominator diluted earnings anti-dilutive. basic weighted-average shares outstanding used diluted net loss per share.
 Year ended March 31,
 2019 2018 2017
 Net loss $(13,164) $(8,350) $(11,721)
 Weighted average shares outstanding basic diluted 23,037 22,801 22,615
 Loss per share
loss share diluted. 37.
 Anti-dilutive options restricted shares 1,433 756 1,004


The following is a breakdown of revenue by shipment destination (in thousands):
(1) Asia Pacific includes revenue from China $1.1 million or 11% and Japan of $1.8 million or 17% of total revenue in 2019 and $1.8 million or 15% and $1.6 million or 12% of total revenue in 2018, respectively. In 2017, revenue from China and Japan were $1.3 million or 11% and $1.5 million or 12%, respectively.
(2) North America includes revenue from the United States of $4.7 million or 46% of total revenue in 2019, $6.4 million or 50% of total revenue in 2018 and $4.2 million or 34% of total revenue in 2017.

                      |         |         | Fiscal Years
--------------------- | ------- | ------- | ------------
                      | 2019    | 2018    | 2017
Revenue by geography: |         |         |
Asia Pacific (1)      | $3,049  | $4,905  | $5,810
Europe                | 2,459   | 1,280   | 2,015
North America (2)     | 4,802   | 6,444   | 4,324
Total revenue         | $10,310 | $12,629 | $12,149

breakdown revenue shipment
 Asia Pacific China $1. 1 million 11% Japan $1. 8 million 17% 2019 $1. 8 million 15%. 6 million 12% 2018. 2017 Japan $1. 3 million 11% $1. 5 million 12%.
 North America United States $4. 7 million 46% 2019 $6. 4 million 50% 2018 $4. 2 million 34% 2017.
 Asia Pacific $3,049 $4,905
 Europe 2,459
 North America,444
 $10,310


AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, unless otherwise disclosed)
18. EARNINGS PER COMMON SHARE
The following table sets forth basic and diluted net income per common share computational data for the years ended December 31, (shares in thousands, except per share data):

                                                                                | 2019     | 2018     | 2017
-------------------------------------------------------------------------------------------------- | -------- | -------- | --------
Net income attributable to American Tower Corporation stockholders                                 | $1,887.8 | $1,236.4 | $1,238.9
Dividends on preferred stock                                                                       | —        | (9.4)    | (87.4)
Net income attributable to American Tower Corporation common stockholders                          | $1,887.8 | $1,227.0 | $1,151.5
Basic weighted average common shares outstanding                                                   | 442,319  | 439,606  | 428,181
Dilutive securities                                                                                | 3,201    | 3,354    | 3,507
Diluted weighted average common shares outstanding                                                 | 445,520  | 442,960  | 431,688
Basic net income attributable to American Tower Corporation common stockholders per common share   | $4.27    | $2.79    | $2.69
Diluted net income attributable to American Tower Corporation common stockholders per common share | $4.24    | $2.77    | $2.67

AMERICAN TOWER CORPORATION SUBSIDIARIES FINANCIAL STATEMENTS amounts millions
. EARNINGS COMMON SHARE
 diluted net income common share years December 31,
 Net income American Tower Corporation stockholders $1,887. $1,236. $1,238.
 Dividends preferred stock.
 income $1,887. $1,227. $1,151.
 average common shares 442,319,606 428,181
 Dilutive securities 3,201 3,354 3,507
 Diluted 445,520,960 431,688
 income Corporation $4. 27 $2.
 Diluted income $4. 24 $2.


ITEM 6. SELECTED FINANCIAL DATA
The following selected consolidated financial data should be read together with our consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this report. The selected consolidated financial data in this section is not intended to replace our consolidated financial statements and the accompanying notes. Our historical results are not necessarily indicative of our future results.
We derived the consolidated statements of operations data for the fiscal years ended December 31, 2019, 2018 and 2017 and the consolidated balance sheets data as of December 31, 2019 and 2018 from our audited consolidated financial statements appearing elsewhere in this report. The consolidated statement of operations data for the years ended December 31, 2016 and 2015 and the consolidated balance sheet data as of December 31, 2017, 2016 and 2015 have been derived from our audited consolidated financial statements, which are not included in this report.

                                                    | Year Ended December 31, |            |                                                        |            |
--------------------------------------------------- | ----------------------- | ---------- | ------------------------------------------------------ | ---------- | ----------
                                                    | 2019                    | 2018       | 2017                                                   | 2016       | 2015
Consolidated Statement of Operations Data           |                         |            | (Dollars in thousands except share and per share data) |            |
Net sales                                           | $ 245,862               | $193,237   | $152,359                                               | $129,707   | $113,505
Cost of goods sold                                  | 131,665                 | 103,247    | 79,943                                                 | 69,336     | 58,856
Gross profit                                        | 114,197                 | 89,990     | 72,416                                                 | 60,371     | 54,649
Selling, general and administrative expenses        | 114,450                 | 94,876     | 75,167                                                 | 62,586     | 58,297
Loss from operations                                | (253)                   | (4,886)    | (2,751)                                                | (2,215)    | (3,648)
Other income (expenses), net                        | 5                       | (102)      | (525)                                                  | (182)      | 449
Interest expense                                    | (991)                   | (296)      | (910)                                                  | (698)      | (455)
Loss before income taxes                            | (1,239)                 | (5,284)    | (4,187)                                                | (3,095)    | (3,653)
Income tax expense                                  | 144                     | 77         | 75                                                     | 66         | 58
Net loss attributable to common stockholders        | $(1,383)                | $(5,361)   | $(4,262)                                               | $(3,161)   | $(3,711)
Net loss per share                                  |                         |            |                                                        |            |
Basic                                               | $(0.04)                 | $(0.15)    | $(0.12)                                                | $(0.09)    | $(0.11)
Diluted                                             | $(0.04)                 | $(0.15)    | $(0.12)                                                | $(0.09)    | $(0.11)
Weighted Average shares of common stock outstanding |                         |            |                                                        |            |
Basic                                               | 35,950,117              | 35,329,170 | 34,487,239                                             | 33,674,416 | 33,497,940
Diluted                                             | 35,950,117              | 35,329,170 | 34,487,239                                             | 33,674,416 | 33,497,940

. SELECTED FINANCIAL DATA
 consolidated financial data with statements notes “Management’s Discussion Analysis Financial Condition Results Operations”. not replace. historical results not indicative future results.
 derived 2019 2018 2017 balance sheets from audited financial statements. 2016 2015 balance not.
 December
 2019 2018 2017 2016 2015
 Consolidated Statement Operations Data
 Net sales $ 245,862  $193,237  $152,359 $129,707 $113,505
 Cost goods sold 131,665  103,247  79,943 69,336 58,856
 Gross profit 114,197  89,990  72,416 60,371 54,649
 Selling administrative expenses 114,450 94,876  75,167 62,586 58,297
 Loss from operations (253) (4,886) (2,751) (2,215) (3,648)
 Other income (102) (525) (182) 449
Interest expense (991) (296) (910) (698) (455)
 Loss before income taxes (1,239) (5,284) (4,187) (3,095) (3,653)
 Income tax expense 144 77 75 66
 Net loss common $(1,383) $(5,361 $(4,262),161,711)
 Net loss per share
.
.
 Average shares common stock
 35,950,117 35,329,170 34,487,239 33,674,416 33,497,940


ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
Disaggregation of Revenue
The following table presents our sales by product line, which includes certain reclassifications to prior comparative periods to conform to our current year presentation:

                        |          | Years Ended December 31, |
----------------------- | -------- | ------------------------ | --------
                        | 2019     | 2018                     | 2017
Semiconductor Equipment | $403,018 | $533,770                 | $554,063
Industrial & Medical    | 245,992  | 185,122                  | 116,949
Data Center Computing   | 91,438   | —                        | —
Telecom & Networking    | 48,500   | —                        | —
Total                   | $788,948 | $718,892                 | $671,012

ADVANCED ENERGY INDUSTRIES. FINANCIAL STATEMENTS share
 Revenue
 table sales product line
 Ended December 31,
 Semiconductor Equipment $403,018 $533,770 $554,063
 Industrial Medical 245,992 185,122 116,949
 Data Center Computing 91,438
 Telecom Networking 48,500
 Total $788,948 $718,892 $671,012


Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’:
No Director received compensation for loss of office (2018 nil).
There were gains of $2,010,731 (2018 $852,742) on the exercise of options by key management personnel in 2019.
For further details refer to the Report on Directors’ remuneration on pages 77 to 101.

                             | 2019    | 2018
---------------------------- | ------- | -------
                             | $000    | $000
Short-term employee benefits | 3,540.9 | 3,842.1
Share-based payment          | 1,982.7 | 664.6
                             | 5,523.6 | 4,506.7

Remuneration key management personnel
 Directors IAS 24 Party
 No Director received compensation loss office.
 gains $2,010,731 (2018 $852,742) options 2019.
 details Report Directors’ remuneration pages 77 to 101.
 Short-term employee benefits 3,540. 3,842.
 Share-based payment 1,982.
 5,523. 4,506.