Other Subsidiary Debt— The Company’s other subsidiary debt includes (i) a credit facility entered into by one of the Company’s South African subsidiaries in December 2015, as amended (the “South African Credit Facility”), (ii) a long-term credit facility entered into by one of the Company’s Colombian subsidiaries in October 2014 (the “Colombian Credit Facility”), (iii) a credit facility entered into by one of the Company’s Brazilian subsidiaries in December 2014 (the “Brazil Credit Facility”) with Banco Nacional de Desenvolvimento Econômico e Social, (iv) a note entered into by one of the Company’s subsidiaries in October 2018 in connection with the acquisition of sites in Kenya (the “Kenya Debt”), (v) U.S. subsidiary debt related to a seller-financed acquisition (the “U.S. Subsidiary Debt”) and (vi) debt entered into by certain Eaton Towers subsidiaries acquired in connection with the Eaton Towers Acquisition (the “Eaton Towers Debt”).
Amounts outstanding and key terms of other subsidiary debt consisted of the following as of December 31, (in millions, except percentages):
(1) Includes applicable deferred financing costs.
(2) Denominated in ZAR, with an original principal amount of 830.0 million ZAR. On December 23, 2016, the borrower borrowed an additional 500.0 million ZAR. Debt accrues interest at a variable rate. The borrower no longer maintains the ability to draw on the South African Credit Facility.
(3) Denominated in COP, with an original principal amount of 200.0 billion COP. Debt accrues interest at a variable rate. The loan agreement for the Colombian Credit Facility requires that the borrower manage exposure to variability in interest rates on certain of the amounts outstanding under the Colombian Credit Facility. The borrower no longer maintains the ability to draw on the Colombian Credit Facility.
(4) Denominated in BRL, with an original principal amount of 271.0 million BRL. Debt accrues interest at a variable rate. The borrower no longer maintains the ability to draw on the Brazil Credit Facility.
(5) Denominated in USD, with an original principal amount of $51.8 million. The loan agreement for the Kenya Debt requires that the debt be paid either (i) in future installments subject to the satisfaction of specified conditions or (ii) three years from the note origination date.
(6) Related to a seller-financed acquisition. Denominated in USD with an original principal amount of $2.5 million.
(7) Related to the Eaton Towers Acquisition. Denominated in multiple currencies, including USD, EUR, KES and XOF. Amounts shown represent principal outstanding as of December 31, 2019.
(8) Subsequent to December 31, 2019, the Company repaid all of the outstanding USD denominated and KES denominated debt.
Pursuant to the agreements governing the South African Credit Facility and the Colombian Credit Facility, payments of principal and interest are generally payable quarterly in arrears. Outstanding principal and accrued but unpaid interest will be due and payable in full at maturity. The South African Credit Facility may be prepaid in whole or in part without prepayment consideration. The Colombian Credit Facility may be prepaid in whole or in part at any time, subject to certain limitations and prepayment consideration.
The South African Credit Facility, the Colombian Credit Facility and the Brazil Credit Facility are secured by, among other things, liens on towers owned by the applicable borrower.
Each of the agreements governing the other subsidiary debt contains contractual covenants and other restrictions. Failure to comply with certain of the financial and operating covenants could constitute a default under the applicable debt agreement, which could result in, among other things, the amounts outstanding, including all accrued interest and unpaid fees, becoming immediately due and payable.

                                  | Carrying Value (Denominated Currency) (1) |           | Carrying Value (USD) (1) |       | Interest Rate | Maturity Date
--------------------------------- | ----------------------------------------- | --------- | ------------------------ | ----- | ------------- | -----------------
                                  | 2019                                      | 2018      | 2019                     | 2018  |               |
South African Credit Facility (2) | 288.7                                     | 577.4     | $20.6                    | $40.2 | 8.75%         | December 17, 2020
Colombian Credit Facility (3)     | 79,647.3                                  | 109,193.8 | $24.3                    | $33.6 | 8.13%         | April 24, 2021
Brazil Credit Facility (4)        | 65.4                                      | 94.7      | $16.2                    | $24.4 | Various       | January 15, 2022
Kenya Debt (5)                    | 29.6                                      | 51.8      | $29.6                    | $51.8 | 8.00%         | October 1, 2021
U.S. Subsidiary Debt (6)          | 1.9                                       | 2.5       | $1.9                     | $2.5  | —%            | January 1, 2022
Eaton Towers Debt (7):            |                                           |           |                          |       |               |
USD Denominated (8)               | 238.8                                     | —         | $238.8                   | $—    | Various       | Various
EUR Denominated                   | 26.2                                      | —         | $29.5                    | $—    | Various       | Various
XOF Denominated                   | 16,836.8                                  | —         | $28.8                    | $—    | Various       | Various
KES Denominated (8)               | 3,319.2                                   | —         | $ 32.7                   | $—    | Various       | Various

Subsidiary includes credit facility South African December 2015, African Credit long-term credit facility Colombian October 2014 Credit Brazilian December 2014 Credit Banco Nacional de Desenvolvimento Econômico Social note October 2018 Kenya U. S. debt seller-financed acquisition. debt Eaton Towers subsidiaries Eaton Towers Acquisition Debt”).
 subsidiary debt December 31,
 Includes deferred financing costs.
 Denominated original principal amount 830. million ZAR. December 23, 2016, borrowed additional 500. million ZAR. accrues interest variable rate. draw South African Credit Facility.
 Denominated COP original principal amount 200. billion COP. accrues interest variable rate. loan agreement Colombian Credit Facility variability interest rates. no draw Colombian Credit Facility.
 Denominated BRL original principal amount 271. 0 million BRL. accrues interest variable rate. no draw Brazil Credit Facility.
Denominated USD original principal amount $51. 8 million. loan agreement Kenya Debt requires paid future installments conditions or three years note origination date.
 seller-financed acquisition. USD original principal amount $2. 5 million.
 Eaton Towers Acquisition. multiple currencies USD EUR XOF. principal outstanding December 31, 2019.
 2019 Company repaid outstanding USD debt.
 agreements South African Credit Facility Colombian Credit Facility principal interest payable quarterly arrears. Outstanding principal unpaid interest due payable at maturity. South African Credit Facility prepaid without prepayment. Colombian Credit Facility prepaid limitations prepayment consideration.
 secured liens towers borrower.
 agreements debt contractual covenants restrictions. Failure default accrued interest unpaid fees due payable.
 Carrying Value Currency) (USD) Interest Rate Maturity Date
 2019
 South African Credit Facility 288. 7 577.$20. $40. 8. 75% December 17, 2020
 Colombian Credit Facility 79,647. 109,193. $24. $33. 8. 13% April 24, 2021
 Brazil Credit Facility 65. 94. $16. $24. January 15, 2022
 Kenya Debt 29. 51. $29. $51. October 1, 2021
. Subsidiary Debt. $1. $2. January 1, 2022
 Eaton Towers Debt
 USD 238. $238.
 26. $29.
 16,836. $28.
 3,319. 32.


25. Loans and other borrowings continued
Loans and other borrowings are analysed as follows:
a Includes collateral received on swaps of £638m (2017/18: £525m, 2016/17: £702m).
The carrying values disclosed in the above table reflect balances at amortised cost adjusted for accrued interest and fair value adjustments to the relevant loans or borrowings. These do not reflect the final principal repayments that will arise after taking account of the relevant derivatives in hedging relationships which are reflected in the table below. Apart from finance leases, all borrowings as at 31 March 2019, 2018 and 2017 were unsecured.

                                  | 2019   | 2018   | 2017
--------------------------------- | ------ | ------ | ------
At 31 March                       | £m     | £m     | £m
Current liabilities               |        |        |
Listed bonds                      | 1,367  | 1,702  | 1,539
Finance leases                    | 16     | 18     | 15
Bank loans                        | –      | –      | 352
Other loans and bank overdrafts a | 717    | 561    | 726
Total current liabilities         | 2,100  | 2,281  | 2,632
Non-current liabilities           |        |        |
Listed bonds                      | 14,586 | 11,789 | 9,866
Finance leases                    | 190    | 205    | 214
Other loans                       | –      | –      | 1
Total non-current liabilities     | 14,776 | 11,994 | 10,081
Total                             | 16,876 | 14,275 | 12,713

. Loans borrowings
 analysed
 collateral swaps £638m £525m 2016/17 £702m.
 carrying values reflect amortised cost accrued interest fair value adjustments. final principal repayments derivatives hedging relationships. borrowings 31 March 2019 2018 2017 unsecured.
 liabilities
 Listed bonds 1,367 1,702 1,539
 Finance leases
 Bank loans
 Other loans overdrafts
 liabilities 2,100 2,281 2,632
 Non-current liabilities
 Listed bonds 14,586 11,789 9,866
 Finance leases 190
 Other loans
 non-current liabilities 14,776 11,994 10,081
 14,275 12,713


DERIVATIVE LIABILITIES
In connection with the issuance of Series A-1 Preferred Stock in June 2017, the Company issued a warrant with variable consideration through September 2018. The Company determined that this instrument is an embedded derivative pursuant to ASC 815, “Derivatives and Hedging.” The accounting treatment of derivative financial instruments requires that the Company record the warrant, at its fair value as of the inception date of the agreement and at fair value as of each subsequent balance sheet date through the expiration of the variable consideration. Any change in fair value is recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. On September 19, 2018, upon expiration of the variable consideration, the warrant liability of $4.5 million was reclassified to equity.
The Monte Carlo Valuation model is used to estimate the fair value of the warrant. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the instrument granted.
The risk-free interest rate used is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. The volatility is a measure of the amount by which the Company’s share price has fluctuated or is expected to fluctuate. The dividend yield is zero as the Company has not made any dividend payment and has no plans to pay dividends in the foreseeable future. The Company determines the expected term of its warrant awards by using the contractual term.
The principal assumptions used in applying the model were as follows:

                        | Upon 2018 Expiration | December 31, 2017
----------------------- | -------------------- | -----------------
Assumptions:            |                      |
Risk-free interest rate | 2.3% - 2.5%          | 1.5% - 2.0%
Expected life           | 1.8 - 2.2 Years      | 2.5 - 3 Years
Expected volatility     | 65% - 70%            | 50% - 60%
Dividends               | 0%                   | 0%

LIABILITIES
 Series A-1 Preferred Stock June 2017 Company issued warrant variable consideration through September 2018. determined instrument derivative ASC 815 “Derivatives and Hedging. accounting treatment derivative instruments warrant fair value inception date each subsequent balance sheet date expiration. change fair value recorded derivative liabilities. reassesses classification date. classification changes contract reclassified date. September 19, 2018 expiration variable consideration warrant liability $4. 5 million reclassified to equity.
 Monte Carlo Valuation model fair value warrant. traded options. expected volatility estimated recent historical period weighted average life instrument.
 risk-free interest rate United States Treasury rate grant equal life equity instrument. volatility Company’s share price. dividend yield zero no plans. determines expected term warrant awards contractual term.
 principal assumptions
 2018 Expiration December 31, 2017
 Risk-free interest rate. 3% -. 5%.
 Expected life. 8 -. Years.3
 volatility 65% 70% 60%
 Dividends


15. ASSET UNDER DEVELOPMENT
In May 2018, upon the completion of the Hilli FLNG conversion and commissioning, we reclassified $1,296 million to "Vessels and equipment, net" in our consolidated balance sheet as of December 31, 2018.
In December 2018, we entered into agreements with Keppel for the conversion of the Gimi to a FLNG and consequently reclassified the carrying value of the Gimi of $20.0 million from "Vessels and equipment, net" to "Asset under development".
In February 2019, Golar entered into an agreement with BP for the employment of a FLNG unit, Gimi, to service the Greater Tortue Ahmeyim project for a 20-year period expected to commence in 2022.
In April 2019, we issued the shipyard with a Final Notice to Proceed with conversion works that had been initiated under the Limited Notice to Proceed. We also completed the sale of 30% of the total issued ordinary share capital of Gimi MS Corp to First FLNG Holdings (see note 5). The estimated conversion cost of the Gimi is approximately $1.3 billion.

(in thousands of $)                                | 2019    | 2018
-------------------------------------------------- | ------- | -----------
As of January 1                                    | 20,000  | 1,177,489
Additions                                          | 372,849 | 118,942
Transfer to vessels and equipment, net (note 16)   | —       | (1,296,431)
Transfer from vessels and equipment, net (note 16) | —       | 20,000
Transfer from other non-current assets (note 17)   | 31,048  | —
Interest costs capitalized                         | 10,351  | —
As of December 31                                  | 434,248 | 20,000

. ASSET UNDER DEVELOPMENT
 May 2018 Hilli FLNG conversion reclassified $1,296 million equipment balance sheet December 31, 2018.
 December 2018 agreements Keppel conversion Gimi FLNG reclassified value Gimi $20. million equipment development.
 February 2019 Golar agreement BP employment FLNG unit Gimi Greater Tortue Ahmeyim project 20-year period 2022.
 April 2019 issued shipyard Final Notice Proceed conversion. sale 30% capital Gimi MS First FLNG Holdings. estimated conversion cost Gimi $1. 3 billion.
 January 1 1,177,489
 Additions 372,849 118,942
 Transfer vessels equipment
 non-current assets
 Interest costs capitalized 10,351
 December 31 434,248


Year ended December 31, 2017 compared to the year ended December 31, 2018
The following table summarizes our net cash flows from operating, investing and financing activities for the years indicated:
Net Cash Provided By Operating Activities
Net cash provided by operating activities increased by $60.1 million, from $223.6 million during the year ended December 31, 2017 to $283.7 million during the year ended December 31, 2018. The increase was attributable to an increase in total revenues (revenues and net pool allocation) of $103.7 million, partially offset by a decrease of $23.5 million caused by movements in working capital accounts, an increase of $15.3 million in cash paid for interest including the interest paid for finance leases and a net decrease of $4.8 million from the remaining movements.
Net Cash Used In Investing Activities
Net cash used in investing activities increased by $618.4 million, from $74.6 million during the year ended December 31, 2017 to $693.0 million during the year ended December 31, 2018. The increase is mainly attributable to an increase of $591.5 million in payments for the construction costs of newbuildings and other fixed assets and a net decrease in cash from short-term investments of $43.0 million in 2018 compared to 2017. The above movements were partially offset by $14.0 million in payments made for the investment in Gastrade made in 2017 and an increase of $2.1 million in cash from interest income.
Net Cash Provided By Financing Activities
Net cash provided by financing activities increased by $360.8 million, from $7.3 million during the year ended December 31, 2017 to $368.1 million during the year ended December 31, 2018. The increase is mainly attributable to an increase of $244.2 million in proceeds from our borrowings, a decrease in bank loan and bond repayments of $165.3 million, an increase of $69.2 million in proceeds from the issuance of the Partnership’s Series B and Series C Preference Units in 2018 as compared to the issuance of 5,750,000 of its 8.625% Series A Cumulative Redeemable Perpetual Fixed to Floating Rate Preference Units (the ‘‘Partnership’s Series A Preference Units’’) in 2017 and an increase of
$20.6 million from payments during 2017 for CCS termination. The above movements were partially offset by a decrease of $81.1 million in proceeds from GasLog Partners’ common unit offerings and an increase of $57.0 million in dividend payments.

                                          |          | Year ended December 31, |
----------------------------------------- | -------- | ----------------------- | ---------
                                          | 2017     | 2018                    | Change
Amounts in thousands of U.S. dollars      |          |                         |
Net cash provided by operating activities | $223,630 | $283,710                | $60,080
Net cash used in investing activities     | (74,599) | (692,999)               | (618,400)
Net cash provided by financing activities | 7,265    | 368,120                 | 360,855

December 2017 2018
 table summarizes net cash flows operating investing financing
 Cash
 increased $60. 1 million $223. 6 million to $283. 7 million 2018. revenues $103. 7 million offset $23. 5 million working capital increase $15. 3 million cash interest decrease $4. 8 million.
 Cash Investing
 increased $618. 4 million from $74. 6 million to $693. 0 million 2018. $591. 5 million construction decrease cash short-term investments $43. 0 million 2018. offset by $14. 0 million payments investment Gastrade 2017 increase $2. 1 million interest income.
 Cash Financing Activities
 increased $360. 8 million from $7. 3 million to $368. 1 million 2018. $244. 2 million proceeds borrowings decrease bank loan bond repayments $165. 3 million increase $69. 2 million Partnership’s Series B C Preference Units 2018.625% Series A Redeemable Preference Units 2017 increase
 $20. 6 million CCS termination. offset decrease $81. 1 million GasLog increase $57. million dividend payments.
 Year December 31,
 2017 2018
. dollars
 cash operating activities $223,630 $283,710 $60,080
 investing (74,599) (692,999 (618,400)
 financing 7,265,120 360,855


As of June 30, 2018, the Group’s investments consisted of the following:
As of June 30, 2018, the Group had $323.1 million of investments which were classified as short-term investments on the Group’s consolidated statements of financial position. Additionally, the Group had certificates of deposit and time deposits totaling $3.6 million which were classified as long-term and were included in other non- current assets on the Group’s consolidated statements of financial position.

                                          | Amortized Cost | Unrealized Gains      | Unrealized Losses | Fair Value
----------------------------------------- | -------------- | --------------------- | ----------------- | ----------
                                          |                | (U.S. $ in thousands) |                   |
Debt Investments                          |                |                       |                   |
U.S. treasury securities                  | $52,809        | $—                    | $(109)            | $52,700
Agency securities                         | 22,097         | —                     | (82)              | 22,015
Certificates of deposit and time deposits | 58,824         | —                     | —                 | 58,824
Commercial paper                          | 35,372         | —                     | —                 | 35,372
Corporate debt securities                 | 158,538        | 14                    | (669)             | 157,883
Total investments                         | $327,640       | $14                   | $(860)            | $326,794

June 30, 2018 Group’s investments
 had $323. 1 million investments short-term. certificates of deposit time deposits totaling $3. 6 million long-term non- current assets.
 Amortized Cost Unrealized Gains Losses Fair Value
. $ thousands
 Debt Investments
. treasury securities  $52,809
 Agency securities  22,097
 Certificates of deposit time deposits  58,824
 Commercial paper 35,372
 Corporate debt securities  158,538
 Total investments  $327,640  $326,794


Strategic Investments
In December 2019, the Company made a minority investment in a privately-held company, Talespin, Inc., for $8.0 million, representing approximately 13% equity ownership. The investment is accounted for using the equity method of accounting due to the Company’s ability to exercise significant influence.
The Company’s non-marketable investments are composed of the following (in thousands):

                                                             | December 31, |
------------------------------------------------------------ | ------------ | ------
                                                             | 2019         | 2018
Accounted for at cost, adjusted for observable price changes | $1,750       | $1,250
Accounted for using the equity method                        | 8,000        | —
Total non-marketable investments                             | $9,750       | $1,250

Strategic Investments
 December 2019 minority investment Talespin. $8. 0 million 13% equity ownership. accounted equity.
 non-marketable investments
 December
 2019 2018
 Accounted cost adjusted price changes $1,750 $1
 equity method
 Total non-marketable investments $9,750 $1,250


Other Contractual Obligations
Our other contractual obligations include finance lease obligations (including interest portion), facility leases, leases of certain computer and other equipment, agreements to purchase data and telecommunication services, the payment of principal and interest on debt and pension fund obligations.
At December 31, 2019, the minimum annual payments under these agreements and other contracts that had initial or remaining non-cancelable terms in excess of one year are as listed in the following table. Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax positions at December 31, 2019, we are unable to make reasonably reliable estimates of the timing of any potential cash settlements with the respective taxing authorities. Therefore, $189 million in uncertain tax positions (which includes interest and penalties of $25 million) have been excluded from the contractual obligations table below. See Note 15 – “Income Taxes” – to the consolidated financial statements for a discussion on income taxes.
(a) Our short-term and long-term debt obligations are described in Note 12 – “Long-Term Debt and Other Financing Arrangements” and our short-term and long-term finance lease obligations are described in Note 5 “Leases”,– to our consolidated financial statements.
(b) Our operating lease obligations are described in Note 17 – “Commitments and Contingencies” – to our consolidated financial statements.

                                             | Payments due by period |        |        |        |        |      |
-------------------------------------------- | ---------------------- | ------ | ------ | ------ | ------ | ---- | ----------
(IN MILLIONS)                                | Total                  | 2020   | 2021   | 2022   | 2023   | 2024 | Thereafter
Finance lease obligations(a)                 | $162                   | $61    | $42    | $29    | $15    | $7   | $8
Operating leases(b)                          | 574                    | 136    | 99     | 75     | 53     | 40   | 171
Other contractual obligations(c)             | 1,639                  | 627    | 295    | 203    | 190    | 185  | 139
Long-term debt, including current portion(a) | 8,164                  | 854    | 702    | 2,399  | 3,710  | —    | 499
Interest(d)                                  | 1,038                  | 354    | 315    | 216    | 115    | 25   | 13
Pension fund obligations(e)                  | 28                     | 28     | —      | —      | —      | —    | —
Total                                        | $11,605                | $2,060 | $1,453 | $2,922 | $4,083 | $257 | $830

Contractual Obligations
 include finance lease facility leases computer equipment data telecommunication services principal interest debt pension fund obligations.
 December 31, 2019 minimum annual payments agreements contracts non-cancelable. uncertainty future cash flows tax positions cash settlements taxing authorities. $189 million uncertain tax positions interest penalties $25 million excluded from obligations. Note 15 “Income Taxes”.
 short-term long-term debt obligations Note 12 finance lease obligations Note 5.
 operating lease obligations Note 17 “Commitments Contingencies”.
 Payments due by period
 MILLIONS) Total 2020 2021 2022 2023 2024
 Finance lease obligations $162  $61 $42 $29  $15  $7 $8
 Operating leases 574  136  99  75  53  40  171
obligations 1,639 627 295 203 185
 Long-term debt 8,164 854 702 2,399 3,710
 1,038 354 315 216 115
 Pension fund obligations 28
 $11,605 $2,060,453 $2,922 $4,083


Land, Property and Equipment
Land, property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, or for leasehold improvements, the shorter of the remaining lease term or the estimated useful life. The estimated useful lives for machinery and equipment range from 5 to 7 years and for office, computer and research equipment from2 to 5 years. Expenditures for major renewals and improvements that extend the useful life of property and equipment are capitalized.
Depreciation and amortization expense was $0.6 million and $0.8 million for fiscal years2019 and 2018, respectively. In accordance with ASC Topic 360, Property, Plant and Equipment (ASC 360), the Company assesses all of its long-lived assets, including intangibles, for impairment when impairment indicators are identified. If the carrying value of an asset exceeds its undiscounted cash flows, an impairment loss may be necessary. An impairment loss is calculated as the difference between the carrying value and the fair value of the asset.
The Company acquired 16 acres of land with an acquisition and sold4 acres in April 2015 for$264,000. The Company still owns 12 acres of land that remains on the market. The Company concluded that a sale transaction for the remaining land is not probable within the next year; therefore, unsold land is classified as held-and-used as of March 31, 2019 and 2018.
The components of fixed assets are as follows:

March 31,                                      |         |
---------------------------------------------- | ------- | -------
(in thousands)                                 | 2019    | 2018
Land                                           | $672    | $672
Machinery and equipment                        | 1,372   | 1,296
Office, computer and research equipment        | 5,267   | 5,175
Leasehold improvements                         | 798     | 1,238
Land, property and equipment, gross            | $8,109  | $8,381
Less accumulated depreciation and amortization | (6,811) | (6,780)
Land, property and equipment, net              | $1,298  | $1,601

Land Property Equipment
 stated cost net depreciation amortization. computed estimated useful lives leasehold lease term useful life. machinery equipment 5 to 7 years office computer research equipment to 5 years. renewals improvements life capitalized.
 Depreciation amortization expense $0. 6 million $0. 8 million 2018. assesses long-lived assets for impairment. carrying value exceeds undiscounted cash flows impairment loss. calculated difference carrying value fair value.
 acquired 16 acres sold4 acres 2015 for$264,000. owns 12 acres. sale unsold land classified held-and-used as March 31, 2019 2018.
 fixed assets
 Land $672
 Machinery equipment 1,372 1,296
 Office computer research equipment 5,267,175
 Leasehold improvements 798 1,238
 $8,109 $8,381
 Less accumulated depreciation amortization (6,811)
equipment $1,298,601


UK SIP
The weighted average market value per ordinary share for SIP awards released in 2019 was 386.1p (2018: 372.0p). The SIP shares outstanding at 31 March 2018 have fully vested (2018: had a weighted average remaining vesting period of 0.1 years). Shares released prior to the vesting date relate to those attributable to good leavers as defined by the scheme rules.

                                   | 2019      | 2018
---------------------------------- | --------- | --------
                                   | Number    | Number
Outstanding at 1 April             | 690,791   | 776,045
Dividend shares awarded            | 4,518     | 9,778
Forfeited                          | (9,275)   | (75,986)
Released                           | (365,162) | (19,046)
Outstanding at 31 March            | 320,872   | 690,791
Vested and outstanding at 31 March | 320,872   | –

 average market value share 2019 386. (2018 372. shares 31 March 2018 vested vesting period. Shares vesting good leavers scheme rules.
 Outstanding 1 April,791 776,045
 Dividend shares awarded 4,518 9,778
 Forfeited (9,275) (75,986)
 Released (365,162) (19
 31 March 320,872
 Vested 31


Assets Measured at Fair Value on a Recurring Basis
Assets measured at fair value on a recurring basis at March 31, 2018 are as follows (amounts in millions):
There were no transfers between Level 1 or Level 2 during fiscal 2019 or fiscal 2018. There were no assets measured on a recurring basis during fiscal 2019 or fiscal 2018 using significant unobservable inputs (Level 3).

                                    | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Total Balance
----------------------------------- | ------------------------------------------------------------------- | --------------------------------------------- | -------------
Assets                              |                                                                     |                                               |
Cash and cash equivalents:          |                                                                     |                                               |
Money market mutual funds           | $121.0                                                              | $—                                            | $121.0
Deposit accounts                    | —                                                                   | 641.6                                         | 641.6
Commercial Paper                    | —                                                                   | 118.7                                         | 118.7
Government agency bonds             | —                                                                   | 20.0                                          | 20.0
Short-term investments:             |                                                                     |                                               |
Marketable equity securities        | 2.8                                                                 | —                                             | 2.8
Corporate bonds and debt            | —                                                                   | 542.9                                         | 542.9
Time deposits                       | —                                                                   | 11.5                                          | 11.5
Government agency bonds             | —                                                                   | 723.2                                         | 723.2
Municipal bonds - taxable           | —                                                                   | 14.9                                          | 14.9
Total assets measured at fair value | $123.8                                                              | $2,072.8                                      | $2,196.6

Assets Measured Fair Value Recurring
 March 31, 2018
 no transfers Level 1 2 2019 2018. unobservable inputs.
 Quoted Prices Active Markets Identical Instruments 1) Observable Inputs 2) Total Balance
 Assets
 Cash equivalents
 Money market mutual funds $121.
 Deposit accounts 641.
 Commercial Paper 118.
 Government agency bonds 20.
 Short-term investments
 Marketable equity securities 2.
 Corporate bonds debt 542.
 Time deposits 11.
 Government agency bonds 723.
 Municipal bonds taxable 14.
 Total assets measured fair value $123. 8 $2,072. $2,196.


Item 2. Properties
Our corporate headquarters are located in Culver City, California, where we occupy facilities totaling approximately 8,000 square feet on a monthto-month basis pursuant to a Shared Services Agreement with NantWorks. We use these facilities for administration, sales and marketing, research and development, engineering, client support, and professional services. In addition, we have 5 U.S. locations across four states and one international location. Our key facilities include the following:
United States
Boston, Massachusetts
Panama City, Florida
Philadelphia, Pennsylvania
Phoenix, Arizona
International
◦ Belfast, Northern Ireland
Note that on February 3, 2020, the Company completed the sale of its Connected Care business which includes the Panama City, Florida property.
We believe that our facilities are adequate to meet our needs in the near term, and that, if needed, suitable additional space will be available to accommodate any expansion of our operations.
The following table outlines our facilities location, square footage, and use:

City         | State | Country | Sq ft   | Type  | Business Nature/Use
------------ | ----- | ------- | ------- | ----- | ------------------------------------------------------------------------------
Boston       | MA    | USA     | 31,752  | Lease | Administrative, sales, client support, R&D, engineering, professional services
Panama City  | FL    | USA     | 51,288  | Lease | Administrative, sales, client support, R&D, engineering, professional services
Belfast      | NI    | UK      | 15,500  | Lease | R&D, engineering, administrative
Phoenix      | AZ    | USA     | 4,865   | Lease | Data Centre
Philadelphia | PA    | USA     | 14,183  | Lease | Administrative, sales, client support, R&D, engineering, professional services
             |       |         | 117,588 |       |

. Properties
 corporate headquarters Culver City California occupy facilities 8,000 square feet-month Shared Services Agreement with NantWorks. facilities for administration sales marketing research development engineering client support professional services. 5 U. S. locations four states one international location. facilities include
 Boston Massachusetts
 Panama City Florida
 Philadelphia Pennsylvania
 Phoenix Arizona
 Belfast Northern Ireland
 February 3, 2020 Connected Care business Panama City Florida property.
 facilities adequate additional space available expansion.
 table outlines facilities location square footage use
 State Country Sq ft Business
 Boston MA 31,752 Administrative sales&D
 Panama City FL 51,288
 Belfast 15,500
 Phoenix AZ 4,865
 Philadelphia PA 14,183
 117,588


Significant components of the Company’s deferred tax assets and liabilities are outlined below.
The increase in the Company's deferred tax liability is primarily attributable to the Company's decision to take bonus depreciation on qualifying assets placed in service during fiscal 2019.
Included in the deferred tax assets at October 31, 2019, is a federal NOL carryforward of $255.4 million. All of the NOL carryforward was incurred subsequent to the enactment of the TCJA and therefore has an indefinite carryforward period. The Company has significant deferred tax liabilities, primarily related to property, plant and equipment, which are expected to reverse and allow for the full utilization of the NOL carryforward. As such, the Company has not recorded a valuation allowance related to the NOL carryforward. Also included in the deferred tax assets are North Carolina Investing in Business Property Credit and North Carolina Jobs Credits totaling $4.9 million, as well as Georgia Job Tax Credits totaling $2.6 million. The North Carolina Investing in Business Property Credit provides a 7% investment tax credit for property located in a North Carolina development area, the North Carolina Creating Jobs Credit provides a tax credit for increased employment in North Carolina, and the Georgia Job Tax Credit provides a tax credit for creation and retention of qualifying jobs in Georgia. It is management’s opinion that the majority of the North Carolina and Georgia income tax credits will not be utilized before they expire, and a $5.6 million valuation allowance has been recorded as of October 31, 2019. The North Carolina credits began to expire during fiscal 2018, and the remaining credits expire between fiscal years 2020 and 2023.

October 31,                               |          |
----------------------------------------- | -------- | --------
                                          | 2019     | 2018
(In thousands)                            |          |
Deferred tax liabilities:                 |          |
Property, plant and equipment             | $148,505 | $88,351
Prepaid and other assets                  | 1,911    | 1,751
Total deferred tax liabilities            | 150,416  | 90,102
Deferred tax assets:                      |          |
Accrued expenses and accounts receivable  | 8,172    | 7,814
Inventory                                 | 1,155    | 2,862
Compensation on restricted stock          | 7,528    | 8,280
State income tax credits                  | 9,333    | 12,235
Other                                     | 1,272    | 654
Valuation allowance                       | (5,637)  | (11,017)
Net operating loss                        | 54,461   | 6,481
Total deferred tax assets                 | 76,284   | 27,309
Net deferred tax liabilities              | $74,132  | $62,793

Company’s deferred tax assets liabilities outlined.
 increase tax liability attributable bonus depreciation on assets 2019.
 deferred tax federal NOL carryforward $255. 4 million. incurred TCJA indefinite carryforward period. deferred tax liabilities related to property plant equipment expected reverse full utilization NOL carryforward. valuation allowance NOL carryforward. North Carolina Investing in Business Property Credit North Carolina Jobs Credits $4. 9 million Georgia Job Tax Credits $2. 6 million. 7% tax credit Job Tax. majority Georgia credits utilized before expire $5. 6 million valuation allowance recorded October 31, 2019. North Carolina credits fiscal 2018 remaining credits expire 2020 2023.
 Deferred tax liabilities
 Property plant equipment $148,505 $88,351
 Prepaid other assets 1,911
 Total deferred tax liabilities 150,416 90,102
 Deferred tax assets
expenses 8,172
 Inventory,155
 restricted stock 7,528,280
 tax credits 9,333 12,235
 1,272
 loss 54,461 6,481
 deferred tax 76,284 27,309
 liabilities $74,132,793


Notes: (1) TWDV – Tax written down value
(2) NBV – Net book value
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities, and when deferred income taxes relate to the same fiscal authority.

Company - 2018                       | Provisions | Others          | Total
------------------------------------ | ---------- | --------------- | -------
Deferred tax assets                  | S$ Mil     | S$ Mil          | S$ Mil
Balance as at 1 April 2017           | 0.3        | 2.8             | 3.1
Effects of adoption of SFRS(I) 15    | -          | (1.0)           | (1.0)
Balance as at 1 April 2017, restated | 0.3        | 1.8             | 2.1
Credited to income statement         | 0.2        | 9.0             | 9.2
Balance as at 31 March 2018          | 0.5        | 10.8            | 11.3
                                     |            | Accelerated tax |
Company - 2018                       |            | depreciation    | Total
Deferred tax liabilities             |            | S$ Mil          | S$ Mil
Balance as at 1 April 2017           |            | (285.3)         | (285.3)
Effects of adoption of SFRS(I) 1     |            | 10.2            | 10.2

Tax value
 NBV Net book value
 Deferred tax assets liabilities offset legally enforceable right set-off assets liabilities fiscal authority.
 2018
 Deferred tax assets
 Balance 1 April 2017. 3 2. 8 3.
 Effects SFRS(I) 15 (1.
 Balance 1 April 2017. 8 2.
 income statement. 9.
 Balance 31 March 2018. 5 10. 8 11.
 Accelerated tax
 Deferred tax liabilities S$ Mil
 Balance 1 April 2017 (285. 3).
 Effects adoption SFRS(I) 1 10.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share data)
NOTE 13 — Derivatives
Our earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates and interest rates. We selectively use derivative financial instruments including foreign currency forward contracts and interest rate swaps to manage our exposure to these risks.
The use of derivative financial instruments exposes the Company to credit risk, which relates to the risk of nonperformance by a counterparty to the derivative contracts. We manage our credit risk by entering into derivative contracts with only highly rated financial institutions and by using netting agreements.
The effective portion of derivative gains and losses are recorded in accumulated other comprehensive loss until the hedged transaction affects earnings upon settlement, at which time they are reclassified to cost of goods sold or net sales. If it is probable that an anticipated hedged transaction will not occur by the end of the originally specified time period, we reclassify the gains or losses related to that hedge from accumulated other comprehensive loss to other income (expense).
We assess hedge effectiveness qualitatively by verifying that the critical terms of the hedging instrument and the forecasted transaction continue to match, and that there have been no adverse developments that have increased the risk that the counterparty will default. No recognition of ineffectiveness was recorded in our Consolidated Statement of Earnings for the twelve months ended December 31, 2019.
Foreign Currency Hedges
We use forward contracts to mitigate currency risk related to a portion of our forecasted foreign currency revenues and costs. The currency forward contracts are designed as cash flow hedges and are recorded in the Consolidated Balance Sheets at fair value.
We continue to monitor the Company’s overall currency exposure and may elect to add cash flow hedges in the future. At December 31, 2019, we had a net unrealized gain of $655 in accumulated other comprehensive loss, of which $595 is expected to be reclassified to income within the next 12 months. The notional amount of foreign currency forward contracts outstanding was $8,011 at December 31, 2019.
Interest Rate Swaps
We use interest rate swaps to convert a portion of our revolving credit facility's outstanding balance from a variable rate of interest to a fixed rate. As of December 31, 2019, we have 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 will be recognized as an adjustment to interest expense when settled.
These swaps are treated as cash flow hedges and consequently, the changes in fair value are recorded in other comprehensive loss. The estimated net amount of the existing gains or losses that are reported in accumulated other comprehensive loss that are expected to be reclassified into earnings within the next twelve months is approximately $82.
The location and fair values of derivative instruments designated as hedging instruments in the Consolidated Balance Sheets as of December 31, 2019, are shown in the following table:
The Company has elected to net its foreign currency derivative assets and liabilities in the balance sheet in accordance with ASC 210-20 (Balance Sheet, Offsetting). On a gross basis, there were foreign currency derivative assets of $648 and foreign currency derivative liabilities of $68 at December 31, 2019.

                                                            | As of December 31, |
----------------------------------------------------------- | ------------------ | ----
                                                            | 2019               | 2018
Interest rate swaps reported in Other current assets        | $82                | $576
Interest rate swaps reported in Other assets                | $—                 | $369
Interest rate swaps reported in Other long-term obligations | $(78)              | $—
Foreign currency hedges reported in Other current assets    | $580               | $393

NOTES FINANCIAL STATEMENTS share data
 NOTE 13 Derivatives
 earnings cash flows foreign currency rates interest rates. use derivative instruments forward contracts interest rate swaps manage.
 exposes credit risk nonperformance. manage credit risk contracts rated institutions netting agreements.
 derivative gains losses recorded in loss until transaction earnings settlement reclassified cost goods sold net sales. transaction reclassify gains losses income.
 assess hedge effectiveness terms transaction match no adverse developments risk. No ineffectiveness Consolidated Statement Earnings twelve months December 31, 2019.
 Foreign Currency Hedges
 contracts mitigate currency risk revenues. cash flow hedges recorded Consolidated Balance Sheets fair value.
 monitor currency exposure may add cash flow hedges. December 31, 2019 net unrealized gain $655 loss $595 expected reclassified income 12 months. foreign currency forward contracts outstanding $8,011 December 31, 2019.
 Interest Rate Swaps
use interest rate swaps convert revolving credit facility balance from variable to fixed. December agreements to fix interest rates on $50,000 long-term debt through February 2024. difference recognized as adjustment interest expense settled.
 swaps cash flow hedges changes in fair value recorded in comprehensive loss. estimated net gains losses earnings approximately $82.
 location fair values of derivative instruments hedging instruments in Consolidated Balance Sheets shown in table
 Company foreign currency assets liabilities balance sheet ASC 210-20. assets $648 liabilities $68 at December 31, 2019.
 rate swaps current assets $82 $576
 $369
-term obligations
 currency hedges assets $580 $393


Deferred Tax Assets and Liabilities
Significant components of the deferred tax assets and liabilities are summarized below (in thousands):
Based on the Company’s historical operating income, projection of future taxable income, scheduled reversal of taxable temporary differences, and tax planning strategies, management believes that it is more likely than not that the Company will realize the benefit of its deferred tax assets, net of valuation allowances recorded. The net increase in the total valuation allowance for the fiscal year ended August 31, 2019 is primarily related to the increase of a net operating loss carry forward due to a release of a non-U.S. unrecognized tax benefit and the increase of deferred tax assets in sites with existing valuation allowances. The decrease in domestic federal and state tax credits is primarily related to the utilization of tax credits against the one-time transition tax.
As of August 31, 2019, the Company intends to indefinitely reinvest the remaining earnings from its foreign subsidiaries for which a deferred tax liability has not already been recorded. The accumulated earnings are the most significant component of the basis difference which is indefinitely reinvested. As of August 31, 2019, the indefinitely reinvested earnings in foreign subsidiaries upon which taxes had not been provided were approximately $1.9 billion. The estimated amount of the unrecognized deferred tax liability on these reinvested earnings was approximately $0.2 billion.

                                                                                | Fiscal Year Ended August 31, |
---------------------------------------------------------------------------------------------- | ---------------------------- | ---------
                                                                                | 2019                         | 2018
Deferred tax assets:                                                                           |                              |
Net operating loss carry forward                                                               | $183,297                     | $119,259
Receivables                                                                                | 6,165                        | 7,111
Inventories                                                                                | 9,590                        | 7,634
Compensated absences                                                                           | 10,401                       | 8,266
Accrued expenses                                                                               | 81,731                       | 81,912
Property, plant and equipment, principally due to differences in depreciation and amortization | 66,268                       | 97,420
Domestic federal and state tax credits                                                         | 42,464                       | 70,153
Foreign jurisdiction tax credits                                                               | 15,345                       | 25,887
Equity compensation–Domestic                                                                   | 7,617                        | 7,566
Equity compensation–Foreign                                                                    | 2,179                        | 2,401
Domestic federal interest carry forward                                                        | 5,853                        | —
Cash flow hedges                                                                               | 9,878                        | —
Unrecognized capital loss carry forward                                                        | 7,799                        | —
Revenue recognition                                                                            | 19,195                       | —
Other                                                                                | 21,907                       | 18,176
Total deferred tax assets before valuation allowances                                          | 489,689                      | 445,785
Less valuation allowances                                                                      | (287,604)                    | (223,487)
Net deferred tax assets                                                                        | $202,085                     | $222,298
Deferred tax liabilities:                                                                      |                              |
Unremitted earnings of foreign subsidiaries                                                    | 75,387                       | 74,654
Intangible assets                                                                              | 39,242                       | 39,122
Other                                                                                | 4,447                        | 4,655
Total deferred tax liabilities                                                                 | $119,076                     | $118,431
Net deferred tax assets                                                                        | $83,009                      | $103,867

Deferred Tax Assets Liabilities
 summarized
 income future tax planning strategies believes benefit deferred tax assets. increase valuation allowance fiscal year August 2019 related to net operating loss non-U. S. unrecognized tax benefit increase deferred tax assets. decrease state tax credits one-time transition tax.
 Company intends reinvest remaining earnings foreign subsidiaries deferred tax liability. accumulated earnings basis difference. August reinvested earnings approximately $1. 9 billion. estimated unrecognized deferred tax liability approximately $0. 2 billion.
 Fiscal Year Ended August 31,
 Deferred tax assets
 Net operating loss $183,297 $119,259
 Receivables 6,165
 Inventories 9,590
 Compensated absences 10,401
 Accrued expenses 81,731
 Property plant equipment due differences depreciation amortization 66,268 97,420
tax credits 42,464 70,153
 15,345 25,887
 2,179
 interest
 Cash hedges 9,878
 Unrecognized capital loss 7,799
 Revenue 19,195
 21,907 18
 deferred tax assets,689 445,785
 (287,604) (223,487)
 $202,085 $222,298
 Unremitted earnings foreign subsidiaries 75,387
 Intangible assets 39,242
 deferred tax liabilities $119,076,431
 $83,009 $103,867


A. Selected Financial Data The table set forth below presents our selected historical consolidated financial data for the periods and at the dates indicated. The selected historical consolidated statements of income data for each of the three years ended March 31, 2019, 2018, and 2017 and the selected statements of financial position data as of March 31, 2019 and 2018 have been derived from and should be read in conjunction with “Part I — Item 5.
Operating and Financial Review and Prospects” and our consolidated financial statements included elsewhere in this Annual Report on Form 20-F. The selected historical consolidated statements of income data for each of the two years ended March 31, 2016 and 2015 and the selected historical statements of financial position data as of March 31, 2017, 2016, and 2015 have been derived from audited consolidated financial statements not included in this Annual Report on Form 20-F.
(1) References to “net income” in this document correspond to “profit/(loss) for the period” or “profit/(loss) for the year” line items in our consolidated financial statement appearing elsewhere in this document. (2) Gross Revenue is defined as reported revenue adjusted in respect of significant financing component that arises on account of normal credit terms provided to catalogue customers.
(3) We use EBITDA, Adjusted EBITDA and Gross Adjusted EBITDA as supplemental financial measures. EBITDA is defined by us as net income before interest expense, income tax expense and depreciation and amortization (excluding amortization of capitalized film content and debt issuance costs).
Adjusted EBITDA is defined as EBITDA adjusted for (gain)/impairment of available-for-sale financial assets, profit/loss on held for trading liabilities (including profit/loss on derivative financial instruments), transactions costs relating to equity transactions, share based payments, Loss / (Gain) on sale of property and equipment, Loss on de-recognition of financial assets measured at amortized cost, net,
Credit impairment loss, net, Loss on financial liability (convertible notes) measured at fair value through profit and loss, Loss on deconsolidation of a subsidiary and exceptional items such as impairment of goodwill, trademark, film & content rights and content advances.
Gross Adjusted EBITDA is defined as Adjusted EBITDA adjusted for amortization of intangible films and content rights. EBITDA, Adjusted EBITDA and Gross Adjusted EBITDA as used and defined by us, may not be comparable to similarly-titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP.
EBITDA Adjusted EBITDA and Gross Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. EBITDA, Adjusted EBITDA and Gross Adjusted EBITDA provide no information regarding a Company’s capital structure, borrowings, interest costs, capital expenditures and working capital movement or tax position.

                                           |            |           | Year ended March 31,                             |           |
------------------------------------------ | ---------- | --------- | ------------------------------------------------ | --------- | ---------
                                           | 2019       | 2018      | 2017                                             | 2016      | 2015
                                           |            |           | (in thousands, except (Loss)/Earnings per share) |           |
Selected Statement of Income Data          |            |           |                                                  |           |
Revenue                                    | $270,126   | $261,253  | $252,994                                         | $274,428  | $284,175
Cost of sales                              | (155,396)  | (134,708) | (164,240)                                        | (172,764) | (155,777)
Gross profit                               | 114,730    | 126,545   | 88,754                                           | 101,664   | 128,398
Administrative costs                       | (87,134)   | (68,029)  | (63,309)                                         | (64,019)  | (49,546)
Operating profit before exceptional item   | 27,596     | 58,516    | 25,445                                           | 37,645    | 78,852
Impairment loss                            | (423,335)  | —         | —                                                | —         | —
Operating profit/(loss)                    | (395,739)  | 58,516    | 25,445                                           | 37,645    | 78,852
Net finance costs                          | (7,674)    | (17,813)  | (17,156)                                         | (8,010)   | (5,861)
Other gains/(losses), net                  | 288        | (41,321)  | 14,205                                           | (3,636)   | (10,483)
Profit/(loss) before tax                   | (403,125)  | (618)     | 22,494                                           | 25,999    | 62,508
Income tax                                 | (7,328)    | (9,127)   | (11,039)                                         | (12,711)  | (13,178)
Profit/(loss) for the year (1)             | $(410,453) | $(9,745)  | $11,455                                          | $13,288   | $49,330
(Loss)/Earnings per share (cents)          |            |           |                                                  |           |
Basic (loss)/earnings per share            | (599.5)    | (36.3)    | 6.4                                              | 6.6       | 74.3
Diluted (loss)/earnings per share          | (599.5)    | (36.3)    | 5.1                                              | 5.2       | 72.4
Weighted average number of ordinary shares |            |           |                                                  |           |
Basic                                      | 70,707     | 62,151    | 59,410                                           | 57,732    | 54,278
Diluted                                    | 72,170     | 63,482    | 60,943                                           | 59,036    | 54,969
Other non-GAAP measures                    |            |           |                                                  |           |
Gross Revenue (2)                          | $304,593   | $268,069  | $252,994                                         | $274,428  | $284,175
EBITDA (3)                                 | $(393,188) | $20,186   | $42,548                                          | $36,294   | $70,066
Adjusted EBITDA (3)                        | $103,845   | $82,955   | $55,664                                          | $70,852   | $101,150
Gross Adjusted EBITDA (3)                  | $234,000   | $198,240  | $190,980                                         | $199,155  | $218,404

. Selected Financial Data table presents historical consolidated financial data periods dates. statements income three years March 31, 2019 2018 2017 financial position derived from “Part I — Item 5.
 Operating Financial Review Prospects” consolidated financial statements Annual Report Form 20-F. income two years March 31, 2016 2015 financial position March 2017 derived from financial statements not 20-F.
 References “net correspond “profit/(loss). Gross Revenue adjusted financing normal credit terms customers.
 EBITDA Adjusted EBITDA supplemental financial measures. EBITDA net income before interest expense tax expense depreciation amortization debt issuance costs.
 Adjusted EBITDA adjusted for-sale financial assets profit/loss trading liabilities costs equity transactions share based payments Loss sale property equipment Loss de-recognition financial assets amortized cost
Credit impairment loss financial liability notes profit deconsolidation subsidiary exceptional items impairment goodwill trademark film content rights advances.
 Gross Adjusted EBITDA amortization films content rights. not comparable not performance GAAP.
 operating net income cash flows. provide no information capital structure borrowings interest costs capital expenditures working capital movement tax position.
 Year ended March 31,
 2019 2018 2017 2016 2015
/Earnings per share
 Income
 Revenue $270,126  $261,253  $252,994  $274,428 $284,175
 Cost sales (155,396) (134,708) (164,240),764
 Gross profit 114,730 126,545 88,754 101,664 128,398
 Administrative costs (87,134) (68,029) (63,309) (64,019) (49,546)
profit item 27,596 58,516 25,445 37,645 78,852
 Impairment loss (423,335)
,739 58,516 25,445 37,645
 Net finance costs (7,674) (17,813) (17,156
 gains 288 (41,321 14,205 (3,636 (10,483
 before tax (403,125 22,494 25,999 62,508
 Income tax (7,328) (9,127 (11,039) (12,711),178
 year $(410,453(9,745 $11,455 $13,288 $49,330
 per share
.
.
 average ordinary shares
 70,707 62,151 59,410 57,732 54,278
 72,170 63,482 60,943 59,036 54,969
 non-GAAP measures
Revenue $304,593 $268,069 $252,994 $274,428,175
 EBITDA,188 $20,548
 $103,845 $82,955 $55,664
 EBITDA $234,000 $198,240 $190,980 $218,404


Management Discussion and Analysis
Cash Flow
"nm" denotes not meaningful
Note: (1) Refers to Singtel Group excluding Optus.
The Group’s free cash flow grew 1.2% to S$3.65 billion. The increase was driven by lower capital expenditure partly offset by lower operating cash flow, higher cash taxes and lower associates’ dividends.
Net cash inflow from operating activities declined 9.9% to S$5.37 billion. Dividends received from the associates fell 6.0% mainly from Telkomsel, the Southern Cross consortium and NetLink Trust.

Net cash inflow from operating activities declined 9.9% to S$5.37 billion. Dividends received from the associates fell 6.0% mainly from Telkomsel, the Southern Cross consortium and NetLink Trust.
The investing cash outflow was S$2.33 billion. During the year, Singtel received proceeds of S$118 million from the disposal of a property in Singapore. Payments of S$123 million were made for the acquisition of Videology assets in August 2018 and S$344 million for the acquisition of a 5.7% equity interest in Airtel Africa in October 2018. Capital expenditure totalled S$1.72 billion, comprising S$587 million for Singtel and S$1.13 billion (A$1.14 billion) for Optus. In Singtel, major capital investments in the year included S$215 million for fixed and data infrastructure, S$183 million for mobile networks and S$189 million for ICT and other investments.  The investing cash outflow was S$2.33 billion. During the year, Singtel received proceeds of S$118 million from the disposal of a property in Singapore. Payments of S$123 million were made for the acquisition of Videology assets in August 2018 and S$344 million for the acquisition of a 5.7% equity interest in Airtel Africa in October 2018. Capital expenditure totalled S$1.72 billion, comprising S$587 million for Singtel and S$1.13 billion (A$1.14 billion) for Optus. In Singtel, major capital investments in the year included S$215 million for fixed and data infrastructure, S$183 million for mobile networks and S$189 million for ICT and other investments.
In Optus, capital investments in mobile networks amounted to A$633 million with the balance in fixed and other investments.

In Optus, capital investments in mobile networks amounted to A$633 million with the balance in fixed and other investments.
Net cash outflow for financing activities amounted to S$3.06 billion. Major cash outflows included net interest payments of S$385 million, and payments of S$1.75 billion for final dividends in respect of FY 2018 and S$1.11 billion for interim dividends in respect of FY 2019, partly offset by increase in net borrowings of S$222 million.

                                                              | Financial Year ended 31 March |              |
------------------------------------------------------------- | ----------------------------- | ------------ | ------
                                                              | 2019                          | 2018         | Change
                                                              | (S$ million)                  | (S$ million) | (%)
Net cash inﬂow from operating activities                      | 5,368                         | 5,955        | -9.9
Net cash outﬂow for investing activities                      | (2,329)                       | (1,951)      | 19.4
Net cash outﬂow for ﬁnancing activities                       | (3,056)                       | (4,009)      | -23.8
Net change in cash balance                                    | (16)                          | (5)          | 248.9
Exchange effects on cash balance                              | 4                             | (4)          | nm
Cash balance at beginning of year                             | 525                           | 534          | -1.7
Cash balance at end of year                                   | 513                           | 525          | -2.3
Singtel (1)                                                   | 1,242                         | 1,126        | 10.3
Optus                                                         | 1,006                         | 989          | 1.8
Associates (net dividends after withholding tax)              | 1,402                         | 1,492        | -6.0
Group free cash ﬂow                                           | 3,650                         | 3,606        | 1.2
Optus (in A$ million)                                         | 1,028                         | 947          | 8.5
Cash capital expenditure as a percentage of operating revenue | 10%                           | 14%          |

Management Discussion
 Cash Flow
 Singtel Group Optus.
 free cash flow grew. 2% S$3. 65 billion. lower capital expenditure cash flow higher taxes lower dividends.
 cash inflow declined. S$5. 37 billion. Dividends. 0% Telkomsel Southern Cross NetLink Trust.
 cash inflow declined. S$5. 37 billion. Dividends. 0% Telkomsel.
 investing cash outflow S$2. 33 billion. Singtel$118 million.$123 million Videology$344 million. 7% Airtel Africa. expenditure S$1. 72 billion$587 million Singtel. 13 billion. Optus. investments$215 million infrastructure$183 million mobile networks$189 million ICT investments. investing cash outflow S$2. 33 billion.$118 million.$123 million Videology$344 million. Airtel. expenditure S$1. 72 billion$587 million Singtel. 13 billion. Optus.Singtel capital investments$215 million fixed data infrastructure S$183 million mobile networks$189 million ICT investments.
 Optus investments mobile networks A$633 million.
.
 cash outflow financing S$3. billion. interest S$385 million S$1. 75 billion final dividends 2018. 11 billion interim dividends 2019 net borrowings S$222 million.
 Financial Year ended 31 March
$
 Net cash inflow operating activities 5,368,955.
 cash outflow investing activities (2,329) (1,951).
 financing (3,056) (4,009.
 change cash balance.
 Exchange effects cash balance
 beginning 525 534.
 end 513 525.
 Singtel 1,242  1,126.
 Optus 1,006.
 Associates dividends tax 1,402  1,492.
 Group free cash flow 3,650 3,606.
$ million 1,028 947.
capital operating revenue 10% 14%


Net periodic benefit cost — The components of the fiscal year net periodic benefit cost were as follows (in thousands):
Changes in presentation —As discussed in Note 1, Nature of Operations and Summary of Significant Accounting Policies, we adopted ASU 2017-07 during the first quarter of 2019 using the retrospective method, which changed the financial statement presentation of service costs and the other components of net periodic benefit cost. The service cost component continues to be included in operating income; however, the other components are now presented in a separate line below earnings from operations captioned “Other pension and post-retirement expenses, net” in our consolidated statements of earnings. Further, in connection with the adoption, plan administrative expenses historically presented as a component of service cost are now presented as a component of expected return on plan assets. The prior year components of net periodic benefit costs and assumptions on the long-term rate of return on assets have been recast to conform to current year presentation.
Prior service costs are amortized on a straight-line basis from date of participation to full eligibility. Unrecognized gains or losses are amortized using the “corridor approach” under which the net gain or loss in excess of 10% of the greater of the PBO or the market-related value of the assets, if applicable, is amortized. For our Qualified Plan, actuarial losses are amortized over the average future expected lifetime of all participants expected to receive benefits. For our SERP, actuarial losses are amortized over the expected remaining future lifetime for inactive participants, and for our postretirement health plans, actuarial losses are amortized over the expected remaining future lifetime of inactive participants expected to receive benefits.

                                                | 2019     | 2018     | 2017
----------------------------------------------- | -------- | -------- | --------
Qualified Plan:                                 |          |          |
Interest cost                                   | $19,825  | $19,463  | $19,889
Expected return on plan assets                  | (26,334) | (26,467) | (26,811)
Actuarial loss                                  | 2,754    | 3,331    | 4,455
Net periodic benefit credit                     | $(3,755) | $(3,673) | $(2,467)
SERP:                                           |          |          |
Service cost                                    | $—       | $490     | $855
Interest cost                                   | 3,080    | 2,894    | 2,850
Actuarial loss                                  | 1,207    | 1,538    | 1,659
Amortization of unrecognized prior service cost | 115      | 146      | 153
Net periodic benefit cost                       | $4,402   | $5,068   | $5,517
Postretirement health plans:                    |          |          |
Interest cost                                   | $997     | $955     | $1,003
Actuarial (gain) loss                           | (159)    | (27)     | 162
Net periodic benefit cost                       | $838     | $928     | $1,165

Net periodic benefit cost components fiscal year
 Changes presentation adopted ASU 2017-07 2019 method changed financial statement presentation service costs components. service cost operating income other components separate line below earnings “Other pension post-retirement expenses consolidated statements. plan administrative expenses service cost expected return on plan assets. prior year components long-term rate return current year presentation.
 service costs amortized straight-line participation to full eligibility. Unrecognized gains losses amortized “corridor approach” net gain loss 10% PBO market-related value assets amortized. Qualified Plan actuarial losses amortized future lifetime participants. SERP lifetime inactive participants postretirement health plans lifetime inactive participants.
 2019 2018 2017
 Qualified Plan
 Interest cost $19,825 $19,463,889
 Expected return on plan assets (26,334),467
 Actuarial loss 2,754 3,331 4,455
benefit credit,755,673,467
 Service cost
 Interest cost 2,894
 Actuarial loss 1,207 1,538
 Amortization service
 cost $4,402 $5,068 $5,517
 Postretirement health plans
 Interest cost $997 $955 $1,003
 Actuarial loss
 cost $838 $928 $1


Principal Accounting Fees and Services
The following table sets forth fees for services provided by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, ‘‘Deloitte’’) during fiscal 2019 and 2018:
(1) Represents fees for professional services provided in connection with the integrated audit of our annual financial statements and internal control over financial reporting and review of our quarterly financial statements, advice on accounting matters that arose during the audit and audit services provided in connection with other statutory or regulatory filings.
(2) Represents tax compliance and related services.
(3) Represents the annual subscription for access to the Deloitte Accounting Research Tool, which is a searchable on-line accounting database.

                   | 2019       | 2018
------------------ | ---------- | ----------
Audit fees (1)     | $3,454,348 | $3,589,147
Tax fees (2)       | 546,618    | 931,017
All other fees (3) | 1,895      | 1,895
Total              | $4,002,861 | $4,522,059

Accounting Fees Services
 table fees Deloitte & Touche LLP firms Tohmatsu affiliates 2019 2018:
 services audit financial statements control advice accounting statutory filings.
 tax compliance services.
 annual subscription Deloitte Accounting Research Tool searchable on-line accounting database.
 Audit fees $3,454,348 $3,589,147
 Tax fees (2) 546,618 931,017
 other fees (3) 1,895
 $4,002,861 $4,522,059


Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties associated with unrecognized tax benefits, for the periods presented is as follows (table in millions):
Of the net unrecognized tax benefits, including interest and penalties, $323 million and $296 million were included in income tax payable on the consolidated balance sheets as of January 31, 2020 and February 1, 2019, respectively. Approximately $313 million and $266 million, respectively, would, if recognized, benefit VMware's annual effective income tax rate. VMware includes interest expense and penalties related to income tax matters in the income tax provision. VMware had accrued $48 million and $56 million of interest and penalties associated with unrecognized tax benefits as of January 31, 2020 and February 1, 2019, respectively. Income tax expense during the year ended February 1, 2019 included interest and penalties associated with uncertain tax positions of $15 million. Interest and penalties associated with uncertain tax positions included in income tax expense (benefit) were not significant during the years ended January 31, 2020 and February 2, 2018.
The Dell-owned EMC consolidated group is routinely under audit by the IRS. All U.S. federal income tax matters have been concluded for years through 2015 while VMware was part of the Dell-owned EMC consolidated group. The IRS has started its examination of fiscal years 2015 through 2019 for the Dell consolidated group, which VMware was part of beginning fiscal 2017. In addition, VMware is under corporate income tax audits in various states and non-U.S. jurisdictions. Consistent with the Company’s historical practices under the tax sharing agreement with EMC, when VMware becomes subject to federal tax audits as a member of Dell’s consolidated group, the tax sharing agreement provides that Dell has authority to control the audit and represent Dell’s and VMware’s interests to the IRS.
Open tax years subject to examinations for larger non-U.S. jurisdictions vary beginning in 2008. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. When considering the outcomes and the timing of tax examinations, the expiration of statutes of limitations for specific jurisdictions, or the timing and result of ruling requests from taxing authorities, it is reasonably possible that total unrecognized tax benefits could be potentially reduced by approximately $17 million within the next 12 months.

                                                                |                  | For the Year Ended |
--------------------------------------------------------------- | ---------------- | ------------------ | ----------------
                                                                | January 31, 2020 | February 1, 2019   | February 2, 2018
Balance, beginning of the year                                  | $385             | $305               | $265
Tax positions related to current year:                          |                  |                    |
Additions                                                       | 116              | 57                 | 63
Tax positions related to prior years:                           |                  |                    |
Additions                                                       | 98               | 44                 | 2
Reductions                                                      | (7)              | (1)                | (2)
Settlements                                                     | (28)             | (4)                | (9)
Reductions resulting from a lapse of the statute of limitations | (83)             | (8)                | (24)
Foreign currency effects                                        | (2)              | (8)                | 10
Balance, end of the year                                        | $479             | $385               | $305

Unrecognized Tax Benefits
 reconciliation unrecognized tax benefits excluding interest penalties
 net unrecognized tax benefits $323 million $296 million income tax consolidated balance sheets January 31, 2020 February 1, 2019. $313 million $266 million benefit VMware's annual income tax rate. includes interest penalties. accrued $48 million $56 million interest penalties January 31, 2020 February 1, 2019. Income tax expense February 1, 2019 included interest penalties uncertain tax positions $15 million. Interest penalties not significant January 31, 2020 February 2, 2018.
 Dell-owned EMC consolidated group under audit IRS. federal income tax matters concluded 2015 VMware. IRS examination fiscal years 2015 2019 group 2017. under corporate income tax audits states non-U. S. jurisdictions. audit.
 Open tax years non-U. jurisdictions vary 2008. Audit outcomes timing settlements uncertainty.considering tax examinations expiration statutes limitations ruling requests unrecognized tax benefits $17 million 12 months.
 Year Ended
 January 31, 2020 February 1, 2019 2, 2018
 Balance $385 $305 $265
 positions current year
 Additions 116 57 63
 prior years
 Additions 98 44 2
 Reductions (7)
 Settlements (28) (4)
 Reductions lapse statute limitations (83)
 Foreign currency effects
 Balance end year $479 $385 $305


For the periods indicated, the weighted-average fair value of options and weighted-average assumptions were as follows:
*Options valued using Monte Carlo Valuation Method
As of June 30, 2019, the total compensation cost related to the unvested stock option awards not yet recognized was approximately $24.1 million, which will be recognized over a weighted-average period of approximately 3.0 years.
No cash was used by us to settle equity instruments granted under share-based compensation arrangements in any of the periods presented.
We have not capitalized any share-based compensation costs as part of the cost of an asset in any of the periods presented.
For the year ended June 30, 2019, cash in the amount of $35.6 million was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the year ended June 30, 2019 from the exercise of options eligible for a tax deduction was $2.9 million.
For the year ended June 30, 2018, cash in the amount of $54.4 million was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the year ended June 30, 2018 from the exercise of options eligible for a tax deduction was $1.5 million.
For the year ended June 30, 2017, cash in the amount of $20.8 million was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the year ended June 30, 2017 from the exercise of options eligible for a tax deduction was $2.2 million.

                                               |        | Year Ended June 30, |
---------------------------------------------- | ------ | ------------------- | ------
                                               | 2019   | 2018                | 2017
Weighted–average fair value of options granted | $8.39  | $7.58               | $7.06
Weighted-average assumptions used:             |        |                     |
Expected volatility                            | 25.72% | 26.95%              | 28.32%
Risk–free interest rate                        | 2.57%  | 2.18%               | 1.46%
Expected dividend yield                        | 1.54%  | 1.50%               | 1.43%
Expected life (in years)                       | 4.44   | 4.38                | 4.51
Forfeiture rate (based on historical rates)    | 6%     | 6%                  | 5%
Average exercise share price                   | $38.81 | $34.60              | $31.75
Derived service period (in years)*             | N/A    | N/A                 | 1.79

periods weighted-average fair value options assumptions
 *Options valued Monte Carlo Valuation Method
 June 30, 2019 total compensation cost unvested stock option awards approximately $24. 1 million recognized over 3. years.
 No cash used settle equity instruments share-based compensation arrangements periods.
 not capitalized share-based compensation costs.
 year ended June 30, 2019 cash $35. 6 million options share-based. tax benefit $2. 9 million.
 year June 30 2018 cash $54. 4 million options share-based. tax benefit $1. 5 million.
 year June 30 2017 cash $20. 8 million options share-based. tax benefit $2. 2 million.
 Weighted–average fair value options $8. 39 $7. 58 $7. 06
-average assumptions
 Expected volatility 25. 72% 26. 95% 28. 32%
 Risk–free interest rate 2. 57%. 18% 1. 46%
dividend yield. 54%. 50%. 43%
 life. 44. 38. 51
 Forfeiture 6%
 share price $38. 81 $34. 60. 75
 service period N.


The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (excluding interest and penalties):
Included in the balance of unrecognized tax benefits as of December 31, 2019 and 2018 are $2,495 and $220, respectively, of tax benefits that, if recognized would affect the effective tax rate.
The Company records interest and penalties on unrecognized tax benefits in its provision for income taxes. Accrued interest and penalties are included within the related liability for unrecognized tax benefit line on the consolidated balance sheets. During the years ended December 31, 2019 and 2018, the Company accrued interest of $114 and $0, respectively, and recorded liabilities for interest and penalties of $252 and $0, respectively.
After taking into consideration tax attributes, such as net operating loss carryforwards and interest, the Company’s unrecognized tax benefits represent a noncurrent reserve for uncertain tax positions of $864 and $220 as of December 31, 2019 and 2018, respectively.
The U.S. Internal Revenue Service completed exams on the Company's U.S. federal income tax returns for years 2012 - 2015. With few exceptions, the Company is no longer subject to state and local income tax examinations by tax authorities for years before 2015. The Company conducts business and files income tax returns in numerous states. Currently, one of the Company's state tax returns is under examination by a state as part of routine audits conducted in the ordinary course of business.
The future utilization of state net operating losses could potentially subject the Company to state examinations prior to the otherwise applicable statute of limitation. States vary in carryforward periods but generally extend up to 20 years or a period consistent with the federal limits under the Tax Cuts and Jobs Act.

                                                        | Years Ended December 31, |
------------------------------------------------------- | ------------------------ | --------
                                                        | 2019                     | 2018
Balance of unrecognized tax benefits as of January 1,   | $1,226                   | $37,240
Increases for positions taken in prior years            | 1,353                    | 657
Rate change                                             | (84)                     | —
Amount of decreases related to settlements              | —                        | (36,671)
Balance of unrecognized tax benefits as of December 31, | $2,495                   | $1,226

tabular reconciliation unrecognized tax benefits (excluding interest
 December 31, 2019 2018 $2,495 $220 effective tax rate.
 Company records interest penalties on benefits. interest penalties line consolidated balance sheets. December 31, 2019 2018 accrued interest $114 $0 recorded liabilities penalties $252 $0.
 unrecognized tax benefits represent noncurrent reserve for tax positions $864 $220 December 31, 2019 2018.
 U. Internal Revenue Service. income tax returns 2012 - 2015. no subject state income tax examinations before 2015. conducts business files tax returns states. under examination.
 future state net operating losses could subject state examinations. States carryforward periods extend to 20 years federal Tax Cuts and Jobs Act.
 December
 Balance unrecognized tax benefits January 1, $1,226 $37,240
 Increases positions prior years 1,353 657
 Rate change
settlements (36,671)
 tax benefits $2,495 $1,226


History and Development of the Company
Our legal and commercial name is United Microelectronics Corporation, commonly known as “UMC”. We were incorporated under the R.O.C. Company Law as a company limited by shares in May 1980 and our common shares were listed on the Taiwan Stock Exchange in 1985. Our principal executive office is located at No. 3 Li-Hsin Road II, Hsinchu Science Park, Hsinchu, Taiwan, Republic of China, and our telephone number is 886-3-578-2258.
Our Internet website address is www.umc.com. The information on our website does not form part of this annual report. Our ADSs have been listed on the NYSE under the symbol “UMC” since September 19, 2000. In 2019, we were ranked among the top 5% of companies for a fifth consecutive year in the Corporate Governance Evaluation conducted by the Taiwan Stock Exchange and Taipei Exchange. The assessment was conducted across over 1,400 public companies in Taiwan.
We are one of the world’s largest independent semiconductor foundries and a leader in semiconductor manufacturing process technologies. Our primary business is the manufacture, or “fabrication”, of semiconductors, sometimes called “chips” or “integrated circuits”, for others. Using our own proprietary processes and techniques, we make chips to the design specifications of our many customers. Our company maintains a diversified customer base across industries, including communication devices, consumer electronics, computer, and others, while continuing to focus on manufacturing for high growth, large volume applications, including networking, telecommunications, internet, multimedia, PCs and graphics.
We sell and market mainly wafers which in turn are used in a number of different applications by our customers. The following table presented the percentages of our wafer sales by application for the years ended December 31, 2017, 2018 and 2019.

              |       | Years Ended December 31, |
------------- | ----- | ------------------------ | -----
Application   | 2017  | 2018                     | 2019
              | %     | %                        | %
Communication | 48.6  | 45.2                     | 52.2
Consumer      | 29.4  | 28.6                     | 26.4
Computer      | 13.1  | 16.3                     | 13.6
Others        | 8.9   | 9.9                      | 7.8
Total         | 100.0 | 100.0                    | 100.0

History Development Company
 legal name United Microelectronics Corporation. incorporated R. O. C. Company Law limited shares May 1980 shares listed Taiwan Stock Exchange 1985. executive office No. 3 Li-Hsin Road Hsinchu Science Park Hsinchu Taiwan telephone number-578-2258.
 Internet website www. umc. com. annual report. ADSs listed NYSE “UMC” since September 19, 2000. 2019 ranked top 5% fifth year Corporate Governance Evaluation Taiwan Stock Exchange Taipei Exchange. 1,400 companies.
 largest independent semiconductor foundries leader semiconductor manufacturing. primary business manufacture semiconductors. proprietary processes chips design specifications customers. diversified customer base communication devices consumer electronics manufacturing high growth large volume applications networking telecommunications internet multimedia PCs.
 sell market wafers used applications. percentages wafer sales application years December 31, 2017 2018 2019.
.
 Consumer 29.
 Computer.16. 13. 6
 8. 9 9. 7.
 100. 100.


At 31 December 2019 trade receivables are shown net of a loss allowance totalling £6.1 million (2018: £4.0 million).
The Group does not use factoring to generate cash flow from trade receivables.
– other financial assets including loans to joint ventures
The Group applies the expected credit loss model in respect of other financial assets. Financial assets are individually assessed as to whether the credit risk has increased significantly in the period and therefore whether there is a need to apply the lifetime expected credit losses model as opposed to the 12-month expected credit loss model.
At 31 December 2019 there is no loss allowance recognised for other financial assets as it has been concluded as an immaterial risk of credit loss on other financial assets.
– cash deposits and derivative financial instruments
The credit risk relating to cash deposits and derivative financial instruments is actively managed by the Group’s treasury department. Relationships are maintained with a number of tier one institutional counterparties, ensuring compliance with Group policy relating to limits on the credit ratings of counterparties (between BBB+ and AAA).
Excessive credit risk concentration is avoided through adhering to authorised limits for all counterparties.

                                                                | Credit Rating | Authorised Limit | Group Exposure 31 December 2019 | Credit Rating | Authorised Limit | Group Exposure 31 December 2018
--------------------------------------------------------------- | ------------- | ---------------- | ------------------------------- | ------------- | ---------------- | -------------------------------
                                                                |               | £m               | £m                              |               | £m               | £m
Counterparty #1                                                 | AA-           | 125.0            | 64.9                            | AA-           | 125.0            | 111.9
Counterparty #2                                                 | AAA           | 150.0            | 43.1                            | A+            | 100.0            | 44.1
Counterparty #3                                                 | A+            | 100.0            | 38.7                            | A             | 100.0            | 27.2
Counterparty #4                                                 | A             | 100.0            | 26.0                            | AAA           | 150.0            | 22.3
Counterparty #5                                                 | A             | 75.0             | 20.0                            | AAA           | 150.0            | 12.3
Sum of five largest exposures                                   |               |                  | 192.7                           |               |                  | 217.8
Sum of cash deposits and derivative financial instrument assets |               |                  | 203.5                           |               |                  | 244.2
Five largest exposures as a percentage of assets at risk        |               |                  | 95%                             |               |                  | 89%

31 December 2019 trade receivables net loss allowance £6. 1 million (2018 £4. 0 million).
 Group use factoring cash flow.
 assets loans joint ventures
 applies expected credit loss model assets. assessed credit risk lifetime credit losses model 12-month.
 31 December 2019 no loss allowance other assets immaterial risk credit loss.
 cash deposits derivative financial instruments
 credit risk managed treasury department. Relationships maintained with one institutional counterparties compliance Group policy credit ratings BBB+ AAA.
 Excessive credit risk concentration avoided authorised limits counterparties.
 Credit Rating Authorised Limit Group Exposure 31 December 2019 2018
 Counterparty #1 125. 64. 111.
 Counterparty #2 150. 43. 44.
 Counterparty #3 100. 38. 27.
 Counterparty #4. 26. 150. 22.
Counterparty #5 75. 20. 150. 12.
 five exposures 192. 7 217. 8
 cash deposits financial assets 203. 5 244.
 exposures risk 95% 89%