BELL WIRELESS OPERATING METRICS
(1) Our Q1 2018 blended ABPU was adjusted to exclude the unfavourable retroactive impact of the CRTC decision on wireless domestic wholesale roaming rates of $14 million.
(2) At the beginning of Q1 2019, we adjusted our wireless subscriber base to remove 167,929 subscribers (72,231 postpaid and 95,698 prepaid) as follows: (A) 65,798 subscribers (19,195 postpaid and 46,603 prepaid), due to the completion of the shutdown of the CDMA network on April 30, 2019, (B) 49,095 prepaid subscribers as a result of a change to our deactivation policy, mainly from 120 days for Bell/Virgin Mobile and 150 days for Lucky Mobile to 90 days, (C) 43,670 postpaid subscribers relating to IoT due to the further refinement of our subscriber definition as a result of technology evolution, and (D) 9,366 postpaid fixed wireless Internet subscribers which were transferred to our retail high-speed Internet subscriber base.
(3) At the beginning of Q4 2018, we adjusted our postpaid wireless subscriber base to remove 20,000 subscribers that we divested to Xplornet as a result of BCE’s acquisition of MTS in 2017.
Blended ABPU of $68.32 increased by 0.8% in 2019, compared to 2018, driven by: • A greater mix of customers subscribing to higher-value monthly plans including unlimited data plans • The flow-through of rate increases • The favourable impact from the subscriber base adjustments performed in Q1 2019
These factors were partly offset by: • Lower data and voice overages driven by increased customer adoption of monthly plans with higher data allotments and richer voice plans • Lower ABPU generated from our long-term mobile services contract with Shared Services Canada (SSC) • The dilutive impact from the continued growth in prepaid customers driven by Lucky Mobile, our low-cost prepaid mobile service
Total gross wireless activations increased by 8.3% in 2019, compared to last year, due to higher prepaid gross activations, offset in part by lower postpaid gross activations. • Postpaid gross activations decreased by 2.9% in 2019, compared to 2018, mainly due to fewer year-over-year customer additions from our contract with SSC as the migration process is essentially complete. Excluding the impact of the SSC contract, postpaid gross activations were higher year over year, driven by our mobile network quality, strong sales execution and focus on subscriber base management. • Prepaid gross activations increased by 61.9% in 2019, compared to last year, driven by the continued growth from Lucky Mobile along with the benefit from the national retail distribution of Lucky Mobile and Virgin Mobile prepaid services at Dollarama stores
Blended wireless churn of 1.39% increased by 0.07 pts in 2019, compared to 2018. • Postpaid churn of 1.13% improved by 0.03 pts in 2019, compared to last year, driven by the favourable impact from our ongoing investments in customer retention and network speeds • Prepaid churn of 4.44% increased by 1.27 pts in 2019, compared to the prior year, due to greater competitive intensity in the discount mobile market and the impact from the harmonization of our prepaid deactivation policy across all Bell Wireless brands from 120 days for Bell and Virgin Mobile and 150 days for Lucky Mobile to 90 days
Net activations grew by 7.4% in 2019, compared to 2018, due to higher prepaid net activations, moderated by lower postpaid net activations. • Postpaid net activations decreased by 10.2% in 2019, compared to 2018, driven by lower gross activations • Prepaid net activations increased by 81,325 in 2019, compared to last year, due to higher gross activations, offset in part by greater customer deactivations
Wireless subscribers at December 31, 2019 totaled 9,957,962, an increase of 3.6% from 9,610,482 subscribers reported at the end of 2018. This was comprised of 9,159,940 postpaid subscribers and 798,022 prepaid subscribers, an increase of 3.7% and 2.3%, respectively, year over year. At the end of 2019, the proportion of Bell Wireless customers subscribing to our postpaid service was stable at 92%, compared to last year. At the beginning of Q1 2019, we adjusted our wireless subscriber base to remove 167,929 subscribers (72,231 postpaid and 95,698 prepaid) as follows: • 65,798 subscribers (19,195 postpaid and 46,603 prepaid), due to the completion of the shutdown of the CDMA network on April 30, 2019 • 49,095 prepaid subscribers as a result of a change to our deactivation policy, mainly from 120 days for Bell/Virgin Mobile and 150 days for Lucky Mobile to 90 days • 43,670 postpaid subscribers relating to IoT due to the further refinement of our subscriber definition as a result of the technology evolution • 9,366 postpaid fixed wireless Internet subscribers which were transferred to our retail high-speed Internet subscriber base

                                    | 2019      | 2018      | CHANGE   | % CHANGE
----------------------------------- | --------- | --------- | -------- | ----------
Blended ABPU ($/month) (1)          | 68.32     | 67.76     | 0.56     | 0.8%
Gross activations                   | 2,117,517 | 1,954,792 | 162,725  | 8.3%
Postpaid                            | 1,568,729 | 1,615,764 | (47,035) | (2.9%)
Prepaid                             | 548,788   | 339,028   | 209,760  | 61.9%
Net activations (losses)            | 515,409   | 479,811   | 35,598   | 7.4%
Postpaid                            | 401,955   | 447,682   | (45,727) | (10.2%)
Prepaid                             | 113,454   | 32,129    | 81,325   | 253.1%
Blended churn % (average per month) | 1.39%     | 1.32%     |          | (0.07) pts
Postpaid                            | 1.13%     | 1.16%     |          | 0.03 pts
Prepaid                             | 4.44%     | 3.17%     |          | (1.27) pts
Subscribers (2) (3)                 | 9,957,962 | 9,610,482 | 347,480  | 3.6%
Postpaid (2) (3)                    | 9,159,940 | 8,830,216 | 329,724  | 3.7%
Prepaid (2)                         | 798,022   | 780,266   | 17,756   | 2.3%

BELL WIRELESS
 Q1 2018 ABPU adjusted impact CRTC decision wireless roaming rates $14 million.
 Q1 2019 adjusted wireless subscriber base 167,929 subscribers (72,231 postpaid 95,698 prepaid 65,798 subscribers (19,195 postpaid 46,603 shutdown CDMA network April 30, 2019 49,095 prepaid subscribers deactivation policy 90 43,670 postpaid subscribers 9,366 postpaid wireless Internet subscribers transferred retail high-speed Internet subscriber base.
 Q4 2018 adjusted postpaid wireless subscriber base remove subscribers divested Xplornet acquisition MTS 2017.
 Blended ABPU $68. 32 increased 0. 8% 2019 higher-value monthly plans rate increases subscriber base adjustments
 offset Lower data voice overages increased Lower ABPU mobile contract Shared Services Canada impact prepaid customers Lucky Mobile
 wireless activations increased 8.2019 higher prepaid activations lower postpaid. Postpaid activations decreased 2. 9% fewer customer additions contract SSC migration. postpaid activations higher mobile network quality sales execution subscriber base management. Prepaid activations increased 61. 9% growth Lucky Mobile national retail distribution Virgin Mobile Dollarama
 wireless churn 1. 39% increased. 07 pts. Postpaid churn 1. 13% improved. pts investments customer retention network speeds Prepaid churn 4. 44% increased. 27 pts competitive intensity discount mobile prepaid deactivation policy
 Net activations grew 7. 4% 2019 higher prepaid activations lower postpaid activations. Postpaid activations decreased 10. 2% 2019 lower activations Prepaid activations increased 81,325 higher activations greater deactivations
 Wireless subscribers December 31, 2019 9,957,962 increase 3. 6%,482 2018. 9,159,940 postpaid 798,022 prepaid increase 3. 7% 2. 3% year over.2019 Bell Wireless postpaid stable 92% last. Q1 2019 adjusted wireless subscriber base 167,929 subscribers,231 postpaid 95,698 prepaid 65,798 subscribers (19,195 postpaid 46,603 shutdown CDMA network April 30 2019 49,095 prepaid subscribers deactivation policy 120 90 43,670 postpaid subscribers 9,366 postpaid subscribers transferred retail high-speed Internet base
 Blended ABPU ($/month) 68. 32 67. 76.
 activations 2,117,517 1,954,792 162,725. 3%
 Postpaid 1,568,729 1,615,764. 9%)
 Prepaid 548,788 339,028 209,760.
 Net activations 515,409 479,811 35,598. 4%
 Postpaid 401,955 447,682.
 113,454 32,129 81,325.
 Blended churn %. 39%. 32%.
. 16%.
Prepaid. 44%. 17%.
 Subscribers 9,957,962,482,480.
 Postpaid 9,159,940 8,830,216 329,724. 7%
 798,022,266 17,756.


Cost of Software License Cost of software license consists of the costs associated with software reproduction; media, packaging and delivery; documentation, and other related costs; and royalties on third-party software sold with or as part of our products. In 2019, cost of license decreased by $2.7 million, compared to 2018 principally due to a $1.7 million decrease in third-party software license fees and a $1.0 million decrease in royalty costs. In 2018, cost of software license decreased $0.2 million compared to 2017 principally due to the decrease in license revenue which resulted in lower royalty costs. Royalty costs decreased $2.1 million and were partially offset by a $1.7 million increase in third-party software license fees.
Cost of Cloud Subscriptions, Maintenance and Services Year 2019 compared with year 2018 Cost of cloud subscriptions, maintenance and services consists primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The $46.8 million increase in 2019 compared to 2018 was principally due to a $25.8 million increase in compensation and other personnelrelated expense resulting from increased headcount in cloud operations and professional services, a $9.4 million increase in performance-based compensation expense, and a $8.5 million increase in computer infrastructure costs related to cloud business transition. Year 2019 compared with year 2018 Cost of cloud subscriptions, maintenance and services consists primarily of salaries and other personnel-related expenses of employees dedicated to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The $46.8 million increase in 2019 compared to 2018 was principally due to a $25.8 million increase in compensation and other personnelrelated expense resulting from increased headcount in cloud operations and professional services, a $9.4 million increase in performance-based compensation expense, and a $8.5 million increase in computer infrastructure costs related to cloud business transition.
Year 2019 compared with year 2018
Cost of cloud subscriptions, maintenance and services consists primarily of salaries and other personnel-related expenses of
employees dedicated to cloud subscriptions; maintenance services; and professional and technical services as well as hosting fees. The
$46.8 million increase in 2019 compared to 2018 was principally due to a $25.8 million increase in compensation and other personnel related
expense resulting from increased headcount in cloud operations and professional services, a $9.4 million increase in
performance-based compensation expense, and a $8.5 million increase in computer infrastructure costs related to cloud business
transition.
Year 2018 compared with year 2017
The $27.5 million increase in 2018 compared to 2017 was principally due to an $11.6 million increase in performance-based
compensation expense, an $8.8 million increase in computer infrastructure cost related to cloud business transition, and a $7.0 million
increase in other compensation and other personnel-related expenses resulting from increased headcount in professional services.
Cost of Hardware
As discussed above, we adopted the new revenue recognition standard as of January 1, 2018. As a result, we now recognize our
hardware revenue net of related costs which reduces both hardware revenue and cost of sales as compared to our accounting prior to
2018. Had we presented the results for 2017 under ASC 606, cost of hardware would have been presented as zero as we would have
recognized our hardware revenue net of related costs. In 2019, cost of hardware decreased $3.5 million compared to 2018 on
decreased hardware sales, while in 2018, cost of hardware increased $3.7 million compared with 2017 on increased hardware sales

Year Ended December 31,                               |           |           |           |                         |
----------------------------------------------------- | --------- | --------- | --------- | ----------------------- | -----
                                                      |           |           |           | % Change vs. Prior Year |
                                                      | 2019      | 2018      | 2017      | 2019                    | 2018
(in thousands)                                        |           |           |           |                         |
Cost of software license                              | $ 2,626   | $ 5,297   | $ 5,483   | -50%                    | -3%
Cost of cloud subscriptions, maintenance and services | $282,341  | $235,584  | $208,045  | 20%                     | 13%
Cost of hardware                                      | -         | -         | $32,205   | N/A                     | -100%
Total cost of revenue                                 | $ 284,967 | $ 240,881 | $ 245,733 | 18%                     | -2%

Cost Software License reproduction media packaging delivery documentation royalties third-party software. 2019 decreased $2. 7 million 2018 due $1. 7 million decrease third-party fees $1. 0 million decrease royalty costs. 2018 decreased $0. 2 million 2017 license revenue lower royalty costs. Royalty costs decreased $2. 1 million offset by $1. 7 million increase third-party software license fees.
 Cost Cloud Subscriptions, Maintenance Services 2019 2018 salaries expenses maintenance services hosting fees. $46. 8 million increase 2019 due to $25. 8 million increase compensation increased headcount $9. 4 million performance-based compensation expense $8. 5 million increase computer infrastructure costs. salaries hosting fees. $46. 8 million increase 2019 due to $25. 8 million increase increased headcount $9. 4 million performance-based compensation expense $8. 5 million increase computer infrastructure costs.
 salaries expenses
 maintenance services hosting fees.
.8 million increase 2019 2018 due $25. million compensation
 increased headcount cloud operations $9. 4 million increase
 performance compensation $8. 5 million computer infrastructure costs cloud
 transition.
 2018
 $27. 5 million increase 2018 due $11. 6 million performance
 compensation $8. million computer infrastructure cost cloud $7. million
 increased headcount services.
 Cost Hardware
 adopted new revenue recognition standard January 1, 2018.
 hardware revenue net related costs reduces revenue cost sales
. results 2017 zero
. 2019 hardware decreased $3. 5 million 2018
 2018 increased $3. 7 million
 Year Ended December 31,
 Change. Year
 Cost software license $ 2,626  $ 5,297 -50% -3%
 Cost cloud subscriptions maintenance services $282,341 $235,584 $208,045 20% 13%
 Cost hardware $32,205 N/A -100%
cost revenue 284,967 240,881 245,733


4. Property and Equipment
Property and equipment consist of the following (in thousands):
Depreciation and amortization expense was $0.9 million and $1.0 million for the years ended December 31, 2019 and 2018, respectively.

As of December 31,                             |         |
---------------------------------------------- | ------- | -------
                                               | 2019    | 2018
Computers, software, furniture and fixtures    | $1,406  | $1,407
Equipment under capital lease  3,348           | 3,348   | 3,525
Less accumulated depreciation and amortization | (3,171) | (2,448)
Property and equipment, net                    | $1,583  | $2,484

. Property Equipment
 Depreciation amortization $0. million $1. million years December 2019 2018.
 Computers software furniture fixtures $1,406 $1,407
 Equipment capital lease 3,348
 depreciation amortization,171 (2,448
 $1,583 $2,484


Research and development expenses consist primarily of payroll and payroll-related benefits expenses, contracted research and development expenses, and facility costs. Research and development assists with organic growth and improves product stability and functionality, and accordingly, we dedicate extensive efforts to update and upgrade our product offerings. The primary driver is typically budgeted software upgrades and software development.
Research and development expenses decreased by $1.1 million during the year ended June 30, 2019 as compared to the prior fiscal year. This was primarily due to a reduction in contract labour and consulting of $6.8 million and a reduction in the use of facility and related expenses of $4.8 million, partially offset by an increase in payroll and payroll-related benefits of $12.6 million. The increase in payroll and payroll-related benefits was driven primarily by increased headcount from recent acquisitions. Overall, our research and development expenses, as a percentage of total revenues, remained stable at approximately 11% compared to prior fiscal year.
Our research and development labour resources increased by 336 employees, from 3,331 employees at June 30, 2018 to 3,667 employees at June 30, 2019.

                                                  | Change between Fiscal increase (decrease) |
------------------------------------------------- | ----------------------------------------- | -------------
(In thousands)                                    | 2019 and 2018                             | 2018 and 2017
Payroll and payroll-related benefits              | $12,629                                   | $39,119
Contract labour and consulting                    | (6,791)                                   | (3,899)
Share-based compensation                          | (385)                                     | (1,490)
Travel and communication                          | (588)                                     | (343)
Facilities                                        | (4,775)                                   | 7,834
Other miscellaneous                               | (1,163)                                   | 473
Total change in research and development expenses | $(1,073)                                  | $41,694

Research development expenses payroll benefits contracted facility costs. growth improves product stability functionality product offerings. primary driver software upgrades development.
 expenses decreased by $1. 1 million June 30, 2019 prior. due to reduction contract labour consulting $6. 8 million facility expenses $4. 8 million offset increase payroll benefits $12. 6 million. driven by increased headcount acquisitions. expenses revenues stable 11%.
 labour resources increased 336 employees from 3,331 2018 to 3,667 2019.
 Payroll benefits $12,629 $39,119
 Contract labour consulting (6,791)
 Share-based compensation
 Travel communication (588)
 Facilities (4,775)
 miscellaneous
 Total change research development expenses $41,694


Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to US$9,319,000 as at 30 June 2019 (2018:
US$6,890,000).
The ageing of the past due but not impaired receivables are as follows:
Accounting policy for trade and other receivables Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Trade receivables generally have 30 to 90 day terms.
AASB 9 Financial Instruments This standard addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model based on expected credit losses for the impairment of financial assets. The Group has applied the new standard on 1 July 2018 using a simplified approach for measuring expected credit losses relating to trade receivables using a lifetime expected loss allowance. To measure the expected credit losses, trade receivables are grouped based on region and ageing. Customers with heightened credit risk are provided for specifically based on historical default rates and forward looking information. Where there is no reasonable expectation of recovery, balances are written-off. The application of the standard did not result in any significant impact on the measurement of the allowance for doubtful debtors.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to shortterm receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.

                      | Consolidated |
--------------------- | ------------ | ------
                      | 2019         | 2018
                      | US$000       | US$000
0 to 1 month overdue  | 5,139        | 2,935
1 to 2 months overdue | 1,424        | 1,275
Over 2 months overdue | 2,756        | 2,680
                      | 9,319        | 6,890

Past due not impaired
 impairment US$9,319,000 30 June 2019 (2018
 US$6,890,000).
 ageing receivables
 Accounting policy trade receivables recognised fair value measured amortised cost effective interest less provision impairment. 30 to 90 day terms.
 AASB 9 Financial Instruments standard classification measurement assets liabilities rules hedge accounting impairment model. applied standard 1 July 2018 simplified approach credit losses lifetime loss allowance. receivables grouped region ageing. heightened credit risk historical default rates forward information. no expectation recovery balances written-off. doubtful debtors.
 Collectability receivables reviewed. Debts uncollectable written off carrying amount. provision impairment raised amounts. financial difficulties probability bankruptcy default delinquency 60 days overdue indicators impaired. impairment allowance difference carrying amount present value estimated future cash flows discounted original effective interest rate.Cash flows shortterm receivables discounted.
 receivables recognised amortised cost less provision impairment.
 US$000
 0 1 month overdue 5,139 2,935
 2 months
 2 2,756
 9,319 6


Note 12 – Income Taxes
Income tax expense for the fiscal years ended December 27, 2019, December 28, 2018 and December 29, 2017 differed from amounts computed using the statutory federal income tax rate due to the following reasons:

                                               | December 27, 2019  | December 28, 2018  | December 29, 2017
---------------------------------------------- | ------------------ | ------------------ | -----------------
Statutory U.S. Federal tax                     | $6,805             | $5,847             | $6,443
Differences due to:                            |                    |                    |
State and local taxes, net of federal benefit  | 2,078              | 1,906              | 1,112
Change in valuation allowance                  | 95                 | 523                | 289
Impact of the Tax Act                          | —                  | —                  | (3,573)
Stock compensation                             | (676)              | (197)              | 162
Other                                          | (92)               | (637)              | (391)
Income tax expense                             | $8,210             | $7,442             | $4,042

Income
 years 27, 2019 28, 2018 29, 2017 differed federal tax rate
 28, 2018 2017
 Statutory. Federal tax $6,805 $5,847 $6,443
 Differences
 State local taxes federal benefit 2,078 1,906
 valuation allowance
 Impact Tax Act
 Stock compensation (676) (197)
 Income tax expense $8,210 $7,442 $4,042


Seasonality and Backlog
We experience a slight seasonal pattern to our business. Overall, the third and fourth fiscal quarters are typically the strongest quarters of our fiscal year, whereas the first fiscal quarter is negatively affected by holidays and the second fiscal quarter may be affected by adverse winter weather conditions in some of our markets.
Certain of our end markets experience some seasonality. Our sales in the automotive market are dependent upon global automotive production, and seasonal declines in European production may negatively impact net sales in the fourth fiscal quarter. Also, our sales in the energy market typically increase in the third and fourth fiscal quarters as customer activity increases.
Customer orders typically fluctuate from quarter to quarter based upon business and market conditions. Backlog is not necessarily indicative of future net sales as unfilled orders may be cancelled prior to shipment of goods. Backlog by reportable segment was as follows:
We expect that the majority of our backlog at fiscal year end 2019 will be filled during fiscal 2020.

                         |         | Fiscal Year End
------------------------ | ------- | ---------------
                         | 2019    | 2018
                         |         | (in millions)
Transportation Solutions | $ 1,639 | $ 1,779
Industrial Solutions     | 1,315   | 1,245
Communications Solutions | 361     | 441
Total                    | $ 3,315 | $ 3,465

Seasonality Backlog
 seasonal pattern. third fourth quarters strongest first affected holidays second winter.
 end markets experience seasonality. sales automotive dependent global production seasonal declines European production impact sales fourth. sales energy market increase third fourth quarters customer activity.
 orders fluctuate business market conditions. Backlog not indicative future sales unfilled orders cancelled. Backlog segment
 majority backlog 2019 filled fiscal 2020.
 millions
 Transportation Solutions $ 1,639 1,779
 Industrial Solutions 1,315 1,245
 Communications Solutions 361
 Total $ 3,315 3,465


15. Income Taxes
Income before income taxes is as follows (in thousands):

          | Year Ended    |               |
--------- | ------------- | ------------- | -------------
          | June 30, 2019 | June 30, 2018 | June 30, 2017
Domestic  | $22,330       | $(55,197)     | $(7,228)
Foreign   | (48,204)      | 8,550         | 9,824
Total     | $(25,874)     | $(46,647)     | $2,596

. Income Taxes
 before
 30 2019 2018 2017
 Domestic $22,330 $(55,197) $(7,228
 Foreign (48,204
 $(25,874) $(46,647) $2,596


Note 5. Inventory, Net
The components of inventory, net are as follows (in thousands):

                     | December 31, |
-------------------- | ------------ | -------
                     | 2019         | 2018
Raw materials        | $8,921       | $6,396
Finished goods       | 25,247       | 16,594
Total inventory, net | $34,168      | $22,990

. Inventory
 components
 December 31,
 Raw materials $8,921 $6,396
 Finished goods 25,247 16,594
 inventory $34,168 $22,990


Note 13. Basic and Diluted Net Loss Per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture as they are not deemed to be issued for accounting purposes. Diluted net loss per share is computed by giving effect to all potential shares of common stock, stock options, restricted stock units, ESPP, and convertible senior notes, to the extent dilutive. For the periods presented, all such common stock equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be anti-dilutive.
The following table sets forth the computation of the Company’s basic and diluted net loss per share during the years ended December 31, 2019, 2018 and 2017 (in thousands, except per share data)

                                                                        |           | Year Ended December 31, |
----------------------------------------------------------------------- | --------- | ----------------------- | --------
                                                                        | 2019      | 2018                    | 2017
Numerator                                                               |           |                         |
Net loss                                                                | $(53,607) | $(26,203)               | $(4,204)
Denominator                                                             |           |                         |
Weighted-average common shares for basic and diluted net loss per share | 83,130    | 79,500                  | 76,281
Basic and diluted net loss per share                                    | $(0.64)   | $(0.33)                 | $(0.06)

. Basic Diluted Net Loss Per Share
 computed shares common stock less unvested common stock repurchase forfeiture. Diluted loss shares common stock stock options restricted stock units ESPP convertible senior notes. common stock equivalents excluded diluted net loss.
 table basic diluted net loss per share December 31, 2019 2018 2017 thousands
 December
 2019 2018 2017
 Net loss $(53,607) $(26,203) $(4,204)
 Weighted-average common shares basic diluted net loss per 83,130 79,500 76,281
 Basic diluted net loss per share $.


Note 10. EQUITY INVESTMENTS
Our equity investments consist of equity investments with readily determinable fair value, investments without readily determinable fair value, equity investments accounted for using the fair value option, and equity method investments.
Our share of earnings (losses) from equity investments accounted for under the equity method is reflected as ‘‘Equity in earnings (losses) of unconsolidated investees’’ in our consolidated statements of operations. Mark-to-market gains and losses on equity investments with readily determinable fair value are reflected as ‘‘other, net’’ under other income (expense), net in our consolidated statements of operations. The carrying value of our equity investments, classified as ‘‘other long-term assets’’ on our consolidated balance sheets, are as follows:

                                                                 | As of             |
---------------------------------------------------------------- | ----------------- | -----------------
(In thousands)                                                   | December 29, 2019 | December 30, 2018
Equity investments with readily determinable fair value:         |                   |
Enphase Energy, Inc                                              | $173,908          | $36,225
Total equity investments with readily determinable fair value    | 173,908           | 36,225
Equity investments without readily determinable fair value:      |                   |
Project entities                                                 | 2,677             | 2,951
Other equity investments without readily determinable fair value | 5,859             | 5,859
Total equity investments without readily determinable fair value | 8,536             | 8,810
Equity investments with fair value option:                       |                   |
SunStrong Capital Holdings, LLC                                  | 8,000             | 8,831
SunStrong Partners, LLC                                          | 9,500             | —
8point3 Solar Investco 3 Holdings, LLC                           | —                 | —
Total equity investment with fair value option                   | 17,500            | 8,831
Equity method investments                                        |                   |
Huansheng Corporation                                            | 26,533            | 32,784
Project entities                                                 | 125               | 2,044
Total equity method investments                                  | 26,658            | 34,828
Total equity investments                                         | $226,602          | $88,694

. EQUITY INVESTMENTS
 with fair value without value option method.
 earnings (losses investments method reflected as in earnings unconsolidated statements. Mark-to-market gains losses on investments fair value reflected as income. carrying value equity investments long
 December 29, 2019 December 30, 2018
 investments with readily determinable fair value
 Enphase Energy, Inc $173,908 $36,225
 without fair value
 Project entities 2,677
 Other equity investments without fair value 5,859
 investments 8,536
 investments with fair value option
 SunStrong Capital Holdings 8,831
 SunStrong Partners 9,500
 Solar Investco 3 Holdings
 fair value option 17,500 8,831
 method investments
 Huansheng Corporation 26,533 32,784
 Project entities 2,044
26,658 34,828
 $226,602 $88,694


Other non-operating results
The following details our other consolidated results for the years ended December 31, 2018 and 2017:
Interest income: Interest income increased by $4.2 million to $10.1 million for the year ended December 31, 2018, compared to $5.9 million for the same period in 2017 due to returns on our fixed deposits that had been made in 2018, and income derived from the lending capital of our lessor VIEs, that we are required to consolidate under U.S. GAAP.
Interest expense: Interest expense increased by $42.6 million to $101.9 million for the year ended December 31, 2018 compared to $59.3 million for the same period in 2017. In addition to higher LIBOR rates, this was primarily due to:
• $22.7 million increase in interest expense arising on the loan facilities of our consolidated lessor VIEs (refer to note 5 "Variable Interest Entities ("VIE")" of our consolidated financial statements included herein), in particular on the Hilli post-delivery sale and leaseback arrangement entered into during June 2018;
• $21.7 million lower capitalized interest on borrowing costs in relation to our investment in the Hilli FLNG conversion prior to acceptance of the vessel;
• $7.0 million increase in amortization of deferred financing costs in relation to the Hilli facility; and
• $1.4 million increase in interest expense in relation to the $402.5 million convertible bond issued in February 2017, resulting in a full year of interest incurred in 2018.
This was partially offset by a decrease of:
• $5.9 million in interest expense relating to the Hilli disposal; and
• $5.0 million higher capitalized interest on borrowing costs in relation to our investment in Golar Power.
(Losses)/gains on derivative instruments: Losses on derivative instruments increased by $51.2 million to a loss of $30.5 million for the year ended December 31, 2018 compared to a gain of $20.7 million for the same period in 2017. The movement was primarily due to:
Net unrealized and realized gains on interest rate swap agreements: As of December 31, 2018, we have an interest rate swap portfolio with a notional amount of $950 million, none of which are designated as hedges for accounting purposes. Net unrealized gains on the interest rate swaps decreased to a gain of $0.6 million for the year ended December 31, 2018 compared to a gain of $6.6 million for the same period in 2017, due to an improvement in the long-term swap rates, offset by the decreased notional value of the swap portfolio over the period. Realized gains on our interest rate swaps increased to a gain of $8.1 million for the year ended December 31, 2018, compared to a loss of $3.8 million for the same period in 2017. The increase was primarily due to higher LIBOR rates for the year ended December 31, 2018.
Unrealized (losses) gains on Total Return Swap (or equity swap): In December 2014, we established a three month facility for a Stock Indexed Total Return Swap Programme or Equity Swap Line with DNB Bank ASA in connection with a share buyback scheme. The facility has been extended to June 2019. The equity swap derivatives mark-to-market adjustment resulted in a net loss of $30.7 million recognized in the year ended December 31, 2018 compared to a gain of $16.6 million for the same period in 2017. The loss in 2018 is due to the fall in our share price during 2018.
Unrealized mark-to-market losses on Earn-Out Units: This relates to the mark-to-market movement on the Earn-Out Units issuable in connection with the IDR reset transaction in October 2016, which we recognize as a derivative asset in our consolidated financial statements. The decrease in Golar Partners' quarterly distribution to $0.4042 per common unit on October 24, 2018 resulted in the contingent Earn-Out Units arising out of the IDR reset transaction in October 2016 not crystallizing and, accordingly, we recognized a mark-to-market loss of $7.4 million for the year ended December 31, 2018, effectively reducing the derivative asset to $nil at December 31, 2018, compared to a gain of $0.4 million for the same period in 2017.
Net income attributable to non-controlling interests: The net income attributable to non-controlling interests comprises of (i) $19.7 million and $1.5 million in relation to the non-controlling shareholders who hold interests in Hilli LLC and Hilli Corp (prior to the incorporation of Hilli LLC) for the year ended December 31, 2018 and 2017, respectively, and (ii) $43.5 million and $32.9 million in relation to the equity interests in our lessor VIEs for the year ended December 31, 2018 and 2017, respectively.

                                                     |           | December 31, |          |
---------------------------------------------------- | --------- | ------------ | -------- | --------
(in thousands of $)                                  | 2018      | 2017         | Change   | % Change
Total other non-operating expense                    | —         | (81)         | 81       | (100)%
Interest income                                      | 10,133    | 5,890        | 4,243    | 72%
Interest expense                                     | (101,908) | (59,305)     | (42,603) | 72%
(Losses)/gains on derivative instruments             | (30,541)  | 20,696       | (51,237) | (248)%
Other financial items, net                           | (1,481)   | (69)         | (1,412)  | 2,046%
Income taxes                                         | (1,267)   | (1,505)      | 238      | (16)%
Net income attributable to non-controlling interests | (63,214)  | (34,424)     | (28,790) | 84%

non-operating results
 consolidated results 2018
 Interest income increased $4. 2 million $10. 1 million 2018 $5. 9 million 2017 returns fixed deposits capital VIEs.
 Interest expense increased $42. 6 million $101. 9 million 2018 $59. 3 million 2017. higher due
 $22. 7 million interest expense VIEs Hilli post sale leaseback
 $21. 7 million lower capitalized interest borrowing costs Hilli FLNG conversion
 $7. 0 million amortization deferred financing costs Hilli
 $1. 4 million increase interest expense $402. 5 million convertible bond 2017 year 2018.
 offset decrease
 $5. 9 million interest expense Hilli disposal
 $5. 0 million higher capitalized interest borrowing costs investment Golar Power.
/gains derivative instruments Losses increased $51. 2 million $30. 5 million 2018 $20. 7 million 2017. due
unrealized gains interest rate swap agreements December 31, 2018 swap portfolio $950 million none hedges. unrealized gains decreased $0. 6 million 2018 $6. 6 million 2017 improvement long-term swap rates decreased value. gains increased $8. 1 million December 31, 2018 loss $3. 8 million 2017. due higher LIBOR rates.
 Unrealized gains Total Return Swap December 2014, three month facility Stock Indexed Total Return Swap DNB Bank ASA. extended to June 2019. net loss $30. 7 million 2018 gain $16. 6 million 2017. loss due fall share price.
 Unrealized mark-to-market losses Earn-Out Units IDR reset transaction October 2016, derivative asset. decrease Golar Partners' quarterly distribution to $0. 4042 per common unit October 24, 2018 Earn-Out Units mark-to-market loss $7. 4 million December 31, 2018 reducing derivative to $nil compared gain $0.million 2017.
 Net income non-controlling interests $19. 7 million $1. 5 million shareholders Hilli LLC Corp 2018 $43. 5 million $32. 9 million equity interests VIEs 2018 2017.
 2017
 non-operating expense
 Interest income 10,133 5,890 4,243 72%
 Interest expense (101,908) (59,305 (42,603) 72%
 derivative instruments (30,541) 20,696 (51,237) (248)
 Other financial items (1,481) 2,046%
 Income taxes (1,267) (1,505)
 income non-controlling interests (63,214) (34,424) (28,790 84%


Stock-Based Compensation
The Company accounts for options granted to employees by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as an expense over the period during which the recipient is required to provide services in exchange for that award.
Options and warrants granted to consultants and other non-employees are recorded at fair value as of the grant date and subsequently adjusted to fair value at the end of each reporting period until such options and warrants vest, and the fair value of such instruments, as adjusted, is expensed over the related vesting period.
The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date and recognized over the period services are required to be provided in exchange for the award, usually the vesting period. Forfeitures of unvested stock options are recorded when they occur.
The Company incurred stock-based compensation charges of $3.5 million and $1.5 million for each of the years ended December 31, 2019 and 2018, respectively, which are included in general and administrative expenses. The following table summarizes the nature of such charges for the periods then ended (in thousands):

                                  | For the Years Ended December 31, |
--------------------------------- | -------------------------------- | ------
                                  | 2019                             | 2018
Compensation and related benefits | $3,247                           | $949
Professional and legal fees       | 242                              | 545
Totals                            | 3,489                            | $1,494

Stock-Based Compensation
 Company accounts for options employees cost services equity fair value date grant. recognized as expense over period.
 Options warrants to consultants non-employees recorded at fair value grant date adjusted value end reporting period until vest expensed over vesting period.
 Company measures cost services fair value. measured grant date recognized over vesting period. Forfeitures of unvested stock options recorded occur.
 incurred stock-based compensation charges of $3. 5 million $1. 5 million years ended December 31, 2019 2018 included in general administrative expenses. table summarizes charges
 Years
 Compensation related benefits $3,247 $949
 Professional legal fees 242
 Totals 3,489 $1,494


Selected Financial Data
• Significant events affecting our historical earnings trends in 2018 through 2019 are described in “Special Items” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section.
• 2017 data includes severance, pension and benefit charges, gain on spectrum license transactions, acquisition and integration related charges, product realignment charges, net gain on sale of divested businesses and early debt redemption costs. 2016 data includes severance, pension and benefit charges, gain on spectrum license transactions, net gain on sale of divested businesses and early debt redemption costs. 2015 data includes severance, pension and benefit credits and gain on spectrum license transactions.
• On January 1, 2019, we adopted several Accounting Standards Updates (ASUs) that were issued by the Financial Accounting Standards Board (FASB) using the modified retrospective basis. On January 1, 2018, we adopted several ASUs that were issued by the FASB. These standards were adopted on different bases, including: (1) prospective; (2) full retrospective; and (3) modified retrospective.
Based on the method of adoption, certain figures are not comparable, with full retrospective reflected in all periods. See Note 1 to the consolidated financial statements for additional information.

                                                    |           |           |           | (dollars in millions, except per share amounts) |
--------------------------------------------------- | --------- | --------- | --------- | ----------------------------------------------- | ---------
                                                    | 2019      | 2018      | 2017      | 2016                                            | 2015
Results of Operations                               |           |           |           |                                                 |
Operating revenues                                  | $131,868  | $130,863  | $ 126,034 | $ 125,980                                       | $ 131,620
Operating income                                    | 30,378    | 22,278    | 27,425    | 29,249                                          | 30,615
Net income attributable to Verizon                  | 19,265    | 15,528    | 30,101    | 13,127                                          | 17,879
Per common share – basic                            | 4.66      | 3.76      | 7.37      | 3.22                                            | 4.38
Per common share – diluted                          | 4.65      | 3.76      | 7.36      | 3.21                                            | 4.37
Cash dividends declared per common share            | 2.435     | 2.385     | 2.335     | 2.285                                           | 2.230
Net income attributable to noncontrolling interests | 523       | 511       | 449       | 481                                             | 496
Financial Position                                  |           |           |           |                                                 |
Total assets                                        | $ 291,727 | $ 264,829 | $ 257,143 | $ 244,180                                       | $ 244,175
Debt maturing within one year                       | 10,777    | 7,190     | 3,453     | 2,645                                           | 6,489
Long-term debt                                      | 100,712   | 105,873   | 113,642   | 105,433                                         | 103,240
Employee benefit obligations                        | 17,952    | 18,599    | 22,112    | 26,166                                          | 29,957
Noncontrolling interests                            | 1,440     | 1,565     | 1,591     | 1,508                                           | 1,414
Equity attributable to Verizon                      | 61,395    | 53,145    | 43,096    | 22,524                                          | 16,428

Financial Data
 events earnings trends 2018 2019 Discussion Analysis Financial Condition Results.
 2017 includes severance pension benefit charges license acquisition integration charges product realignment net gain sale early debt redemption costs. 2016 pension redemption. 2015 severance pension.
 January 1, 2019 adopted Accounting Standards Updates modified retrospective basis. January 1 2018 ASUs FASB. prospective full retrospective modified retrospective.
 figures comparable full retrospective. Note 1 financial statements information.
 millions
 2017 2016 2015
 Operations
 Operating revenues $131,868 $130,863 $ 126,034 125,980 131,620
 Operating income 30,378 22,278 27,425 29,249 30,615
 Net income Verizon 19,265 15,528 30,101 13,127 17,879
 Per common share 4. 66 3. 76 7. 37. 22.
common share. 76. 37
 dividends. 335. 230
 Net income noncontrolling interests 523 496
 assets $ 291,727 264,829 257,143 244
 Debt 10,777 7,190 3,453 6,489
 Long-term debt 100,712 105,873 113,642 105,433 103
 Employee benefit obligations 17,952 18,599 22,112 26,166 29,957
 Noncontrolling interests
 Equity Verizon 61,395 53,145 43,096


Revenues
The following table sets forth the breakdown of revenues (in thousands) by category and segment. Travel revenue includes travel publications (Top 20, Website, Newsflash, Travelzoo Network), Getaways vouchers, and hotel platform and vacation packages. Local revenue includes Local Deals vouchers and entertainment offers (vouchers and direct bookings).
Asia Pacific
Asia Pacific revenues decreased $1.4 million or 17% in 2019 compared to 2018. This decrease was primarily due to the decrease in Travel revenues, the decrease in Local revenues and a $206,000 negative impact from foreign currency movements relative to the U.S. dollar. The decrease in Travel revenues of $887,000 was primarily due to a decrease of number of emails sent. The decrease in Local revenues of $276,000 was primarily due to the decreased number of Local Deals vouchers sold.
Europe
Europe revenues increased $749,000 or 2% in 2019 compared to 2018. This increase was primarily due to the increase in Travel revenues, the decrease in Local revenues and a $1.8 million negative impact from foreign currency movements relative to the U.S. dollar. The increase in Travel revenue of $2.9 million was primarily due to the increased number of emails sent. The decrease in Local revenues of $292,000 was primarily due to the decreased number of Local Deals vouchers sold.
North America
North America revenues increased $710,000 or 1% in 2019 compared to 2018. This increase was primarily due to the increase in Travel revenues offset by the decrease in Local revenue. The increase in Travel revenue of $1.7 million was primarily due to the increased number of emails sent. The decrease in Local revenues of $1.0 was primarily due to the decreased number of Local Deals vouchers sold.
For 2019 and 2018 , none of our customers accounted for 10% or more of our revenue.

                             | Year Ended December 31, |
---------------------------- | ----------------------- | --------
                             | 2019                    | 2018
Asia Pacific                 |                         |
Travel                       | $6,274                  | $7,351
Local                        | 216                     | 508
Total Asia Pacific revenues  | 6,490                   | 7,859
Europe                       |                         |
Travel                       | 32,081                  | 30,856
Local                        | 4,817                   | 5,293
Total Europe revenues        | 36,898                  | 36,149
North America                |                         |
Travel                       | 57,863                  | 56,145
Local                        | 10,161                  | 11,169
Total North America revenues | 68,024                  | 67,314
Consolidated                 |                         |
Travel                       | 96,218                  | 94,352
Local                        | 15,194                  | 16,970
Total revenues               | $111,412                | $111,322

 table breakdown by category segment. Travel revenue includes publications Travelzoo Getaways vouchers hotel vacation packages. Local revenue includes Deals vouchers entertainment offers.
 Asia Pacific
 revenues decreased $1. 4 million 17% 2019 2018. Travel Local revenues $206,000 negative impact foreign currency. Travel $887,000 emails sent. Local $276,000 Deals vouchers.
 Europe
 revenues increased $749,000 2%. increase Travel $1. 8 million negative foreign currency. Travel revenue $2. 9 million increased emails. decrease Local $292,000 decreased Local Deals vouchers sold.
 North America
 revenues increased $710,000 1%. Travel Local revenue. Travel revenue $1. 7 million increased emails sent. decrease Local revenues $1. decreased Local Deals vouchers sold.
 customers accounted 10% more revenue.
 Ended December
 Asia Pacific
 Travel $6,274 $7,351
 Local
 revenues 6,490 7,859
 Europe
32,081 30,856
 5,293
 Europe 36,898
 57,863 56,145
 11,169
 America 68,024 67,314
 96,218 94,352
 15 16,970
 $111,412 $111,322


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (United States Dollars in thousands, except per share data and unless otherwise indicated)
Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as net income. Some of the limitations of Adjusted EBITDA include:
• It does not reflect our current contractual commitments that will have an impact on future cash flows; • It does not reflect the impact of working capital requirements or capital expenditures; and • It is not a universally consistent calculation, which limits its usefulness as a comparative measure.
Management compensates for the inherent limitations associated with using the measure of Adjusted EBITDA through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income, as presented below.
(1) Includes equity-based compensation to employees and directors, as well as equity-based payments to non-employees.
(2) Includes losses recorded in the fourth quarter of 2019 associated with the financial guarantee arrangement for a Bank Partner that did not renew its loan origination agreement when it expired in November 2019. See Note 14 to the Notes to Consolidated Financial Statements included in Item 8 for additional discussion of our financial guarantee arrangements.
(3) For the year ended December 31, 2019, includes loss on remeasurement of our tax receivable agreement liability of $9.8 million and professional fees associated with our strategic alternatives review process of $1.5 million. For the year ended December 31, 2018, includes certain costs associated with our IPO, which were not deferrable against the proceeds of the IPO. Further, includes certain costs, such as legal and debt arrangement costs, related to our March 2018 term loan upsizing. For the year ended December 31, 2017, includes one-time fees paid to an affiliate of one of the members of the board of managers in conjunction with the August 2017 term loan transaction.
(4) For the year ended December 31, 2019, includes (i) legal fees associated with IPO related litigation of $2.0 million, (ii) one-time tax compliance fees related to filing the final tax return for the Former Corporate Investors associated with the Reorganization Transactions of $0.2 million, and (iii) lien filing expenses related to certain Bank Partner solar loans of $0.6 million.

                                           |          | Year Ended December 31, |
------------------------------------------ | -------- | ----------------------- | --------
                                           | 2019     | 2018                    | 2017
Net income                                 | $95,973  | $127,980                | $138,668
Interest expense                           | 23,860   | 23,584                  | 7,536
Tax expense (benefit)                      | (7,125)  | 5,534                   | —
Depreciation and amortization              | 7,304    | 4,478                   | 3,983
Equity-based compensation expense(1)       | 13,769   | 6,054                   | 4,253
Change in financial guarantee liability(2) | 16,215   | —                       | —
Transaction expenses(3)                    | 11,345   | 2,393                   | 2,612
Non-recurring expenses(4)                  | 2,804    | —                       | —
Adjusted EBITDA                            | $164,145 | $170,023                | $157,052

ITEM 7. MANAGEMENT DISCUSSION ANALYSIS FINANCIAL CONDITION RESULTS States Dollars share data
 Adjusted EBITDA limitations not GAAP financial measures. limitations
 current contractual commitments future cash flows working capital requirements expenditures universally consistent limits usefulness comparative.
 Management compensates disclosure financial statements GAAP reconciliation net income.
 Includes equity-based compensation employees directors payments non-employees.
 Includes losses fourth quarter 2019 financial guarantee arrangement Bank Partner loan November 2019. Note 14 Consolidated Financial Statements Item 8 guarantee.
 year ended December 31, 2019 loss remeasurement tax receivable agreement liability $9. 8 million professional fees strategic alternatives review process $1. 5 million. year December 31, 2018 costs not deferrable proceeds. legal debt arrangement March 2018 loan upsizing. year December 31, 2017 one-time fees affiliate board August 2017 term loan transaction.
year December 31, 2019 legal fees IPO $2. million tax fees. 2 million lien filing expenses Bank Partner solar loans. 6 million.
 Ended December
 Net income $95,973 $127,980 $138,668
 Interest expense 23,860
 Tax (7,125 5,534
 Depreciation amortization 7,304 4,478
 Equity compensation 13,769
 financial guarantee 16,215
 Transaction 11,345 2,393
 Non-recurring 2,804
 Adjusted EBITDA $164,145 $170,023 $157,052


Comparison of Years Ended December 31, 2019 to December 31, 2018
The following tables in this section set forth our selected consolidated statements of operations (in thousands), data for the percentage change and data as a percentage of revenue for the years ended December 31, 2019 and 2018. Certain previously reported amounts in the consolidated statements of operations for the year ended December 31, 2018 have been reclassified to conform to our current presentation to reflect interest income as a separate line item, which was previously included in other income, net.
Cost of Revenue
(1) Excludes amortization and depreciation shown in operating expenses.
The $37.9 million increase in cost of revenue in 2019 as compared to 2018 was the result of a $32.8 million, or 32%, increase in cost of hardware and other revenue and a $5.1 million, or 11%, increase in cost of SaaS and license revenue. Our cost of software license revenue included within cost of SaaS and license revenue decreased $0.4 million to $1.3 million during 2019 as compared to $1.7 million during 2018. The increase in cost of Alarm.com segment hardware and other revenue related primarily to an increase in the number of hardware units shipped in 2019 as compared to 2018. The increase in cost of  corresponding increase in amounts paid to wireless network providers.
Cost of hardware and other revenue as a percentage of hardware and other revenue was 81% and 78% for the years ended December 31, 2019 and 2018, respectively. Cost of SaaS and license revenue as a percentage of SaaS and license revenue was 15% for each of the years ended December 31, 2019 and 2018. Cost of software license revenue as a percentage of software license revenue was 3% and 4% for the years ended December 31, 2019 and 2018, respectively. The increase in cost of hardware and other revenue as a percentage of hardware and other revenue in 2019 as compared to 2018 is a reflection of the mix of product sales during the periods.

                                   |          | Year Ended December 31, | % Change
---------------------------------- | -------- | ----------------------- | -------------
2019 vs. 2018                      | 2019     | 2018                    | 2019 vs. 2018
Cost of revenue(1):                |          |                         |
Cost of SaaS and license revenue   | $50,066  | $44,933                 | 11%
Cost of hardware and other revenue | 133,533  | 100,782                 | 32%
Total cost of revenue              | $183,599 | $145,715                | 26%
% of total revenue                 | 37%      | 35%                     |

Comparison Years Ended December 31, 2019 to 2018
 tables consolidated statements operations data percentage change revenue years 2019 2018. amounts 2018 reclassified interest income separate line item income.
 Cost Revenue
 Excludes amortization depreciation operating expenses.
 $37. 9 million increase cost revenue 2019 2018 $32. 8 million 32%, increase cost hardware revenue $5. 1 million 11% increase cost SaaS license revenue. cost software license revenue decreased $0. 4 million to $1. 3 million 2019 $1. 7 million 2018. increase cost Alarm. hardware increase number hardware units shipped 2019. increase cost amounts paid wireless network providers.
 Cost hardware other revenue 81% 78% 2019 2018. Cost SaaS license revenue 15%. Cost software license revenue 3% 4% 2019 2018. increase cost hardware revenue 2019 mix product sales.
 Year Ended December 31, % Change
 2019. 2018.
 Cost
 Cost SaaS license revenue $50,066 $44,933 11%
hardware 133,533 100,782 32%
 $183,599 $145,715 26%
 revenue 37%


2. Fixed assets
Accounting policies
Shares in Group undertakings are stated at cost less any provision for impairment and capital related to share-based payments. Contributions in respect of share-based payments are recognised in line with the policy set out in note 7 “Share-based payments”.
The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If any such indication of impairment exists, the Company makes an estimate of the recoverable amount. If the recoverable amount of the cash-generating unit is less than the value of the investment, the investment is considered to be impaired and is written down to its recoverable amount. An impairment loss is recognised immediately in the income statement.
Shares in Group undertakings

                                                           | 2019   | 2018
---------------------------------------------------------- | ------ | ------
                                                           | €m     | €m
Cost:                                                      |        |
1 April                                                    | 91,905 | 91,902
Capital contributions arising from share-based payments    | 137    | 130
Contributions received in relation to share-based payments | (92)   | (127)
31 March                                                   | 91,950 | 91,905
Amounts provided for:                                      |        |
1 April                                                    | 8,177  | 7,911
Impairment losses                                          | –      | 266
31 March                                                   | 8,177  | 8,177
Net book value:                                            |        |
31 March                                                   | 83,773 | 83,728

. Fixed assets
 Accounting policies
 Shares Group undertakings cost less provision impairment capital share-based payments. Contributions share-based payments recognised note 7.
 Company assesses investments impairment. recoverable amount. less value investment impaired written down recoverable amount. impairment loss recognised income statement.
 Shares Group undertakings
 2019 2018
 €m
 Cost
 1 April 91,905
 Capital contributions share-based payments
 Contributions payments
 31 March 91,950 91,905
 Amounts
 1 April 8,177
 Impairment losses
 31 March 8,177
 Net book value
 March 83,773


Item 10. Directors, Executive Officers and Corporate Governance
Information About Our Board of Directors
Set forth below are the name, age and position of each member of our board of directors.
The following are biographical summaries of our board members.
Darcy Antonellis has served on the Board since December 2018. Since January 2014, Ms. Antonellis has been the Chief Executive Officer of Vubiquity, Inc., a wholly owned subsidiary of Amdocs Limited since February 22, 2018, the largest global provider of premium content services and technical solutions serving clients in 120 countries and in 80 languages. From June 1998 until December 2013, Ms. Antonellis held numerous positions at Warner Bros. Entertainment Inc., a Time Warner company, including President, Technical Operations and Chief Technology Officer. Ms. Antonellis has also served as a member of the Board of Directors of Cinemark Holdings, Inc. since July 7, 2015. Ms, Antonellis received a B.S. in electrical engineering from Temple University and an M.B.A. from Fordham University. The Board believes Ms. Antonellis brings her extensive expertise in executive management, operations and engineering and her in-depth understanding of content services, media and entertainment industry to her role as a member of the Board.
David C. Habiger has served on the Board since December 2016. Mr. Habiger currently serves as the Chief Executive Officer of JD Power, a privately held company. Mr. Habiger served as a director of DTS from March 2014 until its acquisition by the Company in December 2016. Mr. Habiger serves as a director of the Chicago Federal Reserve Board. He is on the SABOR (Systems Activities, Bank Operations and Risk) Committee and the Governance & HR Committee for the
Federal Reserve. Mr. Habiger served as the CEO at Textura Corporation, a soft
David C. Habiger has served on the Board since December 2016. Mr. Habiger currently serves as the Chief Executive Officer of JD Power, a privately held company. Mr. Habiger served as a director of DTS from March 2014 until its acquisition by the Company in December 2016. Mr. Habiger serves as a director of the Chicago Federal Reserve Board. He is on the SABOR (Systems Activities, Bank Operations and Risk) Committee and the Governance & HR Committee for the Federal Reserve. Mr. Habiger served as the CEO at Textura Corporation, a soft David C. Habiger has served on the Board since December 2016. Mr. Habiger currently serves as the Chief Executive Officer of JD Power, a privately held company. Mr. Habiger served as a director of DTS from March 2014 until its acquisition by the Company in December 2016. Mr. Habiger serves as a director of the Chicago Federal Reserve Board. He is on the SABOR (Systems Activities, Bank Operations and Risk) Committee and the Governance & HR Committee for the Federal Reserve. Mr. Habiger served as the CEO at Textura Corporation, a software company focused on construction management, from May 2015 until its sale to Oracle in June 2016. From May 2011 to August 2012, he served as the Chief Executive Officer of NDS Group Ltd., a provider of video software and content security solutions. Mr. Habiger worked with the founding members of Sonic Solutions (“Sonic”), a computer software company, from 1992 to 2011 and served as President and Chief Executive Officer of Sonic from 2005 to 2011. He serves as a director for Echo Global Logistics, Inc., GrubHub Inc., and Stamps.com Inc., and previously served as a director for Control4 Corporation, Enova International, Inc., Immersion Corporation, RealD Inc., Textura Corporation, DTS, and Sonic Solutions. He is a member of the National Association of Corporate Directors and is on the Advisory Board of the University of Chicago Center for Entrepreneurship. Mr. Habiger received a bachelor’s degree in business administration from St. Norbert College and an M.B.A. from the University of Chicago. The Board believes that Mr. Habiger brings extensive experience in the digital media and entertainment industries and his in-depth knowledge and understanding of the consumer electronics industry to his role as a member of the Board.
Richard S. Hill has served as a member of the Board since August 2012 and as Chairman of the Board since March 2013. Mr. Hill also served as the Company’s Interim Chief Executive Officer from April 15, 2013 until May 29, 2013. Mr. Hill previously served as the Chief Executive Officer and member of the board of directors of Novellus Systems Inc., until its acquisition by Lam Research Corporation in June 2012. During his nearly 20 years leading Novellus Systems, a designer, manufacturer, and marketer of semiconductor equipment used in fabricating integrated circuits, Mr. Hill grew annual revenues from approximately $100 million to over $1 billion. Presently, Mr. Hill is Chairman of Marvell Technology Group Ltd. (“Marvell”), a producer of storage, communications and consumer semiconductor products, and a member of its board of directors. Mr. Hill served as Interim Chief Executive Officer of Marvell from May 2016 until July 2016. Mr. Hill is a member of the boards of directors of Arrow Electronics, Inc., a global provider of products and services to industrial and commercial users of electronic components and enterprise computing, and Cabot Microelectronics Corporation, the leading global supplier of chemical mechanical planarization (CMP) slurries and a growing CMP pad supplier to the semiconductor industry. Mr. Hill previously served on the board of directors of Symantec Corporation, LSI Corporation, Planar Systems, Autodesk, Inc. and Yahoo Inc. Mr. Hill received a B.S. in Bioengineering from the University of Illinois in Chicago and an M.B.A. from Syracuse University. The Board believes that Mr. Hill brings extensive expertise in executive management and engineering for technology and defenserelated companies to his role as Chairman of the Board.
Jon E. Kirchner has served on the Board and as Chief Executive Officer since June 2017. Previously he was president of Xperi following the completion of the acquisition of DTS in December 2016. He served as DTS’s Chairman of the board of directors and Chief Executive Officer from 2010 to December 2016 and had been a member of DTS’s board of directors from 2002 to December 2016. From 2001 to 2010, he served as DTS’s Chief Executive Officer. Prior to his tenure as Chief Executive Officer, Mr. Kirchner served at DTS from 1993 to 2001 in a number of senior leadership roles including President, Chief Operating Officer and Chief Financial Officer. Prior to joining DTS, Mr. Kirchner worked for the consulting and audit groups at Price Waterhouse LLP (now PricewaterhouseCoopers LLP), an international accounting firm. In 2012, Mr. Kirchner received the Ernst & Young Technology Entrepreneur of the Year Award for Greater Los Angeles. In 2011, Mr. Kirchner was honored by the Producers Guild of America, receiving the “Digital 25: Leaders in Emerging Entertainment” award for being among the visionaries that have made significant contributions to the advancement of digital entertainment and storytelling. Mr. Kirchner currently serves on the board of directors of Free Stream Media Corporation (Samba TV), a leader in developing cross platform TV experiences for consumers and advertisers. Mr. Kirchner is a Certified Public Accountant and received a B.A. in Economics, cum laude, from Claremont McKenna College. The Board believes that Mr. Kirchner brings his experience in the senior management of public companies, including service as chairman, president, Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, his extensive experience in the digital media and entertainment industries, as well as his knowledge of the Company as its Chief Executive Officer, to his role as a member of the Board.
V. Sue Molina has served on the Board since February 2018. Most recently she served on the Board of Directors of DTS from January 2008 until December 2016, and served as Chair of the Audit Committee and Nominating and Corporate Governance Committee. From November 1997 until her retirement in May 2004, Ms. Molina was a tax partner at Deloitte & Touche LLP, an international accounting firm, serving from 2000 until May 2004 as the national partner in charge of Deloitte’s Initiative for the Retention and Advancement of Women. Prior to that, she spent twenty years with Ernst & Young LLP, an international accounting firm, the last ten years as a partner. Ms. Molina has prior board experience serving on the Board of Directors, chair of the Compensation Committee and member of the Audit Committee of Sucampo Pharmaceuticals, Inc., and on the Board of Directors, chair of the Audit Committee and a member of the Compensation Committee of Royal Neighbors of America. She received a B.S.B.A. and a Masters of Accounting degree from the University of Arizona. The Board believes that Ms. Molina brings her extensive accounting and financial expertise, her experience in advising boards and her past service on boards of public companies, to her role as a member of the Board.
George A. Riedel has served on the Board since May 2013. He also has served on the board of Cerner Corporation, a leading supplier of health care information technology solutions and tech-enabled services, since May 2019. Since January 2018, Mr. Riedel has been a Senior Lecturer at Harvard Business School. Prior to that, he was the Chairman of the Board of Montreal-based Accedian Networks, where he had served as a director since 2010. Until January 2017, Mr. Riedel also served as Chairman and CEO of Cloudmark, Inc., a private network security company. Mr. Riedel joined the board at Cloudmark in June 2013, became Chairman in January 2014 and CEO in December 2014. Mr. Riedel also served on the board of directors of PeerApp from 2011 until 2014 and on the board of directors of Blade Network Technologies from 2009 until its sale to IBM in 2010. In March 2006, Mr. Riedel joined Nortel Networks Corporation, a publicly-traded, multinational, telecommunications equipment manufacturer (“Nortel”), as part of the turnaround team as the Chief Strategy Officer. His role changed after Nortel initiated creditor protection under the respective restructuring regimes of Canada under the Companies’ Creditors Arrangement Act, in the U.S. under the Bankruptcy Code, the United Kingdom under the Insolvency Act 1986, on January 14, 2009, and subsequently, Israel, to lead the sale/restructuring of various carrier and enterprise business units through a series of transactions to leading industry players such as Ericsson, Avaya and Ciena. Mr. Riedel led the efforts to create stand-alone business units, carve out the relevant P&L and balance sheet elements and assign patents to enable sales of the assets. In 2010, Mr. Riedel’s role changed to President of Business Units and CSO as he took leadership of the effort to monetize the remaining 6,500 patents and applications patents as well as manage the P&L for several business units that were held for sale. The 2011 patent sale led to an unprecedented transaction of $4.5 billion to a consortium of Apple, Ericsson, RIM, Microsoft and EMC. Prior to Nortel, Mr. Riedel was the Vice President of Strategy and Corporate Development of Juniper Networks, Inc., a publicly-traded designer, developer and manufacturer of networking products, from 2003 until 2006. Previously, Mr. Riedel was also a Director at McKinsey & Company, a global management consulting firm, where he spent 15 years serving clients in the telecom and technology sectors in Asia and North America on a range of strategy and growth issues. Mr. Riedel received a B.S. with Distinction in Mechanical Engineering from the University of Virginia and his M.B.A. from Harvard Business School. Mr. Riedel holds a Stanford Directors’ College certification based on completion of its corporate directors training. The Board believes that Mr. Riedel brings his experience from his direct involvement in the restructuring of Nortel, including the sale of Nortel’s patent portfolio for $4.5 billion, as well as his knowledge of the technology industry and leadership experience, to his role as a member of the Board.
Christopher A. Seams has served on the Board since March 2013. Mr. Seams served as the Chief Executive Officer and a director of Deca Technologies Inc., a subsidiary of Cypress Semiconductor Corporation, a global semiconductor company, from May 2013 until August 2016. Mr. Seams previously was an Executive Vice President of Sales & Marketing at Cypress Semiconductor Corporation, from July 2005 until June 2013. He previously served as an Executive Vice President of Worldwide Manufacturing & Research and Development of Cypress Semiconductor Corporation. Mr. Seams joined Cypress in 1990 and held a variety of positions in process and assembly technology research and development and manufacturing operations. Prior to joining Cypress in 1990, he worked as a process development Engineer or Manager for Advanced Micro Devices and Philips Research Laboratories. Mr. Seams currently serves as the Chairman of the Board of Directors of Onto Innovation Inc. (formerly Nanometrics Inc.). Mr. Seams is a senior member of IEEE, a member of NACD and ACCD, served on the Engineering Advisory Council for Texas A&M University and was a board member of Joint Venture Silicon Valley. Mr. Seams received a B.S. in Electrical Engineering from Texas A&M University and a M.S. in Electrical and Computer Engineering from the University of Texas at Austin. Mr. Seams has a Professional Certificate in Advanced Computer Security from Stanford University. Mr. Seams also holds a National Association of Corporate Directors certification which was awarded to him based on NACD training and examination standards. The Board believes that Mr. Seams brings extensive management, sales and marketing, and engineering experience in the semiconductor industry to his role as a member of the Board.

Name                 | Age | Position(s)
-------------------- | --- | ------------------------------------
Darcy Antonellis     | 57  | Director
David C. Habiger     | 51  | Director
Richard S. Hill      | 68  | Chairman of the Board of Directors
Jon E. Kirchner      | 52  | Chief Executive Officer and Director
V. Sue Molina        | 71  | Director
George A. Riedel     | 62  | Director
Christopher A. Seams | 57  | Director

. Directors Executive Officers Corporate Governance
 Board Directors
 name age position member.
 biographical summaries.
 Darcy Antonellis served Board since December 2018. 2014,. Chief Executive Officer Vubiquity. subsidiary Amdocs Limited since February 22, 2018 global provider content services technical solutions 120 countries 80 languages. June 1998 December 2013,. positions Warner Bros. Entertainment. President Technical Operations Chief Technology Officer. Board Directors Cinemark Holdings. since July 7, 2015. B. S. electrical engineering Temple University M. B. Fordham University. expertise executive management operations engineering understanding content services media entertainment industry.
 David C. Habiger Board since December 2016. Chief Executive Officer Power. director DTS March 2014 2016. director Chicago Federal Reserve Board. SABOR Committee Governance HR Committee
. CEO Textura Corporation
. Board since December 2016. Chief Executive Officer Power. March 2014 2016. Federal ReserveSABOR Governance HR Committee Federal Reserve. CEO Textura Corporation. Board since December 2016. Chief Executive Officer Power privately. director DTS March 2014 acquisition December 2016. Chicago Federal Reserve Board. SABOR Governance HR. CEO Textura Corporation construction management May 2015 sale Oracle June 2016. 2011 August 2012, Chief Executive Officer NDS Group. video software content security solutions. Sonic Solutions 1992 2011 President Chief Executive Officer 2005 2011. director Echo Global Logistics. GrubHub. Stamps. com. Control4 Corporation Enova International. Immersion Corporation RealD. Textura Corporation DTS Sonic Solutions. member National Association Corporate Directors Advisory Board University of Chicago Center Entrepreneurship. bachelor’s degree business administration St. Norbert College M. B. University of Chicago. experience digital media entertainment consumer electronics industry.
. Hill Board since August 2012 Chairman March 2013. Interim Chief Executive Officer April 15, 2013 May 29, 2013.Hill Chief Executive Officer Novellus Systems Inc. until acquisition Lam Research Corporation 2012. 20 years Novellus designer manufacturer marketer semiconductor equipment. Hill grew revenues $100 million to $1 billion. Chairman Marvell Technology Group Ltd. producer storage communications consumer semiconductor products member board. Interim Chief Executive Officer May 2016 July 2016. member Arrow Electronics. provider Cabot Microelectronics Corporation supplier). served board Symantec LSI Planar Systems Autodesk. Yahoo Inc. B. S. Bioengineering University Illinois M. B. Syracuse University. expertise executive management engineering.
 Jon E. Kirchner Chief Executive Officer since June 2017. president Xperi DTS 2016. DTS’s Chairman Chief Executive Officer 2010 to December 2016 member board directors 2002 to December 2016. 2001 to 2010, Chief Executive Officer. DTS 1993 to 2001 senior leadership roles President Chief Operating Officer Chief Financial Officer.Kirchner worked consulting audit Price Waterhouse LLP international. 2012,. received Ernst & Young Technology Entrepreneur of Year Award Greater Los Angeles. 2011,. honored Producers Guild America “Digital 25 Leaders Emerging award digital entertainment storytelling. serves board directors Free Media Corporation leader cross platform TV experiences. Certified Public Accountant received B. A. Economics Claremont McKenna College. Board believes. brings experience senior management digital media entertainment industries knowledge Company Chief Executive Officer Board.
. Sue Molina served Board since February 2018. served Board Directors DTS January 2008 December 2016, Chair Audit Committee Nominating Corporate Governance Committee. 1997 2004,. tax partner Deloitte & Touche LLP 2004 national partner Initiative Retention Advancement Women. twenty years Ernst & Young LLP ten years partner. prior board experience Committee Sucampo Pharmaceuticals. Royal Neighbors of America. received B. S.Masters Accounting degree University of Arizona. Board believes. Molina brings accounting financial expertise experience advising service.
 George A. Riedel served Board since May 2013. Cerner Corporation health care technology since May 2019. January 2018. Senior Lecturer Harvard Business School. Chairman Board Accedian Networks director since 2010. January 2017. Chairman CEO Cloudmark. private network security company. joined board June 2013, Chairman January 2014 CEO December 2014. served PeerApp 2011 2014 Blade Network Technologies 2009 sale IBM 2010. March 2006,. joined Nortel Networks Corporation telecommunications equipment manufacturer Chief Strategy Officer. role changed Nortel creditor protection Canada. Bankruptcy Code Insolvency Act sale/restructuring carrier enterprise business units Ericsson Avaya Ciena. led stand-alone business units P&L balance sheet elements patents sales. 2010,.role President Business Units CSO 6,500 patents P&L business units sale. 2011 patent sale led transaction $4. 5 billion Apple Ericsson Microsoft EMC. Riedel Vice President Strategy Corporate Development Juniper Networks. designer manufacturer networking products 2003 2006. Director McKinsey & Company 15 years technology Asia North America. B. S. Mechanical Engineering University of Virginia M. B. Harvard Business School. Stanford Directors’ College certification. experience restructuring Nortel sale patent portfolio $4. 5 billion technology industry leadership experience Board.
 Christopher A. Seams served Board since March 2013. Chief Executive Officer director Deca Technologies. subsidiary Cypress Semiconductor Corporation 2013 2016. Executive Vice President Sales Marketing Cypress Semiconductor 2005 2013. Executive Vice President Worldwide Manufacturing Research Development. joined 1990 positions process assembly technology research development manufacturing operations. process development Engineer Manager Advanced Micro Devices Philips Research Laboratories.. Seams Chairman Board Onto Innovation. Nanometrics. senior member IEEE NACD ACCD Engineering Advisory Council Texas A&M University board member Joint Venture Silicon Valley. B. S. Electrical Engineering Texas A&M M. S. Electrical Computer Engineering Texas Austin. Professional Certificate Advanced Computer Security Stanford University. National Association Corporate Directors certification NACD. management sales marketing engineering experience semiconductor industry.
 Darcy Antonellis
 David. Habiger
 Richard. Hill Chairman
 Jon. Kirchner Chief Executive Officer
. Sue Molina
 George. Riedel
 Christopher. Seams


Cash flow
Net cash flow from operating activities decreased by $4.8 million to $142.9 million from $147.7 million in the prior period. The small overall decrease was due to a $9.9 million reduction in the cashflow outflow on exceptional items, a $7.0 million improved use of working capital within the business, both being offset by an increase in overheads, primarily in relation to Sales and Marketing expenses.
Unlevered free cashflow decreased by $15.8 million to $123.8 million from $139.6 million in the prior-period representing the reduction in net cash flow from operating activities adjusted for the cashflow impact of exceptional items.
1 Restated for the adoption of IFRS 15 and change in accounting policy in respect of research and development expenditure tax credit scheme (“RDEC”) and provision for interest on uncertain tax positions, as explained in note 2 of the Financial Statements
2 Unlevered free cash flow is also represented by the sum of the marked rows and has been presented to enhance understanding of the Group’s cash generation capability
3 Excludes non-cash movements on exceptional items

                                        | FY19   | FY181
--------------------------------------- | ------ | -------
                                        | $M     | $M
Cash EBITDA2                            | 167.9  | 199.2
Net deferral of revenue                 | (49.7) | (129.6)
Net deferral of expenses                | 0.9    | 8.4
Foreign exchange                        | 1.5    | (8.1)
Depreciation                            | (11.6) | (11.6)
Adjusted operating profit               | 109.0  | 58.3
Net deferral of revenue                 | 49.7   | 129.6
Net deferral of expenses                | (0.9)  | (8.4)
Exceptional items 3                     | (3.1)  | (13.0)
Depreciation                            | 11.6   | 11.6
Foreign exchange                        | (1.5)  | 8.1
Change in working capital 2             | (5.2)  | (12.2)
Corporation tax paid 2                  | (16.7) | (26.3)
Net cash flow from operating activities | 142.9  | 147.7
Exceptional items 3                     | 3.1    | 13.0
Net capital expenditure 2               | (22.2) | (21.1)
Unlevered free cash flow                | 123.8  | 139.6

 decreased $4. million to $142. million from $147. 7 million prior. decrease due to $9. million reduction cashflow outflow exceptional items. improved use working capital offset by overheads Sales Marketing expenses.
 Unlevered free cashflow decreased $15. 8 million to $123. million from $139. 6 million reduction adjusted for exceptional items.
 Restated for IFRS 15 change accounting policy research development expenditure tax credit scheme provision interest uncertain tax positions note 2 Financial Statements
 Unlevered free cash flow represented by sum marked cash generation capability
 Excludes non-cash movements exceptional items
 EBITDA2 167. 199.
 deferral revenue.
 expenses.
.
.
 Adjusted operating profit 109. 58
 deferral revenue.
 expenses.
 Exceptional items 3.
.
.
 Change working capital. (12
 Corporation tax paid (16.
cash flow 142. 147.
 items. 13.
 capital expenditure. (21.
 cash flow 123. 139.


For the full year 2019, our ADG revenues increased 1.4% compared to the previous period. The increase was primarily due to improved average selling prices of approximately 9%, which was entirely due to a better product mix, and partially offset by a decrease in volumes by approximately 8%.
AMS revenues grew 4.6%, mainly due to the double-digits growth in Imaging. The increase was due to higher average selling prices of approximately 12%, as a result of a better product mix, and was partially offset by lower volumes of approximately 7%.
MDG revenues were down by 10.3%, mainly due to Microcontrollers. The decrease was due to lower volumes of approximately 10% while average selling prices remained substantially flat.
In 2018, all product groups registered double-digit revenue increase. Our ADG revenues increased 16.2% for the full year 2018 compared to the full year 2017 on growth in both Power Discrete and Automotive. The increase was primarily due to improved average selling prices of approximately 21% and volumes decreased by approximately 5%. The increase in average selling prices was entirely due to improved product mix, while selling prices remained substantially flat.
AMS revenues grew 19.9%, mainly on the strong increase in Imaging. The increase was due to higher volumes of approximately 12% and higher average selling prices of approximately 8%, which was entirely due to improved product mix of approximately 13%, while selling prices decreased by approximately 5%.
MDG revenues were up by 11.1%, with Digital and Microcontrollers & Memories equally contributing. The increase was primarily due to higher average selling prices of approximately 11%, while volumes remained substantially flat. The increase in average selling prices was due to a better product mix of approximately 13%, while the selling prices effect was negative of approximately 2%.

                                             | Year Ended    | Year Ended    | Year Ended    | % Variation  | % Variation
-------------------------------------------- | ------------- | ------------- | ------------- | ------------ | ------------
2019 vs 2018 2018 vs 2017                    | 2019          | 2018          | 2017          | 2019 vs 2018 | 2018 vs 2017
                                             | (In millions) | (In millions) | (In millions) |              |
Automotive and Discrete Group (ADG)          | $3,606        | $3,556        | $3,059        | 1.4%         | 16.2%
Analog MEMS and Sensors Group (AMS)          | 3,299         | 3,154         | 2,630         | 4.6          | 19.9
Microcontrollers and Digital ICs Group (MDG) | 2,638         | 2,940         | 2,646         | (10.3)       | 11.1
Others                                       | 13            | 14            | 12            | —            | —
Total consolidated net revenues              | $9,556        | $9,664        | $8,347        | (1.1)%       | 15.8%

2019 ADG revenues increased. 4% previous. increase due improved selling prices 9% better product mix offset decrease volumes 8%.
 AMS revenues grew 4. 6% growth Imaging. increase higher selling prices 12% better product mix offset lower volumes 7%.
 MDG revenues down 10. 3% due Microcontrollers. decrease lower volumes 10% selling prices flat.
 2018 product groups registered double-digit revenue increase. ADG revenues increased 16. 2% 2018 2017. due improved selling prices 21% volumes decreased 5%. flat.
 AMS revenues grew 19. increase Imaging. higher volumes 12% higher average selling prices 8% improved product mix 13% selling prices decreased 5%.
 MDG revenues up 11. 1% Digital Microcontrollers Memories. increase higher average selling prices 11% volumes flat. increase better product mix 13% selling prices effect negative 2%.
 Ended Variation
 2019 2018 2018 2017
Automotive Group $3,606,556 $3,059. 2%
 Analog MEMS Sensors Group 3,299 3,154 2,630.
 Microcontrollers Digital ICs Group 2,638 2,940 2,646. 11.
 revenues $9,556 $9,664 $8,347.