Item 6. Selected Financial Data
The selected financial data presented for each of the five years ended December 31, 2019 is derived from our audited consolidated financial statements. The selected financial data presented should be read in conjunction with our consolidated financial statements, the notes to our consolidated financial statements and Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations.”
(1) On January 1, 2019, we adopted Accounting Standards Codification (ASC) 842, Leases, using the modified retrospective method at the beginning of the period of adoption, January 1, 2019, through the recognition of a lease obligation and corresponding right of use asset. Results for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior periods amount were not adjusted and continue to be reported in accordance with ASC 840, Leases.
(2) On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts that were not substantially complete as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with ASC 605, Revenue Recognition.
(3) The Tax Cuts and Jobs Act, enacted on December 22, 2017, reduces the U.S. corporate tax rate from 35% to 21% beginning in 2018. Due to the enactment of the Tax Cuts and Jobs Act, our income tax expense was reduced by $50.6 million for the year ended December 31, 2017 from the re-measurement of our existing deferred tax assets and liabilities.
(4) Over the past five years, we completed 7 acquisitions. In aggregate, these acquisitions have added $343.6 million in goodwill. For additional information on our recent acquisitions, see Note 5 to our consolidated financial statements in Item 8.

                                           |            |            | Year Ended December 31,                  |            |
------------------------------------------ | ---------- | ---------- | ---------------------------------------- | ---------- | ----------
                                           | 2019 (1)   | 2018 (2)   | 2017 (3)                                 | 2016       | 2015
                                           |            |            | (in thousands, except per share amounts) |            |
Statement of Income Data:                  |            |            |                                          |            |
Revenues                                   | $2,222,559 | $1,958,557 | $1,717,018                               | $1,601,596 | $1,550,117
Operating income                           | $138,325   | $112,742   | $98,194                                  | $90,963    | $84,886
Net income                                 | $113,890   | $82,097    | $114,141                                 | $56,391    | $51,127
Basic earnings per share (Class A and B)   | $2.85      | $2.08      | $2.94                                    | $1.48      | $1.36
Diluted earnings per share (Class A and B) | $2.83      | $2.06      | $2.91                                    | $1.47      | $1.36
Dividend per share                         | $1.08      | $1.00      | $0.84                                    | $0.84      | $0.84
Balance Sheet Data:                        |            |            |                                          |            |
Working capital                            | $154,753   | $196,652   | $138,879                                 | $229,659   | $189,276
Goodwill (4)                               | $1,191,259 | $1,085,806 | $1,084,560                               | $955,874   | $919,591
Total assets                               | $2,107,914 | $1,803,871 | $1,744,475                               | $1,598,464 | $1,506,424
Long-term debt                             | $36,500    | $7,500     | $31,000                                  | $—         | $—

Item 6. Selected Financial Data
 five years December 31, 2019 consolidated financial statements. statements notes Item 7's Discussion Analysis Financial Condition Results Operations.
 January 1, 2019 adopted Accounting Standards Codification (ASC) 842, Leases modified retrospective method lease obligation right of use asset. Results reporting periods ASC 842 prior periods ASC 840 Leases.
 January 1, 2018 adopted ASC 606, Revenue Contracts Customers modified retrospective method. Results ASC 606 prior amounts ASC 605 Revenue.
 Tax Cuts Jobs Act 2017 reduces. corporate tax rate 35% to 21% 2018. income tax expense reduced $50. 6 million year ended December 31, 2017 re-measurement deferred tax assets liabilities.
 past five years 7 acquisitions. added $343. 6 million goodwill. Note 5 consolidated financial statements Item 8.
 Year Ended December
2019 2018 2017 2015
 Income
 Revenues $2,222,559 $1,958,557 $1,717,018 $1,601,596,550,117
 Operating income $138,325 $112,742 $98,194,963
 Net income $113,890 $82,097 $114,141 $56,391 $51,127
 earnings.
 earnings.
 Dividend share.
 Balance Sheet
 Working capital $154,753 $196,652 $138,879 $229,659 $189,276
 Goodwill $1,191,259 $1,085,806,084,560 $955,874 $919,591
 Total assets $2,107,914 $1,803,871 $1,744,475 $1,598,464,506,424
 Long-term debt $36,500 $7 $31,000


The purchase was accounted for as a transaction between entities under common control. Assets and liabilities transferred were recorded at historical carrying amounts of Pivotal on the date of the transfer, except for certain goodwill and intangible assets that were recorded in the amounts previously recognized by Dell for Pivotal in connection with Dell’s acquisition of EMC during fiscal 2016. VMware’s previous investment in Pivotal, including any unrealized gain or loss previously recognized in other income (expense), net on the consolidated statements of income, were derecognized. Transactions with Pivotal that were previously accounted for as transactions between related parties were eliminated in the consolidated financial statements for all periods presented. All intercompany transactions and account balances between VMware and Pivotal have been eliminated upon consolidation for all periods presented.
The effect of the change from the combination to the consolidated statements of income was as follows (amounts in millions, except per share amounts):

                                                                                |                  | For the Year Ended |
------------------------------------------------------------------------------------------------------------- | ---------------- | ------------------ | ----------------
                                                                                | January 31, 2020 | February 1, 2019   | February 2, 2018
Total revenue                                                                                | $777             | $639               | $474
Operating income                                                                                | (287)            | (247)              | (239)
Net income                                                                                | (204)            | (832)              | (234)
Net income attributable to VMware                                                                             | (148)            | (772)              | (222)
Net income per weighted-average share attributable to VMware common stockholders, basic for Classes A and B   | $(0.63)          | $(1.95)            | $(0.56)
Net income per weighted-average share attributable to VMware common stockholders, diluted for Classes A and B | $(0.67)          | $(1.93)            | $(0.56)
Other comprehensive income (loss)                                                                             | $—               | $(26)              | $35

purchase transaction between entities. Assets liabilities transferred recorded at historical amounts Pivotal except goodwill intangible assets recorded Dell. VMware’s previous investment in Pivotal unrealized gain loss derecognized. Transactions with Pivotal eliminated in consolidated financial statements. intercompany transactions balances between VMware Pivotal eliminated consolidation.
 effect change from combination to consolidated statements millions
 January 31, 2020 February 1, 2019 February 2, 2018
 Total revenue $777 $639  $474
 Operating income (287) (247) (239)
 Net income (204) (832) (234)
 VMware (148) (772) (222)
 share stockholders. 63). 95). 56)
. 67). 93). 56)
 Other comprehensive income (loss $— $(26) $35


Accrued Warranty
The following table summarizes the activity related to the Company’s product warranty liability during the following periods (in thousands):

                                         | Year Ended    |
---------------------------------------- | ------------- | -------------
                                         | June 30,
2019 | June 30,
2018
Balance beginning of period              | $12,807       | $10,584
Warranties assumed due to acquisitions   | —             | 3,682
New warranties issued                    | 22,919        | 10,491
Warranty expenditures                    | (20,947)      | (11,950)
Balance end of period                    | $14,779       | $12,807

Warranty
 table summarizes warranty liability
 30
 2019
 $12,807 $10,584
 Warranties assumed acquisitions 3,682
 warranties issued 22,919
 Warranty expenditures (20,947),950
 Balance $14,779 $12,807


Financing Receivables and Guarantees The following table summarizes our financing receivables (in millions):
Financing Receivables Our financing arrangements include leases, loans, and financed service contracts. Lease receivables include sales-type and direct-financing leases. Arrangements related to leases are generally collateralized by a security interest in the underlying assets. Our loan receivables include customer financing for purchases of our hardware, software and services and also may include additional funds for other costs associated with network installation and integration of our products and services. We also provide financing to certain qualified customers for long-term service contracts, which primarily relate to technical support services. The majority of the revenue from these financed service contracts is deferred and is recognized ratably over the period during which the services are performed. Financing receivables increased by 2%. We expect to continue to expand the use of our financing programs in the near term.
Financing Guarantees In the normal course of business, third parties may provide financing arrangements to our customers and channel partners under financing programs. The financing arrangements to customers provided by third parties are related to leases and loans and typically have terms of up to three years. In some cases, we provide guarantees to third parties for these lease and loan arrangements. The financing arrangements to channel partners consist of revolving short-term financing provided by third parties, generally with payment terms ranging from 60 to 90 days. In certain instances, these financing arrangements result in a transfer of our receivables to the third party. The receivables are derecognized upon transfer, as these transfers qualify as true sales, and we receive payments for the receivables from the third party based on our standard payment terms.
The volume of channel partner financing was $29.6 billion, $28.2 billion, and $27.0 billion in fiscal 2019, 2018, and 2017, respectively. These financing arrangements facilitate the working capital requirements of the channel partners, and in some cases, we guarantee a portion of these arrangements. The balance of the channel partner financing subject to guarantees was $1.4 billion and $1.0 billion as of July 27, 2019 and July 28, 2018, respectively. We could be called upon to make payments under these guarantees in the event of nonpayment by the channel partners or end-user customers. Historically, our payments under these arrangements have been immaterial. Where we provide a guarantee, we defer the revenue associated with the channel partner and end-user financing arrangement in accordance with revenue recognition policies, or we record a liability for the fair value of the guarantees. In either case, the deferred revenue is recognized as revenue when the guarantee is removed. As of July 27, 2019, the total maximum potential future payments related to these guarantees was approximately $218 million, of which approximately $77 million was recorded as deferred revenue.

                                | July 27, 2019 | July 28, 2018 | Increase (Decrease)
------------------------------- | ------------- | ------------- | -------------------
Lease receivables, net          | $2,326        | $2,576        | $(250)
Loan receivables, net .         | 5,367         | 4,939         | 428
Financed service contracts, net | 2,360         | 2,316         | 44
Total, net                      | $10,053       | $9,831        | $222

Financing Receivables Guarantees table summarizes financing receivables
 include leases loans financed service contracts. sales direct-financing leases. collateralized by security interest. loan receivables include financing hardware software services additional funds network installation integration. provide financing long-term service contracts technical support services. revenue from deferred recognized. Financing receivables increased 2%. expect expand financing programs.
 Financing Guarantees third parties provide financing. leases loans terms up to three years. guarantees. partners short-term financing payment terms 60 to 90 days. receivables. derecognized upon transfer sales receive payments standard terms.
 channel partner financing was $29. 6 billion $28. 2 billion $27. 0 billion in 2019 2018 2017. facilitate working capital requirements guarantee portion. balance channel partner financing subject guarantees was $1. 4 billion $1. 0 billion as of July 27, 2019 July 28, 2018.payments nonpayment channel partners customers. payments immaterial. defer revenue record liability fair value. deferred revenue recognized removed. July 27, 2019 future payments $218 million $77 million deferred revenue.
 July 27, 2019 July 28, 2018 Increase
 Lease receivables $2,326  $2,576  $(250)
 Loan receivables. 5,367  4,939  428
 Financed service contracts 2,360 2,316 44
 Total $10,053 $9,831 $222


Total assets for the Company decreased $76.4 million as of December 31, 2019 as compared to December 31, 2018.  Entertainment and Communications assets decreased $58.8 million due to a decrease in property, plant and equipment primarily as a result of the increased depreciation in 2019 related to Hawaiian Telcom property, plant and equipment exceeding capital expenditures. IT Services and Hardware assets increased by $32.6 million primarily due to the Company’s recognition of operating lease right-of-use assets in the Consolidated Balance Sheets upon adoption of ASU 2016-02.
Corporate assets decreased $50.2 million primarily due to decreased receivables. Lower receivables is partially due to timing of sales in the fourth quarter as well as additional sales of certain receivables under the factoring arrangement as of December 31, 2019 compared to December 31, 2018. Deferred tax assets and liabilities totaled $59.3 million and $11.7 million as of December 31, 2019, respectively. Deferred tax assets and liabilities totaled $47.5 million and $11.4 million as of December 31, 2018, respectively. The increase in deferred tax assets in 2019, as compared to 2018, is due to increased net operating losses in 2019.

                                 |          | As of December 31,
-------------------------------- | -------- | ------------------
(dollars in millions)            | 2019     | 2018
Assets                           |          |
Entertainment and Communications | $1,840.0 | $1,898.8
IT Services and Hardware         | 500.7    | 468.1
Corporate and eliminations       | 313.1    | 363.3
Total assets                     | $2,653.8 | $2,730.2

assets Company decreased $76. 4 million December 31, 2019 2018. Entertainment Communications decreased $58. 8 million property plant equipment increased depreciation 2019 Hawaiian Telcom. IT Services Hardware increased $32. 6 million operating lease right-of-use Balance Sheets ASU 2016-02.
 Corporate assets decreased $50. 2 million decreased receivables. timing additional sales factoring December 2019. Deferred tax assets liabilities $59. 3 million $11. 7 million. $47. 5 million $11. 4 million 2018. increase deferred tax assets increased net operating losses.
 Entertainment Communications $1,840. $1,898.
 IT Services Hardware.
 Corporate.
 assets $2,653. $2.


Restricted Stock Awards and Restricted Stock Unit Awards
For equity based restricted stock and restricted stock unit awards that contain only service conditions for vesting (time-based awards), we calculate the award fair value based on the closing price of CenturyLink common stock on the accounting grant date. We also grant equity-based awards that contain service conditions as well as additional market or performance conditions. For awards having both service and market conditions, the award fair value is calculated using Monte-Carlo simulations. Awards with service as well as market or performance conditions specify a target number of shares for the award, although each recipient ultimately has the opportunity to receive between 0% and 200% of the target number of shares. For awards with service and market conditions, the percentage received is based on our total shareholder return over the three-year service period versus that of selected peer companies. For awards with service and performance conditions, the percentage received depends upon the attainment of one or more financial performance targets during the two or three-year service period.
The following table summarizes activity involving restricted stock and restricted stock unit awards for the year ended December 31, 2019:
(1) Shares granted whose related performance conditions were not finalized at December 31, 2019, were excluded from this figure.
During 2018, we granted 9.7 million shares of restricted stock and restricted stock unit awards at a weighted-average price of $17.02. During 2017, we granted 5.2 million shares of restricted stock and restricted stock unit awards at a weighted-average price of $22.02. The total fair value of restricted stock that vested during 2019, 2018 and 2017, was $118 million, $169 million and $60 million, respectively.

                                | Number of shares | Weighed-Average Grant Date Fair Value
------------------------------- | ---------------- | -------------------------------------
                                | (In thousands)   |
Non-vested at December 31, 2018 | 17,059           | $19.65
Granted(1)                      | 9,780            | 12.41
Vested                          | (9,038)          | 19.54
Forfeited                       | (1,757)          | 18.62
Non-vested at December 31, 2019 | 16,044           | 15.42

Restricted Stock Unit Awards
 equity awards service conditions calculate fair value closing price CenturyLink common stock grant date. grant equity awards service market performance conditions. value calculated Monte-Carlo simulations. Awards specify target shares recipient receive 0% 200% target shares. service market percentage based shareholder return three-year peer companies. performance financial performance targets.
 table summarizes activity restricted stock unit awards December 31, 2019
 Shares granted performance conditions not finalized December 31, 2019 excluded.
 2018 granted 9. 7 million shares-average price $17. 02. 2017 granted 5. 2 million shares $22. 02. total fair value stock 2019 2018 2017 $118 million $169 million $60 million.
 shares-Average Grant Date Fair Value
 Non-vested December 31, 2018 17,059 $19. 65
 9,780. 41
 Vested. 54
 Forfeited.
-vested December 31, 16.


Defined Benefit Plan
We maintain defined benefit pension plans for certain of our non-U.S. employees in the U.K., Germany, and Philippines. Each plan is managed locally and in accordance with respective local laws and regulations.
In order to measure the expense and related benefit obligation, various assumptions are made including discount rates used to value the obligation, expected return on plan assets used to fund these expenses and estimated future inflation rates. These assumptions are based on historical experience as well as facts and circumstances. An actuarial analysis is used to measure the expense and liability associated with pension benefits.
In connection with the acquisition of Artesyn in September of 2019, the Company acquired certain pension plans and, as a result, started including the related balances in its Consolidated Balance Sheets at December 31, 2019 and the expenses attributable to these plans for the period from September 10, 2019 to December 31, 2019 in its Consolidated Statement of Operations. See Note 2. Business Acquisitions for more details on this transaction.
ADVANCED ENERGY INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (continued) (in thousands, except per share amounts)
The information provided below includes one pension plan which is part of discontinued operations. As such, all related liabilities and expenses are reported in discontinued operations in the Company’s Consolidated Balance Sheets and Consolidated Statements of Operations for all periods presented.
The Company’s projected benefit obligation and plan assets for defined benefit pension plans at December 31, 2019 and 2018 and the related assumptions used to determine the related liabilities are as follows:

                                                | Years Ended December 31, |
----------------------------------------------- | ------------------------ | -----------
                                                | 2019                     | 2018
Projected benefit obligation, beginning of year | $  33,178                | $  34,498
Acquisition                                     | 48,350                   | 1,063
Service cost                                    | 272                      | 841
Interest cost                                   | 1,211                    | 802
Actuarial loss                                  | (193)                    | (988)
Benefits paid                                   | (1,779)                  | (1,113)
Translation adjustment                          | 2,223                    | (1,925)
Projected benefit obligation, end of year       | $  83,262                | $  33,178
Fair value of plan assets, beginning of year    | $  13,433                | $  14,181
Acquisitions                                    | 102                      | 981
Actual return on plan assets                    | 380                      | 675
Contributions                                   | 644                      | 828
Benefits paid                                   | (1,176)                  | (1,086)
Actuarial gain                                  | 1,064                    | (1,357)
Translation adjustment                          | 456                      | (789)
Fair value of plan assets, end of year          | $  14,903                | $  13,433
Funded status of plan                           | $  (68,359)              | $  (19,745)

Benefit Plan
 maintain pension plans non-U. S. employees. Germany Philippines. managed locally local laws regulations.
 expense benefit obligation assumptions discount rates return assets future inflation rates. assumptions based historical experience facts circumstances. actuarial analysis expense liability pension benefits.
 acquisition Artesyn 2019 acquired pension plans balances Consolidated Balance Sheets December 31, 2019 expenses. Note 2. Business Acquisitions details.
 ADVANCED. CONSOLIDATED FINANCIAL STATEMENTS
 pension plan discontinued operations. liabilities expenses reported operations Consolidated Balance Sheets Statements.
 projected benefit obligation assets benefit pension plans December 31, 2019 2018 assumptions
 Years December
 Projected benefit obligation $ 33,178 34,498
 Acquisition 48,350 1,063
 Service cost 272
 Interest cost 1,211
 Actuarial loss (193) (988)
 Benefits paid (1,779,113
adjustment 2,223
 benefit obligation year $ 83,262 33,178
 $ 13,433 14,181
 Acquisitions 102
 return 380
 Contributions 644
 Benefits (1,176
 gain 1,064,357
 adjustment
 year $ 14,903 13,433
 Funded status (68,359 (19,745


Cash Flows
Our cash flows from operations are significantly impacted by timing of invoicing and collections of accounts receivable and annual bonus payments, as well as payments of payroll, payroll taxes, and other taxes.
We expect that we will continue to generate positive cash flows from operations on an annual basis, although this may fluctuate significantly on a quarterly basis. In particular, we typically use more cash during the first fiscal quarter ended October 31, as we generally pay cash bonuses to our employees for the prior fiscal year during that period and pay seasonally higher sales commissions from increased customer orders booked in our fourth fiscal quarter.
We believe that our existing cash and cash equivalents and sources of liquidity will be sufficient to fund our operations for at least the next 12 months. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of our spending to support our research and development efforts, investments in cloud infrastructure and operating costs, and expansion into other markets.
We also may invest in or acquire complementary businesses, applications, or technologies, which may require the use of significant cash resources and/or additional financing. The following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included elsewhere in this Annual Report on Form 10-K (in thousands):

                                          | Fiscal years ended July 31, |
----------------------------------------- | --------------------------- | ----------
                                          | 2019                        | 2018
Net cash provided by operating activities | $116,126                    | $140,459
Net cash used in investing activities     | $(301,433)                  | $(537,584)
Net cash provided by financing activities | $3,954                      | $573,000

Cash Flows
 impacted by invoicing accounts receivable bonus payments payroll.
 expect positive cash flows may fluctuate quarterly. use more cash first fiscal quarter October 31, bonuses higher sales commissions increased orders fourth fiscal quarter.
 existing cash equivalents liquidity fund operations next 12 months. future capital requirements depend revenue growth expansion sales marketing spending research development investments cloud infrastructure operating costs expansion other markets.
 invest businesses technologies require cash resources additional financing. summary cash flows consolidated financial statements Annual Report Form 10-K
 Fiscal years ended July 31,
 Net cash operating activities $116,126 $140,459
 investing activities $(301,433)  $(537,584)
 financing activities $3,954 $573,000


Long-term employee benefit obligations
The obligation comprises an obligation under the incentive programs to deliver Restricted Share Units in TORM plc at a determinable price to the entity's key personnel. The RSUs granted entitle the holder to acquire one TORM A-share.
The program was established during the year and comprises the following number of shares in TORM plc:
In 2017, the Board agreed to grant a total of 866.6 RSUs to other management. The RSUs to other management were subject to a three-year vesting period, with one third of the grant amount vesting at each anniversary date beginning on 1 January, 2018. The exercise price of each vested RSU is following certain adjustments for dividends at DKK 93.6 and an exercise period of six months.
In 2018, the Board agreed to grant a total of 944,468 RSU’s to other management. The vesting period of the program is three years for key employees and three years for the Executive Director. The exercise price is set to DKK 53.7. The exercise period is 12 months after the vesting date for key employees and 12 months after the vesting date for the Executive Director. The fair value of the options granted in 2018 was determined using the Black-Scholes model and is not material. The average remaining contractual life for the restricted shares as per 31 December 2018 is 1.1 years (2017: 1.3 years).
In 2019, the Board agreed to grant a total of 1,001,100 RSUs to other management. The vesting period of the program is three years for key employees. The exercise price is set to DKK 53.7. The exercise period is 12 months after the vesting date. The fair value of the options granted in 2019 was determined using the Black-Scholes model and is not material. The average remaining contractual life for the restricted shares as per 31 December 2019 is 1.5 years.

Number of shares (1,000)      | 2019    | 2018    | 2017
----------------------------- | ------- | ------- | -------
Outstanding as of 1 January   | 2,719.1 | 2,611.2 | 1,999.8
Granted during the period     | 1,001.1 | 907.3   | 866.6
Exercised during the period   | -529.4  | -       | -
Expired during the period     | -785.3  | -764.0  | -233.9
Forfeited during the period   | -177.2  | -35.4   | -21.3
Outstanding as of 31 December | 2,228.3 | 2,719.1 | 2,611.2
Exercisable as of 31 December | -       | 255.3   | 255.3

employee benefit obligations
 deliver Restricted Share Units TORM plc price key personnel. RSUs entitle TORM A-share.
 program established shares TORM
 2017 Board. 6 RSUs management. three-year vesting period one third grant amount 1 January 2018. exercise price RSU DKK 93. 6 exercise period six months.
 2018 Board,468 RSU’s management. vesting period three years key employees Executive Director. exercise price DKK 53. 7. 12 months after vesting. fair value determined Black-Scholes model not material. average remaining contractual life shares 1. years (2017. 3 years.
 2019 Board 1,001,100 RSUs management. vesting period three years. exercise price DKK 53. 7. 12 months after vesting date. fair value determined Black-Scholes model not material. average remaining contractual life 1. 5 years.
 Number shares 2019 2018 2017
 1 January 2,719. 2,611. 1,999.
 1,001.. 6
 Exercised -529. 4
 Expired -785. -764. -233. 9
 Forfeited -177.
 Outstanding 31 December 2,228. 2,719. 2,611.
 Exercisable 255. 255.


9. Pensions continued
Defined benefit plans continued
ii) Amounts in the financial statements continued
e) Movements in the fair value of plans’ assets

                                            | 2019      | 2018
------------------------------------------- | --------- | ---------
                                            | $ million | $ million
At 1 January                                | 254.2     | 282.6
Interest income on plans’ assets            | 7.0       | 7.0
Employer contributions                      | 6.6       | 6.8
Benefit payments                            | (11.4)    | (12.1)
Plan administration expenses                | (0.6)     | (0.5)
Re-measurement gain/(loss) on plans’ assets | 25.8      | (14.2)
Exchange adjustment                         | 9.5       | (15.4)
Fair value of plans’ assets                 | 291.1     | 254.2

. Pensions
 benefit plans
 financial statements
 Movements fair value assets
 January 254. 282.
 Interest income 7.
 Employer contributions 6.
 Benefit payments (11. (12.
 Plan administration expenses.
 Re-measurement gain assets 25. (14.
 Exchange adjustment 9. (15.
 Fair value assets 291. 254.


Contract Estimates
Use of the cost-to-cost or other similar methods of revenue recognition requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. Revisions or adjustments to estimates of the transaction price, estimated costs at completion and estimated profit or loss of a performance obligation are often required as work progresses under a contract, as experience is gained, as facts and circumstances change and as new information is obtained, even though the scope of work required under the contract may not change. In determining the estimated costs at completion, we have to make assumptions regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, estimated increases in wages and prices for materials, performance by our subcontractors, and the availability and timing of funding from our customer, among other variables. Revisions or adjustments to our estimated transaction price and estimated costs at completion may also be required if contract modifications occur. The revisions in contract estimates, if significant, can materially affect our results of operations and cash flows, and in some cases result in liabilities to complete contracts in a loss position. Based upon our history, we believe we have the ability to make reasonable estimates for these items. We have accounting policies and controls in place to address these, as well as other contractual and business arrangements to properly account for long-term contracts, and we continue to monitor and improve such policies, controls, and arrangements. For other information on such policies, controls and arrangements, see our discussion in Item 9A of this Form 10-K.
Products and services provided under long-term, fixed-price contracts represented approximately 97% of our sales for 2019. Because of the significance of the judgments and estimation processes, it is likely that materially different amounts could be recorded if we used different assumptions or if our underlying circumstances were to change. For example, if underlying assumptions were to change such that our estimated profit rate at completion for all fixed-price contracts accounted for under the cost-to-cost percentage-of-completion method was higher or lower by one percentage point, our 2019 operating income would have increased or decreased by approximately $6.5 million. When adjustments in estimated contract revenues or estimated costs at completion are required, any changes from prior estimates are recognized by recording adjustments in the current period for the inception-to-date effect of the changes on current and prior periods using the cumulative catch-up method of accounting. When estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recorded in the period the loss is determined.
The aggregate impact of net changes in contract estimates are presented in the table below (amounts in thousands).
For other information on accounting policies we have in place for recognizing sales and profits and the impact of our adoption of ASC 606, see our discussion under “Revenue Recognition” in Note 1 to the Consolidated Financial Statements.

                                             |            | Years Ended September 30, |
-------------------------------------------- | ---------- | ------------------------- | --------
                                             | 2019       | 2018                      | 2017
Operating income (loss)                      | $  (2,235) | $  (6,986)                | $  5,737
Net income (loss) from continuing operations | (2,351)    | (5,146)                   | 3,208
Diluted earnings per share                   | (0.08)     | (0.19)                    | 0.12

Contract Estimates
 cost-to-cost revenue recognition requires dependable estimates revenue cost design manufacture delivery products services. Revisions adjustments to transaction price costs completion profit loss required as work progresses experience facts circumstances change new information work. costs at completion assumptions labor productivity complexity work availability materials increases wages prices performance subcontractors availability funding. Revisions transaction price costs required if contract modifications occur. revisions can affect results operations cash flows result in liabilities contracts loss. believe make reasonable estimates. accounting policies controls contractual business arrangements for long contracts monitor improve policies controls arrangements. see discussion Item 9A Form 10-K.
 Products services long-term fixed-price contracts represented 97% of sales for 2019. likely different amounts could be recorded if different assumptions circumstances change.if assumptions estimated profit rate fixed-price contracts 2019 operating income or $6. 5 million. adjustments revenues costs changes recognized current cumulative catch-up. When costs exceed revenue provision entire loss recorded.
 impact of net changes contract estimates presented in table (amounts thousands.
 accounting policies recognizing sales profits impact adoption ASC 606 “Revenue Recognition” Note 1 Consolidated Financial Statements.
 Years Ended September 30,
 2019 2018 2017
 Operating income (loss) $ (2,235) $ (6,986) $ 5,737
 Net income (loss) from operations (2,351) (5,146) 3,208
 Diluted earnings per share.


2017 Acquisitions
Cloudmark, Inc
On November 21, 2017 (the “Cloudmark Acquisition Date”), pursuant to the terms of the merger agreement, the Company acquired all shares of Cloudmark, Inc. (“Cloudmark”), a leader in messaging security and threat intelligence for internet service providers and mobile carriers worldwide. As part of the acquisition, Cloudmark’s Global Threat Network was incorporated into Company’s cloud-based Nexus platform, which powers its email, social media, mobile, and SaaS security effectiveness.

On November 21, 2017 (the “Cloudmark Acquisition Date”), pursuant to the terms of the merger agreement, the Company acquired all shares of Cloudmark, Inc. (“Cloudmark”), a leader in messaging security and threat intelligence for internet service providers and mobile carriers worldwide. As part of the acquisition, Cloudmark’s Global Threat Network was incorporated into Company’s cloud-based Nexus platform, which powers its email, social media, mobile, and SaaS security effectiveness.
The Company believes that with this acquisition, it will benefit from increased messaging threat intelligence from the analysis of billions of daily emails, malicious domain intelligence, and visibility into fraudulent and malicious SMS messages directed to mobile carriers worldwide. The Company also expects to achieve savings in corporate overhead costs for the combined entities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of acquired net identifiable assets and, as a result, goodwill was recorded in connection with the acquisition.
At the Cloudmark Acquisition Date, the consideration transferred was $107,283, net of cash acquired of $31,973.
Per the terms of the merger agreement, unvested stock options and unvested restricted stock units held by Cloudmark employees were canceled and exchanged for the Company’s unvested stock options and unvested restricted stock units, respectively. The fair value of $91 of these unvested awards was attributed to pre-combination services and included in consideration transferred. The fair value of $1,180 was allocated to post-combination
Proofpoint, Inc. Notes to Consolidated Financial Statements (Continued) (dollars and share amounts in thousands, except per share amounts)
services. The unvested awards are subject to the recipient’s continued service with the Company, and $1,180 is recognized ratably as stock-based compensation expense over the required remaining service period.
The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill:

                            |            | Estimated
--------------------------- | ---------- | -----------
                            |            | Useful Life
                            | Fair value | (in years)
Current assets              | $37,390    | N/A
Fixed assets                | 543        | N/A
Non-current assets          | 74         | N/A
Liabilities                 | (4,422)    | N/A
Deferred revenue            | (15,400)   | N/A
Customer relationships      | 15,300     | 8
Order backlog               | 1,400      | 1
Core/developed technology   | 18,500     | 4
Deferred tax liability, net | (7,905)    | N/A
Goodwill                    | 93,776     | Indefinite
                            | $139,256   |

2017 Acquisitions
 Cloudmark,
 November 21, 2017 Company acquired shares Cloudmark, Inc. leader messaging security threat intelligence. Cloudmark’s Global Threat Network incorporated Nexus platform email social media mobile SaaS security.
 November 21, 2017 acquired shares Cloudmark. messaging security. Global Threat Network incorporated Nexus platform email social media mobile SaaS security.
 increased messaging threat intelligence emails malicious domain visibility fraudulent SMS messages. expects savings corporate overhead costs. contributed purchase price excess estimated fair value acquired assets goodwill recorded.
 Cloudmark Acquisition Date consideration transferred $107,283 net cash acquired $31,973.
 merger unvested stock options restricted stock units Cloudmark employees canceled exchanged for units. fair value $91 pre-combination services consideration transferred. fair value $1,180 post-combination
 Proofpoint, Inc.Consolidated Financial Statements share amounts thousands
. unvested awards subject service $1,180 stock-based compensation service.
 table summarizes values assets liabilities intangible goodwill
 Estimated
 Current assets $37,390
 Fixed assets
 Non-current assets 74
 Liabilities (4,422)
 Deferred revenue (15,400
 Customer relationships
 Order backlog 1
 technology 18,500
 Deferred tax liability (7,905)
 Goodwill 93,776
 $139,256


SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the years ended December: (in millions)
(1) Excludes approximately $5.6 million of reserves related to notes receivable and tax refund receivables originated in 2016.
(2) Excludes approximately $0.4 million of reserves related to non-trade receivables.
(3) Amounts represent gross revenue and cost reversals to the estimated sales returns and allowances accounts.
(4) Amounts in 2019 and 2018 are reported within accrued expenses and other current liabilities, as Product Returns Liability (see Note 4 and 9).
(5) Amounts in 2019 and 2018 are reported within prepaid expenses and other current assets.

Description                         | Balance at Beginning of Period |         | Write-offs | Other      | Balance at End of Period
----------------------------------- | ------------------------------ | ------- | ---------- | ---------- | ------------------------
Allowance for doubtful accounts     |                                |         |            |            |
2019                                | $1.0                           | $1.0    | $(0.8)     | $0.0       | $1.2 (1)
2018                                | $1.1                           | $0.7    | $(0.8)     | $0.0       | $1.0 (1)
2017                                | $9.1                           | $1.0    | $(0.9)     | $0.0       | $1.1 (1) (2)
Allowance for sales returns (4)     |                                |         |            |            |
2019                                | $0.0                           | $0.0    | $0.0       | $0.0       | $0.0
2018                                | $0.0                           | $0.0    | $0.0       | $0.0       | $0.0
2017                                | $1.4                           | $1.4    | $0.0       | $(1.4) (3) | $1.4
Allowance for inventory returns (5) |                                |         |            |            |
2019                                | $0.0                           | $0.0    | $0.0       | $0.0       | $0.0
2018                                | $0.0                           | $0.0    | $0.0       | $0.0       | $0.0
2017                                | $(0.6)                         | $(0.5)  | $0.0       | $0.6 (3)   | $(0.5)
Allowance for deferred tax assets   |                                |         |            |            |
2019                                | $18.3                          | $(0.3)  | $0.0       | $(1.2)     | $16.8)
2018                                | $18.3                          | $(0.3)  | $0.0       | $0.3       | $18.3
2017                                | $69.0                          | $(28.6) | $(2.9)     | $(19.2)    | $18.3

SCHEDULE II VALUATION QUALIFYING ACCOUNTS
 years ended December millions
 Excludes $5. 6 million reserves notes receivable tax refund receivables originated 2016.
 Excludes $0. 4 million reserves non-trade receivables.
 Amounts represent gross revenue cost reversals estimated sales returns allowances accounts.
 Amounts 2019 2018 reported accrued expenses current liabilities Product Returns Liability (see Note 4 9).
 Amounts 2019 2018 reported prepaid expenses current assets.
 Balance Beginning Period Write-offs Balance End Period
 Allowance doubtful accounts
 $1. 0 $1. 8). $1. 2
 $1. 1. $1.
 $9. $1. 9). $1. 1
 Allowance sales returns (4)
 $0.
.
 $1. $1.
 Allowance inventory returns (5)
.
.. 0. 0.
 2017. 6). 5). 6 (3). 5)
 Allowance deferred tax assets
 2019 $18. 3. 3). 2). 8)
 2018. 3. 3). 0. 3. 3
 2017. 6). 9). 2).


GasLog Ltd. and its Subsidiaries
Notes to the consolidated financial statements (Continued)
For the years ended December 31, 2017, 2018 and 2019
(All amounts expressed in thousands of U.S. Dollars, except share and per share data)
25. Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholders value.
The Group monitors capital using a gearing ratio, which is total debt divided by total equity plus total debt. The gearing ratio is calculated as follows:

                                       | As of December 31, |
-------------------------------------- | ------------------ | ---------
                                       | 2018               | 2019
Borrowings, current portion            | 520,550            | 255,422
Borrowings, non-current portion        | 2,307,909          | 2,891,973
Lease liabilities, current portion     | 6,675              | 9,363
Lease liabilities, non-current portion | 199,424            | 195,567
Total debt                             | 3,034,558          | 3,352,325
Total equity                           | 1,983,122          | 1,649,853
Total debt and equity                  | 5,017,680          | 5,002,178
Gearing ratio                          | 60.48%             | 67.01%

GasLog. Subsidiaries
 consolidated financial statements
 December 31, 2017 2018 2019
 amounts. Dollars
. Capital Risk Management
 strong credit rating capital ratios maximize shareholders value.
 monitors gearing ratio debt divided equity. calculated
 December 31,
 2019
 Borrowings 520,550 255,422
 non 2,307,909 2,891,973
 Lease liabilities 6,675 9
 199,424 195,567
 debt,558 3,352,325
 equity 1,983,122 1,649,853
 5,017,680 5,002,178
 Gearing ratio 60. 48%.


11 Intangible assets
(a) Intangible assets
RIGHTS AND LICENCES
Certain licences that NEXTDC possesses have an indefinite useful life and are carried at cost less impairment losses and are subject to impairment review at least annually and whenever there is an indication that it may be impaired.
Other licences that NEXTDC acquires are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the estimated useful life. The estimated useful life and amortisation method are reviewed at the end of each annual reporting period.
INTERNALLY GENERATED SOFTWARE
Internally developed software is capitalised at cost less accumulated amortisation. Amortisation is calculated using the straight-line basis over the asset’s useful economic life which is generally two to three years. Their useful lives and potential impairment are reviewed at the end of each financial year.
SOFTWARE UNDER DEVELOPMENT
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs capitalised include external direct costs of materials and services and employee costs.
Assets in the course of construction include only those costs directly attributable to the development phase and are only recognised following completion of technical feasibility and where the Group has an intention and ability to use the asset.

                                       | Rights and licences | Internally generated software | Software under development | Total
-------------------------------------- | ------------------- | ----------------------------- | -------------------------- | -------
Movements                              | $'000               | $'000                         | $'000                      | $'000
30 June 2019                           |                     |                               |                            |
Opening net book amount at 1 July 2018 | 13                  | 6,385                         | 6,509                      | 12,907
Additions – internally developed       | -                   | -                             | 11,896                     | 11,896
Amortisation                           | -                   | (1,116)                       | -                          | (1,116)
Transfers between classes              | -                   | 2,121                         | (2,121)                    | -
Disposals                              | -                   | (9)                           | -                          | (9)
Closing net book amount                | 13                  | 7,381                         | 16,284                     | 23,678

Intangible assets
 RIGHTS LICENCES
 licences NEXTDC indefinite useful life carried cost less impairment losses subject impairment review annually.
 Other licences carried cost less accumulated amortisation impairment losses. Amortisation recognised estimated useful life. reviewed annual reporting period.
 INTERNALLY GENERATED
 software capitalised cost less accumulated amortisation. calculated economic life two to three years. potential impairment reviewed financial year.
 SOFTWARE UNDER DEVELOPMENT
 Costs developing products systems acquiring software licenses benefits capitalised software. materials services employee costs.
 Assets construction include costs development recognised following technical feasibility Group use asset.
 Rights licences Internally generated software Software under development
 $'000
 30 June 2019
 Opening net book amount 1 July 2018 6,385
 internally developed 11,896
 Amortisation
Transfers classes 2,121,121
 Disposals
 Closing book 7,381 16,284 23,678


Total CO2 emissions FY19
1 Tonnes of carbon dioxide equivalent.
2 Absolute carbon emissions divided by revenue in millions.
Auto Trader is required to measure and
report its direct and indirect greenhouse
gas (‘GHG’) emissions by the Companies Act
2006 (Strategic Report and Directors’ Report)
Regulations 2013. The greenhouse gas
reporting period is aligned to the financial
reporting year. The methodology used to
calculate our emissions is based on the
financial consolidation approach, as
defined in the Greenhouse Gas Protocol,
A Corporate Accounting and Reporting
Standard (Revised Edition). Emission
factors used are from UK government
(‘BEIS’) conversion factor guidance for
the year reported.
Auto Trader is required to measure and report its direct and indirect greenhouse gas (‘GHG’) emissions by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. The greenhouse gas reporting period is aligned to the financial reporting year. The methodology used to calculate our emissions is based on the financial consolidation approach, as defined in the Greenhouse Gas Protocol, A Corporate Accounting and Reporting Standard (Revised Edition). Emission factors used are from UK government (‘BEIS’) conversion factor guidance for the year reported.
The report includes the ‘Scope 1’ (combustion of fuel) in relation to company cars and ‘Scope 2’ (purchased electricity and gas) emissions associated with our offices. We have chosen to include the emissions associated with leased company cars in Scope 1, as we are responsible for these emissions.
We have chosen to present a revenue intensity ratio as this is a relevant indicator of our growth and is aligned with our business strategy. The reduction in our GHG emissions is due to a reduction in the fuel emissions from our company car fleet, as the fleet has reduced. We have also reduced the amount of electricity we use, and this coupled with a decrease in BEIS conversion factors has also contributed to our Scope 2 reduction.

                    | FY19  | FY18  | FY17  | FY16
------------------- | ----- | ----- | ----- | -----
Scope 1             | 263   | 390   | 491   | 565
Manchester          | 213   | 281   | 361   | 357
London              | 44    | 60    | 76    | 88
Scope 2             | 258   | 340   | 437   | 445
Total               | 521   | 731   | 928   | 1,010
Revenue             | 355.1 | 330.1 | 311.5 | 281.6
Carbon intensity    | 1.47  | 2.21  | 2.98  | 3.59
Year-on-year change | -34%  | -26%  | -17%  |

CO2 emissions FY19
 Tonnes carbon.
 emissions divided revenue millions.
 Auto Trader measure
 report indirect
 emissions Companies Act
 2006
 Regulations 2013.
 reporting period aligned financial
 reporting year. methodology
 emissions
 financial consolidation approach
 Greenhouse Gas Protocol
 Corporate Accounting Reporting
 Standard. Emission
 factors UK government
 conversion factor guidance
.
 Auto Trader report emissions Companies Act 2006 Regulations 2013. reporting period aligned financial reporting year. methodology financial consolidation approach Greenhouse Gas Protocol Corporate Accounting Reporting Standard. Emission factors government conversion factor guidance.
 report includes fuel company cars (purchased electricity gas emissions offices. emissions leased company cars Scope 1.
 revenue intensity ratio indicator growth business strategy. reduction emissions due fuel emissions company car fleet. electricity decrease BEIS conversion factors Scope 2 reduction.

 Scope 1 263 390 491 565
 Manchester 213 281 361
 London 44 76
 2 258 437 445
 Total 521 731 928 1,010
 Revenue. 311. 281.
 Carbon intensity. 47.
-year -34% -26% -17%


Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):

                                  | December 31, 2019 | December 31, 2018
--------------------------------- | ----------------- | -----------------
Accrued compensation and benefits | $12,227           | $15,283
Accrued tax liabilities           | 4,354             | 4,455
Lease liabilities                 | 5,109             | —
Other                             | 6,066             | 5,553
Total accrued liabilities         | $27,756           | $25,291

Accrued Liabilities
 December 31, 2019 2018
 compensation benefits $12,227 $15,283
 tax 4,354
 Lease 5,109
 6,066 5,553
 $27,756 $25,291


Total Other (Income) Expense, Net
Total other income for the year ended December 31, 2019 was $6.6 million compared to $0.5 million of other expense for the year ended December 31,
2018. Interest income increased due to interest earned on investing our public offering cash proceeds. Interest expense decreased due to having no outstanding borrowings during the year ended December 31, 2019. We discuss borrowings under “Liquidity and Capital Resources” below. Other (income) expense, net was $0.9 million other income in the year ended December 31, 2019 compared to $0.6 million of other income in the year ended December 31, 2018, primarily due to our earnout liabilities. We estimate the fair value of earnout liabilities related to business combinations quarterly. During the year ended December 31, 2019, the adjustments to fair value decreased the carrying value of the earnout liability for our acquisition of Indix, resulting in other income of $1.7 million, partially offset by an increase in the carrying value of the earnout liabilities for our acquisitions of Compli and Portway, which resulted in other expense of $0.6 million. The fair value of the Indix acquisition earnout liability decreased at December 31, 2019, from the fair value at acquisition in February 2019, due primarily to the last three earnout milestones, which are nonfinancial, being more difficult to complete within the required timeframe than initially assessed. During the year ended December 31, 2018, the adjustments to fair value decreased the carrying value of the earnout liabilities for prior acquisitions, resulting in other income of $0.4 million.

                                  |                       | For the Year Ended December 31, |                            |                       |             |
--------------------------------- | --------------------- | ------------------------------- | -------------------------- | --------------------- | ----------- | ----------------
                                  |                       | 2019                            |                            | 2018                  | $ Change    |
                                  | As reported (ASC 606) | Impacts from Adoption           | Without Adoption (ASC 605) | As Reported (ASC 605) | As Reported | Without Adoption
                                  |                       | (dollars in thousands)          |                            |                       |             |
Other (income) expense, net       |                       |                                 |                            |                       |             |
Interest income                   | $(6,037)              | $ -                             | $(6,037)                   | $(1,553)              | $(4,484)    | $(4,484)
Interest expense                  | 289                   | -                               | 289                        | 2,608                 | (2,319)     | (2,319)
Other (income) expense, net       | (865)                 | -                               | (865)                      | (583)                 | (282)       | (282)
Total other (income) expense, net | $(6,613)              | $ -                             | $(6,613)                   | $472                  | $(7,085)    | $(7,085)

(Income Expense Net
 December 31, 2019 $6. 6 million compared $0. 5 million December 31,
 2018. Interest income increased public offering cash proceeds. expense decreased no outstanding borrowings 2019. discuss borrowings “Liquidity Capital Resources”. expense net $0. 9 million 2019 compared $0. 6 million December 2018 due earnout liabilities. estimate fair value liabilities quarterly. 2019 adjustments decreased liability acquisition Indix income $1. 7 million offset increase Compli and Portway expense $0. 6 million. fair value Indix acquisition earnout liability decreased December 31, 2019 February 2019 last three earnout milestones nonfinancial difficult. December 31, 2018 adjustments fair value decreased value earnout liabilities prior acquisitions income $0. 4 million.
 Year Ended December 31,
 2019 2018
 Impacts Adoption
(dollars thousands
 Other (income expense net
 Interest income $(6,037) $(1,553) $(4,484)
 Interest expense 289 2,608 (2,319)
 expense net (865) (583) (282)
 Total expense net $(6,613) $472 $(7,085)


Deferred Revenue and Customer Liabilities
Deferred revenue and customer liabilities consisted of the following (in thousands):
The Company expects to recognize the majority of its deferred revenue as of December 31, 2019 over the next 180 days. Revenues of $3.7 million were recognized during the year ended December 31, 2019 from amounts included in deferred revenue at December 31, 2018. Revenues of $4.4 million were recognized during the year ended December 31, 2018 from amounts included in deferred revenue at January 1, 2018.
The Company expects to recognize the majority of the customer arrangements with termination rights into revenue as the Company has not historically experienced a high rate of contract terminations.
Estimated refund liabilities are generally resolved in 180 days, once it is determined whether the requisite service levels and client requirements were achieved to settle the contingency.

                                              | December 31, |
--------------------------------------------- | ------------ | -------
                                              | 2019         | 2018
Deferred revenue                              | $3,012       | $3,655
Customer arrangements with termination rights | 15,024       | 16,404
Estimated refund liabilities                  | 8,585        | 10,117
                                              | $26,621      | $30,176

Deferred Revenue Customer Liabilities
 expects majority deferred revenue December 31, 2019. Revenues $3. 7 million recognized revenue 2018. Revenues $4. 4 million recognized deferred January 1, 2018.
 recognize majority customer arrangements termination rights revenue high contract terminations.
 Estimated refund liabilities resolved 180 days service levels requirements.
 Deferred revenue $3,012 $3,655
 Customer arrangements termination rights 15,024 16
 Estimated refund liabilities 8,585 10
 $26,621 $30,176


Operating income in the fourth quarter grew on a sequential and year-over-year basis to $460 million compared to $336 million and $443 million in the prior and year-ago quarters, respectively.
Operating income

                              |                   | Three Months Ended       |
----------------------------- | ----------------- | ------------------------ | -----------------
                              | December 31, 2019 | September 29, 2019       | December 31, 2018
                              |                   | (Unaudited, in millions) |
Operating income              | $460              | $336                     | $443
As percentage of net revenues | 16.7%             | 13.1%                    | 16.8%

income fourth quarter grew $460 million compared $336 $443 million prior quarters.
 Three Months Ended
 December 31, 2019 December 31, 2018
 millions
 $460 $336 $443
 percentage net revenues. 7%. 1%.


(6) Intangible Assets
Intangible assets consist of the following (in thousands):
During 2019, we periodically assessed whether any indicators of impairment existed related to our intangible assets. As of each interim period end during the year, we concluded that a triggering event had not occurred that would more likely than not reduce the fair value of our intangible assets below their carrying values.
Amortization expense recognized in 2019, 2018 and 2017 was $23,671,000, $15,737,000 and $16,812,000, respectively.

                         | December 31, |
------------------------ | ------------ | --------
                         | 2019         | 2018
Customer relationships   | $336,455     | $159,566
Other                    | 15,621       | 5,555
                         | 352,076      | 165,121
Accumulated amortization | (73,492)     | (52,942)
Intangible assets, net   | 278,584      | 112,179

Intangible Assets
 2019 assessed indicators impairment. triggering event value values.
 Amortization expense 2019 2018 2017 $23,671,000 $15,737,000 $16,812,000.
 31,
 Customer relationships $336,455 $159,566
 15,621 5,555
 352,076 165,121
 Accumulated amortization (73,492) (52,942)
 Intangible assets 278,584 112,179


Revenue
Our revenue consists of fees generated from cloud subscriptions, software licensing, maintenance, professional services, and hardware sales.
Cloud Subscriptions Revenue Year 2019 compared with year 2018 In 2017, we released Manhattan Active™ Solutions accelerating our business transition to cloud subscriptions. As a result, cloud subscriptions revenue increased $23.7 million, or 103%, to $46.8 million in 2019 compared to 2018 as customers began to purchase. our SaaS offerings rather than a traditional perpetual license. Our customers increasingly prefer cloud-based solutions, including existing customers that are migrating from on-premise to cloud-based offerings. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $20.3 million, $2.7 million and $0.7 million, respectively.
Year 2018 compared with year 2017
Cloud subscriptions revenue increased $13.5 million to $23.1 million in 2018 compared to 2017 as customers began to purchase our SaaS offerings rather than a traditional perpetual license. Cloud subscriptions revenue for the Americas, EMEA and APAC segments increased $11.3 million, $1.8 million and $0.4 million, respectively. The EMEA segment began recognizing cloud subscription revenue for the first time in 2017 while the APAC segment began in 2018.
Software License Revenue Year 2019 compared with year 2018 Software license revenue increased $3.5 million to $48.9 million in 2019 compared to 2018. License revenue for the Americas and EMEA segments increased $6.1 million and $0.1 million, respectively, and license revenue for the APAC segment decreased $2.7 million, in 2019 over 2018. The perpetual license sales percentage mix across our product suite in 2019 was approximately 80% warehouse management solutions.
Year 2018 compared with year 2017 Software license revenue decreased $26.9 million to $45.4 million in 2018 compared to 2017. The decrease was influenced by (1) extended sales cycles and evaluations for some of our contracts, and (2) the business transition to cloud subscriptions, which resulted in traditional perpetual license deals closing as cloud deals based on customer demand. License revenue for the Americas and EMEA segments decreased $15.7 million and $11.5 million, respectively, in 2018 over 2017, while license revenue for the APAC segment increased $0.3 million. The perpetual license sales percentage mix across our product suite in 2018 was approximately 80% warehouse management solutions.
Software license revenue decreased $26.9 million to $45.4 million in 2018 compared to 2017. The decrease was influenced by (1)
extended sales cycles and evaluations for some of our contracts, and (2) the business transition to cloud subscriptions, which resulted
in traditional perpetual license deals closing as cloud deals based on customer demand. License revenue for the Americas and EMEA segments decreased $15.7 million and $11.5 million, respectively, in 2018 over 2017, while license revenue for the APAC segment increased $0.3 million. The perpetual license sales percentage mix across our product suite in 2018 was approximately 80% warehouse management solutions.
Maintenance Revenue
Year 2019 compared with year 2018
Maintenance revenue increased $2.2 million in 2019 compared to 2018 primarily due to (1) an increase in the first-year maintenance revenue; (2) our annual renewal rate of customers subscribing to maintenance, which was greater than 90%; and (3) increases in the maintenance renewal prices. Maintenance revenue for the Americas, EMEA and APAC segments increased $1.4 million, $0.4 million and $0.4 million, respectively, compared to 2018.
Year 2018 compared with year 2017
Maintenance revenue increased $4.0 million in 2018 compared to 2017 primarily due to (1) an increase in the first-year maintenance revenue; (2) our annual renewal rate of customers subscribing to maintenance, which was greater than 90%; and (3) increases in the maintenance renewal prices. Maintenance revenue for the Americas, EMEA and APAC segments increased $1.1 million, $2.2 million and $0.7 million, respectively, compared to 2017.
Services Revenue Year 2019 compared with year 2018 Services revenue increased $30.8 million, or 9%, in 2019 compared to 2018. The Americas, EMEA and APAC segments increased $17.8 million, $10.3 million and $2.7 million, respectively, compared to 2018.
Year 2019 compared with year 2018
Services revenue increased $30.8 million, or 9%, in 2019 compared to 2018. The Americas, EMEA and APAC segments increased $17.8 million, $10.3 million and $2.7 million, respectively, compared to 2018.
Year 2018 compared with year 2017 Services revenue increased $3.2 million in 2018 compared to 2017 primarily due to improving demand in the Americas and solid growth in EMEA. Services revenue for the Americas and EMEA segment increased $1.0 million and $6.9 million, respectively, and services revenue for the APAC segment decreased $4.7 million, compared to 2017.
Services revenue increased $3.2 million in 2018 compared to 2017 primarily due to improving demand in the Americas and solid growth in EMEA. Services revenue for the Americas and EMEA segment increased $1.0 million and $6.9 million, respectively, and services revenue for the APAC segment decreased $4.7 million, compared to 2017.
Hardware
Hardware sales, net decreased $1.5 million, or -10% in 2019 compared to 2018. We adopted the new ASC 606 standard as of
January 1, 2018 and elected to use the modified retrospective method. Historical hardware sales prior to the adoption of ASC 606
were recorded on a gross basis, as we were the principal in the transaction in accordance with the previous standard, ASC 605-45.
Under the new standard, we are an agent in the transaction as we do not physically control the hardware which we sell. Accordingly, starting January 1, 2018, we recognize our hardware revenue net of related cost which reduces both hardware revenue and cost of sales as compared to our accounting prior to 2018. For comparison purposes only, had we implemented ASC 606 using the full
retrospective method, we would have also presented hardware revenue net of cost for prior periods as shown below.

% Change vs. Prior  |          |                    |          |      |      |      |      |
------------------- | -------- | ------------------ | -------- | ---- | ---- | ---- | ---- | ----
                    | Year     | % of Total Revenue |          |      |      |      |      |
                    | 2019     | 2018               | 2017     | 2019 | 2018 | 2019 | 2018 | 2017
(in thousands)      |          |                    |          |      |      |      |      |
Cloud subscriptions | $46,831  | $23,104            | $9,596   | 103% | 141% | 8%   | 4%   | 2%
Software license    | 48,855   | 45,368             | 72,313   | 8%   | -37% | 8%   | 8%   | 12%
Maintenance         | 149,230  | 147,033            | 142,988  | 1%   | 3%   | 24%  | 26%  | 24%
Services            | 360,516  | 329,685            | 326,502  | 9%   | 1%   | 58%  | 59%  | 55%
Hardware            | 12,517   | 13,967             | 43,190   | -10% | -68% | 2%   | 3%   | 7%
Total revenue       | $617,949 | $559,157           | $594,599 | 11%  | -6%  | 100% | 100% | 100%

 cloud subscriptions software licensing maintenance services hardware sales.
 Cloud Subscriptions Revenue 2019 2017 Manhattan ActiveTM Solutions cloud subscriptions. revenue increased $23. 7 million $46. 8 million 2019. SaaS. customers prefer cloud-based solutions migrating. subscriptions revenue Americas EMEA APAC increased $20. 3 million $2. 7 million $0. 7 million.
 increased $13. 5 million $23. 1 million SaaS. Americas EMEA APAC increased $11. 3 million $1. 8 million $0. 4 million. EMEA revenue 2017 APAC 2018.
 Software License Revenue increased $3. 5 million to $48. 9 million. Americas EMEA increased $6. 1 million $0. 1 million APAC decreased $2. 7 million. perpetual license sales 80%.
 revenue decreased $26. 9 million to $45. 4 million 2018. influenced extended sales cycles transition. Americas EMEA decreased $15. 7 million.million 2018 revenue APAC increased $0. 3 million. license sales percentage 80% warehouse management solutions.
 Software license revenue decreased $26. 9 million to $45. 4 million 2018 2017. influenced
 extended sales cycles transition cloud subscriptions
 deals. revenue Americas EMEA decreased $15. 7 million $11. 5 million APAC increased $0. 3 million. license sales percentage 80% warehouse management solutions.
 increased $2. 2 million first-year maintenance revenue annual renewal rate 90% prices. Americas EMEA APAC increased $1. 4 million $0. 4 million $0. 4 million.
 increased $4. 0 million first-year maintenance revenue annual renewal rate 90% renewal prices. Americas EMEA APAC increased $1. 1 million $2. 2 million $0. 7 million.
 increased $30. 8 million. Americas EMEA APAC segments increased $17. 8 million $10. 3 million $2. 7 million.
 increased $30. 8 million.Americas EMEA APAC segments increased $17. 8 million $10. 3 million $2. 7 million compared 2018.
 Services revenue increased $3. 2 million due improving demand Americas growth EMEA. Americas EMEA increased $1. 0 million $6. 9 million APAC decreased $4. 7 million.
 Services revenue increased $3. 2 million 2018 due demand Americas growth EMEA. Americas EMEA increased $1. 0 million $6. 9 million APAC decreased $4. 7 million.
 sales net decreased $1. 5 million -10% 2019 compared 2018. adopted ASC 606 standard
 January 1, 2018 modified retrospective method. Historical hardware sales
 recorded gross basis principal transaction.
 new standard agent transaction control hardware. hardware revenue net of cost reduces hardware revenue cost sales 2018. ASC 606
 hardware revenue net cost prior periods.
 Change.
 Total Revenue
thousands
 Cloud subscriptions $46,831 $23,104 $9,596 103% 141%
 Software license 48,855 45,368 72,313 -37%
 Maintenance 149,230 147,033 142,988
 Services 360,516 329,685 326,502 58%
 Hardware 12,517 13,967 43,190 -10% -68%
 Total revenue $617,949 $559,157 $594,599 -6%


Note 9. Intangible Assets, net
The Company’s definite-lived intangible assets as of December 31, 2019 and 2018 consisted of the following:
Amortization of definite-lived intangible assets is provided over their estimated useful lives on a straight-line basis or the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews its definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Amortization expense from continuing and discontinued operations was $8,879 and $9,150 for the years ended December 31, 2019 and 2018, respectively

December 31, 2019        |                        |                        |            |
------------------------ | ---------------------- | ---------------------- | ---------- | --------
                         | Customer Relationships | Developed Technologies | Trade Name | Total
Gross carrying amount    | $52,000                | 32,000                 | 3,000      | 87,000
Accumulated amortization | (13,866)               | (18,286)               | (3,000)    | (35,152)
Intangible assets, net   | $38,134                | $13,714                | $—         | $51,848

. Intangible Assets
 assets December 31, 2019 2018
 Amortization over estimated lives economic benefits. reviews assets impairment. Amortization expense operations $8,879 $9,150 December 31, 2019 2018
 31, 2019
 Customer Relationships Developed Technologies Trade
 Gross carrying amount $52,000 32,000 87,000
 Accumulated amortization (13,866) (18,286) (3,000) (35,152)
 Intangible assets net $38,134 $13,714 $51,848


ALTERNATIVE PERFORMANCE MEASURES – continued
Return on Invested Capital (RoIC): TORM defines RoIC as earnings before interest and tax (EBIT) less tax, divided by the average invested capital for the period. Invested capital is defined below.
RoIC expresses the returns generated on capital invested in the Group. The progression of RoIC is used by TORM to measure progress against our longer-term value creation goals outlined to investors. RoIC is calculated as follows:

USDm                                  | 2019    | 2018    | 2017
------------------------------------- | ------- | ------- | -------
Operating profit/(loss) (EBIT)        | 205.9   | 2.8     | 39.5
Tax                                   | -0.8    | -1.6    | -0.8
EBIT less Tax                         | 205.1   | 1.2     | 38.7
Invested capital, opening balance     | 1,469.4 | 1,406.0 | 1,387.7
Invested capital, ending balance      | 1,786.0 | 1,469.4 | 1,406.0
Average invested capital for the year | 1,627.7 | 1,437.7 | 1,396.9
Return on Invested Capital (RoIC)     | 12.6%   | 0.1%    | 2.8%

PERFORMANCE MEASURES
 Return on Invested Capital defines earnings before interest tax divided average invested capital.
 returns capital invested Group. longer-term value goals. calculated
 Operating profit(loss (EBIT 205. 2. 39.
.
 EBIT less Tax 205. 38.
 Invested capital opening balance 1,469. 1,406. 1,387.
 1,786. 1,469. 1,406.
 Average invested capital year 1,627. 1,437. 1,396.
 Return on Invested Capital (RoIC 12. 6%. 1%.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except for share and per share data)
NOTE 15 — Shareholders' Equity
A roll forward of common shares outstanding is as follows:

                                 | As of December 31, |
-------------------------------- | ------------------ | ----------
                                 | 2019               | 2018
Balance at beginning of the year | 32,750,727         | 32,938,466
Repurchases                      | (420,770)          | (342,100)
Restricted stock unit issuances  | 142,449            | 154,361
Balance at end of period         | 32,472,406         | 32,750,727

FINANCIAL STATEMENTS
 15 Shareholders' Equity
 shares
 December 31,
 Balance 32,750,727 32,938,466
 Repurchases (420,770 (342,100)
 Restricted stock issuances 142,449 154,361
 end period 32,472,406 32,750,727


The allowance for doubtful accounts represents management's estimate of uncollectible balances. We determine the allowance based on known troubled accounts, historical experience and other currently available evidence. We write off trade receivables when the likelihood of collection of a trade receivable balance is considered remote.
The rollforward of allowance for doubtful accounts is as follows (in millions):

                              |        | Year ended December 31, |
----------------------------- | ------ | ----------------------- | ------
                              | 2019   | 2018                    | 2017
Beginning balance             | $(1.3) | $(1.9)                  | $(2.2)
Bad debt expense              | (1.6)  | (0.6)                   | (0.8)
Write-offs, net of recoveries | 1.6    | 1.2                     | 1.1
Ending balance                | $(1.3) | $(1.3)                  | $(1.9)

allowance for doubtful accounts management estimate uncollectible balances. determine troubled accounts historical experience evidence. write off receivables likelihood collection remote.
 rollforward allowance doubtful accounts
 ended December 31,
 Beginning balance $(1. 3). 9).
 Bad debt expense (1.
 Write-offs recoveries 1. 6.
 Ending balance $(1.


ACQUISITIONS National Storage has successfully transacted 35 acquisitions and 4 development sites in FY19 and continues to pursue high-quality acquisitions across Australia and New Zealand. The ability to acquire and integrate strategic accretive acquisitions is one of National Storage’s major competitive advantages and a cornerstone of its growth strategy. This active growth strategy also strengthens and scales the National Storage operating platform which drives efficiencies across the business.
WINE ARK Wine Ark, Australia’s largest wine storage provider is part of the National Storage group and houses over two million bottles of fine wine across 15 centres for clients located in over 30 countries. There are few businesses in Australia with more experience when it comes to storing and managing premium wine. Throughout FY19 Wine Ark continued to strengthen its relationship and involvement in the greater wine trade supporting the Wine Communicators of Australia, Sommeliers Association of Australia, Wine Australia and Commanderie de Bordeaux (Australian Chapter).

REGION              | NUMBER OF CENTRES | TOTAL NLA
------------------- | ----------------- | ---------
Brisbane            | 5                 | 25,000
Gold Coast          | 4                 | 6,500
Sunshine Coast      | 1                 | 6,500
Central Coast (NSW) | 6                 | 20,600
Wollongong          | 3                 | 12,700
Melbourne           | 2                 | 8,600
Adelaide            | 3                 | 15,500
Perth               | 2                 | 10,800
Auckland (NZ)       | 3                 | 27,000
Hamilton (NZ)       | 4                 | 21,600
Rotorua (NZ)        | 1                 | 5,000
Tauranga (NZ)       | 1                 | 3,200
Total Acquisitions  | 35                | 163,000

National Storage transacted 35 acquisitions 4 development sites FY19 high acquisitions Australia New Zealand. acquisitions competitive growth strategy. growth strategy strengthens platform efficiencies.
 WINE ARK largest wine storage provider National Storage group houses two million bottles wine 15 centres 30 countries. experience storing managing premium wine. FY19 wine Wine Communicators Australia Sommeliers Association Australia Wine Australia Commanderie de Bordeaux.
 REGION CENTRES
 Brisbane 25,000
 Gold Coast 6
 Sunshine Coast
 Central Coast 20,600
 Wollongong 12,700
 Melbourne 8
 Adelaide
 Perth
 Auckland 27,000
 Hamilton 21,600
 Rotorua
 Tauranga 3
 Total Acquisitions 163,000


The unrecognized tax benefit at December 31, 2019 and 2018, was $29.0 million and $28.4 million, respectively, of which $22.4 million and $22.6 million, respectively, are included in other noncurrent liabilities in the consolidated balance sheets. Of the total unrecognized tax benefit amounts at December 31, 2019 and 2018, $28.2 million and $27.5 million, respectively, represent the net unrecognized tax benefits that, if recognized, would favorably impact the effective income tax rate in the respective years.
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 is as follows (in thousands):
The Company files income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions, and many foreign jurisdictions. The United States, Germany, India, Ireland, Luxembourg, Mexico, the United Kingdom, and Uruguay are the main taxing jurisdictions in which the Company operates. The years open for audit vary depending on the tax jurisdiction. In the United States, the Company’s tax returns for years following 2015 are open for audit. In the foreign jurisdictions, the tax returns open for audit generally vary by jurisdiction between 2003 and 2018.
The Company’s Indian income tax returns covering fiscal years 2003, 2005, 2010 through 2013, and 2016 are under audit by the Indian tax authority. Other foreign subsidiaries could face challenges from various foreign tax authorities. It is not certain that the local authorities will accept the Company’s tax positions. The Company believes its tax positions comply with applicable tax law and intends to vigorously defend its positions. However, differing positions on certain issues could be upheld by tax authorities, which could adversely affect the Company’s financial condition and results of operations.
The Company believes it is reasonably possible that the total amount of unrecognized tax benefits will decrease within the next 12 months by approximately $11.7 million due to the settlement of various audits and the expiration of statutes of limitations. The Company accrues interest related to uncertain tax positions in interest expense or interest income and recognizes penalties related to uncertain tax positions in other income or other expense. As of December 31, 2019 and 2018, $1.2 million is accrued for the payment of interest and penalties related to income tax liabilities. The aggregate amount of interest and penalties expense (benefit) recorded in the statements of operations for the years ended December 31, 2019, 2018, and 2017, is $0.2 million, $0.0 million, and $(0.8) million, respectively.

                                                                    | 2019     | 2018    | 2017
------------------------------------------------------------------- | -------- | ------- | --------
Balance of unrecognized tax benefits at beginning of year           | $28,406  | $27,237 | $24,278
Increases for tax positions of prior years                          | 2,784    | 315     | 2,478
Decreases for tax positions of prior years                          | (96 )    | (61)    | (114 )
Increases for tax positions established for the current period      | 2,542    | 1,185   | 1,677
Decreases for settlements with taxing authorities                   | (220 )   | —       | (154 )
Reductions resulting from lapse of applicable statute of limitation | (4,462 ) | (115)   | (1,155 )
Adjustment resulting from foreign currency translation              | 46       | (155)   | 227
Balance of unrecognized tax benefits at end of year                 | $29,000  | $28,406 | $27,237

unrecognized tax benefit at December 31, 2019 2018 $29. 0 million $28. 4 million $22. 4 million $22. 6 million noncurrent liabilities. December 31, 2019 2018 $28. 2 million $27. 5 million net effective income tax rate.
 reconciliation tax benefits December 31
 Company files income tax returns U. S. federal state jurisdictions foreign jurisdictions. United States Germany India Ireland Luxembourg Mexico United Kingdom Uruguay main jurisdictions. years audit vary jurisdiction. returns 2015 open audit. foreign jurisdictions vary 2003 2018.
 Indian income tax returns 2003, 2005, 2010 2016 under audit. foreign subsidiaries face challenges. local authorities accept tax positions. comply law. differing positions affect financial condition.
 unrecognized tax benefits decrease 12 months by $11. 7 million due to settlement audits expiration statutes of limitations. accrues interest uncertain tax positions recognizes penalties.December 31, 2019 2018 $1. 2 million accrued interest penalties income tax liabilities. interest penalties December 31, 2019 2018 2017 $0. 2 million $0. million $. 8) million.
 unrecognized tax benefits $28,406 $27,237 $24,278
 Increases 2,784,478
 Decreases (96
 2,542 1,185 1,677
 Decreases settlements authorities (220
 Reductions statute limitation (4,462 (115),155
 Adjustment foreign currency translation 46
 tax benefits end year $29,000 $28,406 $27,237


Note 3 – Inventories, net
Inventories consisted of the following:

                       |         | December 31,
---------------------- | ------- | ------------
                       | 2019    | 2018
Ingredients            | $ 1,942 | $ 1,580
Packaging              | 2,230   | 2,072
Finished goods         | 2,220   | 2,165
Total inventories, net | $ 6,392 | $ 5,817

Inventories
 December 31,
 Ingredients 1,942 1,580
 Packaging 2,230 2,072
 Finished goods 2,220 2,165
 inventories $ 6,392


Results of Operations
Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018
Our management reviews and analyzes several key financial measures in order to manage our business and assess the quality of and variability of our service revenue, operating results and cash flows. The following summary tables present a comparison of our results of operations with respect to certain key financial measures. The comparisons illustrated in the tables are discussed in greater detail below.

                                   |         | Year Ended December 31, |
---------------------------------- | ------- | ----------------------- | --------------
                                   | 2019    | 2018                    | Percent Change
Other Operating Data               |         |                         |
Average Revenue Per Unit (ARPU)    |         |                         |
ARPU—on-net                        | $ 461   | $ 480                   | (3.8)%
ARPU—off-net                       | $ 1,097 | $ 1,155                 | (5.0)%
Average price per megabit          | $ 0.62  | $ 0.82                  | (23.9)%
Customer Connections—end of period |         |                         |
On-net                             | 74,554  | 68,770                  | 8.4%
Off-net                            | 11,660  | 10,974                  | 6.3%

Operations
 Ended December 31, 2019 Compared 2018
 management reviews analyzes financial measures service revenue results cash flows. tables comparison results measures. discussed.
 Ended December 31,
 2019 2018 Percent Change
 Operating Data
 Average Revenue Per Unit)
-net $ $ 480.
-net $ 1,097 $ 1,155.
 Average price megabit $. 62 $. 82.
 Customer Connections—end period
 On-net 74,554 68,770.
 Off-net 11,660 10,974. 3%


Share-Based Compensation
The following table shows a summary of share-based compensation expense included in the Consolidated Statements of Operations during the periods presented (in thousands):
Amounts presented above include share-based compensation expense of $0.8 million for fiscal year 2017, which is recorded as discontinued operations related to employees of our Compute business.
As of September 27, 2019, the total unrecognized compensation costs related to outstanding stock options, restricted stock awards and units including awards with time-based, performance-based, and market-based vesting was $47.0 million, which we expect to recognize over a weighted-average period of 2.9 years.

                                    |         | Fiscal Years |
----------------------------------- | ------- | ------------ | -------
                                    | 2019    | 2018         | 2017
Cost of revenue                     | $2,936  | $3,869       | $3,189
Research and development            | 8,551   | 13,448       | 10,565
Selling, general and administrative | 12,305  | 14,620       | 22,581
Total                               | $23,792 | $31,937      | $36,335

Share-Based Compensation
 expense Consolidated Statements Operations
 $0. 8 million 2017 discontinued operations Compute.
 September 27, 2019 unrecognized compensation costs stock options stock awards units $47. 0 million 2. 9 years.
 Fiscal Years
 2017
 revenue $2,936 $3,869,189
 Research development 8,551 13,448 10,565
 Selling general administrative 12,305 14,620 22,581
 $23,792 $31,937 $36,335


SELECTED FINANCIAL DATA
The following data should be read in conjunction with the consolidated financial statements and accompanying notes included elsewhere in the Annual Report on Form 10-K. Fiscal 2018 and 2017 have been recast to reflect the Company’s retrospective adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, and related amendments, collectively referred to as Accounting Standards Codification (“ASC”) 606. Fiscal 2016 and 2015 were not recast. Net income for fiscal 2018 and 2019 has been impacted by the reduced U.S. corporate tax rate enacted by the Tax Cuts and Jobs Act (“TCJA”) of 2017, and fiscal 2018 net income contains the related adjustment for the re-measurement of deferred taxes. Acquisitions have affected revenue and net income in fiscal 2019 as well as the historical periods presented.
(1) Revenue includes license sales, support and service revenues, and hardware sales, less returns and allowances.

                             |            |            | (In Thousands, Except Per Share Data) |             |
---------------------------- | ---------- | ---------- | ------------------------------------- | ----------- | -----------
                             |            |            | YEAR ENDED JUNE 30,                   |             |
Income Statement Data        | 2019       | 2018       | 2017                                  | 2016        | 2015
                             |            |            |                                       | *Unadjusted | *Unadjusted
Revenue (1)                  | $1,552,691 | $1,470,797 | $1,388,290                            | $1,354,646  | $1,256,190
Net Income                   | $271,885   | $365,034   | $229,561                              | $248,867    | $211,221
Basic earnings per share     | $3.52      | $4.73      | $2.95                                 | $3.13       | $2.60
Diluted earnings per share   | $3.52      | $4.70      | $2.93                                 | $3.12       | $2.59
Dividends declared per share | $1.54      | $1.36      | $1.18                                 | $1.06       | $0.94
Balance Sheet Data           |            |            |                                       |             |
Total deferred revenue       | $394,306   | $369,915   | $368,151                              | $521,054    | $531,987
Total assets                 | $2,184,829 | $2,033,058 | $1,868,199                            | $1,815,512  | $1,836,835
Long-term debt               | $—         | $—         | $50,000                               | $—          | $50,102
Stockholders’ equity         | $1,429,013 | $1,322,844 | $1,099,693                            | $996,210    | $991,534

FINANCIAL DATA
 consolidated financial statements Annual Report Form 10-K. Fiscal 2018 2017 Accounting Standards Update 2014-09 Revenue Contracts Accounting Standards Codification 606. 2016 2015 not recast. Net income 2018 2019 impacted reduced U. corporate tax rate Tax Cuts Jobs Act 2017 2018 adjustment deferred taxes. Acquisitions affected revenue income 2019.
 Revenue includes license support service hardware sales less returns allowances.
 ENDED JUNE 30
 Income Statement Data 2019 2018 2017 2016
 Revenue $1,552,691 $1,470,797 $1,388,290
 Net Income $271,885 $365,034 $229,561 $248,867 $211,221
 Basic earnings per share $3. 52 $4. $2.
 earnings share $3. $4.
 Dividends per share $1. 54..
 Balance
 deferred revenue $394,306 $369,915,151 $521,054
 assets $2,184,829,033,058,868,199,815,512,836,835
 Long-term debt
 Stockholders’ equity $1,429,013 $1,322,844,099,693,210


49. Notes on related parties
In financial year 2018/19, METRO maintained the following business relations to related companies:
Transactions with associated companies and other related parties
The services received totalling €93 million (2017/18: €96 million) that METRO companies received from associates and other related parties in financial year 2018/19 consisted mainly of real estate leases in the amount of €79 million (2017/18: €80 million), thereof €76 million from associates; (2017/18: €78 million) and the rendering of services in the amount of €15 million (2017/18: €16 million), thereof €7 million from joint ventures; (2017/18: €8 million). Other future financial commitments in the amount of €667 million (2017/18: €719 million) consist of tenancy agreements with the following associated companies: OPCI FWP France, OPCI FWS France, Habib METRO Pakistan and the Mayfair group. In financial year 2018/19, METRO companies provided services to companies belonging to the group of associates and related parties in the amount of €8 million (2017/18: €8 million). A dividend of €38 million has been paid out to a shareholder with significant influence. Business relations with related parties are based on contractual agreements providing for arm’s length prices. As in financial year 2017/18, there were no business relations with related natural persons and companies of management in key positions in financial year 2018/19.
Related persons (compensation for management in key positions)
The management in key positions consists of members of the Management Board and the Supervisory Board of METRO AG. Thus, the expenses for members of the Management Board of METRO AG amounted to €6.9 million (2017/18: €5.2 million) for short-term benefits and €3.7 million (2017/18: €7.0 million) for post-employment benefits. Thereof an amount of €3.0 million relates to termination benefits paid in financial year 2018/19. The expenses for existing compensation programmes with long-term incentive effect in financial year 2018/19, calculated in accordance with IFRS 2, amounted to €2.6 million (2017/18: €0.7 million). The short-term compensation for the members of the Supervisory Board of METRO AG amounted to €2.2 million (2017/18: €2.2 million). The total compensation for members of the Management Board in key positions in financial year 2018/19 amounted to €15.4 million (2017/18: €15.1 million).

€ million                                           | 2017/2018 | 2018/2019
--------------------------------------------------- | --------- | ---------
Services provided                                   | 8         | 8
Associates                                          | 5         | 5
Joint ventures                                      | 3         | 3
Miscellaneous related parties                       | 0         | 0
Services received                                   | 96        | 93
Associates                                          | 78        | 76
Joint ventures                                      | 8         | 7
Miscellaneous related parties                       | 10        | 10
Receivables from services provided, as of 30/9      | 0         | 0
Associates                                          | 0         | 0
Joint ventures                                      | 0         | 0
Miscellaneous related parties                       | 0         | 0
Liabilities from goods/services received as of 30/9 | 1         | 1
Associates                                          | 0         | 0
Joint ventures                                      | 0         | 0
Miscellaneous related parties                       | 1         | 1

. Notes related parties
 2018/19 METRO maintained business relations companies
 Transactions
 services €93 million (2017/18 €96 million real estate leases €79 million €76 million from associates rendering services €15 million €7 million from joint ventures. future financial commitments €667 million €719 million tenancy agreements OPCI FWP France OPCI FWS France Habib METRO Pakistan Mayfair group. provided services €8 million. dividend €38 million paid shareholder influence. Business relations contractual agreements arm’s length prices. no business relations with related persons companies management key positions 2018/19.
 management
 Management Board Supervisory Board METRO AG. expenses for €6. 9 million €5. 2 million short-term benefits €3. 7 million. post-employment benefits. €3. 0 million termination benefits 2018/19. expenses compensation programmes 2018/19 €2. 6 million (2017/18 €0. 7 million. short-term compensation Supervisory Board €2.2 million (2017/18 €2. compensation Management Board 2018/19 €15. 4 million (2017/18 €15. 1 million.
 million 2017/2018 2018/2019
 Services 8
 Associates 5
 Joint ventures 3
 Miscellaneous
 Services 96 93
 Associates 78 76
 Joint ventures 8
 10
 Receivables services 30/9
 Joint ventures
 Liabilities goods/services 30/9
 Associates
 Joint ventures